President Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act into law on September 18, 2026, following bipartisan passage in both chambers. Among its most commercially significant provisions is a sweeping new tariff framework targeting Russia and countries that continue to buy Russian energy.

The Tariffs

The Act creates two mandatory tariff tracks, both with a hard deadline of October 18, 2026:

  • Russian goods: Duties of up to 500% ad valorem on all goods imported from Russia.
  • Secondary tariffs on third countries: Duties of up to 100% ad valorem on all goods imported from countries that are either (1) among the top 5 importers of Russian crude oil or natural gas by volume, or (2) among the top 5 countries facilitating Russian oil sanctions evasion.

Critically, all duties stack on top of existing tariffs — meaning countries already subject to Section 301 or Section 232 duties face potentially severe cumulative exposure.

Who Is Targeted?

The most likely third-country targets are China, India, and Turkey, which appear across multiple qualifying tracks as major buyers of Russian energy and facilitators of sanctions evasion. Slovakia, Hungary, and the UAE are also at elevated risk. The EU is not treated as a single country — individual member states are assessed separately.

The Escape Valves

The Act provides several mechanisms through which countries or businesses may seek relief — but none are straightforward.

Natural gas exception. A country identified as a top importer of Russian natural gas may avoid secondary tariffs if its imports represented less than 15% of Russia’s total annual gas exports during the relevant 12-month period and it has taken “significant steps” to reduce those imports. This exception does not apply to crude oil importers or sanctions evasion facilitators, and the undefined phrase “significant steps” gives the Administration broad discretion over who qualifies.

Presidential waiver. The President may waive any duty under the Act on national interest grounds. However, this requires a formal, unclassified written certification to Congress explaining the basis for the waiver — making it a politically visible act rather than a quiet administrative tool. The waiver mechanism is best understood as a safety valve for exceptional diplomatic circumstances, not a general opt-out from mandatory tariff obligations.

Termination. Tariffs can be terminated entirely, but only upon certification that Russia has signed a peace agreement with Ukraine and ceased all relevant military hostilities. Any termination is subject to a 30 to 60 day congressional review window during which Congress may pass a joint resolution to block it.

Winddown period. Entities engaged in genuine winddown or divestiture of Russian operations have a 270-day grace period from enactment — expiring June 15, 2027 — during which the Act’s measures do not apply to their winddown activities.

The overall picture is one of mandatory tariffs with narrow, carefully conditioned relief. The Administration retains some flexibility through rate-setting (duties can be set anywhere between greater than zero and the statutory ceiling) and national interest waivers, and may use these tools as leverage in bilateral negotiations with affected countries. But there is no general executive discretion simply to decline to impose the tariffs — the “shall” language and “notwithstanding any other provision of law” clause make non-compliance without formal justification legally untenable.

The U.S. Department of Commerce has initiated antidumping (“AD”) and countervailing duty (“CVD”) investigations of Linear Hydraulic Cylinders and Parts Thereof from Canada, China, India, Mexico, and South Korea, effective September 8, 2026. The AD investigations cover imports from all five countries, while the CVD investigations cover imports from China, India, and Mexico.

The investigations stem from petitions filed on July 29, 2026 by the Hydraulic Cylinders Fair Trade Coalition and several U.S. producers. Commerce initially delayed its initiation determination after finding that the petitions did not clearly establish the required level of U.S. industry support and therefore polled the domestic industry. Based on the polling responses, Commerce determined that the statutory industry-support requirements were satisfied and that the petitions were filed on behalf of the domestic industry.

During that extended pre-initiation period, Commerce also continued to question the petitioners about the proposed scope, and in particular its inclusion of components used in third-country production. In a September 4, 2026 response to Commerce’s second supplemental questionnaire, the petitioners rejected several proposals from Commerce that would have narrowed the scope.

Petitioners Seek to Preserve Coverage After Third-Country Assembly

One of the most significant positions in the September 4 filing concerns hydraulic-cylinder components that are incorporated into finished cylinders in third countries.

