On November 9, 2012, the Department of Treasury’s Office of Foreign Assets Control (OFAC) published in the Federal Register the new Yemen Sanctions Regulations (YSR), 31 C.F.R. Part 552. The regulations, which are a final rule implementing the May 16, 2012 Executive Order 13611, entitled “Blocking Property of Persons Threatening the Peace, Security, or Stability of Yemen” (Yemen Blocking Order), are one further step in on-going efforts to develop a Yemen sanctions regime. OFAC itself states that the regulations are being “published in abbreviated form for the purpose of providing immediate guidance to the public,” and that it “intends to supplement this part 552 with a more comprehensive set of regulations.”
The new regulations themselves contain no new prohibitions on transactions involving Yemen. Instead, they cross-reference the Yemen Blocking Order, stating that all transactions prohibited by that Executive Order “are also prohibited pursuant to this part.” The Yemen Blocking Order was issued earlier this year as one of a number of sanctions actions that have been taken recently in response to events surrounding the so called “Arab Spring,” and is based on a presidential finding that “the actions and policies of certain members of the Government of Yemen and others threaten Yemen’s peace, security, and stability.” Specific “actions and policies” cited in the order include those obstructing the peaceful transition of power called for by a November 23, 2011 agreement between the Yemeni government and the opposition, as well as actions and policies obstructing the overall political process in Yemen.
Accordingly, the Yemen Blocking Order set up a targeted sanctions regime, blocking the property of and transactions involving persons determined by the Secretary of the Treasury, and the Secretary of State, to:
- Have engaged in acts that directly or indirectly threaten the peace, security, or stability of Yemen
- Be a political or military leader of an entity that has engaged in such acts
- Have provided support for such acts or to a person whose property and interests in property are blocked by the E.O.
- Be owned or controlled by, or have directly or indirectly acted for or on behalf of, such blocked persons
The Executive Order did not impose any broader sanctions on the country or government as a whole.
The new regulations do not alter this targeted sanction strategy. Instead they appear aimed at setting up a basic regulatory implementation structure, similar to other OFAC regimes. The regulations include standard provisions related to the effect of transfers that violate the YSR as well as a requirement to hold blocked funds in interest bearing accounts. They also include definitions and interpretive provisions that are common across OFAC regimes. Finally, the regulations provide licensing procedures as well as exceptions to the blocking requirements to allow:
- Banks holding blocked accounts to debit those accounts for normal service charges
- Provision of legal services to individuals whose property has been blocked
- Provision of nonscheduled emergency medical services in the United States to persons whose property and interests in property are blocked
To date, OFAC has yet to list any individuals or companies as specially designated nationals under the Yemen Blocking Order. The issuance of a bare bones version of the YSR at this time may indicate OFACs intention to begin listing SDNs in the near future. Moreover, OFAC, as noted, clearly announces in notes to the regulations its intention to issue “a more comprehensive set of regulations, which may include additional interpretive and definitional guidance and additional general licenses and statements of licensing policy.” In short, there is likely more action coming with regard to the YSR.