June 4, 2019: New CACR takes away group people to people travel, cruises to Cuba

June 5, 2019, 6:20 am

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On Tuesday, OFAC issued amended Cuban Asset Control Regulations (CACR), which ends group people-to-people travel. And BIS (part of the Commerce Department) amended the Export Administration Regulations (EAR) to end exports of a number of types of ships and aircraft which previously were eligible to be licensed. OFAC also issued an updated Cuba FAQ document and a Fact Sheet.

And there was a veritable slew of press statements – here’s Treasury’s:

PRESS RELEASES

Treasury and Commerce Implement Changes to Cuba Sanctions Rules

June 4, 2019

WASHINGTON – Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) unveiled amendments to the Cuban Assets Control Regulations (CACR) to further implement the President’s foreign policy on Cuba. These amendments complement changes to the Department of Commerce’s Bureau of Industry and Security (BIS) Export Administration Regulations (EAR), which Commerce is also unveiling today. These regulatory changes were announced on April 17, 2019 and include restrictions on non-family travel to Cuba.

“Cuba continues to play a destabilizing role in the Western Hemisphere, providing a communist foothold in the region and propping up U.S. adversaries in places like Venezuela and Nicaragua by fomenting instability, undermining the rule of law, and suppressing democratic processes,” said Treasury Secretary Steven Mnuchin. “This Administration has made a strategic decision to reverse the loosening of sanctions and other restrictions on the Cuban regime. These actions will help to keep U.S. dollars out of the hands of Cuban military, intelligence, and security services.”

These actions mark a continued commitment towards implementing the National Security Presidential Memorandum signed by the President on June 16, 2017 titled “Strengthening the Policy of the United States Toward Cuba.” These policies continue to work to channel economic activities away from the Cuban military, intelligence, and security services. The Treasury changes will take effect on June 5, 2019 when the regulations are published in the Federal Register.

For the Treasury regulations, which can be found at 31 Code of Federal Regulations (CFR) part 515, see here. For the Commerce regulations, which can be found at 15 CFR parts 730-774, see here. Major elements of the changes in the revised regulations include:

ENDING GROUP PEOPLE-TO-PEOPLE TRAVEL

In accordance with the newly announced changes to non-family travel to Cuba, OFAC is amending the regulations to remove the authorization for group people-to-people educational travel. OFAC’s regulatory changes include a “grandfathering” provision, which provides that certain group people-to-people educational travel that previously was authorized will continue to be authorized where the traveler had already completed at least one travel-related transaction (such as purchasing a flight or reserving accommodation) prior to June 5, 2019. Please note that travel-related transactions continue to be permitted by general licenses for certain categories of travel and certain authorized export transactions. For more on authorized travel to Cuba, please click here.

ENDING EXPORTS OF PASSENGER VESSELS, RECREATIONAL VESSELS, AND PRIVATE AIRCRAFT

BIS, in coordination with OFAC, is amending the EAR to make passenger and recreational vessels and private and corporate aircraft ineligible for a license exception and to establish a general policy of denial for license applications involving those vessels and aircraft.

Links:

OFAC Notice

Cuban Asset Control Regulations

FAQ

Fact Sheet

Treasury Press Release

BIS Press Release

State Department Press Guidance

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MAS Insurance AML/CFT Guidelines: Management Oversight, Policies and Training

June 5, 2019, 6:50 am

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4 MANAGEMENT OVERSIGHT, POLICIES AND TRAINING

4.1

relation to AML/CFT should be clearly set out.

The roles and responsibilities of the board of directors and senior management in

4.2 There should be a formalised process in place to keep the board of directors and senior management informed regularly of compliance and risk management efforts, audit reports, identified compliance and risk management deficiencies, and corrective actions taken in relation to AML/CFT. Examples of such reports may include statistics on the number of Suspicious Transaction Reports (“STRs”) filed, sanctions hits, outstanding transaction monitoring alerts and/or sanctions alerts including aging reports and resource issues.

4.3 Senior management are reminded to take prompt corrective actions to ensure the proper and timely remediation of deficiencies in AML/CFT controls and risk management.

4.4 There should be adequate processes in place for updating senior management and any other relevant personnel of AML/CFT-related updates issued by the Authority or other relevant authorities in Singapore. There should also be a designated employee (e.g. Head of Compliance) responsible for providing such updates to management and other relevant personnel.

4.5 There should be a clear and detailed set of documented AML/CFT policies and procedures in place that incorporate, at a minimum, the following elements:

(a) Customer due diligence and screening procedures;

(b) Documentation of screening results;

(c) Assessment, escalation and reporting of suspicious transactions; and

(d) Frequency and recipients of AML/CFT-related training.

4.6 AML/CFT policies and procedures should be reviewed regularly by the board of directors and/or senior management. At a minimum, these policies should be reviewed whenever there are changes in regulations or if there is a significant change in the insurer’s business strategies.

4.7 Regular AML/CFT-related training10 should be conducted for the board of directors, employees and agents (where applicable) of the insurer. Such training may take the form of seminars, e-learning modules, etc.

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Treasury Department Cuba Sanctions Changes Fact Sheet

June 5, 2019, 7:25 am

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Press Release: June 4, 2019

Contact: Treasury Public Affairs, (202) 622-2960

Treasury and Commerce Implement Changes to Cuba

Sanctions Rules

WASHINGTON – Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) unveiled amendments to the Cuban Assets Control Regulations (CACR) to further implement the President’s foreign policy on Cuba. These amendments complement changes to the Department of Commerce’s Bureau of Industry and Security (BIS) Export Administration Regulations (EAR), which Commerce is also unveiling today. These regulatory changes were announced on April 17, 2019 and include restrictions on non-family travel to Cuba.

“Cuba continues to play a destabilizing role in the Western Hemisphere, providing a communist foothold in the region and propping up U.S. adversaries in places like Venezuela and Nicaragua by fomenting instability, undermining the rule of law, and suppressing democratic processes,” said Treasury Secretary Steven Mnuchin. “This Administration has made a strategic decision to reverse the loosening of sanctions and other restrictions on the Cuban regime. These actions will help to keep U.S. dollars out of the hands of Cuban military, intelligence, and security services.”

These actions mark a continued commitment towards implementing the National Security Presidential Memorandum signed by the President on June 16, 2017 titled “Strengthening the Policy of the United States Toward Cuba.” These policies continue to work to channel economic activities away from the Cuban military, intelligence, and security services. The Treasury changes will take effect on June 5, 2019 when the regulations are published in the Federal Register.

For the Treasury regulations, which can be found at 31 Code of Federal Regulations (CFR) part 515, see here. For the Commerce regulations, which can be found at 15 CFR parts 730-774, see here. Major elements of the changes in the revised regulations include :

Ending Group People-to-People Travel

 In accordance with the newly announced changes to non-family travel to Cuba, OFAC is amending the regulations to remove the authorization for group people- to-people educational travel. OFAC’s regulatory changes include a “grandfathering” provision, which provides that certain group people-to-people educational travel that previously was authorized will continue to be authorized where the traveler had already completed at least one travel-related transaction (such as purchasing a flight or reserving accommodation) prior to June 5, 2019. Please note that travel-related transactions continue to be permitted by general licenses for certain categories of travel and certain authorized export transactions. For more on authorized travel to Cuba, please see below.

Ending Exports of Passenger Vessels, Recreational Vessels, and Private Aircraft

 BIS, in coordination with OFAC, is amending the EAR to make passenger and recreational vessels and private and corporate aircraft ineligible for a license exception and to establish a general policy of denial for license applications involving those vessels and aircraft.

Link:

Fact Sheet

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MAS Insurance AML/CFT Guidelines: Customer Due Diligence and Screening Procedures

June 6, 2019, 6:50 am

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5 CUSTOMER DUE DILIGENCE AND SCREENING PROCEDURES

5.1 Screening of customers11 should be carried out against relevant ML/TF information sources, which include designated names of individuals and/or entities within:

(a) the lists and information provided by the Authority or other relevant authorities in Singapore in relation to ML/TF risks;

(b) the First Schedule of the TSOFA; and

(c) the MAS TFS Regulations.

5.2 In the context of direct insurance business, the screening of customers should include the screening of policy owners, insureds and claimants. In cases where an insurer has assessed the policy owner or insured to be of a higher ML/TF risk, the insurer should also screen the substantial shareholders (direct and indirect), beneficial owners, natural persons appointed to act on behalf of the customer and directors, if any, of the policy owner or insured.

5.3 In the context of reinsurance business, the screening of customers should include the screening of cedants and claimants12. Underlying insureds should also be screened in cases where they are made known to the reinsurers. In cases where a reinsurer has assessed the cedant or underlying insured to be of a higher ML/TF risk, the reinsurer should also screen the substantial shareholders (direct and indirect), beneficial owners and directors, if any, of the cedant or underlying insured.

5.4 Screening of customers should be conducted at the following points in time:

(a) before establishing business relations for new customers, otherwise as soon as reasonably practicable thereafter;

(b) prior to renewing business relations with existing customers;

(c) on a regular basis after the establishment of business relations13;

(d) when there are changes made to the lists14 mentioned in paragraph 5.1 above;

and

(e) before making claim payments to claimants15.

5.5 For the purposes of screening, the insurer should minimally, either:

(a) subscribe to a commercial sanctions database; or

(b) maintain an internal database containing the names of designated individuals

and entities.

5.6 The screening database(s) (i.e. commercial sanctions database and/or internally-

maintained database) and procedures adopted by an insurer should be effective in identifying individuals and entities with adverse information, as well as designated individuals and entities as defined in the First Schedule of the TSOFA and the MAS TFS Regulations, or as informed by the relevant authorities in Singapore.

5.7 In view of system limitations in screening capability, some insurers may not be able to effectively detect designated individuals or entities if they were to perform screening based on a full/exact match logic instead of a partial/fuzzy16 match logic for name searches. A full/exact name match for screening should not be used, as this will likely result in missed sanctions or adverse comments hits. In addition, the screening filters used by the insurer should not be limiting17 and should take into account the various permutations of a person’s first and last names.

