Sanctions Top-5 for the week ending 24 September 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 US Office of Foreign Assets Control (OFAC) issued two general licenses (here and here) authorizing humanitarian transactions by certain groups, nongovernmental organizations, and people acting on their behalf as well as transactions related to exports of agricultural commodities, medicines, and medical devices to Afghanistan that would otherwise be prohibited by OFAC’s terrorism-related sanctions regulations. The licenses specifically apply to transactions involving the Taliban or the Haqqani Network or any legal entities owned 50 percent or more by them. OFAC also issued a series of FAQs in connection with the licenses.
  2. OFAC issued an updated advisory document on sanctions risks involving ransomware payments. Meanwhile, OFAC named a Russia-based cryptocurrency exchange as a Specially Designated National (SDN) under Executive Order 13694 in connection with suspected ransomware payments.
  3. OFAC named eight individuals and two entities in Mexico as SDNs under the Foreign Narcotics Kingpin Designation Act for acting on behalf of the Sinaloa Cartel. The targets include an individual accused of overseeing “a major drug trafficking corridor in Mexico . . . responsible for smuggling tons of fentanyl and other drugs into the United States.”
  4. The US House of Representatives passed a version of the National Defense Authorization Act for Fiscal Year 2022 containing an amendment that would (if signed into law) impose mandatory sanctions in respect of the Nord Stream 2 pipeline. As previously reported, the Biden administration effectively waived sanctions on the project in May 2021 and introduced some new watered down sanctions in August 2021.
  5. OFAC removed more than six dozen entries from the SDN List under its Counter Narcotics Trafficking Sanctions program. The newly un-sanctioned persons include Rafael Marquez, a well-known Mexican soccer player who was designated by OFAC in August 2017.

Comments

Although neither the government nor the territory of Afghanistan are explicitly sanctioned, US persons are prohibited from dealing with the Taliban and the Haqqani Network, both of which are sanctioned under Executive Order 13224 (not to mention other SDNs in the country). (The Haqqani Network was also designated as Foreign Terrorist Organization in 2012.) As previously reported, OFAC issued a specific license for the US government’s humanitarian activities last month, while a coalition of organizations was pushing the Biden administration to lift restrictions that threatened to slow delivery of aid to the country. The new general licenses are fairly broadly worded and authorize a wide-range of activities by nongovernmental organizations and other groups, subject to the strict conditions mentioned in each license.

I’m looking forward to joining David Schlesinger and the team from CountryRisk.io for a discussion about Hong Kong on Wednesday, 29 September, at 8:00 p.m. Hong Kong time / 8:00 a.m. New York time. We’ll talk about how recent developments could factor into companies’ AML/CFT and sanctions risk assessments, among other topics. Click here for more information and to register.

Shout out to my colleagues Michelle Levin, Reid Weingarten, Jim Brochin, and David Hirsch for a major success in their client’s long-running extradition saga!

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