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Bank of America pays $16.6 million for violating drug trafficker sanctions

Bank of America Corp’s banking unit agreed to pay $16.6 million to resolve allegations that it processed hundreds of transactions for drug traffickers who are subject to U.S. sanctions, the U.S. Treasury Department said Thursday.

The transactions, valued at $91,000, were processed for six specially designated narcotics traffickers (SDNTs) between 2005 and 2009, the Office of Foreign Assets Control (OFAC) said.

BofA also failed to file timely “blocked property reports” on accounts owned by four other SDNTs.

OFAC said it determined that 79 transactions processed after October 6, 2006 constituted an “egregious” case. The bank knew of a problem with its OFAC screening tool at that time but didn’t fix it for more than two years.

OFAC said the potential harm to the U.S. sanctions program objectives was significant, given the number of transactions and benefit conferred to the SDNTs.

BofA processed additional transactions after it reported taking remedial action to OFAC in 2006 and 2008, the Treasury Department said.

According to OFAC, the total base penalty for the apparent violations was $83 million. It reduced the penalty because of the bank’s remediation and because some of the transactions might have been eligible for an OFAC license when the transactions occurred.

Other banks that have paid fines to settle U.S. charges of breaching OFAC sanctions include BNP Paribas, Standard CharteredBarclaysRoyal Bank of Scotland and Credit Suisse.


Julie DiMauro is the executive editor of FCPA Blog and can be reached here

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