Venezuela has initiated WTO dispute consultations with the US, claiming that certain US laws and regulations relating to goods of Venezuelan origin, the liquidity of Venezuelan public debt, transactions in Venezuelan digital currency, and the SDN List are inconsistent with the WTO’s General Agreement on Tariffs and Trade (GATT) 1994 and the General Agreement on Trade in Services (GATS). After 60 days, if the consultations have failed to resolve the dispute, Venezuela may request adjudication by a panel. See WTO Press Release.
Yesterday (10 January), US Treasury Secretary Steven Mnuchin issued a statement in advance of a bipartisan, classified briefing for members of the House of Representatives on the matter. Mr Mnuchin confirmed that “Oleg Deripaska will remain sanctioned, his property and interests remain blocked, and any companies he controls are also sanctioned”, and that “[u]nder CAATSA, any person who knowingly facilitates a significant transaction for or on behalf of Deripaska faces secondary sanctions”.
Furthermore, that En+ Group, RUSAL, and JSC EuroSibEnergo were “designated for sanctions solely because they were majority-owned or controlled by Deripaska. These entities are undergoing significant restructuring and governance changes that sever Deripaska’s control and significantly diminish his ownership. They have committed to provide Treasury with an unprecedented level of transparency into their dealings to ensure that Deripaska does not reassert control. As a result, these entities will no longer be designated for sanctions.”
OFAC has announced that due to the current US Federal Government shutdown (which began on 22 December 2018), no licence applications will be processed during this time. Applications may be submitted upon the re-opening of the Federal Government, when they will start to be processed again.
The US Congressional Research Service has published its Iran Sanctions report (4 January 2019), providing a detailed analysis of US and international sanctions against Iran. It notes that the recent reimposition of US sanctions has “begun to harm Iran’s economy as major companies exit the Iranian economy rather than risk being penalized by the United States”. Furthermore, that “Iran’s oil exports are decreasing”, and that the value of Iran’s currency has “sharply declined”.
Today (8 January), OFAC designated 7 Venezuelan individuals and 23 entities, pursuant to Executive Order 13850 (asset freeze and travel ban), for their involvement in a “significant corruption scheme designed to take advantage of the Government of Venezuela’s currency exchange practices, generating more than $2.4 billion in corrupt proceeds”. The designations include 2 former Venezuelan National Treasurers, Claudia Patricia Diaz Guillen and Alejandro Jose Andrade Cedeno. OFAC also identified 1 private aircraft as block property (N133JA). See OFAC Notice and US Treasury Press Release.
Furthermore, OFAC has issued Venezuela-related General Licence 6, which authorises US persons to engage in specified transactions related to winding down or maintaining business with Globovision Tele CA and Globovision Tele CA Corp, which were designated in today’s action, until 8 January 2020. See New OFAC FAQ about this general licence.
Yesterday (20 December), US President Donald Trump signed into law the Nicaragua Human Rights and Anticorruption Act of 2018, which instructs the US to oppose international loans to the Nicaraguan government, unless they are sought for the purposes of addressing basic human needs or promoting democracy in Nicaragua. The Act also imposes targeted sanctions (asset freezes and travel bans) on any foreign person, including any current or former Nicaraguan government official, determined to be responsible for (inter alia) serious human rights violations and corruption. See Statement by President Trump.
Last month, pursuant to a new Nicaragua-related Executive Order, OFAC sanctioned Rosario Maria Murillo De Ortega (Vice President of Nicaragua and First Lady) and Nestor Moncada Lau (national security advisor to the President and Vice President) for their roles in serious human rights abuses and corruption (see previous blog).
Missouri-based holding company Zoltek Companies Inc, which owns US-based Zoltek Corporation and Hungary-based Zoltek Vegyipari ZRT, has agreed to pay $7,772,102 to OFAC for violating US sanctions on Belarus. Specifically, between January 2012 and October 2015, Zoltek Corporation approved 26 purchases of acrylonitrile, a chemical used in the production of carbon fibre, between Zoltek Vegyipari ZRT and JSC Naftan, a Belarusian entity which OFAC designated in August 2011 pursuant to Executive Order 13405. See OFAC Notice and Enforcement Information.