United States: New US Sanctions Authorization Targets Election Interference

On September 12, 2018, President Trump issued an executive order that authorizes sanctions against any foreign individual, entity or government determined to have interfered in US federal elections. In a statement, President Trump said that this action was taken to "protect the integrity of the United States electoral system," and to "swiftly identify and punish any foreign interference" in US elections.1

The US had previously announced sanctions against Russia for alleged cyber interference in the 2016 presidential election, but this new measure targets any foreign individual, entity or government for efforts to obstruct or manipulate the US electoral process. According to National Security Advisor John Bolton, this new executive order is "not country specific" as "threats to the integrity of the election process come from a number of sources."2

The new executive order does not automatically impose sanctions or mandate that the president or the US Department of Treasury sanction any person or government. However, the executive order provides authority to do so. It also establishes a regulatory basis for the US to sanction companies that are licensed or domiciled in a country whose government has engaged in election interference—though, again, the executive order itself does not actually impose such sanctions.

Blocking sanctions against foreign actors 

Effective September 12, 2018, the new executive order authorizes the Secretary of Treasury, in consultation with the Secretary of State, Attorney General and Secretary of Homeland Security, to impose blocking sanctions against any person determined:

  1. "to have directly or indirectly engaged in, sponsored, concealed, or otherwise been complicit in foreign interference in a US election";
  2. "to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any activity described above or any person whose property and interests in property are blocked pursuant to" the new executive order; or
  3. "to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property or interests in property are blocked pursuant to" the new executive order.

The term "foreign interference" includes "any covert, fraudulent, deceptive, or unlawful actions or attempted actions of a foreign government, or of any person acting as an agent of or on behalf of a foreign government, undertaken with the purpose or effect of influencing, undermining confidence in, or altering the result or reported result of, the election, or undermining public confidence in election processes or institutions." Sanctionable election interference activities include not only direct actions, such as hacking election systems or campaign infrastructure, but, as explained by National Security Advisor John Bolton, also include the "distribution of propaganda and disinformation."3

Blocking sanctions freeze (block) all property and interests in property of the sanctioned person within US possession or control. The Treasury Department's Office of Foreign Assets Control (OFAC) maintains a list of blocked persons, who it refers to as "Specially Designated Nationals" (SDNs). US Persons4 generally may not engage in any transaction with blocked persons/SDNs, unless licensed by OFAC. These restrictions also reach—automatically, by operation of law—any entity owned 50 percent or more by a designated person, even if the owned entity is not named expressly on the SDN list.

Framework to investigate potential election interference and impose additional sanctions

The executive order directs US agencies to take action to assess and evaluate information concerning foreign governments or persons acting on their behalf potentially having interfered in US elections. It also provides authorizations under which penalties can be imposed based on the outcome of that assessment and evaluation.

Not later than 45 days after the conclusion of a federal US election, the order directs the Director of National Intelligence to conduct an assessment of any information indicating foreign interference in the election. The Department of Justice and the Department of Homeland Security will then have 45 days to evaluate the validity and impact of the intelligence gathered and report the results of that evaluation to the president, Department of State, Department of Treasury and the Department of Defense.

In addition, the order directs the Director of National Intelligence, the Department of Justice, the Department of Homeland Security, the Department of Treasury, and the Department of State to "develop a framework for the process that will be used" to carry out their respective responsibilities by October 12, 2018 (i.e., 30 days from the issuance of the order). The framework may be classified in whole or in part.

Following the assessments and report described above, the Department of Treasury, in consultation with the Department of State, Department of Justice and the Department of Homeland Security, "shall . . . impose all appropriate" sanctions authorized under the executive order. Depending upon the severity of the interference, the Department of Treasury and the Department of State, in consultation with other agencies, shall also jointly recommend to the president whether additional sanctions should be imposed "including against the largest business entities that are licensed or domiciled" in countries whose governments participated in election interference. The executive order specifies that the types of business entities that may be recommended for sanctions are those that operate in the financial services, defense, energy, technology, transportation or other sectors of "comparable strategic significance" to the foreign country.

The additional sanctions against business entities could include any of the following measures. As noted below, this includes blocking—but also a range of non-blocking restrictions that are substantially similar to the types of "menu-based" penalties found in other US sanctions programs:

  1. Blocking and prohibiting all transactions in a person's property and interests in property that are subject to US jurisdiction
  2. Mandatory prior review and approval for export and re-exports of items subject to US export regulations
  3. "Prohibitions on US financial institutions making loans or providing credit to a person"
  4. "Restrictions on transactions in foreign exchange in which a person has any interest"
  5. "Prohibitions on transfers of credit or payments between financial institutions, or by, through, or to any financial institution, for the benefit of a person"
  6. "Prohibitions on US Persons investing in or purchasing equity or debt of a person"
  7. Exclusion of an entity's non-US citizen or permanent resident corporate officers from the United States
  8. Imposition of any of the above-listed sanctions on an entity's non-US citizen or permanent resident principal executive officers

This structure would allow the US to penalize companies licensed or domiciled in countries whose governments participated in election interference, even when these companies have not engaged in any sanctionable activity themselves. However, the executive order does not, itself, actually impose these or any other sanctions.

Looking ahead

How this new sanctions authority will be used - or even how it will be implemented - remains to be seen. National Security Advisor Bolton and Director of National Intelligence Dan Coats signaled in the press briefing accompanying the new executive order that the administration is serious about investigating and punishing foreign election interference with the 2018 midterm elections on the horizon.5 Although the US has not yet announced any designations under this new executive order, non-US companies should monitor the implementation of these new authorities, especially given the potential for significant reach into the private sector.


1. Statement from the President, THE WHITE HOUSE (Sept. 12, 2018), https://www.whitehouse.gov/briefings-statements/statement-from-the-president-3/

2. John Bolton and Dan Coats on US Election Security, C-SPAN (Sept. 13, 2018), https://www.c-span.org/video/?451421-1/john-bolton-dan-coats-us-election-security

3. Id.

4. US Persons means US citizens, permanent residents, entities organized in the US (including foreign branches) and any person in the US.

5. John Bolton and Dan Coats on US Election Security, C-SPAN (Sept. 13, 2018), https://www.c-span.org/video/?451421-1/john-bolton-dan-coats-us-election-security

About Dentons

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

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.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions