In the last 20 years, each presidential administration in the United States has increasingly turned to economic sanctions to respond to a wide range of U.S. national security and foreign policy issues. Prior to his inauguration in January 2021, President Biden anticipated that his administration would use sanctions to further his policy goals. Over the last year, we have seen the Biden Administration do just that, using sanctions to address a variety of threats to the national security, foreign policy, and economy of the United States, including human rights abuses, conduct that undermines democracies, cyberattacks, and struggles between rival powers.
Overall, the Biden Administration has applied sanctions in a measured way that accounts for other concerns, such as humanitarian aid and preserving alliances, while still promptly responding to global events, such as the suppression of democratic dissent in Russia and Cuba, a coup in Myanmar, the diversion of a plane above Belarus, and the rapid loss of law and order in Afghanistan. While certain geopolitical issues with significant sanctions involvement have not yet been addressed by the Biden Administration, such as relations with Cuba and Venezuela, and reentry into the Iran nuclear deal, it appears that progress is being made on those fronts and that future action is likely. And in Russia, the Biden administration continues to signal that “swift and severe” sanctions will be a major part of the international response if Russia further violates Ukraine’s sovereignty and territorial integrity.1
- Treasury 2021 Sanctions Review
In October 2021, the United States Department of the Treasury released the long-awaited The Treasury 2021 Sanctions Review (the “Review”),2 following Secretary of Treasury Janet Yellen’s commitment during her confirmation hearing to engage in a comprehensive review of Treasury’s use of financial and economic sanctions since the terrorist attacks of September 11, 2001. The Review found that while sanctions are still an effective tool to address various national security and foreign policy objectives, there are four primary challenges to the continued effectiveness of the U.S. sanctions regime: (i) attempts by U.S. adversaries to build payment systems that allow them to avoid the dollar-based financial system; (ii) technological changes, like the growth of digital currencies; (iii) the need to permit the flow of legitimate humanitarian assistance and avoid collateral impact on non-target populations; and (iv) ensuring that sanctions are always deployed alongside other measures as part of an overarching national security strategy.
To this end, the Review included five key recommendations to respond to these challenges and modernize the use of sanctions:
- Adopt a structured policy framework with a clear policy objective;
- Improve sanctions coordination and communications with U.S. allies and partners, financial institutions and other actors within the financial system, nonprofit organizations, and the media, whenever possible;
- Modernize Treasury’s sanctions technology, workforce, and infrastructure;
- Improve access to humanitarian assistance; and
- Ensure sanctions are easily understood, enforceable, and adaptable.
Although the principles outlined in the Review have been articulated by administrations and observers previously, the Review did provide a framework for how the Biden Administration would seek to evaluate and calibrate the use of sanctions going forward. Indeed, throughout 2021, we saw many of the Review’s recommendations reflected in the Biden Administration’s use of sanctions; for example, in the publication of General Licenses to ensure that humanitarian aid could continue to flow into Afghanistan after the country’s occupation by the Taliban and in the many sanctions actions that were coordinated with U.S. allies, including the imposition of additional sanctions in Belarus and Burma and the ongoing coordination with European allies in response to Russia’s aggression into Ukraine. In addition, we have seen the Biden Administration clarify and simplify the Trump Administration’s sanctions on Chinese military-industrial companies to specifically target those companies that facilitate or support human rights abuses in China. And the Biden Administration’s focus on human rights and penalizing conduct that undermines democracies continues to be reflected in its use of sanctions. What follows is a review of the major policy priorities and sanctions programs during President Biden’s first year in office.
Sanctions are not only an important tool for the United States; they play an important role in maintaining the rules-based global economy, which has benefited the world for generations.3
- Deputy Secretary of the Treasury, Wally Adeyemo
- Sanctions in furtherance of Foreign Policy Priorities
The Review emphasized that sanctions should be the “right tool” for the circumstances. It is clear from the use of sanctions in 2021 that the Biden Administration has assessed that sanctions are the right tool to promote the Administration’s objectives in promoting democracy, combating corruption, and addressing human rights abuses. As described below, the Biden Administration has relied on sanctions to penalize individuals all over the world for engaging in corruption and human rights abuses, even when such actions have a limited impact on the countries in which such persons reside, while remaining dormant on more economically fraught issues such as imposing sanctions on those importing Iranian oil abroad.
a. Promoting Democracy and Combatting Corruption
i. Supporting Democratic Leaders and Opposition Groups in Rival Powers
The United States has imposed sanctions against autocratic rival powers with the aim of providing support to opposition parties or ideas. This includes authorizing and imposing sanctions targeting the antidemocratic crackdowns in Hong Kong, Russia’s attempts to silence Aleksey Navalny’s opposition party, and Russia’s annexation of Crimea in Ukraine.
On March 17, 2021, the Office of Foreign Assets Control (“OFAC”) added 24 individuals to the specially designated nationals and blocked persons list (“SDN List”) for erosion of the Hong Kong Basic Law, the special administrative region’s constitution, after their identification by the Secretary of State, in consultation with the Secretary of the Treasury.4 This followed amendment to Hong Kong’s laws which reformed the legislature in a way that targeted pro-democracy groups in Hong Kong. On July 16, 2021, an additional seven individuals were added to the SDN List for undermining Hong Kong’s status as a special administrative region on July 16, 2021 in conjunction with the publication of the joint Hong Kong Business Advisory from the Departments of State, Treasury, Commerce, and Homeland Security.5
On March 2, 2021, OFAC sanctioned seven individuals following the poisoning of opposition leader Aleksey Navalny in Novichok. After his recovery from the poisoning, he was imprisoned by the Russian government. Navalny’s opposition party, Russia of the Future, and his associated anti-corruption organization, the Anti-Corruption Foundation, were designated as extremist organizations by the Russian government.6 This was followed by the imposition of sanctions on August 20, 2021 against nine individuals and entities that were involved in or commanded the operation.7 The Biden Administration also continued to apply sanctions pressure to the Russian government for the annexation of Crimea by renewing Executive Order (“EO”) 13660,8 which was signed in March 2014 following the annexation. This includes the April 15, 2021 sanctions imposed in partnership with the European Union, United Kingdom, Canada, and Australia against five individuals and three entities related to Russia’s occupation of the Crimea region of Ukraine and human rights abuses perpetrated against the local population.9
ii. Supporting Democracy in Burma/Myanmar
Shortly after President Biden was inaugurated, the military of Myanmar detained head of state Aung San Suu Kyi, whose National League for Democracy party had won last year’s November election by a significant margin. The military-affiliated party, Union Solidarity and Development Party, saw its influence reduced and declared a state of emergency and asserted military control over Myanmar on February 1, 2021. Shortly after, on February 10, President Biden signed Executive Order 14014,10 which froze the assets of military leaders who were responsible for the coup. OFAC has monitored the situation closely, designating additional individuals and entities to the SDN List throughout February, March, April, May, July, and December.11 This has included sanctions on military leaders, units within the military itself, and numerous state-owned enterprises, such as in the timber and gemstone industries, that provide significant income to the military regime. The sanctions response has been relatively robust, as this is the sole aspect of the U.S. response to the coup so far.
