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  • OFAC settles with global e-commerce, digital service provider over multiple sanctions violations

    Financial Crimes

    On July 8, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a $134,523 settlement with a Washington-based company that provides retail, e-commerce, and digital services worldwide. According to OFAC, due to deficiencies in the company’s sanctions screening process, between 2011 and 2018, the company provided goods and services to OFAC sanctioned persons; to persons located in the sanctioned region or countries of Crimea, Iran, and Syria; and “for persons located in or employed by the foreign missions of Cuba, Iran, North Korea, Sudan, and Syria.” Additionally, the company allegedly accepted and processed orders that primarily consisted of low-value retail goods and services from persons listed on OFAC’s List of Specially Designated Nationals and Blocked Persons who were blocked pursuant to sanctions regulations involving the Democratic Republic of Congo, Venezuela, Zimbabwe, among others. These apparent violations occurred “primarily because [the company’s] automated sanctions screening processes failed to fully analyze all transaction and customer data relevant to compliance with OFAC’s sanctions regulations,” OFAC stated, claiming the company also “failed to timely report several hundred transactions conducted pursuant to a general license issued by OFAC that included a mandatory reporting requirement, thereby nullifying that authorization with respect to those transactions.”

    In arriving at the settlement amount, OFAC considered various mitigating factors, including that the apparent violations were non-egregious and (i) the company voluntarily disclosed the violations and cooperated with the investigation; and (ii) the company has undertaken significant remedial efforts to address the deficiencies and to minimize the risk of similar violations from occurring in the future.

    OFAC also considered various aggravating factors, including that the company failed to exercise due caution or care to ensure its sanctions screening process was able to properly flag transactions involving blocked persons and sanctioned jurisdictions. “This case demonstrates the importance of implementing and maintaining effective, risk-based sanctions compliance controls,” OFAC stated. “[G]lobal companies that rely heavily on automated sanctions screening processes should take reasonable, risk-based steps to ensure that their processes are appropriately configured to screen relevant customer information and to capture data quality issues.”

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

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  • OFAC revokes Venezuela-related general license

    Financial Crimes

    On July 2, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) revoked and archived Venezuela-related General License 37 “Authorizing the Wind Down of Transactions Involving Delos Voyager Shipping Ltd, Romina Maritime Co Inc, and Certain Vessels.” Additionally, OFAC removed eight companies from the Specially Designated Nationals and Blocked Persons list.

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

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  • SBA releases PPP borrower information

    Federal Issues

    On July 6, the Small Business Administration (SBA), in conjunction with the Treasury Department, released the business information of certain Paycheck Protection Program (PPP) loan recipients. For any loan over $150,000, the SBA data release includes business names, addresses, NAICS codes, zip codes, business type, demographic data, non-profit information, name of lender, jobs supported, and a loan amount range. For loans under $150,000, the SBA withheld the business names and addresses in the release. The data release also includes overall statistics regarding dollars lent per state, loan amounts, top lenders, and distribution by industry.  According to data, the PPP has approved over $4.8 million loans, with the average loan size of approximately $106,000. Currently, there are 5,460 participating lenders.

    Federal Issues SBA Small Business Lending Covid-19 Department of Treasury

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  • OFAC sanctions Iranian ship captains for delivering gasoline to Venezuela

    Financial Crimes

    On June 24, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced that the captains of five Iranian U.S.-sanctioned tankers have been added to the Specially Designated National and Blocked Persons List (SDN List) for allegedly delivering gasoline and gasoline components to Venezuela. Treasury emphasized it “will target anyone who supports Iranian attempts to evade United States sanctions,” and stated it will use its authority to disrupt the Iranian regime’s support to Venezuela. As a result of the sanctions, “all property and interests in property of these targets that are in the United States or in the possession or control of U.S. persons is blocked and must be reported to OFAC.” OFAC further noted that its regulations “generally prohibit all dealings by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of blocked or designated persons,” and warned foreign financial institutions that knowingly facilitating significant transactions for any of the designated individuals or entities may subject them to U.S. sanctions.

