OFAC Updates

OFAC Enforcement Action: Expedia Group

Expedia Group, Inc. (“Expedia”) Settles Potential Civil Liability for Apparent Violations of the Cuban Assets Control Regulations: Expedia Group Inc., headquartered in Bellevue, Washington, on behalf of itself and its subsidiaries worldwide, has agreed to pay $325,406 to settle potential civil liability for assisting 2,221 persons with Cuba-related travel services prior to agency notice in apparent violation of the Cuban Assets Control Regulations, 31 C.F.R. part 515 (CACR). Specifically, between on or about April 22, 2011 and on or about October 16, 2014, Expedia dealt in property or interests in property of Cuba or Cuban nationals by assisting 2,221 persons — some of whom were Cuban nationals — with travel or travel-related services for travel within Cuba or between Cuba and locations outside the United States.

The apparent violations occurred because certain Expedia foreign subsidiaries lacked an understanding of and familiarity with U.S. economic sanctions laws and Expedia employees overlooked particular aspects of Expedia’s business that presented risks of noncompliance with sanctions. Specifically, electronically booked travel resulted from failures or gaps in Expedia’s technical implementations and other measures to avoid such apparent violations. With respect to at least one foreign subsidiary, Expedia failed to inform the subsidiary until approximately 15 months after Expedia acquired the subsidiary that it was subject to U.S. jurisdiction and law. Expedia was slow to integrate the subsidiary into the Expedia corporate family, including with respect to compliance with U.S. sanctions, and the subsidiary continued operating independently during the integration period.

The base penalty for the self-disclosed violations was $556,250. The Enforcement Information does not say if the violations were egregious, but notes that they occurred prior to agency notice. As explained in Monday’s post, the rules for Cuba-related penalties are different

The mitigating factors playing into the final penalty:

1. Expedia failed to exercise a minimal degree of caution or care in avoiding the conduct that led to the apparent violations. Moreover, based on the number of apparent violations, the length of time over which the apparent violations occurred, and the number of Expedia entities involved in the apparent violations, the apparent violations appear to have resulted from a pattern or practice of conduct.

2. The apparent violations harmed the sanctions program objectives of the CACR, based on the number of apparent violations and the length of time over which the apparent violations occurred.

3. Expedia is a sophisticated international travel service provider, providing global travel services to customers located worldwide.

And the mitigating factors:

1. Expedia has not received a penalty notice or Finding of Violation from OFAC in the five years preceding the earliest transaction giving rise to the apparent violations.

2. After discovering the apparent violations, Expedia implemented significant remedial measures to strengthen its U.S. economic sanctions compliance program throughout the Expedia corporate family, including domestic and foreign direct and indirect subsidiaries.

3. Expedia cooperated with OFAC’s investigation by submitting data analytics associated with the apparent violations, responding to OFAC’s requests for additional information, and entering to multiple tolling agreements.

And these were Expedia’s remediation steps:

Consistent with the settlement agreement with OFAC, Expedia has committed to enhancing its compliance procedures by ensuring that Expedia: (1) has a management team in place that is committed to compliance; (2) conducts regular risk assessments to ensure that Expedia’s internal controls appropriately mitigate its sanctions-related risks; (3) conducts regular testing and audits; and (4) provides ongoing sanctions compliance training throughout the Expedia corporate family. Additionally, Expedia has steadily increased its resources dedicated to compliance with U.S. sanctions, resulting in substantially more robust staffing and resources corporate-wide, and taken measures to increase compliance with U.S. sanctions, including enhanced screening methods and implementation of automated software restrictions.

And the lesson to be learned:

This case illustrates the benefits persons subject to the jurisdiction of the United States – including, with respect to OFAC’s Cuba sanctions, entities owned or controlled by U.S. persons – can realize by implementing corporate-wide compliance measures commensurate with their sanctions risks. U.S. companies can mitigate risk by conducting sanctions-related due diligence both prior and subsequent to mergers and acquisitions, and taking appropriate steps to audit, monitor, train, and verify newly acquired subsidiaries for OFAC compliance. U.S. foreign subsidiaries are subject to the CACR, and U.S. person parent companies may face potential exposure to civil monetary penalties vis-à-vis the actions of their foreign subsidiaries. Foreign acquisitions can pose unique sanctions risks, to which a U.S. person parent company should be alert at all stages of its relationship with the subsidiary.

