In April 2020, the court of Rotterdam (Netherlands) ruled in a case concerning the legal question if there is force majeure (“overmacht”) if a contracting party is prevented from preforming a due performance, because of secondary United States (“US”) sanctions. In August 2020, a court decision of the Amsterdam Court of Appeal was published regarding an enhanced client / customer due diligence based on the Dutch Money Laundering and Financing of Terrorism (Prevention) Act (“Wwft”). In Europe, Germany, France and Italy agreed on a list of companies and individuals transporting weapons to Libya, in violation of a United Nations (“UN”) embargo. In the US, President Trump signed an executive order banning transactions between US individuals or entities and the Chinese parent company of social media app TikTok. This, and more, in this newsletter.
1. The Netherlands
- Court of Rotterdam: Secondary US-sanctions
On 6 April 2020, the court of Rotterdam ruled in a case concerning the legal question if there is force majeure (“overmacht”) if a contracting party is prevented from preforming a due performance, because of secondary US sanctions. In this case, two companies (Pipe Survey and PGP) concluded an agreement under Dutch law. Under the agreement, Pipe Survey was required to inspect pipelines of PGP in Iran. After the agreement was concluded, it became known that the US imposed sanctions against Iran. Because of this, compliance was impossible due to these sanctions. The court of Rotterdam ruled that in this case, there was no force majeure.
- Minister Blok: Increasing number of cyberattacks in the Netherlands
On 30 July 2020, the Dutch Minister of Foreign Affairs, Stef Blok, said that the Netherlands is confronted with an increasing number of cyberattacks. Often, these attacks are launched from outside the European Union (“EU”), like the one against the Organisation for the Prohibition of Chemical Weapons, which was carried out by the Russian military intelligence service GRU in The Hague in April 2018. “Fortunately, Dutch intelligence services managed to disrupt this,” minister Blok remarked. “Now the EU is demonstrating that it can take effective action against malicious actors.”
- Court of Appeal of Amsterdam: Enhanced client / customer due diligence based on Wwft
On 7 August 2020, a court decision of the Amsterdam Court of Appeal was published regarding an enhanced client / customer due diligence based on the Wwft.
2. European Union & United Kingdom
A. European Union
- Germany, France, Italy / Libya – According to a 10 August 2020 article of news agency Al Jazeera, Germany, France and Italy agreed on a list of a list of companies and individuals transporting weapons to Libya, in violation of a UN embargo. “The three countries have agreed on a list of companies and individuals providing ships, aircraft or other logistics for the transport of weapons, in violation of a UN embargo that has been in place since 2011”, according to the article of Al Jazeera.
B. United Kingdom
- UK / Hong Kong – On 4 August 2020, following a statement of the Foreign Secretary of the United Kingdom (“UK”) in July 2020, the Export Control Joint Unit of the UK has removed Hong Kong as a permitted destination from 20 open general export licenses, one open general transhipment licence and one open general trade control licence. Instead, exporters should apply for standard individual licenses for authorization to export items to Hong Kong.
3. United States of America
A. US – China (/ Hong Kong) Relations
- On 2 August 2020, US Secretary of State, Michael Pompeo, warned in an interview with Fox News of sanctions on the Chinese government, their businesses and state-owned enterprises if China approves the 400 billion dollar economic and security deal with Tehran (Iran), which is said to constitute closer cooperation on defence and intelligence sharing.
- According to a 6 August 2020 press release of the US Department of Justice, a Manhattan federal court filed a criminal complaint charging the president of America Techma Inc., Chong Sik Yu, and sales representative Yunseo Lee with conspiracy to unlawfully export dual-use electronics components to Hong Kong and China, conspiracy to commit wire fraud and bank fraud and conspiracy to launder money.
- On 6 August 2020, the Trump Administration issued two new executive orders, one on “Addressing the Threat Posed by TikTok” and one on “Addressing the Treat Posed by WeChat”. The Trump Administration specified that the spread in the US of mobile applications developed and owned by companies in China threatens the national security, foreign policy and economy of the US. To deal with this threat, the executive orders prohibit, from 20 September 2020 onwards, any transaction by any US individual or entity with ByteDance Ltd. (the Chinese company which owns TikTok) and Tencent Holdings (when transactions relate to WeChat).
