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Recent news from Treasury’s Office of Foreign Assets Control: August 17

August 17, 2023
Reading Time: 4 mins read
AML Innovation and Whistleblower Provisions of the NDAA Mean Important Changes Ahead

OFAC took a number of significant sanctions actions over the last week across multiple programs:

Russia-related Sanctions

  • OFAC Sanctions Entities Tied to Russia and North Korea: OFAC on Aug. 16 sanctioned three entities tied to a sanctions evasion network attempting to support arms deals between Russia and North Korea. OFAC designated Limited Liability Company Verus (Verus), Defense Engineering Limited Liability Partnership (Defense Engineering), and Versor S.R.O. (Versor). OFAC’s action prohibits transactions with the designees and freezes any assets they may have under U.S. jurisdiction. Read more.
  • OFAC Sanctions Individuals Involved with Poisoning of Anti-Corruption Activist: Marking the third anniversary of the near-fatal poisoning of Russian opposition leader and anti-corruption activist Aleksei Navalny, OFAC on Aug. 17 sanctioned four members of Russia’s Federal Security Service, Alexey Alexandrovich Alexandrov, Konstantin Kudryavtsev, Ivan Vladimirovich Osipov, and Vladimir Alexandrovich Panyaev under the Magnitsky Act, which allows the U.S. government to target people involved in extrajudicial killings and other human rights abuses, for their roles in the 2020 poisoning. In 2020, Navalny was poisoned and fell seriously ill while on a plane to Moscow. He was hospitalized and later treated in Germany for poisoning by a deadly Novichok nerve agent. Navalny returned to Russia in 2021 where he was immediately imprisoned and on Aug. 4, 2023, a Russian court sentenced Navalny to an additional 19 years in prison on unfounded charges of so-called “extremism.” OFAC’s designations are complemented by the Department of State’s announcement of visa restrictions against Alexandrov, Kudryavtsev, Osipov, and Panyaev (as well as their immediate family members) for their involvement in a gross violation of human rights, condemning the latest injustice against Navalny and renewing a call for his immediate release. All property and interests in property of the designated individuals that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. Read more.
Iran-related Sanctions
  • OFAC Settles Potential Civil Liability for OFAC Violations: OFAC on Aug. 16 announced a $660,594 settlement with New Jersey-based company, Construction Specialties Inc. CS has agreed to settle its potential civil liability for three apparent violations of OFAC sanctions on Iran. The issue arose from CS’s wholly owned United Arab Emirates subsidiary, Construction Specialties, Middle East L.L.C. who exported U.S. origin goods to Iran. Specifically, between Dec. 4, 2016 and Aug. 3, 2017, CSME senior leadership oversaw the purchase and reexportation of commercial building products, valued at approximately $1,100,991, from suppliers in the United States with the knowledge that these goods were ultimately destined for a customer in Iran. Although CS consulted with outside counsel to advise about dealings with Iran and develop a bespoke sanctions compliance policy, and shared that policy with its UAE subsidiary, further directing it to avoid supporting Iranian business, the subsidiary transshipped goods to Iran by falsifying the ultimate destination on purchase orders, using a false project name, and removing labels showing the U.S. origin of goods. OFAC determined that these apparent violations were egregious, however there were voluntarily self-disclosed. Read more.
  • As part of the settlement agreement listed above, OFAC separately flagged the Financial Crimes Enforcement Network maintains a whistleblower incentive program for violations of OFAC-administered sanctions, in addition to violations of the Bank Secrecy Act. Individuals who provide information may be eligible for awards totaling between 10 to 30 percent of the monetary penalties collected in an enforcement action, if the information they provide leads to a successful enforcement action that results in penalties exceeding $1,000,000. FinCEN is currently accepting whistleblower tips. Individuals with questions about the whistleblower program, including questions about how best to submit information, should contact FinCEN through its website, www.fincen.gov/contact.
Syria-related Sanctions
  • OFAC Sanctions Syria-Based Militias: OFAC on Aug. 17 designated two Syria-based armed militias and three members of the groups’ leadership structures in connection with serious human rights abuses against those residing in the Afrin region of northern Syria. An auto sales company owned by the leader of one of the armed groups is also being designated. OFAC designated militia leaders Mohammad Hussein al-Jasim (Abu Amsha), Walid Hussein al-Jasim and Sayf Boulad Abu Bakr. OFAC designated militias the Suleiman Shah Brigade and the Hamza Division. Finally, OFAC designated a car dealership owned by Abu Amsha, Al-Safir Oto. The designees have exacerbated the suffering caused by years of civil war in northern Syria and hindered the region’s recovery by engaging in serious human rights abuses against vulnerable populations. Read more.
Terrorism-related Sanctions
  • OFAC Designates Green Without Borders and its Leader: OFAC on Aug. 16 designated Lebanon-based Green Without Borders and its leader, Zuhair Subhi Nahla for providing support to Hizballah. Green Without Borders is a Lebanon-based organization that has provided support to, and cover for Hizballah’s operations in southern Lebanon, operating under the guise of environmental activism. GWB leader Nahla has described the organization’s tree planting activities as providing a wall to protect Hizballah, highlighting its strategic importance for Hizballah’s security. Although Nahla claims that he and GWB are not part of Hizballah, he has publicly acknowledged his and GWB’s affiliation with the terrorist group. Read more.

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