OFAC Updates

On Monday, OFAC designated the following Turkish individuals:

AKAR, Hulisi, Turkey; DOB 1952; POB Kayseri, Turkey; Gender Male (individual) [SYRIA-EO]. 

 

DONMEZ, Fatih, Turkey; DOB 1965; POB Bilecik, Turkey; Gender Male (individual) [SYRIA-EO]. 

 

SOYLU, Suleyman, Turkey; DOB 21 Nov 1969; POB Istanbul, Turkey; Gender Male (individual) [SYRIA-EO].

and government entities:

REPUBLIC OF TURKEY MINISTRY OF ENERGY AND NATURAL RESOURCES, Ankara, Turkey [SYRIA-EO]. 

 

REPUBLIC OF TURKEY MINISTRY OF NATIONAL DEFENCE, Ankara, Turkey [SYRIA-EO].

under a new “Syria-related” program (Mr. Watchlist checked – there is still a Syria program). I guess they didn’t want to call it the Turkey program?

Anyhow, this all comes under a new Executive Order, which blocks the property of the following:

(i) any person determined by the Secretary of the Treasury, in consultation with the Secretary of State: (A) to be responsible for or complicit in, or to

have directly or indirectly engaged in, or attempted to engage in, any of the following in or in relation to Syria:

(1) actions or policies that further threaten the peace, security, stability, or territorial integrity of Syria; or

(2) the commission of serious human rights abuse;

(B) to be a current or former official of the Government of Turkey;

(C) to be any subdivision, agency, or instrumentality of the Government of Turkey;

(D) to operate in such sectors of the Turkish economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State;

(E) to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any person whose property and interests in property are blocked pursuant to this order; or

(F) to be owned or controlled by, or to have acted or purported to act for or on·behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order.

Additionally, the Secretary of State (this time, he consults with Treasury, not the other way around), can impose a range of sanctions on the following foreign persons:

(i) is responsible for or complicit in, has directly or indirectly engaged in, or attempted to engage in, or financed, any of the following:

(A) the obstruction, disruption, or prevention of a ceasefire in northern Syria;

(B) the intimidation or prevention of displaced persons from voluntarily returning to their places of residence in Syria;

(C) the forcible repatriation of persons or refugees to Syria; or

(D) the obstruction, disruption, or prevention of efforts to promote a political solution to the conflict in Syria, including:

(1) the convening and conduct of a credible and inclusive Syrian-led constitutional

process under the auspices of the United Nations (UN);

(2) the preparation for and conduct of UN-supervised elections, pursuant to the new constitution, that are free and fair and to the highest international standards of transparency and accountability; or

(3) the development of a new Syrian government that is representative and

reflects the will of the Syrian people;

(ii) is an adult family member of a person designated under subsection (a) (i) of this section; or

(iii) is responsible for or complicit in, or has directly or indirectly engaged in, or attempted to engage in, the expropriation of property, including real property, for personal gain or political purposes in Syria.

The sanctions being:

(b) When the Secretary of State, in accordance with the terms of subsection (a) of this section, has determined that a person meets any of the criteria described in that subsection and has selected one or more of the sanctions set forth below to impose on that person, the heads of relevant departments and agencies, in consultation with the Secretary of State, as appropriate, shall ensure that the following actions are taken where necessary to implement the sanctions selected by the Secretary of State:

(i) agencies shall not procure, or enter into a contract for the procurement of, any goods or services from the sanctioned person; or

(ii) the Secretary of State shall direct the denial of a visa to, and the Secretary of Homeland Security shall exclude from the United States, any alien that the Secretary of State determines is a corporate officer or principal of, or a shareholder with a controlling interest in, a sanctioned person.

(c) When the Secretary of State, in accordance with the terms of subsection (a) of this section, has determined that a person meets any of the criteria described in that subsection and has selected one or more of the sanctions ~et forth below to impose on that person, the Secretary of the Treasury, in consultation with the Secretary of State, shall take the following actions where necessary to implement the sanctions selected by the Secretary of State:

(i) prohibit any United States financial institution that is a U.S. person from making loans or providing credits to the sanctioned person totaling more than $10,000,000 in any 12-month period, unless such person is engaged in activities to relieve human suffering and the loans or credits are provided for such activities;

(ii) prohibit any transactions in foreign exchange that are subject to the jurisdiction of the United States and in which the sanctioned person has any interest;

(iii) prohibit any transfers of credit or payments between banking institutions or by, through, or to any banking institution, to the extent that such transfers or payments are subject to the jurisdiction of the United States and involve any interest of the sanctioned person;

(iv) block all property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of the sanctioned person, and provide that such property and interests in property may not be transferred, paid, exported, withdrawn, or otherwise dealt in;

(v) prohibit any United States person from investing in or purchasing significant amounts of equity or debt instiuments of the sanctioned person;

(vi) restrict or prohibit imports of goods, technology, or services, directly or indirectly, into the United States from the sanctioned person; or

(vii) impose on the principal executive officer or officers, or persons performing similar functions and with similar authorities, of the sanctioned person the sanctions described in subsections (c) (i) – (c) (vi) of this section, as selected by the Secretary of State.

