In October 2024 international sanctions bodies focused on the Middle East. Whilst the US targeted so-called sham charities with ties to Hamas, former UK Prime Minister David Cameron called for the designation of two Israeli ministers. Elsewhere Russia and Belarus was a prominent feature of sanctions imposed by the US, UK and EU, with OFAC closing the month with 275 designations against people alleged to have evaded Russian sanctions.
In the enforcement space, courts across Europe were particularly active this month, whilst US courts charged several individuals for breaching sanctions regulations. Notable penalties handed down include a $3 million settlement between the US Department of State and Precision Castparts Corps for alleged export violations and an almost £29 million fine by the UK Financial Conduct Authority to Starling Bank for failing to conduct sufficient due diligence.
The EU announced the renewals of several sanctions regimes including those against ISIL/Daesh and Al-Qaeda, Nicaragua, Burundi, Sudan, Guinea, Niger, and Chemical Weapons, whilst the US extended its sanctions regimes and national emergency declarations with respect to the DRC, Syria and drug traffickers based in Colombia. In the UK the government launched the Office of Trade Sanctions Implementation (“OTSI”), a new regulatory body which is responsible for the civil enforcement and licensing of certain UK trade sanctions.
Sanctions in the Middle East
- On 7th October, one year on from the Hamas-led attack on Israel, OFAC designated four individuals, ten entities and a so-called sham charity The Charity Association of Solidarity with the Palestinian People, over ties to Hamas. Later in the month the US and Canada designated the Samidoun Palestinian Prisoner Solidarity Network, another alleged sham charity that fundraises for the terrorist-designated organisation the Popular Front for the Liberation of Palestine (“PFLP”).
- In response to Iran’s attacks on Israel on 1st October, the US Treasury and Department of State expanded its sanctions on the Iranian petroleum and petrochemical sectors, and now may impose sanctions on any individual or entity deemed to operate in them. Accordingly OFAC then designated 10 entities and 17 vessels for their involvement in shipments of Iranian petroleum and petrochemical products. Elsewhere in the Middle East, OFAC designated six individuals, nine entities, and ten vessels over alleged involvement in Houthi weapons procurement and shipping networks, and for ties to Houthi financial official Sa’d al-Jamal. In Lebanon, OFAC designated three individuals and four entities under its Counter Terrorism program for involvement in a Lebanon-based sanctions evasion network said to generate significant revenue for Hizballah.
- Early in the month former UK Prime Minister David Cameron called for the designation of two Israeli politicians – the finance minister and minister for national security – arguing they encourage settler violence and have stopped humanitarian aid into Gaza. He encouraged the UK government to reconsider sanctioning the ministers but also criticised last month’s suspension of arms export licences to Israel, calling it inconsistent with supporting Israel’s right to self-defence. Later in the month UK Prime Minister Keir Starmer announced the UK government was considering sanctions against the Israeli ministers.
- The UK also designated seven entities under its human rights regime, targeting three settler outposts and four organisations accused of supporting and inciting violence against Palestinian communities in the West Bank. The EU designated seven individuals and seven entities for alleged Iranian missile and drone transfers to Russia. The designations included three Iranian airlines, two procurement firms, two companies that produce rocket propellant, and prominent officials of the Islamic Revolutionary Guard Corps Qods Force.
Other Designations
- In Russia the UK carried out its largest targeting of Russian oil tankers to date by barring 18 Russian oil tankers and four LNG tankers from UK ports, alongside the designation of Russian gas company Rusgazdobycha JSC. The UK also designated three individuals and three entities under its Russia sanctions regime for spreading disinformation through fake news about the invasion of Ukraine, as well as disinformation about the Princess of Wales. Regarding Russia’s use of chemical weapons in Ukraine, the UK designated three entities and one individual: Igor Kirillov.
- Outside Russia, the UK sanctioned six entities and the EU designated three individuals and one entity for connections with the Myanmar military regime. The EU also designated five individuals for alleged destabilising and separatist actions in the Republic of Moldova, and Evrazia, a Russia-based NGO whose goal is to promote Russia’s interests abroad, including in Moldova. In Belarus the UK sanctioned Belarusian bank ZAO Alfa Bank Belarus for allegedly supporting the Belarusian Government.
- At the end of the month the US designated 275 individuals and entities for evading Russian sanctions and for their involvement in Russia’s weapons procurement network. Earlier in the month the US designated the procurement director for the Sudanese Rapid Support Forces and the director general of the Sudanese Armed Forces’ weapons procurement programme. On 9th October the US State Department designated the former president and former vice president of Ecuador for accepting bribes as public officials. OFAC also designated three entities and one individual for their role in developing and producing unmanned aerial vehicles for use in Ukraine by Russia.
