Cameron International Corporation (September 27, 2021)
$1,423,766 settlement for violations of the Ukraine-Related Sanctions Regulations
Cameron, a Texas-based supplier of goods and services for the oil and gas industry, provided services to Gazprom-Neft Shelf for an Artic offshore oil project
It provided these services when in July 2015 four U.S.-person senior managers at Cameron approved five contracts for its Romania subsidiary to supply goods to one of Gazprom-Neft Shelf’s offshore oil exploration platforms located in the Russian Arctic
Gazprom-Neft Shelf is a wholly-owned subsidiary of Gazprom (identified on the SSI List) and was subject to Directive 4 restrictions
Cameron had a policy in place to comply with Directive 4, but the relevant compliance policies did not indicate that U.S.-person involvement in the activities of Cameron’s foreign subsidiaries could violate Directive 4’s prohibitions
In June 2017 Cameron submitted a notice of apparent violation following a compliance review after it was acquired by Schlumberger, a Dutch-organized company
Aggravating factors
The U.S.-person senior managers were aware that their approvals were for contracts to supply goods to Gazprom-Neft Shelf for Arctic offshore oil production and exploration
Cameron provided a real economic benefit to Gazprom-Neft Shelf and acted directly contrary to US foreign policy objectives
Cameron is a large and commercially sophisticated firm with an extensive global presence and operates in an industry with significant sanctions risk
Mitigating factors
Cameron took corrective action including identifying all employees who should recuse themselves from Russia-related activities and implementing an automatic block on all Russia-related orders to allow for additional review
Cameron cooperated with OFAC during the investigation
Sanctions Case Studies (Cont’d)
Union de Banques Arabes et Francaises (January 4, 2021)
$8,572,500 settlement for violations of Syria-Related Sanctions Programs
Between August 2011 and April 2013, UBAF operated U.S. dollar accounts on behalf of sanctioned Syrian financial institutions and indirectly conducted USD business on behalf of these institutions through the U.S. financial system
Most violations involved UBAF’s processing of internal transfers on behalf of Syrian entities that were followed by corresponding funds transfers through a U.S. bank. Other violations involved “back-to-back” letter of credit transactions
UBAF’s actions during this time period demonstrated knowledge of OFAC sanctions laws, but it acted recklessly by failing to
exercise a minimal degree of caution in accounting for the risks associated with providing USD-based services to sanctioned parties
Aggravating factors
UBAF demonstrated a reckless disregard for its U.S. sanctions compliance obligations when it continued to provide USD services to sanctioned Syrian parties after the August 2011 expansion of U.S. sanctions on Syria
UBAF management had actual knowledge of the conduct giving rise to the violations
UBAF conferred significant economic benefit to sanctioned parties and caused significant harm to the integrity of U.S. sanctions
Mitigating factors
UBAF had a compliance program in place at the time of the violations
UBAF voluntarily self-disclosed the violations to OFAC and cooperated with OFAC’s investigation
UBAF invested substantial resources in improving its compliance program and undertook several remedial measures, including adopting a new Financial Security Charter, adopting new sanctions policies, providing training for all employees, and reviewing its business lines and terminating high risk business lines
Sanctions Case Studies (Cont’d)
Berkshire Hathaway, Inc. on behalf of Iscar Turkey (Turkish subsidiary) (October 20, 2020)
$4,144,651 settlement for violations of the Iranian Transactions and Sanctions Regulations
Iscar Turkey sold cutting tools to two Turkish third-party distributors knowing that such goods would later be shipped to a distributor in Iran for resale to Iranian end-users, including a number identified by Berkshire as being Iranian government entities
