InfoBytes Blog
OFAC announces settlement with electronic rewards company
On September 30, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a $116,000 settlement with a Washington-based company that supplies and distributes electronic rewards, for allegedly processing transactions in violation of multiple U.S sanctions regulations. According to OFAC’s notice, the company allegedly “transmitted 27,720 merchant gift cards and promotional debit cards, totaling $386,828.65, to individuals with email or IP addresses associated with Cuba, Iran, Syria, North Korea, or the Crimea region of Ukraine.” In arriving at the settlement amount, OFAC considered various aggravating factors, including that the company (i) “failed to impose risk-based geolocation rules using tools at its disposal to identify the location of its reward recipients, despite having reason to know that it was transmitting rewards to recipients in sanctioned jurisdictions”; and (ii) “conferred up to $386,828.65 in economic benefit to jurisdictions and regions subject to sanctions.” OFAC also considered various mitigating factors, including that the company has not received a penalty notice from OFAC in the preceding five years, “represents that it undertook various measures to strengthen its OFAC compliance processes,” voluntarily self-disclosed the alleged violations, and substantially cooperated with the investigation.