Category Archives: Iraq Sanctions

04.10.15
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In the fine print: Life for Relief and Development fined $780,000 by OFAC

Literally in a footnote to the March 25th announcement of the enforcement action against PayPal, OFAC also released enforcment information about a $780,000 penalty against Life for Relief and Development. The base penalty for “knowingly and willingly” conspiring to send 3 funds transfers totaling $236,000 to Iraq in violation of those sanctions was $1,300,000.

Here’s OFAC’s calculus:

  • LRD appears to have willfully violated U.S. economic sanctions
    regulations; prior to the relevant transactions,
  • LRD had written notice from OFAC that such
    transfers were prohibited and that OFAC did not authorize such transactions;
  • LRD’s highest
    management levels—i.e., its President—knew of the conduct giving rise to the apparent
    violations and directed the funds transfers to Iraq via Jordan;
  • U.S. economic sanctions program
    objectives were harmed because funds were successfully transferred to Iraq;
  • LRD does not have
    prior OFAC sanctions history, including receipt of a penalty notice or Finding of Violation
    during the five years preceding the date of the earliest transaction giving rise to the apparent
    violations;
  • LRD undertook a remedial response to the transactions and agreed to establish an
    OFAC compliance program;
  • LRD cooperated by waiving the statute of limitations regarding the
    apparent violations; and
  • the civil settlement with OFAC is an element of LRD’s cooperation
    agreement with the U.S. Department of Justice.

Link:

OFAC Enforcement Information

 

07.29.14
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July 26, 2014: EU, HMT expand Iraq licensing

Council Regulation (EU) 791/2014 amends the existing licensing:

The following restrictions in the Regulation have been amended. These amendments
may include a change to the number of the article containing the restriction:

    1. Paragraphs 3 and 4 of Article 4 dealing with the freezing of funds and economic
      resources respectively have been merged;
    2. Article 4a has been replaced, so that the new Article 4a is consistent with the
      amended Article 4;
    3. Article 5 has been replaced. The amended Article 5 now allows for expanded
      licensing grounds; and
    4. The list of competent authorities has been updated.

This is the amended Article 4a:

Article 4a

The prohibition set out in Article 4(3) shall not give rise to liability of any kind on the part of the natural or legal
persons or entities concerned, if they did not know, and had no reasonable cause to suspect, that their actions
would infringe this prohibition.’;

and the amended Article 5:

Article 5

1. Article 4 shall not prevent the crediting of frozen accounts by financial or credit institutions that receive funds
transferred by third parties to the account of the listed person, entity or body, provided that any additions to such
accounts are also frozen. The financial or credit institution shall inform the competent authorities about such trans­
actions without delay.

2. By way of derogation from Article 4(3), the competent authorities, as indicated on the websites listed in
Annex V, may authorise the making available of certain funds or economic resources, under such conditions as they
deem appropriate, after having determined that the funds or economic resources concerned are:

(a) necessary to satisfy the basic needs of natural or legal persons, entities or bodies listed in Annex IV, and depen­
dent family members of such natural persons, including payments for foodstuffs, rent or mortgage, medicines
and medical treatment, taxes, insurance premiums, and public utility charges;
(b) intended exclusively for payment of reasonable professional fees and reimbursement of incurred expenses asso­
ciated with the provision of legal services;
(c) intended exclusively for payment of fees or service charges for routine holding or maintenance of frozen funds
or economic resources; or
(d) necessary for extraordinary expenses, provided that the relevant competent authority has notified the grounds
on which it considers that a specific authorisation should be granted to the competent authorities of the other
Member States and to the Commission at least two weeks prior to authorisation.

