U.S. Department of Treasury Sanctions Announcement

On December 9, 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions on, among others, over 40 individuals and entities in North Korea (DPRK), El Salvador, Guatemala, Guinea, Iran, Mali, the Russian Federation, and China (PRC). In its announcement, OFAC stated that it utilized various tools and authorities—including Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act—in order to demonstrate the U.S. government’s focus on promoting respect for human rights and countering corruption. These announcements came in recognition of International Anti-Corruption Day and Human Rights Day, a day established by the United Nations (U.N.) to raise awareness about corruption and U.N. members’ roles in combating and preventing it.

New Sanctions Designations

In OFAC’s announcement, which can be read here in full, OFAC announced a number of new designations as part of an approach “focused on addressing the vulnerabilities in the U.S. and international financial systems that the corrupt exploit to launder their illicit proceeds.”

A. DPRK

In North Korea, the Treasury designated the Ministry of State Security Border Guard General Bureau (BGGB), which is responsible for security along the DPRK’s borders with China and Russia. The Treasury designated the MGGB pursuant to E.O. 13687 for being an agency, instrumentality, or controlled entity of the Government of North Korea or the Workers’ Party of Korea.

The Treasury also designated Kim Myong Chol, Everlasting Empire Limited, Tian Fang (Hong Kong) Holdings Limited, Yancheng Three Line One Point Animation Co., Ltd., Quanzhou Yiyangjin Import and Export Trade Co., Ltd., and Fujian Nanan Import and Export Corporation pursuant to E.O. 13722 for having acted or purported to act for or on behalf of, directly or indirectly, with SEK Studio. According to the Treasury, SEK Studio (SEK), which was previously designated on December 10, 2021, pursuant to E.O. 13722, has engaged in subcontracting with foreign companies to provide low-cost labor and has utilized its animation workers that are located in the DPRK and the PRC to fulfill these contracts. Allegedly, SEK has also evaded sanctions targeting the DPRK government using front companies.

In addition, the Treasury designated Deepak Jadhav, Funsaga Pte Ltd., and Kinoatis LLC pursuant to E.O. 13722 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, SEK.

B. El Salvador

In El Salvador, the Treasury designated Conan Tonathiu Castro Ramirez (Castro Ramirez), for his tenure as Presidential Legal Secretary, and Oscar Rolando Castro (Castro), Minister of Labor, pursuant to E.O. 13818 for being foreign persons who are current or former government officials, or persons acting for or on behalf of such an official, who are responsible for or are complicit in, or have directly or indirectly engaged in, corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery.

C. Guatemala

In Guatemala, the Treasury Designated Allan Estuardo Rodriguez Reyes (Rodriguez), Jorge Estuardo Vargas Morales (Vargas), and Luis Alfonso Chang Navarro (Chang) pursuant to E.O. 13818 for being foreign persons who are current or former government officials, or persons acting for or on behalf of such an official, who are responsible for or are complicit in, or have directly or indirectly engaged in, corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery.

According to the Treasury, Rodriguez utilized his authority as President of Congress to award construction grants in exchange for financial kickbacks. Rodriguez also used his political influence to strike deals in exchange for bribes and facilitated bribes to others, including, for example, by allegedly offering bribes for votes on a state of emergency bill during a floor session of congress. Vargas is a Guatemalan congressman and one of several individuals at the apex of a network designed to control contracts and operations at government-run ports for personal profit.

Lastly, Chang was the Minister of Energy and Mines from 2016-2020 and in that role he was the head of the board of Guatemala's National Electrification Institute (INDE) and used his position to secure kickbacks. He solicited bribes and other favors in exchange for not revoking an oil exploitation license. Chang’s modus operandi was to use his position as Minister to “create problems” for a business and then offer a solution in exchange for bribes and other unlawful favors.

D. Guinea

In Guinea, the Treasury designated Alpha Conde (Conde), the former President of Guinea, who was ousted in a coup d’etat in September 2021. Under his presidency, security forces engaged in violence against supporters of Conde’s opposition leading up to a March 2020 constitutional referendum that enabled Conde to run for a third term. Violence against opposition members continued through and after the October 2020 Guinean presidential election. Conde is designated pursuant to E.O. 13818 for being a foreign person who is or has been a leader or official of an entity, including any government entity, that has engaged in, or whose members have engaged in, serious human rights abuse relating to his tenure.

E. Iran

In Iran, the Treasury designated Ali Akbar Javidan (Javidan), Ebrahim Kouchakzaei (Kouchakzaei), and Allah Karam Azizi (Azizi). Javidan, the Law Enforcement Forces of the Islamic Republic of Iran (LEF) commander in Iran’s Kermanshah Province who has direct oversight over forces that have killed protesters, including children and the elderly. The LEF was designated in 2011 pursuant to E.O. 13553, an Iran human rights authority, for being responsible for or complicit in serious human rights abuses in Iran since the June 2009 disputed presidential election. Javidan is designated pursuant to E.O. 13818 for being a foreign person who is or has been a leader or official of an entity, including any government entity, that has engaged in, or whose members have engaged in, serious human rights abuse relating to his tenure.

Kouchakzaei served as an LEF commander in Chabahar, in Iran’s Sistan and Baluchistan Province. Kouchakzaei is the alleged perpetrator of a mid-September 2022 rape of a 15-year-old girl. According to the Treasury, the incident, which occurred shortly after the death of Mahsa Amini, fueled major protests throughout the province in late September, leading to a violent backlash from security forces and the killings of more than 60 people. Kouchakzaei is designated pursuant to E.O. 13553 for having acted or purported to act for or on behalf of, directly or indirectly, Iran’s LEF.

