Wednesday, July 25, 2012


At least six Iranian corporations, sanctioned by OFAC or EU nations for participation in illegal WMD or ballistic missile programmes, have set up shop inside Venezuela, and are actively manufacturing materials for Iran, directly or indirectly. If you are a compliance officer at a North American or EU financial institution, whose clients trade with Venezuelan companies, it is strongly suggested that you ramp up your efforts to ensure that these clients are not trading with Iran, through Venezuelan factory sites.

Let me suggest the following:

(1) Immediately perform, either internally, or through established, trustworthy outsourcing, Enhanced Due Diligence investigations upon all clients who trade with Venezuelan firms. Do you have photographs of the Venezuelan factory operation, and documents, that rule out any Iranian involvement ? if not, why not ?

(2) Have your bank counsel prepare an affidavit, attesting to the fact that there are NO Iranian end users of the goods and services that your client supplies to Venezuela, directly or indirectly. Have the president of the clients' company execute the document, before a notary public. This may sound extreme, but present US law requires that you do everything possible to ensure that you are not violating international sanctions on Iran.

The Presidents of Iran and Venezuela together recently

You do not want to be listed in OFACs "Name & Shame" monthly ( Fines and Penalties) Enforcement Information press release. This is also about reputation damage, for if your bank's name shows up on  OFAC, even as a small fine, you will lose business, and the fine could precipitate a Federal criminal investigation.

Iranian Coat of Arms

Also, government auditors, any of whom I regularly lecture to in Washington, are fully aware of the Iranian threat. Be prepared to answer questions about what you are doing to ensure your bank clients do not trade with Iranian companies working abroad, particularly in Venezuela.

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