Commerce asked the petitioners to consider language stating that covered steel barrels are within scope when imported or invoiced separately from a hydraulic cylinder. The petitioners declined, explaining that such language would narrow their intended scope. They stated that they also intend to cover steel barrels and piston rods from a subject country when those components are incorporated into hydraulic cylinders in a third country. The petitioners expressly gave the following example: a Chinese steel barrel incorporated into a hydraulic cylinder in Malaysia should remain subject to any China AD and CVD duties imposed as a result of the investigations when the finished cylinder enters the United States.

The practical consequence of the petitioners’ position is significant. Under their proposed approach, assembly of a hydraulic cylinder in a non-subject country does not remove covered subject-country barrels or piston rods from the investigations. Importers would be required to determine the origin of those components and apply the AD/CVD duties, if any, to those components’ relative value.

Petitioners Also Advocate Multi-Country Duty Treatment

The September 4 filing goes further where a covered component from one subject country is incorporated into a hydraulic cylinder produced in another subject country.

The petitioners use the example of a Chinese barrel incorporated into a hydraulic cylinder in Mexico. Under their proposed approach, the Chinese barrel would be subject to China AD/CVD duties, while the remaining value of the hydraulic cylinder produced in Mexico would be subject to any applicable Mexico AD/CVD duties.  The petitioners explain that this treatment is intended to prevent foreign companies from engaging in what they call “duty shopping” or “duty washing” by incorporating covered components from a country with higher dumping margins or subsidy rates into a cylinder produced in another subject country with lower rates.

Commerce’s initiated scope likewise retains broad third-country language. It provides that subject merchandise includes covered hydraulic cylinders, barrels, and rods that undergo “assembly or minor processing in a third country” in a manner that would not otherwise remove the merchandise from scope if performed in the country of manufacture.

This approach would create unusually complex duty calculations and origin-tracing requirements for hydraulic cylinders and components moving through multi-country supply chains.

Petitioners Refuse to Narrow the Chapter 84 Provision

The petitioners also rejected Commerce’s request to narrow the proposed downstream-product language.

Commerce specifically asked the petitioners to replace the broad reference to any equipment or parts of equipment classified in Chapter 84 with specified four- or six-digit HTSUS provisions covering equipment relevant to hydraulic cylinders. The petitioners declined. They argued that the machinery applications using hydraulic cylinders are too varied to identify on an HTS-specific basis and that Chapter 84 is “reasonably inclusive” of equipment and machinery likely to incorporate hydraulic cylinders. The resulting proposed scope continues to cover hydraulic cylinders and parts meeting the physical description when they are “attached to or imported with any equipment or parts of equipment classified in Chapter 84”, while specifying that only the hydraulic cylinder is covered by the scope.

Commerce retained that broad language in the initiated scope. The scope includes hydraulic cylinders and parts meeting the physical description when they are “attached to or imported with any equipment or parts of equipment classified in Chapter 84” of the HTSUS. Where a covered hydraulic cylinder is attached to or imported with Chapter 84 equipment, the scope specifies that only the hydraulic cylinder is covered.

The compliance implications are substantial. An importer entering finished Chapter 84 equipment, such as a forklift or excavator, will need to determine whether the equipment contains a covered hydraulic cylinder, the origin and producer of that cylinder or its covered components, the value attributable to the subject merchandise, and the applicable AD/CVD duty.

Broad Component Coverage Also Remains

The revised proposed scope continues to cover certain steel barrels and steel piston rods, as well as any part or component of a hydraulic cylinder attached to, assembled with, or shipped with a covered steel barrel or piston rod. It also includes attachments, parts, or components imported with, attached to, or invoiced with a hydraulic cylinder or covered barrel or rod, including mounting parts, connectors, pistons, rings, gaskets, seals, valves, sensors, hydraulic tubing, and hydraulic lines. Those ancillary items are excluded when imported or invoiced separately from a hydraulic cylinder. Commerce also asked the petitioners to consider adding diameter dimensions to distinguish covered piston rods from piston rods used in other applications. The petitioners declined, explaining that piston-rod diameter may vary significantly relative to cylinder bore size depending on the particular cylinder design.

