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  • President Trump issues Executive Order prohibiting Venezuelan cryptocurrency transactions; OFAC sanctions additional Venezuelan officials

    Financial Crimes

    On March 19, President Trump issued Executive Order 13827 (E.O.) prohibiting transactions within the U.S. that involve any digital currency issued by, for, or on behalf of the Venezuelan government since January 9, and authorizing the U.S. Treasury Department to “employ all powers” necessary to carry out the E.O.’s provisions. President Trump issued the E.O. in conjunction with E.O. 13692 and E.O. 13808 and because of recent steps taken by Venezuelan President Maduro to “circumvent U.S. sanctions” by issuing a digital currency that the Venezuelan legislature “denounced as unlawful.” The E.O. took effect on March 19 at 12:15 p.m. EDT.

    On the same day, the Treasury’s Office of Foreign Assets Control (OFAC) announced additional sanctions pursuant to E.O. 13692 against four current or former Venezuelan government officials as part of “ongoing efforts to highlight the economic mismanagement and endemic corruption that have been the defining features of the Maduro regime.” Pursuant to OFAC’s sanctions, all assets belonging to the designated persons within U.S. jurisdiction are blocked, and U.S. persons are “generally prohibited” from participating in transactions with these individuals. OFAC also published answers to several related FAQs concerning President Trump’s E.O., as well as new FAQs related to virtual currency.

    Visit here for additional InfoBytes coverage on Venezuelan sanctions.

    Financial Crimes Digital Assets OFAC Department of Treasury Sanctions Cryptocurrency Trump International

  • OFAC reissues North Korean Sanctions Regulations

    Financial Crimes

    On March 1, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) published a final rule in the Federal Register to amend and reissue the North Korea Sanctions Regulations in their entirety. The final rule implements Executive Orders 13687, 13722, and 13810, references the North Korea Sanctions and Policy Enhancement Act of 2016 and the Countering America’s Adversaries Through Sanctions Act of 2017, and provides the Treasury Secretary, “in consultation with the Secretary of State, additional tools to disrupt North Korea’s ability to fund its weapons of mass destruction and ballistic missile programs.” All property and interests in property of the Government of North Korea and the Workers’ Party of Korea are blocked, transactions by U.S. persons involving the sanctioned entities are generally prohibited, and “all transactions within the United States, including all financial transactions that transit the U.S. financial system, must comply with OFAC regulations.” Among other things, the final rule (i) incorporates several general licenses previously only available on OFAC’s North Korea Sanctions page; (ii) adds several new general licenses; (iii) adds and expands provisions to provide the public with a more comprehensive set of regulations; (iv) updates certain regulatory provisions; and (v) makes other technical and conforming changes. The final rule takes effect March 5, 2018. Also released the same day were updates to OFAC’s North Korea-related FAQs.

    See here for previous InfoBytes coverage on North Korean sanctions.

    Financial Crimes OFAC Sanctions International Department of Treasury CAATSA

  • OFAC sanctions target North Korea’s shipping and trading industry

    Financial Crimes

    On February 23, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) imposed additional sanctions targeting the North Korean shipping and trading industry. The sanctions include the designation of 27 entities, 28 vessels, and one individual consistent with the Countering America’s Adversaries Through Sanctions Act of 2017. Treasury Secretary Steven T. Mnuchin stated, “Treasury is aggressively targeting all illicit avenues used by North Korea to evade sanctions, including taking decisive action to block the vessels, shipping companies, and entities across the globe that work on North Korea’s behalf. This will significantly hinder the Kim regime’s capacity to conduct evasive maritime activities that facilitate illicit coal and fuel transports, and erode its abilities to ship goods through international waters.” All property or interests in property held by the sanctioned individual and entities within U.S. jurisdiction must be blocked, and transactions between the designated persons and Americans are also prohibited.

    Separately, OCAC issued a global shipping advisory in conjunction with the U.S. Department of State and the U.S. Coast Guard to, among other things, (i) outline methods employed by North Korea to facilitate illicit transactions to evade sanctions; (ii) list due diligence steps companies should employ to monitor illicit North Korean activity and mitigate the risk of potentially engaging in prohibited activity or transactions; and (iii) provide an overview of penalties associated with violating U.S. or UN sanctions.

    See here for previous InfoBytes coverage on North Korean sanctions.

