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  • OFAC sanctions Columbian drug trafficker

    Financial Crimes

    On September 16, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to the Foreign Narcotics Kingpin Designation Act against a leader of a Columbia-based international drug trafficking organization. OFAC noted that the designated individual “strategically located maritime corridors in northern Colombia and collects a per kilogram tax from narcotics traffickers for protection and safe passage of multi-ton shipments of narcotics through the [organization’s] area of control.” OFAC also designated three individuals and two entities closely related to the organization’s leader for providing material support to the narcotics trafficking activities. As a result of the sanctions, all property and interests in property belonging to the sanctioned individual subject to U.S. jurisdiction are blocked and must be reported to OFAC. U.S. persons are also generally prohibited from engaging in any dealings involving the property or interests in property of blocked or designated persons.

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

  • Treasury, FHFA suspend provisions of 2021 PSPAs

    Agency Rule-Making & Guidance

    On September 14, the U.S. Treasury Department and FHFA announced the suspension of certain requirements that were added on January 14 to the Preferred Stock Purchase Agreements (PSPAs) between Treasury and Fannie Mae and Freddie Mac (collectively, “GSEs”). According to the announcement, “FHFA will continue to measure, manage, and monitor the financial and operational risks of the Enterprises to ensure that they operate in a safe and sound manner and consistent with the public interest.” In addition, during the suspension, the FHFA will review the requirements and consider other revisions, and notes that the suspensions “do not affect the [GSEs] ability to build or retain capital.” 

    Agency Rule-Making & Guidance Department of Treasury FHFA Fannie Mae Freddie Mac GSE

  • OFAC issues amended Venezuela-related general license and FAQ

    Financial Crimes

    On September 10, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued Venezuela General License (GL) 5H, which supersedes GL 5G and authorizes certain transactions otherwise prohibited under Executive Orders 13835 and 13857 related to, or that provide financing for, dealings in the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or after January 22, 2022. Concurrently, OFAC amended a Venezuela-related frequently asked question regarding GL 5H.

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

  • OFAC reaches settlement with Texas technology company

    Financial Crimes

    On September 9, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a roughly $190,000 settlement with a Texas-based company for allegedly knowingly exporting goods, technology, and services in violation of the Iranian Transactions and Sanctions Regulations. According to OFAC’s web notice, between December 2013 and May 2018, the company exported 49 products from the U.S. to two third-country distributors with prior knowledge, or reason to know, that its products were intended specifically for a reseller in Iran. The Iranian reseller then sold three of the exported products to an entity on OFAC’s SDN List, at the time of the relevant exports. On at least three occasions, the company also allegedly provided support, software updates, reseller training, or other services in support of sales to customers located in Iran.

    In arriving at the settlement amount, OFAC considered various aggravating factors, including, among other things, that the company: (i) demonstrated reckless disregard for U.S. sanctions regulations by authorizing distribution and support of its goods; (ii) possessed knowledge of the conduct; and (iii) “caused harm to U.S. sanctions objectives by facilitating access to the bank’s products and support services by resellers and users in Iran.”

    OFAC also considered various mitigating factors, including, among other things, that the: (i) “volume and total amount of payments underlying the Apparent Violations was not significant compared to [the company’s] overall revenue”; (ii) the company demonstrated remedial actions, including establishing export controls and sanctions compliance policies and procedures; and (iii) the company cooperated with OFAC’s investigation.

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

  • OFAC sanctions Iranian officials in plot to kidnap American citizen in the U.S.

    Financial Crimes

    On September 3, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13553 against four Iranian intelligence operatives who allegedly targeted a U.S. citizen and Iranian dissidents in a wide-ranging campaign to silence critics of the Iranian government. According to OFAC, a senior official led a network that plotted to kidnap a U.S. journalist, which failed and led to the indictment of members of the network. OFAC also noted that this network has played a key role in the Iranian government’s brutal human rights abuses against Iranians. 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,” and warned foreign financial institutions that knowingly facilitating significant transactions or providing significant financial services to the designated individuals may subject them to U.S. correspondent account or payable-through sanctions.

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

  • Treasury seeks info on climate-related financial risks in the insurance sector

    Agency Rule-Making & Guidance

    On August 31, the U.S. Treasury Department announced a request for information (RFI) seeking public comments on the Federal Insurance Office’s (FIO) future work related to the insurance sector and climate-related financial risks. The RFI is in response to an executive order issued by President Biden in May, which instructed financial regulators to take steps to mitigate, among other things, climate-related risk related to the financial system (covered by InfoBytes here). Among other things, the FIO will focus on the following initial climate-related priorities: (i) “assessing climate-related issues or gaps in the supervision and regulation of insurers, including their potential impacts on U.S. financial stability”; (ii) “assessing the potential for major disruptions of private insurance coverage in U.S. markets that are particularly vulnerable to climate change impacts, as well as facilitating mitigation and resilience for disasters”; and (iii) “increasing FIO’s engagement on climate-related issues and leveraging the insurance sector’s ability to help achieve climate-related goals.” Responses will help FIO monitor and assess the implications of climate-related financial risks for the insurance sector, and help FIO better understand how to collect “high-quality, reliable, and consistent data” required to accomplish FIO’s objectives.

