Last week the Treasury Department’s Office of Foreign Assets Control (OFAC) announced that it had reached an agreement with Apple, Inc., to resolve apparent violations of the Foreign Narcotics Kingpin Sanctions Regulations (“FNKSR”). Apple allegedly violated the FNKSR by hosting, selling, and facilitating the transfer of software applications developed by SIS, d.o.o. (“SIS”), a Slovenian software company. While the $470,000 settlement is the equivalent of a rounding error for the trillion-dollar company, the interesting part of the settlement agreement was the level of detail regarding Apple’s sanctions screening missteps and their resulting commitments to improve. The settlement highlights the importance of detailed screening procedures for the use of sanctions screening software and adequate employee training to resolve potential red flags.
In case you missed the flurry of Russian sanctions news over the past few weeks, you may have missed an addition to the sanctions that could impact your business, especially if you’re in the aluminum market. On April 6, 2018, the Treasury Department’s Office of Foreign Assets Control (OFAC) added a number of prominent Russian individuals and entities, including Russian government officials, to its Specially Designated Nationals and Blocked Persons List (SDN List). Among those was the designation of Russian oligarch, Oleg Deripaska. If the name doesn’t sound familiar to you, the aluminum magnate is tied up in allegations regarding interactions with former Trump campaign chairman, Paul Manafort, related to the 2016 presidential election.
Unfamiliar with the “petro?” You’re likely not alone given the increasing variations of Bitcoin and other cryptocurrencies with their wild price increases and dips. Back on December 3, 2017, as part of the Venezuelan government’s five-hour Christmas special, Venezuelan President Nicolás Maduro introduced the “petro.” Unlike Bitcoin or other cryptocurrencies, the petro is not mined and is at the direction of the government. Rather, President Maduro’s government intends for the petro cryptocurrency to be backed by strategic reserves of Venezuelan wealth –gold, oil, gas, and diamonds. According to Maduro, the petro is needed to help the country “advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade.”
On July 20, 2017, the Office of the Foreign Assets Control (OFAC) announced a $2 million penalty against ExxonMobil Corporation and two of its subsidiaries for violating the Ukraine-Related Sanctions Regulations. According to OFAC, ExxonMobil violated the sanctions when its execs dealt in services with Igor Sechin, President of Rosneft OAO, when they signed eight legal documents relating to oil and gas projects in Russia between May 14, 2014, and May 23, 2014.
If you’ll travel back in time to March 2014, as tensions were heating up regarding Russian deployment of military forces in the Crimea region of Ukraine, President Obama issued Executive Order 13661, “Blocking Property of Additional Persons Contributing to the Situation in Ukraine,” in response to actions deemed to constitute an unusual and extraordinary threat to the national security and foreign policy of the U.S. Section 1(a)(ii) authorized the Secretary of the Treasury to designate officials of the Government of the Russian Federation, block any property or interests in property, and prohibit dealing in any property and interests in property of a person listed on the Specially Designated Nationals and Blocked Persons List (SDN List). Section 4 of E.O. 13661 prohibited US persons from making “any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order” as well as receiving “any contribution or provision of funds, goods, or services” from a designated person.
On Friday, June 16th, President Trump announced changes to the U.S. policy towards Cuba. His new Cuba policies seek to enhance compliance with U.S. law, hold the Cuban regime accountable for human rights abuses, further U.S. national security and foreign policy interests and those of the Cuban people, and lay the groundwork for empowering the Cuban people to develop greater economic and political liberty. Although much of the Obama Administration’s policies remain intact (such as the sending of remittances to Cuba, the expansion of telecommunications and internet access for Cuban people, support for the sale of agricultural commodities, medicine, and medical devices, and the end of the “Wet Foot, Dry Foot” immigration policy), President Trump’s policies are likely to impact two key areas:
- trade/business as it seeks to end economic practices that benefit Cuban military, intelligence, or security agencies or personnel; and
- travel-related transactions as it seeks to enforce the ban on U.S. tourism to Cuba.