The second half of 2023 saw eight enforcement actions from the Department of the Treasury’s Office of Foreign Assets Control (“OFAC”). These actions reflect a range of penalties, industries, sanctions programs, conduct, and lessons learned. Below are some highlights from OFAC’s enforcement releases and settlement agreements. Penalties OFAC imposed a total of $984,851,289.90 in penalties … Continue Reading
FinCEN’s beneficial ownership reporting rule takes effect on January 1, 2024. This rule requires certain entities to file with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) reports that identify two categories of individuals: the beneficial owners of the entity, and individuals who have filed an application with specified governmental authorities to … Continue Reading
Following concerns raised by the government of the United Kingdom (“UK”) about freedom of expression and the provision of banking services, the UK’s financial watch dog, the Financial Conduct Authority (“FCA”), recently commenced an investigation into bank account closures. This action follows in the wake of recent reports of banks allegedly closing customer accounts based … Continue Reading
Earlier this year, we published a post on the first Tri-Seal Compliance Note (“First Note”) issued by the United States Department of Justice’s (“DOJ”) National Security Division (“NSD”), the Department of Commerce’s Bureau of Industry and Security (“BIS”), and the Department of the Treasury’s Office of Foreign Assets Control (“OFAC”).[1] When issuing the First Note, … Continue Reading
On January 24, 2023, the Federal Reserve Board (“FRB”) assessed a second-tier[1] civil penalty of $2.3 million against New York-based Popular Bank (or the “Bank”) for unsafe and unsound practices related to six Paycheck Protection Program (“PPP”) loans. According to the FRB, the Bank processed and funded these loans despite detecting significant indicia of fraud … Continue Reading
The investigation and enforcement of potential sanctions violations by crypto exchanges is an area of focus in the US at present. The US Department of the Treasury’s Office of Foreign Assets Control’s (OFAC) recent settlement with Kraken, a global virtual currency exchange, is the most recent OFAC case demonstrating the risks for virtual currency platforms … Continue Reading
We recently shared an alert covering The National Defense Authorization Act for Fiscal Year 2021 (NDAA), which became law on January 1, 2021. The NDAA included significant reforms to the U.S. anti-money laundering and countering the financing of terrorism regime. Division F of the NDAA consists of the Anti-Money Laundering Act of 2020, which includes … Continue Reading
On September 16, 2022, the U.S. Department of the Treasury (“Treasury”) published three reports in response to a March 2022 Executive Order concerning the development of digital assets. The reports address the future of money and payments; implications for consumers, investors, and businesses; and the illicit financing risks of digital assets. Secretary Yellen described the … Continue Reading
On August 8, 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) sanctioned virtual currency mixer Tornado Cash for having laundered more than USD 7 billion worth of virtual currency since its founding in 2019. This includes over USD 455 million worth of stolen virtual currency associated with the Lazarus Group, … Continue Reading
On September 16, 2022, the U.S. Department of Justice (“DoJ”) issued a report on The Role of Law Enforcement in Detecting, Investigating, and Prosecuting Criminal Activity Related to Digital Assets (the “Report”), which will have a significant and wide-ranging impact on the U.S. government’s ability to investigate, prosecute, and disrupt crimes involving digital assets. The … Continue Reading
Thanks to our Summer Associate, Apollo Yong, for his work on this timely blog. On June 6, 2022, the Financial Crimes Enforcement Network (“FinCEN”), a bureau of the U.S. Department of the Treasury, issued an Advanced Notice of Proposed Rulemaking (“ANPRM”), requesting public comment on questions related to FinCEN’s implementation of a no-action letter process.[1] … Continue Reading
The National Defense Authorization Act for Fiscal Year 2021 (“NDAA”) became law early in 2021, after a congressional override of then-President Trump’s veto. Division F of the NDAA consists of the Anti-Money Laundering Act of 2020 (“AMLA”). The AMLA expands numerous Bank Secrecy Act (“BSA”) requirements, and amends the BSA’s definition of “financial institution” to include persons … Continue Reading
President Biden has signed his long-awaited Executive Order on digital assets (“Executive Order”). The Executive Order, titled Ensuring Responsible Development of Digital Assets, does not announce any new regulations for the digital asset industry. Instead, the Executive Order mandates federal agencies to take a unified approach to developing specific policy recommendations for a comprehensive regulatory … Continue Reading
On October 18, 2021, the U.S. Department of the Treasury (“Treasury”) released the findings from its review of the economic sanctions administered and enforced by its Office of Foreign Assets Control (“OFAC”). During the review, Treasury met with individuals representing hundreds of sanctions stakeholders, including Members of Congress and their staffs, the private sector, foreign … Continue Reading
On October 23, 2020, the Board of Governors of the Federal Reserve System (the ‘‘Board’’) and the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) (collectively, the “Agencies”) issued a joint Notice of Proposed Rulemaking (“NPRM”) soliciting public comment on questions relating to potential amendments to Bank Secrecy Act (“BSA”) regulations. The proposed … Continue Reading
On October 19, 2020, the Financial Crimes Enforcement Network (FinCEN) released its assessment of a $60 million civil monetary penalty against the operator of two cryptocurrency “mixers” for violations of the Bank Secrecy Act (“BSA”).[1] The action marks the first effort by FinCEN to target the use of these “mixers” to facilitate money laundering and … Continue Reading
In light of two new US Treasury Department advisories signaling increased oversight of ransomware payments, victim companies and their third-party response teams considering making payments should follow certain due diligence and compliance best practices, write Colin Jennings, Ericka Johnson, Dylan Yépez and Elizabeth Weil Shaw in an article for Law360.… Continue Reading
On September 14, 2020, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued a final rule (“Rule”) requiring the minimum standards for anti-money laundering programs for certain institutions lacking a Federal functional regulator. The Rule applies to banks that lack a Federal functional regulator, including, but not limited to, private banks, privately … Continue Reading
Over the past few months, numerous organizations and agencies—including the intergovernmental Financial Action Task Force, UK Financial Conduct Authority, Dubai Financial Services Authority, and U.S. Financial Crimes Enforcement Network—have stressed the need to preserve the integrity and security of the global payments system during and after the pandemic.… Continue Reading
On March 6, 2020 and in response to an outbreak of coronavirus in Iran, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued guidance pertaining to the manner in which humanitarian goods and assistance may be provided to the people of Iran consistent with U.S. sanctions against Iran. This two-part post … Continue Reading
On April 20, the U.S. Treasury Department said it would consider the Coronavirus pandemic’s impact of potentially reducing corporate resources as a mitigating factor in determining the appropriate response to sanctions violations. Something else was left unsaid.… Continue Reading
Financial institutions and other relevant entities should take notice of two recent developments in anti-money laundering and counter-terrorism financing initiatives. First, European Union member states had to transpose the EU’s Fifth Anti-Money Laundering Directive by January 10, 2020—that is, member states had to implement certain rules into their respective national legislations by that date. Second, … Continue Reading
In an earlier post, here, we examined the Global Magnitsky Human Rights Accountability Act (“GloMag”), which was formally implemented by an Executive Order that declared “serious human rights abuses and corruption globally” as an emergency threat to U.S. interests. The President delegated his authority under GloMag to the Global Targeting Office of the U.S. Department … Continue Reading
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 … Continue Reading
