Bank of America, N.A. OFAC Settlement: $16.6M (2014)

The 213 apparent violations fall into three groups. Between September 10, 2005 and March 31, 2009, Bank of America processed 116 transactions totaling approximately $28,596 for three Specially Designated Narcotics Traffickers (SDNTs) in apparent violation of the FNKSR. Between September 11, 2005 and August 17, 2007, the bank processed 92 transactions totaling approximately $62,596 involving three SDNTs in apparent violation of the NTSR. Between October 31, 2006 and March 3, 2009, Bank of America failed to file timely blocked property reports regarding five accounts owned by four SDNTs, in apparent violation of the FNKSR, NTSR, and RPPR. Across all three groups, the bank processed 208 transactions totaling approximately $91,192 on behalf of, and failed to properly block five accounts owned by, 10 individuals OFAC had previously added to its SDN List.

The conduct flowed from a deficiency in Bank of America's OFAC screening tool that prevented the bank from identifying potential matches to individuals with multiple or multi-part last names on the SDN List. As early as October 2006, at least one official in Bank of America's office responsible for OFAC compliance was aware of the deficiency, but the bank did not resolve it until February 2009. OFAC had no information showing that any member of Bank of America's staff or management had actual knowledge of the filter deficiency prior to October 6, 2006. Bank of America processed additional apparent violations after it reported taking remedial actions to OFAC in 2006 and 2008.

The total base penalty amount for all 213 apparent violations was $83,650,000, comprising $82,832,000 for the 116 FNKSR transactions, $701,000 for the 92 NTSR transactions, and $117,000 for the five untimely blocked property reports.

Although Bank of America identified most of the apparent violations, OFAC determined that the disclosures are not voluntary self-disclosures within the scope of OFAC's definition under the Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A, because they were substantially similar to other apparent violations of which OFAC was already aware.

OFAC determined that the 79 transactions Bank of America processed on or after October 6, 2006, constitute an egregious case. The final settlement amount of $16,562,700 reflects reductions for mitigating considerations — including Bank of America's remedial actions, cooperation with OFAC's investigation, and its sanctions history in the five years preceding the apparent violations — and a further reduction for agreeing to enter into the settlement.

This case illustrates the compliance risk posed by known but unresolved screening tool deficiencies. Bank of America's OFAC screening tool could not identify potential matches to individuals with multiple or multi-part last names on the SDN List. At least one compliance official was aware of this deficiency as early as October 2006, yet the bank did not resolve it until February 2009 — more than two years later. During that period, the bank continued processing apparent violations even after reporting remedial actions to OFAC in 2006 and 2008.

The remedial steps Bank of America ultimately took, which OFAC credited in reducing the final settlement amount, included correcting the screening tool deficiency, voluntarily rescreening its customer database to identify additional accounts it was operating or had operated for persons on the SDN List and disclosing the results to OFAC, providing additional training to OFAC compliance personnel, upgrading the screening tool, and investing in additional sanctions compliance personnel. Bank of America also cooperated with OFAC's investigation by conducting an internal investigation, providing relevant information to OFAC, and agreeing to toll and subsequently extend the statute of limitations.

This page summarizes an OFAC enforcement case based on the document archived below. SanctionsLookup assumes no liability for errors, omissions, or inaccuracies in the original documents, this summary, or any changes made to the source documents at any time.

Provided for informational purposes only and does not constitute legal or compliance advice. Always consult the source document directly rather than relying on this summary.