5.8 Insurers are reminded that where screening results in a positive hit against the lists mentioned in paragraph 5.1, an insurer shall freeze without delay and without prior notice, the funds or other assets of designated persons and entities that it has control over, so as to comply with applicable laws and regulations in Singapore. This would include both the TSOFA and the MAS TFS Regulations relating to sanctions and freezing of assets of persons. Any such assets shall be reported promptly to the relevant authorities and an STR shall be filed.

5.9 Insurers should also have in place screening procedures when hiring employees, officers18 and agents19, and when establishing business relationships with offshore intermediaries. This should include, where applicable:

6

(a) background checks with past employers;

(b) credit history checks;

(c) screening against ML/TF information sources; and

(d) bankruptcy searches.

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EU to update dual use goods regime

June 6, 2019, 7:35 am

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Dual-use goods: Council agrees negotiating mandate

The EU wants to modernise the current EU regime for the control of exports, transfer, brokering, technical assistance and transit of dual-use items. The objective is to further strengthen the non-proliferation of weapons of mass destruction and their means of delivery, regional peace, security and stability as well as respect for human rights and international humanitarian law.

EU ambassadors today agreed the Council’s negotiating position on a proposed recast of the regulation setting up a regime for the controls of exports, brokering, technical assistance, transit and transfer of dual-use items. On the basis of this mandate, the Council Presidency will start negotiations with the European Parliament.

The new rules will introduce a number of changes to the EU export control system of dual-use items to adapt it to the changing technological, economic and political circumstances. They will also simplify and improve the current rules and optimise the EU licensing architecture.

In particular, new provisions include:

further harmonising licensing processes, through the introduction of new general export authorisations (EU GEAs), which are authorisations for exports to certain countries of destination available to all exporters who respect the conditions;

harmonisation of the control of supplying the technical assistance related to sensitive items

a new mention of cyber surveillance items highlighting that the competent authorities have the possibility to control such items using the current regulation as for all non-listed dual-use items that could be used for directing or committing serious violation of human rights.

Mandate for negotiations with the European Parliament on the proposal for a regulation of the European Parliament and of the Council setting up a Union regime for the control of exports, brokering, technical assistance, transit and transfer of dual-use items (recast)

Background

Under international commitments, EU member states need to have domestic controls to prevent the proliferation of nuclear, chemical or biological weapons and their means of delivery. This includes controls over dual-use items, that is related materials, equipment and technology for export which can be used for both civilian and military purposes, including the purposes mentioned above.

To this end, the EU adopted in 2009 a regulation setting up a regime for the controls of exports, brokering, technical assistance, transit and transfer of dual-use items.

To adapt to the rapidly changing technological, economic and political circumstances the Commission presented a proposal in September 2016 to update and expand the existing rules.

Visit the website

Link:

EU Notice

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OFSI publishes post-Brexit Russia sanctions guidance

June 6, 2019, 7:50 am

≫ Next: June 6, 2019: OFAC amends 3 Venezuela General Licenses, issues FAQ

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Today, OFSI (part of HM Treasury) posted a new short document (4 pages including the cover image) about what sanctions on Russia will look like after the UK exits the European Union.

There are sections on asset freezes, transferable securities or money-market instruments (listing specific restricted firms), loan and credit arrangements, and Crimea-related investments. (If it cut and pasted better, I would post it, but…).

Link:

OFSI guidance

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June 6, 2019: OFAC amends 3 Venezuela General Licenses, issues FAQ

June 7, 2019, 6:15 am

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On Thursday, OFAC issued amended versions of Venezuela General Licenses 7, 8 and 13. General Licenses 8 and 13 were extended through July 27th, while section a of General License 7 “automatically renews on the first day of each month, and is valued for a period of 18 months from the effective date of General License No. 7B or the date of any subsequent renewal of General License No. 7B, whichever is later.”

Mr. Watchlist does not understand this – if it is valid for 18 months, why does it need to renew each month?

Also, the authorization in section b said it is valid through April 28th, which has already passed. Was this a mistake, or did they mean 2020 (or some other date)?

OFAC also issued a single new, unrelated FAQ:

672. Can I export or reexport diluents to Venezuela?

No. Diluents (including, for example, crude oil and naphtha) play a key role in the transportation and exportation of Venezuelan petroleum, a primary source of revenue for the illegitimate and corrupt Maduro regime, which the United States seeks to restrict further. OFAC is amending General Licenses (GLs) 7A, 8, and 13 effective as of June 6, 2019, to restrict U.S. persons engaging in transactions and activities authorized by those GLs from exporting or reexporting diluents, directly or indirectly, to Venezuela, or from engaging in transactions or activities related thereto.

Absent authorization from OFAC, all U.S. persons continue to be prohibited from engaging in any dealings with Petróleos de Venezuela, S.A. (PdVSA), or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest. In addition, non-U.S. persons could be subject to designation pursuant to Executive Order 13850, as amended, for operating within the oil sector of the Venezuelan economy, or for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of PdVSA, including the exportation or reexportation of diluents to PdVSA.

Given PdVSA’s role as Venezuela’s state-owned oil company, exports or reexports of diluents to Venezuela likely include a direct or indirect interest of PdVSA. As a result, persons directly or indirectly exporting or reexporting diluents to Venezuela should exercise enhanced due diligence to verify the ultimate end user and ensure that the transaction does not involve a direct or indirect interest of a sanctioned person, including PdVSA, even if the sanctioned person is not identified as a participant in the transaction. [06-06-2019]

Links:

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MAS Insurance AML/CFT Guidelines: Record Keeping and Retention

June 7, 2019, 6:55 am

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6 RECORD KEEPING AND DOCUMENTATION

6.1 There should be adequate documentation by the insurer for the basis of clearing or dismissing hits arising from its screening procedures (i.e. false positive hits). As a good practice, additional parameters such as date of birth and nationality should minimally be used to establish and dismiss false hits.

6.2 There should be documentation and maintenance of proper records by the insurer as to when screening was performed, the results of the screening and the assessment of screening results for all policies.

6.3 A record of all transactions referred to the Suspicious Transaction Reporting Office (“STRO”) should be maintained by an insurer, including the relevant internal findings and analysis.

6.4 In cases where an insurer maintains an internal database containing the list of designated individuals and entities for the purpose of screening, there should be clear documentation of when the internal database was most recently updated, as well as of the name of the person who carried out the update.

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June 7, 2019: OFAC sanctions Iranian petrochemical companies

June 10, 2019, 6:10 am

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On Friday, OFAC added the following entities to the Iran and non-proliferation of weapons one mass destruction (NPWMD) sanctions programs:

ARVAND PETROCHEMICAL COMPANY, East 9th Floor, Building No. 46, Karimkhan Zand Boulevard, Near by Ansar Bank, Hafte-E-Tir Square, Tehran 1584893117, Iran; Site 3, Mahshahr 1584851181, Iran; Website http://www.arvandpvc.ir; Additional Sanctions Information – Subject to Secondary Sanctions; Business Registration Number 6494 (Iran) [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

ATLAS OCEAN AND PETROCHEMICAL (AOPC), Dubai Airport Free Zone, United Arab Emirates [NPWMD] (Linked To: ILAM PETROCHEMICAL COMPANY).

BANDAR IMAM ABNIROO PETROCHEMICAL COMPANY, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

BANDAR IMAM BESPARAN PETROCHEMICAL COMPANY, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

BANDAR IMAM FARAVARESH PETROCHEMICAL COMPANY (a.k.a. FARAVARESH BANDAR IMAM COMPANY), Bandar Imam Petrochemical Complex, Bandar Imam Khomeini, Khuzestan, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

BANDAR IMAM KHARAZMI PETROCHEMICAL COMPANY, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

BANDAR IMAM KIMIYA PETROCHEMICAL COMPANY, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

BROOJEN PETROCHEMICAL COMPANY (a.k.a. BROUJEN PETROCHEMICAL COMPANY), About 8 km southwest of Borujen City, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] (Linked To: IRANIAN INVESTMENT PETROCHEMICAL GROUP COMPANY; Linked To: DAH DASHT PETROCHEMICAL INDUSTRIES; Linked To: MODABBERAN EQTESAD COMPANY).

DAH DASHT PETROCHEMICAL INDUSTRIES (a.k.a. DAHDASHT PETROCHEMICAL INDUSTRIES; a.k.a. DEHDASHT PETROCHEMICAL INDUSTRIES CO.), Afrigha Boulevard, Below the JahanKodak, No. 9th Street, Petrochemical Trading Building, 7/5000 5th floor, Unit 21, Tehran, Iran; Website http://www.dpi-co.ir; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] (Linked To: IRANIAN INVESTMENT PETROCHEMICAL GROUP COMPANY).

FAJR PETROCHEMICAL COMPANY, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

GACHSARAN POLYMER INDUSTRIES (a.k.a. GACHSARAN PETROCHEMICAL COMPANY), Shahid Vahid Dastgerdi Street, Naseri St., Kian St. 11th Floor Unit 3, Tehran, Iran; Website http://www.gpetroc.ir; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] (Linked To: IRANIAN INVESTMENT PETROCHEMICAL GROUP COMPANY).

HEMMAT PETROCHEMICAL COMPANY, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

HENGAM PETROCHEMICAL COMPANY (a.k.a. HENGAM PETROCHEMICAL CO), 4th Floor, No 22, 16th Avenue, Khlid Islomboli Street, Tehran 1513643911, Iran; 5th Street, Ahmed Ghasir Street, Khaled Eslamboli Avenue 22, Tehran, Iran; Additional Sanctions Information – Subject to Secondary Sanctions; Registration Number 1924 (Iran) [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

HORMOZ UREA FERTILIZER COMPANY, Iran; Website http://www.hormoz-fc.com; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

ILAM PETROCHEMICAL COMPANY (a.k.a. ILAM PETROCHEMICAL; a.k.a. ILAM PETROCHEMICAL CO; a.k.a. ILAM PETROCHEMICAL INDUSTRIES), Afar Blvd – Below Shahid Hemmat Bridge – Ninth Gandhi Side – Building No. 2 Petrochemical Company – First Floor, Tehran, Iran; Ilam – Chawar – Ilam Petrochemical Complex, Iran; Website http://www.ilampetro.com; Additional Sanctions Information – Subject to Secondary Sanctions; Registration Number 253861 (Iran) [NPWMD] (Linked To: IRANIAN INVESTMENT PETROCHEMICAL GROUP COMPANY).

