Revised US Bill on Russia, Iran & DPRK sanctions now agreed

US Republicans and Democrats have reached agreement the Countering Iran’s Destabilising Activities Bill that allows new US sanctions on Russia, Iran and North Korea.

We reported in June that the US Senate had voted overwhelmingly in favour of the Bill, that it had been held up in the House of Representatives, and that the Senate had been sent a revised version. The new agreed version adds North Korea sanctions to the package. It requires the President to submit to Congress a report on proposed actions that would “significantly alter” US foreign policy in connection with Russia, including easing sanctions. Congress would have at least 30 days to hold hearings and then vote to uphold or reject the President’s proposed changes.  The House will vote on the Bill on Tuesday this week.

OFAC fines ExxonMobil $2,000,000 for sanctions violations

OFAC has fined US oil and gas company ExxonMobil $2,000,000 for violating US sanctions relating to the Ukraine crisis.  Between 14 May and 23 May 2014, the presidents of ExxonMobil’s US subsidiaries are said to have dealt with designated person Igor Sechin, president of Russian oil company Rosneft. Exxon signed 8 legal documents with Mr Sechin related to oil and gas projects in Russia, but has said that it believed the sanctions only prohibited doing business with Mr Sechin as an individual and not in his capacity as president of Rosneft. The deals were signed during US Secretary of State Rex Tillerson’s tenure as Exxon’s chief executive.

At the time the contracts were signed, there was a FAQ on the OFAC website stating that it was prohibited to enter into contracts signed by a SDN.  OFAC stated in its enforcement notice that although the guidance said that “different interpretations may exist among and between the sanctions programmes” OFAC administers, the FAQ clearly indicated that OFAC had in another sanctions programme involving SDNs viewed the signing of a contract with an SDN as prohibited, even if the company on whose behalf the SDN signed was not prohibited. Exxon disputes this, and has brought a lawsuit in the US attempting to stop the fine. It claims that OFAC is trying to retroactively apply a new interpretation of the sanctions that did not apply at the time the deals were signed.

EU updates DPRK, Libya, and DRC sanctions

DPRK

The EU has amended the entries for 3 entities subject to its sanctions on DPRK, namely Namchongang Trading Corporation, Green Pine Associated Corporation, and Strategic Rocket Force of the Korean People’s Army.  It has also deleted the entries for Pak To-Chun, Paek Se-bong, and Strategic Rocket forces from its annexes containing autonomous EU listings, because they are now listed by the UN since June (see previous blog).

See Commission Implementing Regulation 2017/1330 amending Council Regulation 329/2007 and Council Decision (CFSP) 2017/1339 amending Council Decision (CFSP) 2016/849. The UK’s notice is here.

Libya

As foreshadowed earlier this week here, the EU has introduced new restrictions on exports to Libya, relating to certain goods which may be used for human smuggling and trafficking. The list of goods is in Annex VII of Regulation 2016/44 as amended. The EU has also continued its sanctions against all currently listed persons (see notice here). Regulation 2017/1325 amending Regulation 2016/44 and Decision 2017/1338 amending Decision 2015/1333.

Democratic Republic of Congo

The EU has implemented UN amendments to the listing criteria for sanctions on the Democratic Republic of Congo to include people involved in planning, sponsoring, or participating in attacks against members of the UN Group of Experts. Regulation 2017/1326 amending Regulation 1183/2005 and Decision 2017/1340 amending Decision 2010/788/CFSP.

New US Iran ballistic designations

The USA yesterday designated 14 people and entities for supporting “illicit Iranian actors or transnational criminal activity”. The new listings target Iran’s military, Revolutionary Guard Corps, and ballistic missile programme; 3 networks are said to have provided support through the development of unmanned aerial vehicles and military equipment, the production and maintenance of fast attack boats, or the procurement of electronic components.

The US has also designated Iran-based Ajily Software Procurement Group as a Transnational Criminal Organisation, along with 3 connected people, for stealing engineering software programmes from the US and other Western countries, some of which it sold to the Iranian military and government.

Details of all the new listings are here, and the State Department’s statement is here.  On Monday the US administration certified that Iran was complying with its obligations under the JCPOA nuclear deal. However, it has been highly critical of Iran’s continued development of ballistic missiles and some of its activities in the Middle East, and promised new sanctions to “hold Iran accountable”. The Iranian Foreign Ministry said it will reciprocate by sanctioning US persons (link to statement here).

Judgments on duties of EU when listing for Ukraine misappropriation

We reported in January 2016 (here) that the EU Court had annulled the designations of Mykola Azarov and Sergej Arbuzov, both former Prime Ministers of Ukraine, because the only basis for saying that they were “responsible for misappropriating Ukrainian state funds” was a letter in March 2014 from Ukraine’s Prosecutor General that gave no details of the matters alleged against them and the nature of their alleged responsibility for misappropriation of assets.

The EU Court has now upheld their re-listings on the basis that there was sufficient evidence that they are “subject to criminal proceedings by the Ukrainian authorities for the misappropriation of public funds or assets”.  Judgments here; Cases T-221/15 Arbuzov and T-215/15 Azarov.  The General Court rejected grounds for annulment based on insufficient reasons, rights of defence, misuse of powers, and disproportionate breach of fundamental rights. It held that the EU Council has to check that the listed person is facing criminal proceedings for misappropriation of state funds in Ukraine, but it does not have to question the evidence underlying those proceedings or the procedure (particularly since Ukraine is a member of the Council of Europe & ECHR) and it is up to the EU to decide it if needs additional evidence or clarification.

US considers new sanctions on Venezuela

President Trump has said that the US will impose “strong and swift” sanctions on Venezuela if its president Nicolás Maduro carries out his plan to create a “constituent assembly”, which could rewrite the country’s constitution. It is reported that the White House is considering a number of possible new sanctions, including banning imports of Venezuelan oil, listing more government officials, and cutting diplomatic ties.

EU adds 16 people to Syria sanctions

The EU has sanctioned 16 more people on its Syria regime, for their role in the development and use of chemical weapons against the civilian population.  The new listings are of 8 high-ranking military officials and 8 scientists, and bring the total number of people listed under the sanctions, which impose an EU asset freeze and travel ban, to 255. It has also amended the statements of reasons for Saji Darwish and the Centre d’etudes et de recherches syrien (notice here).

See Implementing Regulation 2017/1327 implementing Regulation 36/2012 and Implementing Decision 2017/1341 implementing Decision 2013/255/CFSP. The EU’s notice to the newly listed people is here.