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ENFORCEMENT INFORMATION FOR MAY 21, 2012
Genesis Asset Managers, LLP Settles Apparent Violation of the Iranian Transactions Regulations: Genesis Asset Managers, LLP ("GAM US") has agreed to remit $112,500 to settle potential civil liability for an apparent violation of the Iranian Transactions Regulations ("ITR"), 31 C.F.R. part 560 that occurred on or about August 1, 2007.
This settlement covers the following apparent violation of the ITR, which OFAC has determined was not egregious:
GAM US is the investment manager of Genesis Emerging Markets Fund ("GEMF"), a Guernsey-organized investment fund. Pursuant to a Management Agreement between GAM US and GEMF, GAM US has the authority to act as GEMF’s manager, investing and re-investing cash, securities and other property comprising the assets of GEMF. GAM US contracts with its London-based subsidiary, Genesis Investment Management LLP ("GIM UK") through an Investment Advisory Agreement, pursuant...
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1) This enforcement action was issued prior to the extension of the ITSR's jurisdiction to non-U.S. persons organized under the laws of foreign countries.
2) There are a few potential theories of liability here. First note that, pursuant to the agreement between GAM US and GIM UK, GAM US would be "approving," even if passively, the transactions GIM UK undertakes on behalf of GEMF. Therefore, GAM US could be seen as facilitating (560.208 and/or 560.206) transactions involving Iran entities, but the question is what particular underlying prohibited activities would be facilitated here.
In this case, OFAC might consider the approval to invest in shares of "a Cayman Islands company that invests exclusively in Iranian securities" to constitute a facilitation of the Cayman company's dealing in Iranian-origin services in connection with the purchase...