Skip to main content
Menu Icon Menu Icon
Close

InfoBytes Blog

Financial Services Law Insights and Observations

Filter

Subscribe to our InfoBytes Blog weekly newsletter and other publications for news affecting the financial services industry.

  • OFAC updates SDN List

    Financial Crimes

    On February 22, the U.S. Treasury Department’s Office of Foreign Assets Control added two entities to its Specially Designated National List pursuant to the Countering America’s Adversaries Through Sanctions Act (CAATSA). One of the added entities has been designated pursuant to CAATSA Section 235, which provides the president with the authority to, among other things, “prohibit any transfers of credit or payments between financial institutions or by, through, or to any financial institution, to the extent that such transfers or payments are subject to the jurisdiction of the United States and involve any interest of the sanctioned person” or “prohibit any United States person from investing in or purchasing significant amounts of equity or debt instruments of the sanctioned person.”

    Financial Crimes OFAC Department of Treasury SDN List Sanctions Of Interest to Non-US Persons OFAC Designations Russia

    Share page with AddThis
  • OFAC sanctions additional individuals connected to Burmese military coup

    Financial Crimes

    On February 22, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 14014 against two individuals connected to a Burmese military coup. The sanctions build upon actions taken by OFAC earlier in the month against 10 current or former military officials as well as three Burmese entities (covered by InfoBytes here), and reaffirms the U.S.’s continued work to “promote accountability for those responsible for attempting to reverse Burma’s progress toward democracy.” As a result of the sanctions all property and interests in property belonging to the sanctioned individuals and “any entities that are owned, directly or indirectly, 50 percent or more by them, individually, or with other blocked persons,” subject to U.S. jurisdiction are blocked and must be reported to OFAC. U.S. persons are generally prohibited from engaging in any dealings involving the property or interests in property of blocked or designated persons, unless exempt or authorized by a general or specific license.

    Financial Crimes OFAC Department of Treasury Sanctions SDN List Of Interest to Non-US Persons OFAC Designations Burma

    Share page with AddThis
  • Payment processing solutions company settles multiple sanctions violations with OFAC for $500k

    Financial Crimes

    On February 18, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a $507,375 settlement with a Georgia-based payment processing solutions company for 2,102 apparent violations of multiple sanctions programs. According to OFAC’s web notice, between 2013 and 2018, the company—which offers solutions for merchants to accept digital currency as payment for goods and services—allegedly processed thousands of transactions on behalf of individuals located in sanctioned jurisdictions based on IP addresses and invoice information. Specifically, OFAC alleged that the company “received digital currency payments on behalf of its merchant customers from those merchants’ buyers who were located in sanctioned jurisdictions, converted the digital currency to fiat currency, and then related that currency to its merchants.” While OFAC noted that the company screened its direct merchants against its List of Specially Designated Nationals and Blocked Persons and conducted due diligence to ensure merchants were not located in a sanctioned jurisdiction, the company’s transaction review process allegedly failed to screen identification and location data for its merchants’ buyers, many of whom were located in Crimea, Cuba, North Korea, Iran, Sudan, and Syria. As a result, these buyers, OFAC claimed, were able to make purchases from merchants located in the U.S. and elsewhere using digital currency on the company’s platform in violation of an executive order and multiple sanctions regulations.

    In arriving at the settlement amount, OFAC considered various aggravating factors, including that the company (i) “failed to exercise due caution or care for its sanctions compliance obligations” by allowing buyers in sanctioned jurisdictions to transact with merchants despite having “sufficient information to screen those customers”; and (ii) conveyed more than $128,000 in economic benefit to individuals in OFAC sanctioned jurisdictions.

    OFAC also considered various mitigating factors, including that the company (i) had implemented certain sanctions compliance controls, including due diligence and sanctions screening; (ii) trained employees—including senior management—that signing up merchants from sanctioned jurisdictions or trading with sanctioned persons is prohibited; (iii) cooperated with OFAC’s investigation; and (iv) terminated the conduct leading to the apparent violations and undertook remedial measures to minimize the risk of similar violations from occurring in the future. The base civil monetary penalty applicable in this action is $2,255,000; however, the lower settlement amount reflects OFAC’s consideration of the general factors under the Economic Sanctions Enforcement Guidelines.

    Financial Crimes OFAC Department of Treasury Cryptocurrency Sanctions Of Interest to Non-US Persons OFAC Designations Enforcement Settlement

    Share page with AddThis
  • OFAC revokes Yemen-related general licenses and designations

    Financial Crimes

    On February 16, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) revoked and archived five counter terrorism-related general licenses (GL) related to the Ansarallah designations after the U.S. Department of State determined that Ansarallah would “no longer be[] blocked pursuant to the Global Terrorism Sanctions Regulations, 31 C.F.R. part 594, the Foreign Terrorist Organizations Sanctions Regulations, 31 C.F.R. part 597, or Executive Order 13224, as amended.” Specifically, OFAC revoked GL 9, “Official Business of the United States Government,” GL 10, “Official Activities of Certain International Organizations,” GL 11, “Certain Transactions in Support of Nongovernmental Organizations’ Activities in Yemen,” GL 12, “Transactions Related to the Exportation or Reexportation of Agricultural Commodities, Medicine, Medical Devices, Replacement Parts and Components or Software Updates,” and GL 13,“Authorizing Transactions Involving Ansarallah.” Additionally, OFAC removed frequently asked questions 875, 876, and 877 from its website and made deletions to the Specially Designated Nationals and Blocked Persons list.

