A U.S. financial institution settled OFAC charges for processing transactions in violation of the Ukraine-Related Sanctions Regulations ("URSR").
According to OFAC, the bank processed a "large" funds transfer (approximately $29 million) that involved the property interest of a designated oil company in Cyprus. OFAC alleged that the bank had reason to know of the sanctioned oil company's interest in the transaction, based on communications from U.S. counsel of a non-accountholder party. In particular, these communications contained conflicting statements, some of which called into question whether the sanctioned oil company retained an interest in the fuel oil or funds involved in the transaction. According to OFAC, the financial institution did not conduct further due diligence to "independently corroborate the statements of U.S. counsel" for the non-accountholder party, and processed the transaction in the belief that it did not violate the URSR.
In addition, OFAC found that the financial institution violated Executive Order 13685 by processing 61 transactions that were destined for accounts within a Ukrainian financial institution named on OFAC's Specially Designated Nationals and Blocked Persons List. OFAC concluded that the bank had not included in its sanctions screening tools certain Business Identifier Codes.
OFAC determined that the financial institution did not voluntarily self-disclose its violations, but stated that both violations constituted "non-egregious" cases. To settle its potential civil liability for the violations, the bank agreed to pay $583,100 in total. Among other considerations, the bank also agreed to maintain robust compliance procedures that adequately account for potential risks.