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The Fifteen Year Freeze in DDTC Registration Fees Sees a Big Thaw

By Kenneth Schmidt – Senior Associate

After a fifteen-year pause in price increases, impressive by any measure, the Directorate of Defense Trade Controls (DDTC) proposes to recalibrate its registration fee structure for exporters, importers, brokers, and manufacturers to fund ongoing operations, technology modernization, registrant support, monitoring and enforcement, and general public outreach operations.  The change will mostly impact the approximately 14,500 current DDTC registrants.  The rationale, inflation increases over the 15-year period when the rates were last established is a staggering 40%.  Given the irregularity of the fee increases, some of the proposed fees are below the 40% inflation while other rates represent an increase that accounts for inflation but adjusts for the future.

DDTC uses a three-tiered structure for registrations.  Tier 2 and Tier 3 will see the biggest adjustments, both in terms of price and tier scope.

The tiers are proposed to be defined as follows:

Tier 1 registrants are persons in the business of manufacturing who (i) do not export, (ii) utilize ITAR exemptions for export, or (iii) have yet to receive a favorable determination from DDTC (i.e. approval, approval with provisos, or written authorization from DDTC to conduct ITAR-regulated activities. Tier one will also include persons engaged in the business of brokering activities (whether you license or not).

Tier 2 registrants are moderate users of DDTC services and comprise those who received five or less favorable determinations on license applications or requests for authorization for the twelve months preceding ninety days prior to the expiration of current registrant’s expiration.

Tier 3 registrants comprise those receiving more than five favorable determinations in the twelve months preceding ninety days prior to the expiration of current registrant’s expiration.  Additionally, Tier 3 registrants pay an additional $1,100.00 for each favorable determination over five.

DDTC’s current registration discount for exporters and temporary importers of low-value items who fall under Tier 3 will remain unchanged.  This low-value discount formula is currently available on the DDTC website.

Finally, Tier 2 and Tier 3 non-profit organizations (26 U.S.C. 501(c)(3)) may also be eligible for a discount to Tier 1 treatment.

Now for the sticker shock:

  • Tier 1 registrations will now be a flat fee of $3,000.00 (33% increase)
  • Tier 2 registrations will now be a flat fee of $4,000.00 (45% increase) and permit five or less favorable determinations within the lookback period.
  • Tier 3 registrations will now be a flat fee of $4,000.00 (45% increase) and $1,100.00 (~440% increase) for each determination beyond the gratis five determinations within the lookback period.
  • Exceptions: Existing discounts apply to exporters with low value exports and temporary import license filers
  • Tier 2 and Tier 3 non-profits may qualify for Tier 1 rate

Comments on the proposed rule are requested by June 10, 2024.

The Fifteen Year Freeze in DDTC Registration Fees Sees a Big Thaw Read More »

BIS Amends the EAR Removing Most Licensing Requirements to Australia and The United Kingdom to Support the Australia, United Kingdom, United States (AUKUS) Enhanced Trilateral Security Partnership

By John Herzo, Senior Compliance Associate, FD Associates, Inc.
Odyssey Gray III, Senior Associate, FD Associates, Inc.
April 19, 2024
89 Fed. Reg. 28594

Effective April 19, 2024, the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) amended the Export Administration Regulations (“EAR”) to remove license requirements, expand the availability of license exceptions, and reduce the scope of end-use and end-user-based license requirements for exports, reexports, and transfers (in-country) to or within Australia and the United Kingdom (“UK”) to enhance technological innovation among the three countries and support the goals of the Australia, United Kingdom, United States (“AUKUS”) Trilateral Security Partnership. The full Federal Register Notice may be found at the following link:

https://www.federalregister.gov/documents/2024/04/19/2024-08446/export-control-revisions-for-australia-united-kingdom-united-states-aukus-enhanced-trilateral

On December 22, 2023, President Biden signed the National Defense Authorization Act (NDAA) for Fiscal Year 2024, Public Law 118-31, which enacted provisions related to streamlining defense trade between and among the United States, UK, and Australia, provided certain conditions are met. To support the United States’ broader defense trade and technology cooperation with the AUKUS partners, BIS issued this change to remove certain license requirements for exports to Australia and the UK under the EAR.

On September 15, 2021, the leaders of Australia, the UK, and the United States announced their “resolve to deepen diplomatic, security, and defense cooperation in the Indo-Pacific region, including by working with partners, to meet the challenges of the twenty-first century” by creating AUKUS, an enhanced trilateral security partnership. Through AUKUS, partner governments strengthen each other’s ability to support their collective security and defense interests, building on longstanding and ongoing bilateral ties. AUKUS consists of two main pillars. Pillar I focuses on trilateral submarine cooperation. Pillar II focuses initial partner collaboration efforts on advanced capabilities in the following areas: (1) advanced cyber, artificial intelligence (AI), and autonomy; (2) quantum technologies; (3) hypersonic and counter-hypersonic capabilities; (4) electronic warfare; (5) innovation; (6) information sharing; and (7) additional undersea capabilities.

The UK and Australia are two of the United States’ closest allies, with longstanding collective defense arrangements. They are also members of all four multilateral export control regimes (i.e., the Wassenaar Arrangement on Export Controls for Conventional Arms and Related Dual-Use Goods and Technologies, Australia Group, Nuclear Suppliers Group, and Missile Technology Control Regime (MTCR)). They are also members of the Global Export Controls Coalition (GECC) of governments that have substantially aligned on export control measures in response to Russia’s illegal war against Ukraine. The UK and Australia have robust export control systems and have taken additional measures in recent months to enhance technology protection and promote secure trade. Specifically, in December 2023, the United Kingdom’s National Security Act 2023 came into force, providing for inter alia enhanced protections against the unauthorized disclosure of certain defense-related information. In March 2024, the Australian Parliament passed the Defence Trade Controls Amendment Act 2024 and the Safeguarding Australia’s Military Secrets Act 2024, providing for inter alia controls on the reexport of items originally exported from Australia and disclosures of controlled technology to certain foreign persons within Australia, as well as controls on the provision of defense services. Following their passage in their respective parliaments, the UK and Australian actions received royal assent. These actions highlight the UK’s and Australia’s commitment to implementing robust export controls and technology protection measures.

 

Summary Of Changes To The EAR

With this rule, Australia and the UK will have nearly the same licensing treatment under the EAR as Canada. The liberal licensing treatment of items destined for Canada was made possible in part because Canada is included in the National Technology and Industrial Base (NTIB) (as defined in 10 U.S.C. 4801(1)). In 2017, this definition was broadened to include the UK and Australia. Accordingly, the regulatory changes in this rule not only advance the goals of the AUKUS Enhanced Trilateral Security Partnership but also further align the treatment of the UK and Australia under the EAR with fellow NTIB member Canada.

The biggest changes to the EAR pursuant to this rule are the removal of list-based license requirements for exports, reexports, and transfers (in-country) to Australia and the UK, including the removal of license requirements for national security column 1 (NS1), regional stability column 1 (RS1), and missile technology column 1 (MT1) reasons for control for the destinations of Australia and the UK. This is an important change as it removes licensing requirements for exports of ALL 600 Series ECCN items to Australia and the UK and many 9×515 satellite-related license requirements to Australia and the UK.

Other minor changes to the EAR pursuant to this rule include the applicability of License Exceptions under §§ 740.15, 740.16, and 740.17 (License Exceptions Aircraft, Vessels and Spacecraft (AVS), Additional Permissive Reexports (APR), and Encryption Commodities, Software, and Technology (ENC), respectively), for use to Australia, Canada, and the UK.

BIS also exempted Australia, the UK, and Canada from unilateral reporting requirements for thermal imaging camera transactions.

Consistent with recent changes to the EAR concerning thermal imaging cameras, the interim final rule removes military end-use and end-user-based license requirements for exports, reexports, and transfers (in-country) of certain cameras, systems, or related components detailed under § 744.9(a)(1)(i) and (a)(1)(iii) of the EAR which previously only applied to Canada.  The exception now applies to Australia, Canada, and the UK.

BIS requires certain transactions involving Canada to be reported in Electronic Export Information (EEI) filings, and these paragraphs now include Australia and the UK for clarity without changing existing EEI filing requirements. There is no change to the requirement to file EEI for shipments to Australia and the UK. For instances involving the use of a license exception or license, the usual EEI license codes apply. If exporting as No License Required, the license code is C33 in EEI.

There are two sections under the EAR where Canada is still treated differently than Australia and the UK. Pursuant to § 742.7(a)(4), Canada remains exempted from certain crime control-related license requirements for non-firearms items. The text in this section has been edited to read “Canada only,” as these items still require a license to Australia and the UK. Firearms-related items and other CC-controlled items in ECCNs 0A501 (except 0A501.y), 0A502, 0A503, 0A504, 0A505. a, .b, and .x, 0A981, 0A982, 0A983, 0D501, 0D505, 0E501, 0E502, 0E504, 0E505, and 0E982 will continue to require a license when destined to and among the UK and Australia.

In addition, existing license requirements for the following items will remain in place:

  • Certain satellites and related items;
  • Certain items controlled pursuant to the Chemical Weapons Convention, and items controlled for short supply reasons (e.g., certain petroleum products and Western red cedar); and
  • Certain law enforcement restraints and riot control equipment, implements of torture or execution, and horses exported by sea.

 

Detailed Description Of The Specific Changes To The EAR

BIS made the following six major export control policy changes to further align the treatment of Australia, Canada, and the UK under the EAR:

  1. The first three changes involve the removal of list-based license requirements for exports, reexports, and transfers (in-country) to Australia and the UK. Specifically, BIS is removing license requirements for national security column 1 (NS1), regional stability column 1 (RS1), and missile technology column 1 (MT1) reasons for control for the destinations of Australia and the UK. As Australia and the UK are not currently subject to NS2 or RS2 controls, with this rule all Commerce Country Chart-based NS and RS controls are removed for these countries.
    • To facilitate this change, the Xs are removed from the Country Chart (supplement no. 1 to part 738) for NS1, RS1, and MT1 for Australia and the UK.
    • Corresponding to the Commerce Country Chart, provisions in part 742 of the EAR that specify the license requirements for NS, MT, and RS reasons (§§ 742.4(a), .5(a), and .6(a), respectively) are revised in order to fully remove the license for Australia and the UK.
  2. Based on the change above, “600 series” items, which are generally items on the Wassenaar Arrangement Munitions List, no longer require a license to Australia or the UK. In addition, items controlled under the EAR for missile technology reasons consistent with the MTCR Annex no longer require a license to Australia or the UK.
  3. Except for those items requiring a license to all destinations worldwide pursuant to § 742.6(a)(9), many 9×515 satellite-related items no longer require a license to Australia or the UK.
  4. The fourth policy change is consistent with the general RS1 removal. BIS maintains a special RS Column 1 license requirement in § 742.6(a)(3) applicable to military commodities described under ECCN 0A919. Specifically, the special RS1 control required a license for reexports to all destinations except Canada for items classified under ECCN 0A919 except when such items are being reexported as part of a military deployment by a unit of the government of a country in Country Group A:1 (see supplement no. 1 to part 740 of the EAR) or the United States. This final rule removes license requirements for 0A919 items to Australia and the UK.
  5. BIS removed military end-use and end-user-based license requirements for exports, reexports, and transfers (in-country) of certain cameras, systems, or related components detailed under § 744.9(a)(1)(i) and (a)(1)(iii) of the EAR. Prior to this rule, the only exception to the requirements under these paragraphs was for Canada. With the publication of this rule, the exception now applies to Australia, Canada, and the UK.
  6. BIS revised its treatment of significant items (SI) ( e., hot section technology for the development, production or overhaul of commercial aircraft engines, components, and systems) controlled under ECCN 9E003.a.1 through a.6, a.8, .h, .i, and .l, and related controls to allow these items to be exported, reexported, or transferred (in-country) to or within Australia and the UK without a license, consistent with the current exception for Canada. This provision is in § 742.14(a).

BIS also made the following minor changes to the EAR to further align the treatment of Australia, Canada, and the UK under the EAR pursuant to this rule:

  1. Under § 734.17(c)(1), precautions for internet transfers of products eligible for export under § 740.17(b)(2) shall include such measures as an access control system that, either through automated means or human intervention, checks the address of every system outside of the U.S. or Canada to check against transfers to foreign government end users, was edited to include Australia and the UK within the list of countries exempted from the required measures.
  2. Under §§ 740.15, 740.16, and 740.17 (License Exceptions Aircraft, Vessels and Spacecraft (AVS), Additional Permissive Reexports (APR), and Encryption Commodities, Software, and Technology (ENC), respectively), BIS expanded the explicit applicability of these License Exceptions for use to Australia, Canada, and the UK.
  3. Under § 742.2(a)(1), a license was required to all destinations, including Canada, for CB Column 1 items; with the publication of this rule the countries exempt from the license requirement is expanded to include Australia and the UK in the list for clarity, although the revision does not change existing license requirements.
  4. Under § 742.7(a)(4), Canada remains exempted from certain crime control-related license requirements for non-firearms items, but the text has been edited to read “Canada only” as these items are not available without a license in Australia and the UK.
  5. Under § 742.13(a)(1), Canada is mentioned as requiring a license for certain communications intercepting devices; with the publication of this rule, this phrase now includes Australia and the UK for clarity, although the revision does not change existing license requirements.
  6. Under § 742.18(a)(1), Canada is mentioned as requiring a license under the Chemical Weapons Convention; with the publication of this rule, this phrase now includes Australia and the UK for clarity, although the revision does not change existing license requirements.
  7. Under § 743.3(b), BIS exempted Australia, the UK, and Canada from unilateral reporting requirements for thermal imaging camera transactions.
  8. Under §§ 754.3(a), .4(a), and .5(a), a license is required for short supply reasons for control for certain items, including to Canada; these phrases now include Australia and the UK for clarity without changing existing license requirements.
  9. Under § 758.1(b)(3), (6), and (9), BIS requires certain transactions involving Canada to be reported in Electronic Export Information (EEI) filings, and these paragraphs now include Australia and the UK for clarity without changing existing EEI filing requirements.
  10. Under § 758.11(a), which covers the scope of export clearance requirements for firearms and related items, BIS now includes Australia and the UK alongside Canada for clarity as destinations to which certain clearance requirements continue to pertain.

Among other things, license exception Aircraft, Vessels, and Spacecraft (AVS) treats exports to Canadian airlines in most destinations as an export to Canada. Since MT1 items do not require a license for export to Canada, the primary impact of this AVS eligibility is that Canadian airlines in most destinations may receive MT1 items as spare parts. Consistent with the removal in this rule of MT1 license requirements for the UK and Australia, and as discussed above, BIS added AVS eligibility for Australian and United Kingdom airlines to receive such items in most destinations. As a conforming change, BIS created two new definitions for what constitutes an “Australian airline” and “United Kingdom (or UK) airline.” These two definitions are added to § 772.1 and mirror the definition of “Canadian airline.”

Lastly, the following requirements will remain unchanged as a result of this rule. Under the EAR, firearms-related items and other CC-controlled items in ECCNs 0A501 (except 0A501.y), 0A502, 0A503, 0A504, 0A505. a, .b, and .x, 0A981, 0A982, 0A983, 0D501, 0D505, 0E501, 0E502, 0E504, 0E505, and 0E982 will continue to require a license when destined to and among the UK and Australia. This license requirement mirrors the license requirement for firearms-related items in ECCNs 0A501 (except 0A501.y), 0A502, 0A504 (except 0A504.f), and 0A505 (except 0A505.d) destined to Canada. Prior to this IFR, license requirements for these items to the UK and Australia were implemented through NS1/RS1 reasons for control. Since these license requirements are removed for the UK and Australia in this rule, BIS added a footnote to the Commerce Country Chart for the UK and Australia, which indicates that a license is still required for these 0x5zz firearms-related items in those two countries. This does not change the scope of the license requirements for these items to the UK and Australia that applied prior to the effective date of this rule.

Please contact your FD Associates consultant for guidance on transactions with Australia and the UK.

BIS Amends the EAR Removing Most Licensing Requirements to Australia and The United Kingdom to Support the Australia, United Kingdom, United States (AUKUS) Enhanced Trilateral Security Partnership Read More »

DECEMBER 2023 EXPORT CONTROL REGULATIONS UPDATES

This newsletter is a listing of the latest changes in export control regulations through December 31, 2023.  The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

 

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

 

REGULATORY UPDATES

 

The President

 

President Biden Issued Executive Order On Taking Additional Steps With Respect to the Russian Federation’s Harmful Activities

 

December 22, 2023: Pursuant to the Constitution and the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of title 3, United States Code, President Biden, in view of the Russian Federation’s continued use of its military-industrial base to aid its effort to undermine security in countries and regions important to United States national security, including its reliance on the international financial system for the procurement of dual-use and other critical items from third countries, and in order to take additional steps with respect to the national emergency declared in Executive Order 14024 of April 15, 2021, expanded by Executive Order 14066 of March 8, 2022, and relied on for additional steps taken in Executive Order 14039 of August 20, 2021, Executive Order 14068 of March 11, 2022, and Executive Order 14071 of April 6, 2022 amended Executive Order 14024. A new Section 11 was added to Executive Order 14024, which imposes sanctions  on a foreign financial institution if it has:

(i)   conducted or facilitated any significant transaction or transactions for or on behalf of any person designated pursuant to section 1(a)(i) Executive Order 14024for operating or having operated in the technology, defense and related materiel, construction, aerospace, or manufacturing sectors of the Russian Federation economy, or other such sectors as may be determined to support Russia’s military-industrial base by the Secretary of the Treasury, in consultation with the Secretary of State; or
(ii)  conducted or facilitated any significant transaction or transactions, or provided any service, involving Russia’s military-industrial base, including the sale, supply, or transfer, directly or indirectly, to the Russian Federation of any item or class of items as may be determined by the Secretary of the Treasury, in consultation.

 

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2023/12/22/executive-order-on-taking-additional-steps-with-respect-to-the-russian-federations-harmful-activities/

 

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

 

DDTC Name and Address Changes Posted To Website

 

December 14 through 20, 2023: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at    

https://www.pmddtc.state.gov/ddtc_public?id=ddtc_kb_article_page&sys_id=bd72ca0adbf8d30044f9ff621f961981:

 

  • Change in Name from Teledyne FLIR Detection, Inc. to Teledyne FLIR Defense, Inc., due to corporate rebranding;
  • Change in Name from Qualitair & Sea International to Qualitair & Sea Dimotrans Group due to corporate rebranding;
  • Change in Address for Fokker Technologies Holding B.V. and Fokker Aerostructures B.V. from Industrieweg 4, 3351 LB Papendrecht, the Netherlands to Anthony Fokkerweg 4, 3351 NL Papendrecht, the Netherlands;
  • Change in Address for Verify Europe Ltd. from 8 Clarendon Drive, Wymbush, Milton Keynes, Bucks, England MK8 8ED to 25 Shirwell Crescent, Furzton, Milton Keynes, Buckinghamshire, England, United Kingdom, MK4 1GA; and
  • Change in Name from Datron World Communications, Inc. to Cyberlux Corporation due to acquisition;
  • Change in Name from Elmtek Proprietary Limited to Aurizn Defence Proprietary Limited due to merger;
  • Change in Name from General Electric International Operations Company’s Israel operations to GE Aviation Systems North America LLC due to corporate rebranding;
  • Change in Name from Pinnacle Solutions, Inc. to Pinnacle Solutions, LLC due to acquisition by NANA Regional Corporation, Inc.

 

DSCA Notifies Congress Of Potential FMS Sale To South Korea

 

December 1, 2023: The State Department has made a determination to approve the possible Foreign Military Sale to the Republic of Korea of F-35 Munitions and related equipment for an estimated cost of $271 million. The Government of the Republic of Korea has requested to buy thirty-nine (39) AIM-120C-8 Advanced Medium Range Air-to-Air Missiles (AMRAAM); two (2) AIM-120C-8 AMRAAM Guidance Sections; eighty-eight (88) KMU-556 Tail Kits for the GBU-31v1 Joint Direct-Attack Munition (JDAM); eighty-six (86) Mk-84 General Purpose (GP) 2000-lb bombs for the GBU-31v1 JDAM; seventy (70) KMU-557 Tail Kits for the GBU- 31v3 JDAM; seventy (70) BLU-109C/B 2000-lb bombs for the GBU-31v3 JDAM; seventy-eight (78) KMU- 572 Tail Kits for the GBU-54 Laser JDAM (LJDAM); two hundred sixty-nine (269) MAU-169 Computer Control Groups/Guidance Sections for the GBU-12 Paveway II; two hundred sixty-nine (269) MXU-650 Air Foil Groups for the GBU-12 Paveway II; three hundred forty-two (342) Mk-82 500-lb GP bombs for the GBU-12 Paveway II or GBU-54 LJDAM; twelve (12) Mk-82 inert bombs; thirty-five (35) GBU-39 Small Diameter Bomb-Increment 1 (SDB-I) All-Up-Rounds (AUR) with containers; and one hundred eighteen (118) GBU-53 Small Diameter Bomb-Increment 2 (SDB-II) AURs. Also included are AIM-120 control section spares and containers; DSU-38 Laser Illuminated Target Detectors; SDB-I Tactical Training Rounds and carriage systems; SDB-II Practical Explosive Ordnance Disposal Trainers (PEST) and Weapon Load Crew Trainer (WLCT) units; FMU-139 fuzes; Common Munitions Built-in-Test (BIT)/Reprogramming Equipment (CMBRE); ADU-891 adapter group computer test sets; Mk-84 practice bombs and other training bombs/components; munitions support and support equipment including propellant and explosive charges; classified software delivery and support; spare parts, consumables, and accessories, and repair and return support; major modifications, maintenance, and maintenance support; transportation and airlift support; classified/unclassified publications and technical documentation; personnel training and training equipment; contractor logistics support (CLS); studies and surveys; U.S. Government and contractor engineering, technical and logistics support services; and other related elements of logistical and program support.

 

https://www.dsca.mil/press-media/major-arms-sales/korea-f-35-munitions

 

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DSCA Notifies Congress Of Potential FMS Sale To Australia

 

December 1, 2023: The State Department has made a determination to approve the possible Foreign Military Sale to the Government of Australia of AUKUS-related Training and Training Devices and related equipment for an estimated cost of up to $2.0 billion. The Government of Australia has requested to buy articles and services in support of the Trilateral AUKUS Pillar I program. Included are training devices, personnel training, planning, and Non-Recurring Engineering (NRE) services; support equipment; special tools; training software and courseware; design; supply chain and industrial base support; facilities and construction support; publications and technical documentation; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; test and trials support; studies and surveys; other related elements of engineering and repair services for associated equipment and program support; and other related elements of logistic and program support. U.S. training of private Australian industry personnel will occur only after explicitly authorized by the U.S. Department of State in accordance with U.S. law.

 

https://www.dsca.mil/press-media/major-arms-sales/australia-aukus-pillar-i-training-and-training-devices

 

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DSCA Notifies Congress Of Potential FMS Sale To The United Arab Emirates

 

December 4, 2023: The State Department has made a determination to approve the possible Foreign Military Sale to the Government of the United Arab Emirates of AN/TPQ-50 Radar and related equipment for an estimated cost of $85 million. The Government of the United Arab Emirates (UAE) has requested to buy eighteen (18) AN/TPQ-50 Radar Systems – man portable version. Also included are 107mm High Explosive (HE) rockets (for CONUS testing only); Computer Digital Military Laptop Radar Control Display units; 5kW Advanced Medium Mobile Power Source (AMMPS) Trailer-Mounted, Diesel Engine Driven Power Unit PU-2001; spares; mission equipment; communication and navigation equipment; support equipment; repair parts; special tools and test equipment; technical data and publications; site survey; U.S. Government and contractor technical and logistics personnel services; and other related elements of logistics and program support.

 

https://www.dsca.mil/press-media/major-arms-sales/united-arab-emirates-antpq-50-radar

 

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DSCA Notifies Congress Of Potential FMS Sale To The Kingdom Of Saudi Arabia

 

December 4, 2023: The State Department has made a determination to approve the possible Foreign Military Sale to the Kingdom of Saudi Arabia of RE-3A Tactical Airborne Surveillance System Aircraft Modernization and related equipment for an estimated cost of $582 million. The Kingdom of Saudi Arabia has requested to buy aircraft hardware and software modifications and support to replenish and modernize its RE-3A Tactical Airborne Surveillance System (TASS) aircraft, including: seven (7) Embedded Global Positioning System/Inertial Navigation System (GPS/INS) (EGI) security devices, Airborne, with Selective Availability Anti-Spoofing Module (SAASM) or M-Code capability, and five (5) L3Harris BlackRock Communications Intelligence Sensor Suites. Also included are KY-100M narrowband/wideband secure communications terminals; KIV-77 MODE 4/5 Identification Friend or Foe (IFF) cryptographic appliques; AN/PYQ-10 Simple Key Loaders; integrated electronic intelligence (ELINT)/signals intelligence (SIGINT) systems; L-3 Communication Systems-West (CSW) multiband receivers/transmitters; ARC-210 radios; high frequency (HF) radios; secure communications equipment; precision navigation and cryptographic devices; aircraft support and support equipment; test and integration support; equipment; spare and repair parts; consumables and accessories; repair and return support; U.S. Government and contractor engineering, technical, and logistics support services; studies and surveys; and other related elements of logistics and program support.

 

https://www.dsca.mil/press-media/major-arms-sales/saudi-arabia-re-3a-tactical-airborne-surveillance-system-aircraft

 

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DSCA Notifies Congress Of Potential FMS Sale To Germany

 

December 7, 2023: The State Department has made a determination to approve the possible Foreign Military Sale to the Government of Germany of MK 54 Lightweight Torpedoes and related equipment for an estimated cost of $300 million. The Government of Germany has requested to buy up to eighty (80) MK 54 All Up Round Lightweight Torpedoes (LWT). Also included are MK 54 Mod 0 LWT spare parts; Recoverable Exercise Torpedoes (REXTORPs) with containers; handling shapes and containers; torpedo spare parts; tools for mounting and dismounting of Air Launch Accessories (ALAs); equipment for analysis of REXTORP exercise shots; REXTORP maintenance equipment; training; publications; support and test equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support.

 

https://www.dsca.mil/press-media/major-arms-sales/germany-mk-54-lightweight-torpedoes

 

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DSCA Notifies Congress Of Potential FMS Sale To Israel

 

December 9, 2023: The Secretary of State has approved the possible Foreign Military Sale to the Government of Israel of 120mm M830A1 High Explosive Anti-Tank Multi-Purpose with Tracer (MPAT) tank cartridges and related equipment for an estimated cost of $106.5 million. The Government of Israel has requested to buy thirteen thousand nine hundred eighty-one (13,981) 120mm M830A1 High Explosive Anti-Tank Multi-Purpose with Tracer (MPAT) tank cartridges. Also included are publications and technical documentation; U.S. Government and contractor engineering, technical, and logistics support services; studies and surveys; and other related elements of logistics and program support.

 

https://www.dsca.mil/press-media/major-arms-sales/israel-m830a1-120mm-tank-cartridges

 

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DSCA Notifies Congress Of Potential FMS Sale To Romania

 

December 12, 2023: The State Department has made a determination to approve the possible Foreign Military Sale to the Government of Romania of Javelin Missiles and related equipment for an estimated cost of $80 million. The Government of Romania has requested to buy two hundred sixty-three (263) Javelin FGM-148F Missiles; and twenty-six (26) Javelin Light Weight Command Launch Units (LWCLU). Also included are enhanced producibility basic skills trainers; missile simulation rounds; Security Assistance Management Directorate (SAMD) technical assistance; Tactical Air Ground Missiles (TAGM) Project Office technical assistance; other associated equipment and services; and other related elements of logistics and program support.

 

https://www.dsca.mil/press-media/major-arms-sales/romania-javelin-missiles

 

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DSCA Notifies Congress Of Potential FMS Sale To Poland

 

December 13, 2023: The State Department has made a determination to approve the possible Foreign Military Sale to the Government of Poland of Communications Equipment and related elements of logistics and program support for an estimated cost of $255 million. The Government of Poland has requested to buy communications equipment, including AN/PRC-117G, AN/PRC-152A, AN/PRC-158, AN/PRC-160, AN/PRC-163, and AN/PRC-167 radios; Global Positioning System (GPS) receivers enabled by Selective Availability Anti-Spoofing Module (SAASM) or M-Code; support equipment; spare parts; technical manuals and publications; new equipment training; U.S. Government and contractor technical engineering, logistics, and personnel services; and other related elements of logistics and program support.

 

https://www.dsca.mil/press-media/major-arms-sales/poland-communications-equipment

 

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DSCA Notifies Congress Of Potential FMS Sale To The Taipei Economic And Cultural Representative Office In The United States Of Command, Control, Communications, And Computers (C4) Life Cycle Support

 

December 15, 2023: The State Department has made a determination to approve the possible Foreign Military Sale to the Taipei Economic and Cultural Representative Office in the United States of Command, Control, Communications, and Computers (C4) Life Cycle Support and related equipment for an estimated cost of $300 million. The Taipei Economic and Cultural Representative Office in the United States (TECRO) has requested to buy follow-on life cycle support to maintain Command, Control, Communications, and Computers (C4) capabilities managed under its Syun An program. The C4 capabilities consist of previously procured Multifunctional Information Distribution Systems-Low Volume Terminals (MIDS-LVT) and Joint Tactical Information Distribution System (JTIDS) equipment, as well as procurement of spare and repair parts; repair and return of equipment; technical documentation; personnel training; software and hardware; software development; maintenance of Continental United States (CONUS) technical laboratories; U.S. Government and contract engineering and technical support; logistics; and other related elements of logistics and program support.

 

https://www.dsca.mil/press-media/major-arms-sales/taipei-economic-and-cultural-representative-office-united-states-31

 

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DSCA Notifies Congress Of Potential FMS Sale To Japan

 

December 15, 2023: The State Department has made a determination to approve the possible Foreign Military Sale to the Government of Japan of AIM-120C-8 Advanced Medium-Range Air-to-Air Missiles (AMRAAM) and related equipment for an estimated cost of $224 million. The Government of Japan has requested to buy one hundred twenty (120) AIM-120C-8 Advanced Medium-Range Air-to-Air Missiles (AMRAAM); and three (3) AIM-120C-8 guidance sections. Also included are AIM-120 Captive Air Training Missiles (CATM), missile containers, and control section spares; Common Munitions Built-in-Test Reprogramming Equipment (CMBRE); ADU-891 Adapter Group Test Sets; munitions support and support equipment; spare and repair parts, consumables, and accessories, and repair and return support; contract logistics support (CLS); classified software delivery and support; classified/unclassified publications and technical documentation; studies and surveys; U.S. Government and contractor engineering, technical and logistical support services; and other related elements of logistics and program support.

