INTERNATIONAL SANCTIONS JUNE 2020
- On 19 June 2020, Council Decision (CFSP) 2020/850 was published in the Official Journal of the European Union, amending Article 5 of Council Decision (CFSP) 2014/386.
This amendment extended the restrictive measures against Russia until 23 June 2021, in response to the illegal annexation of the Crimea and Sevastopol.
- On 30 June 2020, Council Decision (CFSP) 2020/907 amending Article 9 of Council Decision (CFSP) 2014/512 was published in the Official Journal of the European Union.
- This amendment extends the sanctions imposed on specific economic sectors in Russia until 31 January 2021, in order to reassess the Minsk Agreements aimed at consolidating peace in Ukraine.
- On 29 June 2020, Council Implementing Regulation (EU) 2020/897 and Union Implementing Decision (CFSP) 2020/898 were published in the Official Journal of the European Union, which amend Annex IV to Council Regulation (EU) 2017/2063 and Annex I to Decision (CFSP) 2017/2074, respectively.
By means of this amendment eleven (11) natural persons of Venezuelan nationality were added to the list of natural and legal persons, entities and bodies subject to restrictive measures contained in both annexes due to their participation in acts and decisions undermining democracy and the rule of law in Venezuela. Specifically, the persons added to the list would be responsible for “acting against the democratic functioning of the National Assembly, in particular by depriving a number of its members of parliamentary immunity”.
- Council Implementing Regulation (EU) 2020/730 and Council Implementing Decision (CFSP) 2020/733 were published in the Official Journal of the European Union on 3 June 2020, which amend Annex XIII to Council Regulation (EU) 2017/1509 and Annex I to Council Decision (CFSP) 2016/849,
Mediante dichas modificaciones se actualiza la información contenida en ambos anexos acerca de una (1) entidad norcoreana sujeta a medidas restrictivas, modificando los datos relativos al domicilio social.
- Council Implementing Regulation (EU) 2020/847 and Council Decision (CFSP) 2020/849 were published in the Official Journal of the European Union on 19 June 2020, which amend Annex IX to Council Regulation (EU) 2012/267 and Annex II to Council Decision (CFSP) 2010/413, respectively.
These amendments update the information concerning eight (8) natural persons and two (2) entities, all of which are of Iranian nationality, included in the abovementioned Annexes, by amending the grounds for taking restrictive measures against them.
CENTRAL AFRICAN REPUBLIC
- Council Implementing Regulation (EU) 2020/717 and Council Implementing Decision (CFSP) 2020/720 were published in the Official Journal of the European Union on 29 May 2020, which amend Annex II to Regulation (EU) 2014/224 and the Annex to Decision (CFSP) 2013/798
This amendment updates the information contained in both annexes concerning one (1) natural person of Central African nationality who is subject to restrictive measures.
- In the first week of June 2020, the Trump Administration has announced new policies aimed at separating the Cuban military from the commercial and civilian economic infrastructure of the Republic of Cuba by discouraging, restricting and prohibiting transactions with entities controlled by the aforementioned military.
Thus, the Office of Foreign Assets Control (“OFAC“) informed the company Marriott International, Inc. (“Marriott International”) that the biannual license that had been granted since 2016 to manage properties in the Republic of Cuba would end on 31 August 2020.
The reason for the end of said concession is that the only operational property of Marriott International, Four Points by Sheraton Havana, is owned by the company Gaviota, which is, in turn, a subsidiary of the Government Business Administration Group of the Republic of Cuba (GAESA), ultimately controlled by the Revolutionary Armed Forces of the Republic of Cuba (FAR).
On the other hand, the United States Department of State added the Cuba Restricted List (“CRL List”) to the financial entity CIMEX, S.A. (“FINCIMEX”), the Panamanian registered subsidiary of Corporación CIMEX S.A. (“CIMEX”) which, in turn, is a subsidiary of GAESA, the latter being an entity controlled, as mentioned above, by FAR.
As a result, effective June 19, 2020, persons and entities subject to the jurisdiction of the United States are prohibited (with certain exceptions) from collaborating with FINCIMEX.
The fact that FINCIMEX is the remittance agent in the Republic of Cuba for The Western Union Company and processes credit/debit card transactions for Mastercard Incorporated may trigger both companies to be affected by these measures.
- On October 10, 2018, Poblete Tamargo LLP (“Poblete Tamargo”), a U.S. law firm, filed a Freedom of Information Act (“FOIA“) complaint against the U.S. Department of State, in U.S. District Court for the District of Columbia, in relation to records requested more than five years ago on U.S. property claims to Cuba. Specifically, the suit is based on two requests for records, one filed in 2014 and the other in 2015, which were submitted to the State Department before the U.S. and Cuba normalized their diplomatic relations.
