Markets Wired

New analysis demonstrates that state and local aid fueled national economic recovery from the COVID-19 crisis

WASHINGTON – Today, to mark the third anniversary of President Biden’s American Rescue Plan (ARP) Act, the U.S Department of the Treasury is releasing new data illustrating that this historic legislation supported both immediate pandemic recovery and long-term economic growth. By stabilizing our economy and tackling longstanding challenges, the ARP catalyzed investments in community development that will extend well beyond the deployment of federal resources, and laid the foundation for other historic investments in our nation’s economic future, such as the Bipartisan Infrastructure Law, CHIPS and Science Act, and Inflation Reduction Act.

“When President Biden’s American Rescue Plan passed three years ago, our country was in the depths of a pandemic, with millions of Americans out of work,” said Secretary of the Treasury Janet L. Yellen. “Our decisive action contributed to an economic recovery that has been historically fast and inclusive. Today, communities nationwide continue to use resources unlocked by President Biden’s legislation to support American workers and families. The American Rescue Plan also laid the foundation for our long-term economic agenda, which will fuel growth and expand opportunity for years to come.”

Following enactment of the ARP in March 2021, the Treasury Department oversaw a historic and unprecedented provision of federal assistance to struggling Americans, including delivering more than 150 million Economic Impact Payments within the first few weeks following the American Rescue Plan’s passage; providing emergency rental assistance to prevent evictions across the country; issuing the first ever monthly payments of the Child Tax Credit which supported tens of millions of families; and rapidly distributing assistance from the State and Local Fiscal Recovery Funds (SLFRF) program directly to communities to help local leaders avoid service reductions including job cuts, address local needs, and support a rapid, resilient, and equitable recovery. Today, GDP growth is strong, inflation has declined significantly, there are four million more jobs than before the pandemic, unemployment is near historic lows, wages are up, and wage gains have been broadly shared.

Alongside new data illustrating the status and impact of various ARP programs and initiatives, the Treasury Department is releasing a new analysis demonstrating why strong state and local economies are vital for a strong national economy. For instance, state and local governments provide most of the nation’s public services, including schools, public safety, and local transit; contribute almost 15% to the national GDP; and employ 13% of the total U.S. workforce. The analysis found that, in the years following the Great Financial Crisis of 2007-2009, declining state and local economies were a drag on the national economy and contributed to years of underinvestment which affected communities across the nation. In contrast, by providing financial support during and following the COVID-19 crisis, the Biden-Harris Administration prevented state and local government collapse and continues to put state and local governments in a robust position going forward, strengthening our national economy.

In three years, the American Rescue Plan:

Delivered direct and flexible aid to over 30,000 state, local, Tribal, and territorial governments

• Governments have used SLFRF award funds not only to prevent cuts in government services and respond to the immediate health and economic consequences of the pandemic, but also to make much-needed investments to strengthen their economies and their communities over the long-run.
• To date, communities across the country have budgeted more than $12 billion for more than 6,300 projects addressing public health needs; $18.5 billion for nearly 3,000 projects to meet housing needs, including $7 billion committed to affordable housing development and preservation; nearly $13 billion for more than 4,300 projects to support workers; $5 billion for over 1,500 small business assistance projects; and $32.8 billion for over 13,000 critical infrastructure projects in broadband, water, and sewer.
• Over 99.9% of the $350 billion in SLFRF funds has been delivered into the hands of nearly every state, local, Tribal, and territorial government in the country, and states and the largest cities and counties have reported budgeting 88% of their total SLFRF funds to specific projects.

Funded projects that will connect over 2 million families and businesses to affordable, high-speed internet and help close the digital divide

• Through ARP’s Capital Projects Fund (CPF), Treasury has awarded more than $9.2 billion for broadband, digital technology, and multi-purpose community center projects in all states and the District of Columbia, which these states estimate will reach over two million locations with improved internet access. In addition, hundreds of thousands of individuals will be served annually by multi-purpose community facilities and digital technology programs. An additional $78 million in CPF awards have gone to 440 Tribal governments.
• In addition to the $10 billion provided by the CPF program, many governments are putting a portion of their SLFRF awards toward meeting the Biden-Harris Administration’s goal of connecting every American household to affordable, reliable high-speed internet. Through September 2023, SLFRF recipients budgeted more than $8 billion in SLFRF funds.

