The Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced Wednesday a pair of settlements totaling $583,100 with Deutsche Bank Trust Company Americas (DBTCA) for apparent violations of Ukraine-related sanctions.
One settlement worth $157,500 addressed a payment of nearly $29 million made that involved a property interest of a designated oil company in Cyprus, while the other, worth $425,600, was for processing 61 payments destined for accounts at a designated financial institution. OFAC determined DBTCA did not voluntarily self-disclose either apparent violation and that both cases were non-egregious.
“These enforcement actions highlight the risks associated with a U.S. person failing to take adequate steps to ensure that transactions being processed are compliant with U.S. economic sanctions laws,” OFAC stated in its web notice.
In the case of the designated oil company in Cyprus—IPP Oil Products (Cyprus) Limited—DBTCA “had reason to know of IPP’s potential interest in the transaction underlying the payment, which closely coincided with the date of IPP’s designation by OFAC [July 2015], due to notice provided by the U.S. counsel of a non-accountholder party.” Still, on or about Aug. 6, 2015, according to OFAC, DBTCA processed the nearly $29 million funds transfer through the United States involving the property interest of IPP.
OFAC noted several senior managers within the bank’s anti-financial crime division, as well as a representative from its counsel’s office, had knowledge of the conduct that led to the apparent violation, yet failed to stop it.
“Financial institutions should take a risk-based approach to sanctions compliance,” OFAC explained. “In this instance, DBTCA was aware that it would be receiving a large funds transfer related to a series of transactions that at some point involved an SDN. OFAC would have expected DBTCA take steps to corroborate independently the representations it received in order to assure itself that IPP did not have a present, future, or contingent interest in the payment it was requested to process, regardless of its time sensitivity.”
Mitigating factors in the case included DBTCA’s commitment to review the circumstances of its apparent violation with its U.S. sanctions compliance program, in addition to its cooperation with OFAC’s investigation.
In the other case involving the 61 payments to a designated financial institution, DBTCA “failed to comply with existing internal policies and procedures when it failed to upload the SWIFT BIC (Society for Worldwide Interbank Financial Telecommunication Business Identifier Code) of an OFAC-designated bank into its interdiction software at the time of the bank’s designation.” The transactions with the designated entity, Krayinvestbank, took place between Dec. 22-30, 2015, and totaled nearly $277,000, according to OFAC.
Among aggravating factors in determining the amount of the settlement was that DBTCA had previously settled with OFAC in 2013 over similar conduct. Mitigating factors included the bank’s cooperation and improvements to its procedures for adding BICs to its interdiction filters.