Top ethics and compliance failures of 2022
Businesses not taking AML requirements seriously, years of noncompliant off-channel communications catching up to financial services titans, and a manufacturing firm that shared revenue with terrorists comprise CW’s list of the biggest ethics and compliance fails of 2022.
Kraken to pay $362K over Iran sanctions screening lapses
Virtual currency exchange Kraken will pay a fine of approximately $362,159 to settle charges it violated U.S. sanctions against Iran, according to the Treasury Department’s Office of Foreign Assets Control.
NodusBank avoids fine in OFAC case over Venezuela sanctions violations
Nodus International Bank was found to have violated U.S. sanctions against Venezuela by the Office of Foreign Assets Control for allowing three unlicensed transactions on a blocked account.
Bittrex to pay $29M for BSA violations in landmark FinCEN, OFAC case
Virtual currency trading platform Bittrex agreed to pay more than $29 million for violations of the Bank Secrecy Act and other foreign asset restrictions by regularly allowing transactions with customers in Iran, Syria, and other U.S.-sanctioned nations.
Tango Card to pay $116K for e-gift card sanction violations
Tango Card, a supplier and distributor of electronic rewards, agreed to pay approximately $116,000 as part of a settlement with the Office of Foreign Assets Control for apparent sanctions violations related to its issuance of e-gift cards.
Credit Agricole to pay $1.1M to settle sanctions violations by 2 subsidiaries
Paris-based Crédit Agricole Corporate and Investment Bank will pay a total of approximately $1.1 million to settle charges its subsidiaries violated U.S. sanctions in five sanctioned countries.
How effective beneficial ownership searches leverage technology
Determining the ultimate beneficial owner of individuals and companies your firm does business with can be a tricky thing. The most efficient investigations require an understanding of your firm’s risk appetite and appropriate technology to automate searches.
U.S. sanctions Iran intelligence ministry over Albania cyberattack
Iran’s minister of intelligence, together with its Ministry of Intelligence and Security, were sanctioned by the Treasury Department’s Office of Foreign Assets Control for malicious cyber activities that threaten the national security of the United States and its allies.
Tether prepared to defy controversial U.S. sanctions on Tornado Cash
Cryptocurrency platform Tether is set to defy U.S. sanctions by holding firm on its refusal to freeze relevant Tornado Cash addresses until receiving further instruction from law enforcement agencies.
BIS charges Chinese cable giant with export control violations
The Commerce Department’s Bureau of Industry and Security charged China’s largest cable and wire manufacturer Far East Cable with export control violations related to its alleged dealings with telecommunications company ZTE to circumvent U.S. restrictions against Iran.
Adaptability: An overlooked, and underrated, compliance skill
Compliance professionals can utilize adaptability for its many benefits both individually and for the firms in which they work. The question, then, is how they do so.
OFAC designates steel giant MMK in latest Russian sanctions
The Office of Foreign Assets Control designated Magnitogorsk Iron and Steel Works, one of the world’s largest steel-producing companies, as part of its latest round of sanctions against Russia in response to the country’s invasion of Ukraine.
British American Tobacco reserves $545M for U.S. sanctions settlement
British American Tobacco disclosed it has set aside £450 million (U.S. $545 million) for the resolution of an investigation into apparent sanctions violations by two U.S. agencies.
MidFirst Bank avoids penalty in OFAC resolution
MidFirst Bank will not pay a civil penalty after self-reporting to the Office of Foreign Assets Control apparent violations of weapons of mass destruction proliferator sanctions at the bank.
American Express to pay $430K for violations of sanctions against drug kingpin
A subsidiary of American Express agreed to pay $430,500 to settle charges its network processed 214 transactions on behalf of a Venezuelan drug kingpin who was designated on the U.S. sanctions list, according to the Office of Foreign Assets Control.
SEC questioned Citi for additional info on Russia exposure
The Securities and Exchange Commission recently posed a series of probing questions to Citigroup seeking to understand the impact of Russia’s invasion of Ukraine on the bank’s exposure in Russia.
