In June/July 2020, the Dutch Ministry of Foreign Affairs noted an increased role for human rights in export controls. In the UK, the Foreign Secretary announced the introduction of the Global Human Rights Sanctions regime. In the US, Amazon.com has agreed to pay USD 134,523 “to settle its potential civil liability for apparent violations of multiple OFAC sanctions programs”. And furthermore, Iran has triggered the dispute resolution mechanism under JCPAO. This, and more, in this newsletter.
1. The Netherlands
In June 2020, the Dutch Ministry of Foreign Affairs published an annual report on human rights. The report contains an overview of worldwide Dutch human rights related efforts and results.
In 2018, the Netherlands already put the use of sanctions against sexual violence in conflict on the agenda of the UN Security Council as a preventive remedy. The Netherlands did this by adding specific sanction related criteria to the existing sanction regimes of South Sudan, Libya, and Somalia.
The Netherlands: Increased Role of Human Rights in Export Controls
The report of the Dutch Ministry of Foreign Affairs states that in the framework of export controls, specific goods are being checked (to prevent proliferation of weapons of mass destruction and unwanted military end-use) when they are being exported from the European Union (“EU”). A licensing system is being used, on the basis of a careful consideration regarding the nature of the goods and their final destination. During this assessment, the Dutch government gives human rights an important role.
In certain cases, companies are obliged to have an Internal Compliance Program (“ICP”). This ICP must include a section regarding the prevention of human rights violations. There is also an additional “human rights clause” for certain export licenses. These licenses state that exports should not take place if the exporter can suspect that human rights are violated. According to the report of the Dutch Ministry of Foreign Affairs, this applies to export licenses issued for specific goods and destinations that the Dutch government considers “a risk”, when it comes to human rights violations (p. 46).
2. European Union & United Kingdom
On 25 June 2020 the High Representative for Foreign Affairs and Security Policy of the European Union (“EU”), Josep Borrell, answered parliamentary questions regarding the intentions of the European Commission (“EC”) concerning Nord Stream 2.
On 25 June 2020, the General Court of the EU ruled in a case concerning restrictive measures taken in view of the situation in Ukraine and the freezing of funds (T-295/17, Klymenko).
On 25 June 2020, the Court of Justice of the EU (“CJEU”) ruled in a case regarding restrictive measures adopted in view of the Russian Federation’s actions destabilising the situation in Ukraine and the inclusion of the appellant’s name on the list of entities to which restrictive measures apply (C-729/18 P, VTB Bank PAO).
On 29 June 2020, the EU decided to renew the sanctions targeting specific economic sectors of the Russian Federation for a further six months, until 31 January 2021.
On 1 July 2020, Germany condemned the sanctions of the United States of America (“US”) against the construction of the Nord Stream 2 pipeline. According to a 1 July 2020 news article of the Financial Times (“FT”), Germany warns that the new sanctions of the US endanger the Nord Stream 2 pipeline.
On 1 July 2020, the EU published an updated version of an infographic about the EU sanctions against Russia.
On 3 July 2020, Lexology published an article regarding a case of the Court of Appeal of England and Wales regarding the interpretation of a contractual clause. According to the Court of Appeal, US secondary sanctions can be a “mandatory provision of law” in an English contract.
United Kingdom: First Human Right Sanctions
On 6 July 2020, the UK Foreign Secretary, Dominic Raab, announced the introduction of the Global Human Rights Sanctions regime. Raab told the UK Parliament of plans to “introduce a sanctions regime similar to the Magnitsky Act in the US, which authorised the government to freeze the assets and ban people from entering the country who were seen as human rights offenders”. The UK imposed economic sanctions on dozens of individuals and organisations from Russia, Saudi Arabia, Myanmar, and North Korea under new British powers to punish human-rights offenders (press release Al Jazeera, 6 July 2020).
That same day – on 6 July 2020 – the Secretary of State of the US, Michael Pompeo, said that the US commends the UK’s continued global leadership on the promotion and protection of human rights.
On 7 July 2020, Russia announced countermeasures as a response to the decision of the UK.
3. United States of America
A. Relation US – China – Hong Kong
In June 2020, China passed a wide-ranging new security law for Hong Kong, which makes it easier to punish protesters and which reduces the city’s autonomy (see news article BBC, 30 June 2020). According to a 26 June 2020 article of the FT, the US Senate unanimously passed a bill that would impose sanctions on Chinese officials who undermine the semi-autonomous status of Hong Kong, as well as the banks and state entities that do business with them. A couple of days later, the US House of Representatives unanimously passed the Hong Kong Autonomy Act (see news article Reuters, 1 July 2020).
