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OFAC sanctions Syrian individuals and entities
On November 9, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 10 entities and seven individuals, including Syrian military officials, members of the Syrian Parliament, Syrian government entities, and various Syrian and Lebanese persons for allegedly supporting Bashar al-Assad regime’s petroleum industry. The individuals and entities were designated pursuant to Executive Orders 13852, 13573, and 13572. As a result, all property and interests in property belonging to the designated individuals and entities subject to U.S. jurisdiction are blocked and must be reported to OFAC. OFAC noted that its regulations “generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons,” and warned that non-U.S. persons that engage in transactions with the designated persons may expose themselves to designation.
OFAC sanctions network for procuring goods for Iranian military firm
On November 10, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against a network of six companies and four individuals for allegedly facilitating the procurement of sensitive goods—including U.S.-origin electronic components—for an Iranian military firm that was previously designated by the U.S. and the European Union for being owned or controlled by Iran’s Ministry of Defense and Armed Forces Logistics. The designations are being taken pursuant to Executive Order 13382, which aims to freeze the assets of proliferators of weapons of mass destruction along with their supporters. As a result, all property and interests in property belonging to, or owned by, the designated persons subject to U.S. jurisdiction are blocked, and U.S. persons are also generally prohibited from engaging in transactions with them. OFAC further warned foreign financial institutions that knowingly facilitating significant transactions or providing significant support to the designated persons may subject them to U.S. sanctions.
Concurrent with OFAC’s designations, the U.S. Attorney’s Office for the District of Columbia filed a criminal complaint against two of the designated entities and one of the designated individuals for conspiring to violate U.S. export laws and sanctions against Iran.
OFAC sanctions Lebanese government official for corruption
On November 6, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13818 against an individual for being a current or former high-level government official responsible for allegedly being “at the forefront of corruption in Lebanon.” According to OFAC, the sanctioned individual was involved in several projects that “steered Lebanese government funds to individuals close to him through a group of front companies” while serving as Minister of Energy. OFAC also designated the individual “for being a current or former government official, or a person acting for or on behalf of such an official, who is responsible for or complicit in, or who has directly or indirectly engaged in corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery.” As a result of the sanctions, all property and interests in property of the individual, “and of any entities that are owned, directly or indirectly, 50 percent or more by him, individually, or with other blocked persons, that are in the United States or in the possession or control of U.S. persons, are blocked and must be reported to OFAC.” OFAC noted that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated individual, including “the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person or the receipt of any contribution or provision of funds, goods or services from any such person.”
OFAC sanctions entities for Iranian petrochemical sales
On October 29, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13846 against eight entities for their alleged “involvement in the sale and purchase of Iranian petrochemical products brokered by [a petrochemical company]. . .designated by Treasury in January 2020.” The designated entities—based in Iran, China, and Singapore—allegedly aided the petrochemical company’s efforts to process and move funds generated by the sale of these products, which were then used to finance the Iranian regime’s “destabilizing agenda of support to corrupt regimes and terrorist groups throughout the Middle East and, more recently, Venezuela.”
In addition, OFAC also updated its List of Specially Designated Nationals and Blocked Persons to add additional aliases for an Iraq-based bank that was previously designated, among other things, for being “used by Iran’s Central Bank Governor to covertly funnel millions of dollars on behalf of the IRGC-QF to support Hizballah.”
As a result, all property and interests in property belonging to, or owned by, the designated persons subject to U.S. jurisdiction are blocked, and U.S. persons are also “generally prohibited from engaging in transactions with them.” OFAC further warned foreign financial institutions that knowingly facilitating significant transactions or providing significant support to the designated persons may subject them to sanctions that terminate their access to the U.S. financial system.
OFAC warns of sanctions risks for high-value artwork
On October 30, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued an art advisory highlighting characteristics and vulnerabilities in the high-value artwork market that pose sanctions risks. The advisory advises “art galleries, museums, private art collectors, auction companies, agents, brokers, and other participants in the art market” of the importance of maintaining risk-based compliance programs to mitigate exposure to sanctions-related violations. The advisory further emphasizes that the “Berman Amendment” to the International Emergency Economic Powers Act and the Trading with the Enemy Act “does not categorically exempt all dealings in artwork from OFAC regulation and enforcement.” According to OFAC, shell companies and intermediaries are often used to remit and receive payments for high-value artwork. The anonymity that these channels provide, OFAC cautions, allows blocked and other illicit persons to cloak their true identities and helps conceal prohibited conduct from law enforcement and regulators.
The report references previously issued OFAC guidance and discusses a report issued by the U.S. Senate Permanent Subcommittee on Investigations in July (covered by InfoBytes here), which details findings from a two-year investigation related to how Russian oligarchs appear to have used the art industry to evade U.S. sanctions. According to the report, while the art industry is largely unregulated, and, unlike financial institutions, is not subject to the Bank Secrecy Act (BSA) and is not required to maintain anti-money laundering (AML) and anti-terrorism financing controls, sanctions imposed by OFAC do apply to the industry, and U.S. persons are not permitted to conduct business with sanctioned individuals or entities.
