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  • OFAC issues amended Venezuela-related general license

    Financial Crimes

    On November 17, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued Venezuela General License (GL) 8G, “Authorizing Transactions Involving Petróleos de Venezuela, S.A. (PdVSA) Necessary for the Limited Maintenance of Essential Operations in Venezuela or the Wind Down of Operations in Venezuela for Certain Entities.” GL 8G supersedes GL 8F and extends the expiration date for certain authorizations through June 3, 2021 that would otherwise be prohibited under Executive Orders 13850, 13857, or 13884.

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

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

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  • President Trump issues Executive Order prohibiting securities investments that finance Chinese military companies

    Financial Crimes

    On November 12, President Trump issued an Executive Order (E.O.) on “Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies.” The E.O. generally prohibits “any transaction in publicly traded securities, or any securities that are derivative of, or are designed to provide investment exposure to such securities, of any Chinese military company. . .by any US person.” The E.O. establishes the deadlines for divestment of investments in companies currently listed as Chinese military companies as well as companies that later may be added to the list of Chinese military companies pursuant to Section 1237, or those that the Secretary of the Treasury publicly lists as meeting the criteria set forth in Section 1237(b).

    Among other things, the prohibitions apply “except to the extent provided by statutes, or in regulations, order, directives, or licenses that may be issued pursuant to the order, and not withstanding any contract entered into or any license or permit granted before the date of the order.” The E.O. also prohibits any transactions by U.S. persons or within the United States that evade or avoid, have the purpose of evading or avoiding, cause a violation of, or attempt to violate the provisions set forth in the order, as well as any conspiracy to violate any of these prohibitions. Additionally, the Secretary of Treasury—after consulting with heads of other executive departments as deemed appropriate—is authorized to take actions, including promulgating rules and regulations, to carry out the purposes of the E.O.

    Financial Crimes Trump Department of Treasury China Of Interest to Non-US Persons Securities

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  • OFAC sanctions network for procuring goods for Iranian military firm

    Financial Crimes

    On November 10, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against a network of six companies and four individuals for allegedly facilitating the procurement of sensitive goods—including U.S.-origin electronic components—for an Iranian military firm that was previously designated by the U.S. and the European Union for being owned or controlled by Iran’s Ministry of Defense and Armed Forces Logistics. The designations are being taken pursuant to Executive Order 13382, which aims to freeze the assets of proliferators of weapons of mass destruction along with their supporters. As a result, all property and interests in property belonging to, or owned by, the designated persons subject to U.S. jurisdiction are blocked, and U.S. persons are also generally prohibited from engaging in transactions with them. OFAC further warned foreign financial institutions that knowingly facilitating significant transactions or providing significant support to the designated persons may subject them to U.S. sanctions.

    Concurrent with OFAC’s designations, the U.S. Attorney’s Office for the District of Columbia filed a criminal complaint against two of the designated entities and one of the designated individuals for conspiring to violate U.S. export laws and sanctions against Iran.

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

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  • OFAC sanctions Lebanese government official for corruption

    Financial Crimes

    On November 6, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13818 against an individual for being a current or former high-level government official responsible for allegedly being “at the forefront of corruption in Lebanon.” According to OFAC, the sanctioned individual was involved in several projects that “steered Lebanese government funds to individuals close to him through a group of front companies” while serving as Minister of Energy. OFAC also designated the individual “for being a current or former government official, or a person acting for or on behalf of such an official, who is responsible for or complicit in, or who has directly or indirectly engaged in corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery.” As a result of the sanctions, all property and interests in property of the individual, “and of any entities that are owned, directly or indirectly, 50 percent or more by him, individually, or with other blocked persons, that are in the United States or in the possession or control of U.S. persons, are blocked and must be reported to OFAC.” OFAC noted that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated individual, including “the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person or the receipt of any contribution or provision of funds, goods or services from any such person.”

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

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  • OFAC sanctions entities for Iranian petrochemical sales

    Financial Crimes

    On October 29, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13846 against eight entities for their alleged “involvement in the sale and purchase of Iranian petrochemical products brokered by [a petrochemical company]. . .designated by Treasury in January 2020.” The designated entities—based in Iran, China, and Singapore—allegedly aided the petrochemical company’s efforts to process and move funds generated by the sale of these products, which were then used to finance the Iranian regime’s “destabilizing agenda of support to corrupt regimes and terrorist groups throughout the Middle East and, more recently, Venezuela.”

    In addition, OFAC also updated its List of Specially Designated Nationals and Blocked Persons to add additional aliases for an Iraq-based bank that was previously designated, among other things, for being “used by Iran’s Central Bank Governor to covertly funnel millions of dollars on behalf of the IRGC-QF to support Hizballah.”

    As a result, all property and interests in property belonging to, or owned by, the designated persons subject to U.S. jurisdiction are blocked, and U.S. persons are also “generally prohibited from engaging in transactions with them.” OFAC further warned foreign financial institutions that knowingly facilitating significant transactions or providing significant support to the designated persons may subject them to sanctions that terminate their access to the U.S. financial system.

