On September 20, 2017, President Trump issued Executive Order 13810, imposing additional sanctions against North Korea.  Most notably, the new Executive Order provides for a “secondary sanctions” regime, threatening to impose U.S. sanctions against persons engaging in targeted transactions (whether or not they have any connection to the United States). Continue Reading United States Imposes Secondary Sanctions on Dealings with North Korea

On August 25, 2017, President Trump issued an Executive Order severely restricting transactions in debt and equity of the Government of Venezuela and of state-owned entities; including Petroleos de Venezuela; S.A. (PdVSA). Simultaneously with the Executive Order; OFAC issued a number of general licenses and Frequently Asked Questions relating to the new sanctions. These new actions build on sanctions targeting Venezuelan officials; discussed here; and continue the trend toward targeted “bespoke” sanctions short of full blocking of all transactions with a targeted regime or country.

The new sanctions:

  • Prohibit dealings in existing debt of the Government of Venezuela (and its controlled entities) by U.S. persons or within U.S. jurisdiction; subject to an extensive list of exceptions for specified issuances;
  • Prohibit all dealings by U.S. persons or within U.S. jurisdiction in new debt of the Government of Venezuela with a duration of longer than 30 days and of PdVSA with a duration of longer than 90 days; or new equity of any state-controlled entity;
  • Bar the purchase of securities from the Government of Venezuela within U.S. jurisdiction; other than permitted new debt; and
  • Bar all distributions of profits and earnings within U.S. jurisdiction to the Government of Venezuela by state-owned entities.

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Background

On August 2, 2017, President Donald Trump signed a bill imposing new sanctions on Russia. Days earlier, the proposed legislation sparked a vigorous reaction in the European Union.

On July 26, 2017, European Commission President Jean-Claude Juncker warned of “unintended unilateral effects that impact the EU’s energy security interests”. In the same vein, the French government opined that the extra-territorial reach of the text appears to breach international law. The German and Austrian governments also issued a joint statement disapproving of the proposal’s encroachment into European energy supply matters. Continue Reading EU Reacts to Impact of Russia Sanctions Bill on European Energy Investments

On July 31, OFAC designated Venezuelan President Nicolas Maduro Moros as a “Specially Designated National” (“SDN”) blocking all of his assets and prohibiting any transaction in which he has an interest within U.S. jurisdiction. Last week, on July 26, OFAC designated 13 other current and former Venezuelan officials as SDNs, including Rocco Albisinni Serrano, who is the President of CENCOEX (the Venezuelan foreign exchange authority), and Simon Alejandro Zerpa Delgado, who is the Vice President of Finance for PDVSA and the President of Venezuela’s Economic and Social Development Bank (“BANDES”), and the President of Venezuela’s National Development Fund (“FONDEN”). There have been rumors that the United States was considering restricting oil sales from Venezuela, but at the moment no such sanctions have been imposed. Continue Reading OFAC Sanctions Venezuelan Officials

On July ­­25, 2017, the United States House adopted H.R. 3364, the “Countering America’s Adversaries Through Sanctions Act” (“CAATS”), a compromise measure incorporating both House and Senate sanctions proposals.  The vote was 419-3.  CAATS was approved by the Senate on July 27, 2017 (the vote was 98-2).  It now awaits signature by President Trump (who in any event appears to lack sufficient support to uphold a veto).

Continue Reading Congress Reaches Agreement on New Sanctions against Russia, North Korea, and Iran

On July 18, the State Department published a notice that Secretary Tillerson has certified that Iran remains in compliance with its obligations under the 2015 Joint Comprehensive Plan of Action (“JCPOA”), pursuant to which Iran agreed to restrictions on its nuclear program in return for sanctions relief (see our 2015 and 2016 memoranda).  Recertification of compliance is required every 90 days under the Iran Nuclear Agreement Review Act of 2015.  Despite President Trump’s criticism of the JCPOA, this is his Administration’s second certification of compliance.

As with the prior certification, the State Department’s announcement notes that the Administration is reviewing the suspension of sanctions pursuant to the JCPOA.  The announcement also notes that the State Department and OFAC today designated an additional 18 Iranian entities and individuals for activities related to proliferation, ballistic missile development, support of the Iranian military and IRGC, and transnational criminal organizations; all of these sanctions authorities were unaffected by the JCPOA.

The next certification is due in mid-October.

On July 12, the State Department announced that President Trump is issuing an Executive Order extending the previously announced deadline under Executive Order 13761 to complete a review of the Government of Sudan’s conduct and determine whether to permanently terminate U.S. sanctions against Sudan (see our previous update here).  In the meantime, the OFAC general license suspending sanctions against the government and territory of Sudan (31 C.F.R. § 538.540) remains in effect.  The general license authorizes all transactions with the Government of Sudan and its controlled entities, the territory of Sudan, and any Specially Designated National (SDN) in Sudan currently designated with the tag [SUDAN].  It also unblocks all property previously blocked under the Sudanese sanctions.  The license does not, however, affect other sanctions programs, and other SDNs located in Sudan but designated under different programs (including those relating to Darfur, South Sudan, and terrorism) will remain sanctioned.  Comprehensive restrictions on U.S. exports to Sudan also remain in place (see the Bureau of Industry and Security’s Sudan page).

Sudanese sanctions will now be re-evaluated by October 12, 2017.  The new Executive Order leaves in place the previous structure pursuant to which Sudanese sanctions will be permanently terminated if the Secretary of State makes a determination that the Government of Sudan has sustained the positive actions leading to the suspension of sanctions.

On June 16, 2017, the President released a National Security Presidential Memorandum, which outlines the Trump Administration’s national security and economic policy towards Cuba. The Presidential Directive lays out the framework for rolling back certain Obama-era regulations that eased travel and trade restrictions between the United States and Cuba. The White House has released a fact sheet related to today’s Presidential Directive, and the Office of Foreign Assets Control (“OFAC”) has released a list of frequently asked questions.

Continue Reading President Trump Announces Limited Roll-Back of Obama-Era Cuba Sanctions Relief

On June 15, 2017, the United States Senate adopted S.722, incorporating the “Countering Russian Influence in Europe and Eurasia Act of 2017” and the “Countering Iran’s Destabilizing Activities Act of 2017,” by a vote of 98-2. The new law, assuming it is passed by the House and adopted,  would:

  • codify all existing Russia sanctions and designations (meaning the Trump Administration cannot unilaterally lift them) and require congressional review for any subsequent changes in licensing policy;
  • tighten existing sectoral sanctions against Russian state-owned energy, financial, and defense companies and threaten their expansion to the state-owned shipping, rail, and mining/metal sectors;
  • reinvigorate existing but currently unenforced secondary sanctions targeting Russia and add new secondary sanctions provisions targeting Russian pipeline transactions in particular (but leave those sanctions in the hands of the Trump Administration); and
  • expand authority to sanction Russian cyber-related activities.

With respect to Iran, the Sanctions Bill would impose a largely symbolic expansion of secondary sanctions against Iranian military activity and sharpen focus on the Iranian Revolutionary Guard Corps and its affiliates.

The bill now proceeds to the House for consideration, the timing of which is uncertain, and it is possible that further amendments will be made. However, given the margin of passage of the Sanctions Bill and the bipartisan negotiations resulting in its adoption, it appears that there is a good chance that the final legislation passed by the House will be broadly similar and will be adopted by a margin sufficient to override any veto by President Trump.

The linked memorandum provides an overview of the key provisions of the new legislation.  Please click here to read the full alert memorandum.