Last week (13 July 2018), the US Department of Commerce announced that Chinese telecoms company ZTE (Zhongxing Telecommunications Equipment Corporation and ZTE Kangxun Telecommunications Ltd) had placed $400 million in escrow at a US bank and, as a result, the Department had lifted the 7-year denial order on ZTE pursuant to the $1.4 billion settlement agreement approved last month (see our previous blog for the full details of that new agreement).
US Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin have written a letter rejecting the EU’s request for exemptions to the US Iran sanctions that will be re-imposed in August and November 2018 after the US decision to withdraw from the JCPOA. The letter states that the “[US] will seek to provide unprecedented financial pressure on the Iranian regime”.
The EU had requested exemptions in a joint letter signed by the E3 last month (summarised in our previous blog). They sought carve-puts for finance, energy and healthcare. The US letter states that the US will only allow carve-outs if necessary for US national security or humanitarian purposes.
Today, the US Department of State has designated al-Ashtar Brigades, “an Iran-backed terrorist group in Bahrain”, as a Foreign Terrorist Organisation (FTO), pursuant to section 219 of the Immigration and Nationality Act, and as a Specially Designated Global Terrorist (SDGT), pursuant to section 1(b) of Executive Order 13224. As a result, the group will now be subject to US asset freezing measures. See OFAC Notice and State Department Press Release.
In March 2017, the State Department designated two al-Ashtar Brigades-affiliated individuals as SDGTs (see here).
OFAC has designated Malaysia-based Mahan Air Travel and Tourism Sdn Bhd (a.k.a. Mahan Travel), pursuant to Executive Order 13224, “for acting for or on behalf of Mahan Air, an Iranian airline previously designated in connection with Iran’s support for international terrorism”.
According to the US Treasury press release, Mahan Travel has served Mahan Air for at least 8 years as its sole General Sales Agent in Kuala Lumpur, Malaysia, and provides reservation and ticketing services for Mahan Air. As a result, Mahan Travel will now be subject to US asset freezing measures. See OFAC Notice.
In light of the recent US decision to withdraw from the JCPOA and to reimpose sanctions on Iran, the EU Parliament approved last week (4 July 2018) the first reading of a Commission Delegated Decision which adds Iran to the list of countries eligible for investment activities by the European Investment Bank (EIB) (the EIB’s External Lending Mandate). The Delegated Decision, however, will not oblige the EIB to work with Iran.
This measure, along with the EU’s amended Blocking Statute (previous blog), forms the EU’s strategic approach to protecting European companies from the extraterritorial effects of US Iran sanctions.
1. To assess the extent and risks of US secondary sanctions to their members and clients. US secondary sanctions are those imposed under the Countering America’s Adversaries Through Sanctions Act (CAATSA), which provides that US sanctions may be imposed on any person/entity that facilitates a “significant transaction” with any of the designated Russian people/entities.
2. “In the case of a new client” who is subject to US Russia sanctions, members of the Cyprus Bar “are encouraged to avoid entering into any business relationship with them”.
Today, the Joint Commission of the JCPOA (the body responsible for overseeing the implementation of the JCPOA) held a ministerial level meeting in Vienna to discuss the continued implementation of the Iran nuclear deal in light of the recent US decision to withdraw from the agreement and to reimpose sanctions on Iran. Statement here.
The meeting was chaired by EU High Representative Federica Mogherini and was attended by representatives from China, France, Germany, Russia, UK and Iran. They all reconfirmed their commitment to the full and effective implementation of the nuclear deal, and affirmed their commitment regarding the following objectives:
· The maintenance and promotion of wider economic and sectoral relations with Iran;
· The preservation and maintenance of effective financial channels with Iran;
· The continuation of Iran’s export of oil and gas condensate, petroleum products and petrochemicals;
· The continuation of sea (including shipping and insurance), land, air and rail transportation relations;
· The promotion of export credit cover;
· Clear and effective support for economic operators trading with Iran, particularly SMEs;
· The encouragement of further investments in Iran;
· The protection of economic operators for their investment and other commercial and financial activities in or in relation to Iran;
· The bringing together of private and public-sector experts, including through the promotion of Business Councils;
· The practical support for trade with and investment in Iran; and
· The protection of companies from the extraterritorial effects of US sanctions (see previous blog on the updating of the EU Blocking Statute).
Yesterday, OFAC added 3 Nicaraguan nationals to its Global Magnitsky sanctions list (asset freezes and travel bans imposed).
Francisco Diaz (Nicaraguan National Police Commissioner) and Fidel Moreno (Secretary of the Mayor’s Office of Managua) were sanctioned pursuant to Executive Order (EO) 13818 for being “responsible for, or the leaders of entities involved in, serious human rights abuse in Nicaragua”. Jose Francisco Lopez (President of the Nicaraguan state-owned oil company Petronic, and Vice President of ALBA de Nicaragua (company that imports and sells Venezuelan petroleum products)) was sanctioned pursuant to EO 13818 for “engaging in corrupt activities”. See OFAC Notice and US Treasury press release.