OFAC settles apparent Foreign Narcotics Kingpin Sanctions violations with Maryland trade credit and collections company

On August 16, 2019, the Office of Foreign Assets Control of the US Department of the Treasury announced a settlement with Atradius Trade Credit Insurance, Inc., resolving the company’s potential civil liability for apparent violations of the Foreign Narcotics Kingpin Sanctions Regulations, 31 CFR Part 598.  According to OFAC, In October 2016, Atradius collected on a $5.7 million debt assigned to it by a US cosmetics company.  The debtor, Grupo Wisa, S.A., had been designated five months earlier by OFAC pursuant to the Foreign Narcotics Kingpin Designation Act.  OFAC indicated that by accepting assignment of the Grupo Wisa debt and receiving payment from the Grupo Wisa liquidation assets, Atradius appears to have dealt in the property of a specially designated narcotics trafficker, in violation of 31 CFR § 598.203(a).

In determining the settlement amount of $345,315, OFAC considered as aggravating factors Atradius’ failure to make a voluntary self-disclosure of the apparent violations, its failure to seek confirmation from OFAC that assignment of the SDN’s debt was permissible, and Atradius’ status as a subsidiary of a sophisticated global trade credit and collections conglomerate, Atradius N.V.  OFAC also took into consideration several mitigating factors, such as the company’s clean record for the five years preceding the subject transactions, and its willingness to conduct a comprehensive internal review, take voluntary remedial action, and provide documents to OFAC during the investigation. 

OFAC pointed out in its announcement of the settlement, that the enforcement action against Atradius highlights the importance of obtaining a specific license before engaging in otherwise unauthorized activity involving an SDN’s debt.

OFAC Enforcement Information