Category Archives: Advisories

04.14.15
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March 26, 2015: FINTRAC issues advisory for FATF-identified countries

On March 26th, OSFI notified the public about an advisory issued by FINTRAC regarding dealings with countries with identified AML deficiencies. The notice summarized the measures firms are required to undertake regarding dealings with Iran and North Korea under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA):

  • Continue to classify clients, banks and other financial institutions based in, or connected to Iran or the DPRK as high risk (including branches and subsidiaries of such entities based in countries outside Iran or the DPRK);
  • Continue to apply enhanced customer due diligence measures with respect to such clients and entities; and
  • Continue to take the FATF’s concerns into account when monitoring financial transactions emanating from, or destined to Iran or the DPRK.

In addition, FINTRAC stated that they “expected” firms to take identified AML deficiencies into account when dealing with the following countries:

  • Algeria
  • Myanmar
  • Ecuador
  • Afghanistan
  • Angola
  • Guyana
  • Indonesia
  • Iraq, Lao PDR
  • Panama
  • Papua New Guinea
  • Sudan
  • Syria
  • Uganda
  • Yemen
  • Bosnia and Herzegovina (identified by MONEYVAL, not FATF)

Link:

OSFI Notice

FINTRAC Advisory

 

11.18.13
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OCC Issues Guidelines on use of outside consultants in enforcement actions

On November 12th, the Office of the Comptroller of the Currency issued OCC Bulletin 2013-33, which explains its guidelines on when it will require a regulated bank to retain an independent consultant in regards to an enforcement action. From the press release:

NR 2013-174
FOR IMMEDIATE RELEASE

November 12, 2013

 Contact: Bryan Hubbard

(202) 649-6870
Office of the Comptroller of the Currency Publishes Standards on the Use of an Independent Consultant

WASHINGTON — The Office of the Comptroller of the Currency (OCC) today published standards governing the use of independent consultants in enforcement actions involving significant violations of law, fraud, or harm to consumers.

The standards describe the criteria the OCC will use in determining whether the agency would require a national bank or federal savings association to retain a consultant, as well as the institution’s obligation to exercise due diligence to ensure the consultant has sufficient independence, capacity, resources, and expertise. The guidance clarifies how the OCC will determine whether the contracts and work plan adequately address agency’s supervisory concerns. Finally, the standards describe the process for reviewing consultant qualifications and the contractual terms for the engagement, as well as the appropriate oversight of the consultant’s performance.

“Properly used, independent consultants can help further important supervisory objectives, particularly in the context of enforcement actions,” said Comptroller of the Currency Thomas J. Curry. “However, while consultants can provide knowledge, expertise, and additional resources, we must take care to ensure they maintain independence and are subject to appropriate oversight. The standards we are publishing today help us achieve those important objectives while ensuring that a consultant’s conclusion is never substituted for the OCC’s supervisory oversight.”

The use of an independent consultant does not absolve bank management or its board of directors of their responsibility for ensuring the bank complies with OCC enforcement actions and takes all necessary actions to correct identified deficiencies. Moreover, an independent consultant is not a substitute for the supervisory judgment of the OCC. The OCC retains responsibility for supervising national banks and federal savings associations, including overseeing and assessing bank’s compliance with an enforcement action.

Note: the entire text of the Bulletin was also issued later that day in a separate email.

Link:

OCC Bulletin 2013-33

 

10.04.13
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Shame on you! FINTRAC issues new publicity guidelines

FINTRAC has updated its Administrative Monetary Penalties. In particular, the public notice received yesterday notes that they have changed their criteria for publicizing penalties. Here is the updated information:

  1. A person or entity subject to an administrative monetary penalty is named if one of the following criteria is met:
    • The person or entity has committed a very serious violation; or
    • The base penalty amount is equal to or greater than $250,000, before adjustments are made in consideration of the person or entity’s compliance history and ability to pay; or
    • Repeat significant non-compliance on the part of the person or entity.

    Specifically, FINTRAC will publish the name of the person or entity that committed the violation(s), the business sector, the nature of the violation, the city where the business is located, and the penalty amount imposed.

    You can view the public list of AMPs imposed by FINTRAC on the Public Notice page.

