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  • OFAC amends Venezuela-related general license

    Financial Crimes

    On April 3, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued amended Venezuela General License (GL) 13E, which supersedes GL 13D and extends the expiration date through May 14, 2020 for certain transactions involving the identified corporation and any of its subsidiaries that are normally prohibited under Executive Orders (E.O.) 13850, 13857, and 13884. As previously covered by InfoBytes, E.O. 13884, among other things, prevents all property and interest in property of the Government of Venezuela within the U.S. or in the possession of a U.S. person from being transferred, paid, exported, withdrawn, or otherwise dealt in. OFAC notes that the corporation is engaged with OFAC on a proposed corporate restructuring that may result in significant ownership and control changes.

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

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  • FinCEN updates FATF-identified jurisdictions with AML/CFT deficiencies

    Financial Crimes

    On March 26, the Financial Crimes Enforcement Network (FinCEN) issued an advisory on Financial Action Task Force (FATF)-identified jurisdictions with “strategic deficiencies” in their anti-money laundering and combating the financing of terrorism (AML/CFT) regimes. As previously covered by InfoBytes, in February the FATF updated the list of identified jurisdictions to include Albania, Barbados, Burma, Jamaica, Nicaragua, Mauritius, and Uganda, and removed Trinidad and Tobago from the list.

    The FinCEN advisory reminds financial institutions of the February updates and emphasizes that financial institutions should consider both the High-Risk Jurisdictions Subject to a Call for Action and the Jurisdictions under Increased Monitoring documents when reviewing due diligence obligations and risk-based policies, procedures, and practices. Moreover, the advisory includes public statements on the status of, and obligations involving, the Democratic People’s Republic of Korea (DPRK) and Iran. The advisory reminds jurisdictions of the actions the United Nations and the U.S. have taken with respect to sanctioning the DPRK and Iran and emphasizes that “[f]inancial institutions must comply with the extensive U.S. restrictions and prohibitions against opening or maintaining any correspondent accounts, directly or indirectly, for North Korean or Iranian financial institutions.”

    Financial Crimes FinCEN FATF Anti-Money Laundering Of Interest to Non-US Persons

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  • OFAC sanctions front company network for providing financial support to Islamic Revolutionary Guards

    Financial Crimes

    On March 26, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13224 against 20 Iran- and Iraq-based front companies and individuals for providing financial support to the Islamic Revolutionary Guards Corps-Qods Force, as well as certain Iranian-backed terrorist militias in Iraq. Among other activities, OFAC alleged that the designated companies and individuals laundered money through Iraqi front companies, sold Iranian oil to the Syrian regime, and smuggled weapons to Iraq and Yemen. Pursuant to the sanctions, “all property and interests in property of these persons that are in or come within the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.” OFAC noted that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated persons and warned foreign financial institutions that if they knowingly conduct or facilitate significant transactions for any of the designated persons, they may be “subject to U.S. correspondent account or payable-through account sanctions.”

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

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  • DOJ unveils charges against Maduro, Venezuelan government officials

    Financial Crimes

    On March 26, the DOJ announced criminal charges against numerous current and former Venezuelan government officials, including “Former President” Nicolás Maduro Moros and two Fuerzas Armadas Revolucionarias de Colombia (FARC) leaders. The charges include allegedly engaging in drug trafficking, laundering drug proceeds using Florida real estate and luxury goods, corruption, and bribery. According to an unsealed four-count superseding indictment filed in the Southern District of New York, Maduro, along with five other high-ranking officials, participated in a “narco-terrorism conspiracy,” conspired to import large-scale cocaine shipments into the U.S., and used—or conspired to use—“machine guns and destructive devices” to further the narco-terrorism conspiracies. The charges also allege that Maduro and the officials negotiated and facilitated FARC-produced cocaine shipments, coordinated “foreign affairs with Honduras and other countries to facilitate large-scale drug trafficking,” and solicited assistance from FARC leadership with respect to militia training.

    A separate indictment unsealed in the District of Columbia charges the current Venezuelan Minister of Defense with conspiracy to distribute cocaine on a U.S.-registered aircraft. That individual was previously sanctioned in 2018 by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC). (Covered by InfoBytes here.)

