Category: Sanctions News

Brief #1: How The EU Plans To Crack Down On Sanctions Circumvention What You Need To Know: One of the most frequently asked questions in Brussels right now when it comes to its ever-growing sanctions on Russia is whether they are efficient. The 10 rounds of restrictive measures imposed on the Kremlin since its full-scale invasion of Ukraine in February…

The Biden administration on Thursday imposed sanctions on the Federal Security Service, Russia’s intelligence agency, for its role in detaining Americans like Evan Gershkovich, The Wall Street Journal reporter who has been accused of espionage.

The administration also announced sanctions on Iran’s intelligence services and four senior Iranian officials, who the administration says have participated in a pattern of holding Americans and other nationals hostage.

The U.S. is imposing sanctions on groups in Russia and Iran associated with the wrongful detainment of its citizens, CNN reported on April 27. Former U.S. Marine Paul Whelan and Wall Street Journal reporter Evan Gershkovich are currently being held in Russia on trumped-up espionage charges. Russian Foreign Minister Sergei Lavrov attempted to justify Russia detaining the two U.S. citizens while speaking to journalists at the United Nations on April 25, claiming they were detained “when committing a crime.” People familiar with the matter told Bloomberg in mid-April that Russian dictator Vladimir Putin “personally approved” Gershkovich’s arrest on espionage charges. In Iran, Siamak Namazi, Emad Sharghi and Morad Tahbaz are all being held in a prison where where there have been reports of torture, CNN wrote. According to CNN, the sanctions imposed by the U.S. would target Russia’s Federal Security Service and the Intelligence Organization of Iran’s Islamic Revolutionary Guard Corps. Four individuals in Iran would also be targeted by the sanctions. “We are showing that one cannot engage in this sort of awful behavior using human beings as pawns, as bargaining chips, without paying consequences and these are some of the consequences,” a senior U.S. administration official said, as quoted by CNN. However, as CNN pointed out, “questions remain about the real impact of these sanctions because many of the entities hit on Thursday were already sanctioned under different authorities by the U.S.”

The US Supreme Court rejected Wednesday the claim of sovereign immunity by a Turkish bank accused of violating Iran sanctions, in a case that has added tensions to ties between Washington and Ankara.

Halkbank was hit with US criminal charges in 2019 that it took part in a yearlong scheme to launder billions of dollars worth of Iranian oil and natural gas proceeds, violating sanctions on Iran.

The funds were used to buy gold and the transactions were disguised as food and medicine purchases in order to fall under a humanitarian exemption to the sanctions, according to court documents.

As part of the scheme, Halkbank allegedly used front companies to funnel $20 billion to Iran, including $1 billion through the US financial system, the US Justice Department said.

The United States charged the bank with six counts of fraud, money laundering, and sanctions offenses, calling it one of the most serious sanctions-breaking cases it has seen.

  LONDON (AP) — A diamond and art dealer was sanctioned Tuesday by the U.K. and U.S. governments for allegedly funding Lebanon’s militant Hezbollah group. The U.K. Treasury said it froze Nazem Ahmad’s assets in the U.K. because he financed the Iranian-backed Shiite militant organization that has been designated an international terrorist group. Under the sanctions, no one in the…

Some of Turkey’s largest airport ground handler firms stopped providing services to western-made aircraft owned by Russian airlines earlier this month, multiple sources told Middle East Eye.  The sources, who are within the aviation industry and are familiar with the issue, said Havas, Turkey’s largest ground service provider, as well as Turkish Ground Services (TGS), stopped serving the US-made Boeing and European Airbus aircraft…

The US on Wednesday slapped sanctions on several entities based in Turkey and the United Arab Emirates which it said had violated US export controls and helped Russia’s war effort in Ukraine. The firms were included in a new list of sanctions rolled out by the US Treasury Department against more than 120 targets across over 20 countries and jurisdictions….

