OFAC Settlement Highlights Sanctions Compliance Extends Beyond The US Dollar

On August 27, 2021, the US Department of the Treasury announced that it had reached a settlement agreement with Romanian bank First Bank SA (First Bank) and its US parent company, JC Flowers & Co. (JC Flowers), resulting from financial services First Bank provided to parties located in Iran and Syria. Specifically, JC Flowers and First Bank agreed to pay Treasury more than $850,000 in civil penalties associated with 98 commercial transactions that may have violated Treasury's Office of Foreign Assets Control (OFAC)'s Iran and Syria sanctions programs.

According to Treasury, these apparent violations resulted from "First Bank's lack of understanding of the scope of U.S. sanctions regulations applicable to financial institutions without a physical presence in the United States." In one regard, First Bank's "lack of understanding" was typical of what is seen in many other OFAC settlement agreements with foreign banks operating outside the United States: First Bank