Treasury Targets Corruption Networks Linked to Transnational Organized Crime

Global Magnitsky Designations Target Nexus Between Public Corruption and Organized Crime

WASHINGTON — Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is targeting 16 individuals and 24 entities across several countries in Europe and the Western Hemisphere. Today’s actions are taken pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act, and targets perpetrators of corruption and serious human rights abuse.

“Transnational organized crime and corruption often go hand in hand with massively destabilizing effects on rule of law and democratic governance,” said Director of the Office of Foreign Assets Control Andrea M. Gacki. “Treasury will continue to aggressively dismantle links between transnational criminal organizations and corrupt activity, especially by those in office who hold the public’s trust.”

These designations follow previous actions this week targeting corruption in the Democratic Republic of Congo and persons contributing to repression and the undermining of democracy around the world.

ORGANIZED CRIME AND CORRUPTION

The United States’ Strategy on Countering Corruption, released December 6, highlights the importance of addressing the nexus between corruption, criminal, and other illicit activity as a national security priority. Organized crime and corruption are often linked — organized crime groups destabilize civil society and collude with public officials to insulate themselves from prosecution. Corruption erodes confidence in democratic institutions, particularly where criminal groups benefit from cooperation with public officials, and when illicit actors are allowed to operate with impunity. Organized crime often achieves a transnational reach, where criminal groups operate across borders, undermine the integrity of the international financial system, and complicate law enforcement efforts.

NORTHERN KOSOVO-BASED TRANSNATIONAL ORGANIZED CRIME: ZVONKO VESELINOVIC AND HIS ORGANIZED CRIME GROUP

Zvonko Veselinovic (Veselinovic), the leader of the Zvonko Veselinovic Organized Crime Group (OCG), is one of Kosovo’s most notorious corrupt figures. The Veselinovic OCG is engaged in a largescale bribery scheme with Kosovar and Serbian security officials who facilitate the group’s illicit trafficking of goods, money, narcotics, and weapons between Kosovo and Serbia. The group has also conspired with various politicians in several quid pro quo agreements, including the early 2019 bribery of Kosovar security officials to allow their smuggling operations between Serbia and Kosovo and the late 2017 bribery of Kosovar border security officials to allow safe passage for smugglers. As of late 2017, Veselinovic and his brother Zharko Jovan Veselinovic (Zharko) had agreements with politicians to help their party win elections, secure political victories for their candidates, and contribute large sums of money to candidates. In return, these politicians would grant the brothers control of certain areas for their businesses and where they could conduct their illicit business activities without interference by Serbian authorities, and would also provide proprietary business information to support the brothers’ business investments. The politicians would also reward the Veselinovic brothers by working to grant the brothers the best infrastructure contracts. As of late 2017, Veselinovic and Zharko made donations as a method of laundering money originating from their criminal enterprise. Zharko has been a leader in the Veselinovic OCG, working with his brother and the OCG in their smuggling activities, their violent intimidations of businesses, their construction and infrastructure projects, and their telecommunications development projects. Additionally, Veselinovic and his group were indicted for their alleged involvement in the murder of political party leader Oliver Ivanovic in January 2018. Veselinovic and fellow members of the OCG, Milan Rajko Radojcic (Radojcic), Zeljko Bojic (Bojic), and Marko Rosic (Rosic), were all named in the indictment for the murder, each serving their role in the assassination for the criminal enterprise.

Veselinovic, Zharko, and Radojcic are designated pursuant to E.O. 13818 for being foreign persons who are or have been a leader or official of an entity, including any government entity, that has engaged in, or whose members have engaged in, corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery, related to their tenure.

Bojic is designated pursuant to E.O. 13818 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Veselinovic.

  • Rosic
  • Andrija Zheljko Bojic
  • Srdjan Milivoje Vulovic
  • Milan Mihajlovic 
  • Miljan Radisavljevic (Miljan)
  • Miljojko Radisavljevic (Miljojko)
  • Radovan Radic (Radic)
  • Sinisa Nedeljkovic (Nedeljkovic)
  • Radule Stevic (Stevic)

OFAC designated four entities across Europe that are owned or controlled by Veselinovic pursuant to E.O. 13818:

  • Inkop DOO Cuprija (Inkop), based in Serbia 
  • Civija Komerc, based in Serbia 
  • S.Z.T.R. Prizma B.I., based in Kosovo 
  • Ferari Preduzeee Za Usluge I Promet Polovnim Vozilima SH.A., based in Kosovo 

OFAC designated three entities across Europe that are owned or controlled by Inkop pursuant to E.O. 13818:

  • Betonjerka DOO Aleksinac, based in Serbia 
  • Dolly Bell DOO Beograd-Novi Beograd, based in Serbia 
  • Novi Pazar-Put D.O.O. Novi Pazar, based in Serbia

OFAC designated two entities across Europe that are owned or controlled by Zharko pursuant to E.O. 13818:

  • Zarko Veselinovic B.I., S.T.R. Kristal, based in Kosovo 
  • Nautikacentar D. O. O., based in Croatia 

OFAC designated three entities across Europe that are owned or controlled by Stevic pursuant to E.O. 13818:

  • DOO Rad 028 Zvecan, based in Serbia 
  • Radule Stevic B.I., P.T.P. Rad, based in Kosovo 
  • Rad D.O.O., based in Kosovo

OFAC designated seven entities across Europe that are owned or controlled by Nedeljkovic pursuant to E.O. 13818:

  • Markom Metal Commerce DOO Zvecan, based in Serbia 
  • Metal-Robna Kuca, based in Serbia 
  • Sinisa Nedeljkovic B.I., P.T.P. Metal, based in Kosovo 
  • P.P.Robna Kuca Metal B.I., based in Kosovo 
  • Farma Izvori B.I., based in Kosovo 
  • Robna Kuca Metal D.O.O., based in Kosovo 
  • Sinisa Nedeljkovic I.B., based in Kosovo

OFAC designated two entities across Europe that are owned or controlled by Miljan pursuant to E.O. 13818:

  • DOO MM Kom Inter Blue Donji Jasenovik, based in Serbia 
  • P.P. Babudovac B.I., based in Kosovo

OFAC also designated three entities across Europe that are owned or controlled by other members of this organized crime group pursuant to E.O. 13818:

  • DOO Babudovac Brnjak, based in Serbia and owned or controlled by Miljojko
  • Garac Inzenjering OOD, based in Bulgaria and owned or controlled by Radojcic
  • Radovan Radic B.I., P.P. Eu Rr Gradnja, based in Kosovo and owned or controlled by Radic

ORGANIZED CRIME IN EL SALVADOR: OSIRIS LUNA MEZA, CARLOS AMILCAR MARROQUIN CHICA, AND ALMA YANIRA MEZA OLIVARES

An investigation into officials of the Government of El Salvador and incarcerated leaders of gangs, such as Treasury-designated Mara Salvatrucha 13 (MS-13), has revealed covert negotiations between government officials and the criminal organization. MS-13 was designated on October 11, 2012 pursuant to E.O. 13581 for its involvement in serious transnational criminal activities, including drug trafficking, kidnapping, human smuggling, sex trafficking, murder, assassinations, racketeering, blackmail, extortion, and immigration offenses. Osiris Luna Meza (Luna) and Carlos Amilcar Marroquin Chica (Marroquin) led, facilitated, and organized a number of secret meetings involving incarcerated gang leaders, in which known gang members were allowed to enter the prison facilities and meet with senior gang leadership. These meetings were part of the Government of El Salvador’s efforts to negotiate a secret truce with gang leadership.

In 2020, Salvadoran President Nayib Bukele’s (Bukele) administration provided financial incentives to Salvadoran gangs MS-13 and 18th Street Gang (Barrio 18) to ensure that incidents of gang violence and the number of confirmed homicides remained low. Over the course of these negotiations with Luna and Marroquin, gang leadership also agreed to provide political support to the Nuevas Ideas political party in upcoming elections. Nuevas Ideas is the President’s political party and won a two-thirds super majority in legislative elections in 2021. The Bukele administration was represented in such transactions by Luna, the Chief of the Salvadoran Penal System and Vice Minister of Justice and Public Security, and Marroquin, Chairman of the Social Fabric Reconstruction Unit. In addition to Salvadoran government financial allocations in 2020, the gangs also received privileges for gang leadership incarcerated in Salvadoran prisons, such as the provision of mobile phones and prostitutes.

