OFAC Updates Sanctions Regulations on Russia, North Korea, Yemen

February 21, 2024

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) recently updated its sanctions regulations with respect to several countries, including Russia, North Korea, and Yemen. These updates consist of:

  • Issuing two determinations prohibiting the importation of certain categories of diamonds mined in Russia;
  • Enforcing the price cap on Russian oil by sanctioning four new entities and one vessel;
  • Modifying and adding certain general licenses under the North Korea Sanctions Regulations; and
  • Adding the Houthi Group in Yemen to OFAC’s Specially Designated Nationals (SDN) List and issuing related general license for diplomatic and humanitarian activities.

A brief summary of these updates is provided below.

Restrictions on Russian Diamonds and Oil

OFAC issued two new determinations on February 8 that implement G7 commitments to ban the importation of Russian diamonds. First, OFAC issued a determination prohibiting the importation and entry into the United States of non-industrial diamonds that were mined, extracted, produced, or manufactured wholly or in part in Russia, notwithstanding whether such diamonds have been substantially transformed into other products outside of Russia. These prohibitions apply to: (i) non-industrial diamonds with a weight of 1.0 carat or greater beginning on March 1, 2024, and (ii) non-industrial diamonds with a weight of 0.5 carats or greater beginning on September 1, 2024. Second, OFAC issued a determination prohibiting the importation and entry into the United States of diamond jewelry and unsorted diamonds of Russian origin or exported from Russia. These prohibitions on diamond jewelry and unsorted diamonds take effect on March 1, 2024.

The United States, which is part of an international coalition of countries (“the Price Cap Coalition”) that includes members of the G7, the European Union, and Australia, also took steps to enforce the price cap on Russian oil, which is set at $60 per barrel. Specifically, on February 8, 2024, the United States added four entities and one vessel to OFAC’s SDN List as a result  of their involvement in a November 2023 price cap violation in which Russian Urals crude oil was sold and delivered at $80 per barrel. Transactions by U.S. persons that involve any property or interests in the property of those on the SDN List are generally prohibited.

Updates to General Licenses Related to North Korea

Effective February 16, 2024, OFAC amended the North Korea Sanctions Regulations found at 31 C.F.R. Part 510 by modifying one general license and adding three new general licenses.

The general license at 31 C.F.R. § 510.512 authorizes certain transactions in support of specified humanitarian activities of nongovernmental organizations (NGOs) in North Korea, including those that support:

  • Basic human needs, such as disaster, drought, or flood relief, food, nutrition, or medicine distribution, the provision of health services, etc.;
  • Democracy building;
  • Education;
  • Non-commercial development projects directly benefitting civilians;
  • Environmental and natural resource protection; and
  • Disarmament, demobilization, and reintegration (DDR) programs and peacebuilding, conflict prevention and conflict resolution programs.

OFAC’s amendments broadened the activities and transactions authorized under the general license, including transactions with certain Government of North Korea entities that are necessary for the provision of services authorized by the license. As a condition of the general license, NGOs relying on this authorization must submit a report to the Department of State no fewer than 30 days before the commencement of their activity, indicating that the NGO’s activities have been approved by or notified to the U.N. Security Council Committee, or that the NGO’s activities do not require such an approval or notification. The State Department may notify NGOs within the two-week period following submission of the report that their activities are not authorized by the NGO general license.

Additionally, OFAC added three new general licenses authorizing the following:

  • Transactions incident to the exportation or reexportation to North Korea of items (commodities, software, or technology) subject to the Export Administration Regulations (EAR) that have been licensed or otherwise authorized by the Department of Commerce under the EAR, including on a “No License Required” (NLR) basis due to the availability of an EAR license exception;
  • The provision of certain agricultural commodities, medicine, and medical devices (excluding “luxury goods” as described in 15 C.F.R. § 746.4(b)(1)) that are not subject to the EAR to North Korea; and
  • Journalistic activities and the establishment of news bureaus by U.S. news reporting organizations and their employees in North Korea.
Sanctions Against Houthis in Yemen

On February 16, 2024, OFAC added Ansarallah — commonly known as the Houthis — to the SDN List, designating the group as a Specially Designated Global Terrorist (SDGT) pursuant to Executive Order 13224, as amended. This designation follows the Houthis’ recent attacks against international maritime vessels in the Red Sea and the Gulf of Aden as well as military forces operating in the area to defend the safety and security of commercial shipping.

In addition, in response to questions from the NGO community and general public, OFAC simultaneously issued a guidance document titled “Compliance Communiqué: Guidance for the Provision of Humanitarian-Related Assistance and Critical Commodities to the Yemeni People.” The document highlights that U.S. sanctions are not intended to stand in the way of legitimate assistance to, and trade with, the Yemeni people and that shipping and delivery of critical supplies to the Yemeni people can continue, in compliance with U.S. sanctions. In particular, the Communiqué notes that the shipment of commercial goods into ports and airports in Houthi-controlled areas is not prohibited, and that commercial shipments of food and other commodities to the Yemeni people that were not prohibited prior to the designation of Ansarallah are not covered by these new sanctions.

Finally, the Communiqué describes the six general licenses OFAC has issued in relation to the designation of Ansarallah that are specific to the flow of humanitarian assistance and critical commodities to Yemen. These general licenses authorize transactions involving Ansarallah that are related to the following:

  • General License 22 – the provision (including sale) of food and certain other agricultural commodities, medicine, and medical devices;
  • General License 23 – telecommunications, mail, and certain internet-based communications;
  • General License 24 – non-commercial, personal remittances to or from a non-blocked individual in Yemen;
  • General License 25 – the provision (including sale) of refined petroleum products into Yemen;
  • General License 26 – operations, import/export of goods, or transit of passengers through, ports and airports in Yemen; and
  • General License 28 – the official business of third-country diplomatic or consular missions to Yemen.

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Contact us if you have questions about these new sanctions developments or their potential impact on your business.