Publications
Venezuela Sanctions Complicate Compliance for Companies
Law360
June 25, 2018
On May 21, 2018, in response to recent activities of the Maduro regime, President Trump issued a new Executive Order, “Prohibiting Certain Additional Transactions with Respect to Venezuela.” Previous sanctions under Executive Order 13808, issued Aug. 24, 2017, had prohibited transactions related to, provisions of financing for, or other dealings in, among other things, “new debt” of certain maturities and new equity of the Government of Venezuela, bonds issued by the Government of Venezuela, dividend payments or other distributions of profits to the Government of Venezuela from any entity owned or controlled by the Government of Venezuela, as well as the purchase of securities from the Government of Venezuela. The new sanctions prohibit, among other things, transactions involving the purchase of any debt owed to the Government of Venezuela, as well as transactions involving any debt owed to the Government of Venezuela that is pledged as collateral. The new sanctions also prohibit transactions related to, financing for or other dealings relating to the sale, transfer, assignment or pledging as collateral by the Government of Venezuela of any equity interests involving entities in which the Government of Venezuela has a 50 percent or greater ownership interest. By targeting debt owed to the Government of Venezuela, the new sanctions limit the Government of Venezuela’s ability to liquidate assets into usable capital. In this article, Betty Santangelo, Gary Stein and former Schulte lawyers Mari Dopp, Nicole Geoglis, Jennifer Opheim and Seetha Ramachandran discuss these sanctions.
Related People
Attachments
Related Insights
Alerts
On March 1, 2024, Judge Liles C. Burke of the US District Court for the Northern District of Alabama found the Corporate Transparency Act (“CTA”) unconstitutional. The CTA, which was enacted on Jan. 1, 2021, requires certain legal entities (known as “Reporting Companies”) to file beneficial ownership information reports (“BOI Reports”) with the US Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”).[1] Judge Burke’s 53-page opinion concluded that “the CTA exceeds the Constitution’s limits on the legislative branch and lacks a sufficient nexus to any enumerated power to be a necessary or proper means of achieving Congress’ policy goals.”[2] Judge Burke also issued a final judgment permanently enjoining the US Government from enforcing the CTA against the two plaintiffs —the National Small Business Association, a non-profit trade group that represents more than 65,000 member companies, and one of its members.[3]
Alerts
On Feb. 15, 2024, the US Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) proposed its long-anticipated rule, which will subject certain investment advisers to significant anti-money laundering and counter-terrorist financing-related compliance obligations (“Proposed Rule”). Specifically, the Proposed Rule requires certain investment advisers to (i) establish and implement anti-money laundering and countering the financing of terrorism (“AML/CFT”) programs, (ii) file suspicious activity reports (“SARs”) with FinCEN, and (iii) fulfill recordkeeping, information sharing, investor due diligence and other AML/CFT-related obligations mandated by the Bank Secrecy Act (“BSA”).[1] The Proposed Rule applies to investment advisers registered with the Securities and Exchange Commission (“SEC”), also known as registered investment advisers (“RIAs”) and exempt reporting advisers (“ERAs”) (collectively, “Covered Advisers”). The public comment period will remain open until April 15, 2024.
Alerts
On Jan. 10, 2024, the US Department of Labor (“DOL”) published its final rule on employee or independent contractor classification under the Fair Labor Standards Act (“FLSA”) for purposes of minimum wage and overtime. The final rule became effective March 11, 2024.
Alerts
On Feb. 6, the Staff of the US Securities and Exchange Commission’s Division of Investment Management (“Staff”) issued an updated FAQ (“FAQ”) with respect to Investment Advisers Act Rule 206(4)-1 (“Marketing Rule”), excerpted below,[1] addressing the presentation of gross and net internal rates of return (“IRRs”) when the fund uses subscription lines to fund investments. Although the Staff, for quite some time, has focused during examinations on the methodology used to calculate gross and net IRRs when subscription lines are used to fund investments, the amended Marketing Rule that went into effect in November 2022[2] specifically requires that gross and net performance be calculated and presented using the same methodology and over the same period of time. In the FAQ, the Staff expressed its view that certain historical performance reporting practices are no longer permitted under the Marketing Rule, even with clear disclosure regarding the differences in methodologies utilized to calculate the net and gross performance shown.