Link:

OFAC Enforcement Information

The rules for Cuba-related CMPs are different.

From the Cubasphere settlement:

The Cuba Penalty Schedule, 68 Fed. Reg. 4429 (Jan. 29, 2003), sets a $2,000 penalty for the provision of travel services occurring “prior to agency notice,” plus $500 per person assisted, and a $15,000 penalty for the provision of travel services occurring “subsequent to agency notice,” plus $500 per person assisted.

June 13, 2019: CMPs getting inflated again…

Under the Federal Civil Penalty Inflation Adjustment Act of 1990 (amended under the Debt Collection Improvement Act of 1996 and the Federal Civil Penalties Inflation Adjusement Act Improvements Act of 2015), federal agencies get to adjust their penalty schedules for inflation. For OFAC, that means the statutory maximums imposed for non self-disclosed, egregious violations.

  • The Trading with the Enemy Act (TWEA) penalties, which, until a few years back, were capped at $65,000 per violation (originally I believe they started out at some ridiculously low figure, like $11,000), will now land at $89.170.
  • Under the International Emergency Economic Powers Act (IEEPA), which started out with $250,000 penalties for low-value transactions, the maximum penalty will now be $302,584 or twice the transaction amount.
  • The Foreign Narcotics Kingpin Designation Act (FNKDA or Kingpin Act) maximum CMP, which started out at $1,000,000 back in the day, now tops out at $1,503,470
  • The maximum penalty under the Antiterrorism and Effective Death Penalty Act (AEDPA) goes from $77,909 to $79,874, while that under the Clean Diamond Trade Act (CDTA) goes from $13,333 to $13,669

Note: Mr Watchlist has never seen, since he started following this stuff, fines under AEDPA or CDTA. AEDPA is not really a surprise because many Sanctions programs are authorized under AEDPA and IEEPA, and IEEPA has a more punitive CMP scale.

Links:

OFAC Notice

Treasury Notice

3 for 1: OFAC announces 3 Cuba-related enforcement actions

Settlement Agreements between the U.S. Department of the Treasury’s Office of Foreign Assets Control and Expedia Group, Inc.; Hotelbeds USA, Inc.; and Cubasphere, Inc. and an Individual

6/13/2019

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced a $325,406 settlement with Expedia Group, Inc. (“Expedia”).  Expedia, headquartered in Bellevue, Washington, on behalf of itself and its subsidiaries and affiliates worldwide, has agreed to pay $325,406 to settle its potential civil liability for providing Cuba-related travel services in apparent violation of the Cuban Assets Control Regulations, 31 C.F.R. part 515 (CACR).  Specifically, between on or about April 22, 2011 and on or about October 16, 2014, Expedia dealt in property or interests in property of Cuba or Cuban nationals by assisting 2,221 persons — some of whom were Cuban nationals — with travel or travel-related services for travel within Cuba or between Cuba and locations outside the United States.   These transactions appear to have violated § 515.201(b) of the CACR.  OFAC determined that the apparent violations were voluntarily self-disclosed to OFAC and occurred prior to agency notice.  

For more information, please visit the following web notice.

OFAC today separately announced a $222,705 settlement with Hotelbeds USA, Inc. (“Hotelbeds USA”).  Hotelbeds USA, incorporated in Florida, is a U.S. subsidiary of Hotelbeds Group, headquartered in Mallorca, Spain.  Hotelbeds USA has agreed to pay $222,705 to settle its potential civil liability for assisting persons with unauthorized Cuba-related travel services in apparent violation of the CACR.  Specifically, between the approximate dates of December 2011 and June 2014, Hotelbeds USA provided Cuba-related travel services to 703 non-U.S. persons in apparent violation of § 515.201(b) of the CACR.  OFAC determined that the apparent violations were not voluntarily self-disclosed to OFAC and occurred prior to agency notice.   

For more information, please visit the following web notice.

OFAC today also separately announced a $40,320 settlement with an individual (the “Individual”) and Cubasphere, Inc. (“Cubasphere”).  The Individual, as well as Cubasphere, on whose behalf the Individual also acted, have agreed to pay $40,320 to settle their potential civil liability for apparent violations of the CACR.  Specifically, the Individual and Cubasphere dealt in property in which Cuba or Cuban nationals had an interest, in apparent violation of § 515.201(b) of the CACR, by engaging in unauthorized Cuba travel-related transactions by assisting  104 persons on four separate trips to and within Cuba, from on or about December 30, 2013 to on or about February 22, 2014.  OFAC determined that the apparent violations were not voluntarily self-disclosed to OFAC and occurred subsequent to agency notice.

