American Honda Finance OFAC Settlement: $87.3K (2017)

The conduct was carried out through Honda Canada Finance, Inc. (HCFI), a majority-owned subsidiary of AHFC located in Canada. Between February 28, 2011 and March 3, 2014, HCFI approved and financed 13 lease agreements between an unaffiliated Honda dealership in Ottawa, Canada and the Embassy of Cuba in connection with the Cuban Embassy's leasing of several Honda vehicles, totaling $276,999. The Cuban entity had the word "Cuba" in its name and provided documentation to HCFI demonstrating it was a Government of Cuba entity.

Although AHFC and HCFI had policies and procedures in place to review transactions against OFAC's List of Specially Designated Nationals and Blocked Persons for compliance with U.S. economic sanctions laws, they did not include the names of countries subject to OFAC-administered comprehensive sanctions in their screening system. AHFC and HCFI were not involved in the business of exporting vehicles internationally.

Three of the 13 lease agreements, totaling $58,281, were initiated and/or approved by HCFI on or about March 3, 2014, approximately two months after AHFC submitted its initial voluntary self-disclosure to OFAC regarding similar apparent violations.

OFAC determined that AHFC voluntarily self-disclosed the apparent violations and that the apparent violations constitute a non-egregious case. The total base penalty amount for the 13 apparent violations was $138,500. The settlement amount of $87,255 reflects OFAC's consideration of the facts and circumstances pursuant to the General Factors under OFAC's Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A.

AHFC and HCFI had sanctions screening in place but configured it only against OFAC's List of Specially Designated Nationals and Blocked Persons, without including the names of countries subject to OFAC-administered comprehensive sanctions programs. This gap allowed 13 lease agreements with a Government of Cuba entity (one whose name contained the word "Cuba" and which had provided documentation confirming its status) to proceed without being flagged. In response to the apparent violations, AHFC implemented a new policy governing its OFAC compliance procedures and proprietary systems. OFAC treated as an aggravating factor the transactions that occurred after AHFC had already filed its initial voluntary self-disclosure, reflecting that ongoing conduct following a VSD can weigh against a lower settlement outcome.

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