Transcript
21 September 2015
Newsletter − Compliance & CSR Status on sanctions – Iran, Russia and Cuba Introduction | Overview This newsletter contains an overview of recent developments in the sanctions regimes relating to Iran, Russia and Cuba and their importance to Danish companies. The newsletter also describes how these sanctions regimes are expected to develop in the near future. We advise that Danish companies monitor the relevant sanctions regimes on an ongoing basis in order to ensure compliance with current legislation and to avoid breach of sanctions, which may lead to fines or imprisonment. Iran | The Joint Comprehensive Plan of Action Recent developments in the relationship between Iran and the West are expected to lead to eased sanctions in the future. It is currently unclear when the sanctions regime will be relaxed, since this depends on the progress of ensuring that Iran’s nuclear programme is exclusively for peaceful purposes. For now the sanctions remain unchanged, and Danish companies should continue to take precautions to comply with the comprehensive restrictions imposed on trading with Iran. On 14 July 2015, the Islamic Republic of Iran on the one side and on the other side China, France, Germany, the Russian Federation, the United Kingdom and the United States, along with the High Representative of the European Union for Foreign Affairs and Security Policy (the E3/EU+3) agreed on the Joint Comprehensive Plan of Action (JCPOA). The plan is expected to lead to a significantly less restrictive sanctions regime. On 20 July 2015, the UN endorsed the JCPOA by adopting Resolution 2231 (2015) and thus making way for its member states to adopt the obligations therein. The JCPOA obligates Iran to cease its entire nuclear-weapons programme and commit to an exclusively peaceful nuclear programme. The programme will be closely monitored by the International Atomic Energy Agency (IAEA) which will verify when nuclear-related measures have been implemented accordingly and sufficiently. When complete implementation of the measures has been verified, most of the current sanctions imposed on Iran by the E3/EU+3 parties will be lifted. As the JCPOA only applies to sanctions related to nuclear activities, sanctions lifted on implementation will in consequence include financial sanctions, restrictions on transfer of funds, sanctions on
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shipping and transportation and sanctions related to oil, gas and petrochemical sectors as well as gold and other precious metals. Contrary hereto, sanctions related to e.g. human rights will remain in force irrespective of the JCPOA being implemented. The current weapons embargo, the ban on technology products and products related to ballistic missiles, the right to inspection of suspicious cargo and the freezing of assets of certain persons and entities will all remain in force. In the JCPOA, the US has committed to cease to apply and to terminate a number of Iran related sanctions towards non-US persons and entities. It is important to note that not all US sanctions against Iran are expected to be lifted. Both the EU and the US sanctions regimes in force prior to the JCPOA will remain unchanged for now, except for the possibility for permits for export of certain items related directly to specific conditions of the JCPOA as adopted by Council Regulation 2015/1327. Danish companies should therefore continue to take steps to ensure compliance with current sanctions although the JCPOA is expected to lead to a less strict sanctions regime in the future. Russia | Renewed sanctions All three sets of EU sanctions imposed on Russia have been renewed recently and will remain in force until at least 2016. They are primarily a result of EU’s non-recognition policy of the Russian annexation of Crimea and Russia’s current failure to comply with the Minsk Treaty on peace and seizure of arms in the Eastern Ukraine. As EU regimes remain unchanged for now, all Danish companies should continue to take precautions to ensure compliance with the sanctions imposed on Russia. In June 2015, the EU renewed (a) sanctions imposed on Russia relating to Crimea and Sevastopol and (b) sanctions targeting certain sectors and imposing an export ban on dual-use items. On 14 September 2015, the EU once more renewed sanctions imposed on Russia directly targeting 151 persons and 37 entities, which are said to be “responsible for undermining the territorial integrity, independence or security of Ukraine”. The sanctions, which were due to expire on 15 September 2015, will thus remain in force for an extended period of 6 months. In addition to EU sanctions, US sanctions imposed on Russia also continue to be in force. In response to current sanctions Russia is continuing its ban on certain food imports from the West, which has resulted in a current estimated loss of DKK 1.4 billion of Danish food exports. The French president Hollande has proposed a meeting of the leaders of France, Germany, Russia and Ukraine with a view to resolving tensions over the situation in Ukraine and ultimately lifting EU sanctions against Russia. Further developments should therefore be monitored, although presently we see no indication of a general political agreement between the EU member states on lifting the sanctions. We refer to our previous newsletter of 1 July 2015 for more information on compliance with sanctions imposed on Russia.
