Economic Sanctions Archives | Page 5 of 6

U.S. Unseals Criminal Complaint against North Korean Programmer for Cyber Attacks and Intruders

September 7, 2018 by Bruce Zagaris 1 Comment

On September 6, 2018, the U.S. government announced the unsealing of a criminal complaint filed in the U.S. District Court Central District of California (Los Angeles) charging Park Jin Hyok (aka Jin Hyok Park and Pak Jin Hek), a North Korean citizen, for his participation in a conspiracy to conduct multiple destructive cyberattacks around the world resulting in damage to massive amounts of computer hardware, and the significant loss of data, money and other resources.

According to the complaint Park participated in a government-sponsored hacking team known as the “Lazarus Group” and worked for a North Korean government front company, Chosun Expo Joint Venture (aka Korea Expo Joint Venture or “KEJV”), to support the DPRK government’s malicious cyber actions.

The conspiracy’s malicious activities include the establishment of the malware used in the 2017 WannaCry 2.0 global ransomware attack; the 2016 theft of $81 million from Bangladesh Bank; the 2014 attack on Sony Pictures Entertainment (SPE); and various other attacks or intrusions on the entertainment, financial services, defense, technology, and virtual currency industries, academia, and electric utilities.

Simultaneously, Treasury Secretary Steven Mnuchin announced that the Treasury’s Office of Foreign Assets Control (OFAC) designated Park and KEJV under Executive Order 13722 based on the malicious cyber and cyber-enabled activity alleged in the criminal complaint.

The complaint charges Park with one count of conspiracy to commit computer fraud and abuse, for which there is a maximum sentence of five years in prison, and one count of conspiracy to commit wire fraud, for which there is a maximum sentence of 20 years in prison.

ark was a computer programmer and worked for more than a decade for KEJV, which had offices in China and N. Korea. It is affiliated with Lab 110, a part of the N. Korean military intelligence. The conspiracy also engaged in malicious cyber activities, utilizing spear-phishing campaigns, destructive malware attacks, exfiltration of data, theft of funds from bank accounts, ransomware extortion, and propagating “worm” viruses to create botnets.

The complaint describes several of the conspiracy’s alleged malicious cyber activities, both successful and unsuccessful, and in the U.S. and abroad, focusing in particular on four specific examples as follows: in November 2014, the destructive attack on Sony Pictures Entertainment (SPE) in retaliation for the movie “The Interview”, a farcical comedy that depicted the assassination of the N. Korean leader; in February 2016, the conspiracy stole $81 million from Bangladesh Bank, accessing the bank’s computer terminals that interfaced with the SWIFT communication system and then sent fraudulently authenticated SWIFT messages directing the Federal Reserve Bank of NY to transfer funds from Bangladesh to accounts in other Asian countries; in 2016 and 2017, the conspiracy targeted various U.S. defense contractors, including Lockheed Martin, with spear-phishing emails; and in May 2017 a ransomware attack known as WannaCry 2.0 infected hundreds of thousands of computers around the work, causing extensive damage, including significantly impacting the UK’s National Health Service.

In connection with the unsealing of the criminal complaint, the FBI and prosecutors furnished cybersecurity providers and other private sector partners detailed information on accounts used by the conspiracy in order to help these partners in their own independent investigative activities and disruptive efforts.

The current issue of the IELR will have a more comprehensive article on the case.

In Latest Escalation in U.S.-Turkey Row, Erdogan Orders Sanctions on “America’s Justice and Interior Ministers”

August 6, 2018 by Zarine Kharazian Leave a Comment

On Saturday, President Recep Tayipp Erdogan of Turkey announced sanctions against two American officials in retaliation to sanctions imposed by U.S. against two Turkish government ministers, the AP reports.

