This newsletter is a listing of the latest changes in export control regulations through August 31, 2023. The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.
See also our “Latest Sanctions Fines & Penalties” section below for an update on companies and persons denied export privileges by the United States Government.
REGULATORY UPDATES
President
President Biden signed H.R. 4004, the “United States-Taiwan Initiative on 21st-Century Trade First Agreement Implementation Act”
August 7, 2023: President Biden signed H.R. 4004, the “United States-Taiwan Initiative on 21st-Century Trade First Agreement Implementation Act” (the “Act”). Among other things, the Act would impose requirements on the negotiations of certain further trade agreements between the United States and Taiwan.
Section 7 of the Act includes requirements for the negotiation of certain further trade agreements with Taiwan that raise constitutional concerns. Section 7(b) of the Act would require the United States Trade Representative (USTR) to provide negotiating texts to congressional committees in the midst of negotiations with a foreign partner, and section 7(c) of the Act would preclude the USTR from transmitting United States-proposed texts to Taiwan while the Congress is reviewing them. Section 7(c) of the Act would further, in violation of INS v. Chadha, afford 2 members of the Congress the power to increase the required waiting period before the USTR may provide texts to Taiwan. Section 7(d) of the Act would require the inclusion of members of the Congress as accredited members of the United States delegation who would be entitled to daily briefings, including of tentative agreements. In cases where the requirements of section 7 of the Act would impermissibly infringe upon the President’s constitutional authority to negotiate with a foreign partner, the Biden Administration will treat them as non-binding.
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President Biden Published Fact Sheet On Progress Under CHIPS and Science Act
August 9, 2023: One year ago, President Biden signed into law the CHIPS and Science Act (CHIPS), which makes a nearly $53 billion investment in U.S. semiconductor manufacturing, research and development, and workforce. The law also creates a 25 percent tax credit for capital investments in semiconductor manufacturing and is helping to keep America at the forefront of innovation and technological development. Semiconductors were invented in the United States, but the U.S. only produces about 10 percent of the global supply—and none of the most advanced chips. Similarly, investments in research and development have fallen to less than 1 percent of GDP from 2 percent in the mid-1960s at the peak of the space race. The CHIPS and Science Act aims to change this by driving American competitiveness, making American supply chains more resilient, and supporting national security and access to key technologies.
In the one year since CHIPS was signed into law, companies have announced over $166 billion in manufacturing in semiconductors and electronics, and at least 50 community colleges in 19 states have announced new or expanded programming to help American workers access good-paying jobs in the semiconductor industry. In total, since the beginning of the Biden-Harris Administration, companies have announced over $231 billion in commitments in semiconductor and electronics investments in the United States. In August, the Department of Commerce announced the first round of grants under CHIPS to support the development of open and interoperable wireless networks, and the National Science Foundation and Departments of Energy, Commerce, and Defense announced progress toward establishing the National Semiconductor Technology Center, which will help advance America’s leadership in semiconductor research and development.
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President Biden Issues Executive Order “Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern.
August 9, 2023: 88 Fed. Reg. 54867: On August 9, 2023, President Biden issued the Executive Order declaring a national emergency to address the threat to the United States posed by certain countries of concern, which seek to develop and exploit sensitive or advanced technologies or products critical for military, intelligence, surveillance, or cyber-enabled capabilities. The Order directs the Secretary of the Treasury to establish a program to prohibit or require notification of certain types of outbound investments by United States persons into certain entities located in or subject to the jurisdiction of a country of concern, and certain other entities owned by persons of a country of concern, involved in specific categories of advanced technologies and products. The Order identifies three categories of national security technologies and products for the program: semiconductors and microelectronics, quantum information technologies, and artificial intelligence. In an Annex to the Order, the President identified the People’s Republic of China, along with the Special Administrative Regions of Hong Kong and Macau, as a country of concern.
https://www.federalregister.gov/d/2023-17449
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Biden-Harris Administration Launches Artificial Intelligence Cyber Challenge to Protect America’s Critical Software
August 9, 2023: The Biden-Harris Administration launched a major two-year competition that will use artificial intelligence (AI) to protect the United States’ most important software, such as code that helps run the internet and our critical infrastructure. The “AI Cyber Challenge” (AIxCC) will challenge competitors across the United States, to identify and fix software vulnerabilities using AI. Led by the Defense Advanced Research Projects Agency (DARPA), this competition will include collaboration with several top AI companies – Anthropic, Google, Microsoft, and OpenAI – who are lending their expertise and making their cutting-edge technology available for this challenge. This competition, which will feature almost $20 million in prizes, will drive the creation of new technologies to rapidly improve the security of computer code, one of cybersecurity’s most pressing challenges. It marks the latest step by the Biden-Harris Administration to ensure the responsible advancement of emerging technologies and protect Americans.
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The White House’s Office of the National Cyber Director Issues RFI Regarding Open-Source Software Security
August 10, 2023: 88 Fed. Reg. 54315: The Office of the National Cyber Director (ONCD), the Cybersecurity Infrastructure Security Agency (CISA), the National Science Foundation (NSF), the Defense Advanced Research Projects Agency (DARPA), and the Office of Management and Budget (OMB) invite public comments on areas of long-term focus and prioritization on open-source software security.
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President Biden Signs Continuation of Export Administration Act of 1979
August 17, 2023: 88 Fed. Reg. 55549: On August 17, 2001, the President issued Executive Order 13222 pursuant to the International Emergency Economic Powers Act. In that order, the President declared a national emergency with respect to the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States related to the expiration of the Export Administration Act of 1979. Because the implementation of certain sanctions authorities is to be carried out under the International Emergency Economic Powers Act, the President has determined the national emergency declared on August 17, 2001 must continue in effect beyond August 17, 2023. Therefore, the President issued an Executive Order continuing for one year the national emergency declared in Executive Order 13222, as amended by Executive Order 13637 of March 8, 2013.
https://www.federalregister.gov/d/2023-17743
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Department of State, Directorate of Defense Trade Controls (DDTC)
DDTC Name And Address Changes Posted To Website
August 1 through 29, 2023: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at
- Change in Address for General Dynamics Mission Systems – Italy s.r.l. from Viale Egeo 100-106, 00144, Rome, Italy to Via Carlo Veneziani 58, 00148, Rome, Italy.
- Change in Name for Meggitt PLC to Meggitt Limited due to acquisition.
- Change in Name and Address for Nitec (UK) Ltd, Hardwick House, Hardwick View Road, Chesterfield, Derbyshire, S42 5SA, UK to CBE Plus Ltd, Enterprise Drive, Holmewood Industrial Estate, Chesterfield, Derbyshire, S42 5UZ, UK due to merger.
- Change in Name for General Electric International, Inc. – Aviation (Dubai) to GE Aviation Systems North America LLC Branch due to corporate reorganization.
- Change in Name and Address for General Electric International, Inc. filial av utenlandsk foretak, Kjerrbergtunet 40, Sola 11, Norway to GE Aviation Systems North America LLC Norwegian Branch, Drammensveien 165, Oslo, 0277, Norway due to corporate reorganization.
- Change in Name and Address for Filial af General Electric International, Inc., Park Alle 295, Brondby 2605, Denmark to filial af GE Aviation Systems North America LLC, Jupitervej 6, Kolding 6000, Denmark due to corporate reorganization.
- Change in Name and Address for General Electric International, Inc., Wilmington, Delaware, Baden Branch, Brown Boveri Strasse 8, Baden 5400, Switzerland to GE Aviation Systems North America LLC, Wilmington, succursale de Vaud, Eysins, Nyon Business Park Office 0005 Regus, Route de Crassier 7, Eysins 1262, Switzerland due to corporate reorganization.
- Change in Name for Philotech Iberica Sistemas y Logistica S.L. to Bertrandt Technology Spain S.L. as a result of a rebranding effort.
- Change in Name and Addresses from General Electric International, Inc., Via Galeno 36, Milano 20126, Italy and Viale Tiziano 19, Rome 00196, Italy to GE Avio S.r.l., Via I Maggio 99, Rivalta di Torino (TO) 10040, Italy due to corporate reorganization.
- Change in Address for CAE France SAS from Rue St Georges, 75009 Paris, France to Batiment 1, 26 Avenue Ariane Airial Parc, 33700 Mérignac, France.
- Change in Name and Address for AGIS Group Pty Ltd, 116/24 Lonsdale Street, Braddon ACT 2612, Australia, to Downer Professional Services Pty Ltd at Suite 3.01, Level 3, 68 Northbourne Avenue, Canberra ACT 2600, Australia, due to acquisition.
- Change in Name for Zangold Pty Ltd to EPE Oceania Pty Ltd, due to acquisition.
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Secretary of State Certification of Statutory Requirements: Lifting of Defense Trade Restrictions on the Republic of Cyprus for Fiscal Year 2024
August 18, 2023: Secretary Blinken determined and certified to Congress that the Republic of Cyprus has met the necessary conditions under the National Defense Authorization Act for Fiscal Year and the Eastern Mediterranean Security and Energy Partnership Act of 2019 to allow the Department to approve exports, reexports, and transfers of defense articles to the Republic of Cyprus for FY 2024. Secretary Blinken’s actions continue the Department’s current policy, which first suspended the status of the Republic of Cyprus as a proscribed destination under § 126.1 of the ITAR on October 1, 2022.
Therefore, the Department will be publishing a Federal Register notice amending the International Traffic in Arms Regulations (ITAR) § 126.1(r) to specify that the policy of denial as described in § 126.1(r) shall not apply with respect to exports, reexports, and transfers to the Republic of Cyprus for FY 2024 and that the Republic of Cyprus’ status as a proscribed destination is suspended for FY 2024 with respect to exports, reexports, and transfers of defense articles. The Federal Register notice will also amend the ITAR to suspend the policy of denial for retransfers and temporary imports destined for or originating in the Republic of Cyprus and brokering activities involving the Republic of Cyprus for FY 2024.
