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OFAC tells AMEX it's been a bit naughty but not to worry too much.

Editorial Staff

According to a statement issued by the USA's Office of Foreign Assets Control (it's primary financial and economic sanctions department which also investigates and takes action in respect of breaches) says this "Between approximately March 26, 2015 and May 19, 2015, American Express Travel Related Services Company (“Amex”) issued a prepaid card to, and processed 41 transactions totalling $35,246.82 on behalf of, Gerhard Wisser,a Specially Designated National (SDN)."

OFAC is a department of the US Treasury. Its Specially Designated National regime is an instruction to those who are subject to the USA's Sanctions provisions (which is a far larger class of persons than one might imagine)

First, a "specially designated national" is a person (legal or natural) which is a citizen of another country. When such a person is listed, all transactions with that person, by anyone subject to the US sanctions regime, are "blocked." That's a buzzword meaning "made illegal unless prior permission i s obtained."

Secondly, if any US individual or "entity" or anyone else that falls within OFAC's reach, deals with such a person, that might result in a civil penalty or a criminal prosecution, depending on a range of factors.

OFAC administers a number of sanctions regimes. The "Specially Designated National" regime is primarily related to those who would commit or have committed terrorism - and those who intelligence indicates are financially or otherwise connected to them. This enables the USA to include a wide range of criminals within the scope of terrorism-related activities.

In the present case, Wisser was designated on 12 January 2009 under the Weapons of Mass Destruction Proliferators Sanctions Regulations. Such designations are as far from secret as it's possible to get without it being written on the back of your hand. Even the most rudimentary of "screening systems" includes a full, up to date, list of those who are designated by OFAC. Indeed, some foreign regulators require banks, etc. in their territories to vet all relevant persons and activities against the OFAC list.

In this case, Wisser, who was not in the USA, applied for an "American Express GlobalTravel Card" via a "non-US bank." AMEX has its own screening system, called Acertify, which it has developed through a wholly own subsidiary, Acertify, Inc. It worked Wisser was identified as being on the OFAC list.

The mechanics of the process were simple: the overseas bank submitted its application to AMEX in the USA. AMEX approved or denied the application. In this case AMEX denied. The overseas bank made several attempts to submit it. That broke Acertify. The details are not clear - it's described as "timing out." Then it went wrong: once it "timed out," the application was automatically approved. So that's fail-safe that wasn't. But there was another one: such approvals were sent for manual checking. No one knows why the clerk reviewing the application failed to identify Wisser as being on the OFAC list but he didn't and he put Wisser into the grammatically dubiously named "Accept List."

OFAC says "In addition to making two initial deposit transactions or “card loads” totalling approximately USD17,655.17 on March 26, 2015, Wisser was able to engage in approximately 39 withdrawal transactions totalling approximately USD17,591.65 (nearly the entire balance on the card) between March 26, 2015,and May 19, 2015,by using his GlobalTravel Card at various ATMs in Germany and the United Arab Emirates."

It is the aggregate of deposits and withdrawals that form the amount in OFAC's action.

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