MEMORANDUM OF UNDERSTANDING
U.S. Department
of
the Treasury, Office
of
Foreign Assets Control
Illinois Department
of
Financial and Professional Regulation
I.
Background
A.
Purpose
This Memorandum
of
Understanding ("MOU") sets forth procedures for the
exchange
of
specified information between the Illinois Department
of
Financial and Professional
Regulation ("State Agency") and the Office
of
Foreign Assets Control ("OFAC"), an office
within the U.S. Department
of
the Treasury (collectively, the "Agencies").
State Agency has examination and enforcement authority for the financial
condition, safe and sound operation, and compliance with laws and regulations
of
the financial
institutions it supervises. Under delegated authority from the Secretary
of
the Treasury, OFAC
furthers U.S. foreign policy and national security goals by administering and enforcing economic
and trade sanctions against targeted foreign countries, groups, and persons subject to
31
C.F.R.
Ch. V, Office
of
Foreign Assets Control Regulations.'
Information to be shared under this MOU includes information about
OFAC's
administration and enforcement
of
economic sanctions, information about compliance with
OF AC requirements
by
financial institutions supervised by State Agency, and to the extent
permitted
by
law, including the Right to Financial Privacy Act (12 U.S.C. 3401, et seq.),
information about possible violations
of
OFAC sanctions by financial institutions supervised by
State Agency.
The sharing
of
information under this MOU is intended to help OF AC in fulfilling
its role
as
administrator and enforcer
of
economic sanctions and to assist State Agency in
fulfilling its roles as financial institution supervisors.
B. Assessment
of
MOU Operation
The Agencies shall meet, as necessary, to discuss the operation
of
the MOU and
to identify any issues or adjustments that may be required. During such meetings, OF AC will
provide an update on how the information provided by State Agency under this MOU has been
used or applied by OFAC. The Agencies will also evaluate the effectiveness
of
the information
sharing in meeting the goals outlined above.
I See
31
C.F.R. Part 50 I.
C.
OFAC Availability
OF AC maintains a toll-free telephone hotline to address issues relating to
interdicted items and general compliance questions and will make that resource available
to State Agency examiners as well as to the institutions that they regulate.
II. Provision oflnformation
to
OFAC by the State Agency
A.
Umeported Violations
of
Sanctions.
State Agency will notify OF AC promptly
of
any apparent, umeported sanctions
violations discovered in the course
of
an examination to the extent permitted by
law, including the Right to Financial Privacy Act. State Agency will direct
financial institutions it supervises to provide information directly to OFAC as
required by OFAC regulations.
B.
Other Examination Findings.
1)
When State Agency discovers significant deficiencies in a financial
institution's policies, procedures, and processes for ensuring compliance with
OF AC regulations, State Agency will notify OF AC
of
such deficiencies to the
extent permitted by law, including the Right to Financial Privacy Act. For
purposes
of
this MOU, a significant deficiency means: a systemic or pervasive
compliance deficiency or reporting and recordkeeping violation, including a
situation where a financial institution fails to respond to supervisory warnings
concerning OFAC compliance deficiencies
or
systemic violations.
2) In cases where OFAC has initiated a review
of
a financial institution based on
deficiencies identified in section II.B. l
.,
or
other evidence within OF A
C's
investigative purview, State Agency will provide to OFAC, upon OFAC's
written request, information relating to State Agency's examination or
supervisory findings regarding a financial institution's policies, procedures,
and processes for ensuring compliance with OF AC regulations, to the extent
permitted by law, including the Right to Financial Privacy Act. Upon written
request, OFAC may obtain further or additional supervisory information
(if
available) relating to the above information.
III. Provision oflnformation
to
State Agency by OFAC
To the extent provided by law, including the Right to Financial Privacy Act:
A.
After OF AC becomes aware
of
an apparent sanctions violation by a financial
institution supervised by State Agency, OF AC will promptly provide State Agency with
information about the apparent violation. OF AC will also provide a copy
of
any correspondence
2
between OFAC and the financial institution relating to apparent sanctions violations by the
financial institution or to a pending or possible enforcement action against the financial
institution.
