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Financial Services Law Insights and Observations

OFAC settles with global payments company

Financial Crimes OFAC Department of Treasury Enforcement Sanctions OFAC Designations Of Interest to Non-US Persons Settlement

Financial Crimes

On April 29, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a nearly $35,000 settlement between a Texas-based global payments company for 359 apparent violations of multiple sanctions programs. According to OFAC’s website notice, between March 2013 and April 2016, “the company provided money transfer services to the Department of Justice’s Federal Bureau of Prisons (BOP), which allowed inmates to send and receive funds into and out of their personal commissary accounts[]” without screening, or without sufficiently screening, the inmates against the SDN List.

In arriving at the settlement amount, OFAC considered various aggravating factors, including that the company (i) “knew that there could be incarcerated blocked persons that would be receiving payments into their commissary accounts, but did not screen the beneficiaries of the transactions against the SDN List because of an erroneous misunderstanding of itsobligations;” and (ii) is a large and commercially sophisticated international financial institution.

OFAC also considered various mitigating factors, including, among other factors, that the company (i) cooperated with OFAC’s investigation; and (ii) self-disclosed the apparent violations and had already undertaken remedial measures, including retiring its screening system and launching a new system, implementing screening for all BOP-related transactions, implementing additional training to its agent network, and increasing its compliance department staffing.

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