Bass, Berry & Sims attorney Thad McBride was interviewed for the “Bribe, Swindle or Steal” podcast regarding the corruption, sanctions and compliance challenges associated with doing business in Russia. In case you missed it, I was recently interviewed for the “Bribe, Swindle or Steal” podcast regarding the corruption, sanctions and compliance challenges associated with doing business in Russia.

During the podcast, I discussed compliance issues related to the Specially Designated Nationals (SDNs) list and how challenging it is for companies to remain compliant with the constantly shifting regulations that the United States imposes on U.S. businesses operating in Russia.

I also warned companies considering entry into the Russian market that “just like in any place you’re doing business, but especially in Russia – you need to do a really, really careful diligence review and get as much information as you can.”


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I will present a webinar titled, “Hot Topics in US Sanctions: Recent Enforcement and Compliance Best Practices.”

The US Government continues to implement and vigorously enforce US economic sanctions and embargoes. Rarely a week goes by without the agency taking action, be it prohibiting trade with a newly identified North Korean front company, issuing a General License temporarily authorizing the wind-down of operations in Venezuela, or announcing a sizable penalty against a well-known international bank.


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  • Russian corporations de-listed through significant specific steps agreed to with OFAC
  • Exporter settles for $7.7 million and agrees to comprehensive compliance measures
  • OFAC outlines sanctions compliance best practices, expands oversight

As 2018 came to a close, the U.S. Treasury Department, Office of Foreign Assets Control (OFAC) announced two actions that should be studied by any party subject to U.S. economic sanctions. OFAC is the U.S. government agency with principal responsibility for administering U.S. sanctions regulations.

First, on December 19, OFAC published a letter to members of the U.S. Congress announcing the agency’s intention to remove a group of Russian corporations from the List of Specially Designated and Blocked Persons List (SDN List) that OFAC maintains. As a general matter, U.S. individuals and entities are prohibited from engaging in any transaction with an SDN.

Then, on December 20, OFAC released its settlement agreement with Zoltek Companies, Inc. (Zoltek) for violations of the Belarus Sanctions Regulations. According to OFAC, the violations consisted of at least 26 transactions with an SDN.

These actions are quite different. But as described below, each includes very useful guidance about OFAC’s current view of sanctions compliance best practices.
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  • Penalties imposed for violations of U.S. sanctions on Russia and Ukraine
  • Violations identified during pre-acquisition due diligence on contractor
  • Denied persons screening was conducted but missed prohibited parties

In late November 2018, the U.S. Treasury Department, Office of Foreign Assets Control (OFAC) announced that Cobham Holdings, Inc. agreed to pay $87,507 to settle violations of U.S. sanctions on Ukraine and Russia.

Violations Identified During Pre-acquisition Due Diligence

According to OFAC, the violations were committed by Cobham’s former subsidiary, Metelics, prior to the sale of Metelics to MACOM. It was MACOM that identified the violations during due diligence related to its acquisition of Metelics. And it was presumably MACOM that required Cobham to make the voluntary disclosure to OFAC that led to the penalty in this matter.

The penalty is small by recent OFAC standards. (For example, it is about 620 times less than Societe Generale paid to OFAC as part of its global settlement of sanctions violations.)

But as a cautionary tale, the Cobham matter is important to any exporter.


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On November 7, 2018, Global Trade Magazine republished a blog post that I wrote discussing recent changes to U.S. law that further restrict trade with individuals and entities in Russia. The changes further complicate an already-difficult situation for businesses working in and with the country.

You may access the original September 27 blog post on

  • Economic sanctions and export restrictions extended
  • Russian investment in United States likely subject to heightened scrutiny
  • Diligence on Russia transactions and business partners is essential to ensure compliance

Since the beginning of August 2018, the United States has taken multiple actions that will affect U.S. trade with Russia.  The actions cover exports to Russia, doing business with Russian partners, and potential Russian investment in the United States.  These actions have added to the already challenging landscape of conducting business in and with Russia.

Economic Sanctions in Place Since 2014 Are Expanded Again

The United States has maintained targeted economic sanctions on Russia since 2014.  Most of these sanctions are administered by the U.S. Treasury Department, Office of Foreign Assets Control (OFAC).

These sanctions ensnare many prominent Russian individuals and entities.  They have also ensnared prominent U.S. companies: see our July 2017 blog post on penalties imposed against Exxon for Russia sanctions violations.  For an example of how sanctions have been periodically and consistently extended, see our September 2016 blog post.


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  • FIRRMA would significantly expand CFIUS jurisdiction.
  • Mandatory filing would be required in some cases.
  • Parties that protect and maintain personal information are likely to face more scrutiny.

As we have described in recent blog posts in March 2018, January 2018 and October 2017, a rash of proposed transactions have not survived the Committee on Foreign Investment in the United States (CFIUS) process.  Most notably, as we described here, in March 2018, President Trump announced that he would not allow Singapore-based Broadcom to acquire U.S.-based Qualcomm, a rival chipmaker.

The president made his decision based on the recommendation of CFIUS, the U.S. government’s inter-agency committee that reviews transactions that could result in control of a U.S. business by a foreign person in order to determine if the transaction would have an effect on the national security of the United States.


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I am presenting a Clear Law Institute (CLI) webinar titled, “Hot Topics in U.S. Sanctions.” The United States continues to use economic sanctions and embargoes to limit trade with countries, entities, and individuals that are deemed to pose a threat to U.S. national security. Yet the sanctions maintained by the U.S. government can change quickly.

In a November 10 article published by PaymentsCompliance, I commented on expanded sanctions the United States has imposed against North Korea. These newest sanctions prohibit access to the U.S. financial system for certain entities found to be aiding North Korea. In the article I note that, “the recent U.S. sanctions actions related to North Korea

4th Annual Compliance & Government Investigations Update: Practical Strategies for Responding to Government Investigations and Improving Your Compliance

Join us on Thursday, September 14, as we co-sponsor the 4th Annual Compliance & Government Investigations Update: Practical Strategies for Responding to Government Investigations and Improving Your Compliance with BDO.

This full day seminar will provide practical takeaway tips for preparing for, responding to and resolving a government investigation. Panel discussions filled with experienced counsel and government officials will deliver insight into a comprehensive list of government enforcement and compliance topics.

The afternoon sessions will feature a government contracts focused panel moderated by Todd Overman called Service Contract Act Compliance and Enforcement Trends. Sharing their insight on this informative panel will be Bass, Berry & Sims attorney Richard Arnholt and Aaron Raddock, Director, Government Contracts Advisory Services for BDO.
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