Israeli fintech company Payoneer (Nasdaq: PAYO), which was listed on Nasdaq a few weeks ago, will pay $1.4 million in a settlement with the US Department of the Treasury after its platform carried out payments in breach of sanctions.
According to the announcement by the Department of the Treasury, 2,260 apparent violations of sanctions were discovered. "Payoneer processed 2,241 payments for parties located in certain jurisdictions and regions subject to sanctions including the Crimea region of Ukraine, Iran, Sudan, and Syria, and 19 payments on behalf of sanctioned persons on OFAC’s List of Specially Designated Nationals and Blocked Persons," the statement by the Office of Foreign Assets Control (OFAC), the Department of the Treasury's enforcement agency, said.
The infringements took place between February 2013 and February 2019, and totaled $802,000. The company's policy since 2015 has been to prohibit payments by parties from areas under US sanctions, but checks and audits designed to ensure compliance with the policy failed to detect these transactions, leading to the alleged infringements.
The maximum civil penalty in a case such as this is $3.9 million. OFAC said that Payoneer should have been aware of the locations of the users of its platform, but said in mitigation that as soon as the issue of failure to meet sanctions rules came to light, senior managers of the company acted swiftly to report the breaches relating to specific people on whom sanctions had been imposed and cooperated with the authorities. Payoneer also took the steps required to reduce the risk of similar instances in the future.
The company stated in response: "Payoneer treats very seriously the compliance obligations that apply to it by virtue of various regulations, and we maintain a strong compliance system to which we are committed, and we constantly act to improve it.
"With the discovery of these instances, which took place between 2013 and 2018, and were classed as 'non egregious', Payoneer took immediate action, including substantial investment in technology and manpower to further strengthen the company's compliance system.
"Today, the company's compliance program meets the highest standards in the industry, and is regularly audited by leading global auditors and many financial regulators."
Payoneer was founded in 2005 by Yuval Tal and Yaniv Chechik. It is currently headed by Scott Galit, and has a market cap of $3.4 billion. The company developed a payments platform based on its direct line with the banks.
Goldman Sachs has started to cover the company, giving it a "Neutral" rating, with a price target of $11.5, 13% above the current market price.
Published by Globes, Israel business news - en.globes.co.il - on July 25, 2021
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