Three General Licenses were issued. Number 1 authorizes the official business of the U.S. Government, Number 2 allows wind-down operations with the two designated government agencies (but only until November 13th), and Number 3 authorizes official activities of the following groups: that deal with the two governmental agencies:

• World Bank

• IMF (International Monetary Fund)

• FAO (UN Food and Agriculture Organization)

• OCHA (UN Office for the Coordination of Humanitarian Affairs)

• OHCHR (UN Office of the United Nations High Commissioner for Human Rights)

• UN Habitat

• UNDP (UN Development Program)

• UNFPA (UN Population Fund)

• UNHCR (Office of the UN High Commissioner for Refugees)

• UNICEF (UN Children’s Fund)

• WFP (World Food Program)

• The World Health Organization (WHO), including the Pan-American Health

Organization (PAHO)

Meanwhile, Treasury:

PRESS RELEASES

Treasury Designates Turkish Ministries and Senior Officials in Response to Military Action in Syria 

Two Ministries and Three Ministers Designated with

New Executive Order

Washington – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action against two ministries and three senior Turkish Government officials in response to Turkey’s military operations in Syria.  The Turkish Government’s actions are endangering innocent civilians, and destabilizing the region, including undermining the campaign to defeat ISIS.  The Government of Turkey’s Ministry of National Defence and the Ministry of Energy and Natural Resources, as well as the Minister of National Defence, Minister of Energy and Natural Resources, and the Minister of the Interior are blocked as a result of today’s action.  The designation of these ministries and officials is a result of the Turkish Government’s actions that further deteriorate peace, security, and stability of the region.  We are prepared to impose additional sanctions on Government of Turkey officials and entities, as necessary.

“The United States is holding the Turkish Government accountable for escalating violence by Turkish forces, endangering innocent civilians, and destabilizing the region,” said Treasury Secretary Steven Mnuchin.

In addition, persons that engage in certain transactions with persons designated today may themselves be exposed to designation.  Furthermore, any foreign financial institution that knowingly facilitates any significant financial transactions for or on behalf of the persons designated today could be subject to U.S. correspondent or payable through account sanctions.

Today’s actions are not intended to affect or disrupt the operation of international humanitarian NGOs or the United Nations in Turkey in rendering humanitarian assistance to Syrian communities in need. 

OFAC is prepared to issue authorizations, such as general or specific licenses, as appropriate, to ensure that today’s action does not disrupt Turkey’s ability to meet its energy needs.

Additionally, OFAC issued three General Licenses simultaneously with today’s Executive Order.  General License 1 authorizes the conduct of the official business of the United States Government by employees, grantees, or contractors otherwise prohibited by the order.  General License 2 authorizes a 30 day wind down period for all transactions and activities that are ordinarily incident and necessary to the wind down operations, contracts, or other agreements involving the Ministries of National Defence or Energy and Natural Resources of the Government of Turkey.  General License 3 authorizes official activities of the United Nations involving the Ministry of National Defence or the Ministry of Energy and Natural Resources of the Government of Turkey.

Designation Bases and Authorities

 

Republic of Turkey Ministry of National Defence is being designated pursuant to E.O. of October 14, 2019, for being a subdivision, agency, or instrumentality of the Government of Turkey.

Republic of Turkey Ministry of Energy and Natural Resources is being designated pursuant to E.O. of October 14, 2019, for being a subdivision, agency, or instrumentality of the Government of Turkey.

Hulusi Akar, the Minister of National Defence of the Republic of Turkey, is being designated pursuant to E.O. of October 14, 2019, for being a current or former official of the Government of Turkey.     

Suleyman Soylu, the Minister of Interior of the Republic of Turkey, is being designated pursuant to E.O. of October 14, 2019, for being a current or former official of the Government of Turkey. 

 

Fatih Donmez, the Minister of Energy of the Republic of Turkey, is being designated pursuant to E.O. of October 14, 2019, for being a current or former official of the Government of Turkey.

  

As a result of today’s action, all property and interests in property of these persons, and of any other persons blocked by operation of law, that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.  E.O. October 14, 2019, and OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interest in property of blocked persons.

