Australia and New Zealand Bank Group, Ltd. (“ANZ”) has paid $5.75 million to the Office of Foreign Assets Control (“OFAC”) to settle alleged violations by ANZ of OFAC’s Sudanese sanctions regulations and Cuban sanctions regulations between 2004 and 2006. In its notice regarding the penalty, OFAC stated that ANZ actively manipulated SWIFT messages related to transactions through correspondent accounts by removing references to OFAC sanctioned jurisdictions and entities, thereby concealing the identities of targets of U.S. sanctions and impeding the ability of U.S. banks to detect the violations. The settlement covers 16 transactions involving a total of $28 million that allegedly violated the Sudan sanctions regulations and 15 transactions involving a total of $78 million that allegedly violated the Cuban sanctions regulations.Although ANZ did not voluntarily disclose the violations to OFAC prior to OFAC’s detection of them, and therefore was unable to take advantage of OFAC’s policy of reducing penalties when violations are self-disclosed, OFAC did mitigate the total penalty based on ANZ’s substantial cooperation, its prompt and thorough remedial response, and the fact that ANZ had not been subject to an OFAC enforcement action in the five years preceding the transactions at issue. As part of the settlement, ANZ has agreed to make further revisions to its OFAC compliance policies and procedures as needed to ensure that OFAC prohibited transactions are not processed by or through U.S. financial institutions.
Alert September 01, 2009