The Office of Foreign Assets Control of the US Department of the Treasury (OFAC) has entered into a settlement with CA Indosuez (Switzerland) S.A. (“CAIS”), an indirect subsidiary of a major Swiss investment bank, resolving CAIS’ potential civil liability for apparent violations of five US sanctions programs.
CAIS is based in Switzerland, and provides wealth management and corporate and investment banking services to clients all over the world. OFAC determined that between April 2013 and April 2016, CAIS served 17 clients in Iran, Syria, Sudan, Crimea, and Cuba, facilitating the purchase of securities issued by US companies in 240 transactions executed by US broker-dealers and other US persons. These transactions totaled $2,050,780, and constituted apparent violations of the US sanctions regimes applicable to the customers’ jurisdictions. Additionally, CAIS facilitated the conduct of 33 transactions totaling $1,025,400 for these customers through US banking correspondents, also in apparent violation of US sanctions.
OFAC observed that CAIS had reason to know that the transactions involved clients in sanctioned jurisdictions because the account-holders’ know-your-customer files included addresses in those jurisdictions. During the relevant period, CAIS should have, but did not, fully implement, the global sanctions compliance program of its parent company, thereby allowing unrestricted US dollar-cleared payments for the 17 accounts with addresses in sanctioned jurisdictions. The issue was identified during a periodic compliance review. OFAC determined that CAIS had voluntarily self-disclosed the apparent violations, and that the case was non-egregious.
For the 273 transactions totaling $3,076,180, OFAC agreed to a settlement amount of $720,258, having taken into consideration aggravating factors, such as CAIS’ personnel having reason to know that they were processing transactions for residents of sanctioned jurisdictions through the US financial system, as well as mitigating factors, such as the company’s violation-free record for the five preceding years and the remedial measures since undertaken by CAIS. The measures include the implementation of new payment data quality tools from the Society for Worldwide Interbank Financial Telecommunications, the blocking of payments to individual accounts of residents in sanctioned jurisdictions, and the adoption of CAIS’ parent company’s procedures for sanctions screening. In further mitigation of its apparent violations, CAIS substantially cooperated during OFAC’s investigation.