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  • OFAC amends Terrorism List Governments Sanctions Regulations

    Financial Crimes

    On May 19, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued a final rule to amend the Terrorism List Governments Sanctions Regulations to implement changes resulting from the Secretary of State’s December 14, 2020 rescission of the designation of Sudan as a State Sponsor of Terrorism. The amendments relate to “removing one general license in full and amending another general license to remove references to the Government of Sudan and Sudanese nationals because financial transactions with the Government of Sudan are no longer prohibited by the Terrorism List Governments Sanctions Regulations.” The rule went into effect on May 20 immediately upon publication in the Federal Register.

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

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  • OFAC amends security investment-related general license

    Financial Crimes

    On May 18, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued General License (GL) 1B, “Authorizing Transactions Involving Securities of Certain Communist Chinese Military Companies.” GL 1B authorizes through June 11 (9:30 a.m. eastern daylight time) certain transactions and activities that involve “publicly traded securities, or any securities that are derivative of, or are designed to provide investment exposure to such securities, of an entity whose name closely matches, but does not exactly match, the name of a Communist Chinese military company as defined by section 4(a) of E.O. 13959.” However, GL 1B does not authorize “[a]ny transactions or activities involving publicly traded securities, or any securities that are derivative of, or are designed to provide investment exposure to such securities of entities identified in the Office of Foreign Assets Control’s Non-SDN Communist Chinese Military Companies List (NS-CCMC List) pursuant to section 4(a)(iii) of E.O. 13959, as amended, as a subsidiary of a person determined to be a Communist Chinese military company, including entities added to the NS-CCMC List on January 8, 2021.” GL 1B immediately replaces and supersedes GL 1A, dated January 26.

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

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  • OFAC sanctions ISIS financial facilitators in Syria and Turkey

    Financial Crimes

    On May 17, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13224 against three individuals and one entity connected to the Islamic State of Iraq and Syria (ISIS) for allegedly helping ISIS access the financial system in the Middle East through a network of international donors. OFAC noted that these sanctions coincide with the fourteenth meeting of the Counter ISIS Finance Group, which coordinates efforts to isolate ISIS from the international financial system and eliminate revenue sources. 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’s announcement further noted that OFAC regulations “generally prohibit” U.S. persons from participating in transactions with the designated persons unless exempt or otherwise authorized by a general or specific license, and warned foreign financial institutions that if they knowingly facilitate significant transactions for any of the designated persons, they may be subject to U.S. correspondent account or payable-through account sanctions.

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

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  • OFAC sanctions Burmese governing body and numerous individuals

    Financial Crimes

    On May 17, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 14014 against 16 individuals connected to Burma’s military regime and one entity, the State Administration Council (SAC), which is the official name of the military government in Burma formed by Burma’s military on February 2, 2021. As a result of the sanctions, all property and interests in property belonging to the SAC and the identified individuals subject to U.S. jurisdiction are blocked and must be reported to OFAC. According to Andrea Gacki, Director of OFAC, these sanctions “promote accountability for those responsible for the coup and ongoing violence.” Additionally, “any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked.” The sanctions also generally prohibit U.S. persons from engaging in any dealings involving the property or interests in property of the SAC or the identified individuals.

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

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  • OFAC amends narcotics trafficking and kingpin-related sanctions regulations

    Financial Crimes

    On May 14, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued a final rule to amend the Narcotics Trafficking Sanctions Regulations (NTSR) and Foreign Narcotics Kingpin Sanctions Regulations (FNKSR). The amendments relate to “general licenses for payments for legal services, certain transactions for personal maintenance, certain transactions for maintenance of blocked tangible property, and emergency medical services.” In addition, the final rule updates regulatory provisions prohibiting transactions involving blocked property and clarifies the terms “evasions,” “attempts,” and “conspiracies” in the NTSR and the FNKSR so that they are consistent with the definitions of those terms in other OFAC sanctions regulations.

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

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  • OFAC sanctions Mexican cartel members and facilitator

    Financial Crimes

    On May 12, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to the Foreign Narcotics Kingpin Designation Act against a commander and his organization responsible for facilitating drug trafficking between Mexico and the U.S. OFAC also designated six other individuals and one entity as Specially Designated Narcotics Traffickers pursuant to the Kingpin Act for their connections to the organization. Director of OFAC Andrea Gacki noted that the sanctioned organization “help[s] fuel our nation’s opioid epidemic” and that “Treasury and our U.S. government partners, including the Drug Enforcement Administration, will continue to use every available resource to dismantle these criminal networks.” As a result of the sanctions, all property belonging to the sanctioned persons 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 of blocked or designated persons.

