So What?

Iran Sanctions: Investigations and Penalties

Presented by: Erich C. Ferrari, Ferrari Legal, P.C.

How will they ever find out? Common ways that investigations are initiated
• Blocking and Reject Reports • Most common way; thousands of these reports are sent every year • License Applications • Revealing information about violations • Federal Investigations • Very common when investigating havaleh brokers • Self-Disclosures: Intentional and Unintentional • Voluntary self-disclosures vs. contacting OFAC and informing them of violations • Anonymous Tips
2

Blocking and Rejecting Reports
1 Wire Request

Sender

Subpoena 5 to Sender/ Recipient 3 Interdiction 2 SWIFT Blocked/ 4 Rejected

Intermediary

U.S. Bank

U.S. Treasury

3

What kind of trouble can you get in? • Problems with the banks
• Bank Investigations • Freezing of Accounts • Closing of Accounts

• OFAC Investigations
• Administrative Subpoenas • Penalty Process • Coordination with other agencies

• Criminal Investigations
• Agents • Target/Subject Letters • Exports and Money Transferring • Banki, Seifi, Amirnazmi, Mousavi, Vaghari, Hariri, Lahiji, Socara, etc.
4

OFAC Investigations Administrative Subpoenas
• 30 days to provide information and documents • You can request an extension, but may have to sign a tolling agreement • Your response is under penalty of perjury
• Not only false statements, but also misleading statements • OFAC will refer cases to DOJ for false statements (5 year max)

Voluntary Self-Disclosures
• Self reporting a violation • 50% reduction in base penalty • If a violation occurred and you need a license to transfer funds, then VSD

Penalty Calculations
• Base Penalty Calculations • Enforcement Guidelines • Settlement
5

Enforcement Responses
Sanctions Enforcement Options

6

Base Penalty Calculation Matrix
Egregious Case No Yes

1
Voluntary Self-Disclosure One-Half of Transaction Value
Capped at $125,000 per violation

3
One-Half of Statutory Maximum

Yes

2
Applicable Schedule Amount
Capped at $250,000 per violation

4
Statutory Maximum

* The base penalty amount will not exceed the applicable statutory maximum amount.

No

7

Violation Schedule Amounts

Amount
$1,000 $10,000 $25,000 $50,000 $100,000 $170,000 $250,000 <

Transaction Value
$1,000

>= $1,000 and < $10,000 >= $10,000 and < $25,000 >= $25,000 and < $50,000 >= $50,000 and < $100,000 >= $100,000 and < $170,000 >= $170,000

8

Criminal Prosecutions US Attorney’s Offices across the U.S. have been actively prosecuting these cases. There are a number of individuals under investigation across the United States for these types of violations.
• Testimony of Special Agent Pelczar (JTTF)Hearing Transcript from the Vaghari Case: Much of his work involves investigating Iranians.

If the FBI comes knocking….
• Don’t speak to them without counsel • People get nervous and may say something that mischaracterizes • Proffer Letter

9

Conclusion Enforcement cases are on the rise:
• 2009: 1,000 investigations • 2010: 1,200 investigations • 2011: 1,300 investigations

Difficulty in transferring funds is leading to more creative ways to get around sanctions which is leading to more investigations Talk to a lawyer with experience before acting
• Prior to engaging in the transactions • File a request for interpretative guidance • Map out how the transaction will occur

10

Iranian Transactions Regulations

If you have questions after the event please contact me:
• Phone: 202-280-6370 or 310-270-9930 • Email: ferrari@ferrari-legal.com • The Iranian Transactions Regulations Practice Guide • www.sanctionlaw.com THANK YOU!

11

Sign up to vote on this title
UsefulNot useful