IRANIAN INVESTMENT PETROCHEMICAL GROUP COMPANY (a.k.a. IRANIAN PETROCHEMICAL INVESTMENT GROUP COMPANY), Iran; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

IRANIAN PETROCHEMICAL INVESTMENT DEVELOPMENT MANAGEMENT COMPANY, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

KAROUN PETROCHEMICAL COMPANY (a.k.a. KAROON PETROCHEMICAL; a.k.a. KAROON PETROCHEMICAL CO; a.k.a. KRNPC), No 17, Shahid Khalilzadeh Ally, Vanak Square, Valiasr Street, Tehran 1965754351, Iran; Block 6, Petrochemical Zone Site 2, Special Economic Zone, Imam Khomeini Port, Mahshahr, Tehran 1965754351, Iran; Site 2, Central Office Address, Special Industrial Zone, Mahshahr, Khuzestan, Iran; Site 2, Karoon Petrochemical Complex 6358159385, Iran; P.O. Box 1969754351, Tehran, Iran; Website http://www.krnpc.com; Additional Sanctions Information – Subject to Secondary Sanctions; Registration Number 9645 (Iran) [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

KHOUZESTAN PETROCHEMICAL COMPANY, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

LORDEGAN UREA FERTILIZER COMPANY (a.k.a. KODE SHIMIYAIE OREH LORDEGAN; a.k.a. LORDEGAN PETROCHEMICAL CO.; a.k.a. LORDEGAN UREA FERTILIZER CO.), No. 48, Saadat Abad, Farahzadi Boulevard, Nakhlestan Street, Golestan Alley-I, Tehran 1517769513, Iran; 3rd Floor, No. 24, Kafi Abadi Street, Pesyan Street, Moghadas Ardebili Avenue, Zaferanieh, Tehran 1987957553, Iran; Beginning of Kashan Boulevard, Second Floor, No. 2, Shahrekord, Iran; P.O. Box 1517769513, Tehran, Iran; Website http://www.lordegan.co; Additional Sanctions Information – Subject to Secondary Sanctions; Registration ID 7603 (Iran) [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

MODABBERAN EQTESAD COMPANY (a.k.a. MODABERAN EGHTESAD), Iran; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

NAGHMEH FZE (a.k.a. NAGHMEH COMPANY), United Arab Emirates [NPWMD] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY COMMERCIAL CO.).

NPC ALLIANCE CORPORATION (a.k.a. NPC ALLIANCE PETROCHEMICAL CO), 44th Floor Pbcom Tower Ayala Avenue, Makati 1226, Philippines; 19th Floor Antel 2000 Corporate Center, 121 Valero St, Salcedo Village, Makati City 1226, Philippines; PAFC Industrial Park, Barangay Batangas II, Mariveles, Bataan 2105, Philippines; Website http://www.pnoc-afc.com.ph; alt. Website http://www.npcac.com.ph; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

PAZARGAD NON INDUSTRIAL OPERATION COMPANY (a.k.a. NON-INDUSTRIAL OPERATION SERVICES PAZARGAD; a.k.a. PAZARGAD NON-INDUSTRIAL OPERATIONS CO.), Complex of Petrochemical Projects, Triangular Site, P.O. Box 9531795616, Assaluyeh, Bushehr, Iran; Khalid Islumboli Street, Fifth Alley, No. 22, Second Floor, Tehran 1513643911, Iran; Website http://www.pazargad.org; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

PERSIAN GULF APADANA PETROCHEMICAL COMPANY (a.k.a. APADANA PERSIAN GULF PETROCHEMICAL COMPANY), Unit 14, 3rd Floor, No. 22, 5th Alley, Vozara St (Khalede Eslamboli), District 6, Tehran, Iran; Website http://pgapco.ir; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

PERSIAN GULF BID BOLAND GAS REFINERY COMPANY (a.k.a. PERSIAN GULF BIDBOLAND GAS TREATING COMPANY), Unit 501, Fifth Floor, Block 8, Shahid Beheshti Street, Ahmad Qasir, Bukharest Avenue 1513645311, Iran; Website http://www.pgbidboland.ir; Additional Sanctions Information – Subject to Secondary Sanctions; Registration Number 389019 (Iran) [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

PERSIAN GULF FAJR YADAVARAN GAS REFINERY COMPANY, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

PERSIAN GULF PETROCHEMICAL INDUSTRY CO. (a.k.a. PERSIAN GULF PETROCHEMICAL INDUSTRIES; a.k.a. PERSIAN GULF PETROCHEMICAL INDUSTRIES CO. PLC; a.k.a. PERSIAN GULF PETROCHEMICAL INDUSTRY; a.k.a. PERSIAN GULF PETROCHEMICAL INDUSTRY COMPANY; a.k.a. PGPIC), No. 38, Avenue Karim Khan Zand Blvd., Hafte Tir Square, Tehran 1584893313, Iran; No. 38, Karim Khan Zand Street, Haft Tir Square, Tehran 1584851181, Iran; Website http://www.pgpic.ir; Additional Sanctions Information – Subject to Secondary Sanctions; Business Registration Number 89243 (Iran) [NPWMD] [IFSR] (Linked To: KHATAM OL ANBIA GHARARGAH SAZANDEGI NOOH).

PERSIAN GULF PETROCHEMICAL INDUSTRY COMMERCIAL CO. (a.k.a. PERSIAN GULF PETROCHEMICAL INDUSTRIES COMMERCIAL COMPANY; a.k.a. PERSIAN GULF PETROCHEMICAL INDUSTRY COMMERCIAL; a.k.a. PERSIAN GULF PETROCHEMICAL INDUSTRY-COMMERCIAL COMPANY; a.k.a. PGPICC), No. 38, Karimkhan Zand Boulevard, Haft Tir Square, Tehran 158489331, Iran; P.O. Box 1584851181, Tehran, Iran; Website http://www.pgpicc.com; Additional Sanctions Information – Subject to Secondary Sanctions; Registration Number 476760 (Iran) [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

PETROCHEMICAL INDUSTRIES DEVELOPMENT MANAGEMENT COMPANY (a.k.a. PETROCHEMICAL INDUSTRIES DEVELOPMENT MANAGEMENT; a.k.a. PIDMCO), Karim Khan Zand Street, Haft Tir Square, Tehran, Iran; Website http://www.pidmco.ir; Additional Sanctions Information – Subject to Secondary Sanctions; Registration ID 89247 (Iran) [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

PETROCHEMICAL NON-INDUSTRIAL OPERATIONS & SERVICES CO. (a.k.a. PETROCHEMICAL NON-INDUSTRIAL OPERATIONS AND SERVICES CO.), Iran; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

RAHAVARAN FONOON PETROCHEMICAL COMPANY (a.k.a. “RFPC”), Site 3, Economic Special Zone, Bandar-e Emam Khomeyni, Bandar Mahshar, Khuzestan Province 6356178755, Iran; Floor 7, Bldg No. 46, First of Karim Khan Zand St., & Tir Square, Tehran, Iran; Petrochemical Complex, Pars Special Economic Zone, Assaluye, Bushehr Province, Iran; Website http://www.rfpc.ir; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

URMIA PETROCHEMICAL COMPANY (a.k.a. “UPC”), Iran; Website http://www.urpcc.ir; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

and updated the following existing designations:

BANDAR IMAM PETROCHEMICAL COMPANY, North Kargar Street, Tehran, Iran; Mahshahr, Bandar Imam, Khuzestan Province, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [IRAN]. -to- BANDAR IMAM PETROCHEMICAL COMPANY (a.k.a. BANDAR IMAM PETROCHEMICAL; a.k.a. BANDAR IMAM PETROCHEMICAL CO; a.k.a. BANDAR IMAM PETROCHEMICAL COMPANY LTD; a.k.a. “BIPC”), North Kargar Street, Tehran, Iran; Mahshahr, Bandar Imam, Khuzestan Province, Iran; Imam Khumaini Port, Mahshahr, Khuzestan, Iran; P.O. Box 314, Iran; Additional Sanctions Information – Subject to Secondary Sanctions; National ID No. 6301 (Iran) [IRAN] [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

BOU ALI SINA PETROCHEMICAL COMPANY (a.k.a. BUALI SINA PETROCHEMICAL COMPANY), No. 17, 1st Floor, Daman Afshar St., Vanak Sq., Vali-e-Asr Ave, Tehran 19697, Iran; Petrochemical Special Economic Zone (PETZONE), Iran; Additional Sanctions Information – Subject to Secondary Sanctions [IRAN]. -to- BU ALI SINA PETROCHEMICAL COMPANY (a.k.a. BOU ALI SINA PETROCHEMICAL COMPANY; a.k.a. BUALI SINA PETROCHEMICAL COMPANY), No. 17, 1st Floor, Daman Afshar St., Vanak Sq., Vali-e-Asr Ave, Tehran 19697, Iran; Petrochemical Special Economic Zone (PETZONE), Iran; Additional Sanctions Information – Subject to Secondary Sanctions [IRAN] [NPWMD] [IFSR](Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

MOBIN PETROCHEMICAL COMPANY, South Pars Special Economic Energy Zone, Postal Box: 75391-418, Assaluyeh, Bushehr, Iran; PO Box, Mashhad, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [IRAN]. -to- MOBIN PETROCHEMICAL COMPANY (a.k.a. MOBIN PETROCHEMICAL; a.k.a. “MPC”), Southern Pars Special Economic Energy Zone, Assaluyeh, Bushehr, Iran; No. 50, DamanAfshar Alley, Vanak Square, ValiAsr Street, Tehran 19697-53111, Iran; P.O. Box 75391-418, Bushehr 1969753111, Iran; PO Box, Mashhad, Iran; Website http://www.mobinpc.net; Additional Sanctions Information – Subject to Secondary Sanctions; Registration ID 837 (Iran) [IRAN] [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

