1. NEW IRAN SANCTIONS
1.1 The central bank of iran, the National Developement Fund of Iran & Etemad Tejarate Pars Co.
On Friday 20th September 2019, the Office of Foreign Assets Control (OFAC) of the U.S. Treasury Department took action against the Central Bank of Iran (CBI), the National Development Fund of Iran (NDF) and Etemad Tejarate Pars Co. under its anti-terrorist authority,
Executive Order (E.O.) 13224. The Central Bank of Iran has provided billions of dollars to the Islamic Revolutionary Guard Corps (IRGC) and its Force in Qods, Iran (IRGC-QF). Iran’s NDF, which is Iran’s sovereign wealth fund and whose board of directors includes the president of Iran, the oil minister and the governor of the Central Bank, has been an important source of foreign exchange and funding for the IRGC-QF and the Ministry of Defence and Logistics of Iran’s Armed Forces (MODAFL). Etemad Tejarate Pars, also designated today, is an Iran-based company used to conceal financial transfers for MODAFL military purchases, including funds from the NDF.
1.2 Iran´s Revolutionary Guard
On September 4th, 2019, the U.S. Treasury Department’s OFAC imposed sanctions on a transportation network that it said was led by Iran’s Revolutionary Guard. It was alleged to have sold millions of barrels of oil for the benefit of Syrian President Bashar al-Assad. This is an unprecedented move against another country’s military, which led Iran to take the same action against U.S. troops in the Middle East.
Sanctions against that powerful organization will result in travel restrictions and possible criminal charges for those who collaborate with the Guardians of the Revolution, something that may affect companies in Europe, because that entity has an important weight in the Iranian economy.
2. MODIFICATIONS TO UKRAINE SANCTIONS
On 12th September 2019, sanctions against Ukraine were amended by a CFSP under the European Union Council. This Official Journal modifies the incentives for imposing sanctions on certain persons subject to those sanctions and, in addition, the extension of sanctions on the country..
3. OFAC ANNOUNCES ANTI-TERRORIST SANCTIONS
On 10th September, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced the imposition of sanctions on 15 leaders, individuals, and entities affiliated with terrorist groups in accordance with the new Executive Order (E.O.) 13886, entitled “Modernizing Sanctions to Combat Terrorism,” which updates E.O. 13224. O.S. 13886 provides the Treasury and the Department of State with “new tools” for identifying and targeting sanctions.
4. UNITED STATES RESTRICTS REMITTANCES AND “U-TURN” TRANSACTIONS TO CUBA
On 9th September 2019, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued amendments to the Cuban Asset Control Regulations to limit U-Turn transactions and remittances.
The “U-Turn” transactions allowed non-U.S. persons to make transactions in dollars with Cuban persons or that involved a benefit in Cuba. The transactions were processed or authorized through a U.S. financial institution.
Now, U.S. financial institutions will be required to reject them and report them to OFAC, in accordance with the amended sanctions on Cuba. These changes in sanctions will take effect on 9th October 2019.
5. OFAC ISSUES REGULATIONS FOR THE IMPLEMENTATION OF SANCTIONS IN NICARAGUA
On 5th September, OFAC issued a regulation to implement Executive Order (EO) 13851 related to the situation in Nicaragua, signed on 27th November 2018. The EO blocks the property of persons who served as officials to the Nicaraguan government at any time after January 10, 2007, as well as persons responsible for or complicit in serious human rights violations that undermine democracy, threaten peace and security.
6. VENEZUELAN GOVERNMENT: ADDITIONAL SANCTIONS
On 5th August 2019, President Trump signed a new Executive Order (EO) related to Venezuela, which imposes additional sanctions on the country’s government. Section 1 of the Executive Order imposes “blocking sanctions” on the Venezuelan government. This ranslates into a ban on Americans dealing with the Venezuelan government and anyone owned or controlled by the government. The order states:
“US Persons are not prohibited from carrying out transactions involving the country or the people of Venezuela, as long as they are not sanctioned persons or any conduct prohibited by any other regulation that imposes sanction measures related to the situation in Venezuela.”