Amidst the COVID-19 pandemic, Luna also negotiated an agreement with gang leaders from MS-13 and Barrio 18 for the gangs’ support of President Bukele’s national quarantine in gang-controlled areas. Separately, Luna participated in a scheme to steal and re-sell government purchased staple goods that were originally destined for COVID-19 pandemic relief. These items were transferred to private companies and then resold on the private market or back to the government. Luna’s mother, Alma Yanira Meza Olivares (Meza), acted as the negotiator in some of these transactions. Additionally, Luna and Meza developed a scheme to embezzle millions of dollars from El Salvador’s prison commissary system. They also created fraudulent job positions within the prison system, in which supposed “employees” would receive monthly paychecks and return most of the earnings back to Luna and Meza.

Luna and Marroquin are designated pursuant to E.O. 13818 for being foreign persons who are current or former government officials, or persons acting for or on behalf of such an official, who are responsible for or complicit in, or have directly or indirectly engaged in, corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery.

Meza is designated pursuant to E.O. 13818 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Luna.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the persons 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, 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 otherwise exempt, 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 are prohibited. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person or the receipt of any contribution or provision of funds, goods, or services from any such person.

GLOBAL MAGNITSKY

Building upon the Global Magnitsky Human Rights Accountability Act, E.O. 13818 was issued on December 20, 2017, in recognition that the prevalence of human rights abuse and corruption that have their source, in whole or in substantial part, outside the United States, had reached such scope and gravity as to threaten the stability of international political and economic systems. Human rights abuse and corruption undermine the values that form an essential foundation of stable, secure, and functioning societies; have devastating impacts on individuals; weaken democratic institutions; degrade the rule of law; perpetuate violent conflicts; facilitate the activities of dangerous persons; and undermine economic markets. The United States seeks to impose tangible and significant consequences on those who commit serious human rights abuse or engage in corruption, as well as to protect the financial system of the United States from abuse by these same persons.

Click here to view more information on today’s designations.

Lauren Oppenheimer to Serve as Chief of Staff to the Acting Comptroller

News Release 2021-128 | December 7, 2021

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today announced the appointment of Lauren Oppenheimer as Chief of Staff to Acting Comptroller Michael J. Hsu.

“Lauren joined the OCC on a detail in July and quickly became a trusted advisor and valued counsel for me and the Executive Committee,” said Acting Comptroller of the Currency Michael J. Hsu. “She brings a wealth of experience and strong relationships to support the agency in meeting its mission and in enriching our engagement with external stakeholders.”

In her new role, Ms. Oppenheimer will advance the priorities of the Acting Comptroller, direct the daily operations of the Acting Comptroller’s support staff, provide administrative oversight to the Office of Minority and Women Inclusion, oversee the range of Public Affairs functions, and serve as a member of the OCC Executive Committee.

Prior to joining the OCC, Ms. Oppenheimer was the Director of Legislative and Intergovernmental Affairs at the Department of Commerce. She also previously served as Senior Advisor for Economic Policy for Senator Doug Jones and Minority Staff Director for the Senate Banking, Housing, and Urban Affairs Subcommittee on Financial Institutions and Consumer Protection under Senator Jeff Merkley. She also worked for Representatives Paul Hodes and Mel Watt. She holds a bachelor’s degree in political science and economics from the University of Toronto and a master’s degree in global economic history from the London School of Economics.

Media Contact

Stephanie Collins
(202) 649-6870

Treasury Targets Repression and the Undermining of Democracy

Designations Across Three Countries Latest in Week of Actions Leading to Summit for Democracy

WASHINGTON — Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating 15 actors across three countries in connection with serious human rights abuse and repressive acts targeting innocent civilians, political opponents, and peaceful protestors. As part of a whole-of-government commitment to democracy, Treasury is taking a number of actions aimed at promoting accountability for those who undermine trust in democratic institutions. Treasury is equipped with powerful tools to target the financial systems and flows that allow bad actors to profit from corruption and abuse. In addition, OFAC is designating two entities and two individuals that the Department of State has identified as responsible for certain gross violations of human rights in Iran.

“Ahead of this week’s Summit for Democracy, Treasury is targeting over a dozen government officials across three countries in connection with serious human rights abuse that undermines democracy,” said Director of the Office of Foreign Assets Control Andrea M. Gacki. “Treasury will continue to defend against authoritarianism, promoting accountability for violent repression of people seeking to exercise their human rights and fundamental freedoms.”

Today’s actions are taken pursuant to the following authorities: Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act, and targets perpetrators of corruption and serious human rights abuse; E.O. 13553, which imposes sanctions on certain persons with respect to serious human rights abuses by the Government of Iran; Section 106 of the Countering America’s Adversaries Through Sanctions Act (CAATSA), which allows Treasury to designate persons listed by the Secretary of State as responsible for gross violations of human rights against individuals in Iran who seek to expose illegal activity carried out by officials of the Government of Iran, or to obtain, exercise, defend, or promote internationally recognized human rights and freedoms; as well as E.O. 13572, which, among other things, imposes sanctions on certain persons responsible for or complicit in human rights abuses in Syria, as well as senior officials of, or entities owned or controlled by, persons blocked pursuant to E.O. 13572.

REPRESSION AND THE UNDERMINING OF DEMOCRACY

Democratic values and human rights are under threat around the world. Human rights defenders, members of civil society groups, journalists, and ordinary people seeking to exercise their right to freedom of expression and right of peaceful assembly face threats of violent repression from authoritarian leaders. Allowing this activity to continue unchallenged not only abandons and threatens victims of human rights abuses, but also poses a direct threat to the national security of the United States. Countries with repressive political regimes are often unstable over the long run, and they export instability regionally and worldwide. These regimes are often a threat to the peace and security of other nations. Standing up for human rights is not only consistent with American values but also U.S. national interests.

REPRESSION IN UGANDA: ABEL KANDIHO

As commander of the Ugandan Chieftaincy of Military Intelligence (CMI), Major General Abel Kandiho (Kandiho) and other CMI officers have arrested, detained, and physically abused persons in Uganda. The CMI targeted individuals due to their nationality, political views, or critique of the Ugandan government. Individuals were taken into custody and held, often without legal proceedings, at CMI detention facilities where they were subjected to horrific beatings and other egregious acts by CMI officials, including sexual abuse and electrocutions, often resulting in significant long-term injury and even death. During these incarcerations, victims were kept in solitary confinement and unable to contact friends, family, or legal support. In some cases, Kandiho was personally involved, leading interrogations of detained individuals.

Kandiho is designated pursuant to E.O. 13818 for being a foreign person who is or has been a leader or official of an entity that has engaged in, or whose members have engaged in, serious human rights abuse relating to his tenure.

REPRESSION IN IRAN: VIOLENT SUPPRESSION OF PEACEFUL PROTESTERS AND PRISONERS OF CONSCIENCE

The Special Units of Iran’s Law Enforcement Forces (LEF Special Units) are the dedicated crowd control and protest suppression unit of Iran’s LEF, one of the Government of Iran’s main security apparatuses that played a key role in the crackdown on protesters in the aftermath of the disputed Iranian presidential election in 2009. Serious human rights abuses against prisoners detained in the post-election protests also occurred at a detention facility run by the LEF. Treasury designated the LEF pursuant to E.O. 13553 on June 9, 2011, for its role in the post-election crackdown. The LEF Special Units were also involved in the post-election protest suppression in 2009 and have been called upon to forcefully put down multiple nationwide protests since then, including the November 2019 protests resulting from gasoline price increases, during which Iranian security forces killed hundreds of Iranian protestors. The LEF Special Units were one of the main security forces on the ground in November 2019, alongside units of Iran’s Islamic Revolutionary Guard Corps (IRGC) and Iran’s Basij Resistance Force (Basij), a paramilitary force subordinate to the IRGC. In multiple locations throughout Iran, LEF Special Units forces, along with those of a subunit, Iran’s Counter-Terror Special Forces (NOPO), used excessive and lethal force, firing upon unarmed protestors, including women and children, with automatic weapons. NOPO forces blocked main streets with armed vehicles and fired randomly at crowds with heavy machine guns.

The LEF Special Units and NOPO are being designated pursuant to E.O. 13553 for being persons acting on behalf of the Government of Iran responsible for or complicit in, or responsible for ordering, controlling, or otherwise directing, the commission of serious human rights abuses against persons in Iran or Iranian citizens or residents, or the family members of the foregoing, on or after June 12, 2009, regardless of whether such abuses occurred in Iran. The LEF Special Units are also being designated pursuant to E.O. 13553 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, Iran’s Law Enforcement Forces. NOPO is also being designated pursuant to E.O. 13553 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, the LEF Special Units.

