Category Archives: Export Controls and Sanctions

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New Venezuela Sanctions Announced; Future Sanctions Against Venezuelan Oil Threatened

Yesterday, the President issued a new Executive Order (E.O.) prohibiting certain financial transactions involving the Venezuelan government, including Petroleos de Venezuela, S.A. (PdVSA), the state-owned oil company.  Under the new rules, persons subject to U.S. jurisdiction are prohibited from engaging in transactions related to: (i) the purchase of any debt owed to the Government of … Continue Reading

DDTC and BIS Propose New Rules to Continue Export Control Reform Initiative

As part of the ongoing Export Control Reform initiative, the Directorate of Defense Trade Controls (“DDTC”) and Bureau of Industry and Security (“BIS”) has issued proposed rules that would move certain items currently controlled on the International Traffic in Arms Regulations (“ITAR”) to the Export Administration Regulations (“EAR”).  The proposed rules would move some items … Continue Reading

The EU & Russia Move Forward with “Blocking Statutes” in Response to U.S. Exit from Iran Nuclear Deal

Today, the EC announced that it is moving forward with a package of measures to blunt the impact of renewed U.S. sanctions on Iran following the U.S. exit from the Joint Comprehensive Plan of Action (JCPOA).  Included in those measures is the planned activation of the EU blocking statute, which would bar EU companies from … Continue Reading

The United States will withdraw from the Iran nuclear deal and fully re-impose nuclear sanctions on Iran within 180 days.

On Tuesday President Trump announced that the United States will exit the multilateral Iran nuclear deal and fully re-impose sanctions on Iran. After the announcement, the Office of Foreign Assets Control (OFAC), the agency responsible for administering most U.S. sanctions, issued a statement and guidance on the re-imposition of U.S. sanctions. This announcement reflects a … Continue Reading

China’s ZTE Corporation Has Export Privileges Suspended for Next Seven Years

On April 15, 2018, the Bureau of Industry and Security (BIS) issued an Order relating to Zhongxing Telecommunications Equipment Corporation and ZTE Kangxun Telecommunications Ltd. (collectively, ZTE) that suspends the export privileges of ZTE for a period of seven years, until March 13, 2025.  Pursuant to the Order, ZTE may not, directly or indirectly, participate … Continue Reading

UK Unpacks Encryption Controls

Despite the fact that export controls on dual-use goods derive from international agreements such as the Wassenaar Arrangement, significant differences can be seen as controls are implemented by different countries. The same is true in the European Union notwithstanding the fact that the EU’s dual-use regulation (Council Regulation (EC) No. 428/2009) is binding on its … Continue Reading

Sanctions Penalties Tick Up Again

Penalties for violations of sanctions rules administered by the Office of Foreign Assets Control (OFAC) ticked up again yesterday.  Most violations of OFAC’s rules now face statutory penalties of $295,141 or twice the value of the underlying transaction.  Penalties for violations of OFAC’s narcotics trafficking regulations are now set at $1,466,485, with penalties for violations … Continue Reading

Trump makes it official: Venezuelan digital currency is subject to sanctions

The President signed a new Executive Order today making it unlawful to engage in transactions involving digital currency issued by the Venezuelan government.  The Executive Order makes official prior guidance from the Office of Foreign Assets Control (OFAC), which stated that dealings related to Venezuelan digital currency would likely be prohibited under existing sanctions. Last … Continue Reading

The U.S. sanctions Russian trolls and threatens future measures against Russian officials and oligarchs

Yesterday, the U.S. Office of Foreign Assets Control (OFAC) blacklisted 14 new Russian individuals and the Internet Research Agency as Specially Designated Nationals (SDNs) for their role interfering with the 2016 U.S. presidential election.  While limited in scope, the new designations are the first use of authority under the Countering America’s Adversaries Through Sanctions Act (CAATSA) … Continue Reading

New North Korea Sanctions Regulations Become Effective Today

The Office of Foreign Assets Control (OFAC)’s new North Korea Sanctions Regulations become effective today.  In addition to making certain technical and conforming changes, the newly updated Part 510 incorporates recent changes to the sanctions program under Executive Orders (E.O.) 13687, 13722, and 13810, the North Korea Sanctions and Policy Enhancement Act of 2016, and … Continue Reading

U.S. Issues New North Korea Sanctions and a Warning to the Global Shipping and Finance Industries

Today the U.S. Office of Foreign Assets Control (OFAC) issued new sanctions targeting the shipping industry for dealings involving North Korea.  The sanctions include the designation of 56 companies and vessels involved in conducting illegal trade with North Korea. OFAC also issued new guidance for the global shipping and finance industries, describing common methods used … Continue Reading

