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OFAC Enforcement: Bank of Guam fined $27,000

Bank of Guam made a $2625 wire transfer to the UAE to settle delivery fees of goods shipped to Iran. A US bank blocked the transfer because Iran was mentioned in the originator to beneficiary information of the payment. A couple of weeks later, the same payment was resent (successfully) with the Iran reference removed on the guidance of a Bank employee.

The base fine was $20,000, yet the final fine was $27,000. Why?

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: although mitigation was extended because Bank of Guam has not received a penalty notice or a Finding of Violation from OFAC in the five years preceding the date of the transactions giving rise to the apparent violations, the settlement amount reflects an aggravation to the base penalty because Bank of Guam staff acted recklessly by failing to exercise caution or care in processing a funds transfer after becoming aware of the purpose of the payment and actually instructed the bank’s customer to resubmit the payment without a reference to Iran in the payment details thereby concealing the sanctioned interest in the transaction. Such conduct undermined the integrity of the U.S. sanctions program, prevented Bank of Guam’s correspondent from assessing the permissibility of the payment, and could have resulted in significant sanctions harm. At the time, Bank of Guam employees apparently lacked an understanding of the bank’s U.S. sanctions obligations.

Interesting note: At the time of the violation, the relevant regulation was called the Iranian Transactions Regulations (ITR). A footnote in the OFAC notice notes that the ITR has since been renamed and reissued, in its entirety, as the Iranian Transactions and Sanctions Regulations (ITSR) in October of last year.

Link:

OFAC Enforcement Information flyer

Categories: Iranian Sanctions OFAC Updates Settlements Uncategorized

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