In a recent enforcement action, the United States Office of Foreign Assets (OFAC) has issued a “finding of violation” (FOV) against an Oklahoma bank for allowing two people to conduct transactions after they had been added to the agency’s List of Specially Designated Nationals and Blocked Persons (SDN list). According to OFAC, maintaining and processing payments for sanctioned individuals violates the Weapons of Mass Destruction Proliferators Sanctions Regulations.
The bank uses an outside vendor to “conduct some of its sanctions screening, mistakenly believing that it was doing daily checks.” This enforcement action, however, serves as a warning that “banks and other large institutions” need to ensure that their vendors are using the most up-to-date OFAC SDN list.
Pierce Atwood litigation partner Kathleen Hamann, who practices transnational criminal law, noted that OFAC’s finding in this case was “worthwhile as an FOV to remind everybody: you need to be sure you understand the frequency of screening of your entire client base and make sure it meets your obligations. There’s a tendency to say we’ve got a vendor and they take care of that.”
Kate added that, since Russia’s invasion of Ukraine, there has been “a whirlwind of new sanctions designations. It has decreased somewhat recently, but it’s still large numbers of people who have vast holding structures, which might lead to a large number of corporations who might be sanctionable.”
The complete article by Janan Hanna can be found in the July 26, 2022 edition of Global Investigations Review.