Sanctions Top-5 for the week ending 10 December 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) marked International Anti-Corruption Day by naming seven individuals and eight entities in Angola, El Salvador, Guatemala, Liberia, South Sudan, and Ukraine as Specially Designated Nationals (SDNs) under the Global Magnitsky Sanctions program. Earlier in the week, OFAC sanctioned another 16 individuals and 24 entities in El Salvador and Kosovo linked to organized crime and corruption. OFAC also designated an individual in the Democratic Republic of the Congo and 12 related companies for providing material support to billionaire Dan Gertler, who is also sanctioned under the Global Magnitsky program. (For more on these developments, see my team’s blog post.)

Comments

Put down that eggnog. The end-of-year sanctions crush is upon us.

As discussed before, Executive Order 13959, as amended, prohibits US persons from purchasing or selling publicly traded securities of companies on the NS-CMIC List, as well as publicly traded securities that are derivative of, or designed to provide investment exposure to, such publicly traded securities. The restrictions apply only to companies whose names exactly match a name on the NS-CMIC List. OFAC’s 50 Percent Rule does not apply to the NS-CMIC List. A different SenseTime entity is on the Bureau of Industry and Security’s Entity List which applies to the export, reexport, and in-country transfer of items subject to the Export Administration Regulations (EAR). These are not SDNs.

The individual who settled with OFAC apparently agreed to receive the Iranian company’s payments because a family member worked there. Although the ITSR contain a general license for personal remittances, OFAC used the settlement to emphasize that it does not cover payments related to commercial activity, even if a family member is involved. On that note, the new Afghanistan-related GL-16 specifies that it does not cover “charitable donations of funds . . . or funds transfers for use in supporting or operating a business, including a family-owned business.”

Worried about new Russia/Ukraine-related sanctions? Now might be a good time to review the Menendez amendment to the National Defense Authorization Act for Fiscal Year 2022, which outlines the sanctions that could be applied if the military situation worsens.

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