Key sanctions developments in November include growing signs that the EU may sanction Turkey over a Mediterranean energy dispute; the US sanctioning of a senior Lebanese politician linked to Hezbollah; and additional US measures against companies linked to the Chinese military.
China and Venezuela
- President Trump has ratcheted up sanctions on China by introducing legislation that bans US persons from investing or owning securities in companies that have a relationship with the Chinese military. The sanctions have been justified due to China’s policy of compelling the country’s private sector to support its military and intelligence sectors. 31 firms have initially been targeted by the measures.
- According to recent reporting, the Trump administration is planning to designate a further 89 Chinese companies as military end-users, meaning they will be prohibited from accessing a range of US goods and technology. Several high-profile Chinese aviation companies are believed to be included on the list. A further 21 Russian companies are also reportedly due to be targeted as military end-users.
- International efforts against China in response to the introduction of the National Security Law in Hong Kong continue, with the US designating a further four officials for their involvement in implementing the controversial law. The UK has threatened to introduce additional sanctions against Chinese officials for the ousting of elected lawmakers in Hong Kong, which it claims represents a breach of the 1984 Sino-British joint declaration which guaranteed the autonomy of the territory under the ‘one country two systems’ principle. The UK has not said whom it might target over Beijing’s latest bid to undermine the autonomy of the territory, which began with its imposition of a controversial national security law in June.
- British MPs have also called for the UK to introduce sanctions against China under its Magnitsky-style sanctions regime in response to alleged human rights abuses of Uighur Muslims.
- Venezuela has defied US sanctions by restarting direct oil shipments to China, a Reuters exclusive report has revealed. At the same time, Bloomberg has reported that the country’s oil exports surged to half a million barrels a day in November, nearly all heading to China. Chinese companies stopped loading oil cargoes in Venezuelan ports last year after US sanctions against the country’s state energy company were extended to include its customers. Subsequently, Venezuelan oil continued to reach China clandestinely through ship-to-ship transfers in south-east Asia.
Middle East
- The US has elsewhere imposed sanctions on Gebran Bassil, a prominent Lebanese MP and former Minister of Foreign Affairs (2014 to 2020) and the son-in-law of Lebanon President Michel Aoun. Bassil is the head of the Free Patriotic Movement party, a Christian political organisation which is aligned with Hezbollah. The sanctions ostensibly target Bassil for corruption, although several media commentators have pointed to US efforts to reduce Hezbollah’s influence in the country’s ongoing attempts to form a new administration. The move has been described as part of the US’s policy of ‘maximum pressure’ against Iran, which is Hezbollah’s main backer. Bassil, a prospective President of Lebanon, said the sanctions would not delay efforts to form a new government.
- The Trump administration’s campaign against Iran has also seen US envoy to Iran Elliot Abrams announce that more sanctions related to arms, weapons of mass destruction and human rights are expected through December and January. It came as the US blacklisted four entities in China and Russia for supporting Tehran’s missile programme. Earlier, measures were imposed on an Iranian Intelligence minister and two Iranian Revolutionary Guards Corps officials in connection with rights abuses. A foundation controlled by the Supreme Leader Ayatollah Khamenei was also sanctioned, along with several individuals and subsidiaries associated with the charitable body. The US claimed Khamenei had used its holdings to “enrich his office, reward his political allies and persecute the regime’s enemies”.
- The US continues to target companies supplying military hardware to Iran, and in November 2020 OFAC designated a further ten companies based in Iran, China, Hong Kong, Brunei and Russia. An additional 16 entities and individuals have been designated for their role in selling Iranian petrochemical products.
- The US has however reportedly granted Iraq a short sanctions waiver for Iranian energy imports that will expire shortly before President Trump’s term in office ends early next year. A series of such waivers, which cover gas and electricity imports, have been extended to Iraq since the Iranian energy sector was sanctioned in 2018.
