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  • OFAC sanctions Mexican cartel commander

    Financial Crimes

    On April 14, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to the Foreign Narcotics Kingpin Designation Act against a regional commander responsible for controlling territory belonging to a major Mexico-based drug trafficking cartel. OFAC noted that the action was taken in coordination with the State Department and DOJ, which unsealed an indictment against the sanctioned individual. Acting Assistant Attorney General Nicholas L. McQuaid emphasized that the designation and indictment “show that the [DOJ], together with our law enforcement partners, will aggressively investigate and criminally prosecute the violent cartels and kingpins who import illegal drugs into our communities.” According to OFAC, this designation is the agency’s fourteenth action taken against the Mexico-based drug trafficking cartel (see previous InfoBytes coverage here). As a result of the sanctions, all property and interests in property belonging to the sanctioned individual subject to U.S. jurisdiction are blocked and must be reported to OFAC. U.S. persons are also generally prohibited from engaging in any dealings involving the property or interests in property of blocked or designated persons.

    Financial Crimes Department of Treasury OFAC Sanctions OFAC Designations Of Interest to Non-US Persons SDN List Mexico

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  • Biden order authorizes sanctions authority covering Russian activities

    Financial Crimes

    On April 15, the Biden administration announced several actions intended to block property with respect to specified harmful foreign activities by the Russian government, including the issuance of Executive Order (E.O.) Blocking Property With Respect To Specified Harmful Foreign Activities Of The Government Of The Russian Federation. Specifically Directive 1 to the E.O. provides that, at the determination of the acting director of the Office of Foreign Assets Control (OFAC) and in consultation with the State Department, U.S. financial institutions are prohibited from:

    • Participating “in the primary market for ruble or non-ruble denominated bonds issued after June 14, 2021 by the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation”; and
    • “Lending ruble or non-ruble denominated funds to the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation.”

    These actions are prohibited as of June 14, 2021, “except to the extent provided by law or unless licensed or otherwise authorized by [OFAC].” For purposes of the Directive, a “U.S. financial institution” is defined as “any U.S. entity (including its foreign branches) that is engaged in the business of accepting deposits, making, granting, transferring, holding, or brokering loans or other extensions of credit, or purchasing or selling foreign exchange, securities, commodity futures or options, or procuring purchasers and sellers thereof, as principal or agent.” This term also includes branches, offices, and agencies of foreign financial institutions located in the U.S., but does not include such institutions’ foreign branches, offices, or agencies.

    In conjunction with the issuance of the new E.O., OFAC also published several new and updated FAQs and added several individuals and entities to OFAC’s list of Specially Designated Nationals. The new additions include sanctions taken against (i) several Russian technology companies that support the Russian Intelligence Services, which OFAC stated are responsible for having “executed some of the most dangerous and disruptive cyber attacks in recent history”; (ii) five individuals and three entities related to Russia’s occupation of the Crimea region of Ukraine pursuant to E.O.s 13660 and 13685; and (iii) 16 entities and 16 individuals that attempted to influence the 2020 U.S. presidential election at the direction of Russian government leadership.

    As a result of the sanctions, all of the property and interests in property of the designated persons that are in the United States or in the possession or control of U.S. persons, as well as any entities that are owned 50 percent or more by the designated persons, are blocked and must be reported to OFAC. Additionally, OFAC regulations generally prohibit U.S. persons from participating in transactions with the designated persons unless exempt or otherwise authorized by an OFAC general or specific license. In its announcement, OFAC further warned that “foreign persons that knowingly engage in a significant transaction or transactions with the persons designated today may themselves face the risk of designation,” and emphasized that “financial institutions and other persons that engage in certain transactions or activities with the sanctioned entities and individuals may expose themselves to secondary sanctions or be subject to an enforcement action.”

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

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  • OFAC amends FAQs on Sudan sanctions

    Financial Crimes

    On April 12, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) published amended frequently asked questions related to the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA) and the Sudan Program and Darfur Sanctions. FAQs 97 and 98 clarify TSRA licensing application options and steps, which require that applicants provide all relevant information for parties, including financial institutions and purchasing agents, that may be involved in the proposed transactions. FAQ 500 explains that persons are no longer required to obtain specific licenses from OFAC to export or reexport agricultural commodities, medicines, or medical devices to Sudan. Finally, FAQ 836 states that U.S. persons are no longer prohibited from engaging in transactions with respect to Sudan or the Government of Sudan that were previously prohibited by the Sudanese Sanctions Regulations, 31 C.F.R. part 538.

