Swedbank has agreed to transfer USD 3,430,900 (EUR 3,144,179) to settle its alleged civil liability for infringement of the Crimea sanctions imposed by OFAC.
In 2015 and 2016, a Swedbank shipping industry client used the Swedbank electronic bank platform from an Internet protocol address in Crimea to send payments to people in Crimea using US correspondent banks. OFAC finds that the apparent violations of Swedbank were not voluntarily disclosed.
According to the OFAC statement, prior to Russia's 2014 invasion of the Crimean region of Ukraine, Swedbank had onboarded a customer of the shipping industry in Crimea, which owned three special purpose companies, each of which had an account in Swedbank. Between February 5, 2015, and October 14, 2016, the client initiated 386 transactions for a total of USD 3,312,120 (EUR 3,035 326), using accounts owned by those companies that were processed using US correspondent banks.
Around March 2016, the company owner attempted to send business-related payments from an IP address in Crimea via an electronic banking platform to a US correspondent bank that rejected payments, referring to a possible link with Crimea, and warned Swedbank Latvia.
According to the statement, Swedbank attempted to obtain additional information from the US correspondent bank and requested additional information from the company owner. Swedbank did not receive a response from the US correspondent bank, and the company owner falsely stated to Swedbank that none of the payments were related to Crimea. On the basis of this statement, Swedbank directed the rejected payments to another US correspondent bank, which ultimately carried them out.
According to OFAC, Swedbank had reason to know that the customer's assurances that payments are not related to Crimea were false. Customer data clearly showed that he was physically in Crimea, and this information was at Swedbank's disposal at the time of the breach of sanctions.
As a result of Swedbank's action, the execution of December 19, 2014 “Blocking Property of Certain Persons and Prohibiting Certain Transactions with Respect to the Crimea Region of Ukraine” was breached. In particular, Swedbank allowed its client to initiate payments from Crimea using the e-bank platform, which was ultimately processed by the US correspondent bank. This action resulted in the export of financial services to Crimea in breach of execution, said OFAC.
