OFAC sanctions “Hizballah financing network and Iranian conduit”

OFAC3Yesterday, OFAC designated “Hizballah financier” Mohammad Ibrahim Bazzi and “Hizballah’s representative to Iran” Abdallah Safi-Al-Din as Specially Designated Global Terrorists (SDGTs), pursuant to Executive Order 13224. The following 5 companies were also designated as SDGTs for being owned or controlled by Mr Bazzi: Global Trading Group NV (Belgian energy services conglomerate); Euro African Group LTD (Gambia-based petroleum and petroleum products company); Africa Middle East Investment Holding SAL (Lebanon-based); Premier Investment Group SAL Offshore (Lebanon-based); and Car Escort Services S.A.L. Off Shore (CES) (Lebanon-based import/export company; also linked to another SDGT). As a result, asset freezing measures have been imposed on all individuals and companies designated in this action. See OFAC Notice and US Treasury press release.

These designations follow President Trump’s decision last week to cease US participation in the JCPOA and to reimpose US sanctions on Iran. They have been made in “furtherance of the goal of addressing the totality of Iran’s malign activities and regionally destabilizing behaviour, including that of Hizballah”, and they “complement” 3 other recent OFAC actions, see here, here and here.

EU launches process for activating Iran Blocking Statute

EU CommissionWe reported yesterday that the President of the European Commission Jean-Claude Juncker had announced that the EU Commission will “[launch] the process [of activating] the ‘blocking statute’ from 1996”, in order to “protect European companies” from the extraterritorial effects of US sanctions, in light of US President Trump’s decision to withdraw from the JCPOA and to reimpose US sanctions on Iran.

In a press release issued today, the Commission has announced that it has “acted on four fronts” to mitigate the “impact of US sanctions on European businesses” and to “maintain the growth of trade and economic relations between the EU and Iran”:

  1. It has launched the formal process to activate the Blocking Statute by updating the list of US sanctions on Iran falling within its scope. The Blocking Statute “forbids EU companies from complying with the extraterritorial effects of US sanctions, allows companies to recover damages arising from such sanctions from the person causing them, and nullifies the effect in the EU of any foreign court judgements based on them”. The aim is for the blocking measure to come into force before 6 August 2018 (date on which the first tranche of US sanctions take effect).
  1. It has launched the process for removing obstacles for the European Investment Bank to decide under the EU budget guarantee to finance activities outside the EU, in Iran.
  1. As “confidence building measures”, the Commission will “continue and strengthen the ongoing sectoral cooperation with, and assistance to, Iran, including in the energy sector and with regard to small and medium-sized companies”.
  1. The Commission will encourage member states to explore the possibility of one-off bank transfers to the Central Bank of Iran (“this approach could help the Iranian authorities to receive their oil-related revenues, particularly in case of US sanctions which could target EU entities active in oil transactions with Iran”).

The EU Parliament and Council will have 2 months in which to object to the first two measures above, once proposed, before they enter into force.

EU to launch US-Iran sanctions blocking legislative procedure tomorrow

Jean-Claude Juncker.jpgIn light of President Trump’s decision to cease US participation in the JCPOA and to reimpose US sanctions on Iran, the President of the EU Commission Jean-Claude Juncker has announced that, tomorrow at 10.30am, the EU Commission will “[launch] the process [of activating] the ‘blocking statute’ from 1996”, in order to “protect European companies” from the extraterritorial effects of US sanctions. Furthermore, that a decision had been made to “allow the European Investment Bank to facilitate European companies’ investment in Iran”.

Turkish banker sentenced to 32 months for US Iran sanctions evasion

Halkbank.jpgOn 3 January 2018, Turkish banker Mehmet Hakan Atilla was found guilty of conspiracy to violate US sanctions against Iran. The scheme consisted of a money-laundering network facilitated by Turkish state bank Halkbank, which allowed Iran to gain access to international markets in contravention of US sanctions. Although nine defendants had been charged in the case, Mr Atilla was the only one that stood trial. Co-defendant Reza Zarrab, a Turkish-Iranian businessman, previously pleaded guilty and gave evidence in the trial against Mr Atilla (previous blog).

