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  • OFAC settles with travel insurance companies

    Financial Crimes

    On December 9, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a settlement with a U.S.-based property and casualty company for 6,474 alleged violations of the Cuban Assets Control Regulations (CACR). According to OFAC, between August 2010 and January 2015, the company’s Canadian branch provided travel insurance policies to Canadian citizens traveling to Cuba, and continued to do so even though the company knew early on that that policies were being issued related to travel to Cuba but did not investigate it until 2014. In arriving at the settlement amount, OFAC considered various mitigating factors, including the fact that the company voluntarily self-disclosed the issue to OFAC, and that the company enhanced its OFAC compliance. OFAC also considered various aggravating factors, including that the company had knowledge of the violations as early as 2010, and that the travel policies “provided economic benefit to Cuba.”

    Also on December 9, OFAC announced another settlement, this time with a Swiss worldwide insurance and reinsurance company, which formerly was a subsidiary of a U.S. company. The settlement resolves potential civil liability for 20,291 alleged violations of the CACR between January 2010 and December 2014 for issuing insurance policies for Cuba-related travel, because the policies, though global in scope, did not include an exclusionary clause “for risks that would violate U.S. sanctions law.” OFAC considered a number of mitigating factors in determining the settlement amount, including the fact that the company voluntarily self-disclosed the alleged violations and represented that it conducted a risk assessment of its offices and developed compliance policies and procedures. Additionally, OFAC considered several aggravating factors, including that the company issued global policies that did not contain exclusionary clauses, the activity resulted from a pattern or practice spanning several years, and the company is a large and commercially sophisticated financial institution.

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

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  • OFAC publishes new Venezuela-related FAQs

    Financial Crimes

    On December 9, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) published two new Venezuela-related FAQs. FAQ 808 stipulates that a specific license from OFAC is not “ordinarily required” when initiating or continuing U.S. legal proceedings against persons designated or blocked pursuant to OFAC’s Venezuela sanctions programs. Specific licenses are also not required for a U.S. court or court personnel to hear such a case. However, a specific license from OFAC is required in order to enter into a settlement agreement or to enforce a lien, judgment, or other order “through execution, garnishment, or other judicial process purporting to transfer or otherwise alter or affect property or interests in property blocked pursuant to the Venezuela Sanctions Regulations.” OFAC also provides a list of measures where a specific license is required. Additionally, FAQ 809 clarifies when a specific license is required to conduct an auction or other type of sale involving shares of a Venezuelan government entity whose property and interests in property are blocked pursuant to the Venezuela Sanctions Regulations. Additionally, OFAC “urges caution in proceeding with any step in furtherance of measures which might alter or affect blocked property or interests in blocked property.” 

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

    Financial Crimes OFAC Department of Treasury Sanctions Venezuela

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  • OFAC announces settlement with company that allegedly processed payments for sanctioned entity

    Financial Crimes

    On November 25, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a $466,912 civil settlement with a California-based technology company to resolve alleged violations of the Foreign Narcotics Kingpin Sanctions Regulations (FNKSR). According to OFAC, the company voluntarily disclosed that it hosted a sanctioned Slovenian software developer on its platform and collected more than $1 million in payments from customers who downloaded the developer’s apps. The company’s actions—which included hosting, selling, and facilitating the transfer of the developer’s software and associated content, as well as processing 47 payments between 2015 and 2017—were in violation of the FNKSR because OFAC’s List of Specially Designated Nationals and Blocked Persons identified the developer as a significant foreign narcotics trafficker (SDNTK).

    In arriving at the settlement amount, OFAC considered various mitigating factors, including that (i) the company voluntarily disclosed the violations and continued to cooperate by promptly responding to information requests; (ii) the volume and payment amounts were not significant when compared to the company’s annual total volume of transactions; (iii) OFAC has not issued a violation against the company in the five years preceding the earliest date of the transactions at issue; and (iv) the company has strengthened its compliance program to minimize the risk of recurrence.

    OFAC also considered various aggravating factors, including that (i) the alleged conduct demonstrated a “reckless disregard for U.S. sanctions requirements”; (ii) the company’s processing of payments conferred a significant economic benefit to the developer; and (iii) the company failed to timely take corrective actions after identifying the developer as a SDNTK and continued to process payments.

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

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  • OFAC identifies Venezuelan oil tankers as blocked property

    Financial Crimes

    On December 3, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced additions to the Specially Designated Nationals List (SDN List) pursuant to Executive Order 13884, which blocks the property of the Venezuelan government. OFAC identified six tankers of Venezuela’s state-owned oil company as property of the Venezuelan Government and therefore as blocked property, after all the vessels recently transported petroleum to Cuba. A seventh tanker also was identified as a blocked property, pursuant to Executive Order 13850 for operating in the oil sector of the Venezuelan economy, after delivering Venezuelan petroleum to Cuba. According to the press release, the vessel’s name had been changed to circumvent sanctions as it moved Venezuelan oil to Cuba. The SDN List was updated to link the new name of the vessel to its former name. OFAC reiterated that its “regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons.”

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

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  • OFAC updates and issues new Iran-related FAQs

    Financial Crimes

    On November 27, the U.S. Treasury Department's of Foreign Assets Control (OFAC) updated two existing Iran-related FAQs: FAQ 303, which discusses insurance, reinsurance, and underwriting activities; and FAQ 804, which discusses whether sanctions on certain shipping tankers apply to their corporate parent and affiliates. Additionally, OFAC issued three new Iran-related FAQs (FAQ 805-807) covering the sanctions exposure of non-U.S. persons, the types of activities considered “maintenance” in General License K, and the processing of transactions involving a specific shipping tanker under General License K.

