Aid Bill Includes Ten Year Sanctions Lookback

Included among the munitions and TikTok drama, the foreign aid package signed last week has material changes for the sanctions compliance practitioner.

Incorporated in the final legislation is a bill from  by Sen. Sherrod Brown (D-OH) and Sen Tim Scott (R-SC), [S. 1271], the FEND Off Fentanyl Act  declaring fentanyl trafficking a national emergency and placing new sanctions on the leaders of trafficking organizations.

Front and center for sanctions practitioners is the extension of the statute of limitations for sanctions (SoL) violations from five to ten years.   As the Sanctions team at Akin Gump notes in their review of the rule, “ this change to the SoL will also apply to all other IEEPA-based legal authorities and programs, including certain national security programs administered and enforced by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS), the U.S. Department of Justice’s National Security Division (DOJ-NSD) and the U.S. Department of the Treasury’s Office of Investment Security (Treasury OIS).  

The final IEEPA SoL is in Section 3111 of the new law, [PL 118-50] which amends 50 U.S.C. Section 1705(d) to say: 

"An action, suit, or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise, under this section shall not be entertained unless commenced within 10 years after the latest date of the violation upon which the civil fine, penalty, or forfeiture is based.”   

Tim O'Toole of Miller & Chevalier, who pointed out to the Wall Street Journal  "When companies discover a possible sanctions violation, they often do a five-year lookback to see if it was a one-off or whether the problem is a systemic one.  Companies may now have to do a 10-year lookback, including for companies they are looking to acquire.,”

Anti Money Laundering

The measure gives the U.S. Treasury Department more latitude to combat money laundering tied to trafficking and gives officials the authority to make use of forfeited property for law enforcement efforts.  If the Secretary of the Treasury determines that reasonable grounds exist for concluding that

1. 1 or more financial institutions operating outside of the United States,
2. 1 or more classes of transactions within, or involving, a jurisdiction outside of the United States, or
3. 1 or more types of accounts within, or involving, a jurisdiction outside of the United States, is of primary money laundering concern in connection with illicit opioid trafficking, the Secretary of the Treasury may, by order, regulation, or otherwise as permitted by law—

• require domestic financial institutions and domestic financial agencies to take 1 or more of the special measures provided for in section 9714(a)(1) of the National Defense Authorization Act for Fiscal Year 2021 (Public Law 116–283; 31 U.S.C. 5318A note); or
• prohibit, or impose conditions upon, certain transmittals of funds (to be defined by the Secretary) by any domestic financial institution or domestic financial agency, if such transmittal of funds involves any such institution, class of transaction, or type of accounts.