    These sanctions against the drug trafficking cartel are the most recent efforts taken by OFAC pursuant to the Kingpin Act (covered in InfoBytes, here and here).

    Financial Crimes OFAC Department of Treasury SDN List Of Interest to Non-US Persons Mexico Sanctions OFAC Designations Department of Justice Drug Enforcement Administration Department of Homeland Security

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  • OFAC sanctions Mexican cartel members and facilitator

    Financial Crimes

    On May 12, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to the Foreign Narcotics Kingpin Designation Act against a commander and his organization responsible for facilitating drug trafficking between Mexico and the U.S. OFAC also designated six other individuals and one entity as Specially Designated Narcotics Traffickers pursuant to the Kingpin Act for their connections to the organization. Director of OFAC Andrea Gacki noted that the sanctioned organization “help[s] fuel our nation’s opioid epidemic” and that “Treasury and our U.S. government partners, including the Drug Enforcement Administration, will continue to use every available resource to dismantle these criminal networks.” As a result of the sanctions, all property belonging to the sanctioned persons 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 of blocked or designated persons.

    These sanctions against the drug trafficking cartel are the most recent efforts taken by OFAC pursuant to the Kingpin Act (covered in InfoBytes, here and here).

    Financial Crimes OFAC Department of Treasury SDN List Of Interest to Non-US Persons Mexico Sanctions OFAC Designations Department of Justice Drug Enforcement Administration Department of Homeland Security

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  • OFAC sanctions Hizballah finance official and Lebanese shadow bankers

    Financial Crimes

    On May 11, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13224 against seven individuals in connection with Hizballah and its financial firm, which is used by Hizballah to direct the terrorist organization’s financial involvements and to access the international financial system. According to OFAC, one of the sanctioned individuals, who serves as the Chief of Hizballah’s Central Finance Unit, has “acted or purported to act for or on behalf of, directly or indirectly, Hizballah.” The other sanctioned individuals have “acted or purported to act for or on behalf of, directly or indirectly, [the financial firm].” 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 persons, which include “any property or interests in property of designated or otherwise blocked persons.”

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

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  • OFAC says prohibitions no longer apply to previously sanctioned Chinese military company

    Financial Crimes

    On May 6, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) published FAQ 893 clarifying that prohibitions under Executive Order (E.O.) 13959, “Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies,” do not apply to a previously listed company. Specifically, OFAC explained that following a May 5 court order preliminarily enjoining the implementation of E.O. 13959 against the company, the E.O.’s prohibitions will not apply pending further order of the court.

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

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  • OFAC reaches $2.1 million settlement with German software company

    Financial Crimes

    On April 29, OFAC announced a more than $2.1 million settlement with a Germany-based software company for 190 apparent violations of the Iranian Transactions and Sanctions Regulations. According to OFAC’s website notice, between June 2013 and January 2018, the company “authorized 13 sales of [company] software licenses, 169 sales of related maintenance services and updates, and eight sales of cloud-based subscription services.” Third-party resellers, which the company allegedly referred to as “pass-through entities” in Turkey, the United Arab Emirates (UAE), Germany, and Malaysia, sold the software licenses and related maintenances services and updates, OFAC noted.

    In arriving at the settlement amount, OFAC considered various aggravating factors, including that the company (i) demonstrated reckless disregard and failed to exercise sufficient caution or care for U.S. economics sanctions by failing to act on audit findings regarding sanction risk or warnings from compliance, and by ignoring whistleblower complaints; (ii) failed to have an adequate compliance program for a company of its size; (iii) had information to conclude that the software and cloud services were being utilized by entities and end-users in Iran and were supported from the US; and (iv) “is a sophisticated software company with significant international operations and has numerous foreign subsidiaries.”

    OFAC also considered various mitigating factors, including that the company (i) cooperated with OFAC’s investigation; (ii) has undertaken remedial measures, including terminating the users connected to the third-country entities, the partners who participated in the sales to Iranian companies, and five employees who were found to have “knowingly engaged in the sale of. . . products to Iran”; (iii) has prohibited downloads of software, support, and maintenance from embargoed countries; (iv) implemented a risk-based export control framework for partners that requires a stringent review of proposed sales by a third-party auditor; (v) created an upgraded compliance program; and (vi) hired new employees responsible for export control and trade sanctions compliance.

    Separately, the DOJ announced that the company agreed to pay a $8 million fine and entered into a Non-Prosecution Agreement as a result of its voluntary disclosure to the DOJ and “extensive cooperation and strong remediation.” Pursuant to the agreement, the company “will disgorge $5.14 million of ill-gotten gain.”

     

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

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