The New Cold War: Risk, Sanctions, Compliance: Recent Episodes
Stroock & Stroock & Lavan LLP
Politics and legal risks are now intertwined like never before. The Biden Administration has identified anti-corruption as a core U.S. national security interest. It recently imposed unprecedented sanctions on Russia including on its Central Bank, the president and foreign minister. And in his State of the Union address, President Biden said “The U.S. Department of Justice is assembling a dedicated task force to go after the crimes of Russian oligarchs. We are joining with our European allies to find and seize their yachts, their luxury apartments, their private jets.” At the same time, the Department of Justice has identified state-sponsored cybercrime and foreign attempts to influence U.S. politics as top enforcement priorities. What does the convergence of national security and law enforcement mean for businesses? How can they protect themselves in this new environment? What are the next enforcement trends? In this podcast, Stroock Partner Tom Firestone, who previously served as resident legal adviser at the U.S. Embassy in Moscow, will discuss these and related subjects with leading experts from the worlds of business, politics, journalism and academia.
On this week’s episode, Stroock Partner Tom Firestone talks to Bloomberg reporter Anna Edgerton, who specializes in tech and national security issues, and recently covered the congressional hearing on TikTok. Tom and Anna discuss these and other questions:
- What is the relationship between TikTok, ByteDance, and the Chinese Communist Party (CCP)?
- Does TikTok pose a threat to U.S. national security? If so, how serious is the threat?
- What is “Project Texas”? Is it sufficient to protect users’ personal data?
- What are the main proposals on the Hill to ban TikTok and how likely are they to succeed?
On this week’s episode, Stroock Partner Tom Firestone talks to Pavel Ivlev, a former lawyer for Yukos and Mikhail Khodorkovsky who was the subject of an Interpol Red Notice and sentenced in absentia to 10 years in prison for his role in the case.
Tom and Pavel discuss:
- The real causes of the Yukos case
- What the case tells us about the relationship of business and politics in Russia
- How the case will be viewed in Russian history
- The effectiveness of sanctions on Russian oligarchs
On this week’s episode, Stroock Partner Tom Firestone talks to Vladas Stankevicius, an experienced corporate compliance lawyer who served as an international expert for World Athletics, where he lead efforts to ingrain governance reforms and a culture of zero tolerance for doping. He also advised the World Athletics Taskforce chair as to the fitness for purpose of the compliance program of the Russian Athletics Federation.
Tom and Vladas discuss:
- The current World Anti-Doping Agency (WADA) and International Olympic Committee (IOC) sanctions against Russia
- Proposals to ban Russian and Belarussian athletes from the 2024 Olympics
- The 2014 Sochi Olympics doping scandal and the Rodchenkov Anti-Doping Act
- Various integrity violations in sports
- Best compliance practices and how to clean up sports
After the Russian invasion of Ukraine, the U.S. government froze billions of dollars in Russian Central Bank assets held in the United States. What can be done with these assets? Can they be permanently seized and used to help Ukraine? On this week’s episode, Stroock Partner Tom Firestone talks to Ingrid Wuerth Brunk, Helen Strong Curry Chair in International Law at Vanderbilt Law School. Ingrid is a distinguished scholar of international law and has written extensively on foreign sovereign immunity, transnational litigation, sanctions and other issues related to international law.
Tom and Ingrid discuss these and other questions:
- Can the U.S. government seize the Russian Central Bank assets?
- Are these assets protected by sovereign immunity?
- If the U.S. government seizes these assets, can they be used to help Ukraine?
- Should Russia be designated as a state sponsor of terrorism?
- Would designating Russia as a state sponsor of terrorism deprive it of sovereign immunity?
On this week’s episode, Stroock Partner Tom Firestone talks to Bruce Ohr, formerly head of the Organized Crime and Racketeering Section and the Organized Crime Drug Enforcement Task Forces at DOJ and now a strategist with the International Wildlife Trust, an NGO committed to combatting illegal wildlife trafficking through a distinct focus on transnational organized crime groups.
Tom and Bruce discuss:
- How does international organized crime contribute to species endangerment?
- Which species are most endangered?
- How lucrative is illegal wildlife trafficking?
- How do criminal syndicates obtain, transport and sell protected wildlife?
- How can NGOs work with national law enforcement to combat illegal wildlife trafficking?
On this week’s episode, Stroock Partner Tom Firestone talks to Andrew McCabe, former Acting Director of the FBI and now a CNN commentator and professor at George Mason University, and author of The Threat: How the FBI Protects America in the Age of Terror and Trump.
Tom and Andrew discuss:
- The Trump Mar-a-Lago documents case
- The most serious criminal threats to U.S. national security and U.S. businesses
- Russian cyber attacks
- The greatest challenge that the FBI is facing
- Politically motivated violence in the U.S.
