In an increasingly complex global landscape, staying informed about sanctions updates is crucial for companies to help ensure compliance and mitigate risks. Recent developments underscore the importance of vigilance, including restrictions on transacting with Venezuela’s oil and gas sector and enhanced clarity on reporting requirements for the Financial Crimes Enforcement Network (FinCEN).
Staying abreast of such changes is not just a regulatory necessity but a strategic imperative for global businesses. This summary of sanctions policies highlights the fluidity of regulatory environments to help you stay informed and navigate the complex world of sanctions with confidence.
General License (GL) 44A issued for Venezuelan oil and gas Sector
On 17 April 2024, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License 44A, permitting the wind-down of transactions in Venezuela’s oil and gas sectors by 31 May 2024. This follows the decision not to renew General License 44 due to Venezuela’s unmet commitments under an electoral roadmap. The license covers the production, sale, and exportation of oil and gas, payment for related services, new investments, and debt repayments involving Petróleos de Venezuela, S.A. The updated guidance clarifies that new business ventures will not qualify as wind-down activities.
Further details about General License 44A can be read on OFAC’s website. OFAC has also updated an FAQ guidance document to reflect the reissued General License 44A.
FinCEN updates Beneficial Ownership Information (BOI) Reporting FAQs
The Financial Crimes Enforcement Network (FinCEN) has updated its Beneficial Ownership Information Frequently Asked Questions (FAQ) to provide further guidance on Corporate Transparency Act compliance.
Key updates include clarification on reporting requirements for S-Corporations, domestic entities, and homeowners’ associations. The FAQs also address complexities related to trusts and corporate trustees and specify both reporting timelines and address reporting for foreign companies. The phased rollout for authorized access to BOI will begin in spring 2024, ensuring controlled access for federal agencies and financial institutions. These updates aim to enhance clarity and compliance for reporting companies.
Read the full FAQs, and to find out more about the reporting process, visit https://www.fincen.gov/boi.
Settlement reached between SCG Plastics and OFAC
SCG Plastics Co., Ltd., part of a multinational enterprise based in Bangkok, Thailand, has agreed to pay US$20 million to settle potential civil liabilities for 467 violations of OFAC sanctions on Iran. From 2017 to 2018, SCG Plastics facilitated $291 million in wire transfers for Iranian-origin HDPE sales, causing U.S. financial institutions to unknowingly process these transactions. SCG Plastics’ shipping and documentation practices obscured the product’s Iranian origin, benefiting Iran’s petrochemical sector. The sizeable settlement amount reflects OFAC’s belief that SCG Plastics’ apparent violations were egregious and, except for certain transactions, were not voluntarily self-disclosed.
Further details can be found OFAC’s press release, and the settlement agreement.
Statute of limitation for US sanctions violations is doubled
On 24 April 2024, President Biden signed HR 815, a comprehensive foreign aid and security bill. A key section of the bill extends the statute of limitations for sanctions and certain export control violations from five to 10 years, which will allow the US Department of Justice (DOJ) and the US Treasury Department’s Office of Foreign Assets Controls (OFAC) to reach further back into historical transactions and have more time to identify, investigate and penalize violations of US sanctions.
This change affects laws like the International Emergency Economic Powers Act (IEEPA) and the Trading With the Enemy Act (TWEA), which will impact due diligence, recordkeeping, and compliance for companies.
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