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WASHINGTON – The U.S. Department of the Treasury today announced that the United States has provided formal notice to the Republic of Belarus to confirm the suspension of the operation of paragraph 1, subparagraph (g), of Article III of the Convention between the United States of America and the Union of Soviet Socialist Republics on Matters of Taxation, with related letters, signed at Washington June 20, 1973 (the “Convention”), by mutual agreement.  The suspension is effective December 17, 2024, until December 31, 2026, or earlier if mutually determined by the two governments.

This action responds to notification by the Republic of Belarus on March 21, 2024, of its desire to suspend paragraph 1, subparagraph (g), of Article III of the Convention until December 31, 2026.

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WASHINGTON — Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is sanctioning 12 individuals and eight entities, located across seven countries, who are linked to the global illicit drug trade. Today’s action, taken pursuant to Executive Order (E.O.) 14059, underscores the United States’ commitment to combating the synthetic drug threat at home and abroad.

“Drug trafficking organizations continue to rely on a global web of producers, transporters, and sellers to bring their deadly wares to market,” said Acting Under Secretary for Terrorism and Financial Intelligence Bradley T. Smith. “The United States, leveraging our strong domestic and international partnerships, will continue to disrupt the financial networks that enable the illicit drug trade.”

Today’s sanctions are the result of strong collaboration with the Drug Enforcement Administration and a range of international law enforcement partners, including in Colombia, Lithuania, and New Zealand. This action was also enabled with support from Treasury’s Financial Crimes Enforcement Network and reporting from financial institutions under the Bank Secrecy Act, and was coordinated closely with various foreign Financial Intelligence Units.

EUROPEAN DRUG TRAFFICKERS

Lithuanian nationals Rokas Karpavicius (Karpavicius) and Virginijus Labutis (Labutis) have been involved in the trafficking of cocaine and methamphetamine, money laundering, and corruption, including bribery, and pose a significant criminal threat to Lithuania and other jurisdictions. Collectively, they have coordinated significant shipments of narcotics from Central and South America to Europe, Australia, New Zealand, the Pacific Islands, and the United States. Karpavicius has been arrested on drug-related charges in multiple jurisdictions since the 1990s and has also laundered the illicit proceeds of his drug trafficking. Labutis was recently arrested in October 2024 on an Interpol Red Notice issued for drug trafficking charges.

Labutis has frequently traveled to Colombia, Mexico, and other countries to establish connections with drug trafficking organizations. Most notably, he has worked with the Sinaloa Cartel, one of the two main Mexico-based transnational criminal organizations supplying illicit fentanyl to the United States. Drug trafficking organizations in Venezuela and Ecuador also have supplied Labutis with cocaine. 

Also included in today’s action is Lithuanian national Saulius Staskus (Staskus), who has worked with both Labutis and Karpavicius. Staskus has helped Labutis coordinate vessels in South America to transport cocaine to Europe and Australia.

Karpavicius, Labutis, and Staskus are being sanctioned pursuant to E.O. 14059 for having engaged in, or attempted to engage in, activities or transactions that have materially contributed to, or pose a significant risk of materially contributing to, the international proliferation of illicit drugs or their means of production.

DISRUPTING EUROPEAN FINANCIAL NETWORKS

Karpavicius is the majority owner of Switzerland-based holding company Karpis AG and Poland-based company Lake Forest SP Z O O (Lake Forest), which is engaged in wholesale and retail trade. Karpavicius’s partner, Lithuanian national Jurga Karpe, resides with Karpavicius in Spain, and is on the board of directors of Karpis AG. Karpis AG and Lake Forest are being sanctioned pursuant to E.O. 14059 for being owned, controlled, or directed by, or for having acted or purported to act for or on behalf of, directly or indirectly, Karpavicius. Jurga Karpe is being sanctioned pursuant to E.O. 14059 for being or having been a leader or official of Karpis AG.

