The Federal Reserve Bank issued a $67.8 million fine against Wells Fargo for unsafe or unsound practices relating to historical inadequate oversight of sanctions compliance risks.
According to the order assessing the civil money penalty, Wells Fargo engaged in deficient oversight which enabled the bank to violate U.S. sanctions regulations by providing a trade finance platform called Eximbills to a foreign bank that used the platform to process approximately $532 million in prohibited transactions between 2010 and 2015.
These transactions involved parties in jurisdictions subject at the time of the transactions to sanctions regulations imposed under the International Emergency Economic Powers Act, administered by the Office of Foreign Assets Control of the United States Department of the Treasury (OFAC).
In December 2015, Wells Fargo self-identified the issue, stopped allowing the foreign bank to process transactions involving parties in jurisdictions subject to OFAC regulations and no longer offers the trading platform to foreign banks, and reported the matter to relevant regulators, including to the Fed Board of Governors and OFAC.
The Fed Board’s action is being taken in conjunction with an action by the OFAC, which is imposing a separate penalty on Wells Fargo Bank for these violations. The total penalty announced by both agencies is approximately $97.8 million.