For more information, please visit the following web notice.

OFAC strongly encourages organizations subject to U.S. jurisdiction, as well as foreign entities that conduct business in or with the United States, U.S. persons, or using U.S.-origin goods or services, to review OFAC’s May 2, 2019 “A Framework for OFAC Compliance Commitments” for more information regarding best practices for developing, implementing, and updating risk-based sanctions compliance programs.    

Each of these enforcement actions will be discussed in more detail in separate posts. But that last paragraph – despite the violations occurring years ago – tells the story, as you’ll be able to tie these cases to the 10 “root causes” of inadequate sanctions compliance in the last 4 pages of the Framework document.

Links:

OFAC Notice

Expedia Enforcement Action

Hotelbeds Enforcement Action

Cubasphere Enforcement Action

OFAC Enforcement Action: A series of unfortunate events befalls Western Union…

The penalty:

Western Union Financial Services, Inc. Settles Potential Civil Liability for Apparent Violations of the Global Terrorism Sanctions Regulations. Western Union Financial Services, Inc. (“Western Union”), a money services business (MSB) headquartered in Denver, Colorado, has agreed to pay $401,697 to settle its potential civil liability for 4,977 apparent violations of the Global Terrorism Sanctions Regulations, 31 C.F.R. part 594 (GTSR).

OFAC determined that Western Union voluntarily self-disclosed the apparent violations to OFAC, and the apparent violations constitute a non-egregious case. The statutory maximum civil monetary penalty amount for the apparent violations was $1,244,250,000, and the base civil monetary penalty amount for the apparent violations was $637,614.

The facts of the case:

Between December 9, 2010, and March 13, 2015, a bank (“the bank”) in The Gambia was one of Western Union’s principal Master Agents in The Gambia. In or around 2006, the bank established a Sub-Agent relationship with Kairaba Shopping Center (KSC), an entity that was subsequently designated by OFAC pursuant to the Global Terrorism Sanctions Regulations (GTSR) on December 9, 2010.

At the time the relationship with KSC was established, the bank provided Western Union with information relating to KSC. Western Union stored this information in its systems as an agent location of the bank, and not as a discrete legal entity acting as a sub-agent. During the entirety of the review period, in addition to its real-time transaction screening of remitters and beneficiaries, Western Union had a process to screen Master Agents and related sub-agents under the Master Agent structure. However, for the majority of the review period, Western Union did not screen location data for sanctions-related issues as part of its review process.

Western Union became aware that KSC was a potential sub-agent in early February 2015, but mistakenly believed at that time that KSC had operated from a single location, which was no longer active as of that date. On March 25, 2015, Western Union identified a second, active KSC location, and immediately suspended its relationship with KSC and deactivated its access to the Western Union network.

Between December 9, 2010, and March 13, 2015, Western Union processed 4,977 transactions totaling approximately $1.275 million, which were paid out to third-party, non-designated beneficiaries who chose to collect their remittances at KSC.

OFAC determined that Western Union processed transactions involving a Specially Designated National (SDN) for more than four years following the entity’s designation by OFAC, and that after Western Union discovered that this Sub-Agent was an SDN, failed to deactivate KSC’s access to the Western Union network immediately due to its mistaken belief that the Sub-Agent was already inactive. However, starting in 2013, two years prior to discovering the apparent violations, Western Union began a project to remediate the root cause of the apparent violations.

How we got the final settlement amount:

The settlement amount reflects OFAC’s consideration of the following facts and circumstances, pursuant to the General Factors under OFAC’s Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A.

OFAC considered the following to be aggravating factors:

(1) Western Union acted with reckless disregard for U.S. sanctions requirements by failing to immediately identify both KSC locations in searches conducted after it discovered that this Sub-Agent was an SDN, which resulted in a failure to deactivate KSC’s access to the Western Union network immediately;

(2) Western Union engaged in a pattern of conduct that involved processing transactions involving an SDN for more than four years following the entity’s designation by OFAC;

(3) Based on a review of all readily available information and with the exercise of reasonable due diligence, Western Union had reason to know that its Sub-Agent, KSC, was on the SDN List;

(4) By processing these transactions and allowing KSC to continue operating as a Western Union Sub-Agent and provide remittance services to its customers through a U.S. MSB, Western Union caused substantial harm to the sanctions program objectives, including by conferring economic or other benefit to an SDN and undermining the policy objectives of the GTSR; and

(5) Western Union is a large and commercially sophisticated international financial institution.

