The Office of Foreign Assets Control will officially remove the International Criminal Court-Related Sanctions Regulations from the Code of Federal Regulations, OFAC said in a notice. The sanctions were originally imposed under the Trump administration but sparked opposition from human rights advocates. President Joe Biden revoked them in April (see 2104020046). The removal takes effect July 6.
OFAC sanction activity
A shift toward list-based sanctions and a rise in federal government compliance expectations are causing increasing challenges for the compliance community, compliance professionals said. At the center of those challenges are the designations imposed by the Treasury Department’s Office of Foreign Assets Control, which is setting a high bar for due diligence by more clearly describing its compliance expectations in settlement agreements.
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The Treasury Department is seeking comments on an information collection relating to the Office of Foreign Assets Control’s Reporting, Procedures and Penalties Regulations, the agency said in a notice. The regulations “pertain to the operation of various economic sanctions programs” administered by OFAC and are used to “monitor compliance” with regulatory requirements. Comments are due July 28.
The two Treasury Department nominees slated to oversee some of the agency’s sanctions work (see 2105260018) said they will prioritize Treasury’s ongoing sanctions review, but declined to commit to any specific actions related to Iran, China or the Nord Stream 2 pipeline. Brian Nelson, the nominee to lead the Terrorism and Financial Intelligence office, and Elizabeth Rosenberg, the nominee to be assistant secretary for terrorist financing, told a Senate panel June 22 they will pursue strong penalties against sanctions evaders but want more information before committing to take specific actions.
The U.S. and several allies announced a host of new sanctions against people and entities responsible for the Belarusian government’s disputed 2020 presidential election and recent human rights abuses. The sanctions, coordinated with Canada, the European Union and the United Kingdom, also target Belarus and President Alexander Lukashenko’s government for the forced diversion of a commercial plane last month to arrest a journalist, the U.S. Treasury and State Department said June 21. Treasury’s Office of Foreign Assets Control also issued a new general license to authorize certain transactions with Belarus and published additional sanctions guidance.
The Office of Foreign Assets Control issued guidance and three new general licenses to expand humanitarian-related exemptions for shipments and activities in sanctioned countries. The licenses apply to Iran, Syria and Venezuela and are accompanied by six new frequently asked questions to “further support the critical work” of humanitarian and COVID-19 aid to people in sanctioned regions. The guidance comes amid criticism from humanitarian groups that U.S. sanctions continue to inadvertently block aid shipments (see 2105260047 and 2105280004).
More countries are using cryptocurrencies to evade U.S. sanctions, a troubling trend that could damage U.S. sanctions regimes if not managed correctly, sanctions experts told Congress this week. The experts said lawmakers should provide more funding to the Treasury Department's Office of Foreign Assets Control to address the issue and should push for more public-private partnerships to help OFAC target cryptocurrency users.
The U.S. District Court for the District of Columbia in a June 13 opinion rejected Russian businessman Oleg Deripaska's challenge to his sanctions listing, granting the Office of Foreign Assets Control's motion for summary judgment. Deripaska, who argued his listing as part of the wave of sanctions in the wake of Russia's annexation of the Crimean Peninsula in 2014 violated multiple procedural and constitutional rights. Deripaska claimed that OFAC violated his Fifth Amendment due process rights by “relying on undisclosed classified information and failing to provide him with adequately detailed unclassified summaries of that information.” Deripaska is a “non-resident alien who lacks sufficient contact with the United States” to bring a due process challenge, Judge Amit Mehta said. Mehta said that “even if the court were to consider Deripaska’s due process claim on the merits, it would reject it” because the International Emergency Economic Powers Act explicitly says that OFAC can rely on classified information in its determinations.
Jessica Johanna Oseguera Gonzalez, a dual U.S.-Mexico citizen and daughter of the leader of Mexican drug trafficking group Cartel de Jalisco Nueva Generacion, was sentenced to 30 months in prison for violating the Foreign Narcotics Kingpin Designation Act, the Department of Justice said in a June 11 news release. Oseguera Gonzalez “engaged in financial dealings” with six Mexican companies that had been designated by the Treasury Department's Office of Foreign Assets Control. She owned two OFAC-designated companies, J&P Advertising and JJGON S.P.R., and was a high-ranking officer at four other listed businesses. Oseguera Gonzalez's father, CJNG leader Nemesio Ruben Oseguera Cervantes, and her uncle, Abigael Gonzalez Valencia, the leader of the Los Cuinis cartel, also were sanctioned by OFAC.