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DSCA Notification Of Potential Foreign Military Sale To Finland
August 1, 2023: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Finland of a M270A2 Multiple Launch Rocket System (MLRS) upgrade and related equipment for an estimated cost of $395 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.
The Government of Finland has requested to buy the M270A2 upgrade for its M270A1 Multiple Launch Rocket Systems (MLRS). The upgrade will include: intercom systems; radio communication mounts; machine gun mounts; battle management system vehicle integration kit; publications for MLRS; spares; services; support equipment; and other related elements of program and logistics support. The estimated total cost is $395 million.
This proposed sale will support the foreign policy and national security of the United States by improving the security of a North Atlantic Treaty Organization (NATO) Ally that is an important force for political stability and economic progress in Europe.
The proposed sale will improve Finland’s capability to meet current and future threats, and will enhance interoperability with U.S. forces and other allied forces. Finland will have no difficulty absorbing this upgrade into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The principal contractors will be Lockheed Martin Inc., Grand Prairie, TX; Chelton Inc., Marlow, United Kingdom; Leonardo DRS, Arlington, VA; and Loc Performance Products, Inc., Plymouth, MI. There are no known offset agreements in connection with this potential sale.
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DSCA Notification of Potential Foreign Military Sale To Australia
August 18, 2023: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Australia of M142 High Mobility Artillery Rocket Systems (HIMARS) and related equipment for an estimated cost of $975 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.
The Government of Australia has requested to buy up to twenty-two (22) M142 High Mobility Artillery Rocket Systems (HIMARS); sixty (60) M30A1 Guided Multiple Launch Rocket System (GMLRS) Alternative Warhead (AW) Pods with Insensitive Munitions Propulsion System (IMPS); forty (40) M31A1 GMLRS Unitary (GMLRS-U) High Explosive (HE) Pods with IMPS; sixty-six (66) M30A2 Extended Range (ER)-GMLRS AW Pods; and twenty-four (24) M31A2 ER GMLRS Unitary (HE) Pods. Also included are Reduced Range Practice Rocket (RRPR) Pods; intercom systems to support the HIMARS Launcher; M1084A2 HIMARS Re-Supply Vehicles (RSV); trailers; 9300-SL60TN Forklift, Side Loader; radio/communication mounts; machine gun mounts; wheel guards; ruggedized laptops; training; training equipment; publications for HIMARS and its munitions, and spares; services; other support equipment; and other related elements of program and logistic support. The estimated total program cost is $975 million.
This proposed sale will support the foreign policy and national security objectives of the United States. Australia is one of our most important allies in the Western Pacific. The strategic location of this political and economic power contributes significantly to ensuring peace and economic stability in the region. It is vital to the U.S. national interest to assist our ally in developing and maintaining a strong and ready self-defense capability.
The proposed sale will improve Australia’s capability to meet current and future threats, and will enhance interoperability with U.S. forces and other allied forces. Australia will use the capability to strengthen its homeland defense and provide greater security for its critical infrastructure. Australia will have no difficulty absorbing this equipment into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The principal contractors will be Lockheed Martin, Grand Prairie, TX; L3Harris Corporation, Melbourne, FL; Leonardo DRS, Arlington, VA; and Oshkosh Corporation, Stafford, VA. There are no known offset agreements in connection with this potential sale.
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DSCA Notification Of Potential Foreign Military Sale To Poland
August 21, 2023: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Poland of AH-64E Apache Helicopters and related equipment for an estimated cost of $12.0 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.
The Government of Poland has requested to buy ninety-six (96) AH-64E Apache Attack Helicopters; two hundred ten (210) T700-GE 701D engines (192 installed, 18 spares); ninety-seven (97) AN/ASQ-170 Modernized Target Acquisition and Designation Sight/AN/AAR-11 Modernized Pilot Night Vision Sensors (M-TADS/PNVS) (96 installed, 1 spare); thirty-seven (37) AN/APG-78 Fire Control Radars (FCR) Mast Mounted Assembly (MMA) (36 installed, 1 spare); thirty-seven (37) Longbow Fire Control Radar (FCR) Radar Electronic Units (REU), (36 installed, 1 spare); ninety-six (96) AN/APR-48B Modernized Radar Frequency Interferometers (MRFI); one hundred two (102) AN/AAR-57 Common Missile Warning Systems (CMWS) (96 installed, 6 spares); two hundred four (204) AN/ARC-231A, with RT-1987 Receiver Transmitters, Very High Frequency/Ultra High Frequency (VHF/UHF) radios (192 installed, 12 spares); one thousand eight hundred forty-four (1,844) AGM-114R2 Hellfire Missiles; ninety-six (96) M36E8 Hellfire Captive Air Training Missiles (CATM); four hundred sixty (460) AGM-179A Joint Air-to-Ground Missiles (JAGM); five hundred eight (508) Stinger 92K Block I Missiles; and seven thousand six hundred fifty (7,650) WGU-59/B Advanced Precision Kill Weapon System II (APKWS-II) Guidance Sections (GS). Also included are Radar Signal Detecting Sets; Laser Detecting Sets; Identification Friend or Foe (IFF) transponders; Improved Data Modems; Small Tactical Terminals; Improved Countermeasure Dispensing Systems (ICMD); Automatic Direction Finders; Doppler Radar Velocity Sensors; Radar Altimeter Common Cores (RACC); Tactical Air Navigation Set (TACAN); Global Positioning System (GPS) receivers; Simple Key Loader; Advanced Weapon System Automatic Machine Guns; rocket launchers; missile launchers; rockets; ammunition; Manned-Unmanned Teaming (MUMT) Unmanned Aerial System (UAS) Receiver; MUMT Air-Air-Ground kits; training devices; communication systems; helmets; simulators; generators; aircrew survivability equipment; transportation and organization equipment; spare and repair parts; support equipment; tools and test equipment; technical data and publications; personnel training and training equipment; U.S. Government and contractor technical assistance; technical and logistics support services; and other related elements of program and logistical support. The estimated total cost is $12.0 billion.
Poland – AH-64E Apache Helicopters | Defense Security Cooperation Agency (dsca.mil)
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DSCA Notification of Potential Foreign Military Sale To Taiwan
August 23, 2023: The State Department has made a determination approving a possible Foreign Military Sale to the Taipei Economic and Cultural Representative Office in the United States of F-16 Infrared Search and Track (IRST) systems and related equipment for an estimated cost of $500 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.
The Taipei Economic and Cultural Representative Office in the United States (TECRO) has requested to buy Infrared Search and Track (IRST) systems; integration and test support and equipment; aircraft and munitions support and support equipment; software delivery and support; spare parts, consumables and accessories, and repair and return support; publications and technical documentation; personnel training and training equipment; studies and surveys; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistical and program support. There is no Major Defense Equipment (MDE). The estimated total cost is $500 million.
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DSCA Notification of Potential Foreign Military Sale To Japan
August 28, 2023: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Japan of Joint Air-to-Surface Standoff Missiles with Extended Range (JASSM-ER) and related equipment for an estimated cost of $104 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.
The Government of Japan has requested to buy up to fifty (50) AGM-158B/B-2 Joint Air-to-Surface Standoff Missiles with Extended Range (JASSM-ER). Also included are JASSM Anti-jam Global Positioning System Receivers (JAGR), training missiles, and missile containers; munitions support and support equipment; spare parts, consumables, accessories, and repair/return support; integration and test support and equipment; personnel training and equipment; classified and unclassified software delivery and support; classified and unclassified publications and technical documentation; transportation support; U.S. Government and contractor engineering, technical, and logistics support services; studies and surveys; and other related elements of logistics and program support. The estimated total cost is $104 million.
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U.S. Department of Commerce, Bureau of Industry & Security
Expansion of Nuclear Nonproliferation Controls on the People’s Republic of China and Macau
August 14, 2023: 88 Fed. Reg. 54875: In response to the People’s Republic of China’s (China) military modernization efforts, military-civil fusion strategy, and expansion of its nuclear forces, the Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) by adding additional nuclear nonproliferation controls on China and Macau. This change specifically applies to items controlled for Nuclear Nonproliferation (NP) column 2 reasons for control. These controls enhance U.S. Government efforts to monitor the export of these items and to ensure they are only being used in peaceful activities such as commercial nuclear power generation, medical developments, production of or use in medicine, and non-military industries.
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Commerce Control List: Updates Based on the Latest Nuclear Suppliers Group (NSG) Plenary Meetings
August 18, 2023: 88 Fed. Reg. 56462: The Bureau of Industry and Security (BIS) published a final rule to amend the Export Administration Regulations (EAR) to reflect changes reached by the Nuclear Suppliers Group (NSG) in its June 2019 plenary meeting in Nur-Sultan (now Astana), Kazakhstan and its plenary meeting of June 2022 in Warsaw, Poland. Consistent with U.S. commitments as a participating country in the NSG, this rule revises five existing Export Control Classification Numbers (ECCNs) under the Commerce Control List (CCL). These changes protect U.S. nuclear nonproliferation interests, while aligning the EAR with the control text agreed to by participating governments (PGs).
https://www.federalregister.gov/d/2023-16750
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Commerce Secretary Raimondo Meets with Minister of Commerce of the People’s Republic of China Wang Wentao
August 28, 2023: U.S. Secretary of Commerce Gina Raimondo met with Minister of Commerce of the People’s Republic of China Wang Wentao to advance U.S. commercial and strategic interests. The meeting was part of ongoing efforts to deliver on President Biden’s directive following his meeting with President Xi in November 2022 to deepen bilateral discussions.
