This newsletter is a listing of the latest changes in export control regulations through August 31, 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 States Government 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.
REGULATORY UPDATES
President
President Biden Continued the National Emergency With Respect to the Advancement by Countries of Concern in Sensitive Technologies and Products Critical for the Military, Intelligence, Surveillance, or Cyber-Enabled Capabilities of Such Countries
August 6, 2024: On August 9, 2023, by Executive Order 14105, 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 of the United States constituted by the advancement by countries of concern in sensitive technologies and products critical for the military, intelligence, surveillance, or cyberenabled capabilities of such countries. As described in Executive Order 14105, this threat to the national security of the United States has its source in whole or substantial part outside the United States, and certain United States investments risk exacerbating this threat.
Certain ongoing activities, such as the comprehensive, long-term strategies of countries of concern that direct, facilitate, or otherwise support advancements in sensitive technologies and products that are critical to such countries’ military, intelligence, surveillance, or cyber-enabled capabilities, significantly enhance such countries’ ability to conduct activities that threaten the national security of the United States. As part of this ongoing strategy of advancing the development of these sensitive technologies and products, countries of concern are exploiting or have the ability to exploit certain United States outbound investments, including certain intangible benefits that often accompany United States investments and that help companies succeed. Such investments risk exacerbating this threat to United States national security.
For this reason, the national emergency declared in Executive Order 14105 of August 9, 2023, must continue in effect beyond August 9, 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 14105 with respect to the threat posed by the advancement by countries of concern in sensitive technologies and products critical for the military, intelligence, surveillance, or cyberenabled capabilities of such countries.
https://www.whitehouse.gov/briefing-room/presidential-actions/
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Department of State, Directorate of Defense Trade Controls (DDTC)
DDTC Website Updates
August 1, 2024: The Directorate of Defense Trade Controls (DDTC) launched the next phase of its redesigned website on Wednesday, July 31st. This second phase of updates includes key Registration and Licensing pages and features a number of significant enhancements including improved navigation, searchability, and accessibility. Check out the new look!
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Final Rule: Amendments to the Definition of Activities That are not Exports, Reexports, Retransfers, or Temporary Imports – the “Sovereign Deployments Rule”
August 14, 2024: 89 Fed. Reg. 66310: On August 15, 2024, the Department of State published a final rule in the Federal Register amending the International Traffic in Arms Regulations (ITAR) section 120.54 to expand the definition of “activities that are not exports, reexports, retransfers, or temporary imports,” subject to certain conditions, to include: 1) the taking of a defense article subject to the reexport or retransfer requirements of the ITAR by the armed forces of a foreign government or United Nations military personnel on a deployment or training exercise outside a previously approved country; and 2) the reexport of retransfer of a foreign defense article previously imported into the United States that has since been exported from the United States pursuant to an ITAR license or other approval, that was not the subject of any enhancement or modification while in the United States.
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International Traffic in Arms Regulations: § 126.7 Exemption for Defense Trade and Cooperation Among Australia, the United Kingdom, and the United States
August 20, 2024: 89 Fed. Reg. 67270: The Department of State published an interim final rule in the Federal Register that took effect on September 1, 2024. This rule amends the International Traffic in Arms Regulations (ITAR) to create an exemption for certain exports, reexports, retransfers, and temporary imports of defense articles and defense services, and certain brokering activities between or among authorized users within Australia, the United Kingdom, and the United States.
The exemption is available for all defense articles and defense services, except for those contained on the excluded technology list in Supplement No. 2 to part 126 of the ITAR. The rule also introduces a provision to allow for certain transfers of classified defense articles to certain dual nationals, codifies an expedited license review process for Australia, the United Kingdom, and Canada, and makes changes to other ITAR sections to support the exemption.
The basic elements of the exemption are:
1. The U.S. exporter must be an authorized user i.e. registered with the Department of State.
To prove eligibility in transactions where you will be receiving Australian or UK technical data or hardware, you will need to show your DOS registration to the foreign authorized party or use the DOS OPT IN process to allow for the DOS to validate your company as an authorized user.
2. The foreign party in Australia or the U.K. must be an authorized user, posted on the DDTC website in the DECCS portal.
3. All the foreign parties in the transaction are in Australia or the U.K. are authorized users posted in the DDTC website DECCS portal.
4. For Hardware transfers, all the freight forwarders will need to be authorized users. The U.S. freight forwarders will need to be registered with DDTC, the foreign freight forwarders will need to follow the same process as the authorized users/ contractors.
5. The defense article, technical data or defense service cannot be excluded. The excluded list is Found at Supplement No #2 to Part 126.
6. The use of the defense article, technical data, or defense services must be wholly with Australia or the U.K.
As of September 3, 2024 75 authorized users were listed in the DECCS portal.
See our FAQ section for 10 FAQs on the 126.7 exemption.
Starting August 20, 2024, interested parties may submit comments to the Department over the following 90 days by using one of the methods described in the rule.
https://www.pmddtc.state.gov/sys_attachment.do?sys_id=720a340b97889a5067b1791ad053af20 and
https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_public_portal_news_and_events&cat=Event
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Department of State and Department of Treasury Designations in Support of Ukraine
August 23, 2024: Building on the sanctions already imposed on Russia in response to its continued war of aggression against Ukraine, the U.S. Department of the Treasury and the Department of State targeted nearly 400 individuals and entities both in Russia and outside its borders—including in Asia, Europe, and the Middle East—whose products and services enable Russia to sustain its war effort and evade sanctions. The United States government will continue to support Ukraine as it defends its independence and hold Russia accountable for its aggression.
Please see link below for full list of sanctioned individuals.
https://home.treasury.gov/news/press-releases/jy2546 and
https://ofac.treasury.gov/recent-actions/20240823
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Violations of the Arms Export Control Act and the International Traffic in Arms Regulations by RTX Corporation
August 29, 2024: RTX Corporation (“RTX”) entered into a three year Consent Agreement to settle allegations that it violated the International Traffic in Arms Regulations (ITAR) in connection with 750 export violations involving unauthorized exports of defense articles resulting from the failure to establish proper jurisdiction and classification; unauthorized exports of defense articles, including classified defense articles; unauthorized exports of defense articles (laptops) by employees via hand-carry to proscribed destinations listed in 22 C.F.R. 126.1; and violations of terms, conditions, and provisos of DDTC authorizations by its subsidiaries, Collins Aerospace, Pratt & Whitney and Raytheon. All of the violations were Voluntarily Disclosed to the Department of State by RTX over a number of years pursuant to 113 Voluntary Disclosures, most related to the acquisition of Rockwell Collins, by UTC, a company Raytheon merged with in 2020. RTX agreed to pay a fine of two hundred million dollars ($200,00,000) of which one hundred million dollars ($100,00,000) will be used by RTX for remedial compliance measures.
550 of the 750 violations were a result of misclassification of defense articles as EAR regulated. The misclassification resulted in exports to China, Canada, France, Germany, Greece, Israel, Japan, Mexico Iran, Lebanon, Russia, Australia, Belgium, The Netherlands, The Republic of Korea, Saudi Arabia, Singapore, Sweden, Turkey, United Arab Emirates, and the U.K. Several of the exports were deemed to have caused harm to the national security of the United States, as the exports involved the release of sensitive technical data to sanctioned destinations related to major US programs.
Violations:
RTX disclosed the following violations to the Department:
Unauthorized Exports, Reexports, Retransfers, and Temporary Imports Resulting from the Failure to Establish Proper Jurisdiction and Classification
Since 2020, RTX has submitted 27 voluntary disclosures to the Department demonstrating systemic failures to establish proper jurisdiction and classification of defense articles within certain operating divisions.
Unauthorized Exports to the PRC Resulting from Misclassification
RTX disclosed that it exported without authorization technical data to the PRC on numerous occasions between 2014 and 2023 predominantly because of a historical misinterpretation by Rockwell Collins of the ITAR’s “specially designed” definition and release criteria in 22 C.F.R. 120.41.
In two disclosures that RTX initially submitted to the Department in 2021 and 2022, it disclosed unauthorized exports that occurred at RTX’s facility in Cedar Rapids, Iowa, in the form of unauthorized releases of USML Category VIII(i) technical data related to the Boeing E-3 Sentry Airborne Early Warning and Control Aircraft and the Embraer KC-390 Millenium Medium Weight Transport Plane to Chinese foreign-person employees (FPE).
In a subsequent disclosure submitted to the Department in 2023, RTX disclosed that in January 2023 it exported without authorization USML Category VIII(i) technical data, misclassified in March 2018, related to an aluminum display housing component of the F-22 Raptor Fighter Aircraft to two Chinese FPEs at Collins’ facility in Shanghai, PRC.
In a separate 2023 disclosure, RTX described a jurisdiction and classification review that it undertook following the discovery of the systemic violations described in the previous paragraphs. The review revealed that between March 2015 and May 2023 Respondent exported without authorization USML Category XI(d) technical data to Chinese entities.
Unauthorized Procurement from the PRC Resulting from Misclassification
RTX disclosed that between 2015 and 2023, Rockwell Collins and, for a period following the acquisition, Collins, exported without authorization technical data controlled under USML Category XI(d) to entities in the PRC to procure approximately 45 distinct USML Category XI(c)(2) printed wiring boards (PWBs). Subsequently, Rockwell Collins (and Collins) delivered these PWBs to other prime contractors and directly to U.S. Department of Defense (DoD) customers for ultimate end use in U.S. and foreign military platforms.
In at least one disclosure, RTX reported that, following issuance of purchase orders and production of the PWBs by its Chinese suppliers, it caused the retransfer without authorization of technical data in the form of first-article inspection reports to its Chinese FPEs in Shanghai.
Harm to National Security
In a 2023 disclosure, RTX disclosed that, predominantly as a result of misclassifications UTC Aerospace Systems made between 2013 and 2017, it exported without authorization USML Category VIII(i) technical data to entities in – 9 – multiple foreign countries, including the PRC, as between 2019 and 2021. Respondent also disclosed that, at the time of the exports, it had incorrectly classified the technical data, which related to the environmental control system of the F/A-18 E/F Super Hornet, under the EAR.
