The DOJ’s New Corporate Enforcement Policy: A Practical Guide for Companies

By George (Jorge) Cánovas, J.D. • Vice President Compliance, FD Associates

On March 10, 2026, the U.S. Department of Justice released what may become one of the most consequential policy statements for corporate compliance in recent years: the first Department-wide Corporate Enforcement Policy (CEP) applicable to virtually all corporate criminal cases handled by DOJ (U.S. Department of Justice, Corporate Enforcement and Voluntary Self-Disclosure Policy, Mar. 10, 2026).

While the concept of rewarding voluntary disclosure and cooperation is not new, what makes this development significant is that the Department has now standardized the framework across all DOJ components. Until now, corporate enforcement policies varied depending on which division or U.S. Attorney’s Office handled the matter. The Criminal Division maintained its own corporate enforcement guidance, and other DOJ components applied similar but not always identical approaches.

The CEP is intended to address that fragmentation and provide greater uniformity, predictability, and transparency in corporate criminal enforcement (See DOJ CEP, Introduction and Background).

For companies, however, the policy accomplishes something even more practical. It effectively codifies the enforcement playbook, explaining how prosecutors will evaluate corporate misconduct and what actions can meaningfully reduce criminal exposure.

In many respects, the policy formalizes what experienced compliance professionals and defense counsel have long understood: when misconduct occurs, the outcome often depends less on the violation itself and more on how the company responds once the misconduct is discovered. This is the message we tell all our clients at FD Associates.

The Framework That Now Governs Corporate Criminal Enforcement

At the heart of the CEP is a structured analytical framework. When prosecutors evaluate corporate misconduct, they focus on three primary factors:

  1. Whether the company voluntarily disclosed the misconduct
  2. Whether the company fully cooperated with investigators
  3. Whether the company timely and appropriately remediated the misconduct

(See DOJ CEP, §I; Appendix A Decision Framework).

If a company satisfies all three elements, and there are no aggravating circumstances, the Department states that it will generally decline prosecution (See DOJ CEP, §I, Declination Path).
That outcome is significant. A “declination” means the company avoids criminal charges, although it may still be required to pay disgorgement or restitution tied to the misconduct. If one or more of these elements are missing, however, the enforcement outcome changes significantly. The policy outlines several alternative resolutions depending on the company’s actions and the severity of the misconduct (See DOJ CEP, §§II–III).

Voluntary Self Disclosure and the Importance of Timing

The most significant incentive in the policy revolves around voluntary self disclosure. The Department is attempting to encourage companies to come forward when they discover potential wrongdoing rather than waiting until regulators uncover the issue independently.
For disclosure to qualify under the CEP:

  • The disclosure must be made to the appropriate DOJ component
  • The misconduct must be previously unknown to the Department
  • The company must not already have a legal obligation to disclose
  • Disclosure must occur before there is an imminent threat of government discovery
  • Disclosure must be made within a reasonably prompt time after discovery

(See DOJ CEP, §I.A).

The policy also recognizes that companies may disclose misconduct before completing an internal investigation. DOJ explicitly acknowledges that early or initial disclosure may occur while the internal fact gathering process is still underway (See DOJ CEP, §I.A; Appendix A). This emphasis on timing reflects a broader enforcement philosophy. Early disclosure allows prosecutors to begin investigations sooner and potentially prevent additional harm.

Cooperation Expectations Under the Policy

Even when companies voluntarily disclose misconduct, they must demonstrate meaningful cooperation to receive the full benefits of the CEP.
The policy defines cooperation in relatively detailed terms. Companies are expected to provide all relevant non privileged facts related to the misconduct, including information gathered during internal investigations (See DOJ CEP, §I.B).
Cooperation typically includes:

  • Identifying individuals responsible for the misconduct
  • Preserving and producing relevant documents
  • Providing evidence located overseas
  • Facilitating interviews with employees and relevant third parties
  • Translating foreign language documents when necessary

(See DOJ CEP, §I.B; Appendix A).

Importantly, the policy states that cooperation credit does not require waiver of attorney client privilege or attorney work product protections (See DOJ CEP, §I.B). However, companies are expected to proactively identify relevant evidence rather than simply responding to government requests.

Remediation and the Role of Corporate Compliance Programs

The third pillar of the CEP focuses on remediation. Again, from FD Associates’ perspective this is a core and important remediation concept. Companies must demonstrate that they have corrected the underlying causes of misconduct and implemented measures designed to prevent recurrence. Remediation generally includes conducting a root cause analysis, disciplining individuals responsible for the misconduct, and strengthening internal compliance controls (DOJ CEP, §I.C). The Department also emphasizes the importance of effective compliance programs. Prosecutors will evaluate factors such as:

  • Independence of the compliance function
  • Adequacy of compliance resources
  • Effectiveness of internal reporting channels
  • Ongoing testing and monitoring of compliance controls
  • Leadership support for compliance initiatives

(See DOJ CEP, §I.C; U.S. Sentencing Guidelines §8B2.1).

In practice, DOJ is assessing whether compliance is integrated into corporate governance rather than functioning as a purely administrative exercise, i.e. temporary fix.

The Three Paths to Resolution

The CEP outlines three potential enforcement outcomes depending on how a company responds to misconduct.

A. Declination

A declination may occur when a company voluntarily discloses misconduct, fully cooperates with investigators, and implements effective remediation measures, and when no additional aggravating factors are present (See DOJ CEP, §I).

Even in these cases, the company must typically pay disgorgement, forfeiture, or restitution tied to the misconduct (See DOJ CEP, §I; Appendix A).
Declinations are publicly announced.

B. Near Miss Cases

When a company cooperates and remediates but fails to qualify for full voluntary disclosure, or when limited aggravating factors exist, DOJ may resolve the matter through a Non Prosecution Agreement (See NPA and DOJ CEP, §II).

Under the policy, these cases may include:

  • NPA terms shorter than three years
  • No independent compliance monitor
  • Penalty reductions between 50 and 75 percent from the low end of the Sentencing Guidelines fine range

(See DOJ CEP, §II; U.S. Sentencing Guidelines Chapter 8).

C. Other Cases

If companies fail to self-disclose misconduct or they do not meaningfully cooperate, prosecutors retain discretion to pursue traditional criminal resolutions, including:

  • Deferred prosecution agreements
  • Criminal charges
  • Compliance monitors
  • Financial penalties

(See DOJ CEP, §III).

Even in these cases, companies that demonstrate meaningful cooperation may still receive penalty reductions of up to 50 percent (DOJ CEP, §III; U.S. Sentencing Guidelines Chapter 8).

How the Policy Changes the Enforcement Landscape

Although the CEP builds on earlier DOJ policies, it this new version introduces several structural changes.

First, the Department has established a single enforcement framework across all DOJ components, reducing the uncertainty companies previously faced when dealing with different prosecutorial offices.

Second, the policy introduces a formal decision framework, including a flow chart that outlines enforcement outcomes based on disclosure, cooperation, and remediation (DOJ CEP, Appendix A).

Third, the policy strengthens incentives for early disclosure by encouraging companies to report misconduct before completing internal investigations.

Fourth, the CEP provides clearer guidance on potential penalty reductions tied to cooperation and remediation (DOJ CEP, §§II–III).

Finally, the policy integrates aspects of DOJ’s corporate whistleblower program. If an employee reports misconduct internally and also reports it to DOJ, a company may still qualify for a declination if it self reports within 120 days of receiving the internal report (DOJ CEP, Whistleblower Provision).

How the CEP Interacts With Export Control Enforcement

For companies operating in export controlled industries such as aerospace, defense, and advanced technology, the CEP can also influence export enforcement cases. The Corporate Enforcement Policy is a DOJ criminal enforcement policy, not an export control regulation.

Companies operating in defense, aerospace and advanced technology sectors often make coordinated filings with BIS, DDTC and DOJ for a serious enforcement matters.
Administrative export violations are typically handled either by the Bureau of Industry and Security (BIS) under the Export Administration Regulations (EAR), or the Department of States’s Directorate of Défense Trae Controls Compliance (DTCC), under the International Traffic In Arms Regulations (ITAR) depending on whether the items involved are controlled as dual use or commercial items under the EAR or are classified as defense article and defense services under the U.S. Munitions List (15 CFR §§730-774; 22 CFR Parts 120-130).

Enforcement actions are governed primarily by:

  • EAR Part 764 (Violations)
  • EAR Part 766 (Administrative Enforcement Proceedings) (See 15 C.F.R. §§764–766).

ITAR Enforcement actions, administered nu the DDTC with the U.S. Department of State, are governed primarily by:

  • ITAR §127.1 (Violations)
  • ITAR §127.10 (Civil penalties)
  • ITAR §127.7 (Debarment)
  • ITAR §128 (Administrative Procedures)

(See 22 CFR Parts 127-128)

Under these frameworks, BIS or DDTC may impose a range of civil penalties and sanctions including denial orders, debarment orders, license revocations, and other administrative sanctions. (See 15 CFR Part 764; 22 CFR Part 127)

However, serious export control violations under the EAR or ITAR are often referred to the Department of Justice for criminal prosecution, particularly when violations involve willful conduct, conspiracy, sanctions evasion, national security risks, or diversion schemes (15 C.F.R. §764.2; DOJ CEP applicability).

Once DOJ becomes involved, the CEP framework becomes relevant. Prosecutors may evaluate the company using the same three factors that apply in other corporate criminal cases: voluntary disclosure, cooperation, and remediation.

Export enforcement cases frequently involve parallel investigations involving multiple agencies, including the Department of Justice, the Bureau of Industry and Security, and the Treasury Department’s Office of Foreign Assets Control.

In those situations:

  • BIS may purse civil penalties or denial orders under the EAR
  • DDTC may impose civil penalties, consent agreements, or debarment under the ITAR
  • DOJ evaluates potential criminal liability using the CEP framework

The Practical Implications for Companies

The CEP does not radically alter the Department’s enforcement philosophy. Instead, it formalizes principles that prosecutors have increasingly applied over the past decade.
What has changed is the clarity with which those principles are now articulated by the DOJ.

Companies that detect misconduct quickly, escalate concerns internally, conduct credible investigations, disclose violations promptly, cooperate fully with investigators, and remediate underlying compliance weaknesses may significantly reduce enforcement exposure.
Companies that delay disclosure or fail to cooperate may face far more serious consequences.

