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09/18/2020

OCC enforcement actions

The OCC has released a list of enforcement orders issued in the month of August.

  • Two former senior vice presidents; the former chairman, CEO and president; and four former directors of City National Bank of New Jersey, Newark, New Jersey, were issued consent civil money penalty orders in amounts ranging from $3,000 to $70,000 (totaling $124,000) for their failures to ensure that the bank had an adequate BSA/AML compliance program, adequate risk controls, and adequate staffing of its BSA/AML function while the bank was taking on high-risk new accounts, including brokered deposits.
  • a former banker with People's United Bank, N.A., Bridgeport, Connecticut, was issued a consent prohibition order after the Comptroller found that she had stolen cash from her assigned cash drawer and made fraudulent entries so that the drawer appeared to be in balance

09/18/2020

OFAC targets Hizballah and Iranian cyber actors

The Treasury Department announced Thursday that OFAC has sanctioned two Lebanon-based companies, Arch Consulting and Meamar Construction, for being owned, controlled, or directed by Hizballah. Additionally, OFAC designated Sultan Khalifah As’ad, a Hizballah Executive Council official, who is closely associated with both companies.

Treasury also announced that OFAC has imposed sanctions on Iranian cyber threat group Advanced Persistent Threat 39, 45 associated individuals, and one front company, Rana Intelligence Computing Company, through which the Government of Iran (GOI) employed a years-long malware campaign that targeted Iranian dissidents, journalists, and international companies in the travel sector. Concurrent with OFAC’s action, the U.S. Federal Bureau of Investigation (FBI) released detailed information about APT39 in a public intelligence alert.

For identification information on the entities and individuals sanctioned by OFAC's actions, see BankersOnline's OFAC Update.

09/18/2020

Tech company settles liability for apparent OFAC violations

OFAC has announced an $894,111 settlement with Comtech Telecommunications Corp., based in Melville, New York, and its wholly-owned subsidiary, Comtech EF Data Corp., headquartered in Tempe, Arizona for four apparent violations of the Sudanese Sanctions Regulations.

Between June 2014 and October 2015, Comtech, through its subsidiary EF Data, indirectly exported warrantied satellite equipment and facilitated services and training to a government-owned entity in Sudan in apparent violation of the SSR. OFAC determined that Comtech voluntarily disclosed the apparent violations and that the apparent violations constituted an egregious case.

09/17/2020

FATF AML and Terrorist Financing report

The Financial Action Task Force (FATF) has released a report, Virtual Assets – Red Flag Indicators of Money Laundering and Terrorist Financing, to help national authorities detect whether virtual assets are being used for criminal activity. Based on more than 100 case studies collected by members of the FATF Global Network, it highlights the most important red flag indicators that could suggest criminal behavior. Key indicators in this report focus on:

  • Technological features that increase anonymity, such as the use of peer-to-peer exchanges websites, mixing or tumbling services or anonymity-enhanced cryptocurrencies
  • Geographical risks – criminals can exploit countries with weak, or absent, national measures for virtual assets
  • Transaction patterns that are irregular, unusual or uncommon, which can suggest criminal activity
  • Transaction size – if the amount and frequency has no logical business explanation
  • Sender or recipient profiles – unusual behavior can suggest criminal activity
  • Source of funds or wealth, which can relate to criminal activity

09/17/2020

OFAC sanctions two Russians for virtual currency theft

Yesterday, in a coordinated action with the Departments of Justice and Homeland Security, OFAC sanctioned two Russian nationals for their involvement in a sophisticated phishing campaign in 2017 and 2018 that targeted customers of two U.S.-based and one foreign-based virtual asset service providers. American citizens and businesses were among the victims of this malicious cyber-enabled activity, which resulted in combined losses of at least $16.8 million.

Danil Potekhin and Dmitrii Karasavidi were designated pursuant to Executive Order 13694, as amended by E.O. 13757, which targets malicious cyber-enabled activities, including those related to the significant misappropriation of funds or personal identifiers for private financial gain. Potekhin and Karasavidi are also the subjects of an indictment unsealed today by the Department of Justice.

As a result of yesterday’s action, all property and interests in property of the designated persons that are in the possession or control of U.S. persons or within or transiting the United States are blocked, and U.S. persons generally are prohibited from dealing with them. for further identification information on Potekhin and Karasavidi, see BankersOnline's OFAC Update.

09/17/2020

FinCEN proposes amending AML program requirements

FinCEN has published [85 FR 58023] an advance notice of proposed rulemaking in today's Federal Register seeking public comment on potential regulatory amendments to establish that all covered financial institutions subject to an anti-money laundering program requirement must maintain an “effective and reasonably designed” anti-money laundering program.

The ANPRM says any such amendments would be expected to further clarify that such a program assesses and manages risk as informed by a financial institution’s risk assessment, including consideration of anti-money laundering priorities to be issued by FinCEN consistent with the proposed amendments; provides for compliance with Bank Secrecy Act requirements; and provides for the reporting of information with a high degree of usefulness to government authorities.

The regulatory amendments under consideration are intended to modernize the regulatory regime to address the evolving threats of illicit finance, and provide financial institutions with greater flexibility in the allocation of resources, resulting in the enhanced effectiveness and efficiency of anti-money laundering programs.

The ANPRM also seeks comment on proposals to impose an explicit requirement for a risk assessment process and for the Director of FinCEN to issue a list of national AML priorities, to be called FinCEN’s Strategic Anti-Money Laundering Priorities, every two years.

Comments on the ANPRM will be accepted for 60 days following publication, through Monday, November 16, 2020.

09/16/2020

OFAC targets individual and two entities

The Treasury Department announced Tuesday that OFAC had designated Zineb Souma Yahya Jammeh and Nabah LTD for their roles in providing support to persons previously designated for their own corrupt behavior.

Treasury also announced OFAC's designation of a Chinese state-owned entity located in Cambodia, Union Development Group Co., Ltd., for seizure and demolition of local Cambodians’ land for the construction of the Dara Sakor development project.

Both actions were taken under authority of Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption.

For identification details, see BankersOnline's OFAC Update.

09/15/2020

FDIC guidance on Tropical Storm Isaias regulatory relief

The FDIC has issued guidance with FIL-89-2020 that includes steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Puerto Rico affected by Tropical Storm Isaias.

09/15/2020

FinCEN ending AML exemption for banks without federal regulator

FinCEN has published [85 FR 57129] a Final Rule in today's Federal Register that will remove the anti-money laundering program exemption for banks that lack a Federal functional regulator, including, but not limited to, private banks, non-federally insured credit unions, and certain trust companies.

The final rule requires minimum standards for anti-money laundering programs for banks without a Federal functional regulator to ensure that all banks, regardless of whether they are subject to Federal regulation and oversight, are required to establish and implement anti-money laundering programs, and extends customer identification program requirements and beneficial ownership requirements to those banks not already subject to these requirements.

The rule will be effective November 16, 2020, but carries a compliance date of March 15, 2021.

09/14/2020

OCC okays wildfire closures

The OCC has issued a proclamation allowing national banks, federal savings associations, and federal branches and agencies of foreign banks to close offices affected by wildfires in Oregon and Washington at their discretion.

In issuing the proclamation, the OCC expects that only those bank offices directly affected by potentially unsafe conditions will close. Those offices should make every effort to reopen as quickly as possible to address the banking needs of their customers.

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