Recent news from Treasury’s Office of Foreign Assets Control: June 23

  • OFAC Settles with Swedbank AS (Latvia) for Potential OFAC Violations: OFAC on June 20 announced a settlement with Swedbank AS (Latvia) (“Swedbank Latvia”), a subsidiary of Swedbank AB (publ), headquartered in Stockholm, Sweden. The settlement is related to the bank’s 386 apparent violations of OFAC’s Crimea sanctions. Swedbank Latvia has agreed to remit $3,430,900 to settle its potential civil liability for the apparent violations. Specifically, in 2015 and 2016, a customer of Swedbank Latvia used Swedbank Latvia’s e-banking platform from an internet protocol address in Crimea to send payments to persons in Crimea through U.S. correspondent banks. Swedbank Latvia was alerted to the potential connection to Crimea by a U.S. correspondent bank, which rejected the payments on that basis. However, Swedbank Latvia improperly relied on the customer’s representations that the transactions did not involve Crimea and re-routed them to a different U.S. correspondent bank, even though Swedbank Latvia’s KYC records indicted the customer had a physical presence in Crimea. The settlement amount reflects OFAC’s determination that Swedbank Latvia’s apparent violations were not voluntarily self-disclosed and were non-egregious. Read more.

OFAC took sanctions action over the last week in the Russia and Burma programs:

Russia-related Sanctions

  • OFAC Sanctions Russian Intelligence Officers: OFAC on June 23 sanctioned two Russian Federal Security Service (FSB) officers—Yegor Sergeyevich Popov and Aleksei Borisovich Sukhodolov—pursuant to Executive Order 14024 for having acted for or on behalf of the Russian government. These FSB officers are alleged to have played a significant role in the Kremlin’s attempts to conduct global malign influence operations, including efforts to clandestinely fund and direct the political campaign of a candidate for local office in Florida. OFAC’s action follows the Department of Justice’s April 18, 2023 indictments of the same individuals, and is directly related to the July 29, 2022 designation of Aleksandr Viktorovich Ionov and Natalya Valeryevna Burlinova. Ionov and Burlinova were designated pursuant to E.O. 14024 for having acted or purported to act for or on behalf of, directly or indirectly, the Russian government. On July 29, 2022, DOJ concurrently indicted Ionov for working on behalf of the Russian government in conjunction with the FSB, and one focus of Ionov’s alleged influence operation was to create the appearance of American popular support for Russia’s annexation of territories in Ukraine. Read more.

Burma-related Sanctions

  • OFAC Sanctions Burma’s Ministry of Defense and Financial Institutions: OFAC on June 21 designated Burma’s Ministry of Defense and two regime-controlled financial institutions that facilitate much of the foreign currency exchange within Burma and enable transactions between the military regime and foreign markets, including for the purchase and import of arms. Burma’s Ministry of Defense is responsible for decades of repressive military rule that was violently resumed following the coup in 2021. Since the coup, the Ministry of Defense has continued to import goods and materiel worth at least $1 billion, including from sanctioned entities in Russia. The designated entities are state-owned financial institutions Myanma Foreign Trade Bank and Myanma Investment and Commercial Bank. These financial institutions enable Burma’s Ministry of Defense and other sanctioned military entities to purchase arms and other materials from foreign sources. Read more.