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OFAC further expands Iranian sanctions, includes Hizballah-associated individuals
On May 17, U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) identified two Hizballah-associated individuals for their alleged role in financing terrorist networks, in addition to five companies owned or controlled by one of the designated individuals, as “Specially Designated Global Terrorists.” According to OFAC, the sanctions were issued pursuant to Executive Order 13224 (E.O. 13224), and designated individuals who had previously worked with the Central Bank of Iran, which was “recently identified as being complicit in facilitating the [Islamic Revolutionary Guard Corps-Qods Force’s (IRGC-QF)] access to hundreds of millions of dollars in U.S. currency, to expand banking access between Iran and Lebanon.” As covered earlier in InfoBytes, on May 15 OFAC sanctioned the governor and a senior official of the Central Bank of Iran for allegedly funneling millions of dollars on behalf of the IRGC-QF to Hizballah. The May 17 actions are designed to “further restrict Hizballah’s access to the U.S. financial system and the Iranian regime’s network of regional proxy groups.” As a result, all assets belonging to the identified individuals and entities subject to U.S. jurisdiction must be blocked and reported to OFAC, and U.S. persons are generally prohibited from dealing with them.
Separately, on May 22, OFAC announced that five Iranian individuals who allegedly provided ballistic missile-related technical expertise on behalf of the IRGC-QF have also been sanctioned pursuant to E.O. 13224. In addition to freezing assets subject to U.S. jurisdiction and prohibiting U.S. persons from engaging in transactions with the individuals, “foreign financial institutions that knowingly facilitate significant transactions for, or persons that provide material or certain other support to, the individuals and entities designated [] 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.”
See here for continuing InfoBytes coverage of actions related to Iran.
OFAC sanctions Iranian bank officials, Iraqi bank, and others for moving millions of dollars to Hizballah
On May 15, U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced it was imposing sanctions on the governor and a senior official of the Central Bank of Iran, an Iraqi bank and its chairman, and a key Hizballah official, for allegedly funneling millions of dollars on behalf of the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) to Hizballah. Pursuant to Executive Order 13224, which “provides a means by which to disrupt the financial support network for terrorists and terrorist organizations by authorizing 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 individuals and entities were designated as Specially Designated Global Terrorists. The actions, which follow a May 10 action taken against individuals and entities who materially assisted in the conversion of millions of U.S. dollars to fund IRGC-QF’s malignant activities, “seek to stifle Iran’s ability to abuse the U.S. and regional financial systems.”
However, OFAC clarified that sanctions on the officials of the Central Bank of Iran do not extend to the bank itself. Following President Trump's decision to cease participation by the U.S. government in the Joint Comprehensive Plan of Action, sanctions on the bank will be re-imposed August 7, and on November 5, additional sanctions will be re-imposed on persons knowingly engaging in certain significant transactions with the Central Bank of Iran.
Visit here for additional InfoBytes coverage on Iranian sanctions.
OFAC adds Iranians to Specially Designated Nationals List
On May 10, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) made additions to the Specially Designated Nationals List under the Iranian Financial Sanctions Regulations and Global Terrorism Sanctions Regulations. OFAC’s additions to the designations identify nine individuals and entities that materially assisted in converting millions of U.S. dollars to fund the Islamic Revolutionary Guard Corps-Qods Force’s malignant activities. As a result, all assets belonging to the identified individuals and entities subject to U.S. jurisdiction are blocked and must be reported to OFAC, and U.S. persons are generally prohibited from dealing with them.
OFAC sanctions Iranian nationals for malicious cyberattacks
On March 23, the Treasury Department’s Office of Foreign Assets Control (OFAC), in coordination with the DOJ, imposed additional sanctions on an Iranian entity and 10 Iranian nationals, pursuant to Executive Order 13694, for conducting malicious cyberattacks against hundreds of U.S. and third-country universities for private financial gain. Nine of the identified individuals are connected to the Mabna Institute and are accused of misappropriating “economic resources or personal identifiers” to aid Iran’s Islamic Revolutionary Guard Corps. Pursuant to these sanctions, all property or interests in property of the designated persons within U.S. jurisdiction are blocked, and U.S. persons are “generally prohibited” from participating in transactions with these individuals and entities. Additionally, as reported in a DOJ press release, the nine Iranians have also been indicted for engaging in malicious cyber-enabled activities. A tenth Iranian national was sanctioned for engaging in cyber-related actions targeting a U.S. media company.
Visit here for additional InfoBytes coverage on Iranian sanctions.