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock Partner Tom Firestone talks to Nader Uskowi who has served as a senior advisor to the Pentagon on some of the most sensitive policy issues in Iran and Afghanistan. Nader is also the president of Sagewood Consulting LLC, and is the author of Temperature Rising: Iran Revolutionary Guards and Wars in the Middle East.
Tom and Nader discuss these and other topics:
- The current protests in Iran and the seriousness of the challenge to the regime
- The new U.S. sanctions on Iran and General License D-2
- The effect of the protests on the possible resuscitation of the Iran nuclear deal
- The effect of OPEC's announced production cuts on the political situation in Iran
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock Partner Tom Firestone talks to Drago Kos, Chair of the OECD Working Group on Bribery (WGB).
Tom and Drago discuss these and other topics:
- Drago’s lessons learned from 9 years as the head of the WGB
- The WGB’s latest recommendations on combatting foreign bribery
- Addressing the demand side of international bribery
- The importance of non-trial resolutions in foreign bribery cases
- The challenges of anti-corruption reform and reconstruction in Ukraine
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock Partner Tom Firestone talks to Elisabeth Schimpföessl, a political sociologist at Aston University, Birmingham, England. Elisabeth is the author of Rich Russians: From Oligarchs to Bourgeoisie, a sociological study of Russia’s wealthy based on over 80 interviews with oligarchs and those closest to them.
Tom and Elisabeth discuss these and other topics:
- Who are the Russian rich?
- How do they see themselves?
- Are they moving towards “bourgeois respectability”?
- Or are they only interested in “reputation laundering”?
- What effect are sanctions having on them?
- Which sanctions are most effective?
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock Partner Tom Firestone talks to Kenneth Dekleva, M.D., who is an expert on psychological profiling of world leaders, a former senior U.S. Government physician-diplomat, currently Senior Fellow at the George H.W. Bush Foundation for U.S.-China Relations, and the author of the novel The Negotiator’s Cross.
Tom and Dr. Dekleva discuss these and other topics:
- Psychological profiles of Putin, Xi Jinping and Kim Jong-un
- Was Putin’s decision to invade Ukraine “rational”?
- Is Putin likely to use nuclear weapons if he fears defeat in Ukraine?
- What psychological factors explain the Russian popular support for the war
- What psychology can teach business leaders about crisis management
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock Partner Tom Firestone talks to Dan Hoffman, a former senior executive Clandestine Services officer and three-time station chief for the CIA.
Tom and Dan discuss these and other topics:
· The murder of Russian nationalist Darya Dugina
· The Brittney Griner case and the possibility of a prisoner exchange
· How U.S. companies can best protect themselves against Russian cyber threats
· Emerging threats to U.S. companies in the new Cold War
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock Partner Tom Firestone talks to Amanda Strayer, Supervising Staff Attorney for Accountability at Human Rights First. Amanda coordinates the targeted human rights and anti-corruption sanctions coalition, a group of more than 330 NGOs using the Global Magnitsky Act and other legal authorities to hold human rights abusers and corrupt actors accountable.
Tom and Amanda discuss these pressing topics:
- The Global Magnitsky Act in the context of the war in Ukraine
- How victims of corruption and human rights abuses can use the Global Magnitsky Act to seek justice
- The new Executive Order “Bolstering Efforts to Bring Hostages and Wrongfully Detained U.S. Nationals Home”
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock Partner Tom Firestone talks to political scientist, Maria Shagina. Maria is a leading expert on the use of sanctions as a tool of statecraft and has published extensively on the current round of Russia sanctions. She is currently the Diamond-Brown Research Fellow for Economic Sanctions, Standards and Strategy at the International Institute for Strategic Studies (IISS).
Tom and Maria discuss these and other issues:
- Are the Western sanctions on Russia working?
- How Western export controls are making it difficult for Russian financial institutions to function on a day to day basis
- The role of the Eurasian Economic Union and parallel imports in Russia sanctions avoidance
- The most common Russia sanctions evasion schemes
- The EU proposal to create an EU wide enforcement agency modeled on OFAC
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock Partner Tom Firestone talks to Eric Hontz from the Center for International Private Enterprise (CIPE), where he is the director of the Center for Accountable Investments and runs the Corrosive & Constructive Capital Initiative.
Tom and Eric discuss these and other questions:
- What is “Corrosive Capital”?
- What is “Constructive Capital”?
- How can Foreign Direct Investment be used to promote transparency?
- Has the withdrawal of U.S. businesses from Russia been a net plus for transparency?
- What are the main challenges Ukrainian NGOs face in getting supplies from Europe?