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

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  • OFAC sanctions four Iranian metal companies

    Financial Crimes

    On June 25, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against four steel, aluminum, and iron companies for being directly or indirectly owned or controlled by Iran’s largest steel manufacturer, which was previously designated for operating in Iran’s steel sector and sanctioned by the Terrorist Financing Targeting Center for taking part in Iran’s terror support network. OFAC’s designations also target four foreign sales agents for being owned or controlled by the designated steel manufacturer, which, combined, “generated tens of millions of dollars annually” and provided “significant contributions to the billions of dollars generated overall by Iran’s steel, aluminum, copper, and iron sectors.” OFAC’s actions are taken pursuant to Executive Order 13871 (covered by InfoBytes here), which authorizes the imposition of sanctions on persons determined to operate in Iran’s iron, steel, aluminum, and copper sectors, which OFAC identified as providing “funding and support for the proliferation of weapons of mass destruction, terrorist groups and networks, campaigns of regional aggression, and military expansion.” 

    As a result of the sanctions, “all property and interests in property of these 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 further 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 blocked or designated persons, unless licensed or exempt,” and warned foreign financial institutions that knowingly facilitating significant transactions to the designated entities may subject them to U.S. correspondent account or payable-through sanctions.

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

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  • OFAC sanctions network for supporting Maduro regime, blocks two vessels

    Financial Crimes

    On June 18, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against three individuals and eight foreign entities for allegedly engaging in activities in or associated with a network attempting to evade U.S. sanctions on Venezuela’s oil sector. Two vessels owned by two of the designated entities were also identified as blocked property pursuant to Executive Order 13850. OFAC noted that the identified persons participated in a scheme involving involved Venezuela’s state-owned oil company, Petroleos de Venezuela, S.A. (PdVSA), in order to benefit “the illegitimate regime of President Maduro.” Both PdVSA and Maduro were previously designated by OFAC (covered by InfoBytes here and here), and OFAC warned that persons who facilitate activity with designated persons “risk losing access to the U.S. financial system.” As a result, all property and interests in property belonging to the identified individuals and entities subject to U.S. jurisdiction are blocked, and “any entities that are owned, directly or indirectly, 50 percent or more by the designated entities, are also blocked.” U.S. persons are generally prohibited from dealing with any property or interests in property of blocked or designated persons.

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

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  • OFAC sanctions Nigerian nationals involved in business email compromise and romance fraud scheme

    Financial Crimes

    On June 16, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a coordinated action with the DOJ against six Nigerian nationals who allegedly conducted a business email compromise (BEC) scheme and engaged in romance fraud to steal more than $6 million from U.S. businesses and individuals. The designated individuals’ actions included, among other things, allegedly impersonating businesses executives to request and receive wire transfers from legitimate business accounts, and using manipulative tactics to gain access to usernames, passwords, and bank accounts. OFAC designated the individuals pursuant to Executive Order 13694, which “targets malicious cyber-enabled activities, including those related to the significant misappropriation of funds or economic resources for private financial gain.” As a result, all property and interests in property belonging to the designated individuals subject to U.S. jurisdiction are blocked, and “U.S. persons generally are prohibited from dealing with them.”

    OFAC also provided additional information regarding BEC scams and romance fraud and referred to the Financial Crimes Enforcement Network’s July 2019 advisory, which addresses efforts designed to restrict and impede BEC scammers and other illicit actors who profit from email compromise fraud schemes (covered by InfoBytes here).

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

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  • OFAC sanctions investors supporting Syrian government

    Financial Crimes

    On June 17, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against 24 individuals and entities for providing significant investment support to the Syrian government. According to OFAC, the designations include Treasury’s “first implementation of sanctions pursuant to the Caesar Syria Civilian Protection Act of 2019,” and involve actions taken against a holding company, a private sector investment venture, and luxury tourism developments. Concurrent with OFAC’s sanctions, the U.S. State Department also designated 15 persons, including President Bashar al-Assad and his wife, pursuant to Executive Order 13984, which focuses on persons identified as “obstructing, disrupting, or preventing a ceasefire or a political solution to the Syrian conflict.” As a result, all property and interests in property belonging to the designated persons and subject to U.S. jurisdiction are blocked and must be reported to OFAC. OFAC further noted that its regulations “generally prohibit all dealings by U.S. persons or those within (or transiting) the United States that involve any property or interests in property of designated persons,” and warned non-U.S. persons that engage in transactions with the designated persons may expose themselves to designation. OFAC also referenced a previously published Fact Sheet (covered by InfoBytes here), which highlights the most pertinent exemptions, exceptions, and authorizations for humanitarian assistance and trade under the Iran, Venezuela, North Korea, Syria, Cuba, and Ukraine/Russia-related​ sanctions programs to ensure humanitarian-related trade and assistance reaches at-risk populations through legitimate and transparent channels during the global Covid-19 pandemic.

