OFAC has issued an Advisory on the circumvention of US sanctions against Crimea pursuant to Executive Order 13685, which prohibit all transactions and trade with the region involving a US person or the United States. The intention of the Advisory is to highlight some of the practices that have been used to circumvent the US sanctions regime and to assist US persons in implementing controls to ensure compliance.

The evasive practices identified by OFAC typically involve the omission or obfuscation of references to Crimea in documentation underlying transactions involving US persons or the United States. In the context of financial transactions, OFAC has become aware of people and entities repeatedly omitting the originator or beneficiary address information from SWIFT messages involving persons ordinarily resident or located in Crimea. Where international trade is concerned, Crimean counterparties on financial and trade documents have been listed as being located in Russia rather than in Ukraine.

OFAC advises caution when processing payments lacking complete address information when such transactions involve persons that have previously omitted this information in respect of Crimean people and entities, and warns that when dealing with third-country companies they may be unaware of US sanctions on Crimea or intentionally exploit confusion over the situation to sell US products to Crimean persons. The Advisory goes on to recommend that compliance programs monitor for search terms corresponding to major geographic locations within Crimea, and not only references to “Crimea”, that additional information is requested from parties that have previously violated or attempted to violate US sanctions, and that US sanctions obligations are clearly communicated to international partners. OFAC adds that these are only examples, and that parties should always tailor specific compliance measures to their own risk profile.

This entry was posted in Russia, Ukraine, USA by Michael O'Kane. Bookmark the permalink.

About Michael O'Kane

Michael O’Kane is a partner and Head of the Business Crime team at leading UK firm Peters & Peters. Described as ‘first-rate’ (Legal 500 2012), he “draws glowing praise from commentators” (Chambers 2013) for handling the international aspects of business crime, including sanctions, extradition and mutual legal assistance. Called to the Bar in 1992 and prior to joining Peters & Peters he was a senior specialist prosecutor at the Crown Prosecution Service Headquarters(CPS). At CPS HQ he was a key member of a small specialist unit responsible for the prosecution of serious and high profile fraud, terrorist and special interest criminal matters including the Stansted Airport Afghan hijacking and the prosecution of Paul Burrell (Princess Diana’s butler). Michael joined Peters & Peters in 2002. He became a partner in May 2004, and Head of the Business Crime team in May 2009. Since joining Peters & Peters, Michael has dealt with a wide range of business crime matters. He has particular expertise in international sanctions, criminal cartels, extradition, corruption, mutual legal assistance, and FSA investigations. Described as“ an influential practitioner in fraud and regulatory work, so much so that he is top of the referral lists of many City firms for independent advice for directors” (The Lawyer’s Hot 100 2009), he was recognised as one of the UK’s most innovative lawyers in the 2011 FT Innovative Lawyer Awards and included in the list of the UK's leading lawyers in 'The International Who's Who of Asset Recovery 2012. In 2012 he was the winner of the Global Competition Review Article of the Year. Michael regularly appears on television and radio to discuss his specialist areas and he is the author of the leading textbook on the UK Criminal Cartel Offence “The Law of Criminal Cartels-Practice and Procedure” (Oxford University Press 2009). Recent/Current Sanctions Work • Representing 109 individuals and 12 companies subject to designation by the European Council under targeted measures imposed against Zimbabwe. This is the largest and most complex collective challenge to a sanctions listing ever brought before the European Court. • Acting for a former Egyptian Minister and his UK resident wife, challenging their designation by the European Council of Ministers under targeted measures brought against former members of the Egyptian Government. • Advising a company accused in a UN investigation report to have breached UN sanctions imposed in relation to Somalia. • Advising a UK company in relation to ongoing commercial relationships with an Iranian company listed under both EU and UN sanctions. • Advising an individual in relation to a UK investigation for alleging breaching nuclear export controls.

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