July 2024 saw little in the way of Russia-related sanctions developments, but a renewed focus by the US and EU on human rights violations. OFAC and the European bloc imposed new designations on the West Bank and the Democratic Republic of Congo (“DRC”); the US also continued its counter-narcotics designations, targeting several individuals in Central America.
The EU extended its Iran programme until July 2025 and widened the scope of its Belarus sanctions to include measures the bloc had imposed against Russia in June. The US also expanded its Iranian export controls, imposing new licensing requirements for the export of additional foreign-produced items located in or destined to Iran, and targeting end-user transactions with the Iranian Government which involve such items.
The UN Security Council unanimously agreed to lift the arms embargo in place against the Central African Republic (“CAR”). UN member states were encouraged, nevertheless, to continue taking necessary measures to prevent the supply, sale or transfer of arms to groups and individuals operating in CAR until July 2025.
Designations
- Throughout the month, the US imposed sanctions on five individuals and five entities for their alleged role in human rights violations and threatening the stability of the West Bank. The EU also designated five individuals and three entities alleged to be responsible for human rights abuses against Palestinians in the West Bank. On 24th July, the EU sanctioned four individuals and two entities in Syria, DPRK, Ukraine, and Haiti, under its global human rights sanctions regime for alleged sexual and gender-based violence. On 26th July the EU designated nine individuals and one entity for alleged human rights violations and abuses in the DRC and for allegedly sustaining “armed conflict, instability and insecurity” in the Eastern DRC. OFAC designated armed group Alliance Fleuve Congo and two individuals for driving instability in the DRC.
- The US designated three Emirati companies transporting Iranian petroleum products and the Hakima Shargh Research Company for its involvement in Iran’s chemical weapons research and development. OFAC also designated one Chinese and four Iranian individuals, and one Iranian and six Chinese entities for facilitating the procurement of components used in Iran’s ballistic missile and unmanned aerial vehicle program, as well as six Chinese people and five entities for procuring items in support of the DPRK’s ballistic missile and space programmes.
- On 18th July the UK designated 11 vessels under its Russian sanctions programme in an effort to counter Russia’s so-called “shadow fleet”. The following day the US designated two Russian cyber hackers who form part of the Russian group Cyber Army of Russia Reborn for their alleged roles in cyber operations against US critical infrastructure.
- OFAC designated four people in Mexico and three in Guatemala for their role in human smuggling operations into the US. OFAC also sanctioned three Mexican accountants and four Mexican entities alleged to be linked to timeshare fraud led by the Cartel de Jalisco Nueva Generacion, as well as two Mexican nationals and two Mexican companies for links to the illicit drug trade. Also under its counter narcotics regime, OFAC designated one Mexico-based and two China-based individuals associated with money laundering for the Sinaloa Cartel. Venezuelan transnational criminal organisation Tren de Aragua was listed by OFAC on 11th
- On 23rd July OFAC designated three individuals, one from South Africa and two from Uganda, under its counter terrorism regime for their alleged links to Iraq and the Levant. The US State Department also sanctioned two individuals and five entities, and identified 5 vessels as blocked property, for connections with Sa’id al-Jamal, an alleged financier of the Houthis in Yemen. On 26th July the EU renewed its list of persons, groups, and entities subject to restrictive measures countering terrorism. The EU also added “The Base”, an organisation of alleged right-wing extremists involved in terrorist acts, to the list.
De-listings and Exemptions
- Notable de-listings in July include Alexey Panferov from OFAC’s Russia sanctions list and Marina Tsareva from its cyber sanctions list. On 10th July General Court of EU annulled DRC sanctions listings of Évariste Boshab and Alex Mupompa two officials of the DRC government, who had been sanctioned in May 2017 for their roles in the arrests of activists and opposition members and the disproportionate use of force against civilians. The EU General Court also annulled the listing of Russian national Vladimir Rashevsky, who was designated in March 2022 for being the CEO and Director of mineral fertiliser company EuroChem. From its Libya sanctions programme, the EU removed two BVI subsidiaries of the Libyan Investment Authority and Yevgeniy Prigozhin following his death in August 2023.
- The EU General Court rejected Dmitry Mazepin’s application for the annulment of the acts maintaining his designation on the basis that he is a 48% stakeholder and former CEO of mineral fertiliser company Uralchem. The court found sufficient evidence the agri-food sector provides substantial revenue to the Russian government. The General Court granted his son, Nikita Mazepin, a limited suspension of sanctions, however. The General Court of the EU also handed down judgements relating to the annulment of four members of Mohammed Makhlouf’s family, all of whom are sanctioned under the EU’s Syria programme. The court held that Shahla Makhlouf should be de-listed as she had been estranged since birth, but rejected the applications of Makhlouf’s two daughters and widow.
- From 31st July the UK amended its Syrian sanctions regime to permit those who assist in purchasing, supplying or delivering of petroleum products used exclusively to provide humanitarian assistance in Syria. The UK also issued several multi-jurisdictional general licences throughout the month allowing payments from designated persons to statutory auditors, revenue authorities, and for the payments of taxes and legal fees. The UK also renewed its general licence permitting steel manufacturer Evraz plc’s North American subsidiaries to continue business operations, and updated a general licence to allow certain payments by the UK, EU and Guernsey subsidiaries of Russian banks VTB and Sberbank. The US issued one Venezuela-related general license regarding the export of petrol and one authorising transactions involving Russia’s Central bank, Ministry of Finance and National Wealth Fund.
Enforcement
- The US fined PetroChina International America $14.5 million for violations of US export controls. According to the US Attorney’s Office of the Southern District of Texas, PetroChina misclassified more than $32 million of ultra-low-sulphur diesel fuel as mineral oil mix for export transactions to Mexico in 2019 and 2020. Separately, on 26th July OFAC announced a $7.5 million settlement with State Street Bank and Trust Company and its subsidiary Charles River Systems Inc. State Street and Charles River faced potential civil liability for 38 violations of OFAC’s Russia Sanctions between 2016 and 2020.
- On 2nd July, US businessman Douglas Robertson, the former vice president of US-based KanRus Trading Company Inc, pleaded guilty to conspiracy to circumvent US export controls by filing false export forms and continuing to export avionics equipment to customers in Russia without the required licences. On 17th July Russian national Maxim Marchenko was sentenced to three years in prison by the District Court for the Southern District of New York for having unlawfully attempted to procure military technology for transfer to Russia. On 18th July US national Ray Hunt pleaded guilty to conspiracy to export US goods to Iran in breach of trade sanctions restrictions, whilst Iranian national Saeid Haji Agha Mousae appeared in federal court in Chicago to face charges of conspiring to evade export controls to Iran, having been extradited from the UK.
- On 5th July the UK High Court ordered the removal of UK citizen David Crisp (“Crisp”) from a company’s board of directors for breaching Russia sanctions by exporting luxury goods to Russia. Crisp was arrested by HMRC in October 2023, but not charged, and a criminal investigation reportedly remains ongoing. Also in the UK, the National Crime Agency has reportedly applied for a forfeiture order of £1.1 million relating to the proceeds of crime from an alleged sanctions breach purportedly belonging to designated person Peter Aven. Aven was designated for allegedly making transactions intended to circumvent sanctions.