Made over 12.3 million payments to help families avoid eviction and helped over 450,000 families avoid foreclosure

• The Emergency Rental Assistance (ERA) program – expanded and extended by the ARP – has made over 12.3 million payments to families at risk of eviction. Research from the U.S. General Services Administration has found that ERA funds were more likely to reach those with the lowest incomes, and especially those who were most likely to otherwise be at risk of eviction. Based on reported data, more than 60% of these funds have gone to communities of color, and more than 66% have gone to female-headed households.
• More than 450,000 homeowners at risk of losing their homes received assistance through the Homeowner Assistance Fund (HAF) program. In total, $5.9 billion, more than half of all funds available through the HAF recipients’ programs, have now been spent.
• The data also show HAF recipients continue to reach a higher proportion of economically vulnerable and traditionally underserved homeowners than previous federal mortgage assistance efforts. Through September 2023, 55% of HAF assistance was delivered to very low-income homeowners, 40% of homeowners assisted self-identified as Black, 20% self-identified as Latino, and 63% self-identified as female.

Launched small business assistance programs that will aid up to 100,000 small businesses

• The ARP reauthorized and funded the State Small Business Credit Initiative (SSBCI), providing nearly $10 billion to state, Tribal, and territorial governments to expand access to capital and invest in job-creating opportunities, with a focus on underserved communities.
• The Treasury Department has announced the approval of state, territory, and Tribal government plans corresponding to more than $8.4 billion in funding under the SSBCI Capital Program to support small business and entrepreneurship and expand access to capital. These resources are designed to catalyze up to $10 of private investment for every $1 of SSBCI capital funding, and are expected to support tens of billions of dollars in new small business financing and up to 100,000 small businesses over the next decade.
• In addition to the SSBCI Capital Program, the Treasury Department has announced more than $108 million of awards through the SSBCI Technical Assistance Grant Program, which will provide vital aid to help small businesses become “capital ready” by preparing them to take on loans or investment and steward capital for small business success. And in 2023, the Treasury announced a new $75 million competitive grant program, the Investing in America Small Business Opportunity Program, under SSBCI to support technical assistance for very small and underserved businesses.
• The Treasury Department also transferred $125 million in SSBCI funding to the Minority Business Development Agency to support the Capital Readiness Program to help minority and other underserved entrepreneurs grow and scale their businesses.
• Programs like SSBCI are key to the Biden-Harris Administration’s strategy to strengthen the small business creation seen since the start of this Administration by expanding access to capital and customers, and by providing entrepreneurs the resources they need to succeed. The Department’s work has also helped these funds reach traditionally underserved entrepreneurs and small businesses that will ensure the small business boom grows the economy in communities that were disproportionately harmed by the pandemic. The United States is on track to have the three strongest years in history for new small business applications, and Black business ownership has grown at the fastest pace in 30 years.

Delivered the largest single infusion of federal funding support to Tribal nations in U.S. history for pandemic recovery and economic development

• The ARP included over $30 billion for Tribal governments, including $20 billion from the SLFRF program – the largest single infusion of federal funding into Indian Country in U.S. history. To date, Tribes have used funds for over 4,700 projects and services with public health, housing, and infrastructure-related investments representing the biggest categories.
• At the White House Tribal Nations Summit in December, the Treasury Department released a report detailing how SLFRF, HAF, and ERA1 programs helped homeowners and renters in Tribal communities avoid foreclosure and eviction, stabilized housing markets in Indian Country and surrounding regions, and strengthened local and national economies.

###

WASHINGTON – The Financial Stability Oversight Council (FSOC) in partnership with the Brookings Institution, will host a two-day conference on Artificial Intelligence (AI) and Financial Stability. AI in financial services has grown rapidly. Innovations in AI can offer many benefits, such as reducing costs and improving efficiencies, but they can also introduce or exacerbate risks to the financial system. This conference will be an opportunity for the public and private sectors to convene to discuss potential systemic risks posed by AI in financial services, to explore the balance between encouraging innovation and mitigating risks, and to share insights on effective oversight of AI-related risks to financial stability.

The first day of the conference will be held at the U.S. Department of the Treasury on June 6, 2024, and the second day of the conference will be held at the Brookings Institution on June 7, 2024. A live webcast of the conference will be available to the public. More details can be found on the Treasury website here.

###

WASHINGTON — Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on 16 entities and individuals who compose an expansive business network spanning the Horn of Africa, the United Arab Emirates (UAE), and Cyprus that raises and launders funds for al-Shabaab, a terrorist group affiliated with al-Qa’ida.  Individuals within this network include influential businesspeople in the region that lend financial backing to al-Shabaab, a terrorist group responsible for some of the worst terrorist attacks in East Africa’s modern history.  These attacks have claimed the lives of thousands of innocent civilians.  These individuals and entities are being designated pursuant to Executive Order (E.O.) 13224, as amended, which targets terrorist groups and their enablers.    

“The United States is committed to working with regional partners to root out terror financing networks and the entities they abuse to raise and move funds,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “Today’s action is part of a multifaceted effort by Treasury to support the Somali government’s economic offensive against al-Shabaab—one of three pillars in their campaign to degrade this deadly terrorist group.” 

