HOW DO US SANCTIONS AFFECT VIETNAM? … And are there treatments for a corporation and an individual sanctioned?



THE TREASURE OF THE UNITED STATES SANCTIONS VIETNAMES FOR ACTIVITIES INVOLVING IRAN AND NORTH KOREA

On December 8 and 16, 2020, the USA imposed sanctions on three Vietnamese folks: two are entities and one is a person. It’s (i) a Vietnamese fuel firm that gives oil, chemical compounds, liquefied petroleum fuel (LPG) and bulk cargo transportation companies nationally and internationally all through the Asia, the Center East, India and Northeast Asia (“Fuel firm”); (ii) a Vietnamese one that workouts the capabilities of chief govt officer of the fuel firm (“Officer”); and (iii) a Vietnamese transport firm (“Transport firm”).

The fuel firm and its supervisor

The Workplace of Overseas Property Management of the US Division of the Treasury (“OFACImposed sanctions on the fuel firm beneath Decree 13846 following main transactions involving the transport of petroleum merchandise from Iran, efficient November 5, 2018.[1] The officer is without doubt one of the important executives of the fuel firm and has been personally imposed on him, all stemming from transactions involving Iran. The fuel firm and its supervisor seem on the OFAC listing of specifically designated nationals and blocked individuals (“SDN“and”SDN Record”) .3

To implement the sanctions imposed on the fuel firm and the agent, the US authorities have blocked all property and curiosity in property that’s in the USA, that then involves the USA, or that’s or which subsequently come into the possession or management of any US particular person of the particular person sanctioned. This property and curiosity within the property will not be transferred, paid for, exported, withdrawn or in any other case assigned. Because of this, American persons are typically prohibited from participating in any transaction involving the fuel firm and the manager.

The transport firm

The USA / OFAC imposed these sanctions on the transport firm in accordance with Decree 13810 attributable to its actions within the transport sector in North Korea, specifically its transport of coal from North Korea.[2]. OFAC has additionally recognized a vessel during which the transport firm has an curiosity as blocked. The transport firm is due to this fact additionally registered on the SDN listing. Because of this, possession of and curiosity within the possession of the transport firm is blocked in the identical method as described above, and U.S. individuals are typically prohibited from participating in any transaction during which the transport firm has. an curiosity.

American “secondary sanctions”

The sanctions imposed on Vietnamese folks described in additional element under have been imposed as “secondary sanctions”. Secondary sanctions, established both by statute or govt order, authorize OFAC or the State Division to impose sanctions on non-U.S. Individuals for particular actions, together with sure affairs with Iran and North Korea. . These sanctions are meant to discourage non-U.S. Folks from participating in sure transactions that the U.S. authorities believes are opposite to its international coverage pursuits, even when the transactions are unrelated to the U.S. and would in any other case be exterior of US jurisdiction. Beneath secondary sanctions, a non-U.S. Firm could also be restricted from the U.S. markets or the U.S. monetary system if it engages in sure habits associated to Iran, North Korea, the Syrian authorities, and sure Russian individuals and entities. designated. Beneath sure circumstances, as is the case right here, a non-U.S. Firm or particular person could also be added to OFAC’s SDN listing. Sometimes, if somebody is on the SDN listing, it signifies that their property in the USA have been blocked and that folks in the USA are typically prohibited from doing enterprise with them.

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IS IT IMPORTANT TO A PERSON OR ENTITY IF THEY IS ON THE SDN LIST?

U.S. sanctions prohibit and prohibit entry to the U.S. market by designated individuals (within the context of this text, SDNs are designated individuals) and customarily prohibit U.S. individuals, together with U.S. monetary establishments, from participating in any exercise with SDN. Because of prohibitions imposed on US nationals, SDNs will not be capable of transact in US {dollars} cleared by a US correspondent financial institution or interact in any enterprise exercise with a US particular person or in the USA. These penalties typically lead to a major hostile affect on the exercise of such an SDN.

Whereas being on the SDN listing, after all, interferes with some particular transactions involving U.S. folks, it may possibly additionally intervene with the day-to-day operations of a enterprise involving non-U.S. Firms. Many non-U.S. Firms, together with many non-U.S. Banks, preserve insurance policies prohibiting doing enterprise with an SDN, even when a contemplated transaction shouldn’t be particularly prohibited by OFAC. They do that with a purpose to keep away from unacceptable ranges of repute and compliance threat. Fairly merely, being on the SDN listing raises considerations on the a part of present and potential counterparties.

CAN AN ENTITY OR INDIVIDUAL BE DELETED FROM THE LIST OF SANCTIONS?

OFAC has a process for an SDN to be deleted and unblocked. This follows a really particular and controlled course of. Generally:

  • OFAC’s bylaws present a petition course of for League of Nations who really feel they’re not required to be on the listing. OFAC’s rules present that an individual might submit, in writing, arguments or proof establishing that there isn’t a foundation for registration or that the circumstances which led to the registration don’t apply. ‘apply extra.
  • There’s a course of for a chosen / blocked particular person to use to OFAC to be deregistered, and this course of is described in OFAC’s rules. These procedures are described within the rules as follows:
    • Submission must be in writing and addressed to the Director, Workplace of Overseas Property Management, US Division of the Treasury, 1500 Pennsylvania Avenue, NW. – Annex, Washington, DC 20220.
    • The knowledge submitted by the blocked particular person wishing to unblock will likely be rigorously examined by OFAC. The method is sort of particular. As well as, OFAC might request clarifications, corroborations or different further info.
    • A blocked particular person looking for to unblock can request a gathering with OFAC; nonetheless, such conferences will not be essential and the board might, at its discretion, decline to fulfill previous to finishing a evaluation.
    • As soon as OFAC has reviewed the request for reconsideration, it should challenge a written resolution.
  • The rules present {that a} stranded particular person might suggest corrective measures, akin to reorganizing the corporate, resigning officers from a stranded entity or related steps, which they consider would take away or nullify the premise for the designation of OFAC.
  • The SDNs can ask the OFAC to withdraw from the listing and declare that they not interact in any punishable exercise. The League of Nations ought to cooperate with the State Division to finish all sanctionable exercise in a suitable method.

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The USA authorities pays consideration to punishable habits. Such conduct will increase the danger of US sanctions. Nevertheless, there are methods to problem or take away the sanctions which have been imposed if a celebration considers that the designation is unfounded or if the celebration considers that the factors for imposing the sanctions not apply. Vietnamese firms and banks ought to pay attention to US sanctions when doing enterprise with Iran, North Korea, Russia and Syria, and every other nation for which secondary sanctions have been imposed. Vietnamese firms and banks ought to mitigate threat earlier than participating in actions that might be sanctioned. Nevertheless, if a enterprise or celebration is topic to sanctions, there are methods the enterprise or celebration can work with the USA authorities to have the sanctions lifted.



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