Proportionality is real – OFAC Enforcement Action against British Arab Commercial Bank

This is the fun part – right up front:

British Arab Commercial Bank plc Settles Potential Liability for Apparent Violations of the Sudanese Sanctions Regulations: British Arab Commercial Bank plc (BACB), a commercial bank located in London, the United Kingdom (UK), with no offices, business or presence under U.S jurisdiction, processed 72 apparent violations of the Sudanese Sanctions Regulations (SSR) (previously found at 31 C.F.R. Part 538) totaling $190,700,000. The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has determined that BACB did not make a voluntary self- disclosure of the apparent violations, and that these apparent violations constitute an egregious case. The total base penalty amount for the apparent violations was $381,400,000. In consultation with BACB’s domestic regulator, the United Kingdom’s Prudential Regulation Authority, OFAC determined that the Bank’s operating capacity was such that it would face disproportionate impact if required to pay the proposed penalty of $228,840,000. As a result, and in view of BACB’s operating capacity, the fact that it has represented that it ceased the conduct described below, its entering into a settlement agreement, and its maintenance of the compliance commitments articulated in the settlement agreement, BACB will remit $4,000,000 to settle these potential violations and its obligations to pay OFAC the remainder of the proposed penalty amount shall be suspended

What they did was pretty ingenious, actually – they made USD payments to Sudan out of a nostril account of an unnamed bank, but funded that account in a separate transaction. So, the actual payments didn’t go through the US financial system, even though they involved funds that emanated there.

Links:

Enforcement Information

Settlement

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