ACI’s highly anticipated Proficiency Series provides true immersion in U.S. Economic Sanctions with the objective of becoming proficient in four weeks.

Week 1

MODULE 1

Wednesday, February 2, 2022 • 1:30-4:30pm EST

Your U.S. Sanctions Roadmap- A Review of Key Concepts, Agencies, Their Jurisdictions and Roles – and Who to Contact for What

During this practical opening session, the expert instructors will take you through the key agencies involved in U.S. sanctions implementation and enforcement and discuss the evolving framework of U.S. Secondary Sanctions and Human Rights-related actions including:

  • Basics of sanctions law: e.g., TWEA, IEEPA, Executive Orders, and Designations
  • Introduction to OFAC, BIS, DOJ, State Department, Congress and how they work together
  • U.S. Sanctions Jurisdiction: Extra-Territoriality
  • What are Primary, Sectoral, and Secondary Sanctions?
  • Introduction to OFAC’s 50% Rule
  • Key Licenses and Exemptions
  • Sources of Guidance: Alerts, FAQs, and Enforcement Actions
  • Intersection of Economic Sanctions, Export Controls and ore National Security Areas

Secondary Sanctions

  • Scope: Menu-based versus Designations
  • Application in Practice
  • Financial Institution Considerations

Human Rights and Supply Chain Considerations

  • Sanctions in Context: Import Controls, Export Controls, and Sanctions to Target Human Rights Violations and Abuses
  • Human Rights-related Sanctions: e.g., Global Magnitsky, Burma, Belarus, Xinjiang, and Hong Kong

Rachel Alpert

Partner

Jenner & Block LLP

Annie Simpson Froehlich

Special Counsel

Cooley LLP

MODULE 2

Friday, February 4 2022 • 1:30-4:30pm EST

The Essentials of an Effective Sanctions Compliance Program

Management Commitment

  • Creating culture of compliance
  • Ensuring sufficient resources, authority, and autonomy
  • Determining what is a potential violation
  • How to resolve an apparent violation

Risk Assessment

  • How to perform a holistic risk-based assessment
  • Documenting the review
  • What are the key risk metrics?

Internal Controls

  • Need for written policies and procedures
  • How often to perform the review?
  • What type of documentation is required?
  • Recordkeeping policy
  • Review of common weakness areas

Testing and Auditing

  • Need for independent testing
  • Key audit procedures to follow
  • Frequency of testing
  • Identification of root causes
  • Working with internal audit
  • How to fix internal weaknesses

Training

  • Periodic scheduled training
  • Different levels for different employee types
  • Should the training be live, or computer based?
  • Modifying for different geographies or languages
  • Who should develop the training?
  • Documenting the training process

Core Elements of Sanctions Screening

  • Need to review customers and transactions
  • ]What lists to screen against?
  • How to screen for different geographies
  • Rules and exceptions
  • What is (and isn’t) a “hit”
  • How to clear a hit
  • Common screening mistakes to avoid
  • Hypothetical scenarios to test your screening knowledge

Margaret Mousoudakis

Assistant Comliance Officer

LyondellBasell

Cristina Brayton-Lewis

Partner

White & Case LLP

Week 2

MODULE 3

Wednesday, February 9, 2022 • 1:30-4:30pm EST

A Deep Dive into Russia and Iran Sanctions

The 50% Rule

  • How OFAC’s blocking requirements apply in the real world
  • Hypothetical exercises: practical application of the 50% Rule to various scenarios
  • What to do when sanctioned persons control, but do not own a business partner
  • The challenge posed by sanctioned government ownership stakes in companies
  • Due diligence expectations and screening system issues

Russia Sanctions

  • Why and how did these sanctions come into force?
  • Crimea embargo:
    • Scope of the OFAC and EAR embargo on Crimea
    • Common compliance challenges: Unique nature of a subnational embargo
    • Diversion risks: Due diligence expectations and strategies for identifying potential diversion
    • Frequently used general licenses
  • Sectoral sanctions:
    • Directives 1-3: Financial restrictions
    • Directive 4: Frontier energy (& the 33% rule)
    • Overlapping export control sectoral sanctions restrictions
  • Blocking authorities: Crimea, government, metals, energy, corruption, human rights abuses, cyber, election interference, defense, and others
  • Secondary sanctions:
    • CAATSA 226 & 228 “significant” transactions
    • Energy: Nord Stream 2 & others
    • Military/Defense
    • What about “material assistance”?
  • CBW Act sanctions
    • Export control restrictions on Russia: Dual use EAR and military ITAR controls
      • Licensing policies
      • 22 C.F.R. 126.1 implications
      • The space industry
  • Ransomware & cryptocurrency
  • Enforcement actions

