OFAC Updates Cuba-Related Frequently Asked Questions

On April 21, OFAC updated its list of frequently asked questions related to Cuba. The updated document includes eight new FAQs clarifying (i)  that Section 515.584(d) of the Cuban Assets Control Regulations (CACR) permits authorized U-turn transactions to originate or terminate at foreign branches and subsidiaries of U.S. banking institutions; (ii) due diligence expectations for banks processing an authorized U-turn transaction from a sanctions compliance perspective; (iii)  that the importation into the United States of goods previously exported to Cuba for servicing requires a specific license; (iv) requirements regarding the export and reexportation of mixed-origin goods to Cuba; (v) that persons subject to U.S. jurisdiction may provide insurance-related services to persons subject to U.S. jurisdiction and engaging in authorized activity in Cuba; (vi) OFAC license requirements for insurance-related services; (vii) that educational grants, scholarships, or awards may be given to a Cuban state-owned entity; and (viii) the circumstances under which  a person subject to U.S. jurisdiction is authorized to purchase or lease real property in Cuba.

LinkedInFacebookTwitterGoogle+Share
COMMENTS: Comments Off
TAGS:
POSTED IN: Banking, Federal Issues, International

Supreme Court Order Allows Victims of Terrorism to Collect from Frozen Funds of Iranian Central Bank

On April 20, the Supreme Court held in Bank Markazi v. Peterson that Section 8772 of the Iran Threat Reduction and Syria Human Rights Act of 2012 does not violate separation of powers principles. Bank Markazi v. Peterson, No. 14-770, slip op. (U.S. April 20, 2016). In a 6-2 decision, the Court concluded that Section 8772, which made certain frozen Iranian assets held in the U.S. subject to attachment to satisfy judgment in favor of persons injured by Iranian terrorism or Iran-supported terrorism, does not “transgress constraints placed on Congress and the President by the Constitution” and is not a “‘one-case-only regime.’” At issue was whether plaintiffs in a wrongful-death case related to the 1983 Beirut bombings could satisfy an award in their favor from billions of Bank Markazi’s dollars that are frozen in a New York bank account. In 2007, a federal district court awarded more than one thousand American victims of Iran-related terrorism $2.65 billion in relief. In 2013, a U.S. federal district court rejected the Iranian central bank’s argument that Section 8772 violated separation of powers principles because it was meant to dictate the outcome of the present case, and ordered the bank to pay the victims using frozen assets in the United States. In 2014, the Second Circuit affirmed the district court’s ruling. The Supreme Court’s recent decision affirms the lower court’s ruling, finding that “[Section] 8772 is an exercise of congressional authority regarding foreign affairs, a domain in which the controlling role of the political branches is both necessary and proper.”

LinkedInFacebookTwitterGoogle+Share
COMMENTS: Comments Off
POSTED IN: Banking, Courts, International

OFAC Issues Hizballah Financial Sanctions Regulations

On April 15, OFAC issued new regulations to implement the Hizballah International Financing Prevention Act of 2015. The regulations authorize the Secretary of the Treasury to prohibit U.S. financial institutions from opening or maintaining correspondent or payable through accounts, or to impose strict conditions on the opening or maintenance of such accounts, for foreign financial institutions determined to knowingly:  (i) facilitate significant transactions for or on behalf of Hizballah or any person whose property or interests in property are blocked due to a connection with  Hizballah; (ii) engage in money laundering to carry out such transactions; or (iii) facilitate or provide significant financial services in relation to transactions described in (i) and (ii). OFAC will publish the names of foreign financial institutions sanctioned under the Hizballah Financial Sanctions Regulations in the Federal Register, and include them in the Hizballah Financial Sanctions Regulations List, a new list maintained on OFAC’s website. The regulations took effect immediately upon issuance.

LinkedInFacebookTwitterGoogle+Share

Colorado Mining Company Announces FCPA Investigation

Recently, a gold mining company based in Colorado disclosed in its quarterly filings an investigation of certain business activities of the company and its affiliates outside the U.S. for possible violations of the FCPA. The company stated that it had hired outside counsel to assist in the investigation, and it was working with the SEC and DOJ with respect to the investigation. The company also stated that, in March 2016, it entered into one-year tolling agreements with the SEC and DOJ. The company’s recent disclosure of the investigation did not specify the nature of the business activities being investigated or where the potential misconduct took place, but the company has mining operations in Ghana, Australia, Indonesia, Peru, and Suriname.

LinkedInFacebookTwitterGoogle+Share
COMMENTS: Comments Off
TAGS: , ,
POSTED IN: Federal Issues, International

Consultant Pleads Guilty to FCPA Charges Before Trial

On April 20, the DOJ announced that Dmitrij Harder, the former owner and president of two Pennsylvania consulting companies pleaded guilty to violations of the FCPA. Mr. Harder pleaded guilty to two counts of violating the FCPA by bribing an official at the European Bank for Reconstruction and Development (EBRD) before U.S. District Judge Paul S. Diamond of the Eastern District of Pennsylvania. The EBRD was a development bank based in London that was owned by approximately 65 sovereign nations and provided financing for development projects in Eastern Europe. On March 2, Judge Diamond ruled that the FCPA covered EBRD as a public international organization, rejecting one of Harder’s key defenses at his upcoming trial. Read more…

LinkedInFacebookTwitterGoogle+Share
COMMENTS: Comments Off
TAGS: ,
POSTED IN: Federal Issues, International