Sanctions & Export Controls: January & February 2021

In the Netherlands, on 1 February 2021 a judgment of the District Court of The Hague was published regarding a ban on extradition to the United States of America (“US”). In the European Union (“EU”), several documents were published: (i) a human rights related guidance note, (ii) a regulation related to conflict minerals, and (iii) an implementing act to remedy the critical situation and to ensure timely and affordable access to COVID-19 vaccines for all EU Member States and their citizens. In the US, the Secretary of State announced that the US will not lift its sanctions against Iran, until Iran fully complies with the JCPOA. Moreover, the US vowed to protect US telecommunications networks from Chinese companies. Finally, the Ministry of Commerce of the People’s Republic of China published Order No. 1 of 2021 on Rules on counteracting unjustified extra-territorial application of foreign legislation and other measures (“Chinese Blocking Rules”). This, and more, in this newsletter.

1. The Netherlands

  • On 22 September 2020, the District Court of The Hague rejected a ban on extradition to the US of a person connected to the unlicensed (re-)export of American dual-use goods to Iran, which is an infringement of the Iran Sanctions Regulation 2012. In this case, the plaintiff was seeking an order from the Dutch state to extradite him to the US. The plaintiff said that articles 3, 6, 8 and 10 of the European Convention on Human Rights would be violated if he was extradited to the US. The Dutch Court did not agree with him and rejected the claim. The ruling was first published online on on 1 February 2021.

  • On 27 November 2020, the Dutch government presented in writing a package of measures to better ensure knowledge security in higher education and (applied) science. The measures are designed to prevent the undesirable transfer of knowledge and technology to third countries with damaging implications for the national security and respect for human rights (e.g. contribution to the development of weapons programmes, proliferation-sensitive activities) and the innovation strength of the Netherlands.

  • On 11 January 2021, in its annual report the Dutch Fiscal Intelligence and Investigation Service (“FIOD”) states that cooperation at national and international level is pivotal to many of its investigations into effective counter-fraud operations. Looking ahead, the FIOD predicts in 2021 more cooperation with private parties in its fight against money laundering.

  • On 20 January 2021, various fractions of the General Committee on Foreign Trade and Development Cooperation of Dutch Parliament have submitted questions to the Minister for Foreign Trade and Development Cooperation and the Minister for Foreign Affairs on arms export policy in the Netherlands. The questions submitted include the granting of a licence for the export of military equipment to Pakistan via Turkey, the adjustment of the arms export policy with regard to Hong Kong and the role of Dutch insurers in large investments in controversial arms trade.

  • On 31 January 2021, serious concerns were raised about the digital security of equipment made by the Chinese company Nuctech that is used by Dutch Customs in the port of Rotterdam, at airports and in distribution centres. Security experts fear that the Chinese Government, which partly owns Nuctech, could use the scanners for espionage or misuse the data collected.

2. European Union & United Kingdom

a. European Union

  • EU – On 1 January 2021 a new law came into force across the EU: Regulation (EU) 2017/821 of the EP and of the Council of 17 May 2017 laying down supply chain due diligence obligations for EU importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk areas (“Conflict Minerals Regulation”). The Conflict Minerals Regulation aims to help stem the trade in four minerals – tin, tantalum, tungsten and gold – which sometimes finance armed conflict or are mined using forced labour. The EU launched a website where the Conflict Minerals Regulation is explained: [LINK].

  • EU / Iran – On 11 January 2021, the High Representative of the EU declared its strong commitment to and continued support for the JCPOA. This is expressed following Iran´s confirmed activities regarding enrichment of uranium to 20% in the underground Fordow Fuel Enrichment Facility, which is in conflict with Iran’s JCPOA commitments.

  • EU / Russia – On 18 January 2021, the European Council issued a press release on the detention of the Russian opposition politician Alexei Navalny upon his return to Moscow on 17 January 2021. The EU further calls upon the Russian authorities to immediately release Mr. Navalny and all those persons detained in connection with his return.

  • EU – In 2018, Bolivia initiated proceedings before the General Court of the EU. These proceedings were related to the EU sanctions regime against Venezuela. The General Court of the EU found that Bolivia was not directly concerned and therefore had no standing. Bolivia appealed to the European Court of Justice and Advocate General Gerard Hogan, issued an opinion. On 20 January 2021, Hogan suggested that the European Court of Justice should rule that “the General Court erred in law in so far as it held that the present proceedings were inadmissible for want of standing on the part of the appellant for the purposes of the fourth paragraph of Article 263 TFEU”. This implies that a third state may have procedural power in an action for annulment of restrictive provisions adopted by the European Council against that state.