iii. Supporting Democracy and Addressing Corruption in Eastern Europe
Despite predictions that President Biden would not prioritize Eastern European issues once in office, the Administration has taken an active role in using sanctions to support U.S. priorities in the region, including in Belarus, Bulgaria, and the Western Balkans.
Belarus. Following the 2020 election in Belarus, OFAC revoked Belarus General License 2G,12 which exempted nine Belarusian state-owned enterprises from sanctions on April 19, 2021. These companies are large conglomerates that provide significant income to the Lukashenko regime and operate in various industries. This revocation brings the treatment of these businesses in line with EO 13405,13 signed on June 19, 2006, which originally imposed sanctions on Belarusian politicians following a criticized March 2006 election.
The Biden Administration also imposed additional sanctions on Belarusian individuals and entities following the diversion of a Ryanair flight carrying a Belarusian dissident. The Belarusian government diverted the plane on May 23, 2021 and OFAC sanctioned 16 individuals and five entities responsible for the diversion and other activities related to the 2020 election and subsequent suppression of protestors, journalists, members of the opposition, and civil society on June 21, 2021 under EO 13405.14 OFAC also issued Belarus General License 315 to authorize the State Security Committee of the Republic of Belarus to purchase or use licenses or permits, which were otherwise prohibited by Belarus Sanctions Regulations, to enable the State Security Committee of the Republic of Belarus to import, distribute or use information technology products in Belarus, provided that the goods are subject to the Export Administration Regulations and do not exceed $5,000 per calendar year.
In August 2021, President Biden decided to expand the scope of EO 13405 by issuing EO 1403816 in order to enable OFAC to target antidemocratic actors in Belarus, including any efforts to penalize or limit fundamental freedoms including the freedom of expression, peaceful assembly and the freedom of religion.
On December 2, 2021, OFAC imposed additional designations on 20 individuals, 12 entities and identified three aircraft as blocked property pursuant to EOs 13405 and 14038, in response to the Lukashenko regime’s campaign to smuggle migrants out of Belarus and force them across the borders of the European Union member states including Latvia, Lithuania and Poland.17 As a result of this practice and in an effort to restrict the Lukashenko regime’s access to capital markets, OFAC issued a new Directive 1 under EO 1403818 to prohibit all transactions by U.S. persons involving new debt with a maturity of greater than 90 days issued on or after December 2, 2021 by the Ministry of Finance of the Republic of Belarus or the Development Bank of the Republic of Belarus. OFAC also issued Belarus General License 519 to authorize, until April 1, 2022, any activity necessary to wind down transactions involving the newly designated fertilizer company Open Joint Stock Company Belarusian Potash Company or Agrorozkvit LLC, or any entity in which either company owns a 50 percent or greater interest. The authorization includes certain wind-down transactions in which Belaruskali OAO has a property interest but, according to OFAC Frequently Asked Question 939,20 does not authorize direct transactions with Belaruskali OAO and does not extend Belarus GL 4.21
From detaining thousands of peaceful protesters, to imprisoning more than 500 activists, civil society leaders, and journalists as political prisoners, to forcing the diversion of an international flight in an affront to global norms, the actions of the Lukashenko regime are an illegitimate effort to hold on to power at any price.22
- President Biden
Bulgaria. The Biden Administration also used the imposition of sanctions to pressure Bulgarian politicians accused of bribery and corruption. As in Belarus, government officials have close ties with the Russian government. On June 2, 2021, OFAC designated three Bulgarians, and the 64 entities they control who were accused of facilitating Russian corruption in the Bulgarian government to the SDN List.23 These sanctions are in line with 2009 comments by then Vice President Biden that he rejects the notion of “spheres of influence,” particularly concerning Russian influence in Eastern Europe, and that he supports those nations’ rights to self-determination.24
Western Balkans. Corruption was also the reason given for new sanctions in the area of former Yugoslavia and Albania. These sanctions build on EOs 1321925 and 13304,26 which call for the designation of individuals responsible for obstructing the implementation of regional peace agreements and diminishing the security and stability of the Western Balkans. EO 14033,27 signed on June 10, 2021, expands the criteria for sanctionable activity in the Western Balkans to include undermining democratic processes and institutions, human rights abuses, and corruption.
iv. Addressing corruption in Central America
Officials within the Biden Administration, such as Special Envoy for the Northern Triangle Ricardo Zuniga, have pointed to sanctions as a tool that the Administration may use in its Central American policy in the future.28 The Biden Administration identified improving political conditions and reducing human rights abuses in the region as key issues to alleviating the mass migration crisis emerging in Central and South America. In Guatemala, corruption was targeted by an April 26, 2021 OFAC action that designated two Guatemalan officials to the SDN List for corruption and self-enrichment in their official duties.29 In Nicaragua, four individuals were added to the SDN List on June 9, 2021 and an additional nine individuals and one entity on November 15, 2021 for undermining democracy and engaging in human rights abuses.30 It’s likely that sanctions will continue to be used by the Biden Administration as a tool to combat corruption and human rights abuses in Central America.
