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 supporter of Iranian chemical weapons research

    Financial Crimes

    On December 3, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against a subordinate to the Iranian Organization of Defensive Innovation and Research and its director for its involvement in Iran’s chemical weapons research. The government made the sanctions designations pursuant to Executive Order 13382, which aims to freeze the assets of proliferators of weapons of mass destruction along with their supporters. As a result, all property and interests in property belonging to, or owned by, the designated persons subject to U.S. jurisdiction are blocked, and U.S. persons are also generally prohibited from engaging in transactions with them. OFAC further warned foreign financial institutions that knowingly facilitating significant transactions or providing significant support to the designated persons may subject them to U.S. sanctions.

    Additionally, OFAC updated and issued several Iran-related FAQs.

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

    Share page with AddThis
  • OFAC sanctions network for financially contributing to the Supreme Leader of Iran

    Financial Crimes

    On November 18, the U.S. Treasury Department’s Office of Foreign Assets Control announced sanctions against “a key patronage network for the Supreme Leader of Iran” (Foundation)—a conglomerate of roughly 160 holdings in key sectors of Iran’s economy, including finance, energy, construction, and mining—along with Iran’s Minister of Intelligence and Security. The Foundation is being designated pursuant to Executive Order (E.O.) 13876, which also targets the Supreme Leader of Iran, the Iranian Supreme Leader’s Office (SLO), as well as their affiliates. According to OFAC, the Foundation, among other things, allegedly transferred large amounts of money to the SLO and made financial contributions to candidates for Iran’s presidential election. The Foundation also allegedly “maintains control of its economic empire through a network of holding companies touching nearly every sector of the Iranian economy.” Seven of these companies have also been designated, “along with dozens of their owned-or-controlled subordinate entities, as well as a number of “independent” Foundation owned-or-controlled subsidiaries and their owned-or-controlled subordinate companies.” The Iranian Minister of Intelligence and Security is being designated pursuant to E.O. 13553 for “having acted or purported to act for or on behalf of, directly or indirectly, the [Ministry of Intelligence and Security],” which plays “a key role in the Iranian regime’s brutal human rights abuses against the Iranian people.”

    As a result, all property and interests in property belonging to, or owned by, the designated persons subject to U.S. jurisdiction are blocked, and U.S. persons are also generally prohibited from engaging in transactions with them. OFAC further warned foreign financial institutions that knowingly facilitating significant transactions or providing significant support to the designated persons may subject them to U.S. correspondent account or payable-through account sanctions.

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

    Share page with AddThis
  • OFAC sanctions network for procuring goods for Iranian military firm

    Financial Crimes

    On November 10, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against a network of six companies and four individuals for allegedly facilitating the procurement of sensitive goods—including U.S.-origin electronic components—for an Iranian military firm that was previously designated by the U.S. and the European Union for being owned or controlled by Iran’s Ministry of Defense and Armed Forces Logistics. The designations are being taken pursuant to Executive Order 13382, which aims to freeze the assets of proliferators of weapons of mass destruction along with their supporters. As a result, all property and interests in property belonging to, or owned by, the designated persons subject to U.S. jurisdiction are blocked, and U.S. persons are also generally prohibited from engaging in transactions with them. OFAC further warned foreign financial institutions that knowingly facilitating significant transactions or providing significant support to the designated persons may subject them to U.S. sanctions.

    Concurrent with OFAC’s designations, the U.S. Attorney’s Office for the District of Columbia filed a criminal complaint against two of the designated entities and one of the designated individuals for conspiring to violate U.S. export laws and sanctions against Iran.

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

    Share page with AddThis
  • OFAC sanctions entities for Iranian petrochemical sales

    Financial Crimes

    On October 29, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13846 against eight entities for their alleged “involvement in the sale and purchase of Iranian petrochemical products brokered by [a petrochemical company]. . .designated by Treasury in January 2020.” The designated entities—based in Iran, China, and Singapore—allegedly aided the petrochemical company’s efforts to process and move funds generated by the sale of these products, which were then used to finance the Iranian regime’s “destabilizing agenda of support to corrupt regimes and terrorist groups throughout the Middle East and, more recently, Venezuela.”

    In addition, OFAC also updated its List of Specially Designated Nationals and Blocked Persons to add additional aliases for an Iraq-based bank that was previously designated, among other things, for being “used by Iran’s Central Bank Governor to covertly funnel millions of dollars on behalf of the IRGC-QF to support Hizballah.”

    As a result, all property and interests in property belonging to, or owned by, the designated persons subject to U.S. jurisdiction are blocked, and U.S. persons are also “generally prohibited from engaging in transactions with them.” OFAC further warned foreign financial institutions that knowingly facilitating significant transactions or providing significant support to the designated persons may subject them to sanctions that terminate their access to the U.S. financial system.

