Navigant Consulting, Inc.

Transcription

1 Navigant Consulting, Inc. IIB-CSBS 2011 U.S. Regulatory/Compliance Orientation Program Anti-Money Laundering and U.S. Compliance Alma Angotti Director Disputes & Investigations July 2011

2 Table of Contents Slide title should not be larger than Palatino Linotype 24pt. I. Overview of OFAC 1 II. Recent Enforcement Actions 5 III. Enforcement Guidelines 8 IV. Recent Developments 11 V. Contact Information 17 i

3 Page 3 I. Overview of OFAC

4 I. Overview of OFAC A. OFAC, the Office of Foreign Assets Control, an office of the Department of Treasury, administers and enforces U.S. sanctions policy against: 1. Targeted foreign countries 2. Targeted individuals 3. Organizations Sponsoring terrorism 4. International narcotics traffickers Page 2

5 I. Overview of OFAC B. Imposes controls on transactions, freezes foreign assets under U.S. jurisdiction and brings enforcement actions against violators (e.g., Trading with the Enemy Act, International Emergency Economic Powers Act) 1. Blocks accounts and other property of specified countries, entities, and individuals 2. Prohibits or rejects unlicensed trade and financial transactions with specified countries, entities, and individuals Page 3

6 I. Overview of OFAC (cont d) C. Issues licenses for certain types of transactions, such as the sale of food or medicine to targeted countries D. OFAC regulations apply to: 1. All U.S. citizens and permanent residents 2. Companies located in the U.S. 3. Overseas branches of all U.S. companies 4. In some cases, overseas subsidiaries of U.S. companies Page 4

7 Page 7 II. Recent Enforcement Actions

8 II. Most Recent Enforcement Actions (cont d) A. Financial Services Banks intentionally manipulated and deleted information in SWIFT messages about U.S. sanctioned parties 1. Barclays Bank August 2010, $176 million settlement 2. ABN AMRO Bank May 2010, $500 million settlement 3. Credit Suisse AG December 2009, $536 million settlement Page 6

9 II. Most Recent Enforcement Actions (cont d) 4. Lloyds TSB Bank December 2009, $217 million settlement 5. Australia and New Zealand Bank Group, Ltd August 2009, $5.75 million settlement 6. National Bank of Australia September 2007, $100,000 fine in recognition of global remedial efforts Page 9

10 II. Most Recent Enforcement Actions B. Non- Financial Services 1. IRISL (Iranian Shipping Company) - 11 corporations and 5 individuals indicted for conspiring with IRISL to falsify records of banks in NY to access illegally the US financial system. $60 million in payments transferred illegally. June 2011, case pending. 2. Innospec, Inc., a chemical company, conducted business in Cuba through an acquired subsidiary - March, 2010, $2.2 million settlement 3. Balli Group PLC exported commercial airliners from the United States to Mahan Airlines in Iran February 2010, $15 million civil penalty Page 7

11 II. Most Recent Enforcement Actions B. Non- Financial Services 4. Aviation Services International, B.V. exported goods indirectly from the United States through a third country to Iran - March 2010, $750,000 fine 5. DHL made numerous shipments to Iran and Sudan August 2009, $9.5 million settlement Page 7

12 Page 12 III. Enforcement Guidelines

13 III. New Enforcement Guidelines A. Congress increased the statutory penalties for IEEPA violations in October Criminal penalties up to $10,000,000 and 30 years imprisonment 2. Civil penalties if $250,000 or twice the amount of the transaction value, whichever is greater B. Types of Actions 1. No Action 2. Request for Additional Information 3. Cautionary Letter 4. Finding of Violation 5. Civil Monetary Penalty Page 9

14 III. New Enforcement Guidelines (cont d) C. Assessing Penalties 1. Before a penalty is assessed OFAC determines: a. Whether the violation was self-disclosed b. Whether the violation was egregious 2. The Penalties are then assessed as follows: a. Egregious and not self-disclosed statutory maximum b. Egregious and self-disclosed ½ the statutory maximum c. Not egregious but self-disclosed ½ the statutory maximum d. Not egregious and self-disclosed ½ the transaction value with a $125,000 cap Page 10

15 Page 15 IV. Recent Developments

16 IV. Recent Developments A. SWIFT Message Type for Cover Payments (MT 202 COV) Effective November 21, The issue of enhanced transparency for international wires was initiated by the industry through the Wolfsberg Group and the Clearing House Association in April New payment message format developed by SWIFT to be released on November 21, 2009 (MT 202 COV) 3. MT 202 COVs provide fields for originator and beneficiary information, basically replicating the information required in the equivalent fields of MT 103s Page 12

17 IV. Recent Developments A. SWIFT Message Type for Cover Payments (MT 202 COV) Effective November 21, 2009 (cont d) 4. Guidance (Basel and Wolfsberg) 5. Need for regulatory guidance/expectations, especially critical for intermediary banks 6. Need of AML/OFAC program coordination Page 13

18 IV. Recent OFAC Developments (cont d) B. IAT International ACH Transactions Effective September 18, Developed by NACHA in response to concerns raised by OFAC 2. Designed to provide more transparency and address OFAC compliance 3. The new rule requires: a. New Standard Entry Class Code (SEC) IAT, a new format to identify international transactions b. New data elements in accordance with the BSA Travel Rule [31 CFR (g)], including required fields to ensure transparency in identifying senders and recipients Page 14

19 IV. Recent OFAC Developments (cont d) C. Guidance on Entities Owned by Person Property Interests in Property are Blocked 1. Companies must know ultimate beneficial owners ( UBOs ) with a 50 percent ownership interest 2. Treat the companies as being an OFAC entity 3. Simply checking lists is not sufficient due diligence is required Page 15

20 IV. Recent OFAC Developments (cont d) D. Amendments to Iran Sanctions Act 1. Imposes sanctions on any person that finances sales of refined petroleum products to Iran applies to financial institutions 2. Requires Treasury to adopt regulations that prohibit or restrict conditions on foreign financial institutions ability to open or maintain correspondent or payable through accounts in the U.S. where the FFI engages in activities that facilitate certain efforts of the Iranian government Page 16

21 IV. Recent OFAC Developments (cont d) D. Libyan Sanctions 1. Requires blocking all property and interests in property of the Government of Libya and entities owned or controlled by the Government of Libya, and designated persons, that are in the United States or within the possession or control of U.S. 2. The regulations further proscribe making any contribution or provision of funds, goods, or services (including charitable contributions) by, to, or for the benefit of any blocked party. Page 21

22 Page 22 V. Contact Information

23 Contact Information Ellen Zimiles Managing Director Global Head of Investigations and Compliance Navigant Consulting, Inc. 90 Park Avenue New York, New York Tel: Page 18