September 2024 saw an increase in US sanctions targeting Lebanon and Iran, with an early focus on the shipping networks of designated terrorist groups Hezbollah and the Islamic Revolutionary Guard Corps, a trend which is likely to continue into October. US designations have also continued against Russia and against international human rights abusers. The UK’s designations have focused on Iran and Russia, whilst UK Foreign Secretary David Lammy announced the suspension of 30 export licenses granted to Israel.
In the enforcement space the US and UK have handed down various fines, the largest of which being a $200 million penalty given to American aerospace and defence conglomerate RTX Corporation to settle 750 charges of export control violations. The US Department of Justice also announced the seizure of an aircraft allegedly used by the Venezuelan President Nicolas Maduro Moros, in violation of US export controls.
The General Court of the EU rejected the de-listing applications of nine individuals and entities throughout September. The Court agreed to annul the acts maintaining the designations of three Russian individuals, however.
Designations
- In the Middle East the US designated three Lebanese individuals and five entities allegedly linked to Hezbollah, as well as one individual, four entities and nine vessels involved in shipping networks benefitting Hezbollah and the Islamic Revolutionary Guard Corps. OFAC also designated 19 Iranians for their roles in Iran’s security forces, human rights abuses in Iranian prisons, alleged terrorism recruitment plots outside Iran, and interference in the 2020 and 2024 US presidential elections.
- Targeting Russia, OFAC and the US Department of State took coordinated measures against Russian media outlets and cyber groups, designating ten individuals and two entities. Other Russian sanctions by the US included two Russian shipping entities and two vessels, which had attempted to export liquefied natural gas; three individuals and two entities for attempting to interfere in Moldovan elections; and five entities and one individual for establishing alleged illicit payment schemes between DPRK and Russia.
- This month also saw numerous sanctions targeting alleged abuses of human rights and undermining democratic processes. These included 16 designations in Venezuela, two in Haiti, six in Cambodia, and four in Georgia, as well as the imposition of visa restrictions on 14 Syrian officials and 60 Georgian individuals and their families. Separately, US sanctions focused on entities involved in Pakistan’s ballistic missile programme, entities and individuals alleged to be involved in cyber-related crimes, and numerous Mexican and Colombian entities and individuals alleged to be associated with certain cartels and drug trafficking operations.
- During September, the UK designated six individuals, eight entities, and four vessels for alleged links to the Iranian government and in response to the Iranian regime transferring ballistic missiles to Russia. The UK also sanctioned 15 vessels and two entities for alleged sanctions evasion and involvement in shipping Russian liquefied natural gas. The UN also sanctioned the two aforementioned Haitians for weapons trafficking: a former member of parliament and the leader of the Fran Grif gang. Meanwhile, the EU deleted the designations of three entries from its Guinea-Bissau list.
Regulations Amendments
- On 2nd September UK Foreign Secretary David Lammy announced the suspension of 30 export licenses granted to Israel including aircraft components and components that facilitate air to ground targeting. Licences unaffected by the suspension include those for items not used by the Israeli Defence Forces in military operations in Gaza, such as for training exercises, and for items for civilian use.
- The US Commerce Department’s Bureau of Industry and Security (“BIS”) issued export controls on quantum computing and advanced technologies. Certain exemptions exist to avoid disrupting research and development of certain technologies, as well as trade exemptions with certain countries. In late September BIS issued 11 export control orders to deny export privileges of certain individuals for up to ten years. The US also extended until September 2025 certain Presidential authorities related to export controls on Cuba, allowing the President to investigate, regulate and prohibit transactions involving property in which Cuba or a Cuban national has interest. Separately, the EU updated its list of dual-use items subject to export controls.
- Several sanctions programmes were either extended or amended in September. The UN voted unanimously to renew its sanctions regime on Sudan and the UK amended its Iranian and Mali sanctions regimes to add certain exceptions and to expand designation criteria. In the US, sanctions programmes targeting Ethiopia and transnational terrorism were extended. The EU renewed restrictive measures targeting those responsible for undermining or threatening the territorial integrity, sovereignty and independence of Ukraine for another six months, until 15th March 2025.
- The UK and US have also issued several general licences throughout the month. The UK updated its general licence permitting the import of certain Russian diamonds processed in third countries, and extended the humanitarian exemptions relating to its Syrian sanctions regime. The US published three Russia-related general licenses authorising certain transactions related to telecommunications and internet-based communications, and authorising certain safety, environmental and administrative transactions.
Enforcement and Challenges
- On 2nd September the US Department of Justice announced the seizure of an aircraft used by the President of Venezuela Nicolas Maduro Moros. The plane was seized in the Dominican Republic for violations of US export controls.
- The US Department of State imposed a civil penalty of $200 million on American aerospace and defence conglomerate RTX Corporation to settle 750 charges of export violations relating to the US International Traffic in Arms Regulations. On 30th September the BIS imposed two fines, the first a $440,000 fine on US aerospace and defence company First Call International Inc for sending military parts to Malaysia and South Korea without authorisation, and the second a $150,000 fine on data storage company Quantum Corporation for violating antiboycott regulations, having failed to report 45 requests from a UAE distributor to not import goods of Israeli origin. In late September the UK issued Integral Concierge Services Ltd a £15,000 fine for 26 payments in connection with property management services to a designated Russian person. In September the UK’s HM Revenues and Customs announced further settlements by UK companies dating back to April and June 2024 totalling £348,000 for the unlicenced transfer of dual-use and military goods.
- In early September US courts charged several individuals for sanctions violations. On 5th September the DoJ unsealed two indictments charging Russian TV presenter and former adviser to US President Nixon, Dimitri Simes, and his wife Anastasia for participating in a scheme to violate US sanctions for the benefit of sanctioned Russian broadcaster Channel One Russia and for laundering funds obtained from that scheme. Other September charges included US-Iranian citizen Gholam Reza Goodarzi, who was charged with smuggling parts and components used in the production of aircrafts from the US to Iran, as well as US citizen Sam Bhambhani and Russian citizen Maxim Teslenko, who were charged with conspiring to smuggle laser equipment from US to Russia.
- Separately, Lebanese national Mohammad Bazzi pleaded guilty to conspiring to force a US individual to liquidate their assets and send the proceeds to Lebanon, whilst Israeli citizen Gal Haimovich pleaded guilty to conspiracy to ship aircraft parts from the US to sanctioned Russian airlines. Haimovich agreed to forfeit over $2 million and certain aircraft parts. Russian citizen Dennis Postovoy was also arrested for exporting dual-use microelectronics from the US to Russia and a Chinese national was extradited to the US from Australia to face charges of engaging in a scheme to purchase tobacco for DPRK-owned entities
- In September the General Court of the EU rejected challenges to sanctions listings made by five individuals: Samer Al-Assad, the cousin of the Syrian President; Igor Kesaev, the owner of Russia’s largest tobacco distributor; Kirill Shamalov, deputy chairman of Russian petrochemical company Sibur Holding PJSC; an unnamed executive of Alfa Group; and Musa Bazhaev, chairman of Russian Alliance Group. The EU court also rejected the de-listing applications of the Russian National Settlement Depository, Belarusian fertiliser Belaruskali AAT, its director-general Ivan Golovat, and its exporting arm Belarusian Potash Company AAT. The EU court annulled the acts maintaining the designations of three individuals: Pavel Ezubov, the cousin of sanctioned oligarch Oleg Deripaska; Maya Tokareva, the daughter of Nikolay Tokarev, the CEO of Russian oil major Transneft; and Andrey Kozitsyn, the CEO of Ural Mining Metallurgical Company.
