Trade and business relations between the European Union and China will likely grow more challenging in the wake of the EU’s decision to pause ratification of the Comprehensive Agreement on Investment (see 2105240023), a European policy expert said. Even so, China will likely push the EU to move forward on the deal, another expert said, as it doesn’t want a series of escalating sanctions by the two sides to continue.
Tina Chen, a resident of Las Vegas and owner of electronics and computer components exporter Top One Zone, was indicted by a federal grand jury for conspiracy to export goods from the U.S. to Iran, the Department of Justice said in a May 28 news release. Chen allegedly worked with others to purchase and ship goods from U.S. companies through entities in Hong Kong to individuals in Iran without a license from the Treasury Department's Office of Foreign Assets Control. Chen hid the identities of the end-users, DOJ alleged. She is charged with one count of conspiracy to unlawfully export goods to Iran in violation of the International Emergency Economic Powers Act and the Iranian Transactions and Sanctions Regulations -- a charge that carries a maximum penalty of 20 years in prison and a $1 million fine.
In complying with a May 25 U.S. District Court for the District of Columbia order to remove the “Communist Chinese military company” designation from Chinese consumer electronics giant Xiaomi, the Treasury Department's Office of Foreign Assets Control issued a FAQ May 27 saying that the prohibitions under the designation “do not apply with respect to Xiaomi.” The Defense Department and Xiaomi jointly moved to drop the label after District Judge Rudolph Contreras said it violated the Administrative Procedure Act and was made on insufficient evidence (see 2105120047). To date, two other companies so labeled have challenged the designation in the D.C. district court, and one, Luokung Technologies, has been granted a preliminary injunction.
The Treasury Department met with non-governmental organizations last week amid criticism that U.S. sanctions are unintentionally affecting humanitarian aid shipments (see 2105260047). Treasury Deputy Secretary Wally Adeyemo, who is leading a review of the agency’s sanctions programs (see 2105270041), met with 11 NGOs to ensure sanctions are “thoughtfully calibrated to target malign actors and activity while balancing essential humanitarian activities,” Treasury said May 27. The agency is also “closely evaluating” feedback on how sanctions are affecting human rights, corruption and persecuted minority and diaspora communities.
The Council of the European Union announced it is extending restrictive measures against the Syrian regime until June 1, 2022, a May 27 news release said. The one-year extension comes “in light of the continued repression of the civil population in the country.” The current list imposes an assets freeze and a travel ban on 283 individuals, and an assets freeze on an additional 70 entities. The measures were introduced in 2011.
China sanctioned Johnnie Moore, a former commissioner for the U.S. Commission on International Religious Freedom, for his role in publishing the State Department's 2020 report on international religious freedom, a Foreign Ministry spokesperson said at a May 26 news conference, according to a transcript in English. The report was “fraught with ideological bias,” and has “severely interfered in China's internal affairs,” the spokesperson said. Moore and his family are barred from entering mainland China, Macau and Hong Kong. The sanction is “counterproductive,” USCIRF Chair Anurima Bhargava said May 27. “It will only draw more international attention to the atrocities and horrors being perpetrated by the Chinese government against the Uyghurs, Tibetan Buddhists, Christians, Falun Gong practitioners, and countless other Chinese citizens.”
The Office of Foreign Assets Control released its Myanmar Sanctions Regulations to implement a February executive order that authorized sanctions against the country for the military-led coup earlier this year (see 2102100060). The regulations, effective June 1, were released in an “abbreviated form” to give “immediate guidance to the public,” OFAC said in a notice. The agency plans to supplement the regulations with more “interpretive and definitional guidance, general licenses, and other regulatory provisions.” The regulations include general definitions, information on blocked and exempt transactions, licensing requirements and penalties.
The U.S. and Iran will likely come to an agreement on the Iran nuclear deal as early as this summer, which could lift a range of economic sanctions on Iran, two foreign policy experts said. Although talks between the two sides have progressed over the past several weeks, the experts say it remains unclear how the sanctions will be lifted and whether a more comprehensive, revised deal will follow.
The Bureau of Industry and Security added eight entities to the Entity List for their involvement in nuclear proliferation activities and issued several other revisions, one correction and one removal from the Entity List and Military End User List. The eight entities, located in Pakistan and the United Arab Emirates, include laboratory equipment providers, engineering companies and electronics makers. They will face a license requirement for all items subject to the Export Administration Regulations, and BIS will impose a license review policy of presumption of denial. No license exceptions will be available. The changes take effect June 1.
The United Kingdom released an update relating to substantial changes made to two open general export licenses for information security items, the Department for International Trade said in a May 26 guidance. The two OGELS were amended to include China, Hong Kong and Macao as permitted destinations, however the additions have been balanced by a reduction of the list of permitted items. All items specified in Schedule 1 of the new OGEL for information security items must only use “standard encryption algorithms that have been approved or adopted by recognized international standards bodies (examples: 3GPP, ETSI, GSMA, IEEE, IETF, ISO, ITU, TIA),” and “any cryptographic functionality used by the item cannot be easily changed by the user.” Any potential exporter of these goods must register through the UK's SPIRE portal, the export control joint unit's electronic licensing system.