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Separating the bad guys from the not-so-bad guys

So, if you keep track of OFAC’s enforcement actions, when a really big fish gets caught with a lot of overt action to skirt sanctions regulations, there is often a significant amount of publicity around the settlement agreement and civil penalties. Just look at the descriptions of the items on the Recent Actions page; you don’t even need to click through to see which institution got in trouble.

Now, look at the item with the December 12, 2012 date. All it says is “Release of OFAC Enforcement Information.” Click through and you get another nondescript link to the actual information. So, it takes 2 clicks to even find out who got fined.

Why is that? If you read at the bottom of the release, past all the gory details of the violations, you find:

In 2007, … senior management learned of these practices, commenced an internal review of historical transaction data, and initiated a voluntary self-disclosure to OFAC. OFAC found that the apparent violations constitute an egregious case. The settlement amount reflects OFAC’s consideration of the following facts and circumstances, pursuant to the General Factors under OFAC’s Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A: … conduct concealed the involvement of U.S. sanctions targets and displayed reckless disregard for U.S. sanctions; the general manager of the Operations Center in Tokyo knew or had reason to know that procedures had been implemented instructing employees to manipulate payment instructions; … conduct conferred a substantial economic benefit to targets of OFAC sanctions; … is a large, commercially sophisticated financial institution; … has undertaken significant remediation to improve its OFAC compliance policies and procedures; … substantially cooperated with OFAC’s investigation, including providing detailed and organized information regarding the apparent violations, and entering into a tolling agreement with OFAC; and … has no history of prior OFAC violations

So, while there was management involvement, senior management stepped in and did the right thing: self-disclosed, remediated its program, cooperated with OFAC and entered into a tolling agreement – and had not previously had any OFAC violations. All these mitigating factors take you off the front page of Recent Actions, and land you in the OFAC equivalent of the classified ads.

In case you were curious, by the way, it was Bank of Tokyo Mitsubishi UFJ who got fined – for $8.571 million.


Recent Actions Page
Enforcement Information

Categories: OFAC Updates


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