Alerts
On March 1, 2024, Judge Liles C. Burke of the US District Court for the Northern District of Alabama found the Corporate Transparency Act (“CTA”) unconstitutional. The CTA, which was enacted on Jan. 1, 2021, requires certain legal entities (known as “Reporting Companies”) to file beneficial ownership information reports (“BOI Reports”) with the US Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”).[1] Judge Burke’s 53-page opinion concluded that “the CTA exceeds the Constitution’s limits on the legislative branch and lacks a sufficient nexus to any enumerated power to be a necessary or proper means of achieving Congress’ policy goals.”[2] Judge Burke also issued a final judgment permanently enjoining the US Government from enforcing the CTA against the two plaintiffs —the National Small Business Association, a non-profit trade group that represents more than 65,000 member companies, and one of its members.[3]
Alerts
On Feb. 15, 2024, the US Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) proposed its long-anticipated rule, which will subject certain investment advisers to significant anti-money laundering and counter-terrorist financing-related compliance obligations (“Proposed Rule”). Specifically, the Proposed Rule requires certain investment advisers to (i) establish and implement anti-money laundering and countering the financing of terrorism (“AML/CFT”) programs, (ii) file suspicious activity reports (“SARs”) with FinCEN, and (iii) fulfill recordkeeping, information sharing, investor due diligence and other AML/CFT-related obligations mandated by the Bank Secrecy Act (“BSA”).[1] The Proposed Rule applies to investment advisers registered with the Securities and Exchange Commission (“SEC”), also known as registered investment advisers (“RIAs”) and exempt reporting advisers (“ERAs”) (collectively, “Covered Advisers”). The public comment period will remain open until April 15, 2024.
Alerts
On Jan. 10, 2024, the US Department of Labor (“DOL”) published its final rule on employee or independent contractor classification under the Fair Labor Standards Act (“FLSA”) for purposes of minimum wage and overtime. The final rule became effective March 11, 2024.
Alerts
On Feb. 6, the Staff of the US Securities and Exchange Commission’s Division of Investment Management (“Staff”) issued an updated FAQ (“FAQ”) with respect to Investment Advisers Act Rule 206(4)-1 (“Marketing Rule”), excerpted below,[1] addressing the presentation of gross and net internal rates of return (“IRRs”) when the fund uses subscription lines to fund investments. Although the Staff, for quite some time, has focused during examinations on the methodology used to calculate gross and net IRRs when subscription lines are used to fund investments, the amended Marketing Rule that went into effect in November 2022[2] specifically requires that gross and net performance be calculated and presented using the same methodology and over the same period of time. In the FAQ, the Staff expressed its view that certain historical performance reporting practices are no longer permitted under the Marketing Rule, even with clear disclosure regarding the differences in methodologies utilized to calculate the net and gross performance shown.
Alerts
On March 1, 2024, Judge Liles C. Burke of the US District Court for the Northern District of Alabama found the Corporate Transparency Act (“CTA”) unconstitutional. The CTA, which was enacted on Jan. 1, 2021, requires certain legal entities (known as “Reporting Companies”) to file beneficial ownership information reports (“BOI Reports”) with the US Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”).[1] Judge Burke’s 53-page opinion concluded that “the CTA exceeds the Constitution’s limits on the legislative branch and lacks a sufficient nexus to any enumerated power to be a necessary or proper means of achieving Congress’ policy goals.”[2] Judge Burke also issued a final judgment permanently enjoining the US Government from enforcing the CTA against the two plaintiffs —the National Small Business Association, a non-profit trade group that represents more than 65,000 member companies, and one of its members.[3]