Citi to pay $217,841 to settle OFAC violation liabilities

Reuters
A Citi sign is seen at the Citigroup stall on the floor of the New York Stock Exchange
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A Citi sign is seen at the Citigroup stall on the floor of the New York Stock Exchange, October 16, 2012. REUTERS/Brendan McDermid

(Reuters) - Citigroup Inc (C.N) has agreed to remit $217,841 to settle potential civil liability for apparently violating multiple sanctions programs of the Office of Foreign Assets Control (OFAC), the U.S. Department of Treasury said on Wednesday.

Citi Penang, the bank's Malaysian trade service unit, processed four export bill collection applications totaling $638,074.15 between April and November in 2009, on behalf of Citibank, Hong Kong that involved the shipment of goods to Iran, the Treasury Department said. (http://1.usa.gov/Wdn68z)

Although the bank had documentation in its possession related to the export bill collections, the Malaysian unit did not review or screen the bills of lading, certificates of origin, or shipment advice, the Treasury's document said.

The OFAC administers and enforces economic and trade sanctions against foreign countries and regimes, terrorists, narcotics traffickers and those engaged in activities related to the proliferation of weapons of mass destruction among others.

Citibank also processed four funds transfers totaling $133,786.73 on Feb. 9, 2010, Jan. 12 and March 8, 2011, and Oct. 29, 2012, involving entities appearing on OFAC's list of specially designated nationals and blocked persons.

Citigroup's software did not identify references to the sanctioned parties in the payment instructions, and the company processed the payments without manual intervention, the Treasury Department said.

The company took remedial action to ensure that specific name variations were added its filters, and implemented a programmatic fix in response to the apparent violation on Jan. 12, 2011, the Treasury Department said.

Citigroup co-operated with OFAC during the course of these investigations, including responding thoroughly and promptly to OFAC's requests for information in relation to all matters, according to the statement.

"We are pleased to have reached this settlement and remain committed to complying with OFAC requirements," Citigroup spokeswoman Molly Millerwise Meiners said in an emailed statement to Reuters.

The company's shares closed up 0.5 percent at $52.23 on Wednesday.

(Reporting by Avik Das and Sweta Singh in Bangalore; Editing by Savio D'Souza)

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