 

https://www.dsca.mil/press-media/major-arms-sales/japan-aim-120c-8-advanced-medium-range-air-air-missiles-amraam

 

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DSCA Notifies Congress Of Potential FMS Sale To Greece

 

December 15, 2023: The State Department has made a determination to approve the possible Foreign Military Sale to the Government of Greece of UH-60M Black Hawk Helicopters and related equipment for an estimated cost of $1.95 billion. The Government of Greece has requested to buy thirty-five (35) UH-60M Black Hawk helicopters; eighty (80) T700-GE 701D engines (70 installed, 10 spares); forty-four (44) AN/AAR-57 Common Missile Warning Systems (CMWS) (35 installed, 9 spares); eighty-five (85) H-764U Embedded Global Position Systems with Inertial Navigation (EGI) and country unique selective availability anti-spoofing module (SAASM) (or future replacement) (70 installed, 15 spares); and eighty-five (85) AN/ARC-231A VHF/UHF/LOS SATCOM radio systems. Also included are AN/ARC-231 Receivers/Transmitters RT-1808A (or future replacement); VHF/UHF/LOS SATCOM radios; APR-39C(V)1/4 Radar Warning Receivers; AVR-2B Laser Detecting Sets; APX-123A Identification Friend or Foe (IFF) Transponders; ARC-220 High Frequency (HF) radios with KY-100M; VRC-100 Ground Stations; AN/PYQ-10 Simple Key Loaders (SKLs); KIV-77 Common IFF Applique Crypto Computers; COMSEC Encryption devices; AN/ARN-147(V) Very High Frequency Omni-Directional Range (VOR)/Instrument Landing System (ILS) Receiver Radios; AN/ARN-149(V) Low Frequency (LF)/Automatic Direction Finder (ADF) Radio Receivers; AN/ARN-153 Tactical Air Navigation System (TACAN) Receiver Transmitters; AN/APN-209 Radar Altimeters; AN/ARC-210 radios; EBC-406HM Emergency Locator Transmitters (ELTs); Encrypted Aircraft Wireless Intercommunications Systems (EAWIS); Improved Heads Up Displays (IHUD); Signal Data Converters for IHUD; Color Weather Radars; MX-0D EO/IR with Laser Designators; EO/IR Cabin Monitoring Systems; EO/IR Digital Video Recorders; AN/ARC-201D RT-1478D radios; Engine Inlet Barrier Filters (EIBF); Ballistic Armor Protection Systems (BAPS); Internal Auxiliary Fuel Tank Systems (IAFTS); Fast Rope Insertion Extraction Systems (FRIES); External Rescue Hoists (ERH); Rescue Hoist Equipment Sets; Dual Patient Litter System (DPLS) Sets; Martin Baker Palletized Crew Chief/Gunner Seats with crashworthy floor structural modifications; External Stores Support System (ESSS); Integrated Tow Plates Production Assets; Universal Software Loading Kits; 60kVA Generator Kits; Instrument Panels; DF-500 Personal Location Systems; Trakkabeam Searchlights; External Gun Mount Systems; M-134 Mini Gun Systems; M-240 machine guns; 7.62mm Cartridges; 2.75” Rockets; Flare IR Countermeasure M206; Decoy Flare CM M211; CTG Impulse BBU-35/B; CTG, 25.4mm, Decoy, Chaff, M839/RR170/ Series; M255A2 MK-66 Night Reliability Indicator (NRI); Cartridge, Aircraft Fire Extinguisher; Cartridge, Impulse; Thruster Control Unit (TCU) -3/A; Cartridge, Aircraft; Black Hawk Aircrew Trainer (BAT); Black Hawk Maintenance Trainer (BHMT-M); Black Hawk Avionics Trainer; Maintenance Blended Reconfigurable Avionics Trainer (MBRAT); CAPT-E-Visual & Control System (CAPT-E VCS); training devices; helmets; transportation; organizational equipment; spare and repair parts; support equipment; tools and test equipment; technical data and publications; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support.

 

https://www.dsca.mil/press-media/major-arms-sales/greece-uh-60m-black-hawk-helicopters

 

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DSCA Notifies Congress Of Potential FMS Sale To Japan

 

December 15, 2023: The State Department has made a determination to approve the possible Foreign Military Sale to the Government of Japan of AIM-9X Block II Sidewinder Missiles and related equipment for an estimated cost of $59.03 million. The Government of Japan has requested to buy forty-four (44) AIM-9X Sidewinder Block II Tactical Missiles; and twenty-nine (29) AIM-9X Sidewinder Captive Air Training Missiles (CATM). Also included are missile containers; spare and repair parts; repair of repairables; support and test equipment; publications and technical documentation; personnel training and training equipment; technical assistance, engineering, and logistics support services; transportation and program support; and other related elements of logistics and program support.

 

https://www.dsca.mil/press-media/major-arms-sales/japan-aim-9x-block-ii-sidewinder-missiles

 

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DSCA Notifies Congress Of Potential FMS Sale To Italy

 

December 15, 2023: The State Department has made a determination to approve the possible Foreign Military Sale to the Government of Italy of M142 High Mobility Artillery Rocket Systems (HIMARS) and related equipment for an estimated cost of $400 million. The Government of Italy has requested to buy twenty-one (21) M142 High Mobility Artillery Rocket Systems (HIMARS); and one (1) M31A2 Guided Multiple Launch Rocket System Unitary (GMLRS-U) High Explosive (HE) Pods with Insensitive Munitions Propulsion System (IMPS). Also included are Universal Fielding Modules; towbar toolkits and sets; crypto-fill cable; AN/PRC-158 Multi-Channel Tactical Radio installation kits; Multi-Channel AN/PRC-158 radios; RF-7800i CU100 radio router; HARRIS installation kits for 160W high frequency (HF) radio system; HF AN/PRC-160W-HF radios; Simple Key Loader (SKL) AN/PYQ-10 (C); RF-7800i Tactical Intercom System installation kit; RF7800i Tactical Intercom System; Fire Control Panel Trainer (FCPT) hardware and software; Missile Common Test Device Trainer (MCTD-T), slim; Panasonic Toughbook ruggedized laptop with 30ft cables and power adapters and internal CD ROM drive; RF-7800i Tactical Intercom System training hardware; RF-7800i and CU100 training rigs, test equipment, and Golden System for operator and maintenance training; Launcher Adapter Group (LAG) and Sling; Launcher Control Unit (LCU); Weapons Control Unit (WCU); MCTD V.4 hardware and spares; MCTD V.4 software and publications; spare parts; Maintenance Support Device (MSD) V.4; Wireless AT-Platform Test Set (WATS); guided missile organizational tool kit; Hydraulic Servicing Unit (HSU); Interactive Electronic Technical Manual (IETM) development; Direct Support (DS)/General Support (GS) tool kits; Gas Particulate Filter Unit (GPFU); Forward Repair System (FRS); Positioning Navigation Assembly (PNA) with Selective Availability Anti-Spoofing Module (SAASM) Global Positioning System/Precise Positioning Service (GPS/PPS); Common MLRS SPORT Test Program Set (CMST) hardware and software development; mobile Standard Automotive Tool Set (SATS); RF7800i Tactical Intercom System spare package; Technical Manual Unit organizational Repair Parts and Special Tools List (RPSTL); Technical Manual operator’s manual; Launch POD/container (LP/C) trainer M68A2; GMLRS-U flight surveillance kit; and other related elements of program and logistic support.

 

https://www.dsca.mil/press-media/major-arms-sales/italy-m142-high-mobility-artillery-rocket-systems-himars

 

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DSCA Notifies Congress Of Potential FMS Sale To The Kingdom Of Saudi Arabia

 

December 22, 2023: The State Department has made a determination to approve the possible Foreign Military Sale to the Kingdom of Saudi Arabia of Blanket Order Training and related equipment for an estimated cost of $1 billion. The Kingdom of Saudi Arabia has requested a continuation of a blanket order training program inside and outside of the Kingdom of Saudi Arabia that includes, but is not limited to, flight training; technical training; professional military education; specialized training; Mobile Training Teams (MTTs); Technical Assistance Field Team (TAFT); Extended Training Service Specialists (ETSS); and English language training. These blanket order training cases will cover all relevant types of training offered by or contracted through the U.S. Air Force or Department of Defense Agencies (DOD). This training for the Royal Saudi Air Force (RSAF) and other Saudi forces will include such subjects as civilian casualty avoidance; the laws of armed conflicts; human rights; command and control; and targeting via MTTs and/or broader Programs of Instruction (POIs). Program management; trainers, simulators; travel; billeting; and medical support may also be included.

 

https://www.dsca.mil/press-media/major-arms-sales/saudi-arabia-blanket-order-training-0

 

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DSCA Notifies Congress Of Potential FMS Sale To NATO

 

December 22, 2023: The State Department has made a determination to approve the possible Foreign Military Sale to the NATO Support and Procurement Agency of Stinger missiles and related equipment for an estimated cost of $780 million. The NATO Support and Procurement Agency (NSPA), as Lead Nation on behalf of Germany, Italy, and the Netherlands, has requested to buy nine hundred forty (940) FIM-92K Stinger Block I Missiles. Also included are Battery Coolant Units (BCU); metal containers; U.S. Government and contractor production, technical, and engineering assistance; and other related elements of logistics and program support.

 

https://www.dsca.mil/press-media/major-arms-sales/nato-support-and-procurement-agency-nspa-stinger-missiles

 

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DSCA Notifies Congress Of Potential FMS Sale To NATO

 

December 22, 2023: The State Department has made a determination to approve the possible Foreign Military Sale to the NATO Support and Procurement Agency of C-17 Maintenance and related equipment for an estimated cost of $150 million. NATO Support and Procurement Agency as Lead Nation has requested to buy contractor logistics support for the C-17 Strategic Airlift Capability program; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support.

 

https://www.dsca.mil/press-media/major-arms-sales/nato-support-and-procurement-agency-nspa-c-17-maintenance

 

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DSCA Notifies Congress Of Potential FMS Sale To Israel

 

December 29, 2023: The Secretary of State has approved the possible Foreign Military Sale to the Government of Israel of M107 155mm projectiles and related equipment for an estimated cost of $147.5 million. The Government of Israel has requested 155mm ancillaries (fuzes, primers, and charges) that will be added to previously implemented cases. This amendment will increase the total case value above notification thresholds and thus requires notification of the entire case. The original FMS cases, valued at $96.51 million, included four thousand seven hundred ninety-two (4,792) rounds of M107 155mm artillery ammunition (MDE); fifty-two thousand two hundred twenty-nine (52,229) rounds of M795 155mm artillery ammunition (non-MDE); and thirty thousand (30,000) M4 propelling charges (non-MDE), along with publications; associated technical documentation; and logistics support services, which have subsequently been delivered.

 

https://www.dsca.mil/press-media/major-arms-sales/israel-155mm-artillery-ammunition

 

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Office of the Department of Defense Chief Information Officer (CIO), Department of Defense (DoD)

 

The DOD Proposed To Establish Requirements For A Comprehensive And Scalable Assessment Mechanism To Ensure Defense Contractors And Subcontractors Have, As Part Of The Cybersecurity Maturity Model Certification (CMMC) Program

 

December 26, 2023: 88 Fed. Reg. 89058: The DoD proposed the establishment of requirements for a comprehensive and scalable assessment mechanism to ensure defense contractors and subcontractors have, as part of the Cybersecurity Maturity Model Certification (CMMC) Program, implemented required security measures to expand the application of existing security requirements for Federal Contract Information (FCI) and add new Controlled Unclassified Information (CUI) security requirements for certain priority programs. DoD currently requires covered defense contractors and subcontractors to implement the security protections set forth in the National Institute of Standards and Technology (NIST) Special Publication (SP) 800–171 Rev 2 to provide adequate security for sensitive unclassified DoD information that is processed, stored, or transmitted on contractor information systems and to document their implementation status, including any plans of action for any NIST SP 800–171 Rev 2 requirement not yet implemented, in a System Security Plan (SSP). The CMMC Program provides the Department the mechanism needed to verify that a defense contractor or subcontractor has implemented the security requirements at each CMMC Level and is maintaining that status across the contract period of performance, as required.

 

If adopted, the CMMC program will require most contractors handling Controlled Unclassified Information (CUI) to obtain a third-party certification that they have successfully implemented the 110 cybersecurity controls in the National Institute of Standards and Technology Special Publication (NIST SP) 800-171. It should be noted that contractors handling CUI are already required to comply with NIST SP 800-171 through Defense Acquisition Regulatory Supplement (DFARS) 252.204-7012, but only a self-attestation is currently required. Failure to obtain a CMMC certification will mean a contractor is prohibited from performing an awarded contract.

 

Contractors not handling CUI – but instead, FCI – will also be required to obtain a Level 1 assessment, which is a self-certification consistent with the requirements in FAR 52.204-21.

 

Highlights of the Proposed Regulations

While the proposed regulations are comprehensive, the following are some highlights:

  • The DoD proposes an aggressive rollout, with self-assessments required on all new contracts immediately after the final rule is effective and third-party assessments on all contracts at the start of Phase 2, which is six months after the final rule implementation.
  • While Level 2 is a split level (with some assessments being self-assessments and some being third-party assessments), the DoD assumes the vast majority of Level 2 assessments will be conducted by a Certified Third-Party Assessment Organization (C3PAO) (4,000 entities conducting a self-assessment versus 76,598 entities receiving a third-party assessment).
  • Third-party assessments are to last for three years, although the time may be shortened if the contractor makes modifications to an assessed system. Companies waiting on a third-party assessment may be competing with companies that are getting a second assessment when trying to schedule an assessment with a C3PAO.
  • The proposed rule contains enormous False Claims Act (FCA) risk: Level 1 assessments must be certified by a company executive to the DoD, and third-party Level 2 assessments require a company executive to file an affirmation with the DoD upon the close of the third-party assessment and annually thereafter. There is no doubt that the DoD will argue that these certifications are material.
  • Managed service providers (MSPs) play a crucial role in the CMMC ecosystem, particularly for small and medium-sized businesses. It is not clear what MSPs will be required to do (i.e., a Level 2 assessment) to be able to continue in that role for their clients.
  • Small businesses, subcontractors and non-U.S. companies will be required to comply with the same set of requirements consistent with the type of information they are creating or handling. There are no blanket exemptions except for contracts for the purchase of commercial off-the-shelf products or contracts under the micro-purchase threshold.
  • It remains to be seen how this rule will be implemented through the federal supply schedule and other agency-agnostic contracts such as NASA’s Solutions for Enterprise-Wide Procurement (SEWP).

 

Comments regarding the proposed requirements must be received by February 26, 2024.

 

https://www.federalregister.gov/documents/2023/12/26/2023-27280/cybersecurity-maturity-model-certification-cmmc-program and https://www.hklaw.com/en/insights/publications/2023/12/department-of-defense-releases-long-awaited-cmmc-proposed-rule (Source: H&K Insights, 27 Dec 2023) [Excerpts] and Principal Author: Eric S. Crusius, Holland & Knight LLP

 

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The Department of State Temporarily Modified The Note To Paragraph (h)(1) Of USML Category VIII With Regard To Certain Commodities Used In The KF-21 Aircraft Or Variants Thereof

 

December 4, 2023: 88 Fed. Reg. 84072: The Assistant Secretary of State for Political-Military Affairs temporarily modified the Note to paragraph (h)(1) of USML Category VIII with regard to certain commodities used in the KF-21 aircraft or variants thereof. The Department assessed that it is in the security and foreign policy interests of the United States to allow manufacturers to apply for export authorizations to participate in the development of the KF–21 aircraft by reusing certain defense articles described in paragraph (h)(1), which are specially designed for the U.S. aircraft listed therein, without removing those defense articles from the USML simply because they are re-used in the KF–21. Accordingly, pursuant to ITAR § 126.2, the Assistant Secretary of State for Political-Military Affairs temporarily modified the Note to paragraph (h)(1) of USML Category VIII such that parts, components, accessories, and attachments specially designed for aircraft identified in paragraph (h)(1) are not released from that paragraph due to their reuse in the KF–21 aircraft or variants thereof. The Department assessed that this temporary modification does not change the export jurisdiction or classification of any existing commodities, as it only prevents the possibility of future release from paragraph (h)(1) due to use in the KF–21, which has not yet entered into production. Therefore, when the KF–21 enters production, any paragraph (h)(1) commodities authorized for export for this purpose will retain their current export classification described in paragraph (h)(1). This temporary modification is effective until December 1, 2024, or when terminated by the Department, whichever occurs first.

 

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=57881adf1b3275d0c6c3866ae54bcb01

 

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

 

December 7, 2023: The Commerce Department’s Bureau of Industry and Security (BIS) released three rules as part of a broad effort to ease several categories of export licensing requirements and expand the availability of export license exceptions for key allied and partner countries, as well as for members of certain multilateral export control regimes.

 

The first rule changes licensing requirements for certain Australia Group (AG)-controlled pathogens and toxins (and their related technologies) so that no license is required to AG countries, unless the item is also subject to Chemical Weapons Convention controls. It also removes crime control licensing requirements for Austria, Finland, Ireland, Liechtenstein, South Korea, Sweden, and Switzerland. These countries are in the Global Export Controls Coalition (GECC) (countries listed in Supplement 3 to part 746 of the Export Administration Regulations (EAR)) and maintain a commitment to protecting human rights. 88 Fed. Reg. 85479.

 

https://www.federalregister.gov/documents/2023/12/08/2023-26532/allied-governments-favorable-treatment-revisions-to-certain-australia-group-controls-revisions-to

 

The second rule expands license exception eligibility to additional countries for certain missile technology items, excluding any countries of concern for missile technology reasons or that are subject to a U.S. arms embargo (i.e., countries specified in Country Groups D:4 or D:5). For example, certain components used in or for the “production” of civil manned aircraft will now be eligible for an EAR license exception to countries that are in both Country Group A:2 and the GECC.  The second rule also updates list-based controls to align with recent Missile Technology Control Regime (MTCR) control list changes.  88 Fed. Reg. 85487.

 

https://www.federalregister.gov/documents/2023/12/08/2023-26682/export-administration-regulations-for-missile-technology-items-2018-2019-and-2021-missile-technology

 

The third rule seeks public comment on ways to facilitate the use of License Exception Strategic Trade Authorization (STA), including by clarifying which items are eligible for STA to certain destinations, and proposing a number of changes intended to increase the usage of STA and reduce the burden on exporters, reexporters, and transferors, while at the same time still ensuring that U.S. national security and foreign policy interests are protected for items authored under STA. For example, the rule proposes to allow National Security (NS)-only reason for control items received under STA to be reexported between or among countries that are in both A:5 and the GECC with authorization from the competent authorities of those countries under license exception Additional Permissive Reexports (APR). 88 Fed. Reg. 85734.

 

https://www.federalregister.gov/documents/2023/12/08/2023-26681/proposed-enhancements-and-simplification-of-license-exception-strategic-trade-authorization-sta

 

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Departments of Justice, Commerce, Homeland Security, State and Treasury

 

Departments of Justice, Commerce, Homeland Security, State, and Treasury Jointly Advise Maritime and Transportation Industry on Know-Your-Cargo Policy

 

The Department of Justice, Department of Commerce’s Bureau of Industry and Security (BIS), Department of Homeland Security’s Homeland Security Investigations (HSI), Department of State’s Directorate of Defense Trade Controls (DDTC), and Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued a joint compliance note highlighting common tactics deployed by malign actors in the maritime and other transportation industries as well as recent enforcement actions taken in response to alleged violations. This note marks the first collective effort by the five agencies to inform the private sector about enforcement trends and provide guidance to the business community on compliance with U.S. sanctions and export laws. The Departments of Justice, Commerce, and the Treasury have previously issued two tri-seal compliance notes.

 

The compliance note describes various deceptive shipping and transportation tactics deployed by malign actors to facilitate the illicit transfer of cargo. In addition, the note advises companies doing business in these industries to implement and strengthen their compliance controls as necessary, especially when operating in high-risk areas or with counterparties who exhibit odd behavior. The note further identifies several compliance practices that may assist companies in identifying potential efforts to evade U.S. laws.

The compliance note also highlights criminal and civil enforcement authorities that the relevant agencies have taken to combat the illicit shipment of cargo, as well as recent enforcement actions. These cases include the first-ever criminal resolution by the Department of Justice against a bareboat charter of a crude oil tanker carrying contraband Iranian oil and civil enforcement actions taken by BIS and OFAC imposing civil monetary penalties.

 

https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_public_portal_news_and_events and https://www.justice.gov/media/1327981/dl?inline

 

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U.S. Census Bureau

 

Tips on How to Resolve AES Response Messages

December 21, 2023: 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: 126

Narrative: Conveyance Name Not Allowed for MOT

Severity: Fatal

Reason: The Mode of Transportation selected does not allow a Conveyance Name to be reported.

 

Resolution: A Conveyance Name/Carrier Name is only allowed to be reported for vessel, air, rail, or truck modes of transportation.

Verify the Mode of Transportation Code and the Conveyance Name/Carrier Name, correct the shipment, and resubmit.

 

Response Code: 651

Narrative: Vehicle Information Required for Export Information Code

Severity: Fatal

Reason: The Export Information Code is reported as HV for personally owned vehicles being exported as household effects, but the Used Vehicle Information is not included.

 

Resolution: Used Vehicle Information must be reported if the Export Information Code is HV. See ‘Appendix E, Commodity Filing Export Information’ of the AESTIR for a complete listing of all the Export Information Codes and their reporting guidelines.

Verify the Export Information Code, correct the shipment and resubmit.

LATEST FINES, PENALTIES AND SANCTIONS

 

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

 

December 6, 2023: A federal indictment was unsealed in the District of Oregon charging a Belgian national in connection with the export of sensitive, military-grade technology from the United States to end users in the People’s Republic of China. Hans Maria De Geetere, 61, of Knokke-Heist, Belgium, has been charged with one count of obtaining goods intended for China in violation of the Export Control Reform Act (ECRA) and four counts of making false statements.

 

According to court documents, between April 2021 and August 2023, De Geetere, who owned and operated a Belgium-based supply chain management and procurement services company called Knokke Heist Support Corporation Management (KHSCM), attempted to illegally procure for export to China controlled accelerometers valued at more than $930,000.

 

https://www.justice.gov/usao-or/pr/belgian-national-faces-federal-charges-illegally-procuring-critical-us-technology-end

 

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December 8, 2023: The U.S. Attorney’s Office for the Eastern District of Virginia announced the seizure of three domains used by Specially Designated Nationals (SDNs), Specially Designated Global Terrorists (SDGTs), and their members associated with Lebanese Hizballah. According to court records, the United States obtained court authorization to seize three domains registered to Verisign, Inc. – ctexlb.com, imarwaiktissad.com, and russia-now.com.  These three domains are subject to seizure as assets of entities and organizations engaged in planning or perpetrating acts of terrorism against the United States, its citizens and residents, and their property. These domains also afford a source of influence over those entities and organizations. The seizure of these domains will cut off that source of support and influence.

 

https://www.justice.gov/usao-edva/pr/edva-seizes-three-domains-used-lebanese-hizballah-and-its-affiliates

 

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December 8, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with Nasdaq, Inc.  Nasdaq agreed to remit $4,040,923 to settle its potential civil liability for a former wholly owned foreign subsidiary’s apparent violations of sanctions on Iran.  This former subsidiary engaged in the exportation of services to Iran and the Government of Iran, thereby committing 151 apparent violations of OFAC sanctions on Iran.  The settlement amount reflects OFAC’s determination that Nasdaq’s conduct was non-egregious and voluntarily self-disclosed.

 

https://ofac.treasury.gov/recent-actions/20231208_33 and https://ofac.treasury.gov/media/932386/download?inline

 

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December 13, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $1,207,830 settlement with CoinList Markets LLC.  CoinList agreed to settle its potential civil liability arising from processing 989 transactions on behalf of users ordinarily resident in Crimea between April 2020 and May 2022, in apparent violation of OFAC’s Russia/Ukraine sanctions.  The settlement amount reflects OFAC’s determination that CoinList’s conduct was non-egregious and not voluntarily self-disclosed.

 

https://ofac.treasury.gov/recent-actions/20231213_33 and https://ofac.treasury.gov/media/932406/download?inline and

 

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December 19, 2023: The Justice Department unsealed an indictment charging Iranian national Hossein Hatefi Ardakani and co-defendant Gary Lam, who worked for a Chinese company, with crimes related to the procurement of U.S.-manufactured dual-use microelectronics for the Islamic Revolutionary Guard Corps (IRGC) Aerospace Force Self Sufficiency Jihad Organization’s (ASF SSJO) one-way attack unmanned aerial vehicle (UAV) program.

 

According to the indictment, between at least in or around September 2014 and September 2015, Ardakani and Lam, who was based in China and Hong Kong, as well as other associates, conspired to illegally purchase and export from the United States to Iran dual-use microelectronics that are commonly used in UAV production, including high electron mobility transistors (HEMTs), monolithic microwave integrated circuit (MMIC) power amplifiers, and analog-to-digital converters. Each of these components are subject to U.S. export controls for anti-terrorism, national security and regional stability reasons.

 

The indictment further alleges that on four separate occasions Ardakani and his co-conspirators used a web of foreign companies to accomplish their obfuscation and evasion efforts. For example, between June and September 2015, Ardakani and Lam caused an unwitting French company to purchase from a U.S. company several pieces of analog-to-digital converters with applications in wireless and broadband communications, radar and satellite subsystems, multicarrier, multimodal cellular receivers, antenna array positioning and infrared imaging. Lam then caused a division of the French company to ship the analog-to-digital converters to Hong Kong, where they were reexported to Iran. A variation of this tactic – involving witting and unwitting companies in Canada, Hong Kong, and China – was used on the other three occasion

 

https://www.justice.gov/opa/pr/iranian-national-charged-unlawfully-procuring-microelectronics-used-unmanned-aerial-vehicles

 

*******

 

December 21, 2023: Robert Alcantara was sentenced to 68 months in prison for trafficking firearms.  According to the charging documents and other filings and statements made in court:

From approximately 2017 until January 2022, Alcantara operated a “ghost gun” factory out of his home in Rhode Island.  Alcantara purchased ghost gun kits at gun shows and other places and then machined the kits into working firearms.  Once he had completed the untraceable firearms, he exported and sold them to the Dominican Republic.  Most of those guns were handguns, but a number were rifles.  Alcantara and others then laundered the proceeds of his gun sales.

 

On November 20, 2021, Alcantara was stopped in his vehicle in possession of kits to build approximately 45 ghost guns. Alcantara was interviewed by law enforcement agents and stated that he was planning to turn the 45 kits into working firearms, and he had 50 additional similar ghost guns at his home.

 

https://www.justice.gov/usao-sdny/pr/rhode-island-man-sentenced-68-months-prison-trafficking-over-one-hundred-ghost-guns

*******

 

December 21, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $466,200 settlement with Privilege Underwriters Reciprocal Exchange (PURE). PURE agreed to settle its potential civil liability for 39 apparent violations of OFAC’s Ukraine-/Russia-Related sanctions.  Between May 2018 and July 2020, PURE engaged in transactions related to four insurance policies involving a blocked Panama-based company owned by Specially Designated National Viktor Vekselberg (Vekselberg). The settlement amount reflects OFAC’s determination that PURE’s apparent violations were not voluntarily self-disclosed and were non-egregious.

 

https://ofac.treasury.gov/recent-actions/20231221_33 and https://ofac.treasury.gov/media/932486/download?inline

 

*******

 

December 22, 2023: 88 Fed. Reg. 88567: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Stephanie Joahna Gloria (“Gloria”) for seven years until May 23, 2029. On May 23, 2022, Gloria was convicted of violating 18 U.S.C. 554(a). Specifically, Gloria was convicted of smuggling from the United States to Mexico 3,200 rounds of Winchester 5.56-millimeter ammunition. As a result of her conviction, the Court sentenced Gloria to 70 months of imprisonment, three years of supervised release, and a $100 assessment.

 

https://www.federalregister.gov/documents/2023/12/22/2023-28273/in-the-matter-of-stephanie-joahna-gloria-inmate-number-74313-509-fci-aliceville-federal-correctional

 

*******

 

December 22, 2023: 88 Fed. Reg. 88569: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Donald Robert Witherow (“Witherow”) for three years until October 13, 2025. On October 13, 2022, Witherow was convicted of smuggling firearms ammunition and firearms magazines from the United States to the Netherlands. As a result of his conviction, the Court sentenced Witherow to 12 months and one day of imprisonment, one year of supervised release and a $200 assessment.

 

https://www.federalregister.gov/documents/2023/12/22/2023-28275/in-the-matter-of-donald-robert-witherow-6651-buffalo-road-cresson-pa-16421-order-denying-export

 

*******

 

December 22, 2023: 88 Fed. Reg. 88571: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Edson Daniel Montelongo (“Montelongo”) for ten years until June 22, 2032. On June 22, 2022 Montelongo was convicted of smuggling various firearms from the United States to Mexico. As a result of his conviction, the Court sentenced him to 70 months in prison, three years of supervised release, and a $500 special assessment.

 

https://www.federalregister.gov/documents/2023/12/22/2023-28271/in-the-matter-of-edson-daniel-montelongo-inmate-number-75304-509-fci-bastrop-po-box-1010-bastrop-tx

 

*******

 

December 22, 2023: 88 Fed. Reg. 88564: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Rolondo Alexei Pupo-Abrahantes (“Pupo-Abrahantes”) for ten years until November 16, 2032. On November 16, 2022 Pupo-Abrahantes was convicted of conspiring to smuggle various firearms from the United States to Ecuador. As a result of his conviction, the Court sentenced him to 30 months in prison, two years of supervised release and a $300 special assessment.

 

https://www.federalregister.gov/documents/2023/12/22/2023-28277/in-the-matter-of-rolondo-alexei-pupo-abrahantes-inmate-number-76860-509-fci-pollock-po-box-4050

 

*******

 

December 22, 2023: 88 Fed. Reg. 88565: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Jonathan Yet Wing Soong (“Soong”) for ten years until April 28, 2033. On April 28, 2023 Soong was convicted of knowingly and willfully exporting from the United States to Beihang University, an entity on the Department of Commerce’s Entity List, EAR99 CIFER (Comprehensive Identification from Frequency Responses) software, a tool that allows a user to develop a dynamic model of an aircraft using system identification techniques, without having first obtained the required authorization from the Department of Commerce. As a result of his conviction, the Court sentenced Soong to 20 months of imprisonment, three years of supervised release, $100 assessment and $168,885 in restitution.

 

https://www.federalregister.gov/documents/2023/12/22/2023-28268/in-the-matter-of-jonathan-yet-wing-soong-inmate-number-03089-510-usp-lompoc-us-penitentiary-3901

 

*******

 

December 22, 2023: 88 Fed. Reg. 88566: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Javier Alonso Galvan-Hernandez (“Galvan-Hernandez”) for ten years until May 11, 2032. On May 11, 2022 Galvan-Hernandez was convicted of smuggling various firearms from the United States to Mexico. As a result of his conviction, the Court sentenced him to 84 months in prison, three years of supervised release, and a $200 special assessment.

 

https://www.federalregister.gov/documents/2023/12/22/2023-28274/in-the-matter-of-javier-alonso-galvan-hernandez-inmate-number-79786-509-fci-bastrop-po-box-1010

 

*******

 

December 22, 2023: 88 Fed. Reg. 88568: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Angel Huerta-Garay (“Huerta-Garay”) for tens years until April 26, 2032. On April 26, 2022 Huerta-Garay was convicted of exporting and sending, and attempting to export and send, various firearms from the United States to Mexico. As a result of his conviction, the Court sentenced him to 52 months in prison, three years of supervised release, and a $100 special assessment.

 

https://www.federalregister.gov/documents/2023/12/22/2023-28276/in-the-matter-of-angel-huerta-garay-inmate-number-67193-509-fci-beaumont-po-box-26020-beaumont-tx

 

*******

 

December 22, 2023: 88 Fed. Reg. 88570: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Jose Luis Garcia (“Garcia”) for ten years until December 14, 2031. On December 14, 2021 Garcia was convicted of conspiring to smuggle firearms from the United States to Mexico without first having obtained the required export license and authorization from the U.S. Department of State or U.S. Department of Commerce. As a result of his conviction, the Court sentenced Garcia to 57 months of imprisonment, three years of supervised release, $20,000 criminal fine and a $100 assessment.

 

https://www.federalregister.gov/documents/2023/12/22/2023-28270/in-the-matter-of-jose-luis-garcia-inmate-number-21856-509-fci-bastrop-federal-correctional

 

*******

 

December 22, 2023: 88 Fed. Reg. 88572: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Tina Chen, a/k/a Ya When Chen, a/k/a Wen Tina Chen, a/k/a Tina Dunbar, a/k/a Tina Dubner (“Chen”) for ten years until February 23, 2033. On February 23, 2023 Chen was convicted of exporting goods from the United States to Iran without the required licenses from the Office of Foreign Assets Control. As a result of her conviction, the Court sentenced Chen to 13 months of confinement, three years of supervised release, and a $100 assessment.