OFAC expands Venezuelan and Iranian sanctions
On January 5, the Treasury Department’s Office of Foreign Assets Control (OFAC) imposed additional sanctions against four current or former officials of the Venezuelan government. The designations, issued pursuant to Executive Order 13692, identify officials who are “associated with corruption and repression in Venezuela” and have “forsaken the professional republican mission of the military institution, which . . . is to be ‘with no political orientation … and in no case at the service of any person or political partisanship.’” All assets belonging to the identified individuals subject to U.S. jurisdiction are frozen, and U.S. persons are generally prohibited from dealing with them. See here for previous InfoBytes coverage of Venezuelan sanctions.
Separately on January 4, OFAC designated five Iranian entities, pursuant to Executive Order 13382 (E.O. 13382), for their ties to Iran’s ballistic missile program. The five entities identified in the designation are either owned or controlled by an Iranian group that is “responsible for the development and production of Iran's solid-propellant ballistic missiles, is listed in the Annex to E.O. 13382 and is currently sanctioned by the U.S., UN, and EU.” In addition to freezing assets subject to U.S. jurisdiction and prohibiting U.S. persons from engaging in transactions with the entities, “foreign financial institutions that knowingly facilitate significant transactions for, or persons that provide material or certain other support to, the entities 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.” See here for previous InfoBytes coverage of Iranian sanctions.
OFAC Penalizes Dental Supply Company for Violations of the Iranian Transactions and Sanctions Regulations
The U.S. Treasury Department’s Office of Foreign Asset Control (OFAC) announced that it entered into a $1.2 million settlement with a U.S. dental supply company for alleged violations of the Iranian Transactions and Sanctions Regulations (ITSR). According to the December 6 announcement, between November 2009 and July 2012, two of the company’s subsidiaries exported 37 shipments of dental supplies to distributors in other countries with “knowledge or reason to know that the goods were ultimately destined for Iran.” OFAC determined that the alleged violations were non-egregious.
In determining the settlement amount, OFAC considered multiple factors, including that (i) the subsidiaries acted willfully in violation of the ITSR because employees concealed their knowledge that the goods were destined for Iran; (ii) subsidiary supervisory personnel actively concealed their awareness of the apparent violations from their U.S. parent company; and (iii) the U.S. company is “commercially sophisticated” with knowledge of OFAC’s regulations. OFAC also considered numerous mitigating factors, including (i) the fact that the U.S. company has not received a penalty from OFAC in the previous five years; (ii) the harm to the ITSR program was limited; and (iii) the U.S. company cooperated with the investigation and took remedial steps.
OFAC Imposes Additional Iranian Sanctions, List Includes Entities Involved in DDoS Attacks Against U.S. Financial Institutions
On September 14, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced it was imposing sanctions on 11 entities and individuals for supporting designated Iranian actors or for conducting malicious cyberattacks, including engaging in a series of distributed denial of service (DDoS) attacks against approximately 46 U.S. financial institutions. As reported in an indictment delivered by a federal grand jury in the Southern District of New York (see March 24, 2016 DOJ press release), the DDoS attacks—allegedly conducted by seven Iranian individuals between December 2011 and mid-2013—denied customers access to online bank accounts and collectively cost the affected financial institutions “tens of millions of dollars in remediation costs as they worked to neutralize and mitigate the attacks on their [computer] servers.” During a DDoS attack, a “malicious actor” gains remote control of a server through the installation of malicious software. Once compromised, the “malicious actor” can collect hundreds or thousands of these compromised devices (collectively known as a “botnet”), and, once control is achieved, will “direct the computers or servers comprising the botnet to carry out computer network attack[s] and computer network exploitation activity.” Three of the seven sanctioned individuals worked for a company that was added to OFAC’s updated SDN list on September 14 and oversaw a network of compromised computers that powered DDoS attacks. The other four individuals operated a second DDoS botnet on behalf of a different company listed on OFAC’s non-SDN list. Both Iranian-based private computer security companies perform work on behalf of the Iranian Government, including Iran’s Islamic Revolutionary Guard Corps. Pursuant to E.O. 13694, U.S. persons are prohibited from dealing with the designated entities and individuals, and “foreign financial institutions that facilitate significant transactions for, or persons that provide material or certain other support to, the entities and individuals 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.”