Regulations Amendments
- The EU renewed its sanctions regimes against ISIL/Daesh and Al-Qaeda, Nicaragua, Burundi, Sudan, Guinea, Niger, and Chemical Weapons for another year. The US extended its sanctions regimes and national emergency declarations with respect to the DRC, Syria and drug traffickers based in Colombia. The US also introduced a visa restriction policy targeting those responsible for undermining democracy in Ghana.
- The US Bureau of Industry and Security (“BIS”) removed 21 entities and added 36 entities to its boycott request list, which requires US persons to report requests to comply with boycotts by foreign entities. The BIS separately renewed its temporary denial order (“TDO”) of export privileges against AO Ural Airlines, Iranian aviation company Maham Airways and 12 related parties. The BIS also added 26 entities – six from China, 16 from Pakistan, three from the UAE and one from Egypt – to its Entity List for actions contrary to US national security and foreign policy.
- On 8th October the EU announced a new framework for restrictive measures in response to Russia’s destabilising actions abroad, which allows for hybrid threats including but not limited to undermining electoral processes, the use of disinformation, and the instrumentalisation of migrants. The EU also amended its Tunisian sanctions regime to allow certain humanitarian actors to engage in transactions with designated persons without prior authorisation.
- The UK launched the Office of Trade Sanctions Implementation (“OTSI”), a new regulatory body which is responsible for the civil enforcement and licensing of certain UK trade sanctions. The UK Parliament also approved slight amendments to its Russia and Syria sanctions regulations, including expanding the scope of activities for which a person may be designated in Russia and expanding the humanitarian exemption in Syria. The UK amended various general licences throughout the month including inter alia the replacement of its expired legal services general licence for Russia and Belarus, and the clarification of energy payments exemptions. The UK also published a general license to include humanitarian exemptions in Lebanon. Previously the license only applied to activities in Israel and the Occupied Palestinian Territories.
- After Russia vetoed the April 2024 extension of the UN panel of experts monitoring DPRK sanctions violations, this month 11 countries, including the UK and US, made a joint statement to announce their intention to establish the Multilateral Sanctions Monitoring Team (“MSMT”) to carry out the functions of the disbanded panel of experts instead.
Enforcement
- In the US, in coordination with last month’s designation, the US Department of Justice unsealed an indictment charging Aleksandr Viktorovich Ryzhenkov for his involvement in Russian cybercrime group Evil Corp. The US also charged three Russian nationals for procuring $225,000 worth of microelectronics products on behalf of a Russia-based entity that in turn supplies manufacturers of weaponry for the Russian military. Meanwhile, the US Court of Appeals for the Second Circuit has for a second time found that state-owned Turkish bank Halkbank is not protected from criminal prosecution, having been charged with conspiring to help Iran evade US sanctions.
- Kambiz Eghbali (“Eghbali”) a US-Iranian citizen, was arrested in the US for conspiracy to violate and evade sanctions against Iran. Eghbali allegedly planned to send gift cards to Iran containing US dollars and faces 20 years imprisonment if convicted. Meanwhile, a US District court sentenced Mexican citizen Elmer Espinoza-Ortega to 36 months in prison for illegally exporting firearms from the US to Mexico, whilst Lin Chen, a Chinese National, pleaded guilty to acting on behalf of a Chinese company to procure a semiconductor manufacturing machine.
- The US Department of State reached a $3 million settlement with Precision Castparts Corps over 24 alleged export violations for the export of products used in the production of gas turbine engines to individuals across Latin America, Burundi and Bhutan. OFAC also announced an £860,000 settlement with the Vietnam Beverage Company Limited over 43 DPRK sanctions violations between 2016 and 2018. On 27th September the UK Financial Conduct Authority fined Starling bank almost £29 million for failing to conduct sufficient sanctions-related due diligence.
- The General Court of the EU rejected challenges to the EU prohibition on providing legal advisory services to the Russian Government and Russian entities. It also rejected the Communications Regulatory Authority’s application to annul its listing, having been designated for alleged violations of human rights in Iran by using the internet to track protestors. The EU General Court annulled the listing of Moldovan politician Vladimir Plahotnuic, who was listed in May 2023 for serious financial misconduct involving public funds.
- The Rotterdam District Court found an unnamed defendant guilty of sanctions evasion for delivering aircraft parts to Russian aviation companies. The defendant was sentenced to 32 months in prison and fined EUR 165,000, whilst the company’s assets were seized. The Dutch Public Prosecution Service has separately demanded a 24-month prison sentence for an individual accused of trading dual use components to Russian companies in breach of EU sanctions, whilst the Bonn Public Prosecutor’s Office and Essen customs investigation Department are investigating the owner of a German car dealership over suspected export control violations. In France, the commander of the Baltic Leader, a Russian-flagged ship allegedly owned by a subsidiary of EU-sanctioned Russian bank Promsvyazbank, was acquitted of sanctions violations. Judges in France have also ordered the trial of French cement group Lafarge SA over terrorism financing and sanctions violations, having originally been placed under investigation in 2018.
