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  • OFAC sanctions nearly 100 Russian targets; prohibits Russian gold imports

    Financial Crimes

    On June 28, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Orders (E.O.) 14024 and 14065 against 70 entities—many of which, according to OFAC, “are critical to the Russian Federation’s defense industrial base, including State Corporation Rostec, the cornerstone of Russia’s defense, industrial, technology, and manufacturing sector.” Twenty-nine Russian individuals were also designated. “We once again reaffirm our commitment to working alongside our partners and allies to impose additional severe sanctions in response to Russia’s war against Ukraine,” Treasury Secretary Janet L. Yellen said. OFAC’s designations occurred in tandem with actions taken by the U.S. State Department, which include sanctions against an additional 45 entities and 29 individuals as well as visa restrictions against “officials believed to have threatened or violated Ukraine’s sovereignty, territorial integrity, or political independence.” Additionally, OFAC immediately prohibited the importation of Russian gold into the U.S. (unless licensed or otherwise authorized by OFAC). As a result of the sanctions, all property and interests in property belonging to the designated persons in the U.S. are blocked and must be reported to OFAC. Additionally, “any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked.” OFAC noted that U.S. persons are prohibited from participating in transactions with the sanctioned persons unless authorized by a general or specific license.

    A joint alert issued by FinCEN and the U.S. Department of Commerce’s Bureau of Industry and Security also urged financial institutions to remain vigilant against Russian and Belarusian export control evasion and to take a “risk-based approach” for identifying potentially suspicious activity, such as end-use certificates, export documents, or letters of credit-based trade financing. “Financial institutions and the private sector continue to play a key role in disrupting Russia’s efforts to acquire critical goods and technology to support its war-making efforts,” OFAC stated in its announcement.

    On the same day, OFAC issued several new Russia-related general licenses (GL): (i) GL 39 authorizes the wind down of transactions ordinarily incident and necessary involving State Corporation Rostec that are normally prohibited by E.O. 14024; (ii) GL 40 authorizes “all transactions ordinarily incident and necessary to the provision, exportation, or reexportation of goods, technology, or services to ensure the safety of civil aviation involving one or more of” certain blocked entities; (iii) GL 41 authorizes certain transactions related to agricultural equipment that are normally prohibited by the Russian Harmful Foreign Activities Sanctions Regulations; (iv) GL 42 authorizes certain transactions with the Federal Security Services; and (v) GL 43 authorizes the divestment or transfer of debt or equity of, and wind down of derivative contracts involving the Public Joint Stock Company Severstal or Nord Gold PLC.

    OFAC also published a Determination Pursuant to Section 1(a)(i) of Executive Order 14068 concerning prohibitions related to the importation of Russian gold and issued one new and one amended frequently asked question.

    The Russian Elites, Proxies, and Oligarchs (REPO) Task Force also issued a joint statement summarizing actions taken by REPO members against sanctioned Russians. The efforts have led to more than $30 billion worth of sanctioned Russians’ assets being blocked or frozen and has heavily restricted sanctioned Russians’ access to the international financial system.

    Financial Crimes Of Interest to Non-US Persons Department of Treasury OFAC OFAC Designations OFAC Sanctions Russia Ukraine Ukraine Invasion Department of State FinCEN Department of Commerce

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  • OFAC sanctions members of Russian extremist group

    Financial Crimes

    On June 15, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13224, as amended, against two key supporters of a Russian extremist group. The U.S. State Department previously designated the extremist group as a Specially Designated Global Terrorist (SDGT) organization in 2020 for having provided training for acts of terrorism. Concurrent with OFAC’s action, the State Department is also designating an individual for posing a significant risk of committing acts of terrorism. According to Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson, the extremist group “has sought to raise and move funds using the international financial system with the intent of building a global network of violent groups that foster extremist views and subvert democratic processes.”

    As a result of the sanctions, all property and interests in property belonging to the sanctioned individuals in the U.S. are blocked and must be reported to OFAC. Additionally, “any entities that are owned, directly or indirectly, 50 percent or more by them, individually, or with other blocked persons, that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.” OFAC noted that U.S. persons are prohibited from participating in transactions with the sanctioned persons unless authorized by an OFAC general or specific license or are otherwise exempt.

