The European Commission has published draft guidance on the core elements that should be included in Internal Compliance Programmes (ICPs) for compliance with EU and national dual-use export control laws and regulations. The Commission has requested feedback on the guidance in an online survey, which closes on 15 November 2018. See UK Notice.
The House of Commons Library has published an interesting Briefing Paper on The Future of Sanctions post Brexit (26 September 2018). A few of the points it makes:
- The terms of agreement on the UK’s post Brexit involvement in EU foreign policy, including sanctions, is still unclear. The UK has said it wants an independent sanctions policy, the EU has said it wants “decision making autonomy”.
- Transatlantic cooperation is likely to become more difficult, sanctions could become “entangled with increasingly competitive and nationalist trade policies”, and without the UK, EU sanctions may become more damaging to UK interests. Less coordinated sanctions could undermine their beneficial effects and exacerbate their unwelcome consequences (“freezing the Western assets of oligarchs close to the Kremlin, for example, may result in rich Russians re-patriating their wealth – something that the Kremlin would welcome”.
- The UK will have to take over the “technical work” previously done in Brussels to ensure good sanctions design, but the UK “supplied a disproportionate amount of this expertise” to the EU in any event.
- The UK courts are likely to be “crucial in shaping policy” and there is likely to be a “big increase in litigation” which will require “extra capacity in the UK court system”.
- A problem with the Government’s position that there should be no remedy in a UK court for an unfounded UN designation is that there is only a UN Ombudsperson for one sanctions list (the UN Ombudsperson for the ISIL (Da’esh) and Al-Qaida Sanctions Committee) not the 13 other sanctions regimes.
- One disadvantage of Magnitsky legislation is that it could be applied selectively and could lead to more litigation.
The UN Security Council has removed a further 5 entities from its Iraq sanctions list: State Company For Electrical Industries; State Enterprise For Drug Industries; Iraqi Fairs Administration; State Enterprise For Shopping Centres; and State Trading Company For Construction Materials. As a result, the entities will now longer be subject to UN asset freezes. See UN press releases here and here.
The EU implemented the de-listings of the ‘State Company For Electrical Industries’ and the ‘State Enterprise For Drug Industries’ yesterday, see Commission Implementing Regulation (EU) 2018/1286.
Last week (19 September), OFAC designated two ISIS financiers, pursuant to Executive Order 13224 (asset freezes imposed).
Syria-based Emraan Ali was designated for “acting for or on behalf of ISIS”, and Trinidad-based Eddie Aleong was designated for “assisting in, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of ISIS”. See OFAC Notice and US Treasury press release.
Yesterday (26 September), OFAC sanctioned 4 members of Venezuelan President Nicolas Maduro’s inner circle, of whom he has relied upon to “maintain his grip on power”: Cilia Adela Flores de Maduro (First Lady and former Attorney General and President of the National Assembly of Venezuela); Delcy Eloina Rodriguez Gomez (Executive Vice President of Venezuela); Jorge Jesus Rodriguez Gomez (Venezuelan Minister of Popular Power for Communication and Information); and Vladimir Padrino Lopez (Venezuelan Defence Minister). They will now be subject to US travel bans and asset freezes, pursuant to Executive Order 13692.
OFAC also targeted a “network supporting a key front man for designated President of Venezuela’s National Constituent Assembly (ANC) Diosdado Cabello Rondon”. As a result, 3 entities (Averuca CA, Quiana Trading Limited, and Panazeate SL) and 2 individuals (Jose Omar Paredas and Edgar Alberto Sarria Diaz) have been sanctioned (travel bans and asset freezes imposed). Furthermore, a $20 million Gulfstream 200 private jet, tail number N488RC, located in Florida, has been identified as blocked property. See OFAC Notice and US Treasury press release.
Last week (21 September), OFAC extended the expiration date of three General Licences relating to EN+ Group and RUSAL. See OFAC Notice.
General Licences 13D, 14A, and 16A amend their previous versions by extending the expiration date from 23 October 2018 to 12 November 2018 for transactions related to the companies and their subsidiaries. The US Treasury press release states that these licences were extended to “allow sufficient time to review” the proposals EN+ and RUSAL put to the US Government regarding “substantial corporate governance changes that could potentially result in significant changes in control” (see previous blog).
The E3/EU+2 (China, France, Germany, Russia and the UK) and Iran have issued a Joint Statement welcoming an initiative to maintain and develop a Special Purpose Vehicle (SPV) to “facilitate payments related to Iran’s exports (including oil) and imports, which will assist and reassure economic operators pursuing legitimate business with Iran”.
EU High Representative Federica Mogherini has stated that the SPV “will mean that EU Member States will set up a legal entity to facilitate legitimate financial transactions with Iran and this will allow European companies to continue trade with Iran, in accordance with European Union law, and could be opened to other partners in the world. You will get more technical information about that, as the technical work continues in the coming days.”
Earlier this month, OFAC sanctioned Thailand-based My Aviation Company Limited, pursuant to Executive Order 13224, for “acting for or on behalf of Mahan Air, an Iranian airline previously designated for supporting Iran’s terrorism activities”. According to the US Treasury press release, My Aviation Company Limited is “serving as a Mahan Air General Sales Agent (GSA) in Thailand”, which includes assisting the airline with (inter alia) sales and marketing, freight reception and handling, airport warehouse and ramp supervision, administration services, and financial services. As a result of this OFAC action, the company will now be subject to US asset freezing measures. See OFAC Notice.
In July 2018, OFAC sanctioned a Malaysia-based entity (Mahan Air Travel and Tourism Sdn Bhd) for also “acting for or on behalf of Mahan Air”, having allegedly served Mahan Air as its sole GSA in Kuala Lumpur, Malaysia, for at least 8 years.