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  • Regulators create Global Financial Innovation Network

    Fintech

    On August 7, the United Kingdom’s Financial Conduct Authority (FCA) announced the creation of the Global Financial Innovation Network (GFIN) in collaboration with 11 global financial regulators, including the CFPB. As set forth in the GFIN Consultation Document, the three major functions of the initiative are: (i) information sharing among regulators on topics including emerging technologies and business models; (ii) providing a forum for joint policy work; and (iii) instituting “cross-border trials” to create a testing environment for companies as they deal with global regulatory challenges. GFIN’s intention is to serve as an efficient way for innovative fintech firms to interact with regulators and promote transparency, and plans to explore the concept of a “global sandbox” to create opportunities for these firms to test new financial services and products such as artificial intelligence, distributed ledger technology, and initial coin offerings in multiple jurisdictions.

    In a press release issued the same day, the Bureau noted that the decision to join the group is a demonstration of its “commitment to promoting innovation by coordinating with state, federal and international regulators.” Acting Director Mick Mulvaney further commented, “We look forward to working closely with other regulatory authorities—whether in the United States or abroad—to facilitate innovation and promote regulatory best practices in consumer financial services.”

    The working group seeks multi-jurisdictional comments on the Consultation Document to assess feedback on its proposed mission, function, and priorities. U.S. persons can submit comments through the Bureau’s Office of Innovation or through the FCA and other regulators. Comments must be received by October 14.

    Fintech Financial Conduct Authority CFPB Regulatory Sandbox International

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  • OFAC issues Ukraine-/Russia-related General License to extend expiration date

    Financial Crimes

    On July 31, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced that it was issuing Ukraine-/Russia-related General License 13C (GL 13C) to replace and supersede General License 13B (GL 13B) in its entirety, and to extend the expiration date through October 23, 2018. (See previous InfoBytes coverage on GL 13B, which was set to expire August 5, here.) GL 13C, which permits the same conduct as GL 13B, authorizes activities that would otherwise be prohibited by the Ukraine-Related Sanctions Regulations. Permissible activities include 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. In accordance with the issuance of GL 13C, OFAC issued updates to relevant FAQs.

    Financial Crimes Department of Treasury OFAC Russia Sanctions International

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  • OFAC, France announce coordinated action against global procurement network supporting Syria’s chemical weapons program

    Financial Crimes

    On July 25, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) added five entities and eight individuals to OFAC’s Specially Designated Nationals and Blocked Persons List for their ties to a procurement network providing support to Syria’s chemical weapons program. OFAC acted in coordination with the French government and pursuant to Executive Order 13382, which targets proliferators of weapons of mass destruction and their supporters. As a result, all assets belonging to the identified individuals and entities subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from entering into transactions with them.

    Visit here for continuing InfoBytes coverage on Syrian sanctions.

    Financial Crimes OFAC Department of Treasury Syria International Sanctions

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  • OFAC issues Venezuela General License, updates FAQs

    Financial Crimes

    On July 19, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued Venezuela General License 5 (GL 5) to allow U.S. persons to engage in transactions related to the financing for, and other dealings in the Petroleos de Venezuela SA 2020 8.5 Percent Bond that would otherwise by prohibited by Executive Order 13835 (E.O. 13835). (See previous InfoBytes coverage here.) OFAC also published two additional FAQs to provide additional guidance on the reasons for the issuance of GL 5 as well as answers to whether E.O. 13835 prohibits U.S. persons having a legal judgment against the Government of Venezuela from attaching and executing against Venezuelan government assets, including vessels, properties, or financial assets.

    Visit here for additional InfoBytes coverage on Venezuela sanctions.

    Financial Crimes OFAC Department of Treasury Venezuela International

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  • FinCEN director comments on cooperative efforts to freeze assets belonging to transnational criminal organization

    Financial Crimes

    On July 14, FinCEN Director Kenneth A. Blanco issued a statement regarding recent actions taken by Argentina’s Unidad de Informaciὀn Financiera de la República Argentina (UIF-AR) to freeze assets belonging to Clan Bakarat, a transnational criminal organization with ties to Hezbollah leadership. According to Director Blanco, FinCEN’s cooperative efforts with UIF-AR led to the action against Clan Barakat, which is currently listed with the Treasury Department’s Office of Foreign Assets Control as a Specially Designated Global Terrorist for its suspected involvement with money laundering and terrorist financing among other things.

    Financial Crimes FinCEN International OFAC Department of Treasury Anti-Money Laundering

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  • OFAC revokes JCPOA-related General Licenses

    Financial Crimes

    On June 27, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued an announcement revoking Iran-related General Licenses H and I (GL-H and GL-I) following President Trump’s May 8 withdrawal from the Joint Comprehensive Plan of Action. In conjunction with these changes, OFAC amended the Iranian Transactions and Sanctions Regulations to authorize certain wind-down activities through August 6 (GL-I) and November 4 (GL-H) related to, among other things, letters of credit and brokering services. In addition OFAC released updated FAQs related to the May 8 re-imposition of nuclear-related sanctions.

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

    Financial Crimes OFAC Iran Sanctions International

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  • FinCEN issues advisory on connection between politically exposed persons and financial facilitators

    Financial Crimes

    On June 12, the Financial Crimes Enforcement Network (FinCEN) issued an advisory to U.S. financial institutions to increase awareness of the connection between high-level political corruption and human rights abuses. The advisory highlights the use of financial facilitators as a means to gain access to global financial systems for the purpose of moving or hiding illicit proceeds and evading U.S. and global sanctions. Among other things, the advisory, which is designed to assist financial institutions in identifying and reporting suspicious activity, provides typologies used by “politically exposed persons” (PEPs) to access the U.S. financial system and obscure illicit activity. FinCEN also provides several red flags outlining various types of suspected schemes that may be indicators of suspicious activity. The advisory’s regulatory guidance further reminds financial institutions of their risk-based, due diligence obligations, which include (i) identifying legal entities owned or controlled by PEPs (as required by FinCEN’s Customer Due Diligence Rule); (ii) complying with anti-money laundering program obligations; and (iii) filing Suspicious Activity Reports related to illegal activity undertaken by senior foreign political figures.

    Financial Crimes FinCEN Sanctions International Anti-Money Laundering SARs

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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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