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  • OFAC sanctions corruption network linked to Venezuela’s food subsidy program; DOJ charges two of same individuals for money laundering related to bribery

    Financial Crimes

    On July 25, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against two Colombian nationals responsible for “orchestrating a vast corruption network,” which has enabled former President Maduro and his regime “to significantly profit from food imports and distribution in Venezuela.” According to OFAC, the Colombian nationals created a network comprised of shell companies, business partners, and family members—all of whom have also been designated for their involvement in the network—that illicitly profited from their involvement in Venezuela’s food subsidy program as well as other contracts with the Venezuelan government. The sanctioned network—which also included Maduro’s three stepsons—allegedly “laundered hundreds of millions of dollars in corruption proceeds around the world.” As a result of the sanctions, “all property and interests in property of the individuals and entities designated today, and of any entities that are owned, directly or indirectly, 50 percent or more by those individuals or entities, that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC.” OFAC noted that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated entities and individuals. OFAC also referred financial institutions to Financial Crimes Enforcement Network advisories FIN-2019-A002FIN-2017-A006, and FIN-2018-A003 for further information concerning the efforts of Venezuelan government agencies and individuals to use the U.S. financial system and real estate market to launder corrupt proceeds, as well as human rights abuses connected to corrupt foreign political figures and their financial facilitators.

    The same day, the DOJ announced charges, pursuant to an indictment filed in the U.S. District Court for the Southern District of Florida, against two of the same sanctioned Colombian nationals for money laundering and conspiracy to commit money laundering. The charges relate to the Colombian nationals’ alleged roles in laundering the proceeds of an illegal bribery scheme from bank accounts located in Venezuela to and through bank accounts located in the United States. The bribery scheme resulted in the transfer of approximately $350 million, and allegedly involved contracts to build low-income housing units and efforts to take advantage of Venezuela’s government-controlled exchange rates through the use of “false and fraudulent import documents for goods and materials.”

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

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  • OFAC designates North Korean operative working in Vietnam

    Financial Crimes

    On July 29, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced the addition of a North Korean individual operating in Vietnam to the Specially Designated Nationals List pursuant to Executive Order 13687. According to OFAC, the individual works on behalf of the Munitions Industry Department (MID), a Workers’ Party of Korea subordinate, and was responsible for trade activity that earned currency for the North Korean regime, which violates the United Nations Security Council resolutions (UNSCRs) and supports North Korea’s weapons program. OFAC notes that its regulations “generally prohibit all dealings by U.S. persons or within the United States that involve” transactions with the designated entities and individuals. Moreover, OFAC warned foreign financial institutions that if they knowingly facilitate significant transactions for any of the designated entities or individuals, they may be subject to U.S. correspondent account or payable-through account sanctions which, if imposed, could restrict their access to the U.S. financial system.

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

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  • OFAC extends Venezuela-related general license

    Financial Crimes

    On July 26, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced General License (GL) 8B, titled “Authorizing Transactions Involving Petroleos de Venezuela, S.A. (PdVSA) Necessary for Maintenance of Operations for Certain Entities in Venezuela,” which supersedes GL 8A to extend the expiration date through October 25.

    Visit here for additional InfoBytes coverage of actions related to Venezuela.

    Financial Crimes Of Interest to Non-US Persons OFAC Venezuela Sanctions

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  • Agencies complete living will evaluations, extend next filing deadline

    Federal Issues

    On July 26, the FDIC and the Federal Reserve Board announced several resolution plan actions, including completing their evaluations of the 2018 resolution plans for 82 foreign banks and 15 domestic banks. Additionally, the agencies extended the deadline for the next resolution plans (known as living wills) from those firms until July 1, 2021. The agencies note that the deadline extension is to help mitigate the uncertainty around the filing requirements during the pendency of the agencies’ April proposal, which considers three changes: (i) creating tiered planning requirements for living wills based on an institution’s size, complexity, and other factors; (ii) revising the frequency and required content of resolution plan submissions, including eliminating living will submission requirements for certain smaller and less complex institutions; and (iii) improving communication between the FDIC and banks on resolution planning. (Previously covered by InfoBytes here.)