Hassan Karami (Karami) is the commander of the LEF Special Units and has overseen the unit during periods of nationwide unrest during which the LEF Special Units have employed excessive and lethal force against Iranian unarmed protestors, including during November 2019. He was sanctioned by the European Union in April 2021 for his role in the violent response to the November 2019 protests. Mohsen Ebrahimi (Ebrahimi) was appointed commander of NOPO in 2016 and has similarly overseen the unit during several subsequent periods of nationwide unrest during which NOPO employed excessive and lethal force against Iranian unarmed protestors. Seyed Reza Mousavi Azami (Azami) commands a brigade of the LEF Special Units.  

Karami and Azami are being designated pursuant to E.O. 13553 for having acted or purported to act for or on behalf of, directly or indirectly, the LEF Special Units. Ebrahimi is being designated pursuant to E.O. 13553 for having acted or purported to act for or on behalf of, directly or indirectly, NOPO.

Gholamreza Soleimani (Soleimani) commands the Basij, one of Iran’s most important domestic security resources. The Basij has been heavily involved in violent crackdowns in Iran, including following the June 2009 contested presidential election, and in November 2019, during Soleimani’s tenure, when the Basij reportedly were among the Iranian security organizations that collectively killed hundreds of Iranian men, women, and children. Treasury designated the Basij pursuant to E.O. 13553 on June 9, 2011, for, among other activity, its role in the 2009 post-election crackdown. Soleimani was sanctioned by the European Union in April 2021 for his role in the violent response to the November 2019 protests.

Soleimani is being designated pursuant to E.O. 13553 for having acted or purported to act for or on behalf of, directly or indirectly, the Basij.

Leila Vaseghi (Vaseghi), the governor of Qods city, was responsible for issuing an order to the police and other armed forces during the November 2019 protests to shoot unarmed protestors, causing dozens of deaths or injuries. Vaseghi was also sanctioned by the EU in April 2021 for her role in the violent response to the November 2019 protests.

Vaseghi is being designated pursuant to E.O. 13553 for being a person acting on behalf of the Government of Iran (including members of paramilitary organizations) who is responsible for or complicit in, or responsible for ordering, controlling, or otherwise directing, the commission of serious human rights abuses against persons in Iran or Iranian citizens or residents, or the family members of the foregoing, on or after June 12, 2009, regardless of whether such abuses occurred in Iran.

IRGC interrogators Ali Hemmatian (Hemmatian) and Masoud Safdari (Safdari) have long records of physical abuse against Iranian political prisoners at IRGC detention facilities, including at Iran’s Evin Prison. Hemmatian employed physical beatings and whippings during interrogation of prisoners, resulting in lasting damage, including cracked bones. He has physically beaten many student activists and women, and has also directed, and authored the text of, televised confessions. Safdari has similarly been involved in detainee abuse, to include physical beatings and threatening the families of detainees. He has also managed the recording of televised confessions.

Hemmatian and Safdari are being designated pursuant to E.O. 13553 for being persons acting on behalf of the Government of Iran (including members of paramilitary organizations) responsible for or complicit in, or responsible for ordering, controlling, or otherwise directing, the commission of serious human rights abuses against persons in Iran or Iranian citizens or residents, or the family members of the foregoing, on or after June 12, 2009, regardless of whether such abuses occurred in Iran. On March 9, 2021 the Department of State designated Hemmatian and Safdari pursuant to Section 7031(c) of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2021, for their involvement in gross violations of human rights.

Zahedan Prison, located in the Sistan and Baluchistan province in southeast Iran, reportedly holds several political prisoners who belong to the Baluch ethnic minority group. According to public reports, on January 3, 2021, Baluch prisoner Hassan Dehvari was executed in Zahedan Prison. Dehvari was sentenced to death for “armed rebellion against the Islamic Rule.” His sentence was escalated to execution after he engaged in several acts of peaceful protests, such as signing statements condemning executions of Sunni prisoners and condemning the mistreatment of fellow prisoners in Zahedan Prison. Dehvari addressed an open letter to UN experts protesting his death sentence and requesting help. According to Dehvari’s lawyer, his execution was carried out despite a request for retrial pending with the Supreme Court. Dehvari’s execution was likely in retaliation for seeking to exercise his right to freedom of expression. According to human rights groups, IRGC officers arrested another Baluch prisoner, Hamid Reza Koukhan, on August 27, 2020 for reportedly “writing slogans, disrupting national security, and insulting the leadership of Qassem Soleimani” during a protest and sent him to Zahedan Prison in October 2020. Zahedan Prison is responsible for the flagrant denial of the right to liberty of Koukhan for seeking to exercise his right to freedom of expression and his right of peaceful assembly.

Isfahan Central Prison, also known as “Dastgerd Prison,” located in Isfahan city, is where, according to media reports, Mostafa Salehi, an electrical generator repairman, was executed on August 5, 2020 after taking part in streets protests in December 2017 and January 2018. According to Human Rights Watch, the prosecutor in Salehi’s case accused him of having contacts with foreign intelligence and having “organized the riots.” Salehi was convicted of murder for the killing of an IRGC officer during these protests but maintained his innocence and independent media reports suggest that the prosecution authorities failed to provide evidence of his guilt. Isfahan Central Prison is responsible for the flagrant denial of the right to life and liberty of Salehi for seeking to exercise his right to freedom of expression and his right of peaceful assembly.

Zahedan Prison and Isfahan Central Prison are being listed by the Department of State and designated by OFACpursuant to Section 106 of CAATSA.

Soghra Khodadadi, the current director of Qarchak Women’s Prison, was responsible for ordering and directly participating in a violent attack on December 13, 2020 against prisoners of conscience in Ward 8 along with at least 20 other guards. According to publicly available reports, prison guards beat these female prisoners of conscience with batons and stun guns. Khodadadi ordered this attack in retaliation for the prisoners exercising their right to freedom of expression.

Khodadadi is being listed by the Department of State and designated by OFAC pursuant to Section 106 of CAATSA. Qarchak Prison was publicly identified as responsible for certain gross violations of human rights under CAATSA in 2019 and designated in 2020.

Mohammad Karami is a Brigadier General and commands the IRGC South-East Quds Operational Base in Zahedan in Sistan and Baluchistan Province. The Quds Base is officially tasked with ensuring security in Sistan-Baluchistan, including the Saravan border, between Sistan and Baluchistan and Pakistan. According to public reporting, Karami is responsible for the actions of IRGC officers stationed at the Shamsar Base, who according to Amnesty International on February 22, 2021 fired live ammunition at unarmed fuel porters who were seeking to exercise their freedom of expression.

Karami is being listed by the Department of State and designated by OFACpursuant to Section 106 of CAATSA.

REPRESSION IN SYRIA: DESIGNATIONS OF PERSONS INVOLVED IN DEADLY CHEMICAL WEAPONS ATTACKS AGAINST CIVILIANS, AND DESIGNATIONS OF SENIOR OFFICIALS OF SYRIAN INTELLIGENCE AND SECURITY ENTITIES

OFAC is also designating two senior Syrian Air Force officers responsible for chemical weapons attacks on civilians and three senior officers in Syria’s repressive security and intelligence apparatus. These senior officials and the organizations they are associated with have imprisoned hundreds of thousands of Syrians who peacefully called for change. Moreover, at least 14,000 prisoners in Syria have allegedly died as a result of torture. Today’s designations are another critical step in promoting accountability for the Assad regime’s abuses against Syrians.

Tawfiq Muhammad Khadour (Khadour) is a Major General in the Syrian Air Force (SAF), currently in command of the 22nd Air Division. On February 25, 2018, while Khadour commanded the 30th Brigade of the SAF at Dumayr Airbase, airstrikes from the airbase against Eastern Ghouta dropped chemical barrel bombs throughout the area, killing civilians. On April 7, 2018, an attack on Eastern Ghouta launched from Dumayr Airbase, still under the command of Khadour, included at least two chlorine barrel bombs and a guided missile attack on a humanitarian facility, rendering it inoperable and killing dozens of civilians.

Khadour is being designated under E.O. 13572 for being responsible for or complicit in, or responsible for ordering, controlling, or otherwise directing, or having participated in, the commission of human rights abuses in Syria, including those related to repression.

Muhammad Youssef Al-Hasouri (Al-Hasouri) is a Major General in the SAF in command of the 70th Brigade at T-4 Military Airbase. Al-Hasouri previously served as the deputy commander of the 50th Brigade of the Syrian Air Force at al-Shayrat Airbase. Al-Hasouri personally carried out numerous airstrikes killing Syrian civilians, including chemical weapons attacks. This includes the notorious April 4, 2017 sarin attack at Khan Shaykhun, which killed at least 87 people and for which the European Union sanctioned him.