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

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  • OFAC amends the Venezuela Sanctions Regulations

    Financial Crimes

    On November 21, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced that the Venezuela Sanctions Regulations (Regulations) have been amended to incorporate additional Executive Orders (E.O.s), a new general license, and a new interpretive provision. Specifically, since the Regulations were published in July 2015, six E.O.s have been issued pursuant to E.O. 13692, “Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Venezuela.” OFAC is amending the Regulations to specify that the prohibitions include all transactions prohibited by E.O. 13692 or any further E.O issued pursuant to the national emergency declared in E.O. 13692. Moreover, OFAC is amending the Regulations to incorporate a general license, which authorizes the U.S. Government to engage in certain activities related to Venezuela (see previous InfoBytes coverage on actions related to Venezuela, including general licenses here). Lastly, an interpretive provision has been added to clarify that “the entry into a settlement agreement or the enforcement of any lien, judgment, arbitral award, decree, or other order through execution, garnishment, or other judicial process purporting to transfer or otherwise alter or affect property or interests in property blocked pursuant to [the Regulations] is prohibited unless authorized pursuant to a specific license issued by OFAC pursuant to this part.” The amendments were effective November 22.

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

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  • OFAC sanctions ISIS procurement and financial networks

    Financial Crimes

    On November 18, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13224 against two Islamic State of Iraq and Syria (ISIS) procurement agents based in Turkey and four ISIS-linked entities operating in Syria, Turkey, and across the Gulf and Europe for allegedly providing financial and logistical support to ISIS. OFAC also took action against an Afghanistan-based organization, as well as two affiliated senior officials, for “using false charitable pretenses as a cover to facilitate the transfer of funds and support the activities of the terrorist group’s branch in Afghanistan, ISIS – Khorasan.” OFAC noted that these sanctions coincide with the twelfth meeting of the Counter ISIS Finance Group, which coordinates efforts to isolate ISIS from the international financial system and eliminate revenue sources. As a result of the sanctions, all property and interests in property of the designated entities and individuals within U.S. jurisdiction are blocked and must be reported to OFAC. OFAC further noted that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated persons, and warned foreign financial institutions that if they knowingly facilitate significant transactions for any Specially Designated Global Terrorists, they may be subject to U.S. correspondent account or payable-through account sanctions.

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

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  • OFAC announces settlement with aviation investment company for sanctions violations

    Financial Crimes

    On November 7, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a $210,600 civil settlement with a U.S. aviation investment company to resolve 12 alleged violations of the Sudanese Sanctions Regulations (SSR), which prohibit U.S. persons from dealing in property and interests in property of the Government of Sudan. The settlement addressed allegations that the company leased three aircraft engines to a United Arab Emirates-incorporated entity, which then subleased the engines to a Ukrainian airline that had the engines installed on an aircraft that was “wet leased” to a Sudanese airline. According to OFAC, the company violated SSR regulations because OFAC’s List of Specially Designated Nationals and Blocked Persons identified the Sudanese airline as meeting the definition of “Government of Sudan” at the time of the alleged transactions.

    In arriving at the settlement amount, OFAC considered various mitigating factors, including that (i) company personnel were not aware of the conduct leading to the alleged violations; (ii) OFAC has not issued a violation against the company in the five years preceding the earliest date of the transactions at issue; and (iii) the company cooperated with the investigation. OFAC also noted that the company undertook several remedial measures in response to the alleged violations, including implementing additional compliance processes such as improving its “Know-Your-Customer screen procedures” and employee training, and obtaining “U.S. law export compliance certificates from lessees and sublessees.”

    OFAC also considered various aggravating factors, including that the violations harmed U.S. sanctions program objectives, and that the company failed to properly monitor the precise whereabouts of the engines during the life of the leases.

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

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  • OFAC sanctions additional Venezuelan government officials, amends and adds general licenses

    Financial Crimes

    On November 5, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against five current Venezuelan government officials. The sanctions—issued pursuant to Executive Order (E.O.) 13884, which prevents all property and property interests of the Government of Venezuela existing within the U.S. or in the possession of a U.S. person from being transferred, paid, exported, withdrawn, or otherwise dealt in (previous InfoBytes coverage here)—reflects Treasury’s continued efforts against persons who offer support to the Maduro regime.

    In conjunction with the sanctions, OFAC also issued amended Venezuelan General License (GL) 34A, which supersedes and replaces GL 34, and authorizes transactions with certain Venezuelan government individuals blocked by E.O. 13884. OFAC also issued GL 35, titled “Authorizing Certain Administrative Transactions with the Government of Venezuela,” which permits certain transactions “necessary and ordinarily incident” to day-to-day operations. New and amended FAQs provide additional guidance.

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

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

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  • OFAC extends two Ukraine-related general licenses

    Financial Crimes

    On November 1, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) announced it extended the expiration date to March 31, 2020 of two Ukraine-related general licenses (GLs) by issuing GL 13M, which supersedes GL 13L, and GL 15G, which supersedes GL 15F. OFAC also noted that GL 15G includes an expanded authorization for certain safety-related activity and a new authorization for certain activities to comply with environmental regulatory requirements.

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

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

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