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  • OFAC identifies non-U.S. financial institutions on new list of banks facing correspondent account sanctions

    Financial Crimes

    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.

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

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  • OFAC issues continued extension of Venezuela-related General Licenses

    Financial Crimes

    On March 8, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) amended two General Licenses (GL) to extend the expiration date of previous Venezuela-based GLs to May 10 for certain provisions related to sanctions issued against Venezuela’s state-owned oil company pursuant to Executive Order 13850. GL 3D, which supersedes GL 3C, authorizes transactions necessary to wind down financial contracts, and transactions related to, provision of financing for, and other dealings in certain bonds, provided the divestment or transfer (including the facilitation) of any holdings of these bonds are to a non-U.S. person. GL 9C, which supersedes GL 9B, authorizes certain transactions related to securities issued prior to August 25, 2017 by the oil company and its subsidiaries. Additionally, OFAC issued correspondingly revised FAQs 661 and 662 to provide additional clarification on expected levels of due diligence, as well as implications for U.S. and non-U.S. persons.

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

    Financial Crimes Venezuela Sanctions

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  • FinCEN updates list of FATF-identified jurisdictions with AML/CFT deficiencies

    Financial Crimes

    On March 8, the Financial Crimes Enforcement Network (FinCEN) issued an advisory reminding financial institutions that on February 22, the Financial Action Task Force (FATF) updated two documents that list jurisdictions identified as having “strategic deficiencies” in their anti-money laundering and combating the financing of terrorism (AML/CFT) regimes. The first document, the FATF Public Statement, identifies two jurisdictions, the Democratic People’s Republic of Korea and Iran, that are subject to countermeasures and/or enhanced due diligence due to their strategic AML/CFT deficiencies. The second document, Improving Global AML/CFT Compliance: On-going Process, identifies the following jurisdictions with strategic AML/CFT deficiencies that have developed an action plan with the FATF to address those deficiencies: the Bahamas, Botswana, Cambodia, Ethiopia, Ghana, Pakistan, Serbia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, and Yemen. Notably, Cambodia has been added to the list due to the lack of effective implementation of its AML/CFT framework. FATF further notes that several jurisdictions have not yet been reviewed, and that it “continues to identify additional jurisdictions, on an ongoing basis, that pose a risk to the international financial system.” Generally, financial institutions should consider both the FATF Public Statement and the Improving Global AML/CFT Compliance: On-going Process documents when reviewing due diligence obligations and risk-based policies, procedures, and practices.

    Financial Crimes FinCEN FATF Anti-Money Laundering Combating the Financing of Terrorism Of Interest to Non-US Persons

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  • OFAC sanctions Russian bank for providing assistance to Venezuelan oil company

    Financial Crimes

    On March 11, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against a Moscow-based bank for materially assisting Venezuela’s state-owned oil company, which was sanctioned earlier this year by OFAC pursuant to Executive Order 13850. (See previous InfoBytes coverage here.) The bank, which is jointly owned by Russian and Venezuelan state-owned companies, “materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of,” the previously sanctioned entity. According to OFAC, the bank was also identified as “the primary international financial institution willing to finance” the Venezuelan cryptocurrency, Petro, which was allegedly created to help former President Maduro’s regime circumvent U.S. sanctions. As a result, any assets or interests therein belonging to the bank, as well as any entities directly or indirectly owned 50 percent or more by the bank that are subject to U.S. jurisdiction are blocked and must be reported to OFAC. U.S. persons are also prohibited generally from dealing with any such property or interests.

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

    Financial Crimes Venezuela Sanctions OFAC Department of Treasury

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  • Danish company pays approximately $33 million to resolve bribery allegations

    Financial Crimes

    A Danish company that makes protective coatings used in maritime environments announced on March 4 that it had settled bribery allegations with the Danish State Prosecutor for Serious and International Crime by paying a $33 million fine. The company self-reported what it called “illegal sales practices found in Germany, other countries in Europe, and in Asia” in April 2017.

