Sanctions Top-5 for the week ending 15 January 2021

  1. The White House amended Executive Order 13959 on so-called “Communist Chinese military companies” (CCMCs) to address a couple of major discrepancies in the original of 12 November 2020. Specifically, the definition of “transaction” now includes “sale,” and the order now makes clear that US persons are prohibited from possessing securities related to CCMCs after 11 November 2021 (or a later date, depending on when a CCMC was identified). Meanwhile, the Department of Defense identified an additional nine companies (including Xiaomi) as CCMCs. That brings the total number of CCMCs to 44.
  2. In related news, the Office of Foreign Assets Control (OFAC) issued General License №2 (GL-2), which more or less says that US exchanges can continue to handle securities of CCMCs through the relevant wind-down periods. OFAC also published four new FAQs about Executive Order 13959. (Visit this blog post for a rundown of actions under EO 13959 so far.)
  3. OFAC named another six PRC and Hong Kong officials as Specially Designated Nationals (SDNs) under Executive Order 13936 According to a State Department news release, the designations follow the mass arrests of pro-democracy figures in early January 2021. OFAC also issued its Hong Kong-Related Sanctions Regulations to formally implement Executive Order 13936.
  4. The US Commerce Department’s Bureau of Industry and Security (BIS) added Chinese National Offshore Oil Corporation (CNOOC) to the Entity List and China’s Skyrizon to the recently created Military End User (MEU) List. The US Department of Defense added CNOOC to the list of CCMCs on 3 December 2020.
  5. OFAC announced a USD 1,016,000 settlement with an Indonesian paper manufacturer for violations of the North Korea Sanctions Regulations. According to the OFAC settlement notice, the company received payments through the US financial system related to exports of cigarette papers to North Korea.

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