Karpavicius is also the majority owner of Switzerland-based Dragon Secure GmbH (Dragon Secure). The company operates the “Kraden” encrypted messaging application, which has been used by drug traffickers. Dragon Secure is being sanctioned pursuant to E.O. 14059 for being owned, controlled, or directed by, or for having acted or purported to act for or on behalf of, directly or indirectly, Karpavicius.

Arnas Grinevicius (Grinevicius) is a Lithuanian national who is being sanctioned pursuant to E.O. 14059 for being or having been a leader or official of Dragon Secure. Grinevicius is the sole owner of Lithuania-based company MB Ptera and the director of UAB Flavour Labs, which are engaged in computer programming activities and professional, scientific, and technical activities, respectively. MB Ptera and UAB Flavour Labs are being sanctioned pursuant to E.O. 14059 for being owned, controlled, or directed by, or for having acted or purported to act for or on behalf of, directly or indirectly, Grinevicius.

Labutis is also an executive and legal representative of Atiya S A S, a Colombia-based company that is engaged in real estate-related activity, including the sale of owned or leased property. Atiya S A S is being sanctioned pursuant to E.O. 14059 for being owned, controlled, or directed by, or for having acted or purported to act for or on behalf of, directly or indirectly, Labutis.

AUSTRALIAN AND NEW ZEALAND ASSOCIATES

Drug traffickers earn significantly higher commissions on the transport of illicit drugs to Australia and New Zealand, where the increased profits offset the high costs of trafficking narcotics. Accordingly, Karpavicius, Labutis, and Staskus have worked with Australian and New Zealand nationals and have imported drug shipments into the two countries.

Australian national David Jonathan Thackray (Thackray) and New Zealand national Ho Kai Leung (Leung) are key associates of Karpavicius. Thackray was previously arrested and imprisoned in New Zealand for importing cocaine into the country. Leung was previously convicted in New Zealand for procuring and possessing methamphetamine and amphetamine. Thackray and Leung are being sanctioned pursuant to E.O. 14059 for having engaged in, or attempted to engage in, activities or transactions that have materially contributed to, or pose a significant risk of materially contributing to, the international proliferation of illicit drugs or their means of production.

Leung is also the owner of New Zealand-based entity JT Trading Limited and the director of New Zealand-based TNK Trading Limited. Both JT Trading Limited and TNK Trading Limited, which are engaged in activity tied to motor vehicles, are being sanctioned pursuant to E.O. 14059 for being owned, controlled, or directed by, or for having acted or purported to act for or on behalf of, directly or indirectly, Leung.

COLOMBIAN COCAINE TRAFFICKERS

Treasury is also sanctioning Allende Perilla Sandoval (Allende), a Colombia-based narcotics trafficker. Allende coordinates directly with the Sinaloa Cartel in Mexico and is the leader of a drug trafficking organization that controls key drug trafficking routes along the Pacific coast of Colombia and Ecuador. Allende’s organization further operates significant cocaine laboratories, which distribute cocaine to Central America and Mexico that is ultimately smuggled into the United States and Europe. 

Camilo Esteban Betancourt Rosero (Betancourt) has laundered illicit drug proceeds derived from cocaine shipments in U.S. dollars and other currencies for Allende’s organization. Once Allende receives these funds from Betancourt, he uses them to purchase firearms and to build submarines for his drug trafficking activity. Betancourt introduced Labutis to Allende for the purpose of facilitating a cocaine trafficking venture. In addition, Betancourt coordinated a drug trafficking venture from Colombia to Costa Rica. 

Finally, OFAC is taking action against Colombia’s Clan del Golfo (CDG)—formerly known as Los Urabeños and Clan Usuga—which is one of the country’s largest drug trafficking organizations. CDG, an organization designated pursuant to the Foreign Narcotics Kingpin Designation Act (“Kingpin Act”) and E.O. 14059, is engaged in cocaine trafficking, arms smuggling, and other illicit activities.