    The agencies’ evaluations did not identify shortcomings or deficiencies in the 2018 resolution plans of the 82 foreign banks and are requesting additional information in the next resolution plans from seven firms.

    Federal Issues Agency Rule-Making & Guidance FDIC Federal Reserve Living Wills Of Interest to Non-US Persons

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  • OFAC amends several sanctions regulations

    Financial Crimes

    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.

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

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  • OFAC sanctions international network involved in procuring materials for Iranian nuclear program

    Financial Crimes

    On July 18, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13382 against an international network of seven entities and five individuals involved in the procurement of sensitive materials for sanctioned elements of Iran’s nuclear program. According to OFAC, the network—based in Iran, China, and Belgium—acted as a procurement network in order to acquire materials controlled by the Nuclear Suppliers Group (NSG), which were then used in facilities belonging to the Atomic Energy Organization of Iran. OFAC noted that while United Nations Security Council Resolution 2231 does permit certain NSG-controlled items to go to Iran, participants are required to receive advance, case-by-case approval, which the identified entities and individuals in this action did not receive. As a result of the sanctions, “all property and interests in property of these 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 notes that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated entities and individuals. Moreover, OFAC warned foreign financial institutions that if they knowingly facilitate significant transactions for any of the designated entities and individuals, they may be subject to U.S. correspondent account or payable-through account sanctions which, if imposed, could restrict their access to the U.S. financial system.

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

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  • OFAC sanctions four Venezuelan DGCIM officials

    Financial Crimes

    On July 19, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned four officials of Venezuela’s General Directorate of Military Counterintelligence (DGCIM). As previously covered by InfoBytes, the DGCIM was sanctioned by OFAC on July 11, pursuant to Executive Order (E.O.) 13850, for operating in the country’s defense and security sector. According to OFAC, the designations of the four individuals were pursuant to E.O. 13692, following the arrest, physical abuse, and death of a Venezuelan Navy Captain. As a result of the designations, all property and interests in property of the designated persons within U.S. jurisdiction must be blocked and reported to OFAC. OFAC notes that its regulations “generally prohibit” U.S. persons from participating in transactions with these individuals and entities.

    Financial Crimes Department of Treasury Of Interest to Non-US Persons OFAC Executive Order Sanctions Venezuela

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  • OFAC sanctions four individuals for human rights violations in Iraq

    Financial Crimes

    On July 18, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13818 against two militia figures and two former Iraqi governors for alleged human rights abuses or corruption violations of the Global Magnitsky Human Rights Accountability Act. According to OFAC, the four individuals committed the corruption-and abuse-related actions “in areas where persecuted religious communities are struggling to recover from the horrors inflicted on them by ISIS.” As a result of the sanctions, all property and interests in property of the designated persons within U.S. jurisdiction must be blocked and reported to OFAC. OFAC notes that its regulations “generally prohibit” U.S. persons from participating in transactions with these individuals and entities.

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

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  • OFAC sanctions senior member of Hizballah operation

    Financial Crimes

    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.”

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

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  • Hungarian subsidiary of multinational technology company settles FCPA claims

    Financial Crimes

    On July 22, the DOJ announced an $8.7 million settlement with the Hungarian subsidiary of an American multinational technology company to resolve allegations of bid-rigging and bribery in violation of the FCPA. The SEC simultaneously announced a related resolution with the parent technology company over the operations of subsidiaries in four countries, with the parent company paying an additional $16.5 million.

    According to the DOJ announcement, between 2013 and 2015, executives and employees of the Hungarian subsidiary falsely represented to the parent company that discounts were necessary to finalize deals with resellers to sell company licenses to government customers; however, the savings were allegedly used for “corrupt purposes” in violation of the FCPA. The subsidiary entered into a non-prosecution agreement with DOJ, which noted that while the subsidiary did not voluntarily self-disclose the misconduct, it received credit for the company’s “substantial cooperation with the Department’s investigation and for taking extensive remedial measures.” Specifically, the subsidiary terminated four licensing partners and the company implemented an enhanced compliance system and internal controls to address corruption risks.

    Financial Crimes FCPA DOJ SEC Of Interest to Non-US Persons

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