Iscar Turkey took steps to obfuscate its dealings with Iran, including concealing these activities from Berkshire through the use of false names in internal records, providing false assurances in response to compliance inquiries and lying to internal investigators
From 2012 to 2016, Iscar Turkey completed 144 orders of goods that were ultimately resold and shipped to Iran with a total transactional value of $383,443
The violations were directed by Iscar Turkey senior managers despite Berkshire’s repeated communications and policies sent to Iscar Turkey regarding U.S. sanctions against Iran and the application of the ITSR to Iscar Turkey’s operations
Iscar Turkey’s General Manager believed that U.S. sanctions on Iran would eventually be lifted and he wanted to have pre-existing commercial relationships with Iranian distributors when that occurred
Berkshire voluntarily self-disclosed the violations to OFAC in May 2016 after receiving an anonymous tip in January 2016
Aggravating factors
Iscar Turkey’s management willfully engaged in transactions with knowledge that such transactions violated U.S. sanctions
Certain Berkshires subsidiaries knew or had reason to know that some of the products sent to Iscar Turkey were intended for Iran
Iscar Turkey’s senior management intentionally concealed its dealings with Iran
Iscar Turkey demonstrated a pattern of conduct by knowingly engaging in prohibited dealings for approximately three years
Mitigating factors
Berkshire voluntarily self-disclosed the violations and promptly responded to OFAC’s follow-on questions
Berkshire took appropriate measures upon learning of Iscar Turkey’s dealings with Iran, including replacing complicit personnel
Sanctions Case Studies (Cont’d)
Generali Global Assistance, Inc. (October 1, 2020)
$5,864,860 settlement for violations of the Cuban Assets Control Regulations
Generali Global Assistance (GGA) served as a travel services provider on behalf of two Canadian insurers that offered medical expenses, travel insurance, and emergency travel insurance policies for non-U.S. Canadian subscribers who travelled to Cuba
GGA provided prohibited post-travel claim reimbursements directly to Canadian travelers who travelled to Cuba, and provided for the indirect payment of claims to Cuban service providers through a Canadian affiliate
Specifically, GGA provided medical expense claim processing and payment services in support of claims paid to Canadian travelers. Between June 2010 and January 2015 GGA processed 2,593 transactions (worth $285,760) in violation of the CACR
Payments intended for Cuban service providers were referred by GGA to a Canadian affiliate
Aggravating factors
GGA demonstrated recklessness when it intentionally avoided making direct payments to Cuban service providers and instead formalized a referral process to make reimbursement payments to those providers indirectly through a Canadian affiliate
GGA is part of a large and sophisticated global organization that provides travel services to insurers and other corporate clients worldwide
Mitigating factors
The CACR were later amended to authorize some of GGA’s prohibited conduct and the total transaction value of the violations was relatively low
No prior penalties, findings of violations, or other actions (including settlements), in the five years preceding the first violation
GGA took remedial action including enhancing its OFAC compliance policies and establishing a formal structure for compliance personnel; GGA has committed to ensuring that senior leadership support GGA’s strengthened OFAC compliance program
Sanctions Case Studies (Cont’d)
Société Internationale de Télécommunications Aéronautiques SCRL (“SITA”) (February 26, 2020)
$7,829,640 settlement for violations of the Global Terrorism Sanctions
SITA provided commercial services and software in the form of Type B messaging services (routed through servers in Atlanta), Maestro DCS Local and software that processes and tracks baggage movement
Mahan Air, Syrian Arab Airlines and Caspian Air, entities designated by OFAC as specially designated global terrorists (SDGTs) were all SITA members and benefitted from SITA’s goods, services, and technology that were either U.S.-origin or provided from or through the U.S.
