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Yesterday, the Treasury Department reported that OFAC had designated 12 entities and ten individuals under Executive Order 14038. This action built on U.S. sanctions imposed in response to Belarus’s fraudulent August 2020 election, as well as President Alyaksandr Lukashenka’s support for Russia’s illegal full-scale invasion of Ukraine. The action sustains U.S. financial pressure on the Lukashenka regime for its continuing support for Russia’s war against Ukraine and the financial benefit it derives from this activity.

For the names and identification information of the designated individuals and entities, see BankersOnline's April 15, 2024, OFAC Update.

FinCEN has issued a Notice [FIN-2024-NTC1] on the use of counterfeit U.S. passport cards to perpetrate identity theft and fraud schemes at financial institutions. The Notice, which was coordinated with the Department of State's Diplomatic Security Service, provides an overview of typologies associated with U.S. passport card fraud, highlights 17 select red flags to assist financial institutions in identifying and reporting suspicious activity, and reminds financial institutions of their reporting requirements under the Bank Secrecy Act (BSA).

FinCEN reports that, from 2018 to 2023, U.S. passport card fraud has resulted in $10 million in actual losses and $8 million in additional attempted losses with over 4,000 victims in the United States. However, DSS and other law enforcement agencies assess losses associated with U.S. passport card fraud and associated identity theft are likely significantly greater and seek increased reporting by financial institutions to identify additional illicit activity. Fraud, including financial crimes related to the use of counterfeit U.S. passport cards, is the largest source of illicit proceeds in the United States and represents one of the most significant money laundering threats to the United States, as highlighted in the U.S. Department of the Treasury’s National Money Laundering Risk Assessment, the National Strategy for Combatting Terrorist and Other Illicit Financing, and FinCEN’s Anti-Money Laundering and Countering the Financing of Terrorism National Priorities.

On Friday, the Treasury Department reported that OFAC had taken action against Hamas, targeting Gaza- and Lebanon-based leaders of the terrorist group’s offensive cyber and unmanned aerial vehicle (UAV) operations. Concurrent with this action, the European Union imposed sanctions targeting Hamas.

For the names and identification information of the designated parties, see the April 12, 2024, BankersOnline OFAC Update.

Consumer Compliance Outlook's first issue for 2024 casts a Compliance Spotlight on resources to combat increased check fraud. The article describes resources from the Federal Reserve System, FinCEN, the U.S. Postal Inspection Service, the ABA, and check service providers.

The Federal Reserve Board has announced the execution of:

• a cease and desist order issued with the consent of Mode Eleven Bancorp, the holding company of Summit National Bank, both located in Hulett, Wyoming, related to Bancorp's previous strategy focused on providing banking-related services to financial technology companies through certain nonbank subsidiaries
• a written agreement with Steele Bancshares, Inc., Tyler, Texas, and American State Bank, Arp, Texas, related to identified safety and soundness deficiencies at the bank.

The Treasury Department yesterday reported that OFAC has taken additional action against Iranian military revenue generation, targeting Oceanlink Maritime DMCC for facilitating the shipment of Iranian commodities on behalf of Iran’s Armed Forces General Staff and Ministry of Defense and Armed Forces Logistics. OFAC also identified 13 vessels managed by Oceanlink Maritime DMCC as blocked property.

For identification information on the designated company and vessels, see BankersOnline's April 4, 2024, OFAC Update.

The OCC has reported that Acting Comptroller of the Currency yesterday discussed the importance of fairness in remarks given at the National Community Reinvestment Coalition Just Economy Conference 2024.

Mr. Hsu highlighted bank progress in overdraft protection program reforms since the OCC issued guidance last April and provided an update on Project REACh accomplishments regarding credit invisibles, minority depository institutions and affordable housing. Additionally, he discussed the importance of ensuring fairness as it relates to artificial intelligence and fraud.

The NCUA has announced it issued two prohibition notices and one consent order in March 2024, permanently prohibiting individuals from participating in the affairs of any federally insured depository institution.

• Sarah C. Conley, a former employee of Summit Federal Credit Union, Rochester, New York, received a notice of prohibition, having been convicted of grand larceny in connection with illegal activities at the credit union
• Carlene Bartley, formerly employed by Municipal Credit Union, New York, New York, was issued a notice of prohibition, having pleaded guilty to, and having been convicted on, charges of grand larceny
• Esther A. Olson, a former assistant branch manager of Educational Employees Credit Union, Fresno, California, received a consent order of prohibition, after a finding that she had embezzled funds from member accounts, including the withdrawal of over $60,000 from four different members' share accounts

FDIC Financial Institution Letter FIL-15-2024, issued yesterday in coordination with today's FinCEN Federal Register request for information and comment, is an advisory to reemphasize the requirements under the Customer Identification Program (CIP) Rule as it relates to collecting identifying information from customers. The advisory reminds institutions of the information required to be collected from the customer prior to account opening. The CIP rule has been in effect for more than 20 years (since October 1, 2003).

• The CIP Rule requires a bank to implement a program that includes risk-based verification procedures that enable the bank to form a reasonable belief that it knows the true identity of its customers. These requirements exist regardless of whether the bank establishes this relationship directly with the customer or through an intermediary.
• These procedures must include collecting, at a minimum, the customer’s name, date of birth (for an individual), address, and identification number.
• A bank is required to collect the taxpayer identification number (TIN) from a customer that is a U.S. person prior to account opening or another approved identification from a non-U.S. person. This applies to all accounts with the exception of credit card accounts.

Yesterday, the Treasury Department announced that OFAC, in coordination with the Republic of Korea (ROK), has sanctioned six individuals and two entities based in Russia, China, and the United Arab Emirates that generate revenue and facilitate financial transactions for the Democratic People’s Republic of Korea (DPRK). Funds generated through these actors are ultimately funneled to support the DPRK’s weapons of mass destruction (WMD) programs.

The Department also reported OFAC has designated two individuals and three entities as key financial facilitators involved in fundraising for Hamas.

For the names and identification information of the designated parties, see ourMarch 27, 2024, BankersOnline OFAC Update.