Sanctions and Export Controls News Digest - November 2024
SYSTEMIC CHANGES
UK Publishes New Oil Price Cap Guidance
On 21 November 2024, the Office of Financial Sanctions Implementation (OFSI) – the UK’s competent authority for sanctions – published an oil price cap advisory on sanctions evasion linked to product origin manipulation, after identifying shipments of Russian origin oil and oil products appearing as non-Russian through fabricated or falsified certificates of origin (CO). The advisory includes “red flags” (evasion indicators), and potential mitigation measures for UK entities. It also includes includes a template CO, and a checklist for assessing the validity of a CO.
UK Introduces Miscellaneous Amendments to Sanctions Legislation
On 14 November 2024, the UK introduced new changes to its sanctions legislation, ultimately giving OFSI greater ability to implement and enforce financial sanctions. Changes include, among others: a reporting requirement for all UK persons who hold assets which are owned, held, or controlled by a designated person (DP); expansion of the definition of relevant firms subject to financial sanctions reporting obligations to include high value dealers, art market participants, insolvency practitioners and letting agencies; and civil monetary penalty powers for breaches in relation to Russia land prohibitions.
EU Publishes Updated FAQs on the “Best Efforts” Obligation under Article 8a of Coucil Regulation (EU) 833/2014
On 22 November 2024, the EU Council published nine FAQs on the “Best Efforts” obligation, within the context of Article 8a of Coucil Regulation (EU) 833/2014. The FAQs clarify, for example, the difference between “circumventing” and “undermining”, and how EU operators can sufficiently show they undertook their best efforts.
EU Widens Restrictive Measures Targeting Iran
In light of Iran’s support of the Russian war on Ukraine, on 18 November 2024 the EU Council introduced a prohibition on the export, transfer, supply, or sale from the EU to Iran of components used in the development and production of missiles and UAVs, as well as a transaction ban prohibiting any transaction with ports and locks that are owned, operated or controlled by listed individuals and entities, or are used for the transfer of Iranian UAVs or missiles or related technology and components to Russia.
EU Parliament Adopts Resolution Regarding Russia’s Shadow Tanker Fleet
On 14 November 2024, EU Parliament adopted a resolution demanding more targeted EU sanctions against Russia’s shadow fleet in the next sanctions packages. The shadow fleet exports Russian crude oil and petroleum products abroad, undermining EU restrictive measures and ensuring a steady income for the Kremlin to continue to wage war on Ukraine. The fleet also poses risk of environmental disasters, including oil spills.
DESIGNATIONS AND DESIGNATION CHALLENGES
US
In November 2024, the US Government made the following designations (among others):
- On 21 November, pursuant to Executive Order (E.O.) 14024, Gazprombank, more than 50 internationally connected Russian banks, more than 40 Russian securities registrars, and 15 Russian finance officials. The designations aim to make it harder for the Kremlin to evade U.S. sanctions, and fund and equip its military.
- On 18 November, pursuant to E.O. 14115, an Israeli settlement development organisation involved with U.S.-sanctioned individuals and outposts that perpetrate violence in the West Bank, as well as its subsidiary.
- On 14 November, pursuant to E.O. 13224, as amended, 26 companies, individuals, and vessels associated with a Syrian conglomerate responsible for generating hundreds of millions of dollars in revenue for Iran’s Islamic Revolutionary Guard Corps-Qods Force and the Houthis through the sale of Iranian oil to Syria and China.
- On 12 November, pursuant to E.O. 14098, one individual for his leadership role in the Sudanese Rapid Support Forces (RSF) – a key party responsible for the ongoing violence against civilians in Sudan since April 2023.
UK
In November 2024, the UK Government made the following designations (among others):
- On 24 November, 30 additional ships were specified under the Russia sanctions regime.
- On 21 November, eight individuals in various countries under the Global Anti-Corruption sanctions regime for their being responsible for or engaging in serious corruption, and/or profiting financially or obtaining any other benefit from serious corruption.
- On 18 November, two entities under the Iran sanctions regime, both giving support or assistance to entities carrying on business in the Iranian defence sector, and being owned or controlled by the Government of Iran.
- On 7 November, 56 new designations with targets ranging from suppliers supporting Russia’s military production and Russian-backed mercenary groups operating in Sub-Saharan Africa, to a GRU agent involved in the use of a Novichok nerve agent in Salisbury. Overall, the package involved five new designations under the Central African Republic sanctions regime, one new designation under the Chemical Weapons sanctions regime, two new designations under the Libya sanctions regime, one new designation under the Mali sanctions regime and 46 new designations under the Russia sanctions regime.
IMPORT AND EXPORT CONTROLS
On 14 November, OFAC announced a 178,421 USD settlement with American Life Insurance Company, a subsidiary of MetLife, Inc, for its potential civil liability for 2,331 apparent violations of OFAC sanctions on Iran. ALICO was accused of providing insurance policies to entities in the United Arab Emirates owned or controlled by the Government of Iran.
On 8 November, two judgments issued by the Rotterdam District Court from October 2024 were published relating to the conviction and sentencing of an individual for export violations. The individual was found to have been exporting computer goods and software - intended for Russian end-users - via intermediaries in Kazakhstan, Kyrgyzstan and Uzbekistan. He was given a custodial sentence in the first judgment for the sanctions violations. In the second judgment, pertaining to the court’s confiscation of the proceeds of crime, it was determined the unlawfully obtained benefit – and the amount he is obliged to pay - amounted to 298,310 EUR.
