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  • 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

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  • 2nd Circuit: No contempt sanctions against Chinese banks in $1 billion counterfeit case

    Courts

    On August 30, the U.S. Court of Appeals for the Second Circuit held that a district court did not err in denying an investment firm’s motion to hold a group of Chinese banks in contempt for failure to implement certain asset restraints. According to the opinion, in 2015, an athletic apparel corporation and one of its subsidiaries won a more than $1 billion default judgment against hundreds of participants in several Chinese counterfeiting networks (counterfeiters). The judgment enjoined the counterfeiters “and all persons acting in concert or in participation with any of them . . . from transferring, withdrawing or disposing of any money or other assets into or out of [the counterfeiters’ accounts] regardless of whether such money or assets are held in the U.S. or abroad.” The investment firm (the corporation’s successor-in-interest) moved to hold the Chinese banks in contempt for failing to implement the asset restraints and asked the district court to impose a $150 million penalty, claiming, among other things, that the Chinese banks allowed the counterfeiters to transfer more than $32 million from their accounts after the Chinese banks were informed of the asset restraints. The investment firm further claimed that the Chinese banks also failed to produce documents during discovery. The district court denied the motion.

    In agreeing with the district court, the 2nd Circuit concluded that (i) until the contempt motion was filed, the corporation and the investment firm never sought to enforce the asset restraints against the Chinese banks; (ii) “there is a fair ground of doubt as to whether, in light of New York’s separate entity rule and principles of international comity, the orders could reach assets held at foreign bank branches”; (iii) “there is a fair ground of doubt as to whether the [b]anks’ activities amounted to ‘active concert or participation’ in Defendants’ violation of the asset restraints that could be enjoined under Federal 16 Rule of Civil Procedure 65(d)”; and (iv) the investment firm failed to provide clear and convincing evidence of a discovery violation.

    Courts Sanctions Of Interest to Non-US Persons Contempt China Appellate Second Circuit

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  • OFAC sanctions Eritrean official

    Financial Crimes

    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.”

     

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

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  • Biden’s executive order addresses Belarus

    Financial Crimes

    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.

     

     

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

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  • OFAC sanctions Cuban officials

    Financial Crimes

    On July 30, 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, the sanctions expand on Treasury’s July 22 designations by sanctioning additional persons in connection with actions to suppress peaceful, pro-democratic protests in that began on July 11 in Cuba (covered by InfoBytes 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.”

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

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  • OFAC issues advisory for China and Hong Kong

    Financial Crimes

    On July 16, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), along with the Departments of State, Treasury, Commerce, and Homeland Security, issued an advisory on the risks associated with actions carried out by the Government of the People’s Republic of China and the Government (PRC) of the Hong Kong Special Administrative Region (SAR) that may impact U.S. companies operating in the Hong Kong SAR of the People’s Republic of China. The advisory divides risks into four categories: (i) risks for businesses following the imposition of the NSL; (ii) data privacy risks; (iii) risks regarding transparency and access to critical business information; and (iv) risks for businesses with exposure to sanctioned Hong Kong or PRC entities or individuals. As previously covered by InfoBytes, OFAC issued regulations implementing Executive Order (E.O.) 13936 issued last July. E.O. 13936, among other things, targets and authorizes the imposition of sanctions on persons who materially assist, sponsor, or provide financial, material, or technological support to activities contributing to the undermining of Hong Kong’s democracy and autonomy (covered by InfoBytes here). In addition to the advisory, OFAC added several individuals and entities to its Specially Designated Nationals List.

    Financial Crimes Of Interest to Non-US Persons Anti-Money Laundering China Department of Treasury OFAC Hong Kong Sanctions OFAC Designations

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  • OFAC issues Covid-19 related general license and FAQs

    Financial Crimes

    On June 17, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued three general licenses, Iran GL N, Syria GL 21, and Venezuela GL 39, (referred to as the “COVID-19-related GLs”) to expand upon Treasury’s existing authorizations for Covid-19-related transactions and activities. As previously covered by InfoBytes, OFAC published a Fact Sheet providing guidance to ensure humanitarian-related trade and assistance reaches at-risk populations through legitimate and transparent channels during the global Covid-19 pandemic. The recently released COVID-19-related GLs build on longstanding humanitarian exemptions, exceptions, and authorizations to cover Covid-19-related transactions and activities, which include, among others, “transactions and activities involving the delivery of face masks, ventilators and oxygen tanks, vaccines and the production of vaccines, COVID-19 tests, air filtration systems, and COVID-19-related field hospitals.” These GLs are also part of the Biden Administration’s efforts designated in National Security Memorandum – 1, which directs certain government agencies to review existing U.S. and “multilateral financial and economic sanctions to evaluate whether they are unduly hindering responses to the COVID-19 pandemic worldwide.” According to OFAC, these new authorizations will continue to support the effort by governments, international organizations, non-governmental organizations, and private sector actors in providing Covid-19-related assistance to people in certain sanctioned jurisdictions. OFAC also published six FAQs related to the COVID-19-related GLs (see 906, 907, 908, 909, 910, and 911).

