Articles Tagged with sanctions

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  • The Treasury Department has placed several prominent Russian individuals and companies on the Specially Designated Nationals and Blocked Persons lists (SDN list). Several of these parties are Russian billionaires previously identified in the Treasury Department’s so-called “Oligarch List” reported to Congress on January 29, 2018. 
  • Under the general licenses issued with the new listings, U.S. persons have until June 5, 2018 to wind down operations with specified listed companies and their subsidiaries, and until May 7, 2018 to divest debt, equity, or holdings owned by EN+ Group PLC, GAZ Group and United Company RUSAL PLC. 
  • General License 12, which allows wind down operations with several newly designated SDN companies, instructs that payments to the SDNs must be made into blocked accounts with U.S. banks. This deviates from previous general licenses which did not place conditions on how SDNs must be paid. 

On April 6, 2018, the Treasury Department’s Office of Foreign Assets Control (OFAC), in consultation with the State Department, designated 7 Russian oligarchs, 12 companies that they own or control, 17 senior Russian government officials, and 1 state-owned Russian weapons trading company and its subsidiary, a Russian bank. (The list may be found here.)

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On December 20, 2017, President Trump issued Executive Order 13818 (the “E.O.”) implementing provisions of the Global Magnitsky Human Rights Accountability Act (“Global Magnitsky Act”) (enacted into law in December 2016), which provided for sanctions relating to gross human rights violations or government officials linked to corruption. The E.O. authorizes the imposition of sanctions on non-U.S. persons determined to be responsible for, complicit in, or have engaged in (directly or indirectly) “serious human rights abuse,” corruption, or “the transfer or the facilitation of the transfer of the proceeds of corruption,” or to have attempted to engage in or materially support such acts.

The E.O. applied sanctions designations to 13 persons and, separately, the Department of Treasury’s Office of Foreign Assets Control (“OFAC”) imposed sanctions on 39 additional individuals and entities around the world. This includes individuals and entities from 13 countries and territories spanning the continents of Asia, Africa, Europe, and North America.

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On November 22, 2017, Apple, Inc. released a statement confirming reports that its major supplier in China, Foxconn Technology Group has used illegal student labor to assemble the latest version of the iPhone. Apple indicated that the company and Foxconn are taking corrective action in response. In the past, both Apple and Foxconn have been accused of employing forced labor practices. This time, the discoveries coincide with a time of renewed focus on enforcement of the decades-old U.S. ban on imports of forced labor, carrying consequences for importers in terms of penalties, and withholding and/or seizure of merchandise. As reviewed below, U.S. Customs and Border Protection (CBP) has recently taken measures to enforce the import ban and sanctions for forced North Korean labor (described below), and issued guidance to importers in this regard.

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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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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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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 June 29, 2017, the U.S. Treasury Department announced new steps applying pressure on North Korea in relation to its proliferation activities.  Specifically, this involved (1) sanctions designations against Chinese shipping company Dalian Global Unity Shipping Co., Ltd. and two Chinese individuals; and (2) anti-money laundering special measures against China’s Bank of Dandong.  All were involved in business with North Korea according to the Treasury Department’s announcement.

The Special Measures for Bank of Dandong under Section 311 of the USA PATRIOT Act prohibit U.S. financial institutions from maintaining correspondent accounts for, or on behalf of, that bank.  This would prevent access to the U.S. banking system for dollar transactions or wiring services.

None of the sanctioned parties appear to be systemically important companies for China, but the sanctions may be intended, or viewed, as an effort by the Trump Administration to pressure China into doing more to restrain North Korea’s nuclear activities.

 

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On June 16, 2017, President Trump issued a National Security Presidential Memorandum on Strengthening the Policy of the United States Toward Cuba, which begins a process to alter some aspects of U.S. policy towards Cuba, but retains much of the Obama Administration’s reforms to travel, business and trade with Cuba.

The signaled changes focus on limiting business with companies related to Cuba’s military, intelligence and security apparatus and tightening aspects of the administration of existing travel allowances. Existing business and travel arrangements affected by the changes may be grandfathered.

There are no immediate changes to U.S. sanctions or export control policy. The memorandum sets the framework for the Office of Foreign Assets Control (OFAC), Bureau of Industry and Security (BIS) and other agencies to consider regulatory changes in the coming months.

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Questions continue to swirl around the future of U.S.-Cuba policy as recent reports of a Trump Administration plan to strengthen Cuba sanctions surfaced over the weekend. These reports should be assessed against the backdrop of an increased Congressional effort to end the embargo on Cuba.

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