 

https://www.federalregister.gov/documents/2023/12/22/2023-28278/in-the-matter-of-tina-chen-aka-ya-when-chen-aka-wen-tina-chen-aka-tina-dunbar-aka-tina-dubner-inmate

 

Sanctions

 

U.S. Department of Commerce, Bureau of Industry and Security (BIS)

 

December 5, 2023: The U.S. Department of Commerce, Bureau of Industry and Security (BIS) added forty-two entities under forty-four entries to the Entity List. These entities are listed under the destinations of Armenia (3), Belarus (1), Belgium (3), China, People’s Republic of (China) (1), Cyprus (4), Germany (1), Kazakhstan (1), Netherlands (1), Russia (28), and the United Arab Emirates (1). Two entities are added to the Entity List under two destinations, accounting for the difference in the totals. These entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States.

 

Specifically, eleven entities are directly tied to or associated with the joint Iranian-Russian efforts to develop and construct a UAV production facility in the “Alabuga Special Economic Zone,” which is intended to produce thousands of Shahed-136 drones in support of Russia’s war effort against Ukraine.  Two entities were added for engaging in illicit efforts to acquire and divert the highest priority U.S.-origin electronic components with military applications, including in connection with avionics, missiles, unmanned aerial vehicles (drones, or UAVs), electronic warfare receivers, and military radar. Thirteen entities were added for engaging in dealings with entities on the Entity List, including entities designated as Russian military end users, or entities subject to sanctions administered by the Department of the Treasury’s Office of Foreign Assets Control (OFAC).  Sixteen other entities were added pursuant to two BIS enforcement actions involving the acquisition and diversion of U.S.-origin electronic and avionic components on behalf of parties in Russia.

 

Armenia:

  • Aram Kocharyan;
  • ARM-BEKAR LLC; and
  • Hermine Kocharyan.

 

Belarus:

  • Nanotech Ltd.

 

Belgium:

  • European Technical Trading BV;
  • Hans Maria De Geetere; and
  • Knokke-Heist Support Management Corporation.

 

China:

  • Planet Technology.

 

Cyprus:

  • Alexander Nikolayevich Vadyunin;
  • Eriner Limited;
  • OOO Aviation Service Int’l; and
  • The Mother Ark.

 

Germany:

  • FTL GmBH.

 

Kazakhstan:

  • Elem Group, LLC.

 

The Netherlands:

  • Hasa Nederland B.V.

 

Russia:

  • Aircompany North-West LLC;
  • Alexander Nikolayevich Vadyunin;
  • AO Geomir;
  • AO SET-1;
  • Argussoft Company LLC;
  • AST Components;
  • ATB Electronica LLC;
  • Digicom, LTD.;
  • Dolphin Alabuga LLC;
  • Elektrokom VPK;
  • Inelso LLC;
  • Intekh LLC;
  • JSC Yue Complex Service Solutions;
  • North-West Technics LLC;
  • OOO Alabuga-Volokno;
  • OOO Albatross;
  • OOO Alb.Aero;
  • OOO Assistagro;
  • OOO Aviation Service Int’l;
  • OOO Druzhba;
  • OOO Geomiragro;
  • OOO SMU5;
  • OOO Ural-Trast;
  • PF RIELTA LLC;
  • Prius Electronics LLC;
  • PT Air;
  • RosAero JSC; and
  • YE-International AO.

 

United Arab Emirates:

  • RosAero FZC.

 

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3390-press-release-12-5-entity-list-package-hans-de-geetere/file and https://public-inspection.federalregister.gov/2023-26935.pdf

 

*******

 

December 7, 2023: 88 Fed. Reg. 85209:  The Bureau of Industry and Security (BIS) renewed the temporary denial order for Belavia Belarusian Airlines of Belarus for one year until December 7, 2024 for its continued use of ECCN 9A991 aircraft.

 

https://www.federalregister.gov/documents/2023/12/07/2023-26896/belavia-belarusian-airlines-4a-nemiga-str-minsk-belarus-220004-order-renewing-temporary-denial-of

 

*******

 

December 14, 2023: 88 Fed. Reg. 86623: The Bureau of Industry and Security (BIS) renewed the temporary denial order for Nordwind Airlines of Russia for one year until December 14, 2024 for its continued use of ECCN 9A991 aircraft.

https://www.federalregister.gov/documents/2023/12/14/2023-27475/nordwind-airlines-leningradskaya-str-building-25-office-27-28-moscow-region-khimki-city141402-russia

*******

 

December 14, 2023: 88 Fed. Reg. 86626:  The Bureau of Industry and Security (BIS) renewed the temporary denial order for Siberian Airlines d/b/a S7 Airlines of Russia for one year until December 14, 2024 for its continued use of ECCN 9A991 aircraft.

 

https://www.federalregister.gov/documents/2023/12/14/2023-27476/siberian-airlines-dba-s7-airlines-633104-novosibirskaya-obl-g-ob-prospekt-mozzherina-d-10-ofis-201

 

*******

 

December 14, 2023: 88 Fed. Reg. 86628:  The Bureau of Industry and Security (BIS) renewed the temporary denial order for Pobeda Airlines of Russia for one year until December 14, 2024 for its continued use of ECCN 9A991 aircraft.

 

https://www.federalregister.gov/documents/2023/12/14/2023-27474/pobeda-airlines-108811-russian-federation-moscow-p-moskovskiy-kievskoe-shosse-22nd-km-41-moscow

 

*******

 

December 20, 2023: 88 Fed. Reg. 87897: The Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) by adding 13 persons to the Unverified List (UVL). The 13 persons are added to the UVL on the basis that BIS was unable to verify their bona fides. All 13 persons are being added under the destination of the People’s Republic of China (China). The 13 persons added to the UVL are:

 

  • Beijing Jin Sheng Bo Yue Technology Co., Ltd.;
  • Beijing Shengbo Xietong Technology Co., Ltd.;
  • Fulian Precision Electronics (Tianjin) Co., Ltd.;
  • Guangzhou Xinwei Transportation Co., Ltd.;
  • Guangzhou Xinyun Intelligent Technology Co., Ltd.;
  • Nanning Fulian Fu Gui Precision Industrial Co., Ltd.;
  • Ningbo MOOF Trading Co., Ltd.;
  • Plexus (Xiamen) Co., Ltd.;
  • PNC Systems (Jiangsu) Co., Ltd.;
  • Shenzhen Bozhitongda Technologic Co., Ltd.;
  • Shenzhen Jia Li Chuang Tech Development Co., Ltd.;
  • Shenzhen Jingelang Co., Ltd.; and
  • Xi’An Yierda Co., Ltd.

 

https://www.federalregister.gov/documents/2023/12/20/2023-27928/additions-to-the-unverified-list

 

*******

 

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

 

December 1, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Luis Miguel Martinez Morales (Martinez) for his role in corruption in Guatemala wherein he engaged in widespread bribery schemes, including schemes related to government contracts. Martinez is being designated pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world. Martinez was added to OFAC’s SDN List.

 

https://home.treasury.gov/news/press-releases/jy1941 and https://ofac.treasury.gov/recent-actions/20231201_33

 

*******

 

December 1, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on three entities and identified as blocked property three vessels that used Price Cap Coalition services while carrying Russian crude oil above the Coalition-agreed price cap. These sanctions build on Treasury’s previous actions in October and November of this year and represent once again Treasury’s commitment, alongside its Coalition partners, to responsibly reduce oil revenues that the Russian government uses to fund its war against Ukraine.

 

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

 

  • HS Atlantica Limited of Liberia; [RUSSIA-EO14024].
  • Sterling Shipping Incorporated of the United Arab Emirates; and
  • Streymoy Shipping Limited of the United Arab Emirates.

 

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

 

  • HS Atlantica (5LIP5) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9322839;
  • NS Champion (A8FD9) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9299719; and
  • Viktor Bakaev (D5BN6) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9610810.

 

Russia Related General License 78:

 

All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to one of the following activities involving the blocked persons or vessels described below are authorized through 12:01 a.m. eastern standard time, February 29, 2024, provided that any payment to a blocked person must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations (RuHSR):

(1) The safe docking and anchoring of any of the blocked vessels listed in paragraph (b) of this general license (“blocked vessels”) in port;

(2) The preservation of the health or safety of the crew of any of the blocked vessels; or

(3) Emergency repairs of any of the blocked vessels or environmental mitigation or protection activities relating to any of the blocked vessels.

 

The authorization of this general license applies to the following blocked persons and vessels listed on the Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List and any entity in which any of the following persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest:

(1) Sterling Shipping Incorporated (registered owner of NS Champion; IMO 9299719);

(2) Streymoy Shipping Limited (registered owner of Viktor Bakaev, IMO 9610810); and

(3) HS Atlantica Limited (registered owner of HS Atlantica, IMO 9322839).

 

This general license does not authorize:

(1) The entry into any new commercial contracts involving the property or interests in property of any blocked persons, including the blocked entities and vessels described above;

(2) The offloading of any cargo onboard any of the blocked vessels, including the offloading of crude oil or petroleum products of Russian Federation origin, except for the offloading of cargo that is ordinarily incident and necessary to address vessel emergencies authorized pursuant to this general license;

(3) Any transactions related to the sale of crude oil or petroleum products of Russian Federation origin;

(4) Any transactions prohibited by Directive 2 under E.O. 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions;

(5) Any transactions prohibited by Directive 4 under E.O. 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation; or

(6) Any transactions otherwise prohibited by the RuHSR, including transactions involving the property or interests in property of any person blocked pursuant to the RuHSR, other than transactions involving the blocked persons or vessels above in this general license, unless separately authorized.

 

https://home.treasury.gov/news/press-releases/jy1940 and https://ofac.treasury.gov/recent-actions/20231201 and https://ofac.treasury.gov/media/932361/download?inline

 

*******

 

December 4, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) targeted several individuals for their role in undermining the peace, security, and stability of Sudan. These designations support diplomatic efforts by the international community to end the conflict and demonstrate the U.S. commitment to achieve a civilian government and a transition to democracy.

 

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

 

  • Abbas, Mohamed Atta Emoula of Sudan;
  • Al-Hussein, Taha Osman Ahmed of the United Arab Emirates, Sudan and the Democratic Republic of the Congo; and
  • Salah, Salah Abdallah Mohamed of Egypt and the Sudan.

 

 

https://home.treasury.gov/news/press-releases/jy1947 and https://ofac.treasury.gov/recent-actions/20231204

 

*******

 

December 5, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 11 entities and seven individuals pursuant to Executive Order (E.O.) 14038 and one individual pursuant to E.O. 14024. This action increases the pressure on Alyaksandr Lukashenka’s (Lukashenka) authoritarian regime for its brutal suppression of Belarus’s democratic civil society, corrupt financial enrichment of the Lukashenka family, and complicity in Russia’s unjustified war against Ukraine.

 

OFAC also targeted a network led by Belgium-based Hans De Geetere that is involved in procuring electronics with military applications for Russian end-users. The network consists of nine entities and five individuals based in Russia, Belgium, Cyprus, Sweden, Hong Kong, and the Netherlands.

 

Concurrent with OFAC’s action, the U.S. Department of Justice (DOJ) unsealed two separate indictments against Hans De Geetere related to his years-long scheme to unlawfully export sensitive, military-grade technology from the United States to end users located in the People’s Republic of China (PRC) and the Russian Federation. The U.S. Department of Commerce is also concurrently adding Hans De Geetere and five entities to the Bureau of Industry and Security (BIS) Entity List. Additionally, Belgian authorities took action against De Geetere on charges related to his global illicit procurement scheme.

 

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

 

  • Babarikin, Vadim Aleksandrovich of Belarus;
  • Beun Kimberley Catriona Lucinda, Eeklo of Belgium and The Netherlands;
  • De Geetere, Hans of Belgium;
  • De Geetere, Tom of Belgium;
  • Gaichuk, Nikolai Nikolaevich of Belarus;
  • Kulemekov, Vladimir of Russia;
  • Moroz, Alexander Ivanovich of Belarus;
  • Petrovich, Viktor Evgenievich of Belarus;
  • Shakutsin, Aliaksandr Vasilevich of Belarus;
  • Shautsou, Dzmitry Yauhenievich of Belarus;
  • Shkadarevich, Alexei Petrovich of Belarus;
  • Skvortsov, Sergey of Sweden and Russia; and
  • Topuzidis, Pavel Georgievich of Belarus.

 

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

 

  • Ahetei Limited of Cyprus;
  • Belarusian Production And Trade Concern Of Timber Woodworking And Pulp And Paper Industry of Belarus;
  • Eriner Limited of Cyprus;
  • European Technical Trading of Belgium;
  • European Trading Technology B.V. of The Netherlands;
  • Hasa Nederland B.V., Of The Netherlands and Belgium;
  • JSC Minsk Mechanical Plant Named After S.I. Vavilov Management Company Of Belomo Holding of Belarus;
  • JSC Zenit Belomo of Belarus;
  • Knokke Heist Support Corporation Management of Belgium;
  • Lar Vorto Services Limited of Cyprus;
  • M And S Trading of China;
  • OJSC Horizont Holding Management Company of Belarus;
  • Open Joint Stock Company Alevkurp of Belarus;
  • Open Joint Stock Company Amkodor Management Holding Company of Belarus;
  • Planar Research And Production Holdings For Precision Engineering of Belarus;
  • Republican Production And Trade Unitary Enterprise Management Company Of The Holding Belarusian Cement Company of Belarus;
  • Republican Unitary Enterprise Beltamozhservice of Belarus;
  • Scientific Technical Center Lemt Belomo of Belarus;
  • Tabak Invest LLC of Belarus; and
  • The Mother Ark LTD of Cyprus.

 

Belarus General License 10:

 

All transactions prohibited by the Belarus Sanctions Regulations, 31 CFR part 548 (BSR), that are ordinarily incident and necessary to the wind down of any transaction involving Tabak Invest LLC (“Tabak Invest”), or any entity in which Tabak Invest owns, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern standard time, February 2, 2024, provided that any payment to a blocked person is made into a blocked account at a U.S. financial institution in accordance with the BSR.

 

This general license does not authorize any transactions otherwise prohibited by the BSR, including transactions involving any person blocked pursuant to the BSR other than the blocked persons described above in this general license, unless separately authorized.

 

https://home.treasury.gov/news/press-releases/jy1949 and https://home.treasury.gov/news/press-releases/jy1948 and https://ofac.treasury.gov/media/932376/download?inline

 

*******

 

December 6, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned 15 Mexican individuals— several of whom are U.S. fugitives—and two Mexico-based companies linked, directly or indirectly, to the Beltrán Leyva Organization (BLO). The BLO continues to be one of the most powerful drug trafficking organizations in the world and is heavily involved in the transportation and distribution of deadly drugs, including fentanyl, to the United States. It has been one of the largest suppliers of cocaine to the U.S. market for over two decades.

 

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

 

  • Aleman Meza, Oscar of Mexico;
  • Bastidas Erenas, Juan Pablo of Mexico;
  • Beltran Araujo, Amberto of Mexico;
  • Beltran Araujo, Mario German of Mexico;
  • Caro Monge, Jesus Jose Gil of Mexico;
  • Caro Quintero, Jose Gil of Mexico;
  • Estevez Colmenares, Ricardo of Mexico;
  • Estrada Gutierrez, Jose de Jesus of Mexico;
  • Flores Ortiz, Francisco Abraham of Mexico;
  • Franco Figueroa, Ulises of Mexico;
  • Gastelum Iribe, Oscar Manuel of Mexico;
  • Inzunza Noriega, Pedro of Mexico;
  • Leon Rodriguez, Juvenal of Mexico;
  • Lopez Lopez, Servando of Mexico; and
  • Pulido Diaz, Oscar of Mexico.

 

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

 

  • Difaculsa, S.A. DE C.V., of Mexico; and
  • Editorial Mercado Ecuestre, S.A. DE C.V., of Mexico.

 

https://home.treasury.gov/news/press-releases/jy1952 and https://ofac.treasury.gov/recent-actions/20231206

 

*******

 

December 7, 2023:  the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 13 individuals and entities responsible for providing tens of millions of dollars’ worth of foreign currency generated from the sale and shipment of Iranian commodities, backed by the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), to the Houthis in Yemen. Through a complex network of exchange houses and companies in multiple jurisdictions, these persons, under the auspices of U.S.-sanctioned Houthi and IRGC-QF financial facilitator Sa’id al-Jamal, serve as an important conduit through which Iranian money reaches the country’s militant partners in Yemen.

 

OFAC in coordination with the United Kingdom also designated two individuals associated with an advanced persistent threat (APT) group that is sponsored by the Russian Federal Security Service (FSB) and has targeted individuals and entities in the United States, United Kingdom, and other allied and partner countries.

 

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

 

  • Alodhari, Khaled Yahya Rageh of Yemen;
  • Deniz, Fadi of Lebanon, Turkey, United Kingdom, Russia, Saint Kitts and Nevis;
  • Duri, Ahmet of Turkey;
  • Hudroj, Bilal of Lebanon;
  • Korinets, Andrey Stanislavovich of Russia; and
  • Peretyatko, Ruslan Aleksandrovich of Russia.

 

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

 

  • Abu Sumbol General Trading L.L.C of the United Arab Emirates;
  • Davos Exchange And Remittances Company Khaled Al Athari And Partner General Partnership of Yemen;
  • Deniz Capital LLP, of the United Kingdom;
  • Deniz Capital Maritime Inc, of Saint Kitts and Nevis;
  • Hodroj Exchange S.A.R.L of Lebanon;
  • OOO Russtroi-SK of Russia;
  • Pirlant Istanbul Kuyumculuk Ticaret Limited Sirketi of Turkey;
  • Vanessa Group Limited of the United Kingdom; and
  • Vanessa Imex Group Ithalat Ihracat Ve Dis Ticaret Limited Sirketi of Turkey and Lebanon.

 

https://home.treasury.gov/news/press-releases/jy1961 and https://home.treasury.gov/news/press-releases/jy1962 and https://ofac.treasury.gov/recent-actions/20231207

 

*******

 

December 8, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 20 individuals for their connection to human rights abuse in nine countries. An additional two individuals were sanctioned under the Department of State’s counterterrorism authority. Furthermore, the Department of State likewise designated individuals in Russia, Indonesia, and the People’s Republic of China (PRC) for visa restrictions pursuant to Section 7031(c) of the Annual Appropriations Act. These actions are taken in concert with measures imposed by partners in the United Kingdom and Canada, which have similarly utilized economic measures to deter human rights abuse globally.

 

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

 

  • Andre, Johnson of Haiti;
  • Ardestani, Mohammad Mahdi Khanpour of Iran;
  • Biel, Gordon Koang of South Sudan;
  • Bozize, Jean-Francis of the Central African Republic;
  • Byabashaija, Johnson of Uganda;
  • Destina, Renel of Haiti;
  • Farahani, Majid Dastjani of Iran and Venezuela;
  • Gao, Qi of China;
  • Hanafi, Khalid of Afghanistan;
  • Hassan Aliyani, Ahmed Mahamud of the Democratic Republic of the Congo and Tanzania;
  • Hoth, Gatluak Nyang of South Sudan;
  • Hu, Lianhe of China;
  • Innocent, Vitel’homme of Haiti;
  • Joseph, Wilson of Haiti;
  • Koijee, Jefferson of Liberia;
  • Mahmood, Fariduddin of Afghanistan;
  • Ngoma, Willy of the Democratic Republic of the Congo;
  • Nkalubo, Mohamed Ali of the Democratic Republic of the Congo and Uganda;
  • Rukunda, Michel of the Democratic Republic of the Congo;
  • Salleh Adoum Kette, Mahamat of the Central African Republic;
  • Wajang, Joseph Mantiel of Sudan and South Sudan; and
  • Yakutumba, William Amuri of the Democratic Republic of the Congo.

 

Global Magnitsky-related Frequently Asked Question 1145:

 

Question 1145: What if a governing institution in Afghanistan is led by an individual who has been blocked pursuant to the Global Magnitsky Sanctions Regulations?

 

Answer: Generally, the designation of an individual with a leadership role in a governing institution does not itself block the governing institution.  Accordingly, engaging in a routine interaction with a governing institution in which a blocked individual is an official, but that does not directly or indirectly involve the blocked individual in question, is not prohibited.  This applies to any designated individual in Afghanistan who has a leadership role in a governing institution in Afghanistan, including any individual blocked pursuant to the Global Magnitsky Sanctions Regulations (GMSR).  For example, making a customs payment to a governing institution in Afghanistan led by a blocked individual would not be prohibited by the GMSR.  However, engaging directly or indirectly with that blocked individual, such as receiving an invoice bearing the blocked individual’s signature for a commercial transaction, would be prohibited by the GMSR unless authorized by OFAC or exempt.

 

In addition, certain humanitarian-related transactions involving individuals blocked pursuant to the GMSR may be authorized by general licenses (GL) in the GMSR related to certain international organizations (IOs), nongovernmental organizations (NGOs), official business of the United States government (USG), or agricultural commodities, medicine, medical devices, replacement parts and components, or software updates for personal, non-commercial use (Ag-Med).  For more information on these GLs, please consult OFAC ‘s Supplemental Guidance for the Provision of Humanitarian Assistance and FAQs 1105, 1106, 1107, and 1108.

 

For information on transactions involving governing institutions in Afghanistan led by an individual or entity designated under the Global Terrorism Sanctions Regulations, the Foreign Terrorist Organizations Sanctions Regulations, or Executive Order 13224, please consult Afghanistan-related GL 20 and FAQ 993.

 

If individuals or entities, including IOs, NGOs, or financial institutions, have questions about engaging in or processing transactions related to these authorizations, they can contact the OFAC Compliance Hotline via email at OFAC_Feedback@treasury.gov.

 

https://home.treasury.gov/news/press-releases/jy1972 and https://ofac.treasury.gov/recent-actions/20231208 and https://ofac.treasury.gov/faqs/1145

 

*******

 

December 11, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two former Afghan government officials — Mir Rahman Rahmani (M. Rahmani) and his son, Ajmal Rahmani (A. Rahmani), collectively known as “the Rahmanis” — for their extensive roles in transnational corruption, as well as 44 associated entities. These individuals and entities are designated pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world. Through their Afghan companies, the Rahmanis perpetrated a complex procurement corruption scheme resulting in the misappropriation of millions of dollars from U.S. Government-funded contracts that supported Afghan security forces.

 

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

 

  • Rahmani, Ajmal Of Greece, United Arab Emirates, Afghanistan, Hungary, Belgium, Cyprus Saint Kitts and Nevis; and
  • Rahmani, Mir Rahman of Afghanistan, Cyprus, and Saint Kitts and Nevis.

 

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

 

  • Alphaone Pharmaceutical B.V., of The Netherlands;
  • Ascent Holdings Limited of the United Arab Emirates;
  • Buoyant Holdings Limited of Cyprus;
  • C.H. Dream Creators Holdings LTD of Cyprus;
  • Fidelis Logistic And Supply Services of Afghanistan;
  • Lego Investments Eood of Bulgaria;
  • NAI Energy Europe GMBH & CO. KG of Germany;
  • NAI Energy Europe Verwaltungs GMBH of Germany;
  • NAI Europe Energy GMBH & CO. KG of Germany;
  • NAI Logistics B.V. of the United Arab Emirates and The Netherlands;
  • NAI Logistics Limited of Cyprus;
  • NAI Management GMBH of Germany;
  • Ocean Estate Company Limited of the United Arab Emirates;
  • Ocean Estate GMBH, of Austria;
  • Ocean Europe Cy Limited of Cyprus;
  • Ocean Properties GMBH of Austria;
  • Orbit International FZE of the United Arab Emirates;
  • Ozean Baustoffe GMBH & CO. KG of Germany;
  • Ozean Development Real Estate GMBH & CO. KG of Germany;
  • Ozean Group GMBH of Germany;
  • Ozean Horizont Baumaschinen & Bauequipment GMBH & CO. KG of Germany;
  • Ozean Horizont Bauwerke GMBH of Germany;
  • Ozean Horizont Erdarbeiten GMBH & CO. KG of Germany;
  • Ozean Horizont Objektplanung GMBH & CO. KG of Germany;
  • Ozean Horizont Projektentwicklungs GMBH & CO. KG of Germany;
  • Ozean Horizont Spezialtiefbau GMBH & CO. KG of Germany;
  • Ozean Immobilien Management GMBH & CO. KG of Germany;
  • Ozean Immobilien Projektentwicklung GMBH & CO. KG of Germany;
  • Ozean Immobilien Projektentwicklung Verwaltungs – GMBH of Germany;
  • Ozean Real Estate GMBH & CO. KG of Germany;
  • Pyramaxia Immoprojekt GMBH & CO. KG of Germany;
  • Pyramaxia Limited of Cyprus;
  • Pyramaxia Real Estate Development GMBH & CO. KG of Germany;
  • Pyramaxia Real Estate GMBH & CO. KG of Germany;
  • Rahmani Group International JLT of the United Arab Emirates;
  • RG Group FZE of the United Arab Emirates;
  • RG Holdings LTD of Cyprus;
  • RG Immoprojekt GMBH & CO. KG of Germany;
  • RG Real Estate Development GMBH & CO. KG of Germany;
  • RG Real Estate GMBH & CO. KG of Germany;
  • Riseonic Holdings LTD of Cyprus; Secure Movement Logistics Services of Afghanistan;
  • The Fern Limited of the United Arab Emirates; and
  • ZEM Holdings LTD of Cyprus.

 

https://home.treasury.gov/news/press-releases/jy1973 and https://ofac.treasury.gov/recent-actions/20231211

 

*******

 

December 12, 2023: G7 Leaders reaffirmed their support for an independent, democratic Ukraine within its internationally recognized borders. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is implementing the commitments made by G7 Leaders by taking action against third-country actors who materially support Russia’s war, targeting Russian military procurement networks and those who help Russia acquire machine tools, equipment, and key inputs; and further curtailing Russia’s use of the international financial system to further its war in Ukraine. OFAC sanctioned over 150 individuals and entities supplying Russia’s Military Industrial base. Please see the list of sanctioned individuals and entities via the link below.

 

Concurrently, the Department of State is imposing sanctions on over 100 entities and individuals, including those engaged in sanctions evasion in numerous third countries, complicit in furthering Russia’s ability to wage its war against Ukraine and responsible for bolstering Russia’s future energy production and export capacity.

 

Russia Related General License 79:

 

All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind-down of any transaction involving one or more of the following blocked entities are authorized through 12:01 a.m. Eastern daylight time, March 11, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR):

(1) Limited Liability Company Kyiv Square;

(2) Highland Gold Mining Limited;

(3) Limited Liability Company Kismet Capital Group; or

(4) Any entity in which one or more of the above persons own, directly or indirectly,  individually or in the aggregate, a 50 percent or greater interest.

 

Russia Related General License 80:

 

All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the divestment or transfer, or the facilitation of the divestment or transfer, of debt or equity of Highland Gold Mining Limited (Highland Gold), or any entity in which Highland Gold owns, directly or indirectly, a 50 percent or greater interest, purchased prior to December 12, 2023 (“Covered Debt or Equity”), to a non-U.S. person are authorized through 12:01 a.m. eastern daylight time, March 11, 2024.

 

All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to facilitating, clearing, and settling trades of Covered Debt or Equity that were placed prior to 4:00 p.m. Eastern Standard Time, December 12, 2023, are authorized through 12:01 a.m. Eastern Daylight Time, March 11, 2024.

 

All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the wind-down of derivative contracts entered into prior to 4:00 p.m. Eastern Standard Time, December 12, 2023, that

  • include a blocked person described in this general license as a counterparty or
  • are linked to Covered Debt or Equity are authorized through 12:01 a.m. Eastern daylight time, March 11, 2024, provided that any payments to a blocked person are made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).

 

 

https://home.treasury.gov/news/press-releases/jy1978 and https://ofac.treasury.gov/recent-actions/20231212 and https://ofac.treasury.gov/media/932396/download?inline and https://ofac.treasury.gov/media/932401/download?inline

 

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December 13, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed a fourth round of sanctions on Hamas since the October 7 terrorist attack on Israel. This action targets key officials who perpetuate Hamas’s violent agenda by representing the group’s interests abroad and managing its finances. OFAC closely coordinated with the United Kingdom to concurrently designate several key Hamas officials.

 

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

 

  • Al-Din, Haroun Mansour Yaqoub Nasser of Turkey and Palestine;
  • Al-Wardian, Hassan of Palestine;
  • Awadallah, Nizar Mohammed of Palestine;
  • Baraka, Ali Abed Al Rahman of Lebanon;
  • Barhum, Ismail Musa Ahmad of Palestine;
  • Kaya, Mehmet of Turkey;
  • Obeid, Maher Rebhi of Lebanon and Jordan; and
  • Yaghmour, Jihad Muhammad Shaker of Turkey and Israel.

 

https://home.treasury.gov/news/press-releases/jy1981 and https://ofac.treasury.gov/recent-actions/20231213

 

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December 14, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the United Kingdom are jointly taking action against Iran’s Islamic Revolutionary Guard Corps – Qods Force (IRGC-QF), Hamas, and Palestinian Islamic Jihad (PIJ). The U.K. is taking its first action pursuant to new Iran-related authorities, targeting eight actors, including the head of the IRGC-QF and individuals linked to Iran’s support for Hamas and PIJ. The U.K.’s new sanctions authority has been developed to respond to unprecedented threats from the Iranian regime, including efforts to undermine peace and security across the Middle East and plots to kill individuals on U.K. soil. OFAC is designating an IRGC-QF official involved in support of Hamas.

 

Additionally, OFAC sanctioned the Malas Mañas transnational criminal organization (TCO), a human smuggling and narcotics trafficking organization based in Sonora, Mexico, along with two individuals in its support network.

 

Human smuggling organizations like Malas Mañas value profit over human life, endanger the lives of migrants, and undermine the U.S. asylum system.  In addition to human smuggling, Malas Mañas traffics deadly drugs, including illicit fentanyl and methamphetamine, thereby threatening the national security of the United States and Mexico.

 

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

 

  • Roman Flores, Luis Eduardo of Mexico;
  • Salazar Ballesteros, Joel Alexandro of Mexico; and
  • Zaree, Majid of Iran.

 

The following entity has been added to OFAC’s SDN List:

 

  • Malas Manas of Mexico.

 

https://home.treasury.gov/news/press-releases/jy1987 and https://ofac.treasury.gov/recent-actions/20231214

 

*******

 

December 19, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on 10 entities and four individuals based in Iran, Malaysia, Hong Kong, and Indonesia supporting Iran’s unmanned aerial vehicle (UAV) production. This network, led by Iran-based Hossein Hatefi Ardakani, has facilitated the procurement of U.S.- and foreign-origin components worth hundreds of thousands of dollars for the Islamic Revolutionary Guard Corps Aerospace Force Self Sufficiency Jihad Organization (IRGC ASF SSJO) and its UAV program.

 

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

 

  • Ardakani, Gholamreza Ebrahimzadeh of Iran;
  • Ardakani, Hossein Hatefi of Iran;
  • Dewanto, Agung Surya of Indonesia; and
  • Mohammadabadi, Mehdi Dehghani of Iran.

 

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

 

  • Arta Wave SDN BHD of Malaysia;
  • Basamad Electronic Pouya Engineering Limited Liability Company of Iran;
  • Dirac Technology HK Limited of China;
  • Integrated Scientific Microwave Technology SDN BHD of Malaysia;
  • Kavan Electronics Behrad Limited Liability Company of Iran;
  • Nava Hobbies SDN BHD of Malaysia;
  • Saman Industrial Group of Iran;
  • Skyline Advanced Tecnologies SDN BHD of Malaysia;
  • Surabaya Hobby CV of Indonesia; and
  • Teyf Tadbir Arya Engineering Company of Iran.

 

https://home.treasury.gov/news/press-releases/jy2004 and https://ofac.treasury.gov/recent-actions/20231219

 

*******

 

December 20, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) continued to tighten enforcement of the price cap on Russian oil by building on previous actions targeting shipowners and vessels implicated in transporting Russian crude oil above the cap. In line with actions previously taken by partners in the Price Cap Coalition, OFAC designated a Government of Russia-owned ship manager as well as several obscure oil traders who have emerged as frequent participants in the seaborne transportation of Russian-origin oil following the imposition of the price cap.

