Sanctions Top-5 for the week ending 28 August 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’s Bureau of Industry and Security (BIS) added 24 Chinese companies to the Entity List in relation to construction activities in disputed areas of the South China Sea. Meanwhile, the Department of Defense updated its list of Chinese “military companies” pursuant to Section 1237 of the National Defense Authorization Act for Fiscal Year 1999 (NDAA 1999), including some companies also added to the Entity List.
2. In related news, the US State Department announced visa bans against unnamed individuals, including executives of some Chinese state-owned enterprises, and their immediate family members, under the Immigration and Nationality Act for “malign activities in the South China Sea.”
3. EU foreign ministers reached an agreement to move ahead with sanctions against individuals in Belarus following the country’s controversial presidential election on 9 August 2020. The European Union could sanction around 20 individuals, including government officials, according to statements by EU Foreign Minister Josep Borrell.
4. The US Office of Foreign Assets Control (OFAC) named a Chinese national and a Hong Kong-based company as Specially Designated Nationals (SDNs) pursuant to the Foreign Narcotics Kingpin Designation Act for illegally exporting synthetic opioids to the United States. According to a Treasury Department news release, the individual, a chemist, disguised the shipments and used the Hong Kong company to facilitate financial transactions.
5. The UN Security Council declined to move forward with a proposal by the United States to trigger the snapback provision of the 2015 Joint Comprehensive Plan of Action (JCPOA). Security Council President Dian Triansyah Djani of Indonesia said he was “not in the position to take further action” given a lack of “consensus in the council” for the move. A few days before, the US State Department announced visa restrictions on 14 Iranian officials pursuant to Section 7031(c) of the Department of State, Foreign Operations, and Related Programs Appropriations Act, including 13 officials involved in the murder of an Iranian opposition figure in Switzerland 30 years ago and the director of Iran’s Evin Prison.

Comments

Is the Defense Department publishing sanctions lists now? Not quite. The list of companies published under Section 1237 of the NDAA 1999 is not a sanctions list. However, Section 1237 does contemplate sanctions being imposed under the International Emergency Economic Powers Act (IEEPA) at the president’s discretion. Unlike some recent legislation, the NDAA 1999 does not specify the type of sanctions or a timeline, so anything (or nothing at all) is possible. What is interesting, I think, is that the latest list was published directly to the Defense Department’s website, instead of via congressional allies. Given Defense Secretary Mark Esper’s recent editorial in The Wall Street Journal (yikes), it’s probably no accident that the department is taking an active role in signaling US policy on the South China Sea.

Bonus item: Qing Ren and the team at Global Law Office have put together a helpful summary of updated export control rules announced by the PRC Ministry of Commerce (MOFCOM) last week. According to media reports, the new restrictions could require ByteDance to receive MOFCOM’s approval for export of artificial intelligence technology in connection with a sale of its TikTok app.

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.)