Importantly, Commerce itself has now expressed “concerns related to the administrability of certain provisions in the proposed scope.” Commerce specifically identified the definition of covered steel barrels, including language concerning when a barrel has been processed to the point that its sole or predominant use is as a barrel for an in-scope hydraulic cylinder, as an outstanding issue. Commerce adopted that language for purposes of initiation but stated that it will continue evaluating the scope and may make additional modifications to clarify what products are covered or excluded.

How This Scope May Affect Your Company

Commerce has opened the formal scope-comment process. Initial scope comments are due by 5:00 p.m. ET on September 28, 2026, and rebuttal comments are due by 5:00 p.m. ET on October 8, 2026. Commerce specifically invited parties to address its administrability concerns and requested that factual information relevant to scope be submitted during this period. Scope comments must be filed simultaneously on the records of the concurrent AD and CVD investigations. The same September 28 and October 8 deadlines apply to comments and rebuttal comments concerning the physical product characteristics Commerce will use in its AD questionnaires for cost reporting and product comparisons.

Commerce has also begun respondent selection. For Canada, India, South Korea, and Mexico, Commerce released CBP import data under administrative protective order on September 8 and indicated that comments on the CBP data and respondent selection are due within three business days after publication of the initiation notice, with no rebuttal comments permitted. For China, Commerce will use quantity-and-value questionnaires for respondent selection, with responses due by 5:00 p.m. ET on September 22, 2026.

Companies whose merchandise or supply chains are implicated should review the initiated scope carefully and consider participating early. The scope-comment process is particularly important for companies that import or export downstream machinery or rely on multi-country supply chains and may not otherwise view themselves as participants in a hydraulic-cylinder investigation.

Key Takeaway: U.S. Customs and Border Protection (“CBP”) is considering amending its regulations to require new disclosures designed to give the agency greater visibility into the supply chains of goods imported into the United States. The proposals target three areas: 1. enhanced identification of parties involved in importation; 2. integration of technical tracing solutions; and 3. collection of foreign export documentation.  Crowell is available to provide support to clients in preparing responses to CBP’s ANPRM, in advance of CBP’s deadline on December 1, 2026.

What Happened: On September 2, 2026, CBP issued an advance notice of proposed rulemaking (“ANPRM”) titled, “Heightened Import Disclosures for Supply Chain Visibility.” CBP seeks public comments on sixty-four (64) questions by December 1, 2026.  The answers will help CBP develop changes in the regulations, which will be issued at a later date. 

Scope: Key elements of the ANPRM include:

  • Foreign Export Documentation: CBP is exploring whether importers of record should be required to submit or retain documentation that foreign exporters provide to their own customs authorities, including export declarations, commercial invoices, packing lists, certificates of origin, and export licenses or permits.
  • Party Identification and Global Business Identifiers: CBP is considering replacing or supplementing the existing manufacturer or shipper identification code (MID) with a Global Business Identifier (GBI).  The GBI is a unique private-sector identifier that includes the DUNS number, Global Location Number (GLN), Legal Entity Identifier (LEI), and Altana ID.  The GBI is currently under pilot testing in the voluntary National Customs Automation Program (NCAP) test.
  • Innovative Supply Chain Tracing Technologies: CBP is evaluating AI-driven and other private-sector tracing solutions to detect illegal transshipment before goods arrive at or are released from the U.S. border.

Rationale for Change: The ANPRM is rooted in Executive Order (E.O.) 14411, “Strengthening Customs Enforcement,” signed by the President on June 3, 2026.  E.O. 14411 emphasizes the importance of customs enforcement for national security, foreign policy, and the U.S. economy, and specifically addresses compliance with laws governing forced labor, rules of origin, origin marking, intellectual property, revenue collection, and product safety.

Section 3 of E.O. 14411 directly mandates CBP to establish heightened import disclosure requirements, including: (a) disclosure of foreign tax identifiers, global business identifiers, and detailed supply chain and production method information; and (b) submission of documentation that foreign exporters were required to file with their own customs administrations prior to export to the United States. E.O. 14411 also directs CBP to leverage the Customs Trade Partnership Against Terrorism (“CTPAT”) program to strengthen enforcement across the international supply chain.

CBP maintains that existing tools such as the MID have significant shortcomings: the code is derived from name and address data, is not always unique or consistent, and is not always available to CBP early enough in the entry process to be operationally useful.  Separately, it claims that illegal transshipment continues to deprive the U.S. government of lawful revenue and threatens economic security, prompting CBP to seek more resource-efficient, technology-driven interdiction methods.

