This newsletter is a listing of the latest changes in export control regulations through April 30, 2024. 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 Continued the National Emergency with Respect to Somalia
April 9, 2024: On April 12, 2010, by Executive Order 13536, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the deterioration of the security situation and the persistence of violence in Somalia; acts of piracy and armed robbery at sea off the coast of Somalia, which have been the subject of United Nations Security Council resolutions; and violations of the arms embargo imposed by the United Nations Security Council.
On July 20, 2012, the President issued Executive Order 13620 to take additional steps to deal with the national emergency declared in Executive Order 13536 in view of United Nations Security Council Resolution 2036 of February 22, 2012, and Resolution 2002 of July 29, 2011, and to address: exports of charcoal from Somalia, which generate significant revenue for al-Shabaab; the misappropriation of Somali public assets; and certain acts of violence committed against civilians in Somalia, all of which contribute to the deterioration of the security situation and the persistence of violence in Somalia.
The situation with respect to Somalia continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States. For this reason, the national emergency declared on April 12, 2010, and the measures adopted on that date and on July 20, 2012, to deal with that threat, must continue in effect beyond April 12, 2024. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 13536.
https://www.whitehouse.gov/briefing-room/presidential-actions/
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President Biden Continued The National Emergency with Respect to Russia
April 9, 2024: On April 15, 2021, by Executive Order 14024, President Biden declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by specified harmful foreign activities of the Government of the Russian Federation. On March 8, 2022, President Biden issued Executive Order 14066 to expand the scope of the national emergency declared in Executive Order 14024. On August 20, 2021, March 11, 2022, April 6, 2022, and December 22, 2023, President Biden issued Executive Orders 14039, 14068, 14071, and 14114, respectively, to take additional steps with respect to the national emergency declared in Executive Order 14024.
Specified harmful foreign activities of the Government of the Russian Federation — in particular, efforts to undermine the conduct of free and fair democratic elections and democratic institutions in the United States and its allies and partners; to engage in and facilitate malicious cyber-enabled activities against the United States and its allies and partners; to foster and use transnational corruption to influence foreign governments; to pursue extraterritorial activities targeting dissidents or journalists; to undermine security in countries and regions important to United States national security; and to violate well-established principles of international law, including respect for the territorial integrity of states -‑ continue to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.
For this reason, the national emergency declared in Executive Order 14024, which was expanded in scope by Executive Order 14066, and with respect to which additional steps were taken in Executive Orders 14039, 14068, 14071, and 14114, must continue in effect beyond April 15, 2024.
Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 14024.
https://www.whitehouse.gov/briefing-room/presidential-actions/page/2/
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President Biden Continued The National Emergency with Respect to the Regulation of the Anchorage and Movement of Russian-Affiliated Vessels to United States Ports
April 16, 2024: On April 21, 2022, by Proclamation 10371, President Biden declared a national emergency by reason of a disturbance or threatened disturbance of international relations of the United States and authorized the Secretary of Homeland Security to regulate the anchorage and movement of Russian-affiliated vessels, pursuant to the National Emergencies Act (50 U.S.C. 1601 et seq.) and section 1 of title II of Public Law 65-24, ch. 30, June 15, 1917, as amended (Magnuson Act) (46 U.S.C. 70051).
The policies and actions of the Government of the Russian Federation to continue the premeditated, unjustified, unprovoked, and brutal war against Ukraine continue to constitute a national emergency by reason of a disturbance or threatened disturbance of international relations of the United States. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency with respect to the Russian Federation and the emergency authority relating to the regulation of the anchorage and movement of Russian‑affiliated vessels to United States ports set out in Proclamation 10371.
https://www.whitehouse.gov/briefing-room/presidential-actions/
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Department of State, Directorate of Defense Trade Controls (DDTC)
DDTC Issues General Findings from Visits to Universities and Research Centers
April 10, 2024: The Directorate of Defense Trade Controls issued a white paper providing general findings from visiting various universities and research centers that are engaged in activities of the International Traffic in Arms Regulations from 2020 to early 2024. The paper provides general compliance commendations, including “best practices” and recommendations that the Office of Defense Trade Controls Compliance provided to the universities following each visit.
https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_public_portal_news_and_events
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Proposed Rule: DDTC Registration Fees
April 24, 2024: 89 Fed. Reg. 3119: The State Department published in the Federal Register a proposed rule to amend the International Traffic in Arms Regulations (ITAR). A link to the proposed rule is provided below.
As a brief summary, for the first time in nearly sixteen years the Department of State proposes to amend the ITAR to increase the fee amounts required for registration with the Directorate of Defense Trade Controls (DDTC). The proposed rule is necessary to account for inflation, increased operating expenses, and to provide better services to the regulated public and to our partners in the defense industrial base. The proposed amendments also include:
- A return of the fee structure to the text of the ITAR at § 122.3;
- Non-substantive movement of text from ITAR § 122.3 to § 122.2 to better organize content;
- Revision of a section heading to better describe content;
- Addition of text regarding registration discounts and how to obtain further guidance; and
- Conforming changes to brokering in ITAR part 129.
The fee increases are summarized below:
- Tier 1 registrant’s flat fee would increase from $2,250 to $3,000.
- Tier 2 registrant’s flat fee would increase from $2,750 to $4,000.
- Tier 3 registrant’s flat fee would increase from $2,750 to $4,000 and each subsequent favorable determination past the first five instead of ten, would rise from $250 to $1,100.
DDTC will accept comments on this rule through June 10, 2024.
See our detailed article on our website.
https://fdassociates.net/the-fifteen-year-freeze-in-ddtc-registration-fees-sees-a-big-thaw/
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DDTC Name And Address Changes Posted To Website
April 2 through 29, 2024: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at
- Change in Name from TRIGO Qualitaire GmbH to TRIGO ADR (Aerospace, Defense, & Rail) Germany GmbH due to corporate rebranding;
- Change in Name from TRIGO Qualitaire S.A.S. to TRIGO ADR (Aerospace, Defense, & Rail) France S.A.S. due to corporate rebranding;
- Change in Address for Boeing Defence Australia Ltd. from 150 Charlotte Street, Brisbane, QLD 4000, Australia to 123 Albert Street, Brisbane, QLD 4000, Australia;
- Change in Name from Harris Communications GmbH to L3Harris Technologies Germany GmbH due to corporate rebranding;
- Change in Name from Brammer S.A. to Rubix Polska S.A due to merger;
- Change in Address for TransDigm Inc. from 1301 East 9th Street, Suite 3000, Cleveland, OH 44114 to US Bank Centre, 1350 Euclid Avenue, Suite 1600, Cleveland, OH 44115.
- Change in Name from L-3 Communications India Private Ltd. to L3Harris Maritime & Aero Private Ltd due to corporate rebranding;
- The following KNDS N.V. entities will change their name as a result of corporate rebranding;
| Old Name | New Name |
| Nexter Systems | KNDS France |
| Nexter Munitions | KNDS Ammo France |
| NBC Sys | KNDS CBRN |
| Nexter Mechanics | KNDS France Mechanics |
| OPTSys | KNDS Optronics |
| Nexter Training | KNDS France Training |
| Nexter Robotics | KNDS France Robotics |
| Krauss-Maffei Wegmann GmbH & Co. KG | KNDS Deutschland GmbH & Co. KG |
| BTD Battle Tank Dismantling GmbH | KNDS Deutschland Battle Tank Dismantling GmbH |
| ATM ComputerSysteme GmbH | KNDS Deutschland Mission Electronics GmbH |
| DST Defence Service Tracks GmbH | KNDS Deutschland Tracks GmbH |
| DSL Defence Service Logistics GmbH | KNDS Deutschland Maintenance GmbH |
| KMW Schweisstechnik GmbH | KNDS Deutschland Steel Contructions GmbH |
| MECAR | KNDS Belgium |
| Simmel Difesa S.p.A. | KNDS Ammo Italy S.p.A. |
| WFEL Limited | to KNDS Defence UK Limited |
- Change in Name from Ball Aerospace & Technologies Corporation to BAE Systems Space & Mission Systems, Inc. due to acquisition;
- Change in Name from H.C. Starck Inc. to Materion Corporation due to acquisition;
- The following BAE Systems Saudi Development and Training Company Ltd entities will change their name as a result of a merger with Saudi Maintenance and Supply Chain Management Company Ltd (SMSCMC);
| Old Name | New Name |
| BAE Systems Saudi Development and Training Company Ltd (SDT) | BAE Systems Arabian Industries Ltd |
| BAE Systems SDT Ltd | BAE (UK) Ltd to BAE Systems Arabian Industries (Capability & Training-UK) Ltd |
| SMSCMC (UK) Ltd | BAE Systems Arabian Industries (Supply Chain-UK) |
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Newsflash:
The use of digital signatures are not acceptable for signing TAAs per DDTC licensing.
