Last week, the Financial Crimes Enforcement Network (“FinCEN”) of the Department of the Treasury announced a Notice of Proposed Rulemaking (“NPRM”) to implement the beneficial ownership reporting requirements of the Corporate Transparency Act (“CTA”), part of the Anti-Money Laundering Act of 2020.  This legislation requires a range of U.S. legal entities, and non-U.S. legal entities registered to do business in the United States, to report information on their underlying beneficial owners to FinCEN.

The NPRM addresses and interprets four key aspects of the CTA: who must report, when they must report, what information they must report, and what penalties apply for violations of reporting requirements. Companies should review the CTA and the NPRM, including the definition of “reporting company” and the related exemptions, to determine whether it will impose reporting requirements on them. Parties may submit written comments to FinCEN about the NPRM until February 7, 2022.

Please click here to read the full alert memorandum.

On December 6, the Financial Crimes Enforcement Network (FinCEN) requested public input, through an advanced notice of proposed rulemaking (the ANPR), on the potential imposition of nationwide recordkeeping and reporting requirements on persons involved in certain residential and commercial real estate transactions pursuant to its authority under the Bank Secrecy Act (BSA).

FinCEN has previously imposed anti-money laundering (AML) requirements on certain non-bank participants in financed residential real estate transactions[2] and has used geographic targeting orders to impose specific recordkeeping and reporting requirements on title insurance companies in certain transactions involving cash purchases of residential real estate by legal entities. However, other real estate transactions, including most commercial real estate transactions that do not involve bank financing, generally do not trigger specific AML recordkeeping or reporting requirements.

The ANPR signals that FinCEN views this as a “gap” to be filled; it asserts that “money laundering risks stem from transactions in both the commercial and residential real estate sectors, and both merit appropriate regulatory treatment.” FinCEN seeks comment on, among other things, what parties should be subject to, and which transactions should trigger, such recordkeeping and reporting requirements.

Please click here to read the full alert memorandum.

Businesses applying for aid in disadvantaged regions of the EU will face new rules after December 31, 2021.

The new EU Regional Aid Guidelines increase the thresholds for aid intensity, but reduce the geographic areas eligible for aid in many Member States, which could affect the availability of aid for different companies.

Please click here to read the full alert memorandum.

On December 2, 2021, the U.S. Department of the Treasury, Office of Foreign Assets Control (“OFAC”) issued a new directive (Directive 1) prohibiting with immediate effect U.S. persons from transacting or participating in the primary and secondary markets of new Belarusian sovereign debt, in any denomination, with a maturity of greater than 90 days.[1]  In coordination with the European Union, United Kingdom, and Canada, OFAC also designated over 30 individuals and entities determined to have contributed to “ongoing attacks on democracy, human rights, and international norms” on the list of Specially Designated Nationals and Blocked Persons (“SDN List”) and issued General License No. 5, authorizing transactions and activities ordinarily incident and necessary to the wind down of transactions involving newly sanctioned Open Joint Stock Company Belarusian Potash Company or Agrorozkvit LLC, or any of their subsidiaries, until April 1, 2022.[2] Continue Reading OFAC Imposes Sanctions on Belarusian Sovereign Debt, Announces New Designations

On November 8, 2021, the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) designated a virtual currency exchange, Chatex, and its infrastructure support providers on the list of Specially Designated Nationals and Blocked Persons (SDN List) for their role in facilitating financial transactions for ransomware actors.[i]  The Financial Crimes Enforcement Network (FinCEN) also released an updated advisory on ransomware and the use of the financial system to facilitate ransomware payments.[ii]  These actions were taken in furtherance of a coordinated “whole-of-government” effort to disrupt criminal ransomware actors and the virtual currency exchanges used to launder ransom payments around the world. Continue Reading OFAC Ramps up Targeting of Ransomware-linked Actors and FinCEN Updates Ransomware Advisory

On October 15, 2021, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued “Sanctions Compliance Guidance for the Virtual Currency Industry” (the “Guidance”).  The Guidance follows recent guidance and advisory letters directed to the virtual currency industry relating to the risk of facilitating ransomware payments[1] and is OFAC’s most comprehensive virtual currency-specific advisory to date.  In particular, the Guidance directly addresses some simpler interpretive questions, discusses sanctions compliance programs and “best practices,” and provides hints about OFAC’s enforcement priorities going forward. Continue Reading OFAC Issues Sanctions Guidance to Virtual Currency Industry

The Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”) is a U.S. government interagency committee that has the authority to review investments that provide a foreign person with control or, in some cases, certain non-controlling rights over a U.S. business and evaluate the extent to which such transactions raise national security concerns.  For decades following the establishment of CFIUS, the Committee largely only reviewed transactions that parties proactively submitted to CFIUS.  This primarily was due to CFIUS’s limited resources and dedication of such resources to reviewing transactions notified to CFIUS.  In 2018, Congress passed the Foreign Investment Risk Review Modernization Act (“FIRRMA”), which, among other things, provided CFIUS with additional resources to identify transactions that: (1) could be within the jurisdiction of CFIUS, (2) potentially raise national security concerns, and (3) were not notified to CFIUS (often referred to as “non-notified transactions”). Continue Reading A Look Behind the CFIUS Non-Notified Process Curtain; How it Works and How to Handle Outreach From CFIUS

Earlier this week, the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) published a final rule (the “Final Rule”) imposing export controls on additional emerging technologies pursuant to the Export Control Reform Act of 2018 (“ECRA”).[1]  We previously wrote about the process to identify and impose export controls on emerging and foundational technologies under the ECRA, as well as the steps taken in furtherance of that process, here and here. Continue Reading New Biotech Export Controls Expand CFIUS Mandatory Notification Requirements

Maybe.

Let’s use a typical U.S. sponsored private equity fund as an example.  In this example, the limited partnership (“Fund”) is registered in the Cayman Islands and managed by a U.S.-based investment firm through a U.S.-based general partner (“GP”) entity and U.S. citizens in New York making investment decisions. Continue Reading Is Your U.S. Sponsored Private Equity Fund a Foreign Person for CFIUS Purposes?

On September 21, 2021, the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC): (i) issued an updated advisory on potential sanctions risks for facilitating ransomware payments; and (ii) designated SUEX OTC, S.R.O. (SUEX), a virtual currency exchange, on the list of Specially Designated Nationals and Blocked Persons (SDN List) for its role in facilitating financial transactions for ransomware actors.[1]  These actions demonstrate the U.S. government’s increasing focus on virtual currencies as a key means of facilitating ransomware payments and related money laundering, as well as OFAC’s commitment to combating ransomware attacks and other malicious cyber activities. Continue Reading OFAC Updates Ransomware Advisory and Sanctions Virtual Currency Exchange