International Regulatory Enforcement (PHIRE)
Sanctions Compliance Shortfalls Result in $1B Global Enforcement Action
By Kwame Manley, Scott Flicker, Lawrence Kaplan & Jeremy Steed
On April 9, 2019, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), U.S. Department of Justice (“DOJ”), the New York Department of Financial Service (“NYDFS”), the New York County District Attorney’s Office, the Board of Governors of the Federal Reserve System, and the Financial Conduct Authority (“FCA”) in the U.K. announced separate settlements with Standard Chartered Bank (“SCB”), a U.K. multinational bank, resulting in an aggregate of over US$1 billion in fines to resolve potential liability arising from transactions that were processed to or through the United States in violation of Iran, Cuba, Sudan, Syria, and Burma sanctions. This global enforcement action and major settlement targeting alleged violations of U.S. sanctions by a non-U.S. financial institution is the latest example of the increasing cooperation among enforcement authorities in and outside the United States focusing on alleged financial crimes by multinational corporations.
Companies should be prepared to manage simultaneous complex internal investigations in various jurisdictions.
Companies should examine their compliance programs against FinCEN’s “five pillars” of an effective compliance program.
Companies should instruct senior management to take immediate action to address any red flags in sanctioned jurisdictions.