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FinCEN’s interactive SAR stats now include 2021 data
On March 28, FinCEN announced that its Interactive SAR Stats webpage now includes Filing Trend Data by industry updated through December 31, 2021. As previously covered by InfoBytes, SAR Stats—formerly called By the Numbers—is an annual compilation of numerical data gathered from the Suspicious Activity Reports (SARs) filed by financial institutions using FinCEN’s new unified SAR form and e-filing process. Interactive SAR Stats provide users the opportunity to find FinCEN’s trend data for aggregated counts of defined suspicious activities that financial institutions file with FinCEN as required by the Bank Secrecy Act.
OFAC sanctions individuals for raising funds supporting Nigerian terrorist group
On March 25, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13224, as amended, against six individuals connected to the Nigerian terrorist group Boko Haram. According to OFAC, the six individuals “were found guilty of establishing a Boko Haram cell in the United Arab Emirates (UAE) to raise funds for and provide material assistance to Boko Haram insurgents in Nigeria.” The sanctions follow “arrests, prosecutions, and designations in the UAE in September 2021, demonstrating the commitment of the Emirati government to using judicial measures and targeted financial sanctions to disrupt the flow of funds to these networks.” Under Secretary of the Treasury Brian Nelson stated that the U.S. is joining the UAE in targeting terrorist financing networks to ensure the Boko Haram network is unable to further move funds through the international financial system. As a result of the sanctions, all property and interests in property belonging to the sanctioned individuals in the U.S. or in the possession or control of U.S. persons, and “any entities that are owned, directly or indirectly, 50 percent or more” by the targeted individuals are blocked and must be reported to OFAC. Additionally, U.S. persons are 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 OFAC license.
OFAC’s announcement further warned that “engaging in certain transactions with the individuals designated today entails risk of secondary sanctions” and that any foreign financial institution that knowingly facilitates significant transactions or provides significant financial services on behalf of a Specially Designated Global Terrorist may be subject to U.S. correspondent account or payable-through account sanctions.
OFAC sanctions Russian defense companies, political leaders, and Sberbank CEO
On March 24, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced several new sanctions in response to Russia’s invasion of Ukraine. The new sanctions, issued pursuant to Executive Order (EO) 14024, target dozens of Russian defense companies, 328 members of the Russian State Duma, and the CEO of Sberbank, Russia’s largest financial institution. According to OFAC, the sanctions target “companies that are part of Russia’s defense-industrial base and that produce weapons that have been used in Russia’s assault against Ukraine’s people, infrastructure, and territory,” and are intended to prevent 48 companies from accessing western technological and financial resources. The sanctions imposed against the Russian Duma members (political and national security leaders who have supported Russia’s invasion of Ukraine) expand on previous sanctions taken against other Duma members (covered by InfoBytes here) and expand designations to now include the State Duma itself as an entity. OFAC further noted that the sanctioned CEO of Sberbank is a close Putin associate who oversees a large number of companies owned by Sberbank in other industries. As a result of the sanctions, all property and interests in property belonging to the sanctioned persons that are in the U.S. or in the possession or control of U.S. persons, and “any entities that are owned, directly or indirectly, 50 percent or more” by the targeted persons are blocked and must be reported to OFAC. Additionally, U.S. persons are 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 OFAC license.
The same day, OFAC also published one new Frequently Asked Question clarifying the impact of EO 14024 and other Russia-related sanctions on gold-related transactions or persons participating in the gold market.
Find continuing InfoBytes coverage on the U.S. sanctions response to Russia’s invasion of Ukraine here.
OFAC announces Burmese sanctions
On March 25, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 14014 against five individuals and five entities connected to the military regime in Burma. According to OFAC, the sanctions “come[] as the regime prepares to mark the 77th Armed Forces Day.” OFAC also described that “[f]ollowing the February 1, 2021, coup that overthrew Burma’s democratically elected civilian government, the military committed numerous atrocities against the people of Burma, including the violent repression of political dissent and violence against innocent people, including at pro-democracy protests during last year’s Armed Forces Day that killed more than 100 people.” As a result of the sanctions, all property and interests in property belonging to the sanctioned entities subject to U.S. jurisdiction are blocked and must be reported to OFAC. Additionally, “any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked.” U.S. persons are generally prohibited from engaging in any dealings involving the property or interests in property of blocked or designated persons.
OFAC issues Ukraine general license and Russian FAQ
On March 24, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced three Russia-related General Licenses (GL). GL 6A authorizes transactions related to the exportation or reexportation of agricultural commodities, medicine, medical devices, replacement parts and components, or software updates, research activities related to the Covid-19 pandemic, or clinical trial activities. GL 17A authorizes the import of existing purchases of prohibited products that are under pre-existing contract by Executive Order (E.O.) 14068. And GL 20 authorizes third-country diplomatic and consular funds transfers. The same day, OFAC issued Ukraine/Russia-related GL 25, which authorizes news reporting organizations to engage in certain transactions related to their work in the Crimea, Donetsk People’s Republic, and Luhansk People’s Republic regions of Ukraine. OFAC also announced that it updated two frequently asked questions regarding E.O. 14068, which prohibits the importation into the United States of fish, seafood, and preparations thereof; alcoholic beverages; and non-industrial diamonds of Russian Federation origin.
Find continuing InfoBytes coverage on the U.S. sanctions response to Russia’s invasion of Ukraine here.
