Episode 240

10th April – 12th April 2026

Sanctions

OFAC Updates Guidance on Exit Taxes and Authorisations Under Russia‑Related Sovereign Transactions Directive

The Office of Foreign Assets Control (OFAC) has updated its guidance on US sanctions related to Russia, clarifying that payments of so‑called “exit taxes” to Russian government entities fall under Directive 4 restrictions and generally require a specific licence before proceeding. OFAC stated that these payments are not considered part of ordinary business operations and are therefore not covered by General Licence 13Q. The update also outlines existing authorisations for certain civil nuclear and operational transactions involving Directive 4 entities, including those under General Licences 132, 115C, 13Q, and 14, while noting that each authorisation has defined limits and conditions.

US Treasury Issues New Guidance Targeting "Sham Transactions" and Sanctions Evasion Tactics

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has released an advisory targeting "sham transactions" used by sanctioned individuals to conceal their continuing interests in property through proxies and opaque legal structures. These deceptive arrangements occur when blocked persons, which include oligarchs and narcotics traffickers, purportedly transfer assets like private jets, real estate, or investment vehicles to family members or front businesses while retaining actual control or economic benefit. OFAC emphasises a "functional approach" to these cases, asserting that property remains blocked if a sanctioned person maintains an underlying practical interest, regardless of legal formalities. To assist with compliance, the advisory lists several "red flags," such as transfers completed near the time of a sanctions designation, commercially unreasonable transaction terms, and the use of unnecessarily complex corporate structures in high-risk jurisdictions. The high stakes of these regulations are highlighted by recent enforcement actions, including a $215.9 million penalty against a San Francisco venture capital firm for knowingly managing investments through a proxy for a sanctioned Russian oligarch.

UK Extends Maritime Mutual Wind‑Down Licence as OTSI Prepares to Take on Wider Export‑Sanctions Licensing Role

In the UK, the government has extended its general licence permitting UK insurers, brokers and relevant financial institutions to wind down pre‑existing insurance and reinsurance contracts involving Maritime Mutual entities until 8th July 2026, allowing firms to process or terminate obligations agreed before 24th February 2026 while maintaining required record‑keeping and compliance controls. Separately, the Office of Trade Sanctions Implementation announced that from 27th April it will assume responsibility for licensing sanctioned goods and associated ancillary services for export to sanctioned destinations, expanding beyond its current remit for standalone sanctioned services while the Export Control Joint Unit continues to oversee items subject to strategic export controls.

Fraud

Justice Department Expands National Fraud Enforcement Efforts and Announces Actions in Cases Involving Over $260 Million in Alleged Losses

The US Justice Department has established a National Fraud Enforcement Division to coordinate investigations and prosecutions involving the misuse of taxpayer funds, while simultaneously announcing actions across several states targeting schemes involving more than $260 million in alleged fraud against COVID‑19 relief and Social Security disability programmes. According to the department, recent cases include attempts to obtain large fraudulent tax refunds, multi‑state benefit fraud rings, and individual instances of unlawfully receiving government payments. Officials stated that the new division will work with federal, state, tribal, territorial, and local partners to strengthen oversight and support efforts to identify and address fraud affecting public programmes.

Secret Service Operation Disrupts $45 Million Cryptocurrency Fraud Scheme

A US Secret Service investigation, in conjunction with law enforcement globally, known as Operation Atlantic, has disrupted more than $45 million in cryptocurrency‑based fraud and successfully frozen $12 million in stolen digital assets, according to the agency. The operation forms part of ongoing efforts to counter large‑scale financial scams involving digital currencies, with authorities highlighting the continued growth of fraud networks exploiting online investment schemes and social engineering tactics.

Money Laundering

Treasury Proposes Rule to Implement GENIUS Act Requirements for Stablecoin Oversight

The US Treasury’s Financial Crimes Enforcement Network and the Office of Foreign Assets Control have issued a proposed rule to implement the GENIUS Act, establishing anti‑money laundering and sanctions compliance obligations for permitted payment stablecoin issuers. The proposal would classify these issuers as financial institutions under the Bank Secrecy Act, requiring them to adopt measures to mitigate illicit finance risks while supporting innovation in payment stablecoins. Treasury officials said the framework aims to protect the financial system and ensure effective oversight, with the rule set to be published for public comment in the Federal Register. The fact sheet is here.

AUSTRAC Identifies AML Weaknesses in Foreign‑Owned Banks After Two Supervisory Campaigns

AUSTRAC has completed two supervisory campaigns examining foreign‑owned banks in Australia, finding weaknesses in anti‑money laundering controls which create opportunities for criminal exploitation. The first campaign reported low levels of suspicious matter reporting among foreign bank branches, despite exposure to higher‑risk customers and global transaction flows. The second campaign found significant money‑mule risks in foreign bank subsidiaries, with vulnerabilities at both onboarding and transaction‑monitoring stages. AUSTRAC has urged all institutions involved to strengthen AML systems and increase reporting better to safeguard Australia’s financial system.

Other Financial Crime

Court Orders Disclosure of Retainer in ENRC–SFO £1.8m Costs Dispute

A senior costs judge has ordered SFO investigator Antony Puddick to disclose his retainer agreement with his solicitors as part of a £1.8m costs dispute with Eurasian Natural Resources Corporation (ENRC). ENRC argued that there was a genuine issue regarding Puddick’s liability for fees owed to AM Strachan & Co, seeking all documents underpinning the engagement terms. Puddick’s counsel described the application as a disproportionate “fishing expedition,” but the judge ruled that retainer documents are not privileged and should have been provided under procedural rules. An application to appeal was dismissed, and costs were reserved.

New Jersey US Attorney’s Office Reports $1.5 Billion in FY2025 Recoveries, Highest Nationwide

The US Attorney’s Office for the District of New Jersey reported collecting more than $1.5 billion in criminal and civil actions during fiscal year 2025, the highest total of any district in the country, according to the Justice Department. The office also worked with other DOJ components to secure an additional $155 million in joint cases and collected $348 million through asset‑forfeiture actions. Major recoveries included over $1.43 billion in fines and more than $328 million in criminal forfeiture from TD Bank following its guilty pleas related to systemic anti‑money‑laundering failures.