The Office of Foreign Assets Control deleted several designations, revoked five general licenses and removed three frequently asked questions from its website to reflect the State Department’s decision last week to revoke the terrorist designation of Ansarallah (see 2102100016). The changes, which took effect Feb. 16, rescinded several general licenses that authorized humanitarian-related trade and other transactions with Yemen and Ansarallah, the Iran-backed Houthi movement (see 2101250043 and 2101190016). OFAC clarified that U.S. people and companies no longer require OFAC authorization “to engage in transactions or activities with Ansarallah, provided such activities do not involve blocked persons or otherwise prohibited activities.”
Panama recently removed five tankers from its flag registry for “sanctions-evading practices,” Lloyd’s List reported Feb. 12. One tanker participated in illegal ship-to-ship transfers of Iranian crude oil, the report said, adding that an additional 17 tankers are being investigated for failing to transmit vessel-tracking signals. The U.S. and the United Kingdom both have issued guidance warning the maritime industry of illegal shipping practices involving trade with Iran, North Korea and other sanctioned countries, which may conduct illegal ship transfers and manipulate their vessels’ automatic identification systems (see 2007290019 and 2005140039).
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Chinese telecommunications giant Huawei Technologies says federal prosecutors are withholding key evidence that could help exonerate the company from charges of bank fraud, sanctions violations, racketeering and trade secret theft. In a letter filed Feb. 7 in the U.S. District Court for the Eastern District of New York, Huawei argues that the government must turn over the exculpatory information that undermines allegations that Huawei and its CFO Meng Wanzhou defrauded numerous global financial institutions by lying about its relationship with its Iranian affiliate Skycom. In the letter, Huawei's defense team said it needs more of the government's information about Huawei's communications with these financial institutions, particularly London-based HSBC. The defense team claims that Huawei was transparent about its relationship with Skycom and that currently withheld government information could prove that.
The Combating Global Corruption Act, introduced by Sens. Ben Cardin, D-Md., and Todd Young, R-Ind., and five other Democratic senators, would require the State Department to rank all foreign countries in three tiers based on their efforts to fight corruption. The bill, introduced Jan. 22, asks the Treasury and State departments to evaluate all foreigners “engaged in grand corruption” in tier 3 countries, to see if they should have Global Magnitsky Human Rights Accountability Act sanctions against them. Congress wants an annual report of who was evaluated, who was sanctioned, and why.
In one of its first major decisions to reverse Trump administration-imposed sanctions, the State Department will revoke its terrorism designation of Ansarallah Feb. 16. The move, which reverses the designation of the Yemen-based group also known as Houthis as a Foreign Terrorist Organization, came after the State Department said it was reviewing the humanitarian implications of the designations. The Treasury Department's Office of Foreign Assets Control in January issued several general licenses and frequently asked questions to clarify that the sanctions wouldn't impact humanitarian exports to Yemen, including those sent by international organizations (see 2101190016 and 2101250043), but the State Department said the designation could still hamper some aid delivery.
Semiconductor firms are hoping to convince the Biden administration to reverse some export restrictions against Huawei as the new administration undergoes a review of China-related policies, Reuters reported Feb. 11. The companies believe significant changes are unlikely but hope to appeal to U.S. interagency panels that at least some restrictions should be lifted, the report said. The Commerce Department, which oversees the restrictions, didn’t comment. In its final weeks in office, the Trump administration issued a flurry of license denials for exports to Huawei after months of inaction on the applications, partly caused by COVID-19 pandemic-related delays (see 2101150062). Export control lawyers say they have not yet seen a shift in the Huawei licensing policy under President Joe Biden (see 2102080046).
As emerging technologies develop, governments need to expand their outreach practices beyond traditional exporters and manufacturers and also focus on universities, research institutes and investors, a February Strategic Trade Research Institute report advised. Government outreach efforts that are not modernized won’t “yield the desired compliance outcome,” the report said.
Among the potential candidates to head the Bureau of Industry and Security is James Mulvenon, a Chinese technology expert at the aerospace company SOS International, the Wall Street Journal reported Feb. 11. Mulvenon is expected to be considered for the undersecretary role along with Kevin Wolf (see 2102090060), an export controls lawyer and a former BIS official, and could bring a more hard-line stance on U.S. technology exports to China, the report said.
Although the Treasury’s Office of Foreign Assets Control saw a decrease in total sanctions settlements last year, the agency increased its output of sanctions guidance and advisories, shedding more light on OFAC’s compliance expectations, sanctions lawyers said. Lawyers also said the agency flexed its enforcement jurisdiction by pursuing penalties against a variety of industries beyond large commercial banks, a trend that should continue this year.