The U.S. Department of the Treasury’s Office of Foreign Assets Control originally froze the assets of Turkey’s Minister of Justice Abdulhamit Gul and Minister of Interior Suleyman Soylu because both officials were determined to have played “leading roles” on the arrest and detention of Andrew Brunson, an evangelical pastor working in the city of Izmir, Turkey. Brunson, 50, leads the Resurrection Church in Izmir, a small congregation of less than 30 people. Erdogan’s authorities arrested him in October 2016, in the aftermath of the 2016 failed coup attempt.

The Turkish government has charged Brunson with espionage, as well as providing assistance to organizations such as the Gulen movement and Kurdistan Worker’s Party, both of which Turkey designates as terrorist groups. United States government officials have denounced the charges.

On July 25, after nearly two years in detention, Brunson was moved to house arrest because of health concerns, the New York Times reported.

“Pastor Brunson’s unjust detention and continued prosecution by Turkish officials is simply unacceptable,” Treasury Secretary Steven Mnuchin said in a statement. “President Trump has made it abundantly clear that the United States expects Turkey to release him immediately.”

Similarly, Vice President Mike Pence invoked Brunson’s case during his remarks at the Ministerial to Advance Religious Freedom in Washington, D.C. on July 26. “Pastor Andrew Brunson is an innocent man,” Vice President Pence stated. “There is no credible evidence against him. Our entire administration has worked tirelessly to secure Pastor Brunson’s release. Yesterday, Turkey released Pastor Brunson from prison, only to place him under house arrest. This is a welcome first step, but it is not good enough.”

Amid the friction, the Turkish lira has hit record lows. The Wall Street Journal reported that the lira was down 3.8% against the U.S. dollar as of August 6, and that the lira has fallen almost 30% this year.

Meanwhile, Erdogan’s proposed sanctions are vague and primarily symbolic. In a statement delivered in Ankara, he stopped short of targeting any particular U.S. officials by name. He instead ordered Turkish authorities to “freeze the assets of America’s justice and interior ministers in Turkey, if there are any.” As AP points out, the United States government has no such titles, so it is unclear who Erdogan is aiming to target.

U.S. Issues Sanctions Risks for Businesses with N. Korean Supply Chain Links

July 24, 2018 by Bruce Zagaris Leave a Comment

On July 23, 2018, the U.S. Department of State, with the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the U.S. Department of Homeland Security’s (DHS) Customs and Border Protection (CBP) and immigration and Customs Enforcement (ICE), issued an advisory to high sanctions evasions tactics used by North Korea that could expose businesses – including manufacturers, buyers, and service providers – to sanctions compliance risks under U.S. and/or U.N. sanctions authorities. The advisory also helps businesses in complying with the requirements under Title III, the Korean Interdiction and Modernization of Sanctions Act of the Countering America’s Adversaries through Sanctions Act (CAATSA). The advisory warns businesses to be aware of deceptive practices employed by North Korea in order to implement effective due diligence policies, procedures, and internal controls to ensure compliance with applicable legal requirements across their entire supply chains.

Multiple U.S. and U.N. sanctions impose restrictions on trade with North Korea and the use of North Korean labor. Annex 1 to the advisory sets forth a more detailed description of the North Korean sanctions prohibitions related to supply chains. The two primary risks are: (1) inadvertent sourcing of goods, services, or technology from North Korea; and (2) the presence of North Korean citizens or nationals in companies’ supply chains, whose labor generates revenue for the North Korean government. The advisory also provides due diligence references for businesses.

The heightened risk for and potential indicators of goods, services, and technology with a North Korean nexus includes:

Sub-contracting/consignment firms [e.g., third country suppliers (Chinese) shift manufacturing or sub-contracting work to a North Korean factory without informing the customer or relevant parties);

Mislabeled Good/Services/Technology: N. Korean exporters disguise the origin of goods produced in N. Korea by affixing country-of-origin labels that identify a third country.

Joint Ventures: North Korean firms have established hundreds of joint ventures with partners from China and other countries in various industries, such as apparel, construction, small electronics, hospitality, minerals, precious metals, seafood and textiles (see Annex 2 of the advisory for a list of known North Kean joint ventures).