Al-Shabaab generates over $100 million per year by extorting local businesses and individuals, as well as through the financial support of affiliated businesspeople.  The threat posed by al-Shabaab is not limited to Somalia.  Al-Shabaab’s revenues are disbursed to other al-Qa’ida-supported groups worldwide and help fund al-Qa’ida’s global ambitions to sow discord and undermine good governance.  This action continues Treasury’s efforts to disrupt al-Shabaab’s abuse of the regional financial system and builds on OFAC’s October 2022 designation of a network of al-Shabaab financial facilitators who served as key interlocutors between al-Shabaab and local businesses in Somalia.  

AL-SHABAAB MONEY LAUNDERERS IN THE UAE AND EASTERN AFRICA

The network of individuals and entities designated today have been involved in the raising and laundering of millions of dollars through several businesses at the direction and in the interest of al-Shabaab.

Dubai-based Haleel Commodities L.L.C., also known as Haleel Group, is a key financial facilitator for al-Shabaab, which relies on the leaders of Haleel Group, as well as its branches and subsidiaries in Somalia, Kenya, Uganda, and Cyprus to generate and launder funds.  Haleel Group’s subsidiaries in Cyprus include Haleel Finance LTD, Haleel Holdings, and Haleel LTD; the group also has branches in Kenya (Haleel Commodities Limited) and Uganda (Haleel Commodities LTD) and operates as Haleel Electronics in Somalia. 

UAE-based Qemat Al Najah General Trading has served as an important money laundering node in the network, and helped  manage and transfer funds for al-Shabaab in connection with Haleel Group.

Kenya-based Faysal Yusuf Dini (Dini) is an al-Shabaab financial facilitator who leverages Haleel Group and some of its leadership to transfer funds on behalf of al-Shabaab.  He also works closely with Kenya-based Mohamed Jumale Ali Awale (Awale) to plan investment projects and money laundering activities.  This includes managing al-Shabaab funds laundered through investment projects and companies, including through Kenya-based Crown Bus Services.  Crown Bus Services has also supported al-Shabaab’s logistical operations. 

Hassan Abdirahman Mahamed, a Finland-based Somali citizen, uses money transfer and hawala businesses to support al-Shabaab’s money laundering operations linked to the network of Haleel Group and Qemat Al Najah General Trading.  UAE-based Mohamed Artan Robel is another member of this money laundering network supporting al-Shabaab through the Haleel Group and Qemat Al Najah General Trading.  Abdikarin Farah Mohamed is a Somalia-based key member of this money laundering network. 

Farhan Hussein Hayder (Hayder) directs and manages Haleel Group’s branches in Kenya, Uganda, Cyprus, and the UAE, and supports al-Shabaab by generating funds for the group through these businesses. 

A notable part of this network is active in Uganda.  Specifically, Abdulkadir Omar Abdullahi (Abdullahi), is associated with Haleel Group’s Uganda branch as its director, along with Omar Sheikh Ali Hilowle (Hilowle) and Hayder.  In his role, Abdullahi has managed and transferred funds for al-Shabaab. 

Farhan Hussein Hayder, Mohamed Jumale Ali Awale, Abdulkadir Omar Abdullahi, and Qemat Al Najah General Trading are being designated pursuant to E.O. 13224, as amended, for having acted or purported to act for or on behalf of, directly or indirectly, al-Shabaab, a person whose property is and interest in property are blocked pursuant to E.O. 13224. 

Faysal Yusuf Dini, Omar Sheikh Ali Hilowle, Abdikarin Farah Mohamed, and Mohamed Artan Robel are being designated pursuant to E.O. 13224, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, al-Shabaab, a person whose property and interest in property are blocked pursuant to E.O. 13224. 

Hassan Abdirahman Mahamed is being designated pursuant to E.O. 13224, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Haleel Commodities L.L.C., a person whose property and interest in property are blocked pursuant to E.O. 13224, as amended.

UAE-based Haleel Commodities L.L.C., is being designated pursuant to E.O. 13224, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, al-Shabaab, a person whose property and interest in property are blocked pursuant to E.O. 13224.

Cyprus-based Haleel Finance LTD, Haleel Holdings, and Haleel LTD are being designated pursuant to E.O. 13244, as amended, for being owned, controlled, or directed by, directly or indirectly, Haleel Commodities L.L.C., a person whose property and interest in property are proposed to be blacked pursuant to E.O. 13224, as amended.

Kenya-based Haleel Commodities Limited and Crown Bus Services are being designated pursuant to E.O. 13244, as amended, for being owned, controlled, or directed by, directly or indirectly, Mohamed Jumale Ali Awale, a person whose property and interest in property are proposed to be blacked pursuant to E.O. 13224, as amended.

Uganda-based Haleel Commodities LTD is being designated pursuant to E.O. 13244, as amended, for being owned, controlled, or directed by, directly or indirectly, Farhan Hussein Hayder, a person whose property and interest in property are proposed to be blacked pursuant to E.O. 13224, as amended.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the individuals and entities named above, and of any entities that are owned, directly or indirectly, 50 percent or more by them, individually, or with other blocked persons, that are in the United States or in the possession or control of U.S. persons must be blocked and 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 designated or blocked persons.  