Al-Hasouri is being designated pursuant to E.O. 13572 for being responsible for or complicit in, or responsible for ordering, controlling, or otherwise directing, or having participated in, the commission of human rights abuses in Syria, including those related to repression.

Adeeb Namer Salameh (Salameh) is the Assistant Director of Syrian Air Force Intelligence (SAFI), an integral component of the Assad regime’s repressive security apparatus. Treasury previously designated SAFI on May 18, 2011, for its role in the Assad regime’s violent response to civil society protests, including the use of live ammunition against protesters by SAFI forces. Salameh was previously head of SAFI’s Aleppo Branch, wherein he was described as one of the most extreme officers and prominent symbols of the Syrian regime’s crimes. Salameh was the first to transform a “Shabiha,” a term for local criminal gangs, into an irregular militia force under regime control. The militia that Salameh commanded was reportedly responsible for torture, killings, and kidnapping for ransom in the countryside surrounding Salamiyeh, Syria. Salameh gained the nickname “Aleppo’s president” after imposing his influence on all the security branches, authorities, and merchants of Aleppo. Salameh has been implicated in major corruption cases for having received large sums of money in exchange for protecting factories and appointing himself as a partner to major investors in Aleppo.

Salameh is being designated for being a senior official of SAFI, an entity whose property and interests in property are blocked pursuant to E.O. 13572.

Qahtan Khalil (Khalil) is a senior SAFI official and is the head of the Security Committee in the South of Syria. He is one of the SAFI officers accused of direct responsibility for the notorious Daraya massacre, which left hundreds dead in the suburbs of Damascus in 2012.

Khalil is being designated for being a senior official of SAFI, an entity whose property and interests in property are blocked pursuant to E.O. 13572.

Kamal al-Hassan (al-Hassan) is the commander of SMI Branch 227 and previously commanded SMI Branch 235, the SMI branch responsible for joint operations with Hizballah. Branch 227 was one of the SMI branches specifically highlighted in images provided by Caesar, a Syrian regime defector — in whose name the Caesar Act was passed into law — who worked as an official forensic photographer for the Syrian military and who courageously revealed thousands of images of detainees who were reportedly tortured and killed.

Al-Hassan is being designated for being a senior official of SMI, an entity whose property and interests in property are blocked pursuant to E.O. 13572.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the persons designated 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, 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 otherwise exempt, 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 are prohibited. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person or the receipt of any contribution or provision of funds, goods, or services from any such person.

GLOBAL MAGNITSKY

Building upon the Global Magnitsky Human Rights Accountability Act, E.O. 13818 was issued on December 20, 2017, in recognition that the prevalence of human rights abuse and corruption that have their source, in whole or in substantial part, outside the United States, had reached such scope and gravity as to threaten the stability of international political and economic systems. Human rights abuse and corruption undermine the values that form an essential foundation of stable, secure, and functioning societies; have devastating impacts on individuals; weaken democratic institutions; degrade the rule of law; perpetuate violent conflicts; facilitate the activities of dangerous persons; and undermine economic markets. The United States seeks to impose tangible and significant consequences on those who commit serious human rights abuse or engage in corruption, as well as to protect the financial system of the United States from abuse by these same persons.

View more information on today’s designations.

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Remarks by Assistant Secretary of the Treasury for Economic Policy Ben Harris on Promoting Competition in Labor Markets

WASHINGTON —Assistant Secretary of the Treasury for Economic Policy Ben Harris delivered the following remarks at a public workshop on promoting competition in labor markets hosted by the Department of Justice and Federal Trade Commission.

As prepared for delivery

Let me start by thanking the Department of Justice and the Federal Trade Commission for hosting this critically important event today. It’s an honor to be here among such distinguished panelists, discussing one of the most important economic issues of our time.

I’d like to briefly discuss economic explanations for wage stagnation, especially at the lower end of the wage scale. Careful followers of the labor market would rightly point to inflation-adjusted gains for many occupations with relatively low wages. Yet, this phenomenon, while welcome, appears to be driven by pandemic-related declines in labor force participation. The goal, of course, is to sustain wage gains in tandem with participation. And to reach that objective, we must understand the roots of long-term wage stagnation.

The best way to illustrate long-term wage trends is to use an example from the late and influential labor economist, Alan Kreuger. During a 2018 luncheon at the Kansas City Fed, Alan told the story of a man named Jeffery Suhre. In 1991, Suhre started working as a registered nurse at St. John Providence Hospital in Warren, Michigan, and about 12 or 13 years into the job, he had a realization: His pay was far lower than what it should’ve been in a fair market.

Economists have traditionally identified three broad explanations for wage stagnation. The first, generally put, is globalization. Beginning in the ‘70s – and accelerating in the 2000s with China’s ascension into the WTO – American workers increasingly competed with workers in foreign labor markets, many of whom would accept lower wages for the same job. Production moved overseas, and for the jobs that remained, wages began to stagnate. This explanation is validated by the work of economists Autor, Dorn, and Hanson, who famously found that increased trade with China cost America roughly one million manufacturing jobs. Still, none of this explains the story of Jeffery Suhre. After all, no American hospital could lower labor costs by outsourcing its nurses to Shanghai.

The second explanation is technology. Software, automation, and other new innovations all drove up the demand for skilled workers who were fluent in technology and drove down the demand for those who weren’t. In some cases, automation has eliminated the need for these workers entirely. Again, there is careful and legitimate evidence to support this argument, but not in the case of Jeffery Suhre. No American hospital has been replacing its nurses with robots.

Which brings us to the third argument: institutions that protect worker pay, like the federal minimum wage and private-sector unions. These have been on the decline for years. Adjusted for inflation, the federal minimum wage is around 45 percent lower than what it was in the late 60s, and since about that time, the percent of private sector workers belonging to unions has fallen from roughly one-in-four to six percent. This explanation also has merit, including in the case of the Michigan nurses – they weren’t unionized – but it doesn’t capture the entire story. For that, we need a fourth argument that captures changes in the relationship between workers and firms.

Indeed, what Jeffrey Suhre realized after a decade at St. John Providence was that his hospital had been colluding with others in the area. He had the e-mails. Executives wanted to prevent their nurses from jumping from one hospital to another for better pay, so they collaborated to set one regional – and artificially low – wage rate. (In 2006, eight Michigan hospitals paid $48 million to settle a wage-fixing class action lawsuit, in which Suhre was the lead plaintiff).

If you’ve ever taken an introductory economics course, you were probably taught that labor markets are perfectly competitive. A worker making $20 an hour sees there’s a job opportunity across the street offering $20.10, so he puts in his notice and crosses to the street to his new job. That’s the perfectly competitive model, and it’s often a complete fiction. Labor markets typically don’t work like this. For one, workers typically have imperfect information and don’t know what a similar job will pay. Or, they’re bound by a non-compete agreement, and crossing the street would invite a lawsuit. Or, even if companies aren’t breaking the law, colluding to set low wages, they have immense market power to set low wages. 

Speaking at an event hosted by the Department of Justice and Federal Trade Commission, it’s safe to assume we all understand the notion of a monopoly. And as labor market competition has emerged as a first-order consideration, the notion of monopsony has gained traction in economic and policy circles. And that’s ultimately what we’re here to discuss today, the imbalance between workers and employers in the labor market. As the economist Alan Manning wrote in his seminal book, Monopsony in Motion, “[T]he relationship between employer and worker is not one of equals.”

While this anti-competitive streak can be seen as a harmful aspect of our economy – and it is – our newfound understanding of monopsony power is also a positive development. For years, we’ve been contending with a series of big and knotty questions: Why are wages low? Why is income inequality on the rise? This explanation helps us reframe those questions into a much more tractable one: How do we ensure that when employees negotiate their pay, they do soon more equal footing?

That was one rationale behind President Biden’s July executive order on competitiveness, which included a series of initiatives from making sure that wages are more transparent in certain sectors; to curtailing the use of non-compete clauses; to simply studying the economic impact of limited labor market competition.

Ultimately, creating a fairer economy with better-paid workers will require us economic policymakers to do what economists don’t usually do. Instead of revising our model of a perfectly competitive labor market so that it reflects the real world, we should revise the real world so that it reflects the competition in our textbooks. 

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OCC Reports on Risks, Effects of COVID-19 Pandemic on Federal Banking System

News Release 2021-127 | December 6, 2021

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today reported the key issues facing the federal banking system and the effects of the COVID-19 pandemic on the federal banking industry in its Semiannual Risk Perspective for Fall 2021.

