US TREASURY ISSUES GENERAL LICENSE AUTHORISING EXPORT OF INTERNET SERVICES & SOFTWARE TO CRIMEA; US BUREAU OF INDUSTRY AND SECURITY PUBLISHES RUSSIA DUE DILIGENCE GUIDANCE

OFAC has published Ukraine-related General License No. 9, authorising the exportation or re-exportation from the US or by US persons to Crimea of services and certain software connected with the exchange of personal communications over the internet, web browsing, and social media.  The General Licence is a derogation from a US prohibition on trade with the Crimea region in Executive Order 13685 (2014).

The General Licence does not apply to:

  1. any individual or entity listed as a Specially Designated National, or whose property and interests in property are otherwise blocked;
  2. commercial-grade internet connectivity services or telecommunications facilities;
  3. commercial web-hosting or domain name registration services; or
  4. any goods or technology not necessary to enable the services set out above.

Specific licences can be issued on a case-by-case basis for services and software incident to the exchange of personal communications over the internet, which are not covered in the General Licence.  The US Treasury’s new FAQ on the General Licence is here.

Russia Due Diligence Guidance

Guidance from the US Bureau of Industry and Security (BIS) on due diligence practices has been released to assist companies in preventing unauthorized exports to Russia.  The guidance reiterates Export Administration Regulations Part 732’s requirements on red flags, stating that while exporters can generally rely on the end-use representations of the customer, they have an “affirmative duty” to enquire about end use, end user, and ultimate destination where the customer is “a person who is clearly not going to be using the item for its intended end use”.

The guidance also sets out a checklist of due diligence factors to consider when enquiring into the ultimate destination of an item:

  1. Consider email address and telephone number country codes, in addition to languages used in communications from customers or on a customer’s website
  2. Research the intermediate and ultimate consignees and purchaser, as well as their addresses, using business registers, company profiles, websites, and other resources
  3. Be aware of the countries a freight forwarder advertises that it serves and the industry sectors a distributor or other non-end user customer supplies
  4. Determine whether a license is required based on the probable country of ultimate destination, end use, and end user.  Consider the Country Chart, end use and end user controls, and embargoes and special controls.

OFAC ADDS 6 PEOPLE, 3 ENTITIES, AND 9 AIRCRAFT TO SDN LIST

OFAC has updated its list of Specially Designated Nationals jointly under its Counter Terrorism and Iranian Financial Sanctions regimes to add 1 person, 2 companies, and 9 aircraft as Specially Designated Global Terrorists, and under its Counter Narcotics regime to add 5 people and 2 entities as Specially Designated Narcotics Trafficking Kingpins. Details of the new listings are here.

The joint Counter Terrorism and Iran designations are made pursuant to Executive Order 13224, and the Counter Narcotics designations are made pursuant to the Foreign Narcotics Kingpin Designation Act.

Counter Terrorism (SDGT) & Iranian Financial Sanctions (IFSR)

  1. Issam Shammout
  1. Al-Naser Airlines
  2. Sky Blue Bird Aviation
  • 9 aircraft linked to Mahan Air

In its press release, the US Treasury stated that the designations follow a government-wide effort to target procurement of aircraft and aircraft parts for designated Iranian airline Mahan Air by the people listed, and are part of US efforts to counter Iranian sanctions evasion and target support to designated terrorist entities.  In early May 2015, Al-Naser is said to have transferred at least 8 Airbus A340s and 1 Airbus 320 to Mahan Air.

The 9 aircraft, linked to Mahan Air, are listed in order to make it easier for parties to keep track of Mahan Air’s blocked property and more difficult to evade the sanctions against it.  Mahan Air was listed in 2011, pursuant to Executive Order 13224, for providing support to Iran’s Revolutionary Guard Corps – Qods Force, another entity listed as a SDGT.

