In the second part of her Q&A with Accuity, Hdeel Abdelhady shared her thoughts on the current and potential impacts of the COVID-19 pandemic on global supply chains, sanctions, and financial crime
In guidance issued on June 5, 2020, OFAC explained that manufacturers in Iran of medicine, PPE, childcare items, and other essential supplies will be exempt from sanctions targeting Iran's manufacturing sector pursuant to EO 13902.
MassPoint Legal and Strategy Advisory PLLC's Hdeel Abdelhady discussed sanctions trends and guidance, as well as issues related to the COVID-19 pandemic, in a live event presented by the Association of Certified Financial Crime Specialists (ACFCS) and Accuity.
General License K authorizes, until 12:01 eastern time on December 20, 2019 (essentially, through the end of December 19 eastern time), the above-listed prohibited transactions where they directly or indirectly involve Cosco or entities owned 50% by Cosco and are “ordinarily incident and necessary to the maintenance or wind down of transactions.”
The imposition of sanctions on the Chinese companies and executives—particularly on units of the high-profile, state-owned COSCO at a critical juncture in the U.S.-China trade war and shortly after both countries took conciliatory steps—reinforces the Trump Administration’s stated posture of aggressively enforcing Iran secondary sanctions in furtherance of its policy objectives.
On June 21, the Office of Foreign Assets Control (OFAC) issued an interim final rule (IFR) substantially revising sanctions reporting regulations. The most significant amendment was to OFAC’s rejected transactions reporting rule, which now, for the first time, applies not just to U.S. financial institutions, but also to U.S. businesses, nonprofits, and individuals. The rule also appears to apply to foreign entities owned or controlled by U.S. persons. Public comments on the IFR are due by July 22, 2019.
MassPoint's Hdeel Abdelhady spoke with NPR about the ratcheting up of U.S. sanctions, secondary sanctions, and the potential consequences of sanctions overuse. To learn more about the mechanics of U.S. sanctions, and particularly about the role of the American dollar, financial system, and economy in extending the global reach of U.S. sanctions, read Hdeel Abdelhady's Reuters insight piece, Reimposed U.S. anti-Iran sanctions leverage American economic power.
Under amended Section 560.543 of the ISTR, individuals who are U.S. citizens and permanent residents “are authorized to engage in transactions necessary and ordinarily incident to the sale of real and personal property in Iran and to transfer the proceeds to the United States,” but only if the real and personal property was (1) “acquired before the individual became a U.S. person” or (2) was “inherited from persons in Iran.
For U.S. persons seeking to engage in permitted noncommercial, personal remittance or inheritance-related transactions, the higher risk sensitivity of some third country (and U.S.-based) financial institutions may complicate (or thwart in some cases), legal transactions. In light of this, persons seeking to engage in such legal transactions in the post-U.S. JCPOA withdrawal environment should exercise extra care in initiating and executing legal transfers with third country financial institutions.
The Treasury Department's Office of Foreign Assets Control (OFAC) today sanctioned Malaysia-based Mahan Travel and Tourism Sdn Bhd ("Mahan Travel") pursuant to Executive Order 13,224. Rather then information should be taken as a prompt to other travel agencies or vendors that directly or indirectly “act for or on behalf of Mahan Air” to disassociate from the airline. Such other travel agencies or vendors should, at minimum, review and understand today’s Mahan Travel action, assess their sanctions and related risk (legal, commercial, etc.) and take defensive compliance steps that are appropriate to their sanctions/legal exposure and commercial position. The broader takeaway from today’s OFAC action against Mahan Travel is that it reinforces the fact that U.S. sanctions and other laws are global in reach. Non-U.S. parties should take note of their potential exposure to U.S. sanctions or other legal enforcement actions.