General Note on Secondary Sanctions and “Derivative Designation” Criteria; Identification of the Gap Between the Theoretical and Practical Scopes of Authorities Targeting Transactions with no U.S. Nexus; Enforcement Risk Management (System Ed. Note)

Last substantive commentary amendment:
Sep. 01 2024

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TURBOFAC Commentary (23065 words)

General Note on Secondary Sanctions and “Derivative Designation” Criteria; Identification of the Gap Between the Theoretical and Practical Scopes of Authorities Targeting Transactions with no U.S. Nexus; Enforcement Risk Management (System Ed. Note)

 

1)       Synopsis

 

2)       Introduction; Terminological Issues

   a.     “Primary Sanctions Prohibitions”

   b.     “Primary Sanctions Derivative Designation Criteria”

   c.     “Secondary Sanctions,” and the Constants of the Relationship Between Secondary Sanctions and Primary Sanctions Derivative Designation Criteria

     I.    Historical Commonalities

     II.   Historical Distinctions

 

3)       The Theoretical Limits of the Scope of Secondary Sanctions Authorities and Derivative Designation Criteria

   a.     Secondary Sanctions Authorities; “Knowingly” and “Significant Transaction”

   b.     Derivative Designation Criteria

     I.    "Material Assistance" to a Blocked Person

     II. "Operating in" a Designated Sector or Territory

     III. Being "Owned or Controlled by" or Having "Acted...on Behalf of" a Blocked Person

   c.     the Technical Non- applicability to Derivative Designation Criteria and Secondary Sanctions of IEEPA-based and Other Exemptions; Apparent Non-applicability of