v. Addressing corruption in Lebanon
A pervasive culture of corruption and cronyism led to OFAC’s October 28, 2021 designation of three Lebanese businessmen, Jihad al-Arab, Dany Khoury, and Jamil Sayyed, for their efforts to profit at the expense of the Lebanese people and state institutions.31 These designations were made pursuant to EO 1344132 that targets persons who contribute to the breakdown of Lebanon’s economy, institutions and rule of law. OFAC designated al-Arab and Khoury for using their political connections to obtain multimillion-dollar landfill projects and failing to fulfill the terms of those contracts contributing to a garbage crisis in Lebanon, while Sayyed was designated for working with senior government officials to avoid complying with Lebanese banking policies and regulations in connection with the transfer of more than $120 million in overseas investments.
vi. Supporting democracy and addressing corruption in Nicaragua
OFAC sanctioned four individuals related to Nicaragua’s Ortega regime on June 9, 2021.33 The designations were based on a Trump Administration executive order, EO 13851,34 which was enacted on November 27, 2018 following the repression of protests against the Ortega regime in April 2018. EO 13851 authorizes sanctions on persons found to be responsible for serious human rights abuses, actions that undermine democratic processes, actions that threaten the stability of Nicaragua, and corruption. On November 15, 2021, OFAC also designated the Public Ministry of Nicaragua (Ministerio Publico de Nicaragua), Nicaragua’s federal public prosecutor’s office, and nine officials in the Nicaraguan government following the country’s rigged national elections held on November 7, 2021 and orchestrated by President Daniel Ortega and Vice President Rosario Murillo.35 According to OFAC, the Public Ministry of Nicaragua was responsible for passing six laws that were used to detain 40 individuals on groundless charges, including seven potential presidential candidates that were unjustly arrested and detained in order to prevent them from running for office. OFAC reported that the nine officials that were designated were key supporters of the Ortega regime.
b. Supporting Human Rights
The Biden Administration has taken steps to crack down on human rights abuses in Africa, Asia, Central America, and the Middle East, and against LGBTQ+ communities generally. The Biden Administration targeted major issues, such as the killing of Washington Post journalist Jamal Khashoggi, ongoing repression in Xinjiang, and human rights abuses related to corruption in Central America.
“We are determined to put human rights at the center of our foreign policy, and we reaffirm this commitment by using appropriate tools and authorities to draw attention to and promote accountability for human rights violations and abuses, no matter where they occur.”36
-Secretary of State, Antony J. Blinken
Saudi Arabia and Jamal Khashoggi. During a Democratic primary debate on November 20, 2019, then-candidate Biden promised to hold Prince Mohammad bin-Salman directly accountable for the assassination of Jamal Khashoggi.37 On February 26, 2022, OFAC added an individual and an entity to the SDN List that were related to the killing, including the Tiger Squad, a covert operations team.38 Prince Salman was not sanctioned, nor was his visa revoked by the State Department. While President Biden did not directly state that his Administration would sanction the Saudi Prince in his comments during the debate, some in the media criticized the fact that Prince Salman was not sanctioned, calling it a broken promise.39
Ethiopia. On August 23, 2021, OFAC designated General Filipos Woldeyohannes, the Chief of Staff of the Eritrean Defense Forces (“ETF”), a group responsible for the massacre, rape and torture of civilians in Ethiopia and the destruction of property and forced eviction of families in Ethiopia’s Tigray region despite a unilateral cease-fire declared by the Ethiopian government on June 28, 2021.40 The Biden Administration once again utilized the authority granted in EO 13818,41 which builds upon and implements the Global Magnitsky Human Rights Accountability Act, aimed at perpetrators of serious human rights abuses and corruption around the world.
On September 17, 2021, President Biden signed EO 1404642 to target persons and entities that commit serious human rights abuses in regions of Ethiopia and Eritrea or facilitate the ongoing crisis in Ethiopia. Because the EO was not directed against the Ethiopian and Eritrean people, OFAC issued Ethiopia General Licenses 1,43 2,44 and 345 to ensure that international and other nongovernmental organizations could continue to provide humanitarian aid, including agricultural goods and medicines, to the region. Pursuant to EO 14046, OFAC designated two individuals and four entities, including the Eritrean military, also known as the EDF, on November 12, 2021, for the ongoing fighting and violence in northern Ethiopia and for blocking humanitarian aid to the region, causing thousands to die and millions to suffer.46 OFAC also designated the People’s Front for Democracy and Justice (“PFDJ”), the sole political party in Eritrea led by Eritrean President Isaias Afwerki, who has issued direct orders to EDF generals in the conflicts who are contributing directly to the Ethiopian crisis.47 At the same time, OFAC issued Ethiopia General License 4 to authorize wind-down transactions until December 14, 2021 with Hidri Trust, the holding company for all PFDJ business enterprises, and the Red Sea Trading Corporation, owned or controlled by one of the newly designated individuals.48
Protecting and Promoting LGBTQ+ Rights. On February 26, 2021, President Biden signed National Security Memorandum 4, which instituted a number of measures to promote LGBTQ+ rights in the United States and abroad.49 Section 4 of the Memorandum instructed the Department of State to organize other executive agencies to coordinate a response to acts by foreign governments that restrict the right of LGBTQ+ persons, including sanctions, visa bans, and other actions. As of the date of this publication, no government, individual, or entity has been sanctioned or been subjected to travel restrictions under this Memorandum.
c. Participation in International Organizations – Playing Nice in the Global Sandbox
President Biden reversed course on President Trump’s June 2020 decision to sanction employees of the International Criminal Court who investigate, arrest, detain, or prosecute U.S. personnel or attempt to do the same, citing the approach as not an effective or appropriate strategy in his executive order. Although President Biden lifted the restrictions imposed in 2020, the Biden Administration’s April 1, 2021 executive order, EO 14022,50 continued to assert that the United States is not party to the Rome Statute or subject to the jurisdiction of the International Criminal Court. On July 2, 2021, OFAC issued a final rule confirming the removal of sanctions on individuals related to the ICC.51 The Biden Administration is likely to continue to reject the jurisdiction of the International Criminal Court, but will not take active steps like sanctions to penalize the organization.
