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  • OFAC issues temporary extension of Ukraine-related General Licenses

    Financial Crimes

    On January 16, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced the issuance of Ukraine-related General Licenses (GL) 13J, 14E, and 16E, which modify the expiration dates of previous Ukraine-based general licenses for wind-down transactions for certain companies that otherwise would be prohibited by Ukraine-Related Sanctions Regulations.

    GL 13J supersedes GL 13I and authorizes, among other things, activities and transactions “ordinarily incident and necessary” for (i) the divestiture of the holdings of specified blocked persons to a non-U.S. person; and (ii) the facilitation of transfers of debt, equity, or other holdings involving specified blocked persons to a non-U.S. person. GL 14E, which supersedes GL 14D, relates to specific wind-down activities involving a Russian aluminum producer sanctioned last April as previously covered by InfoBytes here. GL 16E supersedes GL 16D and authorizes permissible activities with the designated company and its subsidiaries, and applies to the maintenance and wind-down of operations, contracts, and agreements that were effective prior to April 6.

    Financial Crimes Sanctions OFAC Department of Treasury Ukraine International

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  • OFAC issues continued extension of Ukraine-related General Licenses

    Financial Crimes

    On December 7, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced the issuance of Ukraine-related General Licenses (GL) 13H, 14D, 15C, and 16D, which amend previous licenses related to permissible wind-down transactions that otherwise would be prohibited by Ukraine-Related Sanctions Regulations with respect to the subject entities. OFAC extended the expiration dates of the licenses from January 7 to January 21.

    GL 13H supersedes GL 13G and authorizes, among other things, activities “ordinarily incident and necessary” to (i) divest or transfer debt, equity, or other holdings in the specified blocked entities to a non-U.S. person; or (ii) facilitate the transfers of debt, equity, or other holdings in those entities by a non-U.S. person to another non-U.S. person. GL 14D, which supersedes GL 14C, relates to specific wind-down activities involving a Russian aluminum producer sanctioned last April as previously covered by InfoBytes here. GL 15C and GL 16D supersede GL 15B and GL 16C, respectively, and authorize permissible activities relating to the maintenance or wind-down of operations, contracts, and agreements with designated entities and subsidiaries that were effective prior to April 6.

    Visit here for additional InfoBytes coverage on Ukraine sanctions.

    Financial Crimes Department of Treasury OFAC Ukraine Sanctions

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  • OFAC reaches settlement with company for alleged Ukrainian sanctions violations

    Financial Crimes

    On November 27, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a $87,507 settlement with an aerospace and defense technology company for three alleged violations by a former subsidiary of the Ukraine-Related Sanctions Regulations (URSR). According to OFAC, the settlement resolves potential civil liability for the former subsidiary’s alleged involvement in the “indirect export of components to be incorporated into commercial air traffic control radar” through Canadian and Russian distributors “to a person owned 50 percent or more, directly or indirectly, by a person identified on OFAC’s List of Specially Designated Nationals and Blocked Persons.”

    In arriving at the settlement amount, OFAC considered the following as aggravating factors: (i) the former subsidiary’s failure to recognize warning signs; (ii) the transactions, which constituted the apparent violations, were reviewed and approved by the Director of Global Trade Compliance, and “resulted in harm to the sanctions program objectives of the URSR”; (iii) the company and former subsidiary are large, sophisticated entities; and (iv) the company and its compliance personnel previously violated Iranian Transaction and Sanctions Regulations, while the former subsidiary was subject to a consent agreement as a result of recurring compliance failures.

    However OFAC also considered mitigating factors, including (i) the former subsidiary has not received a penalty or finding of a violation in the five years prior to the transactions at issue; (ii) the company has cooperated with OFAC and implemented remedial measures, including terminating the violative conduct and implementing steps to minimize the risk of reoccurring conduct; and (iii) the company voluntarily disclosed the alleged violations on behalf of the former subsidiary.

    Visit here for additional InfoBytes coverage on Ukraine sanctions.

    Financial Crimes Department of Treasury OFAC Ukraine Sanctions

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  • OFAC issues extension of Ukraine-related General Licenses

    Financial Crimes

    On November 9, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced the issuance of Ukraine-related General Licenses (GL) 13G, 14C, 15B, and 16C, which amend previous licenses related to permissible wind-down transactions that otherwise would be prohibited by Ukraine-Related Sanctions Regulations with respect to the subject entities. OFAC extended the expiration dates of the licenses from December 12 to January 7, 2019, while reviewing the sanctioned entities’ proposed “substantial corporate governance changes” that may result in significant changes in their control.

