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OFAC Expands the 50 Percent Rule

Last month, the Department of Treasury’s Office of Foreign Assets Control (OFAC) released new guidance related to entities owned or controlled by persons designated as a Specially Designated National (SDN) on OFAC’s SDN list.  Although the guidance leaves intact the current meaning “50 percent rule,” the rule will now allow OFAC to take a far broader approach in determining when the 50 percent rule applies.


Continue Reading New U.S. Restrictions on Russia: OFAC Guidance and Industry-Specific Sanctions

Last month, the United States announced new sanctions against Uganda in response to human rights violations, targeted discrimination, and draconian criminal penalties.  Specifically, on June 19, the Obama administration quietly revealed plans to cancel a U.S. military-sponsored exercise in Uganda, to prevent entry into the United States by certain Ugandan officials, and to discontinue or divert funds earmarked for certain aide programs involving the Ugandan Police Force, Ministry of Health, and National Public Health Institute.
Continue Reading Uganda Be Kiddin’ Me: United States Slaps On Sanctions in Response to Anti-Gay Law

There’s no end in sight for the turmoil in Ukraine. And there’s no end in sight for international sanctions against Russia for causing that turmoil. As sanctions escalate, so will the collateral damage. New sanctions announced on April 28, 2014 will not only affect Russia and Ukraine, but will affect U.S. business too. But while the United States and its allies continue to double down on their sanctions efforts, no one in Washington seems very confident in the end game.
Continue Reading Russian Against Time: New Sanctions and Lowered Expectations as Ukraine Crisis Continues

Vacation is great, but it can involve a great deal of planning.  And, paradoxically, leisure travel can involve more planning than traveling for business.  That travel-related work stands out as a centerpiece of the October 22, 2013 Diebold, Inc. (Diebold) Foreign Corrupt Practices Act (“FCPA”) settlement with the U.S. Securities and Exchange Commission (SEC) and Deferred Prosecution Agreement with the U.S. Department of Justice (DOJ).  The $48 million in penalties, disgorgement, and interest, and the 18-month compliance monitor imposed on Diebold under the settlement, serve to demonstrate the strong emphasis that the DOJ and SEC place on appropriate compliance planning, and the significant steps that will be taken against companies seen to be lacking an internal compliance compass.

Continue Reading Tryin’ to Make a Dollar out of Fifteen Cents: The Diebold FCPA Settlement Explains What Officials Did on Their Vacation

By: Matthew Riemer

On August 26, 2013, in yet another move geared toward streamlining the U.S. export control regulatory landscape, the U.S. Department of State’s Directorate of Defense Trade Controls (DDTC) published its long-awaited interim final rule on arms brokers and brokering activities.  The revamped International Traffic in Arms Regulation (ITAR) Part 129 directly addresses industry concerns regarding the scope and applicability of the current brokering requirements.  Although the rule comes nearly two years after the most recent proposed brokering rule, the new rule significantly narrows the universe of persons and activities that are subject to the ITAR’s brokering regulations.
Continue Reading Fixing a Broken Brokering Definition: DDTC Eases ITAR’s Regulatory Burden for Brokers and Brokering Activities

By: Scott Maberry and Matthew Riemer

As the new year brings in a new term for the Obama Administration, the pace of Iran sanctions shows no sign of slowing.  As we reported in October and November, Washington’s commitment to denying Iran the ability to advance its nuclear weapons program remains steadfast.  We expect the Iran Freedom and Counter-Proliferation Act of 2012 (IFCPA), included in the National Defense Authorization Act for Fiscal Year 2013, to deal another powerful blow to large sectors of the Iranian economy and significantly expand the universe of “persons” to be placed on OFAC’s List of Specially Designated Nationals and Blocked Persons (the SDN List).
Continue Reading New Law Expands Scope of Iran Sanctions In New Ways

By: Matthew Riemer and Mark Jensen

On December 17, 2012, the Securities and Exchange Commission (“SEC”) announced a settlement under the U.S. Foreign Corrupt Practices Act (“FCPA”) with Allianz SE (“Allianz”), the insurance company based in Germany, resulting in $5.3 million in civil penalties and more than $7 million in disgorgement and interest.  The settlement stemmed from a two-year investigation into allegations that an Allianz subsidiary paid bribes to government officials in Indonesia over a seven-year period and violated the FCPA’s books and records and internal controls provisions.  The Department of Justice (“DOJ”) started its own investigation into potential criminal liability for Allianz, but closed its case in 2011 with a declination letter, an event that was reported in the Wall Street Journal.
Continue Reading No Knowledge, but Hints of Omissions in the Allianz FCPA Settlement

By: J. Scott Maberry and Matthew Riemer

In the months since the signing of the Iran Threat Reduction and Syria Human Rights Act (which we will stubbornly continue to refer to here as “ITRA”), the Obama administration has worked to implement tougher sanctions against Iran.  Although many of the ITRA regulations are not expected until early November, an Executive Order issued last week marked the beginning of a much stricter era of sanctions pursuant to ITRA, the Iran Sanctions Act of 1996 (ISA), and the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA).
Continue Reading Sanctions on Foreign Subsidiaries Implemented Under Iran Threat Reduction Act