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock Partner Tom Firestone talks to Gary Kalman, executive director of Transparency International U.S. (TI-U.S.). Tom and Gary discuss TI -U.S.’ proposal to increase funding for FinCEN and new and proposed anti-corruption legislation including:
- The Corporate Transparency Act and its new disclosure requirements for corporations
- The Enablers Act and proposals to extend the Bank Secrecy Act to law firms, investment advisers, art dealers and others
- The Fighting Foreign Influence Act and proposed restrictions on foreign lobbying and disclosure of foreign funds by think tanks and NGOs
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock Partner Tom Firestone talks to Holden Triplett and Bill Priestap, co-founders of Trenchcoat Advisors LLC, which specializes in protecting companies from threats posed by nation-states and similarly motivated groups. Bill led the Counterintelligence Division of the FBI. Holden led the FBI Office in China, served as the deputy head in Russia and also served as Director for Counterintelligence at the National Security Council.
Tom, Holden and Bill discuss:
- The main threats companies face from foreign governments and how they can protect themselves
- Which foreign governments pose the greatest threats
- What to do when employees are approached by foreign intelligence services
- Protecting against cyberattacks and responding to ransomware demands
- What new threats will businesses face as a result of the Russia/Ukraine and China/Taiwan situations
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock Partner Tom Firestone talks to Togzhan Kassenova, a senior fellow with the Project on International Security, Commerce, and Economic Statecraft (PISCES) at the Center for Policy Research, SUNY Albany and a nonresident fellow in the Nuclear Policy Program at the Carnegie Endowment for International Peace. Dr. Kassenova has over 20 years’ experience on nuclear politics, WMD nonproliferation, strategic trade controls, sanctions implementation, and financial crime prevention.
Tom and Dr. Kassenova discuss:
- North Korea’s WMD program and the security threat it poses
- How North Korea evades sanctions to obtain components for its WMD program
- How nuclear proliferators exploit financial institutions
- How financial institutions can improve their KYC procedures to catch proliferators
- The U.S. government’s recent advisory on North Korean IT workers
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock Partner Tom Firestone talks to William Browder, CEO of Hermitage Capital Management, Head of the Global Magnitsky Justice Campaign and the author of Freezing Order: A True Story of Money Laundering, Murder and Surviving Vladimir Putin’s Wrath. Bill was the largest foreign investor in Russia until his exposure of corruption led to him being expelled from the country. He has since become one of the leading advocates for human rights, anti-corruption, and transparency globally. His efforts resulted in, among other things, the exposure of massive Russian money laundering schemes and the passage of the Global Magnitsky Act, which authorizes sanctions against foreign government officials for human rights abuses and corruption.
Bill and Tom discuss:
- Sanctions, Putin, and the Oligarchs
- Shareholder activism as a way to combat corruption
- Russian money laundering through European banks
- What the U.S. government and businesses should be doing to fight Russian corruption
- The Global Magnitsky Act and the future of anti-corruption sanctions
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock Partner Tom Firestone talks to Justyna Gudzowska, Director of Illicit Finance Policy at The Sentry, an investigative and policy organization that seeks to disable multinational predatory networks that benefit from violent conflict, repression, and kleptocracy. Justyna previously served as an Attorney-Advisor at OFAC, as an Expert at the UN Security Council and as Lead Sanctions Lawyer at Morgan Stanley.
Justyna and Tom discuss:
- How The Sentry tracks dirty money, collaborates with law enforcement agencies, and helps inform governments’ sanctions designations
- Best practices for compliance officers for anticipating potential sanctions and new enforcement trends
- Potential upcoming “responsible business reporting requirements”
- The Sentry’s collaboration with Moody’s Analytics and new resources for conducting due diligence on potential business partners
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock Partner Tom Firestone discusses the new White House proposal to seize Russian assets and use them to “remediate harms of Russian aggression toward Ukraine.”
Tom discusses the following aspects of the proposal:
- Making sanctions and export controls violations RICO predicates
- Creating a new streamlined administrative procedure to forfeit assets
- Making it easier to forfeit property used to facilitate sanctions evasion
- Expanding the statute of limitations for foreign money laundering cases
- Making it a crime to possess “proceeds of Russian government corruption”
- Transferring seized assets to Ukraine
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock Partner Tom Firestone talks to Nader Uskowi, one of the country’s leading experts on Iran and Afghanistan. Nader has served as a senior advisor to the Pentagon on some of the most sensitive policy issues in Iran and Afghanistan and, as a private consultant, helps companies navigate the risks of doing business in the region. He is a nonresident senior fellow with the Atlantic Council, president of Sagewood Consulting LLC, and is the author of Temperature Rising: Iran Revolutionary Guards and Wars in the Middle East.
