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  • OFAC sanctions Iran’s largest petrochemical holding group for funding IRGC

    Financial Crimes

    On June 7, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against Iran’s largest petrochemical holding group for providing financial support to an engineering conglomerate of the Islamic Revolutionary Guard Corps (IRGC) whose property and interests in property are blocked pursuant to Executive Order 13382. In addition, OFAC designated the holding group’s network of 39 subsidiary petrochemical companies and foreign-based sales agents. According to OFAC, profits derived from the holding group’s activities “support the IRGC’s full range of nefarious activities, including the proliferation of weapons of mass destruction . . . and their means of delivery, support for terrorism, and a variety of human rights abuses, at home and abroad.”

    As a result, all property and interests in property belonging to the identified entities subject to U.S. jurisdiction are blocked and must be reported to OFAC, and U.S. persons are generally prohibited from transacting with them. Moreover, OFAC warned foreign financial institutions that they may be subject to U.S. correspondent account or payable-through account sanctions if they knowingly facilitate significant transactions for any of the designated entities. OFAC further issued a reminder that as of November 5, 2018, purchasing, acquiring, selling, transporting, or marketing petrochemical products from Iran is sanctionable under E.O. 13846 (covered by InfoBytes here).

    Visit here for additional InfoBytes coverage of actions related to Iran.

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

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  • OFAC issues Finding of Violation, no penalties, against bank for alleged Iranian sanctions violations

    Financial Crimes

    On May 28, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a Finding of Violation against a bank, acting as a trustee for a customer, for violations of the Iranian Transactions and Sanctions Regulations (ITSR). According to the announcement, OFAC’s Finding of Violation was based on the fact that the bank processed at least 45 pension payments totaling over $11,000 to a U.S. citizen with a U.S. bank account, residing in Iran. After learning of and reporting the issue to OFAC, the bank modified its review and reporting process to ensure that retirement payments are screened by the right screening platform and that sanctions alerts are handled through the appropriate process, including review by compliance specialists with expertise in sanctions.

    When issuing a Finding of Violation against the bank, as opposed to a civil money penalty, OFAC considered the fact that, among other things, (i) no managers or supervisors appear to have been aware of the conduct that led to the violations; (ii) the payments at issue may not have actually been transferred to Iran; (iii) the bank took remedial action in response to the violations; and (iv) the bank cooperated with OFAC by self-disclosing the alleged violations and agreeing to tolling the matter with extensions.

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

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  • President Trump issues new Iran Executive Order targeting metal sectors; OFAC publishes related FAQs

    Financial Crimes

    On May 8, President Trump issued Executive Order 13871 (E.O. 13871) authorizing the imposition of sanctions on persons who operate in Iran’s iron, steel, aluminum, and copper sectors in order to provide “funding and support for the proliferation of weapons of mass destruction, terrorist groups and networks, campaigns of regional aggression, and military expansion.” Among other things, E.O. 13871 authorizes the Secretaries of Treasury and State to impose sanctions on a foreign financial institution if it is determined that it has knowingly conducted or facilitated any significant financial transactions in these sectors, or for or on behalf of a blocked person. Furthermore, Treasury may prohibit the opening of, or impose strict conditions on maintaining, a correspondent account or payable-through account by such foreign financial institutions in the United States.

    The same day, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) released a set of FAQs connected to the issuance of E.O. 13871, including a discussion of the relevant 90-day wind-down period for affected transactions as well as sanction exceptions.

    Visit here for additional InfoBytes coverage of actions related to Iran.

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

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  • German-headquartered financial institution to pay $1.3 billion for Iran sanctions violations

    Financial Crimes

    On April 15, U.S. regulators announced settlements totaling $1.3 billion with several banking units of a German-headquartered financial institution to resolve allegations by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), the DOJ, the Federal Reserve Board, the New York Department of Financial Services (NYDFS), and the New York County District Attorney’s Office of apparent violations of multiple sanctions programs, including those related to Burma, Cuba, Iran, Libya, Sudan, and Syria. According to OFAC’s announcement, between January 2007 and December 2011, the institution’s banking units in Germany, Austria, and Italy processed thousands of payments through U.S. financial institutions on behalf of sanctioned entities “in a manner that did not disclose underlying sanctioned persons or countries to U.S. financial institutions which were acting as financial intermediaries.”

