Card Issuer Settles With OFAC Over Sanctions Violations

November 9, 2023
The US Office of Foreign Assets Control (OFAC) has reached a settlement with daVinci Payments over sanctions violations.

The US Office of Foreign Assets Control (OFAC) has reached a settlement with daVinci Payments over sanctions violations. 

DaVinci Payments (daVinci), a financial services and payments firm based in Illinois, has agreed to pay $206,213 to settle its potential civil liability for 12,391 apparent violations of OFAC sanctions on Crimea, Iran, Syria and Cuba. 

Between November 15, 2017, and July 27, 2022, daVinci — which has merged with North Lane Technologies to become Onbe — managed prepaid reward card programmes, and had enabled persons apparently residing in sanctioned jurisdictions to redeem reward cards.

Between March 2020 and February 2022, in the course of a compliance review and subsequent investigation, daVinci discovered that on 12,378 occasions it had redeemed prepaid cards for users with IP addresses associated with Iran, Syria, Cuba and Crimea. 

Further, after daVinci began preventing access to its platform from IP addresses associated with these sanctioned jurisdictions, the company discovered it had redeemed prepaid cards for 13 card recipients who had used email addresses with suffixes associated with sanctioned jurisdictions during the redemption process and were apparently residents.

Over this time period, the absence of comprehensive geolocation controls led daVinci to process 12,391 redemptions, totalling $549,134.89 for cardholders located in sanctioned jurisdictions — resulting in apparent violations of various sanction regulations. 

“DaVinci failed to exercise due caution or care when it redeemed prepaid digital reward cards for users who appeared to be in sanctioned jurisdictions,” OFAC said, citing aggravating factors. 

“DaVinci knew, or had reason to know, of redeemers’ IP addresses and email address suffixes but did not incorporate this information into its compliance programme or controls.”

However, it appears OFAC has also been quite lenient on daVinci. For example, the statutory maximum civil monetary penalty applicable in this matter is over $4m.

“The settlement amount reflects OFAC’s determination that daVinci’s conduct was non-egregious and was voluntarily self-disclosed,” said OFAC. 

Representatives of daVinci have been contacted for comment. 

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