III. Major Sanctions Programs of 2021
The Biden Administration used sanctions – with an emphasis on multilateralism – as a major part of its foreign policy in many parts of the world, including Russia, China, Iran, and Afghanistan (as detailed below). As of the date of this publication, the Administration appears ready to respond to further Russian aggression into Ukraine with a package of sanctions and export controls measures.
Using sanctions as a punitive measure against Russia has been a key facet and clearly stated goal of the Biden Administration. However, this approach has not been without its risks as the hesitance to implement sanctions related to the Nord Stream 2 pipeline due to a potential fallout with Germany demonstrates. That said, given Russia’s recent activities related to Ukraine, it is unlikely that tensions between the two nations will ease anytime soon, and the United States appears ready to respond with additional sanctions and export controls in response to Russian aggression in Ukraine.
Nord Stream 2. Nord Stream 2 is a natural gas pipeline that travels from Russia to Germany via the Baltic Sea. The original Nord Stream project is a pair of two pipelines that were built in 2011 and 2012. Nord Stream 2 follows a similar path; it began construction in 2018 and was completed in June 2021. The United States has opposed this pipeline, citing European energy security and stability.52 Particularly, it would increase European dependence on Russian energy and deprive Ukraine of lucrative transit fees from existing overland pipelines, threatening Ukraine’s ability to counter Russian aggression.
During Secretary of State Blinken’s confirmation hearing, he stated that he intended to do everything he could to prevent the completion of the Nord Stream 2 pipeline.53 In order to accomplish this, OFAC added two entities to the SDN List on February 22, 2021, pursuant to Protecting Europe’s Energy Security Act,54 a 2019 Act meant to protect Europe’s energy supply by preventing additional reliance on Russian natural gas and oil. However, in June of 2021, Secretary Blinken stated that the pipeline was a “fait accompli” and that the United States will pivot to working with Germany to limit how dependent Europe’s energy supply will be on Russia.55 On May 20, 2021, the Department of State waived sanctions related to Nord Stream 2.56 Secretary Blinken stated that further sanctions on individuals associated with Nord Stream 2 would only serve to deteriorate relations between the United States and Germany.57 OFAC also limited sanctions associated with the pipeline when it issued a waiver on May 21, 2021, allowing U.S. persons to engage with Russia’s Federal State Budgetary Institution Marine Rescue Service, except as relates to Nord Stream 2, Turkstream, and any successor projects.
Election Interference and Cybersecurity. Following Russian interference in the 2016 U.S. presidential election, the Trump Administration’s response was limited. President Trump repeatedly contradicted U.S. intelligence officials who asserted that election interference had taken place.58 While the Trump Administration did impose sanctions on several individuals and entities related to their attempts to influence U.S. elections, President Biden promised during his campaign to take a tougher stance on Russia, specifically with respect to election interference, although he did not directly mention sanctions.59
Ultimately, sanctions would become a tool that the Biden Administration used to punish election interference. On April 15, 2021, Biden signed EO 14024,60 which authorized the imposition of sanctions against entities and individuals involved in election interference. On the same day, OFAC implemented EO 14024 by designating five Russian entities operating in the technology sector of the Russian economy that were determined to enable the Russian Intelligence Services’ cyber activities.61 On the same day, OFAC also targeted 16 entities and individuals who attempted to influence the 2020 U.S. presidential election at the direction of the leadership of the Russian government under various EOs.62 However, the Biden Administration indicated that despite the broad-reaching nature of these sanctions, the United States hoped to ease tensions between the two nations while still providing a proportional response to behavior that the United States deemed unacceptable interference in democratic processes.63
Human Rights Abuses in the Xinjiang Uyghur Autonomous Region. During his campaign, President Biden criticized the Trump Administration’s weak approach to imposing sanctions on China related to human rights abuses in Xinjiang and suggested his administration would take a tougher approach.64 The Biden Administration used the authority provided by EO 13818,65 issued by the Trump Administration on December 20, 2017, in order to impose sanctions against two Chinese officials involved in serious human rights abuses against ethnic minorities in Xinjiang, by adding individuals to the SDN List on March 22, 2021.66 While EO 13818 did not specify China as a center of human rights abuses, the Trump Administration used EO 13818 to designate one entity and four individuals involved in human rights abuses in Xinjiang on July 9, 2020 and the designation of the Xinjiang Production and Construction Corps and two related individuals on July 31, 2020.67 The March 2021 designations indicate the Biden Administration’s willingness to continue the Trump Administration’s strategy of using EO 13818 to crack down on human rights abuses in Xinjiang province.
Targeting Chinese Military-Industrial Companies Facilitating Human Rights Abuses. Beyond human rights abuses in Xinjiang, the Biden Administration has imposed additional sanctions related to the trade war and national security risks posed by China. EO 14032,68 published on June 3, 2021, targets Chinese military-industrial companies (“CMICs”) that engage in a policy of “military-civil fusion” as prescribed by the Chinese government. This order follows the prior Administration’s EO 13959, which established the Communist Chinese Military Companies designation.69 The Biden Administration’s order modified the scope of the prior order. Rather than authorizing sanctions on any Chinese company affiliated with the Chinese military or defense industrial base, EO 14032 identifies particular activities that make a company eligible to be designated as a CMIC by OFAC, including operating in the surveillance sector of the Chinese economy and facilitating surveillance outside of China, the surveillance of ethnic or religious minorities, or other human rights abuses. This shift to a focus on CMIC’s facilitating human rights abuses in China is consistent with the Biden Administration’s focus on using sanctions as a means of countering or punishing human rights abuses abroad.
