Sanctions Top-5 for the week ending 4 December 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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(This week’s briefing covers the weeks ending 27 November and 4 December 2020.)

  1. The US Department of Defense added four names to the list of so-called “Communist Chinese military companies” under Section 1237 of the National Defense Authorization Act (NDAA) for Fiscal Year 1999. They are: China Construction Technology Co. Ltd. (CCTC), China International Engineering Consulting Corp. (CIECC), China National Offshore Oil Corp. (CNOOC), and Semiconductor Manufacturing International Corp. (SMIC). (More on this below.)
  2. The US Office of Foreign Assets Control (OFAC) named China National Electronics Import & Export Corporation (CEIEC) as a Specially Designated National (SDN) under Executive Order 13692 for helping the Venezuelan government monitor and restrict Internet content. According to a Treasury Department news release, “CEIEC provided Venezuela . . . a commercialized version of China’s ‘Great Firewall.’” US persons have until 14 January 2021 to wind down transactions with CEIEC under General License 38.
  3. US Customs and Border Protection (CBP) unveiled a Withhold Release Order (WRO) on cotton and cotton products from Xinjiang Production and Construction Corps (XPCC) imported into the United States, based on reports of XPCC’s use of forced labor. As explained in a CBP news release, CBP can release a shipment held under a WRO if an importer proves it “was not produced with forced labor.”
  4. OFAC sanctioned an individual in Mexico under the Foreign Narcotics Kingpin Designation Act (FNKDA) for acting on behalf of a prominent narcotics trafficker in Mexico accused of orchestrating the murder of a US Drug Enforcement Administration (DEA) agent in 1985. Separately, OFAC sanctioned one individual, three of his associates, and four related companies under the FNKDA for supporting the Clan del Golfo in Colombia.
  5. OFAC named the Kaniyat militia in Libya and its leader as SDNs under the Global Magnitsky Sanctions program (Executive Order 13818). According to a Treasury Department news release, the militia is “responsible for the murder . . . as well as torture, forced disappearances, and displacement of civilians” in Libya.

Comments

There are now 35 companies listed by the Department of Defense under Section 1237 of the NDAA 1999. As previously discussed, the recently issued Executive Order 13959 will soon prohibit US persons from some transactions in securities of the companies. The Executive Order kicks in on 11 January 2021 for 31 of the companies and 1 February 2021 for the four newly added companies. Meanwhile, the securities industry is anxiously awaiting guidance from OFAC on the scope of the prohibition.

Isn’t XPCC already an SDN under the Global Magnitsky Sanctions program? Why the WRO? As it happens, most goods would cease being blocked property under Executive Order 13818 once purchased from XPCC by distributors or manufacturers outside the United States. Up next: the Senate may vote on the Uyghur Forced Labor Prevention Act, which, if signed into law, would put a mega-WRO on all products from China’s Xinjiang Province.

Breaking: The US State Department announced sanctions on 14 members of China’s National People’s Congress Standing Committee under Executive Order 13936 for their roles in promulgating the Hong Kong National Security Law. More on this next week.

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