Sanctions Watch | Weekly Vol. 76

Sanctions Watch Vol 76

In the latest edition of our Sanctions Watch weekly digest, we present significant updates on sanction watchlists and regulatory developments.

1. The European Union and the United Kingdom extend sanctions on Iran over support for Russia in response to its continued support for Russia’s military actions in Ukraine

The European Union (EU) and the United Kingdom (UK) have expanded sanctions on Iran, targeting its alleged support for Russia’s war in Ukraine. The EU imposed restrictions on vessels and ports linked to transferring drones and missiles, banning the export or supply of missile and UAV components from the EU to Iran. It also prohibited transactions with ports such as Amirabad and Anzali on the Caspian Sea, associated with sanctioned individuals or entities supplying Russia. However, exceptions for maritime safety-related assistance remain.

Additionally, the EU sanctioned Iran’s state shipping company IRISL, its director Mohammad Reza Khiabani, and three Russian firms accused of transporting weapons across the Caspian Sea. Previous sanctions targeted Iranian airlines for supporting Russia’s military activities in Ukraine.

Parallel measures by the UK froze the assets of IRISL and Iran Air, alleging their role in transporting military supplies to Russia. The UK also restricted the Russian cargo ship Port Olya-3 from accessing British ports.

This regulatory update reflects ongoing efforts to counter alleged arms transfers amid geopolitical tensions.

2. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License No. 113

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued General License No. 113, allowing the wind-down of transactions involving specific financial institutions blocked under Executive Order 14024 as of November 21, 2024. This authorization is effective through 12:01 a.m. EST on December 20, 2024, and requires that payments to blocked entities be deposited into blocked accounts in compliance with the Russian Harmful Foreign Activities Sanctions Regulations (31 CFR Part 587).

The license does not permit transactions prohibited under Directive 2 of E.O. 14024, debits to accounts of the Central Bank of Russia or related entities at U.S. financial institutions, or other transactions prohibited under existing regulations unless separately authorized. It provides a temporary mechanism to ensure compliance while facilitating the orderly cessation of restricted activities.

The annex includes a detailed list of the blocked entities covered under this license. This action underscores OFAC’s commitment to enforcing sanctions while allowing limited flexibility for compliance within the prescribed timeline.

3. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License No. 114

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued General License (GL) No. 114 under the Russian Harmful Foreign Activities Sanctions Regulations (31 CFR part 587). This license authorizes specific transactions involving debt or equity issued by Gazprombank Joint Stock Company, Interstate Bank, and related entities until 12:01 a.m. EST, December 20, 2024. These permissions cover divestment, transfer, and settlement of trades initiated before 4:00 p.m. EST on November 21, 2024, as well as wind-down of related derivative contracts under certain conditions.

The license includes strict limitations: U.S. persons cannot sell to or facilitate transactions with blocked persons, nor can they make new investments in the covered entities.

Additionally, transactions prohibited under other directives, such as those involving Russia’s Central Bank or other blocked entities, remain unauthorized unless separately licensed.

This measure offers temporary relief for specific financial activities while maintaining the overarching framework of sanctions under Executive Order 14024. Businesses are urged to carefully review GL No. 114 to ensure full compliance.

4. OFSI issued General Licence INT/2024/5297490 under the Iran (Sanctions) Regulations 2023

The Office of Financial Sanctions Implementation (OFSI) has issued General Licence INT/2024/5297490 under the Iran (Sanctions) Regulations 2023, effective November 18, 2024. This licence permits specific payments related to Iran Air’s operations within the UK under international aviation agreements, including the Chicago Convention and the International Air Services Transit Agreement (IASTA).

The licence allows payments for essential ground and airport services enabling Iran Air to overfly or make non-traffic-related stops in the UK. Additionally, it covers contractual obligations predating Iran Air’s designation, such as refunds for cancelled flights, provided no payments are made to other designated entities. Strict adherence to the licence conditions and reporting requirements is mandated to ensure compliance with sanctions regulations.

This licence facilitates compliance with international aviation commitments while ensuring adherence to the Sanctions and Anti-Money Laundering Act 2018.

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Sanctions Watch is a weekly recap of events and news related to sanctions around the world.