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OFAC makes an example of BB&T: Enforcement Action

BB&T made one payment to someone listed under the Sudanese sanctions and didn't report it (a downstream bank stopped the item and reported it). It was considered non-egregious, but the $25,000 base penalty was only knocked down to $19,125.

Here's what happened – which tells you why OFAC bothered with a civil monetary policy at all (emphasis mine):

On June 1, 2011, BB&T received instructions to process a $20,000 funds transfer on behalf of itscustomer, destined for a third-country company’s account at a foreign financial institution.BB&T’s interdiction software stopped the payment for review due to a name in the paymentdetails that appeared to match an entry on OFAC’s List of Specially Designated Nationals andBlocked Persons (the “SDN List”). During the course of BB&T’s investigation of the potentialname match, the bank determined that the individual was a Sudanese national but failed torequest additional information, such as a physical address. After determining that the name wasnot an SDN List match, a BB&T compliance specialist added a reference in the payment detailsthat included, inter alia, “NATIONALITY: SUDANESE” and then approved the wire. WhenBB&T’s interdiction software rescreened the transaction it failed to generate an alert because thesoftware did not contain the word “Sudanese” (or other similar terms relating to OFAC-sanctioned countries such as “Burmese,” “Cuban,” or “Iranian”). After BB&T processed thetransaction, the bank’s customer notified it that the individual referenced in the payment detailswas located in Omdurman, Sudan, and that the payment was for merchandise being shipped toSudan.

And here's OFAC's justification for the small discount (reformatting mine):

OFAC found the following to be aggravating factors in this case:

  • BB&T was aware of the conduct giving rise to the apparent violation;
  • BB&T’s lack ofappropriate stop descriptors demonstrated an inadequate compliance program with regard to itssanctions screening process;
  • BB&T is a large and sophisticated financial institution; and BB&Tfailed to provide all responsive records to OFAC’s administrative subpoena.

OFAC consideredthe following to be mitigating factors:

  • There was no actual harm to the sanctions programobjectives because another financial institution rejected the transaction;
  • BB&T has not received apenalty notice or Finding of Violation from OFAC in the five years preceding the date of the transaction giving rise to the apparent violation; and
  • BB&T took appropriate remedial action inresponse to the apparent violation.

You have to think the fact that this one slip-up drew a fine and publicity is for deterrence effect which is, after all, one of the General Factors OFAC considers.

Curious note: the phrase “stop descriptor” is vendor-specific, and is by no means an industry standard term.


OFAC Enforcement Action



Categories: OFAC Updates Settlements Sudan Sanctions


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