Enforcement Release: August 26, 2021
OFAC Enters Into a $2,329,991 Settlement with Bank of China (UK) Limited for Apparent Violations of the Sudan Sanctions Regulations
Bank of China (UK) Limited (“BOC UK”), located in London, the United Kingdom, has agreed to remit $2,329,991 to settle its potential civil liability for processing transactions in apparent violation of OFAC’s now-repealed Sudan sanctions program, which prohibited the exportation, directly or indirectly, to Sudan of any goods, technology, or services from the United States. Specifically, between September 4, 2014 and February 24, 2016, BOC UK exported financial services from the U.S. by processing 111 commercial transactions totaling $40,599,184 through the U.S. financial system on behalf of parties in Sudan. This settlement amount reflects OFAC’s determination that BOC UK’s self-identified apparent violations were voluntarily self-disclosed and constitute a non- egregious case.
Description of the Conduct Leading to the Apparent...
1) EXPORTATION OF SERVICES TO A SANCTIONED DESTINATION - POTENTIALLY NOVEL APPLICATION OF THE “INDIRECT PROVISION OF SERVICES” CONCEPT
From a jurisdictional basis standpoint, part of the enforcement action is standard, while part is somewhat novel.
It is common for OFAC to penalize non-U.S. person banks for “causing” U.S. person banks, including U.S. correspondent banks acting solely in an intermediary capacity, to “export financial services” to a sanctioned country by processing a payment for a transaction that is sufficiently related to the sanctioned country.
In the typical situation, the non-U.S. person bank intentionally “causes” the sanctions violation by, e.g. removing sanctions-implicating information from payment messages that would otherwise alert the U.S. person banks to the sanctions risk. But on occasion OFAC will penalize non-U.S. person banks for negligently “causing” U.S. persons to violate sanctions regulations, as was the case here.
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