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November 19, 2018 SanctionsAlert.com Sanctions Round Up

US Imposes Sanctionson 17 Saudis for Alleged Role in Khashoggi Killing, but Prince Stays Clear

On November 15, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Saud al-Qahtani, his subordinate Maher Mutreb, Saudi Consul General Mohammed Alotaibi, and 14 other members of an operations team for having a role in the brutal killing of Jamal Khashoggi, a Saudi journalist. Khashoggi’s killing took place in the Saudi Consulate in Istanbul shortly after he entered on October 2, 2018.

These individuals are designated pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act. This law target perpetrators of serious human rights abuse and corruption. Any property or interests in property of the designated individuals within or transiting U.S. jurisdiction is blocked.  To date, 101 individuals and entities have been sanctioned under E.O. 13818.

U.S. persons are generally prohibited from engaging in transactions with blocked persons, including entities 50 percent or more owned by designated persons. A FinCEN advisory related to human rights abuses enabled by “Corrupt Senior Foreign Political Figures” was released earlier this year.

Treasury Secretary Steven Mnuchin said in a statement:  “The Government of Saudi Arabia must take appropriate steps to end any targeting of political dissidents or journalists.”However, the November 15 sanctions fall short of imposing sanctions against the Saudi leader – Prince Mohammed bin Salman – or any of those closest to him.

UN Sanctions Lifted on Eritrea After Nine Years

On November 14, 2018, the UN Security Council unanimously voted on to lift a nearly decade-old arms embargo and targeted sanctions on Eritrea after efforts to ease tensions between the East African country and long-standing adversary – Ethiopia.

British U.N. Ambassador Karen Pierce stated that the resolution “recognizes the improvements in regional peace and security.”

The measures against Eritrea – which include an arms embargo, travel ban, and asset freeze on certain people and entities – were imposed in 2009 after UN experts accused it of supporting armed groups in Somalia. In July, Ethiopia and Eritrea declared an end to their state of war and agreed to open embassies, develop ports and resume flights between the two countries after decades of hostilities.

Now that UN sanctions have been lifted, it is yet to be seen if the UK and EU will follow suit. The EU (and therefore the UK) initially imposed sanctions against Eritrea in March 2010 in order to implement UN sanctions. The US does not currently impose an arms embargo, travel ban, or asset freezes on Eritrea, but expressed concern during UN talks over past weapons purchases by Eritrea from North Korea.

UK Launches Inquiry Into the Future of Sanctions Policy After ‘Brexit’

On November 12, 2018, the UK Foreign Affairs Committee, one of many committees that scrutinizes the work of the UK’s Foreign and Commonwealth Office (FCO), launched an inquiry into UK sanctions after ‘Brexit’ called Global Britain: the future of UK sanctions policy. The inquiry explores the future of UK sanctions by evaluating the different options for the UK’s approach to sanctions policy after it leaves the EU.

The inquiry welcomes submissions on the following topics:

  • The effectiveness of sanctions as an instrument of foreign policy, including examples of both successful and unsuccessful use of sanctions to influence the behavior foreign actors.
  • The advantages and disadvantages of the EU’s approach to the use of sanctions, both generally and in specific cases (such as Russia).
  • How the USA sets and uses sanctions as an instrument of foreign policy, and the advantages and disadvantages of its approach particularly where that differs from the EU.
  • How the UK might best make use of the Magnitsky powers included in the Sanctions and Anti-Money Laundering Act 2018.
  • The extent to which the UK should seek to align with the EU in sanctions policy post-Brexit, versus areas in which it may wish to diverge or seek stronger sanctions.
  • The FCO’srecord in:
    • Identifying individuals, companies and regimes that should be sanctioned;
    • Linking specific sanctions recommendations to broader foreign policy goals; and,
    • Working with other departments, agencies and the private sector to share intelligence and implement sanctions effectively.
    • The use of sanctions alongside other tools designed to combat dirty money, such as Unexplained Wealth Orders. (These are court orders issued by a British court to compel someone to reveal the sources of their unexplained wealth, and to explain the ability to legitimately afford a certain property.)

The Committee is accepting written submissions up to the deadline of December 14, 2018. Anyone can make a submission as long as it is based on the above 7 issues. If you would like to make a submission, click here.

US Completes Full Reinstatement of Sanctions on Iran; EU reiterates commitment to JCPOA

On November 5, 2018, the US Treasury Department’s Office of Foreign Assets Control (OFAC) took several actions to complete the reinstatement of sanctions against Iran. These actions follow the decision by President Trump’s on May 8, 2018 to pull out of the Joint Comprehensive Plan of Action (JCPOA) – an agreement by major European countries to slowly thaw certain sanctions on Iran.

Among the actions taken by OFAC were:

  • Re-imposing sanctions on activities – such as shipbuilding, petroleum-related transactions, and insurance/re-insurance – subject to the 180-day wind-down period, which ended on November 4, 2018;
  • Designating more than 700 individuals and entities as Specially Designated Nationals (SDNs) and adding them to OFAC’s SDN List. This included 70+ Iran-linked financial institutions;
  • Amending of the Iranian Transactions Sanctions Regulations (ITSR) to reflect the reinstatement of certain sanctions;
  • Announcing significant reduction exceptions (SREs) to eight countries (China, India, Italy, Greece, Japan, South Korea, Taiwan, and Turkey) to allow those countries to temporarily continue to purchase Iranian oil; and
  • Issuing new and revised Frequently Asked Questions (FAQs) relating to the reinstatement of US sanctions on Iran.

With these steps, all US sanctions suspended or revoked in connection with the JCPOA are re-imposed and in full effect.

In defiance to the re-imposition of US sanctions on Iran, the UK, France and Germany issued a joint statement expressing their countries’ regret regarding the U.S.’s withdrawal from the JCPOA.

The statement highlights the nations’ view that the JCPOA is an important tool in the process of nuclear non-proliferation and states that, “It is crucial for the security of Europe, the region, and the entire world.” It also highlights the countries’ commitment to working with Iran to allow European parties to pursue legitimate trade with Iran.

This intention is supported by the EU through the implementation of amendments to the EU Blocking Regulation, which came into force in August of this year. Following the announcement that the U.S. would be withdrawing from the Iran nuclear deal on May 8th, E.U. leaders made the decision to activate the so-called ‘Blocking Regulation’. This provision bans European companies, under threat of punishment, from complying with U.S. sanctions against Iran.

OFAC and JMPC Agree $5.26M Settlement for Violation of Cuban, Iranian, and WMD Sanctions

On October 5th, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement of $5,263,171 with JPMorgan Chase Bank, N.A. (JPMC). JPMC agreed to settle their potential civil liability for an apparent violation of one or more of the following sanctions programs: the Cuban Assets Control Regulations, the Iranian Transactions and Sanctions Regulations, and the Weapons of Mass Destruction Proliferators Sanctions Regulations

According to the OFAC notice JPMC processed 87 transactions through the US financial system that may have contained interests attributable to a sanctions-targeted party. Each of the transactions represented a net settlement payment between JPMC’s client and the non-U.S. person entity whose members included among its numerous airline industry participants eight airlines that were at various times on OFAC’s SDN List, blocked pursuant to OFAC sanctions, or located in countries subject to the sanctions programs administered by OFAC.

This penalty represents the largest fine by OFAC in over a year since CSE Global agreed a settlement of $12M in July 2017.