The COVID-19 pandemic may hinder the United Kingdom and the European Union from striking a deal before the Brexit transition period ends in December, potentially creating export control confusion for companies, according to a trade lawyer. The U.K. has formed sanctions regimes for its official departure from the EU, but the two sides have not made much progress on export control regulations, which could have substantial impacts on supply chains, said Ross Denton, an export control lawyer with Baker McKenzie.
The United Nations Security Council removed Ibrahim Mohamed Khalil from its ISIL (Da’esh) and al-Qaida Sanctions list, according to a March 24 press release. The UNSC said it made the decision after receiving a delisting request. Khalil is no longer subject to an asset freeze, travel ban and arms embargo.
The European Union renewed sanctions against Bosnia and Herzegovina for one year, according to a March 24 notice. The sanctions now expire March 31, 2021.
The Treasury’s Office of Foreign Assets Control made “minor technical amendments” to two Nicaragua-related general licenses, according to a March 25 notice. OFAC issued amended General License No. 1A, which authorizes certain transactions with Nicaragua by the U.S. government, and General License No. 2A, which authorizes the wind down of certain transactions involving the Nicaraguan National Police.
Global sectoral sanctions should be suspended during the COVID-19 pandemic to ease pressures on health sectors in heavily sanctioned countries, United Nations High Commissioner for Human Rights Michelle Bachelet said March 24. Sanctions will impede medical efforts in countries subject to strict sanctions, such as Iran, Bachelet said, where almost any transaction or export is heavily scrutinized. Humanitarian exemptions should “be given broad and practical effect, with prompt, flexible authorization for essential medical equipment and supplies,” she said in a statement. Bachelet said sanctions should also be suspended on Cuba, the Democratic People's Republic of Korea, Venezuela and Zimbabwe.
Countries will more strictly review transactions involving foreign direct investment as the COVID-19 pandemic continues, especially the U.S., which could increase scrutiny and export controls in the biotechnology sector, trade lawyers said. The Committee on Foreign Investment in the U.S. may increase reviews of transactions involving health care technology to keep critical virus-fighting resources in the U.S., said Aimen Mir, a trade lawyer with Freshfields Bruckhaus Deringer. Mir, who also formerly served as the Treasury Department’s deputy assistant secretary for investment security, said the pandemic will also cause CFIUS and other agencies to increasingly look to prevent transfers of pathogen-related technologies and to maintain technology leadership in the biotechnology sector.
Members of the United Kingdom’s Parliament asked Foreign Secretary Dominic Raab to include corruption as a basis for sanctioning people and entities once the U.K. leaves the European Union, according to a March 23 post on the EU Sanctions blog. In a letter to Raab, the lawmakers said the U.K.’s sanctions authority should extend beyond human rights abusers, citing U.S. and Canadian authorities that allow the countries to target corruption. “Failing to harmonise our sanctions measures with those of our allies may have far reaching unintended consequences,” the letter said.
The United Kingdom’s Office of Financial Sanctions Implementation renewed a designation under its terrorism and terrorist financing sanctions, according to a March 24 notice. OFSI renewed sanctions for Syrian national Mohammed Fawaz Khaled, who was designated for “Islamist extremist activities.”
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Companies will likely be faced with a reshuffled supply chain after the novel coronavirus COVID-19 pandemic subsides, placing greater importance on maintaining sound trade compliance programs even as business uncertainty increases, said Kerry Contini, an export control and sanctions lawyer with Baker McKenzie. As supply chain actors struggle to stay in business and as new parties enter and leave the supply chain, companies may face a host of new suppliers or customers, Contini said, a transition that will likely affect global industries on a large scale.