Global Trade & Foreign Policy Insights

On August 20, the U.S. government took a number of actions against Russian oil pipelines Nord Stream 2 and TurkStream, including heightening sanctioned activities related to the construction of those pipelines and adding several individuals, entities, and vessels to the Office of Foreign Assets Control’s (OFAC) Specially Designated Nationals and Blocked Persons List (SDN List).

On August 7, 2020, the United States Department of the Treasury imposed new sanctions on eleven officials said to be “undermining Hong Kong’s autonomy and restricting the freedom of expression or assembly of the citizens of Hong Kong.” The new additions to the Specially Designated Nationals (SDN) list come just a month after Beijing passed a national security law that implemented new national security measures, gave Beijing significantly more influence in Hong Kong, and the U.S government says severely restricted the autonomy and independence of Hong Kong.

On June 30, 2020, the People’s Republic of China (PRC) passed the “Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region” (National Security Law), implementing new national security measures in Hong Kong, which previously fell outside of PRC’s jurisdiction based on the “one country, two systems” principle in place since Hong Kong’s return to China from the United Kingdom in 1997.

As a result of the enactment of the National Security Law, on July 14, President Trump signed into law the Hong Kong Autonomy Act (HK Autonomy Act) and simultaneously issued Executive Order 13936, on Hong Kong Normalization (HK Normalization E.O.) that implements many of its provisions. 

The U.S. State Department (State) previewed on March 9, 2020, new U.S. Government economic sanctions compliance measures that will have a substantial effect on the worldwide maritime industry. The measures were set out by David Peyman, the Deputy Assistant Secretary (DAS) of State for Counter Threat Finance and Sanctions in an interview at the Foundation for Defense of Democracy.

On December 31, 2019, the Court in the Northern District of Texas vacated the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) $2 million penalty against Exxon Mobil Corporation (Exxon). In its Order, the Court concluded that Plaintiffs, Exxon, lacked fair notice that their conduct was prohibited.

On December 13, 2019, the U.S. Department of Justice (DOJ) announced the release of a revised policy for business organizations regarding voluntary disclosures of export control and sanctions violations (VSD Policy) where there are potentially “willful” violations. The updated policy is intended to incentivize businesses to voluntarily self-disclose any such potentially willful violations and to cooperate fully with the government. The revised policy also reflects a recent push from government organizations to foster a greater public-private partnership to promote national security.

On October 24, 2019, the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License K in connection with the U.S. sanctions on Iran.

On Thursday, October 24, 2019, Behrooz Behroozian, of Columbus, Ohio, pleaded guilty to all counts as alleged for violation of U.S. sanctions on Iran.

Merely a week after sanctioning various departments of the Turkish government over actions related to the conflict in Syria, the U.S. government has now removed such sanctions.

On October 14, 2019, President Trump issued an Executive Branch Order “Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Syria” (the “E.O.”) targeting the Turkish Government for the recent military offensives into northeast Syria.

On September 9, the U.S. Department of the Treasury Office of Foreign Assets Control (OFAC) issued General License 34 (GL 34) authorizing transactions involving certain Government of Venezuela persons.

On July 26, 2019, President Trump issued an Executive Order giving the Department of the Treasury, in consultation with the Department of State, the authority to sanction individuals who are responsible for or complicit in actions that exacerbate the deteriorating situation in Mali.

Currently, five U.S. companies can transact with PdVSA subject to a general license. The general license permitting such transactions was set to expire on July 27, but on July 26 the U.S. Department of Treasury for the Office of Foreign Assets Control extended the authorization through 12:01 AM eastern time, October 25, 2019. For now, it seems that Venezuela’s oil industry has avoided another debilitating hit.

In one of a series of escalating encounters between the U.S. and Iran, on July 18, the President announced that the U.S. Navy had shot down an Iranian drone in the Strait of Hormuz when the drone allegedly came within around 1,000 yards of a Navy vessel.

Despite the fact that the sanctions imposed on North Korea, both by the United States and the United Nations, are among the most restrictive in the world, the government in North Korea continues to obtain goods – even certain luxury goods specifically controlled under those sanctions programs.

In an increasingly global market, exporters need to remain diligent in monitoring both their supply chains and their customers for red flags associated with the diversion of products (especially those controlled for export on the Commerce Control List).