This month saw a renewed focus on Iran by OFAC, the EU and OFSI with all three bodies marking International Women’s Day by announcing measures targeting elements of the Iranian state responsible for gender-based violence, as well military figures in South Sudan, Syria and elsewhere. The measures were followed by a raft of additional OFAC designations targeting entities involved in Iran’s UAV program.
Other designations this month included the listing by OFAC of some additional individuals and entities in Bosnia & Herzegovina under its Western Balkans program, and in Belarus under its programme targeting its automotive sector. OFSI imposed new measures targeting military adjacent entities in Burma deemed to be responsible for violence against civilians.
International Women’s Day Designations
- To mark International Women’s Day on 8th March, OFAC, OFSI and the EU all imposed new designations on individuals and entities deemed to have engaged in violence or repression specifically targeting women and girls. The EU made twelve such designations under its human rights programme, including two prominent Taliban ministers, four members of Russia’s armed forces, two south Sudanese county commissioners and a Burmese military figure, as well as Qarchak Prison in Iran and the Syrian Republican Guard.
- OFAC’s International Women’s Day designations targeted two Iranian prison officials who are alleged to have been responsible for serious human rights abuses against women and girls, as well as three Iranian companiesand their CEOs, who are said to have enabled the violent repression of peaceful protestors.
- The UK listed four individuals and one entity under its respective Iran, Syria, South Sudan and Central African Republic programs, targeting the Iranian Headquarters for Enjoining Right and Forbidding Evil, its head official, as well as military figures in Syria, South Sudan and the Central African Republic.
Iran
- In separate actions to those marking International Women’s Day, OFAC this month made extensive designations of people and entities found to have supported the manufacture of Iranian drones and the evasion US sanctions on Iran. OFAC designated a China-based network of five entities and one individual said to be responsible for the sale and shipment of thousands of aerospace components, including components that can be used in UAVs, to the US-sanctioned Iran Aircraft Manufacturing Industrial Company.
- On 20th March the UK designated seven people under its Iran Human Rights program, including five members of the Islamic Revolutionary Guard Corps (”IRGC”) Co-operative Foundation Board of Directors, the body responsible for managing the IRGC’s investments, and two senior IRGC commanders operating in Tehran and Alborz provinces who are alleged to have overseen human rights violations against protestors.
- On the same day, the EU listed the Supreme Council of Cultural Revolution alongside eight people who are alleged to be responsible for serious human rights violations in Iran, including members of the judiciary said to be responsible for handing down death sentences in unfair trials and for the torturing of prisoners.
- On 23rd March, OFAC designated four Iranian and Turkish entities and three Iranian and Turkish nationalsfor their alleged involvement in the procurement of equipment, including European-origin UAV engines, in support of Iran’s UAV and weapons programs.
Other Designations
- On 15th March 2023 OFAC designated three individuals– the former Director General for Bosnia and Herzegovina’s Intelligence Security Agency, the Director of the Serb Republic Administration for Geodetic and Property Affairs, and an individual identified as allegedly one of the world’s most prolific drug traffickers – on the grounds that they constitute a threat to regional stability, institutional trust and democratic governance in the Western Balkans.
- OFAC has also expanded the scope of its sanctions measures targeting Belarus, designating nine individuals and three entities, including one of the largest manufacturers of large trucks and large dump trucks in the world, OJSC Belarussian Automobile Plant, and one of the country’s biggest automotive manufacturers, OJSC Minsk Automobile Plant. The heads of both of these entities were also designated. The announcement of the measures also included a reference to Belarussian President Lukashenko’s Boeing 737, registration number EW-001PA, which has been identified as blocked property pursuant to Lukashenko’s designation.
- Finally, the UK sanctioned Singapore-registered Shoon Energy Pte Limited, a company alleged to be profiting from the supply of aviation fuel to the Myanmar Air Force, its director Khin Phyu Win, and Tun Min Latt, director of Star Sapphire Trading Company Limited, under its Myanmar program. The FCDO has said that those listed enable the Myanmar regime to attack civilians, including through bombing campaigns.