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Department of Defense, Defense Security Cooperation Agency (DSCA)
DSCA Notifies Congress of Potential FMS Sale To Ukraine
April 9, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of Ukraine has requested to buy sustainment-related articles and services for the HAWK Phase III missile system, including engineering and integration for communications and interoperability; refurbishment and system overhaul of HAWK air defense fire units; missile recertification components; tool kits; test equipment; support equipment; technical documentation; spare parts; training; U.S. Government and contractor technical and field office support; and other related elements of logistics and program support. The estimated total cost is $138 million.
The Secretary of State has determined and provided detailed justification that an emergency exists that requires the immediate sale to the Government of Ukraine of the above defense articles and services in the national security interests of the United States, thereby waiving the congressional review requirements under Section 36(b) of the Arms Export Control Act, as amended.
The principal contractors will be RTX Corporation, located in Andover, MA, and PROJECTXYZ, located in Huntsville, AL. Equipment will be supplied from a combination of U.S. Army stock, country donations, Commercial Off-the-Shelf (COTS), and new production. There are no known offset agreements proposed in connection with this potential sale.
https://www.dsca.mil/press-media/major-arms-sales/ukraine-hawk-phase-iii-missile-system-sustainment
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DSCA Notifies Congress Of Potential FMS Sale to the Kingdom of Saudi Arabia
April 10, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Kingdom of Saudi Arabia has requested to buy fifty (50) Multifunctional Information Distribution System-Low Volume Terminal (MIDS-LVT) Block Upgrade 2 (BU2) Terminals and one hundred (100) additional MIDS-LVT BU2 Retrofit Kits that will be added to a previously implemented case whose value was under the congressional notification threshold. The original Foreign Military Sales (FMS) case, valued at $12.6 million, included thirty-five (35) Multifunctional Information Distribution System Joint Tactical Radio System (MIDS JTRS) and twenty-four (24) MIDS-LVT BU2 Retrofit Kits. The Kingdom of Saudi Arabia has also requested a new FMS case that includes one hundred ninety-four (194) MIDS JTRS and thirteen (13) MIDS-LVT BU2 Terminals. This notification is for a combined total of two hundred twenty-nine (229) MIDS JTRS; sixty-three (63) MIDS-LVT BU2 Terminals; and one hundred twenty-four (124) MIDS-LVT BU2 Retrofit Kits. Also included are TacNet Tactical Radios; Low Volume Terminal Cryptographic Modules; other communications equipment; support equipment; engineering and technical support and assistance; training; and other related elements of logistics and program support. The estimated total cost is $101.1 million. The principal contractor has not been determined as there will be a competitive contractual award process after case implementation. There are no known offset agreements proposed in connection with this potential sale.
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DSCA Notifies Congress Of Potential FMS Sale to The Government of Iraq
April 15, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of Iraq has requested to buy Contractor Logistics Support (CLS) and training in support of its C-172 and AC/RC-208 aircraft fleet. Included is advising, technical, and proficiency training for Iraqi maintainers and aircrews; CLS; spare and repair parts, components, accessories, and repair and return support; minor modifications and upgrades; subscription services; overhaul and depot level maintenance and maintenance support; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $140 million. The principal contractor will be Northrop Grumman Corporation, located in Falls Church, VA. There are no known offset agreements proposed in connection with this potential sale.
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DSCA Notifies Congress Of Potential FMS Sale to The Government of Argentina
April 18, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of Argentina has requested to buy Basler BT-67 aircraft; spare engines; spares and repair parts, consumables, accessories, and repair and return services; major modifications and maintenance support; aircraft and ground handling equipment and support; unclassified publications and technical documentation; Technical Coordination Program participation fees; studies and surveys; ferry and transportation support; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $143 million. The principal contractor will be Basler Turbo Conversions located in Oshkosh, WI. There are no known offset agreements proposed in connection with this potential sale.
https://www.dsca.mil/press-media/major-arms-sales/argentina-basler-bt-67-aircraft
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DSCA Notifies Congress of Potential FMS Sale to The Government of Poland
The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of Poland has requested to buy three hundred sixty (360) Advanced Anti-Radiation Guided Missile-Extended Range (AARGM-ER) All Up Rounds (AUR); eight (8) AGM-88G AARGM-ER Guidance Sections (spares); and eight (8) AGM-88G AARGM-ER Control Sections (spares). Also included are Dummy Air Training Missiles (DATM); missile containers, software; training; support equipment; spare and repair parts; embedded Global Positioning System receiver, M-Code; publications and technical documentation; transportation, U.S. Government, and contractor engineering; technical and logistical support services; and other related elements of logistics and program support. The estimated total cost is $1.275 billion. The principal contractor will be Northrop Grumman Systems located in Falls Church, VA. There are no known offset agreements proposed in connection with this potential sale.
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DSCA Notifies Congress of Potential FMS Sale to The Government of the Netherlands
April 24, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of the Netherlands has requested to buy two hundred sixty-five (265) AGM-88G Advanced Anti-Radiation Guided Missiles – Extended Range (AARGM-ER) All Up Rounds (AUR) (includes fifteen (15) Fly-to-Buy Rounds); eight (8) AGM-88G AARGM-ER Guidance Sections (spares); and eight (8) AGM-88G AARGM-ER Control Sections (spares). Also included are Dummy Air Training Missiles (DATM), missile containers; software; training; support equipment; spare and repair parts; embedded GPS receiver, M-Code; publications and technical documentation; transportation; U.S. Government and contractor engineering; technical and logistical support services; and other related elements of logistics and program support. The estimated total cost is $700 million. The principal contractor will be Northrop Grumman Systems located in Falls Church, VA. There are no known offset agreements proposed in connection with this potential sale.
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DSCA Notifies Congress of Potential FMS Sale to The Kingdom of Saudi Arabia
April 30, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Kingdom of Saudi Arabia has requested to buy additional blanket order training for Royal Saudi Naval Forces (RSNF) that will be added to a previously implemented case whose value was under the congressional notification threshold. The original Foreign Military Sales (FMS) case, valued at $37 million ($0 in Major Defense Equipment (MDE)), included blanket order training for the RSNF, including: precision targeting, collateral damage reduction, core technical and professional development training, ship repair facility maintainer and language proficiency courses, and professional military education provided by the U.S. Navy. This notification is for the entire blanket order training with an estimated total cost of $250 million. The principal contractor(s) will be determined after contract competition and award. There are no known offset agreements proposed in connection with this sale.
https://www.dsca.mil/press-media/major-arms-sales/kingdom-saudi-arabia-blanket-order-training
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Department of Commerce – Bureau of Industry and Security (BIS)
Commerce Releases Clarifications of Export Control Rules to Restrict the PRC’s Access to Advanced Computing and Supercomputing Items and Semiconductor Manufacturing Equipment
April 4, 2024: 89 Fed. Reg. 23976: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) has published an interim final rule (IFR) revising and clarifying two interim final rules released on October 17, 2023: (1) “Export Controls on Semiconductor Manufacturing Items” (SME IFR); and (2) “Implementation of Additional Export Controls: Certain Advanced Computing Items; Supercomputer and Semiconductor End Use; Updates and Corrections” (AC/S IFR).
