NEW YORK: The National Bank of Pakistan’s (NBP) New York branch was compelled to pay a penalty of $28,800 to the US treasury for apparent violations of US sanctions regime, the Wall Street Journal reported on Friday.
The US Treasury Department’s Office of Foreign Assets Control (OFAC) found that the New York branch of the bank processed wire transfers totalling $55,952 for the blacklisted Kyrgyzstan airline, Kyrgyz Trans Avia, the newspaper report said.
The bank agreed to settle the “apparent violations” of sanctions with US authorities on Thursday without really investigating the reason for the penalty.
No one was available from the National Bank’s office at the Wall Street to comment on the report.
The WSJ said that “the case illustrates how companies can be penalised for violating sanctions, even if the illegal transactions are only processed because of flaws in “screening software.”
The National bank’s sanction screening software failed to recognise the name of the account name LC Aircompany Kyrgyztransavia as belonging to Kyrgyz Trans Avia account, OFAC said.
OFAC blacklisted Kyrgyz Trans Avia in May 2013 after authorities alleged the airline helped Iran acquire aircraft used to bring in “illicit cargo to Syria for the Assad regime’s violent crackdown against its own citizens.”
The increased complexity of sanctions and an ever increasing number of blacklisted entities have made it hard for automated screening tools to keep up, experts say.
Under the strict liability of sanctions laws, companies can be punished for transactions, even if they are processed because of a software failure. The penalty was light, OFAC said, because supervisors at the bank cooperated with authorities and were unaware of transactions with the blacklisted airline, the WSJ said.
Published in Dawn, June 21st, 2015
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