  • EU / Russia – On 21 January 2021, in a resolution adopted by majority vote the European Parliament (“EP”) demanded additional EU sanctions against Russia following the recent imprisonment of Alexei Navalny and many of his followers. This will entail in practice sanctioning Russian oligarchs linked to the regime, members of President Putin´s inner circle and propagandists of the Russian media, owning assets in the EU and currently able to travel there. The EU is further called upon to immediately review cooperation with Russia in various projects, including the completion of the controversial pipeline, the Nord Stream 2.

  • EU / Venezuela – On 25 January 2021, the EC adopted conclusions on the outcome of the legislative elections of 2020 in Venezuela, that underline that the elections fell short of international democratic standards and that they were held without national agreement on electoral terms. The EU further supports the efforts of the UN High Commissioner for Human Rights and the UN Independent Fact-Finding Mission with the intent to hold accountable those responsible for any acts of repression.

  • EU – On 29 January 2021, the EC published the “Commission Implementing Regulation (EU) 2021/111 making the exportation of certain products subject to the production of an export authorisation” (“Implementation Act”). The Implementing Act was adopted in an effort to remedy the current critical situation and to ensure timely and affordable access to COVID-19 vaccines for all EU Member States and their citizens (see BenninkAmar Alert of 1 February 2021).

  • EU – On 3 February 2020, a Report from the EC on the implementation of Regulation (EC) No 428/2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items was published. The Report entails review of the export control policy that started in 2016, the updated EU Control List (Annex I), national implementation and enforcement measures, activities of the Dual-Use Coordination Group several implementation and enforcement issues and aggregated export control data for 2018.

b. United Kingdom

  • UK / EU, Turkey, Cyprus, Libya – On 4 January 2021, the UK government issued new regulations to assure continuity after the UK’s exit from the EU. Firstly, the Misappropriation (Sanctions) (EU Exit) Regulations 2020 has been issued to allow for financial sanctions against persons involved in misappropriation of state funds from a country outside the UK. Secondly, the Unauthorised Drilling Activities in the Eastern Mediterranean (Sanctions) (EU Exit) Regulations 2020 has been published to put in place sanctions against persons involved in drilling activities in the Eastern Mediterranean without authorisation of the Republic of Cyprus. Thirdly, the Libya (Sanctions) (EU Exit) Regulations 2020, made under the Sanctions and Anti-Money Laundering Act 2018, replaced the EU sanctions regime relating to Libya.

  • UK / EU – On 8 January 2021, the Government of UK has published changes to export control legislation and licensing to mark the end of the EU transition period.

  • UK / China – On 12 January 2020, the Foreign Secretary of the UK has announced business measures to help ensure that British organisations are not “complicit in, nor profiting from, the human rights violations in Xinjiang”. The violations of human rights include extra-judicial detentions and forced labour. The UK government further stated that it will review the export of British products to Xinjiang and that financial penalties for business that violating the Modern Slavery Act will be introduced.

  • UK / Burma – On 18 February 2021 the Foreign Secretary of the UK announced sanctions against members of the military of Burma for serious human rights violations following the military coup.

3. United States of America

  • US – On 31 December 2020 the Federal Emergency Management Agency (“FEMA”) extended and modified the export control restrictions of the original FEMA rule regarding certain types of medical supplies and personal protection equipment products in reaction to the COVID-19 pandemic.

  • US – On 1 January 2021, the National Defense Authorization Act for Fiscal Year 2021 of the United States of America (“US”) was adopted by the US Congress. This legislation includes provisions regarding sanctions against the Nord Stream 2 and Turk Stream Pipeline Projects, reporting measures on Chinese Military Companies and Export Controls for Hong Kong.

  • US – On 5 January 2021 the Office of Foreign Assets Control (“OFAC”) released its annual report of calendar year 2019 to the US Congress on assets in the US relating to terrorist countries and organizations engaged in international terrorism. The report discusses the background of economic sanctions and terrorism as an impactful tool against international terrorist and terrorist organizations, the nature of blocked assets, and the nature of sources of information that OFAC used in the report. In Part I an overview of blocked assets, including real and tangible property and blocked funds in the US, relating to international terrorist organizations is given. Furthermore, in Part II the reported blocked assets relating to state sponsors of terrorism (Iran, Sudan, Syria, and North Korea) are discussed.

  • US – On 21 January 2021, it was announced that the Biden administration is expected to review whether the existing multilateral sanctions on COVID-19 relief hinder the global response to the current pandemic.

