The breach of sanctions carries high reputational risks for jurisdictions. As a result, greater scrutiny has been placed on compliance with sanctions legislation in recent years. Below are brief case studies of the international sanctions breaches and the penalties imposed for non-compliance.
Case study 1: Standard Chartered Bank – 2019
In April 2019, the London-based Standard Chartered Bank (SCB) has been ordered to pay $1.1bn by the US and UK authorities to settle allegations of poor money-laundering controls and for significant violations of US sanctions laws and regulations.
Case study 2: British Arab Commercial Bank Plc – 2019
In September 2019, a London-based British Arab Commercial Bank plc (BACB), a commercial bank with no offices, business or presence under U.S jurisdiction, entered into $4,000,000 settlement agreement with OFAC for processing 72 apparent violations of the US Sudanese Sanctions Regulations totalling $190,700,000.
Case study 3: Telia Carrier UK Limited - 2019
In September 2019, OFSI issued a penalty notice of £146,341 to Telia Carrier UK Limited (Telia) for breaches of EU Syria sanctions regime, implemented in UK by the Syria (European Union Financial Sanctions) Regulations 2012. Telia had indirectly facilitated international telephone calls to SyriaTel, an entity designated under the above regime. This resulted in the company repeatedly making funds and economic resources indirectly available to the designated entity over an extended period of time.
Case study 4: Travelex (UK) Ltd - 2019
In March 2019, the OFSI issued a monetary penalty against Travelex (UK) for a contravention of the EU Egypt financial sanctions regime.
Case study 5: Raphaels Bank - 2019
In January 2019, the OFSI issued a monetary penalty against Raphaels Bank for a contravention of regulation 3 of the Egypt (Asset-Freezing) Regulations 2011.
Case study 6: UniCredit Bank AG -2019
UniCredit Bank AG, a financial institution headquartered in München, Germany and a subsidiary of the UniCredit Group, has agreed with OFAC to a settlement amount of $553,380,759 to settle its potential civil liability for 2,158 apparent violations of primarily the US Weapons of Mass Destruction Proliferators Sanctions Regulations.
Case study 7: Zhongxing Telecommunications Equipment Corporation -2019
Zhongxing Telecommunications Equipment Corporation, a telecommunications corporation established in the People’s Republic of China, and its subsidiaries and affiliates, as well as ZTE Kangxun Telecommunications Ltd. and its subsidiaries and affiliates (ZTE) have agreed to settle their potential civil liability for 251 apparent violations of the Iranian sanctions regime in the amount of $100,871,266.
Case study 8: Royal Bank of Scotland Group -2016
In August 2010, the Financial Services Authority (FSA) has fined members of the Royal Bank of Scotland Group (RBSG) £5.6m for failing to have adequate systems and controls in place to prevent breaches of UK financial sanctions. RBSG failed to adequately screen their customers and payments against the Consolidated List.
Case study 9: Barclays Plc -2016
In 2016, Barclays Bank Plc (Barclays), a financial institution headquartered in London, has agreed to remit $2,485,890 to settle with OFAC regarding its potential civil liability for 159 apparent violations of the US Zimbabwe sanctions regime, failing to identify beneficial owners of their customers.
Case study 10: BNP Paribas -2014
In June 2014, BNP Paribas (BNP), a French bank, agreed to enter a guilty plea to conspiring to evade sanctions by processing billions of dollars of transactions through the U.S. financial system on behalf of Sudanese, Iranian, and Cuban entities subject to U.S. economic sanctions. BNP agreed to pay a settlement of $8.9 bn imposed by U.S. authorities.
Current updates on OFSI actions to enforce financial sanctions could be found on gov.uk website.