Insights

On May 22, 2024, the U.S. Department of Justice’s National Security Division (NSD) announced its first declination to prosecute a company under its Enforcement Policy for Business Organizations (Enforcement Policy).

On April 24, 2024, President Biden signed into law the National Security Supplemental fiscal package, which includes significant new sanctions and export controls authorities. Although the U.S. foreign aid commitments for Ukraine, Israel, and Taiwan headline the new law, it also (1) expands the statute of limitations for U.S. sanctions violations; (2) includes new authorities for the President to coordinate sanctions efforts with the European Union and the United Kingdom; (3) expands sanctions and export controls on Iran (including some targeted at Chinese financial institutions); and (4) includes new sanctions authorities targeting terror groups.

On March 29, 2024, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”), issued a “notice and request for information and comment” (“RFI”) seeking comments on the Bank Secrecy Act’s (“BSA”) customer identification program (“CIP”) rule.  The CIP rule requires U.S. banks to collect a taxpayer identification number (“TIN”) from a U.S. person before opening a new account for that person.  For individuals, this TIN will be a Social Security number (“SSN”).

On September 11, 2023, the U.S. Department of Justice (“DOJ”)’s National Security Division (“NSD”) announced the appointment of its first-ever Chief Counsel and Deputy Chief Counsel for Corporate Enforcement, fulfilling a commitment made by DOJ in March 2023. Both appointees are prosecutors with significant experience prosecuting large-scale, international corporate crimes, commensurate with DOJ’s recent emphasis on holding accountable corporate actors that violate national security laws, including sanctions and export controls.

The Outbound Investment Program will be implemented through regulations issued by Treasury that will require notification for, or will otherwise prohibit U.S. persons from undertaking, certain transactions involving “covered national security products or technologies” and entities connected to a “country of concern.” Accordingly – concurrent with the Executive Order – Treasury released an Advance Notice of Proposed Rulemaking that provides some potential definitions of these terms, but the exact definitions and the details of the regulations will be developed through public notice and comment that concludes on September 28, 2023. Treasury also published a Fact Sheet that provides additional information on the proposed details and scope of the outbound investment prohibitions and notification requirements, which will likely not be finalized until 2024 sometime after Treasury has published draft regulations and gathered another round of public comments.

On July 26, 2023, the U.S. Department of Justice (“DOJ”), the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”), and the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued a Tri-Seal Compliance Note outlining their respective voluntary self-disclosure (“VSD”) procedures for potential violations of U.S. export controls and sanctions.  This announcement highlights the agencies’ focus on compliance with export controls, sanctions, and other U.S. national security laws, and reminds industry of the incentives for voluntarily disclosing potential violations, including mitigation of civil and criminal penalties. 

On February 24, 2023, the United States and other G7 nations announced a number of new sanctions and export control measures coinciding with the one-year mark of Russia’s military invasion of Ukraine. Shortly after these expansive sanctions and export controls were announced, the Departments of Justice (“DOJ”), the Treasury (“Treasury”), and Commerce (“Commerce”) issued their first-ever joint guidance regarding a planned crack-down by these agencies on sanctions and export controls evasion related to Russia in concert with DOJ’s sweeping announcements of a renewed focus on corporate compliance with sanctions and export controls.

On October 7, 2022, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) simultaneously published a final rule strengthening the antiboycott regulations in Part 766 of the Export Administration Regulations (EAR) (the “Final Rule”), as well as a memorandum on the new rule’s implementation (the “Final Rule Memo”), issued by the Assistant Secretary for Enforcement. Pursuant to the Final Rule, BIS will make three primary changes:

According to recent reports, Ukrainian President Zelenskyy has directly requested that the United States designate Russia as a State Sponsor of Terrorism (“SST”), an action that the United States has been considering for some time. The designation would have far-reaching implications and would automatically trigger some of the most aggressive unilateral sanctions in the United States’ arsenal, including restrictions on financial transactions, defense exports and sales, and foreign aid. These would further ramp up pressure from even the existing slew of sanctions imposed on Russia and its oligarchs.