 

OFAC has also, in coordination with the Price Cap Coalition, updated the Guidance on Implementation of the Price Cap Policy for Crude Oil and Petroleum Products of Russian Federation Origin. These actions are in line with commitments made by Leaders of the Group of Seven (G7) on December 6, 2023 to tighten compliance and enforcement of the price cap policy on Russian oil, including by imposing sanctions on those engaged in deceptive practices and by updating compliance rules and regulations as necessary.

 

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has published Updated Guidance on the Implementation of the Price Cap Policy for Crude Oil and Petroleum Products of Russian Federation Origin. Additionally, OFAC is issuing Russia-related General License 81, “Authorizing Limited Safety and Environmental Transactions Involving Certain Persons or Vessels Blocked on December 20, 2023,” and Russia-related General License 82, “Authorizing the Wind Down of Transactions Involving SUN Ship Management D Ltd.”

 

Russia Related General License 81:

 

All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to one of the following activities involving the blocked persons described below are authorized through 12:01 a.m. eastern daylight time, March 19, 2024, provided that any payment to a blocked person must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations (RuHSR):

(1) The safe docking and anchoring in the port of any vessels in which any person or entity listed below in this general license has a property interest (“blocked vessels”);

(2) The preservation of the health or safety of the crew of any of the blocked vessels; or

(3) Emergency repairs of any of the blocked vessels or environmental mitigation or protection activities relating to any of the blocked vessels.

 

The authorization above applies to the following blocked persons listed on the Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List and any entity in which any of the following persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest:  (1) SUN Ship Management D Ltd;

(2) Covart Energy Limited;

(3) Voliton DMCC; and

(4) Bellatrix Energy Limited.

 

Russia Related General License 82:

 

All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind-down of any transaction involving SUN Ship Management D Ltd (SUN Ship), or any entity in which SUN Ship owns, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern daylight time, March 19, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).

 

Additionally, OFAC has updated its Specially Designated Nationals and Blocked Persons List. The following entities have been added to OFAC’s SDN List:

 

  • Bellatrix Energy Limited of China;
  • Covart Energy Limited of China and Russia;
  • Sun Ship Management D LTD of the United Arab Emirates; and
  • Voliton Dmcc of the United Arab Emirates.

 

The following vessel has been added to OFAC’s SDN List:

 

  • SANAR 15, Vessel Registration Identification IMO 9777670.

 

https://home.treasury.gov/news/press-releases/jy2008 and https://ofac.treasury.gov/media/931036/download?inline and https://ofac.treasury.gov/media/932461/download?inline and https://ofac.treasury.gov/media/932466/download?inline and https://ofac.treasury.gov/recent-actions/20231220

 

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December 22, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued a Determination Pursuant to Section 11(a)(ii) of E.O. 14024, as amended by the E.O. of December 22, 2023, and a Determination Pursuant to Section 1(a)(i)(B) of E.O. 14068, as amended by the E.O of December 22, 2023. Additionally, OFAC amended the Determination issued on June 28, 2022, “Prohibitions Related to Imports of Gold of Russian Federation Origin.”

OFAC is also issued Russia-related General License 83, “Authorizing Certain Transactions Related to Imports of Certain Categories of Fish, Seafood, and Preparations Thereof Prohibited by Executive Order 14068,” General License 84, “Authorizing Transactions Related to Closing a Correspondent or Payable-Through Account,” and General License 85, “Authorizing the Wind Down of Transactions and the Closure of Accounts Involving Expobank Joint Stock Company.”

 

Russia Related General License 83:

 

All transactions prohibited by the determination of December 22, 2023 made pursuant to section 1(a)(i)(B) of Executive Order (E.O.) 14068, as amended by E.O. of December 22, 2023 (“Prohibitions Related to Imports of Certain Categories of Fish, Seafood, and Preparations Thereof”), that are ordinarily incident and necessary to the importation into the United States of seafood derivative products, pursuant to written contracts or written agreements entered into prior to December 22, 2023 are authorized through 12:01 a.m. eastern standard time, February 21, 2024.

 

This general license does not authorize any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR, unless separately authorized.

 

Russia Related General License 84:

 

U.S. financial institutions that maintain correspondent accounts or payable-through accounts for any foreign financial institution subject to the correspondent account or payable-through account (CAPTA) prohibition of section 11(b)(i) of Executive Order (E.O.) 14024, as amended, are authorized, during the 10-day period beginning on the effective date of the imposition of the prohibition, to engage in the following transactions:

(1) Processing only those transactions through the account, or permitting the foreign financial institution to execute only those transactions through the account for the purpose of, and necessary for, closing the account; and

(2) Transferring the funds remaining in the correspondent account or the payable-through account to an account of the foreign financial institution located outside of the United States and closing the correspondent account or the payable-through account.

 

This general license does not authorize any transactions otherwise prohibited by the RuHSR, including transactions involving any person blocked pursuant to the RuHSR, unless separately authorized.

 

Russia Related General License 85:

 

All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind-down of any transaction involving Expobank Joint Stock Company (Expobank), or any entity in which Expobank owns, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern daylight time, March 21, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).

 

All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to

(i) the closing of an account of a person, wherever located, who is not a blocked person (“the account holder”), held at Expobank, or any financial institution in which Expobank owns, directly or indirectly, a 50 percent or greater interest, and

(ii) the unblocking and lump sum transfer of all remaining funds and other assets in the account to the account holder, including to an account of the account holder held at a non-blocked financial institution, are authorized through 12:01 a.m. Eastern daylight time, March 21, 2024.

 

In addition, OFAC has issued 12 new, Russia-related Frequently Asked Questions (FAQs 1146-1157) and amending several Russia-related Frequently Asked Questions (FAQs 973, 1070, and 1126). See the links below for the new and revised FAQs.

 

Furthermore, OFAC published a Compliance Advisory to provide guidance to foreign financial institutions on the amendments to E.O. 14024, including practical guidance on how to identify sanctions risks and implement corresponding controls.

 

https://ofac.treasury.gov/media/932446/download?inline and https://ofac.treasury.gov/media/932451/download?inline and https://ofac.treasury.gov/media/923986/download?inline and https://ofac.treasury.gov/media/932471/download?inline and https://ofac.treasury.gov/media/932476/download?inline and

https://ofac.treasury.gov/faqs/added/2023-12-22 and

https://ofac.treasury.gov/faqs/updated/2023-12-22 and https://ofac.treasury.gov/media/932436/download?inline

 

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December 28, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated one individual and three entities responsible for facilitating the flow of Iranian financial assistance to Houthi forces and their destabilizing activities. Among those designated is the head of the Currency Exchangers Association in Sana’a, and three exchange houses in Yemen and Türkiye. These persons have facilitated the transfer of millions of dollars to the Houthis at the direction of U.S.-designated Sa’id al-Jamal, who is affiliated with Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF).

 

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

 

  • Al-Hadha, Nabil Ali Ahmed of Yemen.

 

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

 

  • Al Aman Kargo Ithalat Ihracat Ve Nakliyat Limited Sirketi of Turkey;
  • Al Rawda Exchange And Money Transfers Company of Yemen; and
  • Nabco Money Exchange And Remittance Co. of Yemen.

 

https://home.treasury.gov/news/press-releases/jy2014 and https://ofac.treasury.gov/recent-actions/20231228

 

 

DECEMBER 2023 EXPORT CONTROL REGULATIONS UPDATES Read More »

JULY 2023 EXPORT CONTROL REGULATIONS UPDATES

This newsletter is a listing of the latest changes in export control regulations through July 31, 2023.  The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

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

 

REGULATORY UPDATES

 

The President

 

President Biden Delegates Authority to Secretary of State to Direct Drawdown of $500 Million in Defense Articles to Support Ukraine

 

July 6, 2023: 88 FR 43049: President Biden, under section 621 of the Foreign Assistance Act of 1961 (FAA), delegated to the Secretary of State the authority under section 506(a)(1) of the FAA to direct the drawdown of up to $500 million in defense articles and services of the Department of Defense, and military education and training, to provide assistance to Ukraine and to make the determinations required under such section to direct such a drawdown.

 

https://www.federalregister.gov/documents/2023/07/06/2023-14435/delegation-of-authority-under-section-506a1-of-the-foreign-assistance-act-of-1961

 

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President Biden Continues the National Emergency with Respect to Hong Kong

 

July 12, 2023: 88 FR 44669: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency declared in Executive Order 13936 of July 14, 2020, which declared a national emergency with respect to Hong Kong.

 

https://www.federalregister.gov/documents/2023/07/12/2023-14973/continuation-of-the-national-emergency-with-respect-to-hong-kong

 

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President Biden Delegates Authority to Secretary of State to Direct Drawdown of $922 Million in Defense Articles to Support Ukraine

July 13, 2023: 88 FR 44671: President Biden, under section 621 of the Foreign Assistance Act of 1961 (FAA), delegated to the Secretary of State:

(1) the authority under section 506(a)(1) of the FAA to direct the drawdown of up to $800 million in defense articles and services of the Department of Defense, and military education and training, to provide assistance to Ukraine and to make the determinations required under such section to direct such a drawdown; and

(2) the authority under section 614(a)(1) of the FAA to determine whether it is important to the security interests of the United States to furnish up to $122 million in assistance to Ukraine without regard to any provision of law within the purview of section 614(a)(1) of the FAA.

https://www.federalregister.gov/documents/2023/07/13/2023-15010/delegation-of-authority-under-section-506a1-and-section-614a1-of-the-foreign-assistance-act-of-1961

*******

 

President Biden Continues the National Emergency with Respect to Hostage-Taking and Wrongful Detention

July 14, 2023: 88 FR 45327: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for 1 year the national emergency declared in Executive Order 14078, of July 19, 2022, with respect to hostage-taking and the wrongful detention of United States nationals abroad.

https://www.federalregister.gov/documents/2023/07/14/2023-15138/continuation-of-the-national-emergency-with-respect-to-hostage-taking-and-the-wrongful-detention-of

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President Biden Continues the National Emergency with Respect to Mali

 

July 21, 2023: 88 FR 48027: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency declared in Executive Order 139882 of July 26, 2019, which declared a national emergency with respect to Mali.

 

https://www.federalregister.gov/documents/2023/07/25/2023-15896/continuation-of-the-national-emergency-with-respect-to-mali

 

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President Biden Continues the National Emergency with Respect to Lebanon

 

July 25, 2023: 88 FR 48025: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency declared in Executive Order 13441 of August 1, 2007, which declared a national emergency with respect to Lebanon.

 

https://www.federalregister.gov/documents/2023/07/25/2023-15889/continuation-of-the-national-emergency-with-respect-to-lebanon

 

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

 

DDTC Name And Address Changes Posted To Website

 

July 18 through 26, 2023: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at    

https://www.pmddtc.state.gov/ddtc_public?id=ddtc_kb_article_page&sys_id=bd72ca0adbf8d30044f9ff621f961981:

  • Change in Name and Address from General Electric International, Inc. (Malaysia), MAS Eng Ops Cntr, Complex A, AERO Bldg, Sultan Abdul Aziz Shah, Subang 47200, Malaysia, to GE On Wing Support (Malaysia) Sdn Bhd at Cmplx A-AA MAS Engineering Ops Ctr, Sultan Abdul Aziz Shah Apt, Subang Jaya, Malaysia, and all locations in Malaysia, due to reorganization.
  • Change in Name from L3 Technologies Australia Group Pty Ltd. to L3Harris Technologies Australia Pty Ltd. due to merger.
  • Change in Name for Philotech Systementwicklung und Software GmbH to Bertrandt Technology Germany GmbH, and all locations in Germany due to corporate rebranding.
  • Change in Name and Address from General Electric International, Inc. (Germany), Maria-Theresia, Strasse 35, Muenchen, 85232, Germany, to GE Aviation Deutschland GmbH at Bleichstrasse 64-66, Frankfurt Am Main, Germany, and all locations in Germany, due to reorganization.
  • Change in Name and Address from General Electric International, Inc. (South Korea), 13F, GE Tower, 71-3 Cheongdam, Gangnamgu, Seoul, Republic of Korea, and from POBA Gangnam Tower, 343 Hakdongro, Gangnam-gu, Seoul 135-820, Republic of Korea, to GE Aviation Korea, Ltd. at 25/F, Gangnam Finance Center Building, 152, Teheran-ro, Gangnam-gu, Seoul, 06236, Republic of Korea, and all locations in the Republic of Korea, due to reorganization.
  • Change in Name and Address from General Elektrik Ticaret ve Servis A.S. (Turkey), Dumlupinar Bulvari 164 501, Kentpark Ofis Bloklari, Cankaya Ankara, Turkey, to GE Marmara Technology Center Muhendislik Hizmetleri Limited Sirketi, at Esentepe Mah. Harman1 Sk.Nida Kule, Sisli, Istanbul, Turkey, and all locations in Turkey, due to reorganization.
  • Change in Name from Philotech Iberica S.L. (Spain), to Bertrandt Technology Spain S.L, due to corporate rebranding.
  • Change in Name and Address from General Electric International, Inc. (UK), 31 Coull Gardens, Aberdeen AB15 8TQ, United Kingdom, and from 635 Sipson Road, London UB70JE, United Kingdom, to GE Aviation Systems Limited at Cheltenham Rd, Bishops Cleeve, Cheltenham, Gloucestershire GL52 8SF, United Kingdom, and all locations in the United Kingdom, due to reorganization.
  • Change in Name and Address from General Electric International, Inc. (Singapore), 11 North Buona Vista Drive #09-07, The Metropolis, Singapore 138589, Singapore, and from 240 Tanjong Pagar Road, GE Tower #04-00, Singapore 088540, Singapore, to GE Aviation International Services Pte. Ltd. at 11 North Buona Vista Drive #09-07, The Metropolis, Singapore 138489, Singapore, and all locations in Singapore, due to reorganization.
  • Change in Address for NTK International Corporation from NTK Building, 2-5- 11, Nishi-Shinbashi, Minato-ku, Tokyo 105-0003 Japan, to Higashi-Nihonbashi 1-chome Bldg, 3F 1-4-6 HigashiNihonbashi, Chuo-ku, Tokyo 103-0004 Japan.
  • Change in Name from General Electric International, Inc. (Japan) to GE Aviation Distribution Japan Co., Ltd. due to reorganization.
  • Change in Name from Stelia Aerospace Composites SAS to Airbus Atlantic Composites SAS due to acquisition.
  • Change in Address from Ametrine Technologies Ltd., Ein-Hahoresh M.P., Hefer 38980, Israel to Kibbutz Maabarot, M.P Hefer, 4023000, Israel.
  • Change in Name and Address from General Electric International, Inc. (Romania), Strada Barbu Vacarescu, nr. 301-311, Cladirea Lakeview, Etaj 3, Sectorul 2, Bucuresti, Romania, to Unison Engine Components – Bucharest S.A. at 244 C luliu Maniu Boulevard, 6th District, Bucuresti 77826, Romania, due to reorganization.
  • Change in Name from Leonardo US Aircraft, Inc. to Leonardo US Aircraft, LLC due to reorganization as a Limited Liability Company.
  • Change in Name from Philotech France SAS (France) to Bertrandt Technology France SAS due to corporate rebranding.
  • Change in Name from Raytheon Technologies Corporation to RTX Corporation due to corporate rebranding.
  • Change in Name from Fenice Poland Sp. z.o.o. to Edison Next Poland sp. z.o.o. due to acquisition.
  • Change in Name from Mitsubishi Electric TOKKI Systems Corporation to Mitsubishi Electric Defense and Space Technologies Corporation due to corporate rebranding.
  • Change in Address from DRS Signal Solutions, One Milestone Center Court, Germantown, Maryland 20876 to 4910 Executive Court South, Frederick, Maryland, 21703.

 

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The U.S. Department of State Outlined AUKUS Trade Authorization Mechanism

 

July 10, 2023: The U.S. Department of State has posted a Fact Sheet outlining the AUKUS Trade Authorization Mechanism (ATAM). According to the Fact Sheet, the mechanism is designed to facilitate trade of U.S. defense articles and defense services between the United States, the United Kingdom, and Australia in support of AUKUS programs for both Pillar I (providing Australia with a conventionally armed, nuclear-powered submarine capability) and Pillar II (advanced capabilities). This is an interim measure to streamline defense trade of U.S. origin items while the Biden Administration pursues more comprehensive legislative changes. This approach was adopted to address concerns regarding how the speed and efficiency of the Foreign Military Sales (FMS) and Direct Commercial Sales (DCS) processes would be inadequate for the expected increase in the volume of AUKUS-related defense trade. The implementation of the ATAM involves the following steps:

  • Identify the scope of AUKUS programs. This will optimize operations and compliance, as both government and industry will have a clear understanding of which uses/programs are authorized under this Mechanism.
  • Identify what technologies are not eligible under this Mechanism.
  • Identify which communities in each country would be approved for access to the technology, which includes an obligation to record what is transferred and to secure and protect the technology. This will help reduce the likelihood of unauthorized diversion of sensitive defense technologies and, if necessary, help to investigate any potential diversion.

Next, the utilization of ATAM will proceed as follows:

  • The exporter must check proposed transfers under AUKUS against these three basic and transparent criteria (programs, technologies, and authorized communities) that Defense and State would develop, and review with partners.
  • Transfers beyond the United Kingdom or Australia, or transfer to a non-AUKUS program or a community not eligible to receive it, would require standard non-ATAM authorization.
  • Based on legislation, the U.S. government would need to notify shipments under this authorization exceeding $100 million at least 15 days prior to the shipment. Existing systems will be utilized to conduct congressional notification.

The ATAM will allow DCS transfers of some items typically transferred only under FMS. According to the Fact Sheet, ATAM offers an immediate solution to expedite and secure defense transfers of U.S. defense items for AUKUS projects, leveraging existing authorities (ITAR § 126.4 of the ITAR) to allow seamless and speedy defense trade.

Ensuring swift and secure defense trade under AUKUS - United States Department of State

 

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The U.S. Department of State Posted Myths and Facts About U.S. Defense Export Controls

 

July 10, 2023: The U.S. Department of State has posted a Fact Sheet entitled Myths and Facts About U.S. Defense Export Controls. This posting refutes such "myths" as whether obtaining an export license for Direct Commercial Sales takes too long under the ITAR and whether the ITAR unnecessarily prevents U.S. companies from building munitions production facilities abroad.

Myths and Facts about U.S. Defense Export Controls - United States Department of State

 

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Department of Defense

 

DSCA Notifies Congress Of Potential FMS Sale To France

 

July 7, 2023: The State Department has made a determination approving a possible Foreign Military Sale to the Government of France of AGM-114R2 Hellfire Missiles and related equipment for an estimated cost of $203 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale. The Government of France has requested to buy up to one thousand five hundred fifteen (1,515) AGM-114R2 Hellfire Missiles. Also included are technical assistance; non-standard books; publications; other Hellfire publications; integration support; and other related elements of logistical and program support. The estimated total cost is $203 million.

 

This proposed sale will support the foreign policy and national security objectives of the United States by helping to improve the security of a NATO Ally that is an important force for political stability and economic progress in Europe. The proposed sale will improve France’s capability to meet current and future threats by building its long-term defense capacity to defend its sovereignty and territorial integrity in order to meet its national defense requirements. France will have no difficulty absorbing this equipment into its armed forces. The proposed sale of this equipment and support will not alter the basic military balance in the region.

 

The prime contractor will be Lockheed Martin Corporation, Orlando, FL. There are no known offset agreements in connection with this potential sale. Implementation of this proposed sale will not require the assignment of U.S. Government or contractor representatives to France. There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.

 

https://www.dsca.mil/sites/default/files/mas/Press%20Release%20-%20France%2023-43%20CN.pdf

 

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DSCA Notifies Congress Of Potential FMS Sale To Sweden

 

July 7, 2023: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Sweden of Advanced Medium Range Air-to-Air Missiles (AMRAAM) and related equipment for an estimated cost of $605 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.

 

The Government of Sweden has requested to buy up to two hundred fifty (250) AIM-120C-8 Advanced Medium Range Air-to-Air Missiles (AMRAAM); and up to six (6) AMRAAM C-8 Guidance Sections. Also included are spare AIM-120 control sections and containers; AMRAAM Test Set (ATS) telemetry kits; encryption devices; munitions support and support equipment; classified software delivery and support; spare parts, consumables, and accessories; repair and return support; transportation support; classified publications and technical documentation; studies and surveys; U.S. Government and contractor technical, engineering and logistics support services; and other related elements of logistical and program support. The estimated total cost is $605 million.

 

This proposed sale will support the foreign policy goals and national security objectives of the United States by improving the security of a partner country that is a force for political stability and economic progress in Europe. The proposed sale will improve Sweden’s capability to meet and deter current and future threats in the region by ensuring Sweden has modern, capable air-to-air munitions. This sale will further advance the already high level of Swedish Air Force interoperability with U.S. joint forces and other regional and NATO forces. Sweden will have no difficulty absorbing these articles and services into its armed forces.

 

The proposed sale of this equipment and support will not alter the basic military balance in the region.

The principal contractor will be Raytheon Missiles and Defense, Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale. Implementation of this proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to Sweden. There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.

 

Sweden – AIM-120C-8 Advanced Medium-Range Air-to-Air Missile (AMRAAM) | Defense Security Cooperation Agency (dsca.mil)

 

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DSCA Notifies Congress Of Potential FMS Sale To Germany

 

July 19, 2023: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Germany of AIM-120C-8 Advanced Medium-Range Air-to-Air Missiles (AMRAAM) and related equipment for an estimated cost of $2.90 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.

The Government of Germany has requested to buy up to nine hundred sixty-nine (969) AIM-120C-8 Advanced Medium Range Air-to-Air Missiles (AMRAAM); and up to twelve (12) AMRAAM C8 Guidance Sections. Also included are AIM-120 Captive Air Training Missiles (CATM); telemetry kit and control section spares and containers; KGV-135A Communications Security (COMSEC) devices; Common Munitions Built-in-Test Reprogramming Equipment (CMBRE); ADU 891 Computer Test Set Adapter Groups; munitions support and support equipment; classified software delivery and support; spare parts, consumables, accessories, and repair and return support; transportation support; classified publications and technical documentation; studies and surveys; U.S. Government and contractor engineering, technical and logistics support services; and other related elements of logistical and program support. The estimated total cost is $2.90 billion.

 

https://www.dsca.mil/press-media/major-arms-sales/germany-aim-120c-8-advanced-medium-range-air-air-missiles-amraam

 

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DSCA Notifies Congress Of Potential FMS Sale To Romania

 

July 27, 2023: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Romania of sixteen (16) Assault Amphibious Vehicles (AAVs) and related equipment for an estimated cost of $120.5 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.

 

The Government of Romania has requested to buy sixteen (16) Assault Amphibious Vehicles (AAVs), Personnel Variant (AAVP-7A1); three (3) Assault Amphibious Vehicles, Command Variant (AAVC-7Al); two (2) Assault Amphibious Vehicles, Recovery Variant (AAVR-7Al); sixteen (16) 50 Cal Machine Guns (Heavy Barrel); and five (5) 7.62 mm M240B Machine Guns. Also included are MK-19 Grenade Launchers; M36E T1 Thermal Sighting Systems (TSS); supply support (spare parts); support equipment (including special mission kits/Enhanced Applique Kits (EAAK)); training, unclassified technical manuals, technical data package, engineering and technical support and assistance (including Contractor Engineering Technical Services (CETS)); and other related elements of program and logistics support. The total estimated program cost is $120.5 million.

 

Romania – Assault Amphibious Vehicles | Defense Security Cooperation Agency (dsca.mil)

 

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DOD/DSCA Updates Security Assistance Management Manual and Policy Memos

 

July 12, 2023: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) has made the following updates to its Security Assistance Management Manual (SAMM) and Policy Memorandums:

Program code "GK" is assigned to track Fiscal Year (FY) 2021/2022 funds for International Narcotics Control and Law Enforcement (INCLE) appropriated under the Department of State, Foreign Operations, and Related Program Appropriations Act (Division K, P.L. 116-260). INCLE activities are authorized under section 481 of the Foreign Assistance Act (FAA), as amended (22 U.S.C. Section 2291).

This memo adds code GK to:

 

Effective immediately, this memorandum updates an initial tranche of terms and definitions in the DSCA Security Assistance Management Manual (SAMM) glossary for an effective understanding of security cooperation language throughout the community.

https://samm.dsca.mil/policy-memoranda/dsca-23-31 and https://samm.dsca.mil/policy-memoranda/dsca-23-47

 

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U.S. Department of Defense Enters Agreement to Expand Capabilities for Domestic Graphite Mining and Processing for Large-Capacity Batteries

 

July 17, 2023: The U.S. Department of Defense's Office of the Assistant Secretary of Defense for Industrial Base Policy, through its Manufacturing Capability Expansion and Investment Prioritization office, has entered an agreement with Graphite One (Alaska) to secure a reliable, sustainable supply of graphite materials within the U.S. to be used in the production of large-capacity batteries. The $37.5 million agreement, entered into under Defense Production Act (DPA) Title III authorities and using funds appropriated by the Inflation Reduction Act, will aid Graphite One (Alaska) in developing a domestic advanced graphite supply chain solution anchored by the Company's Graphite Creek resource. Graphite One's supply chain strategy includes mining from Graphite Creek and processing the graphite ore through an advanced material and battery anode manufacturing plant expected to be sited in Washington State. Graphite One's strategy also includes plans for a recycling facility to reclaim graphite and other battery materials, to be co-located at the advanced materials manufacturing site; the third link in Graphite One's circular economy strategy. DPA Title III funding will allow Graphite One to fast-track their feasibility study by a full year, informing and expediting decisions to move the project further through its plans for a complete U.S.-based graphite anode supply chain.

DOD Enters Agreement to Expand Capabilities for Domestic Graphite Mining and Processing for Large-Capacity Batteries > U.S. Department of Defense > Release

 

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U.S. Department of Commerce

 

U.S. Department of Commerce's Bureau of Industry and Security (BIS) Amended the Chemical Weapons Convention Regulations

 

July 3, 2023: 88 Fed. Reg. 42615: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) amended the Chemical Weapons Convention Regulations (CWCR) (15 CFR Part 713) to reduce the concentration threshold level above which mixtures containing a Schedule 2A chemical are subject to the declaration requirements that apply to Schedule 2A chemical production, processing, and consumption under the Chemical Weapons Convention (CWC). This final rule also amends the CWCR to reduce the concentration threshold level above which mixtures containing a Schedule 2A chemical are subject to the declaration and reporting requirements that apply to exports and imports of Schedule 2A chemicals under the CWC. These regulatory amendments bring the CWCR into further alignment with guidelines adopted by the Organization for the Prohibition of Chemical Weapons (OPCW) Conference of the States Parties (CSP), which established a low concentration limit for Schedule 2A chemicals.

 

Federal Register :: Chemical Weapons Convention Regulations: Reducing the Concentration Level Above Which Mixtures Containing Schedule 2A Chemicals Are Subject to Declaration and Reporting Requirements

 

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U.S. Department of Commerce's International Trade Administration Seeks Public Comments on the Modernization of Its Export Promotion Services and Assistance

 

July 7, 2023: 88 FR 43286: The U.S. Department of Commerce's International Trade Administration (ITA) includes the U.S. and Foreign Commercial Service (CS), which assists and advocates for U.S. businesses in international markets to foster U.S. economic prosperity. Utilizing its network of trade promotion and policy professionals located in 79 countries and 106 U.S. locations, CS promotes U.S. exports, especially among small and medium-sized enterprises; advances and protects U.S. commercial interests overseas; and attracts inward investment into the United States.

 

CS is seeking feedback from the general public – including businesses that are new to exporting or not currently exporting - on ways to modernize services for the 21st century. CS is reviewing its services to assess their effectiveness in meeting the needs of U.S. exporters and identify opportunities to innovate and enhance services offered, with the objective of driving U.S. innovation and global competitiveness by increasing U.S. exports and ensuring more U.S. regions benefit, as well as workers and businesses from underserved communities. Interested persons have until 5:00 PM ET on August 7, 2023, to submit their comments.

 

Federal Register :: Opportunity To Comment on the Modernization of the Export Promotion Services and Assistance Delivered by the U.S. and Foreign Commercial Service

 

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U.S. Department Of Commerce's Data Privacy Framework Program Launches New Website Enabling U.S. Companies to Participate in Cross-Border Data Transfers

 

July 20, 2023: The U.S. Department of Commerce has launched the Data Privacy Framework (DPF) program's website, enabling eligible U.S. companies to self-certify their participation in the EU-U.S. Data Privacy Framework (EU-U.S. DPF), facilitating cross-border transfers of personal data in compliance with EU law. The DPF program is particularly valuable for small- and medium-sized enterprises that can now access an affordable and streamlined mechanism for personal data transfers from the European Economic Area (comprised of EU countries along with Iceland, Liechtenstein, and Norway). Data flows between the United States and Europe more than anywhere else in the world, enabling the $7.1 trillion U.S.-EU economic relationship. To participate, companies must self-certify and publicly commit to comply with the EU-U.S. DPF Principles, which are enforceable under U.S. law. They can also self-certify their compliance with the UK Extension to the EU-U.S. DPF and/or the Swiss-U.S. DPF Principles, which will enable personal data transfers from those jurisdictions after they complete their legal processes and deem such transfers to have adequate protection. Eligible companies can now sign up for the EU-U.S. DPF at www.dataprivacyframework.gov. Companies that participate in the EU-U.S. Privacy Shield may begin relying immediately on the EU-U.S. DPF to receive personal data transfers from the European Union/European Economic Area but will need to self-certify to the EU-U.S. DPF by October 10.  Companies can now sign up for mechanisms to receive personal data from the United Kingdom and Switzerland.  However, they may not rely on these mechanisms to receive personal data until the anticipated recognition by the UK Government and the Swiss Government of the adequacy of those mechanisms enter into force. Organizations interested in self-certifying should review the DPF program requirements, which are available, along with other guidance materials, on the DPF program website.

https://cts.lmsslsecure.com/t/6340695/113404557/95192/31/

 

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U.S. Department of Commerce's Bureau of Industry and Security Posted Best Practices for License Applications for Medical-Related Items Destined for Russia, Belarus, and Occupied/Covered Regions of Ukraine

 

July 24, 2023: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has posted on its website "Best Practices" guidance for license applications for medical-related items destined for Russia, Belarus, and occupied/covered regions of Ukraine. Consistent with licensing policies set forth in Sections 746.5, 746.6, 746.8, and 746.10 of the Export Administration Regulations (15 CFR Parts 730-774, “EAR”), license applications for health and safety, medical, and humanitarian applications are generally reviewed on a case-by-case basis. This review policy reflects the U.S. Government’s position that the Russian and Belarusian people are not the target of export controls imposed on Russia in response to its invasion and continuing aggression in Ukraine, as well as on Belarus, which has substantially enabled Russia’s actions. However, the U.S. Government reviews all export license applications to evaluate whether approving the application would benefit the Russian or Belarusian government or defense sector, particularly with regard to the usefulness of the items for the treatment of battlefield casualties or the production of chemical and biological weapons and biotechnological (including biopharmaceutical) products. The guidance has sections on:

  • End-Use/User Statements
  • License Scope
  • Export Item Grouping
  • Direct Patient Care
  • HS Codes
  • Best Practices Checklist

https://www.bis.doc.gov/index.php/documents/product-guidance/3300-russia-medical-related-license-application-guidance-fpd-final-incorp-occ-and-3f-cmts-clean-071323/file

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

 

Reminder to file the 2023 Annual Report of Blocked Property

July 3, 2023: The U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) reminds industry that 31 C.F.R. § 501.603 of the Reporting, Procedures and Penalties Regulations (RPPR) requires holders of blocked property to provide OFAC with a comprehensive list of all blocked property held as of June 30 of the current year by September 30. Persons that do not hold blocked property as of June 30 do not need to file an Annual Report of Blocked Property (ARBP). Please note that the term blocked property only applies to property that is blocked pursuant to OFAC regulations. Property that was unblocked by an OFAC general or specific license or was previously blocked pursuant to a sanctions program that was terminated on or before June 30, 2023, is not considered blocked property and should not be reported in the ARBP. Similarly, a restricted account of a person ordinarily resident in Iran is not blocked and should not be reported to OFAC in the ARBP, unless there is an interest in the account of a person whose property and interests in property are blocked pursuant to an applicable sanctions authority.

