Yesterday, US President Trump announced that he had increased sanctions on Venezuela by issuing a new Executive Order, prohibiting US persons from transacting in:
(i) The purchase of any debt owed to the Venezuelan government (including accounts receivable);
(ii) Any debt owed to the Venezuelan government that is pledged as collateral after 21 May 2018 (including accounts receivable); and
(iii) The sale, transfer, assignment, or pledging as collateral by the Venezuelan government of any equity interest in any entity in which the Venezuelan government has a 50% or greater ownership interest.
Last week, OFAC sanctioned (inter alia) a number of current and former officials of the Venezuelan government (previous blog).
Today, OFAC designated Venezuelan national Diosdado Cabello Rondón (First-Vice President of President Maduro’s political party), pursuant to Executive Order 13692, for being a current or former official of the Government of Venezuela. OFAC also designated 3 other individuals – José David Cabello Rondón (Mr Rondón’s brother), Marleny Josefina Contreras Hernández (Mr Rondón’s wife), and Rafael Alfredo Sarria Diaz (Mr Rondón’s “front man”) – for being current or former officials of the Government of Venezuela, or for acting for or on behalf of designated individuals as key figures in Mr Rondón’s “corruption network”. As a result, US travel bans and asset freezing measures apply to all designated individuals.
OFAC also sanctioned 3 Florida-based companies that are owned or controlled by Mr Diaz, namely: SAI Advisors Inc; Noor Plantation Investments LLC; and 11420 Corp (asset freezes imposed). Furthermore, 14 properties in Florida and New York, owned by Mr Diaz directly or through his companies have been blocked. See OFAC Notice and US Treasury press release.
On 22 May 2003, the US adopted Executive Order (E.O.) 13303, which declared a national emergency with respect to Iraq. That E.O. was later amended by (inter alia) E.O. 13315, E.O. 13350 and E.O. 13438, which imposed asset freezes on the “former Iraqi regime, its senior officials and their family members”, as well as those “threatening the peace or stability of Iraq or the Government of Iraq”.
On 18 May 2018, President Donald Trump extended those sanctions for 1 year by continuing the national emergency as declared. White House press release here.
On 16 May 2018, we reported that a Russian Draft Bill criminalising compliance with Western sanctions had been unanimously approved by the State Duma in its first reading (previous blog). The following day (17 May), Russian lawmakers voted to postpone the second reading of the Bill so that consultations could be held on its potential business impact.
Yesterday, OFAC designated “Hizballah financier” Mohammad Ibrahim Bazzi and “Hizballah’s representative to Iran” Abdallah Safi-Al-Din as Specially Designated Global Terrorists (SDGTs), pursuant to Executive Order 13224. The following 5 companies were also designated as SDGTs for being owned or controlled by Mr Bazzi: Global Trading Group NV (Belgian energy services conglomerate); Euro African Group LTD (Gambia-based petroleum and petroleum products company); Africa Middle East Investment Holding SAL (Lebanon-based); Premier Investment Group SAL Offshore (Lebanon-based); and Car Escort Services S.A.L. Off Shore (CES) (Lebanon-based import/export company; also linked to another SDGT). As a result, asset freezing measures have been imposed on all individuals and companies designated in this action. See OFAC Notice and US Treasury press release.
These designations follow President Trump’s decision last week to cease US participation in the JCPOA and to reimpose US sanctions on Iran. They have been made in “furtherance of the goal of addressing the totality of Iran’s malign activities and regionally destabilizing behaviour, including that of Hizballah”, and they “complement” 3 other recent OFAC actions, see here, here and here.
We reported yesterday that the President of the European Commission Jean-Claude Juncker had announced that the EU Commission will “[launch] the process [of activating] the ‘blocking statute’ from 1996”, in order to “protect European companies” from the extraterritorial effects of US sanctions, in light of US President Trump’s decision to withdraw from the JCPOA and to reimpose US sanctions on Iran.
In a press release issued today, the Commission has announced that it has “acted on four fronts” to mitigate the “impact of US sanctions on European businesses” and to “maintain the growth of trade and economic relations between the EU and Iran”:
- It has launched the formal process to activate the Blocking Statute by updating the list of US sanctions on Iran falling within its scope. The Blocking Statute “forbids EU companies from complying with the extraterritorial effects of US sanctions, allows companies to recover damages arising from such sanctions from the person causing them, and nullifies the effect in the EU of any foreign court judgements based on them”. The aim is for the blocking measure to come into force before 6 August 2018 (date on which the first tranche of US sanctions take effect).
- It has launched the process for removing obstacles for the European Investment Bank to decide under the EU budget guarantee to finance activities outside the EU, in Iran.
- As “confidence building measures”, the Commission will “continue and strengthen the ongoing sectoral cooperation with, and assistance to, Iran, including in the energy sector and with regard to small and medium-sized companies”.
- The Commission will encourage member states to explore the possibility of one-off bank transfers to the Central Bank of Iran (“this approach could help the Iranian authorities to receive their oil-related revenues, particularly in case of US sanctions which could target EU entities active in oil transactions with Iran”).
The EU Parliament and Council will have 2 months in which to object to the first two measures above, once proposed, before they enter into force.
In light of President Trump’s decision to cease US participation in the JCPOA and to reimpose US sanctions on Iran, the President of the EU Commission Jean-Claude Juncker has announced that, tomorrow at 10.30am, the EU Commission will “[launch] the process [of activating] the ‘blocking statute’ from 1996”, in order to “protect European companies” from the extraterritorial effects of US sanctions. Furthermore, that a decision had been made to “allow the European Investment Bank to facilitate European companies’ investment in Iran”.
On 3 January 2018, Turkish banker Mehmet Hakan Atilla was found guilty of conspiracy to violate US sanctions against Iran. The scheme consisted of a money-laundering network facilitated by Turkish state bank Halkbank, which allowed Iran to gain access to international markets in contravention of US sanctions. Although nine defendants had been charged in the case, Mr Atilla was the only one that stood trial. Co-defendant Reza Zarrab, a Turkish-Iranian businessman, previously pleaded guilty and gave evidence in the trial against Mr Atilla (previous blog).
Yesterday (16 May 2018), the trial judge – District Judge Richard Berman – sentenced Mr Atilla to 32 months in prison. He held that the Halkbank executive appeared to have been following orders from the bank’s CEO, Suleyman Aslan, who is one of the seven defendants at large. He found that Mr Atilla was less culpable than his co-defendant Reza Zarrab, who has yet to be sentenced. The criminal prosecutions against Mr Atilla and his co-defendants are separate from any penalty that may be imposed on Halkbank, which is expected to face a fine from OFAC.