The Uyghur Forced Labor Prevention Act (UFLPA) supports the existing prohibition on the importation of goods into the United States made with forced labor under Section 307 of the Tariff Act of 1930 (19 U.S.C. § 1307).  Enforcement of the UFLPA began on June 21, 2022.  Companies with supply chains that have links to Xinjiang specifically and China more generally should be concerned about the implications of UFLPA enforcement.

The UFLPA requires U.S. Customs and Border Protection (CBP) to apply a presumption that imports of all goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of China (Xinjiang), or by entities on the UFLPA Entity List (described below), are prohibited from entry into the United States under 19 U.S.C. § 1307.  The scope of the UFLPA extends to goods made outside of or shipped through China that include inputs made wholly or in part in Xinjiang.  There is no de minimis exception.  Priority enforcement areas include polysilicon, cotton, and tomatoes.

Continue Reading Uyghur Forced Labor Prevention Act, Part II: Enforcement

On June 23, 2022, the UK government adopted its latest package of trade sanctions measures against Russia in response to its continued military aggression in Ukraine.  The new sanctions measures were implemented pursuant to The Russia (Sanctions) (EU Exit) (Amendment) (No. 10) Regulations 2022 (“Russia Regulations Amendment No. 10”), which introduce a tranche of new trade sanctions, as well as adding new items to various existing restrictions and expanding existing prohibitions on military goods and technology to the non-government controlled Ukrainian territory.  Additionally, the UK government has this week updated its guidance on the aviation and space goods and technology insurance ban.

For more information on how these developments could impact your organization, contact the author of this post, Alexandra Melia, in Steptoe’s Economic Sanctions team in London.

For additional resources can be found on Steptoe’s “Sanctions against Russia: Implications for Business and International Trade” page.

New Trade Sanctions

The Russia Regulations Amendment No. 10 have introduced a new tranche of trade sanctions measures, which includes bans on:

  • the export, supply, delivery and making available to Russia and non-government controlled Ukrainian territory of interception and monitoring and internal repression goods and technology (as specified in Part 2 and Part 3, respectively, of Schedule 3C) as well as the transfer of such technology. The provision of related services also is prohibited, including interception and monitoring services;
  • the export, supply, delivery and making available to Russia and non-government controlled Ukrainian territory of goods relating to chemical and biological weapons (as specified in Part 4 of Schedule 3C), with a carve out for medicinal products and medical devices. The provision of related services also is prohibited;
  • the export, supply, delivery and making available of maritime goods and technology (as specified in in Chapter 4 (Navigation Equipment) and Chapter 5 (Radio-Communication Equipment) of Annex 1 of the Merchant Shipping Notice 1874) for placing on board a Russian-flagged vessel and transfer of maritime technology to a Russian-flagged vessel;
  • the export to or for use in Russia, making available in Russia, or to a person connected with Russia, of Sterling or EU denominated banknotes;
  • the provision of technical assistance, financial services or brokering services relating to iron and steel products;
  • the export to or for use in Russia of jet fuel and fuel additives (as specified under the relevant heading in Part 8 of Schedule 2A), as well as the provision of related services;
  • the import, acquisition or supply and delivery of revenue generating goods (as specified in Schedule 3D) that originate in or are consigned from Russia, and the provision of related services; and
  • the provision of services relating to iron and steel imports.

Addition of Products to Existing Trade Sanctions Prohibitions

The Russia Regulations Amendment No. 10 also has added new products to existing trade sanctions prohibitions on:

  • critical industry goods and technology;
  • oil refining goods and technology (including certain cold boxes, exchangers, pumps and process units for use in the LNG process); and
  • energy-related goods (including hydraulic fracturing items and high pressure pumps).

Extension of Certain Existing Russia Prohibitions to Non-government Controlled Ukrainian Territory

Finally, The Russia Regulations Amendment No. 10 has expanded the existing prohibitions on exporting, supplying, delivering and making available military goods and technology, and transferring military technology, to apply to non-government controlled Ukrainian territory as well as Russia.  The provision of related services also is prohibited.

New Guidance Published on Aviation and Space Goods Insurance Ban

On June 22, 2022, the UK government revised its statutory guidance on the UK’s Russia sanctions regime and, in particular, its guidance in relation to the prohibition on providing insurance and reinsurance services in relation to certain specified aviation and space goods and technology.

