Intesa Sanpaolo S.p.A. OFAC Settlement: $2.9M (2013)

As early as the late 1990s, Intesa maintained a customer relationship with Irasco S.r.l. ("Irasco"), an Italian company headquartered in Genoa, Italy that is owned or controlled by the Government of Iran ("GOI"). Despite Irasco's ownership and line of business as an exporter of goods to Iran, and its financial and commercial associations with Iranian state-owned financial institutions, companies, and projects, Intesa failed to identify Irasco as meeting the definition of the GOI in the ITR and did not take appropriate measures to prevent the bank from processing transactions for or on behalf of Irasco that terminated in the United States and/or with U.S. persons. Intesa's payment instructions for these transactions all identified Irasco as the ordering customer.

Separately, Intesa processed approximately 120 transactions to or through the United States that involved Cuba or Sudan. Intesa does not appear to have implemented or utilized special procedures or payment practices in order to process these payments to or through the United States.

Intesa processed 53 wire transfers totaling approximately $1,643,326 between October 29, 2004, and March 12, 2008, involving Cuba in apparent violation of the CACR. Intesa processed 31 wire transfers for Irasco totaling $3,142,565 between November 1, 2004, and December 8, 2006, in apparent violation of the ITR. Intesa processed 67 funds transfers involving Sudan totaling $2,858,065 between November 4, 2004, and October 29, 2007, in apparent violation of the SSR.

OFAC determined that Intesa did not voluntarily self-disclose the apparent violations and that the apparent violations constituted a non-egregious case. The base penalty for the Cuba-related apparent violations was $1,867,000; for the Iran-related apparent violations, $3,371,000; and for the Sudan-related apparent violations, $4,124,000. The total base penalty amount was $9,362,000. The settlement amount of $2,949,030 reflects OFAC's consideration of the following facts and circumstances pursuant to the General Factors under OFAC's Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A: Intesa had reason to know that Irasco met the definition of the GOI in the ITR and that payments which terminated in the United States for this customer constituted apparent violations of the ITR; Intesa's conduct resulted in harm to the integrity of U.S. economic sanctions programs; Intesa is a commercially sophisticated international financial institution; and Intesa did not, at the time of the apparent violations, maintain an adequate program to ensure compliance with U.S. economic sanctions. Substantial mitigation was provided because: the apparent violations did not constitute a willful or reckless violation of the law; no Intesa managers or supervisors had actual knowledge or awareness of these matters within the meaning of the Guidelines; Intesa provided substantial cooperation to OFAC, including signing a tolling agreement and multiple extensions; Intesa took remedial action in response to the apparent violations and now has a more robust compliance program in place; and Intesa has not received a penalty notice or Finding of Violation from OFAC in the five years preceding the date of the transactions giving rise to the apparent violations.

Intesa had reason to know that Irasco met the definition of the GOI in the ITR, given Irasco's ownership by the Government of Iran, its line of business as an exporter of goods to Iran, and its financial and commercial associations with Iranian state-owned institutions — yet Intesa failed to identify it as such and did not prevent the processing of Irasco transactions terminating in the United States. Intesa also did not implement or utilize special procedures or payment practices to screen Cuba- and Sudan-related payments routed to or through the United States. At the time of the apparent violations, Intesa did not maintain an adequate program to ensure compliance with U.S. economic sanctions. Intesa received credit for taking remedial action and establishing a more robust compliance program following the apparent violations.

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