OFAC has added 3 individuals and 6 entities to its South Sudan sanctions list, pursuant to Executive Order 13664 (asset freeze and travel ban).
Israel Ziv and Obac William Olawo were designated for being “leaders of entities whose actions have the purpose or effect of expanding or extending the conflict in South Sudan”. Those designated entities are: Global N.T.M Ltd (Israel-based); Global Law Enforcement and Security Ltd (Israel-based); Global IZ Group Ltd (Israel-based); Golden Wings Aviation (South Sudan-based); Crown Auto Trade (South Sudan-based); and Africana General Trading Ltd (South Sudan-based). The third sanctioned individual, Gregory Vasili Dimitry, was designated for “actions that have undermined peace, stability, and security in South Sudan”. See OFAC Notice and US Treasury Press Release.
The EU General Court has upheld the 2016-18 Syria sanctions listings of Ehab Makhlouf (cousin of Syrian President Bashar al-Assad), Razan Othman (wife of EU-sanctioned Rami Makhlouf), and Syriatel Mobile Telecom (Joint Stock Company) (Syrian mobile telephone services company). See judgments (French only): T-409/16, T-416/16 and T-411/16 (12 December 2018).
Ehab Makhlouf was listed for being a leading Syrian businessman (Vice President of and shareholder in Syriatel Mobile Telecom) and an influential member of the Makhlouf family and closely connected with the Assad family. Razan Othman is listed for being associated with, and benefiting from, the Syrian regime because of her close personal and financial relations with Rami Makhlouf, cousin of President Assad and principal financier of the regime. Syriatel Mobile Telecom is listed for being controlled by Rami Makhlouf, and for providing financial support to the Syrian regime by paying significant profits to the Government under its licencing agreement.
4 South Koreans have been charged in South Korea with importing around £4.55million worth of coal and pig iron from North Korea in violation of UN sanctions. The sanctions prohibiting North Korean exports of coal, iron, and lead were introduced in August last year (see previous blog).
Prosecutors in South Korea allege that forged certificates of origin from Russian ports were used to give the impression that the commodities came from Russia, before being shipped on.
The time period for the European Council and Parliament to comment on changes to the EU’s list of dual-use items subject to export controls ended on 10 December 2018, and the changes are now likely to take effect in the coming weeks. The majority of changes to the dual-use items list, found in Annex I of Regulation 428/2009, were agreed at the 2017 Plenary of the Wassenaar Arrangement. The full list of changes is available here.
OFAC has announced a $2,774,972 settlement with Chinese company Yantai Jereh Oilfield Service Group Ltd and its affiliated companies (the “Jereh Group”) for violating US sanctions on Iran. Yantai is a provider of oil field services and manufacturer of related equipment.
Between around 2 October 2014 and 4 March 2016, on at least 11 occasions Jereh Group is said to have (re)exported or attempted to (re)export US-origin goods ultimately intended for Iran, by way of China. Similarly, it is also said to have exported certain US-origin items for use in the production of goods in China, with reason to know that the goods were ultimately destined for Iran.
In its press release, OFAC reports that, beginning in late 2013, a former Jereh Group Sales Executive and a former Business management arranged meetings with Iranian customers and developed a scheme utilising intermediary companies in China and the UAE to sell and ship goods, many of which relied upon US-origin items, to Iran. In addition, it says that an external review of Jereh Group’s compliance programme in 2015-16 noted that its controls were “largely non-existent and, when in place, were ineffective and easily circumvented”, adding that “the circumvention could and did go undetected”. According to OFAC, the violations did not cease until the US Bureau of Industry and Security sanctioned several Jereh Group companies and related individuals in March 2016.
OFAC found that Jereh Group had not voluntarily disclosed the violations, and that they constituted an egregious case. The base penalty amount was $3,083,302.
The EU General Court has upheld the 2017 and 2018 Egypt sanctions listings (targeting the misappropriation of State funds) of the former President of Egypt, Mohamed Hosni Elsayed Mubarak. See judgment: T-358/17 (12 December 2018) and Press Release.
The Court rejected Mr Mubarak’s arguments that there was no legal basis for his listings, that the Egyptian judicial proceedings did not respect his fundamental rights, and that the EU had infringed rights of the defence and the principle of proportionality.
Last month (22 November), the same Court rejected, on similar grounds, the 2016 and 2017 Egypt sanctions listings of Mohamed Mubarak’s wife, Suzanne Thabet, as well as their sons, Gamal Mubarak and Alaa Mubarak, and their sons’ wives, Khadiga El Gammal and Heidy Rasekh (see previous blog).
Last month (14 November), the UN Security Council adopted UNSC Resolution 2444 (2018), which terminated with immediate effect all UN sanctions against Eritrea (arms embargo, asset freezes and travel bans).
Last week (10 December), the EU implemented this UN action by adopting Council Decision (CFSP) 2018/1944 and Council Regulation (EU) 2018/1932.
The Financial Action Taskforce (FATF) has published its report summarising the anti-money laundering and counter terrorist financing measures in the UK and rating the UK’s compliance with FATF recommendations. It finds the UK largely compliant with its sanctions recommendations, and notes that the UK has been a leader in UN and EU terrorism designations and asset freezing. It recommends some improvements in relation to: applying penalties for sanctions breaches, ensuring consistent application of terrorism financing, communicating designations without delay, and giving greater clarity on freezing jointly owned and indirectly controlled assets. The report notes the absence of public enforcement action in relation to sanctions breaches, notes that several investigations are underway, and recommends that UK law enforcement agencies and OFSI should “ensure that they pursue public enforcement of sanctions evaders”.