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

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  • OFAC sanctions Burmese gem enterprise

    Financial Crimes

    On April 8, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 14014 against a Burmese state-owned entity responsible for all gemstone activities in Burma. According to OFAC, gemstones are a “key economic resource for the Burmese military regime that is violently repressing pro-democracy protests” and is accountable for the continuing deadly attacks against the people of Burma. As a result of the sanctions, all property and interests in property of the entity in the U.S. or in the possession or control of U.S. persons are blocked and must be reported to OFAC. Additionally, “any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked.” U.S. persons are generally prohibited from engaging in any dealings involving the property or interests in property of blocked or designated persons, unless exempt or authorized by a general or specific license.

    Financial Crimes OFAC Department of Treasury Sanctions Burma Of Interest to Non-US Persons OFAC Designations SDN List

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  • OFAC sanctions Pakistan-based transnational human smuggling organization

    Financial Crimes

    On April 7, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13581, “Blocking Property of Transnational Criminal Organizations,” against a Pakistani national and a transnational criminal organization (TCO). In addition, OFAC designated three individuals and one entity associated with the TCO. According to OFAC, Treasury’s designation of this human smuggling organization as a significant TCO is an “important step taken alongside our partners, towards disrupting . . . operations based in Pakistan and around the world.” As a result of the sanctions, all assets belonging to the designated persons that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. U.S. persons are generally prohibited from engaging in dealings involving any property or interests in property of the blocked or designated persons.

     

    Financial Crimes Department of Treasury OFAC Sanctions OFAC Designations Pakistan SDN List Of Interest to Non-US Persons

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  • OFAC sanctions Mexican cartel members and facilitator

    Financial Crimes

    On April 6, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to the Foreign Narcotics Kingpin Designation Act against two members of a major Mexico-based drug trafficking cartel, along with another individual responsible for facilitating travel related to the illicit activities for senior cartel members and their allies. In addition, OFAC designated two businesses located in Mexico. According to OFAC, the designations serve as “a reminder that Treasury will continue to sanction those providing support to [the cartel], whether that person is a violent actor or a complicit businessperson.” As a result of the sanctions, all property and interests in property belonging to the sanctioned individuals and entities subject to U.S. jurisdiction are blocked and must be reported to OFAC. U.S. persons are also generally prohibited from engaging in any dealings involving the property or interests in property of blocked or designated persons.

    Financial Crimes Department of Treasury OFAC Sanctions OFAC Designations SDN List Of Interest to Non-US Persons Mexico

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  • OFAC issues new Syria sanctions FAQs

    Financial Crimes

    On April 5, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) published two new Syria Frequently Asked Questions, FAQs 884 and 885. FAQ 884 relates to non-U.S. persons’, including nongovernmental organizations’ (NGOs) and foreign financial institutions’ exposure to U.S. secondary sanctions pursuant to the Caesar Syria Civilian Protection Act of 2019 (Caesar Act) for activities that would be authorized under the Syrian Sanctions Regulations (SySR), while FAQ 885 governs whether U.S. and non-U.S. persons (including NGO and foreign financial institutions) may facilitate certain humanitarian assistance to Syria without the risk of sanctions. OFAC clarified, among other things, that “non-U.S. persons, including NGOs and foreign financial institutions, would not risk exposure to sanctions under the Caesar Act for engaging in activity, or facilitating transactions and payments for such activity, that is authorized for U.S. persons under a general license (GL) issued pursuant to the SySR.” With respect to certain humanitarian assistance, OFAC explained that “[t]he export of U.S.-origin food and most medicines to Syria is not prohibited and does not require a Department of Commerce Bureau of Industry and Security (BIS) or OFAC license, and therefore non-U.S. persons would not risk exposure to sanctions under the [Caesar Act] for engaging in such activity.”

