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On February 10, 2022, the UK government laid before parliament The Russia (Sanctions) (EU Exit) (Amendment) Regulations 2022 (SI 2022/123) (Amended Regulations).  The Amended Regulations, which came into force on the same day, expand the scope of the UK’s Russia sanctions regime by significantly broadening the range of individuals, businesses and other entities that the UK can sanction in the event of further Russian aggression against Ukraine.  The Amended Regulations include an innovative designation criterion designed to target individuals and entities of significance to the Kremlin.  Companies that are subject to UK sanctions jurisdiction and have exposure to Russia should familiarize themselves with the expanded scope of the UK’s Russia sanctions regime as part of their efforts to assess and mitigate the risks associated with possible sanctions against Russia.

For more information on potential Russia-related UK, EU, and US sanctions, see our earlier blog posts here and here. Visit this link to sign up to receive a recording of Steptoe’s recent webinar “Possible Sanctions Against Russia: What You Need to Know.”…

Continue Reading New Regulations Expand UK’s Russia Sanctions Powers

HM Treasury’s Office of Financial Sanctions Implementation (OFSI) has published a revised version of its Monetary penalties for breaches of financial sanctions guidance (Guidance), which came into force on January 28, 2022.  The new Guidance will be used to assess any potential financial sanctions breaches of which OFSI becomes aware on or after that date.…

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 8, 2021, the US Treasury Department’s Office of Foreign Assets Control (OFAC) announced a $133,860 settlement with an unnamed individual for apparent violations of the Iranian Transactions and Sanctions Regulations (ITSR). According to OFAC’s settlement notice, the individual, who was located in the United States, received four payments in his personal bank account on behalf of an Iranian company for the sale of Iranian-origin cement clinker to a company in a third country.

OFAC also found that the individual coordinated the payment and the shipment of goods with a family member at the Iranian company. The settlement notice remarks that, although the payments involved a family member, they fell outside of the general license for personal remittances, at 31 CFR § 560.550, which only applies to “noncommercial” activity.…

Continue Reading OFAC Enters into Rare Settlement with Individual over Iranian Payments and Facilitation

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

The World Bank Group (the Bank) issued its fourth joint Sanctions System Annual Report on October 18, covering the Bank’s fiscal year from July 1, 2020 through June 30, 2021. The report includes updates by the Integrity Vice Presidency (INT), the Office of Suspension and Debarment (OSD), and the Sanctions Board.

Notably, the number of…

On October 15, 2021, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued anticipated Sanctions Compliance Guidance for the Virtual Currency Industry and updated two related Frequently Asked Questions (FAQs 559 and 646).  OFAC has published industry-specific guidance for only a handful of other industries in the past two decades; the new guidance demonstrates the agency’s increasing focus on the virtual currency (VC) sector.  It also clarifies US sanctions compliance practices in ways that could lay a foundation for future OFAC enforcement actions.

OFAC’s guidance was announced as part of broader US government enforcement priorities to combat ransomware, money laundering, and other financial crimes in the virtual currency sector, as noted in the Department of Justice’s recent announcement of a National Cryptocurrency Enforcement Team.  The OFAC guidance was published in tandem with a Financial Crimes Enforcement Network (FinCEN) analysis of ransomware trends in suspicious activity reporting, but the guidance is directed at the VC industry in general and is not specific to ransomware.  A ransomware actor who demands VC may or may not be a target of OFAC sanctions, and sanctioned actors may engage in a wide variety of VC transactions that do not involve ransomware.  The recommended compliance practices in OFAC’s new guidance are focused on the full range of sanctions risks that arise from virtual currencies.…

Continue Reading OFAC Issues Compliance Guidance for the Virtual Currency Industry

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

On August 9, 2021, the United States, United Kingdom and Canada announced further coordinated sanctions to mark one year since the allegedly fraudulent 2020 Belarusian presidential election in response to the continued undermining of democracy and human rights violations by the Lukashenko regime.  The new sanctions follow the imposition by the United States, United Kingdom, European Union and Canada, on June 21, 2021, of targeted financial sanctions against dozens of individuals and entities as well as EU sectoral-style sanctions against certain sectors of the Belarusian economy, as discussed in our June 28, 2021 blog post.
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Continue Reading US, UK and Canada Announce Additional Sanctions on Belarus