A bill was recently introduced by U.S. Representative Bryan Steil (R-Wisconsin) that would allow the U.S. Treasury Department to target European financial intuitions conducting business with Iran through the Instrument in Support of Trade Exchanges (INSTEX) vehicle in order to avoid U.S. sanctions.
While there have been a low number of actions against European institutions,
In two recent enforcement actions, the U.S. Treasury Department, Office of Foreign Assets Control (OFAC) demonstrated the long-arm of U.S. economic sanctions jurisdiction. One matter involved Société Internationale de Télécommunications Aéronautiques SCRL (SITA), a Swiss firm that provides commercial telecommunications network and information technology services to the civilian air transport industry. The other involved Eagle Shipping International (Eagle), a U.S.-based shipping and logistics company.
Each action serves as a reminder of the U.S. government’s willingness to enforce U.S. sanctions in the context of what is primarily non-U.S. conduct. The resolutions also illustrate the potential benefits of voluntarily disclosing sanctions violations to OFAC.Continue Reading Sanctions Enforcement Update: Penalties for Logistics, Telecom Companies
In case you missed it, I provided insight on U.S. sanctions risks in the context of international supply chains to Supply Chain Management Now last month.
Citing examples, such as e.l.f. Cosmetics’s 2019 settlement for nearly $1 million for sanctions violations, I asserted in the article that both U.S. and non-U.S. companies need to understand how broadly U.S. sanctions are enforced.
In the article, I provided an overview of the current sanctions landscape in the U.S. and highlights particular challenges such as avoiding dealing with specially designated nationals (SDNs). The SDN list is vast and includes parties that reside nearly everywhere in the world. As I said in the article, “this creates a challenge because many of them are in countries not otherwise subject to U.S. sanctions.”Continue Reading U.S. Sanctions Risk to International Supply Chains
In case you missed it, we ended 2019 with a webinar on current topics in U.S. economic sanctions. Below are key points from the webinar:
At the end of December 2019, the U.S. District Court for the Northern District of Texas vacated a $2 million penalty that the U.S. Treasury Department, Office of Foreign Assets Control (OFAC) had imposed against ExxonMobil for alleged violations of U.S. sanctions related to Russia and Ukraine. OFAC is the U.S. government agency that administers most U.S. sanctions.
This matter has been of interest since the penalty was first announced in July 2017 – read our July 2017 blog post detailing the matter. As described below, the district court’s reasoning in vacating the penalty against Exxon is worthy of interest, too.Continue Reading U.S. District Court Deals Rare Defeat to OFAC in U.S. Sanctions Matter
On September 27, 2019, Barclays PLC agreed to pay $6.3 million to the Securities and Exchange Commission (SEC) to settle charges that Barclays violated the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA). The Barclays settlement fits a pattern of recent U.S. government enforcement against companies, particularly in the financial services sector, relating to FCPA violations stemming from hiring or providing internships to relatives and friends of government officials. Penalties have been significant – for example, Credit Suisse Group AG paid a $47 million penalty in 2018 as part of a Justice Department FCPA investigation into their hiring practices in Asia. We previously wrote about this issue in an August 2015 article about a settlement related to the hiring practices of Bank of New York Mellon.
The Barclays matter is a useful reminder of three things:
Continue Reading (Another) Big Bank Pays FCPA Penalty for Hiring Practice
The U.S. Treasury Department, Office of Foreign Assets Control (OFAC), the main U.S. government body that administers U.S. economic sanctions and embargoes, continues to be busy. In September 2019 alone, OFAC has announced new sanctions designations, new penalties, and new regulations on a nearly daily basis.
Many of these actions are largely administrative in nature. For example, in the September 4 Federal Register, OFAC announced new U.S. sanctions on Nicaragua. While the regulations (at 31 CFR Part 582) are in fact new, the prohibitions contained in the regulations are not: the regulations merely implement Executive Order 13,851, which was issued by President Trump in November 2018.
We nonetheless want to briefly summarize three actions taken by OFAC to date in September 2019. As described below, we think these actions provide useful insight into how OFAC is operating currently.Continue Reading Sanctions Update: Additional Iran and Venezuela Designations, Penalty for Sudan Violations
On August 5, 2019, President Trump issued Executive Order 13,884 (EO 13,884), which significantly expands existing U.S. sanctions on Venezuela.
Pursuant to EO 13,884, virtually all transactions with the government of Venezuela are now prohibited. There are some important exceptions to that prohibition, and those are discussed below.
While this is not an absolute embargo on Venezuela, it is quite close. And even when a transaction with Venezuela may be lawfully permitted, the practical challenges and the risk of conducting the transaction may make it nearly impossible to complete successfully.Continue Reading Venezuela Update: Significant Sanctions Restrictions Imposed
I am excited to be presenting, along with Bass, Berry & Sims litigation attorney Lindsey Fetzer, a 90-minute CLE webinar hosted by Strafford on FCPA compliance on September 18, 2019 titled, “FCPA Compliance: Meeting FCPA Requirements and Minimizing Liability Risks.”
The webinar will examine the requirements of the FCPA and other anti-bribery laws,
On a regular basis over the past several months, the U.S. Treasury Department, Office of Foreign Assets Control (OFAC) has introduced new sanctions requirements, guidance, and restrictions. OFAC is the U.S. government agency which administers most U.S. sanctions programs.
Many of these measures have been quite targeted. For instance, on July 29, 2019, OFAC designated Kim Su Il as a Specially Designated National (SDN) of North Korea. According to the SDN listing, Kim Su Il is a resident of Vietnam. Thus the designation, while limited to Kim Su Il, demonstrates one of the challenges of U.S. sanctions compliance: many SDNs reside in or are nationals of countries against which the United States does not otherwise maintain sanctions.Continue Reading Update on U.S. Sanctions: New Requirements, Continuing Enforcement