Saturday, July 26, 2014


A firm located in California was fined* $4,073,000 for doing business with a firm that reexported its products to Iran. Like most of those sanctioned, it had no compliance program, a fact that OFAC has often seized upon, when levying monetary penalties.

The company was also guilty of these acts:

(1) It attempted to hide the fact that it had sales to Iran.
(2) It kept shipping even after OFAC warnings were received.
(3) It provided false information to OFAC, in response to subpoenas.
(4) it exhibited a reckless disregard for OFAC sanctions.

Another case involved a San Juan, Puerto Rico company, fined $27,000 for purchasing fruit juice and pulp products from a Colombian firm that is a Specially Designated Narcotics Trafficker. Again, the corporation sanctioned had no compliance program in place at the time of the violations.

The takeaway: all of your bank clients that are engaged in international trade or business should be advised, in writing, to create an OFAC compliance program, or risk fines and penalties for noncompliance. The risk levels should be increased on any bank customer who fails to confirm that it has such a program up and running.

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