Unauthorized Exports Related to Sensitive Military Platforms Resulting from Misclassification
RTX disclosed that between August 2017 and August 2022, Raytheon Company, and subsequently RAY, exported without authorization USML Category IV(c), IV(h), VI(f), XI(c), XI(d), and XII(e) defense articles to Australia, Belgium, Canada, France, Germany, Greece, Israel, Japan, Mexico, the Netherlands, the Republic of Korea, Saudi Arabia, Singapore, Sweden, Türkiye, the United Arab Emirates (UAE), and the United Kingdom. The unauthorized exports comprised parts, components, and technical data related to sensitive U.S. and foreign government military platforms, including but not limited to the:
- Tomahawk Cruise Missile;
- RIM-162 Evolved SeaSparrow Missile (ESSM);
- RIM-116 Rolling Airframe Missile;
- Standard Missile-2; and the
- PAVEWAY Laser Guided Bomb.
Unauthorized Reexports, Retransfers, and Temporary Imports Resulting from Misclassification
In seven disclosures, RTX reported that its failure to establish proper jurisdiction and classification of defense articles resulted in violations committed by its foreign affiliates in France and Germany.
Unauthorized Exports, Reexports, and Retransfers of Defense Articles, including Classified Defense Articles
Since 2019, RTX has submitted dozens of voluntary disclosures to the Department describing additional unauthorized exports of defense articles, including classified defense articles.
Unauthorized Exports of Classified Defense Articles
In four disclosures, RTX disclosed that it exported without authorization classified defense articles controlled under USML Categories IV(h), IV(i), and XI(c) to Australia, Germany, Norway, and the UAE related to the following programs:
- National Advanced Surface-to-Air Missile System;
- RIM-162 Evolved SeaSparrow Missile;
- Tomahawk Cruise Missile; and
- AIM-120 Advanced Medium-Range Air-to-Air Missile Extended Range (AMRAAM-ER)
Harm to National Security
RTX disclosed that in October 2020, it exported without authorization USML Category IV(i) classified technical data to Norway.
Additional Unauthorized Exports of Classified Defense Articles
In a 2021 disclosure, RTX described its unauthorized temporary exports of classified components related to the ESSM to Australia and Germany. In July 2020, RTX prepared to temporarily export eight unclassified USML Category IV(h) transition sections for the ESSM Block 1 Guided Missile Assembly to Germany for repair under a DSP-73 authorization. Two of the eight transition sections included “erroneously installed” USML Category IV(h) S-Band Transceiver Modules (SBT), which are classified, designated SME, and were not authorized for temporary export under the DSP-73.
In the same disclosure, RTX disclosed the unauthorized export of one classified USML Category XI(c) “erroneously installed” hard drive to Australia. In September 2019, RTX prepared to export to Australia an oscilloscope intended for use with the MK698 Guided Missile Test Set in support of the ESSM program.
In a 2023 disclosure, RTX described the unauthorized export of classified USML Category IV(i) technical data to Australia. In November 2021, Respondent exported a CD-ROM intended to include software related to the AMRAAM to its Australian affiliate, Raytheon Australia (RA), under a DDTC authorization.
In each of these four disclosures, RTX identified the primary root cause of the violations as individual employees’ failures to verify whether the defense articles were classified or approved under the relevant DDTC authorizations prior to the unauthorized exports.
Other Unauthorized Exports, Reexports, and Retransfers of Defense Articles
In 54 disclosures submitted to the Department since 2019, RTX disclosed that it exported, reexported, and retransferred without authorization hundreds of defense articles, some of which qualified as SME, to or within 25 different countries, including the PRC.
Unauthorized Exports of Defense Articles by Employees via Hand-Carry to Proscribed Destinations
Since 2019, RTX has submitted three voluntary disclosures describing unauthorized exports of defense articles to proscribed destinations during employee travel.
Unauthorized Exports to Lebanon
In a 2021 disclosure, RTX described the unauthorized export of defense articles to Lebanon, a proscribed destination listed in 22 C.F.R. 126.1, during two personal trips one employee took in 2020 and 2021. The employee hand-carried his RTX-issued laptop, which contained ITAR-controlled technical data and was “capable of accessing the Raytheon U.S. network using a secure Virtual Private Network,” on both trips.
Harm to National Security
RTX discovered these violations during a standard monthly compliance review in July 2021 and, following an internal investigation, determined that the employee’s laptop contained USML Category IV(i) technical data related to the Standard Missile-3, Standard Missile-6 (SM-6), and ESSM Block 2.
Unauthorized Exports to Russia
In a 2022 disclosure, RTX described the unauthorized exports of defense articles to Russia, a proscribed destination listed in 22 C.F.R. 126.1, during one employee’s personal trip in May and June of 2021. The employee hand carried his RTX-issued laptop, which contained ITAR-controlled technical data, to St. Petersburg, Russia and attempted to use the laptop while in Russia.
Unauthorized Exports to Iran
In a 2019 disclosure, Respondent described the unauthorized export of defense articles to Iran, a proscribed destination listed in 22 C.F.R. 126.1, during one employee’s personal travel.
Violations of Terms, Conditions, and Provisos of DDTC Authorizations
Respondent has submitted 36 disclosures to the Department related to its violations of terms, conditions, and provisos of DDTC authorizations on numerous occasions dating back to 2019. These violations comprise:
- Failure to furnish or properly complete DSP-83 Nontransfer and Use Certificates;
- Failure to return in a timely manner to the United States defense articles previously exported under DSP-73 temporary export licenses;
- Failure to file or the filing of inaccurate annual sales reports related to Department-issued manufacturing licensing agreements (MLA);
- Failure to file in a timely manner reports related to payments reportable under 22 C.F.R. 130;
- Failure to notify DDTC in a timely manner of actions related to Departmentissued authorizations (e.g., agreement termination, agreement execution, failure to conclude agreements, initial export of technical data pursuant to an agreement);
- Foreign manufacture of defense articles valued in excess of that authorized by the relevant MLA; and
- Misrepresentation or omission of facts in export or temporary import control documents (e.g., citation of incorrect Department-issued authorizations in electronic export information filings, submission of amendments to Department-issued MLAs containing inaccurate valuations of defense articles manufactured abroad)
In additional to the payment of $100 million dollars RTX is required to undertake the following actions:
Remedial Measures:
RTX shall ensure that adequate resources are dedicated to ITAR compliance throughout its ITAR-regulated operating divisions, subsidiaries, and business units. RTX shall establish policies and procedures for all of RTX’s employees with responsibility for AECA and ITAR compliance to address lines of authority, staffing levels, performance evaluations, and career paths.
RTX, in coordination with the Designated Official (as defined below), shall conduct an internal review of AECA and ITAR compliance resources and establish the necessary actions to ensure that sufficient resources are dedicated to AECA and IT AR compliance.
RTX shall appoint, in accordance with the provisions of this Consent Agreement and in consultation with and the approval of the Director, Defense Trade Controls Compliance – DTCC, a qualified individual to serve as a Designated Official for the entire term that the Consent Agreement is in force. The term “Designated Official” in this Consent Agreement refers to a Special Compliance Officer (SCO) 1 or Internal Special Compliance Officer (ISCO)2 during the term of their appointment.
RTX shall strengthen corporate compliance procedures focused principally on RTX’s business operations such that: (a) all RTX employees engaged in AECA and ITAR-regulated activities are
familiar with the AECA and the ITAR, and their own and RTX’s responsibilities thereunder; (b) all persons responsible for supervising those employees, including senior managers of those units, are knowledgeable about the underlying policies and principles of the AECA and the ITAR; and (c) there are records indicating the names of employees, trainers, and level and area of training received.
RTX shall enhance its AECA and ITAR compliance program with specific attention to the areas described in paragraphs 9(k)(I)(i) through 9(k)(1)(vii) of the agreement. Respondent shall provide to DTCC written confirmation that the company has completed this action.
RTX agreed to implement a comprehensive, automated export compliance system throughout its operating divisions, subsidiaries, and business units engaged in AECA and ITAR-regulated activities to strengthen its internal controls for ensuring compliance with the AECA and the ITAR. This system shall track the decision process from the initiation to conclusion of a request for export, reexport, or retransfer
authorization. The automated export compliance system shall improve RTX’s ability to oversee and monitor export, reexport, and retransfer activity. This system shall also cover the initial identification of all technical data and technical assistance in any form proposed to be disclosed to any foreign persons. RTX shall ensure the use of a means of alerting users to the AECA and ITAR requirements on electronic transmissions of ITAR-controlled technical data. In order to prevent unintentional or accidental transmissions to unauthorized recipients, RTX shall also provide training lo all employees to ensure that any type of electronic transmissions of ITAR-controlled technical data are sent in accordance with RTX’s export compliance policies and procedures.
Classification Review:
RTX shall, under the supervision of the Designated Official, review, verify, and complete the export control jurisdiction of all hardware and/or software that RTX’s AECA and ITAR-regulated operating divisions, subsidiaries and business units, and any defense services or technical data, directly related to such hardware and not related to any hardware.
Also, separately, prior to export, re-export and/or retransfer, RTX shall review, verify, and complete the export control jurisdiction of each hardware item (and any defense services or technical data, including software, directly related to such hardware item and not related to any hardware) and items procured from
suppliers for which such jurisdiction was not previously and accurately determined and/or verified in accordance with this paragraph.
Audits:
One audit shall be performed during the Consent Agreement. RTX shall have the audit conducted by an outside consultant with expertise in AECA and ITAR matters, approved by the Director, DTCC. The audit shall be conducted under the supervision of the Designated Official. The audit shall provide a thorough assessment of the effectiveness of RTX’s implementation of all measures set forth in this Consent Agreement with focus on those actions undertaken to address the compliance issues identified in the Proposed Charging Letter, the policies, procedures, and training established by Boeing. The Designated Official or the Director, DTCC, may identify other areas (e.g., transactional review of agreements, Respondent’s information technology systems) for the audit.
Debarment:
RTX has cooperated with the Department’s review, has expressed regret for these activities, and has taken steps to improve its compliance programs. It has also undertaken to pay a cash penalty and agrees to implement the significant additional remedial compliance actions specified in the Consent Agreement. For these reasons, the Department determined not to impose an administrative debarment of Boeing.
Onsite Reviews by the Department:
For the purpose of assessing compliance with the provisions of the AECA, the ITAR and future authorizations, RTX agreed to arrange and facilitate, with minimum advance notice, onsite reviews by the Department while this Consent Agreement remains in effect.