OFAC found the following to be mitigating factors:

(1) Western Union has not received a penalty notice or Finding of Violation from OFAC in the five years preceding the earliest date of the transactions giving rise to the apparent violations;

(2) Western Union had a global sanctions policy in place at the time of the apparent violations that required its Master Agents to comply with the sanctions programs administered by OFAC and vet its Sub-Agents — a policy that seemed to be effective except in this instance;

(3) Prior to the apparent violations, Western Union had implemented a corrective action plan to close an identified gap in its internal controls related to sub-agent due diligence and screening.

(4) Following the discovery of the apparent violations, Western Union took additional remedial actions, including performing an immediate one-time screening of its Sub-Agent and location data, which did not identify any other Sub-Agents or locations that were on the SDN List; and

(5) Western Union cooperated with OFAC’s investigation by voluntarily self-disclosing the apparent violations and by executing and agreeing to extend multiple times a statute of limitations tolling agreement.

And the final paragraph dovetails nicely with the recently-published Framework document (convenient, no?):

In addition to the above, and as part of its settlement with OFAC, Western Union has agreed to sustain its commitment to implementing robust compliance procedures by ensuring that it continues to have a management team in place that: (1) is committed to a culture of compliance; (2) conducts regular risk assessments; (3) ensures that its internal controls appropriately mitigate its sanctions-related risks; (4) conducts regular audits; and (5) provides ongoing sanctions compliance training throughout the organization.

Mr. Watchlist wonders what the line is between “reckless” and either “careless” or “negligent”… because it seems that Western Union was at worst, negligent or incompetent. And there’s a big gap between that and “reckless”…. just saying.

Link:

OFAC Enforcement Information

June 12, 2019: OFAC adds 3 to Iran & Counter Terror sanctions

Yesterday, OFAC designated the following 2 persons:

ABD AL-HAMID AL-ASADI, Makki Kazim (a.k.a. ABDUL HAMEED AL ASADI, Makki Kadhim), Basrah, Iraq; DOB 10 Oct 1957; Additional Sanctions Information – Subject to Secondary Sanctions (individual) [SDGT] [IRGC] [IFSR] (Linked To: ISLAMIC REVOLUTIONARY GUARD CORPS (IRGC)-QODS FORCE). 

 

SALIH AL HASANI, Mohammed Hussein (a.k.a. AL-HUSAYNI, Mohammed Hossein); DOB 01 Jul 1954; Additional Sanctions Information – Subject to Secondary Sanctions; Passport A9298980 (Iraq) (individual) [SDGT] [IFSR] (Linked To: SOUTH WEALTH RESOURCES COMPANY).

and an entity:

SOUTH WEALTH RESOURCES COMPANY (a.k.a. MANABEA THARWAT AL-JANOOB GENERAL TRADING COMPANY, LLC; a.k.a. SHIRKAT MANABI’ THARAWAT AL-JANUB LILTIJARAH AL-‘AMMAH; a.k.a. SOUTH WEALTH RESOURCES LTD.), Al Jadriya District, Baghdad, Iraq; Additional Sanctions Information – Subject to Secondary Sanctions [SDGT] [IRGC] [IFSR] (Linked To: ISLAMIC REVOLUTIONARY GUARD CORPS (IRGC)-QODS FORCE).

under both the Iran sanctions regime and that for counter terrorism.

And the Treasury Department issued the following press release:

PRESS RELEASES

Treasury Targets IRGC-Qods Force Financial Conduit in Iraq for Trafficking Weapons Worth Hundreds of Millions of Dollars

WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on an Iraq-based Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) financial conduit, South Wealth Resources Company (SWRC), which has trafficked hundreds of millions of dollars’ worth of weapons to IRGC-QF-backed Iraqi militias.  SWRC and its two Iraqi associates, who are also being designated today, have covertly facilitated the IRGC-QF’s access to the Iraqi financial system to evade sanctions.  This scheme also served to enrich previously sanctioned Abu Mahdi al-Muhandis, an Iraqi advisor to IRGC-QF Commander Qasem Soleimani, who has run weapons smuggling networks and participated in bombings of Western embassies and attempted assassinations in the region.  SWRC and its two associates are being designated as Specially Designated Global Terrorists (SDGTs) pursuant to Executive Order (E.O.) 13224, which targets terrorists and those providing support to terrorists or acts of terrorism.

