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Significant diplomatic capital has been invested by the EU, the United States, the UK and NATO in developing policies to deter Russia from invading Ukraine. Sanctions have been the main focus of discussion. EU Member States agreed in Council Conclusions that potential sanctions will include “a wide array of sectoral and individual restrictive measures that would be adopted in coordination with partners”, and UK Prime Minister Johnson stated before parliament that the UK and its allies are considering “imposing coordinated and severe sanctions, heavier than anything we have done before against Russia”.

However, what exactly such statements mean remains unclear. Furthermore, government officials have explicitly refused to give any information when asked about the details, and those who have given information did so under the condition of anonymity. To help companies plan ahead in light of such uncertainty and to help assess the risk of exposure to EU/UK sanctions, we outline below what EU/UK sanctions may be adopted, and key indicators that may influence both the severity and timing of such sanctions.…

Continue Reading Assessing Potential EU and UK Sanctions Against Russia

Economic sanctions and export controls will form a core part of any multilateral response to an escalation of Russia’s military actions targeting Ukraine. While it is not possible to predict with certainty whether an escalation will occur or what form the responsive measures would take, this blog post outlines some of the current US sanctions proposals and authorizations to assist companies in taking preliminary steps to assess their potential exposure.

As of January 2022, none of the United States, the EU, or the UK have implemented any new, significant Russia-related sanctions or export control measures concerning Russia’s recent military buildup near the Russia-Ukraine border. Based on events in 2014 and the sanctions that ensued, companies could face rapid and potentially disruptive regulatory restrictions with wide-ranging impacts on a variety of industries. Some measures could be imposed within hours of a triggering event, or even prior to a specific triggering event. The US, EU, and UK are likely to coordinate a sanctions response to some extent, but some variations across different jurisdictions’ sanctions measures are also to be expected.  According to reports, policymakers have yet to agree on the triggers for new sanctions, and diplomatic efforts are ongoing.…

Continue Reading Preparing for New Russia-Related Sanctions and Export Controls

On December 22, 2021, the US Treasury Department’s Office of Foreign Assets Control (OFAC) issued three general licenses (GLs) to authorize additional activities involving the Taliban and the Haqqani Network in Afghanistan that would otherwise be prohibited under the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), the Foreign Terrorist Organizations Sanctions Regulations, 31…

On December 15, 2021, the White House issued Executive Order (EO) 14059, “Imposing Sanctions on Foreign Persons Involved in the Global Illicit Drug Trade.”  The new EO, which implements aspects of the Fentanyl Sanctions Act of 2019 (21 U.S.C. § 2301 et seq.), could bring a significant expansion in the US government’s use of sanctions to combat narcotics trafficking.  It also builds on more than 25 years of efforts including Clinton-era sanctions against Colombian drug trafficking networks and the identification of drug trafficking organizations under the Foreign Narcotics Kingpin Designation Act.  The new EO includes innovative designation criteria geared toward the Biden administration’s goal “to modernize and update our response to drug trafficking,” as stated in the EO’s preamble.
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Continue Reading US Government Expands Counter-Narcotics Sanctions with New Executive Order on Global Illicit Drug Trade

On December 6, 2021, the US Treasury Department’s Office of Foreign Assets Control (OFAC) named one individual and 12 entities in the Democratic Republic of the Congo and Gibraltar as Specially Designated Nationals (SDNs) pursuant to the Global Magnitsky Sanctions program under Executive Order (EO) 13818.

The newly designated SDNs are part of a network of individuals and companies alleged to have provided material “support to sanctioned billionaire Dan Gertler,” who was designated under EO 13818, in December 2017, for allegedly engaging in significant corruption in the DRC mining and oil sectors. There are now 46 persons designated under EO 13813 in connection with Gertler.…

Continue Reading OFAC Sanctions DRC Associates of Sanctioned Billionaire in Conjunction with New Strategy on Countering Corruption and Global Magnitsky Designations

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