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March 7, 2017 |
Analysis of March 6, 2017 Executive Order on Immigration

Gibson Dunn previously issued several client alerts regarding President Trump’s January 27, 2017, Executive Order restricting entry into the United States for individuals from certain nations and making other immigration-related policy changes. This client alert addresses the replacement Executive Order entitled "Protecting the Nation from Foreign Terrorist Entry into the United States," signed on March 6, 2017.[1]  It also addresses a recent announcement suspending expedited processing of H-1B visas. I.          Overview of March 6, 2017 Replacement Executive Order The new order is in some regards narrower than the prior order, and its scope appears to be more clearly defined.  However, there is still some ambiguity as to the process for obtaining waivers, and the order continues to provide for the possible extension or expansion of the travel ban.  The order and the accompanying official statements also include considerably more material seeking to justify the provisions than contained in the prior order.[2] The Department of Homeland Security has released detailed Q&As[3] and a fact sheet regarding the new order;[4] additional guidance from the Department of State is expected.[5]  Key features of the new order include: Effective Date.  The effective date of the order is deferred for 10 days; the order goes into effect at 12:01 am ET on March 16, 2017.  Sec. 14. Status of Prior Order.  The new order fully rescinds and replaces the January 27 order.  Sec. 13. Travel Ban For 6 Countries.  Like the prior order, the new order suspends for 90 days entry for nationals of a number of Muslim-majority countries: Iran, Libya, Somalia, Sudan, Syria, and Yemen.  Sec. 1(e). Exclusions and Exceptions to Travel Ban.  The travel ban and related provisions have been narrowed and clarified in various respects: Iraq.  Iraq is no longer identified among the affected countries.  The other six nations designated in the original order are still covered.  However, the order specifically calls for additional review when an Iraqi national who holds a visa applies for "admission," meaning upon arrival to the U.S.  Secs. 1(g), 4.   Lawful Permanent Residents.  Lawful permanent residents (green-card holders) are explicitly excluded from the order.  Sec. 3(b)(i). Current Visa Holders.  Existing visas are not revoked by the order, and they can be used during the 90-day period otherwise covered by the order by the visa-holders under their existing terms, regardless of whether the visa-holder has previously been to the United States or is arriving for the first time.  Those who had a visa physically marked as cancelled as result of the January order are also entitled to admission.  Secs. 3(a), 12(c)-(d); Q&As 3, 5, 7. Dual-Citizens.  Dual citizens of one of the designated nations are also explicitly excluded from the order provided that they are travelling on a passport of a country other than the six designated.  For example, a dual-citizen of Somalia and the United Kingdom would still be eligible for admission to the United States if travelling on his U.K. passport.  Sec. 3(b)(iv). Refugees, Asylees, and Convention Against Torture.  Foreign nationals who are granted asylum status prior to the March 16 effective date, refugees already admitted, and those granted withholding of removal, advance parole, or protection under the Convention Against Torture are not barred from entry into the U.S. Sec. 3(b)(vi).  Note, however, that under existing law, individuals with those statuses may need certain advance permission or authorization if they wish to leave and return to the United States without jeopardizing that status. Certain Diplomatic and Related Visas.  As in the January order, diplomatic and diplomatic-type visas, NATO visas, C-2 (United Nations) visas, and G-1 through G-4 visas are excluded from the order.  Sec. 3(b)(v) Travel Ban Waivers.  The new order provides authority to certain Department of State and Homeland Security officials to grant waivers to the travel ban’s limitations on a case-by-case basis.  The new order identifies nine scenarios in which such treatment "could be appropriate."  These include a variety of hardship scenarios which arose under the January order, such as those needing urgent medical care or those who can document that they have "provided faithful and valuable service" to the United States government (e.g. foreign translators).  Sec. 3(c).  Importantly, these are still case-by-case waivers, not automatic exemptions.  It is also not yet clear if individuals seeking waivers will be allowed to board flights to the U.S. Suspension of Visa Interview Waiver Program.  As before, the Visa Interview Waiver program (often used by repeat business travelers from certain nations) is suspended.  Sec. 9. Suspension of Refugee Admission Program.  As in the January order, the Refugee Admission Program is suspended for 120 days, with a cap of 50,000 entrants for the current fiscal year upon resumption.  Sec. 6.  Unlike the January order, the new order does not indefinitely halt refugee admissions from Syria or prioritize religious minorities upon resumption.  The treatment of those already granted refugee status but not yet in the United States is somewhat unclear.  The DHS Q&A says such individuals "whose travel was already formally scheduled by the Department of State … are permitted to travel to the United States and seek admission," and they are covered by the text of the carve-out in Section 3(b)(vi). See Q&A 10.  But the Q&A also says those individuals "are exempt from the Executive Order."  Q&A 27.  Admission thus may require a case-by-case waiver. Possible Expansion and Extension.  Like the prior order, this order requires a global review to identify categories of individuals appropriate for further limitations.  Secs. 2(e)-(f).  Another provision requires re-alignment of any visa reciprocity programs, under which the United States offers visas of similar validity period and type (e.g. multiple-entry) on the basis of those offered to U.S. citizens.  Sec. 10. II.        Impact on Current Litigation There are approximately 20 active lawsuits challenging aspects of the January order.  Additional, key parts of that Order are currently subject to a preliminary injunction issued by the United States District Court for the Western District of Washington.  The Ninth Circuit declined to temporarily stay that injunction pending a fuller appeal.[6]  The Eastern District of Virginia has also issued a preliminary injunction against certain parts of the January order as it applies to Virginia residents and institutions. There are hearings and briefing deadlines scheduled in both the Washington and Ninth Circuit proceedings, as well as in many of the other cases.  Because the new order rescinds the old order, effective March 16, those challenges may become moot, and the Department of Justice has said it will be seeking dismissal.[7]  However, it is highly likely that some of the existing complaints and requests for relief will be amended to challenge the new ban.  New challenges to the newly announced Executive Order are also anticipated.  It is difficult to predict how the courts will approach litigation, either substantively or procedurally.  Given that the new order does not go into effect until March 16, there will be opportunity for more substantive (although expedited) proceedings than was the case with the original order.  Gibson Dunn will continue to monitor challenges for possible impacts on the new order. III.       Issues for Companies to Consider As with the January order, there is no "one size fits all" approach for companies addressing employee and business issues related to the new Executive Order. Accordingly, companies should again evaluate whether they will need to develop strategies to deal with the impact of the replacement Executive Order, both internally and as it relates to potential shareholder and business relations. In the immediate term, companies should consider outreach to their employees, particularly those who are or may be affected by the Executive Order.  Companies should also consider whether plans or policies are needed for travel by executives, employees, or other stakeholders.  In many ways, the new order is clearer than the January order, but as we describe in more detail below it not clear how all aspects of the order will be implemented.  Accordingly, employers may want to consider the following: Outreach to employees who may be affected.  Companies should consider proactively identifying and reaching out to all employees who may be affected.  As noted above, the Executive Order, on its face, applies to both immigrants and non-immigrants from the six covered countries.  Thus, employees traveling for business or leisure may be equally affected.  Note that different employees’ immigration statuses may compel differing guidance on how to approach any issues that arise in the enforcement of the Order. Outreach to employees who may have family members affected.  It is important to remember that some of your employees, even if not directly impacted by the Executive Order, will have family and loved ones who are or may be impacted.  Companies may consider providing counseling and support for employees with these concerns. Communicating with employees.  Companies should consider identifying employees who frequently travel to and from the affected countries or who are visa holders from affected countries, to explain company plans with respect to the Executive Order.  Given issues that arose for travelers in connection with the implementation of the original Executive Order in January, employees from affected countries who are currently outside the United States, but have a legal right to enter, should be advised to stay in communication with individuals in the United States about their travel plans, in the event they have difficulty re-entering the country, and have a plan to obtain appropriate assistance in that event.  Identifying a point of contact.  Consider identifying a contact point for any employee questions or concerns regarding the Executive Order.  Furthermore, ensure that this contact is prepared to field questions from affected or potentially affected employees, to discuss visa renewal or travel to and from the affected countries, and to refer employees with specific issues to the appropriate resources. Communicating with shareholders, business partners and other stakeholders.  Companies should consider whether communications with shareholders, business partners or other stakeholders regarding potential impacts on business as a result of enforcement of the Executive Order are appropriate. Modifying travel and meeting obligations.  Companies should consider modifying (or allowing for employee choice regarding) employee travel obligations, as appropriate to the company’s business needs, to avoid potential difficulties with travel to and from the United States.  Likewise, if companies have board members or executives affected by the Executive Order, or business stakeholders who will not be able to enter the United States due to the Executive Order, consider whether meetings can be conducted remotely or outside the United States.  Companies involved in pending litigation that may require employee travel to the United States should consider seeking the advice of litigation counsel to determine what, if any, notice to the relevant court or parties may be advisable at this stage. Reviewing non-discrimination policies.  Companies may wish to send reminders of applicable equal employment policies.  Many employers included such statements in communications regarding the original Order.  Companies may also wish to consider how their policies apply to employment and hiring decisions in light of travel restrictions.  This list addresses just some of the issues that companies will face in light of the Executive Order.  Gibson, Dunn & Crutcher’s lawyers, including its employment, securities, administrative law, constitutional law, and sanctions teams, are available to assist clients with navigating these and other issues that arise with respect to enforcement of the March 6 Order. IV.       Suspension of Expedited Processing for H-1B Visas On March 3, U.S. Citizen and Immigration Services (USCIS) announced it will suspend "premium processing" of applications for H-1B visas.[8]  This change is effective April 3, 2017, the first date for filing FY18 applications.  The agency says that this is necessary to process back-logged petitions.  It also says that "expedited" processing is still available for applications meeting certain criteria, and subject to "the discretion of office leadership."  Applications that remain eligible for premium processing include those involving:  Severe financial loss to company or ​person​;​ Emergency situation;​ Humanitarian reasons;​ Nonprofit organization whose request is in furtherance of the cultural and social interests of the United States​;​ Department of Defense or ​national ​interest ​​situation; USCIS error; or​ compelling interest of USCIS.​[9] *      *      * Gibson Dunn will continue to monitor these rapidly developing issues closely.    [1]   "Executive Order Protecting The Nation From Foreign Terrorist Entry Into The United States," Mar. 6, 2017, https://www.whitehouse.gov/the-press-office/2017/03/06/executive-order-protecting-nation-foreign-terrorist-entry-united-states.    [2]   See, e.g., Letter from Attorney General and Sec’y of Homeland Security, Mar. 6, 2017, https://www.dhs.gov/sites/default/files/publications/17_0306_S1_DHS-DOJ-POTUS-letter.pdf    [3]   U.S. Dep’t of Homeland Security, "Q&A: Protecting the Nation From Foreign Terrorist Entry To The United States," Mar. 6, 2017, https://www.dhs.gov/news/2017/03/06/qa-protecting-nation-foreign-terrorist-entry-united-states.    [4]   U.S. Dep’t of Homeland Security, "Fact Sheet: Protecting the Nation From Foreign Terrorist Entry To The United States," Mar. 6, 2017, https://www.dhs.gov/news/2017/03/06/fact-sheet-protecting-nation-foreign-terrorist-entry-united-states.    [5]   U.S. Dep’t of State, "Executive Order on Visas," Mar. 6, 2017, https://travel.state.gov/content/travel/en/news/important-announcement.html.    [6]   http://cdn.ca9.uscourts.gov/datastore/general/2017/02/27/17-35105%20-%20Motion%20Denied.pdf; https://cdn.ca9.uscourts.gov/datastore/opinions/2017/02/09/17-35105.pdf.    [7]   http://www.politico.com/story/2017/03/trump-releases-new-travel-ban-executive-order-235720.    [8]   U.S. Citizenship and Immigration Services, "USCIS Will Temporarily Suspend Premium Processing for All H-1B Petitions," Mar. 3, 2017 https://www.uscis.gov/news/alerts/uscis-will-temporarily-suspend-premium-processing-all-h-1b-petitions.    [9]   U.S. Citizenship and Immigration Services, "Expedite Criteria," https://www.uscis.gov/forms/expedite-criteria. Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments.  Please contact the Gibson Dunn lawyer with whom you usually work or any of the following: Theodore J. Boutrous, Jr. – Los Angeles (+1 213-229-7000, tboutrous@gibsondunn.com)Rachel S. Brass – San Francisco (+1 415-393-8293, rbrass@gibsondunn.com)Anne M. Champion – New York (+1 212-351-5361, achampion@gibsondunn.com)Ethan Dettmer – San Francisco (+1 415-393-8292, edettmer@gibsondunn.com) Theane Evangelis – Los Angeles (+1 213-229-7726, tevangelis@gibsondunn.com) Kirsten Galler – Los Angeles (+1 213-229-7681, kgaller@gibsondunn.com) Ronald Kirk – Dallas (+1 214-698-3295, rkirk@gibsondunn.com)Joshua S. Lipshutz – Washington D.C. (+1 202-955-8217, jlipshutz@gibsondunn.com) Katie Marquart, Pro Bono Counsel & Director – New York (+1 212-351-5261, kmarquart@gibsondunn.com) Samuel A. Newman – Los Angeles (+1 213-229-7644, snewman@gibsondunn.com) Jason C. Schwartz – Washington D.C. (+1 202-955-8242, jschwartz@gibsondunn.com) Kahn A. Scolnick – Los Angeles (+1 213-229-7656, kscolnick@gibsondunn.com) © 2017 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

February 10, 2017 |
Ninth Circuit Court of Appeals Issues Opinion Upholding Nationwide TRO of January 27 Immigration-Related Executive Order

On Monday, January 30, 2017, Gibson Dunn issued a client alert regarding President Trump’s January 27 Executive Order restricting entry into the United States for individuals from certain nations, and making other immigration-related policy changes.  On February 1, Gibson Dunn issued an updated client alert, covering subsequent developments relating to the Executive Order including: (1) coverage of dual citizens; (2) provisional revocation of certain visas; and (3) reciprocal policy changes abroad.  This update describes yesterday’s Ninth Circuit decision in State of Washington v. Trump, which denied the Government’s request to stay the nationwide temporary restraining order, as well as other recent developments relating to the various legal challenges to the Executive Order.  On February 10, the Ninth Circuit issued a sua sponte request that the parties brief whether en banc review by the Ninth Circuit is appropriate.  At the same time, news reports indicate that the Trump administration may issue a revised executive order, rather than appeal the decision.[1]  This update also provides considerations for companies and others as they continue to deal with the aftereffects of the Executive Order and the various court challenges to it.  This alert is informational only, and you should, of course, seek legal advice specific to any particular situation. I.      Ninth Circuit Decision in State of Washington v. Trump, No. 2:17-cv-141 On February 3, in an action brought by the State of Washington and the State of Minnesota, the United States District Court for the Western District of Washington (Hon. James L. Robart) issued a nationwide temporary restraining order against enforcement of the Executive Order.  The next day the federal defendants filed an emergency motion for an immediate administrative stay and for a stay pending appeal.  The Ninth Circuit denied an immediate stay and held telephonic oral argument on Tuesday, February 7.  On Thursday, February 9, the three-judge panel issued its unanimous opinion holding that, "the Government has not shown a likelihood of success on the merits of its appeal, nor has it shown that failure to enter a stay would cause irreparable injury, and we therefore deny its emergency motion for a stay."  Opinion at 3.[2]             A.      Jurisdiction and Standing  The Court determined it had appellate jurisdiction due to the extraordinary circumstances of the case, even though it generally does not review temporary restraining orders.  The Court rejected the Government’s argument that the plaintiff States lack Article III standing, finding that, for purposes of this stage of the proceedings, the States adequately alleged that the Executive Order caused concrete harm to their state universities, faculty and students.  Opinion at 12.             B.      Reviewability of the Executive Order While recognizing the deference owed to the executive branch on matters of immigration and national security, the Court rejected the Government’s argument that the Executive Order was not subject to judicial review, stating that such a claim "runs contrary to the fundamental structure of our constitutional democracy."  Opinion at 14.  The Court went on to cite a number of instances in which federal courts have reviewed and, in some instances invalidated, executive actions taken in the name of national security.  Opinion at 14-18.             C.      Legal Reasoning and Opinion In deciding whether to stay the temporary restraining order, the Court examined four factors:  (1) whether the federal government was likely to succeed on the merits; (2) whether the federal government would be irreparably harmed absent a stay; (3) whether the stay would irreparably injure the plaintiff States; and (4) what is in the public interest. As to success on the merits, the Court concluded that the federal government had not demonstrated that it was likely to succeed on the merits, at least with respect to the States’ due process claims.  With respect to the due process claims, the federal government failed to show that the Executive Order provided notice and a hearing prior to restricting an individual’s ability to travel.  The Court rejected the federal government’s assertion that the Executive Order no longer applies to lawful permanent residents, as that clarification came from the White House counsel, who is "not known to be in the chain of command for any of the Executive Departments."  Opinion at 22.  With respect to those without legal status, the court found potential claims of due process violations existed as well.  The Court also noted that the States’ religious discrimination claims raised "serious allegations and present significant constitutional questions," but reserved consideration of those claims until the merits are fully briefed.  Opinion at 26.  With respect to the likelihood of irreparable harm, the Court found that the federal government failed to show that a stay was necessary to avoid unnecessary injury stating, "the Government submitted no evidence to rebut the States’ argument that the district court’s order merely returned the nation temporarily to the position it has occupied for many previous years."  Opinion at 26.  The Court found that the States had offered ample evidence of irreparable harm, including separating families and stranding individuals traveling abroad.  Opinion at 28.  Finally, the court found that there were competing public interests at play here such that irreparable harm alone could not justify a stay.  Opinion at 28-29. The Court also declined the federal government’s proposed alternative relief, including modification or narrowing of the existing temporary restraining order either in geographic scope or as to what categories of covered individuals.  Opinion at 23-24.      On the day after the Ninth Circuit issued its ruling, it issued an order that the parties submit simultaneous briefs setting forth their positions on whether en banc review by an 11-judge panel of the Ninth Circuit is appropriate.  At the same time, as stated above, recent news reports indicate that the White House may not seek to appeal the decision and will instead draft and issue a revised executive order.[3] II.      Status of Other Legal Challenges Since the January 27 Executive Order was issued, dozens of legal challenges have been brought in an effort to stay or invalidate the Executive Order.  Many of these suits have resulted in orders staying or limiting the Executive Order itself, including by judges in Massachusetts, Brooklyn, and Virginia.  See, e.g., Louhghalam v. Trump, No. 1:17-cv-10154-NMG (D. Mass. Feb 3, 2017); Darweesh v. Trump, 17 Civ. 480 (AMD) (E.D.N.Y. Jan. 28, 2017); Aziz v. Trump, No. 1:17-cv-116 (E.D.Va. Jan. 28, 2017).   One decision refused to offer temporary injunctive relief against the effectiveness of the Executive Order.  Louhghalam, 2017 WL 479779 (D. Mass. Feb. 3, 2017).  At least one case seeking to enjoin enforcement of the Executive Order has been stayed pending today’s decision by the Ninth Circuit.  State of Hawaii v. Donald J. Trump et al., No. 1:17-cv-50 (D. Haw. February 3, 2017). Other lawsuits filed over the course of the last week have sought to challenge the Executive Order as whole, as well as its impact on specific populations.  See, e.g., Pars Equality Ctr. v. Trump, No. 1:17-cv-255 (D.D.C. Feb. 9, 2017) (suit by several Iranian-American groups seeking a broad permanent injunction and alleging that the Executive Order reflects "invidious discrimination"); Int’l Refugee Assistance Project v. Trump, No. 8:17-cv-00361 (D. Md. Feb. 7, 2017) (seeking declaration that "the entire Executive Order is unlawful and invalid"). III.      Issues for Consideration  Despite the temporary clarity provided by the Ninth Circuit’s ruling, there are, as described above, multiple legal challenges still outstanding and the likelihood of further appeals of the Ninth Circuit decision issued on Thursday, February 9.  As such, companies and others should still consider the guidance provided in our earlier client alerts on this topic, until the courts or the administration provide more certainty on this issue.  For example, companies should still consider modifying (or allowing for employee choice regarding) employee travel obligations, as appropriate to the company’s business needs, to avoid potential difficulties with travel to and from the United States.  Likewise, if companies have officers, employees, contractors, or others affected by the Executive Order, or business stakeholders who will not be able to enter the United States due to the Executive Order, consider whether meetings can be conducted remotely or outside the United States.      [1]   http://www.cnn.com/2017/02/10/politics/immigration-executive-order-white-house/index.html    [2]   In addition to the filings by the parties, 20 amicus briefs were filed by a variety of entities and individuals.  Sixteen of the briefs supported the States, and were submitted by various nonprofit organizations, several other states, labor organizations, a group of law professors, and a group of over 120 technology companies.  Three briefs filed by a variety of nonprofit organizations support the government.  These briefs are available on the Ninth Circuit’s website, at https://www.ca9.uscourts.gov/content/view.php?pk_id=0000000860.       [3]   http://www.cnn.com/2017/02/10/politics/immigration-executive-order-white-house/index.html Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments.  Please contact the Gibson Dunn lawyer with whom you usually work or any of the following: Theodore J. Boutrous, Jr. – Los Angeles (+1 213-229-7000, tboutrous@gibsondunn.com)Rachel S. Brass – San Francisco (+1 415-393-8293, rbrass@gibsondunn.com)Anne M. Champion – New York (+1 212-351-5361, achampion@gibsondunn.com)Ethan Dettmer – San Francisco (+1 415-393-8292, edettmer@gibsondunn.com) Theane Evangelis – Los Angeles (+1 213-229-7726, tevangelis@gibsondunn.com) Kirsten Galler – Los Angeles (+1 213-229-7681, kgaller@gibsondunn.com) Ronald Kirk – Dallas (+1 214-698-3295, rkirk@gibsondunn.com)Joshua S. Lipshutz – Washington D.C. (+1 202-955-8217, jlipshutz@gibsondunn.com) Katie Marquart, Pro Bono Counsel & Director – New York (+1 212-351-5261, kmarquart@gibsondunn.com) Samuel A. Newman – Los Angeles (+1 213-229-7644, snewman@gibsondunn.com) Jason C. Schwartz – Washington D.C. (+1 202-955-8242, jschwartz@gibsondunn.com) Kahn A. Scolnick – Los Angeles (+1 213-229-7656, kscolnick@gibsondunn.com) © 2017 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

February 1, 2017 |
Recent Developments Regarding Executive Order on Immigration

On Monday, January 30, 2017, Gibson Dunn issued a client alert regarding President Trump’s January 27 Executive Order restricting entry into the United States for individuals from certain nations and making other immigration-related policy changes.  This update describes further developments relating to the Executive Order involving (1) coverage of dual citizens; (2) provisional revocation of certain visas; and (3) reciprocal policy changes abroad.  It also provides updates on the status of various legal challenges to the Executive Order.[1]  In particular, it describes a decision from earlier today that broadly prohibits enforcement of the Executive Order, on an interim basis. I.     Coverage of Dual Citizens, Certain Special Immigrants Clarified The Department of Homeland Security ("DHS") announced that dual citizens are not affected by the ban on entry of individuals from the seven countries covered by the Executive Order.  According to new guidance, "travelers are being treated according to the travel document they present," and will be admitted if they "apply for entry based on their citizenship from one of the countries NOT on the list" and are otherwise eligible.[2]  The Acting Commissioner of Customs & Border Protection stated that "[t]ravelers will be assessed … based on the passport they present, not any dual-national status.  So if you’re a citizen of the United Kingdom, you present your United Kingdom passport and the executive order does not apply to you upon arrival."[3] However, as a practical matter, travelers who are also nationals of one of the seven covered countries may be subject to additional screening both when applying for a visa (if applicable) under their non-affected passport, or upon arrival in the United States. Relatedly, DHS announced that holders of "special immigrant visas" (which could include translators for the U.S. armed forces in Iraq), will be treated similarly to lawful permanent residents from the covered countries.  Although covered by the ban, they will generally be allowed entry under the "case-by-case" waiver provision.[4] II.     Revocation of Existing Visas On Tuesday, January 31, in one of the cases challenging the Executive Order, the government publicly filed a January 27 Department of State order that "provisionally revoke[d] all valid nonimmigrant and immigrant visas of nationals of Iraq, Iran, Libya, Somalia, Sudan, Syria, and Yemen."[5]  It is not currently clear to what extent this order is being enforced. Like the Executive Order, this State Department order recognizes the possibility of exceptions made on a "case-by-case" basis, but does not provide information on the process for obtaining such an exception.  While application of this order remains unclear, revocation of a visa has potentially significant implications.  For example, once a nonimmigrant visa is revoked, the visa holder becomes deportable.[6]  The rule regarding immigrant visas is less clear, although there is some risk that an immigrant whose visa has been revoked could be subject to deportation.[7]  If the government seeks to deport an individual on the basis of a visa revocation, that individual has the right to judicial review prior to removal.[8]   While no guidance has been issued, the order may mean that individuals who entered on a valid multi-entry visa prior to the Executive Order will not be able to enter again under the same visa, even after the 90-day ban expires.  Instead, individuals in this category will likely need to obtain a new visa, or a waiver from the revocation.  In addition, individuals in the United States under a previously issued visa may be deported.  III.     Reciprocal Action in Other Nations At least two of the seven nations covered by the Executive Order are implementing or moving toward reciprocal bans on travel from the United States, although details of the scope of these bans, and possible exceptions, are unclear at this time.  Iran has announced a ban.[9]  Iraq’s parliament has passed a non-binding recommendation to take similar action if the U.S. ban remains in effect, in line with criticism of the Executive Order from the foreign ministry there.[10] IV.     Status of Legal Challenges              A.        Badr Dhaifallah Ahmed Mohammed et al v. United States of America et al, 2:17-cv-00786 (C.D. Cal. January 31, 2017) On January 31, the United States District Court for the Central District of California (Hon. André Birotte Jr.) entered an Order enjoining the President, DHS, CBP, and other defendants from enforcing the Executive Order "by removing, detaining, or blocking the entry of Plaintiffs, or any other person from" the seven countries named in the Executive Order "with a valid immigrant visa." The court further: (i) enjoined the defendants from cancelling the plaintiffs’ validly obtained and issued visas; (ii) ordered the defendants, and the State Department in particular, to return "to Plaintiffs their passports containing validly issued immigrant visas so that Plaintiffs may travel to the United States on said visas,"; and (iii) ordered defendants to immediately "inform all relevant airport, airline, and other authorities at Los Angeles International Airport and International Airport in Djibouti that Plaintiffs are permitted to travel to the United States on their valid immigrant visas." Although the court’s order prohibits the "blocking of entry" of anyone from the seven countries who possesses "a valid immigrant visa," regardless of whether the individual is a plaintiff in the case, it is unclear what impact this will have beyond the named plaintiffs in light of the Department of State’s order provisionally revoking all such visas as discussed above.               B.        State Government Actions Four state governments have also sued to enjoin the Executive Order or moved to intervene in cases challenging the Order, one new class action was filed challenging the Executive Order, and two potentially significant hearings are scheduled for this Friday.  Several States have gone to court to challenge the ban.  The State of Washington filed a challenge in the Western District of Washington.[11]  Similarly, Massachusetts,[12] Virginia,[13] and New York,[14] moved to join existing lawsuits pending in federal court in their states. The Northwest Immigrant Rights Project filed a class action in the Western District of Washington seeking invalidation of the Executive Order.  Abdiaziz v. Trump, No. 2:17-cv-135. Finally, two hearings are set for this Friday, February 3.  The District of Massachusetts hearing in Tootkaboni v. Trump, No. 17-cv-10154, will further consider the temporary restraining order that court entered last weekend.  The Western District of Washington will consider the state government’s request for a temporary restraining order in its recently filed case, State of Washington v. Trump, No. 2:14-cv-141. *      *      * Gibson Dunn will continue to closely monitor these rapidly developing issues.                 [1]     On January 30, shortly after the release of our earlier client alert, the Acting Attorney General announced guidance that the Justice Department would not defend the Executive Order, explaining that she is not "convinced that the Executive Order is lawful."  (http://documents.latimes.com/message-acting-attorney-general).  The White House relieved the Acting Attorney General of her duties, stating that the Acting Attorney General had "betrayed the Department of Justice by refusing to enforce a legal order designed to protect the citizens of the United States."  See White House, Statement on the Appointment of Dana Boente as Acting Attorney General, Jan. 30, 2017 (https://www.whitehouse.gov/the-press-office/2017/01/30/statement-appointment-dana-boente-acting-attorney-general).  The new Acting Attorney General promptly announced that he was rescinding his predecessor’s guidance regarding the Executive Order.  See U.S. Dept. of Justice, "Acting Attorney General Boente Issues Guidance to Department on Executive Order," Jan. 30, 2017 (https://www.justice.gov/opa/pr/acting-attorney-general-boente-issues-guidance-department-executive-order).                 [2]     U.S. Customs & Border Protection, "Protecting the Nation from Foreign Terrorist Entry into the United States," Jan. 31, 2017 (https://www.cbp.gov/border-security/protecting-nation-foreign-terrorist-entry-united-states).                 [3]     U.S. Dept. of Homeland Security, "Transcript of Media Availability on Executive Order with Secretary Kelly & DHS Leadership," Jan. 31, 2017 (https://www.dhs.gov/news/2017/01/31/transcript-media-availability-executive-order-secretry-kelly-and-dhs-leadership).                 [4]     U.S. Dept. of Homeland Security, "Transcript of Media Availability on Executive Order with Secretary Kelly & DHS Leadership," Jan. 31, 2017 (https://www.dhs.gov/news/2017/01/31/transcript-media-availability-executive-order-secretry-kelly-and-dhs-leadership).                 [5]     U.S. Dept. of State, Order, Jan. 27, 2017.  This document is not currently available on a government website, but can be found at http://www.politico.com/f/?id=00000159-f6bd-d173-a959-ffff671a0001 .                 [6]     See 8 U.S.C. § 1227(a)(1)(B) ("Any alien who is present in the United States in violation of this chapter or any other law of the United States, or whose nonimmigrant visa (or other documentation authorizing admission into the United States as a nonimmigrant) has been revoked under section 1201(i) of this title, is deportable.").                 [7]     See 8 U.S.C.  § 1201(i); 22 C.F.R. § 42.82(b); see also 8 U.S.C. § 1227(4)(c)(i) ("An alien whose presence or activities in the United States the Secretary of State has reasonable ground to believe would have potentially serious adverse foreign policy consequences for the United States is deportable.").                 [8]     8 U.S.C. § 1201(i) ("There shall be no means of judicial review … of a revocation … except in the context of a removal proceeding if such revocation provides the sole ground for removal…").                  [9]     Asas Fitch, et al., "Iran Halts Visas to Americans As Iraq Keeps Doors Open," Wall Street J., Jan. 31, 2017 (https://www.wsj.com/articles/iran-stops-issuing-visas-to-americans-1485870515).                 [10]     Qassim Abdul-Zahra, "Iraqi Lawmakers Urge Ban On Americans After Trump Order," Associated Press, Jan. 30, 2017 (http://www.kcbd.com/story/34378139/iraqi-lawmakers-urge-ban-on-americans-after-trump-order).                 [11]     Washington State Office of the Attorney General, "AG Ferguson Seeks Halt to Trump’s Immigration Executive Order," Jan. 30, 2017 (http://www.atg.wa.gov/news/news-releases/ag-ferguson-seeks-halt-trump-s-immigration-executive-order).                 [12]     Attorney General of Massachusetts, "AG Healey Announces Lawsuit Against President Trump’s Executive Order on Immigration," Jan. 31, 2017 (http://www.mass.gov/ago/news-and-updates/press-releases/2017/2017-01-31-ag-lawsuit-president-eo.html).                 [13]     Attorney General of Virginia, "Virginia Brings Action Against President Trump for Unlawful and Unconstitutional Executive Order on Immigration," Jan. 31, 2017 (http://www.oag.state.va.us/media-center/news-releases/879-january-31-2017-virginia-brings-action-against-president-trump-for-unlawful-and-unconstitutional-executive-order-on-immigration).                 [14]     Attorney General of New York State, "A.G. Schneiderman Joins Lawsuit Against President Trump’s Immigration Executive Order, Jan. 31, 2017 (https://ag.ny.gov/press-release/ag-schneiderman-joins-lawsuit-against-president-trumps-immigration-executive-order). Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments.  Please contact the Gibson Dunn lawyer with whom you usually work or any of the following: Theodore J. Boutrous, Jr. – Los Angeles (+1 213-229-7000, tboutrous@gibsondunn.com)Rachel S. Brass – San Francisco (+1 415-393-8293, rbrass@gibsondunn.com)Anne M. Champion – New York (+1 212-351-5361, achampion@gibsondunn.com)Ethan Dettmer – San Francisco (+1 415-393-8292, edettmer@gibsondunn.com) Theane Evangelis – Los Angeles (+1 213-229-7726, tevangelis@gibsondunn.com) Kirsten Galler – Los Angeles (+1 213-229-7681, kgaller@gibsondunn.com) Ronald Kirk – Dallas (+1 214-698-3295, rkirk@gibsondunn.com)Joshua S. Lipshutz – Washington D.C. (+1 202-955-8217, jlipshutz@gibsondunn.com) Katie Marquart, Pro Bono Counsel & Director – New York (+1 212-351-5261,kmarquart@gibsondunn.com) Samuel A. Newman – Los Angeles (+1 213-229-7644, snewman@gibsondunn.com) Jason C. Schwartz – Washington D.C. (+1 202-955-8242, jschwartz@gibsondunn.com) Kahn A. Scolnick – Los Angeles (+1 213-229-7656, kscolnick@gibsondunn.com) © 2017 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

January 30, 2017 |
President Trump Issues Executive Order on Immigration

On Friday January 27, 2017, President Trump issued an Executive Order entitled "Protecting the Nation from Foreign Terrorist Entry into the United States Executive Order."  (Available here.) The Executive Order imposes, among other things, a 90-day ban on entry into the United States for any purpose by non-U.S. citizens from Iran, Iraq, Libya, Somalia, Sudan, Syria, and Yemen.  The State Department has advised individuals from the affected countries seeking visas to enter the United States not to schedule or attend interviews, or pay fees for such visas, until further notice.[i]  Over the weekend, three federal courts blocked implementation of various parts of the Executive Order.  Additionally, the Administration has announced that implementation of the Executive Order will be somewhat relaxed for U.S. lawful permanent residents.  However, confusion persists at airports both here and abroad.  For example, it has been reported that some individuals have not been permitted to board U.S.-bound flights, and that upon arrival in the United States, other individuals have been subjected to inconsistent treatment, including detention by Customs and Border Protection ("CBP") officers or often lengthy screenings.  Additionally, in some cases, individuals are reportedly unable to communicate with their family members or legal counsel.  Although the legal landscape is continuing to evolve, as we describe below, this Client Alert provides an overview of the Executive Order, the district court decisions enjoining portions of the Executive Order, and guidance that may assist companies and others impacted by the Executive Order.  As we understand that responding to inquiries involving the Order may be our clients’ most pressing concern, we start with a brief background of the Executive Order and provide guidance companies may want to consider.  We then provide an overview of the legal landscape that exists as of Monday, January 30, 2017.  This alert is informational only, and you should, of course, seek legal advice specific to any particular situation.  Please note that we have published a supplement to this Client Alert regarding later relevant events, which is available here.  I.     Overview of the Executive Order The Executive Order has the stated purpose of "protect[ing] the American people from terrorist attacks by foreign nationals admitted to the United States."  Among its provisions are the restriction of "immigrant and nonimmigrant" entry of non-citizens from seven countries for 90 days, suspension of all refugee admission for 120 days, and indefinite prohibition of refugees from Syria.       A.     Individuals Covered and Not Covered by the 90-day Ban Section 3(c) of the Executive Order "suspend[s] entry into the United States, as immigrants and nonimmigrants" for 90 days of "aliens" from Iran, Iraq, Libya, Somalia, Sudan, Syria, and Yemen.  Subject to certain exceptions, this suspension applies regardless of travel origin, type of visa, or U.S. immigration status.  The Executive Order provides that the "the Secretaries of State and Homeland Security may, on a case-by-case basis, and when in the national interest, issue visas or other immigration benefits to nationals of countries for which visas and benefits are otherwise blocked."  Sec. 3(g).  The Executive Order also explicitly exempts only certain categories of visas for diplomats, NATO business, United Nations business (C-2), and international organization staff (G-1, G-2, G-3, G-4)).  Sec. 3(c). The Executive Order is drafted broadly enough to cover lawful permanent residents (i.e., green-card holders), and there are reports that in the first 36 hours of implementation, the CBP officers denied re-entry to such individuals.  However, on Sunday, January 29, the Department of Homeland Security ("DHS") announced that "absent significant derogatory information indicating a serious threat to public safety and welfare, lawful permanent resident status will be a dispositive factor in our case-by-case determinations" under Section 3(g) of the Order.[ii]  Since that announcement, reports from across the country suggest that such individuals are now being admitted under this discretionary authority, after extended screening upon arrival.  The Executive Order also implicates dual citizens who are not U.S. citizens.  However, exactly how such individuals will be addressed by CBP is uncertain.  There are some indications that such individuals will be treated similarly to green-card holders–subject to increased scrutiny, but generally admitted.  However, admission appears to be discretionary, and, as of now, there is no clearly announced policy.  The United Kingdom Foreign Office announced on Sunday, January 29 that the United States is not applying the ban to individuals who are dual citizens of the United Kingdom and one of the banned countries, if such individuals are travelling from the United Kingdom.[iii]  On Monday, January 30, the U.S. Embassy & Consulates in the United Kingdom made a similar announcement, confirming that "[d]ual nationals of the United Kingdom and one of [the seven covered] countries are exempt from the Executive Order when travelling on a valid United Kingdom passport and U.S. visa."[iv]  In addition, various news outlets have reported–quoting Canadian government officials–that the United States is not applying the ban to individuals who are dual citizens of Canada and one of the banned countries.[v]  U.S. officials, however, have yet to make a similar announcement. U.S. citizens are not covered by the language of the Executive Order.  As described below, however, non-U.S. citizens from countries other than the seven covered countries may still be affected by the Executive Order’s suspension of the Visa Interview Waiver Program.  Suspension of this program is likely to increase the time necessary for issuance of U.S. visas.      B.     Other Provisions A few other provisions of the Executive Order should also be noted, as they may hinder travel to the United States by those not directly affected by the country-specific ban. The Executive Order suspends the Visa Interview Waiver Program, which allows those renewing certain types of visas to skip a consular interview under certain circumstances.  See Sec. 8(a).  This program is commonly used by low-risk travelers, including many employment-based visa applicants, in order to expedite the time in which visas are obtained for travel to the United States.  Suspension of this program is likely to slow, perhaps significantly, the process of renewing a visa, as it appears to impose a requirement that all visa applicants be interviewed in person. The Executive Order requires the Secretary of State to review "all non-immigrant visa reciprocity agreements."  Sec. 9.  This raises the prospect that certain visas will be scaled back in the future, such as by reducing the number of allowed visits in a period or the length of an allowed stay under a visa. The Executive Order suspends the U.S. Refugee Admissions Program for 120 days (Sec. 5), and indicates certain priority for religious minorities upon its limited resumption.  This is generally understood to apply to Christian refugees from Muslim-majority nations.  Finally, it is possible that the list of affected countries will expand after the 90-day ban period.  The Executive Order directs the DHS to submit for inclusion a list of any other countries that "do not provide adequate information" regarding admission of their citizens.  Sec. 3(b).  At the end of the 90-day period, DHS or the State Department may also "submit to the President the names of any additional countries recommended for similar treatment."  Sec. 3(f). II.     Issues for Companies to Consider There is no "one size fits all" approach for companies addressing employee and business issues related to the Executive Order.  In the immediate term, companies should consider preparing a uniform communications plan for their employees, particularly those who are or may be affected by the Executive Order.  Companies should also consider whether plans or policies are needed for travel by executives, employees, or other stakeholders.  Although this situation is fluid and continues to develop, as further described below, we believe companies should also be mindful of whether they will need to develop strategies to deal with the impact of the Executive Order, both internally and as it relates to potential shareholder and business relations.  Specific questions that companies may want to consider with respect to the Executive Order include: Outreach to employees who may be affected.  Although the administrative and judicial interpretation of the Executive Order continues to evolve, meaning that the full scope of individuals who may be affected is in flux, companies should consider proactively identifying and reaching out to all employees who may be affected.  As noted above, the Executive Order, on its face, applies to both immigrants and non-immigrants from the seven covered countries.  Thus, employees traveling for business or leisure may be equally affected.  In addition, as discussed above, there have been indications that lawful permanent residents may be subject to additional questioning when entering the United States from one of the seven covered countries, even if those individuals are not subject to detention.  Note that different employees’ immigration statuses may compel differing guidance on how to approach any issues that arise in the enforcement of the Order. Outreach to employees who may have family members affected.  It is important to remember that for some of your employees, even if they are not directly impacted by the Executive Order, they will have family and loved ones who are directly impacted.  We have received reports of many family members detained and separated from other family members upon arrival at an airport.  We have heard reports about family members traveling abroad who are now fearful of not being able to return home to reunite with a family member.  Companies may consider providing counseling and support for your employees who are facing these concerns. Communicating with employees.  Companies should consider identifying employees who frequently travel to and from the affected countries or who are visa holders from affected countries, to explain company plans with respect to the Executive Order.  In particular, employees from affected countries who are currently outside the United States, but have a legal right to re-enter, should be advised to stay in communication with individuals in the United States about their travel plans, in the event they have difficulty re-entering the country, and have a plan to obtain appropriate assistance in that event.  For employees currently in the United States but who are from the affected countries or frequently travel to the affected countries, consider whether travel abroad is necessary before the full scope of enforcement of the Executive Order is known and understood. Identifying a point of contact.  Consider identifying a contact point for any employee questions or concerns regarding the Executive Order.  Furthermore, ensure that this contact is prepared to field questions from affected or potentially affected employees, to discuss visa renewal or travel to and from the affected countries, and to refer employees with specific issues to the appropriate resources. Communicating with shareholders, business partners and other stakeholders.  Companies should consider whether communications with shareholders, business partners or other stakeholders regarding potential impacts on business as a result of enforcement of the Executive Order are appropriate. Modifying travel and meeting obligations.  Companies should consider modifying (or allowing for employee choice regarding) employee travel obligations, as appropriate to the company’s business needs, to avoid potential difficulties with travel to and from the United States.  Likewise, if companies have board members or executives affected by the Executive Order, or business stakeholders who will not be able to enter the United States due to the Executive Order, consider whether meetings can be conducted remotely or outside the United States.  Companies involved in pending litigations that may require employee travel to the United States, should consider seeking the advice of litigation counsel to determine what, if any, notice to the relevant court or parties may be advisable at this stage. Reviewing non-discrimination policies.  Companies may wish to send reminders of applicable equal employment policies.  Many employers have included such statements in communications regarding the Order.  Companies may also wish to consider how their policies apply to employment and hiring decisions in light of travel restrictions.  This list addresses just some of the issues that companies will face in light of the Executive Order.  Gibson, Dunn & Crutcher’s lawyers, including its employment, securities, administrative law, constitutional law, and sanctions teams, are available to assist clients with navigating these and other issues that arise with respect to enforcement of the Order. III.     District Court Orders Blocking Implementation of the Executive Order As of the morning of January 30, three district courts–in New York, Massachusetts, and Virginia–have issued orders of varying general applicability temporarily (a) halting deportations resulting from the Executive Order and (b) providing certain other relief.  Other federal courts, including those in the Central District of California and the Western District of Washington have issued relief specific to individual applicants.      A.     Nationwide Stay of Removal–Darweesh v. Trump, No. 17 Civ. 480 (AMD) (E.D.N.Y. Jan. 28, 2017). On Saturday, January 28, two visa holders of Iraqi origin detained at JFK Airport in New York filed suit relief on behalf of themselves and others similarly situated, along with a petition for writ of habeas corpus.  They also asked the court for an emergency stay of removal of similarly situated people nationwide.  Judge Ann Donnelly of the Eastern District of New York granted relief that evening, enjoining the President, DHS, CBP, and other respondents from removing (i) refugees, (ii) visa-holders, and (iii) individuals from the nations affected by the Executive Order.  The court found that the petitioners–two individuals who were detained at JFK, along with all others similarly situated–"have a strong likelihood of success" with respect to their Due Process and Equal Protection challenges to the Executive Order.  The court also found that, absent the stay, there was an "imminent danger that . . . there will be substantial and irreparable injury" to those subject to the Executive Order. On Sunday, January 29, petitioners filed a motion for clarification and enforcement of the order.  The motion cited reports that similarly situated people "have been placed on planes, possibly deported, and subject to intimidation to sign removal orders after the issuance of the Court’s Order."  Among other things, petitioners seek confirmation that the court’s order applies to all similarly situated people nationwide.  On Monday, January 30, the case was assigned to Judge Carol Bagley Amon.       B.     Nationwide Stay of Removal and Detention —Tootkaboni v. Trump, No. 17-cv-10154 (D. Mass. Jan. 29, 2017).  On Saturday, January 28, two lawful permanent residents of Iranian origin who were detained at Logan Airport in Boston filed a similar action for relief, and also applied for an emergency stay on a nationwide basis. Early Sunday, Judge Allison D. Burroughs and Magistrate Judge Judith Dein of the District of Massachusetts issued a temporary restraining order ("TRO") prohibiting removal and detention of those subject to the Executive Order (i.e., refugees, visa-holders, and individuals from the affected nations).  The court made the same findings as the Darweesh Court, described above.  The TRO is in effect for seven days, with the court to set a further hearing date prior to its expiration.  The court also directed respondents to limit secondary screening–an airport security measure that some critics have associated with profiling–to comply with the regulations and statutes in effect prior to the Executive Order, including 8 U.S.C. § 1101(a)(13)(C), the statute providing the standards by which a lawful permanent resident may be regarded as "seeking admission" into the United States.  The court also issued instructions to CBP, apparently intended to address the issue of airlines turning away passengers on international flights destined for Logan Airport, stating that CBP "shall notify airlines that have flights arriving at Logan Airport of this Order and the fact that individuals on these flights will not be detained or returned based solely on the basis of the Executive Order."      C.     Stay of Removal of Lawful Permanent Residents at Dulles–Mohammed Aziz v. Trump, No. 1:17-cv-116 (E.D. Va. Jan. 28, 2017) On Saturday, January 28, two brothers of Yemeni origin detained at Dulles International Airport filed an emergency application seeking a stay of removal on behalf of themselves as lawful permanent residents and others similarly situated at that same airport, as well as seeking access to counsel. Judge Leonie M. Brinkema of the Eastern District of Virginia issued a TRO forbidding removal of any lawful permanent residents from Dulles for seven days.  The court also directed that respondents "shall permit lawyers access to all legal permanent residents being detained at Dulles International Airport."  On January 30, petitioners filed a First Amended Complaint, adding new allegations that they were coerced into surrendering their green cards and then flown to Addis Ababa airport in Ethiopia.[vi]      D.     Other Court Actions and Orders Individuals seeking relief on an individual basis only, and not on behalf of others similarly situated, have sought habeas corpus and/or other relief in a number of other district courts with jurisdiction over relevant international airports.  For instance, on Saturday, January 28, a visa holder of Iranian origin detained at LAX in Los Angeles filed suit in the Central District of California, seeking habeas corpus, declaratory, and injunctive relief.  See Vayeghan v. Kelly, No. CV 17-0702 (C.D. Cal. Jan. 28, 2016).  Before the court could consider the emergency application for a TRO, however, "he was placed on a flight to Dubai to be removed to Iran."  But Judge Dolly M. Gee issued a TRO on January 29, directing respondents to "transport Petitioner back to the United States and admit him under the terms of his previously approved visa."  The court found, among other things, "a strong likelihood of success" on the petitioner’s claims under the Equal Protection Clause, Establishment Clause, and Immigration and Nationality Act, and also pointed to "the public interest in upholding constitutional rights."  The court set a hearing to show cause regarding preliminary injunctive relief for Friday, February 10. On Saturday, January 28, Judge Thomas S. Zilly of the Western District of Washington granted an emergency stay of removal with respect to two petitioners being detained at Seattle-Tacoma International Airport.  A full hearing on the stay is set for Friday, February 3.  The matter is Doe v. Trump, No. C17-126 (W.D. Wash. Jan. 28, 2017).  In addition, there are at least two broad-based suits being filed today.  First the Council on American-Islamic Relations ("CAIR") has filed suit in the Eastern District of Virginia, focusing on the Executive Order’s "apparent purpose and underlying motive . . . to ban people of the Islamic faith from Muslim-majority countries from entering the United States."[vii]  The case  raises challenges under the Establishment, Free Exercise, and Due Process Clauses, and seeks broad injunctive relief against most aspects of the Executive Order restricting travel to the United States.  See Sarsour v. Trump, No. 1:17-cv-00120 (E.D. Va. Jan. 30, 2017).  Second, the attorney general of Washington State has announced he will file a suit in the Western District of Washington, also seeking to have key provisions declared unconstitutional and requesting injunctive relief.[viii] Finally, we are aware of other actions being filed in the Northern District of Illinois (Chicago O’Hare International Airport); the Northern District of California (San Francisco International Airport); the Central District of California (LAX); and the Northern District of Texas (Dallas-Fort Worth International Airport).  Additionally, there are at least fifteen actions pending in the Eastern District of New York, including the Darweesh matter discussed above. IV.     On-the-Ground Observations at Airports Nationwide Although deportations appear to have stopped and DHS has indicated it will comply with the court orders described above, reports from airport observers indicate that confusion continues regarding the implementation of the Executive Order and compliance with these court orders.  The Administration, however, has contradicted these reports, but has acknowledged that some individuals were affected and slowed down in their travel.[ix] Attorneys at various airports around the country have reported denial of access to detainees.  Despite court orders mandating attorney access to potential clients, CBP has reportedly refused to allow some detainees to speak in person with counsel.[x]  Other lawyers have reported that CBP has been averse to inquiries for information.  In Los Angeles, for example, CBP closed its airport office, making it difficult to determine the number, identity, and legal status of potential detainees.   Detainees have reported extensive examinations and confiscations of luggage and personal belongings.[xi]  Multiple reports circulated detailing investigations into detainees’ social media accounts and corresponding questioning regarding personal religious beliefs and political views, particularly related to President Trump and his administration.  Some detainees stated that individuals wearing headscarves were targeted for additional vetting.  Wait times varied widely, from half a day or longer to an hour or less.  There have also been reports that some detainees have been pressured into renouncing their lawful status under threat of being banned from re-entry for up to five years.[xii]  Finally, many individuals have reported undergoing more rigorous screening at the point of embarkment.  As part of that process, individuals may be denied permission to board if there is an expectation they will not be admitted to the United States upon arrival.[xiii]    *          *          * The issues described in this Client Alert are rapidly changing.  Gibson Dunn is dedicated to staying at the forefront of these issues for the benefit of our friends and clients, and will update you with significant developments. [i] U.S. State Dept., "Urgent Notice: Executive Order on Protecting the Nation from Terrorist Attacks by Foreign Nationals," Jan. 27, 2017 (https://travel.state.gov/content/visas/en/news/executive-order-on-protecting-the-nation-from-terrorist-attacks-by-foreign-nationals.html). [ii] U.S. Dept. of Homeland Security, "DHS Statement On Compliance With Court Orders And The President’s Executive Order," Jan. 29, 2017 (https://www.dhs.gov/news/2017/01/29/dhs-statement-compliance-court-orders-and-president%E2%80%99s-executive-orders). [iii] U.K. Foreign & Commonwealth Office, "Press Release, Presidential Executive Order on Inbound Migration to United States," Jan. 29, 2017 (https://www.gov.uk/government/news/presidential-executive-order-on-inbound-migration-to-us).   [iv] U.S. Embassy & Consulates in the U.K., "Updated Guidance on Executive Order on Protecting the Nation from Terrorist Attacks by Foreign Nationals," Jan. 30, 2017 (https://uk.usembassy.gov/updated-guidance-executive-order-protecting-nation-terrorist-attacks-foreign-nationals/). [v] See, e.g., Daniel Dale & Emily Mathieu, "Canadian dual citizens exempted from Trump’s travel ban," Toronto Star, Jan. 28, 2017 (https://www.thestar.com/news/world/2017/01/28/passport-holders-of-7-muslim-majority-countries-cant-board-air-canada-flights-to-us.html). [vi] As of Sunday night, it is unclear how the matters in Massachusetts and Virginia, brought by lawful permanent residents, are affected by DHS’s statement on January 29 that "the entry of lawful permanent residents is in the national interest." [vii] Council on American-Islamic Relations, "CAIR to Announce Constitutional Challenge to Trump’s ‘Muslim Ban’ Executive Order," Jan. 27, 2017 (https://www.cair.com/press-center/press-releases/14062-cair-to-announce-constitutional-challenge-to-trump-s-muslim-ban-executive-order.html). [viii] KOMO Staff, "State attorney general to file lawsuit against Trump immigration order," KOMO News, Jan. 30, 2017 (http://komonews.com/news/local/state-attorney-general-plans-major-announcement-on-trump-immigration-plan). [ix] E.g., Berkeley Lovelace Jr, "White House spokesman Sean Spicer says immigration ban ‘small price to pay’ for safety," CNBC, Jan. 30, 2017 (http://www.cnbc.com/2017/01/30/white-house-spokesman-sean-spicer-immigration-ban.html). [x] See, e.g., Edward Helmore, et al., "Border agents defy courts on Trump travel ban, congressmen and lawyers say," Guardian, Jan. 29, 2017 (https://www.theguardian.com/us-news/2017/jan/29/customs-border-protection-agents-trump-muslim-country-travel-ban). [xi] See, e.g., Nadel Issa, et al., "As hundreds protest, attorneys seek info on how many are detained," Chicago Sun-Times, Jan. 29, 2017 (http://chicago.suntimes.com/politics/calm-before-the-storm-ohare-quiet-sunday-morning/). [xii] See, e.g., Joseph Goldstein, et al., "Lives Rewritten With the Stroke of a Pen," New York Times, Jan. 29, 2017 (https://www.nytimes.com/interactive/2017/01/29/nyregion/detainees-trump-travel-ban.html?_r=0). [xiii] See, e.g., Evan Perez, et al., "Inside the confusion of the Trump executive order and travel ban," CNN, Jan. 30, 2017 (http://www.cnn.com/2017/01/28/politics/donald-trump-travel-ban/). Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments.  Please contact the Gibson Dunn lawyer with whom you usually work or any of the following: Theodore J. Boutrous, Jr. – Los Angeles (+1 213-229-7000, tboutrous@gibsondunn.com)Rachel S. Brass – San Francisco (+1 415-393-8293, rbrass@gibsondunn.com)Anne M. Champion – New York (+1 212-351-5361, achampion@gibsondunn.com)Ethan Dettmer – San Francisco (+1 415-393-8292, edettmer@gibsondunn.com) Theane Evangelis – Los Angeles (+1 213-229-7726, tevangelis@gibsondunn.com) Kirsten Galler – Los Angeles (+1 213-229-7681, kgaller@gibsondunn.com) Ronald Kirk – Dallas (+1 214-698-3295, rkirk@gibsondunn.com)Joshua S. Lipshutz – Washington D.C. (+1 202-955-8217, jlipshutz@gibsondunn.com) Katie Marquart, Pro Bono Counsel & Director – New York (+1 212-351-5261,kmarquart@gibsondunn.com) Samuel A. Newman – Los Angeles (+1 213-229-7644, snewman@gibsondunn.com) Jason C. Schwartz – Washington D.C. (+1 202-955-8242, jschwartz@gibsondunn.com) Kahn A. Scolnick – Los Angeles (+1 213-229-7656, kscolnick@gibsondunn.com) © 2016 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

June 12, 2015 |
A Practical Guide to the Use of the Commissioned Public Report as an Effective Crisis-Management Tool

Washington, D.C. partner F. Joseph Warin and associates Oleh Vretsona and Lora MacDonald are the authors of "A Practical Guide to the Use of the Commissioned Public Report as an Effective Crisis-Management Tool" [PDF] published in the Notre Dame Journal of Law, Ethics & Public Policy, Volume 29, Issue 1.