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Cuba | Changes in US relationship US sanctions imposed on Cuba have been eased following the announcement of diplomatic and economic changes in the relationship between the countries in December 2014. Since January 2015, US nationals have been allowed to engage in certain commerce activities with Cuba and to travel to Cuba for certain purposes. In addition, both governments have (re)opened embassies in the other country and the US has recently lifted sanctions on 71 people and entities. Due to US sanctions’ wide-reaching effects on US persons, goods and currency, sanctions imposed on Cuba may affect Danish companies. The easement may therefore present further possibilities for Danish companies in regards to commerce with Cuba, but significant caution should be taken due to the scope of US sanctions. Measures | Impact on Danish companies Following recent development, Danish companies should continue to take precautions in order to maintain compliance with current sanctions. Despite the substantial developments in the sanctions regimes relating to Iran, Russia and Cuba, the current effects on sanctions are minor. For the time being, the sanctions are still fully in force and should be monitored closely. However, the recent developments provide an indication of what Danish companies may expect in the future in terms of their possibilities of trading with Iran, Russia and Cuba. Danish companies are directly subject to the EU sanctions. The development of the EU sanctions imposed on Iran and Russia is therefore of primary concern for Danish companies trading with Iran or Russia. Because of the far-reaching nature of the US sanctions, with the US courts and authorities taking extraterritorial jurisdiction under certain conditions, US sanctions relating to Cuba (as well as other US sanctions) may also be relevant for Danish companies. Please see our Corporate Compliance – A practical guide 2015 for general guidance on how to ensure compliance with the rules on export control and sanctions. Breach of sanctions Any breach of EU sanctions by a Danish company or person constitutes a criminal offence under the Danish Criminal Code. Breach of the EU sanctions is punishable by a fine or imprisonment for up to four months; however, in aggravating circumstances up to four years. A company may be charged and punished by fines if one of its employees has failed to comply with the EU sanctions in accordance with the provisions of the Danish Criminal Code. Breaches of US or other sanctions also typically carry severe consequences. Gorrissen Federspiel is closely following the developments within export control and sanctions and can assist with the implementation of measures to ensure that sanctions are observed. We also assist in drafting of contracts in order to take into consideration present as well as future sanctions. Furthermore, we also assist in verifying whether business partners are covered by the EU sanctions.
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We can assist your company in conducting full risk assessments regarding the sanctions, and can arrange for further advice on the non-Danish sanctions through our extensive international network of law firms. If you have conducted business that is or could be in breach of the sanctions, we have experience in examining such transaction(s). If your transaction(s) have breached the sanctions, we can help advise on a potential self-disclosure and, if relevant, ensure a competent disclosure process, including preparation of the relevant documentation and seeking resolution with the authorities.
Camilla C. Collet D +45 33 41 42 09 M +45 24 28 68 09
[email protected] Søren Stæhr D +45 86 20 74 10 M +45 24 28 69 05
[email protected] Jesper Thomas Rokkjær D +45 86 20 74 92 M +45 24 28 69 08
[email protected] Paul Wilkinson D +45 33 41 43 39 M +45 61 61 09 07
[email protected]
This information does not constitute and cannot replace legal advice. Gorrissen Federspiel does not assume any liability for damage or losses which directly or indirectly are related to the use of the information.