NOURI PETROCHEMICAL COMPANY (a.k.a. BORZUYEH PETROCHEMICAL COMPANY; a.k.a. NOURI PETROCHEMICAL COMPLEX), Pars Special Economic Energy Zone, Assaluyeh Port, Bushehr, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [IRAN]. -to- NOURI PETROCHEMICAL COMPANY (f.k.a. BORZOUYEH PETROCHEMICAL COMPANY; a.k.a. BORZUYEH PETROCHEMICAL COMPANY; a.k.a. NOURI PETROCHEMICAL; a.k.a. NOURI PETROCHEMICAL CO; a.k.a. NOURI PETROCHEMICAL COMPANY (LLP); a.k.a. NOURI PETROCHEMICAL COMPLEX), Pars Special Economic Energy Zone, Assaluyeh Port, Bushehr, Iran; Nouri (Borzouyeh) Petrochemical Company, Pars Special Economy Zone, Assalouyeh, Bushehr, Iran; P.O.Box 75391-115, Bushehr, Iran; Pars Special Economy Energy Zone, Assalouyeh Port in the North Side of Persian Gulf, Bushehr, Iran; Website http://www.bpciran.com; Additional Sanctions Information – Subject to Secondary Sanctions; National ID No. 941 (Iran) [IRAN] [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

NPC INTERNATIONAL LIMITED (a.k.a. N P C INTERNATIONAL LTD; a.k.a. NPC INTERNATIONAL COMPANY), 5th Floor NIOC House, 4 Victoria Street, London SW1H 0NE, United Kingdom; Additional Sanctions Information – Subject to Secondary Sanctions; UK Company Number 02696754 (United Kingdom); all offices worldwide [IRAN]. -to- NPC INTERNATIONAL (a.k.a. N P C INTERNATIONAL LTD; a.k.a. NPC INTERNATIONAL COMPANY; a.k.a. NPC INTERNATIONAL LIMITED), 5th Floor NIOC House, 4, Victoria Street, London SW1H 0NE, United Kingdom; NIOC House, 4 Victoria Street, London SW1H 0NE, United Kingdom; 4 Victoria Street, London SW1 H0NB, United Kingdom; Website http://www.nipc.net; Additional Sanctions Information – Subject to Secondary Sanctions; Registration Number 02696754 (United Kingdom); all offices worldwide [IRAN] [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

PARS PETROCHEMICAL COMPANY, Pars Special Economic Energy Zone, PO Box 163-75391, Assaluyeh, Bushehr, Iran; Additional Sanctions Information – Subject to Secondary Sanctions [IRAN]. -to- PARS PETROCHEMICAL COMPANY (a.k.a. ASALOUYEH PETROCHEMICAL COMPANY; a.k.a. PARS PETROCHEMICAL CO.; a.k.a. “P.P.C.”), Pars Special Economic Energy Zone, PO Box 163-75391, Assaluyeh, Bushehr, Iran; P.O. Box 163-7539111370-75118, Iran; Pars Economic Special Zone, Asalouyeh, Bushehr, Iran; Website http://www.parspc.net; Additional Sanctions Information – Subject to Secondary Sanctions [IRAN] [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

SHAHID TONDGOOYAN PETROCHEMICAL COMPANY (a.k.a. SHAHID TONDGUYAN PETROCHEMICAL COMPANY), Petrochemical Special Economic Zone (PETZONE), Iran; Additional Sanctions Information – Subject to Secondary Sanctions [IRAN]. -to- SHAHID TONDGOYAN PETROCHEMICAL COMPANY (a.k.a. SHAHID TANDGOOYAN PETROCHEMICAL CO.; a.k.a. SHAHID TONDGOOYAN PETROCHEMICAL CO.; a.k.a. SHAHID TONDGUYAN PETROCHEMICAL COMPANY; a.k.a. “STPC”), Petrochemical Special Economic Zone (PETZONE), Iran; Valiasr Street, Above Vanak Square, Shahid Daman Afshar, Plain No. 50, Tehran 1969753111, Iran; Khuzestan Imam Khomeini Port Special Economic Zone, 4th Shahid Tondgoyan Petrochemical Company 6356174196, Iran; P.O. Box 333, Iran; Website http://www.stpc.ir; Additional Sanctions Information – Subject to Secondary Sanctions [IRAN] [NPWMD] [IFSR] (Linked To: PERSIAN GULF PETROCHEMICAL INDUSTRY CO.).

And Treasury issued the following press release:

Treasury Sanctions Iran’s Largest Petrochemical Holding Group and Vast Network of Subsidiaries and Sales Agents

June 7, 2019

PGPIC Awards IRGC Construction Firm Hundreds of Millions of Dollars in Contracts

WASHINGTON – The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action today against Iran’s largest and most profitable petrochemical holding group, Persian Gulf Petrochemical Industries Company (PGPIC), for providing financial support to Khatam al-Anbiya Construction Headquarters (Khatam al-Anbiya), the engineering conglomerate of the Islamic Revolutionary Guard Corps (IRGC). In addition to PGPIC, OFAC is designating PGPIC’s vast network of 39 subsidiary petrochemical companies and foreign-based sales agents. PGPIC and its group of subsidiary petrochemical companies hold 40 percent of Iran’s total petrochemical production capacity and are responsible for 50 percent of Iran’s total petrochemical exports.

“By targeting this network we intend to deny funding to key elements of Iran’s petrochemical sector that provide support to the IRGC,” said Treasury Secretary Steven T. Mnuchin. “This action is a warning that we will continue to target holding groups and companies in the petrochemical sector and elsewhere that provide financial lifelines to the IRGC.”

“The IRGC systemically infiltrates critical sectors of the Iranian economy to enrich their coffers, while engaging in a host of other malign activities,” said Under Secretary for Terrorism and Financial Intelligence Sigal Mandelker.

The IRGC and its major holdings, such as the Basij Cooperative Foundation and Khatam al-Anbiya, have a dominant presence in Iran’s commercial and financial sectors, controlling multi-billion dollar businesses and maintaining extensive economic interests in the defense, construction, aviation, oil, banking, metal, automobile and mining industries, controlling multi-billion dollar businesses. The profits from these activities support the IRGC’s full range of nefarious activities, including the proliferation of weapons of mass destruction (WMD) and their means of delivery, support for terrorism, and a variety of human rights abuses, at home and abroad.

In 2018, Iran’s Ministry of Petroleum awarded the IRGC’s Khatam al-Anbiya ten projects in oil and petrochemical industries worth the equivalent of 22 billion dollars, a value four times the official budget of the IRGC. In late 2016, Iran’s Minister of Petroleum asked the IRGC’s Khatam al-Anbiya to increase its investment and presence across Iran’s oil and petrochemical industries.

OVERVIEW OF TODAY’S ACTION

Today’s action targets PGPIC for its connection to Khatam al-Anbiya, the economic arm of the IRGC, along with PGPIC’s network of major petrochemical companies across Iran and its foreign-based subsidiaries and their sales agents. This extensive network of petrochemical companies represents Iran’s most profitable petrochemical holding. Its parent corporation, PGPIC, has awarded major engineering, procurement, and construction contracts to the IRGC’s Khatam al-Anbiya, generating hundreds of millions of dollars for an IRGC economic conglomerate that stretches across Iran’s major industries.

OFAC is designating PGPIC for having provided, or attempted to provide, financial, material, technological, or other support for, or goods or services to or in support of, Khatam al-Anbiya, a person whose property and interests in property are blocked pursuant to Executive Order (E.O.) 13382, which authorizes sanctions on WMD proliferators and their supporters.

The following are Iran-based PGPIC subsidiary petrochemical companies that OFAC is also designating pursuant to E.O. 13382 for being owned or controlled by PGPIC.

Arvand Petrochemical Company

Bandar Imam Abniroo Petrochemical Company

Bandar Imam Besparan Petrochemical Company

Bandar Imam Faravaresh Petrochemical Company

Bandar Imam Kharazmi Petrochemical Company

Bandar Imam Kimiya Petrochemical Company

Bandar Imam Petrochemical Company

Bu Ali Sina Petrochemical Company

Fajr Petrochemical Company

Hengam Petrochemical Company

Hormoz Urea Fertilizer Company

Iranian Investment Petrochemical Group Company

Iranian Petrochemical Investment Development Management Company

Karoun Petrochemical Company

Khouzestan Petrochemical Company

Lordegan Urea Fertilizer Company

Mobin Petrochemical Company

Modabberan Eqtesad Company

Nouri Petrochemical Company

Pars Petrochemical Company

Pazargad Non Industrial Operation Company

Persian Gulf Apadana Petrochemical Company

Persian Gulf Bid Boland Gas Refinery Company

Persian Gulf Petrochemical Industry Commercial Co. (PGPICC)

Persian Gulf Fajr Yadavaran Gas Refinery Company

Petrochemical Industries Development Management Company

Rahavaran Fonoon Petrochemical Company

Shahid Tondgoyan Petrochemical Company

Urmia Petrochemical Company

Hemmat Petrochemical Company

Petrochemical Non-Industrial Operations & Services Co.

OFAC is designating Ilam Petrochemical Company, Gachsaran Polymer Industries, and Dah Dasht Petrochemical Industries pursuant to E.O. 13382 for being owned or controlled by Iranian Investment Petrochemical Group Company, itself being designated for being owned or controlled by PGPIC. Broojen Petrochemical Company also is identified as property in which Iranian Investment Petrochemical Group Company, Dah Dasht Petrochemical Industries, and Modabberan Eqtesad Company have an interest.

