Navigators Insurance Company (NIC) has paid $271,815 to OFAC in settlement of its potential civil liability for 48 apparent violations of several US sanctions regimes. The violations occurred between 8 May 2008 and 1 April 2011, whereby NIC and its London branch issued global protection and indemnity insurance policies that covered North Korean-flagged vessels and incidents occurring in or involving Iran, Sudan, and Cuba. Some of these policies led to the payment of claims. OFAC determined that NIC voluntarily disclosed the violations to OFAC, and that the violations were a result of personnel within NIC misinterpreting the applicability of OFAC sanctions regulations in the absence of a formal OFAC compliance program.
OFAC considered that NIC’s case was aggravated by the fact that managers and supervisors knew or had reason to know that the majority of the insurance policies and payments at issue involved OFAC-sanctioned countries, that NIC is a commercially sophisticated financial institution, and by the absence of a formal compliance program. However, OFAC ultimately determined the apparent violations to be non-egregious and considered that they were mitigated by NIC’s cooperation with OFAC’s investigation, NIC taking appropriate remedial action in response (including the implementation of a comprehensive compliance program), and NIC having a clean record with OFAC for the five years preceding their first apparent violation.
OFAC’s press release on the matter is here.