OFAC DIRECTIVE 1 AS AMENDED SEPTEMBER 29, 2017

Business Update | October 11, 2017 | Author: Hdeel Abdelhady | PDF OFAC Further Tightens Russia Debt Prohibitions Pursuant to the Countering Russian Influence in Europe and Eurasia Act of 2017 As required by the Countering Russian Influence in Europe and Eurasia Act of 2017 (CRIEEA),[i] the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) on September 29, 2017 amended and reissued OFAC Directive 1 (Directive 1).[ii] As amended, Directive 1 continues to prohibit certain “new” debt, equity, and related transactions involving entities subject to U.S. Sectoral Sanctions targeting Russia’s financial services sector. This Business Update discusses the background to and mechanics of Directive 1 as amended and reissued. Ukraine/Russia-Related… Read More

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Banks, Credit Unions and Other Financial Insitutions as Deputized Law Enforcement

From Anti-Money Laundering to Immigration Enforcement: Time to Reassess the Law Enforcement Role of Banks, Credit Unions and Other Financial Intermediaries.  “Credit unions are deeply committed to the fight against crime, but it is important to recognize we are not law enforcement agents and we have certain fundamental limitations.” This statement, made by the Senior Vice President and General Counsel of a major U.S. credit union in testimony before Congress in July 2017,[1] reflects the legal and regulatory requirements and expectations that banks, credit unions, money services businesses, and other financial intermediaries can, must, and should play a role in combatting the misuse of the financial system for illicit purposes.… Read More

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Hdeel Abdelhady Discussed the NYDFS Habib Bank Enforcement Action

MassPoint’s Founder and Principal, Hdeel Abdelhady, discussed the legal significance and potential commercial implications of the NYDFS’ enforcement action against Habib Bank at a time of correspondent banking derisking. Ms. Abdelhady stated that: “at any time, the loss a New York banking license and direct access to the U.S. financial system would be devastating, but the potential implications of the lost license may be greater now given that U.S. banks have steadily exited or limited foreign correspondent relationships in recent years, leaving foreign banks cut off from or with limited or costly access to the U.S. dollar and financial system.” Read Ms. Abdelhady’s full comments here in this comprehensive piece, by… Read More

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House Bill Would Enhance U.S. States’ Iran Sanctions Authority

On July 26, 2017, a bill was introduced in the House that would bolster U.S. states’ authority to impose sanctions on parties that engage in certain business with or in Iran. The State Sanctions Against Iranian Terrorism Act, H.R. 3425, would “amend the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 to secure the authority of State and local governments to adopt and enforce measures restricting investment in business enterprises in Iran, and for other purposes.” Among other measures, the House Bill would expand U.S. states’ authority to impose indirect Iran sanctions by excluding or debarring from state procurement and investments parties that do business in or with Iran, where… Read More

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Do State Regulators Like the NYDFS Have Authority to Enforce OFAC Sanctions?

Robust Enforcement of OFAC Sanctions by Federal Authorities In recent years the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and other federal authorities have robustly enforced OFAC-administered sanctions against banks, particularly U.S. branches of foreign banks. Notable for their number, successiveness, and monetary penalty amounts imposed—often for U.S. sanctions and related violations, such as of the Bank Secrecy Act—these federal enforcement actions have nevertheless been overshadowed by state enforcement actions, in particular those of the New York State Department of Financial Services (NYDFS). NYDFS Enforcement of OFAC Sanctions  The NYDFS is the New York State agency with licensing, supervisory, and enforcement authority over, among others, New… Read More

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Senate Bill to Combat ISIS Targets “Jurisdictions of Terrorism Financing Concern”

On February 13, 2017, Senator Bob Casey (D-PA) introduced in the Senate the “Stop Terrorist Operational Resources and Money Act” (the “STORM Act”). The purpose of the STORM Act is to “establish a designation for jurisdictions permissive to terrorism financing, to build the capacity of partner nations to investigate, prosecute, and hold accountable terrorist financiers, to impose restrictions on foreign financial institutions that provide financial services for terrorist organizations, and for other purposes.” The STORM Act would permit the President to designate a country as a “Jurisdiction of Terrorism Financing Concern” upon determining that “government officials know, or should know, that activities are taking place within the country that substantially… Read More

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After Election 2016: 5 Legal and Business Issues to Watch in 2017

Download Infographic The dismantling of Obama-era laws and regulations, broader deregulation, and economic and political nationalism were and remain themes of the 2016 U.S. Election and presidential transition period. Donald Trump and members of the incoming Republican-controlled Congress have singled out for repeal or significant modification the Affordable Care Act (aka “Obamacare”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act, along with trade, immigration, foreign affairs, and environmental laws, regulations, and policies. If taken, these actions will not only effect legal changes in specific areas, they will create legal and policy voids that may be filled by U.S. states and localities, foreign governments and multilateral and non-governmental organizations,… Read More Continue Reading

Event: IRAN AFTER PARTIAL SANCTIONS RELIEF AND U.S. ELECTIONS

November 16, 2016 Panel Discussion Iran After Partial Sanctions Relief and U.S. Elections: Legal, Risk, and Practical Issues for Business

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Do State Regulators Have Authority to Enforce OFAC Sanctions?

The enforcement of OFAC-administered sanctions by a state agency—even against banks by a banking regulator operating in a dual banking system—raises fundamental constitutional and other legal questions. Chief among them is the overarching question of whether U.S. states have authority to directly or effectively enforce OFAC-administered sanctions, particularly independently and prior to enforcement by competent federal authorities—namely OFAC. This question and some of the legal issues and policy and practical considerations appertaining to it are discussed in detail in a forthcoming publication. This document provides a summary preview of some of the key legal issues discussed in that publication. Additional summary previews may be provided separately. Continue reading…

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U.S. Sectoral Sanctions Targeting Russian Financial Services: OFAC Directive 1

United States Adds Russian Direct Investment Fund, Other Russian Financial Services Actors to Sectoral Sanctions List Certain Financing, Debt, and Equity Transactions Remain Prohibited; Action Relevant to U.S. Persons and Non-U.S. Persons (particularly Middle East- and Asia-based) Sanctioned Status Made Explicit On July 30, 2015, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) made explicit the sanctioned status of certain entities operating in Russia’s financial services sector by adding them to the Sectoral Sanctions Identifications List (SSIL).The SSIL identifies parties subject to U.S. Sanctions targeting specific sectors of the Russian economy (Sectoral Sanctions) within the framework of Ukraine/Russia-related sanctions adopted in response to events in Ukraine.[i]… Read More

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