February 27, 2015 |
2014 Year-End Transnational Litigation Update

2014 was a watershed year for transnational litigation in United States courts.  Rulings by the United States Supreme Court and several United States courts of appeals dramatically reshaped the circumstances under which foreign defendants are subject to general personal jurisdiction, further developed the standards for extraterritorial application of United States laws, and provided important guidance on the scope of sovereign immunity and application of the Foreign Sovereign Immunities Act ("FSIA") to commercial disputes.  The year also saw major developments in the long-running, multifaceted global battle among Chevron Corporation, Ecuador, and United States and Ecuadorian lawyers, as well as in the litigation between Argentina and NML Capital, Ltd., and Yukos Capital and Samaraneftegaz.  In 2014, global litigants also continued to expand their use of 28 U.S.C. § 1782 ("Section 1782") to deploy expansive United States discovery tools in support of foreign disputes.  In response, federal courts have issued key rulings regarding the types of proceedings Section 1782 applies to, the effect of foreign laws protecting privacy and secrecy, and a court’s power to compel production of documents stored outside the United States.  In this review, we discuss and analyze the bellwether transnational litigation actions involving these companies, as well as other developments in transnational litigation from 2014 that will be most significant to companies with cross-border operations and involved in transnational disputes.  For ease of reference, we have included hyperlinks to each Part of the alert in this Executive Summary.    Part I:  Over the past year, Daimler AG v. Bauman[1] has served to redefine the circumstances under which foreign defendants are subject to general personal jurisdiction in the United States.  Part I of this alert addresses Daimler and how it has been applied.  Part II:  The year saw dramatic decisions in cases of transnational attempts to defraud U.S. defendants, including Chevron Corporation’s successful RICO suit against the purveyors of what the Wall Street Journal called the legal "fraud of the century."  This section also discusses Laguna v. Dole Food Co., Inc.,[2] a California Court of Appeal decision affirming dismissal of a case that had produced a multi-million dollar judgment as a sanction for the Nicaraguan-based fraud on the court perpetrated against Dole Food Co. and other United States corporations. Part III:  Whether and when United States law can be applied extraterritoriality (and what that means) continues to be the focus of significant litigation.  Part III addresses the latest development of the standards for extraterritorial application of United States laws as first articulated in Morrison v. National Australian Bank Ltd,[3] including 2014’s important guidance on the scope of sovereign immunity and the FSIA’s application to commercial disputes.  Part IV:  2014 saw significant activity in the foreign judgment and arbitral award enforcement and defense arena.  Part V:  Recent developments in transnational judgment collection are addressed in this section, including an overview of NML Capital, Ltd.’s long-running effort to collect $1.8 billion in judgments against the Republic of Argentina and the groundbreaking enforcement of important arbitral awards, including the awards arising out of the complex, decade-long Yukos Oil Company dispute.  Part VI:  This section addresses developments in transnational discovery, including Section 1782.  In 2014, global litigants continued to expand their use of Section 1782 to deploy expansive United States discovery tools in support of foreign disputes.  In response, federal courts have issued key rulings regarding the types of proceedings Section 1782 applies to, the effect of foreign laws protecting privacy and secrecy, and a court’s power to compel production of documents stored outside the United States. Part I:  Daimler AG v. Bauman:  Developments in Personal Jurisdiction Over Foreign Entities The Supreme Court’s January 2014 decision in Daimler AG v. Bauman,[4] reduced the accessibility of United States courts to plaintiffs bringing actions against foreign corporations.  In Daimler, the Court unanimously held that a foreign corporation with no employees or facilities in the United States could not be subject to personal jurisdiction based on the activities of its agent, an indirect corporate subsidiary, in the forum state.   In Daimler, which was argued at the Supreme Court by Gibson Dunn’s Thomas H. Dupree Jr., the Court unanimously held that even if the extensive California-based conduct of an indirect subsidiary, including multiple physical facilities and a position as the leading supplier of luxury vehicles in the California market, were imputed to the foreign parent corporation (Daimler AG), they did not subject Daimler AG to general personal jurisdiction in California because that conduct was "slim" when compared to its worldwide operations, and thus was insufficient to render it "at home" in California.  Plaintiffs sued Daimler AG (a German corporation) in California district court for an alleged wrong that related to an Argentine subsidiary and occurred in Argentina, arguing that jurisdiction was appropriate because Mercedes-Benz USA, another indirect corporate subsidiary, distributed Daimler AG-manufactured vehicles in California.  After the district court dismissed for lack of personal jurisdiction, the Ninth Circuit affirmed, but then reversed itself en banc.  In a 9-0 decision in which all but one justice joined the majority opinion (Justice Sotomayor concurred), the United States Supreme Court reversed:  "Exercises of personal jurisdiction so exorbitant, we hold, are barred by due process constraints on the assertion of adjudicatory authority."[5]  Instead, general jurisdiction over a defendant could exist only when that entity’s "affiliations with the State are so ‘continuous and systematic’ as to render [it] essentially at home in the forum State."[6]  With regard to corporations, the Court identified the "paradigm" bases for general jurisdiction as "the place of incorporation and the principal place of business."[7]  The Court also considered jurisdictional principles from other countries, concluding that:  "Considerations of international rapport thus reinforce our determination that subjecting Daimler to the general jurisdiction of courts in California would not accord with the ‘fair play and substantial justice’ due process demands."[8]  In the transnational context, Daimler‘s impact has been immediate in two primary ways, by (1) narrowing the circumstances under which general jurisdiction will be found over foreign corporations and (2) placing greater emphasis on the importance of addressing international comity concerns before exercising jurisdiction.  How Daimler Has Been Interpreted and Implemented Marking a significant development in transnational litigation, multiple courts applying Daimler over the past year have found that they did not have personal jurisdiction over foreign defendants in transnational and multi-jurisdictional suits.[9] For example, the Southern District of Texas explicitly recognized that Daimler narrowed the courts’ ability to exercise personal jurisdiction when it noted that while a foreign company’s contacts with Texas would have previously been sufficient for general jurisdiction, Daimler‘s "even more stringent test" rendered them insufficient.[10]  In Sonera Holding B.V. v. Cukurova Holding A.S., the Second Circuit interpreted Daimler as reaffirming "that general jurisdiction extends beyond an entity’s state of incorporation and principal place of business only in the exceptional case."[11]  Sonera Holding involved a judgment enforcement suit against a Turkish holding company registered in Turkey.  The defendant did not conduct any operations or own any property in New York or the United States.  The plaintiff argued that general jurisdiction should exist nonetheless because the defendant and its affiliates had engaged in some transactions with United States businesses, among other limited activities within the United States.  The district court held that these contacts were sufficient to create personal jurisdiction.  The Second Circuit reversed and remanded the decision.  After determining that New York law would control the issue of personal jurisdiction, the court held that "even a company’s ‘engage[ment] in a substantial, continuous, and systematic course of business’ is alone insufficient to render it at home in a forum."[12]  The defendant and its affiliates’ United States conduct did "not come close to making" the defendant "at home" in New York.[13]  The court also cautioned that "Daimler‘s gloss on due process" may lead New York courts to reevaluate the "doing business" standard for personal jurisdiction under New York law.[14]  Following Daimler, courts have also generally declined to follow the Ninth Circuit’s agency theory for obtaining general personal jurisdiction.[15]  Indeed, Daimler was initially brought to the Court on a challenge to the Ninth Circuit’s "agency" theory of jurisdiction, whereby it imputed the forum-contacts of a subsidiary to the parent where the subsidiary conducted "important" affairs of the parent.  While the Supreme Court ruled that it was unnecessary to reach the agency question, it indicated in dicta that this theory was not valid. [16]  While application of Daimler has helped deter several transnational suits with suspect United States connections, it is not a complete bar to transnational suits.  Deciding a motion for reconsideration filed after the issuance of Daimler, the District of Minnesota held that it could still assert general jurisdiction over a foreign parent company on the basis of its subsidiary’s location and substantial contacts to the forum.[17]  In Barriere v. Juluca, the Southern District of Florida determined that an Anguillan-based corporation was "at home" in Florida based on the maintenance of an in-state sales office, and the substantial activities of the company’s agents in the state.[18]  The district court recognized that "Daimler has undoubtedly limited the application of general jurisdiction to foreign defendants," but distinguished the case at hand because, unlike in Daimler, there was "no ‘absence’ of a Florida connection to the injury, perpetrator, or victim."[19]  The court held that the denial of personal jurisdiction would "effectively deprive American citizens from litigating in the United States for virtually all injuries that occur at foreign resorts maintained by foreign defendants."[20]  Interestingly, a second Southern District of Florida decision distinguished Barriere in a case involving a similar set of facts, finding no general jurisdiction over the foreign company.  In Aronson v. Celebrity Cruises, Inc., the court focused on the fact that, unlike in Barriere, there was no "sustained and direct contact with the state" such as an in-state office or telephone number.[21]  The court noted that the fact-specific nature of the general jurisdiction analysis "ha[d] led to some seemingly inconsistent results in this district."[22]  And, because Daimler has been interpreted as principally being a case about general jurisdiction, at least one court has held that it did not prohibit finding specific personal jurisdiction based on a theory of agency.  Distinguishing Daimler on the basis that it did not address the viability of establishing specific personal jurisdiction through an agency theory, in In re Chinese-Manufactured Drywall Products Liability Litigation, the Fifth Circuit upheld the exercise of specific jurisdiction over a foreign manufacturer and its subsidiary,[23] allowing the subsidiary’s contacts with the forum to be imputed to the manufacturer for the purpose of finding specific jurisdiction.[24]  Likewise, the District Court for the Northern District of California distinguished Daimler in In re Cathode Ray Tube (CRT) Antitrust Litigation, holding that the exercise of personal jurisdiction over a Chinese company manufacturing cathode ray tubes (CRTS) where there was specific personal jurisdiction was reasonable under the circumstances.[25]  Back to Top Part II:  Vindicating the Rule of Law in the Face of Transnational Fraud Targeting United States Companies In 2014, U.S.-based multinational companies successfully litigated in United States courts to vindicate the rule of law against fraud and corruption directed at them by plaintiffs’ lawyers from the U.S. and overseas.  Gibson Dunn was counsel for the companies involved in two of the most significant cases related to this issue, representing Chevron Corporation and Dole Food Company, Inc. On March 4, 2014, Judge Lewis A. Kaplan of the United States District Court for the Southern District of New York entered judgment for plaintiff Chevron in Chevron Corp. v. Donziger et al., Case No. 11-cv-0691.  The court found that the U.S. lawyer who masterminded a $9.2 billion judgment against the company in Ecuador did so "by corrupt means," and in the process violated U.S. federal laws prohibiting attempted extortion, wire fraud, money laundering, witness tampering, and obstruction of justice, as well as the Foreign Corrupt Practices Act.  The court entered judgment for Chevron and imposed equitable relief designed to ensure that "the defendants here may not be allowed to benefit from [the Ecuadorian judgment] in any way."  Calling the case "extraordinary" and "includ[ing] things that normally come only out of Hollywood," the court’s 485-page opinion detailed the evidence against U.S. plaintiff’s lawyer Steven Donziger and his team, finding that "[t]he wrongful actions of Donziger and his Ecuadorian legal team would be offensive to the laws of any nation that aspires to the rule of law, including Ecuador — and they knew it.  Indeed, one Ecuadorian legal team member, in a moment of panicky candor, admitted that if documents exposing just part of what they had done were to come to light, ‘apart from destroying the proceeding, all of us, your attorneys, might go to jail.’"  The court determined that Donziger and his team even "wrote the [Ecuadorian] court’s Judgment themselves and promised $500,000 to the Ecuadorian judge to rule in their favor and sign their judgment."  "If ever there were a case warranting equitable relief with respect to a judgment procured by fraud," the court concluded, "this is it." The decision follows a six-week trial and represents a major victory for Chevron in its multi-pronged response to the long-running purported environmental litigation emanating from Ecuador known as the Lago Agrio litigation.  Gibson Dunn represented Chevron in the closely watched case.  Chevron has long maintained that the proceedings in Ecuador were marred by fraud on the part of the plaintiffs’ lawyers, as well as corruption and collusion between the Lago Agrio plaintiffs ("LAPs"), the Ecuadorian court, and the Ecuadorian government.  As a consequence, Chevron sued the plaintiffs’ lawyers and other agents in the Southern District of New York under the federal RICO statute and other laws.  The decision vindicates Chevron’s claims of fraud and corruption and sends a powerful message to U.S. and other lawyers tempted to capitalize on the weaknesses of foreign judicial systems to attempt to extract payoffs from U.S. companies.  At the same time, it forcefully supports international efforts to promote the rule of law.  During the trial, Chevron presented overwhelming and virtually uncontested evidence that Donziger and his co-conspirators had procured the judgment through bribery and fraud, including forging expert reports, hiring Ecuadorian engineers to pose as "neutral" monitors to influence the Ecuadorian court, hiring consultants in the U.S. to ghostwrite the damages report of a purportedly neutral court-appointed "special master" (Richard Cabrera), and bribing the Ecuadorian judge who issued the decision (Nicolás Zambrano) to permit them to ghostwrite the decision in their favor.  Chevron’s evidence of the ghostwriting included verbatim quotations from the LAPs’ internal work product that appeared on dozens of pages of the judgment.  "These documents never were filed with the Lago Agrio court or made part of the official case record," the court noted, and "Defendants utterly failed to explain how or why their internal work product — their ‘fingerprints’ — show up in the Judgment."  Chevron also called as a witness former Ecuadorian judge Alberto Guerra, who testified that he had long served as Judge Zambrano’s paid ghostwriter, including in the case against Chevron.  Guerra produced bank deposit slips and other evidence of payments from the LAPs.  He also testified that he had served as a middle-man, conveying Judge Zambrano’s bribe solicitation to the LAPs, who accepted it, and then editing their draft of the judgment, which Judge Zambrano then issued as if it were his own.  Donziger called Judge Zambrano as a witness, who denied the bribery scheme, but admitted that Judge Guerra had been his ghostwriter.  Chevron also presented evidence that when Chevron sought discovery from the LAPs’ attorneys and consultants in U.S. courts, Donziger and his co-conspirators engaged in a campaign of obstruction to prevent the truth from emerging, filing false affidavits in U.S. courts and tampering with witnesses.  Chevron also presented evidence that Donziger and his co-conspirators had engaged in an improper pressure campaign against Chevron, propagating numerous falsehoods based on their fabricated evidence in the press and to various state and federal agencies in an attempt to extort a settlement from Chevron.     In rendering its decision in favor of Chevron, the court noted that "[t]he transnational elements of the case make it sensitive and challenging," but concluded based on the extensive evidentiary record that Donziger was liable under RICO for operating a racketeering enterprise that committed numerous federal crimes, including: Extortion.  The court found that Donziger engaged in two categories of conduct to pressure Chevron to settle the Ecuadorian lawsuit:  corrupt conduct in the Ecuadorian lawsuit itself, and the mounting of a public pressure campaign against the company based on false statements to the media, to U.S. regulatory and prosecutorial agencies, and criminal prosecutions of Chevron lawyers in Ecuador. Obstruction of Justice and Witness Tampering.  The court found that Donziger committed various acts of obstruction of justice and witness tampering to prevent disclosure of the fraud in U.S. discovery proceedings, including filing a false declaration in the name of Donziger’s co-conspirator and Ecuadorian counsel for the LAPs, Pablo Fajardo, in at least 17 U.S. district courts:  "Donziger’s conduct with respect to the Fajardo Declaration was obstruction of justice, plain and simple."  The court also held that Donziger had engaged in witness tampering by attempting to influence the testimony of Mark Quarles, a former environmental consultant for the LAPs, in related litigation between Chevron and the Republic of Ecuador in the U.S.  The court found that "[a]lthough Donziger knew that the statements he sought to have Quarles make were false, he urged Quarles to adopt them to prevent exposure of the truth regarding Cabrera and to mislead the court.  Donziger’s effort to influence Quarles’s testimony constitutes witness tampering." The Travel Act and Foreign Corrupt Practices Act ("FCPA").  The court held that Donziger and his co-conspirators’ scheme to bribe Cabrera violated the Travel Act because Donziger used a facility of interstate or foreign commerce in furtherance of violations of the FCPA by payment of bribes to Cabrera.  The court found that "[a]ll of the circumstances — including the fact that a court-approved payment process existed but that the LAP team secretly paid Cabrera outside of that process, used a secret account to do so, worried in emails about whether any of the money should go through Yanza’s personal account even temporarily, and used code names as they did it — indicate that the secret payments were illegal or at least improper, that the LAP team knew that, and that they attempted to conceal their payments."  Wire Fraud and Money Laundering.  The court found that Donziger engaged "in a number of deceitful schemes" in order to extract payment from Chevron, "each of which was furthered by use of the wires."  The court also held that the record "contains persuasive evidence" of a number of money laundering offenses, including the solicitation of funding for use in making secret payments to Cabrera.   The court also held that the evidence showing that Donziger’s team had written the Ecuadorian judgment, not Judge Zambrano, was "overwhelming and unrefuted."  In support of this finding, the court noted that with respect to the overlap between the LAPs’ internal work product and the judgment, "[t]here is no plausible explanation for their presence in the Judgment except that whoever wrote the Judgment copied parts of them."  The court found that Judge Zambrano, who was unable to remember even the most significant aspects of the 188-page judgment that he claimed to have authored, was "a remarkably unpersuasive witness."  In addition, the court held that former judge Guerra’s testimony was credible, determining that Guerra "told the truth regarding the bribe and the essential fact as to who wrote the Judgment.  The court is convinced that the LAPs bribed Zambrano and wrote the Judgment in their favor." Defendants’ appeal is pending before the Second Circuit. Also, in March of 2014 the California Court of Appeal unanimously affirmed dismissal of a case against Gibson Dunn client Dole Food Company as a "fraud on the court" perpetrated by U.S. and Nicaraguan plaintiffs’ lawyers.  Captioned Rojas Laguna v. Dole Food Company, Case No. BC233497, the appeal affirmed a trial court ruling in Tellez v. Dole Food Company, Los Angeles Superior Court, Case No. BC312852, where the court found that U.S. and Nicaraguan plaintiffs’ lawyers had "coached their clients to lie about working on banana farms, forged work certificates to create the appearance that their clients had worked on Dole-contracted farms, and faked lab results" as part of a scheme to obtain the judgment against Dole.  In the 25-page appellate decision, the court of appeal found no "valid ground" to disturb the trial court’s ruling "that plaintiffs and their counsel committed a fraud on the court by presenting false evidence and testimony." Tellez originally went to trial in 2007 and resulted in a multi-million dollar verdict against Dole, in favor of Nicaraguan plaintiffs claiming injuries from pesticide exposure on Dole-contracted farms in the late 1970s.  The U.S. and Nicaraguan plaintiffs’ lawyers handling the case pitched it as a watershed win for U.S. plaintiffs’ lawyers, who brought cases in the United States and Nicaragua and obtained billions in Nicaraguan judgments.  It was meant to open the floodgates to additional verdicts and suits. The decision from the court of appeal was the culmination of years of effort by Dole to have the Tellez proceedings re-opened and dismissed for plaintiff fraud, based on a rarely used procedure known as a petition for writ of error coram vobis.  Shortly after the Tellez judgment, Dole, represented by Gibson Dunn, exposed evidence in the related case Mejia v. Dole Food Company, Los Angeles Superior Court, Case No. BC340049, showing that the Tellez claims resulted from what the court found to be a wide-reaching fraudulent scheme perpetrated by U.S. and Nicaraguan lawyers.  Based on this evidence from Mejia–which, according to the trial court, showed a "heinous conspiracy" "to defraud th[e] court, to extort money from the defendants, and to defraud the defendants"–Dole successfully petitioned the Court of Appeal and the trial court to re-open the Tellez proceedings, after final judgment and while the case was pending appeal.  This petition paved the way for a year-long evidentiary process, where, as the Court of Appeal recounted, Dole showed by clear and convincing evidence that the Tellez plaintiffs and their counsel perpetrated fraud on the court by: "[i] recruiting persons who had never worked on banana farms as would be plaintiffs, [ii] coaching plaintiffs to lie about their work on banana farms, [iii] submitting false work certificates, [iv] falsifying sterility by submitting fraudulent laboratory reports and concealing children fathered by plaintiffs, and [v] interfering with witnesses and investigators by threats, intimidation, and tampering." In affirming these findings, the Court of Appeal held that the Tellez plaintiffs "raise no sufficiency of the evidence challenge with regard to the relevant findings in this case that they too committed a fraud on the court by submitting false testimony, fraudulent declarations and work certificates, and fraudulent laboratory reports as part of the fraudulent scheme orchestrated by their attorneys."  The Court held that Dole met the legal requirements for the "drastic remedy" of relief from a final judgment based on a petition of writ of error coram vobis.  Back to Top Part III:  Morrison v. National Australia Bank:  Limiting the Extraterritorial Reach of Federal Statutes In 2014, courts continued to apply the Supreme Court’s landmark decision in Morrison v. National Australian Bank Ltd. to limit the extraterritorial application of federal statutes. Morrison involved claims brought under Section 10(b) of the Securities Exchange Act of 1934 by foreign purchasers of the stock of a foreign company on a foreign stock exchange.[26]  Under preexisting case law in the federal courts of appeals, whether Section 10(b) applied was generally considered a jurisdictional question resolved with reference to a variety of tests designed to determine whether enough conduct had occurred in the United States or significant enough effects were felt in the United States to justify applying the statute.[27]   Morrison displaced those inquiries. Morrison reaffirmed that the extraterritoriality analysis turns on the statutory text, which must be read in light of the presumption against extraterritoriality.  Thus "[w]hen a statute gives no clear indication of an extraterritorial application, it has none."[28] If a statute does not overcome the presumption against extraterritoriality with such a "clear indication," the only remaining question is whether the asserted application of the statute at issue is extraterritorial, and thus impermissible.[29]  This analysis depends on "the focus of congressional concern" behind the statute at issue.[30]  The Morrison plaintiffs had alleged that the fraud at issue in the case had taken place in Florida, but the Court ruled that this connection to the United States was insufficient to permit application of Section 10(b).  After examining the statutory text, the Court concluded that Section 10(b) only prohibits deceptive conduct "in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered," meaning that Congress’ focus was "not upon the place where the deception originated, but upon purchases and sales of securities in the United States."[31]  In other words, "deception with respect to certain purchases or sales is necessary for a violation of the statute."[32]    The Court, therefore, held that Section 10(b) applies only to "the use of a manipulative or deceptive device or contrivance only in connection with the purchase or sale of a security listed on an American stock exchange, and the purchase or sale of any other security in the United States."[33]          1.   Developments in the Extraterritorial Reach of the Alien Tort Statute: Kiobel v. Royal Dutch Shell Petroleum Co. In the 2013 landmark case, Kiobel v. Royal Dutch Shell Petroleum Co., the Supreme Court held that, consistent with the presumption set forth in Morrison (that a statute without a clear indication of extraterritorial application has none), the ATS presumptively does not apply to extraterritorial activity.[34]  Twelve Nigerian nationals residing in the United States sued Dutch, British and Nigerian corporations pursuant to the ATS, alleging that the corporations aided and abetted the Nigerian Government in committing violations of the law of nations in Nigeria, including state-sponsored torture and murder.[35]  While noting that the ATS was "strictly jurisdictional" and "does not directly regulate conduct or afford relief," the Court held that the statute was nonetheless subject to the canon of statutory interpretation known as the presumption against extraterritorial application.[36]  That canon provides that "[w]hen a statute gives no clear indication of an extraterritorial application, it has none,"[37] and reflects the "presumption that United States law governs domestically but does not rule the world."[38]   The Court noted that international comity concerns "implicated in any case arising under the ATS, are all the more pressing when the question is whether a cause of action under the ATS reaches conduct within the territory of another sovereign."[39]  Finding that the ATS did not indicate extraterritorial application sufficient to overcome the presumption, the Court concluded that, "there is no indication that the ATS was passed to make the United States a uniquely hospitable forum for the enforcement of international norms,"[40] and held that violations of the ATS occurring outside the United States be shown to "touch and concern the territory of the United States . . . with sufficient force,"[41] for the claim to survive. While just a year and a half has passed since Kiobel, its effects have been immediate.   The case has been a basis for dismissing ATS actions in a number of circuit courts.  In Chowdhury v. Worldtel Bangladesh Holding, Ltd., the Second Circuit pointed to the Kiobel court’s comment that "all the relevant conduct took place outside the United States," barring the plaintiffs’ case for violations of the law of nations, the body of customary international law.[42]  On those grounds, the court overturned the plaintiff’s favorable jury verdict as to their ATS claims because all of the relevant conduct in the case occurred in Bangladesh.[43]  The Eleventh Circuit used similar language to dismiss a claim where the plaintiffs alleged violations of the ATS, but where the conduct in question occurred in Colombia.[44]  They also pointed out that the defendant’s nature as a corporation is not enough to overcome the presumption against extraterritoriality.[45]  In Mujica v. AirScan Inc., the Ninth Circuit also made clear that the defendants’ status as United States corporations did not alone provide a sufficient nexus.[46]  They stated that there needed to be sufficient conduct occurring in the United States, agreeing explicitly with the Eleventh and Second Circuits on their interpretation of Kiobel.[47]  Although the cases above have had dissenting opinions taking a different opinion of extraterritoriality, the overall trend in the Circuit courts has been to deny plaintiffs’ claims under the ATS unless a sufficient nexus to the United States is shown.[48] While Kiobel may have put ATS actions on life-support in certain Circuits, it is too early to call the death of extraterritorial ATS actions.  In June 2014, a unanimous panel of the United States Court of Appeals for the Fourth Circuit overturned a lower court’s dismissal of an action brought by four former Iraqi detainees against defense contractor, CACI International, Inc., claiming the United States defense contractor’s employees directed their torture in the Abu Ghraib prison.[49]  Writing for the panel, Judge Keenan concluded that the district court erred in finding it lacked jurisdiction because the alleged abuses occurred on foreign soil.[50]   Judge Keenan explained that the plaintiffs had alleged sufficient connection to the United States, including CACI having won permission and security clearance from the United States government to conduct the interrogations and the alleged acquiescence in the misconduct of CACI managers based in the United States, to "require a different result than that reached in Kiobel."[51]  The Court of Appeals then remanded the case to the district court that had originally dismissed the action.[52]         2.   Developments in the Extraterritorial Reach of Section 10(b) Securities Act Claims City of Pontiac Policemen’s & Firemen’s Retirement System v. UBS AG continued Morrison‘s trend of further restricting the extraterritorial application of the United States securities laws and signaled the continued limitation on the use of the United States securities laws exclusively to securities that are traded on United States exchanges.[53]  In City of Pontiac, the Second Circuit, in an issue of first impression, addressed the application of United States securities laws to foreign securities cross-listed on United States exchanges.  The court ruled that the ban on extraterritorial application of United States securities laws applies not only to situations where foreign securities are listed on foreign exchanges, but also when such securities are cross-listed on United States exchanges.[54]  Previously, the Supreme Court had ruled in Morrison that Section 10(b) of the Exchange Act did not "’provide[] a cause of action to foreign plaintiffs suing foreign [ ] defendants for misconduct in connection with securities traded on foreign exchanges.’"[55] The trend since Morrison for courts to restrict the application of United States securities laws to securities traded exclusively on United States exchanges continued in 2014 with Parkcentral Global Hub Ltd. v. Porsche Auto. Holdings SE.[56]  In Parkcentral, the Second Circuit held that a group of hedge funds that had entered into derivative transactions in the United States tied to the stock of a foreign issuer listed only on foreign exchanges could not bring a Section 10(b) suit against a foreign company for alleged fraudulent statements that it made primarily abroad relating to the foreign issuer.[57]  The plaintiff hedge funds argued that the securities-based swap agreements ("Swaps") entered into in the United States, which were economically equivalent to short sales of Volkswagen AG ("VW") stock listed on foreign exchanges, constituted "domestic transactions" under Morrison, such that they could bring a Section 10(b) action in the United States against German corporation Porsche Automobile Holdings SE ("Porsche") and its executives relating to allegedly fraudulent statements that Porsche had made regarding its intentions with respect to VW stock. The Second Circuit acknowledged that the Swaps may have qualified as domestic transactions under Morrison, and it also considered its decision in Absolute Activist Value Master Fund Ltd. v. Ficeto,[58] which outlined what constituted a domestic transaction.  Nonetheless, it ruled that, "while [Morrison] unmistakably made a domestic securities transaction (or transaction in a domestically listed security) necessary to a properly domestic invocation of Section 10(b), such a transaction is not alone sufficient to state a properly domestic claim under the statute."[59]  The court reasoned that where the claims "are so predominantly foreign as to be impermissibly extraterritorial" and likely to "place § 10(b) in conflict with the regulatory laws of other nations," then, based on "the principles underlying the Supreme Court’s decision in Morrison," plaintiffs may not bring a Section 10(b) claim even if it relates to a domestic transaction.[60]  The court observed that if a domestic transaction were alone sufficient to bring a Section 10(b) claim, then the United States securities laws would apply extraterritorially to "allegedly fraudulent conduct anywhere in the world" so long as a derivative transaction relating to the underlying foreign securities was entered into in the United States–even where the foreign defendants were unaware of the derivative transaction.[61]  Unwilling to accept that possibility, and noting that the allegations in Parkcentral related to predominantly foreign activity, the Second Circuit held that while the Swap transactions were consummated in the United States, that alone was insufficient under Morrison to state a Section 10(b) claim and therefore affirmed dismissal of the complaints.[62]          3.   Developments in the Extraterritorial Reach of Commodity Exchange Act Claims In Loginovskaya v. Batratchenko, 764 F.3d 266 (2d Cir. 2014), the Second Circuit held that a private right of action under the Commodity Exchange Act ("CEA") arises only when "a plaintiff shows that one of the four transactions listed in § 22 [of the CEA] occurred within the United States."[63]  Unless a plaintiff could show that a "domestic transaction" had occurred–evidenced either by a title transfer of the security within the United States or if a buyer or seller incurred "irrevocable liability" related to the transaction within the United States –there could be no private right of action for suits premised on foreign transactions.[64]  Domestic activity undertaken to complete a foreign transaction, such as a wire transfer of funds to the United States, was "insufficient to demonstrate a domestic transaction."[65]  The court rejected the argument that Morrison only foreclosed extraterritorial application of substantive laws, not those that merely created causes of action.  Morrison, it reasoned, did not draw "any such distinction," and the Supreme Court had confirmed this conclusion in Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013), which relied on Morrison to find that the Alien Tort Statute (a jurisdictional law) did not apply to extraterritorial conduct.[66]  It also noted that litigants who could not establish a "domestic transaction" could still "seek recovery through an administrative proceeding at the Commodity Futures Trading Commission."[67]         4.   Developments in the Extraterritorial Reach of Dodd-Frank Act Claims In Liu Meng-Lin v. Siemens AG, 763 F.3d 175 (2d Cir. 2014), the Second Circuit held that the anti-retaliation provision of the Dodd-Frank Act does not apply to extraterritorial conduct.  Liu Meng-Lin involved allegations that the plaintiff had been fired for reporting alleged improper payments by his employer in China, North Korea, and Hong Kong.  After the district court dismissed the plaintiff’s complaint, the Second Circuit affirmed.  The court first concluded that the complaint only alleged extraterritorial conduct, and that the defendant’s listing on the New York Stock Exchange was insufficient to overcome the presumption against extraterritorial application of United States securities laws.[68]  The court next found that the anti-retaliation provision did not suggest that Congress had intended for it to have extraterritorial application.  Nothing in the text or legislative history indicated such intent,[69] and even though other sections of the Dodd-Frank Act provided for exterritorial application, Congress’s decision to omit that language from the anti-retaliation provision counseled against relying on these other sections.[70]   The court also refused to credit agency regulations that supported extraterritorial application because "it is far from clear that an agency’s assertion that a statute has extraterritorial effect, unmoored from any plausible statutory basis for rebutting the presumption against extraterritoriality, should be given deference," and also because those regulations were insufficiently related to the statute’s anti-retaliation provision.[71]  On September 16, 2014, a federal district court in the District of Columbia found in favor of the Commodity Futures Trading Commission after a challenge was raised to its adoption of a general policy that provided for extraterritorial application of the derivatives provisions of the Commodities Enforcement Act and related regulations.[72]  The court concluded that "Congress has clearly indicated that the swaps provisions within Title VII of the Dodd-Frank Act–including any rules or regulations prescribed by the CFTC–apply extraterritorially whenever the jurisdictional nexus in 7 U.S.C. § 2(i) is satisfied."[73]  Given Liu Meng-Lin and the Supreme Court’s restrictive approach toward extraterritorial application of United States laws in Morrison and beyond, challenges to the Commodity Futures Trading Commission’s general policy may be forthcoming.         5.   Developments in the Extraterritorial Reach of the Sherman Act The Foreign Trade Antitrust Improvements Act ("FTAIA"), 15 U.S.C. § 6a, governs the application of the Sherman Act to foreign conduct.  Specifically, it provides that foreign anticompetitive conduct which does not involve United States import commerce, is subject to United States antitrust law only if that conduct: (1) had a direct, substantial, and reasonably foreseeable effect on United States domestic commerce, and (2) that effect "gives rise" to a Sherman Act claim.  In 2014, three United States Courts of Appeals issued rulings on the extraterritorial reach of the United States antitrust laws and the meaning of the FTAIA.  Two of the rulings arose from the ongoing litigation concerning the TFT-LCD panel industry. First, in United States v. Hui Hsiung, the Ninth Circuit joined the Second, Third, and Seventh Circuits in holding that the FTAIA does not create a jurisdictional limit on the power of federal courts, but rather "provides substantive elements under the Sherman Act in cases involving no import trade with foreign nations."[74]  The court then held that the defendants’ transactions between foreign producers and purchasers located in the United States were "import trade" and fell "outside the scope of the FTAIA."[75]  Because the convictions could be independently sustained on the basis of the clearly proven import trade, the court declined to decide whether the evidence relating to foreign sales of panels that were incorporated into finished consumer products before being imported into the United States was sufficient to establish that the foreign sales had a "direct" effect for purposes of the domestic effects exception to the FTAIA.[76] Second, in Motorola Mobility LLC v. AU Optronics Corp. ("Motorola I"), a Seventh Circuit panel ruled that the FTAIA did not extend United States antitrust law to a scenario that now arises regularly in United States antitrust matters:  the sale abroad of price-fixed products to a foreign buyer, which then integrates those price-fixed products into a finished product that is eventually sold in the United States.[77]  As the court explained, the effect on United States domestic commerce in such a situation is not "direct" under the FTAIA, but rather a situation where foreign conduct "filters through many layers and finally causes a few ripples in the United States."[78]  Nor did the foreign conduct "give rise" to a Sherman Act claim because Motorola–the company which sold finished products in the United States–"mediated" the effect of any price fixing by deciding what price to charge for those phones.[79]  But on July 1, 2014, the panel granted Motorola’s request for rehearing and vacated its March 27, 2014 decision, to allow for briefing and oral argument, including amici from the DOJ, FTC, Belgium, Japan, and Korea.     On rehearing in Motorola Mobility LLC v. AU Optronics Corp. ("Motorola II"), and again in writing for a unanimous panel, Judge Posner stepped back from Motorola I‘s finding that the effect of the alleged conduct on United States commerce was not direct, reasonable, and foreseeable.[80]  Instead, he conceded that the United States effect fell into a gray area.  He assumed for the sake of the opinion that there was a direct effect on United States commerce, but declined to decide that point.  Instead, the panel unanimously affirmed the dismissal, holding that Motorola could not meet the additional requirement that the effect on domestic United States commerce give rise to an antitrust cause of action because Motorola’s foreign subsidiaries that purchased the allegedly price-fixed product outside of the United States, and not Motorola itself, were the direct purchasers, Motorola did not have a claim under the Sherman Act.  The court’s decision in Motorola II undertook an extensive analysis of antitrust standing and the indirect-purchaser doctrine of Illinois Brick Co. v. Illinois, which bars indirect purchasers from pursuing Sherman Act claims for damages.[81]  While the court acknowledged that some parent-subsidiary relationships may be exempt from the Illinois Brick bar, it held that foreign subsidiaries are not because they are incorporated under and subject to foreign regulation.[82]  Judge Posner noted that the disadvantage of regulation shopping through foreign incorporation is that a subsidiary’s remedies are limited to those granted by its country of citizenship.[83]   Subsidiaries must "take the good with the bad,"[84] and the court held that Motorola, in attempting to avoid that consequence, was merely "asserting a right to forum shop." [85]  Although the court barred Motorola from recovering civil damages, it took care to differentiate the civil remedies from the scope of the United States DOJ’s authority in criminal matters.  The DOJ had asked the court to "hold that the conspiracy to fix the price of LCD panels had a direct, substantial, and reasonably foreseeable effect on United States import and domestic commerce in cellphones incorporating these panels."[86]  While the court declined to make such a finding, it addressed the government’s request for "a disclaimer that a ruling against Motorola would interfere with criminal and injunctive remedies sought by the government against antitrust violations by foreign companies."[87] It emphasized that the ruling was limited to whether a United States -based parent company may sue on behalf of its subsidiaries, and did not constrain the government’s future ability to seek criminal and injunctive remedies of foreign corporations, provided that it can demonstrate the requisite statutory effect on domestic commerce.[88]  Third, in Lotes Co. v. Hon Hai Precision Industry Co.–which concerned a Taiwanese electronics manufacturing company’s claim that the defendants, "a group of five competing electronics firms," had attempted to gain monopoly power over the entire USB connector industry–the Second Circuit addressed whether the plaintiff stated a viable claim under the Sherman Act.[89]  In concluding that the plaintiff’s allegations fell short, the court affirmed the lower court’s judgment dismissing the plaintiff’s claims, but on alternative grounds.[90] In doing so, the court overruled its prior decision in Filetech S.A. v. France Telecom S.A.[91] and held that "the requirements of the FTAIA are substantive and nonjurisdictional in nature," but rejected the plaintiff’s argument that the defendants had waived the FTAIA’s requirements.[92]  Adopting the Seventh Circuit’s (as opposed to the Ninth Circuit’s) approach, the court also held "that foreign anticompetitive conduct can have a statutorily required ‘direct, substantial, and reasonably foreseeable effect’ on United States domestic or import commerce even if the effect does not follow as an immediate consequence of the defendant’s conduct, so long as there is a reasonably proximate causal nexus between the conduct and the effect."[93]  The court, however, did not decide whether the plaintiff plausibly alleged "the requisite ‘direct, substantial, and reasonably foreseeable effect’ under the proper standard" because the court found that the plaintiff’s claim did not satisfy the FTAIA’s "second limitation," which requires that the "domestic effect . . . ‘give[ ] rise to’" the claim.[94]  In particular, the court explained, "regardless of what effect the defendants’ conduct ha[d] on United States domestic or import commerce, any such effect did not ‘give[ ] rise to’ the plaintiff’s claim.  To the contrary, in the causal chain the plaintiff allege[d], the plaintiff’s exclusion from the relevant market actually precede[d] the alleged domestic effect." [95] Although these decisions provide some guidance about the extraterritorial reach of the United States antitrust laws, Circuit Courts are not uniform in their approaches.  The Hsiung and Motorola II decisions were the subject of pending petitions for en banc review.  Motorola’s en banc petition has been denied.[96]  Motorola has stated it will request Supreme Court review.  The resolution of those petitions, and possible petitions to the United States Supreme Court for writs of certiorari, will remain at the front of observers’ attention in 2015. The Hsiung rehearing was also denied en banc and the opinion was superseded.[97]         6.   Developments in the Extraterritorial Reach of RICO The Racketeer Influenced and Corrupt Organizations Act ("RICO") 18 U.S.C. §§ 1961–1968 creates criminal and civil liability when a "pattern of racketeering"–arising from the violation of certain federal or state criminal laws–is associated with an "enterprise."  In 2014, the Second Circuit held in European Community v. RJR Nabisco, Inc. that RICO applies to extraterritorial conduct to the extent that conduct violates an underlying RICO-predicate criminal statute with extraterritorial reach.[98] European Community involved allegations that the defendant "managed, and controlled a global money-laundering scheme with organized crime groups" in violation of RICO and New York law.[99]  The district court dismissed the RICO claims because it found that RICO itself did not overcome the presumption against extraterritorial application, that the "focus" of RICO was the criminal enterprise, and in the case before it, the alleged enterprise was "located and directed outside" the United States.  The Second Circuit reversed, explaining that by establishing some RICO predicate crimes that could "only occur outside the United States" or could apply to both domestic and extraterritorial conduct, "Congress manifested an unmistakable intent that certain of the federal statutes adopted as predicates for RICO liability apply to extraterritorial conduct."[100]  Relying primarily on RICO’s statutory text, the Second Circuit held that: RICO applies extraterritorially if, and only if, liability or guilt could attach to extraterritorial conduct under the relevant RICO predicate. Thus, when a RICO claim depends on violations of a predicate statute that manifests an unmistakable congressional intent to apply extraterritorially, RICO will apply to extraterritorial conduct, too, but only to the extent that the predicate would. Conversely, when a RICO claim depends on violations of a predicate statute that does not overcome Morrison‘s presumption against extraterritoriality, RICO will not apply extraterritorially either.[101] It explained that, by making extraterritorial application of RICO "coextensive with extraterritorial application of the relevant predicate statutes," "unmistakable" congressional intent would be satisfied, there would be simplification of "what conduct is actionable in the United States," and certain "incongruous results" would be avoided, such as the shielding of "purely domestic conduct from liability simply because the defendant has acted in concert with a foreign enterprise."[102]  Applying its standard to the predicate statutes before it, the Second Circuit determined that the complaint at issue "allege[d] sufficient domestic conduct" for the mail fraud, wire fraud, and Travel Act allegations.[103]  In Petroleos Mexicanos v. SK Engineering & Construction Co. Ltd.,[104] the Second Circuit relied on European Community to affirm dismissal of a complaint filed by Pemex alleging RICO liability based on wire fraud.  Pemex had relied exclusively on the wire fraud statute in pleading predicate acts, which European Community established as insufficient to support extraterritorial application of the RICO statute.  In Reich v. Lopez,[105] a district court also considered RICO allegations based on violations of predicate offenses of the Travel Act and wire fraud. The court held that the plaintiff had alleged "sufficient domestic conduct for each of these predicate acts" to overcome extraterritoriality concerns.[106]  Specifically, the plaintiff alleged bribery of foreign officials via wire communications originating from the United States, defendants’ travel to and from the United States, defendants’ use of United States bank accounts, and defendants’ use of wire communications in United States interstate commerce to direct the alleged bad acts.[107] Back to Top Part IV:  Developments in Foreign Judgment Recognition and Enforcement While United States courts are finding ways to respond to the influx of transnational suits, foreign judgment recognition and enforcement suits, which have been on the rise for the past decade, showed no sign of slowing in 2014.   Indeed, many plaintiffs appear to see recognition and enforcement suits as a vehicle for making an end run around the traditional United States trial process.[108]  Instead of engaging in pre-trial discovery and a full domestic trial on the merits, they file suits asking United States courts to domesticate foreign judgments and to treat the factual findings and evidence from the foreign proceeding as the law of the case, often based on little more than proof of the foreign judgment itself.[109]   If the foreign judgment is the product of fraud, corruption or a breakdown in the rule of law, it threatens the integrity of the United States system, as it can be difficult and time-consuming for defendants to reveal the deficiencies in foreign judgments.[110] Subject to certain requirements, United States courts are willing to entertain the recognition and enforcement of final and enforceable foreign civil judgments for a fixed sum of money, excluding judgments for fines, penalties or taxes.  Further, the United States generally adheres to the rule that the courts of one nation will not enforce the penal laws of another nation.[111]  The question of whether a certain state statute constitutes "penal law" depends on whether its purpose is to punish an offense against the public justice of the state, or to afford a private remedy to a person injured by the wrongful act.[112] In a recent decision, Plata v. Darbun Enterprises, Inc., a California state court reiterated that "the issue whether a monetary award is a penalty within the meaning of the [Recognition Act] requires a court to focus on the legislative purpose of the law underlying the foreign judgment.  A judgment is a penalty even if it awards monetary damages to a private individual if the judgment seeks to redress a public wrong and vindicate the public justice, as opposed to affording a private remedy to a person injured by the wrongful act."[113] In the same vein, in Harvardsky Prumyslovy Holding v. Kozeny, an intermediate New York appellate court held that the Czech judgment at issue was not "a fine or other penalty" and was therefore entitled to recognition in New York even though it had been issued by a criminal court in the Czech Republic.[114]  In that case, the monetary judgment was found to be remedial and therefore the judgment was considered to constitute a "judgment of a foreign state granting . . . a sum of money," thus entitled to recognition in New York.[115]  In general, the guiding principle in determining whether a litigant in foreign court proceedings had sufficient notice of the proceedings so as to allow recognition and enforcement of the foreign judgment is whether a reasonable method of notification was employed and reasonable opportunity to be heard was afforded to the person affected.  In a recent decision, Gardner v. Letcher,[116] the District of Nevada pointed to the fact "that no summons was served and that the ‘Summary of the Document to be Served’ form was not completely filled out."  Because the Hague Convention’s requirements for service were also not satisfied, the court concluded that the Swiss court did not have personal jurisdiction over the defendant.[117]    In Midbrook Flowerbulbs Holland B.V. v. Holland America Bulb Farms, Inc.,[118] the Western District of Washington granted summary judgment in favor of Midbrook, which had been seeking to enforce a judgment from a Dutch court against Holland America, a Washington company.  The court granted an order recognizing the Dutch judgment pursuant to the Uniform Foreign-Country Money Judgments Recognition Act ("UFCMJRA").[119]  While the court recognized that the UFCMJRA allows courts not to recognize a foreign judgment if "[t]he specific proceeding in the foreign court leading to the judgment was not compatible with the requirements of due process of law," the court concluded that Holland failed to demonstrate that the Dutch proceedings were not compatible with due process.[120]    Back to Top Part V:  Developments in Transnational Litigation and Judgment Collection         1.   Argentina v. NML Litigation:  The Supreme Court’s Restrictive Reading of the FSIA and Sovereign Immunity On June 16, 2014, the United States Supreme Court delivered two rulings related to a dispute arising from Argentina’s 2001 default on its external debt, Republic of Argentina v. NML Capital, Ltd., 134 S. Ct. 2250 (2014), and Republic of Argentina v. NML Capital, Ltd., 134 S. Ct. 2819 (2014).  In 2005 and 2010, Argentina restructured most of that debt by offering creditors new securities, with less favorable terms, in exchange for the defaulted ones.  Most bondholders accepted Argentina’s offer.  Respondent, NML Capital, Ltd. ("NML"), among others, did not and sued Argentina in a United States federal district court to collect the debt, and prevailed. The most important of these Supreme Court rulings, Republic of Argentina v. NML Capital, Ltd. ("NML I"), 134 S. Ct. 2250 (2014), concerned a dispute over third-party subpoenas that NML served on two banks in 2010 to discover information about Argentina’s property and financial transactions.[121]  Theodore B. Olson of Gibson Dunn argued the case before the Supreme Court on behalf of NML.  One of the banks, joined by Argentina, moved to quash the subpoena, and NML moved to compel compliance.[122]  The district court upheld the requested discovery, and the Second Circuit affirmed.[123]  Joined by the United States as amicus curiae, Argentina requested the Supreme Court to reverse the decision of the Second Circuit and to hold that the FSIA protects it from discovery into its assets held outside the United States and other assets Argentina claimed were immune from execution in United States courts.  In a 7-1 decision, the Supreme Court rejected Argentina’s arguments, upheld NML’s subpoenas, and held that the FSIA did not confer upon Argentina the requested protection from post-judgment discovery of information, thereby affirming the District Court and the Second Circuit.[124] Justice Scalia, writing for the majority, began by noting that "[t]he rules governing post-judgment execution proceedings are quite permissive."[125]  Foreign sovereign immunity," Justice Scalia noted, "is, and always has been, ‘a matter of grace and comity on the part of the United States, and not a restriction imposed by the Constitution.’"[126]  After setting out the evolution of the application of comity, the Supreme Court emphasized that the FSIA now provides a "comprehensive" set of legal standards to govern any claim of immunity by foreign sovereign States and, as such, "any sort of immunity defense made by a foreign sovereign in an American court must stand on the Act’s text. Or it must fall."[127]  According to the Court, nowhere in the FSIA’s "comprehensive" framework did the legislature prohibit or limit discovery in aid of execution of a foreign sovereign’s assets.[128]  The Court also rejected Argentina’s argument that the FSIA categorically barred discovery into assets that a foreign sovereign regards as diplomatic or military.  While the subpoenas were "bound to turn up information about property that Argentina regards as immune," the Court noted that NML "may think the same property not immune."[129]  In that situation, the foreign sovereign’s "self-serving legal assertion will not automatically prevail; the District Court will have to settle the matter."[130] Regarding the potential effects of granting such a discovery order on international comity and international relations, the Court responded that "[t]hese apprehensions are better directed to that branch of government with authority to amend the Act."[131]  The ruling has been referred to in seven decisions from federal courts of appeals from three Circuits, the Second, Third, and Seventh Circuits.[132]     In conjunction with the ruling in NML I, the Court denied Argentina’s petition for certiorari seeking review of a different Second Circuit decision that required Argentina to repay NML and other holders of defaulted bonds any time it made payments on the securities that it had issued in the 2005 and 2010 exchange offers.  See Republic of Argentina v. NML Capital, Ltd. ("NML II"), 134 S. Ct. 2819 (2014).  Since its default, Argentina had not made a single payment on NML’s bonds, whereas it had continued to pay other creditors who accepted smaller exchange offers that Argentina had pressed upon them.[133]  NML sought, and the district court issued, an injunction requiring Argentina to provide equal treatment to NML’s bonds.[134]  The Second Circuit affirmed this injunction, concluding that Argentina breached a provision in its bond agreement with NML that required Argentina to treat NML’s bonds at least equally to the rest of its external debt.[135]  Moreover, the Second Circuit held that the injunction was consistent with the FSIA,[136] and that it served the public interest by ensuring that contracting parties meet their obligations.[137]  Argentina was supported by the governments of France, Mexico, and Brazil (but not the United States), in its petition for review of that decision, but the Supreme Court rejected it, allowing the District Court’s injunctions — which had been stayed — to take effect.[138]          2.   Additional Developments in the Enforcement of Judgments Against Sovereign Entities In another case related to the Argentine bond dispute, on December 23, 2014, in Aurelius Capital Master, Ltd. v. Republic of Argentina, the Second Circuit issued a summary order upholding orders by the Southern District of New York compelling Argentina and third-party banks to comply with additional discovery demands issued by NML.[139]  The court held that, even if NML’s discovery related to diplomatic or military property potentially immune from attachment under international treaties or the FSIA, Argentina’s assertions of immunity did not entitle it to withhold otherwise discoverable information.[140]  The court reasoned as follows: First, the Second Circuit rejected Argentina’s contention that the FSIA prohibits discovery of sovereign property that is potentially immune from attachment, noting that the United States Supreme Court had already rejected this argument in the NML I ruling summarized in the preceding section.[141] Second, the Second Circuit rejected Argentina’s argument that the Vienna Convention on Diplomatic Relations and the Vienna Convention on Consular Relations–treaties to which both the United States and Argentina are signatories–prohibited attachment of diplomatic and consular property and discovery of diplomatic and consular documents.[142]  The court held that to the extent the discovery demands reached diplomatic or consular property that was immune from attachment, Argentina should object if and when NML actually sought to execute on such property.[143]  Insofar as the discovery demands reached diplomatic or consular documents that were privileged or inviolable under the treaties, the court held that Argentina should present its objections to the District Court "in the form of assertions of privilege or inviolability."[144] Third, the Second Circuit rejected Argentina’s argument that discovery into a foreign sovereign’s purported military property was precluded by the FSIA, 28 U.S.C. § 1611.  Citing NML I, the court reiterated that "the potential immunity of property from attachment does not preclude discovery of that property," and noted that such discovery may in fact be "necessary for the parties to properly litigate the existence of immunity."[145] In a different 2014 case implicating the FSIA, on August 29, 2014, the D.C. Circuit delivered its ruling in Odhiambo v. Republic of Kenya.[146]  Plaintiff, an employee of a Kenyan private bank who had reported certain tax irregularities associated with accounts at his employer bank, claimed he had made the report in response to an ad by the Kenya Revenue Authority promising a reward in exchange for such information.[147]  The plaintiff claimed that Kenya had failed to pay him the promised reward.[148]  After the plaintiff was identified as an informant, he feared for his safety and Kenyan authorities assisted him in moving to the United States as a refugee.[149]  The plaintiff then sued Kenya for breach of contract in relation to the alleged underpayment of rewards.[150]  Kenya moved to dismiss on the basis of sovereign immunity. The D.C. Circuit held that the FSIA barred the suit because none of the statute’s enumerated exceptions applied.  Specifically, the court found that Kenya’s accession to the 1951 Convention Relating to the Status of Refugees was not sufficient for "the exacting showing required for waivers of foreign sovereign immunity."[151]  Furthermore, the court rejected, among others, plaintiff’s argument that jurisdiction existed under the third clause of the "commercial activity exception," [152] which permits suit when a claim is based "upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States."[153]  The court agreed that plaintiff’s claim was based on Kenya’s commercial activity outside the United States, but found that it could not be found to cause a direct effect in the United States merely because Odhiambo now lived there.[154]  The court noted that in prior breach of contract cases, the point of whether an effect was "direct" had hinged on whether the United States was the place of performance of the contract.[155]  The court concluded that Kenya’s alleged breach of contract only had an indirect effect in the United States as a result of Odhiambo’s intervening relocation.[156]  According to the court, to allow plaintiffs to sue for breach of contract under this exception after moving to the United States would vastly expand the scope of the exception.[157]  The court therefore held that "breaching a contract that does not establish or necessarily contemplate the United States as a place of performance does not cause a direct effect in the United States."[158]          3.   Yukos v. Samaraneftegaz:  Developments in Enforcement of Arbitral Awards In 2007, Yukos Capital S.A.R.L. secured an award in the amount of 3,080,711,971 Russian Rubles plus fees and costs against OAO Samaraneftegaz in an arbitration conducted in New York under the ICC Rules of Arbitration.  In 2010, Gibson Dunn filed a petition on behalf of Yukos Capital to confirm the award in the Southern District of New York.  After extensive discovery into the validity of the arbitration agreement, which Samaraneftegaz asserted was invalid, the Southern District granted the petition in 2013.  The Southern District rejected Samaraneftegaz’s defenses to confirmation, including:  (1) Samaraneftegaz’s request that the Court dismiss the enforcement action on forum non conveniens grounds; (2) Samaraneftegaz’s claim that the Southern District lacked personal jurisdiction over Samaraneftegaz; and (3) Samaraneftegaz’s arguments that the award should not be enforced under the New York Convention because Samaraneftegaz lacked notice of the arbitration and the award was against public policy.[159]  Samaraneftegaz appealed.  In a later proceeding, the Southern District converted the amounts awarded in Russian rubles into United States dollars using the exchange rate as of the date the arbitration award was issued.[160]  Samaraneftegaz appealed that order as well. On November 4, 2014, the Second Circuit, in a summary opinion, affirmed the district court’s decision to enforce the award and to convert the rubles award into dollars as of the date of the award.[161] The court rejected Samaraneftegaz’s claim that enforcement of the award violated public policy, finding that the "district court was not required to defer to [a] Russian court’s determination that enforcement would violate Russian public policy" and that Samaraneftegaz had "never made any public policy arguments to the arbitrators."  Regarding the currency conversion, the court noted that the district court had followed "prevalent practice" by having "correctly determined that the proper date of conversion is the date that enforcement action arose, which is necessarily the date of the arbitration award."[162]  Robert Weigel of Gibson Dunn argued the case on behalf of Yukos Capital. In furtherance of its enforcement strategy, Yukos Capital moved for a turnover order based on the actions that Samaraneftegaz had taken that effectively depleted its available assets.  Turnover orders are a judgment enforcement mechanism available under New York law.[163]  On January 9, 2014, the Southern District of New York issued a turnover order in favor of Yukos Capital.[164]  The court enjoined Samaraneftegaz from paying dividends, making loans or any other asset transfers to its shareholders or corporate affiliates until it paid Yukos Capital or posted a bond for the full value of the award. The court also rejected Samaraneftegaz’s argument that it would suffer irreparable harm from the turnover order–finding instead that Yukos Capital would suffer irreparable harm and have no adequate remedy at law in the absence of the turnover order because Samaraneftegaz had made sizeable transfers of dividends and interest free loans to its corporate affiliates, effectively depleting its available assets.  Finally, the court characterized Samaraneftegaz’s efforts to re-litigate the issues that had already been decided as "strained and entirely unsubstantiated," as well as "a transparent attempt to escape paying the judgment."  Samaraneftegaz appealed the turnover order.  Expressing no opinion as to the merits of the underlying issues, the Second Circuit vacated the turnover order and remanded to the district court to clarify its ruling on alternative service of the turnover motion and to explain its conclusion that no foreign law conflict exists. Back to Top Part VI:  Developments in Transnational Discovery Until recently, Section 1782 was rarely used as a discovery tool in aid of foreign litigation, but since 2010 it is increasingly becoming an essential tool as litigants pursue transnational lawsuits.  Section 1782 enables litigants to use the United States’ broad discovery process to obtain evidence that might otherwise be unavailable within the constraints of pending foreign proceedings.  Section 1782 also does not restrain the use of such evidence if offered in a domestic action.  As a result, litigants may initially seek the discovery for use in the foreign litigation, but may ultimately use the evidence collected to bring a separate action in the United States.  While there are limits to the availability of Section 1782 discovery, 2014 saw the expansion of certain of those limits.          1.   To which foreign tribunals does Section 1782 apply? Courts remain divided over which foreign arbitral tribunals may serve as the basis for a Section 1782 application. Since Intel, courts have universally found that investor-state arbitration–which arises from treaty obligations contained in bilateral investment treaties or multilateral investment treaties–constitutes a "tribunal" under Section 1782.[165] With respect to private commercial arbitration, however, appellate courts have not provided clear guidance on whether Section 1782 assistance is available.  The Eleventh Circuit initially seemed open to the idea and held, in In re Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc., that Section 1782 applied to a private commercial arbitration because the tribunal was a "first-instance decision-maker whose judgment was subject to judicial review."[166]  However, in January 2014, the Eleventh Circuit vacated the decision–in part because it did not have a sufficiently developed record on the nature of the arbitration tribunal–and issued a new decision that did not reach the issue because two lawsuits in Ecuadorian courts had been filed, thus obviating the need for the Eleventh Circuit to go further.[167]  As a result, the only appellate rulings on the issue are from the Courts of Appeals for the Fifth[168] and Second[169] Circuits, which do not recognize foreign private arbitral bodies (as opposed to investor state arbitration) as "tribunals" for Section 1782 purposes.  Notwithstanding these appellate rulings, a number of federal district courts have ruled to the contrary, and have allowed the use of Section 1782 to collect evidence for use in purely private foreign arbitrations.[170]          2.   How do Foreign Blocking, Privacy and Secrecy Laws Impact the Application of Section 1782 to Foreign Persons? Foreign statutes seldom provide American-style discovery, like that found in Section 1782.  While Section 1782 has some built-in protections–like the statutory requirement that prohibits compelled disclosure in violation of "any legally applicable privilege" and the Intel factors that grant courts discretion to deny "unduly intrusive or burdensome requests" and requests that attempt to "circumvent foreign proof gathering restrictions"–courts deciding Section 1782 applications have weighed the impact of foreign statutes and come out on both sides.[171]  In October 2014, the Southern District of New York quashed a Section 1782 subpoena seeking documents located in Russia and Ukraine from the law firm Chadbourne & Parke LLP for use in proceedings in Amsterdam, Netherlands, in part on the ground that they were "protected under Russian and Ukrainian client confidentiality and personal data privacy laws" such that disclosure "would offend core tenets of our [United States] legal system (and those of Russia and Ukraine)."[172]          3.   Section 1782 and Documents Located Abroad Whether documents located outside the United States can be obtained through Section 1782 discovery from a corporation with a presence in the United States is the subject of dispute.  Where the target is "found" in the district and has "control" over the documents under the Federal Rules of Civil Procedure, courts have been wrestling inconclusively with whether Section 1782 permits discovery of documents located overseas. In 2014, several courts denied discovery applications that sought documents located overseas.  In In re Slawomir Kaczor and Tomasz Rogucki,[173] the Southern District of Ohio denied a Section 1782 application for discovery in aid of Polish proceedings because, among other things, the discovery sought was located in Poland and "courts have read into § 1782 a threshold requirement that the material sought be located in the United States."[174]  The court also noted that the legislative history of Section 1782 establishes that it "was intended to aid in obtaining oral and documentary evidence in the United States . . . and was not intended to provide discovery of evidence maintain[ed] within a foreign district."[175] Likewise, in In re Certain Funds, Accounts, and/or Investment Vehicles Managed by Affiliates of Fortress Investment Group LLC,[176] the Southern District of New York observed that "courts have read into § 1782 a threshold requirement that the material sought be located in the United States," though the court denied the discovery application on other grounds." Back to Top    [1]   134 S. Ct. 746 (2014).    [2]   No. B233497, 2014 WL 891268 (Cal. Ct. App. Mar. 7, 2014).    [3]   561 U.S. 247 (2010).    [4]   134 S. Ct. 746 (2014).    [5]   Id. at 751.     [6]   Id. at 761 (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011)) (quotation marks omitted).     [7]   Daimler, 134 S. Ct. at 749 (citing Goodyear, 131 S. Ct. at 2853-54).    [8]   Id. (citation omitted).     [9]   See, e.g., Air Tropiques, Sprl v. N. & W. Ins. Co., No. H-13-1438, 2014 WL 1323046, at *10 (S.D. Tex. Mar. 31, 2014); Brown v. CBS Corp., 19 F. Supp. 3d 390, 397-98 (D. Conn. 2014); Krishanti v. Rajaratnam, No. 2:09-cv-05395 (JLL)(JAD), 2014 WL 1669873, at *6 (D.N.J. Apr. 28, 2014); Intellectual Ventures I LLC v. Ricoh Co., Ltd., No. 13-474-SLR, 2014 WL 4748703, at *3 (D. Del. Sept. 12, 2014).    [10]   Air Tropiques, 2014 WL 1323046, at *10.   [11]   750 F.3d 221, 223 (2d Cir. 2014).    [12]   Sonera Holding, 750 F.3d at 226 (quoting Daimler, 134 S. Ct. at 761).    [13]   Sonera Holding, 750 F.3d  at 224-26.    [14]   Id. at 224 n.2.   [15]   The Ninth Circuit’s agency theory focused on a showing of "special importance of the services performed by the subsidiary."  Bauman v. DaimlerChrysler Corp., 644 F.3d 909, 920 (9th Cir. 2011).  They looked to whether the services performed by the subsidiary were of the sort that, had they not been performed, would have had to have been performed by the parent corporation’s own officials.  Id.   [16]   Daimler, 134 S.Ct. at 759-60.    [17]   George v. Uponor Corp., 988 F. Supp. 2d 1056, 1079-80 (D. Minn. 2013), reconsideration denied (Apr. 14, 2014).    [18]   No. 12-23510-CIV, 2014 WL 652831, at *8-9 (S.D. Fla. Feb. 19, 2014).   [19]   Id. at *9.    [20]   Id.    [21]   No. 12-cv-20129, 2014 WL 3408582, at *6-7 (S.D. Fla. May 9, 2014).    [22]   Id. at *3.   [23]   753 F.3d 521, 528, 530 (5th Cir. 2014).    [24]   Id. at 531-32.   [25]   27 F. Supp. 3d 1002, 1006, 1015 (N.D. Cal. 2014).    [26]   See 561 U.S. at 250.    [27]   Id. at 255-62.    [28]   Id. at 255, 261.    [29]   Id. at 255.    [30]   Id. at 266.   [31]   Id.   [32]   Id. at 272 (quoting Section 10(b)).    [33]   Id. at 273.   [34]   133 S. Ct. 1659 (2013).    [35]   Id. at 1660.    [36]   Id. at 1664.    [37]   Id. at 1661.   [38]   Id. at 1664.    [39]   Id. at 1665.   [40]   Id. at 1668.   [41]   Id. at 1669.   [42]   Chowdhury v. Worldtel Bangladesh Holding, Ltd., 746 F.3d 42, 49 (2d Cir. 2014) (citing Kiobel, 133 S.Ct. at 1669).   [43]   Id.    [44]   Cardona v. Chiquita Brands Int’l, Inc., 760 F.3d 1185, 1189 (11th Cir. 2014).   [45]   Id.   [46]   771 F.3d 580, 593 (9th Cir. 2014).   [47]   Id. at 596 (agreeing with the Eleventh Circuit in Cardona and the Second Circuit in Daimler AG).   [48]   See also Ben-Haim v. Neeman, 543 F. App’x 152, 154 (3d Cir. 2013) (taking the same stance as the Second, Eleventh and Ninth Circuits).   [49]   Al Shimari v. CACI Premier Tech., Inc., 758 F.3d 516 (4th Cir. 2014).   [50]   Id. at 520.   [51]   Id. at 529.   [52]   Al Shimari v. CACI Int’l, Inc., 951 F. Supp. 2d 857 (E.D. Va. 2013).   [53]   752 F.3d 173 (2d Cir. 2014).   [54]   Id. at 188.    [55]   Id. at 179 (quoting Morrison, 561 U.S. at 250-51).   [56]   763 F.3d. 198 (2d Cir. 2014).   [57]   Id. at 215.   [58]   677 F.3d 60 (2d Cir. 2012).   [59]   Parkcentral, 763 F.3d at 215 (emphasis added).    [60]   Id. at 215-18.    [61]   Id. at 214.    [62]   Id. at 218.   [63]   764 F.3d at 272.    [64]   Id. at 272-74.    [65]   Id. at 275 (citation omitted).    [66]   Id. at 272-73.    [67]   Id. at 270, 273 (citation omitted).   [68]   Liu Meng-Lin, 763 F.3d at 179.    [69]   Id. at 180.   [70]   Id. at 180-81.    [71]   Id. at 182-83.   [72]   Sec. Indus. and Fin. Mkts. Assoc. v. U.S. Commodity Futures Trading Comm’n, No. 13-1916 (PLF), 2014 WL 4629567 (D.D.C. Sept. 16, 2014).    [73]   Id. at *42.    [74]   758 F.3d 1074, 1088 (9th Cir. 2014).    [75]   Id. at 1091.    [76]   Id. at 1093.    [77]   746 F.3d 842 (7th Cir. 2014) (Posner, J.), reh’g granted and opinion vacated (July 1, 2014).    [78]   Id. at 844 (internal quotation marks omitted).    [79]   Id. at 845.    [80]   No. 14-8003, 2015 WL 137907 (7th Cir. Jan. 12, 2015).    [81]   431 U.S. 720 (1977).   [82]   Motorola II, 2015 WL 137907 at *6.     [83]   Id. at *5.   [84]   Id. at *12 (internal quotation marks omitted).   [85]   Id. at *5.    [86]   Id. at *9 (internal quotation marks omitted).   [87]   Id. at *10.    [88]   Id. at *9-10.   [89]   753 F.3d 395, 398 (2d Cir. 2014).    [90]   Id. at 398-99.    [91]   157 F.3d 922 (2d Cir. 1998).   [92]   Lotes, 753 F.3d at 398-99, 404-09.    [93]   Id. at 398.    [94]   Id. (quoting 15 U.S.C. § 6a(2)).   [95]   Id.   [96]   Motorola Mobility LLC v. AU Optronics Corp., 773 F.3d 826 (7th Cir. 2014), reh’g en banc denied, No. 14-8003, 2015 WL 137907 (7th Cir. Jan. 12, 2015).    [97]   United States v. Hui Hsiung, No. 12-10492, 2015 WL 400550 (9th Cir. Jan. 30, 2015).   [98]   764 F.3d 129 (2d Cir. 2014).   [99]   Id. at 133.  [100]   Id.  [101]   Id.  [102]   Id. at 139. [103]   Id. [104]   572 F. App’x 60 (2d Cir. 2014). [105]   2014 WL 4067179 (S.D.N.Y. Aug. 18, 2014). [106]   Id. at *5.  [107]   Id. [108]   See Osorio v. Dole Food Co., 665 F. Supp. 2d 1307 (S.D. Fla. 2009); Bridgeway Corp. v. Citibank, 45 F. Supp. 2d 276, 288 (S.D.N.Y. 1999), aff’d, 201 F.3d 134 (2d Cir. 2000). [109]   See Restatement (Third) of Foreign Relations Law §§ 481-86 (1987); Uniform Foreign-Country Money Judgments Recognition Act, ULA FC Money JMT § 3(a) (2005). [110]   See William E. Thomson & Perlette Michèle Jura, Confronting the New Breed of Transnational Litigation: Abusive Foreign Judgments, U.S. Chamber Institute for Legal Reform (Oct. 2011). [111]   Huntington v. Attrill, 146 U.S. 657, 673-74 (1892). [112]   Id. [113]   No. D062517, 2014 WL 341667, at *5 (Cal. Ct. App. Jan. 31, 2014). [114]   117 A.D.3d 77, 79 (2014).  [115]   Id. at 80.  [116]   No. 2:12-CV-00488-KJD, 2014 WL 3611587, at *1 (D. Nev. July 18, 2014). [117]   Id. [118]   No. 14-5409 RJB, 2014 WL 5605058, at *1 (W.D. Wash. Nov. 4, 2014). [119]   Id.  [120]   Id. at *6.  [121]   NML I, 134 S. Ct. at 2253.  [122]   Id.  [123]   Id.  [124]   When it issued the bonds, Argentina expressly waived any jurisdictional immunity it otherwise had under the FSIA. [125]   NML I, 134 S. Ct. at 2254. [126]   Id. at 2255 (citing Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 486 (1983)).  [127]   NML I, 134 S. Ct. at 2255-56.   [128]   Id. at 2256. [129]   Id. at 2258. [130]   Id. [131]   Id.  [132]   Mare Shipping Inc. v. Squire Sanders (US) LLP, 574 F. App’x 6 (2d Cir. 2014); Exp.-Imp. Bank of the Republic of China v. Grenada, 768 F.3d 75 (2d Cir. 2014); Gucci Am. v. Weixing Li, 768 F.3d 122 (2d Cir. 2014); Ohntrup v. Makina Ve Kimya Endustrisi Kurumu, 760 F.3d 290 (3d Cir. 2014); Pine Top Receivables of Ill., LLC v. Banco de Seguros del Estado, 771 F.3d 980 (7th Cir. 2014); Bormes v. United States, 759 F.3d 793 (7th Cir. 2014); Gates v. Syrian Arab Republic, 755 F.3d 568 (7th Cir. 2014). [133]   NML Capital, Ltd. v. Republic of Argentina, 727 F.3d 230, 237 (2d Cir. 2013).  [134]   Id.  [135]   Id. at 237, 241.  [136]   Id. [137]   Id. at 248.  [138]   NML II, 134 S. Ct. 2819. [139]   No. 13-4054, 2014 WL 7272279 (2d Cir. Dec. 23, 2014).  [140]   Id. at *1-2.  [141]   Id. at *1. [142]   Id. at *2. [143]   Id. [144]   Id. [145]   Id. [146]   764 F.3d 31 (D.C. Cir. 2014). [147]   Id. at 33.  [148]   Id.  [149]   Id.  [150]   Id.  [151]   Id. [152]   Id. [153]   28 U.S.C. § 1605(a)(2).  [154]   Odhiambo, 764 F.3d at 38.  [155]   Id.  [156]   Id.  [157]   Id. at 39.  [158]   Id. at 40.  [159]   Id. [160]   Yukos Capital S.A.R.L. v. OAO Samaraneftegaz, 963 F.Supp.2d 289 (S.D.N.Y. Aug. 6, 2013). [161]   Yukos Capital S.A.R.L. v. Samaraneftegaz, No. 13-3357-CV, 2014 WL 5572696 (2d Cir. Nov. 4, 2014). [162]   Id. at *3. [163]   N.Y. C.P.L.R. 5225(a). [164]   Yukos Capital S.A.R.L. v. OAO Samaraneftegaz, 2014 WL 81563 (S.D.N.Y. Jan. 9, 2014). [165]   See, e.g., In re Appl. of Mesa Power Group, LLC, 2012 WL 6060941 (D.N.J. Nov. 20, 2012); In re Appl. of Chevron Corp., 2012 WL 3636925 (S.D. Fla. June 12, 2012). [166]   685 F.3d 987, 997 (11th Cir. 2012). [167]   Application of Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc., 747 F.3d 1262 (11th Cir. 2014). [168]   The Fifth Circuit, in El Paso Corp. v. La Comision Ejecutiva Hidroelecctrica Del Rio Lempa, issued an unpublished opinion that Section 1782 did not apply to a private commercial arbitration conducted pursuant to an agreement under the United Nations Commission on International Trade Law (UNCITRAL) arbitration rules.  341 F. App’x 31 (5th Cir. 2009). [169]   The Second Circuit held, in a pre-Intel decision that Section 1782 did not apply to a private foreign arbitration held by the ICC International Court of Arbitration.  NBC v. Bear Stearns & Co., 165 F.3d 184 (2d Cir. 1999). [170]   See, e.g., In re Owl Shipping, LLC & Oriole Shipping, LLC, 2014 WL 5320192 (D.N.J. Oct. 17, 2014) (finding that the London Maritime Arbitrators Association constituted a Section 1782 tribunal). [171]   Intel, 542 U.S. at 264-65. [172]   In re Application Pursuant to 28 U.S.C. Section 1782 of Okean B.V. and Logistic Solution Intern. to Take Discovery of Chadbourne & Parke LLP, 2014 WL 5090028 (S.D.N.Y. Oct. 10, 2014). [173]   2014 WL 4181618 (S.D. Ohio Aug. 21, 2014) (quoting In re Certain Funds, Accounts, and/or Inv. Vehicles Managed by Affiliates of Fortress Inv. Grp. LLC, 2014 WL 3404955, at *2 (S.D.N.Y. July 9, 2014)). [174]   Id. at *3. [175]   Id.  [176]   In re Certain Funds, 2014 WL 3404955, at *4 (S.D.N.Y. July 9, 2014).    Gibson, Dunn & Crutcher’s Transnational Litigation Practice Group lawyers are available to assist in addressing any questions you may have regarding these developments.  Please contact any member of the Gibson Dunn team, the Gibson Dunn lawyer with whom you usually work, or any of the following practice group co-chairs: United States:Randy M. Mastro – New York (+1 212-351-3825, rmastro@gibsondunn.com) Theodore J. Boutrous, Jr. – Los Angeles (+1 213-229-7000, tboutrous@gibsondunn.com)Scott A. Edelman – Los Angeles (+1 310-557-8061, sedelman@gibsondunn.com)Andrea E. Neuman – New York (+1 212-351-3883, aneuman@gibsondunn.com) William E. Thomson – Los Angeles (+1 213-229-7891, wthomson@gibsondunn.com) Perlette Michèle Jura – Los Angeles (+1 213-229-7121, pjura@gibsondunn.com) Europe:Philip Rocher – London (+44 20 7071 4202, procher@gibsondunn.com)Charlie Falconer – London (+44 20 7071 4270, cfalconer@gibsondunn.com)Patrick Doris – London (+44 20 7071 4276, pdoris@gibsondunn.com) © 2015 Gibson, Dunn & Crutcher LLP Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