Raw Materials or goods provided with Artificially Low Prices: North Korean exporters sell goods and raw materials well below market prices to intermediaries and other traders.

Information Technology (IT) Services: North Korea sells a range of IT services and products abroad, including website and app development, security software, and biometric identification software that have military and law enforcement applications.

The advisory also discusses heightened risk for North Korean overseas labor producing revenue for the government of North Korea. The North Korean government exports large numbers of laborers to meet a single contract in various industries, including but not limited to apparel, construction, footwear manufacturing, hospitality, IT services, logging, medical, pharmaceuticals, restaurant, seafood processing, textiles, and shipbuilding. China and Russia continue to host more North Korean laborers than all other countries and jurisdictions combined. The advisory lists 42 jurisdictions hosting North Korean laborers.

The advisory sets forth potential indicators of North Korean overseas labor.

The advisory gives due diligence best practices, namely those businesses closely examine their entire supply chain(s) for North Korean laborers and goods, services or technology, and adopt appropriate due diligence best practices. This especially applies to those businesses with operations in high-risk countries, or who operate in high-risk industries. Well-documented due diligence policies and practices may be considered mitigating factors when the U.S. government determines the appropriate enforcement response.

The advisory reminds businesses of the penalties on individuals and entities for violations of sanctions and enforcement actions and activities that could result in designation by OFAC. The advisory also provides where interested individuals can find additional information on OFAC sanctions.

During the second week of July the U.S. complained to the Security Council North Korea sanctions committee that as of May 30, North Korea had made 89 illicit ship-to-ship transfers of refined petroleum products. The U.S. asked the committee to notify all U.N. member states of the violations of a refined petroleum cap of 500,000 barrels a year – imposed by the council in December – and order an immediate halt to all transfers. On July 19, 2018, China and Russia delayed a U.S. effort for a U.N. Security Council committee to order a ban on refined petroleum exports to North Korea. China and Russia requested more detail on a U.S. accusation that Pyongyang breached sanctions.

In the coming weeks the U.S. will try to both unilaterally and multilaterally strengthen North Korean sanctions unless and until North Korea starts implementing the June 12 “denuclearization agreement” or joint statements to the satisfaction of the U.S. government.

The next issue of the IELR will have additional information on the North Korean sanctions.

Grand Jury Indicts 12 Russian Intelligence Officers for Cybercrime Offices in the 2016 Election

July 16, 2018 by Bruce Zagaris Leave a Comment

On July 13, 2018, Deputy Attorney of the United States announced that a grand jury in the U.S. District Court for the District of Columbia return an indictment presented by the Special Counsel’s Office.

The indictment charges twelve Russian national for committing federal crimes that were intended to interfere with the 2016 U.S. presidential election. All of the defendants are members of the Main Intelligence Directorate of the General Staff (GRU), a Russian Federation intelligence agencies. In their official capacities, they worked for months started in March 2016 to hack into the computer networks of the Democratic Congressional Campaign Committee (DCCC), the Democratic National Committee (DNC), and the presidential campaign of Hillary Clinton, and released that information on the internet under the names of “DCLeaks” and “Guccifer 2.0” and through another entity.

Starting in March 2016, the Russian intelligence officials started spearphisphing volunteers and employees of the presidential campaign of Hillary Clinton, including the campaign’s chairman. They defendants were able to steal the usernames and passwords for numerous individuals and use the credentials to steal email content and hack into other computers. They also hacked into the computer networks of the DCCC and the DNC.

They defendants coordinated with other intelligence officials to release the stolen documents for the purpose of interfering with the 2016 presidential election. They registered the domain DCLeaks.com and later staged the release of thousands of stolen emails and documents through that website.

According to the indictment on July 27, 2016, Russian hackers tried for the first time to break into the servers of Mrs. Clinton’s personal offices. It was the same that then candidate Trump said “Russia, if you’re listening, I hope your’e able to find the 30,000 emails that are missing…I think you’ll probably be rewarded mightily by our press.” Trump was referring to the emails Mrs. Clinton had deleted from the private account she had used when she was secretary of state.

