OFAC Announces Sanctions Settlement With UK Bank
The Treasury’s Office of Foreign Assets Control announced a $4 million settlement with British Arab Commercial Bank plc for 72 violations of the Sudanese Sanctions Regulations, OFAC said in a Sept. 17 notice.
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Between 2010 and 2014, BACB processed 72 Sudan-related “bulk funding payments” worth a combined $190 million and operated accounts for at least seven Sudanese financial institutions, including the Central Bank of Sudan, OFAC said. BACB processed transactions “via an internal book transfer process involving a nostro account maintained at” both a foreign bank and U.S. bank, OFAC said.
BACB established the nostro account in 2006 with a non-U.S. financial institution in a country that imports Sudanese oil, the notice said. BACB funded the account “by routing large, periodic, USD-denominated wire transfers into the account” from European banks, the notice said. Those banks then “passed the USD-denominated transfers through banks in the United States for further credit to the USD nostro at the non-U.S. financial institution,” OFAC said. Once the funds arrived, “BACB instructed the institution to process individual payments … involving a variety of Sudanese parties.”
OFAC said several BACB employees knew about the transactions but believed “all Sudanese transactions, including the inflow of USD to its nostro account at the non-U.S. financial institution would be processed outside the United States via funding from the BACB accounts in Europe, and understood how it would attempt to circumvent the U.S. sanctions regulations,” OFAC said.
OFAC said the base penalty for the violations is about $381 million, but decided to lower the penalty after speaking with the United Kingdom’s Prudential Regulation Authority and determining BACB “would face disproportionate impact” due to the bank’s “operating capacity.”
The agency said aggravating factors included BACB’s “reckless disregard for U.S. sanctions,” the fact that it ignored warning signs that its activities violated sanctions, the fact that several of the bank’s senior managers were aware of the violations and the fact that BACB conferred substantial economic benefit to persons in Sudan.
Mitigating factors included BACB’s lack of violations within the previous five years, its cooperation with OFAC’s investigation and the fact that it took remedial measures, including leaving the Sudanese market, hiring new senior management and improving its compliance program.