AMEX bank settles for Kingpin sanctions breaches
The US Treasury Department’s Office of Foreign Assets Control (‘OFAC’) says it has reached a settlement agreement with the American Express National Bank (‘Amex’), a subsidiary of American Express Company under which Amex agrees ‘to remit $430,500 to settle its potential civil liability for 214 apparent violations of OFAC’s Kingpin sanctions.’
In brief, OFAC says that over the course of two months, ‘Amex processed transactions for an account whose supplemental card holder was designated in connection with illegal drug distribution and money laundering. A combination of human error and sanctions compliance program deficiencies enabled the account to engage in $155,189.42 worth of transactions.’
In a web notice, it explains that:
‘On November 16, 2012, Walter Alexander Del Nogal Marquez (“Marquez”) applied for and obtained a supplemental American Express Centurion Card on an account maintained by a U.S. person at Amex. On May 7, 2018, OFAC designated Marquez pursuant to the Foreign Narcotics Kingpin Sanctions Regulations (FNKSR), 31 C.F.R. Part 598, and added him to OFAC’s List of Specially Designated Nationals and Blocked Persons (the “SDN List”).
‘A few days after OFAC designated Marquez, Amex’s internal sanctions list screening system generated a “high confidence” alert, which was erroneously closed by an operations analyst responsible for conducting the initial review of the alert despite a match against multiple data elements (name, date of birth, and Venezuelan National ID number) and an internal procedural requirement for a second-level review for all high-confidence alerts. On June 26, 2018, an analyst investigating an anti-money laundering (“AML”) media alert identified and escalated Marquez’s connection to the account. The next day, June 27, 2018, instructions were given to suspend immediately charge privileges on all cards linked to the U.S. person’s account, including Marquez’s supplemental card. However, the employee who entered the suspension code into the system did not include comments indicating that the restriction was sanctions related. Accordingly, when the U.S. person accountholder called the following day, on June 28, 2018, to inquire about the account status, a customer care professional removed the suspension. The AML team caught the error the following day and directed the account to be resuspended. However, the team that carried out this task mistakenly applied the incorrect suspension code, which allowed the account to conduct seven additional transactions after the suspension was lifted on June 28, 2018, before the account was closed on July 6, 2018.’
https://home.treasury.gov/system/files/126/20220715_amex.pdf
