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OFAC sanctions Central Bank of Syria and Syrian officials
On December 22, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against two individuals, nine business entities, and the Central Bank of Syria, pursuant to Syria sanctions authorities. Treasury notes that the sanctions are intended to “discourage future investment in government-controlled areas of Syria, force the regime to end its atrocities against the Syrian people, and compel its commitment to the United Nations-facilitated process in line with UN Security Council Resolution 2254.” Additionally, concurrent with OFAC’s designations, the State Department also designated six Syrian persons pursuant to Section 2 of Executive Order 13894. As a result, all property and interests in property belonging to the designated individuals and entities subject to U.S. jurisdiction are blocked and must be reported to OFAC. OFAC noted that its regulations “generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons,” and warned that non-U.S. persons that engage in certain transactions with the designated persons may expose themselves to designation.
OFAC sanctions Nicaraguan officials for supporting Ortega regime
On December 21, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13851 against the vice president of the Nicaraguan Supreme Court of Justice, a deputy of the National Assembly, and a chief of the Nicaraguan national police in Leon for supporting the Ortega regime, which “continue[s] … to undermine Nicaragua’s democracy.” As a result, all property and interests in property of the sanctioned individuals and entities, and any entities owned 50 percent or more by such persons subject to U.S. jurisdiction, are blocked and must be reported to OFAC. U.S. persons are also generally prohibited from entering into transactions with the sanctioned persons.
OFAC sanctions biometric technology company for supporting Maduro regime
On December 18, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against a Venezuelan-registered biometric technology company and two individuals for allegedly materially supporting the Maduro regime by providing goods and services that the regime used to carry out the “fraudulent” elections on December 6. The sanctions, issued pursuant to Executive Order 13692, reflect Treasury’s continued efforts to hold persons who offer support to the Maduro regime accountable. As a result, all property and interests in property belonging to the identified individuals subject to U.S. jurisdiction are blocked, and “any entities that are owned, directly or indirectly, 50 percent or more by the designated individuals, are also blocked.” U.S. persons are generally prohibited from dealing with any property or interests in property of blocked or designated persons.
OFAC sanctions Syrian entities, issues FAQs
On December 22, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) added several individuals and entities, including the Central Bank of Syria (CBoS), to its Specially Designated Nationals and Blocked Persons List related to Executive Order (E.O.) 13894. OFAC also released new Syria Frequently Asked Questions 866, 867, and 868 related to prohibitions applicable to CBoS and allowances for humanitarian assistance to Syria following CBoS’s designation. OFAC clarified, among other things, that “non-U.S. persons who knowingly provide significant financial, material, or technological support to, or knowingly engage in a significant transaction with the Government of Syria, including the CBoS, or certain other persons sanctioned with respect to Syria, risk exposure to sanctions.” With respect to permissible humanitarian assistance, OFAC explained that it “may issue specific licenses to authorize certain transactions involving U.S. persons or the U.S. financial system that may otherwise be prohibited by OFAC sanctions, provided those transactions are in the foreign policy interests of the United States.”
OFAC designates Cuban state-owned businesses for evading U.S. sanctions
On December 21, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to the Cuban Assets Control Regulations against three state-owned entities “controlled by the Cuban military with strategic roles in the Cuban economy.” According to OFAC, the entities are identified on OFAC’s List of Specially Designated Nationals and Blocked Persons, with two of the entities being designated for, among other things, using “their Panamanian incorporation to subvert international trade restrictions.” One of the sanctioned entities, OFAC notes, is a financial investment and remittance company “authorized by the Central Bank of Cuba to finance export operations, conduct financial leasing operations, and handle commercial distribution of remittance cards.” Find continuing InfoBytes coverage on the Cuban Assets Control Regulations here.
OFAC sanctions entities supporting the sale of Iranian petrochemicals
On December 16, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13846 against four entities for facilitating the export of Iranian petrochemical products on behalf of a previously designated petrochemical company. According to OFAC, the designated entities—China- and United Arab Emirates-based companies—have allegedly provided the previously designated company “with critical shipping services or conducted financial transactions on” its behalf, which has enabled the previously designated company to “continue brokering and moving Iranian petrochemical exports.” As a result of the sanctions, all property and interests in property of the designated persons subject to U.S. jurisdiction are blocked, and any “entities that are owned, directly or indirectly, 50 percent or more by such persons, are also blocked.” OFAC noted that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated persons. OFAC further warned foreign financial institutions that knowingly facilitating significant transactions or providing significant support to the designated persons may subject them to sanctions and could sever their access to the U.S. financial system.
