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OFAC sanctions Paraguayan official
On August 24, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13818 against three Paraguayan individuals and five entities under the Global Magnitsky Human Rights Accountability Act. According to OFAC, the designations highlight the financial risks and activities where Argentina, Brazil, and Paraguay converge, which is marked by many unregistered money exchange houses, trade based money laundering, and a lack of awareness regarding money laundering and terrorist financing typologies, among other things. As a result of the sanctions, all property and interests in property belonging to the sanctioned persons, and “any entities that are owned, directly or indirectly, 50 percent or more” by them that are subject to U.S. jurisdiction are blocked and must be reported to OFAC. OFAC notes that its regulations generally prohibit U.S. persons from participating in transactions with these individual and entities, which include “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.”
OFAC sanctions Eritrean official
On August 23, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13818 against an Eritrean individual under the Global Magnitsky Human Rights Accountability Act. According to OFAC, the sanctioned individual is the leader or official of an entity that is involved in human rights abuse committed during the continuing conflict in Tigray. As a result of the sanctions, all transactions by U.S. persons or in the U.S. that involve any property or interests in property of designated or otherwise blocked persons are generally prohibited. OFAC notes that its regulations generally prohibit U.S. persons from participating in transactions with these persons, which include “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.”
Treasury, Singapore sign cybersecurity cooperation MOU
On August 23, the U.S. Treasury Department and the Monetary Authority of Singapore finalized a bilateral Memorandum of Understanding (MOU) on cybersecurity cooperation. The MOU formalizes and strengthens a strong cybersecurity partnership between the two countries and, among other things, enhances cooperation in the following areas: (i) “[i]nformation sharing relating to the financial sector including cybersecurity regulations and guidance, cybersecurity incidents, and cybersecurity threat intelligence”; (ii) “[s]taff training and study visits to promote cooperation in the area of cybersecurity”; and (iii) “[c]ompetency-building activities such as the conduct of cross-border cybersecurity exercises.” According to Treasury Secretary Janet L. Yellen, the MOU serves “to improve the cyber resilience of both countries’ financial systems.”
Agencies address nonfinancial corporations’ LIBOR transition concerns
On August 23, the U.S. Treasury Department, Federal Reserve Board, SEC, Federal Reserve Bank of New York, and CFTC released a letter responding to nonfinancial corporate stakeholders’ concerns as they prepare to transition from LIBOR to another reference rate. The agencies acknowledged that LIBOR’s cessation “presents considerable operational, technological, accounting, tax, and legal challenges for Main Street companies,” and recognized that “a smooth transition will be best supported if financial institutions offer alternatives to USD LIBOR that meet borrower needs and if this is done in a timely fashion.” The agencies further acknowledged challenges some stakeholders have faced when obtaining loan agreements based on the Secured Overnight Financing Rate (SOFR)—“even after they indicated that loan agreements based on SOFR would be their preferred choice”—and expressed concerns that nonfinancial corporations are not being offered such alternatives despite the short period of time before LIBOR’s cessation. Stressing the importance of using “reference rates built on deep, liquid markets that are not susceptible to manipulation” while also reiterating that “the official sector is not positioned to adjudicate the selection of reference rates between banks and their commercial customers,” the agencies stressed that “borrower preferences and needs clearly have a significant role to play in the selection of such rates.”
Find continuing InfoBytes coverage on LIBOR here.
President Biden issues executive order blocking certain Russian pipelines
On August 20, President Biden signed Executive Order (E.O.) Blocking Property with Respect to Certain Russian Energy Expert Pipelines to take additional steps with respect to the national emergency declared in E.O. 14024 (covered by InfoBytes here) related to specific harmful foreign activities by the Russian government. The new E.O. prohibits, among other things, (i) “the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order”; and (ii) “the receipt of any contribution or provision of funds, goods, or services from any such person.” Concurrently, OFAC issued Russia-related General License (GL) 1A, as well as several new and updated FAQs related to the updated designations (see FAQs 894, 919, 920, and 921). Specifically, GL 1A authorizes certain activities involving the Federal State Budgetary Institution Marine Rescue Service (MRS) (“or any entity in which MRS owns, directly or indirectly, a 50 percent or greater interest”) that are not related to the construction of specified pipeline projects. Several individuals and entities have also been added to OFAC’s Specially Designated Nationals List.
