What is the effect of the Executive order (E.O.) issued by the President on December 20, 2017?
The E.O. declares a national emergency with respect to serious human rights abuses and corruption globally, identifying these issues as threats to the national security, foreign policy, and economy of the United States. Under this national emergency, the President has invoked authorities provided by the International Emergency Economic Powers Act to impose financial sanctions (delegated to the Secretary of the Treasury, in consultation with the Secretary of State and the Attorney General) and visa restrictions (delegated to the Secretary of State) on persons determined, among other things, to be responsible for or complicit in, or to have directly or indirectly engaged in, certain human rights abuses or corrupt acts anywhere in the world. The E.O. implements the provisions of the Global Magnitsky Human Rights Accountability Act (“Global Magnitsky Act,” Public Law 114-328, Subtitle F), which was signed into law on December 23, 2016.
How are this E.O. and the sanctions issued pursuant thereto related to sanctions imposed under the Sergei Magnitsky Rule of Law Accountability Act of 2012 (“Magnitsky Act,” Public Law 112-208)?
The E.O. implements the Global Magnitsky Act, which is a statutory authority targeting human rights abusers and corrupt actors globally. The Global Magnitsky Act is a separate legal authority from the Magnitsky Act, which targets persons for certain actions related to the case of Russian lawyer Sergei Magnitsky, who died in 2009 after being arrested and tortured in custody by officers of the Ministry of the Interior of the Russian Federation. The Magnitsky Act also targets persons for gross violations of internationally recognized human rights in Russia. Actions under the Global Magnitsky Act and the Magnitsky Act are detailed in separate annual reports to Congress as required by these statutes.
How does today’s action relate to sanctions on human rights abusers and corrupt actors under the provisions of the Countering America’s Adversaries through Sanctions Act (“CAATSA,” Public Law 115-44)?
CAATSA is a separate statute from the Global Magnitsky Act. Certain sections of CAATSA provide for the imposition of sanctions on persons engaged in certain abuses or violations of human rights in Iran, Russia, and North Korea, as well as certain acts of corruption in Russia. Consistent with the delegation of authorities with respect to the relevant provisions of CAATSA, Treasury is working with its interagency partners as appropriate to implement these sanctions.
What prohibitions are in effect as a result of the sanctions issued pursuant to the E.O. of December 20, 2017?
As a result of designations pursuant to the E.O., all of the property and interests in property within U.S. jurisdiction of the designated individuals and entities are blocked, and U.S. persons are generally prohibited from engaging in transactions with them. Persons whose property and interests in property are blocked pursuant to the E.O. are considered to have an interest in all property and interests in property of an entity in which such blocked persons own, whether individually or in the aggregate, directly or indirectly, a 50 percent or greater interest. Consequently, any entity owned in the aggregate, directly or indirectly, 50 percent or more by one or more blocked persons is itself considered to be a blocked person. The property and interests in property of such an entity are blocked regardless of whether the entity itself is listed in the annex to the E.O. or otherwise placed on OFAC’s list of Specially Designated Nationals (“SDNs”). Accordingly, a U.S. person generally may not engage in any transactions with such an entity, unless authorized by OFAC.
Please note: the Executive Order itself is pretty unremarkable – very consistent with other targeted sanctions programs.