The Court of Justice has dismissed two appeals, both challenges to the EU Council’s practice of re-listing entities that had won their annulment challenges, without there being any change in factual circumstances.
In July 2014, the EU General Court annulled the initial EU Iran sanctions listing of the National Iranian Tanker Company (NITC) because the EU’s claim that NITC provided financial support to the Iranian government was unsubstantiated (see previous blog).
In February 2015, NITC was re-listed on the same factual basis: (i) as before, NITC was listed for providing “financial support” to the Iranian government (now as a result of alleged links between its shareholders and the government); and (ii) now also for providing “logistical support” to the Iranian government through the transport of Iranian oil.
In September 2016, the General Court would not annul NITC’s re-listing because it said that although the EU had relied on the same facts, the new label of “logistical support” had meant that the issue want not res judicata (and did not breach the NITC’s legitimate expectations or the principles of legal certainty and effective remedies) because the Court had previously only considered “financial support” in relation to NITC (see previous blog). The Court of Justice has now dismissed NITC’s appeal against that judgment: C-600/16 P (29 November 2018). It rejected arguments that the Council’s re-labelled listing criterion could have been relied on before and that nothing had changed to justify the re-listing. Maya Lester QC acts for the NITC.
In January 2015, the EU General Court annulled Bank Tejarat’s initial designation because it could not establish that the bank had provided support for nuclear proliferation or assisted others in the breach/avoidance of sanctions (see previous blog). In April 2015, Bank Tejarat was re-listed for providing “significant support to the Government of Iran”, and for being “involved in the procurement of prohibited goods and technology”.
In March 2017, the General Court declined to annul Bank Tejarat’s re-listing because the Council had adequately shown that the bank had supported the Iranian government by offering financial resources and services for oil and gas development projects (see previous blog). The Court of Justice dismissed Bank Tejarat’s appeal against the re-listing: C-248/17 P (29 November 2018) for similar reasons as those given in the NITC case.
At today’s EU Foreign Affairs Council meeting, the EU adopted Council Decision (CFSP) 2018/1930 and Council Implementing Regulation (EU) 2018/1929, which adds 9 people to its Russia sanctions list targeting “actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine” (asset freezes and travel bans). The individuals were listed for “their involvement in the so‑called ‘elections’ in the so‑called ‘Donetsk People’s Republic’ and ‘Luhansk People’s Republic’”. According to the EU Press Release, the EU “considers these “elections” illegal and illegitimate and does not recognise them”.
The Council will also be discussing today whether new sanctions should be imposed on those involved in the recent escalation in the Sea of Azov of Russian forces against Ukrainian ships, and whether to adopt a new sanctions regime targeting gross violations of human rights globally, similar to the US Magnitsky Act. See Meeting Agenda.
The Europe Minister Alan Duncan MP has written to the Chair of the House of Commons Foreign Affairs Committee, Tom Tugendhat MP, outlining what the Foreign & Commonwealth Office is doing to prepare for the possibility of a no-deal Brexit. They will:
1. Begin laying statutory instruments (UK Regulations) to enable sanctions regimes to be implemented under the Sanctions Act, which will come into force on exit day.
2. The plan is one SI per sanctions regime. They will prioritise “the most complex, high profile and changeable regimes” and have “de-prioritised” regimes where the UK can “rely on retained EU law [under the UK Withdrawal Act] until new regulations are made and the retained law is revoked”.
3. Half of sanctions regulations will be subject to negative procedure, half the “made-affirmative” procedure.
The US Department of Justice has announced that three US-based men, Abul Huda Farouki, Mazen Farouki, and Salah Maarouf, have been indicted for (inter alia) violating US-Iran sanctions in connection with two multi-million-dollar contracts ($8bn and $984m) to provide supplies and logistical support to US troops in Afghanistan (awarded by the US Department of Defence). The contracts required the defendants to abide by US-Iran sanctions, which prohibit US citizens and companies from engaging in commercial activity in Iran. However, according to the indictment, the defendants conspired to cut costs under the contracts by shipping materials and trucks to Afghanistan via Iran, rather than using legal but more expensive routes. Last week (29 November), all three defendants pleaded not guilty on arraignment. The next hearing is scheduled for 6 December.
ACI’s 9th Annual New York Forum on Economic Sanctions will take place this week on 6 – 7 December 2018 at Andaz Wall Street Hotel, New York.
For further details, see Conference Agenda and Request a Conference Brochure. When registering, use code P10-999-EUSB19 for a 10% online discount.
The UK has adopted the Sanctions Review Procedure (EU Exit) Regulations 2018, SI 2018/1269, which come into force on 7 January 2019.
They make provision for (inter alia) the procedures under the UK Sanctions Act to enable people / entities to request a review, variation or revocation of a sanctions listing or ship specification.
OFAC has designated 2 Iranian nationals, Ali Khorashadizadeh and Mohammad Ghorbaniyan, “who helped exchange digital currency (bitcoin) ransom payments into Iranian rial on behalf of Iranian malicious cyber actors involved with the SamSam ransomware scheme”. For the first time, OFAC has also publicly identified 2 digital currency addresses associated with these 2 individuals, in which over 7000 bitcoin transactions (worth millions of US dollars) were processed through. These cyber-related designations were made pursuant to Executive Order 13694, which imposes US asset freezes and travel bans, and could subject others to secondary sanctions if they engage in transactions with the 2 listed individuals. See OFAC Notice, US Treasury Press Release, and Two New Digital Currency-Related FAQs.
OFAC has announced a $87,507 settlement with Virginia-based Cobham Holdings Inc in order to settle on behalf of its former subsidiary, Aeroflex/Metelics Inc, three violations of the Ukraine-Related Sanctions Regulations. Specifically, between July 2014 and January 2015, Metelics indirectly exported defence components for end-use by Russian defence company Almaz Antey Telecommunications LLC (AAT). At all relevant times, although AAT was not explicitly identified on the SDN List, it was owned 50% or more by Joint-Stock Concern Almaz-Antey, which OFAC had sanctioned on 16 July 2014 (two weeks before Metelics made its first shipment of defence components). See OFAC Notice and Enforcement Information.