OFAC Whips Up Another Fine for the Strip Club

Posted on 27 August 2009 by Naomi Cohen

The Australia and New Zealand Bank Group Ltd (ANZ Bank) settled allegations of violations of the US Sudanese Sanctions Regulations and the Cuban Assets Control Regulations with OFAC yesterday. The case is remarkably similar to the Lloyds TSB fine that was levied earlier this year which earned the banks the endearing title of “The Strip Club”.

ANZ have settled allegations and paid $5,750,000 ($A7 million). The fine could have been much larger however OFAC mitigated the fine as the bank had been very cooperative since the original issue was uncovered over three and a half years ago. ANZ did not voluntarily disclose the problem but once the issues had been identified they did conduct extensive reviews of all their transactions and uncovered further violations that OFAC had been unaware of at the time.

ANZ has since revised its current operating model to fill in operational gaps and identify risks and weaknesses more effectively. ANZ's chief risk officer Chris Page said “We've worked hard with regulators over the past 3 1/2 years to comprehensively address the issues identified," he added "This has included more robust policies and procedures, and a group-wide sanctions compliance training program for staff."

Earlier this year Lloyds TSB forfeited $350 million dollars to the U.S. Department of Justice (DOJ) and the New York County District Attorney’s office (NYDA). The fine concerned the bank’s admitted non-compliance with the OFAC sanctions regime in relation to Iran and Sudan. Both banks removed data from payment messages. The ANZ case involved international trade finance and foreign currency exchange activities through U.S. correspondent accounts between 2004 to 2006. ANZ actively manipulated the SWIFT messages related to the Sudanese transactions by removing references to Sudan or the names of entities subject to sanctions in the United States, thereby concealing the identities of the targets of U.S. sanctions and impeding the ability of U.S. banks to detect these violations. The settlement covers 16 transactions in the aggregate amount of approximately $28 million alleged to have violated the Sudanese Sanctions Regulations, and 15 transactions in the aggregate amount of $78 million alleged to have violated the Cuban Assets Control Regulations.

OFAC are still investigating other members of the ‘Strip Club’ who we can expect to see unveiled in time.

Further Information:

US OFAC Enforcement Action

US OFAC Settlement Agreement

Lloyds TSB is Busted for 'Stripping'

Topics: Lloyds TSB OFAC Sanctions US DoJ