Consent order targets UAE bank’s compliance with U.S. sanctions laws

Questions about compliance with U.S. sanctions laws have led to a consent cease-and-desist order against a bank headquartered in the United Arab Emirates, the Federal Reserve said Tuesday.

The order, the Fed said, against Mashreqbank psc centers around the agency’s findings that the bank had insufficient policies and procedures to ensure that activities at its offices outside the U.S. complied with U.S. sanctions laws. More specifically, according to the Fed’s court filings, from at least 2005 through 2009, overseas branches of the bank – mostly in London – processed some U.S. dollar-denominated funds transfers.

Those transfers, the Fed said, involved “parties subject to Office of Foreign Assets Control (OFAC) Regulations that did not contain relevant information within the payment messages necessary for the Branch and other U.S. financial institutions to determine whether these transactions were carried out in a manner consistent with U.S. law, which caused violations of OFAC Regulations.” OFAC is an arm of the U.S. Treasury charged with enforcing U.S. economic sanctions programs primarily against countries and groups of individuals, including terrorists and narcotics traffickers.

The Fed said the consent order requires Mashreqbank to “implement an enhanced program to ensure global compliance with U.S. sanctions” administered by OFAC.

Federal Reserve issues consent order against Mashreqbank for firm’s unsafe and unsound practices related to sanctions compliance