US outlines sanctions for foreign financial institutions conducting activities for Hezbollah

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued regulations to implement the Hezbollah International Financing Prevention Act (HIFPA) of 2015.

It authorises secondary sanctions against foreign financial institutions that facilitate or conduct certain activities for the benefit of Hezbollah.

Secondary sanctions

The HIFPA provides Washington with additional tools to impose secondary sanctions targeting Hezbollah’s financial infrastructure.

It requires the administration to promulgate regulations to prohibit or impose strict conditions on the opening or maintaining in the US of a correspondent account or a payable-through account by a foreign financial institution that the US president determines to have engaged in certain activities benefitting Hezbollah.

Proscribed activities

Sanctionable activities include knowingly facilitating a significant transaction or transactions for Hezbollah or knowingly facilitating a significant transaction or transactions of a Specially Designated National (SDN) acting on behalf of or at the direction of, or being owned or controlled by, Hezbollah.

Other sanctionable activities include knowingly engaging in money laundering to carry out an activity described above or knowingly facilitating a significant transaction or transactions or providing significant financial services to carry out an activity described above.

The OFAC document, 31 CFR Part 566 Hizballah Financial Sanctions Regulations, can be found here.



Categories: Trade Based Financial crimes News

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