Furthermore, engaging in certain transactions with the individuals designated today entails risk of secondary sanctions pursuant to E.O. 13224, as amended.  Pursuant to this authority, OFAC can prohibit or impose strict conditions on the opening or maintaining in the United States of a correspondent account or a payable-through account of a foreign financial institution that knowingly conducted or facilitated any significant transaction on behalf of a Specially Designated Global Terrorist.

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

View identifying information related to today’s action.

###

WASHINGTON – Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two companies – one in Russia and one in the Central African Republic (CAR) – for their efforts in advancing Russia’s malign activities in CAR. Today’s targets have played an important role enabling the Private Military Company ‘Wagner’ (Wagner Group) and, by extension, the activities of the Russian Federation. Those designated sought monetary gain from illicit natural resource extraction and provided material and financial support to the Wagner Group and other organizations associated with the enterprise of Yevgeniy Prigozhin, the former Wagner Group owner who died in August 2023 in a plane explosion in Russia.  

“Russia has sought to leverage these Wagner-affiliated companies in its efforts both to secure additional revenue from abroad and to advance its interests in Africa, often at the expense of the host countries, their institutions, and their citizens,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “The United States remains focused on disrupting the networks that enable Russia’s illicit and destabilizing activities in Africa.” 

OFAC’s designation of Bois Rouge and Broker Expert would not have been possible without the cooperation and support of Homeland Security Investigations.

PRIGOZHIN ENTERPRISE COMPANIES

Bois Rouge SARLU (Bois Rouge), a.k.a. Wood International Group SARLU, is a Bangui, CAR-based timber company. Established in 2019, Bois Rouge is just one of many Prigozhin-associated companies operating in CAR, which constitutes a vast malign network spanning the spectrum of CAR’s political, economic, and information sectors. Like other Prigozhin-associated companies in CAR, Bois Rouge received a natural resources concession in exchange for the services the Wagner Group provided in CAR. Bois Rouge acquired a timber permit in early 2021 around the same time Wagner Group mercenaries, in conjunction with CAR military forces, seized control of the corresponding area from rebels opposed to the CAR government. This land is in CAR’s Lobaye prefecture, which is part of the Congo Basin and contains some of the largest undeveloped tracks of rainforest in the world. Bois Rouge has since exported tropical timber species, such as azobe, iroko, mukulungu, sapeli, and tali, to buyers in China, the Middle East, Europe, and Central Asia. In 2022, Bois Rouge’s name changed to Wood International Group SARLU. 

Limited Liability Company Broker Expert (Broker Expert) is a St. Petersburg, Russia-based company with a lengthy track record of supporting Prigozhin’s exploits throughout Africa. Broker Expert has exported goods to several Prigozhin-associated companies, including dozens of shipments to Bois Rouge in CAR, multipurpose vehicles to U.S.-designated Meroe Gold Co. LTD. in Sudan, and helmets to Wagner Group forces in Ukraine. Moreover, Prigozhin’s enterprise had used Broker Expert, among other companies, to regularly move cash to fund malign activities. For example, in Madagascar, a Prigozhin-associated company involved in a joint mining venture with a Malagasy state-owned enterprise received funds from Broker Expert. 

OFAC designated Bois Rouge pursuant to Executive Order (E.O.) 14024 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, the Wagner Group. OFAC designated Broker Expert pursuant to E.O. 14024 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of Bois Rouge. 

THE WAGNER GROUP 

The United States has sanctioned numerous entities and individuals globally that support the Wagner Group and other Russian private military companies. The Wagner Group has committed widespread human rights abuses and has appropriated natural resources across multiple countries in Africa. A proxy military force of the Kremlin, the Wagner Group has carried out combat operations around the world, including in Russia’s brutal war in Ukraine. Wagner has also participated in a scheme to procure weapons for its operations in Ukraine, using false end-use certificates in Mali.

On June 20, 2017, OFAC designated the Wagner Group pursuant to E.O. 13660 for being responsible for or complicit in, or having engaged in, directly or indirectly, actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine, and on November 15, 2022, the Department of State redesignated the Wagner Group pursuant to E.O.14024 for operating or having operated in the defense and related materiel sector of the Russian Federation economy. The Wagner Group has also been sanctioned by Australia, Canada, Japan, the United Kingdom, and the European Union.

