New York insurance company slapped fine for North Korean business dealings
A marine insurance company based in New York has been slapped fines for violating the U.S. sanctions against North Korea, Cuba and Iran. The insurance provider, Navigators Group Inc., admitted its mistake of having provided North Korean vessels with marine insurance. This has been revealed in a statement by the U.S. Treasury's Office of Foreign Assets Control.
According to OFAC, Navigators committed 48 violations. The violation with respect to North Korea is under Executive Order No. 13466 besides violations of sanctions with respect to Iran, Cuba and Sudan. The insurance firm has been ordered to pay US$271,000 (AU$ 370, 000), slashed from the initial penalty of US$750,000 (AU$10,24, 000) on account of its coperation with the investigation.
“Navigators managers and supervisors knew or had reason to know that the majority of the insurance policies and claims payments at issue involved OFAC-sanctioned countries,” the department said in the statement. It said Navigators did not have a formal OFAC compliance program at the time of committing the apparent violations.”
The penalty notice by OFAC noted that the New York-based maritime insurance firm along with its London branch issued global protection and indemnity insurance policies between May 2008 and April 2011 and provided coverage to North Korean-flagged vessels and got involved with Iran, Sudan or Cuba. Some of its dealings led to claims payments, reports Wall Street Journal.
Voluntary information
The OFAC also noted that it slashed the penalty against the insurer after it voluntarily disclosed information about the violations and cooperated with the investigators. According to sources, Navigators earned US$1.1 million (AU$1.5 million) in insurance premiums between 2008 and 2011 from 24 individual policies for North Korea vessels. The firm delivered US$12,000 (AU$16, 000) in payouts between 2009 and 2010.
It may be recalled that despite sanctions, North Korean ships had been active at sea. In 2014, a North Korean ship was stranded on a reef, naer Veracruz in Mexico. The ship's personnel were detained by Mexico but released later after long negotiations with Pyongyang.
Crack down
The U.S. regulators had been cracking down on companies having business ties with nations, designated as state sponsors of terrorism, including Iran. For example, in 2014, Chubb Corp. had to distance itself from the insurance adjusters in Sudan and Syria after a government inquiry and it said the personnel were surveyors not representatives of the company. In the case of Navigators, the voluntary self-reporting of the issues to the regulators helped. According to Emily Miner, general counsel for the insurer, the company has started implementing a comprehensive compliance program.
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