Babak Zanjani’s death sentence for sanctions evasion upheld in Iran

tehran-1Babak Zanjani, an Iranian businessman who was sentenced to death in March this year on charges of defrauding the Iranian government and circumventing sanctions on Iran’s oil industry (see previous blog), has had his sentence upheld by Iran’s Supreme Court. Mr Zanjani admitted using businesses in Turkey, Malaysia, and the UAE to sell oil on behalf of the Iranian government since 2010.  He was accused of embezzling $2.8bn of profit from those sales; he stated that the money was not paid because of sanctions preventing him from doing so.

Mr Zanjani had his EU listing annulled by the European court in 2014, but was re-listed shortly thereafter (see previous blog). He was then de-listed earlier this year when the JCPOA nuclear deal was implemented.

EU adds new humanitarian exception to Syria sanctions

syria-1The EU has amended its sanctions on Syria to allow for the otherwise prohibited purchase or transportation of oil and petroleum products in Syria, where the sole purpose is to provide humanitarian relief or assistance to the Syrian population. The amendments also introduce a corresponding derogation from the asset freeze and travel ban.  The authorisation provided for by the amendments is available to entities in receipt of public funding for providing aid to Syria, and other entities authorised by Member States.

See Council Regulation 2016/2137 amending Council Regulation 36/2012, and Council Decision 2016/2144 amending Council Decision 2013/255/CFSP.

OFSI consultation on new civil penalties for sanctions breaches

hm-treasury-building-1The Office of Financial Sanctions Implementation (OFSI) (part of HM Treasury in the UK) is consulting on its draft guidance on monetary penalties for breaches of financial sanctions.  This is in the context of new civil powers in the Policing and Crime Act 2017.  The guidance sets out how OFSI will assess whether to impose monetary penalties and how those penalties will be calculated, the appeals process etc..

The consultation document invites views before 27 January 2017 on questions set out in its consultation document (link here).  The response form is here.

Obama eases US sanctions on Burma/Myanmar

burma-1President Obama has lifted a prohibition on providing government to government assistance to the Myanmar government, in a Presidential Determination.  This also ends the ban on granting visas to government officials from Burma, and the requirement that the US vote in international financial institutions against providing assistance or loans to Burma.

The Obama administration has been steadily lifting US sanctions on Burma/Myanmar, in response to its “substantial advances to promote democracy…the release of many political prisoners, and greater enjoyment of human rights” (see previous blog).  Sanctions imposed by the US Congress, relating to arms and military cooperation, remain in force.

South Korea and Japan announce new sanctions on N Korea

seoul-2South Korea and Japan have announced that they are imposing new unilateral sanctions on North Korea, in response to its recent nuclear and ballistic missile tests.  Their announcements follow the UN Security Council’s decision to impose new sanctions on North Korea last week (see previous blog).

South Korea has said that it will blacklist a number of new senior North Korean officials, and ban foreign missile and nuclear experts from entering North Korea from the South when their visits are deemed to be a threat to South Korea’s national interests.  Japan announced that it will impose asset freezes on more people and entities connected to North Korea’s nuclear and missile programmes and ban the entry of all ships that have docked at ports in North Korea.

2 more Iran bank re-listings upheld by EU court

The General Court annulled the original targeted sanctions on the Export Development Bank of Iran and Bank Refah Kargaran in September 2013.  They had been listed in July 2010 on the grounds that they had helped designated entities to circumvent sanctions (Bank Refah Karagan was said to have helped Bank Melli Iran to do so), and in the case of the Export Development Bank that it had provided financial services to companies associated with nuclear proliferation.

The EU re-listed them after the banks won their annulment actions (as it frequently does), changing the criterion it relied on from helping a designated person to evade sanctions to providing “support for the Government of Iran”. The new allegation in November 2013 against the Export Development Bank is that it is “a state-owned enterprise providing financial support to the Iranian government”, and against Bank Refah is that it is an “entity providing financial support to the Iranian Government.  It is 94% owned by the [OSS], which is itself controlled by the Iranian government, and provides banking services to government ministries”.

The EU Court has upheld both re-listings in judgments linked to here (Export Development Bank of Iran & Bank Refah Kargaran) on the grounds that the Council had demonstrated (on the new criterion) that the banks provide financial support of a sufficiently important kind to the Government of Iran to justify their designation.  As in past cases, there was no need for the Council to show that the financial support was itself directly related to Iran’s nuclear programme, but rather that it was “quantitatively or qualitatively” significant.

UK set to vote on “Magnitsky” sanctions against human rights violators

magnitsky-1MPs in the UK are set to vote on the introduction of unilateral sanctions against human rights violators, under similar provisions as are in force in the US under the Magnitsky Act (see previous blog).

If passed, the “Magnitsky Amendment” would empower the UK government and private parties to apply to the UK High Court for the UK assets of people involved in or profiting from human rights abuses around the world to be frozen.  At present, the US Congress is also considering extending the Magnitsky Act, which currently applies only to Russian citizens, to encompass human rights violators globally.

OFAC sanctions supporters of N Korea government

pyongyang-1OFAC has imposed sanctions on 7 people and 16 entities for their alleged ties to the North Korean government or its nuclear and weapons programmes, and identified 16 aircraft as blocked property of a designated entity (details here).  In the US Treasury’s press release, Acting Under Secretary for Terrorism and Financial Intelligence Adam Szubin said that the sanctions “aim to cut the flow of financial resources to North Korea” and target people and entities “operating in key industries that support North Korea’s illicit activities”.