    A criminal complaint was also filed in the Southern District of Florida charging the current Chief Justice of the Venezuelan Supreme Court with accepting “tens of millions of dollars and bribes to illegally fix dozens of civil and criminal cases,” including a case in which the defendant authorized the dismissal of charges brought against a Venezuelan who was “charged in a multibillion-dollar fraud scheme against the Venezuelan state-owned oil company.” According to the complaint, the defendant laundered the proceeds through U.S. bank accounts, and spent approximately $3 million in South Florida on a private aircraft and luxury goods.

    Another unsealed indictment in the Southern District of New York charges three additional Venezuelans with evading OFAC sanctions by working “with U.S. persons and U.S.-based entities to provide private flight services for the benefit of Maduro’s 2018 presidential campaign.”

    Additional separate indictments accuse various former Venezuelan officials of drug trafficking and military aircraft smuggling. In addition, several individuals were charged with FCPA violations, including: (i) two individuals for allegedly receiving bribes to award business to U.S.-based companies; and (ii) several individuals for allegedly participating in an international money laundering scheme and conspiring to solicit Petróleos de Venezuela, S.A. (PDVSA) vendors “for bribes and kickbacks in exchange for providing assistance to those vendors in connection with their PDVSA business.” According to the DOJ’s press release, the scheme involved “bribes paid by the owners of U.S.-based companies to Venezuelan government officials to corruptly secure energy contracts and payment priority on outstanding invoices.”

    Financial Crimes DOJ Indictment Of Interest to Non-US Persons Venezuela Petroleos de Venezuela Anti-Money Laundering Bribery FCPA OFAC Sanctions Courts

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  • OFAC extends two Ukraine-related general licenses

    Financial Crimes

    On March 20, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced it extended the expiration dates of two Ukraine-related general licenses (GLs) by issuing GL 13N, which supersedes GL 13M, and GL 15H, which supersedes GL 15G. Both GLs—which now expire July 22—authorize certain transactions necessary to divest or transfer debt, equity, or other holdings, or wind down operations or existing contracts with a Russian manufacturer previously sanctioned by OFAC in April 2018 (covered by InfoBytes here).

    Visit here for continuing InfoBytes coverage of actions related to Ukraine.

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

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  • OFAC sanctions additional Russian oil brokerage firm for doing business with Venezuela

    Financial Crimes

    On March 12, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order (E.O.) 13850 against a Russian oil brokerage firm for operating in the oil sector of the Venezuelan economy. According to OFAC, following the February 18 designation of a Swiss-incorporated, Russian-controlled oil brokerage and its board chairman and president (covered by InfoBytes here), cargoes of Venezuelan oil allocated to the designated company were charged to the newly sanctioned brokerage firm in order to evade U.S. sanctions. In connection with the designation, OFAC issued Venezuela General License 36A, which authorizes certain transactions and activities otherwise prohibited under E.O.s 13850 and 13857 that are required in order to wind down business with the company. Concurrently, OFAC issued amended FAQ 817 and FAQ 818 to address the significance of OFAC’s designation of the company, and whether there is a wind-down period. OFAC reiterated that “all property and interests in property of [the brokerage firm] that are in the United States or in the possession or control of U.S. persons, and of any entities that are owned, directly or indirectly, 50 percent or more by the designated individual and entity, are blocked and must be reported to OFAC.”

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

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  • OFAC targets companies for facilitating Iranian petroleum products

    Financial Crimes

    On March 19, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13382 against five United Arab Emirates-based companies for facilitating the Iranian regime’s petroleum and petrochemical sales, which helps to finance Iran’s Islamic Revolutionary Guard Corps-Qods Force. According to OFAC, the sanctions follow similar designations of key revenue sources (covered by InfoBytes here and here). As a result, all property and interests in property belonging to the identified entities subject to U.S. jurisdiction are blocked, and “U.S. persons are generally prohibited from transacting with them.” Moreover, OFAC warned that “foreign financial institutions that knowingly facilitate significant transactions for, or persons that provide material or certain other support to, the persons designated today risk exposure to sanctions that could sever their access to the U.S. financial system or block their property and interests in property under U.S. jurisdiction.”