Counter Narcotics (SDNTK)

  1. Myriam Beattie de Briones
  2. Abel Briones Ruiz
  3. Claudia Briones Ruiz
  4. Rogelio Nieto Gonzalez
  5. Magdalena Ruiz de Briones
  1. Combustibles Briones

The US Treasury press release states that Abel Briones Ruiz, using his network of transporters, “has distributed significant quantities of cocaine through the Southwest border for sale in the United States”. Acting Director of OFAC John Smith said that the designations allow the US to “financially isolate this long-time cocaine trafficker and those supporting his operations”.

EU COURT ANNULS TERNAVSKY’S 1st BELARUS SANCTIONS LISTING AND UPHOLDS 2nd

The General Court of the EU has annulled the original inclusion of Anatoly Ternavsky in the EU’s sanctions regime against Belarus, but dismissed his application to annul the more recent measures based on amended reasons; Case T-163/12 Ternavsky v Council 1.

The Court annulled his original listing because the Council could not show that he had close ties to President Lukashenka’s family by previous employment of his daughter, or that his involvement in the oil and petroleum sectors via  Univest-M showed that he had the support of the regime.

However, the Court upheld the new statement of reasons set out in Council Implementing Decision 2014/24/CFSP, because of payments, although small, made by Univest-M to Belarus’ Ministry of the Interior, a Belarusian state broadcaster, and the union for the House of Representatives and National Assembly, Univest-M’s partnership of a sports club with which two of the President’s sons are involved, and Univest-M’s extensive involvement in real-estate in Belarus, which the Court held would not be possible without the regime’s blessing.

The Court ordered the Council to bear its own costs and half of those incurred by Mr Ternavsky, and Mr Ternavsky to pay the Council’s costs of the interlocutory proceedings and half of his own costs.

EU UPDATES 6 ENTRIES UNDER ITS SYRIA SANCTIONS REGIME AND CREATES ONE NEW LISTING

The EU has updated the entries for 4 people and 2 entities listed under its Syrian sanctions regime, and created separate entries for Tri-Ocean Energy and its subsidiary Tri-Ocean Trading, which were previously listed together. The sanctions target people and entities said to be involved in the repression and violations of human rights perpetrated by the Syrian regime, and listed persons are subject to an EU-wide travel ban and asset freeze. The amended entries are:

  1. Amr Armanazi
  2. Wael Abdulkarim
  3. Ahmad Barqawi
  4. Samir Hamsho
  1. Centre d’etudes et de recherches syrien (CERS)
  2. Tri-Ocean Trading
  3. Tri-Ocean Energy

The amendments are set out in Council Implementing Regulation (EU) 2015/780 implementing Council Regulation (EU) 36/2012 and Council Implementing Decision (CFSP) 2015/784 implementing Council Decision 2013/255/CFSP. HM Treasury’s notice is here.

USA RENEWS SANCTIONS ON BURMA/MYANMAR

President Obama has extended US sanctions on Burma/Myanmar from 20 May 2015 for a year.  The sanctions prohibit US people and companies from investing in Burma/Myanmar or doing business with listed persons, and assets in US jurisdiction that belong to listed people are frozen.  It is also prohibited to import into the US any jadeite or rubies mined or extracted from Burma, including jewellery. The US Treasury’s overview of US sanctions on Burma/Myanmar is here.

US sanctions were first imposed on Burma/Myanmar in 1997 by Executive Order 13047 in response to repression of the country’s democratic opposition, and in 2012 a general ban on imports into the US of products from Burma/Myanmar was eased significantly in response to what then Secretary of State Clinton described as “substantial and significant reforms” (press release here).

In his letter to the US Congress, President Obama stated that although Burma/Myanmar has made “significant progress across a number of important areas” since US sanctions were first imposed, including “the release of over 1300 political prisoners, continued progress towards a nationwide cease-fire, and expanding political space for civil society”, the situation continues to pose an unusual and extraordinary threat to the national security and foreign policy of the US.

The letter cites concerns about the “ongoing conflict and human rights abuses in the country, particularly in ethnic minority areas and Rakhine State”, from where over 100,000 Rohingya Muslims have fled since 2012, thousands of whom are believed to be stranded in the Andaman sea, and the fact that Burma/Myanmar’s military “operates with little oversight from the civilian government and often acts with impunity”.

