February 2, 2016
1. Joint Comprehensive Plan of Action (JCPOA)
a. Negotiation and Signing of JCPOA–July 14, 2015
On July 14, 2015, the E3/EU+3 (China, France, Germany, the Russian Federation, the United Kingdom, and the United States) signed the Joint Comprehensive Plan of Action ("JCPOA" or "Agreement") with the Islamic Republic of Iran to ease sanctions on the country in exchange for limits on its nuclear program. The agreement was the result of heated negotiations spanning back to November 2013. Under the agreement, as Iran complies with provisions of the agreement–such as caps on its uranium enrichment capabilities and inspections of its key nuclear facilities–the E3/EU+3 will relax many nuclear-related U.S., European Union, and United Nations economic sanctions currently in place. On July 20, 2015, a few short days after the agreement was made, the United Nations Security Council endorsed the agreement.
b. Adoption Day – October 18, 2015
Following the initial agreement on July 14, the next key milestone in the implementation of the JCPOA, "Adoption Day," came on October 18, 2015. Adoption Day officially started the clock for Iran to take steps to remove thousands of centrifuges and related infrastructure, reduce its enriched uranium stockpile, and remove the core of the Arak heavy-water reactor.[1] In exchange for these measures, the other signatories began preparations to lift nuclear-related sanctions against Iran in accordance with the terms of the JCPOA.
In a Presidential Memorandum issued on Adoption Day, President Obama directed the Secretaries of State, the Treasury, Commerce, and Energy "to take all necessary steps to give effect to the U.S. commitments with respect to sanctions" as described in the JCPOA.[2] Note, however, that Adoption Day still did not signal the implementation of any U.S. sanctions relief. The Department of the Treasury’s Office of Foreign Assets Control ("OFAC") was careful to issue a statement and FAQ that emphasized this point, cautioning that "[u]ntil Implementation Day is reached, the only changes to the Iran-related sanctions are those provided for in the Joint Plan of Action (JPOA) of November 24, 2013, as extended."[3]
c. Implementation Day – January 16, 2016
On January 16, 2016, the easing of international sanctions contemplated by the JCPOA officially went into effect with the arrival of "Implementation Day."
As alluded to above, Implementation Day came about following the International Atomic Energy Agency’s ("IAEA") official verification that Iran met its initial nuclear-related obligations under the JCPOA. Simultaneous with the international inspectors’ report verifying implementation by Iran of its nuclear-related commitments, Implementation Day brings significant – and in parts comprehensive – sanctions relief from the international community and chiefly from the European Union and the United States. Implementation Day arrived on the earlier-end of expert expectations.
Iran reportedly took an important step towards triggering Implementation Day on December 28, 2015 when a ship departed Iran for Russia carrying more than 25,000 pounds of low-enriched uranium materials.[4] This shipment included the removal of all of Iran’s nuclear material enriched to 20 percent that was not already in the form of fabricated fuel plates for the Tehran Research Reactor. The removal of these materials out of Iran is an important step toward Iran meeting its commitment under the JCPOA to have no more than 300 kilograms of low-enriched uranium on Implementation Day. In an official statement, John Kerry, the U.S. Secretary of State, explained the significance of this requirement by saying that this reduction would increase Iran’s breakout time to obtain enough nuclear material for a weapon from less than 90 days to closer to one year.[5]
The IAEA has since verified that Iran’s enriched uranium stockpile has indeed been reduced to 300 kilograms or less, as well as confirmed that Iran has met all of its other nuclear-related obligations, such as removing much of Iran’s uranium enrichment infrastructure, and removing and rendering inoperable the existing core of the Arak Reactor.[6] Under the Agreement, Iran also agreed to cap its uranium enrichment capability for 10 years and to international monitoring of its nuclear program. The monitoring will address whether Iran has engaged in weapons-related activity under the auspices of its nuclear program.
d. Easing of Iran Sanctions with Continued Limits and Complexities
Simultaneously with the IAEA’s verification that Iran had met its initial obligations under the agreement, broad international sanctions relief to Iran, principally from the United States, European Union, and United Nations went into effect. These changes open new, immediate, and substantial opportunities in the Iranian market, but with continued complexities, ambiguities, and risk.
(i) U.S. Sanctions Relief
United States sanctions on Iran have included the "blacklisting" of more than 700 individuals and entities on the U.S. Treasury Department’s Office of Foreign Assets Control’s ("OFAC’s") list of Specially Designated and Blocked Nationals ("SDN List"), as well as economic restrictions imposed on entities under U.S. jurisdiction ("primary sanctions") and restrictions on entities outside U.S. jurisdiction ("secondary sanctions"). While the sanctions relief that came into effect on Implementation Day includes relief to each of these three aspects of sanctions, the majority of the relief provided by the U.S. under the JCPOA concerns secondary sanctions.
In short, the U.S. domestic trade embargo on Iran remains in place with changes only at the margins.
With Implementation Day, the U.S. has removed a number of sanctions specified in Annex II of the JCPOA[7] and terminated Executive Orders 13574, 13590, 13622, 13645, and sections 5 through 7 of Executive Order 13628.[8]
(a) Secondary Sanctions – Prohibitions on Non-U.S. Entities Engaging with Iran
The bulk of this sanctions relief is geared toward the secondary sanctions directed at non-U.S. persons and will include lifting restrictions against non-U.S. persons involved in the following activities:
(b) Ongoing Limits to Secondary Sanctions Relief
Non-U.S. banks, companies and persons must be aware of two key limitations to the removal of U.S. secondary sanctions.
First, the risk of secondary sanctions continue to attach to significant transactions by non-U.S. parties with Iranian persons who continue to be on the SDN List; the Islamic Revolutionary Guard Corps ("IRGC") and its designated agents or affiliates; and any other persons on the SDN List designated due to their association with Iran’s proliferation of Weapons of Mass Destruction or Iran’s support for international terrorism.
Second, the removal of secondary sanctions does not mean that parties can use or leverage U.S. services or institutions to engage with Iran. With the exceptions described below, U.S. persons continue to be generally barred from exporting goods, services or technology directly or indirectly to Iran. For example:
(c) Primary Sanctions
The United States is only providing primary sanctions relief with respect to three defined categories of transactions involving (1) foreign subsidiaries of U.S. corporate parents; (2) commercial passenger aviation; and (3) the importation of Iranian foodstuffs and carpets. Each category of relief is provided differently and has distinct limitations.
Foreign Subsidiaries of U.S. Companies:
On Implementation Day, OFAC issued a regulatory exemption ("General License" or "GL H") to foreign companies "owned or controlled" by U.S. persons to engage in activities with Iran consistent with the JCPOA.[10] GL H allows such companies to transact in and with Iran under several significant constraints due to OFAC’s description of transactions inconsistent with the JCPOA and/or violative of U.S. laws. GL H does not permit foreign subsidiaries from inter alia engaging in dealings involving:
Although GL H requires a significant firewall between the U.S. parent and its foreign subsidiary with respect to the subsidiary’s Iran dealings, OFAC has provided two dispensations that allow some contact between the parent and subsidiary:
While the exact contours of GL H remain unclear in the initial guidance, OFAC has noted that the purpose of the license and the two dispensations above are to allow U.S. persons, including senior management of U.S. corporate parents, to be involved in the initial determination to engage in activities with Iran, but not to be involved in the Iran-related day-to-day operations of their foreign subsidiaries.
Commercial Passenger Aviation
Under the JCPOA, the United States will also allow for the sale by U.S. persons of commercial passenger aircraft and related parts and services to Iran and license non-U.S. persons that are owned or controlled by U.S. persons to engage in activities in Iran.[12]
The individual exemptions ("Specific Licenses") will be broad with respect to the types of activities covered but limited in important ways. In addition to airframes, engines and avionics, the licenses may also allow the provision of warranty, maintenance, repair services, safety-related inspections, spare parts, and training. "Ordinarily incident and necessary" services could include transportation, legal, insurance, shipping, delivery and financial payment services, including the use of U.S. financial institutions for some of these services. However, it is not yet clear if U.S. financial institutions will be able to deal directly with Iranian counterparts even in the context of Specifically Licensed transactions.[13]
Further, there are two key limitations:
Importation of Iranian Foodstuffs and Carpets
The United States’ ban on the importation of Iranian-origin foodstuffs and carpets was one of the last measures imposed by the United States on Iran as sanctions escalated prior to the nuclear negotiations. Though of comparatively limited economic weight compared with the other sanctions relief on offer, it was is an important aspect of relief for the Iranian government and can provide direct benefit to some of Iran’s most economically vulnerable populations.
In order to implement this relief, OFAC will issue a General License to cover U.S. persons’ purchases of Iranian-origin food and carpets and services ordinarily incident and necessary to such transactions. U.S. financial institutions can be involved in these transactions, but OFAC will continue its restrictions on almost all direct connections between U.S. banks and Iranian counterparties, which will usually mean that transactions between the U.S. and Iran for Iranian food or carpets will require intermediation by a third-country financial institution willing to engage. It remains to be seen how many third-country banks will be willing to serve in such a role.
The JCPOA also requires the United States to take appropriate steps to implement the sanctions lifting as specified in the Agreement, including actively encouraging officials at the state or local level (such as the New York State Department of Financial Services, or "DFS") to take into account the changes in U.S. policy reflected in the lifting of sanctions and to refrain from actions inconsistent with this change in policy.
(ii) EU Sanctions Relief
The EU’s sectoral sanctions against Iran, subject only to the few remaining prohibitions set out below, have been removed.[14] A vast new market has become available to the overwhelming majority of EU businesses.
The EU sanctions related to all activities:
The EU’s sanctions did not extend to foreign subsidiaries of EU companies, but there were broadly-phrased anti-circumvention provisions that went some way towards this effect.
The list of now-permitted business is too long to list. Perhaps most importantly, the Iranian oil and gas sector is now free of EU sanctions. All imports of Iranian oil and other hydrocarbon products are now permitted from any supplier. Additionally, exports of equipment, technology, and services are now permitted to Iranian oil and gas producers, refiners, and those involved in exploration and development. All restrictions of insurance related to Iran’s oil and gas market have similarly been removed. Other key examples of a newly unsanctioned Iranian industries include the shipping, ship building, and transportation sectors and the bond market.
In addition to the removal of these sectoral sanctions, all of the hundreds of individuals and companies previously blacklisted on the basis of being involved in, or supporting, Iran’s nuclear program have been de-listed. Billions of dollars held in EU accounts by these entities will now be unfrozen. Transfers to and from these individuals and entities will now be unrestricted. Debts long owed to listed entities can now be paid. As a chief exemplar, this will allow Royal Dutch Shell to pay several billion dollars owed to the National Iranian Oil Company for deliveries of oil shipped just before the implementation of the sanctions.
The provisions of perhaps broadest effect in preventing business with Iran were the prohibitions on financial transfers to/from all "Iranian Persons" (broadly defined) without either pre-notification to the relevant authority in each Member State or, where the transfer was above a certain threshold, pre-authorization from the relevant authority. There were limited exceptions for humanitarian purposes, medical products, and foodstuffs, but by the same token if an Iranian bank was involved, the restrictions were tighter again. In practice, therefore, the sanctions allowed trade with Iran in many items, but the EU company could neither pay nor be paid.
The restrictions on financial transfers to or from Iranian persons have now been entirely removed. The EU’s regulation that had removed many Iranian banks from the SWIFT system has now also been repealed. Alongside the lifting of prohibitions on EU banks establishing correspondent relationships with Iranian banks, and establishing offices in Iran, the result is to remove a whole series of shackles from the entire Iranian banking sector. The export and transfer of cash proxies, such as precious metals and stones, are now also unrestricted.
Remaining EU Sanctions – Human Rights, Terrorism, and Arms Embargo
Even though the EU sanctions relief triggered by Implementation Day is far reaching, there are still limits to the relief. Certain EU sanctions regimes relating to Iran but unrelated to the sanctions aimed at nuclear proliferation will remain in full effect after Implementation Day. These include the EU sanctions legislation relating to human rights violations and certain sanctions relating to terrorism, as well as the arms embargo, and certain limited restrictions on software and rare metals related to nuclear proliferation.
(iii) UN and Other Sanctions Relief
Under the JCPOA, on Implementation Day the United Nations Security Council was obligated to pass a new Resolution terminating United Nations Security Council Resolutions 1696, 1737, 1747, 1803, 1835, 1929, and 2224.[15] These Resolutions will be subject to re-imposition in the event of significant non-performance by Iran of JCPOA commitments. The JCPOA also establishes a Joint Commission, which includes representatives from Iran, China, France, Germany, Russia, the United Kingdom, and the United States, that will review implementation of the Agreement. If Iran is determined to be in non-compliance with its obligations by a majority of the members of the Joint Commission, the United Nations Security Council Resolutions will be re-imposed. This is the so-called "snapback" provision.
The UN arms embargo on Iran continues to be in force for another five years, though countries may petition the UN Security Council for authorization to sell certain weapons systems. In addition, UN sanctions on individuals previously designated for participating in Iran nuclear and ballistic missile programs will remain in place unless such persons are explicitly removed from the list by the UN Security Council.
The Federal Council of Switzerland announced that Switzerland would also ease sanctions against Iran on Implementation Day.[16]
e. Re-Entering Markets
While there is significant interest in re-entering Iranian markets, businesses should proceed with caution. First, the sanctions relief is not yet in place. As noted, the process for implementing the Agreement is complex and lengthy. Achieving sanctions relief may still take a significant amount of time. Given the complexity of the process, the deal could still unravel during implementation. U.S. and European businesses must wait until the relief is in place before engaging in any activities that could be permitted under the Agreement. Likewise, even once the sanctions relief is in place, a significant risk still exists that Iran will be judged to be in non-compliance with its obligations and that sanctions will be re-imposed.
Second, while the Agreement eases a significant number of sanctions on Iran, many prohibitions remain, including U.S. sanctions related to Iran’s human rights abuses and to its support of terrorist groups and Syria. OFAC will continue to aggressively enforce the sanctions still covering the country. Our clients and friends should exercise caution in re-entering Iranian markets, as such new business could easily result in inadvertently conducting prohibited transactions.
f. Next Steps and the Way Ahead
Implementation Day does not mark the conclusion of the Iran sanctions story, but it does mark the end of an important chapter in economic restrictions on Iran. It is unlikely that the globally comprehensive nature of sanctions on Iran will return even in the case of a "snap back" of sanctions in the event of non-compliance. While the United States could re-impose the full suite of its unilateral sanctions on Iran – and indeed has made it clear that there will be no grandfathering of contracts signed before a snapback – it is not certain that other members of the P5+1 (let alone other states) would be willing to return to a pre-JCPOA world.
In the coming weeks and months, we expect to see four factors come into play:
First, we expect many companies in the U.S. and outside of it – not just those in the civil aviation sector – to consider and apply for specific licenses from the U.S. government. OFAC has said that in certain circumstances it will consider licenses from non-U.S. parties and the administration has made it clear that specific licenses covering activities outside the confines of the defined JCPOA relief – but in line with U.S. foreign policy interests – may be considered in light of the broader U.S. interest in effectuating real sanctions relief and further solidifying the deal.
Second, Implementation Day leaves untouched the existing general licenses available under U.S. Iran sanctions. These include allowances for the exportation of agricultural goods, pharmaceuticals, medical devices, and certain services, software and hardware incident to personal communications (such as smart phones). Before Implementation Day, these licenses remained largely unused as potential exporters could not find insurers, financiers or others willing to engage in transactions with Iran. With Implementation Day, we expect more of these trade intermediaries to become willing to serve in such roles and allowing exporters to take greater advantage of existing permissions.
Third, a significant unknown that will be worked out in the weeks and months to come concerns how and if international financial institutions will adjust to new sanctions realities. It remains to be seen how major financial institutions, many of which that have suffered significant fines and reputational damage over the past several years for violating U.S. sanctions – and in some cases remain under consent orders or other restrictions from state (rather than federal) authorities in the United States – will adjust to a new reality in which the federal legal prohibitions may have changed but state restrictions and potential reputational exposure remain. Of note, OFAC makes clear in its guidance that even after Implementation Day, Iran remains a "Jurisdiction of Primary Money Laundering Concern" under section 311 of the USA PATRIOT Act – under which the U.S. Treasury has the authority to require U.S. financial institutions to take "special measures" with respect to such jurisdictions, financial institutions and/or international transactions related to such jurisdictions.
Fourth, prior to its issuance of JCPOA sanctions relief, OFAC and the broader administration conceded that the relief process will likely be iterative – that is, there was a realization that this first tranche of licenses and interpretative guidance may not be sufficient to fully implement the relief that the United States agreed to provide. As such, we expect continued reassessments and potentially issuances of new licenses and interpretative guidance in the time ahead as the administration attempts to calibrate its relief in order to effectuate it as much as possible within the continuing constraints set by unchanging sanctions statutes passed by Congress.
2. Other Developments
a. Nov. 2, 2015 – OFAC expands List of Medical Supplies eligible for export or reexport to Iran under general license Sec. 560.530 (a)(3)
While overshadowed by news surrounding the JCPOA, OFAC announced on November 2, 2015 that the List of Medical Supplies eligible for export or reexport to Iran would be expanded.[17] The list is tied to the general license at Section 560.530(a)(3) of the Iranian Transactions and Sanctions Regulations ("ITSR") which permits "covered persons" to export or reexport to Iran EAR99 "medical supplies" identified in the list to the Government of Iran or individuals or entities in Iran and to engage in related transactions.[18]
OFAC’s recent action added a large number of new items to the list, such as those related to genetic testing products–under a new category of "Inherited Preventative Care"–and maternity care, cardiology, and radiology.[19]
1. Developments in Cuba
On December 17, 2014, President Obama announced historic changes in the diplomatic and economic relationships between the United States and Cuba.[20] The President called for substantial changes to the implementation of the U.S. embargo against Cuba and the ability of individuals residing in the U.S. to travel to Cuba for specified reasons, as well as for U.S. persons, individuals, and businesses to engage in limited commerce with the Cuban people.[21]
In the year that followed, various departments of the Administration took steps to implement the landmark policy shift, and these actions are summarized below. One year to the day after his initial announcement, President Obama summarized the changes, stating, "[W]e have taken important steps forward to normalize relations between our countries–reestablishing diplomatic relations and opening embassies; facilitating greater travel and commerce; connecting more Americans and Cubans; and promoting the free flow of information to, from, and within Cuba."[22]
a. Actions taken by the Treasury and Commerce Departments
As an initial step toward a new relationship with Cuba, on January 15, 2015, the United States Department of the Treasury ("Treasury Department") and the United States Department of Commerce ("Commerce Department") released regulatory amendments implementing the historic changes to the Cuba sanctions regime that were announced in December 2014.[23] On September 18, 2015, the Treasury and Commerce Departments released additional amendments, which are discussed infra at Section I.B.1.a.ii. And even more recently, on January 26, 2016, the Treasury and Commerce Departments announced further amendments, which took effect January 27, 2016.[24]
(i) January 15, 2015: Treasury and Commerce Announce Regulatory Amendments to the Cuba Sanctions
The January 2015 amendments incorporated the diplomatic and economic changes to U.S. policy towards Cuba announced by the President as they apply to the regulations enforced by OFAC and the Commerce Department’s Bureau of Industry and Security ("BIS").[25] The revised Cuban Assets Control Regulations[26] and Export Administration Regulations[27] took effect on January 16, 2015, one day after issuance. As discussed in detail in our Gibson Dunn Client Alert, "U.S. Department of the Treasury and Department of Commerce Issue Rules Implementing Changes in U.S. Policy on Cuba," the changes focused primarily on the following areas: (i) travel; (ii) financial services; (iii) importation of goods; (iv) telecommunications; (v) consumer communications devices; (vi) insurance; (vii) remittances; (viii) third-country effects; (ix) small business growth; (x) the definition of "cash in advance;" (xi) support of the reestablishment of diplomatic relations; and (xii) support for the Cuban people.[28]
Some of the key amendments included the provision of a general license for transactions (including payments) that are related to the establishment of facilities to provide telecommunications services;[29] authorization of the exportation or reexportation of certain services including software design, business consulting, information technology management, and others incident to the exchange of communications over the internet;[30] establishment of twelve non-tourism related categories of authorized travel for U.S. persons to Cuba;[31] removal of the requirement that travel agents and airlines obtain a specific license from OFAC in order to provide authorized travel services;[32] permission for authorized travelers to use U.S. credit and debit cards in Cuba for travel-related transactions and for U.S. financial institutions to enroll merchants to process such transactions;[33] expanded financing options for authorized exports to Cuba through a revision to the regulatory guidance concerning the term "payment of cash in advance;"[34] and increases in the authorized amount of remittances to Cuba.[35]
Concurrent with the amendments issued by OFAC, BIS amended the EAR to create a series of license exceptions for certain exports to Cuba.
(ii) September 18, 2015: Treasury and Commerce Announce Further Amendments
Eight months after the January 2015 amendments went into effect, the Treasury and Commerce Departments announced additional revisions to the CACR and EAR, which took effect on September 21, 2015.[36] A selection of the amendments implemented by OFAC is discussed below.
OFAC authorized certain persons subject to U.S. jurisdiction to establish a physical presence, such as an office or facility, in Cuba to facilitate authorized transactions.[37] This includes: news bureaus; exporters of certain goods authorized for export or reexport to Cuba; providers of authorized mail and cargo transportation services; providers of telecommunications or Internet-based services; entities organizing or conducting certain educational activities; religious organizations; and providers of travel and carrier services.[38] OFAC authorized the importation of Cuban-origin mobile applications into the United States, and permitted persons subject to U.S. jurisdiction to hire Cuban nationals to develop such mobile applications.[39] The amendments permit authorized travelers to open and maintain bank accounts in order to access funds for authorized transactions while located in Cuba and to close those accounts.[40] OFAC also removed all limitations on donative remittances to Cuban nationals who are not prohibited officials of the Cuban Government or prohibited members of the Cuban Communist Party and removed all limitations on authorized remittances that individuals may carry to Cuba.[41]
b. Actions taken by the State Department
Implementing the changes called for by President Obama in his December 2014 announcement about U.S.-Cuba relations required not only action by the Treasury and Commerce Departments but also action by the State Department.
(i) May 29, 2015: State Department Removes Cuba from State Sponsor of Terrorism List
When President Obama announced the shift in U.S. policy toward Cuba, he instructed the Secretary of State to launch a review into Cuba’s designation as a State Sponsor of Terrorism (SST). In April 2015, the Secretary of State concluded that review and recommended the rescission of Cuba’s designation as a SST. The President then submitted a report to Congress communicating the Administration’s intent to remove Cuba from the SST list. On May 29, 2015, after the 45-day Congressional pre-notification period had elapsed, the Secretary of State officially rescinded Cuba’s designation as a SST.[42] As stated in a White House press release, "Removing Cuba from the [SST] list helped pave the way for the re-opening of embassies and increased ties between our countries and people."[43]
(ii) February 13, 2015: State Department Releases Lists of Allowable Cuban Imports
As discussed supra at Section I.B.1.a.i, on January 15, 2015, the Treasury Department released regulatory amendments to the CACR that addressed a wide range of economic activity. One of these amendments included a newly-added provision to the CACR, 31 C.F.R. § 515.582, which opened the doors for the importation of certain Cuban goods and services by persons previously prohibited from doing so under the CACR. Specifically, § 515.582 provides that "[p]ersons subject to U.S. jurisdiction are authorized to engage in all transactions, including payments, necessary to import certain goods and services produced by independent Cuban entrepreneurs as determined by the State Department as set forth on the State Department’s Section 515.582 List, located at http://www.state.gov/e/eb/tfs/spi/." On February 13, 2015, the State Department published the Section 515.582 List and provided additional guidance on the contours of this new authorization.[44] The list is discussed in more detail in our Gibson Dunn Client Alert, "U.S. Department of State Releases List of Cuban Goods and Services Now Eligible for Importation."[45] Referencing the Harmonized Tariff Schedule (HTS) of the United States, the State Department set forth a negative list of specific categories of goods that are not authorized for importation. Any goods that fall under one of the enumerated categories are still prohibited for importation; however, any goods produced by independent Cuban entrepreneurs that do not fall under one of the enumerated categories are now eligible for importation.
The State Department noted that the $400 monetary limit set forth in § 515.560(c)(3) of the CACR for travelers bringing back goods from Cuba as accompanied baggage would not apply for any goods now authorized for import under § 515.582. An important limitation on the authorization granted by § 515.582 is that any allowable goods or services must be produced or supplied by "independent Cuban entrepreneurs," and importers must obtain documentary evidence that demonstrates this status.[46]
2. Guidance
a. December 21, 2015: Updated FAQs
On December 21, 2015, the Treasury Department updated its guidance document Frequently Asked Questions Related to Cuba.[47] The updated guidance provides clarification on topics such as travel, travel and carrier services, remittances, banking, trade/business, telecommunications, third-country effects, as well as miscellaneous topics.
b. September 21, 2015: Guidance Regarding Travel Between the United States and Cuba
On September 21, 2015, the Treasury Department issued Guidance Regarding Travel Between the United States and Cuba, which clarifies the categories of individuals and cargo a carrier can transport between the United States and Cuba.[48]
1. Executive Orders
a. 13695 (May 2015): Termination of Emergency with Respect to the Risk of Nuclear Proliferation Created by the Accumulation of a Large Volume of Weapons-Usable Fissile Material in the Territory of the Russian Federation
On May 26, 2015, President Obama issued Executive Order 13695, which "terminate[d] the national emergency declared in Executive Order 13617."[49] Issued June 25, 2012, Executive Order 13617 declared a national emergency concerning "the risk of nuclear proliferation created by the accumulation of a large volume of weapons-usable fissile material" in the Russian Federation as a result of nuclear weapons reductions pursuant to arms control agreements.[50] Executive Order 13695 terminated this emergency because of the effective implementation of an agreement between the Russian Federation and the United States governing the treatment of uranium removed from nuclear weapons.[51]
a. 6 – Noncommercial, Personal Remittances Authorized (1/30/15)
General License No. 6 authorizes U.S. persons to send and receive money involving a noncommercial, personal remittance to or from the Crimea region "for or on behalf of an individual ordinarily resident" in that region.[52] Such transfers, however, must not be by, to, or through persons blocked pursuant to certain Executive Orders.[53] Institutions effecting authorized transfers may "rely on the originator of a funds transfer" for compliance with this requirement but may not effect a transfer if it knows or has reason to know that a blocked individual is involved.[54] This license does not include charitable donations or transfers in support of businesses, including family-owned businesses.[55]
b. 7 – Operation of Accounts Authorized (1/30/15)
This general license authorizes U.S. financial institutions to operate accounts for non-blocked, ordinary residents of the Crimea region.[56] The authorization only exists for transactions that (1) are "of a personal nature and not for use in supporting or operating a business," (2) do not involve direct or indirect transfers to the Crimea region "or for the benefit of" ordinary residents of the Crimea region, unless permitted by General License No. 6, and (3) are not otherwise barred by certain Executive Orders.[57]
c. 8 – Transactions Related to Telecommunications and Mail Authorized (1/30/15)
Under General License No. 8, transactions involving telecommunications transmissions with the Crimea region are permitted so long as they do not involve a person blocked pursuant to certain Executive Orders.[58] The license does not permit, however, the "provision, sale, or lease of telecommunications equipment or technology" or the "provision, sale, or lease of capacity on telecommunications transmission facilities (such as satellite or terrestrial network activity)."[59] The license also authorizes common carrier transactions incident to mail and package transfers between the Crimea region and the United States, so long as the transfers are not otherwise prohibited.[60]
d. 9 – Exportation of Certain Services and Software Incident to Internet-Based Communications Authorized (5/22/15)
General License No. 9 generally authorizes U.S. persons to export to the Crimea region "services incident to the exchange of personal communications over the Internet, such as instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, and blogging" so long as the services "are widely available to the public at no cost to the user."[61] The license also permits the exportation "of software necessary to enable" the authorized services, so long as such software "is widely available to the public at no cost to the user" and is "designated EAR 99" under U.S. Export Administration Regulations or is classified "as mass market software" by the U.S. Department of Commerce pursuant to export control classification number 5D992.[62] Foreign software "widely available to the public at no cost to the user" that is not subject to U.S. Export Administration Regulations is also permitted to be exported, provided that it would be designated EAR 99 or classified under 5D992 if it were subject to such regulations.[63] The license does not permit the exportation of services or software "with knowledge or reason to know that such services or software are intended for" blocked persons.[64] Nor does it authorize the exportation of certain goods or services on the Commerce Control List of U.S. Export Administration Regulations, "commercial-grade Internet connectivity services or telecommunications transmissions facilities," web-hosting services "that are for commercial endeavors," or domain name registration services.[65] The license also specifies that specific licenses may be approved for other software or hardware exports, and that other federal agencies’ export license requirements are not diminished by this license.[66]
3. FAQs
a. 5/7/15: New and Revised Frequently Asked Questions (FAQs) Regarding Ukraine-related Sanctions
(i) FAQ 395; FAQ 419; FAQ 453
On May 7, 2015, OFAC revised two Frequently Asked Questions (FAQs) concerning Ukraine/Russia-related Sanctions (FAQ 395 and FAQ 419) and unveiled a new FAQ 453.[67]
FAQ 395
FAQ 395 clarifies that under Directives 1, 2, and 3, issued by OFAC in 2014 pursuant to Executive Order 13662, U.S. persons may deal in or "process transactions under a letter of credit in which an entity subject to" one of the three Directives (a Sectoral Sanctions Identification List entity ("SSI entity")) is the beneficiary "because the subject letter of credit does not represent an extension of credit" to the entity.[68] U.S. persons may also deal in or "process transactions under a letter of credit where the issuing bank is an SSI entity" as long as the payment obligation terms comply with the Directives’ debt prohibitions.[69] The FAQ also explains, however, that U.S. persons are prohibited from dealing in or processing transactions pursuant to a letter of credit if the letter’s term is longer than 30 or 90 days maturity (depending on the Directive) and the applicant of the letter is an SSI entity.[70]
FAQ 419
Under FAQ 419, OFAC explains that U.S. persons may conduct transactions that do not involve prohibited debt or equity with SSI entities.[71] However, U.S. persons must avoid using payment terms that violate the debt prohibitions of Directives 1, 2, and 3, as payment terms over 30 or 90 days "generally constitutes a prohibited dealing in debt of the SSI entity."[72] With respect to sales of goods, payment terms may extend up to 30 or 90 days "from the point at which title or ownership of the goods transfers to the SSI entity" while for "the provision of services to, subscription arrangements involving, and progress payments for long-term projects," payment terms may extend up to 30 or 90 days "from the point at which a final invoice (or each final invoice) is issued."[73] If a U.S. person "believes that it may not receive payment in full by the end of the 30- or 90-day period," it should consult with OFAC to ascertain whether a license or some other form of authorization is needed.[74]
FAQ 453
The response to Question 453 explains that under General License No. 6, U.S. financial institutions may process noncommercial, personal remittances to or from Crimea if neither the remitter nor the beneficiary are U.S. persons.[75] U.S. financial institutions may act as an intermediary in such situations.[76]
FAQ 454
On May 21, 2015, OFAC released FAQ 454, which clarifies that under General License No. 9, U.S. persons may not export or reexport, directly or indirectly, certain services or software "with knowledge or reason to know that such services or software are intended for" any blocked person.[77] OFAC advises that U.S. persons should engage in due diligence to avoid transactions involving blocked individuals or entities.[78]
4. Designations
a. 3/11/15: Treasury Announces New Designations of Ukrainian Separatists and their Russian Supporters
On March 11, 2015, OFAC added 14 individuals and two entities to its SDN list as part of its Ukraine-related designations.[79] OFAC’s designations were made as part of an effort to support a diplomatic solution to the Ukraine conflict.[80] Recent acts by "Russian-armed separatists" had violated the Minsk agreements, and in response, OFAC announced these new designations on a Russian pro-separatist entity, its leaders, eight Ukrainian separatists, a bank operating in Crimea, and three individuals who had misappropriated Ukrainian state assets, pursuant to Executive Orders 13660 and 13685.[81] OFAC’s announcement emphasized that its actions followed "similar action" by the EU and Canada in the month before, and that OFAC would "continue to work to remain in lockstep with [its] international partners" to "incentivize a diplomatic resolution to the crisis in Ukraine."[82]
b. 7/30/15: Treasury Sanctions Individuals and Entities Involved in Sanctions Evasion Related to Russia and Ukraine
(i) Sectoral Sanctions Identification List Additions
(ii) Additions to SDN List
OFAC added a series of individuals and entities to its SDN and Sectoral Sanctions Identification lists on July 30, 2015.[83] According to a press release accompanying the additions, they were aimed at keeping pressure on Russia for its actions in eastern Ukraine and supporting the implementation of the Minsk Agreements.[84] The sanctioned persons included entities connected with the Russian arms industry, former Ukrainian officials or "close associates," a ferry operator, a number of port operators, and subsidiaries of Rosneft and Vnesheconombank.[85]
5. Crimea Sanctions Advisory; Subject: Obfuscation of Critical Information in Financial and Trade Transactions Involving the Crimea Region of Ukraine (7/30/15)
On July 30, 2015, OFAC issued a Crimea Sanctions Advisory to alert U.S. persons about evasive practices being used to avoid U.S. sanctions involving the Crimea region.[86] The advisory warns that U.S. persons should "be aware of these practices in order to implement appropriate controls" to ensure compliance with U.S. sanctions programs.[87] OFAC warns U.S. persons to be wary of efforts by parties to leave out or hide references to Crimea in transactional documents, including those involving Society for Worldwide Interbank Financial Telecommunications ("SWIFT") messages.[88] OFAC recommends a number of steps to counteract these evasive measures, including: (1) making sure "that transaction monitoring systems include appropriate search terms corresponding to major geographic locations in Crimea and not simply references to ‘Crimea,’" (2) asking for "additional information from parties . . . that previously have violated or attempted to violate U.S. sanctions on Crimea," and (3) "communicating U.S. sanctions obligations to international partners . . . and discussing OFAC sanctions compliance expectations with correspondent banking and trade partners."[89]
1. Political update
In 1998, the United States began implementing sanctions against the government of Burma, a military junta, in response to their anti-democratic policies.[90] The Burmese sanctions program began as a broadly written ban on all transactions between U.S. persons and Burma, including a ban on all importation of Burmese goods.[91] In 2012, as a result of democratic progress in Burma, the United States decided to begin easing sanctions.[92] Through a series of general licenses reflecting the President’s objective to normalize relations with Burma, OFAC has limited its ban on transactions to a narrowing list of SDNs and opened importation of Burmese goods, except for jadeite and rubies.[93] In 2015, reflecting Burma’s political and economic transition towards democracy and national reconciliation, U.S. policy has continued to soften.
Following the historic election in Myanmar on November 8, 2015, in which Daw Aung San Suu Kyi and her National League for Democracy ("NLD") won a landslide victory, the political landscape in the country continues to evolve at a fast pace. The November parliamentary election marked the first national election since 2011, when a civilian government was introduced, ending almost 50 years of military rule.[94] Although the military still has veto power over constitutional changes and holds an unelected 25% of seats in parliament, the NLD’s victory and majority in parliament marks significant progress for the country.[95] And, because parliament chooses the president, Suu Kyi and her NLD party will ensure it is their choice that takes the position.[96] Parliament is expected to select the next president in March 2016, at the start of its first session.[97]
In December 2015, Suu Kyi attended private meetings with President U Thein Sein, Commander-in-Chief Min Aung Hlaing and, perhaps most surprisingly, U Than Shwe, the retired and aging Senior General who led the country for almost two decades and who was responsible for Suu Kyi’s many years of house arrest. While the exact nature and content of the three meetings has not been made public, it is believed that the focus was on achieving a smooth transition of power and on national reconciliation. The meeting with Than Shwe was particularly significant because he is believed still to wield great power from behind the scenes and, according to his grandson, he has now acknowledged that Suu Kyi will be the next leader of Myanmar.
2. OFAC Actions
Against the above backdrop, the U.S. has started to further ease its sanctions against Myanmar. On December 7, 2015, OFAC issued General License No. 20, lifting restrictions on certain trade-related transactions with Burma.[98] Under the General License, individuals, companies, and financial institutions can, for the next six months, conduct transactions "that are ordinarily incident to the exportation to or from Burma of goods, technology, or non-financial services."[99] Specifically, the General License authorizes incidental trade-related finance transactions, such as paying port fees and shipping and handling charges, so long as the transaction does not directly involve a Specially Designated National or an entity in which an SDN has a 50 percent or greater interest. This license will be in effect until June 7, 2016, and retroactively authorizes financial institutions to unblock and reinstate transactions back to April 1, 2015, would they have qualified as authorized had this license been in effect.
In practice, this will mean that U.S. persons can be involved in transactions that go through ports and facilities that are owned or controlled by SDNs. This has been a major bottleneck in promoting trade with Burma as major facilities at sea and airports in the country remain owned or controlled by SDNs. In July 2015, The Clearing House and The Bankers Association for Finance and Trade–associations representing many financial institutions–requested that OFAC issue a license allowing the use of the port terminals, so long as the SDNs were not directly involved in the transaction. This General License, by allowing port-related transactions as long as "the exportation is not to, from, or on behalf of" an SDN, provides the remedy the associations requested.
A General License such as this one that includes an expiration date is uncommon. The six-month timeframe may be insufficient to allow full-scale resumption of trade with the country–there remains uncertainty with respect to what will happen after six months or with contractual terms that may extend beyond the June 7, 2016 deadline. The U.S. government has pledged to review the License within the next several months and may renew it; it also has the power to remove the expiration date altogether. This latter option will be more likely if the political situation in the country continues to improve, and the new parliament is properly seated in March 2016.
If Burma’s public and economic policies reflect the NLD’s stewardship, 2016 should see further relief from U.S. sanctions. As it did twice in 2015,[100] OFAC may remove individuals and entities from the sanctions list and/or issue additional licenses for transactions with Burma.
1. H.R. 1191: Iran Nuclear Agreement Review Act of 2015
On May 22, 2015, President Obama signed into law the Iran Nuclear Agreement Review Act of 2015 ("INARA").[101] The bill amends the Atomic Energy Act of 1954,[102] and primarily serves to expand congressional oversight over the President’s efforts to reach a deal with Iran over its nuclear program.[103] The INARA, passed in response to President Obama’s open negotiations with Iran earlier this year, requires the President to, within five days after reaching an agreement with Iran, inform Congress of the terms of any deal reached and certify it meets policy objectives and "includes the appropriate terms, conditions, and duration of the agreement’s requirements with respect to Iran’s nuclear activities."[104] Additionally, INARA requires the Secretary of State to provide an assessment of its ability (and the International Atomic Energy Agency’s ability) to evaluate Iranian compliance with any agreement.[105]
INARA grants Congress a 30- or 60-day period to review the agreement, during which "the President may not waive, suspend, reduce, provide relief from, or otherwise limit the application of statutory sanctions with respect to Iran."[106] Under the INARA, Congress may pass a joint resolution of disapproval of the agreement during its review period.[107] If that occurs, INARA’s restrictions on the President remain in place for 12 calendar days following the passage of the resolution. The President can veto the joint resolution, which would reduce the restriction to 10 days. And, Congress can override the President’s veto with a second joint resolution, which would presumably increase the restriction back to 12 days.[108]
Finally, INARA establishes a series of reporting requirements for the President in order to "keep the appropriate congressional committees and leadership fully and currently informed of all aspects of Iranian compliance."[109] Every 180 days, the President has to submit to Congress a semi-annual report providing an assessment of the status of the agreement with Iran.[110] And the President must, within 10 days of receiving any information regarding a significant breach of compliance by Iran, report that information to Congress.[111]
In order to pass the INARA and avoid the threat of Presidential veto, lawmakers were forced to strip the bill of any serious measures or restrictions.[112] As a result, the INARA will ensure the President keeps Congress informed on the status of any agreements with Iran, and gives Congress the ability to delay implementation of such an agreement for a limited period of time.
2. S. Res. 148: A resolution condemning the Government of Iran’s state-sponsored persecution of its Baha’i minority and its continued violation of the International Covenants on Human Rights
On December 17, 2015, the U.S Senate issued a resolution "[c]ondemning the Government of Iran’s state-sponsored persecution of its Baha’i minority and its continued violation of the International Covenants on Human Rights."[113] Responding to a variety of reports, including the United States Commission on International Religious Freedom 2014 Report, the 2014 United Nations Special Rapporteur, and Department of State 2013 International Religious Freedom Report, the Senate voted unanimously in support of the resolution. The U.S. Commission Report revealed that the Iranian government sanctions the persecution of the Baha’i community, "the largest non-Muslim religious minority in Iran," for being "heretics" and apostates.[114] It also exposes that Iranian authorities have "killed or executed more than 200 Baha’i leaders, and more than 10,000 have been dismissed from government and university jobs."[115] Similarly, the Department of State Report explains that the Iranian government "requires Baha’is to register with the police, and . . . raided Baha’i homes and businesses and confiscated large amounts of private and commercial property, as well as religious materials."[116]
In response to these human rights violations, this resolution "urges the President and Secretary of State to impose sanctions on officials or the Government of Iran and other individuals directly responsible for serious human rights abuses, including abuses against the Baha’i community of Iran."[117] But, given the U.S. priority in negotiating relations with Iran is over nuclear capability, the prospect of adding sanctions to combat human rights violations will likely take a backseat. Further, Senate Resolution 148 was introduced in April, only a few weeks prior to the Senate Republicans’ "open letter to Iran" criticizing the negotiations over an international nuclear deal.[118] Although the Senate ultimately agreed to the resolution in December, whether the Obama administration will act on the Senate’s request is yet to be known.
3. S. 284: Global Magnitsky Human Rights Accountability Act
On December 17, 2015, the U.S. Senate passed the Global Magnitsky Human Rights Accountability Act ("Global Magnitsky Act") as a worldwide expansion of the 2012 Sergei Magnitsky Rule of Law Accountability Act.[119] The Global Magnitsky Act, although considered unlikely to become law, endows the President with additional power to impose sanctions on individual human rights offenders.[120] Upon identifying a foreign individual or entity that "the President determines, based on credible evidence . . . is responsible for extrajudicial killings, torture, or other gross violations of internationally recognized human rights committed against individuals in and foreign country," the President may impose enumerated sanctions against that foreign person.[121] The Global Magnitsky Act authorizes the use of U.S. entry and property sanctions, including denying or revoking visas[122] and freezing assets,[123] but proscribes sanctions relating to importation of goods.[124] Finally, under the Act, the President is required to respond to requests by the Chairperson and ranking member of appropriate Congressional committees within 120 days of receiving a request to consider sanctions against a specific foreign person.[125] Although the Act does not require the President to impose sanctions, it does require that the President "consider . . . information provided by the chairperson and ranking member of each of the appropriate congressional committees" and human rights monitoring nongovernmental organizations.[126]
The Global Magnitsky Act is part of the paradigm shift evident in U.S. sanction policy in which the focus of sanctions becomes more targeted to affect only those non-compliant individuals while sparing the general population.[127] A traditional criticism of U.S. sanctions is that the offensive individuals or entities remain insulated from the effects of sanctions while the general population suffers. Targeted sanctions, the most common being freezing assets, are thought to more effectively coerce specific entities or individuals. The Global Magnitsky Act, if passed, would preemptively authorize the President to use targeted sanctions against individuals and entities based on "credible evidence" that they violated human rights in the most serious of ways.
In addition to the Executive Order issued pertaining to Russia discussed above, President Obama, in 2015, also issued sanctions-related Executive Orders pertaining to the Democratic People’s Republic of Korea (North Korea), Venezuela, Liberia, Burundi, and malicious cyber-enabled activities abroad. The measures tightened restrictions against parties engaged in destructive cyber-related activities outside the United States, and specifically parties engaged in such activities in North Korea during November and December 2014, as well as tightened restrictions against parties contributing to violence and instability in Venezuela and Burundi. However, the measures eased restrictions in Liberia due to improvements in the circumstances under which sanctions were initially imposed.
1. Executive Order 13,687, "Imposing Additional Sanctions With Respect to North Korea," 80 Fed. Reg. 819 (Jan. 6, 2015)
On January 2, 2015, President Obama signed Executive Order 13,687, "Imposing Additional Sanctions With Respect to North Korea," expanding the scope of the national emergency declared in Executive Order 13,466 of June 26, 2008 to deal with the "continuing threat to the national security, foreign policy, and economy of the United States" resulting from North Korea’s "destructive, coercive cyber-related actions during November and December 2014." Specifically, it blocked property of any person determined by the Secretary of the Treasury to be an agent or official of the North Korean government or the Workers’ Party of Korea, or to have materially assisted the North Korean government. The E.O. also prohibited donations to blocked persons, including food, clothing and medicine, placed a travel ban on blocked persons, and prohibited transactions or conspiracies that attempt to violate the E.O.
2. Executive Order 13,692, "Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Venezuela," 80 Fed. Reg. 12,747 (Mar. 11, 2015)
Signed by President Obama on March 8, 2015, Executive Order 13,692, "Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Venezuela," declared a national emergency based on the "Government of Venezuela’s erosion of human rights guarantees, persecution of political opponents, curtailment of press freedoms, use of violence and human rights violations and abuses in response to antigovernment protests, and arbitrary arrest and detention of antigovernment protests, as well as the exacerbating presence of significant public corruption." The E.O. blocked the property of persons specified in an Annex to the E.O., as well as any person responsible for, or complicit in, any of the following with respect to Venezuela: actions or policies that undermine the democratic processes; acts of violence; actions that limit the exercise of freedom of expression or peaceful assembly; and public corruption. It also blocked the property of current and former leaders of an entity that has engaged in any of the aforementioned activities, current and former Venezuelan government officials, and persons who have materially assisted blocked persons. Finally, the E.O. prohibited donations to blocked persons, including food, clothing and medicine, placed a travel ban on blocked persons, and prohibited transactions or conspiracies that attempt to violate the E.O.
3. Executive Order 13694, "Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities," 80 Fed. Reg. 18,077 (Apr. 2, 2015); Publication of Frequently Asked Question on malicious cyber-enabled activities-related Executive Order (Question 444)
Signed by President Obama on April 1, 2015, Executive Order 13,694, "Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities,"[128] declared a national emergency to deal with "the increasing prevalence and severity of malicious cyber-enabled activities originating from, or directed by persons located, in whole or in substantial part, outside the United States." The E.O. blocked the property of any person determined by the Secretary of the Treasury to be responsible for, or complicit in, malicious cyber-enabled activities originating from outside the United States that result in specified harms. The E.O. also prohibited donations to blocked persons, including food, clothing, and medicine, placed a travel ban on blocked persons, and prohibited transactions or conspiracies that attempt to violate the E.O. OFAC Guidance published on May 1, 2015 emphasized that the E.O. "focuses on specific harms caused by significant malicious cyber-enabled activities," and clarified that the Secretary of the Treasury will determine who to sanction under this order by working with the Attorney General and the Secretary of State to identify persons he determines to be responsible for, or complicit in, cyber-enabled activities resulting in the harms specified in the E.O.[129] The Guidance also stated that the E.O. is "intended to address situations where, for jurisdictional or other issues, certain significant malicious cyber actors may be beyond the reach of other authorities available to the U.S. government."[130]
4. Executive Order 13710, "Termination of Emergency With Respect to the Actions and Policies of Former Liberian President Charles Taylor," 80 Fed. Reg. 71,679 (Nov. 16, 2015)
On November 12, 2015, President Obama signed Executive Order 13,710, "Termination of Emergency With Respect to the Actions and Policies of Former Liberian President Charles Taylor." The E.O. found that "the situation that gave rise to the declaration of a national emergency in Executive Order 13,348 of July 22, 2004"–namely, the unlawful depletion and removal of Liberian resources and secreting of Liberian funds and property by former Liberian president Charles Taylor–"has been significantly altered by Liberian’s significant advances to promote democracy and the orderly development of its political, administrative, and economic institutions." These advances include freely-held presidential elections in 2005 and 2011, the conviction of, and 50-year prison sentence for, Charles Taylor, the affirmation on appeal of that conviction and sentence, and the "diminished ability of those connected to former Liberian President Charles Taylor to undermine Liberia’s progress." The E.O. therefore terminated the national emergency declared in Executive Order 13,348 and revoked that order.
5. Executive Order 13712, "Blocking Property of Certain Persons Contributing to the Situation in Burundi," 80 Fed. Reg. 73,633 (Nov. 22, 2015)
On November 22, 2015, President Obama signed Executive Order 13,712, "Blocking Property of Certain Persons Contributing to the Situation in Burundi," which declared a national emergency based on "the killing of and violence against civilians, unrest, the incitement of imminent violence, and significant political repression" in Burundi. The E.O. blocked the property of persons specified in an Annex to the E.O., as well as any person responsible for, or complicit in, any of the following with respect to Burundi: actions or policies that threaten peace, security or stability; actions or policies that undermine democratic processes; human rights abuses; acts of violence targeted towards women, children or any civilians; attacks on schools, hospitals or other locations where civilians are seeking refuge; actions that limit the exercise of freedom of expression or peaceful assembly; the use or recruitment of children by armed groups; the obstruction of access to humanitarian assistance; and attacks against United Nations missions or other peacekeeping operations. It also blocked the property of leaders of an entity that has engaged in any of the aforementioned activities and persons who have materially assisted blocked persons. Lastly, the E.O. prohibited donations to blocked persons, including food, clothing and medicine, placed a travel ban on blocked persons, and prohibited transactions or conspiracies that attempt to violate the E.O.
1. 1/15/15 Final Rule amending the Cuban Assets Control Regulations to implement policy changes announced by the President on December 17, 2014 to engage and empower the Cuban people
On January 15, 2015, OFAC amended the Cuban Assets Control Regulations to implement policy changes announced by the President on December 17, 2014.[131] The amendments facilitate travel and travel services to Cuba for authorized purposes, facilitate and increase limits on remittances to Cuba, allow U.S. financial institutions to open correspondent accounts at Cuban financial institutions to facilitate the processing of authorized transactions, authorize certain transactions with Cuban nationals located outside of Cuba, and allow a number of other activities related to, among other areas, telecommunications, financial services, trade and shipping.
On June 15, 2015, OFAC amended the Terrorism List Governments Sanctions Regulations, replacing the list of countries designated as supporting international terrorism with information on the availability of state sponsors of terrorism determination and rescission decisions in the Federal Register and the availability of a current list of state sponsors of terrorism maintained on the Department of State’s Web site.[132] The Cuban Assets Control Regulations, 31 CFR part 515, was amended by removing the reference to 18 U.S.C. 2332d.
On September 21, 2015, OFAC amended the Cuban Assets Control Regulations to further implement policy changes announced by the President on December 17, 2014.[133] These amendments, expanding the scope of the January amendment, "further facilitate travel to Cuba for authorized purposes (including authorizing by general license the provision of carrier services by vessel), expand the telecommunications and Internet-based services general licenses, authorize certain persons subject to U.S. jurisdiction to establish a physical presence in Cuba, allow certain additional persons subject to U.S. jurisdiction to open and maintain bank accounts in Cuba to use for authorized purposes, allow certain additional financial transactions (including removing the limit on donative remittances to Cuba and unblocking certain previously blocked remittances and funds transfers), authorize all persons subject to U.S. jurisdiction to provide goods and services to Cuban national individuals located outside of Cuba, and allow a number of other activities related to, among other areas, legal services, imports of gifts sent to the United States, and educational activities."
2. 02/18/2015 Final Rule amending the Sudanese Sanctions Regulations (the "SSR") by adding a general license pertaining to certain software, hardware and services incident to personal communications
On February 28, 2015, OFAC amended the Sudanese Sanctions Regulations by adding a general license pertaining to certain software, hardware and services incident to personal communications.[134] The regulations are codified at 31 C.F.R. Part 538.
3. 04/13/2015 Final Rule amending the Syrian Sanctions Regulations to authorize by general license certain activities relating to publishing
On April 13, 2015, OFAC amended the Syrian Sanctions Regulations to authorize by general license "certain activities relating to publishing, not already exempt from regulation, that support the publishing and marketing of manuscripts, books, journals, and newspapers in paper and electronic format."[135] The regulations are codified at 31 C.F.R. Part 542.
4. 07/10/2015 Final Rule implementing the Venezuela Defense of Human Rights and Civil Society Act of 2014 (Pub. L. 113–278) and Executive Order 13692 of March 8, 2015 (”Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Venezuela”)
On July 10, 2015, OFAC issued regulations implementing the Venezuela Defense of Human Rights and Civil Society Act of 2014 (Pub. L. 113–278) and Executive Order 13692 of March 8, 2015 (”Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Venezuela”).[136] The regulations, codified at 31 C.F.R. Part 591, will be supplemented with more comprehensive regulations, guidance, licenses and policy.
1. 01/30/2015 Dept. of Treasury published three Ukraine-related general licenses concerning financial transfers for noncommercial reasons and receipt/transmission of telecommunications involving the Crimea region
January 30, 2015 Publication of Ukraine-related General License 6
General License No. 6[137] authorized U.S. persons to send and receive funds to or from the Crimea region of Ukraine ("Crimea"), or for or on behalf of an individual ordinarily resident in the Crimea, where the transfer involves a noncommercial, personal remittance; provided, however, that the transfer is not by, to, or through any specialty designated persons ("SDNs").[138] Moreover, a U.S. person is authorized to carry funds as a noncommercial, personal remittance to an individual in Crimea or ordinarily resident in Crimea.[139]
U.S.-registered money transmitters are permitted to process such requests.[140] Noncommercial, personal remittances do not include charitable donations of funds for the benefit of an entity or for use in supporting or operating a business, including a family-owned business.[141]
January 30, 2015 Publication of Ukraine-related General License 7
General License No. 7[142] allowed an individual ordinarily resident in the Crimea, other than an SDN, to operate a U.S. account, provided that the transactions: (1) are of personal nature and not for use in supporting or operating a business; (2) do not involve transfers directly or indirectly to Crimea or for the benefit of individuals ordinarily resident in Crimea (unless authorized by General License No 6); and (3) the account is not used for an SDN.[143]
January 30, 2015 Publication of Ukraine-related General License 8
General License No. 8[144] provided a license for all transactions with respect to the receipt and transmission of telecommunications involving Crimea, provided that no payment pursuant to this general license may involve an SDN.[145] Nevertheless, General License No. 8 does not authorize (1) the provision, sale or lease of telecommunications equipment or technology; or (2) the provision, sale or lease of capacity on telecommunications transmissions facilities (i.e., satellite or terrestrial network activity).[146]
In addition, General License No. 8 authorized all transactions of common carriers incident to the receipt or transmission of mail and packages between the U.S. and Crimea, provided that such importation or exportation is not prohibited under the Ukraine Related Sanctions Regulations (15 C.F.R. Part 589).[147]
2. 02/18/2015 Issuance of an amended general license relating to the exportation, re-exportation and provision to Sudan of certain hardware, software and services incident to personal communications
On February 18, 2015, OFAC announced[148] its adoption of a final rule that amended the Sudanese Sanctions Regulations ("SSR") by adding a general license pertaining to certain software, hardware and services incidental to personal communications.[149]
On March 10, 2010, OFAC issued a general license that authorized the exportation from the United States or by U.S. persons to persons in Sudan and Iran of certain services and software incident to the exchange of personal communications over the Internet.[150] To qualify for such license, the software and licenses had to be publically available at no cost to the user. Additionally, such software qualified for the authorization only if it was (1) designed as EAR99 under the EAR (15 C.F.R. Parts 730 through 774); (2) not subject to the EAR; or (3) classified by the Department of Commerce as mass market software under export control classification ("ECCN") 5D992 of the EAR. Finally, these sections of the SSR did not allow direct or indirect exportation of services of software with knowledge or reason to know that such services or software were intended for the Government of Sudan or the Government of Iran.
On May 30, 2013, to help facilitate the free flow of information to Iran, OFAC, along with the Departments of State and Commerce, issued Iran General License D-1, which significantly expanded upon the existing authorizations and added new authorizations related to the exportation of certain software, hardware and services incident to personal communications.[151]
OFAC, along with the Departments of State and Commerce, desire to help facilitate the free flow of information in Sudan by similarly expanding the scope of SSR to advance the free flow of information and to facilitate communications by the Sudanese people. In particular, OFAC adopted this general license to amend the SSR in multiple ways:
Nevertheless, the general license does not authorize the following: (1) transactions with SDNs; (2) transactions with the Government of Sudan (except as mentioned above); and (3) transactions involving the items subject to the EAR where export or re-export will be to prohibited end-users in the EAR.
3. 04/13/2015 Publication of Syria General License concerning certain activities relating to publishing
Effective as of April 13, 2015, OFAC amended the Syrian Sanction Regulations to authorize by general license certain activities relating to publishing and marketing of manuscripts, books, journals and newspapers in paper or electronic format.[158] This license does not apply if the parties to the transaction include the Government of Syria or any other SDN. Specifically, U.S. persons are authorized to: (1) commission written publications, to the extent consistent with industry practice; (2) collaborate on the creation and enhancement of written publications; (3) contribute items such as photographs, artwork and translations in a written publications and certain types of software necessary for reading or browsing a publication in an electronic format; (4) edit written work; (5) pay royalties for written publications; (6) create or undertake a marketing campaign to promote written publications; and (7) enter into other transactions necessary and incident to the publishing and marketing of written publications.[159]
This general license contains certain exceptions, such as undertaking or marketing a campaign with respect to any service or product other than a written publication, or something for the benefit of the Government of Syria, or operating a publishing house, sales outlet or other office in Syria.[160]
4. 05/22/2015 Publication of Ukraine-related General License No. 9 for exportation of certain services and software
General License No. 9[161] allowed for the exportation of certain services and software incident to internet-based communications. In particular, the license authorized exportation or re-exportation, directly or indirectly, from the United States or by U.S. Persons, wherever located, to persons located in Crimea of (1) services incident to the exchange of personal communications over the Internet;[162] (2) software necessary to enable the services described in (1), provided that such software is designated EAR 99 under the Export Administration Regulations (the "EAR") or is classified by the Department of Commerce as mass market software under export control classification number 5D992 of the EAR;[163] and/or (3) software that is not subject to EAR because it is of foreign origin and located outside the United States that is necessary to enable the services described in (1), provided that such software would be designated EAR99 of the EAR if it were subject to the EAR; and, provided further for all clauses above, such services or software, as applicable, is widely available to the public at no cost to the user.[164]
The license does not authorize the exportation or re-exportation of services of software (a) listed on the Commercial Control List in the EAR (except for software necessary to enable clause (1) of the above paragraph that is classified by the Department of Commerce as a mass market software under ECCN 5D992 of the EAR); (b) intended for any SDN; (c) of commercial-grade internet connectivity services or telecommunications transmission facilities; or (d) of web-hosting services for commercial endeavors or of domain name registration services.[165] Moreover, it does not relieve the exporter from compliance with the export license application requirements of another Federal agency.
5. 10/29/2015 Issuance of Belarus-related General License involving certain entities blocked pursuant to Executive Order 13405
OFAC authorized a general license involving certain Belarusian entities originally blocked by Executive Order 13405.[166] This general license is only effective from October 30, 2015 through April 30, 2016.[167] The license applies to all of the below named Belarusian entities and any entities owned, directly or indirectly, 50% or more by one or more of the following entities:
1. Belneftekhim
2. Belneftekhim USA, Inc.
3. Lakokraska OAO
4. Polotsk Steklovolokno OAO
5. Belarusian Oil Trade House
6. Belshina OAO
7. Grodno Azot OAO
8. Grodno Khimvolokno OAO
9. Naftan OAO
All property and interest in property of the entities described above that were blocked pursuant to Executive Order 13405 prior to October 30, 2015 remain blocked and may not be transferred, paid, exported, withdrawn or otherwise dealt with.[168] Moreover, any U.S. persons engaged in a transaction, or series of transactions, with the entities named above in excess of $10,000 must file a report to the U.S. Department of State, Office of Eastern European Affairs and include the following information: (1) estimated or actual dollar value of the transaction(s); (2) the parties involved; (3) the type and scope of activities conducted; and (4) the dates or duration of the activities.[169]
6. 11/2/2015 Issues update to Iranian Sanctions Regulation adding additional medical supplies
Effective November 2, 2015, OFAC updated the list of medical supplies eligible for exportation or re-exportation to Iran under the general license set forth at section 31 C.F.R. 560.530(a)(3)(1) of the Iranian Transactions and Sanctions Regulations.[170]
7. 12/7/2015 Issuance of General License regarding certain exports to or from Burma
OFAC issued a six-month general license to authorize certain trade-related transactions otherwise prohibited by the Burmese Sanctions Regulations that are incidental to permissible exports to or from Burma that involved goods, technology or non-financial services (provided the export is not to, from or on behalf of a person whose property is blocked).[171] In addition, U.S. financial institutions are authorized to engage in transactions necessary to unblock and return funds blocked after April 1, 2015 that would have qualified as authorized had they engaged under this general license.[172] The general license expires on June 7, 2016.[173]
1. 1/15/2015 Basic Information on OFAC and Sanctions
On January 15, 2015, OFAC issued additional Frequently Asked Questions on Basic Information on OFAC and Sanctions. OFAC administers a number of U.S. economic sanctions and embargoes that target regions and governments. While some programs are comprehensive and block the government and include broad travel restrictions, others target specific individuals and entities. Specific individuals and entities can be found on OFAC’s list of Specially Designated Nationals and Blocked Person ("SDN list").[174] The list includes over 6,000 companies and individuals connected with targeted sanctions. U.S. citizens and permanent residents, regardless of location, U.S. incorporated entities and their foreign branches, and all persons and entities located within the U.S. are prohibited from dealing with SDNs wherever they are located, and all SDN assets are blocked.[175] Furthermore, some OFAC sanctions, such as those pertaining to Iran and Sudan, apply to persons acting on behalf of those targeted governments even if those persons do not appear on the SDN list.[176] OFAC’s lists are constantly being updated and it is important to regularly check OFAC’s website for the most current lists. If you are a subscriber to OFAC’s email notification services, ensure that your spam filter allows the domains "subscriptions.treas.gov" and "treas.gov."[177]
2. 1/30/2015 FAQs on OFAC Information on a Credit Report
On January 30, 2015, OFAC published FAQs on OFAC Information on a Credit Report, describing new measures that credit bureaus and agencies have adopted to ensure compliance with OFAC regulations. Before issuing a credit report, the bureaus and agencies use screening software to determine if a credit applicant is on OFAC’s SDN list or another OFAC sanctions list. If there is a potential match, the bureaus may place a "red flag" or an alert on the credit report. This serves as a reminder to the person conducting the credit check to verify whether the applicant is indeed on one of OFAC’s lists. If the applicant is not a match, then the person running the credit check should disregard the OFAC alert. If the applicant is a match, then the person running the credit check should call the OFAC Hotline.[178] Under the Fair Credit Reporting Act, 15 U.S.C. 1681, et. seq., a person may request to remove an OFAC alert from his or her credit report by contacting the credit reporting agency or bureau that issued the report.[179]
3. 1/30/2015 FAQs on Assessing OFAC Name Matches
On January 30, 2015, OFAC published step-by-step guidance on assessing OFAC name matches. Concerning wire transfers or other "live" transactions, step 1 is to see whether the "hit" is against OFAC’s SDN list, one of its other sanctions lists, or targeted countries, or if it is hitting for some other reason (i.e. "PEP," "CIA," etc.). If the hit is from an OFAC list, step two is to evaluate the quality of the hit. Compare the name in your transaction with the name on the sanctions lists. If it is a valid match, step three is to see how much of the listed entry’s name is a match against the name in your transaction (i.e., only the last name versus the whole name). Step four is to compare the complete sanctions list entry with all of the information you have on the matching name in your transaction. The entry will often have a full name, address, nationality, passport, tax ID or cedula number, place of birth, date of birth, former names and aliases. If you are missing some of this information, obtain complete information and then compare again. If you possess the information, see if there are a number of similarities. If there are, call the OFAC hotline at 1-800-540-6322. If there are not a number of similarities, you do not have a valid match.
