Tag Archives: Sharon Cohen Levin

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

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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President Biden Issues Executive Order Granting Authorities to Regulate the Transfer of Sensitive U.S. Data to Countries of National Security Concern

by Eric J. Kadel Jr., Sharon Cohen Levin, Nicole Friedlander, Anthony J. Lewis, Andrew J. DeFilippis, Joshua Spiegel, and George L. McMillan

Top left to right: Eric J. Kadel Jr., Sharon Cohen Levin, Nicole Friedlander, Anthony J. Lewis.
Bottom left to right: Andrew J. DeFilippis, Joshua Spiegel and George L. McMillan. (Photos courtesy of Sullivan & Cromwell LLP).

SUMMARY

On February 28, 2024, President Biden issued Executive Order 14117, “Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern” (the “Executive Order”), delegating new authorities to the U.S. Department of Justice (“DOJ”) and other agencies to regulate the transfer of sensitive U.S. data to countries of national security concern. The Executive Order focuses primarily on personal and other sensitive information, such as U.S. persons’ financial information, biometric data, personal health data, geolocation data, and information relating to government personnel and facilities.[1]

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Export Controls Experts Comment on Enhancements to Voluntary Self-Disclosure Policies for Export Control Violations

Panelists John D. Sonderman, Director, Office of Export Enforcement, BIS; Jana del-Cerro, Partner, Crowell & Moring LLP; Michael H. Huneke, Partner, Hughes Hubbard & Reed LLP; Sharon Cohen Levin, Partner, Sullivan & Cromwell LLP; and Joseph Facciponti, Executive Director, PCCE (Moderator) (©Hollenshead: Courtesy of NYU Photo Bureau)

On January 16, 2024, the NYU Law Program on Corporate Compliance and Enforcement hosted Matthew Axelrod, Assistant Secretary for Export Enforcement at the Bureau of Industry and Security (BIS), U.S. Department of Commerce, to deliver remarks on enhancements to BIS’s corporate enforcement policy for voluntary self-disclosures of export control violations. Assistant Secretary Axelrod’s speech was accompanied by the release of an enforcement policy memo, available here. After Secretary Axelrod’s remarks, he participated in a fireside chat and took questions from the audience. The event also featured a panel of experts on export control enforcement policy. A full agenda of the event is available here. In this post, participants from the panel share further thoughts on the issues.

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Matthew Axelrod, Assistant Secretary for Export Enforcement at the United States Department of Commerce, Bureau of Industry & Security, to Announce Enhancements to Corporate Voluntary Self-Disclosure Policies for Export Control Violations at PCCE Event on January 16, 2024

Matthew Axelrod, Assistant Secretary for Export Enforcement at the United States Department of Commerce, Bureau of Industry & Security, will announce enhancements to corporate voluntary self-disclosure policies for export control violations. After delivering his remarks, Assistant Secretary Axelrod will engage in a moderated fireside chat and will be taking questions from the audience.

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DOJ, BIS and OFAC Release Guidance on Voluntary Self-Disclosures

By Eric J. Kadel, Sharon Cohen Levin, Anthony J. Lewis, Shari D. Leventhal, and Edoardo Saravalle

Left to right: Eric J. Kadel, Sharon Cohen Levin, Anthony J. Lewis, Shari D. Leventhal, and Edoardo Saravalle (Photos courtesy of Sullivan & Cromwell LLP)

DOJ, BIS and OFAC Issue Joint Guidance on Policies Relating to Voluntary Self-Disclosures of Potential Violations of Sanctions, Export Controls and Other National Security Laws

Summary

On July 26, 2023, the Department of Justice, the Department of Commerce and the Department of the Treasury released a Tri-Seal Compliance Note describing voluntary self-disclosure and whistleblower policies applicable to U.S. sanctions, export controls and other national security laws. The release does not impose new obligations, but provides an overview that (i) clarifies the salient aspects of the agencies’ voluntary self-disclosure policies (particularly following recent updates to these policies), (ii) suggests the differences between each agency’s approach to voluntary self-disclosures (including with respect to the mitigation of civil or criminal liability) and (iii) underscores the agencies’ goal of shifting the private sector’s risk calculus toward greater voluntary self-disclosures.

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Treasury Study on Illicit Finance in the High-Value Art Market

by Sharon Cohen Levin, Anthony Lewis, Eric Kadel, Jennifer Sutton, Claudia Kassner, Samantha Rosenthal, and Sheeva Nesva

On February 4, 2022, the U.S. Department of the Treasury (“Treasury”) published a study identifying art market participants and sectors of the U.S. high-value art market that may present money laundering and terrorist finance risks to the U.S. financial system (the “Study”). The Study also examines efforts that U.S. government agencies, regulators, and market participants might explore to further mitigate these risks. The Study found that the high-value art market is susceptible to abuse by illicit financial actors due to, among other characteristics, its historical culture of anonymity, the transferability of high-value items in the art trade, and the inconsistency in due diligence practices among participants. The Study further cautions that the emerging digital art market embodies all of these qualities. Coupled with the untraditional structure of this submarket’s transactions, the risk of money laundering is heightened in this emerging submarket. Treasury’s recommendations include enhanced private sector information sharing, widespread voluntary anti-money laundering/countering the financing of terrorism (“AML/CFT”) compliance programs, and consideration of international harmonization of regulation.

