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Global Payments: Hdeel Abdelhady on a Russia-led Non-Dollar Payments System

Hdeel Abdelhady shared her insights with PaymentsSource on a Russia-led effort to build a non-U.S. dollar payments system, to insulate against U.S. sanctions and U.S. control more broadly. Ms. Abdelhady has for years worked on the U.S.-dollar and financial system links to U.S. sanctions enforcement jurisdiction. Her work on the topic of U.S. dollar and financial system tied legal jurisdiction has been quoted, leveraged, and consulted frequently in the United States and abroad.
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OFAC Ties Sanctions Authority To U.S. Origin Technology.

OFAC Expands Reporting Requirements

On June 21, the Office of Foreign Assets Control (OFAC) issued an interim final rule (IFR) substantially revising sanctions reporting regulations. The most significant amendment was to OFAC’s rejected transactions reporting rule, which now, for the first time, applies not just to U.S. financial institutions, but also to U.S. businesses, nonprofits, and individuals. The rule also appears to apply to foreign entities owned or controlled by U.S. persons. Public comments on the IFR are due by July 22, 2019.
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Bank Shareholders as Anti-Money Laundering Enforcers: Corporate Governance-AML Nexus

Two proxy advisors are urging Deutsche Bank's shareholders to vote against directors and senior managers for AML compliance lapses. The advice is significant as it clearly connects anti-financial crime compliance to corporate governance by activating bank shareholders as powerful enforcers anti-money laundering expectations. If Deutsche’s shareholders heed the calls of proxy advisors and unseat members of the bank’s management for AML lapses, they will set a cautionary precedent for other publicly-owned banks. But even if Deutsche’s shareholders do not so vote, the proxy advice given by ISS and ECGS has communicated a clear message that bank anti-money laundering compliance is part and parcel of corporate governance and a measure of directors’ and senior officers’ overall performance.
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Russia Sectoral Sanctions Directives Apply to Trade-Based Debt: Analysis

The Haverly case is instructive as it clarifies OFAC’s position, with respect to Haverly and likely more broadly, as to the meaning of “debt” under Directive 2, which prohibits, by U.S. persons and within the United States, dealings in “new debt” issued by parties that are listed on the OFAC-maintained Sectoral Sanctions Identifications List (SSIL) or not so listed but are owned 50% or more by one or more sanctioned parties.
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Anti-Corruption Enforcement is Globalized

As anti-corruption standards and enforcement practices become more uniform, cooperation among enforcement authorities will increase in frequency and effectiveness. In the FCPA enforcement context and in others, authorities have imposed record-setting fines, and likely will continue to do so with greater frequency, particularly where violations are egregious, widespread, or have broad impact. In such an environment, monetary penalties for avoidable violations may no longer be absorbable as the cost of doing business. As a matter of good business practice, companies of all sizes should take steps to strengthen compliance programs appropriately for their industries, organizational structures, home obligations, and the jurisdictions in which they do business.
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Iran Sanctions

OFAC Expanded General License for U.S. Persons to Transact in Certain Inherited and Other Property in Iran

Under amended Section 560.543 of the ISTR, individuals who are U.S. citizens and permanent residents[2]  “are authorized to engage in transactions necessary and ordinarily incident to the sale of real and personal property in Iran and to transfer the proceeds to the United States,” but only if the real and personal property was (1) “acquired before the individual became a U.S. person” or (2) was “inherited from persons in Iran.
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Banking Transparency for Sanctioned Persons

On September 7, 2018, Congresswoman Mia Love (R-UT) introduced in the House of Representatives H.R. 6751, the Banking Transparency for Sanctioned Persons Act of 2018 to "increase transparency with respect to financial services benefitting state sponsors of terrorism, human rights abusers, and corrupt officials.” This update discusses the Banking Transparency Act's provisions and what it conveys about the current U.S. legal climate around corruption and human rights sanctions, Congress’ increasingly activist sanctions posture, and the risk management and compliance inferences that U.S. and foreign financial institutions should draw from the Banking Transparency Bill when viewed in context.
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Iran Sanctions

Personal Remittances and Proceeds of Inheritances from Iran After U.S. Withdrawal from Iran Deal

For U.S. persons seeking to engage in permitted noncommercial, personal remittance or inheritance-related transactions, the higher risk sensitivity of some third country (and U.S.-based) financial institutions may complicate (or thwart in some cases), legal transactions. In light of this, persons seeking to engage in such legal transactions in the post-U.S. JCPOA withdrawal environment should exercise extra care in initiating and executing legal transfers with third country financial institutions.
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U.S. and International Business & Banking

Bank and Money Services Business Licensing and Compliance MassPoint works with U.S. and foreign clients wishing to establish banks and money services businesses (MSBs)/money transmitters from assessment of prospects for licensing to preparing and submitting applications and related documentation. Services include:…

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