Authorizing the Implementation of Certain Sanctions Set Forth in the Countering America's Adversaries Through Sanctions Act
Signed: September 20, 2018
Published: September 21, 2018
Document Number: 2018-20816
đSummary
This executive order sets up the U.S. governmentâs process for carrying out certain sanctions authorized by the Countering Americaâs Adversaries Through Sanctions Act (CAATSA), tied to existing national emergencies related to Russia/Ukraine and malicious cyber activity. It affects people and entities the President, the Secretary of State, or the Secretary of the Treasury determine should be sanctioned under specific CAATSA provisions, as well as U.S. banks, U.S. businesses, and federal agencies that must enforce the restrictions. It directs the Treasury Department (with State) to implement financial sanctions such as limiting large loans and credit, restricting foreign-exchange and bank-payment transactions, blocking property in U.S. jurisdiction, and restricting U.S. investment in the sanctioned person, with possible extension to top executives. It also directs other agencies to apply related measures, including denying Export-Import Bank support, restricting export licenses, opposing international financial institution loans that would benefit the sanctioned person, barring U.S. government procurement from them, and denying entry to certain associated foreign individuals.
đźBusiness Impact
This executive order operationalizes CAATSA sanctions by enabling the U.S. to cut designated persons/entities off from U.S. finance (loans/credits, FX, payments), block their property, restrict U.S. investment in their equity/debt, deny export-related permissions, bar U.S. government procurement, and even impose visa bans on senior executivesâso businesses most affected are banks/payment processors, exporters/reexporters (especially dualâuse/tech), government contractors, and any company with Russia/Ukraine-related counterparties or supply chains. Compliance impact is immediate: firms must strengthen sanctions screening and due diligence not only on direct customers but also beneficial owners and âinterestâ in transactions, ensure they are not providing funds/goods/services to blocked parties, and be prepared for contracts to become unenforceable ânotwithstandingâ pre-existing agreements. Opportunities include capturing displaced demand by replacing sanctioned suppliers/customers and offering compliance, trade-finance, and supply-chain reconfiguration services to affected clients. Immediate actions: run a rapid counterparty and beneficial-ownership rescreen against OFAC/State designations, review contracts for sanctions termination/force majeure clauses, pause any payments/shipments where a sanctioned party may have an interest, and
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