Treasury: US digital commerce firm Payoneer pays $1.4M over sanctions violations

An American-based digital commerce company has agreed to pay the Treasury Department $1.4 million as part of a settlement for more than 2,000 apparent violations of multiple sanctions programs, the agency said in a statement on Friday.

Treasury said that Payoneer Inc., a publicly traded New York-based online money transmitter, processed payments for parties located in countries that are under U.S. sanctions, including Iran, Sudan, Syria and the Crimea region of Ukraine.

The agency said Payoneer also processed 19 payments on behalf of sanctioned persons who are on Treasury’s Office of Foreign Asset Control’s (OFAC) List of Specially Designated Nationals and Blocked Persons. 

Payoneeer had 2,260 apparent sanctions violations and settled with the Treasury Department for $1,400,301.40.

“This action highlights that money services businesses — like all financial service providers — are responsible for ensuring that they do not engage in unauthorized transactions prohibited by OFAC sanctions, such as dealings with blocked persons or property, or engaging in prohibited trade-related transactions with jurisdictions and regions subject to sanctions,” Treasury said in its enforcement report. 

Treasury said that deficiencies in Payoneer’s sanctions compliance program — related to screening, testing, auditing and transaction review procedures — resulted in sanctioned persons and people in sanctioned jurisdictions being able to engage in over $800,000 worth of transactions. 

The violations took place between 2013 and 2018.

The $1.4 million settlement was reduced from a base penalty of nearly $4 million for these types of sanctions. 

Treasury called all of the violations “non-egregious” but said that only 19 violations were voluntarily self-disclosed, while 2,241 were not. 

Treasury said Payoneer has taken steps to mitigate deficiencies that led to the violations, including firing its chief compliance officer, retraining its compliance staff and putting in place increased checks to make sure that violations are not occurring, among others. 

A spokesperson for Payoneer said the company takes its compliance responsibilities “very seriously” and that it maintains “a robust regulatory 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,” the spokesperson said.

“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.”

—Updated at 3:16 p.m.