On November 30, 2020, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced the addition of Chinese company CEIEC to its list of Specially Designated Nationals and Blocked Persons (SDN List), pursuant to Executive Order 13692, for “its role in undermining democracy in Venezuela.” OFAC also issued General License 38 authorizing certain wind-down activities with CEIEC, as well as an FAQ regarding the designation and general license.
According to Treasury, CEIEC, also known as China National Electronic Import-Export Company, has over 200 offices and subsidiaries worldwide. CEIEC explains on its website, https://www.ceiec.com/About, that it is a “close partner of many foreign government[s], military and security department[s], to help them fulfill their mission of securing citizen’s confidence to health, safety, economic growth and public governance.”
In the press release announcing CEIEC’s addition to the SDN List, Treasury explained that the designation is due to the company’s involvement in “actions or policies that undermine democratic processes or institutions” in Venezuela. For example, Treasury stated that CEIEC provided “software, training, and technical expertise to Venezuela[n] government entities, which was then used against the people of Venezuela.”
Concurrent with CEIEC’s designation, OFAC issued General License 38, which authorizes until 12:01 a.m. eastern standard time on January 14, 2021, certain transactions and activities by US persons that are ordinarily incident and necessary to the wind down of transactions and activities involving CEIEC or its subsidiaries. In addition, and of significance to non-US persons, the FAQ issued by OFAC notes that from a “secondary sanctions” perspective, non-US persons should be mindful of the wind-down period set forth in the General License. This FAQ states in part that “[e]ntering into new business involving the Blocked CEIEC Entities will not be considered wind-down activity. Non-U.S. persons unable to wind down activities with the Blocked CEIEC Entities before 12:01 a.m. eastern standard time, January 14, 2021, may seek guidance from OFAC.”