InfoBytes Blog
Filter
Subscribe to our InfoBytes Blog weekly newsletter and other publications for news affecting the financial services industry.
OFAC sanctions Iran’s central bank and national development fund
On September 20, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13224 against Iran’s central bank, the country’s national development fund, and an Iran-based company for providing financial support to the Islamic Revolutionary Guards Corps, its Qods Force (IRGC-QF), and Hizballah, the regime’s terrorist proxy. OFAC designated the bank for purportedly providing billions of dollars to these entities, and alleged that the national development fund “has been a major source of foreign currency and funding” for both the IRGC-QF and Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL). Sanctions were brought against the Iran-based company for concealing financial transfers for MODAFL’s military purchases, including those originating from the national development fund. As a result of the sanctions, “all property and interests in property of these entities that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.” OFAC noted that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated persons, and warned foreign financial institutions that if they knowingly facilitate significant transactions for any of the designated entities, they may be subject to U.S. correspondent account or payable-through account sanctions.
OFAC sanctions Iranian petroleum shipping network
On September 4, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order (E.O.) 13224 against a complex shipping network “that is directed by and financially supports the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and its terrorist proxy Hizballah.” According to OFAC, the IRGC-QF managed to obfuscate its involvement in moving hundreds of millions of dollars’ worth of Iranian oil over the past year through the use of the sanctioned shipping network for the benefit of illicit actors. The sanctioned shipping network includes 16 entities and 10 individuals, as well as 11 vessels identified as “as property in which blocked persons have an interest.”
As a result of the sanctions, “all property and interests in property of these entities that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.” OFAC noted that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated persons, and warned foreign financial institutions that if they knowingly facilitate significant financial transactions for any of the designated entities, they may be subject to U.S. correspondent account or payable-through account sanctions. Additionally, OFAC issued a reminder that “the purchase, acquisition, sale, transport, or marketing of petroleum or petroleum products from Iran is sanctionable pursuant to E.O. 13846,” and released a new shipping advisory warning the maritime community of these types of schemes and the sanctions risks associated with blocked persons.
OFAC sanctions bank connected to Hizballah; identifies several individuals as facilitators for HAMAS
On August 29, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13224 (E.O. 13224) against a Lebanon-based financial institution, along with three of its subsidiaries, for allegedly facilitating banking activities for Hizballah. OFAC designated the financial institution as a Specially Designated Global Terrorist “for assisting in, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, Hizballah.” As a result of the sanctions, “all property and interests in property of these targets that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.” OFAC noted that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated persons. The designated entities are also subject to secondary sanctions pursuant to the Hizballah Financial Sanctions Regulations, which implement the Hizballah International Financing Prevention Act of 2015, and allow OFAC the authority to “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 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.”
The same day, OFAC also designated several financial facilitators pursuant to E.O. 13224 for allegedly acting as intermediaries between Iran’s Islamic Revolutionary Guard Corps-Qods Force and HAMAS’s operational arm. According to OFAC, the Lebanon and Gaza-based financial facilitators are responsible for moving tens of millions of dollars from Iran through Hizballah to HAMAS, funding violence against people in Gaza. As a result, all property and interests in property of the sanctioned targets subject to U.S. jurisdiction are blocked and must be reported to OFAC. U.S. persons are also generally prohibited from entering into transactions with designated persons. Furthermore, “persons that engage in certain transactions with the individuals designated today may themselves be exposed to sanctions or subject to an enforcement action.”
OFAC amends several sanctions regulations
On July 22, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) released amendments to the Global Terrorism Sanctions Regulations (GTSR); Transnational Criminal Organizations Sanctions Regulations (TCOSR); and portions of the Hizballah Financial Sanctions Regulations (HFSR). Specifically, the GTSR and the TCOSR were amended to implement the Hizballah International Financing Prevention Amendments Act of 2018. The TCOSR was also amended to implement Executive Order 13863. OFAC also announced amendments to the GTSR to implement and reference the Sanctioning the Use of Civilians as Defenseless Shields Act of 2018. Finally, OFAC amended the HFSR to make various technical and conforming changes as well as update certain provisions. The amendments take effect July 23.
OFAC sanctions senior member of Hizballah operation
On July 19, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13224 against a senior Hizballah operative allegedly connected to the planning, coordination, and execution of terrorist attacks outside of Lebanon. According to OFAC, the action is part of the Treasury Department’s continued attempts to disrupt “the full range of Hizballah’s illicit financial and facilitation activities.” As a result of the sanctions, “all property and interests in property of this target that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.” OFAC notes that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated person. The designated individual is also subject to secondary sanctions pursuant to the Hizballah Financial Sanctions Regulations, which implement the Hizballah International Financing Prevention Act of 2015, and allow OFAC the authority to “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 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.”