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

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  • FinCEN seeks comments on beneficial ownership reporting

    Financial Crimes

    On April 1, FinCEN issued an advanced notice of proposed rulemaking (ANPRM) seeking comments on a range of issues related to the implementation of the beneficial ownership information requirements under the Corporate Transparency Act (CTA). As previously covered by InfoBytes, the CTA is included within the Anti-Money Laundering Act of 2021, which was enacted in January as part of the National Defense Authorization Act for Fiscal Year 2021. Among other things, the ANPRM requests comments on reporting procedures and standards for entities to submit information to FinCEN about their beneficial owners, as well as input on FinCEN’s implementation of related CTA provisions “that govern FinCEN’s maintenance and disclosure of beneficial ownership information subject to appropriate protocols.” According to FinCEN, the CTA amended the Bank Secrecy Act “to require corporations, limited liability companies, and similar entities to report certain information about their beneficial owners (the individual natural persons who ultimately own or control the companies).” The CTA also requires FinCEN to develop a secure, non-public database to house collected beneficial ownership information, and authorizes FinCEN to disclose beneficial ownership information to several categories of recipients, including federal law enforcement. Moreover, FinCEN is required to revise existing financial institution customer due diligence regulations concerning beneficial ownership to incorporate the new direct reporting of beneficial ownership information.

    Comments on the ANPRM should be submitted by May 5.

    Financial Crimes FinCEN Agency Rule-Making & Guidance Of Interest to Non-US Persons Anti-Money Laundering Act of 2020 Anti-Money Laundering Bank Secrecy Act Beneficial Ownership

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  • U.S.-EU release statement on Joint Financial Regulatory Forum

    Financial Crimes

    On March 24 and 25, EU and U.S. participants, including officials from the Treasury Department, Federal Reserve Board, CFTC, FDIC, SEC, and OCC, participated in the U.S.-EU Joint Financial Regulatory Forum to discuss topics of mutual interest, including those related to (i) “next steps” for Covid-19 recovery and for mitigating financial stability risks; (ii) “sustainable finance”; (iii) banking and insurance multilateral and bilateral engagement; (iv) capital market regulatory and supervisory cooperation; (v) regulatory and supervisory developments pertaining to financial innovation, including the importance of promoting ongoing “responsible innovation and international supervisory cooperation”; and (vi) anti-money laundering and countering the financing of terrorism (AML/CFT) issues, including “the potential for enhanced cooperation to combat money laundering and terrorist financing bilaterally and in the framework of [the Financial Action Task Force].” Participants also discussed possible responses to climate-related financial risks, as well as “the progress in their respective legislative and supervisory efforts to ensure a smooth transition away from LIBOR.”

    Financial Crimes Department of Treasury OFAC EU Of Interest to Non-US Persons Covid-19 Climate-Related Financial Risks Fintech Anti-Money Laundering Combating the Financing of Terrorism LIBOR

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  • OFAC sanctions Burmese military holding companies

    Financial Crimes

    On March 25, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order (E.O.) 14014 against two military holding companies in Burma. According to OFAC, these sanctions specifically target “the Burmese military’s control of significant segments of the Burmese economy.” As a result of the sanctions, all property and interests in property belonging to the sanctioned entities subject to U.S. jurisdiction, which enjoy a privileged position in the Burmese economy, are blocked and must be reported to OFAC. Additionally, “any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked.” U.S. persons are generally prohibited from engaging in any dealings involving the property or interests in property of blocked or designated persons.

    Concurrent with the sanctions, OFAC issued four general licenses (GL) and related FAQs: (i) GL 1, “Official Business of the United States Government”; (ii) GL 2, “Official Activities of Certain International Organizations and Other International Entities”; (iii) GL 3, “Certain Transactions in Support of Nongovernmental Organizations’ Activities”; and (iv) GL 4, “Authorizing the Wind Down of Transactions Involving Myanmar Economic Corporation and Myanma Economic Holdings Limited.” GLs 1, 2, and 3 authorize certain transactions prohibited by E.O. 14014 that are associated with, respectively, the official business of the U.S. government, the official business of certain international organizations and other international entities, and certain nongovernmental organizations’ activities. GL 4 authorizes, through June 22, transactions and activities ordinarily incident to the wind down of transactions involving the two sanctioned companies as well as any entity owned by 50 percent or more of the sanctioned companies. Additionally, FAQ 882 clarifies which organizations within the United Nations’ programs are covered by GL 2, whereas FAQ 883 stipulates that “wind down transactions may be processed through the U.S. financial system or involve U.S. persons, as long as the transactions comply with the terms and conditions in GL 4.”

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

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