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  • 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

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  • OFAC Penalizes Dental Supply Company for Violations of the Iranian Transactions and Sanctions Regulations

    Financial Crimes

    The U.S. Treasury Department’s Office of Foreign Asset Control (OFAC) announced that it entered into a $1.2 million settlement with a U.S. dental supply company for alleged violations of the Iranian Transactions and Sanctions Regulations (ITSR). According to the December 6 announcement, between November 2009 and July 2012, two of the company’s subsidiaries exported 37 shipments of dental supplies to distributors in other countries with “knowledge or reason to know that the goods were ultimately destined for Iran.” OFAC determined that the alleged violations were non-egregious.

    In determining the settlement amount, OFAC considered multiple factors, including that (i) the subsidiaries acted willfully in violation of the ITSR because employees concealed their knowledge that the goods were destined for Iran; (ii) subsidiary supervisory personnel actively concealed their awareness of the apparent violations from their U.S. parent company; and (iii) the U.S. company is “commercially sophisticated” with knowledge of OFAC’s regulations. OFAC also considered numerous mitigating factors, including (i) the fact that the U.S. company has not received a penalty from OFAC in the previous five years; (ii) the harm to the ITSR program was limited; and (iii) the U.S. company cooperated with the investigation and took remedial steps. 

    Financial Crimes OFAC Sanctions Settlement Department of Treasury Iran

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  • OFAC Announces Cuban Assets Control Regulations Updates; Releases New FAQs

    Financial Crimes

    On November 8, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced amendments to the Cuban Assets Control Regulations to implement changes related to certain financial transaction restrictions and economic activities. In accordance with the National Security Presidential Memorandum issued by President Trump on June 16, the amendments will, among other things, prohibit “persons subject to U.S. jurisdictions” from engaging in financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List. This effort is intended to “channel economic activities away from the Cuban military, intelligence, and security services, while maintaining opportunities for Americans to engage in authorized travel to Cuba and support the private, small business sector in Cuba.” The amendments will take effect November 9. OFAC also released updated FAQs and a fact sheet to answer questions related to the amended regulations.

    Refer here, here, and here for InfoBytes coverage on OFAC settlements of alleged violations of the Cuban Assets Control Regulations.

    Financial Crimes OFAC Department of State Settlement International Cuba

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  • OFAC Sanctions North Korean Officials, Amends Global Terrorism Sanctions Regulations

    Financial Crimes

    On October 26, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions on an additional seven individuals (pursuant to Executive Order 13687) and three entities (pursuant to Executive Order 13722) connected to the North Korean government for ongoing human rights abuses. According to Treasury Secretary Steven T. Mnuchin, the sanctions target “financial facilitators who attempt to keep the regime afloat with foreign currency earned through forced labor operations.” The sanctions freeze all property or interests in property within U.S. jurisdiction, and transactions by U.S. persons involving these individuals and entities are also “generally prohibited.” Please see here for previous InfoBytes coverage on North Korean sanctions.

    Separately, on October 30, OFAC released amendments to its Global Terrorism Sanctions Regulations to include recently identified officials, agents, and affiliates connected to Iran’s Islamic Revolutionary Guard Corps. The amendments take effect upon publication in the Federal Register on October 31 and are issued pursuant to the Countering America's Adversaries Through Sanctions Act of 2017 (CAATSA). See previous InfoBytes coverage on CAATSA here.

    Financial Crimes OFAC Sanctions CAATSA North Korea Iran

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  • OFAC Amends Sanctions on Russia’s Financial and Energy Sectors

    Financial Crimes

    On September 29, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) amended Directive 1 and Directive 2 of its Ukrainian-/Russian-related Sectoral Sanctions, as required by the Countering America’s Adversaries Through Sanctions Act of 2017 (H.R. 3364), which was signed into law by President Trump in August. (See previous InfoBytes summary here.) As amended, Directive 1 prohibits U.S. persons from all dealings in equity issued on or after July 16, 2014, of persons determined by OFAC to be part of the Russian financial services sector. Directive 1 also prohibits U.S. persons from dealing in the following debt of such persons: (i) debt of over 90 days maturity issued on or after July 16, 2014, but prior to September 12, 2014; (ii) debt of over 30 days maturity issued on or after September 12, 2014, but before November 28, 2017; and (iii) debt of over 14 days maturity issued on or after November 28, 2017. As amended, Directive 2 prohibits U.S. persons from all dealings in the following debt of persons identified by OFAC to be part of the Russian energy sector: (i) all debt of over 90 days maturity issued on or after July 16, , but before November 28, 2017; and (ii) all debt of over 60 days maturity issued on or after November 28, 2017. OFAC also released updated FAQs to answer questions related to the amended directives.