OFAC is sanctioning Orozman Orlando Osten Blanco (Osten Blanco), Elkin Casarrubia Posada (Casarrubia Posada), and Luis Perez Castaneda (Perez Castaneda). Osten Blanco and Casarrubia Posada, who are leaders within CDG, are involved in drug trafficking and responsible for overseeing various CDG-controlled areas. Perez Castaneda is the Director of Policy for CDG, which considers itself a political armed group. Osten Blanco, Casarrubia Posada, and Perez Castaneda are being designated for being owned, controlled, or directed by, or having acted or purported to act for or on behalf of, directly or indirectly, CDG.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the designated persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or 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. U.S. persons may face civil or criminal penalties for violations of E.O. 14059 and the Kingpin Act. Non-U.S. persons are also prohibited from causing or conspiring to cause U.S. persons to wittingly or unwittingly violate U.S. sanctions, as well as engaging in conduct that evades U.S. sanctions. OFAC’s Economic Sanctions Enforcement Guidelines provide more information regarding OFAC’s enforcement of U.S. sanctions, including the factors that OFAC generally considers when determining an appropriate response to an apparent violation.

The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the SDN List, but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC’s Frequently Asked Question 897 here. For detailed information on the process to submit a request for removal from an OFAC sanctions list, please click here 

For a graphic on today’s sanctions, click here.

For more information on the individuals and entities designated today, click here.

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Action taken in partnership with the United Arab Emirates targets a key node in the Kim regime’s illicit revenue generation schemes

WASHINGTON — Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) is sanctioning two individuals and one entity involved in a network that launders millions of dollars of illicit funds generated by the Democratic People’s Republic of Korea (DPRK) information technology (IT) workers and cybercrime to support the DPRK Government. Based in the United Arab Emirates (UAE), Lu Huaying and Zhang Jian worked through a UAE-based front company to facilitate money laundering and cryptocurrency conversion services that funneled the illicit proceeds back to Pyongyang. This network is led by OFAC-sanctioned Sim Hyon Sop (Sim), a PRC-based banking representative for the DPRK who orchestrates money laundering schemes to fund the regime.

Today’s sanctions are a part of ongoing efforts to disrupt the DPRK’s money laundering operations, which finance the regime’s unlawful weapons of mass destruction (WMD) and ballistic missile programs. These sanctions are part of a close cooperative effort with the UAE government.

“As the DPRK continues to use complex criminal schemes to fund its WMD and ballistic missile programs—including through the exploitation of digital assets—Treasury remains focused on disrupting the networks that facilitate this flow of funds to the regime,” said Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence Bradley T. Smith. “The United States, along with the UAE and our other partners, will continue to target the financial networks that enable the Kim regime’s destabilizing activities.”

DPRK Laundering DIGITAL ASSETS TO FUND REGIME’S ACTIVITIES

The DPRK continues to use agents and proxies to access the international financial system to conduct illicit financial activities, including fraudulent IT work, digital assets heists, and money laundering, in support of its unlawful WMD and ballistic missile programs. These illicit activities contribute to the DPRK’s destabilization efforts, which now extend into the European theater as Pyongyang increases military cooperation with Russia.

Sim Hyon Sop, a PRC-based representative of DPRK’s Korea Kwangson Banking Corp (KKBC), is one such DPRK agent. According to the Financial Crimes Enforcement Network, representatives like Kim operate as agents for DPRK financial institutions. In this capacity, these representatives orchestrate schemes, set up shell companies, and manage bank accounts to move and disguise illicit funds that can then be used to finance the DPRK’s WMD and ballistic missile programs. OFAC previously designated both Sim Hyon Sop and KKBC pursuant to Executive Order (E.O.) 13382, an authority that targets proliferators of WMD and their supporters. KKBC is a DPRK state-run organization and designated entity on the United Nations Security Council 1718 (DPRK) Sanctions List. From his safe haven in the PRC, Sim Hyon Sop orchestrates vast money laundering schemes, often involving digital assets, to funnel money back to the DPRK for use in its WMD and ballistic missile programs.

