Sanctions Top-5 for the week ending 25 September 2020
Here are five things that happened this week in the world of economic sanctions that I think you should know about.
- The US Office of Foreign Assets Control (OFAC) announced amendments to the Cuban Assets Control Regulations (CACR) to prohibit US persons from importing Cuban-origin alcohol and tobacco products and partaking in professional meetings and certain public events in Cuba. Meanwhile, the US State Department announced the creation of the “Cuba Prohibited Accommodations List” containing names of hotels and other businesses that are off limits for individuals engaging in licensed travel to Cuba under the CACR. It wouldn’t be an election year without Cuba sanctions.
- OFAC replaced General License 2 under the Global Magnitsky Sanctions program with a new “General License 2-A,” which extends the deadline for US persons to wind down transactions with certain subsidiaries of Xinjiang Production and Construction Corps (XPCC) until 30 November 2020. In related news, Forbes published an article highlighting Uzbekistan’s efforts to eliminate forced labor in its cotton industry under an initiative championed by reformist President Shavkat Mirziyoyev. Uzbek cotton could get a boost as nearby Xinjiang comes under scrutiny, the author writes.
- OFAC issued Frequently Asked Question (FAQ) 840 under the recently created Hong Kong-related sanctions program. The FAQ confirms that US persons are not prohibited from dealing with the Hong Kong government, but must exercise caution to avoid dealing, directly or indirectly, with SDN government officials sanctioned under Executive Order 13936.
- OFAC announced a USD 473,157 settlement with a US-based wireless technology company for apparent violations of the Iranian Transactions and Sanctions Regulations (ITSR) committed by a Finnish subsidiary. Of note: according to the settlement notice, the violations concerned foreign-produced items containing more than 10% US-origin controlled content which required a license for export to Iran under the Export Administration Regulations (EAR). (One spot where the ITSR and EAR overlap.) Also of note: the company’s non-US employees tried to hide the transactions from the US parent company.
- The European Union added two individuals and three entities to the EU Sanctions list for engaging in human rights abuses in Libya and violating the UN’s Libyan arms embargo. The targets include one airline and two shipping companies accused of transferring arms and military material to Libya.
Once again, there was just too much sanctions news to include everything on the top-5 list. Not mentioned: OFAC added eight individuals and seven entities to the SDN List under the cyber-related and election interference programs, five individuals for undermining democracy in Venezuela, and two judges, three prisons, and a court for human rights abuses in Iran. Meanwhile, a judge suspended the Commerce Department’s TikTok rule pending litigation.
OFAC’s new Hong Kong-related FAQ picks up where FAQ 505 on Venezuela left off, but takes it a step further by confirming that US persons are not prohibited from routine interactions with Hong Kong government agencies or from signing contracts with the Hong Kong government — as long as they avoid dealing with SDNs in the process. We’ll talk about this and more tomorrow during “The Global Impact of New US Hong Kong-Related Sanctions” webinar hosted by Dow Jones Risk & Compliance. Wednesday, 30 September, at 10:00 a.m. New York time. Register here.
Did you hear? The UAE has kicked off a thematic review of sanctions name screening, as announced by the Central Bank’s governor last week. AML Analytics, a UK-based RegTech firm that analyzes automated sanctions screening tools, is supporting the effort. A similar review in Hong Kong led to to some useful feedback from the Hong Kong Monetary Authority.
Join Rod Francis, Naresh Sakhrani, Sally Peng, and me for a panel on “US Sanctions, Export Controls, Tariffs and Beyond” as part of FTI Consulting’s 2020 Continuing Professional Development (CPD) webinar series. (CPD points are being applied for from the Hong Kong Law Society.) Register 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.)