Sanctions Top-5 for the week ending 14 August 2020
Here are five things that happened this week in the world of economic sanctions that I think you should know about.
- The US Department of Justice (DOJ) announced the seizure of more than 1 million barrels of Iranian gasoline from four vessels headed to Venezuela, pursuant to a US federal court order issued in early July 2020. The Wall Street Journal reported that the Greek owners of the ships were persuaded to hand over the gasoline after being threatened with US sanctions. The fuel was loaded on tankers headed to Houston, Texas, where it could be resold to support the US Victims of State Sponsored Terrorism Fund, according to a US State Department announcement.
- You win some you lose some. The United Nations Security Council rejected US-backed Resolution S/2020/797, which would have extended UN sanctions on Iran set to expire in October 2020 under the timetable set in the Joint Comprehensive Plan of Action (JCPOA). The US State Department issued a statement calling the Security Council’s vote “inexcusable.” The UK Foreign & Commonwealth Office stated the UK government remains “resolutely committed” to the JCPOA.
- The US Office of Foreign Assets Control (OFAC) announced a USD 5,000 settlement with an unnamed individual for violations of the Foreign Narcotics Kingpin Sanctions Regulations. According to the settlement notice, the individual, who was employed at the US embassy in Bogotá, Colombia, “bought jewelry, meals, clothing, hotel rooms, and other gifts” for a Specially Designated National (SDN) with whom he or she had a personal relationship.
- Donald Trump issued an Executive Order requiring Bytedance Ltd. to “divest all interests and rights in any assets or property used to enable or support the operation of TikTok” and data related to TikTok’s users in the United States. The order follows a review by the Committee on Foreign Investments in the United States (CFIUS) of ByteDance’s 2017 acquisition of Musical.ly.
- OFAC issued a Sudan Program and Darfur Sanctions Guidance summarizing the restrictions on Sudan and Darfur and reminding everyone that “US persons are no longer prohibited from engaging in transactions with respect to Sudan or the Government of Sudan” since 12 October 2017. Meanwhile, the State Department announced a travel ban against unnamed individuals “residing both inside and outside Sudan” believed to be involved in undermining implementation of Sudan’s 2019 Political Agreement and Constitutional Declaration.
Hark, in fair Bogotá, where we lay our scene. OFAC’s settlement with the unnamed Romeo (or Juliet) sends a commonsense message to US government employees posted overseas: don’t fraternize with SDNs. It looks bad. But it also underscores the broad prohibition against US persons anywhere dealing directly or indirectly with SDNs and other blocked persons. What does dealing mean? As OFAC states in the settlement notice: “All US persons . . . should exercise caution before voluntarily engaging in relationships with foreign persons that the US person knows, or reasonably should know, may have a sanctions nexus, as any financial transaction or exchange of goods or services with a designated person — even in the context of a personal relationship — may constitute a violation of US sanctions.” OFAC does not have a de minimis threshold for violations.
OFAC’s guidance is particularly timely given last week’s designation of 11 Hong Kong and PRC officials, including several prominent members of the Hong Kong government. Something tells me they won’t be getting as many red packets this year.
For members of the Association of Certified Anti-Money Laundering Specialists (ACAMS): stay tuned for an invite to a special webinar on Hong Kong/China sanctions to be held on Tuesday, 25 August at 11:00 a.m. New York time (11:00 p.m. Hong Kong time). I will post a link to the registration page on my LinkedIn.
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.)