CPE Webcast: Managing challenges of sanctions screening in your third-party risk program
Sanctions are one of the most important risk factors to consider in any compliance program. No one wants to be found to have business ties to a sanctioned entity given the potential for significant financial penalties and reputational damage.
e-Book: Avoiding pitfalls of working in high-risk regions
The issues of working in high-risk regions have always been there, but recent dynamic events and circumstances have added unique challenges.
FinCEN/BIS alert flags Russia export control evasion indicators
The Financial Crimes Enforcement Network and Bureau of Industry and Security warned financial institutions to be on the lookout for new and novel ways individuals and entities in Russia and Belarus are attempting to evade export controls.
OCC risk report: Russian sanctions, staffing churn increase compliance challenges
The Office of the Comptroller of the Currency warned banks and financial institutions about elevated operational risks caused by geopolitical tensions and a heightened compliance risk environment complicated by regulatory changes, policy initiatives, and difficulties in hiring qualified professionals.
CPE Webcast: Unmask offshore holdings of Russian oligarchs using public data
The cascade of sanctions condemning Russia’s assault on Ukraine has governments and financial regulators investigating Russian oligarchs, many of whom exploit gaps in public disclosure laws through offshore assets
‘Have contingency plans’: TPRM expert on confronting Russia risk exposure
Melanie Gallagher, head of third-party risk management at financial software company Intuit, offered best practices for navigating sanctions compliance risks at CW’s TPRM Summit in Chicago.
DAG Monaco: Sanctions should be ‘at the forefront’ of compliance approach
Businesses with a multinational footprint or international suppliers should be prioritizing abiding by U.S. sanctions in their compliance efforts, Deputy Attorney General Lisa Monaco said at an industry event.
Strain in your supply chain no excuse for compliance shortcuts
With the Russia-Ukraine war’s ever-expanding sanctions landscape, supply chain strain and risk of enforcement are sharply increasing. Speakers at a recent event hosted by Drexel University’s Kline School of Law offered best practices.
e-Book: Navigating Russian sanctions and preparing for new threats
For chief compliance officers of U.S. companies, navigating Russian sanctions and export controls restrictions might feel like a full-time job on its own right now, not knowing when or where violations could occur in an ever-shifting enforcement landscape.
Treasury considering rule to address AML ‘loopholes’ in private investment
The Treasury Department is considering rulemaking that would seek to mitigate the growing risk sanctioned Russian oligarchs and politicians will attempt to use “hedge funds, private equity firms, and investment advisers to hide their assets.”
Banco Popular to pay $255K for violating Venezuela sanctions
Banco Popular de Puerto Rico has agreed to pay more than $255,000 as part of a settlement with the Office of Foreign Assets Control to resolve its civil liability for 337 transactions processed in violation of U.S. sanctions.
Best practices, common pitfalls in working in high-risk countries
A panel of compliance professionals discussed the increasingly relevant topic of working in high-risk countries, sharing their experiences and lessons learned at Compliance Week’s National Conference in Washington, D.C.
New sanctions add ban on U.S. accounting, management consulting work in Russia
The Treasury Department unveiled a host of new sanctions against Russian and Belarusian individuals and banks, in addition to a ban on U.S.-based accounting, management consulting, and trust and corporate formation services to any person located in the Russian Federation.
Cost of business? EU energy firms weigh bypassing Russian sanctions to secure gas
Russia’s squeeze on European energy companies to pay for gas in rubles might be about to pay off as some of the continent’s largest suppliers appear to be working out sanctions-compliant solutions to secure gas flows.
Treasury sanctions first virtual currency mixer
The Department of the Treasury announced first-of-their-kind sanctions against virtual currency mixer Blender.io for its alleged role in a significant virtual currency heist carried out by a North Korean state-sponsored cyber hacking group.
Wells Fargo in resolution negotiations regarding potential OFAC violations
Wells Fargo disclosed in a regulatory filing it has entered resolution discussions with a U.S. authority or authorities regarding potential sanctions violations it voluntarily self-disclosed to the Treasury Department’s Office of Foreign Assets Control.
Why beneficial ownership is crucial in supporting current sanctions
To ensure Russian money is controlled, and for sanctions to work, it is imperative the beneficial owners of sanctioned firms are identified. But determining beneficial owners is not always straightforward.