  2. FINTRAC publishes statistical information on administrative monetary penalties imposed by business sector.

Link:

FINTRAC Administrative Monetary Penalties

 

06.14.13
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Syrian Licensing Policy Statement, General License 11A issued

OFAC made 2 changes related to its Syrian program yesterday. First, it issued Statements of Licensing Policy on Activities Related to the Telecommunications and Agricultural Sectors of Syria and Petroleum and Petroleum Products of Syrian Origin for the Benefit of the National Coalition of Syrian Revolutionary and Opposition Forces or its Supporters:

These Statements of Licensing Policy establish a favorable licensing policy regime through which U.S. persons can request from OFAC specific authorization to engage in transactions involving the telecommunications and agricultural sectors of Syria, as well as transactions related to petroleum or petroleum products of Syrian origin for the benefit of the National Coalition of Syrian Revolutionary and Opposition Forces or its supporters.

The licensing also specifically says that the new “favorable licensing policy” does not extend to those on the SDN List or the Government of Syria. The purpose of these changes are to support better access to the Internet for the Syrian people (telecommunications), food security for the Syrian people (agricultural transactions) and, as you might surmise, fuel for the opposition forces (although not explicitly stated here).

Second, OFAC issued a new General License for Syria, which authorizes “additional services in support of nongovernmental organizations' activities to support the preservation and protection of cultural heritage sites in Syria. Syria General License 11A replaces and supersedes Syria General License 11, dated September 26, 2011.”

Specifically, it authorizes US financial institutions to conclude transactions with NGOs (non-governmental organizations), and NGOs with the Government of Syria, that support the following activities:

  1. (1) Activities to support humanitarian projects to meet basic human needs inSyria, including, but not limited to, drought relief, assistance to refugees,internally displaced persons, and conflict victims, food and medicinedistribution, and the provision of health services;

  2. (2) Activities to support democracy building in Syria, including, but not limitedto, mle of la-w, citizen participation, government accountability, and civilsociety development projects;

  3. (3) Activities to support education in Syria, including, but not limited to,combating illiteracy, increasing access to education, and assisting educationreform projects;

  4. (4) Activities to support non-commercial development projects directly benefiting the Syrian people, including, but not limited to, preventing infectious disease and promoting maternal/child health, sustainable agriculture, and clean water assistance; and

  5. (5) Activities to support the preservation and protection of cultural heritage sites in Syria, including, but not limited to, museums, historic buildings, and archaeological sites.

Links:

Licensing Policy Statement

General License 11A

 

06.04.13
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OFAC Issues guidance on IFCA sanctions

The National Defense Authorization Act of 2013 (NDAA), dated January 2nd of this year, includes the Iran Freedom and Counter-Proliferation Act (IFCA) in its Subtitle D. It's bigger than a breadbox (yes, Mr. Watchlist will write a post or two explaining it), so here are just the section listings of note:

Sense of Congress relating to violations of human rights by Iran.Imposition of sanctions with respect to the energy, shipping, and ship-building sectors of Iran.

Imposition of sanctions with respect to the sale, supply, or transfer of certain materials to or from Iran.

Imposition of sanctions with respect to the provision of underwriting services or insurance or reinsurance for activities or persons with re-spect to which sanctions have been imposed.

Imposition of sanctions with respect to foreign financial institutions thatfacilitate financial transactions on behalf of specially designated nationals.

Impositions of sanctions with respect to the Islamic Republic of IranBroadcasting.

Imposition of sanctions with respect to persons engaged in the diversionof goods intended for the people of Iran.

Waiver requirement related to exceptional circumstances preventing significant reductions in crude oil purchases.

Statute of limitations for civil actions regarding terrorist acts.

Report on use of certain Iranian seaports by foreign vessels and use of foreign airports by sanctioned Iranian air carriers.Implementation; penalties.

Applicability to certain natural gas projects.

The President today signed an Executive Order authorizing some of the sanctions in the IFCA as well as additional sanctions on Iran. These additional sanctions accomplish 3 things:

  • material support for Iran's automotive sector can be sanctioned
  • prohibit dealing in Iran's currency (the rial)
  • allow the sanctioning of persons who aid people sanctioned under various Iranian sanctions programs

OFAC has published a frequently-asked questions page for today's action, due to its length and complexity. It's one of those documents that we compliance types live for.

 

Watch this space for more detail on the IFCA and today's EO.

Links:

OFAC Notice

IFCA Executive Order

IFCA FAQ

IFCA (Subtitle D of the National Defense Authorization Act of 2013)

 

03.29.13
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OFAC Updates Guidance for sending Electronic Documents

OFAC’s Enforcement Office has added an addendum stating which fields need to be submitted for long electronic filings. The office prefers electronic filings for documents of 500 pages or more, and for those filings to be compatible with its Concordance e-discovery management system (a LExisNexis product) if it’s over 2500 pages.

Links:

OFAC notice
OFAC Office of Enforcement Data Delivery Standards