In light of the continuing deterioration of the democracy and human rights in Venezuela, the Foreign Affairs Council of Ministers agreed on November 13 to adopt a first set of sanctions measures against Venezuela. These measures are reflected in two EU legal instruments, Council Regulation (EU) 2017/2063 of 13 November 2017 concerning restrictive measures in view of the situation in Venezuela and Council Decision (CFSP) 2017/2074 of 13 November 2017 concerning restrictive measures in view of the situation in Venezuela.

At this stage, the measures are not intended to cut off commerce with specific sectors of the economy in  Venezuela. Measures include:

  • A prohibition to sell, supply, transfer or export, directly or indirectly, goods and technology listed in the EU Common Military List, as well as equipment which may be used for internal repression as listed in Annex I of Council Regulation (EU) 2017/2063.  Related financial and technical assistance is also prohibited.
  • A prohibition to sell, supply, transfer or export, directly or indirectly, equipment, technology or software, as listed in Annex II of  Council Regulation (EU) 2017/2063. Related financial and technical assistance is also prohibited.

Continue Reading EU Adopts Initial Set of Sanctions Against Venezuela

In a panel hosted by the Atlantic Council last week, the EU Ambassador to the United States, David O’Sullivan, stated that the European Union could block US sanctions on Iran if the United States pulls out of the Joint Comprehensive Plan of Action (“JCPOA”).

The US Congress built in a requirement under the Iran Nuclear Agreement Review Act (INARA) that the President certify every 90 days that Iran is in compliance with its nuclear-related obligations under the JCPOA.  President Trump (reluctantly) made a second certification of compliance on July 17, 2017.  However, after the July certification, officials in the Trump administration said that the President believes that the Iranians have not been fully compliant. The next certification is due October 15, 2017.

As previously summarized here, if President Trump certifies that Iran is in material breach of the JCPOA or if he declines to make the certification, then the ball would pass to the US Congress.  The INARA provides for expedited congressional consideration (i.e., within 60 calendar days) of any legislation re-imposing sanctions that may be introduced in Congress.
Continue Reading EU Raises Specter of Blocking Regulation as Trump Administration Ponders JCPOA

The European Commission issued on September 13th 2017 a Proposal for a Regulation establishing a framework on the screening of foreign direct investments (FDI) into the EU. The objective of this proposal is two-fold: pushing third countries to open their domestic markets to EU investments, and protecting EU assets against foreign takeovers detrimental to the essential interests of the EU or of its Member States.  The Commission proposes to achieve this by introducing information and coordination mechanisms between the Member States’ FDI screening schemes, and giving new powers to the Commission itself to screen some FDI with EU impact. The EU Member States’ ability to screen FDI would be harmonized, and would have to be based on grounds of security and public order.

Coordination of Member States and new powers to the Commission

The proposal sets up a mechanism whereby the Member States’ authorities are required to exchange information about FDI and adopt opinions within set deadlines. A Member State will be able to provide comments on any FDI occurring in another Member State.

The proposal also gives powers to the European Commission to screen FDI that are likely to affect listed projects or programmes of Union interest on the grounds of security or public order. The result of the Commission’s screening will be consigned in opinions that will not be binding but that Member States will be required to take into due consideration.  The proposed EU non-binding consultative process would be different than US reviews of inbound FDI via the Committee on Foreign Investment in the United States.  The US process occurs at the federal level without the input of the state in which the entity receiving the investment is located, and if the Committee does not clear the transaction to proceed, the parties will most likely abandon the transaction.
Continue Reading European Commission Proposes EU-Wide Scheme for Screening Foreign Investments in the EU

The recently reported resignation of cement manufacturer LafargeHolcim’s CEO has thrown a spotlight on the risks of operating commercial activities in countries targeted by economic sanctions.[1] Without drawing any conclusions on the legal qualification of LafargeHolcim’s conduct in the specific circumstances, the following provides an overview of the principal issues at stake in this case.


