ENFORCEMENT INFORMATION FOR DECEMBER 3, 2013
Compass Bank Settles Potential Civil Liability for an Apparent Violation of the Sudanese Sanctions Regulations: Compass Bank ("Compass"), Birmingham, Alabama has agreed to remit $19,125 to settle potential civil liability for one apparent violation of §§ 538.205 and 538.206 of the Sudanese Sanctions Regulations ("SSR"), 31 C.F.R. part 538. The Office of Foreign Assets Control ("OFAC") has determined that Compass did not voluntarily self-disclose the apparent violation and that the apparent violation constituted a non-egregious case. OFAC concluded that the apparent violation described below was not the result of willful or reckless conduct. The total base penalty amount for the apparent violation was $25,000.
On February 10, 2011, Compass originated an £8,900 (approximately $14,898) wire transfer on behalf of an individual customer, which was destined for a third-country company’s account at a financial institution in the United Kingdom. An invoice accompanying the wire transfer request indicated that the purpose of the transaction was a payment for the shipment of a tractor from the United Kingdom to Omdurman, Sudan. A Compass OFAC Assistant Manager and a Compass BSA OFAC Manager reviewed the wire request and associated invoice, and determined that the payment did not violate the SSR because none of the parties involved were on the List of Specially Designated Nationals and Blocked Persons, and because they mistakenly concluded that the underlying purpose of the payment was authorized pursuant to a general license.
The settlement amount reflects OFAC’s consideration of the following facts and circumstances, pursuant to the General Factors under OFAC’s Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A. OFAC considered the following to be mitigating factors: the apparent violation did not confer economic benefit on a sanctioned entity because another financial institution successfully interdicted and rejected the transaction; Compass has not received a penalty notice or Finding of Violation from OFAC in the five years preceding the date of the transactions giving rise to the apparent violation; Compass cooperated with OFAC’s investigation of this matter; and Compass took appropriate remedial action in response to this apparent violation. OFAC found the following to be aggravating factors in this case: Compass managers and supervisors had actual knowledge of the conduct at issue and were alerted that the wire transfer implicated the SSR; and Compass managers whose primary responsibility includes OFAC compliance demonstrated a lack of understanding of the SSR. OFAC further reduced the proposed penalty in light of Compass’ agreement to settle its potential liability for the apparent violation.
1) Rare wire-related penalty arising from a failure to assess the underlying purpose of a transaction where that was apparently only discernible from transaction-related documents (here an invoice).
2) In this case, OFAC does not state that the ultimate beneficiary of the payment was a person "in Sudan," but the citation of the export of financial services provision implies this. The citation of the facilitation provision refers to the fact that the wire facilitated an export of goods to Sudan. There would have been a "facilitation" charge whether or not the beneficiary of the payment was actually a Sudanese entity or otherwise in Sudan.