Changes to sanctions regimes on Haiti, Nicaragua and Iran, new export controls on China, and other developments
Below we summarise the developments in EU, UK and US sanctions regimes that are not Russia-related.
Main developments in sanctions on Haiti, Nicaragua and Iran, as well as significant expansions of US export controls relating to China. In addition, we mention the proposals to expand the EU human rights sanctions regime to include corruption and to introduce EU restrictions on forced labour.
New UN sanctions regime on Haiti
On 21 October 2022, the UN Security Council adopted a new sanctions regime on Haiti.
The sanctions framework provides basis for the imposition of a targeted arms embargo, asset freezes and travel bans on individuals and entities that fit certain designation criteria, such as individuals and entities that:
- are responsible for, or complicit in, actions that threaten the peace, security or stability of Haiti;
- engage in criminal activities and violence involving armed groups and criminal networks that promote violence, including forcible recruitment of children, kidnappings, trafficking in persons and the smuggling of migrants, and homicides and sexual and gender-based violence; or
- act for or on behalf of, or are otherwise supporting or financing a person or entity designated in accordance with the above, including through the direct or indirect use of the proceeds of organised crime.
The new sanctions regime seeks in particular to target the criminal actors, gangs and their financiers who are causing suffering and expanding poverty in Haiti, and comes after the escalation in violence, criminal activities, and human rights abuses which undermine the peace, stability and security of Haiti and the region. So far, the UN has added one of Haiti's most notorious gang leaders, Jimmy Cherizier, to the list of targeted individuals and entities.
Further details may be found in the Security Council's webpage about Resolution 2653 (2022), and in the UN press statements published here and here.
The EU, Norway, US and UK are expected to transpose the new UN sanctions into national law as soon as possible, as they are obliged to under international law. The UK (on 21 October) and the EU (on 25 October) have stated that they welcome the introduction of the new sanctions regime and that they will swiftly transpose the UN sanctions into EU law.
The Security Council affirmed that it would keep the situation in Haiti under continuous review and that it shall be prepared to review the appropriateness of the measures, including the strengthening, modification, suspension or lifting of the measures.
New US sanctions on Nicaragua
On 24 October 2022, the US substantially expanded its sanctions regime on Nicaragua, by introducing new sectoral sanctions authorities and expanded authorities for imposing individual (asset freezing) sanctions.
From before, Executive Order ("EO") 13851 provides legal basis for designating individuals and entities on the SDN List that are found to be responsible or involved in (among other alternatives) human rights abuses in Nicaragua. The new EO 14088 amends EO 13851 by providing new authorities to in the future:
- designate on the SDN List individuals and entities that operate or have operated in the gold sector of the Nicaraguan economy and any other sector identified at a later date;
- designate on the SDN List individuals and entities found to be responsible for or complicit in the arrest or persecution of persons exercising the freedom of expression or the freedom of assembly;
- impose restrictions on the import or export of certain goods to or from Nicaragua; and
- specify sectors of the Nicaraguan economy in which new investment by US persons is prohibited.
Further information can be found in this fact sheet issued by the White House.
Concurrent with the above actions, the US Treasury's Office of Foreign Assets Control (OFAC) made additional Nicaragua-related designations under EO 13851 and issued a related General Licence authorising certain wind-down transactions with a designated entity, see this press release and this notice.
In addition, the State Department imposed visa restrictions on over 500 Nicaraguan individuals and their family members. Further details are included in this press release.
The aim of the US sanctions on Nicaragua is to increase the possibility of holding the Ortega-Murillo regime accountable for its escalating human rights violations, continued dismantling of democratic institutions, attacks on civil society, and increasing security cooperation with Russia.
The EU has not imposed any new sanctions on Nicaragua, but recently prolonged its existing framework for imposing targeted restrictive measures for an additional year, until 15 October 2023. Further information about this can be found in this press release from the Council of the EU.
Escalated use of EU, UK and US sanctions regimes on Iran, and new Iranian counter-sanctions
In recent months, the US, EU and UK have all imposed targeted Iran-related sanctions against, in particular, human rights perpetrators following the death of Mahsa Amini and the Iranian regime's violent response to the peaceful protests after her death.
