INTERNATIONAL SANCTIONS NOVEMBER 2020
• On 9 November 2020, Council Implementing Regulation (EU) 2020/1655 and Council Decision (CFSP) 2020/1657 , were published in the Official Journal of the European Union, amending both Annex I to Regulation (EU) 2019/1980 and the Annex to Decision (CFSP) 2019/1984 respectively.
The amendments extend the restrictive measures, contained in both annexes, on Turkey’s unauthorised drilling activities in the Eastern Mediterranean.
• On 6 November 2020, Council Implementing Regulation (EU) 2020/1648 and Council Decision (CFSP) 2020/1650 , were published in the Official Journal of the European Union, amending both Annex I to Regulation (EU) 2006/765 and the Annex to Decision (CFSP) 2012/642 respectively.
These amendments add fifteen (15) natural persons of Belarusian nationality, members of the Belarusian administration, to the list of persons sanctioned for their “involvement in the violent repression and intimidation of peaceful demonstrators, members of the opposition and journalists in the aftermath of the 2020 presidential elections in Belarus”.
• On 13 November 2020, the Council’s Implementing Regulation (EU) 2020/1695 , amending the annex to Regulation (EU) 2012/267 was published in the Official Journal of the European Union.
Under this amendment, one (1) Iranian entity is removed from the list of sanctioned persons.
• On 6 November 2020, Council Implementing Regulation (EU) 2020/1649 and Council Decision (CFSP) 2020/1651 , were published in the Official Journal of the European Union, amending both Annex II to Regulation (EU) 2012/36 and Annex I to Decision (CFSP) 2013/255 respectively.
By these amendments, eight (8) natural persons of Syrian nationality have been added to the list of persons sanctioned because of their recent ministerial appointments.
• On 3 November 2020, in connection with the action brought by Mario del Valle, Enrique Falla and Angelo Pou against the companies Trivago Gmbh (“Trivago”), Booking.Com B.V. (“Booking”), Grupo Hotelero Caribe S.A., Corporación de Comercio y Turismo Internacional Cubanacan S.A., Grupo de Turismo Gaviota S.A., and Expedia Inc. (“Expedia”), some of the defendants have requested, from the United States Court of Appeals (U.S.) for the Eleventh District, a dismissal of the lawsuit based on the Cuban Liberty and Democratic Solidarity (Freedom) Act of 1996 (“Helms-Burton Act” / “H-B Act”).
First, Booking considers that the order of the Court of the Eleventh District cited above dismissing the plaintiffs’ claim for lack of personal jurisdiction should be upheld by the above-mentioned Court of Appeals. It also argues that a Dutch entity with no US presence, which operates only through a website, cannot be a ground for personal jurisdiction. It concludes, therefore, that there is no point in holding a hearing and making oral arguments.
Second, Expedia submits that the plaintiffs’ action suffers from two decisive jurisdictional defects. One is the lack of personal jurisdiction, in which it argues the same arguments as Booking above, and the other is based on the fact that the federal courts have no jurisdiction in this matter. This is because the plaintiffs have no standing under Article III of the US Constitution. This is because they have not alleged facts to show that they suffered a particular injury, let alone one that is causally related to Expedia which only offers resort bookings. Instead, the applicants claim a statutory violation which the Supreme Court, as well as the Court of Appeals, has directly held not to be a de facto prejudice sufficient to give them standing. It is for these reasons that the Court has been asked to confirm the first instance ruling.
• On November 3, an article was published on Cubatrade.org that raises the question of whether Joe Biden, once elected President of the United States, will suspend the Helms-Burton Act (“H-B Act”).
The Trump Administration, on May 2, 2019, made operational the Helms-Burton Act, which authorizes the filing of lawsuits in U.S. district courts against companies and individuals who use a certified or uncertified claim when the owner of the claim has not received compensation from Cuba or a third party who is using the asset in question.
There is no consensus among attorneys, plaintiffs and defendants in H-B Act lawsuits, on whether the Biden Administration would suspend that law. However, it generally appears that most agree with the following assessments: they would have nothing to gain from the suspension with respect to the European Union (EU), where most of the non-US defendants are located, since it has not taken any significant action so far, so the Biden Administration would not have a chance of quid pro quo; furthermore there is no compelling reason not to wait for the final resolutions of the twenty-nine (29) lawsuits filed; as long as the law is active it would be a negotiating tool for the Biden Administration; and finally there is no internal political pressure to suspend it again.
