October 10, 2022

OFAC enters into settlement with Monaco investment bank

On September 26, 2022, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $401,039 settlement with CFM Indosuez Wealth, resolving the company’s potential civil liability for apparent violations of US sanctions programs relating to Cuba, Iran, and Syria.  The apparent violations took place between December 2011 and July 2016, and related to transactions on behalf of 11 customers in sanctioned jurisdictions, consisting of:

  • 410 transactions involving the purchase, though US broker-dealers and other US persons, of securities issued by US companies, with a total value of $966,491;
  • 16 transactions through US banking correspondents for the same customers, amounting to $267,476.

OFAC found that CFM’s ultimate parent company, a major Swiss financial institution, required that CFM adhere to the parent company’s global sanctions compliance instructions, but CFM did not fully implement the program for the period during which the apparent violations occurred.  In particular, CFM failed to restrict fully USD-cleared payments concerning the 11 accounts in sanctioned jurisdictions, allowing securities-related payments to be credited to those accounts.

In assessing a the penalty amount of $401,039, OFAC viewed as aggravating factors the approximately $1,233,967 in economic benefit apparently conferred upon persons in Cuba, Iran, and Syria, and the fact that CFM had reason to know that it was processing transactions through the US financial system for customers in sanctioned jurisdictions.  At the same time, OFAC deemed as mitigating factors CFM’s clean record of recent sanctions violations, the company’s voluntary disclosure and substantial cooperation during the investigation, and extensive remedial measures undertaken since discovery of the apparent violations.  These measures include the adoption of CFM’s parent company’s customer database screening procedures, the implementation of new screening tools updated against OFAC’s List of Specially Designated Nationals and Blocked Persons, and adherence to CFM’s parent company’s updated instructions for validation of transactions involving clients located in sanctioned jurisdictions.

Enforcement release (CFM)