Ukraine bars 243 Russian companies

Ukraine has barred 243 Russian companies from operating within its territory, after it determined that they had done business with companies in the separatist-controlled areas of Ukraine’s contested Donbass region.  The decision is the latest in a series of sanctions measures introduced by Ukraine in response to Russia’s annexation of Crimea and role in destabilising the country (see previous blog).

Khaled; High Court judgment on disclosure in sanctions JR

Abdulbaqi Khaled, a British/Libyan citizen, is claiming misfeasance in public office and conspiracy to injure, challenging the decision to recommend that he be sanctioned by the UN Security Council (and then the UK) for ties to Al-Qaida.  His case is that the recommendation was made on the basis of information the Government knew to be unreliable and/or illegally obtained, in bad faith.

The High Court has given judgment in his application for standard disclosure of the information relied on by the Government when it recommended that he be listed.  Judgment here: Khaled v Security Service & Ors [2016] EWHC 1727 (QB). This is another judgment, post Sarkandi (see previous blog) on the extent to which AF (No. 3) v Secretary of State for the Home Department [2010] standards of disclosure apply in decisions to propose people for sanctions designations, and where declarations have been made under the Justice & Security Act (JSA).

The High Court (Mr Justice Irwin) said AF (No. 3) enhanced disclosure obligations did not apply in this case, therefore as much as possible had to be disclosed consistent with section 8 of the JSA but no more.

ECJ rejects Zimbabwe appeal– Tomana & Ors

The European Court of Justice has dismissed an appeal brought by the former Attorney General of Zimbabwe Johannes Tomana and 120 others against the General Court’s decision last year not to annul their listings on the EU’s targeted sanctions on Zimbabwe (see previous blog) – Case C-330/15 P Tomana & Ors v Council [2016].  Since the General Court’s judgment, all of the appellants have been de-listed and most of the EU’s Zimbabwe sanctions have been lifted (see previous blog). Michael O’Kane and Maya Lester QC acted for the appellants.

The appellants had argued that the EU did not have power to include people not connected with the Government.  The ECJ upheld the General Court’s judgment that that was correct, but that everyone on the list was an “associate” of the Government, on a very broad definition of association. The Court said everyone on the list was an associate, because even those whose jobs were unconnected with the Government or who were not even alleged to hold a position connected with the Government were alleged to have committed acts of election violence (in some cases in the distant past) for which the Government should be held responsible.

The Court rejected the argument that the General Court had wrongly failed to treat each application as one that merited separate consideration, and said that the appellants’ arguments relating to the position / conduct of some of the individuals could not be appealed because the General Court was the fact-finder. And although the EU had only notified Mr Tomana, not the other applicants, of their re-listing, that had not prejudiced their rights of defence.

OFAC issues Finding of Violation to BBVA Compass

OFAC has issued a Finding of Violation to BBVA Compass (Compass), a US-based financial holding company, for violations of the Foreign Narcotics Kingpin Sanctions Regulations.  On 12 June 2013, OFAC designated two members of the Sanchez Garza family, which was said to be involved in money laundering operations on behalf of SDN Rafael Cara Quintero.  At the same time, Compass maintained accounts for both of the designated people, and it was not until around May 2014, when a US Government agency contacted Compass to enquire about the accounts, that they were identified and blocked.  Compass later determined that it failed to identify the accounts due to a deficiency in its screening software that prevented it from reviewing dormant or inactive accounts against the SDN List.

OFAC considered Compass’ conduct to have been aggravated by its large size and commercial sophistication, the potential harm caused to US sanctions due to the screening deficiency, which lasted more than 4 years, and the fact that OFAC had previously issued a cautionary letter to Compass for substantially similar conduct.  In mitigation, OFAC noted that no Compass managers or supervisors appeared to have been aware of the conduct leading to the violations, no economic benefit was conferred to an SDN, Compass took remedial action in response to the violations, and it agreed to toll the statute of limitations several times.

OFAC’s enforcement notice is here.

UK Government launches Export Control Joint Unit

On 18 July, the UK government launched the Export Control Joint Unit (ECJU), a new body that brings together staff and resources from the Export Control Organisation, the Foreign Office, and the Ministry of Defence.  Its function is to promote global security through the UK’s strategic export controls and facilitate responsible exports.

In conjunction with the launch of the ECJU, the decision to grant or refuse an export licence in any individual case has become the responsibility of the Secretary of State of the newly formed Department for International Trade.  However, the UK’s export licensing process, including the issuance of MOD Form 680 for approval to release classified information and equipment to foreign entities, is unchanged.  Exporters should continue to use the SPIRE online export licensing system.

The Department for Business, Innovation, & Skills’ notice to exporters is here.

Abdulbasit Abdulrahim de-listed from US sanctions

Abdulbasit Abdulrahim has been removed from OFAC’s SDN List, where he had been listed as a Specially Designated Global Terrorist.  Mr Abdulrahim was listed by the UN in 2008 for alleged connections with Al-Qaida, and the EU subsequently implemented that listing under its own sanctions.  The UN de-listed him in 2010 and the EU followed suit in 2011.  In January 2015, the General Court of the EU annulled his historic listing on the basis that the reasons given by the UN Sanctions Committee were insufficient to justify the listing, and that there was no evidence that Mr Abdulrahim was associated with either the Libyan Islamic Fighting Group or Al-Qaida when he was listed in 2008 (see previous blog).

OFAC publishes new FAQs on Cuba sanctions

OFAC has published 2 new FAQs, relating to information collection and recordkeeping requirements for providers of carrier or travel services to or from Cuba under US sanctions.  They confirm that, in the case of customers travelling under a specific licence, carriers and travel service providers subject to US jurisdiction may retain the licence number on file in place of a physical or electronic copy of the licence itself.  In addition, they caution that a certification from each customer, indicating the provision of the CACR authorising their travel, must be retained for at least 5 years from the date of the transaction, along with that customer’s name and address.

The updated list of FAQs is here.

EU General Court rejects Samir Hassan’s Syria case

The General Court has dismissed Samir Hassan’s application to annul his listing on the EU’s sanctions on Syria in Case T-790/14 Hassan v Council.

The Court said that his position as Vice President for Syria’s bilateral business council with Russia satisfied the criterion that he benefitted from or supported the Syrian regime, and it therefore did not need to consider the other reasons for his inclusion.  The Court rejected (as it usually does) Mr Hassan’s proportionality and presumption of innocence arguments, and his claim for damages, since the Council’s conduct in listing him was not unlawful.