Italy-based Mondo TV agreed to pay $538,000 to settle charges with the Treasury Department’s Office of Foreign Assets Control (OFAC) over 18 apparent violations of North Korea sanctions regulations.

OFAC said in a press release Wednesday that Mondo caused U.S. financial institutions to process nearly $538,000 in payments for animation work it outsourced to a North Korea government-owned animation studio.

The agency acknowledged the apparent violations were non-egregious, but noted the company did not voluntarily disclose the alleged misconduct as an aggravating factor.

The details: In the 1990s, Mondo accumulated approximately $1.1 million in outstanding debt to Scientific Educational Korea Studio (SEK), a North Korea government-owned animation studio, according to OFAC’s penalty notice.

In July 2019, SEK and Mondo executed an agreement whereby Mondo would pay SEK in monthly installments for work completed prior to 2016, OFAC said. In 2016, Mondo paused the relationship due to human rights concerns.

In fulfillment of the agreement, between May 2019 and November 2021, Mondo initiated 18 wire transfers that were processed by or settled at U.S. financial institutions, OFAC alleged.

These transfers consisted of 12 payments to a U.S. company’s account at a U.S. bank; one U.S. dollar-denominated transfer that was cleared by a U.S. correspondent bank; and five transfers to a foreign company’s account at a U.S. bank, per the notice.

Additionally, Mondo did not have a sanctions compliance policy at the time, OFAC noted.

Compliance considerations: OFAC acknowledged mitigating factors, including Mondo’s clean record in the past five years and its cooperation with the agency’s investigation by providing additional documents, promptly responding to requests for information, and its substantive assistance supporting broader U.S. government policy objectives.

The agency said the case demonstrates how “non-U.S. persons remitting financial transactions from a foreign jurisdiction to U.S. companies or U.S. financial institutions may expose themselves to civil liability for sanctions violations.”

Additionally, “foreign entities engaged in commercial activities with such parties should be aware of any nexus to the United States and U.S. persons and take efforts to mitigate the attendant risks,” OFAC said, citing a compliance note the agency jointly issued in March with the Department of Justice and Department of Commerce.

Mondo did not immediately respond to a request for comment.

Jeff Dale is Managing Editor, Editorial Projects and Analytics, at Compliance Week. He previously served as Compliance Week's Digital Editor and has worked as a copy editor at the Boston Herald and city editor at The Hour Publishing Co. in Norwalk, Conn.View full Profile

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