OFAC fined Banco Popular de Puerto Rico (BPPR) $256K for violating the Venezuela Sanctions Regulations. The bank processed 337 transactions totaling $853K on behalf of two individuals who were low-level employees of the Government of Venezuela. One was a clerk in Venezuela’s diplomatic offices. The other was a customer service rep in Venezuela’s state-owned telecom company. BPPR identified and blocked the accounts of these individuals 14 months after the sanctions came into effect.
Why does this matter? It’s not enough to merely scan names against the sanction lists, as the names of employees of sanctioned governments or companies may not be listed. Rather, as the court noted, “financial institutions must conduct due diligence on their own direct customers (including, for example, their ownership structure) to confirm that those customers are not persons whose property and interests in property are blocked.”