Passport to Economic Sanctions

Overview of framework for current Russian program

• Which authorities are implementing Russia-related restrictions
• Comprehensive review of Russian sanctions evolution and what is on the horizon

“Who” Based Restrictions

• Asset freezing restrictions including primary targets (banks, oligarchs, politicians, defense industry)

“Where” Based Restrictions

• Embargoes on Ukrainian occupied territories
• Key Differences across US, EU, and UK
  • “Transactions” Prohibitions: US & EU
  • Limited list-based sanctions: the “sectoral” sanctions program current

“What” Based Restrictions

• Trade Controls: Export & Import Restrictions
• Professional Services Ban
• Investment bans
• Capital market / securities restrictions
• Shipping, Aircraft, and Trucking
• Shadow fleet
• Oil and gas

Ownership & Control Assessment: Understanding the U.S.’ 50% Rule

Core Elements of Compliance, Screening and Monitoring: Meeting OFAC expectations

Detecting Russia sanctions compliance weak spots: Best practices for strengthening compliance

Export Controls and the Interplay with Economic Sanctions

• Rising expectations on financial institutions (FinCEN Advisory and recent BIS Guidance)
• “Technical assistance” and related services controls
• Diversion risks in the export controls and sanctions contexts

Enforcement

• How violations of U.S. sanctions on Russia have been enforced: Scope of penalties
• Key lessons from significant cases: How to strengthen compliance

The Essentials of U.S. Sanctions on China

• Use of The Entity List and the 50% Rule to cover beneficial ownership
• Xinjiang and human rights-related designations, and the interplay with UFLPA
• CMIC sanctions
• Trump Administration Sanction Actions
• Limitations on scope
  • CMIC-listed entities only
  • U.S. facilitation of foreign investments

Understanding OFAC’s Guidance and How to Apply It

Chinese Blocking Statute

• Reporting requirement on Chinese companies
• Prohibition on compliance with “foreign law”
• Private right of action
• Identification of “extraterritorial” laws – current status
• Pending identification of “extraterritorial” laws
• Potential for aggressive enforcement compared with the EU
• Chinese Retaliation

China’s Anti-Foreign Sanctions Law

• Risk retaliatory measures for compliance with foreign sanctions in China
• Exposure to countersanctions by Beijing against persons or entities instigating or implementing sanctions
• Retaliation for U.S. and EU sanctions over Xinjiang and Hong Kong

Chinese Data Security Law

• New data security law requiring all companies in China to classify data
• New rules regarding “critical information infrastructure”
• Ambiguous classification and handling requirements
• How will these new rules be enforced?
• China’s Unreliable Entity List
• Chinese consumer backlash

This session will provide you with a complete guide to the EU and UK Sanctions landscapes—and their application to European, U.S., and other foreign-owned multinationals.

The U.S. has worked closely with the UK and Europe on sanctions implementation. However, there still remains many differences and nuances amongst all three sanctions regimes. Topics of discussion to include:

Demystifying EU/UK Sanctions Regimes:

• Asset Freezes and Travel Bans
• “Any Transaction” Prohibition
• Restrictions on SWIFT access for financial institutions
• Investment restrictions
• Oil Price Cap
• Professional services ban
• 11th EU Sanctions Package

EU/UK Ownership & “Control” Analysis: How can you prove control? What are the key differences with U.S. requirements?

Examining EU Regulations and Member State implementation and enforcement

• Review of UK sanctions and export controls – OFSI and DIT implementation
• Comparing and contrasting EU, UK, and US sanctions

Iran

• Jurisdictional scope
• Impact of recent developments
• Evolution of the U.S. embargo since JCPOA withdrawal
• Other, overlapping sanctions: IRGC, SDGT, NPWMD, etc.
• Frequently used general licenses and their practical limitations
• Broad array of secondary sanctions authorities
• Section 13(r) of the Exchange Act: SEC reporting requirements for public companies

Cuba

• More expansive jurisdictional scope than other programs
• Differences in exemptions (no travel exemption under TWEA) and civil penalties (TWEA’s statutory maximum penalties are lower)
• Broad prohibitions apply to all Cuban nationals
• General licenses allowing dealings with Cuban nationals permanently residing outside of Cuba

Venezuela

• The Government of Venezuela (GoV) and state-owned entities, including PdVSA, that are blocked
• Various other sanctions apply to Venezuelan bonds, new debt, purchases of securities from the GoV, pledges of collateral by the GoV, and transfers of equity interests owned by the GoV
• Blocking sanctions have been imposed on persons operating in certain sectors
• Discussion of key general licenses

Understanding sanctions enforcement is critical for developing and strengthening an effective global sanctions compliance program. Our experienced instructors will unpack the essentials of U.S. sanctions enforcement, including the decision to voluntarily disclose to OFAC, the potential consequences of an OFAC enforcement action, and key lessons from recent cases.

Recent Key Enforcements and Lessons Learned

• Geofencing and IP address blocking
• Counterparty screening, due diligence, and/or compliance procedures
• Leveraging technological tools for sanctions compliance purposes
• Preparing a voluntary self-disclosure
• Remediation and corrective actions
• OFAC’s enforcement guidelines and penalty calculations
• Civil versus criminal enforcement / liability
• Supply chain due diligence
• Parent and successor liability
• U.S. sanctions jurisdiction over non-U.S. persons

How Sanctions Enforcement and Disclosures Arise

• Internal investigations and blocking or rejecting reports
• Notices from other parties
• Responding to OFAC subpoenas and requests for information
• Considerations for whether to make a voluntary self-disclosure

Factors Affecting Enforcement Outcomes

• No action letters, cautionary letters, finding of violations, settlements, penalty notices, and criminal referrals
• Public versus private dispositions
• Sanctions enforcement as punishment and policy

Hypothetical Exercises, Q & A, and Review on the Do’s and Don’ts

Toward solidifying your understanding of the enforcement process, the instructors will take you through a series of hypothetical scenarios to help you apply and understand voluntary self-disclosure best practices. At the end of this module, instructors will provide additional clarification and guidance, and take your questions.

How to Submit a Specific License Application for Transactional Requests

• The information necessary for OFAC to consider the application “complete”
• Differences and similarities between a specific license application and a request for interpretive guidance on general licenses; confirming a license is necessary
• The role of an OFAC Statement of Licensing Policy or FAQs in a license application
• The interagency process – the roles of the State Department and/or Commerce Department in certain types of applications

How to Submit a License Application for the Release of Blocked Funds

• How does this type of license application differ from a Transactional Request?
• Types of information required for OFAC to process the application
• What is the process for these types of applications?

During the first half of this session, faculty will discuss how to effectively work with OFAC. During the last half, proficiency assignment questions will be reviewed, and participants will gain feedback from instructors. Topics to be discussed include:

Other Types of OFAC Licensing Communications

• General License and Guidance Letters – what do these do?
• Denial Letters – what happens if your license application is denied

When and How to Contact OFAC

• Understanding the timing of getting an OFAC response; how it varies by case
• The difference between a formal OFAC determination and the OFAC Compliance hotline

Award of “Passport to Proficiency”

Participants who have completed all Modules will receive a certificate reflecting their proficiency in the essentials of Economic Sanctions.