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OFAC sanctions Venezuelan security officials connected to Maduro regime
On March 1, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against six Venezuelan security officials connected to former President Maduro’s “illegitimate regime.” According to OFAC, the sanctions, taken pursuant to Executive Order 13692, designate the individuals in response to actions taken by groups under their control that have obstructed the delivery of humanitarian aid. As a result, any assets or interests therein belonging to the identified individuals, as well as any entities directly or indirectly owned 50 percent or more by such individuals that are subject to U.S. jurisdiction are blocked and must be reported to OFAC. U.S. persons are also prohibited generally from dealing with any such property or interests. OFAC also refers financial institutions to Financial Crimes Enforcement Network advisories FIN-2017-A006 and FIN-2017-A003 for further information concerning the use of the U.S. financial system and real estate market by Venezuelan government agencies and individuals to launder corrupt proceeds.
See here for continuing InfoBytes coverage of actions related to Venezuela.
OFAC sanctions Venezuelan governors aligned with Maduro regime
On February 25, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against four Venezuelan governors connected to former President Maduro’s “illegitimate regime.” According to OFAC, the sanctions, taken pursuant to Executive Order 13692, designate the individuals for engaging in “endemic corruption” and allegedly “blocking the delivery of critical humanitarian aid.” As a result, any assets or interests therein belonging to the identified individuals—along with any entities directly or indirectly owned 50 percent or more by such individuals—subject to U.S. jurisdiction are blocked and must be reported to OFAC. U.S. persons are also prohibited generally from dealing with any such property or interests. In addition, OFAC refers financial institutions to Financial Crimes Enforcement Network advisories FIN-2017-A006 and FIN-2017-A003 for further information concerning the use of the U.S. financial system and real estate market by Venezuelan government agencies and individuals to launder corrupt proceeds.
See here for continuing InfoBytes coverage of actions related to Venezuela.
OFAC reaches settlement with U.S. company resolving Iranian sanctions violations
On February 21, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a $506,250 settlement with a Connecticut-based company for five alleged violations of the Iranian Transactions and Sanctions Regulations (ITSR). The settlement resolves potential civil liability for the company’s alleged transactions valued at over $14 million involving the purchase of Iranian-origin cement clinker from a supplier in the United Arab Emirates who misrepresented to the company that the material was not subject to U.S. economic sanctions on Iran.
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OFAC reaches settlement with non-U.S. chemical manufacturer resolving Cuban sanctions violations
On February 14, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a $5.5 million settlement with a German chemical manufacturer for 304 alleged violations of the Cuban Assets Control Regulations (CACR). According to OFAC, the settlement resolves the manufacturer’s alleged involvement in fulfilling Cuban orders for chemical reagents on 304 invoices. Prior to and upon acquiring the manufacturer, an Illinois-based company sent warnings to the manufacturer that all Cuban transactions must be ceased, along with guidelines for complying with U.S. sanctions. OFAC noted, however, that the manufacturer designed and implemented a system to conceal its on-going transactions, engaged an external logistics company to handle shipping documents and declarations, and conducted training sessions for staff to ensure the system was concealed from the Illinois company.
In arriving at the settlement amount, OFAC considered the following as aggravating factors: (i) the willful conduct of the manufacturer’s management; (ii) the utilization of written procedures to “engage in a pattern of conduct in violation of the CACR”; (iii) the number of transactions over an extended period of time “caused significant harm to the sanctions program objective of maintaining a comprehensive embargo on Cuba”; and (iv) the sophistication and revenue stream of the manufacturer, and the fact that it is a subsidiary of a large, international company.
OFAC also considered several mitigating factors, including the Illinois company’s cooperation with OFAC, voluntary self-disclosure, and execution of a tolling agreement on behalf of the manufacturer. OFAC further stressed the importance of implementing risk-based controls and due-diligence procedures to ensure subsidiaries comply with OFAC sanction obligations.
Visit here for additional InfoBytes coverage on Cuban sanctions.
OFAC sanctions officials aligned with Maduro regime
On February 15, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced additions to the Specially Designated Nationals List pursuant to Executive Order 13692. OFAC’s additions to the list include five current or former officials connected to former President Maduro, including the president of Venezuela’s state-owned oil company, which was sanctioned at the end of January. (See previous InfoBytes coverage here.) According to OFAC, the designated individuals have engaged in “significant corruption and fraud against the people of Venezuela,” and continue to assist the Maduro regime’s repression of Venezuelan people. As a result, any assets or interests therein belonging to the identified individuals—along with any entities directly or indirectly owned 50 percent or more by such individuals—subject to U.S. jurisdiction are blocked and must be reported to OFAC. U.S. persons are prohibited generally from dealing with any such property or interests.
See here for continuing InfoBytes coverage of actions related to Venezuela.