The revised guidance clarifies that the prohibition would not apply when:

  • the insurance in question is for the benefit of the non-Russian owner of the goods/technology, rather than the user or operator of such goods/technology; or
  • the items remain in Russia as the result of the termination of a lease and against the lessor’s will, or are being flown out of Russia in the process of being returned to their owner.

On June 15, 2022, the United Kingdom will introduce a strict civil liability standard for violations of UK financial sanctions committed after that date.  In anticipation of this important change to the enforcement powers of HM Treasury’s Office of Financial Sanctions Implementation (OFSI), the OFSI enforcement and monetary penalties for breaches of financial sanctions guidance (Monetary Penalties Guidance) has been updated and will take effect from June 15.  OFSI Director, Giles Thomson, also has outlined OFSI’s enforcement approach in light of these imminent changes in a blog post.

For more information on how these developments could impact your organization, contact the author of this post, Alexandra Melia, in Steptoe’s Economic Sanctions team in London.

Continue Reading UK Updates Sanctions Enforcement Guidance in Readiness for Imminent Introduction of Strict Civil Liability for Financial Sanctions Breaches

On 16 May 2022, the Council of the EU (the Council) decided for the third time to prolong its restrictive measures against cyber-attackers threatening the EU, its Member states or its allies. The measures are set to remain in place for a further three years until May 18, 2025. The Council’s press release on this is available here.

As mentioned in our previous post on the topic, the EU set up a cyber diplomacy toolbox (Toolbox) that enables the EU and its Member states to trigger measures from the Common Foreign and Security Policy (CFSP). The CFSP is the foreign policy framework of the EU, whereby Member states agree common positions on defense diplomacy and common positions on how to respond to security threats. This enables the Council to impose restrictive measures in order to prevent, discourage, deter and respond to malicious cyber activities that target the integrity and security of the EU and its member states. If necessary, the CFSP and the toolbox permit the Council to impose sanctions on those responsible for cyber-attacks from third counties or international organizations.

Sanctions were first imposed in July 2020, following an attempted cyber-attack against the Organisation for the Prohibition of Chemical Weapons (OPCW) by those publicly known as ‘WannaCry’, ‘NotPetya’, and ‘Operation Cloud Hopper’. Later that year, in October 2020, sanctions were imposed on two individuals and one entity for a cyber-attack against the German Federal Parliament in 2015. Those responsible were suspected to be working for Russian military intelligence. To date, eight individuals and four entities are subject to the Council’s sanctions regime that includes asset freezes, travel bans and bans on EU persons making funds available to them. This list will be re-assessed on May 18, 2023.

The purpose of this new extension is to send out a strong signal to hackers; cyberattacks are not tolerated.

Between April 18 and May 2, 2022, the US government continued to ratchet up economic sanctions, export controls, and other restrictive trade measures targeting Russia.  Most significantly, on April 21, President Biden issued a Proclamation prohibiting “Russian-affiliated vessels” from entering US ports.  Otherwise, the US government has focused on utilizing its existing authorities to impose further costs on Russia.

Over the last two weeks of April, the US Treasury Department’s Office of Foreign Assets Control (OFAC) designated over 40 individuals and entities including Transkapitalbank (TKB), re-issued an expanded set of Ukraine- / Russia- Sanctions Regulations (URSR), and issued several new or revised general licenses, including one relating to the provision of assistance by nongovernmental organizations, and 8 Frequently Asked Questions (FAQs).

Separately, the Commerce Department’s Bureau of Industry and Security (BIS) continues to be focused on restricting the Russian aviation sector, issuing a temporary denial order (TDO) on the Russian cargo aircraft carrier, Aviastar, for operating aircraft on flights into and out of Russia without the BIS authorization required under the Export Administration Regulations (EAR), and providing weekly updates to its list of commercial and private aircraft operated in potential violation of the EAR.

Continue Reading April 18 – May 2, 2022 Russian Sanctions Update

Between April 5 and April 17, 2022, the US government took several steps to ratchet up economic sanctions, export controls, and other restrictive trade measures targeting Russia and Belarus.

President Biden issued a new Executive Order prohibiting US persons from engaging in new investment in Russia, and also establishing a framework through which US persons could in the future be prohibited from providing certain services to any person in Russia.

