On November 12, 2021, the US Treasury Department’s Office of Foreign Assets Control (OFAC) designated the Eritrean Defense Forces, the Eritrean People’s Front for Democracy and Justice (PFDJ), two government-linked commercial entities, the head of the Eritrean National Security Office, and a prominent political advisor as Specially Designated Nationals (SDNs) pursuant to Executive Order (EO) 14046 of September 17, 2021, in response to the ongoing military conflict and humanitarian crisis in northern Ethiopia. These are the first designations made under the EO and OFAC’s recently adopted Ethiopia-related sanctions program.

According to a Treasury Department news release, the designations target Eritrean actors that have contributed to the situation in northern Ethiopia and “undermined the stability and integrity of the Ethiopian state.”


Continue Reading US Government Targets Eritrea with Sanctions over Ethiopia Crisis

On October 18, 2021, the US Treasury Department published a report of its 2021 Sanctions Review of economic and financial sanctions implemented by the Office of Foreign Assets Control (OFAC) since September 11, 2001. The next day, Deputy Secretary of the Treasury Wally Adeyemo delivered a summary of the report in testimony before the US Senate Committee on Banking, Housing, and Urban Affairs.

The review, which incorporates feedback from public and private stakeholders, together with Adeyemo’s testimony underscores the Treasury Department’s concern that the effectiveness of US sanctions could erode over time as non-US actors seek alternatives to the US financial system, including digital currencies and alternative payment platforms outside of US jurisdiction.  The report observes that not only adversaries but also “some allies” are reducing their use of the US dollar in cross-border transactions, implying that unilateral US actions are contributing to the risk that US sanctions could become less effective.  To counter this trend, the report lays out a five-point plan to “modernize sanctions” by enhancing the Treasury Department’s policy framework and processes for imposing, enforcing, and revising US sanctions.


Continue Reading Changes Ahead? US Treasury Publishes Outcomes of Sanctions Policy Review

On September 21, 2021, the US Department of the Treasury’s Office of Foreign Asset Control (OFAC) issued an updated advisory on the sanctions risks of facilitating ransomware payments.  OFAC issued a prior version of its advisory on October 1, 2020. In the months since, attacks have continued and target entities in the United States, including many in sensitive industries, generating increased concern over the scale of the problem. OFAC’s updated advisory is part of the Biden administration’s ongoing efforts to address the national security and economic risks posed by such attacks. The updated advisory emphasizes that OFAC “strongly discourages” victims from making ransom payments and reemphasizes the sanctions risks of doing so, but also seeks to provide victims with greater clarity about the steps that can be taken to reduce the likelihood of a public enforcement response if a company inadvertently makes or facilitates ransom payments that may have a sanctions nexus.

Continue Reading OFAC Issues Revised Ransomware Advisory

Like the United States and other like-minded countries, the EU regularly uses targeted financial sanctions against foreign organizations, legal entities, and individuals as a proportionate response in situations where an international disagreement or a crisis cannot effectively be resolved by conventional instruments of diplomacy, or to give weight to its demands against foreign powers.  The procedure for the adoption of financial sanctions by the EU is in principle governed by strict standards as concerns due process and the respect of the rule of the law. However, when the parties targeted by sanctions seek legal redress, they are often frustrated by the outcome.  This is illustrated by two judgments of the EU General Court in a matter involving Viktor Yanukovych, the former President of Ukraine, and his son, Oleksandr Yanukovych (see cases T-303/19 and T-302/19).

Continue Reading “Déjà vu” in EU Sanctions Policy: A Comment on Two EU General Court judgments in the Yanukovych Case

On August 20, 2021, the Biden administration issued a new Executive Order (“EO”) entitled “Blocking Property with Respect to Certain Russian Energy Export Pipelines.”  At the same time, the Treasury Department’s Office of Foreign Assets Control (“OFAC”) added five entities and 13 vessels to the List of Specially Designated Nationals and Blocked Persons (“SDN List”) under the new EO.

These developments – the latest in a series of US actions related to the Nord Stream 2 and TurkStream pipelines – suggest that the United States is attempting to strike a balance between formally opposing the Nord Stream 2 project and cooperating with major allies who favor the pipeline’s completion, such as Germany.  Importantly, the sanctions under the new EO are not as incrementally significant as they may seem: of the 18 new SDNs, all but four (two entities and two vessels) were already subject to sanctions under the Protecting Europe’s Energy Security Act of 2019 as amended (“PEESA”), which were imposed in May 2021 and were virtually identical to the new sanctions.  Rather than reflecting a more aggressive US stance in opposition to Nord Stream 2, the new EO appears to be driven primarily by legal technicalities including a limitation on the sanctions that could be imposed under PEESA.


