On October 11, 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN) announced enforcement actions against Bittrex, Inc. (Bittrex), a privately-owned digital asset trading platform based in Bellevue, Washington, for apparent violations of anti-money laundering (AML) laws and of multiple sanctions programs. A settlement of over $24 million was announced by OFAC and a $29 million fine was announced by FinCEN. FinCEN will credit payment of the OFAC settlement amount toward Bittrex’s potential liability with FinCEN, meaning Bittrex will pay just over $29 million in total. Joint enforcement action between OFAC and FinCEN is uncommon—the settlements mark the first instance of parallel enforcement actions by OFAC and FinCEN in the digital asset sector.
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Sanctions Enforcement
New Joint Alert Puts Export Compliance Focus on Financial Institutions
By Evan Abrams, Jack Hayes & Dave Stetson on
On June 28, 2022, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and the Department of Commerce’s Bureau of Industry and Security (BIS) issued a Joint Alert entitled “FinCEN and the U.S. Department of Commerce’s Bureau of Industry and Security Urge Increased Vigilance for Potential Russian and Belarusian Export Control Evasion Attempts” (“Joint Alert”). The Joint Alert marks the first time FinCEN and BIS have collaborated on an alert of this nature and has important implications for both financial institutions and exporters/international trade parties.
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UK Updates Sanctions Enforcement Guidance in Readiness for Imminent Introduction of Strict Civil Liability for Financial Sanctions Breaches
On June 15, 2022, the United Kingdom will introduce a strict civil liability standard for violations of UK financial sanctions committed after that date. In anticipation of this important change to the enforcement powers of HM Treasury’s Office of Financial Sanctions Implementation (OFSI), the OFSI enforcement and monetary penalties for breaches of financial sanctions guidance (Monetary Penalties Guidance) has been updated and will take effect from June 15. OFSI Director, Giles Thomson, also has outlined OFSI’s enforcement approach in light of these imminent changes in a blog post.
For more information on how these developments could impact your organization, contact the author of this post, Alexandra Melia, in Steptoe’s Economic Sanctions team in London.…
April 18 – May 2, 2022 Russian Sanctions Update
Between April 18 and May 2, 2022, the US government continued to ratchet up economic sanctions, export controls, and other restrictive trade measures targeting Russia. Most significantly, on April 21, President Biden issued a Proclamation prohibiting “Russian-affiliated vessels” from entering US ports. Otherwise, the US government has focused on utilizing its existing authorities to impose further costs on Russia.
Over the last two weeks of April, the US Treasury Department’s Office of Foreign Assets Control (OFAC) designated over 40 individuals and entities including Transkapitalbank (TKB), re-issued an expanded set of Ukraine- / Russia- Sanctions Regulations (URSR), and issued several new or revised general licenses, including one relating to the provision of assistance by nongovernmental organizations, and 8 Frequently Asked Questions (FAQs).
Separately, the Commerce Department’s Bureau of Industry and Security (BIS) continues to be focused on restricting the Russian aviation sector, issuing a temporary denial order (TDO) on the Russian cargo aircraft carrier, Aviastar, for operating aircraft on flights into and out of Russia without the BIS authorization required under the Export Administration Regulations (EAR), and providing weekly updates to its list of commercial and private aircraft operated in potential violation of the EAR.…
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US Sanctions on Russia Continue to Grow
Between April 5 and April 17, 2022, the US government took several steps to ratchet up economic sanctions, export controls, and other restrictive trade measures targeting Russia and Belarus.
President Biden issued a new Executive Order prohibiting US persons from engaging in new investment in Russia, and also establishing a framework through which US persons could in the future be prohibited from providing certain services to any person in Russia.
The US Treasury Department’s Office of Foreign Assets Control (OFAC) designated a darknet market and cryptocurrency exchange, several Russian banks and their subsidiaries, and a number of companies allegedly assisting the Russian military by adding them to the Specially Designated Nationals and Blocked Persons (SDN) List pursuant to Executive Orders (EOs) 14024 and 13694. OFAC also published seven new and amended general licenses, including authorizations related to the recent designations of Public Joint Stock Company Sberbank of Russia (Sberbank), Joint Stock Company Alfa-Bank (Alfa-Bank), and Public Joint Stock Company Alrosa (Alrosa).