 

and State:

On Friday, the United States signaled its intent to take action in response to Turkey’s ongoing unilateral military offensive in northeast Syria. President Donald J. Trump has now signed an Executive Order to press Turkey to halt its military offensive against northeast Syria and adopt an immediate ceasefire. The Executive Order gives the Department of Treasury and the Department of State, the authority to consider and impose sanctions on individuals, entities, or associates of the Government of Turkey involved in actions that endanger civilians or lead to the further deterioration of peace, security, and stability in northeast Syria. Three senior Turkish officials, the Ministry of Energy, and the Ministry of Defense have been designated for sanctions under these authorities, concurrent with the signing of the Executive Order.

As the President has made clear, Turkey’s actions in northeast Syria severely undermine the D-ISIS campaign, endanger civilians, and threaten the security of the entire region. If Turkey’s operation continues, it will exacerbate a growing and daunting humanitarian crisis, with potentially disastrous consequences. To avoid suffering further sanctions imposed under this new Executive Order Turkey must immediately cease its unilateral offensive in northeast Syria and return to a dialogue with the United States on security in northeast Syria.

issued press releases.

Mr. Watchlist will get the various resource pages updated today or tomorrow (today is a day off from the daily grind)….

Links:

OFAC Notice

Executive Order

General Licenses: 1, 2, 3

Press Releases: State, Treasury

On Friday, OFAC added the following 2 persons:

AJING ATER, Kur (a.k.a. AJING ATER KUR, Kur; a.k.a. AJING, Kur), Juba, South Sudan; DOB 02 Jan 1962; POB Equatorial Guinea; nationality South Sudan; Gender Male; Passport B00001010 (South Sudan) expires 11 Aug 2022 (individual) [GLOMAG]. 

 

AL-CARDINAL, Ashraf Seed Ahmed (a.k.a. HUSSEIN, Ashraf Said Ahmed; a.k.a. HUSSEIN, Ashraf Seed Ahmed; a.k.a. SEED AHMED, Asharaf; a.k.a. SEED AHMED, Ashraff; a.k.a. SEEDAHMED, Ashiraf; a.k.a. “ALI, Ashraf Sayed”; a.k.a. “HUSSEIN ALI, Ashraf”), 1 College Yard, Winchester Avenue, London, England NW6 7UA, United Kingdom; 207 Jersey Road, Osterley, London TW7 4RE, United Kingdom; DOB 01 Jan 1957 to 31 Jan 1957; nationality Sudan; Gender Male (individual) [GLOMAG].

and 6 entities:

 

AL CARDINAL INVESTMENTS CO. LTD (a.k.a. AL-CARDINAL INVESTMENTS COMPANY LIMITED), 201 Kasini Road, Mombasa, Kenya; Juba, South Sudan; Tax ID No. 100104695 (South Sudan) [GLOMAG] (Linked To: AL-CARDINAL, Ashraf Seed Ahmed). 

 

ALCARDINAL GENERAL TRADING LIMITED, 207 Jersey Road, Osterley, London TW7 4RE, United Kingdom; Company Number 08227698 (United Kingdom) [GLOMAG] (Linked To: AL-CARDINAL, Ashraf Seed Ahmed). 

 

ALCARDINAL GENERAL TRADING LLC, Dubai, United Arab Emirates [GLOMAG] (Linked To: AL-CARDINAL, Ashraf Seed Ahmed). 

 

ALCARDINAL PETROLEUM COMPANY LIMITED (a.k.a. ALCARDINAL PETROLEUM CO. LTD), Mombasa, Kenya; Juba, South Sudan [GLOMAG] (Linked To: AL-CARDINAL, Ashraf Seed Ahmed). 

 

LOU TRADING AND INVESTMENT COMPANY LIMITED (a.k.a. LOU TRADING AND INVESTMENT CO LTD; a.k.a. LOU TRADING AND INVESTMENT COMPANY LTD), Juba, South Sudan; Tax ID No. 100108046 (South Sudan) [GLOMAG] (Linked To: AJING ATER, Kur). 

 

NILETEL, Juba, South Sudan [GLOMAG] (Linked To: AL-CARDINAL, Ashraf Seed Ahmed).

to its SDN List under its Global Magnitsky human rights abuses and corruption sanctions program.

And Treasury:

PRESS RELEASES

Treasury Sanctions Businessmen in South Sudan for Corrupt Dealings with Government Officials and Sanctions Evasion

Global Magnitsky designations target government insiders engaging in bribery, kickbacks, and procurement fraud while draining state coffers

Washington – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Ashraf Seed Ahmed Al-Cardinal (Al-Cardinal) and Kur Ajing Ater (Ajing) for their involvement in bribery, kickbacks and procurement fraud with senior government officials.  OFAC is also designating five companies determined to be owned or controlled by Al-Cardinal, and one company owned or controlled by Ajing.  OFAC designated these individuals and entities pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption. 

