Sanctions & Export Controls: Moves and Countermoves

In March 2021, two export control-related rulings of Dutch Courts of Appeal were issued. In the first ruling, the Court of Appeal of Amsterdam discussed the meaning of the criterium “specially designed for military use” and held that in order to determine whether a product has been specially (re)developed for military use, the complete system (i.e. hardware and software together), must be assessed. In the second ruling, the Court of Appeal of The Hague held that an Iranian businessman could not be extradited from the Netherlands to the US, as that would amount to a violation of his right to family life (because the businessman had an underage daughter in the Netherlands). In the EU, the European Parliament published a press release that stated that it agreed to new EU export rules on dual use items. The UK and the US sanctioned entities in Myanmar, China and Russia. China sanctioned persons and entities in the EU, UK, US and Canada. This, and more, in this newsletter.

1. The Netherlands

  • Netherlands – On 24 March 2021, the Court of Appeal of Amsterdam rendered a judgment concerning a denied export license application. The Court of Appeal of Amsterdam ruled that the product in question was a “military good” within the context of the EU Common Military List, that the Minister of Foreign Trade and Development Cooperation rightfully denied the requested export licence, and that the plaintiff needed an export licence for the export of this good. One of the topics discussed by the Court of Appeal was the meaning of the criterium “specially designed for military use”. During the appeal, the Minister of Foreign Trade and Development Cooperation reiterated her position that had been rejected earlier by the District Court of North Holland – according to which the complete system of a product, i.e. the hardware and software has to be assessed in order to determine whether a product has been specially (re)developed for military use. The Court of Appeal of Amsterdam agreed with the Minister. The Court of Appeal considered the product to be a military good requiring an export licence and that the Minister was right to have rejected the application for an export licence – interestingly using Wikipedia as a substantive source in the case. The judgment of the District Court of Noord-Holland was overturned.

  • Netherlands – On 30 March 2021, the Court of Appeal of The Hague rendered a judgment regarding an Iranian businessman who was arrested in the Netherlands because the US authorities had requested his extradition on suspicion of having been involved in the export of “dual use” goods to Iran. The District Court of Rotterdam had ruled earlier in this case that the alleged crimes for the purpose of prosecution of which the US requested the appellant’s extradition are also punishable in the Netherlands and that the extradition of the appellant to the US for those offences was admissible. The Dutch Minister of Justice and Security subsequently decided to extradite the appellant. The appellant and his underage daughter appealed this decision, based on the right of family life (ex Article 8 of the European Convention on Human Rights (“ECHR“)). The Court of Appeal of The Hague noted that if the appellant were to be extradited to the US, he would only have very limited contact with his daughter. Visits to the US’ correctional facility by persons of Iranian nationality, or telephone contact or image calling from the facility with persons in Iran, would be impossible. In practice the appellant would only be able to maintain contact with his daughter by means of letters (censored by US authorities). The Court of Appeal considered this contrary to Article 8 ECHR, which protects the right to family life and thereby prohibited The Netherlands from extraditing the detainee.

  • Netherlands – On 2 April 2021, the Dutch Minister of Foreign Affairs and the Minister of Economic Affairs and Climate Policy answered Parliamentary Questions of members of the Dutch House of Representatives. The questions related to strategic dependencies in the energy domain. Several sanctions and export control related subjects were discussed, such as the EU-Russian-sanctions regime, human rights sanctions regimes, Nord Stream 2, energy exports and the export of (energy related) knowledge and technology.

  • Netherlands – On 9 April 2021, the Dutch Minister of Foreign Trade and Development Cooperation answered Parliamentary Questions of members of the Dutch House of Representatives. The questions related to a report that Huawei is investing in technology for the ethnic profiling of Uyghurs.

2. European Union & United Kingdom

a. European Union

  • EU – On 11 March 2021, the Commission Implementing Regulation (EU) 2021/442 making the exportation of certain products subject to the production of an export authorisation, was published in the Official Journal of the EU. In January 2021, the European Commission adopted a regulation making the export of COVID-19 vaccines subject to an export authorisation. Implementing Regulation (EU) 2021/111 renewed the controls on exports of COVID-19 vaccines for a period of six weeks.