“Treasury is taking action to shut down Iranian weapons smuggling networks that have been used to arm regional proxies of the IRGC Qods Force in Iraq, while personally enriching regime insiders,” said Treasury Secretary Steven T. Mnuchin. “The Iraqi financial sector and the broader international financial system must harden their defenses against the continued deceptive tactics emanating from Tehran in order to avoid complicity in the IRGC’s ongoing sanctions evasion schemes and other malign activities.”

The IRGC-QF, designated pursuant to E.O. 13224 on October 25, 2007, is a branch of the IRGC responsible for external operations and has provided material support to numerous terrorist groups, including the Taliban, Lebanese Hizballah, HAMAS, and Palestinian Islamic Jihad, making it a key component of Iran’s destabilizing regional activities.  The IRGC-QF’s parent organization, the IRGC, was designated pursuant to E.O. 13224 on October 13, 2017, and on April 15, 2019 was designated as a Foreign Terrorist Organization by the Secretary of State.

SOUTH WEALTH RESOURCES COMPANY

The IRGC-QF has used Iraq-based SWRC, also known as Manabea Tharwat al-Janoob General Trading Company, as a front to smuggle hundreds of millions of dollars’ worth of weapons to its proxies inside Iraq, while also generating profit in the form of commission payments for Abu Mahdi al-Muhandis, an OFAC-sanctioned advisor to IRGC-QF commander Qasem Soleimani, and two associates of SWRC who are also being designated today.  In addition to facilitating the IRGC-QF’s weapons smuggling into Iraq, SWRC has moved millions of dollars to Iraq for illicit financial activity benefitting the IRGC-QF and its Iraq-based militia groups.

SWRC is being designated today pursuant to E.O. 13224 for assisting in, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, the IRGC-QF.

MAKKI KAZIM ‘ABD AL HAMID AL ASADI AND MUHAMMED HUSSEIN SALIH AL HASANI

OFAC also is designating Makki Kazim ‘Abd Al Hamid Al Asadi (Makki Kazim Al Asadi) and Muhammed Husayn Salih al-Hasani (al-Hasani), two Iraq-based individuals who helped facilitate IRGC-QF shipments and financial operations via SWRC.  Both individuals and Abu Mahdi al-Muhandis received commission payments for contracts with SWRC.

Makki Kazim Al Asadi has acted as an intermediary to facilitate IRGC-QF shipments destined for Iraq, and has helped the IRGC-QF access the Iraqi financial system to evade sanctions.  Makki Kazim Al Asadi is being designated pursuant to E.O. 13224 for assisting in, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, the IRGC-QF.

Muhammed Hussein Salih Al Hasani is the authorized agent and representative of SWRC, which he registered in Iraq in 2013.  He has signed weapons contracts for SWRC.

Al Hasani is being designated pursuant to E.O. 13224 for acting for or on behalf of SWRC.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of these targets that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.  OFAC’s regulations generally prohibit all dealings by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of blocked or designated persons.

In addition, persons that engage in certain transactions with the individuals and entities designated today may themselves be exposed to sanctions or subject to an enforcement action.  Furthermore, unless an exception applies, any foreign financial institution that knowingly facilitates a significant transactions for any of the individuals or entities designated today could be subject to U.S. sanctions.

Links:

OFAC Notice

Treasury Press Release

June 11, 2019: OFAC sanctions Syrian oligarch & his firms

Today, OFAC designated the following persons:

FOZ, Amer (a.k.a. FOZ, Amer Zuhair); DOB 11 Mar 1976; POB Homs, Syria; Gender Male; Passport O6O1O274747 (Syria) (individual) [SYRIA] (Linked To: ASM INTERNATIONAL TRADING, LLC). 

 

FOZ, Husen (a.k.a. FOZ, Hasan; a.k.a. FOZ, Hosn Zuhair; a.k.a. FOZ, Hoson; a.k.a. FOZ, Housen; a.k.a. FOZ, Hussen), Meadows 1, Street 13, Villa 38, Dubai, United Arab Emirates; Adawai Area Rawdet Aleman Bld, 1st Floor, Damascus City, Syria; DOB 25 May 1981; POB Lattakia, Syria; nationality Syria; alt. nationality Saint Kitts and Nevis; citizen Turkey; alt. citizen Syria; Gender Female; Passport U08527769 (Turkey); alt. Passport RE0027450 (Syria); National ID No. 06010274768 (Syria) (individual) [SYRIA] (Linked To: ASM INTERNATIONAL TRADING, LLC). 

