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OFAC adds Syrians to Specially Designated Nationals List
On September 6, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) added five entities and four individuals to OFAC’s Specially Designated Nationals and Blocked Persons List for facilitating financial transactions and shipments of fuel and weapons in support of the Syrian government’s regime. The new sanctions, issued pursuant to Executive Order 13582, generally prohibit transactions by U.S. persons with those listed, and all assets belonging to the designated persons subject to U.S. jurisdiction are blocked and must be reported to OFAC.
Visit here for continuing InfoBytes coverage on Syrian sanctions.
OFAC adds North Koreans to Specially Designated Nationals List
On September 6, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) made additions to the Specially Designated Nationals List pursuant to Executive Order (E.O.) 13722. OFAC’s additions to the designations identify one individual and one entity found to have “engaged in significant activities undermining cybersecurity through the use of computer networks or systems against targets outside of North Korea” on behalf of the Government of North Korea. OFAC cites to the individual’s participation in a 2016 cyber-enabled fraudulent transfer of $81 million, a 2017 ransomware attack, and the 2014 cyber-attack against a U.S. entertainment company. As a result, all assets belonging to the identified individual and entity subject to U.S. jurisdiction are blocked and must be reported to OFAC, and U.S. persons are generally prohibited from engaging in transactions with them.
See here for previous InfoBytes coverage on North Korean sanctions.
OCC seeks stakeholder feedback on modernizing the Community Reinvestment Act
On August 28, the OCC issued an advance notice of proposed rulemaking (ANPR) seeking input from stakeholders on ways to transform or modernize the Community Reinvestment Act (CRA) regulatory framework. According to OCC Bulletin 2018-24, the ANPR seeks comments on several issues including:
- encouraging more lending and services in areas where there is the most need, such as low- and moderate-income areas;
- clarifying and expanding the types of activities eligible for CRA consideration;
- reviewing and updating how assessment areas are delineated and used;
- establishing measurable CRA rating metric-based thresholds;
- increasing the transparency of a bank’s CRA performance;
- improving the timeliness of CRA regulatory decisions; and
- reducing the cost and regulatory burden associated with CRA evaluations.
In its press release, the OCC stated that modernizing CRA regulations will “better achieve the statute’s original purpose, increase lending and investment where it is needed most, and reduce the burden associated with reporting and assessing CRA performance.” Additionally, the OCC noted in the ANPR that many stakeholders believe that aspects of current CRA regulations may only be “sufficient for certain locally focused and less complex banks,” as banking practices and the financial services industry continue to evolve.
As previously covered by InfoBytes, in April the Treasury Department released a memorandum of recommendations addressing findings from Treasury’s comprehensive assessment of the CRA framework. The memorandum focused on four key areas: assessment areas, examination clarity and flexibility, the examination process, and bank performance. According to the OCC, comments on the ANPR “may inform the development of more specific policy proposals or future rulemakings.” The OCC will accept comments for 75 days following publication in the Federal Register.
OFAC targets shipping industry in expanded North Korea sanction
On August 15, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) imposed additional sanctions, pursuant to Executive Order 13810, designed to reinforce the U.S.’s ongoing commitment to prevent the financing of North Korea’s weapons of mass destruction programs and activities. The sanctions designate a Chinese-based trading company and its Singaporean-based affiliate, along with a Russian-based port service agency and its director general, for allegedly facilitating illicit shipments on behalf of North Korea. Pursuant to OFAC’s sanctions, all property and interests in property of the designated persons within U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from participating in transactions with these persons.
See here for previous InfoBytes coverage on North Korean sanctions.
OFAC targets facilitators of illicit North Korean financial transactions; Russian bank sanctioned
On August 3, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced its decision to sanction a Russian bank, pursuant to Executive Order (E.O.) 13810, for allegedly “knowingly facilitating a significant transaction” on behalf of an individual connected to North Korea’s primary foreign exchange bank. According to OFAC, the Russian bank violated its UN Security Council (UNSC) obligations by providing banking services to a representative of the North Korean bank who had previously been designated for weapons of mass destruction-related activities connected to North Korea. OFAC also issued sanctions against the North Korean bank’s Moscow-based deputy representative (E.O. 13687), as well as two of its associated “front companies” (E.O. 13722) accused of facilitating North Korean illicit financial activity. OFAC noted that, in accordance with UNSC requirements, all identified representatives “working on behalf of or at the direction of a [North Korean] bank or financial institution” should have been expelled from Russia, but instead, the Russian bank continued to facilitate transactions with the sanctioned persons. Pursuant to OFAC’s sanctions, all property and interests in property of the designated persons within U.S. jurisdiction are blocked and “may not be transferred, paid, exported, withdrawn, or otherwise dealt in.” Moreover, U.S. persons are “generally prohibited” from participating in transactions with these individuals and entities.