If you are calling about an account, step one also consists of seeing if the hit is against one of OFAC’s list. Step two consists of comparing the name of the customer against the name on the sanctions list. Step three consists of identifying how much of the listed entry’s name matches against the name of the account holder. Step four is to compare the complete entry with the information you have on the account holder. If there are a number of similarities, you should call the OFAC hotline. If you have reason to know or believe that processing the transfer or operating the account would violate any of OFAC’s regulations, you must call the hotline and explain this knowledge or belief.[180]
4. 1/30/2015 FAQs on Starting an OFAC Compliance Program
On January 30, 2015, OFAC published additional guidance on starting an OFAC compliance program. What constitutes an adequate compliance program depends in large part on who your customers are and what kinds of business you do. Certain areas of bank operations, like wire transfers and trade finance, are higher risk than others. Before investing in software to comply with OFAC regulations, OFAC recommends that you talk to your counterparts in other banks to learn about the systems they have in place.[181]
The frequency of running an OFAC scan should be guided by your company’s internal policies and procedures. If your organization fails to identify and block a target account, consequences could include a transfer of funds or other valuable property to an SDN, an enforcement action against your organization, and negative publicity.[182]
Banks looking to start an OFAC compliance program should first consult with OFAC’s website and look under "Regulations by Industry." A good next step is to read the brochure for the Financial Community.[183]
5. 1/30/2015 FAQs on Blocking and Restricting Transactions
Not all OFAC programs involve blocking transactions, but rather are tailored to further the purposes of the specific Executive Orders or statutes that constitute the program. OFAC’s website outlines the specific restrictions for each individual program.[184] If your institution does block a customer’s funds, you may notify said customer. The customer then has the right to apply for the unblocking and release of the funds.[185]
Oftentimes, there is no blockable interest in a prohibited transaction. Where that is the case, the transaction is simply rejected. Rejected or blocked funds transfers must be reported to OFAC within 10 days.[186]
If your institution utilizes interdiction software or an account holder checking service and a potential match is found, human intervention is key. You should conduct an initial analysis before contacting OFAC. Software may flag some transactions that are not actually associated with OFAC targets. However, if you have a reasonably close match to a name on the SDN list and your customer is located in same vicinity as the SDN, contacting OFAC is advisable.[187]
When dealing with customers seeking to send wire transfers to a sanctioned party or country, a "payment instruction" occurs upon the receipt of concrete instructions from its customer to send the funds. At that point, the funds must be blocked and reported to OFAC within 10 days. By contrast, if a customer simply asks "Can I send money to Iran?," there is no blockable interest and the bank may either answer the question or direct the customer to OFAC.[188]
6. 1/15/2015 FAQ on Compliance for Internet and Web Based Activities
You may not use a third-country company’s website to do something indirectly that you cannot do directly. While third-country sites may be used to facilitate authorized transaction, you cannot use them to perform a transaction which would be in violation of U.S. law.[189]
7. 1/15/2015, 1/30/2015 FAQs on Compliance for the Insurance Industry
In January 2015, OFAC published additional guidelines for the insurance industry. If an insurer knows that a person covered under a worker’s compensation policy is an SDN, that person’s coverage is blocked. If he or she tries to make a claim, it cannot be paid. If an insurer does not know the names of those covered under a group policy, it would have no reason to know it needed to block anything unless and until an SDN files a claim under that policy. At that point its blocking requirement would kick in.[190]
How often insurers "scrub" their databases for OFAC compliance is up to the individual insurance firm and its regulator. However, assets belonging to individuals on the SDN list must be frozen immediately, and infrequent "scrubbing" may result in a violation.[191] Regarding life insurance policies, conducting screening only before policy issuance would likely not achieve the desired level of compliance. If a policyholder or a named beneficiary is added to the SDN list or otherwise becomes subject to U.S. sanctions, the insurer may be required to block the policy and report such blocking to OFAC within 10 days. Routinely screening all policies against OFAC’s sanctions lists, as frequently updated, would enable the insurer to comply with the applicable OFAC regulatory requirements. It also is important to screen the policyholder and beneficiary prior to paying a claim.[192]
8. 1/15/2015 FAQs on Additional Questions from Financial Institutions
A wire transfer in which an entity has an interest is blocked property if the entity is 50% or more owned by a person whose property and interests in property are blocked. This rule applies even in instances where such a transaction is passing through a U.S. bank that (1) is operating solely as an intermediary, (2) does not have any direct relationship with the entity (e.g., the entity is a non-account party), and (3) does not know or have reason to know the entity’s ownership or other information demonstrating the blocked status of the entity’s property. Where all three conditions are met, OFAC would not expect the bank to research the non-account parties listed in the wire transfer that do not appear on the SDN List and, accordingly, would not pursue an enforcement action against the bank that processed such a transaction.[193]
However if the intermediary bank has information in its possession leading the bank to know, or have reason to know, that a particular individual or entity involved with, or referenced in, the wire transfer is subject to blocking, then the bank will be held responsible if it does not take appropriate steps to ensure that the wire transfer is blocked.[194]
9. 1/30/2015 FAQs on Specially Designated Nationals (SDNs) and the SDN List
The best way to access the SDN list is from OFAC’s website. The SDN list consists of individuals and entities located throughout the world that are blocked pursuant to the various sanctions programs administered by OFAC. U.S. persons are prohibited from engaging in any transactions with SDNs and must block any property in their possession or under their control in which an SDN has an interest.[195]
By contrast, The Bureau of Industry and Security ("BIS") of the U.S. Department of Commerce maintains separate lists for the purposes of its programs. The Denied Persons List consists of individuals and companies that have been denied export and reexport privileges by BIS, while the Entity List consists of foreign end users who pose an unacceptable risk of diverting U.S. exports, and the technology they contain, to alternate destinations for the development of weapons of mass destruction.[196]
10. 2/20/2015 FAQs on Information on List File Formats and Downloads
The SDN list is not the only list that OFAC maintains. OFAC’s non-SDN lists consist of individuals and entities on which sanctions stop short of blocking treatments. These lists can be found on OFAC’s website under Other OFAC Sanctions Lists. Some companies, in order maintain the most up-to-date OFAC lists without human intervention, schedule downloads of the SDN and other sanctions lists. Without giving specific advice, OFAC notes that it is updating its lists at an ever-increasing pace, and institutions should periodically re-evaluate their download schedules for effective risk mitigation.[197]
11. 1/30/2013 FAQs on Weak Aliases
On January 30, 2015, OFAC published additional guidance on weak aliases. In TXT and PDF versions of the SDN or other sanctions lists, weak aliases, or AKAs, are encapsulated in double quotes (i.e., ALLANE, Hacene (a.k.a. ABDELHAY, al-Sheikh; a.k.a. AHCENE, Cheib; a.k.a. "ABU AL-FOUTOUH"). In the DEL, FF, PIP and CSV file formats, weak AKAs are listed in the Remarks field (found at the end of the record) of the primary name file. In these formats, weak AKAs are bracketed by quotation marks.[198]
12. 1/05/2015 FAQs on Advanced Sanctions List Standard
In 2015, OFAC published guidance on the new XML products it is offering to conform to an advanced, UN-developed data standard with an international user-base in mind. The new models support multiple languages and multiple character sets and will be most useful to enterprises that have international operations. The new XML files will not replace the existing SDN.xml or consolidated.xml files. All of the XML files, along with the new products, contain the same basic information. However, the new products contain additional meta data that may further aid compliance and screening programs.[199]
13. 4/1/2015 FAQs on Cyber-related Sanctions: Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities (Executive Order 13694)
On April 1, 2015, OFAC published FAQs regarding cyber-related sanctions and Executive Order 13694. E.O. 13694 focuses on specific harms caused by significant malicious cyber-enabled activities, and directs the Secretary of the Treasury, in consultation with the Attorney General and the Secretary of State, to impose sanctions on persons determined to be responsible or complicit in such harms. E.O. 13694 is intended to address areas where malicious cyber actors may be beyond the reach of other authorities of the U.S. government.[200]
Because E.O. 13694 was issued without an initial set of designations, there are no specific steps that U.S. persons need to take right now to come into compliance.[201] Once the Treasury designates individuals or entities pursuant to E.O. 13694, all persons subject to OFAC jurisdiction must ensure they are not engaging in trade or other transactions with persons or entities on the SDN list. Companies that facilitate online commerce, including technology companies, should develop a tailored, risk-based compliance program with sanctions list screenings or other appropriate measures.[202]
OFAC anticipates that coming regulations will define "cyber-enabled" activities to include any act that is primarily accomplished through, or facilitated by, computers or other electronic devices. For purposes of E.O. 13694, malicious cyber-enabled activities include deliberate activities accomplished through unauthorized access to a computer system, including by remote access; circumventing one or more protection measures, including by bypassing a firewall; or compromising the security of hardware or software in the supply chain. E.O. 13694 was drafted to address cyber-enabled activities that are reasonably likely to result in, or have materially contributed to, a significant threat to the national security, foreign policy, or economic health or financial stability of the United States. [203] E.O. 13694 is in no way designed to interfere with or prevent legitimate cyber-enabled academic, business, or non-profit activities.[204] Furthermore, the measures of E.O. 13694 are not intended to target victims of cyber-attacks, such as in a scenario where an individual’s personal computer is used, without his or her consent, in a malicious cyber-enabled activity.[205]
14. 2/17/2015 FAQs on Sudan and South Sudan-related Sanctions
Effective February 18, 2015, the Department of the Treasury’s Office of Foreign Assets Control (OFAC), in consultation with the Departments of State and Commerce, amended the Sudanese Sanctions Regulations, 31 C.F.R. part 538, to issue an amended general license pertaining to certain software, hardware and services incident to personal communications. The key changes to the Regulations include: 1) authorizing the exportation of certain fee-based software and services incident to the exchange of personal communications;[206] 2) expanding the authorization in § 538.533 to permit the exportation, reexportation or provision, directly or indirectly, to Sudan of certain additional personal communications software, hardware and related services subject to the EAR;[207] 3) adding new authorizations for the exportation, reexportation or provision, directly or indirectly, by a U.S. person located outside the United States to Sudan of certain software and hardware not subject to the EAR;[208] 4) clarifying that the authorization in 31 C.F.R. § 538.533(a)(2) and (a)(3) includes the exportation, reexportation, or provision, directly or indirectly, of the authorized items by an individual leaving the United States for Sudan; and 5) adding a new authorization that covers the exportation, reexportation or provision to the Government of Sudan of certain no-cost services and software that are widely available to the public.[209][210]
For further clarity on what items or services are covered by the amendments, contact OFAC’s Licensing Division online at http://www.treasury.gov/resource-center/sanctions/Pages/licensing.aspx, by phone at 202-622-2480, or by email at [email protected]. Furthermore, the Department of Commerce, Bureau of Industry and Security (BIS), has jurisdiction over non-U.S. persons’ exportation and reexportation to Sudan of items subject to the EAR. Please consult BIS, www.bis.doc.gov, for guidance on such transactions.
Regarding NGOs, under 31 CFR §538.521, registration numbers may be issued on a case-by-case basis to nongovernmental organizations involved in humanitarian or religious activities in Sudan, authorizing transactions by such organizations that would otherwise be prohibited under the Sudanese Sanctions Regulations, including the exportation of services, goods, software or technology to Sudan and the transfer of funds to and from Sudan for the purpose of relieving human suffering.[211]
15. 3/16/2015 Questions Regarding Licenses Authorizing Exports of Agricultural Commodities, Medicine and Medical Devices to Iran and Sudan Pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA)
On March 16, 2015, OFAC issued additional FAQs regarding formatting options for submitting TSRA license applications and submitting multiple applications at once. OFAC permits two format options for submitting TSRA license applications: online or hard-copy. If submitting via mail, include a cover letter with essential information, including the purpose of the application and the applicant’s full contact information. If the cover letter or pertinent information is missing, the application risks delay or rejection.[212] OFAC requires applicants to submit each individual application separately. If submitting a hard copy, each application should be in a separate envelope, with a single cover letter.[213]
16. Frequently Asked Questions on Syria Sanctions
In an effort to reinforce President Obama’s call that Bashar al-Assad step down, the U.S. has sanctioned the Syrian government, including the Central Bank of Syria, senior Syrian government officials, and individuals and entities supporting the Assad regime and/or responsible for human rights abuses in Syria. Under Executive Order 13382, the U.S. has also sanctioned the Commercial Bank of Syria and a number of other entities in order to target proliferators of weapons of mass destruction.[214]
However, OFAC has also issued several general licenses that allow U.S. persons to send non-commercial, personal remittances to Syrians without needing to apply for a separate or specific license.[215] However, such personal remittances may not go through the Commercial Bank of Syria, the Syrian-Lebanese Commercial Bank, or the Syria International Islamic Bank (SIIB).[216] U.S. persons may donate humanitarian goods, like food and medicine, consistent with OFAC regulations. NGOs may also engage in not-for-profit activities in Syria in aid of humanitarian projects.[217] While U.S. persons may give money to U.S. or third-country NGOs, U.S. persons cannot send donations directly to Syria or a Syrian entity without a specific license.[218]
17. 10/21/2015 False Hit List Guidance
On October 21, 2015, OFAC issued guidance on false hit lists. OFAC described that, in the course of developing or maintaining a sanctions screening program, U.S. persons sometimes develop a "false hit list" comprised of individuals and entities who characteristics trigger a screening match to one or more entries on the SDN List or other sanctions criteria, but who are not, in fact, sanctions targets. If an entity or individual is added to a false hit list, future alerts associated with the individual or entity may be suppressed. OFAC cautioned that it is important that U.S. persons and institutions implement policies to periodically reassess the parties that are included on such lists.[219] Best practices include: 1) involving sanctions compliance personnel in developing guidelines for, and oversight of, the functioning of the false hit lists, with periodic reviews; 2) ensuring that the false hit list does not suppress legitimate SDN or other hits that are similar to entries on the false hit list; 3) amending the false hit list as needed in response to updates in OFAC’s sanctions programs; and 4) ensuring that entries on the false hit list are continuously updated with any changes of information, such as address, place of business, etc.[220]
18. 11/19/15 Fact Sheet: Additional Treasury Actions to Rein in Corporate Tax Inversions
A corporate tax inversion is when a U.S.-based multinational company restructures so that its parent company becomes a foreign parent in order to avoid U.S. taxes. Under current laws, inversions which appear to be primarily for the purpose of avoiding taxes can be subject to adverse tax consequences. These consequences can occur if, after the inversion: (1) less than 25% of the new multinational entity’s business activity is in the home country of the new foreign parent, and (2) the shareholders of the former U.S. parent end up owning at least 60% of the shares of the new foreign parent.[221] If the continuing ownership stake is at least 60%, but less than 80%, U.S. tax law recognizes the foreign status of the new foreign parent, but other potentially adverse tax consequences may follow.
On November 19, 2015, the Treasury Department took action to make it more difficult for U.S. companies to invert. Treasury’s notice makes it more difficult for U.S. companies to invert by strengthening the requirement that the former owners of a U.S. company own less than 80% of the new combined entity.[222] Under the newly issued notice, in certain cases when the foreign parent is a tax resident of a third country, stock of the foreign parent issued to the shareholders of the existing foreign corporation is disregarded for purposes of the ownership requirement, thereby raising the ownership attributable to the shareholders of the U.S. entity, possibly above the 80% threshold.[223] The notice also clarifies that anti-stuffing rules apply to any assets acquired with a principal purpose of avoiding the 80% rule. Additionally, previously, a U.S. company could successfully invert if, after the inversion, at least 25% of the combined group’s business activity was in the foreign country in which the new foreign parent was created or organized.[224] However, Treasury’s new notice provides that the combined group cannot satisfy the 25% business activities exception unless the new foreign parent is a tax resident in the foreign country in which it is created or organized.[225]
1. 2/26/15: Counterterrorism
On February 26, 2015, OFAC added three individuals and three entities to its SDN list,[226] targeting an African-based "support network" for Hizballah.[227] Included in the designations were an amusement park and a supermarket located in Nigeria, as well as a Hizballah donor and two members of a Hizballah terrorist cell in Nigeria.[228]
2. 3/9/15: Venezuela
On March 9, 2015, OFAC designated a series of individuals pursuant to Executive Order 13692,[229] as part of the Treasury Department’s effort to address corruption in the Venezuelan government.[230]
3. 5/22/15: Kingpin Act
On May 22, 2015, OFAC identified six new individuals and three new entities as Foreign Narcotics Kingpin Act designations.[231] These designations targeted the Colombian-based drug trafficking organization of José Berley Guarín Loaiza, which was known to use "go-fast boats" to transport cocaine from Colombia and Venezuela.[232]
4. 8/19/15: Kingpin Act
On August 19, 2015, OFAC added six individuals and fifteen entities to its SDN list pursuant to the Foreign Narcotics Kingpin Designation Act,[233] targeting the Mexico-based Los Cuinis drug trafficking organization.[234] The designations included a hotel in Tomatlan, Jalisco, two real estate firms, and two shopping centers.[235]
5. 8/21/15: Central African Republic
On August 21, 2015, OFAC identified five new additions to its SDN list,[236] targeting militia leaders in the Central African Republic for threatening the "peace, security, or stability" of that country.[237] Two of the additions included diamond companies based in the Central African Republic and Belgium that were involved in the export of diamonds from mines under the control of an armed group.[238]
6. 9/29/15: Counter Terrorism
On September 29, 2015, OFAC added a number of individuals to its SDN list,[239] designating a series of facilitators of the Islamic State of Iraq and the Levant ("ISIL").[240] The announcement was made on the same day as an international summit on countering ISIL, and the designations included individuals from countries in the Middle East, North Africa, Europe and Indonesia.[241]
7. 10/1/15: Kingpin Act
On October 1, 2015, OFAC sanctioned a group of individuals, entities and vessels[242] pursuant to the Foreign Narcotics Kingpin Designation Act.[243] OFAC targeted the money-laundering and drug trafficking organization of Lebanese-Colombian Ayman Saied Joumaa, which also has links to Hizballah, in addition to the companies owned by Merhi Ali Abou Merhi, which have links to the Joumaa group.[244]
8. 11/25/15: Syria
On November 25, 2015, OFAC added four individuals and six entities to its SDN list for supporting the Assad regime in Syria, including a Syrian businessman who acted as a "middleman for oil purchases by the Syrian regime from ISIL." Also included were a Russian bank and Russian businessman, politician, and World Chess Federation President Kirsan Ilyumzhinov.
On December 8, 2015, OFAC identified a number of North Korean individuals and entities as Specially Designated Nationals.[245] These designations were "designed to counter attempts to circumvent U.S. and UN sanctions, prevent the North Korean Government from accessing the U.S. financial system, and maintain U.S. sanctions effectiveness on individuals and entities that are linked to North Korea’s procurement of weapons of mass destruction (WMD)-related materials and proliferation activities."[246] Included in the designations were three shipping companies with ties to a previously-designated North Korean shipping business.[247]
1. 05/06/15: 2014 Terrorist Assets Report
This Report compiles information regarding assets in the United States of designated terrorists and state sponsors of terrorism. Regarding Specially Designated Global Terrorists, Specially Designated Terrorists, and Foreign Terrorist Organizations, as of 2014, funds totaling approximately $21 million were blocked pursuant to these terrorist sanctions programs. The Report lists $2.35 billion in funds (out of approximately $2.4 billion total) blocked in connection with state sponsors of terrorism (Cuba, Iran, Sudan, and Syria), and $35 million in non-blocked funds for residents and entities of Iran and Syria.[248]
1. 03/12/15: Commerzbank AG[249]
Commerzbank AG, through a pattern of financial practices, allegedly violated the Iranian Transactions and Sanctions Regulations ("ITSR"), 31 C.F.R. part 560; the Sudanese Sanctions Regulations ("SSR"), 31 C.F.R. part 538; Executive Order 13382 of June 28, 2005, "Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters" (E.O. 13382); the Weapons of Mass Destruction Proliferators Sanctions Regulations ("WMDPSR"), 31 C.F.R. part 544; the Burmese Sanctions Regulations ("BSR"), 31 C.F.R. part 537; and the Cuban Assets Control Regulations ("CACR"), 31 C.F.R. part 515.
For several years, up to and including January 2010, Commerzbank removed, omitted, obscured or otherwise failed to include references to U.S.-sanctioned persons in "Society for Worldwide Interbank Financial Telecommunication" payment messages sent to U.S. financial institutions. OFAC determined that bank employees deleted or omitted references to financial institutions of U.S.-sanctioned persons, replaced the originating bank information with Commerzbank’s name, and later created a process to route payments involving those countries’ counterparties to a payment queue requiring manual processing by bank employees rather than routine, automated processing. Commerzbank utilized similar versions of this financial practice to process U.S. dollar transactions involving sanctioned countries such as Iran, Sudan, Burma and Cuba.
OFAC determined that Commerzbank did not voluntarily self-disclose these violations and that the apparent violations constitute an egregious case. The base penalty for the matter was $574,801,770. Commerzbank agreed to remit $258,660,796 to settle with OFAC, with the obligation satisfied with payment equal or greater to penalties imposed by the U.S. Department of Justice and the New York County District Attorney’s Office arising out of the same course of conduct. This settlement with OFAC is part of a global settlement among Commerzbank, OFAC, the Department of Justice, the New York County District Attorney’s Office, the Federal Reserve Board of Governors, and the Department of Financial Services of the State of New York.
In reaching a settlement amount, OFAC considered aggravating factors, including the reckless disregard for U.S. sanctions requirements, in processing transactions in apparent violation of OFAC sanctions regulations; management at Commerzbank knew, or had reason to know, of the conduct leading to certain of the apparent violations; the conduct described above conferred significant economic benefit to persons subject to U.S. sanctions; Commerzbank is a large, commercially sophisticated financial institution; and Commerzbank did not maintain adequate policies or procedures to ensure compliance with the sanctions programs administered by OFAC. The mitigating factors OFAC considered included that Commerzbank has not received a penalty notice or Finding of Violation from OFAC in the five years preceding these violations; Commerzbank cooperated with OFAC’s investigation, including by engaging in an extensive internal investigation; and Commerzbank took remedial action in response to the violations.
2. 03/25/15: Paypal, Inc.[250]
PayPal, Inc. allegedly violated the WMDPSR; the ITSR; the CACR; the Global Terrorism Sanctions Regulations ("GTSR"), 31 C.F.R. part 594; and the SudanesSSR, for failure to use adequate screening technology and procedures to identify the possible involvement of U.S. sanctioned persons in PayPal transactions. Each of the transactions giving rise to the violations of the ITSR, CACR, GTSR and SSR either contained an explicit reference to a country subject to OFAC sanctions or another term linked to the country (i.e., "Tehran," "Khartoum," "Cuba," "Iran," "Sudan," "Iranian," or "Cuban"), or involved a PayPal account in which the Specially Designated Global Terrorists Interpal or Kahane Chai had an interest.