    Financial Crimes OFAC Sanctions Of Interest to Non-US Persons Department of Treasury Covid-19 Iran Syria Venezuela

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  • OFAC sanctions network connected to Iran, Houthis in Yemen

    Financial Crimes

    On June 10, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13224 against members of a smuggling organization that allegedly contributes to funding Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and the Houthis in Yemen. According to OFAC, the group is led by an Iran-based Houthi financier and generates millions of dollars from selling commodities, such as Iranian petroleum, of which a significant amount is directed through an intricate network of intermediaries in several countries to the Houthis in Yemen. OFAC Director Andrea M. Gacki noted that financial support from the network “enables the Houthis’ deplorable attacks threatening civilian and critical infrastructure in Yemen and Saudi Arabia,” and that the attacks “undermine efforts to bring the conflict to an end and, most tragically, starve tens of millions of innocent civilians.” As a result of the sanctions, all property and interests in property belonging to the sanctioned individuals, and “any entities that are owned, directly or indirectly, 50 percent or more” by the individuals that are subject to U.S. jurisdiction are blocked and must be reported to OFAC. OFAC’s announcement further noted that OFAC regulations “generally prohibit” U.S. persons from participating in transactions with designated persons and foreign financial institutions that knowingly participate in significant transactions related to the designated individuals risk sanctions that could discontinue their access to the U.S. financial system or block their property or interests in property under U.S. jurisdiction.

    In addition, OFAC announced the removal of sanctions on three former Government of Iran officials, and two companies who were previously connected to the handlings of Iranian petrochemical products. According to OFAC, “these delistings are a result of a verified change in behavior or status on the part of the sanctioned parties and demonstrate the U.S. government’s commitment to lifting sanctions in the event of a change in behavior or status for sanctioned persons.”

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

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  • OFAC sanctions individuals connected to Ortega regime

    Financial Crimes

    On June 9, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13851 against four individuals connected to the Ortega regime. According to the announcements, the Ortega regime has undermined democracy, abused civilians’ human rights, implemented corrupt laws with negative economic results, and attempted to censor the independent news media. OFAC Director Andrea M. Gacki, stated that the Ortega regime “intends to continue its suppression of the Nicaraguan people,” and “[t]he United States will continue to expose those officials who continue to ignore the will of its citizens.” As a result of the sanctions, all property and interests in property belonging to the sanctioned individual, and “any entities that are owned, directly or indirectly, 50 percent or more” by the individual that are subject to U.S. jurisdiction are blocked and must be reported to OFAC. OFAC’s announcement further noted that OFAC regulations “generally prohibit” U.S. persons from participating in transactions with designated persons.

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

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  • President Biden issues executive order blocking U.S. entry by some persons connected to the Western Balkans

    Financial Crimes

    On June 8, President Biden issued an Executive Order (E.O.) on “Blocking Property And Suspending Entry Into The United States Of Certain Persons Contributing To The Destabilizing Situation In The Western Balkans.” According to the E.O., expanding the scope will address the national emergency declared in E.O. 13219, “including the undermining of post-war agreements and institutions following the breakup of the former Socialist Federal Republic of Yugoslavia, as well as widespread corruption within various governments and institutions in the Western Balkans, stymies progress toward effective and democratic governance and full integration into transatlantic institutions, and thereby constitutes 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 responsible for or complicit in, or to have directly or indirectly engaged in, actions or policies that threaten the peace, security, stability, or territorial integrity of any area or state in the Western Balkans”; (ii) “to be responsible for or complicit in, or to have directly or indirectly engaged in, actions or policies that undermine democratic processes or institutions in the Western Balkans”; or (iii) “to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any person whose property and interests in property are blocked pursuant to this order.” Additionally, the Treasury Secretary is authorized to take actions, including promulgating rules and regulations, to carry out the purposes of the E.O.

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

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