Today OFAC announced that Intesa Sanpaolo S.p.A., an Italian banking institution, agreed to pay US$2,949,030 to settle claims that it violated the Cuban, Sudanese and Iranian sanctions.
For the Iranian sanctions, Intesa was processing transactions for or on behalf of Irasco S.r.l., which terminated in the United States or with U.S. persons. Irasco is an Italian company headquartered in Genoa.
So what was the problem? Irasco also happens to be owned or controlled by the Government of Iran. And at the time its was processing the transactions, Intesta should have identified Irasco as meeting the definition of the Government of Iran under the Iranian sanctions.
The lesson here for foreign financial institutions: if you are processing transactions that terminate in the United States or with U.S. persons, the U.S. government appears to expect you to find out if a sanctioned person is behind the curtain.