Russian airline Aeroflot [Russian Airlines] has sent its aircraft to Iran for repairs for the first time in its history amid Western sanctions.

Source: Kremlin-aligned news outlet RBC, citing two sources close to the airline

“An Airbus A330-300 wide-body airliner with registration number RA-73700 flew to Tehran on 5 April, where the aircraft will be serviced by technicians from Mahan Air, i.e., Iran’s largest airline,” the statement said.

In recent days, industrial action by refinery workers has intensified, leading to supply disruptions as members of French unions stopped refineries and depots from delivering fuel, the outlet said. According to the latest data compiled by the news outlet, the Val-de-Marne department in Ile-de-France is the worst affected with nearly half (49.4%) of its petrol stations facing partial or complete fuel supply disruption. The second-worst-affected area was the Paris region, where 38.8% of petrol stations were experiencing shortages of at least one type of fuel as of April 6. Drivers reported problems at 39.7% of pumps in Hauts-de-Seine, while 24.2% of pumps in Indre-et-Loire were also affected, reporting little or no supply.

The American bank Wells Fargo has been fined $97.8m (£79m) by the Federal Reserve and the Treasury Department for breaching US sanctions laws. Inadequate oversight meant that it allowed a foreign institution to process $532m in illegal transactions involving Iran, Syria and Sudan. Wells Fargo said it stopped dealing with the client in 2015.

The United Arab Emirates’ central bank on Friday said it will cancel the licence it granted last year to Russia’s MTS bank, which was placed under British and US sanctions in February.

Operations at the bank’s UAE branch, which is licensed in the emirate of Abu Dhabi, will be wound down within six months under UAE central bank supervision.

A statement from MTS Bank said it will fulfil all settlement obligations to existing customers and guarantee the safety of their funds for six months.

“This decision comes after considering the available options regarding the new status of the MTS Bank and taking into account the sanctions risks associated with the bank,” the UAE central bank’s statement said.

The Biden administration has sanctioned a Slovakian man who U.S. officials said attempted to facilitate an arms deal that would have given Russia access to weapons and munitions from North Korea in exchange for aircraft, food and other material.

The Treasury Department announced new sanctions targeting Ashot Mkrtychev, the man accused of trying to arrange the secret deal. Officials said the episode is the latest sign that Russia is searching for ways to replenish its military capabilities as it continues to suffer losses amid heavy fighting in Ukraine.

“We know that between the end of 2022 and early 2023, that [Mkrtychev] worked with North Korean officials to attempt to obtain, as I said, over two dozen kinds of weapons and ammunitions for Russia” in exchange for aircraft, raw materials and commodities, National Security Council spokesman John Kirby told reporters on a call. He said any such arrangement would violate multiple U.N. Security Council resolutions.

The Treasury Department said Mkrtychev “confirmed Russia’s readiness to receive military equipment from the DPRK with senior Russian officials,” using North Korea’s official diplomatic name. The department said Mkrtychev worked with a Russian official to locate commercial aircraft that could be delivered to North Korea. Thursday’s sanctions mean all of Mkrtychev’s property and interests in the U.S. or in the possession of U.S. persons are blocked.

Office of the Spokesperson
The United States continues to put human rights at the center of our foreign policy.  The Export Controls and Human Rights Initiative  – launched at the first Summit for Democracy as part of the Presidential Initiative for Democratic Renewal – is a multilateral effort intended to counter state and non-state actors’ misuse of goods and technology that violate human rights.  During the Year of Action following the first Summit, the United States led an effort to establish a voluntary, nonbinding written code of conduct outlining political commitments by Subscribing States to apply export control tools to prevent the proliferation of goods, software, and technologies that enable serious human rights abuses.  Written with the input of partner countries, the Code of Conduct complements existing multilateral commitments and will contribute to regional and international security and stability.
In addition to the United States, the governments that have endorsed the voluntary Code of Conduct are: Albania, Australia, Bulgaria, Canada, Croatia, Czechia, Denmark, Ecuador, Estonia, Finland, France, Germany, Japan, Kosovo, Latvia, The Netherlands, New Zealand, North Macedonia, Norway, Republic of Korea, Slovakia, Spain, and the United Kingdom.   The Code of Conduct is open for all Summit for Democracy participants to join.
The Code of Conduct calls for Subscribing States to:

