Day: March 17, 2022

On 16 March, Sunstein LLP published an article saying that the foreign direct product (FDP) rule represents an ambitious attempt by the United States to expand its export controls to goods manufactured in foreign countries.  This rule was promulgated by the Commerce Department’s Bureau of Industry and Security (BIS).  BIS regulates the export of sensitive items that are not munitions, the export of which is subject to State Department control under the International Traffic in Arms (ITAR) regulations.  The FDP rule subjects to US export regulations products made overseas that are the direct product of technology or software of US origin; or that are the direct product of a plant, or major component of a plant, that is itself a direct product of US-origin technology or software.

https://www.jdsupra.com/legalnews/new-restrictions-on-exports-to-russia-4618366/

On 16 March, a news release from FinCEN announced its efforts to support the multilateral Russian Elites, Proxies, and Oligarchs (REPO) Task Force, announced by the US Treasury and DoJ.  A separate Alert highlights the importance of financial institutions identifying and quickly reporting suspicious transactions by sanctioned Russian elites and their proxies that involve real estate, luxury goods, and high-value assets.  FinCEN has joined the FIU of Australia, Canada, France, Germany, Italy, Japan, New Zealand, the United Kingdom, and the Netherlands in issuing a statement of intent to form an FIU Working Group on Russia-Related Illicit Finance and Sanctions.   FinCEN is continuing robust engagement with financial institutions to explore typologies and share best practices to enable the private sector to better identify corrupted gains by elites, oligarchs, and their proxies and provide FinCEN and law enforcement with critical information to track, freeze, and seize the assets of Russian elites and their proxies.

https://www.fincen.gov/news/news-releases/fincen-announces-actions-support-repo-multilateral-task-force-and-ongoing-us

https://www.fincen.gov/news/news-releases/russia-related-illicit-finance-and-sanctions-fiu-working-group-statement-intent

https://www.fincen.gov/sites/default/files/2022-03/FinCEN%20Alert%20Russian%20Elites%20High%20Value%20Assets_508%20FINAL.pdf

On 15 March, an article from CSIS says that finance typically plays a major role in wars, but the Russia-Ukraine war is the first major conflict with a prominent role for cryptocurrencies.  Questions have been raised over whether cryptocurrencies can be used by Russian actors to bypass sanctions. The prominence of crypto in this conflict could influence global perceptions of the technology, including among governments considering new regulations. 

https://www.csis.org/analysis/cryptocurrencys-role-russia-ukraine-crisis

US: KLEPTOCRACY ASSET RECOVERY REWARDS PROGRAM

The US Treasury said that Congress established the Kleptocracy Asset Recovery Rewards Program to further the US Government’s commitment to combating foreign government corruption and serve United States efforts to identify and recover stolen assets, forfeit proceeds of corruption, and, where appropriate and feasible, return those stolen assets or proceeds to the country harmed by the acts of corruption.  The Program may pay rewards to qualified individuals who provide information leading to the restraint or seizure, forfeiture, or repatriation of “stolen assets”, as defined by the law, linked to foreign government corruption.

https://home.treasury.gov/about/offices/terrorism-and-financial-intelligence/terrorist-financing-and-financial-crimes/kleptocracy-asset-recovery-rewards-program