WorldECR India joins the Wassenaar Arrangement 2 US declares North Korea a state sponsor 4 of terrorism A ‘Catch 22’ for Canadian corporations 8 trading with Cuba: FEMA EU introduces legislation imposing targeted 9 sanctions against Venezuela US export controls and economic sanctions 13 enforcement – seven trends to watch in 2018 Export control legislation and enforcement in 17 Scandinavia The Arms Trade Treaty: is it making a difference? 26 SPECIAL REPORT: THE GLOBAL AGENDA ISSUE 65. DECEMBER 2017 www.WorldECR.com News and alerts News and alerts Wassenaar Arrangement finally admits India as a member Multilateral export control technologies that India regime, the Wassenaar undertook earlier this year. Arrangement has agreed to Writing in WorldECR this admit a new member, India, summer, Sanjay Notani, bringing the total number of export control expert at members to 42. The Indian law firm Economic decision to admit India was Laws Practice (‘ELP’), noted: made at the Arrangement’s ‘Export control laws in India plenary session held in have been significantly Vienna on 6 and 7 overhauled by the December. Directorate General of The Wassenaar Foreign Trade (‘DGFT’) with Arrangement was establish - effect from 1 May 2017. The ed in 1996 to promote amendments, among other transparency and respons - things, seek to revise the ibility in the transfer of The overhaul of the SCOMET list and an improvement in relations with Special Chemical, Italy are the background for India’s admission to the Arrangement. conventional arms and Organisms, Materials, dual-use goods and grounds for the realignment countries having suffered a Equipment and Technologies technologies. Particip ating of India in the export control dispute over the alleged category (‘SCOMET) relating states seek to ensure that policy framework’, including shooting of Indian fisher men to dual-use goods and such transfers do not eligibility for certain by Italian marines and the technologies. These changes contribute to the licensing exemptions. subsequent arrest of the have been brought about as development or enhance - ‘India's entry into the latter. However, Italian part of India’s continuing ment of military capabilities Arrangement would be Prme Minister Paolo obligations as a member of that undermine regional mutually beneficial and Gentiloni’s visit to India in the Missile Technology and international security. further contribute to October led to a thaw. Control Regime and as an ‘India's membership international security and Admission to the adherent to the Nuclear [of the Wassenaar non-proliferation object ives,’ Wassenaar Arrangement is Suppliers Group Guidelines. Arrangement] is expected to Kumar added. also being seen as reward for It also seeks to align with the facilitate high technology India joined the Missile a major overhaul of the guidelines and control lists of tie-ups with Indian industry Technology Control Regime SCOMET (Special Chemical, the Wassenaar Arrangement and ease of access to high- in June 2016, but is not Organisms, Materials, and the Australia Group, two tech items for our defence currently a member of the Equipment and multilateral export control and space programs,’ said Nuclear Suppliers Group or Technologies) List relating to regimes that India wishes to Raveesh Kumar, a the Australia Group. In dual-use goods and join.’ spokesperson for the Indian recent years, India’s efforts Ministry of External Affairs. to join the Wassenaar For details of India’s SCOMET overhaul, see: India anticipates that Arangement had been https://www.worldecr.com/archives/indias-dgft-overhauls-scomet/ membership will ‘create the blocked by Italy, the two Free with this issue: The Global Agenda We are delighted to include with this issue uncertainty and against a background of a unique special report on the current more and increasingly varied sanctions, state of play of all things international export control reforms and Brexit, readers sanctions and export controls. will find The Global Agenda a useful The Global Agenda brings together the resource in preparing for tomorrow’s insight and experience of senior challenges. export/trade compliance professionals We hope that you enjoy the report. If and leading sanctions and export control you would like any friends and contacts to lawyers and advisers from both sides of receive a copy, please ask them to email the Atlantic, to create a valuable review of [email protected] and we’ll be the issues likely to drive trade compliance happy to send one through. in 2018 and the lessons to be learned We hope that you’ve enjoyed our from the headline-grabbing developments coverage in 2017 and we wish you all a of 2017. At a time of considerable safe and prosperous 2018. 