A few months ago I wrote on the large amount of money ANZ Bank had to pay to the United States Department of the Treasury Office of Foreign Assets Control (“OFAC”) in order to settle violations of U.S. economic sanctions. Well apparently that settlement got the point across to ANZ who has now refused to facilitate the transfer of $100,000 from Iran to the Solomon Islands. That money was to pay for 25 medical students from the Solomon Islands to travel to Cuba in order to receive medical training.

ANZ has stated that its official position is not to process remittances or transactions, “in any currency, directly or indirectly, involving Iran, Sudan, Syria, North Korea, Myanmar, or Cuba.” ANZ bank also released in a statement that this approach was given due to the unacceptable risk of sanctions non-compliance and the gravity of consequences associated with non-compliance.

Just a few months ago I mused on whether ANZ Bank, who paid nearly $6 million to OFAC in August to settle alleged U.S. sanctions violations pertaining to Sudan and Cuba, would actually learn a lesson. The answer is in and it is a resounding, “YES.”

Many people, including myself, have questioned the efficacy of sanctions. However, here is a clear example of the sanctions doing exactly what they are supposed to do. Now I believe it was the severity of the penalty handed down as opposed to the risk that really caused ANZ to check itself here, but in the end it’s still a strong example of U.S. sanctions at work. As I have noted throughout the year, the recent penalties seem to have become much more severe than in previous years. Apparently this is beginning to have an effect.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC litigation. If you have any questions please contact him at 202-280-6370 at 202-351-6161 or ferrari@ferrari-legal.com.