  • EU / Turkey – On 22 March 2021, the High Representative of the EU for Foreign Affairs and Security published a Joint Communication regarding the “State of play of EU-Turkey political, economic and trade relations“. According to the Joint Commission, Turkey has shown a calmer and more constructive attitude on various issues, including in its bilateral relations with several EU Member States. It advised that the EU should put a number of possible areas of cooperation on the table to allow for a progressive, proportionate and reversible approach, namely on migration and resettlements management and the strengthening of economic ties (pp. 13-14).

  • EU – On 25 March 2021, the European Parliament published a press release that stated that it agreed to new EU export rules on dual use items. According to the press release, the European Parliament backed a new set of rules for the export of dual use products and technologies, including cyber-surveillance tools. The update was made necessary by technological developments and growing security risks, and includes new criteria to grant or reject export licences for certain items. These criteria will also feature substantially stronger human rights considerations to avoid that surveillance and intrusion technologies exported from the EU contribute to human rights abuses.

b. United Kingdom

  • UK – On 22 March 2021, the Export Control Joint Unit of the UK Department for International Trade published an updated version of the Guidance “Exporting military or dual-use technology: definition and scope“. The Guidance sets out how the Export Control Joint Unit defines technology and the scope of the regulations around transferring military or dual-use technology.

  • UK / Myanmar – On 25 March 2021, the UK Office of Financial Sanctions Implementation published a Financial Sanctions Notice regarding Global Human Rights. The notice states that the Myanmar Economic Holdings Public Company Ltd is added to the UK Sanctions List and is subject to an asset freeze.

3. United States of America

  • US / Myanmar –On 25 March 2021, the US Department of the Treasury’s Office of Foreign Assets Control (“OFAC“) designated two military holding companies in Myanmar: the Myanmar Economic Holdings Public Company Limited and Myanmar Economic Corporation Limited. According to a press release of OFAC, the military of Myanmar controls significant sectors of Myanmar’s economy through these two companies. The two companies dominate certain sectors of the economy, including trade, natural resources, alcohol, cigarettes, and consumer goods.  These US-sanctions specifically target the economic resources of the military regime in Myanmar, which is responsible for the coup d’état against the democratically-elected government in early February 2021 and the ongoing repression of the population of Myanmar.

  • US – On 25 March 2021, the US Department of Justice seized two websites that were being used by the illegitimate Kata’ib Hizballah, a Specially Designated National and a Foreign Terrorist Organization. The news release states that the US would continue to aggressively disrupt the activities of foreign terrorist organizations such as Kata’ib Hizballah and their efforts to use US cyber infrastructure to harm US national security.

  • US / ICC – On 1 April 2021, US President Biden revoked an Executive Order imposed by the previous US administration and terminated the national emergency with respect to the International Criminal Court (“ICC“). As a result of this, the sanctions of ICC Prosecutor Fatou Bensouda and ICC Head of the Jurisdiction, Complementarity and Cooperation Division of the Office of the Prosecutor (Phakiso Mochochoko) were lifted. The Department of State also terminated the separate 2019 policy on visa restrictions on certain ICC personnel. In a press statement (d.d. 2 April 2021), US Secretary of State Antony Blinken maintained however, that the US continued to disagree with the ICC’s actions relating to Afghanistan and Palestine.

  • US / Syria – On 5 April 2021, OFAC updated its Syria-related Frequently Asked Questions, and added two questions and answers: Q884 and Q885. The first question is related to US-secondary sanctions (Q884) and the second question is related to humanitarian assistance (Q885).

a. US – Iran Relations

  • US / Iran – On 5 March 2021, the US renewed its sanction regime in respect of Iran for one year.

b. US – China Relations

  • US / China, Hong Kong – On 5 March 2021, the US Attorney’s Office of the District of Massachusetts published a press release regarding the sentencing of a man from California for illegally exporting cesium atomic clocks to Hong Kong. Cesium atomic clocks can be used in encryption programs, network timing protocols, global positioning system solutions,  and national defense and space applications.

