On October 31, 2019, the US State Department strengthened US secondary sanctions targeting Iran under the Iran Freedom and Counter-Proliferation Act of 2012 (“IFCA”) (codified at 22 U.S.C. § 8801 et seq.), which dates back to 2013. These new IFCA sanctions target the construction sector in Iran and make sanctionable the export to Iran of certain strategic metals.
On September 9, 2019, the US Commerce Department’s Bureau of Industry and Security (“BIS”) published two Frequently Asked Question (“FAQ”) documents (available here and here) on the Huawei Entity List and Temporary General License (“TGL”) and the Huawei TGL Extension (the amended TGL issued on August 21, 2019 is available here). See our blog post on the extension of the Huawei TGL here.
The key clarifications made by BIS in the two sets of FAQs include the following:
On August 5, 2019, President Trump issued Executive Order 13884 (“Venezuela EO”) blocking all property of the Government of Venezuela (“GOV”), a significant escalation of sanctions against the regime of President Maduro. Statements issued by the White House and State Department indicate that this escalation is meant to target the Maduro regime for its continued abuses of human rights and repression. The US Department of Treasury’s Office of Foreign Assets Control (“OFAC”) concurrently issued 12 amended general licenses and 13 new general licenses, new and revised FAQs, and guidance related to the provision of humanitarian assistance and support to the Venezuelan people.
The Venezuela EO targets only the GOV and entities owned 50% or more or otherwise controlled by the GOV, and thus does not place Venezuela under a full territorial embargo. Transactions with private Venezuelan parties that can be effected without the involvement of the GOV remain permissible.
The new sanctions prohibit virtually all US Person dealings with the GOV by blocking the property and interests in property of the GOV that are in the United States, that come within the United States, or that come within the possession or control of US Persons (i.e., US companies and their branches, US banks, US citizens and permanent resident aliens, any person physically located in the United States). GOV funds, contracts or other property interests that come into the possession or control of US Persons must be blocked and reported to OFAC.
On June 26, 2019, the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) amended Venezuela-related General License 13A (re-issued as General License 13B) to extend its expiration date from July 27, 2019 to October 25, 2019. General License 13B continues to authorize transactions with Nynas AB, which is owned more than 50% by Petróleos de Venezuela SA (“PdVSA”), and any of Nynas AB’s subsidiaries. PdVSA was designated as a Specially Designated National (“SDN”) on January 28, 2019, under Executive Order 13850. Our original blog post regarding the designation of PdVSA is available here. Dealings with entities owned 50% or more by PdVSA are prohibited absent OFAC authorization (i.e., a general or specific license). Our previous blog post regarding the application of US sanctions to certain PdVSA subsidiaries is available here.
In addition, OFAC extended the expiration dates of two general licenses related to GAZ Group (“GAZ”), which was designated as an SDN on April 6, 2018 for being owned or controlled by Oleg Deripaska. Please see our blog post regarding this designation here.