NYDFS/OFAC issue finding of violation to bank for Sudan sanctions breaches
The US Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’) says it has issued a finding of violation (‘FOV’) to Mashreqbank PSC, the oldest private bank in the United Arab Emirates, for ‘violations of the now-repealed Sudanese Sanctions Regulations (SSR), as part of a global settlement between Mashreqbank psc (Mashreqbank), the New York State Department of Financial Services (DFS), and the Federal Reserve Board of Governors (FRB).’
OFAC explained that ‘Mashreq London processed payments through U.S. financial institutions that related to U.S. dollar (USD) transfers from accounts of Sudanese banks held outside the United States. Under then-applicable Society for Worldwide Interbank Financial Telecommunications (SWIFT) protocols, general banking practice, and its own standard procedures, Mashreq did not populate optional field 52 (originating institution) in the MT202 payment messages, such that the Sudanese institution that originated the offshore payment was not identified.
‘Moreover, mandatory field 58 (beneficiary bank) in the MT202 payment message specified the non-Sudanese beneficiary bank in the transaction. Because the payment messages sent to the U.S. financial institutions did not include the originating Sudanese bank, Mashreq’s U.S. correspondents could not interdict the payments, and the payments were successfully processed through the U.S. financial system. Mashreq’s processing of these payments for or on behalf of Sudanese financial institutions constitutes a prohibited export of services from the United States to Sudan.’
It said that that it determined the appropriate administrative action to be an FOV ‘in lieu of a civil monetary penalty in part because Mashreqbank voluntarily entered into a retroactive statute of limitations waiver agreement, without which OFAC would have been time-barred from charging the violations.’
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20211109