Implications for Importers and Trade Compliance Professionals: If the ANPRM progresses to a Notice of Proposed Rulemaking (“NPRM”), the resulting regulations could apply across entry types, commodities, countries, and modes of transportation, with CBP also considering phased implementation timelines and differential treatment for small entities, foreign importers, CTPAT participants, and high-volume filers.  Compliance teams should begin assessing their current supply chain documentation practices now, particularly their ability to obtain and retain foreign export documentation from overseas suppliers.  This may raise practical challenges around document availability, lead times, and accuracy verification.

The ANPRM also signals that CTPAT minimum security criteria (MSC) may be expanded to include cybersecurity and data integrity requirements, potentially including prohibitions on the use of foreign-controlled logistics platforms such as LOGINK that have been identified as national security risks.  CTPAT members and applicants should evaluate their current logistics platform arrangements in light of these potential new criteria.

Companies are strongly encouraged to submit substantive comments by the December 1, 2026, deadline. CBP has indicated that numerical and quantitative responses such as cost and benefit data will be particularly useful.  Commenters should reference specific question numbers within their submissions.  Crowell is available to provide support to clients in preparing responses to CBP’s ANPRM.

Crowell will continue to monitor CBP’s supply chain visibility rulemaking initiatives and further regulatory developments related to heightened import disclosure requirements under E.O. 14411.

The U.S. Department of Commerce must decide by September 8, 2026 whether to initiate antidumping (“AD”) and countervailing duty (“CVD”) investigations of Linear Hydraulic Cylinders and Parts Thereof from Canada, China, India, Mexico, and South Korea.

The petitions, filed on July 29, 2026, seek AD investigations of imports from all five countries and CVD investigations of imports from China, India, and Mexico. The alleged AD margins are substantial: 60.16%–163.42% for Mexico, 78.70%–149.33% for South Korea, 102.59%–461.46% for India, 125.77%–511.41% for China, and 248.33%–744.85% for Canada.

The proposed scope is particularly noteworthy because it extends beyond stand-alone hydraulic cylinders. The petition expressly seeks to cover otherwise subject hydraulic cylinders that are “attached to or imported with any equipment or parts of equipment classified in Chapter 84” of the HTSUS, while providing that “only the hydraulic cylinder is covered by the scope.” As a result, the proposed scope could affect imports of downstream Chapter 84 machinery, including forklifts, excavators, front-end loaders, telehandlers, and certain other construction and material-handling equipment, containing covered cylinders from the subject countries.

Commerce Is Polling the U.S. Industry Before Initiation

Commerce ordinarily determines whether to initiate an AD or CVD investigation within 20 days after a petition is filed. Before initiating, Commerce must determine that a petition was filed “by or on behalf of” the relevant U.S. industry. Producers supporting a petition must account for:

  • at least 25 percent of total U.S. production of the domestic like product; and
  • more than 50 percent of the production accounted for by U.S. producers expressing either support for or opposition to the petition.

In this case, Commerce determined that it was not clear from the petitions whether the statutory industry support requirements had been satisfied and therefore polled U.S. producers regarding their support for or opposition to the petitions. When Commerce must poll or otherwise determine industry support, the statute permits Commerce to extend the normal 20-day initiation period by an additional 20 days. 

The producers’ polling responses are now on the record, and Commerce has provided interested parties an opportunity to comment on those responses. Commerce must now determine whether the industry support requirements are satisfied and whether to initiate the investigations no later than September 8, 2026. 

What Happens If Commerce Initiates?

If Commerce initiates, several important procedural steps will follow quickly. Commerce is expected to establish deadlines for scope comments and rebuttal comments and begin the process of selecting mandatory respondents in the AD and CVD investigations. Depending on the country and proceeding, Commerce may rely on U.S. Customs and Border Protection import data or information obtained from potential respondents to select the exporters or producers it will individually examine.

