Sanctions Top-5 for the week ending 17 January 2020

Here are five things that happened this week in the world of economic sanctions that I think you should know about.

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1. As mentioned briefly last week, the foreign ministers of France, Germany, and the United Kingdom (aka the E3) notified Iran that they would invoke the dispute resolution mechanism under the Joint Comprehensive Plan of Action (JCPOA). The move followed Iran's announcement that it would cease complying with certain provisions of the JCPOA following the targeted killing of Iranian Major General Qasem Soleimani in a US drone strike earlier this month. (More on this below.)
2. OFAC named seven Venezuelan government officials as Specially Designated Nationals (SDNs) under Executive Order 13692 for their roles in an attempted takeover of the Venezuelan National Assembly. As mentioned two weeks ago, pro-Maduro lawmakers blocked opposition members (including US-supported Juan Guaidó) from accessing the National Assembly building during a key leadership vote, triggering an immediate response from the US State Department and US special envoy for Venezuela Elliott Abrams.
3. The UK Office of Financial Sanctions Implementation (OFSI) announced the designation of Hizballah under the UK Terrorist Asset-Freezing etc. Act 2010. UK financial sanctions previously only covered the group's military wing pursuant to EU Council Regulation (EC) No 2580/2001.
4. OFAC named two entities in North Korea and China as SDNs under Executive Order 13722 for facilitating the exportation of workers from North Korea in breach of UN Security Council resolutions.
5. According to media reports, a Finnish court has dismissed a lawsuit brought against several Nordic banks by Boris Rotenberg, a Russian businessman and SDN. As mentioned in October 2018, Rotenberg, who is not sanctioned by the EU, sued the banks for refusing to handle his transactions based on their internal compliance policies.

Comments

The JCPOA's dispute resolution mechanism consists of two paragraphs tacked on near the end of the 2015 agreement. Hypothetically, it could result in the re-imposition of some or all of the UN Security Council sanctions lifted under the JCPOA in January 2016. On the other hand, this might also be the crisis that brings all of the relevant parties back to the negotiating table. (JCPOA 2, anyone?) Meanwhile, HM Treasury's expansion of its Hizballah sanctions could signal a tougher post-Brexit UK sanctions policy.

On the other side of the Atlantic, OFAC issued FAQ 816 providing for a 90-day wind-down period for activities subject to secondary sanctions under Executive Order 13902, which targets Iran's construction, mining, manufacturing, and textiles sectors. Those terms remain largely undefined.

Bonus item: The Economist published a lengthy essay arguing that aggressive sanctions could weaken the dominance of the US dollar in international trade. (Quibble: The authors unhelpfully conflate US financial sanctions with export controls on US-origin technology. Still, food for thought.)

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(The views expressed are my own and do not constitute legal advice. Photo from Vladislav Reshetnyak.)