We are a Capitalistic society. When it comes to choosing between maintaining counter-terrorism measures and receiving financial benefits, America has responded. We try to do both.
This recent general licensed involves a powerful international ocean shipping company owned by the Chinese. Originally, COSCO was blocked and sanctioned because it violated the OFAC rules against Iran and carried Iranian Oil in 2018.
In cases revolving international politics, sanctions are almost always intertwined. The United States government uses sanctions—or economic and trade control—to strategically leverage other countries in international politics. For example, if the U.S. does not agree with some of its international counterparts, they can ban trading with that specific country—hurting them financially.
Normally, the assets of a company like COSCO would be immediately blocked, and future dealings with such company banned. But instead of getting blocked and maybe deblocked ( which may need to involve the White House, The Congress and The US Department of Treasury), The US Treasury Department decided to issue a “General License”.
This is interesting because general licenses are normally issued by OFAC to address “Public Needs” while covering a “Categorical Activity”. And that is when our blocked entity was “The largest OIL Transporter” & the owner is technically “Republic of China”.
COSCO is a powerful, established shipping company that has been around since 1978. It handles the logistics for a large portion of the resources (oil) transported today. The company is steeped in politics, as it is a company owned by the Republic of China.
As such, the United States government scrutinized and surveyed the contents and destinations of the Dalian shipping tankers. When there were allegations that these ships were transporting oil to Iran, COSCO received an OFAC sanction during the late of September 2019.
Now that more time has elapsed, the United States government seems to be taking a different approach. Instead of strictly enforcing these new sanctions, OFAC has opted to issue a General License K.
In the General License K, it essentially authorizes the maintenance or wind down of transactions Involving COSCO Shipping Tanker (Dalian) Co., Ltd. (a) Except as provided in paragraph (b) of this general license, all transactions and activities prohibited pursuant to section 5 of Executive Order (E.O.) 13846.
In addition to the new authorization for COSCO shipping tanker company, the new license also extends to all the companies where COSCO has 50% or more ownership stake. These new rules will be in effect as of 12:01 a.m. Eastern standard time on December 20, 2019.
Now, what is this Section 4 of Executive Order 13846?
In short, the order states that the following actions are necessary to implement, when the sanctions selected and maintained by the President, the Secretary of State, or the Secretary of the Treasury:
- Prohibit any United States financial institution from making loans or providing credits to the sanctioned person totaling more than $10,000,000 in any 12-month period, unless such person is engaged in activities to relieve human suffering and the loans or credits are provided for such activities;
- Prohibit any transactions in foreign exchange that are subject to the jurisdiction of the United States and in which the sanctioned person has any interest;
- Prohibit any transfers of credit or payments between financial institutions or by, though, or to any financial institution, to the extent that such transfers or payments are subject to the jurisdiction of the United States and involve any interest of the sanctioned person;
- Block all property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of the sanctioned person, and provide that such property and interests in property may not be transferred, paid, exported, withdrawn, or otherwise dealt in;
If you believe that this new OFAC general license will affect your business, it is best to seek legal counsel.
This is an immigration legal blog. It is not intended to be used as legal advice.
For further information please contact the law offices of attorney Ramona Kennedy.
Ms. Ramona Kennedy received her Jurisprudence Doctorate in America and is a licensed attorney in California (USA). Ramona Kennedy is a member of American Immigration Lawyers Association (AILA).
She is licensed to practice in the United States Supreme Court, US Immigration Courts, California Federal Courts of Southern & Central District & All California Courts. Ramona Kennedy is fluent in English and Farsi (reading & writing).
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