Trade Law

Introduction

On January 13, 2017, the Obama administration announced that it would lift sanctions imposed on Sudan issued under the Sudanese Sanctions Regulations (SSR), which are administered by the Treasury Department’s Office of Foreign Assets Control (OFAC). The action reverses nearly 20 years of U.S. policy toward Sudan, a country that had been the target of a comprehensive trade embargo due to human rights abuses and support for international terrorism. The United States has stated that its decision comes after months of bilateral engagement with Sudan, which has revealed that country’s support for key U.S. foreign policy goals, such as ceasing hostilities in conflict areas, including Darfur, and enhancing counterterrorism cooperation.

On October 7, 2016, the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) published new guidance clarifying (a) circumstances under which non-U.S. financial institutions (FFIs) may engage in U.S. dollar transactions involving Iran; (b) when residual “secondary” U.S. sanctions on Iran can affect transactions involving affiliates of Iranian Specially Designated National (SDNs); and (c) U.S. government expectations for conduct of compliance screening and due diligence in Iran-related transactions otherwise permissible under U.S. sanctions relief implemented pursuant to the Joint Comprehensive Plan of Action (JCPOA or “the Agreement”) in January 2016.

On July 29, 2016, the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) issued a new General License J (GL-J). GL-J authorizes the reexportation of certain civil aircraft on temporary sojourn to Iran, as well as related transactions involving the reexportation of spare parts, components and technology to Iran. GL-J therefore provides long-needed authorization for commercial passenger and cargo airline operators to fly into and out of Iran using aircraft subject to U.S. export controls. The authorizations contained in GL-J are subject to certain conditions, which are outlined below.

On March 24, 2016, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued General License I authorizing U.S. persons to undertake certain transactions ordinarily incident to the negotiation of, and entry into, contingent contracts for licensable activities under OFAC’s Statement of Licensing Policy for Activities Related to the Export or Re-export to Iran of Commercial Passenger Aircraft and Related Parts and Services (SLP). OFAC also updated its FAQs on sanctions relief under the Joint Comprehensive Plan of Action (JCPOA or “Iran Nuclear Deal”) to address inquiries related to General License I and provide additional guidance on license applications pursuant to the SLP. These actions reflect ongoing OFAC efforts to implement sanctions relief under the Iran Nuclear Deal (see our January 19, 2016, and January 21, 2016, alerts for further details) and to account for business realities that companies encounter in securing sales of commercial passenger aircraft and related parts and services in the Iranian market.

On January 16, 2016, the International Atomic Energy Agency (IAEA) verified, and U.S. Secretary of State Kerry confirmed, that Iran had implemented its key nuclear-related measures described in the Joint Comprehensive Plan of Action (JCPOA or the “Agreement”). This event triggered “Implementation Day” under the Agreement, which commences the suspension and/or easing of UN, U.S. and EU nuclear-related sanctions.

On November 2, 2015, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) updated the List of Medical Supplies eligible for export or reexport to Iran under the general license set forth at Section 560.530(a)(3)(i) of the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR). The updated list includes more than 60 additional items that are now eligible for export under the general license. This development provides greater opportunities for businesses to engage in permissible sales of medical equipment to Iran and should reduce the number of specific license applications required of medical device exporters.

U.S. Department of Commerce Places Export Restrictions on 29 Parties; State Department Announces Sanctions on Russian Defense Companies; EU to Extend Russia-Related Sanctions.

A. BIS Adds 29 Entities to Entity List

On September 2, 2015, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued a final rule amending the Export Administration Regulations (EAR) by adding 
29 parties to its Entity List, a restricted-party list identifying foreign persons that engage in activities contrary to U.S. national security and/or foreign policy interests. This latest action was taken in accordance with Executive Orders 13660, 13661, 13662 and 13685 to “ensure the efficacy of existing sanctions on [Russia] for violating international law and fueling the conflict in Ukraine.”

For 14 of the 29 entities added to the Entity List, BIS imposes a general license requirement for all items subject to the EAR. Accordingly, all exports, re-exports and transfers (in-country) of all restricted items to these companies require a license from BIS, and BIS will also consider such license requests with a presumption of denial. This BIS action essentially conforms the Entity List with actions against the same entities previously taken by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), designating these entities as “Specially Designated Nationals” (SDNs) under Executive Orders 13660, 13661 and 13685.

On July 30, 2015, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued a Crimea Sanctions Advisory highlighting certain practices that have been used to circumvent or evade U.S. sanctions involving Crimea and suggesting measures to mitigate Crimea sanctions risks.