“These South Sudanese elites and corrupt government officials have drained state coffers and usurped the country’s resources with impunity.  Al-Cardinal and Ajing leverage their businesses and political connections to engage in corruption at great expense to the South Sudanese people,” said Sigal Mandelker, Treasury Under Secretary for Terrorism and Financial Intelligence.  “The South Sudanese government must take urgent measures to increase transparency and enforce accountability against those involved in systemic corruption.  Privileged elites should not be allowed to profit from conflict as they undermine efforts to bring lasting peace to South Sudan.” 

As a result of today’s action, all property and interests in property of the individuals and entities named below, and of any entities that are owned, directly or indirectly, 50 percent or more by them, individually, or with other designated persons, that are in the United States or in the possession or control of U.S. persons, are blocked and must be reported to OFAC.  Unless authorized by a general or specific license issued by OFAC or otherwise exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons.  In addition, any approval, financing, facilitation, or guarantee by a U.S. person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited by E.O. 13818 if performed by a U.S. person or within the United States would be prohibited.

ASHRAF SEED AHMED AL-CARDINAL

Sudanese businessman Al-Cardinal has been used by a senior South Sudanese government official as an intermediary to deposit and hold a large amount of funds in a country outside of South Sudan.  Following OFAC’s designation of Benjamin Bol Mel in December 2017, the senior South Sudanese official began to use a bank account in the name of one of Al-Cardinal’s companies to store his personal funds in an attempt to avoid the effects of potential sanctions designations.  Further, in early 2019, the South Sudanese government made millions of dollars in payments to a company owned by Al-Cardinal; while the official reason was for the payment for food, the money instead went to senior South Sudanese government officials.  Other South Sudanese government officials have expressed dissatisfaction with the massive corruption in the South Sudanese government, noting that although large amounts of money were paid to Al-Cardinal for supplies and provisions, government forces never seemed to be adequately supplied. 

Separately, a company partially owned by Al-Cardinal has been publicly implicated in the importation of amphibious armored vehicles into South Sudan that gave the Government of South Sudan the ability to extend offensives that included violent attacks on innocent civilians.

Five companies owned or controlled by Al-Cardinal were also designated today:  Alcardinal General Trading Limited, Alcardinal General Trading LLC, Al Cardinal Investments Co. LTD, Alcardinal Petroleum Company limited, and NILETEL.

Al-Cardinal is being designated for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery.

KUR AJING ATER

Ajing is a South Sudanese businessman who has bribed key officials in the Government of South Sudan in order to maintain influence and access to the South Sudanese oil market.  Ajing used these bribes to both curry favor with a senior gatekeeper within the Government of South Sudan and to ensure the silence and compliance of a key government officials.  In late 2018, the South Sudanese government made a large cash payment to Ajing.  While the official reason was for the payment of food, the money instead went directly to a senior South Sudanese government official.  In addition, Ajing has been obligated large amounts of oil by the Government of South Sudan, and has given money and vehicles to government officials in return.  Ajing has claimed to have paid senior officials millions of dollars and has cooperated with the request of a senior official to route oil payments in cash rather than through official bank accounts.  Further, Ajing was the recipient of a multi-year contract to purchase food for the South Sudanese military, and in return, paid a percentage of the contract back to a senior South Sudanese government official.  According to public media reports, Ajing received millions of dollars in contracts for the South Sudanese military, including one contract that alone exceeds the total amount budgeted for the military’s goods and services for the year by a factor of ten.

Ajing is being designated for having materially assisted, sponsored, or provided financial, material, technological support for, or goods or services to or in support of, an entity that has engaged in, or whose members have engaged in, corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery.  One company owned or controlled by Ajing was also designated today:  Lou Trading and Investment Company Limited.

GLOBAL MAGNITSKY

Building upon the Global Magnitsky Human Rights Accountability Act, on December 20, 2017, the President signed E.O. 13818, in which the President found that the prevalence of human rights abuse and corruption which have their source, in whole or in substantial part, outside the United States, had reached such scope and gravity that it threatens the stability of international political and economic systems.  Human rights abuse and corruption undermine the values that form an essential foundation of stable, secure, and functioning societies; have devastating impacts on individuals; weaken democratic institutions; degrade the rule of law; perpetuate violent conflicts; facilitate the activities of dangerous persons; and undermine economic markets.  The United States seeks to impose tangible and significant consequences on those who commit serious human rights abuse or engage in corruption, as well as to protect the financial system of the United States from abuse by these same persons. 

To date, the Department of the Treasury has designated 122 individuals and entities under E.O. 13818.  This figure is in addition to the numerous human rights or corruption related designations Treasury has issued under other various authorities.  In total, since January of 2017, Treasury has taken action against more than 680 individuals and entities with links to human rights abuse or corruption. 

and State:

Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Ashraf Seed Ahmed Al-Cardinal (Al-Cardinal) and Kur Ajing Ater (Ajing) for their involvement in corruption in South Sudan.  Five companies determined to be owned or controlled by Al-Cardinal and one company owned or controlled by Ajing were also sanctioned.

