Sanctions Top-5 for the week ending 23 April 2021
Here are five things that happened this week in the world of economic sanctions that I think you should know about.
- The European Union joined the United States, the UK, and Canada in sanctioning Myanmar Economic Corporation (MEC) and Myanmar Economic Holdings Limited (MEHL) and added ten other individuals to the EU Sanctions List. Meanwhile, the US Office of Foreign Assets Control (OFAC) named Myanma Timber Enterprise and Myanmar Pearl Enterprise as Specially Designated Nationals (SDNs).
- OFAC announced a USD 435,003 settlement with a US-based manufacturing company for violations of the Iranian Transactions and Sanctions Regulations (ITSR). According to the settlement notice, the Oklahoma-based company “outsourced a significant portion of its engineering work to an Iranian engineering company” in violation of the ITSR’s prohibition on US persons dealing in Iranian-origin services.
- OFAC revoked a general license under the Belarus Sanctions Regulations that had authorized US persons to transact with nine Belarusian entities since 2015. OFAC replaced the license with a new one authorizing US persons to wind down their business with the entities (and entities owned 50 percent or more by them) within 45 days. (For more on this, read my colleagues’ blog post here.)
- OFAC lifted sanctions on the ex-wife and four adult children of drug trafficker Rafael Caro Quintero. OFAC sanctioned the family members and their companies under the Foreign Narcotics Kingpin Designation Act (FNKDA) in June 2013 for acting on behalf of Caro Quintero. (OFAC sanctioned Caro Quintero’s common-law wife in May 2016.) Caro Quintero himself was designated under the FNKDA in December 2000.
- The US Department of Justice (DOJ) announced the seizure of an oil tanker, the M/T Courageous, allegedly used to ship petroleum products to North Korea in violation of UN sanctions. The DOJ also announced charges against a Singaporean national accused of processing transactions through the US financial system in connection with the shipments.
What did I take away from OFAC’s latest settlement? For starters, it reminded me that most people don’t think about sanctions all the time. According to the OFAC settlement notice, the company’s management wasn’t “attuned” to OFAC regulations because their business was all inside the United States. In fact, the company’s only international business was with the Iranian supplier. It also just happens that the Iranian supplier was owned by the brother of one of the company’s employees. (Did these brothers never talk sanctions?) Fun fact: this is not the first case involving a US company importing Iranian services. In August 2017, OFAC settled with an Arizona-based company for relying on Iranian subcontractors for due diligence services.
I had a great time presenting with Adam Smith, John Bray, and Sarah Yan at the most recent Sanctions Masterclass hosted by Justine Walker and Sam Cousins of the Association of Certified Anti-Money Laundering Specialists (ACAMS). Check out the recording here for a deep dive on China and Myanmar (with a dash of Russia).
Really excited to be joining LVMH’s Michelle Yu as co-chair for this year’s virtual “Asia Pacific Advanced Conference on Economic Sanctions Compliance and Enforcement,” hosted by American Conference Institute (ACI) from 27 to 28 May 2021 with an excellent roster of speakers. (Ping me for the 10% discount code.)