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  • OCC releases recent enforcement actions, issues $12.5 million penalty for BSA/AML compliance deficiencies

    Federal Issues

    On June 15, the OCC released a list of recent enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with such entities. The new enforcement actions include cease and desist orders, civil money penalty orders, and removal/prohibition orders. The consent order described below was among those in the OCC’s list:

    On April 14, the OCC issued a consent order and $12.5 million civil money penalty order against a New York-branch of an international bank for alleged deficiencies in the branch’s BSA/AML compliance program.  The alleged deficiencies included the failure to file timely Suspicious Activity Reports (SARs) as well as deficiencies in the branch’s compliance with Office of Foreign Asset Control (OFAC) requirements. Among other things, the consent order requires the branch to (i) develop and implement an ongoing BSA/AML and OFAC risk assessment program; (ii) adopt an independent audit program to conduct a review of the bank’s BSA/AML compliance program; and (iii) ensure the branch has a permanent and experienced BSA officer. The bank has neither admitted nor denied the OCC’s findings. 

    Federal Issues OCC Enforcement Bank Secrecy Act Anti-Money Laundering SARs OFAC

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  • OFAC sanctions Russian entities and individuals for cyber activities connected to FSB

    Financial Crimes

    On June 11, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced its decision to sanction five Russian entities and three Russian individuals connected to Russia’s Federal Security Service (FSB), pursuant to Section 244 of the Countering America’s Adversaries Through Sanctions Act of 2017 (CAATSA) and Executive Order 13694. The sanctions target individuals and entities who, through “malign and destabilizing cyber activities,” have provided material and technological support to the FSB. Pursuant to OFAC’s sanctions, all property and interests in property of the designated persons within U.S. jurisdiction are blocked, and U.S. persons are “generally prohibited” from participating in transactions with these individuals and entities. As part of the announcement, Treasury Secretary Steven Mnuchin stated that “The United States is committed to aggressively targeting any entity or individual working at the direction of the FSB whose work threatens the United States and will continue to utilize our sanctions authorities, including those provided under CAATSA, to counter the constantly evolving threats emanating from Russia.”

    Visit here for additional InfoBytes coverage on Russian sanctions.

    Financial Crimes OFAC Russia Sanctions International CAATSA

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  • OFAC issues Ukraine-/Russia-related General Licenses to extend expiration dates

    Financial Crimes

    On June 4, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued Ukraine-/Russia-related General License 16 (GL 16) authorizing specified wind-down activities, which would be otherwise prohibited by Ukraine-Related Sanctions Regulations. Permissible activities with the two designated, previously sanctioned companies (and any entity in which either of the two companies has a 50 percent or greater ownership interest, directly or indirectly) apply to operations, contracts, and agreements that were effective prior to April 6. GL 16 extends the wind-down period, which was originally set to expire June 5 under General License 12C (GL 12C), until October 23. (See previous InfoBytes coverage on GL 12C here.)

    Earlier on May 31, OFAC issued Ukraine-/Russia-related General License 13B (GL 13B) to replace and supersede General License 13A (GL 13A) in its entirety, and to extend the expiration date through 12:01 a.m. EDT August 5. (See previous InfoBytes coverage on GL 13A, which was set to expire June 6, here.) GL 13B permits the same conduct as GL 13A, including authorizing certain divestiture transactions with specified blocked persons to a non-U.S. person, and allowing the facilitation of transfers of debt, equity, or other holdings involving listed blocked persons, including entities owned 50 percent or more and issued by the named persons.

    Visit here for additional InfoBytes coverage on Ukraine/Russian sanctions.

    Financial Crimes OFAC Ukraine Russia Department of Treasury International

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  • OFAC adds Iranians to Specially Designated Nationals List

    Financial Crimes

    On May 30, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) made additions to the Specially Designated Nationals List under the Iranian Financial Sanctions Regulations and Global Terrorism Sanctions Regulations. OFAC’s additions to the designations identify nine individuals and entities that were found to have (i) committed serious human rights abuses on behalf of the Government of Iran; (ii) operated technology that facilitates monitoring that could assist in serious human rights abuses by the Government of Iran; or (iii) engaged, or acting on behalf of someone engaged, in censorship activities limiting the freedom of expression or assembly of citizens in Iran. As a result, all assets belonging to the identified individuals and entities subject to U.S. jurisdiction are blocked and must be reported to OFAC, and U.S. persons are generally prohibited from engaging in transactions with them.

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

    Financial Crimes OFAC Department of Treasury International Iran Sanctions

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  • OFAC updates Ukraine-/Russia-related FAQs to address authorized wind-down activities permitted under certain general licenses

    Financial Crimes

    On May 25, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) published two additional FAQs to provide additional guidance on authorized wind-down activities outlined within General Licenses (GL) 12C, 14, and 15. (See previous InfoBytes coverage here concerning GL 14 and here for GL 12C and GL 15.) Specifically, the FAQs discuss conditions under which a U.S. person is authorized to receive scheduled principal and interest payments from identified blocked persons for a loan or bond in existence before the April 6 sanctions against Russian oligarchs or entities. The FAQs also address sanction implications for a foreign entity—that is itself not blocked—who pays dividends to a blocked person holding less than 50 percent equity interest.

    Visit here for additional InfoBytes coverage on Ukraine/Russian sanctions.