OFAC designated these individuals and entities pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption.  Today’s action demonstrates continued U.S. commitment to prevent and combat corruption globally.

The corrupt activities of these individuals robbed critical resources from a war-torn country.  The population of South Sudan faces food insecurity, and an estimated one-third of South Sudanese have been forced to flee their homes.

We urge the Government of South Sudan to take seriously the clear linkage between corrupt activities and the motive of some elites to disrupt the peace agreement, the implementation of which has reached a critical stage.

issued press releases.

Links:

OFAC Notice

Press Releases: State, Treasury

Yesterday, OFAC added the following persons to the SDN List under its Global Magnitsky human rights sanctions program:

ESSA, Salim (a.k.a. ESSA, Salim Aziz), Johannesburg, South Africa; DOB 15 Jan 1978; nationality South Africa; Gender Male; Passport M00073786 (South Africa) issued 09 Nov 2012 expires 08 Nov 2022; National ID No. 7801155017084 (South Africa) (individual) [GLOMAG]. 

 

GUPTA, Ajay (a.k.a. GUPTA, Ajay Kumar), Dubai, United Arab Emirates; DOB 05 Feb 1966; POB Saharanpur, India; nationality India; Gender Male (individual) [GLOMAG]. 

 

GUPTA, Atul (a.k.a. GUPTA, Atul Kumar), Dubai, United Arab Emirates; DOB 14 Jun 1968; POB Saharanpur, India; nationality South Africa; Gender Male (individual) [GLOMAG]. 

 

GUPTA, Rajesh (a.k.a. GUPTA, Rajesh Kumar; a.k.a. “GUPTA, Tony”), Dubai, United Arab Emirates; DOB 05 Aug 1972; POB Saharanpur, India; nationality South Africa; Gender Male; National ID No. 7208056345087 (South Africa) (individual) [GLOMAG].

and changed the following 2 listings under the Iran (both), counter terrorism and/or non-proliferation programs (1 each):

BAHMAN GROUP, No. 37, Saba Boulevard, Africa Street, P.O. Box 14335-835, Tehran 1917773844, Iran; Website http://www.bahmangroup.com; Additional Sanctions Information – Subject to Secondary Sanctions [SDGT] [IFSR] (Linked To: ANDISHEH MEHVARAN INVESTMENT COMPANY). -to- BAHMAN GROUP, No. 37, Saba Boulevard, Africa Street, P.O. Box 14335-835, Tehran 1917773844, Iran; Website http://www.bahmangroup.com; Additional Sanctions Information – Subject to Secondary Sanctions [SDGT] [IFSR] (Linked To: ISLAMIC REVOLUTIONARY GUARD CORPS). 

 

ROSTAMIAN, Kambiz, Villa No 13, Cluster 31 Juemierah Islands, Dubai, United Arab Emirates; DOB 27 Aug 1960; Additional Sanctions Information – Subject to Secondary Sanctions; Passport RE0003026 (Saint Kitts and Nevis); alt. Passport I17217816 (Iran) (individual) [NPWMD] [IFSR]. -to- ROSTAMIAN, Kambiz, Villa No 13, Cluster 31 Juemierah Islands, Dubai, United Arab Emirates; DOB 27 Aug 1960; Additional Sanctions Information – Subject to Secondary Sanctions; Passport RE0003028 (Saint Kitts and Nevis); alt. Passport I17217816 (Iran) (individual) [NPWMD] [IFSR].  

And Treasury:

PRESS RELEASES

Treasury Sanctions Members of a Significant Corruption Network in South Africa 

Global Magnitsky designations target members of family business engaged in corruption, including bribery and misappropriation of state assets

Washington – Today, the U.S. Department of the Treasury’s Office of Foreign AssetsControl (OFAC) sanctioned members of a significant corruption network in South Africa that leveraged overpayments on government contracts, bribery, and other corrupt acts to fund political contributions and influence government actions.  Specifically, OFAC designated Ajay Gupta, Atul Gupta, Rajesh Gupta, and Salim Essa for their involvement in corruption in South Africa pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act.

“The Gupta family leveraged its political connections to engage in widespread corruption and bribery, capture government contracts, and misappropriate state assets.  Treasury’s designation targets the Guptas’ pay-to-play political patronage, which was orchestrated at the expense of the South African people,” said Sigal Mandelker, Treasury Under Secretary for Terrorism and Financial Intelligence.  “The Guptas and Essa have used their influence with prominent politicians and parties to line their pockets with ill-gotten gains.  We will continue to exclude from the U.S. financial system those who profit from corruption.”

