Swiss Company Agrees to $8 Million Settlement for Terrorism-Related Sanctions Violations

OFAC said SITA provides “commercial telecommunications network and information technology services” to its members, which include “industry operators worldwide.” The agency began investigating SITA after it learned that Mahan Air, Syrian Arab Airlines and Caspian Air -- all sanctioned by OFAC -- were SITA “member-owners,” meaning they may have received SITA goods, services or technology. During its investigation, OFAC said it found that SITA has also provided services to other sanctioned airlines, including Meraj Air and Al-Naser Airlines.

SITA provided the airlines with a variety of goods and services, including “Type B messaging services” (TBM), which allows users to communicate with others in the industry to order aircraft maintenance, refuel planes, change routes, facilitate baggage transfers and book passengers, OFAC said. All of SITA’s violations involving the TBM network were routed through the organization’s “megaswitches” in Atlanta and Singapore. SITA also provided the airlines with Maestro DCS Local software, which allows users of a “common terminal” to manage certain processes, such as check-in and baggage management, OFAC said. The software is U.S.-origin.

SITA knew it was providing services to sanctioned airlines and “implemented periodic measures to comply” with U.S. sanctions, OFAC said, but did not comply completely. The company said it did “not maintain a comprehensive and detailed compliance program” to address U.S. sanctions and described its program as “primarily reactive, in that it would address compliance concerns as they arose,” the notice said. In one instance, after OFAC sanctioned Mahan Air, SITA terminated its trafficking, airfare, e-commerce and other services with the airline, but “continued to provide TBM, Maestro and WorldTracer,” a global lost baggage tracing and matching system that is hosted on SITA’s U.S. servers.

OFAC said SITA’s violations constituted a non-egregious case, and said mitigating factors included the fact that SITA had not committed a violation in the previous five years and the transactions that led to the violations represented a “small percentage” of the organization’s business. OFAC also said SITA introduced “extensive remedial efforts” to its compliance program and cooperated with OFAC’s investigation.

Aggravating factors included the fact that SITA had “actual knowledge” it was providing services and software directly to sanctioned airlines, the organization “harmed the foreign policy objectives” of the U.S.’s global terrorism sanctions regime and the fact that SITA is a “commercially sophisticated entity.”

As part of the settlement agreement, SITA agreed to establish a “global trade board to expressly monitor” compliance risks and a “trade compliance committee” to act as an “advisory body” for sanctions law matters. The organization also appointed a “global head of ethics and compliance”; introduced new sanctions legal compliance reviews when onboarding new customers; updated its compliance policies; agreed to monitor and audit its messaging, Maestro and WorldTrace systems; and required all new employees to attend sanctions compliance training.

OFAC said the settlement agreement highlighted the benefits of thorough compliance programs for companies operating in the aviation industry. “Companies engaging in international transactions more broadly should take note of, and respond accordingly to, sanctions-related warning signs,” OFAC said.