Skip to main content
Menu Icon Menu Icon
Close

InfoBytes Blog

Financial Services Law Insights and Observations

Filter

Subscribe to our InfoBytes Blog weekly newsletter and other publications for news affecting the financial services industry.

  • OFAC sanctions Mexican nationals

    Financial Crimes

    On October 6, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to the Foreign Narcotics Kingpin Designation Act against four individuals who are allegedly senior members of a Mexican-based drug cartel, which is said to be responsible for trafficking deadly drugs into the U.S. As a result of the sanctions, all property and interests in property subject to U.S. jurisdiction that belong to the sanctioned persons must be blocked and reported to OFAC. U.S. persons are also generally prohibited from engaging in any dealings involving the property or interests in property of blocked or designated persons. OFAC further notes that the designations against the individuals were made in collaboration with the Drug Enforcement Administration and Mexico’s Financial Intelligence Unit.

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

    Share page with AddThis
  • OFAC updates Iran, Venezuela FAQs

    Financial Crimes

    On September 30, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced the publication of a new Iran-related FAQ. FAQ 932 clarifies that “transactions ordinarily incident to travel to or from Iran by U.S. persons are within an exemption under the Iranian Transactions and Sanctions Regulations (ITSR), 31 C.F.R. part 560, and therefore generally are not prohibited.” OFAC also noted that U.S. persons could be prohibited from engaging in transactions associated with persons blocked by sanctions programs or authorities outside the scope of the ITSR.

    The same week, on October 1, OFAC announced the publication of a new Venezuela-related FAQ. FAQ 933 clarifies that authorizations in paragraph (a) of Venezuela-related General Licenses 7C and 20B, respectively, have not expired.

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

    Share page with AddThis
  • OFAC sanctions individual and entity connected to international terrorism

    Financial Crimes

    On September 29, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions in coordinated efforts with the Government of Qatar, pursuant to Executive Order 13224, as amended, against seven individuals and one entity connected to a major Hizballah financial network based in the Arabian Peninsula. According to OFAC, three of the individuals are designated as Specially Designated Global Terrorists (SDGTs) “for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Hizballah.” Four additional individuals have been designated as SDGTs “for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of,” one of the three individuals designated as SDGTs above. One entity is also being designated “for being owned, controlled, or directed by, directly or indirectly,” one of the individuals designated as SDGTs. As a result, all property and interests in property belonging to the designated persons subject to U.S. jurisdiction are blocked, and any “entities that are owned, directly or indirectly 50 percent or more by them, individually, or with other blocked persons, that are in the United States or in the possession or control of U.S. persons must be blocked.” OFAC warned that the agency “can prohibit or impose strict conditions on the opening or maintaining in the United States of a correspondent account or a payable-through account by a foreign financial institution that either knowingly conducts or facilitates any significant transactions on behalf of a SGDT, or that, among other things, knowingly facilitates a significant transaction for Hizballah or certain persons designated for their connection to Hizballah.” OFAC’s announcement further noted that that “[e]ngaging in certain transactions with the individuals and entity designated today entails risk of secondary sanctions pursuant to E.O. 13224, as amended.”

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

    Share page with AddThis
  • OFAC reaches multiple settlements with companies that exported goods to Russia and Sudan

    Financial Crimes

    On September 27, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a roughly $1.4 million settlement with a Texas-based supplier of goods and services for the oil and gas industries (a subsidiary of a Netherlands corporation) for allegedly approving contracts that allowed a foreign subsidiary to supply goods to a Russian energy firm blocked under Directive 4 of Executive Order (E.O.) 13662, “Blocking Property of Additional Persons Contributing to the Situation in Ukraine,” as implemented by the Ukraine-Related Sanctions Regulations. According to OFAC’s web notice, between July 2015 and November 2016, U.S.-senior managers at the company approved five contracts for its foreign subsidiary to supply oil and exploration goods to the blocked energy firm, thus constituting a “prohibited provision of services involving a person determined to be subject to Directive 4 ([the blocked energy firm]), its property, or its interests in property.”

    In arriving at the settlement amount, OFAC considered various aggravating factors, including, among other things, that (i) U.S. senior managers knew that their approvals were for contracts to supply goods to a blocked entity; (ii) the company “acted directly contrary to U.S. foreign policy objectives by approving the sale of oil production or exploration equipment to an entity subject to the restrictions of Directive 4”; and (iii) the company should have recognized the risk involved when the contracts were approved.

    OFAC also considered various mitigating factors, including, among other things, that the company took meaningful corrective actions upon discovering the alleged violations to ensure sanctions compliance, and cooperated with OFAC’s investigation and entered into tolling agreements.

    OFAC separately reached a $160,000 settlement with a subsidiary of a subsidiary of the same Netherlands corporation for its apparent violation of OFAC’s now-repealed Sudanese Sanctions Regulations. According to OFAC’s web notice, three of the subsidiary’s U.S. employees allegedly facilitated the sale and shipment of oilfield equipment intended for delivery to Sudan, which was, at the time of the transaction, an apparent violation.   