In June 2016 the French newspaper Le Monde published allegations against French cement manufacturer Lafarge SA, now part of the merged Franco-Swiss entity LafargeHolcim, concerning its alleged involvement in indirectly financing terrorist groups, chief among them the jihadist so-called ‘Islamic State’ (‘ISIS’) in Syria from 2011 to 2014.

Lafarge had acquired Egyptian cement company Orascom in 2007 and, as a consequence, became involved in the operation of several factories in the Middle East. Its Syrian subsidiary’s (Lafarge Cement Syria – LCS) factory reopened only a year before violent protest, escalating into civil war, erupted in Syria in 2011. LCS’s headquarters were located in Damascus, and the factory in question in the Northern district of Raqqa, which in 2012 came under the control of armed groups and thereafter under the control of ISIS. As the armed groups and rebel forces within the region became increasingly radicalised, it is reported that weekly crisis meetings, of which Lafarge’s Parisian headquarters were apparently kept informed, became daily crisis meetings.

While expatriate employees had been evacuated by 2013, most Syrian employees remained at the factory until it was finally closed at the end of 2014. LCS faced a total of four cases of employees being kidnapped –who were eventually released upon ransom payments.
Continue Reading Between a rock and a hard place: How to ensure sanction compliance when operating a facility in a sanctions-targeted country

A couple of recent news items throw into sharp relief what we long have noted here at the International Compliance Blog—that economic sanctions are a key tool of a country’s national security and foreign policy, and can serve as an instrument by which to influence a broad array of events.

First, take a look at this photo:

President Donald Trump receives a briefing on a military strike on Syria from his National Security team

This is an official White House photo of President Trump and members of his administration receiving a top secret briefing, in the Secure Compartmentalized Information Facility (SCIF) at the President’s Mar-a-Lago estate, regarding the recent cruise missile strikes against Syria.  The New York Times, BBC, and CNN have scrutinized the photo to decipher its implications for various palace intrigues, noting which administration officials were in the room, who was not in the room, and who was seated where.

Palace intrigues aside, the photo raises an interesting question for our purposes—why were Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross in the room?

Both the Times and BBC have speculated that they were included in the briefing because they were at Mar-a-Lago to meet with Xi Jinping, the President of China, and were invited simply because they were already onsite.

But let’s consider a different view—that the Treasury and Commerce Secretaries attended because the Treasury and Commerce Departments are part of the national security apparatus of the United States. 
Continue Reading What’s in a Photo? And Thoughts on the UK Sanctions Scene

Following up on our previous post, yesterday the UK Office of Financial Sanctions Implementation (OFSI) issued regulations formally implementing the civil penalties framework set out in the Policing and Crime Act 2017.  OFSI has issued a press release, regulations regarding civil penalties, responses received to OFSI’s request for consultation regarding draft guidance

The UK’s Office of Financial Sanctions Implementation will soon issue regulations that could significantly alter the British sanctions enforcement environment, and bring it closer in line with the US’s approach to such violations.  On the heels of the newly-enacted Policing and Crime Act 2017, the regulations will introduce civil penalties for the violation of financial

On October 24, the EU announced that Liechtenstein, Norway, Montenegro, Albania, and Ukraine would renew sanctions against Russia in alignment with current EU policy.  As we have previously discussed, the EU prolonged restrictive measures against Russia in September, after determining that the situation in Ukraine did not merit a change in sanctions policy.  The

Sunday’s presidential town hall debate was the second of three opportunities for candidates Donald Trump and Hillary Clinton to make their case to the American electorate.  In addition to the discussion of personal and character issues, the candidates touched on a range of policy issues, including tax policy, financial services, energy, and international trade.  The

The Council of the European Union has decided to prolong by 6 months the application of EU restrictive measures targeting actions against Ukraine’s territorial integrity, sovereignty and independence. These sanctions consist of an asset freeze and a travel ban against 146 persons and 37 entities.  They have been extended until 15 March 2017.

The measures