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2022 Economic Sanctions Year in Review and Outlook for 2023 | Akin Gump Strauss Hauer & Feld LLP

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Introduction

In 2022, the United States, European Union (EU) and United Kingdom, along with a significant number of other partners and allies, imposed an unprecedented number of economic, financial and trade sanctions on Russia and Belarus in connection with Russia’s invasion of Ukraine. While those developments were a key focus in 2022, both the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the United States Department of State also generally kept pace with non-Russia related regulatory developments and enforcement actions during 2022. Below is a summary of the most significant U.S. sanctions actions and key takeaways from 2022. We have also prepared similar summaries of significant developments in U.S. export controls, as well as U.S. and foreign investment, that occurred in 2022.

In the United States, sanctions developments in 2022 reflected:

  • A demonstrated commitment by the Biden-Harris administration in coordinating with U.S. allies on the imposition of sanctions to pursue shared foreign policy goals and enforcement priorities.
  • U.S. inter-agency and multilateral collaboration on implementation and enforcement of sanctions prohibitions.
  • A renewed focus on virtual currency in an attempt to curb sanctions violations and illicit cross-border transactions, as well as evasion of U.S. sanctions, by providing additional guidance related to the regulation of virtual currencies and issuing several public enforcement actions against companies in the industry.
  • OFAC action towards modernizing sanctions in response to the agency’s 2021 Treasury Sanctions Review, including by increasing multilateral coordination and by expanding authorizations and carve outs for humanitarian activities.
  • A continued use of sanctions as a tool to address human rights violations and egregious public sector corruption.

The EU and U.K. have historically used sanctions more cautiously. However, Russia’s invasion of Ukraine was a catalyst for the adoption of extensive sanctions restrictions against Russia which, whilst generally aligned with those implemented by partner countries, are in a number of ways broader in scope.

EU and U.K. sanctions developments in 2022 included:

  • Utilizing sanctions as a policy tool as a first resort in major crisis, with both the EU and U.K. willing to absorb the economic consequences of their decisions.
  • Enabling EU member states and the U.K. to assume a more forward leaning position to address multilateral policy concerns, including calling out human rights violations, addressing corruption and recourse to nations requiring support.
  • Reinforcing the U.K.’s ability to introduce sanctions autonomously, acting on its post-Brexit independence from the EU to expedite decision making and action to expedite alignment with and assert more leadership in coordination with U.K. allies.
  • Widening sanctions designation criteria to include the facilitation of the circumvention of EU/U.K. sanctions, moving in the direction of the U.S. secondary sanctions approach to sanctions policy and enforcement.

The substantial sanctions developments of 2022 foreshadow a continuing multijurisdictional reliance upon sanctions as a preferred instrument of foreign policy and a tool to address a range of threats to national security and foreign policy concerns in the U.S., the EU and the U.K. Looking ahead, we expect further new sanctions measures will be adopted by policy-makers in these jurisdictions that will supplement those adopted in 2022. Specifically, we anticipate sanctions will continue to evolve through interagency processes in a more coordinated multilateral context particularly with respect to Russia, but also with respect to other countries and in other areas of common foreign and national policy concern where the U.S., EU and U.K. have aligned interests.

Russia and Belarus

U.S. Developments. Last year, the United States imposed unprecedented sanctions on Russia following its invasion of Ukraine in February 2022. The prohibitions imposed under the Russia sanctions program, while short of a comprehensive embargo on Russia, were very broad and went well beyond the more targeted sanctions that had been imposed on Russia after its purported annexation of the Crimean Peninsula in 2014. For example:

In addition, OFAC and the U.S. Department of State designated approximately 1,716 individuals and entities, often in coordination with the United Kingdom and European Union, imposing full blocking sanctions on key individuals and many of Russia’s largest and most economically significant entities, including:

Another key sanctions measure deployed by OFAC, the Department of State and the Department of Justice included targeting not only prominent Russian business persons and Kremlin-linked “elites,” but also their most valuable possessions, including yachts and private aircraft. The United States worked with governments across the world to identify and seize these assets in an attempt to further impose costs on Russia’s wealthiest persons. OFAC identified yachts linked to Putin and several aircrafts. The United States government also worked with other jurisdictions, like Spain and Fiji, to effectuate seizures of assets. To better identify assets for seizure, the Department of Justice launched Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing sanctions, and the United States led the creation of the Russian Elites, Proxies and Oligarchs Task Force (REPO), an international coalition dedicated to prioritizing resources and working together to find, restrain, freeze, seize, confiscate or forfeit the assets of individuals sanctioned in connection with Russia’s invasion of Ukraine.

