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U.S. Court Orders OFAC to Release Complaints from Victims of Sanctions Policies
By Brian Orsak
printA 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. The Lawyers' Committee for Civil Rights, an advocacy group in San Francisco, asked the Treasury Department to explain how it protects the civil rights of people with similar names to individuals identified as terrorists and drug traffickers. The committee sued the Treasury Department in 2007, claiming it didn't adequately respond to the formal information request. U.S. Judge Phyllis Hamilton on Feb. 14 ordered the agency to turn over hundreds of e-mails and letters...
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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.
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.
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.
OFAC guidance issued last month essentially blocks business dealings with any entity at least 50 percent owned "directly or indirectly" by any person targeted by OFAC sanctions, whether or not the entity itself has been sanctioned.
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.
The law, enacted last week, increases civil penalty amounts fivefold but will be used chiefly in the enforcement of "major cases," an OFAC official said Monday.
The list of specially designated nationals falls short because little information, often only a name and potential aliases, is provided about individuals named on the list, some say.
National Australia Bank's remittance of $100,000 to the U.S. Treasury's Office of Foreign Assets Control to settle charges that it violated economic sanctions against Cuba and other countries marked the largest settlement with OFAC by a bank this year. But the penalty could have been much larger.
The designation would officially block all or part of Iran's 125,000-strong Revolutionary Guard Corps, the country's elite military unit, from dealing with U.S. financial institutions.
The web tool contains links for countries, including Cuba, Iran, North Korea, Sudan and Syria, designated as terror sponsoring states. Clicking on any of the links reveals a list of companies whose most recent SEC filings disclose business activities in the country.
The agency is not checking names against a comprehensive terrorist watch list, and is slowed by a manual review process, the Treasury Inspector General for Tax Administration said.