In addition, pursuant to E.O. 13382, OFAC sanctioned an Iranian-based engineering company for engaging in activities related to Iran’s ballistic missile program, which include providing “ financial, material, technological, or other support for, or goods or services in support of, the [Islamic Revolutionary Guard Corps].” Two Ukrainian-based companies were also sanctioned pursuant to E.O. 13224 for assisting previously sanctioned Iranian and Iraqi airlines in obtaining U.S.-origin aircraft, as well as crew and services.OFAC Settles Alleged Iran Sanction Violations with Singapore-Based Oilfield Services Company
On August 24, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced that it had reached a $415,350 settlement with a Singaporean oilfield services company for an alleged 55 violations of Iran sanctions regulations. OFAC asserted that the company “exported or attempted to export 55 orders of oil rig supplies from the [U.S.] to Singapore and the United Arab Emirates, and then re-exported or attempted to re-export these supplies to four separate oil rigs located in Iranian territorial waters” from approximately October 2011 through February 2013. OFAC alleged that each instance of this conduct, which the company did not voluntarily self-disclose, violated OFAC’s Iranian Transactions and Sanctions Regulations. Had the company not settled, OFAC determined that civil monetary penalties ranged from approximately $923,000 to $13.75 million. In establishing the penalty, OFAC considered that the company: (i) failed to act with an appropriate level of caution by exporting goods to oil rigs located in Iranian territorial waters; (ii) aided the development of Iran's energy resources; (iii) “is a large, sophisticated company with 14 offshore drilling rigs doing business throughout the world;” and (iv) “did not have an OFAC compliance program in place at the time of the transactions.” As for mitigating factors, OFAC determined that: (i) the company has no prior sanctions history with OFAC; (ii) the company took remedial action by implementing an OFAC compliance program; and (iii) the company cooperated with the investigation and entered into a tolling agreement with OFAC.
OFAC Settles Alleged Iran Sanction Violations with International Freight Forwarder
On August 17, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced it had reached a $518,063 civil settlement with a California-based international freight forwarder for alleged violations of sanctions against Iran. OFAC claimed that the company shipped “used and junked cars and parts” from the U.S. to Afghanistan, via Iran, on 140 separate occasions from approximately April 2010 through June 2012. OFAC alleged that each instance of this conduct, which the company “did not voluntarily self-disclose,” violated OFAC’s Iranian Transactions and Sanctions Regulations (ITSR). See 31 C.F.R. § 560.204.
Had the company not settled, OFAC determined that civil monetary penalties ranged from approximately $1.5 million to $35 million. In establishing this range, OFAC alleged that the following were aggravating factors: (i) the company “demonstrated a reckless disregard for U.S. sanctions requirements by failing to exercise a minimal degree of caution or care in transshipping goods through Iran”; (ii) the company’s “President and co-owner knew and approved of the transshipments via Iran”; (iii) the company “provided an economic benefit to Iran through its pattern of conduct and the volume of transactions in which it engaged”; and (iv) the company is “sophisticated” and has “experience with U.S. export laws and OFAC regulations, particularly the ITSR.”
As for mitigating factors, OFAC alleged that: (i) the goods “did not appear to have an end use in Iran”; (ii) the company “has no prior OFAC sanctions history”; (iii) the company is a “small business,” and the alleged violations “constituted less than one percent of its total shipments” during the relevant time period; (iv) the company “had an OFAC compliance program in place” during the relevant time period; (v) the company “took remedial steps”; and (vi) the company “cooperated with OFAC’s investigation.”
OFAC Fines Global Risk Mitigation Firm for Violating Iranian Sanctions
On August 10, the Treasury’s Office of Foreign Assets Control (OFAC) announced it had reached a settlement with a global company that provides services in regulatory risk mitigation for alleged violations of OFAC sanctions against Iran. OFAC claimed that, beginning in 2012, on 44 separate occasions, the firm imported Iranian-origin services into the U.S., and on 28 different occasions, engaged in “transactions or dealings related to Iranian-origin services by approving and facilitating its foreign subsidiaries’ payments to providers of Iranian-origin services.” In establishing the penalty, OFAC considered that the firm failed to exercise a minimal degree of caution—and senior management allegedly knew or had reason to know the transactions related to services of Iranian-origin—and that the transactions giving rise to the apparent violations were not eligible for OFAC authorization and yielded economic benefits to Iran. Furthermore, OFAC claimed the “frequency and duration of the apparent violations constitute a pattern or practice of conduct,” and that the firm’s ineffective compliance program failed to recognize the risks of engaging in the aforementioned transactions. OFAC maintained the firm violated the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560. OFAC also considered the company’s prior history of not being sanctioned; its significant remedial measures; and substantial cooperation with OFAC’s investigation.
The settlement requires the firm to pay more than $250,000 to settle the claims, which the firm did not voluntarily self-disclose to OFAC.