The rules released on October 17, 2023, reinforce the October 7, 2022, controls to restrict the People’s Republic of China’s (PRC) ability to both purchase advanced computing chips and manufacture advanced chips critical for military advantage. These rules underscore BIS’ clear focus on strategically addressing the threats to our national security posed by the PRC Government’s military-civil fusion strategy by controlling items necessary to enable the development and production of technologies, such as artificial intelligence (AI), used in military applications. The clarifications in this Interim Final Rule answer questions posed from industry and other stakeholders after the rules were released on October 17, 2023.
Highlights of this new IFR include clarifying that:
- Computers and other products incorporating integrated circuits that require export notification to BIS also require export notification; and
- Parts and components exported for ultimate incorporation into indigenous PRC Semiconductor Manufacturing Equipment (SME) require a BIS license for the initial export.
These sector-based controls, originally released on October 7, 2022, are calibrated to address, among other concerns, the PRC Government’s efforts to produce and use advanced integrated circuits. These advanced integrated circuits, produced by critical semiconductor manufacturing equipment, can be used for the next generation of advanced weapon systems. They can also be used for advanced artificial intelligence (AI) applications, which can be leveraged to enhance the speed and accuracy of military decision making, planning, and logistics; cognitive electronic warfare; radar; signals intelligence; and jamming. Advanced AI applications can also be leveraged to monitor, track, and surveil citizens and in other applications that enable human rights violations and abuses.
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Department of Commerce’s Bureau of Industry and Security (BIS) imposing additional controls to further restrict Iran’s access to low-level technologies.
April 18, 2024: In response to Iran’s unprecedented air attack on Israel, and its continued military cooperation with Russia, the Department of Commerce’s Bureau of Industry and Security (BIS) imposed additional controls to further restrict Iran’s access to low-level technologies, such as basic commercial grade microelectronics. This action will cut off a wider range of items from reaching Iran’s arsenal – including items manufactured outside the U.S. that are produced using U.S. technology. These changes build on BIS’s comprehensive export restrictions on Iran, which already include controls targeting Iran’s involvement in supplying Unmanned Aerial Vehicles (UAVs) in support of Russia’s illegal war in Ukraine.
BIS’s longstanding and expansive controls on dual-use items to Iran and more recent actions against Russia have forced these nations to use lower-level technologies for their military ambitions. Over the past two years, BIS has added controls on thousands of items to inhibit Russia and Iran’s access to necessary components for their war efforts.
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Export Control Revisions for Australia, United Kingdom, United States (AUKUS) Enhanced Trilateral Security Partnership
April 19, 2024: 89 Fed. Reg. 28594: The Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) to remove export license requirements, expand the availability of license exceptions, and reduce the scope of end-use and end-user-based license requirements for exports, reexports, and transfers (in-country) to or within Australia and the United Kingdom (UK) to enhance technological innovation among the three countries and support the goals of the AUKUS Trilateral Security Partnership.
With this rule, Australia and the UK will have nearly the same export licensing treatment under the EAR as Canada. The biggest changes to the EAR pursuant to this rule are the removal of list-based license requirements for exports, reexports, and transfers (in-country) to Australia and the UK including the removal of license requirements for national security column 1 (NS1), regional stability column 1 (RS1), and missile technology column 1 (MT1) reasons for control for the destinations of Australia and the UK. This is an important change as it removes licensing requirements for exports of ALL 600 Series ECCN items to Australia and the UK and many 9×515 satellite-related license requirements to Australia and the UK.
Other minor changes to the EAR pursuant to this rule include the applicability of License Exceptions under §§ 740.15, 740.16, and 740.17 (License Exceptions Aircraft, Vessels and Spacecraft (AVS), Additional Permissive Reexports (APR), and Encryption Commodities, Software, and Technology (ENC), respectively), for use to Australia, Canada, and the UK.
BIS also exempted Australia and the UK alongside Canada from unilateral reporting requirements for thermal imaging camera transactions.
Consistent with recent changes to the EAR concerning thermal imaging cameras, the interim final rule removes military end-use and end-user-based license requirements for exports, reexports, and transfers (in-country) of certain cameras, systems, or related components detailed under § 744.9(a)(1)(i) and (a)(1)(iii) of the EAR which previously only applied to Canada. The exception now applies to Australia, Canada, and the UK.
BIS requires certain transactions involving Canada to be reported in Electronic Export Information (EEI) filings, and these changes now include Australia and the UK for clarity in this requirement. Effective May 1, 2023, No License Required License Code C33 is in effect for 600 Series and other controlled items exported to Australia and the UK.
See article posted on our website for more details.
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Export Control Measures Under the Export Administration Regulations (EAR) To Address Iranian Aggression Against Israel and Military Support for Russia
April 22, 2024: 89 Fed. Reg. 2024: The Bureau of Industry and Security (BIS) made changes to the Export Administration Regulations (EAR) to expand the scope of items that require a license for export and reexport to Iran; this rule also expands the scope of the Russia/Belarus/Temporarily occupied Crimea region of Ukraine Foreign Direct Product (FDP) rule and the Iran FDP rule. Certain foreign-made items located outside of the United States are subject to the EAR because they meet criteria specified under one of the FDP rules under the EAR. This final rule expands the product scope of two of the FDP rules to make additional items subject to the EAR and imposes a license requirement when they are reexported or exported from abroad to Iran, Russia, Belarus, or the Temporarily occupied Crimea region of Ukraine. Prior to this rule, BIS had not controlled all foreign transactions involving items covered by this rule, but in light of recent events and the need to fully leverage EAR controls to address U.S. national security and foreign policy interests, these additional controls are now warranted under the EAR.
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Department of Commerce Establishes New Humanitarian License Exception for Certain Medical Devices
April 25, 2024: 89 Fed Reg 33224: the U.S. Commerce Department’s Bureau of Industry and Security (BIS) published a final rule introducing the new License Exception MED, which enables delivery of humanitarian medical devices to the citizens of Russia, Belarus, and the temporarily occupied areas of Ukraine, consistent with the longstanding practice of authorizing transfers of life-saving medical devices to civilian populaces. At the same time, BIS is maintaining its sweeping restrictions on the export, reexport, or transfer (in-country) of items that could aid Russia’s brutal full-scale invasion of Ukraine.
Specifically, License Exception MED authorizes certain exports, reexports, and transfers (in country) of the following items that are designated as EAR99 to Russia, Belarus, the temporarily occupied Crimea region of Ukraine, and the covered regions of Ukraine: low-level “medical devices” and related low-level “parts,” “components,” “accessories,” and “attachments” that are exclusively for use in or with “medical devices”.
https://www.bis.doc.gov/index.php/policy-guidance/countryguidance/russia-belarus and
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The Department of Commerce, Bureau of Industry and Security Amended The EAR Regarding Firearms And Related Items
April 30, 2024: 89 Fed. Reg. 34680: In this interim final rule (IFR), the Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) to enhance the control structure for firearms and related items. These changes will better protect U.S. national security and foreign policy interests, which include countering the diversion and misuse of firearms and related items and advancing human rights. This rule identifies semi-automatic firearms under new Export Control Classification Numbers (ECCNs); 0A506 and 0A507 adds additional license requirements for Crime Control and Detection (CC) items, thereby resulting in additional restrictions on the availability of license exceptions for most destinations; amends license review policies so that they are more explicit as to the nature of review that will accompany different types of transactions and license exception availability (including adding a new list of high-risk destinations); identifies 36 countries that will be subject to a policy of denial; updates and expands requirements for support documentation submitted with license applications; and better accounts for the import documentation requirements of other countries (such as an import certificate or other permit prior to importation) when firearms and related items are authorized under a BIS license exception. BIS is publishing this rule as an IFR to solicit comments from the public on additional changes to export controls on firearms and related items that would better protect U.S. national security and foreign policy interests. The IFT will become effective May 30, 2024.
