On 13 November 2017, the EU Council unanimously voted to impose a wide range of targeted sanctions on Venezuela in response to the growing political crisis in the country. Notably, the new EU sanctions go further than current US measures against Venezuela by including an arms embargo, as well as a travel ban and an asset freeze.
Further to a similar regime being imposed on Mali in order to target those seeking to derail the 2015 peace agreement, the UK has laid the legal groundwork for financial sanctions to be imposed once relevant individuals have been identified.
New sanctions regime unanimously imposed on Venezuela by EU Council
On 13 November 2017, the EU Council unanimously decided to impose a range of sanctions on Venezuela. These sanctions include:
- an arms embargo, preventing the import and export of weapons;
- a prohibition on the sale of material that might be used for the purposes of internal repression or surveillance; and
- a travel ban and asset freeze affecting individuals and entities linked to committing human rights violations, repressing the political opposition and civilian population and undermining the smooth functioning of democratic processes and institutions.
As a result of these new sanctions, Venezuela now joins the ranks of North Korea and Syria as a country to which European defence companies can no longer sell weapons and other equipment which might be used in civilian repression or surveillance.
According to a statement issued by the EU Council, the move has been prompted by last month's local elections which were marred by "reported numerous irregularities" as well as the establishment of an all-powerful Constituent Assembly to re-write the country's constitution in August this year, which the EU has refused to recognise "because of serious concerns about its legitimacy and representativeness."
The statement emphasises that the sanctions regime will be used "gradually and flexibly" whilst no persons have yet been designated, individuals and entities perpetrating human rights violations and/or flouting democratic principles and the rule of law may be targeted. Restrictive measures may be reversed if the EU sees that "credible and meaningful negotiations" are held with those vying for power in the country, alongside evidence of a greater respect for democratic institutions, free and fair elections and the liberation of political prisoners. No individuals or entities have yet been designated as subject to the EU travel ban or asset freeze, but names are likely to follow in due course.
On the other side of the Atlantic, on 9 November 2017 the US Office of Foreign Assets Control ("OFAC") added nine new individuals to its list of Specially Designated Nationals for the purposes of Venezuelan sanctions. In late August, President Trump issued a new Executive Order targeting the current Venezuelan regime and OFAC implemented new "sectoral" sanctions applicable to the Government of Venezuela and Venezuelan state-owned entities, including state-owned oil producer Petroleos de Venezuela, S.A. (PdVSA) – for further details, please see our briefing here. Other sanctions similar to those imposed by the EU may follow.
UK prepares legal framework for imposition of financial sanctions on Mali
On 7 November 2017, the UK Office of Financial Sanctions Implementation ("OFSI") published a Financial Sanctions Notice (the "UK Notice") in respect of Mali. The Notice comes further to the imposition of sanctions on Mali by the UN Security Council on 5 September 2017 (Resolution 2374) and by the EU (Council Regulation 2017/1770) on 28 September 2017.
The sanctions include a travel ban and asset freeze on individuals or corporate entities seeking to undermine the 2015 peace agreement in Mali by:
- engaging in hostilities, obstructing the implementation of the peace agreement or financing such conduct;
- planning, sponsoring or conducting attacks against government defence forces and international peacekeepers;
- obstructing the delivery of humanitarian assistance to Mali; and
- planning, directing or committing acts that violate international human rights law or international humanitarian law, including the use and recruitment of child soldiers.
While the practical impact of these sanctions is currently limited given that no individuals or entities have yet been designated as targets of the asset freeze, this is set to change as the Sanctions Committee (established by UN Resolution 2374) begins to identify individuals and entities which should be subject to the restrictive measures. The Sanctions Committee will be assisted by a panel of up to five experts in designating individuals and monitoring implementation of the Malian sanctions regime. As such, the UK Notice creates the legal framework for the operation of sanctions once relevant persons have been identified by the UN Sanctions Committee.
Conclusions and outlook
As such, these new restrictive significantly increase the compliance burden for companies dealing with Venezuela or Mali. Corporates are advised to consider the extent to which these new restrictive measures might affect current or future business strategies, noting that the identities of individuals subject to any sanctions are often kept confidential until the day before measures are imposed to minimise flight risk. As such, businesses are encouraged to seek advice in navigating these regimes as soon as possible to ensure compliance as the lists of affected persons expand over time.