Enforcement
August 16, 2019

Debt Collection Assignment Triggers Sanctions Violations Settlement

By Samuel Rubenfeld

A Maryland-based subsidiary of Dutch trade credit insurer Atradius N.V. settled a case with the U.S. Treasury Department over apparent violations of sanctions against drug traffickers.

The violations concern the collection of debt from a sanctioned party, according to an enforcement notice issued by the Treasury. The subsidiary didn’t voluntarily self-disclose the violation, and the Treasury deemed the case non-egregious; Atradius Trade Credit Insurance Inc. (ATCI) agreed to pay $345,315 to settle the case, the Treasury said. 

A U.S.-based cosmetics company had, in October 2016, assigned to ATCI the right to collect on a $5.7 million debt owed by Grupo Wisa, S.A., which had been sanctioned in May that year, the enforcement notice said. The cosmetics company is not named in the U.S. notice. ATCI received a payment of about $4 million in June 2017 from the liquidation of Grupo Wisa’s assets in Panama, according to the notice. 

By accepting the assignment and collecting the payment, ATCI “appears to have dealt in property or interests in property of a specially designated narcotics trafficker,” the Treasury said in the notice. “This enforcement action draws particular attention to transactions related to the assignment of [a sanctioned party’s] debt and highlights the importance of obtaining a specific license before engaging in activity that is not otherwise authorized,” the notice said. 

A spokeswoman for ATCI declined to comment.

Grupo Wisa was a holding company for businesses involved in real estate, construction, retail, hospitality and media tied to the Waked Money Laundering Organization (Waked MLO), the Treasury said in May 2016 when announcing the sanctions. The Waked MLO counted Panamanian newspapers, a luxury shopping mall, a bank and duty-free shops among its assets; the U.S. removed the blocks on the newspapers in October 2017 after an ownership transfer.

The Waked MLO used trade-based money laundering schemes to launder drug proceeds on behalf of international traffickers, according to the Treasury. Abdul Mohamed Waked Fares, the family patriarch who led the Waked MLO, in August 2018 lost an attempt in U.S. federal appeals court to access evidence used to justify the U.S. sanctions on him, his family and his companies. 

Nidal Ahmed Waked Hatum, the organization’s co-leader and a nephew of Waked Fares, was arrested in Colombia and later extradited to the U.S., where he pleaded guilty in October 2017 to money laundering conspiracy charges and was sentenced to 27 months in prison. He was released on April 19, 2018, according to U.S. prison records.

 

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