The District Court of Rotterdam has upheld fines of €170,000 imposed by the Dutch National Bank on a payment services provider for breaches of Dutch sanctions law and AML rules.
The appeal was largely based on arguments that the internal compliance function had adequately performed its function. The court was highly critical of this argument, noting the lack of due diligence and periodic training.
The UK’s Financial Conduct Authority has today issued a Final Notice against Canara Bank.
The bank was fined £896,100 and prevented from accepting deposits from new customers for 147 days.
The fine relates to inadequacies in the bank’s KYC compliance including sanctions screening. The bank cooperated with the FCA and qualified for a 30% discount on the fine.
It was announced today by HMRC that it had fined an unnamed UK exporter £109,312.50 for the unlicensed exports of military goods.
No further information was published.
The Dutch Public Prosecution Service has obtained a criminal fine of €50,000 against an unnamed Dutch freight solutions company.
The company had sought to ship radar equipment for Sukhoi jet fighters from Malaysia to Russia. The consignment was intercepted at Schiphol Airport. The sale was in breach of both European export controls, as the products were included on the EU’s Military List, and in breach of Russian sanctions which would have prohibited the granting of an export licence.
No licence had been applied for.
An individual was acquitted of a related offence.
In 2015 the Dutch National Bank had imposed a financial penalty of €125,000 on an unnamed payment services provider for failings in relation to sanctions and PEP screening as part of a review by the bank.
The payment services provider appealed the decision.
On appeal to the District Court of Rotterdam the penalty was upheld but the fine reduced to €100,000.
The National Bank had originally calculated the fine as €550,000 which was then reduced due to the financial condition and size of the defendant.
The District Court of East Brabant has convicted an individual for breaches of the EU’s Iran sanctions.
The defendant had traded for 2 years with a designated Iranian entity. The unspecified goods had been shipped via intermediary countries Turkey and Dubai.
He was sentenced to 16 months in jail, with a further 4 months suspended subject to a two-year probation period. He was also fined €500,000. The fine was on the individual personally and not on the company through which he traded.
The Latvian Finance and Capital Markets Commission has today announced a fine of €1.3 million against Norvik Banka and of €1.56 million against Rietumu Banka in relation to transactions related to circumvention of North Korean sanctions between 2013 and 2014 and 2009 and 2015 respectively.
Both banks have cooperated with the FCMC and have undertaken as part of administrative agreements to improve their internal compliance functions.
It has been reported today that a plea deal has been reached for the final two defendants in the Italian prosecution of arms exports to Libya and Iran in breach of EU sanctions and export controls.
Mario Di Leva negotiated 3 years and 8 months of imprisonment and a fine of €8000, and for Annamaria Fontana the sentence was 3 years and 6 months and a fine of €7000.
See our earlier post for the plea deal for the first defendant.
On June 27, 2017, the Latvian Financial and Capital Market Commission entered into administrative agreements with three different Latvian Banks for failings related to breaches of North Korean sanctions. Each of the banks cooperated with the investigations.
JSC Baltikums Bank and JSC PrivatBank were each fined €35,575 for “weaknesses in customer due diligence and transaction monitoring that led to the situation that bank had been used to circumvent international sanctions requirements imposed against North Korea”.
JSC Reģionālā investiciju Banka, was fined €570,364, for the same failings, but also for “failure to ensure effective functioning of internal control system”. To remedy this, the bank was undertaken to invest €2.8 million on “the improvement of its internal control system in 2017/2018”.
In addition official warnings were issued to those at the bank responsible for AML and CTF controls. The bank also undertook to “assess its AML/CTF internal control system and take the necessary measures to improve its functioning and effectiveness in line with the action plan, to perform external testing on the categorization of customer base and IT solutions, as well as assess the risks associated with cross-border enforcement of sanctions”.
The District Court of Noord-Holland has today fined a fine of €40,000 on the Dutch airline KLM for its role in the unlicensed export of goods on the EU’s military list from the South African to Ecuador via the Netherlands.
The judgment noted that subsequent investigation had revealed 74 shipments where the required reporting had not been complied with.
