On September 12, 2018, President Trump issued a new Executive Order, āImposing Certain Sanctions in the Event of Foreign Interference in a United States Electionā (the āOrderā). The Order authorizes the designation as Specially Designated Nationals (āSDNsā) of parties that engage in foreign interference in US elections. While the Order provides the authorization and criteria for such designations, it does not designate any additional parties as SDNs at this time. The Order also requires additional review of the nature and extent of any foreign interference in each US federal election, including the upcoming midterm Congressional elections. Although it is not targeting any particular country or government, the Order comes as the US Congress debates additional sanctions on Russiaās largest banks and energy companies and the purchase of Russian sovereign debt in response to alleged Russian interference in the 2016 US elections.
On July 13, 2018, the US Department of Commerce’s Bureau of Industry and Security (“BIS”) issued an order (“Termination Order”) immediately terminating the denial order issued on April 15, 2018 against Zhongxing Telecommunications Equipment Corporation (“ZTE Corporation”) and ZTE Kangxun Telecommunications Ltd. (“ZTE Kangxun” and, collectively, “ZTE”) that had prohibited dealings with ZTE involving items subject to US jurisdiction.Ā ZTE has been removed from the Denied Persons List, and exporters and reexporters are no longer generally prohibited from supplying to ZTE items subject to US jurisdiction, including parts and components, or servicing such items for ZTE.
On June 7, 2018, the US Department of Commerce announced that Zhongxing Telecommunications Equipment Corporation (āZTE Corporationā) and ZTE Kangxun Telecommunications Ltd. (āZTE Kangxunā and, collectively with ZTE Corporation, āZTEā) had agreed to additional penalties and compliance measures to secure their removal from the Bureau of Industry and Security (āBISā) Denied Persons List and regain access to US products and components. The new agreement imposes significant additional fines on ZTE, requires the company to carry out management changes, and institutes strict compliance requirements. Importantly, ZTE has not yet been removed from the Denied Persons List and remains subject to the existing restrictions until certain steps are taken. Nevertheless, the agreement sets out a path forward for ZTE to soon resume operations that had otherwise stalled due to the lack of access to US items.
On March 1, 2018, the US Treasury Departmentās Office of Foreign Assets Control (āOFACā)Ā announcedĀ the amendment and reissuance in their entirety of the North Korea Sanctions Regulations, 31 C.F.R. Part 510 (āNKSRā). A public inspection copy of the Final Rule can be found here. These changes to the NKSR will take effect on March 5, 2018 upon publication in the Federal Register. OFAC also published 13 new FAQs, which can be found here.