Click here to read the full Client Advisory by Steptoe & Johnson LLP. In December 2019, the U.S. Department of Justice (“DOJ”) announced a revised policy regarding voluntary disclosure of export control and sanctions violations by business organizations (“VSD Policy”). The VSD Policy encourages business organizations – which now include financial institutions – to self-disclose … Continue Reading
On December 31, 2019, the U.S. District Court for the Northern District of Texas threw out a $2 million fine issued in 2017 by the Treasury Department’s Office of Foreign Assets Control (“OFAC”) under the Ukraine-Related Sanctions Regulations (“URSR”), 31 C.F.R. § 589. The much-awaited opinion held that OFAC did not provide “fair notice” that … Continue Reading
On September 17, 2019, OFAC released a settlement with UK-based British Arab Commercial Bank (BACB) in a case regarding offshore use of the dollar, demonstrating how challenging and complex it can be to assess whether offshore transactions in US dollars (USD) that involve US sanctions targets are in all respects outside of OFAC’s enforcement jurisdiction. … Continue Reading
On May 9, 2019, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) published long-awaited guidance addressing how FinCEN regulations apply to what the agency calls “convertible virtual currency” (CVC), which covers most types of cryptocurrencies and crypto-tokens. The guidance focuses on: Platforms engaged in exchange transactions involving securities, commodities, or futures contracts and … Continue Reading
On April 25, 2019, OFAC announced that Haverly Systems, Inc. (“Haverly”), a New Jersey software company, had agreed to pay $75,375 to settle apparent violations from 2014 related to Haverly’s collection of payments from JSC Rosneft (“Rosneft”), a Russian oil major on OFAC’s Sectoral Sanctions Identifications (“SSI”) list. The key issue was OFAC’s finding that … Continue Reading
On February 7, 2019, OFAC fined a Virginia-based company, Kollmorgen Corporation, for business that its recently-acquired Turkish subsidiary allegedly conducted in Iran after determining that Kollmorgen had undertaken “extensive preventative and remedial conduct” both before and after the acquisition in an effort to ensure the subsidiary complied with US sanctions. OFAC also found that Kollmorgen … Continue Reading
On January 31, 2019, OFAC announced a $996,080 settlement with e.l.f. Cosmetics, Inc. (“ELF”) for violations of the North Korea Sanctions Regulations arising from the importation of 156 shipments of false eyelash kits that contained materials that were sourced from North Korea and that were purchased from suppliers in China. In January 2017, ELF discovered … Continue Reading
Steptoe partners Meredith Rathbone and Brian Egan authored an article on US secondary sanctions published in WorldECR’s special report, “The Global Agenda.” The article discusses how US secondary sanctions seek to target and restrict the activities of non-US persons and explains how best to deal with those sanctions. More information is available here.… Continue Reading
On August 10, 2017, the Department of Treasury’s Office of Foreign Assets Control (“OFAC”) announced a settlement with IPSA International Services, Inc. (“IPSA”) to resolve apparent violations of the Iranian Transactions and Sanctions Regulations (“ITSR”). The apparent violations include importation of Iranian-origin services in violation of § 560.201 and engagement in transactions or dealings related … Continue Reading
On June 26, 2017, American International Group, Inc. (AIG) agreed to a $148,698 civil settlement with OFAC based on a voluntary disclosure of 555 apparent violations of OFAC’s Iran, Sudan, Cuba and Weapons of Mass Destruction Proliferators economic sanctions programs. AIG processed approximately $396,530 in premiums and paid claims on policies covering maritime shipments of … Continue Reading
On May 26, 2017, in Epsilon Electronics v. US Department of the Treasury, a split panel of the DC Circuit Court of Appeals partially upheld and partially remanded to the district court a determination by the Treasury Department’s Office of Foreign Assets Control (OFAC) to impose a penalty of over $4 million against Epsilon for … Continue Reading
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 issued in December … Continue Reading
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 … Continue Reading
On February 3, 2017, the US Treasury Department’s Office of Foreign Assets Control issued a finding of violation against Taiwan-based B Whale Corp. (BWC), a member of the Taiwan-based shipping company TMT Group. The finding of violation was issued for activity occurring entirely outside the United States, based on the jurisdictional finding that “BWC was … Continue Reading
The US Treasury Department’s Office of Foreign Assets Control (OFAC) published an amendment to the Sudanese Sanctions Regulations (SSR), 31 C.F.R. Part 538, on January 17, 2017. The amendment authorizes all transactions that were previously prohibited under the SSR, including transactions involving the Government of Sudan. OFAC’s SSR amendment comes as a broad general license … Continue Reading
Steptoe’s Meredith Rathbone and Peter Jeydel co-authored an article in Risk & Compliance, “New DOJ Guidance Could be a Game Changer for Export Controls and Sanctions Enforcement.” The article was published in the January-March issue and centers on how the US Department of Justice’s guidance may cause difficulties and new risks for industries. For more … Continue Reading
Capping off a year of robust sanctions enforcement, two recent enforcement actions highlight the risks of doing business with sanctioned countries, in particular Iran. In December 2016, federal and New York state regulators initiated enforcement actions related to alleged sanctions violations involving Iran. In the first enforcement action, Italy’s largest retail bank, Intesa Sanpaolo SpA … Continue Reading
On October 17, the Treasury Department’s Office of Foreign Assets Control (OFAC) and the Commerce Department’s Bureau of Industry and Security (BIS) published amendments to the Cuban Assets Control Regulations (CACR) and the Export Administration Regulations (EAR). These amendments took further steps to ease economic sanctions and export control restrictions on Cuba. Along with these … Continue Reading
Sunday’s presidential town hall debate was the second of three opportunities for candidates Donald Trump and Hillary Clinton to make their case to the American electorate. In addition to the discussion of personal and character issues, the candidates touched on a range of policy issues, including tax policy, financial services, energy, and international trade. The … Continue Reading
Today, the Treasury Department’s Office of Foreign Assets Control (OFAC) issued a rule increasing penalties for violations of its economic sanctions regulations. This type of penalty increase should now occur on an annual basis. The maximum statutory penalty for each violation under most of OFAC’s sanctions programs, other than Cuba and a few others, is … Continue Reading
On March 7, 2016, the United States District Court for the District of Columbia granted the US Government’s motion for summary judgment in Epsilon Electronics, Inc. v. United States Department of the Treasury, Office of Foreign Assets Control, upholding a $4.073 million civil penalty imposed the Office of Foreign Assets Control (“OFAC”) on Epsilon Electronics, Inc. … Continue Reading
The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued a Finding of Violation to MasterCard on March 16 for failing to report accounts in which blocked entities held interest. The Finding of Violation represents a rare instance of enforcement of the Reporting, Procedures, and Penalties Regulations (RPPR). Although MasterCard had restricted … Continue Reading
On February 10, 2016, a draft of the Policing and Crime Bill 2015-16 (“the Bill”) was introduced to the UK House of Commons and given its First Reading. The Bill is a lengthy document covering a wide variety of issues, including financial sanctions, which are contained within Part 8. Alongside the Bill, the UK government … Continue Reading
On February 8, 2016, the US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) announced a $2,485,890 settlement with Barclays Bank Plc (“Barclays”). According to the settlement announcement, Barclays processed 159 US-dollar (“USD”)-denominated transactions on behalf of Barclays Bank of Zimbabwe Limited (“Barclays Zimbabwe”) between July 2008 and September 2013. OFAC stated that … Continue Reading
