UN removes another Iraqi entity from sanctions list

UN2The UN Security Council has removed the ‘Directorate General of Geological Survey and Mineral Investigation’ from its Iraq sanctions list. As a result, it will no longer be subject to UN asset freezing measures. See UN press release and UK OFSI Notice.

This is the ninth entity to be delisted from the UN’s Iraq sanctions since June 2018 (see our previous blogs).

Updated EU Blocking Statute: authorisation criteria & guidance

EU2.jpgThe updated EU Blocking Statute came into force today (7 August 2018), see Commission Delegated Regulation (EU) 2018/1100 amending Council Regulation (EC) No 2271/96.

The Blocking Statute allows EU operators to recover damages arising from the extra-territorial sanctions within its scope from the persons causing them and nullifies the effect in the EU of any foreign court rulings based on them. It also forbids EU persons from complying with those sanctions, unless exceptionally authorised to do so by the European Commission in case non-compliance seriously damages their interests or the interests of the Union. The criteria for applying for an authorisation are contained in Commission Implementing Regulation (EU) 2018/1101. A template is available for authorisation applications. The Commission has stated that the “possibility to apply for an authorisation is foreseen as an exception in [the EU Blocking Statute], which does not create an individual right for the applicant to obtain an authorisation”. The Commission has published a Guidance Note.

Updated EU Blocking Statute in force tomorrow

EU6The European Commission announced today that the updated EU Blocking Statute (see previous blog) will enter into force on 7 August 2018 (tomorrow), in response to the re-imposition of US sanctions on Iran. They have also issued a document explaining its effect (EU Commission Q&As) which states that:

  1. The Blocking Statute aims at countering the effects of US sanctions on EU economic operators engaging in lawful activity with third countries.
  2. It applies with regard to specific legislation listed in its Annex. It forbids EU residents and companies from complying with the listed legislation unless they are exceptionally authorised to do so by the Commission, allows EU operators to recover damages arising from that legislation from the persons or entities causing them, and nullifies the effect in the EU of any foreign court rulings based on it.
  3. EU operators should inform the European Commission – within 30 days since they obtain the information – of any events arising from listed extra-territorial legislation that would affect their economic or financial interests.
  4. EU operators can recover “any damages, including legal costs, caused by the application of the laws specified in its Annex or by actions based thereon or resulting therefrom” from “the natural or legal person or any other entity causing the damages or from any person acting on its behalf or intermediary”. The action can be brought before the courts of the Member States and the recovery can take the form of seizure and sale of the assets of the person causing the damage, its representatives or intermediaries.
  5. Implementation of the Blocking Statute, including deciding on effective, proportionate and dissuasive penalties for possible breaches is the competence of Member States. It is also for Member States to enforce those penalties.
  6. The European Commission gathers information from EU operators on possible cases of application of the listed extra-territorial legislation, liaises with national authorities from EU Member states concerning such cases in their jurisdiction and receives notification from and shares information with Member States on measures taken under the Blocking Statute and other relevant aspects.
  7. The Commission can also, in exceptional cases, authorise an EU operator to fully or partially comply with the listed extra-territorial legislation if non-compliance would seriously jeopardise the interests of the operator or of the European Union. The Implementing Regulation containing the criteria on the basis of which the Commission will assess such requests for authorisation will also be published tomorrow.

New US Executive Order reimposing Iran sanctions


In light of the US decision to cease participation in the JCPOA and to reimpose all nuclear-related sanctions lifted or waived in connection with the deal, President Donald Trump has issued today a new Executive Order reimposing certain sanctions on Iran.

On 7 August 2018, sanctions will be reimposed on:

  • The purchase or acquisition of US bank notes by the Government of Iran.
  • Iran’s trade in gold and other precious metals.
  • Graphite, aluminium, steel, coal, and software used in industrial processes.
  • Transactions related to the Iranian rial.
  • Activities relating to Iran’s issuance of sovereign debt.
  • Iran’s automotive sector.

On 5 November 2018, the remaining sanctions will be reimposed, including sanctions on:

  • Iran’s port operators and energy, shipping, and shipbuilding sectors.
  • Iran’s petroleum-related transactions.
  • Transactions by foreign financial institutions with the Central Bank of Iran.