Secretary Raimondo emphasized the importance of ensuring open lines of communication between the United States and China and took concrete steps to deliver on that goal. Secretary Raimondo and Minister Wang agreed to: Establish a new commercial issues working group, a consultation mechanism involving U.S. and PRC government officials and private sector representatives to seek solutions on trade and investment issues and to advance U.S. commercial interests in China. They agreed that the working group will meet twice annually at the Vice Minister level, with the U.S. hosting the first meeting in early 2024. Launch the export control enforcement information exchange, which will serve as a platform to reduce misunderstanding of U.S. national security policies. The first in-person meeting occurred at the Assistant Secretary level at the Ministry of Commerce in Beijing on Tuesday, August 29. Convene subject matter experts from both sides to hold technical discussions regarding strengthening the protection of trade secrets and confidential business information during administrative licensing proceedings. Communicate regularly at the Secretary and Minister level about commercial and economic issues and to meet in-person at least once annually.
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Bureau of Industry and Security Continues to Update Section 232 Exclusions For Steel and Aluminum Tariffs
August 28, 2023: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) published a proposed rule that continues the Department’s efforts to improve the exclusion process for steel and aluminum tariffs and obtain public feedback. The proposed rule responds to public comments received since BIS’s February 2022 notice, proposes four additional changes to the Section 232 exclusions process, and requests additional public comment on a series of issues. This proposed rule (and subsequent final rule(s) that will follow) will build on the existing five interim final rules (IFRs) issued since 2018, and which remain in effect. BIS has administered the Section 232 exclusions process since the imposition of duties on imports of aluminum and steel in 2018 following investigations into the national security impacts of imports of aluminum and steel to the United States. Since 2018, BIS has published five IFRs that established and made various revisions to the Section 232 exclusions process.
The rule proposes four primary changes intended to create a more transparent, fair, and efficient exclusions process:
- Proposes a more efficient General Approved Exclusions (GAE) process by changing the criteria generally used for determining GAEs by focusing on the substance of objections submitted rather than whether any objection has been submitted or not;
- Introducing a “General Denied Exclusions” (GDE) process to limit further exclusions on products which have consistently been found to be manufactured in the United States. Similar to General Approved Exclusions, GDEs would be identified on the volume and substance of Objections submitted to such products in the 232 Exclusions Process;
- Modifying the existing certification language and introducing new certification requirements for exclusion requests, including by making changes to the Exclusion Request Form so that requestors can demonstrate that they made reasonable efforts to source their product from the United States or from countries which the United States has arrived at a satisfactory alternative means to address U.S. national security concerns, which currently are: Argentina, Australia, Brazil, Canada, the European Union, Japan, Mexico, South Korea, and the United Kingdom; and
- Proposing similar certification language on the objection form to further ensure objectors can supply comparable quality and quantity steel or aluminum and make it “immediately available” to requestors in line with the standards described in the previous Section 232 IFRs.
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BIS Creates Option For Longer Renewal Periods For TDOs
August 29, 2023: 88 Fed. Reg. 59791: In this final rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) to create an additional option for the renewal of temporary denial orders (TDOs) by allowing BIS, under certain circumstances, to request that the Assistant Secretary for Export Enforcement renew an existing TDO for a period of no more than one year, rather than the current renewal period of no more than 180 days. This final rule also makes some conforming changes to remove references to the ‘EAA,’ the Export Administration Act (EAA), and add in their place references to ‘ECRA,’ the Export Control Reform Act (ECRA), to reflect the EAR’s current statutory authority.
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Department of the Treasury, Office of Foreign Assets Control (OFAC)
OFAC Posts Sanctions Compliance Guidance on the Provision of Humanitarian Assistance to Syria
August 8, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued an OFAC Compliance Communique: Guidance for the Provision of Humanitarian Assistance to Syria in response to questions from the NGO community and the general public on how to provide humanitarian assistance to Syria while complying with OFAC sanctions.
https://ofac.treasury.gov/media/931236/download?inline
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OFAC To Retire PIP, DEL, And SDALL.ZIP File Formats Of The Sanctions List On Or About The Week Of September 18, 2023
August 15, 2023: OFAC retires the PIP, DEL, and SDALL.ZIP sanctions list file formats on or about, the week of September 18, 2023. OFAC will continue to offer for public download, the XML, CSV, and FF file formats, the ZIP files SDN_XML and SDN_Advanced, and PDF versions for OFAC’s sanctions list(s). OFAC’s Sanctions List Search tool will not be affected by these changes, and users of the search tool will not experience any loss of service.
https://ofac.treasury.gov/recent-actions/20230815_33
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OFAC Releases Video – Fundamentals of Sanctions Program
August 28, 2023: OFAC released the second episode of its “Introduction to OFAC” web series, a series of short videos created to provide viewers with a high-level introduction on the fundamentals of OFAC and sanctions implementation. The episode introduces viewers to OFAC sanctions programs and provides an explanation of blocking and non-blocking sanctions.
Introduction to OFAC – Episode 2 | Office of Foreign Assets Control (treasury.gov)
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U.S. Customs and Border Protection
Census Bureau Updates Its Foreign Trade Regulations On ITAR Filing Requirements
August 10, 2023: 88 Fed. Reg. 54234: The U.S. Department of Commerce’s Census Bureau (Census) has issued a final rule amending its regulations to reflect new export reporting requirements related to the U.S. Department of State’s Directorate of Defense Trade Controls (DDTC) U.S. Munitions List (USML) Category XXI determination number. Specifically, the Census Bureau is adding a conditional data element, DDTC Category XXI Determination Number, when “21” is selected in the DDTC USML Category Code field in the Automated Export System (AES) to represent USML Category XXI. In addition, this rule makes remedial changes to Census’ Foreign Trade Regulations (FTR) to update International Traffic in Arms Regulations (ITAR) references in existing data elements: DDTC Significant Military Equipment Indicator and DDTC Eligible Party Certification Indicator. This rule also makes other remedial changes to the FTR. This final rule is effective November 8, 2023.
https://www.federalregister.gov/d/2023-16970
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CBP’s Commercial Customs Operations Advisory Committee to Meet Sept. 20
August 31, 2023: 88 Fed. Reg. 59933: The U.S. Department of Homeland Security’s U.S. Customs and Border Protection (CBP) has announced that its Commercial Customs Operations Advisory Committee ((COAC) will hold its quarterly meeting on Wednesday, September 20, 2023, from 1:00 PM to 5:00 PM ET. The meeting will be open to the public via webinar only. There is no on-site, in-person option for the public to attend this quarterly meeting. The webinar link and conference number will be posted by 5:00 p.m. EDT on September 19, 2023, at https://www.cbp.gov/trade/stakeholder-engagement/coac/coac-public-meetings. The COAC will hear from the current subcommittees on the topics listed below:
The Intelligent Enforcement Subcommittee will provide updates on the work completed and topics discussed in its working groups. The Antidumping/Countervailing Duty (AD/CVD) Working Group will provide updates regarding its work and discussions on importer compliance with AD/CVD requirements. The Intellectual Property Rights (IPR) Process Modernization Working Group will report on, and anticipates providing recommendations for the committee’s consideration relating to, the development of a portal on the CBP IPR web page and other enhancements in communications between CBP, rights holders, and the trade community regarding enforcement actions. The Bond Working Group will report on the ongoing discussions and status updates for eBond requirements. The Forced Labor Working Group (FLWG) has been working on the implementation of recommendations and updates, as well as revisions to its statement of work. The FLWG will also provide updates and anticipates making recommendations for the committee’s consideration at the September public meeting.
The Next Generation Facilitation Subcommittee will provide updates on its working groups. There will be an update and potential recommendations for the committee’s consideration from the Automated Commercial Environment (ACE) 2.0 Working Group regarding progress on the ACE 2.0 initiative resulting from the working group’s recent in-person sessions held to review the CBP ACE 2.0 Concept of Operations processes. The Customs Interagency Industry Working Group (CII) (formerly the One U.S. Government Working Group) will provide an update on the work accomplished this quarter, which includes discussions with Partner Government Agencies and an update on ACE 2.0. The Passenger Air Operations (PAO) Working Group has been focusing its discussions on CBP security seal processing and access to international aircraft and passengers, landing rights, and elimination of outdated or obsolete forms, and will provide an update on those discussions.
The Rapid Response Subcommittee will provide updates from the Broker Modernization Working Group and the United States-Mexico-Canada Agreement (USMCA) Chapter 7 Working Group. The Broker Modernization Working Group currently meets monthly and continues to focus on the 19 CFR Part 111 final rules relating to Modernization of the Customs Broker Regulations and Continuing Education for Licensed Customs Brokers, as well as Customs Broker Licensing Exams matters. The subcommittee anticipates the Broker Modernization Working Group will provide one recommendation for the committee’s consideration. The USMCA Chapter 7 Working Group meets bi-weekly with the expectation that recommendations will be developed and submitted for consideration at an upcoming COAC public meeting. The current focus of this working group is to review the Chapter 7 articles of the USMCA and identify gaps in implementation between the United States, Mexico, and Canada.
The Secure Trade Lanes Subcommittee will provide updates on its five active working groups: the Export Modernization Working Group, the In-Bond Working Group, the Trade Partnership and Engagement Working Group, the Pipeline Working Group, and the Cross-Border Recognition Working Group. The Export Modernization Working Group has continued its work on the electronic export manifest pilot program. The In-Bond Working Group has continued its focus on the implementation of previously submitted recommendations. The Trade Partnership and Engagement Working Group has focused its work on implementing previous recommendations for Customs Trade Partnership Against Terrorism (CTPAT) Trade Compliance partners and is working to update its statement of work to include CTPAT security. The Pipeline Working Group expects to submit a recommendation for the committee’s consideration that CBP develop a pilot to use Distributed Ledger Technology to enhance transparency in supply chains for pipeline-borne goods. Although the Cross-Border Recognition Working Group did not meet this quarter, it remains an active working group within the subcommittee and will resume meetings next quarter.
