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Giving Gifts to the Treasury Department?

It may be the season of giving, but we’re guessing a “gift” to the U.S. Department of Treasury is not on your list.

Whatever the season, though, beware. OFAC happens!

Most recently it has happened to Apple. On November 25th, the technology giant entered an agreement with the Treasury Department to pay a civil penalty of $466,912. The fine is to settle Apple’s violations of the Foreign Narcotics Kingpin Sanctions involving interactions with a Slovenian company SIS and its owner Savo Stjepanovic, both on the SDN list. (We’re not making this OFAC stuff up.)

According to Compliance Week, the Office of Foreign Assets Control (OFAC) called Apple’s violation a “reckless disregard for U.S. sanctions requirements,” though the publication points out that the settlement was not too hefty.

Another account, by financial news site Benzinga, relates that the violation was due to a failure of Apples’ compliance screening tool. Apple had done business with SIS d.o.o. (“d.o.o. is a standard corporate suffix equivalent to “LLC”) starting in 2008. In 2015 SIS and its owner were added to the SDN list. But Apple continued to do business with SIS for two years. It did not catch that SIS had been added to SDN. Apparently its screening tool searched for “SIS DOO” and missed “SIS d.o.o.” The company’s compliance effort also failed to search for the name Stjepanovic.

It demonstrates the importance of having a compliance screening process that tracks regular OFAC additions and your own vendor list daily and that applies the right search logic to capture inexact matches. (See OFAC: Are You Compliant or Just Think You Are?)

Apple may have gotten off easy in terms of the size of the fine this time, though somebody may not be getting a holiday bonus. Don’t let your organization fall into unexpected “gift-giving.” OFAC is serious and violating the SDN list is not what you want to do at any time.

VendorInfo can help you with vendor verification and compliance. Click here or call (678) 335-5735.

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