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Money Services Business Settles OFAC Charges for Multiple Sanctions Violations

A New York-based online money transmitter settled potential civil liability for alleged violations of multiple sanctions programs.

According to OFAC, the money services business processed 2,241 payments for parties located in sanctioned jurisdictions - including the Crimea region of Ukraine, Iran, Sudan and Syria - and 19 payments on behalf of sanctioned persons on OFAC's List of Specially Designated Nationals and Blocked Persons ("SDN List"). OFAC charged the company for "deficient sanctions compliance processes" and multiple control breakdowns, including (i) weak algorithms that failed to flag close matches to SDN List entries, (ii) a failure to screen for Business Identifier Codes, even those included on OFAC's SDN List, (iii) automatically releasing flagged and pended payments during backlog periods and (iv) not monitoring IP addresses or flagging addresses in sanctioned locations.

OFAC determined that the company violated Section 1(a)(iii) and Section 2 of Executive Order 13685 ("Blocking Property of Certain Persons and Prohibiting Certain Transactions With Respect to the Crimea Region of Ukraine"), the Zimbabwe Sanctions Regulations, the Weapons of Mass Destruction Proliferators Sanctions Regulations, the Iranian Transactions and Sanctions Regulations, the now-repealed Sudanese Sanctions Regulations and the Syrian Sanctions Regulations.

OFAC concluded that 2,241 of the violations were not voluntarily self-disclosed, 19 were voluntarily self-disclosed, and all were non-egregious. To settle the charges, the company agreed to pay a $1,400,301 civil monetary penalty, and, among other remedial measures, agreed to replace its Chief Compliance Officer, retrain existing compliance employees, and hire new personnel focused on compliance testing.


Iran Sanctions, Non-Proliferation Sanctions, Sudan and Darfur Sanctions, Syria Sanctions, Ukraine and Russia Sanctions, Zimbabwe Sanctions
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