COAC Public Meetings | U.S. Customs and Border Protection (cbp.gov)
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Department of Justice
The DOJ Sued SpaceX For Discriminating Against Asylees And Refugees In Hiring
August 24, 2023: The Justice Department filed a lawsuit against Space Exploration Technologies Corporation (SpaceX) for discriminating against asylees and refugees in hiring. The lawsuit alleges that, from at least September 2018 to May 2022, SpaceX routinely discouraged asylees and refugees from applying and refused to hire or consider them, because of their citizenship status, in violation of the Immigration and Nationality Act (INA).
In job postings and public statements over several years, SpaceX wrongly claimed that under federal regulations known as “export control laws,” SpaceX could hire only U.S. citizens and lawful permanent residents, sometimes referred to as “green card holders.” Export control laws impose no such hiring restrictions. Moreover, asylees’ and refugees’ permission to live and work in the United States does not expire, and they stand on equal footing with U.S. citizens and lawful permanent residents under export control laws. Under these laws, companies like SpaceX can hire asylees and refugees for the same positions they would hire U.S. citizens and lawful permanent residents. And once hired, asylees and refugees can access export-controlled information and materials without additional government approval, just like U.S. citizens and lawful permanent residents.
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The Department of State, the Department of Labor, and the Department of Commerce
The Department of State, the Department of Labor, and the Department of Commerce Issued Advisory On Doing Business In South Sudan
August 14, 2023: The Department of State, the Department of Labor, and the Department of Commerce issued an advisory to highlight risks for U.S. businesses, individuals, and other persons, including academic institutions, research service providers, and investors (hereafter “businesses and individuals”) conducting or contemplating business in South Sudan. These risks continue to grow as a result of South Sudan’s transitional government’s failure to implement political and economic reforms, improve transparency and public financial management, and address pervasive, endemic corruption and human rights violations.
https://www.state.gov/south-sudan-business-advisory/
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Department Of The Treasury
Department Of The Treasury Published List Of Countries That Require Participation Or Cooperation With An International Boycott
August 22, 2023: 88 Fed. Reg. 57178: In accordance with section 999(a)(3) of the Internal Revenue Code of 1986, the Department of the Treasury is publishing a current list of countries which require or may require participation in, or cooperation with, an international boycott (within the meaning of section 999(b)(3) of the Internal Revenue Code of 1986).
On the basis of the best information currently available to the Department of the Treasury, the following countries require or may require participation in, or cooperation with, an international boycott (within the meaning of section 999(b)(3) of the Internal Revenue Code of 1986):
Iraq;
Kuwait;
Lebanon;
Libya;
Qatar;
Saudi Arabia;
Syria; and
Yemen.
| LATEST SANCTIONS FINES & PENALTIES |
This section of our newsletter provides information on the latest sanctions, fines and penalties for export violations or matters of non-compliance with the ITAR or EAR issued by the US government enforcement agencies. It is provided as a service to exporters and associates of FD Associates to remind them of the importance of extreme due diligence in all international trade and export compliance matters, particularly those involving exports subject to the ITAR or the EAR. Don’t let this happen to you or your company! Call us with questions or concerns at 703-847-5801 or email info@fdassociates.net.
Sanctions
Department of State
August 8, 2023: 88 Fed. Reg. 53574: The U.S. Department of State has determined that the following individual and entities have engaged in activities that warrant the imposition of measures pursuant to Section 3 of the Iran, North Korea, and Syria Nonproliferation Act:
- Sinobright Import and Export Company (PRC) (People’s Republic of China); and any successor, sub-unit, or subsidiary thereof;
- Wisdom Import & Export (Shanghai) Co., Ltd. (PRC) and any successor, sub-unit, or subsidiary thereof;
- Seyed Taba (Turkish individual); EuroAsia (Turkiye) and any successor, sub-unit, or subsidiary thereof;
- Mirel Makina Elektronik Teks (Turkiye) and any successor, sub-unit, or subsidiary thereof.
The Act provides for sanctions on foreign entities and individuals for the transfer to or acquisition from Iran since January 1, 1999; the transfer to or acquisition from Syria since January 1, 2005; or the transfer to or acquisition from North Korea since January 1, 2006, of goods, services, or technology controlled under multilateral control lists (Australia Group, Chemical Weapons Convention, Missile Technology Control Regime, Nuclear Suppliers Group, Wassenaar Arrangement) or otherwise having the potential to make a material contribution to the development of weapons of mass destruction (WMD) or cruise or ballistic missile systems. The latter category includes items of the same kind as those on multilateral lists but falling below the control list parameters when it is determined that such items have the potential of making a material contribution to WMD or cruise or ballistic missile systems; items on U.S. national control lists for WMD/missile reasons that are not on multilateral lists; and other items with the potential of making such a material contribution when added through case-by-case decisions. The measures became effective on July 19, 2023.
https://www.federalregister.gov/d/2023-16891
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August 24, 2023: The Department of State designated the below individuals and entity that have reportedly played a role in forcibly deporting Ukrainian children from Russia-occupied areas of Ukraine to Russia, and/or transferring Ukrainian children within Russia-occupied areas of Ukraine:
- Galina Anatolevna Pyatykh is the advisor to the Governor of Belgorod and Commissioner for Children’s Rights in the Belgorod region and has been involved in facilitation of the deportation of Ukrainian children to Russia and their adoption by Russian families;
- Irina Anatolyevna Ageeva is the Commissioner for Children’s Rights in the Kaluga region and has been involved in facilitation of the deportation of Ukrainian children to Russia and their adoption by Russian families;
- Irina Aleksandrovna Cherkasova is the Commissioner for Children’s Rights in Rostov region and has been involved in facilitation of the deportation of Ukrainian children to Russia and their adoption by Russian families;
- Mansur Mussaevich Soltaev (Soltaev) is the Commissioner for Human Rights in the Chechen Republic and is reportedly associated with human rights violations and abuses and the suppression of protests against the Russian mobilization of troops. Additionally, Soltaev has been involved in facilitation of the transfer of civilians of the so-called “Donetsk People’s Republic” and the so-called “Luhansk People’s Republic”, to include the deportation of Ukrainian children to camps in the Chechen Republic;
- Muslim Magomedovich Khuchiev is the Chairman of the government of the Chechen Republic and has been involved in facilitation of the deportation of Ukrainian children to Russia and their adoption by Russian families;
- Federal State Budgetary Educational Institute International Children Center Artek (Artek) is a Government of Russia-owned “summer camp” located in Russia-occupied Crimea that has received Ukrainian children who are subsequently placed in extensive “patriotic” re-education programs and are prevented from returning to their families;
- Konstantin Albertovich Fedorenko is the director of Artek;
- Zamid Alievich Chalaev is a special police battalion commander in the Russian Ministry of Internal Affairs who took part in the storming of the Azovstal Iron and Steel Works during the siege of Mariupol and was involved in the transfer of Ukrainian children to camps in the Chechen Republic;
- Olena Oleksandrivna Shapurova is the Russia-appointed, so-called “Minister of Education and Science” in Russia-controlled portions of the Zaporizhzhia region in Ukraine and has implemented pro-Russia educational curriculums in schools in these areas threatening to remove children from Ukrainian families if they do not attend pro-Russia schools;
- Aymani Nesievna Kadyrova is a member of the board of directors of AKF. Aymani Kadyrova is the mother of U.S.-designated Ramzan Kadyrov and the president of AKF, who is involved in efforts to transfer children from Ukraine to military camps outside of Grozny in Chechnya;
- Vladimir Vladislavovich Kovalenko is a member of the board of directors of the All Russian Children and Youth Patriotic Public Movement Youth Army, an entity designated pursuant to E.O. 14024 in April 2023. Youth Army is an initiative created by Russia’s Defense Minister Sergei Shoigu responsible for militarizing, propagandizing, and Russifying schoolchildren in Russia-controlled areas of Ukraine. Kovalenko is the Chief of Staff of the Sevastopol Branch of Youth Army, which is responsible for organizing Russian military and patriotic camps for Ukrainian children in Crimea; and
- Vladimir Dmitrievich Nechaev is the Russia-appointed head of Sevastopol State University in Crimea, overseeing a Russian cultural, historical, and patriotic reeducation program for Ukrainian children transported from the Luhansk region to Crimea.
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Department of Commerce, Bureau of Industry and Security (BIS)
August 31, 2023: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) issued a Temporary Denial Order (TDO) suspending the export privileges of three individuals – Arthur Petrov, Zhanna Soldatenkova, and Ruslan Almetov – and four companies – Astrafteros Technokosmos LTD, Ultra Trade Service LLC, Juzhoi Electronic LLC, and LLC Electrocom VPK – all of which are part of a Russia-based illicit procurement network that supplies the Russian military. This action, coordinated through the Disruptive Technology Strike Force co-led by the U.S. Departments of Justice and Commerce, also involve the unsealing of a criminal complaint in the Southern District of New York against Petrov. Petrov was arrested on August 26, 2023 and remains in custody. The Commerce Department’s actions build on the criminal complaint by denying his company, Astrafteros Technokosmos LTD, as well as Electrocom VPK, Ultra Trade Service LLC, and Juzhoi Electronic LLC, access to U.S. exports.
