Sanctions Top-5 for the week ending 23 October 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 White House formally notified Congress that Sudan would be removed from the State Department’s list of State Sponsors of Terrorism. As mentioned last week, the US Office of Foreign Assets Control (OFAC) lifted its comprehensive sanctions on Sudan in October 2017. (More on this below.)
  2. The US State Department announced that six entities and two individuals in China and Hong Kong were designated as Specially Designated Nationals (SDNs) under Section 1244 of the Iran Freedom and Counter-Proliferation Act. According to a State Department news release, the targets arranged for the sale of container ships to a subsidiary of the Islamic Republic of Iran Shipping Line (IRISL) and arranged for IRISL vessels to berth at ports in China.
  3. OFAC named five Iranian entities as SDNs under Executive Order 13848 for their “brazen attempts to sow discord among the voting populace by spreading disinformation online and executing malign influence operations aimed at misleading US voters.” OFAC also sanctioned Iran’s ambassador to Iraq under Executive Order 13224 for acting for or on behalf of the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF).
  4. The European Union sanctioned two Russian nationals and the 85th Main Centre for Special Services (GTsSS) of the Main Directorate of the General Staff of the Armed Forces of the Russian Federation (a.k.a. “Fancy Bear”) for their roles in a cyber attack on the German Federal Parliament in 2015.
  5. OFAC announced a USD 4,144,651 settlement with a US-based company for violations of the Iranian Transactions and Sanctions Regulations (ITSR). According to the OFAC settlement notice, the company’s indirectly held Turkish subsidiary sold products to distributors with knowledge they would be sold to Iran in breach of the parent’s sanctions policy. (Again: Non-US companies owned or controlled by US persons are subject to the ITSR.)

Comments

Sudan is one country that has benefited from some relative continuity in the approaches taken by the Obama and Trump administrations since 2017. Barack Obama issued Executive Order 13761 on 13 January 2017, a few days before Donald Trump’s inauguration. That order would have allowed OFAC’s Sudan-related sanctions to terminate automatically on 12 July 2017. The Trump administration extended the deadline under Executive Order 13804, and OFAC’s comprehensive sanctions expired accordingly on 12 October 2017. Since then, Sudan has been subject to heightened export controls under the Export Administration Regulations (EAR) owing to its inclusion on the State Department’s list of State Sponsors of Terrorism. Those will also be lifted in due course. (NB: Any breaches of the sanctions that took place before 12 October 2017 are still fair game for an OFAC enforcement action.)

The decision accompanied the announcement that Sudan and Israel would normalize their relations. According to a White House press statement, Sudan also agreed to transfer USD 335 million into an escrow account for US victims of terrorism and their families who have outstanding claims against the Sudanese government. What might other sanctioned countries learn from all this? Deal making plus regional politics equals sanctions relief.

The next edition of the Sanctions Top-5 should be out on 3 November 2020 — Election Day! Happy voting to everyone in the United States.

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

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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

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