American Insurance Group (‘AIG’) has agreed to pay the US Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’) $148,698 to settle potential liability for apparent violations of US sanctions (26 June).
According to OFAC, AIG was potentially liable for 555 transactions insuring the shipments of goods destined for (or transited through) Iran, Sudan and Cuba. The insurance policies were contrary to the Iranian Transactions and Sanctions Regulations, 31 C.F.R Part 560 (‘ITSR’); the Sudanese Sanctions Regulations, 31 C.F.R. Part 538 (‘SSR’) and the Cuban Assets Control Regulations, 31 C.F.R. Part 515 (‘CACR’).
OFAC stated that: ‘While a majority of the policies were issued with exclusionary clauses, most were too narrow in their scope and application to be effective. In addition, some of the policies were issued without such clauses.’ However, OFAC determined that ‘AIG did voluntarily self-disclose the Apparent Violations, and that the Apparent Violations constitute a non-egregious case. The total base penalty amount for the apparent violations was $198,266.’
OFAC also advised that:
‘As outlined in OFAC’s Frequently Asked Questions regarding Compliance for the Insurance Industry, the best and most reliable approach for insuring global risks without violating US sanctions law is to insert in global insurance policies an explicit exclusion for risks that would violate US sanctions laws.’
OFAC’s announcement can be found here:
OFAC’s FAQ can be found here: