A rise in U.S. secondary sanctions is increasingly leading to issues in Europe about how companies perform global sanctions compliance while simultaneously avoiding violating the European Union’s blocking regulations, trade lawyers said. Until the U.S. changes its sanctions approach -- which is possible under the Biden administration -- those disputes are expected to continue rising, the lawyers said.
The U.S. is planning a sanctions campaign to target Iranian procurement programs for drones and guided missiles, The Wall Street Journal reported July 29. The sanctions could target providers of parts used to build the drones and missiles because U.S. military officials have seen a “major increase” in the use of drones against U.S. forces, the report said. The sanctions could target Iranian import channels from Russia and China, the report said. The Treasury Department and the Office of Foreign Assets Control didn’t comment.
The U.S. may need to create new, stronger tools other than its current sanctions and export controls to penalize foreign countries that violate international laws, said Nazak Nikakhtar, former acting undersecretary of the Bureau of Industry and Security. While Nikakhtar cautioned the U.S. against overusing trade restrictions, she also said they need to be bolstered because some foreign governments and companies are “easily” circumventing them.
The U.S. should sanction China in response to the recent Chinese-led cyberattacks against dozens of companies and entities in the U.S. and abroad (see 2107190022), four Republican senators said in a July 23 letter to President Joe Biden. The U.S. should impose sanctions similar to those announced against Russia in April, the senators said. Those sanctions authorized restrictions against people and companies operating in Russia’s defense and technology sectors for cyber criminal activity (see 2104150019). “I call on you to clarify your red lines and provide transparency regarding how your Administration will act to protect the U.S. from further cyberattacks,” said Sens. Roger Marshall of Kansas, Marsha Blackburn of Tennessee, Ted Cruz of Texas and Tom Cotton of Arkansas. The White House didn’t comment.
The U.S. said it will not block the Nord Stream 2 pipeline project, a commitment meant to strengthen ties with Germany but one that frustrated U.S. lawmakers who for months have called for strict sanctions against the pipeline. While the State Department said the U.S. and Germany remain “united in their determination” to sanction Russia for “malign activities,” the Russia-backed pipeline will proceed, they said.
The Bureau of Industry and Security added six Russian entities to the Entity List for activities that threaten U.S. national security and foreign policy, the agency said in notice. The entities operate in Russia’s technology sector and support the country’s intelligence services, BIS said. The Treasury Department sanctioned all six companies in February under President Joe Biden’s executive order that targeted Russia’s defense and technology sectors and its attempts to influence foreign elections (see 2104150019). BIS also corrected one existing Russian entry on the Entity List. The rule is effective July 19.
The U.S. should impose sanctions against Russia for the Kremlin’s efforts to shelter cybercriminals responsible for a recent wave of ransomware attacks, Senate Foreign Relations Committee Chair Bob Menendez, D-N.J., said. In a July 13 letter, Menendez urged the State Department to use the Countering America’s Adversaries Through Sanctions Act provisions to impose penalties on the Russian government. “[W]ithout significant pressure from the United States and its allies,” Menendez said, “the Kremlin is unlikely to curb the cybercriminals it currently shelters.” The State Department declined to comment.
The Bureau of Industry and Security will add six Russian entities to the Entity List for activities that threaten U.S. security and foreign policy, it said in a notice released July 16. The entities, previously sanctioned by the Treasury Department under President Joe Biden’s February executive order, operate in Russia’s technology sector and support the country’s intelligence services, the agency said in the notice, which is scheduled to take effect upon publication of the notice July 19. BIS will impose a license requirement for all items subject to the Export Administration Regulations and a license review policy of presumption of denial. No license exceptions will be available. BIS also corrected one existing Russian entry on the Entity List.
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The European Council extended for six months sanctions targeting certain economic sectors of Russia for their actions in destabilizing Ukraine, according to a July 12 press release. The sanctions, which were extended until Jan. 31, 2022, were first implemented on July 31, 2014 and consist of limiting access to EU primary and secondary capital markets for particular Russian banks and companies, and blocking forms of financial assistance and brokering directed toward Russian financial entities. The sanctions also bar the trading of defense materials and dual-use goods for military use or military end-users in Russia.