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Chief Examiner Reminds SD Trusts to Uphold Sanctions, Watch for Crypto-Shenanigans

The South Dakota Division of Banking recognizes we can and should do our part to support the national effort to support Ukraine against Russian invaders. Chief Trust Examiner Matt Schlechter is telling South Dakota’s trust companies to make sure they are cooperating with the feds in implementing sanctions against Russia:

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 [Matt Schlechter, Chief Trust Examiner, “Memo from the SD Division of Banking,” South Dakota Trust Association, 2022.03.04]

Schlechter also tells the trusts to keep an eye out for any customers trying to use cryptocurrency to dodge sanctions:

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 [Schlechter, 2022.03.04].

Governor Kristi Noem and House Majority Leader Kent Peterson insist that we can trust the trusts not to help Putin and the oligarchs:

Noem said she was not aware of any Russian assets in South Dakota’s trust industry and praised the industry’s strong vetting process for setting up trusts.

“It’s all private information,” Noem said. “Our trust industry does have integrity and it has been proven to be an outstanding lawful system in the country.”

…House Majority Leader Kent Peterson (R-Salem) says he supports the trust industry as it is.

“They have a very due-diligence process when they set these up,” Peterson said [Eric Mayer, “Noem, Lawmakers Not Worried About Any Russian Connections to South Dakota’s Trust Industry,” KELO-TV, 2022.03.03].

I appreciate our public officials’ assurances that we’re not helping the Russian aggressors, but I have to wonder whatever happened to the good old days of the Cold War, when Ronald Reagan regularly poked the Soviet bear by co-opting the Russian proverb, “Trust but verify“?


  1. John 2022-03-04 14:09

    Yes, trust, but verify.
    If you trust a bankster, I have a Budapest Memorandum of a security guarantee for Ukraine that I will sell you.

    How about the SD Retirement Fund . . . are/were they holding Russian equities, bonds, currency, assets?

  2. andy 2022-03-04 14:44

    As per AP article written by Stephen Groves and published in the SF Argus on 12-8-21 citing the Pandora Papers; “associates of Vladimir Putin have money in SD trusts.

  3. Nix 2022-03-04 16:05

    Noem said that she was not aware of any
    Russian assets in South Dakota’s trust industry and praised the industry’s strong vetting process for setting up trusts.

    BULL SH* T

  4. mike from iowa 2022-03-04 16:34

    Noem sorely knows Putie is up to a trail ride with her and her horse. Maybe get his face on Mt Rushmore.

    I can’t see magats going above and beyond trust regs to avoid helping Russia. I[‘m sure they’d declare it government overreach and pass laws designed to prevent the state from helping out against Russia.

  5. Mark Anderson 2022-03-04 18:05

    Well, Kent and Kristi like their money well laundered. It’s krisp and klean, certainly not an underground situation.
    Just exactly, what does South Dakota get out of the trust? Is it just a show horse like your governor, or does South Dakota make money off of others evil deeds?

  6. jerry 2022-03-04 20:43

    Pandora Paper is more reliable than the word of South Dakota trusts. Open the register and stop being Putin lapdogs, the squatting is unbecoming.

  7. andy 2022-03-05 10:02

    As Ukrainians are fleeing from or dying in their homes; SD law makers will soon be returning to theirs. Is it not fair to ask them, what did you do to freeze Putin’s blood money in our state? Will you help or hinder US Attorney General Merrick Garlands investigation into Putin’s assets being held in the United States?

  8. RST Tribal Member 2022-03-05 12:17

    Dang, 45 signaled to leave his genius dictator buddy alone. South Dakota inept inbred republicans in Pierre and Washington are all twisted up.

    It is for love of country or quest for power. Jan 6th is testimony to what was sought at any and all costs. This moment in time the republicans cannot decide which its going to be.

    The follies in Pierre will be closing up soon giving everyone a break for 9 months. Unless Noemie aborts the quiet with a call for action especially between November and January.

    Not helping Putin and the oligarchs is not what 45 signaled. Now what? We’ll see. Inept. Inbred. Republicans.

    November 2022 is time for change.

  9. leslie 2022-03-14 10:22

    Russia’s war in Ukraine has finally led the British government to go after ultrawealthy Russians in London. But curbing the flood of corrupt money …

    in order to end Putinism—we have to dismantle the world of offshoring. And that starts in the West.


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