OFAC Announces Settlement With Western Union for Thousands of Terrorism Sanctions Violations

The Treasury’s Office of Foreign Assets Control announced a $400,000 settlement agreement with Western Union Financial Services after OFAC said Western Union committed nearly 5,000 violations of the Global Terrorism Sanctions Regulations, OFAC said in a June 7 notice. Western Union, headquartered in Colorado, processed transactions that involved the Kairaba Shopping Center (KSC) in The Gambia, a Specially Designated National, for more than four years after the entity was sanctioned by OFAC, the notice said. After Western Union discovered KSC was sanctioned, OFAC said, it “failed to deactivate” the entity’s access to Western Union “due to its mistaken belief that” the entity was “already inactive.” Western Union processed transactions worth about $ 1.275 million “to third-party, non-designated beneficiaries who chose to collect their remittances at KSC,” the notice said.

Between 2010 and 2015, Western Union used a bank in The Gambia as one of its “principal Master Agents” in the country, OFAC said. OFAC said the bank had “established a “Sub-Agent relationship” in 2006 with KSC, which was sanctioned by OFAC in 2010. Western Union failed to “screen location data for sanctions-related issues as part of its review process,” OFAC said.

Western Union first became aware that KSC was a potential sub-agent in February 2015, OFAC said, “but mistakenly believed” that KSC had operated from a single location that was “no longer active as of that date.” It wasn’t until the following month that Western Union “identified a second, active KSC location,” OFAC said, and ended its relationship with KSC.

OFAC said Western Union voluntarily disclosed the violations and said they constituted a “non-egregious case.” OFAC said aggravating factors included Western Union’s “reckless disregard” for U.S. sanctions and its four-year time period of processing transactions involving KSC. Western Union also “had reason to know” KSC was on Treasury’s SDN List, caused “substantial harm to” a U.S. sanctions program and is a “large and commercially sophisticated” company, the notice said.

OFAC said mitigating factors included the fact that Western Union had not committed a violation in the five previous years and had a sanctions program “that seemed to be effective except in this instance.” Western Union also fixed the gap in its compliance program and internal controls, the notice said, and “took additional remedial actions” relating to its screening procedures.