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Department of the Treasury, Office of Foreign Assets Control (OFAC)
August 8, 2023: 88 Fed. Reg. 52026: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has adopted a final rule amending and replacing the Mali Sanctions Regulations, published in abbreviated form at 85 Fed. Reg. 7223 (Feb. 7, 2020), to further implement a July 26, 2019, Mali-related Executive Order and provide a more comprehensive set of regulations, including additional interpretive and definitional guidance, general licenses, and other regulatory provisions. This rule is effective August 7, 2023.
https://www.federalregister.gov/documents/2023/08/07/2023-16860/mali-sanctions-regulations and https://ofac.treasury.gov/media/932051/download?inline
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August 8, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing an OFAC Compliance Communique: Guidance for the Provision of Humanitarian Assistance to Syria in response to questions from the NGO community and the general public on how to provide humanitarian assistance to Syria while complying with OFAC sanctions. OFAC is additionally amending one Syria Frequently Asked Question (FAQ 937).
Question 937: What does the general license (GL) at § 542.516 of the Syrian Sanctions Regulations (SySR), as amended on November 26, 2021, authorize with respect to nongovernmental organizations (NGOs)?
Answer: The GL at § 542.516 of the SySR continues to authorize, subject to certain limitations, NGOs to engage in certain transactions and activities that would otherwise be prohibited in support of the following not-for-profit activities in Syria:
- Humanitarian projects that meet basic human needs;
- Democracy-building;
- Education;
- Non-commercial development projects directly benefitting the Syrian people; and
- The preservation and protection of cultural heritage sites.
The transactions and activities that NGOs are authorized to engage in include:
- Transactions with persons who meet the definition of the term Government of Syria, as defined in § 542.305(a) (i.e., the state and the Government of the Syrian Arab Republic, as well as any political subdivision, agency, or instrumentality thereof, including the Central Bank of Syria), that would otherwise be prohibited by § 542.201(a)(1);
- New investment (i.e., a transaction that constitutes a commitment or contribution of funds or other assets, or a loan or other extension of credit) in Syria that would otherwise be prohibited by § 542.206;
- Exportation or reexportation of services that would otherwise be prohibited by § 542.207; and
- Purchase of refined petroleum products of Syrian origin for use in Syria that would otherwise be prohibited by § 542.209.
Early-recovery-related transactions and activities that fall within the categories of transactions and activities listed above are authorized. For transactions and activities not otherwise authorized or exempt from sanctions, OFAC considers license requests on a case-by-case basis.
Additionally, this GL authorizes U.S. financial institutions to process transfers of funds in support of the authorized transactions and activities outlined above. U.S. depository institutions, U.S. registered brokers or dealers in securities, and U.S. registered money transmitters may rely on the statements of their customers that such transactions are authorized unless they know or have reason to know a transaction is not authorized. U.S. depository institutions, U.S. registered brokers or dealers in securities, and U.S. registered money transmitters are expected to conduct a level of due diligence commensurate with its overall risk profile and internal compliance policies and procedures with respect to a transaction involving Syria.
Separately, non-U.S. persons, including NGOs and foreign financial institutions, do not risk exposure to U.S. secondary sanctions pursuant to the Caesar Syria Civilian Protection Act of 2019 for engaging in or facilitating transactions and activities that are otherwise authorized or exempt for U.S. persons under the SySR. Please see FAQ 884 for additional information.
Please note that this guidance does not apply to transactions and activities that may be subject to sanctions under other sanctions programs administered by OFAC (e.g., transactions with persons blocked under OFAC’s counterterrorism authority (E.O. 13224, as amended) or OFAC’s Syria-related authority (E.O. 13894)), unless exempt or otherwise authorized by OFAC.
https://ofac.treasury.gov/media/931236/download?inline and https://ofac.treasury.gov/faqs/937
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August 9, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated three Sinaloa Cartel members involved in the illicit trafficking of fentanyl and other deadly drugs. This action was coordinated closely with the Government of Mexico, including La Unidad de Inteligencia Financiera (Mexico’s Financial Intelligence Unit), and is the result of ongoing collaboration with the Drug Enforcement Administration’s San Diego Field Division, the Federal Bureau of Investigation’s San Diego Field Office – Major Mexican Traffickers Strike Force, the San Diego County District Attorney’s Office, and the San Diego Sheriff’s Department.
The following individuals have been added to OFAC’s SDN List:
- Alfonso Arzate Garcia of Mexico;
- Rene Arzate Garcia of Mexico; and
- Rafael Guadalupe Felix Nunez of Mexico.
https://home.treasury.gov/news/press-releases/jy1680
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August 9, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Belarus General License 8 “Authorizing the Wind Down of Transactions Involving Joint Stock Company Byelorussian Steel Works Management Company of Holding Byelorussian Metallurgical Company” and Belarus General License 9 “Authorizing Transactions Related to Civil Aviation Safety or the Wind Down of Transactions Involving Open Joint Stock Company Belavia Belarusian Airlines”.
Belarus General License 8: All transactions prohibited by the Belarus Sanctions Regulations, 31 CFR part 548 (BSR), that are ordinarily incident and necessary to the wind down of any transaction involving Joint Stock Company Byelorussian Steel Works Management Company of Holding Byelorussian Metallurgical Company (BSW) or any entity in which BSW owns, directly or indirectly, a 50 percent or greater interest, including Bel-Kap-Steel LLC (collectively, “BSW Entities”), are authorized through 12:01 a.m. eastern daylight time, October 9, 2023, provided that any payment to a BSW Entity must be made into a blocked account in accordance with the BSR. Note: The authorization above includes authorization for U.S. persons to process and pay salaries, severance, and expenses, and to pay vendors and landlords, to the extent such transactions are ordinarily incident and necessary to the wind down of Bel-Kap-Steel LLC and do not involve a debit to a blocked account.
This general license does not authorize any transactions otherwise prohibited by the BSR, including transactions involving any person blocked pursuant to the BSR other than the BSW Entities, unless separately authorized.
Belarus General License 9: All transactions prohibited by the Belarus Sanctions Regulations, 31 CFR part 548 (BSR), that are ordinarily incident and necessary to the provision, exportation, or reexportation of goods, technology, or services to ensure the safety of civil aviation involving Open Joint Stock Company Belavia Belarusian Airlines, or any entity in which Open Joint Stock Company Belavia Belarusian Airlines owns, directly or indirectly, a 50 percent or greater interest (collectively, the “Belavia Entities”), are authorized through 12:01 a.m. eastern daylight time, September 8, 2023, provided that the goods, technology, or services that are provided, exported, or reexported are for use on aircraft operated solely for civil aviation purposes.
All transactions prohibited by the BSR that are ordinarily incident and necessary to the wind down of any transaction involving the Belavia Entities, are authorized through 12:01 a.m. eastern daylight time, September 8, 2023, provided that any payment to a Belavia Entity must be made into a blocked account in accordance with the BSR.
This general license does not authorize any transactions otherwise prohibited by the BSR, including transactions involving any person blocked pursuant to the BSR other than the Belavia Entities, unless separately authorized.
OFAC also designated eight individuals and five entities identifying one aircraft as blocked property on the three-year anniversary of the Belarusian authorities’ falsification of the August 2020 presidential election and their callous crackdown on the Belarusian protest movement demanding fundamental freedoms. This action targets several entities involved in the Belarusian regime’s continued civil society repression, complicity in the Russian Federation’s unjustified war in Ukraine, and enrichment of repressive Belarusian regime leader Alyaksandr Lukashenka. This action is taken alongside other recent actions of U.S. partners and Allies, further highlighting the unified view that Belarus’s prolonged subjugation of its people and its continued support of Russia’s war against Ukraine remain a global concern.
The following individuals have been added to OFAC’s SDN List:
- Aleksin, Dzmitry Aliakseevich of Belarus;
- Aleksin, Vital Aliakseevich of Belarus;
- Aleksina, Ina Vladimirovna of Belarus;
- Dunko, Artem Konstantinovich of Belarus;
- Franskevich, Viktor Ivanovich of Belarus;
- Korchik, Dmitry Aleksandrovich of Belarus;
- Marshalov, Igor Anatolievich of Belarus; and
- Selitskiy, Victor Frantsevich of Belarus.
The following entities have been added to OFAC’s SDN List:
- Bel-Kap-Steel LLC of the U.S.;
- Department Of Financial Investigations Of The State Control Committee Of The Republic Of Belarus;
- Open Joint Stock Company Belavia Belarusian Airlines (A.K.A. Belavia Belarusian Airlines;
- Open Joint Stock Company Byelorussian Steel Works Management Company Of Holding Byelorussian Metallurgical Company; and
- Open Joint Stock Company Minsk Civil Aviation Plant 407.
The following aircraft has been added to OFAC’s SDN List:
- EW-301PJ; Aircraft Model CRJ-200ER; Aircraft Manufacturer’s Serial Number (MSN) 8057; Aircraft Tail Number EW-301PJ.
https://ofac.treasury.gov/media/932071/download?inline and https://ofac.treasury.gov/media/932076/download?inline and https://home.treasury.gov/news/press-releases/jy1682 and https://ofac.treasury.gov/recent-actions/20230809
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August 10, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has designated the former governor of Lebanon’s central bank, Riad Salameh (Salameh), whose corrupt and unlawful actions have contributed to the breakdown of the rule of law in Lebanon. Salameh abused his position of power, likely in violation of Lebanese law, to enrich himself and his associates by funneling hundreds of millions of dollars through layered shell companies to invest in European real estate. OFAC has also designatied four close associates of Salameh, including members of Salameh’s family and his primary assistant, who helped to conceal and facilitate this corrupt activity. The United States is taking this action alongside United Kingdom and Canada, partners who share the United States’ vision of a Lebanon that is governed for the benefit of the Lebanese people and not for the personal wealth and ambition of Lebanon’s elite.
The following individuals have been added to OFAC’s SDN List:
- Riad bin Tawfiq Salameh of Lebanon and France;
- Nadi Riad Salame of Lebanon and France;
- Raja Salameh of Lebanon;
- Marianne Alexandros Andrianopoulos of Lebanon; and
- Anna Kosakova of Ukraine.
https://ofac.treasury.gov/recent-actions/20230810 and https://home.treasury.gov/news/press-releases/jy1687
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August 10, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issued Russia-related General License 13F, “Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024”.
