OFAC Iran Sanctions Enforcement Presentation
Post on 21-Apr-2015
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So What?Iran Sanctions: Investigations and Penalties
Presented by:Erich C. Ferrari, Ferrari Legal, P.C.
How will they ever find out?
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Common ways that investigations are initiated
• Blocking and Reject Reports• Most common way; thousands of these reports are sent every year
• License Applications• Revealing information about violations
• Federal Investigations• Very common when investigating havaleh brokers
• Self-Disclosures: Intentional and Unintentional• Voluntary self-disclosures vs. contacting OFAC and informing them of
violations
• Anonymous Tips
Blocking and Rejecting Reports
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Wire Request
Intermediary U.S. Treasury
Interdiction
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SWIFT
Blocked/Rejected4
Subpoenato Sender/ Recipient
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Sender
U.S. Bank
What kind of trouble can you get in?
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• Problems with the banks• Bank Investigations• Freezing of Accounts• Closing of Accounts
• OFAC Investigations • Administrative Subpoenas• Penalty Process• Coordination with other agencies
• Criminal Investigations• Agents• Target/Subject Letters• Exports and Money Transferring
• Banki, Seifi, Amirnazmi, Mousavi, Vaghari, Hariri, Lahiji, Socara, etc.
OFAC Investigations
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Administrative Subpoenas• 30 days to provide information and documents• You can request an extension, but may have to sign a tolling agreement• Your response is under penalty of perjury
• Not only false statements, but also misleading statements• OFAC will refer cases to DOJ for false statements (5 year max)
Voluntary Self-Disclosures• Self reporting a violation• 50% reduction in base penalty• If a violation occurred and you need a license to transfer funds, then VSD
Penalty Calculations• Base Penalty Calculations• Enforcement Guidelines• Settlement
Enforcement Responses
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Sanctions Enforcement Options
Base Penalty Calculation Matrix
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One-Half of Transaction Value
Capped at $125,000 per violation
One-Half of Statutory Maximum
Applicable Schedule Amount
Capped at $250,000 per violation
Statutory Maximum
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Egregious Case
Volu
ntar
y Se
lf-D
iscl
osur
e
No Yes
No
Yes
* The base penalty amount will not exceed the applicable statutory maximum amount.
Violation Schedule Amounts
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Amount Transaction Value$1,000 < $1,000
$10,000 >= $1,000 and < $10,000
$25,000 >= $10,000 and < $25,000
$50,000 >= $25,000 and < $50,000
$100,000 >= $50,000 and < $100,000
$170,000 >= $100,000 and < $170,000
$250,000 >= $170,000
Criminal Prosecutions
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US Attorney’s Offices across the U.S. have been actively prosecuting these cases.
There are a number of individuals under investigation across the United States for these types of violations.
• Testimony of Special Agent Pelczar (JTTF)Hearing Transcript from the Vaghari Case: Much of his work involves investigating Iranians.
If the FBI comes knocking….• Don’t speak to them without counsel• People get nervous and may say something that mischaracterizes• Proffer Letter
Conclusion
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Enforcement cases are on the rise:• 2009: 1,000 investigations• 2010: 1,200 investigations• 2011: 1,300 investigations
Difficulty in transferring funds is leading to more creative ways to get around sanctions which is leading to more investigations
Talk to a lawyer with experience before acting• Prior to engaging in the transactions• File a request for interpretative guidance• Map out how the transaction will occur
Iranian Transactions Regulations
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If you have questions after the event please contact me:
• Phone: 202-280-6370 or 310-270-9930• Email: ferrari@ferrari-legal.com• The Iranian Transactions Regulations
Practice Guide• www.sanctionlaw.com
THANK YOU!
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