Persons filing the 2023 ARBP are required to utilize spreadsheet form TD-F 90-22.50. Completed forms should be filed through the OFAC Reporting System (ORS) or sent to OFACreport@treasury.gov. Failure to submit a required ARBP by September 30 constitutes a violation of the RPPR.

For Additional guidance visit this link: https://ofac.treasury.gov/media/16451/download?inline and

https://ofac.treasury.gov/recent-actions/20230703

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OFAC to retire PIP, DEL, and SDALL.ZIP file formats of the sanctions list on or about August 15, 2023

 

July 6, 2023: OFAC announced it will retire the PIP, DEL, and SDALL.ZIP sanctions list file formats on or about August 15, 2023. OFAC will continue to offer for public download the XML, CSV, and FF file formats, the ZIP files SDN_XML and SDN_ Advanced, and PDF versions for OFAC’s sanctions list(s).

OFAC’s Sanctions List Search tool will not be affected by these changes, and users of the search tool will not experience any loss of service.

Members of the public can contact OFAC at OFAC@treasury.gov for questions or to provide feedback on the impact related to the removal of these file formats.

The full list of files to be retired are as follows:

  • SDALL.ZIP
  • SDN.DEL
  • ADD.DEL
  • ALT.DEL
  • SDN_COMMENTS.DEL
  • SDN.PIP
  • ADD.PIP
  • ALT.PIP
  • SDN_COMMENTS.PIP
  • CONS_PRIM.DEL
  • CONS_ADD.DEL
  • CONS_ALT.DEL
  • CONS_COMMENTS.DEL
  • CONS_PRIM.PIP
  • CONS_ADD.PIP
  • CONS_ALT.PIP
  • CONS_COMMENTS.PIP

Users may continue to access OFAC's sanctions list data formats - via the URLs provided below.  However, on or about August 15, 2023, the PIP, DEL, and SDALL.ZIP files listed above will be removed from the below pages and will no longer be available for download.

OFAC to retire PIP, DEL, and SDALL.ZIP file formats of the sanctions list on or about August 15, 2023 | Office of Foreign Assets Control (treasury.gov)

 

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OFAC Sanctions Impede Russian Access to Battlefield Supplies and Target Revenue Generators

 

July 20, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned nearly 120 individuals and entities in Russia, Kyrgyz Republic, and the United Arab Emirates pursuant to Executive Order 14024 to further implement the commitments that G7 Leaders made on February 24, 2023 and May 19, 2023. The designations announced by OFAC and the Department of State take measures to inhibit Russia’s access to products that support its military and war efforts; reduce Russia’s revenue from the metals and mining sector; undermine its future energy capabilities; degrade Russia’s access to the international financial system; and starve Russia of G7-produced technology needed for its technology, aerospace, and defense sectors. In a May 19, 2023, Supplemental Alert, the Treasury’s Financial Crimes Enforcement Network (FinCEN) and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) identified certain high-priority items, primarily based on the Harmonized System (HS) code classification of components from Russian weapons systems recovered on the battlefield in Ukraine, to assist financial institutions in identifying suspicious transactions relating to possible export control evasion. Items described by these HS codes have been found in multiple Russian weapons systems used against Ukraine, including the Kalibr cruise missile, the Kh-101 cruise missile, and the Orlan-10 UAV.

Many of the entities designated by OFAC have transferred certain of these high-priority items to Russia-based end-users. As a result of these designations, all property and interests in property of the persons above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC.

 

In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or blocked persons are prohibited unless exempt or authorized by a general or specific license issued by OFAC. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person.

 

Treasury Sanctions Impede Russian Access to Battlefield Supplies and Target Revenue Generators | U.S. Department of the Treasury

 

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Announcement of OFAC's New Video Series: "Introduction to OFAC"

 

July 28, 2023: OFAC released the first episode of its “Introduction to OFAC” web series, a series of short videos created to provide viewers with a high-level introduction on the fundamentals of OFAC and sanctions implementation. The first episode introduces viewers to OFAC and its place within the U.S. government, as well as its history, mission, and relationship with the public.

 

Introduction to OFAC Video Series | Office of Foreign Assets Control (treasury.gov)

 

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U.S. Department of Justice, U.S. Department of Commerce, U.S. Treasury Department

 

The Departments of Justice, Commerce, And Treasury Issued A Joint Compliance Note On Voluntary Self-Disclosure Of Potential Violations

 

July 26, 2023: The Department of Justice, Department of Commerce’s Bureau of Industry and Security (BIS), and the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued a joint compliance note focusing on the voluntary self-disclosure policies that apply to U.S. sanctions, export controls, and other national security laws, including recent updates to certain of those policies. This note marks the second collective effort by the three agencies to inform the private sector about enforcement trends and provide guidance to the business community on compliance with U.S. sanctions and export laws.

 

The note underscores the importance of an effective and robust compliance program. If a company discovers a potential violation, whether it is an administrative or criminal violation, that company must promptly disclose and remediate. Not only does such reporting make the disclosing company potentially eligible for significant mitigation, but it also alerts national security agencies to activities that may pose a threat to the national security and foreign policy objectives of the U.S. Government.

 

https://www.bis.doc.gov/index.php/documents/policy-guidance/3302-vsd-tri-seal-compliance-note-7-26-23/file

 

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The U.K. Government

 

July 3, 2023: The U.K. Government's Export Control Joint Unit (ECJU) has issued Notice to Exporters 2023/11 on its issuance of a revised General Trade License (Syria Sanctions - Earthquake Relief Efforts in Syria).  The revised General Trade License replaces the license issued on 15 February 2023, which was due to expire on 31 August 2023.  The revised license is identical to the previous license, with the exception that it will remain in force until it is revoked.

The ECJU has also posted on its website updated guidance on complying with professional and business services sanctions related to Russia. This document contains information on services sanctions in the Russia (Sanctions) (EU Exit) Regulations 2019 (‘the Russia Regulations’). It also sets out guidance on applying for licenses and considers what information to include in the cover letter of license applications related to the prohibitions in regulations 54C and 54D of the Russia Regulations.

NTE 2023/11: General Trade Licence Syria Sanctions revised - GOV.UK (www.gov.uk)

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U.S. Census Bureau

 

Schedule B and Harmonized Tariff Schedule (HTS) Updated in the Automated Export System (AES)

 

July 3, 2023: Effective July 3, 2023, the Schedule B, Harmonized Tariff Schedule (HTS), and HTS Codes That Are Not Valid for AES tables have been updated to accept the changes to the July 1, 2023 codes.

AES will accept shipments with outdated codes during a grace period for 30 days beyond the expiration date of June 30, 2023Reporting an outdated code after the 30-day grace period will result in a fatal error.

The ACE AESDirect program has been updated with the 2023 codes and will accept shipments with outdated codes during the grace period as well.

The 2023 Schedule B and HTS tables are available for downloading at:

AES Concordance (census.gov)

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Tips on How to Resolve AES Response Messages

July 19, 2023: 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.

Fatal Error Response Code:  068

Narrative:     SRN Not on File; Action Not Allowed

Severity:       Fatal

Reason:        The Shipment is not on file in AES. Therefore, the requested action is not allowed.

Resolution:  When the Shipment Filing Action Request Indicator is a Change, Replace, or Cancel, the Shipment Reference Number must exist on a previous filing in AES for the filer.                       

Verify the Shipment Filing Action Request Indicator and the Shipment Reference Number, correct the shipment and resubmit.

Response Code:  850

Narrative:     Improbable Foreign/Domestic Origin

Severity:       Verify

Reason:        For the reported Schedule B/HTS Number, the Domestic/Foreign Origin Indicator is improbable for this commodity.

Resolution: Certain products are highly unlikely to be either of domestic origin or of foreign origin.  This might indicate either a keying error or misclassification of the product.   

Verify the Domestic/Foreign Origin Indicator and the Schedule B/HTS Number, correct the shipment, and resubmit (if necessary).  If the information is verified correct as reported, no action is necessary.

For a complete list of AES Response Codes, their reasons, and resolutions, see Appendix A – Commodity Filing Response Messages.

It is important that AES filers correct Fatal Errors as soon as they are received in order to comply with Foreign Trade Regulations.  These errors must be corrected prior to export for shipments filed pre-departure and as soon as possible for shipments filed post-departure but not later than five calendar days after departure.

For further information or questions, contact the U.S. Census Bureau’s Trade Data Collection Branch.

Telephone: (800) 549-0595; select option 1 for AES

Email: askaes@census.gov

Online: www.census.gov/trade

Blog: blogs.census.gov/globalreach

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Port of Unlading Code Deleted in the Automated Export System (AES) 

 

July 31, 2023: The U.S. Census Bureau announced the following Port of Unlading Code has been DELETED in the AES effective immediately.

Port Name           Port Code              Country

Liezen                  60217                   Australia

For further information or questions, contact the U.S. Census Bureau’s Trade Data Collection Branch.

Telephone: (800) 549-0595, select option 1 for AES

 

Email: askaes@census.gov

 

Online: www.census.gov/trade

 

Blog: blogs.census.gov/globalreach

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LATEST SANCTIONS FINES & PENALTIES

 

This section of our newsletter provides information on the latest sanctions, fines and penalties for export violations or matters of non-compliance with the ITAR or EAR issued by the US government enforcement agencies. It is provided as a service to exporters and associates of FD Associates to remind them of the importance of extreme due diligence in all international trade and export compliance matters, particularly those involving exports subject to the ITAR or the EAR. Don't let this happen to you or your company! Call us with questions or concerns at 703-847-5801 or email info@fdassociates.net.

 

Sanctions

July 10, 2023: OFAC issued Venezuela-Related General License 40B, "Authorizing Certain Transactions Involving the Exportation or Reexportation of Liquefied Petroleum Gas to Venezuela:"

Authorizing Certain Transactions Involving the Exportation or Reexportation of Liquefied Petroleum Gas to Venezuela

(a) Except as provided in paragraph (b) of this general license, all transactions related to the exportation or reexportation, directly or indirectly, of liquefied petroleum gas to Venezuela, involving the Government of Venezuela, Petróleos de Venezuela, S.A. (PdVSA), or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, that are prohibited by E.O. 13850 of November 1, 2018, as amended by E.O. 13857 of January 25, 2019, or E.O. 13884 of August 5, 2019, each as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized through 12:01 a.m. eastern daylight time, July 10, 2024.

(b) This general license does not authorize:

(1) Any payment-in-kind of petroleum or petroleum products; or

(2) Any transactions otherwise prohibited by the VSR, including transactions involving any blocked persons other than PdVSA, any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, or any Government of Venezuela person that is blocked solely pursuant to E.O. 13884.

(c) Effective July 10, 2023, General License No. 40A, dated July 7, 2022, is replaced and superseded in its entirety by this General License No. 40B.

Note to General License No. 40B: Nothing in this general license relieves any persons from compliance with the requirements of other Federal agencies, including the Department of Commerce’s Bureau of Industry and Security.

Additionally, OFAC is adding regulations to implement Executive Order (E.O.) 14078 of July 19, 2022, “Bolstering Efforts To Bring Hostages and Wrongfully Detained United States Nationals Home.”  These regulations are currently available for public inspection with the Federal Register and will take effect upon publication in the Federal Register on Tuesday, July 11, 2023.

Issuance of Venezuela-Related General License 40B; Publication of Hostages and Wrongful Detention Sanctions Regulations | Office of Foreign Assets Control (treasury.gov)

 

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July 11, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC)  sanctioned an individual in Serbia, Aleksandar Vulin, pursuant to Executive Order (E.O.) 14033. OFAC has designated Vulin pursuant to E.O. 14033 for being responsible for or complicit in, or having directly or indirectly engaged in, corruption related to the Western Balkans, including corruption by, on behalf of, or otherwise related to a government in the Western Balkans, or a current or former government official at any level of government in the Western Balkans, such as the misappropriation of public assets, expropriation of private assets for personal gain or political purposes, or bribery. Vulin has been implicated in transnational organized crime, illegal narcotics operations, and misuse of public office. Vulin has maintained a mutually beneficial relationship with U.S.-designated Serbian arms dealer Slobodan Tesic, helping ensure that Tesic’s illegal arms shipments can move freely across Serbia’s borders. As a result of this designation, all property and interests in property of Vulin that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC.

 

In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. All transactions by U.S. persons within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person, or the receipt of any contribution or provision of funds, goods, or services from any such person. In addition, financial institutions and other persons that engage in certain transactions or activities with the sanctioned individual may expose themselves to sanctions or be subject to an enforcement action.

 

The following individual has been added to OFAC's SDN List:

  • Aleksandar Vulin, of Serbia

 

Treasury Sanctions Official Linked to Corruption in Serbia | U.S. Department of the Treasury

 

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July 11, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned three Belgian nationals and one Mexican national for international drug trafficking, including cocaine and fentanyl. Those designated are involved in the importation and distribution of narcotics destined for U.S. and European markets.

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

  • Youssef Ben Azza, of United Arab Emirates
  • Othman El Ballouti, of United Arab Emirates
  • Younes El Ballouti, of United Arab Emirates
  • Franco Tabarez Martinez, of Mexico.

https://ofac.treasury.gov/recent-actions/20230719

 

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July 12, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 10 individuals, including several Sinaloa Cartel members and fugitives, as well as one Mexico-based entity, pursuant to Executive Order (E.O.) 14059. Those sanctioned are associated with Sinaloa, Mexico-based precursor chemical suppliers and brothers Ludim and Luis Alfonso Zamudio Lerma and ultimately operate under the Los Chapitos faction of the Sinaloa Cartel. Responsible for a significant portion of the illicit fentanyl and other deadly drugs trafficked into the United States, the Sinaloa Cartel is one of the most powerful and pervasive drug trafficking organizations in the world.

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

  • Eliseo De Leon Becerra, of Mexico
  • Jeuri Limon Elenes. of Mexico
  • Noel Lopez Perez, of Mexico
  • Oscar Noe Medina Gonzalez (a.k.a. "El Panu"; a.k.a. "Pan"; a.k.a. "Panu"), of Mexico
  • Ricardo Paez Lopez, of Mexico
  • Nestor Isidro Perez Salas (a.k.a. "Chicken Little"; a.k.a. "GARCIA, Nestor Isidro"; a.k.a. "Nini"), of Mexico
  • Dora Vanessa Valdez Fernandez, of Mexico
  • Angel Guillermo Zamudio Lerma, of Mexico
  • Daniel Zamudio Lerma, of Mexico
  • Jorge Alberto Zamudio Lerma, of Mexico

The following entity has been added to OFAC's SDN List:

  • Rei Compania Internacional, S.A. DE C.V. (a.k.a. Rei Compania International, S.A. DE C.V.), of Mexico.

Counter Narcotics Designations; Counter Narcotics Designations Removals | Office of Foreign Assets Control (treasury.gov)

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July 18, 2023: 88 FR 45816: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has published one general license (GL) issued pursuant to the Burma Sanctions Regulations: GL 5, which was previously made available on OFAC’s website. On June 21, 2023, OFAC issued GL 5 to authorize certain transactions otherwise prohibited by the Burma Sanctions Regulations, 31 CFR Part 525. The GL was made available on OFAC’s website when it was issued. The GL has an expiration date of August 5, 2023.

 

Additionally, The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has published three web general licenses (GLs) issued in the Syria Sanctions Regulations, Iran Transactions and Sanctions Regulations, and Global Terrorism Sanctions Regulations, and Venezuela Sanctions Regulations, respectively: Syria GL 21B, Iran GL N-2, and Venezuela GL 39B, each of which was previously made available on OFAC’s website. On June 14, 2023, OFAC issued Syria GL 21B, Iran GL N-2, and Venezuela GL 39B to extend the authorization for certain transactions otherwise prohibited by, respectively: the Syria Sanctions Regulations, 31 CFR Part 542; the Iranian Transactions and Sanctions Regulations, 31 CFR Part 560, and the Global Terrorism Sanctions Regulations, 31 CFR Part 594; and the Venezuela Sanctions Regulations, 31 CFR Part 591. At the time of issuance, OFAC made all three GLs, each of which has an expiration date of June 14, 2024.

 

GENERAL LICENSE NO. 21B: Authorizing Certain Activities To Respond to the Coronavirus Disease 2019 (COVID–19)

(a) Authorizing certain COVID–19-related transactions prohibited by the Syrian Sanctions Regulations. Except as provided in paragraph (b) of this general license, the following transactions and activities that are prohibited by the Syrian Sanctions Regulations, 31 CFR part 542 (SySR), are authorized through 12:01 a.m. eastern daylight time, June 14, 2024:

(1) Exportation of services related to COVID–19. All transactions and activities related to the exportation, reexportation, sale, or supply, directly or indirectly, of services to Syria that are related to the prevention, diagnosis, or treatment of COVID–19 (including research or clinical studies relating to COVID–19); and

(2) COVID–19-related transactions involving certain blocked persons. All transactions and activities involving the Government of Syria, Polymedics LLC, Letia Company, or any entity in which Polymedics LLC or Letia Company owns, whether individually or in the aggregate, directly or indirectly, a 50 percent or greater interest, that are related to the prevention, diagnosis, or treatment of COVID–19 (including research or clinical studies relating to COVID–19), provided that any exportation or reexportation of items to Syria must be licensed or otherwise authorized by the Department of Commerce.

(b) This general license does not authorize:

(1) The exportation or reexportation of any goods, technology, or services to military, intelligence, or law enforcement purchasers or importers;

(2) The unblocking of any property blocked pursuant to any part of 31 CFR chapter V; or

(3) Any transactions or activities otherwise prohibited by the SySR, or prohibited by any other part of 31 CFR chapter V, statute, or Executive order, or involving any blocked person other than the blocked persons identified in paragraph (a) of this general license.

(c) Effective June 14, 2023, General License 21A, dated June 10, 2022, is replaced and superseded in its entirety by this General License 21B.

Note 1 to General License 21B: Nothing in this general license relieves any person from compliance with the requirements of other Federal agencies, including the Department of Commerce's Bureau of Industry and Security or the Department of State's Directorate of Defense Trade Controls.

GENERAL LICENSE N–2: Authorizing Certain Activities To Respond to the Coronavirus Disease 2019 (COVID–19)

(a) Authorizing certain COVID–19-related transactions prohibited by the Iranian Transactions and Sanctions Regulations. Except as provided in paragraphs (d) and (e) of this general license, the following transactions and activities that are prohibited by the Iranian Transactions and Sanctions Regulations, 31 CFR part 560 (ITSR), are authorized through 12:01 a.m. eastern daylight time, June 14, 2024:

(1) Exportation of goods or technology. All transactions and activities related to the exportation, reexportation, sale, or supply, directly or indirectly, of goods or technology for use in connection with the prevention, diagnosis, or treatment of COVID–19 (including research or clinical studies related to COVID–19) to Iran or the Government of Iran, or to persons in third countries purchasing specifically for resale to Iran or the Government of Iran;

(2) Importation of or dealings in certain COVID–19-related goods. All transactions and activities related to the importation into the United States of, or dealings in or related to, goods that previously were exported or reexported to Iran or the Government of Iran pursuant to this general license and that are broken, defective, or non-operational, or are connected to product recalls, adverse events, or other safety concerns, or for routine maintenance or the permanent return of such items to the United States or a third country; and

(3) Exportation or importation of services. All transactions and activities related to the exportation, reexportation, sale, or supply, directly or indirectly, of services to Iran or the Government of Iran, or the importation into the United States of, or dealings in or related to, Iranian-origin services, in each case that are related to the prevention, diagnosis, or treatment of COVID–19 (including research or clinical studies relating to COVID–19).

(b) Authorizing certain transactions involving the Central Bank of Iran (CBI) or the National Iranian Oil Company (NIOC). Except as provided in paragraph (e) of this general license, all transactions and activities described in paragraph (a) of this general license involving CBI, NIOC, or any entity in which NIOC owns, directly or indirectly, a 50 percent or greater interest, that are prohibited by the ITSR or the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR) are authorized through 12:01 a.m. eastern daylight time, June 14, 2024.

(c) Authorizing certain financial transactions. Except as provided in paragraph (e) of this general license, the processing of funds transfers or trade finance transactions that are ordinarily incident and necessary to give effect to the transactions and activities authorized in paragraphs (a) and (b) of this general license that are prohibited by the ITSR or the GTSR are authorized through 12:01 a.m. eastern daylight time, June 14, 2024.

(d) Any exportation or reexportation of goods or technology pursuant to paragraph (a) of this general license is subject to the following conditions:

(1) Any goods or technology exported or reexported must:

(i) Be designated as EAR99 under the Export Administration Regulations, 15 CFR parts 730 through 774 (EAR); or

(ii) In the case of goods or technology that are not subject to the EAR, not be listed on any multilateral export control regime; and

(2) All exports or reexports made pursuant to this general license must be concluded prior to the expiration date of this general license.

(e) This general license does not authorize:

(1) The exportation or reexportation of goods or technology to CBI, NIOC, or any entity in which NIOC owns, directly or indirectly, a 50 percent or greater interest;

(2) The exportation or reexportation of any goods, technology, or services to military, intelligence, or law enforcement purchasers or importers;

(3) The exportation or reexportation of any goods, technology, or services used to facilitate the development or production of a chemical or biological weapon or weapon of mass destruction;

(4) The unblocking of any property blocked pursuant to any part of 31 CFR chapter V; or

(5) Any transactions or activities otherwise prohibited by the ITSR or the GTSR, or prohibited by any other part of 31 CFR chapter V, involving any person blocked pursuant to the GTSR except as identified in paragraph (b) of this general license.

(f) Effective June 14, 2023, General License N–1, dated June 10, 2022, is replaced and superseded in its entirety by this General License N–2.

Note 1 to General License N–2: The export or reexport to Iran of certain food, medicine, medical devices, and agricultural commodities, as well as certain related transactions such as payments and brokering, are broadly authorized under sections 560.530, 560.532, and 560.533 of the ITSR, subject to certain conditions. In addition, transactions or activities authorized under those provisions that involve CBI, NIOC, or any entity in which NIOC owns, directly or indirectly, a 50 percent or greater interest, are also authorized pursuant to Counter Terrorism- and Iran-related General License No. 8A. Those authorizations remain in effect, including with respect to exports or reexports of food, medicine, medical devices, and agricultural commodities intended to respond to COVID–19 that satisfy the applicable criteria of those authorizations.

Note 2 to General License N–2: Nothing in this general license relieves any person from compliance with the requirements of other Federal agencies, including the Department of Commerce's Bureau of Industry and Security or the Department of State's Directorate of Defense Trade Controls.

GENERAL LICENSE NO. 39B: Authorizing Certain Activities To Respond to the Coronavirus Disease 2019 (COVID–19)

(a) Authorizing certain COVID–19-related transactions involving the Government of Venezuela. Except as provided in paragraph (c) of this general license, all transactions and activities involving the Government of Venezuela that are related to the prevention, diagnosis, or treatment of COVID–19 (including research or clinical studies relating to COVID–19), that are prohibited by Executive Order (E.O.) 13808 of August 27, 2017, as amended by E.O. 13857 of January 25, 2019, or E.O. 13884 of August 5, 2019, each as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized through 12:01 a.m. eastern daylight time, June 14, 2024.

(b) Authorizing certain COVID–19-related transactions involving certain banks. Except as provided in paragraph (c) of this general license, all transactions and activities described in paragraph (a) of this general license involving Banco Central de Venezuela (BCV), Banco de Venezuela, S.A. Banco Universal (Banco de Venezuela), Banco Bicentenario del Pueblo, de la Clase Obrera, Mujer y Comunas, Banco Universal C.A. (Banco Bicentenario del Pueblo), or any entity in which BCV, Banco de Venezuela, or Banco Bicentenario del Pueblo owns, whether individually or in the aggregate, directly or indirectly, a 50 percent or greater interest, that are prohibited by E.O. 13850 of November 1, 2018, as amended by E.O. 13857, each as incorporated into the VSR, are authorized through 12:01 a.m. eastern daylight time, June 14, 2024.

(c) This general license does not authorize:

(1) The exportation or reexportation of any goods, technology, or services to military, intelligence, or law enforcement purchasers or importers;

(2) Any transactions or activities involving Petróleos de Venezuela, S.A. (PdVSA), Banco de Desarrollo Economico y Social de Venezuela (BANDES), or Banco Bandes Uruguay S.A. (Bandes Uruguay), or any entity in which PdVSA, BANDES, or Bandes Uruguay owns, whether individually or in the aggregate, directly or indirectly, a 50 percent or greater interest;

(3) The unblocking of any property blocked pursuant to any part of 31 CFR chapter V; or

(4) Any transactions or activities otherwise prohibited by the VSR, or prohibited by any other part of 31 CFR chapter V, statute, or E.O., or involving any blocked persons other than Government of Venezuela persons blocked solely pursuant to E.O. 13884 or the blocked persons identified in paragraph (b) of this general license.

(d) Effective June 14, 2023, General License 39A, dated June 10, 2022, is replaced and superseded in its entirety by this General License 39B.

Note 1 to General License 39B: Nothing in this general license relieves any person from compliance with the requirements of other Federal agencies, including the Department of Commerce's Bureau of Industry and Security or the Department of State's Directorate of Defense Trade Controls.

Federal Register :: Publication of Covid-Related Web General Licenses Related to Syria Sanctions Regulations, Iranian Transactions and Sanctions Regulations, Global Terrorism Sanctions Regulations, and Venezuela Sanctions Regulations.

 

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July 20, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is taking action to further implement the commitments that G7 Leaders made on February 24, 2023 and May 19, 2023. The designations announced by OFAC and the Department of State take measures to inhibit Russia’s access to products that support its military and war efforts; reduce Russia’s revenue from the metals and mining sector; undermine its future energy capabilities; degrade Russia’s access to the international financial system; and starve Russia of G7-produced technology needed for its technology, aerospace, and defense sectors.

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

  • Vasiliy Nikolaevich Anokhin, of Russia
  • Valeriy Yevgenyevich Chekalov, of Russia
  • Ivan Cvetic, of Russia
  • Leonid Vladimirovich Gornin, of Russia
  • Tatyana Grigoryevna Ivanova, of Russia
  • Aleksey Igorevich Khersontsev of Russia
  • Sergey Borisovich Korolev, of Russia
  • Aleksey Leonidovich Kudrin, of Russia
  • Vladimir Nikolaevich Lepin, of Russia
  • Pavel Alekseevich Marinychev, of Russia
  • Vasiliy Sergeevich Osmakov, of Russia
  • Yong Hyok Rim, of North Korea
  • Anatoliy Anatolyevich Smolin, of Russia
  • Pavel Nikolaevich Snikkars, of Russia
  • Maksim Valeriovych Soldatov, of Ukraine
  • Pavel Yurevich Sorokin, of Russia
  • Igor Mikhailovich Stramilov, of Russia
  • Ilya Eduardovich Torosov, of Russia

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

  • M. Prokhorov General Physics Institute Russian Academy Of Sciences (a.k.a. Federalnoe Gosudarstvennoe Byudzhetnoe Uchrezhdennie Nauki Federalny Issledovatelski Tsentr Institut Obshchei Fiziki Im. A.M. Prokhorova Rossiskoi Akademii Nauk; a.k.a. Prokhorov General Physics Institute Of Ras; a.k.a. Prokhorov General Physics Institute Of The Russian Academy Of Sciences; a.k.a. Russian Academy Of Sciences - Alexandr Mikhailovich Prokhorov General Physics Institute; a.k.a. "GPI RAS"; a.k.a. "IOF RAN"; a.k.a. "IOF RAN FGBU", of Russia.
  • Aem Propulsion, of Russia
  • Ak Systems (a.k.a. Ak Sistems), of Russia
  • Aleksinskii Khimicheskii Kombinat (a.k.a. Aleksinsky Chemical Combine; a.k.a. Aleksinsky Chemical Plant; a.k.a. "AKHK"), of Russia
  • Amegino FZE, of Russia
  • AO NPO Kurganpribor, of Russia
  • AO Vostok Treid Invest, of Russia
  • Arsenal Machine Building Plant Open Joint Stock Company (a.k.a. Arsenal Machine Building Plant OJSC; a.k.a. Mz Arsenal OAO; a.k.a. Mz Arsenal PAO; a.k.a. Otkrytoe Aktsionernoe Obschestvo Mashinostroitelnyi Zavod Arsenal, of Russia
  • Basis Trade Prosoft LLC (a.k.a. Bazis Treid Prosoft; a.k.a. "Btptrade", of Russia
  • Budker Institute Of Nuclear Physics Of Siberian Branch Russian Academy Of Sciences (a.k.a. Budker Institute Of Nuclear Physics Of SB RAS; a.k.a. Federalnoe Gosudarstvennoe Byudzhetnoe Uchrezhdenie Nauki Institut Yadernol Fiziki IM. G.I. Budkera Sibirskogo Otdeleniya Rossiskoi Akademii Nauk; f.k.a. Institute Of Nuclear Physics Of The Siberian Branch Of The Ussr Academy Of Science; a.k.a. Iyaf So Ran Fgbu; a.k.a. "Binp Sb Ras", of Russia
  • Burovaya Kompaniya Eurasia LLC, of Russia
  • Central Research Institute Of The Russian Air And Space Forces (a.k.a. Federalnoe Gosudarstvennoe Bjudzhetnoe Uchrezhdenie Tsentralnyj Nauchno-Issledovatelskij Institut Vojsk Vosdushno-Kosmicheskoj Oborony Minoborony Rossii; a.k.a. Fgbu Tsnii Vvko Minoborony Rossii; a.k.a. "Tsnii Vvko"), of Russia.
  • Closed Joint Stock Company Klimovskiy Specialized Ammunition Plant, of Russia
  • Closed Joint Stock Company Superconducting Nanotechnology (a.k.a. Limited Liability Company Superconducting Nanotechnology; a.k.a. Obshchestvo S Ogranichennoi Otvetstvennostyu Sverkhprovodnikovye Nanotekhnologii; a.k.a. Scontel; a.k.a. Skontel AO; a.k.a. Skontel OOO, of Russia
  • Federal State Budgetary Institution Of Science Federal Research Center Kazan Scientific Center Of The Russian Academy Of Sciences, of Russia
  • Federal State Enterprise Ya M Sverdlov Plant, of Russia
  • Federal State Unitary Enterprise Center For Operation Of Space Ground Based Infrastructure, of Russia
  • Fund For Development Of Energy Complex Energy, of Russia
  • Institute Of Laser Physics Of The Siberian Branch Of The Russian Academy Of Sciences, of Russia
  • Joint Stock Company Astrophysika National Centre Of Laser Systems And Complexes, of Russia
  • Joint Stock Company Aviation Electronics And Communication Systems, of Russia
  • Joint Stock Company Commercial Bank Solidarnost, of Russia
  • Joint Stock Company Compel, of Russia
  • Joint Stock Company Experimental Design Bureau Fakel, of Russia
  • Joint Stock Company Gazprom Avtomatizatsiya, of Russia
  • Joint Stock Company Locko Bank, of Russia
  • Joint Stock Company Neftegazavtomatika, of Russia
  • Joint Stock Company Petersburg Social Commercial Bank, of Russia
  • Joint Stock Company Research And Production Corporation Precision Systems And Instruments, of Russia
  • Joint Stock Company Science Research Institute For Precise Instruments, of Russia
  • Joint Stock Company Scientific And Production Association Critical Information Systems, of Russia
  • Joint Stock Company Scientific Production Enterprise Research And Design Institute Of Well Logging, of Russia
  • Joint Stock Company Special Research Bureau Of Moscow Power Engineering Institute, of Russia
  • Joint Stock Company Tula Cartridge Works, of Russia
  • Joint Stock Company Ural Mining And Metallurgical Company, of Russia
  • Joint Stock Company Uralelektromed, of Russia
  • JSC Siberian Service Company, of Russia
  • JSC Tinkoff Bank, of Russia
  • Kazanskii Gosudarstvennyi Kazennyi Porokhovoi Zavod, of Russia
  • Komponenta AO, of Russia
  • Limited Liability Company AB Optiks, of Russia
  • Limited Liability Company AK Microtech, of Russia
  • Limited Liability Company Fifth Element Trading, of Russia
  • Limited Liability Company Fivel, of Russia
  • Limited Liability Company Forepost Trading, of Russia
  • Limited Liability Company Fortap, of Russia
  • Limited Liability Company Imex Expert, of Russia
  • Limited Liability Company Irbis Sky Tech
  • Limited Liability Company Ishimbay Specialized Chemical Plant Of Catalyst, of Russia
  • Limited Liability Company Knt Kat, of Russia
  • Limited Liability Company Kosmosavia, of Russia
  • Limited Liability Company Legion, of Russia
  • Limited Liability Company Oktanta, of Russia
  • Limited Liability Company Perm Oil Machine Company, of Russia
  • Limited Liability Company Private Security Organization Gazpromneft Okhrana, of Russia
  • Limited Liability Company Private Security Organization Legat, of Russia
  • Limited Liability Company Proizvostvennaya Kommercheskaya Firma Gazneftemash, of Russia
  • Limited Liability Company Rn Kat, of Russia
  • Limited Liability Company Rustmash, of Russia
  • Limited Liability Company Siaisi, of Russia
  • Limited Liability Company Sterlitamak Catalyst Plant, of Russia
  • Limited Liability Company Tyumen Petroleum Research Center, of Russia
  • Limited Liability Company Vega Strategic Services
  • LLC Altrabeta, of Russia
  • LLC IQ Components, of Russia
  • LLC Onelek, of Russia
  • LLC RM Design And Development, of Russia
  • LLC Spetselservis, of Russia
  • V. Frunze Arsenal Design Bureau Joint Stock Company, of Russia
  • MCI Trading Doo Beograd Palilula
  • Nauchno Issledovatelskii I Proektnyi Institut Po Pererabotke Gaza AO, of Russia
  • NPF-Radiotekhkomplekt AO, of Russia
  • Obshestvo S Ogranichennoj Otvetstvennostyu Nipigaz Aktiv, of Russia
  • Obshestvo S Ogranichennoj Otvetstvennostyu Nipigaz IT, of Russia
  • OOO Morskie Paromnye Linii Vanino Sakhalin, of Russia
  • OOO Radiotekhsnab, of Russia
  • Open Joint Stock Company Russian Institute Of Radionavigation And Time, of Russia
  • Osipyan Institute Of Solid State Physics Of The Russian Academy Of Sciences, of Russia
  • OSOO Kargolayn, of Russia
  • OSOO Progress Lider, of Russia
  • L. Kapitza Institute For Physical Problems, Russian Academy Of Sciences, of Russia
  • Public Joint Stock Company Sakhalin Shipping Company, of Russia
  • Radiant EK AO, of Russia
  • Region-Prof LLC, of Russia
  • Saturn EK OOO, of Russia
  • Scientific Production Company Optolink, of Russia
  • Space Research Institute Russian Academy Of Sciences, of Russia
  • State Unitary Enterprise Of The Donetsk People's Republic Republican Center Trading House Vtormet, of Ukraine
  • Staut Company Limited, of Russia
  • Tambovskii Porokhovoi Zavod, of Russia
  • Technologies Systems And Complexes Limited, of Russia
  • UMMC Nonferrous Metals Processing Limited Liability Company, of Russia
  • Unistream Commercial Bank JSC, of Russia
  • Vityaz Machine Building Company Joint Stock Company, of Russia
  • ZAO GTME Tekhnologii, of Russia

https://ofac.treasury.gov/recent-actions/20230720

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July 24, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned three Malian transition government and military officials for facilitating the deployment and expansion of the Private Military Company ‘Wagner’s (Wagner Group) activities in Mali. The United States took this step based on evidence showing that these Malian officials have contributed to the Wagner Group’s malicious activities in Mali.