The indictment states the hackers were communicating with “a person who was in regular contact with senior members of the presidential campaign” Two government officials identified the person as Roger J. Stone Jr., a longtime adviser to Mr. Trump and the subject of close scrutiny by the FBI and the Special Counsel’s team.

To avoid detection, defendants used false identities, while using a network of computers located around the world, paid for with cryptocurrency. The funding structure supported their efforts to buy key accounts, servers, and domains.

The indictment alleges: a criminal conspiracy to commit an offense against the U.S. through cyber operations by t he GRU that involved the staged release of stolen documents to interfere with the 2016 president election (Count 1); aggravated identity theft for using identification belonging to eight victims to further their computer fraud scheme (Counts 2-9); a conspiracy to launder money in which the defendants laundered the equivalent of more than $95,000 by transferring the money that they used to purchase servers and to fund other costs related to their hacking activities through cryptocurrencies such as bitcoin; and conspiracy to commit an offense against the U.S. by trying to hack into the computers of state boards of elections, secretaries of state, and U.S. companies that supplied software and other technology related to the administration of elections.

There is no allegation in the indictment that any American was a knowing participant in the alleged unlawful activity or knew they were communicating with Russian intelligence officers. However, the person who benefitted from the alleged crimes, had a one-on-one meeting on July 16, 2018 with President Vladimir V. Putin of Russia. The meeting occurred, notwithstanding the indictment and public warnings by Dan Coats, the director of national intelligence, that “the digital infrastructure that services this country is literally under attack.“

Treasury Department’s Latest Round of Russia Sanctions; Trump-Putin Summit to be Held in July

June 28, 2018 by Yasmin Chaudhary Leave a Comment

Earlier this month, on June 11, the Treasury Department imposed new sanctions on Russian companies and individuals that provide support to the FSB’s cyberwarfare efforts. The decision was made not long after President Trump’s statement on bringing Russia back into the G-7, and before a meeting of EU leaders that may extend existing sanctions on Russia by six months.

The five companies targeted by the Treasury’s round of sanctions are Digital Security, ERPScan, Embedi, Kvant Scientific Research Institute, and Divetechnoservices. The latter has provided underwater equipment for the FSB, which has actively been tracking underwater communications cables that transmit much of the world’s telecommunications data. Three of Divetechnoservices’ employees have also been singled out by Department of the Treasury’s Office of Foreign Assets Control. Their assets have been frozen, and they can no longer conduct business with Americans.

The basis for this decision lies in former President Barack Obama’s Executive Order 13694 (“Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities”) and the CAATSA act (Countering America’s Adversaries Through Sanctions Act). The Treasury went forward with these sanctions in response to cyberattacks directed not just towards the United States, but to Ukraine as well, in the form of NotPetya—a cyber outbreak which is believed to have made use of stolen hacking tools of the National Security Agency. Treasury Secretary Steven T. Mnuchin stated the following:

“The United States is engaged in an ongoing effort to counter malicious actors working at the behest of the Russian Federation and its military and intelligence units to increase Russia’s offensive cyber capabilities. The entities designated today have directly contributed to improving Russia’s cyber and underwater capabilities through their work with the FSB and therefore jeopardize the safety and security of the United States and our allies.”

President Trump has delivered mixed rhetoric regarding Russia leading up to this. Despite calling himself Russia’s “worst nightmare,” he stated that the country should be allowed back into what is now the G-7. Russia had been removed four years ago in response to its annexation of Crimea. This action had resulted in sanctions on energy, defense, and financial sectors by European Union leaders. It is likely that in their Brussels meeting this week, these EU heads will make the call to extend these sanctions for a further six months.

