The U.S. has announced and actively implemented additional extraterritorial sanctions, including with respect to Venezuela, Hong Kong, and Russia.
On August 14, 2020, the U.S. seized four tankers carrying Iranian-origin gasoline that were bound for Venezuela, representing the U.S. government’s largest-ever seizure of fuel shipments from Iran. The tanker seizures were pursuant to a civil forfeiture action that the U.S. Department of Justice had initiated on July 1, 2020, whereby the U.S. sought forfeiture of all petroleum-product cargo aboard four oil tankers. A seizure order had subsequently been issued by the U.S. District Court for the District of Columbia. The U.S.’s seizure is a significant development and represents yet another assertion of U.S. extraterritorial authority.
Additionally, on August 7, 2020, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced new sanctions against 11 Hong Kong and People’s Republic of China (PRC) officials for actions undermining Hong Kong’s autonomy, pursuant to Executive Order 13936. The individuals sanctioned include very senior personnel, including Hong Kong’s Chief Executive, and could present additional challenges for U.S. companies doing business in the region.
Finally, on July 15, 2020, the U.S. Department of State updated its public guidance regarding the applicability of secondary sanctions with respect to Nord Stream 2, TurkStream, and certain other energy pipelines originating in Russia. Specifically, the State Department will now consider imposing secondary sanctions under the Countering America’s Adversaries Through Sanctions Act (CAATSA), Section 232 with respect to investments, loans, and other goods or services provided to, or in support of, the construction of the Nord Stream 2, TurkStream, and potentially other energy pipeline projects. The State Department’s announcement is a notable change in U.S. foreign policy and could have a substantial impact on the energy industry in Europe, particularly with respect to non-U.S. companies financing or otherwise supporting construction efforts.
We will continue to closely monitor developments in this space. If you have any questions or concerns about U.S. sanctions, please contact Bruce G. Paulsen (212-574-1533) or Andrew S. Jacobson (212-574-1477) at Seward & Kissel’s Sanctions Practice Group.
