Banco Popular to pay $255K for violating Venezuela sanctions

BPPR, a midsized Puerto Rican bank with more than $61 billion in assets and branches in Puerto Rico and the Virgin Islands, was accused of failing to block the accounts of two low-level Venezuelan government employees for 14 months after the United States levied sanctions against the country’s government, according to OFAC’s enforcement release published Friday.

The bank processed 337 transactions in four bank accounts worth a total of $853,126 from November 2019 until October 2020 that were in violation of Executive Order 13884, OFAC said.

The regulator determined the apparent violations were voluntarily self-disclosed and nonegregious.

Compliance lessons: Then-President Donald Trump in August 2019 issued Executive Order 13884, which blocked property and interests in property of the government of Venezuela. The restrictions extended to “any person owned or controlled, directly or indirectly” by the government of Venezuela and “any person who has acted or purported to act directly or indirectly for or on behalf of” any such entity. The order was incorporated into the amended U.S. sanctions against Venezuela in November 2019.

BPPR began planning its approach for complying with the sanctions shortly after they were issued, OFAC said, but despite having paperwork indicating two of its customers were low-level employees of the Venezuelan government, the bank failed to identify and block the four accounts until October 2020.

One of the BPPR customers worked in a clerical level position in the government of Venezuela’s Diplomatic Representation Office, while the other was a customer service representative of state-owned entity Compañía Anónima Nacional Teléfonos de Venezuela, OFAC said. Although each were considered low-level employees of the Venezuelan government, they did not meet the criteria OFAC set for individuals who were exempt from the sanctions, which included former Venezuelan government employees and contractors and current Venezuelan government employees who provided “health or education services” in the country.

Banks are expected to conduct timely due diligence on their own direct customers to confirm those individuals are not persons whose property and interests in property are blocked by U.S. sanctions, OFAC said.

In response to the alleged violations, BPPR enhanced its program to comply with U.S. sanctions, including “creating more robust sanctions-related procedures and develop[ing] additional resources and guidance in connection to sanctions alert review and disposition,” enhancing its screening training of bank employees, and hiring more staff to handle sanctions compliance, the enforcement release said.

BPPR declined further comment.