The Office of Foreign Assets Control (OFAC) of the U.S. Department of Treasury has issued several significant updates to various sanctions programs over the last several weeks. Beginning during President Barack Obama’s last month in office and spilling into February, OFAC has taken several actions, seemingly in direct response to world events. Those changes to the Cyber, Iran, and Sudan sanctions are covered here.
• Cyber-related Sanctions – Just before the New Year, on December 29, 2016, then-President Barack Obama signed Executive Order 13757 (EO 13757), which sanctioned entities engaged in cyber-enabled activities that have the purpose or effect of tampering with, altering, or causing a misappropriation of information with the purpose or effect of interfering with or undermining election processes or institutions. EO 13575, which was instituted to respond to allegations that Russia had intentionally engaged in cyber-related attacks with the intent to interfere with the 2016 presidential election, listed several Russian entities and individuals as Specially Designated Nationals (SDNs). In conjunction with the issuance of this Executive Order, numerous Russian diplomats were expelled by the Department of State.
These sanctions were updated on February 2, 2017, when OFAC issued a general license (GL 1) authorizing certain transactions with Russia’s Federal Security Service (Federalnaya Sluzhba Bezopasnosti or FSB). Specifically, subject to certain restrictions, GL 1 authorizes U.S. persons to request, receive, use, or deal in licenses, permits, certifications, or notifications issued or registered by the FSB for information technology products in Russia. GL 1 also authorizes transactions or activities that are necessary and ordinarily incident to complying with law enforcement or administrative actions involving the FSB or rules administered by the FSB. As is the case with many general licenses issued within weeks after sanctions are announced, and based on the substance of the license, the general license was likely issued as a technical fix to allow U.S. telecommunications companies to continue to do business in Russia under Russian law. GL 1 should not be viewed as a shift in U.S. policy.
• Iran Sanctions – On February 3, 2017, OFAC added twenty-five individuals and entities to its SDN List. According to the White House, these parties “provide support to Iran’s ballistic missile program and to the Islamic Revolutionary Guard Corps’ Quds Force.” As we previously reported, these sanctions would likely only impact a limited number of transactions involving the newly designated parties. However, this development signals that the new administration is willing to tighten sanctions against Iran and to move swiftly to do so.
• Sudan Sanctions – On January 13, 2017, then-President Obama signed Executive Order 13761 (EO 13761) which provided for the revocation of certain Sudan-related sanctions, meaning that, subject to certain exceptions, Sudan would be open for U.S. businesses. As we previously reported, EO 13761, which becomes effective July 12, 2017, provides for the permanent revocation of sanctions imposed by E.O. 13067 and E.O. 13412, provided the Government of Sudan sustains certain “positive actions.” In conjunction with EO 13761, OFAC issued a general license, effective immediately, authorizing all transactions prohibited by the Sudanese Sanctions Regulations, including those transactions involving property in which the Government of Sudan has an interest. Transactions with any party listed as an SDN under E.O. 13400 or the South Sudan sanctions, however, remain prohibited.
Given the public statements made by President Trump regarding multiple countries around the world, and his focus on jurisdictions currently the subject of various sanctions programs (i.e. Iran, Russia, and Cuba), the United States is likely to continue to update its various sanctions programs as its foreign policy develops under the new administration.
