Lessons Learned From Recent OFAC Enforcement Actions

Two recent OFAC enforcement actions highlight real-world challenges that financial institutions and other companies may face in their efforts to implement an effective sanctions compliance program.

First, OFAC announced on July 15 that a U.S. credit card services provider had agreed to pay $430,500 to settle apparent violations of the Foreign Narcotics Kingpin Sanctions Regulations. The settlement arose from 214 transactions totaling $155,189 that allegedly involved an individual who had been issued a supplemental credit card and was later named on OFAC's Specially Designated Nationals and Blocked Persons List (the "SDN List"). According to OFAC, the apparent violations were the result of a series of human errors and compliance program flaws, including: (i) erroneous closure of a "high confidence" alert in May 2018, which permitted the sanctioned individual to continue using the supplemental card on the account; (ii) improper removal of an account suspension by a