On October 14, 2019, the Trump Administration followed through on its recent threats by issuing a new Executive Order (EO) (as yet unnumbered) establishing sanctions that effectively target the Turkish Government in response to the latter’s military intervention into Northern Syria. Using this authority, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) simultaneously added both the Turkish Ministry of Energy and Natural Resources and the Turkish Ministry of National Defence, as well as three Turkish Ministers to its list of Specially Designated Nationals (SDN), creating not only immediate risk for U.S. Persons (defined below) currently engaged in transactions with these new SDNs but also on-going risk of designation for non-U.S. persons that continue to transact with the targeted government agencies. Click through for more details.

New U.S. sanctions were announced last week on Cuba, Russia, and Iran, though none of the new restrictions has an immediate effect.

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As part of Crowell & Moring’s “First 100 Days” series, Cari Stinebower, Scott Douglas, and Mariana Pendás sit down to discuss the state of U.S.-Cuba relations at the start of the Trump administration, updating our Nov. 23 podcast on sanctions under the Trump Administration. Cari, a partner with the firm, previously worked as an attorney advisor for the Office of Foreign Assets Control. Scott is a senior policy director with our Government Affairs Group and previously served as finance director for Senator Mitch McConnell. Mariana is an international associate with the firm’s International Trade Group; she is a dual-qualified lawyer in Spain and New York and admitted to practice under the Brussels’ E List.

On January 13, 2017, the United States suspended most of the comprehensive embargo that it has maintained on Sudan since the Clinton Administration. As described further below, new authorizations have been issued to permit U.S. persons to engage in most commercial activity with Sudan, including the exportation of most goods or services to Sudan and persons in Sudan, and to unblock property previously frozen under these sanctions. However, sanctions relating to the Darfur region of Sudan remain, and these, along with other sanctions programs relating to terrorism and weapons of mass destruction, may continue to affect transactions with Sudan.

The months of November and December saw major steps by both the U.S. and the United Nations targeting the Democratic People’s Republic of Korea’s (DPRK) nuclear and ballistic missile programs. First, on November 9, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) published a final rule imposing correspondent banking restrictions on U.S. financial institutions in an effort to wall off North Korean banks from the U.S. financial system. Citing ongoing concerns over the DPRK’s ability “to access the international financial system to support its WMD and conventional weapons programs,” the rule exercises FinCEN’s authority under Section 311 of the USA PATRIOT Act to impose so-called “special measures,” requiring covered financial institutions to both prevent North Korean banks from opening correspondent accounts and to take steps to ensure that North Korean banks do not indirectly make use of their correspondent relationships with other foreign financial institutions.

In the third podcast of Crowell & Moring’s “First 100 Days” series, Partners Carlton Greene and Cari Stinebower of the firm’s International Trade Group sit down to discuss what sanctions might look like under President-elect Trump’s new administration. Prior to joining the firm in 2015, Carlton served as chief counsel of FinCEN and also worked for OFAC at the Dept. of the Treasury. Cari has previously worked as an attorney advisor for the Office of the General Counsel at OFAC.

On Friday, October 7, 2016, President Obama signed an Executive Order (EO) for the “Termination of Emergency with Respect to the Actions and Policies of the Government of Burma.” This EO is the promised follow-up to the President’s announcement last month that the U.S. would end its sanctions on Burma. This major policy shift also included a Presidential Proclamation on September 14, 2016, which restored preferential treatment for Burma as a beneficiary developing country under the Generalized System of Preferences (GSP) program. See Crowell & Moring’s previous alert for more information.

On Wednesday, September 14, 2016, President Obama announced two major improvements to U.S.-Burma relations during his first in-person meeting with Aung San Suu Kyi since she became Burma’s de facto leader in April. First, the U.S. will fully terminate its current sanctions on Burma (Myanmar) in the coming days. Second, it will add Burma to the list of beneficiary countries for preferential imports under the Generalized System of Preferences (GSP).

In this issue:

In this issue: