On March 11, 2015, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed new Ukraine-related targeted sanctions on several Russian and Ukrainian individuals and entities in response to Russian violations of the ceasefire brokered in February 2015 between the parties associated with separatist violence in Ukraine. The newest measures add 14 specific individuals and two entities to OFAC’s list of Specially Designated Nationals (SDN). The list of newly-designated individuals includes several Ukrainian separatists, and the list of newly-designated entities includes the Russian National Commercial Bank, a Russian bank operating in the Crimea region of Ukraine.
On Jan. 16, 2015, the U.S. Government will amend the existing Cuba-related regulations allowing certain types of travel, remittances, financial transactions and exports to Cuba.
The regulations will be effective immediately upon publication of the Jan. 16, 2015 notice. The regulations implement President Obama’s Dec. 17, 2014, announcement of a policy change with respect to the U.S. embargo on Cuba. While the amended regulations will expand the types and amounts of transactions in which U.S. persons can engage with Cuba, the United States nevertheless maintains a nearly comprehensive embargo on trade with Cuba. U.S. persons may only engage in transactions that are licensed or otherwise specifically authorized.
The U.S. Department of Commerce’s Bureau of Economic Analysis (BEA) has reinstated a previously dormant reporting requirement via Form BE-13 for certain new foreign direct investment in the United States. The reporting requirement applies retroactively. Qualifying investment transactions that occurred during 2014 prior to Nov. 26, 2014, must be reported by Jan. 12, 2015. Qualifying investment transactions that occurred on or after Nov. 26, 2014, are required to be reported within 45 days of the qualifying transaction.
U.S. companies required to file Form BE-13 (or Form BE-13 Claim for Exemption) may file a request for an extension with BEA. Unlike BEA reports relating to foreign investment, the Form BE-13 is mandatory for all U.S. businesses subject to the reporting requirement, regardless of whether the U.S. businesses have been specifically contacted by BEA.
On Jan. 2, 2015, President Obama signed an Executive Order expanding the scope of the current U.S. sanctions against North Korea. The expanded sanctions are directed primarily at the government of North Korea and associated entities and individuals. Pursuant to the new sanctions, the property of three North Korean governmental entities and 10 associated individuals has been blocked, and the entry of those individuals into the United States has been banned. In a prepared statement, the White House stated that the new sanctions are “a response to the Government of North Korea’s ongoing provocative, destabilizing, and repressive actions and policies, particularly its destructive and coercive cyber attack on Sony Pictures Entertainment.” The Executive Order imposing new sanctions with respect to North Korea is described below and is available here.
On Dec. 30, 2014, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Ukraine-related General License No. 5 authorizing U.S. persons to engage in activities ordinarily incident and necessary to winding down U.S. person activity with or in the Crimea region of Ukraine (Crimea) that existed prior to Dec. 20, 2014. Specifically, General License No. 5 authorizes U.S. persons to wind down U.S. person ownership shares in pre-Dec. 20, 2014 investments located in Crimea, as well as authorizes U.S. persons to wind down operations, contracts, or other agreements that were in effect prior to Dec. 20, 2014 involving the import, export, reexport, sale, or supply of goods, services, or technology from Crimea. General License No. 5 is described below and is available here.
On Dec. 19, 2014, President Obama signed an Executive Order prohibiting most transactions by U.S. persons with respect to the Crimea Region of Ukraine (Crimea) and blocking the property of certain individuals and entities (together, Crimea Sanctions). Additionally, the Office of Foreign Assets Control (OFAC) issued General License No. 4, providing limited relief to the new restrictions by authorizing the export and reexport of certain agricultural commodities, medicine, medical supplies, and replacement parts to Crimea. The Executive Order and General License No. 4 are described below.
The European Union (EU) adopted new sanctions Friday, Dec. 19, 2014, relating to the conflict situation in Ukraine. The sanctions specifically target Crimea and Sevastopol. The new measures confirm, once again that the EU does not recognize Russia’s annexation of Crimea and Sevastopol, which occurred earlier this year.
Further to our previous Alert summarizing the Ukraine Freedom Support Act of 2014 (UFSA) passed by the U.S. Congress, President Obama signed into law the UFSA on Dec. 18, 2014. The UFSA authorizes the president to impose additional sanctions against the Russian energy and defense sectors and financial institutions, but does not mandate specific sanctions. In a press release issued by the White House yesterday, President Obama stated that the administration does not intend to impose sanctions under the UFSA, but indicated that the law does give the administration additional authorities that could be used, if circumstances warranted. The president further stated that the United States intends to continue to coordinate its sanctions strategy with the European Union and that it is prepared to roll back sanctions if Russia implements the Minsk ceasefire agreement and reaches a lasting and comprehensive resolution to the conflict in Ukraine.
On Dec. 17, 2014, President Obama announced plans for an historic overhaul of the U.S. embargo against Cuba. Among other changes, the president’s announcement indicated that significant developments are expected in the current U.S. restrictions on Cuba-related travel, financial transactions, export and import regulations, and telecommunications. Importantly, the changes announced by the White House are not yet effective, and accordingly, all current U.S. restrictions on Cuba remain in place.
On Dec. 13, 2014, the U.S. Congress unanimously passed the Ukraine Freedom Support Act (UFSA) authorizing the president to expand sanctions against Russia and provide military aid to Ukraine. President Obama is expected to sign the legislation into law.