3. The Member States concerned shall inform the other Member States and the Commission of any authorisation
granted under this Article.’;

Link:

HMT Notice

Council Regulation (EU) No 791/2014

 

05.29.14
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May 27, 2014: New Executive Order on US Iraq-related sanctions

On Tuesday, President Barack Obama issued a new Executive Order modifying the Iraq-related sanctions that OFAC enforces:

I, BARACK OBAMA, President of the United States of America,
have determined that the situation that gave rise to the actions
taken in Executive Order 13303 of May 22, 2003, to protect the
Development Fund for Iraq and certain other property in which
the Government of Iraq has an interest has been significantly
altered.  Recognizing the changed circumstances in Iraq,
including the Government of Iraq's progress in resolving and
managing the risk associated with outstanding debts and claims
arising from actions of the previous regime, I hereby terminate
the prohibitions contained in section 1 of Executive Order 13303
of May 22, 2003, as amended by Executive Order 13364 of
November 29, 2004, on any attachment, judgment, decree, lien,
execution, garnishment, or other judicial process with respect
to the Development Fund for Iraq and Iraqi petroleum, petroleum
products, and interests therein, and the accounts, assets,
investments, and other property owned by, belonging to, or held
by, in the name of, on behalf of, or otherwise for, the Central
Bank of Iraq.


So, basically, previously, the assets of the Central Bank of Iraq and Development Fund of Iraq were judgment-proof, in order to promote further stabilization of the Iraqi government. Now, as times have changed, claims against these institutions can now proceed.

As the OFAC notice notes, “The E.O. does not otherwise affect the national emergency declared in Executive Order 13303, as expanded in scope by Executive Order 13315 of August 28, 2003, which remains in place and continues as the basis for certain sanctions on the former Iraqi regime, its senior officials and their family members, and designated persons who threaten stabilization efforts in Iraq.”

Links:

OFAC Notice

Executive Order

 

04.30.14
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May 29, 2014: OFAC Updates Iran, Iraq, WMD sanctions lists

On Tuesday, OFAC modified a number of sanctions programs. First, the following have been added to the SDN list under either the IFSR (Iran Financial Sanctions Regulations), Executive Order 13645 (part of the IFCA), or the Non-Proliferation of Weapons of Mass Destruction (NPWMD) programs:

AL AQILI, Mohamed Saeed (a.k.a. AL MARZOOQI, Mohamed Saeed Mohamed Al Aqili); DOB 23 Jul 1955; POB Dubai, United Arab Emirates; Additional Sanctions Information – Subject to Secondary Sanctions; Executive Order 13645 Determination – Material Support; Passport A2599829 (United Arab Emirates); National ID No. 784-1955-8497107-1; Vice Chairman and Chief Executive Officer, Al Aqili Group LLC (individual) [EO13645] (Linked To: NATIONAL IRANIAN OIL COMPANY; Linked To: ISLAMIC REVOLUTIONARY GUARD CORPS; Linked To: SEYYEDI, Seyed Nasser Mohammad; Linked To: KASB INTERNATIONAL LLC).

NIZAMI, Anwar Kamal; DOB 19 Apr 1980; citizen Pakistan; Additional Sanctions Information – Subject to Secondary Sanctions; Executive Order 13645 Determination – Material Support; Passport AE9855872 (Pakistan); Accounts Manager, First Furat Trading LLC (individual) [EO13645] (Linked To: KASB INTERNATIONAL LLC).
AL AQILI GROUP LLC (a.k.a. AL AQILI GROUP OF COMPANIES), Oud Metha Tower, 10th Floor, PO Box 1496, Dubai, United Arab Emirates; Website http://www.aqili.com; Email Address info@aqili.com; Additional Sanctions Information – Subject to Secondary Sanctions [EO13645].
DALIAN ZHENGHUA MAOYI YOUXIAN GONGSI (a.k.a. DALIAN ZENGHUA TRADING CO., LTD.), Dalian, China; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR].
DALIAN ZHONGCHUANG CHAR-WHITE CO., LTD., 2501-2508 Yuexiu Mansion, No. 82 Xinkai Road, Dalian, Liaoning Province 11601, China; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR].
KARAT INDUSTRY CO., LTD., No. 110 Baiyun Street, Dalian, Liaoning, China; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR].
MTTO INDUSTRY AND TRADE LIMITED, No. 9 Hongji Street, Xi Gang District, Dalian City, China; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR].
SINOTECH DALIAN CARBON AND GRAPHITE MANUFACTURING CORPORATION, Dalian, China; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR].
SINOTECH INDUSTRY CO., LTD., No. 190 Changjiang Road, Dalian City, China; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR].
SUCCESS MOVE LTD., No. 1109 Zhongshan Road, Dalian, China; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR].
TEREAL INDUSTRY AND TRADE LIMITED, No. 9 Hongji Street, Xi Gang District, Dalian City, China; Additional Sanctions Information – Subject to Secondary Sanctions [NPWMD] [IFSR].

