Russia
Russia Airlines – Temporary Denial Orders (DOC/BIS Action)
On November 15, BIS renewed a previously issued TDO against Rossiya Airlines, citing the airline’s continued operation in violation of the May 20, 2022 TDO and the EAR. In particular, according to BIS, the airline operates multiple aircraft into Russia in violation of the EAR, including flights from Antalya and Istanbul, Turkey. The renewal of the TDO means that Rossiya continues to be banned from participating in transactions subject to the EAR, including exports from the United States and re-exports abroad.
Cryptocurrency
OFAC Settles with Virtual Currency Exchange Kraken for $362,158.70 for Apparent Violations of the Iranian Transactions and Sanctions Regulations (OFAC Action)
Those involved. Payward, Inc. (Kraken), a virtual currency exchange based in Delaware.
Charges with penalties. 826 violations of the Iranian Transactions and Sanctions Regulations. Kraken agreed to pay over $362,000 in penalties. The maximum applicable civil penalty was over $270,000,000.
What happened? Kraken, the second-largest U.S. cryptocurrency exchange by volume, agreed to pay over $362,000 in penalties after voluntarily disclosing to the OFAC that it had processed 826 transactions amounting to roughly $1,680,000 for individuals located in Iran. The penalty is the conclusion of an OFAC investigation which the New York Times reported began in 2019. While Kraken vetted customer locations at the time of account sign up, the company failed to conduct another location check at the time of sign-in. OFAC stated, “the settlement amount reflects [the agency’s] determination that Kraken’s apparent violations were non-egregious and voluntarily self-disclosed.” OFAC credited Kraken for its voluntary disclosure, a prior clean record, a new “dedicated head of sanctions,” and for investing $100,000 into a number of remedial measures, including compliance training for staff and geolocation blocking.
Read the enforcement notice here.
Notably. This action is just the latest in a series of settlements among companies in the cryptocurrency industry. Last month, Bittrex agreed to the largest monetary settlement by a crypto company to date when it agreed to pay over $24 million for sanctions violations. Earlier in the year, OFAC sanctioned Tornado Cash. As the FTX fallout deepens and public perception of the industry darkens, virtual currency companies should ensure they have implemented the proper compliance infrastructure to ensure they do not violate sanctions.
Enforcement Policy Updates
There were no new enforcement policy updates in November.
Please contact the authors if you have any questions about these enforcement updates and how they may impact your business.
5 International Trade Enforcement Roundup |
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