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

    Share page with AddThis
  • OFAC sanctions individuals and entities connected to Burmese military coup under new executive order

    Financial Crimes

    On February 11, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against 10 current and former military officials and three entities connected to a Burmese military coup. The sanctions—which “specifically target those who played a leading role in the overthrow of Burma’s democratically elected government”—were announced in coordination with President Biden’s issuance of a new Executive Order (E.O.), “Blocking Property With Respect To The Situation In Burma.” As a result of the sanctions all property and interests in property belonging to the sanctioned individuals and entities, and “any entities that are owned, directly or indirectly, 50 percent or more by them,” subject to U.S. jurisdiction are blocked and must be reported to OFAC. U.S. persons are generally prohibited from engaging in any dealings involving the property or interests in property of blocked or designated persons, unless exempt or authorized by a general or specific license.

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

    Share page with AddThis
  • OFAC amends Venezuela-related general license

    Financial Crimes

    On February 2, the U.S. Treasury Department’s Office of Foreign Assets Control issued Venezuela-related General License (GL) 30A, which authorizes certain necessary to port and airport operations that would otherwise be prohibited by Executive Order (E.O.) 13884, as incorporated into the Venezuela Sanctions Regulations. (See previous InfoBytes coverage here.) Effective February 2, G.L. 30A replaces G.L. 30, which was issued in August of 2019.

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

    Share page with AddThis
  • OFAC amends communist Chinese military companies general license and related FAQs

    Financial Crimes

    On January 27, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued General License (GL) 1A, “Authorizing Transactions Involving Securities of Certain Communist Chinese Military Companies,” which supersedes and replaces GL 1 (covered by InfoBytes here). GL 1A permits transactions and activities otherwise prohibited by Executive Order (E.O.) 13959 involving “publicly traded securities, or any securities that are derivative of, or are designed to provide investment exposure to such securities, of any entity whose name closely matches, but does not exactly match, the name of a Communist Chinese Military Companies List as defined by section 4(a) of E.O. 13959, as amended.” OFAC also published related frequently asked questions 878 and 879, the latter of which clarifies that GL 1A does not authorize transactions with subsidiaries of companies on the Communist Chinese Military Companies List.

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

    Share page with AddThis
  • OFAC issues counter terrorism general license

    Financial Crimes

    On January 25, the U.S. Treasury Department’s Office of Foreign Assets Control issued General License (GL) 13, “Authorizing Transactions Involving Ansarallah,” and a related amended frequently asked question. GL 13 authorizes certain transactions and activities ordinarily prohibited by the Global Terrorism Sanctions Regulations, the Foreign Terrorist Organizations Sanctions Regulations, or Executive Order 13224, through February 26. GL 13 does not, however, authorize the unblocking of any funds in accounts of Ansarallah that were blocked as of January 25. Additionally, FAQ 876 clarifies that non-U.S. persons “may engage in or facilitate transactions involving Ansarallah, or any entity in which Ansarallah owns, directly or indirectly, a 50 percent or greater interest, without exposure to sanctions under E.O. 13224, as amended, if such activity would be authorized under General Licenses (GLs) 9, 10, 11, 12, and 13 if engaged in by a U.S. person” (The issuance of the referenced licenses by OFAC is covered by InfoBytes here).

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

    Share page with AddThis
  • OFAC targets Venezuelan oil sector sanctions evasion network

    Financial Crimes

    On January 19, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13850 against three individuals, fourteen entities, and six vessels for allegedly engaging in activities tied to a Mexico-based network involved in the illicit sale of hundreds of millions of dollars of Venezuelan oil. The action builds on OFAC’s June 2020 sanctions against three individuals and eight foreign entities for allegedly engaging in activities in or associated with a network attempting to evade U.S. sanctions on Venezuela’s oil sector in order to benefit “the illegitimate Maduro regime” and Venezuela’s state-owned oil company, Petroleos de Venezuela, S.A. (covered by InfoBytes here). As a result, all property and interests in property belonging to the identified individuals and entities subject to U.S. jurisdiction are blocked, and “any entities that are owned, directly or indirectly, 50 percent or more by the designated entities, are also blocked.” U.S. persons are generally prohibited from dealing with any property or interests in property of blocked or designated persons.

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

    Share page with AddThis
  • OFAC issues counter terrorism general licenses and related FAQs, updates SDN List

    Financial Crimes

    On January 19, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued four General Licenses in conjunction with State Department designations against a foreign terrorist organization: General License 9, “Official Business of the United States Government,” General License 10, “Official Activities of Certain International Organizations,” General License 11, “Certain Transactions in Support of Nongovernmental Organizations’ Activities in Yemen,” and General License 12, “Transactions Related to the Exportation or Reexportation of Agricultural Commodities, Medicine, Medical Devices, Replacement Parts and Components or Software Updates.” The general licenses authorize certain transactions ordinarily prohibited by the Global Terrorism Sanctions Regulations, Foreign Terrorist Organizations Sanctions Regulations, and Executive Order 13224, including actions “to help facilitate the uninterrupted flow of humanitarian assistance, including COVID-19-related assistance, and certain other critical commodities to the people of Yemen that would otherwise be prohibited pursuant to authorities administered by OFAC.” OFAC also published related FAQs 875, 876, and 877.

    OFAC also updated its Specially Designated Nationals and Blocked Persons List to add individuals and entities associated with Venezuela, Russia, and Yemen designations.

    Financial Crimes OFAC Department of Treasury Yemen Russia Venezuela Sanctions Of Interest to Non-US Persons OFAC Designations

    Share page with AddThis

Pages