These sanctions respond to the actions of three specific individuals and are not directed against the people of Mali.  As the largest bilateral donor of development and humanitarian assistance to Mali, the United States continues to support the Malian people in their pursuit of peace, prosperity, and democracy.

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

  • Adama Bagayoko of Mali
  • Sadio Camara of Mali
  • Alou Boi Diarra of Mali

Russia-related Designations | Office of Foreign Assets Control (treasury.gov)

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July 27, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on Abdiweli Mohamed Yusuf, the head of the finance office of the Somalia-based affiliate of the Islamic State of Iraq and Syria (ISIS), designating him as a Specially Designated Global Terrorist (SDGT). Abdiweli Mohamed Yusuf has played a key role in the delivery of foreign fighters, supplies, and ammunition on behalf of ISIS-Somalia, which serves as a hub for disbursing funds and guidance to ISIS branches and networks across the continent. ISIS-Somalia generates much of its revenue through extortion, specifically targeting local communities for money and recruits, often under the threat of violence.

 

The following individual has been added to OFAC's SDN List:

  • Abdiweli Mohamed Yusuf of Somalia

Counter Terrorism Designation | Office of Foreign Assets Control (treasury.gov)

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July 31, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated key leaders and financial facilitators of the Islamic State of Iraq and Syria (ISIS) and al-Qa’ida in Maldives, including 20 ISIS, ISIS-Khorasan (ISIS-K), and al-Qa’ida operatives. OFAC also designated 29 companies associated with the individuals sanctioned, who include leaders of Maldives-based terrorist-affiliated criminal gangs and associates of key ISIS-K recruiter Mohamad Ameen who was designated by OFAC in 2019. Several of the individuals being designated have also planned or carried out attacks that targeted journalists and local authorities.

 

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

  • Ahmed Afraah of The Maldives
  • Ahmed Agleel of The Maldives
  • Ameen Ahmed of The Maldives
  • Milos Bukejlovic of Bosnia and Herzegovina
  • Zeljka Cvijanovic of Bosnia and Herzegovina
  • Faris Mohamed Didi of The Maldives
  • Moosa Inas of The Maldives
  • Abdulla Ali Manik of The Maldives
  • Ahmed Mubeen of The Maldives
  • Jinaau Naseem of The Maldives
  • Mohamed Naushad Shareef of The Maldives
  • Ali Nihadh of The Maldives
  • Ahmed Alif Rauf of The Maldives
  • Ibrahim Aleef Rauf of The Maldives
  • Mohamed Inthif Rauf of The Maldives
  • Mohamed Maathiu Abdul Razzaq of The Maldives
  • Ali Shafiu of Afghanistan
  • Yoosuf Shaheed of The Maldives
  • Hussain Shamil of The Maldives
  • Abdulla Shareef of The Maldives
  • Ali Shiyam of The Maldives
  • Nenad Stevandic of Bosnia and Herzegovina
  • Mohamed Thasleem of The Maldives
  • Radovan Viskovic of Bosnia and Herzegovina

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

  • 3ZED Investment of The Maldives
  • Al Athmaar of The Maldives
  • Baum Pvt Ltd of The Maldives
  • Code A Partnership of The Maldives
  • Designer Garage of The Maldives
  • Dhawi Pvt Ltd of The Maldives
  • Eriyadhu Investments Pvt Ltd of The Maldives
  • Fruit Plus Maldives Pvt Ltd of The Maldives
  • Furaha Construction Pvt Ltd of The Maldives
  • Golden Warriors Investment Pvt Ltd of The Maldives
  • Green Birds of The Maldives
  • Inma Maldives of The Maldives
  • Jazeera Properties Pvt Ltd of The Maldives
  • Jazeerat Almaldifi of The Maldives
  • Larosa of The Maldives
  • Maroc International Pvt Ltd of The Maldives
  • Multi Construction Pvt Ltd of The Maldives
  • New Sun Investments Pvt Ltd of The Maldives
  • Panda Maldives Pvt Ltd of The Maldives
  • X Investments Pvt Ltd of The Maldives
  • Sias Investment Pvt Ltd of The Maldives
  • Sky Nova Investment of The Maldives
  • Southern Stallions Pvt Ltd of The Maldives
  • Street Investments Pvt Ltd of The Maldives
  • Street Motor Services of The Maldives
  • Syskon Pvt Ltd of The Maldives
  • Vaaly Brothers Pvt Ltd, of The Maldives
  • Visions Maldives Pvt Ltd of The Maldives
  • White Beach Watersports Pvt Ltd of The Maldives.

Counter Terrorism Designations and Designation Update; Balkans-related Designations | Office of Foreign Assets Control (treasury.gov)

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U.S. Department of Commerce – Bureau of Industry and Security (BIS)

 

July 18, 2023: 88 FR 46071: In this rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding four entities to the Entity List under the destinations of Greece, Hungary, Ireland, and North Macedonia.  These four entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States.

 

https://www.bis.doc.gov/index.php/documents/federal-register-notices-1/3299-0694-aj28-published-7-19-2023/file

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Fines and Penalties

 

July 6, 2023: The U.S. Department of Justice (DOJ) announced the filing of a forfeiture complaint against over 9,000 rifles, 284 machine guns, approximately 194 rocket launchers, over 70 anti-tank guided missiles, and over 700,000 rounds of ammunition that the U.S. Navy seized in transit from Iran’s Islamic Revolutionary Guard Corps (IRGC) to militant groups in Yemen. According to court documents, the noted weapons came from four interdictions of stateless DHOW vessels: two from 2021 and two from 2023.

These interdictions led to the discovery and seizure of four large caches of conventional weapons, including long arms and anti-tank missiles, and related munitions – all of which were determined to be primarily of either Iranian, Chinese, or Russian origin. This action follows the government’s March 2023 forfeiture action against over one million rounds of ammunition in route from Iran to Yemen. The network for both actions was involved in the illicit trafficking of advanced conventional weapons systems and components by sanctioned Iranian entities that directly support military action by the Houthi movement in Yemen and the Iranian regime’s campaign of terrorist activities throughout the region. The forfeiture complaint alleges a sophisticated scheme by the IRGC to clandestinely ship weapons to entities that pose grave threats to U.S. national security. This forfeiture action is a product of the U.S. government’s coordinated effort to enforce U.S. sanctions against the IRGC and the Iranian regime and are merely allegations.

Office of Public Affairs | United States Files Forfeiture Action Against Over Nine Thousand Rifles and Over 700,000 Rounds of Ammunition Enroute from Iran to Yemen | United States Department of Justice

 

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July 7, 2023: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) announced that Jaeyoun Jung of Puyallup, Washington, has agreed to a denial of his export privileges for two years, with such denial suspended during a two-year probationary period and thereafter waived, and to attend export compliance training within twelve months, to settle charges that he committed one violation of EAR § 764.2(a) - Engaging in Prohibited Conduct.

 

Specifically, on one occasion on or about October 3, 2018, Jung exported from the United States to South Korea optical magnifiers (the "items") without the BIS license required by EAR § 742.7. At all times pertinent to the transaction at issue, these items were subject to the EAR, classified on the Commerce Control List (the "CCL") under Export Control Classification Number ("ECCN") 0A987.e, and controlled for Crime Control ("CC") reasons. The items were valued in total at approximately $10,947. Jung ordered the items from a supplier located in Auburn, Washington. U.S. Customs and Border Protection officers seized the items.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1537-e2875/file

 

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July 10, 2023: The U.S. Department of Justice (DOJ) announced the unsealing of an eight-count Indictment charging Gal Luft with offenses related to willfully failing to register under the Foreign Agents Registration Act (“FARA”), arms trafficking, Iranian sanctions violations, and making false statements to federal agents. Luft, a dual U.S.-Israeli citizen, was indicted on November 1, 2022, and arrested on February 17, 2023, in the Republic of Cyprus based on the charges in the Indictment. Luft subsequently fled after being released on bail while extradition proceedings were pending and remains a fugitive.

According to the allegations contained in the Indictment, other filings, public information, and statements made during court proceedings; Luft conspired with others in an effort to act within the United States to advance the interests of the People’s Republic of China (“China”) as agents of China-based principals, without registering as foreign agents as required under U.S. law. As part of this scheme, while serving as the co-director of a Maryland-based non-profit think tank, Luft agreed to covertly recruit and pay, on behalf of principals based in China, a former high-ranking U.S. Government official (“Individual-1”), including in 2016 while the former official was an adviser to the then-President-elect, to publicly support certain policies with respect to China without Luft or Individual-1 filing a registration statement as an agent of a foreign principal with the Attorney General of the United States, in violation of FARA.

Additionally, Luft conspired with others and attempted to broker illicit arms transactions with, among others, certain Chinese individuals and entities. In his role as a broker or middleman, Luft worked to find both buyers and sellers of certain weapons and other materials, without a license to do so as required under U.S. law, in violation of the Arms Export Control Act. Among other things, Luft worked to broker a deal for Chinese companies to sell certain weapons to Libya, including anti-tank launchers, grenade launchers, and mortar rounds. Luft also worked to broker deals for certain weapons to be sold to the United Arab Emirates, including aerial bombs and rockets. Luft further worked to broker deals for certain weapons to be sold by a Chinese company to Kenya, including unmanned aerial vehicles (“UAVs”) – and specifically “strike” UAVs.

https://www.justice.gov/usao-sdny/pr/us-attorney-announces-charges-against-co-director-think-tank-acting-unregistered

 

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July 11, 2023: The U.S. Department of Homeland Security's Homeland Security Investigations (ICE) announced that Cesar Ignacio Perez-Barrios, 48, of Mexico, who is a former law enforcement officer, has been sentenced to 46 months in prison followed by three years of supervised release for his involvement in firearms smuggling as a result of an HSI investigation. Perez-Barrios was also ordered to pay a $100 special assessment. Perez-Barrios pleaded guilty to smuggling goods from the United States. On April 28, 2019, Perez-Barrios knowingly attempted to smuggle from the United States into Mexico: five AR-style upper receivers; five AR-style lower receivers; five AR-style barrels; five AR-style buffer tubes; five trigger kits; and five AR-style pistol grips. Perez-Barrios concealed these items in a vehicle a co-conspirator drove while attempting to exit the United States into Mexico. Perez-Barrios expected to be paid for his role in the operation intended to illegally smuggle the firearm parts into Mexico from the United States. Perez-Barrios arranged the transportation of the firearm parts, which are prohibited to export from the United States into Mexico without a valid license. Neither Perez-Barrios nor any of his associates had a valid license or any other lawful authority to export the items to Mexico.

HSI Nogales case results in a man sentenced for conspiracy to smuggle firearms from the US | ICE

 

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July 14, 2023: The U.S. Department of Justice (DOJ) arraigned defendant Vadim Konoshchenok, who allegedly smuggled dual-use technologies and ammunition from U.S. companies for Russia’s defense sector. The indictment chared him with conspiracy and other charges related to a global procurement and money laundering network on behalf of the Russian government.  Konoshchenok, a Russian citizen with alleged ties to Russia’s Federal Security Service (FSB), was arrested in Estonia on a provisional arrest warrant issued from the Eastern District of New York and extradited from Estonia to the United States on July 13, 2023.

 

https://www.justice.gov/usao-edny/pr/suspected-russian-intelligence-operative-extradited-estonia-face-charges-related

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July 14, 2023: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) announced that Profense LLC (Profense), a manufacturer of defense weapon systems located in Phoenix, AZ, has agreed to pay a civil penalty of $48,500 and B.E. Meyers & Co., Inc. (Meyers), a defense contractor in Redmond, Washington, has agreed to pay a civil penalty of $44,750 to resolve violations of the anti-boycott regulations set forth at EAR Part 760. As part of the settlements with BIS, both Profense and Meyers admitted to the conduct set forth in the Proposed Charging Letters, which alleged violations involving the furnishing of information by U.S. persons about their business relationships with boycotted countries or blacklisted persons and the failure to report the receipt of requests to take action in support of a foreign boycott of a country friendly to the United States. Specifically, both Profense and Meyers participated in a trade show in Bahrain in 2019. In connection with the shipment of products (goods) for display at the trade show, each company furnished to its freight forwarder a commercial invoice/packing list certifying that the goods were not of Israeli origin and not manufactured by a company on the “Israeli Boycott Blacklist.” A “blacklist” in this context is a boycott-based list of persons with whom a boycotting country requires U.S. Persons to refuse to do business (see Section 760.2(a)(4) of the EAR). Furnishing such information is prohibited by Section 760.2(d) of the EAR. In addition, both companies failed to report to BIS the receipt of the request to furnish such information as required by Section 760.5 of the EAR. The antiboycott provisions set forth in Part 760 of the EAR discourage, and in certain circumstances prohibit, U.S. persons from taking certain actions in furtherance or support of a boycott maintained by a foreign country against a country friendly to the United States (i.e., an unsanctioned foreign boycott). In addition, U.S. persons must report to OAC their receipt of certain boycott-related requests, whether or not they intend to comply with them. Reports may be filed electronically or by mail on form BIS-621P for single transactions or on form BIS-6051P for multiple transactions involving boycott requests received in the same calendar quarter.

 

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3296-2023-07-13-antiboycott-penalties/file

 

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July 14, 2023: The U.S. Department of Justice (DOJ) announced that Vadim Konoshchenok, 48, of Tallinn, Estonia, with alleged ties to Russia's Federal Security Service (FSB) has been charged with conspiracy and other charges related to a global procurement and money laundering network on behalf of the Russian government. Konoshchenok was arrested in Estonia on a provisional arrest warrant issued from the Eastern District of New York and extradited from Estonia to the United States on July 13. According to the indictment and court filings, Konoshchenok and his co-defendants were affiliated with Serniya Engineering and Sertal LLC (the Serniya Network), Moscow-based companies that operate under the direction of Russian intelligence services to procure advanced electronics and sophisticated testing equipment for Russia’s military-industrial complex and research and development sector, some of which can be used in the development of nuclear and hypersonic weapons, quantum computing and other military applications.

Following Russia’s invasion of Ukraine in February 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the Department of Commerce (DOC) Bureau of Industry and Security (BIS) levied sanctions against Serniya, Sertal, and several individuals and companies engaged in the scheme, calling them “instrumental to the Russian Federation’s war machine.” As alleged in the indictment, the Serniya Network was licensed to conduct highly sensitive and classified procurement activities by Russia’s FSB, Russia’s principal security agency and the main successor agency to the Soviet Union’s KGB. According to court documents, in electronic communications, Konoshchenok explicitly identified himself as an FSB “Colonel” and enclosed a photograph of himself wearing his FSB uniform. Additionally, a review of electronic communications equipment recovered from Konoshchenok revealed saved contacts beginning with the prefix “FSB” and email addresses from “FSB[.]ru” domains. One of Konoshchenok’s calendar entries referenced an “FSB order.”

As described in the indictment, Estonia was a popular transshipment point, where Konoshchenok would smuggle U.S.-origin items across the border into Russia. On Oct. 27, 2022, Konoshchenok was detained by Estonian authorities while attempting to cross into Russia from Estonia with approximately 35 different types of semiconductors and electronic components, including several U.S.-origin and export-controlled items. Konoshchenok has also been repeatedly stopped by Estonian border officials attempting to smuggle hundreds of thousands of American-made and export-controlled rounds into Russia, including 6.5 mm, 7 mm, .338, and .308 magnum rounds, which are commonly used by snipers, as well as military-grade .223 rounds. Konoshchenok used an Estonian front company called Stonebridge Resources and communicated frequently with other co-conspirators about sourcing, transporting, and paying for controlled items. In electronic communications, Konoshchenok is clear that his fee is “10%” because he “can’t do less. Sanctions . . . Sanction item for 10%.” To date, over half a ton of military-grade ammunition linked to Konoshchenok has been recovered or interdicted before being smuggled into Russia. DOJ's Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions, and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s military invasion of Ukraine, coordinated this case.

Office of Public Affairs | Suspected Russian Intelligence Operative Extradited from Estonia to Face Charges Related to Providing American-Made Electronics and Ammunition to Russian Military | United States Department of Justice

 

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July 17, 2023: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has issued Orders denying export privileges to the following two individuals:

  • Tyler James Sumlin - Until September 11. 2026 - On September 11, 2019, in the U.S. District Court for the Western District of Florida, Tyler James Sumlin (“Sumlin”) was convicted of violating 18 U.S.C. § 554(a). Specifically, Sumlin was convicted of attempting to smuggle from the United States. to Mexico firearms, namely silencers, a short-barreled rifle, and a destructive device. As a result of his conviction, the Court sentenced Sumlin to five years of probation, a $100 assessment, and a $150 criminal fine.
  • Victor Thomas Diaz, III - Until April 18, 2032 - On April 18, 2022, in the U.S. District Court for the Central District of California, Victor Thomas Diaz, III (“Diaz”) was convicted of violating 18 U.S.C. § 371. Specifically, Diaz was convicted of conspiring to knowingly, intentionally, and willfully engage in the business of dealing firearms without a license. As a result of his conviction, the Court sentenced Diaz to 24 months of confinement, three years of supervised release, and a $200 assessment.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1540-e2876/file and https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1541-e2877/file

 

 

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July 21, 2023: Booz Allen Hamilton Holding Corporation has agreed to pay the United States $377,453,150 to resolve allegations that it violated the False Claims Act by improperly billing commercial and international costs to its government contracts. Booz Allen, which is headquartered in McLean, Virginia, provides a range of management, consulting, and engineering services to the government, as well as commercial and international customers.

Under government contracting rules, there must be a nexus between the costs charged to a government contract and the objective of the contract. Thus, a contractor may charge to a government contract costs directly related to that contract, as well as indirect costs that benefit multiple contracts including the government contract. A contractor may not charge costs to a government contract, however, that have no relationship to that contract. This prohibition prevents government contractors from using taxpayer funds to subsidize non-government related work.

The settlement resolves allegations that from approximately 2011 to 2021, Booz Allen improperly charged costs to its government contracts and subcontracts that instead should have been billed to its commercial and international contracts. In particular, the government alleged that Booz Allen improperly allocated indirect costs associated with its commercial and international business to its government contracts and subcontracts that either had no relationship to those contracts and subcontracts or were allocated to those contracts and subcontracts in disproportionate amounts. The government further alleged that Booz Allen failed to disclose to the government the methods by which it accounted for costs supporting its commercial and international businesses. As a result, Booz Allen obtained reimbursement from the government for the costs of commercial activities that provided no benefit to the United States.

https://www.justice.gov/opa/pr/booz-allen-agrees-pay-37745-million-settle-false-claims-act-allegations

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July 25, 2023: The U.S. Department of Justice (DOJ) announced that Behrouz Mokhtari, 72, of McLean, Virginia, has been sentenced to 41 months in prison followed by three years of supervised release for violating U.S. sanctions against Iran by conspiring to engage in prohibited business activities on behalf of persons and entities in Iran. In addition, Mokhtari was ordered to forfeit approximately $2,862,598 in proceeds derived from his criminal activity as well as a residence he purchased in Campbell, California, for over $1.5 million using such proceeds. Mokhtari pleaded guilty earlier this year in the District of Maryland to two counts of conspiracy to violate the International Emergency Economics Power ACT (IEEPA). According to court documents, Mokhtari engaged in a conspiracy lasting from at least March 2018 until at least September 2020, in which he conducted numerous business activities on behalf of Iranian entities without first obtaining the required licenses from the Office of Foreign Assets Control (OFAC).

In a separate conspiracy lasting from about February 2013 until at least June 2017, Mokhtari and a number of Iranian nationals agreed to conduct illicit shipments of petrochemical products to and from Iran­, utilizing his front company, East & West Shipping Inc., in Panama to do so. Mokhtari held management positions and/or maintained ownership control of numerous businesses in Iran and the United Arab Emirates (UAE), collectively referred to as “the FSR Network.” Using the FSR Network, he and his co-conspirators illegally provided services to Iranian entities, such as the refinement and transport of petrochemical products. Mokhtari and his co-conspirators used FSR Network bank accounts in the UAE, including Bitubiz FZE, to process these U.S. dollar transactions. Mokhtari admitted that he knew that, as a U.S. citizen, engaging in business with Iranian entities without first obtaining a license or permission from OFAC is prohibited. He further knew that it was illegal to engage in transactions intended to evade Iranian sanctions or to engage in transactions related to goods and services of Iranian origin or export.

Office of Public Affairs | Virginia Man Sentenced to Federal Prison for Conspiring to Violate Iranian Sanctions | United States Department of Justice

 

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July 26, 2023: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) issued an Order renewing the temporary denial of export privileges of Empresa de Transporte Aéreocargo del Sur, S.A. ) a/k/a Aerocargo del Sur Transportation Company ) a/k/a EMTRASUR in Caracas, Venezuela. The initial TDO, issued on August 2, 2022, was based on evidence that EMTRASUR engaged in conduct prohibited by a TDO that had been previously issued against Iranian airline Mahan Air a/k/a Mahan Airlines a/k/a Mahan Airways (“Mahan Air”) and the Regulations when EMTRASUR, through its parent company, acquired custody and/or control from Mahan Air of a U.S-origin Boeing 747 aircraft bearing manufacturer’s serial number 23413 (“MSN 23413”), an item subject to the EAR and classified under ECCN 9A991, in or around October 2021.6 Moreover, the initial TDO, issued on August 2, 2022, was also based on evidence that EMTRASUR had continued to use MSN 23413 on flights into Iran and Russia in violation of General Prohibition 10, which (among other restrictions) prohibits the continued use of an item that was known to have been exported or reexported in violation of the EAR. As also noted in OEE’s initial request, MSN 23413 was detained by Argentinian authorities on or about June 8, 2022, where it presently remains. On or about August 2, 2022, the United States Department of Justice transmitted a request to Argentinian authorities for the seizure of MSN 23413 following the unsealing of a seizure warrant in the U.S. District Court for the District of Columbia.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1542-e2878/file

 

New FD Associates, Inc. Workshops Announced:

Upcoming workshops 2023:

 

September 18-21, 2023 ITAR FUNdamentals
October 17, 2023 ITAR for the Empowered Official
November 16, 2023 ITAR for the Empowered Official
December 12-13, 2023 ITAR Compliance Programs

 

See our website or contact FD @ info@fdassociates.net or 703-847-5801.

 

JULY 2023 EXPORT CONTROL REGULATIONS UPDATES Read More »

The Second Step in ITAR Registration

GraceBIO

ABC Company is registered with the Department of State as a manufacturer of defense articles. During the company annual registration renewal process, the ABC Company office administrator assigned to prepare the registration renewal for signature by the senior corporate officer identified that ABC Company had in the preceding 12 months since the last registration renewal moved and changed their name due to a corporate rebranding effort.

 

In the DECCS DS-2032 registration form, as ABC Company attempts to prepare the renewal, they find that they cannot make these changes because the name and address are greyed out on the application.

 

What are they doing wrong?

 

Is it administrative? Or is there a regulatory compliance matter that they have failed to comply with?

 

ABC Company is experiencing both an administrative issue and a compliance issue.

 

There is an administrative issue because the name and address blocks on the renewal form are greyed out; the DECCS system will not allow for these changes to be made on the renewal form. A registration amendment must be filed to change these details on the DS-2032.

 

There is a compliance issue because a change in company name and address requires ABC Company to notify DDTC of the changes under 22 C.F.R. § 122.4. By failing to notify DDTC, ABC Company has found themselves to be in non-compliance with the ITAR.

 

22 C.F.R. § 122.4 states that within 5 days of the event, or 60 days in advance, written notification must be made to DDTC by the senior officer of the registrant of that change.

 

What counts as a change in company information?

  • Any change to the eligibility and/or conviction status of those listed on the registration statement. This includes indictment or otherwise charged (i.e. by criminal information in lieu of indictment) for or conviction of violating any of the U.S. criminal statutes listed in ITAR 120.6 or foreign criminal law on exportation of defense articles where conviction of such law carries a minimum term of imprisonment greater than 1 year; or becomes ineligible to contract with, or to receive a license or other approval from any agency of the U.S.G;
  • Any change to your company name or address.
  • Any change to your company organizational structure.
  • Any change in the ownership or control status of the company (DDTC requires all persons directly or indirectly with 5% or more ownership to be listed)
  • Any change in your senior officials, owners, and board members:
    • Resignations/Retirements
    • New appointments
    • Ownership percentage changes
  • Any acquisition, divestment, or establishment of a new subsidiary engaged in ITAR related activities.
  • Any change to parent/subsidiary or affiliate companies’ information.

 

As exports consultants, we routinely discover that our ITAR registered clients have failed to properly notify the Department of State, Directorate of Defense Trade Controls and Compliance (“DDTC”) of material changes to their company information. We learn of this when asking our clients to verify the accuracy of the information contained in the current DS2032 filing made 1 year earlier. Name changes, address changes, owners/officer and ownership changes are significant material changes that should be managed within your company with an eye towards making all notifications within the 5-day post event notice timeline. Failure to notify the Department of State signals that your company doesn’t have a pulse on this administrative obligation. If your company is not managing its registration within the Department of State ITAR requirements and compliance guidelines[1], what else is your company not compliant with?

 

All companies and organizations involved in ITAR-regulated manufacturing and exporting must have a valid registration with DDTC. Filing a registration with DDTC annually and receiving approval is the first step in ensuring your company avoids any ITAR related compliance violations.

 

Maintaining a valid registration is the second step. Maintenance of your registration is more involved than submitting a renewal application each year and submitting the DDTC renewal fee payment (see below for a recent update on fees). All DDTC registered companies are required to submit notification to the Department of State of certain changes to the company information listed on your registration statement. This requirement is stipulated in 22 C.F.R. § 122.4(a)[2].

 

22 C.F.R. § 122.4(a) requires notification to DDTC within 5 days of the event of any change to the eligibility and/or conviction status of those individuals or entities listed on the registration statement. This includes indictment or otherwise charged (i.e. by criminal information in lieu of indictment) for or conviction of violating any of the U.S. criminal statutes listed in ITAR 120.6 or foreign criminal law on exportation of defense articles where conviction of such law carries a minimum term of imprisonment greater than 1 year; or becomes ineligible to contract with, or to receive a license or other approval from any agency of the U.S.G.

 

22 C.F.R. § 122.4(a) also requires 5-day notification to DDTC if there is a change in the registrant’s name or address, organizational structure, ownership of control of the company, establishment, acquisition, or divestment of a subsidiary company, or any change to the board of directors, senior officers, partners, or owners.

 

22 C.F.R. § 122.4(b)[3] requires notification to DDTC 60 days prior to an intended sale or transfer of ownership or control of the registered company to a foreign person or entity. The 60-day notification does not relieve the requirement to notify the DDTC of the sale or transfer (5-day notice) after the Committee on Foreign Investment in the United States (CFIUS) review is complete, or to secure export licenses for any possible export of technical information during the due diligence process.

 

22 C.F.R. § 122.4(c)[4] requires notification to DDTC within 5 days of the event to any merger, acquisition, or divestiture of a registrant. The details of the transaction should be provided in the notification along with all licenses and agreements that will be affected by the change. Following notification to DDTC, the registrant must subsequently receive approval of the transaction.

 

 

Recent update from DDTC on registration fees:

 

On June 26, 2023, The Department of State’s IT Modernization Team deployed the new “Renewal Fee Details” functionality to the DECCS Registration application. This feature will only be visible to Registration application users and affect small companies who fall into the Tier 3 (submitters of more than 10 export license applications) with a reduced registration fee.

 

Registration tiers are based on the number of license applications submitted by the registrant. Tier 1 registrants are those submitting an initial registration application, registrants who have not submitted any license applications during the preceding 12 months, and non-profit registrants. The set fee for Tier 1 registrants is $2,250. Tier 2 registrants are those renewing their registration who have submitted 1-10 license applications during the preceding 12 months. The set fee for Tier 2 registrants is $2,750. Tier 3 registrants are those renewing their registration who have submitted more than 10 license applications during the preceding 12 months. The fee for Tier 3 registrations is based at $2,750 and increases $250 for every license application after the 10th application.