Prior to this Interim Final Rule, ECCN 0A501 controlled rifles, pistols, and related “parts,” “components,” and certain “attachments,” and “accessories” on the CCL, while ECCN 0A502 controlled shotguns and related “parts,” “components,” and certain “attachments,” and “accessories.” Neither ECCN distinguished between non-automatic and semi-automatic firearms. BIS was unable to readily identify what share of firearms exports to a country were semi-automatic rifles versus non-automatic pistols because they were controlled under the same item paragraph of ECCN 0A501. Accordingly, BIS was unable to readily disaggregate and review licensing and export data for specific types of end-item firearms or specific “parts,” “components,” “attachments” and “accessories” of most concern. This data gap limited BIS’s ability to efficiently evaluate the export, reexport, transfer (in-country) and diversion of specific types of rifles, pistols, shotguns, and certain “parts,” “components,” “attachments,” and “accessories” that may pose risks to U.S. national security and foreign policy. However, such information is useful to assess the risk of diversion.
To better track the export, reexport, transfer (in-country) and diversion of different types of firearms and related items, this Interim Final Rule adds four new ECCNs to the CCL. ECCN 0A506 controls semi-automatic rifles, ECCN 0A507 controls semi-automatic pistols, ECCN 0A508 controls semi-automatic shotguns, and ECCN 0A509 controls certain “parts,” “components,” devices, “accessories,” and “attachments” for items controlled under ECCNs 0A506, 0A507, and 0A508. The creation of these four new ECCNs will enable BIS to better track and more readily identify exports of end-item semi-automatic firearms and shotguns and certain related “parts,” “components,” “accessories,” and “attachments” of concern when reviewing the Electronic Export Information (EEI) that exporters file in the Automated Export System (AES). Pursuant to § 758.1(g)(1) and (2), an EEI must specify the ECCN of the exported item.
https://www.federalregister.gov/documents/2024/04/30/2024-08813/revision-of-firearms-license-requirements and https://www.federalregister.gov/documents/search?conditions%5Bpublication_date%5D%5Bgte%5D=03%2F30%2F2024&conditions%5Bterm%5D=EAR
In a separate action, BIS has begun sending out letters advising exporters that their existing licenses for non-government end-users in 36 countries are revoked as of July 1, 2024.
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Department of Commerce and Department of Justice
The Departments Of Justice And Commerce Launch The Disruptive Technology Protection Network With Japan And The Republic Of Korea
April 26, 2024: the U.S. Departments of Justice and Commerce launched the Disruptive Technology Protection Network with Japan and the Republic of Korea (ROK), hosting the first high-level trilateral summit in Washington, D.C. The creation of this network follows an August 2023 Camp David summit between the leaders of the three countries, during which they committed to expanding collaboration on technology protection measures and build connections between representatives of the U.S. Disruptive Technology Strike Force and Japan and ROK counterparts. The Disruptive Technology Protection Network expands information-sharing and the exchange of best practices across the three countries’ enforcement agencies.
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U.S. Census Bureau
April 18, 2024: Tips on How to Resolve AES Response Message
When a shipment is filed to the AES, a system response message is generated and indicates whether the shipment has been accepted or rejected. If the shipment is accepted, the AES filer receives an Internal Transaction Number (ITN) as confirmation. Though the shipment is accepted, the filer may still receive a Verify Message, Compliance Alert, Informational Message or Warning Message along with their ITN. However, if the shipment is rejected, a Fatal Error notification is received and must be corrected to receive a valid ITN.
To help you take the appropriate action for the different AES Response Messages, here are some tips on how to address the most frequent messages that were generated in AES for this month.
Response Code: 170
Narrative: Air Waybill Format: NNN-NNNNNNNN
Severity: Fatal
Reason: The Transportation Reference Number reported for this Air shipment was not in the correct format.
Resolution: A number identifying the carrier’s master air waybill may be declared on an air shipment. When reported, a master air waybill number must be reported in the following format: ‘NNN-NNNNNNNN’ (where ‘N’ = a numeric value).
Verify the Transportation Reference Number, correct the shipment and resubmit.
Response Code: 336
Narrative: Ultimate Consignee State Cannot be Reported
Severity: Fatal
Reason: The Country of Destination reported does not allow a State Code.
Resolution: Report a State Code only if the Country of Destination is the United States or Mexico.
Verify the Ultimate Consignee Country Code and State Code, correct the shipment and resubmit.
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NEW BIS LICENSE TYPES C69 License Exception (MED) – for exports authorized under License Exception Medical Devices (MED)
April 30, 2024: On Monday, April 29, 2024, the Department of Commerce, Bureau of Industry and Security (BIS) published a final rule, Amendment to Existing Controls on Russia and Belarus Under the Export Administration Regulations (EAR) Adding New License Exception Medical Devices (MED); Corrections with an effective date of April 29, 2024. This final rule established a new License Exception Medical Devices (MED) in § 740.23 of the Export Administrations Regulations (EAR), 15 C.F.R. parts 730 – 774. This license exception as specified under the paragraph (a) (Scope) authorizes the export, reexport, and transfer (in-country) of “medical devices” designated as EAR99 to or within Russia, Belarus, the temporarily occupied Crimea region of Ukraine, or the covered regions of Ukraine (as specified in § 746.6(a)(2) of the EAR). Paragraph (a) directs exporters, reexporters, and transferors to see Supplement no. 3 to part 774 – Statements of Understanding under paragraph (a) (Statement of Understanding ‑ medical equipment) for guidance on classifying medical equipment and the definition of “medical device” in § 772.1 of the EAR.
Paragraph (a) also specifies that License Exception MED authorizes the export, reexport, or transfer (in country) to or within Russia, Belarus, the temporarily occupied Crimea region of Ukraine, or the covered regions of Ukraine of “parts,” “components,” “accessories,” and “attachments” designated as EAR99 that are exclusively for use in or with “medical devices” designated as EAR99. For “parts,” “components,” “accessories,” and “attachments” authorized under License Exception MED, such replacement “parts,” “components,” “accessories,” and “attachments” may only be exported, reexported, or transferred (in-country) if they also meet the additional requirements under paragraphs (a)(1) and (2) of § 740.23.
Exports, reexports, and transfers (in-country) authorized under License Exception MED must not be restricted under § 740.23(b) (Restrictions), which restricts “proscribed persons” and any item destined to a “production” “facility” or when you have “knowledge” that the item is intended to develop or produce items. Exports, reexports, and transfers (in-country) authorized under License Exception MED must also comply with the verification requirements specified in paragraph (c) (Verification) and the recordkeeping requirements specified in paragraph (d) Recordkeeping and review or inspection of records.
As a result of these actions, the following changes will be made to the AES in order for exporters and authorized agents to successfully report electronic export information in the AES.
New License Code C69 License Exception (MED)
An update has been made to AES to create License Type Code C69 MED.
An update has been made to AES to create new License Code C69 “License Exception Medical Devices” (MED), which authorizes certain exports, reexports of any item “medical devices” designated as EAR99 and “parts,” “components,” “accessories,” and “attachments” designated as EAR99 that are exclusively for use in or with “medical devices” designated as EAR99.
The full terms of License Exception MED are described in § 740.23.
AES filers must adhere to the following new reporting when using C69 (MED) to prevent the return of fatal errors from AES:
- Report License Code: C69 MED.
- Allowable ECCNs: No ECCNs are allowed. Only EAR99 is allowable.
- Allowable countries: Belarus, Russia, and Ukraine. (Note that although all of Ukraine is specified as an allowable country in AES, that License Exception MED is only needed to authorize exports exports, reexports, and transfers (in-country) to or within temporarily occupied Crimea region of Ukraine, or the covered regions of Ukraine (as specified in § 746.6(a)(2) of the EAR)).
- Allowable Export Information Codes: All except UG
- Allowable Modes of Transportation: All except ‘70’ (Fixed Transport)
https://www.federalregister.gov/documents/2024/04/29/2024-09076/amendment-to-existing-controls-on-russia-and-belarus-under-the-export-administration-regulations-ear?utm_campaign=&utm_content=&utm_medium=email&utm_source=govdelivery and https://www.cbp.gov/document/guidance/aestir-appendix-f-license-and-license-exemption-type-codes?utm_campaign=&utm_content=&utm_medium=email&utm_source=govdelivery
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.
