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In a settlement with the Treasury Department's Office of Foreign Assets Control (OFAC), Banco Popular de Puerto Rico (BPPR) agreed to pay more than $255,000 to resolve its civil liability for 337 transactions processed in violation of US sanctions.
According to OFAC's enforcement release published Friday, BPPR, a midsized Puerto Rican bank with more than $61 billion in assets and branches in Puerto Rico and the Virgin Islands, was accused of failing to block the accounts of two low-level Venezuelan government employees for 14 months after the US imposed sanctions against the country's government.
From November 2019 to October 2020, the bank processed 337 transactions totaling $853,126 in four bank accounts that were in violation of Executive Order 13884, according to OFAC.
The apparent violations were voluntarily self-disclosed and were not egregious, according to the regulator.
In August 2019, then-President Donald Trump signed Executive Order 13884, which blocked the government of Venezuela's property and interests in property. The restrictions applied to "any person owned or controlled by the government of Venezuela, directly or indirectly," as well as "any person who has acted or purported to act directly or indirectly for or on behalf of" any such entity. In November 2019, the order was incorporated into revised US sanctions against Venezuela.
BPPR began planning its approach to complying with the sanctions shortly after they were issued, according to OFAC, but despite having paperwork indicating that two of its customers were low-level government employees, the bank failed to identify and block the four accounts until October 2020, despite having paperwork indicating that two of its customers were low-level government employees.
According to OFAC, one of the BPPR customers worked in the government of Venezuela's Diplomatic Representation Office as a clerical level employee, while the other worked as a customer service representative for state-owned entity Compaa Anónima Nacional Teléfonos de Venezuela. Despite the fact that they were all low-level government employees, they did not meet the criteria set by OFAC for individuals who were exempt from the sanctions, which included former and current Venezuelan government employees and contractors who provided "health or education services" in the country.
Banks must conduct timely due diligence on their own direct customers to ensure that they are not persons whose property or interests in property are blocked by US sanctions, according to OFAC.
According to the enforcement release, BPPR improved its program to comply with US sanctions by "creating more robust sanctions-related procedures and develop[ing] additional resources and guidance in connection to sanctions alert review and disposition," improving bank employee screening training, and hiring more staff to handle sanctions compliance.
BPPR declined to comment further.
By fLEXI tEAM