Reinsurer Fined for Apparent Iranian Sanction Violations
The Office of Foreign Assets Control (OFAC) has issued a notice stating that General Reinsurance Corporation ("Gen Re") has remitted USD 59,130 to settle liability for apparent violations of the Iranian Transactions Regulations that occurred in July and August 2005. OFAC operates under the U.S. Department of the Treasury in administering and enforcing economic and trade sanctions based on U.S. foreign policy and national security goals.
The apparent violations consisted of two (2) reinsurance claim payments made to the Steamship Mutual Underwriting Association Limited ("Steamship Mutual") for losses arising from vessel operations of the National Iranian Tanker Company. Gen Re made the payments pursuant to its reinsurance obligation to Steamship Mutual for the coverage period June 16, 1998 to February 20, 2002. The combined amount of the two (2) reinsurance claims payments totaled USD 309,740.65. The base penalty for the apparent violations was USD 131,424.
The penalty was significantly reduced because Gen Re voluntarily disclosed this matter to OFAC and agreed to implement remedial preventative measures to prevent future violations by installing enhanced sanctions compliance software and beginning a training program for personnel who have a high probability of encountering sanctioned transactions.
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