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

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  • Chinese nationals sanctioned and charged with laundering over $100 million in cryptocurrency from hacked exchange

    Financial Crimes

    On March 2, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Orders 13694, 13757, and 13722 against two Chinese nationals for allegedly laundering over $100 million in stolen cryptocurrency connected to a North Korean state-sponsored cyber group that hacked cryptocurrency exchanges in 2018. According to OFAC, the two individuals “materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, a malicious cyber-enabled activity” or in support of the North Korean cyber group, which was designated by OFAC last September (covered by InfoBytes here). OFAC stated that it closely coordinated its action with the U.S. Attorney’s Office for the District of Columbia and the Internal Revenue Service’s Criminal Investigation Division. As a result of the sanctions, “all property and interests in property of these individuals that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.” OFAC further noted that its regulations “generally prohibit all dealings by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of blocked or designated persons,” and warned foreign financial institutions that knowingly facilitating significant transactions or providing significant financial services to the designated individuals may subject them to U.S. correspondent account or payable-through sanctions.

    On the same day, the DOJ unsealed a two-count indictment against the two individuals, charging them with money laundering conspiracy and operating an unlicensed money transmitting business. The indictment claims that the individuals converted virtual currency traceable to the hack of a cryptocurrency exchange into fiat currency or prepaid Apple iTunes gift cards through accounts in various exchanges linked to Chinese banks and then transferred the currency or gift cards to customers for a fee. According to the indictment, neither individual was registered as a money transmitting business with the Financial Crimes Enforcement Network, which is a federal felony offense. The complaint seeks forfeiture of 113 virtual currency accounts belonging to the individuals.

    Financial Crimes Department of Treasury OFAC Cryptocurrency Of Interest to Non-US Persons Sanctions DOJ Anti-Money Laundering Virtual Currency

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  • OFAC designates Hizballah-associated companies and officials as global terrorists

    Financial Crimes

    On February 26, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) designated three individuals and 12 entities—all based in Lebanon—as Specially Designated Global Terrorists (SDGTs). Pursuant to Executive Order 13224, as amended, OFAC designated two of the individuals as leaders or officials of a Hizballah-related foundation that was previously designated for supporting terrorism in 2007. The entities are also associated with the foundation. One of the entities controlled by the foundation and a number of its subsidiaries reportedly did business with a Lebanon-based bank, which had been designated as an SDGT in August, allowing Hizballah to avoid close examination of its transactions by Lebanese banking authorities.

    OFAC reiterated that “all property and interests in property of these targets that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. OFAC’s regulations generally prohibit all dealings by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of blocked or designated persons. In addition, persons that engage in certain transactions with the individuals and entities designated today may themselves be exposed to sanctions or subject to an enforcement action.”

    Financial Crimes Department of Treasury OFAC Of Interest to Non-US Persons Sanctions Combating the Financing of Terrorism

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  • Foreign financial institutions should conduct enhanced due diligence when facilitating humanitarian trade with Iran

    Financial Crimes

    On February 27, the U.S. Treasury Department announced the finalization of terms to the Swiss Humanitarian Trade Arrangement (SHTA) between the U.S. and Swiss governments in order to increase the transparency of humanitarian trade with Iran and help safeguard against “the Iranian regime’s diversion of humanitarian trade for malign purposes.” According to Treasury, “the SHTA presents a voluntary option for facilitating payment for exports of agricultural commodities, food, medicine, and medical devices to Iran in a manner that ensures the utmost transparency. Under the SHTA, participating financial institutions commit to conducting enhanced due diligence to ensure that humanitarian goods reach the people of Iran and are not misused by the Iranian regime.” Foreign governments and foreign financial institutions interested in establishing humanitarian mechanisms consistent with guidance published last October (covered by InfoBytes here) are instructed to reach out to Treasury’s Office of Foreign Assets Control (OFAC) for additional information or to request evaluation of a proposed framework. Foreign governments and financial institutions are also reminded to carefully consider the due diligence and reporting expectations outlined in the guidance.

    In conjunction with the finalization of the SHTA, OFAC issued General License (GL) 8, titled “Authorizing Certain Humanitarian Trade Transactions Involving the Central bank of Iran,” as well as related FAQs. GL 8 authorizes certain transactions and activities otherwise prohibited under the Global Terrorism Sanctions Regulations or the Iranian Transactions and Sanctions Regulations.

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

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