Russia-Related General License 13F: U.S. persons, or entities owned or controlled, directly or indirectly, by a U.S. person, are authorized to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations, or certifications, to the extent such transactions are prohibited by Directive 4 under Executive Order 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation, provided such transactions are ordinarily incident and necessary to the day-to-day operations in the Russian Federation of such U.S. persons or entities, through 12:01 a.m. eastern standard time, November 8, 2023.
This general license does not authorize:
(1) Any debit to an account on the books of a U.S. financial institution of the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation; or
(2) Any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR, unless separately authorized.
https://ofac.treasury.gov/media/932081/download?inline and https://ofac.treasury.gov/recent-actions/20230810
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August 11, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued a new round of sanctions targeting prominent members of Russia’s financial elite, as well as a Russian business association. The four individuals have served on the supervisory board of the Alfa Group Consortium (“Alfa Group”), one of the largest financial and investment conglomerates in Russia. These individuals were previously sanctioned by Australia, Canada, the European Union, New Zealand, and the United Kingdom.
The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is publishing one Russia-related Frequently Asked Question (1131).
Frequently Asked Question 1131: Is Letterone Holdings S.A. (LetterOne) blocked as a result of the designation of Petr Olegovich Aven, Mikhail Maratovich Fridman, German Borisovich Khan, and Alexey Viktorovich Kuzmichev?
Answer: No. OFAC has not designated LetterOne and, based on information available to OFAC, LetterOne is not owned 50 percent or more by blocked persons or otherwise considered the blocked property or interest in property of blocked persons, including Petr Olegovich Aven, Mikhail Maratovich Fridman, German Borisovich Khan, and Alexey Viktorovich Kuzmichev.
The following individuals have been added to OFAC’s SDN List:
- Aven, Petr Olegovich of the United Kingdom, Lavia, Luxembourg and Russia;
- Fridman, Mikhail Maratovich of Russia;
- Khan, German Borisovich of the Ukraine, Israel and Russia;
- Kuzmichev, Alexey Viktorovich of France and Russsia.
The following entity has been added to OFAC’s SDN List:
- Russian Association Of Employers The Russian Union Of Industrialists And Entrepreneurs.
https://home.treasury.gov/news/press-releases/jy1690 and https://ofac.treasury.gov/faqs/1131
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August 16, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Lebanon-based Green Without Borders and its leader. Green Without Borders is a Lebanon-based organization that has provided support to and cover for Hizballah’s operations in southern Lebanon along the “Blue Line” between Lebanon and Israel over the last decade while publicly operating under the guise of environmental activism.
The following individual has been added to OFAC’s SDN List:
- NAHLA, Zuhair Subhi of Lebanon.
The following entities have been added to OFAC’s SDN List:
- Green Without Borders.
https://ofac.treasury.gov/recent-actions/20230816 and https://home.treasury.gov/news/press-releases/jy1698
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August 16, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on three entities tied to a sanctions evasion network attempting to support arms deals between Russia and the Democratic People’s Republic of Korea (DPRK). The entities are Limited Liability Company Verus (Verus), Defense Engineering Limited Liability Partnership (Defense Engineering), and Versor S.R.O. (Versor).
The following entities have been added to OFAC’s SDN List:
- Defense Engineering Limited Liability Partnership of Kazakhstan;
- Limited Liability Company Verus of Russia; and
- Versor S.R.O., of Slovakia.
https://home.treasury.gov/news/press-releases/jy1697 and https://ofac.treasury.gov/recent-actions/20230816
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August 17, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two Syria-based armed militias and three members of the groups’ leadership structures in connection with serious human rights abuses against those residing in the Afrin region of northern Syria. An auto sales company owned by the leader of one of the armed groups is also being designated. The Suleiman Shah Brigade is a prominent element of the armed opposition to the Syrian government and a component of the Syrian National Army, a coalition of Syrian armed opposition groups. The Suleiman Shah Brigade operates in the Afrin region of northern Syria, where it exerts significant control over the civilian population. The brigade subjects the populace of this area to abductions and extortion. The brigade has targeted Afrin’s Kurdish residents, many of whom are subjected to harassment, abduction, and other abuses until they are forced to abandon their homes or pay large ransoms for return of their property or family members. The Hamza Division, another armed opposition group operating in northern Syria, has been involved in abductions, theft of property, and torture. The division also operates detention facilities in which it houses those it has abducted for extended periods of time. During their imprisonment, victims are held for ransom, often suffering sexual abuse at the hands of Hamza Division fighters.
The following individuals has been added to OFAC’s SDN List:
- Mohammad Hussein al-Jasim (Abu Amsha) is the leader of the Suleiman Shah Brigade;
- Walid Hussein al-Jasim is a younger brother of Abu Amsha who also holds a leadership role in the Suleiman Shah Brigade, including serving as the head of the brigade when Abu Amsha left Syria to fight in Libya; and
- Sayf Boulad Abu Bakr is the leader of the Hamza Division and its public face, appearing in numerous propaganda videos produced by the Hamza Division.
The following entities have been added to OFAC’s SDN List:
- Al-Safir Oto Of Turkey (a car dealership owned by Abu Amsha that provides an outlet for Abu Amsha to invest his income);
- Hamza Division Of Syria; and
- Suleiman Shah Brigade Of Syria.
https://ofac.treasury.gov/recent-actions/20230817 and https://home.treasury.gov/news/press-releases/jy1699
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August 17, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is once again taking action to hold the Government of Russia accountable for its poisoning of Russian opposition politician Aleksey Navalny three years ago on August 20, 2020. Russian authorities imprisoned Navalny upon his return to Russia in January 2021, and on August 4, 2023, a Russian court sentenced Navalny to an additional 19 years in prison on unfounded charges of so-called “extremism.” Navalny came to prominence as a leading Russian anti-corruption activist more than a decade ago. Exposés published by Navalny and his organization, the Anti-Corruption Foundation, have revealed the ill-gained wealth of Russia’s elite politicians and their families, including, among others, President Vladimir Putin, former Prime Minister Dmitry Medvedev, and Kremlin spokesperson Dmitriy Peskov. As a vocal anti-corruption politician, Navalny has continued his fight against Russia’s kleptocracy despite the Kremlin’s attempts to silence him. On August 20, 2020, approximately 30 minutes into a flight back to Moscow after campaigning in Tomsk and Novosibirsk, Navalny fell gravely ill, prompting an emergency landing in Omsk where Navalny was treated by local hospital staff. The U.S. government assesses that Russian Federal Security Service (FSB) officers used the nerve agent Novichok to poison Navalny. Novichok nerve agents were created by the Soviet Union, and Russia is the only known country to have used these chemical weapons. Russia previously used a Novichok nerve agent in the March 2018 attempted assassination of former Russian military intelligence officer Sergei Skripal in Salisbury, United Kingdom. The Russian operation against Navalny reportedly involved multiple individuals who were on the ground in both Tomsk and Omsk, as well as operatives coordinating the situation from afar. These individuals collaborated to surveil Navalny ahead of the attack, break into his hotel room and apply the chemical weapon to his personal belongings, and they attempted to erase any evidence of their operation following the attack.
https://home.treasury.gov/news/press-releases/jy1700 and https://ofac.treasury.gov/recent-actions/20230817
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August 23, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Roman Semenov, one of three co-founders of the sanctioned virtual currency mixer Tornado Cash, for his role in providing material support to Tornado Cash and to the Lazarus Group, a state-sponsored hacking group that is an instrumentality of the Democratic People’s Republic of Korea (DPRK or North Korea). Tornado Cash has been used to launder funds for criminal actors since its creation in 2019, including to obfuscate hundreds of millions of dollars in virtual currency stolen by Lazarus Group hackers.
- Roman Semenov, a citizen of Russia, co-founded Tornado Cash as a mixing service to increase the anonymity of users’ transactions. Semenov was actively involved in promoting Tornado Cash in media and on online platforms, where he provided Tornado Cash users with advice to anonymize their transactions. After Semenov was alerted that Tornado Cash was being used to launder large volumes of stolen virtual currency for the Lazarus Group, he and his fellow co-founders continued to pay for infrastructure supporting the Tornado Cash service and took steps to increase the anonymity of the Tornado Cash service without appropriate measures to address the known illicit use by the DPRK.
https://home.treasury.gov/news/press-releases/jy1702
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August 23, 2023: Taking note of the Burmese military regime’s violent airstrikes against the people of Burma, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued a determination that allows sanctions to be imposed on any foreign individual or entity that operates in the jet fuel sector of the Burmese economy. Concurrently, OFAC designated two individuals and one entity that are involved in the procurement and distribution of jet fuel to Burma’s military regime, and two entities for being owned or controlled by such persons. After overthrowing Burma’s democratically elected civilian government in a coup on February 1, 2021, the military regime has increasingly relied on violent airstrikes to repress the people of Burma. Most recently, fighter jet and helicopter attacks killed up to 10 civilians near Nyaung Kone village and up to 80 civilians, including women and schoolchildren, in a village in the Sagaing region of central Burma in April and June 2023, respectively. The Sagaing region attack was one of many deadly air strikes since the military seized control of the country. Since the coup, over 3,900 civilians are estimated to have been killed by the regime.
