Sanctions Updates

 

Prime Minister Cameron challenges Barclays on Iran transactions

 

Prime Minister David Cameron has challenged Barclays for declining to process payments from Iran after they ceased to be prohibited in the EU following sanctions relief. He has written to Barclays stating that it was acting “in opposition to the policy of the UK government”. Barclays replied that there was “a considerable divergence in both approach and intention between the EU…and the US, where primary sanctions remain in place”, and that “as we offer banking services through our US operations we are required to continue to restrict business activity with Iran”.

 In January, Chief Executive of the British Bankers’ Association Anthony Browne said that “International banks are likely to need considerably more clarity from US authorities… before engaging with Iran”, reflecting what is said to be the position of many UK banks – that they still face substantial compliance risks while most US sanctions on the country remain in force.

Asset freeze on Vice PM of Ukraine lifted

HM Treasury has published a notice confirming that an EU asset freeze against Raisa Bohatyriova, politician and former Vice Prime Minister of Ukraine, has been lifted, following the publication of Council Implementing Regulation (EU) 2016/311.  The Regulation and related Decision extended asset freezes by 1 year against 16 people listed for allegedly misappropriating Ukrainian state funds, and de-listed Ms Bohatyriova after she was said to have repaid the funds she was accused of misappropriating.

US export restrictions on Chinese ZTE

 The United States has imposed export restrictions on Chinese smartphone manufacturer ZTE, prohibiting US companies from selling to it without a specific licence, and foreign companies from selling products to it which contain a significant % of US-made components.  The US Commerce Department issued a statement saying this was in response to ZTE breaching US sanctions by illicitly re-exporting controlled items to sanctioned countries, and organising  a series of shell companies for this purpose in relation to Iran.  3 such shell companies have also been designated.

The Commerce Department has said that applications for export licences to ship to ZTE will generally be denied, though ZTE is not prohibited from continuing to sell its products in the US.

 Updates to OFAC's Kingpin, Zimbabwe & Sudan lists

OFAC has designated Tanzanian national Ali Hassan and the Hassan Drug Trafficking Organization as Specially Designated Narcotics Trafficking Kingpins.  Mr Hassan is said to have used his organisation to smuggle multi-ton shipments of heroin and cocaine to Africa, Europe, Asia, and North America and bribed African government officials in order to avoid arrest and prosecution.  The US Treasury’s press release is here.

In addition, OFAC has designated Chemplex Corporation, linked to designated Industrial Development Corporation of Zimbabwe, and Zimbabwe Fertiliser Company under its Zimbabwe sanctions, and de-listed Atbara Cement Company from its Sudan sanctions.

 Yates memo applies to sanctions cases

In September 2015, the Yates memo, written by US Deputy Attorney General Sally Yates, identified 6 key steps to be taken, or already being taken, by the US Department of Justice with the intention of enhancing its efforts to identify and prosecute culpable individuals, at all levels, in corporate fraud and misconduct cases.

Now, David Laufman, chief of counterintelligence and export control at the National Security Division of the DoJ, has stated that the Yates memo will also “govern investigations and prosecutions of violations of US export control and sanctions laws by corporations and corporate officers employed by those corporations”.  Where corporate parties are involved, a decision on whether to prosecute will now take account of new factors, such as whether possible violations were disclosed voluntarily and, if so, how quickly.  In particular, the focus of the Yates memo was on prosecuting culpable individuals within corporations.

The DoJ is preparing guidance that sets out the benefits available to companies that voluntarily disclose a violation, with the maximum benefit available where there is also full cooperation and meaningful communication, as well as the kind of behaviour that would count against them.  The benefits may include non-prosecution or deferred prosecution agreements, reduced fines, and shortened periods of supervised compliance.

 EU Russia sanctions renewed for 6 months

As foreshadowed  he EU has renewed its targeted sanctions on 146 Russian people and 37 entities, designated for “undermining the territorial integrity or stability of Ukraine”. COREPER (the Committee of Permanent Representatives in the EU) today agreed to renew the measures, due to expire on 15 March 2016, for 6 months until 15 September.  A formal decision is expected to be made at the EU Council’s meeting tomorrow (10 March 2016).  The EU’s targeted Russia sanctions which list these individuals and entities are here