Banks are weathering the COVID-19 crisis with resilience and satisfactory credit quality and strong earnings, but weak loan demand and low net interest margins (NIM) continue to weigh on performance. The OCC highlighted operational, credit, compliance, and strategic risks, among the key risk themes in the report.

Highlights from the report include:

  • Operational risk is elevated as banks respond to an evolving and increasingly complex operating environment and cyber risks.
  • Credit risk is moderate as widespread government programs and appropriate risk management limited the potential credit impact, though some areas warrant continued attention.
  • Compliance risk is heightened, driven by regulatory changes and policy initiatives that continue to challenge risk management.
  • Strategic actions taken by banks to offset earnings impacts of low yields and NIM compression remain a risk.

The report also highlights an OCC initiative to act on the risk that climate change presents to the federal banking system.

The report covers risks facing national banks, and federal savings associations based on data as of June 30, 2021. The report presents information in five main areas: the operating environment, bank performance, special topic on community banks, trends in key risks, and supervisory actions. It focuses on issues that pose threats to those financial institutions regulated by the OCC and is intended as a resource to the industry, examiners, and the public.

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Treasury Targets Corruption Linked to Dan Gertler in the Democratic Republic of Congo

Treasury’s Designation Action the First in a Week of Actions Leading to the Summit for Democracy

WASHINGTON — Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned one individual, Alain Mukonda (Mukonda), for providing support to sanctioned billionaire Dan Gertler, as well as 12 entities linked to Mukonda or companies associated with him in the Democratic Republic of the Congo and Gibraltar. Mukonda and the 12 entities are designated pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world.

Corruption allows bad actors to abuse their authority and extract unfair gains at the expense of others. Treasury’s strategy to combat corruption and combat these illicit activities will make the U.S. economy — and the global economy — stronger, fairer, and safer from corrupt actors and national security threats. Treasury is uniquely equipped with tools to root out corruption at home and abroad by targeting the financial systems and flows that allow bad actors to profit from corruption.

“Treasury is committed to supporting the Democratic Republic of the Congo’s anti-corruption efforts by going after those that abuse the political system for economic gain and unfairly profit from the Congolese state,” said Deputy Secretary of the Treasury Wally Adeyemo. “Treasury recognizes that corruption fuels instability and conflict, and undercuts efforts to achieve the economic growth and the rule of law necessary to overcome fragility. We stand with the Congolese people in their efforts to combat this scourge.”

Today’s actions demonstrate the U.S. government’s ongoing effort to coordinate with civil society partners to impose significant consequences on those engaged in corruption in the DRC and globally.

PARTNERS IN THE FIGHT AGAINST CORRUPTION

Since the inception of the Global Magnitsky sanctions program, Treasury has worked hand in hand with civil society and foreign partners to develop and pursue investigations targeting perpetrators of corruption. Civil society organizations around the world are often eyewitnesses to corruption and human rights abuses and can shine a light on activities that corrupt actors and authoritarian regimes try to keep hidden. In determining whether to impose sanctions, Treasury considers credible information obtained by Non-Governmental Organizations (NGO) that monitor violations of human rights. Treasury highly values the information shared by NGOs all over the globe to expose corruption and human rights abuse, which can be used to support and develop cases like Treasury’s action today.

As highlighted by Treasury’s recent sanctions review, sanctions are most effective when coordinated where possible with allies and partners who can magnify the economic and political impact. Treasury sanctions comport with efforts by local partners to combat corruption, from law enforcement investigations into corrupt actors to legal reforms to strengthen key areas like enhanced transparency on beneficial owners and improved public procurement processes. Today’s action would not have been possible without the support and cooperation of DRC officials, who have demonstrated a clear commitment at the highest levels to root out corruption.

A FINANCIAL LIFELINE FOR GERTLER

Government officials in the DRC have prioritized promoting investment opportunities and increasing access to global finance due to the growth potential in a number of commercial sectors that have the potential to lift millions out of poverty. However, corruption, opaque business practices, and a patchwork legal framework have constrained economic growth and deterred private investment. Promoting accountability for corrupt actors is an important step in deterring future corruption.

Dan Gertler was included in the Annex to E.O. 13818 for his involvement in corruption in the DRC. On December 21, 2017, OFAC announced the designation of 19 companies and one associate, Pieter Albert Deboutte, for their ties to him. As previously noted in the December 2017 actions, Gertler amassed his fortune through hundreds of millions of dollars’ worth of opaque and corrupt mining and oil deals in the DRC. Gertler has used his close friendship with former DRC President Joseph Kabila to act as a middleman for mining asset sales in the DRC, requiring some multinational companies to go through Gertler to do business with the Congolese state. As a result of Gertler’s actions, between 2010 and 2012 alone, the DRC reportedly lost more than $1.36 billion in revenues from the underpricing of mining assets that were sold to offshore companies linked to Gertler. In June 2018, OFAC took further action to target Gertler’s vast commercial network, designating 14 companies owned or controlled by him.

OFAC is designating Mukonda today for providing support to Gertler. Following Gertler’s identification in the Annex in 2017, Mukonda opened bank accounts and made payments into proxy bank accounts for Gertler and those linked to Deboutte. He made 16 cash deposits totaling between 11 and 13.5 million dollars into accounts of companies he incorporated that ultimately belong to Gertler’s family. He also re-domiciled several of Gertler’s companies from Gibraltar and the British Virgin Islands to the DRC. With today’s action, the number of sanctioned entities and individuals in Gertler’s network, including the identification of Gertler in the Annex to E.O. 13818, totals 46. Treasury is committed to ensuring that Gertler is not able to corruptly profit from continued access and influence in the DRC and globally.

Mukonda is designated pursuant to E.O. 13818 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of Gertler, a person whose property and interests in property are blocked pursuant to E.O. 13818.

Additionally, OFAC is designating 11 entities based in the DRC, as well as one entity in Gibraltar, pursuant to E.O. 13818:

  • Kintaleg Limited, based in Gibraltar and owned or controlled by Mukonda.
  • Ventora Global Services, based in the DRC and owned or controlled by Mukonda.
  • Ventora Mining S.A.S.U., based in the DRC and owned or controlled by Mukonda.
  • Ashdale Settlement Gerco SAS, based in the DRC and owned or controlled by Mukonda.
  • Opera, based in the DRC and owned or controlled by Ashdale Settlement Gerco SAS.
  • Palatina SARLU, based in the DRC and owned or controlled by Ashdale Settlement Gerco SAS.
  • Gemini S.A.S.U., based in the DRC and owned or controlled by Opera.
  • Kaltona Limited SASU, based in the DRC and owned or controlled by Gemini S.A.S.U.
  • Multree Limited SASU, based in the DRC and owned or controlled by Gemini S.A.S.U.
  • Woodford Enterprises Limited SASU, based in the DRC and owned or controlled by Gemini S.A.S.U.
  • Rosehill DRC SASU, based in the DRC and owned or controlled by Woodford Enterprises Limited SASU.
  • Woodhaven DRC SASU, based in the DRC and owned or controlled by Rosehill DRC SASU.

These designations are the first in a series leading up to International Anti-Corruption Day and International Human Rights Day that demonstrate the whole-of-government approach to combatting corruption through the Treasury’s unique position and powerful tools.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the persons 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, 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 otherwise exempt, 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 are prohibited. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person or the receipt of any contribution or provision of funds, goods, or services from any such person.

GLOBAL MAGNITSKY

Building upon the Global Magnitsky Human Rights Accountability Act, E.O. 13818 was issued on December 20, 2017, in recognition that the prevalence of human rights abuse and corruption that have their source, in whole or in substantial part, outside the United States, had reached such scope and gravity as to threaten the stability of international political and economic systems. Human rights abuse and corruption undermine the values that form an essential foundation of stable, secure, and functioning societies; have devastating impacts on individuals; weaken democratic institutions; degrade the rule of law; perpetuate violent conflicts; facilitate the activities of dangerous persons; and undermine economic markets. The United States seeks to impose tangible and significant consequences on those who commit serious human rights abuse or engage in corruption, as well as to protect the financial system of the United States from abuse by these same persons.

Click here to view more information on today’s designations.

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Remarks by Deputy Secretary of the Treasury Wally Adeyemo on Anti-Corruption at the Brookings Institution

As prepared for delivery

Thank you to General Allen, Ambassador Eisen, and the Brookings Institution for inviting me to speak today.