Perhaps the most important lesson from the CEP is that compliance programs are no longer merely defensive tools designed to satisfy regulators. They are now central to enforcement outcomes.

When misconduct occurs, the credibility of a company’s compliance program, the speed of its response, and the seriousness of its remediation efforts may determine whether prosecutors pursue criminal charges or decline the case entirely.

For corporate leadership, the implications are clear. The effectiveness of a company’s compliance infrastructure can influence not only whether misconduct is detected, but also how the government ultimately chooses to respond.

The Role of Experienced Compliance Advisors

For many organizations, particularly those operating in highly regulated sectors such as aerospace, defense, advanced technology, and manufacturing, responding to potential violations requires navigating overlapping enforcement regimes and complex disclosure decisions. Determining whether an issue should be handled internally, disclosed through administrative channels such as a BIS voluntary self-disclosure, or elevated to the Department of Justice under the CEP framework often requires careful legal and compliance analysis.

Advisory firms with deep experience in export controls, corporate compliance, and enforcement matters can play an important role in helping companies assess risk, conduct internal investigations, and develop remediation strategies that align with regulatory expectations.

FD Associates, Inc., for example, works with companies to evaluate potential export control violations under the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR), develop voluntary disclosure strategies, and strengthen compliance programs designed to prevent future violations. This includes assisting organizations with internal investigations, root-cause analyses, compliance program design, and engagement with enforcement authorities where appropriate.

In an enforcement environment where the timing of disclosure, the quality of cooperation, and the credibility of remediation efforts can significantly influence outcomes under the DOJ Corporate Enforcement Policy, experienced compliance guidance can help companies respond to potential issues with greater clarity and confidence.

 

SYNOPSIS of the New CEP

DOJ has just clarified the corporate enforcement playbook. Its new Department-wide Corporate Enforcement Policy makes one thing clear, when misconduct occurs, prosecutors will focus on three questions: did the company voluntarily disclose it, fully cooperate, and meaningfully remediate. Companies that do may avoid criminal charges entirely. For organizations in regulated sectors like aerospace, defense, and advanced technology, where export control issues can quickly involve BIS, DDTC, and DOJ, how a company responds can determine the outcome. That is exactly where FD Associates helps companies act quickly and strategically, assessing violations, guiding disclosures, and strengthening compliance programs before enforcement decisions are made.

The DOJ’s New Corporate Enforcement Policy: A Practical Guide for Companies Read More »

When the Compliance Role Goes Unfilled, and Everyone Thinks They Can Manage

ByGeorge (Jorge) Cánovas, J.D. • Vice President Compliance, FD Associates

This happens constantly, across industries, geographies, and company sizes.

The compliance lead in your company leaves. The departure may be orderly or abrupt, but the organizational response is usually the same. There is no immediate fallout. No regulator calls. No customer escalations. The business keeps moving. Leadership concludes, sometimes on purpose and sometimes by inertia, that the role can remain unfilled, at least for a while. After all, nothing broke.

That initial calm is misleading, but understandably so. Compliance is one of the few functions whose success is defined almost entirely by the absence of visible events. When it works, nothing happens. No blocked transactions. No uncomfortable meetings. No late night emails to outside counsel. The system hums quietly in the background.

So when the role disappears and the system does not immediately fail, it creates a false sense of resilience and comfort.

What follows is not dramatic. It is incremental, structural, and easy to miss.

First, decision ownership begins to fragment.

Compliance decisions that once had a clear escalation point disperse across the organization. Legal weighs in on legal exposure. Operations focuses on delivery. Sales pushes for speed. Engineering frames issues as technical rather than regulatory. Everyone is acting rationally within their own incentives, but no one is responsible for synthesizing those perspectives into a defensible compliance judgment.

As a result, decisions start defaulting to consensus or momentum rather than analysis.

This is what happens when a control function designed to slow decisions just enough to test assumptions, quietly disappears. The organization still decides, but without a consistent framework for risk tolerance.

Several years after I left a company, I received a call from their newly hired CMMC lead. She was sharp, diligent, and trying to understand how the organization handled classification, escalation, and risk decisions. Her questions were basic, but telling. How were products classified? Which business units owned which decisions? What processes existed for handling gray areas?

The answer, awkwardly, was that all of this already existed.

The classification logic had been built. Risk matrices had been issued to the business units. Compliance plans had been rolled out, reviewed, and socialized. Decision trees existed for escalation and documentation. It had been implemented while I was there.

But by the time she arrived, it had all been forgotten in practice.

Not repealed. Not deleted. Just put away. The business units had been given the tools, but once “the compliance guy” was gone, the tools stopped being used. Without someone maintaining cadence, context, and judgment, the system quietly decayed.

No one had decided to abandon compliance. It simply stopped living.

That call was not about rebuilding from scratch. It was about reconstructing intent. Why those controls existed. What risks they were designed to manage. Where the organization had already learned hard lessons it was now relearning again.

That is what gets lost when compliance leadership disappears. Not rules, but reasoning.

Second, edge cases quietly become the norm.

Most compliance exposure does not arise from obvious violations. It arises from gray areas. Product modifications, new customer use cases, unusual deal structures, or cross border collaborations that do not fit neatly into prior models. A functioning compliance role is designed to live in those gray zones, to ask uncomfortable questions early, and to document why a particular path was chosen.

Without that role, gray areas are resolved ad hoc. One team treats them as low risk. Another escalates them as urgent. Precedent becomes inconsistent. Over time, the organization loses the ability to explain not just what it decided, but why it decided it.

Third, compliance quietly shifts from governance to negotiation.

Without clear authority, compliance becomes something teams work around rather than through. Questions are framed to obtain approval rather than analysis. Risk is described narrowly. Facts are simplified. This is rarely malicious. It is human behavior responding to organizational signals. If no one owns the function, the cost of slowing down feels more immediate than the cost of getting it wrong. It is over time that this becomes the norm and this is how exposure accumulates without triggering alarms.

Eventually, something happens, and the symptoms become visible.

Approvals take longer and longer. Internal emails grow more cautious. Outside counsel appears on threads where they never used to be needed. Customer diligence responses become harder to assemble. Leadership senses that decisions carry more weight and less confidence, even when no single issue appears catastrophic.

At this point, many organizations still believe they are managing. In reality, they are compensating for a missing function by absorbing cost elsewhere, and quite frankly, this is where the response from companies often goes wrong.

The answer is not always to rush into a permanent hire, especially when the organization needs immediate structure, restored judgment, and credibility with customers or regulators. This is where experienced external compliance leadership, such as FD Associates, can step in and stabilize the system while the right permanent hire is identified for the business.

The key is to getting things back in order. That means reestablishing clear escalation paths. Re-grounding classification and risk frameworks. Dusting off compliance plans and making them operational again. Recreating institutional memory before it is lost entirely. And doing so in a way that supports the business rather than slowing it to a crawl.

Just as importantly, it does not end there. Part of restoring a healthy compliance function is helping the organization decide what it actually needs long term, and helping recruit and transition to a new compliance lead who inherits a functioning system rather than a mess.

Organizations that do this early tend to recover quickly. Decisions become cleaner. Risk tolerance becomes explicit. Teams regain clarity on where compliance fits into daily operations, not as friction, but as an enabling control.

Leaving a compliance role unfilled often feels manageable because the consequences are deferred. But deferred does not mean avoided. It just means the bill arrives later.

When the Compliance Role Goes Unfilled, and Everyone Thinks They Can Manage Read More »

New Foreign UAS Systems Shutdown by the FCC

ByGeorge (Jorge) Cánovas, J.D. • Vice President Compliance, FD Associates
LinkedIn
This article was originally posted to FD Associates’ LinkedIn page .

In late December 2025, the Federal Communications Commission (FCC) issued a national security determination (Pubic Notice DA-25-1086) concluding that unmanned aircraft systems and certain UAS critical components produced outside the United States pose an unacceptable risk to national security and to the safety and security of U.S. persons. The determination focused on specific risks tied to unauthorized surveillance, sensitive data collection, remote system access, and the ability to alter, degrade, or disable system functionality through software or firmware updates after deployment.

Based on that determination, the FCC placed foreign-produced UAS and UAS critical components on its Covered List, prohibiting those items from operating in the United States, unless a specific national security determination is issued by the Department of Defense or the Department of Homeland Security concluding that a particular system or component does not present those risks.

The national security are issued through an interagency national security review led by the Department of Defense or the Department of Homeland Security, typically involving intelligence, cybersecurity, and supply-chain risk offices, and focus on how a specific UAS or critical component is designed, manufactured, controlled, updated, and accessed over its lifecycle. The review examines communications architecture, component origin, firmware and software update authority, remote access capabilities, data collection and transmission pathways, and the ability to alter or disable system functionality after deployment.

If the reviewing department concludes that the system or component does not present the identified national security risks, it issues a specific determination covering that system or class of systems, which the FCC then implements ministerially by updating the Covered List, rather than through an FCC-run application, appeal, or waiver process.

The practical effect is immediate for new UAS equipment seeking authorization. Covered drones and components may not be imported into the United States unless they are first cleared through the applicable national security review process. The FCC will not grant equipment authorization for covered systems to operate in the United States, and operating such systems without authorization is unlawful.

The issue here is not flight safety or airspace regulation, but the communications systems embedded in these platforms and the national security risks they present.

FCC Covered UAS and Critical Components

Rather than publishing a finite or part-numbered list, the FCC adopted a functional approach focused on system operation, communications, and control. Any foreign-produced component that is essential to the operation of a UAS, particularly where it enables communications, navigation, control, or data transmission, may fall within scope.

Covered items include, but are not limited to:

  • Complete unmanned aircraft systems and associated elements required for safe and effective operation
  • Communications radios and radio frequency transmission equipment
  • Data transmission and telemetry devices
  • Flight controllers and integrated control units
  • Ground control stations and UAS controllers
  • Navigation systems, including GPS, GNSS, and inertial navigation units
  • Sensors, payload sensors, and cameras
  • Motors and motor controllers
  • Batteries and battery management systems
  • Associated software and firmware required for operation, control, communications, or updates

Because the scope is functional rather than categorical, a single foreign-produced communications or control component can prevent FCC authorization for an entire drone system, regardless of where final assembly occurs or how the product is marketed.

Recent FCC clarification adds a limited, temporary carve-out. In a January 7, 2026 Public Notice (See FCC DOC DA-26-22A1), the FCC announced that certain foreign-produced UAS and UAS critical components will be removed from the Covered List on a time-limited basis, including systems appearing on the “Defense Contract Management Agency Blue UAS Cleared List” (See The Blue UAS Cleared List and Blue UAS Framework) and products that qualify as domestic end products under the Buy American Standard. These removals are not permanent. They expire on January 1, 2027, after which covered foreign-produced UAS and components will again be ineligible for FCC authorization absent a new national security determination. The FCC emphasized that these temporary allowances do not reflect a change in its underlying national security assessment and should be viewed as transitional measures rather than long-term relief.

What the Rule Does and Does Not Do

The FCC is not enforcing export laws. Its action is based on communications authorization and national security risk. The consequence for drone companies is straightforward: new systems containing covered foreign-produced components will face challenges upon importation and to lawfully operated in the United States.

The rule does not turn on whether a drone is described as civil or commercial, nor does it depend on historical acceptance of a platform. The analysis focuses on foreign production and the presence of covered functionality tied to foreign communications, system control, or data transmission.

How This Plays Out in Practice

In practice, the FCC rule often surfaces earlier in the business cycle than companies expect.
A product, component, or fleet is first identified for import, sale, deployment, or continued operation in the United States. This may be tied to a new product launch, a customer procurement, or a review of systems already in use.

The system is then examined at the component level to identify foreign-produced elements tied to communications, navigation, control, data transmission, or firmware. This is frequently where issues surface, particularly with radios, GNSS modules, flight controllers, sensors, and embedded software.

If the system contains covered foreign-produced UAS or critical components, FCC equipment authorization is unavailable unless a specific national security determination applies. At that point, the question is no longer abstract compliance, but whether the product can be imported or lawfully operated at all.

For existing fleets, this risk arises primarily when systems are modified, upgraded, or otherwise require new or amended FCC authorization. For new products, it can halt sales, integration, or deployment entirely.

Companies are then forced into business decisions. Options may include redesigning systems, re-sourcing components, segmenting product lines for different markets, adopting alternative platforms, or exiting certain use cases altogether. These decisions are driven by technical feasibility, cost, and time to market, not regulatory preference.

What the FCC Actually Examines During Authorization

FCC authorization reviews are grounded in detailed technical disclosures. Companies are required to explain, with specificity:

  • How the drone communicates with ground control stations and other systems
  • Which components enable command, control, telemetry, navigation, and data transmission
  • Where those components are designed, manufactured, and integrated
  • How firmware and software updates are delivered and who controls them
  • Whether the system allows remote access, diagnostics, or configuration after deployment
  • How data is collected, stored, transmitted, and accessed

These are not peripheral details. They go directly to whether the FCC will authorize operation of the system in the United States.

Why This Is More Complicated Than It First Appears

For many drone companies, risk does not reside solely in the airframe. It resides in subsystems selected years earlier for cost, performance, or availability, long before national security screening became decisive.

Communications modules, navigation units, sensors, and firmware stacks are often globally sourced and deeply embedded in the system architecture. As a result, a drone assembled in the United States can still be disqualified because of a single foreign-produced radio, control board, or software dependency that cannot easily be replaced without redesign.

The rule also reaches beyond new sales. Fleet operators, integrators, and service providers must consider whether systems already deployed can continue operating lawfully if they rely on covered components that cannot receive authorization. Replacement parts, upgrades, firmware changes, or shifts in who controls software updates are often the trigger point. Systems that were lawfully authorized at deployment can face new scrutiny when their configuration, control pathways, or update mechanisms change over time.

What This Means for U.S. Drone Companies

U.S. manufacturers, distributors, integrators, operators and brokers must now look at end platforms and a component-level view of their products and operations.

Companies that manufacture drones domestically but rely on foreign-produced critical components face the same authorization barrier for new systems as fully foreign-manufactured systems. Companies importing foreign-produced drones for resale, integration, or specialized use must assess whether those platforms can be authorized at all.

The impact is especially acute where civil drones are being used or adapted for government, public safety, critical infrastructure inspection, or defense-adjacent missions. In those contexts, national security risk is assessed more conservatively, and tolerance for foreign control or access is lower.

Downstream activities matter as well. Software updates, configuration changes, maintenance, and technical support can all be relevant where authorization turns on who controls system behavior over time.

For some companies, compliance will require redesign, re-sourcing, or segmentation of product lines. For others, the rule may eliminate U.S. market access for certain platforms entirely.

The Bottom Line

The FCC has not issued a blanket ban on drones. It has conditioned U.S. market access on national security clearance for foreign-produced unmanned aircraft systems and critical components.

For drone companies operating in or selling into the United States, the issue is no longer abstract. Product architecture, component sourcing, system control, and lifecycle management now determine whether a drone can be imported, authorized, or lawfully operated.

This is an operational gate to the U.S. drone market, and it requires a level of technical and supply-chain scrutiny that many companies have not previously needed to apply.

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New Foreign UAS Systems Shutdown by the FCC Read More »

When In-Country Still Counts as an “Transfer” or “Export”, and Why Small Oversights Add Up

ByGeorge (Jorge) Cánovas, J.D. • Vice President Compliance, FD Associates

A colleague of mine, Shahab Wahdatehagh at Descartes, recently flagged something on LinkedIn that many teams still underestimate. Transferring EAR-controlled items within the same country can still require an export license. This is not a gray area, as the regulations are clear. Yet it continues to be missed, even by experienced organizations. And in my experience, these misses rarely come from bad intent. People do not wake up in the morning planning to violate export law. They happen because the rules are not consistently understood across everyone involved in the transaction. When training is uneven, outdated, or limited to a small group, gaps form. That is usually where the error starts.

The point is simple, but the consequences are certainly not.

The reflex that causes trouble: “It’s just EAR99”

EAR99 often gets treated as shorthand for low risk. No license from the USA. No issue transfer in country. Move on. That assumption is wrong and can cause many problems.

The EAR covers far more than cross-border shipments. Those in-country transfers can still trigger licensing requirements, especially where end users or end uses are restricted. The General Prohibitions apply broadly, and classification alone does not get you out of trouble.

General Prohibitions in Part 736 and the Entity List makes this pretty clear. If a party appears in Supplement No. 4 to Part 744, almost any item subject to the EAR, including EAR99, requires a license for export, reexport, or in-country transfer, and exceptions are rare. Where the item is physically located does not change the obligation, who is in possession does.

Where compliance usually breaks down

Exports from the U.S. tend to get careful review. U.S. Customs, freight forwarders, and paperwork force the issue. Once abroad, in-country movements feel routine. Internal transfers. Long-standing partners. Very familiar workflows. And that is where the attention to details drops. Assumptions are made and transactional compliance is not validated against the EAR.

In international settings, responsibility for U.S. export compliance may be passed around. Sales assumes operations handled it. Operations assumes legal reviewed it. Legal assumes compliance screened it. Compliance trusts the system. No one actually owns the call. Hence problems can arise, whether its EAR99 or an item under the EAR with an ECCN or an ITAR item. Lack of procedures and inventory management are the culprits.

At FD Associates, we see this across the board. Large primes. Mid-size manufacturers. Fast-growing companies. Scale does not protect you. In some cases, it makes things worse.

Recent BIS enforcement actions, including the Haas Automation case, show how quickly this can escalate. In-country activity tied to Entity List parties led to a civil penalty of roughly $1.5 million, even with cooperation. Voluntary self-disclosure can help reduce penalties, but it does not erase the financial hit, the reputational damage, or the internal disruption that follows.

Why practical training matters

At FD Associates, we focus on the situations that actually cause violations. In-country transfers. Known customers. Products everyone thinks they understand. We walk through how General Prohibitions, Entity List restrictions, and end-user controls intersect in real workflows, not just in theory.

I have said this many times, most violations are not intentional. They happen because people move fast on what feels routine and do not realize a control applies. The transactions that look the safest are often the riskiest, precisely because no one slows down to question them.

Compliance protects revenue

Compliance is not just a cost. It protects the bottom line, and violations mean giving back money already earned. CEO’s and Boards do not like that equation. Errors like this mean time lost to remediation, audits, and regulator follow-up. A solid compliance program with inventory controls and tracking plus regular auditing allows teams to operate with confidence instead of hesitation or guesswork.

Experience and consistency make the difference

Export compliance is not a one-time exercise. It builds through institutional knowledge, sound judgment, and steady engagement with how the rules are actually enforced.

The strongest programs are not defined by the length of their policies. They are built on experienced people, clear ownership, practical and ongoing training, and leadership that understands a simple truth. - Small oversights add up. And in export controls, they add up fast.

For organizations looking to reduce this kind of risk, consistent and practical training matters. At FD Associates, we work with companies to deliver tailored, role-specific training for the people who actually touch these decisions, from sales and operations to engineering and compliance. We also offer scheduled training courses for teams and individuals who want to strengthen their understanding without building something from scratch. The goal is simple, to help organizations catch the small issues early, before they turn into costly ones.

When In-Country Still Counts as an “Transfer” or “Export”, and Why Small Oversights Add Up Read More »

FEBRUARY 2025 EXPORT CONTROLS AND COMPLIANCE UPDATES

LATEST EXPORT CONTROLS AND COMPLIANCE UPDATE

February 2025

This newsletter is a listing of the latest changes in export control regulations through February 28, 2025. The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

See also our “Latest Sanctions Fines & Penalties” section below for an update on companies and
persons denied export privileges by the United States Government.

In this newsletter, we have added a specific DDTC FAQs section, we think this will be of interest to our readers.

 

REGULATORY UPDATES

President

President Trump issues “America First Investment Policy” Presidential Memorandum

February 21, 2025: President Trump issued a memorandum “America First Investment Policy” (the Investment Memo or Memo), in which the President aims to modify the US Government’s approach to inbound and outbound foreign investment to address national security threats.

The Investment Memo reconfirms the United States’ longstanding commitment to open investment to encourage domestic development of key advanced technologies and takes steps to streamline investments by trusted allies and partners. Among other things, it seeks to establish the “fast tracking” of certain investment and environmental reviews and seeks to minimize the use of “open ended” mitigation agreements.

