Sanctions Top-5 for the week ending 29 January 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 General License 1-A authorizing US persons to transact in securities of companies whose names “closely match” those of companies previously identified as so-called “Communist Chinese military companies” (CCMCs) under Executive Order 13959, until 27 May 2021. (The new license replaces General License №1 which was due to expire on 28 January 2021.) However, as explained in newly issued FAQ 879, the new license does not apply to securities of four CCMC subsidiaries identified by OFAC on 8 January 2021.

Comments

Under the new General License №1-A, OFAC kicked the can on the “closely matched” names issue for at least four months, much to the relief of everyone still puzzling over what a “closely matched” name is. Even more helpful, I think, is FAQ 879, which says that restrictions on securities of four CCMC subsidiaries identified on 8 January 2021 won’t come into effect until 9 March 2021. In other words, OFAC will follow the language of Executive Order 13959, which says that restrictions take effect 60 days after an entity’s identification. The earlier FAQ 864 was not clear on this point.

In related news, Xiaomi filed suit in US federal court challenging its inclusion on the list of CCMCs. If successful, this would be the fourth recent US sanctions action to be held up in litigation, by my count.

It’s Groundhog Day in the United States today. Meanwhile, Myanmar is once again under military rule following a Tatmadaw coup. Anyone else feeling déjà vu? For the record, OFAC’s Burmese Sanctions Regulations were officially terminated in October 2016.

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.)

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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