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  • OFAC sanctions Iranian entities and individuals supporting intelligence gathering and cyber targeting of U.S. persons

    Financial Crimes

    On February 13, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against an Iran-based entity and four affiliated Iranian individuals for their alleged roles in providing support for the Islamic Revolutionary Guard Corps-Qods Force’s (IRGC-QF) efforts to recruit and collect intelligence from foreign attendees of international conferences, including facilitating contact between the IRGC-QF and U.S. persons. According to OFAC, the sanctions were issued pursuant to Executive Order 13224, which authorizes “the U.S. government to designate and block the assets of foreign individuals and entities that commit, or pose a significant risk of committing, acts of terrorism.” The same day, OFAC also sanctioned a separate Iran-based entity and six associated individuals, pursuant to Executive Order 13606, for their alleged involvement in the cyber targeting of current and former U.S. government and military personnel, in an effort to gain access to their computer systems and implant malware.

    As a result of the OFAC sanctions, all property and interests in property belonging to the identified individuals and entities and subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from entering into transactions with the individuals and entities. Additionally, OFAC notes that “any foreign financial institution that knowingly facilitates a significant transaction or provides significant financial services for any of the persons designated today pursuant to E.O. 13224 or that are Iranian persons on OFAC’s list of Specially Designated Nationals and Blocked Persons . . . could be subject to U.S. correspondent account or payable-through sanctions.”

    Visit here for additional recent InfoBytes coverage of actions related to Iran.

    Financial Crimes OFAC Department of Treasury Iran Sanctions Of Interest to Non-US Persons

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  • U.S. Treasury concerned with European Commission's identification of AML/CFT-deficient U.S. territories

    Financial Crimes

    On February 13, the U.S. Treasury Department issued a statement responding to a list of jurisdictions published by the European Commission as having strategic deficiencies related to anti-money laundering and countering the financing of terrorism (AML/CFT). The list—which includes certain jurisdictions with strategic deficiencies that were already identified by the Financial Action Task Force (FATF) (see previous InfoBytes coverage here)—also identifies 11 additional jurisdictions, including the U.S. territories of American Samoa, Guam, Puerto Rico, and the U.S. Virgin Islands. According to the European Commission, the “banks and other entities covered by EU anti-money laundering rules will be required to apply increased checks (due diligence) on financial operations involving customers and financial institutions from these high-risk third countries to better identify any suspicious money flows.”

    In its response, the Treasury Department stated that it has “significant concerns about the substance of the list and the flawed process by which it was developed,” noting that the same AML/CFT legal framework that applies to the continental U.S. also generally extends to its territories. Treasury said it does not expect U.S. financial firms to take account of the European Commission’s list in their AML/CFT policies and procedures, and stressed that the FATF already develops a list of high-risk jurisdictions “as part of a careful and comprehensive process,” which does not list the U.S. territories.

    Financial Crimes Department of Treasury European Union Of Interest to Non-US Persons Anti-Money Laundering Combating the Financing of Terrorism FATF

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  • OFAC amends Venezuela-related General Licenses and FAQs on sanctioned oil company

    Financial Crimes

    On February 11, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) amended two General Licenses (GL) and issued three revised FAQs regarding sanctions against Venezuela’s state-owned oil company pursuant to Executive Order 13850. GL 3C, which supersedes GL 3B, authorizes transactions related to, provision of financing for, and other dealings in certain bonds, provided the divestment or transfer (including the facilitation) of any holdings of these bonds are to a non-U.S. person. GL 9B, which supersedes GL 9A, authorizes certain transactions related to securities issued prior to August 25, 2017 by the oil company and its subsidiaries. Additionally, OFAC issued revised FAQs 650, 661, and 662 to provide additional clarification on expected levels of due diligence, as well as implications for U.S. and non-U.S. persons.

    Visit here for additional InfoBytes coverage of actions related to Venezuela.

    Financial Crimes OFAC Department of Treasury Venezuela Sanctions Of Interest to Non-US Persons

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  • OFAC designates Turkish individual as “Foreign Sanctions Evader” in relation to settlement resolving alleged Iranian sanctions violations

    Financial Crimes

    On February 7, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a $13,381 settlement with a Virginia-based corporation on behalf of its Turkish affiliate for six alleged violations of the Iranian Transactions and Sanctions Regulations (ITSR). The settlement resolves potential civil liability for the Turkish affiliate’s alleged practice of dispatching employees to Iran to fulfill service agreements and providing products, parts, and services while knowing that they were going to Iranian end-users. OFAC’s findings included that the Turkish affiliate willfully took steps to continue its Iranian business despite the Virginia corporation’s “extensive efforts to ensure [the affiliate] complied with the ITSR,” and “fraudulently certified” that no Iranian business was continuing.

