Financial Crime World

Puerto Rico Bank Settles Alleged Violations of Venezuelan Sanctions Regulations for $256,000

Introduction

The Office of Foreign Assets Control (OFAC) has announced that Banco Popular de Puerto Rico (BPPR), a leading financial institution in Puerto Rico and the Virgin Islands, will pay approximately $256,000 to resolve apparent violations of Venezuela Sanctions Regulations.

Background

Between 2019 and 2020, BPPR processed 337 transactions totaling $853,126 on behalf of two low-level employees of the Government of Venezuela. The alleged violations took place during a 14-month period following the issuance of Executive Order 13884 in August 2019, which prohibited transactions with any political subdivision, agency, or instrumentality of the Government of Venezuela and individuals who were owned or controlled by the government or acted on its behalf.

Compliance Issues

BPPR’s compliance team identified four personal accounts associated with two restricted customers in October 2020. However, neither account holder met the criteria for a general license issued by OFAC in November 2019, which authorized certain transactions related to Government of Venezuela individuals.

Resolution

The bank discovered the alleged violations and reported them to OFAC in a timely and organized manner. In addition, BPPR enhanced its compliance program to include:

  • Updated sanctions-related training and procedures
  • Additional resources and guidance for sanctions alert reviews and dispositions

Importance of Compliance

OFAC emphasized that this case highlights the importance of conducting timely due diligence following the imposition of new sanctions and urged financial institutions to take steps outlined in FAQ 680 to better comply with Venezuela-related sanctions regulations.

Key Takeaways

  • Financial institutions must conduct thorough due diligence on transactions involving individuals or entities related to restricted countries
  • Regular training and updates are essential for maintaining effective sanctions compliance programs
  • Timely reporting of alleged violations is crucial for resolving matters quickly and minimizing penalties

Conclusion

BPPR’s settlement serves as a reminder of the importance of compliance with Venezuela Sanctions Regulations. Financial institutions must remain vigilant in their efforts to prevent violations and ensure that their sanctions compliance programs are robust and effective.