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Following President Trump’s trip to Asia, sanctions policies for North Korea continue to evolve. The U.S. government has strengthened sanctions through legislation and Presidential Executive Orders. Further, it is enforcing its secondary sanctions against companies doing business with the North Korean regime, thus far targeting banks, businesses and individuals. The UN Security Council has approved resolutions imposing sanctions on North Korea in reaction to its nuclear and missile tests. Aggressive enforcement by the United States and actions by China and other Asian countries in light of the UN resolutions should be expected. Indeed, President Trump recently tweeted that China would be “upping” sanctions against North Korea.

Below is a summary of key pronouncements from the U.S. government, UN, and other countries.

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On November 8, 2017, the Department of Treasury’s Office of Foreign Assets Control (“OFAC”) and the Department of Commerce’s Bureau of Industry and Security (“BIS”) announced amendments to the Cuban Assets Control Regulations (“CACR”) and Export Administration Regulations (“EAR”). In addition, the State Department published a list of entities and subentities deemed to be under the control or to act on behalf of the Cuban military, intelligence, or security services or personnel. These steps implement the changes to the Cuba sanctions program announced by the President in his June “National Security Presidential Memorandum on Strengthening the Policy of the United States Toward Cuba” (“NSPM”). The changes reflect adjustments to the broader Cuba reform initiated by former President Obama in January 2015. A majority of the general license and guidance issued since that time remain in effect.

The key changes to the Cuba sanctions program are as follows:

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On November 1, 2017, the Department of Commerce’s Bureau of Industry and Security (BIS) introduced clarifications to the Export Administrative Regulations (EAR) for the use of license exception “Governments, International Organizations, International Inspections under Chemical Weapons Convention, and the International Space Station” (GOV), and license exception “Strategic Trade Authorization” (STA). BIS explained that the agency is not changing the requirements for the use of these exceptions, instead it is only providing guidance to answer questions frequently received from the public.

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This week, the U.S. government took several steps to implement sections of the Countering America’s Adversaries Through Sanctions Act of 2017 (CAATSA), with implications for Russia-related sanctions and their enforcement. On October 27, 2017, the Department of State (DoS) published guidance on sanctions with respect to Russia’s Defense and Intelligence Sectors under Section 231 of CAATSA. In addition, on October 31, 2017, DoS published guidance on how it would view secondary sanctions for investments in special Russian crude oil projects and energy export pipelines. Separately, the Department of Treasury’s Office of Foreign Assets Control (OFAC) amended Directive 4 of the Ukraine/Russia related sanctions and published updated FAQs relating to the amended Directive as well as new guidance on CAATSA sections 223(a), 226, 228, 233.

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On October 25, 2017, the U.S. House of Representatives passed three bills and a resolution in response to Iran’s ballistic missile program and threats posed by Hizballah. Notably, neither the bills nor the resolution would directly affect U.S. obligations in relation to the Iran Nuclear Agreement (Joint Comprehensive Plan of Action, or JCPOA). Further, because Hizballah is already sanctioned on the U.S. List of Specially Designated Nationals and the President already has authority to impose sanctions based on Iran’s ballistic missile program, it does not appear that the bills would result in substantive changes to existing law if enacted.

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Effective October 12, 2017, the Sudanese Sanctions Regulations (SSR) have been revoked in recognition of the Government of Sudan’s (GOS) sustained positive actions in stopping conflict and improving humanitarian access in Sudan.  This latest action makes permanent the general license issued in January 2017.  However, Sudan remains designated as a “State Sponsor of Terrorism” and accordingly, key restrictions remain.

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President Trump issued an Executive Order prohibiting the proposed acquisition of Lattice Semiconductor (Lattice) by a Chinese consortium known as Canyon Bridge. Lattice is a semiconductor company primarily manufacturing programmable logic devices.  The Executive Order prohibits the proposed acquisition and any substantially equivalent transaction, and requires the parties to permanently abandon the proposed transaction in 30 days. The Executive Order follows a lengthy review process with the Committee on Foreign Investment in the United States (CFIUS). This is only the fourth time since the enactment of the Exon-Florio Amendment in 1988 that a transaction has been formally blocked.

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On Aug. 22, 2017, the Financial Crimes Enforcement Network (FinCEN) announced an expansion of its Geographic Targeting Orders (GTO) that require the identification by U.S. title insurance companies of the natural persons behind shell companies used to buy high-end residential real estate. On Gravel2Gavel, colleague Christine Scheuneman provides a number of insights and resources examining the ramifications of this broader scope.

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Today, President Trump issued an Executive Order (E.O.) providing for sanctions against the Government of Venezuela. The sanctions are structured similar to existing sectoral sanctions on the Russian petroleum sector and target financial transactions with the Government of Venezuela.

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On August 2, 2017, President Trump signed into law the Countering America’s Adversaries Through Sanctions Act (CAATSA), which strengthened U.S. sanctions on Russia, North Korea and Iran. CAATSA had been passed by overwhelming “veto-proof” majorities of Congress and President Trump signed the bill while expressing reservations concerning the limitations it placed on the President’s authority.

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