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

    Share page with AddThis
  • OFAC issues Afghanistan general licenses and related FAQs

    Financial Crimes

    On September 24, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued two general licenses (GL) to support the ongoing flow of humanitarian efforts and other activities that support basic human needs in Afghanistan. GL 14, “Authorizing Humanitarian Activities in Afghanistan,” authorizes the U.S. government, nongovernmental organizations, and certain international organizations and entities, as well as those acting on their behalf, to engage in the provision of humanitarian assistance to Afghanistan or other activities that support basic human needs in Afghanistan. GL 15, “Transactions Related to the Exportation or Reexportation of Agricultural Commodities, Medicine, Medical Devices, Replacement Parts and Components, or Software Updates in Afghanistan,” authorizes certain transactions connected to the exportation or reexportation of agricultural commodities, medicine, and medical devices, replacement parts, components, and software updates for medical devices. OFAC also published updated four FAQs related to GLs 14 and 15 (see 928, 929, 930, and 931).

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

    Share page with AddThis
  • OFAC sanctions Mexican national

    Financial Crimes

    On September 22, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to the Foreign Narcotics Kingpin Designation Act against a Mexican-based cartel boss. OFAC noted that the designated individual allegedly oversaw a drug trafficking corridor and is allegedly responsible for smuggling drugs in the U.S. OFAC also designated seven other Mexican nationals and two Mexican entities. As a result of the sanctions, all property and interests in 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 or interests in property of blocked or designated persons.

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

    Share page with AddThis
  • Treasury takes robust measures against ransomware

    Financial Crimes

    On September 21, the U.S. Treasury Department announced recent actions that are focused on confronting “criminal networks and virtual currency exchanges responsible for laundering ransoms, encouraging improved cyber security across the private sector, and increasing incident and ransomware payment reporting to U.S. government agencies, including both Treasury and law enforcement.” As part of its continuing actions to counter the increasing threat of ransomware, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against a virtual currency exchange, pursuant to Executive Order 13694, as amended, for its alleged role in providing material support to the threat posed by criminal ransomware actors. 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. Additionally, OFAC issued an updated advisory, which highlights “the sanctions risks associated with ransomware payments in connection with malicious cyber-enabled activities and the proactive steps companies can take to mitigate such risks, including actions that OFAC would consider to be ‘mitigating factors’ in any related enforcement action.” Treasury also noted that FinCEN has engaged with industry, law enforcement, and others regarding the ransomware threat through the FinCEN Exchange public-private partnership (covered by InfoBytes here).

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

    Share page with AddThis
  • President Biden issues executive order addressing crisis in Ethiopia

    Financial Crimes

    On September 17, President Biden signed a new Executive Order (E.O.), Imposing Sanctions on Certain Persons with Respect to the Humanitarian and Human Rights Crisis in Ethiopia, that declares a national emergency with respect to the humanitarian and human rights crisis in northern Ethiopia. The E.O. provides the Secretary of the Treasury, in consultation with the Secretary of State, with the authority “to impose a range of targeted sanctions on persons determined, among other things, to be responsible for or complicit in actions or policies that expand or extend the ongoing crisis or obstruct a ceasefire or peace process in northern Ethiopia or commit serious human rights abuse.” Concurrently, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued three new general licenses, GLs 1, 2, and 3, which authorize official activities associated with certain international organizations and entities, certain nongovernmental organizations’ activities, and certain transactions associated with the exporting or reexporting of agricultural commodities, food, medicine, and medical items. OFAC also published six related FAQs (see FAQs 922923924925926, and 927), which provide additional clarity concerning the non-application of OFAC’s 50 Percent Rule to property and interests in property of persons blocked pursuant to the new E.O., as well as guidance on activities authorized by the new GLs.  

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

    Share page with AddThis
  • OFAC sanctions entities connected to international terrorism

    Financial Crimes

    On September 17, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13224 against members of Lebanon- and Kuwait-based financial conduits that fund Hizballah. In addition, OFAC designated members of an international network of financial facilitators and front companies connected to Hizballah and Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF). Together, these networks allegedly “laundered tens of millions of dollars through regional financial systems and conducted currency exchanges and trades” for the benefit of both entities. According to OFAC, Hizballah, supported by the IRGC-QF, utilized the revenues from these networks to fund terrorism, and condoned instability throughout the region. As a result, all property and interests in property belonging to the designated persons subject to U.S. jurisdiction are blocked, and any “entities that are owned, directly or indirectly, 50 percent or more by them, individually, or with other blocked persons, that are in the United States or in control of a U.S. person must be blocked.” U.S. persons are “generally prohibited from engaging in transactions” with the designated members. OFAC further warned that the agency “can prohibit or impose strict conditions on the opening or maintaining in the United States of a correspondent account or a payable-through account by a foreign financial institution that either knowingly conducted or facilitated any significant transaction on behalf of a Specially Designated Global Terrorist or, among other things, knowingly facilitates a significant transaction for Hizballah or certain persons designated for their connection to Hizballah.”

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

    Share page with AddThis
  • OFAC sanctions individuals in Turkey

    Financial Crimes

    On September 16, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13224, as amended, against five individuals for allegedly providing “a range of financial and travel facilitation services” for a terrorist organization in Turkey. According to OFAC, the individuals are designated “for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, [the terrorist organization].” As a result of the sanctions, all property and interests in property belonging to the sanctioned persons are blocked. OFAC’s announcement further noted that OFAC regulations generally prohibit U.S. persons from participating in transactions with designated persons, adding that “[e]ngaging in certain transactions with the individuals designated today entails risk of secondary sanctions pursuant to E.O. 13224, as amended.”

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

    Share page with AddThis

Pages

Upcoming Events