U.S. authorities continue to target government officials and other individuals and entities from Iran to Venezuela with asset freezes, transactional bans and other prohibitions against growing calls to ease financial embargos and other sanctions in response to the new coronavirus disease.
The blacklisting of 20 parties in Iran on Thursday is only the latest of a dozen rounds of designations that the Treasury Department has issued against targets in the Islamic Republic, Venezuela, Nicaragua, Syria and Zimbabwe since the beginning of February, when COVID-19 began spreading from its first epicenter in Wuhan, China, to most countries around the world.
Iran has reported nearly 30,000 coronavirus infections and more than 2,200 deaths as of Thursday, the fourth highest worldwide after Italy, Spain and China. North Korea, Syria and Cuba, the other three nations subject to comprehensive U.S. embargoes, have disclosed zero, five and 67 cases respectively, though their claims have drawn skepticism.
These countries, long isolated from the global economy and financial system, face the tallest hurdles in procuring medical and food supplies amid the pandemic, but any other jurisdiction targeted by substantial U.S. sanctions will also struggle, according to Farhad Alavi, an attorney with Akrivis Law Group in Washington, D.C.
“Venezuela, for example, is not under a ‘country embargo,’ but because many key players are sanctioned it’s critical that financial institutions scrutinize any [humanitarian] transactions before they happen to ensure compliance,” Alavi wrote in an email. “The same goes for any country where many parties are blocked.”
Venezuelan authorities claimed to have confirmed more than 100 infections as of Thursday, when the U.S. Justice Department charged President Nicolas Maduro and 14 other officials with drug trafficking, sanctions evasion, corruption and other violations.
Parties named in several indictments Thursday include Venezuela’s foremost judge, Maikel Jose Moreno Perez, whom U.S. prosecutors accused of laundering tens of millions of dollars in bribes by purchasing various luxury goods and services in South Florida from 2012 to 2016, including a $1 million private aircraft.
Attorney General William Barr said in a press conference Thursday that ousting the “corrupt cabal” in Caracas is the best way to help Venezuelans through the COVID-19 crisis, which has arrived against the backdrop of a progressively deteriorating healthcare system and increasingly restrictive U.S. sanctions.
Other senior U.S. officials have argued that sanctions do not limit the provision of humanitarian goods and services to targeted jurisdictions, or prevent U.S. financial institutions from processing related transactions.
The Treasury Department’s Office of Foreign Assets Control, for instance, allows Iran to receive agricultural and healthcare products in “a number of ways,” the bureau reiterated in a March 6 advisory.
Other U.S. sanctions regulations include similar waivers that vary slightly from jurisdiction to jurisdiction.
On Feb. 27, OFAC issued a general license that again permits U.S. banks to handle payments for shipments of food, pharmaceuticals and medical devices involving the Central Bank of Iran, five months after having effectively banned those payments by designating CBI under a counterterrorism authority.
But general licenses still come with strict conditions and pose special compliance challenges for financial institutions, said Sean Kane, a former senior official with OFAC.
“The U.S. government could consider adopting a non-enforcement posture with respect to the export of certain medicines and medical devices to sanctioned countries during the course of this pandemic,” Kane, now an attorney with Dechert in Washington, D.C., said.
Banks or their exporter clients may also apply to OFAC for more narrowly tailored special licenses if they are concerned that their humanitarian dealings may, in the case of Iran, touch designated lenders like Bank Melli or Bank Parsian, or if the medical devices tied to their payments fall outside the general licenses, as is the case with ventilators and imaging hardware.
Whatever avenue they choose, financial institutions must closely screen payments for “hidden partners” and obtain assurances in writing that the humanitarian items are not at risk of being transferred or re-exported to blacklisted parties, said Brian O’Toole, a former senior adviser to the director of OFAC.
A recently formalized mechanism separately enables Swiss banks to avoid U.S. secondary sanctions when processing humanitarian transactions linked to Iran on the condition that they conduct enhanced due diligence on the parties involved.
“The OFAC guidance for the Swiss channel is more onerous than what most financial institutions would do,” O’Toole said.
Over the past few days, Chinese, EU and U.N. officials, including Secretary General António Guterres, as well as non-profit organizations around the world, have urged the easing of global and U.S. sanctions against Cuba, Iran, North Korea, Venezuela and Zimbabwe to help these countries tackle domestic coronavirus outbreaks.
“Any waivers could be very narrowly tailored … and practical in nature, for example, a 60-day waiver to allow medical companies to send goods on certain shipping or airlines that are currently sanctioned, without economically empowering [blocked] entities,” Alavi, the sanctions attorney in Washington, D.C., wrote in an email.
Contact Valentina Pasquali at email@example.com
|Topics :||Sanctions , Anti-money laundering , Counterterrorist Financing|
|Source:||U.S.: OFAC , U.S.: Department of Treasury|
|Document Date:||March 30, 2020|