Fines and Penalties
April 4, 2024: Two Russian nationals pleaded guilty to conspiracy to violate the Export Control Reform Act (ECRA) in connection with a scheme to acquire and unlawfully export controlled aviation technology to Russian end users. One of the defendants, Oleg Sergeyevhich Patsulya, also pleaded guilty to conspiracy to commit international money laundering.
According to court documents, Patsulya and Vasilii Sergeyevich Besedin, both of whom reside in Miami-Dade County, Florida, conspired with each other and several others to evade U.S. export laws and regulations to send aircraft technology from the United States to Russia. According to court documents, the unlawful scheme began in or about May 2022, in the wake of Russia’s most recent invasion of Ukraine and enhanced U.S. sanctions on Russia.
Both Besedin and Patsulya pleaded guilty to conspiracy to export items from the United States without a license in violation of the Export Control Reform Act, which carries a maximum penalty of 20 years in prison. Patsulya additionally pleaded guilty to one count of conspiracy to commit international money laundering, which carries a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Sentencing is scheduled for June 17.
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April 5, 2024: 89 Fed. Reg. 23967: On April 21, 2022, an order denying Aviastar export privileges was signed for a period of 180 days on the ground that issuance of the order was necessary in the public interest to prevent an imminent violation of the Regulations. The temporary denial order was subsequently renewed on October 17, 2022, April 14, 2023, and October 6, 2023.
On March 11, 2024, BIS, through OEE, submitted a written request for a fourth renewal of the TDO. The written request was made more than 20 days before the TDO’s scheduled expiration and, given the temporary suspension of international mail service to Russia, OEE has attempted to deliver a copy of the renewal request to Aviastar by alternative means. No opposition to the renewal of the TDO has been received.
The Office of Export Enforcement (“OEE”) renewed the temporary denial order (“TDO”) issued in this matter on April 14, 2023. It was found that the renewal of this order is necessary in the public interest to prevent an imminent violation of the Regulations and that renewal for an extended period is appropriate because Aviastar—TU’s (“Aviastar”) has engaged in a pattern of repeated, ongoing and/or continuous apparent violations of the EAR.
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April 15, 2024: Ross Roggio (Roggio) was sentenced to 70 years in prison for torturing an Estonian citizen in 2015 in the Kurdistan region of Iraq and for the illegal export of weapons parts and related services.
According to court documents and evidence presented at trial, Roggio, 55, of Stroudsburg, arranged for Kurdish soldiers to abduct and detain the victim at a Kurdish military compound, where Roggio suffocated the victim with a belt, threatened to cut off one of his fingers, and directed Kurdish soldiers to repeatedly beat, choke, tase, and otherwise physically and mentally abuse the victim over a 39-day period. The victim was an employee at a weapons factory that Roggio was developing in the Kurdistan region of Iraq that was intended to manufacture automatic rifles and pistols.
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April 16, 2024: An indictment was unsealed charging Syria national Mohamad Deiry and Lebanese national Samer Rayya, both principals of an Iraq-based arms company, Black Shield Ltd., with conspiring to export munitions from the United States to Sudan and Iraq without the necessary licenses and approvals, in violation of the Arms Export Control Act. Additionally, Deiry and Rayya were charged with conspiring to commit money laundering in furtherance of their illicit procurement activities.
Deiry and Rayya are charged with conspiracy to unlawfully export defense articles from the United States, which carries a maximum statutory penalty of five years in prison; and conspiracy to engage in international money laundering, which carries a maximum statutory penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
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April 19, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with SCG Plastics Co., Ltd. (“SCG Plastics”), part of a multinational enterprise headquartered in Bangkok, Thailand. SCG Plastics has agreed to pay $20,000,000 to settle its potential civil liability for 467 apparent violations of OFAC sanctions on Iran. From 2017 to 2018, SCG Plastics caused U.S. financial institutions to process $291 million in wire transfers for sales of Iranian origin polyethylene resin manufactured by a joint venture in Iran. The $20,000,000 settlement amount reflects OFAC’s determination that SCG Plastics’ apparent violations were egregious and, with the exception of certain transactions, were not voluntarily self-disclosed.
https://ofac.treasury.gov/recent-actions/20240419_33 and
https://ofac.treasury.gov/media/932836/download?inline and
https://ofac.treasury.gov/media/932841/download?inline
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April 25, 2024: The Justice Department announced the unsealing of an indictment charging 10 defendants with conspiring to violate the International Economic Emergency Powers Act (IEEPA) for their roles in a scheme to evade U.S. sanctions imposed on Petróleos de Venezuela, S.A. (PDVSA), the Venezuelan state-owned oil company, in January 2019. One of the defendants, George Clemente Semerene Quintero, 60, was arrested on April 19, 2024, upon arrival at the Miami International Airport.
As alleged in the indictment, between January 2019 and December 2021, after learning of the sanctions imposed on PDVSA, the defendants devised a scheme to illegally procure aircraft parts, including Honeywell Turbofan Engines, from the United States to service PDVSA’s aircraft fleet in Venezuela, in violation of U.S. sanctions and export controls. To carry out this scheme, the defendants concealed from U.S. companies that the goods were destined for Venezuela and PDVSA by exporting them to third parties in other countries, including Novax Group SA (Novax), a Costa Rican company, and Aerofalcon SL (Aerofalco), a Spanish company.
According to court documents, the defendants include:
- Four individuals associated with PDVSA: Gilberto Ramon Araujo Prieto, 54, a PDVSA air transport manager and colonel in the Venezuelan military; Guillermo Ysrael Marval Rivero, 62, and Fernando Jose Blequett Landaeta, 52, both PDVSA air transport managers and logistics analysts responsible for procurement; and Semerene, PDVSA’s head of logistics, procurement and warehousing.
- Four individuals associated with Novax: Luis Alberto Duque Carvajal, 63, of San Jose, Costa Rica, the owner of Novax; Melvin Aleman Espinoza, 39, Novax’s director of operations; Mikhail Largin, 60, Novax’s director of special projects; and Pedro Elias Sucre Salazar, 58, a Novax employee located in Venezuela.
- Two individuals associated with Aerofalcon: Juan Carlos Gonzalez Perez, 60, the owner of Aerofalcon; and Juan David Guerra Viera, 54, a director for Aerofalcon.
The defendants are charged with conspiring to violate IEEPA, and if convicted, face a maximum penalty of 20 years in prison. Defendants Duque, Aleman, Sucre, Gonzalez, and Guerra Viera are additionally charged with submitting false or misleading export information and smuggling of goods, which respectively carry maximum penalties of five and 10 years in prison.
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April 25, 2024: An indictment was unsealed charging two Chinese nationals, Han Li, also known as Anson Li, 44, and Lin Chen, 64, with crimes related to a conspiracy to illegally export U.S. technology, including a machine manufactured by a California-based company that is used to process silicon wafer microchips, to prohibited end users in China, in violation of the International Emergency Economic Powers Act (IEEPA) and Export Administration Regulations (EAR). Chen was arrested in Chicago yesterday.
Li and Chen are each charged with the following offenses, and if convicted, face maximum penalties as indicated: Conspiracy to violate IEEPA, up to 20 years in prison and a $1 million fine; false electronic export information activities, up to five years in prison and a $250,000 fine; smuggling, up to 10 years in prison and a $250,000 fine; and IEEPA violations, up to 20 years in prison and a $1 million fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
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April 30, 2024: Nikolay Grigorev, 36, of Brooklyn, pleaded guilty to conspiring to defraud the United States for his role in an illicit export control scheme to ship electronic components from the United States to companies affiliated with the Russian military. Co-defendants Nikita Arkhipov and Artem Oloviannikov remain at large.