This week, President Biden is hosting the inaugural Summit for Democracy. Representatives of more than 100 governments will discuss how we can collectively advance a system of government that provides people with the right to define their destiny, including efforts to fight corruption.

As those of you who work on these issues know well, there are good reasons to put anti-corruption at the center of our efforts to promote democracy. Democracy depends fundamentally on institutions and on trust. Institutions perform the fundamental work of democratic government—from faithfully representing the interests of the people to ensuring everyone pays the taxes they owe. Institutions, in turn, depend on trust—trust between citizens to resolve their differences through the democratic process, rather than outside it, and trust in government to provide effective leadership in times of calm and of crisis.

Corruption is corrosive to both. It siphons resources away from democratic institutions and erodes people’s trust that these institutions will serve them in the first place. According to an IMF study, corruption costs governments $1 trillion in lost tax revenue each year.

Though we know why corruption is such a problem, how we combat corruption is often more challenging, especially where it intersects with the U.S. and global financial systems. Corruption thrives in the financial shadows—in shell corporations that disguise owners’ true identities, in offshore jurisdictions with lax anti-money laundering regulations, and in complex structures that allow the wealthy to hide their income from government authorities.

This is not a problem that can be solved by law enforcement agencies alone. It is critical that finance ministries around the world play a central role in rooting out corruption. That is why Secretary Yellen has called on the Department of the Treasury to focus on combating corruption as part of the whole-of-government strategy announced earlier today.

Today, I’d like to share some of the nuts and bolts of Treasury’s plan to combat corruption, promote democracy, and protect the integrity of the financial system. Our approach is driven by three major lines of effort: (1) Improving Transparency, (2) Increasing Enforcement, and (3) Deepening our Partnerships.

Let’s take transparency first. For too long, corrupt actors have made their home in the darkest corners of the global financial system, stashing the profits of their illegitimate activities in our blind spots. A major component of our anti-corruption work is about changing that—shining a spotlight on these areas and using what we find to deter and go after corruption.

Shell corporations and front companies are one of these corners. Current U.S. law allows those seeking to hide their financial activities to form companies anonymously—without disclosing who ultimately owns and profits from them. That makes moving illicit funds into the U.S. financial system especially enticing for criminals and corrupt actors, and it makes it even more important that the federal government has the tools to prevent and combat it.

Let me provide an example. In March, the Department of Justice unveiled charges against 10 Iranian nationals for a scheme involving more than $300 million in illicit transactions on behalf of the Iranian government, including the purchase of two oil tankers. That scheme ran for nearly 20 years because its participants used U.S.-based front companies to hide the nature of their activities. This scheme was not only a crime, but it provided a state sponsor of terrorism with resources to fund activities that put our national security at risk

Over the last year, the Treasury bureau charged with administering anti-money laundering laws and regulations—the Financial Crimes Enforcement Network, or FinCEN—has been working hard to change this by implementing the Corporate Transparency Act. This law for the first time requires certain types of U.S. and foreign companies to disclose their beneficial owners—those who actually own or control them—when they are formed, registered in the U.S., or when they change hands. The law also enables FinCEN to build a central registry of this information that will be shared with law enforcement and national security agencies.

Treasury is taking an aggressive stance in its implementation of the CTA, pursuing an approach that will arm us with the information we need to deter and fight corruption at home and abroad. We are doing this in collaboration with the business community, who share our interest in rooting out corruption and protecting our national security. We are cognizant that new rules like this one can impose compliance burdens on companies, especially small businesses. This is why we are working to ensure the cost of compliance on average will be less than $50 per company.

Another of these dark corners is the real estate market. Today, certain all-cash real estate transactions are not subject to permanent anti-money laundering rules or requirements for beneficial ownership disclosure. As a result, our real estate markets are at risk of becoming a safe haven for criminals, kleptocrats, and others seeking to park corrupt profits.

For example, it has been reported that the brother of former Democratic Republic of the Congo president Joseph Kabila embezzled millions in government funds and stashed some of them in U.S. real estate worth nearly $3.5 million. He was reportedly able to turn these illicit funds into valuable assets by making these purchases in cash—taking advantage of this longstanding gap in U.S. anti-money laundering rules.

For nearly two decades, a bipartisan coalition of elected officials and experts have called for action to stop these forms of corruption from finding shelter in our economy. That is why, today,
Treasury announced FinCEN’s release of an Advance Notice of Proposed Rulemaking that seeks public comment on how to close this loophole in the real estate market. We look forward to working with people like the experts in this room, local officials, and the private sector to develop a regulatory approach that will safeguard the integrity of our markets and root out corruption in American real estate.

The second prong of our anti-corruption work focuses on enforcement—using the new information we gather to go after corrupt actors with sanctions and other enforcement tools, and arming our law enforcement partners in sister agencies with the best possible information to investigate and prosecute crimes of corruption, like bribery, embezzlement, and extortion.

In October, Treasury released the results of our review of U.S. sanctions policy. The review offered several recommendations to modernize our sanctions tools, including to adopt a structured policy framework that ties our sanctions to clear policy objectives; renew our commitment to multilateralism; calibrate sanctions to mitigate unintended impacts; and modernize our sanctions technology and infrastructure.

Treasury is working with our colleagues across the government and our allies and partners on operationalizing the results of the review, including how to use our anti-corruption sanctions authority with these principles in mind. We also plan to use new resources like beneficial ownership data to help implement the review’s recommendations and enhance the targeting and efficacy of our sanctions actions.

Treasury has designated 216 targets with our anti-corruption sanctions authority to date. Today, under this authority, Treasury is designating an individual for providing material support to Dan Gertler, a billionaire who amassed his fortune through hundreds of millions of dollars’ worth of corrupt mining and oil deals in the Democratic Republic of the Congo, as well as 12 entities owned or controlled by this individual.

Treasury’s enforcement actions go beyond sanctions—they also include criminal law enforcement. For example, the IRS’s Criminal Investigation division has worked closely with the Departments of Justice and Homeland Security to investigate and prosecute a former Ecuadorian official who laundered bribery payments through the United States. The official, who accepted more than $5 million in bribes to direct government contracts to three reinsurance companies, was ultimately sentenced to more than 4 years in prison earlier this year. With per capita GDP in Ecuador standing at less than $6,000, cases like this highlight the role of corruption in both eroding trust in public institutions and undermining economic fairness.

Attempts by the wealthy and powerful to deprive the public of resources also exist within our own borders. Today, the top 1 percent of earners in the United States underpay their taxes by more than $160 billion each year, depriving every other American of the money we need to invest in things that benefit the whole country, like roads, childcare, education.

The President believes it is fundamentally unfair that the wealthy are allowed to play by a different set of rules when it comes to paying their taxes. That’s why the Build Back Better Act includes substantial new funding for tax compliance, giving the IRS the tools it needs to identify and go after tax avoidance. This enhanced tax enforcement will not only generate $400 billion in revenue over the next decade, it will help deter tax avoidance and assist Treasury in identifying instances of corruption, working side-by-side with the tools provided under the Corporate Transparency Act.

This brings me to the final piece of our anti-corruption plan—partnership. We are working to expand our partnerships in the fight against corruption—with our allies and partners abroad, with the private sector, and with civil society groups.

We cannot stop corruption at home if we do not also help stamp it out abroad. According to data from SWIFT, more than 40 percent of global payments are conducted in euros or pounds—roughly the same share as the dollar. The globalized nature of the financial system means that our efforts to keep illicit funds out of U.S. markets cannot succeed if other jurisdictions offer an open door for them.

We’re fortunate to have a growing consensus around this view. The UN, the G20, the G7 and the Financial Action Task Force—the FATF—are important partners, and we’re working with them to ensure that many of the measures I’ve discussed today are applied elsewhere. For example, we’re working with the FATF to bolster global standards for beneficial ownership transparency and remove opportunities for regulatory arbitrage.

And we’re working with multilateral institutions like the IMF and World Bank to help incorporate rigorous anti-corruption standards into their lending policies.

Let me also take this as an opportunity to affirm our commitment to partnering with the private sector on anti-corruption efforts. Our transparency initiatives depend not only on implementation and compliance by the private sector, but also on the sector’s proactive vigilance. Financial institutions and other private sector organizations must undertake robust due diligence and actively seek to avoid corrupt clients and counterparties to keep our financial system secure. Their efforts to gather and share this information help feed a virtuous cycle, allowing us to better target our actions and minimize costs on the private sector while protecting our national security.

And, of course, we are grateful for the continued partnership of civil society to investigate corruption and provide us with critical information to inform our anti-corruption priorities, policies, and enforcement. We want to work toward deepening this partnership in the months and years to come.

