OFAC Issues GL, First Sanctions Under New Ethiopian Regime

The Office of Foreign Assets Control last week issued the first designations under the recently established Ethiopian and Eritrean sanctions regime (see 2109170036), targeting four entities and two people for contributing to the two countries' ongoing conflict. OFAC also issued a general license authorizing certain transactions with two of the sanctioned entities and published two new frequently asked questions.

The sanctions target the Eritrean Defense Force and the People’s Front for Democracy and Justice (PFDJ), Eritrea’s “sole legal political party.” OFAC also designated Abraha Kassa Nemariam, the head of the Eritrean national security office; Hagos Ghebrehiwet W Kidan, the PFDJ’s economic adviser; Hidri Trust, the holding company for all of PDFJ’s business activities; and the Red Sea Trading Corp., which supports the PDFJ.

The warring parties “must come to the negotiating table without preconditions,” OFAC Director Andrea Gacki said. “Treasury will continue to use all our tools and authorities to target and expose those whose actions prolong the crisis in the region,” Gacki said, adding that the U.S. will “pursue additional actions” if “there is not tangible progress toward a cessation of hostilities.” Along with sanctions, the U.S. imposes strict export controls on shipments of defense articles and services to certain end-users in Ethiopia and Eritrea (see 2110290004).

New General License No. 4 authorizes certain activities “incident and necessary to the wind down of transactions” with Hidri Trust or Red Sea Trading through 12:01 a.m. Dec. 14. But the license doesn’t authorize “any debit to an account on the books of a U.S. financial institution of any blocked person,” OFAC said.

The sanctions don’t prohibit humanitarian-related transactions or activity in Eritrea and Ethiopia, OFAC said in new FAQ 935. The agency pointed to several previously issued general licenses that “ensure that humanitarian assistance can flow to the people of Ethiopia, Eritrea, and the greater Horn of Africa region.” Export or reexports of certain agricultural commodities, medicine, medical devices, replacement parts, components and software updates will continue to be authorized even after the expiration of new GL No. 4, OFAC said. The agency also exempts official business of the U.S. government and its contractors.

The agency also said its 50% rule doesn’t apply to people and entities sanctioned solely under the Ethiopian and Eritrean sanctions regime created by President Joe Biden’s September executive order, according to new FAQ 936. The rule applies only if the entity or person is listed separately on the Specially Designated Nationals list.

The sanctions came about a week after a bipartisan group of senators introduced a bill that would require more sanctions and export controls against those contributing to or profiting from the civil war in Ethiopia (see 2111050004).