The following individuals have been added to OFAC’s SDN List:
- Tun, Zaw Min of Burma; and
- Win, Khin Phyu of Burma;
The following entities have been added to OFAC’s SDN List:
- E.I Energy PTE. LTD. of Singapore;
- PEIA PTE. LTD. of Singapore; and
- Shoon Energy PTE. LTD. of Singapore.
https://home.treasury.gov/news/press-releases/jy1701 and https://ofac.treasury.gov/recent-actions/20230823
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August 24, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned six individuals for contributing to the most recent escalation of conflict in the eastern Democratic Republic of the Congo (DRC). These sanctions reflect the United States’ commitment to advancing efforts toward resolution of the crisis, promoting accountability for human rights abuses including conflict-related sexual violence, and addressing the dire humanitarian situation.
The following individuals have been added to OFAC’s SDN List:
- Byamungu, Bernard of the Democratic Republic of the Congo;
- Hakizimana, Apollinaire of the Democratic Republic of the Congo;
- Nyamvumba, Andrew of Rwanda;
- Protogene, Ruvugayimikore of Rwanda;
- Tokolonga, Salomon of the Democratic Republic of the Congo; and
- Uwimbabazi, Sebastien of Rwanda.
https://home.treasury.gov/news/press-releases/jy1703 and https://ofac.treasury.gov/recent-actions/20230824
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August 24, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) published the following Russia related designations.
The following individuals have been added to OFAC’s SDN List:
- Ageeva, Irina Anatolyevna of Russia;
- Chalaev, Zamid Alievich of Russia;
- Cherkasova, Irina Aleksandrovna of Russia;
- Fedorenko, Konstantin Albertovich of Russia;
- Kadyrova, Aymani Nesievna of Kazakhstan and Russia;
- Khuchiev, Muslim Magomedovich of Russia;
- Kovalenko, Vladimir Vladislavovich of Ukraine;
- Nechaev, Vladimir Dmitrievich of Russia;
- Pyatykh, Galina Anatolevna of Russia;
- Shapurova, Olena Oleksandrivna of the Ukraine; and
- Soltaev, Mansur Mussaevich of Russia.
The following entity has been added to OFAC’s SDN List:
- Federal State Budgetary Educational Institute International Children Center Artek.
https://ofac.treasury.gov/recent-actions/20230824
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August 31, 2023: In coordination with the Republic of Korea and Japan, the United States sanctioned two individuals and one entity—Jon Jin Yong, Sergey Mikhaylovich Kozlov, and Intellekt LLC—involved in generating revenue for the Democratic People’s Republic of Korea’s (DPRK) unlawful development of weapons of mass destruction (WMD) and ballistic missiles. This action by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is being taken in response to the DPRK’s August 23 attempted launch of a reconnaissance satellite into orbit, marking its second failed attempt to do so in three months.
The following individuals have been added to OFAC’s SDN List:
- Jin Yong Jon of North Korea; and
- Sergey Mikhaylovich Kozlov of Russia.
The following entity has been added to OFAC’s SDN List:
- INTELLEKT LLC of Russia.
https://ofac.treasury.gov/recent-actions/20230831 and https://home.treasury.gov/news/press-releases/jy1710
Fines and Penalties
August 2, 2023: Robert Alcantara pled guilty in Manhattan federal court to conspiracy to traffic firearms and conspiracy to launder money from his firearms trafficking. Alcantara conspired to sell more than 100 “ghost guns” to individuals in the Dominican Republic. On November 20, 2021, Alcantara was stopped in his vehicle in possession of kits to build approximately 45 ghost guns. Alcantara was interviewed by law enforcement agents and stated that he was planning to turn the 45 kits into working firearms and that he had 50 additional similar ghost guns at his home.
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August 3, 2023: In two separate cases, two U.S. Navy servicemembers were arrested for transmitting sensitive military information to the People’s Republic of China (PRC). A U.S. Navy sailor, Jinchao Wei, aka Patrick Wei, was arrested on espionage charges as he arrived for work at Naval Base San Diego, the homeport of the Pacific Fleet. He was indicted for conspiracy to send national defense information to an intelligence officer working for the People’s Republic of China. A U.S. Navy servicemember, Petty Officer Wenheng Zhao, aka Thomas Zhao, 26, of Monterey Park, California, was arrested following an indictment by a federal grand jury, charging him with receiving bribes in exchange for transmitting sensitive U.S. military information to an individual posing as a maritime economic researcher, but who was actually an intelligence officer from the PRC.
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August 8, 2023: In federal court, Dairo Antonio Úsuga David was sentenced to 45 years in prison for engaging in a continuing criminal enterprise as a leader of the multibillion-dollar paramilitary and drug trafficking organization known as the “Clan del Golfo” (CDG). According to court documents, Úsuga David was also sentenced to 45 years in prison for engaging in a maritime narcotics conspiracy. The sentences will run concurrently. As part of the sentence, the court ordered Úsuga David to pay $216 million in forfeiture. The defendant pleaded guilty to all three charges in January 2023.
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August 10, 2023: Corporación Financiera Colombiana S.A. (Corficolombiana), a Colombian financial services institution, has agreed to pay over $80 million to resolve parallel bribery investigations by criminal, civil, and administrative authorities in the United States and Colombia stemming from the company’s involvement in a scheme to pay millions of dollars in bribes to high-ranking government officials in Colombia.
The U.S. Department of Justice’s resolution is coordinated with authorities in Colombia, as well as the U.S. Securities and Exchange Commission (SEC).
According to court documents, Corficolombiana entered into a three-year deferred prosecution agreement (DPA) with the Department in connection with a criminal information filed in the District of Maryland charging the company with conspiracy to violate the anti-bribery provision of the Foreign Corrupt Practices Act (FCPA). Corficolombiana was majority-owned and controlled by Grupo Aval Acciones y Valores S.A., a Colombian holding company and issuer in the United States.
https://www.justice.gov/opa/pr/corficolombiana-pay-80m-resolve-foreign-bribery-investigations
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August 15, 2023: 88 Fed. Reg. 55437: On March 31, 2022, in the U.S. District Court for the Southern District of Florida, Guiliano Pecci (“Pecci”) was convicted of violating 18 U.S.C. 554(a). Specifically, Pecci was convicted of smuggling firearm kits from the United States to Paraguay. As a result of his conviction, the Court sentenced Pecci to 18 months of confinement, three years of supervised release and a $200 assessment. The Office of Export Enforcement subsequently denied Pecci’s export privileges under the Regulations for a period of seven years from the date of Pecci’s conviction. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Pecci had an interest at the time of his conviction.
https://www.federalregister.gov/d/2023-17503
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August 15, 2023: Former Special Agent in Charge (SAC) of the FBI Counterintelligence Division in New York, Charles McGonigal, 54, of New York City, pleaded guilty to conspiring to violate the International Emergency Economic Powers Act (IEEPA) and to commit money laundering in connection with his 2021 agreement to provide services to Oleg Deripaska, a sanctioned Russian oligarch.
According to court documents, on April 6, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Russian oligarch Oleg Deripaska for having acted or purported to act on behalf of a senior official of the Government of the Russian Federation and for operating in the energy sector of the Russian Federation economy. The U.S. District Court for the District of Columbia affirmed the sanctions against Deripaska, finding, among other things, that OFAC’s determination that Deripaska had acted as an agent of Russian President Vladimir Putin was supported by the evidence.
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August 16, 2023: 88 Fed. Reg. 55665: On January 12, 2022, in the U.S. District Court for the Southern District of Florida, Emilie Voissem (“Voissem”) was convicted of violating 18 U.S.C. 371 the International Emergency Economic Powers Act (50 U.S.C. 1701, et seq.) (“IEEPA”) and 18 U.S.C. 554. Specifically, Voissem was convicted of conspiracy to violate IEEPA, exporting and attempting to export, and smuggling four (4) rEvo III rebreathers from the United States to Libya without the required license or written approval. As a result of her conviction, the Court sentenced her to five months in prison, three years of supervised release and a $300 special assessment. The Office of Export Enforcement subsequently denied Voissem’s export privileges under the Regulations for a period of seven years from the date of Voissem’s conviction. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Voissem had an interest at the time of her conviction.
https://www.federalregister.gov/d/2023-17543
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August 16, 2023: 88 Fed. Reg. 55664: On August 4, 2020, in the U.S. District Court for the Middle District of Florida, Vladimir Volgaev (“Volgaev”) was convicted of violating 18 U.S.C. 554(a). Specifically, Volgaev was convicted of smuggling and attempting to smuggle firearm parts from the United States to Ukraine without having obtained a license or other approval from the U.S. Department of State. As a result of his conviction, the Court sentenced Volgaev to 33 months of confinement, one year of supervised release, $200 assessment and $6,835 in restitution. The Office of Export Enforcement subsequently denied Volgaev’s export privileges for a period of 10 years from the date of his conviction. The Office of Exporter Services also decided to revoke any BIS-issued licenses in which Volgaev had an interest at the time of his conviction.
https://www.federalregister.gov/d/2023-17541
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August 16, 2023: 88 Fed. Reg. 55663: On November 12, 2021, in the U.S. District Court for the Northern District of Iowa, Bradley Jon Matheny (“Matheny”) was convicted of violating 18 U.S.C. 554(a). Specifically, Matheny was convicted of smuggling from the United States to Arad, Israel, .117 caliber hunting pellets and smuggling from the United States to Sderot, Israel and Scottsville, South Africa, a Winchester 42-piece firearm brush cleaning kit. As a result of his conviction, the Court sentenced Matheny to 36 months of confinement, three years of supervised release, $1,000 assessment, $10,000 criminal fine and $256,441.78 in restitution. The Office of Export Enforcement subsequently denied Matheny’s export privileges under the Regulations for a period of seven years from the date of Matheny’s conviction. The Office of Exporter Services also decided to revoke any BIS-issued licenses in which Matheny had an interest at the time of his conviction.
