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BACB Reaches Settlement with OFAC

Posted on 17/09/2019

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London, 17 September 2019: British Arab Commercial Bank plc (“BACB” or the “Bank”) announces it has reached a final settlement with the U.S. Department of the Treasury’s Office of Foreign Assets Control ("OFAC") regarding alleged historical U.S. dollar (“USD”) bulk funding practices between 2009 and 2014. The settlement follows an internal review which led the Bank to self-disclose its preliminary findings to OFAC. This was followed by an extensive internal review and period of cooperation with OFAC. Under the terms of the settlement agreement, OFAC made no finding of fault regarding BACB, which did not admit liability for any violations. No further action will be taken against the Bank by OFAC if it meets certain conditions incorporated in today’s settlement, including payment in the amount of $4 million and the annual certification of the Bank’s sanctions compliance program.

The payment is for past alleged violations of the Sudanese Sanctions Regulations, which have since been repealed. OFAC’s findings make clear that BACB did not set out to violate US sanctions, but, rather, that the Bank engaged in USD bulk funding practices on behalf of Sudanese clients because "[BACB] believed that the transactions would not implicate U.S. jurisdiction." The Bank ceased its alleged practice of USD bulk funding on behalf of Sudanese clients in 2014 and voluntarily reported the transactions to OFAC in that year.

In the more than five subsequent years, BACB has completed a number of comprehensive reviews and upgrade of its sanctions compliance program, in line with industry standards. Steps taken include further strengthening sanctions and customer due-diligence screening systems, the addition of experienced personnel into the Bank’s centralized compliance and anti-financial crime teams, implementing risk-based compliance training, reorganizing the Bank’s executive committee structure and management team to enhance decision-making, compliance and control, the hiring of an independent consultant to assess its sanctions compliance program, and the establishment of robust sanctions compliance program testing, audit and quality assurances policies and procedures.

BACB CEO Susannah L. Aliker stated, “BACB is pleased finally to put these historical matters to rest. We note that OFAC recognized that the Bank did not set out to violate US sanctions and believed the transactions in question would be processed outside the US financial system. OFAC also acknowledges both the Bank’s extensive cooperation with US authorities and the concrete steps that BACB has taken to improve its compliance program. Today’s agreement clears the way for BACB to continue to grow its business in a sustainable and compliant manner to meet the needs of its clients.”