OFAC Warns Financial and International Trade Sectors on Evasion of Crimean Sanctions

On Dec. 19, 2014, President Obama issued Executive Order 13685, "Blocking Property of Certain Persons and Prohibiting Certain Transactions With Respect to the Crimea Region of Ukraine," to impose sanctions relating to the Russian occupation of the Crimean region of Ukraine (“Crimea”). E.O. 13685 prohibits most direct and indirect transactions (including financial, trade and other commercial transactions) by U.S. persons or within the United States to or from Crimea unless authorized by the U.S. Department of Treasury Office of Foreign Assets Control (OFAC) or exempted by statute. On July 30, 2015, OFAC issued an Advisory, entitled “Obfuscation of Critical Information in Financial and Trade Transactions Involving the Crimea Region of Ukraine,” to call attention to practices that have been used to circumvent or evade the Crimean sanctions. While billed as an “Advisory,” the agency’s release stands as a warning to the financial services and international trade sectors of their obligation to implement adequate controls to guard against such evasive practices and ensure compliance with their obligations under the Crimean sanctions.

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