OFAC determined that PayPal violated the WMDPSR between October 20, 2009 and April 1, 2013, when it processed 136 transactions to or from a PayPal account registered to Kursad Zafer Cire, an individual designated by the U.S. State Department on January 12, 2009 pursuant to Executive Order 13382 of June 28, 2005, "Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters." Throughout this time period, PayPal’s Risk Operations Agents repeatedly dismissed flags on Cire’s account. PayPal initially stated to OFAC that it failed to identify Cire as a potential Specially Designated National (SDN) because the automated interdiction filter was not "working properly." Six months later, PayPal’s automated interdiction filter appropriately flagged Cire’s account five times for potential matches to the SDN, and on each occasion, separate PayPal Risk Operations Agents dismissed the alerts without requesting additional information to clear the potential SDN name matches. A month later, PayPal’s interdiction filter again flagged Cire’s account for a sixth time due to a potential match to the SDN, and a PayPal’s Risk Operations Agent initially followed the MSB’s procedures for handling an SDN name match, but then subsequently dismissed the match due to an apparent misunderstanding of why the filter had flagged Cire’s account. In April 2013, PayPal’s interdiction filter flagged Cire’s account for a seventh time, and the MSB appropriately blocked the account and reported it to OFAC.
OFAC determined the apparent violations to the ITSR, CACR, GTSR and the SSR constitute a non-egregious case and determined the violations to the WMDPSR constitute an egregious case. OFAC emphasized that PayPal’s failure to employ adequate screening and reckless conduct provided economic benefit to Cire and undermined the integrity of the WMDPSR by operating account and processing transactions on behalf of an SDN for approximately three-and-a-half years. The total base penalty amount for all of the apparent violations was $17,018,443. PayPal agreed to remit $7,658,300 to settle with OFAC.
In determining the settlement, OFAC considered aggravating factors, including the reckless disregard by PayPal’s management for U.S. economic sanctions requirements, in deciding to operate a payment system without implementing appropriate controls to prevent the system from processing transactions in apparent violation of OFAC regulations; PayPal management and supervisors knew of the conduct giving rise to the apparent violations; PayPal’s conduct resulted in harm to U.S. sanctions program objectives; and PayPal’s OFAC compliance program was inadequate to prevent the apparent violations. OFAC considered mitigating factors such as PayPal hired new management within its Compliance Division; identified and remedied OFAC-related issues; PayPal has not received a penalty notice or Finding of Violation in the five years preceding the earliest date of the transactions giving rise to the apparent violations; and PayPal substantially cooperated with OFAC’s investigation.
Life for Relief and Development ("LRD") allegedly violated Iraqi Sanctions Regulations, 31 C.F.R. part 575, when it formed a conspiracy for the purpose of transferring funds from the United States to Iraq and made funds transfers pursuant to that conspiracy. OFAC considered three such fund transfers by and through Amman, Jordan, totaling $236,000.
OFAC determined that LRD did not voluntarily self-disclose the apparent violations, and that the violations constituted an egregious case. The base penalty amount for LRD’s apparent violations was $1,300,000. LRD agreed to remit $780,000 in settlement with OFAC.
In determining the settlement, OFAC considered aggravating factors, such as: the appearance that LRD willfully violated U.S. economic sanctions regulations; prior to the relevant transactions, LRD had written notice from OFAC that such transfers were prohibited and that OFAC did not authorize such transactions; LRD’s highest management levels, including its President, knew of the conduct giving rise to the apparent violations and directed the funds transfers to Iraq via Jordan; and that U.S. economic sanctions program objectives were harmed because funds were successfully transferred to Iraq. OFAC considered mitigating factors in its determination, including that LRD does not have prior OFAC sanctions history; LRD undertook a remedial response to the transactions and agreed to establish an OFAC compliance program; it cooperated by waiving the statute of limitations regarding the apparent violations; and the civil settlement with OFAC is an element of LRD’s cooperation agreement with the U.S. Department of Justice.
John Bean Technologies Corporation ("JBT") allegedly violated Executive Order 13382 of June 28, 2005, "Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters" ("E.O. 13382") and the WMDPSR when JBT goods were shipped by the Islamic Republic of Iran Shipping Lines ("IRISL") and JBT subsequently attempted to receive payment for such shipments from banking institutions.
Specifically, JBT sold goods to a Chinese company that were shipped by IRISL aboard a blocked vessel from Spain to China, and trade documents related to the shipment were presented to a U.S. bank for payment pursuant to a letter of credit in the amount of $2,897,936. After the U.S. bank declined to advise JBT that the letter of credit and trade documents had been returned pursuant to an OFAC license, JBT presented trade documents related to the shipment to a Spanish bank in order to receive payment. Another apparent violation occurred when JBT reimbursed JBT AeroTech Spain for charges paid to its freight forwarder for the shipping services rendered by IRISL, and to Banco Santander for fees associated with negotiating the L/C in the amount of $164,470.24 for those payments via inter-company transfer.
OFAC determined that JBT did not voluntarily self-disclose the Apparent Violations, and that the violations constitute a non-egregious case. The base penalty amount for the Apparent Violations was $670,000. JBT agreed to remit $391,950 to settle with OFAC. In reaching the settlement, OFACconsidered aggravating factors, including that JBT management knew of the conduct resulting in the violations; economic benefit was conferred to a blocked entity, resulting in harm to the sanctions program objectives; and that JBT is a sophisticated entity that conducts business across the globe. OFAC considered mitigating factors, including that JBT has not been the subject of a Penalty Notice or a Finding of Violation from OFAC in the five years preceding these transactions; JBT implemented some remedial measures to prevent a recurrence of the violations, including employee training, enhancements to its compliance program, and enhanced party screening; and JBT cooperated with OFAC’s investigation.
Navigators Insurance Company ("Navigators") allegedly provided insurance coverage in violation of the Foreign Assets Control Regulations ("FACR"), 31 C.F.R. part 500; Executive Order 13466 of June 26, 2008, "Continuing Certain Restrictions With Respect to North Korea and North Korean Nationals" ("E.O. 13466"); the North Korea Sanctions Regulations ("NKSR"), 31 C.F.R. part 510; the ITSR; the SSR; and the CACR.
Between May 2008 and April 2011, Navigators and its London, U.K. branch issued global protection and indemnity insurance policies that provided coverage to North Korean-flagged vessels, and covered incidents that occurred in or involved Iran, Sudan or Cuba, some of which led to the payment of claims. Navigators did not have a formal OFAC compliance program in place at the time these violations occurred. Additionally, personnel within its U.K. branch misinterpreted the applicability of OFAC sanctions regulations.
OFAC determined that Navigators voluntary self-disclosed the apparent violations to OFAC, and that the apparent violations constitute a non-egregious case. The base penalty amount for these violations was $755,042. Navigators agreed to remit $271,815 to settle with OFAC. In determining the settlement, OFAC’s considered aggravating factors, including that Navigators’ managers and supervisors knew, or had reason to know, that the insurance policies and claims involved OFAC-sanctioned countries; Navigators is a commercially sophisticated financial institution; and Navigators did not have a formal OFAC compliance program in place when the violations occurred. OFAC considered mitigating factors, including that Navigators has not received a penalty notice preceding the earliest date of the violations; Navigators took appropriate remedial action, including the formation and implementation of a comprehensive OFAC compliance program; and Navigators cooperated with OFAC’s investigation.
OFAC issued a Finding of Violation ("FOV") to Schlumberger Oilfield Holdings, Ltd. ("SOHL") for violating the ITSR, and the SSR. OFAC determined that, from February 2004 continuing through June 2010, SOHL knowingly and willingly violated the ITSR and SSR by: (1) systematically approving and disguising capital expenditure requests from operations in Iran and Sudan for the manufacture of new tools and for certain expenditures; (2) directing and overseeing the transfer of oilfield equipment from projects in non-sanctioned counties to projects in Iran and Sudan; (3) making and implementing business decisions specifically concerning projects in Iran and Sudan; and (4) providing certain technical services in order to troubleshoot mechanical failures and to sustain sophisticated oilfield services equipment in Iran and Sudan.
In its decision to issue the FOV, OFAC considered aggravating factors, including that SOHL willfully violated U.S. economic sanctions; the violations continued over a long pattern of conduct; senior management knew, or had reason to know, of these violations; SOHL caused significant harm to U.S. sanctions program objections by providing specialized goods and services to petroleum industries in Iran and Sudan; SOHL is a large and sophisticated company that knew, or should have known, of its obligations to comply with the ITSR and SSR; and SOHL failed to effectively enforce its compliance program. OFAC considered mitigating factors, such as SOHL took remedial action, including ceasing to provide oilfield services to Iran and Sudan; SOHL has no prior OFAC sanctions history; and SOHL cooperated with OFAC’s investigation.
OFAC noted it took into particular consideration the mitigating effect that SOHL entered into a plea agreement with the U.S. Department of Justice, agreeing to pay a criminal fine in the amount of $155,138,904, as well as a forfeiture money judgment in the amount of $77,569,452. OFAC emphasized that, in light of the parallel criminal case and substantial criminal fine, it determined an FOV was the appropriate response to SOHL’s violations.
UBS AG ("UBS") allegedly violated the Global Terrorism Sanctions Regulations ("GTSR"), 31 C.F.R. part 594 when it processed transactions related to securities held in custody in the United States for an individual customer of UBS (Client) in Zurich, Switzerland designated by OFAC in October 2001 pursuant to Executive Order 13224, "Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism."
In October 2001, OFAC designated Client, a pre-existing customer of UBS. Despite OFAC’s designation, UBS continued to engage in investment-related activity on behalf of Client, including processing USD securities-related transactions to or through the United States. At that time, UBS maintained a global OFAC policy that required the bank to conduct screening of all outbound and inbound transfers, but because UBS considered the securities-related transactions to be internal transfers, these transactions never generated any alerts. In 2012, when UBS elected to close Client’s accounts and began liquidating the accounts via external transfers, which included some U.S. based securities, UBS’s sanctions filter generated alerts against Client’s name as an OFAC-designated individual. From October 2001 to January 2013, UBS processed 222 transactions on behalf of Client.
OFAC determined that while UBS identified the violations, the disclosures do not constitute voluntary self-disclosures within the definition of OFAC’s voluntary self-disclosures due to the fact that the violations were substantially similar to other violations which OFAC was already aware of. OFAC determined the violations constitute a non-egregious case and that the base penalty amount is $3,778,000. UBS agreed to remit $1,700,100 to settle with OFAC.
In determining the settlement, OFAC considered aggravating factors, including that UBS acted with reckless disregard for U.S. sanctions requirements by failing to implement adequate controls to prevent the apparent violations even in light of the multiple warning signs that its conduct could to lead to U.S. sanctions violations; multiple business lines and personnel within UBS had actual knowledge of the conduct that led to the apparent violations; UBS processed 222 transactions on behalf of the Client, which conferred economic benefit to a Specially Designated Global Terrorist in the amount of $2,466,195.01; UBS is a large and commercially sophisticated global institution; and, although multiple personnel within UBS’s compliance department were aware of Client’s OFAC designation, the bank failed to take any measure to prevent processing transactions for the Client to or through the United States. UBS considered mitigating factors such as UBS had not received a penalty notice or Finding of Violation from OFAC in the five years preceding the violations; UBS has a global sanctions policy in place requiring the bank to comply with OFAC’s sanctions programs; UBS took remedial action in response to the apparent violations, including by conducting an internal investigation; and UBS substantially cooperated with OFAC’s investigation.
OFAC noted that this enforcement action highlights the importance of institutions taking appropriate measures to ensure compliance with all applicable sanctions when they have operations that conduct business in multiple jurisdictions that implement sanctions against particular persons or countries. OFAC further emphasized that this action should raise awareness regarding the sanctions obligations for foreign financial institutions that process transactions to or through the United States.
Crédit Agricole Corporate and Investment Bank ("CA-CIB") allegedly violated the Sudanese Sanctions Regulations (SSR), 31 C.F.R. part 538; the CACR; the BSR; and the ITSR, when it processed thousands of transactions through U.S. financial institutions that involved OFAC-sanctioned persons. Despite CA-CIB’s personnel being aware of the U.S. sanctions, CA-CIB used cover payments or other financial practices that omitted references to the OFAC-sanctioned persons, which prevented U.S. financial institutions from properly reviewing the transactions in accordance with OFAC programs.
OFAC determined that CA-CIB did not voluntarily self-disclose these violations, and that the violations constitute an egregious case. Both the statutory maximum and base civil monetary penalties in this case were $1,464,860,377. CA-CIB agreed to remit $329,593,585 to settle with OFAC. In determining the settlement amount, OFAC considered aggravating factors, including that CA-CIB had indications that its conduct might constitute a violation of U.S. law; several CA-CIB managers were aware of the conduct that led to the apparent violations; CA-CIB’s conduct resulted in significant harm to several OFAC sanctions programs; CA-CIB is a large and sophisticated institution with a global presence; and CA-CIB did not have appropriate controls or an adequate compliance program in place to prevent these violations from occurring. OFAC considered mitigating factors, including that CA-CIB has not received a penalty notice or Finding of Violation from OFAC in the five years preceding the violations; the bank took appropriate remedial action in response to these apparent violations; and CA-CIB provided substantial cooperation throughout the course of OFAC’s investigation.
CA-CIB’s settlement with OFAC is part of a global settlement among CA-CIB, OFAC, the U.S. Department of Justice, the New York County District Attorney’s Office, the Federal Reserve Board of Governors, and the Department of Financial Services of the State of New York.
In addition to enforcement actions by federal regulators, the New York state regulator was also active. The New York State Department of Financial Services ("NYDFS") levied large penalties against multiple companies for sanctions-related violations. There were three main NYDFS sanctions-related enforcement actions in 2015, bringing in almost $900 million in total penalties.
a. Commerzbank (3/12/15) and Credit Agricole International Sanctions Violations (10/20/15)
First, NYDFS participated in the enforcement actions against Commerzbank and Credit Agricole detailed above. In the March 12, 2015 resolution between Commerzbank and multiple government agencies, $310 million of the overall $718 million sanctions-related penalty (as noted above, there was a simultaneous $734 million penalty to settle the related BSA/AML matter) went to the NYDFS.[257] Then, in the October 20, 2015 resolution between Credit Agricole and government regulators, the NYDFS portion accounted for $385 million of the $787.3 million overall penalty.[258]
b. Deutsche Bank International Sanctions Violations (11/4/15)
Second, NYDFS was also involved in a separate sanctions-related action in coordination with the Federal Reserve against Deutsche Bank that was resolved on November 3, 2015.[259] The NYDFS order alleged that, from at least 1999 through 2006, Deutsche Bank used non-transparent methods and practices to conduct over 27,200 U.S. Dollar clearing transactions valued at over $10.86 billion on behalf of Iranian, Libyan, Syrian, Burmese and Sudanese financial institutions and other entities subject to U.S. sanctions. To conduct these transactions, Deutsche Bank allegedly used wire stripping, or alteration of the information included on the payment messages, as well as non-transparent cover payments.
In its press release announcing the settlement, the NYDFS highlighted a Deutsche Bank employee email emblematic of the conduct saying, "Let’s not revert to the client in writing due to the reputational risk involved if the e-mail goes to wrong places. Someone should call [the client] and tell them orally and ensure that the conversations is not taped. . . . Let’s also keep this e-mail strictly on a ‘need-know’ basis, no need to spread the news . . . what we do under OFAC scenarios."[260]
Deutsche Bank paid an overall monetary penalty of $258 million, with the NYDFS order accounting for $200 million and the Federal Reserve resolution the remaining $58 million. In addition to the monetary penalties, Deutsche Bank was required to retain an independent monitor and terminate six employees allegedly at the center of the conduct: a managing director in Global Transactions Banking, a managing director in Operations, a director in Operations, a director in Corporate Banking and Securities, a vice president in Global Transactions Banking, and a vice president/relationship manager.[261] Three other Deutsche Bank employees were barred from holding any duties or responsibilities, or engaging in any activities, involving compliance, U.S. dollar payments, or any matter relating to U.S. operations.[262]
The European Union and United Kingdom sections will be divided into four parts covering: i) EU legislative developments; ii) EU case-law; iii) EU/UK enforcement, and iv) additional UK developments. .
While the majority of the amendments concern updates of the list of persons, entities and groups targeted by existing asset freeze and travel ban sanctions (i.e., Afghanistan, Belarus, Côte d’Ivoire, Egypt, Guinea, Guinea-Bissau, Libya, North Korea, Somalia, Syria, Yemen, and Zimbabwe) or an extension of the expiration date (i.e., Bosnia and Herzegovina, Egypt, Central African Republic, Democratic Republic of Congo, Egypt, Guinea, Moldova, Myanmar, Russia, Syria and Tunisia ), for a number of jurisdictions the developments have been of a more substantive nature, including the adoption of wholly-new sanctions regimes regarding Burundi and the removal of certain sanctions on Iran.
The EU imposed sanctions on Afghanistan, specifically target people associated with the Taliban and who constitute a threat to the peace, stability, or security of the country. On July 31, 2015, the EU added two individuals to its listings, and deleted the entry of 1 individual,[263] and a further individual was added on November 18, 2015.[264]
The change to the EU sanctions regime in Belarus has been an amendment to one individual’s reasons for inclusion on March 17, 2015.[265]
In August 2015, 24 people were removed from the EU’s Belarus sanctions listings.[266] Then in October EU foreign ministers agreed to suspend targeted sanctions on Belarus for 4 months from October 31, 2015. They maintained sanctions in force for four months, until February 29, 2016, but "suspend" their application for everyone on the Belarus list (171 people and 10 entities) except for 4 people involved in "unresolved disappearances" in Belarus.[267]
The EU has also de-listed four entities in Council Implementing Regulation (EU) 2015/1949 on the grounds that there are no longer grounds for keeping them on the list following the Chyzh Judgment (discussed below). Some of the Belarus entities that won their applications for annulment in the Chyzh case had already been de-listed by the EU by the time of that judgment (October 6, 2015).[268]
On March 23, 2015, it was announced that the restrictive measures on Bosnia and Herzegovina would be extended to March 31, 2016.[269]
On June 22, 2015, following President Nkurunziza’s announcement of his intention to run for re-election (for a third time), the EU’s Foreign Affairs Council issued a warning that the EU "is determined to adopt, if necessary, targeted restrictive measures" against those responsible for acts of violence, repression or serious human rights violations in Burundi.
Thus as a result, on October 1 2015, the European Council adopted sanctions in respect of four persons whose activities are undermining democracy or obstructing efforts to achieve a political solution to the current crisis in Burundi.[270]
On May 12, 2015 the EU designation criteria for those said to be involved in criminally or politically motivated violence was extended, in line with UN Security Council Resolution 2196 (2015), to cover entities owned or controlled by designated persons and to include gold in the list of example natural resources that cannot be exploited illegally to provide support for armed groups or criminal networks. The updates also require Member States to seize, register and dispose of any items they discover whose sale, transfer or export is prohibited under the sanctions and update the international missions.[271]
In addition, earlier, in March and December 2015, the EU added and removed individuals from its CAR sanctions listings[272] in order to reflect changes made to the UN’s sanctions.[273]
On February 10, 2015, the sanctions on Côte D’Ivoire prohibiting the sale, supply, transfer or export of equipment capable of being used for internal repression were relaxed. Construction equipment with ballistic protection for civilian use in mining or infrastructure projects and non-lethal equipment solely for enabling Ivorian security forces to maintain public order, supporting the Ivorian Security Sector Reform or helping the UN are now permitted. This derogation is however subject to authorisation on a case-by-case basis by the exporting Member State. That State must also inform all the other Member States and the Commission of its intention to authorise more than a week in advance for equipment for civilian use and no more than two weeks late for equipment for maintaining public order.[274]
In addition, on January 28, 2015 the EU implemented the UN Sanctions Committee’s decision to remove an individual from the EU Côte D’Ivoire sanctions listings.[275] Subsequently, on April 26, 2015, 2 more individuals were removed and six entries were updated in line with further updates made by the UN Security Council.[276] One of the removals was due to a court order annulling the listing.[277]
On April 24, 2015, the designation criteria for people and entities under the sanctions regime, was extended in accordance with the UN Security Council’s changes.[278] These changes include:[279]
On March 21, 2015, the restrictive measures on Egypt were extended until 22 March 2016.[280] The sanctions, introduced in March 2011, target those allegedly responsible for the misappropriation of Egyptian state assets.
The EU further extended its sanctions regime against Guinea until October 27, 2016. The EU’s sanctions target five individuals and those persons associated with them. The EU lifted the arms embargo against Guinea in April 2015.[281]
On June 12, 2015, the sanctions regime on Guinea-Bissau, an EU-wide travel ban and asset freeze on listed individuals/entities, was renewed until 30 April 2016. The sanctions are aimed at those who are undermining the country’s security and stability or who are seeking to prevent or block its peaceful political process.[282]
For the changes to EU sanctions brought about by Implementation Day see our Client Alert, Implementation Day Arrives: Substantial Easing of Iran Sanctions alongside Continued Limitations and Risk.
On March 7, 2015, in response to a UN Security Council Resolution,[283] the restrictive measures against Libya were expanded to include those engaged in, or those who provide support for, acts that threaten the peace, stability, or security of Libya, or those who undermine the successful completion of its political transition.[284] On May 27, 2015, the measures were then further expanded in response to the changes made by the UN Security Council to its sanctions.[285] The EU updated the designation criteria for those under its Libyan sanctions regime,
On March 7, 2015 two individuals were removed from the Libyan sanctions list and one listing was amended[286] and on May 27, 2015 two entities were added.[287]
In addition, on the July 31, 2015 the EU introduced sanctions on another 20 people and 16 entities listed under its sanctions regime on Libya. The EU has also added a new exception to its arms embargo on Libya for military equipment that will not be used for internal repression and is solely intended for security or disarmament assistance to the Libyan government.[288]
Further, on January 18, 2016 the EU consolidated its Libya sanctions measures into a single regulation.[289]
On October 28, 2015, EU sanctions against Moldova, imposing an EU-wide travel ban on people who are responsible for designing or implementing the campaign of intimidation and closure against Latin-script schools in the Transnistria region of Moldova, and have been extended until 31 October 2016.[290]
On April 30, 2015, the sanctions regime on Myanmar, which imposes an arms embargo on the country, has been extended for another year,[291] and with exceptions made for non-lethal military equipment intended solely for humanitarian or protective use, equipment for use in clearing mines, and protective or non-lethal clothing and equipment for use by UN and EU personnel.