  • US / Burma – On 1 February 2021,the White House released a statement by President Biden that the US will review its sanction laws regarding Burma, in response to the military coup in Burma and the detention of Aung San Suu Kyi and other civilian officials.

  • US – On 3 February 2021, a press briefing of the US Department of State was published on the website of the department. During this briefing, the following topics were discussed (among others): Nord Stream 2, sanctions, Protecting Europe’s Energy Security Act, Turk Stream, and Magnitsky sanctions.

  • US, FR, GE, UK / Iran – On 18 February 2021, a joint statement by the US Secretary of State, and the Foreign Ministers of the E3 was published. “Regarding Iran, the E3 and the US expressed their shared fundamental security interest in upholding the nuclear non-proliferation regime and ensuring that Iran can never develop a nuclear weapon. In this context, the conclusion of the JCPOA was a key achievement of multilateral diplomacy. The E3 welcomed the US’ stated intention to return to diplomacy with Iran as well as the resumption of a confident and in-depth dialogue between the E3 and the US. The Ministers affirmed strong interest in continuing their consultations and coordination, including with China and Russia, on this key security issue, recognizing the role of the High Representative of the EU as Coordinator of the Joint Commission”.

a. US – Iran Relations

  • US / Iran – On 27 January 2021, the US Secretary of State – Antony Blinken – announced that the US will not lift its sanctions against Iran, until Iran comes back into full compliance with the obligations the country has under the nuclear deal.

b. US – China Relations

  • US / China – On 5 January 2021, the Trump Administration issued Executive Order 13971 to address the threat posed by mobile and desktop applications and other software developed or controlled by Chinese Companies.

  • US / China – According to a 5 January 2021 news release of the US Department of the Treasury, the US imposes further sanctions on the Iranian metal industry: OFAC “designated a China-based supplier of graphite electrodes, a key element in steel production, as well as twelve Iranian producers of steel and other metals products, and three foreign-based sales agents of a major Iranian metals and mining holding company”.

  • US / China – On 13 January 2021, Executive Order 13974 was published, amending Executive Order 13959, addressing the threat from securities investments that finance Communist Chinese military companies. The revised Executive Order clarifies that the original intent was to prohibit continued “possession” of any securities of Chinese Communist military companies by a US person following the divestment period. The prohibitions came into force on 12 January 2021.

  • US / China – According to a 26 January 2021 news article of Reuters, the US vowed to protect US telecommunications networks from Chinese companies, such as Huawei. However, US President Biden’s nominee to head the US Commerce Department – Gina Raimondo – refused to commit to keeping Huawei on a US economic blacklist.

c. US – Russia Relations

  • US / Russia – On 8 January 2021, OFAC issued new and amended Ukraine-/Russia-related guidance under the Countering America’s Adversaries Through Sanctions Act by adding Frequently Asked Questions 869 and 870.

4. Around the Globe

a. China

  • On 9 January 2021, the  Ministry of Commerce of the People’s Republic of China published the Chinese Blocking Rules. These rules prohibit / restrict Chinese citizens, legal persons and other organizations from complying with foreign laws / legislation and measures. The Chinese Blocking Rules further serve as a countermeasure to US (and other) extra-territorial sanctions and export control restrictions that impact the business of Chinese individuals and companies.

  • On 20 January 2021, the Ministry of Foreign Affairs of the People’s Republic of China announced that “China has decided to sanction 28 persons who have seriously violated China’s sovereignty and who have been mainly responsible for such U.S. moves on China-related issues. They include Michael R. Pompeo […] as well as John R. Bolton and Stephen K. Bannon”.

b. Other

  • BIMCO – In February 2021 the Baltic and International Maritime Council (“BIMCO”) published a sanctions clause for the container shipping sector. The BIMCO Sanctions Clause for Container Vessel Time Charter Parties 2021 is intended to address two scenarios: (1) transactions with sanctioned parties and (2) voyages involving sanctioned cargo.

  • ICJ – On 3 February 2021, a press release and a judgement of the International Court of Justice (“ICJ”) were published. The ICJ delivered its Judgment on the preliminary objections raised by the US in the case concerning Alleged Violations of the 1955 Treaty of Amity, Economic Relations, and Consular Rights (Islamic Republic of Iran v. United States of America). The ICJ finds that it has jurisdiction, on the basis of the Treaty of Amity, Economic Relations, and Consular Rights of 1955, to entertain the application filed by the Islamic Republic of Iran on 16 July 2018, and that the said application is admissible.


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