 

FOZ, Samer (a.k.a. AL-FOUZ, Samer; a.k.a. FAWAZ, Samer; a.k.a. FAWZ, Samir; a.k.a. FOUZ, Samer; a.k.a. FOZ, Samer Zuhair; a.k.a. FOZ, Samir), Meadows 2, Street 3, Villa 5, Dubai, United Arab Emirates; DOB 20 May 1973; POB Latakia, Syria; nationality Syria; alt. nationality Turkey; alt. nationality Saint Kitts and Nevis; citizen Saint Kitts and Nevis; Gender Male; National ID No. 784197341865828 (Syria) (individual) [SYRIA].

and entities:

AL-MOHAIMEN FOR TRANSPORTING & CONTRACTING (a.k.a. AL MOHAIMEN FOR TRANSPORTATION AND CONTRACTING; a.k.a. AL-MOHAIMEN FOR TRANSPORTING AND CONTRACTING), Lattakia, Syria [SYRIA] (Linked To: AMAN HOLDING COMPANY). 

 

AMAN DAMASCUS JOINT STOCK COMPANY (a.k.a. AMAN DAMASCUS JSC), Damascus, Syria [SYRIA] (Linked To: AMAN HOLDING COMPANY). 

 

AMAN HOLDING COMPANY (a.k.a. AMAN GROUP; a.k.a. AMAN HOLDING GROUP; a.k.a. AMAN HOLDING PRIVATE JSC), Al Shurafa Building Aman Group, Al Moutanabi Street, Lattika, Syria [SYRIA] (Linked To: FOZ, Samer). 

 

ASM INTERNATIONAL TRADING, LLC (a.k.a. ASM INTERNATIONAL GENERAL TRADING COMPANY; a.k.a. ASM INTERNATIONAL GENERAL TRADING LLC), Jumeirah Lake Tower, Cluster 1, Platinum Tower, Office 2405, P.O. Box 36102, Dubai, United Arab Emirates [SYRIA] (Linked To: FOZ, Samer). 

 

BS COMPANY OFFSHORE (a.k.a. B S COMPANY; a.k.a. B.S. COMPANY OFFSHORE; a.k.a. BS COMPANY SAL OFFSHORE), Salame Building, Beit Mery, Lebanon [SYRIA]. 

 

FOUR SEASONS DAMASCUS (a.k.a. DAMASCUS FOUR SEASONS; a.k.a. FOUR SEASONS HOTEL DAMASCUS), Shukri Al Quatli Street, P.O. Box 6311, Damascus, Syria [SYRIA] (Linked To: FOZ, Samer). 

 

FOZ FOR TRADING (a.k.a. FOZ TRADING), Syria [SYRIA] (Linked To: AMAN HOLDING COMPANY). 

 

LANA TV, Beirut, Lebanon [SYRIA] (Linked To: FOZ, Samer). 

 

MAINPHARMA (a.k.a. MEENPHARMA), Syria [SYRIA] (Linked To: AMAN HOLDING COMPANY). 

 

MENA CRYSTAL SUGAR COMPANY LIMITED (a.k.a. M.E.N.A. CRYSTAL SUGAR COMPANY; a.k.a. M.E.N.A. SUGAR COMPANY; a.k.a. MENA SUGAR COMPANY), Homs, Syria [SYRIA] (Linked To: AMAN HOLDING COMPANY). 

 

ORIENT CLUB, Al Najmeh Square – Abou Romaaneh 6737, Damascus, Syria [SYRIA] (Linked To: FOZ, Samer). 

 

SILVER PINE (a.k.a. SILVER PINE DMCC), Jumeirah Lake Tower, Cluster 1, Platinum Tower, Office 2405, P.O. Box 36102, Dubai, United Arab Emirates [SYRIA] (Linked To: FOZ, Husen). 

 

SYNERGY SAL OFFSHORE, Azarieh street – Azarieh building, Beirut, Lebanon [SYRIA].

under the Syria sanctions program.