OFAC sanctions Russian officials
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.”
OFAC sanctions Cuban officials
On August 20, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13818 against three Cuban individuals under the Global Magnitsky Human Rights Accountability Act. According to OFAC, this is the fourth round of sanctions since protests started in Cuba in July, as OFAC continues to impose sanctions on individuals and entities connected with actions to suppress peaceful, pro-democratic protests in Cuba (covered by InfoBytes here and here). As a result of the sanctions, all transactions by U.S. persons or in the U.S. that involve any property or interests in property of designated or otherwise blocked persons are generally prohibited. OFAC notes that its regulations generally prohibit U.S. persons from participating in transactions with these persons, which include “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.”
OFAC sanctions international oil smuggling network
On August 13, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13224 against several individuals and businesses allegedly involved in an international oil smuggling network supporting Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF). According to OFAC, senior IRGC-QF officials use proceeds from the designated persons’ involvement in Iranian oil exports, including through the shipment of Iranian oil to foreign customers, to help fund the group’s destabilizing regional activities. Director Andrea M. Gacki noted the “sales rely on key foreign intermediaries to obscure the IRGC-QF’s involvement” and stressed that OFAC “will continue to disrupt and expose anyone supporting these efforts.” As a result of the sanctions, all property and interests in property belonging to the sanctioned persons are blocked. OFAC’s announcement further noted that OFAC regulations generally prohibit U.S. persons from participating in transactions with designated persons, adding that “foreign financial institutions that knowingly facilitate significant transactions for, or persons that provide material or certain other support to, the persons designated today risk exposure to sanctions that could sever their access to the U.S. financial system or block their property or interests in property under U.S. jurisdiction.”
OFAC sanctions Cuban officials
On August 13, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13818 against two Cuban individuals and one Cuban entity under the Global Magnitsky Human Rights Accountability Act. According to OFAC, this is the third round of sanctions since protests started in Cuba in July, as the Department continues to impose sanctions on individuals and entities connected with actions to suppress peaceful, pro-democratic protests in Cuba (covered by InfoBytes here and here). As a result of the sanctions, all transactions by U.S. persons or in the U.S. that involve any property or interests in property of designated or otherwise blocked persons are generally prohibited. OFAC notes that its regulations generally prohibit U.S. persons from participating in transactions with these persons, which include “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.”
Biden’s executive order addresses Belarus
On August 9, President Biden issued an Executive Order (E.O.) on “Blocking Property of Additional Persons Contributing to the Situation in Belarus.” According to the E.O., expanding the scope will address the national emergency declared in E.O. 13405, “finding that the Belarusian regime’s harmful activities and long-standing abuses aimed at suppressing democracy and the exercise of human rights and fundamental freedoms in Belarus—including illicit and oppressive activities stemming from the August 9, 2020, fraudulent Belarusian presidential election and its aftermath, such as the elimination of political opposition and civil society organizations and the regime’s disruption and endangering of international civil air travel—constitute an unusual and extraordinary threat to the national security and foreign policy of the United States.” The E.O blocks property and interests in property that are in the U.S. or in the possession or control of certain persons who meet one or more of the criteria set forth in the order, including those who are determined, among other things: (i) “to be a political subdivision, agency, or instrumentality of the Government of Belarus”; (ii) “to be or have been a leader or official of the Government of Belarus”; and (iii) “to operate or have operated in the defense and related materiel sector, security sector, energy sector, potassium chloride (potash) sector, tobacco products sector, construction sector, or transportation sector of the economy of Belarus, or any other sector of the Belarus economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State.” The Treasury Secretary, in consultation with the Secretary of State, is authorized to take actions, including promulgating rules and regulations, to carry out the purposes of the E.O.
The same day, OFAC issued Belarus General License (GL) 4, related FAQs 916, 917 and 918, and added names to OFAC’s SDN list. Specifically, GL 4 authorizes the Wind Down of Transactions Involving Belaruskali OAO through December 8.