OFAC Settles With American Express for $430,500 Over Narcotics Sanctions Violations

The Office of Foreign Assets Control reached a settlement with American Express National Bank for $430,500 over apparent violations of the Foreign Narcotics Kingpin Sanctions Regulations, according to a July 15 OFAC notice. Over the course of two months, OFAC said, Amex processed transactions for a card holder who was designated in connection with illegal drug distribution and money laundering.

According to the notice, Walter Alexander Del Nogal Marquez, an American Express cardholder since 2012, was designated under the Kingpin sanctions and added to OFAC's Specially Designated Nationals List in 2018. That triggered Amex's internal sanctions list screening system, but the alert was incorrectly closed by the Amex analyst that conducted the initial review, despite company requirements and matches for data on Marquez, OFAC said.

A month and a half later, an Amex analyst investigating an anti-money laundering alert identified Marquez's connection to the account and issued instructions to suspend all cards linked to the account. But the instructions didn't specify that the restriction was sanctions-related, so Marquez was able to get the suspension lifted the following day, OFAC said. Amex's anti-money laundering team caught the error again the next day, but the wrong suspension code was added, allowing the card to be used for additional transactions before it was finally closed about two months after Marquez was listed, it said. OFAC said Amex processed 214 transactions totaling about $155,000 involving the account between May 2018 and July 2018.

OFAC said the maximum penalty for the violations was more than $331 million but fined Amex only $430,500 due to several mitigating factors. Those factors include Amex's cooperation with OFAC and prompt responses to information requests as well as Amex's agreement to launch automated compliance measures, increase training for employees, move sanctions screening processes to a centralized team, and requirements to perform second-level reviews of high-confidence sanctions alerts.

OFAC also pointed to several aggravating factors, including its position as a large and sophisticated financial institution as well as its granting of "$155,189.42 in economic benefits" to an account associated with a sanctioned person.

OFAC said the case highlights the importance of "properly training employees on sanctions compliance procedures and ensuring that those procedures are followed appropriately," especially in handling high confidence alerts. The agency also said consistent application of company-wide compliance measures, especially in creating controls to prevent other departments from overriding compliance decisions, can help mitigate sanctions risks.

American Express didn't immediately respond to a request for comment.