On June 28, the Kremlin and the White House both released statements announcing that President Trump and his Russian counterpart, Vladmir Putin, will meet at a bilateral summit in Helsinki, Finland on July 16. According to the short statement issued by the White House, Trump and Putin will discuss “relations between the United States and Russia and a range of national security issues.”

Bill Browder, Self-Proclaimed Enemy of Putin, Briefly Arrested by Interpol in Spain

June 1, 2018 by Madeline Henshaw-Greene Leave a Comment

On May 30, British financier Bill Browder was arrested and detained by Spanish police due to a request from Russia to Interpol. Browder live-tweeted the experience, and was released a few hours later on orders from Interpol’s general secretary. Browder, once one of the largest foreign investors in the Russian stock market, has been persona non grata in Russia since 2013, when he was convicted of tax fraud in absentia and sentenced to nine years in prison. Since then, Russia has tried numerous times to apprehend him through what is known as a red notice, a request a member of Interpol can make to a member in another country to detain and extradite a wanted individual. Browder claims that this is the sixth time that Russian officials have attempted to arrest him using a red notice, and has expressed concern that “‘Interpol is incapable of stopping Russian abuse of their systems.’”

Bill Browder is known for founding Hermitage Capital Management. One of the company’s tax lawyers was Sergei Magnitsky, a whistle-blower on Russian government corruption and mismanagement who was arrested and died in a Moscow detention center. Since then, Browder has led a global campaign calling for sanctions against those involved in Magnitsky’s death, and pushed the United States government to adopt and enact the Magnitsky Act in 2012. As a result, the Russian government convicted him of tax fraud and have been trying to apprehend him ever since. In 2015, Browder published a book about the Russian government’s attempts to arrest him called “Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice.”

Browder was in Madrid to testify in a corruption case involving Russian officials, and was on his way to court when he was apprehended by Spanish police and taken into custody. Spanish law enforcement claimed that he had been brought in because of an arrest warrant for tax evasion that had been issued by Russian authorities. They were forced to let him go upon discovering that the warrant was invalid, since it had expired and Interpol had failed to delete it from their system. Browder disagrees, insisting that the arrest was the result of a red notice and that he was released on the orders of Interpol’s general secretary. If so, it would not be the first time that Interpol has refused to comply with a Russian request for Browder’s arrest. In 2013, Interpol put out a rare statement rebuking the Russian government’s request, stating that its attempt to arrest Browder “‘was of a predominately political nature.’”

Treasury Department Imposes Sanctions on Iranian Bank Officials with Ties to Hezbollah

May 17, 2018 by Madeline Henshaw-Greene Leave a Comment

On May 15^th, the Treasury Department placed sanctions on an Iranian bank, three bank officials, and a key Hezbollah official, in the Trump administration’s first step towards re-imposing economic pressures on Iran since President Trump pulled out of the Iran deal earlier this month. The individuals were also designated as Specially Designated Global Terrorists, pursuant to Executive Order 13224, which President George W. Bush signed as a response to the 9/11 attacks. The Treasury Department accused the sanctioned bank officials of abusing the U.S. and regional financial systems in order to funnel millions of dollars to the Lebanese militia, Hezbollah, which the U.S. has designated as a terror group. Treasury Secretary Steven Mnuchin said that the United States would no longer “permit Iran’s increasingly brazen abuse of the international financial system” as a means to “provide financial support to its terrorist proxies”.

The Office of Foreign Assets Control (OFAC) designated Valiollah Seif, the governor of Iran’s Central Bank, as well as the bank’s assistant director of the international department, Ali Tarzali, and subjected them to sanctions that prohibit them from “opening or maintaining in the United States of a correspondent account…by a foreign financial institution” that is known to serve as a vessel for financial support “in connection with Iran’s support for international terrorism”. The department also singled out Aras Habib, the chief executive of Al-Bilad Islamic Bank, as well as the bank itself, and subjected them to similar sanctions. Finally, OFAC designated a key Hezbollah official, Muhammad Qasir, and subjected him to sanctions prohibiting him from using or opening a United States account for the purposes of facilitating transactions to Hezbollah or anyone connected with the group.