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

    Share page with AddThis
  • OFAC sanctions Iranian Ministry of Petroleum and others for IRGC-QF support

    Financial Crimes

    On October 26, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) designated the Iranian Ministry of Petroleum and two oil companies, as well as multiple entities and individuals, including front companies, subsidiaries, and senior executives, for allegedly providing financial support to Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), pursuant to Executive Order 13224. Additionally, OFAC designated four persons involved in the sale of Iranian gasoline to “the illegitimate Maduro regime in Venezuela.” As a result, all property and interests in property belonging to the identified individuals subject to U.S. jurisdiction are blocked, and “any entities that are owned, directly or indirectly, 50 percent or more by such persons, are also blocked.” U.S. persons are generally prohibited from dealing with any property or interests in property of blocked or designated persons, and OFAC warned foreign financial institutions that if they knowingly facilitate significant transactions for the designated persons they “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.”

    Concurrently, OFAC issued amended General License 8A, “Authorizing Certain Humanitarian Trade Transactions Involving the Central Bank of Iran or the National Iranian Oil Company,” which replaces and supersedes GL 8 and allows certain humanitarian trade transactions involving one of the designated oil entities.

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

    Share page with AddThis
  • OFAC sanctions Iranian entities connected to IRGC-QF

    Financial Crimes

    On October 22, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order (E.O.) 13848 against five Iranian entities for allegedly attempting to influence the U.S. electoral process. According to OFAC, these designations are intended to “counter efforts” from foreign actors that “spread[] disinformation online and execut[e] malign influence operations aimed at misleading U.S. voters.” Three of the entities, including the Islamic Revolutionary Guard Corps (IRGC) and the IRGC-Qods Force (IRGC-QF), are designated “for having directly or indirectly engaged in, sponsored, concealed, or otherwise been complicit in foreign interference in the 2020 U.S. presidential election.” Two other entities are designated for being owned or controlled by the IRGC-QF, which, along with the IRGC, has been designated under a number of authorities since 2007. As a result, all property and interests in property belonging to, or owned by, the designated persons subject to U.S. jurisdiction are blocked, and “any entities 50 percent or more owned by one or more designated persons are also blocked.” 

    The same day, OFAC also sanctioned an IRGC-QF general pursuant to E.O. 13224 for allegedly “exploit[ing] his position as the Iranian regime’s ambassador in Iraq to obfuscate financial transfers conducted for the benefit of the IRGC-QF.” According to OFAC, the designated individual, among other things, allegedly facilitated financial transfers benefiting the IRGC-QF, and helped “IRGC-QF obtain foreign currency in Iraq, in return for equivalent sums that the IRGC-QF in Iran has transferred to relevant entities.”

    As a result of OFAC’s recent actions, all property and interests in property belonging to, or owned by, the designated persons subject to U.S. jurisdiction are blocked. U.S. persons are also “generally prohibited from engaging in transactions” with the designated individuals. OFAC further warned foreign financial institutions that knowingly facilitating significant transactions or providing significant support to the designated entities may subject them to sanctions and could terminate access to the U.S. financial system.

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

    Share page with AddThis
  • OFAC reaches $4.1 million settlement with holding company to resolve Iranian Transactions and Sanctions Regulations violations

    Financial Crimes

    On October 20, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a more than $4.1 million settlement with a Nebraska-based multinational conglomerate holding company to resolve 144 apparent violations of the Iranian Transactions and Sanctions Regulations engaged in by its indirectly wholly owned Turkish subsidiary. According to OFAC’s web notice, the Turkish subsidiary, in violation of the company’s compliance policies, allegedly sold goods to two third-party Turkish distributors knowing that the goods “would be shipped to a distributor in Iran for resale to Iranian end-users, including several entities later identified as meeting the definition of the Government of Iran.” The Turkish subsidiary also purchased goods manufactured by other company subsidiaries, and allegedly took measures “to obfuscate its dealings with Iran” and conceal these activities from the company. Employees of certain other company subsidiaries also allegedly received communications revealing that these orders may have been intended for Iranian end users; however only one of these subsidiaries warned the Turkish subsidiary that such transactions were prohibited.

    In arriving at the settlement amount, OFAC considered various aggravating factors, including that (i) the Turkish subsidiary’s management “willfully engaged” in prohibited transactions, and certain senior management “intentionally concealed its dealings with Iran”; (ii) certain company subsidiaries had knowledge, or reason to know, that some of the products sent to the Turkish subsidiary were intended for Iran; and (iii) the Turkish subsidiary “demonstrated a pattern of conduct by knowingly engaging in prohibited dealings for approximately three years.”

    OFAC also considered various mitigating factors, such as (i) the company voluntarily self-disclosed the apparent violations, and cooperated with the investigation; (ii) the company and its subsidiaries and affiliates signed a tolling agreement; and (iii) the company has undertaken remedial measures, including enhancing its compliance procedures for foreign subsidiaries, to minimize the risk of similar violations from occurring in the future.

