OFAC Compliance Guidelines

Five months after Sigal Mandelker, Under Secretary of the US Treasury for Terrorism and Financial Intelligence, presented five of the hallmarks of an effective sanctions compliance program, the Office of Foreign Assets Control (OFAC) has finally published long-awaited guidance for national and international organizations subject to its regulation (the Framework). OFAC is the organization responsible for administering and enforcing US economic and trade sanctions programs, and its inaugural “Framework for OFAC Compliance Commitments” will likely be incorporated into compliance programs for entities worldwide.

The Framework is the most detailed statement to date of OFAC’s views on sanctions compliance best practices. It articulates guidance on the essential components of a sanctions compliance program and describes how OFAC may evaluate these components in resolving investigations and determining the amount of any penalties. The document also includes a brief root cause analysis of some frequent violations of US economic and trade sanctions laws.

Our new client alert covers the guidelines in more detail here.

New DOJ Guidance on Cooperation in False Claims Act Matters

This week, the Civil Division of the U.S. Department of Justice released guidelines on cooperation credit in False Claims Act cases. The guidelines strongly emphasize voluntary disclosure, but also provide insight into other actions that could give rise to cooperation credit.

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Anti-Corruption Guidance in Russia: What’s a Company to Do?

complianceAnti-corruption has been a hot topic in Russia for some time. But recently, the Russian government has begun to take creative approaches in the fight against corruption. These initiatives are aimed at raising public awareness of corruption among the general public. What appears to be missing in this outreach is compliance guidance to companies in Russia. The Russian Anti-Corruption Law outlines a compliance framework but lacks specifics. Guidance to U.S. companies may be able to fill the gap. Continue Reading

DOJ Updates Guidance for Corporate Compliance Programs

Department of JusticeThe U.S. Department of Justice (DOJ) announced an update to its earlier guidance on how the DOJ will evaluate the effectiveness of a company’s corporate compliance program. The updated compliance guideline (“Updated Guidance”) is twice the length of the original, and utilizes a more instructive approach, serving as a roadmap to prosecutors, and prudent companies. Although not binding on DOJ prosecutors, the Updated Guidance will certainly impact the way the DOJ evaluates corporate compliance programs during investigations and settlement negotiations.

Read our summary and analysis of the DOJ’s 18-page Updated Guidance, in which we focus on the important lessons a company can learn about the key elements necessary for a robust and effective compliance program.

Ninth Circuit Limits Protections for FCPA Whistleblowers

The Ninth Circuit held that the anti-retaliation provisions of the Sarbanes-Oxley Act do not protect whistleblowers who make internal complaints about potential violations of the Foreign Corrupt Practices Act (FCPA). The court’s ruling limits the remedies available to employees who claim to have suffered adverse employment actions in retaliation for raising FCPA concerns. Continue Reading

South Africa Publishes More About Money Laundering Vulnerabilities

South African Mandela notes with coinsAs noted in a prior blog post, South Africa’s Financial Intelligence Centre (“FIC”) periodically releases financial crime typologies and case studies. Recently it published information about typologies in two different lines of business: (1) casinos and the gambling industry, and (2) the property sector, discussed in this post.

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“Cum-Ex” Tax Scandal Arrives in Strasbourg and Ensnares International Law Firm

It is said that the history of tax avoidance is as long as the history of tax. One of the latest tax avoidance strategies, which has seemingly crossed the line to illegal tax evasion, is that of “Cum-Ex” share trading, sometimes referred to as “dividend stripping.” For the past few years, German authorities have led the investigation into the practice and many other European countries are now embarking upon enquiries of their own. It is estimated that tax losses to European treasuries resulting from “Cum-Ex” schemes run to more than EUR 50 billion (more than USD 60 billion).

The German lawyer purported to have formulated the practice has challenged his indictment by German authorities for aggravated tax evasion in the European Court of Human Rights. Most recently, the administrator for a now-defunct German subsidiary of a foreign bank has filed a suit against an international law firm, seeking damages for incorrectly opining as to the legality of the trades. That action has precipitated another probe by German authorities into whether the law firm in question may be guilty of aiding and abetting tax fraud. It seems likely that other professional advisers will be subject to similar scrutiny. Continue Reading

Travelers Beware – Compelled to Open Your Phone?

Phone Message On Social NetworkRecent rulings conflict on whether police can force individuals to unlock their smartphones. The result depends upon where you are located, with differing rulings from Massachusetts and California. Further, there is an international dimension, illustrated by a recent decision from Israel. In short, as described below, the traveler must beware. Continue Reading

New OFAC CAPTA List Targets Foreign Banks

The Office of Foreign Assets Control (“OFAC”) recently announced the creation of a new list of sanctioned parties specific to foreign financial institutions (“FFIs”). The Correspondent Account of Payable-Through Account Sanctions (the “CAPTA List”) identifies FFIs that are prohibited or severely restricted from opening or maintaining a U.S. correspondent account. Continue Reading

United Arab Emirates Removed From Tax Havens List

The European Union recently removed the United Arab Emirates from the list of Uncooperative Tax Havens. The UAE achieved this goal after enhancing the substance and transparency of its taxation procedures. Tax analysts believe this action will make the UAE an even more attractive destination for foreign investment in future.

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