The US Treasury Department’s Office of Foreign Assets Control (OFAC) designated a darknet market and cryptocurrency exchange, several Russian banks and their subsidiaries, and a number of companies allegedly assisting the Russian military by adding them to the Specially Designated Nationals and Blocked Persons (SDN) List pursuant to Executive Orders (EOs) 14024 and 13694. OFAC also published seven new and amended general licenses, including authorizations related to the recent designations of Public Joint Stock Company Sberbank of Russia (Sberbank), Joint Stock Company Alfa-Bank (Alfa-Bank), and Public Joint Stock Company Alrosa (Alrosa).

Separately, the US Commerce Department’s Bureau of Industry and Security (BIS) announced new, stringent export controls so that all items subject to the US Export Administration Regulations, except items designated “EAR99,” require a license for export, reexport, or transfer (in country) to or in the Russian Federation and Belarus.

Continue Reading US Sanctions on Russia Continue to Grow

Between March 24 and April 1, 2022, the US Treasury Department’s Office of Foreign Assets Control (OFAC) designated over 400 Russian elites, Duma members, and defense companies as Specially Designated Nationals (SDNs) pursuant to Executive Order (EO). 14024. OFAC also published four new, limited General Licenses regarding certain humanitarian, import-related, diplomatic, and journalistic activities, added one new FAQ, and published a determination for EO 14024. Separately, the White House has indicated that the United States is seriously considering imposing secondary sanctions against companies engaged in evasive activities with Russia or in business that otherwise undermines sanctions.

Additionally, on April 1, the Commerce Department’s Bureau of Industry and Security (BIS) added 120 entities in Russia and Belarus to the Entity List.

For a summary of prior US sanctions and export controls related to Russia adopted since February 21, 2022, please see our Steptoe blog posts from March 21, March 8, and February 27.

Continue Reading A Summary of The Latest US Sanctions on Russia

Since March 14, 2022, the United Kingdom has continued to introduce and announce new sanctions measures in response to Russia’s invasion of Ukraine.  The new UK measures include sanctions enforcement powers under the Economic Crime (Transparency and Enforcement) Act 2022, the designation of hundreds of individuals and entities under the UK’s Russia and Belarus sanctions regimes, the introduction of new general licences, the introduction and announcement of new sanctions measures, and the revision of various guidance documents.

Continue Reading A Summary of New UK Sanctions Enforcement Powers and Further Ukraine-related UK Sanctions on Russia and Belarus

As of March 20, 2022, a new Executive Order (EO) prohibited certain imports, exports, the transfer of US dollar banknotes to Russia, and new investments involving certain sectors of the Russian economy.  The US Office of Foreign Assets Control (OFAC) also issued new General Licenses and Frequently Asked Question (FAQ) guidance. Additionally, the US Department of Commerce’s Bureau of Industry & Security (BIS) announced new regulations to control the export, reexport, and transfer (in country) of certain luxury goods to or within Russia and Belarus. BIS also identified numerous aircraft subject to US export controls jurisdiction that had flown to Russia without a license, and issued a reminder regarding the restrictions under General Prohibition 10 under the Export Administration Regulations (EAR) of servicing such aircraft.

Key points of these US sanctions developments and export controls are summarized below.

For a summary of US sanctions and export controls adopted between February 21 and March 8, 2022, see this Steptoe blog post.

Continue Reading Update: New US Sanctions on Russia Target Certain Imports, Exports, Dollar Banknotes, and Investments

On March 15, the Council of the EU proceeded to adopt the fourth package of sanctions against Russia over the continued military aggression of Ukraine. With these new sanctions, the EU seeks to address potential loopholes under the first three packages, such as by providing clarifications, to restrict certain derogations, and to expand the sanctions’ scope by targeting new sectors. In particular, the new sanctions target the energy sector, although significant carve-outs exist for coal, oil, and natural gas imports.

Following our review of the first, second and third sanctions package, we analyze below the latest restrictive measures which constitute the fourth package of sanctions.

For more information on how these developments could impact your organization, contact a member of Steptoe’s Economic Sanctions team in Brussels.

For additional resources can be found on Steptoe’s “Sanctions against Russia: Implications for Business and International Trade” page.

Continue Reading EU Adopts Fourth Package of Sanctions Against Russia