Archive for the ‘Burma/Myanmar’ Category

BIS Amends EAR Concerning Burma

2017/01/31

In Executive Order 13742 of October 7, 2016, President Obama terminated the national emergency declared in Executive Order 13047 and revoked that Executive Order and the five additional Burma-related Executive Orders, including Executive Orders 13310, 13448 and 13464. Consistent with the President’s action, in this final rule, BIS removes and reserves § 744.22 of the EAR.

Effective December 27, 2016, the Bureau of Industry and Security (BIS) has removed the license requirements and other restrictions on exports, reexports or transfers (in country) of items subject to the EAR made to person whose property and interests in property were blocked pursuant to three Burma-related Executive Orders  that were revoked on October 7, 2016. This rule also moves Burma from Country Group D:1 to Country Group B, a less restrictive country group placement.

Note, however, that Burma will remain in Country Group D:3 (countries raising proliferation concerns related to chemical and biological weapons). Burma will also remain in Country Group D:5 (U.S. Arms Embargoes), consistent with § 126.1 of the International Traffic in Arms Regulations, 22 CFR 120–130. Therefore, the country is subject to the general license exception restrictions described in section 740.2(a)(12) of the EAR that apply to 9×515 or ‘‘600 series’’ items destined to, shipped from, or manufactured in a destination listed in Country Group D:5, except as narrowly provided in subparagraphs (a)(12)(i) and (ii). Further, Burma will remain in Computer Tier 3 in part 740 (License Exceptions) pending additional consideration. Finally, as a general matter, exports and reexports to Burma, and transfers (in country), remain subject to EAR part 744 end user and end-use based controls.

Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2016-12-27/pdf/2016-31208.pdf


Commerzbank to Pay $258,660,796 for Violating Multiple Sanctions Programs

2015/03/30

By: Brooke Driver

Commerzbank AG recently agreed to settle with OFAC regarding its 1,596 apparent violations of multiple U.S. sanctions programs, including the Iranian Transactions and Sanctions Regulations, the Sudanese Sanctions Regulations, the June 28, 2005 Executive Order 13382, “Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters,” the Weapons of Mass Destruction Proliferators Sanctions Regulations, the Burmese Sanctions Regulations and the Cuban Assets Control Regulations.

The bank’s massive $258,660,796 fine reflects the number and enormity of the apparent violations, as does the large scale of its case, with collaboration between OFAC, the U.S. Department of Justice, the New York County District Attorney’s Office, the Federal Reserve Board of Governors and the Department of Financial Services of the State of New York.


Credit Suisse Gets $536 Million Fine

2010/02/19

By: Danielle McClellan

OFAC recently announced its largest sanctions policy ever…$536 million. Credit Suisse AG, a Switzerland-based bank agreed to the momentous fine after processing 5,000 electronic funds transfers (EFTs) on behalf of banks and individuals in Cuba, Iran, Sudan, and Burma among other countries.

The settlement agreement describes an intricate scheme of processing code names, modifications to internal controls, and procedures designed to avoid any detection of involvement with Iranian banks in transactions processed through US banks. The 5,000 EFTs that were uncovered were all processed through Credit Suisse’s US subsidiary after the bank had altered information that would have otherwise been detected because of prohibited parties. The settlement also specified that several Credit Suisse executive and employees, including an individual responsible for compliance, were aware of the activities and the fact that US laws were being violated.

Credit Suisse voluntarily disclosed its own internal investigation of the illegal EFTs to OFAC in 2006, however the company failed to notify OFAC of another internal investigation it was conducting in a US dollar clearing bank for payments which involved sanctioned countries and persons. Credit Suisse did finally disclose this investigation to OFAC in 2007 but, by that point, OFAC had already launched its own investigation into these matters, causing Credit Suisse not to receive voluntary disclosure credit for those violations. The bank was charged with the following violations:
•    10 violations of Furnishing information about business relationships with boycotted countries or blacklisted persons involving transactions with Syria (15 CFR 760.2(d))
•    5 violations of Refusal to do business (15 CFR 760.2 (a))
•    5 violations of Furnishing to report the request to engage in a restrictive trade practice or foreign boycott (15 CFR 760.5)

The lessons to learn from this case are that international entities that are subject to US jurisdiction need to be aware of the risks involved in dealing with prohibited parties and when voluntarily disclosing any violations-disclose all violations, even suspected ones (OFAC’s economic sanctions enforcement guidelines offer a 50% reduction in fines with voluntary disclosure “credits”).

Information: http://www.treas.gov/offices/enforcement/ofac/civpen/penalties/12162009.pdf