• On November 9, 2020, another article has been published in Cubatrade.org on the Administration of newly elected US President Joe Biden and possible actions to be taken regarding Cuba.
In the opinion of the article, this Administration will not return in the short term to the commercial, economic and political panorama between the US and Cuba that existed before 20 January 2017. The Biden Administration will face opposition from a “larger, less porous and more media-savvy” Congress that may limit, perhaps consistently or intermittently during its four-year term, a strong new commitment to Cuba. Of great importance to the members of Congress in terms of reducing opposition to re-establishing relations with Cuba would be, among other commercial, economic and political changes, Cuba’s commitment to reducing its relations with the Nicolás Maduro Administration in Venezuela. If Cuba were to honour that commitment, the Biden Administration would have “a relatively wide margin to introduce changes in the Trump Administration’s decisions regarding the Republic of Cuba”. Although conditionality would remain, but be much more flexible, rather than rigid.
• On November 10, 2020, the new Biden Administration announced the key members of the Agency Review Teams (ARTs), responsible for assessing the operations of federal agencies, including the State Department and the Treasury Department (on which the Office of Foreign Assets Control (OFAC) is dependent), so that the incoming Biden Administration will be prepared to lead the U.S.
The ARTs are comprised of highly experienced professionals with extensive experience in key policy areas across the federal government. The teams possess a diversity of perspectives critical to addressing the most urgent and complex challenges in the U.S.
In the words of President Biden, “the work of the agency’s review teams is critical to protecting national security, addressing the current public health crisis, and demonstrating that the United States remains the beacon of democracy for the world”.
• On November 10, 2020, in connection with the currently suspended proceedings in the lawsuit previously filed by several plaintiffs who are descendants of Ramón Rodríguez Gutiérrez (“Rodríguez Family”) against Imperial Brands PLC (“Imperial Brands”); Corporación Habanos, S.A.; WPP PLC; Young and Rubicam LLC; and BCW LLC, conducted under the H-B Act, Imperial Brands has provided an update on the status of the request for authorization from the European Commission (“EC”) to act in such proceedings.
Firstly, the Commission confirmed receipt of this request and advised Imperial Brands that until it receives such authorisation it is prohibited from appearing in these proceedings. Imperial Brands then requested an update of the request before the deadline of 23 October 2020. The Commission, on 21 October 2020, informed Imperial Brands that it is considering its request and will make every effort to ensure that a decision is taken in due course.
• On November 16, 2020, an article was published in Cubatrade.org about the likely increase of “mules” transporting money from the US to Cuba because Western Union no longer provides remittance services between those countries.
The company Western Union stopped operating in Cuba on November 23rd, after the US government sanctioned the financial corporation Fincimex, which was the Cuban counterpart of the US money transfer firm. This means, as mentioned in the article, that inevitably what was the norm twenty years ago, individual passengers serving as “mules” to carry dollars (USD) on board for their families, friends, clients in Cuba, etc., will happen again. Often, “mules” can carry 10,000 USD or more.
The article continues by mentioning that waiting time in security lines at airports with flights to Cuba is likely to increase, as secondary checks are likely to be made on each passenger. The operational disruptions will affect members of the Washington, D.C.-based organization Airlines for America, which represents the ten largest airlines in the United States. It is not known to what extent an increase in “mule” traffic will affect their schedules and budgets but the impact may result in airlines choosing not to serve Cuba, or reducing their services, if they are not able to systematically schedule departures and arrivals.
He concludes by noting that Transportation Security Administration (TSA) officers, along with U.S. Customs and Border Protection (CBP) officers, may need to be specifically trained to identify violators of the binding regulations. It may also be necessary for other Miami-Dade Police Department Airport District Police officers to monitor passengers prior to screening, as there may be an increase in criminal activity in and out of Miami International Airport terminals. This could have a significant impact on the already tight budgets and staffing schedules of the TSA, CBP, Miami-Dade Police Department and OFAC, among others.