‘The new FCPA’: Monaco stresses sanctions as top DOJ commitment
As part of a discussion at an industry event, Deputy Attorney General Lisa Monaco reiterated the Justice Department will prioritize the enforcement of sanctions the United States has placed on Russia following its invasion of Ukraine.
CW National 2022 Q&A: Tyler Hand on working in high-risk countries
Tyler Hand, chief compliance officer at Western Union, previews his panel titled, “The Fast-Evolving Risk Working in High-Risk Countries—Experiences and Lessons Learned,” at CW’s National Conference in Washington, D.C. from May 16-18.
Toll Holdings to pay $6.1M for widespread sanctions violations
Toll Holdings, an international freight forwarding and logistics company, has agreed to remit more than $6.1 million as part of a settlement with the Office of Foreign Assets Control resolving nearly 3,000 apparent violations of Iran, North Korea, and Syria sanctions.
Experts assess risks to weigh as companies confront exit from Russia
As sanctions against Russia continue to come down from the United States, European Union, and other countries, companies must ensure they have the means to comply instantly—even if ceasing business dents their financials and puts them at legal risk for breaching contract.
CPE Webcast: How new Russian sanctions might affect your business
U.S. export control and sanctions regulators have been busy issuing new regulations to address the evolving situation in Ukraine.
Yellen calls China to the carpet on Russia-Ukraine war
U.S. Treasury Secretary Janet Yellen warned countries that are unified in their sanctions against Russia “will not be indifferent to actions that undermine the sanctions we’ve put in place.”
EU industries put to test as Russian invasion of Ukraine persists
Less than two months since Russia invaded Ukraine, a range of industries across Europe have issued stark warnings about supply chain shortages, production shutdowns, and price hikes. The worst may still be yet to come, particularly in Germany.
ICA Insight: Russia sanctions frequently asked questions
Jake Plenderleith of the International Compliance Association answers selected questions from attendees of a recent ICA webinar on Russian sanctions intended to help provide clarity on what firms can do to protect themselves from exposure.
Treasury expands sanctions against large Russian banks
The Department of the Treasury announced strengthened sanctions against two of Russia’s largest financial institutions, Sberbank and Alfa-Bank, that were already subject to U.S. restrictions.
S&P Global fined $79K over alleged 2016-17 dealings with sanctioned Rosneft
Financial analytics provider S&P Global agreed to pay $78,750 as part of a settlement with the Office of Foreign Assets Control regarding alleged dealings with sanctioned Russian state-owned oil company Rosneft in 2016 and 2017.
Q1 roundup: SEC tackles climate disclosures, businesses navigate Russia restrictions, more
Regulation and guidance from U.S. agencies and the White House, plus compliance challenges stemming from a two-year global pandemic and Russia’s ongoing invasion of Ukraine, made the first quarter of 2022 a novel risk environment for regulated businesses.
Senators call for close of private investment AML/CFT loophole
Sens. Sheldon Whitehouse (D-R.I.) and Elizabeth Warren (D-Mass.) called on the Treasury Department and SEC to close a “disconcerting loophole” that exempts hedge funds and other private investment firms from reporting suspicious activity within their transactions to authorities.
U.S. lawmakers question Credit Suisse over Russian sanctions compliance
Two members of the House Committee on Oversight and Reform requested Credit Suisse provide information regarding its compliance with U.S. sanctions against several Russian oligarchs, following a media report the Swiss bank requested some documents be destroyed.
Judge ends ZTE probation after 5 years
A U.S. district court judge agreed to end ZTE’s five-year probation following the Chinese telecommunications company’s 2017 guilty plea for violating Iran sanctions.
Treasury official: Compliance has chance to effect history with Russia response
Elizabeth Rosenberg, assistant secretary for terrorist financing and financial crimes at the Treasury Department, said in a speech “history has thrust the compliance sector into the center of events” regarding business response to evolving sanctions and actions against Russia.
Advice for navigating ‘fast and furious’ Russian sanctions landscape
To help sort through the gray area of evolving sanctions and export control restrictions against Russia, chief compliance officers should consider a handful of key best practices.
Banks face complex compliance risks as they attempt to exit Russia
Once a bank decides to withdraw or wind down its Russian operations, there are a host of thorny compliance issues to navigate in a compressed timeframe, including sanctions implications, money laundering risks, and more.