With Russian forces massing at the Ukrainian border, the U.S. and EU have been warning of severe economic sanctions. While we wait and watch this brinksmanship play out, it is worth considering how businesses, and particularly banks, might prepare for what comes next.
How do you tackle the complicated and often seemingly insurmountable problem of human rights abuses around the world? The U.S. Government typically uses a variety of tools: diplomatic efforts, international aid, sanctions, import restrictions on forced labor – the whole carrot-and-stick universe. Enter… Export Controls.
The Treasury Department’s Office of Foreign Assets Control (OFAC) took action last Monday, November 8, 2021, and sanctioned a Latvia-based exchange, Chatex, its associated support network, and two ransomware operators for facilitating financial transactions for ransomware actors. In total, OFAC designated Chatex and 57 cryptocurrency addresses (associated with digital wallets) as Specially Designated Nationals (SDNs). OFAC took this action pursuant to Executive Order 13694, issued in 2015, which provides broad sanctions authority to address the national security threat posed by malicious cyber-actors outside the United States.
Last Friday, the Office of Foreign Assets Control (OFAC) published more targeted guidance for digital asset companies related to compliance with sanctions and best practices for mitigating risks. This guide comes on the heels of OFAC’s first enforcement action against a cryptocurrency exchange, SUEX (which we discussed in our blog here). Given the rise of ransomware threats from malicious cyber-actors that are often linked to sanctioned countries and persons, the lack of very robust regulatory oversight of the virtual currency world, the emerging nature of the technologies, and the growth of the market, it is clear that OFAC hopes crypto companies will pay more attention to sanctions risks and compliance with the issuance of this guidance. While the guide covers a lot of familiar territory, we outline a few key takeaways below.
If your company is like many, your board of directors may be demanding that you put more effort into environmental, social, and governance issues, which have become known by the now-ubiquitous acronym “ESG.” Those demands don’t come from nowhere: consumers are demanding transparency and social responsibility. In particular, if your company does business internationally, regulators are focused on international social justice issues (such as the use of forced labor) more than ever.
Yesterday, the Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions on SUEX OTC, S.R.O, a cryptocurrency exchange, for its role in laundering money to ransomware attackers. According to OFAC, SUEX facilitated criminal transactions involving at least eight ransomware variants and 40% of SUEX’s known transaction history involved bad actors. The designation of SUEX is the first time OFAC has sanctioned a virtual currency platform – and this approach may prove to be a useful regulatory tool to make malicious cyberactivity less profitable and therefore deter cyber-criminals. Treasury Secretary Janet Yellen said the government is “committed to using the full range of measures, to include sanctions and regulatory tools, to disrupt, deter, and prevent ransomware attack[s].”
This is the second of three articles on the Solar Industry and Forced Labor. Here we focus on interactions with solar module suppliers. Our first article in the series focused on regulations in this area, and our next will focus on investors and their requirements.
This is the first of three articles on the Solar Industry and Forced Labor. Here we focus on regulation. Articles in the coming weeks will focus on issues facing importers and their suppliers, and on investors and their requirements.
- U.S. Customs halts the import of silica-based products from made by Hoshine Silicon Industry Co. because the products are suspected of being produced using forced labor.
- For future imports of solar energy equipment sourced from Xinjiang, China, the United States may use Withhold Release Orders (WROs) to block entry into the United States if there is reasonable suspicion of forced labor in the supply chain.
- The renewables industry is working together and with regulators to find ways to certify its supply chains are free of forced labor.
- New law could penalize companies for complying with U.S. sanctions.
- Penalties include designation to China’s new “Unreliable Entity” list.
- Statements against the new laws could also be penalized, restricting the capacity of counsel to advise freely on compliance with U.S. sanctions and Chinese countermeasures.
On June 10, 2021, China enacted the Anti-Foreign Sanctions Law (“AFSL”), aimed at punishing countries that impose anti-China sanctions and the companies that comply with those sanctions. The law is effective immediately, and applies to any sanctions imposed against China, Chinese entities, or Chinese individuals by any third country (excluding sanctions adopted by the United Nations).
The AFSL comes in addition to the Measures on Blocking Unjustified Extraterritorial Application of Foreign Legislation (the Blocking measures) issued earlier this year. Those measures were mainly address the extraterritorial effect of U.S. sanctions against China, by punishing companies that comply with U.S. sanctions. Continue Reading Counterpunch: China Adopts Landmark Anti-Sanctions Statute to Stop U.S. Sanctions Effects Overseas