On March 14, 2024, the Office of Foreign Assets Control fined EFG International AG, a Swiss private banking group, $3,740,442 to settle potential civil liability for violations of multiple sanctions programs.
The sanctions violation incident involved subsidiaries of EFG from various countries, including the United States, Singapore, the Bahamas, the Cayman Islands, Luxembourg, Monaco, and Switzerland. It also involved corporate and individual clients from Cuba, Panama, and the British Virgin Islands.
The violations leading to the fine include:
- Failure to screen and notify US custodians about blocked persons’ positions in its US omnibus accounts.
- Knowingly holding securities for blocked persons in the US.
- Between 2014 and 2018, EFG conducted 727 transactions, totaling $29,939,701, involving individuals in Cuba, a sanctioned region.
- Opening an investment account for a Chinese national later designated as a Specially Designated Narcotics Trafficking Kingpin (SDNTK).
Key remedial action items for EFG are:
- Instituting a risk-control framework to identify high-risk countries.
- Applying enhanced due diligence to clients with exposures to high-risk countries.
- Conducting annual sanctions risk assessments.
- Implementing internal restrictions to prevent credits/debits to sanctioned-client accounts.
- Requiring all EFG subsidiaries to notify US custodians and other US parties in writing of securities positions that EFG holds in its omnibus accounts on behalf of clients designated by OFAC.
