Current Page: HomeAboutServicesContactSteptoe Blogs Sub-Menu International Compliance Blog OFAC Designates Nicaraguan Officials after “Sham Elections” By Ryan Pereira, Nicholas Turner, Meredith Rathbone & Peter Jeydel on November 19, 2021 POSTED IN BUSINESS & HUMAN RIGHTS, NICARAGUA On November 15, 2021, the US Treasury Department’s Office of Foreign Assets Control (OFAC) designated the Public Ministry of Nicaragua and nine Nicaraguan government officials as Specially Designated Nationals (SDNs) pursuant to Executive Order (EO) 13851 and the Nicaragua Human Rights and Anticorruption Act of 2018 (NHRAA). According to a Treasury Department press release, the designations respond to the Nicaraguan government’s repression of opposition politicians leading up to “sham” elections in November 2021. Among the designated persons is a senior banking regulatory official in Nicaragua, which underscores the risk to financial institutions in particular seeking to navigate US sanctions risks while operating in Nicaragua. Continue Reading OFAC Designates Nicaraguan Officials after “Sham Elections” Email Tweet Like LinkedIn US Immigration Announces Employment Eligibility Changes for H-4, L-2 and E Spouses By Liz LaRocca & Dana Delott on November 18, 2021 POSTED IN IMMIGRATION Recent changes to US immigration policies and interpretations regarding employment eligibility should reduce uncertainties and delays for dependent spouses in the H-4, L-2, and E visa categories. The changes, which arise from a litigation settlement, are important and address two categories: i) employment authorization incident to status; and ii) 180-day automatic Employment Authorization Document (EAD) extensions. Spouses in the L-2 and E categories qualify for both of these changes. Work-authorized H-4 spouses qualify only for the 180-day EAD extension. Continue Reading US Immigration Announces Employment Eligibility Changes for H-4, L-2 and E Spouses Email Tweet Like LinkedIn FDIC and OCC Join President’s Working Group on Financial Markets in Calling for New Stablecoin Legislation, Oversight By Nicholas Turner, Evan Abrams, Jack Hayes, Alan Cohn & Jason Weinstein on November 18, 2021 POSTED IN VIRTUAL CURRENCY On November 1, 2021, the President’s Working Group on Financial Markets (PWG), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) issued a joint report that, among other things, calls on Congress to adopt legislation to enable federal oversight of stablecoin issuers, custodial wallet providers that hold stablecoins, and others (e.g., certain DeFi products, services, and arrangements related to stablecoins). Continue Reading FDIC and OCC Join President’s Working Group on Financial Markets in Calling for New Stablecoin Legislation, Oversight Email Tweet Like LinkedIn US Government Targets Eritrea with Sanctions over Ethiopia Crisis By Jordan Cannon, Nicholas Turner, Meredith Rathbone & Ryan Pereira on November 17, 2021 POSTED IN BUSINESS & HUMAN RIGHTS, ECONOMIC SANCTIONS, ETHIOPIA On November 12, 2021, the US Treasury Department’s Office of Foreign Assets Control (OFAC) designated the Eritrean Defense Forces, the Eritrean People’s Front for Democracy and Justice (PFDJ), two government-linked commercial entities, the head of the Eritrean National Security Office, and a prominent political advisor as Specially Designated Nationals (SDNs) pursuant to Executive Order (EO) 14046 of September 17, 2021, in response to the ongoing military conflict and humanitarian crisis in northern Ethiopia. These are the first designations made under the EO and OFAC’s recently adopted Ethiopia-related sanctions program. According to a Treasury Department news release, the designations target Eritrean actors that have contributed to the situation in northern Ethiopia and “undermined the stability and integrity of the Ethiopian state.” Continue Reading US Government Targets Eritrea with Sanctions over Ethiopia Crisis Email Tweet Like LinkedIn Client Alert: Legislation Would Impact Currency, Commodity, Options, and Digital Asset Markets By Matt Kulkin, Lisa Zarlenga, Micah Green & Alan Cohn on November 3, 2021 POSTED IN FINANCIAL SERVICES On October 28, 2021, the House Rules Committee released the latest version of HR 5376, the Build Back Better Act. This draft reflects the most recent attempt to forge compromise among Democratic lawmakers, as Congress moves towards a vote on a comprehensive infrastructure bill. Section 138152 of the Build Back Better Act (the