OFAC Fines Puerto Rican Bank for Venezuela Sanctions Violations
The Office of Foreign Assets Control fined Puerto Rican bank Banco Popular de Puerto Rico (BPPR) about $255,000 for violating U.S. sanctions against Venezuela. BPPR processed 337 transactions on behalf of two government employees of Venezuela, totaling $853,126, OFAC said May 27.
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In 2019, BPPR began a review of accounts that might be affected by sanctions against Venezuela. It wasn't until October 2020 that BPPR identified the accounts linked with the two Venezuelan government employees and blocked the accounts. The delay in identifying these customers resulted in 337 apparent violations of the sanctions.
OFAC said BPPR’s apparent violations were non-egregious and voluntarily self-disclosed. The agency pointed to several mitigating factors, including the bank's remedial action in response to the violations, including enhancing its compliance program and creating sanctions procedures and guidance. The bank also closely cooperated with OFAC's investigation and had not received a penalty notice in the previous five years.
OFAC also pointed to several aggravating factors, including that the bank had "documentation indicating that two of its customers were low level employees" of the Venezuelan government, yet still failed to identify those customers for 14 months. OFAC also said the bank is "mid-sized" with more than $61 billion in assets.
The agency said the penalty highlights the importance of conducting due diligence on direct customers, including their ownership structure. Companies should especially conduct due diligence whenever new sanctions authorities and actions are announced, OFAC said.