Iran

  • Evolution of the U.S. embargo and impact of JCPOA withdrawal
  • Part 560: How the embargo works today
  • Other, overlapping sanctions: IRGC, SDGT, NPWMD, etc.
  • Frequently used general licenses and their practical limitations
  • Broad array of secondary sanctions authorities
  • Section 13(r) of the Exchange Act: SEC reporting requirements for public companies

Robert Slack

Partner

Kelley Drye & Warren LLP

Rachelle Sorg

Associate General Counsel AML & Sanctions

Interactive Brokers LLC

MODULE 4

Friday, February 11, 2022 • 1:30-4:30pm EST

A Comprehensive Discussion of the New China Blocking Statute and Recent OFAC Guidance

Background on U.S. Sanctions on China

  • 2005 Section 311 designation of Banco Delta Asia
  • DPRK and Iran-related designations of Chinese entities
  • Use of Entity List
    • Huawei and most non-U.S.-affiliates
  • Xinjiang and human rights-related designations
  • CMIC sanctions
    • Biden v. Trump regimes
    • Limitations on scope
    • CMIC-listed entities only
    • U.S. facilitation of foreign investments

Chinese Blocking Statute (passed January 2021)

  • Precedent in the EU
    • Enforcement and effectiveness of the EU blocking statute
  • Content of China blocking statute
    • Reporting requirement on Chinese companies
    • Prohibition on compliance with “foreign law”
    • Private right of action
    • Identification of “extraterritorial” laws
  • Current status
    • Pending identification of “extraterritorial” laws
    • Potential for aggressive enforcement compared with the EU

Chinese Retaliation

  • China’s Anti-Foreign Sanctions Law (passed June 2021)
    • Risk retaliatory measures for compliance with foreign sanctions in China
    • Exposure to countersanctions by Beijing against persons or entities instigating or implementing sanctions
    • Retaliation for U.S. and EU sanctions over Xinjiang and Hong Kong
  • China’s Unreliable Entity List
  • Chinese consumer backlash

Chinese Data Security (passed June 2021)

  • New data security law, effective September 1, requires all companies in China to classify data
  • New rules regarding “critical information infrastructure”
  • Ambiguous classification and handling requirements
  • How will these new rules be enforced?

David Mortlock

Partner

Wilkie Farr & Gallagher LLP

Donna Brown

Director Ethics & Compliance

Qurate Retail Group

Week 3

MODULE 5

Wednesday, February 16, 2022 • 1:30-4:30pm EST

Deciphering More Country-Specific Sanctions Restrictions: Cuba, Venezuela, Syria, North Korea, Afghanistan, Belarus

Cuba

  • Different statutory authority — TWEA instead of IEEPA
  • Crucial difference in scope: Cuba regulations are binding on “persons subject to U.S. jurisdiction” which includes foreign subsidiaries owned or controlled by US persons
    • Other OFAC programs bind only “U.S. persons” unless extra steps are taken to make them binding on foreign subsidiaries (e.g., in Iran program)
  • Differences in exemptions (no travel exemption under TWEA) and civil penalties (TWEA’s statutory maximum penalties are lower)
  • Broad prohibitions — all property in which Cuba or any Cuban national has an interest is blocked
  • General licenses allowing dealings with Cuban nationals permanently residing outside of Cuba

Venezuela

  • Among the more complicated OFAC sanctions programs
    • Not a full embargo, but the Government of Venezuela (GoV) and state-owned entities including PdVSA are blocked
    • Various other sanctions apply to Venezuelan bonds, new debt (similar to sectoral sanctions on Russia), purchases of securities from the GoV, pledges of collateral by the GoV, and transfers of equity interests owned by the GoV
    • Blocking sanctions have been imposed on persons operating in certain sectors
  • Wide range of general licenses, including broad authorizations for CITGO-related transactions
  • Dealings in many PdVSA and GoV bonds are authorized by general licenses
  • Bondholder issues related to large CITGO stake previously pledged as collateral for certain PdVSA bonds

Syria

  • Government of Syria and state-owned entities are blocked
  • Which investments in and exports to Syria are generally prohibited by OFAC or BIS?
  • Prohibited imports of petroleum products from Syria

North Korea

  • Government of North Korea and state-owned entities are blocked
  • Foreign subsidiaries of US financial institutions are prohibited from transacting with the Government of North Korea or certain North Korean SDNs: How does this play out in practice?
  • Investment in, exports to, and imports from North Korea are prohibited
  • Significant secondary sanctions authorities to block property of those who are found to have engaged in certain sanctionable activities (including some broadly defined activities)

