2018 has already been active for U.S.-based sanctions and Denied Party Screening (DPS) with changes coming at an increasingly rapid pace. So far this year, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) acted on a number of items including the re-implementation of sanctions against Iran, the designation of Russian oligarchs and Venezuelan officials, the lifting of economic sanctions against Sudan, and more.
On August 1st, the Bureau of Industry added an additional 44 parties to the entities list (8 individual entities and 36 subordinate institutions). After multiple address and AKA’s were added, total entries to the entity list rose by 557 records.
With the rising costs of noncompliance, a continuous review of a global compliance strategy is critical to keep goods flowing. Market leaders are merging the tasks of modern DPS and traditional export compliance through single solutions. This allows companies to keep an eye of the bottom line while reducing risks with enhanced efficiency.
On June 27th, following the United States’ withdrawal from the Join Comprehensive Plan of Action (JCPOA), OFAC began adopting a number of sanctions against Iran that would eventually include:
- Revoking Iran-related General License H which had authorized U.S.-owned or controlled foreign entities to engage in transactions involving Iran that would otherwise have been prohibited.
- Revoking General License I authorizing transactions related to commercial passenger aircraft and related parts and services
- Amended § 560.534 (authorizing the importation into the United States of, and dealings in, certain Iranian-origin carpets and foodstuffs) and § 560.535 (authorizing certain related letters of credit and brokering services)
- Targeted sanctions on Iranian individuals and companies amounting to 145 additional designations.
These June 27th sanctions are in addition to several that were initiated immediately upon the United States leaving the JCPOA. After a 90 day wind-down period, these sanctions came fully in effect midnight on August 7th. They include sanctions on: transactions dealing with raw or semi-finished metals, including aluminum, steel, coal; software for integrating industrial processes; Iran’s automotive industry; and trade in gold or precious metals.
The final round of sanctions are scheduled to take effect on Nov. 5th. These are blocking sanctions regarding persons involved in or apart of the shipping, shipbuilding, and energy sectors of Iran; or those operating a port in Iran.
On April 6th, OFAC began introducing a number of sanctions targeting Russian oligarchs and the companies they control in response to “malign activity” across the globe. These sanctions an almost immediate effect as investors across the globe attempted to minimize the impact. This has already led to multiple management shakeups and divestitures from companies looking to be removed from the sanctioned list.
The April 6 designations not only prohibit any investment and business dealings by U.S. persons with the Russian companies, but, under the Countering America’s Adversaries Through Sanctions Act, also present the risk of secondary sanctions for non-U.S. persons who choose to do business with them following the wind-down period.
In response to positive actions taken by the Government of Sudan, the United States revoked Sections 1 and 2 of Executive Order 13067 “Blocking Sudanese Government Property and Prohibiting Transactions With Sudan”. Additionally, Executive Order 13412 “Blocking Property and Prohibiting Transactions with the Government of Sudan” was revoked in its entirety.
On June 29th, OFAC removed the Sudanese Sanctions Regulations from the Code of Federal Regulations.
On August 1st, The Department of Commerce’s Bureau of Industry and Security (BIS) added 44 Chinese entities to an export control lists. Among those added to the list are two state-owned enterprises, China Aerospace Science and Industry Corp. and China Electronic Technology Group Corp., as well as the multiple subsidiary institutions managed by the two. Some of the additional entries include high-tech research institutions such as China Electronics Technology Groups No. 13 Research Institute and No. 14 Research Institute.
This recent addition follows the termination of Denial Order against Chinese telecommunications giant ZTE.
Global Magnitsky Act
In June, OFAC announced another set of designations under the Global Magnitsky Act. The Act, expanded by Congress in 2016, targets serious human rights abusers and corrupt actions across the globe. These new sanctions include:
- Dominican Republic Senator Felix Amon Bautista Rosario for alleged corrupt activity in both the Dominican Republic and Haiti
- Cambodian national Hing Bun Hieng, the commander of Cambodia’s Prime Minister’s Bodyguard Unit.
- Israeli national Dan Gertler for alleged corrupt mining deals in the Democratic Republic of the Congo.
- Three Nicaraguan officials for alleged corruption and human rights violations related to the country’s deadly political uprising in April.
- Two Turkish nationals, Justice Minister Abdulhamit Gul and Interior Minister Suleyman Soylu in response to the arrest and detainment of American pastor Andrew Brunson
Counter Terrorism Designations
OFAC has also introduced a number of designations targeting terrorist organizations based in Pakistan. Specifically, OFAC designated as Specially Designated Global Terrorists the Milli Muslim League (MML), and seven members of MML’s senior leadership. According to OFAC, MML styles itself as a legitimate political party but operates under the control and direction of Lashkar-e Tayyiba, a U.N. and U.S. designated terrorist organization, using a variety of tactics to undermine the political process in Pakistan.
Minimize Risks with Proper Due Diligence Solutions
A review of denied, sanctioned and restricted parties, also referred to as Denied Party Screening or DPS, is required to minimize risk and to lessen the potential of substantial fines. Electronic transactions, business integration, and the continued rise of ecommerce, are linking companies with information and driving growth. However, increased connectivity adds risk, and a greater probability that business may be transacted with denied, sanctioned or restricted parties.
Descartes MK Denied Party Screening™
The Descartes MK DPS™ solution provides organizations of all sizes with easy-to-use options that quickly and efficiently screen customers, suppliers and/or trading partners against a comprehensive database of international restricted and denied party lists while offering comprehensive export compliance reviews. Customers can tailor screening processes to fit their unique risk parameters and flag potential compliance issues for prompt resolution.
Since 2017, Descartes MK DPS has added multiple list offerings to its comprehensive global database, making it one of the most accurate and up-to-date DPS databases available. These updates include:
- Department of State Cuba Restricted List
- Army Most Wanted Fugitives
- Europe’s Most Wanted Fugitives
- Netherlands National Terrorism List
- Narcotics Rewards Program
- New Zealand Wanted to Arrest List
- Turkey’s Most Wanted Terrorist List
- United Kingdom Proscribed Terrorist Groups
- Financial Consumer Alert List Malaysia
- Food and Drug Administration Warning Letter
- Malaysia Countering Financing of Terrorism
- Norwegian Black List
- Monetary and Financial Code France
- U.S. Coast Guard List of Vessels Prohibited
Click here for a full list of our DPS Solutions.
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