In June of 2019, OFAC amended its Reporting, Procedures and Penalties Regulations (RPPR), apparently effecting a radical expansion of the obligation of non-financial institutions in the U.S. to report “rejected” transactions involving U.S.-sanctioned persons.  OFAC has long required financial institutions to report rejected financial transactions involving sanctioned persons.  (“Rejected” transactions involve persons who are not Specially Designated Nationals (SDNs) or other persons whose property within U.S. jurisdiction is blocked, but with whom transactions are nevertheless prohibited, such as private individuals and companies resident in Iran and not explicitly designated for sanctions.  U.S. persons may not execute these transactions but are not required to block and report any related assets that come within their control; to take the historical example of funds transfers, the payment is returned to the sender rather than being frozen in a blocked account.)  The amended reporting guidelines expanded that obligation from financial institutions to all U.S. persons and persons within the United States, defined the relevant transactions to include “transactions related to wire transfers, trade finance, securities, checks, foreign exchange, and goods or services,” and (as before) did not define “reject” at all.  If any person subject to U.S. jurisdiction does reject a transaction for goods or services (financial or otherwise) for sanctions reasons, it is now legally required to report that rejection within ten days.
Continue Reading New FAQs Provide Little Clarity on Expanded OFAC Reporting Obligations for Non-Financial Institutions

This Trade Summary provides an overview of WTO dispute settlement decisions and panel activities, and EU decisions and measures on commercial policy, customs policy and external relations, for the fourth quarter of 2019.

If you have any questions regarding the above, do not hesitate to contact fclaprevote@cgsh.com or tmuelleribold@cgsh.com.

On February 11, 2020, Judge Stanton of the U.S. District Court for the Southern District of New York denied Dresser-Rand Company’s (Dresser Rand) motion for summary judgment in a suit to collect on a promissory note issued by Petróleos de Venezuela, S.A. (PdVSA).  The Court’s decision turned on a finding that payment by PdVSA was legally impossible under U.S. sanctions.  That finding was based on incomplete briefing by the parties and appears seriously flawed given the licenses and guidance provided by the Department of Treasury’s Office of Foreign Assets Control (OFAC).  We discuss the decision and the U.S. sanctions regime as applied to the promissory note below.

Continue Reading District Court Decision Incorrectly Holds that OFAC Sanctions Bar PdVSA from Making Payment on Pre-Sanctions Debts

On January 13, 2020, the U.S. Department of the Treasury (“Treasury”) released final regulations (the “Final Regulations”) implementing the updates to the foreign investment review process of the Committee on Foreign Investment in the United States (“CFIUS”) contained in the Foreign Investment Risk Review Modernization Act of 2018 (“

Update: On January 16, 2020, OFAC announced a 90-day wind-down period for persons engaged in transactions that could be sanctioned under Executive Order 13902 with respect to the construction, mining, manufacturing, and textiles sectors of the Iranian economy.  Parties should wind down any sanctionable dealings in those sectors before April 9, 2020.  Consistent with previous wind-down periods, OFAC noted that parties entering into new business during this period may be sanctioned.
Continue Reading Iran Secondary Sanctions Expanded to Cover Construction, Mining, Manufacturing, and Textiles Sectors

On the evening of December 9, 2019, a U.S. congressional conference committee released the compromise version of the National Defense Authorization Act for Fiscal Year 2020 (“NDAA 2020” or “Defense Bill”).  NDAA 2020, which will be voted upon without further amendment and is virtually certain to be enacted into law, contains provisions that would authorize new secondary sanctions relating to the Nord Stream 2 and TurkStream projects, Syria, and North Korea.
Continue Reading Compromise U.S. Defense Bill Provides for New Secondary Sanctions Against Russia, Syria, and North Korea

Today, the U.S. Department of Commerce published for comment proposed regulations that would create sweeping authority to oversee, and potentially require the removal of, purchases of foreign telecommunications and IT technology linked to “foreign adversaries” by persons in the United States and U.S. companies overseas.  The draft regulations on “Securing the Information and Communications

The U.S. Department of Commerce’s Bureau of Industry and Security has issued a rule, effective immediately, lowering the permissible level of de minimis U.S.-origin content in goods to be exported to Cuba.  Items manufactured outside the United States now may have no more than 10% U.S.-origin content (reduced from 25%) if they are to

On October 23, 2019, the Trump Administration rescinded the designation of Turkish officials and ministries.  The Executive Order remains in force, and so authority to re-impose sanctions remains.

On October 14, President Trump issued Executive Order 13894, styled “Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Syria.”  Under this order, OFAC designated the Turkish Ministry of Energy and Natural Resources, the Turkish Ministry of Defense, and the Ministers of the Interior, Energy and Natural Resources, and Defense for blocking sanctions.  This prohibits not only transactions with the relevant ministries and ministers (including in their official capacities) but any state-owned enterprise in which a 50% or greater interest held through those ministries.  OFAC also issued three general licenses providing a 30-day wind-down period for existing contracts with the sanctioned ministries or entities and permitting official U.S. government functions and certain international organization activities to continue, and OFAC has indicated that it is prepared to issue specific or general licenses to ensure that Turkey is still able to meet its energy needs.
Continue Reading US Imposes Sanctions Against Turkish Ministries, Officials