Since at least early 2022, UAE-based PRC national Lu Huaying has cashed out cryptocurrency derived from obfuscated DPRK revenue-generation projects into fiat cash on behalf of OFAC-sanctioned Sim Hyon Sop. Between early 2022 and approximately September 2023, Lu Huaying has laundered several million dollars of Sim Hyon Sop’s money through a combination of cryptocurrency cash-outs and money mules. The laundered funds were then used as payment for purchases of products and services assessed to be destined for use by the DPRK or its proxies.

In late 2022 and early 2023, UAE-based PRC national Zhang Jian (Zhang) has also helped facilitate the exchange of fiat currency for Sim. Additionally, Zhang himself has purportedly acted as a courier for Sim Hyon Sop.

OFAC is designating Lu Huaying and Zhang Jian for being owned or controlled by or having acted or purported to act for or on behalf of, directly or indirectly, Sim Hyon Sop, an individual whose property and interests in property are blocked pursuant to E.O. 13382.

Green Alpine Trading, LLC is a UAE-based front company that has served as a key component of this money-laundering network. OFAC is designating Green Alpine Trading, LLC for having provided, or attempted to provide, financial, material, technological or other support for, or goods or services in support of, Sim Hyon Sop, an individual whose property and interests in property are blocked pursuant to E.O. 13382.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the designated persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or 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, financial institutions and other persons that engage in certain transactions or activities with the sanctioned entities and individuals may expose themselves to sanctions or be subject to an enforcement action. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any designated person, or the receipt of any contribution or provision of funds, goods, or services from any such person. 

Non-U.S. persons are also prohibited from causing or conspiring to cause U.S. persons to wittingly or unwittingly violate U.S. sanctions, as well as engaging in conduct that evades U.S. sanctions. OFAC’s Economic Sanctions Enforcement Guidelines provide more information regarding OFAC’s enforcement of U.S. sanctions, including the factors that OFAC generally considers when determining an appropriate response to an apparent violation.

The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the SDN List, but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC’s Frequently Asked Question 897 here. For detailed information on the process to submit a request for removal from an OFAC sanctions list, please click here 

Click here for more information on the individuals and entity designated today.

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JOHANNESBURG – The United States and the People’s Republic of China held the seventh meeting of the Economic Working Group in Johannesburg on the sidelines of the G20 Deputies Meeting on December 12, co-led by Jay Shambaugh, Under Secretary for International Affairs at the U.S. Treasury, and Liao Min, Vice Minister of Finance at China’s Ministry of Finance.

The two sides discussed macroeconomic developments in each country including the impact of China’s recently announced stimulus policy package. The two sides also shared views on areas of cooperation, including debt issues and how to support low-income countries facing liquidity challenges. The U.S. side expressed its continued concern with China’s nonmarket practices and industrial overcapacity and their impact on U.S. workers and firms. The United States also raised other issues of concern including the support of some Chinese firms to Russia’s defense industrial base.

The EWG provides a mechanism for communication between the world’s two largest economies and has served to stabilize the relationship by mitigating the risk of miscommunication or unintended escalation.

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NANJING – The United States and the People’s Republic of China held the seventh meeting of the Financial Working Group (FWG) in Nanjing on December 15-16. The meeting was co-led by Brent Neiman, U.S. Assistant Secretary for International Finance at U.S. Treasury, and Xuan Changneng, Deputy Governor of the People’s Bank of China.

The meeting started with the co-leads receiving readouts on recent technical exercises, including a discussion on potential discrepancies in international macroeconomic data. The FWG moved on to discussions of topics including China’s recent stimulus measures, cross-border data regulations, issues related to the International Monetary Fund, cross-border payments, and swap arrangement practices. The Joint Treasury-People’s Bank of China Cooperation and Exchange on Anti-Money Laundering (AML) also met in-person for the fourth time and discussed topics related to illicit finance. Treasury raised several issues of concern.

