ENFORCEMENT INFORMATION FOR July 15, 2010
United Nations Federal Credit Union Settles Cuban Assets Control Regulations Allegations: United Nations Federal Credit Union, New York City, New York ("UNFCU"), a federally chartered and regulated credit union, has remitted $500,000 to settle allegations of violations of the Cuban Assets Control Regulations, 31 C.F.R. part 515 (the "CACR"). OFAC alleged that UNFCU dealt in property in which Cuba or a Cuban national had an interest in violation of the CACR by engaging in certain unauthorized financial transactions on behalf of its members/accountholders who were blocked Cuban nationals pursuant to the CACR. The transactions involved financial services that were routinely provided by UNFCU to its members. The alleged violations were not voluntarily self-disclosed by UNFCU and were non-egregious in nature. The base penalty amount for the alleged violations totaled $5,237,100. The settlement amount reflects OFAC’s consideration of the following General Factors: UNFCU cooperated with OFAC during the investigation by providing prompt responses to all OFAC inquiries; UNFCU has undertaken significant remedial measures to augment its OFAC compliance program to ensure OFAC compliance in the future; a significant portion of the base penalty amount is attributable to many substantially similar apparent violations; and UNFCU has not previously violated OFAC sanctions. As part of the settlement, UNFCU has further agreed to conduct a review of all of its accounts for compliance with the CACR, and to report the results of that review to OFAC.
1) The United Nations Federal Credit Union is a not-for-profit cooperative that, for OFAC purposes, is an ordinary “U.S. person.” "All of [UNFCU’s] accounts are denominated in US dollars. Unlike UBS, UNFCU has no specific service agreement with the United Nations.” See https://www.unjiu.org/sites/www.unjiu.org/files/jiu_document_files/products/en/reports-notes/JIU%20Products/JIU_ML_2007_1_English.pdf. UNFCU has non-U.S. branches, but they are all directly subject to the prohibitions of the CACR.
UNFCU transactions are eligible for certain general licenses, most significantly the general license for the "official business" of the UN and associated entities (implemented in 2015). See Nov. 2014 Email from OFAC SC&E to Local Sudanese UNDP Staff in re: UNFCU Accounts, and query whether the “official business” GL at 515.562(b) of the CACR means that the transactions at issue in this enforcement action and the specific licenses are now generally licensed.
2) It is not clear when the violations at issue here took place, but the reference to "certain unauthorized financial transactions" suggests that they arose from the transactions described in Case Nos. CU-77330, CU-77408, CU-77427 and CU-77518, and FAC No. CU-406608 as having exceeded the scope of UNFCU's specific licenses.