Today’s sanctions announcement demonstrates the U.S. government’s unwavering commitment to supporting the rule of law and accountability in South Africa.  We support the anti-corruption efforts of South Africa’s independent judiciary, law enforcement agencies, and the ongoing judicial commissions of inquiry.  Moreover, we commend the extraordinary work by South Africa’s civil society activists, investigative journalists, and whistleblowers, who have exposed the breadth and depth of the Gupta family’s corruption. 

THE GUPTA FAMILY

Ajay, Atul, and Rajesh Gupta immigrated to South Africa in the 1990s, and due in large part to their generous donations to a political party and their reportedly close relationship with former South African President Jacob Zuma, their business interests expanded.  The family has been implicated in several corrupt schemes in South Africa, allegedly stealing hundreds of millions of dollars through illegal deals with the South African government, obfuscated by a shadowy network of shell companies and associates linked to the family.  

Credible reports of these corruption schemes include the Gupta family offering members of the South African government money or elevated positions within the government, in return for their cooperation with Gupta family business efforts.  Public reporting has revealed Gupta family efforts to garner the cooperation of a potential Minister of Finance by promising millions of dollars in return for the individual’s assistance in removing key members of the South African government who were considered to be stumbling blocks to the Gupta family’s enterprises.  In another instance of an attempt to obtain the assistance of a member of government through illicit means, Rajesh reportedly promised a cut of a large scale development project to a provincial minister in return for the minister’s assistance.  While making this offer, Rajesh reportedly referred to two other politically powerful individuals present at the meeting as receiving large monthly payments, similar to the one being offered the provincial minister, directly from Rajesh in return for their assistance with a mining project.  In addition, the Gupta family was overpaid for government contracts and then used a portion of the proceeds of those overpayments to donate money to a South African political party.  Further, the family paid money to a South African government official in exchange for the appointment of other government officials friendly to the Gupta family business interests.  As a part of their corrupt business enterprise, South African government officials and business executives discussed ways to capture government contracts and then move the proceeds of those contracts through Gupta-owned businesses. 

AJAY GUPTA

Ajay Gupta (Ajay) is being designated for being the leader of an entity that has engaged in, or whose members have engaged in, corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery.

Ajay is the family patriarch who formulated the family’s corrupt business strategies and controlled its finances. 

ATUL GUPTA

Atul Gupta (Atul) has materially assisted, sponsored, or provided financial, material, technological support for, or goods or services to or in support of, an entity that has engaged in, or whose members have engaged in, corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery.

Atul is widely known to have overseen the Gupta family’s outreach to corrupt government officials.

RAJESH GUPTA

Rajesh Gupta (Rajesh) has materially assisted, sponsored, or provided financial, material, technological support for, or goods or services to or in support of, an entity that has engaged in, or whose members have engaged in, corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery.

Rajesh cultivated important relationships with the sons of powerful South African politicians and led efforts to pursue business and relationships in a South African province where corruption was rampant.  Rajesh attempted to use at least one of those relationships to seek undue influence with additional members of a South African political party.

SALIM ESSA

Salim Essa, a business associate of the Gupta family, has materially assisted, sponsored, or provided financial, material, technological support for, or goods or services to or in support of, an entity that has engaged in, or whose members have engaged in, corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery. 

As a result of today’s action, all property and interests in property of the individuals named above, and of any entities that are owned, directly or indirectly, 50 percent or more by them, individually, or with other designated persons, that are in the United States or in the possession or control of U.S. persons, are blocked and must be reported to OFAC.  Unless authorized by a general or specific license issued by OFAC or otherwise exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons.  In addition, any approval, financing, facilitation, or guarantee by a U.S. person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited by E.O. 13818 if performed by a U.S. person or within the United States would be prohibited.

GLOBAL MAGNITSKY

Building upon the Global Magnitsky Human Rights Accountability Act, on December 20, 2017, the President signed E.O. 13818, in which the President found that the prevalence of human rights abuse and corruption that have their source, in whole or in substantial part, outside the United States, had reached such scope and gravity that it threatens the stability of international political and economic systems.  Human rights abuse and corruption undermine the values that form an essential foundation of stable, secure, and functioning societies; have devastating impacts on individuals; weaken democratic institutions; degrade the rule of law; perpetuate violent conflicts; facilitate the activities of dangerous persons; and undermine economic markets.  The United States seeks to impose tangible and significant consequences on those who commit serious human rights abuse or engage in corruption, as well as to protect the financial system of the United States from abuse by these same persons. 