The sanctions have been imposed with basis in the already existing Iran-related sanctions regimes. In brief, the sanctions comprise of asset freezing measures targeting (among others) individuals and entities within Iran’s government, security and law enforcement apparatus as well as Iranian state television broadcasters.
For the EU, further information and references to relevant legal acts are available in the Council of the EU's press releases of 17 October 2022 and 14 November 2022.
For the US, further information is published particularly in OFAC's press releases of 22 September 2022, 6 October 2022 and 16 November 2022.
For the UK, further details are available is this notice from the UK Office of Financial Sanctions Implementation (OFSI) published 14 November 2022.
While we do not normally provide updates on the imposition of asset freezing measures made pursuant to already existing legal frameworks, we consider it relevant to note that recent designations can indicate a certain change towards a more active use of the US, EU and UK's respective Iran related regimes.
In addition, we note that Iran has announced the imposition of counter-sanctions against EU, UK and US in the wake of the above sanctions escalations. The Iranian sanctions take the form of asset freezing measures targeting US, EU and UK persons and entities, according to office translations of the Iranian announcements published here (concerning the EU), here (concerning the UK) and here (concerning the US) in Iranian.
Substantial expansion of US export controls on China
In October, as supplements to its China related sanctions, the US imposed new and significantly enhanced China related export controls, with the aim of further restricting China's advanced computing capabilities and preventing China from obtaining or manufacturing sensitive technologies with military applications.
The changes have been described to constitute a "new approach" on export controls on China.
According to the Bureau of Industry and Security (BIS), the new rules place significant restrictions on China's ability to (i) obtain advanced computer chips, (ii) develop and maintain supercomputers, and (iii) manufacture semiconductors.
More specifically, by issuing two rules, FR 62186 and FR 61971, BIS has amended the Export Administration Regulations (EAR) to place restrictions on the export of (inter alia) advanced computing integrated circuits (ICs), computer commodities that contain ICs and certain semiconductor manufacturing items, as well as restrictions on transactions for supercomputer end-uses, transactions for certain IC end-use and transactions involving certain Chinese entities on the BIS Entity List.
More information about the content and scope of the new restrictions is available in BIS' press release 7 October 2022, press briefing presentation and FAQs of 28 October 2022.
The new restrictions are complex and far-reaching, and can have implications also for non-US companies that directly or indirectly do business relating to the Chinese semiconductor and electronics sectors.
Proposition for EU human rights sanctions regime to include corruption, and proposed EU ban on forced labour products
In September 2022, the President of the Commission of the EU announced that the Commission will propose to include corruption in the EU's global human rights sanctions regime (cf. Ursula von der Leyen's 2022 State of the Union speech).
The EU's human rights sanctions regime allows for the imposition of asset freezing measures against individuals and entities that are responsible for or otherwise involved in genocide, crimes against humanity or a list of defined serious human rights violations or abuses, cf. Council Regulation (EU) 2020/1998. There have been several calls for the framework to include also serious corruption offences, including from the European Parliament. The closer details and timing of the proposition is not yet clear.
In contrast to the EU, both the US and the UK have had in place legal bases to impose sanctions on corruption offences for some time, see the US Global Magnitsky Sanctions and the UK Global Anti-Corruption Sanctions Regulations 2021 (as further described in a previous WR Sanctions Alert) respectively.
In addition to the above signals of expanding the EU's human rights sanctions regime, it is worth noting that the Commission has proposed measures to prohibit the placing and making available on the EU market and the export from the EU of products made with forced labour, see Commission's press release and proposal of 14 September 2022.
The proposed without regard to specific sectors or industries, and appear to be wider in scope than the similar Uyghur Forced Labor Prevention Act imposed by the US last year, see our previous WR Sanctions Alert.
WR Sanctions Alerts provide you with updates on material developments in the country-specific sanctions programmes implemented by the US, the UN, the UK, the EU and Norway. We will not provide updates on mere prolongations, without material changes, of existing sanctions programmes, nor on any listings or de-listings of individuals/entities placed on implemented sanctions lists. Please note that the WR Sanctions Alerts are provided as general information and do not constitute legal advice.