[This is the third post in a row on OFAC, which is just a coincidence. The blog is not about to be renamed OFACLawBlog.]

Last week the Department of Treasury’s Office of Foreign Assets Control (“OFAC”) announced a settlement with Colombian bank Colpatria S.A. under which Colpatria agreed to pay $91,849 to settle allegations of 26 violations of the Narcotics Trafficking Sanctions Regulations (“NTSR”). The violations occurred in 2004 and 2005 at Colpatria’s now closed Miami branch office. Although the Miami branch checked beneficial owners of accounts against the SDN list prior to opening the account, it did not do so thereafter and only checked the name of the account holders against SDN list updates. As a result, it processed transactions for an account after the beneficial owners had been designated under the NTSR.

OFAC said that the base penalty amount was $229,623. It was reduced to $91,849 because Colpatria voluntarily disclosed the violation, had no previous OFAC violations, revised its procedures for checking the SDN list, and signed a tolling agreement. Interestingly, OFAC mitigated the penalty because

Colpatria Miami revised its software configuration to review automatically the names of authorized signatories and beneficial owners of accounts rather than just the names of the account holders when performing account opening and periodic name checks against OFAC’s SDN List

This suggests that Colpatria was checking accounts at regular intervals rather than each time the SDN list was updated. This seems inconsistent with the position that OFAC took back in June in its settlement with GEICO in which it seemed to insist that companies must rescrub their customer list each time the SDN list is updated and not simply periodically.

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