In March 2016, ZTE Corporation and ZTE Kangxun (collectively ZTE) were placed on the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) Entity List after corporate documents revealed alleged failure to comply with U.S. sanctions against Iran. While placement on the Entity List would ordinarily result in a ban on conducting business with the U.S., President Obama issued a Temporary General License (TGL) on March 24, 2016, which authorizes the export, reexport and transfer (in country) of items to ZTE. The TGL was implemented by amending the Export Administration Regulations (EAR) with the addition of Supplement No. 7 to part 744.
The Department of Treasury’s Office of Foreign Assets Control (“OFAC”) has taken two unrelated sanctions actions against Iran over the past several days:
SDN Designations in Response to Ballistic Missiles Tests
Effective February 3, 2017, OFAC imposed sanctions against 13 individuals and 12 entities with ties to Iran’s ballistic missile program. OFAC added these individuals and entities to its list of Specially Designated Nationals (the “SDN list”) freezing all of their assets held in the U.S. and prohibiting persons subject to U.S. jurisdiction from engaging in trade with the sanctioned individuals and entities. These sanctions also apply to non-U.S. persons on a secondary basis. In a press release, OFAC Acting Director John E. Smith stated “Iran’s continued support for terrorism and development of its ballistic missile program poses a threat to the region, to our partners worldwide, and to the United States” and also added “We will continue to actively apply all available tools, including financial sanctions, to address this behavior.”
As previously reported here, former President Obama in December 2016 issued an amendment to Executive Order (“EO”) 13694, which imposed sanctions on the Russian Federal Security Service (a.k.a Federalnaya Sluzhba Bezopasnosti and/or FSB) (“FSB”), other Russian entities and officers of those entities. The Department of Treasury’s Office of Foreign Assets Control (“OFAC”) also placed FSB and those entities and individuals on its list of Specially Designated Nationals and Blocked Persons (the “SDN List”). These sanctions prohibited persons subject to US jurisdiction from transacting business with the FSB and the other entities and individuals named in EO 13694 and the SDN List designations.
The newly passed Cybersecurity Law of the People’s Republic of China will take effect in June 2017, and it is expected to have a significant impact on multinationals doing business in mainland China. The law affects both domestic and foreign companies operating on the Chinese mainland and covers a wide range of activities including the use of the internet, information and communications technologies, personal data, national security and more.
The difficulties with determining the steps needed to comply with such sweeping changes are only complicated by the fact that a large number of key terms in the law have yet to be clearly defined. As a result, China’s new Cybersecurity Law will continue to evolve as the national government interprets it.
Here are some key provisions to follow in the coming months.
In the last few days of his Administration, President Obama and the U.S. Department of the Treasury’s Office of Foreign Asset Control (“OFAC”) took actions that, on at least a temporary basis, will authorize financial transactions with and most exports of goods and services to Sudan and the Sudanese Government. These actions take effect on Tuesday, January 17, but any U.S. persons seeking to trade with Sudan under the expanded authorizations should be aware that these new authorizations are subject to various conditions and could be revoked or modified based on future actions by the Government of Sudan and/or President-Elect Donald Trump’s incoming administration.
Following the recent release of a joint analysis report by the Federal Bureau of Investigation (FBI) and department of Homeland Security (DHS) on Russian Malicious Cyber Activity and sanctions issued by the Obama Administration on December 29, 2016 (as previously reported here), the Department of Commerce’s Bureau of Industry and Security (BIS) has amended the Export Administration Regulations (EAR) by adding five (5) Russian entities to the Entity List. The entities identified below have been determined to have been involved in activities contrary to the national security or foreign policy interests of the United States:
Yesterday, President Obama issued an amendment to Executive Order 13694 related to malicious cyber activities which imposed sanctions on two Russian intelligence agencies (the Federal Security Service and the Main Intelligence Directorate), four individual intelligence agency officers and three Russian vendors that provided cyber support to one of the sanctioned agencies. In an official statement, President Obama explained that the amendment was a response to “the Russian government’s aggressive harassment of U.S. officials and cyber operations aimed at the U.S. election.” The amendment also authorized the Secretary of the Treasury to sanction any additional individuals or entities determined to be engaged in “tampering with, altering, or causing a misappropriation of information with the purpose or effect of interfering with or undermining election processes or institutions.” The nine individuals and entities named in the E.O. 13694 amendment are now listed on the list of Specially Designated Nationals and Blocked Persons (the “SDN list”) maintained by the Department of Treasury’s Office of Foreign Assets Control (“OFAC”). This places a freeze on any property within the U.S. belonging to those individuals or entities and also prohibits persons subject to U.S. jurisdiction from engaging in trade with the sanctioned individuals and entities. Shortly thereafter, OFAC exercised its authority under a separate section of E.O. 13694 and added two Russian cyber criminals to the SDN list along with the nine individuals and entities named by President Obama (list found here).
The Department of Treasury’s Office of Foreign Assets Control (OFAC) has announced new rules, which will take effect December 23, 2016, amending the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR). The revised rules expand the scope of medical devices and agricultural commodities that may be exported or re-exported to Iran without specific authorization, pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA).
On December 20, 2016, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued its latest round of Russian sanctions as part of the ongoing U.S. response to Russia’s 2014 annexation of Ukraine’s Crimean peninsula and its subsequent escalation of conflict in the region. The new sanctions target seven individuals, eight entities, and two vessels. OFAC also added an additional 26 subsidiaries of Russian banks already subject to sanctions to the U.S. Sectoral Sanctions List. The new sanctions come one day after the European Union extended its sanctions against Russia for an additional six months.
On December 15, 2016, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) revised their Frequently Asked Questions Relating to the Lifting of Certain U.S. Sanctions Under the Joint Comprehensive Plan of Action (JCPOA), clarifying procedures related to the potential “snapback” of the JCPOA and the subsequent re-imposition of sanctions.