Swiss private banking group EFG International AG has agreed to pay $3.7 million to the US Office of Foreign Assets Control (OFAC) for violating multiple Washington sanctions programs, including restrictions against the Cuban regimes and Russia.
According to the US entity, the Swiss bank, which operates some 40 global subsidiaries, bought and sold securities on behalf of individuals sanctioned by OFAC. The $3,740,442 payment will allow EFG to resolve its civil liability for violations committed between 2014 and 2018.
During that period, the bank had US securities firms process 727 transactions totaling $29,939,701 on behalf of clients in Cuba. Additionally, EFG processed 141 transactions worth $468,615 for an individual blocked under the Kingpin Law, which sanctions drug traffickers, and five dividend payments totaling $1,200 for securities in US custody of a person blocked under the OFAC Moscow Sanctions Program.
EFG subsidiaries and affiliates provide financial services to clients worldwide, including banking, investment, asset management, and securities. The sanctioned transactions were conducted through omnibus accounts under the custody of the US market, including a US subsidiary of EFG.
Between January 2014 and July 2018, EFG subsidiaries located in the Bahamas, Cayman Islands, Luxembourg, Monaco, and Switzerland processed securities transactions and fund transfers involving US market participants on behalf of clients residing in Cuba. Clients included a Panamanian company owned by an individual in Cuba, as well as two private investment companies whose beneficial owner was a Cuban citizen.
OFAC found that EFG failed to exercise due caution by not adequately selecting and notifying US custodians and other parties in the US of the positions of persons blocked in omnibus accounts. The statement of agreement did not specify the names of companies and individuals involved in the violations.