    In arriving at the settlement amount, OFAC considered the following aggravating factors: (i) the Turkish affiliate violated Iranian sanctions by “willfully provid[ing] goods and services to Iran”; (ii) the Turkish affiliate’s management was aware of and directed its employees’ actions; (iii) the Turkish affiliate’s management took actions to delete and falsify records in an attempt to conceal the apparent violations; and (iv) the violations economically benefitted Iran.

    OFAC also considered numerous mitigating factors, including (i) neither the Virginia corporation nor the Turkish affiliate had received a penalty or finding of a violation in the five years prior to the transactions at issue; (ii) the Virginia corporation voluntarily self-disclosed the apparent violations and conducted an extensive internal investigation; and (iii) the Virginia corporation took “extensive preventative and remedial” measures.

    In a concurrent action the same day, OFAC sanctioned a Turkish individual as a “Foreign Sanctions Evader,” pursuant to Executive Order 13608, for allegedly instructing the Turkish affiliate to violate the Iranian sanctions. According to OFAC, the sanctioned individual “regularly and fraudulently” certified to the Virginia corporation that no products were being sent to Iran. Additionally, OFAC claims that upon learning of the corporation’s internal investigation, the individual and other members of the Turkish affiliate’s management team attempted to conceal the apparent violations. As a result, all direct and indirect transactions involving the individual intended for the U.S., or provided by or to U.S. persons, are prohibited. Moreover, U.S. financial institutions are instructed to reject payments involving the identified individual.

    View here for additional InfoBytes coverage of actions related to Iran.

    Financial Crimes OFAC Department of Treasury Settlement Iran Sanctions Of Interest to Non-US Persons

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  • OFAC revises Venezuela-related General Licenses on sanctioned oil company, issues new FAQs

    Financial Crimes

    On February 1, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) amended two General Licenses (GL) and issued two new FAQs regarding sanctions against Venezuela’s state-owned oil company pursuant to Executive Order 13850.

    OFAC amended GL 3B to authorize transactions related to, provision of financing for, and other dealings in certain bonds. GL 9A, which supersedes GL 9, authorizes certain transactions related to securities issued prior to August 25, 2017 by the oil company and its subsidiaries. GL 9A and related FAQ 661 clarify that trades in the oil company’s securities placed prior to 4:00 pm EST on January 28, 2019, are generally authorized “to settle in the ordinary course, irrespective of whether the sale or transfer is to a non-U.S. person.”

    Visit here for additional InfoBytes coverage of Venezuela actions.

    Financial Crimes OFAC Department of Treasury Sanctions Venezuela Of Interest to Non-US Persons

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  • OFAC reaches settlement with cosmetics company for alleged North Korean sanctions violations

    Financial Crimes

    On January 31, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a $996,080 settlement with a California-based cosmetics company for 156 alleged violations of the North Korean Sanctions Regulations. According to OFAC, the settlement resolves potential civil liability for the company’s alleged involvement in the importation of goods from two Chinese suppliers containing materials sourced from North Korea.

    In arriving at the settlement amount, OFAC considered the following as aggravating factors: (i) the alleged violations may have resulted in the North Korean government gaining control of U.S.-origin funds; (ii) the company is “large and commercially sophisticated [and] engages in a substantial volume of international trade”; and (iii) during the period of the alleged activity, the company’s compliance program, which was either non-existent or inadequate, failed to have “exercised sufficient supply chain due diligence” in its sourcing of products from a region posing a high risk to the effectiveness of the North Korean Sanctions Regulations.

    OFAC also considered numerous mitigating factors, including (i) company personnel did not have actual knowledge of the suppliers’ conduct; (ii) the company has not received a penalty or finding of a violation in the five years prior to the transactions at issue; (iii) the alleged violations are not a large part of the company’s business; and (iv) the company voluntarily self-disclosed the apparent violations and cooperated with OFAC’s investigation. In addition, the company has adopted an enhanced compliance program to lower the risk of recurrence of similar conduct in the future.

    Visit here for additional InfoBytes coverage on North Korea sanctions.

    Financial Crimes OFAC Department of Treasury Sanctions Settlement North Korea Of Interest to Non-US Persons

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  • OFAC announces sanctions against Venezuela’s state-owned oil company; President Trump issues related Executive Order

    Financial Crimes

    On January 28, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against Venezuela’s state-owned oil company pursuant to Executive Order 13850 (E.O. 13850). According to OFAC, the designation follows a determination made by the Secretary of the Treasury that persons who operate in the oil sector of the Venezuelan economy are subject to sanctions pursuant to E.O. 13850, which was issued in order to “help prevent further diverting of Venezuela’s assets by Maduro and preserve these assets for the people of Venezuela.” As a result, all assets belonging to the company subject to U.S. jurisdiction are blocked, and U.S. persons generally are prohibited from dealing with the company. However, OFAC concurrently issued eight new General Licenses (GL), and amended GL 3, in order to authorize certain transactions with the company and identified subsidiaries, including those necessary to wind down operations or existing contracts. Specifically, GL 7 and GL 12 permit Venezuelan oil to be imported into the U.S. through April 28, provided any payments made to the company or its majority-owned subsidiaries (minus certain identified exceptions) be made into a blocked, interest-bearing account located in the U.S.