    Financial Crimes OFAC Sanctions CAATSA International Department of Treasury

  • OFAC issues sanctions against persons involved in Hizballah financial network

    Financial Crimes

    On February 2, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against six individuals and seven entities for providing financial support to terrorists or acts of terrorism. Issued pursuant to Executive Order 13224, which “provides a means by which to disrupt the financial support network for terrorists and terrorist organizations by authorizing 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 sanctions target the business operations of Hizballah and serve to further Treasury’s continued measures to “sever Hizballah from the international financial system.” OFAC stressed that, pursuant to the Hizballah Financial Sanctions Regulations, it has the authority to “prohibit or impose strict conditions on the opening or maintaining in the [U.S.] of a correspondent account or a payable-through account by a foreign financial institution that knowingly facilitates a significant transaction for Hizballah, or a person acting on behalf of or at the direction of, or owned or controlled by, Hizballah.” All property, or interests in property, held by the sanctioned individuals and entities within U.S. jurisdiction will be blocked, and transactions between the sanctioned individuals and entities and Americans are also “generally prohibited.”

    Financial Crimes OFAC Sanctions Department of Treasury International

  • Treasury releases list of Russian senior foreign political figures and oligarchs, does not impose new sanctions

    Financial Crimes

    On January 29, the U.S. Treasury Department released an unclassified report to Congress containing a list of 210 individuals who are either senior foreign political figures in the Russian Federation or Russian oligarchs with a net worth of at least $1 billion. Treasury emphasized that the report—which was mandated through Section 241 of the Countering America’s Adversaries Through Sanctions Act of 2017 (CAATSA)— (i) is not a sanctions list; (ii) should not be interpreted as a determination that individuals or entities included in the report or listed within classified appendices or annexes meet the criteria for sanctions designation (individuals and entities subject to separate sanctions are denoted within the report); and (iii) does not serve to indicate that the U.S. Government possesses information about an “individual’s involvement in malign activities.” Classified lists that may include officials and oligarchs of lesser rank and wealth will be submitted as well. Additionally, Treasury submitted to Congress a required classified annex to the report, which lists Russian parastatals entities that are defined as “companies in which state ownership is at least 25 percent and that had 2016 revenues of approximately $2 billion or more.” The annex also presents an analysis of potential impact on the U.S. economy that may result should additional debt and equity restrictions or sanctions be imposed on the identified entities.

    Separately, on January 30, Treasury released updated FAQs to address questions related to the report’s release.

    See here for additional CAATSA InfoBytes coverage.

    Financial Crimes Department of Treasury Sanctions International CAATSA OFAC Russia

  • OFAC further expands sanctions in connection with Ukrainian conflict

    Financial Crimes

    On January 26, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced its decision to sanction an additional 21 individuals and nine entities, pursuant to four executive orders (see Executive Orders 13660, 13661, 13662, and 13685), in connection with the United States’ support of Ukraine’s “sovereignty and territorial integrity” and opposition to Russia’s occupation of Crimea. Among other things, the financial sanctions target Russian government officials, Russian business executives, and Ukrainian separatist leaders involved with Russia’s occupation as part of efforts to hold responsible individuals accountable. Also sanctioned are nine technology, construction, and shipping firms supporting Russia’s occupation. As part of the announcement, Treasury Secretary Steven Mnuchin stated that “[t]he U.S. government is committed to maintaining the sovereignty and territorial integrity of Ukraine and to targeting those who attempt to undermine the Minsk agreements.” He further indicated that “[t]hose who provide goods, services, or material support to individuals and entities sanctioned by the United States for their activities in Ukraine are engaging in behavior that could expose them to U.S. sanctions.” All property, or interests in property, held by the sanctioned individuals and entities within U.S. jurisdiction will be blocked, and transactions between the sanctioned individuals and entities and Americans are also “generally prohibited.”

    Visit here for additional InfoBytes coverage on Russian and Ukrainian sanctions.

    Financial Crimes OFAC Sanctions International Russia Ukraine

  • OFAC continues to expand North Korean sanctions

    Financial Crimes

    On January 24, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) imposed additional sanctions in response to North Korea's ongoing weapons development programs, continued sanctions evasions, and United Nations Security Council Resolutions violations. The sanctions were issued against nine entities, 16 individuals, and six vessels pursuant to Executive Orders 13810 or 13687. Five of the sanctioned individuals have links to North Korean financial networks, with several of the individuals in possession of accounts held at Chinese banks. All property held by the sanctioned individuals and entities within U.S. jurisdiction was frozen, and transactions between the sanctioned individuals and entities and Americans are also prohibited.

    See here for previous InfoBytes coverage on North Korean sanctions.

    Financial Crimes Department of Treasury OFAC Sanctions International

  • OFAC expands Venezuelan and Iranian sanctions

    Financial Crimes

    On January 5, the Treasury Department’s Office of Foreign Assets Control (OFAC) imposed additional sanctions against four current or former officials of the Venezuelan government. The designations, issued pursuant to Executive Order 13692, identify officials who are “associated with corruption and repression in Venezuela” and have “forsaken the professional republican mission of the military institution, which . . . is to be ‘with no political orientation … and in no case at the service of any person or political partisanship.’” All assets belonging to the identified individuals subject to U.S. jurisdiction are frozen, and U.S. persons are generally prohibited from dealing with them. See here for previous InfoBytes coverage of Venezuelan sanctions.

