On 17 November 2017, BCC Corporate SA (“BCCC”), a Belgium-based credit card issuer and corporate service company, agreed to pay USD 204,000 in order to settle its potential liability for apparent violations of the US Cuba sanctions regime. The Office of Foreign Assets Control (“OFAC“) determined, that between April 9, 2009 and February 3 2014, BCCC committed 1,818 apparent violations of the Cuban Assets Control Regulations, 31 C.F.R. part 515 (“CACR“). At the time of the violations, BCCC was a wholly owned subsidiary of Alpha Card Group (“Alpha Card“), which in turn was owned 50 percent by American Express Company (“American Express“), a US financial institution. American Express agreed to remit the USD204,000 to settle any potential civil liability for the apparent violations of the CACR.
According to OFAC, American Express did voluntary self-disclose the apparent violations of the CACR and that the apparent violations constitute a non-egregious case. OFAC considered the following to be aggravating factors:
- personnel within both Alpha Card and BCCC had reason to know of the conduct that led to the apparent violations;
- despite Alpha Card’s business model prior to its acquisition of BCCC in March 2009, in which it dealt exclusively with American Express-related products (and therefore had insight into all the parties involved in any transactions throughout the network), none of the companies involved appear to have appreciated the possibility or risk that BCCC-issued credit cards could be used in Cuba, and the company should have taken steps to assess the level of sanctions risk, and related controls, for BCCC-issued credit cards;
- the apparent violations resulted in harm to U.S. sanctions program objectives at the time they occurred;
- American Express is a large and commercially sophisticated financial institution; and
- during OFAC’s investigation, American Express and BCCC provided certain information on multiple occasions that was verifiable inaccurate or incomplete, including material omissions.
OFAC considered the following to be mitigating factors:
- BCCC has not received a penalty notice or Finding of Violation from OFAC in the five years preceding the earliest date of the transactions giving rise to the apparent violations;
- upon discovering the apparent violations, American Express took swift and appropriate remedial action;
- American Express and BCCC voluntarily self-disclosed the apparent violations to OFAC; and
- BCCC signed a statute of limitations tolling agreement and tolling agreement extensions.
The official OFAC enforcement notice can be found here.