Take human rights into account when reviewing potential exports of dual-use goods, software, or technologies that could be misused for the purposes of serious violations or abuses of human rights.
Consult with the private sector, academia, and civil society representatives on human rights concerns and effective implementation of export control measures.
Share information with each other on emerging threats and risks associated with the trade of goods, software, and technologies that pose human rights concerns.
Share best practices in developing and implementing export controls of dual-use goods and technologies that could be misused, reexported, or transferred in a manner that could result in serious violations or abuses of human rights.
Encourage their respective private sectors to conduct due diligence in line with national law and the UN Guiding Principles on Business and Human Rights or other complementing international instruments, while enabling non-subscribing states to do the same.
Aim to improve the capacity of States that have not subscribed to the Code of Conduct to do the same in accordance with national programs and procedures.

We will build on the initial endorsements of the ECHRI Code of Conduct by States at the Summit for Democracy and seek additional endorsements from other States.  We will convene a meeting later this year with Subscribing States to begin discussions on implementing the commitments in the Code of Conduct.  We will also continue discussions with relevant stakeholders including in the private sector, civil society, academia, and the technical community.
Find the text of the full code of conduct .

Four bankers from a Russian bank’s Swiss branch have been found guilty by a Zurich court over vast sums going into the accounts of a close confidant of President Vladimir Putin.

The accounts in the Swiss arm of Gazprombank were held by Sergei Roldugin, the artistic director of the St. Petersburg Music House, who is often dubbed Putin’s cellist.

Roldugin has been a friend of Putin for more than four decades and is godfather to one of the Russian leader’s daughters.

The four men were found guilty of “lack of due diligence in financial transactions”, the Zurich District Court said in its verdict released to media on Thursday, over the millions of Swiss francs flowing through Roldugin’s account.

Under Swiss law, the bankers — two Russians, one Swiss and a Russian-born British national — cannot be identified.

The bank branch’s chief executive was fined 540,000 Swiss francs ($590,200).

Credit Suisse Group AG and UBS Group AG are among the banks under scrutiny in a US Justice Department probe into whether financial professionals helped Russian oligarchs evade sanctions, according to people familiar with the matter.

The Swiss banks were included in a recent wave of subpoenas sent out by the US government, the people said. The information requests were sent before the crisis that engulfed Credit Suisse and resulted in UBS’s proposed takeover of its rival.

Subpoenas also went to employees of some major US banks, two people with knowledge of the inquiries, said.

The Justice Department inquiries are focused on identifying which bank employees dealt with sanctioned clients and how those clients were vetted over the past several years.

Frankfurt (dpa) – A US court has ordered German stock operator Deutsche Börse’s Clearstream subsidiary to turn over about $1.7 billion in assets held by Iran’s central bank, Bank Markazi.

The court decision comes as part of a long-running US legal case in which victims of a terrorist attack 40 years ago have sought compensation from Iran. Clearstream said it is considering an appeal of the decision.

The assets are held in a customer account in Luxembourg by Clearstream, a wholly owned subsidiary of the German stock exchange operator. The company announced on Wednesday evening in Frankfurt that those suing Iran were granted a right to the assets attributed to the Iranian central bank held in a customer account at Clearstream.

Iranian-held assets at Clearstream, which manages securities on behalf of customers and handles purchases and sales, have been frozen on suspicion of terrorist financing and locked in several legal disputes for a number of years.

According to Deutsche Börse, that case remains pending but Clearstream maintains it is without merit.