B. OF AC will also provide to State Agency notice
of
and appropriate documentation
relating to the following:
1) Notice prior to any on-site investigation or audit
of
a financial institution and
the results
of
such investigation or audit, e.g., an investigation or audit report,
as soon as practicable after completion
of
the investigation or audit;
2) Notice that a financial institution is undergoing an OFAC evaluation;
3) OFAC's evaluation
of
an apparent violation by a financial institution;
4) OFAC's enforcement determinations, including any decision to close an
investigation without taking enforcement action, the issuance
of
a prepenalty
notice, or the issuance
of
a penalty notice;
5) Notice prior to making public any enforcement action;
6) Upon written request, State Agency may obtain further or additional
information
(if
available) relating to the above information.
IV. Restrictions on Disclosure and Use
of
Information
A.
1) State Agency retains ownership
of
all information provided to OFAC under
this MOU. OFAC retains ownership
of
all information provided
to
State
Agency under this MOU. All information State Agency provides to OFAC
under this MOU shall be deemed confidential supervisory information and is
subject to State Agency's laws, regulations and agreements governing the
disclosure
of
such information. OF AC will use information provided by State
Agency under this MOU only in accordance with the restrictions applicable
to
information shared by State Agency under those laws, regulations and
agreements.
2
OF AC will rely on State Agency to specifically identify any
disclosures or privacy restrictions applicable to information it shares with
OFAC. The information provided
by
OF AC to State Agency is intended for
the State Agency's use in the supervision
of
the institutions that it regulates
and is not for further disclosure outside the course
of
its supervisory activities.
Neither OFAC nor State Agency will make public use
of
any confidential
2 The Illinois Banking Act, 205 ILCS 5/1; the Illinois Savings and Loan Act
of
1985, 205 ILCS I 05/1-1;
the Savings Bank Act, 205 ILCS 205/100 I; the Illinois Credit Union Act, 205 ILCS 305/1; the Currency
Exchange Act, 205 ILCS 405/0.
l;
the Corporate Fiduciary Act, 205 ILCS 620/1; the Foreign Banking
Office Act, 205 ILCS 645/1; the Foreign Bank Representative Office Act, 205 ILCS 650/1; and the
Transmitters
of
Money Act, 205 ILCS 657/1 as such laws may be amended from time to time.
3
information provided by the other under this MOU without the prior written
approval
of
the other.
2) OF AC and State Agency will establish and maintain such safeguards as are
necessary and appropriate to protect the confidentiality
of
the information
received under this MOU and information derived therefrom.
3) OF AC will notify State Agency in writing
of
any legally enforceable demand
for information provided by State Agency under this MOU, prior to
complying with the demand. OFAC will assert all such legal exemptions,
protections or privileges on State Agency's behalf as State Agency may
request. Unless subject to a court order
or
other compulsory process, OF AC
may not grant any demand or request for the information without prior written
notice to, and approval of, State Agency.
4) State Agency will notify OF AC in writing
of
any legally enforceable demand
for information provided by OFAC under this MOU, prior to complying with
the demand. State Agency will assert all such legal exemptions, protections or
privileges on OFAC's behalf as OFAC may request. Unless subject to a court
order or other compulsory process, State Agency may not grant any demand
or request for the information without prior written notice to, and approval of,
OFAC.
5) OFAC and State Agency expressly reserve all evidentiary privileges and
protections applicable to any information provided to one another under this
MOU.
B.
Disclosure to OF AC
of
confidential supervisory information that is jointly held by
State Agency and a Federal Banking Agency ("FBA") shall be subject to the
FBA's
approval.
V. Civil Enforcement
No provision
of
this MOU is intended to affect the respective enforcement
authorities
of
State Agency, OFAC,
or
the FBAs.
VI. Term
of
MOU
This MOU is effective upon signature by both State Agency and OF AC. This
MOU may be executed in counterparts and will remain in effect until amended or replaced by
signed, mutual agreement
of
both parties. This MOU may be terminated by State Agency or
OF AC upon 30 days written notice.
4
VII. Severability
If
any provision
of
this MOU or the application
of
any provision
of
this MOU to any
person or circumstance is held invalid, the invalidity does not affect other provisions or
applications
of
the MOU that can be given effect without the invalid provision or application,
and for this purpose the provisions
of
this
MOU
are severable.
IN WITNESS WHEREOF, each
of
the parties hereto has caused this MOU to be
executed
by
its duly authorized officer
on
the date indicated below.
OFFICE OF FOREIGN ASSETS CONTROL
By:
Dated:
A~-
Swb,Director
/vfq;,y
2<,
;i~
~
•
Illinois De artment
of
Financial and Professional Regulation
._~_
~~
By: Dean Martinez, Secretary
Dated:
5