- TikTok, a video-sharing mobile application, is said to automatically capture “vast swaths of information from its users, including Internet and other network activity information such as location data and browsing and search histories”. According to the Trump Administration, “this data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information – potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage”. Moreover, TikTok is said to censor content that the Chinese Communist Party “deems politically sensitive, such as content concerning protests in Hong Kong […] and may be used for disinformation campaigns that benefit the Chinese Communist Party”.
- WeChat, a messaging, social media, and electronic payment application is also said to capture vast swaths of information from its users. According to the Trump Administration, “this data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information. In addition, the application captures the personal and proprietary information of Chinese nationals visiting the United States, thereby allowing the Chinese Communist Party a mechanism for keeping tabs on Chinese citizens”. Moreover, WeChat, like TikTok, is said to censor content that the Chinese Communist Party “deems politically sensitive and may be used for disinformation campaigns that benefit the Chinese Communist Party”.
- On 7 August 2020, the US Office of Foreign Assets Control (“OFAC”) imposed sanctions on 11 individuals for “undermining Hong Kong’s autonomy and restricting the freedom of expression or assembly”. The designated individuals include Carrie Lam (Chief Executive of Hong Kong), Chris Tang (Commissioner of Hong Kong Police Force) and Stephen Lo (former Commissioner of Hong Kong).
- According to a 10 August 2020 news release of news agency Reuters, “China imposed sanctions on 11 US citizens including lawmakers from President Donald Trump Republican Party on Monday in response to Washington’s imposition of sanctions on Hong Kong and Chinese officials accused of curtailing political freedoms in the former British colony”.
B. US – Iran Relations
- On 5 August 2020, US Secretary of State, Michael Pompeo, stated at a press conference that next week, the US “will put forward a resolution in the [UN] Security Council to extend the arms embargo on Iran”, which is due to expire on 18 October 2020.
C. US – Libya Relations
- On 6 August 2020, the OFAC designated two Libyan nationals, one Maltese individual, one Maltese entity and a vessel described as a “network of smugglers contributing to instability in Libya”. The Libyan national, acting as operator of the vessel, has smuggled together with his associates fuel from Libya to Malta “and used Libya as a transit zone to smuggle illicit drugs”.
4. Around the Globe
- UNSC / Somalia – On 3 August 2020, the United Nations Security Council (“UNSC”) Committee concerning Somalia issued an Implementation Assistance Notice, which provides a summary of the export controls on components which pose a significant risk of being used to manufacture improvised explosive devices (“IEDs”). IEDs are increasingly used in the Al-Shabaab attacks in Somalia and beyond. The notice provides a list of components used to manufacture IEDs. Moreover, details are provided on the restrictions, notification requirements and procedures in relation to the sale, supply or transfer of such components to Somalia are set out.
- UNSC / Central African Republic – On 5 August 2020, the UNSC Committee concerning Central African Republic added Bi Sidi Souleman, president and self-proclaimed “general” of Central African Republic-based militia group Retour Réclamation, Réhabilitation to its sanctions list. The group is said to have “killed, tortured, raped, and displaced civilians and engaged in arms trafficking, illegal taxation activities, and warfare with other militias since its creation in 2015”. According to the press release “Bi Sidi Souleman himself has also participated in torture” and while the group signed the Political Agreement for Peace and Reconciliation in the Central African Republic, they have “engaged in acts violating the Agreement and remains a threat to the peace, stability and security of [the Central African Republic]”.
- According to a 7 August 2020 news article of the UN, “a group of UN independent human rights experts have called on countries to lift – or at the very least, ease – sanctions to allow affected nations and communities access to vital supplies to fight against the global coronavirus pandemic”. According to the news release, “sanctions are bringing suffering and death in countries like Cuba, Iran, Sudan, Syria, Venezuela and Yemen”.
- Japan – According to a 11 August 2020 news article of the Japan Times, all universities in Japan now control exports of sensitive technology after Universities in Japan faced growing calls to tighten their export controls, taking into account that Japanese institutions have started to rely significantly on Chinese nationals in the field of high-tech research. “Universities are supposed to ensure their technologies are not transferred overseas by using checklists to decide whether to accept international students and researchers, as well as whether to allow them to transfer their research results and other materials” according to the guidelines.
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