Toronto-Dominion Bank OFAC Settlement: $516.1K (2017)

TD Bank's Global Trade Finance business, based in Montreal, Canada, engaged in trade finance transactions involving import-export letters of credit for Canadian customers that the bank failed to screen for any potential nexus to an OFAC-sanctioned country or entity prior to processing related transactions through the U.S. financial system. Three patterns gave rise to the 167 apparent violations covered by the settlement.

First, beginning as early as 2003 or 2004, TD Bank maintained accounts for a Canadian company owned by a Cuban company. TD Bank had reason to know about the customer's connections to Cuba through the company's ownership and business, as well as actual knowledge on the part of several employees and business lines as early as 2005 and 2006. Between August 14, 2007 and April 22, 2011, TD Bank processed 29 transactions totaling $1,156,181.37 to or through the United States in apparent violation of the CACR.

Second, TD Bank maintained accounts in Canada for a freight, cargo, and shipping business that a document available to the bank identified as a sales agent for an entity on OFAC's List of Specially Designated Nationals and Blocked Persons located in Iran. Between December 1, 2008 and March 28, 2012, TD Bank processed 39 transactions totaling $515,071.20 to or through the United States on behalf of this customer in apparent violation of the ITSR.

Third, TD Bank maintained accounts for 62 Cuban nationals residing in Canada. Between August 7, 2007 and January 24, 2011, TD Bank processed 99 transactions totaling $459,341.62 to or through the United States on behalf of these customers in apparent violation of the CACR.

The conduct involved multiple business units throughout TD Bank's network outside the United States, including at times supervisory or management personnel, that had reason to know or actual knowledge of information regarding these customers' connections to OFAC-sanctioned jurisdictions or parties. The apparent violations appear to have occurred due to shortcomings in the bank's OFAC compliance policies, procedures, and program.

Separately, OFAC issued a Finding of Violation to TD Bank as parent of wholly owned subsidiaries Internaxx Bank SA and TD Waterhouse Investment Services (Europe) Limited for 3,491 violations of the CACR and ITSR.

OFAC determined that TD Bank voluntarily self-disclosed the 167 apparent violations and that those apparent violations constitute a non-egregious case. The total base penalty amount for the apparent violations was $955,750. After considering aggravating and mitigating factors under the General Factors Affecting Administrative Action in OFAC's Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A, OFAC agreed to a settlement amount of $516,105.

The separately issued Finding of Violation for 3,491 violations of the CACR and ITSR, covering conduct attributed to TD Bank's subsidiaries Internaxx Bank SA and TD Waterhouse Investment Services (Europe) Limited, did not carry a monetary penalty.

The case highlights gaps that can arise when a bank's compliance program lacks controls sufficient to identify transactions processed to, through, or within the United States on behalf of customers owned by entities in OFAC-sanctioned countries, or customers that conduct business with sanctioned parties. TD Bank's Global Trade Finance business failed to screen import-export letters of credit for any potential nexus to OFAC-sanctioned countries or entities before processing related transactions through the U.S. financial system.

The conduct also illustrates the risk when information regarding a customer's sanctions connections — held by individual employees, business lines, or available in bank documentation — is not systematically integrated into the compliance program. In this case, several employees and business lines had actual knowledge of customers' ties to Cuba as early as 2005 and 2006, and documentation available to the bank identified another customer as a sales agent for an SDN entity, yet the transactions continued.

TD Bank's voluntary self-disclosure, detailed cooperation, and remedial response — including changes to its policies, procedures, and compliance structure — were all credited as mitigating factors in reaching the final settlement amount.

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.