The sanctions have geopolitical consequences as well as economic ones. Iran gives money to Hezbollah so that the militia can act as its proxy in the Syria conflict and provide Iranian support to Bashar al-Assad. The Iranians have also supplied Hezbollah with missiles and other weapons in the past. The Trump administration will use these sanctions as a means to draw Iranian support out of the conflict, but it has yet to take military action against Iranian-backed militias in the region. These sanctions do not currently extend to the Central Bank of Iran, however Secretary Mnuchin noted that the Central Bank will once again be under sanctions for certain transactions, including “on the purchase or acquisition of U.S. dollars banknotes by the Government of Iran”. These sanctions, as well as additional sanctions on specific individuals, will be re-imposed later this year now that the United States will no longer participate in the Iran deal and is reverting to economic sanctions until President Trump can negotiate a better one.

For more on this:

Michael R. Gordon, U.S. Sanctions Iran’s Central Bank Governor, Alleges Hezbollah Ties, The Wall Street Journal, https://www.wsj.com/articles/u-s-sanctions-irans-central-bank-governor-alleges-hezbollah-ties-1526413596

U.S. Leads with Additional Sanctions against Russia, Targeting Putin’s Inner Circle

April 11, 2018 by Bruce Zagaris Leave a Comment

On April 6, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated seven Russian oligarchs and 12 companies they own or control, 17 senior Russian government officials, and a state-owned Russian weapons trading company and its subsidiary, a Russian bank.[1]

Simultaneously with the action, OFAC issued two general licenses (General Licenses 12[2] and 13[3] as well as related FAQs)[4] to minimize immediate disruptions to U.S. persons, partners, and allies.

The designation freezes all assets subject to U.S. jurisdiction of the designated individuals and entities, and of any other entities blocked by operation of law as a result of their ownership by a sanctioned party. U.S. persons are generally prohibited from dealings with them as well as with entities owned 50% or more by them directly or indirectly, unless authorized by an OFAC license. U.S. persons must block the property and interests in property of the SDNs that come within their possession or control. In addition, under § 228 of CAATSA, non-U.S. persons could be subject to sanctions for knowingly facilitating significant transactions for or on behalf of the individuals or entities blocked.[5]

Designated Russian Oligarchs and Government Officials

The list targets Putin’s inner circle. The seven oligarchs include Vladimir Bogdanov, the Director General and Vice Chairman of Surgutneftegaz, a vertically-integrated oil company, and Oleg Deripaksa, who operates an energy company, has a Russian diplomatic passport, and has been investigated for money laundering, and accused of threatening the lives of business rivals, illegally wiretapping a government official, and participating in extortion and racketeering.

Among the long list of Russian government officials that OFAC designated are: Andrey Akimov, Chairman and the Management Board of thestate-owned Gazprombank; Mikhail Fradkov, President of the Russian Institute for Strategic Studies (RISS), a major research and analytical center established by the President of the Russian Federation, providing information support to the Presidential Administration, Federation Council State Duma, and Security Council; and Sergey Fursenko.

Analysis

In effect, the new OFAC action prevents the oligarchs from traveling to the U.S., doing business, or even opening a bank account with any major company or bank in the West. In addition, it restricts foreign individuals from facilitating transactions on their behalf.[6]

Since many of Russia’s oligarchs have significant personal and financial ties to the West, where they own hundreds of millions of dollars in property, the new action heightens the pressure on them. Some of the targeted oligarchs, however, have likely taken action to protect some their assets in the wake of prior OFAC announcements.

U.S. Treasury Secretary Steven T. Mnuchin characterized the new action as responding to Russian occupation of Crimea and instigation of violence in eastern Ukraine, furnishing the Assad regime with material and weaponry as they bomb their own civilians, trying to subvert Western democracies, and malicious cyber activities.[7] He not mentions the poisoning of Sergei V. Skripal, a former Russian double agent, and his daughter, in response to which the U.S. expelled 60 Russian diplomats, prompting Russia to retaliate by closing its Seattle consulate.

