On December 9, 2022, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two Chinese individuals and a vast network fishing vessels they control, including Pingtan Marine Enterprise Ltd. (PME) and Dalian Ocean Fishing Co., Ltd. (Dalian), for perpetrating serious human rights abuses and corruption via illegal, unreported, and unregulated (IUU) fishing. Although this is not the first time Dalian has been adversely identified by a U.S. agency (see Update of June 2, 2021), OFAC’s action does mark the first time an entity listed on the NASDAQ stock exchange, PME, has been designated.

IUU fishing refers to fishing that: (i) contravenes applicable laws and regulations, including fishing in unregulated areas, other countries’ waters, or international waters, (ii) goes unreported or misreported to relevant authorities, or (iii) targets unregulated species contrary to countries’ conservation responsibilities. Although often associated with harmful environmental effects, IUU fishing also has a strong nexus with human rights abuses, especially related to human trafficking and inadequate labor standards. The International Labor Organization, for example, has identified instances of crewmember abuse and forced labor (or conditions of forced labor) aboard vessels engaged in IUU fishing. President Biden also emphasized the negative consequences of leaving IUU fishing unchecked in his recent Memorandum on Combatting Illegal, Unreported and Unregulated Fishing and Associated Labor Abuses (June 27, 2022).

OFAC’s designation of the two Chinese individuals includes designations of 157 fishing vessels reportedly owned by these individuals and flying the flag of the People’s Republic of China. Additional identifying information and details on the entities sanctioned are available here. All property and interests in property of these newly designated Specially Designated Nationals (SDN) List entities that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50% or more by one or more blocked persons are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt.

As a result of these designations, OFAC has issued two general licenses (GL) under the Global Magnitsky Sanctions Regulations – GL 3 and GL 4 – authorizing U.S. persons to engage in “certain transactions ordinarily incident and necessary to the wind down of financial contracts and other agreements” with PME and Dalian by March 9, 2023.