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Callie Lefevre

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On December 11, 2019, the US State Department announced the designations of the Islamic Republic of Iran Shipping Lines (“IRISL”), its China-based subsidiary, E-Sail Shipping Company Ltd (“E-Sail”), and Mahan Air, a privately-owned airline based in Tehran, under Executive Order 13382 (“E.O. 13382”), for their involvement in the transporting of weapons of mass destruction (“WMD”).  All three entities had previously been designated to the Specially Designated Nationals and Blocked Persons List (“SDN List”) administered by US Treasury Department’s Office of Foreign Assets Control (“OFAC”). OFAC will implement the new designations by adding the [NPWMD] and [IFSR] tags to the SDN List entries of IRISL and E-Sail effective June 8, 2020. OFAC updated the Mahan Air entry effective immediately. OFAC published two related Frequently Asked Questions, FAQs 810 and 811.

On October 23, 2019, the US Treasury Department Office of Foreign Assets Control (“OFAC”) announced that it had deleted two Turkish ministries and three Turkish individuals from the list of Specially Designated Nationals and Blocked Persons (“SDN List”). These five parties had been designated to the SDN List on October 14, 2019 pursuant to Executive Order 13894 (“EO 13894”) for contributing to Turkey’s military offensive in northern Syria. Please see our blog post regarding EO 13894 here.

OFAC’s removal of these parties from the SDN List followed a statement from President Trump that he had instructed the Secretary of the Treasury to lift all sanctions imposed on Turkey on October 14th in response to the Government of Turkey’s agreement to adhere to a permanent ceasefire. President Trump indicated that sanctions targeting Turkey would be lifted, “unless something happens that we’re not happy with.” There are no remaining SDNs designated pursuant to EO 13894. The executive order itself remains in effect, however, thus providing the Secretary of Treasury with ongoing authority to designate individuals or entities under EO 13894.

On September 17, 2019, the Department of Treasury (“Treasury”) released for public comment two proposed rules (the “Proposed Rules”) implementing the Foreign Investment Risk Review Modernization Act (“FIRRMA”) enacted in August 2018.  FIRRMA expanded the jurisdiction of the Committee on Foreign Investment in the United States (“CFIUS”) and granted CFIUS new tools to regulate foreign investments raising national security concerns.  Our previous analysis of FIRRMA is available here, and our analysis of the “critical technologies” pilot program under FIRRMA implemented by interim regulations issued by Treasury on October 10, 2018, (the “Pilot Program”) is available here.

Treasury will accept comments on the Proposed Rules until October 17, 2019, and the final regulations are to become effective no later than February 13, 2020.  Companies that may be affected by the Proposed Rules are encouraged to comment.  The full text of the Proposed Rules on investments by foreign persons in US businesses can be found here and on real estate transactions here.  We would be pleased to assist our clients with the submission of comments.

Key Changes

On September 6, 2019, the US Treasury Department Office of Foreign Assets Control (“OFAC”) announced that it is amending the Cuban Assets Control Regulations (“CACR”) to further financially isolate the Cuban government and implement President Trump’s June 2017 National Security Presidential Memorandum (“NSPM”) Strengthening the Policy of the United States Towards Cuba (the “CACR Amendment”). The CACR Amendment (1) removes the authorization for banks subject to US jurisdiction to process pass-through or “U-turn” transactions, and (2) eliminates or restricts certain types of remittances to Cuba. The CACR Amendment was published in the Federal Register on September 9, 2019, and will take effect on October 9, 2019.

OFAC also published Frequently Asked Questions and a Fact Sheet on the CACR Amendment.