Additionally, the UK-based NPC International and Philippines-based and NPC Alliance Corporation also are being designated by OFAC pursuant to E.O. 13382 for being owned or controlled by PGPIC. OFAC is designating two UAE-based entities that have acted as sales agents for PGPIC and its subsidiaries. Atlas Ocean and Petrochemical is being designated for having provided, or attempted to provide, financial, material, technological, or other support for, or goods or services to or in support of, Ilam Petrochemical Company. Naghmeh FZE is being designated for acting for or on behalf of PGPICC

GLOBAL IMPACT

A number of entities designated today export products and have known business ties with companies around the globe. International companies that continue to partner with PGPIC and its designated subsidiaries and sales agents will themselves be exposed to U.S. sanctions. Treasury urges international companies to ensure they are conducting the necessary due diligence to avoid engaging in sanctionable activity with entities that support the Iranian regime’s malign activity.

SANCTIONS IMPLICATIONS

As of November 5, 2018, the purchase, acquisition, sale, transport, or marketing of petrochemical products from Iran is sanctionable pursuant to E.O. 13846. Also, knowingly providing insurance or re-insurance for the transport of Iranian petroleum and petrochemical products is sanctionable. The U.S. government intends to vigorously enforce those sanctions in order to prevent Iran from generating revenue to support its destructive and destabilizing activities around the world.

As a result of today’s action, all property and interests in property of these entities that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons.

In addition, persons that engage in certain transactions with the entities designated today may themselves be exposed to designation. Furthermore, any foreign financial institution that knowingly facilitates a significant financial transaction or provides significant financial services for entities designated in connection with Iran’s proliferation of weapons of mass destruction or any Iranian person on OFAC’s List of Specially Designated Nationals and Blocked Persons could be subject to U.S. correspondent account or payable-through account sanctions.

As did the State Department:

Designations Targeting Iran’s Largest Petrochemical Company for Support to Iran’s Islamic Revolutionary Guard Corps (IRGC)

PRESS STATEMENT

MICHAEL R. POMPEO, SECRETARY OF STATE

/

JUNE 7, 2019

WASHINGTON, DC

Share

Today, the United States expanded our campaign to impose maximum economic pressure on the Iranian regime. The U.S. Treasury designated Iran’s largest petrochemical holding group, Persian Gulf Petrochemical Industries Company (PGPIC), for providing support to Khatam al-Anbiya Construction Headquarters, the UN-designated engineering conglomerate of the Islamic Revolutionary Guard Corps (IRGC). The United States also designated PGPIC’s network of 39 subsidiary petrochemical companies and sales agents. This action will deprive the IRGC of critical revenue.

Our maximum economic pressure is aimed at depriving the Iranian regime of the funding it needs to sustain its expansionist foreign policy. Iran must end its nuclear threats and escalation, stop the testing of advanced ballistic missiles, cease support for terrorist proxies, and halt the arbitrary detention of foreign citizens. The only path forward is for Iran to negotiate a comprehensive deal that addresses these destabilizing behaviors.

Links:

OFAC Notice

Treasury Press Release

State Department Press Release

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HKMA Alert: Fraudulent Bank of Singapore website

June 10, 2019, 6:55 am

≫ Next: MAS Insurance AML/CFT Guidelines: Reporting of Suspicious Transactions

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Press Releases

Fraudulent website related to Bank of Singapore Limited

The Hong Kong Monetary Authority (HKMA) wishes to alert members of the public to a press release issued by Bank of Singapore Limited on fraudulent website, which has been reported to the HKMA. Hyperlink to the press release is available on the HKMA website for ease of reference by members of the public.

Anyone who has provided his or her personal information to the website concerned or has conducted any financial transactions through the website should contact the bank concerned using the contact information provided in the press release, and report to the Police or contact the Cyber Security and Technology Crime Bureau of the Hong Kong Police Force at 2860 5012.

Hong Kong Monetary Authority
22 May 2019

Link:

HKMA Notice

↧

MAS Insurance AML/CFT Guidelines: Reporting of Suspicious Transactions

June 10, 2019, 6:55 am

≫ Next: Slight clarification to Thursday’s OFAC Venezuela changes

≪ Previous: HKMA Alert: Fraudulent Bank of Singapore website

7 REPORTING OF SUSPICIOUS TRANSACTIONS

7.1 Clear guidance should be provided to all officers, employees and agents as to what constitutes a “suspicious transaction” that warrants escalation and reporting.

7.2 There should be well-defined guidelines and procedures in place for escalating, investigating, reporting and acting on suspicious transactions. The channels for reporting suspicious transactions should be clearly specified in writing and communicated to all personnel.

7.3 A clear internal reporting channel should be set up for the escalation of suspicious transaction reports from the officer, employee or agent making the report. The insurer should establish a single reference point (e.g. Chief Executive, Head of Compliance) within the organisation to whom all transactions suspected of being connected to ML/TF activity should be referred to.

7.4 The onus is on the insurer to identify and assess red flag indicators of suspicious transactions. The insurer should determine what constitutes a suspicious transaction which warrants escalation and reporting based on the scale, complexity, and inherent risk of its business. In terms of determining and assessing suspicious activity exhibited by customers, examples of suspicious circumstances that may warrant the filing of an STR may include the following:

(a) where the customer is reluctant, unable or unwilling to provide any information requested by the insurer;

(b) where the customer, without reasonable grounds, decides to withdraw a pending application to establish business relations with the insurer;

(c) where the customer, without reasonable grounds, decides to suddenly terminate existing business relations with the insurer;

(d) abnormal settlement instructions, including payment to apparently unconnected parties; or

(e) frequent changes to the customer’s address or to authorised signatories.

7.5 STRs should be filed on all suspicious transactions and cases. Where an insurer decides not to file an STR for a case that was initially thought to be suspicious, the basis for doing so should be documented, and the decision made by the initial assessor of the case should be raised to a higher authority for review and approval.

7.6 An STR should be filed within 15 business days of the case being referred by the relevant officer, employee or agent, if the insurer has assessed that the matter should be referred to the STRO, unless the circumstances are exceptional or extraordinary. The decision as to whether to refer the matter to the STRO should be regardless of the amount of the transaction, if any.

7.7 STR reporting templates are available on the Commercial Affairs Department’s website. However, insurers are strongly encouraged to use the online system provided by STRO to lodge STRs, as this also enables reporting entities to be kept apprised of STRO’s advisories. In the event that an insurer is of the view that STRO should be informed on an urgent basis, including where a transaction is known to be part of an ongoing investigation by the relevant authorities, the insurer should give initial notification to STRO by telephone or email and follow up with such other means of reporting as STRO may direct.

7.8 Under exceptional circumstances, (e.g. if the online system is down) and the insurer files an STR manually with the STRO (i.e. not through the STRO Online Notices and Reporting Platform (SONAR)), a copy of the report should be extended to the Authority for information.

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Slight clarification to Thursday’s OFAC Venezuela changes

June 10, 2019, 7:05 am

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Mr. Watchlist needs to learn how to read the OFAC notices better… the expiration dates for the 3 update General Licenses had, in fact, not changed (they all expire in late July). All 3 licenses were updated to clarify that diluents (chemicals which can be used to dilute heavy crude oil traveling through pipelines so it is less viscous and therefore flows more freely) are not authorized under the licenses.

BTW, Mr. Watchlist’s beef with the apparent error in General License 7 (where a clause that appears to have expired is still in the License) still stands…

Sorry about that – was trying to get out of town for the weekend. Not an excuse, but an explanation…

↧

HKMA Alert: Fraudulent Credit Suisse website

June 11, 2019, 6:40 am

≫ Next: June 11, 2019: OFAC sanctions Syrian oligarch & his firms

≪ Previous: Slight clarification to Thursday’s OFAC Venezuela changes

Press Releases

Fraudulent website related to Credit Suisse AG

The Hong Kong Monetary Authority (HKMA) wishes to alert members of the public to a press release issued by Credit Suisse AG on fraudulent website, which has been reported to the HKMA. Hyperlink to the press release is available on the HKMA website for ease of reference by members of the public.

Anyone who has provided his or her personal information to the website concerned or has conducted any financial transactions through the website should contact the bank concerned using the contact information provided in the press release, and report to the Police or contact the Cyber Security and Technology Crime Bureau of the Hong Kong Police Force at 2860 5012.

Hong Kong Monetary Authority
29 May 2019

Link:

HKMA Notice

↧

June 11, 2019: OFAC sanctions Syrian oligarch & his firms

June 12, 2019, 6:55 am

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Today, OFAC designated the following persons:

FOZ, Amer (a.k.a. FOZ, Amer Zuhair); DOB 11 Mar 1976; POB Homs, Syria; Gender Male; Passport O6O1O274747 (Syria) (individual) [SYRIA] (Linked To: ASM INTERNATIONAL TRADING, LLC).

FOZ, Husen (a.k.a. FOZ, Hasan; a.k.a. FOZ, Hosn Zuhair; a.k.a. FOZ, Hoson; a.k.a. FOZ, Housen; a.k.a. FOZ, Hussen), Meadows 1, Street 13, Villa 38, Dubai, United Arab Emirates; Adawai Area Rawdet Aleman Bld, 1st Floor, Damascus City, Syria; DOB 25 May 1981; POB Lattakia, Syria; nationality Syria; alt. nationality Saint Kitts and Nevis; citizen Turkey; alt. citizen Syria; Gender Female; Passport U08527769 (Turkey); alt. Passport RE0027450 (Syria); National ID No. 06010274768 (Syria) (individual) [SYRIA] (Linked To: ASM INTERNATIONAL TRADING, LLC).

FOZ, Samer (a.k.a. AL-FOUZ, Samer; a.k.a. FAWAZ, Samer; a.k.a. FAWZ, Samir; a.k.a. FOUZ, Samer; a.k.a. FOZ, Samer Zuhair; a.k.a. FOZ, Samir), Meadows 2, Street 3, Villa 5, Dubai, United Arab Emirates; DOB 20 May 1973; POB Latakia, Syria; nationality Syria; alt. nationality Turkey; alt. nationality Saint Kitts and Nevis; citizen Saint Kitts and Nevis; Gender Male; National ID No. 784197341865828 (Syria) (individual) [SYRIA].

and entities:

AL-MOHAIMEN FOR TRANSPORTING & CONTRACTING (a.k.a. AL MOHAIMEN FOR TRANSPORTATION AND CONTRACTING; a.k.a. AL-MOHAIMEN FOR TRANSPORTING AND CONTRACTING), Lattakia, Syria [SYRIA] (Linked To: AMAN HOLDING COMPANY).