January 15, 2015 |
2014 Year-End Sanctions Update

2014 was marked by numerous noteworthy developments.  The crisis in Ukraine and the international community’s efforts to respond have figured prominently in, if not dominated, sanctions discourse.  The Joint Plan of Action and the extension thereof provide a reminder of the ongoing debate concerning Iran’s nuclear program and sanctions on Iran.  In December, President Obama announced a diplomatic thaw with Cuba, including the dismantling of major components of the U.S. sanctions regime on the country.  And, as 2014 drew to a close and the new year began, the United States announced additional economic sanctions against North Korea. This report summarizes key developments of 2014, beginning with executive and legislative responses in the United States to the Ukraine situation, followed by other U.S. sanctions developments, and then legislative, case law, and enforcement developments in the United Kingdom and in the European Union. THE UNITED STATES The situation in Ukraine remains precarious, with significant hurdles remaining to implement the protocol signed in Minsk on September 5, 2014.  As a result, new and more significant sanctions remain possible in the coming months.  The first part of this report is a snapshot of the status of the U.S. response to the volatile conditions in Eastern Europe. I.    Ukraine-Related Developments             A.    U.S. Executive Response President Obama issued a series of executive orders that authorize imposition of sanctions in response to the escalating situation in Ukraine.  The first of the executive orders, Executive Order 13,660 "Blocking Property of Certain Persons Contributing to the Situation in Ukraine"[1] (hereinafter "First E.O."), signed March 6, 2014, broadly targeted pro-Russia, pro-separatist elements in Ukraine.  It blocks all property and interests in property in the United States of any person determined by the Secretary of the Treasury to be responsible for, or complicit in, a number of different activities.[2]  These activities include asserting governmental authority over any part or region of Ukraine without the authorization of the Government of Ukraine; and materially assisting, sponsoring, or providing financial, material, or technological support for destabilizing activities.  The First E.O. also suspends entry into the United States of persons determined to have engaged in the aforementioned activities.[3] Executive Order 13,661, "Blocking Property of Additional Persons Contributing to the Situation in Ukraine" (hereinafter "Second E.O.") was issued on March 16, 2014.[4]  The Second E.O. focuses on officials of the Government of the Russian Federation and persons operating in the arms or related sectors in the Russian Federation.[5]  It also blocks the property of any person determined to be owned or controlled by–or to have acted or purported to act for or on behalf of–a senior official of the Government of the Russian Federation or a person whose property and interests in property are blocked pursuant to the Second E.O.[6]  In addition, it blocks the property of any person determined to have materially assisted, sponsored, or provided financial, material, or technological support for–or goods or services to or in support of–a senior official of the Government of the Russian Federation or a person whose property and interests in property are blocked pursuant to the Second E.O.[7]  Entry into the United States also is suspended for those persons designated pursuant to this Executive Order.[8] The Second E.O. defines the term "Government of the Russian Federation" as "the Government of the Russian Federation, any political subdivision, agency, or instrumentality thereof, including the Central Bank of the Government of the Russian Federation, and any person owned, or controlled by, or acting for or on behalf of, the Government of the Russian Federation."[9]  It does not, however, define who is a senior official of the Government of the Russian Federation, or what constitutes the arms or a related sector.[10] Finally, the President signed Executive Order 13,662 "Blocking Property of Additional Persons Contributing to the Situation in Ukraine" on March 20, 2014 (hereinafter the "Third E.O.").[11]  The Third E.O. authorizes sanctions on any person determined by the Secretary of the Treasury to operate in particular sectors of the Russian Federation economy, such as financial services, energy, metals and mining, engineering, and defense and related materiel.[12]  The authorization represents a significant expansion of the sanctions program because the targeted sectors need not be linked to the disruption in Ukraine. On July 16, 2014, the Office of Foreign Assets Control of the U.S. Department of the Treasury (OFAC) for the first time exercised the authority granted by the Third E.O. and issued Directives[13] that placed limited sanctions on four entities in the Russian financial services and energy sectors and identified these entities on a newly-published Sectoral Sanctions Identification List (SSI List).[14]  Directive 1 prohibits U.S. persons from transacting in, providing financing for, or otherwise dealing in (i) new debt with a maturity longer than 90 days; or (ii) new equity for SSI-listed entities in the Russian financial services sector, these entities’ property, or their interests in property.  It also prohibits any such transactions which occur in the United States.  Two Russian banks were designated in Directive 1: Vnesheconombank (Bank for Development and Foreign Economic Affairs), or VEB, and Gazprombank.  Subsequently, on July 29, 2014, OFAC designated three more Russian banks on the SSI List:  Bank of Moscow, Russian Agricultural Bank, and VTB Bank OAO.[15] Directive 2 addresses the Russian energy sector and prohibits U.S. persons from transacting in, providing financing for, or otherwise dealing in new debt with a maturity longer than 90 days for SSI-listed entities, their property, or their interests in property.  Directive 2 also prohibits any such transactions which occur in the United States.  The two Russian companies so listed are Novatek and Rosneft. For the purposes of the SSI List, debt is considered to include bonds, loans, extensions of credit, loan guarantees, letters of credit, drafts, bankers acceptances, discount notes or bills, or commercial paper.[16]  Equity includes stocks, share issuances, depositary receipts, or any other evidence of title or ownership.[17]  The prohibitions also extend to debt issued by entities owned 50% or more by the named entities (and to equity issued by entities owned 50% or more by the banks identified in Directive 1).[18] OFAC clarified that identification of these entities on the SSI List does not prohibit (i) transactions in debt or equity that was issued prior to July 16, 2014; (ii) transactions dealing in new equity instruments for the two companies identified in Directive 2; and (iii) U.S. financial institutions from maintaining correspondent accounts and processing U.S. dollar-clearing transactions (so long as such activities do not involve dealing in the prohibited transaction types).[19]  The property and interests in property of those persons identified on the SSI List are not blocked unless those persons are also designated as SDNs.  Rather, U.S. persons must reject transactions or dealings that are prohibited under these Directives.[20] In response to Russia’s continued activities in eastern Ukraine and its occupation of Crimea, on September 12, 2014, OFAC announced it was both expanding the scope of these sanctions and further adding to the number of sanctioned individuals and entities.[21]  OFAC added Directives 3 and 4 and revised the existing two Directives 1 and 2 (although the amendments to Directive 2 governing the energy sector are largely technical and non-substantive). Directive 3 restricts U.S. persons from transacting or dealing in new debt of entities operating in the Russian defense and related materiel sector which OFAC has designated on the SSI List, where such debt has a maturity of longer than 30 days.  Any such transaction occurring within the U.S. is similarly prohibited.  As with Directive 1, these sanctions effectively cut off access for designated entities to much of the U.S. capital markets, as all but short-term debt financing is prohibited.  OFAC designated a single entity, Rostec, under this Directive.[22] Directive 4 prohibits U.S. persons from providing, exporting, or reexporting, directly or indirectly, goods, services (except for financial services), or technology in support of exploration or production for deepwater, Arctic offshore, or shale projects that have the potential to produce oil in the Russian Federation, or in the maritime area claimed by the Russian Federation and extending from its territory, and that involve any person determined to be subject to this Directive, its property, or its interests in property.[23]  This Directive prohibits U.S. persons from engaging in such trade with Russian companies designated by OFAC on the SSI List, which now includes Gazprom, Gazprom Neft, Lukoil, Rosneft, and Surgutneftegas.[24]  Note that this prohibition applies to oil-related–and not gas-related–projects. Concurrent with Directive 4, OFAC also issued General License No. 2,[25] which permitted U.S. persons to wind-down their activities that would be in violation of Directive 4.  In particular, the General License clarified that "all activities prohibited by Directive 4 under Executive Order 13662 of March 20, 2014, that are ordinarily incident and necessary to the wind-down of operations, contracts or other agreements involving persons determined to be subject to Directive 4 under Executive Order 13662 and that were in effect prior to September 12, 2014, are authorized through 12:01 a.m. eastern daylight time, September 26, 2014."[26]  Note however, that the General License did not authorize any new such activities except as needed to cease operations involving projects covered by Directive 4.[27]  In addition, U.S. persons participating in transactions authorized by the General License were required to file a detailed report with OFAC.[28] OFAC also amended Directive 1 to tighten the access to capital market restrictions on SSI-listed entities in the financial services sector.  Directive 1 still prohibits transacting, financing or otherwise dealing in new equity for these entities.  But the amended Directive now prohibits such dealings in new debt with a maturity of longer than 30 days, which is a significant reduction from the previous threshold of 90 days.[29]  This new threshold applies only to debt issued on or after September 12, 2014.[30]  OFAC added Russia’s largest bank, Sberbank of Russia, to the SSI List pursuant to this Directive.[31] Directive 2 remains substantively unchanged, but OFAC added two energy sector entities, Gazprom Neft and Transneft, to the SSI List, which will now restrict U.S. persons from transacting or dealing in any new debt with a maturity of longer than 90 day of these entities. OFAC released a number of "FAQs" that provided additional insight into the operation of the Directives, but also highlighted potential challenges for entities attempting to remain compliant.  For example, in August OFAC clarified that entities owned a total of 50 percent or more by one or more SDNs were similarly blocked (the "50 Percent Rule").[32]  OFAC then clarified that this guidance applies to persons identified as subject to a Directive.[33]  As a result, the prohibitions set forth in a Directive apply to entities owned 50 percent or more by one or more persons subject to the Directive whether or not the owned-entities are separately listed.  OFAC also provided definitions of key terms in the Directives, such as "shale projects," which it clarified applies to projects that have the potential to produce oil from resources located in shale formations.  As long as the projects in question are neither deepwater nor Arctic offshore projects, the prohibitions in Directive 4 do not apply to exploration or production through shale to locate or extract crude oil (or gas) in reservoirs.[34]  OFAC also provided further information on what constitutes "production"[35] and "Arctic offshore projects."[36] OFAC also issued General License No. 1A,[37] which authorizes transactions by U.S. persons involving derivative products whose value is linked to an underlying asset that constitutes new debt with a maturity of longer than 30 days or new equity issued by a person subject to Directive 1 under E.O. 13622, new debt with a maturity of longer than 90 days issued by a person subject to Directive 2, or new debt with a maturity of longer than 30 days issued by a person subject to Directive 3.  General License No. 1A supersedes and replaces General License No. 1 which provided similar authorization with respect to Directives 1 and 2 only.  In addition, OFAC issued General License No. 3,[38] which authorizes transactions involving DenizBank A.S. that would otherwise be prohibited by Directive 1. Finally, on December 19, 2014, the President issued an executive order targeting Crimea.  Specifically, Executive Order 13,865, "Blocking Property of Certain Persons and Prohibiting Certain Transactions with Respect to the Crimea Region of Ukraine"[39] prohibits exports to and imports from Crimea of goods, technology and services, as well as new investment in Crimea.  The E.O. authorizes blocking persons found to operating in Crimea, leading an entity in Crimea, to have been owned by or to have materially assisted, sponsored or provided support for persons blocked under the order.  General License 4[40], also issued on December 19, authorizes the export or reexport of certain agricultural commodities, medicines, medical supplies, and replacement parts for medical devices.  The General License does not authorize exports or reexports to SDNs or to military or law enforcement entities.  Further, a number of items, including castor beans, castor bean seeds, non-NSAID analgesics, opioids, and bioactive peptides, are excluded from the general license.  The General License also does not cover items that are not designated EAR99.             B.    U.S. Legislative Response             1.    H.R. 4152: Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014 On April 3, 2014, President Obama signed into law the Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014.[41]  In addition to providing for costs of loan guarantees, recovery of assets related to Ukrainian governmental corruption, and enhanced democracy and security measures in Ukraine and the region, the bill targets two groups for sanctions.                                     a.    Section 8 Section 8 targets individuals responsible for violence or acts undermining the peace and security of Ukraine.[42]  These individuals include (i) any person–including current and former officials of the Ukrainian government–who perpetrated or otherwise directed significant acts of violence or human rights abuses in Ukraine against persons associated with anti-government protests; (ii) any person who perpetrated or otherwise directed other significant acts intended to undermine the peace and security of Ukraine, including acts of economic extortion; (iii) any official of the Russian government or their family member or close associate determined to be responsible for or complicit in acts of significant corruption in Ukraine; or (iv) any individual determined to have materially assisted or sponsored any of the acts described above.[43]  The sanctions are mandatory; if an individual is determined to fall within one of the categories above, the bill states sanctions must be imposed.[44]  The sanctions include blocking of all transactions in the individual’s property and interest in property in the United States or under United States control per the International Emergency Economic Powers Act (IEEPA), with civil and criminal penalties for blocking order violations.[45]  The asset blocking authority does not include the authority to impose sanctions on the importation of goods.[46]  If the person is an alien, sanctions also include denial or revocation of a United States visa or other documentation, as well as exclusion from the United States.[47]                                     b.    Section 9 Section 9 targets individuals in the Russian Federation complicit in or responsible for significant corruption.[48]  These individuals include (i) any Russian government official or their family member or close associate who is determined to be responsible for or complicit in acts of significant corruption in the Russian Federation; or (ii) any individual determined to have materially assisted or sponsored an act described in the category above.[49]  The President is "authorized and encouraged" by the bill to impose sanctions if an individual falls into either category above.[50]  Similar to the section 8 sanctions, section 9 includes asset blocking of all transactions in the individual’s property and interest in property in the United States or under United States control per IEEPA, with civil and criminal penalties for blocking order violations.[51]  Again, as with section 8, the asset blocking authority does not include the authority to impose sanctions on the importation of goods.[52]  If the person is an alien, sanctions also include denial or revocation of a United States visa or other documentation as well as exclusion from the United States.[53]                                     c.    Other Provisions The President may waive the application of sanctions if (i) the President determines that the waiver is in the national security interests of the United States; and (ii) the President submits a notice and justification of the waiver to the proper Senate and House committees on or before the date the waiver takes effect.[54] Finally, the bill also calls for an annual report until 2020 from the Secretary of Defense to specified committees of Congress regarding the current and future military power of the Russian Federation.[55]  The report must include an assessment of the security situation in regions neighboring Russia, the goals driving Russia’s security strategy, and assessments of the Russian military forces, among other topics.[56] [57]             2.    S. 2828 and H.R. 5859: The Ukraine Freedom Support Act On December 18, 2014, President Barack Obama signed the Ukraine Freedom Support Act of 2014 (Ukraine Freedom Support Act),[58] which provides him with the authority to impose additional economic sanctions on foreign persons conducting particular transactions in certain Russian economic sectors, notably the energy and defense sectors.  The law, which originated as S.2828 in the United States Senate and H.R. 5859 in the House of Representatives and passed both with unanimous consent, further increases the economic pressure on Russia followings its annexation of Crimea in March 2014 and its continued support of separatist activities in eastern Ukraine. The law provides the President with new powers, though generally does not require that the President impose new sanctions.  Under the new legislation, the President shall impose certain penalties on Russian producers, transferors, or brokers of defense articles.  Note, however, that the President must impose sanctions on Rosoboronexport, the Russian defense firm.  In addition, the President may impose sanctions on a foreign person if the President determines that foreign person knowingly makes a significant investment in a special Russian crude oil project, and may sanction Gazprom if it withholds significant natural gas supplies from certain European countries.  Importantly, the legislation also provides the President with authority to sanction foreign financial institutions that engage in certain significant transactions involving the Russian defense or energy sectors, or on behalf of an SDN. The law also contains a number of other provisions related to providing Ukraine with military assistance and other forms of aid.             Section 4 – Sanctions Relating to the Defense and Energy Sectors The law further pressures Russia’s defense and energy sectors, both by targeting specific companies and by prohibiting investment in new types of Russian economic projects.  Regarding the defense sector, the law requires the President, within 30 days, to impose three out of nine possible types of sanctions on Rosoboronexport.[59]  The law also grants discretion to the President to impose, within 45 days, three types of sanctions on any entity determined by the President to be owned or controlled by the Government of the Russian Federation–or by a national of the Russian Federation–that knowingly manufactures or sells defense articles transferred into Syria or other specified countries, or that transfers, brokers, or otherwise assists in the transfer of defense articles into Syria or other specified countries, without the consent of the internationally recognized government of that country.[60]  Relatedly, the law also authorizes the President, within 45 days, to impose sanctions on any person that the President determines knowingly assists, sponsors, or provides financial, material, or technological support for, or goods or services to or in support of, such activities by these entities after the date of enactment of the Act.[61] Addressing the energy sector, the new legislation authorizes the President, within 45 days, to impose three or more types of sanctions on a foreign person if the President determines that the foreign person knowingly makes a significant investment in a special Russian crude oil project.[62]  A special Russian crude oil project is defined as a project intended to extract crude oil from an exclusive economic zone of the Russian Federation in waters more than 500 feet deep, Russian Arctic offshore locations, or shale formations located in the Russian Federation.  A foreign person is defined as any individual or entity that is not a United States citizen, a permanent resident alien, or an entity organized under the laws of the United States or any jurisdiction with the United States.[63]  Note that this new authority provides the President with discretion to target non-U.S. persons for conducting certain transactions in the Russian energy sector.  The legislation also provides the President with authority to impose additional licensing requirements for or other restrictions on the export or reexport of items for use in the energy sector of the Russian Federation, including equipment used for tertiary oil recovery. The President can also impose sanctions on Gazprom, the Russian energy company, if he determines that it is withholding significant natural gas supplies from member countries of the North Atlantic Treaty Organization (NATO) or from countries such as Ukraine, Georgia, or Moldova.[64] The possible sanctions that the President can impose are specifically enumerated by the Act, and include: Directing the Export-Import Bank of the United States not to approve the issuance of any guarantee, insurance, extension of credit, or participation in the extension of credit in connection with the export of any goods or services to a foreign person; Prohibiting the head of any executive agency from entering into any contract for the procurement of any goods or services from a particular foreign person; Prohibiting the exportation or provision by sale, lease or loan, grant, or other means, directly or indirectly, of any defense article or defense service to a particular foreign person and the issuance of any license or other approval to that foreign person under section 38 of the Arms Export Control Act; Prohibiting the issuance of any license and suspending any license for the transfer to the foreign person of any item the export of which is controlled under the Export Administration Act; Prohibiting any person from acquiring, holding, withholding, using, transferring, withdrawing, transporting, or exporting any property that is subject to the jurisdiction of the United States and with respect to which the foreign person has any interest, dealing in or exercising any right, power, or privilege with respect to such property, or conducting any transaction involving such property; Prohibiting any transfers of credit or payments between financial institutions or by, through, or to any financial institution, to the extent that such transfers or payments are subject to the jurisdiction of the United States and involve any interest of the foreign person; Prohibiting any United States person from transacting in, providing financing for, or otherwise dealing in particular forms of debt or equity; Excluding from the United States and revoking the visa or other documentation of particular foreign persons; or Imposing on the principal executive officer or officers of the foreign person, or on individuals performing similar functions and with similar authorities, any of the sanctions described above.[65] The legislation contains a number of exceptions and waivers, including a national security waiver that permits the President to waive certain sanctions with respect to a foreign person or a specific transaction if the President determines that the waiver is in the national security interest of the United States and submits to the appropriate congressional committees a report on the determination and the reasons for the determination.[66]  Additionally, the sanctions do not apply to the importation of goods.[67]             Section 5 – Sanctions on Foreign Financial Institutions The legislation also provides the President with the authority to impose sanctions on foreign financial institutions that engage in significant transactions involving a number of activities.  In particular, foreign financial institutions are prohibited from engaging in significant transactions with any entity determined by the President to be owned or controlled by the Government of the Russian Federation, or by nationals of the Russian Federation, that knowingly manufactures or sells defense articles transferred into Syria or other specified countries, or that transfers, brokers, or otherwise assists in the transfer of defense articles into Syria or other specified countries without the consent of the internationally recognized government of that country.[68]  Relatedly, foreign financial institutions are prohibited from engaging in any transactions involving a person who the President determines to be knowingly assisting, sponsoring, or providing financial, material, or technological support for, or goods or services to or in support of, such activities by these entities.[69] Foreign financial institutions are also prohibited from engaging in transactions involving entities that the President has determined made significant investment in a special Russian crude oil project, or with Gazprom if the President determines that Gazprom is withholding significant natural gas supplies from particular countries.[70] Finally, foreign financial institutions may be sanctioned if the President determines that they have knowingly facilitated a significant financial transaction, 180 days or more after the enactment of the Act, on behalf of any SDN that has been designated pursuant to the Ukraine crisis.[71] Under the Ukraine Freedom Support Act, the President has the authority to prohibit foreign financial institutions that violate these restrictions from opening or maintaining correspondent accounts in the United States.[72] II.    Other U.S. Sanctions Developments Although much of the sanctions attention has been focused on Ukraine and Russia, there have been several developments with respect to other areas of the world.             A.    Changes in U.S. Policy Towards Cuba On December 17, 2014, President Obama announced "the most significant changes to [U.S.] Cuba policy in more than 50 years."  According to information released by the White House[73], the United States and Cuba will move to normalize diplomatic and economic relations and the United States will implement significant changes to its sanctions policies and regulations with respect to Cuba.[74]  The United States intends to reopen its embassy in Havana and the President called for the State Department to review Cuba’s designation as a State Sponsor of Terrorism.  Removing Cuba from this list would have a dramatic impact on possible further relaxation of the trade and diplomatic sanctions currently in place against the country and its nationals. While the broader U.S. embargo against Cuba remains in place and normal tourism is still prohibited, the announced policy shift will result in substantial changes to the implementation of the embargo 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. Please note that the new policies will not go into effect until the applicable regulations (the Cuban Assets Control Regulations, administered by OFAC, and the Export Administration Regulations, administered by the Commerce Department’s Bureau of Industry and Security) can be amended.[75] The changes to current U.S. policy fall into the following areas:             1.    Expanding Travel by U.S. Persons to Cuba General licenses will be made available for all authorized travelers traveling to Cuba for the following reasons: (i) family visits; (ii) official business of the U.S. government, foreign governments, and certain intergovernmental organizations; (iii) journalistic activity; (iv) professional research and professional meetings; (v) educational activities; (vi) religious activities; (vii) public performances, clinics, workshops, athletic and other competitions, and exhibitions; (viii) support for the Cuban people; (ix) humanitarian projects; (x) activities of private foundations or research or educational institutes; (xi) exportation, importation, or transmission of information or informational materials; and (xii) certain export transactions that may be considered for authorization under existing regulations and guidelines.  While general licenses currently exist for some individuals whose travel falls within some of the above listed categories, other individuals, such as those whose travel is described by categories vii, viii, ix, x, and xi currently must obtain specific licenses from OFAC.[76]  The general licenses will significantly ease travel for qualified individuals. Individuals whose travel to Cuba falls within the twelve categories authorized by the general licenses will be able to make travel arrangements through any service provider that complies with OFAC’s regulations concerning travel services to Cuba.  In another significant policy change, general licenses, rather than specific licenses[77], will authorize the provision of such travel services.             2.    Facilitating Authorized Transactions Between the United States and Cuba In another change from current policy,[78] U.S. institutions will be permitted to open correspondent accounts at Cuban financial institutions to facilitate the processing of authorized transactions, and U.S. credit and debit cards will be permitted for use by travelers to Cuba (currently the use of U.S. credit and debit cards must be specifically authorized).[79]  The regulatory definition of the statutory term "cash in advance" will also be revised to specify that it means "cash before transfer of title," instead of the current definition which requires that payment be received by the seller prior to shipment of goods from the loading port.[80]             3.    Updating the Application of U.S. Sanctions Towards Cuba in Countries Outside the U.S. General licenses will authorize U.S.-owned or -controlled entities in third countries to provide services to, and engage in financial transactions with, Cuban individuals in third countries.  Other general licenses will: (i) unblock accounts held at U.S. banks belonging to Cuban nationals who have relocated outside of Cuba; (ii) permit U.S. persons to participate in third-country professional meetings and conferences related to Cuba; and (iii) allow foreign vessels to enter the United States after engaging in certain humanitarian trade with Cuba, among other measures.  Currently, such conduct by U.S. persons requires a specific license from OFAC.[81]             4.    Expanding Commercial Sales and Exports from the United States of Certain Goods and Services Additional items will be authorized for export to Cuba, including certain building materials for private residential construction, goods for use by private sector Cuban entrepreneurs, and agricultural equipment for small farmers.             5.    Increasing Cubans’ Access to Communications and Ability to Communicate Freely To support U.S. efforts to increase the ability of the Cuban people to communicate freely and broaden their access to the Internet and other forms of telecommunications, the commercial export of certain consumer communications devices, related software, applications, hardware, and services, as well as items used for the establishment and update of communications-related systems, will be authorized.  Telecommunications providers will be also be allowed to establish and provide commercial telecommunications and internet services, including the installation and support of necessary infrastructure.  While the "freedom to communicate" has been a long-term policy goal of the U.S. government, especially with respect to the access to communications and ability to communicate freely of individuals subject to repressive governments,[82] allowing U.S. telecommunications providers to actually provide such telecommunications services and infrastructure within Cuba itself is an unprecedented change in U.S. policy towards Cuba.             6.    Authorizing Limited Imports of Cuban Goods Licensed U.S. travelers to Cuba will be authorized to import $400 worth of goods from Cuba, with a limit of $100 in tobacco products and alcohol, combined.  This is a change from the current regulations, which ban the import of almost all Cuban goods.[83]             7.    Facilitating U.S. Remittances to Cuba The level of general, non-family remittances to Cuban nationals will be raised from $500 to $2,000 per quarter, except for remittances to certain officials of the Cuban government or the Communist party, which will still be prohibited.  In addition, donative remittances for humanitarian projects, support for the Cuban people, and support for the development of private businesses in Cuba will no longer require a specific license from OFAC, nor will remittance forwarders.[84]             B.    Other Sanctions Developments             1.    Executive Orders In addition to the Executive Orders issued in response to the Ukraine crisis discussed above, President Obama in 2014 also issued sanctions-related Executive Orders pertaining to South Sudan, the Central African Republic (CAR), Iraq, the Democratic Republic of the Congo (DRC) and the Democratic People’s Republic of Korea (North Korea).[85]  The measures tightened restrictions against parties contributing to violence and unrest in South Sudan and the CAR, and broadened the scope of sanctionable conduct in the DRC, but eased restrictions in Iraq due to improvements in the circumstance under which sanctions were initially imposed.                                     a.    South Sudan: Executive Order 13,664 On April 3, 2014, President Obama signed Executive Order 13,664, "Blocking Property of Certain Persons with Respect to South Sudan,"[86] declaring a national emergency to deal with the "threat to the national security and foreign policy of the United States" resulting from violence and instability in South Sudan.  The E.O. authorizes blocking of persons contributing to violence in the country, including Government and opposition forces.  Specifically, it blocked property of those persons that are responsible for, lead, or materially assist with human rights abuses, violent acts against women and children, interference with humanitarian aid or peacekeeping missions, the recruitment or use of child soldiers, and actions that threaten stability or peacekeeping.  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 June 2, 2014, clarified that payments to "non-designated individuals or entities under the command and control" of blocked persons are not prohibited, but emphasized that due diligence is required to ensure that blocked persons or groups do not profit from the transactions.[87]                                     b.    Central African Republic: Executive Order 13,667 Signed by President Obama on May 13, 2014, Executive Order 13,667, "Blocking Property of Certain Persons Contributing to the Conflict in the Central African Republic"[88] declared a national emergency based on the "breakdown of law and order, intersectarian tension, widespread violence and atrocities, and the pervasive, often forced, recruitment and use of child soldiers" in the Central African Republic.  The E.O. blocked the property of persons who engage in, lead, sponsor, or assist: activities that threaten peace, stability, the political transition process, or democratic processes and institutions; targeted violence against civilians; the use or recruitment of child soldiers; the obstruction of delivery of humanitarian aid; attacks against peacekeepers or the UN; and persons or groups that threaten the country’s security through illicit trade of natural resources.  Additionally, persons who supply, sell, or receive arms or other military materials, including military training and financing are blocked (except if such activity was authorized for humanitarian or peacekeeping activities).  Additional restrictions include the prohibition of donations (including humanitarian donations) to or from blocked individuals and entities, a travel ban on blocked persons, and the prohibition of violations or conspiracies intended to violate the E.O.                                     c.    Iraq: Executive Order 13,668 On May 27, 2014, President Obama signed Executive Order 13,668, "Ending Immunities Granted to the Development Fund for Iraq and Certain Other Iraqi Property and Interests in Property Pursuant to Executive Order 13303, as Amended."[89]  Executive Order 13,303, signed by President Bush in May of 2008, prohibited the "attachment or other judicial process" of assets of the Development Fund for Iraq or Iraqi petroleum and petroleum products, including "proceeds, obligations, or any financial instruments" related to the sale or marketing of such products.[90]  The scope of this E.O. was amended in November 2004 to include property owned or held by, or on behalf of, the Central Bank of Iraq.[91]  Citing significant alteration of the situation that precipitated the 2003 E.O., including "the Government of Iraq’s progress in resolving and managing the risk associated with outstanding debts and claims arising from actions of the previous regime," E.O. 13,668 terminated immunities from the judicial process for assets of the Development Fund for Iraq, Iraqi petroleum and petroleum products, and the Central Bank of Iraq.  The E.O., however, maintained the national emergency declared in E.O. 13,303.                                     d.    Democratic Republic of the Congo: Executive Order 13,671 On July 8, 2014, President Obama signed Executive Order 13,671, "Taking Additional Steps to Address the National Emergency With Respect to the Conflict in the Democratic Republic of the Congo," in response to "the continuation of activities that threaten the peace, security, or stability of the Democratic Republic of the Congo and the surrounding region, including operations by armed groups, widespread violence and atrocities, human rights abuses, recruitment and use of child soldiers, attacks on peacekeepers, obstruction of humanitarian operations, and exploitation of natural resources to finance persons engaged in these activities[.]"[92]  E.O. 13,671 amends E.O. 13,413 signed by President Bush on October 27, 2006,[93] to broaden the bases for designating SDNs pursuant to the E.O.s.  Added particular emphasis is placed on targeting those found to be responsible for or complicit in, or to have engaged in, directly or indirectly: actions or policies that threaten the peace, security, or stability of the Democratic Republic of the Congo or that undermine its democratic processes or institutions; the targeting of women, children, or any civilians through the commission of acts of violence, abduction, forced displacement; attacks on schools, hospitals, religious sites, or other locations where civilians seek refuge; the use or recruitment of children by armed groups or armed forces; the obstruction of the delivery or distribution of, or access to, humanitarian assistance; and attacks against United Nations missions, international security presences, or other peacekeeping operations.                                     e.    North Korea:  Executive Order 13,687 On January 2, 2015, President Obama signed Executive Order 13,687, "Imposing Additional Sanctions with Respect to North Korea", in response to North Korea’s "provocative, destabilizing, and repressive actions and policies,"[94] which, most notably, included the recent cyber-attack targeting Sony Pictures Entertainment and related threats against movie theaters and their patrons.  The targeted sanctions aim to increase financial pressures on North Korea by blocking designated persons’ property and interests that are in the U.S. or come under the control of a U.S. person.  Under the sanctions, the designated persons will be denied access to the U.S. financial systems, and U.S. persons are prohibited from engaging in transactions with such designated persons. Pursuant to the E.O., the Treasury Department designated three entities and ten individuals for being agencies or officials of the North Korean government.[95]  The designated entities are the Reconnaissance General Bureau (RGB), which is North Korea’s primary intelligence organization, the Korea Mining Development Trading Corporation (KOMID), North Korea’s primary arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons, and the Korea Tangun Trading Corporation, which is responsible for the procurement of commodities and technologies to support North Korea’s defense research and development programs.[96]             2.    Legislation                                     a.    Venezuela Defense of Human Rights and Civil Society Act of 2014 On December 18, 2014, President Obama signed into law the Venezuela Defense of Human Rights and Civil Society Act of 2014.[97]  The Act authorizes sanctions, including asset blocking and revocation of visas, in connection with violence perpetrated on antigovernment protesters in Venezuela.  The sanctions may be placed on foreign persons, including present and former officials of the Government of Venezuela or any persona acting on behalf of the Government of Venezuela, found to have ordered or directed serious acts of violence or serious human rights abuses in Venezuela against persons associated with antigovernment protests, to have ordered or directed the arrest of persons primarily because the exercise of freedom of expression or assembly, or to have knowingly assisted in the foregoing conduct.             3.    Significant OFAC Regulations                                     a.    Syria Sanctions Regulations On May 2, 2014, OFAC amended and reissued in their entirety the Syrian Sanctions Regulations, 31 C.F.R. Part 542 (SSR).[98]  The SSR were amended to implement executive orders issued by the President in connection with the national emergency in Syria.[99]  The regulations also codify general licenses and licensing policies that previously were available only on OFAC’s website.[100]                                     b.    Burmese Sanctions Regulations On June 30, 2014, OFAC reissued the Burmese Sanctions Regulations (BSR).[101]  The regulations originally were issued to implement Executive Order 13,047,[102] and then amended and reissued in 2005 to implement Executive Order 13,310.[103]  The regulations were amended and reissued in 2014 to implement additional executive orders issued by the President in connection with the national emergency declared on May 22, 1997.[104]  The reissued regulations also update the general licenses available under the BSR and certain statements of licensing policy.                                     c.    South Sudan Sanctions Regulations OFAC issued abbreviated regulations implementing Executive Order 13,664 of April 3, 2014, "Blocking Property of Certain Persons with Respect to South Sudan"[105], on July 1, 2014.[106]  The regulations, codified at 31 C.F.R. Part 558, will be supplemented with more comprehensive regulations and guidance.                                     d.    Central African Republic Sanctions OFAC issued regulations implementing Executive Order 13,667 of May 12, 2014, "Blocking Property of Certain Persons Contributing to the Conflict in the Central African Republic"[107], on July 7, 2014.[108]  The regulations, codified at 31 C.F.R. Part 553 and published in abbreviated form, will be supplemented with more comprehensive regulations and guidance.                                     e.    Zimbabwe Sanctions Regulations OFAC published the Final Rule amending the Zimbabwe Sanctions Regulations on July 10, 2014.[109]  The Final Rule is based on the interim rule with amendments to implement more recent developments.             4.    General Licenses                                     a.    WMD Proliferators On February 3, 2014, OFAC issued General License No. 9[110] to the Weapons of Mass Destruction Proliferators Sanctions Regulations[111] and the Iranian Transactions and Sanctions Regulations (ITSR)[112] authorizing transactions related to the arrest, detention, and judicial sale of Motor Vessel SININ (IMO No. 9274941).  The Tanzania flagged vessel is owned by the Islamic Republic of Iran Shipping Lines (IRISL) and was added to the SDN List on September 10, 2008 as part of the U.S. sanctions on IRISL.  The vessel, captured by pirates of the coast of Somalia in 2011 and released after 182 days following payment of a ransom,[113] was arrested in China.  The license does not permit the transfer of funds or other property to blocked persons, except as authorized by paragraph (a) of the license.[114]  If the vessel is sold by judicial sale, the purchaser will need to provide OFAC with documentation showing that the basis for blocking is no longer applicable in order to have the vessel removed from OFAC’s Specially Designated Nationals and Blocked Persons List.[115]                                     b.    Iran                                                             (i)    February 7, 2014 Publication of Iran General License D-1 General License D-1 (GL D-1)[116] replaces and supersedes General License D (GL D), incorporating significant changes.  First, GL D-1 expands the authorization in GL D to permit the exportation, reexportation, or provision, directly or indirectly, to Iran of certain personal communications software, hardware, and related services subject to the Export Administration Regulations, 15 C.F.R. Parts 730 through 774 (EAR) (rather than just the exportation or reexportation from the United States or by a U.S. person of such software, hardware, and services).[117] A new Note has been added to paragraphs (a)(2) and (a)(3) clarifying that the authorization in these paragraphs includes the export, reexport, or provision, directly or indirectly, of the authorized items by an individual leaving the United States for Iran.  GL D-1 also newly authorizes the import by an individual into the United States of certain hardware and software previously properly exported by the individual to Iran pursuant to other provisions of GL D-1 or 31 C.F.R. § 560.540.[118] GL D-1 authorizes the export or reexport, directly or indirectly from the United States or by a U.S. person of certain publicly available software and services, provided the publicly available software and services are provided at no cost.[119]  With respect to fee-based services, the general license authorizes the export and reexport, directly or indirectly, of certain fee-based services and software incident to the exchange of personal communications over the Internet from the United States to Iran.  The authorized fee-based services include such services as instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, and blogging.[120]  Software associated with the authorized fee-based services that is subject to the EAR may be exported or reexported or provided directly or indirectly to Iran if the software is classified EAR99 or subject to ECCN 5D992.c.[121]  Software that is not subject to the EAR because it is of foreign origin and not located within the United States similarly may be exported, reexported or provided directly or indirectly by a U.S. person wherever located, provided the software would have been designated EAR99 if located in the U.S. or meet the criteria for classification under ECCN 5D992.c. if it were subject to EAR.[122] GL D-1 includes an annex in which are listed additional software and hardware that, if subject to the EAR, may be exported, reexported or provided directly or indirectly to Iran.[123]  This authorization also applies to software or hardware listed in the annex, if it is of foreign origin and located outside the U.S. (and therefore not subject the EAR), provided that such software or hardware would be designated EAR99 if located in the U.S. or would meet the criteria for classification under the relevant ECCN specified in the annex.[124]  If the software is not subject to the EAR because it is publicly available software described in 15 C.F.R. § 734.39b)(3), as long as it is of a type described in the annex to GL D-1, such software may also be exported, reexported or provided directly or indirectly to Iran by a U.S. person.[125] GL D-1 also allows the export or reexport from the United States to Iran of consumer-grade Internet connectivity services and the provision, sale, or leasing of capacity on telecommunications transmission facilities (i.e., satellite or terrestrial network connectivity) incident to personal communications.[126]  However, this authorization does not include commercial endeavors or domain name registration services.[127] None of the aforementioned software, hardware, or services may be exported, reexported, or provided to blocked persons.[128]  Similarly, the items may not be exported, reexported, or provided to the Government of Iran, unless they are widely available to the public and free for the user.[129]  Finally, U.S. depository institutions and U.S. registered brokers or dealers in securities may transfer funds from Iran for or on behalf of a person in Iran for a transaction authorized by General License D-1 as long as the transfer is consistent with all federal regulations.[130]                                                             (ii)    March 19, 2014 Publication of Iran General License G General License G (GL-G)[131] authorizes certain academic exchange agreements with Iran.  Under the license, U.S. accredited academic institutions may enter into student academic exchange agreements with Iranian universities.[132]  Such agreements can include both undergraduate and graduate educational courses, and the provision of scholarships for Iranian students to attend U.S. academic institutions.  Additionally, U.S. persons, wherever located, can administer professional certificate examinations and university examinations to individuals located in Iran or to individuals located outside of Iran that are ordinarily resident in Iran.[133]  Similarly, U.S. students can attend classes or conduct noncommercial academic research at Iranian universities at the undergraduate level, and at the graduate level in the humanities, social sciences, law, or certain business subjects.[134] U.S. academic institutions are permitted to export services:  (i) to file and process applicants and to accept money from Iranian residents for applications and tuition; (ii) to recruit, hire, or employ in a teaching capacity Iranian residents who are regularly employed in a teaching capacity at an Iranian university, as long as those individuals are not teaching at a U.S. academic institution without an appropriate visa; and (iii) to Iranian residents to participate in online courses at the undergraduate level.[135]  Moreover, U.S. persons can export not-for-profit services to Iran that support increased access to education, educational reform projects, and combatting illiteracy.[136]  The license does not, however, authorize exporting or reexporting any goods (including software) or technology to the Government of Iran, or to Iran, unless the item is EAR99 or constitutes educational information not subject to the EAR, as set forth in 15 C.F.R. § 734.9, and the export or reexport does not otherwise required a license from the U.S. Department of Commerce.[137]  Likewise, it does not authorize the export or reexport of any service to blocked persons.[138]                                                             (iii)    April 7, 2014 Iran/TSRA general license authorizing export/reexport of replacement parts for medical devices On April 7, 2014, OFAC issued a general license[139] that authorizes the exportation and reexportation of certain replacement parts for certain medical devices to individuals and entities in Iran.  The replacement parts covered under the general license must be designated under the EAR as EAR99, or would be so designated if they were located in the U.S.  For example, a company located in the U.S. may be authorized under the general license to arrange for the export from a third country to Iran of certain medical devices if those medical devices would be designated as EAR99 if they were located in the U.S.[140]  The general license is also limited to a one-for-one export or reexport basis; only one replacement part can be exported or reexported to replace a broken or non-operational component.  The general license applies to the export or reexport of these medical devices to the Government of Iran, individuals or entities in Iran or to persons in third countries purchasing specifically for resale to the foregoing.  The general license does not authorize the exportation or reexportation of replacement parts for medical devices to military or law enforcement purchasers or imports.                                     c.    Sudan Effective August 11, 2014, OFAC issued General License No. 1A[141] to replace and supersede General License No. 1, dated April 5, 2013, as well as guidance explaining the changes.[142]  The definition of "U.S. academic institutions" was expanded to include third-country branch campuses, and the authorizations contained in the general license cover U.S. academic institutions’ contractors.  The general license also authorizes activities needed for Sudanese nationals to apply to U.S. academic institutions and to authorized training seminars.  The authorized activities may occur before a student visa is issued, and include accepting application fees and tuition payment.  The general license also authorizes U.S. financial institutions to process the funds transfers by Sudanese nationals needed to permit participation in authorized academic and training programs.             5.    Government Agency Guidance                                     a.    Guidance and other Materials Relating to the Provision of Certain Temporary Sanctions Relief in Order to Implement the Joint Plan of Action Between The P5+1 and The Islamic Republic Of Iran On November 25, 2014, OFAC published guidance relating to the Joint Plan of Action (JPOA) reached between the P5+1 (the United States, United Kingdom, Germany, France, Russia, and China) and the Islamic Republic of Iran.[143]  The term of relief–which had already been extended once–was set to expire on November 24, 2014.  By mutual consent, on November 24, 2014, the P5+1 and Iran renewed the JPOA until June 30, 2015 ("the Second Extended JPOA Period").[144] The parties arrived at the technical understanding of the JPOA on January 12, 2014, and its implementation began on January 20, 2014.[145]  The JPOA marked the first time in nearly a decade that the Islamic Republic of Iran, in exchange for some relief from international sanctions, agreed to stop the advance of its nuclear program, reverse aspects of the program, and allow unprecedented access for international inspectors.[146] As a result of the progress achieved during the JPOA period, but mindful of outstanding differences, the JPOA was first extended, on July 21, 2014, until November 24, 2014, in order to give the parties the time to develop a "comprehensive agreement" (Extended JPOA Period).[147]  OFAC re-issued three amended documents in connection with the JPOA.  The Guidance Relating to the Provision of Certain Temporary Sanctions Relief in Order to Implement the Joint Plan of Action Reached on November 24, 2013, between the P5+1 and the Islamic Republic of Iran, As Extended Through November 24, 2014[148] describes the impact of the ongoing temporary sanctions relief in connection with certain specific industries and exports:  petrochemicals and crude oil, precious metals, the auto industry, civil aviation, and humanitarian support.[149]  In addition, it describes how this relief may impact financial transactions related to these fields, how these changes affect non-U.S. persons and entities, and the obligation to obtain an explicit waiver from OFAC before conducting business under these temporary provisions.  It also clarified that insurance claims may be paid after the Extended JPOA Period provided all the underlying transactions and activities were in compliance with other sanctions and the terms of the JPOA.  Further, the JPOA had authorized the release of $4.2 billion in Iranian revenue, and this extension authorized the release of an additional $2.8 billion.[150]  OFAC released FAQs that described the scope of the sanction relief.[151]  This included lists of permitted and excluded items and entities, how the changes interacted with other U.S. policies and sanctions related to Iran, the continued prohibitions against transacting with SDNs, and specifics related to the return of foreign-held Iranian revenue and humanitarian support.[152]  The third document provided further detail regarding the process of obtaining a license to transact with Iran’s civil (commercial passenger) aviation industry. The JPOA was extended a second time on November 24, 2014, and on November 25, 2014, OFAC issued Guidance Relating to the Provision of Certain Temporary Sanctions Relief in Order to Implement the Joint Plan of Action Reached on November 24, 2013, between the P5+1 and the Islamic Republic of Iran, As Extended Through June 30, 2015.[153]  During the period from January 20, 2014 until June 30, 2015, the United States committed to continuing to provide Iran with certain sanctions relief.[154]  This relief includes a temporary suspension of certain U.S. sanctions on Iran’s petrochemical exports, as well as sanctions on associated services, by non-U.S. persons not subject to the ITSR.[155]  The JPOA also provides for certain sanctions relief related to Iran’s crude oil sales, including not imposing correspondent or payable-through account sanctions specified under the Iranian Financial Sanctions Regulations on certain foreign financial institutions that conduct or facilitate transactions for the export of petroleum and petroleum products (and associated insurance) to certain countries.[156]  Certain non-U.S. persons are also permitted to engage in activities related to the sale, supply, or transfer to Iran of significant goods or services used in conjunction with the automotive sector of Iran, as well as in activities related to precious metals and civil aviation.[157] In addition, OFAC released FAQs specifying that Iran will receive $4.9 billion in Restricted Funds during the period beginning on November 25, 2014 and ending on June 30, 2015,[158] as well as a Second Amended Statement of Licensing Policy on Activities Related to the Safety of Iran’s Civil Aviation Industry.[159]                                     b.    February 27, 2014 Reminder about the Removal of the .exe SDN and PLC Archives On or about March 5, 2014, OFAC ceased issuing its Specially Designated Nationals (SDN) data files in the 32 bit-self extracting archive known as "SDALLW32.EXE".[160]  At the same time, it also ceased issuing its Palestinian Legislative Council (PLC) data files in the 31 and 16 bit self-extracting archives, "PLCDAT32.EXE" and "PLC_DAT.EXE".[161]  Instead, OFAC continues to provide and update 32 bit .zip archives, "SDALL.ZIP" and "PLC_DAT.ZIP," offering the SDN and PLC lists respectively.[162]  Through these .zip archives, the SDN and PLC lists are available in XML, CSV, @ sign fixed field delimited, and text versions.[163]  These updates may impact automated SDN and PLC download processes, and businesses should ensure that they conform their protocols to ensure they are receiving the most up-to-date information.[164]                                     c.    April 1, 2014 Burma Guidance Relating to General License Nos. 16-19 and Executive Order 13,651 OFAC published guidance relating to U.S. sanctions against Burma on April 1, 2014.[165]  Measures largely easing financial and investment sanctions were issued beginning on July 11, 2012, and include: (i) General License No. (GL) 16, permitting the export of U.S. financial services to Burma; (ii) GL 17, permitting new U.S. investment in Burma; (iii) GL 18, authorizing the importation of goods of Burmese origin into the U.S.; (iv) GL 19, easing limitations on financial transactions with four of Burma’s blocked banks (Asia Green Development Bank, Ayeyarwady Bank, Myanma Economic Bank, and Myanma Investment and Commercial Bank); and (v) Executive Order 13,651, "Prohibiting Certain Imports of Burmese Jadite and Rubies."[166] The Guidance clarified which sanctions remain in place.  U.S. individuals cannot engage in transactions with blocked persons, and may engage in only limited transactions with the banks discussed in GL 19.  Nor can U.S. persons engage in certain activities (including providing security services, exporting financial services, or making new investments) with the Burmese Ministry of Defense, state or non-state armed groups (including the military), or "entities owned 50 percent or more by any of the foregoing."[167]  Finally, jadite and rubies mined from Burma, or jewelry containing them, cannot be imported into the U.S. because of concerns about labor practices and human rights in that industry.[168] The Guidance explained several other issues related to banking, new investments, reporting requirements, and SDN.                                                             (i)    Banking U.S. persons may bank with non-blocked banks in Burma and may engage in "most" transactions with the four banks noted in GL 19.[169]  U.S. financial institutions may enter into "direct correspondent relationships" with non-blocked Burmese financial institutions and the four blocked banks listed in GL 19.[170] GL 16 does not authorize U.S. persons to open accounts with blocked banks, but it "permits transfers of funds even though they may involve transfers to or from an account of a blocked Burmese financial institution."[171]                                                             (ii)    New Investments "New investment" is defined by 31 C.F.R. § 537.331.[172] GL 17 authorizes the facilitation of new investments undertaken by U.S. persons, provided they are not pursuant to an agreement "with the Burmese Ministry of Defense, state or non-state armed groups (which includes the military), or entities owned 50 percent or more by any of the foregoing" and do not "involve[] a transaction" with a blocked person.[173] GL 17 authorizes investment in a third-country company’s activities in Burma.[174] Leasing office space used for the sale of good and services may or may not constitute a new investment, depending upon the "facts and circumstances of each particular situation."  Investors are encouraged to "err[] on the side of caution and report[] in compliance" with State Department-issued guidance.[175] GL 19 neither authorizes new investments with nor unblocks property of Asia Green Development Bank, Ayeyarwady Bank, Myanma Economic Bank, or Myanma Investment and Commercial Bank.[176]                                                             (iii)    Reporting U.S. individuals and entities whose aggregate new investment in Burma exceeds $500,000 "over any period" must fulfill the State Department "Reporting Requirements on Responsible Investment in Burma" within 180 days after meeting the threshold and annually thereafter on July 1.[177] New investments "pursuant to an agreement, or pursuant to the exercise of rights under such an agreement" with Myanma Oil and Gas Enterprise must be reported the State Department within 60 days.[178]                                                             (iv)    Specially Designated Nationals Listing or delisting of SDNs "will be pursued as appropriate to meet changing conditions in Burma."[179] U.S. persons may sell goods or services to Burmese persons not on the SDN list, but generally may not deal with blocked persons, including SDNs, or entities "50 percent or more owned by such persons."[180]                                                             (v)    Guidance Regarding Executive Order 13,651–Prohibiting Certain Imports of Burmese Jadeite and Rubies Executive Order 13,651, signed by President Obama on August 6, 2013, reinstated prohibitions and restrictions on the importation of jadeite and rubies that were originally imposed by the Tom Lantos Block Burmese JADE (Junta’s Anti-Democratic Efforts) Act of 2008, but which lapsed following the Burmese Freedom and Democracy Act’s expiration on July 28, 2013.  The E.O. also prohibited any transaction that evades or avoids, or has the purpose of evading or avoiding, any of the prohibitions on importing such goods.[181]  Per the Guidance, financial and blocking sanctions are no longer in effect with respect to the State Peace and Development Council (SPDC) because (i) the SPDC is no longer in existence; and (ii) such sanctions were waived by E.O. 12,651.[182]                                     d.    April 7, 2014 Frequently Asked Questions on Iran/TSRA General Licenses On April 7, 2014, OFAC published new FAQs on a final rule amending the ITSR.[183]  The rule makes three important changes to the preexisting authorized transactions.  First, the rule expands an existing general license that authorizes the exportation and reexportation of food to individuals and entities in Iran to include agricultural commodities.[184]  Second, the rule amends certain definitions to relevant OFAC regulations.[185]  Finally, the rule adds new general licenses that authorize the exportation or reexportation of certain medicines and replacement parts for certain medical devices.[186]  The FAQs largely relate to the scope of and exceptions to general licenses.[187]  Specifically, the FAQs describe excluded Iranian persons and entities, excluded agricultural commodities, the list of medicines and medical devices supported by these changes, the application of these sanctions on non-U.S. persons and entities, the impact on certain financial brokerage services, and how to obtain a license.[188]                                     e.    June 9, 2014 SDN Search "Sanctions List Search" searches both the Specially Designated Nationals List and the Foreign Sanctions Evaders List OFAC upgraded its SDN Search tool, renaming it the Sanctions List Search (SLS) on June 9, 2014.[189]  The upgraded version now allows users to search for a name on both the SDN List and Foreign Sanctions Evaders List–independently or simultaneously.[190]  The core improvement is a new "fuzzy logic" algorithm that expands search results.[191]  In addition to returning "exact matches" for searched names, the SLS now returns names that may be phonetic matches or spelled with similar patterns of characters.[192]  These non-exact results come with an SLS score expressing the confidence of a match, to help users ensure their results conform to their risk and compliance needs.[193]  All results are viewable on-screen, are printable, and can be saved as a spreadsheet.[194]                                     f.    August 13, 2014 Revised Guidance on Entities Owned by Persons Whose Property and Interests in Property are Blocked On August 13, 2014, OFAC issued Revised Guidance on Entities Owned by Persons Whose Property and Interests in Property are Blocked (Revised Guidance) (a.k.a. the "50% Rule") updating previous guidance on the subject issued February 14, 2008.[195] The revised guidance makes an important change/clarification to OFAC’s policy regarding the 50% Rule by stating that "[p]ersons whose property and interests in property are blocked pursuant to an Executive order [sic] or regulations administered by OFAC (blocked persons) are considered to have an interest in all property and interests in property of an entity in which such blocked persons own, whether individually or in the aggregate, directly or indirectly, a 50 percent or greater interest.  Consequently, any entity owned in the aggregate, directly or indirectly, 50 percent or more by one or more blocked persons is itself considered to be a blocked person." This reflects a change from previous, if informal, guidance from OFAC on the subject earlier this year which indicated that entities would only be considered blocked if a single blocked entity owned 50% or more of that entity. OFAC also released FAQs #398-402, which further clarified the 50% Rule.[196]  In the introductory text to the FAQs, OFAC notes that the 50% Rule also applies to entities listed on the new SSI List, but only to the same extent that SSI List entities are themselves restricted (i.e., restrictions on access to capital, but not full blocking).  FAQ #398 clarifies that the 50% Rule "speaks only to ownership and not to control.  An entity that is controlled (but not owned 50 percent or more) by one or more blocked persons is not considered automatically blocked pursuant to OFAC’s 50 Percent Rule."  However, OFAC was careful to reiterate that caution should be exercised when dealing with entities in which blocked persons have significant ownership stakes less than 50% in aggregate, or over which blocked persons exercise control without majority ownership, as OFAC reserves the right to designate such entities in the future.  FAQ #401 clarifies the idea of "indirect" ownership, noting that "'[i]ndirectly,’ as used in OFAC’s 50 Percent Rule, refers to one or more blocked persons’ ownership of shares of an entity through another entity or entities that are 50 percent or more owned in the aggregate by the blocked person(s)." Providing a series of examples, the FAQ indicates that "indirect" ownership refers only to the concept of chain of ownership through intermediaries.                                     g.    September 23, 2014 Publication of Frequently Asked Question with Respect to Payments or the Facilitation of Payments to Iranian Civil Aviation Authorities On September 23, 2014, OFAC released an FAQ concerning "payments or the facilitation of payments to Iranian civil aviation authorities" for overflights of or emergency aircraft landings in Iran "by aircraft owned by a non-U.S. person and registered outside the United States."[197]  The FAQ states that payments for services rendered by the Government of Iran in connection with such overflights or emergency landings are not subject to U.S. sanctions if such transactions do not involve "the U.S. financial system or persons on the Specially Designated Nationals and Blocked Persons List (SDN List) other than any political subdivision, agency, or instrumentality of the Government of Iran listed solely pursuant to Executive Order 13599 or any Iranian depository institution listed solely pursuant to Executive Order 13599."  The guidance takes care to note that "the involvement of other persons on the SDN List, including Iranian financial institutions designated pursuant to Executive Order 13224 or Executive Order 13382,"[198] in the relevant transactions would be subject to U.S. sanctions. In addition, the FAQ makes clear that such transactions are not permissible for U.S. persons and U.S.-owned or -controlled foreign entities, and that such transactions may not "transit" the U.S. financial system, although the FAQ notes an exception for "transactions [that] fall within the scope of 31 C.F.R. § 560.522 or a specific license issued by OFAC and the payments in connection with such authorized transactions are consistent with 31 C.F.R. § 560.516."[199]                                     h.    October 10, 2014 Release of Consolidated Non-SDN Data Files and Upgrade to Sanctions List Search OFAC announced on its website on October 10, 2014, that it would start providing in a consolidated set of data files a Consolidated Sanctions List containing all of its non-SDN sanctions lists (including the Non-SDN Palestinian Legislative Council List "NS-PLC List," the Part 561 List, the Non-SDN Iran Sanctions Act List "NS-ISA List," the Foreign Sanctions Evaders List "FSE List," and the Sectoral Sanctions Identifications List "SSI List").[200]  OFAC noted that although the Consolidated Sanctions List is separate from OFAC’s SDN list, some of its records may also appear on the SDN List.[201]  OFAC created this consolidated list in an effort "to reduce the number of list-related files that must be downloaded in order to maintain an automated sanctions screening program."[202] In addition, OFAC upgraded its Sanctions List Search tool to enable users to simultaneously search for a name on either or both the SDN List and the Consolidated List.[203]  OFAC noted that in about six months, it would stop issuing independent data files for certain lists, but that it would also continue providing and updating independent human readable versions of certain lists.[204]  Further, some minor administrative changes to the non-SDN list data has occurred as a result of this list consolidation effort.[205]                                     i.    October 17, 2014 Guidance Related to the Provision of Humanitarian Assistance by Not-For-Profit Non-Governmental Organizations On October 17, 2014, OFAC issued guidance clarifying the applicability of sanctions for nonprofit non-governmental organizations (NGOs) involved in the provision of humanitarian assistance.[206]  At the outset of its guidance, OFAC affirms its "longstanding" policy to use its licensing authority to support humanitarian relief efforts, noting that even "[w]here such transactions are not otherwise exempt or authorized pursuant to OFAC general licenses, OFAC has long had a favorable specific licensing policy supporting the provision of humanitarian assistance notwithstanding economic sanctions, especially in countries subject to comprehensive economic sanctions."[207] OFAC provides six specific points of clarification.  First, OFAC clarifies that the use of economic sanctions against regimes or groups carrying out violence against civilians is intended to complement objectives of humanitarian assistance.[208]  Next, the guidance provides that general licenses are issued by OFAC where appropriate, and prioritizes "license applications, compliance questions, and other requests" from NGOs seeking to provide humanitarian assistance."[209]  Third, it provides that as long as NGOs are not "dealing" with persons blocked by sanctions they do not need a license in order to provide humanitarian assistance in countries that are not subject to comprehensive sanctions (including Yemen, Iraq, Somalia, South Sudan, and Côte d’Ivoire).[210] OFAC also clarifies that NGOs may make payments, including "taxes" or "access payments" to armed groups whose leaders have been designated by OFAC but the group itself has not been designated.[211]  However, NGOs should ensure they conduct proper due diligence in such situations; for example, NGOs should ensure that an SDN is not profiting from such transactions.[212]  In addition, NGOs operating in areas in which designated armed entities (including those listed as Specially Designated Global Terrorists) are prevalent should be careful not to provide "financial, material, technological, or other services" to or in support of the designated entity.[213]  Even so, OFAC acknowledges that in dangerous and unstable environments some humanitarian assistance may "unwittingly end up in the hands of members of a designated group;" OFAC sanctions enforcement is not focused on such "incidental benefits."[214] Further, the guidance provides that NGOs should contact OFAC directly if they encounter a situation in which urgent humanitarian assistance is needed, but in order to provide such assistance it is necessary for the NGO to provide funds or material support directly or indirectly to an SDN group.  OFAC states in the guidance that it and the interagency will work with the NGO "on a case-by-case basis in an expeditious manner" to address such issues.[215]             6.    Reports                                     a.    Trade Sanctions Reform and Export Enhancement Act (TSRA) 2Q 2013[216] Between January and March 2013, OFAC received 396 license applications requesting authorization to export agricultural commodities, medicine, and medical devices to Iran and Sudan.  OFAC issued 443 licensing determinations (230 of which were received in the same quarter).  During this quarter, OFAC issued 260 licenses, 53 license amendments, 69 "return-without-action" determinations and one denial.  Of the 260 licenses issued, 243 involved products for Iran and 17 for Sudan.                                     b.    TSRA 3Q FY 2013[217] Between April and June 2013, OFAC received 348 license applications requesting authorization to export agricultural commodities, medicine, and medical devices to Iran and Sudan.  OFAC issued 399 licensing determinations (217 of which were received in the same quarter).  Of the determinations, 250 licenses were issued, 72 license amendments were released, 26 were "return-without-action" determinations, and no denial letters were issued.  Of the 250 licenses, 221 involved products for Iran and 29 for Sudan.                                     c.    TSRA 4Q FY 2013[218] Between July and September 30, 2013, OFAC received 298 applications.  OFAC issued 324 determinations (203 of which were for applications received in the same quarter).  Of the determinations, 114 licenses were issued, 46 license amendments, and 26 "return-without-action" determinations.  OFAC issued one denial.  Of the 114 issued licenses, 92 involved products for Iran and 22 for Sudan.                                     d.    2013 Terrorist Assets Report[219] The Report compiles information regarding assets in the United States of designated terrorist and state sponsors of terrorism.  Regarding Specially Designated Global Terrorists,[220] Specially Designated Terrorists[221] and Foreign Terrorist Organizations,[222] as of 2013, funds totaling approximately $22 million were blocked pursuant to these terrorist sanctions programs.  The Report lists $2.3 billion in funds blocked in connection with state sponsors of terrorism, (Cuba, Iran, Sudan, and Syria), and $32 million in non-blocked funds for residents and entities of state sponsors of terrorism.[223]                                     e.    Sixth Biennial Report of Licensing Activities Pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000[224] The Biennial Report summarized TSRA-related activities for the period from October 2010 through September 2012 (hereinafter "Reporting Period").  OFAC reported an 11.6 percent increase in the number of license applications in the Reporting Period over the period from October 2008 through September 2010 (hereinafter the "Preceding Period").  The license applications were split 91.2 percent for Iran, 8.8 percent in connection with trade to Sudan.  According to the report, the processing time for license applications increased to 93 days from 88 days during the Preceding Period.  The time to process licensing determinations[225] increased from 73 business days to 75 business days during the Reporting Period.  In explaining the current processing time, OFAC noted the review by other agencies (to screen transactions for persons that promote international terrorism, as well as chemical, biological, WMD risk and export control issues), in addition to the complexity, volume and length of the license applications.                                     f.    TSRA 1Q FY 2014[226] Between October 1 and December 31, 2013, OFAC received 306 license applications requesting authorization to export agricultural commodities, medicine, and medical devices to Iran and Sudan.  OFAC issued 265 licensing determinations (175 of which were received in the same quarter).  Of the determinations, 99 licenses were issued, 21 license amendments were released, 44 were "return-without-action" determinations, and one denial letter was issued.  Of the 99 licenses issued, 81 involved products for Iran and 18 for Sudan.                                     g.    TSRA 2Q FY 2014[227] Between January and March 2014, OFAC received 373 applications.  OFAC issued 378 licensing determinations, 232 of which were for applications received during the quarter.  OFAC issued 160 licenses, 32 amendments, 94 applications were "returned without action" and 5 applications were denied.  Of the 160 licenses issued, 137 involved Iran and 23 involved Sudan.             7.    Select Enforcement Actions                                     a.    Clearstream Banking S.A.[228] Clearstream Banking S.A. allegedly violated the ITSR by maintaining an account at a U.S. financial institution in which the Central Bank of Iran (CBI) maintained a beneficial ownership interest.  From December 2007 to June 2008, Clearstream held said account in custody at a central securities depository in the United States.  The account was composed of 26 securities with a nominal value of $2.813 billion.  Due to the nature of Clearstream’s account in New York, the CBI’s beneficial ownership was not transparent to the U.S. financial institution.  In addition to holding the securities on the CBI’s behalf, Clearstream also exported custody and related services from the United States to the CBI.  In 2007 and 2008, OFAC officials met with Clearstream to discuss ending their business with Iranian clients.  Yet, in February 2008, Clearstream took evasive action per their client’s instruction, transferring the securities entitlements from the CBI’s account to a European bank’s newly-opened account.  This allowed CBI to continue to hold its interest in the securities through Clearstream and buried CBI’s interest deeper in the custodial chain since the record ownership of the securities entitlement changed but the beneficial ownership did not. Based on the totality of the circumstances, OFAC determined that Clearstream had reason to know that the CBI was maintaining beneficial ownership of the securities.  OFAC also determined that Clearstream did not voluntarily self-disclose the apparent violations and that said violations were reckless and constituted an egregious case.  The base penalty for the matter was $5.626 billion and Clearstream agreed to remit $151,902,000 to settle potential civil liability for its actions. In reaching a settlement amount, the aggravating factors OFAC considered included Clearstream’s reckless failure to perform sufficient due diligence when it transferred the securities entitlement to another financial institution’s custody account with Clearstream; that several employees including at least one supervisor and senior executive had reason to know that the CBI’s beneficial ownership would not change following the transfer and the significant harm Clearwater’s actions caused to U.S. sanctions objectives.  The mitigating factors OFAC considered included the significant remedial actions Clearwater took, such as implementing best practices and enhancing controls to prevent recurrence of violations; the substantial cooperation Clearwater demonstrated during the investigation, including agreeing to toll the statute of limitations; the lack of prior enforcement action and the totality of the circumstances to ensure a proportional enforcement response.  A spokesperson for Clearstream specified some of the remedial actions taken, including better regulation of omnibus accounts, regular know-your-customer checks and the designation of a board member exclusively to the topic.[229] OFAC emphasized that its action highlights the particular risks faced by intermediaries, custodians and other firms operating in the international securities market.  OFAC suggested other steps that such firms could take, including making their customers aware of sanctions obligations, conducting due diligence and monitoring accounts for suspicious activities.[230]  Despite the resolution of Clearstream’s civil liability, the U.S. Attorney for the Southern District of New York recently opened a grand jury investigation into Clearstream’s alleged violations of Iranian sanctions laws.[231]  The investigation is part of a lawsuit brought by family members of the victims of the 1983 Beirut terrorist attack, who accuse Iran of supporting the perpetrators of the attack.[232]                                     b.    Joint Stock Commercial "Bank of Moscow"[233] Joint Stock Commercial "Bank of Moscow" allegedly violated Executive Order 13,382 and the Weapons of Mass Destruction Proliferators Sanctions Regulations, 31 C.F.R. Part 544, based on its transfer of funds on behalf of Bank Melli Iran Zao, Moscow, Russia (BMI Russia).  From January 2008 to July 2009 Bank of Moscow sent 69 fund transfers totaling $41,306,113 on behalf of BMI Moscow, which had been designated by OFAC on October 2007 pursuant to Executive Order 13,382.  The fund transfers were processed to or through the United States but the payment messages sent in connection with them used abbreviations instead of specifically referring to BMI Russia and were thus processed without intervention. OFAC determined that the Bank of Moscow did not voluntarily self-disclose the alleged violations and that the violations constituted a non-egregious case, warranting a base penalty of $14,063,000.  The Bank of Moscow agreed to remit $9,492,525 to settle potential civil liability for its actions.  In determining the settlement amount, OFAC considered aggravating factors including the Bank of Moscow’s failure to exercise an appropriate degree of caution or care in avoiding the conduct that led to the alleged violations; the significant harm that its actions caused to the U.S. sanctions program objectives; its status as a large and commercially sophisticated financial institution; and its lack of an adequate compliance program at the time of the alleged violations.  Among the mitigating factors OFAC considered included the Bank of Moscow’s lack of sanctions in the preceding 5 years; its remedial action to improve compliance with U.S. laws; and its cooperation with the investigation by agreeing to toll the statute of limitations.  OFAC also noted that this matter highlights the particular sanctions risk faced by foreign financial institutions that maintain accounts for persons subject to OFAC sanctions and conduct significant business through the U.S. financial system.                                     c.    CWT B.V.[234] CWT B.V. (CWT) allegedly violated the Cuban Assets Control Regulations (CACR), 31 C.F.R. Part 515, by dealing in property in which Cuba or its nationals had an interest when it provided services related to travel to or from Cuba to 44,430 people.  The services, which occurred from August 2006 to November 2012, were provided by CWT business units outside the United States.  CWT, incorporated in the Netherlands, became subject to U.S. jurisdiction when it became majority owned by U.S. persons in 2006.  OFAC determined that CWT voluntarily self-disclosed the violations and only a small portion of the alleged violations occurred after CWT filed its self-disclosure.  The base penalty for CWT’s apparent violations was $11,093,500. CWT agreed to pay $5,990,490 to settle potential civil liability for its actions.  In reaching the settlement amount, OFAC considered a number of factors including CWT’s failure to exercise a minimal degree of caution or care regarding its obligations to comply with the CACR by processing transactions for more than four years before recognizing that it was subject to U.S. jurisdiction; CWT’s status as a commercially sophisticated international corporation; the significant harm that CWT caused to the sanction objectives due to the large number of transactions and people it assisted and CWT’s non-existent or inadequate compliance program.  The mitigating factors OFAC considered included the fact that this was CWT’s first violation; CWT’s substantial cooperation during the investigation including agreeing to toll the statute of limitations and providing OFAC with detailed and well organized documents; and the significant remedial action CWT took.                                     d.    Decolar.com Inc.[235] Decolar.com Inc. (Decolar) allegedly violated the CACR by dealing in property in which Cuba or Cuban nationals had an interest when its foreign subsidiaries assisted 17,836 persons with reservations for travel between Cuba and countries other than the United States.  The travel services were provided from March 2009 to March 2012 and were done without OFAC permission.  OFAC determined that Decolar voluntarily self-disclosed this matter, that the apparent violations occurred prior to agency notice and that the base penalty for the violations was $4,460,000. Decolar agreed to pay $2,809,800 to settle potential civil liability arising out of its actions.  In reaching a settlement agreement, OFAC considered a number of factors, including the reckless disregard for U.S. sanctions requirements that Decolar exhibited by relying on third party assertions that it did not require an OFAC license rather than conducting due diligence; the number of violations and length of time over which they occurred; senior management’s awareness that its foreign subsidiaries were providing Cuba related travel services to third country nationals; Decolar’s status as a sophisticated services provider and the lack of a compliance program at the time of the alleged violations.  Among the mitigating factors that OFAC considered included the fact that Cuba related transactions were a small portion of Decolar’s overall business; the lack of prior enforcement action; Decolar’s immediate halt of its provision of Cuba related travel services; its adoption of OFAC compliance policies; and its cooperation with the investigation, including provision of information in a clear and organized fashion.                                     e.    Fokker Services B.V.[236] Fokker Services B.V. (FSBV) allegedly violated the ITSR, and the Sudanese Sanctions Regulations (SSR), 31 C.F.R. Part 538, by indirectly exporting spare aircraft parts to Iran on 1,112 occasions and to Sudan on 41 occasions from November 2005 to September 2010.  FSBV indirectly exported or re-exported parts to Iranian customers that had been procured or repaired in the United States or which were of U.S. origin and subject to export license requirements independent of ITSR.  Similarly, FSBV exported or re-exported parts to Sudanese customers or end users that were either procured or repaired in the United States or were subject to additional licensing requirements. OFAC determined that FSBV had voluntarily self-disclosed this matter, and that the violations constituted an egregious case with a base penalty of $145,492,023.  FSBV agreed to pay $50,922,208 to settle its potential civil liability.  FSBV’s settlement was part of a global settlement which also included the Department of Commerce’s Bureau of Industry and Security (BIS), and the D.C. U.S. Attorney’s Office (USAO).  FSBV will satisfy its liability with the payment of a $10.5 million civil monetary payment to OFAC and BIS, a forfeiture of an additional $10.5 million to the USAO pursuant to their deferred prosecution agreement, the acceptance of responsibility for its egregious conduct and its adherence to all other terms and conditions of the agreements with the involved agencies. In reaching a settlement amount, OFAC considered a number of factors including, FSBV’s willful and reckless violation of U.S. law due to its knowledge that it was shipping U.S. origin parts to customers in Iran and Sudan; the significant harm FSBV caused to the objectives of the sanctions programs due to the volume and value of the transactions; FSBV’s status as a sophisticated and experienced aerospace services provider; its lack of a formal compliance program when the incidents occurred; and its failure to institute controls to completely stop the infractions once discovered.  Among the mitigating factors OFAC considered included FSBV’s lack of previous sanctions violations; FSBV’s new and more effective internal controls, especially with respect to its export compliance program; and the substantial assistance FSBV provided during the investigation, including conducting an internal investigation, producing well organized records and agreeing to toll the statute of limitations.                                     f.    BNP Paribas[237] BNP Paribas (BNPP) and OFAC agreed to a settlement of $963 million as part of an overall $8.9 billion settlement with various federal and state agencies.  The settlement, the largest ever in OFAC history, resolved the matter that involved over 3,800 payment transactions processed from 2005 to 2012 in apparent violation of the SSR, the ITSR, the CACR and the BSR.  The settlement agreement[238] states that BNPP omitted references to or replaced the names of sanctioned parties in transactions to or through the United States.  The payments occurred in various BNPP branches and subsidiaries, but the majority of the payments were facilitated or conducted by BNPP’s subsidiary in Switzerland (BNPP Suisse) and branch in France. The statutory maximum and base civil monetary penalty were $19.2 billion.  In the Settlement Agreement, OFAC noted that the conduct occurred notwithstanding advice from a U.S. law firm regarding potential exposure, and occurred also after OFAC contacted BNPP regarding BNPP Suisse’s business activities with Iran and Sudan.  OFAC concluded that the violations constituted an egregious case.  OFAC also noted BNPP’s cooperation and global remedial actions, which included the relocation of the group responsible for sanctions policies from France to the United States, enhanced sanctions compliance resources and compliance review procedures.                                     g.    Epsilon Electronics, Inc.[239] Epsilon Electronics, Inc. (Epsilon) was assessed a penalty of $4,073,000 for violating the ITSR.[240]  Epsilon issued 39 invoices for audio video equipment to a company that shipped most if not all of its goods to Iran.  Accordingly, Epsilon knew, or had reason to know, that the items would be shipped to Iran.  Further, five of the invoices were issued after Epsilon received a letter from OFAC cautioning Epsilon regarding the general prohibition on exports and reexports of U.S. goods to Iran.  OFAC determined that the five invoices represented an egregious case and the prior 34 invoices were not egregious.  OFAC noted a number of aggravating circumstances including the fact that Epsilon displayed reckless disregard for U.S. sanctions when it shipped to a company that it knew or had reason to know would ship the items to Iran; Epsilon attempted to conceal its sales to Iran by altering its Web site; the sales displayed a pattern of conduct; the value of the goods at more than $3.4 million; providing false information in response to a subpoena; and the fact that Epsilon continued shipping after it received OFAC’s cautionary letter.  With respect to mitigating factors, OFAC noted that Epsilon had not received a penalty notice or Finding of Violation in the five years prior to the transactions at issue; Epsilon was a small company; and Epsilon cooperated by agreeing to toll the statute of limitations.                                     h.    Citigroup Inc.[241] Citigroup Inc. (Citigroup) settled alleged violations of the ITSR, the Weapons of Mass Destruction Proliferators Sanctions Regulations, the Foreign Narcotics Kingpin Sanctions Regulations, or the Global Terrorism Sanctions Regulations.  The company agreed to remit a total of $217,841 to OFAC.[242]  The bank’s Malaysian trade services unit, Citigroup Trade Services Malaysia (Citi Penang), allegedly processed four export bill collection applications on behalf of Citibank N.A. that involved the shipment of good to Iran.[243]  The applications totaled $638,074.15 and were processed between April and November of 2009.[244]  Although documentation referred to Iran and IRISL, the Citi Penang operators did not review the bills of landing, certificates of origin or shipment advice.[245]  Citi Penang disclosed voluntarily the transaction to OFAC. Additionally, on February 9, 2010, January 12, 2011, March 8, 2011 and October 29, 2012, the bank allegedly processed four fund transfers totaling $133,786.73 involving entities that appeared on OFAC’s SDN List.[246]  Citigroup’s software did not properly identify these references to the SDN List, one of which was a variation of an SDN name.  The company, however, took remedial action and implemented a programmatic fix to address the name variation issue.[247]  In addition, three of the four fund transfers were blocked by U.S. financial institutions, reducing any potential impact of the transfers on U.S. sanctions objectives.  The base penalty amount for the potential violations was $484,091.  Citigroup’s remedial actions and cooperation with OFAC were mitigating factors that significantly reduced the final settlement amount to $217,841–less than half of the base penalty amount.[248]                                     i.    Zulutrade, Inc. Zulutrade, Inc. (Zulutrade) agreed to pay $200,000 to avoid potential civil liability for apparently violating the ITSR, the SSR, and Executive Order 13,582, "Blocking Property of the Government of Syria and Prohibiting Certain Transactions with Respect to Syria."[249]  Beginning in 2009, the company maintained online trading accounts for over 400 persons in Iran, Sudan, and Syria.[250]  Also, $10,264.36 in fund transfers originated from the Zulutrade website.[251]  Zulutrade had failed to take any measures to screen or monitor their customer base for the purpose of complying with OFAC, and the base penalty for the violations was $844,090,000.[252]  Although the company did not self-disclose the violations, OFAC considered the violations non-egregious because of mitigating factors such as: the small size of the company, their remedial actions in response to the apparent violations, their lack of penalty notices or Findings of Violation in the five years prior to the earliest violation, and their cooperation with OFAC.[253]                                                                        j.    Bupa Insurance Company, Bupa Worldwide Corporation and USA Medical Services Corporation[254] Bupa Insurance Company (BIC), Bupa Worldwide Corporation (BWW) and USA Medical Services Corporation (USAMED), (collectively "Bupa Florida"), a group of Florida corporations, agreed to remit $128,704 to avoid potential civil liability for 39 apparent violations of the Narcotics Trafficking Sanctions Regulations, the Foreign Narcotics Kingpin Sanctions Regulations, and the CACR.  The violations occurred between March of 2008 and March of 2011 when the corporations provided health insurance coverage and processed reimbursements for persons on OFAC’s SDN List.[255]  Bupa Florida apparently misinterpreted the scope of OFAC regulations and did not monitor or screen health insurance policyholders, dependents, or providers against the SDN List.[256]  BWW and USAMED also provided insurance support services to BIC and other insurers for policies that were issued to, or provided coverage for individuals on the SDN List.[257]  The total transaction value for the violations was $190,672.68 and the base penalty amount was $95,337.[258]  OFAC determined that Bupa Florida voluntarily self-disclosed the apparent violations and that the violations were non-egregious.  However, there were a number of aggravating factors that led to the settlement amount including: Bupa Florida acted with reckless disregard for OFAC requirements and failed to exercise a minimal degree of caution; Bupa Florida had actual knowledge or reason to know about the policyholders being on the SDN List; and Bupa Florida did not have a compliance program in place at the time of the violations.[259]                                     k.    ESCO Corporation[260] ESCO Corporation (ESCO) agreed to pay $2,057,540 to avoid potential civil liability for apparent violations of the CACR.  Around November 7, 2007, the company’s subsidiary purchased nickel briquettes that were made, or derived, from nickel of Cuban origin.[261]  The total transaction value for the violations was $6,188,149 and the base penalty was $3,048,208.[262]  OFAC found that aggravating factors included: ESCO acted with reckless disregard for the Cuba sanctions, ignoring red flags that the briquettes were made with Cuban nickel; ESCO caused significant harm to the Cuba sanctions program by conduction large-volume and high-value transactions with SDNs; and ESCO is a commercially sophisticated company.[263]  Mitigating factors included:  ESCO had not received a penalty notice or Finding of Violation from OFAC in the five years prior to the first violation; ESCO remedied its compliance plan and did a thorough look-back; and ESCO cooperated with OFAC, including extending a statute of limitations tolling agreement.[264] THE EUROPEAN UNION AND THE UNITED KINGDOM As in our previous year-end updates, the European Union (EU) and United Kingdom (UK) sections will be divided into three parts covering: i) legislative developments; ii) case law; and iii) enforcement. I.    Regulation and Legislation             A.    European Union The EU has adopted new or amended existing sanctions with regard to a number of jurisdictions during 2014. While the majority of the amendments concern updates of the list of persons, entities and groups targeted by existing sanctions (i.e., Afghanistan, Belarus, Côte d’Ivoire, Egypt, Iran, North Korea, Liberia, Libya, Sudan, Tunisia, and Zimbabwe) or an extension of the expiration date (i.e., Bosnia and Herzegovina, Egypt, Guinea-Bissau, Iran, Moldova, and Myanmar), for a number of jurisdictions the developments have been of a more substantive nature, including the adoption of wholly-new sanctions regimes regarding Ukraine/Russia, Yemen, and South Sudan.  Our update will commence with Ukraine/Russia, before treating the other jurisdictions in turn.             1.    Ukraine & Russia The EU has repeatedly taken action over the course of 2014 in response to the escalation of the political crisis in Ukraine.  The EU first imposed sanctions on March 5, 2014, in light of its concern over reports on human rights violations, violence, intimidation, and missing persons. The EU’s sanctions are most readily understood when divided into four categories:  i) sanctions against former Ukrainian officials for misappropriation of state assets; ii) the designation of individuals and entities for threatening the territorial integrity of Ukraine (largely Ukrainian separatists and their supporters); iii) economic sanctions regarding Crimea and Sevastopol; and (iv) the targeted sectoral sanctions against Russia that focus on the Russian oil industry, on restrictions against the export to Russia of dual-use or military equipment, and which limit a defined list of partially-state owned entities from accessing the EU’s capital markets.                                                 a.     The misappropriation sanctions The EU sanctions first focused on freezing and recovering misappropriated Ukrainian state funds and targeted 18 persons identified as responsible for that misappropriation, including former president Viktor Yanukovych.[265]  Another four were added on April 15, 2014.  Many of these individuals are challenging their listing in the European courts, but no such cases have yet been heard.  European banks and other financial services firms were required to notify the authorities in their respective Member States if they held accounts or assets of such individuals.  It is likely that it was such reporting that led to a number of asset seizures in a number of countries as outlined in the Enforcement section below.                                                 b.     The designations of those threatening Ukrainian territorial integrity Due to the continued deterioration of the situation in the following weeks and the failure to take de-escalatory steps by Russia, the EU also imposed sanctions on Russian officials and additional Ukrainian officials.[266]  Travel bans and asset freezes were imposed against "persons responsible for actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine, including actions on the future status of any part of the territory which are contrary to the Ukrainian Constitution, and persons, entities or bodies associated with them." In addition, the designation criteria for these sanctions were amended in May 2014 to also include individuals responsible for "actively supporting or implementing actions or policies which undermine the territorial, integrity, sovereignty and independence of Ukraine" and their associates, as well as entities in Crimea or Sevastopol whose ownership has been transferred contrary to Ukrainian law.[267] A second amendment was adopted in July 2014.  As such, travel bans and asset freezes may also be imposed against those "responsible for, actively supporting or implementing, actions or policies which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine, or stability or security in Ukraine or which obstruct the work of international organisations in Ukraine" and their associates; and companies, legal entities or bodies "supporting, materially or financially, actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine."[268] The designation criteria for these travel bans and asset freezes were again extended on September 8, 2014 to include legal persons, entities, or bodies conducting transactions with the separatist groups in the Donbass region of Ukraine. The first designation of individuals and entities leading to the imposition of travel bans and asset freezes within the EU took place on March 21, 2014.[269]  Subsequent additions to the lists have taken place on April 15, 2014[270] April 28, 2014[271] July 25, 2014[272] July 30, 2014[273] September 8, 2014[274] November 17, 2014[275] and December 20, 2014.[276]  In total 132 individuals and 28 entities and companies have now been designated.  The restrictions were last renewed in early September 2014 and are in place until March 15, 2015, when they are likely to be renewed.                                                 c.    Economic sanctions regarding Crimea and Sevastopol Also, in view of Crimea’s annexation by Russia, the EU restricted European investment in and trade with Crimea.  The EU has also announced that it expects international financial institutions to refrain from financing projects that explicitly or implicitly recognize Russia’s illegal annexation.[277] Our alert of August 6, 2014 dealt in detail with the Crimean sanctions as they then stood.[278]  Interested readers are advised to consult that alert for greater detail which is not repeated here.  In short the EU’s first step was to publish Regulation 692/2014 of June 23, 2014 (the "Crimean Regulation") which imposed a ban on imports of goods from Crimea or Sevastopol to the EU unless authorized by the Ukrainian authorities.  Then in August, the EU amended Regulation 692 to impose significant restrictions on investment, financial assistance and technical assistance or brokering services in the transport, energy, telecommunications, oil, gas, and minerals sectors.  These restrictions included a prohibition on the direct or indirect export of largely oil and gas related technology listed in an Annex to the regulation. On December 18, 2014, the EU amended the Crimean Regulation to extend the sanctions into a number of additional sectors, as well as amending the Annex to include more equipment.[279]  The provision of technical assistance, financing or financial assistance or brokering services in relation to all the listed equipment is also now prohibited.  Subject only to a very short grandfathering period of two days, the amendments also now prohibit the acquisition of real estate in Crimea or Sevastopol; the investment in any entity in Crimea or Sevastopol; the formation of a joint venture in or with any entity in Crimea or Sevastopol; and the provision of services related to tourism activities in Crimea or Sevastopol, including barring EU cruise ships from entering any of seven listed ports in Crimea, including Sevastopol, Kerch, and Yalta.  Additionally, the sanctions regarding the transport, energy, telecommunications, oil, gas, and minerals sectors have been extended to prohibit the provision of technical assistance, brokering, or construction and engineering services. We fully expect that further sanctions will be imposed regarding Crimea and Sevastopol during the course of 2015.                                                 d.    Targeted sectoral sanctions against Russia As mentioned above, our EU Sectoral Sanctions Alert dealt in detail with the Russian sectoral sanctions as they then stood.  Additionally, export licenses have been suspended for equipment which might be used for internal repression. In addition, also in July 2014, the EU requested the European Investment Bank suspend new financing of public sector projects in Russia.[280]  The EU would reassess suspending bilateral EU-Russia cooperation programs. The next significant package of sanctions was adopted at the end of July 2014.  In particular, the new sanctions:[281] i          prohibit EU nationals and companies from (i) buying or selling bonds, equity, and other financial instruments with a maturity of over 90 days (on which see below), issued after August 1, 2014 by a defined list of major credit institutions or finance development institutions established in Russia with over 50% public ownership or control, or non-EU entities whose proprietary rights are more than 50% owned by such listed entities; and (ii) providing related services (e.g., brokering).  The initial list of such entities was Sberbank, VTB Bank, Gazprombank, Vnesheconombank, and Rosselkhozbank; ii        impose an arms embargo, also covering related items and services on the EU common military list;[282] iii      ban exports of dual-use goods and technology for military use in Russia or to Russian military end-users; and iv      ban export of energy-related equipment and technology, unless authorized by the competent authorities of the Member States.  In any event, export licenses will not be granted if the products are destined for deep water oil exploration and production, arctic oil exploration or production and shale oil projects in Russia. Suppliers with contracts concluded before July 30, 2014 and executed before October 28, 2014 were able to apply for an export license with the relevant Member State authorities. Before this, individual Member States had issued some guidance of their own.  For instance on August 12, 2014 the German Bundesamt für Wirtschaft und Ausfuhrkontrolle (BAFA) issued guidance,[283] and two days later the UK’s Export Control Organisation issued a Notice to Exporters.[284]  Despite the proximity in time, differences were apparent between the approaches adopted.  For instance, the UK approach was that if a company was exporting goods listed in Annex II to another Member State, but the company knew that the goods were destined for Russia, it was only the ultimate exporter who was required to apply for a license.  The German approach was that a transfer license would be required for the initial transfer in the same circumstances.  The two items of guidance also covered different territory.  Thus the German Guidance clarified that having a deposit with a listed Russian bank was not prohibited, while the UK Guidance offered assistance on what was meant by "Arctic" ("the area north of the Arctic Circle"), and "Deep water" (noting no definition as such, but drawing attention to the U.S. definition of "greater than 500 feet"). The EU maintained its robust approach to sanctions relating to the Ukraine situation during the latter part of 2014.  Following the cease-fire negotiated in early September, 2014, and almost immediate violations thereof, the EU adopted additional sanctions on September 8, 2014.  EU Council President Van Rompuy stated that "the EU stands ready to review the agreed sanctions" depending on the perceived willingness of Russia to comply with the ceasefire. In particular, the designation criteria for sanctions were once again extended in order to target those conducting transactions with separatist groups.  In addition, the existing ban on financial instruments (and related services) issued by major State-owned Russian banks was refined with a number of smaller changes, including a wholly-new Article 5.  Importantly, the prohibitions were now extended to cover those instruments with a maturity of greater than 30 days (previously 90 days) and extended to other entities in the defense and oil sectors (i.e., United Aircraft Corporation, Rosneft, Transneft, Gazpromneft, Ural Vagonzavod, and OPK Oboronprom).[285] One consequence of these sanctions applying to these Russian entities is that there are now two lists of sanctioned entities for the EU and UK.  All entities and persons subject to asset freezes remain included in the Consolidated List, while the Russian entities subject to restrictions on access to the EU’s capital markets are not found in the Consolidated List, but are instead only listed in the separate Ukraine: list of persons subject to restrictive measures in view of Russia’s actions destabilizing the situation in Ukraine.[286] Further, on December 5, 2014, the EU issued Regulation 1290/2014 amending and clarifying some of the existing sanctions.[287]  Notably for the purposes of the prohibitions regarding the Russian oil sector, "deep sea" was defined as "waters deeper than 150 metres", "arctic" was restated as "the offshore area north of the Arctic Circle", and "shale oil projects" was restated as "projects that have the potential to produce oil from resources located in shale formations by way of hydraulic fracturing; it does not apply to exploration and production through shale formations to locate or extract oil from non-shale reservoirs."  Moreover "Russia" was itself extended to include its Exclusive Economic Zone and its Continental Shelf. On December 16, 2014, the European Commission published non-binding guidance on the capital markets restrictions.[288]  This is in the form of 26 Q&As dealing with the parameters of the trade finance exemption contained in Art. 5(3), and questions of whether securities such as derivatives, interest rate swaps, and depositary receipts fall within or outside the prohibitions, and other issues.  The Guidance should be consulted by anyone considering the breadth of the prohibitions on accessing Europe’s capital markets.  A noteworthy feature of the Guidance is the aggressive stance taken regarding circumvention.  For instance, Question 16 asks whether an EU person can place a term deposit with a sanctioned Russian entity with a maturity over 30 days.  The answer states that such term deposits are not prohibited before continuing: "However, where (term) deposits are to be used to circumvent the prohibition on new loans, such deposits would be prohibited under Article 12 [anti-circumvention] in combination with Article 5 of the Regulation."  Thus the Commission is expressing the view that a non-prohibited activity, if undertaken with the intent to evade one of the prohibitions, would constitute an offence. In response to the EU and U.S. sanctions, on August 7, 2014, Russia imposed, with immediate effect, a one-year ban on certain food imports into Russia, including the import of fruit, vegetables, meat, fish, seafood, milk, dairy products, and a wide range of processed foods from the United States, the EU, Australia, Canada, and Norway.  Following these measures, the EU was reported to be planning discussions with Latin American countries to dissuade them from supplying agricultural products to Russia.  Several countries, including Brazil and Chile, had stated that the import ban introduced by Russia could offer them a trade advantage.[289] In addition, Russia has stated it is also considering banning European airlines en route to Asia from flying over Siberia, and that it is "potentially ready" to introduce sanctions in various sectors, including the automobile industry, shipbuilding, and aircraft production. Further, on September 26, 2014, press reported that Russia barred entry into its territory for Rebecca Harms, a German MEP, despite her diplomatic status, as she had been designated as one of the EU officials who played a role in adopting the EU sanctions targeting Russia.  MEP Harms was traveling to attend a court hearing in relation to proceedings against a Ukrainian officer detained in Russia after being captured by pro-Russian Rebels in eastern Ukraine.[290] Russia has also taken steps to mitigate the effect of the EU sanctions against it.  On October 8, 2014, the Russian Parliament carried out a first reading of a draft law which would allow the government to seize foreign-owned assets in order to compensate individuals and entities targeted by western sanctions.  The draft legislation must pass through two additional readings before heading to President Putin for signature.[291] In August 2014, Ukraine itself adopted a law enabling the imposition of sanctions on foreign individuals and entities in response to threats to its national security, breaches of UN Security Council resolutions, and violations of EU regulations and decisions.  The government announced it had already identified 172 individuals and 65 entities – mainly Russian – to be considered for the sanctions for "supporting terrorism, the annexation of Crimea and having direct responsibility for crimes on Ukrainian soil."[292] In addition, Norway, while not an EU Member State but a member of the European Economic Area, on August 15, 2014, joined the EU in imposing sanctions on Russia, by introducing an arms embargo, a ban on the supply of material and technology for the oil sector and related services, sanctions regarding Crimea and Sevastopol similar to those imposed by the EU (see above), a ban on Russian state-owned banks from taking long- and mid-term loans, and asset freezes and travel bans.[293]  In October 2014, Norway announced further strengthening of the restrictions, in line with the package of sanctions adopted by the EU. In addition to Norway, the EU announced on October 15, 2014 that Ukraine itself, as well as Albania, Iceland, Liechtenstein, and Montenegro have aligned, or will do so in the near future, their national policies with the EU sanctions package adopted on September 8, 2014.[294] Notwithstanding EU Council President Van Rompuy’s statement in September that "the EU stands ready to review the agreed sanctions," in light of the continued tension in Ukraine, the EU decided in early October to maintain the sanctions, after a discussion on the implementation of the cease-fire.  The EU again reviewed the sanctions on November 17, 2014, but considered that in light of the unchanged circumstances in Ukraine, the measures would be maintained.  Additional pro-Russia separatists were designated for travel bans and asset freezes.[295]             2.    Afghanistan In October 2014, the EU implemented amendments to the sanctions imposed by the United Nations Security Council (UNSC) targeting Afghanistan, and added 5 individuals to the list of targets.  The new designations are reasoned on grounds of the individuals’ involvement as senior members of the Taliban or the Haqqini Network.[296]             3.    Central African Republic The EU implemented the UN arms embargo on the Central African Republic in December 2013[297] and introduced additional sanctions in the form of travel bans and asset freezes in March 2014.[298]             4.    Democratic Republic of the Congo In March 2014, the EU amended its sanctions regime regarding the Democratic Republic of the Congo[299] to provide for (i) an additional exception to the 2010 arms embargo, (ii) an update of the criteria for designation for travel restrictions and asset freezes, and (iii) a new exception to the ban on provision of certain services for technical assistance, financing and financial assistance related to arms and related material, for the support of or use by the African Union Regional Task Force.[300]             5.    Côte d’Ivoire In July 2014, the EU repealed its import ban on diamonds originating in Côte d’Ivoire.  At the same time, the EU amended the scope of and exceptions to the embargo on arms and related materials.[301]  In particular, supply of materials intended solely for the support or use by the UN operation in Côte d’Ivoire and the French supporting forces, as well as supplies transiting through Côte d’Ivoire intended for support or use by UN Peacekeeping operations are exempt from the embargo.             6.    Republic of Guinea In April 2014, the EU lifted the arms embargo and the embargo on equipment which might be used for internal repression which had been in force since 2010.[302]  The travel bans and asset freezes on members of the National Council for Democracy and Development (or associated persons or entities) remain in place.  While the sanctions were set to expire in October 2014, the EU renewed the sanctions on October 20, 2014 until October 27, 2015.[303]             7.    Iran In April 2014, the EU renewed the existing sanctions until April 13, 2015.  However, in January 2014, the EU suspended certain restrictive measures for an initial duration of six months.  The suspension, originally in force until July 20, 2014, has been prolonged twice and will be applicable until June 30, 2015.[304]  All other EU sanctions and restrictions remain in place and in force. This mitigation followed the Joint Plan of Action (JPOA) of November 24, 2014 between Iran and China, Russia, the United States, France, Germany, and the UK (supported by the High Representative of the EU for Foreign Affairs and Security Policy) ("P5+1" or "EU3+3").[305]  The JPOA sets out an approach towards reaching a long-term comprehensive solution to the Iranian nuclear issue.  In that regard, the EU temporarily suspended the import ban on petrochemical products, the prohibition on transport of Iranian crude oil, the ban on the provision of certain services where related to petrochemical products or Iranian crude oil, the ban on trade in gold and precious metals with the Iranian government, and the ban on the supply of certain vessels to Iran.  The amendments also temporarily increase the thresholds of the restrictions on transfers of funds to and from Iranian persons and provide temporary exceptions to the freezing of funds and economic resources.[306]             8.    Iraq In July 2014, the EU amended the basis of its financial sanctions against Iraq and clarified existing financial sanctions.  In particular, national authorities of Member States now have to power to authorize the making available of funds and economic resources in certain circumstances, including ordinary living expenses including taxes, rent and medical expenses, professional legal expenses, or bank service charges.[307]             9.    Liberia In March 2014, the EU amended the notification requirements concerning exceptions to the ban on provision of certain services, implemented by Council Regulation (EU) 262/2014.[308]             10.    Libya The EU amended, in January 2014, the "non-liability" and "no claim" clauses of its sanctions targeting Libya.  Freezing (or refusing to make available) funds or economic resources does not give rise to liability if carried out in good faith, in accordance with EU regulations, and not done negligently.  In addition, claims in connection with any contract or transaction, the performance of which has been affected by EU regulation will not be satisfied, if they are made by a Libyan person or entity, designated person/entity, or any party so connected.[309] In June 2014, the EU implemented UNSC Resolution 2146 (2014) and introduced measures targeting illicit export of crude oil from Libya by (i) requiring flag States of listed vessels to take measures preventing the loading, transport, or discharge of illicitly exported crude oil (including the authorization to inspect the vessel); (ii) prohibiting the provision of bunkering services (i.e., provision of fuel or supplies) to listed vessels; and (iii) restricting financial transactions with respect to illicitly exported crude oil aboard listed vessels.[310] In addition, in October 2014, the EU implemented UNSC Resolution 2174 (2014) and further amended its sanctions targeting Libya.[311]  The amendments are a response to the escalation of hostilities in Libya and target militia and their supporters.  In particular, the EU extended the designation criteria for the arms embargo and asset freezes/travel bans to "individuals and entities determined […] to be engaging in or providing support for other acts that threaten the peace, stability or security of Libya, or obstruct or undermine the successful completion of its political transition."             11.    North Korea The EU, on October 8, 2014, amended existing sanctions against North Korea.[312]  The sanctions, in force since 2006, target import and export, financial support for trade, and the finance sectors, and also include travel bans and asset freezes. In particular the amendments provide for (i) the designation for sanctions of Ocean Maritime Management Company Limited for allegedly assisting in a breach of the arms embargo against North Korea; and (ii) the removal from the list of targets of Jon Pyong-ho.             12.    Somalia On May 12, 2014, the EU amended the notification requirements concerning certain exceptions to the arms embargo and the ban on related services; implemented by Council Regulation (EU) No 478/2014.[313]  In addition, in October 2014 the EU implemented amendments to the UN sanctions and designated two additional individuals for reasons of their position in al-Shabaab.[314]             13.    South Sudan In July 2014, the EU imposed sanctions targeting "persons obstructing the political process in South Sudan, including by acts of violence or violations of ceasefire agreements, as well as persons responsible for serious violations of human rights in South Sudan."[315]  In particular, the EU introduced (i) an arms embargo; (ii) a prohibition of the provision of arms-related technical assistance and, brokering or other services; (iii) a prohibition of the provision of financing or financial assistance; and (iv) a prohibition on participating–knowingly and intentionally–in activities with the aim of circumventing the sanctions.  The measures also provide for standard exceptions for the supply of goods used in certain circumstances for which an export license may be requested from the relevant Member State authorities, such as:  human rights monitoring, materials and related services for protective use, materials and related services for institution-building programs or crisis management operations, and de-mining equipment and material.  In addition, travel bans and asset freezes were imposed on two individuals.  The sanctions are in place until July 12, 2015.             14.    Sudan Also in July 2014, the EU separated the relevant sanctions regarding the Sudanese conflict.[316]  As such, the previous legal instruments imposing sanctions targeting Sudan was repealed and replaced by two sets of instruments:  one targeting Sudan and one targeting South Sudan (see above).  The Sudan sanctions also consist of an arms embargo and the prohibition of related services and financing.  The measures also provide for the same standard exceptions as for the South Sudan sanctions.  In addition, travel bans and assets freezes were imposed on four individuals.             15.    Syria Additional exceptions to the Syria sanctions were adopted in 2013 and early 2014 in order to allow for payments for the verification mission of the Organization for the Prohibition of Chemical Weapons and the destruction of Syrian chemical weapons.[317] On the other hand, asset freezes and travel bans were imposed on 12 Cabinet ministers, in light of the continuing political deadlock in Syria following President Bashar Assad’s re-election in early June 2014.  The newly targeted individuals are considered to be responsible for serious human rights violations.[318]  In addition, on July 23, 2014, sanctions were imposed on an additional three individuals and nine entities due to their "involvement in the violent repression of the civilian population or their support to the regime."[319]  Also, one individual has been re-listed following the annulment of the original listing by the European General Court.[320]  A second individual who successfully appealed his designation has not been re-listed. The EU further strengthened its sanctions targeting Syria in October 2014, and added 16 individuals and two entities to the list of targets.  The new designations are reasoned on grounds of the individuals being linked to the violent repression of the civilian population, or on grounds of providing support to the Syrian regime.[321]             16.    Yemen On December 19, 2014, the EU implemented the UN’s sanctions regarding Yemen.  These imposed asset freezes and travel bans on the former President Ali Abdullah Saleh, as well as the military leaders Abd Al-Khlaiq Al-Huthi and Abdullah Yahya Al Hakim.[322]             17.    Zimbabwe Other than for Robert Mugabe and his wife, and the company Zimbabwe Defence Industries, on February 20, 2014 the EU suspended its sanctions against Zimbabwe.[323]  In addition, on November 1, 2014, the EU lifted its suspension of aid to Zimbabwe which had been in place since 2002.  The sanctions remaining in place consist of an arms embargo and travel ban/asset freeze.  The next review of the remaining sanctions is scheduled for February 2015.             18.    Dual Use List In addition to the country-specific changes, on December 31, 2014, the EU’s complete revision of the Dual-Use List contained in Regulation 1382/2014 came into force.  This replaces the earlier version dating from 2009 and should be consulted for any equipment or technology capable of military use.[324]             B.    United Kingdom The coming into force in February 2014 of the Crime and Courts Act 2013 saw the introduction of Deferred Prosecution Agreements (DPAs) in the UK.[325]  DPAs are now available to prosecutors as an alternative to charging a company in relation to a defined list of offences.  Whether by oversight or by design, DPAs will only be available in relation to some sanctions and export control offences.  All the offences for which DPAs are now available are listed in Part 2 to Schedule 17 of the Act.  Included is the offence of exporting prohibited or restricted goods, but there is no equivalent for importing, nor are any offences listed in relation to breaches of the EU’s financial sanctions.  The list of offences for which DPAs might be available can be amended to include any currently omitted "financial or economic crime."  We will closely monitor any changes in this area. Also in February 2014, the UK’s Foreign & Commonwealth Office launched a consultation into the potential introduction of "contract sanctions," a potentially new breed of sanctions which would to prevent courts from enforcing contracts entered into with "targeted regimes," including by persons not otherwise subject to sanctions regimes applicable in that jurisdiction.[326] On July 18, 2014, HM Treasury in the UK announced a change in policy regarding the treatment of money transfers into the UK, or to a UK-based bank anywhere in the world, from or via a designated person based outside the EU.[327]  As of July 31, 2014, HM Treasury will now hold any such transfers in a suspense account which will only be released upon the successful application for a license.  The previous policy had not required the freezing of such transfers, but HM Treasury’s Notice stated that this policy change was being adopted to bring the UK in line with the policies in other Member States.             C.    Britain’s offshore jurisdictions As ever, the implementation in the UK’s various offshore jurisdictions has been uneven, and in many cases it will be wise to conduct specific analysis of whether a particular EU provision has or has not been implemented in a particular jurisdiction.  In Bermuda, for instance, the only Russian sanctions in place are the designations of the 18 individuals originally sanctioned by the EU on March 6, 2014.[328]  The Isle of Man and Jersey, by contrast, have implemented all of the EU’s sanctions up to and including those published in December 2014.[329]  In addition, for the British Overseas Territories of Cayman, British Virgin Islands, Anguilla, and Turks & Caicos, the implementation (done by the UK itself through Orders) has been patchy with the latest Crimean sanctions not implemented and the various extensions to the lists of designated individuals and entities last implemented on April 30, 2014 with the Ukraine (Sanctions) (Overseas Territories) No. 3 Order 2014.[330]             D.    Malta In response to criticisms of so many Maltese companies being included amongst those sanctioned under the EU’s Iran sanctions, in August the Maltese government issued a legal notice increasing the penalties for doing business with sanctioned companies.  The maximum fine is now €116,468, with a prison term of between one and five years.[331] II.    Main Case Law             A.    European Union             1.    Draft General Court Rules of Procedure Concerning Secret Hearings Proposed draft Rules of Procedure for the General Court (the EU’s lower court) were sent to the EU Council (the "Council") for approval on March 14, 2014.  Following a public consultation, revised drafts were submitted on November 10, 2014 and on December 4, 2014.  During the discussion by the Council’s Working Party on Court of Justice on December 8, 2014, significant consensus was reached on the text, although the UK expressed concerns regarding Article 105.  Under this Article, EU institutions would be allowed to rely on undisclosed evidence in actions for annulment, including in sanctions cases.  However, past case law consistently held that the rights of defense 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.[332] If approved, the new Rules of Procedure would steer the General Court on a new course, allowing the General Court to take into account evidence not disclosed to the targeted person if such disclosure could harm the security of the EU or its Member States, or the conduct of their international relations.  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 defense, the draft 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.  The text of the draft Rules of Procedure is, at the time of writing, awaiting the confirmation of the Council’s Committee of Permanent Representatives before it is submitted to the Council for final approval.             2.    Cases Relating To Sanctions Regarding Belarus On June 12, 2014, the Court of Justice of the EU (CJEU), the EU’s senior court, considered a question referred by a Lithuanian court in 2013 as to whether the Lithuanian authorities had the discretion to refuse an application for an asset freeze exemption in order to cover legal expenses incurred when appealing that asset freeze.[333] The CJEU ruled that national authorities do not have an absolute discretion when deciding on a request for a release of frozen funds (in this case, for legal expenses).  The review of applicability of an asset freeze exemption must be performed in accordance with the Charter of Fundamental Rights of the EU.  In particular, account should be taken of the fact that applicants to the European courts seeking the annulment of their designation on an EU sanctions list are not able to represent themselves and therefore must retain a lawyer or agent.[334]  In that regard, Article 47 of the Charter requires that a freeze of funds may not have the effect of depriving the persons whose funds have been frozen from effective access to justice.  The CJEU also found that national authorities may not refuse the application of an asset freeze exemption in order to pay for legal expenses on the sole ground that legal aid would be otherwise available, or that the origin or the acquisition of the funds is possibly unlawful.  This may prove to be an important precedent in the context of the sanctions regimes instituted in the months following the so-called Arab Spring regarding the misappropriation of state funds, or the similar Ukrainian sanctions regarding misappropriation. On September 23, 2014, the General Court annulled the entry of Aliaksei Mikhalchanka  in the list of targets for the EU’s sanctions against Belarus.[335]  Mr. Mikhalchanka is a journalist working for the Belarusian public TV channel, who had been designated as a target for the EU’s Belarus sanctions in 2011, based on his "senior and influential position" on the State TV channel.  In 2012, the Council maintained Mikhalchanka’s listing based on him being the presenter of a specific TV program, which was considered an instrument of State propaganda, and which supports and justifies the repression of the democratic opposition and of civil society.  The General Court held that by changing the wording of the reasoning for the listing, the Council had infringed Mikhalchanka’s rights of defence.  The Council should have informed Mikhalchanka of the new evidence it intended to use against him and afforded him the opportunity to challenge this evidence in a hearing prior to the Council’s final decision.  In addition, the General Court found that the Council had made errors of assessment with regard to the grounds for the 2011 listing, and did not disclose evidence sufficient to demonstrate the influence, actual impact, or responsibility that Mikhalchanka, or the TV program he presented, could have had in violations of international electoral standards or internal repression occurring in Belarus. Separately, the General Court upheld the listing of the vice-chairman of the Central Electoral Commission Vadzim Ipatau.[336]  The General Court concluded that the Council justly considered him, due to his position, jointly responsible for violations of international standards in the presidential election of 2010.             3.    Cases Relating To Sanctions Regarding Egypt On February 27, 2014, the General Court for the first time ruled on the EU’s sanctions imposed on Egyptian nationals.[337]  The General Court rejected the applications and ruled that the European Council had the legal power to impose the restricted measures and had done so on the appropriate legal basis.  Furthermore, the General Court held that the measures did not disproportionally restrict the fundamental rights to respect of property, freedom to conduct business and the rights of defense of the targeted persons. The EU had imposed travel bans and asset freezes on individuals who, it was alleged, had been identified as being responsible for "the misappropriation of State funds."  This was done in the immediate wake of the Arab Spring.  Ahmed Ezz and his spouses were designated in March 2011 and applied to the General Court seeking the annulment of their designation.  However, the General Court rejected the applicants’ argument that a difference in the French and English language versions regarding the concept of "identified as responsible" indicated that the EU had to wait until a person was criminally convicted before being able to impose sanctions. The General Court analyzed the concept in detail and concluded that "identified as responsible" for the misappropriation of State funds covers five categories of persons, i.e., individuals (i) found guilty after judicial proceedings; (ii) found to be their accomplices by a criminal court; (iii) currently being prosecuted; (iv) currently being prosecuted as an accomplice; and (v) subject to judicial proceedings associated with individuals subject of connected criminal proceedings.  The General Court held that this also includes individuals such as the applicants who, "possibly without their knowledge, may have benefited from the proceeds of the ‘misappropriation of Egyptian State funds’ and on that basis are subject to protective measures, prescribed in a judicial context, intended to preserve the assets arising from such misappropriation."             4.    Iran On November 25, 2014, the General Court for the first time awarded damages to an applicant seeking the annulment of its designation as a target for EU sanctions.[338]  Safa Nicu Sepahan was designated in 2011 based on being a communications firm that supplied equipment for the Fordow (Qom) facility which was built without being declared to the IAEA.  The General Court agreed with Safa that the Council’s reasons were factually incorrect, considering (i) it was not a communications firm; and (ii) it did not supply equipment to the facility in question.  The General Court concluded that the Council did not have sufficient evidence to have designated the company.  Unlike previous cases, in which the General Court refused to grant a claim for damages under Article 340 of the Treaty on the Functioning of the EU due to the Council’s breach of EU law being insufficiently serious to warrant an award of damages or due to insufficient evidence that the applicant had suffered losses because of its inclusion on the sanctions list in question, the General Court granted Safa’s damages claim in part.  The General Court agreed with the applicant’s arguments that, due to the Council’s error, it had suffered damage to its reputation, which affected the behavior of third parties (mainly non-EU persons) towards it.  This damage was not compensated by the mere annulment of the listing.  The Council’s error in failing to confirm the facts and gather sufficient evidence to reason a listing was found to be sufficiently serious.  It should be noted that the awarded damages are rather limited.  While the applicant claimed EUR 7.66 million (approx. USD 10.17 million), including EUR 2 million (approx. USD 2.65 million) as compensation for the damage to its reputation, the General Court awarded EUR 50,000 (approx. USD 60,000).  In line with its previous approach, the General Court rejected in its entirety the applicant’s claim for material damages (suffered in the form of closed bank accounts, suspension of payments, and the termination of commercial relations by European suppliers) due to insufficient evidence.  Nonetheless, if more applicants succeed in obtaining damages and as the evidential criteria for damages become identified and refined, Safa Nicu Sepahan v. Council may come to be seen as a watershed case. Several banking entities and/or bankers have been successful in seeking the annulment of their designations.  In particular, the General Court annulled the designations of two bankers employed by Melli Bank Plc (the UK subsidiary of Bank Melli Iran) on June 4, 2014.[339]  While the bank itself was unsuccessful in its own action, the General Court found that the EU Council may only designate the employees if it was proven that they provided support for, or were acting on behalf of or at the direction of an entity involved in, nuclear proliferation.  Accordingly, the Council did not sufficiently establish that the two individuals served as a link between Melli Bank (their employer) and Bank Melli Iran.  The General Court found that the possibility that Bank Melli Iran could exert pressure on the entity it owns was insufficient to establish that the targeted individual would succumb to such pressure and act at Bank Melli Iran’s direction, or provide support for nuclear proliferation at its instigation.  The General Court considered this especially unlikely in light of the target’s exemplary conduct in the past.  Moreover, the restrictive measures concerned the target’s personal funds, not the funds of Melli Bank, which would render immaterial the question whether there was a risk that the target would misuse Melli Bank’s funds at the direction of Bank Melli Iran in contravention of existing sanctions. Also on June 4, 2014, the General Court annulled the re-listing of Sina Bank.[340]  While the original designation of Sina Bank was annulled in 2012 for a lack of sufficient reasoning, the Council maintained the listing following a full review of the Iranian sanctions lists.  Sina Bank brought new actions before the General Court claiming the Council had breached its rights of defence, as the Council had not informed it of the reasons for its continued designation, nor the evidence on which this decision was based.  The General Court agreed with the bank and held that it should have been provided with any evidence that was not included in the original, unlawful listing, and should have been given the opportunity to discuss this evidence in a hearing prior to the Council’s final decision. Considering that the listing of Sina Bank was annulled, the designation of Abdolnaser Hemmati, based on his position in Sina Bank, was automatically annulled.[341]  On November 7, 2014, the EU re-listed Sina Bank (and several other Banks) as a target for the EU’s sanctions against Iran, based on new reasoning.[342]  In addition, on July 10, 2014, the General Court annulled the designation of Moallem Insurance.[343]  Moallem Insurance had been targeted in 2012 on grounds of being the "main insurer of IRISL."  The General Court agreed with Moallem’s argument that this reasoning was factually incorrect, considering its ownership structure and composition are not those of a company which is capable of being IRISL’s main insurer.  Moallem also argued that the Council had produced no evidence in support of its allegations.  The evidence submitted to the General Court was either disclosed only after the application was brought or did not contain sufficient evidence to support the Council’s allegations. The General Court rejected the application of National Iranian Oil (NIOC) on July 16, 2014.[344]  NIOC had been designated in 2012 as a State-owned entity "which provides financial resources to the Iranian government, whose Chairman is a minister and CEO a deputy minister."  The General Court rejected NIOC’s arguments with regard to lack of legal basis, insufficient reasoning, the legality of the designation criteria, the violation of the principles of proportionality, the breach of rights of property, defense and effective judicial protection, and manifest errors of assessment. On September 18, 2014, the General Court annulled the designation of the Central Bank of Iran (CBI).[345]  The Bank had been listed in 2012 due to its "involvement in activities to circumvent sanctions."  However, the General Court found that merely repeating one of the listing criteria without further supporting evidence was not sufficient, as no indication was given as to why this criterion applied to CBI.  In particular, "the Council does not refer to any identifiable transaction, or to any particular assistance," thereby denying CBI the full enjoyment of its rights of defense. It should also be noted that while the North Drilling Company successfully sought the annulment of its designation in 2013,[346] the EU relisted the company in April 2014 based on new reasons.  The EU considers the company to provide financial support to Iran through being indirectly owned by the Mostazafan Foundation, a major Iranian para-statal entity controlled by the Government of Iran and through providing imported key equipment for the oil and gas industry, including prohibited goods.[347]  Re-listing of this kind, after the individuals and/or companies targeted had successfully brought actions before the General Court seeking to annul their designation, has occurred before.[348]             5.    Libya On September 24, 2014, the General Court annulled the designation of Al Kadhaf Dam as a target for the EU’s sanctions imposed against Libya.[349]  The applicant was designated in 2011 on grounds of being a cousin of Colonel Gaddafi, participating in the planning of operations against Libyan rebels, and organizing an army unit.  The applicant was re-listed in April 2013 on the basis of the same reasoning.  However, the General Court concluded that the Council’s relisting of the applicant occurred after the Libyan civil war and the overthrow of the Gaddafi regime.  In addition, the applicant had at the time already resigned.  As such, the General Court found that the Council failed to provide sufficient reasons for the 2013 designation.             6.    Syria On June 11, 2014, the General Court annulled a listing on the EU’s Syria sanctions list for the first time.[350]  While the General Court has ruled on Syrian sanctions listings before, this was the first time it has annulled a Syrian designation.  The General Court concluded that the listing of Syria International Islamic Bank (SIIB), based on providing financial support to the Syrian regime and assistance to two banks in their efforts to circumvent existing sanctions, was not based on sufficient evidence of actual assistance with such transactions.  Importantly, the General Court did not consider the fact that SIIB had been sanctioned by OFAC as being at all relevant for the purposes of maintaining an EU designation. While the General Court annulled the designation, it rejected SIIB’s application for approx. EUR 10 million (approx. USD 13.28 million) in damages.  The General Court found that SIIB had not proved the EU sanctions had caused it to suffer loss and damage. In addition, the General Court annulled the designations of three individuals, which had been listed in 2011 on grounds of being associates of Maher Al Assad and/or providing financial support to the Syrian regime or even being directly involved in the violent repression of the Syrian civilian population.[351]  The General Court applied the principles set out in the CJEU’s Kadi judgments, and found that it was for the Council to provide sufficient evidence supporting its reasons for the listings where the claimant challenges these reasons.  The burden of proof in such a scenario is on the Council, not on the applicant; the applicants’ rights of defense and right to a fair trial under Article 47 of the EU Charter of Fundamental Rights were infringed. On the other hand, the General Court rejected the application for annulment by the governor of the Syrian Central Bank (SCB), Adib Mayaleh.[352]  Mr. Mayaleh was designated in 2012 on grounds of providing financial support to the Syrian governments in his capacity as governor of the SCB.  The General Court found that the Council had sufficiently reasoned the listing and did not breach the applicant’s rights of defense.  The General Court emphasized that the applicant’s role as the governor of the SCB was sufficient to justify his designation since the SCB makes financial resources available to the Syrian regime.             7.    Terrorist Organizations On March 21, 2014, the General Court ruled that the European Commission had failed to fulfill its obligations by not remedying procedural deficiencies and substantive irregularities affecting the asset freeze imposed on Hani El Sayyed Elsebai Yusef, which resulted in a breach of his rights of defense.[353] Following his designation by the UN Sanctions Committee in 2005 on grounds of being associated with Al Qaida, Mr. Yusef was also listed by the EU on its Al Qaida sanctions list.[354]  His first action for annulment was dismissed as inadmissible in 2006.[355]  Mr. Yusef had brought separate actions in the UK against the national measures freezing his funds.  Following the CJEU’s ruling in "Kadi I" in 2008,[356] the UK Supreme Court, in 2010, held that the measures in question had been adopted ultra vires.[357]  Subsequently, Mr. Yusef requested the Commission remove his listing, as he had been designated without independent or impartial assessment by the Commission, and had not been given any reasons, while the UK had concluded that the listing criteria were not satisfied in his case.  When the Commission did not reply to his letter, Mr. Yusef brought new actions at the General Court, seeking the annulment of his listing on the grounds that the Commission had persistently failed to observe the principles stated by the CJEU Kadi I and Kadi II.[358] The General Court agreed with Mr Yusef and recalled that the rights of defense in particular the right to be heard and the right to an effective judicial remedy require that EU institutions: (i) provide the target with the evidence used against and the opportunity to make known his point of view before taking a final decision; (ii) disclose to the target the summary of reasons provided by the UN Sanctions Committee, which served as the basis for (maintaining) that person’s listing, and examine them impartially, in light of the target’s comments and any exculpatory evidence provided; and (iii) state their reasons, identifying the individual, specific, and concrete reasons why they consider that the target must be subject to restrictive measures. The General Court concluded that Mr. Yusef was unable to rely on any of the principles or guarantees, even after the Kadi I judgment.  The Commission had designated Mr. Yusef on the sole basis of a UN Sanctions Committee press release which did not include any statement of reasons, and only received the latter’s reasons several years later.  The Court held that the Commission "was clearly under an obligation to act with regard to the applicant, in order to remedy those procedural and substantive irregularities, if not immediately after the Court had delivered its judgment in Kadi I, or in response to the applicant’s letter […]".  The General Court found this obligation to act was strengthened by the fact that Mr. Yusef had referred, in his letters to the Commission, to new and significant evidence which the Commission "was at least obliged to examine, in order to assess whether it amounted to a change of circumstances such as to warrant the revocation [of the listing]." In addition, on October 16, 2014, the General Court annulled the 2006 listing of the Liberation Tigers of Tamil Eelam (LTTE) on procedural grounds, while rejecting the LTTE’s arguments regarding substance.[359]  The General Court confirmed that, in contrast to the applicant’s arguments, EU law on the prevention of terrorism does apply in situations of "armed conflicts" in the meaning of international law.  Also, the General Court found that the Council’s reliance on decisions of a third country (in this case the Indian authorities) for its designation was not contrary to the Council’s Common Position of 27 December 2001 on the application of specific measures to combat terrorism, in-so-far as the Council carefully verifies beforehand that that country’s legislation ensures sufficient protection of the rights of defense.  However, considering that the Council did not carry out such an assessment, the contested measures were found to be based "not on acts examined and confirmed in decisions of competent authorities, as required by Common Position 2001/931 and case-law, but on factual imputations derived from the press and the internet."  The General Court annulled the designation. The General Court stressed that its assessment of and conclusion regarding the procedural requirements does not imply any substantive assessment of the question of the classification of the LTTE as a terrorist group.             B.    United Kingdom In February 2014, it was reported in the press that Bank Mellat, Iran’s largest private bank is suing the British government for almost £2 billion (approx. USD 3.13 billion) in damages following the Supreme Court’s quashing of sanctions imposed on the bank in connection with allegations that it had links to the Iranian nuclear program.[360] Bank Mellat also continues with its ongoing efforts to have restrictions imposed on it under now-defunct UK legislation set aside.  In November 2014, in Bank Mellat v HM Treasury [2014] EWHC 3631 (Admin), the UK High Court held that the essence of allegations justifying designation of a person in a sanctions regime must be disclosed to that person, even where national security concerns prevent full disclosure.  In June 2013, the UK’s Supreme Court held the relevant legislation was unlawful.  The question in this case focused on the level of disclosure required to enable the Bank to challenge the reasons given for its designation.  HM Government argued that the principles under the fair trial case law of the European Court of Human Rights, to the effect that sufficient disclosed must be made to enable the a person to defend itself, do not apply to asset-freezing cases.  The Court rejected that argument due in part to the highly damaging nature of the orders on the claimant bank’s ability to function. In July 2014, in the case of R (on the application of Sarkandi & Ors) v Secretary of State for Foreign & Commonwealth Affairs [2014] EWHC 2359 (Admin)[361], the English High court granted an application by HM Government for a closed hearing in an administrative challenge against a sanctions listing.  The claimants had been designated under the EU’s sanctions regime at the instigation of the UK Foreign & Commonwealth Office.  The entities had successfully challenged their designations in the EU General Court, and subsequently sought to challenge the Secretary of State for the Foreign Office’s decision to propose designation, seeking damages.  The Government sought an order under Section 6 of the Justice & Security Act 2013 that the case be heard in a "closed material procedure" which allows for the Government to rely on sensitive material that is not shown to the claimants.  In granting the application, Bean J rejected the argument that the sensitive material was irrelevant because it could not be relied on to justify the listing proposal. On December 9, 2014, a UK court rejected an attempt by Russian Oil company Rosneft to prevent laws in the UK[362] criminalizing breaches of EU sanctions against Russia from coming into force, on the basis that the offences in question infringed the requirements of legal certainty under Article 7 of the European Convention on Human Rights and legal clarity under the common law.[363]  Rosneft had complained of the use of allegedly vague terms in the underlying the EU Regulation such as "deep water" and "arctic."  In the Divisional Court, Beatson LJ and Simon J held that Rosneft had not shown that the relevant provisions were invalid, since the laws would have clear application in some cases, and there was no risk to Rosneft of serious irreparable harm.  It may not be entirely coincidental that, as discussed above, the EU clarified some of these very terms by way of amendments to the respective regulations just a few days before the judgment was handed down. In May 2014, the Administrative Court in London handed down its decision in R (on the application of Privacy International) v The Commissioner for HM Revenue & Customs [2014] EWHC 1475 (Admin).[364]  Privacy International is an NGO campaigning against governmental surveillance activities.  It had been a complainant to HMRC regarding exports by the company Gamma International Limited of surveillance equipment to Bahrain and Ethiopia allegedly in breach of the UK’s Export Control Order.  After a period of inaction, Privacy International sought the disclosure of information from HMRC regarding the status of its investigation.  HMRC refused to provide any such information, or to disclose (one way or another) whether it was going to charge Gamma International.  Privacy International sought judicial review (the UK’s primary device for challenging an administrative decision in court) of the decision to refuse to disclose information, and invited the court to order HMRC to issue guidance on when it will, or will not, publish decisions not to prosecute.  Although the court declined to order the issuance of such guidance, Privacy International’s challenge against the decision not to disclose information was successful.  It remains to be seen what the ultimate outcome of Privacy International’s efforts will be. III.    Enforcement             A.    Austria In July a court in Vienna seized €5m worth of real estate owned by Oleksii Azarov, who had been designated under the Ukrainian misappropriation sanctions.  This followed an investigation by the Austrian Bundesamt für Verfassungsschutz und Terrorismusbekämpfung (Federal Agency for State Protection and Counterterrorism).[365]  The case is of particular interest because the land in question was not legally owned by Mr. Azarov.  Rather the land was held through a Liechtenstein entity called LADA Holding Anstalt, in which Mr. Azarov had a beneficial interest.  In determining that the land in question was an asset of Mr. Azarov’s for the purposes of the EU sanctions, the Austrian court not only pierced the corporate structure but also looked to beneficial rather than legal ownership.  Following a similar decision by the Cypriot Supreme Court in 2013 (reported in our 2013 Year-End Sanctions Update), it is a further illustration of the broad interpretation adopted by European courts to the question of what constitutes a person’s "assets" when construing the EU’s asset freezes. In mid-December, it was reported that EU authorities were investigating Raiffeisen Bank International regarding a possible breach of the EU’s Russian capital markets sanctions.  Raiffeisen’s Moscow subsidiary (ZAO Raiffeisenbank) had advised Vneshneconombank regarding a 10 billion ruble bond sale.  It was reported that the investigation was focused on whether the Austrian parent bank and/or its staff were involved in the transaction in any way, or whether the ZAO Raiffesisenbank had entered into the transaction entirely independently of its parent.[366]             B.    Germany On February 18, 2014, German federal prosecutors arrested a 62-year old German-Iranian individual on allegations of exporting to Iran goods that could be used in a weapons program.  It was reported that the products included vacuum pumps, valves, and other such industrial products that could be used for civil or military purposes.  The allegations concern the illegal export of goods of German or other EU Member State origin, to Iran between 2011 and 2013.  Such exports violate the EU sanctions in force, which include an arms embargo and an embargo on equipment which could be used for internal repression.  The illegal export was reported to have generated approximately EUR 230,000 of profits.  According to German prosecutors, the goods were exported to an Iranian organization responsible for a military residual propellant weapons program and which has been subject to the embargo since 2007 and thus "[i]t is […] forbidden to make economic resources – and goods of any kind – available to this company".[367] In June 2014, a trial commenced in Frankfurt of two individuals charged with exporting over sixty engines capable of being used in military drones to Iran.  The exports were alleged to have occurred between 2008 and 2009 in breach of the EU’s sanctions.[368]  One of the individuals did not attend court for the commencement of the trial and will be tried separately.  The trial of the second individual is ongoing with hearings next scheduled for mid to late January 2015.[369]             C.    Italy In a move reminiscent of the Austrian seizure of property discussed above, on September 23, 2014, press reported that the Italian Guardia di Finanza had seized several properties valued at approximately €30m belonging to Arkady Rotenberg, a close friend of Russian President Putin who was designated under sanctions by the EU in July 2014.  A villa in Sardinia was owned directly by Mr. Rotenberg but other properties, including a hotel in Rome, were held through the Italian company Aurora 31, itself owned by two Cypriot companies, Olpon Investment Limited, and Logotax Developments Limited.[370]  This is a further example of the broad approach to ownership being taken by the European authorities.             D.    Spain In February 2014, ONA Electroerosíon S.A. settled with Spanish prosecutors regarding charges of exporting seven shipments of turbine equipment valued at €1.2m to Iran in breach of sanctions.  The shipments went via a front company in Turkey.  ONA Electroerosíon had first been raided in 2012, and had first come to the attention of the authorities in 2009 when it applied for, and had been refused, a license to export the same equipment directly to Iran.  The settlement included payment of an undisclosed fine.[371]  Under Spanish law the fines can be up to six times the value of the exported equipment.[372] On April 7, 2014, Spanish police arrested three Spanish individuals and one Iranian individual on suspicion of operating a network trying to export metal-molding machinery (of UK origin) to Iran.  Such exports violate EU sanctions imposed against Iran (see above).  Police officers stated that while the machinery in question could be used for civilian purposes, it could also be used for the production of parts of missiles or gas centrifuges used to enrich uranium.  The sanctions in force restrict the export of such dual-use technology.[373]             E.    Switzerland On July 1, 2014, the Swiss Financial Market Supervisor (FINMA) sanctioned BNP Paribas’s Swiss branch, BNP Paribas (Suisse) SA, and banned it for two years from engaging with any person designated by the EU or the United States as a target for sanctions.  The measures were taken based on evidence that BNP Paribas (Suisse) SA had assisted in the breach of U.S. sanctions imposed on Sudan by "seriously violat[ing] its duty to identify, limit and monitor the risks involved in making transactions with business partners in countries under U.S. sanctions."[374]  FINMA’s investigation is not linked to the U.S. SEC’s investigation and resulting fine of USD 8.9 billion for BNP’s violation of U.S. sanctions on Cuba, Iran, Myanmar, and Sudan. A FINMA spokesman confirmed to the press that Swiss authorities do not usually enforce foreign governments’ legislation and would generally not step in to oblige companies to adhere to embargoes and sanctions imposed by anyone besides Bern. BNP Suisse had handled transactions of Sudanese customers, and used third-party banks to mask their activities.  BNP Suisse also provided significant credits destined for Sudanese oil trading, in breach of existing sanctions imposed by (among others) the U.S. against Sudan.[375] While FINMA stressed that Swiss law demands that banks at all times "assure proper business conduct and risk management," and BNP Suisse had clearly failed in that respect as it had "exposed itself to unduly high legal and reputational risks and violated requirements for adequate organisation under Swiss supervisory law." With regard to Ukraine and Russia, while Switzerland has not adopted sanctions itself, it ensures that individuals and entities targeted by EU and U.S. sanctions do not bypass those sanctions by using financial structures in Switzerland.  To this end, Switzerland put in place a "black list."[376]  The Swiss black list bans listed individuals and entities from transferring assets into Switzerland or engaging in new business relationships with Swiss financial institutions.  Financial institutions which had existing relationship with a targeted individual or entity must report any transactions involving those targets. The measures were extended in November 2014 and provide that the Swiss State Secretariat for Economic Affairs (SECO):  (i) may refuse export permits for certain military and dual-use goods; (ii) must be notified of the provision of financial or technical services related to military or dual use goods to listed entities, or the provision of certain services related to the oil industry; and (iii) must authorize, trade in new financial instruments, as well as the granting of loans with a maturity exceeding 30 days.[377]             F.    United Kingdom In March 2014, the company Delta Pacific Valves Limited (previously called Delta Pacific Manufacturing Limited), and one of its director Gary Summerskill, were each convicted of sanctions breaches in the Central London Criminal Court following an investigation by HM Revenue and Customs (HMRC).  In an effort to evade detection the deliveries had been routed through Hong Kong and Azerbaijan.  Mr. Summerskill was jailed for 30 months, with a conditional sentence of an additional 15 months if he fails to satisfy a Confiscation Order of £68,000 within 6 months.  Mr. Summerskill had pleaded guilty at his trial, meaning his sentence is likely to have reflected some level of discount.  The company, which had exported to Iran some £3.4 million worth of alloy valves capable of being used in weapons manufacture, was fined £225,000 and was also the subject of a Confiscation Order requiring it to repay its entire profits from the deliveries of £1,072,000.[378] In April 2014, the Criminal Division of the Court of Appeal upheld a seven year custodial sentence and seven year director disqualification order in Gary Hyde v R [2014] EWCA Crim 713.[379]  Gary Hyde had been convicted in 2012 in relation to the shipment of weapons from China to Nigeria in breach of export control bans.  The Court of Appeal concluded (at paragraph 28) that: "the overall sentence was undoubtedly severe but a deterrent sentence was inevitable and we are not prepared to conclude that the custodial term imposed is either wrong in principle or manifestly excessive."  Mr. Hyde had not appealed against a Confiscation Order for £782,142, representing his whole profit from the transactions. In April 2014, the Serious Fraud Office announced that it was opening a money laundering investigation "arising from suspicions of corruption in Ukraine,"[380] and added that it had obtained a Restraint Order over approximately £23m in assets in the UK.  This investigation is likely to have arisen from financial institutions reporting assets held by those individuals listed under the Ukrainian Misappropriation sanctions. In May 2014, it was reported that the UK’s National Crime Agency and HMRC were investigating Reed Business Information Limited in relation to allegations that a number of designated Iranian banks continued to be sold access to business information products and databases after they had been so designated.[381]  No further information has been published, and the current status of the investigation is uncertain. In November 2014, the UK’s Financial Conduct Authority (FCA) published a Thematic Review on How small banks manage money laundering and sanctions risk.  This was a follow on from its 2011 review of the handling of AML risk by small banks, now expanded to cover sanctions.[382]  As part of the review the FCA visited 21 small banks operating in the UK.  The FCA concluded that particularly serious failures were identified at six of these banks, with the FCA commencing enforcement investigations in relation to two of the banks.  It is unclear from the Thematic Review whether these investigations relate to AML or sanctions failures, or both.  The FCA drew attention to some notable failings as regards sanctions and sanctions screening including: the failure to keep abreast of changes to sanctions designations; the use of manual screening as opposed to "fuzzy" searches; discrepancies between the screening done when taking on new customers and those carried out on existing customers; the failure to screen all payment types against sanctions lists; and inadequate knowledge and expertise regarding sanctions and the identification of sanctions risks.  The FCA included three examples of good practice: the use of either "four eye" checks on any sanctions alerts, or the periodic conduct of quality assurance on concluded sanctions alerts; the periodic use of fuzzy searching of existing customers against relevant sanctions lists; and those handling sanctions alerts having access to a bank’s customer due diligence files. LOOKING FORWARD             A.    Prospects for a Comprehensive Iran Nuclear Deal On November 24, 2014, the P5+1 extended the nuclear negotiations with Iran under the Joint Plan of Action for another seven months.[383]  The negotiations aim to reach a deal to limit Iran’s nuclear activities and suspend certain nuclear-related U.S, EU, and UN sanctions on the country.  This was the second time the parties have extended the negotiating period, and both sides are continuing to work towards a comprehensive agreement that would further limit Iran’s nuclear activities and significantly unwind U.S., EU, and UN sanctions.  The seven month extension has been divided in two periods; the parties face a March 1, 2015 deadline for reaching a political agreement, and a June 30, 2015 deadline for reaching a final agreement, including all of the details regarding implementation.[384]  While the interim agreement permits some previously prohibited transactions, the vast majority of sanctions on Iran remain in place. In exchange for a number of Iranian steps to curtail its uranium enrichment activities, limit its development of the Arak reactor, and allow for international inspections, the United States and the European Union have taken a number of sanctions-relaxing measures, including pausing efforts to further reduce Iran’s crude oil sales; enable the repatriation of an agreed amount of oil revenue held abroad; suspend sanctions on Iran’s petrochemical exports; suspend sanctions on gold and precious metals, as well as on Iran’s auto industry; and establish a financial channel to facilitate humanitarian trade for Iran’s domestic needs using Iranian oil revenues held abroad.  Under the second extension, Iran will continue to receive approximately $700 million monthly held in previously blocked foreign accounts.[385]  The United States and European Union also agreed to refrain from imposing new nuclear-related United Nations Security Council, European Union, and United States sanctions. While senior Administration officials remain bullish on the prospects of striking a deal with Iran, the recently elected Congress has expressed misgivings about any prospective deal that does not sufficiently limit Iran’s ability to produce nuclear weapons.[386]  Republican and Democratic Congressmen are threatening to pass additional legislation that would sanction Iran, actions which could potentially scuttle the negotiations or any nascent deal; the new Congress may further complicate striking a deal with Iran.  OFAC has repeatedly shown a willingness to aggressively enforce sanctions regulations still in place, and its aggressive posture has added to tensions in the negotiations that further draw into question the likelihood of reaching an agreement. While there has been significant interest in re-entering the market if sanctions on Iran are partially lifted, we recommend proceeding with caution, both now and in the event that a deal is reached.  Businesses should pay careful attention to what is and is not permitted under U.S. law; the interim agreement does not ease the majority of sanctions on Iran and companies eager to engage with the country may be surprised to learn that OFAC is aggressively enforcing the vast sanctions regime covering that country. If an agreement is reached, it will likely only lift some nuclear-related sanctions; a number of other sanctions regulations will remain in place.  Our clients and friends should likewise exercise caution in re-entering Iranian markets, as such new business could easily result in inadvertently conducting prohibited transactions.             B.    Prospects of Future Sanctions on Russia The United States and the European Union continue to exert economic pressure on Russia following its annexation of Crimea and continued support of separatists in eastern Ukraine.  The new sanctions levied against Russia–which target its financial and energy industries–are sophisticated and designed to narrowly impact key Russian economic sectors and persons.  However, the impact of these sanctions has been much more widely felt throughout the country; the ruble has dropped almost 50% in value since the beginning of 2014, and capital continues to flow out of the country.  Despite this economic pain, thus far Russian President Vladimir Putin has continued supporting separatist forces in eastern Ukraine and continues to control Crimea. Looking ahead, the United States is likely to impose additional sanctions on Russia.  In mid-December, 2014, President Obama signed the Ukraine Freedom Support Act into law, which provides the President with the authority to, inter alia, penalize foreign companies for conducting certain transactions in Russia’s energy sector.[387]  These CISADA-like sanctions provide the President with the power to target foreign companies across the world, and represent a significant expansion of the reach of the Russia sanctions program.  Our clients and friends should be aware that, even if they do not conduct business in the United States, they may be subject to OFAC penalties. Moving forward, companies should be cautious about conducting activities in Russia for at least two reasons.  First, as has become evident, OFAC is still determining the precise contours of the Russia sanctions.  For example, OFAC is still defining key terms as questions arise about them.  Transactions which may appear to be currently acceptable under the regulations could become prohibited based on OFAC’s subsequent interpretations.  The timing of such a determination would be unlikely to insulate a company from liability if it engaged in those transactions prior to OFAC’s interpretation.  Second, while U.S. and EU regulators have not pursued enforcement actions for sanctions violations yet, we expect that they will aggressively do so in the near term.  Any companies found to be in violation of the regulations will likely face stiff penalties and reputational damage.             C.    Prospects for Further Normalization of Relations with Cuba The announced changes in U.S. policy towards Cuba were greeted positively in many quarters, with expressions of hope for more contact with Cuba as well as a repositioning of the U.S. status in Latin America, where the U.S. embargo on Cuba has been a sore point.[388]  However, approval was far from universal, particularly with Members of Congress who would have to take legislative action to end the embargo.  Comments in response to the policy announcement[389] suggest significant conflict within the 114th Congress, with important voices expressing hostility towards the Obama Administration’s efforts.  Further, in addition to refusing to take legislative action needed to lift the embargo, Congress has the ability to prevent appropriations needed to fund an embassy in Cuba or confirm an ambassador.  This time of divided government, with the start of the new Congress and an Administration in its final two years, holds the promise of energetic exchanges regarding the future of the U.S. relationship with Cuba.    [1]   Exec. Order No. 13,660, 79 Fed. Reg. 13,493 (Mar. 10, 2014).    [2]   Id.    [3]   Id. at 13,494.    [4]   Exec. Order No. 13,661, 79 Fed. Reg. 15,535 (Mar. 19, 2014).    [5]   Id.    [6]   Id.    [7]   Id.    [8]   Id.    [9]   Id. at 15,536.   [10]   Id.   [11]   Exec. Order No. 13,662, 79 Fed. Reg. 16,167 (Mar. 24, 2014). For a more in-depth discussion of this Executive Order, see Client Alert, Gibson, Dunn & Crutcher LLP, President Obama Signs Third Executive Order Blocking Property of Additional Persons Contributing to the Situation in Ukraine and Targeting Certain Russian Economic Sectors (Mar. 25, 2014), http://www.gibsondunn.com/wp-content/uploads/documents/publications/President-Obama-Signs-Third-Executive-Order-Blocking-Property-of-Additional-Persons-Contributing-to-Situation-in-Ukraine.pdf.   [12]   Exec. Order No. 13,662, 79 Fed. Reg. 16,167, 16,169 (Mar. 24, 2014).   [13]   Office of Foreign Assets Control, Ukraine-related Sanctions; Publication of Executive Order 13662, Sectoral Sanctions Identifications List (July 16, 2014), available at http://www.treasury.gov/resource-center/sanctions/ofac-enforcement/pages/20140716.aspx; Office of Foreign Assets Control, Directives 1 and 2 Pursuant to EO 13662 (July 16, 2014), http://www.treasury.gov/resource-center/sanctions/Programs/Documents/eo_13662_directives.pdf.   [14]   Office of Foreign Assets Control, Sectoral Sanctions Identifications List (July 16, 2014), available at http://www.treasury.gov/ofac/downloads/ssi/ssi.pdf (hereinafter "SSI List).   [15]   Office of Foreign Assets Control, Announcement of Additional Treasury Sanctions on Russian Financial Defense Technology Entity (July 29, 2014), available at http://www.treasury.gov/press-center/press-releases/Pages/jl2590.aspx.   [16]   Office of Foreign Assets Control, Frequently Asked Questions and Answers, Question 371, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answers2.aspx#371 (last updated Sept. 12, 2014) (hereinafter "OFAC FAQ").   [17]   Id.   [18]   OFAC FAQ, Question 373, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answers2.aspx#373 (last updated Sept. 12, 2014).   [19]   Id., Question 371, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answers2.aspx#371 (last updated Sept. 12, 2014).   [20]   Id., Question 370, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answers2.aspx#370 (last updated Sept. 12, 2014).   [21]   Office of Foreign Assets Control, Announcement of Expanded Treasury Sanctions within the Russian Financial Services, Energy and Defense or Related Materiel Sectors (Sept. 12, 2014), available at http://www.treasury.gov/press-center/press-releases/Pages/jl2629.aspx.   [22]   Note that sanctions were previously imposed against the CEO of Rostec, Sergey Chemezov, on April 28, 2014.   [23]   SSI List at 9-10.   [24]   Id.   [25]   Office of Foreign Assets Control, General License No. 2: Authorizing Certain Activities Prohibited by Directive 4 under Executive Order 13662 Necessary to Wind Down Operations (Sept. 12, 2014), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/ukraine_gl2.pdf.   [26]   Id.   [27]   Id.   [28]   Id.   [29]   SSI List at 1.   [30]   OFAC FAQ, Question 416, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answers2.aspx#416 (last updated Sept. 12, 2014).   [31]   With this latest round of sanctions, U.S. persons are prohibited from purchasing or otherwise dealing in any new debt from a total of six large Russian banks: Sberbank, VTB Bank, Gazprombank, VEB, Russian Agricultural Bank and Bank of Moscow.   [32]   OFAC Revised Guidance on Entities Owned by Persons Whose Property and Interests in Property are Blocked (Aug. 13, 2014), available at http://www.treasury.gov/resource-center/sanctions/Documents/licensing_guidance.pdf.   [33]   OFAC FAQ, Question 373, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answers2.aspx#373,  (last updated Sept. 12, 2014).   [34]   Id., Question 418, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answers2.aspx#418 (last updated Nov. 18, 2014).   [35]   Id., Question 420, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answers2.aspx#420 (last updated Dec. 11, 2014).   [36]   Id., Question 421, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answers2.aspx#421 (last updated Dec. 11, 2014).   [37]   Office of Foreign Assets Control, General License No. 1A: Authorizing Certain Transactions Related to Derivatives Prohibited by Directives 1, 2, and 3 under Executive Order 13662 (Sept. 12, 2014), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/ukraine_gl1a.pdf.   [38]   Office of Foreign Assets Control, General License No. 3: Authorizing Transactions Involving Certain Entities Otherwise Prohibited by Directive 1 under Executive Order 13662 (Oct. 6, 2014), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/ukraine_gl3.pdf.   [39]   Exec. Order No. 13,865, 79 Fed. Reg. 77,357 (Dec. 24, 2014).   [40]   Office of Foreign Assets Control, General License No. 4: Authorizing the Exportation or Reexportation of Agricultural Commodities, Medicine, Medical Supplies, and Replacement Parts (Dec. 19, 2014), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/ukraine_gl4.pdf.   [41]   Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014, Pub. L. No. 113-95, 128 Stat. 1088, 1093-97, codified at 22 U.S.C. §§ 8907-09 (Pub. L. No. 113-95).   [42]   Id. § 8.   [43]   Id. § 8(a).   [44]   Id. ("The President shall impose the sanctions . . . . (emphasis added)).   [45]   Id. § 8(b)(1)(A); id. § 8(b)(2) (citing 50 U.S.C. § 1705 (2012)).   [46]   Pub. L. No. 113-95 § 8(b)(3); id. § 9(b)(3). Both sections define a "good" under the Export Administration Act of 1979 as "any article, natural or manmade substance, material, supply or manufactured product, including inspection and test equipment, and excluding technical data." 50 U.S.C. App. § 2415(3) (2012).   [47]   Pub. L. No. 113-95 § 8(b)(1)(B).   [48]   Id. § 9.   [49]   Id. § 9(a).   [50]   Id.   [51]   Id. § 9(b)(1)(A); id. § 9(b)(2) (citing 50 U.S.C. § 1705 (2012)).   [52]   Pub. L. No. 113-95 § 8(b)(3); id. § 9(b)(3). Both sections define a "good" under the Export Administration Act of 1979 as "any article, natural or manmade substance, material, supply or manufactured product, including inspection and test equipment, and excluding technical data." 50 U.S.C. App. § 2415(3) (2012).   [53]   Pub. L. No. 113-95 § 9(b)(1)(B).   [54]   Id. § 8(c); id. § 9(c).   [55]   Id. § 10(a).   [56]   Id. § 10(b).   [57]   S. 2124, the Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014, 113th Cong. (2014), originally introduced by Senator Robert Menéndez (D-NJ) would have imposed nearly identical sanctions as the final form of its House counterpart. However, the Menéndez bill also included provisions that would have altered the United States’ obligation to the IMF. When Speaker Boehner refused to bring it to a vote in the House because of the IMF provisions, the Senate voted as a compromise to pass H.R. 4152, adding amendments that incorporated the Menéndez sanctions. See Ramsey Cox, Reid Sets Up Ukraine Vote for Thursday, The Hill, Mar. 25, 2014, available at http://thehill.com/blogs/floor-action/senate/201730-reid-sets-up-ukraine-vote-for-thursday. Thus, the Menéndez bill sanctions were largely signed into law in H.R. 4152, even though a motion to proceed to consideration of the Menéndez bill was withdrawn in the Senate.   [58]   Presidential Statement on Signing the Ukraine Freedom Support Act, 2014 Daily Comp. Pres. Doc. 1 (Dec. 18,  2014), available at http://www.gpo.gov/fdsys/pkg/DCPD-201400941/pdf/DCPD-201400941.pdf.   [59]   Ukraine Freedom Support Act of 2014, Pub. L. No. 113-272, 128 Stat. 2952 (2014).   [60]   Ukraine Freedom Support Act at § 4(a)(2)(A). Note that the specified countries are Ukraine, Georgia, Moldova, or any other country designated by the President as a country of significant concern, such as Poland, Lithuania, Latvia, Estonia, and the Central Asia republics. See id. at § 4(a)(3).   [61]   Id. at § 4(a)(2)(B).   [62]   Id. at § 4(b)(1).   [63]   Id. at § 2(6).   [64]   Id. at § 4(b)(3).   [65]   Id. at § 4(c).   [66]   Id. at § 4(d)(2), § 4(e).   [67]   Id. at § 4(d)(1).   [68]   Id. at § 5(a).   [69]   Id.   [70]   Id.   [71]   Id. at § 5(b).   [72]   Id. at § 5(c).   [73]   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.   [74]   Id.   [75]   Office of Foreign Assets Control, Publication of New Cuba-Related FAQ (Dec. 17, 2014), http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20141217_33.aspx.   [76]   Office of Foreign Assets Control, Comprehensive Guidelines for License Applications to Engage in Travel-Related Transactions Involving Cuba (May 10, 2012), http://www.treasury.gov/resource-center/sanctions/Programs/Documents/cuba_tr_app.pdf, at 31-43.   [77]   Office of Foreign Assets Control, Summary of Travel, Carrier, and Remittance Forwarding Service Provider Program (Circular 2012) (July 2012), http://www.treasury.gov/resource-center/sanctions/Programs/Documents/circ2012.pdf.   [78]   31 C.F.R. § 515.572(a)(3).   [79]   31 C.F.R. § 515.560(e)(1).   [80]   31 C.F.R. § 515.533(a)(2)(i)(A).   [81]   31 C.F.R. § 515.201 (financial transactions with Cubans in third countries); 31 C.F.R. § 515.505(b) (bank accounts); 31 C.F.R. § 515.564(a) (2) and (b) (conferences); 31 C.F.R. § 515.207 (vessels);   [82]   Remarks by Secretary of State Clinton on Internet Freedom (Jan. 21, 2010), U.S. Department of State, http://www.state.gov/secretary/20092013clinton/rm/2010/01/135519.htm.   [83]   31 C.F.R. §§ 515.204 and 515.560(c)(3).   [84]   See current restrictions on remittances at 31 C.F.R. § 515.570(b), 515.570(g) and 515.572.   [85]   Excluding those related to Ukraine.   [86]   Exec. Order No. 13,664, 79 Fed. Reg. 19,283 (Apr. 7, 2014).   [87]   OFAC FAQ, Question 368, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#368 (last updated June 2, 2014).   [88]   Exec. Order No. 13,677, 79 Fed. Reg. 28,387 (May 15, 2014).   [89]   Exec. Order No. 13,668, 79 Fed. Reg. 31,019 (May 29, 2014).   [90]   Exec. Order No. 13,303, 3 C.F.R. 227 (2004). The Development Fund for Iraq was established in May 2003 by the Administrator of the Coalition Provision Authority, who had responsibility "for the temporary governance of Iraq and all accounts held for the fund or for the Central Bank of Iraq in the name of the fund." Id. at 229.   [91]   Exec. Order No. 13,364, 3 C.F.R. 236 (2005).   [92]   Exec. Order No. 13,671, 79 Fed. Reg. 39,949 (July 10, 2014).   [93]   Exec. Order No. 13,413, 71 Fed. Reg. 64,105 (Oct. 31, 2006).   [94]   Exec. Order No. 13,687, 80 Fed. Reg. 819 (Jan. 6, 2015).   [95]   Press Release, Treasury Imposes Sanctions Against the Government of the Democratic People’s Republic of Korea (Jan. 2, 2015), http://www.treasury.gov/press-center/press-releases/Pages/jl9733.aspx.   [96]   Id.   [97]   Venezuela Defense of Human Rights and Civil Society Act of 2014, Pub. L. No. 113-278, 128 Stat. ____. ("Pub. L. No. 113-278").   [98]   Syrian Sanctions Regulations, Final Rule, 79 Fed. Reg. 25,414 (May 2, 2014).   [99]   Exec. Order No. 13,399, 3 C.F.R. 218 (2007); Exec. Order No. 13,460, 3 C.F.R. 181 (2009); Exec. Order No. 13,572, 3 C.F.R. 236 (2012);  Exec. Order No. 13,573, 3 C.F.R. 241 (2012); Exec. Order No. 13,582, 3 C.F.R. 264 (2012); and Exec. Order No. 13,606, 3 C.F.R. 243 (2013). [100]   See 31 C.F.R. §§ 542.508-509; 31 C.F.R. §§542.520-526; 31 C.F.R. §§542.527-529. [101]    Burmese Sanctions Regulations, Final Rule, 79 Fed. Reg. 37,106 (June 20, 2014). [102]   Exec. Order No. 13,047, 3 C.F.R. 202 (1998). [103]   Exec. Order No. 13,310, 3 C.F.R. 241 (2004). [104]    Exec. Order No. 13,448, 3 C.F.R. 304 (2008); Exec. Order No. 13,464, 3 C.F.R. 189 (2009); Exec. Order No. 13,619, 3 C.F.R. 279 (2013); Exec. Order No. 13,651, 3 C.F.R. 324 (2014). [105]    Exec. Order No. 13,664, 79 Fed. Reg. 19,283 (Apr. 7, 2014). [106]    South Sudan Sanctions Regulations, Final Rule, 79 Fed. Reg. 37,190 (July 1, 2014). [107]    Exec. Order No. 13,667, 79 Fed. Reg. 28,387 (May 15, 2014). [108]    Central African Republic Sanctions Regulations, Final Rule, 79 Fed. Reg. 38,248 (July 7, 2014). [109]    Zimbabwe Sanctions Regulations, Final Rule, 79 Fed. Reg. 39,312 (July 10, 2014).     [110]        Office of Foreign Assets Control, General License No. 9: Specified Transactions Involving Certain Blocked Property Authorized (Feb. 3, 2014), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/wmd_gl9.pdf (hereinafter "WMD General License No. 9"). [111]   31 C.F.R. Part 544. [112]   31 C.F.R. Part 560. [113]   MV SININ released from Pirate Control, EU NAVFOR (Aug. 15, 2011), http://eunavfor.eu/mv-sinin-released-from-pirate-contol/. [114]   WMD General License No. 9 at paragraph (b). [115]   Id., Note to General License No. 9. [116]   Office of Foreign Assets Control, General License D-1: General License with Respect to Certain Services, Software, and Hardware Incident to Personal Communications (Feb. 7, 2014), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/iran_gld1.pdf. [117]   Id. at paragraphs (a)(2)(i) & (a)(3). [118]   Id. at paragraph (a)(5). [119]   Id. at paragraph (a)(6). [120]   Id. at paragraphs (a)(1) and (a)(2). [121]   Id. at paragraph (a)(2)(i). [122]   Id. at paragraph (a)(2)(ii). [123]   Id. at paragraph (a)(3)(i). [124]   Id. at paragraph (a)(3)(ii). [125]   Id. at paragraph (a)(3)(iii). [126]   Id. at paragraph (a)(4). [127]   Id. at paragraph (b)(4). [128]   Id. at paragraph (b)(2). [129]   Id. at paragraphs (a)(6) and (b)(1). [130]   Id. at paragraph (c). [131]   Office of Foreign Assets Control, General License G: Certain Academic Exchanges and the Exportation or Importation of Certain Educational Services Authorized (Mar. 19, 2014), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/iran_glg.pdf. [132]   Id. at paragraph (a). [133]   Id. at paragraph (b)(4). [134]   Id. at paragraph (b)(2). [135]   Id. at paragraph (b)(1). [136]   Id. at paragraph (b)(3). [137]   Id. at paragraph (c)(1). [138]   Id. at paragraph (c)(2). [139]   31 C.F.R. § 560.530(a)(4) (amended by Iranian Transactions and Sanctions Regulations, Final Rule, 79 Fed. Reg. 18,990,18,994 (Apr. 7, 2014)). [140]   See OFAC’s List of Medical Supplies, available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/iran_gl_med_supplies.pdf (last visited Jan. 7, 2015). [141]   Office of Foreign Assets Control, General License No. 1A: Certain Academic and Processional Exchanges Authorized (Aug. 7, 2014), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/sudan_gl1a.pdf. [142]   OFAC FAQ, Question 397, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#397 (last updated Aug. 11, 2014). [143]     Office of Foreign Assets Control, Implementation of the Joint Plan of Action Reached On November 24, 2013 Between The P5+1 and The Islamic Republic of Iran (Jan. 20, 2014), http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20140120.aspx. [144]   U.S. Dep’t of the Treasury and U.S. Dep’t of State, Guidance Relating to the Provision of Certain Temporary Sanctions Relief in Order to Implement the Joint Plan of Action Reached on November 24, 2013, Between the P5+1 and the Islamic Republic of Iran, as Extended Through June 30, 2015 (Nov. 25, 2014), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/guidance_ext_11252004.pdf(hereinafter "Second Extended JPOA Period Guidance"). [145]   Id. [146]   Id. [147]   Press Statement, Secretary of State John Kerry, Extension of Iran Nuclear Talks (July 18, 2014), http://www.state.gov/secretary/remarks/2014/07/229491.htm. [148]   U.S. Dep’t of the Treasury and U.S. Dep’t of State, Guidance Relating to the Provision of Certain Temporary Sanctions Relief in Order to Implement the Joint Plan of Action Reached on November 24, 2013, between the P5+1 and the Islamic Republic of Iran, As Extended Through November 24, 2014 (July 21, 2014), http://www.treasury.gov/resource-center/sanctions/Programs/Documents/jpoa_guidance_ext.pdf. [149]   Id. [150]   Id. [151]   Office of Foreign Assets Control, Frequently Asked Questions Relating to the Extension of Temporary Sanctions Relief to Implement the Joint Plan of Action between the P5 + 1 and the Islamic Republic of Iran (July 21, 2014), http://www.treasury.gov/resource-center/sanctions/Programs/Documents/jpoa_faqs_ext.pdf [152]   Id. [153]   See Second Extended JPOA Period Guidance. [154]   Id. [155]   Id. [156]   Id. [157]   Id. [158]   Office of Foreign Assets Control, Frequently Asked Questions Relating to the Extension of Temporary Sanctions Relief through June 30, 2015, to Implement the Joint Plan of Action between the P5 + 1 and the Islamic Republic of Iran (Nov. 25, 2014), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/jpoa_ext_faq_11252014.pdf (hereinafter "Second Extended JPOA Period FAQ"). [159]   Office of Foreign Assets Control, Second Amended Statement of Licensing Policy on Activities Related to the Safety of Iran’s Civil Aviation Industry (Nov. 25, 2014), http://www.treasury.gov/resource-center/sanctions/Programs/Documents/2nd_amended_jpoa_lic.pdf. [160]   Office of Foreign Assets Control, Reminder about the Removal of the .exe SDN and PLC Archives (Feb. 27, 2014), http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/exenotice.aspx. [161]   Id. [162]   Id. [163]   Id. [164]   Id. [165]   OFAC FAQ, Questions Related to Burma Sanctions, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/ques_index.aspx#burma (last updated Apr. 1, 2014). [166]   Id., Question 268, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#268 (last updated Apr. 1, 2014). [167]   Id., Question 269, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#269 (last updated Apr. 1, 2014). [168]   Id., Question 268, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#268 (last updated Apr. 1, 2014). [169]   Id., Question 359, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#359 (last updated Apr. 1, 2014). [170]   Id., Question 270, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#270 (last updated Apr. 1, 2014). [171]   Id., Question 271, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#271 (last updated Apr. 1, 2014). [172]   Id., Question 280, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#280 (last updated Apr. 1, 2014). [173]   Id., Question 278, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#278 (last updated Apr. 1, 2014). [174]   Id., Question 279, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#279 (last updated Apr. 1, 2014). [175]   Id., Question 283, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#283 (last updated Apr. 1, 2014). [176]   Id., Question 272, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#272 (last updated Apr. 1, 2014), and Question 273, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#273(last updated Apr. 1, 2014). [177]   Id., Question 280, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#280 (last updated Apr. 1, 2014). [178]   Id. [179]   Id., Question 286, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#286 (last updated Apr. 1, 2014). [180]   Id., Question 360, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#360 (last updated Apr. 1, 2014). [181]   Gibson, Dunn & Crutcher LLP, 2013 Year-End Sanctions Update (Feb. 6, 2014), http://www.gibsondunn.com/publications/pages/2013-Year-End-Sanctions-Update.aspx. [182]   OFAC FAQ, Question 277, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#277 (last updated Apr. 1, 2014). [183]   Office of Foreign Assets Control, Frequently Asked Questions on Iran/TSRA General Licenses (Apr. 7, 2014), http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20140407.aspx. [184]   31 C.F.R. § 560.530(a)(2) (amended by Iranian Transactions and Sanctions Regulations, Final Rule, 79 Fed. Reg. 18,990,18,993 (Apr. 7, 2014)). [185]   See 79 Fed. Reg. 18,990, 18,990 (Apr. 7, 2014). [186]   31 C.F.R. § 560.530(a)(3)-(4) (amended by Iranian Transactions and Sanctions Regulations, Final Rule, 79 Fed. Reg. 18,990,18,994 (Apr. 7, 2014)). [187]   OFAC FAQ, Questions regarding the general licenses (GL) for agricultural commodities, medicine, and medical devices in the Iranian Transactions and Sanctions Regulations, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/ques_index.aspx#iran_med (last updated Apr. 7, 2014). [188]   Id. [189]   Office of Foreign Assets Control, Upgrade to the SDN Search Tool (June 9, 2014), http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20140609.aspx (Upgrade to the SDN Search Tool"). [190]   Id. [191]   Office of Foreign Assets Control, Sanctions List Search Tool, http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/fuzzy_logic.aspx (last updated Dec. 1, 2014). [192]   Id. [193]   Id. [194]   See Upgrade to the SDN Search Tool. [195]   Office of Foreign Assets Control, Revised Guidance on Entities Owned by Persons Whose Property and Interests in Property are Blocked (Aug. 13, 2014), http://www.treasury.gov/resource-center/sanctions/Documents/licensing_guidance.pdf. [196]   OFAC FAQ, Questions Related to Entities Owned by Persons Whose Property and Interests in Property are Blocked, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/ques_index.aspx#50_percent (last updated Aug. 13, 2014). [197]   OFAC FAQ, Question Relating to the Payments or the Facilitation of Payments to Iranian Civil Aviation Authorities for Overflights of Iran or Emergency Landing in Iran, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#417 (last updated Nov. 4, 2014) [198]   Id. [199]   Id. [200]   Office of Foreign Assets Control, Release of Consolidated Non-SDN Data Files and Upgrade to Sanctions List Search (Oct. 10, 2014), http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/consolidated.aspx. OFAC also explained that "[i]n order to differentiate records that appear on the ISA list from those that do not appear on the SDN list, OFAC recently renamed the stand-alone ISA list. It is now called the Non-SDN ISA list or NS-ISA List." Id. [201]   Id. [202]   Id. [203]   Id. [204]   Id. [205]   Id. [206]   Office of Foreign Assets Control, Guidance Related to the Provision of Humanitarian Assistance by Not-For-Profit Non-Governmental Organizations (Oct. 17, 2014), http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Documents/20141017_humanitarian.pdf. The guidance clarifies that it "applies to registered 501(c)(3) (tax exempt status), not-for-profit non-governmental organizations." Id. at 1 n.1. [207]   Id. at 1. [208]   Id. [209]   Id. [210]   Id. [211]   Id. at 2. [212]   Id. [213]   Id. [214]   Id. [215]   Id. [216]   Office of Foreign Assets Control, Report of Licensing Activities Pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000, January – March 2013 (Jan. 24, 2014), available at http://www.treasury.gov/resource-center/sanctions/Documents/2quarter2013.pdf. [217]   Office of Foreign Assets Control, Report of Licensing Activities Pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000, April – June 2013 (Jan. 24, 2014), available at http://www.treasury.gov/resource-center/sanctions/Documents/3quarter2013.pdf [218]   Office of Foreign Assets Control, Report of Licensing Activities Pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000, July – September 2013 (Mar. 13, 2014), available at http://www.treasury.gov/resource-center/sanctions/Documents/4quarter2013.pdf [219]   Office of Foreign Assets Control,Terrorist Assets Report Calendar Year 2013 (June 25, 2014), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/tar2013.pdf. [220]   See Exec. Order No. 13,224, 3 C.F.R. 786 (2002). [221]   See Exec. Order No. 12,947, 3 C.F.R. 356 (1996), as amended by Exec. Order No. 13,099, 3 C.F.R. 208 (1999). [222]   See Antiterrorism and Effective Death Penalty Act of 1996, Pub. L. No. 104-132, 110 Stat. 1247-1258. [223]   See Export Administration Act § 6(j), 50 U.S.C. App. § 2405(j); Arms Export Control Act § 40(d), 22 U.S.C. § 2780(d); Foreign Assistance Act § 620A, 22 U.S.C. § 2371. [224]   Office of Foreign Assets Control, Biennial Report of Licensing Activities Pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000 (June 27, 2014), available at http://www.treasury.gov/resource-center/sanctions/Documents/6thbiennial_tsra.pdf  (hereinafter "2014 Biennial Report"). [225]   "Licensing determination" means any action –intermediate or final–taken in connection with a license application. The licensing determination may be a license, an amendment to a license, "return-without-action", a denial letter or any other communication in connection with the license application. See 2014 Biennial Report at 1,n.1. [226]   Office of Foreign Assets Control, Report of Licensing Activities Pursuant to The Trade Sanctions Report and Export Enhancement Act of 2000, October – December 2013 (Oct. 23, 2014), available at http://www.treasury.gov/resource-center/sanctions/Documents/1quarter2014.pdf. [227]   Office of Foreign Assets Control Report of Licensing Activities Pursuant to the Trade Sanctions Report and Export Enhancement Act of 2000, January – March 2014 (Dec. 2, 2014),  available at http://www.treasury.gov/resource-center/sanctions/Documents/2quarter2014.pdf. [228]   Office of Foreign Assets Control, Enforcement Information for January 23, 2014 (Jan. 23, 2014), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20140123_clearstream.pdf. [229]   Samuel Rubenfeld, Treasury: Clearstream ‘Buried’ Beneficial Ownership of Iranian Securities, Risk & Compliance Journal, Wall St. J. Blog (Jan. 23, 2014, 3:00 PM), http://blogs.wsj.com/riskandcompliance/2014/01/23/treasury-clearstream-buried-beneficial-ownership-of-iranian-securities/. [230]   Id. [231]   Joseph Ax, U.S. Grand Jury Probing Deutsche Borse Unit’s Ties to Iran Bank, Reuters, Apr. 1, 2014, available at http://www.reuters.com/article/2014/04/01/us-usa-iran-court-idUSBREA301V220140401. [232]   Id. [233]   Office of Foreign Assets Control, Enforcement Information for January 27, 2014 (Jan. 27, 2014), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20140127_moscow.pdf. [234]   Office of Foreign Assets Control, Enforcement Information for April 18, 2014 (Apr. 18, 2014), available at  http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20140418_cwt.pdf. [235]   Office of Foreign Assets Control, Enforcement Information for May 6, 2014 (May 6, 2014), available at  http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/05062014_Decolar.pdf. [236]   Office of Foreign Assets Control, Enforcement Information for June 5, 2014 (June 5, 2014), available at  http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20140605_fokker.pdf. [237]   Office of Foreign Assets Control, Enforcement Information for June 30, 2014 (June 30, 2014), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20140630_bnp.pdf. [238]   Settlement Agreement between the U.S. Department of Treasury’s Office of Foreign Assets Control and BNP Parabas, SA (June 30, 2014), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20140630_bnp_settlement.pdf0 [239]   Office of Foreign Assets Control, Enforcement Information for July 25, 2014 (July 25, 2014), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20140725_epsilon.pdf [240]   Office of Foreign Assets Control, Penalty Notice to Epsilon Electronics Inc. (July 21, 2014), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20140721_epsilon_penalty.pdf [241]   Office of Foreign Assets Control, Enforcement Information for September 3, 2014 (Sept. 3, 2014), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20140903_citigroup.pdf. [242]   Id. [243]   Id. [244]   Id. [245]   Id. [246]   Id. [247]   Id. [248]   Id. [249]   Office of Foreign Assets Control, Enforcement Information for September 9, 2014 (Sept. 9, 2014), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20140909_zulutrade.pdf. [250]   Id. [251]   Id. [252]   Id. [253]   Id. [254]   Office of Foreign Assets Control, Enforcement Information for October 10, 2014 (Oct. 10, 2014), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20141029_bupa.pdf. [255]   Id. [256]   Id. [257]   Id. [258]   Id. [259]   Id. [260]   Office of Foreign Assets Control, Enforcement Information for November 13, 2014 (Nov. 13, 2014), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20141113_esco.pdf. [261]   Id. [262]   Id. [263]   Id. [264]   Id. [265]   Council Regulation 208/2014, Concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine, 2014 O.J. (L 66) 1; and Council Decision 2014/119/CFSP concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine, 2014 O.J. (L 66) 26. [266]   Council Regulation 269/2014, Concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 78) 6; and Council Decision 2014/145/CFSP, Concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 78) 16. [267]   Council Regulation 476/2014, Amending Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 137) 1; and Council Decision 2014/265/CFSP amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 137) 9. [268]   Council Regulation 783/2014, Amending Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 214) 2; and Council Decision 2014/475/CFSP amending Decision 2014/145/CFSP, Concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 214) 28. [269]   Council Implementing Regulation 284/2014, Implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 86) 27; and Council Implementing Decision 2014/151/CFSP, Implementing Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 86) 30. [270]   Council Implementing Regulation 381/2014, Implementing Regulation (EU) No 208/2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine, 2014 O.J. (L 111) 33; and Council Implementing Decision 2014/216/CFSP, Concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine, 2014 O.J. (L 111) 91. [271]   Council Implementing Regulation 433/2014, Implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 126) 48; and Council Implementing Decision 2014/238/CFSP, Implementing Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 126) 55. [272]   Council Regulation 811/2014, Amending Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 221) 11; Council Implementing Regulation 810/2014, Implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 221) 1; and Council Decision 2014/499/CFSP, Amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 221) 15. [273]   Council Implementing Regulation 826/2014, Implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 226) 16; and Council Decision 2014/508/CFSP, Amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 226) 23. [274]   Council Implementing Regulation 961/2014, Implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 271) 8; and Council Decision 2014/658/CFSP, Amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 271) 47. [275]   Council Implementing Regulation 1270/2014, Implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 344) 5; and Council Decision 2014/855/CFSP, Amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 344) 22. [276]   Council Regulation 1351/2014, Amending Regulation (EU) No 692/2014 concerning restrictive measures in response to the illegal annexation of Crimea and Sevastopol, 2014 O.J. (L 365) 46; and Council Decision 2014/933, Amending Decision 2014/386/CFSP concerning restrictive measures in response to the illegal annexation of Crimea and Sevastopol, 2014 O.J. (L 365) 152. [277]   Conclusions of the Special meeting of the European Council, Jul. 16, 2014, available at http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ec/143992.pdf. [278]   Gibson, Dunn & Crutcher LLP, Bear Bating – EU Sectoral Sanctions Against Russia (Aug. 6, 2014), http://www.gibsondunn.com/publications/pages/Bear-Baiting–EU-Sectoral-Sanctions-Against-Russia.aspx (hereinafter "EU Sectoral Sanctions Alert"). [279]   Council Regulation 1351/2014, Amending Regulation (EU) No 692/2014 concerning restrictive measures in response to the illegal annexation of Crimea and Sevastopol, 2014 O.J. (L 365) 46. [280]   Supra, footnote 4. [281]   Council Regulation 833/2014, Concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine, 2014 O.J. (L 229) 1; and Council Decision 2014/512/CFSP, Concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine, 2014 O.J. (L 229) 13. [282]   This arms embargo is not included in the relevant Regulation, but is included in the Decision. As such it is only binding on the Member States as regarding the issuing of export licenses. [283]   Bundesamt für Wirtschft und Ausfuhrkontrolle, Merkblatt zum Aussenwirtschaftverkehr mit der Russischen Föderation, Aug. 12, 2014, available at http://www.ausfuhrkontrolle.info/ausfuhrkontrolle/de/arbeitshilfen/merkblaetter/merkblatt_russland.pdf. [284]   Department for Business Innovation & Skills, New EU Sanctions against Russia. Frequently Asked Questions, Aug. 14, 2014, available at http://blogs.bis.gov.uk/exportcontrol/files/2014/08/Russia-Sanctions-FAQ-August-2014.docx. [285]   Council Regulation 960/2014, Amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine, 2014 O.J. (L 271) 3; and Council Decision 2014/659/CFSP, Amending Decision 2014/512/CFSP concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine, 2014 O.J. (L 271) 54. [286]   HM Treasury, Ukraine: list of persons subject to restrictive measures in view of Russia’s actions destabilizing the situation in Ukraine, available at https://www.gov.uk/government/publications/financial-sanctions-consolidated-list-of-targets/ukraine-list-of-persons-subject-to-restrictive-measures-in-view-of-russias-actions-destabilising-the-situation-in-ukraine. [287]   Council Regulation 1290/2014, Amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine, and amending Regulation (EU) No. 960/2014 amending Regulation (EU) No 833/2014, 2014 O.J. (L 349) 20. [288]   European Commission, Commission Guidance note on the implementation of certain provision of Regulation (EU) No 833/2014, Dec. 12, 2014, available at http://europa.eu/newsroom/files/pdf/c_2014_9950_en.pdf. [289]   Christian Oliver, EU plans Russia sanctions talks with Latin American countries, Financial Times, Aug. 11, 2014, available at http://www.ft.com/cms/s/0/4730c97a-216a-11e4-a958-00144feabdc0.html#axzz3L0jpxZ3d. [290]   Gabriele Baczynska & Andrew Roche, German EU lawmaker says Russia barred her from entering, Reuters, Sept. 26, 2014, available at http://www.reuters.com/article/2014/09/26/us-ukraine-crisis-russia-eu-idUSKCN0HL1QE20140926. [291]   Kathrin Hille, Russia moves to compensate sanctioned oligarchs, Financial Times, Oct. 8, 2014, available at http://www.ft.com/intl/cms/s/0/b374be24-4f01-11e4-9c88-00144feab7de.html#axzz3L0jpxZ3d; the draft law is available at http://asozd2.duma.gov.ru/main.nsf/(SpravkaNew)?OpenAgent&RN=607554-6&02, in Russian. [292]   Gleb Garanich, Ukraine may block all transit from Russia in sanctions row – PM, Reuters Aug. 8, 2014, available at http://rt.com/business/178988-russia-ukraine-gas-transit/. [293]   Press Release, Norwegian Ministry of Foreign Affairs, (Aug. 15, 2014), available at http://www.regjeringen.no/en/dep/ud/press/news/2014/Restrictive-measures-against-Russia-.html?id=765896. [294]   Press Release ST 14387/14, European Union, Declaration by High Representative, Catherine Ashton, Concerning the alignment of certain third countries with Council Decision 2014/658/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (Oct. 15, 2014), available at http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/cfsp/145122.pdf. [295]   Press Release, European Union, Conclusions Foreign Affairs Council meeting on Ukraine (Nov. 17, 2014), available at http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/145789.pdf.; and Council Implementing Regulation 1270/2014, Implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 344) 5; and Council Decision 2014/855/CFSP, Concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, 2014 O.J. (L 344) 22. [296]   Council Implementing Regulation 1057/2014, Concerning restrictive measures directed against certain individuals, groups, undertakings and entities in view of the situation in Afghanistan, 2014 O.J. (L 293) 1. [297]   Council Decision 2013/798/CFSP, Concerning restrictive measures against the Central African Republic, 2014 O.J. (L 352) 51. See also S.C. Res 2127, U.N. Doc. S/RES/2127 (Dec. 5, 2013). [298]   Council Regulation 224/2014, Concerning restrictive measures against the Central African Republic, 2014 O.J. (L70) 1; Council Decision 2014/125/CFSP, 2014 O.J. (L 70) 22); and S.C. Res 2134, U.N. Doc. S/RES/2134 (Jan. 28, 2014). [299]   Also see S.C. Res. 2136, U.N. Doc S/RES/2136 (Jan. 30, 2014). [300]   Council Regulation 270/2014, Amending Regulation (EC) No 889/2005 imposing certain restrictive measures in respect of the Democratic Republic of Congo, 2014 O.J. (L 79) 34; Council Decision 2014/147/CFSP amending Decision 2010/788/CFSP concerning restrictive measures against the Democratic Republic of the Congo, 2014 O.J. (L 79) 42; and Council Regulation 271/2014  amending Regulation (EC) No 1183/2005 imposing certain specific restrictive measures directed against persons acting in violation of the arms embargo with regard to the Democratic Republic of the Congo, 2014 O.J. (L 79) 35. [301]   Implementing S.C. Res. 2153, U.N. Doc. S/RES/2153 (April 29, 2014); see Council Decision 2014/460/CFSP of 14 July 2014 renewing the restrictive measures against Côte d’Ivoire. [302]   Council Decision 2014/213/CFSP, Amending Decision 2010/638/CFSP concerning restrictive measures against the Republic of Guinea, 2014 O.J. (L 111) 83. [303]   Council Decision 2014/728/CFSP, Amending Decision 2010/638/CFSP concerning restrictive measures against the Republic of Guinea, 2014 O.J. (L 301) 21. [304]   Council Decisions 2014/480/CFSP, Amending Decision 2010/413/CFSP concerning restrictive measures against Iran, 2014 O.J. (L 215) 4; and Council Decision 2014/829/CFSP, Amending Decision 2010/413/CFSP concerning restrictive measures against Iran, 2014 O.J. (L 338) 1. [305]   Council Regulation 2014/42/EU, Amending Regulation (EU) No 267/2012 concerning restrictive measures against Iran, 2014 O.J. (L 15) 18; and Council Decision 2014/21/CFSP, Amending Council Decision 2010/413/CFSP concerning restrictive measures against Iran, 2014 O.J. (L 15) 22. [306]   For more detail, see Gibson, Dunn & Crutcher LLP, 2013 Year-End Sanctions Update (Feb. 6, 2014), http://www.gibsondunn.com/publications/Pages/2013-Year-End-Sanctions-Update.aspx#_ftn181. [307]   Council Regulation 791/2014, Amending Regulation (EC) No 1210/2003 concerning certain specific restrictions on economic and financial relations with Iraq, 2014 O.J. (L 217) 5; and Council Decision 2014/484/CFSP, Amending Common Position 2003/495/CFSP on Iraq, 2014 O.J. (L 217) 38. [308]   Council Decision 2014/141/CFSP, Amending Common Position 2008/109/CFSP concerning restrictive measures imposed against Liberia, 2014 O.J. (L 76) 45. [309]   Council Regulation 45/2014, Amending Regulation (EU) No 204/2011 concerning restrictive measures in view of the situation in Libya, 2014 O.J. (L 16) 1. [310]   Council Regulation 690/2014, Amending Regulation (EU) No 204/2011 concerning restrictive measures in view of the situation in Libya, 2014 O.J. (L 183) 3; and Council Decision 2014/380/CFSP amending Decision 2011/137/CFSP concerning restrictive measures in view of the situation in Libya, 2014 O.J. (L183) 52. [311]   Council Regulation 1102/2014, Amending Regulation (EU) No 204/2011 concerning restrictive measures in view of the situation in Libya, 2014 O.J. (L 301) 1; Council Implementing Regulation 1103/2014, Implementing Article 16(1) of Regulation (EU) No 204/2011 concerning restrictive measures in view of the situation in Libya, 2014 O.J. (L 301) 3; and Council Decision 2014/727/CFSP, Amending Decision 2011/137/CFSP concerning restrictive measures in view of the situation in Libya, 2014 O.J. (L 301) 30. [312]   Commission Implementing Regulation 1059/2014, Amending Council Regulation (EC) No 329/2007 concerning restrictive measures against the Democratic People’s Republic of Korea, 2014 O.J. (L 293) 15; and Council Decision 2014/700/CFSP amending Decision 2013/183/CFSP, Concerning restrictive measures against the Democratic People’s Republic of Korea, 2014 O.J. (L 293) 34. [313]   Council Decision 2014/270/CFSP, Amending Council Decision 2010/231/CFSP concerning restrictive measures against Somalia, 2014 O.J. (L 138) 106. [314]   Council Implementing Regulation 1104/2014, Implementing Article 12(1) 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, 2014 O.J. (L 301) 5; and Council Implementing Decision 2014/729/CFSP, Implementing Decision 2010/231/CFSP concerning restrictive measures against Somalia, 2014 O.J. (L 301) 34. [315]   Council Regulation 748/2014, Concerning restrictive measures in respect of the situation in South Sudan, 2014 O.J. (L 203) 13; and Council Decision 2014/449/CFSP, Concerning restrictive measures in view of the situation in South Sudan, 2014 O.J. (L 203) 100. [316]   Council Regulation 747/2014, Concerning restrictive measures in view of the situation in Sudan and repealing Regulations (EC) No 131/2004 and (EC) No 1184/2005, 2014 O.J. (L 203) 1; and Council Decision 2014/450/CFSP, Concerning restrictive measures in view of the situation in Sudan and repealing Decision 2011/423/CFSP, 2014 O.J. (L203) 106. [317]   Council Regulation 124/2014, Amending Regulation (EU) No 36/2012 concerning restrictive measures in view of the situation in Syria, 2014 O.J. (L 40) 8; and Council Decision 2014/74/CFSP, Amending Decision 2013/255/CFSP concerning restrictive measures against Syria, 2014 O.J. (L 40) 63. [318]   Council Implementing Decision 2014/387/CFSP, Implementing Decision 2013/255/CFSP concerning restrictive measures against Syria, 2014 O.J. (L 183) 72. [319]   Council Implementing Regulation 793/2014, Implementing Regulation (EU) No 36/2012 concerning restrictive measures in view of the situation in Syria, 2014 O.J. (L 217) 10; and Council Implementing Decision 2014/488/CFSP, Implementing Decision 2013/255/CFSP concerning restrictive measures against Syria, 2014 O.J. (L 217) 49. [320]   Council Implementing Decision 2014/678/CFSP, Implementing Decision 2013/255/CFSP concerning restrictive measures against Syria, 2014 O.J. (L 283) 59. [321]   Council Implementing Regulation 1105/2014, Implementing Regulation (EU) No 36/2012 concerning restrictive measures in view of the situation in Syria, 2014 O.J. (L 301) 7; and Council Implementing Decision 2014/730/CFSP implementing Decision 2013/255/CFSP, Concerning restrictive measures against Syria, 2014 O.J. (L 301) 36. [322]   Council Regulation 1352/2014, Concerning restrictive measures in view of the situation in Yemen, 2014 (O.J.) (L 365) 60. [323]   Council Regulation 153/2014, Amending Regulation (EC) No 314/2004 concerning certain restrictive measures in respect of Zimbabwe and repealing Regulation (EU) No 298/2013, 2014 O.J. (L 50) 1; and Council Decision 2014/98/CFSP, Amending Decision 2011/101/CFSP concerning restrictive measures against Zimbabwe, 2014 O.J. (L 50) 20. [324]   Commission Delegated Regulation 1382/2014, Amending Council Regulation (EC) No 428/2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items, 2014 O.J. (L 371) 1. [325]   For background, see Gibson, Dunn & Crutcher LLP, 2013 Year-End Update on Corporate Non-Prosecution Agreements (NPAs) and Deferred Prosecution Agreements (DPAs), (Jan. 7, 2014), http://www.gibsondunn.com/publications/Pages/2013-Year-End-Update-Corporate-Non-Prosecution-Agreements-and-Deferred-Prosecution-Agreements.aspx; 2014 Mid-Year Update on Corporate Non-Prosecution Agreements (NPAs) and Deferred Prosecution Agreements (DPAs), (Jul. 8, 2014). http://www.gibsondunn.com/publications/Pages/2014-Mid-Year-Update-Corporate-Non-Prosecution-Agreements-and-Deferred-Prosecution-Agreements.aspx. [326]   Consultation Document, Foreign & Commonwealth Office, Contract Sanctions: A Consultation (Feb. 22, 2014), available at https://www.dropbox.com/s/hxudbtorzqybdpf/Contract%20sanctions%20consultation%20document%5B1%5D.pdf. [327]   HM Treasury Notice, Financial Sanctions: Revision of treatment of certain transactions, Jul. 18, 2014. [328]   International Sanctions (Ukraine) Amendment Regulations 2014 (BR 2014). [329]   For the Isle of Man this is helpfully set out in Sanctions Notice 41. European Union Sanctions Ukraine/Russia, Dec. 22, 2014, available at http://www.gov.im/media/1064229/sanctions-notice-41-ukraine-russia-22-12-14.pdf, for Jersey see the EU Legislation (Sanctions – Ukraine)(Amendment)(Jersey) Order 2014, available at http://www.jerseylaw.je/Law/display.aspx?url=lawsinforce%5chtm%5cROFiles%5cR%26OYear2014%2fR%26O-216-2014.htm. [330]   Ukraine (Sanctions) (Overseas Territories) No. 3 Order 2014, S.I. 2014/1098, available at http://www.legislation.gov.uk/uksi/2014/1098/pdfs/uksi_20141098_en.pdf. [331]   L.N. 277 of 2014 National Interest (Enabling Powers) Act (Cap. 365) Enforcement of European Union Sanctions (Islamic Republic of Iran) Regulations, 2014, available at http://mfsa.com.mt/pages/readfile.aspx?f=/files/International%20Affairs/Sanctions%202014/L.N.%20277.2014%20iran.pdf. [332]   Case C-415/05 P, Kadi and Al Barakaat International Foundation v Council and Commission, 2008 ECJ EUR-Lex LEXIS 6351 (Sept. 3, 2008). [333]   Case C‑314/13, Užsienio reikalų ministerija and others v Vladimir Peftiev and others, 2014, ECJ EUR-Lex LEXIS not yet reported (Jun. 12, 2014). [334]   Statute of the Court of Justice of the European Union, art. 19, Aug. 11, 2012, 2012 O.J. (L 228) 1. [335]   Cases T-196/11 and T-542/12, Aliaksei Mikhalchanka v Council, 2014, ECJ EUR-Lex LEXIS not yet reported (Sept. 23, 2014). [336]   Case T-646/11, Ipatau v Council, 2014, ECJ EUR-Lex LEXIS not yet reported (Sept. 23, 2014). [337]   Case T‑256/11, Ahmed Abdelaziz Ezz and others v Council, 2014, ECJ EUR-Lex LEXIS not yet reported (Feb. 27, 2014). [338]   Case T-384/11, Safa Nicu Sepahan v Council, 2014, ECJ EUR-Lex LEXIS not yet reported (Nov. 25, 2014). [339]   Case T-66/12, Sedghi and Azizi v Council, 2014, ECJ EUR-Lex LEXIS not yet reported (Jun. 4, 2014). [340]   Case T‑67/12, Sina Bank v Council, 2014, ECJ EUR-Lex LEXIS not yet reported (Jun. 4, 2014). [341]   Case T‑68/12, Abdolnaser Hemmati v Council, 2014 ECJ EUR-Lex LEXIS not yet reported (Jun. 4, 2014). [342]   Council Decision 2014/776/CFSP, Amending Decision 2010/413/CFSP concerning restrictive measures against Iran, 2014 O.J. (L 325) 19. [343]   Case T-182/13, Moallem Insurance Co v Council, 2014 ECJ EUR-Lex LEXIS not yet reported (Jul. 10, 2014). [344]   Case T-578/12, NIOC v Council, 2014 ECJ EUR-Lex LEXIS not yet reported (Jul. 16, 2014). [345]   Case T-262/12, Central Bank of Iran v Council, 2014 ECJ EUR-Lex LEXIS not yet reported (Sept. 18, 2014). [346]   Case T-552/12, North Drilling Co v Council, 2013 ECJ EUR-Lex LEXIS not yet reported (Nov. 12, 2013). [347]   Council Decision 2014/222/CFSP, Amending Decision 2010/413/CFSP concerning restrictive measures against Iran, 2014 O.J. (L 119) 65; and Council Implementing Regulation (EU) No 397/2014, Implementing Regulation (EU) No 267/2012 concerning restrictive measures against Iran, 2014 O.J. (L 119) 1. [348]   Council Decision 2013/661/CFSP, Amending Decision 2010/413/CFSP concerning restrictive measures against Iran, 2013 O.J. (L 306) 18; and Council Implementing Regulation 1154/2013, Implementing Regulation (EU) No 267/2012 concerning restrictive measures against Iran, 2013 O.J. (L306) 3: re-listing of Persia International Bank Plc, Export Development Bank of Iran, Iran Insurance Company, Post Bank Iran, Bank Refah Kargaran, Good Luck Shipping LLC, and Iranian Offshore Engineering & Construction Co. [349]   Case T-348/13, Ahmed Mohammed Al Kadhaf Dam v Council, 2014 ECJ EUR-Lex LEXIS not yet reported (Sept. 24, 2014). [350]   Case T-293/12, Syria International Islamic Bank v Council, 2014 ECJ EUR-Lex LEXIS not yet reported (Jun. 11, 2014). [351]   Cases T-653/11, 654/11 and 43/12, Jaber and others v Council, 2014 ECJ EUR-Lex LEXIS not yet reported (Nov. 13, 2014). [352]   Cases T-307/12 and 408/13, Adib Mayeleh v Council of the EU, 2014 ECJ EUR-Lex LEXIS not yet reported (Nov. 5, 2014). [353]   Case T-306/10, Hani El Sayyed Elsebai Yusef v Commission, 2014 ECJ EUR-Lex LEXIS not yet reported (Mar. 21, 2014). [354]   Commission Regulation 1629/2005, Amending for the 54th time Council Regulation (EC) No 881/2002 imposing certain specific restrictive measures directed against certain persons and entities associated with Usama bin Laden, the Al-Qaida network and the Taliban, and repealing Council Regulation (EC) No 467/2001, 2005 O.J. (L 260) 9. [355]   Case T-2/06, Yusef v Council, 2006 ECJ EUR-Lex LEXIS not yet reported (May 31, 2006). [356]   Case C-415/05 P, Kadi and Al Barakaat International Foundation v Council and Commission, 2008 ECJ EUR-Lex LEXIS 6351 (Sept. 3, 2008). [357]   Her Majesty’s Treasury v Mohammed Jabar Ahmed and others [2010] UKSC 2 & 5. [358]   Case C-584/10, Commission and others v Yassin Abdullah Kadi, 2013 ECJ EUR-Lex LEXIS not yet reported (Jul. 18, 2013). [359]   Cases T-208/11 and 508/11, LTTE v Council, 2014 ECJ EUR-Lex LEXIS not yet reported (Oct. 16, 2014). [360]   Clare Hutchison, Iranian bank sues UK government for $4 billion over sanctions, Reuters, Feb. 17, 2014, available at http://www.reuters.com/article/2014/02/17/us-britain-bankmellat-idUSBREA1G0KC20140217. [361]   R (on the application of Sarkandi & Ors) v Secretary of State for Foreign & Commonwealth Affairs [2014] EWHC 2359 (Admin). [362]   The Export Control (Russia, Crimea and Sevastopol Sanctions) (Amendment) Order 2014, S.I. 2014/2932, available at http://www.legislation.gov.uk/uksi/2014/2932/pdfs/uksi_20142932_en.pdf. [363]   R (on the application of OJSC Rosneft Oil Company) v HM Treasury, Secretary of State for Business, Innovation and Skills and the Financial Conduct Authority [2014] EWHC 4002 (Admin). [364]   R (on the application of Privacy International) v The Commissioner for HM Revenue & Customs [2014] EWHC 1475 (Admin). [365]   Ukraine in Brief. Tuesday, July 8, Ukranews, http://ukranews.com/news/128393.—.ru [366]   Jason Corcoran, Boris Groendahl and Alan Katz, Raiffeisen Draws Sanctions Scrutiny for Russia Bond Sale, Bloomberg News, Dec. 10, 2014,  available at http://www.businessweek.com/news/2014-12-10/raiffeisen-draws-sanctions-scrutiny-for-russia-bond-sale. [367]   Press release, Der Generalbundesanwalt, Festnahme wegen mutmasslicher Verstösse gegen das Aussenwirtschaftsgesetz (Feb. 19, 2014),  http://www.generalbundesanwalt.de/de/showpress.php?themenid=16&newsid=493. [368]   Emma Anderson, Germany tries Iranians charged with smuggling drone engines as jet ski parts, Reuters, Jun. 16, 2014, available at http://www.reuters.com/article/2014/06/16/us-iran-germany-trial-idUSKBN0ER1PH20140616. [369]   Terminierung im Strafverfahren gegen Iman J.L., Dec. 10, 2014, available at http://www.olg-frankfurt.justiz.hessen.de/irj/OLG_Frankfurt_am_Main_Internet?uid=1cd20043-bbd1-8531-f012-f312b417c0cf. [370]   Nick Squires & Tom Parfitt, Italy seizes £24m of real estate belonging to Vladimir Putin’s judo partner, The Telegraph, Sept. 23, 2014, available at http://www.telegraph.co.uk/news/worldnews/vladimir-putin/11116161/Italy-seizes-24m-of-real-estate-belonging-to-Vladimir-Putins-judo-partner.html, and Italian media reported about the police hunt for the assets of Russians, CES News, Sep. 26, 2014, available at http://cesnews.ru/2014/09/26/italian-media-reported-about-the-police-hunt-for-the-assets-of-russians/. [371]   ONA acepta una multa por exporter maquinaria a Irán, Diario Vasco, Feb. 22, 2014, available at http://www.diariovasco.com/v/20140222/economia/acepta-multa-exportar-maquinaria-20140222.html. [372]   Spanish Company Charged with Exporting turbine manufacturing machines with nuclear applications to Iran, Iran Watch, Jun. 5, 2014, available at http://www.iranwatch.org/our-publications/international-enforcement-actions/spanish-company-charged-exporting-turbine-manufacturing-machines-nuclear-applications-iran. [373]   Press Release, Spanish Civil Guard, Desarticulada una red que pretendía enviar a Irán equipos industriales susceptibles de ser empleados para fabricar misiles, Apr. 7, 2014, available at http://www.guardiacivil.es/es/prensa/noticias/4860.html. [374]   Press Release, Swiss Financial Market Supervisory Authority, Inadequate risk management of U.S. sanctions: FINMA closes proceedings against BNP Paribas (Suisse) (Jul. 1, 2014), available at http://www.finma.ch/e/aktuell/Pages/mm-abschluss-verfahren-bnp-paribas-suisse-20140701.aspx. [375]   Id. [376]   Press Release, Swiss State Secretariat for Economic Affairs Modification, Concerning the measures to prevent the circumvention of international sanctions in connection with the situation in Ukraine (Aug. 4, 2014), available at http://www.seco.admin.ch/themen/00513/00620/00622/05405/index.html?lang=de. [377]   Press Release, Swiss State Secretariat for Economic Affairs Modification, Ukraine: Further measures to prevent circumvention of sanctions (Nov. 12, 2014), available at https://www.news.admin.ch/message/index.html?lang=en&msg-id=55198. [378]   Press Release, HM Revenue & Customs, Illegal exporter ordered to repay criminal profit, Nov. 21, 2014, available at http://www.mynewsdesk.com/uk/hm-revenue-customs-hmrc/pressreleases/illegal-exporter-ordered-to-repay-criminal-profit-1087729. [379]   Gary Hyde v R [2014] EWCA Crim 713, available at http://www.bailii.org/ew/cases/EWCA/Crim/2014/713.html. [380]   Press Release, Serious Fraud Office, Money Laundering Investigation Opened, Apr. 28, 2014, available at http://www.sfo.gov.uk/press-room/latest-press-releases/press-releases-2014/money-laundering-investigation-opened.aspx. [381]   Cynthia O’Murchu and Melissa Hancock, Reed Business Information faces scrutiny over sanctions, Fin. Times, May 1, 2014, available at http://www.ft.com/cms/s/0/a2107ba4-c659-11e3-ba0e-00144feabdc0.html#axzz3O3y8ojcA. [382]   Financial Conduct Authority, TR14/16 – How small banks manage money laundering and sanctions risk: update, Nov. 14, 2014, available at http://www.fca.org.uk/your-fca/documents/thematic-reviews/tr14-16. [383]   OFAC Guidance Relating to the Provision of Certain Temporary Sanctions Relief in Order to Implement the Joint Plan of Action Reached on November 24, 2013, Between the P5+1 and the Islamic Republic of Iran, as Extended Through June 30, 2015, available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/guidance_ext_11252004.pdf. [384]   David Sanger & Michael Gordon, U.S. and Allies Extend Iran Nuclear Talks by 7 Months, N.Y. Times, Nov. 24, 2014, at A14. Available at http://www.nytimes.com/2014/11/25/world/middleeast/iran-nuclear-talks.html. [385]   See Second Extended JPOA Period FAQ at 1. [386]   See, e.g., Patricia Zengerle, Iran Extension Prompts Calls for More Sanctions in U.S. Congress, Reuters, Nov. 24, 2014, http://www.reuters.com/article/2014/11/24/us-iran-nuclear-usa-congress-idUSKCN0J81S820141124. [387]   See Section I.B.2. for a description of the major provisions of this legislation. For a more in-depth discussion of the Ukraine Freedom Support Act, see Client Alert, Gibson, Dunn & Crutcher LLP, President Obama Signs the Ukraine Freedom Support Act into Law, Authorizing New Sanctions on Russian Entities and Foreign Companies Conducting Business in Russia (Dec. 22, 2014), http://www.gibsondunn.com/publications/Pages/President-Obama-Signs-Ukraine-Freedom-Support-Act-into-Law.aspx. [388]   See http://www.nytimes.com/2014/12/19/world/americas/a-brave-move-by-obama-removes-a-wedge-in-relations-with-latin-america.html?_r=0. [389]   See http://www.washingtonpost.com/blogs/post-politics/wp/2014/12/17/cuba-deal-reaction-sharply-split-on-capitol-hill/.        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 lawyers in the firm’s International Trade Group: United States:Judith Alison Lee – Co-Chair, Washington, D.C. (+1 202-887-3591, jalee@gibsondunn.com)Ronald Kirk – Co-Chair, Dallas (214-698-3295, rkirk@gibsondunn.com)Jose W. Fernandez – New York (+1 212-351-2376, jfernandez@gibsondunn.com)Marcellus A. McRae – Los Angeles (+1 213-229-7675, mmcrae@gibsondunn.com)Daniel P. Chung – Washington, D.C. (+1 202-887-3729, dchung@gibsondunn.com)Andrea Farr – Washington, D.C. (+1 202-955-8680, afarr@gibsondunn.com)Stephenie Gosnell Handler – Washington, D.C. (+1 202-887-3517, shandler@gibsondunn.com)Eric Lorber* – Washington, D.C. (+1 202-887-3758, elorber@gibsondunn.com)Lindsay M. Paulin – Washington, D.C. (+1 202-887-3701, lpaulin@gibsondunn.com)Michael Willes - Los Angeles (+1 213-229-7094, mwilles@gibsondunn.com)     David A. Wolber – New York (+1 212-351-2384, dwolber@gibsondunn.com)Annie Yan – Washington, D.C. (+1 202-887-3547, ayan@gibsondunn.com) Europe:Peter Alexiadis – Brussels (+32 2 554 72 00, palexiadis@gibsondunn.com)Attila Borsos – Brussels (+32 2 554 72 10, aborsos@gibsondunn.com)Patrick Doris – London (+44 (0)207 071 4276, pdoris@gibsondunn.com)Penny Madden – London (+44 (0)20 7071 4226, pmadden@gibsondunn.com)Mark Handley – London (+44 (0)207 071 4277, mhandley@gibsondunn.com) *  Ms. Gosnell Handler and Mr. Lorber are not yet admitted to practice in the District of Columbia, and currently practice under the supervision of the Principals of the Firm. © 2015 Gibson, Dunn & Crutcher LLP Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

May 27, 2014 |
Webcast – World Bank Sanctions and Enforcement: Why You Need to Be Prepared

​Featuring a senior staff member from The World Bank’s Integrity Vice Presidency and leading anti-corruption and enforcement practitioners Join leading anti-corruption and enforcement practitioners from Gibson Dunn and PricewaterhouseCoopers for an engaging discussion with a senior staff member from the World Bank’s Office of Integrity Vice Presidency about the World Bank’s expanding role in combatting global fraud and corruption and sanctioning companies that engage in wrongdoing. View Slides [PDF] Topics discussed include: The growing role of the World Bank in policing fraud, corruption, and other sanctionable conduct How the World Bank defines sanctionable practices, how the Bank investigates allegations of misconduct, the breadth of the World Bank’s jurisdiction over contractors, and how the Bank’s sanctions process works Understanding the different types of sanctions and the consequences of being sanctioned by the World Bank, including cross-debarment by other multilateral development banks The Bank’s use of negotiated agreements to resolve allegations of misconduct The Bank’s expectations for your corporate compliance program The intersection of the FCPA and World Bank sanctions The perspective of the World Bank’s Integrity Vice Presidency on what companies can do to mitigate the risk of being sanctioned Moderator: F. Joseph Warin—Co-Chair of Gibson Dunn’s White Collar Defense and Investigations practice and former Assistant United States Attorney in Washington, D.C. Mr. Warin was named 2014 Investigations Lawyer of the Year by Who’s Who Legal, and has been ranked as a leading FCPA, white collar criminal defense, securities compliance and enforcement attorney by 2013 Chambers USA: America’s Leading Lawyers for Business, 2006 – 2013 Best Lawyers in America, and a White Collar Law MVP by Law360. Mr. Warin’s areas of expertise include white collar crime and securities enforcement, including Foreign Corrupt Practices Act investigations, World Bank investigations, False Claims Act cases, special committee representations, compliance counseling, and complex civil litigation. He has counseled numerous companies regarding World Bank investigations, and is currently serving as World Bank post-settlement counsel to several companies. Panelists: Mamta Kaushal—Advisor to the Director of Operations, The World Bank’s Office of the Integrity Vice Presidency (INT). On the Director’s behalf, Ms. Kaushal oversees INT’s process of settling cases with companies that seek alternate resolution to matters that would otherwise go through the Bank’s full sanctions proceedings process. Ms. Kaushal also manages INT’s referral process, through which the Bank engages with national authorities on cases of potential or mutual interest. In addition, Ms. Kaushal handles various policy and investigative issues on the Director’s behalf as they arise, both within the World Bank Group and with external partners. Prior to this position, Ms. Kaushal worked as a Senior Litigation Specialist within INT’s Special Litigation Unit, providing legal guidance to investigative teams during investigations, preparing pleadings for cases presented in World Bank sanctions proceedings and arguing cases before the World Bank’s Sanctions Board. Michael S. Diamant—Partner in Gibson Dunn’s Washington, D.C. office with expertise in internal investigations and corporate compliance, and broad white collar defense experience representing corporations and corporate executives facing criminal and regulatory charges. Mr. Diamant was named one of the “world’s leading investigations lawyers under the age of 40” in 2014 by Global Investigations Review. He has substantive expertise with the U.S. Foreign Corrupt Practices Act (“FCPA”), and extensive World Bank enforcement experience, working on behalf of clients under investigation by the World Bank Integrity Vice Presidency and assisting companies already subject to World Bank sanctions. Recent engagements have included negotiating resolutions with the World Bank and aiding clients in myriad post-settlement interactions with the Bank. In addition to the World Bank Group matters, Mr. Diamant has worked on behalf of clients to deal with the enforcement functions of other multilateral development banks. Glenn T. Ware—Principal, International Anti-corruption, Corporate Intelligence and Strategic Threat Management with PricewaterhouseCoopers in Washington D.C. Mr. Ware is PwC’s foremost anti-corruption, governance and corporate intelligence expert and leads these practice areas for the firm. His clients include Fortune 100 companies, current and former heads of state and Nobel peace prize winners as well as international and nongovernmental organizations. He was previously with the World Bank as Chief Investigative Counselor. His practice focuses on anti-corruption and governance matters, corporate intelligence investigations, World Bank Sanctions, and managing the diverse threat spectrum confronting multinational actors in emerging markets.

