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Financial Services Law Insights and Observations


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  • Treasury implements humanitarian sanctions exceptions

    On December 21, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced that it co-led, with Ireland, the development of UNSCR 2664, which implements a carveout from the asset freeze provisions of UN sanctions programs. OFAC noted that to implement the policy across U.S. sanctions programs, it issued or amended general licenses (GLs) to ease the delivery of humanitarian aid and ensure a baseline of authorizations for the provision of humanitarian support across many sanctions programs. The GLs being issued or amended provide authorizations in: (i) the official business of the U.S. government (see here); (ii) the official business of certain international organizations and entities (see here); (iii) certain humanitarian transactions in support of activities of nongovernmental organizations (NGOs), such as disaster relief, health services, and activities to support democracy, education, environmental protection, and peacebuilding (see here); and (iv) the provision of agricultural commodities, medicine, and medical devices, as well as replacement parts and components and software updates for medical devices, for personal, non-commercial use (see here). OFAC also noted that it is separately updating a regulatory interpretation in several sanctions programs’ regulations to explain that the property and interests in property of an entity are blocked if one or more blocked persons own, whether individually or in the aggregate, directly or indirectly, a 50 percent or greater interest in the entity. These changes are effective immediately. OFAC is also publishing four new Frequently Asked Questions (FAQs 1105, 1106, 1107 and 1108), which provide further guidance on the action and the authorizations being issued or amended, including guidance for financial institutions facilitating activity for NGOs and OFAC’s due diligence expectations. According to OFAC, these historic steps “further enable the flow of legitimate humanitarian assistance supporting the basic human needs of vulnerable populations while continuing to deny resources to malicious actors.”

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

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  • FTC seeks feedback on commercial surveillance and data security rulemaking

    On August 11, the FTC announced that it issued an advanced notice of proposed rulemaking (ANPR) on a wide range of concerns about commercial surveillance practices. According to the FTC, it is exploring “rules to crack down on harmful commercial surveillance and lax data security.” The FTC described that commercial surveillance is the business of collecting, analyzing, and profiting from information about individuals. The FTC also noted that “[m]ass surveillance has increased the risks and stakes of data breaches, deception, manipulation, and other abuses.” The ANPR solicits public comment regarding “the harms stemming from commercial surveillance and whether new rules are needed to protect people’s privacy and information.” The ANPR also noted that there is increasing evidence that some surveillance-based services may be addictive to children and lead to a wide variety of mental health and social harms. The FTC also released a Fact Sheet on the FTC’s Commercial Surveillance and Data Security Rulemaking and a Fact Sheet on Public Participation in the Section 18 Rulemaking Process. Comments are due 60 days after publication in the Federal Register.

    Agency Rule-Making & Guidance Federal Issues Privacy, Cyber Risk & Data Security FTC Federal Register

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  • Treasury official says it’s time to reconsider “culture of compliance”

    On March 21, the U.S. Treasury Department’s Assistant Secretary for Terrorist Financing and Financial Crimes Elizabeth Rosenberg delivered remarks before the Association of Certified Anti-Money Laundering Specialists (ACAMS) Hollywood Conference, asking attendees to consider “[w]hat must a culture of compliance look like in a world where autocracy is on the rise” and how financial institutions should adapt their Bank Secrecy Act/anti-money laundering (AML) obligations to ensure they are effective. Rosenberg praised the quick responses taken by financial institutions and financial service providers in implementing the growing list of sanctions against Russia and Russian President Vladimir Putin’s support structure in light of the recent invasion of Ukraine. “Russia’s war has meaningfully expanded AML and sanctions obligations,” Rosenberg cautioned, stressing it was time for an updated approach to considering and managing risk. “Geopolitical events are evolving fast, and we need financial institutions more than ever to act swiftly as we in the government are pushing out new designations and advisories almost daily.” She instructed attendees to “think about risk and enhanced due diligence when it comes to Russian oligarchs and kleptocrats who may not have been priorities for [entities’] compliance efforts in early February but are now crucial players, supporting Putin’s power structure.”

    Rosenberg further noted that Treasury’s efforts would be aided if public and private sectors were faster about sharing information and if information sharing was improved “across borders, between financial institutions, and with the government.” Closing money laundering and global passport loopholes through which sanctioned actors can move funds and assets around the globe is also critical, Rosenberg stated. She also highlighted the U.S. government’s recent collaboration with foreign partners to help countries effectively take measures to “find, restrain, freeze, and where appropriate, to confiscate the assets of those who have been sanctioned in connection with Russia’s invasion of Ukraine.” These multilateral efforts include the recent launch of the Russian Elites, Proxies, and Oligarchs multilateral task force, and Treasury’s Kleptocracy Asset Recovery Rewards Program, as well as recently issued FinCEN advisories to help compliance officials better identify Russian sanctions evasion and suspicious financial activity including through real estate, luxury goods, and other high-value assets. (Covered by InfoBytes here.)

    Find continuing InfoBytes coverage on the U.S. sanctions response to Russia’s invasion of Ukraine here.

    Financial Crimes Of Interest to Non-US Persons Department of Treasury OFAC OFAC Sanctions OFAC Designations Russia Ukraine Ukraine Invasion Bank Secrecy Act Anti-Money Laundering Compliance

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