- As the US awaits the departure of Trump from the Whitehouse in January, Iran’s Foreign Minister Mohammad Javad Zarif has told the Iranian media that Tehran would “automatically” return to commitments it made to curb its nuclear programme if a Biden Presidency lifted US sanctions imposed two years ago, and there were no obstacles to Iran’s economic activities. Biden has suggested that he would offer Iran “a credible path back to diplomacy”, in what appears to be significant departure from Trump’s approach. Since US sanctions were reimposed and strengthened, Tehran is reported to have breached most key Iran nuclear deal stipulations, including restrictions on the production and stockpiling of low-enriched Uranium.
- Elsewhere, as part of its continuing efforts to pressure Syria’s President Assad to end the Syrian conflict, the US has sought to further squeeze his sources of funding by targeting several Lebanese and Syrian individuals it claims are trying to revive the country’s petroleum industry. Others sanctioned in this latest batch of measures against the regime are military officials, members of parliament and government entities, including companies in the oil sector. Existing US sanctions against Syria ban oil and hydrocarbon product-based transactions.
North Korea
- Germany has accused Russia and China of frustrating international efforts to establish if North Korea exceeded a 500,000-barrel annual UN cap on refined petroleum imports. Moscow and Beijing notify a Security Council sanctions committee of their exports of these products to North Korea in tons rather than barrels. But the committee has not managed to agree a conversion rate since the cap was imposed three years ago. Germany says that the actions of Moscow and Beijing, both North Korean allies, have stalled the process of determining whether Pyongyang is indeed in breach of UN sanctions on refined petroleum.
- The US, meanwhile, has called on countries to repatriate North Korean workers who were not sent home by last year’s December deadline set by the UN. The call came as Washington sanctioned a Russian company and a North Korean company operating in Russia, both of which it believes are involved in the export of workers from North Korea. The UN imposed the restriction on North Korean foreign workers due to suspicions that Pyongyang channels their earnings into its ballistic and nuclear weapons programme. Russia said its repatriation of workers was not completed on time because of limited transport options.
Turkey
- The prospect of the EU imposing sanctions on Turkey has moved a step closer. The European parliament has overwhelmingly passed a non-binding resolution urging measures against Turkey over President Erdogan’s recent visit to the unrecognised republic of Northern Cyprus. The resolution is seen as adding weight to French efforts to push the EU to make good on its October threat to punish Ankara in connection with an escalating energy dispute in the eastern Mediterranean. Greece and Cyprus, both members of the bloc, are urging Turkey to refrain from exploring for gas in waters they claim as their own. Ankara has rejected claims that its activities are illegal. Significantly, though, in recent days it has withdrawn a survey ship from contested waters in advance of an EU summit in mid-December where possibly sanctions against Turkey will be discussed.
Belarus
- EU foreign ministers have agreed to expand measures imposed on the Belarusian regime for August’s allegedly rigged presidential election and subsequent crackdown on protesters. Almost 50 officials have already been blacklisted. More are expected to be targeted, along with entities providing financial support to President Alexander Lukashenko and his government. German Foreign Minister Heiko Mass said additional sanctions were necessary because it was clear that the Belarusian authorities were not prepared to begin speaking to the opposition. As the bloc no longer recognises Lukashenko as the country’s legitimate leader, future financial assistance, currently under review, will no longer go through his government.
Russia
- Work on the remaining stretch of the $11 billion Nord Stream 2 pipeline bringing Russian gas to Germany is reportedly set to resume in December, in defiance of US sanctions. Believing it will undermine European energy security, the US has opposed the Gazprom-led project and threatened to blacklist companies laying the almost-complete pipeline. That prompted a western company involved in construction to pull out.
Nicaragua
- The US has sanctioned former Nicaraguan President Arnoldo Aleman, who is accused of embezzlement during his time in office (1997 to 2002). The measures also apply to Aleman’s immediate family. The US also renewed its sanctions programme on Nicaragua for another year.
Cuba
- An important source of finance for the Cuban economy has been closed off after the implementation of US sanctions banning US firms from sending remittances via military-controlled partner companies on the island. Remittances are Cuba’s third-largest source of dollars, after the services industry and tourism. They are believed to equate to about $2-3 billion annually. President-elect Biden has pledged that he will lift some sanctions on money transfers, but it is not clear how soon this would happen.
