Deutsche Bank Trust Americas OFAC Settlement: $18.9K

DBTCA committed two apparent violations of E.O. 13382. On October 24, 2008, DBTCA processed a $3,177 funds transfer originated by Hansabanka's customer, Air Baltic Corporation, destined for the account of "I.A.C." at Commerzbank AG, Frankfurt, Germany. The originator to beneficiary information field of the payment instructions contained the reference "MELIGB2L," the Business Identifier Code ("BIC") for the London branch of Bank Melli, which OFAC had designated on October 25, 2007, pursuant to E.O. 13382. DBTCA processed the payment straight through and without manual intervention. DBTCA later determined that the beneficiary "I.A.C." referred to the "Iran Airport Company."

On March 11, 2009, DBTCA rejected rather than blocked a $10,000 funds transfer originated by Intercontinental Bank Plc, Lagos, Nigeria, on behalf of Amsergs Nigeria Ltd., destined for the account of Chahar Mahal va Bakhtiary Yeast Co., Isfahan, Iran, at the Export Development Bank of Iran ("EDBI"), which OFAC had designated on October 22, 2008, pursuant to E.O. 13382. DBTCA's automated interdiction software stopped the transaction for review due to a number of potential matches, including to Iran and to EDBI. A total of seven DBTCA employees, including a senior member of the review team who was the final reviewer for escalated OFAC matters, reviewed the transaction and failed to notice the reference to EDBI in the payment. Based on their review, DBTCA rejected the transaction based on the beneficiary's location in Iran, rather than blocking the transaction due to the involvement of EDBI.

OFAC determined that DBTCA did not voluntarily self-disclose the apparent violations and that the apparent violations constituted a non-egregious case. OFAC concluded that the apparent violations were not the result of willful or reckless conduct. The total base penalty amount for the apparent violations was $35,000. Although the apparent violations did not confer an economic benefit on a sanctioned entity, OFAC considered the fact that DBTCA's action of improperly rejecting rather than blocking the March 11, 2009, transaction negatively impacted the policy objectives of E.O. 13382. Mitigation was further extended because DBTCA agreed to settle these apparent violations. The final settlement amount of $18,900 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.

The case highlights the necessity of including the BICs of designated financial institutions in automated interdiction software. DBTCA's failure to include the BIC for the London branch of Bank Melli allowed a transaction referencing that designated entity to pass straight through without manual review. The case also illustrates the distinction between rejecting and blocking: when a transaction involves a designated party, the required response is to block the funds, not reject the transaction. DBTCA's automated software correctly flagged the March 11, 2009, transaction, but seven reviewers -- including the senior final reviewer for escalated OFAC matters -- rejected it based on the beneficiary's location in Iran without identifying the separate involvement of EDBI, a designated entity appearing elsewhere in the payment details.

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