Think Sanctions Are Just for Banks?
Treasury Fine Proves Otherwise
U.S. Department of the Treasury fined a global logistics company yesterday.
Key Logistics, based in DE, voluntarily disclosed its violations to the Treasury and still received a fine of $608,825. Because Key Logistics acted in good faith, they saved themselves from a maximum penalty of over $4MM. 💵
This is a stark reminder that all U.S. Persons (and Businesses) are responsible to comply with OFAC. Moreover, the banks and credit unions that service all U.S. Persons (and Businesses) are also required to comply with OFAC. If you're an FI and your customer is violating #sanctions through your institutions, your institution is violating sanctions as well! ⚠️
The Treasury's report highlights a few things that are important.
1) Conduct due diligence. Because Key Holding U.S. did its due diligence before acquiring Key Columbia, it quickly identified U.S. sanctions violations. Key Holding U.S. swiftly moved to self-identify the violations and remediated this issue. 🛑
2) Due diligence goes beyond simply asking questions about policies and procedures. Because Key Holding U.S. looked at the practices and transactions, these violations were identified. 🔍
3) Training has to be a part of the everyday processes in your organization. It doesn't matter if you are a bank or a company dealing in global transactions and customers. You need to be aware of what sanctions are and how to find violations and respond appropriately. 👨🏫
4) If you do find yourself in hot water with OFAC, it's best to be responsive and cooperative. 🤝
The full report, attached, includes aggravating and mitigating factors which resulted in the lowered penalty. Being aware that sanctions extend to people, companies, vessels, and countries is a good practice. Make sure you have strong OFAC screening and tools in place. 🏋♂️ And, remember that it isn't just banks and credit unions that will end up with fines and penalties. Everyday businesses can find themselves with legal implications. 🚨
I've highlighted some key points as takeaways! 🔦