Due to the policy described above, the business goals of CMICs are closely intertwined with military needs. Approximately 50 companies, including large telecommunications companies like Xiaomi and Huawei, were listed as companies banned for investment by U.S. persons. Xiaomi, which was originally included in this list, was ordered off by an injunction in the United States District Court for the District of Columbia, which OFAC recognized in updated guidance on May 27, 2021.70
- The Future in Iran
During his campaign, President Biden stated that he would seek to reenter the Joint Comprehensive Plan of Action (“JCPOA”), which would allow the United States to ease sanctions on Iran.71 Before talks began, the Biden Administration extended EO 12957,72 declaring a state of emergency with respect to Iran’s nuclear proliferation and support of terrorist groups in 1995. During the last 10 months, several rounds of negotiations have taken place between the United States and Iran in Vienna. Negotiations stalled in late June 2021 over the United States’ ability to commit to honoring the JCPOA in future Administrations. Following President Trump’s 2018 exit from the JCPOA, Iranian negotiators are now seeking a firm commitment that the United States will not pull out of a future deal.73 However, U.S. negotiators state that it is impossible for them to bind Congress, nor are they willing to condition the deal on UN mechanisms, as those would be subject to Russia’s veto in the UN Security Council.74
Negotiations between the United States and Iran resumed in November 2021 with U.S. officials indicating that there has been modest progress.75 However, the position taken by both sides of the negotiation and the fact that United States and Iranian negotiators are not speaking directly indicate that it may be some time before the negotiations reach a resolution despite the United States’ displeasure with the pace of the negotiations.
Despite the ongoing tensions, on June 17, 2021, OFAC issued Iran General License N76 to allow U.S. persons to export personal protective equipment and other equipment related to the COVID-19 pandemic to Iran. This action is in line with prior OFAC actions to issue General Licenses related to humanitarian aid efforts in sanctioned countries, such as Iran General License 8A,77 which authorizes transactions with the Central Bank of Iran and the National Iranian Oil Company to effect transactions necessary for humanitarian aid in Iran. Moreover, OFAC worked to establish the Swiss Humanitarian Trade Agreement in February 2020, which established a channel for humanitarian aid to be transported to Iran without being diverted by the Iranian government.
Following President Biden’s withdrawal of U.S. troops from Afghanistan at the end of August 2021, OFAC issued General License 1479 and 1580 on September 24, 2021 to ensure that humanitarian assistance intended for civilians in Afghanistan would not be affected by U.S. counterterrorism sanctions such as EO 13224, as amended, the Global Terrorism Sanctions Regulations, and the Foreign Terrorist Organizations Sanctions Regulations. On November 22, 2021, OFAC also designated Ismatullah Khalozai, an international financial facilitator for the Islamic State’s Khorasan Province (“ISIS-K”), which was designated as a Foreign Terrorist Organization by the State Department in 2016, as a Specially Designated Global Terrorist (“SDGT”) pursuant to the Treasury’s counterterrorism authority, EO 13224, as amended.81 Khalozai, was sanctioned by OFAC for supporting ISIS-K’s Afghanistan operations that fund human trafficking networks as well as the movement of foreign fighters responsible for escalating tensions in this region. OFAC coordinated the Khalozai designation to coincide with the State Department’s designation of three ISIS-K leaders as SDGTs.
As the situation in Afghanistan develops, we expect the Biden Administration to continue to use sanctions as a means of putting pressure on the Taliban. In line with Treasury’s recommendations in the 2021 Sanctions Review, the Biden Administration will likely attempt to tailor further sanctions authorizations and designations or publish additional General Licenses to shield the citizens of Afghanistan from the effects of any future sanctions, to the extent possible, and ensure that humanitarian aid can still enter the country.
IV. BUSINESS AS USUAL
a. Combatting Terrorism
The Biden Administration has continued the U.S. practice of imposing sanctions on individuals and entities as a part of the War on Terror. OFAC has continued to designate individuals and entities connected to terrorism to the SDN List from the Democratic Republic of the Congo, Iran, Lebanon, Nigeria, Pakistan, Syria, Turkey, and Yemen. In addition to these designations, OFAC took further action in Syria in April 2021 when it decided not to renew a waiver for Delta Crescent Energy to operate oil production facilities in northeastern Syria.
The Biden Administration is likely to revert to Obama-era programs with respect to Cuba. President Biden criticized the additional sanctions that the Trump Administration placed on Cuba, stating during his campaign that the Trump Administration’s sanctions-based approach has been unsuccessful.82 These statements suggested that the Biden Administration would begin easing sanctions, but this has not yet occurred.
The U.S. position on Venezuela with respect to sanctions has remained constant during the Biden presidency. In late June, President Biden rejected the Maduro regime’s request to lighten sanctions, with State Department representatives stating that the Maduro regime must engage with opposition leader Juan Guiado and take steps towards free and fair elections in the future.83 As part of the continuation of Venezuelan sanctions, OFAC issued a six-month general license, General License 8H, authorizing Chevron and other oil companies to continue operating within Venezuela on a limited basis. General License 8H authorized transactions with Petróleos de Venezuela, S.A. (“PdVSA”) for five U.S. oil companies84 until December 1, 2021 and was subsequently replaced by General License 8I,85 extending the authorizations to June 1, 2022.
The Biden Administration has also extended the delay on CITGO bondholders being able to sell or transfer shares in connection with the PdVSA 8.5% bond several times in 2021. On October 24, 2019, OFAC issued Venezuela General License 5A, delaying the implementation of General License 5, which provided an exemption from Executive Order 13835, which would prohibit PdVSA 8.5% bondholders from selling or transferring shares in connection with the bond. The most recent delay was published on January 20, 2022 when OFAC issued Venezuela General License 5I, extending the delay to January 20, 2023.86
Further progress has been made in fine-tuning sanctions to address humanitarian concerns. On June 17, 2021, OFAC issued Venezuela License 3987 to allow U.S. persons to export PPE and other equipment related to the COVID-19 pandemic to Venezuela. Moreover, OFAC issued Venezuela General License 40 on July 12, 2021,88 which authorizes transactions of liquid petroleum products to Venezuela, in order to address the shortage of liquid gas in Venezuela.
Similar to the Biden Administration’s approach to Venezuela, sanctions on Syria are likely to remain the same, barring a change in circumstances. On May 6, 2021, the Biden Administration extended U.S. unilateral sanctions against Syria for another year.89 In the notice extending the sanctions, the Biden Administration cited Syria’s continued threats to use chemical weapons and its support of terrorist groups as the reasons for the extension. Moreover, the notice stated that a reduction in sanctions would only follow a nationwide ceasefire, unobstructed humanitarian aid, and a political settlement in line with UN guidelines.
