Category Archives: Anti-Money Laundering

June 29, 2017

U.S. Treasury Announces First Money Laundering Designation Against Mainland Chinese Bank

by Jeremy Paner

Today, the U.S. Department of the Treasury announced significant actions targeting Chinese companies and individuals for their commercial involvement with North Korea.  These actions follow Trump’s vague tweet on June 20, in which he stated “[w]hile I greatly appreciate the efforts of President Xi & China to help with North Korea, it has not worked out.  At least I know China tried!”  In light of today’s designations and proposed rulemaking, that message appears to signal a willingness by the United States to directly target China.  Non-U.S. companies should carefully consider this dramatic policy shift with an understanding of the broad scope of the current sanctions authorities.  The Treasury Department may target North Korea’s commercial partners irrespective of their geographic location.

USA PATRIOT Act Section 311

The most significant action is likely the Notice of Proposed Rulemaking (NPRM) by the  Financial Crimes Enforcement Network (FinCEN) to sever China’s Bank of Dandong from the U.S. financial system under its 311 authority.  Although this is not the first listing of a Chinese bank, it will very likely be the most disruptive.  In 2007, the Treasury Department labeled the Macau-based Banco Delta Asia as a financial institution of primary money laundering concern, and in 2012 listed China’s Bank of Kunlun under an Iran-related sanctions authority.  Continue reading

May 19, 2016

U.S. Treasury Facilitates Trade with Burma, but Money Laundering and North Korean Risks Remain

by Jeremy Paner


Earlier this week, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) continued the transition of the Burmese sanctions program from comprehensive prohibitions to targeted, more limited “smart sanctions.”  The revised Burmese Sanctions Regulations contain General Licenses authorizing U.S. persons to reside in Burma and incorporate a separate General License authorizing U.S. businesses to export authorized goods and technology to and from Burma through infrastructure such as ports, toll roads and airports, and pay associated fees that would otherwise be prohibited under the Burmese sanctions.  As noted in a prior entry, OFAC made this original temporary authorization in early December 2015 after U.S. trade with Burma nearly came to a halt following the refusal of several banks to engage in trade finance involving a Rangoon port associated with Asia World Co. Ltd.  The revised sanctions program further increases pressure on Asia World through the designations of six companies in which it owns a 50 percent or greater interest.

In addition to the regulatory amendments and new designations, OFAC removed seven state-owned enterprises and three state-owned banks from the list of Specially Designated Nationals (SDN List).  Along with the bank de-listings, OFAC issued a General License authorizing most transactions involving the four remaining designated Burmese banks.[1]  The designation removals and General License allow U.S. financial institutions to provide Burmese banks with correspondent and payable through accounts, irrespective of the Section 311 Special Measures that remain imposed against Burma.  Continue reading

May 6, 2016

U.S. Designations Targeting a Major Panamanian Money Laundering Organization Not Aided by the Panama Papers Leak

by Jeremy Paner

flag-of-panama-1452444-1279x1705Yesterday, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced designations against the Panama-based Waked Money Laundering Organization, including its leaders, network of supporters and associates, and companies. According to press reports, Colombian law enforcement arrested the organization’s leader, Nidal Ahmed Waked Hatum, at a Bogota airport the day prior to the designations.

In total, OFAC added 8 individuals and 68 business entities to the List of Specially Designated Nationals (SDN List) pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). The United States Government alleged that narcotics traffickers have used these businesses to obscure the source of drug money through a variety of means, including trade-based money laundering, bulk cash smuggling, real estate development, and illicit financial services.  The designation of Balboa Bank & Trust is particularly noteworthy, as it reflects Treasury’s continued willingness to use the Kingpin Act against financial institutions.  As noted in a previous entry, OFAC had not designated a bank pursuant to the Kingpin Act prior to November 2015.

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February 2, 2016

Continued International and Domestic Coordinated Focus on Money Laundering

by Jeremy Paner

stack_100_dollar_bills_iStock_000005509580XSmallYesterday, the U.S. Drug Enforcement Agency (DEA) announced an unspecified number of arrests of Hizballah money launderers, including Mohamad Noureddine. These arrests followed the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designation of Noureddine pursuant to its counterterrorism authority. The OFAC press release for this designation identifies Noureddine as a key Hizballah money launderer. According to OFAC,  Noureddine and his company Trade Point International S.A.R.L. established a money laundering network across Asia, Europe, and the Middle East that provides bulk cash shipping and black market currency exchange services for those seeking to hide their ill-gotten gains.

Hizballah International Financing Prevention Act of 2015

Irrespective of the detention of Noureddine, foreign financial intuitions that knowingly facilitate or conduct significant financial transactions for Trade Point International S.A.R.L. may have their U.S. correspondent or payable through accounts severed. OFAC has this authority under Section 102 of the Hizballah International Financing Prevention Act of 2015, which authorizes secondary sanctions on Hizballah. Continue reading

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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