Treasury Slaps MasterCard With Flagged Iran Bank Violation

The second-largest U.S. payments network in the United States has found itself in some hot water with the Treasury Department.

MasterCard has received a finding of violation from the Treasury since it failed to report accounts held by two Iranian banks. Both banks have been on a list that prohibits U.S. entities from transacting with them since 2007.

The issue does not seem to be that MasterCard actually failed to block either Bank Melli or Bank Saderat. Both banks had already been restricted by MasterCard as a result of sanctions placed on Iran in 1995, which meant no funds in their accounts could be sent to the banks. However, MasterCard did fail to report the accounts as blocked, which is required, the Treasury’s Office of Foreign Assets Control (OFAC) said in a statement on Wednesday (March 16) on its website.

"MasterCard’s OFAC compliance program appears to have lacked internal controls that would have prevented, or later identified the oversight of, the violations," according to the statement.

In the case of both banks, funds in the accounts never actually made it, thus MasterCard was not fined for the violations.

"We voluntarily alerted OFAC of our inadvertent failure to report assets of two Iranian banks that MasterCard had frozen many years ago," said Seth Eisen, a spokesman for MasterCard. "We take very seriously our compliance obligations and regret that this violation occurred."



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