Consistent with evolving US policy over recent years, the Memo focuses on the risks of “predatory investments” by foreign adversaries, including the People’s Republic of China (China), asserting that China has engaged in “exploiting United States capital to develop and modernize its military, intelligence, and other security apparatuses.” Accordingly, the Memo directs that the Committee on Foreign Investment in the United States (CFIUS) tighten the US foreign investment regime. The specific actions set forth include: expanding CFIUS’ authority over so-called “greenfield” investments, expanding the scope of “emerging and foundational” technologies addressed by CFIUS; and “restrict[ing] PRC-affiliated persons from investing in United States technology, critical infrastructure, healthcare, agriculture, energy, raw materials, or other strategic sectors,” including protection for “United States farmland and real estate near sensitive facilities.”

The Investment Memo is not self-executing, and the policy changes it sets forth will not immediately enter into force and effect. To this end, the Memo directs relevant federal departments and agencies, including the Department of the Treasury (Treasury) which chairs CFIUS, to make specific changes to US investment policy, covering investments not only involving China but also Hong Kong, Macao, Cuba, Iran, North Korea, Russia, and the “regime of Venezuelan political Nicolas Maduro” (perhaps suggesting that private investments in Venezuela may be treated differently). The Memo contemplates the promulgation of new regulations and, in a few cases, consultations with Congress about required changes in law. Therefore, as a practical matter, foreign investors and US firms considering outbound investment should recognize that it will likely to be several months before the Investment Memo is implemented fully.

Other than the modifications detailed below, the Investment Memo does not appear to change the fundamental approach to review of foreign investments by CFIUS, which is based on an analysis of the national security risk posed as a consequence of (a) the threat, if any, posed by the foreign investor and its host country, and (b) the vulnerability of the US business being acquired. However, the notion expressed in the memo that “[e]conomic security is national security” (at least in the context of Chinese investment practices) suggests the possibility of a more direct role for economic security considerations in future CFIUS and outbound investment reviews.

 

I. Facilitating Investments by Allies and Partners.

The Investment Memo emphasizes the importance of foreign investment in the United States from allies and partners and calls for measures to facilitate such investment. At the same time, it notes that, with respect to investments in US businesses involved in sensitive areas (i.e., critical technology, critical infrastructure, and personal data), the Trump Administration plans to ease restrictions in proportion to the foreign investor’s “verifiable distance and independence from the predatory investment and technology-acquisition practices” of China and other foreign adversaries. More specifically:

  • Fast-Track – Beyond the Existing 30-Day “Declaration” Process. The Trump Administration intends to create an expedited “fast-track” process, which will be based on objective standards. This expedited process is intended to facilitate greater investment from “specified allied and partner sources in United States businesses involved with United States advanced technology and other important areas.” It will be subject to certain security provisions, including that the foreign investor avoid partnering with US foreign adversaries. There already is a 30-day “declaration” process that is essentially a form of fast track. The crucial question about an additional “fast track” process is whether it would apply to a class of cases that otherwise would go through the longer “notice” process.
  • Expedited Environmental Review. The Investment Memo provides that the US government will “expedite” environmental reviews for any investments in the United States over $1 billion.
  • Streamline Use of Mitigation Agreements. In recent months, private sector firms have expressed concern over the more robust use of “mitigation” agreements by the Biden Administration (i.e., in cases where the requirements under such agreements are adopted to mitigate national security risks relating to an investment). In an apparent effort to address these concerns and dial back Biden-era initiatives, the Investment Memo states that the Trump Administration will “cease the use of overly bureaucratic, complex, and open-ended ‘mitigation’ agreements for United States investments from adversary countries.” The Memo specifies that mitigation agreements should consist of “concrete actions that companies can complete within a specific time, rather than perpetual and expensive compliance obligations.” This suggests that the current CFIUS practice of requiring periodic third-party audits to verify compliance by parties with mitigation agreements may be changed. Whether the Trump Administration plans to modify the numerous existing mitigation agreements or simply change the approach with respect to new agreements remains to be seen.
  • Passive Investment Encouraged. The Investment Memo declares that the United States will continue to “welcome and encourage” passive investments by “all foreign persons,” including such investments by investors from adversary countries. In this regard, current CFIUS rules do not apply to certain non-controlling investments by foreign persons whereby the foreign person is not afforded specified governance or management rights or access to non-public technical information relating to the business. Whether additional measures will be taken to facilitate such investments remains to be seen.

 

  1. Inbound and Outbound Investments Involving China and Other Foreign Adversaries.

    The Investment Memo also aims to address the national security risks presented by predatory investment by foreign adversaries, which is “often concealed and through partner companies or investment funds in third countries.” The Memo states that foreign adversaries, including China, are targeting US technology and infrastructure, among other US “crown jewels.” In particular, the Memo targets China’s “Military-Civil Fusion” strategy, which is designed to utilize civilian Chinese companies and research institutions in support of its military and intelligence activities.
    Consistent with these policy concerns, the Investment Memo calls for the following additional actions to supplement the existing robust CFIUS review of foreign investments from China and other foreign adversaries and the new outbound restrictions on US investments in China and elsewhere).Inbound Investments:

  • Restrictions on Chinese Investments in Certain Sectors. Notably, the Investment Memo states that the United States will use “all necessary legal instruments, including . . . CFIUS . . . to restrict China-affiliated persons from investing in US technology, critical infrastructure, healthcare, agriculture, energy, raw materials or other sectors.” Of course, CFIUS already conducts robust reviews of Chinese investments in these and other business areas. Whether the reference to these investments will presage additional restrictions remains to be seen, but it is possible that other “restrictions” (e.g., such as a presumption of denial) could be applied in these areas (as was suggested by a Trump-aligned think tank during the campaign). The fact that the Investment Memo uses the word “restrictions” as distinct from “prohibition” also suggests that the changes will be tailored in nature.
  • Expansion of CFIUS Authority over Greenfield Investments, Access to US Talent and Operations, and “Emerging and Foundational” Technologies. The Investment Memo indicates that the Trump Administration will consult with Congress over broadening its authority over certain types of investments. Under current law and regulations, CFIUS has authority over the acquisition of existing US businesses, not purely “greenfield” foreign investments (e.g., where a foreign party incorporates a new entity, builds a factory, licenses technology, and commences operations). Thus, the Investment Memo signals an effort to expand CFIUS authority into this area. While not directly stated, the reference to restricting foreign adversary access to United States “talent and operations” in sensitive technologies may be an effort to limit ongoing engagement by US universities and non-profit entities with Chinese counterparts in research and development areas.

 

 

Outbound Investments:

  • Additional Restrictions on Outbound Investments in China (Beyond the Recent Biden Administration Restrictions). The Trump Administration is also considering new restrictions on US outbound investment in key Chinese sectors such as semiconductors, artificial intelligence, quantum, biotechnology, hypersonics, aerospace, advanced manufacturing, directed energy, and other areas implicated by China’s Military-Civil Fusion strategy. Viewed in context, the Investment Memo states that the Administration will review the sufficiency of, and will consider expansion of, the Biden Administration’s outbound investment rules, which took effect in January 2025. The Biden rules either prohibited or required notification of certain investments by US persons into Chinese companies with certain operations in the semiconductors and microelectronics, artificial intelligence, and quantum computing sectors. The potential expansion of Biden-era outbound investment rules could involve the following:
    • The considered application of the rules to additional sectors mentioned in the Memo, such as biotechnology, hypersonics, aerospace, advanced manufacturing, and directed energy, would expand the restrictions to a wider range of Chinese business sectors.
    • The Trump Administration also has indicated it will consider adopted restrictions on a broader range of investment types, including private equity, venture capital, greenfield investments, corporate expansions, and investments in publicly traded securities, from pension funds, university endowments, and other limited-partner investors. Thus, the longstanding concern of Congress and the first Trump Administration over the activities of US universities in China may result in additional restrictions. Such restrictions on universities could relate to both outbound and inbound investments by Chinese firms in US university research.
  • Deter Investments in Chinese Military Sector. The Trump Administration will use “all necessary legal instruments” to deter US persons from investing in the Chinese military industrial sector, including blocking sanctions under the International Emergency Economic Powers Act (IEEPA). This suggests new additional prohibitions might be adopted, as the current outbound investment restrictions do not, by their terms, apply specifically to military companies.

 

III. Other Actions Being Considered.

Finally, the Investment Memo identifies various other actions that the Trump Administration will consider:

  • review, suspension, or termination of the 1984 US-China Income Tax Convention;
  • determine whether financial auditing standards are being upheld for companies covered by the Holding Foreign Companies Accountable Act;
  • review the variable interest entity and subsidiary structures used by foreign-adversary companies to trade on US exchanges, which limit US investor ownership rights and protections, and allegations of fraudulent behavior by these companies; and
  • restore the highest fiduciary standards, as required by the Employee Retirement Security Act of 1974 to ensure that foreign adversary companies are ineligible for pension plan contributions.

 

Accordingly, in addition to the specific changes proposed, the Investment Memo confirms that US investment policies will be under continuing scrutiny in the months ahead. Companies and their counsel will need to monitor developments and change course accordingly as proposed changes in approach are implemented by the Trump Administration.

https://www.eversheds-sutherland.com/en/united-states/insights/president-trump-issues-america-first-investment-policy-presidential-memorandum and

https://www.whitehouse.gov/presidential-actions/2025/02/america-first-investment-policy/

 

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Department of State, Directorate of Defense Trade Controls (DDTC)

 

Publishing the State Department's List of Entities and Subentities Associated With Cuba

 

February 6, 2025: 90. Fed. Reg. 9101: The Department of State published a List of Restricted Entities and Subentities Associated With Cuba (Cuba Restricted List) with which direct financial transactions are generally prohibited under the Cuban Assets Control Regulations (CACR). The Department of Commerce's Bureau of Industry and Security (BIS) generally will deny applications to export or reexport items for use by entities or subentities on the Cuba Restricted List.