• On November 17, an article was published on the Cubatrade.org website about Cuba’s options for retaining Western Union’s electronic remittance services.
The Trump Administration prohibited U.S.-based companies from dealing with entities controlled by the Revolutionary Armed Forces (FAR) of the Republic of Cuba. Thus, the US State Department added American International Services (AIS), operated by the government of the Republic of Cuba, to the Cuban Restricted List (CRL), as well as Financiera Cimex (Fincimex), the Panama-based subsidiary of Corporación Cimex, which in turn is a subsidiary of Grupo de Administración Empresarial S.A. (GAESA), which is controlled by the FAR. Fincimex is the distribution partner in the Republic of Cuba for the company Western Union.
With the incoming Biden Administration it does not seem that there will be any changes in the CCC either, although the current limitation of $1,000 per quarter for remittances from the United States to the Republic of Cuba is expected to change.
The Republic of Cuba continues to evaluate options for Fincimex, including the sale or transfer of the subsidiary to an entity not controlled by the Government of the Republic of Cuba, such as Banco de Credito y Comercio S. A. (BANDEC), Banco Popular de Ahorro S.A. (BPA), Banco Financiero Internacional S.A. (BFI), Banco Internacional de Comercio S.A. (BICSA) or Banco Metropolitano S.A. (WB), each of which could absorb and maintain Fincimex’s operations without problems.
• On 23 November 2020 an article has been published on the Cubatrade.org website concerning three possible new appointments in the next Biden Administration and how they concern Cuba.
Pending confirmation, Mr. Antony John Blinken will be appointed US Secretary of State, Ms. Linda Thomas-Greenfield will be appointed US Permanent Representative to the United Nations and Mr. Jacob Jeremiah Sullivan will be appointed Assistant to the President for National Security Affairs. The inclusion of these three individuals in the next Biden Administration is a good indication of the return to a multi-agency approach focusing on traditional decision-making processes across the US Government.
Significantly, none of the three have ever been or are planning to become elected officials, and they are not focusing on positioning themselves for future positions, an approach that has affected previous incumbents. As far as Cuba is concerned, the inclusion of these three people should not suggest an aggressive or immediate return to the policies of the Obama administration prior to 20 January 2017 and it seems that the strategy “will be cautious”.
• On November 24, 2020, an article was published on the Cubatrade.org website about the next U.S. Secretary of the Treasury, Janet Yellen.
The article begins by mentioning that during her previous positions at the U.S. Federal Reserve, Secretary Yellen has been accustomed to supporting career civil servants. In addition, because of her academic background, she is expected to focus on macroeconomic and microeconomic issues affecting the U.S. economy, as well as work closely with the U.S. Federal Reserve and the U.S. Congress.
It is not known whether companies such as Marriott International, Western Union Company and Carnival Corporation, among others, whose operations were halted by decisions of the Trump Administration, will seek to have OFAC regulations amended by early 2021, thus revising existing OFAC licences. They may also seek the cancellation of OFAC licenses so that they can resume operations, as was permitted before Trump’s term.
He continues to stress that, in the case of the Republic of Cuba and Venezuela, the result will be continued investigations into violations of U.S. laws, including those affecting companies and individuals in the jurisdictions of the twenty-seven members of the European Union (EU), Canada, Japan, South Korea and other U.S. commercial, economic and political allies. This is because the scale of investigations conducted by OFAC career officers has been a constant during the Obama and Trump administrations, and is not expected to change.
He concludes by noting that selection decisions for high-profile foreign policy positions for President-elect Biden have been civil service in nature, with no elected politicians. This will more effectively isolate political appointments and potentially allow a greater level of proactivity because there will be fewer traditional pressure points centred on Capitol Hill that can be used to diminish or reverse decisions.
• On November 25, 2020, an article was published on Cubatrade.org that includes the statements of Secretary of State Michael R. Pompeo in Fox News about Venezuela.
The article reflects Pompeo’s opinion on what he thinks about the statements of James Mattis, former US Secretary of Defense, in which he mentioned that “In practice, “America first” has meant America alone. This has damaged the country’s ability to address problems before they reach US territory and has therefore exacerbated the danger posed by emerging threats”.
