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Enforcement Release: July 23, 2021
OFAC Enters Into $1,400,301.40 Settlement with Payoneer Inc. for Apparent Violations of Multiple Sanctions Programs
Payoneer Inc. (“Payoneer”), a publicly traded New York-based online money transmitter and provider of prepaid access, has agreed to remit $1,400,301.40 to settle its potential civil liability for 2,260 apparent violations of multiple sanctions programs. Payoneer processed 2,241 payments for parties located in certain jurisdictions and regions subject to sanctions including the Crimea region of Ukraine, Iran, Sudan, and Syria, and 19 payments on behalf of sanctioned persons on OFAC’s List of Specially Designated Nationals and Blocked Persons (“SDN List”).
Payoneer’s sanctions compliance program deficiencies at the relevant times—including with respect to screening, testing, auditing, and transaction review procedures—enabled persons in these jurisdictions and regions and on the SDN List to engage in approximately $802,117.36 worth of transactions. The settlement amount reflects OFAC’s determination that...
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1) The Payoneer case is the latest in a string of payment processing cases that serve to highlight OFAC’s diligence expectations, rather than the scope and operation of the laws it administers.
Payoneer is an unusual actor, relative to the typical entity that gets fined by OFAC for processing prohibited financial transactions. The company’s primary customer base consists of other businesses, some of which are small freelance and service providers, and others of which are among the largest e-commerce companies in the world (e.g. Amazon). In that regard, it is possible, though OFAC does not say one way or the other, that some of the violations at issue here related to payments made in connection with sales by other extremely large customers that are expected to screen their customers (e.g. third-party sellers that operate on the Amazon.com platform). If OFAC’s screening...