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Last week's major developments in sanctions - May 15th to May 19th, 2023

Monday, May 15

  • The U.S. Department of State imposed visa restrictions (a type of sanction), under Section 212(a)(3)C) of the Immigration and Nationality Act, on specific individuals in Nigeria for undermining the democratic process during Nigeria’s 2023 elections cycle. The press release did not mention the names of the targeted individuals. (Here) Someone asked me whether they need to screen the names of those against whom the United States or other countries have imposed visa restrictions. My response: from financial sanctions compliance point of view, you don't. Yet, you may want to consider that as part of your client identification program.

  • The EU Council extended the validity of its Cyber Sanctions regime until May 18, 2025. Even though the sanctions regime's validity has been extended till May 18, 2025, the current designations are valid till May 18, 2024 (which will likely be renewed before that date.) (Here)

Tuesday, May 16

  • OFAC imposed asset-freezing sanctions on a Russian individual, Mikhail Matveev, under the OFAC Cyber sanctions program for his role in launching cyberattacks against U.S. law enforcement, businesses, and critical infrastructure. OFAC's actions were accompanied by the Department of State's announcement of a reward for information leading to his arrest or conviction. Concurrently, the Department of Justice unsealed two indictments charging a Matveev with using three different ransomware variants to attack numerous victims throughout the United States. (Here, the Department of the Treasury's press release, the Department of State's announcement, and the Department of Justice's press release)

  • The United States Department of the Treasury imposed asset-freezing sanctions on four individuals and two entities for their roles in the fentanyl supply network under its counter-narcotics sanctions program. (Here, the Department of the Treasury's press release, the Department of State's press release)

  • Only three months after its creation, the Disruptive Technology Strike Force brought criminal charges in five cases. Two of these cases involved the disruption of alleged procurement networks created to help the Russian military and intelligence services obtain sensitive technology in violation of U.S. laws. Two of the other cases charged former software engineers with stealing software and hardware source code from U.S. tech companies in order to market it to Chinese competitors. The fifth case involved a Chinese procurement network established to provide Iran with materials used in weapons of mass destruction and ballistic missiles. (The Department of Justice's press release, Assistant Attorney General's remarks)

  • The Department of Commerce's Bureau of Industry and Security also took action against one of the companies mentioned in one of the actions brought by the Disruptive Technology Strike Force, MIC P&I, LLC as well as a Russian airline, a freight forwarder, and two individuals by issuing Temporary Denial Order which suspended those individuals' and entities' export privileges. (Press release, the Order)

Wednesday, May 17

  • OFAC published the amended version of the South Sudan Sanctions Regulations to implement a South Sudan-related Executive Order and replaced the South Sudan Regulations that were published in abbreviated form on July 1, 2014, with a more comprehensive set of regulations that includes additional interpretive and definitional guidance, general licenses, and other regulatory provisions that will provide further guidance to the public. (Here)

  • OFAC announced an interesting settlement with Murad LLC and a former senior executive of Murad LLC for apparent violations of U.S. sanctions against Iran. The fact pattern is very interesting, and I definitely recommend going through it. Two takeaways: the importance of pre-acquisition due diligence with a focus on sanctions regulations; and the fact that Murad LLC is in the business of skincare which demonstrates the limits of general licenses. (Here)

Thursday, May 18

  • There was no major development on this day. The calm before the storm!

Friday, May 19

  • G7 leaders met in Hiroshima and issued a statement on Ukraine. The statement has a dedicated section to "sanctions and other measures" which points out G7's plan to impose more sanctions on Russia and those who help Russia. (Here)

  • The United States announced major actions across different agencies, ramping up sanctions against Russia. (The Department of State's Fact Sheet)In particular:

    1. OFAC and the Department of State added dozens of entities and individuals worldwide to the SDN list. (Here, the Department of the Treasury's press release)

    2. OFAC

      1. Issued a determination pursuant to section 1(a)(i) of Executive Order 14024which added the architecture, engineering, construction, manufacturing, and transportation sectors of the Russian Federation economy to the list of sectors that involvement in them could subject persons to blocking sanctions. (Here)

      2. Banned additional services by U.S. persons to Russia: the provision of architecture services or engineering services. (Here)

      3. Amended Directive 4 issued under Executive Order 14024 which now requires U.S. persons to report to OFAC any property in their possession or control in which the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation by June 18, 2023, and annually thereafter by June 30. (Here)

    3. BIS

      1. Added 71 entities to its Entity List. (Here)

      2. Issued a Rule that revised EAR to strengthen some of the existing restrictions and to bring the U.S. controls in line with those of the EU and the UK and clarified some of the existing restrictions against Russia and Belarus. (Here)

    4. BIS and FinCEN issued a supplemental joint alert for financial institutions about the risks of export control violations. (Here)

  • The UK's government also announced major actions. In particular:

    1. OFSI added several entities and individuals to its asset-freeze sanctions lists. (Here)

    2. The UK's Prime Minister announced that the UK would impose a ban on Russian diamonds, copper, aluminum, and nickel. These are yet to be implemented. (Here)

  • Even though not a G7 country, Australia also announced several asset-freezing sanctions against individuals and entities in Russia. (Here)

  • Canada also asset-freezing sanctions against 17 individuals linked to Russian companies that provide military technology and know-how to Russia’s armed forces, family members of listed persons, and members of the Kremlin elite.

The Recommendation of the Week

  • Check out my interview with BBC's World Business Report. The episode is about the Russian diamond and my comments start around minute 2. (Here)


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