American Express subsidiary pays $430,500 to resolve potential civil liability for apparent sanctions violations

The Office of Foreign Assets Control of the US Department of the Treasury has announced a settlement with American Express National Bank (Amex), resolving the company’s potential civil liability for 214 apparent violations of the Foreign Narcotics Kingpin Sanctions regulations.  

The Enforcement Release, issued on July 15, 2022, provides details of the apparent violations.  In late 2012, an individual named Walter Alexander Del Nogal Marquez obtained an American Express card on an Amex account maintained by a US person.  Del Nogal Marquez was designated by OFAC five and a half years later, in May 2018.  Shortly thereafter, Amex’ sanctions screening system flagged the account, but the alert was manually closed by an operations analyst.

In June 2018, a different analyst discovered the connection between the account and Del Nogal Marquez, and suspended charge privileges on all linked accounts.  However, privileges were reinstated the following day at the behest of the US account holder because the suspension was not listed as sanctions-related.  Additional employee errors allowed seven subsequent transactions before the account was closed on July 6, 2018.  In total, 214 transactions totaling $155,189.42 were processed for the account between the listing of Del Nogal Marquez by OFAC and closure of the account.

In assessing the penalty, OFAC took into consideration Amex’ failure to voluntarily self-disclose the apparent violations, and viewed as aggravating factors the size, global presence and sophistication of Amex as a financial institution, and the economic benefit conferred by the company’s errors on a person designated pursuant to OFAC’s Kingpin sanctions.  At the same time, OFAC took into consideration mitigating factors such as the company’s cooperation with the investigation, and the remedial measures taken by Amex following discovery of the apparent violations.  These include:
The Office of Foreign Assets Control of the US Department of the Treasury has announced a settlement with American Express National Bank (Amex), resolving the company’s potential civil liability for 214 apparent violations of the Foreign Narcotics Kingpin Sanctions regulations.  

The Enforcement Release, issued on July 15, 2022, provides details of the apparent violations.  In late 2012, an individual named Walter Alexander Del Nogal Marquez obtained an American Express card on an Amex account maintained by a US person.  Del Nogal Marquez was designated by OFAC five and a half years later, in May 2018.  Shortly thereafter, Amex’ sanctions screening system flagged the account, but the alert was manually closed by an operations analyst.

In June 2018, a different analyst discovered the connection between the account and Del Nogal Marquez, and suspended charge privileges on all linked accounts.  However, privileges were reinstated the following day at the behest of the US account holder because the suspension was not listed as sanctions-related.  Additional employee errors allowed seven subsequent transactions before the account was closed on July 6, 2018.  In total, 214 transactions totaling $155,189.42 were processed for the account between the listing of Del Nogal Marquez by OFAC and closure of the account.

In assessing the penalty, OFAC took into consideration Amex’ failure to voluntarily self-disclose the apparent violations, and viewed as aggravating factors the size, global presence and sophistication of Amex as a financial institution, and the economic benefit conferred by the company’s errors on a person designated pursuant to OFAC’s Kingpin sanctions.  At the same time, OFAC took into consideration mitigating factors such as the company’s cooperation with the investigation, and the remedial measures taken by Amex following discovery of the apparent violations.  These include:
  • Implementing a centralized card account suspension process;
  • Increasing training of personnel and concentrating sanctions screening and review responsibilities in a centralized team;
  • Mandating second level review and notification for high confidence sanctions alerts, and;
  • Ensuring that sanctions referral flags attach to suspect accounts identified by Amex’ anti-money laundering case management system.

In light of these factors, OFAC noted that the settlement amount of $430,500 is significantly less than the base civil monetary penalty applicable in the matter:  $574,000.  In concluding the Enforcement Release, OFAC emphasized the importance of proper sanctions compliance training for employees. 

In light of these factors, OFAC noted that the settlement amount of $430,500 is significantly less than the base civil monetary penalty applicable in the matter:  $574,000.  In concluding the Enforcement Release, OFAC emphasized the importance of proper sanctions compliance training for employees.

Enforcement Release 

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