On June 17, 2021, OFAC issued a Syria General License 2190 to allow U.S. persons to export PPE and other equipment related to the COVID-19 pandemic to Syria. However, this is not a response to progress in the civil war – this license was issued simultaneously with similar humanitarian licenses to authorize the export of PPE and other equipment to Iran and Venezuela.
The Biden Administration’s sanctions approach has evinced a view of sanctions as a useful tool for accomplishing foreign policy goals that should be used in tandem with other considerations, such as maintaining alliances and negotiation. This was especially the case in the decision to limit sanctions with respect to the Nord Stream 2 pipeline and in response to the assassination of Jamal Khashoggi. President Biden has also expressed his view that certain sanctions under the prior Administration were ineffective tools to deal with the issues at hand, such as those in Iran, Cuba, and with respect to the ICC. However, apart from rolling back the Trump Administration’s sanctions on the ICC, there has yet to be any movement related to the sanctions imposed on Iran or Cuba.
Moreover, in areas where sanctions have proven to be a valuable tool, such as CMICs, prior sanctions efforts have been tailored to effectively address the problem at hand. In some areas, such as corruption in Central America and Eastern Europe, cartels, and terrorism, the current approach to sanctioning culpable individuals has continued, indicating that the Biden Administration believes the current approach to be effective. Additionally, the Biden Administration has maintained the status quo with respect to sanctions in areas of active diplomatic negotiations, such as in Cuba, Iran, Syria, and Venezuela. Those sanctions are likely to remain in effect until those situations develop diplomatically. Certain global issues have been met with sanctions as a first response, such as the coup in Myanmar, indicating that sanctions will continue to be an important part of U.S. foreign policy.
Finally, with the publication of the Treasury’s 2021 Sanctions Review, we expect the Biden Administration to continue making efforts to implement sanctions in a manner consistent with the recommendations in the report. The sanctions implemented and authorized by the administration in 2021 reflect to an extent the recommendations in the report, with each having a policy objective. However, while some sanctions against the Lukashenko regime and Russia are, for the most part, multilateral, the United States still has several unilateral sanctions programs some of which, like those related to the Nord Stream 2 pipeline, risk alienating its allies. We expect that this is one aspect that the current Administration will seek to improve in order to make its sanctions programs more effective.
1 “Remarks by President Biden and Chancellor Scholz of the Federal Republic of Germany at Press Conference,” (Feb. 7, 2022), available here (last visited February 10, 2022).
2 The Treasury 2021 Sanctions Review, available here (last visited February 10, 2022).
3 “Testimony of Deputy Secretary of the Treasury Wally Adeyemo before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate,” (Oct. 19, 2021), available here (last visited February 10, 2022).
4 “Update to Report on Identification of Foreign Persons Involved in the Erosion of the Obligations of China Under the Joint Declaration or Basic Law,” (Mar. 17, 2021), available here (last visited February 10, 2022).
5 “Publication of Hong Kong Business Advisory; Hong Kong Related Designations,” (Jul. 16, 2021), available here (last visited February 10, 2022); “Hong Kong Business Advisory: Risks and Considerations for Businesses Operating in Hong Kong,” (Jul. 16, 2021), available here (last visited February 10, 2022).
6 “Treasury Sanctions Russian Officials in Response to the Novichok Poisoning of Aleksey Navalny,” (Mar. 2, 2021), available here (last visited February 10, 2022).
7 “Treasury Sanctions Russian Operatives and Entities Linked to the Poisoning of Aleksey Navalny, Chemical Weapons Program,” (Aug. 20, 2021), available here (last visited February 10, 2022).
9 “Treasury Sanctions Russian Persons in the Crimea Region of Ukraine,” (Apr. 15, 2021), available here (last visited February 10, 2022).
10 Executive Order 14014 of February 10, 2021, “Blocking Property With Respect to the Situation in Burma,” available here (last visited February 10, 2022).
11 See “Burma-related Designations,” (Feb. 22, 2021), available here (last visited February 10, 2022); “Burma-related Designations; Counter Terrorism Designations and Designations Updates; Global Magnitsky Designation Update; Democratic Republic of the Congo Designation Update,” (Mar. 10, 2021) available here (last visited Feb. 10, 2022); “Global Magnitsky Designations and Designations Updates; Burma-related Designations,” (Mar. 22, 2021) available here (last visited Feb. 10, 2022); “Burma-related Designations, Designation Removal; Global Magnitsky Designation Update; Counter Terrorism Designation Update; Issuance of Burma-Related General Licenses and Associated Frequently Asked Questions,” (Mar. 25, 2021) available here (last visited Feb. 10, 2022); “Burma-related Designation,” (Apr. 8, 2021) available here (last visited Feb. 10, 2022); “Burma-related Designations; Kingpin Act Designations Removals,” (Apr. 21, 2021) available here (last visited Feb. 10, 2022); “Burma-related Designations; Counter Terrorism Designations,” (May 17, 2021) available here (last visited Feb. 10, 2022); “Burma-related Designations; Iran-related Designations Removals; Non-proliferation Designations Removals,” (Jul. 2, 2021) available here (last visited Feb. 10, 2022); “Global Magnitsky Designations; North Korea Designations; Burma-related Designations; Non-SDN Chinese Military-Industrial Complex Companies (NS-CMIC) List Update,” (Dec. 10, 2021) available here (last visited Feb. 10, 2022).
12 GENERAL LICENSE NO. 2G, “General License with Respect to Entities Blocked Pursuant to Executive Order 13405,” available here (last visited February 10, 2022).
13 Executive Order 13405 of June 17, 2006, “Blocking Property of Certain Persons Undermining Democratic Processes or Institutions in Belarus,” available here (last visited February 10, 2022).
14 “Belarus Designations; Issuance of Belarus General License 3 and Related Frequently Asked Questions,” (May 23, 2021) available here (last visited February 10, 2022).