Copies of the Charging Letter, Agreement and Order can be found at the following links:
https://www.pmddtc.state.gov/sys_attachment.do?sys_id=016068ca9790565467b1791ad053affa and
https://www.pmddtc.state.gov/sys_attachment.do?sys_id=3c6068ca9790565467b1791ad053aff2 and
https://www.pmddtc.state.gov/sys_attachment.do?sys_id=096068ca9790565467b1791ad053aff7
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DDTC Name And Address Changes Posted To Website
August 12 through 30, 2024: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at
- Name change from Kongsberg Protech Systems USA Corporation to Kongsberg Defense & Aerospace Inc. due to corporate restructuring;
- Name change from Kongsberg Defense & Aerospace, Inc. to Kongsberg Defense & Aerospace Holding Inc due to corporate restructuring;
- Name change from Communications & Power Industries LLC to CPI International, Inc., Beverly Microwave Division, and Microwave Products, Inc. due to divestment of subsidiaries;
- Address change for Wärtsilä Netherlands B.V at t Hanzelaan 95, 8017 JE Zwolle, the Netherlands to Wärtsilä Netherlands B.V. at Innovatiestraat 4, 8051 TC Hattem, the Netherlands.
- Name change from Communications & Power Industries LLC to CPI International, Beverly Microwave Division and Microwave Power Products, Inc. due to Acquisition.
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DDTC FAQS – ITAR 126.7 EXEMPTION
Frequently Asked Questions (FAQS) related to the Australia/UK Exemption (AUKUS)
- Q: Does the ITAR § 126.7 exemption obviate the need to obtain a Foreign Person Employee DSP-5 license for U.S. person employers?
A: The foreign person, in their capacity as a natural person, must become an Authorized User to avail themselves of the exemption. A DDTC authorization (e.g., DSP-5 FPE license) would be required for the transfer of any technical data beyond the scope and limitations of the ITAR § 126.7 exemption. This would include, for example, transfers of defense articles described on the ETL.
- Q: How do I use the ITAR § 126.7 exemption in the Automated Export System (AES)?
A: Exporters of defense articles must electronically file Electronic Export Information (EEI) using the AES citing code “126.7” in the appropriate field in the EEI for each shipment. This new code appears in the existing AES drop-down menu.
- Q: The end-users on my license application are all Australian, U.K, or Canadian entities but some intermediate consignees are located in different countries. Is my application still eligible for the expedited procedures outlined in ITAR § 126.15?
A: No. The expedited procedures described in ITAR § 126.15 are available only when the export application would authorize the export of defense articles or defense services to only Australia, the United Kingdom, or Canada. Any application that would authorize exports to parties in any other country will be subject to routine DDTC adjudication processes.
- How often will the Authorized User list of Australian and United Kingdom parties be updated?
A: The Authorized User list in DECCS is the official, up-to-date record of Australian and United Kingdom Authorized Users. DDTC will update the Authorized User list as needed.
- Q: If a U.S. company has United Kingdom and/or Australia subsidiaries on its DDTC registration, will these subsidiaries be treated as the U.S. Company?
A: No. Legal entities incorporated in Australia or the United Kingdom are foreign persons, considered to be entities of those countries, and must enroll as Authorized Users through their governments to participate in transfers or activities pursuant to the ITAR § 126.7 exemption.
- Q: How do I know if an Australian or United Kingdom party is an “Authorized User” under the ITAR § 126.7 exemption?
A: The list of Authorized Users of Australia and the United Kingdom is available in the Defense Export Control and Compliance System (DECCS). To access the list, you must enroll in DECCS, log-in, and navigate to the Authorized User list.
- Q: Will the Authorized User list be integrated into common automated screening tools used widely throughout industry?
A: DDTC does not develop or support such third-party screening software and cannot speak to its integration with the Authorized User list.
- Q: Where is the Excluded Technology List (ETL)?
A: The ETL that is applicable to ITAR § 126.7 is codified in Supplement No. 2 to Part 126 of the International Traffic in Arms Regulations (ITAR).
- Q: How should I note for DDTC in my license application the fact that the expedited licensing procedures provided for in ITAR § 126.15 apply?
A: DDTC will apply the expedited licensing procedures to export license applications that qualify for expedited treatment under ITAR § 126.15 automatically. There is no need to request expedited treatment specifically. However, applicants always are encouraged to submit any information that they believe would help facilitate an expeditious and streamlined review by the Department.
- Q: How does the § 126.7 exemption work?
A: The International Traffic in Arms Regulations (ITAR) § 126.7 exemption simplifies the transfer of ITAR-controlled defense articles, including technical data, the performance of defense services, and engaging in brokering activities between and among Australia, the United Kingdom, and the United States within an approved Authorized User group of government, private sector, and research and academic entities. When all requirements are met, parties may engage in such activities without the need for additional Directorate of Defense Trade Controls (DDTC) authorization. More information on who is an Authorized User is available in a corresponding FAQ.
Please see list of all FAQS related to AUKUS at the link below.
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Department of Defense, Defense Security Cooperation Agency (DSCA)
DSCA Notifies Congress of Potential FMS Sale To Norway
August 9, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government Norway has requested to buy sixteen (16) M142 High Mobility Artillery Rocket Systems (HIMARS); fifteen (15) M30A2 Guided Multiple Launch Rocket System (GMLRS) Alternative Warhead (AW) pods with Insensitive Munitions Propulsion System (IMPS); fifteen (15) M31A2 GMLRS Unitary (GMLRS-U) high explosive pods with IMPS; and one hundred (100) M57 Army Tactical Missile System (ATACMS) pods. Also included are Low Cost Reduced Range Practice Rocket (LCRRPR) pods; interactive electronic technical manuals; integration support services; spare parts; tool kits; test equipment; contractor logistics support; training; training equipment; technical assistance; technical publications; transportation; and other related elements of logistics and program support. The estimated total program cost is $580 million.
The principal contractor will be Lockheed Martin, located in Grand Prairie, TX. The purchaser typically requests offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor.
https://www.dsca.mil/press-media/major-arms-sales/norway-m142-high-mobility-artillery-rocket-systems
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DSCA Notifies Congress of Potential FMS Sale To Israel
August 13, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government Israel has requested to buy up to fifty (50) new F-15IA multi-role fighter aircraft, as well as Mid-Life Update modification kits for its existing twenty-five (25) F-15I multi-role fighter aircraft; one hundred twenty (120) F110-GE-129 engines; ninety (90) Advanced Display Core Processors II; seventy-five (75) APG-82(V)1 Active Electronically Scanned Array radars; fifty (50) AN/AAQ-13 LANTIRN navigation pods with containers; three-hundred twenty (320) LAU-128 Advanced Medium Range Air-to-Air Missile launchers; twenty-five (25) M61A Vulcan cannons; and one hundred eighty (180) Embedded Global Positioning System/Inertial Navigation System devices with M-Code. Also included are Cartridge Actuated Devices and Propellant Actuated Devices; Joint Helmet Mounted Cueing Systems; APX-119 Identification Friend or Foe (IFF) systems; KIV-77 Mode 4/5 IFF cryptographic appliques; AN/PYQ-10 Simple Key Loaders; impulse cartridges, chaff, and flares; integration and test support and equipment; aircraft and munitions support and support equipment; secure communications equipment, precision navigation, and cryptographic devices; classified software development, delivery, and support; spare parts, consumables and accessories, and repair and return support; major and minor modifications, maintenance, and maintenance support; facilities and construction support; transportation and airlift support; classified publications and technical documentation; personnel training and training equipment; warranties; studies and surveys; 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 $18.82 billion. Deliveries are estimated to begin in 2029. The prime contractor will be The Boeing Corporation, located in St. Louis, MO. The purchaser typically requests offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor.
https://www.dsca.mil/press-media/major-arms-sales/israel-f-15ia-and-f-15i-aircraft and
https://www.dsca.mil/major-arms-sales/archive-date/202408
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August 13, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Israel has requested to buy thirty (30) AIM-120C-8 Advanced Medium Range Air-to-Air Missiles (AMRAAM) and one (1) AMRAAM guidance section (spare). The following non-MDE items will also be included: AMRAAM control sections and containers; Common Munitions Built-In-Test/Reprogramming Equipment (CMBRE); ADU-891/E Adapter Group Computer Test Sets; spare parts, consumables, accessories, repair and return support, classified and unclassified publications, and technical documentation; classified software delivery and support; munitions support and support equipment; test support and support equipment; personnel training and training equipment; warranties; studies and surveys; contractor logistics support services; 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 $102.5 million. These items will be sourced from new production.
The prime contractor will be RTX Corporation, located in Tucson, AZ. The purchaser typically requests offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor.
https://www.dsca.mil/press-media/major-arms-sales/israel-advanced-medium-range-air-air-missiles
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DSCA Notifies Congress of Potential FMS Sale To Israel
August 13, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Israel has requested to buy thirty-two thousand seven hundred thirty-nine (32,739) 120mm tank cartridges, consisting of 120mm M1147 High Explosive Multi-Purpose with Tracer (HEMP-T) cartridges and/or 120mm M830A1 High Explosive Multi-Purpose Anti-Tank (MPAT) with Tracer cartridges. The following non-MDE is also included: various 120mm tank munitions; 120mm munitions canisters; transportation costs; publications and technical documentation; 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 $774.1 million. Deliveries are estimated to begin in 2027. The principal contractors will be General Dynamics Ordnance and Tactical Systems, located in St. Petersburg, FL, and Northrop Grumman Defense Systems, located in Falls Church, VA. There are no known offset agreements proposed in connection with this potential sale.
https://www.dsca.mil/press-media/major-arms-sales/israel-120mm-tank-cartridges
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DSCA Notifies Congress of Potential FMS Sale To Israel
August 13, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Israel has requested to buy fifty thousand (50,000) M933A1 120mm High Explosive (HE) mortar cartridges with M783 fuzes that will be added to a previously implemented case whose value was under the congressional notification threshold. The original FMS case, valued at $0.41 million ($0.37 million in MDE), included four hundred (400) M933A1 120mm HE mortar cartridges with M783 fuzes. This notification is for a combined total of fifty thousand four hundred (50,400) M933A1 120mm HE mortar cartridges with M783 fuzes. Also included are publications; technical documentation; 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 $61.1 million. Deliveries are estimated to begin in 2026. The principal contractor will be General Dynamics Ordnance and Tactical Systems Inc., located in Quebec, Canada. 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 Israel
August 13, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Israel has requested to buy additional modified M1148A1P2 Family of Medium Tactical Vehicles (FMTV) Load Handling System (LHS) 8-ton cargo trucks that will be added to a previously-implemented Foreign Military Sales (FMS) case whose value was under the congressional notification threshold. The original FMS case, valued at $62.4 million ($0 in Major Defense Equipment (MDE)), included modified M1148A1P2 FMTV LHS 8-ton cargo trucks and support. This notification is for the combined total of modified M1148A1P2 FMTV LHS 8-ton cargo trucks. Also included are armor b-kits; corrosion protection; special tools and test equipment; integration and test support; spare and repair parts; software delivery and support; publications and technical documentation; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; storage; and other related elements of logistics and program support. The estimated total cost is $583.1 million. Deliveries are estimated to begin in 2026. The principal contractor will be the Oshkosh Corporation, 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/israel-m1148a1p2-family-medium-tactical-vehicles
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DSCA Notifies Congress of Potential FMS Sale To Germany
August 15, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Germany has requested to buy up to six hundred (600) PATRIOT Advanced Capability-3 (PAC-3) Missile Segment Enhancement (MSE) missiles (includes ten (10) fly-to-buy missiles). The following non-MDE items will also be included: tools and test equipment; range and test programs; support equipment; associated publications and technical documentation; training equipment; spare and repair parts; new equipment training; transportation; quality assurance team support; U.S. Government and contractor technical assistance, engineering, and logistics support services; systems integration and checkout; field office support; participation in the International Engineering Services Program and Field Surveillance Programs; launcher modification kits; MSE conversion kits; and other related elements of logistics and program support. The estimated total cost is $5.0 billion. The prime contractor will be Lockheed Martin, located in Dallas, TX. The purchaser typically requests offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor.
