OFAC Posts Information on Recent Civil Penalties

On February 1, 2011, Office of Foreign Assets Controls (OFAC) published recent civil penalty information

·    Trans Pacific National Bank of San Francisco, CA (Trans Pacific) paid $12,500 to settle allegations of violating the Iranian Transactions Regulations (ITR) from September 18, 2007 to March 19, 2008.  OFAC alleged that Trans Pacific engaged in transactions related to goods of Iranian origin and services for exportation to Iran, and facilitated transactions by a foreign person by initiating two separate wire transfers on behalf of an account holder for an underlying commercial transaction prohibited by the ITR, which is prohibited by the ITR if performed by a U.S. person.  In one instance, the wire transfer instructions referenced "Iranian material" and in the other instance the instructions referenced "Iran material."  The value of the transactions totaled $35,600. Trans Pacific did not voluntarily disclose this matter to OFAC.  The settlement amount reflected the fact that at the time of the transactions, Trans Pacific's filtering system was not designed to detect references to sanctions targets in the "Originator to Beneficiary Information" field leading to both of these apparent violations; and Trans Pacific has enhanced its compliance program in response to the violations by requiring that the memorandum information of each wire transfer also be reviewed for OFAC sanctions references. 

·    Aon International Energy, Inc. of Houston, TX (Aon Energy), a subsidiary of Aon Corporation, paid $36,000 to settle allegations of violations of the Iranian Transactions Regulations (ITR) that occurred in October 2005.  OFAC alleged that Aon Energy had facilitated the placement of coverage and the payment of premiums for facultative retrocession reinsurance that reinsured construction risks associated with a petroleum project on Kharg Island in Iran.  Specifically, Aon Energy brokered and placed facultative retrocession reinsurance on behalf of a European reinsurer with two European retrocessionaires.  The combined premium for the two retrocession reinsurance placements was $62,883. Aon Energy did not voluntarily disclose this matter to OFAC. The settlement amount reflected OFAC's consideration of the fact that AON Energy provides specialized insurance services resulting in transactions that were particularly harmful to the sanctions program; OFAC viewed the apparent violations as part of a pattern of reckless, but not egregious, conduct by Aon Energy in connection with these policies; Aon Energy, under the direction of its parent, Aon, took several steps to strengthen its OFAC compliance program and its existing OFAC procedures after the apparent violations; Aon Energy has not been the subject of prior OFAC penalties or other OFAC administrative actions; and Aon Energy cooperated with OFAC and also entered into a tolling agreement with OFAC which was undertaken by Aon on behalf of Aon Energy.