Nader and Tom discuss:
- The Iran sanctions -- what they can teach us about sanctioning Russia
- The prospects for lifting the Iran sanctions
- How some in Iran are profiting from the sanctions
- Iran and the war in Ukraine
- Lessons of the Afghanistan reconstruction effort for Ukraine
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock Partner Tom Firestone talks to Bill McCausland, Managing Director at FTI Consulting. Bill spent over 25 years with the Federal Bureau of Investigation, where he investigated Russian Organized Crime and served as Assistant Special Agent in Charge of the Office of the Special Counsel, investigating possible criminal activity by individuals associated with the Trump campaign. He also served as Chief of Counterespionage for the Central Intelligence Agency, leading efforts to identify and neutralize penetrations of the U.S. intelligence community by hostile intelligence services, non-state entities, and insider threats.
Bill and Tom discuss:
- Sanctions on Russian oligarchs
- Finding and seizing oligarch assets
- Due diligence and getting to the ultimate beneficial owners of foreign companies
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock Partner Tom Firestone talks to Steve Fisher, who spent 34 years with Citibank, including 16 years in Russia and Ukraine, and is the author of Into Russia’s Cauldron, a study of the opening of a Citibank precursor, the National City Bank of New York, in Russia in 1916, on the eve of the Russian Revolution. Steve and Tom discuss:
- The effect of the sanctions on the Russian economy
- The new sanctions on Sberbank and Alfa Bank, two of Russia’s largest banks
- Where the Russian economy will be in six months
- How long the Russian government can financially support the war in Ukraine
- Steve’s book, Into Russia’s Cauldron and historical analogies to the present situation
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock Partner Tom Firestone talks to David Lawrence, Founder and Chief Collaborative Officer of RANE. David also served for approximately 20 years as Associate General Counsel and Managing Director at Goldman Sachs, where he served on a number of the firm’s global risk-management and investment committees.
David and Tom discuss:
- How companies can make better decisions about transactions against broader risk management principles
- What are the most common mistakes companies make in terms of risk management?
- How should companies be thinking about risk in today’s global political alignment?
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock Partner Tom Firestone talks to Susan Thornton, a retired senior U.S. diplomat with almost three decades of experience with the U.S. State Department in Eurasia and East Asia, and currently a Senior Fellow and Visiting Lecturer in Law at the Yale Law School Paul Tsai China Center.
Susan and Tom discuss:
- What is China’s role in the Russia/Ukraine conflict?
- Will China give Russia military assistance?
- Will China attempt to take Taiwan?
- Will the Biden administration impose new sanctions on China and if so, what will they be?
- What do businesses need to start planning for?
On this week’s episode, Stroock Partner Tom Firestone talks to Anton Subbot, a Partner at Moscow-based Lex Borealis, who specializes in representing companies before Russian regulatory agencies. Anton and Tom discuss the following questions:
- What inducements is the government offering foreign companies to stay in Russia?
- Will the Russian government “nationalize” foreign businesses?
- What would such “nationalization” look like?
- Will Russia make it a crime to comply with Western sanctions?
- How should companies respond to inquiries and pressure from Russian regulators?
On this week’s episode of “The New Cold War: Risk, Sanctions, Compliance,” Stroock PartnerTom Firestone talks to Ed Verona, an expert on Russian energy who previously served as President of the U.S.-Russia Business Council, Executive Director of the Moscow-based Petroleum Advisory, and Country Manager in Russia and Kazakhstan for a major U.S. oil company.
Ed and Tom discuss:
- the latest round of U.S. sanctions on Russian energy imports;
- what the sanctions mean for the Russian economy and global energy markets;
- whether Russia will rely further on China as a source of demand;
- whether the U.S. and Europe may lift sanctions on Venezuela and Iran to compensate for decreased supply; and
- what additional sanctions may be coming.
Politics and legal risks are now intertwined like never before. The Biden administration has identified anti-corruption as a core U.S. national security interest. It recently imposed unprecedented sanctions on Russia, including on its Central Bank, the president and foreign minister. And in his State of the Union address, President Biden said, “The U.S. Department of Justice is assembling a dedicated task force to go after the crimes of Russian oligarchs. We are joining with our European allies to find and seize their yachts, their luxury apartments, their private jets.” At the same time, the Department of Justice has identified state-sponsored cybercrime and foreign attempts to influence U.S. politics as top enforcement priorities. What does the convergence of national security and law enforcement mean for businesses? How can they protect themselves in this new environment? What are the next enforcement trends?
In this podcast, Stroock Partner Tom Firestone, who previously served as Resident Legal Adviser at the U.S. Embassy in Moscow, will discuss these and related subjects with leading experts from the worlds of business, politics, journalism and academia. In this initial episode, Tom discusses the new DOJ “KleptoCapture” task force, what we can expect from it, what challenges it will face and what businesses should do to protect themselves.