On July 3, 2015, an entity and six of its senior employees were added to the EU North Korean sanctions listings.[292]
The EU has extended its sectoral sanctions against Russia until 31 July, 2016 to allow for an assessment of the implementation of the Minsk agreements, which the EU has said must be completed before the imposed sanctions are removed.
On March 3, 2015, following amendments made by the United Nations Security Council on October 24, 2014,[293] the sanctions regime against Somalia was amended so that Member States are now able to inspect vessels bound to or from Somalia which they have reasonable grounds to believe are:
Member States can seize and dispose of any such item they find and must quickly notify the Sanctions Committee of any inspections held under the new measures.[294]In addition, two individual were removed from the EU Somali sanctions list in March and November 2015.[295]
On May 12, 2015, the existing EU sanctions on South Sudan were amended to expand the designation criteria to include those designated by the UN Security Council or the UN Committee. The new criteria includes actions or policies that have the purpose or effect of continuing South Sudan’s conflict, that threaten transitional agreements, that undermine the country’s political process or that violate human rights.[296]
On May 29, 2015, the EU extended the sanctions regime against Syria until June 1, 2016.
The prohibitions on import, export and transfer of cultural property and provision of related services were also amended so that it now applies to cases where reasonable suspicion exists that the property has been illegally removed from Syria on or after March 15, 2011, rather than the previously fixed date of May 9, 2011.
The EU travel ban and asset freeze target list for individuals and entities involved in the repression and violations of human rights perpetrated by the Syrian regime has been variously amended on January 27, March 6,[297] March 19,[298] May 20,[299] May 29,[300] and June 23,[301] 2015.
In addition, on the October 12 2015, the EU imposed sanctions on a number of different Syrian individuals:
On 28 December, 2015, Mr. Samir Hamsho and his companies (Al Buroj Trading and Syria Steel/Hmisho Steel) were removed from the sanctions measures imposed on Syria.[303]
On January 28, 2015 the sanctions against 48 listed individuals were extended until January 31, 2016.[304] The EU has since then extended its targeted asset freezes against Tunisia for one year, until 31 January 2017 against the same 48 individuals.[305]
On June 8, 2015, two Yemeni individuals associated with the Houthi rebels were added to the EU sanctions list, due to their listings under the UN sanctions in April.[306] The Council had also stated that the UN arms embargo will now be imposed against those listed.[307]
On February 20, 2015, the EU sanctions against Zimbabwe were renewed until February 20, 2016. These sanctions bar the sale or transfer of arms and related materials or the transfer of any technical or financial assistance related to military activities to the country in addition to imposing an asset freeze and travel ban on listed individuals and entities.
On February 4, 2015, it was decided that Mr. Mugabe’s, Zimbabwe’s President, travel ban is to be lifted whenever he "is travelling under his African Union chairmanship capacity". This follows his assumption of the one-year chairmanship of the Union on January 30, 2015. Also, during 2015, 11 names were removed from the sanctions listing.. Presently, the sanctions on Zimbabwe are suspended against all but President Robert Mugabe, his wife, and Zimbabwe Defence Industries.[308] Finally, a new provision has also been included (Article 11a) in the current sanctions Regulation, in order to comply with the respective requirements for the protection of personal data.
The new Rules of Procedure of the General Court entered into force as of July 1, 2015.[309] The new rules include provisions permitting ‘closed Court procedures’.[310]
Under Article 105, the General Court is permitted to take into account evidence not disclosed to the targeted person if such "communication would harm the security of the Union or that of one or more of its Member States or the conduct of their international relations". It is noted that "[t]hose rules, laid down in Article 105 of the Rules of Procedure, will not, however, take effect until after a decision of the General Court determining the security rules for protecting that information or material has been published."
While the General Court would take into account during its assessment the fact that a targeted person has not been fully able to exercise his rights of defence, the Rules of Procedure do not require a minimum disclosure of the "essence of the grounds". This raises a quandary for the General Court, as the case-law of the European Court of Human Rights would tend to suggest that disclosure of information necessary to enable a defendant to determine whether it is possible to refute the allegations against them is required under the right to a fair trial under Article 6 of the European Convention on Human Rights. It is anticipated that this issue will be raised if and when the General Court begins to exercise any such new powers.
Past case-law, however, consistently held that the rights of defence and effective judicial review require that EU institutions only rely on reasons for designating a target for sanctions if those reasons (and the supporting evidence) have been disclosed to the targeted person.[311]
On the October 6, 2015 the General Court withdrew the listing of restrictive measures against of Mr. Yury Chyzh and the companies connected with him in the Triple group, including FA Dinamo Minsk (the Belarus football club), on the EU’s sanctions relating to Belarus.[312] Mr. Chyzh was listed by the Council for providing financial support to the regime through his company Triple.
The Council submitted that because Mr. Chyzh is one of the leading businessmen in Belarus he had "close and mutually beneficial ties" with President Lukashenko. The Council was unable to provide material evidence of the payment of bribes, but held that it was ‘most unlikely‘ that the favours granted by the regime would not have been returned in one way or another. It further argued that "tax payments by Triple and Mr. Chyzh are an obvious form of financial support to the regime which, combined with Mr. Chyzh ties to the regime", demonstrated his support for the regime.
The General Court upheld that being a leading businessman in Belarus is insufficient on its own to evidence that Mr. Chyzh had financial supported President Lukashenko regime. The public awards and concessions that his companies had won could not be evidenced that they were not awarded purely by merit: "[the] evidence which allowed the Council to state that Triple had obtained public awards and concessions on the basis of considerations which were not related to merit, the Council merely replied that it had no evidence to support the conclusion that, in Belarus, public awards were granted through an open, transparent and fair procedure for the award of contracts. In so doing, the Council has failed to establish that Triple obtained public awards and concessions because of Mr. Chyzh’s links to the regime". (See paragraphs 172-176.)
Further, at paragraph 175 the General Court stated: "[s]uch an argument would lead to the inclusion of the names on the lists of persons and entities subject to restrictive measures, any undertaking who is a party, in Belarus, to a public procurement contract, even where that contract was awarded following a lawful procedure for the award of contracts, which would exceed, evidently, the objective pursued by the EU legislature".
In conclusion, the General Court expressed the need to respect the principle of legal certainty when listing individuals subject to restrictive measures.
On March 5, 2015 the European Court of Justice upheld the Judgment of the General Court, refusing to remove the listings against Ahmed Ezz and three of his spouses.[313]
The EU sanctions against them are aimed at persons or entities having been identified as responsible for misappropriation of State funds and those ‘associated’ with them. Specifically Mr. Ezz and his spouses were listed as "persons subject to judicial proceedings by the Egyptian authorities in respect of the misappropriation of State Funds on the basis of the United Nations Convention against corruption".
The European Court of Justice, upheld the General Court’s Judgment, confirming that the Council had the legal authority to enforce the measures (to assist the Egyptian authorities in their fight against the misappropriation of State funds– see paragraph 70), that they are not a ‘disproportionate interference‘ on the appellants’ property and/or freedom to conduct a business, neither a breach of their rights of defence (see paragraphs 95-114). The Court also upheld the General Court’s findings that it had correctly interpreted the listing criterion: "that the effectiveness of Decision 2011/172 would be undermined if the adoption of restrictive measures were made subject to the criminal convictions of persons suspected of having misappropriated funds, since those persons would have enough time pending their conviction to transfer their assets to States having no form of cooperation with the Egyptian authorities […] Article 1(1) of Decision 2011/172 had to be interpreted as being directed not only at persons being prosecuted but also persons the subject of judicial proceedings connected to criminal proceedings for ‘misappropriation of Egyptian State funds’ who may on that basis be described as persons associated with the individuals the subject of those criminal proceedings" (see paragraphs 71 and 72).
On September 15, 2015, the General Court removed the listing of the Iranian Aluminium Co ("Iralco"). [314]
The Council justified the restrictive measures on Iralco (the freezing of the Iralco’s funds and economic resources) by holding that: "[t]he Iran Aluminium Company (aka Iralco, Iranian Aluminium Company) is assisting designated entities to violate the provisions of UN and EU sanctions on Iran and is directly supporting Iran’s proliferation sensitive nuclear activities. As of mid-2012 Iralco had a contract to supply aluminium to EU-designated Iran Centrifuge Technology Company (TESA)". (See paragraph 10.)
The General Court referred to the test from its previous case-law: "[i]t is the task of the competent European Union authority to establish, in the event of challenge, that the reasons relied on against the person concerned are well founded, and not the task of that person to adduce evidence of the negative … If that material is insufficient to allow a finding that a reason is well founded, the Courts of the European Union shall disregard that reason as a possible basis for the contested decision to list or maintain a listing".[315] (See paragraph 43.)
The General Court noted that the Council had not presented any evidence and that the listing of Iralco was based on "unsubstantiated assertions" (see paragraph 46). The Council had also put forward the argument that Iralco had been listed because all Iranian metal companies such as Iralco were in high demand. Here, the General Court disagreed finding no evidence that Iralco was supplying metals for Iran’s nuclear program. Based on the evidential findings, Iralco’s listing was held to be a clear "error of assessment" and provided the Council two months to remedy the errors acknowledged in the Judgment (with the sanctions still being placed on Irlalco).
Regarding the 2012 listing of several Iranian entities, on the grounds of alleged connections with the National Iranian Oil Company ("NIOC"), the General Court in 2015, heard a number of individual cases against these listings.
There have been a number of recent appeals brought by the subsidiaries of NIOC which include:
On January 21, 2015 the General Court refused to de-list the EU’s restrictive measures against Mr. Mohammad Makhlouf.[319] The restrictive measures against Mr. Makhlouf were imposed because he is the "uncle of Syrian President Bashar Bashar Al-Assad, and a business associate and father of Rami, Ihab and Iyad Makhlouf" (see paragraphs 70 and 73). As a result, Mr. Makhlouf brought claims alleging: (i) an error of assessment; (ii) a failure to respect his fundamental rights (proportionality, right to property and the right to privacy); (iii) failure to give effect to his right to judicial protection; (iv) judicial review; and (v) and for failing to give sufficient reasoning for his listing. All the claims raised above were dismissed by the General Court. The conclusion reached was that because Mr. Makhlouf was "clearly a person related to the leaders of the Syrian regime"and that this was sufficient evidence to satisfy that he "has ties with the leaders of the regime or economic support" (see paragraphs 81-88).
Note: On January 21, 2016, Mr. Makhlouf lost his second application to withdraw his listing under the EU’s sanctions on Syria, because of his family relationship with the President of Syria.[320]
On April 21, 2015, in concurrence with the General Court’s findings, the European Court of Justice refused to de-list Mr. Anbouba from the restrictive measures imposed by the EU on Syria in 2011.[321]
Mr. Anbouba was listed on the grounds of his position as president of an agro-industry company (SAPCO), and for providing "economic support for the Syrian regime" (see paragraph 7 – Case C‑630/13 P). Mr. Anbouba submitted that the General Court had erred in law in that it held that "the Council properly applied a presumption of support for the Syrian regime to the heads of the leading businesses of Syria, when that presumption has no legal basis, is disproportionate to the legitimate aim pursued and is irrebuttable".
The European Court of Justice concluded that the General Court was correct to hold the ‘presumption’ that Mr. Anbouba’s position in Syrian economic life, "his position as the president of SAPCO, his important functions within both Cham Holding and the Chamber of Commerce and Industry of Homs and his relations with a member of the family of President Bashar Al-Assad constituted a set of indicia sufficiently specific, precise and consistent to establish that he provided economic support for the Syrian regime" (see paragraphs 48-52 – Case C‑630/13 P).
On May 20, 2015, the General Court rejected the applications of three Syrian nationals of interim measures against their re-listing of EU restrictive measures (the EU’s sanctions on Syria). In January the Council re-listed them, the applicants applied to annul their listings in March, and in that context applied for interim measures.
Under Article 104, paragraph 2 of the Rules of Procedure, application for interim measures must state the subject of the dispute, the circumstances giving rise to urgency and the pleas of fact and law establishing a prima granting the interim measures applied for. Thus, the suspension of enforcement and other interim measures may be granted by the judge if it is established that such an order is justified, prima facie, and they are urgent in that it is necessary to avoid serious and irreparable harm to the interests of the party seeking them, they are made and produce its effects before a decision on the main action. These conditions are cumulative (i.e., interim measures must be dismissed if one of the criterions is not met).
The party that is invoking damage is thus required to prove the facts which are considered to found the prospect of serious and irreparable damage
In the three cases that were heard by the General Court, the applicants did not provide any information and failed to evidence the serious and irreparable damage that they might suffer relating to their current situation to justify the grant of the suspension requested. Thus, the General Court was not able to appreciate the risk of immediate harm and, if so, if it could be called "serious and irreparable". On that understanding, the General Court rejected all of the applications.[322]
On October 26, 2015 the General Court de-listed the EU’s restrictive measures (EU Ukrainian sanctions) against Mr. Andriy Portnov (although his name was removed from the list during March of 2015).
The Council had listed Mr. Portnov based on a letter of March 3, 2014 from the Ukranian public prosecutor which stated that "[t]he Ukrainian law enforcement agencies have initiated a number of criminal proceedings to investigate criminal acts by former senior officials". The letter specified, in general terms, that the investigation in question "ha[d] established embezzlement of public funds for large amounts and subsequent illegal transfer outside Ukraine" (see paragraph 41). Mr. Portnov argued, essentially, that the adoption of the restrictive measures against him "[did] not meet the criteria for designation of persons subject to those measures established by the contested measures".
The General Court had cited that the letter only contained a "general statement" that Mr. Portnov would be subject to an investigation of the facts, not specified further, for the misappropriation of public funds and on the illegal transfer of funds abroad. Thus, the General Court noted that the Council had not conducted its own investigation and the evidence was not strong enough evidence to justify the continuation of his listing.
On April 22, 2015 the General Court rejected the removal of listings against the Attorney General of Zimbabwe, as well as 121 other individuals and legal entities targeted by the EU’s restrictive measures against Zimbabwe.[323] It was argued by the applicants, that only entities belonging to, or controlled by, the members of the Government of Zimbabwe can be considered to be "associated with" them, for the purposes of Article 6(1) of Regulation No 314/2004 and Article 5 of Decision 2011/101. This line of argument was not accepted by the General Court. "[E]ntities belonging to, or controlled by, natural persons (or, as may be, legal persons) associated with members of the Government of Zimbabwe may also be subject to the restrictive measures laid down by those provisions is wholly compatible with their wording. The same is true of the interpretation that the entities belonging to, or controlled by, the Government of Zimbabwe itself must be considered to be associated, within the meaning of those two provisions, with the members of that government" (see paragraph 282). In addition the General Court also explained that "[i]t would be paradoxical if a natural person associated with members of the Government of Zimbabwe were to be subject to a freezing of his funds and economic resources, without it being possible to extend that freezing to the entities which that natural person controls, directly or indirectly" (see paragraph 283).
On this basis, those individuals which had jobs unconnected with the Government of Zimbabwe or who were not even associated with Government members, were nevertheless found to have committed acts of violence during the elections in 2008. These acts of violence in the past were enough for the Council to assume that they were still associated with the Government of Zimbabwe (see paragraphs 236-239). Thus, the conclusion reached by the General Court was that the measures were justified.
The EU has amended the 2008 version[325] of its Best Practices for the effective implementation of restrictive measures (i.e., sanctions) which contains both, non-exhaustive and non-binding recommendations (or guidance). It should be noted that this is only guidance and the Member States are not legally obliged to apply or follow this guidance.
The main changes to the Best Practices include:
As reported in our 2014 Year-End Sanctions Update, the Austrian authorities investigated Raiffeisen Bank International for possible contravention of the Russian sanctions. Raiffeisen’s Moscow office had been involved in the sale of bond issue valued at 10 billion rubles for Vneshneconombank (one of the listed Russian banks under the E.U.’s Russian sanctions). To the extent that the Austrian parent company had been involved in the bond sale, it may have been a breach of the E.U.’s sanctions. In January 2015, however, Raiffeisen announced that the Austrian authorities had closed the investigation.
Further to our 2014 Year-End Sanctions Update, the German-Iranian individual prosecuted for shipping goods to Iran that could be used in Iran’s weapons program was sentenced to 4 years and 9 months in jail.[327]
We are not aware of any criminal investigations or prosecutions in the UK arising out of sanctions violations during 2015. In November 2015, however, Standard Chartered Bank confirmed that it was the subject of an investigation by the FCA in relation to sanctions compliance.[328] The results of this investigation are as yet unknown.
In addition, the Guernsey Financial Services Commission imposed a financial penalty of £150,000 on Bordeaux Services (Guernsey) Limited and also fined its three directors Peter Radford, Neal Meader and Geoffrey Tostevin (£50,000, £30,000 and £30,000, respectively) in connection with a number of failings including a failure to have in place effective sanctions training.[329] Bordeaux was the designated manager and administrator of Arch Guernsey ICC Limited (now known as SPL Guernsey ICC Limited) and its incorporated cells, into which two UK OIECS that were suspended by the then Financial Services Authority in 2009 had invested. The public statement notes that "the sanctions training at Bordeaux did not cover the types of considerations raised by the nature of investments invested in by Arch FP, such as a ship, which may be hired or chartered by a party subject to a sanction". This is a reminder that training should be more than a tick box exercise, and that consideration should be given to the issues that staff may encounter in the course of their employment when designing training.
2015 has seen two developments of particular significance for the enforcement of the EU’s sanctions in the United Kingdom.
The first is the announcement made on 28 September by answer to a written question to the Minister of Justice that the UK would not be introducing a new offence (modelled on the Bribery Act offence of a corporation failing to prevent bribery by its associated person) of failing to prevent an economic crime. The announced reasons were that there was no evidence that corporate offences were going unpunished, and because there were no examples of the enforcement of the section 7 offence. Of course in the few months since the announcement, there have been three concluded enforcements of the section 7 offence as set out in the 2015 UK White Collar Crime Alert.
The second development is the formation of a new government body to oversee sanctions enforcement in the UK – the Office of Financial Sanctions Implementation (OFSI). This body will form part of HM Treasury and is due to become operational in April 2016. The stated purpose of the OFSI is that it "will provide a high quality service to the private sector, working closely with law enforcement to help ensure that financial sanctions are properly understood, implemented and enforced" (HM Treasury Policy paper, Summer Budget 2015, Published 8 July 2015).
The creation of the OFSI was first made public in the UK’s budget in March 2015. There it was stated that this body would "review the structures within HM Treasury for the implementation of financial sanctions and its work with the law enforcement community to ensure these sanctions are fully enforced, with significant penalties for those who circumvent them. This review will take into account lessons from structures in other countries, including the US Treasury Office of Foreign Assets Control".
It remains to be seen exactly what powers the OFSI will have regarding sanctions enforcement. As yet, it is unclear whether this organisation will have the ability to commence prosecutions, or what investigatory powers might be given to it – if any. In addition, it is unclear what is meant by learning lessons from OFAC. If, for instance, the OFSI were to adopt the U.S. method of sentencing per individual breach, this would result in a sea-change in the scale of the penalties imposed in the U.K.
[1] Statement by the President on the Adoption of the Joint Comprehensive Plan of Action (Oct. 18, 2015), available at https://www.whitehouse.gov/the-press-office/2015/10/18/statement-president-adoption-joint-comprehensive-plan-action.
[2] Presidential Memorandum – Preparing for Implementation of the Joint Comprehensive Plan of Action of July 14, 2015 (JCPOA) (Oct. 18, 2015), available at https://www.whitehouse.gov/the-press-office/2015/10/18/presidential-memorandum-preparing-for-implementation-of-the-joint-comprehensive-plan-of-action.
[3] Office of Foreign Assets Control, Statement Relating to the Joint Comprehensive Plan of Action "Adoption Day" of October 18, 2015 (Oct. 18, 2015), available at https://www.treasury.gov/resource-center/sanctions/Programs/Pages/iran.aspx; Office of Foreign Assets Control, Frequently Asked Questions Relating to Adoption Day Under the Joint Comprehensive Plan of Action (Oct. 18, 2015), available at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/jcpoa_adoption_faqs_20151018.pdf.
[4] Press Statement, John Kerry, U.S. Secretary of State, An Update on Progress Toward Implementation Day of the JCPOA (Dec. 28, 2015), available at http://www.state.gov/secretary/remarks/2015/12/250876.htm.
[6] Press Statement, John Kerry, U.S. Secretary of State, Confirmation of Verification of Iranian Actions Pursuant to the Joint Comprehensive Plan of Action (Jan. 16, 2016), available at http://www.state.gov/secretary/remarks/2016/01/251332.htm; IAEA Director General’s Statement on Iran (Jan. 16, 2016), available at https://www.iaea.org/newscenter/statements/iaea-director-general%E2%80%99s-statement-iran.
[7] Joint Comprehensive Plan of Action, Annex II (Jul. 10, 2015), available at http://www.state.gov/documents/organization/245320.pdf.
[8] Exec. Order No. 13,574, 76 Fed. Reg. 101 (May 25, 2011); Exec. Order No. 13,590, 76 Fed. Reg. 226 (Nov. 20, 2011); Exec. Order No. 13,622, 77 Fed. Reg. 149 (Aug. 2, 2012); Exec. Order No. 13,645, 78 Fed. Reg. 108 (Jun. 5, 2013); Exec. Order No. 13,628, 77 Fed. Reg. 198 (Oct. 12, 2012).