On January 26, 2023, OFAC redesignated the Wagner Group pursuant to E.O. 13581, as amended by E.O. 13863, for being a foreign person that constitutes a significant transnational criminal organization. Wagner Group personnel have engaged in an ongoing pattern of serious criminal activity, including mass executions, rape, child abductions, and other brutalities against innocents in the CAR and Mali. On the same day, OFAC designated the Wagner Group pursuant to E.O. 13667 for being responsible for or complicit in, or having engaged in, the targeting of women, children, or any civilians through the commission of acts of violence, or abduction, forced displacement, or attacks on schools, hospitals, religious sites, or locations where civilians are seeking refuge, or through conduct that would constitute a serious abuse or violation of human rights or a violation of international humanitarian law in relation to the CAR.

SANCTIONS IMPLICATIONS

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

In addition, financial institutions and other persons that engage in certain transactions or activities with the sanctioned entities and individuals may expose themselves to sanctions or be subject to an enforcement action. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any designated person, or the receipt of any contribution or provision of funds, goods, or services from any such person. 

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

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

###

FIO expects to begin receiving data this summer

 

WASHINGTON – Today, the U.S. Department of the Treasury’s Federal Insurance Office (FIO) advanced its efforts to collect insurance data to better understand the impacts of climate-related financial risks on the insurance sector, by launching a first-of-its kind collaboration with state insurance regulators and the National Association of Insurance Commissioners (NAIC). This FIO and NAIC collaboration represents the next step of FIO’s efforts that were first publicly announced over one year ago.

The NAIC will be collecting, on behalf of participating state insurance regulators, ZIP Code-level data from the largest homeowners insurers. FIO will be closely coordinating with the NAIC as the NAIC shares granular information with FIO in the coming months. FIO will use this data to conduct a nationwide assessment of climate-related financial risks to consumers across the United States. 

“Americans across the country are seeing the affordability and availability of their insurance policies decline as a result of increasingly severe climate-related disasters,” said Secretary of the Treasury Janet L. Yellen. “I’m pleased that the Federal Insurance Office, state insurance regulators, and the NAIC are collaborating on this important data collection. Analysis of homeowners insurance data is essential to understanding the market impacts on consumers and helping policymakers across the country respond appropriately to the risks.” 

FIO previously proposed to collect climate-related data directly from insurance companies, as approved by the Office of Management and Budget earlier this year. In light of the agreement by the NAIC and state insurance regulators to provide FIO with timely data comparable to its proposed collection, and to help mitigate reporting burdens on relevant insurance companies, FIO will pursue its efforts as part of the data collection collaboration with the NAIC rather than issue  its own separate data collection at this time.

The NAIC and FIO have agreed that the NAIC will begin sending the data to FIO in June 2024, shortly after the close of the NAIC data collection. The NAIC has agreed to provide FIO with final data in late September.

FIO’s analysis of the data received will help respond to President Biden’s Executive Order on Climate-related Financial Risk, EO 14030 (May 20, 2021), which called on FIO to “assess, in consultation with States, the potential for major disruptions of private insurance coverage in regions of the country particularly vulnerable to climate change impacts.” The data analysis will also advance FIO’s statutory mandates, including to monitor the extent to which traditionally underserved communities and consumers, minorities, and low- and moderate-income persons have access to affordable insurance products and to monitor all aspects of the insurance industry. FIO’s work to monitor the nationwide insurance industry complements the work of the states, which are the primary regulators of the insurance industry.

More information on the state insurance regulator data collection that will be shared with FIO is available here. Separately, more information on FIO’s analysis is available through a Federal Register notice issued in November 2023 requesting public comment on the proposed FIO data collection. For more information on FIO, see About FIO.

 

### 

PUNTA CANA – The United States hosted a meeting of the Finance Track of the Americas Partnership for Economic Prosperity on the sidelines of the Inter-American Development Bank (IDB) Annual Meetings in Punta Cana, Dominican Republic.  The meeting was chaired by Treasury Assistant Secretary for International Trade and Development Alexia Latortue and Special Presidential Advisor for the Americas Chris Dodd.  IDB President Ilan Goldfajn; Barbados Prime Minister Mia Amor Mottley; Finance Ministers from Colombia, Costa Rica, Dominican Republic, Ecuador, Panama, Peru, and Uruguay; and representatives from Canada, Chile, and Mexico attended.

During the meeting, Assistant Secretary Latortue updated Americas Partnership countries on progress made in the Finance Track, including the approval of a capital increase for IDB Invest and a new Institutional Strategy for the IDB Group.  Special Presidential Advisor Dodd spoke to President Biden’s commitment to the Americas Partnership and the importance of the joint U.S.-IDB financing initiatives he announced at the Leaders’ Summit on November 3, 2023.  Discussions with Finance Ministers centered on the supply chain competitiveness plans that are being developed in conjunction with the IDB.  These plans aim to develop and strengthen hemispheric supply chains that will improve regional integration, boost supply chain security, and create quality jobs across the region. 

President Biden launched the Americas Partnership as a forum for bolstering regional competitiveness and mobilizing high-standard investment in our hemisphere.  Along with the United States, inaugural Americas Partnership countries include Barbados, Canada, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico, Panama, Peru, and Uruguay.

