OFAC Enforcement Action: It’s not the size that matters…

It’s the risk in your operation. OFAC fined National Bank of Pakistan $28,800 for seven violations of anti-terrorism sanctions.

The amount of the 7 funds transfers to Kyrgyz Trans Avia totalled $55,952.14, and the base penalty was $64,000.

But that’s not the interesting thing.

The penalty occured because the bank’s OFAC filter did not catch the reference to the sanctioned entity when the spaces between words were missing (e.g. “Kyrgyztransavia”). That might be something that would be allowed to slide by with a Cautionary Letter for small firms.

So, is this fine happening because the firm operates in that particular part of the world? Or, is this a “show penalty” like the Deutsche Bank fine (for not screening for BIC addresses) or the Wells Fargo fine (for not comparing the dates of birth to that on the OFAC SDN List)?

In case you were curious, here’s why the fine ended up at $28,800:

The following were considered aggravating factors:

NBP New York
processed seven transactions involving an SDN, five of which conferred economic benefit to a
sanctioned party and resulted in harm to the sanctions program objectives of the GTSR;

NBP
New York is a sophisticated financial institution; and

NBP New York’s OFAC interdiction filter
failed to generate an alert to an SDN in seven separate transactions.

The following were
considered mitigating factors:

no NBP New York managers or supervisors were aware of the
conduct that led to the apparent violations;

NBP New York has not received a penalty notice or
Finding of Violation from OFAC in the five years preceding the earliest date of the apparent
violations;

NBP New York took appropriate remedial action in response to the apparent
violations and took steps to enhance its OFAC interdiction filter; and

NBP New York cooperated
with OFAC’s investigation.