 

Secondly, the following two listings were removed from the Iran sanctions program:

LIBRA SHIPPING SA (a.k.a. LIBRA SHIPPING), 3, Xanthou Street, Glyfada 16674, Greece; Additional Sanctions Information – Subject to Secondary Sanctions [IRAN].
LIBRA SHIPPING (a.k.a. LIBRA SHIPPING SA), 3, Xanthou Street, Glyfada 16674, Greece; Additional Sanctions Information – Subject to Secondary Sanctions [IRAN].

Lastly, the following were removed from the Iraqi sanctions program:

ABBAS, Kassim, Lerchesbergring 23A, D-60598, Frankfurt, Germany; DOB 07 Aug 1956; POB Baghdad, Iraq (individual) [IRAQ2].
BAY INDUSTRIES, INC., 10100 Santa Monica Boulevard, Santa Monica, CA [IRAQ2].
EUROMAC TRANSPORTI INTERNATIONAL SRL, Via Ampere 5, Monza 20052, Italy [IRAQ2].
EUROMAC, LTD, 4 Bishops Avenue, Northwood, Middlesex, United Kingdom [IRAQ2].
S.M.I. SEWING MACHINES ITALY S.P.A., Italy [IRAQ2].

Link:

OFAC Notice

 

01.16.14
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Sweden Explains It All: EU Iraq sanctions

Here is the historical background of the EU's sanctions on Iraq:

Iraq's invasion of Kuwait in August 1990 and the suspicions that Iraq possessed weapons of mass destruction under Saddam Hussein's regime brought about a comprehensive system of international sanctions against Iraq, passed by the UN and the EU. After the invasion of Iraq in March 2003 and the regime change that followed, certain ongoing adjustments were made to the sanctions (for more information, see UN Security Council Resolutions 1483 (2003), 1546 (2004) and 1957 (2010), as well as “Relevant EU documents”). The sanctions have now largely been ended. However, some limited sanctions remain in place.

The UN and EU sanctions that remain in place cover primarily certain restrictions concerning economic relations with Iraq in the form of freezing certain assets that were controlled by the previous regime, and limitations concerning trade in cultural items that were illegally removed from Iraq. Remnants of a previous arms embargo also remain in place at EU level. For additional background information, please see “Description of the sanctions”.

and the details of the sanctions in force:

1. Arms embargo

The sale or supply, etc. of arms and related materiel is prohibited. Exemptions may be made, e.g. for the needs of the Iraqi Government, but not with regard to biological and chemical weapons, or nuclear weapons.

2. Trade in cultural items

The trade in or the import and export, etc. of Iraqi cultural property and other items of archaeological, historical, cultural, rare scientific and religious importance illegally removed from Iraq is prohibited. This prohibition does not apply to cultural items removed from Iraq before 6 August 1990 or that are in the process of being returned to Iraqi institutions. A list of the cultural items included can be found below under the heading “Relevant EU documents”.

