Enforcement Release: December 21, 2023
OFAC Settles with Privilege Underwriters Reciprocal Exchange for $466,200 Related to Apparent Violations of the Ukraine-/Russia-Related Sanctions Regulations
Privilege Underwriters Reciprocal Exchange (PURE), an insurance organization based in White Plains, New York, that primarily offers insurance policies and coverages for luxury homes, automobiles, art collections, jewelry, and watercraft, has agreed to pay $466,200 to settle its potential civil liability for 39 apparent violations of OFAC’s Ukraine-/Russia-Related sanctions. Between May 2018 and July 2020, PURE engaged in transactions related to four insurance policies involving a blocked Panama-based company owned by Specially Designated National Viktor Vekselberg (Vekselberg). The settlement amount reflects OFAC’s determination that PURE’s apparent violations were not voluntarily self-disclosed and were non-egregious.
Description of the Apparent Violations
In 2010, PURE issued a private fleet auto insurance policy, a jewelry and art insurance policy, and two high value...
From a legal basis standpoint, this enforcement release is relatively straightforward. Medallion was a blocked person, and a U.S. person insurer engaged in direct transactions with the blocked person. From a diligence expectations perspective, the enforcement release is also relatively unremarkable because the alleged violator had records that showed Vekselberg to be the owner of the entity that was blocked by operation of law. This would have been more notable if, for example, OFAC penalized PURE for providing services to Medallion for not having engaged in sufficient open source UBO research to unearth the relationship of the entity to Vekselberg. Still, is it notable that the “reason to know” about the Vekselberg link to Medallion appears to be limited to solely to a questionnaire response issued eight years prior to Vekselberg’s initial designation. What is clear here is that OFAC expects “ownership information about a customer...