Azizi, the warden of Iran’s notorious Rejaee Shahr Prison, has personally ordered numerous Human Rights abuses. Under Azizi’s leadership, Rezaee Shahr Prison has remained a place rife with abuse, where prisoners suffer from physical abuse and medical neglect. Azizi is now designated pursuant to E.O. 13818 for being a foreign person who is or has been a leader or official of an entity, including any government entity, that has engaged in, or whose members have engaged in, serious human rights abuse relating to his tenure.

F. Mali

In Mali, the Treasury designated Karim Keita (Keita),  the son of former Mali President Ibrahim Boubacar Keita and the former president of the Security and Defense Commission of Mali’s National Assembly, for allegedly using his position to receive bribes, assign contracts to affiliates who subsequently paid him kickbacks, and embezzle government funds by overpaying on contracts for materiel. Through his father, Keita allegedly arranged to remove from their positions officials who did not support his corruption. Keita also ostensibly arranged bribes to support his father’s re-election. After his father was ousted, Keita fled to Cote d’Ivoire, where he serves as the CEO of Konijane Strategic Marketing.

The Treasury is designating Keita pursuant to E.O. 13818 for being a foreign person who is a current or former government official, or person acting for or on behalf of such an official, who is responsible for or is complicit in, or has directly or indirectly engaged in, corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery. The Treasury is also designating Cote d’Ivoire-based Konijane Strategic Marketing for being owned or controlled by Keita.

G. Russian Federation

In its December 9 announcement, OFAC outlined a series of anti-democratic conduct and human rights abused by the Russian Federation that resulted in the designation of 21 individuals and the Central Election Commission of the Russian Federation (CEC), which helped oversee and monitor sham referendums held in areas of Russia-controlled Ukraine that were rife with incidents of clear voter coercion and intimidation. The Treasury designated Russia’s CEC pursuant to E.O. 14024 for being a political subdivision, agency, or instrumentality of the Government of the Russian Federation.

Read here for an exhaustive list of the individuals sanctioned and the OFAC justifications.

H. PRC

In China, the Treasury designated two individuals, Wu Yingjie (Wu) and Zhang Hongbo (Zhang), for serious human rights abuse in the Tibetan Autonomous Region (TAR) of the (PRC). Wu was the TAR Party Secretary between 2016 and 2021. During his tenure, Wu directed government officials to engage in “stability policies.” The implementation of these stability policies involved serious human rights abuse, including extrajudicial killings, physical abuse, arbitrary arrests, and mass detentions in the TAR. Additional abuses during Wu’s tenure include forced sterilization, coerced abortion, restrictions on religious and political freedoms, and the torture of prisoners.

The Treasury designated Wu pursuant to E.O. 13818 for being a foreign person who is responsible for or complicit in, or has directly or indirectly engaged in, serious human rights abuse.

According to the Treasury, Zhang has been the director of the Tibetan Public Security Bureau (TPSB) since 2018 through at least November 2022. Zhang has worked to advance the PRC’s goals and policies in the TAR as “Tibet’s police chief.” During his tenure, the TPSB engaged in serious human rights abuse, including at TPSB-run detention centers that were involved in the torture, physical abuse, and killings of prisoners, which included those arrested on religious and political grounds.

The Treasury designated Zhang pursuant to E.O. 13818 for being a foreign person who is or has been a leader or official of the TPSB, an entity that has engaged in, or whose members have engaged in, serious human rights abuse relating to his tenure. In addition, the Treasury emphasized that the OFAC designation was complemented by the U.S. Department of State’s announcement of his designation, with associated visa restrictions, under Section 7031(c) of the Department of State, Foreign Operations, and Related Programs Appropriations Act for his involvement in a gross violation of human rights. Pursuant to Section 7031(c), Zhang and his immediate family members are ineligible for entry into the United States.

Sanctions on Distant Water Fishing Vessels based in the PRC

On December 9, 2022, OFAC designated two individuals and the networks of entities that they control in connection with serious human rights abuse aboard distant water fishing (DWF) vessels. In addition, OFAC identified 157 PRC-flagged fishing vessels in which controlled entities have an interest, all of which can be viewed here. The individuals designated by the Treasury are Li Zhenyu (Li) and Xinrong Zhuo (Zhuo), and the networks of entities they control are Dalian Ocean Fishing Co., Ltd. and Pingtan Marine Enterprise, Ltd. (PME) along with eight other affiliated entities. These designations are the latest U.S. government actions in an ongoing effort to deter IUU fishing and associated human rights abuses in the international fishing industry.

In its announcement, the Treasury explained that illegal, unreported, and unregulated (IUU) fishing is “a global and often unrecognized problem that threatens ocean ecosystems and sustainable fisheries” and that the recent designations are “the latest U.S. government actions in an ongoing effort to deter IUU fishing and associated human rights abuses in the international fishing industry.” Notably, this announcement marks the first time that the Treasury has designated an entity, PME, listed on the NASDAQ stock exchange.

Concurrent with the above designations, OFAC issued two general licenses (GLs), Global Magnitsky GLs 3 and 4. GL 3 authorizes U.S. persons to engage in certain transactions ordinarily incident and necessary to the wind down of financial contracts and other agreements related to PME, or the divestment or transfer of debt or equity of PME to a non-U.S. person through 12:01 a.m. eastern standard time, March 9, 2023.

GL 4 authorizes U.S. persons to engage in transactions that are ordinarily incident and necessary to the wind down of transactions involving a vessel in which one or more of the blocked entities identified above have an interest, through 12:01 a.m. eastern standard time, March 9, 2023. For additional details, see GL 3 and GL 4, as well as adjoining FAQs 1100, 1101, and 1102.

Read here for more information concerning the designated individuals and entities.

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