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Yes. The US uses both comprehensive and targeted economic sanctions against terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, human rights abuses, and other threats to US national security, its foreign policy or its economy. US sanctions can be directed at:
The sanctions programs are based on US foreign policy and national security goals and can be either comprehensive (in that they prohibit transactions with an entire country or region) or targeted towards certain individuals, government officials or industries within those countries.
The US’s utilization of sanctions has had a significant impact on the global financial regulatory environment, particularly in the wake of the passage of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, also known as the USA Patriot Act, enacted following the 9/11 terrorist attacks against the US Due to the need for the US to limit the financing of terrorist cells, this Act granted, among other things, the Financial Crimes Enforcement Network (“FinCEN”) powers under Section 311 of the Act to designate foreign jurisdictions and financial institutions of “primary money laundering concern,” and subjecting them to “special measures,” effectively cutting them off from the US financial system
Yes. If the UNSC mandates a sanction against an entity, the US President will issue an Executive Order implementing the sanction domestically.
Yes. The US prevents US persons, US businesses, and their foreign branches from transacting with any entity listed.
In addition to the foreign branches of US based businesses, foreign entities who are in possession of US-origin goods must also comply (in the case of certain regimes), which covers financial institutions that make USD transactions (such as European based banks). These extraterritorial sanctions are considered controversial.
Sanctions can originate through either the executive branch via Executive Orders issued by the President or the legislative branch through the enactment of specific statutes. Executive Orders, however, are subject to the underlying congressionally enacted statutory authority; most often, Executive Orders are based on the authority granted to the President by the International Emergency Economic Powers Act, which grants the President powers to govern a “national emergency” in response to an “unusual or extraordinary threat.”
Yes, the US Department of Treasury’s Office of Foreign Assets Control (“OFAC”) maintains and amends a number of lists, which will often overlap with respect to certain individuals and entities, including the following:
These entities can be found and searched on OFAC’s website at: https://sdnsearch.ofac.treas.gov/
In addition to the lists maintained by OFAC, various US regulators also maintain lists of sanctioned individuals and entities, including, but not limited to, the following:
Yes, both OFAC and BIS maintain a system through which individuals and entities can apply for a license and request authorization to transact with sanctioned entities.
There are various sanctions programs, each with potentially differing application triggers. The issuing of a license only occurs under certain limited circumstances and applications for a license are assessed on a case-by-case basis and, depending on the sanctions program or interest, can be subject to a policy of denial.
Violations of US sanctions can incur civil and/or criminal penalties, depending on the sanctions program implicated. In 2016, OFAC, BIS, and the US Department of State’s Directorate of Defence Trade Controls announced increases in the maximum civil monetary penalties that may be imposed for various sanctions programs for violations that occurred after 2 November 2015. Civil penalties for violations of sanctions enacted pursuant to the Trading with the Enemy Act (“TWEA”) have a maximum civil penalty of $85,236. Criminal penalties for wilful violations of TWEA are a fine of up to US$1,000,000 or imprisonment for up to 10 years. Civil penalties for violations of sanctions programs enacted pursuant to the International Emergency Economic Powers Act (“IEEPA”) (the majority of US sanctions programs) are the greater of US$284,582 or twice the amount of the underlying transaction. Criminal penalties for wilful violations of IEEPA are up to
US$1,000,000 per violation and, for natural persons, imprisonment of up to 20 years, potentially in addition to the monetary penalty.
Enforcement actions and corresponding penalties are on the rise, as are enforcement actions involving multiple enforcement agencies. Most significantly, BNP Paribas was fined $8.9 billion in 2014 by multiple US federal and state agencies for processing billions of dollars for sanctioned countries. Voluntary self-disclosure of a violation is considered a mitigating factor in deciding a civil penalty amount.
The US Treasury Department
Office of Foreign Assets Control
1500 Pennsylvania Avenue, NW
Washington DC 20220
T: (+1) 800 540 6322
Financial Crimes Enforcement Network
1500 Pennsylvania Avenue, NW
Washington DC 20220
T: (+1) 800 767 2825
The Bureau of Industry and Security
Outreach and Educational Services Division (located in Washington, DC)
T: (+1) 202 482 4811
Western Regional Office
(located in Newport Beach, CA)
T: (+1) 949 660 0144
Northern California branch
(located in San Jose, CA)
T: (+1) 408 998 8806
US Department of Justice
950 Pennsylvania Avenue, NW
Washington DC 20530-0001
T: (+1) 202 514 2000
T: (+1) 888 851 1920
www.federalreserve.gov/branches.htm (12 branches)
New York Department of Financial Services
1 State Street
T: (+1) 518 474 2994
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