Things have been busy lately for United States trade sanctions programs on Burma, Russia and Iran. The last of the sanctions on Burma were lifted, new restrictions were imposed against Russia, and the Office of Foreign Assets Control both expanded permissible transactions with Iran and issued an unsettling clarification to its advice concerning the Joint Comprehensive Plan of Action.
Burmese Daze
First, the Bureau of Industry and Security removed the sanctions-related export controls applicable to Burma. As we discussed here, Executive Order 13742 (Oct. 7, 2016) finally terminated the “emergency” arising from the Burmese government’s previously nefarious activities. OFAC already removed Burmese officials and entities from the Specially Designated Nationals list.
Now, BIS too has eliminated its own license requirement for exports to those former SDNs. Additionally, Burma was removed from “membership” in Country Group D:1, thereby excluding it from many of Commerce Control List restrictions imposed for national security reasons. Burma has instead been placed in Country Group B, making it eligible for license exceptions GBS and LVS.
Burma does remain in Country Group D:3, however, subjecting it to controls imposed for chemical and biological weapon non-proliferation reasons. It also continues as an arms-embargoed destination.
Take That, Boris Badenov
Turning next to the escalating trade sanctions against Russia, BIS added twenty-three names to the Entity List on December 27, 2016, and another five on January 4, 2017. The Entity List includes parties that were found by BIS to have acted contrary to U.S. national security or foreign policy interests. Exports and reexports to such parties of items “subject to the EAR” are prohibited without a BIS license which, needless to say, is unlikely to be forthcoming under the regulatory policy of presumptive denial.
The new Entity List additions are a mix of individuals, business enterprises, Russian-flagged vessels and Russian government agencies. Included are various organizations in which previously named entities (Russian Agricultural Bank and OAO Novatek) have a majority ownership interest.
This BIS action followed OFAC’s placement of many of these same parties on the SDN list, on December 27, 2016, shown here and here. The earlier designations were based on Executive Orders 13661, 13661 and 13685, imposing sanctions on persons supposedly involved in the Ukrainian and Crimea conflicts. The later ones arose from recently-amended EO 13694. That amended order permits sanctioning of “Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities” who are “determined to be responsible for tampering, altering, or causing the misappropriation of information with the purpose or effect of interfering with or undermining election processes or institutions.”
In one more Russia-related development, BIS announced “that it will review license applications to export or reexport to Russia items subject to the EAR and controlled for chemical and biological weapons proliferation (CB), nuclear nonproliferation (NP) or national security (NS) reasons under a presumption of denial, if the items proposed for export or reexport would make a direct and significant contribution to Russia’s military capabilities.” The notice acknowledged that national security concerns already were considered in licensing decisions, thus formalizing the existing policy.
Iran Clarification
Finally, OFAC amended its Iranian Transactions and Sanctions Regulations “to expand the scope of medical devices and agricultural commodities generally authorized for export or reexport to Iran.” The changes also “provide new or expanded authorizations relating to training, replacement parts, software and services related to the operation, maintenance, and repair of medical devices, and items that are broken or connected to product recalls or other safety concerns.” The new rules were implemented under authority granted to OFAC in the Trade Sanctions Reform and Export Enhancement Act of 2000.
Now here’s one of those things that makes me wonder. On December 15, 2016, OFAC revised its guidance to address likely consequences if the Joint Comprehensive Plan of Action governing Iran’s nuclear activities is abrogated. In that case, the U.S. may “snapback” the sanctions that it suspended under the JCPOA. If those sanctions are re-imposed, the revised guidance provides for a limited, conditional 180-day grace period to wind down previously authorized activities. Publication of this revised guidance may not mean a snapback is in the cards. Given that President-elect Trump has expressed hostility to the JCPOA, however, I have to think that OFAC is making contingency plans for this possibility. The new guidance is published here, at FAQs M.4 and M.5.