3. Freezing of certain assets

All assets and economic resources of the previous Government of Iraq or its state bodies, corporations or agencies identified by the Sanctions Committee established through UN Security Council Resolution 1518 (2003) (the Sanction Committee) shall be frozen if they were outside Iraq on 22 May 2003. Moreover, all assets and economic resources that have been removed from Iraq or acquired by Saddam Hussein or other senior officials in his regime and their immediate family members, including entities, etc. controlled by them shall be frozen. Nor may assets or economic resources be made available to persons or entities associated with Saddam Hussein. Previously, frozen assets – with some exceptions – were to be transferred to the Development Fund for Iraq managed by the Central Bank of Iraq under certain international control. Transfers of such assets are likely to have been completed and the Fund was wrapped up on 30 June 2011 in accordance with a decision by the UN Security Council. For this reason, any frozen assets are now to be transferred instead to an account or accounts linked to the Iraqi Government's Compensation Fund.

The persons and entities covered by the provisions on the freezing of assets are identified by the Sanctions Committee.

and the regulatory decisions behind all this:

The sanctions are based on Common Position 2003/495/CFSP as amended by Common Positions 2003/735/CFSP, 2004/553/CFSP and 2008/186/CFSP, and Council Decisions 2011/100/CFSP and 2012/812/CFSP. The parts of the Council common positions and Council decisions pertaining to EU law are regulated by Council Regulation (EC) No 1210/2003 as amended by Council Regulations 1799/2003, 1412/2004, 195/2008, 131/2011 and 85/2013. In addition, the lists of those covered by the provisions on the freezing of assets in Annexes III (Iraqi authorities, etc.) and IV (persons and entities associated with Saddam Hussein) of Council Regulation 1210/2003 have been regularly adjusted through Commission regulations (after authorisation by the Council). This has taken place as the UN Security Council Sanctions Committee for Iraq has decided on adjustments to its lists. The prohibition to make assets or resources available now only applies to persons and entities included in the list in Annex IV. For complete lists including adjustments, please see the Sanctions Committee's website (see adjacent link).

Annex II of Council Regulation (EC) No 1210/2003 contains a list of cultural items upon which trade restrictions have been imposed.

Link:

Sweden EU Iraq sanctions page

 

03.25.13
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The OFAC Book of Why: Iraq-Related Sanctions

There are no longer broad-based sanctions against the country of Iraq, which had been in place since its invasion of Kuwait in 1990. What’s left are targeted sanctions against the remnants of the Saddam Hussein regime, as well as those committed to undermine the stability of the country.

Property of these individuals is blocked, but all property blocked under the broad-based sanctions are now unblocked. Financial transactions with Iraq and exports to the country are now permitted (unless, of course, one of the sanctioned individuals is involved).

The regulations also prohibit the ownership, transfer or sale of cultural artifacts that were removed illegally from that country’s cultural institutions (e.g. the National Library, the Iraq National Museum).

The regulations also shield the assets of Central Bank of Iraq, the Development Fund of Iraq and Iraq’s petroleum products from being held, frozen or seized as part of legal proceedings as long as ownership is still in their hands (e.g. not sold or transferred to other parties).

Lastly, property that comes under the control of the US military or its coalition partners, is exempt from the blocking provisions of the regulations.

03.20.13
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Word of the Day ISISR

ISISR are the Iraq Stabilization and Insurgency Sanctions Regulations. These are targeted sanctions against Saddam Hussein’s regime, as well as those who have committed, or are considered to pose a risk of committing, an act of violence for the purpose of destabilizing the Iraqi government, or by blocking reconstruction, humanitarian aid and/or political reform.

The ISISR replaces the broad-based sanctions that first were instituted following Iraq’s invasion of Kuwait in 1990 and remained through the end of American involvement in Iraq. The ISISR implements Executive Orders 13303 (May 22, 2003), 13315 (August 28, 2003), 13350 (July 29, 2004), 13364 (November 29, 2004), and 13438 (July 17, 2007).