By: Danielle Hatch
British Arab Commercial Bank plc (BACB), a commercial bank in London, has entered into a settlement agreement with the Office of Foreign Assets Control (OFAC) related to 72 violations of the Sudanese Sanctions Regulations. Between 2010 and 2014, BACB processed 72 bulk funding payments related to Sudan for a total of $190,700,000. The bank was operating USD accounts on behalf of at least seven Sudanese financial institutions and actively solicited USD business from Sudanese banks. BACB processed the transactions via internal book transfers involving a nostro account located at another foreign bank. None of these transactions were processed through the US financial system, however, the process to fund the other foreign nostro account did involve transactions processed through US financial institutions which violates OFAC’s sanctions on Sudan.
BACB did not voluntarily disclose the violations and OFAC found that this was an egregious case. The base penalty for the violations was $381,400,000, however, the United Kingdom’s Prudential Regulation Authority explained that the bank’s operating capacity would face disproportionate impact if it was required to pay the initial OFAC proposed penalty of $228,840,000. As a result, the penalty was reduced to $4,000,000 assuming BACB ceases business with any Sudanese banks/accounts. Should the bank violate the sanctions again, the original penalty will be assessed against the bank.
It should be noted that BACB has no offices, business or presence under US jurisdiction.
Full Settlement Agreement: https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20190917_bacb_settlement.pdf