15 General License No. 3, “Authorizing Certain Transactions with the State Security Committee of the Republic of Belarus,” available here (last visited February 10, 2022).
16 Executive Order 14038 of August 9, 2021, “Blocking Property of Additional Persons Contributing to the Situation in Belarus,” available here (last visited February 10, 2022).
17 “Treasury Expands Sanctions Against Belarusian Regime with Partners and Allies” (Dec. 2, 2021) available here (last visited Feb. 10, 2022).
18 DIRECTIVE 1 UNDER EXECUTIVE ORDER 14038 (Dec. 2, 2022), available here (last visited February 10, 2022).
19 GENERAL LICENSE NO. 5, “Authorizing the Wind Down of Transactions Involving Open Joint Stock Company Belarusian Potash Company or Agrorozkvit LLC,” available here (last visited February 10, 2022).
20 OFAC Frequently Asked Question 939 (Dec. 2, 2021), available here (last visited February 10, 2022).
22 “Statements by President Joseph R. Biden, Jr. on Belarus” (Aug. 9, 2021), available here (last visited February 10, 2021).
23 “Treasury Sanctions Influential Bulgarian Individuals and Their Expansive Networks for Engaging in Corruption” (June 2, 2021), available here (last visited February 10, 2022).
24 Joseph Biden, Remarks by Vice President Biden at 45th Munich Conference on Security Policy, White House (Feb. 7, 2009), here.
25 Executive Order 13219 of June 26, 2001, “Blocking Property of Persons Who Threaten International Stabilization Efforts in the Western Balkans,” available here (last visited February 10, 2022).
26 Executive Order 13304 of May 29, 2003, “Termination of Emergencies With Respect to Yugoslavia and Modification of Executive Order 13219 of June 26, 2001,” available here (last visited February 10, 2022).
27 Executive Order 14033 of June 8, 2021, “Blocking Property and Suspending Entry Into the United States of Certain Persons Contributing to the Destabilizing Situation in the Western Balkans,” available here (last visited February 10, 2022).
28 Ted Hesson & Matt Spetalnick, U.S. Targets Central America Officials for Possible Sanctions over Corruption, Reuters (May 5, 2021, 7:10 PM), here.
29 “Treasury Sanctions Current and Former Guatemalan Officials for Engaging in Corrupt Activities,” (Apr. 26, 2021), available here (last visited February 10, 2022).
31 “Treasury Targets Two Businessmen and One Member of Parliament for Undermining the Rule of Law in Lebanon,” (Oct. 28, 2021), available here (last visited February 10, 2022).
32 Executive Order 13441 of August 1, 2007, “Blocking Property of Persons Undermining the Sovereignty of Lebanon or Its Democratic Processes and Institutions,” available here (last visited February 10, 2022).
33 “Treasury Sanctions Nicaraguan Officials for Supporting Ortega’s Efforts to Undermine Democracy, Human Rights, and the Economy,” (June 9, 2021), available here (last visited February 10, 2022).
34 Executive Order 13851 of November 27, 2018, “Blocking Property of Certain Persons Contributing to the Situation in Nicaragua,” available here (last visited February 10, 2022).
35 “Treasury Sanctions Public Ministry of Nicaragua and Nine Government Officials Following Sham November Elections,” (Nov. 15, 2021), available here (last visited February 10, 2022).
36 “The United States Promotes Accountability for Human Rights Violations and Abuses,” (Dec. 10, 2021), available here (last visited February 10, 2022).
37 Robin Wright, The Sweeping Impact of a Broken Biden Campaign Promise, New Yorker (Mar. 1, 2021), here.
38 “Global Magnitsky Designations,” (Feb. 26, 2021), available here (last visited February 10, 2022).
39 Wright, supra note 36; Josh Rogin, Biden’s Promises to Give Jamal Khashoggi Justice will be Tested Soon, Wash. Post (Dec. 17, 2020), here; Kaitlan Collins et al., Biden Doesn’t Penalize Crown Prince Despite Promise to Punish Senior Saudi Leaders, CNN (Feb. 27, 2021, 10:05 PM), here.
40 “Treasury Sanctions Eritrean Military Leader in Connection with Serious Human Rights Abuse in Tigray,” (Aug. 23, 2021), available here (last visited February 10, 2022).
41 Executive Order 13818 of December 20, 2017, “Blocking the Property of Persons Involved in Serious Human Rights Abuse or Corruption,” available here (last visited February 10, 2022).
42 Executive Order 14046 of September 17, 2021, “Imposing Sanctions on Certain Persons With Respect to the Humanitarian and Human Rights Crisis in Ethiopia,” available here (last visited February 10, 2022).
43 GENERAL LICENSE NO. 1, “Official Activities of Certain International Organizations and Other International Entities,” available here (last visited February 10, 2022).
44 GENERAL LICENSE NO. 2, “Certain Transactions in Support of Nongovernmental Organizations’ Activities,” available here (last visited February 10, 2022).
45 GENERAL LICENSE NO. 3, “Transactions Related to the Exportation or Reexportation of Agricultural Commodities, Medicine, Medical Devices, Replacement Parts and Components, or Software Updates,” available here (last visited February 10, 2022).
46 “Treasury Sanctions Four Entities and Two Individuals in Connection with the Crisis in Ethiopia/” (Nov. 12, 2021), available here (last visited February 10, 2022).
48 GENERAL LICENSE NO. 4, “Authorizing the Wind Down of Transactions Involving Hidri Trust or Red Sea Trading Corporation,” available here (last visited February 10, 2022).
49 National Security Memorandum/NSM–4 of February 4, 2021, “Advancing the Human Rights of Lesbian, Gay, Bisexual, Transgender, Queer, and Intersex Persons Around the World,” available here (last visited February 10, 2022).
50 Executive Order 14022 of April 1, 2021, “Termination of Emergency With Respect to the International Criminal Court,” available here (last visited February 10, 2022).
51 “Removal of the International Criminal Court-Related Sanctions Regulation,” (Jul. 6, 2021), available here (last visited February 10, 2022).
