Violations and their implications – Penalties, Tarnished Reputation, Lost Opportunities
  • Sustainable Anti-Bribery Compliance – Profitable and Smarter Option
  • Understand the effect of cross border bribery and corruption legislation and regulation on your AML operations
  • Identify vulnerabilities in your institution’s program and pinpoint your highest risk areas
Colum Bancroft, Managing Director, Financial Investigations, Kroll
Eli Cohen, General Counsel, Euroclear Bank Hong Kong Branch
By Eli Cohen 
"The Office of Foreign Assets Control (OFAC) is the part of the US Treasury Department that is responsible for enforcing and administering the several US sanctions regimes.  This includes sanctions regimes in respect of Cuba. North Korea and Iran among others.  It is the Iran sanctions regime which is particularly of interest.  In the past the OFAC rules applied only to US entities, US citizens wherever located and US residents including persons travelling in the US for example on a business trip. 
In 2010, this approach changed with the enactment of The Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA).  This law introduced for the first time the possibility of a secondary boycott which would apply to non-US financial institutions.  This law allowed the Treasury Department to require US financial institutions to restrict or prohibit account access to non-US financial institutions which cannot certify that they do not have accounts for restricted Iranian banks including the Central Bank of Iran.  However, the CISADA rules required the Treasury to designate the non-US financial institutions for which the sanctions applied and no such designation occurred. 
The US Congress then passed the National Defense Authorization Act for Fiscal Year 2012 in December 2011 which required the Treasury to implement the CISADA rules.  The US Treasury did so on 27 February 2012 with respect to privately owned non-US financial institutions and announced that effective 28 June 2012 it would do so with respect to government owned or controlled non-US financial institutions. 
In addition, on 06 February 2012, President Obama signed an Executive Order freezing all assets of the Central Bank of Iran and other designated Iranian bank located in the US.  The freeze applies to assets held indirectly through non-US financial institutions.  Accordingly, such non-US financial institutions have undertaken additional due diligence to ensure that they are not inadvertently holding such assets." 
For further information, please contact:
Eli Cohen, General Counsel, Euroclear Bank Hong Kong Branch


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