Payoneer fined $1.4 million by USDT for thousands of sanction violations including involving Iran and Syria

Israeli fintech company Payoneer has been fined $1.4 million by the U.S. Department of Treasury's Office of Foreign Assets Control for 2,260 apparent violations of multiple sanctions programs. According to the settlement reached with OFAC, Payoneer processed 2,241 payments for parties located in certain jurisdictions and regions subject to sanctions including the Crimea region of Ukraine, Iran, Sudan, and Syria, and 19 payments on behalf of sanctioned persons on OFAC’s List of Specially Designated Nationals and Blocked Persons.

These violations enabled persons in these jurisdictions and regions and on the SDN List to engage in approximately $802,117.36 worth of transactions between February 2013 and February 2018.

According to OFAC, the violations related to commercial transactions processed by Payoneer on behalf of its corporate customers and card-issuing financial institutions. This resulted in multiple sanctions compliance control breakdowns, including weak algorithms that allowed close matches to SDN List entries not to be flagged by its filter, failure to screen for Business Identifier Codes (BICs) even when SDN List entries contained them, during backlog periods which allowed flagged and pended payments to be automatically released without review, and lack of focus on sanctioned locations, especially Crimea, because it was not monitoring IP addresses or flagging addresses in sanctioned locations.

Payoneer began trading on Nasdaq last month at an implied estimated enterprise value of approximately $3.3 billion.

Payoneer said in response to the settlement: “Payoneer takes its compliance responsibilities very seriously and we maintain a robust compliance program, which we are committed to continuously improving. Upon discovery of these incidents, (which were non-egregious in nature) and took place between 2013 and 2018, Payoneer took immediate action, including significant investments in its technology and human resources to further strengthen our compliance program. Payoneer’s mission is to bring financial empowerment to businesses and entrepreneurs around the world through participation in the digital economy. We will continue to make investments to ensure that we accomplish this mission in a secure and compliant way."