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Ethiopia-Related Sanctions

922. What does Executive Order (E.O.) of September 17, 2021, “Imposing Sanctions on Certain Persons with Respect to the Humanitarian and Human Rights Crisis in Ethiopia,” do? 

E.O. of September 17, 2021 provides for the imposition of menu-based sanctions on foreign persons determined by the Secretary of the Treasury, in consultation with the Secretary of State, to meet certain criteria under the order, including foreign persons determined to be responsible for or complicit in actions or policies that expand or extend the ongoing crisis in northern Ethiopia or obstruct a ceasefire or peace process.  Section 1(a) of E.O. of September 17, 2021 provides the complete list of criteria for designation under the order. 

Section 2(a) of E.O. of September 17, 2021 lists the menu of prohibitions that can be imposed by the Secretary of the Treasury, in consultation with the Secretary of State, on a foreign person designated under the order. 

The prohibitions that may be selected include, among other things:  (1) blocking sanctions on all property and interests in property of the “sanctioned person” (as defined in E.O. of September 17, 2021), except for any entities owned, in whole or in part, directly or indirectly, by one or more sanctioned persons (unless the entity is itself a sanctioned person and the blocking sanctions have been selected); (2) a prohibition on any United States person investing in or purchasing significant amounts of equity or debt instruments of the sanctioned person; (3) a prohibition on any United States financial institution making loans or providing credit to the sanctioned person; (4) a prohibition on any transactions in foreign exchange that are subject to the jurisdiction of the United States and in which the sanctioned person has any interest; and (5) any of the above sanctions on the principal executive officer or officers of the sanctioned person, or on persons performing similar functions and with similar authorities.  Persons blocked pursuant to section 2(a)(i)(A) of E.O. of September 17, 2021 will appear on OFAC’s Specially Designated Nationals and Blocked Persons List (SDN List), while persons sanctioned pursuant to section 2(a)(i)(B) – (E) of E.O. of September 17, 2021 will appear on to the Non-SDN Menu-Based Sanctions List (NS-MBS List).

For the purposes of E.O. of September 17, 2021, the term “sanctioned person” means a foreign person (1) that has been determined by Secretary of the Treasury, in consultation with the Secretary of State, to meet any of the designation criteria described in section 1 of E.O. of September 17, 2021; and (2) for whom the Secretary of the Treasury, in consultation with the Secretary of State, has selected one or more of the sanctions set forth in Section 2(a) of E.O. of September 17, 2021 to impose on that foreign person.  Please see Section 7(f) of E.O. of September 17, 2021.

E.O. of September 17, 2021 is designed to impose costs on actors contributing to the conflict in northern Ethiopia while mitigating potential undue harm to the people of Ethiopia, including by exempting the official business of the U.S. government by its employees, grantees, and contractors from the prohibitions under E.O. of September 17, 2021, enabling their continued support of development activity, life-saving humanitarian assistance, and longer-term assistance to address basic needs of at-risk populations.
 

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923. Do blocking sanctions imposed on persons pursuant to Executive Order (E.O.) of September 17, 2021, “Imposing Sanctions on Certain Persons with Respect to the Humanitarian and Human Rights Crisis in Ethiopia,” automatically apply to entities owned in whole or in part by sanctioned persons? 

No.  Unless an entity is itself a sanctioned person (as defined in E.O. of September 17, 2021) and listed separately on OFAC’s Specially Designated Nationals and Blocked Persons List (SDN List), it is not blocked pursuant to E.O. of September 17, 2021.  OFAC’s 50 Percent Rule does not apply to persons blocked solely pursuant to section 2(a)(i)(A) of E.O. of September 17, 2021.

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924. Do non-blocking sanctions imposed on persons pursuant to Executive Order (E.O.) of September 17, 2021, “Imposing Sanctions on Certain Persons with Respect to the Humanitarian and Human Rights Crisis in Ethiopia,” automatically apply to entities owned in whole or in part by sanctioned persons?

No.  If a person is listed on OFAC’s Non-SDN Menu-Based Sanctions List (NS-MBS List) as subject to only one or more of the sanctions described in section 2(a)(i)(B) – (E) of E.O. of September 17, 2021, these non-blocking sanctions do not apply to an entity owned in whole or in part, individually or in the aggregate, directly or indirectly, by such sanctioned person, unless OFAC separately lists the entity on the NS-MBS List as subject to sanctions. 

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925. For purposes of Ethiopia General License (GL) 1, “Official Activities of Certain International Organizations and Other International Entities,” what organizations are included within the United Nations’ “Programmes, Funds, and Other Entities and Bodies, as well as its Specialized Agencies and Related Organizations”? 

For an organizational chart of the United Nations, which lists the Programmes, Funds, and Other Entities and Bodies, as well as the Specialized Agencies and Related Organizations covered by GL 1, please see the following page on the United Nations website:  https://www.un.org/en/pdfs/un_system_chart.pdf

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926. What activities are authorized pursuant to Ethiopia General License (GL) 2, “Certain Transactions in Support of Nongovernmental Organizations’ Activities”? 

Ethiopia GL 2 authorizes certain transactions and activities involving nongovernmental organizations’ (NGOs) activities in Ethiopia or Eritrea, including:  activities to support humanitarian projects and to meet basic human needs (such as, among other examples provided in GL 2, shelter and settlements assistance, water, sanitation, hygiene activities, and COVID-19 related assistance); activities to support democracy building (such as, among other examples provided in GL 2, activities to support conflict mitigation); activities to support education; activities to support non-commercial development projects directly benefiting the people of Ethiopia or Eritrea, including those related to health, food security, water and sanitation; and activities to support environmental and natural resource protection.  Please see GL 2 for details.

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927. Do non-U.S. persons risk exposure to U.S. sanctions for engaging in transactions and activities that would be authorized for U.S. persons pursuant to Executive Order (E.O.) of September 17, 2021, “Imposing Sanctions on Certain Persons with Respect to the Humanitarian and Human Rights Crisis in Ethiopia”?

Non-U.S. persons, including nongovernmental organizations and foreign financial institutions, generally do not risk exposure to U.S. sanctions for engaging in, or facilitating transactions or payments for, activities that would be exempt or authorized for U.S. persons pursuant to Ethiopia GL 1, GL 2, or GL 3.

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