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FinCEN Notice on Efforts Related to Trade in Antiquities and Art

by Sharon Cohen Levin, Elizabeth Davy, Jennifer Sutton and Samantha Rosenthal

On March 9, 2021, the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) issued a notice (“Notice”) to inform financial institutions about new provisions in the Anti-Money Laundering Act of 2020 (“AMLA”) relating to the illicit trade in antiquities and art. As the Notice highlights, the AMLA amended the Bank Secrecy Act (“BSA”) to apply to dealers in antiquities and directed the Secretary of the Treasury, acting through the Director of FinCEN, to issue proposed rules to carry out the amendments. The AMLA also directed the Secretary of the Treasury to perform a study of the facilitation of money laundering and the financing of terrorism through the trade in works of art. The Notice emphasizes the heightened risk of the antiquities and art markets being exploited to launder money and finance terrorism and warns financial institutions with existing BSA obligations that illicit activity associated with the trade in antiquities and art may involve their institutions. Finally, the Notice provides specific instructions to financial institutions for filing a Suspicious Activity Report (“SAR”) related to trade in antiquities and art.^[i]

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FinCEN Guidance in Response to COVID-19

by Elizabeth Davy, Eric J. Kadel, Jr., Sharon Cohen Levin, Shari Leventhal, and John Grein

Background

On March 16, 2020, the Financial Crimes Enforcement Network (“FinCEN”) issued guidance (the “Guidance”) encouraging financial institutions to communicate concerns related to the timely filing of reports required under the Bank Secrecy Act (“BSA”) and identifying several patterns of fraudulent transactions that have emerged since the onset of the COVID-19 outbreak.[1] Continue reading →

Anti-Money Laundering and Sanctions: Trends and Developments Emerging Under the Trump Administration

By David S. Cohen, Franca Harris Gutierrez, Sharon Cohen Levin, Ronald I. Meltzer, Jeremy Dresner, David M. Horn, Zachary Goldman, Michael Romais and Semira Nikou

I. Executive Summary

Bank Secrecy Act/anti-money laundering (BSA/AML) and sanctions matters continue to be a core focus of regulators, law enforcement agencies, policymakers and Congress, and the story of the Obama and Trump Administrations on AML and sanctions is one of general continuity. Policymakers are turning to sanctions with increasing frequency and launching programs that are increasingly complex, and regulatory and enforcement agencies are devoting significant resources and attention to AML. Congress continues to debate BSA reform, while the Treasury Department and federal banking regulators have encouraged financial institutions to use technology to support BSA compliance, in the hope of making the process more effective and efficient.

As Congress, the executive branch and regulators all continue to focus a great deal of attention on AML and sanctions issues, the expectations of financial institutions to prevent financial crime are growing. Sanctions regulations are becoming more numerous, are reaching more deeply into securities markets and are branching into new areas of technology—such as cryptocurrency. Simultaneously, the AML regime’s push toward greater transparency in a number of contexts, from virtual currency regulation to beneficial ownership reform, means that financial institutions will shoulder greater responsibility for knowing their customers and their customers’ activities. Strict distinctions among different categories of financial crime are starting to collapse, as an increasing number of sanctions programs and FinCEN advisories focus on issues such as corruption and misappropriation of assets by politically exposed persons (PEPs). Continue reading →

Financial Institutions Alert: Marijuana-Related Businesses Developments in the Marijuana Industry and the Implications for Financial Institutions

By Sharon Cohen Levin, John F. Walsh, Paul M. Architzel, Franca Harris Gutierrez, Matthew T. Martens, Michelle Nicole Diamond, Emma Bennett, and Zachary Goldman

The myriad—and conflicting—state, federal and international laws governing the burgeoning marijuana industry have created a complicated legal landscape for financial institutions. In the United States, most states have legalized some form of marijuana use, but the manufacture, sale and distribution of marijuana nevertheless remains illegal under federal law. As a result, in providing financial products and services to US marijuana-related businesses (MRBs), a financial institution could risk violating the Controlled Substances Act (CSA), 21 U.S.C. § 841. Moreover, engaging in or facilitating transactions that contain proceeds from US marijuana sales could create liability under the money laundering laws.

Further complicating matters, Canada became the first major world economy to legalize recreational marijuana in October 2018. Because the US narcotics laws generally do not apply to activity that is legal abroad, providing financial products and services to Canadian MRBs would not violate the CSA or implicate the US money laundering laws. However, that is not the case in many European countries. The European Union recently passed a law expanding the extraterritorial scope of member countries’ money laundering laws with respect to certain narcotics-related offenses. These laws could now criminalize the transfer of funds from activity that is legal in the foreign country (e.g., marijuana sales in Canada) if that activity would be illegal in the home country.

Below we discuss the fragmented legal and regulatory landscape governing the marijuana industry as well as notable recent developments and their implications for global financial institutions. Continue reading →