October 27, 2017: State Department Highlights Sections 231 and 235 of the CATS (or CAATS) Act

Note that no actual designations are made here – this is basically a reiteration of the process and law…

Sections 231 and 235 of the Countering America’s Adversaries Through Sanctions Act of 2017

SEC. 231. IMPOSITION OF SANCTIONS WITH RESPECT TO PERSONS ENGAGING IN TRANSACTIONS WITH THE INTELLIGENCE OR DEFENSE SECTORS OF THE GOVERNMENT OF THE RUSSIAN FEDERATION.

(a) IN GENERAL.—On and after the date that is 180 days after the date of the enactment of this Act, the President shall impose 5 or more of the sanctions described in section 235 with respect to a person the President determines knowingly, on or after such date of enactment, engages in a significant transaction with a person that is part of, or operates for or on behalf of, the defense or intelligence sectors of the Government of the Russian Federation, including the Main Intelligence Agency of the General Staff of the Armed Forces of the Russian Federation or the Federal Security Service of the Russian Federation.

(b) APPLICATION OF NEW SANCTIONS.—The President may waive the initial application of sanctions under subsection (a) with respect to a person only if the President submits to the appropriate congressional committees—

(1) a written determination that the waiver—

(A) is in the vital national security interests of the United States; or
(B) will further the enforcement of this title; and

(2) a certification that the Government of the Russian Federation has made significant efforts to reduce the number and intensity of cyber intrusions conducted by that Government.

(c) DELAY OF IMPOSITION OF SANCTIONS.—The President may delay the imposition of sanctions under subsection (a) with respect to a person if the President certifies to the appropriate congressional committees, not less frequently than every 180 days while the delay is in effect, that the person is substantially reducing the number of significant transactions described in subsection (a) in which that person engages.

(d) REQUIREMENT TO ISSUE GUIDANCE.—Not later than 60 days after the date of the enactment of this Act, the President shall issue regulations or other guidance to specify the persons that are part of, or operate for or on behalf of, the defense and intelligence sectors of the Government of the Russian Federation.

(e) PENALTIES.—A person that violates, attempts to violate, conspires to violate, or causes a violation of subsection (a) or any regulation, license, or order issued to carry out subsection (a) shall be subject to the penalties set forth in subsections (b) and (c) of section 206 of the International Emergency Economic Powers Act (50 U.S.C. 1705) to the same extent as a person that commits an unlawful act described in subsection (a) of that section.

SEC. 235. SANCTIONS DESCRIBED.

(a) SANCTIONS DESCRIBED.—The sanctions to be imposed with respect to a person under section 224(a)(2), 231(b), 232(a), or 233(a) are the following:

(1) EXPORT-IMPORT BANK ASSISTANCE FOR EXPORTS TO SANCTIONED PERSONS.—The President may direct the Export-Import Bank of the United States not to give approval to the issuance of any guarantee, insurance, extension of credit, or participation in the extension of credit in connection with the export of any goods or services to the sanctioned person.

(2) EXPORT SANCTION.—The President may order the United States Government not to issue any specific license and not to grant any other specific permission or authority to export any goods or technology to the sanctioned person under—

(A) the Export Administration Act of 1979 (50 U.S.C. 4601 et seq.) (as continued in effect pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.));

(B) the Arms Export Control Act (22 U.S.C. 2751 et seq.);

(C) the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.); or

(D) any other statute that requires the prior review and approval of the United States Government as a condition for the export or reexport of goods or services.

(3) LOANS FROM UNITED STATES FINANCIAL INSTITUTIONS.—The President may prohibit any United States financial institution from making loans or providing credits to the sanctioned person totaling more than $10,000,000 in any 12-month period unless the person is engaged in activities to relieve human suffering and the loans or credits are provided for such activities.

(4) LOANS FROM INTERNATIONAL FINANCIAL INSTITUTIONS.—The President may direct the United States executive director to each international financial institution to use the voice and vote of the United States to oppose any loan from the international financial institution that would benefit the sanctioned person.

(5) PROHIBITIONS ON FINANCIAL INSTITUTIONS.—The following prohibitions may be imposed against the sanctioned person if that person is a financial institution:

(A) PROHIBITION ON DESIGNATION AS PRIMARY DEALER.—Neither the Board of Governors of the Federal Reserve System nor the Federal Reserve Bank of New York may designate, or permit the continuation of any prior designation of, the financial institution as a primary dealer in United States Government debt instruments.

(B) PROHIBITION ON SERVICE AS A REPOSITORY OF GOVERNMENT FUNDS.—The financial institution may not serve as agent of the United States Government or serve as repository for United States Government funds. The imposition of either sanction under subparagraph (A) or (B) shall be treated as 1 sanction for purposes of subsection (b), and the imposition of both such sanctions shall be treated as 2 sanctions for purposes of subsection (b).

(6) PROCUREMENT SANCTION.—The United States Government may not procure, or enter into any contract for the procurement of, any goods or services from the sanctioned person.

(7) FOREIGN EXCHANGE.—The President may, pursuant to such regulations as the President may prescribe, prohibit any transactions in foreign exchange that are subject to the jurisdiction of the United States and in which the sanctioned person has any interest.

(8) BANKING TRANSACTIONS.—The President may, pursuant to such regulations as the President may prescribe, prohibit any transfers of credit or payments between financial institutions or by, through, or to any financial institution, to the extent that such transfers or payments are subject to the jurisdiction of the United States and involve any interest of the sanctioned person.

(9) PROPERTY TRANSACTIONS.—The President may, pursuant to such regulations as the President may prescribe, prohibit any person from—

(A) acquiring, holding, withholding, using, transferring, withdrawing, transporting, importing, or exporting any property that is subject to the jurisdiction of the United States and with respect to which the sanctioned person has any interest;

(B) dealing in or exercising any right, power, or privilege with respect to such property; or

(C) conducting any transaction involving such property.

(10) BAN ON INVESTMENT IN EQUITY OR DEBT OF SANCTIONED PERSON.—The President may, pursuant to such regulations or guidelines as the President may prescribe, prohibit any United States per son from investing in or purchasing significant amounts of equity or debt instruments of the sanctioned person.

(11) EXCLUSION OF CORPORATE OFFICERS.— The President may direct the Secretary of State to deny a visa to, and the Secretary of Homeland Security to exclude from the United States, any alien that the President determines is a corporate officer or principal of, or a shareholder with a controlling interest in, the sanctioned person.

(12) SANCTIONS ON PRINCIPAL EXECUTIVE OFFICERS.—The President may impose on the principal executive officer or officers of the sanctioned person, or on persons performing similar functions and with similar authorities as such officer or officers, any of the sanctions under this subsection.

(b) SANCTIONED PERSON DEFINED.—In this section, the term ‘‘sanctioned person’’ means a person subject to sanctions under section 224(a)(2), 231(b), 232(a), or 233(a). 

In addition, the State Department held a briefing on these subjects. Then, for good measure, released the transcript two more times, once as a press release, and another time under a regional news subject heading.

Links:

State Department Section 231/235 page

State Department Briefing

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