In a 26 June 2020 press statement of US Secretary of State, Michael Pompeo, the US announced “visa restrictions on current and former Chinese Communist Party officials who are believed to be responsible for, or complicit in, undermining Hong Kong’s high degree of autonomy, as guaranteed in the 1984 Sino-British Joint Declaration, or undermining human rights and fundamental freedoms in Hong Kong. Family members of such persons may also be subject to these restrictions”.
The Trump administration placed new restrictions on US exports of defence equipment and certain high-technology products to Hong Kong, in response to the new law aimed at tightening China’s control over Hong Kong (see news article The New York Times, 29 June 2020). In a 29 June 2020 press statement, Pompeo says that China’s decision to “eviscerate Hong Kong’s freedoms has forced the Trump Administration to re-evaluate its policies toward the territory“. As China moves forward with passing the national security law, the US will end exports of US-origin defence equipment and will take steps towards imposing the same restrictions on US defence and dual-use technologies to Hong Kong as it does for China.
B. Settlement Agreement Between OFAC & Amazon.com
The Office of Foreign Assets Control (“OFAC”) of the US Department of the Treasury, announced on 8 July 2020 a settlement with Amazon.com (“Amazon”). Amazon has agreed to pay USD 134,523 “to settle its potential civil liability for apparent violations of multiple OFAC sanctions programs. As a result of deficiencies related to Amazon’s sanctions screening processes, Amazon provided goods and services to persons sanctioned by OFAC; to persons located in the sanctioned region or countries of Crimea, Iran, and Syria; and to individuals located in or employed by the foreign missions of countries sanctioned by OFAC”.
In June 2020, the US published an updated version of Frequently Asked Questions (“FAQ’s”) regarding the expansion of export, re-export, and transfer (in-country) controls for military end-use or military end-users in China, Russia, or Venezuela.
On 25 June 2020, the US Department of the Treasury published a press release stating that OFAC “took action against four steel, aluminium, and iron companies operating within Iran’s metals sector, including one subsidiary of Mobarakeh Steel Company — Iran’s largest steel manufacturer. Treasury is also designating one Germany-based and three United Arab Emirates (UAE)-based sales agents for being owned or controlled by Mobarakeh Steel Company”.
Moreover, US prosecutors filed a lawsuit to seize the gasoline aboard four tankers that Iran was trying to ship to Venezuela, according to a 2 July 2020, article of news agency Reuters.
4. Around the Globe
On 11 June 2020, the Security Council of the UN published a report regarding the implementation of Security Council Resolution 2231(2015), which endorses the Iran nuclear deal and imposes restrictions on arms exports to Iran. According to a 26 June 2020 news article of the Wall Street Journal (“WSJ”), China and Russia oppose an embargo extension against Iran. On 30 June 2020, the United Nations (“UN”) said it regrets that the future of the Joint Comprehensive Plan of Action (“JCPOA”) is in doubt but that, notwithstanding current challenges, a landmark deal is still the best way to ensure that Iran’s nuclear programme proceeds along a peaceful path.
On 4 July 2020, the Foreign Minister of Iran, Mohammad Javad Zarif, sent a letter to EU Foreign Policy Chief Josep Borrell to denounce the non-compliance of France, the UK and Germany (“EU3”) with the 2015 nuclear agreement after the EU3 drafted an anti-Iranian resolution at the IAEA Board of Governors. Iran triggered the dispute resolution mechanism under the JCPOA on the basis of “significant non-performance” of the EU3’s obligations under the deal.
On 2 June 2020, a Group of Experts of the UN on the Democratic Republic of the Congo (“Congo”) published its final report. “With regard to the arms embargo, several countries offered military training and delivered significant quantities of arms, ammunition, equipment and military vehicles to FARDC without prior notification to the Security Council Committee established pursuant to resolution 1533 (2004) concerning the Democratic Republic of the Congo. Civilian helicopters were transferred to FARDC and used for military operations” (UN Report 2020, p. 2).
On 25 June 2020, the Security Council of the UN renewed its Congo sanctions for one year.
According to a 23 June 2020, article of news agency NK News, a North Korean national received a four-week jail sentence in a Singaporean court, after pleading guilty to four counts of conspiracy to supply luxury goods to a Pyongyang department store in violation of UN and Singaporean sanctions.
On 26 June 2020, the UN published a report concerning Islamic State in Iraq and the Levant (“ISIL”) (Da’esh), Al-Qaida and the Taliban and associated individuals and entities on actions taken by Member States to disrupt terrorist financing.
If you want more information about one of the topics in this newsletter, such as the specific goods and destinations that the Dutch government considers a risk, or if your company is obligated to have an Internal Compliance Program, you can contact BenninkAmar Advocaten at: firstname.lastname@example.org.