U.S. Sanctions

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Yesterday, the Biden Administration released the results of a broad review of U.S. economic sanctions policy following two decades of expanding use of sanctions as a foreign policy tool.  The report recognizes that U.S. sanctions policy must evolve to confront changes to the global payments system, including the rise of digital currencies, reduced use of…

Last week, the Office of Foreign Assets Control (OFAC) issued an Art Advisory, warning of the sanctions risk presented by high-value artwork transactions due to the anonymity, lack of transparency, mobility of assets, and subjective valuations that often characterize that market.  OFAC cautions that bad actors, like terrorist financiers and others subject to sanctions,…

This week, the Office of Foreign Assets Control (OFAC) announced a settlement agreement with Berkshire Hathaway Inc. involving apparent violations of the U.S. embargo on Iran by a subsidiary in Turkey.  Under the agreement, Berkshire Hathaway agreed to pay over $4.1 million to settle allegations that the Turkish subsidiary exported 144 shipments of cutting tools…

Today, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on Rosneft Trading S.A., a Switzerland-based subsidiary of Russian state-controlled global energy company Rosneft Oil, and its president and board executive Didier Casimiro.  Specifically, OFAC designated the company as a specially designated national (SDN) pursuant to Executive Order (E.O.) 13850…

Today the President signed landmark legislation into law mandating new and enhanced sanctions on Russia, Iran, and North Korea.  As noted in our prior posts, here and here, the law will tighten existing sanctions on those countries and provide the U.S. government with broader power to penalize companies under primary and secondary sanctions rules.…

A recent suit filed by the U.S. Department of Justice (DOJ) for the forfeiture of nearly $2 million highlights the broad extraterritorial reach of U.S. sanctions laws.  On June 14, DOJ filed a complaint to seize funds associated with transactions between several Chinese companies, including Mingzheng International Trading Limited (Mingzheng).  Mingzheng and the other companies had been set up as a front and were conducting transactions in U.S. dollars on behalf of North Korea’s Foreign Trade Bank (FTB), a blacklisted Specially Designated National (SDN).  The case has two noteworthy lessons, with the latter lesson hopefully more relevant to your company:

Lesson One: Don’t launder money for North Korean SDNs engaged in proliferation schemes.  If you want to know more about how North Korea attempts to launder funds, check out this detailed and fascinating report on the topic.

Lesson Two: If you conduct a transaction in U.S. dollars, even if all other aspects of the transaction occur outside of the United States, the U.S. government will likely claim jurisdiction over the transaction.
Continue Reading US Govt Seeks $1.9 Million In North Korea Sanctions and Money Laundering Case