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Last week's major developments in sanctions - April 17th to April 21st, 2023

Monday, April 17

  • OFAC published "Possible Evasion of the Russian Oil Price Cap" alert to warn U.S. persons about the possible evasion of price cap, especially related to the eastern coast of Russia. The alert recommends that ship owners, P&I clubs, and flagging registries use maritime intelligence services to improve the detection of Automatic Identification System manipulation. The alert also reminds the commodities brokers and oil traders that they have to pay attention that the price of the oil has not mixed with the cost of insurance, shipping, freight, and custom to obfuscate the price of the oil or petroleum product.

  • The U.S. Department of Justice indicted and arrested a Florida-based business person, who allegedly helped a Russian SDN for many years and violated U.S. sanctions. (Press release) The second conspirator, in this case, was later charged and arrested on April 19. (Press release)

Tuesday, April 18

  • The United States and the United Kingdom took joint action against a Hizballah financier, Nazem Said Ahmad, and his network. Specifically:

    1. OFSI added Ahmad's name to its list of asset-freezing sanctions targets. (Here, press release) The designation notice for Ahmad is very interesting because OFSI mentioned six entities in the "other information" section under his name as opposed to separately designated them. This practice may complicate the screening of those names since many screening systems are configured to screen the name of an entity as an entry, not under another entry as "other information."

    2. OFAC imposed asset-freezing sanctions on over 50 individuals and entities located in eight countries for helping Nazem Said Ahmad, who was himself sanctioned in December 2019. (Here, the Department of the Treasury's press release, a map of Nazem evasion network, the Department of State's press release)

    3. The Department of Justice unsealed a nine-count indictment charging Ahmad and eight co-defendants for conspiring to evade U.S. sanctions among other things. (Here)

  • The U.S. Department of Justice announced that two businesses in Taiwan and Brunei pleaded guilty to their participation in a criminal conspiracy to violate U.S. sanctions by sending U.S.-origin goods to Iran. (Here)

  • OFSI published a new guidance document: High Value Dealer Guidance - It is a guidance on financial sanctions implementation for high value dealers, luxury goods markets, and art market participants.

  • In a very interesting development, the U.S. Department of Justice announced it reached an agreement with General Motors (GM) to resolve the discriminative practices of GM in hiring non-U.S. citizens in violation of the Immigration and Nationality Act. The issue, in this case, was that GM asked non-Citizen individuals to provide documents that were not necessary to show compliance with export control laws. (Here) The department also announced the release of a new fact sheet to help employers avoid citizenship status discrimination when complying with export control laws.

Wednesday, April 19

  • The Supreme Court issued its judgment on Turkiye Halk Bankasi A.S., v. United States. The case stemmed from a sanctions issue, yet the question presented to the Supreme Court was related to the scope of the applicability of the Foreign Sovereign Immunities Act of 1976. In short, the Court affirmed the lower court's judgment by allowing the state-owned companies to be criminally prosecuted in the United States. Yet, it vacated and remanded the lower court's decision in part by sending it back for further consideration of common-law immunity. (Here)

  • OFAC imposed asset-freezing sanctions on one individual and six entities involved in procuring electronic components for Iran's military. (Here, the Department of the Treasury's press release, the Department of State's press release)

  • OFAC imposed asset-freezing sanctions on three Nicaraguan judicial officials involved in human rights abuses under the U.S. sanctions program against Nicaragua. (Here, the Department of the Treasury's press release, the Department of State's press release)

  • In a money laundering-related development, the U.S. Department of Justice announced that the former National Treasurer of Venezuela and her husband were each sentenced today to 15 years in prison for their roles in a multibillion-dollar bribery and money laundering scheme. (Here)

  • The Department of Commerce’s Bureau of Industry and Security (BIS) imposed its largest standalone civil penalty against Seagate. Specifically, BIS imposed an administrative penalty of $300 million, a mandatory multi-year audit requirement, and a five-year suspended Denial Order. The reason: alleged violations of U.S. export controls related to selling hard disk drives to Huawei Technologies Co. Ltd. in violation of the foreign direct product rule. (Here)

Thursday, April 20

  • An individual in West Virginia pleaded guilty to the federal felony offense of committing an export fraud violation for knowingly submitting false export valuations for certain items shipped to Pakistan. (Here)

Friday, April 21

The Recommendation of the Week

  • Elliptic published the 2023 version of Sanctions Compliance in Cryptocurrencies. Check it out here.


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