    GL 13G supersedes GL 13F and authorizes, among other things, activities “ordinarily incident and necessary” to (i) divest or transfer debt, equity, or other holdings in the specified blocked entities to a non-U.S. person; or (ii) facilitate the transfers of debt, equity, or other holdings in those entities by a non-U.S. person to another non-U.S. person. GL 14C, which supersedes GL 14B, relates to specific wind-down activities involving a Russian aluminum producer sanctioned last April as previously covered by InfoBytes here. GL 15B and GL 16C supersede GL 15A and GL 16B, respectively, and authorize permissible activities relating to the maintenance or wind-down of operations, contracts, and agreements with designated entities and subsidiaries that were effective prior to April 6.

    Visit here for additional InfoBytes coverage on Ukraine sanctions.

    Financial Crimes OFAC Department of Treasury Ukraine Sanctions

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  • OFAC sanctions target persons supporting Russia’s “malign activity” in Crimea and eastern Ukraine

    Financial Crimes

    On November 8, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced its decision to sanction an additional three individuals and nine entities, pursuant to the Countering America’s Adversaries Through Sanctions Act of 2017 (CAATSA) and Executive Orders (E.O.) 13685 and 13661, for supporting Russia’s occupation of Crimea and parts of eastern Ukraine and its continued “malign activity and destabilizing behavior.” According to OFAC, two of the individuals and one of the entities placed on the Specially Designated Nationals and Blocked Persons List (SDN List) allegedly engaged in serious human rights abuses in “territories forcibly occupied or otherwise controlled by Russia” under the Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014, as amended by CAATSA Section 228. Additionally, pursuant to E.O. 13685, OFAC imposed sanctions on eight entities and one individual allegedly responsible for helping Russia advance its interests by operating in the Crimea region of Ukraine. OFAC further noted that one of the eight entities is also designated for being owned or controlled by, directly or indirectly, a sanctioned Russian bank and a Russian national whose property and interests in property are blocked pursuant to E.O. 13661. As a result, all property and interests in property belonging to the identified individuals and entities subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from entering into transactions with them.

    Visit here for additional InfoBytes coverage on Russia sanctions.

    Financial Crimes Department of Treasury OFAC Russia Ukraine Sanctions

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  • FFIEC issues joint statement on OFAC Cyber-Related Sanctions Program

    Financial Crimes

    On November 5, the Federal Financial Institutions Examination Council (FFIEC) members issued a joint statement alerting financial institutions to the potential impact that the U.S. Treasury Department’s Office of Foreign Assets Control’s (OFAC) recent actions under its Cyber-Related Sanctions Program may have on financial institutions’ risk management programs. OFAC implemented the Cyber-Related Sanctions Program in response to Executive Order 13694 to address individuals and entities that threaten national security, foreign policy, and the economy of the U.S. by malicious cyber-enabled activities. FFIEC’s press release announcing the joint statement references OFAC’s June action against five Russian entities and three Russian individuals who, through “malign and destabilizing cyber activities,” provided material and technological support to Russia’s Federal Security Service (previously covered by InfoBytes here), noting that these entities may offer services to financial institutions operating in the U.S.

    The joint statement reminds financial institutions to ensure that their compliance and risk management processes address possible interactions with an OFAC sanctioned entity. The statement notes that continued use of products or services from a sanctioned entity may cause the financial institution to violate the OFAC sanctions. Additionally, use of software or technical services from a sanctioned entity may increase a financial institution’s cybersecurity risk. The statement encourages financial institutions to take appropriate corrective action, as well as to ensure their third-party service providers comply with OFAC’s requirements.

    The OCC also released Bulletin 2018-40, which corresponds with the FFIEC’s joint statement.

    Financial Crimes OFAC Sanctions FFIEC OCC Russia International Third-Party Privacy/Cyber Risk & Data Security

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  • OFAC amends Ukraine-related General Licenses to extend expiration dates

    Financial Crimes

    On October 12, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced the issuance of Ukraine-related General Licenses (GL) 13E, 14B, and 16B, which amend previous licenses and extend the expiration date of those licenses from November 12 to December 12 for wind-down transactions relating to a specific list of companies and subsidiaries that otherwise would be prohibited by Ukraine-Related Sanctions Regulations.

