Trade Finance Insurer Hit With U.S. Sanctions Penalty
August 19 2019 - 2:02PM
Dow Jones News
By Mengqi Sun
A trade finance company has been fined for allegedly buying and
collecting debt of a blacklisted entity, the Treasury Department
said Friday.
A U.S. subsidiary of Dutch trade finance insurer Atradius NV
agreed to pay more than $345,000 to settle allegations that it
violated U.S. sanctions, according to a statement from the
Treasury.
Atradius Trade Credit Insurance Inc., the Hunt Valley, Md.-based
subsidiary, didn't immediately respond to a request for
comment.
The Treasury alleges that Atradius Trade Credit Insurance was
assigned the right by a U.S. cosmetics company to collect more than
$5.7 million of debt owed by Panama-based Grupo Wisa SA in October
2016.
Grupo Wisa, a holding company involved in real estate, retail
and hospitality, was blacklisted by the U.S. earlier that year,
according to the Treasury, which didn't name the cosmetics company.
The U.S. says Grupo Wisa has had ties to Panama-based drug money
laundering network Waked Money Laundering Organization, which was
designated as a narcotics trafficker in 2016.
A representative for Grupo Wisa didn't immediately provide a
comment for this article.
Atradius Trade Credit Insurance allegedly filed a claim in
Panama as a creditor in Grupo Wisa's liquidation and received more
than $4 million in payment from the liquidation of Grupo Wisa's
assets in Panama in June 2017, according to the Treasury
Department.
Treasury's Office of Foreign Assets Control, which administers
and enforces U.S. sanctions, said Atradius Trade Credit Insurance
didn't voluntarily disclose the alleged violations, but the
department credited the company for conducting an internal review
and cooperating with the agency's investigation.
Sanctions lawyers said the settlement is a reminder of OFAC's
jurisdiction. U.S. regulations prohibit U.S. individuals or
entities from engaging with designated entities, including property
in which the blacklisted entities have an interest.
"The reach of what is considered an interest in property is
quite expansive," said David Brummond, an attorney at Jacobson
Burton Kelley PLLC.
Although buying and collecting debt from a blacklisted entity
doesn't benefit the debtor, OFAC still considers the debt to be
part of the entity's property or interest, and companies could be
in violation of sanctions if they don't obtain a general license,
said Judith Alison Lee, a partner at law firm Gibson, Dunn &
Crutcher LLP.
Write to Mengqi Sun at mengqi.sun@wsj.com
(END) Dow Jones Newswires
August 19, 2019 13:47 ET (17:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.