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DSCA Notifies Congress of Potential FMS Sale To Germany
August 15, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Denmark has requested to buy up to five thousand eight hundred thirty-two (5,832) M1156 Precision Guidance Kits (PGK). Also included are ancillary items; compatibility testing; firing tables; technical assistance; technical data; new equipment training; and other related elements of logistics and program support. The estimated total cost is $85 million. The principal contractor will be Northrop Grumman, located in Minneapolis, MN. The purchaser typically requests offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor.
https://www.dsca.mil/press-media/major-arms-sales/denmark-precision-guidance-kits
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DSCA Notifies Congress of Potential FMS Sale To Italy
August 15, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Italy has requested to buy six (6) Unmanned Aerial System (UAS) MQ-9 Block 5 Aircraft; three (3) Unmanned Aerial System (UAS) MQ-9 Mobile Ground Control Stations (MGCS); twelve (12) AN/DAS-4 Multi-spectral Target Systems; nine (9) LYNX AN/APY-8 Block 20A Synthetic Aperture Radars with Maritime Wide Area Surveillance (MWAS) capability; and one (1) Embedded Global Positioning & Inertial Navigation System (EGI). The following non-MDE items will also be included: Reaper/Predator engines; Ruggedized Aircraft Maintenance Test Stations (RAMTS); AN/ARC-210 Ultra High Frequency (UHF)/Very High Frequency (VHF) Radios (RT-2036); Ground Data Terminals (GDT) (line of sight link); AN/PYQ-10 Simple Key Loaders; KIV-77 Identification Friend or Foe (IFF) Cryptographic Applique; Transponder IFF AN/APX-119; KY100M Narrowband/Wideband terminal communications security (COMSEC) device; UAS MQ-9 Fixed Ground Control System (FGCS); satellite communications (SATCOM) Earth Terminal Subsystems (SETSS); precision navigation; integration and test support and equipment; aircraft or engine support equipment; spare parts, consumables and accessories, and repair and return support; major modifications, maintenance, and maintenance support; facilities and construction support; transportation and airlift support; classified and unclassified software delivery and support; classified and unclassified publications and technical documentation; personnel training and training equipment; special insurance and warranties; studies and surveys; 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 $738 million. The principal contractor will be General Atomics, located in San Diego, CA. There are no known offset agreements proposed in connection with this potential sale.
https://www.dsca.mil/press-media/major-arms-sales/italy-mq-9-block-5-aircraft
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DSCA Notifies Congress of Potential FMS Sale To Canada
August 16, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Canada has requested to buy forty-eight (48) AIM-9X Sidewinder Block II+ Tactical Missiles; one hundred twenty (120) AIM-9X Sidewinder Block II Tactical Missiles; forty-eight (48) AIM-9X Sidewinder Block II Captive Air Training Missiles; forty-eight (48) AIM-9X Sidewinder Block II Special Air Training Missiles; four (4) AIM-9X Sidewinder Block II+ Tactical Guidance Units; twelve (12) AIM-9X Sidewinder Block II Tactical Guidance Units; and eight (8) AIM-9X Sidewinder Block II Guidance Units. The following non-MDE items will also be included: Active Optical Target Detectors; KGV-135A COMSEC chips; missile containers; training aids, spares; support equipment; training, missile software; and U.S. Government and contractor technical, engineering, logistical, and program support; and other related elements of logistics and program support. The estimated total cost is $264.6 million. The principal contractor will be RTX Corporation, located in Tucson, AZ. The purchaser typically requests offsets. Any offset agreement(s) will be defined in negotiations between the purchaser and the contractor.
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DSCA Notifies Congress of Potential FMS Sale To the Republic of Korea
August 19, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Republic of Korea (ROK) has requested to buy up to thirty-six (36) AH-64E Apache Attack Helicopters; up to seventy-six (76) T700-GE-701D Engines (72 installed, 4 spares); up to thirty-six (36) AN/ASQ-170 Modernized Target Acquisition and Designation Sight/AN/AAR-11 Modernized Pilot Night Vision Sensors (M-TADS/PNVS); up to fourteen (14) AN/APG-78 Fire Control Radars (FCR) with Mast Mounted Assembly (MMA); up to fourteen (14) AN/APG-78 Fire Control Radars (FCR) with Radar Electronic Units (REU); up to fourteen (14) AN/APR-48B Modernized-Radar Frequency Interferometers (MRFI); up to four hundred fifty-six (456) AGM-114R2 (N) Hellfire Missiles; up to six (6) M36E8 Captive Air Training Missiles (CATM); up to one hundred fifty-two (152) AGM-179A Joint Air-to-Ground Missiles (JAGM); up to forty (40) AAR-57 Common Missile Warning Systems (CMWS) (36 installed, 4 spares). The following non-MDE items will also be included: AN/AVR-2B laser detecting sets; AN/APX-123A Identification Friend or Foe (IFF) transponders; IDM-401 improved data modems; Enhanced Image Intensifier (EI2) cameras; AN/ARN-149 (V)3 automatic direction finders; ASN-157 Doppler Radar Velocity Sensors; AN/APN-209 radar altimeters; AN/PYQ-10(C) Simple Key Loader; Airborne Global Positioning System (GPS)/Embedded Global Positioning System/Inertial Navigation System (EGI); AN/APR-39C(V)1+ Radar Signal Detecting sets; ARC-220 High Frequency Communication Systems; KIV-77 Mark XIIA IFF Crypto Applique; Common Missile Warning System (CMWS) software update; M230E-1 30mm automatic gun; M139 AWS 20mm automatic gun; M261 rocket launchers; M299 missile launchers; 2.75-inch rockets; 30mm rounds; MG62 Cartridge Impulse BBU-35/N; A965 cartridges, 25.4mm rounds; M839 decoys; L410 flares; M206 aircraft countermeasures decoy flares; Cartridge Actuated Devices/Propellant Actuated Devices (CAD/PADs); U.S. Government engineering, technical, and logistics support services; and other related elements of program and logistics support. The estimated total cost is $3.5 billion. The principal contractors will be Boeing, located in Mesa, AZ; and Lockheed Martin, located in Orlando, FL. The purchaser typically requests offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor.
https://www.dsca.mil/press-media/major-arms-sales/republic-korea-ah-64e-apache-helicopters
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DSCA Notifies Congress of Potential FMS Sale To Australia
August 19, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Australia has requested to buy three hundred fifty (350) Javelin FGM-148F missiles (includes four (4) fly-to-buy missiles). Also included is U.S. Government technical assistance; technical data; repair and return services; and other related elements of logistics and program support. The estimated cost is $100 million. The prime contractors will be the Javelin Joint Venture between RTX Corporation, located in Tucson, AZ, and Lockheed Martin, located in Orlando, FL. There are no known offset agreements proposed in connection with this potential sale.
https://www.dsca.mil/press-media/major-arms-sales/australia-fgm-148f-javelin-missiles
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DSCA Notifies Congress of Potential FMS Sale To Finland
August 19, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Finland has requested to buy five thousand five hundred (5,500) M1156A1 Precision Guidance Kit (PGK) multi-option fuzes 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 $.97 million, included technical data/reports; U.S. Government technical assistance; incidental travel; transportation; PGK spare parts; equipment training; and related elements of logistics and program support. This notification includes the original aforementioned items and adds five thousand five hundred (5,500) M1156A1 PGK multi-option fuzes. The following non-MDE items will also be included: ancillary items; compatibility testing; firing tables; integration kits; antennas; key loaders; precision-guided munition simulator; technical assistance; technical data/reports; and other related elements of logistics and program support. The estimated total program cost is $70 million. The principal contractor will be Northrop Grumman Innovation Systems, located in Dulles, VA. The purchaser typically requests offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor.
https://www.dsca.mil/press-media/major-arms-sales/finland-m1156a1-precision-guidance-kits
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DSCA Notifies Congress of Potential FMS Sale To the Netherlands
August 19, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of the Netherlands has requested to buy training in support of its CH-47 and AH-64 helicopter fleet. Included is training ammunition; Army Supply Class I-VI and VIII-X items; information technology (IT) equipment; ground components; parts and accessories; Installation Management Command (IMCOM)-related service support; U.S. Government and contractor personnel assistance; miscellaneous service contract support; and other related elements of logistics and program support. The estimated total cost is $305 million. A principal contractor is not associated with this proposed sale. There are no known offset agreements proposed in connection with this potential sale
https://www.dsca.mil/press-media/major-arms-sales/netherlands-ch-47-and-ah-64-helicopter-training
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DSCA Notifies Congress of Potential FMS Sale To Tunisia
August 20, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress The Government of Tunisia has requested to buy additional non-MDE 65’ SAFE Archangel boats and additional non-MDE articles and services that will be added to a previously implemented case. The original FMS case, valued at $49.3 million, included non-MDE 65’ SAFE Archangel boats and non-MDE articles and services, consisting of commercial variant marine global positioning systems; navigation systems; communications equipment; training; and other related elements of logistical and program support. The estimated total cost is $110 million. The principal contractor is SAFE Boats International, located in Bremerton, Washington. There are no known offset agreements proposed in connection with this potential sale.
