The past month has seen a burst of significant economic sanctions announcements that impact international trade, from targeted measures against entities and individuals to broader restrictions affecting entire sectors. From import and export restrictions, to asset freezes and targeted sanctions, this comprehensive summary offers a concise yet insightful overview of the regulatory shifts that could impact your operations. Stay informed, stay compliant, and navigate the complex world of sanctions with confidence.
US president ends emergency order on Zimbabwe
The US President has signed Executive Order 14118, “Termination of Emergency With Respect to the Situation in Zimbabwe,” which ends the previously-declared emergency and US sanctions program against Zimbabwe. President J. Biden stated, “Although I remain concerned about Zimbabwe, especially regarding violence against political opponents and public corruption, the national emergency declared in Executive Order 13288 is no longer necessary.”
This move signifies a shift in US policy towards Zimbabwe, which had been under sanctions since 2003 due to human rights violations and undemocratic practices under its former president. Despite lifting the national emergency, the US has retained the sanctions imposed in 2001 under the Zimbabwe Democracy and Economic Recovery Act (ZDERA). These sanctions, which include travel bans and asset freezes on certain individuals and entities, will remain until the US determines that Zimbabwe has addressed key issues such as human rights abuses, corruption, and rule of law.
The removal of the emergency order may help reduce political and economic risks faced by international organizations when conducting business with Zimbabwe, leading to new trade opportunities, partnerships, improved international relations, and market expansions. Executive Order 14118 may also impact economic and market dynamics in the region, including currency exchange rates and import and export restrictions. Read more.
Joint Advisory on Compliance of Foreign-Based Persons
The U.S. Department of Justice (DOJ), the U.S. Department of Commerce’s Bureau of Industry and Security (BIS), and the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) have jointly issued a Tri-Seal Compliance Note. The note urges foreign entities to evaluate their compliance with US export controls and sanctions laws, which aim to restrict certain individuals and entities from accessing US products, technologies and services.
This is the third Collective Note issued by the three agencies to inform the private sector about enforcement trends and provide guidance to the international trade community on compliance with U.S. sanctions and export controls.
Enforcement actions by both BIS and OFAC have targeted violations by non-US entities, including reexports of US-origin items and transactions involving sanctioned parties. Violations, whether civil or willful, can result in significant penalties, even for those unaware of the violations. The US Department of Justice can pursue criminal charges, particularly if violations involve US persons or entities. Liability for past violations can extend to successor parties.
The compliance note emphasizes the broad impact of US trade controls, extending US jurisdiction to non-US entities in various ways. In light of increased enforcement, global businesses are urged to assess their exposure to these controls and implement internal measures to ensure compliance and mitigate potential penalties. Read the full announcement.
Reissued Global Magnitsky Sanctions Regulations
The Office of Foreign Assets Control (OFAC) within the Department of the Treasury has revised and reissued the Global Magnitsky Sanctions Regulations. These sanctions are designed to combat systemic corruption and human rights abuses, focusing on networks involved in sustained patterns of such behavior rather than individual incidents.
The Global Magnitsky Act empowers the U.S. government to sanction foreign government officials involved in human rights violations, freezing their assets, and barring them from entering the United States. By understanding and adhering to these regulations, businesses can demonstrate a commitment to ethical conduct and human rights. Learn more about the reissued regulations.
EFG International settlement
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has reached a settlement with EFG International AG, a Switzerland-based global private banking group. EFG will pay $3,740,442 to resolve potential civil liability for processing 873 securities transactions that appeared to violate the Cuban Asset Control Regulations, the Kingpin Act, and Executive Order 14024. OFAC considered EFG’s voluntary disclosure and found the violations to be non-egregious.
The announcement highlights the significant risks and consequences of violating sanctions programs administered by the Office of Foreign Assets Control (OFAC), including the importance of risk-based controls to prevent inadvertent violations, financial restrictions and impacts, and the need for routine screening of customer information and ongoing due diligence to identify potential sanctions risks. Read the full OFAC announcement.
Imposition of Restrictions on Certain Persons Identified on SDN list
The Bureau of Industry and Security (BIS) within the Department of Commerce recently implemented a final rule that modifies the end-user controls outlined in the Export Administration Regulations (EAR). The changes involve adding new end-user controls and, in some instances, broadening existing ones. These controls specifically target individuals included on the List of Specially Designated Nationals and Blocked Persons (SDN List), managed by the Office of Foreign Assets Control (OFAC) within the Department of the Treasury.
Understanding and complying with these regulations is crucial for international organizations that are conducting business across borders, especially those involved in exporting goods or technology. Learn more about Export Administration Regulations End-User Controls.
The BIS has also recently updated its freight forwarder guidance and best practices, which you can learn more about via this announcement.
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