Act) would amend Internal Revenue Code (Code) section 1091, which currently disallows losses for so-called “wash sales” of “stock or securities” (or contracts or options to acquire or sell stock or securities), to apply to a wider range of investment assets and to apply to acquisitions of substantially identical assets by related parties. While the Code currently has a wash sale loss disallowance provision for stock and securities transactions, passage of this legislation would be a significant development that could affect the entire financial services industry, including proprietary trading, speculative transactions, personal investment activity, and digital currency trading activity. Wash sales could be particularly difficult to track in the context of digital assets, as there are a few cryptocurrencies (e.g., BTC and ETH) that are used to access many other protocols. For more information about this topic, read the full Client Alert at this link. Email Tweet Like LinkedIn Changes Ahead? US Treasury Publishes Outcomes of Sanctions Policy Review By Nicholas Turner, Wendy Wysong, Dave Stetson, Evan Abrams, Meredith Rathbone, Ed Krauland & Jack Hayes on October 22, 2021 POSTED IN ECONOMIC SANCTIONS, FINANCIAL SANCTIONS On October 18, 2021, the US Treasury Department published a report of its 2021 Sanctions Review of economic and financial sanctions implemented by the Office of Foreign Assets Control (OFAC) since September 11, 2001. The next day, Deputy Secretary of the Treasury Wally Adeyemo delivered a summary of the report in testimony before the US Senate Committee on Banking, Housing, and Urban Affairs. The review, which incorporates feedback from public and private stakeholders, together with Adeyemo’s testimony underscores the Treasury Department’s concern that the effectiveness of US sanctions could erode over time as non-US actors seek alternatives to the US financial system, including digital currencies and alternative payment platforms outside of US jurisdiction. The report observes that not only adversaries but also “some allies” are reducing their use of the US dollar in cross-border transactions, implying that unilateral US actions are contributing to the risk that US sanctions could become less effective. To counter this trend, the report lays out a five-point plan to “modernize sanctions” by enhancing the Treasury Department’s policy framework and processes for imposing, enforcing, and revising US sanctions. Continue Reading Changes Ahead? US Treasury Publishes Outcomes of Sanctions Policy Review Email Tweet Like LinkedIn Cybersecurity Community Beware: US Finally Enacts “Intrusion Software” Rule By Peter Jeydel & Meredith Rathbone on October 21, 2021 POSTED IN CYBERSECURITY, EXPORT CONTROL REFORM, EXPORT CONTROLS They have been almost a decade in the making, but have finally arrived: new U.S. export controls on “cybersecurity items,” including products and technology involving “intrusion software” and IP network communications surveillance. Published today but effective January 19, 2022, the interim final rule from the U.S. Commerce Department’s Bureau of Industry and Security (“BIS”) amends the Export Administration Regulations (“EAR”) to add these new cybersecurity export controls. The interim final rule is highly technical and complex, but ultimately contains a mix of good news and bad for the cybersecurity community. BIS states in its press announcement that the rule is only intended to restrict “malicious cyber activities,” but it nonetheless imposes compliance obligations and costs even when activities ultimately are not restricted. At least in this sense, the rule will impact the entire cybersecurity sector. Continue Reading Cybersecurity Community Beware: US Finally Enacts “Intrusion Software” Rule Email Tweet Like LinkedIn OFAC Issues Compliance Guidance for the Virtual Currency Industry By Dave Stetson, Jack Hayes, Evan Abrams, Meredith Rathbone, Nicholas Turner, Wendy Wysong, Ed Krauland & Alan Cohn on October 18, 2021 POSTED IN ANTI-MONEY LAUNDERING, SANCTIONS ENFORCEMENT, VIRTUAL CURRENCY On October 15, 2021, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued anticipated Sanctions Compliance Guidance for the Virtual Currency Industry and updated two related Frequently Asked Questions (FAQs 559 and 646). OFAC has published industry-specific guidance for only a handful of other industries in the past two decades; the new guidance demonstrates the agency’s increasing