The designation was public. The screening failed on spelling.
What happened
OFAC designated Bank Melli Iran ZAO in Moscow (BMI Russia) on 25 October 2007 under the order on weapons of mass destruction proliferators. From 9 January 2008 to 13 July 2009 Bank of Moscow sent 69 funds transfers worth $41,306,113 for or on behalf of BMI Russia that were processed to or through the United States.
None of the SWIFT messages carried “Melli”, “Iran” or BMI Russia’s SWIFT business identifier code. They identified the bank by abbreviations such as “BMICJSCMOSCOWRUSSIA”, a reference to Bank Melli Iran Closed Joint Stock Company Moscow Russia, or “BMI CJSC”. OFAC says US institutions “processed all 69 of the funds transfers straight through without manual intervention.”
That is a screening result: a list match on a name and a code, defeated by a string a human would recognise and an automated filter did not. See fuzzy matching, screening and correspondent banking abuse.
The penalty
Non-egregious and not self-disclosed: base $14.1 million, settlement $9.5 million. OFAC counted failure to take appropriate care, significant harm to the programme, and the bank’s size and sophistication, and noted it “does not appear to have had adequate compliance policies or procedures in place.” Mitigating factors were a clean five-year record, remedial action and a tolling agreement. OFAC’s own summary is that the action “highlights the particular sanctions risk faced by foreign financial institutions that maintain accounts for persons subject to OFAC sanctions and conduct significant business through the U.S. financial system.”
What the record shows
- An abbreviation was enough. The releases do not say it was deliberate; they say the messages named the bank in a way US screening did not catch.
- The sanctioned party was a customer of a foreign bank. OFAC found the shortcoming at the sending bank, which “does not appear to have had adequate compliance policies or procedures”.