Sanctions & Export Controls: TikTok, Taiwan and other tensions

In the recent days of August 2020, the Minister of Foreign Affairs of the Netherlands responded to parliamentary questions about the illegal arms transfers from Iran to Yemen. In Europe, the Gymnich meeting, an informal meeting of the Ministers of Foreign Affairs of the European Union (“EU”) took place where they touched upon possible further sanctions on the Turkish drilling activities in the Eastern Mediterranean. In the United States of America (“US”), TikTok’s US sale has been put at risk following an update by China of its list of technologies subject to export controls. Moreover, fearing Hong Kong’s fate and a possible military conflict between China and Taiwan, Taiwan has increased its defence spending to the highest level ever. This, and more, in this newsletter.

1. The Netherlands

  • Responding to the illegal arms transfers from Iran to Yemen

On 26 August 2020, the Dutch Minister of Foreign Affairs, Stef Blok, provided answers to parliamentary questions about the alleged illegal arms transfers by Iran to the Houthi’s in Yemen and the imposition of sanctions. The Minister considers it to be of great importance that Iran and the Netherlands are, and will remain, in dialogue with each other. It is noted that the Netherlands sees no added value in the imposition of unilateral sanctions against Iran, like the US does, in response to these illegal arms transfers. According to the Minister, the introduction of sanctions in a broader context, such as in the context of the EU and the UN, is more effective in order to achieve set goals. The Cabinet does, however, share the concerns outed by the Parliament regarding the reported illegal arms shipments to Yemen, as this contributes to the continuation of the conflict in the area. The Minister reminds the Parliament that these concerns have been raised by the EU in the UN Security Council on 30 June 2020.

The Minister states that the Netherlands shares the concerns of the US regarding the expiration date of the arms embargo against Iran. The Netherlands supports the approach of seeking a solution in a broader context, together with China and Russia, whereby restrictions on arms deliveries to and from Iran are maintained and whereby the Joint Comprehensive Plan of Action (commonly known as the “Iran nuclear deal”) can continue to exist. The priority of the Netherlands and the rest of the EU however lies with maintaining the Iran nuclear deal. The Cabinet is very concerned about Iran’s breaches of the Iran nuclear deal and it supports the efforts of, among others, France, Germany and the UK to find a diplomatic solution, so Iran will again comply with the provisions of the deal.

2. European Union & United Kingdom

A. European Union

  • EU / Russia – On 24 August 2020, the EU Council announced that Montenegro, Albania, Iceland, Norway, Ukraine and Georgia again aligned themselves with the EU sanctions against Russia in response to the annexation of Crimea and Sevastopol. These sanctions were recently extended by the EU for one year.

  • EU / Turkey – On 28 August 2020, the EU Foreign Ministers held an informal meeting (Gymnich). Afterwards, Josep Borrell, the High Representative of the EU, noted at a press conference that the EU is clear and determined in defending the EU’s interests and solidarity with Greece and Cyprus as regards to Turkeys exploration for natural gas in the Eastern Mediterranean. For the dialogue with Turkey to advance, Borrell noted that Turkey has to refrain from unilateral actions. While dialogue with Turkey is the preferred approach, the Council also expressed a consensus to ask the relevant Working Groups to speed up their work in order to add individuals suggested by Cyprus to the list of the existing sanctions regime for the drillings in the Eastern Mediterranean, with a view to a rapid adoption. At the meeting, the Member States also agreed that in the absence of progress in engaging with Turkey, the EU could develop a list of further restrictive measures (sanctions), which could be discussed at the next EU summit on 24 September 2020. These measures could entail the listing of assets, including vessels, sanctioning the participation in activities considered illegal, meaning everything related to the illegal activities (mending, prohibiting the use of European ports, technologies and supplies). Furthermore, the EU could resort to measures relating to sectoral activities.

B. United Kingdom

  • In 2018, the High Court of England declared that the judgement against the Syrian state, won by reinsurers of an Egyptian aircraft that was hijacked in a terrorist attack in 1985, was enforceable in England. On this basis, the reinsurers asked the Government of England for the location of frozen funds of the Syrian state in order to satisfy the judgement. First, it was ruled that the EU Syria sanctions regime prevented it from disclosing that information. The High Court of England, however, ruled on 12 August 2020, that the Government does in fact have the power to release that information because it would “facilitate compliance” with the EU sanctions regime as this includes facilitating an authorisation request under article 18(1) of the EU Syria sanctions regime to release funds for a judgement creditor.

3. United States of America

A. US – Iran Relations

  • On 19 August 2020, the US Department of Justice published a notification stating that a complaint was submitted, charging two US citizens and one Pakistan national with violations of sanctions under the International Emergency Economic Powers Act. The complaint alleges that the charges “stem from the defendant’s campaign to transport US currency from the United States to Iran on behalf of the Supreme Leader of Iran”. According to the US Attorney for the District of Columbia, the case is significant on many levels. “To begin, as alleged in the criminal complaint, the defendants have considerable operational links to the IRGC [the Islamic Revolutionary Guard Corps], which has conducted multiple terrorist operations throughout the world over the past several years. The life-blood of these terrorist operations is cash – and the defendants played a key role in facilitating that critical component”.

B. US – China Relations

  • On 25 August 2020, the US Office of Foreign Assets Control (“OFAC”) has listed Taotao Zhang, a Chinese chemist and chemical supplier, as a Significant Foreign Narcotics Trafficker pursuant to the Foreign Narcotics Kingpin Designation Act. Additionally, the OFAC designated Hong Kong-based Allyrise Technology Group, for being owned, controlled, or directed by, or acting for or on behalf of, Taotao Zhang. Taotao Zhang has shipped synthetic opioids (Fentanyl) to the United States. Illicit Fentanyl has been a plague in the United Sates of the last several years. In New Jersey for example, there have been more than 9.000 overdose deaths since 2017.

  • On 26 August 2020, the US Department of Commerce added 24 Chinese companies to the Entity List for helping China build islands in the South China Sea for military purposes, and thereby advancing its territorial claims.

  • According to a 30 August 2020 Financial Times news article, China implemented new rules governing technology exports, which put TikTok’s US sale at risk. The updated list of controlled exports added restrictions for “personalised information recommendation services based on data analysis”. As explained by the Financial Times, TikTok is “built on algorithms that analyse used behaviour to push personalised content”. On the basis of the updated list of controlled exports, TikTok may now have to obtain additional governmental approvals for the export of such technologies.

C. US -Taiwan Relations

  • According to a 30 August 2020 news article of the Wall Street Journal, President Tsai of Taiwan has increased Taiwan’s defence spending to the highest level ever, fearing Hong Kong’s fate. Taiwan moreover has pledged closer security cooperation with the US and other democracies.

  • According to a 31 August 2020 Financial Times news article, the US will declassify documents relating to its security assurances to Taiwan, in response to China’s inclination to use military force against the island. According the Financial Times, “the decision to make public the full details of the so-called Six Assurances made by Ronald Reagan to Taipei in 1982 follows calls from defence experts, former officials and Taiwan supporters in Congress that Washington make a clear commitment to come to Taiwan’s rescue if it were attacked by China”.


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