OFAC sanctions Iranian entities and individuals supporting intelligence gathering and cyber targeting of U.S. persons
On February 13, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against an Iran-based entity and four affiliated Iranian individuals for their alleged roles in providing support for the Islamic Revolutionary Guard Corps-Qods Force’s (IRGC-QF) efforts to recruit and collect intelligence from foreign attendees of international conferences, including facilitating contact between the IRGC-QF and U.S. persons. According to OFAC, the sanctions were issued pursuant to Executive Order 13224, which authorizes “the U.S. government to designate and block the assets of foreign individuals and entities that commit, or pose a significant risk of committing, acts of terrorism.” The same day, OFAC also sanctioned a separate Iran-based entity and six associated individuals, pursuant to Executive Order 13606, for their alleged involvement in the cyber targeting of current and former U.S. government and military personnel, in an effort to gain access to their computer systems and implant malware.
As a result of the OFAC sanctions, all property and interests in property belonging to the identified individuals and entities and subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from entering into transactions with the individuals and entities. Additionally, OFAC notes that “any foreign financial institution that knowingly facilitates a significant transaction or provides significant financial services for any of the persons designated today pursuant to E.O. 13224 or that are Iranian persons on OFAC’s list of Specially Designated Nationals and Blocked Persons . . . could be subject to U.S. correspondent account or payable-through sanctions.”
Visit here for additional recent InfoBytes coverage of actions related to Iran.
U.S. Treasury concerned with European Commission's identification of AML/CFT-deficient U.S. territories
On February 13, the U.S. Treasury Department issued a statement responding to a list of jurisdictions published by the European Commission as having strategic deficiencies related to anti-money laundering and countering the financing of terrorism (AML/CFT). The list—which includes certain jurisdictions with strategic deficiencies that were already identified by the Financial Action Task Force (FATF) (see previous InfoBytes coverage here)—also identifies 11 additional jurisdictions, including the U.S. territories of American Samoa, Guam, Puerto Rico, and the U.S. Virgin Islands. According to the European Commission, the “banks and other entities covered by EU anti-money laundering rules will be required to apply increased checks (due diligence) on financial operations involving customers and financial institutions from these high-risk third countries to better identify any suspicious money flows.”
OFAC amends Venezuela-related General Licenses and FAQs on sanctioned oil company
On February 11, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) amended two General Licenses (GL) and issued three revised FAQs regarding sanctions against Venezuela’s state-owned oil company pursuant to Executive Order 13850. GL 3C, which supersedes GL 3B, authorizes transactions related to, provision of financing for, and other dealings in certain bonds, provided the divestment or transfer (including the facilitation) of any holdings of these bonds are to a non-U.S. person. GL 9B, which supersedes GL 9A, authorizes certain transactions related to securities issued prior to August 25, 2017 by the oil company and its subsidiaries. Additionally, OFAC issued revised FAQs 650, 661, and 662 to provide additional clarification on expected levels of due diligence, as well as implications for U.S. and non-U.S. persons.
Visit here for additional InfoBytes coverage of actions related to Venezuela.
OFAC designates Turkish individual as “Foreign Sanctions Evader” in relation to settlement resolving alleged Iranian sanctions violations
On February 7, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a $13,381 settlement with a Virginia-based corporation on behalf of its Turkish affiliate for six alleged violations of the Iranian Transactions and Sanctions Regulations (ITSR). The settlement resolves potential civil liability for the Turkish affiliate’s alleged practice of dispatching employees to Iran to fulfill service agreements and providing products, parts, and services while knowing that they were going to Iranian end-users. OFAC’s findings included that the Turkish affiliate willfully took steps to continue its Iranian business despite the Virginia corporation’s “extensive efforts to ensure [the affiliate] complied with the ITSR,” and “fraudulently certified” that no Iranian business was continuing. This settlement demonstrates the risks posed to U.S. companies by the Iran-related dealings of their foreign subsidiaries.
In a concurrent action the same day, OFAC sanctioned a Turkish individual as a “Foreign Sanctions Evader,” pursuant to Executive Order 13608, for allegedly instructing the Turkish affiliate to violate the Iranian sanctions. According to OFAC, the sanctioned individual “regularly and fraudulently” certified to the Virginia corporation that no products were being sent to Iran. Additionally, OFAC claims that upon learning of the corporation’s internal investigation, the individual and other members of the Turkish affiliate’s management team attempted to conceal the apparent violations. As a result, all direct and indirect transactions involving the individual intended for the U.S., or provided by or to U.S. persons, are prohibited. Moreover, U.S. financial institutions are instructed to reject payments involving the identified individual.
View here for additional InfoBytes coverage of actions related to Iran.
OFAC revises Venezuela-related General Licenses on sanctioned oil company, issues new FAQs
On February 1, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) amended two General Licenses (GL) and issued two new FAQs regarding sanctions against Venezuela’s state-owned oil company pursuant to Executive Order 13850.
OFAC amended GL 3B to authorize transactions related to, provision of financing for, and other dealings in certain bonds. GL 9A, which supersedes GL 9, authorizes certain transactions related to securities issued prior to August 25, 2017 by the oil company and its subsidiaries. GL 9A and related FAQ 661 clarify that trades in the oil company’s securities placed prior to 4:00 pm EST on January 28, 2019, are generally authorized “to settle in the ordinary course, irrespective of whether the sale or transfer is to a non-U.S. person.”
Visit here for additional InfoBytes coverage of Venezuela actions.