EU Court upholds EU re-listings where no factual change – NITC and Tejarat

CJEU1The 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.

NITC

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.

Tejarat

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.

US accuses Huawei’s CFO of violating Iran sanctions

Huawei.jpgUS authorities have requested the extradition of Huawei’s Chief Financial Officer and daughter of the firm’s founder, Meng Wanzhou, who is currently being held on remand in Vancouver, Canada, over allegations that she utilised Skycom Tech Co Ltd, an “unofficial subsidiary” of Huawei, in order to violate US sanctions on Iran between 2009 and 2014. Her bail hearing before a Vancouver court is due to be determined today.

US indicts 3 men for violating Iran sanctions in connection with $9bn military supply contracts

US Department of JusticeThe 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.

UK sentences 3 people for trafficking fighter jet parts to Iran

Parliament8Three individuals – Alexander Samuel George, Paul Robert Attwater, and Iris Louise Attwater – have been convicted in the UK of evading export controls in relation to Iran.

Alexander George, who was sentenced yesterday to 2½ years’ imprisonment, shipped military items to Iran, including Russian MiG and US F4 Phantom parts, through various companies and countries without the appropriate licence. Paul Attwater and his wife Iris, who each received suspended sentences of 6 months’ imprisonment last month, sourced dual-use aircraft parts from the USA and shipped them to Alexander George’s companies in Malaysia and Dubai, which then sent them to Iran.

The offenders were also disqualified from being a company director (9 years for Alexander George, and 6 years each for Paul and Iris Attwater). POCA proceedings will now follow to recover the money made from the criminality. See UK Press Release.

US sanctions Russia-Iran oil network supporting Syrian regime & terrorist groups

US Treasury Building2OFAC has designated 5 individuals and 4 entities of an “international network through which the Iranian regime, working with Russian companies, provides millions of barrels of oil to the Syrian government. The Assad regime, in turn, facilitates the movement of hundreds of millions of U.S. dollars (USD) to the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) for onward transfer to HAMAS and Hizballah.” The designations were made pursuant to Syria-related Executive Order 13582 and/or terrorism-related Executive Order 13224 (both authorities impose US asset freezes). See OFAC Notice, US Treasury Press Release, Department of State Press Release, and OFAC Advisory: Sanctions Risks Related to Shipping Petroleum to Syria.

The 5 individuals: Muhammad Qasim al-Bazzal; Mohamed Amer Alchwiki; Andrey Dogaev; Rasoul Sajjad; and Hossein Yaghoubi Miab.

The 4 entities: Global Vision Group (Russia-based); Promsyrioimport (Russia-based); Tadbir Kish Medical and Pharmaceutical Company (Iran-based); and MB Bank (Russia-based).

US grants Iraq 45-day sanctions waiver on Iranian energy

US-Iraq.jpgFollowing the full re-imposition of US Iran sanctions last week, the US has granted Iraq a temporary 45-day sanctions waiver to “continue purchasing natural gas and electricity from Iran”. See video announcement from the US Embassy in Baghdad, Iraq.

Eight other jurisdictions (China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey) were initially granted temporary waivers on the importation of Iranian oil, on the basis that they would stop or greatly reduce oil revenues in the coming weeks.

US sanctions on Iran back in force today; over 700 added to SDN list

Trump5Today, the US will complete the full re-imposition of sanctions on Iran that were lifted or waived under the JCPOA, aimed at “depriving the regime of the revenues that it uses to spread death and destruction around the world”, in particular oil revenue. The timing is said to coincide with the anniversary of the 1979 storming by Iranian revolutionaries of the US embassy in Tehran when 52 American diplomats were held hostage for 444 days. Key points:

  • The last set of Iran sanctions that were lifted under the JCPOA will be re-instated today, including measures against Iran’s energy, ship building, shipping, and banking sectors (the first set of measures were imposed on 7 August 2018).
  • Over 700 individuals, entities, vessels and aircraft have also been added to the SDN list, including 50 Iranian banks and their foreign and domestic subsidiaries, oil exporters, and shipping companies – see OFAC Notice, Treasury press release, and new OFAC FAQs.
  • 8 jurisdictions (China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey) will be granted temporary waivers on the importation of Iranian oil, on the basis that they will stop or greatly reduce oil revenues in the coming weeks.
  • An amendment to the Iranian Transactions Sanctions Regulations will take effect today, reflecting the re-imposition of sanctions pursuant to certain sections of Executive Order 13846. See White House Factsheet.

A Joint Statement from EU High Representative Federica Mogherini, France, Germany, and the UK says that they “deeply regret the further re-imposition of sanctions by the US” and have committed to work on the “preservation and maintenance of effective financial channels with Iran, and the continuation of Iran’s export of oil and gas”. The EU Special Purpose Vehicle (SPV), whose aim is to safeguard non-US trade with Iran, is not yet in place (see previous blog). In a Special Press Briefing last week, US Treasury Secretary Steven Mnuchin said that “if there are transactions that go through [the SPV which] have the intent of evading [US-Iran] sanctions, we will aggressively pursue our remedies”. Link to Updated UK Guidance on Trade and Export with Iran.

OFAC amends Iran Sanctions Regs & delists 2 from Global Magnitsky sanctions

US Treasury BuildingIran:

Today, OFAC issued an amendment to the Iranian Transactions and Sanctions Regulations, in order to take additional regulatory steps to implement the US decision to cease participation in the JCPOA. The amendment will take effect upon publication in the Federal Register on 5 November 2018. Further OFAC guidance will also be issued on that day relating to the full re-imposition of US Iran sanctions. See OFAC Notice.

Global Magnitsky:

In a separate action today, OFAC removed Turkey’s Minister of Justice, Abdulhamit Gul, and Minister of Interior, Suleyman Soylu, from the US Global Magnitsky sanctions list (US asset freezes and travel bans lifted). Both were listed in August 2018, pursuant to Executive Order 13818 (Global Magnitsky), over the arrest and detention of US Pastor Andrew Brunson (previous blog), who has since been released and returned to the United States. See OFAC Notice.