Swiss bank pays $3.7m to settle US Cuba sanctions violations
The US Treasury’s Office of Foreign Assets Control (‘OFAC’) announced that a Swiss global private banking group, EFG international AG., has agreed to pay ‘$3,740,442 to settle its potential civil liability for processing 873 securities transactions in apparent violation of the Cuban Asset Control Regulations, the Kingpin Act, and Executive Order 14024.’
Regarding the Cuba transactions, OFAC said, ‘Between January 2014 and July 2018, EFG subsidiaries located in the Bahamas, Cayman Islands, Luxembourg, Monaco, and Switzerland processed 727 securities-related transactions and funds transfers totaling $29,939,701 through omnibus accounts at U.S. custodians or otherwise involving U.S. market participants, including EFG Miami, on behalf of clients who resided in Cuba or whose beneficial owners were Cuban nationals.’
It said that among the bank’s clients were ‘a Panamanian company beneficially owned by a person located in Cuba, two private investment firms domiciled in the British Virgin Islands and Panama whose ultimate beneficial owner was another Cuban national and resident, and individuals who EFG had reason to know resided in Cuba based on residency cards they provided to their respective EFG subsidiaries.’
As regards the breach of the Kingpin Act, OFAC said that, in 2009, EFG’s Singapore branch (‘EFG Singapore’) had opened an investment account for a Chinese national who, five years later, OFAC designated as a Specially Designated Narcotics Trafficking Kingpin.
According to OFAC, on learning of the designation, ‘EFG Singapore imposed an internal restriction on the account to prevent the processing of any payments to or from the client’s account and restricted trading in the account. However, for more than four years, EFG Singapore did not notify its U.S. custodian or other U.S. securities firms transacting with the omnibus account that held the client’s sub-account.’
The omission, OFAC says, ‘caused the U.S. firms to process 141 securities transactions – nearly all of which were corporate actions such as interest payments and dividend distributions associated with the designated client’s securities in the account – totalling $468,615.’