2 WorldECR www.worldecr.com News and alerts News and alerts Charities face compliance struggle despite OFSI sanctions guidance In October in the UK, HM sanctions law, or provide Treasury’s Office of transaction-specific practical Financial Sanctions advice. Implementation (‘OFSI’) ‘Charities still have to use issued simplified guidance their own judgement and it for charities and NGOs on is tricky for them, for complying with financial example, to know when they sanctions, after receiving have done enough due many requests for diligence (in OFSI’s eyes) clarification from smaller before proceeding to deal charities. with the entity in a ‘The production of NGO- sanctioned target country’, specific guidance is likely to The bank accounts of more than 200 charities in the UK are thought says Matthews. be in response to NGOs to have been closed as a result of economic sanctions. The consequences of experiencing problems in serious financial sanctions delivering money or aid to closed, according to the OFSI licence and how to breaches can be significant. target countries as a result London-based Charity apply. Since April 2017, OFSI has of third parties, especially Finance Group, as well as ‘The guidance is very the power under the Policing banks, acting on their own long delays or the rejection largely a re-statement of the and Crime Act 2017 to concerns about sanctions of money transfers. law, focused on charities,’ impose penalties of up to compliance,’ says Roger The OFSI guidance says Matthews. ‘Although it £1 million or 50% of the Matthews from the London provides an overview of is useful to have the breach, whichever is higher. office of law firm Dechert. financial sanctions and clarification – for example, ‘We realise that charities Banks have focused on explains how to use the of when certain types of often operate in challenging ‘de-risking’ since US OFSI lists; how financial payment model are environments,’ says Rena regulators levied hefty fines sanctions restrictions such considered lawful or Lalgie, head of OFSI. ‘This on Standard Chartered, as asset freezes work; unlawful – it does not go practical guidance is an HSBC Holdings and BNP ownership and control; as much further in term of important step in our efforts Paribas for non-compliance well as covering reporting clarifying uncertainties.’ to raise awareness of with sanctions. This has requirements and compli - It is not OFSI’s policy to financial sanctions and help resulted in the bank ance and enforce ment. It give advance clearance on charities and NGOs better accounts of between 200 also outlines what activity whether a proposed understand their and 300 charities being may be permitted under an operation will breach responsibilities.’ House of Representatives calls for Burma sanctions The US House of together with Democrat Joe Representatives has passed a Crowley of New York. resolution (423-3) A bipartisan sanctions condemning the ‘ethnic bill, spearheaded by the cleansing of the Rohingya’ Republican Senate Armed and calling for an end to Services Committee attacks against the Muslim chairman John McCain and minority in Myanmar. Ben Cardin, lead Democrat The vote on 6 December on the Senate Foreign Affairs More than 600,000 Rohingya are estimated to have fled Rakhine paves the way for possible state into Bangladesh in recent months. Committee, has already been sanctions against Myanmar. introduced into the Senate, ‘This is a moral issue and Rohingya have fled Rakhine with the international on 2 November. a national security issue,’ state into Bangladesh in community to resolve the The proposed sanctions said House Foreign Affairs recent months, following crisis while also calling on would withdraw US financial Chairman Ed Royce in the aggression from the Secretary Tillerson to impose assistance from the debate. ‘No one is secure Myanmar military, which sanctions on those Myanmar military, impose when extremism and has created a humanitarian responsible for human rights travel bans on Myanmar instability is growing in this crisis. abuses,’ said Republican military officials and re- part of the world.’ ‘This resolution calls on Steve Chabot of Ohio, who is impose a ban on jade and More than 600,000 Burmese authorities to work co-sponsor of the resolution, rubies from Myanmar. 3 WorldECR www.worldecr.com News and alerts News and alerts US declares North Korea a state sponsor of terrorism The US has upped the pressure to isolate it from pressure on North Korea outside sources of trade and (‘DPRK’) by officially revenue while exposing its designating it as a state evasive tactics,’ said sponsor of terrorism, and Treasury Secretary Steven imposing further third- Mnuchin. ‘These designat - country sanctions. ions include companies that President