On March 14, 2024, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with EFG International AG to settle its potential civil liability for apparent violations of multiple sanctions programs administered by OFAC. EFG International AG is a Switzerland-based global private banking group with approximately 40 global subsidiaries, providing a range of financial services, including banking, investment, asset management, and securities brokering, to institutional customers and individuals worldwide.
EFG’s violations include the following:
Between January 2014 and July 2018, EFG subsidiaries located in the Bahamas, Cayman Islands, Luxembourg, Monaco, and Switzerland processed 727 securities-related transactions and funds transfers totaling $29,939,701 through omnibus accounts at U.S. custodians or otherwise involving U.S. market participants on behalf of clients who resided in Cuba or whose beneficial owners were Cuban nationals.
In 2009, EFG Singapore opened an account for a Chinese national later designated as a SDNTK. EFG imposed restrictions on the account to prevent the processing of any payments to or from the client’s account, but failed to notify its U.S. custodian or other U.S. securities firms for over four years. The U.S. firms processed $468,615 in transactions until it was discovered in 2018.
In 2023, OFAC designated an EFG client under EO 14024 for harmful activities by the Russian government. EFG restricted the client's account and informed U.S. custodians, however, EFG’s notification to the custodians overlooked three securities positions due to an error. This error led to 5 dividend transactions worth $1,200 processing through U.S. firms.
As a result of the conduct described above, EFG processed 873 securities-related transactions, totaling $30,409,488, through U.S. custodians or involving U.S. person counterparties, in apparent violation of of the Cuban Assets Control Regulations, the Foreign Narcotics Kingpin Sanctions Regulations, and the Russian Harmful Foreign Activities Sanctions Regulations. EFG has agreed to pay $3,740,442 in settlement of the stated violations.
The enforcement action can be found here.