AMAN DAMASCUS JOINT STOCK COMPANY (a.k.a. AMAN DAMASCUS JSC), Damascus, Syria [SYRIA] (Linked To: AMAN HOLDING COMPANY).

AMAN HOLDING COMPANY (a.k.a. AMAN GROUP; a.k.a. AMAN HOLDING GROUP; a.k.a. AMAN HOLDING PRIVATE JSC), Al Shurafa Building Aman Group, Al Moutanabi Street, Lattika, Syria [SYRIA] (Linked To: FOZ, Samer).

ASM INTERNATIONAL TRADING, LLC (a.k.a. ASM INTERNATIONAL GENERAL TRADING COMPANY; a.k.a. ASM INTERNATIONAL GENERAL TRADING LLC), Jumeirah Lake Tower, Cluster 1, Platinum Tower, Office 2405, P.O. Box 36102, Dubai, United Arab Emirates [SYRIA] (Linked To: FOZ, Samer).

BS COMPANY OFFSHORE (a.k.a. B S COMPANY; a.k.a. B.S. COMPANY OFFSHORE; a.k.a. BS COMPANY SAL OFFSHORE), Salame Building, Beit Mery, Lebanon [SYRIA].

FOUR SEASONS DAMASCUS (a.k.a. DAMASCUS FOUR SEASONS; a.k.a. FOUR SEASONS HOTEL DAMASCUS), Shukri Al Quatli Street, P.O. Box 6311, Damascus, Syria [SYRIA] (Linked To: FOZ, Samer).

FOZ FOR TRADING (a.k.a. FOZ TRADING), Syria [SYRIA] (Linked To: AMAN HOLDING COMPANY).

LANA TV, Beirut, Lebanon [SYRIA] (Linked To: FOZ, Samer).

MAINPHARMA (a.k.a. MEENPHARMA), Syria [SYRIA] (Linked To: AMAN HOLDING COMPANY).

MENA CRYSTAL SUGAR COMPANY LIMITED (a.k.a. M.E.N.A. CRYSTAL SUGAR COMPANY; a.k.a. M.E.N.A. SUGAR COMPANY; a.k.a. MENA SUGAR COMPANY), Homs, Syria [SYRIA] (Linked To: AMAN HOLDING COMPANY).

ORIENT CLUB, Al Najmeh Square – Abou Romaaneh 6737, Damascus, Syria [SYRIA] (Linked To: FOZ, Samer).

SILVER PINE (a.k.a. SILVER PINE DMCC), Jumeirah Lake Tower, Cluster 1, Platinum Tower, Office 2405, P.O. Box 36102, Dubai, United Arab Emirates [SYRIA] (Linked To: FOZ, Husen).

SYNERGY SAL OFFSHORE, Azarieh street – Azarieh building, Beirut, Lebanon [SYRIA].

under the Syria sanctions program.

And the Treasury Department explained it all in a press release:

Treasury Designates Syrian Oligarch Samer Foz and His Luxury Reconstruction Business Empire

June 11, 2019

Designations include the Foz family and companies across the Middle East profiting from conflict and the Assad regime’s brutality

WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating 16 individuals and entities associated with an international network benefiting the Assad regime. These designations serve to cut off critical supplies and financiers for the regime’s luxury reconstruction and investment efforts. This action reinforces the United States’ commitment to imposing a financial toll on those supporting Assad’s authoritarian rule, including Syrian oligarch Samer Foz.

“Samer Foz, his relatives, and his business empire have leveraged the atrocities of the Syrian conflict into a profit-generating enterprise. This Syrian oligarch is directly supporting the murderous Assad regime and building luxury developments on land stolen from those fleeing his brutality,” said Undersecretary for Terrorism and Financial Intelligence Sigal Mandelker. “Treasury is committed to holding accountable profiteers who enrich the coffers of the Assad regime while Syrian civilians suffer this man-made humanitarian crisis.”

LUXURY RECONSTRUCTION AND INVESTMENT IN SYRIA

Samer Foz has been profiting heavily from reconstruction efforts in Syria—including through luxury developments on land seized by the Syrian regime from its own people—and has been attempting to enlist foreign investors into Syrian reconstruction projects.

On January 21, 2019, the European Union sanctioned Samer Foz, Aman Damascus, and 14 other individuals and entities for using their ties with the Syrian regime for their own financial benefit, and for helping to finance the regime including through joint ventures formed with regimebacked companies to develop land expropriated from persons displaced by the conflict in Syria. Those persons sanctioned by the EU have been supporting and benefiting from the Assad regime’s brutality, and their reconstruction investments prevent displaced persons from returning to their homes.

In 2012, Assad signed a decree to expel citizens in poorer areas of Damascus from their homes to pave the way for luxury reconstruction projects, including Marota City in the Mazzeh District. To fund and fulfill these contracts, the regime formed joint ventures with private businessmen, including Samer Foz. This tactic—taking over property owned by Syrian citizens and handing the land to wealthy regime insiders to develop in exchange for revenue sharing—has emerged as Assad’s go-to strategy for high-end reconstruction in war-torn Syria. In October 2017, Samer Foz’s company, Aman Holding, entered into one such partnership with the Assad regime when it and state-owned Damascus Cham PJSC formed a company called Aman Damascus, in which Aman Holding has the majority share. Aman Damascus was awarded the rights to build three skyscrapers and five exclusive housing properties in a contract valued at U.S. $312 million.

Samer Foz is the Chairman and General Manager of Aman Holding, which was formerly known as the Aman Group. Aman Holding owns and controls over a dozen companies, all of which benefit Samer Foz personally and ultimately allow him to invest more in Assad’s luxury reconstruction projects. Samer Foz’s Lebanon-based Lana TV, which is also being designated today, has been used to solicit investment in Syria by airing commercials for Marota City.

FOZ FAMILY AND ASM INTERNATIONAL GENERAL TRADING

Samer Foz’s Aman Holding serves as an umbrella for over a dozen different ventures, and in some of these companies, Samer Foz shares ownership and managerial duties with his siblings Amer Foz and Husen Foz. One such venture is UAE-based ASM International General Trading, LLC (ASM International Trading), where Amer Foz is the General Manager, Husen Foz is the Chief Operating Officer, and Samer Foz is the Chief Executive Officer. While many of the Foz family’s ventures are located in Syria, this UAE-based company serves as a means of exploiting the international financial system outside of Syria.

Although much of ASM International Trading’s overt trade is in foodstuff commodities such as grain and sugar, the company also operates in the fields of oilfield services, drilling products, and supplies to the oil and natural gas industry. Additionally, Husen Foz’s company, Silverpine DMCC, is also being designated today. Silverpine is an international trading company that operates out of the ASM International Trading offices.

Facilitating Shipments of Iranian Oil to Syria

The following Lebanonbased entities are being designated for having facilitated shipments of Iranian-origin petroleum to Syria: Synergy SAL (Offshore) and BS Company (Offshore).

Synergy SAL (Offshore) has shipped tens of thousands of metric tons of Iranian oil into Syria in the past year by sea. Some of the vessels used by Synergy SAL (Offshore) to conduct these illicit shipments also appear in the OFAC Advisory to the Maritime Shipping Community.

Additionally, BS Company (Offshore) is one of the largest importers of crude oil into Syria, and has imported hundreds of thousands of metric tons of Iranian light crude oil in the past year using a variety of oil tanker vessels and tanker trucks. These land- and sea-based shipments are destined for Banias Refinery Company, which is identified as meeting the definition of Government of Syria pursuant to E.O. 13582. BS Company (Offshore) is also affiliated with the Qatirji Group. As of September 5, 2018, the Qatirji Group and its co-owner Mohammad Bara Qatirji are subject to U.S. sanctions pursuant to Executive Order 13582.

SAMER FOZ’S SYRIA-BASED ASSETS

Also under the umbrella of Aman Holding—and being designated today—are the following Syria-based entities: Foz for Trading, Al-Mohaimen for Transportation and Contracting, MENA Crystal Sugar, and Mainpharma. Aman Holding’s trading arm conducts international commodities trading with dozens of countries, while its transportation arm facilitates transfers of bulk cargo to Syria by land and sea using a fleet of tanker trucks and vessels. MENA Crystal Sugar is one of the largest sugar refineries in the Middle East, and is located near Homs, Syria. Mainpharma is located near Damascus and is valued at over U.S. $20 million.

ATTEMPTS TO GAIN INFLUENCE IN THE FINANCIAL SECTOR

In an attempt to gain further access, influence, and profit from the financial sector, Samer Foz has been gaining footholds in Syria financial sector, including recent purchases of ownership shares in the Syrian International Islamic Bank (SIIB) and Al Baraka Bank Syria. Samer Foz has also been seeking to establish a financial institution in Syria in partnership with a Russian bank in order to attract Russian investors to Syria.

In addition to trading, banking, construction, and commodities companies, Samer Foz also owns the Four Seasons Damascus and the Orient Club, which are also being designated today.

DESIGNATION BASES AND AUTHORITIES

Samer Foz has materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, Bashar Al-Assad, and is being designated pursuant to E.O. 13573. Samer Foz has also materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the Government of Syria, and is being designated pursuant to E.O. 13582.

Aman Holding Company is owned or controlled by, directly or indirectly, Samer Foz, and is being designated pursuant to E.O. 13573 and E.O. 13582.

ASM International Trading, LLC is owned or controlled by, directly or indirectly, Samer Foz, and is being designated pursuant to E.O. 13573 and E.O. 13582.

