Last week OFAC extended its general license authorizing U.S. persons to wind down and divest from certain transactions with subsidiaries of the Xinjiang Production and Construction Corps (XPCC) until November 30, 2020.  OFAC extended the general license to give U.S. persons more time to exit dealings involving XPCC’s many subsidiaries, which play a significant role

Today the Bureau of Industry and Security (BIS) added 24 Chinese state-owned companies to the Entity List for their role in the construction of artificial islands in the South China Sea.  The Entity List prohibits the export, re-export, and transfer (in-country) of items subject to the Export Administration Regulations (EAR) to these companies without a

On October 22, 2019, the Office of Foreign Assets Control (OFAC) issued General License No. 2G authorizing U.S. persons to engage in transactions involving nine companies: Belarusian Oil Trade House, Belneftekhim, Belneftekhim USA, Inc., Belshina OAO, Grodno Azot OAO, Grodno Khimvolokno OAO, Lakokraska OAO, Naftan OAO, and Polotsk Steklovolokno OAO. Executive Order 13405 had previously

Yesterday, the U.S. government issued an Executive Order (E.O.) imposing new primary and secondary sanctions that target the government of Turkey in response to the escalating conflict in northern Syria.  Pursuant to the new sanctions, the Office of Foreign Assets Control (OFAC) also added the Turkish Ministry of Energy and Natural Resources, the Turkish Ministry of National Defense, and the Turkish ministers of Defense, Energy and Natural Resources, and Interior to the SDN List, formally blocking (freezing) those parties’ property and interests in property, subject to U.S. jurisdiction.  Entities owned 50 percent or more, directly or indirectly, by these SDNs are also subject to blocking sanctions pursuant to OFAC’s “50 percent rule.”

While the sanctions are currently narrowly targeted, the E.O. authorizes a broad array of future possible sanctions against other parties connected to the Turkish government and companies operating in Turkey.  Whether and to what extent sanctions are expanded on Turkey will depend on developments on the ground in Syria and U.S. domestic politics.  Various groups, including prominent voices in Congress, are pushing the administration for more aggressive action against Turkey, which could portend an expansion of sanctions against the Ankara government.

Blocking sanctions

The October 14, 2019 E.O. authorizes the U.S. government to block any person (e.g., designate that person as a Specially Designated National (SDN)) that the Secretary of the Treasury determines to:
Continue Reading U.S. Issues New Primary and Secondary Sanctions Targeting Turkey

Yesterday the U.S. government announced that it would implement new sanctions against Russia mandated under the Chemical and Biological Weapons Act of 1991 (the CBW Act) following the apparent deployment of a chemical weapon on British soil by Russia.

The first round of sanctions, which are expected to come into force on or around August 22, will prohibit many exports and reexports of goods, software, or technology to Russia controlled for national security reasons under the dual use Export Administration Regulations.  Such items include gas turbine engines, encryption items, electronics components, optical equipment, lasers, sensors, electronic components, materials, and certain unmanned systems, among many others. National security controlled items currently require a license to be exported to Russia, but the new rules will require the Commerce Department to apply a ‘presumption of denial’ to future license requests in many instances.  In a briefing announcing the new sanctions, the State Department indicated that certain exceptions will be made, including those related to joint space activities, aviation safety, and the activities of U.S. and other foreign companies in Russia.  While the scope of the sanctions has yet to finalized, the State Department suggested that up to half of all licensed exports to Russia are controlled for national security reasons.  If the sanctions are fully enforced, the impact could be substantial – based on 2016 figures over $1 billion in trade could be impacted.
Continue Reading Exports of National Security Controlled Items to Russia Could Be Banned Under New Sanctions

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 changes in the Cuba sanctions.  The rules became effective with their publication in the Federal Register.

The primary purpose of the rule changes is to prevent commerce between the U.S. and Cuba from benefiting the Cuban military.  The State Department’s regulation includes a new Cuba Restricted List, which lists parties deemed to be under control of or acting on behalf of the Cuban military, intelligence, or security services personnel. 
Continue Reading New Sanctions Placed on Trade with Cuba

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 August 2017.  Under Section 231 of CAATSA, persons that engage in “significant” transactions with the designated firms could be subject to a menu of secondary sanctions starting on January 29, 2018.   
Continue Reading Secondary Sanctions Targeting Russia’s Defense and Intelligence Sectors Move Closer to Implementation

Today the U.S. Office of Foreign Assets Control (OFAC) took the unusual step of blacklisting the leader of a foreign country as a Specially Designated National (SDN).  OFAC added Nicolas Maduro, the President of Venezuela, to the SDN List after a flawed vote that essentially replaced the country’s democratically elected legislature with a new body