Separately, the US Commerce Department’s Bureau of Industry and Security (BIS) announced new, stringent export controls so that all items subject to the US Export Administration Regulations, except items designated “EAR99,” require a license for export, reexport, or transfer (in country) to or in the Russian Federation and Belarus.…
A Summary of New UK Sanctions Enforcement Powers and Further Ukraine-related UK Sanctions on Russia and Belarus
Since March 14, 2022, the United Kingdom has continued to introduce and announce new sanctions measures in response to Russia’s invasion of Ukraine. The new UK measures include sanctions enforcement powers under the Economic Crime (Transparency and Enforcement) Act 2022, the designation of hundreds of individuals and entities under the UK’s Russia and Belarus sanctions regimes, the introduction of new general licences, the introduction and announcement of new sanctions measures, and the revision of various guidance documents.
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Update: New US Sanctions on Russia Target Certain Imports, Exports, Dollar Banknotes, and Investments
As of March 20, 2022, a new Executive Order (EO) prohibited certain imports, exports, the transfer of US dollar banknotes to Russia, and new investments involving certain sectors of the Russian economy. The US Office of Foreign Assets Control (OFAC) also issued new General Licenses and Frequently Asked Question (FAQ) guidance. Additionally, the US Department of Commerce’s Bureau of Industry & Security (BIS) announced new regulations to control the export, reexport, and transfer (in country) of certain luxury goods to or within Russia and Belarus. BIS also identified numerous aircraft subject to US export controls jurisdiction that had flown to Russia without a license, and issued a reminder regarding the restrictions under General Prohibition 10 under the Export Administration Regulations (EAR) of servicing such aircraft.
Key points of these US sanctions developments and export controls are summarized below.
For a summary of US sanctions and export controls adopted between February 21 and March 8, 2022, see this Steptoe blog post.…
Update: EU Adopts Additional Sanctions Against Russia and Belarus over the War in Ukraine
Since the adoption of the first sanctions package against Russia, the Council of the EU and the European Commission (“Commission”) have been working closely together to adopt increasingly severe sanctions to force President Putin back to the negotiating table in view of reaching a ceasefire. Coordination with allies has also been intense. Following our review of the first and second sanctions package, we analyze below the latest restrictive measures.
For more information on how these developments could impact your organization, contact a member of Steptoe’s Economic Sanctions team in Brussels.
For additional resources can be found on Steptoe’s “Sanctions against Russia: Implications for Business and International Trade” page.…
A Summary of New Ukraine-related US Sanctions and Export Controls on Russia and Belarus
Since February 21, 2022, the United States has joined a coalition of countries imposing sanctions in response to Russia’s invasion of Ukraine. New US sanctions and export controls are wide ranging and complex, significantly impacting trade and related financial transactions between the US and Russia, as well as Belarus. They also affect transactions and exports from outside the United States in many areas of commerce. The following is a high-level overview of recent US legal developments as of March 8, 2022.
For more information on how these measures could impact your organization, contact a member of Steptoe’s Economic Sanctions and Export Controls teams.
Additional resources can be found on Steptoe’s “Sanctions against Russia: Implications for Business and International Trade” page.…
Update: EU Adopts Far-Reaching Sanctions following Russian Invasion of Ukraine
Following Russia’s invasion of Ukraine, the EU has adopted a much more severe sanctions package against Russia than the measures adopted on February 23, 2022 (see our previous previous blog post). The new measures provide for various restrictions, including additional targeted restrictions against specified individuals; expanded financial measures aiming at cutting Russia’s access to the EU capital markets; trade restrictions targeting the energy and aviation sectors and banning most exports of dual-use items, as well as certain semiconductors and cutting-edge technologies from the EU to Russia.
The key aspects of the new sanctions imposed by the EU are summarized below. Unless otherwise specified, references to Annexes in the below overview refer to Annexes to Council Regulation (EU) No 833/2014 (as amended or inserted by Council Regulation (EU) 2022/328 of February 25, 2022).…
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