Amer Foz has acted or purported to act for or on behalf of, directly or indirectly, ASM International Trading, and is being designated pursuant to E.O. 13573 and E.O. 13582.

Husen Foz has acted or purported to act for or on behalf of, directly or indirectly, ASM International Trading, and is being designated pursuant to E.O. 13573 and E.O. 13582.

Silverpine DMCC is owned or controlled by, directly or indirectly, Husen Foz, and is being designated pursuant to E.O. 13573 and E.O. 13582.

MENA Crystal Sugar Company Limited is owned or controlled by, directly or indirectly, Aman Holding, and is being designated pursuant to E.O. 13573 and E.O. 13582.

MAINPHARMA is owned or controlled by, directly or indirectly, Aman Holding, and is being designated pursuant to E.O. 13573 and E.O. 13582.

Aman Damascus Joint Stock Company is owned or controlled, directly or indirectly, by Aman Holding, and is being designated pursuant to E.O. 13573 and E.O. 13582.

Foz for Trading is owned or controlled by, directly or indirectly, Aman Holding, and is being designated pursuant to E.O. 13573 and E.O. 13582.

AI-Mohaimen for Transportation & Contracting is owned or controlled by, directly or indirectly, Aman Holding, and is being designated pursuant to E.O. 13573 and E.O. 13582.

Orient Club is owned or controlled by, directly or indirectly, Sarner Foz, and is being designated pursuant to E.O. 13573 and E.O. 13582.

Lana TV is owned or controlled by Samer Foz and is being designated pursuant to E.O. 13573 and E.O. 13582.

The Four Seasons Damascus is owned or controlled by, directly or indirectly, Samer Foz, and is being designated pursuant to E.O. 13573 and E.O. 13582.

BS Company (Offshore) has materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, Banias Refinery Company, and is being designated pursuant to E.O. 13582.

Synergy SAL (Offshore) has materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, Banias Refinery Company, and is being designated pursuant to E.O. 13582.

As a result of today’s action, all property and interests in property of these individuals and entities that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons.

Links:

OFAC Notice

Treasury Press Release

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June 12, 2019: OFAC adds 3 to Iran & Counter Terror sanctions

June 13, 2019, 6:45 am

≫ Next: OFAC Enforcement Action: A series of unfortunate events befalls Western Union…

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Yesterday, OFAC designated the following 2 persons:

ABD AL-HAMID AL-ASADI, Makki Kazim (a.k.a. ABDUL HAMEED AL ASADI, Makki Kadhim), Basrah, Iraq; DOB 10 Oct 1957; Additional Sanctions Information – Subject to Secondary Sanctions (individual) [SDGT] [IRGC] [IFSR] (Linked To: ISLAMIC REVOLUTIONARY GUARD CORPS (IRGC)-QODS FORCE).

SALIH AL HASANI, Mohammed Hussein (a.k.a. AL-HUSAYNI, Mohammed Hossein); DOB 01 Jul 1954; Additional Sanctions Information – Subject to Secondary Sanctions; Passport A9298980 (Iraq) (individual) [SDGT] [IFSR] (Linked To: SOUTH WEALTH RESOURCES COMPANY).

and an entity:

SOUTH WEALTH RESOURCES COMPANY (a.k.a. MANABEA THARWAT AL-JANOOB GENERAL TRADING COMPANY, LLC; a.k.a. SHIRKAT MANABI’ THARAWAT AL-JANUB LILTIJARAH AL-‘AMMAH; a.k.a. SOUTH WEALTH RESOURCES LTD.), Al Jadriya District, Baghdad, Iraq; Additional Sanctions Information – Subject to Secondary Sanctions [SDGT] [IRGC] [IFSR] (Linked To: ISLAMIC REVOLUTIONARY GUARD CORPS (IRGC)-QODS FORCE).

under both the Iran sanctions regime and that for counter terrorism.

And the Treasury Department issued the following press release:

PRESS RELEASES

Treasury Targets IRGC-Qods Force Financial Conduit in Iraq for Trafficking Weapons Worth Hundreds of Millions of Dollars

June 12, 2019

WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on an Iraq-based Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) financial conduit, South Wealth Resources Company (SWRC), which has trafficked hundreds of millions of dollars’ worth of weapons to IRGC-QF-backed Iraqi militias. SWRC and its two Iraqi associates, who are also being designated today, have covertly facilitated the IRGC-QF’s access to the Iraqi financial system to evade sanctions. This scheme also served to enrich previously sanctioned Abu Mahdi al-Muhandis, an Iraqi advisor to IRGC-QF Commander Qasem Soleimani, who has run weapons smuggling networks and participated in bombings of Western embassies and attempted assassinations in the region. SWRC and its two associates are being designated as Specially Designated Global Terrorists (SDGTs) pursuant to Executive Order (E.O.) 13224, which targets terrorists and those providing support to terrorists or acts of terrorism.

“Treasury is taking action to shut down Iranian weapons smuggling networks that have been used to arm regional proxies of the IRGC Qods Force in Iraq, while personally enriching regime insiders,” said Treasury Secretary Steven T. Mnuchin. “The Iraqi financial sector and the broader international financial system must harden their defenses against the continued deceptive tactics emanating from Tehran in order to avoid complicity in the IRGC’s ongoing sanctions evasion schemes and other malign activities.”

The IRGC-QF, designated pursuant to E.O. 13224 on October 25, 2007, is a branch of the IRGC responsible for external operations and has provided material support to numerous terrorist groups, including the Taliban, Lebanese Hizballah, HAMAS, and Palestinian Islamic Jihad, making it a key component of Iran’s destabilizing regional activities. The IRGC-QF’s parent organization, the IRGC, was designated pursuant to E.O. 13224 on October 13, 2017, and on April 15, 2019 was designated as a Foreign Terrorist Organization by the Secretary of State.

SOUTH WEALTH RESOURCES COMPANY

The IRGC-QF has used Iraq-based SWRC, also known as Manabea Tharwat al-Janoob General Trading Company, as a front to smuggle hundreds of millions of dollars’ worth of weapons to its proxies inside Iraq, while also generating profit in the form of commission payments for Abu Mahdi al-Muhandis, an OFAC-sanctioned advisor to IRGC-QF commander Qasem Soleimani, and two associates of SWRC who are also being designated today. In addition to facilitating the IRGC-QF’s weapons smuggling into Iraq, SWRC has moved millions of dollars to Iraq for illicit financial activity benefitting the IRGC-QF and its Iraq-based militia groups.

SWRC is being designated today pursuant to E.O. 13224 for assisting in, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, the IRGC-QF.

MAKKI KAZIM ‘ABD AL HAMID AL ASADI AND MUHAMMED HUSSEIN SALIH AL HASANI

OFAC also is designating Makki Kazim ‘Abd Al Hamid Al Asadi (Makki Kazim Al Asadi) and Muhammed Husayn Salih al-Hasani (al-Hasani), two Iraq-based individuals who helped facilitate IRGC-QF shipments and financial operations via SWRC. Both individuals and Abu Mahdi al-Muhandis received commission payments for contracts with SWRC.

Makki Kazim Al Asadi has acted as an intermediary to facilitate IRGC-QF shipments destined for Iraq, and has helped the IRGC-QF access the Iraqi financial system to evade sanctions. Makki Kazim Al Asadi is being designated pursuant to E.O. 13224 for assisting in, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, the IRGC-QF.

Muhammed Hussein Salih Al Hasani is the authorized agent and representative of SWRC, which he registered in Iraq in 2013. He has signed weapons contracts for SWRC.

Al Hasani is being designated pursuant to E.O. 13224 for acting for or on behalf of SWRC.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of these targets that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. OFAC’s regulations generally prohibit all dealings by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of blocked or designated persons.

In addition, persons that engage in certain transactions with the individuals and entities designated today may themselves be exposed to sanctions or subject to an enforcement action. Furthermore, unless an exception applies, any foreign financial institution that knowingly facilitates a significant transactions for any of the individuals or entities designated today could be subject to U.S. sanctions.

Links:

OFAC Notice

Treasury Press Release

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OFAC Enforcement Action: A series of unfortunate events befalls Western Union…

June 14, 2019, 6:20 am

≫ Next: 3 for 1: OFAC announces 3 Cuba-related enforcement actions

≪ Previous: June 12, 2019: OFAC adds 3 to Iran & Counter Terror sanctions

The penalty:

Western Union Financial Services, Inc. Settles Potential Civil Liability for Apparent Violations of the Global Terrorism Sanctions Regulations. Western Union Financial Services, Inc. (“Western Union”), a money services business (MSB) headquartered in Denver, Colorado, has agreed to pay $401,697 to settle its potential civil liability for 4,977 apparent violations of the Global Terrorism Sanctions Regulations, 31 C.F.R. part 594 (GTSR).

OFAC determined that Western Union voluntarily self-disclosed the apparent violations to OFAC, and the apparent violations constitute a non-egregious case. The statutory maximum civil monetary penalty amount for the apparent violations was $1,244,250,000, and the base civil monetary penalty amount for the apparent violations was $637,614.

The facts of the case:

Between December 9, 2010, and March 13, 2015, a bank (“the bank”) in The Gambia was one of Western Union’s principal Master Agents in The Gambia. In or around 2006, the bank established a Sub-Agent relationship with Kairaba Shopping Center (KSC), an entity that was subsequently designated by OFAC pursuant to the Global Terrorism Sanctions Regulations (GTSR) on December 9, 2010.

At the time the relationship with KSC was established, the bank provided Western Union with information relating to KSC. Western Union stored this information in its systems as an agent location of the bank, and not as a discrete legal entity acting as a sub-agent. During the entirety of the review period, in addition to its real-time transaction screening of remitters and beneficiaries, Western Union had a process to screen Master Agents and related sub-agents under the Master Agent structure. However, for the majority of the review period, Western Union did not screen location data for sanctions-related issues as part of its review process.

Western Union became aware that KSC was a potential sub-agent in early February 2015, but mistakenly believed at that time that KSC had operated from a single location, which was no longer active as of that date. On March 25, 2015, Western Union identified a second, active KSC location, and immediately suspended its relationship with KSC and deactivated its access to the Western Union network.