    Financial Crimes OFAC Sanctions Executive Order Trump CAATSA Russia Ukraine

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  • President Trump’s Executive Order Imposes New Sanctions Against North Korea

    Financial Crimes

    On September 21, President Trump announced the issuance of new sanctions targeting individuals, companies, and financial institutions that finance or facilitate trade with North Korea, in addition to tightening trade restrictions. The Executive Order approves broad limitations on any foreign financial institution that knowingly conducts “significant” transactions involving North Korea. This includes transactions that “originate from, are destined for, or pass through a foreign bank account that has been determined by the Secretary of the Treasury to be owned or controlled by a North Korean person, or to have been used to transfer funds in which any North Korean person has an interest.” These funds “are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in.” The restrictions also prohibit dealing with persons involved in North Korea’s “construction, energy, financial services, fishing, information technology, manufacturing, medical, mining, textiles, or transportation industries,” and further authorizes the Secretary of the Treasury to restrict U.S.-based correspondent and payable-through accounts.

    These sanctions are in addition to those previously passed by President Trump in August. (See previous InfoBytes coverage here.) Separately, as previously covered in InfoBytes, last month the Treasury Department’s Office of Foreign Assets Control (OFAC) imposed sanctions against certain Chinese and Russian entities and individuals, among others, for allegedly aiding North Korea’s efforts to develop weapons of mass destruction.

    In response to President Trump’s latest sanctions, OFAC released updates to its FAQs concerning the additional sanctions. OFAC also issued General License 10 concerning the authorization restrictions to certain vessels and aircraft, and General License 3-A, which addresses permitted “normal service charges.”

    Financial Crimes Trump Sanctions Executive Order OFAC Department of Treasury North Korea China Russia

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  • OFAC Imposes Additional Iranian Sanctions, List Includes Entities Involved in DDoS Attacks Against U.S. Financial Institutions

    Financial Crimes

    On September 14, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced it was imposing sanctions on 11 entities and individuals for supporting designated Iranian actors or for conducting malicious cyberattacks, including engaging in a series of distributed denial of service (DDoS) attacks against approximately 46 U.S. financial institutions. As reported in an indictment delivered by a federal grand jury in the Southern District of New York (see March 24, 2016 DOJ press release), the DDoS attacks—allegedly conducted by seven Iranian individuals between December 2011 and mid-2013—denied customers access to online bank accounts and collectively cost the affected financial institutions “tens of millions of dollars in remediation costs as they worked to neutralize and mitigate the attacks on their [computer] servers.” During a DDoS attack, a “malicious actor” gains remote control of a server through the installation of malicious software. Once compromised, the “malicious actor” can collect hundreds or thousands of these compromised devices (collectively known as a “botnet”), and, once control is achieved, will “direct the computers or servers comprising the botnet to carry out computer network attack[s] and computer network exploitation activity.” Three of the seven sanctioned individuals worked for a company that was added to OFAC’s updated SDN list on September 14 and oversaw a network of compromised computers that powered DDoS attacks. The other four individuals operated a second DDoS botnet on behalf of a different company listed on OFAC’s non-SDN list. Both Iranian-based private computer security companies perform work on behalf of the Iranian Government, including Iran’s Islamic Revolutionary Guard Corps. Pursuant to E.O. 13694, U.S. persons are prohibited from dealing with the designated entities and individuals, and “foreign financial institutions that facilitate significant transactions for, or persons that provide material or certain other support to, the entities and individuals 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.”

    In addition, pursuant to E.O. 13382, OFAC sanctioned an Iranian-based engineering company for engaging in activities related to Iran’s ballistic missile program, which include providing “ financial, material, technological, or other support for, or goods or services in support of, the [Islamic Revolutionary Guard Corps].” Two Ukrainian-based companies were also sanctioned pursuant to E.O. 13224 for assisting previously sanctioned Iranian and Iraqi airlines in obtaining U.S.-origin aircraft, as well as crew and services.

