Russian Sanctions

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On March 2, 2023, U.S. Department of Justice Deputy Attorney General (DAG) Lisa Monaco once again delivered groundbreaking remarks at the American Bar Association National Institute on White Collar Crime, this time heralding a new era of corporate enforcement aimed at addressing U.S. national security priorities.  Last spring, as U.S. sanctions against Russia rolled out, DAG Monaco described sanctions as “the new FCPA (Foreign Corrupt Practices Act”)” in terms of DOJ priorities, sending shockwaves through the world of corporate compliance.  Since then, DOJ has borne that promise out largely through an aggressive campaign, championed by Task Force KleptoCapture, as we have previously written about, resulting in a large number of criminal cases targeting individual defendants. 

In this most recent announcement, DAG Monaco set a new tone: announcing that enforcement of national security-related violations—most notably sanctions evasion and export control violations—against corporations would be among the top priorities of the DOJ.  Later in the day, Matthew Axelrod, Assistant Secretary for Export Enforcement within the Department of Commerce, Bureau of Industry and Security (BIS), drove home that point, emphasizing that companies should no longer view export control and sanctions violations as “technical violations,” but would be well advised to view them as enterprise risks given the prioritization these issues are receiving within the various government enforcement agencies, including the DOJ.  Further highlighting this new landscape, the Department of Treasury Office of Foreign Assets Control (OFAC) spoke at the ABA White Collar Conference for the first-time ever on March 2 and the DOJ, BIS and OFAC issued their first-of-its kind joint compliance guidance the same day, relating to third party-intermediary risks. 

It was a day filled with sea-changing announcements for sanctions and export control enforcement, but the takeaway was simple: Sanctions and export controls really are the new FCPA in terms of corporate enforcement priorities and related compliance expectations.  The Money Laundering and Asset Recovery Section (MLARS) has already begun conducting sanctions- and export-related investigations.Continue Reading DOJ to Prioritize Enforcement of Sanctions and Export Control Violations Against Corporations

The U.S. Treasury is taking a fresh look at requiring investment advisers to meet the same standards as banks and broker-dealers, including potentially subjecting investment advisers to the BSA/AML compliance and reporting requirements that apply to other types of financial institutions. …
Continue Reading U.S. Treasury Renews Focus on AML Risks for Investment Advisors

On April 14, 2022, the Financial Crimes Enforcement Network (FinCEN) issued an advisory focusing on detecting kleptocrats (i.e., government officials who appropriate national resources for personal gain) and the proceeds of foreign public corruption and preventing them from entering the U.S. financial system. This guidance is the latest in a series of advisories FinCEN has issued focusing on Russian kleptocracy, and is part of a broader strategic initiative among key U.S. and global law enforcement and regulatory agencies focusing on corruption and money laundering as critical national security risks. In particular, the advisory highlights the enhanced focus of U.S. enforcement resources on the attempts of Russian oligarchs to evade sanctions imposed by the United States and its allies in response to Russia’s invasion of Ukraine.

U.S. law enforcement and regulatory agencies have high expectations as to the compliance efforts U.S. companies will adopt to meet this moment. Enforcement against companies and individuals involved in missteps is likely to be aggressive and robustly resourced. Indeed, the Department of Justice (DOJ) announced on April 6, 2022, in connection with the unsealing of an indictment of a Russian oligarch charged with U.S. sanctions violations, that it will “work relentlessly to counter Russian aggression, including by enforcing U.S. sanctions law.”
Continue Reading As Russia Sanctions Mount, FinCEN Issues Advisory on Kleptocracy and Foreign Public Corruption