The Treasury’s Financial Crimes Enforcement Network issued a guidance document and an advisory on regulations and illegal activity in convertible virtual currency fields, FinCEN said in a May 9 press release. The advisory aims to help companies identify and report “suspicious activity” related to the exploitation of CVCs for money laundering and sanctions evasions, FinCEN said, including recognizing “red flags.” In the advisory, FinCEN urges companies to screen their customers and business partners against the Office of Foreign Assets Control’s Specially Designated Nationals List and take “appropriate steps” to stop people in sanctioned countries from “trading in digital currency.” Businesses dealing in virtual currencies should have procedures in place to block IP addresses associated with sanctioned entities, disable accounts of holders from sanctioned countries, “install a dedicated Compliance Officer” to oversee compliance with all OFAC sanctions programs and ensure OFAC compliance training for all pertinent personnel, the advisory said.
OFAC sanction activity
The Treasury's Office of Foreign Assets Control sanctioned two companies and two ships for operating in the Venezuelan oil sector, Treasury said in a May 10 press release. As part of the announcement, it said that Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo “determined that persons operating in the defense and security sector of the Venezuelan economy” may be sanctioned.
The Treasury’s Office of Foreign Assets Control removed sanctions on a former Venezuelan government official after he “broke ranks” with the Nicolas Maduro regime last week, OFAC said in a May 7 notice. OFAC said Manuel Ricardo Cristopher Figuera, the director general of Venezuela’s National Intelligence Service, was sanctioned in February as a member of the Venezuelan government. All of Cristopher’s property is now unblocked and transactions with him are allowed, the notice said.
Export Compliance Daily is providing readers with some of the top stories for April 29 -May 3 in case they were missed.
The Treasury’s Office of Foreign Assets Control left out several key components of an effective compliance program in its recent sanctions compliance guide, according to a May 6 report from law firm Paul Hastings. The report said the guide should have included descriptions and instructions for “a confidential reporting process,” an "investigations process,” “disciplinary measures for employees which fail to follow the program” and “an emphasis” on mid-level employees stressing the importance of compliance instead of just senior management. The report said these components “appear in guidance documents in other areas” and "it is not clear why OFAC chose to omit these nuances … but no doubt practitioners will seek further clarification from OFAC in the weeks and months to come.” The guide, published May 6, represented an escalating step in OFAC’s effort to disseminate information about effective compliance programs, potentially allowing the agency to more successfully prosecute compliance cases (see 1905030055). The guide provides details of compliance programs that are “now all but mandatory in OFAC’s opinion,” the report said.
The Treasury's Office of Foreign Assets Control’s recent publication of a sanctions compliance guide is the latest example of OFAC’s long-term effort to show companies what makes an effective compliance program, trade lawyers said. But the effort may also ultimately benefit the Treasury, according to one lawyer, by making it easier for the department to successfully prosecute compliance cases.
The Treasury’s Office of Foreign Assets Control published a 12-page guide on sanctions compliance for U.S. and foreign businesses, detailing what OFAC defines as effective compliance programs and outlining several “root causes” of sanctions violations. The guide, published May 2, delves into the level of compliance that OFAC expects from companies and how best to avoid sanctions violations. The guide covers five categories: management commitment, risk assessment, internal controls, testing and auditing, and training.
The Treasury’s Office of Foreign Assets Control reached a settlement of about $870,000 with a New York-based shipbroking company that OFAC said violated weapons-related sanctions five times. The company, MID-SHIP Group LLC, violated the Weapons of Mass Destruction Proliferators Sanctions Regulations by negotiating contracts among ship owners and charterers worth about $470,000 between February and November 2011, OFAC said May 2. The ships used in the transfers were owned by the Islamic Republic of Iran Shipping Lines (IRISL), which was sanctioned by OFAC in 2008.
The Department of the Treasury is “initiating a renewal of the public certificate securing the www.treasury.gov website,” which includes the Office of Foreign Assets Control’s “sanctions list downloads,” OFAC said in a May 1 technical notice. The certificate is being replaced May 16 at 9 p.m. EDT and will take about three to six hours for the "replacement certificate to be distributed worldwide,” the notice said. “If your application pins or otherwise trusts the serial number of the existing certificate as part your application functionality, you may need to update your configuration to trust the renewed certificate,” OFAC said. Questions should be directed to O_F_A_C@treasury.gov or the tech support hotline at 1-800-540-6322.
Reps. Eliot Engel, D-N.Y., and Michael McCaul, R-Texas, are working on legislation that would strengthen U.S.-imposed sanctions on Russia, they said during a House Foreign Affairs Committee meeting May 1. Engel said they are planning to introduce a bill that will “protect America’s interests, ramp up the targeted sanctions, enhance diplomacy and counter propaganda efforts to meet the Russian threat.” McCaul said he and Engel had breakfast with Secretary of State Mike Pompeo earlier that day and said “there’s no doubt” Pompeo “looks at Russia as a great threat” to the U.S. “I don't think this is a partisan issue,” McCaul said. “I hope we can pass legislation out of this committee.”