According to Forbes, Russian billionaires have lost over $12 billion in one day as a result of the U.S. sanctions. The Russian stock market has fallen due to the new sanctions on Russian businessmen. Out of the oligarchs targeted, Oleg Deripaska, who owns En +, and US Rusal, among other companies, has been affected the most. After the announcement of the sanctions on April 6, 2018, quotations of the aluminum producer fell by more than 50% on the Hong Kong Stock Exchange, and Deripaska’s wealth decreased by $1.3 billion.[8]

Russian Prime Minister Dmitry Medvedev instructed the Government to prepare options for supporting companies of the oligarchs, whose companies were targeted by new U.S. sanctions. On April 9, 2018, Deputy Prime Minister Arkady Dvorkovich announced that the Russian Government would support the companies that fell under U.S. sanctions.[9]

According to the press-secretary of the Head of state Dmitry Peskov, Russian President Vladimir Putin does not plan to meet with oligarchs who are put on the U.S. sanctions list. However, such a meeting may appear in his schedule.[10]

According to the International Consortium of Investigative Journalists, Deripaska and Arkady Rotenberg, who was designated in March 2014, have used offshore legal entities to hide assets.[11] The U.S. or other persons dealing with such offshore legal entities will need to use due diligence to avoid being subject to sanctions themselves.

A full version of this article will appear in the April issue of the International Enforcement Law Reporter.

[1] U.S. Department of the Treasury, Treasury Designates Russian Oligarchs, Officials, and Entities in Response to Worldwide Malign Activity, April 6, 2018.

[2] OFAC, General License No. 12 https://www.treasury.gov/resource-center/sanctions/Programs/Documents/ukraine_gl12.pdf.

[3] OFAC General License 13 https://www.treasury.gov/resource-center/sanctions/Programs/Documents/ukraine_gl13.pdf.

[4] For the updated FAQs, see https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#542.

[5] U.S. Department of the Treasury, Treasury Designates Russian Oligarchs, Officials, and Entities in Response to Worldwide Malign Activity, supra.

[6] Gardiner Harris, U.S. Puts New Sanctions on Putin’s Inner Circle, N.Y. Times, Apr. 7, 2018, at A, col. 1.

[7] U.S. Department of the Treasury, Treasury Designates Russian Oligarchs, Officials, and Entities in Response to Worldwide Malign Activity, supra.

[8] Russian oligarchs lose almost $12 billion in one day, Crime Russia, Apr. 9, 2018 https://en.crimerussia.com/oligarchs/russian-oligarchs-lose-almost-12-billion-in-one-day

[9] Russian Government to support companies under U.S. sanctions, Crime Russia, Apr. 9, 2018 https://en.crimerussia.com/oligarchs/russian-government-to-support-companies-under-u-s-sanctions-/

[10] Id.

[11] International Consortium of Investigative Journalists, The U.S. list of wealthy Russians and our offshore investigations, Feb. 5, 2018.

U.S. Imposes Sanctions For Russian Cyber Interference with the 2016 U.S. Elections and Malicious Cyber-Attacks

March 18, 2018 by Bruce Zagaris Leave a Comment

On March 15, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated five entities and 19 individuals under the Countering America’s Adversaries Through Sanctions Act (CAATSA) as well as Executive Order (E.O.) 13694, “Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities,” as amended, and codified pursuant to CAATSA.

Treasury Secretary Steven T. Mnuchin explained the new sanctions counter Russia’s continuing destabilizing activities, ranging from interference in the 2016 U.S. election to conducting destructive cyber-attacks, including the NotPetya attack, a cyber-attack attributed to the Russian military on February 15, 2018 in statements released by the White House and the British Government. Mnuchin said the cyber-attack was the most destructive and costly cyber-attack in history. The attack resulted in billions of dollars in damage across Europe, Asia, and the United States, and significantly disrupted global shipping, trade, and the production of medicines. Additionally, several hospitals in the United States were unable to create electronic records for more than a week.