https://www.dsca.mil/press-media/major-arms-sales/tunisia-65-safe-archangel-boats
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DSCA Notifies Congress of Potential FMS Sale To the Government of Denmark
August 20, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress The Government of Denmark has requested to buy three hundred thirty-nine (339) M982A1 Excalibur tactical projectiles. Also included are Portable Electronic Fire Control Systems (PEFCS); Improved Platform Integration Kits (iPIK); Simple Key Loaders (SKLs); extractors; Surface Danger Zones (SDZs); training for new equipment; spare parts; U.S. Government technical assistance; technical data; repair and return services; and other related elements of logistics and program support. The estimated cost is $121 million. The principal contractor will be RTX Corporation, located in Tucson, Arizona. The purchaser typically requests offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor.
https://www.dsca.mil/press-media/major-arms-sales/denmark-excalibur-projectiles
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DSCA Notifies Congress of Potential FMS Sale To the Government of Norway
August 22, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress The Government of Norway has requested to buy one hundred (100) Advanced Medium Range Air-to-Air Missiles-Extended Range (AMRAAM-ER) and four (4) AMRAAM AIM-120C-8 guidance sections. The following non-MDE items will also be included: AMRAAM containers and support equipment; spare parts, consumables, accessories, and repair and return support; weapons software and support equipment, and classified software delivery and support; transportation support; classified publications and technical documentation; training equipment and support; studies and surveys; 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 $405 million. The principal contractor will be RTX Corporation, located in Tucson, AZ. 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 Romania
August 22, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress The Government of Romania has requested to buy up to one hundred eighty-six (186) AIM-120C-8 Advanced Medium Range Air-to-Air Missiles (AMRAAM) and four (4) AIM-120C-8 AMRAAM guidance sections. The following non-MDE items will also be included: AIM-120 Captive Air Training Missiles (CATMs), missile containers, propulsion sections, control sections, telemetry kits, and warhead spares; KGV-135A Cryptographic Devices; Common Munitions Built-In-Test (BIT)/Reprogramming Equipment (CMBREs); ADU-891 Computer Test Set Adapter Groups; spare parts, consumables, accessories, and repair and return support; munitions support and support equipment; classified and unclassified publications and technical documentation; classified and unclassified software delivery and support; warranties; studies and surveys; transportation support; contractor logistics support (CLS); 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 $592 million. The principal contractor will be RTX Corporation, located in Tucson, AZ. 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 Australia
August 23, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress The Government of Australia has requested to buy AH-64E Apache sustainment support services, including U.S. Government and contractor engineering, technical, and logistics support services; technical data and publications; personnel training; and other related elements of logistics, and program support. The estimated total cost is $300 million. The principal contractors will be The Boeing Company, located in Mesa, AZ, and Lockheed Martin, located in Orlando, FL. 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 India
August 23, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress The Government of India has requested to buy AN/SSQ-53G High Altitude Anti-Submarine Warfare (HAASW) sonobuoys; AN/SSQ-62F HAASW sonobuoys; AN/SSQ-36 sonobuoys; technical and publications and data documentation; U.S. Government and contractor engineering and technical support; and other related elements of logistics and program services and support. The estimated total cost is $52.8 million. The principal contractor(s) will be Sparton Corporation, located in De Leon Springs, FL, or Undersea Sensor Systems Inc. (USSI), located in Columbia City, IN, or a combination of both. There are no known offset agreements proposed in connection with this potential sale.
https://www.dsca.mil/press-media/major-arms-sales/india-anti-submarine-warfare-sonobuoys
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Department of Commerce – Bureau of Industry and Security (BIS)
BIS Publishes New Export Control Compliance Resources for the Academic Community
August 14, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) Export Enforcement published new resources for the academic community: a compliance note on voluntary self-disclosure trends and a compendium of export compliance resources. These resources align with BIS’s ongoing commitment to support academic institutions in their efforts to comply with export controls.
The compliance note, Trends in Voluntary Self-Disclosures Related to Academia to Inform Improvements to Export Compliance Plans, details conduct commonly disclosed by academic institutions over the past ten years that constitutes export control violations. The document also highlights actions universities can take to address and prevent these violations, including enhanced training programs and improved internal controls.
The Compendium of Resources offers a comprehensive guide to export compliance tools, including informational and vetting resources, BIS-specific resources, and examples of recent enforcement actions. These tools should help academic institutions integrate export control requirements into everyday operations for professors, students, staff, and visitors, which in turn helps minimize the risk of violations.
Together, the compliance note and the compendium of resources build on the efforts of the Academic Outreach Initiative, first announced in June 2022. The Academic Outreach Initiative is intended to help academic institutions maintain an open, collaborative research environment in a way that also protects them from national security risk, and it includes strategically prioritized engagement, the assignment of outreach agents to prioritized institutions, background briefings, and trainings.
https://www.bis.gov/media/documents/academic-voluntary-self-disclosures-compliance-note-812 and
https://www.bis.gov/media/documents/compendium-resources-final-v40pdf and
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Commerce Tightens Export Controls, Targets Illicit Procurement Networks For Supplying Russian War Machine
August 23, 2024: The Commerce Department’s Bureau of Industry and Security (BIS) took aggressive action to further restrict the supply of both U.S.-origin and “U.S. branded” (i.e., labeled) items to Russia and Belarus for the Kremlin’s illegal war on Ukraine. The actions will further constrain Russia’s ability to arm its military by targeting illicit procurement networks designed to circumvent global export controls.
Key actions include:
- Further tightening controls on Russia by expanding the scope of the Russia/Belarus Military End User (MEU) and Procurement Foreign Direct Product (FDP) rule and imposing additional license requirements on operation software for computer numerically controlled (CNC) machine tools;
- Cutting off exports to foreign companies on the BIS Entity List; applying the expanded Russia/Belarus MEU and Procurement FDP rule to dozens of entities outside Russia;
- Restricting trade to additional foreign addresses and issuing guidance to exporters on identifying suspicious transactions related to foreign corporate service providers and listed foreign addresses, strengthening recently implemented restrictions on shell company addresses; and
- Providing guidance and recommendations on contractual language referencing export regulations (the Export Administration Regulations, or EAR), specifically, restrictions that target unlawful reexports to Russia and Belarus.
U.S. Census Bureau
Tips on How to Resolve AES Response Messages
August 20, 2024: 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: 303
Narrative: Sold En Route Indicator Must be Y or N
Severity: Fatal
Reason: The Party Type is identified as Ultimate Consignee and the Sold En Route Indicator is not reported as Yes or No.
Resolution: The Ultimate Consignee information must be reported on an EEI including a valid Sold En Route Indicator. If the Ultimate Consignee is known and reported, set the Sold En Route Indicator to No. If the cargo is to be Sold En Route and the ultimate consignee is not known at the time of export, then set the Sold En Route Indicator to Yes.
Verify the Ultimate Consignee and the Sold En Route Indicator, correct the shipment and resubmit.
Response Code: 538
Narrative: Shipping Weight Must Be Greater Than Zero For MOT
Severity: Fatal
Reason: The Mode of Transportation Code reported was one that identifies a Vessel, Rail, Truck, or Air shipment and the Shipping Weight was not reported.
Resolution: When the Mode of Transportation is Vessel, Rail, Truck or Air, the Shipping Weight must be reported.
Verify the Mode of Transportation and Shipping Weight, correct the shipment and resubmit.
For a complete list of AES Response Codes, their reasons, and resolutions, see Appendix A – Commodity Filing Response Messages.
It is important that AES filers correct Fatal Errors as soon as they are received in order to comply with the Foreign Trade Regulations. These errors must be corrected prior to export for shipments filed predeparture and as soon as possible for shipments filed postdeparture but not later than five calendar days after departure.
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Update to License Code C68 (NAC) (NO notification required)
August 22, 2024: On October 25, 2023, the Department of Commerce, Bureau of Industry and Security (BIS) published an interim final rule “Export Controls on Semiconductor Manufacturing Items” (SME IFR) and “Implementation of Additional Export Controls: Certain Advanced Computing Items; Supercomputer and Semiconductor End Use; Updates and Corrections” (AC/S IFR). On April 4, 2024, BIS published a rule (https://www.federalregister.gov/documents/2024/04/04/2024-07004/implementation-of-additional-export-controls-certain-advanced-computing-items-supercomputer-and) to correct inadvertent errors in those rules and make additional clarifications for the rule. This rule revises the header of § 740.8 to reference License Exception ACA in addition to License Exception NAC. BIS has separated License Exception NAC into two separate license exceptions that will reside in the same section of the EAR § 740.8: Notified Advanced Computing (NAC) will authorize exports and reexports of specified items to Macau and destinations in Country Group D:5 and entities headquartered in, or with an ultimate parent headquartered in, Macau or a destination specified in Country Group D:5, wherever located, that require a notification to BIS, while Advanced Computing Authorized (ACA) will authorize exports, reexports, and transfers (in-country) of specified items to destinations in Country Group D:1 or D:4 (except Macau and destinations specified in Country Group D:5) that do not require a notification to BIS. License Exception ACA will also authorize transfers (in-country) to Macau and destinations in Country Group D:5, and entities headquartered in, or with an ultimate parent headquartered in, Macau or a destination specified in Country Group D:5, that do not require a notification to BIS.
Update to License Code C68 (NAC) (NO notification required)
An update has been made to AES to revise the name of License Code C68 to Advanced Computing Authorized (ACA) (NO notification required)
The full terms of License Exception ACA are described in § 740.8.
AES filers must adhere to the following new reporting when using C68 (ACA) (No notification required) to prevent the return of fatal errors from AES:
- Report License Code: C68 Advanced Computing Authorized (ACA) (NO notification required), if no advanced notification was required.
- Report License Number: Report “ACA” in the license number block.
- Allowable ECCNs: 3A090, 4A090, 3A001, 4A003, 4A004, 4A005, 5A002, 5A004, 5A992, 5D002, or 5D992.
- Allowable countries: Destinations specified in Country Groups D:1, D:4, and D:5.
- “.z” must be entered as the first characters to appear in the Commodity Description block for 3A001.z, 4A003.z, 4A004.z, 4A005.z, 5A002.z, 5A004.z, 5A992.z, 5D002.z, or 5D992.z.
- Allowable Export Information Codes: All except UG
- Allowable Modes of Transportation: All except ‘70’ (Fixed Transport)
Please note that all license exceptions are also subject to the restrictions in § 740.2 and part 746 of the EAR, which would remove eligibility for embargoed and sanctioned countries, e.g., Belarus, Cuba, Russia, Iran, and Syria.
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Office of Foreign Assets Control (OFAC)
Important Announcement for Users of OFAC’s Compliance Hotline
August 2, 2024: To improve efficiency in responding to requests for sanctions guidance from the public, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is updating its Compliance Hotline by streamlining and enhancing the query submission process.