https://www.federalregister.gov/d/2023-17542
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August 16, 2023: 88 Fed. Reg. 55662: On December 3, 2019, in the U.S. District Court for the Northern District of Illinois, Omran Ismail (“Ismail”) was convicted of violating 18 U.S.C. 371. Specifically, Ismail was convicted of conspiring to straw purchase several handguns on behalf of co-defendant Ola Sayed, who allegedly tried to smuggle the firearms into Egypt, in violation of 18 U.S.C. 371. As a result of his conviction, the Court sentenced Ismail to 18 months in prison, one year of supervised release, and an assessment of $200. The Office of Export Enforcement subsequently denied Ismail’s export privileges for a period of seven years from the date of Ismail’s conviction. The Office of Exporter Services also decided to revoke any BIS-issued licenses in which Ismail had an interest at the time of his conviction.
https://www.federalregister.gov/d/2023-17540
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August 16, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $660,594 settlement with Construction Specialties Inc. (“CS”). CS has agreed to settle its potential civil liability for three apparent violations of OFAC sanctions on Iran that arose from its United Arab Emirates subsidiary’s, Construction Specialties, Middle East L.L.C. (“CSME”), exportation of U.S. origin goods to Iran. Specifically, between December 4, 2016 and August 3, 2017, CSME senior leadership oversaw the purchase and re-exportation of commercial building products, valued at approximately $1,100,991, from suppliers in the United States with the knowledge that these goods were ultimately destined for a customer in Iran. OFAC determined that these apparent violations were egregious and were voluntarily self-disclosed.
https://ofac.treasury.gov/recent-actions/20230816_33
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August 21, 2023: The Department of Commerce, Bureau of Industry and Security extended the temporary denial orders for Ilya Balakaev and Radiotester OOO a/k/a Radiotester LLC, for an additional 180 days.
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August 22, 2023: Victor Coronado Jr., was sentenced Aug. 15 to 60 months in federal prison followed by three years of supervised release for smuggling weapons from the United States into Mexico following an investigation by Homeland Security Investigations (HSI); the Bureau of Alcohol, Tobacco, Firearms and Explosives; and U.S. Customs and Border Protection. Coronado was the leader of a conspiracy to smuggle firearms from the United States into Mexico between October 2019 and July 2020. Coronado and his co-conspirators purchased firearms, made false statements to firearms dealers in the acquisition of firearms, provided funds to others for the purchase of firearms, and assisted in smuggling 49 assault rifles and high-capacity semiautomatic pistols into Mexico.
The firearms that Coronado conspired to smuggle are prohibited from being exported from the United States into Mexico without a valid license. Neither Coronado nor any of his co-conspirators had a valid license or any other lawful authority to export the firearms into Mexico.
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August 23, 2023: A Russian national and a Washington man were charged with conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money transmitting business. According to the indictment, Roman Storm, 34, of Auburn, Washington, and Roman Semenov, 49, of Russia, created, operated, and promoted Tornado Cash, a cryptocurrency mixer that facilitated more than $1 billion in money laundering transactions, and laundered hundreds of millions of dollars for the Lazarus Group, the sanctioned North Korean cybercrime organization. Storm was arrested in the state of Washington.
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August 28, 2023: 88 Fed. Reg. 58544: On March 8, 2022, in the U.S. District Court for the Eastern District of Texas, Esteban Andres Alexander (“Alexander”) was convicted of violating 18 U.S.C. 371. Specifically, Alexander was convicted of conspiring to export firearms and firearms parts from the United States to Mexico without first having obtained the required export license and authorization from the U.S. Department of State or U.S. Department of Commerce. As a result of his conviction, the Court sentenced Alexander to 46 months of imprisonment, three years of supervised release, a $10,000 criminal fine and a $100 assessment. The Office of Export Enforcement subsequently denied Alexander’s export privileges under the Regulations for a period of 10 years from the date of Alexander’s conviction. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Alexander had an interest at the time of his conviction.
https://www.federalregister.gov/d/2023-18442
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August 28, 2023: 88 Fed. Reg. 58545: On March 30, 2022, in the U.S. District Court for the Northern District of Illinois, Tuqiang Xie (“Xie”) was convicted of violating section 38 of the Arms Export Control Act (22 U.S.C. 2778) (“AECA”). Specifically, Xie was convicted of knowingly and willfully engaging in brokering activities involving the People’s Republic of China in negotiating and arranging purchases, sales, transfers, export, and import of a defense article, namely an eyepiece assembly, National Stock Number 1240-01-063-1352, without first registering with, and obtaining a license or written approval from the U.S. Department of State. As a result of his conviction, the Court sentenced Xie to one year and one day in prison, one year of supervised release, an assessment of $200 and a preliminary order of forfeiture in the amount of $200,027. The Office of Export Enforcement subsequently denied Xie’s export privileges under the Regulations for a period of 10 years from the date of Xie’s conviction. The Office of Exporter Services has also decided to revoke any BIS issued licenses in which Xie had an interest at the time of his conviction.
https://www.federalregister.gov/d/2023-18439
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August 28, 2023: 88 Fed. Reg. 58547: On January 11, 2021, in the U.S. District Court for the Southern District of Florida, Naomi Natal Haynes (“Haynes”) was convicted of violating 18 U.S.C. 371. Specifically, Haynes was convicted of conspiring to fraudulently and knowingly export and send firearms from the United States to Canada without the required license. As a result of her conviction, the Court sentenced her to 84 months in prison, three years of supervised release, a $200 assessment and $18,240.18 Restitution. The Office of Export Enforcement subsequently denied Haynes’s export privileges under the Regulations for a period of 10 years from the date of Haynes’s conviction. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Haynes had an interest at the time of her conviction.
https://www.federalregister.gov/d/2023-18437
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August 29, 2023: Island Pyrochemical Industries Corp. settled allegations that it violated the International Traffic in Arms Regulations (ITAR) in connection with unauthorized brokering involving defense articles from the People’s Republic of China, a proscribed country and making false statements on license applications.
The 3 year administrative settlement concluded pursuant to ITAR § 128.11, addresses the misrepresentation of material facts on export license applications and engagement in unauthorized brokering activities involving ITAR-controlled ammonium perchlorate, which is controlled under U.S. Munitions List Category V(d)(2), from the People’s Republic of China, a proscribed country for exports and temporary imports of defense articles and defense services under ITAR § 126.1 at the time of the violations. Island Pyrochemical Industries Corporation reported in response to a directed disclosure to have made numerous unreported and unauthorized brokering activities.
Among the measures the Consent Agreement mandates are:
- An $850,000 civil penalty, half of which is payable in four installments and the other half for Consent Agreement-authorized remedial compliance costs;
- Designation of a Special Compliance Officer or Internal Special Compliance Office for the entire term of the Consent Agreement to oversee compliance with the Consent Agreement;
- Implementation of an automated export compliance system;
- A classification review; and
- At a minimum, one external audit.
DDTC chose not to impose an administrative debarment on IPI, but it reserved the right to do so in the future if the company does not fulfill the provisions of the Consent Agreement or is responsible for other compliance or law enforcement issues under the AECA or under other statutes enumerated in ITAR 120.27. The Consent Agreement and related documents are available for public inspection in the Public Reading Room of the Department of State and on the Penalties and Oversights Agreements section of DDTC’s website.
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August 31, 2023: A New York man was sentenced in federal court in Concord, NY, for operating an unlicensed money transmitting business that was used to export weapons to Pakistan. Muhammad Mohsin Raja, 27, was sentenced by U.S. District Court Judge Paul J. Barbadoro to 24 months in prison and 1 year of supervised release. On May 25, 2022, Raja pleaded guilty to conspiracy to operate an unlicensed money transmitting business.
For several years, Raja operated a “hawala” based out of New York and worked with individuals in Pakistan to coordinate the transfer of money between parties in the United States and Pakistan. A hawala is a type of informal money transfer system that uses a network of agents to transfer money across international borders without using the banking system, typically to circumvent banking laws and regulations.
The defendant transmitted approximately $4.7 million to Pakistan in 2021 alone. As part of the hawala, he made multiple payments for products intended for an organization on the Commerce Department’s Entity List, Pakistan’s Advanced Engineering Research Organization (AERO). AERO was added to the Entity List, which imposes export restrictions for organizations whose activities threaten U.S. national security or foreign policy interests, for procuring items for use in Pakistan’s cruise missile and strategic UAV programs. For example, the defendant made payments for a blade antenna manufactured by a New Hampshire defense contractor. Those antennas are typically used in UAVs, tactical missiles, helicopters, and aircraft. The defendant also made payments to a Florida defense contractor for rotary pumps and a solenoid valve. The rotary pumps were designed for use in M110 self-propelled howitzers, and the solenoid valve was designed for use in an AIM-9 Sidewinder missile or an AGM-86B air-launched cruise missile.
The defendant also made payments to a Florida firearms manufacturer on behalf of a Pakistani company called Al-Akbar Arms. The payments were for two shipments of assault weapons. The defendant messaged another individual suggesting they disguise the purpose of the payments as “purchasing watches as sports equipment.” However, law enforcement successfully intercepted the assault weapons.
In operating the hawala, the defendant used multiple cell phones to coordinate with other individuals, used multiple bank accounts, and enlisted the assistance of at least 10 friends and family members to visit banks and check cashing businesses to help cash checks, place money orders, and deposit funds.
https://www.justice.gov/usao-nh/pr/new-york-man-sentenced-connection-illegal-export-weapons
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August 31, 2023: Arthur Petrov, 33, a dual Russian-German citizen who has resided in Russia and Cyprus, is charged by criminal complaint with export control violations, smuggling, wire fraud, and money laundering offenses based on his alleged participation in an ongoing scheme to procure U.S.-sourced microelectronics subject to U.S. export controls on behalf of a Russia-based supplier of critical electronics components for manufacturers supplying weaponry and other equipment to the Russian military. Petrov was arrested on Aug. 26 in the Republic of Cyprus at the request of the United States.