Banco Popular settles potential OFAC liability

OFAC has announced a settlement with Banco Popular de Puerto Rico for $255,937.86 related to apparent violations of the the Venezuela Sanctions Regulations.

Banco Popular de Puerto Rico (BPPR), a Puerto Rican bank with branches in Puerto Rico and the Virgin Islands, processed 337 transactions totaling $853,126 on behalf of two individuals who were low level employees of the Government of Venezuela (GoV), in apparent violation of U.S. sanctions against Venezuela. All of the apparent violations resulted from the maintenance of four personal accounts operated by these two employees of the GoV. The settlement amount reflects OFAC’s determination that BPPR’s apparent violations were non-egregious and voluntarily self-disclosed.

Executive Order 13884 (E.O. 13884), issued on August 5, 2019, blocked property and interests in property of the GoV, and defined the GoV to include “any political subdivision, agency, or instrumentality” of the GoV, “any person owned or controlled, directly or indirectly,” by the GoV, and “any person who has acted or purported to act directly or indirectly for or on behalf of” any such entity. E.O. 13884 was incorporated into the amended Venezuela Sanctions Regulations (VSR), 31 C.F.R. part 591, on November 22, 2019.

Shortly after the issuance of E.O. 13884, BPPR began planning the methodology for the review of accounts that might be impacted by the executive order. However, it was not until October 26, 2020 — 14 months after E.O. 13884 was issued — that BPPR identified and blocked the four personal accounts of two customers. Documentation BPPR had at the time E.O. 13884 was issued showed that one of the customers worked in a clerical level position in the GoV’s Diplomatic Representation Office, and the other customer was a customer service representative of Compañía Anónima Nacional Teléfonos de Venezuela (CANTV), a Venezuelan state-owned entity. OFAC had issued General License 34A (GL 34A) on November 5, 2019, which authorized transactions involving certain GoV persons, but neither of these individuals met the criteria for GL 34A. BPPR’s delay in identifying these customers for 14 months following the issuance of E.O. 13884 resulted in 337 apparent violations of the VSR, 31 C.F.R. § 591.201, totaling $853,126 (the “Apparent Violations”).