InfoBytes Blog
OFAC reaches $78,750 settlement with financial analytics company
On April 1, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a roughly $78,750 settlement with a financial analytics company for allegedly processing transactions in violation of Ukraine-Related Sanctions Regulations. According to OFAC’s web notice, in August 2016, the company (which had been recently acquired) reissued and re-dated an August 2015 invoice with a new date that was 374 days after the invoice for the debt was originally issued. After a partial payment, the company reissued the original August 2015 invoice creating two “new” invoices each reflecting half of the remaining balance and dated November 2016, both with payment due upon receipt. After another partial payment, the company reissued a fourth invoice with the remaining debt in September 2017, again altering the date. OFAC concluded that the company violated the Ukraine-Related Sanctions Regulations “by dealing in new debt of longer than 90 days maturity when [it] extended the payment date of its invoices.”
In arriving at the settlement amount, OFAC considered various aggravating factors, including, among other things, that (i) the company “failed to exercise a minimal degree of caution or care when it reissued and re-dated four invoices to extend the payment date of invoices far beyond the authorized debt tenor, knowing or having reason to know such conduct would violate U.S. sanctions regulations”; (ii) the company’s staff “were aware of and involved in the conduct giving rise to the Apparent Violations”; and (iii) the company “was a commercially sophisticated entity and considered a leader in global energy market analysis, with over 500 customers in 60 countries.” OFAC also considered various mitigating factors, including, among other things, that the company (i) has not received a penalty notice from OFAC in the preceding five years; (ii) “took remedial measures by enhancing their compliance program to better ensure compliance with OFAC sanctions, creating more robust training, adding periodic testing to invoices involving SSI List entities, and adding additional staff to manage sanctions issues”; and (iii) cooperated during the investigation.
Providing context for the settlement, OFAC stated that this “case underscores the importance of careful adherence to OFAC regulations, including in cases where counterparties may make compliance challenging.”