April 29, 2014 |
European Parliament Adopts Broad New Compliance and Sustainability Reporting Requirements

On April 15, 2014, the European Parliament adopted the Directive on Disclosure of Non-Financial and Diversity Information by Certain Large Companies and Groups (the "Directive").[1] Pursuant to the Directive, covered companies will need to disclose information on their policies, risks, and results regarding sustainability issues, including environmental matters, social and employee-related concerns, respect for human rights, anti-corruption and bribery issues, and diversity on their boards of directors. The Directive is not self-executing, but will need to be implemented into national laws by the member states in order to become effective. It also requires prior approval by the European Union’s member states in the European Council.        I.            Which Companies Are Covered? The new rules will apply (i) to companies with more than 500 employees and exceeding either a balance sheet total of EUR 20 million or a net turnover of EUR 40 million, (ii) to parent companies required to consolidate (pursuant to European Union rules) companies that together have more than 500 employees and exceed either a balance sheet total of EUR 20 million or a net turnover of EUR 40 million, and (iii) to companies whose securities are admitted to trading on a regulated market. In doing so, it will affect approx. 6,000 companies and groups across the European Union. Because the Directive requires the disclosure to be as provided by the local legislations of European Union member states, the rules do not require the information to be included in the annual report that a US company would file in the US (for instance, with the SEC).     II.            What Information Needs to Be Disclosed and How? The Directive does not mandate detailed reports but requires companies to disclose in concise fashion information regarding the development, performance, position, and impact of relevant activity in specific areas. In particular, affected companies will be: required to report on environmental, social- and employee-related, human rights, and anti-corruption and bribery matters; required to describe their business model, outcomes and risks of the policies on the above topics, and the diversity policy with regard to management and supervisory bodies; and encouraged to rely on recognized frameworks such as the Global Reporting Initiative’s (GRI) Sustainability Reporting Guidelines, the United Nations Global Compact (UNGC), the United Nations Guiding Principles on Business and Human Rights (UNGP), the Organisation for Economic Co-operation and Development’s (OECD) Guidelines for Multinational Enterprises, the International Organization for Standardization’s ISO 26000 Standard for Social Responsibility and the International Labour Organization’s (ILO) Tripartite Declaration. Disclosures may be provided at group level, rather than by each individual affiliate within a group. Companies may disclose the required information in the way that they consider most useful, for instance in their annual reports or in a separate report.  III.            What Are the Goals and Background of the Directive? In general, the stated objective of the Directive is to require reporting that aims to enhance corporate governance and corporate social responsibility. It seeks to improve European companies’ transparency and performance on sustainability matters — e.g., environmental and social matters. According to the European Commission, companies that publish information on their financial and non-financial performances take a longer-term perspective in their decision-making, often have lower financing costs, attract and retain talented employees, and ultimately are more successful. Current legislation, in particular directive 2013/34/EU of June 26, 2013, on the Annual Financial Statements, Consolidated Financial Statements and Related Reports of Certain Types of Undertakings[2], already addresses the disclosure of non-financial information. However, the requirements are applied in different ways in different member states, and thus the Directive seeks to foster enhanced disclosure with greater uniformity in application of the requirements.   IV.            When Will the Directive Become Effective, and What Additional Rules Are Expected to Follow? To become effective, the Directive must be adopted jointly by the European Parliament and by the member states in the European Council. Following the adoption by the European Parliament on April 15, 2014, the European Council is expected to adopt the Directive formally within the coming weeks. The member states will then need to implement the Directive into their national laws. The Directive provides for the European Commission to develop guidelines, after it becomes effective, to facilitate the disclosure of non-financial information by companies, taking into account current best practice, international developments, and related initiatives by the European Union.     V.            Current Legal Situation in Selected European Countries Regarding Corporate Social Responsibility Reporting           1)      France In France, currently boards of publicly traded French limited liability companies (sociétés anonymes and sociétés en commandite par actions) already must disclose information at the shareholders’ annual meeting, regarding the following social and environmental activities: employee-related matters, such as information procedures regarding the social dialogue with employees, including consultations and negotiations, training programs, diversity, safety, and health; and environmental matters, such as the sustainable use of natural resources and effectiveness in preventing pollution and climate change.[3] These disclosure requirements also apply to non-publicly traded companies with, cumulatively, annual revenues exceeding EUR 100 million and with more than 500 employees.[4] An independent committee of the board must review the report before its issuance and note whether it contains all required information. The French government must report on the implementation of the disclosure requirements to the French Parliament every three years. The report must indicate the actions necessary to develop and encourage French companies’ social and environmental responsibility in France and internationally.           2)      Germany In Germany, currently there are few corporate reporting requirements with respect to non-financial information. For instance, certain private and employee pension schemes must disclose whether they incorporate ethical, ecological, and social consideration in their investment policies.[5] Furthermore, large German companies[6] are required to report on non-financial areas, such as employee and environmental matters that materially affect the company.[7]  Additionally, the German Sustainability Code serves as a vehicle to facilitate voluntary reporting on corporate social responsibility activities by collecting in a database the efforts of German companies to achieve sustainability.[8] Companies of any size and legal form are encouraged to disclose information on their environmental, social, and corporate governance performance and to furnish a respective declaration of conformity. The German Sustainability Code is based on international principles such as UNGC, the OECD Guidelines for Multinational Enterprises, the ISO 26000 Standard for Social Responsibility and the reporting standards of the Global Reporting Initiative and the European Federation of Financial Analysts Societies (EFFAS). In practice, many large German companies voluntarily comply with the reporting standard of the German Sustainability Code and publish corporate social responsibility reports together with their annual reports. Furthermore, the German Corporate Governance Code presents essential statutory regulations for the management and supervision of German listed companies and contains internationally and nationally recognized standards for good and responsible governance. Although the code does not refer directly to corporate social responsibility, it aims to make the German corporate governance system transparent and understandable and to promote the trust of international and national investors, customers, employees and the general public in the management and supervision of listed German stock corporations.[9]           3)      UK The UK Government views corporate social responsibility as the voluntary actions that businesses can take, over and above compliance with minimum legal requirements, to address both their own competitive interests and the interests of wider society. The relevant body of law and regulation in the UK sets out certain reporting obligations which apply to quoted companies and premium listed companies. Although no part of the UK Corporate Governance Code specifically addresses corporate social responsibility, the Corporate Governance Code touches on the need for the board to "set the company’s values and standards and ensure that its obligations to its shareholders and others are understood and met".[10] Furthermore, the Turnbull Guidance annexed to the Corporate Governance Code makes clear that enterprise risk assessment should extend to "health, safety and environmental, reputation, and business probity issues". UK corporate legislation touches on corporate social responsibility in other ways as well. The Companies Act 2006 requires all directors to consider the impact of the company’s operations on the community and the environment when fulfilling their duty to promote the success of the company.[11]  The Companies Act 2006 also requires that quoted companies produce a business review as part of their directors’ report that includes information about environmental matters, employees and social and community issues, including information about any policies of the company regarding those matters and the effectiveness of those policies.[12] Furthermore the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013, which came into force on October 1, 2013, introduces an obligation for the directors of a company to prepare a standalone strategic report for each financial year. This report must include a fair review of the company’s business and to the extent necessary for an understanding of the development, performance or position of the company’s business, an analysis using key performance indicators including information relating to environmental and employee matters. Quoted companies also must make certain disclosures regarding greenhouse gas emissions in the directors’ report—but only to the extent that it is practical for the company to obtain the requisite information. Additionally, a significant number of investor representative groups have updated their guidelines to make specific and detailed reference to corporate social responsibility matters.      [1]   http://ec.europa.eu/internal_market/accounting/non-financial_reporting/index_en.htm     [2]   http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2013:182:0019:0076:EN:PDF     [3]   Law n° 2001-420 on New Economic Regulations of March 25, 2001 as amended by the law n° 2010-788 of July 12, 2010 on the National Commitment for the Environment; Decree n° 2012-557 of April 24, 2012 on Social and Environnemental Transparency Obligations of Companies    [4]   Article L. 225-102-1 of the French Commercial Code    [5]   Section 115 para. 4 of the German Insurance Supervision Act    [6]   In principle, a German company is defined as large two of the following three criteria apply: (i) annual revenues exceeding EUR 38.5 million, (ii) balance sheet total exceeding EUR 19.25 million, (iii) more than 250 employees, Section 267 para. 3 of the German Commercial Code    [7]   Section 264 in connection with Section 289 para. 3 of the German Commercial Code    [8]   http://www.deutscher-nachhaltigkeitskodex.de/en/home.html     [9]   See Foreword to the German Corporate Governance Code (as amended on May 13, 2013)   [10]   See Supporting Principles to A.1 in the UK Corporate Governance Code   [11]   Section 172 of the Companies Act 2006   [12]   Section 417 of the Companies Act 2006     Gibson Dunn lawyers are available to assist in addressing any questions you may have regarding these issues.  Please contact the Gibson Dunn lawyer with whom you usually work, or any of the following: United States:F. Joseph Warin – Washington, D.C. (+1 202-887-3609, fwarin@gibsondunn.com)Michael S. Diamant – Washington, D.C. (+1 202-887-3604, mdiamant@gibsondunn.com)Michael J. Scanlon – Washington, D.C. (+1 202-887-3668, mscanlon@gibsondunn.com) Europe:Jeff Roberts – London (+44 20 7071 4291, jroberts@gibsondunn.com)Benno Schwarz – Munich (+49 89 189 33-110, bschwarz@gibsondunn.com)Mark Zimmer – Munich (+49 89 189 33-130, mzimmer@gibsondunn.com)Bernard Grinspan – Paris (+33 1 56 43 13 00, bgrinspan@gibsondunn.com)Benoît Fleury – Paris (+33 1 56 43 13 00, bfleury@gibsondunn.com)   © 2014 Gibson, Dunn & Crutcher LLP Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

March 26, 2014 |
Webcast – Game Changers: Chevron v. Steven Donziger, et. al

​"The Case of the Century" The American Lawyer Join Gibson Dunn for a 90-minute presentation including counsel for Chevron in its recent RICO trial in the Southern District of New York, Reed Brodsky and Annie Champion, in which they tell you everything you need to know about the RICO verdict and how Chevron scored a victory for the rule of law by going on the offensive against a fraudulent foreign judgment.     Panelists: Reed Brodsky—a partner in the New York office of Gibson, Dunn & Crutcher.  He is a member of the Firm’s Litigation, Crisis Management, Securities Enforcement, and White Collar Defense and Investigations Groups.  Mr. Brodsky is a nationally-recognized trial lawyer and litigator best known for his success as lead trial counsel in two of the most high-profile white collar criminal cases in recent memory, United States v. Raj Rajaratnam in 2011, and United States v. Rajat Gupta in 2012.  Before recently joining Gibson Dunn, Mr. Brodsky spent eight years serving as an Assistant United States Attorney in the United States Attorney’s Office for the Southern District of New York.  For more than 6 of those years, he was a member of the Securities and Commodities Fraud Task Force.  Mr. Brodsky’s areas of expertise include trial work, white collar crime, securities enforcement proceedings, corporate internal investigations, compliance counseling, and complex civil litigation.  He has extensive experience representing institutions, hedge funds, issuers of securities, board committees, and individuals in connection with investigations, litigation, and SEC enforcement proceedings under the federal securities laws.  He is a leading national expert on insider trading investigations after successfully prosecuting with others more than 50 individuals for insider trading crimes; using wiretaps in an insider trading trial for the first time in U.S. history; prosecuting the first matchmaking insider trading case in U.S. history; and authoring the first federal wiretaps on a conference line in U.S. history.  Mr. Brodsky has received national recognition and many awards for his achievements and litigation skills; including the Attorney General’s Award for Distinguished Service, in 2012, and the Executive Office of U.S. Attorney’s Director’s Award for Superior Performance by a Litigative Team, in 2013.   Anne Champion – an associate in the New York office of Gibson, Dunn & Crutcher.  She is a member of the Firm’s Transnational Litigation Practice and Intellectual Property Practice Groups.  Ms. Champion has played a lead role in a wide range of litigation matters.  She earned her Bachelor of Science in physics with distinction from the University of Iowa and received the James A. Van Allen and the Myrtle K. Meier awards for excellence in physics.  She earned her Juris Doctor, summa cum laude, from George Washington University School of Law, where she was the recipient of the Raymond F. Hossfeld Merit Scholarship.  She served as an articles editor for The George Washington Law Review and published her casenote, Another Brick in the Wall: United States v. Samuel and the Lower Courts’ Narrow Reading of Apprendi v. New Jersey Before Blakely v. Washington, 72 Geo. Wash. L. Rev. 1004 (2004).  Upon graduation, she was awarded the Willard Waddington-Gatchell prize for academic excellence and the John F. Evans prize for outstanding achievement in the clinical law program, D.C. Law Students in Court, and was elected to the Order of the Coif.  Following law school, Ms. Champion clerked for the Honorable Max Rosenn on the United States Court of Appeals for the Third Circuit.

March 10, 2014 |
Court of Appeal Affirms Order Vacating Multi-Million Dollar Judgment Against Dole Food Company and Dismissing Case Due to Plaintiffs’ Attorney-Driven Fraud

On Friday, March 7, 2014, the California Court of Appeal in Los Angeles unanimously affirmed dismissal of a case against Gibson Dunn client Dole Food Company as a "fraud on the court" perpetrated by U.S. and Nicaraguan plaintiffs’ lawyers.  The appeal affirmed a trial court ruling from the Honorable Victoria Chaney in Tellez v. Dole Food Company, Los Angeles Superior Court, Case No. BC312852, where Judge Chaney found that U.S. and Nicaraguan plaintiffs’ lawyers had "coached their clients to lie about working on banana farms, forged work certificates to create the appearance that their clients had worked on Dole-contracted farms, and faked lab results" as part of a scheme to obtain the judgment against Dole.  In the 25-page appellate decision, captioned Rojas Laguna v. Dole Food Company, Case No. BC233497, the Court of Appeal found no "valid ground" to disturb Judge Chaney’s ruling "that plaintiffs and their counsel committed a fraud on the court by presenting false evidence and testimony." Tellez originally went to trial in 2007 and resulted in a multi-million dollar verdict against Dole, in favor of Nicaraguan plaintiffs claiming injuries from pesticide exposure on Dole-contracted farms in the late 1970s.  The U.S. and Nicaraguan plaintiffs’ lawyers handling the case pitched it as a watershed win for U.S. plaintiffs’ lawyers, who brought cases in the United States and Nicaragua and obtained billions in Nicaraguan judgments.  It was meant to open the floodgates to additional verdicts and suits. Friday’s decision from the Court of Appeal was the culmination of years of effort by Dole and Gibson Dunn to have the Tellez proceedings re-opened and dismissed for plaintiff fraud, based on a rarely used procedure known as a petition for writ of error coram vobis.  Shortly after the Tellez judgment, Dole exposed evidence in the related case Mejia v. Dole Food Company, Los Angeles Superior Court, Case No. BC340049, showing that the Tellez claims resulted from what the court found to be a wide-reaching fraudulent scheme perpetrated by U.S. and Nicaraguan lawyers.  Based on this evidence from Mejia–which, according to the trial court, showed a "heinous conspiracy" "to defraud th[e] court, to extort money from the defendants, and to defraud the defendants"–Dole successfully petitioned the Court of Appeal and the trial court to re-open the Tellez proceedings, after final judgment and while the case was pending appeal.  This petition paved the way for a year-long evidentiary process, where, as the recent decision of the Court of Appeal recounts, Dole showed by clear and convincing evidence that the Tellez plaintiffs and their counsel perpetrated fraud on the court by: "[i] recruiting persons who had never worked on banana farms as would be plaintiffs, [ii] coaching plaintiffs to lie about their work on banana farms, [iii] submitting false work certificates, [iv] falsifying sterility by submitting fraudulent laboratory reports and concealing children fathered by plaintiffs, and [v] interfering with witnesses and investigators by threats, intimidation, and tampering." In affirming these findings, the Court of Appeal held that the Tellez plaintiffs "raise no sufficiency of the evidence challenge with regard to the relevant findings in this case that they too committed a fraud on the court by submitting false testimony, fraudulent declarations and work certificates, and fraudulent laboratory reports as part of the fraudulent scheme orchestrated by their attorneys."  The Court also held that it was "within the exclusive province of the trial court" to determine the credibility of "John Doe" witnesses, who had testified under a protective order in Mejia, and that the use of a protective order "did not violate plaintiffs’ due process right to a fair trial" but instead "functioned as an adequate and appropriate safeguard to the integrity of the proceedings."  Finally, the Court of Appeal held that Dole met the legal requirements for the "drastic remedy" of relief from a final judgment based on a petition of writ of error coram vobis.  *          *          * The decision in Rojas Laguna v. Dole Food Company represents a major victory for Dole.  It is also a significant victory for the rule of law.       Gibson, Dunn & Crutcher’s Transnational Litigation Practice Group lawyers are available to assist in addressing any questions you may have regarding these areas.  Please contact any member of the Gibson Dunn team, the Gibson Dunn lawyer with whom you usually work, or the co-chairs of the firm’s Transnational Litigation Practice Group: Theodore J. Boutrous, Jr. – Los Angeles (+1 213-229-7000, tboutrous@gibsondunn.com)Scott A. Edelman – Los Angeles (+1 310-557-8061, sedelman@gibsondunn.com)Andrea E. Neuman – New York (+1 212-351-3883, aneuman@gibsondunn.com)William E. Thomson – Los Angeles (+1 213-229-7891, wthomson@gibsondunn.com) © 2014 Gibson, Dunn & Crutcher LLP Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

March 5, 2014 |
Chevron Wins Major Civil RICO Trial Victory Against Purveyors of Corrupt $9.2 Billion Ecuadorian Judgment

On March 4, 2014, Judge Lewis A. Kaplan of the United States District Court for the Southern District of New York entered judgment for plaintiff Chevron in Chevron Corp. v. Donziger et al., Case No. 11-cv-0691.  The court found that the U.S. lawyer who masterminded a $9.2 billion judgment against the company in Ecuador did so "by corrupt means," and in the process violated U.S. federal laws prohibiting attempted extortion, wire fraud, money laundering, witness tampering, and obstruction of justice, as well as the Foreign Corrupt Practices Act.  The court entered judgment for Chevron and imposed equitable relief designed to ensure that "the defendants here may not be allowed to benefit from [the Ecuadorian judgment] in any way."  Calling the case "extraordinary" and "includ[ing] things that normally come only out of Hollywood," the court’s 485-page opinion, which is available here, detailed the evidence against U.S. plaintiff’s lawyer Steven Donziger and his team, finding that "[t]he wrongful actions of Donziger and his Ecuadorian legal team would be offensive to the laws of any nation that aspires to the rule of law, including Ecuador — and they knew it.  Indeed, one Ecuadorian legal team member, in a moment of panicky candor, admitted that if documents exposing just part of what they had done were to come to light, ‘apart from destroying the proceeding, all of us, your attorneys, might go to jail.’"  The court determined that Donziger and his team even "wrote the [Ecuadorian] court’s Judgment themselves and promised $500,000 to the Ecuadorian judge to rule in their favor and sign their judgment."  "If ever there were a case warranting equitable relief with respect to a judgment procured by fraud," the court concluded, "this is it." The decision follows a six-week trial and represents a major victory for Chevron in its multi-pronged response to the long-running purported environmental litigation emanating from Ecuador known as the Lago Agrio litigation.  Gibson Dunn represented Chevron in the closely watched case.  Chevron has long maintained that the proceedings in Ecuador were marred by fraud on the part of the plaintiffs’ lawyers, as well as corruption and collusion between the Lago Agrio plaintiffs ("LAPs"), the Ecuadorian court, and the Ecuadorian government.  As a consequence, Chevron sued the plaintiffs’ lawyers and other agents in the Southern District of New York under the federal RICO statute and other laws.  Yesterday’s decision vindicates Chevron’s claims of fraud and corruption and sends a powerful message to U.S. and other lawyers tempted to capitalize on the weaknesses of foreign judicial systems to attempt to extract payoffs from U.S. companies.  At the same time, it forcefully supports international efforts to promote the rule of law.  During the trial, Chevron presented overwhelming and virtually uncontested evidence that Donziger and his co-conspirators had procured the judgment through bribery and fraud, including forging expert reports, hiring Ecuadorian engineers to pose as "neutral" monitors to influence the Ecuadorian court, hiring consultants in the U.S. to ghostwrite the damages report of a purportedly neutral court-appointed "special master" (Richard Cabrera), and bribing the Ecuadorian judge who issued the decision (Nicolás Zambrano) to permit them to ghostwrite the decision in their favor.  Chevron’s evidence of the ghostwriting included verbatim quotations from the LAPs’ internal work product that appeared on dozens of pages of the judgment.  "These documents never were filed with the Lago Agrio court or made part of the official case record," the court noted, and "Defendants utterly failed to explain how or why their internal work product — their ‘fingerprints’ — show up in the Judgment."  Chevron also called as a witness former Ecuadorian judge Alberto Guerra, who testified that he had long served as Judge Zambrano’s paid ghostwriter, including in the case against Chevron.  Guerra produced bank deposit slips and other evidence of payments from the LAPs.  He also testified that he had served as a middle-man, conveying Judge Zambrano’s bribe solicitation to the LAPs, who accepted it, and then editing their draft of the judgment, which Judge Zambrano then issued as if it were his own.  Donziger called Judge Zambrano as a witness, who denied the bribery scheme but admitted that Judge Guerra had been his ghostwriter.  Chevron also presented evidence that when Chevron sought discovery from the LAPs’ attorneys and consultants in U.S. courts, Donziger and his co-conspirators engaged in a campaign of obstruction to prevent the truth from emerging, filing false affidavits in U.S. courts and tampering with witnesses.  Chevron also presented evidence that Donziger and his co-conspirators had engaged in an improper pressure campaign against Chevron, propagating numerous falsehoods based on their fabricated evidence in the press and to various state and federal agencies in an attempt to extort a settlement from Chevron.     In rendering its decision in favor of Chevron, the court noted that "[t]he transnational elements of the case make it sensitive and challenging," but concluded based on the extensive evidentiary record that Donziger was liable under RICO for operating a racketeering enterprise that committed numerous federal crimes, including: Extortion.  The court found that Donziger engaged in two categories of conduct to pressure Chevron to settle the Ecuadorian lawsuit:  corrupt conduct in the Ecuadorian lawsuit itself, and the mounting of a public pressure campaign against the company based on false statements to the media, to U.S. regulatory and prosecutorial agencies, and criminal prosecutions of Chevron lawyers in Ecuador. Obstruction of Justice and Witness Tampering.  The court found that Donziger committed various acts of obstruction of justice and witness tampering to prevent disclosure of the fraud in U.S. discovery proceedings, including filing a false declaration in the name of Donziger’s co-conspirator and Ecuadorian counsel for the LAPs, Pablo Fajardo, in at least 17 U.S. district courts:  "Donziger’s conduct with respect to the Fajardo Declaration was obstruction of justice, plain and simple."  The court also held that Donziger had engaged in witness tampering by attempting to influence the testimony of Mark Quarles, a former environmental consultant for the LAPs, in related litigation between Chevron and the Republic of Ecuador in the U.S.  The court found that "[a]lthough Donziger knew that the statements he sought to have Quarles make were false, he urged Quarles to adopt them to prevent exposure of the truth regarding Cabrera and to mislead the court.  Donziger’s effort to influence Quarles’s testimony constitutes witness tampering." The Travel Act and Foreign Corrupt Practices Act ("FCPA").  The court held that Donziger and his co-conspirators’ scheme to bribe Cabrera violated the Travel Act because Donziger used a facility of interstate or foreign commerce in furtherance of violations of the FCPA by payment of bribes to Cabrera.  The court found that "[a]ll of the circumstances — including the fact that a court-approved payment process existed but that the LAP team secretly paid Cabrera outside of that process, used a secret account to do so, worried in emails about whether any of the money should go through Yanza’s personal account even temporarily, and used code names as they did it — indicate that the secret payments were illegal or at least improper, that the LAP team knew that, and that they attempted to conceal their payments."  Wire Fraud and Money Laundering.  The court found that Donziger engaged "in a number of deceitful schemes" in order to extract payment from Chevron, "each of which was furthered by use of the wires."  The court also held that the record "contains persuasive evidence" of a number of money laundering offenses, including the solicitation of funding for use in making secret payments to Cabrera.   The court also held that the evidence showing that Donziger’s team had written the Ecuadorian judgment, not Judge Zambrano, was "overwhelming and unrefuted."  In support of this finding, the court noted that with respect to the overlap between the LAPs’ internal work product and the judgment, "[t]here is no plausible explanation for their presence in the Judgment except that whoever wrote the Judgment copied parts of them."  The court found that Judge Zambrano, who was unable to remember even the most significant aspects of the 188-page judgment that he claimed to have authored, was "a remarkably unpersuasive witness."  In addition, the court held that former judge Guerra’s testimony was credible, determining that Guerra "told the truth regarding the bribe and the essential fact as to who wrote the Judgment. The court is convinced that the LAPs bribed Zambrano and wrote the Judgment in their favor."   The court rejected defendants’ argument that an adverse judgment in the RICO case was barred by collateral estoppel because the Ecuadorian court had purportedly examined the conduct and not found it to constitute fraud.  Defendants had previously sought to withdraw that defense in order to avoid adverse findings, but the court rejected this, finding it "disingenuous" given their reliance on the decisions of the Ecuadorian courts throughout the RICO litigation and at trial.  The court also rejected Defendants’ arguments that the ensuing Ecuadorian appellate decisions somehow "broke the chain of causation" between the fraud in the Lago Agrio court and Chevron’s injuries, noting that those courts had expressly declined to reach the RICO claims.  The court found that although it was "far from eager to pass judgment as to the fairness of the judicial system of another country . . . of course [it] is obliged to do so," and that "[t]here [was] abundant evidence that, at the time the Ecuadorian courts’ decisions in the Lago Agrio case were rendered, the judicial system was not fair or impartial and did not comport with the requirements of due process," an independent basis for its ruling the Ecuadorian judgment and the appellate decisions could not be recognized or enforced in the United States or be used to whitewash defendants’ fraudulent conduct.  The court thus entered injunctive relief barring defendants from profiting in any way from the Ecuadorian judgment, ordering them to transfer any assets obtained thus far based on the judgment to Chevron, and prohibiting them from "monetizing" the judgment–such as by selling portions of it to investors–or seeking to enforce it in the United States.  In response to defendants’ claims that such relief is precluded by considerations of international comity, the court noted that "[c]omity and respect for other nations are important.  But comity does not command blind acquiescence in injustice, least of all acquiescence within the bounds of our own nation.  Courts of equity long have granted relief against fraudulent judgments entered in other states and, though less frequently, other countries. Moreover, the United States has important interests here.  The misconduct at issue was planned, supervised, financed and executed in important (but not all) respects by Americans in the United States in order to extract money from a U.S. victim. . . ."  The defendants say they will appeal the court’s ruling.  *          *          * The decision in Chevron Corp. v. Donziger represents a major victory for Chevron.  It is also a significant victory for the rule of law.  As the court aptly stated, "Justice is not served by inflicting injustice.  The ends do not justify the means.  There is no ‘Robin Hood’ defense to illegal and wrongful conduct.  And the defendants’ ‘this-is-the-way-it-is-done-in-Ecuador’ excuses — actually a remarkable insult to the people of Ecuador — do not help them."        Gibson, Dunn & Crutcher’s Transnational Litigation Practice Group lawyers are available to assist in addressing any questions you may have regarding these areas.  Please contact any member of the Gibson Dunn team, the Gibson Dunn lawyer with whom you usually work, or Trial Counsel: Randy M. Mastro – New York (+1 212-351-3825, rmastro@gibsondunn.com) Andrea E. Neuman – New York (+1 212-351-3883, aneuman@gibsondunn.com) Please also feel free to contact the co-chairs of the firm’s Transnational Litigation Practice Group: Theodore J. Boutrous, Jr. – Los Angeles (+1 213-229-7000, tboutrous@gibsondunn.com)Scott A. Edelman – Los Angeles (+1 310-557-8061, sedelman@gibsondunn.com)Andrea E. Neuman – New York (+1 212-351-3883, aneuman@gibsondunn.com)William E. Thomson – Los Angeles (+1 213-229-7891, wthomson@gibsondunn.com) © 2014 Gibson, Dunn & Crutcher LLP Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

