Literally… OFAC issued a Finding of Violation, which is statistically the least frequent result of an investigation, to State Street Bank and Trust. Basically, it made pension payments to a US person’s US bank account, while the person was resident in Iran. Just reminds you that there are many ways to establish jurisdiction…
State Street did self-disclose the violations (45 of them), and did make changes to correct the gap in its compliance program.
OFAC considered the following as aggravating factors:
Processed transactions on behalf of an individual in Iran after being alerted to the Iran connection, and thus SSBT reasonably should have been put on notice that the conduct constituted a violation of U.S. law;
Had actual knowledge that it was processing transactions on behalf of an individual who was resident in Iran, as SSBT stopped, escalated, reviewed, and approved every one of the 45 distribution payments, each of which contained an explicit reference to Iran;
Caused harm to the sanctions program objectives and the integrity of the ITSR by performing a service on behalf of an individual in Iran;
Is a large and commercially sophisticated financial institution;
Had escalation and review procedures for sanctions-related alerts that nonetheless failed
to lead to correct decisions on 45 occasions; and
Had compliance screening issues that continued for a year after the Federal Reserve Bank
of Boston notified the bank of a related issue pertaining to inadequate escalation procedures.
and mitigating factors:
No SSBT managers or supervisors appear to have been aware of the conduct that led to the violations;
SSBT’s screening filter did appropriately identify and alert staff to the nexus to a sanctioned jurisdiction;
The payments at issue may not have actually been transferred to Iran, though they were made on behalf of a person in Iran;
SSBT took remedial action in response to the violations and enhanced its escalation procedures as they pertain to sanctions-related alerts;
There is a possibility that the funds transfers could have become licensed; and
SSBT cooperated with OFAC by voluntarily self-disclosing the violations and entering
into a tolling agreement with extensions.
in its decision-making process.