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OFAC sanctions entities for Iranian petrochemical sales
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.
OFAC sanctions Iranian Ministry of Petroleum and others for IRGC-QF support
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.
OFAC issues amended Venezuela-related general license and FAQ
On October 6, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued Venezuela General License (GL) 5E, which supersedes GL 5D and authorizes certain transactions otherwise prohibited under Executive Orders 13835 and 13857 related to, or that provide financing for, dealings in the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or after January 19, 2021. Concurrently, OFAC amended a Venezuela-related frequently asked question regarding GL 5E.
OFAC sanctions individuals for supporting Maduro regime
On September 22, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against five key individuals for allegedly “facilitate[ing] the illegitimate Maduro regime’s efforts to undermine democracy in Venezuela.” The sanctions, issued pursuant to Executive Order 13692, reflect Treasury’s continued efforts to hold persons who offer support to the Maduro regime accountable. 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 the designated individuals, are also blocked.” U.S. persons are generally prohibited from dealing with any property or interests in property of blocked or designated persons.
OFAC sanctions officials for supporting Maduro regime
On September 4, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13692 against four current or former Venezuelan government officials for allegedly facilitating “the illegitimate Maduro regime’s efforts to undermine the independence and democratic order of Venezuela,” and for engaging in a scheme to, among other things, “control[ ] the state’s wealth and assets for regime purposes.” As a result, all property and interests in property belonging to the identified individuals subject to U.S. jurisdiction are blocked and must be reported to OFAC. Additionally, “any entities that are owned, directly or indirectly, 50 percent or more by the designated individuals are also blocked.” OFAC further noted that U.S. persons are generally prohibited from dealing with any property or interests in property of blocked or designated persons.
OFAC sanctions persons for providing support to Iranian airline, DOJ files concurrent criminal charges
On August 19, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) designated two companies, as well as the owner of one of the companies, pursuant to Executive Order 13224 for allegedly providing material support to an Iranian airline previously “designated under counterterrorism authorities for support to Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), as well as under a counter proliferation authority that targets weapons of mass destruction proliferators and their supporters.” According to OFAC, the designated persons allegedly provided services to assist the airline sustain its fleet of aircraft and allow it to support the IRGC-QF, as well as transport Iranian technicians and technical equipment to Venezuela to support the Maduro regime. The designations follow a recent OFAC action that targeted a China-based company for allegedly acting as a general sales agent for or on behalf of the Iranian airline (covered by InfoBytes here), and serves as “another warning to the international aviation community of the sanctions risk for individuals and entities that choose to maintain commercial relationships with [the Iranian airline] and other designated airlines.” 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 noted that its regulations “generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons, unless licensed or exempt,” and warned foreign financial institutions that knowingly facilitating significant transactions or providing significant financial services to the designated persons may subject them to U.S. correspondent account or payable-through sanctions.
On the same day, the DOJ announced criminal charges against the designated individual and one of the companies for allegedly conspiring to violate U.S. export laws, defraud the U.S., and violate the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSRs).
OFAC sanctions investors supporting Syrian government
On July 29, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against one individual and nine entities for providing significant investment support to the Syrian government. OFAC noted that, among other things, the designated individual and his companies knowingly provided “significant financial, material, or technological support to, or knowingly engag[ed] in a significant transaction with, the Government of Syria (including any entity owned or controlled by the Government of Syria) or a senior political figure of the Government of Syria.” As a result, all property and interests in property belonging to the designated persons and subject to U.S. jurisdiction are blocked and must be reported to OFAC. OFAC further noted that its regulations “generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated persons,” and warned that non-U.S. persons that engage in transactions with the designated persons may expose themselves to designation. OFAC also referenced a previously published Fact Sheet (covered by InfoBytes here), which highlights the most pertinent exemptions, exceptions, and authorizations for humanitarian assistance and trade under the Syria, Iran, Venezuela, North Korea, Cuba, and Ukraine/Russia-related sanctions programs to ensure humanitarian-related trade and assistance reaches at-risk populations through legitimate and transparent channels during the global Covid-19 pandemic.
OFAC sanctions individuals for supporting Maduro regime
On July 23, the U.S. Treasury Department’s Office of Foreign Assets Control announced sanctions against two individuals for allegedly assisting, sponsoring, or providing “financial, material, or technological support for, or goods or services to or in support of” either the previously designated son of Nicolás Maduro Moros, or to Venezuelan government senior officials. The individuals, sanctioned pursuant to Executive Order 13692, are allegedly central figures in Venezuela’s gold industry and “oversee the financial mechanism of [an] illicit gold scheme.” 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 the designated individuals, are also blocked.” U.S. persons are generally prohibited from dealing with any property or interests in property of blocked or designated persons.
OFAC issues amended Venezuela-related general license and FAQ
On July 15, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued Venezuela General License (GL) 5D, which supersedes GL 5C and authorizes certain transactions otherwise prohibited under Executive Orders 13835 and 13857 related to, or that provide financing for, dealings in the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or after October 20, 2020. Concurrently, OFAC issued a new Venezuela-related frequently asked question regarding GL 5D.
OFAC settles with global e-commerce, digital service provider over multiple sanctions violations
On July 8, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a $134,523 settlement with a Washington-based company that provides retail, e-commerce, and digital services worldwide. According to OFAC, due to deficiencies in the company’s sanctions screening process, between 2011 and 2018, the company provided goods and services to OFAC sanctioned persons; to persons located in the sanctioned region or countries of Crimea, Iran, and Syria; and “for persons located in or employed by the foreign missions of Cuba, Iran, North Korea, Sudan, and Syria.” Additionally, the company allegedly accepted and processed orders that primarily consisted of low-value retail goods and services from persons listed on OFAC’s List of Specially Designated Nationals and Blocked Persons who were blocked pursuant to sanctions regulations involving the Democratic Republic of Congo, Venezuela, Zimbabwe, among others. These apparent violations occurred “primarily because [the company’s] automated sanctions screening processes failed to fully analyze all transaction and customer data relevant to compliance with OFAC’s sanctions regulations,” OFAC stated, claiming the company also “failed to timely report several hundred transactions conducted pursuant to a general license issued by OFAC that included a mandatory reporting requirement, thereby nullifying that authorization with respect to those transactions.”
In arriving at the settlement amount, OFAC considered various mitigating factors, including that the apparent violations were non-egregious and (i) the company voluntarily disclosed the violations and cooperated with the investigation; and (ii) the company has undertaken significant remedial efforts to address the deficiencies and to minimize the risk of similar violations from occurring in the future.
OFAC also considered various aggravating factors, including that the company failed to exercise due caution or care to ensure its sanctions screening process was able to properly flag transactions involving blocked persons and sanctioned jurisdictions. “This case demonstrates the importance of implementing and maintaining effective, risk-based sanctions compliance controls,” OFAC stated. “[G]lobal companies that rely heavily on automated sanctions screening processes should take reasonable, risk-based steps to ensure that their processes are appropriately configured to screen relevant customer information and to capture data quality issues.”