A New Regime

This week, from the U.S sanctions against SUEX OTC, the first time the Treasury Department has sanctioned a cryptocurrency exchange, to the creation of a new sanctions’ regime over the humanitarian crisis in Ethiopia, sanctions compliance has certainly dominated headlines, especially on the global stage. As the U.N General Assembly opened this week, the leaders of Cuba, Venezuela, and Iran denounced U.S. sanctions and urged world leaders to take action, with the latter going as far to describe the tool as “crimes against humanity.” 

It comes as the Biden administration expects to complete its ongoing sanctions policy review this fall. The review aims to determine whether the “programs are achieving their stated goals as well as having potential unintended consequences, such as blocking the provision of food, medicine or other humanitarian supplies,” a major criticism of the tool. According to the Brennan Center, a recent U.S. GAO “report on Venezuela sanctions found that all nine of the U.S. Agency for International Development implementing partners in that country had banks close their accounts or reject transactions, despite being permitted to deliver humanitarian aid,” highlighting the need for better understanding of regulations. 

As we await the outcome of the review, one thing is certain,  compliance with the various global sanctions regime will inevitably get more complex. In fact, First Bank’s recent settlement over “sanctions arising from non-US currency services extends OFAC’s reach outside the US financial system,” with the enforcement release highlighting the violations were a result of “First Bank’s lack of understanding of the scope of U.S. sanctions regulations.” With all the developments occurring in the industry, it will certainly be an interesting one to follow, and in the meantime, the imperativeness of educating oneself on sanctions compliance cannot be more critical. 

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