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The violation of OFAC Sanctions cost $345K to Atradius Trade Credit Insurance, Inc. over for two apparent violations of the Foreign Narcotics Kingpin Sanctions Regulations. Here are the background and some highlights of this enforcement action:

  1. Atradius did not make a voluntary self disclosure of the sanctions violations,
  2. The total determined penalty amount for its violations was close to $600K,
  3. Although OFAC designated Grupo Wisa, S.A. and the Soho Mall Panama pursuant to the Foreign Narcotics Kingpin Designation Act and added the entities to the SDN List on May 2016, a U.S. based cosmetics company assigned to ATCI the right to collect on a $5.7M debt owed by Grupo Wisa. ATCI then filed a claim in Panama as a creditor in the liquidation of Grupo Wisa and received a payment of over $4M from the liquidation of their assets,
  4. Determination: By accepting the assignment of the Grupo Wisa debt, and by receiving the payment from the Grupo Wisa liquidation, ATCI dealt with a specially designated narcotics trafficker in violation of 31 C.F.R. § 598.203(a),
  5. OFAC considered the following as aggravating factors:
    • ATCI did not have any analysis or request confirmation from OFAC that assignment of such debt and acceptance of payment from the Soho Mall Trust was permissible,
    • ATCI is a subsidiary of a major global trade credit insurance and collections organization,
  6. Following, however, were considered as the mitigating factors:
    1. ATCI has not received a penalty notice or Finding of
      Violation from OFAC in the five years preceding the violations.
    2. ATCI voluntarily conducted a full internal review, provided documents to OFAC during investigation, and took voluntary remedial action to address the cause of violations.
  7. This enforcement activity one more time emphasizes that companies and organizations should not pursue transactions related to SDN’s debt before obtaining a specific license from the OFAC.

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