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Enforcement Release: March 14, 2024
EFG International AG Settles with OFAC for $3,740,442 for Apparent Violations of Multiple Sanctions Programs
EFG International AG, a global private banking group based in Switzerland with approximately 40 global subsidiaries (collectively “EFG”), has agreed to pay $3,740,442 to settle its potential civil liability for apparent violations of multiple sanctions programs administered by OFAC. Between 2014 and 2018, EFG caused U.S. securities firms to process 727 securities-related transactions totaling $29,939,701 on behalf of customers in Cuba, 141 securities-related transactions totaling $468,615 for an individual blocked under the Kingpin Act, and, in 2023, five dividend payments, with a combined value of $1,200, for U.S.-custodied securities of a person blocked under Executive Order 14024 of OFAC’s Russia sanctions program. The settlement amount reflects OFAC’s determination that EFG’s apparent violations were voluntarily self-disclosed and not egregious, and also reflects EFG’s significant remedial measures.
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1) The EFG International AG (“EFG”) case belongs to a line of cases starting with Clearstream Banking, S.A. (2014) and continuing with UBS AG (2015). In both cases, the fundamental basis for liability was the same, i.e. that a non-U.S. person financial institution holding securities in the U.S. “caused” U.S. custodians and others to deal in blocked property and export financial services to the sanctioned beneficial owners of the securities. The Clearstream case is particularly similar to this one insofar as Clearstream held securities on behalf of a sanctioned person through an “omnibus” account that (by its nature) obscured the sanctioned person’s interest in the securities custodied in the U.S. In the UBS case, securities custodied in the U.S. were held on behalf of a non-designated entity associated with a blocked person. In the UBS case, OFAC charged violations in connection with...