February 6, 2014 |
2013 Year-End Sanctions Update

The year 2013 saw vigorous enforcement activity in connection with the increasingly restrictive sanctions, particularly with respect to Iran.  Enforcement of the sanctions in the United States and the European Union has been accompanied by at times very significant penalties.  The flurry of activity towards the end of the year focused on multilateral efforts to address Iran’s nuclear program, leading to in questions concerning the prospects for eased Iran sanctions, the nature and duration of any relaxed sanctions, and possible legislative actions jeopardizing the efforts. This update reviews sanctions developments in the United States, European Union and the United Kingdom in 2013 and assesses what the experiences in 2013 suggest about how business practices might evolve to adapt to current sanctions as well as the potential for easing of the Iran sanctions. U.S. SANCTIONS I.    Legislation A.    Iran Freedom and Counter-Proliferation Act of 2012 (IFCA) On January 2, 2013, President Obama signed into law the Iran Freedom and Counter-Proliferation Act of 2012 as a subtitle in the National Defense Authorization Act for Fiscal Year 2013.[1]  As set forth below, the IFCA expands the targets for U.S. sanctions on industries that are important to Iran’s economy.  The sanctions also target the provision of certain goods and services to Iran.  The IFCA expands the CISADA-style sanctions framework for foreign financial institutions. Under the IFCA, five or more Iran Sanctions Act sanctions are to be applied to sanctioned persons.  In addition to blocking (including blocking of principal executive officers of a sanctioned entity), the available sanctions include prohibitions on:  Export assistance from the Export-Import Bank; export licenses; U.S. bank loans exceeding $10 million in any 12-month period; designation as a primary dealer in U.S. Government (USG) debt instruments or service as a repository of USG funds if the sanctioned entity is a financial institution; U.S. government procurement contracts; foreign exchange transactions subject to U.S. jurisdiction; financial transactions subject to U.S. jurisdiction; investment in equity or debt; and entry into the United States by corporate officers.  These prohibitions also may be applied to corporate officers of sanctioned entities. The sanctions target the energy sector, including persons or entities found to be "part of" Iran’s energy sector as well as persons or entities that knowingly provide certain support to those determined to be "part of" Iran’s energy sector, and those that knowingly sell, supply, or transfer to or from Iran significant goods or services used in connection with Iran’s energy sector. The sanctions expand the scope of targeted industries by imposing sanctions in connection with Iran’s shipping and shipbuilding sectors, as well as Iran’s port operators.  Specifically, sanctions may be imposed on any person or company found to be "part of" Iran’s shipping or shipbuilding sectors, or to operate a port in Iran.  The sanctions also target those who provide certain types of support to those industries, or sell, supply or transfer to or from Iran significant goods or services used in connection with Iran’s shipping or shipbuilding sectors. In expanding U.S. sanction to metals and other minerals, the United States is targeting items that may be used for barter, swap or other means of exchange or transaction.  The sanctions also may be available if the items are used in connection with Iran’s energy, shipping or shipbuilding sectors, or in the nuclear, military or ballistic missile programs.  The sanctions may be applied to any person or company that sells, supplies, or transfers, directly or indirectly, to or from Iran any of the following: precious metal graphite (in certain applications) raw or semi-finished metals such as aluminum and steel (in certain applications) coal (in certain applications) software used for integrating industrial processes (in certain applications) The IFCA specifically targets those dealing with Iranians on the SDN List, authorizing sanctions on any person or company that knowingly provides certain support to any Iranian person included on the SDN List (other than non-designated Iranian financial institutions).  In addition, foreign financial institutions (FFIs) risk the loss of U.S. correspondent or payable-through accounts for knowingly facilitating a significant financial transaction on behalf of any Iranian person included on the SDN list (other than non-designated Iranian financial institutions). Under the IFCA, FFIs also risk the loss of U.S. correspondent or payable-through accounts for knowingly conducting or facilitating significant financial transactions for the sale, supply or transfer, directly or indirectly, to or from Iran of precious metals and other materials (if used in certain ways); or for the sale, supply, or transfer to or from Iran of significant goods or services used in connection with Iran’s energy, shipping and shipbuilding sectors. The IFCA expands the scope of U.S. sanctions in the financial sector by providing for sanctions on a person or company for knowingly providing underwriting services, insurance, or reinsurance for any activity with respect to Iran on which sanctions have been imposed under IFCA or any other provision of law relating to the imposition of sanctions with respect to Iran.  The IFCA incorporates waivers and exceptions to the prohibitions or sanctions.  Sales of agricultural commodities, food, medicine, or medical devices to Iran are excluded from consideration under the IFCA sanctions, as are certain natural gas transactions and the Shah Deniz natural gas pipeline.  Further, the Significant Reduction Exception[2] created by the NDAA for FY 2012 also applies to the IFCA sanctions.  If the country with primary jurisdiction over an FFI is found to have significantly reduced its imports of Iranian crude oil, the FFI will be excepted from the sanctions.[3] B.    H.R. 850 – Nuclear Iran Prevention Act of 2013 Congress considered a bill intended to further U.S. efforts to prevent Iran from acquiring nuclear weapons capability.  Introduced by Rep. Edward Royce (R-CA39) and last referred to the Senate Committee on Banking, Housing, and Urban Affairs on August 1, 2013, H.R. 850 would greatly expand the sanctions on Iran, functioning like a commercial trade embargo if fully executed.[4]  Additionally, the bill penalizes foreign companies and individuals that violate American sanctions by threatening such persons with restrictions on doing business with the United States.[5] Designation of the IRGC as a Foreign Terrorist Organization The proposed legislation directs the Secretary of State to determine whether Iran’s Islamic Revolutionary Guard Corps (IRGC) meets the criteria for designation as a foreign terrorist organization (FTO).[6]  If so, the bill directs the Secretary of State to designate the IRGC as an FTO.[7]  If not, the Secretary of State must report to Congress regarding any unmet criteria.[8]  Such a designation would make it illegal for any person in the U.S. or subject to U.S. jurisdiction to knowingly provide material support or resources[9] to the IRGC.[10] Sanctions The bill would also amend the Iran Threat Reduction and Syria Human Rights Act of 2012 (TRA) by authorizing the President to impose sanctions on a foreign person that knowingly conducts or facilitates any significant financial transaction with the Central Bank of Iran, or another Iranian financial institution subject to sanctions, for the purchase of goods or services by, from, or on behalf of a person in Iran.[11]  This provision excludes agricultural commodities, food, medicine, or medical devices.[12] In addition, the bill would amend the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA) to impose mandatory sanctions on financial institutions that facilitate significant transactions or provide significant financial services for a person that (1) is subject to human rights-related sanctions or (2) exports sensitive technology to Iran and is subject to the prohibition on procurement contracts.[13] The bill directs the President to impose sanctions on any FFI that knowingly facilitates a significant financial transaction on behalf of any person directly or indirectly owned or controlled by an Iranian person included on the SDN List.[14]  The bill would further limit the sanctions exception for petroleum transactions, requiring foreign nations to significantly reduce their volume of crude oil purchases from Iran and of Iranian origin to avoid the application of sanctions against their financial institutions which knowingly conduct or facilitate any significant financial transaction with the Central Bank of Iran or another Iranian financial institution already subject to sanctions.[15] Reporting on Sanctions The President must report to Congress periodically regarding the projected economic effects of international sanctions on Iran.[16]  Finally, the bill requires the Government Accountability Office to report to Congress regarding presidential implementation of specified sanctions on Iran.[17] C.    S. 1881 – Nuclear Weapons Free Iran Act of 2013[18] Introduced by Sen. Robert Menéndez (D-NJ) and last reported by Committee on December 20, 2013, S. 1881 would impose additional sanctions on Iran’s "strategic sectors" (i.e., its petroleum, construction, engineering, mining, and insurance industries), as well as on any other sectors the President designates as of strategic importance to Iran.[19]  The bill would also impose additional sanctions on foreign financial institutions facilitating transactions with certain Iranian banks, in particular transactions related to the "currency of a country other than the country with primary jurisdiction [over the foreign financial institution] with, for, or on behalf of the Central Bank of Iran" or designated Iranian financial institutions.[20]  The bill would expand sanctions on Iran’s oil industry by requiring that countries significantly reduce their purchases of Iranian petroleum—not just crude oil.[21]  Those countries which did not significantly reduce their purchases of Iranian petroleum would not be eligible for exceptions to certain sanctions.[22]  In addition, it would impose new sanctions on entities in Iran’s special and free economic zones, as well as in its strategic sectors.[23]  The bill would also impose sanctions on individuals who engage in activities for or on behalf of the Government of Iran that enable Iran to evade sanctions, individuals involved in the Government of Iran’s corrupt activities or the diversion of certain humanitarian goods and medicine, or senior officials of certain designated entities.[24]  The bill would also allow the President to impose restrictions on U.S. foreign assistance—including the provision of defense articles and services—to countries designated as Destinations of Diversion Concerns, if the President determined that such restrictions would prevent the diversion of certain goods or services to Iranian end-users or Iranian intermediaries.[25]   The bill would authorize the President to suspend the application of its sanctions for a 180-day period if Iran agreed to specific and verifiable measures to implement the recently completed interim agreement between the P5+1 and Iran (known as the Joint of Plan of Action), if he certified every 30 days that, inter alia, Iran is complying with the provisions of the Joint Plan of Action and is proactively engaged in negotiations towards a final agreement to terminate its illegal nuclear activities.[26]  Following this period, the President could renew the suspension for two additional periods of up to 30 days each if he provided certification.[27]  This suspension authority is designed to provide the Administration with time to successfully implement the Joint Plan of Action and negotiate a final agreement.  In addition, any sanctions suspended by the President pursuant to the Joint Plan of Action would be reinstated immediately if the President did not provide certification, Iran breached any of its commitments, or a final agreement was not reached.[28]  If a final agreement was reached, the President could suspend the imposition of sanctions under this bill for one year, and could renew that suspension for subsequent year-long periods by appropriate certification.[29]     II.    Executive Orders A.    Executive Order 13,645 On June 5, 2013, President Obama signed Executive Order 13,645, "Authorizing the Implementation of Certain Sanctions Set Forth in the Iran Freedom and Counter-Proliferation Act of 2012 and Additional Sanctions with Respect to Iran."[30]  The E.O. continues the tightening of controls on foreign financial institutions and persons by implementing the IFCA and installing new sanctions. The Executive Order builds on the IFCA, which targets the energy, shipping and shipbuilding sectors, by including new sanctions on persons doing business with the automotive sector, which is a "major revenue generator for Iran."[31]  Specifically, the E.O. authorizes sanctions against persons who are knowingly engaged, or are the owner or successor entity of a person who is so engaged, in significant transactions involving the "automotive sector of Iran," which encompasses "the manufacturing or assembling in Iran of light and heavy vehicles including passenger cars, trucks, buses, minibuses, pick-up trucks, and motorcycles, as well as original equipment manufacturing and after-market parts manufacturing relating to such vehicles."[32]  Although undefined, OFAC has indicated it will determine what qualifies as a "significant transaction" based on "broad factors" set out in the Iranian Financial Sanctions Regulations,[33] which afford considerable discretion. When a person falls violates within the provision, he is subject to any of the following sanctions:  denial of Export-Import Bank approval for any guarantee, insurance or extension of credit involving exports to the sanctioned person; agency refusal to issue licenses or grant permission to export under statutes requiring such approval; for financial institutions, denial of Federal Reserve Bank designation as a primary dealer of U.S. Government debt instruments or a prohibition against serving as a repository of U.S. Government funds; denial of government procurement contracts; denial of visas to corporate officers and controlling shareholders; or the application of any of these sanctions to a principal executive officer of the sanctioned person.[34]  In addition, a person found to violate the IFCA or the discussed automotive restrictions could face any of the following sanctions:  a prohibition on the issuance of loans worth more than $10 million in a 12-month period; a prohibition on foreign exchange transactions subject to U.S. jurisdiction in which the person has an interest; a prohibition on financial institutions transferring credits or payments involving the sanctioned person’s interest; a block of all the sanctioned person’s property and interests in property subject to U.S. jurisdiction; a prohibition on U.S. persons investing in the sanctioned person; a restriction or prohibition on imports of goods, technology, or services from the sanctioned person; or the imposition of any of these penalties on the executive officers of the sanctioned person.[35]  Also pursuant to the IFCA, the E.O. blocks the property or interest in property of any person deemed to have engaged in or materially supported the corruption or diversion of goods, or the misappropriation of proceeds from the sale of goods, intended for the people of Iran.[36] The E.O. includes two new sanctions targeted exclusively at foreign financial institutions.  The first restricts the maintenance of accounts and blocks the property of institutions that conduct or facilitate significant transactions tied to Iranian rials, or maintain significant funds or accounts outside of Iran that are denominated in the rial.  The second authorizes the Secretary of the Treasury to restrict the opening and use of accounts by institutions that conduct significant transactions on behalf of an SDN or in connection with the Iranian automotive sector.[37] The E.O. also extends the reach of existing sanctions by blocking the property of those that materially assist Iranians on the SDN list or persons whose property and interests in property are blocked under Executive Order 13,599, which targets the Government of Iran, the Central Bank of Iran, all Iranian financial institutions, and persons owned, controlled by, or acting on behalf of persons whose property is blocked.[38] Finally, the E.O. amends Executive Order 13,622 by clarifying that it extends not only to the purchase or acquisition of petroleum or petrochemical products from Iran, but also to the "sale, transport, or marketing" of such products.[39] B.    Executive Order 13,651 On August 6, 2013, President Obama signed Executive Order 13,651, "Prohibiting Certain Imports of Burmese Jadeite and Rubies,"[40] which prohibits the importation into the United States of any jadeite or rubies mined or extracted from Burma, and any articles of jewelry containing such gems.  While broader sanctions against Burma have been relaxed, the United States continues to be concerned with labor and human rights in specific sectors of the Burmese economy, notably in the jewelry and mining industries.  This Executive Order aims to address those concerns by reinstating prohibitions and restrictions on the importation of jadeite and rubies that were originally imposed by the Tom Lantos Block Burmese JADE (Junta’s Anti-Democratic Efforts) Act of 2008, but which lapsed following the Burmese Freedom and Democracy Act’s (BFDA) expiration on July 28, 2013.  The Executive Order also prohibits any transaction that evades or avoids, or has the purpose of evading or avoiding, any of the prohibitions on importing such goods. In addition, this Executive Order amends Executive Order 13,310, "Blocking Property of the Government of Burma and Prohibiting Certain Transactions,"[41] by revoking sections 3 and 8 of that Order, which prohibited the importation of any product of Burma and waived certain prohibitions if such products conflicted with specific international obligations.   III.    Significant OFAC REGULATIONS A.    Amendment to the Iranian Financial Sanctions Regulations, 31 C.F.R. part 561 On March 15, 2013, OFAC published a new rule with amendments to the Iranian Financial Sanctions Regulations (IFSR) implementing Sections 503 and 504 of the Iran Threat Reduction and Syria Human Rights Act of 2012 (TRA) and provisions of Executive Order 13,622.[42] Pursuant to the rule, agricultural commodities, in addition to food, medicine, and medical devices are exempt from NDAA sanctions,[43] which punish financial institutions that knowingly conduct or facilitate significant transactions with the Central Bank of Iran or an Iranian financial institution.  The regulations now treat private financial institutions and government-owned or -controlled institutions equally under the NDAA, except that central banks can only be sanctioned for conducting or facilitating petroleum-related transactions.[44] Pursuant to the TRA, OFAC also narrowed the "significant reduction exception," which provides a limited exemption from NDAA sanctions for countries that significantly reduce crude oil purchases from Iran.  The new regulation specifies that the exception only applies to bilateral trade between Iran and the exempted country, and that any funds payable as a result of the trade must be paid to citizens, nationals, or permanent residents of the exempted country, or entities organized under its jurisdiction.[45]  Furthermore, any funds owed to Iran due to trade under the exception can only be used to pay for exports to Iran originating from the same country or used to purchase an exempted item, such as food or medicine, from a third country.[46] The regulation also implements provisions of E.O. 13,622, which targets Iran’s petroleum exports.[47]  A foreign financial institution that knowingly conducts or facilitates a significant financial transaction with the National Iranian Oil Company or the Naftiran Intertrade Company, or for the purchase of petroleum or petrochemical products, will be barred from opening a correspondent or payable-through account with a U.S. financial institution.[48] Finally, OFAC issued an interpretation of what it means for goods or services to originate in a country.  Goods must be grown, produced, manufactured, extracted, processed or substantially transformed in the originating country, while services must either be performed in the originating country or performed in the export destination by a citizen, national, or permanent resident of the originating country who ordinarily resides there.[49] B.    Statements of Licensing Policy Related to the Telecommunications and Agricultural Sectors of Syria and Petroleum and Petroleum Products of Syrian Origin for the Benefit of the National Coalition of Syrian Revolutionary and Opposition Forces or Its Supporters On June 12, 2013, OFAC published Statements of Licensing Policy Related to the Telecommunications and Agricultural Sectors of Syria and Petroleum and Petroleum Products of Syrian Origin for the Benefit of the National Coalition of Syrian Revolutionary and Opposition Forces or Its Supporters.[50]  The Statements clarify OFAC’s licensing approach to requests for specific authorization for transactions involving Syria’s telecommunications and agricultural sectors, as well as for transactions related to the petroleum industry for the benefit of the National Coalition of Syrian Revolutionary and Opposition Forces.  Regarding OFAC’s licensing policy towards transactions involving Syria’s telecommunications and agricultural sectors, the Statements suggest that specific licenses will be issued on a case-by-case basis to ensure private persons in Syria better access to the Internet and to enable projects to enhance and strengthen the agricultural sector in a "food insecure country."  Such licenses will not authorize transactions or activities with the Government of Syria, or with persons blocked pursuant to a number of Executive Orders, however. In addition, regarding OFAC’s licensing policy towards transactions involving Syria’s petroleum or petroleum products for the benefit of the National Coalition of Syrian Revolutionary and Opposition Forces or its supporters, the Statements clarify that specific licenses will be issued on a case-by-case basis.  OFAC will authorize such transactions related to new investment, and the purchase, trade, export, import, or production of petroleum or petroleum products of Syrian origin if they benefit certain Syrian opposition forces.  Such licenses will not authorize transactions or activities with the Government of Syria, or with persons blocked pursuant to a number of Executive Orders. The Statements also note that specific licenses issued pursuant to this policy do not authorize any transaction by any part of 31 C.F.R. Chapter V or any Executive Order other than E.O. 13,582.[51] C.    Questions Related to the Issuance of Executive Order "Authorizing the Implementation of Certain Sanctions Set Forth in the Iran Freedom and Counter-Proliferation Act of 2012 and Additional Sanctions With Respect to Iran" and the Implementation of Certain Provisions of the Iran Freedom and Counter-Proliferation Act of 2012 On July 1, 2013, OFAC released additional guidance regarding the implementation of IFCA[52] and Executive Order 13,645.[53]  In an update to its FAQ, OFAC answered a number of questions related to the IFCA and the Executive Order, including how OFAC will interpret key terms, how the Executive Order relates to the IFCA, and what effects the legislation and the Order will have on sanctions relating to Iran’s energy, shipping, shipbuilding, and automotive sectors.[54]  Notably, the FAQ suggest that OFAC will rely on a number of factors when determining whether financial transactions are "significant," including but not limited to the size, number, frequency, complexity, commercial purpose, and impact of the transactions, as well as whether the transactions involve deceptive practices. In addition, the Frequently Asked Questions note that Executive Order 13,645 broadens the IFCA’s sanctions by allowing for the imposition of sanctions on persons that materially assist certain Iranian persons on the SDN list or whose property is blocked under Executive Order 13,599[55] or this Executive Order, and foreign financial institutions that knowingly conduct or facilitate a significant financial transaction on behalf of such persons.  The Frequently Asked Questions also make clear that the Executive Order authorizes new sanctions for significant transactions related to the purchase or sale of Iranian rials and derivative, swap, future, forward, or similar contracts whose value is based on the exchange rate of the Rial, as well as transactions related to Iran’s automobile sector. D.    Technical Amendments to Counter-Terrorism Sanctions Regulations Implemented by OFAC On June 27, 2013, OFAC published a Final Rule[56] amending the Global Terrorism Sanctions Regulations (GTSR),[57] the Terrorism Sanctions Regulations (TSR),[58] and the Foreign Terrorist Organizations Sanctions Regulations (FTOSR).[59]  The Rule amends the GTSR and the TSR to clarify provisions related to charitable donations and who has an interest in property, as well as amends the TSR to add a definition of the term "financial, material, or technological support."  In particular, the Rule clarifies that section 3 of Executive Order 12,947[60] and section 4 of Executive Order 13,224,[61] which relate to the prohibitions on making donations, apply to donations "by to, or for the benefit of," and not only "to" those persons whose property and interests in property are blocked pursuant to those Orders. The Rule further elaborates that a person whose property and interests in property are blocked pursuant to the GTSR, the TSR, or the FTOSR, has an interest in all property of an entity in which it owns, directly or indirectly, a 50% or greater interest.  The property and interests in property of that entity, therefore, are also blocked, and that entity is considered a person whose property and interests in property are blocked pursuant to the relevant sanctions program, regardless of whether that entity itself is listed or designated. In addition, the rule amends the TSR to define the term "financial, material, or technological support" as: [A]ny property, tangible or intangible, including but not limited to currency, financial instruments, securities, or any other transmission of value; weapons or related materiel; chemical or biological agents; explosives; false documentation or identification; communications equipment; computers; electronic or other devices or equipment; technologies; lodging; safe houses; facilities; vehicles or other means of transportation; or goods. This definition already appears in the GTSR, though it is not used in the FTOSR.  In addition to this definitional change, OFAC is revising the TSR to set at 180 days the maximum term of maturity for instruments in which funds in an interest-bearing account may be invested or held.  The previous maximum term was 90 days.   E.    Guidance on the Sale of Food, Agricultural Commodities, Medicine, and Medical Devices by Non-U.S. Persons to Iran On July 25, 2013, OFAC issued Guidance on the Sale of Food, Agricultural Commodities, Medicine, and Medical Devices by Non-U.S. Persons to Iran.[62]  This Guidance underscores that the U.S. sanctions regime broadly allows for the sale of food, medicine, and medical devices by U.S. and non-U.S. persons to Iran.  It also emphasizes that the financing or facilitation of such sales by non-U.S. persons does not trigger sanctions, as long as the transaction does not involve certain U.S.-designated persons (e.g., a designated Iranian bank) or prohibited conduct.  In addition, the Guidance clarifies that the conduct or facilitation of payments for such sales by foreign banks is not subject to U.S. sanctions where the payments originate from accounts of the Central Bank of Iran or from non-designated Iranian banks.  F.    Technical Updates Throughout 2013, OFAC provided a number of technical updates worth noting.  On August 8, OFAC announced that it was creating "spillover files" to capture any characters which exceeded the 1000-character limit in the SDN "remarks" field.[63]  OFAC announced that users of legacy files—which did not capture characters over the 1000 character limit—should review the data in the spillover files "and make business decisions about what data to include in their screening systems and what data to ignore."[64]  Such a review is important to ensure that users of legacy files do not unintentionally fail to detect potentially designated parties in certain transactions.  On December 3, 2013, OFAC announced that on or about March 3, 2014, it will cease issuing its SDN data files in the 32 bit-self extracting archive known as "SDALLW32.EXE."[65]  It will continue to provide and update the 32 bit .zip archive, "SDALL.ZIP."  In addition, on December 5, 2013, OFAC announced that on or about March 5, 2014, it will also cease issuing its Palestinian Legislative Council ("PLC") data files in the 31 and 16 bit self-extracting archives, "PLCDAT32.EXE" and "PLC_DAT.EXE."[66]  OFAC will continue to update the 32 bit .zip archive, "PLC_DAT.ZIP."  These updates may impact automated SDN and PLC download processes and businesses should ensure that they are receiving the most up-to-date information.        IV.    General Licenses A.    Iran 1.    General License D On May 30, 2013, OFAC released General License D,[67] under the Iranian Transactions and Sanctions Regulations.[68]  This License permits the direct or indirect export or reexport, from the United States or by U.S. persons, of certain fee-based personal communication services subject to the Export Administration Regulations (EAR).  These services include instant messaging, chat and email, social networking, photo and video sharing, web browsing, and blogging, as well as software necessary to enable such services.  The License also includes software and hardware incident to personal communications, such as mobile and satellite phones and operating systems, modems and wireless internet equipment, laptops, tablets, and privacy software.  The export or reexport of consumer Internet connectivity services and transmission facilities are also allowed by General License D.  United States banks, brokers, and securities dealers are permitted to process transactions authorized under this License, so long as they are consistent with federal regulations governing payments and dollar clearing transactions with Iran.[69] However, General License D does not authorize the direct or indirect export or reexport of any of the aforementioned services, software, or hardware if the exporter knows, or has reason to know, that they are intended for use by the Iranian government.  Likewise, they may not be exported to any person whose property or interests in property are blocked.  Finally, General License D does not authorize the export or reexport of commercial-grade Internet services, transmissions facilities, web-hosting services, or domain name registration services.  2.    Expansion of General License Concerning Medicine and Basic Medical Supplies On July 25, 2013, OFAC updated section 560.530 (a)(3) of the Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560, to add additional items to the List of Basic Medical Supplies referenced in General License 31 C.F.R. 560.530(a)(3).[70]  On July 25, OFAC also published a number of answers to Frequently Asked Questions related to this General License,[71] including whether it authorizes the export of all medical devices and whether it authorizes the export of listed items to all entities in Iran.  The FAQ update concludes that the General License only authorizes the export of the items included on the List of Basic Medical Supplies.  Further, medical supplies cannot be exported or reexported to persons whose property or interests in property are blocked under counter-proliferation, counter-terrorism, counter-narcotics, or other authorities administered by OFAC.  Exporters and reexporters engaging in activities pursuant to this General License are expected to undertake due diligence related to all transactions.  3.    General License E On September 10, 2013, OFAC issued General License E to support humanitarian activity with Iran.[72]  The License permits nongovernmental organizations (NGOs) to export or reexport services to or related to Iran in support of a number of not-for-profit activities.  Such activities include, among others, those related to humanitarian projects to meet basic human needs in Iran, including the provision of donated health-related services; operation of orphanages; provision of relief services related to natural disasters; those related to non-commercial reconstruction projects in response to natural disasters; those related to environmental and wildlife conservation projects in Iran; and those related to human rights and democracy building projects in Iran.  The transfer of funds in support of these activities by a single NGO cannot exceed $500,000, in the aggregate, over a 12-month period.  In addition, NGOs which engage in these activities pursuant to this General License must submit quarterly reports providing information about the types of services exported, the dollar amounts of any transfers to Iran, the beneficiaries of those transfers, and any involvement with the Government of Iran, Iranian persons, Iranian financial institutions, or Iranian NGOs.  The License does permit United States depository institutions to process transfers of funds in furtherance of the activities authorized by the General License, so long as the transfer is consistent with 31 C.F.R. § 560.516. The General License does not authorize the export or reexport of services to any person whose property and interests in property are blocked pursuant to any part of 31 C.F.R. Chapter V other than Part 560.  It also does not authorize any activities in furtherance of Iranian military or industrial infrastructure, or in connection with the Iranian energy, automobile, shipping, and shipbuilding sectors. 4.     General License F On September 10, 2013, OFAC also issued General License F,[73] which authorizes the importation and exportation of certain services in support of professional and amateur sporting activities and exchanges involving the United States and Iran.  This General License allows such importation and exportation for activities related to exhibition matches and events, the sponsorship of players, coaching, refereeing, and training.  The License also permits United States depository institutions to process transfers of funds in furtherance of the activities authorized by the General License, so long as the transfer is consistent with 31 C.F.R. § 560.516.  It does not, however, authorize any transaction by a U.S.-owned or controlled foreign entity otherwise prohibited by 31 C.F.R. § 560.215 if that transaction would be prohibited by any other part of Chapter V if engaged in by a U.S. person. B.    WMD Proliferators 1.    General License No. 7 In January 2013, OFAC issued and then revoked General License No. 7,[74] pursuant to the Weapons of Mass Destruction Proliferators Sanctions Regulations,[75] and the Iranian Transactions and Sanctions Regulations.[76]  General License No. 7 addressed transactions related to the seizure of the Iranian-flagged cargo ship MV Amina, which was detained in Sri Lanka in December after its owners defaulted on a payment to Germany’s DVB Bank SE.[77]  Transactions involving the Amina had previously been blocked in September of 2008.  OFAC issued General License No. 7 on January 9, permitting participation in transactions related to the arrest, detention and judicial sale of the Amina, including bidding on the vessel, financing its purchase, or providing services in furtherance of the detention or sale.  The License was set to expire on January 31, 2014.  However, on January 16, the Amina escaped Sri Lankan custody and fled into international waters, ultimately returning to Iran.[78]  Consequently, OFAC revoked General License No. 7 on January 19. 2.    General License No. 5C On October 30, 2013, OFAC issued General License No. 5C[79] under the Weapons of Mass Destruction Proliferators Sanctions Regulations[80] and the Iranian Transactions and Sanctions Regulations.[81]  General License No. 5C authorizes all transactions related to the arrest, detention, and judicial sale of the MV Dianthe, which was identified as blocked property on September 10, 2008 pursuant to Executive Order 13,382.[82]  These transactions include, among other things, bidding on the purchase of the vessel and providing financing, insurance, or funding in connection with its purchase.  This authorization will expire at 11:59pm, Eastern Standard Time, November 30, 2014.  The License does not authorize the provision of services, or any transfer of funds or other property, that would otherwise be prohibited by 31 C.F.R. Part V, including to any person whose property and interests in property are blocked.  Further, all property and interest in property related to the vessel that were previously blocked pursuant to Executive Order 13,382 or 31 C.F.R. Part 544 remain blocked.  The License also notes that, if the vessel is sold pursuant to judicial sale, the purchaser can provide OFAC with evidence demonstrating that the basis for the blocking is no longer applicable so as to expedite its removal from the SDN list.  3.    General License No. 8 On November 29, 2013, OFAC issued General License No. 8 under the Weapons of Mass Destruction Proliferators Sanctions Regulations and the Iranian Transactions and Sanctions Regulations.[83]  General License No. 8 authorizes all transactions related to the arrest, detention, and judicial sale of the Amin Crude Oil Tanker, which was identified as blocked property pursuant to Executive Order 13,382[84] on July 12, 2012.  These transactions include, among other things, bidding on the purchase of the vessel and providing financing, insurance or funding in connection with its purchase.  This authorization will expire at 11:59pm, Eastern Standard Time, November 30, 2015.  The License does not authorize the provision of services, or any transfer of funds or other property, that would otherwise be prohibited by 31 C.F.R. Part V, including to any person whose property and interests in property are blocked.  Further, all property and interest in property related to the vessel that were previously blocked pursuant to Executive Order 13,382 or 31 C.F.R. Part 544 remain blocked.  The License also notes that, if the vessel is sold pursuant to judicial sale, the purchaser can provide OFAC with evidence demonstrating that the basis for the blocking is no longer applicable so as to expedite its removal from the SDN list.  C.    Burma As part of a general easing of sanctions on Burma, OFAC issued General License No. 19[85] of the Burmese Sanctions Regulations[86] on February 22, 2013.  This License authorizes all transactions involving Asia Green Development Bank, Ayeyarwady Bank, Myanma Economic Bank, and Myanma Investment and Commercial Bank.  However, this License does not cover any new investment[87] in Burmese resource development, even if the transaction is conducted with or through one of the aforementioned banks.  In addition, General License No. 19 does not authorize the provision of financial services in connection with security services to the Burmese Ministry of Defense, or any armed group, and does not authorize the importation of Burmese jade or rubies, or any jewelry containing those gems. D.    Syria 1.    General License No. 16 OFAC issued General License No. 16 on March 14, 2013, to allow increased financial support for the National Coalition of Syrian Revolutionary and Opposition Forces (the "Coalition").[88]  According to a Treasury spokesperson, this License allows U.S. individuals, companies, and financial institutions to contribute funds "for a wide range of activities, including reconstruction efforts and political organization."[89]  Any transfer of funds must be conducted through the Coalition’s office in Washington, D.C., using a licensed account at a U.S. financial institution.  The License does not permit the export, sale, or supply of any item listed on the United States Munitions List.[90]  Furthermore, the License does not authorize transactions with any Coalition group designated as a terrorist organization, such as al-Nusrah.[91] 2.    General License No. 11A On July 12, 2013, OFAC issued Syria General License No. 11A,[92] which replaces General License No. 11.  The new General License authorizes nongovernmental organizations to export or reexport services in support of particular activities to Syria that would otherwise be prohibited by section 2 of Executive Order 13,582.[93]  Such activities include those supporting humanitarian projects to meet basic human needs in Syria; those supporting democracy building in Syria; those supporting education in Syria; those supporting non-commercial development projects directly benefiting the Syrian people; and those supporting the preservation and protection of cultural heritage sites in Syria.  The General License authorizes certain U.S. financial institutions to process transfers of funds on behalf of U.S. or third country NGOs, provided that the transfer is not by, to, or through the Government of Syria or a person whose property is blocked pursuant to a number of Executive Orders.  It also authorizes NGOs to engage in transactions with the Government of Syria if they are necessary for the listed humanitarian activities, including, for example, the payments of taxes and fees.  The General License does not authorize the export or reexport of services or charitable donations to the Government of Syria or any other person blocked pursuant to a number of Executive Orders.   In addition, U.S. persons engaged in transactions related to activities supporting the preservation and protection of cultural heritage sites in Syria must submit quarterly reports providing information about the parties involved, the value of the transactions, the services provided, and the dates of the transactions.  E.    Sudan On April 15, 2013, OFAC issued General License No. 1[94] of the Sudanese Sanctions Regulations.[95]  This License authorizes several academic and professional exchanges between the United States and Sudan.  These include academic exchange programs between U.S. and Sudanese academic institutions, even those which would otherwise be considered part of the Government of Sudan, and student exchange programs for undergraduate or graduate academic credit.  The License also permits U.S. persons to provide teaching services in fields such as humanities, law, public health, and business at Sudanese academic institutions, as well as to conduct noncommercial academic research.  U.S. academic institutions may also recruit, hire, and employ teachers from Sudanese academic institutions, provide scholarships to Sudanese students to allow them to participate in academic exchange programs, and administer standardized tests such as the SAT, ACT, TOEFL, and LSAT in Sudan.  Likewise, U.S. financial institutions are permitted to process transfers of funds and student loan payments for Sudanese students pursuant to an academic exchange program.  Finally, General License No. 1 permits 501(c)(3) nonprofit organizations, as well as nonprofit legal and medical associations, research institutions, and academic programs, to provide not-for-profit "professional training seminars" on topics such as sustainability, education, health, and civics, as well as to conduct noncommercial research. However, it is important to note that General License No. 1 does not authorize the export of any goods, technology, or services requiring licensing by another federal agency.  These include items listed on the Commerce Control List (CCL), such as laptops, computers, cell phones, and other handheld devices.  Academic institutions may release certain computer software or devices to students, so long as it does not otherwise require a license and is ordinarily incident and necessary to the educational program.  In addition, technology and physical sciences are absent from the list of permissible disciplines for teaching services and professional training seminars. F.    Zimbabwe After the successful passage of Zimbabwe’s constitutional referendum in March 2013, which, among other provisions, limits the power of the presidency,[96] OFAC effectively lifted sanctions against two Zimbabwean banks by issuing General License No. 1 on April 24, 2013.[97]  The License permits transactions involving the Agricultural Development Bank of Zimbabwe and Infrastructure Development Bank of Zimbabwe, provided that the transactions do not also involve a party already blocked by sanctions.  More sanctions may be lifted in the future as part of an "action for action" strategy to promote democratic reform in Zimbabwe.[98] G.    Global Terrorism Sanctions (SDGT), Terrorism Sanctions (SDT), Foreign Terrorist Organization (FTO) Sanctions Regulations:  The Palestinian Authority In response to the announced resignation of Palestinian Authority Prime Minister Salam Fayyad, OFAC issued General License No. 7a, clarifying the definition of "Palestinian Authority."[99]  The term "Palestinian Authority," as stated in this License, has been expanded  to include "the Palestinian Authority government of President Mahmoud Abbas and Prime Minister Salam Fayyad, or any successor Prime Minister appointed by President Abbas, including all branches, ministries, offices, and agencies (independent or otherwise) thereof" (emphasis added).  This License does not change the substantive sanctions regulations involving the Palestinian Authority. V.    GOVERNMENT AGENCY GUIDANCE A.    Advisory:  Use of Exchange Houses and Trading Companies to Evade U.S. Economic Sanctions Against Iran On January 10, 2013, OFAC issued an advisory on the use of exchange houses and trading companies, alerting U.S. institutions to practices intended to circumvent U.S. and international economic sanctions concerning Iran.[100]  The advisory gave several examples of these evasion practices:  Omitting references to Iranian addresses; omitting the names of Iranian persons or entities in the originator or beneficiary fields; and transmitting funds from an exchange house or trading company without referencing the involvement of Iran or designated persons. OFAC also highlighted fact patterns that U.S. financial institutions might encounter. For example, A trading company attempts to send a payment through the United States on behalf of Company Z with an address in Iran.  The payment is stopped for review by the U.S. financial institution’s filter due to the Iranian address on the payment, and is ultimately blocked or rejected in accordance with U.S. sanctions.  The trading company later resends the funds in a payment of identical or similar value on behalf of Company Z, only this time the company’s address has been altered to reflect a non-sanctioned jurisdiction.[101] OFAC identified measures U.S. institutions can take to mitigate the risk of processing transactions designed to evade U.S. sanctions.[102]  Those measures include:  1) monitoring payments involving third-party exchange houses or trading companies that may be processing commercial transactions related to Iran; 2) conducting account and/or transaction reviews for individual exchange houses or trading companies that have repeatedly violated or attempted to violate U.S. sanctions against Iran; and 3) communicating with correspondents that maintain accounts for, or facilitate transactions on behalf of, third-country exchange houses or trading companies in order to request additional information and/or alert them to these practices. B.    Guidance:  Iran Threat Reduction and Syria Human Rights Act of 2012 On February 6, 2013, OFAC updated its FAQ to include a section dealing with Section 504 of the TRA, which expands the scope of sanctionable transactions with the Central Bank of Iran and designated Iranian financial institutions.[103]   Section 504 of the Act, which took effect on February 6, 2013, amends the NDAA in several ways.  Most notably, it narrows the NDAA’s significant reduction exception to (a) exempt from sanctions only transactions that conduct or facilitate bilateral trade in goods or services between the country granted the exception and Iran, and (b) require that funds owed to Iran as a result of the bilateral trade be credited to an account located in the country granted the exception and not be repatriated to Iran.[104] The OFAC FAQ page also addresses questions related to section 4 of the Executive Order that authorizes the implementation of certain sanctions set forth in the TRA. In particular, the Order prohibits foreign subsidiaries of U.S. entities from knowingly violating the Iranian Transactions Regulations, and imposes civil penalties on the U.S. parent company for any such violations. C.    Clarifying Guidance:  Humanitarian Assistance and Related Exports to Iranian People On February 6, 2013, OFAC published clarifying guidance on humanitarian assistance and related exports to Iranian people.[105]  The guidance "provides an overview of current policies with respect to humanitarian assistance and exports to the Iranian people for U.S. persons and financial institutions as well as for third-country financial institutions."[106]  Under U.S. law, the sale and export of nearly all types of food, medicine, and basic medical supplies to Iran are broadly authorized.  Some types of humanitarian exports may be authorized, as long as they meet specific OFAC licensing requirements.  By extension, financial institutions that process or facilitate such transactions are generally permitted to do so by U.S. law. The clarifying guidance is divided into two parts. In Part I, the clarifying guidance gives an overview of policies with respect to humanitarian assistance, remittances and exports to the Iranian people, and also provides guidance for license applications.[107] In Part II OFAC "provides guidance for those seeking to determine their eligibility to engage in activities already authorized by general license or that are exempt from sanctions."[108]  Part II further identifies specific regulations that U.S. persons should consult when considering certain authorized transactions. VI.    REPORTS A.    Trade Sanctions Reform and Export Enhancement Act:  4Q FY 2012 Between July 1 and September 30, 2012, OFAC received 423 licensing applications requesting authorization to export agricultural commodities, medicine, and medical devices to Iran and Sudan.  OFAC issued 495 licensing determinations (230 of which were received in the same quarter).  Of the 495 determinations, 321 licenses were issued, and of the 321 issued licenses, 295 involved products for Iran and 27 for Sudan. [109] B.    2012 Terrorist Assets Report On May 28, 2013, OFAC released the 2012 Annual Report on Assets in the United States of Terrorist Countries and International Program Designees.[110]  The purpose of the Report is to update Congress "concerning the nature and extent of assets held in the United States by terrorism-supporting countries and organizations engaged in international terrorism."[111]  As of December 31, 2012, "51 organizations or groups had been designated as [Foreign Terrorist Organizations (FTOs)] by the Department of State."[112]  These FTOs include 10 Middle Eastern terrorist organizations as well as terrorist organizations located in South America, Europe, Asia, and Africa.  As of December 31, 2012, blocked assets relating to international terrorist organizations totaled $21,826,293.[113] The Report further identifies and designates organizations inside the United States that are branches of, or have been determined to provide support to or be owned or controlled by, designated terrorist groups or individuals.[114]  Additionally, the Report identifies assets relating to state sponsors of terrorism. The states currently designated as sponsors of terrorism are:  Cuba, Iran, Sudan, and Syria.[115] VII.    DESIGNATIONS A.    List of Entities Sanctioned Under the Iran Sanctions Act List of persons sanctioned under the ISA, as amended by the Comprehensive Iran Sanctions Accountability, and Divestment Act (CISADA) and TRA, or under TRA is available at:  http://www.state.gov/e/eb/tfs/spi/iran/entities/index.htm.  There were seven designations in 2013: Bimeh Markazi-Central Insurance of Iran (Iran).[116]  Sanctions prohibit: procurement contracts with the USG; export assistance from the Export-Import Bank of the United States; financial transactions subject to U.S. jurisdiction; transactions with respect to property and interests in property subject to U.S. jurisdiction; issuance of visas to corporate officers of the sanctioned entity. Dimitris Cambis (Greek national).[117]  Sanctions prohibit:  procurement contracts with the USG; export assistance from the Export-Import Bank of the United States; financial transactions subject to U.S. jurisdiction; transactions with respect to property and interests in property subject to U.S. jurisdiction; foreign exchange transactions subject to U.S. jurisdiction. Ferland Company Limited (Cyprus and Ukraine).[118]  Sanctions prohibit:  financial transactions subject to U.S. jurisdiction; transactions with respect to property and interests in property subject to U.S. jurisdiction; foreign exchange transactions subject to U.S. jurisdiction; issuance of visas to corporate officers of the sanctioned entity; private U.S. bank loans exceeding $10 million any 12-month period. Impire Shipping (Greece).[119]  Sanctions prohibit:  procurement contracts with the USG; export assistance from the Export-Import Bank of the United States; financial transactions subject to U.S. jurisdiction; transactions with respect to property and interests in property subject to U.S. jurisdiction; issuance of visas to corporate officers of the sanctioned entity. Jam Petrochemical Company (Iran).[120]  Sanctions prohibit:  financial transactions subject to U.S. jurisdiction; transactions with respect to property and interests in property subject to U.S. jurisdiction; foreign exchange transactions subject to U.S. jurisdiction. Kish Protection and Indemnity (Iran).[121]  Sanctions prohibit:  procurement contracts with the USG; export assistance from the Export-Import Bank of the United States; financial transactions subject to U.S. jurisdiction; transactions with respect to property and interests in property subject to U.S. jurisdiction; issuance of visas to corporate officers of the sanctioned entity. Niksima Food and Beverage JLT (Dubai).[122]  Sanctions prohibit: financial transactions subject to U.S. jurisdiction; transactions with respect to property and interests in property subject to U.S. jurisdiction; foreign exchange transactions subject to U.S. jurisdiction. VIII.    Major OFAC Enforcement Actions 1.    Ellman International, Inc.[123] Ellman International, Inc. agreed to settle apparent violations of the Iranian Transactions and Sanctions Regulations[124] (ITSR), 31 C.F.R. part 560.  Under prior ownership and management, Ellman had exported medical equipment to Iran and purchased the services of a physician from approximately 2005 to 2008.  The transactions totaled $317,211 in value, in violation of § 560.204 and § 560.201 of the ITSR.  The base penalty was $426,000.  Upon acquisition of the company, Ellman’s new owners reported the violations to OFAC, but the submission was determined not to be a voluntary disclosure under OFAC Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, Appx. A.  OFAC noted the active involvement by senior management (under prior ownership); the absence of a sanctions compliance program; the likelihood that the transactions were eligible for OFAC licenses; and, substantial cooperation on the part of the new owners and management.  Ellman agreed to pay $191,700. 2.    Dal-Tech Devices, Inc.[125] OFAC alleged that Dal-Tech Devices, Inc. violated the ITSR by selling radio frequency measurement devices worth $3,226 to a firm in Austria with the knowledge that the items were intended for transport to Iran.  When the devices were returned, undelivered, from Austria, Dal-Tech sent the goods to Slovenia, from where they were shipped to Iran.  OFAC found the matter egregious.  The base penalty was $500,000.  The settlement coincides with a Deferred Prosecution Agreement with the United States Attorney’s Office for the District of Delaware.  Dal-Tech Devices has agreed to pay $10,000 to settle the violations.  The settlement amount reflects knowing and willful conduct by an employee; knowledge, or reason to know, on the part of prior management that the goods were destined for Iran; and the absence of prior OFAC enforcement actions. 3.    Offshore Marine Laboratories[126] Offshore Marine Laboratories (OML) allegedly violated the ITSR and Executive Order 13,382, "Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters," by exporting eight shipments of spare parts for offshore drilling rigs to the United Arab Emirates.  The shipments were intended to supply an offshore rig in Iranian waters and were sent between July 2007 and July 2008.  The rig owner and operator are located in Iran.  Five of the shipments occurred after the rig owner’s property and property interests were blocked under E.O. 13,382.  The base penalty was $167,000.  To settle the case, OML agreed to pay $97,695.  In establishing the settlement amount, OFAC considered the harm to the objectives of the U.S. sanctions program, as the transaction aided Iranian petroleum resources.  OFAC also noted that OML had:  no compliance program; no prior OFAC violations; provided substantial cooperation during the investigation; and taken the appropriate remedial measures. 4.    American Optisurgical, Inc.[127] OFAC alleged that American Optisurgical, Inc. (AOI) violated the ITSR and the Reporting, Procedures, and Penalties Regulations, 31 C.F.R. part 501 (RPPR) when it exported or attempted to export unlicensed medical goods and services to Iran or to a third party with knowledge or reason to know that the goods were intended for Iran.  Thirty-six such incidents are alleged to have occurred between 2005 and 2010.  American Optisurgical is also alleged to have failed to fully respond to two administrative subpoenas issued by OFAC in 2009.  The transactions were valued at approximately $202,765, the base penalty was $449,000 and AOI agreed to pay $404,100 to settle potential civil liability.  In reaching this agreement, OFAC considered a number of factors, including the willful or reckless conduct of AOI; the direct involvement of senior management; the active concealment of the violations by the company; and AOI’s continued exports notwithstanding receipt of OFAC administrative subpoenas.  Among the mitigating factors:  AOI had not previously been subject to an OFAC enforcement action; the exports likely could have been licensed by OFAC; and AOI agreed to toll the statute of limitations. 5.    Bank of Guam[128] The Bank of Guam allegedly twice violated the ITSR by processing wire transfers related to the delivery of furniture to Iran.  The Bank of Guam agreed to pay $27,000 to settle the violations.  As payment for delivery of furniture and other goods, the Bank of Guam originated a $2,265 wire transfer, on behalf of a customer, to a trading company in the United Arab Emirates.  The transfer initially was rejected by a U.S. financial institution because of the reference to Iran in the originator to beneficiary portion of the payment message.  The customer successfully made that wire transfer and one additional transfer after a Bank of Guam employee advised the customer to remove references to Iran in the payment message.  By originating the wire transfers, the Bank of Guam may have violated OFAC’s regulatory ban on engaging in transactions related to "goods, technology, or services for export, reexport, sale, or supply, directly or indirectly, to Iran or the Government of Iran."  31 C.F.R. § 560.206.  The bank did not voluntarily disclose the violations.  The base penalty was $20,000.  The settlement reflects an aggravation to the base penalty as a result of the recklessness of the bank’s staff in processing transfer notwithstanding the knowledge of the purpose of the payment, and in advising the customer to remove the reference to Iran from the payment detail.  OFAC also noted the lack of any other violations in the preceding five years. 6.    Tung Tai Group[129] The Tung Tai Group has agreed to pay $43,875 to settle alleged violations of the Cuban Assets Control Regulations, 31 C.F.R. part 515 (CACR).  In August 2010, Tung Tai entered into contracts to buy and sell scrap metal originating in Cuba.  Although the violation was not voluntarily disclosed by Tung Tai, the company has no history of OFAC regulations violations.  As a result, the settlement was reduced from the base penalty amount of $65,000. 7.    EGL, Inc.[130] EGL, Inc., now part of the CEVA Logistics group of companies (CEVA), is alleged to have violated both the CACR and the ITSR.  In violation of the ITSR, affiliates of EGL, which by then was part of CEVA, allegedly acted as the freight forwarder for ten shipments of supplies to an oil drilling rig located in Iranian coastal waters from August to October of 2008.  The rig was operated by Petropars, a company affiliated with the National Iranian Oil Company.  Separately, from 2005 to 2008, EGL’s foreign affiliates engaged in 280 transactions providing freight forwarding services for shipments to and from Cuba.  EGL has agreed to pay $139,650 to settle potential liability related to these events after it made a voluntary self-disclosure of the alleged CACR violations but did not disclose the alleged ITSR violations.  The agreed payment was reduced from a base penalty of $206,889 after OFAC’s consideration of EGL’s substantial cooperation.  The company agreed to toll the statute of limitations and produced responsive materials.  However, OFAC also noted that the transactions had resulted in significant harm to OFAC sanctions programs, and found that EGL had reason to know that the supply shipments were destined for a rig owned by an Iranian company. 8.    Maritech Commercial Inc.[131] OFAC alleged that Maritech Commercial, Inc. violated the Weapons of Mass Destruction Proliferators Sanctions Regulations by providing fuel inspection services on board five vessels affiliated with the Islamic Republic of Iran Shipping Lines (IRISL) between April 2009 and June 2010.  The vessels had been identified as blocked property and were put on OFAC’s list of Specially Designated Nationals and Blocked Persons.  The IRISL has been known to attempt to evade sanctions and had changed the names on four of the vessels in question to avoid detection, but Maritech Commercial failed to verify the ships’ identities through their unique International Maritime Organization (IMO) numbers.  At the time, Maritech Commercial did not screen serviced ships by their IMO numbers.  Maritech Commercial did not voluntarily disclose the violations.  OFAC concluded that the violations were non-egregious.  The base penalty was $32,000.  To settle potential civil liability, Maritech Commercial agreed to pay $20,800.  OFAC considered a number of factors in reaching the settlement:  OFAC found that the company acted recklessly; Maritime Commercial lacked a sanctions compliance program at the time of the alleged violations; the company had no history of prior OFAC violations; and Maritech was a small company. 9.    SAN Corporation[132] OFAC alleged that SAN Corporation violated the ITSR on or about September 30, 2007.  SAN allegedly sold nutritional supplements to an entity in Kuwait with knowledge that the supplements were intended for use in Iran.  The base penalty amount was $25,000.  SAN agreed to settle potential civil liability by paying $22,500.  In reaching the settlement, OFAC considered the following factors:  SAN acted recklessly when it sold the goods knowing that they were destined for Iran and notwithstanding notice from the Iranian end user of the need for an OFAC license.  Further, SAN did not fully cooperate with OFAC’s investigation.  OFAC also noted that SAN had no history of prior OFAC violations, and SAN could have sought a license under the Trade Sanctions Reform and Export Enhancement Act of 2000 to legally sell the goods. 10.    American Steamship Owners Mutual Protection and Indemnity Association[133] American Steamship Owners Mutual Protection and Indemnity Association (The American Club) is a mutual insurance association for merchant ship owners and charterers.  OFAC alleged that The American Club committed fifty-five violations in connection with three different regulation groups:  the CACR, the ITSR, and the Sudanese Sanctions Regulations (SSR).  The American Club allegedly processed three Protection and Indemnity (P&I) insurance claims totaling approximately $40,584 between January 2004 and June 2006 involving Cuba.  It processed eighteen P&I claims, issued six Letters of Undertaking/Guarantee, and issued one letter of indemnity as security or countersecurity for a Letter of Undertaking/Guarantee involving Sudan.  Those events took place between November 2003 and March 2007 and totaled approximately $686,000.  Finally, The American Club processed twenty-one P&I insurance claims, one Letter of Undertaking/Guarantee, and issued five letters of indemnity involving Iran and totaling approximately $488,000.  The total base penalty amount for all the alleged violations was $1,729,000.  The company agreed to settle potential civil liability with OFAC by paying $348,000. In determining the settlement amount, OFAC accounted for various circumstances of the alleged violations.  The American Club had actual knowledge or reason to know that some of the actions involved sanctioned countries, and the company is a sophisticated commercial enterprise.  OFAC found mitigating factors as well.  The American Club did not appear to act willfully or recklessly; it took remedial steps and cooperated with OFAC; the P&I claims and LOUs may have been licensable at the time of the transactions; and The American Club had had no other violations during the preceding five years. 11.    ATP Tours, Inc.[134] ATP Tours, Inc. allegedly violated the ITR by facilitating or making eighteen separate salary payments to an individual who is ordinarily a resident of Iran.  The payments were completed between May 2007 and July 2010 for services rendered and expenses incurred in relation to ATP tennis tournaments that the individual officiated.  OFAC determined that these actions were not self-reported by ATP, alleged that such payments violated 31 C.F.R. §§ 560.206 and 560.208, and concluded that the alleged violations were non-egregious.  The base penalty was $135,000.  To settle potential civil liability for the alleged violations, ATP agreed to pay $48,600.  The settlement reflects OFAC’s consideration of the aggravating and mitigating circumstances.  Contributing to the aggravating circumstances was the fact that eight of the eighteen payments were completed after OFAC had issued a "Warning Letter" to ATP on August 11, 2008, demonstrating reckless disregard for U.S. sanctions obligations.  Additionally, ATP did not have an OFAC compliance program.  Among the mitigating circumstances:  ATP was a non-profit, member-based organization; in the preceding five years ATP had not been subject to an OFAC enforcement action; ATP cooperated with OFAC’s investigation; ATP established an OFAC compliance plan;  and the alleged violations represented very low harm to the overall sanctions program. 12.    Wells Fargo Bank, N.A.[135] Wells Fargo Bank, N.A. settled any potential civil liability with OFAC for allegedly violating the Foreign Narcotics Kingpin Sanctions Regulations, 31 C.F.R. part 598, by maintaining accounts and processing transactions for two individuals who had been designated pursuant to the Kingpin Act.  Wells Fargo opened accounts for Claudia Aguirre Sanchez prior to her designation in December 2007 as "Claudia Aguirre."  Although Aguirre Sanchez provided to Wells Fargo a U.S. address and a U.S. Social Security Number (SSN) when she opened the accounts, the date of birth that she provided at the time matched the date of birth listed on the SDN List.  In addition, Wells Fargo opened accounts for Carlos Antonio Ruelas Topete after Ruelas Topete was designated under the name "Carlos A. Ruelas."  Again, although Ruelas Topete provided a U.S. address and a U.S. SSN, the date of birth provided to the bank matched the date of birth included on the SDN List.  Wells Fargo processed 58 transactions with a total value of $22,211.94 on behalf of Aguirre Sanchez, and 756 transactions with a total value of $53,780.39 on behalf of Reulas Topete.  The total base penalty was $37,996. Wells Fargo agreed to settle the potential civil liability by paying $23,937.  OFAC determined that Wells Fargo had voluntarily disclosed the apparent violations and OFAC had concluded that the conduct was non-egregious.  Among the other mitigating considerations identified by OFAC:  Wells Fargo had not had a violation in the five years preceding the transactions at issue; the transactions may have been licensable at the time of the violations; Wells Fargo cooperated in the investigation; and Wells Fargo had implemented significant remedial measures.  In terms of aggravating considerations, OFAC noted that Wells Fargo was a sophisticated financial institution and had not incorporated screening based on date of birth into its compliance measures. 13.    Intesa Sanpaolo S.p.A.[136] Intesa Sanpaolo S.p.A. allegedly violated the ITR, the CACR and the SSR.  Intesa maintained a customer relationship with Irasco S.r.l., an Italian company owned or controlled by the Government of Iran.  OFAC determined that Intesa failed to identify Irasco as fitting the definition of GOI.  Further, Intesa did not take adequate precautions to prevent the processing of transactions for or on behalf of Irasco that terminated in the United States or with U.S. persons.  Intesa processed 31 wire transfers totaling $3,142,565 between November 2004 and December 2006.  The base penalty for the apparent violations of the ITR was $3,371,000. In apparent violation of the CACR, between October 2004 and March 2008, Intesa processed 53 wire transfers, totaling $1,643,326, involving Cuba.  The base penalty for the alleged violations of the CACR was $1,867,000.  In apparent violation of the SSR, between November 2004 and October 2007, Intesa processed 67 funds transfers, totaling $2,858,065, involving Sudan.  The base penalty of the apparent violations of the SSR was $4,124,000. Accordingly, the total base penalty for the apparent violations of the ITR, the CACR and the SSR was $9,362,000.  The apparent violations were settled for $2,949,030.  The settlement amount reflected aggravating factors including Intesa’s failure to maintain an adequate compliance program in connection with U.S. sanctions; OFAC also noted that Intesa knew or had reason to know that the customer met the definition of the GOI and that related payments to the United States violated the ITR; the payments caused harm to the integrity of the U.S. sanctions programs; and Intesa was a commercially sophisticated, international financial institution.  OFAC also found mitigating factors.  OFAC noted that Intesa’s conduct was not willful or reckless; no Intesa managers or supervisors had actual knowledge or awareness; Intesa cooperated with the investigation; Intesa implemented remedial measures; and Intesa had not been subject to an enforcement action in the five years preceding the transactions at issue. 14.    Stanley Drilling Equipment & Supply, Inc.[137] Stanley Drilling Equipment & Supply, Inc. allegedly violated the ITR.  Between June 2008 and October 2012 Stanley Drilling exported two shipments of goods and attempted to export four shipments to the UAE with reason to know that the shipments were intended for an oil drilling rig in Iranian waters.  The total value of the goods was $93,329, and the base penalty was $156,000.  Stanley Drilling did not voluntarily disclose the alleged violation, and OFAC concluded that the violations were non-egregious. The matter was settled for $84,240.  The settlement reflects several considerations.  Stanley Drilling did not have an OFAC compliance program.  Further, because of the connection to Iranian petroleum resources, the transactions were particularly harmful to U.S. sanctions.  The harm to the objectives of the U.S. sanctions programs was reduced, however, because four of the shipments were detained and did not reach their destination.  OFAC also noted that while Stanley Drilling had reason to know of the destination of the goods, it did not have actual knowledge.  Finally, OFAC noted that Stanley Drilling was a small company and had not previously been found to have violated OFAC sanctions. 15.    American Express Travel Related Services Company, Inc.[138] American Express Travel Related Services Company, Inc. (TRS) settled any potential civil liability with OFAC for allegedly violating the Cuban Assets Control Regulations (CACR) when, between December 2005 and November 2011, TRS subsidiaries and foreign branches issued 14,487 tickets for travel between Cuba and countries other than the United States.  Many of the travel destinations maintain blocking statutes that prohibit compliance with the CACR, including by U.S. persons.  The matter was voluntarily disclosed to OFAC by TRS.  The base penalty for the alleged violations was $3,629,250.  The matter was settled for $5,226,120. In 1995 and 1996, TRS was investigated for what OFAC described as "similar apparent violations of the CACR" in connection with Cuba-related travel services by a then recently acquired subsidiary.  According to OFAC, it had notified TRS that the conduct of the acquired subsidiary constituted apparent violations of the CACR.  The prior investigation was listed as an aggravating factor, with OFAC alleging that TRS failed to implement effective procedures for detecting Cuba-related travel until 2010 even though it had agreed to do so when the 1995-1996 matter was pending.  Other alleged aggravating factors included:  U.S. management allegedly should have known that the conduct at issue would or might take place; harm caused to U.S. sanctions program objectives; TRS’s status as one of the largest and most sophisticated travel services provider for authorized Cuba travel; alleged significant sanctions history during the preceding 5 years; alleged inadequate compliance programs; and alleged ongoing booking of Cuba travel for corporate clients during a "wind-down period" following the 2010 disclosure.  The mitigating factors included TRS’s substantial cooperation, including by producing records and information to OFAC, and the absence of a penalty notice or Finding of Violation in the five years preceding the transactions at issue.  OFAC gave neither aggravating nor mitigating weight to the blocking statutes. 16.    Communications and Power Industries LLC[139] Communications and Power Industries LLC (CPI) allegedly violated the Iran Transactions and Sanctions Regulations when between March 2006 and October 2010 the Swiss branch office of CPI’s U.S. subsidiary:  Sold x-ray generators to an entity in Iran in 30 instances; twice attempted to sell x-ray generators and a medical digital imaging workstation to an entity in Iran; directed its Canadian affiliate to make three shipments of x-ray generators and one shipment of automatic exposure control field kits to an entity in Turkey at the request of an entity in Iran; and referred to the Canadian affiliate an order from an entity in Iran for a medial digital imaging workstation and one x-ray generator.  The base penalty was $1,100,096 and settled for $346,530.  CPI had voluntarily disclosed the matter and OFAC determined that the violations were non-egregious. OFAC concluded that CPI displayed reckless disregard for U.S. sanctions law in delaying an assessment of the applicability of U.S. sanctions to the Swiss branch of the subsidiary; CPI lacked the appropriate OFAC compliance program at the time of the apparent violations.  OFAC also noted that CPI undertook a thorough investigation upon discovering the apparent violations; implemented remedial measures; and had no history of violations.  OFAC further noted that the apparent violations represented a small share of CPI’s sales; the sales probably could have been licensed under existing OFAC policy; and CPI cooperated with the investigation. 17.    World Fuel Services Corporation[140] OFAC alleged that World Fuel Service Corporation (World Fuel) violated the Iranian Transactions Regulations (ITR) when it facilitated a sale by a non-U.S. affiliate of fuel for a vessel at a port in Iran on or about June 23, 2008.  OFAC further alleged that World Fuel violated the Sudanese Sanctions Regulations (SSR), when its U.S. affiliate facilitated services and fuel purchases for an aircraft that stopped in Khartoum, Sudan on or about January 29, 2009.  Finally, World Fuel allegedly violated the Cuban Assets Control Regulations (CACR) when two U.S. subsidiaries coordinated services for 30 unlicensed flights to Cuba between March 2007 and April 2009.  The total value of the transactions was $79,219, the base penalty $73,151, and the violations were settled for $39,501.  World Fuel had voluntarily disclosed the violations of the ITR and SSR, but not the CACR.  OFAC concluded that the violations were non-egregious.  In establishing the settlement, OFAC considered the fact that World Fuel had no prior violations; World Fuel cooperated in the investigation; and World Fuel enhanced its compliance program. 18.    Finans Kiymetli Madenler Turizm Otomotiv Gida Tekstil San. Ve Tic[141] Finans Kiymetli Madenler Turizm Otomotiv Gida Tekstil San. Ve Tic ("Finans"), a Turkey-based trading company, allegedly violated the Iranian Transactions and Sanctions Regulations (ITSR) when, between February 2012 and May 2012, it originated at least three electronic funds transfers, processed through financial institutions located in the United States, for the benefit of the Government of Iran and/or Iranian persons.  The transactions had a total value of $257,808.  Two of the transactions were blocked by the U.S. financial institution.  OFAC concluded that Finans violated the prohibition on the export of services directly or indirectly from the United States to Iran or the Government of Iran.  Finans did not voluntarily disclose the violations, and OFAC determined that the violations constituted an egregious case.  OFAC assessed the base penalty, $750,000. Among the factors OFAC considered:  Finans was reckless in concealing or omitting material information in the funds transfers; management had at least reason to know of the conduct; the conduct, which included processing transaction on behalf of an oil and gas development company in Iran, harmed and possibly significantly harmed, U.S. foreign policy objectives; Finans did not have an OFAC compliance program; Finans did not cooperate with the investigation; and Finans had not received a Penalty Notice or Finding of Violation during the five years preceding the transactions at issue.  OFAC noted the deterrent value of the penalty with respect to foreign financial institutions that maintain accounts for third-country trading companies.  19.    Alma Investment LLC[142] Alma Investment LLC ("Alma"), a UAE-based investment company, allegedly violated the Iranian Transactions and Sanctions Regulations by originating at least six electronic funds transfers between September 2009 and February 2010, with a total value of $103,283, that were processed though financial institutions located in the U.S. for the benefit of persons in Iran.  OFAC concluded that Alma, which it was believed also served as a general trading company, violated the prohibition against the exportation of services, directly or indirectly, from the U.S. to Iran or the Government of Iran.  The violations were not voluntarily disclosed and OFAC concluded that the violations were egregious.  OFAC assessed the amount of the base penalty, $1.5 million. In establishing the penalty, OFAC noted that Alma acted recklessly or even willfully in concealing material information concerning the funds transfers; management had actual knowledge and/or reason to know of the conduct, and that Alma had multiple associations with Iranian entities.  OFAC concluded that Alma’s conduct resulted in harm and possibly significant harm to U.S. sanctions objectives; Alma did not have a compliance program; and Alma did not cooperate with the investigation.  OFAC also noted that such a penalty could encourage greater due diligence by foreign financial institutions that maintain accounts for third-country trading companies/money transmitters. 20.    Ameron International Corporation[143] OFAC conducted an investigation into whether Ameron International Corporation ("Ameron") allegedly violated that Iranian Transactions and Sanctions Regulations (ITSR) when it: allegedly approved capital expenditures requests from Dutch and Singapore subsidiaries to purchase equipment needed to fulfill orders for a project in Iran; allegedly referred to foreign subsidiaries business opportunities that Ameron could not have performed directly under the ITSR; and allegedly provided testing services from a U.S. facility to the Singapore subsidiary with reason to know that the services would be provided to an entity located in Iran.  OFAC also investigated whether Ameron allegedly violated the Cuban Assets Control Regulations when the Colombian branch of the U.S. subsidiary allegedly sold concrete pipe to a consortium that included a Cuban partner.  Per a publicly disclosed settlement, the matters were settled for $434,700 (with a total base penalty of $690,000). 21.    KMT Group AB[144] KMT Group AB (KMT) of Sweden, on behalf of two subsidiaries, agreed to settle apparent violations of the Iranian Transactions and Sanctions Regulations (ITSR) for $125,000.  KMT’s U.S. based subsidiary manufactured high pressure water jetting pump units for industrial pipe cleaning, surface preparation, hydrostatic testing and hydro demolition, and a German affiliate was the sales agent.  The German subsidiary attempted to export nine pumps from the U.S. to Iran with the knowledge that they were intended specifically for reexport to the South Pars Industrial Gas Complex in Iran.  U.S. Department of Homeland Security’s Customs and Border Protection (CBP) seized the pumps and partial payment for the pumps upon redelivery to the U.S.  The German subsidiary had forfeited two of the pumps and the partial payment. The matter was not voluntarily disclosed; OFAC did not consider this to be an egregious case.  The base penalty was $500,000.  In establishing the settlement, OFAC noted that the German subsidiary displayed reckless disregard for U.S. sanctions, including failing to disclose to the U.S. subsidiary the final destination of the pumps.  OFAC also noted that the pumps had been seized by CBP before they could be shipped to Iran so there was no actual sanctions harm; partial payment of $579,026 had been seized; the German subsidiary had not had a penalty notice in the five years preceding the transactions at issue; the KMT group companies had taken remedial actions and had cooperated with the investigation.  OFAC noted that in addition to the $125,000 penalty, KMT had agreed not to contest the forfeiture proceedings in connection with the remaining seven pumps. 22.    Weatherford International Ltd.[145] Weatherford International Ltd. and certain subsidiaries and affiliates (collectively Weatherford) agreed to settle apparent violations of the Cuban Assets Control Regulations , the Iranian Transactions and Sanctions Regulations and the Sudanese Sanctions Regulations.  Weatherford conducted 441 transactions worth $69,268,078 that provided oilfield equipment and services in connection with the Cuban government and/or blocked Cuban nationals, as well as travel-related transactions for Weatherford employees to and from Cuba, in apparent violation of the CACR.  The transactions occurred between 2005 and 2008.  In apparent violation of the ITSR, between 2003 and 2007 Weatherford provided oilfield services to Iran, including 100 transactions worth $23,001,770, involving the direct or indirect export of goods, technology and/or services to Iran, and/or the facilitation of those transactions by U.S. persons.  Finally, in apparent violation of the SSR, Weatherford conducted oilfield services business in Sudan in 2005 and 2006, including 45 transactions worth $295,846.  The transactions involved the direct or indirect export of goods, technology and/or services from the U.S. to Sudan.  The base penalty for the apparent violations of the CACR, ITSR and SSR was $107,089,941.  Weatherford agreed to settle the apparent violations for $91,026,450.  Weatherford’s settlement with OFAC was part of a global settlement that included the Department of Commerce’s Bureau of Industry and Security (BIS) and the U.S. Attorney’s Office for the Southern District of Texas (USAO).  The OFAC penalty will be deemed fully satisfied by the fines and penalties assessed pursuant to agreements with the USAO and the penalties paid to BIS.  The global settlement also includes Weatherford’s consent to external audits of its compliance efforts for 2012, 2013, and 2014. OFAC noted aggravating factors:  OFAC found Weatherford’s conduct willful and indicative of a long-term pattern; certain executives and senior management knew or had reason to know of the conduct; the apparent violations resulted in significant harm to the long-term objectives of U.S. sanctions; Weatherford was a sophisticated oilfield services provider; and OFAC concluded that Weatherford’s compliance program at the time of the apparent violations was "substantially deficient."  OFAC noted mitigating factors:  Weatherford had not previously been the subject of an OFAC administrative action or received a penalty notice.  Weatherford took remedial measures; and Weatherford cooperated with the investigation by undertaking an internal investigation with the assistance of outside counsel, providing extensive documentation, and by agreeing to toll the statute of limitations. 23.    Compass Bank[146] Compass Bank (Compass) of Birmingham, Alabama, originated a wire transfer of £8,900 (approximately $14,898) destined for a third-country company’s account in the United Kingdom.  The invoice indicated that the transaction was in payment for the shipment of a tractor from the U.K. to Omdurman, Sudan.  Compass compliance personnel reviewed the transaction and determined that it did not violate the SSR.  Compass concluded that there was no violation of the SSR because none of the parties was on the SDN List and because the conduct was authorized by a general license.  The conduct was not voluntarily disclosed; OFAC concluded that the matter was non-egregious. The base penalty for the transaction was $25,000, and the matter was settled for $19,125.  OFAC noted that the transaction was rejected by another financial institution and so no benefit was conferred; Compass had not received a penalty notice or finding of violation during the preceding 5 years; and Compass took remedial action and cooperated with the investigation.  As aggravating factors, OFAC noted that Compass managers knew of the conduct and were aware that it implicated SSR concerns, and that the Compass compliance personnel demonstrated a lack of understanding of the SSR. 24.    Royal Bank of Scotland[147] The Royal Bank of Scotland plc (RBS) settled alleged violations of the Cuban Assets Control Regulations, the Burmese Sanctions Regulations, Executive Order 13448 (Blocking Property and Prohibiting Certain Transactions Related to Burma) and/or the Tom Lantos Block Burmese JADE (Junta’s Anti-Democratic Efforts) Act,[148] the Sudanese Sanctions Regulations, and the Iranian Transactions Regulations.  The potential civil liability was settled for $33,122,307. Between August 2005 and October 2009, RBS allegedly processed 24 wire transfers totaling $290,206 involving Cuba.  The base penalty for the alleged violations of the CACR was $780,000.  Between July 2005 and July 2009, RBS allegedly processed 46 wire transfers totaling  $375,946 in alleged violation of the BSR, Executive Order 13448, and/or the JADE Act.  The base penalty for the alleged Burma-related violations was $5,769,308.  Between July 2005 and August 2009, RBS allegedly processed 326 wire transfers totaling $32,469,380 in alleged violation of the SSR.  The base penalty for the alleged violations of the SSR was $54,860,306.  Between September 2005 and November 2009, RBS allegedly processed 38 wire transfers totaling $795,345 in alleged violation of the ITR.  The base penalty for the alleged violations of the ITR was $4,835,000.  The total base penalty for all alleged violations was $66,244,614 and the statutory maximum penalty was $132,489,228. RBS voluntarily self-disclosed the alleged violations.  OFAC concluded that the alleged violations were egregious based on the following:  the conduct allegedly was reckless; several members of RBS management with oversight responsibilities in connection with the specific business units allegedly were aware of the conduct; the transactions allegedly conferred significant benefits to the sanctioned persons; RBS is a large, sophisticated financial institution; and RBS compliance policies and procedures allegedly were inadequate for purposes of ensuring U.S. sanctions compliance.  OFAC concluded that the penalty should be commensurate with the seriousness of the conduct and deter similar financial institutions for engaging in such conduct.  Among the mitigating factors that resulted in a reduction of the penalty:  RBS had not received a penalty notice or finding of violation in the five years prior to the first of the transactions at issue; RBS provided substantial cooperation to OFAC, including by conducting a historical review, providing comprehensive information to OFAC, and signing a tolling agreement which was extended multiple times; and RBS took remedial actions by prohibiting USD payments to certain sanctioned countries, engaging in a comprehensive effort to address all sanctions related issues across its business units, and initiating an effort to review its entire customer base.  OFAC further reduced the penalty given RBS’s agreement to settle its potential liability for the alleged violations. The settlement with OFAC was part of a global settlement involving the Federal Reserve Board of Governors and the Department of Financial Services of the State of New York.  RBS’s obligation to OFAC will be deemed satisfied by payment of an equal or greater sum in penalties assessed by the Federal Reserve Board in connection with the same pattern of conduct. 25.    HSBC Bank USA, N.A.[149] HSBC Bank USA, N.A. (HBUS) agreed to settle the potential civil liability associated with three apparent violations of the Global Terrorism Sanctions Regulations for $32,400.  In December 2010, HBUS allegedly received a funds transfer that originated in a third-country and was destined for HSBC Bank Middle East, Limited (HBME).  The originating institution’s customer allegedly was identified by HBUS’s interdiction software as a potential match to an SDN.  HBUS allegedly requested additional information concerning the transaction, and received an MT199 free format SWIFT message, which included additional information from the remitting institution.  At the time, HBUS’s interdiction software did not screen all SWIFT MT199 messages for potential sanctions matches, and so it did not detect a possible connection with a designated entity and owner.  An HBUS Compliance Officer allegedly did not manually screen the entity name and the owner or recognize them as potential SDNs.  HBUS allegedly processed the transaction.  HBUS later allegedly processed two additional transfers:  $14,963 in January 2011 and $13,710 in April 2011.  Although no SDNs were referenced and each had a different originator from the prior transfer, the transfers allegedly noted the same order number and HBME account as the December 2010 transfer. The total base penalty was $20,083.  OFAC concluded that the conduct was not egregious and that the violations did not result from willful or reckless conduct.  Among the mitigating factors:  The apparent violations were voluntarily disclosed by HBUS; HBUS took appropriate remedial measures and implemented a more robust compliance program; and HBUS had not received a penalty notice or Finding of Violation for similar apparent conduct in the five years prior to the earliest of the three transactions.  Among the aggravating factors:  HBUS personnel responsible for OFAC compliance allegedly were aware of the December transfer and allegedly had reason to be aware of the two following transfers; the violations resulted in a benefit to an SDN; HBUS is a large and sophisticated financial institution; HBUS allegedly initially submitted an incomplete response to the administrative subpoena; and HBUS allegedly did not screen MT 199 messages.  Additional mitigation was extended because of HBUS’s willingness to settle the alleged violations. IX.             Major State Enforcement Actions In addition to federal agencies, certain state agencies have aggressively enforced their own regulations on transactions with sanctioned entities.  In particular, the New York State Department of Financial Services (DFS), under the supervision of Superintendent Benjamin Lawsky, has pursued actions against financial institutions, sometimes independently of its federal counterparts. A.    Royal Bank of Scotland On December 11, 2013, DFS entered into a consent order with the Royal Bank of Scotland (RBS) PLC, whereby RBS agreed to pay DFS $50 million for allegedly conducting transactions with New York correspondent banks involving Iran, Sudan, and, to a lesser extent, other countries subject to sanctions.[150]  The settlement was based on RBS’s alleged processing of transactions through New York correspondent banks which allegedly were at odds with U.S. national security and foreign policy and raised safety and soundness concerns for regulators.  From 2002 until 2011, RBS allegedly conducted more than 3,500 transactions, valued at approximately $523 million, through New York correspondent banks for Sudanese and Iranian customers and beneficiaries.  RBS also allegedly provided written guidance to employees in the United Kingdom instructing them how to complete U.S. dollar payment messages involving sanctioned entities to avoid U.S. detection.[151]  In 2010, RBS initiated an internal investigation into this matter, self-identified the transactions and voluntarily disclosed its findings to a number of government agencies, including to DFS; cooperated with those agencies and the DFS’s investigation, including by conducting an historical review; took disciplinary measures against certain employees; took remedial measures to address the weaknesses; and established a more robust compliance program.[152]  RBS also agreed to pay $50 million to federal authorities as part of a global settlement. B.    Bank of Tokyo Mitsubishi-UFJ, Ltd. On June 20, 2013, DFS and Bank of Tokyo Mitsubishi-UFJ, Ltd. (BTMU) entered into a consent order whereby BTMU agreed to pay $250 million for allegedly clearing U.S. dollar payments through New York involving Iran, Sudan, and Myanmar.[153]   According to the Consent Order, from 2002 until 2007, employees of BTMU in Tokyo allegedly cleared approximately 28,000 U.S. dollar payments totaling close to $100 billion through New York involving Iran.[154]  BTMU also allegedly processed U.S. dollar payments involving Sudan and Myanmar and certain entities on the Specially Designated Nationals list.[155]  BTMU allegedly provided written instructions to its Tokyo-based employees to omit certain bank information from remittances.[156]  In 2007, BTMU conducted an internal investigation into these transactions and voluntarily reported its findings to U.S. authorities.[157]  BTMU also ceased its practices and undertook remedial efforts.  As part of the settlement, BTMU agreed to identify an independent consultant acceptable to DFS to conduct a comprehensive sanctions compliance review of the BSA/AML sanctions compliance programs, policies and procedures currently in place at BTMU’s New York branch and to make recommendations for improving its compliance program.[158]  C.    Iran Freedom and Counter-Proliferation Act of 2012 Compliance Letter On July 24, 2013, DFS sent a letter seeking information from twenty insurance providers concerning their compliance with the Iran Freedom and Counter-Proliferation Act of 2012. [159]  Noting that the IFCA imposes sanctions on entities that provide underwriting services, insurance, or reinsurance for, inter alia, any activity with respect to Iran for which sanctions have been imposed, DFS remarked that it knew of several companies that have insured trades made with Iran.[160]  In order to "seek information about reinsurers’ plans to implement compliance and due diligence programs designed to avoid any potential violations of the IFCA," DFS requested that each insurance provider respond to a list ten questions focused on the provider’s compliance policies.[161]  Such questions included being asked to identify all lines of business that the provider, affiliates, or subsidiaries write that may be subject to the IFCA sanctions, as well as being asked to list all insureds the provider identified as potentially engaging in business with Iran or any entity or person affiliated with Iran.[162]  While the DFS has not publicly acted on information received, such request is indicative of the agency’s increasingly aggressive stance towards penalizing sanctions violations.  THE EUROPEAN UNION AND THE UNITED KINGDOM I.    REGULATIONS A.    European Union The European Union (EU) has adopted a significant number of new sanctions in 2013, although some of those simply amended the list of persons, entities and groups targeted.[163]  Substantive developments concerned the following countries: Belarus Sanctions (including an arms embargo, travel ban and asset freeze) against Belarus’ President Lukashenko and some of his officials have been in place since May 2006, and against Belarus generally since October 2010.  These were amended and extended in 2012, and were further extended until October 31, 2014.[164] Central African Republic On December 23, 2013, the EU adopted Decision 2013/798 implementing UN Security Council Resolution 2127 of December 5, 2013 imposing an arms embargo on the Central African Republic.[165] Faroe Islands On August 20, 2013, the European Commission adopted restrictive measures against the Faroe Islands, a self-governing Danish territory in the North Atlantic which, unlike Denmark itself, is not part of the EU.[166]  The measures were in connection with Denmark’s unilateral adoption of fishing quotas.  These measures included limitations on the use of EU ports by Faroe vessels carrying out certain fishing activities.  This dispute has now been referred by Denmark, acting for the Faroe, both to an arbitral tribunal under the United Nations Convention on the Law of the Sea (UNCLOS) and to the World Trade Organization, alleging breaches of international law.  Republic of Guinea In January 2013, trade sanctions were eased in order to allow (i) the sale, supply, transfer or export of explosives and related equipment; and (ii) the provision of financing, financial assistance, technical assistance, brokering services and other services related to explosives and related equipment, on the condition that the equipment be intended solely for civilian use in mining and infrastructure investments and that an independent body verify that the providers of the related services are identified.[167]  Restrictions (including an arms embargo, an asset freeze, and a travel ban on members of the National Council for Democracy and Development) were originally imposed in October 2010 in response to the state’s violence against political demonstrators in the capital city, Conakry, in 2009.  These have been extended until October, 2014.[168] Iran On November 27, 2013, the EU published a Decision and related Implementing Regulation re-listing certain Iranian entities which had been removed from the EU’s sanctions concerning Iran pursuant to a decision of the Court of Justice of the European Union (discussed in further detail below).[169] As explained in greater detail below, on January 20, 2014, the European Union implemented an interim agreement concluded between Iran and the P5+1 (the United States, United Kingdom, France, China, Russia and Germany) on November 24, 2014. Israel On July 19, 2013 the EU published "Guidelines on the eligibility of Israeli entities and their activities in the territories occupied by Israel since 1967 for grants, prizes and financial instruments funded by the EU from 2014 onwards."[170]  These Guidelines apply to all Israeli entities with their place of establishment within the occupied territories, and make any such Israeli entity ineligible for any EU grants, prizes, or other funding.  The Guidelines also apply to the activities of any Israeli legal person conducted within the occupied territories, and make such activities ineligible for any EU grants, prizes, or other funding. The Guidelines do not apply to Palestinian entities, or to activities aimed at humanitarian purposes, and will come into effect in relation to prizes, grants, and funding available under the EU’s 2014 budget. Democratic People’s Republic of Korea (North Korea) In response to the latest nuclear tests conducted on February 12, 2013, the EU adopted a new set of sanctions reflecting past sanctions,[171] e.g., an embargo on arms and related material, a ban on exports of certain goods and technology, a prohibition of procurement from North Korea of arms, related material and other goods and technology, a ban on provision of certain services, a ban on provision of new North Korean banknotes and coins, a ban on trade in gold, precious metals and diamonds with the Government of North Korea, a ban on exports of luxury goods, and a ban on funding trade where such support could contribute to North Korea’s nuclear, ballistic missile, or other WMD programs. Libya In order to allow assistance to the Libyan government in its disarmament initiatives, the European Union amended the exceptions to the embargoes on arms and related material and on equipment which might be used for internal repression.[172] Moldova By European Council decision, on September 27, 2013, the EU amended and extended restrictive measures (including a travel ban) against certain political leaders in the Transnistrian region of the Republic of Moldova responsible for a campaign of intimidation against Latin-script Moldovan schools.[173] Myanmar / Burma As noted in our 2012 Year-End Sanctions Update, in April 2012 the EU suspended sanctions against Myanmar for one year in response to significant progress towards democracy.  As of May 2, 2013, the EU’s sanctions were lifted permanently. As before, however, the arms embargo continues.[174] Somalia Mirroring a July 2013 UN Security Council Resolution, the EU adopted a new derogation from the arms embargo in relation to equipment for the UN Assistance and Training Missions in Somalia.[175] Syria The European Union renewed its trade sanctions relating to Syria for a further year until June 1, 2014, with an exception for allowing weapons sales to the Syrian opposition.[176]   The latter issue was a source of a strong division between EU Member States; Austria and Sweden, for instance, were strongly opposed to providing arms to the opposition, whereas France and the United Kingdom were in favor of easing the sanctions.[177] A further EU Decision and Regulation in relation to Syria was adopted on December 13, 2013, in order to support the activities of the Organisation for the Prohibition of Chemical Weapons, to assist the UN’s humanitarian aid efforts, and to enable payments for civilian medical supplies, food, shelter and sanitation.[178]  The EU also introduced a prohibition on trade in items of archaeological, historical, cultural, scientific and religious importance illegally removed from Syria. Zimbabwe In early 2013, the European Union concluded that a peaceful and credible constitutional referendum in Zimbabwe would represent an important milestone in the preparation of democratic elections, and would justify the suspension of the majority of all remaining EU targeted restrictive measures against individuals and entities.[179]  Consequently, on March 25, 2013, the EU suspended sanctions on 81 individuals and 8 companies until February 20, 2014, with 10 individuals (including President Robert Mugabe) remaining listed.[180]  Moreover, on September 17, 2013, the EU announced a start to the removal of sanctions on the Zimbabwe Mining Development Corporation (ZMDC), with the relevant legislation published on September 23, 2013.[181]  However, in August, EU foreign ministers decided against a wider lifting of EU sanctions against Zimbabwe for the time being. B.    United Kingdom In common with other EU Member States, the EU measures set out above apply in their totality in the UK. The UK’s legislative activity during 2013 has been limited to implementing European Union sanctions into local law, and to extending certain of those EU measures to some of its overseas territories.  Each legislative instrument lists the particular overseas territories to which it applies, with most only applying to a sub-set of the whole.[182] In August 2013, HM Treasury published advice on the United Kingdom’s sanctions regimes, including detailed Frequently Asked Questions covering financial sanctions.[183]  HM Treasury also issued a new license application form for all sanctions regimes other than Iran and Libya. II.    MAIN CASE-LAW IN 2013 A.    European Union In 2013 there have been a number of decisions by the European courts in Luxembourg regarding European sanctions, and the legality of imposing them on certain individuals or entities.  These have covered the Iranian, Anti-Terrorism, Tunisian and Ivory Coast (Côte d’Ivoire) sanctions regimes. Challenges to inclusion within the Iranian sanctions regime Several successful challenges have been brought by entities included in the Iranian sanctions lists.  Most of these claims turned on the evidence relied on by the European Commission in determining that the entity should be included in the list of sanctioned entities.  In some such cases, the Council of the European Union placed reliance on classified or confidential information that it asserted could not be placed before the Court. The Court was unwilling to attach any weight to such evidence, and held that basing a listing on such evidence was an infringement of the applicants’ rights. In broadly similar Judgments, the listings of Bank Mellat, Bank Sedarat, Qualitest FZE, and Iran Transfo were each quashed.[184]  The Council of the European Union has appealed the Judgments as to Bank Mellat and Bank Sedarat. In a similar vein, Hanseatic Trade Trust & Shipping (HTTS) GmbH successfully challenged its listing in the EU’s Iran Sanctions list.  In this case, the European Council sought to rely on evidence that had come to light subsequent to the initial listing. The Court held that as such evidence could not have formed the basis for the original listing decision it could not be relied on to support that decision.[185] Two unsuccessful challenges were brought by the UK subsidiaries of Bank Saderat and Bank Mellat, each challenging their respective inclusions on the Sanctions list.  Both cases were dismissed on the basis that sanctions imposed on a parent company are, in the case of the EU’s Iran sanctions, automatically imposed on a subsidiary and that, therefore, the only evidentiary consideration was whether the companies were actually subsidiaries.  Both of these Judgments regarding the subsidiaries were handed down after the respective parent companies had successfully challenged their listing.[186] A number of further decisions by the General Court of the European Union were handed down on September 6 and 16, 2013,[187] arising from applications made by 34 separate sanctioned entities or individuals, all but three of which are also included on the SDN List.  While four of the applications, two relating to Bank Melli Iran, one to Islamic Republic of Iran Shipping Lines (IRISL) and some of its subsidiaries, and one to Europäische-Iranische Handelsbank (spelled Europaeische-Iranische Handelsbank on the SDN List) were unsuccessful, in the other cases the General Court struck down the listings.  The bases for success varied from applicant to applicant. In the cases of Post Bank Iran, Iran Insurance Company, Good Luck Shipping and the Export Development Bank of Iran, the General Court held that the Council of the European Union was unable to provide sufficient evidence that these entities provided support to Iran’s nuclear program.[188] In the cases of Naser Bateni, Persia International Bank, and Iranian Offshore Engineering & Construction Company, the General Court held that the reasons for listing given by the Council of the European Union did not, in and of themselves, substantiate a listing: for Mr. Bateni, this was his directorship of a designated entity;[189] for Persia International Bank, it was its 60% ownership by a designated entity;[190] and in the case of Iranian Offshore Engineering & Construction Company it was three denials of export licenses.[191]  For Bank Refah Kargaran, the General Court held that the Council was unable to provide any evidence to support its basis for listing.[192] If such a Judgment of the General Court is not appealed and the entity or individual in question is not re-listed, the effect of the General Court’s Judgment is retrospective, in that it will effectively operate to remove the entity or individual’s name from the listing regulation with effect for the entire period from its promulgation until the date of the General Court’s decision. On November 28, 2013, the European Court of Justice (ECJ) handed down two Judgments in appeals against General Court Judgments annulling the listings of two companies in Iran sanctions, the Fulmen and Kala-Naft cases.   In Fulmen, the ECJ upheld the annulment of the designation, whereas in Kala-Naft it reversed it. In Fulmen, the ECJ upheld the General Court’s view that the listings should be annulled for lack of supporting evidence.  Fulmen had provided rebuttal evidence, and the Council failed to adduce evidence to support its case.  The ECJ did not accept the Council’s argument that it need not have to provide such evidence due to the confidential nature of the evidence or the clandestine nature of the alleged activities.[193] Kala Naft had been designated for selling equipment to the oil and gas sectors which could be used for Iran’s nuclear program.  The Court of Justice of the EU accepted that reasoning as sufficiently specific.  The General Court had held that selling equipment to the oil and gas sectors insufficient to justify inclusion in the EU’s sanctions against Iran, as it did not demonstrate support for nuclear proliferation.  The ECJ disagreed, holding that trading in key equipment and technology could be regarded as support for the nuclear industry.[194] On November 12, 2013, in North Drilling Co. v. Council, the General Court annulled North Drilling’s designation, the reasoning behind which was that it was alleged to be a wholly-owned subsidiary of the National Iranian Oil Company.[195]  North Drilling claimed that it had had no connection with NIOC since 2011, following privatization.  The Council alleged that North Drilling was still under State control, but the Court considered it unfair to allow reliance on reasoning which had never been put to the applicant. These Iranian cases demonstrate that the evidentiary basis for sanctions listing can be tested in the courts, and that the European Council will not be permitted to rely on undisclosed evidence. It is not a surprising outcome that the European Court of Justice is currently considering the adoption of special procedures to allow it to hear classified or secret evidence.[196] In the case of the successful applicants linked to the IRISL, on October 10, 2013 the EU published Council Regulation 971/2013.[197]  This new Regulation not only effectively overturned the Court’s decision by extending the criteria for inclusion on the sanctions list, but also broadened the criteria specifically to include all subsidiaries of IRISL, as well as agents of IRISL, insurance and service providers to IRISL and its subsidiaries and agents. Most recently, on December 12, 2013, the General Court considered the designation of 11 individuals on Iran sanctions lists due to positions they were alleged to have held with IRISL and related shipping corporations.  The General Court ordered these designations annulled because the designation of IRISL itself was illegal, as the Council had failed to demonstrate by evidence that any of the individuals met the standards for inclusion and that the Council’s reasoning was too vague. Application to suspend sanctions preventing company from performing contracts On August 29, 2013, the President of the General Court refused an application by Iran Liquefied Gas Company, a company which had challenged its inclusion in the Iran sanctions, seeking suspension of the provisions of the sanctions legislation preventing it from performing contracts with European companies until its annulment action had been heard by the European Court.[198]  While acknowledging that such interim measures are available in principle, the Court refused to grant them in this case as the underlying application was inadmissible (having been raised out of time and on the wrong legal basis). Challenges to inclusion within the Syrian sanctions On September 13, 2013, the General Court of the European Union upheld sanctions imposed on two Syrian nationals.[199]  The Court dismissed the actions for annulment, holding that the European Council was entitled to include the individuals on the list, despite not having notified either of them of their inclusion, because they were able to challenge such inclusion in court and had been provided sufficient reasons for their inclusion.  The Court noted the Council’s broad discretion in including persons on sanctions lists, and the limited scope for interference by the Court in the Council’s decisions. Challenges to inclusion within the Tunisian sanctions On May 28, 2013 the General Court struck down the listings of certain Tunisian individuals under the Tunisian sanctions regime;[200] and then on July 30 (just before the expiry of the two-month appeal period), the same individuals were re-listed under Council Implementing Regulation (EU) No. 735/2013.[201] Challenges to inclusion within the Ivory Coast (Côte d’Ivoire) sanctions The European Court has also heard seven challenges to the inclusion of particular individuals on the EU’s Ivory Coast (Côte d’Ivoire) Sanctions list.  In two of these cases, the Court held that the basis for listing was clearly explained and allowed scope for rebuttal, while the evidence cited for the listing was sufficient.[202]  The other cases all turned on whether the challenges to the listing had been brought within the required 2-month period.  The Court held that the 2-month period ran from 14 days after the publication of the listing in the Official Journal and, as such, each of the challenges were out of time.[203] The continuing interest in a listing challenge of those already de-listed Due to the length of time it takes for a case to be heard in the European Court, it has been relatively common for an individual who is challenging his or her listing in the Court to have been de-listed from the particular sanctions regime before any hearing takes place. Despite the attempts of applicants to positively try to clear their names, it has been the practice of the Court in the past to dismiss such challenges as being no longer justiciable.[204] However, it appears from two Judgments in 2013 that the Court has modified its stance on this issue. In both Adulbasit Abdulrahim v. Council of the European Union and Chafiq Ayadi v. Council of the European Union, the Court has held that an applicant has a continuing interest in testing the original legality of a listing, even after the person has been de-listed.[205] B.    United Kingdom Melli Bank — Commercial Court On May 13, 2013, the Commercial Court in London heard an application for summary judgment by Melli Bank PLC against Holbud Limited.  Melli Bank PLC is the UK subsidiary of an Iranian bank. Both parent and subsidiary are included in EU Sanctions lists. The claim was for unpaid commitment fees under a facility agreement.  Holbud’s defence was that, as Melli Bank PLC had become a "designated person" under the EU’s Iran Sanctions list shortly after the facility agreement had been signed, the contract had been frustrated by the designation and/or repudiated by Melli Bank.  Even at the summary judgment stage (where the test is that a defendant must have no real prospect of successfully defending the claim), the Court dismissed these arguments. It held that, as the EU’s sanctions allowed for licenses to be granted for contracts in existence prior to a designation, and as Holbud had never applied for such a license, the performance of the contract had not been frustrated.  The Court further held that at all times the Bank was ready and willing to perform the contract and that there was thus no repudiation of the contract by Melli Bank.[206]  The Judgment stands as a warning that commercial obligations can survive the designation of a contractual counterparty, so long as legal avenues to allow payments (such as license applications) remain available. Bank Mellat — Supreme Court On June 19, 2013, the UK’s Supreme Court handed down two Judgments relating to sanctions or financial restrictions, imposed upon the Iranian Bank Mellat by the Financial Restrictions (Iran) Order, 2009, (S.I. 2009/2725) (U.K.) (the "2009 Order"). The more important of these Judgments is Bank Mellat v. Her Majesty’s Treasury (No. 2), [2013] UKSC 39. The 2009 Order had singled out Bank Mellat, but no other Iranian banks, as being a financial institution which had effectively aided and abetted Iran’s nuclear weapons program.  The 2009 Order directed all UK financial institutions to cease any and all business relationships with Bank Mellat. By a majority, the Supreme Court struck down the 2009 Order as unlawful on two principal grounds.  The first was that the 2009 Order was discriminatory for singling out Bank Mellat without justification. Further, by allowing other Iranian banks to conduct the very business that Bank Mellat was restrained from conducting (a point expressly made by HM Treasury at the time of introducing the 2009 Order), the 2009 Order would arguably have had no actual preventative effect, and was therefore unnecessary, irrational, and unreasonable.[207]  The Supreme Court held that HM Treasury erred when it failed to impose the same restrictions on all Iranian banks — an oversight long since corrected. The Supreme Court also upheld Bank Mellat’s appeal that the 2009 Order had been imposed in breach of the obligation to allow it an opportunity to make representations to HM Treasury. The second Supreme Court Judgment concerned an appeal regarding the use by the Supreme Court of the "closed material procedure" (CMP).[208]  CMP is used by the lower courts when the evidence advanced by the government is considered too sensitive to be used in open court, or even in private.  Instead, the court sits in a closed hearing with one of the parties absent.  The interests of that party are protected by special advocates appointed by the Court, who make submissions on behalf of the absent party.  This question arose because both the High Court and the Court of Appeal had held closed hearings as part of this case, and indeed the Supreme Court — for the first time in its fairly shortly life — also held a closed hearing.  Lord Neuberger — who delivered the majority Judgment — upheld the use of a CMP model by the Supreme Court, but signaled that any future applications for a CMP would be scrutinized carefully, and only be allowed in very limited circumstances. Since the Supreme Court’s Judgment, Bank Mellat has indicated that it plans to sue HM Treasury for approximately £500 million ($744 million) in damages.[209] Bank Melli, Persia International Bank and DVB Bank SE – Commercial Court On July 31, 2013, Bank Melli, Persia International Bank and DVB Bank SE were granted summary judgment by the Commercial Court in a claim for recovery of over €40 million from certain Iranian shipping companies under a ship finance facility, and related Iranian guarantors for default under the facility.[210]  Those borrowers argued that EU sanctions against Iran rendered it unlawful or impossible for the contract to be performed, as it would have involved sanctions violations. The Court rejected this argument, holding that the agreement was an instrument imposing a repayment obligation.  Moreover, the borrowers had not sought to obtain a license permitting the payment from the competent national authority. The effect of this authority and related case law would appear to be that a company must take all possible steps to comply with an existing contract with a sanctioned entity (including making any available license applications to HM Treasury) before it can safely decline to discharge its contractual obligations. In Persia International Bank v. Council the Court considered the test for ownership and control in the context of the EU’s Iran sanctions.  This is most relevant for the purposes of whether a company is owned or controlled by an "Iranian person" as, if so, it is itself an "Iranian person." In this case Persia International Bank was 60% owned by Bank Mellat, and Bank Mellat had the ability under a shareholders agreement to appoint three directors and one independent, non-executive director, out of a board of seven.  The Court held that a 60% shareholding was not sufficient to determine ownership.  In addition, the Court held that Bank Mellat did not have the ability to control the company’s board (based partly on the need for FSA approval of directors, and a distinction between executive and non-executive directors).  Finally, the Court held that—given the circumstances—Bank Mellat could not be said to "own" Persia International Bank.  The case is an illustration of the fact-specific analysis that must be carried out in determining the application of the "owned or controlled" test, with the analysis extending to powers under a shareholders agreement and board control, rather than just a mathematical calculation based on shareholdings. John Bredenkamp — Administrative Court An action for judicial review has been brought before the English courts by the Zimbabwean businessman John Bredenkamp against the UK’s Foreign and Commonwealth Office.  Mr. Bredenkamp was subject to an asset freeze under the EU’s Zimbabwe Sanctions list, and he alleges that his inclusion in those sanctions was based on the uncorroborated evidence of a conversation to which the UK ambassador to Zimbabwe had been a party.  While the English courts are not empowered to declare an EU law to be invalid, it was held, as a preliminary issue to his judicial review application, that the English courts are competent to review actions effected by the UK authorities in the sequence of events leading to a sanctions listing, as well as decisions by the UK authorities not to delist an individual or entity (see R (on the application of Bredenkamp v. Secretary of State for Foreign and Commonwealth Affairs, [2012] EWHC 3297 (Admin)).  We understand that other claims for judicial review have since relied on this Judgment and have been allowed to proceed.  A subsequent Judgment in this case ordered HM Government to make certain disclosures of documents and information regarding its decision designate him under the legislation. The hearing of the Bredenkamp judicial review application took place in June 2013 and the Judgment is awaited.[211] III.    EU MEMBER STATE ENFORCEMENT ACTIONS IN 2013 A.    United Kingdom On July 1, 2013 the Financial Conduct Authority (FCA) (one of the successor regulators that has taken over from the Financial Services Authority) published its Thematic Review in relation to banks’ responses to the risks of money laundering, terrorist financing, sanctions, and the export of dual-use goods in the trade finance sector.[212]  The review covered 17 different banks of varying sizes operating both in the UK and in the UK’s offshore jurisdictions.  The review was generally positive regarding the sanctions screening and due diligence processes effected by the banks on their own customers, but noted examples of poor controls with regard to third parties involved in the transaction such as agents, insurance companies, shippers, freight forwarders, delivery agents, inspection agents and, indeed, commercial counterparts.  In relation to the export of dual-use goods, the FCA was highly critical of the approach of the banks, with inadequate staffing, inadequate staff training, and poor screening being recurring themes.  The FCA has warned that some banks that formed part of the review will be the subject of further investigation, and possible future penalties. In April 2013, it was reported that Royal Dutch Shell was exploring ways of repaying historic debts to the National Iranian Oil Company (NIOC), without breaching EU sanctions.  As the EU sanctions allow for the licensed export of foodstuffs or medicines to Iran, it was reported that one of the options being explored was a barter deal to pay the pre-sanctions debts with grain or pharmaceuticals.  Although the UK government gave no official statement in relation to the proposal, no approval for the possible transactions was given.[213] On February 22, 2013, the English Court of Appeal overturned the conviction of Ramin Pouladian-Kari (Ramin Pouladian-Kari v R, [2013] EWCA Crim 158).[214]  Mr. Pouladian-Kari had been convicted of shipping electrical switchgear to an Iranian company called Iran Tablo Company without the required export license and contrary to s.68(2) of the Customs and Excise Management Act 1979 and the Export Control Order.  He had been sentenced to 12 months in jail, suspended for 2 years, and ordered to complete 200 hours of unpaid work.  A co-accused, Arbrene Hussain, pled guilty and was sentenced to 6 months in jail, suspended for 2 years, and ordered to complete 100 hours of unpaid work. The conviction was overturned on the basis that the court Recorder had not dismissed a juror who had sent a note to the judge indicating that, in his place of work (which involved trade finance in the Middle East and North Africa), the particular transactions in the case would have been met with "automatic rejection . . . on compliance grounds."  The Court of Appeal held that leaving this juror on the case led to a "real possibility of unconscious jury bias such that a fair trial was not possible."  The Court also ruled that a re-trial was not in the public interest. In our 2012 Year-End Sanctions Update, we reported that UK citizen Michael Ranger had been sentenced to three and a half years jail time for supplying North Korean weapons to Azerbaijan in breach of the Export Control Order.  Mr. Ranger was refused leave to appeal his sentence in March 2013.[215] B.    Spain On January 11, 2013, the Spanish Interior Ministry announced that it had arrested two employees of Fluval Spain S.L. in relation to a shipment of nickel/chromium alloy valves destined (through UAE intermediaries) for Iran’s nuclear industry.  The arrests were the culmination of an investigation commenced in March 2012. The Spanish police also conducted a raid and search of Fluval Spain’s offices[216] and, on January 10, 2013, the Spanish authorities raided a related company, Lazaro Ituarte S.A., and seized documents and computers as part of that investigation.[217]  No formal charges against those men or the company have yet been made. In our 2012 Year-End Sanctions Update, we reported that in November 2012 Spanish customs officials had raided a company’s premises on suspicion of the supply of goods to Iran’s nuclear industry via Turkey.  The company, ONA Electroerosión S.A., has since denied the allegations which relate to three shipments of turbine propellers valued at US $1.2m and, as yet, no formal charges have been made.[218] C.    Sweden In our 2012 Year-End Sanctions Update and 2013 Mid-Year Sanctions Update, we reported that in December 2012 a Swedish man had been arrested and charged with attempting to export dual-use items in breach of Iranian sanctions.  On February 6, 2013, a court in Lund, Sweden, convicted the man of knowingly trying to export dual-use goods to Iran via intermediaries in Dubai.[219]  The man, whose identity has not been released, was given a suspended sentence. D.    Germany German media has reported that the German authorities are currently investigating 136 sanctions-related cases, of which two thirds relate to Iran.[220] In our 2013 Mid-Year Sanctions Update, we reported that on February 20, 2013, it was announced that the German authorities had charged two men (one Iranian, the other of dual German-Iranian nationality) with supplying engines for the Ababil III drone to Iran between 2008 and 2009.  The Frankfurt State Court has not yet decided whether to proceed to a trial.[221] In our 2012 Year-End Sanctions Update and 2013 Mid-Year Sanctions Update, we reported that four men had been arrested in Germany in November 2012 on suspicion of supplying parts to an Iranian nuclear reactor.  On April 26, 2013, the four men were charged with supplying 92 valves to an Iranian heavy water reactor in 2010 and 2011.  The valves were valued at several million Euros, and were transshipped via a number of Asian countries.[222]  The men were found guilty and sentenced in November 2013.[223] E.    Cyprus In our 2013 Mid-Year Sanctions Update, we reported that in April 2013, the Cypriot Supreme Court overturned an injunction granted by the Limassol District Court on the basis that to uphold the injunction would have served to frustrate the application of EU asset-freezing sanctions against Anatoly Ternavsky, a Belarussian oligarch included on the EU’s Belarussian sanctions list.[224] The dispute concerned control over a Cypriot company called Rayhill Limited, which has an indirect ownership interest in the Russian oil transport company Naftatrans. One shareholder of Rayhill had called a shareholder meeting, at which a new board of directors was appointed. A second Rayhill shareholder called Prime Limited, a British Virgin Islands (BVI) company beneficially owned by Mr. Ternavsky, did not attend the shareholder meeting but applied to Limassol District Court for an injunction to prevent the Cypriot Registrar of Companies from registering the new directors.  The Limassol court granted the injunction, and it was this judgment which was appealed to the Supreme Court. The Supreme Court held that to allow the injunction to stand would be to allow Mr. Ternavsky to deal with his assets within the EU, and thus would be contrary to the application of the EU’s asset-freezing sanctions. The case is an illustration of the potentially broad nature of the EU’s asset freezes.  The company owned by Mr. Ternavsky was physically located outside the EU (BVI) and is not itself included on the EU’s sanctions list.  Moreover, the underlying assets held through the company were also outside the EU (Russia).  Nonetheless, the Court looked through the corporate structure, and Mr. Ternavsky’s indirect and beneficial interest, to determine that Mr. Ternavsky was attempting to influence corporate actions in an EU company, and ruled that this would be in breach of the EU’s asset-freezing sanctions. F.    Countries Outside the EU Voluntarily Imposing the EU’s Sanctions It is increasingly the case that non-EU countries are agreeing voluntarily to enforce some or all of the restrictions imposed by EU sanctions.  For example, on May 14, 2013, the EU announced that 11 European countries outside the EU had signed up to the new Syrian sanctions regime that would allow some trade with the Syrian opposition.  These countries were:  Croatia,[225] Turkey, Macedonia, Montenegro, Iceland, Serbia, Albania, Liechtenstein, Norway, Moldova and Georgia.[226] IV.    BRITAIN’S OFFSHORE JURISDICTIONS Jersey In our 2012 Year-End Sanctions Update and our 2013 Mid-Year Sanctions Update, we reported that, although the United Kingdom had revoked its Iranian sanctions regime in favor of the heightened EU sanctions, Jersey was yet to issue a similar revocation as of the date of the Update.  This remains the case today, and the Money Laundering and Weapons Development (Directions) (Iran) (Jersey) Order, 2013, with its direction that any individual or entity carrying on "financial services business" from or within Jersey, or any Jersey entity carrying on such a business anywhere in the world, cease all business with Iranian banks, will (unless revoked in the interim) remain in force until January 19, 2014.[227] Isle of Man In our 2012 Year-End Sanctions Update, we reported that the Isle of Man had also been slow to follow the UK’s lead in revoking its Iran sanctions.  These were retrospectively revoked as of February 27, 2013, by way of the Financial Restrictions (Iran) (Revocation) Order, 2013 laid before the Manx Parliament on March 19, 2013.[228] Bermuda The piecemeal approach to sanctions legislation mentioned above in relation to the UK’s overseas territories has been abandoned by Bermuda. On March 21, 2013 Bermuda published the International Sanctions Regulations, 2013.[229]  Schedule 1 lists all the sanctions-related Orders in Council which apply in Bermuda — including Orders which had not previously been expressed to apply to Bermuda, while Schedule 2 lists those Orders now revoked from applying to Bermuda.  It is now essential to consult these Bermudian regulations directly, rather than looking to the UK legislation in determining the application of various sanctions to Bermuda. LOOKING FORWARD On November 24, 2013, the P5+1[230] successfully concluded negotiations with Iran on a Joint Plan of Action (hereinafter "the interim agreement")[231] to limit Iran’s nuclear activities and suspend certain United States and European Union sanctions on the country.  Both sides are now working towards a comprehensive agreement that would further limit Iran’s nuclear activities and significantly unwind U.S. and European Union sanctions.  While the interim agreement permits some previously prohibited transactions, the vast majority of sanctions on Iran will remain in place.  In exchange for a number of Iranian steps to curtail its uranium enrichment activities, limit its development of the Arak reactor, and allow for international inspections, the United States and the European Union agreed to take a number of sanctions-relaxing measures, including pausing efforts to further reduce Iran’s crude oil sales; enable the repatriation of an agreed amount of oil revenue held abroad; suspend sanctions on Iran’s petrochemical exports; suspend sanctions on gold and precious metals, as well as on Iran’s auto industry; and establish a financial channel to facilitate humanitarian trade for Iran’s domestic needs using Iranian oil revenues held abroad.[232]  The United States and European Union also agreed to refrain from imposing new nuclear-related United Nations Security Council, European Union and United States sanctions.  On January 20, 2014, the United States implemented the interim agreement and provided guidance concerning each sanction-relaxing measure it agreed to undertake pursuant to the agreement.[233]  OFAC announced that it would provide sanctions relief relating to certain activities and "associated services" which take place exclusively during the six month period beginning on January 20, 2014 and ending on July 20, 2014.[234]  The term "associated service" is interpreted as "any necessary service—including any insurance, transportation, or financial service—ordinarily incident to the underlying activity covered [by the interim agreement]."[235] U.S. agencies retain the authority to impose sanctions identified in the interim agreement for activities that occurred prior to January 20, 2014, as well as the authority to broadly impose sanctions under other authorities, such as those designed to combat the proliferation of weapons of mass destruction.[236]  In addition to the guidance, OFAC also released a list of FAQs related to the implementation of the interim agreement.[237] The European Union also implemented the interim agreement on January 20, 2014, by means of Council Regulation (EU) No 42/2014 (the Amending Regulation).[238]  The Amending Regulation removed restrictions on the insurance and reinsurance of Iranian crude oil, petroleum products and petrochemical products,[239] introduced bases for the licensing of transfers of funds and/or economic resources to the Iranian Ministry of Petroleum, so long as they are necessary for the purposes of importation or purchase of Iranian petrochemical products,[240] and raised the thresholds above which transactions with Iranian persons requiring prior notification and or authorization under Articles 30 and 30a of Regulation 267/2012.   In this latter respect, HM Government in the United Kingdom has issued revised and updated guidance on the notification and authorization requirements in the light of the Amending Regulation.[241]  The changes introduced by the Amending Regulation mean that the current threshold for transfers on "transactions regarding foodstuffs, healthcare, medical equipment or for agricultural or humanitarian purposes" requiring prior authorization increased to € 1 million.  The threshold for providing prior notification of personal remittances increased to € 400,000.  The prospects of reaching a comprehensive agreement remain uncertain.  The United States Congress continues to threaten to pass further sanctions legislation, potentially scuttling the agreement.  In addition, the Office of Foreign Assets Control—illustrating that it will continue aggressively enforcing sanctions regulations still in effect—recently announced new Iran sanctions designations.[242]   In the coming months, businesses should pay careful attention to what is and is not permitted under U.S. law; the interim agreement does not ease the majority of sanctions on Iran and companies eager to engage with the country may be surprised to learn that OFAC is aggressively enforcing the vast sanctions regime covering that country.    [1]   National Defense Authorization Act for Fiscal Year 2013 §§ 1241-55, Pub. L. No. 112-239, 126 Stat. 1632, 2004-18, codified at 22 U.S.C. §§ 8801-11.    [2]   National Defense Authorization Act for Fiscal Year 2012 § 1245, Pub. L. No. 112-81, 125 Stat. 1298, 1647-50, 22 U.S.C. § 8513a.    [3]   The Significant Reduction Exception may be applied to countries that significantly reduce the volume of crude oil purchases from Iran or reduced those purchases to zero and maintaining the absence of purchases.  22 U.S.C. § 8513a(d)(4)(D).    [4]   Rick Gladstone, Lawmakers Introduce Bipartisan Measure to Toughen Iranian Sanctions, N.Y. Times, Feb. 27, 2013, available at www.nytimes.com/2013/02/28/world/middleeast/lawmakers-offer-bill-to-toughen-iranian-sanctions.html.    [5]   Id.    [6]   Nuclear Iran Prevention Act of 2013, H.R. 850, 113th Cong. § 103 (2013).  The criteria for designation as a foreign terrorist organization is set forth in the Immigration and Nationality Act (8 U.S.C. § 1189).    [7]   Id.    [8]   Id.    [9]   The term "material support or resources" is defined as "any property, tangible or intangible, or service, including currency or monetary instruments or financial securities, financial services, lodging, training, expert advice or assistance, safehouses, false documentation or identification, communications equipment, facilities, weapons, lethal substances, explosives, personnel (1 or more individuals who may be or include oneself), and transportation, except medicine or religious materials."  18 U.S.C. § 2339A(b)(1).   [10]   18 U.S.C. § 2339B.   [11]   H.R. 850, §§ 214, 215.   [12]   Id. § 215.   [13]   Id. §§ 211-15.   [14]   Id. § 215.   [15]   Id. § 221.   [16]   Id. § 402.   [17]   Id. § 404.   [18]   Nuclear Weapons Free Iran Act of 2013, S. 1881, 113th Cong. (2013)   [19]   Id. §§ 101-03.   [20]   Id. § 105.   [21]   Id. § 101.   [22]   Id. § 102.   [23]   Id. § 103.   [24]   Id. § 104.   [25]   Id. §§ 202-03.   [26]   Id. § 301.   [27]   Id.   [28]   Id.   [29]   Id.   [30]   Exec. Order No. 13,645, 78 Fed. Reg. 33,945 (June 5, 2013).   [31]   Statement by the Press Secretary on the Announcement of Additional Sanctions Related to Iran, Office of the Press Secretary, The White House, (June 3, 2013) available at http://www.whitehouse.gov/the-press-office/2013/06/03/statement-press-secretary-announcement-additional-sanctions-related-iran.   [32]   Exec. Order No. 13,645, 78 Fed. Reg. 33,945, 33,950.   [33]   Office of Foreign Assets Control, Frequently Asked Questions and Answers, Question 289, available at http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#289 (last updated June 3, 2013) [hereinafter "OFAC FAQ"].   [34]   Exec. Order No. 13,645, 78 Fed. Reg. 33,945, 33,947-48.   [35]   Id. at 33,948-49.     [36]   Id.   [37]   Id. at 33,946.   [38]   Id.   [39]   Id. at 33,952.   [40]   Exec. Order No. 13,651, 78 Fed. Reg. 48,793 (Aug. 9, 2013).   [41]   Exec. Order No. 13,310, 68 Fed. Reg. 44,853 (July 30, 2003).   [42]   Iranian Financial Sanctions Regulations, 78 Fed. Reg. 16,403, 16,404 (Mar. 15, 2013) (codified at 31 C.F.R. pt. 561).   [43]   Id.   [44]   Id. at 16,406.   [45]   Id.   [46]   Id.   [47]   Exec. Order No. 13,622, 77 Fed. Reg. 45,897 (Aug. 2, 2012).   [48]   Iranian Financial Sanctions Regulations, 78 Fed. Reg. 16,403, 16,407.   [49]   Id. at 16,409.   [50]   Office of Foreign Assets Control, Statements of Licensing Policy on Activities Related to the Telecommunications and Agricultural Sectors of Syria and Petroleum and Petroleum Products of Syrian Origin for the Benefit of the National Coalition of Syrian Revolutionary and Opposition Forces or Its Supporters (July 12, 2013), http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20130612_44.aspx (last updated June 12, 2013).   [51]   Exec. Order No. 13,582, 76 Fed. Reg. 52,209 (Aug. 22, 2011).   [52]   22 U.S.C. §§ 8801-11.   [53]   Exec. Order No. 13,645, 78 Fed. Reg. 33,945 (June 5, 2013).   [54]   OFAC FAQ, Questions Related to the Issuance of Executive Order "Authorizing the Implementation of Certain Sanctions Set Forth in the Iran Freedom and Counter-Proliferation Act of 2012 and Additional Sanctions With Respect to Iran" and the Implementation of Certain Provisions of the Iran Freedom and Counter-Proliferation Act of 2012 (IFCA), http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/ques_index.aspx#ifca (last updated Oct. 29, 2013).   [55]   Exec. Order No. 13,599, 77 Fed. Reg. 6659 (Feb. 8, 2012).   [56]   Office of Foreign Assets Control, Technical Amendments to Counter-Terrorism Sanctions Regulations Implemented by OFAC, 78 Fed. Reg. 38,574 (June 27, 2013).   [57]   31 C.F.R. Part 594.   [58]   31 C.F.R. Part 595.   [59]   31 C.F.R. Part 597.   [60]   Exec. Order No. 12,947, 60 Fed. Reg. 5079 (Jan. 25, 1995).   [61]   Exec. Order No. 13,224, 66 Fed. Reg. 49,079 (Sept. 25, 2001).   [62]   Office of Foreign Assets Control, Guidance on the Sale of Food, Agricultural Commodities, Medicine, and Medical Devices by Non-U.S. Persons to Iran (July 25, 2013), http://www.treasury.gov/resource-center/sanctions/Programs/Documents/iran_guidance_med.pdf (last updated July 25, 2013).   [63]   Office of Foreign Assets Control, Truncation of Records in OFAC’s Delimited and Fixed-width Legacy Files (Aug. 8, 2013), http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/20130806.aspx (last updated Aug. 8, 2013).   [64]   Id.   [65]   Office of Foreign Assets Control, Removal of 32 bit .exe SDN Archive (Dec. 3, 2013), http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/32bitexe.aspx (last updated Dec. 3, 2013).   [66]   Office of Foreign Assets Control, Removal of 32 and 16 bit .exe PLC Archives (Dec. 5, 2013), http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/20131205.aspx (last updated Dec. 5, 2013).   [67]   Office of Foreign Assets Control, General License D:  General License with Respect to the Exportation and Reexportation of Certain Services, Software, and Hardware Incident to the Exchange of Personal Communications (May 30, 2013), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/iran_gld.pdf.   [68]   31 C.F.R. Part 560.   [69]   31 C.F.R. § 560.516.   [70]   Office of Foreign Assets Control, General License 31 C.F.R. 560.530(a)(3):  Authorizing the Exportation or Reexportation of Medicine and Basic Medical Supplies to Iran:  List of Basic Medical Supplies (July 25, 2013), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/iran_gl_med_supplies.pdf.  The original list can be found at:  Office of Foreign Assets Control, General License 31 C.F.R. 560.530(a)(3):  Authorizing the Exportation or Reexportation of Medicine and Basic Medical Supplies to Iran:  List of Basic Medical Supplies (Oct. 22, 2012), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/med_supplies_10222012.pdf.   [71]   OFAC FAQ, Questions Regarding the General License (GL) for the Export of Basic Medical Supplies to Iran Authorized Under 31 C.F.R. 560.530(a)(3)(i) of the Iranian Transactions and Sanctions Regulations (July 25, 2013), http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/ques_index.aspx#iran_med (last updated Oct. 29, 2013).   [72]   Office of Foreign Assets Control, General License E:  Authorizing Certain Services in Support of Nongovernmental Organizations’ Activities in Iran (Sept. 10, 2013), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/iran_gle.pdf.   [73]   Office of Foreign Assets Control, General License F:  Authorizing Certain Services in Support of Professional and Amateur Sports Activities and Exchanges Involving the United States and Iran (Sept. 10, 2013), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/iran_glf.pdf.   [74]   Office of Foreign Assets Control, Revocation of Weapons of Mass Destruction Proliferators Sanctions Regulations General License No. 7, available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/wmd_gl7_rev.pdf.   [75]   31 C.F.R. Part 544.   [76]   31 C.F.R. Part 560.   [77]   Samuel Rubenfeld, Iran’s Ship Escape Shows Cat-and-Mouse Game of Sanctions, Corruption Currents (blog), Wall St. J., Jan. 18, 2013, available at http://blogs.wsj.com/corruption-currents/2013/01/18/iran-ships-escape-shows-cat-and-mouse-game-of-sanctions/.    [78]   Iranian Ship Held in Sri Lanka Flees Country’s Waters, Reuters, Jan. 17, 2013, available at http://www.reuters.com/article/2013/01/17/us-iran-vessel-srilanka-idUSBRE90G0P120130117.     [79]   Office of Foreign Assets Control, General License No. 5C:  Specified Transactions Involving Certain Blocked Property Authorized (Oct. 30, 2013), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/wmd_gl5c.pdf.   [80]   31 C.F.R. Part 544.   [81]   31 C.F.R. Part 560.   [82]   Exec. Order No. 13,382, 70 Fed. Reg. 38,567 (July 1, 2005).   [83]   Office of Foreign Assets Control, General License No. 8:  Specified Transactions Involving Certain Blocked Property Authorized (Nov. 29, 2013), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/iran_gl8.pdf.   [84]   Exec. Order 13,382, 70 Fed. Reg. 38,567 (July 1, 2005).   [85]   Office of Foreign Assets Control, General License No. 19:  General License with Respect to Asia Green Development Bank, Ayeyarwady Bank, Myanma Economic Bank, and Myanma Investment and Commercial Bank (Feb. 22, 2013), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/burmagl19.pdf.   [86]   31 C.F.R. Part 537.   [87]   31 C.F.R. § 537.311.   [88]   Office of Foreign Assets Control, General License No. 16:  Authorizing Certain Services to the National Coalition of Syrian Revolutionary and Opposition Forces (Mar. 14, 2013), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/syria_gl16.pdf.   [89]   Samuel Rubenfeld, Treasury Allows US Aid to Syrian Opposition, Corruption Currents (blog), Wall St. J., Mar. 15, 2013, available at http://blogs.wsj.com/corruption-currents/2013/03/15/treasury-allows-us-aid-to-syrian-opposition/.    [90]   22 C.F.R. Part 121.   [91]   Exec. Order No. 13,224, 66 Fed. Reg. 49,079 (Sept. 25, 2001).   [92]   Office of Foreign Assets Control, Syria General License No. 11A:  Authorizing Certain Services in Support of Nongovernmental Organizations’ Activities in Syria (July 12, 2013), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/syriagl11a.pdf.   [93]   Exec. Order No. 13,582, 76 Fed. Reg. 52,209 (Aug. 22, 2011).   [94]   Office of Foreign Assets Control, General License No. 1:  Certain Academic and Professional Exchanges Authorized (Apr. 15, 2013), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/sudan_gl1.pdf.   [95]   31 C.F.R. Part 538.   [96]   Samuel Rubenfeld, U.S. Allows Transactions with Two Zimbabwean Banks, Corruption Currents (blog), Wall St. J., Apr. 24, 2013, available at http://blogs.wsj.com/riskandcompliance/2013/04/24/us-allows-transactions-with-2-zimbabwean-banks/.   [97]   Office of Foreign Assets Control, Zimbabwe General License No. 1, General License with Respect to Agricultural Development Bank of Zimbabwe and Infrastructure Development Bank of Zimbabwe (Apr. 24, 2013), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/zimbabwe_gl1.pdf.   [98]   Id.   [99]   Office of Foreign Assets Control, General License No. 7a:  Transactions with the Palestinian Authority authorized (May 14, 2013), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/plc_gl7a.pdf. [100]    Office of Foreign Assets Control, The Use of Exchange Houses and Trading Companies to Evade U.S. Economic Sanctions Against Iran, (Jan. 10, 2013), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/20130110_iran_advisory_exchange_house.pdf [101]   Id.  [102]   Id. [103]   OFAC FAQ, Questions Relating to the Implementation of Section 504 of the Iran Threat Reduction and Syria Human Rights Act of 2012, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/ques_index.aspx#tra_504 (last updated Feb. 6, 2013). [104]   OFAC FAQ, Question 254, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#254. [105]   Office of Foreign Assets Control, Clarifying Guidance:  Humanitarian Assistance and Related Exports to Iranian People, available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/hum_exp_iran.pdf ("Clarifying Guidance: Humanitarian Assistance"). [106]   Office of Foreign Assets Control, OFAC issues Guidance relating to key provisions of the Iran Threat Reduction and Syria Human Rights Act of 2012; OFAC Issues Clarifying Guidance on Humanitarian Assistance and Related Exports to the Iranian People (Feb. 6, 2013), available at http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20130206.aspx. [107]   Clarifying Guidance: Humanitarian Assistance at 2-4. [108]   Id. at 4. [109]   Office of Foreign Assets Control, Report of Licensing Activities Pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000 (July – Sept. 2012), available at http://www.treasury.gov/-resource-center/sanctions/Documents/4quarter2012.pdf. [110]   Office of Foreign Assets Control, Terrorist Assets Report: Calendar Year 2012 Twenty-first Annual Report to the Congress on Assets in the United States Relating to Terrorist Countries and International Terrorism Program Designees (May 28, 2013), available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/tar2012.pdf. [111]   Id. [112]   Id. at 5. [113]   Id. at 6. [114]   Id. at 7. [115]   Id. at 9. [116]    Office of Foreign Assets Control, Iran Designations; Iran Sanctions Act Action (Mar. 14, 2013),  http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20130314.aspx. [117]    Id. [118]    Office of Foreign Assets Control, Kingpin Act Designations; Foreign Sanctions Evaders Designations; Executive Order 13622 Designations; Iran Sanctions Designations; Non-proliferation Designations; Counter Terrorism Designations (May 31, 2013), available at http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20130531.aspx. [119]    Office of Foreign Assets Control, Iran Designations; Iran Sanctions Act Action (Mar. 14, 2013), available at http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20130314.aspx. [120]    Supra note 118. [121]    Supra note 119. [122]    Supra note 118. [123]    Office of Foreign Assets Control, Enforcement Information for January 2, 2013 (Jan. 2, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20130102_ellman.pdf. [124]   On October 22, 2012, OFAC changed the heading of 31 C.F.R. part 560 from the Iranian Transactions Regulations ("ITR") to the Iranian Transactions and Sanctions Regulations ("ITSR"), amended the renamed ITSR, and reissued them in their entirety.  See 77 Fed. Reg. 64,664 (Oct. 22, 2012). [125]    Office of Foreign Assets Control, Enforcement Information for January 18, 2013 (Jan. 18, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20130118_daltech.pdf. [126]    Office of Foreign Assets Control, Enforcement Information for February 1, 2013 (Feb. 1, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20130201_offshore_marine.pdf. [127]    Office of Foreign Assets Control, Enforcement Information for February 21, 2013 (Feb. 21, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/02212013.pdf. [128]    Office of Foreign Assets Control, Enforcement Information for February 22, 2013 (Feb. 21, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/02222013.pdf. [129]    Id. [130]    Office of Foreign Assets Control, Enforcement Information for March 5, 2013 (Mar. 5, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20130305_egl.pdf. [131]    Office of Foreign Assets Control, Enforcement Information for March 21, 2013 (Mar. 21, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20130321_maritech.pdf. [132]    Office of Foreign Assets Control, Enforcement Information for April 12, 2013 (Apr. 12, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20130412_san.pdf. [133]    Office of Foreign Assets Control, Enforcement Information for May 9, 2013 (May 9, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20130509_american_club.pdf. [134]    Office of Foreign Assets Control, Enforcement Information for June 12, 2013 (June 12, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20130612_atp.pdf. [135]    Office of Foreign Assets Control, Enforcement Information for June 27, 2013 (June 27, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20130627_wellsfargo.pdf. [136]    Office of Foreign Assets Control, Enforcement Information for June 28, 2013 (June 28, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20130628_intesa.pdf. [137]    Office of Foreign Assets Control, Enforcement Information for July 19, 2013 (July 19, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20130719_stanley_drilling.pdf. [138]    Office of Foreign Assets Control, Enforcement Information for July 22, 2013 (July 22, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20130722_american_express_trs.pdf. [139]    Office of Foreign Assets Control, Enforcement Information for September 6, 2013 (Sept. 6, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/09062013.pdf. [140]    Office of Foreign Assets Control, Enforcement Information for September 9, 2013 (Sept. 9, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20130909_world_fuel.pdf. [141]    Office of Foreign Assets Control, Enforcement Information for September 26, 2013 (Sept. 26, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/09262013.pdf. [142]    Office of Foreign Assets Control, Enforcement Information for October 21, 2013 (Oct. 21, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20131021_alma.pdf. [143]    Office of Foreign Assets Control, Enforcement Information for October 24, 2013 (Oct. 24, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20131024_ameron.pdf. [144]    Office of Foreign Assets Control, Enforcement Information for October 25, 2013 (Oct. 25, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20131025_kmt.pdf. [145]    Office of Foreign Assets Control, Enforcement Information for November 26, 2013 (Nov. 26, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20131126_weatherford.pdf. [146]    Office of Foreign Assets Control, Enforcement Information for December 3, 2013 (Dec. 3, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20131203_compass.pdf. [147]    Office of Foreign Assets Control, Enforcement Information for December 11, 2013 (Dec. 11, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/12112013.pdf. [148]    The Tom Lantos Block Burmese JADE (Junta’s Anti-Democratic Efforts) Act of 2008, Pub. L. No. 110–286, 122 Stat. 2632, 50 U.S.C. § 1701 note. [149]    Office of Foreign Assets Control, Enforcement Information for December 17, 2013 (Dec. 17, 2013), available at http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20131217_hsbc.pdf. [150]   Consent Order Under New York Banking Law § 44, Royal Bank of Scotland PLC, New York Branch, New York State Dep’t of Fin. Servs. (Dec. 11, 2013), available at http://www.dfs.ny.gov/about/press2013/131211-rbs.pdf. [151]   Id. [152]   Id. [153]   Consent Order Under New York Banking Law § 44, Bank of Tokyo Mitsubishi-UFJ, Ltd., New York State Dep’t of Fin. Servs. (Dec. 11, 2013), available at http://www.dfs.ny.gov/about/press2013/pr201306201-tokyo.pdf. [154]   Id. [155]   Id. [156]   Id. [157]   Id. [158]   Id. [159]   Letter from Daniel Alter, General Counsel, New York State Department of Financial Services, to All Alien Accredited Reinsurers Writing Business in New York State (July 24, 2013), available at http://www.dfs.ny.gov/insurance/circltr/2013/cl2013_06.htm.  [160]   Id. [161]   Id. [162]   Id. [163]   See European Commission, Restrictive measures(sanctions) in force (Regulations based on Article 215 TFEU and Decisions adopted in the framework of the Common Foreign and Security Policy), July 31, 2013, available at http://eeas.europa.eu/cfsp/sanctions/docs/measures_en.pdf. [164]   See Council Decision 2013/534/CFSP, 2013 O.J. (L 288) 69 and Council Implementing Regulation (EU) No 1054/2013, 2013 O.J. (L288) 1. [165]   See Council Decision 2013/798/CFSP, 2013 O.J. (L 352) 51. [166]   See Council Implementing Regulation (EU) No 793/2013, 2013 O.J. (L 223) 1, 3. [167]   See Council Regulation (EU) No 49/2013, 2013 O.J. (L 20) 25. [168]   See Council Decision 2013/515/CFSP, 2013 O.J. (L 280) 25. [169]   See Council Decision 2013/685/CFSP, 2013 O.J. (L 316) 46 and Council Implementing Regulation (EU) No 1203/2013, 2013 O.J. (L 316) 1. [170]   Guidelines on the eligibility of Israeli entities and their activities in the territories occupied by Israel since 1967 for grants, prizes and financial instruments funded by the EU from 2014 onwards, 2013 O.J. (C 205) 9. [171]   See Council Decision 2013/183/CFSP, 2013 O.J. (L 111) 52 and Council Regulation (EU) No 296/2013, 2013 O.J. (L 90) 4. [172]   See Council Decision 2013/182/CFSP, 2013 O.J. (L111) 50 and Council Regulation (EU) No 488/2013, 2013 O.J. (L 141) 1. [173]   See Council Decision 2013/477/CFSP, 2013 O.J. (L 257) 18. [174]   See Council Regulation (EU) No 401/2013, 2013 O.J. (L 121) 1. [175]   See Council Decision 2013/659/CFSP, 2013 O.J. (L 306) 15 and Council Regulation (EU) No 1153/2013, 2013 O.J. (L 306) 1. [176]   See Council Decision 2013/255/CFSP, 2013 O.J. (L 147) 14 and Council Regulation (EU) No 325/2013, 2013 O.J. (L 102) 1. [177]   See, e.g., James Kanter, European Nations End Weapons Embargo, Creating Path to Arming Syrian Rebels, N.Y. Times, May 28, 2013, at A8, available at http://www.nytimes.com/2013/05/28/world/middleeast/syria.html?pagewanted=all&_r=0. [178]   See Council Regulation (EU) No 1332/2013, 2013 O.J. (L 335) 3. [179]   See Council Decision 2013/160/CFSP, 2013 O.J. (L 90) 95 and Council Regulation (EU) No 298/2013, 2013 O.J. (L 90) 48. [180]   Press Release 7864/1/13 REV 1, European Union, Declaration by the High Representative, Catherine Ashton, on behalf of the European Union with regard to the successful Constitutional referendum in Zimbabwe and the review of EU restrictive measures (Mar. 25, 2013), http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/cfsp/136501.pdf. [181]   See Council Decision 2013/469/CFSP, 2013 O.J. (L 252) 31 and Council Regulation (EU) No 915/2013, 2013 O.J. (L 252) 23.  [182]   During 2013 the UK has published twelve such Orders in Council for its Overseas Territories in relation to, inter alia, Burma, Guinea, Iran, Libya, North Korea, Somalia, Syria, Zimbabwe, and UN sanctions more generally, available at http://www.legislation.gov.uk/2013?title=overseas%20territories. [183]   HM Treasury FAQ, Financial Sanctions:  Frequently Asked Questions (FAQs), August 2013, here. [184]   Case T-496/10, Bank Mellat v. Council, 2013 E.C.R. ___, (Jan. 29, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=133103&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=392715; Case T-494/10, Bank Saderat v. Council, 2013 E.C.R. ___ (Feb. 5, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=133481&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=392715; Case T-421/11, Qualitest FZE v. Council, 2012 E.C.R. ___ (Dec. 5, 2012), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=131381&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=392715;  and  Case C-392/11, Iran Transfo v. Council, 2013 E.C.R. ___ (May 16, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=137431&pageIndex=0&doclang=DE&mode=lst&dir=&occ=first&part=1&cid=392715 (judgment not available in English; English summary at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2013:189:0020:02:EN:HTML). [185]   Cases T-128/12 and T-182/12, HTTS Hanseatic Trade Trust & Shipping GmbH v. Council, 2013 E.C.R. ___ (Jun. 12, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=138321&pageIndex=0&doclang=DE&mode=lst&dir=&occ=first&part=1&cid=381315 (judgment not available in English; English summary at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2013:225:0076:02:EN:HTML). [186]   Case T-495/10, Bank Saderat plc v. Council, 2013 E.C.R. ___ (Mar. 20, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=135263&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=504774; and Case T-492/10, Melli Bank plc v. Council, 2013 E.C.R. ___ (Feb. 20, 2013), available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010TJ0492:EN:HTML. [187]   Case T-8/11, Bank Kargoshaei v. Council, 2013 E.C.R. ___ (Sept. 16, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=141422&pageIndex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=1386786; and Case T-489/10, Islamic Republic of Iran Shipping Lines v. Council, 2013 E.C.R. ___ (Sept. 16, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=141406&pageIndex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=1386786. [188]   Case T-13/11, Post Bank Iran v. Council, 2013 E.C.R. ___ (Sept. 6, 2013), available at http://curia.europa.eu/juris/document/document.jsf?docid=140733&mode=req&pageIndex=1&dir=&occ=first&part=1&text=&doclang=EN&cid=5274300; Case T-12/11, Iran Ins. Co. v. Council, 2013 E.C.R. ___ (Sept. 6, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=140723&pageIndex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=5275098; Case T-57/12, Good Luck Shipping LLC v. Council, 2013 E.C.R. ___ (Sept. 6, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=140732&pageIndex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=5275571; and Cases T-4/11 and T-5/11, Export Dev. Bank of Iran v. Council, 2013 E.C.R. ___ (Sept. 6, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=140727&pageIndex=0&doclang=FR&mode=req&dir=&occ=first&part=1&cid=5275941 (judgment not available in English; English summary at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2013:304:0011:0012:EN:PDF). [189]   Cases T-42/12 and T-181/12, Naser Bateni v. Council, 2013 E.C.R. ___ (Sept. 6, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=140726&pageIndex=0&doclang=FR&mode=req&dir=&occ=first&part=1&cid=5276389 (not available in English). [190]   Case T-493/10, Persia Int’l Bank plc v. Council, 2013 E.C.R. ___ (Sept. 6, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=140735&pageIndex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=5276843. [191]   Case T-110/12, Iranian Offshore Eng’g & Constr. Co. v. Council, 2013 E.C.R. ___ (Sept. 6, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=140724&pageIndex=0&doclang=FR&mode=req&dir=&occ=first&part=1&cid=5277319 (judgment not available in English; English summary at http://curia.europa.eu/juris/document/document.jsf?text=&docid=140741&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=392715). [192]   Case T-24/11, Bank Refah Kargaran v. Council, 2013 E.C.R. ___ (Sept. 6, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=140730&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=5277656. [193]   Case C-280/12 P, Council v. Fulmen & Fereydoun Mahmoudian, 2013 ECR ____ (Nov. 28, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=144985&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=190190. [194]   Case C-348/12 P, Council v. Mfg. Support & Procurement Kala Naft, 2013 ECR ____ (Nov. 28, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=144982&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=190222. [195]   Case T-552/12, North Drilling Co. v. Council, 2013 E.C.R. ___ (Nov. 12, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=144404&pageIndex=0&doclang=FR&mode=lst&dir=&occ=first&part=1&cid=190803 (not available in English). [196]   Maya Lester, Proposals for Rule Changes in the European Court to Permit Use of Classified Evidence, European Sanctions Blog (May 10, 2013), http://europeansanctions.com/2013/05/10/proposals-for-rule-changes-in-the-european-court-to-permit-use-of-classified-evidence. [197]   See Council Regulation (EU) No 971/2013, 2013 O.J. (L 272) 1. [198]   Case T-5/13 R, Iran Liquefied Nat’l Gas Co. v. Council, 2013 E.C.R. ___  (Sept. 27, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=142988&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=392715. [199]   Case T-383/11, Eyad Makhlouf v. Council, 2013 E.C.R. ___ (Sept. 13, 2013), available at  http://curia.europa.eu/juris/document/document.jsf?text=&docid=141084&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=477670, Case T-563/11, Issam Anbouba v. Council, 2013 E.C.R. ___ (Sept. 13, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=141090&pageIndex=0&doclang=FR&mode=req&dir=&occ=first&part=1&cid=477783 (not available in English), and Case T-592/11, Issam Anbouba v. Council, 2013 E.C.R. ___ (Sept. 13, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=141091&pageIndex=0&doclang=FR&mode=req&dir=&occ=first&part=1&cid=477890 (not available in English). [200]   The three cases are:  Case T-187/11, Mohamed Trabelsi v. Council, 2013 E.C.R. ___ (May 28, 2013), available http://curia.europa.eu/juris/document/document.jsf?text=&docid=137742&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=392715; Case T-200/11, Fahed Mohamed Sakher Al Matri v. Council, 2013 E.C.R. ___ (May 28, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=137744&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1&cid=392423; and Case T-188/11, Mohamed Slim Ben Mohamed Hassen Ben Salah Chiboub v. Council, 2013 E.C.R. ___ (May 28, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=137745&pageIndex=0&doclang=FR&mode=lst&dir=&occ=first&part=1&cid=392715 (not available in English). [201]   Council Regulation (EU) No 735/2013, 2013 O.J. (L 204) 23. [202]   Case T-119/11, Simone Gbagbo v. Council, 2013 E.C.R. ___ (Apr. 25, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=136863&pageIndex=0&doclang=FR&mode=lst&dir=&occ=first&part=1&cid=401657 (judgment not available in English; English summary at http://curia.europa.eu/juris/document/document.jsf?text=&docid=138534&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=401657) and Case T-130/11, Marcel Gossio v. Council, 2013 E.C.R. ___ (Apr. 25, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=136861&pageIndex=0&doclang=FR&mode=lst&dir=&occ=first&part=1&cid=402388 (judgment not available in English; English summary at http://curia.europa.eu/juris/document/document.jsf?text=&docid=138525&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=402388). [203]   Joined Cases C-478/11 to C-482/11, Gbagbo v. Council, 2013 E.C.R. ___ (Apr. 23, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=136661&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=402388. [204]   The principal case in this line of authority is T-145/09, Bredenkamp v. Comm’n, 2012 E.C.R. ___ (Sept. 6, 2012), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=127222&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=403619. [205]   Case C-239/12 P, Abdulbasit Abdulrahim v. Comm’n and Council, 2013 E.C.R. ___ (May 28, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=137741&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=402388, and Case C-183/12 P, Chafiq Ayadi v. Comm’n, 2013 E.C.R. ____ (June 6, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=138089&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=402388. [206]   See Melli Bank plc v. Holbud Ltd. [2013] EWHC 1506 (Comm), 2013 WL 1904261. [207]   Bank Mellat v. Her Majesty’s Treasury (No. 2), [2013] UKSC 39, [27], available at http://www.supremecourt.gov.uk/decided-cases/docs/UKSC_2011_0040_Judgment.pdf. [208]   Bank Mellat v. Her Majesty’s Treasury (No. 1), [2013] UKSC 38, available at http://www.supremecourt.gov.uk/decided-cases/docs/UKSC_2011_0040_Judgment.pdf. [209]   Litigating Iran Sanctions. The U.K. Supreme Court wades into foreign policy, Wall St. J., June 25, 2013, available at http://online.wsj.com/article/SB10001424127887324183204578567160760847942.html. [210]   Bank Melli and Persia Int’l Bank v. Shere Shipping et al [2013] EWHC 2321 (Comm). [211]   Tom Harper, Zimbabwean arms dealer sues Foreign Office for freezing assets, Independent, June 21, 2013, available at http://www.independent.co.uk/news/uk/crime/zimbabwean-arms-dealer-sues-foreign-office-for-freezing-assets-8669188.html [212]   Financial Conduct Authority, Thematic Review. Banks’control of financial crime risks in trade finance (TR13/3), available at http://www.fca.org.uk/static/documents/thematic-reviews/tr-13-03.pdf. [213]   Richard Mably, UK blocks Shell paying Iran oil debt in food, medicine, Reuters, Apr. 22, 2013, available at http://www.reuters.com/article/2013/04/22/shell-iran-debt-idUSL6N0D903E20130422 [214]   Ramin Pouladian-Kari (Ramin Pouladian-Kari v R, [2013] EWCA Crim 158, available at http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Crim/2013/158.html. [215]   Damien McElroy, North Korea and the British arms dealer, The Telegraph, Jul. 3, 2013, available at http://www.telegraph.co.uk/news/worldnews/asia/northkorea/10143946/North-Korea-and-the-British-arms-dealer.html. [216]   Kings College London, Department of War Studies, Centre for Science and Security Studies, Alpha Non-proliferation Hub, About Proliferation, Case Studies, Fluval Spain S.L, available at http://www.kcl.ac.uk/sspp/departments/warstudies/research/groups/csss/alpha/About-proliferation/Case-Studies/Valves/Fluval-Spain-SL.aspx. [217]   Basque Firm Suspected of Sending Forbidden Machinery to Iran, EITB World News, Jan. 11, 2013, available at http://www.eitb.com/en/news/world/detail/1223382/lazaro-ituarte-iran–firm-suspected-exporting-machinery-iran/. [218]   David Roman and Ilan Brat, Spain Raids Company Over Suspected Iran Exports, Wall St. J., Nov. 26, 2012, available at  http://online.wsj.com/article/SB10001424127887324469304578142892948556144.html. [219]   Swedish Man Convicted for Nuclear Use Export to Iran, Foreign Affairs Committee of the National Council of Resistance of Iran, News, Nuclear, Feb. 6, 2013, available at http://www.ncr-iran.org/en/news/nuclear/12792-swedish-man-convicted-for-nuclear-use-export-to-iran. [220]   Sven Pohle, Iran Embargo Violations on Trial, Deutsche Welle, July 24, 2013, http://www.dw.de/iran-embargo-violations-on-trial/a-16974046. [221]   David Rising, Germany Charges 2 With Selling Iran Drone Motors, Associated Press, Feb. 20, 2013, available at http://bigstory.ap.org/article/germany-charges-2-selling-iran-drone-motors. [222]   Germany Charges Four Over Iran Nuclear Equipment Sales, Global Post, Apr. 29, 2013, available at http://www.globalpost.com/dispatch/news/afp/130429/germany-charges-four-over-iran-nuclear-equipment-sales. [223]   German Men Sentenced for Smuggling Nuclear Components to Iran, Times of Israel, Nov. 16, 2013, available at http://www.timesofisrael.com/german-men-sentenced-for-smuggling-nuclear-components-to-iran/. [224]   Cypriot Court Denied Defence to Belarusian Oligarch due to Sanctions, Charter 97, Apr. 4, 2013, available at http://www.charter97.org/en/news/2013/4/4/67507/. [225]   Croatia became part of the European Union as of July 1, 2013. This had two immediate consequences:  (i) Croatian individuals and companies must now comply with the various EU sanctions regimes; and (ii) there are no longer any restrictions on the sale of dual-use goods to Croatia. [226]   Several Non-EU states To Apply Changes Made to Syria Oil Sanctions, RTT News, May 14, 2013, available at http://www.rttnews.com/2116932/several-non-eu-states-to-apply-changes-made-to-syria-oil-sanctions.aspx?type=gn&utm_source=google&utm_campaign=sitemap. [227]   Money Laundering and Weapons Development (Directions) (Iran) (Jersey) Order, 2013, available at http://www.jerseylaw.je/Law/display.aspx?url=lawsinforce%5chtm%5cROFiles%5cR%26OYear2013%2fR%26O-007-2013.htm. [228]   Financial Restrictions (Iran) (Revocation) Order, 2013, S.D. 0067/13, available at http://www.tynwald.org.im/links/tls/SD/2013/2013-SD-0067.pdf. [229]   International Sanctions Regulations, 2013, BR 14/2013, available at http://www.bermudalaws.bm/Laws/Annual%20Laws/2013/Statutory%20Instruments/International%20Sanctions%20Regulations%202013.pdf. [230]   The P5+1 includes the five permanent members of the United Nations Security Council (the United States, United Kingdom, France, China, and Russia, i.e. the "P5") plus Germany.  This group is also sometimes referred to as the E3+3.      [231]   Joint Plan of Action (Nov. 24, 2013), here. [232]   For a more in-depth discussion of the agreement, see Client Alert, Gibson, Dunn & Crutcher, LLP, Iran Nuclear Agreement Reached (Dec. 5, 2013), http://www.gibsondunn.com/publications/pages/Iran-Nuclear-Agreement-Reached.aspx. [233]    Office of Foreign Assets Control, Guidance Relating to the Provision of Certain Temporary Sanctions Relief in Order to Implement the Joint Plan of Action Reached on November 24, 2013, Between the P5+1 and the Islamic Republic of Iran, (Jan. 20, 2014), http://www.treasury.gov/resource-center/sanctions/Programs/Documents/jpoa_guidance.pdf (last updated Jan. 20, 2014). [234]    Id. [235]    Id. [236]    Id. [237]    Office of Foreign Assets Control FAQ, Frequently Asked Questions Relating to the Temporary Sanctions Relief to Implement the Joint Plan of Action Between the P5+1 and the Islamic Republic of Iran, http://www.treasury.gov/resource-center/sanctions/Programs/Documents/jpoa_faqs.pdf (last updated Jan. 20, 2014). [238]   See Council Regulation 20 January 2014 amending Regulation (EU) No 267/2012 concerning restrictive measures against Iran, 2014 O.J. (L 15) 18. [239]   See id., at arts. 11(1) and 13(3), 2014 O.J. (L 15) 18, 18. [240]   See id., at art. 28b , 2014 O.J. (L15) 18, 19. [241]   See HM Treasury, Guidance On Whether a Transfer of Funds that is Covered by EU Regulation 267/2012 on Iran Requires Prior Notification or Prior Authorisation by HM Treasury (Jan. 21, 2014), here. [242]   Office of Foreign Assets Control, Iran Sanctions Designations; Non-proliferation Designations (Dec. 12, 2013), http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20131212.aspx (last updated Dec. 12, 2013).      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 lawyers: United States:Judith A. Lee – Washington, D.C. (+1 202-887-3591, jalee@gibsondunn.com)Marcellus A. McRae – Los Angeles (+1 213-229-7675, mmcrae@gibsondunn.com)Daniel P. Chung (+1 202-887-3729, dchung@gibsondunn.com)Andrea Farr – Washington, D.C. (+1 202-955-8680, afarr@gibsondunn.com)Eric Lorber – Washington, D.C. (+1 202-877-8518, elorber@gibsondunn.com)Lindsay M. Paulin – Washington, D.C. (+1 202-887-3701, lpaulin@gibsondunn.com)Michael Willes - Los Angeles (+1 213-229-7094, mwilles@gibsondunn.com)     David A. Wolber – New York (+1 212-351-2384, dwolber@gibsondunn.com)Annie Yan – Washington, D.C. (+1 202-887-3547, ayan@gibsondunn.com) Europe:Peter Alexiadis – Brussels (+32 2 554 72 00, palexiadis@gibsondunn.com)Attila Borsos – Brussels (+32 2 554 72 10, aborsos@gibsondunn.com)Patrick Doris – London (+44 (0)207 071 4276, pdoris@gibsondunn.com)Penny Madden – London (+44 (0)20 7071 4226, pmadden@gibsondunn.com)Mark Handley – London (+44 (0)207 071 4277, mhandley@gibsondunn.com) © 2014 Gibson, Dunn & Crutcher LLP Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

