Sanctions Top-5 for the week ending 1 January 2021

Here are five things that happened this week in the world of economic sanctions that I think you should know about.

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  1. The US Office of Foreign Assets Control (OFAC) released a set of somewhat helpful FAQs about Executive Order 13959, which prohibits US persons from purchasing securities of so-called “Communist Chinese military companies” (CCMC) beginning 11 January 2021. OFAC also introduced the Non-SDN Communist Chinese Military Companies List with identifying information on the companies. (Another list!)

Comments

Did anyone else feel like they got socks for Christmas when those OFAC FAQs came out? The good news is that OFAC will update the CCMC list to include subsidiaries and isn’t expecting the market to identify them (what a mess that would have been). But many questions about Executive Order 13959 remain unanswered. Speaking of, OFAC just dropped another FAQ seconds ago on whether the Executive Order requires divestments of CCMC securities by 11 January 2021 (it doesn’t).

What can we learn from OFAC’s most recent settlements? First, it can take a long time to investigate and settle a case. The transactions in the bank settlement took place between 2011 and 2014. And there were only 13 of them — a low number for a banking case.

Second, customer attestations aren’t worth a plugged nickel if you have contradictory data on your hands. According to OFAC, the digital assets company asked customers about their locations for compliance purposes, while gathering IP data for security purposes. The IP data revealed that some customers didn’t the truth about their locations (shocker). The lesson: know your data and pick the best source. Look for inconsistencies.

Did I miss something? Send me a message or comment on LinkedIn.

(The views expressed are my own and do not constitute legal advice. Photo from Vladislav Reshetnyak.)

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Nicholas Turner

US attorney in Hong Kong specializing in economic sanctions, financial crimes. Sign up for emails: http://eepurl.com/cVhTXf LinkedIn at: http://goo.gl/KX1jER