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OFAC adds 3 to Global Magnitsky program, plus a General License and FAQ

Today, OFAC added the following people:

PENG, Jiarui (Chinese Simplified: 彭家瑞), Xinjiang, China; DOB Apr 1961; nationality China; Gender Male (individual) [GLOMAG] (Linked To: XINJIANG PRODUCTION AND CONSTRUCTION CORPS).

SUN, Jinlong (Chinese Simplified: 孙金龙), Xinjiang, China; DOB Jan 1962; nationality China; Gender Male (individual) [GLOMAG] (Linked To: XINJIANG PRODUCTION AND CONSTRUCTION CORPS).

and entity:

XINJIANG PRODUCTION AND CONSTRUCTION CORPS (Chinese Simplified: 新疆生产建设兵团), Xinjiang, China [GLOMAG] (Linked To: CHEN, Quanguo). 

to its Global Magnitsky sanctions program.

They also added General License 2, which allows wind-down activities with blocked subsidiaries of Xinjiang Production and Construction Corps.

And finally, a new Frequently Asked Question (FAQ):

835. What does Global Magnitsky General License 2 authorize? 

On July 31, 2020, OFAC designated, pursuant to E.O. 13818, the Xinjiang Production and Construction Corps (XPCC) for its connection to serious human rights abuse in the Xinjiang Uyghur Autonomous Region (XUAR). Concurrent with this action, OFAC issued Global Magnitsky General License (GL) 2. GL 2 does not authorize any transactions involving the XPCC itself; however, GL 2 does authorize, subject to certain conditions, U.S. persons to engage in transactions and activities prohibited by the Global Magnitsky Sanctions Regulations (GSMR) that are ordinarily incident and necessary to the wind down of transactions involving any entity in which the XPCC owns, directly or indirectly, a 50 percent or greater interest (Blocked XPCC Subsidiary), through 12:01 a.m. eastern daylight time, September 30, 2020.

GL 2 also authorizes, subject to certain conditions, transactions and activities that are ordinarily incident and necessary to (1) divest or transfer debt, equity, or other holdings of the Blocked XPCC Subsidiary to a non-U.S. person, or (2) facilitate the transfer of debt, equity, or other holdings in any Blocked XPCC Subsidiary by a non-U.S. person to another non-U.S. person, through 12:01 a.m. eastern daylight time, September 30, 2020. GL 2 does not authorize divestment activities involving the XPCC itself, nor does it authorize U.S. persons to sell to, purchase or invest in, or facilitate such transactions with any blocked person — including Blocked XPCC Subsidiaries, except for such purchases of or investments in Blocked XPCC Subsidiaries that are ordinarily incident and necessary to effectuate authorized divestment transactions. Further, GL 2 does not authorize any debit to the account of any Blocked XPCC Subsidiary on the books of a U.S. financial institution.

After the expiration of this general authorization, U.S. persons will be prohibited from engaging in or facilitating transactions with Blocked XPCC Subsidiaries unless exempt or authorized by OFAC. U.S. persons unable to wind down transactions with, or divest from, any Blocked XPCC Subsidiary before 12:01 a.m. eastern daylight time, September 30, 2020 are encouraged to seek guidance from OFAC.

Non-U.S. persons may wind down transactions with, or divest from, a Blocked XPCC Subsidiary without exposure to sanctions under E.O. 13818, provided that such wind-down activity is consistent with GL 2. Wind-down transactions involving non-U.S. persons may be processed through the U.S. financial system or involve U.S. persons as long as the transactions comply with the terms and conditions in GL 2. Non-U.S. persons unable to wind down transactions with, or divest from, a Blocked XPCC Subsidiary before 12:01 a.m. eastern daylight time, September 30, 2020, are encouraged to seek guidance from OFAC. 

The unblocking of any property blocked pursuant to any other part of 31 C.F.R. chapter V is not authorized under GL 2. [07-31-2020]

Sorry… forgot that State said something, too…

The Chinese Communist Party’s human rights abuses in Xinjiang, China against Uyghurs and other Muslim minorities rank as the stain of the century. The Trump Administration has led the world’s effort to impose tangible costs on the PRC’s continuous campaign of repression, mass arbitrary detention, intrusive surveillance, forced labor, forced population control, involuntary collection of biometric data, and genetic analyses targeted at these groups. Today, we are continuing that record of principled action.
On July 9, 2020, the United States designated Chen Quanguo, the current First Party Secretary of the Xinjiang Production and Construction Corps (XPCC), a paramilitary organization subordinate to the CCP, for his connection to serious human rights abuse in Xinjiang. Following his arrival in the region, Chen Quanguo began implementing a comprehensive surveillance, detention, and indoctrination program in Xinjiang, targeting Uyghurs and members of other ethnic minorities. The XPCC has been directly involved in implementing these measures. Today, the U.S. has imposed sanctions on the XPCC.
The U.S. also sanctioned today Sun Jinlong, former Party Secretary of the XPCC, and Peng Jiarui, Deputy Party Secretary and Commander of the XPCC. They were designated pursuant to Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act. These actions will also restrict the ability of Sun Jinlong and Peng Jiarui to travel to the United States.
Today’s designations are the latest U.S. government action in an ongoing effort to deter human rights abuse in the Xinjiang region. We call on all countries to join us in condemning the CCP’s heinous abuse of the human rights of its own citizens, affecting countless families across the world.
For more information regarding this action, please see the press release issued today by the Department of the Treasury.