    OFAC further warned that engaging in certain transactions with the designated individuals entails risk of secondary sanctions, and cautioned that it can also “prohibit or impose strict conditions on the opening or maintaining in the United States of a correspondent account or a payable-through account of a foreign financial institution that either knowingly conducted or facilitated any significant transactions on behalf of a SDGT, or that, among other things, knowingly facilitates a significant transaction for [the extremist group] or certain persons designated for their connection to [the extremist group].”

    Financial Crimes Of Interest to Non-US Persons Department of Treasury OFAC OFAC Sanctions OFAC Designations SDN List Russia Department of State

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  • Agencies release risk advisory for businesses operating in Sudan

    Financial Crimes

    On May 23, the U.S. Departments of Treasury, State, Commerce, and Labor issued an advisory, Risks and Considerations for U.S. Businesses Operating in Sudan, highlighting growing risks to American businesses and individuals associated with conducting business with Sudanese State-Owned Enterprises. According to the advisory, the risks outlined come from recent actions undertaken by Sudan’s Sovereign Council and security forces under the military’s control and could adversely impact U.S. businesses, individuals, other persons, and their operations in the country and the region. The advisory also noted that the U.S. recently imposed sanctions on the Central Reserve Police (CRP) for serious human rights abuse under Executive Order 13818. As previously covered by InfoBytes, OFAC noted that, the “CRP has used excessive force against pro-democracy protesters peacefully demonstrating against the military-led overthrow of the civilian-led transitional government in Sudan.” As a result of the sanctions, all property and interests in property belonging to the sanctioned person subject to U.S. jurisdiction are blocked and must be reported to OFAC. OFAC also noted that its regulations generally prohibit all dealings by U.S. persons that involve any property or interests in property of designated persons.

    Financial Crimes Department of Treasury Department of State Department of Commerce Department of Labor Of Interest to Non-US Persons OFAC Sudan

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  • DOJ to strengthen kleptocracy asset recovery

    Financial Crimes

    On April 28, the DOJ issued a fact sheet outlining legislative proposals to strengthen kleptocracy asset recovery as part of the Biden administration’s efforts “to isolate and target the crimes of Russian officials, government-aligned elites, and those who aid or conceal their unlawful conduct.” The proposed measures would “streamline asset forfeiture proceedings in certain circumstances” and also:

    • Enable the DOJ and Treasury and State Departments to work together to return forfeited kleptocrat funds to remediate harms caused to Ukraine;
    • Expand forfeiture authorities under the International Emergency Economic Powers Act (IEEPA) to include property used to facilitate the violations of sanctions and “amend IEEPA’s penalty provision to extend the existing forfeiture authorities to facilitating property, not just to proceeds of the offenses”;
    • Expand the definition of “racketeering activity” in the Racketeer Influenced and Corrupt Organizations Act to include criminal violations of IEEP and the Export Control Reform Act to improve the U.S.’s ability to investigate and prosecute sanctions evasion and export control violations;
    • Extend the statute of limitations for prosecuting sanctions violations and the statute of limitations for seeking forfeitures based on foreign offenses from five years to 10 years; and
    • Improve the U.S.’s ability to work with international partners to facilitate enforcement of foreign restraint and forfeiture orders for criminal property and improve the ability to take these actions in the U.S.

    As previously covered by InfoBytes, the DOJ launched “Task Force KleptoCapture,” an “interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions, and economic countermeasures that the United States has imposed, along with allies and partners,” in order to “isolate Russia from global markets” in March. The task force has since engaged in numerous transatlantic efforts to sanction numerous Russian elites, Russia’s largest privately-owned aircraft, and one of the world’s largest superyachts (covered by InfoBytes here), and has “seized approximately $625,000 associated with sanctioned parties held at nine U.S. financial institutions.”

    Find continuing InfoBytes coverage on the U.S. sanctions response to Russia’s invasion of Ukraine here.

