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Recent joint activity by the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC), including joint actions against Venezuela and North Korea, suggest that the two Treasury agencies are increasing coordination to tackle financial and other crimes.

On September 20, 2017, FinCEN issued an advisory which detailed widespread corruption in Venezuela, noting that OFAC has designated a number of Venezuelan public officials for public corruption and narcotics trafficking, including President Nicolas Maduro, Vice President Tareck El Aissami, national assembly leaders, and leaders of national energy company Petroleos de Venezuela (PdVSA).  This tracks a pattern of regular communications and actions by OFAC and FinCEN…
Continue Reading FinCEN, OFAC Increase Coordination of Enforcement Activities

Following up on our previous post, yesterday the UK Office of Financial Sanctions Implementation (OFSI) issued regulations formally implementing the civil penalties framework set out in the Policing and Crime Act 2017.  OFSI has issued a press release, regulations regarding civil penalties, responses received to OFSI’s request for consultation regarding draft guidance…

The UK’s Office of Financial Sanctions Implementation will soon issue regulations that could significantly alter the British sanctions enforcement environment, and bring it closer in line with the US’s approach to such violations.  On the heels of the newly-enacted Policing and Crime Act 2017, the regulations will introduce civil penalties for the violation of financial…

The Treasury Department’s Office of Foreign Assets Control (OFAC) reached a $4,320,000 civil settlement with PanAmerican Seed Company (PanAm Seed) for alleged violations of the Iranian Transactions and Sanctions Regulations (ITSR) that occurred between 2009 and 2012. OFAC treated this as an “egregious case,” which may raise eyebrows because it involved the export of seeds, …

On June 22, 2016, the Department of Commerce, Bureau of Industry and Security (BIS), finalized a new enforcement policy for administrative (i.e., non-criminal) matters called the Guidance on Charging and Penalty Determinations in Settlement of Administrative Enforcement Cases (Guidance).  The Guidance, which is effective immediately, lays out the factors that BIS and its Office of …

In its second enforcement action this year, on June 20th, the State Department’s Directorate of Defense Trade Controls (DDTC) reached a $100,000 settlement with Massachusetts-based Microwave Engineering Corporation.  Despite the small penalty amount, this case is noteworthy in several respects.  …
Continue Reading Massachusetts Company Hit with ITAR Penalty for a Single Individual Deemed Export Violation; Settlement Highlights Importance of Timely Disclosure

A recent 60 minutes report about an ill-conceived criminal case against Xiaoxing Xi, the chair of Temple University’s physics department, carries important lessons for individuals who operate in the high-tech space, along with universities and other government contractors.  The US Attorney for the Eastern District of Pennsylvania brought criminal charges against Dr. Xi, alleging that he unlawfully transferred controlled technology when he shared designs for a piece of equipment with scientists in China.  The government alleged that the designs related to a “pocket heater,” which is used in semiconductor research.  In fact, the designs related to something else entirely.  But it wasn’t until Dr. Xi was put through an ordeal of arrest, questioning and criminal defense, with the personal and professional consequences that go along with it, that the government appears to have looked carefully at the technical aspects of the case.
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Continue Reading 60 Minutes Report on Bungled Chinese-American Espionage Case Highlights Criminal Risk Faced by Individuals and Government Contractors

If submitting a voluntary disclosure to OFAC, BIS, DDTC or one of the many other agencies involved in export controls and sanctions enforcement was not enough, it is becoming increasingly clear that it will soon be necessary to consider whether to disclose possible criminal wrongdoing to the DoJ as well. David Laufman of the DoJ’s…

On April 29, 2016 the Canadian Supreme Court ruled that the Ontario Superior Court of Justice could not compel the World Bank to produce records or require its personnel to testify in court. The case, World Bank Group v. Wallace, challenged the immunities granted to the Bank that cover its archives and employees. Over…

On February 25, 2016, the US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) announced that it concluded an enforcement action against Halliburton Atlantic Limited (“HAL”) and its affiliate Halliburton Overseas Limited (“HOL”) for alleged violations of the Cuban Assets Control Regulations (“CACR”).

HAL and HOL are both Cayman Islands-headquartered subsidiaries of US company Halliburton Energy Services, Inc. (collectively, “Halliburton”).  Combined, they exported $1,189,752 worth of goods and services in support of oil and gas exploration and drilling activities in Angola’s Cabinda Onshore South Block oil concession, which is controlled by an oil and gas exploration joint venture consisting of five energy companies.  None of the companies has a 50 percent or greater ownership stake, and the largest minority owner – Pluspetrol Angola Corporation (45 percent stake) – is the operator, to whom HAL issued nineteen invoices and for whom HOL primarily performed the invoiced services.

Most importantly, in late 2009 the original majority shareholder of the consortium – Roc Oil (Cabinda) Company – assigned a 5 percent participating interest to Cuba Petroleo (“Cupet”), which is Cuba’s state-owned oil company.  This participating interest in the consortium also gave Cupet a beneficial interest in the concession and any oil or gas procured from it.
Continue Reading Halliburton Settlement Shows Risks of Dealing with Entities Partially Owned by Sanctioned Entities