As a result of the guilty plea, Grigorev faces a maximum penalty of five years in prison. A sentencing hearing has not yet been scheduled. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Sanctions
Department of Commerce, Bureau of Industry and Security (BIS)
April 11, 2024: 89 Fed Reg. 25503: The Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) by adding 11 entries to the Entity List, under the destinations of the Peoples Republic of China (China) (6), the Russian Federation (Russia) (3), and the United Arab Emirates (UAE) (2). These entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. This rule also modifies one existing entity on the Entity List under the destination of China.
China
- Beijing Anwise Technology Co., Ltd.;
- Jiangxi Xintuo Enterprise Co., Ltd.;
- Linkzol Technology Co., Ltd.;
- Shenzhen Jiasibo Technology Co., Ltd.;
- Sitonholy Co., Ltd.; and
- Xi’an Like Innovative Information Technology Co., Ltd.
Russia
- Aerosila JSC SPE;
- Delta-Aero LLC; and
- JSC ODK-Star.
United Arab Emirates
- Khalaj Trading LLC; and
- Mahdi Khalaj Amirhosseini.
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Department of the Treasury, Office of Foreign Assets Control (OFAC)
April 4, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) took additional action against Iranian military revenue generation, targeting Oceanlink Maritime DMCC for facilitating the shipment of Iranian commodities on behalf of Iran’s Armed Forces General Staff (AFGS) and Ministry of Defense and Armed Forces Logistics (MODAFL). OFAC is also identified 13 vessels managed by Oceanlink Maritime DMCC as blocked property. The Oceanlink Maritime DMCC-managed vessel HECATE recently loaded Iranian commodities valued at over $100 million dollars via a ship-to-ship (STS) transfer from another sanctioned tanker, the DOVER, on behalf of Iran’s Sepehr Energy Jahan Nama Pars (Sepehr Energy), which OFAC sanctioned in November 2023 for its role selling Iranian commodities for the AFGS and MODAFL.
The following entity has been added to OFAC’s SDN List:
- Oceanlink Maritime DMCC of The United Arab Emirates.
The following vessels have been added to OFAC’s SDN List:
- Anthea (D6A3314) Crude Oil Tanker Comoros flag; Vessel Registration Identification IMO 9281683; MMSI 620999315 (vessel);
- Baxter (V3TF5) Oil Products Tanker Belize flag; Vessel Registration Identification IMO 9282522; MMSI 312513000 (vessel);
- Boreas (D6A3315) Crude Oil Tanker Comoros flag; Vessel Registration Identification IMO 9248497; MMSI 620999316 (vessel);
- Calypso Gas (V2YC2) LPG Tanker Antigua and Barbuda flag; Vessel Registration Identification IMO 9131101; MMSI 304563000 (vessel);
- Cape Gas (D6A2739) LPG Tanker Comoros flag; Vessel Registration Identification IMO 9002491; MMSI 620739000 (vessel);
- Demeter (HPGV) Oil Products Tanker Panama flag; Vessel Registration Identification IMO 9258674; MMSI 370921000 (vessel);
- Elisa (V3RZ8) Crude Oil Tanker Belize flag; Vessel Registration Identification IMO 9256468; MMSI 312038000 (vessel);
- Glaucus (D6A3421) Crude Oil Tanker Comoros flag; Vessel Registration Identification IMO 9337389; MMSI 620999422 (vessel);
- Hebe (D6A3378) Crude Oil Tanker Comoros flag; Vessel Registration Identification IMO 9259185; MMSI 620999378 (vessel);
- Hecate (D6A3379) Crude Oil Tanker Comoros flag; Vessel Registration Identification IMO 9233753; MMSI 620999379 (vessel);
- Meraki (V2YB7) Crude Oil Tanker Antigua and Barbuda flag; Vessel Registration Identification IMO 9194139; MMSI 304552000 (vessel);
- Oceanus Gas (D6A3372) LPG Tanker Comoros flag; Vessel Registration Identification IMO 9397080; MMSI 620999373 (vessel); and
- Ourea (E5U5002) LPG Tanker Cook Islands flag; Vessel Registration Identification IMO 9350422; MMSI 518999021 (vessel).
https://ofac.treasury.gov/recent-actions/20240404 and https://ofac.treasury.gov/recent-actions?page=0
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April 12, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) published a Determination for Prohibitions Related to Imports of Aluminum, Copper, and Nickel of Russian Federation Origin, and a Determination for Prohibitions on Certain Services for the Acquisition of Aluminum, Copper, or Nickel of Russian Federation Origin.
OFAC also issued Russia-related General License 13I, “Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024”.
General License 13I: 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, certifications, or tax refunds 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.
OFAC also issued five new, Russia-related Frequently Asked Questions (FAQs 1168 – 1172)
Question 1168: What action did Treasury take on April 12, 2024 with regards to aluminum, copper, and nickel of Russian Federation origin?
Answer: On December 6, 2023, and February 24, 2024, the G7 Leaders issued statements signaling their intent to reduce Russia’s revenues from metals. On April 12, 2024, in coordination with the United Kingdom, the United States issued two new prohibitions that will further disrupt the revenue that Russia earns from its export of aluminum, copper, and nickel of Russian Federation origin, including using U.S. global metal exchanges.
Question 1169: What is prohibited by the determination “Prohibitions on Certain Services for the Acquisition of Aluminum, Copper, or Nickel of Russian Federation Origin” pursuant to Executive Order (E.O.) 14071 (the “Metals Services Determination”)?
Answer: The Metals Services Determination prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of the following categories of services to any person located in the Russian Federation: warranting services for aluminum, copper, or nickel of Russian Federation origin on a global metal exchange; and services to acquire aluminum, copper, or nickel of Russian Federation origin as part of the physical settlement of a derivative contract (collectively, “Covered Metals Acquisition Services”). This determination does not apply to services related to aluminum, copper, or nickel of Russian Federation origin that was produced prior to April 13, 2024.
Question 1170: For the purposes of the determination “Prohibitions Related to Imports of Aluminum, Copper, and Nickel of Russian Federation Origin” pursuant to Executive Order (E.O.) 14068, as amended by E.O. 14114, (the “Metals Import Determination”) and the determination “Prohibitions on Certain Services for the Acquisition of Aluminum, Copper, or Nickel of Russian Federation Origin” pursuant to Executive Order (E.O.) 14071 (the “Metals Services Determination”), what is meant by the terms “aluminum,” “nickel,” and “copper”?
Answer: For the purposes of the Metals Import Determination and the Metals Services Determination, OFAC anticipates publishing regulations defining “aluminum,” “nickel,” and “copper” to include articles or products defined at the following Harmonized Tariff Schedule of the United States (HTSUS) chapter headings:
- “Aluminum”: defined at HTSUS Chapter 76.
- “Nickel”: defined at HTSUS Chapter 75.
- “Copper”: defined at HTSUS Chapter 74.
Question 1171: Do the determinations “Prohibitions Related to Imports of Aluminum, Copper, and Nickel of Russian Federation Origin” pursuant to Executive Order (E.O.) 14068, as amended by E.O. 14114, (the “Metals Import Determination”) and the determination “Prohibitions on Certain Services for the Acquisition of Aluminum, Copper, or Nickel of Russian Federation Origin” pursuant to Executive Order (E.O.) 14071 (the “Metals Services Determination”) apply to aluminum, copper, or nickel that has been incorporated or substantially transformed into other products outside of the Russian Federation?
Answer: The term “Russian Federation origin” excludes “any Russian Federation origin good that has been incorporated or substantially transformed into a foreign-made product.”
Question 1172: Does the determination “Prohibitions on Certain Services for the Acquisition of Aluminum, Copper, or Nickel of Russian Federation Origin” pursuant to Executive Order (E.O.) 14071 (the “Metals Services Determination”) impose new prohibitions on banks acting as intermediaries for payments related to Russian metals?