The US Administration will also relist hundreds of individuals, entities, vessels, and aircraft that were previously included on sanctions lists. See Statement from the President, Text of a Letter from the President, and White House Fact Sheet. The Fact Sheet states that the “Trump Administration intends to fully enforce the sanctions reimposed against Iran, and those who fail to wind down activities with Iran risk severe consequences”.

In addition, OFAC has published new FAQs relating to today’s Executive Order and updated existing FAQs. See OFAC Notice.

Turkey responds to US measures

Turkey-US2.jpgWe reported last week that the US had added Turkey’s Minister of Justice Abdulhamit Gul and Minister of Interior Suleyman Soylu to its Global Magnitsky sanctions list (Executive Order 13818) over the “leading roles” they played in the arrest and detention of US Pastor Andrew Brunson.

In response, Turkey’s President Recep Tayyip Erdogan announced on 4 August that he would instruct his officials to freeze any Turkish assets of US Attorney General Jeff Sessions and Interior Secretary Ryan Zinke. Secretary Zinke is responsible for managing the US’s natural resources and cultural heritage.

New Russian sanctions Bill introduced to US Senate

US Congress Building 1Last week (2 August), the Defending American Security from Kremlin Aggression Act of 2018 was introduced to the US Senate. The Bill aims to increase economic, political, and diplomatic pressure on the Russian Federation in response to “Russia’s continued interference in [US] elections, malign influence in Syria, aggression in Crimea, and other activities”. Its key elements include:

  • New sanctions on political figures, oligarchs, family members and other persons that facilitate illicit and corrupt activities on behalf of Vladimir Putin.
  • A sanction on transactions related to investment in energy projects supported by Russian state-owned or parastatal entities.
  • A prohibition on and sanctions with respect to transactions relating to new sovereign debt of the Russian Federation.
  • Sectoral sanctions on any person in the Russian Federation that has the capacity or ability to support or facilitate malicious cyber activities.
  • A requirement for the US Secretary of State to submit a determination of whether the Russian Federation meets the criteria for designation as a State Sponsor of Terrorism.
  • A prohibition on licenses for US persons to engage in activities relating to certain projects to produce oil in Russia.
  • Reinforcement for the State Department Office of Sanctions Coordination.
  • A report on the net worth and assets of Vladimir Putin.
  • Making interfering in US elections a ground of inadmissibility under immigration law.
  • Provisions expediting the transfer of excess defence articles to NATO countries to reduce some NATO countries’ dependence on Russian military equipment.
  • Provisions aimed at pressuring the Russian government to halt its obstruction of international efforts to investigate chemical weapons attacks, as well as punish the Russian government for chemical weapons production and use.

It is not certain if the legislation will pass the Senate and the House of Representatives in its current form. However, the Senate has passed similar measures against Russia with overwhelming support.

OFAC sanctions Russian bank and other facilitators of North Korean sanctions violations

OFAC2Today, OFAC has sanctioned Russian-registered bank Agrosoyuz Commercial Bank, pursuant to Executive Order 13810, for “knowingly facilitating a significant transaction on behalf of an individual designated for weapons of mass destruction-related activities in connection with North Korea”.

OFAC has also sanctioned a Moscow-based individual, Ri Jong Won, and two entities, Dandong Zhongsheng Industry & Trade Co Ltd and Korea Ungum Corporation, for “facilitating North Korean illicit financial activity”. See OFAC Notice and Treasury press release.

OFAC adds 2 Turkish Ministers to Magnitsky sanctions list over detention of US pastor Brunson

Turkey-USA BreakupYesterday, OFAC added Turkey’s Minister of Justice Abdulhamit Gul and Minister of Interior Suleyman Soylu to its Global Magnitsky sanctions list (Executive Order 13818), on the basis that they played “leading roles in the organizations responsible for the arrest and detention of Pastor Andrew Brunson”. As a result, both individuals are now subject to US asset freezes and travel bans. See OFAC Notice and Treasury press release.

Last week, President Donald Trump tweeted that the US would impose “large sanctions on Turkey for their long time detainment of Pastor Andrew Brunson” (previous blog).