See here for previous InfoBytes coverage on North Korean sanctions.
President Trump issues Iran-related executive order reimposing previously lifted sanctions; OFAC updates Iran-related FAQs
On August 6, President Trump announced the issuance of Iran-related Executive Order 13846 (E.O. 13846), which reimposes nuclear-related sanctions that were lifted in connection with the United States’ participation in the Joint Comprehensive Plan of Action (JCPA) of July 14, 2015. As previously covered in InfoBytes, President Trump announced his decision to withdraw from the JCPA on May 8. Newly issued E.O. 13846 reimposes certain sanctions, effective August 7, concerning persons—including foreign financial institutions—who facilitate or provide “financial, material, or technological support for” areas including Iran’s trade in U.S. bank notes and precious metals, its automotive sector, and its currency. Sanctions targeting Iran’s energy sector, as well as transactions between foreign financial institutions and the Central Bank of Iran, will resume effective November 5. E.O. 13846 also revokes and supersedes several previously issued E.O.s.
In response to E.O. 13846, OFAC released updates to its FAQs concerning the additional sanctions, along with amendments to existing FAQs concerning the Iran Freedom and Counter-Proliferation Act of 2012. FAQs related to revoked E.O. 13622, Section 4 of E.O. 13628, and E.O. 13645 have been archived.
See here for previous InfoBytes coverage on Iranian sanctions.
Buckley Sandler Special Alert: OCC announces it will accept fintech charter applications, following the release of Treasury report on nonbank financial institutions
On July 31, the OCC announced that nondepository financial technology firms engaged in one or more core banking functions may apply for a special purpose national bank (SPNB) charter. The announcement follows a report released the same day by the Treasury Department, which discusses a number of recommendations for creating a streamlined environment for regulating financial technology, and includes an endorsement of the OCC’s SPNB charter for fintech firms (fintech charter).
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Click here to read the full special alert.If you have questions about the report or other related issues, please visit our Fintech practice page, or contact a Buckley Sandler attorney with whom you have worked in the past.
OFAC issues Ukraine-/Russia-related General License to extend expiration date
On July 31, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced that it was issuing Ukraine-/Russia-related General License 13C (GL 13C) to replace and supersede General License 13B (GL 13B) in its entirety, and to extend the expiration date through October 23, 2018. (See previous InfoBytes coverage on GL 13B, which was set to expire August 5, here.) GL 13C, which permits the same conduct as GL 13B, authorizes activities that would otherwise be prohibited by the Ukraine-Related Sanctions Regulations. Permissible activities include authorizing certain divestiture transactions with specified blocked persons to a non-U.S. person, and allowing the facilitation of transfers of debt, equity, or other holdings involving listed blocked persons, including entities owned 50 percent or more and issued by the named persons. In accordance with the issuance of GL 13C, OFAC issued updates to relevant FAQs.
Visit here for additional InfoBytes coverage on Ukraine/Russian sanctions.
OFAC, France announce coordinated action against global procurement network supporting Syria’s chemical weapons program
On July 25, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) added five entities and eight individuals to OFAC’s Specially Designated Nationals and Blocked Persons List for their ties to a procurement network providing support to Syria’s chemical weapons program. OFAC acted in coordination with the French government and pursuant to Executive Order 13382, which targets proliferators of weapons of mass destruction and their supporters. As a result, all assets belonging to the identified individuals and entities subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from entering into transactions with them.
Visit here for continuing InfoBytes coverage on Syrian sanctions.
Departments of Treasury, State, and Homeland Security issue joint advisory warning businesses of North Korean sanctions evasion tactics
On July 23, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), in conjunction with the Department of State and the Department of Homeland Security, issued an advisory to warn businesses—including manufacturers, buyers, and service providers—of the potential risks that may result from sanctions evasion tactics used by North Korea across supply chains. The advisory also provides assistance for businesses complying with Title III of the Countering America’s Adversaries Through Sanctions Act of 2017 with respect to North Korean sanctions. According to the advisory, the U.S. government “is focusing its disruption efforts on North Korean citizens or nationals whose labor generates revenue for the North Korean government.” Specifically, the advisory warns businesses to examine their entire supply chains and adopt appropriate, well-documented due diligence best practices, which “may be considered mitigating factors when the U.S. government determines the appropriate enforcement response.” The advisory also outlines penalties for violations of sanctions and enforcement actions.
See here for previous InfoBytes coverage on North Korea sanctions.