News
OFAC Guidance on Sanctions Programs Boosts Compliance Burden for Banks
By Matt Squire
printFinancial institutions have been clamoring for better clarity from the U.S. Treasury Department on how to best comply with its economic sanctions programs and lists of suspected terrorists and narcotics traffickers. Be careful what you wish for. Guidance issued last month by the department's Office of Foreign Assets Control (OFAC) raises more questions than it answers, compliance professionals say, and it could place an undue burden on financial institutions to find out the extent of a sanctioned person's business interests. Essentially, the Feb. 14 guidance blocks business dealings with any entity at least 50 percent owned "directly or indirectly" by...
TO READ THE FULL STORY
Related News
The Royal Bank of Scotland will pay the United States $500 million over Bank Secrecy Act and sanctions violations committed by the now defunct ABN Amro, U.S. officials said Monday.
We never said compliance professionals had it easy, and 2010 doesn't look to be a year when things will be any better for the anti-money laundering and counterterrorism financing industry.
The U.S. Treasury Department is reorganizing its economic sanctions enforcement efforts to focus more on egregious violations that are subject to millions of dollars in penalties granted under a 2007 law.
Compliance officers at some of the world's largest financial institutions are concluding they need to create sanctions-specific programs to avoid regulatory penalties and tarnished reputations, according to a Deloitte survey released Monday.
Despite all the rhetoric, combating the networks that finance terrorism and criminal organizations is not a priority for the international community, according to Jimmy Gurulé, a law professor at Notre Dame.
New Year's Eve may have come and gone and all of the post-celebration headaches faded, but financial institutions are going to need many more months to recover from 2008.
Online transactions tied to sanctioned countries could lead to monetary fines for individuals, businesses and banks, even when it's unclear that the Web sites involved are blacklisted, say former OFAC officials and consultants.
The U.S. government does not expect financial institutions to bear the burden of identifying companies owned and controlled by individuals on its list of blocked foreign nationals, a U.S. Treasury Department official said Tuesday.
The U.S. Treasury Department blacklisted a Colombian money exchange house over its alleged ties to the Revolutionary Armed Forces of Colombia (FARC), a group identified as a terrorist organization by the United States since 1997.
As sanctions lists have grown exponentially, individuals and groups who have been named have challenged the process with varying degrees of success. For example, removals from lists maintained by the United States are few and far between, experts say.
As monitoring technology improves, banking compliance professionals expect the U.S. Treasury Department to require that banks monitor their online services for possible economic sanctions violations.
A federal court has ordered the U.S. Treasury Department to release e-mails and letters from individuals complaining that they have been unfairly ensnared by targeted financial sanctions.
Banco del Alba, launched Jan. 26 by Venezuela President Hugo Chavez and three of his allies as an alternative to the World Bank and a U.S.-backed free trade pact, includes among its members Bolivia, Nicaragua and Cuba, a country that has long been the subject of U.S. sanctions.
The designations require U.S. institutions to turn down business and freeze the assets of an Iranian military leader, two Shia extremist leaders and a former Iraqi Parliament member believed to be secretly operating a television station in Syria.
The U.S. Treasury's Office of Foreign Assets Control said Wednesday that it has targeted nearly two dozen people and 19 businesses, including a restaurant and toy store, allegedly used as front companies by the Sinaloa organization.
U.S. lawmakers, responding to a violent crackdown on protesters in August, are seeking to stop Myanmar's military leadership from importing rubies into the U.S. and laundering the proceeds through U.S. companies with business interests in Myanmar.
An executive order, issued by President Bush on July 17, requires U.S. financial institutions to block, or freeze, the transactions of people or organizations that commit or "pose a significant risk of committing" a violent act intended to undermine Iraqi stability.
Milan businessman Ahmed Nasreddin and Akida Bank, an institution he founded, were removed from the U.S. Treasury Department's Specially Designated Nationals list on Thursday, a move that could clear U.S. businesses to deal with Nasreddin. The U.N. followed suit a day later.
Wachovia in Philadelphia rejected a payment destined for a "Specially Designated Global Terrorist," on or about October 29, 2004, instead of blocking the payment, according to OFAC.
The sanctions are part of a "comprehensive" drive by the U.S. to increase pressure on Iran, said Secretary of State Condoleeza Rice. That effort has been frustrated by the hesitation of the United Nations and international community in following the U.S.