OFAC releases new Non-SDN sanctions reference tool
On December 14, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) published a new reference tool, the Non-SDN Menu Based Sanctions List (NS-MBS List), which “identities persons subject to certain non-blocking menu-based sanctions that have been imposed under statutory or other authorities, including certain sanctions described in Section 235 of the Countering America’s Adversaries Through Sanctions Act (CAATSA), as implemented by Executive Order 13849, and the Ukraine Freedom Support Act of 2014, as amended by CAATSA.” OFAC noted that the NS-MBS List is distinct from its List of Foreign Financial Institutions Subject to Correspondent Account or Payable-Through Account Sanctions, which identifies foreign financial institutions subject to correspondent or payable-through account sanctions.
OFAC announces Hong Kong-related designations
On December 7, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) added 14 Chinese citizens to the Specially Designated Nationals List. The individuals were designated under Executive Order (E.O.) 13936, which was issued by President Trump in July and, among other things, targets and authorizes the imposition of sanctions on persons who materially assist, sponsor, or provide financial, material, or technological support to activities contributing to the undermining of Hong Kong’s democracy and autonomy. Additionally, E.O. 13936 states that “[a]ll property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person, . . .are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in” with any foreign person identified to have engaged in the aforementioned activities.
Treasury submits Hong Kong Autonomy Act report to Congress
On December 11, the U.S. Treasury Department released a report submitted to Congress pursuant to Section 5(b) of the Hong Kong Autonomy Act (the Act), which was enacted on July 14. The Act requires that the Secretary of State submit to Congress a report (Section 5(a) Report) that includes (i) “an identification of the foreign person”; and (ii) “a clear explanation for why the foreign person was identified and a description of the activity that resulted in the identification.” The Secretary submitted the Section 5(a) Report on October 14, which identified 11 foreign persons that OFAC designated pursuant to Executive Order 13936 on August 7. The Act requires Treasury to submit the Section 5(b) report between 30 and 60 days of the Section 5(a) submission, detailing any foreign financial institution (FFI) that knowingly conducts a significant transaction with a foreign person identified by the Secretary in the Section 5(a) Report. The 5(b) Report notes that Treasury has no information on any FFIs that have conducted significant transactions with the designated foreign persons, after conducting “regular searches of all available sources of information, including classified and unclassified holdings.” Treasury notes that it will continue to monitor for new activity that meets the criteria and engage with foreign governments and FFIs to ensure they “they understand the reporting requirements and sanctions risks under the [the Act].”
FinCEN clarifies financial crime information sharing program
On December 10, FinCEN Director Kenneth A. Blanco spoke at the Financial Crimes Enforcement Conference hosted by the American Bankers Association and American Bar Association to discuss the importance of information sharing in identifying, reporting, and preventing financial crime. Specifically, Blanco addressed recently updated guidance designed to provide additional clarity on FinCEN’s information sharing program under Section 314(b) of the USA PATRIOT Act, which provides financial institutions “the ability to share information with one another, under a safe harbor provision that offers protections from civil liability, in order to better identify and report potential money laundering or terrorist financing.”
FinCEN provided three main clarifications:
- While financial institutions may share information about suspected terrorist financing or money laundering, they “do not need to have specific information that these activities directly relate to proceeds of [a specified unlawful activity (SUA)], or to have identified specific laundered proceeds of an SUA.” FinCEN also stated that a conclusive determination that an activity is suspicious does not need to be made in order for a financial institution to benefit from the statutory safe harbor. Furthermore, information may be shared “even if the activities do not constitute a ‘transaction,’” such as “an attempted transaction, or an attempt to induce others engage in a transaction.” FinCEN added that there is no limitation under Section 314(b) on the sharing of personally identifiable information and no restrictions on the type of information shared or how the information can be shared, including verbally.
- “An entity that is not itself a financial institution under the Bank Secrecy Act [(BSA)] may form and operate an association of financial institutions whose members share information under Section 314(b),” FinCEN noted, adding that this includes compliance service providers.
- An unincorporated association of financial institutions governed by a contract between its members “may engage in information sharing under Section 314(b).”
In prepared remarks, Blanco reiterated, among other things, that companies should be specific in describing the activity they see in their suspicious activity reports (SAR), and discussed FinCEN’s Advance Notice of Proposed Rulemaking issued in September (covered by InfoBytes here), which solicited comments on questions concerning potential regulatory amendments under the BSA. Blanco also highlighted recent FinCEN’s advisories and guidance related to Covid-19 fraud (covered by InfoBytes here, here, and here) and encouraged the audience to review the agency’s dedicated Covid-19 webpage.