The notice from the President extending the sanctions is here.

EU REMOVES 6 PEOPLE FROM ITS AL-QAIDA SANCTIONS LISTINGS

On 12 May 2015, the EU removed 6 people from its Al-Qaida sanctions listings, in accordance with a decision taken by the Sanctions Committee of the UN Security Council at the end of April to remove them from its own listings.  Under the EU regime, listed individuals and entities are subject to an arms-embargo and an EU-wide asset freeze.

The individuals removed are:

  1. Riadh Al-Jelassi
  2. Samir Kishk
  3. Al-Azhar Al-Tlili
  4. Faouzi Al-Jendoubi
  5. Ahmed Rarrbo
  6. Najib Al-Waz

The removals are set out in Commission Implementing Regulation (EU) 2015/769 amending Council Regulation (EC) 881/2002.  The UN Security Council Sanctions Committee press release is here.

US SENATE APPROVES IRAN NUCLEAR AGREEMENT REVIEW ACT

The US Senate has approved the Iran Nuclear Agreement Review Act, which if passed by the House of Representatives would require Congressional approval for any agreement with Iran in respect of its nuclear program.  At present, the President has the authority to lift US sanctions unilaterally, but under the proposed legislation Congress would have 30 days to review any proposed agreement and would then be able to enact a joint resolution supporting or opposing it, or take no action.  If Congress opposes the agreement then the President may veto their resolution, which would be subject to a 2/3 vote to override it in Congress.  If a vote to override the veto is successful then the joint resolution would prohibit the President from lifting sanctions.

The legislation could complicate US negotiations with Iran, which has publically insisted on full and immediate relief from sanctions – something that would be all but impossible under the proposed review process.  It could also lead to a situation in which the UN Security Council has voted to lift sanctions while US sanctions on Iran remain in force.

EU UPDATES CAR AND SOUTH SUDAN SANCTIONS REGIMES

The EU has updated its sanctions regimes on the Central African Republic and South Sudan in accordance with resolutions adopted by the UN Security Council earlier this year. Both regimes impose EU-wide targeted asset freezes and travel bans, in addition to a general arms embargo on the countries.

Central African Republic

UN Security Council Resolution 2196 (2015) extends the designation criteria for people and entities said to be involved in criminally or politically motivated violence in the Central African Republic, and the EU has updated its own measures accordingly. The new criteria now encompass entities owned or controlled by designated persons, and add “gold” to the list of example natural resources that may not be illicitly exploited to provide support for armed groups or criminal networks.

The new measures also mandate that Member States seize, register, and dispose of any items they discover whose sale, transfer, or export is prohibited under the sanctions regime, and update the international missions mentioned to include the UN’s Minusca.

The changes are set out in Council Regulation (EU) 2015/734 amending Council Regulation (EU) 224/2014 and Council Decision (CFSP) 2015/739 amending Council Decision 2013/798/CFSP. HM Treasury’s updated guidance on CAR financial sanctions is here.

South Sudan

By way of implementing UN Security Council Resolution 2206 (2015), the EU has also consolidated its existing measures imposing sanctions on South Sudan with the new ones set out in that resolution. The new measures extend the designation criteria under the sanctions regime to include people and entities designated by the UN Security Council or the UN Committee established by the new Resolution. The Resolution also sets out the new Committee’s own designation criteria, which includes, inter alia, actions or policies that have the purpose or effect of extending the conflict in South Sudan, that threaten transitional agreements or undermine the country’s political process, or violate applicable human rights.

In accordance with this, the new EU measures stipulate that the EU Council shall list any entity designated under the above in the relevant annex, and that the measures shall be renewed or amended if the Council deems that their objectives have not been met and in light of decisions taken by the Security Council.

The changes are set out in Council Regulation (EU) 2015/735 repealing Council Regulation 748/2014 and Council Decision (CFSP) 2015/740 repealing Council Decision 2014/449/CFSP.  HM Treasury’s updated guidance on South Sudan financial sanctions is here.