In closing, I want to reiterate our fundamental view that nobody should be able to play by a different set of rules. That’s why Treasury will remain focused on ensuring the rich, the powerful, and the corrupt cannot use the global financial system to protect their illicit assets or avoid paying their fair share.

In doing this work, Treasury’s goal is to promote democracy, to safeguard America’s national security, and to protect the fairness and integrity of our economy.

I believe that with the new actions we’ve announced today, and the ones we will announce this week and in the future, we are closer to those goals.

With that, I’m looking forward to our conversation.

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OCC Solicits Academic Papers, Research on Climate Risk in Banking and Finance

News Release 2021-126 | December 3, 2021

WASHINGTON—The Office of the Comptroller of the Currency (OCC) is soliciting academic-focused papers and policy-focused research on climate risk in banking and finance for presentation to the OCC on June 6-7, 2022. Information presented will inform the OCC’s approach to developing climate-related financial risk management guidance for regulated institutions.

The June meeting will provide a platform for interested academic, regulatory, and other experts to meet and provide research on the interaction of climate change and the financial system. The event is limited to invited presenters and discussants of selected papers and OCC staff. The OCC anticipates selecting six to 10 papers for presentation and discussion, and will contact authors of selected papers directly.

Areas of interest include but are not limited to

  • physical risks directly arising from climate change.
  • transition risks from climate policies, technological innovation, consumer sentiment, or investor sentiment.
  • differential community impact.
  • climate risk modeling and stress testing.
  • environmental, social, and corporate governance ratings and regulatory reliance.

Interested parties are invited to submit papers or a one-page extended abstract/executive summary by March 11, 2022, to [email protected]. Submitted papers must represent original and unpublished research.

Additional information about submitting a paper or research, or participating in the June meeting as a discussant, is available at www.occ.gov/climate.

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U.S. Treasury Supports National Action Plan to Combat Human Trafficking

WASHINGTON – As a part of the Biden Administration’s commitment to fight against human trafficking, the U.S. Department of the Treasury announced measures to contribute to the updated National Action Plan (NAP) to Combat Human Trafficking and play a part in countering this grave human rights abuse. The NAP brings a whole-of-government approach to address a range of key topics, including prevention, protection, and prosecution, and also establishes interagency partnerships to support cross cutting initiatives. The plan also draws upon survivor-leader experiences and expert contributions to help prevent human trafficking and better utilize resources to respond to the needs of survivors.

Treasury plays a key role in countering human trafficking by leveraging financial expertise and broad authorities to target trafficking networks through a range of economic tools implemented through the Office of Terrorism and Financial Intelligence. Treasury has previously identified proceeds from human trafficking as a significant threat to the U.S. financial system and has made it a priority to disrupt and dismantle trafficking networks. Looking ahead, the department is leading new initiatives aimed at improving access to the financial system for human trafficking survivors. One such initiative utilizes an innovative risk-based approach to allow survivors without traditional ‘foundational’ identity documents to access the financial system through responsible digital identity verification.

As a broader effort across the U.S. government, private sector partners, and foreign governments, Treasury recently hosted the 3rd Annual Partnership to Combat Human Rights Abuse and Corruption, where hundreds of participants from all sectors came together to discuss and share information related to forced labor in supply chains, human trafficking, and financial transparency. Treasury also works closely with bodies such as the Financial Action Task Force (FATF) and partner countries to strengthen global financial standards to address this threat.

Additionally, on the recommendation of the recent sanctions review, Treasury is expanding efforts to multi-lateralize sanctions to maximize the effect of our financial tools. The department will continue to use all of its tools and authorities to combat these serious abuses. 

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Treasury Expands Sanctions Against Belarusian Regime with Partners and Allies

WASHINGTONToday, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), in response to the Lukashenka regime’s blatant disregard for international norms and the wellbeing of its own citizens, is designating 20 individuals and 12 entities and identifying three aircraft as blocked property pursuant to Executive Orders (E.O.) 14038 and 13405. The persons designated today have enabled the regime’s migrant smuggling into the European Union (EU), have taken part in the ongoing crackdown on human rights and democracy, and have propped up the regime financially. As part of today’s action, Treasury is also imposing restrictions on dealings in new issuances of Belarusian sovereign debt in the primary and secondary markets, aligning with actions recently taken by allies and partners. These actions reaffirm the U.S. government’s commitment to impose costs on the Lukashenka regime for enabling corruption, human rights abuses, inhumane exploitation of vulnerable people and orchestration of irregular migration, and attacks against democratic freedoms and international norms.

“The United States stands alongside its international partners and allies in imposing costs on the Lukashenka regime for its deplorable behavior, including migrant smuggling,” said Director of the Office of Foreign Assets Control Andrea M. Gacki. “Treasury will continue to work with the international community to address the Lukashenka regime’s repression, corruption, and flaunting of internationally recognized human rights.”

Today’s action comprises Treasury’s fifth tranche of Belarus-related sanctions since the fraudulent August 9, 2020 presidential election in Belarus. It continues the U.S. government’s coordinated, international effort with its transatlantic partners to hold the Lukashenka regime to account. This action is being taken in coordination with the EU, the United Kingdom (UK), and Canada and reflects the United States’ commitment to acting with its allies and partners to demonstrate a broad unity of purpose. As noted in Treasury’s recent sanctions review, sanctions are most effective when coordinated where possible with allies and partners who can magnify the economic and political impact.

IMPOSING SOVEREIGN DEBT RESTRICTIONS ON BELARUS

As part of today’s action, OFAC is issuing a new Belarus-related directive to hold the Lukashenka regime accountable for its actions and align with recent actions by U.S. partners and allies. Directive 1 under E.O. 14038 prohibits transactions in, provision of financing for, or other dealings by U.S. persons or within the United States in new debt with a maturity of greater than 90 days issued on or after December 2, 2021 by the Ministry of Finance of the Republic of Belarus or the Development Bank of the Republic of Belarus. OFAC determined that the Ministry of Finance of the Republic of Belarus and the Development Bank of the Republic of Belarus, which are involved in the issuance of new debt for the Government of Belarus (GoB), are political subdivisions, agencies, or instrumentalities of the GoB pursuant to E.O. 14038, as described in Directive 1 under E.O. 14038. OFAC is providing additional public guidance on the scope and implications of Directive 1 under E.O. 14038 through the issuance of several Frequently Asked Questions (939, 940, 941, 942, 943, 944, 945, 946, 947, and 948) available on the Treasury website.

Since June 2021, partners and allies, including the EU, UK, Canada, and Switzerland, have targeted new issuances of Belarusian sovereign debt in the primary and secondary markets in an effort to hold the Lukashenka regime responsible for its ongoing malign behavior. The addition of U.S. restrictions on dealings in new issuances of Belarusian sovereign debt in the primary and secondary markets demonstrates close coordination with partners and allies to restrict the Lukashenka regime’s access to international capital markets.

TARGETING MIGRANT SMUGGLING AND VICTIMIZATION OF MIGRANTS

Since June 2021, when U.S.-sanctioned Alyaksandr Lukashenka (Lukashenka) threatened, in response to EU sanctions, to erode EU border security by allowing the trafficking of drugs and migrants, his regime has orchestrated irregular migration across its borders into neighboring EU member states Latvia, Lithuania, and Poland. The Lukashenka regime is luring migrants, including many families with small children, to travel to Belarus by coordinating the issuance of visas, increasing flights from the Middle East to Belarus, and then transporting people to the borders of EU member states. Once at the border, Belarusian officials direct and force migrants across the border to facilitate their passage into the EU. Belarusian authorities do not allow them to return to Minsk, so many migrants are now stuck at the border in Belarus, exposed to harsh winter conditions that have already claimed the lives of at least a dozen vulnerable individuals.

Republican Unitary Enterprise Tsentrkurort (Tsentrkurort), Belarus’s state-owned tourism company, has played a key role in orchestrating irregular migration via Belarus to the EU. Tsentrkurort is being designated pursuant to E.O. 14038 for being owned or controlled by, directly or indirectly, the GoB. In addition, OFAC is designating seven GoB officials who hold leadership positions in the Belarusian State Border Committee, the state body responsible for border security and policy. Those officials are: Chairman Anatol Lapo; Deputy Chairmen Ihar Butkevich, Raman Podlineu, Ihar Pechan, and Siarhei Novikau; and the heads of two border groups responsible for sections of the border with the EU, Konstantin Molostov and Igor Gutnik. Each of these officials is being designated pursuant to E.O. 14038 for being or having been an official of the GoB.