    Financial Crimes OFAC Department of Treasury Sanctions Syria Of Interest to Non-US Persons Covid-19

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  • SBA issues PPP “EZ” loan forgiveness application

    Federal Issues

    On June 16, the Small Business Administration (SBA), in consultation with the U.S. Treasury Department, released the Paycheck Protection Program (PPP) EZ Loan Forgiveness Application. According to the PPP Loan Forgiveness Application Form 3508EZ instructions, a borrower may use the streamlined form if it meets one of three criteria: (i) the borrower is self-employed, an independent contractor, or sole proprietor with no employees at the time of application; (ii) the borrower did not reduce salary or wages of any employee by more than 25 percent during the covered period and did not reduce the number of employees or the average paid hours of employees; or (iii) did not reduce salary or wages of any employee by more than 25 percent during the covered period and was unable to operate during the covered period at the same business activity level as prior to February 15, 2020, due to compliance with certain government requirements. Recently, a group of bipartisan senators urged the SBA to streamline the loan forgiveness form arguing that the “11-page forgiveness application” was “beyond the program’s intent” and that it was unnecessarily onerous (covered by InfoBytes here).

    Additionally, the SBA released additional revisions to the interim final rule implementing Section 1102 of the CARES Act, which establishes the PPP, to reflect changes made by the PPP Flexibility Act of 2020. InfoBytes coverage regarding the PPP Flexibility Act changes can be found here.

    Federal Issues Department of Treasury SBA Covid-19 Small Business Lending Flexibility Act

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  • SBA codifies PPP flexibility guidance

    Federal Issues

    Recently, the Small Business Administration (SBA) released an interim final rule (IFR) to incorporate key revisions made to the Paycheck Protection Program (PPP) by the Paycheck Protection Program Flexibility Act of 2020 (Flexibility Act). The Flexibility Act, as previously covered by InfoBytes, took effect June 5. Many of the Flexibility Act’s provisions, such as those related to loan forgiveness and deferral periods for PPP loans, are retroactive to March 27, 2020. The provision related to the maturity date of PPP loans took effect June 5, 2020, and the remaining provisions will take effect upon publication in the Federal Register.

    The IFR codifies several changes made to the PPP, including the following:

    • Reiterates that the last day a lender can obtain an SBA loan number for a PPP loan is June 30, 2020.
    • Amends the end date of the “covered period” for a PPP loan from June 30, 2020 to December 31, 2020.
    • Provides a minimum maturity of five years for all PPP loans made on or after the enactment of the Flexibility Act, and provides an option for borrowers and lenders to mutually agree to extend maturity from two years to five years for loans made before June 5.
    • Clarifies that if a borrower submits its loan forgiveness application within 10 months of the end of the loan forgiveness period, the borrower will not be required to make any payments on the loan before the date SBA remits the forgiven amount to the lender or notifies the lender that loan forgiveness is not allowed.
    • Extends the deferral period on PPP loans by extending the loan forgiveness period from eight weeks to 24 weeks beginning on the date the loan is disbursed. However, borrowers may opt to keep the forgiveness period at eight weeks for loans made prior to June 5, 2020. 
    • Sets the minimum amount that businesses must spend on payroll at 60 percent in order to receive forgiveness, but provides that—consistent with a safe harbor in the Flexibility Act—the SBA, in consultation with Treasury, will “interpret[] this requirement as a proportional limit on nonpayroll costs as a share of the borrower’s loan forgiveness amount, rather than as a threshold for receiving any loan forgiveness.” Revisions to the SBA’s IFRs on loan forgiveness and loan review procedures addressing these amendments are forthcoming.

    The SBA also released an updated borrower application form, as well as a revised lender application.

    Federal Issues Department of Treasury Small Business Lending SBA CARES Act Covid-19 Flexibility Act

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