The ITC has already begun its preliminary injury investigations. Because Commerce extended its initiation deadline, the ITC revised its schedule and must now reach its preliminary injury determinations within 25 days after the date on which it receives notice from Commerce of initiation of the investigations.  If Commerce initiates on September 8, the ITC determinations would be expected in early October 2026.

If the ITC reaches affirmative preliminary injury determinations, the Commerce investigations will continue. Commerce will then issue preliminary AD and CVD determinations under the applicable statutory timelines, subject to extensions. For entries subject to affirmative preliminary rates, Commerce may instruct CBP to suspend liquidation and require cash deposits at the applicable preliminary rates.

Why Early Participation May Be Important

The proposed scope is broad. It covers certain linear acting hydraulic cylinders with:

  • a barrel made of steel;
  • a bore size (inner diameter) of at least 25.4 millimeters (1 inch); and
  • a return (retracted) length of at least 102.1 millimeters (4 inches).

The proposed scope covers numerous cylinder designs, including tie-rod, welded body, telescopic, plunger, rodless, differential, position-sensing, single-acting, double-acting, displacement, ram-type, piggy-back, double-rod, rod-fed, and spring-return linear acting hydraulic cylinders. It also covers certain steel barrel components, steel piston rod components, and components attached to, assembled with, or shipped with a covered steel barrel or piston rod. In addition, attachments, parts, or components imported with, attached to, or invoiced with a covered hydraulic cylinder or component may be included. The subject merchandise is currently identified under HTSUS statistical reporting numbers 8412.21.0015, 8412.21.0030, 8412.21.0045, 8412.21.0060, 8412.21.0075, and 8412.90.9005. The written description of the scope, however, is dispositive.

Most notably, the proposed scope expressly includes hydraulic cylinders meeting the physical description above when they are “attached to or imported with any equipment or parts of equipment classified in Chapter 84” of the HTSUS, while specifying that “only the hydraulic cylinder is covered by the scope.” This means the investigations could affect not only imports of stand-alone hydraulic cylinders, but also imports of Chapter 84 machinery containing covered cylinders, such as forklifts, excavators, front-end loaders, telehandlers, and certain other construction and material-handling equipment.

This downstream-product language could create significant administration and compliance issues. When a covered hydraulic cylinder is imported by itself, the subject merchandise, producer or exporter, entered value, and applicable AD/CVD treatment can be identified directly. Those determinations become more complicated when the cylinder is incorporated into a larger piece of equipment before importation. Questions may arise regarding whether the equipment contains a cylinder meeting the scope criteria, the country of origin and producer or exporter of that cylinder, the value attributable to the subject merchandise, and how the cylinder should be reported at entry when it is not separately imported or classified.

Companies that may be affected should closely monitor Commerce’s September 8 initiation decision and, if the investigations are initiated, the early procedural deadlines that follow. The scope-comment process may be particularly important given the breadth of the proposed coverage, and interested parties should consider whether early participation is warranted to address scope issues before the investigations progress further.

Webinar | 09.15.26, 12:00 PM EDT – 12:45 PM EDT | CLE Offered

Join Crowell & Moring for a timely webinar on the FCC’s recent expansions of its Covered List, which now prohibits foreign-made routers, power inverters, and advanced robotic devices on national security grounds. These expansions carry broad and immediate consequences for companies across multiple industries—not only those in the communications sector, but also businesses in the technology, energy, and manufacturing sectors that rely on these devices in their operations, supply chains, and procurement pipelines.

Attendees will gain an understanding of the practical implications of these bans and have the opportunity to ask questions and gain direct insights from attorneys who have been at the forefront of advising clients on the FCC Covered Lists and national security regulatory matters.

Click here for more information.

On August 26, 2026, President Trump issued EO 14420, prohibiting the acquisition, importation, transfer, or installation of foreign-produced bulk-power system electric equipment that meet certain criteria.

Click here to continue reading the full version of this alert.

On July 28, 2026, the Federal Communications Commission (FCC) updated its Covered List — established through the Secure and Trusted Communications Networks Act — to include foreign-produced connected power inverters and advanced robotic devices, following an executive branch national security determination that they “pose unacceptable risks to the national security of the United States or the safety and security of United States persons.” Equipment on the Covered List is ineligible for FCC equipment authorization, effectively prohibiting the import, sale, or marketing of those products without an exception or approval.

