Search for:

On April 28, 2021, the US Treasury Department’s Office of Foreign Assets Control (OFAC) issued a final rule amending and reissuing the Somalia Sanctions Regulations, 31 C.F.R. Part 551 (“Regulations”) to further implement two existing Executive Orders, Executive Order 13536 of April 2010 and Executive Order 13620 of July 2012, and to replace the prior Somalia Sanctions Regulations that were published in May 2010 in abbreviated form.  The Regulations also add a number of definitions and provisions to bring the Regulations in line with other more recent OFAC sanctions regimes, and add several new general licenses.   

Executive Order 13536 (as amended by Executive Order 13620) was issued to block property of those who threatened the peace, security, or stability of Somalia, after the US government found increased acts of violence in the country, piracy off the Somali coast, and violations of a United Nations arms embargo.  Executive Order 13536 covers, among others, entities and individuals who threatened peacekeeping operations, obstructed the delivery of humanitarian assistance, or directly or indirectly supplied or received arms or assistance related to military activities in Somalia.  The names of individuals and entities designated pursuant to Executive Order 13536, as amended, whose property and interests in property are therefore blocked, are included in OFAC’s Specially Designated Nationals and Blocked Persons List (“SDN List”) with the identifier “[SOMALIA].” 

Executive Order 13620 added a prohibition on the importation into the United States of charcoal from Somalia after Somalia’s charcoal exports had been found to generate revenue for the militant group Harakat al-Shabaab al-Mujahideen.  As part of the implementation of Executive Order 13620, the Regulations now prohibit the importation, directly or indirectly, of charcoal from Somalia.  

Further, the Regulations add provisions and definitions similar to other, more recently issued OFAC sanctions regimes, such as the requirement to hold blocked funds in an interest-bearing blocked account, the prohibition on evading or causing a violation of the relevant restrictions, and the application of the “50% rule” under which an entity owned 50% or more by one or more blocked persons is also blocked, even if not identified on the SDN List.  OFAC also added a few new definitions, including “charcoal,” which for purposes of the sanctions regulations means “any product classifiable in heading 3802 or 4402 of the Harmonized Tariff Schedule of the United States.” Lastly, the Regulations include new general licenses authorizing US financial institutions to invest and reinvest blocked assets credited to a blocked account, payments for certain legal services from funds originating outside the United States, and official activities of the United States Government and United Nations agencies and organizations. OFAC also removed the requirement that payment for emergency medical services be specifically licensed, which had previously been a condition of the general license authorizing provision and receipt of nonscheduled emergency medical services.

Author

Terry Gilroy is a partner in the New York office of Baker McKenzie and a member of the Compliance and Investigations Practice Group. Prior to joining the Firm in 2018, Terry served as Americas Head of the Financial Crime Legal function at Barclays. Terry advises businesses and individuals on white collar and financial crime issues and has significant experience conducting investigations relating to compliance with the US Foreign Corrupt Practices Act (FCPA) and related bribery and corruption statutes, economic sanctions regulations as administered by the US Department of the Treasury's Office of Foreign Assets Control (OFAC), and the Bank Secrecy Act and related anti-money laundering (AML) regulations and statutes. Terry spent six years on active duty in the United States Army as a Field Artillery officer.

Author

Eunkyung Kim Shin is an associate of Baker McKenzie’s International Commercial Practice Group and the International Trade Compliance Sub-Practice Group in the Chicago office. Eunkyung advices clients on various regulatory compliance and trade issues, concentrating on the US export controls such as the Export Administration Regulations (EAR) and International Traffic in Arms Regulations (ITAR), economic and trade sanctions, US customs and import laws, the US Foreign Corrupt Practices Act (FCPA), and foreign anti-bribery laws.

Author

Callie C. Lefevre is an associate in the Washington, DC office where she is a member of the International Practice Group. Her practice is focused on all aspects of International Trade law, particularly compliance with US export controls, trade and economic sanctions, and US foreign investment restrictions. Prior to joining Baker McKenzie, Callie worked as a student advocate for the New York University School of Law Environmental Law Clinic. While there, she participated in environmental litigation and advocacy pertaining to water quality and urban runoff under the supervision of attorneys at the Natural Resources Defense Council. Callie’s experience also includes working as a summer associate at Baker McKenzie in 2014, where she participated in all aspects of International Trade law, and working as a legal intern at the United Nations High Commissioner for Refugees in Beirut, Lebanon.

Write A Comment