U.S. Sanctions Settlement With Bank of America Involves Apparent Somalia Violations

WASHINGTON (SD)— The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has reached an $11.66 million settlement with Bank of America, N.A., over 475 apparent violations of U.S. sanctions programs, including those targeting Somalia, according to an announcement issued on October 13.

OFAC said the apparent violations involved sanctions programs targeting Russia, Belarus, Iran, Burma, Somalia, narcotics trafficking and global terrorism. The agency stated that the bank agreed to settle its potential civil liability for the violations.

According to the Treasury Department, the compliance failures included processing correspondent-banking payments through blocked financial institutions, allowing designated individuals to make payments or withdraw funds because of inadequately calibrated sanctions alerts, delays in updating screening watchlists, and errors in handling business accounts associated with blocked persons.

The settlement announcement did not specify how many of the 475 apparent violations involved Somalia-related sanctions, identify particular Somali individuals or entities, or disclose the value of transactions specifically associated with Somalia. It therefore remains unclear from the public announcement what proportion of the case was directly connected to Somalia.

OFAC classified the apparent violations as non-egregious, while stating that they were largely not voluntarily self-disclosed. As part of the settlement, Bank of America committed to measures involving compliance training, testing, audits and future communication and cooperation with OFAC.

The OFAC settlement formed part of a wider U.S. Treasury enforcement action announced against Bank of America on October 13. Separate actions by other federal agencies brought the total penalties and enforcement measures against the bank to more than $1.21 billion, involving anti-money-laundering and sanctions compliance failures. The $11.66 million OFAC settlement is a distinct component of that broader action.

Somalia’s inclusion in the list of sanctions programs involved places the country within a broader U.S. effort to enforce restrictions on financial transactions connected to sanctioned persons and entities. However, the announcement does not establish that the Federal Government of Somalia was involved in the violations or that Somali officials were accused of wrongdoing.

For Somalia, the case highlights the importance of effective financial screening and compliance within international banking systems. Somali businesses, remittance providers and individuals who depend on cross-border financial services may be affected by banks’ efforts to prevent prohibited transactions, although the settlement itself does not establish any direct impact on Somali remittances.

The central unanswered question is the nature and scale of the Somalia-related transactions. Without a detailed breakdown from OFAC, it would be premature to conclude that the violations involved Somali government accounts, Al-Shabaab financing, or any specific Somali business or individual.

The case underscores the distinction between Somalia being named in a sanctions-enforcement action and Somalia’s government being implicated in wrongdoing. The published settlement establishes the former, but the available announcement does not establish the latter.