The Office of Foreign Assets Control of the US Department of the Treasury has issued a finding of violation to State Street Bank and Trust Co. for violations of the Iranian Transactions and Sanctions Regulations (ITSR), 31 CFR part 560. According to OFAC, between 2012 and 2015 the bank processed at least 45 pension payments totaling $11,365.44 for a US citizen residing in Iran.
OFAC indicated that the bank’s sanctions screening software produced an alert on each of the pension payments going to Teheran, but the business unit overseeing the beneficiary payments used a different system to screen sanctions, and did not escalate the possible sanctions list matches to the bank’s centralized compliance unit. The bank reported the compliance program deficiency to OFAC, and modified its process to ensure that all Retiree Services payments are screened by the bank’s central platform, and that sanctions alerts are appropriately escalated.
In deciding to issue a finding of violation rather than a civil monetary penalty, OFAC took into consideration that, despite the failure of the bank’s escalation and sanctions review procedures to lead to correct decisions on the 45 occasions noted, the bank’s voluntary self-disclosure and cooperation, accurate sanctions alert system, lack of actual knowledge on the part of managers and supervisors, remedial action, and the fact that the payments may not actually have been transferred to Iran weighed in favor of leniency.