US CONTINUES TO INCREASE INTENSITY OF SANCTIONS AGAINST RUSSIA

The Obama administration has created further sanctions in response to the position in the Ukraine.  President Obama has signed three executive orders in two weeks. The March 20, 2014 executive order enables the US government to sanction specified sectors of the Russian economy - from energy and defense to financial services and mining - although to date these sanctions have been applied only so as to add twenty more individuals and one bank to the Specially Designated Nationals (SDN) list of sanctioned persons. The bank has been sanctioned because it is said to maintain personal accounts for senior Russian officials.  All US persons must comply with the regulations, including all US incorporated entities and their foreign branches. Please see the International section of this update for links to our Ukraine briefings.

US TREASURY UNDERSECRETARY FOR TERRORISM DISCUSSES VIRTUAL CURRENCIES AND AML / SANCTIONS COMPLIANCE

On 18 March, the US Treasury Undersecretary for Terrorism and Financial Intelligence, David S. Cohen, gave a presentation regarding the regulation of virtual currencies such as Bitcoin.  According to Cohen, the primary concerns in connection with virtual currencies include sanctions avoidance, money laundering, and terrorist financing.  Though aware of opposition to regulation of virtual currencies, US regulators will seek to increase transparency in connection with virtual transactions.  This will include basic controls such as client identification, transaction monitoring, and reporting to Financial Intelligence Units ("FIUs").  Cohen noted that the anonymity of virtual currency transactions may make it difficult for financial institutions to comply with AML laws, but financial institutions that disregard their obligation to have in place controls to mitigate the threat of money laundering in connection with virtual currency will be pursued.