###
 

As Prepared for Delivery

Vice Chancellor Habeck, thank you for joining me here at Treasury, to discuss areas of shared importance for the United States and Europe. 

Our conversation will be wide-ranging, but, in particular, I want to highlight our mutual work to help Ukraine defend itself against Russia’s brutal invasion.  

In addition to the EU’s approval for 50 billion euros in economic aid for Ukraine, EU member states like Germany are also our partners in providing Ukraine bilateral security, economic, and humanitarian support.

Germany has also been a key partner in the effort to impose increasing costs on Russia through sanctions coordination, including the price cap. And our coalition has continued to advance our goals of reducing Russia’s revenue while keeping Russian oil markets stable. 

At the same time, we need to remain vigilant to ensure that Russia cannot acquire the sensitive goods it needs to continue its war efforts. It is imperative that we work with our industry—and our financial sectors—to clamp down on these goods making their way to Russia. We need to enforce our sanctions and export controls at home while we close down transshipment through permissive third countries.

As Congress gathers for the President’s State of the Union address tonight, I once again urge Speaker Johnson to swiftly to pass the Senate’s bipartisan national security supplemental to provide Ukraine with vital military and economic assistance.   

As the House continues to stall, Russia is gaining ground and Ukraine is being forced to ration ammunition and supplies.

Last week, we witnessed the courage of thousands of Russian people who stood up to Putin and took to the streets to mourn the death of Alexei Navalny. The House must act and show the strength of the U.S support for Ukraine in the face of Putin’s aggression. 

Congressional inaction is nothing short of a gift to Putin, Iran and other adversaries that stand against America and its allies.

As I’ve said before, U.S. direct budget support for Ukraine benefits from an unprecedented level of robust oversight and transparency—an issue of great importance to Congress and the Administration—and additional support would be conditioned on Ukraine making essential reforms.

I will end with this: our transatlantic bonds are stronger than ever. Our collective response to Russia’s aggression has demonstrated the strength of our coalition. The NATO Alliance is stronger and more united than it’s ever been and we are committed to working with Germany and Europe to advance our collective security and prosperity.  

###

 WASHINGTON – Today, U.S. Deputy Secretary of the Treasury Wally Adeyemo joined energy industry leaders for a roundtable at the Edison Electric Institute’s quarterly Board of Directors meeting to discuss support for small and underserved businesses and communities, including through the Treasury Department’s vision for advancing economic opportunity through supplier and business partner diversity. During the conversation, Deputy Secretary Adeyemo highlighted how coordinated partnerships between the public and private sectors is crucial to increase business partner diversity and maximize the impact of the Biden-Harris Administration’s unprecedented investments in infrastructure, climate technology, and manufacturing. 

 At the annual Freedman’s Bank Forum in October 2023, the Treasury Department announced new efforts to expand economic opportunity for underserved businesses and communities, including a call to action of committing at least 15% of contract spend in Investing in America sectors – such as batteries, electric vehicles, semiconductors, biomanufacturing, and other clean energy industry investments – to small, disadvantaged businesses by 2025. Since passage of the Inflation Reduction Act, companies have announced more than $140 billion of investment in building America’s clean energy economy across the country. 

By dedicating at least 15% of their spend on high-margin industries, private sector companies can help expand the pool of talented suppliers in critical growth industries, bolster local and regional economies, and expand assets and economic opportunity for historically marginalized communities.  

The work of the Economic Opportunity Coalition (EOC) – a coalition of private sector companies and foundations working to make historic investments in underserved communities – has been crucial to these efforts. Also at the Freedman’s Bank Forum, the EOC announced a new goal to secure $3 billion in committed deposits in 2024 from companies for community lenders with a proven record of reaching low-income, rural, and other underserved communities. This is a 200% increase over the $1 billion goal set at Freedman’s Bank Forum in 2022 and achieved in June 2023. 

###

WASHINGTON — Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) took additional action to target shipments of Iranian commodities undertaken by the network of Iran-based, Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF)-backed Houthi financial facilitator Sa’id al-Jamal. Today’s action targets two Hong Kong- and Marshall Islands-based ship owners and two vessels for their role in shipping commodities on behalf of al-Jamal, and follows a February 27 action targeting a related vessel, the ARTURA. The revenue generated through al-Jamal’s network continues to enable Houthi militant efforts, including ongoing and unprecedented attacks on international maritime commerce in the Red Sea and Gulf of Aden.

“The IRGC-QF and the Houthis continue to rely on the illicit sale of commodities to finance their attacks on commercial shipping in the Red Sea and Gulf of Aden,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “The United States remains resolved to hold accountable those who enable these destabilizing activities.”