  • US / China – On 8 April 2021, the Bureau of Industry and Security of the US Department of Commerce (“BIS“) has added seven Chinese supercomputing entities to the BIS-Entity List for conducting activities that are contrary to the national security or foreign policy interests of the US. The US Secretary of Commerce released the following statement: “Supercomputing capabilities are vital for the development of many – perhaps almost all – modern weapons and national security systems, such as nuclear weapons and hypersonic weapons. The Department of Commerce will use the full extent of its authorities to prevent China from leveraging US technologies to support these destabilizing military modernization efforts“.

c. US – Russia Relations

  • US / Russia – On 2 March 2021, the US imposed sanctions on Russia for the poisoning in August 2021 and subsequent imprisonment of Aleksey Navalny, Russian opposition figure. The US Department of State, thereby expanded existing sanctions under the US Chemical and Biological Weapons Control and Warfare Elimination Act of 1991, implemented measures under Executive Order 13382, which targets weapons of mass destruction proliferators, as well as under the Countering America’s Adversaries Through Sanctions Act against multiple Russian individuals and entities associated with the Russian Federation’s chemical weapons program and defense and intelligence sectors. The US Department of State also amended the International Traffic in Arms Regulations to include Russia in the list of countries subject to a policy of denial for exports of defence articles and defence services, with certain exceptions for exports to Russia in support of government space cooperation.

  • US / Russia – On 11 March 2021, a final decision of BIS was published in the US Federal Register, the Daily Journal of the US Government. According to the final decision, a US businessman exported US-origin electronic components to Russian entities on BIS’s Entity List. The final decision of BIS states that the US businessman – Alexander Brazhnikov – was denied export privileges for 15 years on account of his export of regulated items to Russian end-users without the required licences.

4. Around the Globe

a. China

  • China / EU – On 22 March 2021, China’s Foreign Ministry sanctioned ten European individuals and four entities in response to the EU Uyghur-related sanctions of 22 March 2021. The individuals are five members of the European Parliament, three members of national parliaments (including Dutch politician Sjoerd Wiemer Sjoerdsma) and two academics specialised in China studies. The entities are the Political and Security Committee of the Council or the EU, the Subcommittee on Human Rights of the European Parliament, the Mercator Institute for China Studies in Germany and the Alliance of Democracies Foundation in Denmark.

  • China / UK, US, Canada – On 26 March 2021, the Chinese Ministry of Foreign Affairs announced sanctions on British entities and nationals in response to the British Uyghur-related sanctions. As of 26 March 2021, “the individuals concerned and their immediate family members are prohibited from entering the mainland, Hong Kong and Macao of China, their property in China will be frozen, and Chinese citizens and institutions will be prohibited from doing business with them“. The next day – on 27 March 2021, the Chinese Ministry of Foreign Affairs announced similar sanctions against entities and nationals from the US and Canada.

b. Other

  • Canada, Australia / Russia – On 29 March 2021, the Canadian and Australian governments announced sanctions against Russia. According to a statement of 30 March 2021 of the Australian Minister for Foreign Affairs “Australia has imposed targeted financial sanctions and travel bans against a Russian individual and four Russian companies connected to the construction and operation of the Kerch Strait Railway Bridge linking Russia to the illegally annexed territories of the Autonomous Republic of Crimea and the city of Sevastopol, Ukraine” (see also the Canadian press release d.d. 29 March 2021). The measures align with actions taken by the EU and the UK.

  • UNSC / Libya – On 8 March 2021, the Final report of the Panel of Experts on Libya established pursuant to Security Council resolution 1973 (2011) was published. In this report the United Nations Security Council says that the Libya arms embargo is “totally ineffective”: “For those Member States directly supporting the parties to the conflict, the violations are extensive, blatant and with complete disregard for the sanctions measures. Their control of the entire supply chain complicates detection, disruption or interdiction. These two factors make any implementation of the arms embargo more difficult” (p. 2).


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