OFAC Settles with Canadian Bank for Apparent Violations of Cuban Assets Control Regulations and Iran Sanctions

On January 13, Treasury’s Office of Foreign Asset Control (OFAC) announced a $516,105 settlement agreement with a Canadian-based bank and its online-brokerage subsidiaries in connection with accounts held and transactions processed on behalf of certain Specially Designated Nationals and Blocked Persons located in Cuba, Iran and other locations in the Middle East. OFAC also identified general “shortcomings in the bank’s OFAC compliance policies, procedures, and programs” including the bank’s failure to screen for any potential nexus to an OFAC-sanctioned country or entity prior to processing related transactions through the U.S. financial system and occurring due to shortcomings in the banks policies and procedures. The settlement agreement does, however, note that the Apparent Violations constituted a non-egregious case, that the Bank voluntarily self-disclosed the Apparent Violations, and that the applicable total base penalty amount for the apparent violations was $955,750—well above the $516,105 amount OFAC assessed.

Notably, in the agreement’s concluding paragraph, OFAC highlights, as a general matter, the risks associated with both “subsidiaries in high-risk industries–such as securities firms” and, in particular “online payment platforms when the financial institution is unable to restrict access for individuals and entities located in comprehensively sanctioned countries.”

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OFAC Settles With Non-U.S. Company for Apparent Violation of Iran Sanctions

On January 12, Treasury’s Office of Foreign Asset Control (OFAC) announced a $17,500 settlement agreement with Aban Offshoe Limited (“Aban”) of Chennai, India, in connection with an alleged violation of Iranian Transactions and Sanctions Regulations. The alleged violation arises out of events that occurred in June 2008, when Aban’s Singapore subsidiary allegedly placed an order for oil rig supplies from a vendor in the United States with the intended purpose of re-exporting these supplies from the United Arab Emirates to a jack-up oil drilling rig located in the South Pars Gas Fields in Iranian territorial waters. OFAC noted, among other things, that the alleged violation constitutes a non-egregious case, but that Aban did not voluntarily self-disclose the apparent violation.

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OFAC Amends Executive Order Regarding Significant Malicious Cyber-Enabled Activities to Include Interfering With or Undermining Election Processes

On December 28, 2016, the President announced the issuance of an Executive Order Taking Additional Steps To Address The National Emergency With Respect To Significant Malicious Cyber-Enabled Activities thereby amending Executive Order 13694.  Among other things, the new Executive Order allows for the imposition of sanctions on individuals and entities determined to be responsible for tampering, altering, or causing the misappropriation of information with the purpose or effect of interfering with or undermining election processes or institutions.  Five entities and six individuals have been identified and will be added to OFAC’s SDN List, the latest version of which can be accessed here.

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OFAC Release Further Updates to Iran Sanctions Rules

On December 23, OFAC announced it has issued a final rule amending existing Iranian Transactions and Sanctions Regulations to expand the scope of medical devices and agricultural commodities generally authorized for export or re-export to Iran. The amendment also includes new or expanded authorizations relating to training, replacement parts, software and services for the operation, maintenance, and repair of medical devices, as well as certain items that are broken or subject to product recalls or other safety concerns. In addition, this amendment revises the definition of the terms “goods of Iranian origin” and “Iranian-origin goods.” OFAC concurrently published new and updated FAQs pertaining to the amendment.

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POSTED IN: International, Miscellany

OFAC Sanctions Russian Individuals and Companies in Connection with Ukrainian Conflict

On December 20, Treasury’s Office of Foreign Asset Control (OFAC) announced its decision to sanction seven individuals and eight entities in connection with Russia’s occupation of Crimea and the conflict in Ukraine. OFAC also identified 26 subsidiaries of Russian banks as subject to sanctions already in place on their parent companies. Among other things, the sanctions prohibit U.S. residents, citizens, and financial institutions from participating in various financial dealings with the companies. As explained by John E. Smith, acting director of Treasury’s sanctions enforcement office, the sanctions were introduced “in response to Russia’s unlawful occupation of Crimea and continued aggression in Ukraine” in order to “maintain pressure on Russia by sustaining the costs of its occupation of Crimea and disrupting the activities of those who support the violence and instability in Ukraine.” Concurrent with today’s announcement, OFAC also issued a Russia/Ukraine-related General License 11, which authorizes certain transactions “necessary to requesting, contracting for, paying for, receiving, or utilizing a project design review or permit from FAU Glavgosekspertiza Rossii’s office(s) in the Russian Federation.”

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