Building on a recent FWG technical exercise, Treasury’s Federal Insurance Office and China’s National Financial Regulatory Agency signed a memorandum of understanding (MOU) related to information-sharing and other areas of mutual interest in the insurance sector. The new MOU updates existing arrangements to reflect changes in China’s regulatory structure.

The FWG is a channel to help responsibly manage the U.S.-China bilateral relationship and strengthen efforts to preserve domestic and global financial stability.

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WASHINGTON — The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today sanctioned nine individuals and seven entities that have provided financial and military support to the Democratic People’s Republic of Korea (DPRK).  Also, today, the U.S. Department of State sanctioned three targets related to the DPRK’s ballistic missile program.  These actions reflect the DPRK’s escalating provocation and hostile military posturing that exacerbate global tensions and destabilize regional peace and security.

On October 31, 2024, the DPRK conducted an intercontinental ballistic missile (ICBM) test, the first since December 2023. Again, on November 5, 2024, the DPRK fired at least seven short-range ballistic missiles off the eastern coast of the peninsula.  Revenues generated through foreign-based workers and state-owned entities fuel these launches and further development of the DPRK’s WMD and ballistic missile programs.

The DPRK has also supplied Russia with critical military support for its war on Ukraine.  Since October, it has supplied Russia with more than 11,000 troops—which are now training for deployment against Ukraine—and sent significant quantities of missiles and ammunition to the Russian military to replenish its dwindling stockpiles.  

“The Kim regime’s continued provocative actions—including its most recent ICBM test and its deepening military support to Russia—undermine the stability of the region and sustain Putin’s continued aggression in Ukraine,” said Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence Bradley T. Smith. “The United States remains committed to disrupting the illicit procurement and facilitation networks that enable these destabilizing activities.”

FINANCIAL FACILITATORS

Golden Triangle Bank (GTB) is one of the largest financial institutions in the DPRK’s Rason Special Economic Zone. As a state-owned company of the DPRK government, the GTB is used by foreigners to exchange foreign currency into local currency for use within the DPRK. GTB is being designated pursuant to Executive Order (E.O.) 13810 for operating in the financial services industry in North Korea.

Korea Mandal Credit Bank (KMCB) is a financial institution headquartered in Pyongyang, DPRK which maintains a network of representatives who operate throughout China. KMCB has facilitated the procurement of supplies for entities that support the DPRK’s WMD program, including the U.S.-designated Munitions Industry Department (MID). MID was designated in August 2010, pursuant to E.O. 13382 for its support to DPRK’s WMD programs. KMCB is being designated pursuant to E.O. 13810 for operating in the financial services industry in North Korea. 

Choe Chol Ryong (Choe) is a representative of the U.S.-designated Korea Kwangson Banking Corporation (KKBC) in Dandong, China. In that capacity, Choe has been involved in bulk cash smuggling between China and the DPRK. KKBC was previously designated in August 2009, pursuant to E.O. 13382 for providing financial services in support of multiple organizations that were identified as WMD proliferators. KKBC is also on the United Nations Security Council resolution (UNSCR) 1718 Sanctions List. Choe is being designated pursuant to E.O. 13382 for being owned or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly, the KKBC. 

Kim Myong Jin (Kim) is a representative of the U.S.-designated Korea Daesong Bank (KDB) in Beijing, China. Kim serves as a primary financial representative for the DPRK and plays a key role in facilitating Pyongyang’s illicit financial activities outside of the DPRK. OFAC designated KDB in 2010, pursuant to E.O. 13551 for being owned or controlled by Office 39. Since 2019, Kim has coordinated deposits worth several hundred thousands of U.S. dollars from China to the DPRK. OFAC is designating Kim pursuant to E.O. 13551 for acting or purported to act for or on behalf of, directly or indirectly, Korea Daesong Bank, a person whose property and interests in property are blocked pursuant to E.O. 13551.

