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U.S. Sanctions. The United States imposed the first sanctions on February 25, 2011 by blocking all prop- erty interests of designated persons that are in, or may come into the United States or the possession or con- trol of U.S. persons. For purposes of these and other OFAC sanctions, “U.S. persons” include companies incorporated in the United States and their non-U.S. branches; any entity or individual in the United States, and U.S. citizens and permanent residents wherever located. The designated persons include the Govern- ment of Libya, its agencies, instrumentalities, and con- trolled entities, the Central Bank of Libya, and Muammar Qadhafi and his children and other indi- viduals associated with his regime. U.S. persons are prohibited from engaging in any transaction directly or indirectly with, or for the benefit of, the designated persons. The only exceptions to this ban are (i) trans- actions with banks owned or controlled by the Gov- ernment of Libya that are organized under the laws of a third country, provided the transactions do not oth- erwise involve the Government of Libya or any person whose property and interests in property are blocked, and (ii) provision of goods and services in the United States to the diplomatic missions of the Government of Libya to the United States and the United Nations and their employees, as well as payment for such goods and services, under certain conditions. Following imposition of the OFAC sanctions, the U.S. Department of State’s Directorate of Defense Trade Controls announced immediate suspension of all licenses for export to Libya of defense articles and technical data subject to the International Traffic in Arms Regulations, and effective March 3, 2011 all li- censes issued by the U.S. Department of Commerce’s Bureau of Industry and Security for exports or re-ex- ports to Libya under the authority of the Export Ad- ministration Regulations were suspended indefinitely. International Developments. On February 26, the U.N. Security Council imposed an arms embargo and other arms restrictions, introduced targeted sanctions against Qadhafi and certain members of his family and regime, called for international collaboration to pro- vide humanitarian assistance, and referred the situa- tion to the International Criminal Court. Then, on February 28, the European Union issued a Council Decision and on March 2 adopted a Council Regula- tion implementing the U.N. sanctions in its member states and imposing additional restrictive measures, including (i) freezing of the assets of Muammar Qad- hafi, five members of his family and twenty other in- dividuals deemed responsible for violence against the civilian population, (ii) a comprehensive ban of the supply of arms, ammunition or related material to Libya, and (iii) prohibition of trade with Libya in equipment which could be used for internal repres- sion. North Korea North Korea’s continued resistance to international pressure to cease its nuclear proliferation efforts re- sulted in significant expansion of OFAC sanctions on August 30, 2010, this time targeting Kim Yong Chol and certain North Korean entities and agencies. All property and interests in property of the designated persons that come within the control of U.S. persons are blocked, and all trade and financial transactions by U.S. persons with the designated persons are prohib- ited. Somalia On April 13, 2010, the United States imposed eco- nomic sanctions against persons contributing to the deteriorating situation in Somalia, including acts of piracy offshore Somalia. Although the sanctions cur- rently apply only to dealings by U.S. persons with the eleven individuals and one entity listed in the Execu- tive Order imposing the sanctions, additional persons may be designated as subject to the Order. This power, coupled with the broad language of the Order, sparked concern within the maritime community about the impact of the Order on those making ran- som payments to pirates to secure the release of crews and ships. Although two of the individuals designated under the Order have been identified as known sup- porters of piracy and the language of the Order may be sufficiently broad to permit future designation of per- sons involved in the paying of ransom to designated pirates, the Administration has not signaled any in- tention to pursue such designations at this time. Fur- thermore, in the absence of any U.S. nexus, the Order does not extend to payments made by non-U.S. shipowners in currency other than U.S. dollars. 20 Maritime Reporter & Engineering News ABOUT THE AUTHOR Barbara Linney is a partner in the Washington D.C. office of Blank Rome LLP, practicing in the area of in- ternational trade and transactions. She regularly advises both U.S. and foreign clients regarding U.S. export controls and international economic sanctions, defense trade and security regulations, anti-bribery and anti- boycott regulations, and other international trade and business issues, including foreign investment review, mergers, acquisitions and financings. She represents clients before various federal agencies, including the De- partments of Commerce, Defense, State, and Treasury (Office of Foreign Assets Control and Committee on Foreign Investment in the United States). Ms. Linney, who holds a masters degree in international law from Georgetown University, also serves as General Counsel to Women in Federal Law Enforcement and the Washington D.C. chapter of Women in International Trade, of which she is a past President. TEL: 202.772.5935; EMAIL: LINNEY@BLANKROME.COM COLUMN LEGAL BEAT *This article reflects developments through March 7, 2011, the date of submission for publication. The views expressed herein are those of the authors, do not necessarily reflect the opinion of the firm or other members of the firm, and should not be construed as legal advice or opinion or a substitute for the advice of counsel. Please contact Barbara Linney (Linney@BlankRome.com) at (202) 772-5935 if you have questions or desire assistance.