    Separately on January 4, OFAC designated five Iranian entities, pursuant to Executive Order 13382 (E.O. 13382), for their ties to Iran’s ballistic missile program. The five entities identified in the designation are either owned or controlled by an Iranian group that is “responsible for the development and production of Iran's solid-propellant ballistic missiles, is listed in the Annex to E.O. 13382 and is currently sanctioned by the U.S., UN, and EU.” In addition to freezing assets subject to U.S. jurisdiction and prohibiting U.S. persons from engaging in transactions with the entities, “foreign financial institutions that knowingly facilitate significant transactions for, or persons that provide material or certain other support to, the entities designated today risk exposure to sanctions that could sever their access to the U.S. financial system or block their property and interests in property under U.S. jurisdiction.” See here for previous InfoBytes coverage of Iranian sanctions.

    Financial Crimes Department of Treasury OFAC Sanctions International Executive Order Venezuela Iran

  • OFAC amends Iraq Stabilization and Insurgency Sanctions Regulations, sanctions additional North Koreans

    Financial Crimes

    On December 27, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) released amendments to its Iraq Stabilization and Insurgency Sanctions Regulations (ISISR) to implement Executive Order 13668 (“Ending Immunities Granted to the Development Fund for Iraq and Certain Other Iraqi Property and Interests in Property Pursuant to Executive Order 13303, as Amended”). Previously, the ISISR prohibited and deemed null and void “any attachment, judgment, decree, lien, execution, garnishment, or other judicial process” related to (i) the sale and marketing of petroleum and petroleum products involving U.S. persons; and (ii) “any accounts, assets, investments, or any other property of any kind owned by, belonging to, or held by the Central Bank of Iraq, or held, maintained, or otherwise controlled by any financial institution of any kind in the name of, on behalf of, or otherwise for the Central Bank of Iraq.” OFAC’s amendments remove these prohibitions, and also implement technical and conforming changes. The amendments took effect December 28.

    Separately, on December 26, OFAC announced that two North Korean individuals have been added to the Specially Designated Nationals List. Assets belonging to individuals on the list are blocked, and transactions by U.S. persons involving these individuals or that are otherwise subject to U.S. jurisdiction are also generally prohibited. See here for previous InfoBytes coverage on North Korean sanctions.

    Financial Crimes Department of Treasury OFAC Sanctions International

  • OCC Recent Enforcement Actions Target BSA/AML Compliance Programs and National Flood Insurance Act Violations

    Federal Issues

    On December 14, the OCC released a list of recent enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with such parties. The new enforcement actions include cease and desist orders, civil money penalty orders, removal/prohibition orders, and restitution orders. The list also includes recently terminated enforcement actions.

    Cease and Desist Order. On November 9, the OCC issued a consent order (2017 Order) two days after converting a Japanese bank’s two New York branches under the supervision of the New York Department of Financial Services (NYDFS) to federally licensed branches under the supervision of the OCC. As part of the OCC’s approval process, the bank’s federal branches and New York branches agreed to the issuance of the 2017 Order, which requires adherence to “remedial provisions . . . substantively the same as those” in consent orders entered into in 2013 and 2014 with NYDFS. The previously issued consent orders addressed deficiencies related to the bank’s Bank Secrecy Act/Anti-Money Laundering (BSA/AML) sanctions compliance programs, specifically concerning the removal of key warnings to regulators on transactions with sanctioned countries.

    The 2017 Order, among other things, requires the bank to: (i) submit an action plan on enhancing internal controls and updating policies and procedures to correct BSA/AML deficiencies, address provisions applicable under the Office of Foreign Assets Control’s requirements, and implement requirements outlined in the 2013 and 2014 consent orders; (ii) ensure adherence to the action plan and 2017 Order under the direction of the bank’s general manager; (iii) submit a management oversight plan designed to improve and enhance the bank’s sanctions compliance programs; and (iv) prevent the retention or future engagement of any individual identified and “barred by the 2014 Consent Order from engaging, directly or indirectly, in any duties, responsibilities, or activities at or on behalf of the [b]ank or the [b]ank’s affiliates that involve their banking business in the [U.S.].” The 2017 Order does not require the bank to pay a civil monetary penalty.

    Civil Monetary Penalty. On October 10, the OCC assessed a $452,000 civil monetary penalty against a national bank lender for alleged violations of the National Flood Insurance Act and/or the Flood Disaster Protection Act. The bank agreed to pay the penalty without admitting or denying any wrongdoing. 

    Federal Issues OCC Enforcement Compliance Bank Secrecy Act Anti-Money Laundering OFAC NYDFS Financial Crimes Flood Insurance Sanctions National Flood Insurance Act Flood Disaster Protection Act

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