In Pompeo’s opinion “…the work we have done to build a huge coalition to go after the socialist Maduro, to go after the Cubans, these are real coalitions, real things that work. It wasn’t just the United States. It was us who did it with our friends and allies based on shared interests and a reality that recognized the central facts of what it is and not pretending that things are the way we would like them to be”.
The article mentions that President Maduro “re-elected in 2018” has not been recognised by sixty countries, out of 193 UN member states, that is 30 per cent. Those sixty “friend and ally” countries referred to by Secretary of State Pompeo are participants unwilling to support him, as they have companies committed to Cuba, as well as Venezuela, which has been threatened with sanctions by the United States.
• On November 25, 2020, the Central Bank of Cuba began to “move” to allow the return of Western Union to Cuba through the authorization of another entity other than Financiera Cimex, S.A. (Fincimex) to serve as a partner to the US transnational in the business of remittances to the island. On January 8, 2020, Resolution No. 4/2020 of the Central Bank of Cuba was published in the Official Gazette of the Republic of Cuba, cancelling the license of Fincimex and granting a new one regulating the activities of non-banking financial institutions.
This new licence appears to be aimed at the entity Servicios de Pago Red S.A. (REDSA), which requested a revision of its licence to include among its activities the management and processing of family remittances from abroad to Cuba. REDSA is the institution in charge of the administration of the Cuban ATM network and the personalisation of RED plastic cards and matrixes under the RED brand. This entity now has a period of 30 days to adapt its system to the new functions granted by the Central Bank.
With the authorisation of a civil entity such as REDSA, they would be paving the way for the re-establishment of the remittance business to Cuba through Western Union. The Biden Administration will not remove Fincimex from the OFAC blacklist, but it is assumed that it will not do anything to place REDSA on the same list either, so that the business of remittances to Cuba could be resumed as of January.
• On November 30, 2020, an article was published on the Cubatrade.org website about Jake Sullivan, who has been appointed as the new National Security Advisor to President-elect Biden, and his position on Cuba.
According to Jake Sullivan on Twitter, “We support the Cuban people in their struggle for freedom and echo the calls for the Cuban government to release peaceful protesters. The Cuban people must be allowed to exercise the universal right to freedom of expression”. The statement is a reaction to the imprisonment of human rights defender Solis Gonzalez, “who was detained and held incommunicado for three days by regime officials and who was later abruptly sentenced for a dubious crime of contempt. Following his arrest, regime officials also detained dozens of journalists and human rights defenders who were seeking information about his case or advocating for his release”.
• On 9 November 2020, OFAC, pursuant to Executive Order 13936 of 14 July 2020, added four (4) natural persons of Chinese nationality (not specified) to the Specially Designated Nationals List (“SDN List”).
• On 10 November 2020 OFAC, pursuant to the Iranian Financial Sanctions Regulations (IFSR) and the Weapons of Mass Destruction Proliferators Sanctions Regulations (NPWMD), added two (2) Chinese entities to the SDN List “for facilitating the procurement of “sensitive goods” from an entity controlled by the Ministry of Defence and Logistics of the Iranian Armed Forces, which is the coordinating entity of Iran’s ballistic missile programme”.
• On 12 November 2020, President Donald Trump signed an Executive Order prohibiting Americans from investing in Chinese companies that his administration claims are owned or controlled by the Chinese military. The order applies to thirty-one (31) Chinese companies which “allow the development and modernisation” of the Chinese army and “directly threaten” the security of the United States. Among these entities is the technological entity Huawei.
Trump’s order prohibits US investors from owning, trading in, or otherwise dealing with any securities originating from or exposed to these firms. This order also includes pension funds or shares of companies that are prohibited. Investors will have to divest their holdings in such companies by November 2021.
• On 30 November 2020 the OFAC, under Executive Order 13692 of 8 March 2015, added to the SDN List one (1) Chinese entity “for supporting the efforts of the illegitimate Maduro regime to undermine democracy in Venezuela, including its efforts to restrict Internet service, carry out digital surveillance, as well as cyber operations against political opponents”.
• On 19 November 2020 OFAC, under Executive Order 13722 of 15 March 2016, added one (1) Russian entity to the SDN List “for its involvement in the export of forced labour from North Korea”.