    Agency Rule-Making & Guidance Department of Treasury Climate-Related Financial Risks Risk Management Insurance

  • OFAC issues technical notice for website and sanctions list users

    Financial Crimes

    On August 27, the U.S. Treasury Department’s Office of Foreign Assets (OFAC) issued a technical notice for website and sanctions list data file users. The notice provides users information on measures for ensuring application configurations are updated pending the release of a replacement public certification that will be distributed worldwide and will take effect September 1.

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

  • OFAC settles with Romanian bank for Iranian and Syrian sanctions violations

    Financial Crimes

    On August 27, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a $862,318 settlement with a Romania-based bank and its U.S. parent company to resolve 98 apparent violations of OFAC’s Iran and Syria sanctions programs. According to OFAC’s web notice, the bank processed 98 commercial transactions totaling more than $3.5 million through U.S. banks on behalf of parties located in Iran and Syria. OFAC considered various aggravating factors in arriving at the settlement amount, including that the bank (i) demonstrated “a reckless disregard for U.S. sanctions regulations by failing to implement appropriate controls to comply with applicable U.S. regulations with respect to payments it processed” that had a “sanctions nexus that transited the U.S. financial system” or “after the bank became a foreign subsidiary of a U.S. person”; (ii) knew, or had reason to know, “it was processing payments on behalf of persons in Iran and Syria because of underlying finance and trade documents in its possession that referenced those countries”; and (iii) conveyed more than $3.5 million in economic benefit to Iranian and Syrian persons, thus causing harm to the integrity of U.S. sanctions programs and their associated policy objectives.

    OFAC also considered various mitigating factors, including that the bank voluntarily self-disclosed the apparent violations and the apparent violations constitute a non-egregious case. OFAC also determined that the bank (i) has not received a penalty notice from OFAC in the preceding five years; (ii) cooperated with OFAC’s investigation, conducted a lookback, and entered into a tolling agreement; and (iii) has undertaken remedial measures to ensure sanctions compliance. As such, OFAC noted that under its Economic Sanctions Enforcement Guidelines, the base civil money penalty amount is applicable in this matter with the final settlement amount reflecting OFAC’s consideration of general factors.

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

  • OFAC reaches $2.3 million settlement with Chinese bank

    Financial Crimes

    On August 26, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a roughly $2.3 million settlement with a UK subsidiary of a Chinese financial institution for allegedly processing transactions in violation of the Sudanese Sanctions Regulations, “which prohibited the exportation, directly or indirectly, to Sudan of any goods, technology, or services from the United States.” According to OFAC’s web notice, between September 2014 and February 2016, the bank processed 111 commercial transactions totaling more than $40 million through U.S. correspondent banks on behalf of parties in Sudan. In conducting a lookback review to identify potential Sudan-related transactions, the bank identified two customers who processed transactions through the U.S. financial system. For both of these customers, the bank’s internal customer database did not reference Sudan in the name or address fields, and messages processed on behalf of these customers by the bank through U.S. banks also failed to include any references to Sudan.

    In arriving at the settlement amount, OFAC considered various aggravating factors, including, among other things, that (i) the bank demonstrated reckless disregard for U.S. sanctions regulations by processing the transactions “despite having account and transactional information indicating the Sudanese connection to the accounts and in contravention of the bank’s existing policies and procedures”; (ii) certain bank personnel responsible for processing the transactions knew that the payments were related to entities in Sudan; (iii) the bank conferred economic benefit to a comprehensively sanctioned country; and (iv) the bank “is a commercially sophisticated financial institution that processes transactions internationally.”

    OFAC also considered various mitigating factors, including, among other things, that the bank (i) has not received a penalty notice from OFAC in the preceding five years; (ii) self-identified the alleged violations, cooperated with OFAC’s investigation, conducted a lookback, and entered into a tolling agreement; and (iii) has undertaken remedial measures, including enhancing policies and procedures to improve compliance with U.S. sanctions when processing payments through the U.S.

    Financial Crimes OFAC Of Interest to Non-US Persons Department of Treasury Settlement OFAC Sanctions OFAC Designations Enforcement China Sudan

  • OFAC issues Iran general license and related FAQs

    Financial Crimes

    On August 24, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued Iran General License (GL) M-1, “Authorizing the Exportation of Certain Graduate Level Educational Services and Software,” which authorizes accredited graduate and undergraduate degree-granting academic institutions in the U.S. to engage with Iranian students in online educational services and exploration of software through September 1, 2022, provided certain criteria are met. OFAC also published an updated FAQ related to GL M-1 (see 853). Effective August 24, GL M-1 supersedes and replaces GL M.

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

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