    According to the roughly $611 million combined settlement agreements (see here, here, and here), OFAC considered various aggravating factors, and noted, among other things, that the institution’s banking units failed to sufficiently enforce policies addressing OFAC sanctions concerns or restrict the processing of transactions in U.S. dollars involving persons or countries subject to sanctions programs administered by OFAC. Additionally, OFAC asserted that the Austrian banking unit claimed on several occasions that OFAC’s sanctions programs “were not legally binding or relevant to [the bank].” OFAC further stated that while the banking units failed to voluntarily self-disclose the alleged violations, they have each agreed to implement and maintain compliance commitments to minimize the risk of the recurrence of the alleged conduct.

    The approximate $611 million penalty will be deemed satisfied by the banking units’ payments to other U.S. regulators, which includes an almost $317 million forfeiture and roughly $468 million fine to the DOJ, $158 million fine to the Federal Reserve, and $405 million fine to the NYDFS.

    Financial Crimes Of Interest to Non-US Persons OFAC Department of Treasury Settlement Iran Sanctions DOJ Federal Reserve NYDFS

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  • U.K. subsea services company and subsidiaries to pay $440,000 for Cuban and Iranian sanctions violations

    Financial Crimes

    On April 11, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced two settlements totaling more than $440,000 with a U.K. subsea services company and certain subsidiaries that operate in the oil and gas industry. The first settlement, for $227,500, resolves potential civil liability for seven alleged violations of the Cuban Assets Control Regulations (CACR). According to OFAC, two of the company/subsidiaries’ Malaysian affiliates produced analytical reports and conducted workshops for oil well drilling projects in Cuban territorial waters related to projects managed by companies including Venezuela’s state-owned oil company, which was previously designated by OFAC in January (see InfoBytes coverage here). OFAC considered various aggravating factors—including that the alleged violations constitute an egregious case—and noted that the company/subsidiaries “willfully violated U.S. sanctions laws and regulations when they knowingly dealt with Cuban interests despite prior notification of their unlawfulness.” OFAC also noted that senior managers “deliberately concealed their dealings with Cuba on multiple occasions.” OFAC considered numerous mitigating factors, including the company/subsidiaries’ voluntarily self-disclosure of the apparent violations and remedial efforts taken to avoid similar violations from occurring in the future.

    The same day OFAC announced a second settlement, this time for $213,866, which resolves potential civil liability for 13 alleged CACR violations. The settlement also resolves three alleged violations of the Iranian Transactions and Sanctions Regulations (ITSR) by the company’s U.S.-based investor-parent company. According to OFAC, the company issued sanctions compliance guidance to all of its subsidiaries with instructions that transactions with Cuba and Iran (including indirect third parties) were prohibited. However, certain subsidiaries disregarded the guidance and allegedly engaged in transactions within Cuban and Iranian territorial waters. In reaching the settlement amount, OFAC determined, among other things, that (i) the company voluntarily self-disclosed the apparent violations; (ii) the alleged violations constitute a non-egregious case; (iii) the subsidiaries have confirmed the conduct has been terminated; and (iv) remedial efforts have been undertaken to minimize the risk of similar violations from occurring in the future.

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

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  • OFAC reaches settlement with tool company for alleged Iranian sanctions violations

    Financial Crimes

    On March 27, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a $1,869,144 settlement with a U.S. tool manufacturer and its China-based subsidiary for 23 alleged violations of the Iranian Transactions and Sanctions Regulations (ITSR). The settlement resolves potential civil liability for the company’s alleged transactions, valued at over $3.2 million, involving the subsidiary’s exporting and attempts to export 23 shipments of power tools and spare parts “with knowledge that such goods were intended specifically for supply, transshipment, or reexportation, directly or indirectly, to Iran.” Because the ITSR generally prohibit non-U.S. subsidiaries of U.S. persons from knowingly engaging in transactions with Iran, this settlement illustrates the importance of implementing OFAC compliance measures at such subsidiaries.

    In arriving at the settlement amount, OFAC considered various aggravating factors and characterized the alleged violations as “an egregious case.” While the company voluntarily self-disclosed the alleged violations on behalf of its subsidiary, OFAC stated, among other things, that the company allegedly failed to implement procedures to monitor and audit the subsidiary’s compliance with applicable sanctions policies post-acquisition. Moreover, OFAC claimed that the subsidiary’s senior management continued to export goods to Iran, despite executing written agreements stating they would not engage in such conduct and attending compliance training sessions.

