Barclay’s violated international sanctions by permitting its employees to accept payments into the US from banks in blocked countries, including Iran, Myanmar, Cuba and Libya.

According the the Wall Street Journal article, “Barclays Settles U.S. Charges”

In a settlement with U.S. and New York prosecutors made public Monday, the London-based bank agreed to pay $298 million to settle criminal charges. And it acknowledged that its employees, between 1995 and 2006, helped banks in Iran, Cuba, Libya, Myanmar and Sudan evade U.S. regulations prohibiting payments into the U.S.

Between 1995 and 2006, prosecuters allege that Barclays accepted over $500 million in transactions, concertedly covering up the country names where the illegal payments originated from.

In other cases, Barclays returned payments out of fear they would be detected by U.S. officials, sending fax cover sheets that said: “Payments to U.S.A. must NOT contain the word listed below.” Prosecutors said payments often were re-sent after references to the sanctioned countries, which included Sudan and Myanmar, were omitted.

Other recent high-value fines have come through in recent months, including:

• ABN Amro settled for $500 million to end allegations that it helped Iran, Libya, Sudan and Cuba evade U.S. sanctions by “stripping” the identities of transactions to conceal the countries from which they originated.
• Credit Suisse Group paid $536 million to settle similar violations involving transactions with Iran.
• In 2009, a unit of London-based Lloyds Banking Group paid $350 million related to similar charges after being accused of masking the origin of payments from Iran and Sudan.

WSJ discusses the Barclay’s case in the first half of the video below:

Xe Services, formerly called “Blackwater,” was also fined this week for violating export regulations under ITAR, or the International Traffic in Arms Regulations. While acting as a contractor for the US government in Iraq, the company committed 288 violations of the International Traffic in Arms Regulations (ITAR), including the “unauthorized export of defense items and provision of defense services to foreign-end users in multiple countries from 2003 to 2009.”  While no sensitive technologies were involved, the items do require a license before they can be exported.

The New York Times reported that Xe Services committed violations included illegally exporting weapons to Afghanistan, unauthorized proposals to train troops in Sudan, providing Taiwanese police officers with sniper training, and shipping military equipment to its personnel in Iraq and Afghanistan.

The company has settled the charges with the State Department to the tune of $42 million. Several outstanding allegations, investigations, and indictments remain in process, however, as these aren’t trade compliance related I’ll leave them for your own personal reading at NYT.

Just goes to show, an ounce of prevention, using trade compliance systems, is worth a pound of cure.

Special Thanks to Global Trade Content Blog and the Export Compliance Group on LinkedIn.

Screen Restricted Parties to Prevent Doing Business with Sanctioned Countries:

White Paper: Six Best Practices to Improve Compliance with a Restricted Party Screening Solution: In this white paper, we look at some critical features to look for when searching for an optimal RPS solution, and how RPS solutions can manage even high-volume and complex screening processes.

EAST RUTHERFORD, NJ, November 5, 2009 — Management Dynamics, a leading provider of Global Trade Management (GTM) solutions, today announced that Communications Test Design, Inc (CTDI), a full service global engineering, repair and logistics company, implemented its RPS On-Demand solution, an advanced risk management solution that screens individuals and businesses to identify prohibited transactions based upon over 90 restricted party lists. Since automating restricted party screening, CTDI has significantly reduced corporate risk and improved compliance with global trade and security regulations while minimizing time and resources required for screening.

Providing repair and logistics services for major Telecom and Cable service providers and OEMs, CTDI also provides the service of screening shipments for many of its customers. CTDI needed to streamline its screening process across multiple order management systems and 25 locations. The company selected Management Dynamics’ RPS On-Demand solution for its functionality, ease of use, and ability to centralize its compliance with multi-org and team-based workflow to enable its global branches to easily manage their own customer shipments.

“We needed to prevent any illegal transactions with restricted entities or trade parties and avoid potential fines and penalties for CTDI and its telecom customers. We had previously relied on a fragmented, incomplete process,” said Greg Pugh, Global Compliance Manager, CTDI. “Management Dynamics provided the best value and came highly recommended by many authorities in the trade industry. It was also very important that the screening did not create a cumbersome distraction during high volume shipping processes. Since using the RPS On-Demand solution, we have significantly reduced our corporate risk, liability and exposure to prohibited transactions.”

Available on a flexible, on-demand architecture, Management Dynamics’ RPS On-Demand solution addressed CTDI’s needs with a secure, comprehensive method to automate screening of its customers, vendors, and other trading partners against all restricted party lists from governmental institutions worldwide. With improved screening algorithms based on computational linguistics, RPS On-Demand delivers at least a 30 percent improvement in screening accuracy with a 70 percent reduction in false positives over traditional methods. The Web-based solution integrates with any enterprise system and can be quickly and cost-effectively implemented.

“Today, exporters are held to a higher level of accountability to meet government mandates than ever before,” said Jim Preuninger, CEO of Management Dynamics. “CTDI uses our RPS On-Demand solution to centralize and streamline its compliance process to improve productivity and effectively manage supply chain risk.”

About CTDI
A premier Telecommunications service company headquartered in West Chester, PA., CTDI has provided groundbreaking maintenance and product service solutions to the global telecommunications industry since 1975. Today, CTDI offers the most comprehensive Service Portfolio in the industry that includes: Wireline Repair & Logistics, Wireless Repair & Logistics, Engineering and Installation services, Global Supply Chain solutions and Product Engineering and Manufacturing. Today, CTDI services Original Equipment Manufacturers (OEM) and Carriers with 42 international strategic repair and logistics locations supported by an experienced team of over 4,500 telecommunications professionals. For more information, visit www.ctdi.com.

Screen for Denied Parties & Sanctioned Countries

Restricted Party Screening is a must-have procedure for any company engaging in global trade. The risks associated with not having a system in place are becoming increasingly large when you consider the possible sanctions,fines and penalties that are being dealt by the Department of Homeland Security, BIS, and OFAC. The first step to achieving this is implementing a program focused on Trade Partner screening.

Restricted Party Screening White Paper

Restricted Party Screening White Paper

Management Dynamics’ offers a Restricted Party Screening (RPS) solution that provides a secure, comprehensive method to automate this process, enabling companies to quickly screen their customers, suppliers and other trading partners against all restricted party lists from governmental institutions worldwide.

Learn more about denied party screening by downloading the white paper, Six Best Practices to Improve Compliance with a Restricted Party Screening Solution.

The Obama administration is scrambling to assemble a package of harsher economic sanctions against Iran over its nuclear program that could include a cutoff of investments to the country’s oil-and-gas industry and restrictions on many more Iranian banks than those currently blacklisted, senior administration officials said Sunday.

The administration also is seeking to build a broader coalition of partners for sanctions so that it may still be able to act against Iran even if China and Russia were to veto harsher measures proposed in the United Nations Security Council.

Read the complete article at the New York Times: US Is Seeking a Range of Sanctions Against Iran.

Although most don’t realize it, universities and other institutes export things every day – and frequently these can be high-tech items containing sensitive, private data. Just like everyone else, Universities must obtain licenses and comply with trade laws.

Additionally, when hiring employees or permitting visitors, these organizations need to be sure they truly know who they are dealing with – making denied party screening another important requirement for the education and research communities.

Visit the Academic Export Compliance blog to read  Best Practices for Export Compliance in a Research Institution

Or, check out Why Should Universities Worry About Export Control Laws? from Boskage Trade News.