On April 19, 2021, in response to reported human rights violations by the regime of President Alexander Lukashenko, the U.S. Department of the Treasury, Office of Foreign Assets Control (“OFAC”) issued General License 2H (“GL 2H”)[1] under the U.S. sanctions program targeting Belarus. GL 2H revokes and replaces General License 2G (“GL 2G”),[2] which authorized U.S. persons to engage in transactions with nine sanctioned Belarusian state-owned entities.
Continue Reading OFAC Revokes Key General License Under Belarus Sanctions Program
OFAC Settles with Digital Currency Payment Processor for Sanctions Violations
On February 18, 2021, the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) announced a $507,375 settlement with BitPay, Inc. (BitPay), a payment processor for merchants accepting digital currency as payment for goods and services, for 2,102 apparent violations of multiple sanctions programs between 2013 and 2018.[1] The settlement highlights that financial service providers facilitating digital currency transactions must not only establish sanctions compliance programs to screen their own customers but also must monitor third-party non-customer transaction information.
Continue Reading OFAC Settles with Digital Currency Payment Processor for Sanctions Violations
United States Imposes Sanctions in Response to Military Coup in Myanmar
On February 10, 2021, in response to the February 1, 2021, military coup in Myanmar (Burma),[1] President Biden issued an executive order (the Burma EO)[2] authorizing the imposition of blocking sanctions against a range of individuals and entities. Concurrently, the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) designated 10 individuals (two of the individuals were already designated under a different sanctions authority) and three entities on the list of Specially Designated Nationals and Blocked Persons. All property and interests in property of persons sanctioned under the Burma EO are blocked and all transactions within U.S. jurisdiction in which a sanctioned person has an interest are prohibited. Sanctions also extend to any entity directly or indirectly 50% or more owned by one or more sanctioned persons or entities.
Continue Reading United States Imposes Sanctions in Response to Military Coup in Myanmar
Developments in U.S. Sanctions and Foreign Investment Regulatory Regimes
The new year comes in the midst of an evolving landscape for economic sanctions, including the transition away from a U.S. administration that has relied on tightening economic sanctions as a key component of a number of foreign policy initiatives. In 2021, boards of directors should be aware of the ongoing implementation of new China-related sanctions, sanctions risks relating to ransomware attacks and the potential sanctions implications of foreign-policy shifts by the Biden administration.
Continue Reading Developments in U.S. Sanctions and Foreign Investment Regulatory Regimes
Lexology Getting The Deal Through: Foreign Investment Review 2021
Cleary Gottlieb partner Paul Marquardt, counsel Chase Kanieki, and associates Nate Kurcab, Nora McCloskey, and Elise Lane co-authored the United States chapter in Lexology Getting The Deal Through Foreign Investment Review 2021.
Continue Reading Lexology Getting The Deal Through: Foreign Investment Review 2021
President Trump Authorizes Restrictions on Additional Chinese Applications and Calls for Potential New Export Restrictions on Personal Data; Details to Come
In one of a series of lame-duck sanctions and export control actions rushed into place before the transition to the Biden Administration, on January 5, 2021, President Trump issued an Executive Order Addressing the Threat Posed by Applications and Other Software Developed or Controlled by Chinese Companies (the Executive Order)[1] authorizing the Commerce Department to regulate or prohibit any transaction involving a U.S. person or within the jurisdiction of the United States with persons that develop or control the following Chinese connected software applications, or with their subsidiaries:
Continue Reading President Trump Authorizes Restrictions on Additional Chinese Applications and Calls for Potential New Export Restrictions on Personal Data; Details to Come
Current Status of Restrictions on Securities of Chinese Military Companies
As noted in our previous blog post, Executive Order (EO) 13959 introduced novel sanctions prohibiting U.S. persons from purchasing publicly traded securities (debt or equity) issued by companies designated by the U.S. Government as “Communist Chinese military companies” (CMCs), as well as an ill-defined group of securities “designed to provide economic exposure” to the
Trump Administration Bans Transactions in Securities of Military-Linked Chinese Companies: Potentially Far-Ranging Consequences Remain Unclear
Yesterday, President Trump issued an Executive Order[1] that will, following an initial two-month grace period and a further ten-month wind-down period in which only dispositions are permitted, prohibit U.S. persons (including citizens and U.S. legal entities acting outside the United States and foreign citizens and legal entities acting inside the United States)[2] from engaging in any transactions in publicly traded securities (debt or equity) issued by companies that the U.S. government designates as tied to the Chinese military (Designated Entities), as well as in any securities linked (in an undefined manner) to the targeted Chinese securities. The 31 current Designated Entities are listed at the end of this note.[3]
Continue Reading Trump Administration Bans Transactions in Securities of Military-Linked Chinese Companies: Potentially Far-Ranging Consequences Remain Unclear
State Department Releases Hong Kong Autonomy Act Persons Report, Starts the Clock for Foreign Financial Institutions Report
Yesterday afternoon, the U.S. Department of State issued the first of two mandatory reports under the Hong Kong Autonomy Act (HKAA), identifying 10 Hong Kong and mainland China officials as materially contributing to the erosion of Hong Kong’s autonomy (the “Section 5(a) Report”).[1] Because the same individuals were already designated on the List of Specially Designated and Blocked Persons (“SDN List”) maintained by the U.S. Department of the Treasury, Office of Foreign Assets Control (“OFAC”) on August 7, 2020,[2] the practical effect of the report is limited to setting a deadline of 30 to 60 days for the U.S. administration to issue the second required report under the HKAA identifying foreign financial institutions that knowingly conduct a “significant” transaction with the 10 individuals listed in yesterday’s Section 5(a) Report (the “Section 5(b) Report”).[3] We discussed the reports required under the HKAA and the potential impact of those reports in our earlier blog post.[4]
Continue Reading State Department Releases Hong Kong Autonomy Act Persons Report, Starts the Clock for Foreign Financial Institutions Report
Venture Capital Investing: New NVCA Models, and New Challenges for Foreign Investors in Early-Stage U.S. Companies
Between July 28, 2020 and September 1, 2020, the National Venture Capital Association (NVCA) released updates to its model legal documents for use in venture capital financing transactions. This memorandum will explain the changes to these model forms and some of the reasons for, and implications of, such changes.
As background, the NVCA is an