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
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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

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.
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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
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Enforcement Responses
Sanctions Enforcement Options

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

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

Criminal Prosecutions US Attorneys 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.

Dont speak to them without counsel People get nervous and may say something that mischaracterizes Proffer Letter

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

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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!

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