Wow… Treasury came out of its cave and issued a statement, too:

PRESS RELEASES

Treasury Sanctions Chinese Entity and Officials Pursuant to Global Magnitsky Human Rights Executive Order

Washington – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned one Chinese government entity and two current or former government officials in connection with serious rights abuses against ethnic minorities in the Xinjiang Uyghur Autonomous Region (XUAR). These designations include the Xinjiang Production and Construction Corps (XPCC), Sun Jinlong, a former Political Commissar of the XPCC, and Peng Jiarui, the Deputy Party Secretary and Commander of the XPCC. The entity and officials are being designated for their connection to serious human rights abuse against ethnic minorities in Xinjiang, which reportedly include mass arbitrary detention and severe physical abuse, among other serious abuses targeting Uyghurs, a Turkic Muslim population indigenous to Xinjiang, and other ethnic minorities in the region.

“As previously stated, the United States is committed to using the full breadth of its financial powers to hold human rights abusers accountable in Xinjiang and across the world,” said Secretary Steven T. Mnuchin.

This action is being taken pursuant to Executive Order (E.O.) 13818, “Blocking the Property of Persons Involved in Serious Human Rights Abuse or Corruption,” which builds upon and implements the Global Magnitsky Human Rights Accountability Act.

These designations are the latest U.S. government actions in an ongoing effort to deter human rights abuses in the Xinjiang region. On July 1, 2020, the U.S. Department of State, along with the U.S. Department of the Treasury, the U.S. Department of Commerce, and the U.S. Department of Homeland Security, issued the Xinjiang Supply Chain Business Advisory, advising businesses with potential supply chain exposure to Xinjiang to consider the reputational, economic, and legal risks of involvement with entities that engage in human rights abuses in Xinjiang, such as forced labor. On May 22, 2020, the U.S. Department of Commerce added nine PRC entities related to human rights abuses in the Xinjiang region to the Commerce Entity List; this action complemented the October 2019 addition to the Commerce Entity List of 28 entities engaged in the PRC repression campaign in the Xinjiang region. Also, in October 2019, the U.S. Department of State announced a visa restriction policy under section 212 (a)(3)(C) of the Immigration and Nationality Act for PRC and Chinese Communist Party (CCP) officials responsible for, or complicit in, human rights abuses in Xinjiang.

The XPCC is a paramilitary organization in the XUAR that is subordinate to the Chinese Communist Party (CCP). The XPCC enhances internal control over the region by advancing China’s vision of economic development in XUAR that emphasizes subordination to central planning and resource extraction. The XPCC’s structure reflects a military organization, with 14 divisions made up of dozens of regiments. Chen Quanguo (Chen), who was designated on July 9, 2020 for his connection to serious human rights abuse, is the current First Political Commissar of the XPCC, a role in which he has exercised control over the entity. Chen is also the current Communist Party Secretary of XUAR, and has a notorious history of intensifying security operations in the Tibetan Autonomous Region, where he was deployed before arriving in Xinjiang to tighten control over members of Tibetan ethnic minority groups. Following his arrival in Xinjiang, Chen began implementing a comprehensive surveillance, detention, and indoctrination program targeting Uyghurs and members of other ethnic minority groups. The XPCC has helped implement Chen’s CCP policy in the region.

The XPCC was designated today for being owned or controlled by, or for having acted or purported to act for or on behalf of, directly or indirectly, Chen.

The following individuals are also designated today for having acted or purported to act for or on behalf of, directly or indirectly, the XPCC:

  • Peng Jiarui, the Deputy Party Secretary and Commander of the XPCC.
  • Sun Jinlong, a former Political Commissar of the XPCC.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the entity and individuals named above, and of any entities that are owned, directly or indirectly, 50 percent or more by them, individually, or with other blocked persons, that are in the United States or in the possession or control of U.S. persons, are blocked and must be reported to OFAC. Unless authorized by a general or specific license issued by OFAC or otherwise exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person or the receipt of any contribution or provision of funds, goods or services from any such person.

Concurrent with this action, OFAC is issuing a general license to authorize certain wind down and divestment transactions and activities related to blocked subsidiaries of the XPCC through 12:01 a.m. eastern daylight time, September 30, 2020. For details, see General License No. 2.

GLOBAL MAGNITSKY

Building upon the Global Magnitsky Human Rights Accountability Act, the President signed E.O. 13818 on December 20, 2017, in which the President found that the prevalence of human rights abuse and corruption that have their source, in whole or in substantial part, outside the United States, had reached such scope and gravity that it threatens the stability of international political and economic systems. Human rights abuse and corruption undermine the values that form an essential foundation of stable, secure, and functioning societies; have devastating impacts on individuals; weaken democratic institutions; degrade the rule of law; perpetuate violent conflicts; facilitate the activities of dangerous persons; and undermine economic markets. The United States seeks to impose tangible and significant consequences on those who commit serious human rights abuse or engage in corruption, as well as to protect the financial system of the United States from abuse by these same persons.

Information on the individuals and entities designated today.

Information on the Department of State actions under 7031(c).

Information about the Xinjiang Supply Chain Business Advisory.

Information about the Commerce Entity List additions, and additional information about the Commerce Entity List additions.

Links:

OFAC Notice

Global Magnitsky General License 2

Global Magnitsky FAQ

State Department Press Release

Treasury Department Press Release

Categories: Frequently Asked Questions (FAQ) Global Magnitsky Sanctions Guidance Human Rights Sanctions Licenses OFAC Updates Sanctions Lists

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