Sanctions Top-5 for the week ending 14 May 2021

  1. The Department of Defense will remove Xiaomi Corporation from the list of so-called “Communist Chinese military companies,” according to a filing in the District Court for the District of Columbia. In March 2021, the Court granted Xiaomi’s request for a preliminary injunction against the designation and subsequent ban on US persons transacting in the company’s publicly traded securities under Executive Order 13959.
  2. A few days before, the District Court also granted a preliminary injunction for Luokung Technology Corp. for basically the same reasons as Xiaomi. The US Office of Foreign Assets Control (OFAC) confirmed in an FAQ that Luokung’s securities are not subject to Executive Order 13959 as a result of the Court’s decision.
  3. OFAC identified members of a Mexico-based drag trafficking network — referred to as the Gonzalez Penuelas Drug Trafficking Organization — as Significant Foreign Narcotics Traffickers pursuant to the Foreign Narcotics Kingpin Designation Act. The group is one of the “largest sources of raw opium gum and heroin in northern Mexico” and a “major distributor of fentanyl” to the United States, according to a Treasury Department news release.
  4. EU companies that terminate contracts solely to conform to US secondary sanctions could breach the EU Blocking Statute, according to an opinion from the Advocate General of the EU Court of Justice in a closely watched case brought by an Iranian bank against a German telecommunications company. Even more, the Blocking Statute “imposes an obligation to give reasons justifying the termination of a commercial relationship” with a US-sanctioned counterparty, the Advocate General said.
  5. The US Department of Justice (DOJ) announced charges against two individuals in Maryland, USA accused of bank fraud and illegally importing Iranian rials into the United States. According to a DOJ news release, the individuals told their banks that wire transfers used to pay for the currency “were for jewelry, watches, and/or other items.”

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Nicholas Turner

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