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

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  • OFAC warns of sanctions risks for high-value artwork

    Financial Crimes

    On October 30, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued an art advisory highlighting characteristics and vulnerabilities in the high-value artwork market that pose sanctions risks. The advisory advises “art galleries, museums, private art collectors, auction companies, agents, brokers, and other participants in the art market” of the importance of maintaining risk-based compliance programs to mitigate exposure to sanctions-related violations. The advisory further emphasizes that the “Berman Amendment” to the International Emergency Economic Powers Act and the Trading with the Enemy Act “does not categorically exempt all dealings in artwork from OFAC regulation and enforcement.” According to OFAC, shell companies and intermediaries are often used to remit and receive payments for high-value artwork. The anonymity that these channels provide, OFAC cautions, allows blocked and other illicit persons to cloak their true identities and helps conceal prohibited conduct from law enforcement and regulators.

    The report references previously issued OFAC guidance and discusses a report issued by the U.S. Senate Permanent Subcommittee on Investigations in July (covered by InfoBytes here), which details findings from a two-year investigation related to how Russian oligarchs appear to have used the art industry to evade U.S. sanctions. According to the report, while the art industry is largely unregulated, and, unlike financial institutions, is not subject to the Bank Secrecy Act (BSA) and is not required to maintain anti-money laundering (AML) and anti-terrorism financing controls, sanctions imposed by OFAC do apply to the industry, and U.S. persons are not permitted to conduct business with sanctioned individuals or entities.

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

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  • Fed lowers Main Street Lending Program minimum loan size

    Federal Issues

    On October 30, the Federal Reserve Board (Fed) announced an adjustment to the terms of the Main Street Lending Program (MSLP) in order to expand support to smaller businesses during the Covid-19 pandemic. Specifically, the Fed reduced the minimum loan size for the three Main Street facilities from $250,000 to $100,000 and adjusted the associated fees.

    Additionally, the Fed and the U.S. Department of Treasury issued an FAQ clarifying that up to $2 million of Paycheck Protection Program (PPP) loans may be excluded for purposes of determining the maximum loan size under the MSLP. If a borrower has applied for forgiveness, the amount that is eligible for forgiveness may be excluded from the “existing outstanding and undrawn available debt” calculation under the MSLP program. If the borrower has not yet applied for forgiveness, the amount to be excluded from the calculation is the amount that “its principal executive officer has a reasonable, good-faith basis to believe will be forgiven in accordance with applicable PPP requirements.”

    Federal Issues Covid-19 Federal Reserve Department of Treasury SBA

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  • OFAC amends CACR to remove certain remittance-related general authorizations

    Financial Crimes

    On October 26, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a final rule amending the Cuban Assets Control Regulations (CACR) “to further implement portions of the President’s foreign policy toward Cuba to deny the Cuban government access to funds in connection with remittances to Cuba.” Among other things, the final rule amends several general licenses to remove any transactions that involve entities or subentities identified on the State Department’s Cuba Restricted List (CRL) from the scope of certain remittance-related general authorizations. According to OFAC, the CRL is a list of “entities and subentities under the control of, or acting for or on behalf of, the Cuban military, intelligence, or security services or personnel with which direct financial transactions would disproportionately benefit such services or personnel at the expense of the Cuban people or private enterprise in Cuba.” Additionally, the final rule also clarifies that transactions that relate to the collection, receipt or forwarding of remittances involving an identified entity or subentity are “not authorized as an ordinarily incident transaction where the terms of the general or specific license expressly exclude any such transactions.” In conjunction with the announcement of the final rule, OFAC also updated and issued several new Frequently Asked Questions. The final rule takes effect November 26, allowing for a 30-day implementation period in order to allow for technical implementation of the additional restrictions.

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

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  • OFAC sanctions Russian government research institution connected to malware

    Financial Crimes

    On October 23, the U.S. Treasury Department’s Office of Foreign Assets Control announced sanctions pursuant to Section 224 of the Countering America’s Adversaries Through Sanctions Act against a Russian government research institution. According to OFAC, the institution knowingly, on behalf of the Government of the Russian Federation, engaged in significant activities that undermined cybersecurity. As a result, all property and interests in property of the sanctioned person, and any entities owned 50 percent or more by such person subject to U.S. jurisdiction, are blocked. U.S. persons are also generally prohibited from entering into transactions with the sanctioned persons. Additionally, non-U.S. persons who engage in certain transactions with the sanctioned person may also be exposed to sanctions.

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

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  • OFAC sanctions Iranian Ministry of Petroleum and others for IRGC-QF support

    Financial Crimes

    On October 26, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) designated the Iranian Ministry of Petroleum and two oil companies, as well as multiple entities and individuals, including front companies, subsidiaries, and senior executives, for allegedly providing financial support to Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), pursuant to Executive Order 13224. Additionally, OFAC designated four persons involved in the sale of Iranian gasoline to “the illegitimate Maduro regime in Venezuela.” As a result, all property and interests in property belonging to the identified individuals subject to U.S. jurisdiction are blocked, and “any entities that are owned, directly or indirectly, 50 percent or more by such persons, are also blocked.” U.S. persons are generally prohibited from dealing with any property or interests in property of blocked or designated persons, and OFAC warned foreign financial institutions that if they knowingly facilitate significant transactions for the designated persons they “risk exposure to sanctions that could sever their access to the U.S. financial system or block their property and interests in property under U.S. jurisdiction.”

    Concurrently, OFAC issued amended General License 8A, “Authorizing Certain Humanitarian Trade Transactions Involving the Central Bank of Iran or the National Iranian Oil Company,” which replaces and supersedes GL 8 and allows certain humanitarian trade transactions involving one of the designated oil entities.

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

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