Puerto Rico Bank Settles Sanctions Violations for $256,000
The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has announced a settlement with Banco Popular de Puerto Rico (BPPR), a major bank in Puerto Rico and the Virgin Islands, to resolve apparent violations of Venezuela sanctions regulations.
Overview of the Violations
BPPR processed nearly $853,000 worth of transactions on behalf of two low-level employees of the Government of Venezuela between 2019 and 2020. The violations occurred during the 14 months following the issuance of Executive Order 13884 in August 2019, which prohibited transactions with any political subdivision or instrumentality of the Venezuelan government.
Transactions Did Not Meet Criteria for General License
The transactions processed by BPPR did not meet the criteria for a general license issued by OFAC in November 2019, which authorized certain transactions related to individuals affiliated with the Venezuelan government. As a result, OFAC considered the 337 transactions processed after the executive order was issued to be apparent violations of Venezuela sanctions regulations.
Bank’s Compliance Efforts
BPPR’s compliance team began evaluating customer accounts shortly after the executive order was issued, but it wasn’t until October 2020 that they were able to identify and block four personal accounts associated with restricted customers. OFAC praised BPPR for voluntarily reporting the transactions and taking steps to enhance its compliance program, including:
- Updated training and procedures
- Additional resources and guidance
Importance of Compliance in Puerto Rico
The settlement is a reminder of the importance of complying with financial sanctions in Puerto Rico, particularly given the island’s strategic location as a hub for international trade and finance. The case serves as a warning to other financial institutions operating in Puerto Rico to be vigilant in their compliance efforts and to take prompt action when detecting potential violations.
Conclusion
The $256,000 settlement is a significant reminder of the importance of complying with financial sanctions regulations. Financial institutions operating in Puerto Rico must remain vigilant in their compliance efforts and take prompt action when detecting potential violations.