Monthly Archives: January 2016

January 21, 2016

The First OFAC Sanctions Penalty of 2016 Continues Clear Trend of Enforcement Prioritization

by Jeremy Paner

2016 target 3d render illustrationYesterday, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced its settlement with WATG Holdings, Inc., and its United Kingdom  subsidiary, Wimberly Allison Tong and Goo Ltd. (WATG-UK) arising from apparent violations of the Cuban Assets Control Regulations. The parties agreed to settle potential civil liability for a payment of $140,000.

According to the settlement announcement, WATG-UK violated the U.S. embargo against  Cuba by entering into a contact worth approximately $350,000 to provide architectural and design work related to a hotel project in Cuba. WATG-UK received three payments for its services from a Qatari company between October 2009 and May 2010. OFAC indicated that WATG was also directly involved in the dealings with Cuba, as it wrote-off about $70,000 from the original value of the contract.

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January 13, 2016

U.S. Anti-Money Laundering Regulator Targets Shell Company Purchasers of Residential Real Estate

miami by Jeremy Paner

Today, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued Geographic Targeting Orders (GTOs) to impose anti-money laundering (AML) recordkeeping and reporting requirements on certain title insurance companies in the Manhattan borough of New York City and Miami-Dade County, Florida. These orders require certain title insurance companies to identify and report the “beneficial owners” of shell companies used in cash purchases of high-end residential real estate.

nycSince her arrival at FinCEN, Director Shasky has aggressively used the GTO authority, especially on businesses located in Miami, Florida. In addition to today’s orders, FinCEN has issued and renewed GTOs over the past two years on the following businesses:

  • Electronics exporters in and around Miami, Florida;
  • Common carriers of currency operating around the United States-Mexico land border in Texas, between and including the Del Rio/Amistad Dam and Brownsville/Los Indios Ports of Entry and Departure;
  • Common carriers of currency operating around the land border between San Diego County, California, and the United Mexican States at the San Ysidro and Otay Mesa Ports of Entry and Departure;
  • Cashers of Federal tax refund checks in Miami-Dade County and Broward County, Florida; and
  • Businesses in the Los Angeles Fashion District.

Section 5326 of the Bank Secrecy Act (BSA) authorizes the Treasury Department to issue orders requiring certain reporting and recordkeeping necessary to prevent evasion of the Act.  These orders may be imposed upon both domestic financial institutions and non-financial trades or businesses in a specified geographic area. FinCEN’s regulatory implementation of this BSA authority is found in 31 C.F.R. 1010.370.
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January 7, 2016

OFAC Continues to Reveal Hizballah’s Global Reach

by Jeremy Paner

iran-resistanceToday, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) added a Hizballah financier and a Lebanon-based telecommunications company  to the Specially Designated Nations (SDN) List, pursuant to its counterterrorism designation authority. According to the OFAC press release announcing these designations,  Ali Youssef Charara has invested millions of dollars on behalf of Hizballah.

Charara’s telecommunications company, Spectrum Investment Group Holding SAL, purports to provide services in the Middle East, Africa and Europe. OFAC designated 23 individuals and entities last year based on their ties to Hizballah. In addition to the expected connections with Lebanon, Syria, and Iran, these 2015 designees are linked to Nigeria, Sierra Leone, Iraq, and most interestingly, China.

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