The breadth of these prohibitions has been somewhat tempered by the issuance of dozens of general licenses (GLs), including licenses authorizing certain transactions related to energy that involve certain blocked persons; administrative transactions involving Russia’s Central Bank, National Wealth Fund and Ministry of Finance; transactions relating to telecommunications and certain Internet-based communications; activities of international organizations and nongovernmental organizations; the export or reexport of agricultural commodities, medicine and medical devices; and civil aviation safety.

EU and U.K. Developments. In 2022, the EU and U.K. sanctioned 1,386 and 1,463 individuals as well as 171 and 162 entities respectively, and implemented a broad range of restrictions on trade in oil and gas, goods and services as well as restrictions in investment, transport, and financial services.

There are notable differences between the respective sanctions regimes, both in terms of the type and scope of sanctions restrictions as well as the individuals that have been designated. Many oligarchs, for example, which have already been targeted by EU/U.K. sanctions are yet to be designated by the U.S.

Moreover, whereas U.S. sanctions focus on the concept of ownership to determine whether a particular non-listed entity should be considered a sanctioned party, EU/U.K. sanctions adopt a broader interpretation focusing on both ownership as well as control. This divergence can lead to complications for multinational companies where such companies may be permitted to engage in dealings with a particular entity under U.S. sanctions but not under EU/U.K. sanctions due to the same entity being minority owned but nonetheless controlled by a sanctioned party.

Another area of divergence between EU, U.K. and U.S. sanctions is that of aggregation. Whereas EU and U.S. sanctions require shareholdings of sanctioned parties to be aggregated when determining whether an entity is owned by a sanctioned party, such aggregation would only be required under U.K. sanctions if there is a “joint arrangement” in place between shareholders on the basis of which they commit to exercising (substantially) all the rights conferred by their respective shares or rights jointly in a way that is pre-determined by the arrangement.

Russian Countermeasures. In response to the extraordinary imposition of sanctions by the U.S., EU and U.K.—and other countries, including, but not limited to, Switzerland, Australia and Canada—Russia implemented substantial countermeasures, which in some cases restrict companies operating in Russia from complying with third-country sanctions regimes. Companies operating in Russia must now navigate a uniquely difficult, and rapidly evolving, regulatory landscape.

Prospects for the Year Ahead. In 2023, we expect the pace of new Russia-related sanctions to continue at the pace we have seen over the last six months, though subject to the military situation in Ukraine, and potentially the first significant OFAC enforcement actions under the Russia sanctions program. We expect to see further designations of individuals and entities operating in Russia or otherwise supporting Russia’s invasion of Ukraine or military industrial complex, as well as designations of individuals and entities operating in the sectors identified in the determinations pursuant to EO 14024 (e.g., the accounting and quantum computing sectors of the Russian economy). We may also see the addition of new categories of prohibited services to individuals in or ordinarily resident in Russia.

Similar enforcement and sanctions developments are also expected in the EU and U.K. And while enforcement in the EU currently differs between the member states, at the end of 2022 the European Commission put forward a proposal aimed at harmonizing criminal offences and penalties for breaches of EU sanctions. If adopted, this proposal will make it easier for regulators to investigate, prosecute and punish violations of EU sanctions in all member states alike.

It remains unlikely sanctions on Russia will evolve into a comprehensive embargo akin to U.S. sanctions on Iran or North Korea, absent a major escalation. In February, the ban on the provision of services related to the maritime transportation of oil under the Price Cap Policy took effect with respect to petroleum products. Future sanctions by the U.S., EU and U.K. may depend in part on how the global energy market responds to the Price Cap Policy once fully implemented.

Finally, we may see increased congressional action or oversight, as Russia-related provisions were introduced in the National Defense Authorization Act. It remains to be seen, however, whether congressional pushback on military funding to Ukraine will encourage the implementation of tougher sanctions on Russia, in connection with a potential shift away from the provision of aid to Ukraine.

Iran

U.S. sanctions on Iran continued to expand modestly in 2022 as the United States imposed sanctions on numerous individuals and entities despite ongoing negotiations for the United States’ potential re-entry into the Joint Comprehensive Plan of Action (JCPOA). Talks reportedly stalled in April 2022 over the foreign terrorist organization designation of the Iranian Revolutionary Guard Corps, but the European Union circulated a draft of the restored JCPOA in August to which the United States and Iran responded in September 2022. Talks have reportedly stalled once again amid Iran’s crackdown on protests following the September 2022 death of Mahsa Amini in Iranian police custody.

