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.
  2. The New York Times reported that OFAC issued a (rather generous) specific license unblocking property of billionaire Dan Gertler held at various US financial institutions and authorizing transactions involving numerous Gertler-held companies until 31 January 2022. In December 2017, OFAC named Gertler as a Specially Designated National (SDN) under the Global Magnitsky Sanctions program, citing “hundreds of millions of dollars’ worth of opaque and corrupt mining and oil deals in the Democratic Republic of the Congo.” (A copy of the license is available here.)
  3. OFAC issued General License №13 authorizing transactions with Yemen-based Ansar Allah (a.k.a. the Houthi movement) until 26 February 2021. One week earlier, the US State Department designated the group and three of its leaders as Specially Designated Global Terrorists (SDGTs) under Executive Order 13224. OFAC also issued an FAQ clarifying that non-US persons will not face secondary sanctions for engaging in transactions with Ansar Allah that are licensed for US persons.
  4. Ukrainian President Volodymyr Zelenskiy issued Decree №29/2021 adopting targeted sanctions against China’s Skyrizon and other entities. (Skyrizon was reportedly attempting to purchase a stake in Ukrainian aerospace manufacturer Motor Sich.) As reported earlier, the US Bureau of Industry and Security (BIS) added Skyrizon to its recently created Military End-User (MEU) List under the Export Administration Regulations (EAR).
  5. A spokesperson for the US State Department told reporters that the Biden administration will “thoroughly review” Trump-era sanctions against the International Criminal Court (ICC) adopted under Executive Order 13928. As reported earlier, a US federal judge in the Southern District of New York granted a request for a preliminary injunction in a case challenging the sanctions.

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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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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