On July 8, OFAC updated its list of frequently asked questions related to Cuba to add two new FAQs regarding the use of U.S. dollars in certain transactions. New FAQ number 43 clarifies that persons subject to U.S. jurisdiction may use the U.S. dollar to conduct transactions in Cuba or with Cuban nationals if the activity is authorized by or exempt from the Cuban Assets Control Regulations (CACR). FAQ 43 further clarifies that under 31 CFR § 515.584(d), commonly known as the “U-turn” general license, U.S. banking institutions are authorized to process transactions originating and terminating outside the United States provided that neither the originator nor the beneficiary is a person subject to U.S. jurisdiction. This means that transactions related to third-country commerce involving Cuba or Cuban nationals may be processed in U.S. dollars through the U.S. financial system via financial institutions located in the United States that serve as intermediary banks. New FAQ 50 relates to correspondent accounts. Pursuant to a general license in the CACR, U.S. depository institutions are permitted to maintain correspondent accounts at financial institutions that are nationals of Cuba, provided such accounts are used only for transactions that are authorized or exempt under the CACR. FAQ 50 explains that such accounts may be maintained in U.S. dollars, and that transactions necessary to establish and maintain such accounts – including processing funds transfers in U.S. dollars – are authorized. Finally, FAQ 50 notes that financial institutions that are nationals of Cuba remain prohibited from opening correspondent accounts at a U.S. financial institution.
On July 15, Petrobras announced that SBM Offshore NV had entered into a settlement agreement with Brazilian authorities to resolve allegations stemming from the Petrobras bribery probe. Under the terms of the agreement, the Dutch drilling company, which had been accused of paying bribes to Brazilian state-owned oil company Petrobras, will be immune to new legal actions stemming from the probe. In exchange, SBM Offshore agreed to pay approximately $342 million in fines, comprising $13.2 million to the Brazilian government and $328.2 million to Petrobras, of which $179 million “represents the nominal value to be deducted from future payments owed by Petrobras to SBM based on prevailing contracts.”
According to Petrobras, the leniency agreement is the outcome of negotiations that began in March 2015. Petrobras further stated that it will resume its normal business relationship with SBM Offshore.
The agreement is the latest settlement for SBM Offshore in connection with the Petrobras bribery probe. In 2014, SBM Offshore settled with Dutch authorities. In February 2016, SBM Offshore announced that the U.S. DOJ had re-opened its investigation into the company.
On July 12, the European Union (EU) finalized and adopted the EU-U.S. Privacy Shield for transatlantic data flows. As previously covered in InfoBytes, on October 6, 2015, the Court of Justice of the European Union declared in Shrems v. Data Protection Commissioner “invalid” a decision of the European Commission that the EU-U.S. Safe Harbor Framework provided adequate protection for personal data transferred from the EU to the U.S., thus requiring the EU and the U.S. to develop a new framework for transatlantic data transfers. The recently finalized EU-U.S. privacy shield is based on the following principles: (i) strong obligations on companies handling data, including requiring the Department of Commerce to regularly conduct updates and reviews of participating companies and tightening conditions for the onward transfers of data; (ii) clear safeguards and transparency obligations on U.S. government, assuring that “the access of public authorities for law enforcement and national security is subject to clear limitations, safeguards and oversight mechanisms”; (iii) effective protection of individual rights, including complaint-handling mechanisms and the designation of an Ombudsperson independent from U.S. intelligence services to handle redress possibility in the area of national security for EU citizens; and (iv) annual joint review mechanism to monitor the functioning of the Privacy Shield. On July 12, the Commission simultaneously released a Q&A, a Fact Sheet, the “Adequacy Decision,” which will enter into force immediately after Member States are notified, and Annexes.
On July 13, the UK Serious Fraud Office (SFO) charged a UK-based logistics and freight operations company, along with seven current and former executives, with making corrupt payments in violation of Section 1 of the Prevention of Corruption Act 1906. The company is a subsidiary of a privately-owned company headquartered in Hamburg, Germany. The conduct at issue is alleged to have occurred between January 2005 and December 2006, and involves an alleged conspiracy to bribe an agent of an Angolan state oil company to bolster the subsidiary company’s business in the Republic of Angola. Read more…
On July 11, the United Kingdom’s Serious Fraud Office (SFO) entered into its second-ever deferred prosecution agreement (DPA), under section 1 of the Criminal Law Act 1977 (conspiracy to corrupt and conspiracy to bribe) and section 7 of the Bribery Act 2010 (failure of a commercial organization to prevent bribery). The counterparty to the DPA is an unnamed UK small to medium sized entity (SME), a wholly-owned subsidiary of a U.S. corporation, which generates the majority of its revenues from exports to Asian markets. The DPA did not name the entities due to ongoing related legal proceedings. Read more…