Network of Iranian front companies disrupted by OFAC

On March 26, 2019 the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced(1) it had taken action against a network of 25 individuals and entities that had transferred over a billion dollars to the Islamic Revolutionary Guard Corps (IRGC) and Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL).

The evasion scheme included a layered network of front companies and agents based in Iran, UAE, and Turkey that were set up to evade international sanctions and to gain access to the international financial system. The network exchanged devalued Iranian rials for dollars and euros.

We are targeting a vast network of front companies and individuals located in Iran, Turkey, and the UAE to disrupt a scheme the Iranian regime has used to illicitly move more than a billion dollars in fundsCentral to this network and sanctioned today pursuant to our counter terrorism authority is Iran's IRGC-controlled Ansar Bank and its currency exchange arm, Ansar Exchange, both of which used layers of intermediary entities to exchange devalued Iranian rial ultimately for dollars and euros to line the pockets of the IRGC and MODAFL…” (1)

Five front companies- UAE-based Sakan General Trading, Lebra Moon General Trading, and Naria General Trading, and Turkey-based Atlas Doviz, and the Iran-based Hital Exchange provided $800 million in funds to Ansar exchange.

Now more than ever, it is vitally important that global companies implement third-party due diligence and engagement policies. These policies are often risk-based but should be comprehensive and include at a minimum background investigation diligence and ongoing monitoring of distribution networks and contract agents.

Contact our Due Diligence compliance professionals at GCSG today to learn how we can help you mitigate your third-party risk with our due diligence reports, risk-ranking tool, policy development and implementation support, and international boots-on-the-ground third-party Audits.

References

(1) U.S. Department of the Treasury Press Releases - “United States Disrupts Large Scale Front Company Network Transferring Hundreds of Millions of Dollars and Euros to the IRGC and Iran’s Ministry of Defense.” - March 26, 2019

GCSG Launches Third-Party Due Diligence Survey

Global Compliance Solutions Group LLC (GCSG) launches a third-party due diligence practices survey

PRAIRIEVILLE, Louisiana, August 28, 2017GCSG, an advisory, audit and due diligence firm focused on helping companies manage compliance and risk in their own business and with their third parties, launches a third-party due diligence practices survey.

Click here to take our benchmarking survey.

Is third party due diligence a part of your job duties?  In your area of responsibility?  Within the responsibility of your department?  If any of these sound like your experience, then GCSG needs your expertise.

Do you wonder how your third-party due diligence approach stacks up against other companies?  Then you should take a moment to share your experiences and complete our survey.

The survey will take about 10 minutes to complete.  All survey participants will receive a copy of the survey results report and all responses are anonymous.  We greatly appreciate your feedback.

Click here to take our benchmarking survey.

Survey URLhttps://www.surveymonkey.com/r/FSSDYPR

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About GCSG

Global Compliance Solutions Group LLC was founded in 2016 and is headquartered in Louisiana, USA.  We provide Advisory, Audit, and Due Diligence services for our clients across a range of industries in the areas of Import, Export and Customs Compliance, Anti-Bribery and Anti-Corruption, Drug Precursor, and Distilled Spirits Plant compliance.  The GCSG service team delivers compliance program assessment, development and implementation support, audit, and acquisition and third party due diligence services.  We partner with our clients to solve challenging compliance issues with a strategic, comprehensive, and common sense methodology.  More information can be found at: http://www.globalcompliancesg.com

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France passes supply chain due diligence law

On February 21, 2017, the French National Assembly passed a law that requires certain companies based in France, to establish an "effective vigilance plan" (the "Plan") within their global supply chains.  The due diligence law is applicable to the following types of companies:

  • Any company that has its registered office in France that employs at least 2,000 employees (at its close of two consecutive financial years), within the country, in its head office and in its direct or indirect subsidiaries; and
  • Any company, registered in France, with at least 10,000 employees worldwide in its parent company and its direct or indirect subsidiaries, whose head office is in France or whose head office is abroad

The law requires the Plan to include "reasonable vigilance" measures to identify risks and prevent serious violations of human rights and fundamental freedoms, the health and safety of persons and the environment resulting from the activities of society, those of the companies it controls (directly or indirectly), as well as the activities of subcontractors or suppliers with whom an established commercial relationship is maintained.  The law outlines the following key measures to be included in the Plan:

  • Risk mapping intended to identify, analyze, and rank
  • Procedures that require regular assessment of compliance with the plan of subsidiaries, subcontractors or suppliers with whom an established commercial relationship is maintained with regard to risk mapping
  • Documented actions to be taken to mitigate risks or prevent serious harm
  • A mechanism for collecting alerts on the existence or risks
  • A mechanism for monitoring the measures implemented and evaluating their effectiveness

Failure to comply with the requirements of the law within three months of the date of the formal notice, can subject a company to a civil fine that can not exceed € 10 million. 

Human Rights Watch said of the law, "..France took a historic step toward reducing these human rights abuses.  Parliament passed a law that pushes for accountability for multinational companies sourcing from global supply chains."(1)

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