On August 5, 2019, the European Commission (“Commission”) published its official Guidance on Internal Compliance Programmes (“Guidance”). The Guidance aims to clarify and harmonize implementation of Regulation 428/2009 on Dual-Use Goods (“Dual-Use Regulation”) by competent Member State authorities (“national export authorities”) and EU-based exporters of dual-use goods (“exporters”). While the Guidance is non-binding, national export authorities will take it into careful account when considering applications to export, transit or broker dual-use items.
Late on Friday, August 2, 2019, the U.S. Administration announced that it would implement a second wave of sanctions under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (CBW Act) against the Russian Federation. These sanctions will;
- prohibit U.S. financial institutions from participating in future primary issuances of non-ruble Russian sovereign debt;
- require the United States to oppose any new assistance to Russia by international financial institutions; and
- prohibit the export to Russia of dual-use goods controlled for chemical or biological warfare reasons.
Late in the evening of August 1, 2019, President Trump signed an executive order (the Executive Order) re-delegating implementation of certain sanctions under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (CBW Act) to the Secretary of the Treasury. According to press reports, the Administration may be preparing for a second round of CBW Act sanctions against Russia as a result of the Skripal poisoning.
Over the last few weeks, the U.S. House and Senate have separately passed a number of amendments to the National Defense Authorization Act for Fiscal Year 2020 (the “NDAA”) that, if enacted, would expand sanctions on persons and activities related to North Korea, China, Russia, Burma, and certain Central American states. Continue Reading Sanctions Outlook: Congress to Consider Sanctions Provisions in FY2020 Defense Bill
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 second quarter of 2019.
Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) each announced changes to the Cuba sanctions rules. OFAC is amending the Cuban Assets Control Regulations (CACR) to end group educational or cultural visits referred to as “people-to-people” educational travel, one of the major categories permitting non-family travel to Cuba. People-to-people educational travel that was previously authorized will be allowed where the traveler has already completed at least one travel-related transaction (such as purchasing a flight or reserving accommodation) prior to June 5, 2019. These amendments follow similar changes to CACR made on November 9, 2017 that removed authorization for individual people-to-people visits to Cuba. OFAC also released an updated set of frequently asked questions regarding Cuba sanctions.
China’s Ministry of Commerce (MOFCOM) announced at a special press conference on May 31 that it will institute an “Unreliable Entity List” system based on China’s Foreign Trade Law, Anti-Monopoly Law, and National Security Law. The planned “Unreliable Entity List” will include foreign companies, organizations, and individuals that do not obey market rules, act contrary to the spirit of contract, engage in boycott or suspension of supply against Chinese enterprises without commercial justifications, or seriously harm the legitimate rights and interests of Chinese enterprises. MOFCOM will announce the specific measures to be taken against those placed on the “Unreliable Entity List” in the near future. Continue Reading China to Establish “Unreliable Entity List” in Response to “Unilateralism and Trade Protectionism”
On May 8, 2019, President Trump issued a new Executive Order expanding secondary sanctions against the iron, steel, aluminum, and copper sectors of Iran. The Executive Order provides authority to impose sanctions on foreign persons who operate in the covered metals sectors or who facilitate significant transactions in connection with those sectors. Unlike direct sanctions (which have long prohibited unlicensed dealings with Iran with a connection to U.S. jurisdiction), secondary sanctions threaten the imposition of sanctions against non-U.S. persons acting entirely outside U.S. jurisdiction. Although the order is immediately effective, firms are permitted 90 days to wind down existing transactions pursuant to an accompanying OFAC FAQ. Continue Reading Sanctions Tighten on Iranian Metals Sectors
On May 2, 2019, the U.S. Department of the Treasury’s Office of Foreign Assets Control released “A Framework for OFAC Compliance Commitments”, providing general guidance on the elements OFAC considers to compose an effective sanctions compliance program.
Broadly, the framework endorses a risk-based approach to compliance (recognizing that no two compliance programs will be identical) and the need for a formal SCP that includes five essential components: management commitment, risk assessment, internal controls, testing and auditing, and training. The Framework is not a regulatory requirement, nor does it prescribe specific controls; rather, it indicates the elements that OFAC will look for in evaluating a company’s compliance efforts in the context of any enforcement action.
The Framework also sets out prescriptive compliance commitments OFAC will seek in future enforcement actions, largely codifying commitments seen in recent settlements.
This memorandum summarizes the Framework and recent OFAC enforcement actions imposing compliance commitments.
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 first quarter of 2019.