The Dutch Court of Appeal acquits a logistics carrier, the US Department of Commerce further restricted access by Huawei to items (microchips) developed or produced from US technology and software, and added 38 Huawei affiliates across 21 countries to the Entity List of the US. Wintershall Dea, one of five western partners in the Nord Stream 2 gas pipeline project led by Russia’s Gazprom, continues its works on the Nord Stream 2 project, in spite of US secondary sanctions against the project. The Dutch government has published a general overview regarding the Brexit transition period, confirming the fact that an export license will be required for the (onward) delivery of strategic goods (in particular dual-use goods) to the United Kingdom (“UK”), after the transition period (which ends on 31 December 2020). This, and more, in this newsletter.
1. The Netherlands
- Court of Appeal of Amsterdam (10 July 2020): Conviction of transit of military goods without a license overturned – full acquittal in appeal
On 10 July 2020 the criminal chamber of the Court of Appeal of Amsterdam ruled in a case regarding the transit of military goods without an export license. The defendant in this case, a logistics carrier, provided services at Schiphol Airport for certain airlines, notably selling of cargo space on aircraft to third parties and related supporting services such as instructing the party which actually loads and unloads the aircraft. The Court ruled that the services provided by the defendant did serve the transport, but this does not make the defendant the, or one of the, transporters or carriers of the goods. The Court held that only the transporter/carrier is required by law apply for an export licence and that, therefore, only such a party can be held criminally liable for not having applied for one where they should have. The Court acquitted the defendant of all charges. The judgment is remarkable as it is a marked departure from the Regional Court’s earlier judgment in this matter of 24 April 2017. That Court had convicted the same defendant for the exact same facts of illegal export of military goods and fined him EUR 50,000. It held that this defendant was in fact – together with the transporter/carrier – responsible for the application of an export licence. Case law like this – of which there is more – shows that Dutch criminal law is still in development on the topic of sanctions and export control, leaving all those working in the field in uncertainty.
- The export of military equipment to Egypt
On 17 August 2020, Dutch Minister Kaag (Minister of Foreign Trade & Development Cooperation) and Dutch Minister Blok (Minister of Foreign Affairs) provided answers to parliamentary questions concerning the granting of a license for the export of military equipment to Egypt. The licensed equipment will be placed on a Gowind military ship used by Egypt. The questions were directed at the possible use of the military items as regards to the situation in Yemen and possible human rights violations. The ministers note that the situation in and around Yemen is closely monitored. Reference is made to a recent rapport of the European Parliament, which makes clear that at the moment there is no direct connection between Egypt and the human rights violations in Yemen. Moreover, the ministers note that the license has been granted with due consideration of the EU Common Position, defining common rules governing control of exports of military technology and equipment.
- General overview regarding Brexit transition period
On 20 August 2020, the Dutch government published a general overview regarding the Brexit transition period. With regard to export controls, the Dutch government said that the European Commission (“EC”) will add the UK to the list of countries for which a European Union (“EU”) licence is required. This obligation will apply after the transition period (31 December 2020). An export license will be required for the (onward) delivery of strategic goods (in particular dual-use goods) to the UK. Such deliveries must be reported to the Central Import and Export Service (“CDIU”). The CDIU has been notified and prepares for an increase in applications.
- Monthly reporting on exports of dual-use goods
On 21 August 2020, the Dutch Ministry of Foreign Affairs published its monthly overview of the licenses issued for dual-use goods. The overview states which goods are involved, what the end-use is, what the value of the goods is and what the country of destination is. The information therefore shows which dual-use goods are exported from the Netherlands. The names of the exporter and the end user have not been disclosed.
2. European Union & United Kingdom
A. European Union
- EU / Belarus – On 19 August 2020, the EU Council issued conclusions on Belarus, stating that the EU does not recognise the results of the 9 August 2020 elections and condemns the “disproportionate and unacceptable violence displayed by the state authorities against peaceful protesters”. The EU moreover confirmed that it will “shortly impose sanctions against a substantial number of individuals responsible for violence, repression and the falsification of election results”.
