US sanctions 22 Russians over ‘malign activities’ & 12 added to Section 231 CAATSA list


Yesterday (19 December), OFAC sanctioned 18 Russian nationals and 4 Russia-based entities in response to “Russia’s continued disregard for international norms”:

(i) Victor Alekseyevich Boyarkin, a former officer of Russia’s Main Intelligence Directorate (GRU), was designated pursuant to Executive Orders (EO) 13661 and 13662 (asset freeze and travel ban) for acting on behalf of sanctioned oligarch Oleg Deripaska.

(ii) Alexander Aleksandrovich Malkevich and Elena Alekseevna Khusyaynova, as well as the entities Nevskiy News LLC, Economy Today LLC, Federal News Agency LLC and USA Really were designated pursuant to EO 13694 (asset freeze and travel ban) for being linked to Project Lakhta– a broad Russian effort that includes the previously designated Internet Research Agency (IRA), which has sought to “interfere in political and electoral systems worldwide”.

(iii) 15 members of the GRU were designated under Section 224 of CAATSA (asset freeze and travel ban) for their “involvement in a wide range of malign activity”, including attempting to interfere in the 2016 US election, efforts to undermine international organisations (e.g. WADA and OPCW) through cyber-enabled means, and carrying out the Novichok assassination attempt against the Skripals in Salisbury, UK. See OFAC Notice and US Treasury Press Release.

The US Department of State has also added 12 individuals and entities from the present OFAC action to the List of Specified Persons under Section 231 of CAATSA for being part of, or operating for or on behalf of, the intelligence sector of the Russian government. As a result, any person who knowingly engages in a significant transaction with any of these 12 individuals and entities will be subject to CAATSA Section 231 sanctions. See State Department Press Release.

US to lift sanctions on En+, RUSAL & EuroSibEnergo in 30 days


Yesterday (19 December), the US Treasury notified Congress of its intention to terminate, in 30 days, the sanctions imposed on En+ Group, RUSAL, and JSC EuroSibEnergo. In return, those three entities have agreed to:

(i) undertake “significant restructuring and corporate governance changes”, including reducing Oleg Deripaska’s direct and indirect shareholding to below 50%;

(ii) overhaul the composition of their boards of directors;

(iii) take restrictive steps related to their corporate governance; and

(iv) agree to “unprecedented transparency” by undertaking extensive, ongoing auditing, certification, and reporting requirements.

As part of this agreement, half of En+’s restructured board of directors will be comprised of US or UK nationals, and RUSAL’s current board chairman will step down. Oleg Deripaska will remain sanctioned, and foreign persons will continue to be subject to secondary sanctions should they knowingly facilitate a significant transaction for or on behalf of Mr Deripaska or entities in which he owns a 50% or greater interest. See EU Statement.

US continues Global Magnitsky sanctions for 1 year

White House2In December 2017, US President Donald Trump issued Executive Order (EO) 13818, which imposes asset freezes and travel bans on persons responsible for serious human rights abuses or corrupt acts anywhere in the world. The EO implements the provisions of the Global Magnitsky Human Rights Accountability Act.

Yesterday (18 December), President Trump continued for 1 year the sanctions contained within EO 13818. See White House Press Release.

OFAC add 9 to South Sudan sanctions list

US Treasury BuildingOFAC has added 3 individuals and 6 entities to its South Sudan sanctions list, pursuant to Executive Order 13664 (asset freeze and travel ban).

Israel Ziv and Obac William Olawo were designated for being “leaders of entities whose actions have the purpose or effect of expanding or extending the conflict in South Sudan”. Those designated entities are: Global N.T.M Ltd (Israel-based); Global Law Enforcement and Security Ltd (Israel-based); Global IZ Group Ltd (Israel-based); Golden Wings Aviation (South Sudan-based); Crown Auto Trade (South Sudan-based); and Africana General Trading Ltd (South Sudan-based). The third sanctioned individual, Gregory Vasili Dimitry, was designated for “actions that have undermined peace, stability, and security in South Sudan”. See OFAC Notice and US Treasury Press Release.

OFAC fines Jereh Group for violating US sanctions on Iran

OFAC2OFAC has announced a $2,774,972 settlement with Chinese company Yantai Jereh Oilfield Service Group Ltd and its affiliated companies (the “Jereh Group”) for violating US sanctions on Iran. Yantai is a provider of oil field services and manufacturer of related equipment.

Between around 2 October 2014 and 4 March 2016, on at least 11 occasions Jereh Group is said to have (re)exported or attempted to (re)export US-origin goods ultimately intended for Iran, by way of China. Similarly, it is also said to have exported certain US-origin items for use in the production of goods in China, with reason to know that the goods were ultimately destined for Iran.

In its press release, OFAC reports that, beginning in late 2013, a former Jereh Group Sales Executive and a former Business management arranged meetings with Iranian customers and developed a scheme utilising intermediary companies in China and the UAE to sell and ship goods, many of which relied upon US-origin items, to Iran. In addition, it says that an external review of Jereh Group’s compliance programme in 2015-16 noted that its controls were “largely non-existent and, when in place, were ineffective and easily circumvented”, adding that “the circumvention could and did go undetected”. According to OFAC, the violations did not cease until the US Bureau of Industry and Security sanctioned several Jereh Group companies and related individuals in March 2016.

OFAC found that Jereh Group had not voluntarily disclosed the violations, and that they constituted an egregious case. The base penalty amount was $3,083,302.

OFAC adds 3 to N Korea sanctions for alleged human rights abuses

US Treasury Building2OFAC has sanctioned 3 individuals, pursuant to Executive Order 13687 (asset freeze and travel ban), in response to the “North Korean regime’s ongoing and serious human rights abuses and censorship”. The individuals are: Choe Ryong Hae (Director of the Workers’ Party of Korea Organisation and Guidance Department), Jong Kyong Thaek (Minister of State Security), and Pak Kwang Ho (Director of the Propaganda and Agitation Department). See OFAC Notice and US Treasury Press Release.

US-designated man pleads guilty to evading sanctions via money laundering

US DoJLebanese businessman Kassim Tajideen, who was designated in 2009 as a Specially Designated Global Terrorist (SDGT) under Executive Order 13224 (asset freeze) for being an “important financial contributor to Hizballah”, has pleaded guilty in the DC District Court to conspiracy to launder money to evade the US sanctions imposed on him. The US Department of Justice Press Release states that Mr Tajideen, after his sanctions designation, had “conspired with at least five other persons to conduct over $50 million in transactions with U.S. businesses that violated [sanctions against him]. In addition, [Mr] Tajideen and his co-conspirators knowingly engaged in transactions outside of the [US], which involved transmissions of as much as $1 billion through the [US] financial system from places outside the [US].” Sentencing is scheduled for 18 January 2019.

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.