    Financial Crimes OFAC Settlement Enforcement Of Interest to Non-US Persons

    Share page with AddThis
  • OFAC sanctions 18 major Iranian banks

    Financial Crimes

    On October 8, the U.S. Treasury Department announced that the Secretary of the Treasury, in consultation with the Secretary of State, sanctioned 18 major Iranian banks, consistent with E.O. 13902, which identified Iran’s financial sector “as an additional avenue that funds the Iranian government’s malign activities.” E.O. 13902 provides Treasury with the authority to sanction any Iranian financial institution. The sanctioned banks include 16 banks operating in Iran’s financial sector and one bank that is owned or controlled by a sanctioned Iranian bank. In addition, OFAC sanctioned an Iranian military-affiliated bank under Treasury’s counter-proliferation authority pursuant to E.O. 13382. “Today’s action to identify the financial sector and sanction eighteen major Iranian banks reflects our commitment to stop illicit access to U.S. dollars,” Treasury Secretary Steven T. Mnuchin stated. OFAC noted that the sanctions under E.O. 13902 do not affect existing authorizations and exceptions for humanitarian trade (covered by a Buckley Special Alert), “which remain in full force and effect for these seventeen banks.”

    As a result, all property and interests in property of the designated entities that are in the U.S. or in the possession or control of U.S. persons must be blocked and reported to OFAC. U.S. persons are also generally prohibited from engaging in transactions with the designated entities. OFAC is providing a 45-day period for non-U.S. persons to wind down non-humanitarian transactions that may become subject to sanctions as a result of the designations. OFAC further warned that “financial institutions and other persons that engage in certain transactions or activities with the sanctioned entities after a 45-day wind-down period may expose themselves to secondary sanctions or be subject to an enforcement action.”

    Concurrent with the action, OFAC issued General License L, which outlines transactions and activities involving the sanctioned entities “that are authorized, exempt, or otherwise not prohibited under the Iranian Transactions and Sanctions Regulations.” Additional guidance is also provided in recently issued FAQs.

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

    Share page with AddThis
  • OFAC settles Iranian Transactions and Sanctions Regulations violations

    Financial Crimes

    On September 24, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a $473,157 settlement with a California-based equipment and software company for six apparent violations of the Iranian Transactions and Sanctions Regulations (ITSR). According to OFAC’s web notice, from roughly January 2016 to June 2016, the company—through a former subsidiary it had since merged with—allegedly reexported U.S. export-controlled test measurement equipment to Iran. Among other things, OFAC noted that prior to the merger, the subsidiary “committed to cease all existing and future business” with certain sanctioned countries, including Iran. However, after the acquisition, certain subsidiary personnel continued to engage in transactions with Iran, with three employees taking “measures to obfuscate from [the company] their dealings with Iran.”

    In arriving at the settlement amount, OFAC considered various aggravating factors, including that (i) the subsidiary willfully violated the ITSR by shipping products in order to bypass the company’s directive to cease Iran-related business; and (ii) some of the subsidiary’s senior branch and sales managers knowingly participated in the apparent violations.

    OFAC also considered various mitigating factors, including that the company (i) fully cooperated with OFAC’s investigation; (ii) undertook several remedial measures, such as terminating the appropriate employees; (iii) “assess[ed] past and current transactions for compliance with OFAC regulations, implement[ed] mechanisms to halt current transactions, and ensur[ed] that no further transactions involved restricted countries”; and (iv) enhanced its sanctions compliance program to minimize the risk of similar violations from occurring in the future.

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

    Share page with AddThis
  • OFAC issues Iran nuclear and ballistic missile program sanctions

    Financial Crimes

    On September 21, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) designated three high-ranking individuals of the Atomic Energy Organization of Iran (AEOI), numerous AEOI subsidiaries, equipment supply companies, and various senior officials working on Iran’s missile programs pursuant to Executive Order (E.O.) 13382, which allows for sanctions for engaging in or supporting the proliferation of weapons of mass destruction (WMD). As a result of the sanctions, all property and interests in property of the designated 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 warned foreign financial institutions that knowingly facilitating significant transactions or providing significant support to the designated entities may subject them to sanctions and could sever access to the U.S. financial system.

    In addition, the U.S. Department of Treasury announced a new Executive Order titled, "Blocking Property of Certain Persons with Respect to the Conventional Arms Activities of Iran,” which authorizes the Secretary of the Treasury, in conjunction with the Secretary of State, to impose asset blocking sanctions on any person engaged in any activity that materially contributes to the supply, sale, or transfer of destabilizing conventional weapons and acquisition of arms and related materiel by Iran.

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

    Share page with AddThis

Pages

Upcoming Events