Iran-related sanctions designations by OFAC, the Department of State, EU and U.K. this year typically fell into the following categories:

In apparent response to the protests, OFAC expanded and clarified GL D-1 (now D-2) which authorizes the provision of certain services, software and hardware incident to communications, to modernize this longstanding GL to better account for modern communications technology. OFAC also extended the expiration date of GL M-2 authorizing the exportation of certain graduate level educational services and software through September 1, 2023.

It is unclear whether there is any realistic prospect of regime change in Iran such that we may see sanctions on Iran lifted in the near term. In such a case, the U.S. response could be informed by the way in which they responded to similar situations, such as with Libya. More likely, we will see continued designations targeting human rights abusers, sanctions evaders and government or law enforcement officials.

China

Against a backdrop of increased legislative and regulatory focus on China and foreign policy and national security considerations, there were only limited new U.S. sanctions developments associated with China in 2022. Unlike in recent prior years, OFAC did not identify any new Chinese entities as non-SDN Chinese Military-Industrial Complex Companies (“Non-SDN CMIC”), and also did not take designation actions pursuant to its Hong-Kong-related sanctions authorities. OFAC did, however, designate two Chinese individuals, 10 related entities and 157 related Chinese fishing vessels under the Global Magnitsky Sanctions program pursuant to EO 13818 for engaging in human rights abuses, and designated one Chinese entity under the Russia Harmful Foreign Activities sanctions program for providing support to a designated Russian entity.

In a significant coordinated international effort, in 2022, the U.K. implemented asset freezes and travel bans against certain Chinese government officials as well as a Xinjiang security body under its Global Human Rights sanctions regime for alleged systemic violations against Uyghurs and other minorities. This measure came as part of the international condemnation and growing number of countries holding China to account for its human rights record (e.g., the EU which imposed similar measures in 2021 already).

Looking to the year ahead, in the U.S. the Biden-Harris administration has not, to date, adopted a China specific sanctions regime. China is, however, likely to be an area of significant continuing and possibly increasingly hostile focus for the U.S. Congress in the months ahead. Significantly, the House of Representatives recently voted, with strong bipartisan support, to establish a Select Committee on the strategic competition between the United States and Chinese Communist Party. While American politics remain highly polarized, mistrust and hostility towards China appears to be one of the very few areas of policy in which Republicans and Democrats in Congress can find common ground. The Biden-Harris administration is also currently contemplating an EO to regulate outbound U.S. investments in certain sectors of the Chinese economy, and has continued to utilize other trade controls, such as export controls, against Chinese entities and individuals. It is conceivable that the Biden-Harris administration could, in response to congressional or other stakeholder pressure, establish a new sanctions authority for the designation of Chinese companies or individuals that raise U.S. national security concerns. However, it is still unclear whether or if so when U.S. foreign policy and political considerations will evolve to a point where such action will actually occur.

Views and public policy concerns of officials in the EU and U.K. with respect to China appear to be evolving. However, it is still unclear and remains to be seen how far the EU and U.K. may be willing to go in terms of greater alignment with the U.S., including whether they might adopt similar sanctions or other restrictive trade measures against China given China’s importance to their economies.

Venezuela

U.S. sanctions with respect to Venezuela in 2022 were largely static, with the exception of a modest easing of sanctions on Venezuela’s oil sector specifically, where certain U.S. companies are impacted. OFAC issued Venezuela-related GL 41 on November 26, which provides authorization for Chevron Corporation to resume limited natural resource extraction operations in Venezuela, and provided accompanying guidance for U.S. and non-U.S. persons engaging in associated activities. OFAC also issued Venezuela-related GL 8K on November 26, which extends the authorization for U.S. companies to engage in certain limited maintenance operations in Venezuela or involving Venezuela’s national oil company, Petróleos de Venezuela, S.A. (PdVSA), until May 26, 2023.

Absent a significant new crisis that forces a refocus on related concerns, at the outset of 2023 it does not appear likely that U.S. sanctions on Venezuela are a significant priority focus of the Biden-Harris administration. However, the way in which talks between the Venezuelan government and political opposition in the country, Venezuela’s relationship and actions with respect to Russia or other U.S. sanctioned countries, and the possibility of some new humanitarian or political crisis in the country all remain potential flashpoints for reconsideration of new sanctions measures in the months ahead.