MILITARY SUPPORT

Ri Chang Ho (Ri) is the head of the DPRK Reconnaissance General Bureau (RGB), and one of the DPRK generals known to be accompanying the thousands of DPRK troops deployed to Russia in support of Russia’s war in Ukraine. As the head of the RGB, Ri has conducted revenue generating activities and securing funds in support of the DPRK’s WMD activities. In January 2015, OFAC designated the RGB pursuant to E.O. 13687 for being a controlled entity of the Government of North Korea; RGB was previously listed in the annex to E.O. 13551 in August 2010. Ri is being designated pursuant to E.O. 13687 for being an official of the Government of North Korea. 

Ju Chang Il (Ju) is the director of the DPRK Workers’ Party of Korea’s (WPK) Propaganda and Agitation Department (PAD). The PAD engages in or is responsible for censorship by the Government of North Korea and is also the primary agency responsible for both newspaper and broadcast censorship. In March 2016, OFAC added the PAD to the Specially Designated Nationals and Blocked Persons (SDN) List pursuant to E.O. 13722 for being an agency, instrumentality, or controlled entity of the Government of North Korea. Ju is being designated pursuant to E.O. 13687 for being an official of the WPK. 

Kim Yong Bok is a senior general of the OFAC-designated Korean People’s Army. He is one of the DPRK generals known to be accompanying DPRK troops deployed to Russia. Kim Yong Bok is being designated pursuant to E.O. 13687 for being an official of the Government of North Korea.

Pak Jong Chon (Pak) is a DPRK-based Vice-Chair of the WPK Central Military Commission.  In his role, he takes part in public events that are involved in the DPRK’s ballistic missile program, including weapons factory tour, submarine launch, and an official visit to Russia. Pak is being designated pursuant to E.O. 13687 for being an official of the WPK.

Im Song Jin (Im) is a professor of physics at Kim Il Sung University. Im is being designated pursuant to E.O. 13810 for being a North Korean person, including a North Korean person that has engaged in commercial activity that generates revenue for the Government of North Korea or the WPK.

Kim Geum Cheol is the president of Kim Il Sung Military University, the DPRK’s premier institution of military education. Kim Geum Cheol is being designated pursuant to E.O. 13687 for being an official of the Government of North Korea.

Ro Kwang Chol (Ro) is the current DPRK Minister of National Defense, having assumed the position in October 2024. Ro is being designated pursuant to E.O. 13687 for being an official of the WPK.

RUSSIAN COMPANIES SHIPPING PETROLEUM TO DPRK

Vostok Trading LLC (Vostok), DV Ink LLC (DV Ink), and Novosibirskoblgaz LLC are Russia-based foreign trade companies that have shipped thousands of tons of oil and gas to the DPRK beginning in 2022 and continuing through at least April 2024.  Vostok, DV Ink, and Novosibirskoblgaz LLC are being designated pursuant to E.O. 13810 for engaging in at least one significant importation from or exportation to North Korea of any goods, services, or technology.  Additionally, Vostok, DV Ink, and Novosibirskoblgaz LLC are being designated pursuant to E.O. 14024 for operating or having operated in the transportation sector of the Russian Federation economy. 

Sibregiongaz, AO is the Russia-based parent company and 100% owner of Novosibirskoblgaz LLC. Sibregiongaz, AO is being designated pursuant to E.O. 14024 for operating or having operated in the transportation sector of the Russian Federation economy. 

Okryu Trading Company (Okryu) is a DPRK-based foreign trade company that has received thousands of tons of oil shipments from Russia. Okryu is being designated pursuant to E.O. 13810 for operating in the transportation industry in North Korea.

These actions were also undertaken in the spirit of the North Korea Sanctions and Policy Enhancement Act of 2016, including as amended by the Otto Warmbier North Korea Nuclear Sanctions and Enforcement Act of 2019 within the FY 2020 National Defense Authorization Act  (P.L. 116-92). 

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the designated persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or 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. 

Financial institutions and other persons that engage in certain transactions or activities with the sanctioned entities and individuals may expose themselves to sanctions or be subject to an enforcement action. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any designated person, or the receipt of any contribution or provision of funds, goods, or services from any such person. In addition, foreign financial institutions that conduct or facilitate significant transactions or provide any service involving Russia’s military-industrial base run the risk of being sanctioned by OFAC. For additional guidance, please see the updated OFAC advisory, “Updated Guidance for Foreign Financial Institutions on OFAC Sanctions Authorities Targeting Support to Russia’s Military-Industrial Base,” as well as OFAC Frequently Asked Questions (FAQs) 1146-1157.

Non-U.S. persons are also prohibited from causing or conspiring to cause U.S. persons to violate U.S. sanctions, wittingly or unwittingly, as well as engage in conduct that evades U.S. sanctions. OFAC’s Economic Sanctions Enforcement Guidelines provide more information regarding OFAC’s enforcement of U.S. sanctions, including the factors that OFAC generally considers when determining an appropriate response to an apparent violation.

The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the SDN List, but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC’s Frequently Asked Question 897 here. For detailed information on the process to submit a request for removal from an OFAC sanctions list, please click here Click here for more information on the individuals and entities designated today.
 

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WASHINGTON – Today, during the Native Community Development Financial Institution (CDFI) Network’s 5th Annual Policy and Capacity Building Summit, the U.S. Department of the Treasury (Treasury) announced an additional $8.6 million in State Small Business Credit Initiative (SSBCI) Capital and Technical Assistance (TA) approvals for Tribal governments. Treasury’s SSBCI Capital Program includes over $500 million in allocations to support Tribal small business financing programs and is the largest federal investment in Indian Country small businesses in history. Additionally, the SSBCI TA Grant Program supports programs that provide legal, accounting, and financial advisory services to qualifying small businesses.  

The approvals involve an additional $7.4 million in Capital Program allocations to 11 Tribal governments, including the Penobscot consortium, which represents five Tribal governments. The Penobscot consortium, approved for up to $3.2 million, will operate a one loan participation program targeted at businesses in the hospitality and social services sectors, including funding start-up businesses with 10 or fewer employees. The group of five Tribal governments expects the program to support entrepreneurism, generate good-paying jobs, and increase tourism by financing small businesses in hospitality. Additionally, these approvals include TA Grant Program awards totaling $1.2 million. With these announcements, Treasury has now approved Capital Program applications for over $530 million in allocations and corresponding to 246 Tribal governments, as well as $5.3 million in TA Grant Program awards to 20 Tribal governments. 

In addition to the SSBCI approvals, during the Summit, Treasury also announced the publication of a policy brief on “Financial Products and Services for Native Communities: Landscape and Policy Recommendations.” This policy brief arises out of the roundtable hosted by Treasury on Native communities’ access to financial services and the role of financial institutions in providing these services. The policy brief provides four recommendations, including sustaining and increasing investments in federal programs that support Tribal access to capital; pursuing relevant recommendations included in the Treasury’s National Financial Inclusion Strategy, expanding responsible financial services on Native lands, and increasing technical assistance to Native-owned small businesses. 

These announcements are part of Treasury’s continuing support for Tribal economic development which has included the creation of Treasury’s first Office of Tribal and Native Affairs, $30 billion in economic development funding for Tribal governments, and advancing proposed tax guidance for long-standing Tribal tax questions to provide clarity and certainty to Tribal Nations and businesses.  

Read the full list of Tribes supported by the SSBCI Capital Program and SSBCI TA Grant Program. 

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