On February 8, 2016, U.K.-based Barclays Bank Plc agreed to pay $2,485,890 to the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) to settle civil liability connected to apparent violations of the Zimbabwe Sanctions Regulations. The apparent violations stem from 159 transactions that Barclays processed, to or through, financial institutions in the United States from July 2008 to September 2014. These transactions were for, or on behalf of, certain corporate customers of Barclays Bank Zimbabwe Limited (BBZL) that were owned 50 percent or more by a person on OFAC's Specially Designated Nationals and Blocked Persons List (SDN List). Barclays performed sanctions screening on behalf of BBZL due to local restrictions in Zimbabwe, but, according to OFAC, shortcomings in the electronic screening system at the time prevented Barclays from capturing the beneficial owners of BBZL's corporate customers. OFAC also claimed that BBZL had inadequate Know Your Customer practices and procedures. Although Barclays became aware of these weaknesses, its attempts to correct them were insufficient to block problematic transactions.
OFAC concluded that Barclays did not submit a voluntary self-disclosure and, in determining the settlement amount, considered several aggravating factors, including that (1) management had actual knowledge or reason to know of the conduct; (2) Barclays is a large and commercially sophisticated international financial institution; and (3) the bank's compliance program was inadequate to identify customers on the SDN List. Nonetheless, the penalty is less than the $5 million base penalty amount in light of several mitigating factors. Specifically, OFAC considered that (1) Barclays had not received a penalty notice or Finding of Violation in the previous five years; (2) Barclays took remedial action in response; and (3) the prohibited entities were not publicly identified or designated as SDNs at the time the transactions were processed.
For additional information, see the OFAC enforcement notice.
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