Ian Cohen

The Treasury’s Office of Foreign Assets Control is becoming progressively worse at addressing specific sanctions questions from industry stakeholders, leaving queries unanswered and causing companies to hesitate before completing transactions, according to Nixon Peabody trade lawyer Alexandra Lopez-Casero. Companies can employ certain strategies to get responses from OFAC, Lopez-Casero said, but OFAC is typically not as responsive and helpful as other agencies, such as the Commerce Department Bureau of Industry and Security.

Airbus agreed to pay more than $3.9 billion in combined penalties for violations of the Foreign Corrupt Practices Act, the Arms Export Control Act and the International Traffic in Arms Regulations, the Justice Department said Jan. 31. The bribery charges, levied by U.S., French and United Kingdom authorities, stem from Airbus’s scheme to bribe non-governmental airline executives and government officials, including officials in China, to retain aircraft contracts.

Although the Defense Department reportedly objected to a proposed Commerce Department rule that would have further restricted foreign sales to Huawei that contain U.S. goods (see 2001240012), the administration will continue considering other ways to increase controls on shipments to Huawei, which may include a “compromise” rule, according to a Jan. 31 research report from Raymond James & Associates. Political support for the proposed rule, including by three senators in a January letter (see 2001270026), may “convince” the Defense Department to “ease its opposition in some form.” If the agency concedes, it will still likely push back on other restrictions on China's technology industry “to preserve some of the revenue stream to the U.S. industrial base,” the report said.

The first humanitarian exports were sent through the joint mechanism created by the Treasury and State departments nearly three months after the channel was created (see 1910250057), Treasury said Jan. 30. Treasury said the mechanism successfully facilitated transactions from a “humanitarian channel” in Switzerland that sent cancer and transplant-related drugs to Iranian medical patients. The channel is subject to “strict due diligence measures,” Treasury said, adding that the successful transactions prove “a model for facilitating further humanitarian exports to Iran.”

The Commerce Department again postponed the first meeting of its Emerging Technology Technical Advisory Committee and may not reschedule it until March, a Commerce official said. The meeting, which was originally scheduled for Dec. 4, 2019,was initially postponed to January as the agency faced delays in issuing members their security clearances (see 1911200045). But the problem persisted, according to Anita Zinzuvadia, a licensing officer with the Bureau of Industry and Security, who said Commerce canceled the January meeting.

United Kingdom businesses and U.S. agricultural exporters want the two countries to sign a comprehensive trade deal rather than continue the Trump administration's recent string of limited phase one deals, industry representatives said. Some stakeholders feel the two countries should capitalize on negotiating a full agreement before the upcoming U.S. presidential election, which could lead to an anti-Brexit Democratic president and stymie negotiations, the representatives said.

More countries will try to operate separately from the U.S. financial system in an attempt to trade without fear of penalties from the U.S.’s wide-ranging sanctions regimes, sanctions experts said. Although some countries have struggled to operate outside the U.S. dollar -- such as Venezuela and Cuba -- better positioned countries may find success in the future, the experts said.

In a letter to the Defense Department, Sens. Ben Sasse, R-Neb., Tom Cotton, R-Ark., and Marco Rubio, R-Fla., said they are concerned about reports that the agency objected to a proposed rule from the Commerce Department that would have further restricted foreign sales to Huawei. The senators asked the Defense Department to provide information within 60 days about whether the agency objected to the rule, its rationale for doing so and how its objection impacts the agency’s “simultaneous attempts” to prevent allies to reject Huawei technology.

The Treasury’s Office of Foreign Assets Control reached a $1.125 million settlement with Eagle Shipping International for 36 violations of U.S. sanctions against Burma, OFAC said in a Jan. 27 notice. The ship management company, which has headquarters in Connecticut, illegally transported “sea sand” for Myawaddy Trading Limited, a company on OFAC’s Specially Designated Nationals List, the notice said. Eagle Shipping allegedly provided transportation services from Burma to Singapore for a “land reclamation project” for Myawaddy that involved transactions worth about $1.8 million.

There will be more trade uncertainty in 2020 than in 2019 despite a phase one deal with China, trade experts said during a Jan. 22 panel hosted by the Center for Strategic and International Studies. As trade tensions with Europe come to the foreground and as the U.S. potentially negotiates a more comprehensive deal with Japan, one expert said, the administration will not have enough time and resources to start on phase two of the deal with China as it tries to implement the first phase. Another panelist said the U.S. and China will likely come to a “narrow” phase two deal as the election approaches, but that deal will not provide relief for the international trade environment.