Enforcement Release: July 15, 2022
OFAC Settles with American Express National Bank for $430,500 Related to Apparent Violations of Foreign Narcotics Kingpin Sanctions Regulations
American Express National Bank (“Amex”), a subsidiary of American Express Company, which provides charge and credit card products and travel-related services to consumers and businesses, has agreed to remit $430,500 to settle its potential civil liability for 214 apparent violations of OFAC’s Kingpin sanctions. Over the course of two months, Amex processed transactions for an account whose supplemental card holder was designated in connection with illegal drug distribution and money laundering. A combination of human error and sanctions compliance program deficiencies enabled the account to engage in $155,189.42 worth of transactions. The settlement amount reflects OFAC’s determination that the apparent violations were not voluntarily self-disclosed and were non-egregious.
Description of the Apparent Violations
On November 16,...
1) This set of violations hinges on the assumption that an entire credit card account is blocked when one supplemental user is a blocked person. In other words, the blocked supplemental user has an “interest” in all transactions processed through the account, even when they are transactions of the primary accountholder.
A violation of the blocking requires a U.S. person to deal in “property” in which a blocked person has an “interest”. Query: what was the “property” here? Was it the actual funds transferred in connection with the individual credit card transactions, or was it the account itself? If the former, it may be notable that a blocked person supplemental user of a credit card has an “interest” in all funds transfers made in connection with the account. If OFAC deemed the entire credit card account blocked by virtue of the blocked supplemental...