OFAC announces human rights abuse sanctions
On March 21, the U.S. Treasury Department’s Office of Foreign Assets Control announced sanctions pursuant to Executive Order 13818 against the Republic of the Sudan Central Reserve Police (CRP) for serious human rights abuse. According to OFAC, the “CRP has used excessive force against pro-democracy protesters peacefully demonstrating against the military-led overthrow of the civilian-led transitional government in Sudan.” As a result of the sanctions, all property and interests in property belonging to the sanctioned person subject to U.S. jurisdiction are blocked and must be reported to OFAC. OFAC also noted that its regulations generally prohibit all dealings by U.S. persons that involve any property or interests in property of designated persons.
Senate holds hearing on the role of digital assets in illicit finance
On March 17, the Senate Banking, Housing, and Urban Affairs Committee held a hearing titled “Understanding the Role of Digital Assets in Illicit Finance” to consider the risks crypto technology and digital assets pose for consumers and the financial system. The Committee heard from several witnesses, including FinCEN’s Former Acting Director, Deputy Director/Digital Innovation Officer Michael Mosier, who stressed that policymakers should focus on finding a balance that does not only “chase bad actors but also prevents exploitation of the vulnerable from the start.” Chairman Sherrod Brown (D-OH) opened the hearing by explaining that the “dollar has safeguards to protect against crime and illicit activity” because companies dealing in real money “are required to know their customers, and report suspicious transactions.” In contrast, digital assets “make it easier for money launderers to use webs of transactions across the globe to cover their tracks” and hinders law enforcement agencies’ ability to trace illicit funds. Brown cautioned that “lax rules and little oversight” are providing bad actors more opportunities to “hide and move money in the dark” using cryptocurrency. He stressed, however, that President Biden’s recent executive order, which outlined a coordinated approach to digital asset innovation (covered by InfoBytes here), will “drive progress on this issue” and “jumpstart a coordinated strategy from law enforcement and regulators to fight bad actors who want to use crypto.” Ranking Member Pat Toomey (R-PA) took a different view, noting that the “traceable nature of many cryptocurrencies” can also support the detection and prevention of illicit crime, which is “a factor making [cryptocurrency] terribly risky to utilize for criminal purposes.” He also expressed concerns that the lack of regulatory clarity surrounding digital assets has driven innovation abroad.
Witnesses provided various recommendations designed to, among other things, reduce the risk of sanctions evasion through digital assets, as well as improve detection, disruption, and deterrence of the illicit use of digital assets. While one witness stated that “transparency of blockchains enhances the ability of policymakers and law enforcement to detect, disrupt, and ultimately, deter illicit activity,” another witness cautioned that “[e]ven with the latest blockchain analytics, investigations can take years to complete,” particularly because “prosecutors must demonstrate that an identifiable person is behind the criminal activity.”
OFAC sanctions Guatemalan drug trafficking organization connected to Mexican cartels
On March 18, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 14059 against a drug trafficking organization tied to Mexican cartels, as well as the organization’s leaders, for engaging in actions that threaten the people and security of the U.S. and Guatemala. Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson stated that “Treasury and our U.S. and Guatemalan government partners will continue to use every available resource to dismantle these criminal networks” that have “engaged in, or attempted to engage in, activities or transactions that materially contributed to, or pose a significant risk of materially contributing to, the international proliferation of illicit drugs or their means of production.” As a result of the sanctions, the designated persons’ property located in the U.S. or held by U.S. persons are blocked and must be reported to OFAC. Additionally, OFAC regulations generally prohibit U.S. persons from participating in transactions with the designated persons.
OFAC issues Ukraine general license and Russian FAQ
On March 18, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued General License (GL) 24, Blocking Property of Certain Persons and Prohibiting Certain Transactions With Respect to Continued Russian Efforts To Undermine the Sovereignty and Territorial Integrity of Ukraine, which authorizes certain transactions related to the provision of maritime services, provided such services are performed outside the covered regions and services are not performed on behalf of any entity located in, or organized under the laws of, the covered regions. The GL does not authorize “[a]ny new investment in the Covered Regions prohibited by E.O. 14065, unless separately authorized,” or “[a]ny transactions involving any person blocked pursuant to E.O. 14065, unless separately authorized.” OFAC also amended one Frequently Asked Question clarifying that Executive Order 14066 does not prohibit dealing in Kazakh-origin crude oil of the Caspian Pipeline Consortium.
Find continuing InfoBytes coverage on the U.S. sanctions response to Russia’s invasion of Ukraine here.
OFAC sanctions persons linked to illicit gold trade in Congo
On March 17, the U.S. Treasury’ Department's Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order (E.O.) 13413, as amended by E.O. 13671, against an individual who operates an illicit gold trade in Uganda, as well as companies in the UAE, and a network of companies involved in the illicit gold trade from the Democratic Republic of the Congo (DRC). According to OFAC, the illegal gold trading “provides revenue to armed groups that threaten the peace, security, and stability of the DRC.” As a result of the sanctions, all property and interests in property belonging to the sanctioned persons, and “any entities that are owned, directly or indirectly, 50 percent or more” by them that are subject to U.S. jurisdiction are blocked and must be reported to OFAC. OFAC noted that its regulations generally prohibit U.S. persons from participating in transactions with these individual and entities unless authorized by a general or specific license.