To date, the Department of the Treasury has designated 118 individuals and entities under E.O. 13818.  This figure is in addition to the numerous human rights- or corruption-related designations Treasury has issued under other various authorities.  In total, since January of 2017, Treasury has taken action against more than 680 individuals and entities engaged in activities related to, or directly involving, human rights abuse or corruption. 

and State:

Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned four individuals for corruption in South Africa pursuant to Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act.  Specifically, OFAC designated Ajay Gupta, Atul Gupta, Rajesh Gupta, and Salim Essa for their involvement in corrupt schemes with government officials and employees in state-owned enterprises for their own personal gain.  As a result of today’s actions, any property, or interest in property, of those designated within U.S. jurisdiction is blocked.  Additionally, U.S. persons are generally prohibited from engaging in transactions with blocked persons, including entities owned or controlled by designated persons.

Today’s action demonstrates continued U.S. commitment to promoting transparency, accountability, and the rule of law globally.  We commend the critical role played by South Africa’s civil society activists, whistleblowers, and investigative journalists to shine the spotlight on the Gupta network’s elicitation of criminal abuse of public office and other acts of corruption, which have deterred investment and impeded South Africa’s economic growth.  The United States strongly supports ongoing efforts by the Government of South Africa, including its independent judiciary, judicial commissions of inquiry, and law enforcement agencies, to investigate and prosecute alleged instances of corruption.  Successfully prosecuting and deterring corruption is essential to building a future of accountable government that fosters economic growth and opportunity for all of South Africa’s citizens.

both issued press releases.

As you can see, although the Magnitsky sanctions program is ostensibly about human rights abuses, the “global” (i,e. Besides Russia) version includes corruption. Why not just a corruption program? Mr. Watchlist wonders…

Links:

OFAC Notice

Treasury Press Release

State Department Press Release

So, according to this story (one of many), Adobe is going to cut off all Venezuelan customers. It looks like it’s struggling with the latest OFAC Executive Order, which blocks all assets of the “Government of Venezuela” – and that includes all associated persons (i.e. all government employees). And that seems to be the problem – because it can’t reliably tell government employees from other Venezuelans, Adobe is cutting off all business to the country.

Mr. Watchlist wonders – was this part of the Trump Administration’s machinations, or just a happy side effect?

For a period of over 3 years, GE appears to have violated the Cuban Assets Control Regulations (CACR) 289 times, resulting in a settlement of $2,718,581, as opposed to a base penalty of $3,377,119 and a maximum statutory penalty of $17,785,000.

This is what happened:

Specifically, between December 2010 and February 2014, the GE Companies appear to have violated § 515.201(b) of the CACR on 289 occasions by accepting payment from The Cobalt Refinery Company (“Cobalt”) for goods and services provided to a Canadian customer of GE.

Since June 1995, Cobalt had been identified as a specially designated national (SDN) of Cuba and appeared on OFAC’s List of Specially Designated Nationals and Blocked Persons (the “SDN List”). Publicly available information also demonstrated that GE’s former Canadian customer is a corporation with strong historic and then-current economic ties to the Cuban mining industry through its business partnerships and joint ventures with the Cuban government. Cobalt is one of three entities owned by a public joint venture between GE’s Canadian customer and the Cuban government. From at least 1996 until the GE Companies terminated their relationship with their Canadian customer, the GE Companies maintained — and renewed on at least 18 occasions — this customer relationship despite the obvious sanctions risk posed by the relationship.

On February 24, 2014, GE Working Capital Solutions discovered that from at least 2010 to 2014, the GE Companies received numerous payments directly from Cobalt for invoices issued to GE’s Canadian customer. While the GE Companies negotiated and entered into contracts with GE’s Canadian customer, and sent all of their invoices to GE’s Canadian customer, Cobalt paid the GE Companies for its goods and services in more than 65 percent of the total transactions. The GE Companies approved Cobalt as a third-party payer and, over a four-year period, failed to appropriately recognize the significant and widely published relationship between Cobalt and their Canadian customer and did not undertake sufficient diligence into their customer’s activities. The GE Companies deposited all checks received from Cobalt into GE’s bank account at a Canadian financial institution. The checks contained Cobalt’s full legal entity name as it appears on OFAC’s SDN List as well as an acronym for Cobalt (“Corefco”), but the GE Companies’ sanctions screening software, which screened only the abbreviation of the SDN’s name, never alerted on Cobalt’s name.

In total, the GE Companies received 289 checks directly from Cobalt from on or about December 9, 2010 to on or about February 28, 2014 totaling approximately $8,018,615. Additionally, goods and services the GE Companies provided to its Canadian customer were, in turn, used to supply utility services and other benefits to Cobalt, which is co-located with GE’s Canadian customer.