Answer: No. The processing, clearing, or sending of payments related to Russian metals by a U.S. bank on behalf of non-U.S. persons is not prohibited by the Metals Services Determination where the bank: (1) is operating solely as an intermediary; and (2) does not have any direct relationship with the person providing a service covered by the Metals Services Determination (i.e., the person is a non-account party) as it relates to the relevant transaction. Thus, the Metals Services Determination does not impose any new prohibitions or requirements relating to the processing, clearing, or sending of payments by intermediary banks.
https://ofac.treasury.gov/recent-actions/20240412_33 and
https://home.treasury.gov/news/press-releases/jy2249 and
https://ofac.treasury.gov/media/932796/download?inline and
https://ofac.treasury.gov/media/932801/download?inline and
https://ofac.treasury.gov/media/932806/download?inline and
https://ofac.treasury.gov/faqs/added/2024-04-12 and
https://ofac.treasury.gov/media/932801/download?inline
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April 12, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action against Hamas, targeting Gaza- and Lebanon-based leaders of the terrorist group’s offensive cyber and unmanned aerial vehicle (UAV) operations. Concurrent with this action, the European Union is imposing sanctions targeting Hamas.
The following individuals have been added to OFAC’s SDN List:
- Abu Shanab, William of Lebanon;
- Al-Kahlut, Hudhayfa Samir ‘Abdallah of Palestine;
- ‘Azzam, Khalil Muhammad of Palestine; and
- Farhat, Bara’a Hasan of Palestine.
https://home.treasury.gov/news/press-releases/jy2248 and https://ofac.treasury.gov/recent-actions/20240412
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April 15, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Venezuela-related General License 50 “Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After August 13, 2024.”
General License 50: On or after August 13, 2024, all transactions related to, the provision of financing for, and other dealings in the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond that would be prohibited by subsection l(a)(iii) of Executive Order (E.O.) 13835 of May 21, 2018, as amended by E.O. 13857 of January 25, 2019, and incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized.
https://ofac.treasury.gov/recent-actions/20240415 and https://ofac.treasury.gov/media/932811/download?inline
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April 15, 2024: the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 12 entities and 10 individuals pursuant to Executive Order (E.O.) 14038. This action builds on U.S. sanctions imposed in response to Belarus’s fraudulent August 2020 election, as well as President Alyaksandr Lukashenka’s (Lukashenka) support for Russia’s illegal full-scale invasion of Ukraine. This action sustains U.S. financial pressure on the Lukashenka regime for its continuing support for Russia’s war against Ukraine and the financial benefit it derives from this activity.
The individuals and entities OFAC targeted include six revenue-generating state-owned enterprises (SOEs) and one entity and five individuals involved in facilitating transactions for a U.S.-designated major Belarusian defense sector enterprise. OFAC is additionally targeting five entities and five individuals involved in a global arms network doing business with a U.S.-designated Belarusian defense firm.
The following individuals have been added to OFAC’s SDN List:
- Akisianchuk, Aliaksandra of Belarus;
- Ali, Alhaitham Al of Slovakia;
- Braim, Dmitry of Belarus;
- Charheika, Siarhei of Belarus;
- Deiry, Mohamad Majd of Syria;
- Mikhaltsou, Dzmitry of Belarus;
- Protopovich, Tatyana of Belarus;
- Rayya, Samer of Lebanon;
- Yagmur, Nora of Sweden; and
- Yurchik, Oleg of Belarus.
The following entities have been added to OFAC’s SDN List:
- Black Shield Company For General Trading LLC of Iraq;
- Centuronic Ltd of Cyprus;
- Joint Stock Company Communication Equipment of Belarus;
- JSC Agat-System of Belarus;
- JSC Niievm of Belarus;
- LLC Innotech Solutions of Belarus;
- OJSC Agat-Control System-Managing Company of Geoinformation of Belarus;
- Open Joint Stock Company Stankgomel of Belarus;
- Phoenix Lines S.R.O of Slovakia ;
- Rayya Danismanlik Hizmetleri Limited Sirketi of Belarus;
- Group Airlines LTD of Cyprus; and
- Shenzen 5G High-Tech Innovation Co., of China.
https://ofac.treasury.gov/recent-actions/20240415 and https://home.treasury.gov/news/press-releases/jy2251
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April 16, 2024: 89 Fed. Reg. 27386: The Office of Foreign Assets Control (OFAC) issued a final rule to remove the Zimbabwe Sanctions Regulations, 31 CFR part 541, from the Code of Federal Regulations. OFAC took this action because the national emergency on which part 541 was based was terminated by the President on March 4, 2024.
https://ofac.treasury.gov/media/932816/download?inline and
https://ofac.treasury.gov/recent-actions/20240416
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April 17, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Venezuela-related General License 44A, “Authorizing the Wind Down of Transactions Related to Oil or Gas Sector Operations in Venezuela.”
General License 44A: All transactions prohibited by the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), including transactions involving Petróleos de Venezuela, S.A. (PdVSA) or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest (collectively, “PdVSA Entities”), that are ordinarily incident and necessary to the wind down of any transaction related to oil or gas sector operations in Venezuela previously authorized by Venezuela General License 44 are authorized through 12:01 a.m. eastern daylight time May 31, 2024.
https://ofac.treasury.gov/media/932826/download?inline and https://ofac.treasury.gov/recent-actions/20240417
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April 18, 2024: In response to Iran’s unprecedented attack on Israel on April 13, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) targeted 16 individuals and two entities enabling Iran’s UAV production, including engine types that power Iran’s Shahed variant UAVs, which were used in the April 13 attack. These actors work on behalf of Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), its UAV production arm, Kimia Part Sivan Company (KIPAS), and other Iranian manufacturers of UAVs and UAV engines. OFAC also designated five companies in multiple jurisdictions providing component materials for steel production to Iran’s Khuzestan Steel Company (KSC), one of Iran’s largest steel producers, or purchasing KSC’s finished steel products. Iran’s metals sector generates the equivalent of several billion dollars in revenue annually, with the majority coming from steel exports.
The following individuals have been added to OFAC’s SDN List:
- Abutalebi, Ali Asghar of Iran;
- Abutalebi, Mohammad Sadegh of Iran;
- Al-Taf, Ali Asghar of Iran;
- Arambuenezhad, Hasan of Iran;
- Azizkhani Esma’il, Sepahan of Iran;
- Dehghan, Majid of Iran;
- Ebrahimi Forushani, Hamid Hajji of Iran;
- Fatehi, Mohammad Sadegh of Iran;
- Moshkani, Abolfazl Ramazanzadeh of Iran;
- Naghneh, Mehdi Ghaffari of Iran;
- Nahar Dani, Reza of Iran;
- Najafi Ali Habibi of Iran;
- Ramsheh, Ali Reza Nurian of Iran;
- Sartaji, Abbas of Iran;
- Turanlu, Mohsen Sayyadi of Iran; and
- Zavarki, Hadi Jamshidi of Iran.
The following entities have been added to OFAC’s SDN List:
- Aseman Pishraneh Co. Ltd of Iran;
- Bahman Diesel Co. of Iran;
- Fateh Aseman Sharif Company of Iran;
- Good Run Limited of Iran;
- HSF DIS Ticaret Limited Sirketi of Turkey;
- Iean Chassis Manufacturing Co of Iran;
- Iran Docharkh Co. of Iran;
- Kara Industrial Trading GMBH of Germany;
- Magellanic Phoenix Marine and Trading of China; and
- PSI DMCC of United Arab Emirates.
https://ofac.treasury.gov/recent-actions/20240418 and https://ofac.treasury.gov/recent-actions?page=0
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April 19, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on two entities for their roles in establishing fundraising campaigns on behalf of Yinon Levi (Levi) and David Chai Chasdai (Chasdai), two violent extremists who were sanctioned on February 1, 2024 in connection with violence in the West Bank. The fundraising campaigns established by Mount Hebron Fund for Levi and by Shlom Asiraich for Chasdai generated the equivalent of $140,000 and $31,000, respectively.
The following individual has been added to OFAC’s SDN List:
- Gopstein, Ben-Zion of Israel.
