OFAC Enforcement Action: BD White Birch Investment

BD White Birch Investment agreed to a settlement of $372,465 for 3 violations of the Sudanese Sanctions Regulations. In these cases, the firm facilitated $354,602.26 worth of Canadian paper sales and shipment to Sudan. The base penalty for these non-egregious, non voluntarily self-reported violations was $445,000.

That’s not much of a reduction, especially when compared to other recent enforcement actions. Here’s why:

OFAC considered the following to be aggravating factors:

  1. White Birch USA exhibited reckless disregard for U.S. sanctions requirements by failing to exercise a minimal degree of caution or care with regard to the apparent violations;
  2. White Birch Canada personnel appear to have attempted to conceal the ultimate destination of the goods from its bank (a U.S. financial institution serving as the confirming bank on a letter of credit) with respect to two of the apparent violations;
  3. multiple White Birch USA personnel, including individuals in supervisory or managerial positions, had actual knowledge of and were actively involved in, or had reason to know of, the conduct that led to the apparent violations;
  4. White Birch USA is a large and commercially sophisticated company;
  5. White Birch USA’s compliance program was either non-existent or inadequate at the time of the apparent violations; and
  6. White Birch USA did not initially cooperate with OFAC’s investigation into the apparent violations, particularly when it submitted materially inaccurate, incomplete, and/or misleading information to OFAC.   

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

  1. White Birch USA has no prior OFAC sanctions history, and has not received a penalty notice or Finding of Violation in the five years preceding the earliest date of the transactions giving rise to the apparent violations; and
  2. White Birch USA has reported to OFAC that it has taken remedial steps in response to the apparent violations, including by updating the company’s employee manual to include additional information concerning economic sanctions, implementing new compliance policies, and administering company-wide OFAC compliance training.  

But the point here is to remind people that facilitation is indeed prohibited under all these sanctions regulations:

This enforcement action reinforces certain compliance obligations for U.S. persons, including U.S. parent corporations that maintain subsidiaries located outside of the United States, as well as their U.S. person employees.  Unless authorized by OFAC or otherwise exempt by statute, foreign subsidiaries of U.S. parent corporations must act independently from their parent corporations and any other U.S. person with respect to all transactions and activities that would be prohibited if the transactions were engaged in by a U.S. person or in the United States.

Additionally, addressing the BD White Birch’s less than complete cooperation:

In addition, any persons who submit information to OFAC regarding potential violations should take steps to ensure that such information is both accurate and complete.

Links:

OFAC Notice

OFAC Enforcement Information

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