    Financial Crimes Sanctions Department of Treasury OFAC DOJ Indictment Privacy/Cyber Risk & Data Security

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  • OFAC Settles Alleged Iran Sanction Violations with Singapore-Based Oilfield Services Company

    Financial Crimes

    On August 24, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced that it had reached a $415,350 settlement with a Singaporean oilfield services company for an alleged 55 violations of Iran sanctions regulations. OFAC asserted that the company “exported or attempted to export 55 orders of oil rig supplies from the [U.S.] to Singapore and the United Arab Emirates, and then re-exported or attempted to re-export these supplies to four separate oil rigs located in Iranian territorial waters” from approximately October 2011 through February 2013. OFAC alleged that each instance of this conduct, which the company did not voluntarily self-disclose, violated OFAC’s Iranian Transactions and Sanctions Regulations. Had the company not settled, OFAC determined that civil monetary penalties ranged from approximately $923,000 to $13.75 million. In establishing the penalty, OFAC considered that the company: (i) failed to act with an appropriate level of caution by exporting goods to oil rigs located in Iranian territorial waters; (ii) aided the development of Iran's energy resources; (iii) “is a large, sophisticated company with 14 offshore drilling rigs doing business throughout the world;” and (iv) “did not have an OFAC compliance program in place at the time of the transactions.” As for mitigating factors, OFAC determined that: (i) the company has no prior sanctions history with OFAC; (ii) the company took remedial action by implementing an OFAC compliance program; and (iii) the company cooperated with the investigation and entered into a tolling agreement with OFAC.

    Financial Crimes OFAC Sanctions Department of Treasury

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  • OFAC Settles Alleged Iran Sanction Violations with International Freight Forwarder

    Financial Crimes

    On August 17, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced it had reached a $518,063 civil settlement with a California-based international freight forwarder for alleged violations of sanctions against Iran. OFAC claimed that the company shipped “used and junked cars and parts” from the U.S. to Afghanistan, via Iran, on 140 separate occasions from approximately April 2010 through June 2012. OFAC alleged that each instance of this conduct, which the company “did not voluntarily self-disclose,” violated OFAC’s Iranian Transactions and Sanctions Regulations (ITSR). See 31 C.F.R. § 560.204.

    Had the company not settled, OFAC determined that civil monetary penalties ranged from approximately $1.5 million to $35 million. In establishing this range, OFAC alleged that the following were aggravating factors: (i) the company “demonstrated a reckless disregard for U.S. sanctions requirements by failing to exercise a minimal degree of caution or care in transshipping goods through Iran”; (ii) the company’s “President and co-owner knew and approved of the transshipments via Iran”; (iii) the company “provided an economic benefit to Iran through its pattern of conduct and the volume of transactions in which it engaged”; and (iv) the company is “sophisticated” and has “experience with U.S. export laws and OFAC regulations, particularly the ITSR.”

    As for mitigating factors, OFAC alleged that: (i) the goods “did not appear to have an end use in Iran”; (ii) the company “has no prior OFAC sanctions history”; (iii) the company is a “small business,” and the alleged violations “constituted less than one percent of its total shipments” during the relevant time period; (iv) the company “had an OFAC compliance program in place” during the relevant time period; (v) the company “took remedial steps”; and (vi) the company “cooperated with OFAC’s investigation.”

    Financial Crimes OFAC Sanctions Department of Treasury

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  • OFAC Fines Global Risk Mitigation Firm for Violating Iranian Sanctions

    Financial Crimes

    On August 10, the Treasury’s Office of Foreign Assets Control (OFAC) announced it had reached a settlement with a global company that provides services in regulatory risk mitigation for alleged violations of OFAC sanctions against Iran. OFAC claimed that, beginning in 2012, on 44 separate occasions, the firm imported Iranian-origin services into the U.S., and on 28 different occasions, engaged in “transactions or dealings related to Iranian-origin services by approving and facilitating its foreign subsidiaries’ payments to providers of Iranian-origin services.” In establishing the penalty, OFAC considered that the firm failed to exercise a minimal degree of caution—and senior management allegedly knew or had reason to know the transactions related to services of Iranian-origin—and that the transactions giving rise to the apparent violations were not eligible for OFAC authorization and yielded economic benefits to Iran. Furthermore, OFAC claimed the “frequency and duration of the apparent violations constitute a pattern or practice of conduct,” and that the firm’s ineffective compliance program failed to recognize the risks of engaging in the aforementioned transactions. OFAC maintained the firm violated the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560. OFAC also considered the company’s prior history of not being sanctioned; its significant remedial measures; and substantial cooperation with OFAC’s investigation.

    The settlement requires the firm to pay more than $250,000 to settle the claims, which the firm did not voluntarily self-disclose to OFAC.

    Financial Crimes OFAC Sanctions Department of Treasury

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