    Financial Crimes OFAC Sanctions Ukraine Russia International Department of Treasury

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  • OFAC issues new Ukraine-/Russia-related General Licenses authorizing additional wind-down activities

    Financial Crimes

    On May 22, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued Ukraine-/Russia-related General License 15 (GL 15) authorizing specified wind-down activities through October 23, which would be otherwise prohibited by Ukraine-Related Sanctions Regulations. Permissible activities with the designated company and its subsidiaries apply to operations, contracts, and agreements that were effective prior to April 6. OFAC further stated that, while funds blocked prior to May 22 remain blocked, GL 15 permits the use of these blocked funds for specified maintenance and wind-down activities.

    The same day, OFAC also issued Ukraine-/Russia-related General License 12C (GL 12C) to replace and supersede General License 12B (GL 12B) in its entirety. (See previous InfoBytes coverage on GL 12B here.) GL 12C, which incorporates exemptions permitted under GL 15, authorizes wind-down activities “originating and intermediary U.S. financial institutions to process funds transfers that they would otherwise block to an account held by a blocked U.S. person at a U.S. financial institution,” and allows the release of “such funds for authorized maintenance and wind-down purposes.” GL 12C is effective May 22.

    OFAC also released six new FAQs and published updated FAQs related to these general licenses.

    Visit here for additional InfoBytes coverage on Ukraine/Russian sanctions.

    Financial Crimes OFAC Department of Treasury Ukraine Russia Sanctions International

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  • President Trump issues new Executive Order prohibiting the purchase of debt from the Venezuelan government

    Financial Crimes

    On May 21, President Trump issued an Executive Order (E.O.) prohibiting U.S. companies or individuals from buying debt or accounts receivable from the Venezuelan government “in light of the recent activities of the Maduro regime, including endemic economic mismanagement and public corruption at the expense of the Venezuelan people and their prosperity.” The sanctions specifically prohibit transactions related to the following: (i) “the purchase of debt owed to the Venezualan government, including accounts receivable;” (ii) debt pledged as collateral after May 21, including accounts receivable; and (iii) “the sale, transfer, assignment, or pledging as collateral by the Government of Venezuela of any equity interest in any entity in which the Government of Venezuela has a 50 percent or greater ownership interest.”

    The E.O., issued in conjunction with E.O. 13692, follows two prior E.O.s, which also targeted the Maduro regime—E.O. 13827, which prohibits U.S. persons from engaging in transactions that involve digital currency issued by, for, or on behalf of the Venezuelan government, and E.O. 13808, which prohibits transactions related to new debt, bonds, and dividend payments in conjunction with the Venezuelan government and the state-owned oil company. (See previous InfoBytes coverage here and here.). The E.O. took effect on May 21 at 12:30 p.m. EDT.

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

    Financial Crimes OFAC Department of Treasury Executive Order Trump Venezuela Sanctions International Cryptocurrency

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  • OFAC further expands Iranian sanctions, includes Hizballah-associated individuals

    Financial Crimes

    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.

    Financial Crimes OFAC Sanctions Department of Treasury Iran International

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  • OFAC adds additional Venezuelan government officials to Specially Designated Nationals List

    Financial Crimes

    On May 18, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) made additions to the Specially Designated Nationals List pursuant to Executive Order 13692. OFAC’s additions to the list include four current or former Venezuelan government officials identified as persons who have “exploit[ed] their official positions to engage in narcotics trafficking, money laundering, embezzlement of state funds, and other corrupt activities.” OFAC additionally blocked three companies and 14 properties located in Florida and New York owned by one of the recently added officials. As a result, all assets belonging to the identified individuals and entities subject to U.S. jurisdiction are blocked and must be reported to OFAC, and U.S. persons are generally prohibited from dealing with them.

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

    Financial Crimes OFAC Sanctions Venezuela Department of Treasury International

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  • OFAC sanctions Iranian bank officials, Iraqi bank, and others for moving millions of dollars to Hizballah

    Financial Crimes

    On May 15, U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced it was imposing sanctions on the governor and a senior official of the Central Bank of Iran, an Iraqi bank and its chairman, and a key Hizballah official, for allegedly funneling millions of dollars on behalf of the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) to Hizballah. Pursuant to Executive Order 13224, which “provides a means by which to disrupt the financial support network for terrorists and terrorist organizations by authorizing the U.S. government to designate and block the assets of foreign individuals and entities that commit, or pose a significant risk of committing, acts of terrorism,” the individuals and entities were designated as Specially Designated Global Terrorists. The actions, which follow a May 10 action taken against individuals and entities who materially assisted in the conversion of millions of U.S. dollars to fund IRGC-QF’s malignant activities, “seek to stifle Iran’s ability to abuse the U.S. and regional financial systems.”

    However, OFAC clarified that sanctions on the officials of the Central Bank of Iran do not extend to the bank itself. Following President Trump's decision to cease participation by the U.S. government in the Joint Comprehensive Plan of Action, sanctions on the bank will be re-imposed August 7, and on November 5, additional sanctions will be re-imposed on persons knowingly engaging in certain significant transactions with the Central Bank of Iran.

    Visit here for additional InfoBytes coverage on Iranian sanctions.

    Financial Crimes OFAC Department of Treasury Sanctions Iran Iraq International

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