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:
- Atradius did not make a voluntary self disclosure of the sanctions violations,
- The total determined penalty amount for its violations was close to $600K,
- 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,
- 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),
- 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,
- Following, however, were considered as the mitigating factors:
- ATCI has not received a penalty notice or Finding of
Violation from OFAC in the five years preceding the violations. - ATCI voluntarily conducted a full internal review, provided documents to OFAC during investigation, and took voluntary remedial action to address the cause of violations.
- ATCI has not received a penalty notice or Finding of
- 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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