A few weeks later, on August 20, the FCC issued a new public notice and updates to its Frequently Asked Questions (FAQ) that modifies its Covered List entry for foreign-produced power inverters, following a second National Security Determination from the U.S. Department of War (DoW), and updates its guidance on foreign-produced advanced robotic devices.

Click here to continue reading the full version of this alert.

Key Takeaway: Domestic reporting companies—meaning entities formed under the laws of any U.S. state or Tribal jurisdiction—have no beneficial ownership information reporting obligations to FinCEN under the final rule.

What happened: On August 14, 2026, the Financial Crimes Enforcement Network (“FinCEN”) published a final rule revising its previous rules implementing the Beneficial Ownership Information (“BOI”) reporting requirements of the Corporate Transparency Act (“CTA”). The final rule is effective immediately. The final rule makes permanent, and modestly expands, the relief first introduced by FinCEN in its March 26, 2025 interim final rule, which exempted domestic reporting companies (i.e., U.S.-formed entities) from any obligation to report BOI to FinCEN, and exempted foreign reporting companies from any obligation to report BOI with respect to U.S.-person beneficial owners. FinCEN also has said that it will delete the identifying information that companies reported to it about U.S.-person beneficial owners and company applicants, as well as persons who requested a “FinCEN ID” to aid BOI filings. In addition to the rule itself, FinCEN issued related FAQs. FinCEN cited issues of privacy, burden, and the ability to obtain information on the beneficial owners of U.S. companies as reasons for the final rule.

Scope: The final rule goes further than the interim rule in two respects: (1) it exempts foreign reporting companies from reporting information about U.S.-person company applicants, a category the interim rule did not address, and (2) it eliminates the obligation for U.S. persons to update or correct information previously submitted in connection with a FinCEN identifier. These exemptions are implemented through new “special exemptions” in the regulatory text, providing that reporting companies are exempt from reporting BOI of any U.S. persons who are beneficial owners or company applicants, and that U.S. persons are exempt from providing BOI with respect to any reporting company for which they are a beneficial owner or company applicant.

Practical Effect: Under the final rule, only certain foreign entities registered to do business in a U.S. state or Tribal jurisdiction—and not otherwise exempt—remain “reporting companies” subject to the obligation to report identifying information on their beneficial owners and company applicants (the persons involved in registering the company to do business in the U.S.). However, even then, such foreign reporting companies are not required to report BOI for any U.S. person beneficial owners or company applicants, though the foreign reporting company still must submit identifying information about the entity itself (including its legal name, any trade or DBA names, its U.S. business address where applicable, its foreign jurisdiction of formation, the U.S. jurisdiction of first registration, and its tax identification number), as well as information on all non-U.S. beneficial owners or company applicants. Beneficial owners remain defined as natural persons who exercise substantial control, or own or control 25% or more of the entity, directly or indirectly. Non-U.S. persons who hold FinCEN IDs also must still update or correct that information within 30 days of any change or upon becoming aware of an inaccuracy.

Two Caveats: Companies should be aware that the FinCEN final rule does not displace either state-level disclosure obligations or compliance with FinCEN’s Customer Due Diligence (“CDD“) final rule. For instance, New York’s LLC Transparency Act (“LLCTA“) independently requires all non-U.S. LLCs registered to do business in New York to file with the New York Department of State (1) beneficial ownership information, or (2) attestations of exemption with the Department by the compliance deadlines, if exempt from filing BOI, using definitions linked to the Corporate Transparency Act. Companies with New York LLC interests should not assume that FinCEN’s curtailment of federal reporting obligations relieves them of their LLCTA compliance obligations and should monitor developments in Albany closely. Additionally, a 2016 FinCEN customer due diligence rule (“CDD Rule”) still requires banks and certain other “covered financial institutions” to obtain identifying information about the beneficial owners of their “legal entity customers,” using similar (but not identical) definitions and requirements when these customers open a “new account.” Because this requirement is tied to the opening of an account with certain U.S. financial institutions, it captures a different population then the BOI Rule, including many U.S. companies that are exempt from reporting under the BOI Rule.