B. United Kingdom
- On 18 August 2020, Global Investigations Review published figures indicating that from 2019 to 2020, the UK Financial Conduct Auhtority has dropped approximately half of its investigations into whether companies have established adequate safeguards to prevent sanctions violations.
3. United States of America
A. US – China Relations
- On 17 August 2020, the Bureau of Industry and Security (“BIS”) in the US Department of Commerce further restricted access by Huawei to items (microchips) developed or produced from US technology and software. In addition, BIS added 38 Huawei affiliates across 21 countries to the Entity List of the US, which “imposes a licence requirement for all items subject to the Export Administration Regulations”. These affiliates were added to the Entity List “because they present a significant risk of acting on Huawei’s behalf contrary to the national security or foreign policy interests of the United States”. In relation to this, it was noted that “there is a reasonable cause to believe that Huawei otherwise would seek to use them to evade the restrictions imposed by the Entity List”. According to the BIS, “these actions, effective immediately, prevent Huawei’s attempts to circumvent U.S. export controls to obtain electronic components developed or produced using US technology”.
- On 22 August 2020, FOX Business reported that schools across the US are facing shortages and long delays in getting laptops and other equipment needed for online learning. “The world’s three biggest computer companies, Lenovo, HP and Dell, have told school districts they have a shortage of nearly 5 million laptops, in some cases exacerbated by Trump administration sanctions on Chinese suppliers”, according to FOX Business. The US Commerce Department imposed sanctions on Chinese companies (including the manufacturer of multiple models of Lenovo laptops). School districts in the US are pleading with the Trump administration to resolve the issue.
B. US – Iran Relations
- On 20 August 2020, US Secretary of State, Michael Pompeo, announced the US’ intention to initiate the snapback mechanism in Resolution 2231 to try to prevent the UN arms embargo on Iran from expiring. As explained by a blog post of Opinio Juris, Resolution 2231 lifted prior sanctions imposed by the Security Council on Iran in the course of endorsing the 2015 nuclear deal “JCPOA”. In lifting the Security Council sanctions, the resolution contained a “snapback” provision, allowing participants to the JCPOA to reimpose the sanctions on Iran. This provision provides that “if a JCPOA participant State” notifies the Security Council of “an issue that the JCPOA participant State believes consittue4s significant non-performance of commitments under the JCPOA,” then all the prior Security Council sanctions will be re-imposed on Iran after 30 days, unless the Security Council affirmatively votes not to re-impose the sanctions. As explained by the blog post of Opinio Juris, this means, provided that the pre-conditions are met, that a JCPOA participant State who wields a Security Council veto can single-handedly force the re-imposition of prior Security Council sanctions.
In response to this event, the UK, France and Germany released a statement on 20 August 2020, saying that “the US ceased to be a participant to the JCPOA following their withdrawal from the deal on 8 May, 2018”.
4. Around the Globe
- UNSC / North Korea – On 13 August 2020, the United Nations Security Council (“UNSC”) approved an exemption, requested by the South Korean nongovernmental organization Medical Aid for Children, for a medial equipment assistance project aimed at providing healthcare services to children and other vulnerable groups in North Korea. The exemption from UN sanctions will last for six months.
- Nord Stream 2 – According to a 19 August 2020 article of news agency Reuters, Wintershall Dea, one of five western partners in the Nord Stream 2 gas pipeline project led by Russia’s Gazprom, rejected the sanctions planned by the US to discourage the completion of the project. On 11 August 2020, German utility Uniper said it may have to impair a loan provided to the planned Nord Stream 2 gas pipeline if the project collapses in the face of US sanctions. According to an article of Reuters of 2 August 2020, Poland’s anti-monopoly watchdog UOKiK fined Gazprom USD 57,000,000 over a lack of cooperation in its proceedings with regard to the Nord Stream 2 pipeline project.
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