The Office of Foreign Assets Control took a number of significant sanctions actions over the last week across multiple programs:
Russia-related Sanctions
- OFAC Issues General License 109: OFAC on Sept. 13 issued Russia-related General License 109, “Authorizing the Wind Down of Transactions Involving Certain Entities Blocked on September 13, 2024” and Russia-related General License 25F, “Authorizing Transactions Related to Telecommunications and Certain Internet-Based Communications.” Related to this action, OFAC published an updated, Russia-related FAQ 1040 to answer if transactions related to telecommunications and certain internet-based communications that involve persons designated pursuant to Executive Order 14024 are authorized by General License 25F. Additionally, OFAC published a rule on Updating Provisions Related to Blocking and Other Actions Related to Specific Property or Interests in Property. This rule will be final in the Federal Register on Sept. 17, 2024.
- OFAC Issues FAQ 1192 and Amends FAQ 1033: OFAC on Sept. 12 issued one new, and one amended, Russia-related Frequently Asked Questions 1033 and 1192. FAQ 1033 now includes prohibitions on software and IT services that took effect on Sept. 12 based on the IT and Software Services Determination issued on June 12. New FAQ 1192 answers what is covered by the exclusions under 3(i) and 3(ii) related to the Export Administration Regulations with respect to the June 12 determination.
Iran-related Sanctions
- OFAC Designates Network Facilitating Iran’s Transfer of Aid to Russia: OFAC on Sept. 10 designated ten individuals and six entities based in Iran and Russia, and identified four vessels as blocked property for enabling Iran’s delivery of weapons components and weapons systems, including unmanned aerial vehicles (UAVs) and close-range ballistic missiles (CRBMs), to Russia. In late 2023, Iran and Russia signed a contract for the supply of hundreds of missiles. In the summer of 2024, Russian military personnel were trained on the use of Iran’s Project 360 CBRMs by Iranian personnel, and as of early September 2024, Russia received the first shipment of these CBRMs from Iran. The Department of State is concurrently designating three entities, including Iran Air, and identified five vessels as blocked property involved in the proliferation of Iranian weapons systems to Russia. Concurrent with OFAC’s action, international partners announced measures which will prohibit Iran Air from operating in their territory, and are pursuing further designations of Iran- and Russia-based individuals, entities, and vessels involved in the transfer of Iranian lethal aid to Russia. Read more.
Venezuela-related Sanctions
- OFAC Designates Venezuelan Officials Aligned with Nicolas Maduro: OFAC on Sept. 12 designated 16 Maduro-aligned officials who obstructed a competitive and inclusive presidential election process in Venezuela and violated the civil and human rights of the people. The designated individuals include leaders of the Maduro-aligned National Electoral Council (CNE) and the Supreme Tribunal of Justice (TSJ) who impeded a transparent electoral process and the release of accurate election results, as well as the military, intelligence, and government officials responsible for intensifying repression through intimidation, indiscriminate detentions, and censorship. OFAC’s action is in response to the July 28 election where Maduro and his representatives arrested Venezuelans for exercising their political and civil rights and deployed a range of intimidation tactics to silence the opposition. Read more.
Terrorism-related Sanctions
- OFAC Sanctions Individuals, Companies and Vessels Supporting Hizballah: OFAC on Sept. 11 sanctioned three individuals, five companies, and two vessels that are involved in smuggling oil and liquified petroleum gas (LPG) to generate revenue for Hizballah. The designated network is comprised of Lebanese businessmen and companies and overseen by a senior leader of Hizballah’s finance team. The network has facilitated dozens of LPG shipments to the Government of Syria and channeled the profits to Hizballah. Illicit oil and LPG smuggling operations generate hundreds of millions of dollars for Hizballah and support the group’s terrorist activities. Read more.
- Related to this action, OFAC updated its March 2019 OFAC Advisory to the Maritime Petroleum Shipping Community to highlight risks associated with shipments to Syria. Amendments to this advisory include updates to certain deceptive shipping practices and risk mitigation measures, along with an updated annex of vessels currently identified as blocked property on OFAC’s SDN List, that have been involved in fuel shipments to Syria.
- Additionally, OFAC put on public inspection Interim Final Rule to Extend Recordkeeping Requirements from five to 10 years, consistent with the extension of the statute of limitations for violations of certain sanctions administered by OFAC.
- OFAC also put on public inspection a Comment Request for Reporting, Procedures and Penalties Regulations and Other Information Collections Maintained by OFAC for comments concerning OFAC’s information requirements.
Corruption and Human Rights Abuse Designations
- OFAC Sanctions Cambodian Tycoon and Businesses: OFAC on Sept. 12 sanctioned Cambodian businessman and senator Ly Yong Phat (Ly), his conglomerate L.Y.P. Group Co., LTD (L.Y.P. Group), and O-Smach Resort for their roles in serious human rights abuse related to the treatment of trafficked workers in online scam centers. Often, the online scammers in virtual currency schemes are themselves often victims of trafficking, including forced labor, and are subjected to physical and mental abuse. OFAC also designated Cambodia-based Garden City Hotel, Koh Kong Resort, and Phnom Penh Hotel for being owned or controlled by Ly. Read more.
- Related to this action, OFAC issued Global Magnitsky General License 8, “Authorizing Transactions Involving Certain Entities Owned by Ly Yong Phat or L.Y.P. Group Co., LTD.” Additionally, OFAC issued new FAQ 1191 to answer if OFAC’s designation allows transactions or other dealings with other entities owned by Ly or L.Y.P. Group that are not listed on OFAC’s Specially Designation Nationals and Blocked Person List (SDN List).
Illicit Drug-related Sanctions
- OFAC Sanctions Fuel Theft Network in Mexico Supporting CJNG: OFAC on Sept. 10 sanctioned nine Mexican nationals and 26 Mexico-based entities linked to a fuel theft network that generates tens of millions of dollars benefiting the Cartel Jalisco Nueva Generacion (CJNG), a violent Mexico-based drug trafficking organization responsible for a significant proportion of fentanyl and other deadly drugs trafficked into the United States. Mexico-based drug trafficking cartels such as CJNG have turned to fuel theft in recent years, resulting in billions of dollars in lost revenue to the Mexican government. Fuel theft involves thieves in Mexico (or huachicoleros) stealing fuel from Mexico’s state-owned petroleum company, Pemex, through numerous means, including illegally drilling taps into fuel pipelines, stealing from refineries, and hijacking tanker trucks. They also use bribery and violence in support of these illicit activities. Stolen fuel is then sold on the illegal market around Mexico and even in the United States and Central America. OFAC’s action was coordinated closely with the Drug Enforcement Administration and the Government of Mexico, including La Unidad de Inteligencia Financiera (UIF), Mexico’s Financial Intelligence Unit. Read more.
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