And the Treasury Department explained it all in a press release:

Treasury Designates Syrian Oligarch Samer Foz and His Luxury Reconstruction Business Empire 

Designations include the Foz family and companies across the Middle East profiting from conflict and the Assad regime’s brutality

WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating 16 individuals and entities associated with an international network benefiting the Assad regime.  These designations serve to cut off critical supplies and financiers for the regime’s luxury reconstruction and investment efforts.  This action reinforces the United States’ commitment to imposing a financial toll on those supporting Assad’s authoritarian rule, including Syrian oligarch Samer Foz.

“Samer Foz, his relatives, and his business empire have leveraged the atrocities of the Syrian conflict into a profit-generating enterprise.  This Syrian oligarch is directly supporting the murderous Assad regime and building luxury developments on land stolen from those fleeing his brutality,” said Undersecretary for Terrorism and Financial Intelligence Sigal Mandelker.  “Treasury is committed to holding accountable profiteers who enrich the coffers of the Assad regime while Syrian civilians suffer this man-made humanitarian crisis.”

LUXURY RECONSTRUCTION AND INVESTMENT IN SYRIA

Samer Foz has been profiting heavily from reconstruction efforts in Syria—including through luxury developments on land seized by the Syrian regime from its own people—and has been attempting to enlist foreign investors into Syrian reconstruction projects.

On January 21, 2019, the European Union sanctioned Samer Foz, Aman Damascus, and 14 other individuals and entities for using their ties with the Syrian regime for their own financial benefit, and for helping to finance the regime including through joint ventures formed with regime­backed companies to develop land expropriated from persons displaced by the conflict in Syria.  Those persons sanctioned by the EU have been supporting and benefiting from the Assad regime’s brutality, and their reconstruction investments prevent displaced persons from returning to their homes.

In 2012, Assad signed a decree to expel citizens in poorer areas of Damascus from their homes to pave the way for luxury reconstruction projects, including Marota City in the Mazzeh District.  To fund and fulfill these contracts, the regime formed joint ventures with private businessmen, including Samer Foz.  This tactic—taking over property owned by Syrian citizens and handing the land to wealthy regime insiders to develop in exchange for revenue sharing—has emerged as Assad’s go-to strategy for high-end reconstruction in war-torn Syria.  In October 2017, Samer Foz’s company, Aman Holding, entered into one such partnership with the Assad regime when it and state-owned Damascus Cham PJSC formed a company called Aman Damascus, in which Aman Holding has the majority share.  Aman Damascus was awarded the rights to build three skyscrapers and five exclusive housing properties in a contract valued at U.S. $312 million.

Samer Foz is the Chairman and General Manager of Aman Holding, which was formerly known as the Aman Group.  Aman Holding owns and controls over a dozen companies, all of which benefit Samer Foz personally and ultimately allow him to invest more in Assad’s luxury reconstruction projects.  Samer Foz’s Lebanon-based Lana TV, which is also being designated today, has been used to solicit investment in Syria by airing commercials for Marota City.

FOZ FAMILY AND ASM INTERNATIONAL GENERAL TRADING

Samer Foz’s Aman Holding serves as an umbrella for over a dozen different ventures, and in some of these companies, Samer Foz shares ownership and managerial duties with his siblings Amer Foz and Husen Foz.  One such venture is UAE-based ASM International General Trading, LLC (ASM International Trading), where Amer Foz is the General Manager, Husen Foz is the Chief Operating Officer, and Samer Foz is the Chief Executive Officer.  While many of the Foz family’s ventures are located in Syria, this UAE-based company serves as a means of exploiting the international financial system outside of Syria.

Although much of ASM International Trading’s overt trade is in foodstuff commodities such as grain and sugar, the company also operates in the fields of oilfield services, drilling products, and supplies to the oil and natural gas industry.  Additionally, Husen Foz’s company, Silverpine DMCC, is also being designated today.  Silverpine is an international trading company that operates out of the ASM International Trading offices.

Facilitating Shipments of Iranian Oil to Syria

The following Lebanon­based entities are being designated for having facilitated shipments of Iranian-origin petroleum to Syria:  Synergy SAL (Offshore) and BS Company (Offshore).

Synergy SAL (Offshore) has shipped tens of thousands of metric tons of Iranian oil into Syria in the past year by sea.  Some of the vessels used by Synergy SAL (Offshore) to conduct these illicit shipments also appear in the OFAC Advisory to the Maritime Shipping Community.