SITA also identified to OFAC that it provided services to Meraj Air and Al-Naser Airlines, both SDGTs
SITA knew it was providing services to SDGTs and implemented periodic measures to comply with U.S. economic sanctions laws and regulation, including terminating services it knew were subject to U.S. jurisdiction
Aggravating factors
SITA had actual knowledge that it was providing services and software directly or indirectly to SDGTs
SITA harmed the foreign policy objectives of the GTSR by providing services and software that facilitated the operations of airlines that were sanctioned for supporting terrorism
SITA is a commercially sophisticated entity that operates in virtually every country in the world
Mitigating factors
No penalties of finding of violations in the five years before the first violation
The transactions giving rise to the violations represented a small percentage of SITA’s overall business
SITA implemented extensive remedial efforts and enhancements to its compliance program, customer and supplier screening, and the expulsion of the SDGTs from the organization
Sanctions Case Studies (Cont’d)
Sanctions Case Studies (Cont’d)
UniCredit Bank AG (April 15, 2019)
$553,380,759 settlement for violations of various sanctions programs
UniCredit Bank AG operated USD accounts on behalf of the Islamic Republic of Iran Shipping Lines (IRISL) and several IRISL affiliates and processed payments in which IRISL had an interest through U.S. financial institutions
UniCredit processed USD payments in an “OFAC neutral” manner on behalf of persons subject to U.S. sanctions programs
Part of a global settlement among UniCredit Group entities, OFAC, the U.S. Department of Justice, the New York County District Attorney’s Office, the Federal Reserve Board of Governors, and the Department of Financial Services of the State of New York
Aggravating factors
With regard to IRISL-related conduct:
UniCredit Bank AG acted at least with reckless disregard for U.S. sanctions requirements by failing to implement and successfully deploy appropriate controls to prevent the processing of transactions in which IRISL had an interest
UniCredit Bank AG acted recklessly when it processed USD transactions on behalf of IRISL-related entities
UniCredit Bank AG knew or should have known prior to IRISL’s designation that IRISL had an interest in the various IRISL-related accounts
With regard to “OFAC neutral” process:
UniCredit Bank AG acted willfully to circumvent U.S. economic sanctions law by formatting payment instructions in a manner that prevented U.S. intermediary parties from detecting the involvement of OFAC-sanctioned parties or countries
UniCredit Bank AG’s pattern of violations continued for five years
UniCredit Bank AG’s conduct conferred significant economic benefit to sanctioned persons and undermined policy objectives of U.S. sanctions programs
Sanctions Case Studies (Cont’d)
UniCredit Bank AG (April 15, 2019) (Cont’d)
Mitigating factors
OFAC had not issued UniCredit Bank AG a penalty notice or Finding of Violation in the five years preceding the date of the earliest transaction giving rise to the apparent violations
UniCredit Bank AG cooperated with OFAC’s investigation by conducting an internal investigation, identifying all subject transactions, and tolling the statute of limitations
UniCredit Bank AG took remedial action
A small number of the violations involving an interest of IRISL occurred shortly after OFAC’s designation of IRISL on September 10, 2008
Sanctions Case Studies (Cont’d)
Standard Chartered Bank (April 9, 2019)
$639,023,750 settlement for violations of CACR, ITSR, SySR
SCB processed thousands of transactions that involved persons or countries subject to OFAC sanctions programs
Concerns USD transactions involving Iran-related accounts maintained by SCB’s Dubai, UAE branches
Related to the global settlement
Aggravating factors
SCB acted with reckless disregard and failed to exercise a minimal degree of caution or care with regard to the conduct that led to the violations
SCB had actual knowledge and / or reason to know of the underlying conduct at issue
The violations resulted in significant harm to multiple economic sanctions programs and provided sanctioned companies access to the U.S. financial system
SCB’s compliance program was inadequate to manage the bank’s risk and suffered from multiple systematic deficiencies
SCB is a large, commercially sophisticated financial institution
Mitigating factors
SCB cooperated with OFAC by tolling the statute of limitations and submitting response to OFAC’s requests
SCB has taken remedial efforts to prevent recurrence of the violations in the future
A small number of the Syria-related transactions occurred shortly after Executive Order 13582
SCB had not received a penalty notice or Finding of Violation in the five years preceding the earliest date of the transactions giving rise to the Global Settlement Apparent Violations