The Office for Foreign Assets Control (OFAC) recently announced a settlement with a major North American bank in relation to alleged violations of the North Korea Sanctions Regulations and the Foreign Narcotics Kingpin Sanctions Regulations.
The bank agreed to remit $115,000 to settle the civil liability, as well as to institute a series of changes to prevent further potential breaches. The changes included:
- Updating its operating procedures to require that reviews of customers affiliated with sanctioned jurisdictions must be escalated;
- Implementing an explicit sequence of events for adjudicating and escalating compliance alerts; and
- Putting into effect more explicit standards to account for spelling variations, abbreviations, transpositions and middle names where there was a potential match for a name against OFAC lists.
According to OFAC’s Enforcement Release, the bank opened accounts on behalf of nine North Korean officials to the United Nations without a license from OFAC and without going through the proper denied party screening process. In the second case, the institution’s Miami branch opened an account for an individual after failing to identify that the person was an entity on the Specially Designated Nationals (SDN) list.
All organizations, not just banks and financial institutions need to make sure that they have proper compliance screening solutions in place, such as Descartes Visual Compliance, to help screen against OFAC’s lists, as well as other restricted and denied party lists from governments and international bodies from around the world.