Sanctions Top-5 for the week ending 18 September 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. The US Commerce Department announced two rules restricting transactions with ByteDance and Tencent (in relation to WeChat) (rules available here and here). The rules, which were called for under Executive Orders 13942 and 13943 of 6 August 2020, more or less prohibit certain business-to-business transactions enabling WeChat and TikTok to be downloaded or updated by users “within the land and maritime borders of the United States and its territories” and certain services for the functioning and optimization of the apps. (Read more about it in my colleague’s blog post on the Steptoe International Compliance Blog.)
  2. After failing to convince the UN Security Council to trigger the snapback provision of the Joint Comprehensive Plan of Action (JCPOA), the US State Department issued a statement threatening “consequences against states that do not re-impose sanctions against Iran, including an arms embargo set to expire next month. (A little while ago, the US State Department announced sanctions against numerous individuals and entities involved in nuclear- and missile-related activities in Iran and a new Executive Order targeting persons involved in Iran’s trade in conventional weapons (including Venezuela’s Nicolás Maduro).)
  3. The US Office of Foreign Assets Control (OFAC) named Union Development Group Co., Ltd., a Chinese state-owned entity, as a Specially Designated National (SDN) under the Global Magnitsky Sanctions program for collaborating with a Cambodian general sanctioned in December 2019 on a controversial development project in Cambodia’s Koh Kong province.
  4. China’s Ministry of Commerce (MOFCOM) issued provisions for the long-talked-about Unreliable Entity List (UEL) which could be used to restrict foreign companies from transacting or investing in China, among other things. So far, no names have been added to the list. (Read more about it in this alert by Qing Ren and team at Global Law Office.)
  5. OFAC announced a USD 894,111 settlement with a US-based telecommunications manufacturer for violations of the (now terminated) Sudan Sanctions Regulations (SSR). According to the OFAC settlement notice and settlement agreement, the company exported satellite equipment and services to the Sudan Civil Aviation Authority via a Canadian company despite knowing the shipments were likely prohibited under the SSR.

Comments

Not so fast. On Saturday, the Commerce Department postponed the TikTok rule for seven days, until 27 September 2020, in anticipation of a deal involving Oracle and Walmart (which is apparently on the rocks as of this morning). Meanwhile, a US federal judge issued a preliminary injunction blocking the WeChat rule pending litigation brought by the US WeChat Users Alliance. (Read the judge’s decision here.) In any event, US persons will not prohibited under these rules from using the apps inside or outside the United States. Phew!

So many things happened last week it was difficult to choose just five. Not mentioned: OFAC sanctioned two Lebanese companies with Hizballah ties, 45 individuals and two entities for Iran-backed cyber offenses, two Russian individuals for cyber-enabled theft, and the former first lady of The Gambia for corrupt dealings.

ICYMI: Dow Jones Risk & Compliance will host me for another discussion on “The Global Impact of New US Hong Kong-Related Sanctions,” this time in US and European time zones. Join us on Wednesday, 30 September, at 10:00 a.m. New York time. Registration is available 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.)

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