Recent developments, including new US sanctions restricting imports of aluminium, copper and nickel and wind-down of General License on Venezuela

OFAC publishes new Russia-related Determinations concerning prohibitions related to imports of aluminium, copper and nickel

As of April 13 2024, it is prohibited to import aluminium, copper and nickel of Russian Federation origin to the US. From the same date, the exportation, reexportation, sale, or supply, directly or indirectly, of services connected to the aforementioned metals will also be prohibited. The determinations exclude Russian-origin aluminium, copper, and nickel produced prior to 13 April 2024 and services related to aluminium, copper, and nickel produced prior to 13 April 2024. OFAC has clarified that the new determinations do not prohibit banks from acting as intermediaries for payments related to Russian-origin metals and products incorporating aluminium, copper and nickel into other products. The new determinations and related FAQs are available on OFACs website.

Restriction on trading in Russian metals 

As of 13 April 2024, the UK also prohibited the London Metal Exchange (LME) from trading in Russian aluminium, copper and nickel, as per the General Trade License issued by OFSI. The import prohibition on certain Russian-origin metals was issued in December 2023. 

OFAC issues General License No. 44A – Authorizing the Wind Down of Transactions Related to Oil or Gas Sector Operations in Venezuela   

General License (GL) No. 44, issued 18 October 2023, gave a six month authorization of all transactions related to the oil and gas sector in Venezuela, including transactions involving Petroleos de Venezuela S.A. (PdVSA) and related entities (see our previous alert here). OFAC indicated at the time that if the Maduro regime continued to take concrete steps towards a democratic election by the end of 2024, the General License may be renewed and extended. 

However, on 17 April this year, OFAC replaced General License No. 44 with General License No. 44A, authorizing all transactions ordinarily incident and necessary for the wind-down of transactions authorized under General License No. 44, signalling that the prior authorization will not be prolonged. Wind-down transactions are authorized until 12:01 a.m. eastern daylight time 31 May 2024. 

According to OFAC's FAQ Fact Sheet, the US will continue to assess their sanctions policy towards Venezuela in light of actions taken by Maduro and his representatives as the country approaches the 2024 election. 

EU introduces minimum rules in relation to violations and circumventions of EU sanctions

On April 12th the Council of the EU approved to a directive imposing minimum rules in EU member states for prosecution of and penalties for violating EU sanctions. The directive states that EU member states must ensure effective and proportionate criminal penalties, with i.e. the possibility of prison sentence as a maximum penalty for intentional violations. The new directive will also include rules on legal entities liability for offences committed by persons in leading position. 

As of yet the directive has not been published in the Official Journal of the EU, and the new rules will enter into force on the twentieth day after publication. From that date the member states will have 12 months to incorporate the provisions in national legislation. 

UK Office of Financial Sanctions Implementation (OFSI) publishes key tips to stay compliant

The sanction risk is particularly high in many parts of the maritime shipping sector. In an effort to assist businesses operating in the sector, OFSI published six key tips to stay compliant in early April, outlining the basis for compliance measures to be taken. The key tips include: 

• Know your customer (KYC) and due diligence; 
• Implement robust compliance policies and procedures; 
• Invest in technology and screening tools; 
• Conduct ongoing training and awareness programs; 
• Maintain vigilance and stay informed; and
• Foster collaboration and information sharing. 

OFSI's "Financial sanctions guidance for maritime shipping", updated in early March, also provides a more thorough introduction to the relevant challenges faced by the maritime shipping sector, as well as steps businesses can take to reduce risk. The guidance also outlines red flags in the maritime shipping sector and common evasion tactics, and provides for mitigating measures industry operators may take. 

Norway implements EU's 12th and 13th package of sanctions against Russia 

On the 19th of March, Norway implemented the EU's 12th and 13th package of sanctions against Russia (the press release is available here, and the amending regulation is available here). The implementation entails alterations in various stipulations, including the criteria for listing, regulations regarding goods affected by export/import prohibitions, and new rules about mandatory notifications to the Ministry of Foreign Affairs during the application of certain exemption provisions. 

The goal of the EU's 12th package of sanctions, adopted in December 2023, is to tighten the enforcement of the oil price cap, as well as ensuring tracking and actions against third-country companies circumventing sanctions. The 13th package, adopted in February 2024, focuses particularly on measures aimed at restricting Russia's access to military technology, such as drones. Both packages included additional listings and brings the total of designated individual and entities to over 2000. More information can be found in our alerts on the EU's 12th and 13th package of sanctions.