[9] Joint Comprehensive Plan of Action, Annex II (Jul. 10, 2015), available at http://www.state.gov/documents/organization/245320.pdf.
[10] Office of Foreign Assets Control, General License H, Authorizing Certain Transactions Relating to Foreign Entities Owned or Controlled by a United States Person (Jan. 16, 2016), available at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/iran_glh.pdf.
[12] Joint Comprehensive Plan of Action, Annex II (Jul. 10, 2015), available at http://www.state.gov/documents/organization/245320.pdf.
[14] Joint Comprehensive Plan of Action, Annex II (Jul. 10, 2015), available at http://www.state.gov/documents/organization/245320.pdf.
[15] S.C. Res. 1696, U.N. Doc. S/RES/1696 (July 31, 2006); S.C. Res. 1737, U.N. Doc. S/RES/1737 (Dec. 23, 2006); S.C. Res. 1747, U.N. Doc. S/RES/1747 (Mar. 24, 2007); S.C. Res., U.N. Doc. S/RES/1803 (Mar. 3, 2008); U.N. Security Council Res. 1835 (Sept. 27, 2008); S.C. Res. 1929, U.N. Doc. S/RES/1929 (June 9, 2010); S.C. Res. 2224, U.N. Doc. S/RES/2224 (June 9, 2015).
[16] Federal Council of Switzerland, Lifting of sanctions against Iran on the occasion of Implementation Day (Jan. 17, 2016), available at https://www.admin.ch/gov/en/start/documentation/media-releases.msg-id-60331.html.
[17] Iranian Transactions and Sanctions Regulations, 31 C.F.R. § 560.530(a)(3) (amended by Iranian Transactions and Sanctions Regulations, Final Rule, 79 Fed. Reg. 18,990,18,993 (Apr. 7, 2014)); Office of Foreign Assets Control, Update to the Iranian Transactions and Sanctions Regulations, 31 CFR Part 560, Section 560.530(a)(3)(i), Adding Additional items to the List of Medical Supplies General License (Nov. 2, 2015), available at https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20151102.aspx.
[18] Iranian Transactions and Sanctions Regulations, 31 C.F.R. § 560.530(a)(3) (amended by Iranian Transactions and Sanctions Regulations, Final Rule, 79 Fed. Reg. 18,990, 18,993 (Apr. 7, 2014).
[19] Office of Foreign Assets Control, Update to the Iranian Transactions and Sanctions Regulations, 31 CFR Part 560, Section 560.530(a)(3)(i), Adding Additional items to the List of Medical Supplies General License (Nov. 2, 2015), available at https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20151102.aspx.
[20] Press Release, The White House, Fact Sheet: Charting a New Course on Cuba (Dec. 17, 2014), http://www.whitehouse.gov/the-press-office/2014/12/17/fact-sheet-charting-new-course-cuba.
[21] For a more in-depth discussion of this announcement, see Client Alert, Gibson, Dunn & Crutcher LLP, U.S. Government Takes First Step Toward Normalizing Relations with Cuba; Restores Diplomatic Ties and Eases Trade Sanctions (Dec. 18, 2014), http://www.gibsondunn.com/publications/Pages/US-Government-Takes-First-Step-Toward-Normalizing-Relations-with-Cuba.aspx.
[22] Presidential Statement on the Anniversary of Cuba Policy Changes (Dec. 17, 2015), https://www.whitehouse.gov/the-press-office/2015/12/17/statement-president-anniversary-cuba-policy-changes; see also Press Release, The White House, Fact Sheet: One-Year Anniversary of the President’s Policy of Engagement with Cuba (Dec. 16, 2015), https://www.whitehouse.gov/the-press-office/2015/12/16/fact-sheet-one-year-anniversary-presidents-policy-engagement-cuba.
[23] Cuban Assets Control Regulations ("CACR"), 80 Fed. Reg. 2,291 (January 16, 2015) (to be codified at 31 C.F.R. pt. 515), available at https://www.federalregister.gov/articles/2015/01/16/2015-00632/cuban-assets-control-regulations; Cuba: Providing Support for the Cuban People, 80 Fed. Reg. 2,286 (Jan. 16, 2015) (to be codified at 15 C.F.R. pts. 730–74), available at https://www.federalregister.gov/articles/2015/01/16/2015-00590/cuba-providing-support-for-the-cuban-people.
[24] Press Release, U.S. Dep’t of Treasury, Fact Sheet: Treasury and Commerce Announce Further Amendments to the Cuba Sanctions Regulations (Jan. 26, 2016), https://www.treasury.gov/resource-center/sanctions/Programs/Documents/fact_sheet_01262016.pdf.
[25] Press Release, U.S. Dep’t of Treasury, Fact Sheet: Treasury and Commerce Announce Regulatory Amendments to the Cuba Sanctions (Jan. 15, 2015), https://www.treasury.gov/press-center/press-releases/Pages/jl9740.aspx.
[26] CACR, 31 C.F.R. pt. 515 (2015), available at http://www.ecfr.gov/cgi-bin/text-idx?tpl=/ecfrbrowse/Title31/31cfr515_main_02.tpl.
[27] Cuba: Providing Support for the Cuban People, 15 C.F.R. pts. 736, 740, 746, and 748 (2015), available at http://www.ecfr.gov/cgi-bin/text-idx?SID=18fb45eea9bdf59daad0e2834eee5376&mc=true&tpl=/ecfrbrowse/Title15/15CVIIsubchapC.tpl.
[28] Client Alert, Gibson, Dunn & Crutcher LLP, U.S. Department of the Treasury and Department of Commerce Issue Rules Implementing Changes in U.S. Policy on Cuba (Jan. 20, 2015), http://www.gibsondunn.com/publications/Pages/US-Dept-of-Treasury-and-Dept-of-Commerce-Issue-Rules-Implementing-Changes-in-US-Policy-on-Cuba.aspx.
[33] Id. §§ 515.560(c)(5), 515.584(c).
[34] CACR, 80 Fed. Reg. at 2,292. Under the amended guidance, instead of defining the term as "payment of cash before shipment," this term is now defined as "payment [of cash] before the transfer of title to, and control of" the authorized export. 31 C.F.R. § 515.533(a)(2)(i).
[35] CACR, 80 Fed. Reg. at 2,298, 2,295. Most limits on remittances were removed altogether by amendments that took effect on September 21, 2015. See discussion infra Section I.B.1.a.ii.
[36] CACR, 80 Fed. Reg. 56,915 (Sept. 21, 2015) (to be codified at 31 C.F.R. pt. 515), available at https://www.federalregister.gov/articles/2015/09/21/2015-23587/cuban-assets-control-regulations; Enhancing Support for the Cuban People, 80 Fed. Reg. 56,898 (Sept. 21, 2015) (to be codified at 15 C.F.R. pts. 740, 746, and 772), available at https://www.federalregister.gov/articles/2015/09/21/2015-23495/enhancing-support-for-the-cuban-people.
[40] Id. § 515.560(c)(6), Note.
[41] CACR, 80 Fed. Reg. at 56,917.
[42] Bernadette Meehan, Rescission of Cuba as a State Sponsor of Terrorism, White House.Gov Blog (May 29, 2015, 12:33 PM), https://www.whitehouse.gov/blog/2015/05/29/rescission-cuba-state-sponsor-terrorism.
[43] White House Fact Sheet: One-Year Anniversary of the President’s Policy of Engagement with Cuba, supra note 22.
[44] U.S. Dep’t of State, The State Department’s Section 515.582 List (Feb. 13, 2015), http://www.state.gov/e/eb/tfs/spi/cuba/515582/237471.htm?utm_source=15-0219+Thursday&utm_campaign=15-0210+Daily+Bugle&utm_medium=email; see also Press Release, U.S. Dep’t of State, Fact Sheet: U.S. Department of State Section 515.582 List (Feb. 13, 2015), http://www.state.gov/e/eb/tfs/spi/cuba/515582/237473.htm.
[45] Client Alert, Gibson, Dunn & Crutcher LLP, U.S. Department of State Releases List of Cuban Goods and Services Now Eligible for Importation (Feb. 25, 2015), http://www.gibsondunn.com/publications/Pages/US-Department-of-State-Releases-List-of-Cuban-Goods-and-Services-Now-Eligible-for-Importation.aspx.
[46] See U.S. Dep’t of State Fact Sheet: U.S. Department of State Section 515.582 List, supra note 132.
[47] U.S. Dep’t of Treasury, Frequently Asked Questions Related to Cuba (Dec. 21, 2015). The Treasury Department revised its Frequently Asked Questions Related to Cuba again on January 26, 2016. U.S. Dep’t of Treasury, Frequently Asked Questions Related to Cuba (Jan. 26, 2016), https://www.treasury.gov/resource-center/sanctions/Programs/Documents/cuba_faqs_new.pdf.
[48] U.S. Dep’t of Treasury, Guidance Regarding Travel Between the United States and Cuba (Sept. 21, 2015). The Treasury Department recently revised its Guidance Regarding Travel Between the United States and Cuba on January 26, 2016. U.S. Dep’t of Treasury, Guidance Regarding Travel Between the United States and Cuba (Jan. 26, 2016), https://www.treasury.gov/resource-center/sanctions/Programs/Documents/guidance_cuba_travel.pdf.
[49] Exec. Order No. 13,695, 80 Fed. Reg. 30,331 (May 28, 2015).
[52] Office of Foreign Assets Control, General License No. 6: Noncommercial, Personal Remittances Authorized (Jan. 30, 2015), available at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/eo13685_gl_6.pdf.
[56] Office of Foreign Assets Control, General License No. 7: Operation of Accounts Authorized (Jan. 30, 2015), available at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/eo13685_gl_7.pdf.
[58] Office of Foreign Assets Control, General License No. 8: Transactions Related to Telecommunications and Mail Authorized (Jan. 30, 2015), available at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/eo13685_gl_8.pdf.
[61] Office of Foreign Assets Control, General License No. 9: Exportation of Certain Services and Software Incident to Internet-Based Communications Authorized (May 22, 2015), available at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/ukraine_gl_9.pdf.
[65] Id. at paragraph (d)(2)-(4).
[67] Office of Foreign Assets Control, New and Revised Frequently Asked Questions (FAQs) Regarding Ukraine-related Sanctions (May 7, 2015), available at https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20150507.aspx.
[68] Office of Foreign Assets Control, Frequently Asked Questions and Answers, Question 395, https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#395 (last updated May 7, 2015) [hereinafter "OFAC FAQ"].
[71] OFAC FAQ, Question 419, https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#419.
[75] OFAC FAQ, Question 453, https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#453.
[77] OFAC FAQ, Question 454, https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#ukraine.
[79] Office of Foreign Assets Control, Ukraine-related Designations, Specially Designated Nationals List Update (Mar. 11, 2015), available at https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20150311.aspx.
[80] U.S. Department of the Treasury, Treasury Announces New Designations of Ukrainian Separatists and their Russian Supporters (Mar. 11, 2015), available at https://www.treasury.gov/press-center/press-releases/Pages/jl9993.aspx.
[83] Office of Foreign Assets Control, Ukraine-related Designations; Sectoral Sanctions Identifications; Cote d’Ivoire Designation Removals; Issuance of an Important Crimea Sanctions Advisory (July 30, 2015), available at https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20150730.aspx.
[84] U.S. Department of the Treasury, Treasury Sanctions Individuals and Entities Involved in Sanctions Evasion Related to Russia and Ukraine (July 30, 2015), available at https://www.treasury.gov/press-center/press-releases/Pages/jl0133.aspx.
[86] Office of Foreign Assets Control, Crimea Sanctions Advisory, Obfuscation of Critical Information in Financial and Trade Transactions Involving the Crimea Region of Ukraine (July 30, 2015), available at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/crimea_advisory.pdf.
[90] Office of Foreign Assets Control, Burma Sanctions: Overview of Sanctions, https://www.treasury.gov/resource-center/sanctions/Programs/pages/burma.aspx (Sept. 9, 2015).
[92] Office of Foreign Assets Control, Frequently Asked Questions and Answers, Question 268, https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#burma (last updated May 22, 2015)
[93] Id.; White House Press Release, Fact Sheet: U.S. Assistance to Burma, https://www.whitehouse.gov/the-press-office/2014/11/13/fact-sheet-us-assistance-burma (Nov. 13, 2014).
[94] Myanmar’s 2015 landmark elections explained, BBC News (Dec. 3, 2015), available at http://www.bbc.com/news/world-asia-33547036.
[98] Office of Foreign Assets Control, General License No. 20: Certain Transactions Incident to Exportations to or from Burma (Dec. 7, 2015), available at https://www.treasury.gov/resource-center/sanctions/Programs/pages/burma.aspx.
[100] Office of Foreign Assets Control, Specially Designated Nationals List Update: Burma Designation Removals; Balkans Designation Removals, available at https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20150709.aspx (July 9, 2015); Office of Foreign Assets Control, Specially Designated Nationals List Update: Burma Designation Removals, available at https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20150423.aspx (Apr. 23, 2015).
[101] Iran Nuclear Agreement Review Act of 2015 ("INARA"), Pub. L. No. 114-17, 129 Stat. 201 (2015).
[102] INARA adds a section titled "Congressional Review and Oversight of Agreements with Iran" into the subchapter on "International Activities" in the Atomic Energy Act of 1954, 42 U.S.C. §§ 2011, et seq.
[103] U.S. House passes Iran nuclear review legislation, Reuters (May 14, 2015), available at http://www.reuters.com/article/us-iran-nuclear-usa-idUSKBN0NZ29M20150514.
[104] INARA, sec. 2, § 135(a)(1).
[107] Id. §§ 135(b)(3)–(5), (c)(2)(A)–(C).
[108] The INARA does not address what would occur upon a congressional override of the President’s veto.
[112] U.S. House passes Iran nuclear review legislation, Reuters (May 14, 2015), available at http://www.reuters.com/article/us-iran-nuclear-usa-idUSKBN0NZ29M20150514.
[113] S. Res. 148, 114th Cong. (2015) (enacted).
[117] Id.; The Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010, Pub. L. No. 111-195 (2010).
[118] GOP Letter on Iran Nuclear Talks Draws Obama Rebuke, Wall Street Journal (Mar. 9, 2015), available at http://www.wsj.com/articles/gop-senators-warn-iranian-leaders-on-nuclear-deal-1425911870.
[119] Global Magnitsky Human Rights Accountability Act of 2015, S. 284, 114th Cong. § 3 (2015).
[120] S. 284: Global Magnitsky Human Rights Accountability Act, GovTrack.us (https://www.govtrack.us/congress/bills/114/s284) (last visited Feb. 1, 2016).
[127] See Joseph K. Grieboski, Global Magnitsky Act is a human rights paradigm shift, TheHill.com (Sept. 10, 2015) available at http://thehill.com/blogs/pundits-blog/international/252636-global-magnitsky-act-is-a-human-rights-paradigm-shift.
[128] Exec. Order No. 13,694, 80 Fed. Reg. 18,077 (Apr. 2, 2015).
[129] OFAC, Frequently Asked Questions and Answers, Question 444, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#cyber (last updated May 22, 2015).
[131] Cuban Assets Control Regulations, Final Rule, 80 Fed. Reg. 2,291 (Jan. 16, 2015).
[132] Cuban Assets Control Regulations, Final Rule, 80 Fed. Reg. 34,053 (June 15, 2015).
[133] Cuban Assets Control Regulations, Final Rule, 80 Fed. Reg. 56,915 (Sept. 21, 2015).
[134] Sudanese Sanctions Regulations, Final Rule, 80 Fed. Reg. 8,531 (Feb. 18, 2015).
[135] Syrian Sanctions Regulations, Final Rule, 80 Fed. Reg. 19,532 (Apr. 13, 2015).
[136] Venezuela Sanctions Regulations, Final Rule, 80 Fed. Reg. 39,676 (July 10, 2015).
[137] Office of Foreign Assets Control, General License 6: General License with Respect to Noncommercial, Personal Remittances Authorized (January 30, 2015), available at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/eo13685_gl_6.pdf.
[138] Id. at paragraph (a)(1).
[140] Id. at paragraph (a)(1).
[141] Id. at paragraph (a)(2).
[142] Office of Foreign Assets Control, General License 7: General License with Respect to Operation of Accounts Authorized (January 30, 2015), available at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/eo13685_gl_7.pdf.
[144] Office of Foreign Assets Control, General License 8: General License with Respect to Transactions Related to Telecommunications and Mail Authorized (January 30, 2015), available at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/eo13685_gl_8.pdf.
[145] Id. at paragraph (a)(1).
[146] Id. at paragraph (a)(2).
[148] Office of Foreign Assets Control, Publication of Sudan General License – Related to Personal Communications (February 18, 2015), available at https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-03330.pdf.
[150] 31 C.F.R. pt. 538.533; 31 C.F.R. Part 560.540.
[154] 31 C.F.R. pt. 558.533(a)(1)-(3).
[155] 31 C.F.R. pt. 538.533(a)(2)(ii), (a)(2)(iii), (a)(3)(ii) and (a)(3)(iii).
[156] 31 C.F.R. pt. 538.533(a)(5).
[157] 31 C.F.R. pt. 538.533(a)(6).
[158] 31 C.F.R. pt. 542.532(a).
[159] Id. at pts. (a)(1)-(a)(7).
[161] Office of Foreign Assets Control, General License 9: General License with Respect to Exportation of Certain Services and Software Incident to Internet-Based Communications Authorized (May 22, 2015), available at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/ukraine_gl_9.pdf.
[162] Id. at paragraph (a).
[163] Id. at paragraph (b).
[164] Id. at paragraph (c).
[165] Id. at paragraph (d).
[166] Office of Foreign Assets Control, Publication of Belarus General License – with Respect to Entities Blocked Pursuant to Executed Order 13405 (October 30, 2015), available at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/belarus_gl2.pdf.
[170] Office of Foreign Assets Control, Publication of Iranian General License – with Respect to List of Medical Supplies (November 2, 2015), available at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/iran_gl_med_supplies.pdf.
[171] Office of Foreign Assets Control, Publication of Burmese General License – with Respect to Certain Transactions Incident to Exportations to or from Burma (December 7, 2015), available at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/burma_gl20.pdf.
[174] Office of Foreign Asset Control, General Questions, Question 10, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_general.aspx#basic (last updated Jan. 15, 2015).
[175] OFAC General Questions, Questions 10, 11, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_general.aspx#basic (Jan. 15, 2015).
[176] OFAC General Questions, Question 91, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_general.aspx#basic (Jan. 15, 2015).
[177] OFAC General Questions, Question 92, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_general.aspx#basic (Apr. 21, 2015).
[178] OFAC General Questions, Question 70, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_general.aspx#basic (Jan. 30, 2015).
[179] OFAC General Questions, Question 71, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_general.aspx#basic (Jan. 30, 2015).
[180] OFAC FAQs: Sanctions Compliance, Question 5, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#match (Jan. 30, 2015).
[181] OFAC FAQs: Sanctions Compliance, Question 27, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#match (Jan. 30, 2015); see also OFAC FAQs: Sanctions Compliance, Question 31, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#match (Jan. 30, 2015)
[182] OFAC FAQs: Sanctions Compliance, Question 28, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#match (Jan. 30, 2015).
[183] OFAC FAQs: Sanctions Compliance, Question 29, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#match (Jan. 30, 2015).
[184] OFAC FAQs: Sanctions Compliance, Question 35, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#match (Jan. 30, 2015).
[185] OFAC FAQs: Sanctions Compliance, Question 41, https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#match (Mar. 16, 2015).
[186] OFAC FAQs: Sanctions Compliance, Question 36, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#match (Jan. 15, 2015).
[187] OFAC FAQs: Sanctions Compliance, Question 48, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#match (Jan. 30, 2015).
[188] OFAC FAQs: Sanctions Compliance, Question 53, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#match (Jan. 15, 2015).
[189] OFAC FAQs: Sanctions Compliance, Question 72, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#match (Jan. 15, 2015).
[190] OFAC FAQs: Sanctions Compliance, Question 64, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#match (Jan. 30, 2015).
[191] OFAC FAQs: Sanctions Compliance, Question 65, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#match (Jan. 30, 2015).
[192] OFAC FAQs: Sanctions Compliance, Question 66, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#match (Jan. 30, 2015).
[193] OFAC FAQs: Sanctions Compliance, Question 116, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#match (Jan. 15, 2015).
[194] OFAC FAQs: Sanctions Compliance, Question 116, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#match (Jan. 15, 2015).
[195] OFAC FAQs: Sanctions Lists and Files, Question 56, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_lists.aspx (Jan. 30, 2015).
[196] OFAC FAQs: Sanctions Lists and Files, Question 56, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_lists.aspx (Jan. 30, 2015).
[197] OFAC FAQs: Sanctions Lists and Files, Question 88, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_lists.aspx (Jan. 30, 2015).
[198] OFAC FAQs: Sanctions Lists and Files, Question 123, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_lists.aspx (Jan. 30, 2015).
[199] U.S. Department of the Treasury, Frequently Asked Question on Advanced Sanctions List Standard available at https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/advanced_faq.aspx (July 12, 2015).
[200] OFAC FAQs: Other Sanctions Programs, Question 444, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx (Apr. 1, 2015).
[201] OFAC FAQs: Other Sanctions Programs, Question 445, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx (Apr. 1, 2015).
[202] OFAC FAQs: Other Sanctions Programs, Question 446, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx (Apr. 1, 2015).
[203] OFAC FAQs: Other Sanctions Programs, Question 447, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx (Apr. 1, 2015).
[204] OFAC FAQs: Other Sanctions Programs, Questions 448, 449, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx (Apr. 1, 2015).
[205] OFAC FAQs: Other Sanctions Programs, Questions 450, 449, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx (Apr. 1, 2015).
