The Office of Foreign Assets Control under the U.S. Treasury Department flagged North Quincy, Mass.-based State Street Bank & Trust Co. for violating sanctions on Iran but did not impose a monetary penalty, as the company reported the deficiency and made improvements in its systems.

OFAC said between Jan. 1, 2012, to Sept. 1, 2015, the State Street Corp. unit processed at least 45 pension payments for an employee retirement plan of a customer who was a U.S. citizen with a U.S. bank account but was a resident in Iran. The regulator also noted that the unit's systems produced alerts on each transaction because of the address in Tehran and that personnel overseeing the beneficiary payments used their own sanctions screening system instead of relying on State Street Bank & Trust's centralized system.

State Street Bank & Trust reported the deficiencies in 2015 and made improvements, such as ensuring all retiree services payments would be screened under its centralized system and alerts on transactions that could violate sanctions are handled through a central alert dispositioning process.

In its decision not to impose a monetary penalty, OFAC considered other factors, including the possibility that the payments may not have actually been transferred to Iran, the fund transfers could have become licensed and that its screening system actually flagged the transactions for potential sanctions violations.