 

The List of Restricted Entities and Subentities Associated With Cuba as of February 6, 2025 is as follows:

 

Ministries

  • MINFAR—Ministerio de las Fuerzas Armadas Revolucionarias
  • MININT—Ministerio del Interior

 

Holding Companies

  • CIMEX—Corporación CIMEX S.A.
  • Compañía Turística Habaguanex S.A.
  • GAESA—Grupo de Administración Empresarial S.A.
  • Gaviota—Grupo de Turismo Gaviota
  • UIM—Unión de Industria Militar

 

Hotels in Havana and Old Havana

  • Aparthotel Montehabana
  • Gran Hotel Bristol Kempinski
  • Gran Hotel Manzana Kempinski
  • H10 Habana Panorama
  • Hostal Valencia
  • Hotel Ambos Mundos
  • Hotel Armadores de Santander
  • Hotel Beltrán de Santa Cruz
  • Hotel Conde de Villanueva
  • Hotel del Tejadillo
  • Hotel el Bosque
  • Hotel el Comendador
  • Hotel el Mesón de la Flota
  • Hotel Florida
  • Hotel Habana 612
  • Hotel Kohly
  • Hotel Los Frailes
  • Hotel Marqués de Prado Ameno
  • Hotel Marqués de Cardenas de Montehermoso
  • Hotel Palacio Cueto
  • Hotel Palacio del Marqués de San Felipe y Santiago de Bejucal
  • Hotel Palacio O'Farrill
  • Hotel Park View
  • Hotel Raquel
  • Hotel Regis
  • Hotel San Miguel
  • Hotel Telégrafo
  • Hotel Terral
  • Iberostar Grand Packard Hotel
  • Memories Miramar Havana
  • Memories Miramar Montehabana
  • SO/Havana Paseo del Prado
  • Hotel Santa Isabel

 

Hotels in Santiago de Cuba

  • Villa Gaviota Santiago

 

Hotels in Varadero

  • Blau Marina Varadero Resort

also Fiesta Americana Punta Varadero

also Fiesta Club Adults Only

  • Grand Aston Varadero Resort
  • Grand Memories Varadero
  • Hotel Las Nubes
  • Hotel Oasis
  • Iberostar Bella Vista
  • Iberostar Laguna Azul
  • Iberostar Playa Alameda
  • Meliá Marina Varadero
  • Meliá Peninsula Varadero
  • Memories Varadero
  • Naviti Varadero
  • Ocean Varadero El Patriarca
  • Ocean Vista Azul
  • Paradisus Princesa del Mar
  • Paradisus Varadero
  • Sol Sirenas Coral
  • Hotel Meliá Marina Varadero Apartments
  • Hotel El Caney Varadero

 

Hotels in Pinar del Rio

  • Hotel Villa Cabo de San Antonio
  • Hotel Villa Maria La Gorda y Centro Internacional de Buceo

 

Hotels in Baracoa

  • Hostal 1511
  • Hostal La Habanera
  • Hostal La Rusa
  • Hostal Rio Miel
  • Hotel El Castillo
  • Hotel Porto Santo
  • Villa Maguana

 

Hotels in Cayos de Villa Clara

  • Angsana Cayo Santa María
  • Dhawa Cayo Santa María
  • Golden Tulip Aguas Claras
  • Grand Aston Cayo Las Brujas Beach Resort & Spa
  • Hotel Cayo Santa María
  • Hotel Playa Cayo Santa María
  • Iberostar Ensenachos
  • Las Salinas Plana & Spa
  • La Salina Noreste
  • La Salina Suroeste
  • Meliá Buenavista
  • Meliá Cayo Santa María
  • Meliá Las Dunas
  • Memories Azul
  • Memories Flamenco
  • Memories Paraíso
  • Ocean Casa del Mar
  • Paradisus Los Cayos
  • Royalton Cayo Santa María
  • Sercotel Experience Cayo Santa María
  • Sol Cayo Santa María
  • Starfish Cayo Santa María
  • Valentín Perla Blanca
  • Villa Las Brujas
  • Warwick Cayo Santa María

also Labranda Cayo Santa María Hotel

 

Hotels in Holguín

  • Blau Costa Verde Beach & Resort

also Fiesta Americana Holguín Costa Verde

  • Hotel Playa Costa Verde
  • Hotel Playa Pesquero
  • Memories Holguín
  • Paradisus Río de Oro Resort & Spa
  • Playa Costa Verde
  • Playa Pesquero Premium Service
  • Sol Rio de Luna y Mares
  • Villa Cayo Naranjo
  • Villa Cayo Saetia
  • Villa Pinares de Mayari

 

Hotels in Jardines del Rey

  • Cayo Guillermo Resort Kempinski
  • Grand Muthu Cayo Guillermo
  • Gran Muthu Imperial Hotel
  • Gran Muthu Rainbow Hotel
  • Hotel Playa Coco Plus
  • Iberostar Playa Pilar
  • Meliá Jardines del Rey
  • Memories Caribe
  • Pestana Cayo Coco

also Hotel Playa Paraiso

 

Hotels in Topes de Collantes

  • Hostal Los Helechos
  • Kurhotel Escambray
  • Los Helechos
  • Villa Caburni

 

Tourist Agencies

  • Crucero del Sol
  • Gaviota Tours

 

Marinas

  • Marina Gaviota Cabo de San Antonio (Pinar del Rio)
  • Marina Gaviota Cayo Coco (Jardines del Rey)
  • Marina Gaviota Las Brujas (Cayos de Villa Clara)
  • Marina Gaviota Puerto Vita (Holguín)
  • Marina Gaviota Varadero (Varadero)

 

Stores in Old Havana 

  • Casa del Abanico
  • Colección Habana
  • Florería Jardín Wagner
  • Joyería Coral Negro—Additional locations throughout Cuba
  • La Casa del Regalo
  • San Ignacio 415
  • Soldadito de Plomo
  • Tienda El Navegante
  • Tienda Muñecos de Leyenda
  • Tienda Museo El Reloj Cuervo y Sobrinos

 

Entities Directly Serving the Defense and Security Sectors

  • ACERPROT—Agencia de Certificación y Consultoría de Seguridad y Protección
  • alias Empresa de Certificación de Sistemas de Seguridad y Protección
  • AGROMIN—Grupo Empresarial Agropecuario del Ministerio del Interior
  • APCI—Agencia de Protección Contra Incendios
  • CAHOMA—Empresa Militar Industrial Comandante Ernesto Che Guevara
  • Casa Editorial Verde Olivo
  • CASEG—Empresa Militar Industrial Transporte Occidente
  • CID NAV—Centro de Investigación y Desarrollo Naval
  • CIDAI—Centro de Investigación y Desarrollo de Armamento de Infantería
  • CIDAO—Centro de Investigación y Desarrollo del Armamento de Artillería e Instrumentos Ópticos y Ópticos Electrónicos
  • CORCEL—Empresa Militar Industrial Emilio Barcenas Pier
  • CUBAGRO—Empresa Comercializadora y Exportadora de Productos Agropecuarios y Agroindustriales
  • DATYS—Empresa Para El Desarrollo De Aplicaciones, Tecnologías Y Sistemas
  • DCM TRANS—Centro de Investigación y Desarrollo del Transporte
  • DEGOR—Empresa Militar Industrial Desembarco Del Granma
  • DSE—Departamento de Seguridad del Estado
  • Editorial Capitán San Luis
  • EMIAT—Empresa Importadora Exportadora de Abastecimientos Técnicos
  • Empresa Militar Industrial Astilleros Astimar
  • Empresa Militar Industrial Astilleros Centro
  • Empresa Militar Industrial Yuri Gagarin
  • ETASE—Empresa de Transporte y Aseguramiento
  • Ferretería TRASVAL
  • GELCOM—Centro de Investigación y Desarrollo Grito de Baire
  • Impresos de Seguridad
  • MECATRONICS—Centro de Investigación y Desarrollo de Electrónica y Mecánica
  • NAZCA—Empresa Militar Industrial Granma
  • OIBS—Organización Integración para el Bienestar Social
  • PLAMEC—Empresa Militar Industrial Ignacio Agramonte
  • PNR—Policía Nacional Revolucionaria
  • PROVARI—Empresa de Producciones Varias
  • SEPSA—Servicios Especializados de Protección
  • SERTOD—Servicios de Telecomunicaciones a los Órganos de la Defensa
  • SIMPRO—Centro de Investigación y Desarrollo de Simuladores
  • TECAL—Empresa de Tecnologías Alternativas
  • TECNOPRO—Empresa Militar Industrial “G.B. Francisco Cruz Bourzac”
  • TECNOTEX—Empresa Cubana Exportadora e Importadora de Servicios, Artículos y Productos Técnicos Especializados
  • TGF—Tropas de Guardafronteras
  • UAM—Unión Agropecuaria Militar
  • ULAEX—Unión Latinoamericana de Explosivos
  • XETID—Empresa de Tecnologías de la Información Para La Defensa
  • YABO—Empresa Militar Industrial Coronel Francisco Aguiar Rodríguez

 

Additional Subentities of CIMEX

  • ADESA/ASAT—Agencia Servicios Aduanales (Customs Services)
  • American International Services (Remittances)
  • alias AIS Remesas
  • Cachito (Beverage Manufacturer)
  • Contex (Fashion)
  • Datacimex
  • ECUSE—Empresa Cubana de Servicios
  • FINCIMEX
  • Inmobiliaria CIMEX (Real Estate)
  • Inversiones CIMEX
  • Jupiña (Beverage Manufacturer)
  • La Maisón (Fashion)
  • Najita (Beverage Manufacturer)
  • Orbit, S.A. (Remittances) March 10, 2025.
  • Publicitaria Imagen (Advertising)
  • Residencial Tarara S.A. (Real Estate/Property Rental)
  • Ron Caney (Rum Production)
  • Ron Varadero (Rum Production)
  • Telecable (Satellite Television)
  • Tropicola (Beverage Manufacturer)
  • Zona Especializada de Logística y Comercio (ZELCOM)

 

Additional Subentities of GAESA

  • Almacenes Universales (AUSA)
  • ANTEX—Corporación Antillana Exportadora
  • Banco Financiero Internacional S.A. (BFI).
  • Compañía Inmobiliaria Aurea S.A.
  • Dirección Integrada Proyecto Mariel (DIP)
  • Empresa Inmobiliaria Almest (Real Estate)
  • GRAFOS (Advertising)
  • RAFIN S.A. (Financial Services)
  • Sociedad Mercantin Inmobiliaria Caribe (Real Estate)
  • TECNOIMPORT
  • Terminal de Contenedores de la Habana (TCH)
  • Terminal de Contenedores de Mariel, S.A.
  • UCM—Unión de Construcciones Militares
  • Zona Especial de Desarrollo Mariel (ZEDM)
  • Zona Especial de Desarrollo y Actividades Logísticas (ZEDAL)
  • Aerogaviota

 

Additional Subentities of Gaviota

  • AT Comercial
  • Varadero Diving Center
  • Gaviota Las Molas International Diving Center
  • Cayo Naranjo Dolphinarium
  • Diving Center—Marina Gaviota
  • Gaviota Hoteles Cuba Hoteles Habaguanex
  • Hoteles Playa Gaviota
  • Manzana de Gomez
  • Marinas Gaviota Cuba
  • PhotoService
  • Plaza La Estrella
  • Plaza Las Dunas
  • Plaza Las Morlas
  • Plaza Las Salinas
  • Plaza Las Terrazas del Atardecer
  • Plaza Los Flamencos
  • Plaza Pesquero
  • Producciones TRIMAGEN S.A. (Tiendas Trimagen)

 

Additional Subentities of Habaguanex

  • Sociedad Mercantil Cubana Inmobiliaria Fenix S.A. (Real Estate)

 

Editors Note: The importance of this notice for U.S. Persons travelling to Cuba, the U.S. tour operator is responsible to secure approval from OFAC for the trip and U.S. Persons are restricted from staying at the listed hotels or paying in U.S. dollars.

