NY DFS Takes Action Against Foreign Bank Regarding Transactions with Sanctioned Countries

NYDFS

On November 18, the New York DFS announced a consent order with a foreign bank for allegedly misleading regulators regarding its transactions with sanctioned countries, most notably Iran, Sudan, and Myanmar. According to the press release and consent order, from approximately 2007 through 2008, the bank convinced a consulting firm to “water down” reports submitted to regulators on its transactions. Specifically, the bank pressured the consulting firm to alter an historic transaction review (HTR) report to exclude key information, such as: (i) the English translation of the bank’s wire transfer instructions, which included a statement that the bank conducted business with “’enemy countries’ of the U.S.;” (ii) a majority of the consultant’s description of the bank’s wire transfer activities; and (iii) information “concerning [the bank’s] potential misuse of OFAC screening software” in connection with its wire transfer activities. The DFS ordered the bank to pay $315 million in penalties, in addition to the $250 million the DFS ordered the bank to pay June 2013 in connection with its sanctioned transactions.