The Poblete Tamargo law firm was particularly interested in the records related to the application of various provisions of the Cuban Liberty and Democratic Solidarity (Freedom) Act of 1996 (“Helms-Burton Act” / “H – B Act“) and other laws related to the settlement of such pending property claims against the Government of Cuba.
Poblete Tamargo argued that the above-mentioned records will not only help promote justice and accountability for U.S. citizens harmed by the Republic of Cuba and for those who today traffic in confiscated property, but will also help U.S. taxpayers understand how the claims program has worked and how it can be improved so that future claims programs can be properly structured to better defend U.S. national and taxpayer interests.
As a result of the lawsuit filed, dated June 12, 2020, Poblete Tamargo has stated that State Department records reveal that Cuba still owes billions to U.S. taxpayers and that current property claims are not nearing resolution.
- On June 15, 2020, in connection with the lawsuit filed by Javier Garcia-Bengochea against Carnival Corporation in Florida State Court (Javier Garcia-Bengochea v. Carnival Corporation) under the Helms-Burton Act (“H – B Act“), Carnival Corporation has filed a motion to dismiss the lawsuit.
In this motion Carnival Corporation has used two arguments that it supports with factual and legal arguments: First, that Bengochea did not inherit anything under Costa Rican law, as reflected in the probate proceeding. Secondly, if Bengochea were entitled to a claim, it should be noted that the events occurred after 1996, following the publication of the H – B Act.
It should be recalled that, in the case of property confiscated before March 12, 1996, under Section 6082 (a)(4)(B) of Title 22 of the Code of the United States, no action may be brought for claims of confiscated property, unless such national had acquired the property, in this case the Port of Santiago de Cuba, prior to March 12, 1996. In this sense, Carnival Corporation pointed out that the owner of the mentioned port, on that date, was not Mr. Bengochea. Therefore, it has considered that a judgment should be issued without entering into an assessment of the merits of the case, since the material facts are not in dispute.
Finally, it should be noted that, on May 20, 2020, the judge in the case rejected a motion, filed on February 24 by two former congressmen, seeking consent to provide an Amicus Curiae brief to help interpret the H – B Act and thus support the position of the plaintiff in that process.
- On June 15, 2020, North American Sugar Industries Incorporated (“American Sugar”) sued Xinjiang Goldwind Science & Technology Co.
(“Goldwing”), Ltd., Goldwind International Holdings (HK) Ltd., DSV Air & Sea Inc., BBC Chartering USA LLC. and BBC Chartering Singapore PTE Ltd. under the H – B Act. According to the plaintiff, after the Cuban Revolution in 1960, the Cuban government illegally and unjustly expropriated all of American Sugar’s assets without receiving any compensation in return.
Since then the Cuban Government has used American Sugar’s confiscated property to further its own ends, including granting permission to for-profit businesses (“the defendants”) to use and benefit from that property. Thus, the defendants, who are engaged in wind energy businesses and transportation and shipping businesses, used or benefited financially from the use of Puerto Carupano to deliver equipment for use in the Herradura Wind Farm Project – Cuba’s largest wind energy project – with a benefit of hundreds of millions of dollars.
The present lawsuit could have a significant political burden because one of the defendants, Goldwing, is considered one of the most innovative companies in the People’s Republic of China, currently operating in 6 continents and with more than 8,000 employees.
- On June 16, 2020, in connection with the complaint filed by Exxon Mobil Corporation (“Exxon Mobil”) against Corporación CIMEX S.A., (Cuba), Corporación Cimex S.A. (Panama) and Unión Cuba-Petróleo (“CUPET”), before a federal court in Washington DC, the defendants filed a motion to dismiss the complaint.
In that motion, they argued, among other things, that the sending of remittances from the United States is a management unconnected with the traffic of confiscated property on the island and that expropriation was a permissible countermeasure in certain contexts.
It should be mentioned that the aforementioned lawsuit was filed by Exxon Mobil on May 2, 2019 against the aforementioned defendants for having operated for years the Ñico López refinery in the port of Havana, whose facilities belonged to subsidiaries of its property, with an original value of almost 72 million dollars. Exxon argues that at no time did it receive the required compensation for this fact after the nationalization of the mentioned refinery in 1960.
- On June 16, 2020, CIMEX and CUPET, based on the H – B Act, have further declared that the expropriation of Essosa was due to its refusal to refine the oil of the Cuban State, at the request of the United States, constituting a violation of the law and Cuban national security. Therefore, the plaintiff cannot prove a violation of customary international law, since it allows the taking, without compensation, of the property of a foreigner when his control or use of the property threatens the peace, security or public order of the State.