Thanks to helpful feedback from Compliance Hotline users, OFAC is transitioning to a single, user-friendly online platform to receive questions from the public. Users can now submit queries—and provide all necessary details—directly through OFAC’s new OFAC Compliance Hotline page. This new platform is designed to improve OFAC’s tracking of queries and help OFAC assess when additional public guidance may be helpful.
OFAC will fully transition its Compliance Hotline to this web form platform by January 1, 2025, and will retire other existing forms of contacting the OFAC Compliance Hotline according to the following schedule: OFAC will retire the Compliance Hotline email (OFAC_Feedback@treasury.gov) on August 16, 2024; and its Compliance Hotline telephone (1-800-540-6322 and 202-622-2490) on December 31, 2024.
Please submit questions about how to comply with OFAC-administered sanctions programs or where to find helpful guidance on OFAC’s website via the new online OFAC Compliance Hotline.
As a reminder, please continue to use OFAC’s License Application page for license applications and requests for formal interpretive guidance. Other information about contacting OFAC, including where to submit voluntary self-disclosures or appeal designations, can be found on our Contact OFAC page.
https://ofac.treasury.gov/recent-actions/20240802_33 and
https://ofac.treasury.gov/ofac-compliance-hotline and
https://ofac.treasury.gov/contact-ofac
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Publication of Regulatory Amendments
August 20, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) published a final rule to update terminology and references across several sanctions programs’ regulations, and added a general license to the Burma Sanctions Regulations to authorize the provision of agricultural commodities, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices to individuals whose property and interests in property are blocked pursuant to the Burma Sanctions Regulations.
https://ofac.treasury.gov/recent-actions/20240820
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OFAC Modernization Efforts
August 21, 2024: The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced several initiatives underway aimed at assisting the public with sanctions implementation. As part of these efforts, OFAC amended several Frequently Asked Questions (FAQs) to ensure published guidance remains current. OFAC will continue reviewing FAQs through an ongoing process that is focused on providing up-to-date and useful information to the public.
https://ofac.treasury.gov/recent-actions/20240821 and
https://ofac.treasury.gov/faqs/updated/2024-08-21
| 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
Department of Commerce, Bureau of Industry and Security (BIS)
August 9, 2024: Arthur Petrov Allegedly Participated in a Russia-Based Illicit Procurement Network That, Subsequent to Russia’s Invasion of Ukraine, Illegally Procured Large Quantities of Sensitive Microelectronics for a Russian Company.
Petrov, 33, a dual Russian-German citizen who has resided in Russia and Cyprus, is charged with one count of conspiracy to defraud the U.S., which carries a maximum sentence of five years in prison; one count of conspiracy to violate the Export Control Reform Act (“ECRA”), which carries a maximum sentence of 20 years in prison; three counts of violating the ECRA, each of which carries a maximum sentence of 20 years in prison; one count of conspiracy to smuggle goods from the U.S., which carries a maximum sentence of five years in prison; three counts of smuggling goods from the U.S., which each carry a maximum sentence of 10 years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; and one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison
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August 15, 2024: As part of a settlement agreement to resolve alleged violations of U.S. export controls, the Department of Commerce’s Bureau of Industry and Security (BIS) imposed a $5.8 million civil penalty against TE Connectivity Corporation (TE), located in Middletown, Pennsylvania, and TE Connectivity HK Limited, located in Kwai Chung, New Territories, Hong Kong, for shipments of low-level items to parties tied to the People’s Republic of China’s (PRC) hypersonics, unmanned aerial vehicles (UAV), and military electronics programs.
The alleged violations involved shipments of $1.74 million in Items subject to the Export Administration Regulations (EAR) to parties on the BIS Entity List and for restricted end uses in China. Specifically, TE sent items such as wires, printed circuit-board connectors, and pressure and temperature scanners to parties previously placed on the BIS Entity List for supporting the PRC’s military modernization efforts in the fields of hypersonics, UAVs, and electronics. TE voluntarily disclosed the conduct to BIS, cooperated with the investigation by BIS’s Office of Export Enforcement, and took remedial measures after discovering the conduct at issue, which resulted in a significant reduction in the penalty.
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August 15, 2024: The Justice Department unsealed an indictment charging U.S.-Iranian national Jeffrey Chance Nader, 68, with crimes related to the illicit export of U.S.-manufactured aircraft components, including components used on military aircraft, to Iran in violation of U.S. economic sanctions and other federal laws. Nader was arrested yesterday in California.
This prosecution was coordinated through the Disruptive Technology Strike Force, an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states. Under the leadership of the Assistant Attorney General for National Security and the Assistant Secretary of Commerce for Export Enforcement, the Strike Force leverages tools and authorities across the U.S. Government to enhance the criminal and administrative enforcement of export control laws.
https://www.justice.gov/opa/pr/california-man-indicted-unlawfully-exporting-aircraft-components-iran and
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August 15, 2024: A Bulgarian national made his initial appearance in a federal court in San Antonio Monday after being extradited from Greece.
According to court documents, Milan Dimitrov, 50, allegedly conspired with Ilias Sabirov, 52, of Russia, and Dimitar Dimitrov, 74, of Bulgaria, to violate the International Emergency Economic Powers Act (IEEPA) and the Export Control Reform Act (ECRA) in a scheme to procure sensitive radiation-hardened integrated circuits from the United States and illegally export those components to Russia through Bulgaria without the required licenses from the U.S. government.
Milan Dimitrov is charged with two counts of IEEPA violations, one count of money laundering, and one count of making false statements to the Department of Commerce in violation of ECRA. Each count in the indictment carries up to 20 years in federal prison.
Sabirov and Dimitar Dimitrov currently remain at large. The two were charged in the same indictment in December 2020 with two counts of IEEPA violations and one count of money laundering.
The indictment alleges that between at least May 2014 and May 2018 the defendants used the Bulgarian company Multi Technology Integration Group EEOD (MTIG) to receive export-controlled items from the United States and transship them to Russia without the required licenses.
According to the indictment, Sabirov is the head of two Russian companies—Cosmos Complect and OOO Sovtest Comp.—and controls MTIG. Both Dimitar Dimitrov and Milan Dimitrov worked for
Sabirov at Cosmos Complect and MTIG.
As alleged, in 2014, the defendants met with the supplier of the radiation-hardened circuits in Austin and were informed that radiation-hardened circuits could not be shipped to Russia because of U.S. trade restrictions. Sabirov then established MTIG in Bulgaria to purchase the controlled electronic circuits, which did not require a license for export to Bulgaria. The radiation-hardened properties of these circuits made them resistant to damage or malfunction in the harsh outer-space environment. The circuits were controlled for export to Russia for these very reasons. The parts were shipped to Bulgaria in 2015, and MTIG soon thereafter transshipped them to Sabirov’s companies in Russia. OOO Sovtest Comp. transferred over $1 million to MTIG for the parts.
In the same timeframe, MTIG—at Sabirov’s direction—ordered over $1.7 million in other electronic components produced by another U.S.-based electronics manufacturer. MTIG bought these parts to fulfill part of its contract with OOO Sovtest Comp. Again, the parts were shipped from the United States to Bulgaria, where they were merely repackaged and then shipped to Russia.
In late 2018, a Department of Commerce Export Control Officer interviewed Milan Dimitrov during a visit to MTIG to determine whether the radiation-hardened components were still in MTIG’s possession in Bulgaria. Milan Dimitrov, among other things, falsely denied sending the components to Russia.
U.S. Attorney Jaime Esparza of the Western District of Texas made the announcement.
The Commerce Department’s Office of Export Enforcement and the FBI are investigating this case with assistance from Defense Criminal Investigative Service (DCIS).
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August 16, 2024: 89. Fed. Reg.: On August 18, 2021, in the U.S. District Court for the District of Arizona, Marco Antonio Peralta-Vega was convicted of violating 18 U.S.C. 554(a). Specifically, Peralta-Vega was convicted of smuggling various firearms and ammunition from the United States to Mexico. As a result of his conviction, the Court sentenced him to 36 months in prison with credit for time served, three years of supervised release, a $100 special assessment, and denied export privileges for a period of 10 years.
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August 16, 2024: 89 Fed. Reg. 66674: On November 28, 2022, in the U.S. District Court for the Northern District of Georgia, Kenan L’Homme was convicted of violating 18 U.S.C. 554(a). Specifically, L’Homme pleaded guilty to willfully and knowingly attempting to export from the United States the following eleven (11) items: one (1) Smith & Wesson model M&P pistol; one (1) CZ P-10F pistol; one (1) Taurus revolver; one (1) Glock model 26 pistol; one (1) Glock model 43 pistol; one (1) Glock model 30s pistol; one (1) Anderson AR-15 lower unit; one (1) Aero Precision AR-15 lower unit; and three (3) Glock model 23s pistols. As a result of his conviction, the Court sentenced him to 36 months in prison, a $200 special assessment, denied export privileges for a period of 6 years.
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August 16, 2024: 89 Fed. Reg. 66676: On November 17, 2023, the U.S. District Court for the Central District of California entered judgment against Yi-Chi Shih for violating (among other statutes) 50 U.S.C. 1705 (“IEEPA”) and 18 U.S.C. 1001. Specifically, Shih was convicted of knowingly and willfully exporting Monolithic Microwave Integrated Circuits (MMIC) from the United States to China without the required licenses. He was also found to have made false statements to federal agents. Yi-Chi Shih has been denied export privileges for 10 years.
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August 16, 2024: 89 Fed. Reg. 66676: On October 31, 2022, in the U.S. District Court for the Central District of California, Rami Najm Ghanem was convicted of violating 18 U.S.C. 371, 18 U.S.C. 554 and section 38 of the Arms Export Control Act (22 U.S.C 2778) (“AECA”). Specifically, Ghanem was convicted of having knowingly and willfully engaged in the business of weapons brokering activities without the required licenses, and of having engaged in negotiating and arranging contracts, purchases, sales, and transfers of defense articles, foreign defense articles, defense services, and foreign defense services, including for machine guns. Mr. Ghanem has been denied export privileges for 10 years.
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August 20, 2024: George Semerene Quintero (Semerene), 60, of Venezuela, plead guilty to conspiring to violate the International Emergency Economic Powers Act (IEEPA) for his role in a scheme to evade U.S. sanctions imposed on Petróleos de Venezuela S.A. (PDVSA), a Venezuelan state-owned oil company.