OFAC amends CACR to remove certain remittance-related general authorizations
On October 26, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a final rule amending the Cuban Assets Control Regulations (CACR) “to further implement portions of the President’s foreign policy toward Cuba to deny the Cuban government access to funds in connection with remittances to Cuba.” Among other things, the final rule amends several general licenses to remove any transactions that involve entities or subentities identified on the State Department’s Cuba Restricted List (CRL) from the scope of certain remittance-related general authorizations. According to OFAC, the CRL is a list of “entities and subentities under the control of, or acting for or on behalf of, the Cuban military, intelligence, or security services or personnel with which direct financial transactions would disproportionately benefit such services or personnel at the expense of the Cuban people or private enterprise in Cuba.” Additionally, the final rule also clarifies that transactions that relate to the collection, receipt or forwarding of remittances involving an identified entity or subentity are “not authorized as an ordinarily incident transaction where the terms of the general or specific license expressly exclude any such transactions.” In conjunction with the announcement of the final rule, OFAC also updated and issued several new Frequently Asked Questions. The final rule takes effect November 26, allowing for a 30-day implementation period in order to allow for technical implementation of the additional restrictions.
OFAC sanctions Russian government research institution connected to malware
On October 23, the U.S. Treasury Department’s Office of Foreign Assets Control announced sanctions pursuant to Section 224 of the Countering America’s Adversaries Through Sanctions Act against a Russian government research institution. According to OFAC, the institution knowingly, on behalf of the Government of the Russian Federation, engaged in significant activities that undermined cybersecurity. As a result, all property and interests in property of the sanctioned person, and any entities owned 50 percent or more by such person subject to U.S. jurisdiction, are blocked. U.S. persons are also generally prohibited from entering into transactions with the sanctioned persons. Additionally, non-U.S. persons who engage in certain transactions with the sanctioned person may also be exposed to sanctions.
OFAC sanctions Iranian Ministry of Petroleum and others for IRGC-QF support
On October 26, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) designated the Iranian Ministry of Petroleum and two oil companies, as well as multiple entities and individuals, including front companies, subsidiaries, and senior executives, for allegedly providing financial support to Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), pursuant to Executive Order 13224. Additionally, OFAC designated four persons involved in the sale of Iranian gasoline to “the illegitimate Maduro regime in Venezuela.” As a result, all property and interests in property belonging to the identified individuals subject to U.S. jurisdiction are blocked, and “any entities that are owned, directly or indirectly, 50 percent or more by such persons, are also blocked.” U.S. persons are generally prohibited from dealing with any property or interests in property of blocked or designated persons, and OFAC warned foreign financial institutions that if they knowingly facilitate significant transactions for the designated persons they “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.”
Concurrently, OFAC issued amended General License 8A, “Authorizing Certain Humanitarian Trade Transactions Involving the Central Bank of Iran or the National Iranian Oil Company,” which replaces and supersedes GL 8 and allows certain humanitarian trade transactions involving one of the designated oil entities.
OFAC sanctions Iranian entities connected to IRGC-QF
On October 22, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order (E.O.) 13848 against five Iranian entities for allegedly attempting to influence the U.S. electoral process. According to OFAC, these designations are intended to “counter efforts” from foreign actors that “spread[] disinformation online and execut[e] malign influence operations aimed at misleading U.S. voters.” Three of the entities, including the Islamic Revolutionary Guard Corps (IRGC) and the IRGC-Qods Force (IRGC-QF), are designated “for having directly or indirectly engaged in, sponsored, concealed, or otherwise been complicit in foreign interference in the 2020 U.S. presidential election.” Two other entities are designated for being owned or controlled by the IRGC-QF, which, along with the IRGC, has been designated under a number of authorities since 2007. As a result, all property and interests in property belonging to, or owned by, the designated persons subject to U.S. jurisdiction are blocked, and “any entities 50 percent or more owned by one or more designated persons are also blocked.”
The same day, OFAC also sanctioned an IRGC-QF general pursuant to E.O. 13224 for allegedly “exploit[ing] his position as the Iranian regime’s ambassador in Iraq to obfuscate financial transfers conducted for the benefit of the IRGC-QF.” According to OFAC, the designated individual, among other things, allegedly facilitated financial transfers benefiting the IRGC-QF, and helped “IRGC-QF obtain foreign currency in Iraq, in return for equivalent sums that the IRGC-QF in Iran has transferred to relevant entities.”
As a result of OFAC’s recent actions, all property and interests in property belonging to, or owned by, the designated persons subject to U.S. jurisdiction are blocked. U.S. persons are also “generally prohibited from engaging in transactions” with the designated individuals. OFAC further warned foreign financial institutions that knowingly facilitating significant transactions or providing significant support to the designated entities may subject them to sanctions and could terminate access to the U.S. financial system.
OFAC sanctions Hizballah council members
On October 22, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order (E.O.) 13224 against two members of Hizballah’s Central Council, which supports Hizballah’s activities by identifying and electing council members that assert control over policies and military initiatives. As a result of the sanctions, all property and interests in property of the individuals, “and of any entities that are owned, directly or indirectly, 50 percent or more by them, individually, or with other blocked persons, that are in the United States or in the possession or control of U.S. persons, are blocked and must be reported to OFAC.” OFAC noted that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated individuals, including “the making of any contribution of funds, goods, or services by, to, or for the benefit of any blocked person or the receipt of any contribution of funds, goods or services from any such person.” OFAC further warned that engaging in certain transactions with the designated individuals subjects persons to the risk of secondary sanctions pursuant to E.O. 13224 and the Hizballah Financial Sanctions Regulations, which implement the Hizballah International Financing Prevention Act of 2015. Furthermore, OFAC noted that it has the authority to “prohibit or impose strict conditions on the opening or maintaining in the United States of a correspondent account or a payable-through account by a foreign financial institution that knowingly facilitates a significant transaction for Hizballah or on behalf of a designated terrorist group, or a person acting on behalf of or at the direction of, or owned or controlled by, Hizballah.”