On April 19, 2021, in response to reported human rights violations by the regime of President Alexander Lukashenko, the U.S. Department of the Treasury, Office of Foreign Assets Control (“OFAC”) issued General License 2H (“GL 2H”) under the U.S. sanctions program targeting Belarus. GL 2H revokes and replaces General License 2G (“GL 2G”), which authorized U.S. persons to engage in transactions with nine sanctioned Belarusian state-owned entities. Continue Reading OFAC Revokes Key General License Under Belarus Sanctions Program
On April 15, 2021, the Biden administration issued a new executive order (the New EO) creating broad authority to impose blocking sanctions against a wide range of individuals and entities determined to be engaged in “harmful foreign activities” of the Russian Federation. In parallel with and under the authority of the New EO, the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) issued a new directive (Directive 1) prohibiting U.S. financial institutions from participating in the primary market for ruble-denominated sovereign debt or from otherwise lending funds to the Russian Federation, effective June 14, 2021. (Non-ruble Russian sovereign debt and funding have been prohibited under an existing 2019 ban, described in our previous post and below.) As part of “a new U.S. campaign against Russian malign behavior” under the New EO and existing authorities, OFAC also designated over 40 individuals and entities alleged to have attempted to influence the 2020 U.S. presidential election or to be operating in the Crimea region. Continue Reading Biden Administration Imposes New Restrictions on Russian Sovereign Debt, Authorizes Additional Sanctions
On Thursday, March 25, the Biden administration imposed blocking sanctions against Myanma Economic Holdings Public Company Limited (MEHL) and Myanmar Economic Corporation Limited (MEC), pursuant to Executive Order 14014 (the Burma EO), in response to the military’s refusal to disavow the February 1, 2021 military coup. As a result of the sanctions, all transactions and dealings within U.S. jurisdiction, including U.S. dollar interbank transfers, in which MEHL and MEC have a direct or indirect interest are prohibited, and all property within the United States or in the possession or control of U.S. persons in which either has a direct or indirect is blocked. These sanctions also extend to any entity directly or indirectly 50% or more owned by one or more sanctioned persons or entities, directly or indirectly. The move was made in coordination with the United Kingdom, which also imposed blocking sanctions against MEHL. You can read our previous blog post on the Burma EO here. Continue Reading United States Designates Myanmar Military Conglomerates
On February 18, 2021, the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) announced a $507,375 settlement with BitPay, Inc. (BitPay), a payment processor for merchants accepting digital currency as payment for goods and services, for 2,102 apparent violations of multiple sanctions programs between 2013 and 2018. The settlement highlights that financial service providers facilitating digital currency transactions must not only establish sanctions compliance programs to screen their own customers but also must monitor third-party non-customer transaction information. Continue Reading OFAC Settles with Digital Currency Payment Processor for Sanctions Violations
On February 10, 2021, in response to the February 1, 2021, military coup in Myanmar (Burma), President Biden issued an executive order (the Burma EO) authorizing the imposition of blocking sanctions against a range of individuals and entities. Concurrently, the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) designated 10 individuals (two of the individuals were already designated under a different sanctions authority) and three entities on the list of Specially Designated Nationals and Blocked Persons. All property and interests in property of persons sanctioned under the Burma EO are blocked and all transactions within U.S. jurisdiction in which a sanctioned person has an interest are prohibited. Sanctions also extend to any entity directly or indirectly 50% or more owned by one or more sanctioned persons or entities. Continue Reading United States Imposes Sanctions in Response to Military Coup in Myanmar
The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2021”.
The new year comes in the midst of an evolving landscape for economic sanctions, including the transition away from a U.S. administration that has relied on tightening economic sanctions as a key component of a number of foreign policy initiatives. In 2021, boards of directors should be aware of the ongoing implementation of new China-related sanctions, sanctions risks relating to ransomware attacks and the potential sanctions implications of foreign-policy shifts by the Biden administration.
Cleary Gottlieb partner Paul Marquardt, counsel Chase Kaniecki, and associates Nate Kurcab, Nora McCloskey, and Elise Lane co-authored the United States chapter in Lexology Getting The Deal Through Foreign Investment Review 2021.
In one of a series of lame-duck sanctions and export control actions rushed into place before the transition to the Biden Administration, on January 5, 2021, President Trump issued an Executive Order Addressing the Threat Posed by Applications and Other Software Developed or Controlled by Chinese Companies (the Executive Order) authorizing the Commerce Department to regulate or prohibit any transaction involving a U.S. person or within the jurisdiction of the United States with persons that develop or control the following Chinese connected software applications, or with their subsidiaries: Continue Reading President Trump Authorizes Restrictions on Additional Chinese Applications and Calls for Potential New Export Restrictions on Personal Data; Details to Come
As noted in our previous blog post, Executive Order (EO) 13959 introduced novel sanctions prohibiting U.S. persons from purchasing publicly traded securities (debt or equity) issued by companies designated by the U.S. Government as “Communist Chinese military companies” (CMCs), as well as an ill-defined group of securities “designed to provide economic exposure” to the targeted Chinese securities. These restrictions go into effect on Monday, January 11. While over the last two weeks, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) has begun to issue guidance regarding the implementation of EO 13959, significant uncertainties and market confusion remain. This memorandum summarizes the current status.
Please click here to read the full alert memorandum.
As part of the National Defense Authorization Act for 2021 (the “NDAA”), Congress has passed the most significant U.S. anti-money laundering (“AML”) legislation since the USA PATRIOT Act of 2001, the “Anti-Money Laundering Act of 2020” (“AMLA 2020”).
Although President Trump has threatened to veto the NDAA, the majorities supporting the legislation would be sufficient to override the veto if members do not change their votes.
The legislation requires U.S. corporations and LLCs and non‑U.S. corporations and LLCs registered to do business in the United States to disclose information on their underlying beneficial owners to the Financial Crimes Enforcement Network (“FinCEN”) of the Department of the Treasury, if there is no applicable exemption. After implementation, we expect financial institutions no longer to bear the primary burden of establishing the underlying beneficial ownership of many customers as they will have access to the disclosures (with customer consent).
AMLA 2020 also makes sweeping changes to other areas of the U.S. AML regime, including by: (i) providing more guidance and feedback to financial institutions on AML compliance programs required under the Bank Secrecy Act, (ii) increasing resources and enhancing enforcement tools to police AML compliance, and (iii) implementing initiatives to strengthen and modernize FinCEN and AML supervision writ large.
Please click here to read the full alert memorandum.