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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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The Value of Integrating News Awareness into Corporate Compliance and Risk Management

The case of Michael Cohen, “personal lawyer” to the U.S. President, continues to yield rich legal, compliance and risk management lessons for a growing group that includes U.S. and foreign companies, banks, lobbyists, government officials, and lawyers. Recent developments in the Cohen matter highlight how news awareness can enhance compliance and risk management for companies and others. Unlike AT&T and Novartis, most companies will not find themselves entangled in headline news of national importance, but enough of them are likely to get caught flat-footed by news about them or their business partners and peers (such as in the same industry, where news of one company’s bad behavior can lead law enforcement authorities to scrutinize peer companies in industry sweeps).
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Trump Administration Supercharged Global Magnitsky Corruption and Human Rights Sanctions

Beyond the parameters of the Global Magnitsky Act, EO 13818 markedly enlarges the range of sanctionable conduct and persons. The differences between the language of EO 13818 and the Global Magnitsky Act are substantive and significant. In several instances, EO 13818 expands sanctions by omitting the Act’s qualifying language, adding new bases for sanctions, and/or leaving key terms undefined. Key instances of EO 13818’s broad and/or uncertain language are discussed below.
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Trump Administration Targets Chinese Dominance, Corruption in Africa

Notably, in the two pages of the NSS that are devoted to the National Security Strategy in the Africa context, none of Africa’s 54 nations are mentioned, but China is named twice. The NSS notes with concern China’s “expanding . . . economic military presence in Africa, growing from a small investor in the continent two decades ago into Africa’s largest trading partner today.” China’s methods and influence in Africa are described unflatteringly.  “Some Chinese practices,” the NSS states bluntly, “undermine Africa’s long-term development by corrupting elites, dominating extractive industries, and locking countries into unsustainable and opaque debts and commitments.”
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President Trump Promulgates Global Magnitsky Sanctions: EO 13818 Analysis

The Global Magnitsky Sanctions are extraordinary for a number of reasons. First, they are global in reach and require not jurisdictional nexus between the United States and the corrupt acts and human rights abuses they target. As to corruption, both the Global Magnitsky Act and EO 13818 define it broadly, well beyond U.S. and international frameworks that are concerned primarily or exclusively with bribery. The Global Magnitsky Sanctions also depart from U.S. and international anti-corruption frameworks by directly penalizing foreign government officials for corrupt acts. As discussed above, EO 13818 significantly expands the scope and reach of the Global Magnitsky Act and, in doing so, employs extraordinary theories of liability, such as strict and vicarious liability on the leaders or officials of any foreign entity that engaged in covered corrupt acts. Independently and together, the provisions of EO 13818 empower the United States, and particularly the Executive Branch, to sanction a wide range of persons and conduct without meeting the due process, evidentiary, or other requirements that would apply in U.S. courts. As indicated in a prior installment of this MassPoint series, 52 individuals and entities have so far been sanctioned under EO 13818. It remains to be seen how the Trump Administration (or subsequent administrations) will implement the Global Magnitsky Sanctions. For now, foreign persons in particular—both government and private—should familiarize themselves with the Global Magnitsky Sanctions and assess their risk for liability, particularly for facilitating corrupt acts such as by transferring the proceeds of corruption.
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FinCEN Guidance on Customer Due Diligence (CDD) Rule 2018

The Financial Crimes Enforcement Network (FinCEN) on April 3, 2018 published guidance on the Customer Due Diligence Requirements for Financial Institutions rule (the "CDD Rule) that will come into effect on May 11, 2018. FinCEN's CDD Guidance, in the form of frequently asked questions, is comprised of 36 questions and answers covering a range of issues, from the scope of due diligence up the ownership chain of legal entities to due diligence requirements applicable (or not) to foreign banks.
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