Today’s action is being taken pursuant to the counterterrorism authority in Executive Order (E.O.) 13224, as amended. Sa’id al-Jamal was designated pursuant to E.O. 13224, as amended, on June 10, 2021 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the IRGC-QF. The IRGC-QF was designated pursuant to E.O. 13224 on October 25, 2007 for providing support to multiple terrorist groups. The U.S. Department of State designation of Ansarallah (commonly known as the Houthis) as a Specially Designated Global Terrorist group, pursuant to E.O. 13224, as amended, became effective February 16, 2024.

IRGC-QF AND HOUTHI COMMODITIES SHIPMENTS

Palau-flagged RENEEZ, which is owned and managed by Marshall Islands-based Reneez Shipping Limited, has transported tens of thousands of metric tons of Iranian commodities for the network of Iran-based IRGC-QF-backed Houthi financier Sa’id al-Jamal. Al-Jamal’s network often uses falsified cargo documents to mask the Iran-origin cargo onboard and to obfuscate its ties to Iran and al-Jamal’s network.

Reneez Shipping Limited is being designated pursuant to E.O. 13224, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Sa’id al-Jamal. The RENEEZ is being identified as blocked property in which Reneez Shipping Limited has an interest.

The Panama-flagged ARTURA was sanctioned as part of the February 27, 2024 action for transporting Iranian commodities on behalf of al-Jamal. ARTURA falsified its Automatic Identification System (AIS) to indicate it was traveling north from Singapore while the vessel was in the process of conducting a ship-to-ship (STS) transfer with the Panama-flagged ETERNAL FORTUNE. ETERNAL FORTUNE, which is owned by Hong Kong-based Hongkong Unitop Group Ltd, also emitted a false AIS signal while receiving the STS transfer from the ARTURA.

Hongkong Unitop Group Ltd is being designated pursuant to E.O. 13224, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Sa’id al-Jamal. The ETERNAL FORTUNE is being identified as blocked property in which Hongkong Unitop Group Ltd has an interest.

SANCTIONS IMPLICATIONS

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

In addition, financial institutions and other persons that engage in certain transactions or activities with the sanctioned entities and individuals may expose themselves to sanctions or be subject to an enforcement action. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any designated person, or the receipt of any contribution or provision of funds, goods, or services from any such person. 

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

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

 

###

WASHINGTON — Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two individuals and five entities associated with the Intellexa Consortium for their role in developing, operating, and distributing commercial spyware technology used to target Americans, including U.S. government officials, journalists, and policy experts. The proliferation of commercial spyware poses distinct and growing security risks to the United States and has been misused by foreign actors to enable human rights abuses and the targeting of dissidents around the world for repression and reprisal. 

“Today’s actions represent a tangible step forward in discouraging the misuse of commercial surveillance tools, which increasingly present a security risk to the United States and our citizens,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “The United States remains focused on establishing clear guardrails for the responsible development and use of these technologies while also ensuring the protection of human rights and civil liberties of individuals around the world.” 

In advance of the third Summit for Democracy, hosted by the Republic of Korea in Seoul on March 18, 2024, this action supports the Biden-Harris Administration’s government-wide effort to counter the risks posed by commercial spyware and to establish robust protections against the misuse of such tools. Today’s designations align with steps announced in March 2023 around the second Summit for Democracy including the issuance of an Executive Order (E.O.) 14093 to Prohibit U.S. Government Use of Commercial Spyware that Poses Risks to National Security; the Joint Statement on Efforts to Counter the Proliferation and Misuse of Commercial Spyware; and the Guiding Principles on Government Use of Surveillance Technologies. This action reflects the U.S. government’s commitment to use diverse tools and authorities, including sanctions as well as export controls and visa restrictions, to counter the misuse of such sophisticated surveillance technology.   

PREDATOR SPYWARE SOLD TO CUSTOMERS AROUND THE GLOBE

Since its founding in 2019, the Intellexa Consortium has acted as a marketing label for a variety of offensive cyber companies that offer commercial spyware and surveillance tools to enable targeted and mass surveillance campaigns. These tools are packaged as a suite of tools under the brand-name “Predator” spyware, which can infiltrate a range of electronic devices through zero-click attacks that require no user interaction for the spyware to infect the device. Once a device is infected by the Predator spyware, the spyware can be leveraged for a variety of information stealing and surveillance capabilities—this includes the unauthorized extraction of data, geolocation tracking, and access to a variety of applications and personal information on the compromised device. 

The Intellexa Consortium, which has a global customer base, has enabled the proliferation of commercial spyware and surveillance technologies around the world, including to authoritarian regimes. Furthermore, the Predator spyware has been deployed by foreign actors in an effort to covertly surveil U.S. government officials, journalists, and policy experts. In the event of a successful Predator infection, the spyware’s operators can access and retrieve sensitive information including contacts, call logs, and messaging information, microphone recordings, and media from the device.    

