Sanctions Watch | Weekly Vol. 75

Sanctions Watch Vol 75

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

1. OFAC Issues General License 1, to Authorizing the Wind Down of Transactions with Blocked West Bank Entities

The Office of Foreign Assets Control (OFAC) has issued a General License under Executive Order 14115, authorizing certain transactions ordinarily incident and necessary for the wind-down of dealings with Amana The Settlement Movement of Gush Emunim Central Cooperative Association Ltd (Amana), Binyanei Bar Amana Ltd (BBA), or entities where Amana or BBA hold a 50 percent or greater ownership interest. This authorization is valid through 12:01 a.m. EST, January 10, 2025.

Under the General License, payments to blocked persons must be deposited into blocked, interest-bearing accounts and reported to OFAC in compliance with §501.603 of the Reporting, Procedures, and Penalties Regulations (31 CFR part 501).

However, the General License does not authorize transactions prohibited under E.O. 14115 involving other blocked persons outside of Amana, BBA, or their affiliates unless separately authorized. This measure provides a framework for regulated wind-down activities while ensuring compliance with applicable sanctions regulations.

Entities engaging in these transactions should strictly adhere to reporting and payment requirements to ensure compliance with U.S. sanctions policies.

2. UK Government Introduces Amendments Across Sanctions Regimes

On 14 November 2024, the UK Government introduced the Sanctions (EU Exit) (Miscellaneous Amendments) (No.2) Regulations 2024, implementing significant updates to strengthen the enforcement and implementation of financial sanctions. Most of the changes take effect on 5 December 2024, while the expansion of reporting obligations to high-value dealers, art market participants, insolvency practitioners, and letting agents will come into force on 14 May 2025. These amendments include a requirement for all UK persons holding assets of designated persons (DPs) to submit annual reports to the Office of Financial Sanctions Implementation (OFSI) and broaden existing obligations for firms to report suspected breaches of sanctions regulations.

The legislation introduces updates to licensing and exceptions provisions, including a new insolvency licensing purpose and a required payments exception. It also clarifies that sanctions explicitly apply to entities owned or controlled by designated persons and prohibits nominee shareholder activities involving trusts. OFSI gains enhanced enforcement capabilities, including civil monetary penalties for breaches of Russia land prohibitions, while updates to regulations aim to address uncertainties in sanctions legislation.

To reflect these changes, OFSI has updated its guidance for multiple sectors and published new materials for letting agents and insolvency practitioners. These measures will enhance industry compliance, streamline licensing processes, and strengthen the UK’s sanctions framework. Further industry engagement is planned ahead of the May 2025 reporting obligation expansion.

3. European Banking Authority Issues Final Guidance on Internal Policies and Controls for Effective Implementation of EU and National Sanctions

On 14 November 2024, the European Banking Authority (EBA) released two sets of final guidelines establishing common EU standards on governance, policies, procedures, and controls for financial institutions to ensure compliance with EU and national restrictive measures.

The first set of guidelines, issued under Directives 2013/36/EU, 2015/2366, and 2009/110/EC, is applicable to all financial institutions under the EBA’s remit. These own-initiative guidelines focus on ensuring institutions implement robust governance and risk management frameworks to mitigate risks of breaching or evading restrictive measures.

The second set of guidelines, mandated by Article 23 of Regulation (EU) 2023/1113, targets payment service providers (PSPs) and crypto-asset service providers (CASPs). It outlines specific requirements for PSPs and CASPs to ensure compliance with restrictive measures when transferring funds or crypto-assets.

Competent authorities in EU Member States must report their compliance with these guidelines within two months of their publication in official EU languages. The guidelines will become applicable from 30 December 2025.

This initiative marks a significant step in strengthening EU-wide regulatory harmonization in financial governance and risk management.

4. UN Security Council Unanimously Extends Yemen Sanctions Until November 2025

On 15 November 2024, the UN Security Council unanimously renewed its sanctions mandate on Yemen, extending targeted financial and travel restrictions on designated individuals until 15 November 2025. The decision, part of a resolution submitted by the United Kingdom, also prolongs the mandate of the Yemen Panel of Experts, tasked with monitoring and reporting on sanctions, until 15 December 2025.

Barbara Woodward, the UK envoy to the UN, stressed the importance of this renewal in supporting efforts to revive the Yemeni peace process. She highlighted that the resolution sends a strong message to the Houthis, reinforcing the need to address their destabilizing activities in the region.

The ongoing crisis in Yemen began in 2014 when Iran-backed Houthi rebels seized control of significant parts of the country, including the capital, Sanaa. In 2015, the conflict intensified with the intervention of a Saudi-led coalition, aiming to reverse Houthi advances. Since then, tens of thousands of Yemenis have lost their lives, and 14 million people face the risk of starvation, according to the UN.

The renewal of sanctions underscores the Security Council’s commitment to mitigating conflict in Yemen and addressing the humanitarian and political challenges facing the country.

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