Crowell assists companies of all sizes in complying with FinCEN and state-level AML reporting obligations. Please contact any of the authors with any questions about BOI reporting obligations.

What You Need to Know 

Key takeaway #1: On August 13, 2026, FinCEN issued a Financial Trend Analysis showing 67,540 Bank Secrecy Act (BSA) reports filed between 2023 and 2025 involved more than $4.9 billion in reported suspicious activity potentially related to human smuggling. 

Key takeaway #2: Money services businesses (MSBs) filed approximately 97% of the reports, while depository institutions filed only approximately 3% but accounted for nearly 61% of the total reported suspicious activity. 

Key takeaway #3: Financial institutions should consider whether the red flags and typologies highlighted in the FTA are appropriately incorporated into their automated transaction-monitoring scenarios for detecting potentially suspicious human smuggling-related activity. 

Background 

On August 13, 2026, the Financial Crimes Enforcement Network (FinCEN) issued a Financial Trend Analysis (FTA) examining patterns and trends in BSA data associated with suspected human smuggling (i.e., the transportation of persons into or within the U.S. that are not authorized to be there). The analysis is based on 67,540 BSA reports filed between January 1, 2023, and December 31, 2025.  The analysis sample comes from reports that included a code from a 2023 alert that FinCEN asked financial institutions to include in suspicious activity reports (“SARs”) and other reporting mentioning suspicious activity relating to human smuggling.   Although the reports were filed between 2023 and 2025, they may describe activity before this period. 

The reports show a total of $4.9 billion in potential human smuggling activity, which may include both attempted and completed transactions.  One notable feature of the reporting is that although MSBs filed approximately 96.6% of the reports, they accounted for only approximately $519 million in reported suspicious transactions (10.6% of the total value of reported activity).  By contrast, depository institutions filed only 3% of the reports, but those filings accounted for approximately $3 billion, or 61% of the total value of the reported suspicious activity.  FinCEN says that BSA reports filed by depository institutions were less likely than those filed by MSBs to involve an international transfer, and that the amounts involved in individual reports were typically far higher, with several single reports noting transactions of more than $100 million. 

The bulk of the reports concerned suspects with addresses in the U.S. (especially Texas, California, New York, Florida, and New Jersey) followed by Mexico, and distantly by Guatemala, Honduras, Colombia, and other countries. 

The FTA comes against a background of previous FinCEN guidance regarding human smuggling (including alerts on January 13, 2023 and September 11, 2014)  and recent efforts to target the activity of cartels and transnational criminal organizations. Most recently, Executive Order 14406, Restoring Integrity to America’s Financial System, highlighted the use of cross-border funds transfers to facilitate human trafficking and directed Treasury to issue guidance to financial institutions identifying related red flags and suspicious-activity typologies. Other recent efforts include a major MSB enforcement initiative along the southwest U.S. border, a southwest border geographic targeting order (GTO), and the State Department’s designation of various Central and South American cartels as foreign terrorist organizations (FTOs). 

Key Indicators Identified by FinCEN 

FinCEN quantified several recurring typologies that MSB filers noted as indicators of suspicious activity in their BSA reports: 

Indicator Percentage 
 
No verifiable familial connection between originator and beneficiary 57% 
Money flows outside typical transaction patterns 39% 
Geographic activity outside the customer’s usual pattern 23% 
Money sent to high-risk jurisdictions 20% 
Money sent to different unrelated receivers 17% 
Money sent along known migration routes 13% 
Structuring to avoid recordkeeping requirements 11% 
One originator sent money to many beneficiaries 5% 
Many originators sent money to one beneficiary 1% 

Source: FinCEN, Human Smuggling: 2023-2025 Threat Pattern & Trend Information, Figure 6. FinCEN Financial Trend Analysis 

FinCEN notes that a single BSA report may contain multiple indicators.  Depository institution filings tended to highlight frequent cash deposits, peer-to-peer (P2P) payments and wire transfers among persons and businesses with no apparent relationship, and excessive cash deposits and withdrawals at ATMs along the U.S.-Mexico border, often by persons not employed by cash-intensive businesses. 

FinCEN noted that many of these typologies are consistent with human smuggling “red flags” the agency has published in previous alerts and guidance. 

