Sanctions Watch | Weekly Vol. 62

Sanctions Watch Vol 62

In the latest edition of our Sanctions Watch weekly digest, we present significant updates on sanction watchlists and regulatory developments.

UK Updates Guidance on Somalia Sanctions Post UNSCR 2713 (2023)

The UK has revised its guidance on Somalia sanctions following the adoption of United Nations Security Council Resolution (UNSCR) 2713 (2023). This updated guidance outlines the conditions under which licenses may be issued for the export, transfer, or supply of items listed in Annexes A and B of UNSCR 2713 (2023), particularly concerning military goods, technology, and IED components. It also details prohibitions on providing technical assistance, financial services, and brokering related to these military items.

Additionally, the guidance addresses specific derogations in UNSCR 2713 (2023) that may exempt certain activities from sanctions, such as the supply of weapons or military equipment intended for the Somali National Army or UN personnel. Applicants seeking licenses must clearly indicate if they believe these derogations apply to their case, referencing relevant paragraphs of UNSCR 2713 (2023) to support their request.

OFSI Expands Russia Sanctions FAQs with New Guidance

On 15 August, the UK’s Office of Financial Sanctions Implementation (OFSI) updated its FAQs on UK sanctions, adding 20 new questions to the Russia section. These FAQs, previously part of OFSI’s Russia sanctions guidance, are now included in the centralized FAQ guidance. They address various aspects of banking, financial, and business relationships, ensuring comprehensive compliance with UK sanctions legislation.

Key clarifications include: Russian nationals in the UK can open and maintain bank accounts if they are not designated or controlled by a sanctioned person (FAQ100); UK entities’ overseas subsidiaries must comply with the UK sanctions regime (FAQ101); expired General Licences cannot be used for lawful payments (FAQ102); transactions involving sanctioned financial institutions require OFSI authorization or a valid exception (FAQ107); and designated persons must promptly report changes in their funds to avoid civil penalties (FAQs 118 & 119).

OFAC Extends Authorization Related to PdVSA 2020 Bond with General License 5P

On August 12, 2024, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License (GL) 5P, extending the authorization related to the Petróleos de Venezuela, S.A. (PdVSA) 2020 8.5% bond. This license delays U.S. persons’ ability to enforce bondholder rights over CITGO shares, which serve as collateral for the bond, until on or after November 12, 2024. 

The new deadline replaces the previous August 13, 2024, deadline established by GL 5O. As a result, U.S. persons are still prohibited from any transactions involving the sale or transfer of CITGO shares in connection with the PdVSA bond unless OFAC specifically authorizes them. In FAQ 595, OFAC reiterates its favorable licensing policy for those seeking to restructure or refinance payments due under the PdVSA 2020 bond through a specific license.

Lithuania Intensifies Investigations into Russian and Belarusian Sanctions Violations

Lithuanian authorities are currently handling over 50 pre-trial investigations into sanctions violations, targeting both Russian and Belarusian sanctions. In a recent interview, Lithuania’s Prosecutor General revealed that one investigation involves suspected arms smuggling, which has been referred to court for prosecution. Additionally, Lithuania’s Financial Crime Investigation Service reported that seven individuals and four companies are under suspicion for unlawful exports to Russia, totaling nearly €2 million. This investigation has included searches of 18 premises. Allegations suggest that the unlawful exports were concealed through false declarations of goods and destinations, with shipments purportedly going to Turkey, Kazakhstan, Uzbekistan, and Belarus. Details on the other ongoing investigations remain undisclosed.

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Sanctions Watch is a weekly recap of events and news related to sanctions around the world.