Cuba

The U.S. took limited actions somewhat easing sanctions on Cuba in 2022. The most significant included a reversal on the June 9, 2022 of restrictions imposed under the Trump-Pence administration. Specifically, OFAC:

  • Restored the GL for professional research and professional meetings in Cuba, which authorizes certain travel-related and other transactions incident to travel to Cuba to attend or organize professional meetings or conferences in Cuba (31 C.F.R. § 515.564).
  • Expanded authorized travel in support of the Cuban people by reinstating the authorization for group People-to-People educational travel and travel related to professional meetings and research, while also removing certain prohibitions on authorized academic educational activities (31 C.F.R. § 515.565).
  • Removed the $1,000 quarterly limit on family remittances and authorizing donative (i.e., non-family) remittances (31 C.F.R. § 515.570).

Enforcement activity with respect to Cuba, however, did not wane, with seven of the 16 enforcement actions in 2022 targeting persons for apparent violations of sanctions against Cuba, as described in more detail below.

Depending on developments within Cuba, including the Cuban government’s response to popular protests and demonstrations or political opposition in the country, the Biden-Harris administration could adopt additional measures to engage with and benefit the Cuban people in the months ahead. It also remains to be seen whether the Cuba Remittance Working Group, first established in the summer of 2021 in response to the Cuban government’s response to demonstrations, will take further actions affecting the ability of Cuban-Americans in the United States to provide financial support to their families in Cuba.

Virtual Currency

There was significant activity in the virtual currency space in 2022 as regulators and agencies across the United States government continued to emphasize to the virtual currency industry the need for the industry to better implement existing sanctions requirements. This increased scrutiny by the U.S. government reflects inter- and intra-agency coordination, including between OFAC and Treasury’s Financial Crimes Enforcement Network (FinCEN). In 2022, OFAC designated darknet market, Garantex, and two virtual currency exchanges and anonymizing blenders/mixers, Blender.io and Tornado Cash, the latter of which it listed in August 2022, then delisted and redesignated in November 2022. The designation of Tornado Cash prompted litigation in Texas and Florida challenging OFAC’s authority to designate an anonymous currency mixer. While it remains to be seen how the courts will rule in these pending cases, it is clear that OFAC is focused on tracking and disrupting the use of virtual currency and other digital assets as means to evade or otherwise violate U.S. sanctions.

We expect to see continued focus on the challenges virtual currency poses to the implementation and enforcement of sanctions generally and on pressuring the virtual currency industry to implement necessary compliance measures.

Nicaragua

OFAC took a notable action with regard to Nicaragua in June 2022 through the designation of a state-owned Nicaraguan mining company, Empresa Nicaraguense de Minas (ENIMINAS), as well as the president of ENIMINAS’ board of directors. At the time, ENIMINAS played a significant role in regulating Nicaragua’s gold mining industry.

OFAC continued its focus on the Nicaraguan gold sector through its designation of Nicaragua’s General Directorate of Mines (DGM) on October 24, 2022. OFAC noted that DGM “managed most mining operations in Nicaragua on behalf of the Nicaraguan government” after the designation of ENIMINAS and, thus, became an “important piece of state-controlled gold operations in Nicaragua.”

On October 24, 2022, President Biden also issued EO 14088, which authorized broad new sanctions authorities on Nicaragua. It authorized the imposition of sectoral sanctions on Nicaragua in two ways. First, it authorized the designation of any person operating in the gold sector of the Nicaraguan economy, and authorized the Secretary of the Treasury to expand this authority to additional sectors. Second, it authorized OFAC to prohibit new investment in any sector of the Nicaraguan economy as may be determined by the Secretary of the Treasury.

Additionally, this EO provides OFAC with authority to prohibit the importation into the United States of Nicaraguan-origin products, and the export, reexport, sale or supply from the United States, or by a U.S. person, of items to Nicaragua. The EO also provided a new authority to designate persons responsible for arresting or prosecuting members of the press or other persons responsible for disseminating information to the public.

Moving forward, we expect further U.S. sanctions actions to depend on how the political situation in Nicaragua develops.

U.S. Enforcement Actions

In 2022, 14 respondents paid a total of $42,664,006 to OFAC to settle potential civil liability for apparent violations of OFAC sanctions programs, up from a total of $20,896,739 in 2021, which represents a 104 percent increase in settlement amounts. OFAC also issued two Findings of Violation in 2022, up from one in 2021. These 2022 enforcement actions involved violations or apparent violations of the following OFAC sanctions programs: Cuba, Iran, Ukraine, Syria, Venezuela, North Korea, Non-Proliferation, Counter Narcotics, Sudan, and also included violations of the Reporting, Procedures and Penalty Regulations for failing to maintain full and accurate records related to blocked property. The following were the most notable developments in the enforcement space in 2022:

  • Debt & Equity Restrictions. OFAC’s settlement with S&P Global represents only the second time that OFAC has taken a public enforcement action for an apparent violation of a debt- or equity-related restriction. These restrictions were first utilized by OFAC in 2014 in response to Russia’s purported annexation of Crimea. These apparent violations stemmed from activities that occurred in 2016 and 2017.
  • Venezuela. OFAC’s settlement agreement with Banco Popular, a Puerto Rican bank, demonstrated the agency’s expansive understanding of the scope of the term “Government of Venezuela” for purposes of sanctions prohibitions in determining that the bank’s transactions involving low-level Government of Venezuela employees constituted apparent violations under EO 13884.
  • Virtual Currency. OFAC additionally settled with two virtual currency exchanges, Bittrex Inc. and Payward, Inc. (d/b/a Kraken), for apparent violations of Iran-related prohibitions. This settlement reflects the focus by the agency on virtual currency, and emphasizes the need to actively screen IP addresses for embargoed locations even after users are on boarded.
  • “Causation” Theory. Finally, cases publicly settled in 2022 reflected a continued enforcement emphasis on non-U.S. persons “causing” U.S. banks to violate sanctions prohibitions. In an action against Toll Holdings, for example, OFAC indicated that by issuing invoices requesting payment into a U.S. bank account, non-U.S. persons can “cause” the routing of payments through the U.S. financial system thereby causing a violation of U.S. sanctions. OFAC also found that Sojitz (Hong Kong) Limited engaged in apparent violations of U.S. sanctions when routing a payment through the U.S. financial system for Iranian-origin goods and CA Indoseuz Switzerland S.A. and CFM Indosuez Wealth engaged in apparent violations of U.S. sanctions by routing transactions through the United States on behalf of sanctioned customers. Finally, OFAC found Danish company Danfoss A/S caused U.S. financial institutions to facilitate prohibited transactions and export financial services to sanctioned jurisdictions when its subsidiary directed customers to make payments to its bank account at the UAE branch of a U.S. financial institution.
  • Compliance Procedures. OFAC also settled with American Express National Bank, a subsidiary of American Express Company, for apparent violations of OFAC’s Kingpin sanctions. OFAC’s enforcement release highlighted the importance of effective sanctions compliance procedures and training. Similarly, OFAC issued a Finding of Violation to MidFirst Bank for violations of non-proliferation-related regulations in that the bank processed transactions on behalf of newly blocked persons for 14 days after their designation. OFAC did not issue a civil monetary penalty in connection with the MidFirst Bank settlement.

We expect to see a continued focus on enforcement actions related to virtual currency as well as those involving non-U.S. persons causing U.S. persons to violate U.S. sanctions by routing prohibited transactions through U.S. financial institutions. Additionally, given the time OFAC has historically taken to investigate and conclude enforcement investigations, we could start to see significant enforcement actions for violations of the Russian Harmful Foreign Activities Sanctions Regulations, particularly given the significant world-wide focus on enforcing the Russia-related sanctions that started in 2022.

Other Notable Sanctions Developments in 2022

Sanctions Compliance Guidance for Instant Payment Systems. On September 30, 2022, OFAC published its first ever sanctions compliance guidance for instant payment systems, which highlights the importance of managing sanctions risks through risk-based approaches in the context of instant payment systems and other new payment technologies. The guidance encourages instant payment system developers to incorporate sanctions compliance considerations as they continue developing their systems, and illustrates OFAC’s continued efforts to ensure its regulatory guidance stays current with emerging technologies. OFAC concurrently announced a settlement with Tango Card, Inc., “a Seattle, Washington-based company that supplies and distributes electronic rewards” that, as a result of “deficient geolocation identification processes … transmitted stored value products to individuals with Internet Protocol (IP) and email addresses associated with Cuba, Iran, Syria, North Korea, and the Crimea region of Ukraine.”