focus on the virtual currency (VC) sector. It also clarifies US sanctions compliance practices in ways that could lay a foundation for future OFAC enforcement actions. OFAC’s guidance was announced as part of broader US government enforcement priorities to combat ransomware, money laundering, and other financial crimes in the virtual currency sector, as noted in the Department of Justice’s recent announcement of a National Cryptocurrency Enforcement Team. The OFAC guidance was published in tandem with a Financial Crimes Enforcement Network (FinCEN) analysis of ransomware trends in suspicious activity reporting, but the guidance is directed at the VC industry in general and is not specific to ransomware. A ransomware actor who demands VC may or may not be a target of OFAC sanctions, and sanctioned actors may engage in a wide variety of VC transactions that do not involve ransomware. The recommended compliance practices in OFAC’s new guidance are focused on the full range of sanctions risks that arise from virtual currencies. Continue Reading OFAC Issues Compliance Guidance for the Virtual Currency Industry Email Tweet Like LinkedIn OFAC Issues Revised Ransomware Advisory By Meredith Rathbone, Alan Cohn, Jack Hayes, Evan Abrams & Ryan Pereira on September 29, 2021 POSTED IN ECONOMIC SANCTIONS, INDUSTRIAL SECURITY On September 21, 2021, the US Department of the Treasury’s Office of Foreign Asset Control (OFAC) issued an updated advisory on the sanctions risks of facilitating ransomware payments. OFAC issued a prior version of its advisory on October 1, 2020. In the months since, attacks have continued and target entities in the United States, including many in sensitive industries, generating increased concern over the scale of the problem. OFAC’s updated advisory is part of the Biden administration’s ongoing efforts to address the national security and economic risks posed by such attacks. The updated advisory emphasizes that OFAC “strongly discourages” victims from making ransom payments and reemphasizes the sanctions risks of doing so, but also seeks to provide victims with greater clarity about the steps that can be taken to reduce the likelihood of a public enforcement response if a company inadvertently makes or facilitates ransom payments that may have a sanctions nexus. Continue Reading OFAC Issues Revised Ransomware Advisory Email Tweet Like LinkedIn OFAC’s New Afghanistan-Related Humanitarian Licenses: Opportunities and Challenges By Nicholas Turner, Peter Jeydel, Dave Stetson, Jack Hayes, Ed Krauland, Brian Egan, Meredith Rathbone & Ali Burney on September 28, 2021 POSTED IN EXPORT CONTROLS, GOVERNMENT ENFORCEMENT On September 24, 2021, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License 14 (GL-14) and General License 15 (GL-15), authorizing certain types of humanitarian transactions involving Afghanistan that could relate to the Taliban or the Haqqani Network that would otherwise be prohibited by the Global Terrorism Sanctions Regulations (GTSR), the Foreign Terrorist Organizations Sanctions Regulations (FTOSR), or Executive Order (EO) 13224. Both the Taliban and the Haqqani Network are designated by OFAC as Specially Designated Global Terrorists (SDGTs) pursuant to EO 13224. The Haqqani Network is also designated by the US Department of State as a Foreign Terrorist Organization (FTO) under section 219 of the Immigration and Nationality Act. Furthermore, several of the individual members of the Taliban and the Haqqani Network are designated by OFAC as SDGTs. These groups have recently taken control of, and appointed officials (including at least one individual designated as an SDGT) to administer, the Government of Afghanistan and its associated agencies and organizations. As a result, there are concerns that interactions with the Government of Afghanistan could be prohibited to the extent they involve a person subject to US sanctions or expose parties to broader risks under US counter-terrorism financing laws. Continue Reading OFAC’s New Afghanistan-Related Humanitarian Licenses: Opportunities and Challenges Email Tweet Like LinkedIn POST NAVIGATION OLDER POSTS About this Blog The Steptoe International Compliance blog offers a fresh take on the issues that arise in the world of international regulatory enforcement and compliance, with a focus on the dynamic fields of export controls, economic sanctions, anti-corruption, and more. 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