State Street Subsidiary Violated Iranian Sanctions, Treasury Says

A subsidiary of State Street Corp. violated Iranian transactions and sanctions regulations, the Treasury Department said Tuesday, but the government stopped short of issuing a monetary penalty.

The Treasury’s Office of Foreign Assets Control said custodian bank State Street Bank & Trust Co. violated U.S. Iranian sanctions regulations by processing payments on behalf of a person in Iran.

State Street Bank, acting as a trustee for a customer’s employee retirement plan, processed at least 45 pension payments totaling more than $11,000 to a plan participant between 2012 and 2015, OFAC said. The person was a U.S. citizen with a U.S. bank account but was residing in Iran, according to OFAC.

The bank disclosed the violations and subsequently improved its compliance program, OFAC said in explaining its decision to not impose a monetary penalty.

“We take our [anti-money-laundering] and sanctions responsibilities seriously and we have cooperated fully with OFAC throughout the process,” State Street said in a statement Tuesday. “In the four years since we reported this issue, we have made a number of enhancements to our global sanctions compliance program.”

OFAC said the bank’s internal system indicated the payment recipient’s address was in Tehran, Iran, and that the unit that oversaw payments related to the retirement plan used its own sanctions-screening filter, instead of the bank’s centralized screening system, according to the enforcement order.

Source: The Wall Street Journal

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