American stock exchange Nasdaq has agreed to pay a $4m in settlement to the US Department of Treasury over apparent violations of sanctions against Iran.
According to the Office of Foreign Assets Control (OFAC), Nasdaq’s previous foreign subsidiary Nasdaq OMX Armenia violated certain sanction regulations.
The Armenian unit, which previously owned and operated the Armenian Stock Exchange (ASE), has processed payments with the Armenian unit of Iran’s state-owned bank Mellat, through the ASE platform.
OFAC said that Nasdaq OMX Armenia wilfully engaged in the exportation of services to the Iranian government, committing 151 counts of violations of sanctions on Iran.
Nasdaq OMX Armenia knows that Mellat Armenia is one of the 35 ASE member financial institutions working together on credit resource and foreign exchange platforms.
The Armenian Stock Exchange identified Mellat Armenia as a market participant in the ASE’s credit resources and foreign exchange market and listed the bank’s information on its web page.
Neither Nasdaq OMX Armenia nor Nasdaq were believed to have understood the sanctions implications of providing trading and payment processing services to Mellat Armenia.
It continued until September 2014, when Nasdaq identified the sanctions compliance implications of Mellat Armenia’s operations on the platforms it owned and operated.
The New York-based stock exchange voluntarily disclosed the apparent violations to OFAC and subsequently divested its ownership interest in the ASE.
Nasdaq OMX Armenia earned around $16,000 in commissions and fees over the period between December 2012 and September 2014 from processing services for Mellat Armenia.
OFAC statement said: “As a result of its provision of services to Mellat Armenia, Nasdaq OMX Armenia engaged in 151 apparent violations of the Iranian Transactions and Sanctions Regulations (ITSR), 31 C.F.R. § 560.215.
“Under 31 C.F.R. § 560.701(a)(4), a U.S. person is subject to civil penalties if foreign entities it owns, or controls engage in conduct that 31 C.F.R. § 560.215 proscribes.
“Because Nasdaq OMX Armenia’s activities would be prohibited for U.S. persons, Nasdaq is liable for the Apparent Violations of its former foreign subsidiary, Nasdaq OMX Armenia.”
