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On January 14, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) announced it was imposing sanctions on a North Korean trading corporation and a China-based North Korean lodging facility for facilitating North Korea’s practice of sending laborers abroad. According to OFAC, North Korea’s continued practice of exporting North Koreans as illicit laborers is an ongoing attempt to undermine and evade United Nations Security Council Resolutions. The designated companies’ exportation of workers on behalf of the country, OFAC stated, has generated revenue for the North Korean government or the Workers’ Party of Korea. As a result of the sanctions, “all property and interests in property of these targets that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.” OFAC noted that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated persons, and warned foreign financial institutions that if they knowingly facilitate significant transactions for any of the designated individuals, they may be subject to U.S. secondary sanctions.
On January 10, the Trump administration issued new sanctions intended to deny the Iranian government revenues from the export of key economic products that may be used to fund its nuclear program. Specifically, newly-issued Executive Order 13902 authorizes the Secretary of the Treasury, in conjunction with the Secretary of State, to impose asset blocking sanctions on any person determined to operate in the construction, mining, manufacturing or textile sectors of the Iranian economy, or any additional sector as they may jointly determine. Additionally, EO 13902 authorizes the imposition of certain sanctions on any person determined to have engaged in, or any foreign financial institution determined to have knowingly facilitated, a significant transaction involving one of the aforementioned sectors of the Iranian economy.
OFAC announces anti-terrorism sanctions targeting foreign banks that transact with designated terrorists
On September 10, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) announced the designation of 15 leaders, individuals, and entities affiliated with terror groups, pursuant to the newly issued Executive Order (E.O.) 13886, “Modernizing Sanctions to Combat Terrorism,” which updates E.O. 13224. E.O. 13886 provides Treasury and the State Department with “new tools” to identify and designate perpetrators. Most notably, under E.O. 13886, foreign financial institutions are now subject to secondary sanctions, allowing OFAC to prohibit or impose strict conditions on the opening or maintaining in the U.S. of a correspondent account or a payable-through account by any foreign financial institution that knowingly facilitates a significant transaction for any Specially Designated Global Terrorist (SDGT), or a person acting on behalf of or at the direction of, or owned or controlled by, a SDGT.
As a result of the sanctions, all property and interests in property of the sanctioned targets subject to U.S. jurisdiction are blocked and must be reported to OFAC. U.S. persons are also generally prohibited from entering into transactions with designated persons. Finally, OFAC warns that persons that engage in transactions with the designated individuals “may themselves be exposed to sanctions or subject to an enforcement action.”
On August 21, President Trump issued a presidential memorandum to Secretary Betsy DeVos of the U.S. Department of Education directing the Department to implement a streamlined process to automatically discharge the federal student loan debt of totally and permanently disabled veterans (TPD discharge). The Higher Education Act currently allows veterans to seek a TPD discharge, but the “process has been overly complicated and difficult, and prevented too many  veterans from receiving the relief for which they are eligible.” The memo notes “[o]nly half of the approximately 50,000 totally and permanently disabled veterans who currently qualify for the discharge” have availed themselves of the benefit. The memo defines “federal student loan debt” as Federal Family Education Loan Program loans, William D. Ford Federal Direct Loan Program loans, and Federal Perkins Loans, and requires the Department to create a policy to facilitate the swift and effective discharge of the applicable loan. The Department is required to implement the directive “as expeditiously as possible.”
On August 5, President Trump issued Executive Order (E.O.) 13884 titled “Blocking Property of the Government of Venezuela,” which, among other things, prevents all property and interest in property of the Government of Venezuela existing within the U.S. or in the possession of a U.S. person from being transferred, paid, exported, withdrawn, or otherwise dealt in. E.O. 13884 is being issued in light of the actions of the Maduro regime, “as well as human rights abuses, including arbitrary or unlawful arrest and detention of Venezuelan citizens, interference with freedom of expression, including for members of the media, and ongoing attempts to undermine Interim President Juan Guaido and the Venezuelan National Assembly's exercise of legitimate authority in Venezuela.”
In connection with the issuance of the E.O, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued new and revised FAQs, as well as 12 amended general licenses (General Licenses 2A, 3F, 4C, 7C, 8C, 9E, 10A, 13C, 15B, 16B, 18A, 20A) and 13 new general licenses (General Licenses 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33) related to Venezuela.
Additionally, OFAC issued new guidance highlighting the U.S. government’s “commitment to the unfettered flow of humanitarian aid to the Venezuelan people.” OFAC notes that its regulations and general licenses allow U.S. persons to continue to provide humanitarian support to the Venezuelan people, including via transactions through the U.S. financial system for authorized activities. OFAC sanctions do not prohibit transactions involving the country or people of Venezuela, provided blocked persons or proscribed conduct are not involved.
For continuing InfoBytes coverage on Venezuela, including more information on blocked persons or actions, click here.
President Trump authorizes new sanctions on Russian sovereign debt; OFAC imposes prohibition on certain U.S. bank loans
On August 1, President Trump issued Executive Order (E.O.) 13883 titled “Administration of Proliferation Sanctions and Amendment of Executive Order 12851,” which authorizes sanctions on new issuances of Russian sovereign debt and directs the U.S. government to attempt to cut off international financing and forbids U.S. bank loans to governments subject to U.S. sanctions for using chemical or nuclear weapons. Among other things, E.O. 13883 allows the Secretary of the Treasury, in consultation with the Secretary of Defense, the authorization to (i) “oppose. . .the extension of any loan or financial or technical assistance to [a sanctioned] country by international financial institutions”; and (ii) “prohibit any U.S. bank from making any loan or providing any credit to the government of [a sanctioned] country, except for loans or credits for the purpose of purchasing food or other agricultural commodities or products.”
Following the issuance of E.O. 13883, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions on August 3 against the Russian Federation, which will “impos[e] a prohibition related to certain U.S. bank loans and will oppose multilateral development bank assistance to the Russian Federation.” According to OFAC, the sanctions are issued in response to Russia’s use of the “Novichok” nerve agent in the U.K. in March 2018. In order to implement the sanctions related to U.S. bank loans, OFAC issued the CBW Act Directive on August 2—scheduled to take effect August 26 following a required Congressional notification period—which “prohibits U.S. banks from participating in the primary market for non-ruble denominated bonds issued by the Russian sovereign and also prohibits U.S. banks from lending non-ruble denominated funds to the Russian sovereign.” OFAC also released a set of FAQs to provide guidance on the CBW Act Directive.
On July 31, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC), pursuant to Executive Order (E.O.) 13876, designated Iran’s foreign minister for allegedly acting on behalf of, directly or indirectly, the Supreme Leader of the Islamic Republic of Iran. As previously covered by InfoBytes, in June, the President issued E.O. 13876, which, among other things, authorizes the Secretaries of the Treasury and State Departments to impose sanctions on a foreign financial institution if it is determined the institution has knowingly conducted or facilitated any significant financial transactions for or on behalf of a blocked person. OFAC noted that additional information also indicated the Iranian foreign minister had coordinated with the IRGC-Qods Force, which is designated pursuant to terrorism and human rights authorities.
As a result of the sanctions designation, “all property and interests in property of these targets that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.” OFAC noted that persons who engage in transactions with designated individuals and entities may expose themselves to sanctions or be subject to enforcement action.
On July 19, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) sanctioned four officials of Venezuela’s General Directorate of Military Counterintelligence (DGCIM). As previously covered by InfoBytes, the DGCIM was sanctioned by OFAC on July 11, pursuant to Executive Order (E.O.) 13850, for operating in the country’s defense and security sector. According to OFAC, the designations of the four individuals were pursuant to E.O. 13692, following the arrest, physical abuse, and death of a Venezuelan Navy Captain. As a result of the designations, all property and interests in property of the designated persons within U.S. jurisdiction must be blocked and reported to OFAC. OFAC notes that its regulations “generally prohibit” U.S. persons from participating in transactions with these individuals and entities.
On July 3, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against Cuban state-run oil import and export company for continuing to provide support to the Maduro regime by the importation of oil from Venezuela. The sanctions are pursuant to Executive Order 13850. OFAC alleges that the state-run company has been the recipient of oil from Venezuela and has expanded its operations to include non-traditionally traded oil products. As a result of the sanctions, “all property and interests in property of these individuals, and of any entities that are owned, directly or indirectly, 50 percent or more by such individuals, that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC.” OFAC notes that its regulations “generally prohibit” U.S. persons from participating in transactions with these individuals and entities.
Additionally, the announcement notes that OFAC is delisting an oil tanking company in recognition of the company’s actions to ensure that its vessels are not complicit in supporting the Maduro regime. As a result of the delisting, all property and interest of the company is now unblocked and lawful transactions involving U.S. persons are no longer prohibited.
On June 27 and 28, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two Maduro regime officials and the son of Maduro for engaging in significant corruption and fraud to the detriment of the people of Venezuela. Specifically, OFAC designated the two regime officials pursuant to Executive Order (E.O.) 13692, for having previously received bribes from two Venezuelan businessmen in exchange for awarding contracts for expensive equipment to maintain Venezuelan electrical infrastructure, which were incompatible with the Venezuelan electrical system. Continued corruption and mismanagement resulted in persistent countrywide blackouts, limiting the people’s access to basic goods, services, and potable water supplies, among other things.
Additionally, pursuant to E.O. 13692, OFAC designated the son of Maduro for being a current or former official of the Government of Venezuela and a member of Venezuela’s illegitimate National Constituent Assembly, “which seeks to rewrite the Venezuelan constitution and dissolve Venezuelan state institutions, [and] was created through an undemocratic process instigated by Maduro’s government to subvert the will of the Venezuelan people.”
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