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Top Story Compliance Related


Iranian airline suppliers designated

OFAC has announced its designation of UAE-based Parthia Cargo and Delta Parts Supply FZC for their material support of Iranian airline Mahan Air. OFAC is also designating UAE-based Iranian national Amin Mahdavi for owning or controlling Parthia Cargo. Together, these companies have provided key parts and logistics services for Mahan Air, which is designated under counterterrorism authorities for support to Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), as well as under a counter proliferation authority that targets weapons of mass destruction proliferators and their supporters.

For identification information on the companies and individual designated by OFAC, see BankersOnline's OFAC Update.


FinCEN statement on BSA enforcement

On August 14, we reported on a joint statement from the federal banking regulatory agencies on Enforcement of Bank Secrecy Act/Anti-Money Laundering Requirements. In their announcements of the joint statement, the agencies reported that FinCEN had issued a Statement on Enforcement of the Bank Secrecy Act. FinCEN released its statement yesterday (August 18).

FinCEN's Statement on Enforcement of the Bank Secrecy Act was issued to provide clarity and transparency to FinCEN's approach when considering compliance or enforcement actions against covered financial institutions that violate the BSA. The statement outlines the administrative actions available to FinCEN, and provides an overview of the information FinCEN analyzes in order to determine the appropriate outcome to violations of the BSA.

In its announcement, FinCEN encouraged financial institutions to voluntarily and promptly report violations, and to candidly and completely cooperate with any investigation.


OFAC sanctions Ugandan adoption scammers

The Treasury Department reports that OFAC has sanctioned four Ugandans -- Ugandan judges Moses Mukiibi and Wilson Musalu Musene, Ugandan lawyer Dorah Mirembe, and Mirembe’s husband, Patrick Ecobu -- under authority of Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act, for their involvement in an adoption scam that saw many Uganda-born children and their parents victimized by the participants in the scheme.

As a result of OFAC's action, all property and interests in property of the individuals named above, and of any entities that are owned, directly or indirectly, 50 percent or more by them, individually, or with other blocked persons, that are in the United States or in the possession or control of U.S. persons, are blocked and must be reported to OFAC. For identification information on the four designated Ugandan nationals, see our BankersOnline OFAC Update.


Federal Reserve updates fingerprinting process for applications

The Federal Reserve Board's Supervision and Regulation Letter SR 20-20, issued Friday, describes its new process to facilitate the electronic collection and transmission of fingerprints to the Federal Bureau of Investigation in connection with background investigations for applications involving changes to the ownership and/or composition of the board of directors or executive management of supervised financial institutions.

The Federal Reserve will continue to request from other regulatory and investigative agencies background information about an individual or company involved in applications through the name check process. Since 2003, the Federal Reserve's background investigation process has included an FBI criminal history check through the submission of fingerprints. The Federal Reserve recently started using a third-party vendor to facilitate the electronic collection and transmission of fingerprints to the FBI. Electronic fingerprinting is a more efficient collection method than the previous card and ink process. Benefits associated with the new process include faster fingerprint processing time, cost savings, and reduced staff burden. In addition, applicants will benefit from a significantly increased number of fingerprint collection sites, and improved scheduling flexibility.


Joint statement on BSA/AML enforcement

The federal banking agencies have issued a Joint Statement on Enforcement of Banks Secrecy Act/Anti-Money Laundering Requirements updating their existing enforcement guidance to enhance transparency regarding how they evaluate enforcement actions that are required by statute when financial institutions fail to meet Bank Secrecy Act/anti-money laundering (BSA/AML) obligations.

The statement clarifies that isolated or technical violations or deficiencies are generally not considered the kinds of problems that would result in an enforcement action. It also addresses how the agencies evaluate violations of individual components (known as pillars) of the BSA/AML compliance program. It also describes how the agencies incorporate the customer due diligence regulations and recordkeeping requirements issued by the U.S. Department of the Treasury as part of the internal controls pillar of the financial institution's BSA/AML compliance program.



Fed issues Outstanding CRA rating

Our review of the Federal Reserve Board's Community Reinvestment Act Evaluations and Ratings Search page has revealed that the Federal Reserve Banks made public their ratings of five CRA evaluations in July. Four of the evaluations were rated "Satisfactory." Congratulations to Banco Popular de Puerto Rico, San Juan, on its "Outstanding" rating!


Individual settles potential OFAC liability

OFAC has announced a $5,000 settlement agreement with a U.S. individual who, at the time of the apparent violations was a civilian direct hire of the U.S. Army and stationed at the U.S. embassy in Bogota, and has agreed to settle their potential civil liability for 24 apparent violations of the Foreign Narcotics Kingpin Sanctions Regulations, 31 C.F.R. part 598. Between approximately October 2015 and August 2016, the individual engaged in at least 24 transactions valued at $3,349 that dealt in the blocked property interests of a foreign individual who at the time was a specially designated narcotics trafficker in apparent violation of the Kingpin Sanctions. OFAC determined that the person did not voluntarily disclose the apparent violations, and that the apparent violations constitute an egregious case.


New OFAC Sudan Program and Darfur guidance

OFAC has posted a notice it has published a new Sudan Program and Darfur Sanctions Guidance document and a new FAQ and removed eleven Sudan-related FAQs. OFAC has also amended FAQs pertaining to the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA) as it applies to Sudan and five general and compliance FAQs to reflect that Sudan has not been a comprehensively sanctioned country since October 12, 2017.


Interactive Brokers to pay $38M for BSA/AML lapses

The SEC has announced that Interactive Brokers LLC will pay an $11.5 million penalty to settle charges it repeatedly failed to file Suspicious Activity Reports (SARs) for U.S. microcap securities trades it executed on behalf of its customers. In parallel actions, the Financial Industry Regulatory Authority (FINRA) and the Commodity Futures Trading Commission (CFTC) also announced settlements with Interactive Brokers related to anti-money laundering failures in which the registered broker-dealer agreed to pay penalties of $15 million and $11.5 million, respectively, for a total of $38 million in penalties paid to the three agencies.

For additional information, see Interactive Brokers LLC paying $38M for BSA/AML failures, in the BankersOnline Penalties pages.


OCC CRA evaluation ratings released

The OCC has released a list of 30 Community Reinvestment Act (CRA) performance evaluations that became public in July. The possible ratings are outstanding, satisfactory, needs to improve, and substantial noncompliance. Of the evaluations listed, 21 are rated satisfactory.

We congratulate these nine institutions, which were rated outstanding:


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