The Office of Foreign Assets Control (OFAC) released information on October 20th about yet another violation of their sanctions program and the dollar amount is sure to raise some eyebrows.
Crédit Agricole Corporate and Investment Bank (CA-CIB) settled their civil liability for apparent violations of multiple sanctions programs. For a number of years, dating back to 2003 and up to and including 2008, CA-CIB and some of it’s operating entities processed thousands of transactions to or through U.S. financial institutions that involved countries and/or persons subject to the sanctions regulations administered by OFAC.
OFAC determined that CA-CIB did not voluntarily self-disclose these apparent violations, and that the apparent violations constituted an egregious case. The initial monetary penalties in this case were nearly $1.5 Billion ! Ultimately CA-CIB agreed to settle with OFAC the apparent violations of OFAC regulations for nearly $330 Million.
There is a lot to this case for the casual observer to consider; the most obvious element is how incredibly high the dollar amounts have grown in these cases. The impact of these fines, at these levels, would be crippling to many companies and to the employees that allow this to happen on their “watch.” Of course in the cases of CA-CIB, they were found to be in egregious violation and they did not self-disclose, but we have observed in many instances where the wrong-doing company was not in “egregious” violation and they did self-disclose there are still very hefty fines to pay.
The message we are hearing from the Office of Foreign Assets Control is that they are looking everywhere in pursuit of violations even as far back as 2003. Ignorance is not an excuse and companies are expected to have a program in place to identify any suppliers or business partners that show up on these sensitive watch lists – and it is not enough to pre-screen or screen suppliers at the time of set up. As per the OFAC rules, companies must remain constantly vigilant to ensure that suppliers do not move onto any watch lists even after they have been on boarded as a supplier. The responsibility rests on you!
For questions about how your company can avoid the risk of working with companies on the OFAC list and threat of enormous monetary penalties read about the Lavante OFAC compliance solution.
You can also read more about the growing presence of OFAC and the growing volume of penalties an our informative white paper available for free download from our website.