    OFAC also considered numerous mitigating factors, including that (i) neither the company nor the subsidiary have received a penalty or finding of a violation in the five years prior to the transactions at issue; (ii) the company immediately implemented “substantive remedial efforts,” including halting all of the subsidiary’s exports and hiring an independent investigator; and (iii) the company cooperated with OFAC’s investigation. OFAC noted that the company has committed to taking corrective actions to minimize the risk of recurring conduct.

    Visit here for additional InfoBytes coverage of actions related to Iran.

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

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  • OFAC sanctions individuals and entities for transferring over a billion dollars and euros to IRGC

    Financial Crimes

    On March 26, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against “25 individuals and entities, including a network of Iran, UAE, and Turkey-based front companies,” for allegedly transferring “over a billion dollars and euros” in funds to the Islamic Revolutionary Guard Corps (IRGC) and Iran's Ministry of Defense and Armed Forces Logistics (MODAFL). Among other things, the designated individuals and entities also procured vehicles worth millions of dollars for MODAFL, which was also sanctioned, along with Iran’s IRGC-controlled bank and currency exchange arm, for allegedly providing assistance and banking services to the IRGC-Qods Force. According to OFAC, the sanctions were issued pursuant to Executive Order 13224, which “provides a means by which to disrupt the financial support network for terrorists and terrorist organizations.” As a result, all property and interests in property 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 entering into transactions with them. In addition, OFAC noted that persons who engage in transactions with the designated individuals and entities may be exposed to sanctions themselves or subject to enforcement action. Moreover, OFAC warned foreign financial institutions that, unless an exemption applies, they may be subject to U.S. sanctions if they knowingly facilitate significant transactions for any of the designed individuals or entities.

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

    Financial Crimes Iran Sanctions OFAC Department of Treasury

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  • OFAC sanctions persons connected to an Iran defense entity

    Financial Crimes

    On March 22, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13382 against 14 individuals and 17 entities allegedly connected to Iran's Organization of Defense Innovation and Research (SPND), including “three key SPND front and cover companies, and four of their senior officials.” The State Department previously sanctioned SPND in 2014 for “engaging in or attempting to engage in activities that have materially contributed to, or posed a risk of materially contributing to, the proliferation of [weapons of mass destruction] or their means of delivery.” As a result, all property and interests in property 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 entering into transactions with them. In addition, OFAC noted that persons who engage in transactions with the designated individuals and entities may be exposed to sanctions themselves or subject to enforcement action. Moreover, OFAC warned foreign financial institutions that, unless an exemption applies, they may be subject to U.S. sanctions if they knowingly facilitate significant transactions for any of the designed individuals or entities.

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

    Financial Crimes Iran Sanctions OFAC

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  • OFAC reaches settlement with U.S. company resolving Iranian sanctions violations

    Financial Crimes

    On February 21, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a $506,250 settlement with a Connecticut-based company for five alleged violations of the Iranian Transactions and Sanctions Regulations (ITSR). The settlement resolves potential civil liability for the company’s alleged transactions valued at over $14 million involving the purchase of Iranian-origin cement clinker from a supplier in the United Arab Emirates who misrepresented to the company that the material was not subject to U.S. economic sanctions on Iran.

    Visit here for additional InfoBytes coverage of actions related to Iran.

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

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  • OFAC sanctions Iranian entities and individuals supporting intelligence gathering and cyber targeting of U.S. persons

    Financial Crimes

    On February 13, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against an Iran-based entity and four affiliated Iranian individuals for their alleged roles in providing support for the Islamic Revolutionary Guard Corps-Qods Force’s (IRGC-QF) efforts to recruit and collect intelligence from foreign attendees of international conferences, including facilitating contact between the IRGC-QF and U.S. persons. According to OFAC, the sanctions were issued pursuant to Executive Order 13224, which authorizes “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 same day, OFAC also sanctioned a separate Iran-based entity and six associated individuals, pursuant to Executive Order 13606, for their alleged involvement in the cyber targeting of current and former U.S. government and military personnel, in an effort to gain access to their computer systems and implant malware.

    As a result of the OFAC sanctions, all property and interests in property belonging to the identified individuals and entities and subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from entering into transactions with the individuals and entities. Additionally, OFAC notes that “any foreign financial institution that knowingly facilitates a significant transaction or provides significant financial services for any of the persons designated today pursuant to E.O. 13224 or that are Iranian persons on OFAC’s list of Specially Designated Nationals and Blocked Persons . . . could be subject to U.S. correspondent account or payable-through sanctions.”

    Visit here for additional recent InfoBytes coverage of actions related to Iran.

    Financial Crimes OFAC Department of Treasury Iran Sanctions

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