Yesterday (16 May 2018), the trial judge – District Judge Richard Berman – sentenced Mr Atilla to 32 months in prison. He held that the Halkbank executive appeared to have been following orders from the bank’s CEO, Suleyman Aslan, who is one of the seven defendants at large. He found that Mr Atilla was less culpable than his co-defendant Reza Zarrab, who has yet to be sentenced.  The criminal prosecutions against Mr Atilla and his co-defendants are separate from any penalty that may be imposed on Halkbank, which is expected to face a fine from OFAC.

US designates ‘ISIS in the Greater Sahara’ and its ‘leader’

US Department of StateYesterday, the US Department of State designated ISIS in the Greater Sahara (ISIS-GS) as a Foreign Terrorist Organisation, pursuant to s 219 of the Immigration and Nationality Act. The Department also designated ISIS-GS and its “leader”, Adnan Abu Walid al-Sahrawi, as Specially Designated Global Terrorists, pursuant to section 1(b) of Executive Order 13224 (asset freezes imposed).

ISIS-GS is “primarily based in Mali” and operates “along the Mali-Niger border”. The group has claimed responsibility for several attacks, including the 4 October 2017 attack on joint US-Nigerian patrol in the region of Tongo Tongo, Niger, which is said to have killed 4 US soldiers and 5 Nigerian soldiers. See OFAC Notice and US Department of State press release.

USA & Gulf States sanction Hizballah senior leadership

TerroristYesterday, the 7-member nations* of the Terrorist Financing and Targeting Center (TFTC) sanctioned 5 members of Hizballah’s Shura Council (“the primary decision-making body of Hizballah”). In particular, the following individuals were designated as Specially Designated Global Terrorists, pursuant to Executive Order 13224 (asset freezes imposed): Hasan Nasrallah (Secretary General of Hizballah), Naim Qasim, Muhammad Yazbak, Husayn Al- Khalil, and Ibrahim al-Amin al-Sayyid. See OFAC Notice and US Treasury press release.

In addition, TFTC member states also designated the following key Hizballah-affiliated individuals and entities: Talal Hamiyah, Ali Youssef Charara, Spectrum Group, Hasan Ebrahimi, Maher Trading, Hashem Safieddine, Adham Tabaja, Al-Inmaa Group, and Al-Inmaa Engineering and Contracting, all of whom were previously designated by the USA. This is the second TFTC designation action since the centre was announced in May 2017.

These designations follow President Trump’s decision to cease US participation in the JCPOA and to reimpose US sanctions on Iran. They have been made in “furtherance of the goal of addressing the totality of Iran’s malign activities and regionally destabilizing behaviour, including that of Hizballah”. Furthermore, they “complement” last week’s OFAC decision to sanction an IRGC-QF-associated currency exchange network procuring millions of dollars through the UAE (previous blog), as well as OFAC’s most recent action to sanction Iran’s Central Bank Governor and an Iraq-based bank for moving millions of dollars on behalf of the IRGC-QF to Hizballah (previous blog).

*(1) Bahrain; (2) Kuwait; (3) Oman; (4) Qatar; (5) Saudi Arabia; (6) UAE; and (7) USA

UK Sanctions Bill completes House of Commons stage

Parliament3.jpgOn 1 May 2018, the UK Sanctions and Anti-Money Laundering Bill completed Report stage and had its third reading in the House of Commons, transcript here. The Bill will now move back to the House of Lords on the 21 May (‘ping pong’) so that the Lords can consider the Commons amendments.

Draft Russian Bill criminalises compliance with Western sanctions

Russia-US.jpg

On 14 May 2018, the Russian State Duma was presented with Draft Bill No. 464757-7 “On Amendments to the Criminal Code of the Russian Federation”, which, if passed, will make it a criminal offence for Russians to:

  1. Fulfil/comply with US and/or other foreign state sanctions against Russia, if such actions restrict/deny Russian citizens and entities the performance of ordinary business operations or transactions (liability for this crime to range from a fine of up to RUB 600,000 to up to 4 years’ imprisonment with a fine of up to RUB 200,000); or
  1. Aid/abet/contribute to the imposition of US and/or other foreign state sanctions against Russia (includes advising or providing information that leads to the imposition of such sanctions) (liability for this crime to range from a fine of up to RUB 500,000 to up to 3 years’ imprisonment with a fine of up to RUB 200,000).

Yesterday (15 May 2018), the Draft Bill was unanimously approved by the State Duma in its first reading, and is due to have its second reading tomorrow.