Furthermore, assuming an alleged obligation to compensate, the applicant cannot prove that Cuba did not comply with its obligations. It should be recalled that Essosa’s property was subject to Law No. 851 of 6 July 1960, which would have already provided substantial compensation but for President Eisenhower’s decision in 1960 to reduce Cuba’s annual share of world sugar imports.
The decision to impose such a ban was considered by Cuba to be part of the United States effort to overthrow the Cuban Government through a combination of armed force and economic pressures, and therefore, in its view, expropriation was a permissible countermeasure.
It should be noted that, at present, based on the H – B Act, 5,913 compensations amounting to US$ 1,902,202,284.95 have been certified by the United States Commission for the Settlement of Foreign Claims (“USFCSC“), and have yet to be resolved. The USFCSC recognized a simple interest of 6% per annum has resulted in claims currently being worth approximately USD 8.7 billion. The claim of the Texan entity Exxon Mobil would be the ninth in importance of the 5,913 certified claims mentioned.
The Republic of Cuba has recently argued, with respect to these claims, that (1) the claimant cannot demonstrate, under the Foreign Immunities Act (“FSIA“), a direct effect in the United States and (2) the court has no personal jurisdiction over the defendants; two sufficient grounds to dismiss the case and argue that there is no obligation to compensate the claimants from any country.
In any case, all this has generated great concern among those who have investments or are considering investments in Cuba, regardless of the country in which they are located.
As a reaction to all the above, a new legislative impulse is expected in the United States Congress aimed at facilitating the success of the above-mentioned claims. Specifically, it is expected that efforts will be made to amend the 1976 FSIA.
On the other hand, regardless of who wins the presidential elections on November 3, any of the candidates who are elected will be obliged to initiate a process of direct negotiation with the Diaz-Canel Administration, which will have to change the conditions of a process of expropriation of property that is already close to sixty years old, without adequate and timely compensation.
- On 25 June, OFAC added one (1) German entity to the Specially Designated Nationals List (“SDN List“) for its relationship with Iran’s sanctioned iron, steel, aluminium and copper sectors.
- On 17 June 2020 OFAC has added two (2) Austrian entities to the SDN List for their contribution to the situation in Syria.
- On June 17, 2020, OFAC has added one (1) Canadian entity to the SDN List for its ties with Bashar al-Asad.
- On June 25, 2020, OFAC, pursuant to the Iran Freedom and Counter-Proliferation Act of 2012 (“IFCA“), has added one (1) Chinese entity to the SDN List for transferring 300 metric tons of graphite to an Iranian entity on the SDN List.
INTERNATIONAL CRIMINAL COURT
- On 11 June 2020, the President of the United States of America (USA), Donald J. Trump, has issued Executive Order 13928 which blocks the property of certain persons connected with the International Criminal Court (ICC).
This order authorizes economic sanctions against ICC officials and visa restrictions, which also affect their families. These measures were taken in connection with investigations of US troops in Afghanistan.
- On June 18, 2020, OFAC, pursuant to Executive Order 13850 of November 1, 2018, added two (2) U.S. entities to the SDN List for their activities in or associated with a network that sought to evade U.S. sanctions against the Venezuelan oil sector.
UNITED ARAB EMIRATES
- On 25 June 2020 OFAC, pursuant to Executive Order 13871 of 8 May 2019, has added three (3) Emirati entities to the SDN List for their relations with Iran’s sanctioned iron, steel, aluminium and copper sectors.
- On June 2, 2020 OFAC, in accordance with Executive Order 13850 of November 1, 2018, added to the SDN List one (1) Greek entity and identified its vessel as blocked property, for the exploitation by this company of Venezuelan oil assets for the benefit of President Nicolas Maduro’s regime.
- On June 18, 2020 OFAC, pursuant to Executive Order 13850 of November 1, 2018, has added to the SDN List one (1) entity of Greek nationality and identified its vessel as blocked property for its activities in, or associated with, a network attempting to evade US sanctions on the Venezuelan oil sector.
- On 8 June 2020, OFAC amended (unspecified) the information contained in the SDN List regarding the Islamic Republic of Iran Shipping Lines (“IRISL”) and one hundred and twenty-two (122) vessels linked to it.
- On 24 June 2020 OFAC has added five (5) natural persons of Iranian nationality to the SDN List due to their links with the aforementioned IRISL and the National Iranian Tanker Company (“NITC”), both of which belong to a large shipping network directed and funded by the Islamic Revolutionary Guard Corps of Iran.
- On 25 June 2020, OFAC added three (3) Iranian entities to the SDN List, for belonging to the sanctioned sectors of iron, steel, aluminium and copper in Iran, and amended the information regarding twenty-seven (27) sanctioned entities.
- On June 2, 2020, OFAC, in accordance with Executive Order 13850 of November 1, 2018, added three (3) Marshallese entities to the SDN List and identified their respective vessels as blocked property for operating in the Venezuelan oil sector.
- On June 18 2020, OFAC, pursuant to Executive Order 13850 of November 1, 2018, has added one (1) Marshallese entity to the SDN List and identified its vessel as blocked property for its activities in, or associated with, a network attempting to evade U.S. sanctions against the Venezuelan oil sector.
- On June 17, 2020 OFAC has added one (1) Lebanese entity to the BDS List for its links with Bashar al-Assad.
- On June 18, 2020, OFAC, pursuant to Executive Order 13850 of November 1, 2018, added three (3) individuals of Mexican nationality and two (2) Mexican entities to the SDN List for their activities in, or associated with, a network attempting to evade U.S. sanctions against the Venezuelan oil sector.
- On June 16, 2020, OFAC, pursuant to Executive Order 13694 of April 1, 2015 and Executive Order 13757 of December 28, 2016, has added six (6) natural persons of Nigerian nationality to the SDN List for engaging in significant malicious cyber activities.
These activities involved targeting U.S. companies and individuals through threats and frauds, such as Business Email Compromise (“BEC“) and the fake romance scam, with which they stole over six million dollars.
- On 18 June 2020 OFAC, under Executive Order 13850 of 1 November 2018, has added one (1) British entity to the SDN List for its activities in, or associated with, a network attempting to evade US sanctions on the Venezuelan oil sector.
- On June 18, 2020, OFAC, pursuant to Executive Order 13850 of November 1, 2018, has added to the SDN List one (1) Singaporean entity for its activities in, or associated with, a network attempting to evade US sanctions on the Venezuelan oil sector.
- On June 4, 2020, OFAC published the Syria-Related Sanctions Regulations, 31 CFR, Part 569, to implement Executive Order 13894 of October 24, 2019, which blocks goods and suspends entry of certain persons contributing to the situation in Syria.
- On 17 June 2020, OFAC also added fourteen (14) natural persons of Syrian nationality and seventeen (17) Syrian entities to the SDN List for their contribution to the situation in Syria and, in some cases, “for assisting in the commission of war crimes against the Syrian population”.
 Council Decision (CFSP) 2020/850 of 18 June 2020 amending Decision (CFSP) 2014/386 concerning restrictive measures in response to the illegal annexation of the Crimea and Sevastopol.
 Council Decision (CFSP) 2020/907 of 29 June 2020 amending Decision 2014/512/CFSP concerning restrictive measures caused by actions of Russia destabilising the situation in Ukraine.
 Implementing Regulation (EU) 2020/897 of 29 June 2020 implementing Council Regulation (EU) 2017/2063 concerning restrictive measures in view of the situation in Venezuela.
 Council Decision (CFSP) 2020/898 of 29 June 2020 amending Decision (CFSP) 2017/2074 concerning restrictive measures in view of the situation in Venezuela.
 Implementing Regulation (EU) 2020/730 of 3 June 2020 implementing Council Regulation (EU) 2017/1509 concerning restrictive measures against the Democratic People’s Republic of Korea.
 Implementing Decision (CFSP) 2020/733 of 2 June 2020 amending Decision (CFSP) 2016/849 concerning restrictive measures against the Democratic People’s Republic of Korea.
 Implementing Regulation (EU) 2020/847 of 18 June 2020 implementing Council Regulation (EU) No 2012/267 concerning restrictive measures against Iran.
 Council Decision (CFSP) 2020/849 of 18 June 2020 amending Decision (CFSP) 2010/413 concerning restrictive measures against Iran.
 Implementing Regulation (EU) 2020/717 of 28 May 2020 implementing Article 17(3) of Regulation (EU) No 2014/224 concerning restrictive measures in view of the situation in the Central African Republic.
 Implementing Decision (CFSP) 2020/720 of 28 May 2020 implementing Decision (CFSP) 2013/798 concerning restrictive measures against the Central African Republic.
In Madrid, July 8, 2020
Department of International Trade and Sanctions
C/ Villanueva 29, 28001 MadridT: +34 91 436 00 90
Av. Diagonal 520, 08006 BarcelonaT: +34 93 488 28 02