 

The process:

  • 90 days or fewer remaining prior to the Registration expiration date;
  • The organization is subject to a Tier 2 or Tier 3 registration renewal fee[5]; and
  • Organizations having a minimum of 1 or more licenses “Approved” or “Approved with Provisos” in the twelve-month window ending 90 days before Registration expiration.

 

Provided the above criteria are met, users will see a new “Renewal Fee Details” button in their Registration dashboard in DECCS when there are 90 days or less before the expiration date. Selecting this button will display a pop-up window featuring additional details and information on how the renewal fee was calculated. Users will now be able to see the following information consolidated into the new Renewal Fee Details window:

 

  • Registration expiration date;
  • License Period “Start” and “End” dates;
    • Any licenses which were either “Approved” or “Approved with Provisos” within this date range were incorporated in the calculation of renewal fees;
  • Number of Licenses;
    • Any licenses which were “Returned Without Action” (RWA) will not be included in the calculation of renewal fees;
    • DS-4294 & DS-6004 licenses are not included in the calculation of renewal fees;
  • Total License Value;
  • 3% of Total License Value Reduced Fee (Tier 3 Renewals Only);
    • The 3% of Total License Value Reduced Fee field is provided only for calculation purposes and will not be applicable to all organizations. Please see the “Payment of Registration” website page to determine your organization’s renewal fee tier and discount fee eligibility; and
  • Renewal Fee Charged By DDTC.

 

Within this pop-up window, users will be presented with a “Download Licenses” button which generates a .csv file of all licenses considered when calculating the renewal fee charged by DDTC. This .csv file will include the case number, license type, approval date, and license value of all licenses “Approved” or “Approved with Provisos” within the license period date range that were used in the calculation of the renewal fee.

 

ITAR registered companies must remain vigilant in maintaining the accuracy of their registrations with The Department of State. Do not skip the second step of your ITAR registration.

 

 

 

[1]https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_kb_article_page&sys_id=4f06583fdb78d300d0a370131f961913

[2] § 122.4 Notification of changes in information furnished by registrants. (a) A registrant must, within five days of the event, provide to the Directorate of Defense Trade Controls a written notification, signed by a senior officer (e.g., chief executive officer, president, secretary, partner, member, treasurer, general counsel), if:  (1) Any of the persons referred to in § 122.2(b) is indicted or otherwise charged (e.g., by criminal information in lieu of indictment) for or convicted of violating any of the U.S. criminal statutes enumerated in § 120.6 of this subchapter or violating a foreign criminal law on exportation of defense articles where conviction of such law carries a minimum term of imprisonment of greater than 1 year, or becomes ineligible to contract with, or to receive a license or other approval to export or temporarily import defense articles or defense services from any agency of the U.S. Government; or (2) There is a change in the following information contained in the Statement of Registration: (i) Registrant's name; (ii) Registrant's address; (iii) Registrant's legal organization structure; (iv) Ownership or control; (v) The establishment, acquisition, or divestment of a U.S. or foreign subsidiary or other affiliate who is engaged in manufacturing defense articles, exporting defense articles or defense services; or (vi) Board of directors, senior officers, partners, or owners.

[3] (b) A registrant must notify the Directorate of Defense Trade Controls by registered mail at least 60 days in advance of any intended sale or transfer to a foreign person of ownership or control of the registrant or any entity thereof. Such notice does not relieve the registrant from obtaining the approval required under this subchapter for the export of defense articles or defense services to a foreign person, including the approval required prior to disclosing technical data. Such notice provides the Directorate of Defense Trade Controls with the information necessary to determine whether the authority of § 38(g)(6) of the Arms Export Control Act regarding licenses or other approvals for certain sales or transfers of defense articles or data on the U.S. Munitions List should be invoked (see § 126.1(e) of this subchapter).

 

[4] (c) The new entity formed when a registrant merges with another company or acquires, or is acquired by, another company or a subsidiary or division of another company shall advise the Directorate of Defense Trade Controls of the following: (1) The new firm name and all previous firm names being disclosed; (2) The registration number that will survive and those that are to be discontinued (if any); (3) The license numbers of all approvals on which unshipped balances will be shipped under the surviving registration number, since any license not the subject of notification will be considered invalid; and (4) Amendments to agreements approved by the Directorate of Defense Trade Controls to change the name of a party to those agreements. The registrant must provide to the Directorate of Defense Trade Controls a signed copy of such an amendment to each agreement signed by the new U.S. entity, the former U.S. licensor and the foreign licensee, within 60 days of this notification, unless an extension of time is approved by the Directorate of Defense Trade Controls. Any agreement not so amended may be considered invalid.

 

The Second Step in ITAR Registration Read More »

JUNE 2023 EXPORT CONTROL REGULATIONS UPDATES

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

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

REGULATORY UPDATES

The President

President Biden Continues The National Emergency With Respect To Belarus

June 14, 2023: 88 Fed. Reg. 39109: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency with respect to Belarus declared in Executive Order 13405 of June 16, 2006, as expanded in scope by Executive Order No. 14038 of August 9, 2021.

https://www.federalregister.gov/documents/2023/06/14/2023-12873/continuation-of-the-national-emergency-with-respect-to-belarus

President Biden Continues The National Emergency With Respect To The Western Balkans

June 22, 2023: 88 Fed. Reg. 40683: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency declared in Executive Order 13219 of June 26, 2001, which was expanded in scope in Executive Order 14033, with respect to the Western Balkans.

https://www.federalregister.gov/documents/2023/06/22/2023-13424/continuation-of-the-national-emergency-with-respect-to-the-western-balkans

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President Biden Continues The National Emergency With Respect To North Korea

June 22, 2023: 88 Fed. Reg. 40681: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency declared in Executive Order 13466 of June 26, 2008, expanded in scope in Executive Order 13551 of August 30, 2010, addressed further in Executive Order 13570 of April 18, 2021, further expanded in scope in Executive Order 13687 of January 2, 2015, and under which additional steps were taken in Executive Order 13722 of March 15, 2016, and Executive Order 13810 of September 20, 2017, with respect to North Korea.

https://www.federalregister.gov/documents/2023/06/22/2023-13420/continuation-of-the-national-emergency-with-respect-to-north-korea

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

DDTC Name And Address Changes Posted To Website

June 2 through 28, 2023: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at  

https://www.pmddtc.state.gov/ddtc_public?id=ddtc_kb_article_page&sys_id=bd72ca0adbf8d30044f9ff621f961981:

  • Change in address for umlaut Consulting Engineering, S.L., Vía de los poblados 1, Parque Empresarial Alvento, 28033 Madrid, Spain to calle Dulce Chacón 55, 7a Planta, 28050 Madrid, Spain.
  • Change in name for Toshiba Electronics Engineering Corporation, Toshiba Electronic Systems Corporation, and Toshiba Electro-Wave Components Co., Ltd. to Toshiba Electronic Technologies Corporation due to merger.
  • Change in name and address for General Electric International, Inc., Explora Business Centre Stodulky, Praha 5, 158 00, Czech Republic to GE Aviation Czech s.r.o., Beranovych 65, Praha 9, 199 02, Czech Republic, and all locations in the Czech Republic due to reorganization.
  • Change in name and address for General Electric International, Inc., Rond Point Schuman 204, Brussels 1040, Belgium, to GE Europe NV, Rond Point Schuman 2-4, Brussels 1040, Belgium, and all locations in Belgium due to reorganization.
  • Change in name for Altran Deutschland S.A.S. & Co. KG to Capgemini Engineering Deutschland S.A.S. & Co. KG due to acquisition.
  • Change in name and address for Pennine Tools Aerospace Ltd., Unit 1, Ravenscroft Business Park, Jackdaw Road, Barnoldswick, Lancashire BB18 6DX, United Kingdom to Buoyancy Aerospace V1 Ltd. (dba Buoyancy Aerospace), Jackdaw Road, Barnoldswick, Lancashire BB18 6DX, United Kingdom due to merger.
  • Change in name and address for General Electric International, Inc., 204 Rond-Point du Pont de Sevres, Citylights, Boulogne-Billancourt 92100, France to GE Aviation Systems France SARL, 17 Avenue Didier Daurat Immeuble Socrate, Blagnac 31700, France, and all locations in France, due to corporate reorganization.
  • Change in name for General Electric International, Inc. (Netherlands Operations) to GE Aviation Netherlands B.V. due to reorganization.
  • Change in name for General Electric International, Inc. (Ireland Operations) to GE Management Services Ireland Limited due to corporate reorganization.
  • Change in Name for General Electric Company Polska Sp. z.o.o. to GE Aerospace Poland Sp. z.o.o. due to corporate reorganization.
  • Change in Address for Agile Space Industries, Inc., from 1334 Airport Rd., Durango, CO 81303, to 1514 Main Ave., Durango, CO 81301.
  • Change in Name for SPX Corporation to SPX Technologies, Inc.

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The Directorate Of Defense Trade Controls (DDTC) Updates Two Open General Licenses Issued in July 2022, Extending the Validity by Three Years

June 1, 2023: 33 FR 35992: The Department of State, Directorate of Defense Trade Controls (DDTC) published a notice in the Federal Register to inform the public that it published two updated open general licenses, which extend the validity period by two years. The update also addresses ITAR citations changed by the rewrite of Part 120 in the Fall of 2020.

Federal Register:: International Traffic in Arms Regulations: Reissuance and Update of Open General Licenses 1 and 2

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The Department of State Deploys New Renewal Fee Details Function In DECCS

June 26, 2023:  The Department of State’s IT Modernization Team will deploy the new “Renewal Fee Details” functionality to the DECCS Registration application. This feature will be visible to Registration application users who fulfill the following criteria:

  • 90 days or fewer remaining prior to the Registration expiration date;
  • Organization is subject to a Tier 2 or Tier 3 registration renewal fee**; and
  • Organization has at minimum one or more licenses “Approved” or “Approved with Provisos” in the twelve-month window ending 90 days before Registration expiration.

Registration tiers are based on the number of license applications submitted by the registrant. Tier 1 registrants are those submitting an initial registration application, registrants who have not submitted any license applications during the preceding 12 months, and non-profit registrants. The set fee for Tier 1 registrants is $2,250. Tier 2 registrants are those renewing their registration who have submitted 1-10 license applications during the preceding 12 months. The set fee for Tier 2 registrants is $2,750. Tier 3 registrants are those renewing their registration who have submitted more than ten license applications during the preceding 12 months. The fee for Tier 3 registrations is based at $2,750 and increases by $250 for every license application after the 10th application.

Provided the above criteria are met, users will see a new “Renewal Fee Details” button in their Registration dashboard when there are 90 days or less before the expiration date. Selecting this button will display a pop-up window featuring additional details and information on how the renewal fee was calculated. Users will now be able to see the following information consolidated into the new Renewal Fee Details window:

  • Registration expiration date;
  • License Period “Start” and “End” dates;
    • Any licenses which were either “Approved” or “Approved with Provisos” within this date range were incorporated in the calculation of renewal fees;
  • Number of Licenses;
    • Any licenses which were “Returned Without Action” (RWA) will not be included in the calculation of renewal fees;
    • DS-4294 & DS-6004 licenses are not included in the calculation of renewal fees;
  • Total License Value;
  • 3% of Total License Value Reduced Fee (Tier 3 Renewals Only)**;
    • The 3% of Total License Value Reduced Fee field is provided only for calculation purposes and will not be applicable to all organizations. Please see the “Payment of Registration” website page to determine your organization’s renewal fee tier and discount fee eligibility; and
  • Renewal Fee Charged By DDTC.

Within this pop-up window, users will be presented with a “Download Licenses” button which generates a .csv file of all licenses considered when calculating the renewal fee charged by DDTC. This .csv file will include the case number, license type, approval date, and license value of all licenses “Approved” or “Approved with Provisos” within the license period date range that were used in the calculation of the renewal fee.

https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_public_portal_news_and_events

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Department of Defense

The Netherlands – MK 41 Vertical Launching System (VLS)

June 2, 2023: The State Department made a determination approving a possible Foreign Military Sale to the Government of the Netherlands of MK 41 Vertical Launching Systems (VLS) Baseline (B/L) VII Strike Length Launcher Modules (either system or standalone) and related equipment for an estimated cost of $110 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale today.

The Government of the Netherlands has requested a possible purchase of eight (8) eight-cell MK 41 Vertical Launching Systems (VLS) Baseline (B/L) VII Strike Length Launcher Modules (either system or standalone). Also included are spare parts; handling equipment; transportation test and support equipment; software; engineering/technical assistance; personnel training and training equipment; documentation, publications, and technical data; U.S. Government and contractor technical assistance; and other related elements of logistics and program support. The total estimated program cost is $110 million.

This proposed sale will support the foreign policy and national security objectives of the United States by improving the security of a NATO ally that is an important force for political stability and economic progress in Europe. It is vital to the U.S. national interest to assist the Netherlands in developing and maintaining a strong and ready self-defense capability.

The proposed sale will provide a defensive capability for the Netherlands while enhancing interoperability with the U.S. and other allied forces. The Royal Netherlands Navy intends to use the MK 41 VLS Baseline (B/L) VII strike-length launcher modules for their new ship class. These modules are intended for ESSM BLK1 and SM-2 capabilities in support of ongoing and emergent operational needs. The Netherlands has previously purchased MK 41 VLS capability and actively uses it on their current ship classes. The Netherlands will have no difficulty absorbing this equipment and support into its armed forces. The proposed sale of this equipment and support will not alter the basic military balance in the region.

The prime contractor will be Lockheed Martin Corporation, Bethesda, MD. There are no known offset agreements proposed in connection with this potential sale. Implementation of the proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to the Netherlands. However, U.S. Government or contractor personnel in-country visits will be required on a temporary basis in conjunction with program technical oversight and support requirements. There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.

The Netherlands – MK 41 Vertical Launching System (VLS) | Defense Security Cooperation Agency (dsca.mil)

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DSCA Notifies Congress Of Potential FMS Sale To The Netherlands

June 2, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of the Netherlands has requested a possible purchase of eight (8) eight-cell MK 41 Vertical Launching Systems (VLS) Baseline (B/L) VII Strike Length Launcher Modules (either system or standalone). Also included are spare parts; handling equipment; transportation test and support equipment; software; engineering/technical assistance; personnel training and training equipment; documentation, publications, and technical data; U.S. Government and contractor technical assistance; and other related elements of logistics and program support. The total estimated program cost is $110 million. The prime contractor will be Lockheed Martin Corporation, Bethesda, MD. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/netherlands-mk-41-vertical-launching-system-vls

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DSCA Notifies Congress Of Potential FMS Sale To France

June 13, 2023: The Government of France has requested to buy additional non-MDE E-2C Hawkeye sustainment items and services that will be added to a previously implemented case. The original FMS case, valued at $99.6 million, included E-2C Hawkeye sustainment support. Therefore, this notification is for E-2C Hawkeye sustainment support to include an Engine Component Improvement Program (CIP); software updates; technical publications; U.S. Government and contractor technical/product support/assistance; and other related elements of logistics and program support. The estimated total cost is $160 million. The principal U.S. contractor will be Northrop Grumman, Melbourne, FL. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/france-e-2c-hawkeye-sustainment-support

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DSCA Notifies Congress Of Potential FMS Sale To Kuwait

June 13, 2023: The Government of Kuwait has requested the continuation of contractor-provided engineering technical services; contractor maintenance services; Hush House (an enclosed, noise-suppressed aircraft jet engine testing facility) support services; and Liaison Office Support for the Government of Kuwait’s F/A-18 C/D/E/F program, to include: F/A-18 avionics software upgrades; engine component improvements; ground support equipment; engine and aircraft spares and repair parts; publications and technical documentation; Engineering Change Proposals (ECP); U.S. Government and contractor programmatic, financial, and logistics support; maintenance and engineering support; F404/F414 engine and engine test cell support; and other related elements of logistical and program support. This proposed sale will provide follow-on sustainment support to Kuwait’s F/A-18C/D/E/F aircraft. The estimated cost is $1.8 billion. The principal contractors will be Sigmatech, Inc., Huntsville, AL; Kay and Associates, Inc., Buffalo Grove, IL; Kellogg, Brown, and Root, Houston, TX; L3 Technologies, Melbourne, FL; The Boeing Company, St. Louis, MO; General Electric, Lynn, MA; Industrial Financial Services, Ottawa, ON; and Lockheed Martin, Orlando, FL. Additional principal contractors will be determined by a competitive contractual award process. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/kuwait-follow-technical-support

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DSCA Notifies Congress Of Potential FMS Sale To Spain

June 14, 2023: The Government of Spain has requested to buy an additional one hundred fifty-three (153) M982A1 Excalibur tactical projectiles that will be added to a previously implemented case whose value was under the congressional notification threshold. The original FMS case, valued at $21.87 million, included one hundred eighteen (118) M982A1 Excalibur tactical projectiles. This notification is for a combined total of two hundred seventy-one (271) M982A1 Excalibur tactical projectiles. Also included is a portable electronic Fire Control System (FCS); Improved Platform Integration Kit; Propelling Charge Modular Artillery Charge System; Simple Key Loaders (SKL); crypto cable; training aids; technical data; U.S. Government technical assistance; transportation; Excalibur spare parts; artillery cleaning sections; new equipment training; repair and return support equipment; support related to collateral damage estimation tables; and other related elements of logistics and program support. The total estimated cost is $48.2 million. The principal contractor will be Raytheon Company Missile Systems, McAlester, OK. There are no known offset agreements proposed in connection with this potential sale. Implementation of this sale will not require the assignment of any U.S. Government or contractor representatives to Spain.

https://www.dsca.mil/press-media/major-arms-sales/spain-excalibur-projectiles

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DSCA Notifies Congress Of Potential FMS Sale To The Netherlands

June 16, 2023: The Government of the Netherlands has requested to buy up to four (4) MQ-9A Block 5 aircraft; up to three (3) UAV MQ-9 Mobile Ground Control Systems (MGCS); up to thirty (30) Embedded Global Positioning Systems/Internal Navigation Systems (EGI) devices, Airborne, with Selective Availability Anti-Spoofing Module (SAASM) or M-Code; up to eight (8) AN/DAS-4 Multi-Spectral Targeting Systems; and up to twenty (20) Lynx AN/APY-8 Synthetic Aperture Radars. Also included are Reaper Engines; Selex Seaspray Synthetic Aperture Radars; SeaVue Maritime Radars; M299 Hellfire Longbow missile launchers; AN/ARC-210 radios; Line-of-Site (LOS) Ground Data Terminals; Ruggedized Aircraft Maintenance Test Stations (RAMTS); AN/APX-119 and other Identification Friend or Foe transponders; KIV-77 Cryptographic Appliques; KY-100M narrowband/wideband terminals; AN/PYQ-10 Simple Key Loaders; satellite communications earth terminal subsystems (SETSS); spare parts, consumables, and accessories and repair and return support; secure communication equipment and cryptographic devices; major/minor modifications, maintenance, and maintenance support; munitions support and support equipment; unclassified software delivery and support; transportation support; unclassified publications and technical documentation; studies and surveys; U.S. Government and contractor engineering, technical and logistics support services; and other related elements of logistic and program support. The estimated total cost is $611 million. The principal contractor will be General Atomics-Aeronautical Systems, Poway, CA. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/netherlands-mq-9a-block-5-aircraft

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DSCA Notifies Congress Of Potential FMS Sale To Canada

June 27, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Canada has requested to buy up to sixteen (16) P-8A Patrol Aircraft; up to twenty-six (26) Multifunctional Information Distribution System Joint Tactical Radio System 5 (MIDS JTRS 5); up to thirty-eight (38) Embedded Global Positioning Systems (GPS)/Inertial Navigation Systems (EGIs) for the LN-251; up to twenty-five (25) System Processor Replacements for AN/AAQ-24(V)N Large Aircraft Infrared Countermeasures (LAIRCM) System Processor Replacement (LSPR) with Exelis Embedded GPS Receiver (EGR) integrated with SAASM; and up to twenty-two (22) Guardian Laser Transmitter Assemblies (GLTA) for the AN/AAQ-24(V)N. Also included are commercial engines; Tactical Open Mission Software (TOMS); Electro-Optical (EO) and Infrared (IR) MX-20HD; AN/AAQ-2 Acoustic System; AN/APY-10 Radar; AN/ALQ-240 Electronic Support Measures; NexGen Missile Warning Sensors; AN/ARC-210 RT-2036(C) Radios; AN/PRC-117G Manpack Radios including MPE-S type II with SAASM 3.7; AN/ALQ-213 Electronic Countermeasures; AN/ALE-47 Countermeasures Dispenser Systems; AN/UPX-43 Identification Friend or Foe (IFF) Interrogators; AN/APX-123A(V) IFF Digital Transponders; KIV-78 IFF Mode 4/5 Cryptographic Appliques; KIV-701A Cryptographic Core Modules; KY-100M, KY-58, KYV-5 for HF-121C radios; KG-175 Encryptor Network Convergence System; AN/PYQ-10 V3 Simple Key Loaders (SKL) with KOV-21 Cryptographic Appliques; Radiant Mercury Hardware and Software with ENTR(V)4 Receiver with Embedded Crypto for the Integrated Broadcast System (IBS); software; publications; Dual KIV-7M with Power Supply HFIP Channel Link Encryptor; Advanced Digital Antenna Production (ADAP) Antenna Electronics (AE); Advanced Digital Antenna Production (ADAP) Controlled Reception Pattern Antennas (CRPA); Control Interface Units (CIU) for AN/AAQ-24(V)N LAIRCM; aircraft spares; spare engines; support equipment; operational support systems; training; training devices; maintenance trainer/classrooms; engineering technical assistance (ETA); logistics technical assistance (LTA); Country Liaison Officer (CLO) support; Contractor Engineering Technical Services (CETS); Contractor Logistics Support (CLS); repair and return; transportation; aircraft ferry; other associated training and support; and other related elements of logistics and program support. The estimated total cost is $5.9 billion. The prime contractor will be The Boeing Company, Seattle, WA. There are a significant number of other companies under contract with the U.S. Navy that will provide components, systems, and engineering services during the execution of this effort. While the purchaser typically requests offsets, any offset agreement will be defined in future negotiations between the purchaser and the contractor(s).

https://www.dsca.mil/press-media/major-arms-sales/canada-p-8a-aircraft

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The Department of Defense (DoD) Makes Recommendations To Improve And Accelerate To FMS Process

June 13, 2023: The Department of Defense (DoD) approved a tasking memo from the DoD Foreign Military Sales (FMS) Tiger Team that highlights six key FMS pressure points and directs the implementation of recommendations to improve and accelerate the Department’s institutional processes to execute FMS cases. The efforts of the Tiger Team and the Department’s commitment to improving the FMS system advance the direction of the 2022 National Defense Strategy to break down barriers to working with allies and partners.

The Tiger Team analyzed representative case studies at all phases of the FMS process, illuminated best practices to benchmark, and identified systemic challenges endemic in DoD’s FMS ecosystem. The team reviewed the findings of historical reform efforts and also solicited and incorporated feedback from allies and partner nations, and the U.S. industry on ways to improve the efficiency of DoD’s implementation of the FMS process.

The FMS-implementing agencies were instructed to:

  • Improve the Department’s understanding of ally and partner requirements. To accelerate discussions with allies and partner nations about FMS requirements and reduce delays during the FMS case lifecycle, the Department will change the way it organizes, trains, and equips for security cooperation, including by establishing a Defense Security Cooperation Service on par with the Defense Attaché Service;
  • Enable efficient reviews for the release of technology. To reduce barriers to the export of key capabilities, the Department will review and update relevant policies and empower accountable officials to improve the efficiency of the review and release of technology to allies and partner nations. The Department will also continue to support interagency efforts focused on technology review and release;
  • Provide allies and partner nations with relevant priority capabilities. To better enable allies and partner nations to support their own national security needs, the Department of Defense will develop a methodology to facilitate Non-Programs of Record;
  • Accelerate acquisition and contracting support. To advance FMS acquisition prioritization and award timelines for allies and partner nations, the Department will establish contract award standards and metrics as well as develop associated process maps to monitor the FMS prioritization and award process;
  • Expand Defense Industrial Base (DIB) capacity. To reduce production timelines, the Department will incorporate ally and partner requirements into ongoing efforts to expand DIB production capacity. This will include developing a comprehensive study to incentivize DIB investment in production capacity and building surge capability for high-demand, low-supply platforms, systems, and services. The strategy will include the use of multi-year contracts; enhanced use of the Special Defense Acquisition Fund; five-year predictive analyses of partner demand; and sustained engagement with the DIB; and
  • Ensure broad U.S. Government support. Recognizing that DoD is part of the broader U.S. Government FMS ecosystem, the Department will work with the Department of State and other stakeholders, including Congress, to identify opportunities to improve the FMS process.

To implement these recommendations and ensure the elevation of emergent FMS issues to senior leadership, the Department established an FMS Continuous Process Improvement Board (CPIB), which will act as an enduring governance structure within the Department. The Board, which reports to the Secretary of Defense, will provide accountability in implementing the recommendations, measuring impact, and continually pursuing areas to improve the overall process.

https://www.defense.gov/News/Releases/Release/Article/3425963/department-of-defense-unveils-comprehensive-recommendations-to-strengthen-forei/

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U.S. Census Bureau

Tips on How to Resolve AES Response Messages

June 21, 2023: To help the industry take the appropriate action for the different AES Response Messages, below are two tips on how to address the most frequent messages that were generated in AES for this month.

Response Code:  303

Narrative:      Sold En Route Indicator Must be Y or N

Severity:        Fatal

Reason: The Party Type is identified as Ultimate Consignee, and the Sold En Route Indicator is not reported as Yes or No.

Resolution:  The Ultimate Consignee information must be reported on an EEI, including a valid Sold En Route Indicator. If the Ultimate Consignee is known and reported, set the Sold En Route Indicator to No. If the cargo is to be Sold En Route and the ultimate consignee is not known at the time of export, then set the Sold En Route Indicator to Yes.

Verify the Ultimate Consignee and the Sold En Route Indicator, correct the shipment, and resubmit.

Response Code:  331

Narrative:      Ultimate Consignee Country Unknown

Severity:        Fatal

Reason:         The Ultimate Consignee Country code reported is not valid in AES.

Resolution:  The Ultimate Consignee Country code must be a valid ISO Country code found in Appendix C – ISO Country Codes.

Verify the Ultimate Consignee Country code, correct the shipment, and resubmit.

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The Department of Commerce, the Department of Justice, the Department of State, and the Department of the Treasury

The Department Of Commerce, The Department Of Justice, The Department Of State, And The Department Of The Treasury Issued Guidance To Industry On Iran’s UAV-Related Activities

June 9, 2023: The Department of Commerce, the Department of Justice, the Department of State, and the Department of the Treasury issued guidance to industry on Iran’s UAV-Related activities. Iran’s procurement, development, and proliferation of unmanned aerial vehicles (UAVs) is an increasing threat to international peace and security. The Department of Commerce, the Department of Justice, the Department of State, and the Department of the Treasury are issuing this advisory to alert persons and businesses globally to the threat of Iran’s UAV-related activities and the need to take appropriate steps to avoid or prevent any activities that would support the further development of Iran’s UAV program.    The United States is committed to countering Iran’s UAV programs, including by preventing abuse of the U.S. financial system and disrupting the procurement of foreign-sourced components. It is critical that private industry be aware of its legal obligations vis-à-vis entities and items involved in such procurement efforts, given the potential applicability of U.S. export controls and sanctions. The intent of the advisory is to highlight effective due diligence policies, compliance structures, and internal controls relevant specifically to Iran’s UAV-related activities to ensure compliance with applicable legal requirements across the entire supply chain. The advisory is also designed to help prevent companies from contributing to Iran’s UAV programs, including via direct and indirect transfers to third-country suppliers, which may threaten the broader national and international security interests of the United States and its allies and partners.

https://ofac.treasury.gov/media/931876/download?inline

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

OFAC To Retire Its Public-Facing File Transfer Protocol (FTP) Server

June 9, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) will retire its public-facing file transfer protocol (FTP) server (ofacftp.treas.gov) on or about June 10, 2024. In order to comply with updated Treasury security policies, OFAC will retire the FTP capability associated with the file transfer protocol. OFAC is aware that many users utilize ofacftp.treas.gov to automate their sanctions list data downloads. OFAC will maintain this server for one additional calendar year to allow users sufficient time to develop automation that utilizes the list content hosted on the agency’s website at the following URLs listed below. Members of the public may contact OFAC at O_F_A_C@treasury.gov for technical support related to this decision.

https://ofac.treasury.gov/recent-actions/20230609_33

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The U.S. OFAC And UK’s OFSI Published A Joint Humanitarian Assistance And Food Security Fact Sheet 

June 28, 2023: In furtherance of the recent commitments by the United States and the United Kingdom to protect humanitarian activity from the unintended impacts of sanctions and in support of the enhanced partnership between the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) and His Majesty’s Treasury’s Office of Financial Sanctions Implementation (OFSI), OFAC and OFSI are publishing a joint Humanitarian Assistance and Food Security Fact Sheet to provide additional clarity on U.S. and UK Russia-related sanctions and the relevant authorizations, exceptions, and public guidance.

OFAC and OFSI continue to work together and with foreign partners to reduce the impacts of Russia’s war on global food supplies and prices and to address humanitarian concerns associated with sanctions.

https://ofac.treasury.gov/recent-actions/20230628 and https://ofac.treasury.gov/media/931946/download?inline

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This section of our newsletter provides information on the latest sanctions, fines, and penalties for export violations or matters of non-compliance with the ITAR or EAR issued by the US government enforcement agencies. It is provided as a service to exporters and associates of FD Associates to remind them of the importance of extreme due diligence in all international trade and export compliance matters, particularly those involving exports subject to the ITAR or the EAR. Don’t let this happen to you or your company! Call us with questions or concerns at 703-847-5801 or email info@fdassociates.net.

Sanctions

The U.S. Department of State:

June 12, 2023: 88 Fed. Reg. 38118: The U.S. Department of State has determined that the persons known as Maxamed Siidow (also known as Maxamed Siidow Sheikh Ibrahim), Cali Yare (also known as Ali Yare), Maxamed Dauud Gabaane (also known as Maxamed Daud Qaawane, Maxamed Daud, Mahamud Daud), Suleiman Cabdi Daoud (also known as Suleiman Daoud Goobe, Saleban Goobe, Saleeban Goobe), Mohamed Omar Mohamed (also known as Mohamed Omar Ma’alin, Maxamed Cumar Maxamed, Ma’d Umurow, Mohamed Omar Haji, Mohamed Haji Omar Mo’alin, Mohamed Omarow, Ibnu-Omar) are leaders of al-Shabaab, a group whose property and interests in property are currently blocked pursuant to a determination by the Secretary of State pursuant to E.O. 13224 and are designated as Specially Designated Global Terrorists.

https://www.federalregister.gov/documents/2023/06/12/2023-12419/designation-of-maxamed-siidow-cali-yare-maxamed-dauud-gaabane-suleiman-cabdi-daoud-mohamed-omar

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June 15, 2023: 88 Fed. Reg. 39323: The U.S. Department of State published a notice of ten persons statutorily debarred for having been convicted of violating, or conspiring to violate, the Arms Export Control Act (22 U.S.C. 2751, et seq.). This action, pursuant to section 127.7(b) of the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120-130), highlights the Department’s responsibility to protect the integrity of U.S. defense trade. Pursuant to section 38(g)(4) of the AECA and section 127.7(b) and (c)(1) of the ITAR, the following persons, having been convicted in a U.S. District Court, are denied export privileges and are statutorily debarred as of the date of this notice (Name; Date of Judgment; Judicial District; Case No.; Month/Year of Birth):

  • Almendarez, Maria Guadalupe; May 10, 2022; Eastern District of Arkansas; 4:19–cr–00116; December 1980.
  • Bukey, Murat; a.k.a. Bukey, Murat; a.k.a. Murat, Recep; March 22, 2023; District of Columbia; 1:18–cr–00129; January 1971.
  • Cassidy, Kevin Jerome; September 13, 2022; District of Arizona; 2:18–cr– 01236; December 1959.
  • Hamade, Usama Darwich; a.k.a. Hamade, Prince Sam; July 22, 2020; District of Minnesota; 0:15–cr–00237; December 1964.
  • Pierson, Andrew Scott; April 29, 2022; Eastern District of Arkansas; 4:19– cr–00116; May 1975.
  • Radionov, Ihor; August 27, 2021; Middle District of Florida; 8:20–cr– 00308; January 1969.
  • Sery, Joe; September 19, 2022; Southern District of California; 3:21–cr– 02898; June 1944.
  • Ugur, Arif; December 16, 2022; District of Massachusetts; 1:21–cr– 10221; January 1969.
  • Veletanlic, Hany; January 27, 2020; Western District of Washington; 2:18– cr–00162; December 1983.
  • Wu, Tian Min; a.k.a. Wu, Bob; a.k.a. Wu, David; a.k.a. Sones, Graham; a.k.a. Wang, Edward; June 9, 2021; Central District of California; 2:17–cr–00081; April 1965.

