Sanctions Guide – March 2024

Russia sanctions this month began with a focus on the country’s diamond sector as the G7 announced the joint expansion of restrictions on the import of Russian diamonds.  The EU Commission also submitted a proposal for increased tariffs on cereal and oilseed products originating from Russia and Belarus.

 

Outside of Russia, March saw the tightening of sanctions on Venezuela’s non-commercial airline sector and the implementation of arms export controls in Nicaragua by the US.  The US also revoked its Zimbabwe sanctions regime this month, re-designating the Zimbabwean President and his associates under its transnational Global Magnitsky programme.

 

In the enforcement space,  US airplane manufacturer Boeing and Swiss global private banking group EFG International AG agreed to a $51 million and $3.7 million settlement respectively last month for alleged sanctions violations.

 

Designations have been mostly centred on the US transnational counter-terrorism and counter-narcotics programmes.

 

Russia and Belarus

• On 1^st March 2024, various countries, including the UK, US, Switzerland, and EU, expanded their restrictions on the import of Russian diamonds equal to or larger than one carat in weight. Each country also published guidance on their respective programmes, including information on banned products and exemptions.

 

• Having renewed its Belarus sanctions regime for a year, the EU Commission submitted a proposal to increase the tariffs on imports of cereals, oilseeds, and derived products from Russia and Belarus, including wheat, maize, and sunflower oil. On 22^nd March the EU also sanctioned 33 individuals and two entities linked to the imprisonment of Russian opposition politician Alexei Navalny under its Global Human Rights Sanctions Regime.

 

• The US renewed its Russia sanctions regime for another year. It also sanctioned two individuals and two entities for a foreign malign influence campaign on behalf of the Russian government.  The campaign included attempts to impersonate government bodies and international media outlets.

 

Sanctions Amendments

• The UK and US have both implemented new regulations related to export controls. OFSI introduced new export controls which came into force on 1^st April 2024 on emerging technologies in the UK, including quantum, semiconductor, and other advanced technologies.  It also added updates to its dual-use munitions list.  On 14^th March the US Department of State imposed restrictions on the import and export of US-origin defence articles and defence services destined for or originating in Nicaragua.

 

• In an executive order published on 7^th March, OFAC revoked its Zimbabwe sanctions regime. All individuals previously on the Zimbabwe sanctions list have been de-listed with the exception of the President and First Lady of Zimbabwe, Emmerson and Auxilia Mnangagwa, and an associated business network involving three individuals and three entities, as well as six government officials who are allegedly involved in the violent repression of political opposition.  These individuals have been re-designated under OFAC’s Global Magnitsky anti-corruption programme.

 

Enforcement

• US airplane manufacturer Boeing agreed to pay the US Department of State a $51 million settlement for 199 charges of arms export violations, including the unauthorised export of data to employees in China, Russia and 16 other countries, a helicopter flight control system, and violations of licensing terms. On 14^th March the US also announced a $3.7 million settlement with Swiss global private banking group EFG International AG for processing 873 securities transactions in apparent violation of the US Cuba sanctions programme.

 

• In early March four individuals were charged with violating US sanctions. They included two US citizens, who were charged for conspiring to purchase and export weapons, ammunition, and other export-controlled items from the US to South Sudan without a licence, and Korbein Schultz, a US Army soldier and intelligence analyst, who was arrested and charged with exporting data, including Air Force tactics.  The fourth individual, Russian citizen Maxim Marchenko, pleaded guilty to charges of US export control violations for obtaining dual-use, military grade goods from US distributors on behalf of Russian end users.

 

• On 15^th March the US District Court of Columbia fined Iraq-based Al-Naser Airlines $17 million for the circumvention of US export controls by procuring a US-origin aircraft for the benefit of designated Iranian airline Mahan Air.

 

• In early March the UN Special Rapporteur on Sanctions asked the German Government to drop charges against Alena Bekker, a German entrepreneur who imported wood products from Belarus, saying its enforcement of EU sanctions has been contrary to human rights standards. The same week, the General Court of the EU rejected challenges to the EU’s restrictions on the import of wood, iron, and steel from Belarus, holding that the import restrictions are proportionate to Belarus’ involvement in the war in Ukraine.

 

• The EU parliament has adopted a directive to criminalise the violation and circumvention of EU sanctions. The directive must now be approved by the EU Council to become EU law.

 

Designations

• US designations included nine entities, three vessels, and two tankers allegedly involved in illicit shipments and financial transactions in support of the IRGC-Qods Force, the Houthis, and Hizballah, as well as 16 entities and individuals allegedly involved in the financing of, and money laundering for, the Al-Shabaab terrorist group and Iran-backed group Ashtar Brigades. Iran was further targeted by US sanctions with the designation of individuals, entities and vessels involved in the shipping of Iranian commodities in China and for support of Iran’s ballistic missile and nuclear programmes.

 

• As part of its counter-narcotics programme, the US re-designated the Los Pochos Drug Trafficking Organisation and its associates in Guatemala. On 14^th March OFAC designated a member of Brazilian criminal organisation Primerito Comando da Capital, who was found by a Brazilian court to have laundered $240 million for the group.  On 22^nd March OFAC designated 15 operatives in a Black Market Peso Exchange scheme to launder millions in illicit fentanyl proceeds for the Sinaloa Cartel.

 

• In March the US also targeted seven individuals in the Balkans for, among other reasons, using political influence for personal benefit, as well as international individuals and entities for their roles in distributing spyware technology used to target the US. Towards the end of the month, the US also designated Nicaragua’s Attorney General for enabling the actions of the Ortega-Murillo regime, and 11 individuals and entities for supporting the regime of President Bashar Al-Assad in Syria.

 

• Joint action by the US and UK in March included the designations of the founder and director of Gaza Now, a news agency that allegedly promotes Hamas and PIJ. The US also designated Gaza Now itself and its alleged funders l-Qureshi Executives and Aakhirah Limited.  On 25^th March the US and UK also targeted two Chinese individuals and one entity for connections to China state-affiliated cyber company Advanced Persistent Threat Group 31.

 

• On 25^th March the EU designated an ISIL-affiliated individual operating in Burkina Faso, Niger and Mali, and an Al-Qaeda-affiliated group in Central Mali, Niger and Burkina Faso.