BELARUSIAN STATE-OWNED CARGO CARRIER

OFAC is also designating JSC Transaviaexport Airlines (Transaviaexport), a GoB-controlled cargo carrier in Belarus that has shipped thousands of tons of ammunition and weapons to foreign conflict zones, such as in Libya. Transaviaexport is being designated for operating or having operated in the transportation sector of the economy of Belarus and for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, the GoB. Two aircraft, EW-78843 and EW-78779, are being identified as property in which Transaviaexport has an interest.

DESIGNATIONS IN THE DEFENSE AND SECURITY SECTORS

OFAC is designating five entities that either produce or export Belarusian defense materials and supply funds to the Lukashenka regime. The Belarusian defense industry focuses on the development and production of military radio-electronics, optics and optical electronics (including for use in satellites), chassis for missile systems, and software for military information systems and weapons control systems. Most of the Belarusian defense industry’s profits go toward the state budget and are not reinvested in the industry itself.

CJSC Beltechexport (Beltechexport) is an authorized state special exporter in Belarus and an integral part of the Belarusian defense industry. Closely associated with the Belarusian Ministry of Defense, Beltechexport exports weapons and military equipment produced by Belarusian state-owned enterprises (SOEs) worldwide. Beltechexport is a direct participant in establishing military-technical cooperation between Belarus and other countries, thereby providing ongoing financial and economic support to the GoB. Beltechexport is being designated pursuant to E.O. 14038 for operating or having operated in the defense and related materiel sector of the economy of Belarus. The EU and UK sanctioned Beltechexport in December 2020.

AGAT Electromechanical Plant OJSC (AGAT) and Joint Stock Company 140 Repair Plant (140 Repair Plant) are SOEs that produce special purpose equipment for Belarusian military and law enforcement agencies. In particular, AGAT’s riot control barrier system and 140 Repair Plant’s armored vehicles were deployed against peaceful demonstrators after the fraudulent August 2020 presidential election in Belarus. AGAT and 140 Repair Plant are being designated pursuant to E.O. 14038 for being owned or controlled by, or having acted for or on behalf of, directly or indirectly, the GoB. The EU and UK sanctioned AGAT and 140 Repair Plant in December 2020.

Kidma Tech OJSC (Kidma Tech) and JSC Peleng (Peleng) are key firms in the Belarusian defense industry. Kidma Tech — formerly known as BSVT–New Technologies until a recent rebranding — produces and exports defense equipment, including surveillance systems, on behalf of the Lukashenka regime. Peleng, an SOE, not only manufactures defense products but also produces equipment for forensic, security, and surveillance systems. Kidma Tech and Peleng are being designated pursuant to E.O. 14038 for operating or having operated in the defense and related materiel sector of the Belarus economy. Peleng is also being designated pursuant to E.O. 14038 for operating or having operated in the security sector of the Belarus economy.

OOO Gardservis (Gardservis) is the first government-backed security force to be established within Belarus and has ties to both the Lukashenka regime and U.S.-designated Aliaksey Aleksin. Gardservis derives its right to own military weapons and provide security services in Belarus from an order signed by Lukashenka himself in 2020. Gardservis is being designated pursuant to E.O. 14038 for operating or having operated in the security sector of the Belarus economy.

INCREASED SANCTIONS ON THE POTASH SECTOR OF THE BELARUS ECONOMY

OFAC is designating additional entities to limit the financial benefits that the Lukashenka regime derives from potash exports. These designations follow OFAC’s August 9, 2021 designation of the major potash entity in Belarus, the Belarusian SOE Belaruskali OAO.

Open Joint Stock Company Belarusian Potash Company (BPC) handles the trading and exportation of potash for Belaruskali OAO. Owned by multiple Belarusian SOEs, including Belaruskali OAO, BPC is a key facilitator of Belarus potash exports worldwide. BPC is being designated pursuant to E.O. 14038 for operating or having operated in the potash sector of the economy of Belarus. In addition, BPC subsidiary Agrorozkvit LLC (Agrorozkvit) is being designated pursuant to E.O. 14038 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, BPC.

In addition, OFAC is issuing Belarus General License 5 (GL 5) to provide U.S. persons approximately 120 days in which to wind down transactions involving BPC or Agrorozkvit, or any entity in which BPC or Agrorozkvit owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest, including the wind down of such transactions in which Belaruskali OAO has a property interest.

Another potash company that provides revenue to the Lukashenka regime is Foreign Limited Liability Company Slavkali (Slavkali), which produces potash fertilizers in Belarus. Slavkali is currently constructing a mining facility that is the largest investment project in Belarus. Slavkali is being designated pursuant to E.O. 14038 for operating or having operated in the potash sector of the economy of Belarus.

As part of the designation of Slavkali, OFAC is identifying a luxury helicopter, EW-001PH, as property in which Slavkali has an interest. Painted in the colors of the Belarusian flag with the state seal emblazoned on the seats, EW-001PH was purchased by and is owned by Slavkali and has been used to ferry Lukashenka between his suburban residence and Minsk.

ADDITIONAL BELARUSIAN OFFICIALS

Security Officials Involved in the GoB’s Continued Crackdown

To continue to expose and pressure those repressing civil society in Belarus, OFAC is designating ten senior officials of the Main Directorate for Combating Organized Crime and Corruption of the MVD of the Republic of Belarus (GUBOPiK): its head, Andrey Parshin; deputies Oleg Larin, Denis Chemodanov¸ and Mikhail Bedunkevich; and divisional leaders Vasiliy Sysoyev, Dmitriy Kovach, Aleksandr Zhivlyuk¸ Andrei Makarevich, Vladimir Vashkevich, and Aleksandr Alyoksa. OFAC designated GUBOPiK on June 21, 2021, pursuant to E.O 13405 for being responsible for, or having participated in, actions or policies that undermine democratic processes or institutions in Belarus. GUBOPiK and its members have physically suppressed and detained participants in peaceful protest actions preceding and following the fraudulent 2020 presidential election in Belarus.

All ten GUBOPiK officials are being designated pursuant to E.O. 14038 for being or having been an official of the GoB.

Officials Closely Linked to the Lukashenka Family

OFAC is designating Alyaksandr Lukashenka’s middle son Dzmitry Lukashenka (Dzmitry) pursuant to E.O. 13405 for being a senior-level official, a family member of such an official, or a person closely linked to such an official who is responsible for or has engaged in public corruption related to Belarus. Dzmitry’s older brother Viktar and father Alyaksandr have been sanctioned since 2006 when they were included in the Annex to E.O. 13405. In addition, OFAC is designating the Republican State-Public Association Presidential Sports Club (Presidential Sports Club), which Dzmitry leads. The Presidential Sports Club is part of an alleged corruption scheme in Belarus. The Presidential Sports Club is being designated pursuant to E.O. 13405 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, Dzmitry. The EU sanctioned Dzmitry in June 2021.

Dmitriy Mikhaylovich Korzyuk (Korzyuk) is the Deputy Minister of Internal Affairs and the former head of the State Traffic Safety Inspectorate. Korzyuk is a close associate of Viktar Lukashenka and Dzmitry Lukashenka. Korzyuk is being designated pursuant to E.O. 14038 for being or having been an official of the GoB.

A member of the executive committee of the National Olympic Committee of the Republic of Belarus (Belarusian NOC), which OFAC designated on August 9, 2021, Dzmitriy Yurievich Baskau (Baskau) resigned from his position in charge of the Belarusian Ice Hockey Federation after the International Ice Hockey Federation suspended him in September 2021 for allegedly threatening Belarusian athletes for their political views. Soon thereafter, Alyaksandr Lukashenka, praising Baskau’s loyalty, appointed him to Belarus’s upper legislative chamber, the Council of the Republic. Baskau coaches Lukashenka’s youngest son, Mikalay, as well as Lukashenka’s presidential hockey team, and has long benefited from his connections to and public support for the Lukashenka regime and family. Baskau, alongside Dzmitry Shakuta, whom OFAC designated on August 9, 2021, is also alleged to have been involved in the murder of Belarusian opposition activist and children’s art teacher Raman Bandarenka in November 2020. Baskau is being designated pursuant to E.O. 14038 for being or having been an official of the GoB and for being or having been a leader, official, senior executive officer, or member of the board of directors of the Belarusian NOC.

SANCTIONS IMPLICATIONS

As a result of Treasury’s actions, 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. OFAC’s regulations generally prohibit all dealings by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of blocked or designated persons. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked.

View more information on the individuals and entities designated today.

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