Two Iranian businessmen sanctioned by the U.S. said they were illegally targeted by the Office of Foreign Assets Control and asked the U.S. District Court for the Central District of California to vacate their designations. Behzad Ferdows and Mehrzad Ferdows, residents of Germany and Iran, said in a Nov. 5 lawsuit that OFAC violated “constitutional norms,” statutory requirements and failed to follow due process when the agency sanctioned both men in September.
OFAC sanction activity
Three U.S. companies said they may have violated U.S. sanctions or export controls related to overseas sales and illegally processed payments, according to their most recent filings with the Securities and Exchange Commission. The potential violations include disclosures of dealings with sanctioned businesses, including sales to Iran.
The Office of Foreign Assets Control issued a sanctions advisory and guidance on Oct. 30 about the risks associated with dealing in high-value works of art. The guidance outlines which art markets may present sanctions risks and urges galleries, museums, agents, auctioneers and collectors to maintain a compliance program. OFAC also stressed that transactions involving expensive artwork are “not categorically exempt” from the Berman Amendment to the International Emergency Economic Powers Act and the Trading With the Enemy Act. The amendment “generally exempts” imports of art from IEEPA regulations, but OFAC said it does “not interpret this exemption to allow blocked persons or their facilitators to evade sanctions by exchanging financial assets such as cash, gold, or cryptocurrency for high-value artwork or vice versa.” OFAC said it will apply both IEEPA and TWEA sanctions on any art-related dealing involving a blocked person “to the extent the artwork functions primarily as an investment asset or medium of exchange.”
The agency responsible for U.S. financial sanctions lost a record number of employees last year, a trend former officials and industry lawyers say has led to longer processing times and an influx of new officials.
The Office of Foreign Assets Control amended and reissued its Yemen Sanctions regulations to include more guidance, general licenses and statements of licensing policy, OFAC said in a final rule released Oct. 28. The rule, which takes effect Oct. 29, provides a more “comprehensive” set of regulations aimed to “provide further guidance to the public.” The rule mainly adds clarifications, new definitions and specifies when certain transactions are authorized by general licenses. New general licenses now included in the regulations authorize certain transactions relating to “investment and reinvestment of certain funds, payments for legal services from funds originating outside the United States, and official activities of international organizations,” OFAC said.
The Office of Foreign Assets Control sanctioned eight people, 11 entities and two vessels for operating in Iran’s oil sector and supporting the country’s Islamic Revolutionary Guard Corps-Qods Force, OFAC said Oct. 26. OFAC also issued an updated Iran-related general license and amended six frequently asked questions.
The Office of Foreign Assets Control announced a range of sanctions Oct. 22, designating Hizballah officials, the Iranian ambassador to Iraq and various Iranian entities for interfering in U.S. elections.
The Office of Foreign Assets Control sanctioned a Russian government research institution behind “destructive malware” that targets industrial safety systems, OFAC said Oct. 23. The designation targeted the State Research Center of the Russian Federation FGUP Central Scientific Research Institute of Chemistry and Mechanics, which was responsible for building tools that led to a Triton malware attack, OFAC said. The institution was sanctioned under the Countering America’s Adversaries Through Sanctions Act.
The Office of Foreign Assets Control amended the Cuban Assets Control Regulations to further deny the Cuban government’s access to remittance-related funds, OFAC said in a final rule released Oct. 23. The rule amends the scope of certain general licenses to remove “remittance-related general authorizations” involving entities on the Cuba Restricted List, OFAC said. The change will limit those agencies’ access to remittances, “including in their role as intermediaries or in their receipt of fees or commissions from processing remittance transactions.” The rule will take effect Nov. 27. The changes follow a set of new Cuba sanctions and restrictions announced by OFAC in September that created the Cuba Restricted List, placing restrictions on lodging, research and other activities (see 2009230029).
Berkshire Hathaway will pay $4.1 million after its subsidiary illegally exported more than 140 shipments of cutting tools to Iran, the Office of Foreign Assets Control said in an Oct. 20 notice. Iscar Kesici Takim Ticareti ve Imalati Limited Sirket (Iscar Turkey), Berkshire’s Turkish subsidiary, hid the exports from its parent company, which resulted in more than $350,000 worth of orders going to Iranian end-users. Along with the fine, Berkshire committed to a range of sanctions compliance procedures in a settlement agreement with OFAC and will annually certify for the next five years that it is meeting its compliance obligations.