Semerene is scheduled to be sentenced on Nov. 5 and faces a maximum penalty of 20 years in prison and denied export privileges for 10 years. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
https://www.justice.gov/opa/pr/venezuelan-national-pleads-guilty-sanctions-evasion-scheme
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August 26, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) imposed a civil penalty of $44,750 against Streamlight, Inc. (Streamlight), a global manufacturer of portable lighting products located in Eagleville, Pennsylvania, to resolve three alleged violations of the antiboycott provisions of the Export Administration Regulations (EAR). Streamlight voluntarily self-disclosed the conduct to BIS, cooperated with the investigation by BIS’s Office of Antiboycott Compliance (OAC), and implemented remedial measures after discovering the conduct at issue, all of which resulted in a significant reduction in penalty.
Sanctions
Department of Commerce, Bureau of Industry and Security (BIS)
Implementation of Additional Sanctions Against Russia and Belarus Under the Export Administration Regulations (EAR)
August 27, 2024: 89 Fed. Reg. 68539: The Bureau of Industry and Security (BIS) made changes to the Russian and Belarusian sanctions under the Export Administration Regulations (EAR). This final rule expanded the scope of the Russia/Belarus-Military End User (MEU) Foreign-Direct Product (FDP) rule, and renamed it accordingly, so that the rule will also apply to transactions involving entities on the Entity List that pose a significant risk of involvement in the supply or diversion of items subject to the EAR to procurement networks for Russia’s and Belarus’s defense industry or intelligence services. This final rule also added controls on the export, reexport, or transfer (in-country) to or within Russia or Belarus of “software” for the operation of computer numerical control (CNC) machine tools. In addition, this final rule makes corrections and clarifications to certain aspects of the EAR’s Russia and Belarus sanctions.
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Department of the Treasury, Office of Foreign Assets Control (OFAC)
August 2, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 99A – “Authorizing the Wind Down of Transactions and Certain Transactions Related to Debt or Equity of, or Derivative Contracts Involving, MOEX, NCC, or NSD;” and Russia-related General License 100A – “Authorizing Certain Transactions Related to Debt or Equity or the Conversion of Currencies Involving MOEX, NCC, or NSD.”
General License 99A:
(a)All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of any transaction involving one or more of the following blocked entities are authorized through 12:01 a.m. eastern daylight time, October 12, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR):
(1) Moscow Exchange (MOEX);
(2) National Clearing Center (NCC);
(3) Non-Bank Credit Institution Joint Stock Company National Settlement Depository (NSD); and
(4) 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.
(b) All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the divestment or transfer, or the facilitation of the divestment or transfer, of debt or equity issued or guaranteed by any of the blocked entities identified in paragraph (a) (“Covered Debt or Equity”) to a non-U.S. person are authorized through 12:01 a.m. eastern daylight time, October 12, 2024.
(c) All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to facilitating, clearing, and settling trades of Covered Debt or Equity that were placed prior to 4:00 p.m. eastern daylight time, June 12, 2024 are authorized through 12:01 a.m. eastern daylight time, October 12, 2024.
(d) All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the wind down of derivative contracts entered into prior to 4:00 p.m. eastern daylight time June 12, 2024 that (i) include a blocked person described in paragraph (a) of this general license as a counterparty or (ii) are linked to Covered Debt or Equity are authorized through 12:01 a.m. eastern daylight time, October 12, 2024, provided that any payments to a blocked person are made into a blocked account in accordance with the RuHSR.
General License 100A:
(a) All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the divestment of debt or equity to a non-U.S. person, who is not a person whose property or interests in property are blocked, or the conversion of currencies, involving one or more of the following blocked entities that is acting solely as a securities, trade, or settlement depository, central counterparty or clearing house, or public trading market, are authorized through 12:01 a.m. eastern daylight time, October 12, 2024:
(1) Moscow Exchange (MOEX);
(2) National Clearing Center (NCC);
(3) Non-Bank Credit Institution Joint Stock Company National Settlement Depository (NSD); and
(4) Any entity in which one or more of the above persons own, directly or indirectly, individually or in aggregate, a 50 percent or greater interest.
https://ofac.treasury.gov/recent-actions/20240802 and
https://ofac.treasury.gov/media/933086/download?inline and
https://ofac.treasury.gov/media/933091/download?inline
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August 6, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Paraguayan tobacco company Tabacalera del Este S.A. (Tabesa) for providing financial support to Paraguay’s former president, Horacio Manuel Cartes Jara (Cartes), who OFAC sanctioned on January 26, 2023 for his involvement in corruption. Tabesa was designated pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world.
The following entity has been added to OFAC’s SDN List:
- Tabacalera Del Este S.A. of Paraguay.
https://ofac.treasury.gov/recent-actions/20240806 and
https://ofac.treasury.gov/recent-actions
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August 9, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action against 19 individuals, 14 entities, and one aircraft pursuant to Belarus-related Executive Order (E.O.) 14038. This action targets persons involved in supporting Russia’s war in Ukraine through military resource production and transshipment of goods to Russia, sanctions evasion on behalf of Belarusian defense entities, and revenue generation for Belarusian oligarchs in Alyaksandr Lukashenka’s inner circle. OFAC designated five of these targets—three individuals and two entities—pursuant to Russia-related E.O. 14024.
The Department of the Treasury’s Office of Foreign Assets Control (OFAC) also issued Russia-related General License 101, “Authorizing Civil Aviation Safety and Wind Down Transactions Involving Certain Entities Blocked on August 9, 2024.
General License 101:
- All transactions prohibited by the Belarus Sanctions Regulations, 31 CFR part 548 (BSR), and Executive Order (E.O.) 14024, 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 one or more of the following blocked entities (collectively, the “Blocked Entities”) are authorized through 12:01 a.m. eastern daylight time, September 10, 2024, provided that the goods, technology, or services that are provided, exported, or reexported are for use on aircraft operated solely for civil aviation purposes:
(1) Aviakompaniya Belkanto LLC;
(2) Aviakompaniya Rada LLC;
(3) UE RubiStar; or
(4) Any entity in which one or more of the above persons owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.
(b) All transactions prohibited by the BSR or E.O. 14024 that are ordinarily incident and necessary to the wind down of any transaction involving any of the Blocked Entities are authorized through 12:01 a.m. eastern daylight time, September 10, 2024, provided that any payment to a Blocked Entity is made into a blocked account in accordance with the BSR and the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).
The following individuals have been added to OFAC’s SDN List:
- Arkadiev, Vladimir Mikhailovich of Russia;
- Barabanov, Oleg Fedorovich of Belarus;
- Chivel, Yuri Aleksandrovich of Belarus;
- Chudakov, Vladimir Vladimirovich of Belarus;
- Dimenshtein, Arkady Samuilovich of Belarus;
- Gerasim, Oleg Romualdovich of Belarus;
- Ishchenko, Dmitry Olegovich of Belarus;
- Kastianok, Siarhei Uldadzimiravich of Belarus;
- Krokhotin, Evgeniy Yurievich of Belarus;
- Leschanka, Aliaksandr Mikalayevich of Belarus;
- Mikholap, Evgeniy Ivanovich of Belarus;
- Nareiko, Ivan Nikolaevich of Belarus;
- Pavlenko, Vladislav Nikolaevich of Belarus;
- Petrov, Oleg Vladimirovich of Belarus;
- Savruk, Viktoriya Orestovna of Belarus;
- Sidaruk, Siarhei Mikalaevich of Belarus;
- Yavorki, Aleksey Nikolaevich of Belarus;
- Zamulevich, Dmitriy Mikhailovich of Belarus; and
- Zharski, Aliaksandr Uladzimiravich of Belarus.
The following entites have been added to OFAC’s SDN List:
- ALC DISKOMS of Belarus;
- Aviakompaniya Belkanto LLC of Belarus;
- Aviakompaniya Rada LLC of Belarus;
- Joint Stock Company Plant Legmash of Belarus;
- KB Unmanned Helicopters LLC of Belarus;
- Limited Liability Company Tochanya Mekhanikaof Belarus;
- LLC Alyurtekh of Belarus;
- LLC Grosver Group of Belarus;
- LLC Laboratory of Additive Technologies of Belarus;
- LLC MOT of Belarus;
- OOO Ruchservomotor of Belarus;
- Ruzekspeditsiya LLC of Belarus;
- UE Rubistar of Belarus; and
- VLATE Logistik LLC of Belarus.
The following aircraft has been added to OFAC’s SDN List:
- EW-001PB; Aircraft Model 767-32KER; Aircraft Manufacturer’s Serial Number (MSN) 33968; Aircraft Tail Number EW-001PB (aircraft) [BELARUS-EO14038].
https://ofac.treasury.gov/recent-actions/20240809 and
https://ofac.treasury.gov/recent-actions
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August 12, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 102, “Authorizing Certain Transactions Involving VPower Finance Security (Hong Kong) Limited.”
General License 102:
(a) All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the transportation, delivery, or storage of currency; cash processing services; or maintenance of automated teller machines (ATMs) within Hong Kong involving VPower Finance Security (Hong Kong) Limited (“VPower”) are authorized through 12:01 a.m. eastern standard time, November 12, 2024.
(b) All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the provision and staffing of customer service centers for mass transit railway stations within Hong Kong involving VPower are authorized through 12:01 a.m. eastern standard time, November 12, 2024.
General License 5P:
(a) On or after November 12, 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/20240812 and
https://ofac.treasury.gov/media/933101/download?inline and
https://ofac.treasury.gov/media/933106/download?inline
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August 15, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned several companies, individuals, and vessels for their involvement in the shipment of Iranian commodities, including oil and liquefied petroleum gas (LPG), to Yemen and the United Arab Emirates (UAE) on behalf of the network of Iran-based, Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF)-backed Houthi financial official Sa’id al-Jamal. OFAC is also updating the Specially Designated Nationals and Blocked Persons List (SDN List) entry for the sanctioned vessel ARTURA (IMO: 9150365), which was responsible for shipping commodities for Sa’id al-Jamal, to reflect the changing of its name to OHAR.
The revenue from al-Jamal’s network helps finance the Houthis’ reckless targeting of shipping in the Red Sea and civilian infrastructure, which has led to grave consequences for both the region and the international community.
The following individuals have been added to OFAC’s SDN List:
- Khot, Arif Ibrahim of India.
The following entities have been added to OFAC’s SDN List:
- Arafat shipping company of the Marshall Islands;
- DP Shipping Limited of the Marshall Islands:
- K F D General Trading L.L.C. of the United Arab Emirates;
- Kai Heng Long Global Energy Limited of China;
- KDS Shipping Limited of the Marshall Islands;
- ONX Trading FZE of the United Arab Emirates; and
- Transmarine Navigation M SDN. BHD. Of Malaysia.