Trump Administration Declines to Issue Sanctions Related to Russia’s Military and Intelligence Sectors

Under Section 231 of the Countering America’s Adversaries Through Sanctions Act (CAATSA), the Trump administration was due to issue secondary sanctions on non-U.S. persons that conduct significant transactions with Russia’s defense and intelligence sectors.  The Trump administration declined to issue those new sanctions, claiming that CAATSA was serving as an effective deterrent – discouraging non-U.S. … Continue Reading

New OFAC designations signal continued U.S. sanctions pressure on Russia

Last week, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) blacklisted 21 individuals and nine entities for various reasons, including involvement in the ongoing conflict in eastern Ukraine, connections to the Crimea region (which is subject to a complete U.S. embargo), and links to the Russian government.  Several of the newly … Continue Reading

Going to Get Paid in Venezuelan Cryptocurrency? Not so fast.

In December last year, Venezuelan President Nicolas Maduro announced that Venezuela would launch a cryptocurrency called “Petro” in an effort to ease the country’s serious economic woes and avoid U.S. sanctions.  Maduro said the government would issue 100 million Petros, with each Petro backed by one barrel of Venezuelan oil.  So will U.S. companies finally … Continue Reading

Trump Waives Secondary Sanctions on Iran, But Vows Not to do so Again Without Changes to the JCPOA

Last week the President begrudgingly extended waivers continuing to lift U.S. “secondary sanctions” on Iran.  But the President also insisted that he will not issue further extensions without a renegotiation of certain aspects of the joint nuclear deal with Iran (the Joint Comprehensive Plan of Action or JCPOA), throwing the future of the deal and … Continue Reading

U.S. Implements Global Magnitsky Sanctions Targeting Corruption and Human Rights Abuses Worldwide

On December 20, 2017, the President issued Executive Order 13818 implementing new sanctions against human rights abusers and persons involved in corruption pursuant to the Global Magnitsky Human Rights Accountability Act (Global Magnitsky Act).  The Global Magnitsky Act allows the U.S. government to target persons and entities involved in gross human rights abuses – such … Continue Reading

Distributor danger: OFAC case highlights sanctions liability for bad acts by distributors and foreign subsidiaries

Many companies supply goods and services through third party distributors.  When well-structured, the use of distributors can shift some of the cost and compliance risk of selling products outside of your home territory.  But distributors can also create sanctions liability for companies, especially when foreign subsidiaries or others within the company are in on the … Continue Reading

Export Compliance Obligations for Transactions between U.S. Companies and India to be Reduced

In the near future, trade between the U.S. and India will likely be simplified.  Late last week, the Wassenaar Arrangement admitted India as a member (India’s membership will be formalized shortly), and the Australia Group is expected to admit India in the coming months.  Both organizations are Multilateral Export Control Regimes that inform U.S. export … Continue Reading

U.S. Issues Enhanced Sanctions on Russian Energy Sector

As required under recent sanctions legislation, the U.S. Office of Foreign Assets Control (OFAC) recently issued an updated Directive 4 that will expand sectoral sanctions on the Russian energy industry. The new rules, which apply to projects initiated on or after January 29, 2018, will bar persons subject to U.S. jurisdiction from providing goods, services, or … Continue Reading

New Sanctions Placed on Trade with Cuba

On Thursday November 9th,  the Office of Foreign Assets Control (“OFAC”) published new regulations in the Federal Register executing June’s National Security Presidential Memorandum (“NSPM”) regarding U.S. sanctions against Cuba.  (See our previous post on the NSPM here).  The State Department and Bureau of Industry and Security (“BIS”) also published complementary rules giving effect to the … Continue Reading

Secondary Sanctions Targeting Russia’s Defense and Intelligence Sectors Move Closer to Implementation

Last Friday the State Department belatedly released a list of 39 Russian entities that operate as part of Russia’s defense and intelligence sectors (the full list is below).  Congress required the Trump Administration to produce a list of such parties as part of the Countering America’s Adversaries Through Sanctions Act (CAATSA), which became law in … Continue Reading

OFAC Extends Sanctions Relief for Belarussian Conglomerates

Today the Office Foreign Assets Control (OFAC) extended sanctions relief for nine Belarussian conglomerates, including Belneftekhim. OFAC has authorized transactions with the listed Belarussian Specially Designated Nationals (SDNs) since October 2015 through a series of temporary general licenses. Today’s General License No. 2D extends the sanctions relief through April 30, 2018, subject to the restrictions … Continue Reading
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