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Enforcement Release: July 26, 2024
State Street Bank and Trust Company Settles with OFAC for $7,452,501 Related to Apparent Violations of the Ukraine-/Russia-Related Sanctions Regulations
State Street Bank and Trust Company (State Street), a Massachusetts-based financial institution, on behalf of itself and its subsidiary, Charles River Systems, Inc. (Charles River), a Massachusetts- based non-bank technology company acquired by State Street in 2018, has agreed to pay $7,452,501 to settle their potential civil liability for apparent violations of OFAC’s Ukraine-/Russia-Related Sanctions Regulations (URRSR). The apparent violations involved invoices that were redated or reissued by Charles River for certain customers who were subject to Directive 1 of Executive Order (E.O.) 13662, as well as certain payments accepted by Charles River from these customers. The 38 apparent violations occurred between 2016 and 2020, and involved invoices totaling approximately $1,270,456.
The settlement amount reflects OFAC’s determination that...
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1) "DEALING IN" NEW DEBT - COUNTING VIOLATIONS
From a legal basis standpoint, and even from a factual standpoint in many respects, this case is very similar to Enforcement Release - S&P Global, Inc., which also involved a sophisticated financial service-adjacent entity reissuing and re-dating invoices issued to SSI entities and accepting past-due payments. There, as here, each reissuance/re-dating and acceptance of payment was regarded as a separate violation. Note that, consistent with other cases, instances of prohibited payments being rejected by U.S. banks were not counted as "attempted" violation on the part of the U.S. person would-be recipient of the funds.
Notably, however, in this case OFAC determined the violations to be...