Deutsche Bank Trust Americas OFAC Settlement: $425.6K

Between December 22, 2015 and December 30, 2015, DBTCA processed 61 transactions totaling $276,742.90 destined for accounts with Open Joint Stock Company Krasnodar Regional Investment Bank (a.k.a. OAO Krayinvestbank; a.k.a. OJSC Krayinvestbank; collectively, Krayinvestbank), a financial institution on the SDN List, in apparent violation of E.O. 13685 of December 19, 2014, "Blocking Property of Certain Persons and Prohibiting Certain Transactions with Respect to the Crimea Region of Ukraine." Despite each payment containing Krayinvestbank's SWIFT Business Identifier Code (BIC) and an almost identical match to the bank's name and address, all of which were included on the SDN List at the time of designation, DBTCA processed the majority of the payments on a straight-through basis without manual intervention.

Two failures contributed to the processing of these transactions. Contrary to its internal procedures, DBTCA failed to include Krayinvestbank's SWIFT BIC as an identifier when it originally added the bank's information to its interdiction filter. In addition, at the time of the transactions, DBTCA's filter was calibrated in such a way that only a payment with an exact SDN List match would trigger manual review.

For the E.O. 13685 component of the settlement, the statutory maximum civil monetary penalty is $18,003,601. OFAC determined that DBTCA did not voluntarily self-disclose the apparent violations, and that the apparent violations constitute a non-egregious case. Accordingly, under the Enforcement Guidelines, the total base penalty amount for the apparent violations is $640,000. The settlement amount of $425,600, which together with the settlement amount for the Ukraine-Related Sanctions Regulations component comprises the aggregate $583,100 settlement, reflects OFAC's consideration of relevant facts and circumstances pursuant to the General Factors under the Enforcement Guidelines.

As part of its settlement with OFAC, DBTCA has agreed to maintain robust compliance procedures by ensuring that its management team is committed to compliance; it conducts risk assessments in a manner, and with a frequency, that adequately account for potential risks; it implements internal controls that adequately address the results of its OFAC risk assessment and profile; and its OFAC-related training program provides adequate information and instruction to employees.

These enforcement actions highlight the risks associated with a U.S. person failing to take adequate steps to ensure that transactions being processed are compliant with U.S. economic sanctions laws, particularly in instances in which a U.S. person has actual knowledge or reason to know, prior to the transaction being effected, of an SDN's present, future, or contingent interest in a transaction. In particular, U.S. persons should take due caution in accepting the oral or written representations of non-accountholder parties to a transaction where it relates to potential involvement of an SDN.

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