…for violations of the Sudanese, Cuban and Iranian sanctions programs. Most notable is the following:
As early as the late 1990s, Intesa maintained a customer relationship with Irasco S.r.l. (“Irasco”),an Italian company headquartered in Genoa, Italy that is owned or controlled by the Governmentof Iran (“GOI”). Despite Irasco’s ownership and line of business as an exporter of goods to Iran,and its financial and commercial associations with Iranian state-owned financial institutions,companies, and projects, Intesa failed to identify Irasco as meeting the definition of the GOI inthe ITR and, at the time of the apparent violations, did not take appropriate measures to preventthe bank from processing transactions for or on behalf of Irasco that terminated in the UnitedStates and/or with U.S. persons. Intesa’s payment instructions for these transactions allidentified Irasco as the ordering customer.
Intesa processed … transactions to or through the United States that involved Cuba or Sudan. Intesa does not appear to have implemented or utilized special procedures or payment practices in order to process these payments to or through the United States.
The base penalty of $9,362,000 was knocked down to $2,949,030 despite the following factors:
Intesa had reason to know that one of its customers met the definition of the GOI inthe ITR and that payments which terminated in the United States for this customer constitutedapparent violations of the ITR;
Intesa’s conduct resulted in harm to the integrity of U.S.economic sanctions programs; Intesa is a commercially sophisticated international financialinstitution;
Intesa did not, at the time of the apparent violations, maintain an adequateprogram to ensure that it was in compliance with U.S. economic sanctions.
The reduction in the final penalty was due to the following factors:
OFAC concluded that the apparent violations did not constitute a willful or reckless violation of the law;
OFAC also determined that no Intesa managers or supervisors had actual knowledge or awareness of these matters within the meaning of the Guidelines;
Intesa provided substantial cooperation to OFAC, including signing a tolling agreement and multiple extensions;
Intesa took remedial action in response to the apparent violations and now has a more robust compliance program in place;
Intesa has not received a penalty notice or Finding of Violation from OFAC in the five years preceding the date of the transactions giving rise to the apparent violations.
Long story short, Intesa did not violate the most egregious of the General Factors (willful or reckless action, and management involvement), although its violations were significant enough to constitute damage to the goals of the sanctions program. And taking corrective action always helps.