Sanctions Update for Week of May 12, 2014 (with Turza Comment)
Following the May 11, 2014 referendum in eastern Ukraine, the European Union ("EU") and Canada announced on May 12, 2014 that they had imposed sanctions on additional individuals and entities in connection with the ongoing crisis in Ukraine. The EU designations included 13 individuals and two entities - Chernomorneftegaz and Feodosia - the first companies to be targeted by the European Union. (The United Kingdom announced on May 13, 2014 that it had sanctioned the same 15 individuals and entities.)
According to the European Union, both Chernomorneftegaz and Feodosia were "effectively confiscated" by the separatist parliament in Crimea. As previously reported, Chernomorneftegaz is the Crimean subsidiary of the Ukrainian state-owned Naftogaz oil and gas company, and it was sanctioned by the United States and Canada in April. Feodosia reportedly is also a Crimean Naftogaz subsidiary, and operates as an oil-storage terminal with a capacity of nearly 2 million barrels of crude oil.
With respect to the individuals named by the European Union, the most significant designations include Vyacheslav Volodin, the deputy chief of staff to Russian President Vladimir Putin; Vladimir Shamanov, a Colonel-General and commander of Russian Airborne troops; and Vladimir Pligin, a member of the Russian Duma. Other individuals named by the European Union include local Crimean and east Ukrainian officials such as Viacheslav Ponomariov, the self-declared mayor of the Ukrainian city of Slaviansk who was allegedly involved in the kidnapping of OSCE observers in April.
Canada's action targeted 6 Ukrainian and 6 Russian individuals, including Valery Gerasimov, Chief of the General Staff of the Russian military, who was previously sanctioned by the United States.
Note that of those named this week by the European Union, Canada and the United Kingdom, only Chernomorneftegaz and Vyacheslav Volodin were named by the United States as Specially Designated Nationals on April 11, 2014 and April 28, 2014, respectively.
A complete list of all individuals and entities subject to Russia- and Ukraine-related sanctions is available here.
Other (non-Ukrainian/Russian) Sanctions
a. Central African Republic Sanctions
Effective May 13, 2014, President Obama issued Executive Order 13667 authorizing the imposition of sanctions against individuals and entities involved in the ongoing conflict in the Central African Republic ("CAR"), which has seen significant violence and human rights abuses since a rebellion began in late 2012. Since then, the country has devolved into chaos and civil war. The White House Press Secretary issued a statement that the sanctions will "send[] a powerful message that impunity will not be tolerated and that those who threaten the stability of the CAR will face consequences." The White House announced that 5 individuals had been sanctioned under the Executive Order ("E.O."). News reports indicate that the new sanctions target leaders on both sides of the Muslim-Christian sectarian conflict and include the nation's former president, Francois Bozize, and Levi Yakete, who are affiliated with the Christian/animist forces, and former transitional President Michel Djotodia, former Minister of Public Security Noureddine Adam, and Abdoulaye Miskine, the leader of the Democratic Front of the Central African Republic People, all of whom are aligned with the Muslim rebels.
The Obama Administration's sanctions follow on those of the United Nations, which imposed measures against Bozize, Yakete, and Adam on May 9, 2014 pursuant to a January 2014 U.N. Security Council Resolution that authorized a sanctions regime for the CAR.b. Syria Sanctions
On May 14, 2014, the Treasury Department imposed sanctions on two al-Qaeda supporters operating in Syria pursuant to E.O. 13224, which was signed by President Bush on September 23, 2001 in response to the September 11th attacks. The individuals – Abd Al-Rahman Muhammad Zafir Al-Dubaysi Al-Juhni and Abd Al-Rahman Mustafa Al-Qaduli – were designated for acting on behalf of al-Qaeda and the Islamic State of Iraq and the Levant (ISIL), respectively. According to the Treasury Department press release announcing the designations, Al-Juhni has performed various "administrative duties" for al-Qaeda and by mid-2013, before traveling to Syria, had served as al-Qaeda's Chief of Security responsible for counterintelligence. Al-Qaduli is a senior member of ISIL and joined the organization when it was known as al-Qaeda in Iraq. He had served as a deputy and assistant to Abu Musab al-Zarqawi prior to al-Zarqawi's death in 2006.
c. Kingpin Designations
Also on May 14, 2014, the Treasury Department announced that it had designated eight individuals and 20 entities connected to Jorge Fadlallah Cheaitelly as Specially Designated Narcotics Traffickers pursuant to the Foreign Narcotics Kingpin Designation Act. Fadlallah Cheaitelly was arrested in Costa Rica in 2011 and extradited to the United States in 2012 for his leadership role in a Panama-based drug trafficking and money laundering organization. One of the designated individuals is Panamanian attorney Jorge Plata McNulty, who had established shell companies on behalf of Fadlallah Cheaitelly to facilitate the laundering of drug proceeds.
Turza Comment: As the international community continues to digest the results of the vote staged by east Ukrainian separatists on Sunday, May 11, 2014, the EU designations announced on May 12, 2014 represent a limited but meaningful escalation. Most significantly, by naming entities as well as individuals – a step that the European Union had to date refrained from taking – Europe is perhaps signaling that economic interdependence with Russia will not deter it from seeking to impose significant costs on Moscow for its perceived aggression. On the other hand, Europe's decision to name two relatively small Crimean firms may have the effect of undercutting belief in the European Union's resolve. If the situation in Ukraine continues to worsen and perceived Russian meddling continues, Europe, as well as the United States and other countries, may be forced to abandon their ambivalence and make a stark choice between their economic and security interests.The new Central African Republic sanctions demonstrate that the Obama Administration continues to view economic sanctions as an effective tool to achieve its goal of restoring international peace and stability, while punishing those individuals who threaten to undermine it. The new terrorism-related and Kingpin sanctions are a further reminder that the Treasury Department oversees and implements a wide variety of sanctions regimes.
See: Russian and Ukrainian Individuals and Entities Affected by Sanctions; House Committee on Foreign Affairs Hearing: "Russia's Destabilization of Ukraine". Related news: Update on Ukraine and Other Sanctions - Week of May 5 (with Turza Comment) (May 9, 2014); Sanctions Update: Ukraine and Beyond (with Turza Comment) (May 2, 2014). See also: Cabinet Sanctions Page (some materials accessible to Cabinet subscribers only). For more information, please contact Dale Turza, James Treanor or Keith Gerver.