Sanctions and enforcement professionals from the U.K., the EU and the U.S. said although they are pleased with the unprecedented unity and coordination among nations opposed to the Russian invasion of Ukraine, it is an ongoing challenge to fight export control evasion and asset hiding among Russian elites.
The House Financial Services Committee advanced legislation this week that could apply full blocking sanctions on a host of Chinese companies in what Rep. Andy Barr, R-Ky., described as the “most severe set of financial restrictions the House of Representatives has ever considered.” Barr’s bill, the Chinese Military and Surveillance Company Sanctions Act (see 2302060005 and 2306130062), could lead to new financial sanctions on companies subject to certain U.S. investment restrictions and export control licensing requirements, including China’s Semiconductor Manufacturing International Corp., Huawei and other major Chinese technology companies.
The U.K. on Sept. 19 amended one entry under its Russia sanctions list and corrected three others to "remove reference to transport sanctions." The Office of Financial Sanctions Implementation amended the listing for Mikhail Fridman to show that he is sanctioned, given that he worked as a director of Alfa Group, which operates in the Russian financial services sector. The corrections were issued for Zarakh Iliev, owner of transport company Kievskaya Ploshchad; Igor Makarov, director of Reywood Holdings; and Iskander Makhmudov, president of Ural Mining and Metallurgical Co.
Chinese Minister of Commerce Wang Wentao met with Russian Minister of Economic Development Maxim Reshetnikov this week to discuss expanding trade between the two countries, China’s Ministry of Commerce said Sept. 19, according to an unofficial translation.
DOJ is seeking to expand an authority that allows it to use seized Russian assets to assist with Ukraine’s reconstruction efforts. Attorney General Merrick Garland, speaking before the House Judiciary Committee Sept. 20, said in written remarks prepared for the hearing that DOJ can use the authority, included as part of the FY 2023 government spending package, to transfer certain forfeited property to the State Department “to remediate the harms of Russia’s invasion of Ukraine.” But the administration can’t use that authority for forfeited Russian assets connected to Moscow’s 2014 annexation of Crimea or related to assets forfeited for violations of certain export controls.
The U.S. and three of its partners this week expanded the list of common high-priority items that exporters and others should closely monitor for potential diversion to Russia. The list includes seven new Harmonized System codes -- among them for bearings used for heavy vehicles and antennae used for navigation systems -- and was rearranged to provide “greater clarity” to exporters conducting due diligence on shipments.
The U.N. on Sept. 18 officially ended its sanctions regime against Mali, removing the eight people designated under the asset-blocking measures after Russia was the lone member to veto an extension of the sanctions for one year during an Aug. 30 meeting of the U.N. Security Council.
The Office of Foreign Assets Control this week sanctioned seven people and four entities in China, Iran, Russia and Turkey for their involvement with Iran’s drone development and production. The agency also updated the existing entry for U.S.-sanctioned Iran Aircraft Manufacturing Industrial Company (HESA) to add a new alias, saying that the company since last year has used the name Shahin Co. in contracts with overseas suppliers to evade U.S. sanctions and export controls.
A new Defense Department policy memo and guidance on foreign influence within American research institutions could exacerbate already complex export control due diligence challenges at universities, said Jackson Wood, director for industry strategy at Descartes. It also could lead to larger compliance risks for universities pursuing DOD-funded research, said Kit Conklin of compliance risk advisory firm Kharon.
The U.S. this week announced new Russia-related sanctions, designating more than 150 Russian business people, government officials, financial institutions, technology suppliers and foreign companies for supplying Russia with controlled goods or aiding the government. The sanctions include nearly 100 new designations imposed by the Treasury Department and more than 70 designations by the State Department and are designed to undermine Russia’s military supply chains, Treasury Secretary Janet Yellen said.