The Office of Foreign Assets Control this week sanctioned eight North Korean agents for their work facilitating sanctions evasion – six of them based in third countries – in an action the agency said comes in response to a recent military reconnaissance satellite launch by North Korea. The North Korean agents, including Russia-based Un Hyok Choe and Myong So, China-based Myong Chol Jang and Phyong Guk Kang, and Iran-based Kyong Il Kang and Sung Il Ri, engage in revenue generation and missile-related technology procurement in support of North Korea’s weapons of mass destruction program, OFAC said.
The Office of Foreign Assets Control this week sanctioned virtual currency mixer Sinbad.io, which is used as a “key money-laundering tool” by Lazarus Group, a sanctioned North Korean cyber-hacking entity. OFAC said Sinbad has processed millions of dollars’ worth of virtual currency from Lazarus Group “heists” and is used by cybercriminals to “obfuscate transactions linked to malign activities such as sanctions evasion, drug trafficking, the purchase of child sexual abuse materials, and additional illicit sales on darknet marketplaces.”
The U.S. sanctioned more than 20 people and companies this week for helping to finance Iranian military groups, including by helping the Iranian government sell oil and other commodities to overseas buyers. The Office of Foreign Assets Control said these sales help Iran generate billions of dollars for its Ministry of Defense and Armed Forces Logistics, its Iranian Armed Forces General Staff and the Islamic Revolutionary Guard Corps-Qods Force.
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The Office of Foreign Assets Control’s historic fine of virtual currency exchange Binance could signal more enforcement action against fintech companies, particularly those that may be cutting corners within their sanctions compliance programs, law firms said this month. They also said the case shows OFAC may specifically be targeting companies that don’t have enough compliance buy-in from senior management.
Six users of the virtual currency mixer Tornado Cash are appealing a U.S. court decision that upheld sanctions against the cryptocurrency service, saying the Treasury Department illegally stretched its authorities “beyond recognition” when it designated Tornado Cash last year. The six people argued that U.S. sanctions laws don’t allow Treasury to designate an “open-source software project” like Tornado Cash because it doesn’t meet the definition of “property” under the International Emergency Economic Powers Act.
The Commerce and Treasury departments earlier this month co-hosted a virtual “exchange” with small to mid-sized financial institutions, law enforcement and government agencies to discuss Russian attempts to evade export controls, the agencies announced Nov. 21. The exchange included officials from the Bureau of Industry and Security, the Office of Foreign Assets Control and the Financial Crimes Enforcement Network, and “exemplified the ongoing U.S. Government effort to further constrain and prevent Russia from accessing the international financial system and conduct economic activity to fund its invasion of Ukraine,” Treasury said. The effort came about a week after BIS and FinCEN issued another set of export control evasion red flags for financial services firms along with a new key term that banks and others can include in their suspicious activity reports (see 2311060055).
John Pisa-Relli, trade compliance counsel with GE Aerospace, will join the Office of Foreign Assets Control next month to serve as the agency’s enforcement liaison to U.S. federal and state law enforcement and regulatory agencies, he announced this week on LinkedIn. Pisa-Relli previously worked as a liaison for OFAC from 2003 to 2005.
The Office of Foreign Assets Control on Nov. 21 announced a $968 million settlement with Binance, the world’s largest virtual currency exchange, for allegedly violating multiple U.S. sanctions programs when the company allowed people who were either subject to sanctions or located in sanctioned jurisdictions to use its platform. OFAC said Binance senior management knew they were illegally allowing sanctioned users to access its online exchange platform and took steps to “undermine” the company’s own compliance procedures.
The Office of Foreign Assets Control this week published four previously issued general licenses under its Russian Harmful Foreign Activities Sanctions Regulations. The full text of each license is available in the notice.