PRESIDENTIAL DIRECTIVE TO PROMOTE ROBUST COMMERCIAL SPYWARE STANDARDS TO PROTECT NATIONAL SECURITY AND UNIVERSAL HUMAN RIGHTS 

As described in E.O. 14093 and the White House Fact Sheet, commercial spyware has proliferated in recent years with few controls and a high risk of abuse.  A growing number of foreign governments around the world, moreover, have deployed this technology to facilitate repression and enable human rights abuses, including to intimidate political opponents and curb dissent, limit freedom of expression, and monitor and target activists and journalists. Misuse of these powerful surveillance tools has not been limited to authoritarian regimes. Democracies also have confronted revelations that actors within their systems have misused commercial spyware to target their citizens without proper legal authorization, safeguards, and oversight. 

This Presidential Directive has identified that the United States has a fundamental national security and foreign policy interest in countering and preventing the proliferation of commercial spyware that has been or risks being misused, in light of the core interests of the United States in protecting U.S. government personnel and U.S. citizens around the world; upholding and advancing democracy; promoting respect for human rights; and defending activists, dissidents, and journalists against threats to their freedom and dignity. 

To advance these interests and promote responsible use of commercial spyware, the United States has established robust protections and procedures to ensure that any U.S. government use of commercial spyware helps safeguard its information systems and intelligence and law enforcement activities against significant counterintelligence or security risks; aligns with its core interests in promoting democracy and democratic values around the world; and ensures that the U.S. government does not contribute, directly or indirectly, to the proliferation of commercial spyware that has been misused by foreign governments or facilitate such misuse.

KEY ENABLERS OF THE INTELLEXA CONSORTIUM

Tal Jonathan Dilian (Dilian) is the founder of the Intellexa Consortium, and is the architect behind its spyware tools. The consortium is a complex international web of decentralized companies controlled either fully or partially by Dilian, including through Sara Aleksandra Fayssal Hamou.   

Sara Aleksandra Fayssal Hamou (Hamou), is a corporate off-shoring specialist who has provided managerial services to the Intellexa Consortium, including renting office space in Greece on behalf of Intellexa S.A. Hamou holds a leadership role at Intellexa S.A., Intellexa Limited, and Thalestris Limited.  

Intellexa S.A. is a Greece-based software development company within the Intellexa Consortium and has exported its surveillance tools to authoritarian regimes. Intellexa S.A. was added to the Department of Commerce Entity List on July 18, 2023, for trafficking in cyber exploits used to gain access to information systems, threatening the privacy and security of individuals and organizations worldwide. 

Intellexa Limited is an Ireland-based company within the Intellexa Consortium and acts as a technology reseller and holds assets on behalf of the consortium. Intellexa Limited was added to the Department of Commerce Entity List on July 18, 2023, for trafficking in cyber exploits used to gain access to information systems, threatening the privacy and security of individuals and organizations worldwide. 

Cytrox AD is a North Macedonia-based company within the Intellexa Consortium and acts as a developer of the consortium’s Predator spyware. Cytrox AD was added to the Department of Commerce Entity List on July 18, 2023, for trafficking in cyber exploits used to gain access to information systems, threatening the privacy and security of individuals and organizations worldwide. 

Cytrox Holdings Zartkoruen Mukodo Reszvenytarsasag (Cytrox Holdings ZRT) is a Hungary-based entity within the Intellexa Consortium. Cytrox Holdings ZRT previously developed the Predator spyware for the group before production moved to Cytrox AD in North Macedonia. Cytrox Holdings ZRT was added to the Department of Commerce Entity List on July 18, 2023, for trafficking in cyber exploits used to gain access to information systems, threatening the privacy and security of individuals and organizations worldwide. 

Thalestris Limited is an Ireland-based entity within the Intellexa Consortium that holds distribution rights to the Predator spyware and acts as a financial holding company for the Consortium.   

Dilian, Hamou, Intellexa S.A., Intellexa Limited, Cytrox AD, Cytrox Holdings ZRT, and Thalestris Limited are being designated pursuant to Executive Order (E.O.) 13694, as amended by E.O. 13757, for being responsible for or complicit in, or having engaged in, directly or indirectly, cyber-enabled activities originating from, or directed by persons located, in whole or in substantial part, outside the United States that are reasonably likely to result in, or have materially contributed to, a significant threat to the national security, foreign policy, or economic health or financial stability of the United States and that have the purpose or effect of causing a significant misappropriation of funds or economic resources, trade secrets, personal identifiers, or financial information for commercial or competitive advantage or private financial gain.

SANCTIONS IMPLICATIONS

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

In addition, financial institutions and other persons that engage in certain transactions or activities with the sanctioned entities and individuals may expose themselves to sanctions or be subject to an enforcement action. Prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any designated person, or the receipt of any contribution or provision of funds, goods, or services from any such person. 

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

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

###