The following entities have been added to OFAC’s SDN List:
- Granpect Co. Ltd. of China;
- Mount Hebron Fund of Israel;
- Shlom Asiraich of Israel;
- Tianjin Creative Source International Trade Co Ltd of China; and
- Xi’an Longde Technology Development Company Limited of China
https://home.treasury.gov/news/press-releases/jy2281 and https://ofac.treasury.gov/recent-actions/20240419
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April 19, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 94, “Authorizing Transactions Involving OWH SE i.L. (Formerly Known as VTB Bank Europe SE).”
General License 94: All transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR) or the Ukraine-/Russia-Related Sanctions Regulations, 31 CFR part 589 (URSR), involving OWH SE i.L. (formerly known as VTB Bank Europe SE), or any entity in which OWH SE i.L. owns, directly or indirectly, a 50 percent or greater interest (“OWH SE i.L. Entities”), are authorized.
https://ofac.treasury.gov/media/932831/download?inline and https://ofac.treasury.gov/recent-actions/20240419
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April 23, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two companies and four individuals involved in malicious cyber activity on behalf of the Iranian Islamic Revolutionary Guard Corps Cyber Electronic Command (IRGC-CEC). These actors targeted more than a dozen U.S. companies and government entities through cyber operations, including spear phishing and malware attacks. In conjunction with this action, the U.S. Department of Justice and the Federal Bureau of Investigation unsealed an indictment against the four individuals for their roles in cyber activity targeting U.S. entities.
The following individuals have been added to OFAC’s SDN List:
- Haruni, Hosein Mohammad of Iran;
- Nasab, Alireza Shafie of Iran;
- Rahman, Reza Kazemifar of Iran; and
- Salmani, Komeil Baradaran of Iran.
The following entities have been added to OFAC’s SDN List:
- Dadeh Afzar Arman of Iran; and
- Mehrsam Andisheh Saz Nik of Iran.
https://www.justice.gov/opa/pr/justice-department-charges-four-iranian-nationals-multi-year-cyber-campaign-targeting-us and https://home.treasury.gov/news/press-releases/jy2292
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April 23, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two leaders of al-Qa’ida-aligned terrorist group Jama’at Nusrat al-Islam wal-Muslimin (JNIM) for hostage-taking of U.S. persons in West Africa. OFAC designated these individuals pursuant to Executive Order (E.O.) 14078, “Bolstering Efforts To Bring Hostages and Wrongfully Detained United States Nationals Home,” which targets those involved in, hostage-taking of a U.S. national or the wrongful detention of a U.S. national abroad. The Department of State concurrently designated five JNIM leaders pursuant to E.O. 14078, and designated two of these, as well as two additional leaders of JNIM, pursuant to E.O. 13224, as amended.
The following individuals have been added to OFAC’s SDN List:
- Al-Libi, Talha, of Mauritania;
- Belhireche, Messaoud of Mali;
- Dicko, Jafar of Burkina Faso;
- Hammada, Hussein Ould of Mali; and
- Khouier, Hamama Ould of Mali.
https://home.treasury.gov/news/press-releases/jy2293 and https://ofac.treasury.gov/recent-actions/20240423
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April 25, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned over one dozen entities, individuals, and vessels that have played a central role in facilitating and financing the clandestine sale of Iranian unmanned aerial vehicles (UAVs) for Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL), which itself is involved in supporting Iran’s Islamic Revolutionary Guard Corps (IRGC) and Russia’s war in Ukraine. Sahara Thunder is the main front company that oversees MODAFL’s commercial activities in support of these efforts. Sahara Thunder also plays a key role in Iran’s design, development, manufacture, and sale of thousands of UAVs, many of them ultimately transferred to Russia for use in its war of aggression against Ukraine. OFAC is also sanctioning two companies and a vessel involved in the shipment of Iranian commodities for Sepehr Energy Jahan Nama Pars, which similarly plays a leading role in the commercial activities of Iran’s Armed Forces General Staff (AFGS). Concurrent with this action, the United Kingdom and Canada are imposing sanctions targeting several entities and individuals involved in Iran’s UAV procurement and other military-related activities.
The following individuals have been added to OFAC’s SDN List:
- Abdi Asjerd, Abbas of Iran;
- Abdi Asjerd, Zahra of Iran;
- Abdulahi Fard, Hojat of Iran;
- Bakhshayesh, Hossein of Iran;
- Eidi Ashjerdi, Hamid of Iran;
- Mirzai Kondori, Kazem of Iran;
- Moradipour, Mohammad Ali of Iran; and
- Vahabzadeh Moghadam, Seyed of Iran.
The following entities have been added to OFAC’s SDN List:
- Arsang Safe Trading Co. of Iran;
- Asia Marine Crown Agency of Iran;
- Baran Sazan Caspian Anzali Free Zone Company of Iran;
- Bonyan Danesh Shargh Private Company of Iran;
- Coral Trading EST of Iran;
- Etemad Tejarat Misagh of Iran;
- Onden General Trading FZE of Iran;
- Pishro Sanat Aseman Sharif Private Company of Iran;
- Safe Seas Ship Management FZE of the United Arab Emirates;
- Sahara Thunder of Iran;
- Sanaye Motorsazi Alvand Private Company of Iran;
- Saone Shipping Corporation of Panama;
- Sea Art Ship Management OPC Private Limited of India;
- Trans Gulf Agency Llc of The United Arab Emirates; and
- Zen Shipping & Port India Private Limited of India.
The following vessels have been added to OFAC’s SDN List:
- Chem (E5U4368) Chemical/Products Tanker Cook Islands flag; Vessel Registration Identification IMO 9240914; MMSI 518998388 (vessel);
- Conrad (E5U4542) Oil Products Tanker Cook Islands flag; Vessel Registration Identification IMO 9546722; MMSI 518998562 (vessel);
- Dancy Dynamic (T8A3476) Oil Products Tanker Palau flag; Vessel Registration Identification IMO 9158161; MMSI 511100350 (vessel);
- K M A (E5U4542) Chemical/Products Tanker Cook Islands flag; Vessel Registration Identification IMO 9234616; MMSI 518998425 (vessel);
- La Pearl (5IM808) Crude Oil Tanker Tanzania flag; Vessel Registration Identification IMO 9174660; MMSI 677070800 (vessel).
The following aircraft has been added to OFAC’s SDN List:
- EP-PUS; Aircraft Manufacture Date 1992; Aircraft Mode S Transponder Code 7342B3; Aircraft Model Ilyushin IL-76TD; Aircraft Manufacturer’s Serial Number (MSN) 1023409321
https://ofac.treasury.gov/recent-actions/20240425 and https://ofac.treasury.gov/recent-actions?page=0
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April 29, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 8I “Authorizing Transactions Related to Energy.
General License 8I: All transactions prohibited by Executive Order (E.O.) 14024 involving one or more of the following entities that are related to energy are authorized, through 12:01 a.m. eastern daylight time, November 1, 2024:
(1) State Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank;
(2) Public Joint Stock Company Bank Financial Corporation Otkritie;
(3) Sovcombank Open Joint Stock Company;
(4) Public Joint Stock Company Sberbank of Russia;
(5) VTB Bank Public Joint Stock Company;
(6) Joint Stock Company Alfa-Bank;
(7) Public Joint Stock Company Rosbank;
(8) Bank Zenit Public Joint Stock Company;
(9) Bank Saint-Petersburg Public Joint Stock Company;
(10) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest; or
(11) the Central Bank of the Russian Federation.
For the purposes of this general license, the term “related to energy” means the extraction, production, refinement, liquefaction, gasification, regasification, conversion, enrichment, fabrication, transport, or purchase of petroleum, including crude oil, lease condensates, unfinished oils, natural gas liquids, petroleum products, natural gas, or other products capable of producing energy, such as coal, wood, or agricultural products used to manufacture biofuels, or uranium in any form, as well as the development, production, generation, transmission, or exchange of power, through any means, including nuclear, thermal, and renewable energy sources.
https://ofac.treasury.gov/media/932846/download?inline and https://ofac.treasury.gov/recent-actions/20240429