When Does The Capta Watermark Change For Bylaws

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US unveils CAPTA List

March 22, 2019

On March 14, 2019, the Usa Treasury Department's Part of Foreign Assets Control (OFAC) introduced the List of Foreign Financial Institutions Subject to Correspondent Account or Payable-Through Account Sanctions (the CAPTA List).  The CAPTA List identifies strange financial institutions (FFIs) that are prohibited from opening correspondent or payable-through accounts in the Usa, or for whom maintaining such an business relationship is subject to strict atmospheric condition.¹  The CAPTA List is not, however, a new sanctions authority in its ain correct. Rather, it is a new organizational construction that consolidates several existing sanctions lists and authorities.

As of March 22, 2019, the CAPTA List contains but i party: the Bank of Kunlun Co. Ltd (Bank of Kunlun), which OFAC moved to the CAPTA List from one of the CAPTA List's predecessor lists.

Sanctions authorities at present utilizing the CAPTA List

The CAPTA List will exist used to identify FFIs that are subject to correspondent and payable-through account sanctions pursuant to a range of existing U.s. sanctions programs related to Iran, Democratic people's republic of korea and Russian federation, also as the Hizballah terror organization. Some types of activity that tin trigger listing on the CAPTA Listing include the following:

Iran

• Being office of the energy, shipping or shipbuilding sectors of Iran; operating a port in Iran; or knowingly providing significant financial, material, technological or other support to, or goods or services in back up of whatsoever activity or transaction on behalf of persons that are a office of the energy, shipping or shipbuilding sectors of, or operating a port in Islamic republic of iran, or Iranian persons on OFAC's List of Particularly Designated Nationals (SDN Listing).²
• Knowingly selling, supplying or transferring a precious metal or certain materials to or from Iran, directly or indirectly.³
• Knowingly facilitating a significant fiscal transaction on behalf of certain Iranian SDNs.^iv
• FFIs knowingly facilitating the efforts of the Authorities of Iran to larn or develop weapons or delivery systems of mass destruction, or facilitating the activities of a person subject to UN fiscal sanctions against Iran.⁵
• FFIs knowingly conducting or facilitating any significant transaction with the Iranian National Oil Company (NIOC), the Naftiran Intertrade Company (NICO) or an entity owned or controlled past, or operating for or on behalf of, NIOC or NICO for the purchase or acquisition of petroleum or petroleum products from Islamic republic of iran, or for the buy or conquering of petrochemical products from Iran.⁶
• Knowingly conducting or facilitating any pregnant financial transaction involving Iran'southward automotive sector; Iranian SDNs, including NIOC and NICO; petroleum or petroleum products, or petrochemical products from Iran; or the Iranian rial.⁷

North Korea

• Knowingly conducting or facilitating whatever significant transaction on behalf of persons sanctioned nether the North Korea-related sanctions authorities, or "in connexion with trade with Democratic people's republic of korea."⁸

Russian federation

• Knowingly engaging in pregnant transactions involving sure defense- and free energy-related activities related to Russian federation, or knowingly facilitating significant financial transactions on behalf of persons sanctioned under the Russia-related sanctions authorities.

Hizballah

• Facilitating a significant transaction or providing pregnant financial services relating to Hizballah.⁹

CAPTA Listing key components

In addition to the proper name and address of the sanctioned FFI, the CAPTA List likewise details the prohibition or applicable strict status(s) and the relevant sanctions plan.  US financial institutions must comply with these measures, and, in some cases, may have to provide a study to OFAC on the closure of CAPTA List banks' contributor or payable-through accounts.¹⁰

Prior to the introduction of the CAPTA Listing, OFAC had created two divide sanctions lists to place FFIs subject to sanctions on their US correspondent and payable-through banking relationships: the List of Strange Financial Institutions Subject to Part 561 (the Part 561 List) and the Hizballah Financial Sanctions Regulations Listing (the HFSR List). The Role 561 List is now defunct, and the HFSR List was never published on OFAC's website because OFAC did not sanction whatsoever FFIs pursuant to the Hizballah Financial Sanctions Regulations.

The CAPTA List is separate from the SDN Listing. Identification on the CAPTA List does non impose a general ban on doing concern with the FFI at outcome, or any blocking (freezing) requirements.

Identification of Bank of Kunlun

As noted above, the CAPTA List currently contains only one entry, the Bank of Kunlun, which is prohibited from opening or maintaining a contributor or payable-through account at a U.s. fiscal institution. OFAC sanctioned the Bank of Kunlun on July 31, 2012, pursuant to the Iranian Financial Sanctions Regulations for providing "pregnant financial services to more than than vi Iranian banks that were designated past the United States in connectedness with Iran's weapons of mass devastation programs or its back up for international terrorism."¹¹ Until March 14, 2019, when OFAC established the CAPTA Listing, the Bank of Kunlun was identified on the Part 561 List.

Looking ahead

The introduction of the CAPTA List does not, in itself, create a new sanctions authority or expand any existing authority. The CAPTA List does, nonetheless, consolidate several existing lists and, every bit a event, should be incorporated into sanctions screening and compliance programs.

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1. Depending on the specific sanctions potency, such strict conditions may include measures such every bit the prohibition or brake on whatever provision of trade finance through the US contributor or payable-through account of a sanctioned FFI, or monetary limits on, or limits on the book of, transactions that may exist candy through the United states correspondent or payable-through business relationship of the sanctioned FFI.↩
2. Iran Freedom and Counter Proliferation Act of 2012, 22 U.S.C. 8801 et seq. § 1244 (IFCA).↩
3. IFCA, at § 1245.↩
4. IFCA, at § 1247.↩
5. 31 C.F.R. 561.201. ↩
6. 31 C.F.R. 561.204.↩
7. Exec. Lodge 13846 (Aug. 6, 2018).↩
8. 31 C.F.R. 510.210.↩
9. 31 C.F.R. 566.201.↩
10. For example, Section 510.211 of the North korea Sanctions Regulations includes a reporting requirement pursuant to which a US financial establishment that maintained a correspondent or payable-through account for an FFI whose name is added to the CAPTA Listing must file a written report with OFAC that provides full details on the endmost of each such account inside thirty days of the closure of the business relationship. ↩
11. Treasury Sanctions Kunlun Bank in China and Elaf Bank in Iraq for Business with Designated Iranian Banks, US Department of Treasury (July 31, 2012), https://www.treasury.gov/press-center/printing-releases/pages/tg1661.aspx.↩

Source: https://www.dentons.com/en/insights/alerts/2019/march/22/us-unveils-capta-list

Posted by: romerobeatee.blogspot.com

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