    Financial Crimes DOJ Digital Assets Russia Ukraine Ukraine Invasion Of Interest to Non-US Persons Biden RICO OFAC Sanctions Department of Treasury Department of State

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  • OFAC sanctions facilitators of Russian sanctions evasion

    Financial Crimes

    On April 20, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 14024 against several entities and numerous individuals for attempting to evade sanctions imposed by the U.S. and its international partners on Russia. Included in the designations are a Russian commercial bank, a global network comprised of more than 40 individuals and entities led by a previously designated Russian oligarch (“including organizations whose primary mission is to facilitate sanctions evasion for Russian entities”), and several companies operating in Russia’s virtual currency mining industry. According to OFAC, this is the first time a virtual currency mining company has been sanctioned. In coordination with OFAC’s sanctions, the Department of State took further action by imposing visa restrictions on 635 Russian nationals and three Russian Federation officials for their involvement in human rights abuses, as well as 17 individuals responsible for undermining democracy in Belarus.

    As a result of the sanctions, all property and interests in property belonging to the sanctioned entities in the U.S. are blocked and must be reported to OFAC. Additionally, “any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked.” OFAC noted that U.S. persons are prohibited from participating in transactions with the sanctioned persons unless authorized by a general or specific license.

    On the same day, OFAC issued new frequently asked question guidance clarifying obligations for credit card operators with regard to payment cards issued by sanctioned Russian financial institutions. OFAC also published two Russia-related general licenses: (i) General License 28 authorizes certain transactions involving a public joint stock company that are “ultimately destined for or originating from Afghanistan”; and (ii) General License 29 authorizes the wind down of transactions involving the same public joint stock company.

    Find continuing InfoBytes coverage on the U.S. sanctions response to Russia’s invasion of Ukraine here.

     

    Financial Crimes Of Interest to Non-US Persons Department of Treasury OFAC OFAC Designations OFAC Sanctions Russia Ukraine Ukraine Invasion Department of State SDN List

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  • Agencies issue Burma advisory

    Financial Crimes

    On January 26, OFAC, along with Departments of State, Commerce, Homeland Security, Labor, and the Office of the U.S. Trade Representative, published a business advisory titled Risks and Considerations for Businesses and Individuals with Exposure to Entities Responsible for Undermining Democratic Processes, Facilitating Corruption, and Committing Human Rights Abuses in Burma (Myanmar), which informs the public of the heightened risks associated with conducting business in Burma, specifically business that involves the military regime. According to the announcement, since the military coup in 2021, the military has engaged in serious human rights abuse against the people of Burma. The specific entities and sectors of greatest concern for corruption and other illicit finance risks include, among other things, state owned enterprise and real-estate and construction projects.

    Financial Crimes Burma Of Interest to Non-US Persons OFAC Department of Treasury Department of State Department of Commerce Department of Homeland Security Department of Labor U.S. Trade Representative

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  • OFAC sanctions Nicaraguan officials connected to Ortega-Murillo regime

    Financial Crimes

    On January 10, the U.S. Treasury Department’s Office of Foreign Assets Control announced sanctions pursuant to Executive Order 13851 against six Nicaraguan government officials. The sanctions, taken in conjunction with EU sanctions adopted the same date, relate to Nicaraguan President Daniel Ortega and Vice President Rosario Murillo’s regime’s ongoing “subjugation of democracy through effectuating sham elections, silencing peaceful opposition, and holding hundreds of people as political prisoners.” Complementing OFAC’s actions, the State Department “impose[d] visa restrictions on individuals complicit in undermining democracy in Nicaragua, including mayors, prosecutors, and university administrators, as well as police, prison, and military officials.” As a result of the sanctions, all property and interests in property of the sanctioned persons subject to U.S. jurisdiction are blocked and must be reported to OFAC. Additionally, “any entities that are owned, directly or indirectly, 50 percent or more in the aggregate by one or more of such persons are also blocked.”

    Financial Crimes Of Interest to Non-US Persons OFAC Department of Treasury OFAC Sanctions OFAC Designations SDN List EU Department of State

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  • OFAC sanctions Iranians for attempting to influence 2020 U.S. presidential election

    Financial Crimes

    On November 18, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13848 against six Iranian individuals and one Iranian entity for allegedly attempting to influence the 2020 U.S. presidential election. According to OFAC, “state-sponsored Iranian cyber actors executed an online operation to intimidate and influence American voters, and to undermine voter confidence and sow discord” by obtaining or attempting to obtain U.S. voter information, sending threatening and intimidating emails to voters, crafting and disseminating “disinformation pertaining to the election and election security,” and illicitly accessing “content management accounts of several online U.S. media entities, which resulted in their ability to edit and create fraudulent content.” As a result, all property and interests in property of the sanctioned persons subject to U.S. jurisdiction are blocked, as well as any entities owned 50 percent or more by such persons. U.S. persons are also generally prohibited from entering into transactions with the sanctioned persons. Additionally, OFAC warned that “financial institutions and other persons that engage in certain transactions or activities with the sanctioned entity and individuals may expose themselves to sanctions or be subject to an enforcement action.”