    GL 13E supersedes GL 13D and authorizes, among other things, (i) the divestiture of the holdings of specific blocked persons to a non-U.S. person; and (ii) the facilitation of transfers of debt, equity, or other holdings involving specified blocked persons to a non-U.S. person. GL 14B, which supersedes GL 14A, relates to specific wind-down activities involving a Russian aluminum producer sanctioned last April (see previous InfoBytes coverage here). Finally, GL 16B supersedes GL 16A and authorizes the maintenance or wind-down of operations, contracts, or other agreements that were in effect prior to April 6 and that involve a specific list of entities.

    Visit here for additional InfoBytes coverage on Ukraine sanctions.

    Financial Crimes OFAC Ukraine Sanctions

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  • OFAC issues temporary extensions of Ukraine-related General Licenses

    Financial Crimes

    On September 21, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced the issuance of Ukraine-related General Licenses (GL) 13D, 14A, and 16A, which amend previous licenses and extend the expiration date of those licenses from October 23 to November 12 for wind-down transactions relating to a specific list of companies and subsidiaries that otherwise would be prohibited by Ukraine-Related Sanctions Regulations. GL 13D supersedes GL 13C (see previous InfoBytes coverage here) and authorizes, among other things, (i) the divestiture of the holdings of specific blocked persons to a non-U.S. person; and (ii) the facilitation of transfers of debt, equity, or other holdings involving specified blocked persons to a non-U.S. person. GL 14A, which supersedes GL 14, relates to specific wind-down activities involving a Russian aluminum producer sanctioned last April (see previous InfoBytes coverage here). Finally, GL 16A supersedes GL 16 and authorizes, as previously covered by InfoBytes, the maintenance or wind down of operations, contracts, or other agreements that were in effect prior to April 6, 2018 and that involve a specific list of entities.

    Visit here for additional InfoBytes coverage on Ukraine sanctions.

    Financial Crimes OFAC Department of Treasury Sanctions Ukraine

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  • President Trump issues Executive Order delegating sanctions implementation authority; OFAC issues new CAATSA - Russia-related FAQ

    Financial Crimes

    On September 20, President Trump announced the issuance of Executive Order 13849 (E.O. 13849), “Authorizing the Implementation of Certain Sanctions Set Forth in the Countering America’s Adversaries Through Sanctions Act (CAATSA),” pursuant to national emergencies previously declared in Executive Orders 13660, 13694, and 13757. E.O. 13849 grants authority to the Secretary of the Treasury to take certain actions to implement the sanctions against identified persons, including the promulgation of regulations. Among other things, E.O. 13849 prohibits: (i) any U.S. financial institution from making loans or extending credits to sanctioned persons “totaling more than $10,000,000 in any 12-month period, unless the person is engaged in activities to relieve human suffering and the loans or credits are provided for such activities”; (ii) any foreign exchange transactions, subject to U.S. jurisdiction, in which the sanctioned person has any interest; and (iii) transfers of credit or payments between, by, or through financial institutions for the benefit of a sanctioned person subject to U.S. jurisdiction. E.O. 13849 further describes the actions that can be taken to implement the sanctions.

    In response to E.O. 13849, the U.S. Treasury Department’s Office of Foreign Assets Control published a new CAATSA - Russia-related FAQ providing additional clarifying information.

    Find continuing InfoBytes covered on CAATSA-related sanctions here.

    Financial Crimes Department of Treasury OFAC CAATSA Russia Executive Order

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  • OFAC publishes new Ukraine-related FAQs providing guidance on “maintenance” related to wind-down activities

    Financial Crimes

    On September 14, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced the publication of two new FAQs to provide additional guidance on “maintenance” as that term is used in General Licenses (GLs) 1415, and 16. As previously covered in InfoBytes (see posts here, here, and here), the GLs authorize specified wind-down activities otherwise prohibited by Ukraine-related sanctions regulations. According to OFAC, maintenance “generally includes all transactions and activities ordinarily incident to performing under a contract or agreement in effect prior to April 6, 2018, provided that the level of performance is consistent with the terms of the general license and consistent with past practices that existed between the party and the blocked entity prior to April 6, 2018.”

    Visit here for additional InfoBytes coverage on Ukraine/Russia-related sanctions.

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