Continue Reading A Pipeline Runs Through It: US Government Strikes Delicate Balance on Nord Stream 2 with New Executive Order, Four Sanctions Designations

China’s Anti-Foreign Sanctions Law (the “Law”), which was enacted and became effective on June 10, 2021, authorizes the Chinese government to develop an “anti-sanctions list” and to impose countermeasures on listed persons involved in “discriminatory restrictive measures.”  It also creates a private right of action for Chinese citizens and organizations to sue in a Chinese

On June 21, 2021, the United States, the EU, the UK, and Canada announced coordinated sanctions following the forced and unlawful landing of a Ryanair flight in Minsk and the detention by Belarusian authorities of journalist Raman Pratasevich and Sofia Sapega, in May 2021. The sanctions include new EU sectoral-style sanctions against certain sectors of the Belarusian economy, as well as targeted financial sanctions against dozens of individuals and entities in connection with alleged human rights violations and the violent repression of civil society, democratic opposition, and journalists in Belarus.

The new sanctions follow the reactivation, on June 3, 2021, of longstanding sanctions against nine Belarussian companies and their subsidiaries by the US Treasury Department’s Office of Foreign Assets Control (OFAC), as discussed in our April 20, 2021 blog post.


Continue Reading Belarus Faces New EU, US, UK, and Canadian Sanctions After Ryanair Flight Diverted

On May 18, 2021, the US Treasury Department’s Office of Foreign Assets Control (OFAC) issued an updated general license under Executive Order (EO) 13959 authorizing US persons to transact in publicly traded securities of entities whose names “closely match” the name of any company previously identified as a Communist Chinese military company (CCMC). The general license (now called General License No. 1B), which was due to expire on May 27, 2021, now expires on June 11, 2021.

For the time being, the restrictions under EO 13959 apply only to entities whose names appear on OFAC’s Non-SDN CCMC List as well as seven entities who are yet to be formally added to OFAC’s Non-SDN CCMC List but were identified by the Department of Defense on January 14, 2021.


Continue Reading OFAC Extends General License for “Close Name Matches” under Executive Order 13959 as Biden Administration Reviews Communist Chinese Military Company Sanctions

On April 21, 2021, the EU General Court rendered a judgement on an appeal against the retention of Aisha Qaddafi, the daughter of the late Colonel Muammar Qaddafi, on EU sanctions lists. The judgment confirms the case law according to which the EU Council may, in certain cases, have to produce additional proof to justify the listing of a person, even where this person has been previously designated in a Resolution of the UN Security Council.

Aisha Qaddafi was first listed by the EU in March 2011, shortly after her designation by the UN Security Council. Since then, the EU sanctions lists have been updated several times without any amendments to the listing of Ms. Qaddafi. The contested acts by which the listing of Ms. Qaddafi was maintained and which were adopted in 2017 and 2020, did not mention any new factors other those which had been put forward for the initial listing of her name in 2011. The stated reason for listing her under EU sanctions was the simple fact that she had been designated by the UN Security Council in 2011.


Continue Reading EU General Court lifts sanctions against daughter of Muammar Qaddafi

On April 19, 2021, the EU Council added two companies controlled by the Tatmadaw (Myanmar Armed Forces) as well as 10 individuals to its Myanmar sanctions list (see Council Decision (CFSP) 2021/639 and Council Regulation 2021/638). The EU Council designated these entities and individuals by relying on the extended designation criteria established by Council Decision (CFSP) 2021/482 and Council Regulation 2021/479 on March 22, 2021, which provide for the possibility to impose restrictive measures against those involved in activities undermining democracy and the rule of law in Myanmar, as well as against the economic interests of the Tatmadaw. The EU Council had already adopted sanctions against eleven individuals on March 22, 2021 (see our previous client alert).

The new listings include:

  • Myanmar Economic Holdings Public Company Limited (MEHL) and Myanmar Economic Corporation Limited (MEC) as they are owned and controlled by the Tatmadaw and generate revenue for the Tatmadaw.
  • U Chit Naing, Minister for Information and Chairman of the State Administrative Council. He is deemed responsible for junta propaganda and spreading disinformation through state media, as well as for decisions that led to the crackdown on Myanmar media.
  • Nine members of the State Administrative Council, that are considered to undermine democracy and the rule of law, and responsible for serious human rights violations. These include Mahn Nyein Maung; Thein Nyunt; Khin Maung Swe; Jeng Phang Naw Htaung; Maung Ha; Sai Long Hseng; Saw Daniel; Dr Banyar Aung Moe; and Aye Nu Sein (also Vice-chair of the Arakan National Party).


Continue Reading EU Imposes Additional Sanctions against Two Military-Controlled Companies and 10 Individuals in Relation to the Military Coup in Myanmar