A Treasury Department spokesperson declined to say whether a decrease in sanctions settlements from 2019 to 2020 was due to issues caused by the COVID-19 pandemic, saying sanctions investigations are completed on a “variety of timelines.” The Treasury’s Office of Foreign Assets Control “takes its enforcement activities very seriously, and treats every matter with the care and due diligence that it deserves,” the spokesperson said in a Feb. 17 email. “These cases don’t always follow a set schedule, and we finalize cases when they’re ready and when we have all the facts and documentation necessary to draw the appropriate conclusion and finding.” The agency in 2019 settled 26 cases worth nearly $1.3 billion, compared with 16 cases totaling $23 million in 2020 (see 2102120061).
The European Union won’t hesitate to push back on U.S. extraterritorial sanctions but wants to work more closely with the Biden administration on sanctions programs to ease compliance burdens for EU companies, a top EU official said. “There is no better way to protect against extraterritorial sanctions than to align sanctions implementation with partners like the United States,” said Mairead McGuinness, an EU commissioner overseeing financial markets.
Sen. Tom Cotton, one of the most prominent China hawks in Congress, thinks that the Bureau of Industry and Security is buried within an organization “hostile to the aggressive use of export controls,” and so it should be moved from the Commerce Department to the State Department, because, he says, that department puts national security first. Cotton, who has published a lengthy report on what he calls the economic long war with China, discussed his views during an online program at the Reagan Presidential Foundation on Feb. 18.
The Office of Foreign Assets Control deleted several designations, revoked five general licenses and removed three frequently asked questions from its website to reflect the State Department’s decision last week to revoke the terrorist designation of Ansarallah (see 2102100016). The changes, which took effect Feb. 16, rescinded several general licenses that authorized humanitarian-related trade and other transactions with Yemen and Ansarallah, the Iran-backed Houthi movement (see 2101250043 and 2101190016). OFAC clarified that U.S. people and companies no longer require OFAC authorization “to engage in transactions or activities with Ansarallah, provided such activities do not involve blocked persons or otherwise prohibited activities.”
In one of its first major decisions to reverse Trump administration-imposed sanctions, the State Department will revoke its terrorism designation of Ansarallah Feb. 16. The move, which reverses the designation of the Yemen-based group also known as Houthis as a Foreign Terrorist Organization, came after the State Department said it was reviewing the humanitarian implications of the designations. The Treasury Department's Office of Foreign Assets Control in January issued several general licenses and frequently asked questions to clarify that the sanctions wouldn't impact humanitarian exports to Yemen, including those sent by international organizations (see 2101190016 and 2101250043), but the State Department said the designation could still hamper some aid delivery.
Although the Treasury’s Office of Foreign Assets Control saw a decrease in total sanctions settlements last year, the agency increased its output of sanctions guidance and advisories, shedding more light on OFAC’s compliance expectations, sanctions lawyers said. Lawyers also said the agency flexed its enforcement jurisdiction by pursuing penalties against a variety of industries beyond large commercial banks, a trend that should continue this year.
Andrea Delisi, former assistant chief counsel in the Treasury Department's Office of Foreign Assets Control, joined Morrison & Foerster in its National Security and Global Risk + Crisis Management groups, the firm announced Feb. 10. She previously advised OFAC on legal issues including the office's economic sanctions programs involving Venezuela, Syria, Iran, human rights, corruption and terrorism.
The U.S. on Feb. 11 announced sanctions and export controls targeting the Myanmar military, defense ministry and security services after it carried out a coup earlier this month (see 2102100060). The White House also issued an executive order outlining a new Myanmar sanctions regime and said more restrictions will be imposed “in the coming days.”
Export Compliance Daily is providing readers with the top stories for Feb. 1-5 in case you missed them. You can find any article by searching on the title or by clicking on the hyperlinked reference number.
A U.S. adhesive manufacturing company said it was issued a warning letter from the Treasury Department after disclosing potential violations of U.S. sanctions against Iran, according to the company’s Jan. 26 Securities and Exchange Commission filing. H.B. Fuller said customers of its subsidiaries in Turkey and India may have sold its hygiene products into Iran, which would have violated U.S. sanctions. The company said it disclosed the violations to the Office of Foreign Assets Control in 2018, and in December OFAC issued a cautionary letter with no penalty. H.B. Fuller said the transactions at the center of the potential violations represented less than 1% of the company’s 2018 net revenue.