Iran has unveiled, at a Tehran conference of EU & Asian (but not US) oil & gas companies, a new framework for oil and gas contracts which offers more flexible terms on oil price fluctuations and investment risks. It replaces the previous “buyback” system which has been in place since pre US / EU sanctions and prevented foreign companies from booking reserves / taking equity stakes in Iranian companies. The National Iranian Oil Company will still own the resources. Reports suggest that Iran is expected to introduce around 50 oil and gas projects.
As foreshadowed yesterday, the Kremlin has today imposed sanctions on Turkey as the dispute over the downing of a Russian fighter jet near the Syrian border continues. The Executive Order and a statement outlining the sanctions is on the Krelim’s website here.
The measures ban certain (so far unspecified) goods and forbid extensions of labour contracts for Turkish people working in Russia as of 1 January 2016. It also calls for chartered flights from Russia to Turkey to end and for Russian tourism companies to stop selling holiday packages that include a stay in Turkey. The decree also calls for ending visa-free travel between Russia and Turkey and orders the tightening of control over Turkish air carriers in Russia “for security reasons”.
Russian Prime Minister Medvedev has said that wide-ranging economic sanctions against Turkey will be imposed by Russia in response to Turkey downing one of Russia’s fighter jets on the border between Turkey and Syria this week. Russia yesterday restricted agricultural and food imports from Turkey to Russia, and removed several Turkish products from shops after health and safety checks. Russia restricted Western food imports last year in response to sanctions (see previous blog).
Speaking at a televised cabinet meeting, Medvedev stated that the focus of the sanctions would be on “introducing limits or bans” on Turkish economic interests in Russia, in addition to a “limitation of the supply of products”. He added that negotiations over proposals for a preferential trade regime with Turkey would be terminated, and joint investment projects with Turkey would be put on hold or cancelled.
Obama has signed an Executive Order introducing new US sanctions on Burundi, targeting individuals in the government and armed groups that contribute to the turmoil in Burundi, including by threatening its peace and security, undermining its democratic processes, and committing human rights abuses. In its press release, the White House says it will “continue to support regional efforts to bring about a political resolution to the crisis in Burundi”.
The new measures impose an asset freeze on and prohibit doing business with:
- Alain Bunyoni, Minister of Public Security
- Godefroid Bizimana, Deputy Director-General of the National Police
- Godefroid Niyombare, Major General, Former Chief of Burundi Intelligence Service
- Cyrille Ndayirukiye, Former Minister of Defence
OFAC has designated 4 people and 6 entities for providing support to the government of Syria, including by facilitating Syrian government oil purchases from ISIL. The press release is here.
The new listings are:
- George Haswani – Assisting the Government of Syria to purchase oil from ISIL, and owns or controls HESCO, a company said to operate energy production facilities in areas controlled by ISIL. Subject to EU sanctions in March 2015
- Kirsan Ilyumzhinov – Assisting the Government of Syria, Central Bank of Syria, Adib Mayaleh, and Batoul Rida and has links to Mudalal Khuri. Owns or controls the Russian Financial Alliance Bank, former president of the World Chess Federation.
- Mudalal Khuri – Assisting the Government of Syria and owns or controls 5 of the newly listed entities
- Nicos Nicolaou – Assisting the Government of Syria and several designated persons
- Ezegoo Investments Ltd
- Hesco Engineering & Construction Co (HESCO)
- Hudsotrade Limited
- Kremsont Commercial Inc.
- Primax Business Consultants Limited
- Russia Financial Alliance Bank
OFAC has designated Guadalupe Fernandez Valencia and Jorge Mario Valenzuela Verdugo as Specially Designated Narcotics Trafficking Kingpins. The designations are part of OFAC’s efforts to target the criminal network of Mexican drug kingpin Joaquín “El Chapo” Guzmán, head of the Sinaloa Cartel. In its press release, OFAC states that the two have been charged with drug trafficking and money laundering, and identified as Sinaloa Cartel lieutenants for Guzmán’s son Jesus Alfredo Guzmán. OFAC Acting Director John Smith adds that they “ultimately bolster the power and influence of Chapo Guzman’s nefarious criminal activities”.
Please come to the Parliament Room at Inner Temple on 10 December 2015 for “Transatlantic Perspectives on the Iran Nuclear Deal and Sanctions Compliance”, an event on the Iran JCPOA sponsored/organised by Brick Court Chambers and Steptoe & Johnson.
There will be keynote addresses from Adam Szubin, US Treasury Acting Under Secretary for Terrorism and Financial Intelligence and former OFAC Director, and Franceso Fini, head of the European External Action Service Sanctions Team, and panelists discussing the JCPOA and compliance issues.
The event is on 10 December 2015, 7:30am-11:30am in the Parliament Room, Inner Temple, EC4Y 7HL. Details here. Chatham House rules apply; the event will not be recorded or reported.
We noted on this blog here that the EU re-listed North Drilling Company for amended reasons after it had won its application for annulment in the European court challenging its original listing (on which see previous blog here). The European Court has now annulled that re-listing too, on the grounds that the EU Council had no evidence to support its revised reasons that North Drilling Co either provided financial support to the Government of Iran or provided support for its nuclear program. A link to the judgment is here, not yet available in English.
The General Court Court has dismissed as inadmissible a 2nd annulment action brought by Oil Turbo Compressor Co. (Private Joint Stock) against its re-listing on the EU’s anti-nuclear sanctions concerning Iran. A link to the judgment is here: Case T-552/13 Oil Turbo Compressor Co. v Council . Oil Turbo won its 1st application (see previous blog here), but the Court held that its 2nd (and accompanying damages claim) was brought out of time.
A senior European diplomat has suggested that western leaders meeting at the G20 summit in Turkey have agreed to extend sanctions imposed on Russia for its role in the Ukraine crisis for 6 months until July 2016. The EU’s economic sanctions on Russia are currently due to expire at the end of January (see previous blog). The diplomat said that leaders, including the US President, German Chancellor, Italian and British Prime Ministers, and the French Foreign Minister, concluded that it was important to maintain pressure on Russia before scheduled elections in eastern Ukraine.
The EU’s sanctions regime on Russia prohibits (inter alia) financial transactions with major Russian state banks, bans the export to Russia of certain energy-exploration equipment, and prevents the sale of arms and some dual-use civilian goods to the country. A separate regime, currently due to expire on 15 March 2016 and not part of the reported agreement, imposes an EU-wide asset freeze and travel ban on people and entities said to be responsible for undermining the territorial integrity, independence, or security of Ukraine.