Category Archives: U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC)

New U.S. Law Extends Statute of Limitations for Sanctions Violations and Enhances Regulatory and Enforcement Focus on National Security Priorities

by Anthony Lewis, Eric Kadel Jr., Sharon Cohen Levin, Craig Jones, Adam Szubin, Amanda Houle, and Bailey Springer

Photos of the authors

Top: Anthony Lewis, Eric Kadel Jr., and Sharon Cohen Levin
Bottom: Craig Jones, Adam Szubin, and Amanda Houle
(Photos courtesy of Sullivan & Cromwell LLP)

Statute Doubles the Statute of Limitations for Sanctions Violations, Expands the Scope of Sanctions Programs, and Focuses on China’s Technology Procurement, Iranian Petroleum Trafficking, and Fentanyl Production

Summary

On April 24, President Biden signed into law H.R. 815, a sweeping national security legislative package that—in addition to providing foreign aid funding for Ukraine, Israel, and Taiwan—includes the 21st Century Peace Through Strength Act, which contains a number of provisions implementing the Biden administration’s national security priorities. As summarized below, provisions of the Act align with U.S. authorities’ continued focus on China and emphasis on sanctions enforcement. In particular, the Act:

  • Doubles the statute of limitations for civil and criminal violations of U.S. sanctions programs from five to 10 years—raising questions about retroactive application of the statute and whether authorities will amend current rules on corporate record-keeping practices;
  • Requires additional agency reports to Congress, reflecting a focus on U.S. investments in, and supply-chain contributions to, the development of sensitive technologies used by China—a topic that has likewise been the recent focus of the Department of Justice and the Department of Commerce;
  • Targets the Chinese government’s alleged evasion of U.S. sanctions on Iranian petroleum products and involvement in related financial transactions by directing the imposition of sanctions; and
  • Directs the President to impose sanctions aimed at curbing China’s alleged involvement in fentanyl trafficking and calls for forthcoming guidance for financial institutions in filing related SARs.

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Blockchain Analytics: A Reliable Use of Artificial Intelligence for Crime Detection and Legal Compliance

by Sujit Raman and Thomas Armstrong

photos of authors

From left to right: Sujit Raman and Thomas Armstrong. (Photos courtesy of authors).

Everyone these days is talking about artificial intelligence and how to use it responsibly. Among law enforcement and compliance professionals, discussions around the responsible use of AI are nothing new. Even so, recent advances in machine learning have turbocharged AI’s transformative potential in detecting, preventing, and—in a particular sense—even predicting illicit activity. These advances are especially notable in the field of blockchain analytics: the process of associating digital asset wallets to real-world entities.

In a recent, pathbreaking opinion and order, U.S. District Judge Randolph Moss rejected a criminal defendant’s challenge to the government’s evidentiary use of blockchain analytics to link him to illicit financial activity.[1] Many courts—including, just a few days ago, a U.S. district court in Massachusetts[2]—have relied on the validity of blockchain analytics when taking pre-trial actions like issuing seizure orders and authorizing arrest warrants; Judge Moss’s opinion is the first trial court examination of this powerful analytic capability. Taken together, this growing body of legal authority forcefully affirms the reliability—and therefore admissibility in court—of evidence derived from such analytics.

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Department of Commerce, Department of the Treasury, and Department of Justice Tri-Seal Compliance Note: Obligations of foreign-based persons to comply with U.S. sanctions and export control laws

by the Department of Commerce, Department of the Treasury, and Department of Justice

Photos of authors

OVERVIEW

Today’s increasingly interconnected global marketplace offers unprecedented opportunities for companies around the world to trade with the United States and one another, contributing to economic growth. At the same time, malign regimes and other bad actors may attempt to misuse the commercial and financial channels that facilitate foreign trade to acquire goods, technology, and services that risk undermining U.S. national security and foreign policy and that challenge global peace and prosperity. In response to such risks, the United States has put in place robust sanctions and export controls to restrict the ability of sanctioned actors to misuse the U.S. financial and commercial system in advance of malign activities.

These measures can create legal exposure not only for U.S. persons, but also for non-U.S. companies who continue to engage with sanctioned jurisdictions or persons in violation of applicable laws. To mitigate the risks of non-compliance, companies outside of the United States should be aware of how their activities may implicate U.S. sanctions and export control laws. This Note highlights the applicability of U.S. sanctions and export control laws to persons and entities located abroad, as well as the enforcement mechanisms that are available for the U.S. government to hold non-U.S. persons accountable for violations of such laws, including criminal prosecution. It further provides an overview of compliance considerations for non-U.S. companies and compliance measures to help mitigate their risk.

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