OFAC Issues "FoV" to Puerto Rico Bank for Violating Venezuela Sanctions Regulations

OFAC issued a Finding of Violation ("FoV") to a Puerto Rico-based international bank for violating Venezuela Sanctions Regulations, 31 CFR Part 591 and OFAC Reporting Regulations, 31 CFR Part 501.

According to an enforcement release, OFAC said that the bank failed to obtain a license for dealing in a blocked account involving an OFAC-designated individual's securities holdings, despite assuring authorities that it would obtain the proper licensing. OFAC stated that the bank severed ties with the account holder and blocked its accounts after the individual was placed on the OFAC SDN List. The bank also liquidated the individual's securities and placed the proceeds into a blocked account, actions which required an OFAC-issued license. Separately, OFAC found that due to human error, a debit transaction was processed in the account after it was blocked.

OFAC determined that the bank filed inconsistent Annual Reports of Blocked Property. Specifically, a report from 2018 did not include the blocked credit card account, but the account was included in the bank's ARBP the following year. During its investigation, OFAC discovered that the bank did not maintain records and communications involving the blocked account because its internal systems did not effectively retain such records.

OFAC concluded that in lieu of a monetary penalty, issuance of an FoV was more appropriate because the bank self-disclosed the violations and took multiple steps to remediate the issue prior to OFAC intervention.