The following vessels have been added to OFAC’s SDN List:
- Divine Power (T8A4414) Chemical/Products Tanker Palau flag; Vessel Registration Identification IMO 9171357; MMSI 511101150 (vessel);
- Fengshun H9ZK) LPG Tanker Eswatini flag; Vessel Registration Identification IMO 9007386; MMSI 374350000 (vessel);
- Lady Liberty (3FTM2) LPG Tanker Sao Tome and Principe flag; Vessel Registration Identification IMO 9005065; MMSI 668116262 (vessel);
- LPG OM (T8A4415) LPG Tanker Palau flag; Vessel Registration Identification IMO 9160475; MMSI 511101151 (vessel);
- Parvati (3E3842) LPG Tanker Panama flag; Vessel Registration Identification IMO 8519966; MMSI 352002268 (vessel);
- Raha Gas (T8A4761) LPG Tanker Palau flag; Vessel Registration Identification IMO 8818219; MMSI 511101405 (vessel); and
- Victoria (S9Z6) LPG Tanker Sao Tome and Principe flag; Vessel Registration Identification IMO 9113379; MMSI 668116259 (vessel).
https://ofac.treasury.gov/recent-actions/20240815 and
https://ofac.treasury.gov/recent-actions
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August 20, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the former President of Haiti, Michel Joseph Martelly (Martelly), pursuant to Executive Order (E.O.) 14059 of December 15, 2021, “Imposing Sanctions on Foreign Persons Involved in the Global Illicit Drug Trade.”
The following individual has been added to OFAC’s Non-SDN Menu-Based Sanctions List:
- Martelly, Michel Joseph of Haiti.
https://ofac.treasury.gov/recent-actions/20240820
https://home.treasury.gov/news/press-releases/jy2542
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August 23, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 103 – “Authorizing Transactions Related to Imports of Certain Diamond Jewelry Prohibited by Executive Order 14068;” Russia-related General License 104 – “Authorizing Transactions Related to Imports of Certain Diamonds Prohibited by Executive Order 14068;” Russia-related General License 105 – “Authorizing Limited Safety and Environmental Transactions and the Unloading of Cargo Involving Certain Blocked Persons or Vessels;” Russia-related General License 106 – “Authorizing the Wind Down of Transactions Involving Certain Entities Blocked on August 23, 2024;” and Russia-related General License 107 – “Authorizing Limited Safety and Environmental Transactions Involving Certain Blocked Persons or Vessels.”
Additionally, OFAC issued one new, Russia-related Frequently Asked Question (FAQ 1189)
General License 103:
(a) All transactions prohibited by the determination of February 8, 2024 made pursuant to sections 1(a)(i)(A) and 1(a)(i)(D) of Executive Order 14068 (“Prohibitions Related to Imports of Diamond Jewelry and Unsorted Diamonds of Russian Federation Origin and Diamond Jewelry and Unsorted Diamonds Exported from the Russian Federation”) that are ordinarily incident and necessary to the importation and entry into the United States, including importation for admission into a foreign trade zone located in the United States, of diamond jewelry that was physically located outside of the Russian Federation prior to March 1, 2024, and not exported or reexported from the Russian Federation on or after March 1, 2024, are authorized.
General License 104:
(a) All transactions prohibited by the determination of February 8, 2024 made pursuant to section 1(a)(i)(B) of Executive Order (E.O.) 14068 (“Prohibitions Related to Imports of Certain Categories of Diamonds”) that are ordinarily incident and necessary to the importation and entry into the United States, including importation for admission into a foreign trade zone located in the United States, of the following categories of diamonds are authorized through 12:01 a.m. eastern daylight time, September 1, 2025, provided that the diamonds were physically located outside of the Russian Federation before, and were not exported or re-exported from the Russian Federation since:
(1) March 1, 2024 for non-industrial diamonds with a weight of 1.0 carat or greater; or
(2) September 1, 2024 for non-industrial diamonds with a weight of 0.5 carats or greater.
General License 105:
(a) All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to one of the following activities involving White Fox Ship Management FZCO or any entity in which White Fox Ship Management FZCO owns, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern daylight time, October 23, 2024, provided that any payment to a blocked person must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR):
(1) The safe docking and anchoring in port of any vessels in which any person listed in paragraph (2) of this general license has a property interest (the “blocked vessels”);
(3) The preservation of the health or safety of the crew of any of the blocked vessels; or
(4) Emergency repairs of any of the blocked vessels or environmental mitigation or protection activities relating to any of the blocked vessels.
(b) All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the delivery and offloading of cargo involving the blocked persons identified in paragraph (a) are authorized through 12:01 a.m. eastern daylight time, October 23, 2024, provided that the cargo was loaded prior to August 23, 2024.
General License 106:
(a) All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of any transaction involving one or more of the following blocked entities are authorized through 12:01 a.m. eastern daylight time, October 9, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR):
(1) General Technology Group Dalian Machine Tool Import & Export Co Ltd;
(2) Public Joint Stock Company Yakutskaya Toplivno Energeticheskaya Kompaniya (YATEC);
(3) Joint Stock Company Holdingovaya Kompaniya SDS Ugol;
(4) Public Joint Stock Company Ugolnaya Kompaniya Yuzhnyi Kuzbass;
(5) Joint Stock Company Stroiservis;
(6) Guangzhou Chiphome Information Technology Limited;
(7) Chengdu Jingxin Technology Co Ltd;
(8) Shenzhen Huashuo Semiconductor Co Ltd;
(9) AirBridgeCargo Airlines Limited Liability Company;
(10) Speech Technology Center Limited;
(11) Idronaut S.R.L.;
(12) GRK Bystrinskoye;
(13) Aktsionernoe Obshchestvo Evraz Nizhnetagilski Metallurgicheski Kombinat (NTMK);
(14) Aktsionernoe Obshchestvo Evraz Vanadi Tula;
(15) Aktsionernoe Obshchestvo Evraz Market;
(16) Limited Liability Company Volga Dnepr Airlines;
(17) Atran Limited Liability Company; or
(18) 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.
General License 107:
(a) All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to one of the following activities involving the blocked persons described in paragraph (b) are authorized through 12:01 a.m. eastern daylight time, October 23, 2024, provided that any payment to a blocked person must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR):
(1) The safe docking and anchoring in port of any vessels in which any person listed in paragraph (2) of this general license has a property interest (the “blocked vessels”);
(3) The preservation of the health or safety of the crew of any of the blocked vessels; or
(4) Emergency repairs of any of the blocked vessels or environmental mitigation or protection activities relating to any of the blocked vessels.
(b) The authorization in paragraph (a) of this general license applies to the following blocked persons listed on the Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List and any entity in which any of the following persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest:
(1) Ocean Speedstar Solutions OPC Private Limited; or
(2) Zara Shipholding Co.
FAQ 1189:
Q: What additional authorizations did Treasury issue on August 23, 2024 with respect to certain diamonds and diamond jewelry prohibited by Executive Order (E.O.) 14068?
A: Treasury issued two general licenses (GLs), GL 103 and GL 104, authorizing certain transactions with respect to certain diamonds and diamond jewelry that would otherwise be prohibited by E.O. 14068 in “Prohibitions Related to Imports of Certain Categories of Diamonds” (the “Diamonds Determination”) and “Prohibitions Related to the Imports of Diamond Jewelry and Unsorted Diamonds of Russian Federation Origin and Diamond Jewelry and Unsorted Diamonds Exported from the Russian Federation” (the “Diamond Jewelry and Unsorted Diamonds Determination”).
General License 103 authorizes the importation into the United States of diamond jewelry if that jewelry was physically located outside of the Russian Federation before, and not exported or reexported from the Russian Federation since, March 01, 2024. This means that the importation ban issued pursuant to the Diamond Jewelry and Unsorted Diamonds Determination under E.O. 14068 no longer applies to diamond jewelry that was located outside of Russia and not exported or reexported from Russia since March 01, 2024.
General License 104 authorizes through September 01, 2025 the importation into the United States of non-industrial diamonds, substantially transformed into other products outside of the Russian Federation, with a weight of 1.0 carat or greater, if those diamonds were physically located outside of the Russian Federation before, and not exported or reexported from the Russian Federation since, March 01, 2024. GL 104 also authorizes the importation into the United States of non-industrial diamonds, substantially transformed into other products outside of the Russian Federation, with a weight of 0.5 carats or greater if those diamonds were physically located outside of the Russian Federation before, and not exported or reexported from the Russian Federation since, September 01, 2024. This means that, for non-industrial diamonds that meet these parameters, the importation ban issued pursuant to the Diamonds Determination under E.O. 14068 no longer applies.
https://ofac.treasury.gov/media/933116/download?inline
https://ofac.treasury.gov/media/933121/download?inline
https://ofac.treasury.gov/media/933126/download?inline
https://ofac.treasury.gov/media/933131/download?inline
https://ofac.treasury.gov/media/933131/download?inline
https://ofac.treasury.gov/media/933136/download?inline
https://ofac.treasury.gov/faqs/1189 and
https://ofac.treasury.gov/recent-actions/20240823
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August 27, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) published one new, basic information Frequently Asked Question (FAQ 1190)
Q: Do U.S. sanctions target persons for engaging in political speech, religious practice, or other constitutionally protected activities?
A: OFAC does not sanction persons for their engagement in activities subject to U.S. constitutional protection, such as protected speech or religious practice or for their religious beliefs; nor do U.S. persons violate OFAC sanctions for engaging in such constitutionally protected activity. Furthermore, additional limitations and authorizations are in place to ensure that U.S. sanctions do not restrict the exchange of information or informational materials, or personal communication. The majority of OFAC sanctions programs are promulgated pursuant to the International Emergency Economic Powers Act, 50 U.S.C. 1701 et seq., which limits the authority to “regulate or prohibit, directly or indirectly . . . any postal, telegraphic, telephonic, or other personal communication, which does not involve a transfer of anything of value . . . or, the importation from any country, or the exportation to any country, whether commercial or otherwise, . . . of any information or informational materials.” 50 U.S.C. § 1702(b)(1), (3).
No authorization is necessary for U.S. persons to engage in activities that are not prohibited by or are otherwise exempt from sanctions. If you are concerned that potential sanctions may interfere with constitutionally protected activities, please reach out to OFAC for further guidance as described here.
https://ofac.treasury.gov/faqs/1190 and
https://ofac.treasury.gov/recent-actions/20240827
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