Memo from the SD Division of Banking

All South Dakota Chartered Trust Companies:

As a result of the ongoing conflict involving Russia and Ukraine and corresponding sanctions, the U.S. Treasury and the Office of Foreign Assets Control (OFAC) has been actively updating the Specially Designated Nationals (SDN) List and non-SDN sanctions lists.  Every South Dakota-chartered trust company should take a proactive approach to ensure adequate procedures are in place for OFAC reporting and sanctions compliance.

U.S. persons (including, without limitation, banks, trust companies, virtual currency businesses, and other financial institutions) are prohibited from engaging in any financial transactions with persons on the SDN List, unless OFAC has authorized otherwise.

In addition to the individuals and entities being added to the SDN List, separate sanctions have been placed on several Russian entities with respect to their ability to raise debt and equity and/or with respect to their correspondent and payable-through accounts.  Trust companies must regularly review the specific restrictions as contained on the U.S. Treasury’s OFAC website to ensure continued compliance—OFAC Sanctions Program and Information.

Other helpful links:

1.     OFAC Sanctions List Search

2.     Ukraine-/Russia-related Sanctions

3.     U.S. Treasury Announces Unprecedented & Expansive Sanctions Against Russia, Imposing Swift and Severe Economic Costs

4.     U.S. Treasury Targets Belarusian Support for Russian Invasion of Ukraine

5.     OFAC Recent Actions

Crypto Asset Products and Services

Several media sources have suggested crypto assets could facilitate sanctions evasion and weaken the intended impacts.  Trust companies providing crypto asset products and services (CAPS) should evaluate their exposure to this specific risk and implement tailored mitigation procedures based on the evaluation.  In addition, all trust companies offering CAPS should review OFAC’s Sanctions Compliance Guidance for the Virtual Currency Industry and implement procedures for compliance.

Please forward this notice to any relevant parties in your organization.

Thank you.