52 Antony Blinken, Nord Stream 2 and European Energy Security, U.S. Dept. of State (May 19, 2021), here.
53 Jonathan Swan, Scoop: Biden to Waive Sanctions on Company in Charge of Nord Stream 2, Axios (May 18, 2021), here.
55 Daniel Flatley, Blinken Says Nord Stream 2’s Completion Is a ‘Fait Accompli’, Bloomberg (Jun. 7, 2021, 12:13 PM), here.
58 Scott Horsley & Miles Parks, Trump’s Refusal To Back U.S. Intel Over Russia At Putin Summit Sparks Bipartisan Ire, NPR (Jul. 16, 2018, 5:00 AM), here.
59 Andrea Shalal, Analysis: Hacks Force Biden into More Aggressive Stance on Russia, Reuters (Jun. 2, 2021, 3:38 PM), here.
60 Executive Order 14024 of April 15, 2021, “Blocking Property With Respect to Specified Harmful Foreign Activities of the Government of the Russian Federation,” available here (Feb. 10, 2022).
61 “Treasury Sanctions Russia with Sweeping New Sanctions Authority,” (Apr. 15, 2021), available here (last visited February 10, 2022).
62 Treasury Escalates Sanctions Against the Russian Government’s Attempts to Influence U.S. Elections (Apr. 15, 2021), available here (last visited February 10, 2022).
63 Donald Judd et al., Biden Says Sanctions Against Russia are Proportionate Response: ‘Now is the Time to De-Escalate’, CNN (Apr. 15, 2021, 9:17 PM), here.
64 Zachary Basu, Biden Campaign Says China’s Treatment of Uighur Muslims is "Genocide," Axios (Aug. 25, 2020), here.
66 “Treasury Sanctions Chinese Government Officials in Connection with Serious Human Rights Abuse in Xinjiang,” (Mar. 22, 2021), available here (last visited February 10, 2022).
67 “Treasury Sanctions Chinese Entity and Officials Pursuant to Global Magnitsky Human Rights Accountability Act,” (Jul. 9, 2020), available here (last visited February 10, 2022); “Treasury Sanctions Chinese Entity and Officials Pursuant to Global Magnitsky Human Rights Executive Order,” (Jul. 31, 2020), available here (last visited February 10, 2022).
68 Executive Order 14032 of June 3, 2021, “Addressing the Threat From Securities Investments That Finance Certain Companies of the People’s Republic of China,” available here (Feb. 10, 2022).
69 Executive Order 13959 of November 12, 2020, “Addressing the Threat From Securities Investments That Finance Communist Chinese Military Companies,” available here (last visited February 10, 2022).
70 “Publication of Frequently Asked Question related to Xiaomi Corporation and removal of existing FAQ,” (May 27, 2021) available here (last visited Feb. 10, 2022).
71 Steven Erlanger, Biden Wants to Rejoin Iran Nuclear Deal, but It Won’t Be Easy, N.Y. Times (Nov. 17, 2020), here.
72 Executive Order 12957 of March 15, 1995, “Prohibiting Certain Transactions With Respect to the Development of Iranian Petroleum Resources,” available here (last visited February 10, 2022).
73 Patrick Wintour, US Must Guarantee It Will Not Leave Nuclear Deal Again, Says Iran, THE Guardian (Jun. 30, 2021, 3:06 PM), here.
75 Colum Lynch, A Last-Ditch Effort to Save the Iran Deal, Foreign Policy (Dec. 28, 2021), here.
76 GENERAL LICENSE N, “Authorizing Certain Activities to Respond to the Coronavirus Disease 2019 (COVID-19) Pandemic,” available here (last visited February 10, 2022).
77 GENERAL LICENSE NO. 8A, “Authorizing Certain Humanitarian Trade Transactions Involving the Central Bank of Iran or the National Iranian Oil Company,” available here (last visited February 10, 2022).
78 “United States and Switzerland Finalize the Swiss Humanitarian Trade Arrangement” (Feb. 27, 2020), available here (last visited February 10, 2022).
79 GENERAL LICENSE NO. 14, “Authorizing Humanitarian Activities in Afghanistan,” available here (last visited February 10, 2022).
80 GENERAL LICENSE NO. 15, “Transactions Related to the Exportation or Reexportation of Agricultural Commodities, Medicine, Medical Devices, Replacement Parts and Components, or Software Updates in Afghanistan,” available here (last visited February 10, 2022).
81 “Treasury Designates Key Financial Facilitator for the Islamic State’s Afghanistan Branch” (Nov. 22, 2021), available here (last visited February 10, 2022).
82 Carmen Sesin, Biden Slams Trump on "Abject Failure" on Venezuela, as Well as Cuba Policies, NBC News (Sept. 6, 2020, 2:23 PM), here.
83 U.S. and UK Condemn Detention of Venezuelan Opposition Politician, Reuters (Jul. 13, 2021, 6:40 PM), here.
85 GENERAL LICENSE NO. 8I, “Authorizing Transactions Involving Petróleos de Venezuela, S.A. (PdVSA) Necessary for the Limited Maintenance of Essential Operations in Venezuela or the Wind Down of Operations in Venezuela for Certain Entities,” available here (last visited February 10, 2022).
86 GENERAL LICENSE NO. 5I, “Authorizing Certain Transactions Related to the Involving Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After January 20, 2023,” available here (last visited February 10, 2022).
87 GENERAL LICENSE NO. 39, “Authorizing Certain Activities to Respond to the Coronavirus Disease 2019 (COVID-19) Pandemic,” available here (last visited February 10, 2022).
88 GENERAL LICENSE NO. 40, “Authorizing Certain Transactions Involving the Exportation or Reexportation of Liquefied Petroleum Gas to Venezuela,” available here (last visited February 10, 2022).
89 “Notice on the Continuation of the National Emergency with Respect to the Actions of the Government of Syria,” (May 6, 2021) available here (last visited Feb. 10, 2022).
90 GENERAL LICENSE NO. 21, “Authorizing Certain Activities to Respond to the Coronavirus Disease 2019 (COVID-19) Pandemic,” available here (last visited February 10, 2022).