Denied Party Digest

Valuable information about denied party screening

On November 25, 2019, the Office of Foreign Assets Control (OFAC) announced a $466,912 settlement with Apple, Inc. "for apparent violations of the Foreign Narcotics Kingpin Sanctions Regulations."

The background for the settlement starts in 2008, when Apple entered into an app development agreement with SIS, d.o.o. of Slovenia.  In 2015, SIS and its majority owner Savo Stjepanovic were added to the SDN list as significant foreign narcotics traffickers (SDNTK).  Once designated, Apple did not identify the company as an SDN:

Apple later attributed this failure to its sanctions screening tool’s failure to match the upper case name “SIS DOO” in Apple’s system with the lower case name “SIS d.o.o.” as written on the SDN List. The term “d.o.o.” is a standard corporate suffix in Slovenia identifying a limited liability company.

In addition, Savo Stjepanovic was listed in Apple's system as an account administrator.  Apple screened "developers" at the time, but not all individuals listed in App Store accounts.

Apple discovered the SDN matches after enhancing its screening tool and processes in 2017. SIS and Stjepanovic were subsequently removed from the SDN list later that year.

The takeaway: screen carefully and screen everyone you can.

Screening tip: it may often be helpful to omit corporate suffixes in screening and focus on the distinct company name.