    In a separate action the same day, President Trump issued an Executive Order to, among other things, expand the definition of “Government of Venezuela” to include the Central Bank of Venezuela, the state-owned oil company, and “any person who has acted or purported to act directly or indirectly for or on behalf of” the Government of Venezuela, including members of the Maduro regime. The E.O. is issued in conjunction with E.O.s 13692, 13808, 13827, 13835, and 13850. In connection with the issuance of the new E.O., OFAC published a FAQ explaining E.O.’s impact on Venezuela-related sanctions, which all remain in effect.

    Visit here for additional InfoBytes coverage of Venezuela actions and E.O.s.

    Financial Crimes OFAC Department of Treasury Sanctions Venezuela Trump Executive Order Of Interest to Non-US Persons

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  • OFAC lifts sanctions on designated companies linked to Russian oligarch

    Financial Crimes

    On January 27, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) lifted sanctions on three companies identified last April in connection with sanctions imposed against a Russian oligarch. (See previous InfoBytes coverage here on the full list of sanctioned Russian oligarchs and government officials.) Under the terms of removal from OFAC’s Specially Designated Nationals and Blocked Persons List (SDN List), the companies reduced the sanctioned Russian oligarch’s “direct and indirect shareholding stake in these companies and severed his control.” The majority of directors on the companies’ boards going forward will be independent directors and include U.S. and European persons with no ties to identified persons on the SDN List. OFAC reports that the companies “have also agreed to unprecedented transparency for Treasury into their operations by undertaking extensive, ongoing auditing, certification, and reporting requirements.” The sanctions imposed against the Russian oligarch remain in place.

    Visit here for additional InfoBytes coverage on Ukraine/Russian sanctions.

    Financial Crimes OFAC Department of Treasury Sanctions Russia Of Interest to Non-US Persons

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  • OFAC issues temporary extension of Ukraine-related General Licenses

    Financial Crimes

    On January 16, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced the issuance of Ukraine-related General Licenses (GL) 13J, 14E, and 16E, which modify the expiration dates of previous Ukraine-based general licenses for wind-down transactions for certain companies that otherwise would be prohibited by Ukraine-Related Sanctions Regulations.

    GL 13J supersedes GL 13I and authorizes, among other things, activities and transactions “ordinarily incident and necessary” for (i) the divestiture of the holdings of specified blocked persons to a non-U.S. person; and (ii) the facilitation of transfers of debt, equity, or other holdings involving specified blocked persons to a non-U.S. person. GL 14E, which supersedes GL 14D, relates to specific wind-down activities involving a Russian aluminum producer sanctioned last April as previously covered by InfoBytes here. GL 16E supersedes GL 16D and authorizes permissible activities with the designated company and its subsidiaries, and applies to the maintenance and wind-down of operations, contracts, and agreements that were effective prior to April 6.

    Financial Crimes Sanctions OFAC Department of Treasury Ukraine International Of Interest to Non-US Persons

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  • OFAC adds illicit foreign exchange operation participants to Specially Designated Nationals List; issues Venezuela-related General License and new FAQ

    Financial Crimes

    On January 8, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced additions to the Specially Designated Nationals List pursuant to Executive Order 13850. OFAC’s additions to the list include seven individuals—including former Venezuelan government officials—and 23 entities for their participation in a bribery scheme involving the Venezuelan Office of the National Treasury in order to conduct illicit foreign exchange operations in the country. According to OFAC, the designated persons engaged in transactions involving deceptive practices and corruption, including wiring payments that were “hidden behind a sophisticated network of U.S. and foreign companies that hid the individuals’ beneficial ownership.” As a result, all assets belonging to the identified individuals and entities subject to U.S. jurisdiction are blocked, and U.S. persons generally are prohibited from dealing with them.

    Concurrently, OFAC issued Venezuela-related General License 6 (GL 6) to allow U.S. persons to engage in otherwise prohibited wind-down transactions with two of the designated companies through January 8, 2020. Specifically, GL 6 authorizes certain activities with the designated companies relating to the maintenance and wind-down of operations, contracts, and agreements that were effective prior to January 8, 2019. OFAC also published a new FAQ to provide additional guidance on the types of activities considered “maintenance” under GL 6.

    As FCPA Scorecard previously reported, the owner was indicted under seal in August for conspiracy to violate the FCPA, conspiracy to commit money laundering, and nine counts of money laundering.

    Visit here for additional InfoBytes coverage on Venezuela sanctions.

    Financial Crimes Sanctions OFAC Department of Treasury Venezuela International Of Interest to Non-US Persons

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