    Financial Crimes Bribery

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  • CFTC adds self-reporting of foreign corrupt practices by non-registrants to cooperation program

    Financial Crimes

    On March 6, the CFTC issued an enforcement advisory announcing that it would add violations of the Commodity Exchange Act involving foreign corrupt practices to its cooperation and self-reporting program. The CFTC will recommend no civil monetary penalty where companies and individuals which are not registered (or required to be registered) with the CFTC timely and voluntarily disclose such violations. Full cooperation and appropriate remediation would also be required. In announcing the enforcement advisory, the CFTC’s Director of Enforcement stated at the ABA’s National Institute on White Collar Crime that the change “reflects the enhanced cooperation between the CFTC and our law enforcement partners like the Department of Justice.” He also stated that the agency currently has open investigations into various foreign corrupt practices that violate the Commodity Exchange Act, including bribes that “secure business in connection with regulated activities,” manipulation of benchmarks, “prices that are the product of corruption [being] falsely reported to benchmarks,” and corrupt practices altering the commodity markets.

    Financial Crimes CFTC DOJ Commodity Exchange Act White Collar Of Interest to Non-US Persons

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  • Foreign financial institutions warned: Will face sanctions for Maduro regime transactions

    Financial Crimes

    On March 6, National Security Advisor Ambassador John Bolton issued a statement warning foreign financial institutions that they will face sanctions if it is determined they have been involved in facilitating illegitimate transactions benefiting former President Maduro’s regime.

    See here for continuing InfoBytes coverage of actions related to Venezuela.

    Financial Crimes Of Interest to Non-US Persons Venezuela Sanctions

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  • OFAC issues continued extension of Ukraine-related General Licenses

    Financial Crimes

    On March 6, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced the issuance of Ukraine-related General Licenses (GL) 13K and 15E, which extend the expiration date of previous Ukraine-based GLs to July 6, 2019 for wind-down transactions for certain companies that otherwise would be prohibited by Ukraine-Related Sanctions Regulations.

    GL 13K supersedes GL 13J and authorizes, among other things, activities and transactions “ordinarily incident and necessary” for (i) the divestiture of the holdings of specified blocked persons to a non-U.S. person; and (ii) the facilitation of transfers of debt, equity, or other holdings involving specified blocked persons to a non-U.S. person. GL 15E, which supersedes GL 15D, relates to permissible activities with the designated company and its subsidiaries, and applies to the maintenance and wind-down of operations, contracts, and agreements that were effective prior to April 6, 2018.

    Visit here for additional InfoBytes coverage on Ukraine sanctions.

    Financial Crimes Department of Treasury OFAC Ukraine Sanctions

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  • OFAC sanctions Venezuelan security officials connected to Maduro regime

    Financial Crimes

    On March 1, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against six Venezuelan security officials connected to former President Maduro’s “illegitimate regime.” According to OFAC, the sanctions, taken pursuant to Executive Order 13692, designate the individuals in response to actions taken by groups under their control that have obstructed the delivery of humanitarian aid. As a result, any assets or interests therein belonging to the identified individuals, as well as any entities directly or indirectly owned 50 percent or more by such individuals that are subject to U.S. jurisdiction are blocked and must be reported to OFAC. U.S. persons are also prohibited generally from dealing with any such property or interests. OFAC also refers financial institutions to Financial Crimes Enforcement Network advisories FIN-2017-A006 and FIN-2017-A003 for further information concerning the use of the U.S. financial system and real estate market by Venezuelan government agencies and individuals to launder corrupt proceeds.

    See here for continuing InfoBytes coverage of actions related to Venezuela.

    Financial Crimes OFAC Department of Treasury Venezuela Sanctions

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  • CFPB studies elder financial abuse reported in SARs

    Federal Issues

    On February 27, the CFPB’s Office of Financial Protection for Older Americans released Suspicious Activity Reports on Elder Financial Exploitation: Issues and Trends, which discusses key facts and trends revealed after the Bureau analyzed 180,000 elder exploitation Suspicious Activity Reports (SARs) filed with Financial Crimes Enforcement Network from 2013 to 2017. Key highlights from the report include:

    • SARs filings on elder financial abuse quadrupled from 2013 to 2017, with 63,500 SARs reporting the abuse in 2017.
    • Nearly 80 percent of the SAR filings involved a financial loss to an elder or to the filing institution. The average amount of loss to an elder was $34,200, while the average amount of loss to a filer was $16,700.
    • Financial losses were greater when the elder knew the suspect, with an average loss of $50,000 when the elder knew the suspect compared to $17,000 with a stranger.
    • More than half of the SARs involved a money transfer.
    • Less than one-third of elder abuse SARs acknowledge that the financial institution reported the activity to a local, state, or federal authority.

    Federal Issues CFPB Elder Financial Exploitation SARs FinCEN Financial Crimes

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