And how OFAC ended up at the final figure:

OFAC determined the following to be aggravating factors:

  1. The GE Companies failed to take proper or reasonable care with respect to their U.S. economic sanctions obligations — particularly given GE’s commercial sophistication. GE failed to identify that (i) for at least four years it was receiving payments that were on their face from a SDN of Cuba that has been on the SDN List since 1995, and (ii) it was providing goods and services to a customer that provides a direct and indirect benefit to a facility owned and operated by that designated Cuban company;
  2. The GE Companies’ actions caused substantial harm to the objectives of the Cuba sanctions program by conducting a large volume of high-value transactions directly with a Cuban company on the SDN List over a period of many years; and
  3. The substance of GE’s disclosures and other communications with OFAC leave substantial uncertainty about the totality of the benefits conferred to a Cuban company on the SDN List by the GE Companies through their Canadian customer, which had substantial and public ties to Cuba and the Cuban mining industry. While OFAC considered certain jurisdictional limitations on GE’s ability to provide a full picture of the scope of work performed at the request of its Canadian customer, at all relevant times, GE had reason to know of its customer’s specific and longstanding relationship with Cobalt. GE should have treated its Canadian customer as higher risk due to the customer’s publicly known joint venture with Cuba and substantial reliance on Cuban-origin ore. Finally, despite the provision to GE of OFAC’s Office of Enforcement Data Delivery Standards, GE did not provide its primary submissions to OFAC in a clear and organized manner and the submissions contained numerous inaccuracies, placing a substantial resource burden on OFAC during the course of its investigation.

OFAC determined the following to be mitigating factors:

  1. None of the GE Companies has received a penalty notice or Finding of Violation from OFAC in the five years preceding the date of the earliest transaction giving rise to the alleged violations;
  2. GE identified the alleged violations by testing and auditing its compliance program. Additionally, GE implemented remedial measures and new processes to enhance its sanctions compliance procedures, including developing a training video for all company employees using the alleged violations as a case study; and
  3. GE cooperated with OFAC by executing and extending multiple statute of limitations tolling agreements.

And the lesson to be learned from all of this:

This enforcement action highlights the sanctions risks to U.S. companies and their foreign subsidiaries associated with (i) accepting payments from third parties and (ii) conducting transactions in foreign currency or at a foreign financial institution. Additionally, this action demonstrates the importance of conducting appropriate due diligence on customers and other counter-parties when initiating and renewing customer relationships. Ongoing compliance measures should be taken throughout the life of commercial relationships.

As noted in OFAC’s Framework for Compliance Commitments, U.S. companies can mitigate sanctions risk by conducting risk assessments and exercising caution when doing business with entities that are affiliated with, or known to transact with, OFAC-sanctioned persons or jurisdictions, or that otherwise pose high risks due to their joint ventures, affiliates, subsidiaries, customers, suppliers, geographic location, or the products and services they offer.

Link:

OFAC Enforcement Information

General License 3 is up to revision G, while 9 is up to F.

The relevant paragraph in 3G says:

(c) Except as provided in paragraph (:f) of this general license, all transactions and activities prohibited by Section l(a)(iii) of E.O. 13808 or by E.O. 13850, each as amended, or by E.O. 13884 that are ordinarily incident and necessary to the wind down of financial contracts or other agreements that were entered into prior to 4:00 p.m. eastern standard time on February 1, 2019, involving, or linked to, GL 3G Bonds are authorized. This authorization is valid through 12:01 a.m. eastern daylight time, March 31, 2020.

And in 9F:

(d) Except as provided in paragraph (g) of this general license, all transactions and activities prohibited by Section l(a)(iii) of E.O. 13808 or by E.O 13850, each as amended, or by E.O. 13884, that are ordinarily incident and necessary to the wind down of financial contracts or other agreements that were entered into prior to 4:00 p.m. eastern standard time on January 28, 2019, involving, or linked to, PdVSA securities are authorized. This authorization is valid through 12:01 a.m. eastern daylight time, March 31, 2020.

In the previous versions of these licenses, these clauses were due to expire on September 30th.

Links:

OFAC Notice

General License 3G

General License 9F

Today, the United States continues to take action in response to Russian attempts to influence U.S. democratic processes by imposing sanctions on four entities and seven individuals associated with the Internet Research Agency and its financier, Yevgeniy Prigozhin. This action increases pressure on Prigozhin by targeting his luxury assets, including three aircraft and a vessel.

Let this serve as a warning: any actors who continue to engage with these individuals, companies, aircraft, or vessel may also be subject to future sanctions. The U.S. government will continue to work to ensure that Prigozhin and others like him find no refuge or comfort as long as they carry out destabilizing activities that threaten the interests of the United States and its allies and partners.

We have been clear: We will not tolerate foreign interference in our elections.  The United States will continue to push back against malign actors who seek to subvert our democratic processes and we will not hesitate to impose further costs on Russia for its destabilizing and unacceptable activities. 

Link:

State Department press release