Sanctions Top-5 for the week ending 6 March 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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- The US Office of Foreign Assets Control (OFAC) named two Chinese nationals as Specially Designated Nationals (SDNs) pursuant to Executive Orders 13694 and 13722 for their roles in laundering money stolen from two cryptocurrency exchanges in 2018. The cyber thefts are believed to be connected to the Lazarus Group, a North Korean hacking outfit sanctioned by OFAC in September 2019.
- OFAC removed Russia’s Independent Petroleum Company (IPC) and a subsidiary from the SDN List. The company’s were sanctioned in June 2017 pursuant to Executive Order 13722 for engaging in shipments of petroleum products to North Korea. The companies adopted a compliance program and other measures “to ensure they do not engage in activity that may benefit North Korea,” according to a Treasury Department news release. (For more on OFAC’s lifting of sanctions on corporate entities, see my team’s recent client briefing.)
- Cambodia’s National Police announced the detainment of the tanker MT Courageous for suspected ship-to-ship transfers in violation of UN Security Council Resolutions 2375 (2017) and 2397 (2017) concerning North Korea. (Here is the link to the official police statement, which includes photos of the ship as well as its 16 crew members, who were also detained.)
- OFAC named the Nicaraguan National Police (NNP) and three commissioners as SDNs pursuant to Executive Order 13851 and the Nicaragua Human Rights and Anticorruption Act of 2018 (NHRAA), for their roles in serious human rights abuses against protesters and opposition figures since April 2018.
- The UN Security Council’s ISIL (Da’esh) and Al-Qaida Sanctions Committee added entities in Indonesia, Libya, and Yemen to the UN Sanctions List pursuant to UN Security Council Resolution 2368 (2017) for their connections to the Islamic State in Iraq and the Levant (ISIL). The decision follows the committee’s sanctioning of two ISIL splinter groups in Africa last month.
Comments
If you joined us for last week’s Windward webinar, you heard a lot about the red flags for sanctions evasion on the high seas. The Cambodian government’s seizure of the MT Courageous reinforces the message. I reached out to the maritime intelligence analysts at Windward for their thoughts. As it turns out, the company’s algorithms had rated the tanker as high-risk for illicit activity.
“Over the past year, the Courageous had been operating around Taiwan. It had more than 200 days of dark activity and zero port calls detected during this period,” the analysts explained. According to Windward’s data, the vessel vanished off the coast of Taiwan for 4 months starting in August 2019 and recently changed to a Cameroon flag. The voyage to Cambodia was the first one outside of the Taiwan region in years. “This was a major deviation,” they said. “This operational profile is consistent with the trade of oil product to the DPRK via dark transshipments at sea.”
Bonus item: OFAC issued a new FAQ regarding humanitarian shipments by US persons to Iran in response to the COVID-19 outbreak in the country. In summary, the FAQ notes that OFAC regulations provide various exceptions and authorizations for the donation of medicine, the commercial sale of humanitarian goods, and activities of non-governmental organizations, subject to conditions. As mentioned last week, the US Treasury Department has also adopted a framework with the government of Switzerland for payments related to exports of humanitarian goods to Iran.
Stay healthy, everyone!
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(The views expressed are my own and do not constitute legal advice. Photo from Vladislav Reshetnyak.)