Additionally, BS Company (Offshore) is one of the largest importers of crude oil into Syria, and has imported hundreds of thousands of metric tons of Iranian light crude oil in the past year using a variety of oil tanker vessels and tanker trucks.  These land- and sea-based shipments are destined for Banias Refinery Company, which is identified as meeting the definition of Government of Syria pursuant to E.O. 13582.  BS Company (Offshore) is also affiliated with the Qatirji Group.  As of September 5, 2018, the Qatirji Group and its co-owner Mohammad Bara Qatirji are subject to U.S. sanctions pursuant to Executive Order 13582.

SAMER FOZ’S SYRIA-BASED ASSETS

Also under the umbrella of Aman Holding—and being designated today—are the following Syria-based entities:  Foz for Trading, Al-Mohaimen for Transportation and Contracting, MENA Crystal Sugar, and Mainpharma.  Aman Holding’s trading arm conducts international commodities trading with dozens of countries, while its transportation arm facilitates transfers of bulk cargo to Syria by land and sea using a fleet of tanker trucks and vessels.  MENA Crystal Sugar is one of the largest sugar refineries in the Middle East, and is located near Homs, Syria.  Mainpharma is located near Damascus and is valued at over U.S. $20 million.

ATTEMPTS TO GAIN INFLUENCE IN THE FINANCIAL SECTOR

In an attempt to gain further access, influence, and profit from the financial sector, Samer Foz has been gaining footholds in Syria financial sector, including recent purchases of ownership shares in the Syrian International Islamic Bank (SIIB) and Al Baraka Bank Syria.  Samer Foz has also been seeking to establish a financial institution in Syria in partnership with a Russian bank in order to attract Russian investors to Syria.

In addition to trading, banking, construction, and commodities companies, Samer Foz also owns the Four Seasons Damascus and the Orient Club, which are also being designated today.

DESIGNATION BASES AND AUTHORITIES

Samer Foz has materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, Bashar Al-Assad, and is being designated pursuant to E.O. 13573.  Samer Foz has also materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the Government of Syria, and is being designated pursuant to E.O. 13582.

Aman Holding Company is owned or controlled by, directly or indirectly, Samer Foz, and is being designated pursuant to E.O. 13573 and E.O. 13582.

ASM International Trading, LLC is owned or controlled by, directly or indirectly, Samer Foz, and is being designated pursuant to E.O. 13573 and E.O. 13582.

Amer Foz has acted or purported to act for or on behalf of, directly or indirectly, ASM International Trading, and is being designated pursuant to E.O. 13573 and E.O. 13582.

Husen Foz has acted or purported to act for or on behalf of, directly or indirectly, ASM International Trading, and is being designated pursuant to E.O. 13573 and E.O. 13582.

Silverpine DMCC is owned or controlled by, directly or indirectly, Husen Foz, and is being designated pursuant to E.O. 13573 and E.O. 13582.

MENA Crystal Sugar Company Limited is owned or controlled by, directly or indirectly, Aman Holding, and is being designated pursuant to E.O. 13573 and E.O. 13582.

MAINPHARMA is owned or controlled by, directly or indirectly, Aman Holding, and is being designated pursuant to E.O. 13573 and E.O. 13582.

Aman Damascus Joint Stock Company is owned or controlled, directly or indirectly, by Aman Holding, and is being designated pursuant to E.O. 13573 and E.O. 13582.

Foz for Trading is owned or controlled by, directly or indirectly, Aman Holding, and is being designated pursuant to E.O. 13573 and E.O. 13582.

AI-Mohaimen for Transportation & Contracting is owned or controlled by, directly or indirectly, Aman Holding, and is being designated pursuant to E.O. 13573 and E.O. 13582.

Orient Club is owned or controlled by, directly or indirectly, Sarner Foz, and is being designated pursuant to E.O. 13573 and E.O. 13582.

Lana TV is owned or controlled by Samer Foz and is being designated pursuant to E.O. 13573 and E.O. 13582.

The Four Seasons Damascus is owned or controlled by, directly or indirectly, Samer Foz, and is being designated pursuant to E.O. 13573 and E.O. 13582.

BS Company (Offshore) has materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, Banias Refinery Company, and is being designated pursuant to E.O. 13582.

Synergy SAL (Offshore) has materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, Banias Refinery Company, and is being designated pursuant to E.O. 13582.

As a result of today’s action, all property and interests in property of these individuals and entities that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.  OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons. 

Links:

OFAC Notice

Treasury Press Release