    The sanctions are part of a collective effort with the U.S. Department of State and the FBI. Concurrent with the designations, the DOJ unsealed an indictment against two of the sanctioned individuals. The DOJ charged the Iranian nationals with (i) conspiracy to commit computer fraud and abuse, voter intimidation, and transmission of interstate threats, (ii) voter intimidation, and (iii) transmission of interstate threats. One of the individuals was additionally charged with unauthorized computer intrusion and computer fraud. 

    Financial Crimes Of Interest to Non-US Persons OFAC Department of Treasury OFAC Sanctions OFAC Designations Iran DOJ Indictment Department of State FBI SDN List

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  • OFAC sanctions key ISIS-K financial facilitator

    Financial Crimes

    On November 22, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order (E.O.) 13224, as amended, against an individual it claims is acting as a financial facilitator for the Islamic State’s Khorasan Province (ISIS-K). According to OFAC, ISIS-K was previously designated as a Specially Designated Global Terrorist under E.O. 13224, and as a Foreign Terrorist Organization by the Department of State in 2016. The designated individual, OFAC stated, has provided support to ISIS-K’s Afghani operations “by facilitating international financial transactions that fund human trafficking networks and facilitating the movement of foreign fighters who seek to escalate tensions in Afghanistan and the region.” According to OFAC Director Andrea Gacki, this designation “underscores the United States’ determination to prevent ISIS-K and its members from exploiting the international financial system to support terrorist acts in Afghanistan and beyond.” OFAC’s action was handled in coordination with the Department of State, which designated three individuals as Specially Designated Global Terrorists for their roles as leaders of ISIS-K.

    As a result, all property and interests in property belonging to the designated individual subject to U.S. jurisdiction are blocked, and any “entities that are owned, directly or indirectly, 50 percent or more by them, individually, or with other blocked persons, that are in the United States or in the possession or control of U.S. persons must be blocked and report to OFAC.” U.S. persons are generally prohibited from engaging in transactions with the designated individual unless authorized by a general or specific OFAC license or otherwise exempt. OFAC warned that the agency “can prohibit or impose strict conditions on the opening or maintaining in the United State[s] of a correspondent account or a payable-through account by a foreign financial institution that either knowingly conducted or facilitated any significant transaction on behalf of a Specially Designated Global Terrorist.” OFAC further noted that that engaging in certain transactions with the designated individual “entails risk of secondary sanctions pursuant to E.O. 13224, as amended.”

    Financial Crimes OFAC Department of Treasury OFAC Designations OFAC Sanctions SDN List Department of State

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  • OFAC sanctions Russian officials

    Financial Crimes

    On August 20, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) and the Department of State joined the United Kingdom in announcing sanctions pursuant to Executive Order 13382 against nine Russian individuals and two Russian entities in connection with poisoning or Russia’s chemical weapons program under a Russian opposition leader. According to OFAC, this is the third time Treasury has used discretionary authority to respond to Russia’s use of a chemical agent against its own citizens (covered by InfoBytes here). The Department of State also designated several entities and persons pursuant to E.O. 13382 for “having engaged, or attempted to engage, in activities or transactions that have materially contributed to, or pose a risk of materially contributing to, the proliferation of weapons of mass destruction or their means of delivery” by Russia. As a result of the sanctions, all of the property and interests in property of the designated persons that are in the U.S. or in the possession or control of U.S. persons, as well as any entities that are owned 50 percent or more by the designated persons, are blocked and must be reported to OFAC. Additionally, OFAC regulations generally prohibit U.S. persons from participating in transactions with the designated persons unless exempt or otherwise authorized by an OFAC general or specific license. OFAC further warned that “any foreign person who knowingly facilitates a significant transaction or transactions for or on behalf of one of these persons risks being sanctioned.”

     

    Financial Crimes OFAC Department of Treasury OFAC Sanctions SDN List Of Interest to Non-US Persons Russia Department of State OFAC Designations

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