However, even if transactions are not prohibited, it is likely that financial institutions will increasingly reject and/or block transfers of funds related to Venezuela. This has been stated by David Schwartz, president and executive director of the Florida International Bankers Association (FIBA), since the executive order “encompasses many people and, as a precaution, many banks prefer to close Venezuelan accounts so as not to run risks.
7. U.S. DEPARTMENT OF COMMERCE ADDS 46 HUAWEI AFFILIATES TO LIST OF ENTITIES AND UPDATES TEMPORARY GENERAL LICENSE
On 19th August 2019, the Bureau of Industry and Security (“BIS”) of the Department of Commerce issued a Final Rule adding 46 non-U.S. subsidiaries of Huawei Technologies Co. to the Entity List and extending, until 18th November 2019, a revised General Temporary License (“TGL”) authorizing certain transactions with Huawei and publicly traded Huawei entities. In addition, the BIS published on its website a general advisory opinion that provides guidance on prohibited activities in the context of standard-setting when a listed entity, such as Huawei or its listed subsidiaries, is involved.
Furthermore, it extends the deadline until 18 November for the parties to export, re-export or transfer tems (within the country) subject to the Export Administration Regulations (EAR) that comply with one of the conditions listed in the General License
7.1 Impact of the designation on the list of entities
The designation of an organization on the List of Entities does not block all relations with the organization, as would be the case with an organization on the List of Specially Designated Nationals by the Office of Foreign Assets Control (OFAC). The List of Entities is more specific in its application.
Section 744.16(a) of the EAR states that no person may “export, re-export or transfer (within the country) the items specified in the List of Entities to listed entities without a BIS licence.”
The designation prohibits all exports from the U.S. to companies listed on Huawei. Although the designation applies to all tems in the United States, it does not apply to all foreign manufactured tems.
Only foreign-made items that are “subject to the EAR” are restricted by designation. If the foreign-made item is not subject to the EAR, it may be delivered from a third country to Huawei-listed companies by U.S. or non-U.S. persons.
8. U.S. ANNOUNCES SANCTIONS FOR ALLEGED SCHEME TO DELIVER FUEL TO RUSSIAN TROOPS IN SYRIA
On Thursday, the United States Government announced sanctions against a company, three people and five ships for allegedly being part of a programme to avoid sanctions in America and to deliver jet fuel to Russian forces in Syria. The U.S. Treasury Department has detailed that the company sanctioned is Maritime Assistance LLC, which it considers a façade of OJSC Sovfracht, on which there are sanctions for operating in Ukraine.
The U.S. Treasury Department has detailed that the company sanctioned is Maritime Assistance LLC, which it considers to be a front company of OJSC Sovfracht, on which there are sanctions for operating in Ukraine. “The Treasury faces a sanctions evasion scheme that includes front companies, ships and conspirators who have been facilitating the illicit transfer of jet fuel to the Russian Army in Syria,” said Sigal Mandelker, deputy secretary for terrorism and financial intelligence.
Thus, he has argued that the “despotic regime” of Syrian President Bashar al-Assad is “under international spotlight for using chemical weapons and committing atrocities against innocent Syrian civilians, and depends on these networks to stay in power. “The United States is determined to cut off access to the international financial system to those who conspire to violate our sanctions, including those who articulate the brutal war machine in Syria,” he said.
The Treasury has indicated that the people included in the new sanctions are Ivan Okorokov, director of the Department of Maritime Transport at Sovfracht; Karen Stepanyan, deputy director of the same department; and Ilia Loginov, deputy director of Legal Support at Sovfracht.
Russia is one of the main international allies of Al-Assad’s regime and, thanks to the support of Russian troops on the ground, the Syrian Government has managed to reconquer most of the country. Since April, it has been trying to subdue the last opposition stronghold in Idlib.
9. RECOMMENDATIONS
The risk of participating in sanctionable activities or processing prohibited transactions may be reduced by the application of the following types of measures:
1. The sector in which the business is to be conducted and with which natural and legal persons in that country the business relationship is to be maintained must be very clear.
2. A previous analysis should be made of the restrictions or controls to which the merchandise could be subjected.
3. Companies should carry out an analysis to take into account both direct and indirect sanctions and, once all of them have been identified, it is necessary for them to review whether and to what extent they would affect their business