 

https://www.federalregister.gov/documents/2025/02/06/2025-02282/publishing-the-state-departments-list-of-entities-and-subentities-associated-with-cuba-cuba

 

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DDTC Frequently Asked Questions (FAQs)

 

Q: Why is a transmittal letter required if information already stated in application?

 

A: While the transmittal letter may re-state information already provided in the application, it will allow the applicant to provide further insight into the transaction as well as provide information not specifically required in the license application, i.e., related voluntary disclosure (VD), customs seizure. More importantly, DDTC is moving away from the "stand-alone" license application where no supporting documentation is provided. The inclusion of a transmittal letter re-stating the application information or providing further clarification of the transaction allows for a more robust license file.

 

Q: I am using a translator to communicate with the foreign parties. Is the translator furnishing a defense service?

 

A: When a U.S. person is providing technical data/defense services to a foreign person, they may need a translator/interpreter to facilitate the communication. If a translator/interpreter is merely facilitating communication between a U.S. person and a foreign person, DDTC does not consider the translator/interpreter to be furnishing a defense service. If any defense articles, including technical data, are disclosed to the translator/interpreter, and that translator/interpreter is a foreign person, such a disclosure constitutes an export or reexport in accordance with ITAR §§ 120.50 or 120.51, respectively.  The medium does not change this analysis: such a disclosure can be spoken or written.

 

Q: Why does the purchase documentation for a license application have to be issued within one year?

 

A: This requirement ensures the current validity of the export request. To comply with this requirement it is recommended all purchase documentation must be dated. A letter of explanation must be provided for any purchase documentation not meeting this requirement.

 

Q: What could cause a delay in the review of my 5-Day Mergers, Acquisitions and Divestitures (MAD) Change to my DDTC registration?

 

A: The review time of a 5-Day MAD Change may vary significantly based on several factors, primarily for the following reasons:

  • A party to the transaction submits a 5-Day MAD Change that DDTC finds to be deficient, requiring the submission to be Returned Without Action (RWA).
  • A party to the transaction submits a 5-Day MAD Change within a registration renewal that DDTC finds to be deficient, requiring the submission to be RWA’d.
  • A party submits supporting documents that omit required information, such as ITAR Registration Code, or misidentifies the parties to the transaction.
  • A party fails to submit a required ITAR 122.4(a) 5-day notice.
  • A party fails to submit a required ITAR 122.4(b) 60-day pre-notification.
  • A party’s 5-Day notice does not adequately explain the transaction, fails to identify the surviving and/or expiring ITAR Registration Code, is not on company letterhead signed by a senior official identified in the DS-2032, or lacks other required information.
  • The size and scope of a transaction (e.g., multiple parties.) may impact review time.

To ensure your 5-Day MAD Change is processed in a timely manner, please review the Sample 5-Day Notice for examples of the required documentation prior to submitting your amendment via DECCS Registration Dashboard.

 

Q: Can I renew and amend my registration at the same time?

 

A: Yes, but only if an applicant includes administrative, material, and Mergers, Acquisitions and Divestitures (MAD) changes within the annual renewal submission.

 

However, if the amendment is executed more than 60 days prior to the registration expiration date, then an applicant must submit a standalone amendment via the ‘Amend’ option in DECCS Registration Dashboard.

 

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Department of Defense, Defense Security Cooperation Agency (DSCA)

 

DSCA Notifies Congress of Potential FMS Sale To Egypt

February 4, 2025: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Egypt has requested to buy equipment and services including four (4) Component Based Total Ship System, 21st Century (COMBATSS-21) combat management systems to modernize its four fast missile craft (FMC). Also included are air and surface surveillance radars; chaff decoy systems; electro-optical/infrared sensor systems; electronic warfare systems; navigation data distribution systems; communications intelligence systems; fire control radar systems; 76 mm gun upgrades; and other related elements of logistics and program support. The estimated total cost is $625 million. The principal contractors will be Lockheed Martin, located in Manassas, VA, and L3Harris, located in Northampton, MA. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

 

https://www.dsca.mil/press-media/major-arms-sales/egypt-antps-78-long-range-radar

 

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DSCA Notifies Congress of Potential FMS Sale To Egypt

February 4, 2025: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Egypt has requested to buy AN/TPS-78 long range radar turnkey systems; KIV-78 cryptographic devices; Global Positioning System (GPS) devices with Selective Availability Anti-Spoofing Modules (SAASM); spare and repair parts; software and software support; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $304 million. The principal contractor will be Northrop Grumman Corporation, located in Falls Church, VA. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

 

https://www.dsca.mil/press-media/major-arms-sales/egypt-antps-78-long-range-radar

 

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DSCA Notifies Congress of Potential FMS Sale To Kuwait

February 6, 2025: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Kuwait has requested to buy services to support the procurement of maritime and land facilities at the Mohammed Al Ahmed Naval Base, other affiliated locations, the Ras Al Ard Naval Base for Onshore Logistics and an alternate logistics station in Kuwait, as well as construction of a headquarters complex. The following non-MDE items will be included: life cycle design; construction; project management; engineering studies; engineering services; technical support; facility and infrastructure assessments; surveys; planning; programming; design; acquisition; contract administration; construction management; logistics; other technical services; and other related elements of logistics and program support. The estimated total cost is $1.0 billion. The principal contractor(s) will be determined from approved vendors, likely by competitive acquisitions. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

 

https://www.dsca.mil/press-media/major-arms-sales/kuwait-design-and-construction-services

 

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DSCA Notifies Congress of Potential FMS Sale To Israel

February 7, 2025: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Israel has requested to buy two thousand one hundred sixty-six (2,166) GBU-39/B Small Diameter Bombs Increment 1 (SDB-I); two thousand eight hundred (2,800) MK 82 General Purpose, 500-pound bomb bodies; thirteen thousand (13,000) KMU-556E/B, or KMU-556H/B with SABR-Y, KMU-556F/B, or KMU-556J/B Joint Direct Attack Munition (JDAM) Guidance Kits for the MK-84 bomb body; three thousand four hundred seventy-five (3,475) KMU-557E/B, or KMU-557F/B, or KMU-557H/B with SABR-Y, or KMU-557J/B JDAM Guidance Kits for the BLU-109 bomb body; one thousand four (1,004) KMU-572E/B, or KMU-572F/B, KMU-572H/B with SABR-Y, or KMU-572J/B JDAM Guidance Kits for GBU-38v1; and seventeen thousand four hundred seventy-five (17,475) FMU-152A/B fuzes. The following non-MDE items will also be included: FMU-139 fuzes; bomb components; munitions support and support equipment; and other related elements of logistics and program support. The estimated total cost is $6.75 billion. Deliveries are estimated to begin in 2025. This proposed sale will be from both U.S. inventory, as available, and from principal contractors The Boeing Company, located in St. Louis, MO; ATK Tactical Systems Company LLC, located in Rocket Center, WV; L3Harris Fuzing and Ordnance Systems, located in Cincinnati, OH; and McAlester Army Ammunition Plant, located in McAlester, OK. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

 

https://www.dsca.mil/press-media/major-arms-sales/israel-munitions-guidance-kits-fuzes-and-munitions-support

 

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DSCA Notifies Congress of Potential FMS Sale To Israel

February 7, 2025: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Israel has requested to buy three thousand (3,000) AGM-114 Hellfire Air-to-Ground Missiles, to include one or any combination of the R3, F, F/A, K1, K1A, K2, K3, K3A, KA, N, N3, and/or R variants. The following non-MDE items will also be included: support 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 $660 million. Deliveries are estimated to begin in 2028. The principal contractor will be the Lockheed Martin Corporation, located in Troy, AL. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor. Implementation of this proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to Israel. The only additional U.S. military support required would be Technical Assistance Field Team visits during training phases.

 

https://www.dsca.mil/press-media/major-arms-sales/israel-agm-114-hellfire-missiles

 

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DSCA Notifies Congress of Potential FMS Sale To Romania

February 18, 2025: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Romania has requested to buy four hundred (400) Guided Bomb Unit (GBU)-39B Small Diameter Bombs (SDB-I), and two (2) GBU-39 (T-1)/B inert practice bombs with fuze. The following non-MDE items will also be included: GBU-39 tactical training rounds; Common Munitions Built-In-Test (BIT)/Reprogramming Equipment (CMBRE); ADU-890E Computer Test Set Adapter Groups; containers, weapons system support, and support and test equipment; training aids, devices, and spare parts; consumables and accessories, and repair and return support; publications and technical data; personnel training and training equipment; warranties; transportation support; site surveys; U.S. Government and contractor engineering, logistics, and technical support services; and other related elements of logistics and program support. The estimated total cost is $84 million.

The principal contractor will be The Boeing Company, located in St. Louis, MO. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

 

https://www.dsca.mil/press-media/major-arms-sales/romania-gbu-39b-small-diameter-bombs

 

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DSCA Notifies Congress of Potential FMS Sale To Israel

February 28, 2025: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Israel has requested to buy D9R and D9T Caterpillar bulldozers; spare and repair parts; corrosion protection; publications and technical documentation; pre-delivery inspections; U.S. Government and contractor support; technical and logistics support services; storage; and other related elements of logistics and program support. The estimated total cost is $295 million. Deliveries are estimated to begin in 2027. The principal contractor will be Caterpillar Inc., located in Irving, TX. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

 

https://www.dsca.mil/press-media/major-arms-sales/israel-caterpillar-d9-bulldozers

 

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DSCA Notifies Congress of Potential FMS Sale To Israel

February 28, 2025: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Israel has requested to buy two hundred one (201) MK 83 MOD 4/MOD 5 General Purpose 1,000-pound bomb bodies; four thousand seven hundred ninety-nine (4,799) BLU-110A/B General Purpose 1,000-pound bomb bodies; one thousand five hundred (1,500) KMU-559C/B Joint Direct Attack Munition (JDAM) guidance kits for the MK 83 bomb body; three thousand five hundred (3,500) KMU-559J/B JDAM guidance kits for the MK 83 bomb body. The following non-MDE items will also be included: U.S. Government and contractor engineering, logistics, and technical support services; and other related elements of logistics and program support. The estimated total cost is $675.7 million. Deliveries are estimated to begin in 2028. The principal contractors will be Repkon USA, located in Tampa, FL; and The Boeing Company, located in St. Charles, MO. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

 

https://www.dsca.mil/press-media/major-arms-sales/israel-munitions-guidance-kits-and-munitions-support

 

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DSCA Notifies Congress of Potential FMS Sale To Israel

February 28, 2025: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Israel has requested to buy thirty-five thousand five hundred twenty-nine (35,529) MK 84 or BLU-117 General Purpose (GP) bomb bodies, or a combination of both; and four thousand (4,000) I-2000 Penetrator warheads. The following non-MDE items will also be included: spare parts, consumables, accessories, and repair and return support; transportation support; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $2.04 billion. Deliveries are estimated to begin in 2026. The prime contractors will be General Dynamics, located in Garland, TX; Ellwood National Forge Company, located in Irvine, PA; and McAlester Army Ammunition Plant, located in McAlester, OK. There is a possibility that a portion of this procurement will come from U.S. stock. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

 

https://www.dsca.mil/press-media/major-arms-sales/israel-munitions-guidance-kits-and-munitions-support

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Department of Commerce – Bureau of Industry and Security (BIS)

Implementation of Additional Due Diligence Measures for Advanced Computing Integrated Circuits; Amendments and Clarifications; and Extension of Comment Period; Correction

February 13, 2025: 90. Fed. Reg. 9604: On January 16, 2025, BIS published in the Federal Register an interim final rule (IFR), “Implementation of Additional Due Diligence Measures for Advanced Computing Integrated Circuits; Amendments and Clarifications; and Extension of Comment Period” (January 16 IFR). This rule revises Export Control Classification Number (ECCN) 3A090 to correct this ECCN's license requirement added in the January 16 IFR.

 

Correction to ECCN 3A090 License Requirement Table

This rule amends ECCN 3A090 by revising the first row and column in the license requirements table. The first column of the first row of the license requirements table is revised from “RS applies to the entire entry, except 3A090.a” to read “RS applies to 3A090.a”. The regional stability section of the EAR already states the license requirements for 3A090.a in § 742.6(a)(6)(iii)(A). That provision provides that there is a worldwide license requirement for ECCN 3A090.a items. If Note 1 to 3A090.a does not apply, then the license requirements for exports, reexports, or transfers (in-country) of ECCN 3A090.a items to destinations specified in Country Groups D:1, D:4, and D:5 remain in effect with a compliance date of December 2, 2024, consistent with the FDD IFR. Any items subject to Note 1 to ECCN 3A090.a are subject to worldwide license requirements with a compliance date of January 31, 2025, consistent with the January 16 IFR.

 

https://www.federalregister.gov/documents/2025/02/14/2025-02655/implementation-of-additional-due-diligence-measures-for-advanced-computing-integrated-circuits

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Editors Note: The Department of Commerce, Bureau of Industry and Security (BIS) has stopped processing new license applications with effect February 5th, 2025. This act has been confirmed by several sources. The impact to industry is unknown, however the longer the hold on license processing takes place the bigger the impact for industry with their export requirements and potential delays on license issuance.

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U.S. Census Bureau

Tips on How to Resolve AES Response Messages

February 18, 2025: 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: 173

Narrative:     Country of Ultimate Destination Outdated

Severity:       Fatal

Reason:        The Country of Ultimate Destination is not an active country code in AES.

Resolution:  The Country of Ultimate Destination Code must be an active ISO country code listed in the Appendix C, ISO Country Codes.

Verify the Country of Ultimate Destination Code and the Estimated Date of Export, correct the shipment and resubmit.

Response Code: 600

Narrative:     Vehicle ID Qualifier Must be V or P

Severity:       Fatal

Reason:        The Vehicle ID Qualifier was not reported.

Resolution: The Vehicle ID Qualifier identifies the type of used vehicle number reported on the shipment.  The Vehicle ID Qualifier must be either V for Vehicle Identification Number (VIN) or P for Product Identification Number (PIN).

Verify the Vehicle ID Qualifier, correct the shipment and resubmit.

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Update to Automated Export System (AES) Response Message 26C Narrative Text

February 20, 2025: This message is a follow-up to the broadcast that was released on November 9, 2023, titled Update to Automated Export System (AES) Response Message 26C. The U.S. Census Bureau is changing the narrative text for Response Message 26C to provide clear guidance for reporting the U.S. Principal Party in Interest (USPPI) Address State Code and U.S. State of Origin Code. After two years of research, the Census Bureau has determined that when these fields do not match on the Electronic Export Information (EEI), the USPPI Address State Code is incorrect.  AES will now return Response Message 26C with the narrative text: USPPI ADDRESS STATE CODE INCORRECT.

This update is to ensure compliance with the Foreign Trade Regulations (FTR), specifically ensuring the USPPI Address in section 30.6(a)(1)(ii) is the location from which the goods actually begin the journey to the port of export.  When reported correctly, the USPPI Address State Code shall match the State of Origin in section 30.6(a)(4).

Response Code: 26C

Narrative Text: USPPI ADDRESS STATE CODE INCORRECT

Severity: COMPLIANCE ALERT

Reason: The USPPI Address, which is the address of origin includes an incorrect State Code because it differs from the U.S. State of Origin Code.

Resolution: Report the USPPI Address as the location from which the goods actually begin the journey to the port of export as defined in section 30.6(a)(1)(ii) and 30.6(a)(4) of the Foreign Trade Regulations.  The State in the USPPI Address, when reported correctly shall match the U.S. State of Origin Code.  Any reporting errors must be corrected and retransmitted.

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)

February 6, 2025: An indictment was filed in federal court in Brooklyn, NY charging Sergei Zharnovnikov, an arms dealer and citizen of Kyrgyzstan, with conspiring to export firearms from the United States to Russia without the necessary licenses and with illegal smuggling.  Zharnovnikov traveled from Kyrgyzstan to the United States last month and was arrested on January 24, 2025 in Las Vegas, Nevada, where he was attending the Shooting, Hunting, and Outdoor Trade (SHOT) Show to meet with U.S. arms dealers.  Zharnovnikov has been detained pending trial and will be arraigned in the Eastern District of New York at a later date.

 

https://www.justice.gov/usao-edny/pr/international-arms-dealer-charged-exporting-us-firearms-russia

 

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February 6, 2025: Kojo Owuso Dartey, age 42, of Fort Liberty, North Carolina was sentenced to 70 months  in prison and three years of supervised release for false statements made to an agency of the United States, false declarations before the court, conspiracy, dealing in firearms without a license, delivering firearms without notice to the carrier, smuggling goods from the United States, and illegally exporting firearms without a license.  On April 23, 2024, Dartey was found guilty by a jury after trial.

 

https://www.justice.gov/usao-ednc/pr/us-army-major-sentenced-70-months-smuggling-firearms-ghana

 

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February 7, 2025: The Justice Department announced that Dominican Republic authorities seized a Dassault Falcon 2000EX aircraft used by Petroleos de Venezuela, S.A. (PdVSA), the sanctioned Venezuelan state-owned oil and natural-gas company, at the request of the U.S. government based on violations of U.S. export control and sanctions laws.

 

https://www.justice.gov/opa/pr/united-states-seizes-venezuelan-aircraft-involved-violations-us-export-control-and-sanctions

 

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February 11, 2025: 90 Fed. Reg. 9305: Pursuant to section 766.24 of the Export Administration Regulations, 15 CFR parts 730 through 774 (“EAR” or “the Regulations”), the Bureau of Industry and Security (“BIS”), U.S. Department of Commerce, through its Office of Export Enforcement (“OEE”), has requested the issuance of an Order temporarily denying, for a period of 180 days, the export privileges under the Regulations of: Kirill Gordei (“Gordei”), Apelsin Logistics Inc. (“Apelsin”), FC Marakanda 7777 LLC (“Marakanda”), Alinda Chemical Trade Company LTD (“Alinda”), Element Uluslararasi Nakliyat Ve Lojistick Tic. LTD (“Element”), Astec Astronomy FZCO (“Astec”), and AvioChem (collectively, the “Respondents”). OEE's request and related information indicate that these parties are located at the respective addresses listed on the caption page of this order. The OEE investigation has shown that Gordei, through his Florida-based freight forwarding company Apelsin, has facilitated the transshipment of U.S.-origin goods to Russia by communicating with parties in Russia and Türkiye to instruct them on how to circumvent U.S. export controls, falsifying shipping documentation, and utilizing freight forwarders located abroad in order to transship items to Russia.

 

https://www.federalregister.gov/documents/2025/02/11/2025-02455/order-temporarily-denying-export-privileges

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February 13, 2025: Flighttime Enterprises Inc., an American subsidiary of a Russian aircraft parts supplier, along with three of its current and former employees, have been charged federally with crimes related to a scheme to illegally export aircraft parts and components from the United States to Russia and Russian airline companies without the required licenses from the Department of Commerce.

 

The three individuals charged are Daniela Friery, 43, a naturalized U.S. citizen residing in Loveland, Ohio; Pavil Iglin, 46, a citizen of Russia who currently resides in Florida pursuant to a non-immigrant visa; and Marat Aysin, 39, a legal permanent resident of the United States who currently resides in Florida.

 

According to the 11-count indictment unsealed, the three defendants worked for Flighttime Enterprises Inc., an aircraft equipment supplier with office locations near West Chester, Ohio, and Miami.

 

They are also charged with conspiracy to commit smuggling, which carries a maximum penalty of five years in prison, and multiple counts of smuggling, which carry maximum penalties of 10 years in prison. Finally, they are each charged with one count of conspiring to launder monetary instruments, a federal crime punishable by up to 10 years in prison.

