Sanctions Top-5 for the week ending 11 December 2020

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. After months of high anxiety, financial institutions in Hong Kong and elsewhere were relieved when the Office of Foreign Assets Control (OFAC) released its report under Section 5(b) of the Hong Kong Autonomy Act (HKAA) on Friday. The report stated that OFAC identified no foreign financial institutions that knowingly conducted significant transactions with 10 individuals identified by the State Department on 14 October 2020. In other words, OFAC will not impose secondary sanctions under the HKAA (yet). (More on this below.)

Comments

And the award for anti-climax of the year goes to . . . ! Despite reviewing “all sources of information, including classified and unclassified,” OFAC was unable to identify any financial institutions worthy of secondary sanctions under the HKAA. How to interpret this outcome? My take: it’s just not easy to find “significant transactions” involving individuals. It might have been different had the State Department identified an entity or two in its 5(a) report on 14 October. That said, OFAC can update its 5(b) report at any time. And the State Department can always add names to its 5(a) report. (For more, see my team’s blog post here.)

Up next: The Treasury Department is expected to issue guidance on Executive Order 13959 which will restrict investments by US persons in Chinese companies identified by the Department of Defense.

What was 2020 all about? Join FTI Consulting for a “US Sanctions, Export Controls & US-China Trade — Year-in-Review” webinar on Wednesday, 16 December, at 9:30 a.m. Hong Kong time. Featuring Rod Francis, Naresh Sakhrani, Sally Peng, Benjamin Kostrzewa and myself. Register here!

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