United States: Trade Sanctions Roundup: U.S. Closes Out 2014 With Major Actions On Cuba, Russia, And Syria

Last Updated: January 2 2015
Article by Matthew J. Thomas, Dana S. Merkel and Stefanos N. Roulakis

Action Item: Recent significant changes in sanctions relating to Cuba, Russia, and Syria create opportunities and risks for a variety of sectors, most notably in the maritime and energy industries. Businesses should carefully evaluate the new measures, take steps to reduce enforcement risks and commercial disruption, and look ahead to capitalize on market-opening opportunities.

The end of 2014 has seen major developments in U.S. foreign relations and sanctions policy with broad implications for the maritime industry. On December 17, President Obama announced a paradigm shift in relations with Cuba, including first steps in loosening the sanctions regime against the island nation. In other significant moves, the President announced that he will sign into law legislation creating new sanctions against Russia. The Treasury Department's Office of Foreign Asset Control ("OFAC") has also authorized new sanctions provisions against targets accused of aiding the government of Syria's Bashar Al-Assad.


The White House announced yesterday that it is changing its stance regarding U.S. relations with Cuba. Noting that the United States' 50-year strategy of isolation thus far has failed to promote a stable, democratic Cuba, the White House outlined its updated approach to promote change and support the Cuban people. Most importantly, diplomatic relations will be re-established and a U.S. embassy will be restored in Havana. The United States will work with Cuba on issues such as migration, counternarcotics, environmental protection, and human trafficking, while continuing to support democratic reform and improved human rights in Cuba. 

The White House outlined a limited variety of ways in which restrictions on the free flow of people, money, merchandise, and information will be lifted. General licenses for 12 categories of travel to Cuba will be authorized. However, travel for tourism will remain prohibited. Licensed travelers to Cuba will be able to return with up to $400 in Cuban goods, a quarter of which may be tobacco and alcohol products. 

In an effort to support the Cuban people, certain items will be authorized for export, such as building materials for private residential construction, goods for use by private sector Cuban entrepreneurs, agricultural equipment, and consumer communications products.  Telecommunications providers will be permitted to set up the infrastructure required to improve Internet services in Cuba and communications with the United States. U.S. individuals that send money to Cuban nationals will now be able to send up to $2,000 per quarter. Also, donative remittances will no longer require a license. 

To facilitate newly authorized transactions, U.S. institutions will be allowed to work with Cuban financial institutions. U.S. credit and debit cards will be permitted for use in Cuba. General licenses will unblock U.S. bank accounts held by Cuban nationals that have relocated outside of Cuba. U.S. persons will also be permitted to engage in meetings and conferences outside Cuba that are related to Cuba. Current restrictions on the financing of agricultural commodities and other authorized Cuban trade, requiring payment prior to shipment, will be reformed to allow payment against bills of lading.

In an important move for dry bulk operators, the White House announced that foreign vessels will be permitted to enter the United States after engaging in certain humanitarian trade with Cuba.

The Department of the Treasury issued an announcement stressing that none of the changes in sanctions policy are immediately effective. Rather, the changes will be put in place in the coming weeks by the Treasury and Department of Commerce, which administers the Cuba export licensing regime.

Although considerable changes are being made, it is important to note that the majority of sanctions are still in place. While the White House has some authority to waive or license certain transactions and exports, the bulk of the sanctions are enshrined in statute, requiring congressional action to repeal or modify. A number of lawmakers have criticized the policy changes, so the further lifting of restrictions may be slow to fruition. 


President Obama announced this week that he will sign new legislation that includes significant new extraterritorial sanctions against Russia's energy and offshore exploration and production sector. Similar in design to the Iran Sanctions Act, the new law authorizes retaliatory U.S. measures against non-U.S. persons making a significant investment in projects to extract crude oil from shale formations in the Russian Federation, the Russian Arctic offshore locations, or in waters more than 500-feet deep in the exclusive economic zone of the Russian Federation. The bill gives the President flexibility in determining which and how many sanctions to impose.  Further, the bill includes a national security waiver that would allow the President to forgo the imposition of additional sanctions if he determines that the waiver is in the national security interest of the United States. The new sanctions also target Rosoboronexport, a state-owned arms dealer, and other dealers of defense articles. 

The new Russia sanctions confirm that the aggressive extraterritorial approach taken in recent years with regard to Iran sanctions—using so-called "secondary sanctions" to reach parties outside direct U.S. jurisdiction—represents the new template for U.S. sanctions policy generally, and this new approach will be applied to Russia and other targets in the future. Accordingly, non-U.S. persons (who in previous years were left relatively unaffected by U.S. sanctions policy) are increasingly placed at risk by the United States' new, more global vision of sanctions enforcement.

The White House clarified this week that while the President is expected to sign the Russia sanctions bill, he will not yet use the legislation to impose new penalties on Moscow, reiterating that the United States is prepared to roll back existing U.S. sanctions if Russia takes steps to ease tensions over its aggression against Ukraine.


OFAC designated 11 individuals and entities for violating and evading Syria sanctions. There were several particular actions that led to the sanctions. OFAC alleges, based on mislabeling of the cargo and its destination, that the sanctioned entities shipped aviation fuel and gasoil to the Syrian government by first transshipping the cargo through third-party countries, such as Poland and Turkey. OFAC also alleges that sanctioned entities sought to transfer base oil to government-owned refineries, as evidenced by the fact that the cargo did not include a destination for the oil. Another entity was sanctioned in part because it was the charterer of a vessel that delivered the cargo to Syria and allegedly delivered the cargo to the government of Syria.

The entities and individuals are nationals of Syria, Switzerland, the Netherlands, and the United Arab Emirates. OFAC's goal in expanding the sanctions list was to target individuals and entities that provide energy supplies to the U.S. government. The sanctions also have the effect of putting maritime and energy companies on notice that trading energy with Syria comes with significant risk.

OFAC's action provides another reminder that conduct that is commonplace in much of the maritime industry, such as en route destination changes and incomplete or erroneous cargo documentation, may be used as support for finding that sanctions are being evaded. 

Conclusions and Recommendations

The most significant changes to Cuban sanctions in decades creates opportunities for a variety of sectors, but especially the maritime industry. The expansion of Russian sanctions targeting the energy and offshore sectors increases the risk of doing business in Russia, even for companies and investors with no direct U.S. ties. The Syrian sanctions, in addition to the obvious risks of business with the Syrian government, also underscore the important compliance mechanisms to ensure that vessels operating in the Eastern Mediterranean are not improperly ensnared in OFAC sanctions. The costs associated with developing procedures for sanctions have a large return on investment when compared to the costs of penalties for violations and their aftermath.

U.S. relations with each of these countries, Cuba, Russia, and Syria, remain unsettled and will continue to evolve in 2015. Meanwhile, the U.S., along with the UK, Russia, China, France, and Germany, now have until July 2015 to reach a comprehensive accord with Iran, as the U.S. Congress raises the specter of additional Iran sanctions should talks falter. Accordingly, we expect that 2015 will be another active, dynamic year for U.S. sanctions policymaking and enforcement.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Dana S. Merkel
Stefanos N. Roulakis
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.