OFAC fines State Street $7.5m for Russian sanctions lapses

The Office of Foreign Assets Control has imposed a $7.5 million penalty on State Street for violations of Russia sanctions regulations. The enforcement action centres on deficiencies in the bank's sanctions compliance and screening controls, indicating gaps in either transaction monitoring or entity screening against OFAC lists.

• Regulator's line: OFAC found State Street did not maintain effective sanctions controls to prevent dealings with Russian persons or entities on restricted lists.
• The number: $7.5 million fine reflects the severity of control failures but stops short of OFAC's maximum civil penalty thresholds for similar cases.
• Timeline: The enforcement action confirms OFAC's sustained focus on Russia sanctions compliance post-2022 invasion, with no stated violation date disclosed yet.
• For compliance teams: The case signals OFAC expects transaction screening, entity screening, and list-update protocols to be operationally airtight, with documented testing and remediation.

State Street's penalty sits within OFAC's standard range for screening failures by major custodians. Compliance teams should treat this as confirmation that sanctions control failures remain a high-priority enforcement target. Check whether your screening rules cover both direct transactions and beneficial ownership screening. Verify that your OFAC list-matching includes variant names and historical designations. Document evidence of control testing and remediation cycles. OFAC will expect proof of fixes during any future examination.

Swiss Financial Market Supervisory Authority (FINMA) has imposed a $15 million penalty on Mirabaud Bank for material anti-money laundering compliance failures. The enforcement action, issued in 2024, directly targets inadequate AML control systems that failed to meet regulatory standards for client due diligence and transaction monitoring.

• Regulator's line: FINMA determined Mirabaud's AML framework was insufficient across client onboarding, enhanced due diligence procedures, and suspicious activity reporting mechanisms.
• The number: $15 million penalty reflects the scale and duration of control failures, consistent with FINMA's enforcement trajectory for systemic AML gaps in private banking.
• For compliance teams: Private banks must validate that CDD/EDD workflows capture beneficial ownership, source of funds verification, and ongoing transaction monitoring against political exposure lists.

This enforcement underscores FINMA's focus on control infrastructure rather than isolated incidents. Compliance teams should audit their AML systems' timeliness, coverage of customer segments, and escalation protocols. The penalty signals heightened scrutiny of Swiss private banking operations, particularly around cross-border flows and high-net-worth client screening practices.

The US Treasury's Office of Foreign Assets Control designated two Iranian nationals and multiple entities including Qingdao Haiye Oil Terminal Co., Ltd. to its SDN List on sanctions evasion grounds. Nasser Ghasemi Rad and Masoud Mohammad Rezaei were added under Executive Orders 13902 and 13846, blocking all US transactions and freezing assets.

• Regulator's line: OFAC said the designations target a sanctions evasion network that obscured Iranian oil movements through intermediaries and foreign ports.
• The number: General License W permits wind down of existing transactions with affected parties within 14 calendar days from the designation date.
• For compliance teams: Screen counterparties against updated SDN List entries immediately, particularly Chinese logistics operators and intermediaries in energy trade.

This action reflects OFAC's focus on opacity in oil trade routes, where third-country terminals mask beneficial ownership. Compliance teams handling energy sector transactions must strengthen due diligence on transshipment arrangements and port operators in jurisdictions known for sanctions circumvention. Watch for follow-on designations targeting additional upstream suppliers or maritime operators in the same network.

FinCEN published two notices in the Federal Register on April 10, 2026, proposing updates to Anti-Money Laundering and Countering the Financing of Terrorism programs. The proposals build on the 2016 customer due diligence rules and apply across all U.S. financial institutions, not sector-specific subsets.

• Regulator's line: FinCEN is mandating enhanced transaction monitoring capabilities, expanded sanctions screening protocols, and stricter beneficial ownership verification requirements across institutions.
• The number: The proposals cover all U.S. financial institutions regulated under the Bank Secrecy Act, with no de minimis exemptions announced.
• Timeline: Comment period closes 60 days from Federal Register publication, with final rules expected by Q3 2026.

Compliance teams should audit current transaction monitoring thresholds and beneficial ownership documentation practices now. The beneficial ownership focus signals FinCEN's shift toward ultimate beneficiary verification over nominee structures. Prepare remediation roadmaps for gaps in sanctions screening automation and transaction filtering logic. Final rules will likely include implementation deadlines of 12 to 24 months.