Sanctions Top-5 for the week ending 15 January 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 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.

Comments

With just days left in the current administration, OFAC and other agencies have been pushing out actions to backstop some signature Trump-era policies. Not mentioned above: a raft of last-minute SDN designations related to Iran, Cuba, counter-terrorism, and foreign interference in US elections. No word yet on whether the State Department will update its 14 October 2020 report under Section 5(a) of the Hong Kong Autonomy Act (HKAA). There are still only 10 names on the report — and 35 SDNs under Executive Order 13936.

According to this report from The Wall Street Journal, we might also see an updated list of CCMCs including lots of subsidiaries. The industry wants a list to help sort out which names OFAC thinks “closely match” previously identified CCMCs. There’s no reason this has to happen before the inauguration on Wednesday. After multiple rounds of CCMC updates, there are now three wind-down periods ending in November 2021, December 2021, and January 2022, respectively, during which US persons are expected to divest securities related to the CCMCs. Mark your calendars.

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