Significant Expansion of Humanitarian-related and Other Authorizations. Over the last year, and likely in partial response to the 2021 Treasury Sanctions Review, there was an increased focus by OFAC on better assessing and accounting for humanitarian-related activities that may be impacted by the imposition of sanctions. This focus of the agency was reflected in the issuance of humanitarian-related GLs in newly established targeted programs (e.g., Ethiopia), whereas in the past, such authorizations were typically only reserved for OFAC’s comprehensive programs. In addition, in February 2022, OFAC issued counterterrorism-related GL 20, which broadly authorizes U.S. persons to engage in “all transactions involving Afghanistan or governing institutions in Afghanistan” that are prohibited under counterterrorism-related authorities as a result of the 2022 takeover of the Afghan government by the Taliban and associated groups. This GL was intentionally broad in order to address challenges that both humanitarian and commercial-related entities were encountering for activities in or related to Afghanistan.

Most notably, on December 20, 2022, OFAC issued broad GLs in a number of key areas, including principally with respect to humanitarian activities and official business of the U.S. government and international organizations, and amending a number of related existing GLs in other programs. The new GLs authorize certain activities that fall within four categories, namely:

  • The official business of the U.S. government.
  • The official business of certain international organizations and entities, such as the United Nations and the International Red Cross.
  • Certain humanitarian transactions in support of nongovernmental organizations’ activities, such as disaster relief, health services and activities to support democracy, education, environmental protection and peacebuilding.
  • The provision of agricultural commodities, medicine and medical devices, as well as replacement parts and components and software updates for medical devices.

The new GLs reflect continuing work by the agency over the last several years both to harmonize existing authorizations across sanctions programs and to expand humanitarian-related authorizations on a cross-programmatic basis. These efforts by the agency were intensified in connection with the 2021 Treasury Sanctions Review, which included a recommendation for Treasury to focus on “[c]alibrating sanctions to mitigate unintended economic, political, and humanitarian impact” as one of its five recommended areas of focus in order to modernize U.S. sanctions. We expect to continue to see these four categories of activities to be generally authorized under future sanctions programs.

The new or amended GLs were added to virtually every (but not all, for example no GLs were added to the Cuban regulations) OFAC-administered sanctions programs. Because the GLs differ by program and, in some instances include new restrictions, it remains key to review closely the terms and conditions of the relevant GL on a case-by-case basis to determine whether it applies to a particular transaction or activity.

Conclusions and Outlook for 2023

There were numerous significant sanctions developments in 2022, including the unprecedented imposition of expansive multilateral sanctions on Russia in a highly coordinated manner by a host of different agencies, regulators and international partners. Actions undertaken by the European Union, United Kingdom and other allies of the United States demonstrate that, while the imposition of sanctions by the United States alone may not be significant enough to impact a country as important to the global economy as Russia, more impactful action on a multilateral basis is increasingly possible and being pursued. Though we expect to see continued multilateral coordination on sanctions under this administration, we will be paying attention to see whether or not the unprecedented level of coordination and joint effort seen in 2022 is a harbinger of a longer term trend with respect to Russia or addressing issues of shared national security and foreign policy concerns in other areas. Russia’s invasion of Ukraine demonstrated that the territorial integrity of sovereign states is a red line across a broad cross-section of the international community. However, it remains to be seen how much of the response to Russia’s aggression is tied to its location on the European continent and geopolitical importance.

We expect that policy-makers in the United States, European Union and United Kingdom will continue to draw on and combine with the deployment of sanctions measures tools in other areas of trade regulation, including export controls, import and foreign investment controls, to leverage these legal tools as instruments for the pursuit of foreign and national security objectives. We also anticipate that there will be continued increased multilateral cooperation, including information sharing, consultation and coordination, in these areas of regulation than in the past. In the United States, it is foreseeable that U.S. agencies and regulators operating in areas of oversight and administration that intersect with international trade and investment will continue to allocate resources and hire personnel in areas of particular focus, such as in the virtual currency and Russian sanctions evasion enforcement areas.

It remains to be seen which sanctions programs will receive the most attention in 2023, and in what areas the foreign policy and national security interests and objectives of various jurisdictions will align, or to what degree, such that sanctions responses occur on the basis of multinational coordination. The Biden-Harris administration’s increased focus on China, including through major export controls reforms and considerations of outbound investment, may signal China as the country to watch in 2023. However, with the precedent established in multilateral use of sanctions as a preferred instrument of foreign and national security policy in the United States, the European Union and United Kingdom, 2023 appears to be another year of dynamic developments in this and related areas of law.



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