• On 18 November 2020, OFAC, by virtue of Executive Order 13553 of 28 September 2020 and Executive Order 13876 of 24 June 2019, added one (1) German entity to the SDN List “because it belongs to the Mustzafan Foundation of the Islamic Revolution, a huge conglomerate (…) which expropriates property from the Iranian people to be used by the Supreme Leader, Ali Khamenei, to enrich his office, reward his political allies and persecute the enemies of the regime”.
• On 10 November 2020 OFAC, under the IFSR, and the NPWMD, added to the SDN List one (1) Brunei Darussalam entity “for facilitating the procurement of “sensitive goods” from an entity controlled by the Ministry of Defence and Logistics of the Iranian Armed Forces, which is the “coordinator of Iran’s ballistic missile programme”.
• On 19 November 2020, OFAC, under Executive Order 13722 of 15 March 2016, has added one (1) North Korean entity to the SDN List for its involvement in “the export of forced labour from North Korea”.
• On 10 November 2020 OFAC, under the IFSR, and NPWMD, added two (2) natural persons and two entities, all Iranian nationals, to the SDN List “for facilitating the procurement of “sensitive goods” from an entity controlled by the Ministry of Defence and Logistics of the Iranian Armed Forces, which is the “coordinator of Iran’s ballistic missile programme”.
• On 18 November 2020, OFAC, pursuant to Executive Order 13553 of 28 September 2020 and Executive Order 13876 of 24 June 2019, added nine (9) natural persons and forty-seven (47) entities, all of which are Iranian nationals, to the BDS List, “for belonging to the Islamic Revolution Mustzafan Foundation, a huge conglomerate (…) which expropriates property from the Iranian people to be used by the Supreme Leader, Ali Khamenei, to enrich his office, reward his political allies and persecute the regime’s enemies”.
• On 17 November 2020, OFAC, pursuant to the Global Terrorism Sanctions Regulations (GTSR), added one (1) natural person of Somali nationality (not specified) to the NSR List.
• On 6 November 2020, OFAC, by virtue of Executive Order 13818 of 20 December 2017, added to the BDS List one (1) natural person of Lebanese nationality, namely the President of the Free Patriotic Movement and member of the Lebanese Parliament, “for his role in corruption in Lebanon”.
• On 9 November 2020 OFAC has added two (2) natural persons and one (1) entity to the BDS List, all of them of Lebanese nationality, “for providing support to the oil production network of the Bashar al-Assad regime”.
• On 25 November 2020 the OFAC, under Executive Order 13818 of 20 December 2017, added one (1) natural person and one (1) entity, both of Libyan nationality, to the SDN List “as they are al-Kani and the Kaniyat militia, who are responsible for the murder of civilians in numerous mass graves recently discovered in Tarhouna, as well as torture, forced disappearances and displacement of civilians”.
• On 9 November 2020 OFAC added six (6) natural persons and ten (10) entities, all of them of Syrian nationality, to the SDN List “for providing support to the oil production network of the Bashar al-Assad regime”.
• On 17 November 2020, OFAC, under the SDGT, added one (1) natural person of Somali nationality (not specified) to the SDN List.
• On 10 November 2020 OFAC, under the IFSR, and NPWMD, added two (2) natural persons and two (2) entities, all of them Taiwanese, to the SDN List “for facilitating the procurement of “sensitive goods” from an entity controlled by the Ministry of Defence and Logistics of the Iranian Armed Forces, which is the “coordinator of Iran’s ballistic missile programme”.
On 18 November 2020, OFAC, by virtue of Executive Order 13553 of 28 September 2020 and Executive Order 13876 of 24 June 2019, added one (1) Turkish entity to the SDN List for belonging to “the Mustard-fan Foundation of the Islamic Revolution, a huge conglomerate (…) which expropriates property from the Iranian people to be used by the Supreme Leader, Ali Khamenei, to enrich his office, reward his political allies and persecute the enemies of the regime”.
Madrid, 31 December 2020
Department of International Trade and Sanctions
C/ Villanueva 29, 28001 Madrid
T: +34 91 436 00 90
Av. Diagonal 520, 08006 Barcelona
T: +34 93 488 28 02