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Last week's major developments in sanctions - January 16th to January 20th, 2023

Monday, January 16

  • Over the weekend and following the execution of a British-Iranian dual national by the Islamic Republic of Iran, the UK imposed blocking sanctions on Iran's Attorney General for his role in executing political dissidents in Iran. (Here, press release)

  • The Security Council Committee pursuant to resolutions 1267 (concerning ISIL and Al-Qaida) added an individual to its list of targets. (Here) France was the first country to add the name to its list of sanctions targets (kudos to DGT!) (here) followed by the UK which added it to the UK's list of financial sanctions targets later on the 17th. (Here) The targeted individual was sanctioned by OFAC under the United States Global Counter-Terrorism program in 2006.

Tuesday, January 17

  • OFAC issued three general licenses amending three existing ones. Concurrently, OFAC amended several FAQs in line with the new licenses. The new general licenses are:

    1. Russia-related General License 6C: Transactions Related to Agricultural Commodities, Medicine, Medical Devices, Replacement Parts and Components, or Software Updates, the Coronavirus Disease 2019 (COVID-19) Pandemic, or Clinical Trials. Section (c)(3) of the new license permits transactions prohibited solely by the determination of May 8, 2022, made pursuant to section 1(a)(ii) of E.O. 14071, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services.”

    2. Russia-related General License 54A: Authorizing Certain Transactions Involving VEON Ltd. or VEON Holdings B.V. Prohibited by Executive Order 14071. The new license explicitly mentions VEON Holdings B.V. which was not mentioned in the previous version; and

    3. Russia-related General License 28B: Authorizing the Wind Down and Rejection of Certain Transactions Involving Public Joint Stock Company Transkapitalbank (TKB) and Afghanistan. The new license allows only wind-down transactions (more limited than the previous license which allowed all transactions) provided that any payment to any TKB entity is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR). It further allows U.S. persons to reject rather than block transactions related to TKB through March 18, 2023.

  • OFAC issued General License 5J and replaced General License 5I under its Venezuela program. The new license is identical except that it is extended through April 20, 2023. (Here)

  • A California resident pleaded guilty to violating export control laws in connection with a scheme to secretly funnel sensitive aeronautics software to a Beijing university. (Here)

Wednesday, January 18

  • At 11 a.m. ET, DOJ tweeted "Watch live today at 12 p.m. ET: Justice Department to Announce an International Cryptocurrency Enforcement Action." Many expected an announcement concerning a well-known exchange; however, it was about a less-known exchange called Bitzlato. DoJ and FinCEN took joint action against the exchange. The founder of the exchange was arrested and FinCEN for the first time used the authority pursuant to section 9714(a) of the Combating Russian Money Laundering Act to designate a financial institution as a primary money laundering concern. This designation prohibits certain transmittals of funds involving Bitzlato by any financial institution under FinCEN jurisdiction. (FinCEN press release, DOJ press release, TRM Lab's blog post about this action, Chainanalysis' blog post about this action)

Thursday, January 19

  • OFAC delisted three individuals who used to be sanctioned under the U.S. counter-terrorism program. (Here)

Friday, January 20

  • The EU Commission updated its FAQs concerning Russia sanctions. (Here)

  • DoJ had two interesting announcements:

    1. Sentencing of a North Korean national to 45 months imprisonment for multiple money laundering offenses. He laundered funds through the U.S. financial system as part of a scheme to raise capital and acquire goods for North Korea in violation of U.S. sanctions. He is the first ever North Korean national to be extradited to the United States (from Malaysia) and is subject to deportation following the successful completion of his sentence (here); and

    2. Unsealed indictments against two individuals (a Russian national and a UK national) charging them with facilitating a sanctions evasion and money laundering scheme in relation to the ownership and operation of a $90 million luxury yacht owned by sanctioned Russian oligarch Viktor Vekselberg. (Here)

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