February 5, 2014 |
Webcast – Congressional Investigations 2014

​During this complimentary briefing, Gibson Dunn lawyers, joined by Rob Borden, Director of Oversight for House Majority Leader Eric Cantor, discuss the unique features of Congressional and other legislative branch investigations and where Congress is likely to focus its investigative and oversight resources in the second session of the 113th Congress and beyond. Last year was a busy one for congressional investigators. A number of investigations were launched or continued, focusing on a variety of industries, including health insurers, Affordable Care Act contractors, other government contractors, companies with offshore subsidiaries, technology, energy and financial services firms, to name a few. A number of these investigations will continue into 2014, and new investigations will be launched. Several committees and subcommittees will chart new investigative and oversight courses over the coming year. Our panelists review how congressional investigations work; who the key players are; and what investigative committees are likely to focus on in the current congressional session. The panelists from Gibson Dunn also cover what a congressional investigation could mean to your firm.   Our Panelists: Michael Bopp — Chairs the firm’s Congressional Investigations practice group; member of the firm’s White Collar Defense and Investigations and Crisis Management practices. Mr. Bopp is a former Staff Director and Chief Counsel of the Committee of Homeland Security and Governmental Affairs, one of the Senate’s largest committees and most expansive in terms of jurisdiction. He has led or played a key role in major investigations in both the Senate and House of Representatives as well as three special investigations. In these capacities, he developed the strategy and set the agenda for several investigations, conducted more than 100 depositions or witness interviews, managed dozens of subpoenas and massive document discovery efforts, and orchestrated more than 100 committee hearings. F. Joseph Warin — Co- Chair of the firm’s White Collar Defense and Investigations practice and former Assistant United States Attorney in Washington, D.C. Mr. Warin has been ranked as a leading white collar criminal defense, securities compliance and enforcement attorney by 2013 Chambers USA: America’s Leading Lawyers for Business, 2006 – 2014 Best Lawyers in America, and named a Top Lawyer for Criminal Defense by Washingtonian magazine and a White Collar Law MVP by Law360. Mr. Warin’s areas of expertise include white collar crime and securities enforcement, including Foreign Corrupt Practices Act investigations, False Claims Act cases, special committee representations, compliance counseling, and complex civil litigation. He has conducted FCPA investigations relating to business in 35 countries around the globe and is the only person to have served as the FCPA compliance monitor, or U.S. counsel to the FCPA compliance monitor, in three different FCPA monitorships. Robert Borden — Mr. Borden serves as the Director of Oversight for House Majority Leader Eric Cantor. In that capacity, he coordinates and promotes the oversight activities of House committees. Mr. Borden has served on Capitol Hill for 19 years and, formerly, was General Counsel of the House Committee on Oversight and Government Reform, and prior to that, General Counsel of the Committee on Education and Labor. Mr. Borden helps House Republican leadership set oversight and investigative priorities. In the past year, he has worked closely on the Benghazi and IRS targeting investigations as well as Affordable Care Act oversight. In his prior work as a committee counsel, Mr. Borden has worked on investigations of Operation Fast and Furious, the International Brotherhood of the Teamsters, and served as special counsel to the Select House Committee tasked with investigating the preparation and response to Hurricane Katrina.

January 29, 2014 |
10th Annual Webcast Briefing on Challenges in Compliance and Corporate Governance

​Blockbuster fines and increasing regulatory requirements underscore the challenging environment facing today’s compliance professionals. Join our experienced securities law, corporate governance, white collar defense and investigations attorneys as they discuss practical approaches for developing strong compliance programs for the year ahead. This year’s presentation features new Gibson Dunn partner Scott Hammond, the former Deputy Assistant Attorney General for Criminal Enforcement of the U.S. Department of Justice’s Antitrust Division, and one of the nation’s leading experts on criminal antitrust and international cartel cases. Scott joins Joe Warin and Amy Goodman who now are in their 10th year of hosting ‘Challenges in Compliance and Corporate Governance.‘ Topics discussed include: The shrinking gap between "regulated" and "unregulated" entities A summary of the SEC and DOJ’s emerging enforcement and compliance policies U.S. enforcement trends; statistics from 2013 SEC, CFTC, antitrust, FCPA, FCA and FIRREA cases Lessons from 2013 SEC and DOJ cases and settlements Trends in international regulation and enforcement Building and overseeing effective compliance programs Voluntary disclosure programs The compliance function and the role of the Chief Compliance Officer, senior management, senior management and the Board in compliance Who should view this program: In-house counsel, directors, senior executives, finance and audit staff, corporate governance and compliance officers, corporate secretaries and others responsible for public company compliance. Panelists: F. Joseph Warin — Co-Chair of the firm’s White Collar Defense and Investigations Practice and former Assistant United States Attorney in Washington, D.C. Ranked as a leading white collar criminal defense, securities compliance and enforcement attorney by 2013 Chambers USA: America’s Leading Lawyers for Business, 2006 – 2013 Best Lawyers in America, and named a Top Lawyer for Criminal Defense by Washingtonian magazine and a White Collar Law MVP by Law360. Expertise includes white collar crime and securities enforcement and litigation—including Foreign Corrupt Practices Act investigations, False Claims Act cases, special committee representations, compliance counseling and complex civil litigation. Mr. Warin is the only person to have served as the FCPA compliance monitor, or U.S. counsel to the FCPA compliance monitor, in three different FCPA monitorships. Scott Hammond — Partner with the firm’s Antitrust and Trade Regulation Practice, with a focus on criminal antitrust and international cartel matters. Former Deputy Assistant Attorney General for Criminal Enforcement in the U.S. Department of Justice’s Antitrust Division. Recently joined Gibson Dunn following a 25-year tenure with the DOJ’s Antitrust Division. Supervised the Division’s domestic and international criminal investigations and prosecutions, including overseeing the Corporate and Individual Leniency Programs. Also worked to increase international cooperation in cartel enforcement with other jurisdictions, including the European Union, Australia, Brazil, Canada, Germany, India, Japan, Korea, Mexico, New Zealand, South Africa and the United Kingdom.

January 17, 2014 |
China’s AIC: A Familiar Face Now on the Global Anti-Corruption Map

Washington, D.C. of counsel Daniel Chung and New York associate William Han are the authors of "China’s AIC: A Familiar Face Now on the Global Anti-Corruption Map" [PDF] published in the January 17, 2014 edition of Bloomberg BNA’s Antitrust & Trade Regulation Report. Reproduced with permission from Antitrust & Trade Regulation Report, 106 ATRR 81, 01/17/2014. Copyright 2014 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com

September 30, 2013 |
Public Companies: Back in the SEC Hot Seat?

San Francisco partner Marc Fagel and associate Leslie Wulff are the authors of "Public Companies: Back in the SEC Hot Seat?" [PDF] published in the September 2013 issue of Wall Street Lawyer.

September 23, 2013 |
Clash of the Sanctions

What should a company do when an entity on the E.U.’s sanctions lists for Iran successfully challenges its inclusion on that list, but remains on the U.S.’s OFAC List of Specially Designated Nationals and Blocked Persons (the "SDN List")? This question is one brought into clearer focus by the 13 decisions of the General Court of the European Union handed down on Friday, September 6, 2013, and the 2 decisions handed down on September 16, 2013.[1] These 15 decisions arose from applications made by 34 separate sanctioned entities or individuals, all but three of which are also included on the SDN List. While three of the applications, two relating to Bank Melli Iran, and one to Europäische-Iranische Handelsbank (spelled Europaeische-Iranische Handelsbank on the SDN List) were unsuccessful, in all the other cases the General Court struck down the listings. The list of successful applicants (also showing their jurisdictions of incorporation) is: Bank Kargoshaie, Iran Bank Melli Iran Investment Company, Iran Bank Melli Iran Printing and Publishing Company, Iran Bank Refah Kargaran, Iran Bushehr Shipping Company Ltd, Malta Cement Investment & Development Company, Iran Export Development Bank of Iran, Iran Good Luck Shipping Company, UAE Hafize Darya Shipping Lines, Iran IRISL Club, Iran* IRISL Europe GmbH, Germany IRISL (Malta) Limited, Malta IRISL Marine Services and Engineering Company, Iran ISI Maritime Limited, Malta Islamic Republic of Iran Shipping Lines, Iran Iranian Offshore Engineering & Construction Company, Iran* Irano Misr Shipping Company, Iran Irinvestship Limited, UK Khazar Shipping Lines, Iran Leading Maritime Pte Ltd, Singapore Marble Shipping Limited, Malta Mazandaran Cement Company, Iran Melli Agro-Chemical Company PJS, Iran Naser Bateni Persia International Bank PLC, UK Post Bank of Iran, Iran Safiran Payam Darya Shipping Lines, Iran Shipping Computer Services Company, Iran Shomal Cement Company, Iran Soroush Saramin Asatir Ship Management Company, Iran South Way Shipping Agency Company Limited, Iran* Valfajr 8th Shipping Line Company, Iran  * indicates omission from the SDN List The bases for success varied from applicant to applicant. In the cases of Post Bank Iran, Iran Insurance Company, Good Luck Shipping and the Export Development Bank of Iran, the General Court held that the Council of the European Union was unable to provide sufficient evidence that these entities provided support to Iran’s nuclear program.[2] In the cases of Naser Bateni, Persia International Bank, and Iranian Offshore Engineering & Construction Company, the General Court held that the reasons for listing given by the Council of the European Union did not, in and of themselves, substantiate a listing: for Mr. Bateni, this was his directorship of a designated entity;[3] for Persia International Bank, it was its 60% ownership by a designated entity;[4] and in the case of Iranian Offshore Engineering & Construction Company, it was three denials of export licenses.[5] For Bank Refah Kargaran, the General Court held that the Council was unable to provide any evidence to support its basis for listing — that this bank had taken over the operations of another listed bank.[6] As yet, it is unclear whether the European Council will appeal any or all of these decisions to the Court of Justice of the European Union. It has two months in which to do so. As stated in the General Court’s press release of September 6: "The Court’s annulment of the acts concerned will not take immediate effect. The effect of any acts that have been annulled will be maintained until expiry of the period for bringing an appeal . . . or, if an appeal is brought, once that appeal is dismissed. During that period, the Council may remedy the infringements established by adopting, if appropriate, new restrictive measures with respect to the persons and entities concerned."[7] For the moment, therefore, the successful applicants remain listed, and are therefore subject to the sanctions. In the recent past, the European Council has tended to appeal judgments of this kind, and/or also issue new regulations containing more detailed, or different grounds to re-list applicants who have successfully challenged their listing. For example, on May 28, 2013, the General Court struck down the listings of certain Tunisian individuals under the Tunisian sanctions regime;[8] and then on July 30 (just before the expiry of the two-month appeal period), the same individuals were re-listed under Council Implementing Regulation (E.U.) No. 735/2013.[9] If such a judgment of the General Court is not appealed and the entity or individual in question is not re-listed, the effect of the General Court’s judgment is retrospective, in that it will effectively operate to remove the entity or individual’s name from the listing regulation with effect for the entire period from its promulgation until the date of the General Court’s decision. None of this alters the inclusion or otherwise of an entity or individual in OFAC’s SDN List. Companies need to remain vigilant in screening counterparts, customers and others for inclusion in that list, as well as in the E.U.’s own lists (best accessed through H.M. Treasury’s (from what we can see) vigilantly maintained list in the U.K. — especially as H.M. Treasury’s list also includes individuals and entities listed through the U.K.’s domestic legislation).[10] In these times of heightened political rhetoric in the E.U. and beyond against certain sanctioned states, and of significant enforcement efforts regarding sanctions laws on both sides of the Atlantic,[11] it has never been more important to navigate the divide between the U.S. and E.U. sanctions regimes. The complexity of successfully achieving this was amply illustrated by a recent OFAC enforcement decision against American Express Travel Related Services Inc. ("TRS").[12] TRS was fined $5,226,120 in July this year because its overseas offices allegedly facilitated bookings of travel to and from Cuba. According to OFAC’s "Enforcement Information," there were a number of aggravating factors in reaching the final penalty at the time of the apparent violations, including alleged inadequacies in TRS‘s compliance program to detect and prevent Cuba Travel bookings, particularly from countries that had adopted antidote measures. The "antidote measures" in question are rarely enforced E.U. Regulations from 1996 that prohibited compliance with the U.S.’s then sanctions against Cuba, Libya and Iran.[13] These regulations were implemented differently across the E.U.’s Member States. Some countries chose to enforce these laws by means of administrative penalties only; others, including the U.K. through its Extraterritorial US Legislation (Sanctions against Cuba, Iran, Libya) (Protection of Trading Interests) Order (SI 3171/1996), chose to make compliance with the U.S. sanctions in question a criminal offence.[14] In fining TRS, OFAC considered it to be an aggravating factor that TRS allegedly had taken bookings in countries where to do otherwise would itself have been an offence. OFAC made clear its choice that it would rather American companies break laws in E.U. member states than U.S. laws. The choice is not one to be wished on any company. A further invidious choice awaits a company faced with a contractual counterparty which becomes designated in both the E.U. and the U.S. It might be thought that it would be possible to rely on arguments such as force majeur, frustration or illegality to decline to fulfil any contractual obligations with such an entity. A recent series of decisions in the English courts, however, have required that a company take all possible steps to comply with an existing contract with a sanctioned entity (including making any available licence applications to H.M. Treasury) before being able to walk away.[15] Under this case law, a company wishing to comply with an E.U. law to stop trading with a sanctioned entity must first make an application to the relevant E.U. or member state authorities (in the case of the U.K., H.M. Treasury) to allow it to continue to trade with that sanctioned entity. This is not a happy result. Moreover, an application for permission to continue to trade with a sanctioned entity may be behaviour which OFAC or other U.S. enforcement agencies may consider problematic. Further, what is the company to do if its licence application (made in the hope of a refusal) is granted? Must it then make a licence application to OFAC? What if that application is then refused? The most effective methods for navigating these difficult waters are: rigorous due diligence on acquisition targets, contractual counterparties and customers before taking key transactional decisions; maintenance of a vigilant watching brief over changes to sanctions laws and listings; and, where necessary, entering into discussions with the enforcement authorities in relevant jurisdictions in order to benefit from any guidance they can offer.    [1]   Case T-8/11, Bank Kargoshaei and others v Council of the European Union, 2013 (ECJ EUR-Lex (September 16, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=141422&pageIndex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=1386786, and Case T-489/10, Islamic Republic of Iran Shipping Lines and others v Council of the European Union, 2013 (ECJ EUR-Lex (September 16, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=141406&pageIndex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=1386786.    [2]   Case T-13/11, Post Bank Iran v Council of the European Union, 2013 (ECJ EUR-Lex (September 6, 2013), available at http://curia.europa.eu/juris/document/document.jsf?docid=140733&mode=req&pageIndex=1&dir=&occ=first&part=1&text=&doclang=EN&cid=5274300; Case T-12/11, Iran Insurance Company v Council of the European Union, 2013 ECJ EUR-Lex (September 6, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=140723&pageIndex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=5275098; Case T-57/12, Good Luck Shipping LLC v Council of the European Union, 2013 ECJ EUR-Lex (September 6, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=140732&pageIndex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=5275571; and Cases T-4/11 and T-5/11, Export Development Bank of Iran v Council of the European Union, 2013 ECJ EUR-Lex (September 6, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=140727&pageIndex=0&doclang=FR&mode=req&dir=&occ=first&part=1&cid=5275941. This decision is currently only available in French.    [3]   Cases T-42/12 and T-181/12, Naser Bateni v Council of the European Union, 2013 ECJ EUR-Lex (September 6, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=140726&pageIndex=0&doclang=FR&mode=req&dir=&occ=first&part=1&cid=5276389. This decision is currently only available in French and German.    [4]   Case T-493/10, Persia International Bank PLC v Council of the European Union, 2013 ECJ EUR-Lex (September 6, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=140735&pageIndex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=5276843.    [5]   Case T-110/12, Iranian Offshore Engineering & Construction Company v Council of the European Union, 2013 ECJ EUR-Lex (September 6, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=140724&pageIndex=0&doclang=FR&mode=req&dir=&occ=first&part=1&cid=5277319. This decision is currently only available in French and Spanish.    [6]   Case T-24/11, Bank Refah Kargaran v Council of the European Union, 2013 ECJ EUR-Lex (September 6, 2013), available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=140730&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=5277656.    [7]   Press Release, General Court of the European Union, No 99/13 , The General Court annuls the acts of the Council freezing the funds of seven companies and one person in connection with the restrictive measures taken against Iran with the aim of preventing nuclear proliferation (Sept. 6, 2013), available at http://curia.europa.eu/jcms/jcms/P_103674/.    [8]   The three cases are:  Case T-187/11, Mohamed Trabelsi and others v. Council of the European Union, 2013 ECJ EUR-Lex (May 28, 2013), available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011TJ0187:EN:HTML; Case T-200/11, Fahed Mohamed Sakher Al Matri v. Council of the European Union, 2013 ECJ EUR-Lex (May 28, 2013), available at http://eur-lex.europa.eu/Notice.do?val=729048:cs&lang=en&list=729048:cs,&pos=1&page=1&nbl=1&pgs=10&hwords=al matri~; and Case T-188/11, Mohamed Slim Ben Mohamed Hassen Ben Salah Chiboub v. Council of the European Union, 2013 ECJ EUR-Lex (May 28, 2013), available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2011:145:0038:01:EN:HTML.    [9]   See Council Regulation (EU) No 735/2013 (OJ L 204, 31.7.2013, p. 23).   [10]   Available at http://hmt-sanctions.s3.amazonaws.com/sanctionsconlist.htm.   [11]   See Gibson Dunn, 2012 Year-End Sanctions Update, available at http://www.gibsondunn.com/publications/Pages/2012-YearEnd-Sanctions-Update.aspx, and Gibson Dunn, 2013 Mid-Year Sanctions Update, available at http://www.gibsondunn.com/publications/Pages/2013-Mid-Year-Sanctions-Update.aspx.   [12]   Available at: http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20130722_american_express_trs.pdf.   [13]   Council Regulation No. 2271/1996. The only known enforcement of these regulations occurred in Austria in 2007 when an Austrian bank (recently acquired by a U.S. private equity house) was charged for closing down accounts held by Cuban nationals. See Austria charges bank after Cuban accounts cancelled, Reuters, Apr. 27, 2007, http://www.reuters.com/article/2007/04/27/austria-bawag-idUSL2711446820070427, and BAWAG restores Cuban accounts after public uproar, Reuters, May 4, 2007, http://www.reuters.com/article/2007/05/04/austria-bawag-cuba-idUSL0450488520070504.   [14]   Extraterritorial US Legislation (Sanctions against Cuba, Iran, Libya) (Protection of Trading Interests) Order, S.I. 1996/3171.   [15]   See Bank Melli and Persia International Bank v Shere Shipping and others [2013] EWHC 2321 (Comm), and Melli Bank plc v. Holbud Limited, [2013] EWHC 1506 (Comm).    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 lawyers: International Trade Regulation and Compliance:Judith A. Lee – Washington, D.C. (+1 202-887-3591, jalee@gibsondunn.com)Marcellus A. McRae – Los Angeles (+1 213-229-7675, mmcrae@gibsondunn.com)Andrea Farr – Washington, D.C. (+1 202-955-8680, afarr@gibsondunn.com)Michael Willes - Los Angeles (+1 213-229-7094, mwilles@gibsondunn.com)  Antitrust and Trade Regulation:Patrick Doris – London (+44 (0)207 071 4276, pdoris@gibsondunn.com)Mark Handley – London (+44 (0)207 071 4277, mhandley@gibsondunn.com)   Peter Alexiadis – Brussels (+32 2 554 72 00, palexiadis@gibsondunn.com)Attila Borsos – Brussels (+32 2 554 72 10, aborsos@gibsondunn.com) © 2013 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

August 1, 2013 |
World War Z: Why Life Sciences Companies May be in the Path of the “New” Securities Enforcement & Litigation Onslaught, & How to Avoid Trouble

San Francisco partners Thad Davis and Michael Li-Ming Wong are the authors of “World War Z: Why Life Sciences Companies May be in the Path of the ‘New’ Securities Enforcement & Litigation Onslaught, & How to Avoid Trouble” published in Expert Guide: Fraud and White Collar Crime in August 2013.

March 4, 2013 |
In-House Search Warrant Checklist

Denver partner Robert Blume and associates John Partridge and Tafari Nia Lumumba are the authors of “In-House Search Warrant Checklist” [PDF] published in the March 4, 2013 issue of Law Week Colorado.