14 Jun 2019
Western Union Financial Services, Inc. has agreed to pay the US Treasury Department’s sanctions arm $401,697 for processing thousands of transactions over a 4-year period on behalf of a subagent that had been blacklisted for links to terrorism.
The Colorado-based money services business began working with Gambia-based subagent Kairaba Shopping Center (KSC) around 2006 when the company contracted with a bank that served as one of Western Union’s principal master agents in the country, according to the Office of Foreign Assets Control (OFAC).
But Western Union failed to terminate its relationship with the subagent in 2010 after OFAC accused KSC, its parent company Tajco Ltd, and three of Tajco’s owners of being part of an international network of businesses that funneled millions of dollars to Hezbollah. The US State Department has included Lebanon-based Hezbollah on its list of “foreign terrorist organizations” since 2005.
While Western Union had a process in place to screen its master agents and subagents for potential regulatory issues, it did not review location data for sanctions violations in the period following KSC’s designation and, consequently, failed to take identify the problematic relationship until February 2015, OFAC said.
Because Western Union mistakenly believed that the Gambia-based company had operated out of a single location that had been closed, the subagent continued to serve as subagent for another month, according to the agency.
In assessing the penalty, OFAC noted that “Western Union acted with reckless disregard for U.S. sanctions requirements by failing to immediately identify both KSC locations” but had voluntarily disclosed the violations. The company’s disclosure led to a reduction in its monetary penalty, which would’ve otherwise been between $637,614 and $1,244,250,000, according to the agency.
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