Since at least March 2016, Russian government cyber actors allegedly have also targeted U.S. government entities and multiple U.S. critical infrastructure sectors, including the energy, nuclear, commercial facilities, water, aviation, and critical manufacturing sectors. Indicators of compromise, and technical details on the tactics, techniques, and procedures, are provided in the recent technical alert issued by the Department of Homeland Security and Federal Bureau of Investigation.

Administration has sanctioned more than 100 individuals and entities under our Ukraine and Russia-related sanctions authorities, including 21 individuals, nine entities, and 12 subsidiaries that are owned 50 percent or more by previously sanctioned Russian companies on January 26, 2018.

The current issue of the IELR will carry a more comprehensive article on the new sanctions.

World Bank Office of Suspension and Debarment Publishes New Report

March 7, 2018 by Bruce Zagaris Leave a Comment

On March 6, 2018, the World Bank Office of Suspension and Debarment (OSD) announced that it has recently published its 10-Year Update on Case Data & Metrics in a new report,

Called the Suspension and Debarment: 10-Year Update on Case Data & Metrics 2007-2017: Addendum to the Second Edition (World Bank Office of Suspension and Debarment), it contains information related to the OSD’s sanctions system.

The Addendum contains a series of charts and provides a glimpse into the OSD case review process from a number of angles, and also provides information about the performance of the World Bank’s suspension and debarment system in general. The case tracking data shown reveals no detail about individual cases beyond generic identifiers such as case numbers and milestone dates.

OSD provides the first level of adjudication in the World Bank’s suspension and debarment, or “sanctions,” system. Since 2007, more than 60% of sanctions cases have been resolved on the basis of OSD’s determinations and recommendations. All appealed cases are decided by the World Bank Group Sanctions Board.

OSD works to ensure that the World Bank has an efficient, effective and fair sanctions process. This 10-Year Update furthers the World Bank’s commitment to transparency and accountability regarding its process for sanctioning firms and individuals accused of fraud and corruption in Bank-financed projects. A more detailed description of how the sanctions system operates and the role of OSD can be found in the second edition of OSD’s Report on Functions, Data and Lessons Learned, published in 2015.

This report marks the second edition of OSD’s Report on Functions, Data and Lessons Learned. The first edition was published in 2014 and included data and statistics covering OSD’s first six fiscal years of operations, through June 30, 2013.

The second edition updates these figures to include the next two fiscal years, through June 30, 2015, and includes other revisions necessary to reflect events that have occurred since the first edition’s publication. As with the first edition, the data and statistics in the second edition pertain only to sanctions cases arising from projects financed by the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) within the World Bank Group.

The 10-Year Update provides updated data and information on the following:

Charts and metrics showcasing OSD’s caseload and the general performance of the World Bank’s sanctions system
Updated detailed breakdown of statistics (types of cases, processing times and case outcomes.

All of the proceedings from the World Bank’s Fourth Colloquium on Suspension and Debarment can be accessed. Held on September 14, 2017, the proceedings showcase recent developments in suspension and debarment systems worldwide, examining the various uses of suspension and debarment in the procurement and anti-corruption contexts.

The panelists discussed recent trends and developments in the suspension and debarment arena, both at the national and international level, and compared and contrasted a range of national suspension and debarment systems and their impact on small versus large businesses. Panelists examined the following questions, among others: How has suspension and debarment changed over the years? How are national procurement systems making use of suspension and debarment? How often is suspension and debarment being applied to individuals and small and medium enterprises, and how do their experiences differ from larger corporations? Building on themes discussed in the previous Colloquia, the Colloquium also examined suspension and debarment as it relates to the development missions of several of the multilateral development banks.

The link to the proceedings enables a person to access a video of the proceedings.