June 7, 2019

Western Union settles potential sanctions liability with OFAC

On June 7, 2019, the Office of Foreign Assets Control of the US Department of the Treasury announced a $401,697 settlement with Western Union Financial Services, Inc., resolving Western Union’s potential civil liability for nearly 5,000 apparent violations of the Global Terrorism Sanctions Regulations, 31 CFR part 594.  According to OFAC, the transactions took place between December 2010 and March 2015, and involved payments to non-designated persons who collected the money at a sub-agent of Western Union in the Gambia, the Kairaba Shopping Center, that was designated in December 2010.  OFAC alleges that Western Union did not screen location data for sanctions-related issues as part of its master agents screening structure, only became aware that Kairaba was a potential sub-agent in February 2015, and mistakenly believed that Kairaba operated from only one, inactive, location.

OFAC found that, had Western Union exercised reasonable due diligence, it would have had reason to know that its sub-agent Kairaba was on the SDN list, and that the company acted with reckless disregard for US sanctions requirements by failing to identify both Kairaba locations and deactivate their access to Western Union’s networks immediately.  OFAC noted, however, that several mitigating factors came into play, including the company’s five-year record without any penalty notices or violations, Western Union’s largely effective global sanctions policy, its voluntary self-disclosure and remediation, and its implementation of a corrective action plan once the company had identified a gap in its internal controls related to sub-agent due diligence and screening.  The penalty imposed was lower than the base civil monetary penalty amount of $637,614 for the apparent violations.

OFAC press release | OFAC Enforcement Information