Afghanistan

  • With the Taliban in control of the government, what is required for a sanctions program? (government is blocked because the Taliban are on the SDN list, but the country is not subject to a broad trade and investment embargo)
  • General licenses authorizing certain humanitarian activity by NGOs and international organizations
  • The scope of limits on fund transfers to the Taliban and the Haqqani Network, even in relation to authorized humanitarian activity

Belarus

  • Increasing use of targeted SDN designations and coordination with the UK and EU
  • Increased use of sanctions to respond to human rights violations
  • Major companies (e.g., Belneftekhim, Belaruskali) that are designated as SDNs; 50% rule brings more entities in scope
  • Risk of SDN designation for entities operating in other sectors of the Belarusian economy

David Stetson

Partner

Steptoe & Johnson LLP

Darshak Dholakia

Partner

Dechert LLP

MODULE 6

Friday, February 18, 2022 • 1:30-4:30pm EST

Compliance Weaknesses and Penalties Under the Microscope: Lessons from Key and Recent Enforcement Actions

How Sanctions Enforcements and Disclosures Arise

  • Internal investigations and notices from other parties
  • Considerations for whether to make a voluntary self-disclosure
  • Preparing a voluntary self-disclosure
  • Preparing a directed disclosure, responding to OFAC requests for information, and responding to subpoenas
  • Ongoing violations

Potential Enforcement Outcomes

  • Penalties, settlements, no action letters, cautionary letters, closeout letters
  • Public v. private dispositions
  • Sanctions enforcements as punishment as well as policy
  • OFAC’s enforcement guidelines and penalty calculations
  • Civil versus criminal enforcement / liability

Recent Key Enforcements and Lessons Learned

  • Voluntary foreign subsidiaries continuing Iran-related activities after being acquired by U.S. companies
  • Minor U.S. touch points creating US sanctions jurisdiction
  • USD and non-USD transactions that clear through the United States
  • U.S. facilitation and back-office support
  • Insufficient counterparty screening, due diligence, and/or compliance procedures
  • Geofencing and IP restrictions
  • Parent liability and successor liability

Hypothetical Exercises, Q & A and Review on the Do’s and Don’ts

Toward solidifying your understanding of the enforcement process, the instructors will take you through a series of hypothetical scenarios to help you apply and take advantage of voluntary disclosure best practices. at the end of this module, instructors will provide additional clarification and guidance, and take your questions.

Nabeel Yousef

Partner

Freshfields Bruckhaus Deringer LLP

Maeva Donlin

Senior Manager, Sanctions Compliance, VP

Bank of the West

Week 4

MODULE 7

Wednesday, February 23, 2022 • 1:30-4:30pm EST

How to Submit an Application to the OFAC Licensing Division: Practical Guidance for Preparing Your Submissions

How to Submit a Specific License Application for Transactional Requests

  • The information necessary for OFAC to consider the application “complete”
  • Differences and similarities between a specific license application and a request for interpretive guidance on general licenses
  • The role of an OFAC Statement of Licensing Policy or FAQs in a license application
  • The interagency process – the roles of the State Department and/or Commerce Department in certain types of applications

How to Submit a License Application for the Release of Blocked Funds

  • How does this type of license application differ from a Transactional Request?
  • Types of information required for OFAC to process the application
  • What is the process for these types of applications?

Other Types of OFAC Licensing Communications

  • General License Guidance Letters – what do these do? • Denial Letters – what happens if your license application is denied

How to Contact OFAC

  • Understanding the timing of getting an OFAC response
  • The difference between a formal OFAC determination and the OFAC Compliance hotline

Jeanette Miller

U.S. Head of Sanctions Risk

HSBC Bank USA

Former Deputy Assistant Director for Licensing, OFAC

Erich Ferrari

Founder

Ferrari & Associates

MODULE 8

Friday, February 25, 2022 • 1:30-4:30pm EST

Review of Proficiency Assignment and 1:1 Q & A

Review of Proficiency Assignment
In advance of this last unit, participants will complete an assignment on various sanctions scenarios. The questions will be based on real-world case studies. During this last session, participants will share their responses to the assignment questions, followed by in-depth feedback from the expert instructors.

Award of “Passport to Proficiency”
Participants who have completed all Units will receive a certificate reflecting their proficiency in the essentials of the U.S. Economic Sanctions.

Robert Slack

Partner

Kelley Drye & Warren LLP

Cristina Brayton-Lewis

Partner

White & Case LLP