Between December 9, 2010, and March 13, 2015, Western Union processed 4,977 transactions totaling approximately $1.275 million, which were paid out to third-party, non-designated beneficiaries who chose to collect their remittances at KSC.

OFAC determined that Western Union processed transactions involving a Specially Designated National (SDN) for more than four years following the entity’s designation by OFAC, and that after Western Union discovered that this Sub-Agent was an SDN, failed to deactivate KSC’s access to the Western Union network immediately due to its mistaken belief that the Sub-Agent was already inactive. However, starting in 2013, two years prior to discovering the apparent violations, Western Union began a project to remediate the root cause of the apparent violations.

How we got the final settlement amount:

The settlement amount reflects OFAC’s consideration of the following facts and circumstances, pursuant to the General Factors under OFAC’s Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A.

OFAC considered the following to be aggravating factors:

(1) Western Union acted with reckless disregard for U.S. sanctions requirements by failing to immediately identify both KSC locations in searches conducted after it discovered that this Sub-Agent was an SDN, which resulted in a failure to deactivate KSC’s access to the Western Union network immediately;

(2) Western Union engaged in a pattern of conduct that involved processing transactions involving an SDN for more than four years following the entity’s designation by OFAC;

(3) Based on a review of all readily available information and with the exercise of reasonable due diligence, Western Union had reason to know that its Sub-Agent, KSC, was on the SDN List;

(4) By processing these transactions and allowing KSC to continue operating as a Western Union Sub-Agent and provide remittance services to its customers through a U.S. MSB, Western Union caused substantial harm to the sanctions program objectives, including by conferring economic or other benefit to an SDN and undermining the policy objectives of the GTSR; and

(5) Western Union is a large and commercially sophisticated international financial institution.

OFAC found the following to be mitigating factors:

(1) Western Union has not received a penalty notice or Finding of Violation from OFAC in the five years preceding the earliest date of the transactions giving rise to the apparent violations;

(2) Western Union had a global sanctions policy in place at the time of the apparent violations that required its Master Agents to comply with the sanctions programs administered by OFAC and vet its Sub-Agents — a policy that seemed to be effective except in this instance;

(3) Prior to the apparent violations, Western Union had implemented a corrective action plan to close an identified gap in its internal controls related to sub-agent due diligence and screening.

(4) Following the discovery of the apparent violations, Western Union took additional remedial actions, including performing an immediate one-time screening of its Sub-Agent and location data, which did not identify any other Sub-Agents or locations that were on the SDN List; and

(5) Western Union cooperated with OFAC’s investigation by voluntarily self-disclosing the apparent violations and by executing and agreeing to extend multiple times a statute of limitations tolling agreement.

And the final paragraph dovetails nicely with the recently-published Framework document (convenient, no?):

In addition to the above, and as part of its settlement with OFAC, Western Union has agreed to sustain its commitment to implementing robust compliance procedures by ensuring that it continues to have a management team in place that: (1) is committed to a culture of compliance; (2) conducts regular risk assessments; (3) ensures that its internal controls appropriately mitigate its sanctions-related risks; (4) conducts regular audits; and (5) provides ongoing sanctions compliance training throughout the organization.

Mr. Watchlist wonders what the line is between “reckless” and either “careless” or “negligent”… because it seems that Western Union was at worst, negligent or incompetent. And there’s a big gap between that and “reckless”…. just saying.

Link:

OFAC Enforcement Information

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3 for 1: OFAC announces 3 Cuba-related enforcement actions

June 17, 2019, 6:20 am

≫ Next: Maldives sanctions, we hardly knew ye…

≪ Previous: OFAC Enforcement Action: A series of unfortunate events befalls Western Union…

Settlement Agreements between the U.S. Department of the Treasury’s Office of Foreign Assets Control and Expedia Group, Inc.; Hotelbeds USA, Inc.; and Cubasphere, Inc. and an Individual

6/13/2019

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced a $325,406 settlement with Expedia Group, Inc. (“Expedia”). Expedia, headquartered in Bellevue, Washington, on behalf of itself and its subsidiaries and affiliates worldwide, has agreed to pay $325,406 to settle its potential civil liability for providing Cuba-related travel services in apparent violation of the Cuban Assets Control Regulations, 31 C.F.R. part 515 (CACR). Specifically, between on or about April 22, 2011 and on or about October 16, 2014, Expedia dealt in property or interests in property of Cuba or Cuban nationals by assisting 2,221 persons — some of whom were Cuban nationals — with travel or travel-related services for travel within Cuba or between Cuba and locations outside the United States. These transactions appear to have violated § 515.201(b) of the CACR. OFAC determined that the apparent violations were voluntarily self-disclosed to OFAC and occurred prior to agency notice.

For more information, please visit the following web notice.

OFAC today separately announced a $222,705 settlement with Hotelbeds USA, Inc. (“Hotelbeds USA”). Hotelbeds USA, incorporated in Florida, is a U.S. subsidiary of Hotelbeds Group, headquartered in Mallorca, Spain. Hotelbeds USA has agreed to pay $222,705 to settle its potential civil liability for assisting persons with unauthorized Cuba-related travel services in apparent violation of the CACR. Specifically, between the approximate dates of December 2011 and June 2014, Hotelbeds USA provided Cuba-related travel services to 703 non-U.S. persons in apparent violation of § 515.201(b) of the CACR. OFAC determined that the apparent violations were not voluntarily self-disclosed to OFAC and occurred prior to agency notice.

For more information, please visit the following web notice.

OFAC today also separately announced a $40,320 settlement with an individual (the “Individual”) and Cubasphere, Inc. (“Cubasphere”). The Individual, as well as Cubasphere, on whose behalf the Individual also acted, have agreed to pay $40,320 to settle their potential civil liability for apparent violations of the CACR. Specifically, the Individual and Cubasphere dealt in property in which Cuba or Cuban nationals had an interest, in apparent violation of § 515.201(b) of the CACR, by engaging in unauthorized Cuba travel-related transactions by assisting 104 persons on four separate trips to and within Cuba, from on or about December 30, 2013 to on or about February 22, 2014. OFAC determined that the apparent violations were not voluntarily self-disclosed to OFAC and occurred subsequent to agency notice.

For more information, please visit the following web notice.

OFAC strongly encourages organizations subject to U.S. jurisdiction, as well as foreign entities that conduct business in or with the United States, U.S. persons, or using U.S.-origin goods or services, to review OFAC’s May 2, 2019 “A Framework for OFAC Compliance Commitments” for more information regarding best practices for developing, implementing, and updating risk-based sanctions compliance programs.

Each of these enforcement actions will be discussed in more detail in separate posts. But that last paragraph – despite the violations occurring years ago – tells the story, as you’ll be able to tie these cases to the 10 “root causes” of inadequate sanctions compliance in the last 4 pages of the Framework document.

Links:

OFAC Notice

Expedia Enforcement Action

Hotelbeds Enforcement Action

Cubasphere Enforcement Action

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Maldives sanctions, we hardly knew ye…

June 17, 2019, 6:36 am

≫ Next: June 13, 2019: CMPs getting inflated again…

≪ Previous: 3 for 1: OFAC announces 3 Cuba-related enforcement actions

Maldives: Council revokes sanctions framework

Today, the Council decided to revoke the framework for restrictive measures against the Maldives that it adopted on 16 July 2018.

This framework provided for the possibility of imposing a travel ban and an asset freeze on persons and entities responsible for undermining the rule of law or obstructing an inclusive political solution in the Maldives as well as persons and entities responsible for serious human rights violations. It was adopted following a deterioration of the political situation in the Maldives in the first half of 2018, particularly as institutions such as Parliament and the judiciary were being prevented from functioning properly. No persons or entities were listed under this sanctions regime.

Link:

EU Notice

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June 13, 2019: CMPs getting inflated again…

June 17, 2019, 6:45 am

≫ Next: The rules for Cuba-related CMPs are different.

≪ Previous: Maldives sanctions, we hardly knew ye…

Under the Federal Civil Penalty Inflation Adjustment Act of 1990 (amended under the Debt Collection Improvement Act of 1996 and the Federal Civil Penalties Inflation Adjusement Act Improvements Act of 2015), federal agencies get to adjust their penalty schedules for inflation. For OFAC, that means the statutory maximums imposed for non self-disclosed, egregious violations.

The Trading with the Enemy Act (TWEA) penalties, which, until a few years back, were capped at $65,000 per violation (originally I believe they started out at some ridiculously low figure, like $11,000), will now land at $89.170.
Under the International Emergency Economic Powers Act (IEEPA), which started out with $250,000 penalties for low-value transactions, the maximum penalty will now be $302,584 or twice the transaction amount.
The Foreign Narcotics Kingpin Designation Act (FNKDA or Kingpin Act) maximum CMP, which started out at $1,000,000 back in the day, now tops out at $1,503,470
The maximum penalty under the Antiterrorism and Effective Death Penalty Act (AEDPA) goes from $77,909 to $79,874, while that under the Clean Diamond Trade Act (CDTA) goes from $13,333 to $13,669

Note: Mr Watchlist has never seen, since he started following this stuff, fines under AEDPA or CDTA. AEDPA is not really a surprise because many Sanctions programs are authorized under AEDPA and IEEPA, and IEEPA has a more punitive CMP scale.

Links:

OFAC Notice

Treasury Notice

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The rules for Cuba-related CMPs are different.

June 17, 2019, 8:10 am

≫ Next: OFAC Enforcement Action: Expedia Group

≪ Previous: June 13, 2019: CMPs getting inflated again…

From the Cubasphere settlement:

The Cuba Penalty Schedule, 68 Fed. Reg. 4429 (Jan. 29, 2003), sets a $2,000 penalty for the provision of travel services occurring “prior to agency notice,” plus $500 per person assisted, and a $15,000 penalty for the provision of travel services occurring “subsequent to agency notice,” plus $500 per person assisted.

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