ENFORCEMENT INFORMATION FOR January 31, 2011
Trans Pacific National Bank Settles Iranian Transactions Regulations Allegations: Trans Pacific National Bank, San Francisco, CA ("Trans Pacific") has remitted $12,500 to settle allegations of violations of the Iranian Transactions Regulations, 31 C.F.R. part 560 (the "Regulations") occurring on or about September 18, 2007, and on or about March 19, 2008. OFAC alleged that Trans Pacific engaged in transactions or dealings in or related to goods of Iranian origin and services for exportation to Iran, and facilitated transactions by a foreign person where the transactions by the foreign person would be prohibited by the Regulations if performed by a United States person, by initiating two separate wire transfers on behalf of an account holder for an underlying commercial transaction prohibited by the Regulations. In one instance, the wire transfer instructions referenced "Iranian material" and in the other instance the instructions referenced "Iran material." The value of the transactions totaled $35,600. Trans Pacific did not voluntarily disclose this matter to OFAC. The base penalty amount was $50,000. The settlement amount reflects the following factors: At the time of the transactions, Trans Pacific’s filtering system was not designed to detect references to sanctions targets in the "Originator to Beneficiary Information" field, leading to both of these apparent violations; Trans Pacific has enhanced its compliance program in response to the apparent violations by requiring that the memorandum information of each wire transfer also be reviewed for OFAC sanctions references; in addition, Trans Pacific has strengthened its escalation procedures in the event of a possible OFAC sanctions reference; and Trans Pacific has not been subject to prior OFAC enforcement action and fully cooperated with OFAC’s investigation of this matter.
1) That the wire was likely destined for a non-Iranian in a third country may be why this was called facilitation, rather than an export of financial services to Iran. This case is notable insofar as OFAC seems to suggest that the mere reference to "Iranian material" on the payment message, without more, is sufficient basis on which to consider the transaction in violation of 560.206 (facilitation of transactions involving Iranian origin goods, irrespective of their location and whether any Iranian parties are involved in the transactions). At a minimum, the reference on the payment message creates a difficult-to-rebut presumption that the underlying transaction for which the payment was made would have been prohibited if engaged in directly by a U.S. person.
2) Rare circumstances in which a bank originating a payment was charged with "facilitation."