One institution, for example, identified a potential funnel account that received numerous small-dollar P2P transfers from more than 30 senders. The customer moved incoming funds between checking and savings accounts before making structured cash withdrawals below currency transaction reporting thresholds at multiple branches and ATMs. FinCEN also highlighted suspicious activity involving travel agencies, including excessive cash and third-party deposits, P2P payments for purported visa services, airline refunds, bulk airline-ticket purchases, and charter flights. FinCEN noted that such activity may involve sham travel agencies as well as legitimate businesses that may be unwittingly facilitating human smuggling. 

Implications for Financial Institutions 

FinCEN’s analysis provides financial institutions with additional data and context about potential human smuggling, including the potential weighting of different red flags. Financial institutions may wish to consider whether the red flags and typologies highlighted in the FTA are appropriately reflected in their automated transaction-monitoring scenarios, including scenarios involving combinations of customer, counterparty, geographic, and transactional indicators.  

The deadline to file OFAC’s Annual Report of Blocked Property (“ARBP”) is approaching fast.  All “U.S. persons” — including U.S. financial institutions, companies, and individuals — who hold property blocked pursuant to any OFAC sanctions program should take a moment to assess their reporting obligations, as set forth in 31 C.F.R. § 501.603.

This annual reporting obligation applies across all OFAC sanctions programs and covers a wide range of asset types — from bank accounts and wire transfers to securities, real estate, digital assets, and intangible property.

OFAC rules require all U.S. persons to report to OFAC by September 30, 2026, any blocked property they held as of June 30, 2026.

Who Must File an ARBP with OFAC?

  • Any U.S. person holding blocked property as of June 30, 2026.  A “U.S. person” is typically defined to include United States citizens, permanent resident aliens, entities organized under the laws of the United States or any jurisdiction within the United States (including their foreign branches), and any person physically located in the United States. 
  • With respect to property blocked under OFAC’s Cuban Asset Control Regulations, the reporting obligation also applies to “persons subject to the jurisdiction of the United States,” which has a similar definition but includes non-U.S. subsidiaries of U.S. entities.

What Constitutes “Blocked Property”?

  • The term “blocked property” means property in any form, whether digital, physical, tangible or intangible, that is blocked pursuant to OFAC regulations.

What is Not Considered “Blocked Property” for the Purposes of the ARBP?

  • Property that was unblocked or permitted to be transferred by an OFAC general or specific license, or that was previously blocked pursuant to a sanctions program that was terminated on or before June 30, 2026, unless the relevant specific or general license includes a condition requiring the submission of a separate unblocking report.
  • Property that was unblocked pursuant to OFAC’s removal of a person from OFAC’s SDN List.
  • Property that is subject to “reject” sanctions rather than blocking sanctions.  These prohibit transactions involving the property but do not require a U.S. person to immobilize and retain the property.
  • Assets immobilized pursuant to Directive 4 of Executive Order 14024.

How to File an ARBP with OFAC

  • Individuals or entities filing an ARBP with OFAC must use spreadsheet form TD-F 90-22.50 to make their reports. Please note that OFAC only accepts the most current version of the form (OMB No. 1505-0164).
  • Guidance on filing the 2026 ARBP, including how to complete OFAC’s ARBP spreadsheet, may be found here.
  • The ARBP must be submitted via the OFAC Reporting System (ORS).
  • First-time ORS users should email OFACReport@treasury.gov to request registration instructions in advance of the deadline. Establishing an account usually takes 24 hours.  As a result, individuals or entities expecting to file an ARBP with OFAC may wish to request access credentials well before September 30th.

Common Issues with ARBPs

According to OFAC guidance, the most common reasons for OFAC to return an ARBP submission include:

  • Incorrect ORS Report IDs;
  • Missing or incomplete sanctions target information;
  • Failure to explain the sanctions target’s property interests in the property listed on the ARBP; and
  • Formatting changes to the Excel template (e.g., password-protecting the file) that prevent OFAC from reviewing the submission.

Crowell assists financial institutions, multinational enterprises, technology companies, startups, and individuals in filing ARBPs.  Please contact any of the authors with any questions about OFAC’s blocked property report requirements.