Sanctions and Export Controls News Digest - October 2024
SYSTEMIC CHANGES
EU Council Establishes New Sanctions Framework Targeting Destabilising Activities Against EU and Member States
On 8 October 2024, the EU Council announced a new framework which will allow the EU to address various hybrid threats, including i) undermining electoral processes and the functioning of democratic institutions; ii) threats against and sabotage of economic activities, services of public interest or critical infrastructure; iii) the use of coordinated disinformation, foreign information manipulation and interference; iv) malicious cyber activities, the instrumentalisation of migrants, and other destabilizing activities.
The European General Court Upholds Annulment of One Designation Ground of Moldovan Politician and Businessman
In May 2023 Vladimir Plahotniuc was designated under the EU’s Moldova sanctions regime “as a result of his serious financial misconduct in relation to public funds and the unauthorised export of capital in an unauthorised manner”. On 23 October 2024, the European General Court found that the EU had failed to verify that the decisions by Moldovan authorities to investigate and intiate criminal proceedings against Plahotniuc, on which his designation was based, were in compliance with the applicant's rights of defence and right to effective judicial protection. The Court therefore concluded that Council had failed in its obligation to state reasons and thus annulled Vladimir Plahotniuc’s designation under the Moldova regime. Plahotniuc remains designated on other grounds.
US Government Sanctions the Petroleum and Petrochemical Sectors of the Iranian Economy
On 11 October, pursuant to Executive Order (“E.O.”) 13902, the USG issued a determination designating the petroleum and petrochemical sectors of the Iranian economy as subject to US secondary sanctions. This gives the USG authority to designate non-US persons that engage in the following activities: i) Operating in the Iranian petroleum and petrochemical sectors; ii) Knowingly engaging in a significant transaction for the sale, supply, or transfer to or from Iran of significant goods or services used in connection with the petroleum and petrochemical sectors of the Iranian economy; iii) Materially assisting, sponsoring, or providing financial, material, or technological support for, or goods or services to or in support of, any persons designated as Specially Designated Nationals under EO 13902, or iv) Being owned, controlled by, or found to be acting or purporting to act on behalf of, directly or indirectly, any person designated under EO 13902. This determination was made in response to an Iranian missile strike on Israel on 1 October 2024.
Price Cap Coalition Updates Advisory for Maritime Industry
On 21 October 2024, the Price Cap Coalition, which includes G7 countries as well as the European Union, Australia, and New Zealand, issued an updated advisory for government and private sector actors involved in the global maritime industry. The update includes recommendations for stakeholders on meeting international obligations, enhancing due diligence around tanker sales, avoiding interactions with sanctioned counterparties, and raising internal awareness.
G7 Issues Guidance on Preventing Russian Export Control and Sanctions Evasion
[From September 2024] On 24 September 2024, the G7 Sub-Working Group on Export Control Enforcement issued guidance on preventing Russian evasion of export control and sanctions. The guidance includes: i) a list of items which pose a heightened risk of being diverted to Russia; ii) updated red flag indicators of potential export control and/or sanctions evasion; iii) best practices for industry to address these red flags; and iv) screening tools and resources to assist with due diligence.
DESIGNATIONS AND DESIGNATION CHALLENGES
US
In October 2024, the US Government made the following designations (among others):
- On 30 October, pursuant to E.O. 14024 the USG designated 275 individuals and entities involved in supplying Russia with advanced technology and equipment that it desperately needs to support its war machine. This includes persons in 17 jurisdictions, including India, China, Thailand, Turkey and Switzerland.
- On 17 October, pursuant to E.O. 14024, the USG designated three entities and one individual for their involvement in the development and production of Russia’s Garpiya series long-range attack unmanned aerial vehicle (UAV).
- On 16 October, pursuant to E.O. 13224, the USG designated three individuals and four associated companies involved in a Lebanon-based sanctions evasion network that generates millions of dollars in revenue for Hezbollah.
- On 10 October, pursuant to E.O. 14098, the USG designated the Rapid Support Forces Procurement Director - an individual leading efforts to supply weapons to continue the war in Sudan.
- On 1 October, pursuant to E.O. 14115, the USG designated an extremist group that has repeatedly attacked Palestinians and destroyed Palestinian homes and property in the West Bank.
- On 1 October, pursuant to E.O. 13694 (as amended), the USG designated seven individuals and two entities associated with the Russia-based cybercriminal group Evil Corp, in a tri-lateral action with the UK and Australia.
UK
In October 2024, the UK Government made the following designations (among others):
- On 29 October, six entities under the Myanmar sanctions regime for their involvement in repression of the civilian population of Myanmar by supplying aviation fuel to the Myanmar security forces.
- On 17 October, 18 Russian oil tankers and four liquified natural gas tankers maintaining Putin’s shadow fleet.
- On 15 October, one entity and six associated individuals in the Occupied Palestinian Territories under the global human rights sanctions regime. The entity is involved in the construction of illegal settler outposts and providing funding and other economic resources for Israeli settlers involved in threatening and perpetrating acts of aggression and violence against Palestinian communities in the West Bank.
- On 3 October, one bank under the Belarus sanctions regime for being involved in obtaining a benefit from or supporting the Government of Belarus by carrying on business in a sector of strategic significance to the Government of Belarus, namely the Belarusian financial services sector.
- On 1 October, 16 individuals under the Cyber sanctions regime for their connection to Evil Corp, whose malicious cyber activity involved a concerted effort to compromise UK health, government and public sector institutions, and commercial technology companies, for financial gain, undermined or was intended to undermine the integrity, prosperity and security of the United Kingdom and its allies.
IMPORT AND EXPORT CONTROLS
UK Government Oil Price Cap Investigations
On 11 October 2024, the BBC reported the results of a Freedom of Information Act (FOIA) request it made to the UK’s OFSI. According to results: i) the Treasury has opened investigations into 52 companies with a connection to the UK suspected of breaching the price cap since December 2022; ii) 37 of those investigations were live as at August 2024; and iii) 15 had concluded. As at August 2024, no fines had been handed out.