 

https://www.justice.gov/opa/pr/ohio-based-supplier-aircraft-parts-and-three-employees-charged-illicit-export-scheme

 

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February 21, 2025: Gal Haimovich, 49, of Israel, was sentenced to 24 months in prison and three years of supervised release for conspiracy to illegally ship aircraft parts and avionics from U.S. manufacturers and suppliers to Russia, including for the benefit of sanctioned Russian airline companies. In addition, Haimovich paid the full forfeiture amount of $2,024,435.44 at the sentencing.

 

As part of his plea agreement, Haimovich admitted that his scheme involved deceiving U.S. companies about the true destination of the goods at issue, and that the defendant and others attempted to conceal the scheme by submitting false information in export documents filed with the U.S. government.

 

https://www.justice.gov/opa/pr/israeli-freight-forwarder-sentenced-two-years-prison-violating-export-restrictions-imposed

 

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February 28, 2025: Ray Hunt, also known as Abdolrahman Hantoosh, Rahman Hantoosh, and Rahman Natooshas, 71, of Owens Cross Roads, Alabama, has been sentenced to five years in prison for violating the International Emergency Economic Powers Act. In July 2024, Hunt pleaded guilty to conspiring to export U.S.-origin goods to the Islamic Republic of Iran in violation of the U.S. trade sanctions.

 

https://www.justice.gov/opa/pr/alabama-man-sentenced-five-years-prison-violating-us-sanctions-iran

 

Sanctions

 

Department of the Treasury, Office of Foreign Assets Control (OFAC)

February 6, 2025: the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned an international network for facilitating the shipment of millions of barrels of Iranian crude oil worth hundreds of millions of dollars to the People’s Republic of China (PRC). The oil was shipped on behalf of Iran’s Armed Forces General Staff (AFGS) and its sanctioned front company, Sepehr Energy Jahan Nama Pars (Sepehr Energy). This action includes entities and individuals in multiple jurisdictions, including the PRC, India, and the United Arab Emirates (UAE), as well as several vessels.

The following individuals have been added to OFAC’s SDN List:

  • Ahari, Farbod Mohseni of Iran;
  • Aranha, Ryan Xavier of the United Arab Emirates;
  • Eshaghi, Jamshid of Iran;
  • Ghazi, Farshad of Iran;
  • Kolahdozmahaleh, Mohammad Ali Riazi of Iran; and
  • Lavian, Arash of Iran.

The following entities have been added to OFAC’s SDN List:

  • Gozoso Group Ltd of China;
  • Lucky Ocean Shipping Limited of China;
  • Marshal Ship Management Private Limited of India;
  • Miletus Line Ltd of Mahe Island;
  • Ocean Dolphin Ship Management Ltd of China;
  • Sepher Energy Hamta Pars of Iran;
  • Sepher Energy Paya Gostar of Iran; and
  • Young Folks International Trading Co., Limited of China.

The following vessels have been added to OFAC’s SDN List:

  • CH Billion (3E5354) Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9276585;
  • Gioiosa (3E3562) Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9198082; and
  • Star Forest (VRWB4) Crude Oil Tanker Hong Kong flag; Vessel Registration Identification IMO 9237632.

 

https://ofac.treasury.gov/recent-actions/20250206 and

https://home.treasury.gov/news/press-releases/sb0015

 

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February 11, 2025: The Department of the Treasury’s Office of Foreign Assets Control (OFAC), Australia’s Department of Foreign Affairs and Trade, and the United Kingdom’s Foreign Commonwealth and Development Office jointly designated Zservers, a Russia-based bulletproof hosting (BPH) services provider, for its role in supporting LockBit ransomware attacks. LockBit, a Russia-based ransomware group best known for its ransomware variant of the same name, is one of the most deployed ransomware variants and was responsible for the November 2023 attack against the Industrial Commercial Bank of China U.S. broker-dealer. BPH service providers sell access to specialized servers and other computer infrastructure designed to evade detection and defy law enforcement attempts to disrupt these malicious activities. OFAC also designated two Russian nationals who are key administrators of Zservers and have enabled ransomware attacks and other criminal activity.

The following individuals have been added to OFAC’s SDN List:

  • Bolshakov, Aleksandr Sergeyevich of Russia; and
  • Mishin, Alexander Igorevich of Russia.

The following entities have been added to OFAC’s SDN List:

  • Zservers of Russia.

 

https://ofac.treasury.gov/recent-actions/20250211 and

https://home.treasury.gov/news/press-releases/sb0018

https://ofac.treasury.gov/recent-actions/20250211

 

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February 20, 2025: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on James Kabarebe (Kabarebe), Rwanda’s Minister of State for Regional Integration. Kabarebe is central to Rwanda’s support for the March 23 Movement (M23), a U.S.- and United Nations (UN)-designated armed group that has rapidly expanded its territorial control in eastern Democratic Republic of the Congo (DRC) and is responsible for human rights abuses. OFAC is also sanctioned Lawrence Kanyuka Kingston (Kanyuka), an M23 and Congo River Alliance senior member and spokesperson, alongside two of Kanyuka’s companies registered in the U.K. and France.

The following individuals have been added to OFAC’s SDN List:

  • Karabe, James of Rwanda; and
  • Kingston, Lawrence Rayuka of the Democratic Republic of Congo.

The following entities have been added to OFAC’s SDN List:

  • Kingston Fresh Ltd of the United Kingdom; and
  • Kingston Holding of France.

 

https://home.treasury.gov/news/press-releases/sb0022

 

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February 24, 2025: The Department of the Treasury’s Office of Foreign Assets Control (OFAC), and the U.S. Department of State imposed sanctions on over 30 persons and vessels in multiple jurisdictions for their role in brokering the sale and transportation of Iranian petroleum-related products. Among those sanctioned are oil brokers in the United Arab Emirates (UAE) and Hong Kong, tanker operators and mangers in India and People’s Republic of China (PRC), the head of Iran’s National Iranian Oil Company, and the Iranian Oil Terminals Company, whose operations help finance Iran’s destabilizing activities. The vessels sanctioned are responsible for shipping tens of millions of barrels of crude oil valued in the hundreds of millions of dollars.

The following individuals have been added to OFAC’s SDN List:

  • Asadrouz, Abbass of Iran;
  • Bovard, Hmaid of Iran;
  • Gerami, Gholamhossein of Iran;
  • Miri, Sayyed Ali of Iran; and
  • Moalemi, Ali of Iran.

The following entities have been added to OFAC’s SDN List:

  • Alkonost Maritime DMCC of the United Arab Emirates;
  • Artemis Heart Ltd of Seychelles;
  • Austinship Management Private Limited of India;
  • BSM Marine Limited Liability Partnership of India;
  • Cosmos Lines Inc of India;
  • Flux Maritime LLP of India;
  • Green Garden Trading Ltd of Seychelles;
  • IMS Ltd of Malaysia;
  • Iranian Oil Terminals Company of Iran;
  • Kangan Petro Refining Company;
  • Le Monde Marine Services Limited of Liberia;
  • NYCity Shipmanagment Co Ltd of China;
  • Oceanend Shipping Ltd of Seychelles;
  • Octane Energy Group FZCO of the United Arab Emirates;
  • Petronix Energy Trading Limited of China;
  • Petroquimco FZE of the United Arab Emirates; and
  • Sunny Land Trading Ltd of Seychelles.

The following vessels have been added to OFAC’s SDN List:

  • Amak (3DBP1) Crude Oil Tanker Eswatini flag;  MMSI 669542000 (vessel);
  • Asterix (C5J382) Crude Oil Tanker Gambia flag; MMSI 629009370 (vessel);
  • Ayden  (3E3779) Crude Oil Tanker Panama flag; MMSI 352002097 (vessel);
  • Casinova (8P2583) Crude Oil Tanker Barbados flag; MMSI 314001045 (vessel);
  • Chamtang  (3EXF5) Crude/Oil Products Tanker Panama flag; MMSI 357964000 (vessel);
  • Fiona (3E2212) Crude Oil Tanker Panama flag; MMSI 352002219 (vessel);
  • Lydia II (3E2202) Crude Oil Tanker Panama flag;  MMSI 352002042 (vessel);
  • Meng XIN  (3E2056) Crude Oil Tanker Panama flag; MMSI 352898783 (vessel);
  • Peterpaul  (3FFR8) Chemical/Products Tanker Panama flag; MMSI 352900000 (vessel);
  • Phoenix I (E5U5298) Crude Oil Tanker Cook Islands flag; MMSI 518999317 (vessel);
  • Urgane I (3FUU7) Crude Oil Tanker Panama flag; MMSI 370207000 (vessel);
  • Violet 1 (3FFR8) Crude/Oil Products Tanker Panama flag; MMSI 352900000 (vessel); and
  • Yateeka (TRAO8) Chemical/Products Tanker Gabon flag; MMSI 626246000 (vessel).

 

https://ofac.treasury.gov/recent-actions/20250224

https://home.treasury.gov/news/press-releases/sb0026

 

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February 26, 2025: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) targeted six entities based in Hong Kong and the People’s Republic of China (PRC), engaged in the procurement of unmanned aerial vehicle (UAV) components on behalf of OFAC-designated Iranian firm Pishtazan Kavosh Gostar Boshra (PKGB) and its subsidiary Narin Sepehr Mobin Isatis (NSMI). These entities operate as front companies and facilitate the purchase and shipment of key components for the benefit of PKGB and NSMI, which serve as key suppliers for Iran’s UAV and ballistic missile programs. OFAC previously designated a network of Hong Kong-based companies procuring sensitive Western-origin materials and technology for Iran’s UAV and missile programs on behalf of PKGB in February 2024. This action targets efforts by PKGB to reconstitute its procurement network and continue the procurement of critical parts from foreign suppliers post-designation.

The following entities have been added to OFAC’s SDN List:

  • DDC Develop Industry Hong Kong Limited of China;
  • Dingtai Industrial Technology Co Limited of China;
  • Hong Kong Tianle International Co Limited of China;
  • JP Oreintal International Holdings Limited of China;
  • Shenxehn Zhiyu International Trade Co Ltd of China; and
  • Yonghongan Trade Limited of China.

 

https://ofac.treasury.gov/recent-actions/20250226

https://home.treasury.gov/news/press-releases/sb0031

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