[206] 31 C.F.R. §§ 538.533(a)(1)-(2)
[207] 31 C.F.R. §§ 538.533(a)(1)-(3)
[208] 31 C.F.R. §§ 538.533(a)(2)(ii), (a)(2)(iii), (a)(3)(ii), (a)(3)(iii).
[209] 31 C.F.R. § 538.533(a)(6).
[210] OFAC FAQs: Other Sanctions Programs, Question 432, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx (Apr. 1, 2015).
[211] OFAC FAQs: Other Sanctions Programs, Question 57, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx (Apr. 1, 2015).
[212] OFAC General Questions, Question 97, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_general.aspx#basic (Mar. 16, 2015).
[213] OFAC General Questions, Question 100, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_general.aspx#basic (Mar. 16, 2015).
[214] OFAC FAQs: Other Sanctions Programs, Question 225, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx.
[215] OFAC FAQs: Other Sanctions Programs, Questions 225, 227, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx.
[216] OFAC FAQs: Other Sanctions Programs, Questions 228, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx.
[217] OFAC FAQs: Other Sanctions Programs, Questions 226, 229, 231, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx.
[218] OFAC FAQs: Other Sanctions Programs, Question 230, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx.
[219] Office of Foreign Asset Control, False Hit Lists Guidance, available at https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Documents/false_hit.pdf (Oct. 21, 2015)
[221] U.S. Department of the Treasury, Fact Sheet: Additional Treasury Actions to Rein in Corporate Tax Inversions, available at https://www.treasury.gov/press-center/press-releases/Pages/jl0281.aspx (Nov. 11, 2015).
[226] Office of Foreign Assets Control, Counter Terrorism Designations; Counter Terrorism Designations Removals (Feb. 26, 2015), available at https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20150226.aspx.
[227] U.S. Department of the Treasury, Treasury Targets Africa-Based Hizballah Support Network (Feb. 26, 2015), available at https://www.treasury.gov/press-center/press-releases/Pages/jl9982.aspx.
[229] Office of Foreign Assets Control, Issuance of a New Venezuela-related Executive Order; Venezuela-related Designations (Mar. 20, 2015), available at https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20150309.aspx.
[230] U.S. Department of the Treasury, Statement of Secretary Lew on the Venezuela Executive Order (Mar. 9, 2015), available at https://www.treasury.gov/press-center/press-releases/Pages/jl9991.aspx.
[231] Office of Foreign Assets Control, Kingpin Act Designations; Kingpin Act Designations Removals (May 22, 2015), available at https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20150522.aspx.
[232] U.S. Department of the Treasury, Treasury Sanctions Guarin Loaiza Drug Trafficking Organization (May 22, 2015), available at https://www.treasury.gov/press-center/press-releases/Pages/jl10062.aspx.
[233] Office of Foreign Assets Control, Kingpin Act Designations (Aug. 19, 2015), available at https://www.treasury.gov/resource-center/sanctions/sxOFAC-Enforcement/Pages/20150819.aspx.
[234] U.S. Department of the Treasury, Treasury Sanctions Business Network of the Los Cuinis Drug Trafficking Organization (Aug. 19, 2015), available at https://www.treasury.gov/press-center/press-releases/Pages/jl0148.aspx.
[236] Office of Foreign Assets Control, Central African Republic Designations (Aug. 21, 2015), available at https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20150821.aspx.
[237] U.S. Department of Treasury, Treasury Sanctions Individuals and Entities Fueling Violence in the Central African Republic (Aug. 21, 2015), available at https://www.treasury.gov/press-center/press-releases/Pages/jl0150.aspx.
[239] Office of Foreign Assets Control, Counter Terrorism Designations (Sept. 29, 2015), available at https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20150929.aspx.
[240] U.S. Department of the Treasury, Treasury Sanctions Major Islamic State of Iraq and the Levant Leaders, Financial Figures, Facilitators, and Supports (Sept. 29, 2015), available at https://www.treasury.gov/press-center/press-releases/Pages/jl0188.aspx.
[242] Office of Foreign Assets Control, Kingpin Act Designations (Oct. 1, 2015), available at https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20151001.aspx.
[243] U.S. Department of the Treasury, Treasury Sanctions Maritime Network Tied to Joumaa Criminal Organization (Oct. 1, 2015), available at https://www.treasury.gov/press-center/press-releases/Pages/jl0196.aspx.
[245] Office of Foreign Assets Control, North Korea Designations; Non-proliferation Designations (Dec. 8, 2015), available at https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20151208_33.aspx.
[246] U.S. Department of the Treasury, Treasury Targets North Korea’s Global Weapons Proliferation Network (Dec. 8, 2015), available at https://www.treasury.gov/press-center/press-releases/Pages/jl0295.aspx.
[248] Office of Foreign Assets Control, Terrorist Assets Report Calendar Year 2014 (May 6, 2015), available at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/tar2014.pdf.
[249] Office of Foreign Assets Control, Enforcement Information for March 12, 2015 (Mar. 12, 2015), available at https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20150312_commerzbank.pdf.
[250] Office of Foreign Assets Control, Enforcement Information for March 12, 2015 (Mar. 12, 2015), available at https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20150312_commerzbank.pdf.
[251] Office of Foreign Assets Control, Enforcement Information for March 25, 2015 (Mar. 25, 2015), available at https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20150325_lrd.pdf.
[252] Office of Foreign Assets Control, Enforcement Information for June 19, 2015 (Jun. 19, 2015), available at https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20150619_jbt.pdf.
[253] Office of Foreign Assets Control, Enforcement Information for August 6, 2015 (Aug. 6, 2015), available at https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20150806_navigators.pdf.
[254] Office of Foreign Assets Control, Enforcement Information for August 7, 2015 (Aug. 7, 2015), available at https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20150807_schlumberger.pdf.
[255] Office of Foreign Assets Control, Enforcement Information for August 27, 2015 (Aug. 27, 2015), available at https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20150827_ubs.pdf.
[256] Office of Foreign Assets Control, Enforcement Information for October 20, 2015 (Oct. 20, 2015), available at https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20151020_cacib.pdf.
[257] In the Matter of Commerzbank AG, Consent Order (Mar. 12, 2015), available at http://www.dfs.ny.gov/about/ea/ea150312.pdf.
[258] In the Matter of Credit Agricole SA, Consent Order (Oct. 20, 2015), available at http://www.dfs.ny.gov/about/ea/ea151019.pdf.
[259] In the Matter of Deutsche Bank AG, Consent Order (Nov. 3, 2015), available at http://www.dfs.ny.gov/about/ea/ea151103.pdf; In the Matter of Deutsche Bank AG, Order to Cease and Desist (Nov. 3, 2015), available at http://www.federalreserve.gov/newsevents/press/enforcement/enf20151104a1.pdf.
[260] New York State Department of Financial Services, Press Release, NYDFS Announces Deutsche Bank to Pay $258 Million, Install Independent Monitor, Terminate Employees for Transactions on Behalf of Iran, Syria, Sudan, Other Sanctioned Entities (Nov. 4, 2015), available at http://www.dfs.ny.gov/about/press/pr1511041.htm.
[263] See Council Implementing Regulation (EU) 2015/1322 of 31 July 2015 implementing Article 11(1) and (4) of Regulation (EU) No 753/2011 concerning restrictive measures directed against certain individuals, groups, undertakings and entities in view of the situation in Afghanistan, OJ L 206, 1.8.2015, pp. 1–3.
[264] Council Implementing Regulation (EU) 2015/2043 of 16 November 2015 implementing Article 11(1) and (4) of Regulation (EU) No 753/2011 concerning restrictive measures directed against certain individuals, groups, undertakings and entities in view of the situation in Afghanistan, OJ L 300, 17.11.2015, pp. 1–2.
[265] See http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.C_.2015.090.01.0001.01.ENG for the EU’s notice informing the individual.
[266] The deletions were made by Council Implementing Decision (CFSP) 2015/1335 implementing Council Decision 2012/642/CFSP.
[267] See Council Regulation (EU) 2015/1948 of 29 October 2015 amending Regulation (EC) No 765/2006 concerning restrictive measures in respect of Belarus, OJ L 284, 30.10.2015, pp. 62–70.
[268] Case T-276/12 – Chyzh and Others v Council, Judgement of the General Court, 6 October 2015.
[269] The extension is brought into force by Council Decision (CFSP) 2015/487 which amends Council Decision 2011/173/CFSP.
[270] See Council Decision (CFSP) 2015/1763 of 1 October 2015 concerning restrictive measures in view of the situation in Burundi, OJ L 257, 2.10.2015, pp. 37–41.
[271] See Council Regulation (EU) 2015/734 amending Council Regulation (EU) 224/2014 and Council Decision (CFSP) 2015/739, amending Council Decision 2013/798/CFSP.
[272] See Council Implementing Regulation (EU) 2015/324 implementing Article 17(3) of Council Regulation (EU) 224/2014 and Council Implementing Decision (CFSP) 2015/336 implementing Council Decision 2013/798/CFSP.
[273] See UNSC Resolution 2134 (2014), and Council Implementing Regulation (EU) 2015/2454 of 23 December 2015 implementing Article 17(1) and (3) of Regulation (EU) No 224/2014 concerning restrictive measures in view of the situation in the Central African Republic, OJ L 339, 24.12.2015, pp. 36–39.
[274] See Council Regulation (EU) 2015/192 amending Council Regulation (EC) No 174/2005 and Council Decision (CFSP) 2015/202 amending Council Decision 2010/656/CFSP.
[275] See Council Implementing Regulation (EU) 2015/109 (which amends Council Regulation (EC) No 560/2005) and Council Implementing Decision (CFSP) 2015/118 (which amends Council Decision 2010/656/CFSP).
[276] See, Council Implementing Regulation (EU) 2015/615 implementing Council Regulation (EC) 560/2005 and Council Implementing Decision (CFSP) 2015/621implementing Council Decision 2010/656/CFSP.
[277] Case T-406/13 Gossio v Council, Judgement of the General Court, of 14 January 2015.
[278] See UN Security Council Resolution 2198 (2015).
[279] See, Council Regulation (EU) 2015/613 amending Council Regulation (EC) 1183/2005 and repealing Council Regulation (EC) 889/2005 and Council Decision (CFSP) 2015/620 amending Council Decision 2010/788/CFSP.
[280] See Council Decision (CFSP) 2015/486 amending Council Decision 2011/172/CFSP.
[281] See Council Decision (CFSP) 2015/1923 of 26 October 2015 amending Decision 2010/638/CFSP concerning restrictive measures against the Republic of Guinea, OJ L 281, 27.10.2015, pp. 9–9.
[282] The Guinea-Bissau sanctions regime was originally imposed by Council Regulation (EU) 377/2012 and Council Decision 2012/285/CFSP. See the Notice for the attention of the persons to whom restrictive measures provided for in Council Decision 2012/285/CFSP and Council Regulation (EU) No 377/2012 concerning restrictive measures directed against certain persons, entities and bodies threatening the peace, security or stability of the Republic of Guinea-Bissau apply,
OJ C 194, 12.6.2015, pp. 2–2.
[283] See http://unscr.com/en/resolutions/doc/2174
[284] Council Implementing Regulation (EU) 2015/376, implementing Article 16(2) of Council Regulation (EU) 204/2011 and Council Decision (CFSP) 2015/382 amending Council Decision 2011/137/CFSP.
[285] See Resolution 2213 at http://www.un.org/en/ga/search/view_doc.asp?symbol=S/RES/2213%282015%29
[286] See Council Implementing Regulation (EU) 2015/376 implementing Article 16(2) of Council Regulation (EU) 204/2011 and Council Decision (CFSP) 2015/382 amending Council Decision 2011/137/CFSP.
[287] See Council Implementing Regulation (EU) 2015/814 implementing Council Regulation (EU) 204/2011.
[288] See Council Regulation (EU) 2015/1324 of 31 July 2015 amending Regulation (EU) No 204/2011 concerning restrictive measures in view of the situation in Libya, OJ L 206, 1.8.2015, pp. 10–11.
[289] Council Regulation (EU) 2016/44 of 18 January 2016 concerning restrictive measures in view of the situation in Libya and repealing Regulation (EU) No 204/2011, OJ L 12, 19.1.2016, pp. 1–26.
[290] See Council Decision (CFSP) 2015/1925 of 26 October 2015 amending Decision 2010/573/CFSP concerning restrictive measures against the leadership of the Transnistrian region of the Republic of Moldova, OJ L 281, 27.10.2015, pp 12–12.
[291] See Council Decision (CFSP) 2015/666 amending Council Decision 2013/184/CFSP.
[292] See Commission Implementing Regulation (EU) 2015/1062 amending Council Regulation (EC) 329/2007.
[293] See UNSC Resolution 2184 (2014).
[294] See Council Decision (CFSP) 2015/335 amending Council Decision 2010/231/CFSP.
[295] See Council Implementing Regulation (EU) 2015/325 implementing Article 13 of Council Regulation (EU) 356/2010 and Council Implementing Decision (CFSP) 2015/337 implementing Council Decision 2010/231/CFSP, and See Council Implementing Regulation (EU) 2015/2044 of 16 November 2015 implementing Article 13 of Regulation (EU) No 356/2010 imposing certain specific restrictive measures directed against certain natural or legal persons, entities or bodies, in view of the situation in Somalia, OJ L 300, 17.11.2015, pp. 3–4.
[296] See Council Regulation (EU) 2015/735 repealing Council Regulation 748/2014 and Council Decision (CFSP) 2015/740 repealing Council Decision 2014/449/CFSP.
[297] See Council Implementing Regulation (EU) 2015/375 implementing Council Regulation (EU) 36/2012 and Council Implementing Decision (CFSP) 2015/383 implementing Council Decision 2013/255/CFSP.
[298] See the Annexes to Council Implementing Regulation (EU) 793/2014 and Council Implementing Decision 2014/488/CFSP.
[299] See Council Implementing Regulation (EU) 2015/780 implementing Council Regulation (EU) 36/2012 and Council Implementing Decision (CFSP) 2015/784 implementing Council Decision 2013/255/CFSP
[300] See Council Regulation (EU) 2015/827 amending Council Regulation (EU) 36/2012, Council Implementing Regulation (EU) 2015/828 implementing Council Regulation (EU) 36/2012, and Council Decision (CFSP) 2015/837 amending Council Decision 2013/255/CFSP.
[301] See Council Implementing Regulation (EU) 2015/961 implementing Council Regulation 36/2012 and Council Implementing Decision (CFSP) 2015/973 implementing Council Decision 2013/255/CFSP
[302] See Article 1 of Council Regulation (EU) 2015/1828 of 12 October 2015 amending Regulation (EU) No 36/2012 concerning restrictive measures in view of the situation in Syria, OJ L 266, 13.10.2015, pp. 1–2.
[303] See Council Implementing Regulation (EU) 2015/2350 of 16 December 2015 implementing Regulation (EU) No 36/2012 concerning restrictive measures in view of the situation in Syria,
OJ L 331, 17.12.2015, pp. 1–2.
[304] See Council Implementing Regulation (EU) 2015/147 amends Council Regulation (EU) 101/2011) and Council Decision (CFSP) 2015/157 amends Council Decision 2011/72/CFSP.
[305] See Council Implementing Regulation (EU) 2016/111 of 28 January 2016 implementing Regulation (EU) No 101/2011 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Tunisia, OJ L 23, 29.1.2016, pp. 1–13.
[306] See UN Security Council Resolution 2216.
[307] See Council Regulation (EU) 2015/878 amending Council Regulation (EU) 1352/2014, Council Decision 2015/882 amending Council Decision 2014/932/CFSP, and Council Implementing Regulation (EU) 2015/879 implementing Council Regulation (EU) 1352/2014.
[308] See Council Regulation (EU) 2015/1919 of 26 October 2015 amending Regulation (EC) No 314/2004 concerning certain restrictive measures in respect of Zimbabwe, OJ L 281, 27.10.2015, pp. 1–2.
[309] See the General Court’s Press Release, "New procedural rules adopted by the General Court", of 19 June 2015: http://curia.europa.eu/jcms/upload/docs/application/pdf/2015-06/cp150073en.pdf.
[310] The UK have fought heavily against the implementation of Article 105 due to amplified concerns that the holder of the information could not withdraw the submitted materials after a reasonable period of time, with no fail-safe for proving ‘inadvertent disclosure‘ in Court orders and final Judgments.
[311] Case C-415/05 P, Kadi and Al Barakaat International Foundation v Council and Commission, Judgment of the European Court of Justice, September 3, 2008.
[312] Case T‑276/12, Chyzh and Others v Council, Judgement of the European Court of Justice, 6 October 2015.
[313] Case C-220/14 P, Ezz & Ors v Council, Judgment of the European Court of Justice, 5 March 2015.
[314] Case T-158/13, Iranian Aluminium Co v Council, Judgment of the General Court, 15 September 2015.
[315] Case C-584/10 P, C-593/10 P and C-595/10 P, Commission and Others v Kadi, Judgment of the European Court of Justice, 18 July 2013, at paragraphs 121 to 123.
[316] Case T-5/13, Iran Liquefied Natural Gas v Council, Judgment of the General Court, 18 September 2015.
[317] Joined Cases T-156/13 and T-373/14, Petro Suisse Intertrade v Council, Judgment of the General Court, 18 September 2015; Case T-428/13 Iranian Oil Company UK Ltd, Judgment of the General Court, 18 September; and Case T-577/12 – NIOC and Others v Council. Judgement of the General Court, 4 September 2015. An appeal is pending before the European Court of Justice in Case C-595/15 P
[318] Case T-121/13 – Oil Pension Fund Investment Company v Council, Judgment of the General Court, 18 September 2015.
[319] Case T-509/11 Mohammad Makhlouf v Council, Judgment of the General Court, 21 January 2015.
[320] Case T-443/13, Makhlouf v Council, Judgement of the General Court, 21 January 2016.
[321] Case C‑605/13 P, Anbouba v Council, Judgment of the European Court of Justice, 21 April 2015; and Case C‑630/13 P, Anbouba v Council, Judgment of the European Court of Justice, 21 April 2015.
[322] Case T-153/15 R, Hamcho v Council, Judgment of the General Court, 20 May 2015; ase T-154/15 R, Jaber v Council, Judgment of the General Court, 20 May 2015; and Case T-155/15 R, Kaddour v Council, Judgment of the General Court, 20 May 2015.
[323] Case T‑190/12, Tomana & Ors v Council & Commission, Judgment of 22 April 2015.
[324] Council of the European Union, "Update of the EU Best Practices for the effective implementation of restrictive measures", 10254/15, 24 June 2015: http://data.consilium.europa.eu/doc/document/ST-10254-2015-INIT/en/pdf.
[325] See the 2008 EU Best Practices for the effective implementation of restrictive measures at:http://data.consilium.europa.eu/doc/document/ST-8666-2008-REV-1/en/pdf.
[326] See the "Guidelines on implementation and evaluation of restrictive measures (sanctions) in the framework of the EU Common Foreign and Security Policy", 9068/13, 30 April 2013: http://data.consilium.europa.eu/doc/document/ST-9068-2013-INIT/en/pdf.
[327] Dietmar Seher, Wie sich der Iran weiter illegal Rüstungsgüter beschafft, Der Westen Dec. 26, 2014, available at http://www.derwesten.de/politik/raketen-bausatz-fuer-teheran-id10178422.html.
[328] Standard Chartered shares sink on shock quarterly loss, BBC News, Nov. 3, 2015, available at http://www.bbc.co.uk/news/business-34707288.
[329] Press Release, Bordeaux Services (Guernsey) Limited, Peter Gordon Radford, Neal Anthony Meader, Geoffrey Robert Tostevin, Jul. 28, 2015, available at http://www.gfsc.gg/The-Commission/News/Pages/Bordeaux-Services-(Guernsey)-Limited-(%E2%80%9CBordeaux%E2%80%9D),-.aspx.
The following Gibson Dunn lawyers assisted in preparing this client alert: Judith Alison Lee, Mark Handley, Adam Smith, David Wolber, Nicholas Klein, Katy Sharp, William Hart, Attila Borsos, Helen Galloway, Peter C. Fulweiler, Jr., Taylor Spragens, Carolyn Small, Scott Richardson, Elizabeth Niles, Shannon Han and Charles Clarke.
Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding the above developments. Please contact the Gibson Dunn lawyer with whom you usually work, or any of the following members of the firm’s International Trade Group:
United States:
Judith A. Lee – Co-Chair, Washington, D.C. (+1 202-887-3591, [email protected])
Ronald Kirk – Co-Chair, Dallas (+1 214-698-3295, [email protected])
Jose W. Fernandez – New York (+1 212-351-2376, [email protected])
Marcellus A. McRae – Los Angeles (+1 213-229-7675, [email protected])
Daniel P. Chung – Washington, D.C. (+1 202-887-3729, [email protected])
Adam M. Smith – Washington, D.C. (+1 202-887-3547, [email protected])
David A. Wolber – Washington, D.C. (+1 202-887-3727, [email protected])
Mehrnoosh Aryanpour* – Washington, D.C. (+1 202-955-8619, [email protected])
Nicholas A. Klein – Denver (+1 303-298-5795, [email protected])
Lindsay M. Paulin – Washington, D.C. (+1 202-887-3701, [email protected])
Asia:
Robert S. Pé – Hong Kong (+852 2214 3768, [email protected])
Europe:
Peter Alexiadis – Brussels (+32 2 554 72 00, [email protected])
Attila Borsos – Brussels (+32 2 554 72 10, [email protected])
Patrick Doris – London (+44 (0)207 071 4276, [email protected])
Penny Madden – London (+44 (0)20 7071 4226, [email protected])
Mark Handley – London (+44 (0)207 071 4277, [email protected])
* Ms. Aryanpour is not yet admitted to practice in the District of Columbia and currently practices under the supervision of the Principals of the Firm.
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