Russia Enforcement
- The Russian Elites, Proxies, and Oligarchs Task Force – which comprises representatives from the EU, UK, US, Canada, France, Germany, Italy, Japan and Australia – published a joint statement this month announcing that its member states have collectively blocked or frozen more than $58 billion worth of sanctioned Russians’ assets. The statement went on to set out the taskforce’s broader and more strategic accomplishments, including having “immobilised” Russian Central Bank and Russian National Wealth Fund assets, convened six multilateral meetings, and led coordination efforts with other countries’ enforcement agencies.
- In the US, the Department of Justice announced the unsealing this month of a warrant for the seizure of a US-manufactured Boeing 737-7JU aircraft worth $25 million which is owned by Russian energy giant, Rosneft. The US District Court for the Eastern District of New York authorised the move, finding probable cause that the aircraft was subject to seizure based on violations of the Export Control Reform Act and US sanctions on Russia.
- French authorities have seized a €23 million villa in Saint-Jean-Cap-Ferrat in Provence that it suspects is owned by EU-sanctioned Viktor Rashnikov, according to a French press report this month. The seizure is said to have taken place in October 2022 at the request of the magistrates of the National Jurisdiction in Charge of the Fight Against Organised Crime of the Paris prosecutor’s office, after the sale of the villa was flagged to the French financial intelligence unit, TRACFIN.
- Swiss prosecutors were reported this month to have charged four employees of Gazprombank’s Swiss subsidiary, including its chief executive Roman Abdulin, in connection with the opening of bank accounts in Switzerland on behalf of Sergei Roldugin, a cellist and the godfather to President Putin’s daughter. The investigation was precipitated by a complaint lodged by Finma, Switzerland’s financial markets regulator, which itself was reportedly prompted by information obtained from the 2016 Panama Papers leak. The accounts are said to have indicated that Roldugin controlled assets worth at least $50 million and planned to transfer more than $10 million a year into Switzerland; prosecutors say that these could not plausibly be his own assets.
- The Swiss State Secretariat for Economic Affairs, known as SECO, and the body responsible for Swiss sanctions, was reported in local media on 14th March to have identified 100 cases of potential Russia sanctions violations. The cases were reported by the Federal Office for Customs and Border Security and mostly concern sanctions on goods, including luxury goods or goods of economic importance to Russia. According to SECO, criminal proceedings have been opened in 23 of these cases, the two most recent of which relate to Belarus. In 13 of the cases, criminal proceedings were dropped due to a lack of evidence. A further 60 cases remain under investigation.
Sanctions-related Legal Developments
- In March the General Court of the EU effectively annulled the sanctions levelled against Russian racing driver Nikita Mazepin pending his legal challenge to the designation, reportedly the first time the court has taken such steps on an interim basis. Mazepin was designated under the EU’s Russia program in September 2022 on the grounds that the company of which his father was Chairman is the main sponsor of his Formula 1 Team. The Court granted interim measures permitting him to enter the EU to take steps strictly necessary to negotiate his recruitment as a Formula 1 driver, provided that he undertook to race under a neutral flag.
- French media reporting this month has noted that in December 2022 a French union representing the French business bar, Avocats Ensemble, filed an application for the annulment of the EU’s ban on the provision of legal advisory services to the Government of Russia or people, entities or bodies established there. Avocats Ensemble is arguing that the EU regulation as it stands is, amongst other things, an infringement of the EU right of lawyers to provide legal advice services without specific restrictions, as well as an infringement of the European Convention on Human Rights and the European Charter of Fundamental Rights.
- An interesting judgement appearing to support the use of cash payment as a means of sanctions evasion was handed down in the Commercial Court this month in the case of UniCredit Bank vs Irish aircraft leasing business, Celestial Aviation Services. UniCredit had refused to make payment under letters of credit opened in relation to the lease of aircraft from the Irish company to Russian companies, on the basis that it would be unlawful to make payment under UK and US sanctions. The High Court found that the obligation to pay pre-dated UK sanctions related to Russian aviation and noted that, even if payment in dollars breached US sanctions, it would have been possible for UniCredit to pay by other means, i.e. cash.