OFAC sanctions Iranian-backed Hizballah officials
On July 9, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13224 against three Iranian-backed Hizballah political and security figures for “exploit[ing] Lebanon’s financial and security elements” in furtherance of Hizballah’s and Iran’s activities in support of terrorists and acts of terrorism. As a result of the sanctions, “all property and interests in property of these targets that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.” OFAC notes that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated individuals. The designated individuals are also subject to secondary sanctions pursuant to the Hizballah Financial Sanctions Regulations, which implement the Hizballah International Financing Prevention Act of 2015, and allow OFAC the authority to “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 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.”
OFAC sanctions Hizballah financier conduits
On April 24, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against two individuals and three entities “acting as conduits for sanctions evasion schemes" for Hizballah finances. The designated entities and individuals are also subject to secondary sanctions pursuant to the Hizballah Financial Sanctions Regulations, which implement the Hizballah International Financing Prevention Act of 2015, and allows OFAC the authority to “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 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.” As a result, all property and interests in property of the sanctioned individuals and entities, and of any entities owned 50 percent or more by them subject to U.S. jurisdiction, are blocked and must be reported to OFAC. U.S. persons are also generally prohibited from entering into transactions with designated persons.
Visit here for additional InfoBytes coverage on sanctions involving Hizballah networks.
OFAC identifies non-U.S. financial institutions on new list of banks facing correspondent account sanctions
On March 14, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced the introduction of the List of Foreign Financial Institutions Subject to Correspondent Account or Payable-Through Account Sanctions (CAPTA list). The CAPTA list will identify foreign financial institutions that are prohibited from opening or maintaining correspondent or payable-through accounts in the U.S. pursuant to sanctions including the Countering America's Adversaries Through Sanctions Act, North Korea Sanctions Regulations, Iranian Financial Sanctions Regulations, and the Hizballah International Financing Prevention Act of 2015. Certain regulations have also been amended to reflect the issuance of the new list. OFAC notes that the CAPTA list, which is separate from the Specially Designated Nationals List, will identify the specific prohibitions or strict conditions to which foreign financial institutions are subject. Non-U.S. financial institutions engaging in activity targeted under the above-mentioned regulations risk being added to the CAPTA list.
OFAC sanctions individuals connected to Hizballah, IRGC-QF networks in Iraq
On November 13, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against four Hizballah-affiliated individuals for their alleged leadership roles in the group’s terrorist financial activities in Iraq, including providing support for the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF). According to OFAC, the sanctions were issued pursuant to Executive Order 13224, which “targets terrorists and those providing support to terrorists or acts of terrorism.” OFAC’s designations follow the Hizballah International Financing Prevention Amendments Act of 2018—signed into law October 25—along with the reimposition of Iran-related sanctions on November 5 (see previous InfoBytes coverage here), and reinforces U.S. efforts to “protect the international financial system by targeting Hizballah’s supporters, financial networks, and those that facilitate and enable its destabilizing activities worldwide.” Furthermore, OFAC states that the four Specially Designated Global Terrorists are also subject to secondary sanctions under the Hizballah Financial Sanctions Regulations, which implement the Hizballah International Financing Prevention Act of 2015, and allows OFAC 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.” As a result, all property and interests in property belonging to the identified individuals subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from entering into transactions with them.
Visit here for additional InfoBytes coverage on sanctions involving Hizballah networks.
OFAC further expands Iranian sanctions, includes Hizballah-associated individuals
On May 17, U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) identified two Hizballah-associated individuals for their alleged role in financing terrorist networks, in addition to five companies owned or controlled by one of the designated individuals, as “Specially Designated Global Terrorists.” According to OFAC, the sanctions were issued pursuant to Executive Order 13224 (E.O. 13224), and designated individuals who had previously worked with the Central Bank of Iran, which was “recently identified as being complicit in facilitating the [Islamic Revolutionary Guard Corps-Qods Force’s (IRGC-QF)] access to hundreds of millions of dollars in U.S. currency, to expand banking access between Iran and Lebanon.” As covered earlier in InfoBytes, on May 15 OFAC sanctioned the governor and a senior official of the Central Bank of Iran for allegedly funneling millions of dollars on behalf of the IRGC-QF to Hizballah. The May 17 actions are designed to “further restrict Hizballah’s access to the U.S. financial system and the Iranian regime’s network of regional proxy groups.” As a result, all assets belonging to the identified individuals and entities subject to U.S. jurisdiction must be blocked and reported to OFAC, and U.S. persons are generally prohibited from dealing with them.
Separately, on May 22, OFAC announced that five Iranian individuals who allegedly provided ballistic missile-related technical expertise on behalf of the IRGC-QF have also been sanctioned pursuant to E.O. 13224. In addition to freezing assets subject to U.S. jurisdiction and prohibiting U.S. persons from engaging in transactions with the individuals, “foreign financial institutions that knowingly facilitate significant transactions for, or persons that provide material or certain other support to, the individuals and entities designated [] 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 continuing InfoBytes coverage of actions related to Iran.