Keeping up with the ever-evolving landscape of global sanctions is crucial for businesses that operate internationally, to ensure compliance and help mitigate risks. Our August update covers a critical updates from the EU Council and FinCEN, adjustments to existing measures from OFAAC and the UK’s OFSI, and a settlement with State Street Bank and Trust Company over violations related to Ukraine-/Russia-related sanctions.
EU revises “ownership” test for restrictive measures
The EU Council has released an update to its best practices for the effective implementation of restrictive measures. A notable change involves the EU’s “ownership” test threshold. The criterion for determining whether an entity is considered “owned” by another has shifted from “more than 50%” to “50% or more.” This adjustment aligns the EU’s position with that of the United States while diverging from the United Kingdom’s stance. This clarification brings important implications for entities under EU jurisdiction when evaluating ownership structures and ensuring compliance with sanctions. Read the updated best practices.
FinCEN issues alert on Israeli extremist violence
On July 11, the U.S. Financial Crimes Enforcement Network (FinCEN) issued a supplemental alert highlighting new red flags for identifying and reporting suspicious activities related to the financing of Israeli extremist violence in the West Bank. Financial institutions in the U.S. are urged to continue using the existing Suspicious Activity Report (SAR) code (FIN-2024WBEXTREMISM) and adhere to their reporting obligations under the Bank Secrecy Act (BSA). This alert emphasizes the ongoing need for vigilance and timely reporting in the context of global financial crime and sanctions compliance. Learn more about this supplemental alert.
OFSI Expands FAQs on Russia trust services sanctions
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued new guidance following recent legislation extending the statute of limitations for certain sanctions violations. OFAC can now initiate enforcement actions for civil violations of sanctions based on the International Emergency Economic Powers Act (IEEPA) or the Trading with the Enemy Act within 10 years from the date of the violation, provided the violation occurred after April 24, 2019. This extended timeframe highlights the need for ongoing diligence in monitoring and reporting compliance activities. Learn more via OFAC’s enforcement release.
OFAC extends statute of limitations for sanctions violations
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued new guidance following recent legislation extending the statute of limitations for certain sanctions violations. OFAC can now initiate enforcement actions for civil violations of sanctions based on the International Emergency Economic Powers Act (IEEPA) or the Trading with the Enemy Act within 10 years from the date of the violation, provided the violation occurred after April 24, 2019. This extended timeframe highlights the need for ongoing diligence in monitoring and reporting compliance activities. Learn more via OFAC’s enforcement release.
Notice on beneficial ownership information requirements
FinCEN has released a notice clarifying beneficial ownership information requirements under the Corporate Transparency Act. This notice explains that certain entities, including many small businesses, must report ownership details to FinCEN. It also outlines how financial institutions should collect and handle this information under federal customer due diligence requirements. Ensuring accurate reporting of beneficial ownership is critical to maintaining compliance with both national and international regulatory standards. Learn more via the Beneficial Ownership Information Reference Guide.
OFAC settlement with State Street Bank and Trust Company
In a recent settlement, OFAC announced a $7.45 million agreement with State Street Bank and Trust Company and its subsidiary, Charles River Systems, Inc. This settlement resolves potential civil liabilities for 38 violations related to Ukraine-/Russia-related sanctions, including accepting payments outside of the applicable debt tenor and issuing invoices for sanctioned entities. The settlement underscores the importance of adhering to sanctions regulations and the potential consequences of non-compliance. For more information, please visit the following web notice and settlement agreement.
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