At the end of the three-year period following the date of this notice, the above-named persons remain debarred unless a request for reinstatement from statutory debarment is approved by the Department of State.

https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=440cf1841befed50d1f1ea02f54bcbcf and https://www.state.gov/u-s-department-of-state-debars-ten-persons-for-violating-or-conspiring-to-violate-the-arms-export-control-act-2/

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June 28, 2023: 88 Fed. Reg. 41997: Acting under the authority of and in accordance with section 1(a)(ii)(B) of E.O. 13224 of September 23, 2001, as amended by E.O. 13268 of July 2, 2002, E.O. 13284 of January 23, 2003, and E.O. 13886 of September 9, 2019, the Department of State determined that the persons known as Arkan Ahmad `Abbas al-Matuti (also known as Arkan Ahmad Abbas Albu-Mazida Albu-Miteuti, Arkan Ahmad `Abbas al-Mitiwiti, and Abu Sarhan) and Nawaf Ahmad Alwan al-Rashidi (also known as Qahtan Nawaf Ahmad Alwan Sada, Nawaf Ahmed Alwan, and Abu Faris) are leaders of ISIS, a group whose property and interests in property are currently blocked pursuant to a determination by the Secretary of State pursuant to E.O. 13224. Arkan Ahmad `Abbas al-Matuti and Nawaf Ahmad Alwan al-Rashidi are designated as Specially Designated Global Terrorists.

https://www.federalregister.gov/documents/2023/06/28/2023-13703/designation-of-arkan-ahmad-abbas-al-matuti-and-nawaf-ahmad-alwan-al-rashidi-as-specially-designated

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

June 6, 2023: 88 Fed. Reg. 37007: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has renewed the Order temporarily denying the export privileges of Quicksilver Manufacturing, Inc., Rapid Cut LLC, and U.S. Prototype, Inc., for an additional 180 days. OEE’s request for renewal is based upon the facts underlying the issuance of the initial TDO, as well as evidence developed over the continuing course of this investigation. The initial TDO, issued on June 7, 2022, was based on evidence that Respondents engaged in conduct prohibited by the Regulations by exporting or causing the export from the United States of technology controlled on national security and/or missile technology grounds to China for 3D printing without the required U.S. government authorization. In its November 10, 2022, request for renewal of the TDO, BIS submitted evidence that Respondents’ export compliance failures were broader in scope than the investigation initially revealed, as well as evidence related to new concerns raised by actions taken after the issuance of the June 7, 2022, TDO. Specifically, BIS’s evidence and further investigation identified additional U.S. companies that engaged in business with Respondents involving the unlicensed export of technical specifications to China related to firearm components (ECCN 0E501.a) and space-rated items (ECCN 9E515.a), both of which are controlled on national security and regional stability grounds, as well as numerous additional suspected export control-related violations between 2017 and 2022. BIS’s renewal request was also based upon concerns related to Respondents’ initial attempts at compliance following the issuance of the June 7, 2022, TDO, including the provision of potentially inaccurate information to customers about the scope of items subject to the Regulations. In its November 10, 2022, BIS also submitted evidence that a China-based individual, known to operate an @rapidcut.com email address to facilitate Rapid Cut’s business operations, may have violated the TDO shortly after its issuance by providing customer information on how to complete and fulfill pending orders, despite the issuance of the TDO. Such information included instructions to cancel existing Rapid Cut orders and reissue purchase orders to China Company No. 1 in an apparent attempt to avoid the restrictions of the TDO. The May 10, 2023, request for renewal of the December 5, 2022, TDO is also based on evidence related to the nature and scope of BIS’ continuing investigation. This includes the circumstances surrounding the access by China-based employees to Respondents’ email accounts, as detailed above, which remain under investigation. The renewal request is also based on evidence provided by additional U.S. companies that engaged in business with Respondents involving the unlicensed export of technical specifications to China, including information received as recently as April 2023. In sum, and as detailed in the renewal request, BIS’ investigation is ongoing, the entirety of Respondent’s misconduct remains unknown, and a final written disclosure of prior violations has not yet been submitted.

https://www.federalregister.gov/documents/2023/06/06/2023-12067/quicksilver-manufacturing-inc-8209-market-st-a173-wilmington-nc-28411-rapid-cut-llc-8209-market-st

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June 7, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has renewed the Order temporarily denying the export privileges of Belavia Belarusian Airlines for an additional 180 days.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1523-e2861/file

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June 9, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued an Order denying the export privileges of Thomas Harris on March 1, 2022, for ten years until March 1, 2032. Harris was convicted of violating 18 U.S.C. § 554(a) for smuggling and attempting to smuggle 14 firearms from the United States to Saint Lucia. As a result of his conviction, the Court sentenced Harris to 46 months of confinement, three years of supervised release, and a $1,500 assessment.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1525-e2863/file

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June 12, 2023: 88 Fed. Reg. 38739: The Department of Commerce amended the Export Administration Regulations (EAR) by adding 43 entities under 50 entries to the Entity List. These entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. These entries are listed on the Entity List under the destinations of China (31), Kenya (1), Laos (1), Malaysia (1), Pakistan (4), Singapore (1), South Africa (3), Thailand (1), the United Arab Emirates (5), and the United Kingdom (2). This rule also removes one entity from the Entity List under the destination of Latvia.

China:

  • Aviation Industry Corporation of China 612 Institute;
  • Aviation International Corporation of China International Simulation Technology Service Co., Ltd.;
  • Beijing China Aviation Technology Co., Ltd.;
  • Beijing Iwintall Technology Co. Ltd.;
  • Beijing Luo Luo Technology Development Co., Ltd.;
  • Beijing Ryan Wende Science and Technology Co., Ltd.;
  • Beijing Transemic Information Technology Ltd.;
  • Beijing Transemic Technology Ltd.;
  • Belt Consulting Co., Ltd.;
  • Changzhou Utek Composite Co., Ltd.;
  • Chengdu Poyotencon Technology;
  • China Taly Aviation Technologies Corporation;
  • Chinese Flight Test Establishment;
  • Enhance International Trade Limited;
  • Frontier Services Group Limited;
  • General Technology Limited;
  • Luoyang Institute of Science and Technology;
  • New Faith Enterprise Investment Limited;
  • Opturn Co., Ltd.;
  • Pera Global;
  • Qianpu Technology Co., Ltd.;
  • Shanghai Aerospace Science and Technology Development Co., Ltd.;
  • Shanghai Breeze Technology Co., Ltd.;
  • Shanghai Breeze Technology Jiangsu Co., Ltd.;
  • Shanghai Shark Sprite Technology Co., Ltd.;
  • Shanghai Supercomputing Technology Co., Ltd.;
  • The Test Flying Academy of South Africa;
  • Tiger Force Electronics Limited;
  • United Vision Limited;
  • Universal Enterprise Limited; and
  • Xinjiang Kehua Hechang Biological Science and Technology Co., Ltd.

Kenya:

  • Frontier Services Group Limited.

Laos:

  • Frontier Services Group Limited.

Malaysia:

  • International Aerospace Asia.

Pakistan:

  • Affiliates International;
  • Akhtar and Sons Private Limited;
  • Imminent Engineering Co., Ltd.; and
  • Quantum Logix (Private) Limited.

Singapore:

  • International Aerospace Asia.

South Africa:

  • AVIC International Flight Training Academy;
  • Pearl Coral 1173 CC; and
  • The Test Flying Academy of South Africa.

Thailand:

  • International Aerospace Asia.

United Arab Emirates:

  • Frontier Services Group Limited;
  • TFASA Group FZCO;
  • TFASA Group Training;
  • TFASA Services FZCO; and
  • TFASA Training Limited.

United Kingdom

  • TFASA Group Limited; and
  • International Aerospace Asia.

Removal From the Entity List

The End-User Review Committee determined to remove Fiber Optic Solutions from the Entity List. This is based on information that BIS received pursuant to § 744.16(e) of the EAR and the review that the ERC conducted in accordance with procedures described in supplement no. 5 to part 744 of the EAR. Prior to removal from the Entity List by this rule, Fiber Optic Solutions was listed under Latvia.

https://www.federalregister.gov/documents/2023/06/14/2023-12726/additions-of-entities-to-the-entity-list-and-removal-of-entity-from-the-entity-list

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June 15, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has renewed for 180 days Temporary Denial Orders (TDOs) against the following three Russian airlines for violations of license requirements it imposed in response to Russia’s invasion of Ukraine effective March 2, 2022, on any U.S.-origin aircraft or foreign aircraft that includes more than 25% controlled U.S.-origin content, and that is registered in, owned, or controlled by, or under charter or lease by Russia or a national of Russia, before such aircraft can travel to Russia:

  • Pobeda Airlines;
  • Nordwind Airlines and Pegas Touristik, a/k/a Pegas Touristik OOO;
  • Siberian Airlines d/b/a S7 Airlines.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1533-e2871/file and https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1534-e2872/file and https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1535-e2873/file

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June 21, 2023: 88 Fed. Reg. 40084: The Department of Commerce is amending the Export Administration Regulations (EAR) by adding an inadvertently omitted entity to the Entity List. This correcting amendment is effective June 16, 2023.

China:

  • China Aviation Development Harbin Bearing Co., Ltd.

https://www.federalregister.gov/documents/2023/06/21/2023-13196/additions-of-entities-to-the-entity-list-and-removal-of-entity-from-the-entity-list-correction

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

BIS Removed Pegas Touristik from the Temporary Denial Order

June 28, 2023: The Department of Commerce, Bureau of Industry and Security removed Pegas Touristik from the Temporary Denial Order of Nordwin.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1536-e2874/file

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

June 1, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Sudan General License Number 1, “Official Business of Certain International Organizations and Entities;” Sudan General License Number 2, “Certain Transactions in Support of Nongovernmental Organizations’ Activities;” Sudan General License Number 3 “Transactions Related to the Provision of Agricultural Commodities, Medicine, Medical Devices, Replacement Parts and Components, or Software Updates, and the Extraction, Processing, Transport, Sale, or Distribution of Water in Sudan;” and Sudan General License Number 4 “Authorizing the Wind Down of Transactions Involving Defense Industries System or Al Junaid Multi Activities Co Ltd.”

Sudan General License Number 1: All transactions prohibited by Executive Order (E.O.) 14098 that are for the conduct of the official business of the following entities by employees, grantees, or contractors thereof are authorized:   

(1) The International Centre for Settlement of Investment Disputes (ICSID) and the Multilateral Investment Guarantee Agency (MIGA);

(2) The African Development Bank Group, the Asian Development Bank, the European Bank for Reconstruction and Development, and the Inter-American Development Bank Group (IDB Group), including any fund entity administered or established by any of the foregoing;

(3) The International Committee of the Red Cross and the International Federation of Red Cross and Red Crescent Societies;   

(4) The Global Fund to Fight AIDS, Tuberculosis, and Malaria, and Gavi, the Vaccine Alliance;   

(5) The African Union, including the African Union Commission and other subsidiary bodies and organs; and

(6) The Intergovernmental Authority on Development (IGAD).

This general license does not authorize funds transfers initiated or processed with knowledge or reason to know that the intended beneficiary of such transfers is a person blocked pursuant to E.O. 14098 other than for the purpose of effecting the payment of taxes, fees, or import duties, or the purchase or receipt of permits, licenses, or public utility services.

https://ofac.treasury.gov/media/931821/download?inline

Sudan General License Number 2: All transactions prohibited by Executive Order (E.O.) 14098 that are ordinarily incident and necessary to the activities described below by nongovernmental organizations are authorized, provided that the nongovernmental organization is not a person whose property or interests in property are blocked pursuant to E.O. 14098.

The activities referenced above are non-commercial activities designed to directly benefit the civilian population that fall into one of the following categories:

(1) Activities to support humanitarian projects to meet basic human needs, including disaster, drought, and flood relief; food, nutrition, or medicine distribution; the provision of health services; assistance for vulnerable or displaced populations, including individuals with disabilities and the elderly; and environmental programs;

(2) Activities to support democracy building, including activities to support the rule of law, citizen participation, government accountability and transparency, human rights, and fundamental freedoms, access to information, and civil society development projects;

(3) Activities to support education, including combating illiteracy, increasing access to education, international exchanges, and assisting education reform projects;

(4) Activities to support non-commercial development projects directly benefitting civilians, including those related to health, food security, and water and sanitation;

(5) Activities to support environmental and natural resource protection, including the preservation and protection of threatened or endangered species, responsible and transparent management of natural resources, and the remediation of pollution or other environmental damage; and

(6) Activities to support disarmament, demobilization, and reintegration (DDR) programs and peacebuilding, conflict prevention, and conflict resolution programs.    

This general license does not authorize funds transfers initiated or processed with knowledge or reason to know that the intended beneficiary of such transfers is a person blocked pursuant to E.O. 14098 other than for the purpose of effecting the payment of taxes, fees, or import duties, or the purchase or receipt of permits, licenses, or public utility services.

Specific licenses may be issued on a case-by-case basis to authorize nongovernmental or other entities to engage in other activities designed to directly benefit the civilian population, including support for the removal of landmines and economic development projects directly benefiting the civilian population.

https://ofac.treasury.gov/media/931826/download?inline

Sudan General License Number 3: All transactions prohibited by Executive Order (E.O.) 14098 of May 4, 2023, that are related to the provision of agricultural commodities, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices to Sudan or to persons in third countries purchasing specifically for resale to Sudan, are authorized.

All transactions prohibited by E.O. 14098 that are related to the extraction, processing, transport, sale, or distribution of water, including the maintenance or repair of water pipelines, are authorized.   

For the purposes of this general license, agricultural commodities, medicine, and medical devices are defined as follows:   

(1) Agricultural commodities. Agricultural commodities are products:   

(i) That fall within the term “agricultural commodity” as defined in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602); and    

(ii) That are intended for ultimate use in Sudan as (A) Food for humans (including raw, processed, and packaged foods; live animals; vitamins and minerals; food additives or supplements; and bottled drinking water) or animals (including animal feeds);   (B) Seeds for food crops; (C) Fertilizers or organic fertilizers; or (D) Reproductive materials (such as live animals, fertilized eggs, embryos, and semen) for the production of food animals.    

(2) Medicine. Medicine is an item that falls within the definition of the term “drug” in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).   

(3) Medical devices. A medical device is an item that falls within the definition of “device” in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).

https://ofac.treasury.gov/media/931831/download?inline

Sudan General License Number 4: All transactions prohibited by Executive Order (E.O.) 14098 that are ordinarily incident and necessary to the wind-down of any transaction involving Defense Industries System, Al Junaid Multi Activities Co Ltd, or any entity in which Defense Industries System or Al Junaid Multi Activities Co Ltd owns, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern daylight time, July 31, 2023, provided that any payment to a blocked person must be made into a blocked account and reported to the Office of Foreign Assets Control consistent with § 501.603 of the Reporting, Procedures and Penalties Regulations, 31 CFR part 501.

This general license does not authorize any transactions otherwise prohibited by E.O. 14098, including transactions involving any person blocked pursuant to E.O. 14098 other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.

https://ofac.treasury.gov/media/931836/download?inline

OFAC also designated members and affiliates of Iran’s Islamic Revolutionary Guard Corps (IRGC) and its external operations arm, the IRGC-Qods Force (IRGC-QF), who have participated in a series of terrorist plots including assassination plots targeting former United States government officials, dual U.S. and Iranian nationals, and Iranian dissidents. This action targets three Iran- and Türkiye-based individuals and a company affiliated with the IRGC-QF, along with two senior officials of the IRGC’s Intelligence Organization (IRGC-IO), who have been involved in plotting external lethal operations against civilians, including journalists and activists.

OFAC also designated four companies generating revenue from, and contributing to, the conflict in Sudan. The entities designated are affiliated with the two embattled forces that are fueling the ongoing conflict in Sudan: two companies affiliated with the paramilitary Rapid Support Forces (RSF) and two companies affiliated with the Sudanese Armed Forces (SAF).

In addition, the following changes have been made to OFAC’s list of Specially Designated Nationals:

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

  • Hossein Hafez Amini of Iran
  • Mohammad Reza Ansari of Iran
  • Rouhollah Bazghandi of Iran
  • Shahram Poursafi of Syria
  • Reza Seraj of Iran

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

  • Al Junaid Multi Activities Co Ltd of Sudan
  • Defense Industries System of Sudan
  • Rey Havacilik Ithalat Ihracat Sanayi Ve Ticaret Anonim Sirketi, of Turkey
  • Sudan Master Technology of Sudan
  • Tradive General Trading L.L.C of The U.A.E.

The following deletions have been made to OFAC’s SDN List:

  • Alfa Nero (ZCTL4) Yacht 2,159GRT Cayman Islands flag of Russia

Counter Terrorism Designations; Sudan Designations; Russia-related Designation Removal; Issuance of Sudan General Licenses | Office of Foreign Assets Control (treasury.gov) 

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June 2, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Iran-related General License P “Authorizing the Wind Down of Transactions Involving Navyan Abr Arvan Private Limited Company or Arvancloud Global Technologies L.L.C.”

In addition, the following changes have been made to OFAC’s list of Specially Designated Nationals:

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

  • Farhad Fatemi of Iran.
  • Pouya Pirhosseinloo of Iran

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

  • Arvancloud Global Technologies L.L.C. of The United Arab Emirates
  • Navyan Abr Arvan Private Limited Company of Iran

Iran-related Designations; Issuance of Iran-related General License | Office of Foreign Assets Control (treasury.gov)

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June 5, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) published four general licenses (GLs) issued pursuant to the Russian Harmful Foreign Activities Sanctions Regulations: GLs 13E, 66, 67, and 68, each of which was previously made available on OFAC’s website.

Federal Register:: Publication of Russian Harmful Foreign Activities Sanctions Regulations Web General Licenses 13E, 66, 67, and 68

June 5, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) published one Russian Harmful Foreign Activities Sanctions directive in the Federal Register. The directive, issued pursuant to an April 15, 2021, Executive Order, was previously made available on OFAC’s website.

Federal Register:: Publication of Directive 4 (as Amended) Under Executive Order 14024 of April 15, 2021

June 5, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated seven leading members of a Russian intelligence-linked malign influence group for their role in the government of the Russian Federation’s destabilization campaign and continued malign influence campaigns in Moldova. An entity owned or controlled by one of these individuals has also been designated.

These designations are part of an ongoing effort to combat Russia’s malign influence in Moldova. The U.S. government has previously exposed Russia’s attempts to use covert operatives to subvert democracy in Moldova. On October 26, 2022, OFAC sanctioned Yuriy Igorevich Gudilin, Olga Yurievna Grak, and Leonid Mikhailovich Gonin for their coordinated efforts in 2020 and 2021 to influence the outcome of Moldova’s elections. Additionally, on May 30, 2023, the EU sanctioned several Russian and Moldovan individuals for engaging in destabilizing activities against the government of Moldova. The U.S. government will continue to support the Moldovan government and people in their efforts to combat coercive activities that undermine democracy in Moldova.

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

  • Boyko, Svetlana Andreyevna of Russia;
  • Gromovikov, Vasiliy Viktorovich of Russia;
  • Khloponin, Gleb Maksimovich of Russia;
  • Losev, Aleksey Vyacheslavovich of Russia;
  • Makolov, Yury Yuryevich of Russia;
  • Sapozhnikov, Konstantin Prokopyevich of Russia; and
  • Travnikova, Anna of Russia.

The following entity has been added to OFAC’s SDN List:

  • Perko Julleuchter of Russia.

https://home.treasury.gov/news/press-releases/jy1522 and https://ofac.treasury.gov/recent-actions/20230605

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June 6, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two senior members of the Cartel de Jalisco Nueva Generacion (CJNG) engaged in trafficking high-caliber firearms from the United States and fuel theft in Mexico. Additionally, OFAC designated another individual and one Mexican entity that provide support to CJNG by laundering illicit narcotics proceeds. CJNG is a violent Mexico-based drug trafficking organization responsible for a significant proportion of fentanyl, and other deadly drugs trafficked into the United States.

OFAC also sanctioned a network of seven individuals and six entities in Iran, the People’s Republic of China (PRC), and Hong Kong in connection with Iran’s ballistic missile program. This network has conducted financial transactions and facilitated procurement of sensitive and critical parts and technology for key actors in Iran’s ballistic missile development, including Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) and its affiliated organizations, Parchin Chemicals Industries (PCI), Aerospace Industries Organization (AIO), Iran Electronics Industries (IEI), and P.B. Sadr, which is PCI’s key intermediary for the procurement of parts to develop missile propellant. PCI, the main beneficiary of this network, is a subsidiary of MODAFL’s Defense Industries Organization (DIO) and produces ammunition, explosives, and solid propellants for rockets and missiles. OFAC is also designating Iran’s Defense Attaché in Beijing, which has coordinated military-related procurements from the PRC for Iranian end-users, including MODAFL subsidiaries.

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

  • Damghani, Davoud of China and Iran;
  • Gong, Jiao of China;
  • Guerrero Covarrubias, Alonso of Mexico;
  • Guerrero Covarrubias, Javier of Mexico;
  • Haghighat, Ghasem of China and Iran;
  • Li, Zeming, Zhejiang of China;
  • Qin, Xutong, Ji Lin of China;
  • Rodriguez Aguirre, Mary Cruz of Mexico;
  • Shen, Weisheng, Zhejiang of China; and
  • Wei, Zunyi of China.

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

  • Beijing Shiny Nights Technology Development CO., LTD, of China;
  • Blue Calm Marine Services Company of Iran;
  • Hong Kong Ke.Do International Trade CO., LIMITED of China;
  • Lingoe Process Engineering Limited of China;
  • Nacer Agencia Panamericana De Divisas Y Centro Cambiario, S.A. DE C.V., of Mexico;
  • Qingdao Zhongrongtong Trade Development CO., LTD. of China; and
  • Zhejiang Qingji Ind. CO., LTD of China.

https://home.treasury.gov/news/press-releases/jy1523 and https://home.treasury.gov/news/press-releases/jy1524 and https://ofac.treasury.gov/recent-actions/20230606

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June 8, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Counter Terrorism Designations, Iran-related Designations Updates, and a Non-Proliferation Designation Update.

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

  • Al-Mainuki, Abu Bakr ibn Muhammad ibn ‘Ali of Nigeria; and
  • Al-Rufay’i, Abdallah Makki Muslih of Iraq.

https://ofac.treasury.gov/recent-actions/20230608

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June 14, 2023: The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) is publishing a Fact Sheet on the “Provision of Humanitarian Assistance and Trade to Combat COVID-19.”  OFAC is also issuing Iran-related General License N-2Venezuela-related GL 39BSyria GL 21B, and amending several FAQs.

The United States is committed to ensuring that humanitarian assistance continues to reach at-risk populations through legitimate and transparent channels as countries across the globe fight the Coronavirus Disease 2019 (COVID-19). The sanctions programs administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) generally allow for legitimate humanitarian-related trade, assistance, or activity under existing laws and regulations. OFAC encourages those interested in providing such COVID-19-related assistance to avail themselves of longstanding exemptions, exceptions, and authorizations pertaining to humanitarian assistance and trade available in many U.S. sanctions programs. In the event that individuals, governments, or entities facing sanctions-related challenges have questions related to the provision of humanitarian assistance to sanctioned countries, or believe additional authorizations are needed, OFAC stands ready to provide guidance and respond to applications for specific licenses. This Fact Sheet provides consolidated guidance highlighting the most relevant exemptions, exceptions, and authorizations for humanitarian assistance and trade under the OFAC-administered Iran, Venezuela, North Korea, Syria, Cuba, and Russia-related sanctions programs.

https://ofac.treasury.gov/media/931896/download?inline

Iran-related General License N-2: Authorized certain COVID-19-related transactions prohibited by the Iranian Transactions and Sanctions Regulations. The following transactions and activities that are prohibited by the Iranian Transactions and Sanctions Regulations, 31 CFR part 560 (ITSR), are authorized through 12:01 a.m. eastern daylight time, June 14, 2024:

(1) Exportation of goods or technology. All transactions and activities related to the exportation, reexportation, sale, or supply, directly or indirectly, of goods or technology for use in connection with the prevention, diagnosis, or treatment of COVID-19 (including research or clinical studies related to COVID-19) to Iran or the Government of Iran, or to persons in third countries purchasing specifically for resale to Iran or the Government of Iran;

(2) Importation of or dealings in certain COVID-19-related goods. All transactions and activities related to the importation into the United States of, or dealings in or related to, goods that previously were exported or reexported to Iran or the Government of Iran pursuant to this general license and that are broken, defective, or non-operational, or are connected to product recalls, adverse events, or other safety concerns, or for routine maintenance or the permanent return of such items to the United States or a third country; and

(3) Exportation or importation of services. All transactions and activities related to the exportation, reexportation, sale, or supply, directly or indirectly, of services to Iran or the Government of Iran, or the importation into the United States of, or dealings in or related to Iranian-origin services, in each case that are related to the prevention, diagnosis, or treatment of COVID-19 (including research or clinical studies relating to COVID-19).

https://ofac.treasury.gov/media/931881/download?inline

Venezuela-related General License 39B: All transactions and activities involving the Government of Venezuela that are related to the prevention, diagnosis, or treatment of COVID-19 (including research or clinical studies relating to COVID-19) that are prohibited by Executive Order (E.O.) 13808 of August 27, 2017, as amended by E.O. 13857 of January 25, 2019, or E.O. 13884 of August 5, 2019, each as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized through 12:01 a.m. eastern daylight time, June 14, 2024.

Authorized certain COVID-19-related transactions involving certain banks. All transactions and activities described above involving Banco Central de Venezuela (BCV), Banco de Venezuela, S.A. Banco Universal (Banco de Venezuela), Banco Bicentenario del Pueblo, de la Clase Obrera, Mujer y Comunas, Banco Universal C.A. (Banco Bicentenario del Pueblo), or any entity in which BCV, Banco de Venezuela or Banco Bicentenario del Pueblo owns, whether individually or in the aggregate, directly or indirectly, a 50 percent or greater interest, that are prohibited by E.O. 13850 of November 1, 2018, as amended by E.O. 13857, each as incorporated into the VSR, are authorized through 12:01 a.m. eastern daylight time, June 14, 2024.

https://ofac.treasury.gov/media/931886/download?inline

Syria General license 21B:  Authorized certain COVID-19-related transactions prohibited by the Syrian Sanctions Regulations. The following transactions and activities that are prohibited by the Syrian Sanctions Regulations, 31 CFR part 542 (SySR), are authorized through 12:01 a.m. Eastern daylight time, June 14, 2024:

(1) Exportation of services related to COVID-19. All transactions and activities related to the exportation, reexportation, sale, or supply, directly or indirectly, of services to Syria that are related to the prevention, diagnosis, or treatment of COVID-19 (including research or clinical studies relating to COVID-19); and

(2) COVID-19-related transactions involving certain blocked persons. All transactions and activities involving the Government of Syria, Polymedics LLC, Letia Company, or any entity in which Polymedics LLC or Letia Company owns, whether individually or in the aggregate, directly or indirectly, a 50 percent or greater interest, that are related to the prevention, diagnosis, or treatment of COVID-19 (including research or clinical studies relating to COVID-19), provided that any exportation or reexportation of items to Syria must be licensed or otherwise authorized by the Department of Commerce.

https://ofac.treasury.gov/media/931891/download?inline

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June 15, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two Democratic People’s Republic of Korea (DPRK) nationals involved in the procurement of equipment and materials that support the DPRK ballistic missile program. The DPRK continues to utilize a network of representatives in foreign countries, including the People’s Republic of China (PRC) and Iran, to illicitly import restricted components necessary to conduct research and development of its unlawful weapons of mass destruction (WMD) and ballistic missile programs, in violation of multiple UN Security Council resolutions.

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

  • Choe, Chol Min of North Korea; and
  • Choe, Un Jong of North Korea.

https://home.treasury.gov/news/press-releases/jy1539 and https://ofac.treasury.gov/recent-actions/20230615

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June 16, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on the Hernandez Salas transnational criminal organization (TCO), a human smuggling organization based in Mexicali, Mexico, as well as several members and entities in its support network. The practice of human smuggling and the facilitation of fraudulent documentation undermines the U.S. asylum system, damaging public confidence in the vetting process and jeopardizing access to protection for vulnerable persons fleeing conflict, famine, and persecution. Often, migrants encounter violence in each territory they cross on their journey toward the United States and may even end up victims of human trafficking. This action continues the Biden-Harris administration’s whole-of-government effort to confront human smuggling on the southern border of the United States.

According to U.S. Immigration and Customs Enforcement, TCOs earn billions of dollars from human smuggling. Most individuals attempting to enter the United States covertly seek assistance organizing transport across the border; smuggling organizations, often associated with other TCOs, take advantage of those individuals by providing services at a significant cost.

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

  • Chavez Tamayo, Jesus Gerardo of Mexico;
  • Hernandez Salas, Ofelia of Mexico;
  • Hernandez Sanchez, Federico of Mexico;
  • Maldonado Lopez, Fatima del Rocio of Mexico; and
  • Saucedo Huipio, Raul of Mexico.

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

  • Hernandez Salas Transnational Criminal Organization of Mexico;
  • Hotel Plaza of Mexico; and
  • Hotelera Lopez Mateos S.A. DE C.V. of Mexico.

https://home.treasury.gov/news/press-releases/jy1545 and https://ofac.treasury.gov/recent-actions/20230616

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June 21, 2023:  the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Burma’s Ministry of Defense and two regime-controlled financial institutions that facilitate much of the foreign currency exchange within Burma and enable transactions between the military regime and foreign markets, including for the purchase and import of arms and related materiel.

OFAC also issued the Burma-related General License 5, “Authorizing the Wind Down of Transactions Involving Myanma Investment and Commercial Bank or Myanma Foreign Trade Bank.”

Burma-related General License 5: All transactions prohibited by Executive Order 14014 that are ordinarily incident and necessary to the wind-down of transactions involving Myanma Investment and Commercial Bank (MICB), Myanma Foreign Trade Bank (MFTB), or any entity in which MICB or MFTB owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern daylight time, August 5, 2023, provided that any payment to a blocked person must be made into a blocked account in accordance with the Burma Sanctions Regulations, 31 CFR part 525 (BuSR).

This general license does not authorize any transactions otherwise prohibited by the BuSR, including transactions involving any person blocked pursuant to the BuSR other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.   

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

  • Ministry Of Defense Of Burma;
  • Myanma Foreign Trade Bank; and
  • Myanma Investment And Commercial Bank.

https://home.treasury.gov/news/press-releases/jy1555 and https://ofac.treasury.gov/media/931936/download?inline and https://ofac.treasury.gov/recent-actions/20230621

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June 23, 2023:  The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two Russian Federal Security Service (FSB) officers recently indicted by the Department of Justice who played a significant role in the Kremlin’s attempts to conduct global malign influence operations, including efforts to influence a local election in the United States.

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

  • Popov, Yegor Sergeyevich of Russia; and
  • Sukhodolov, Aleksei Borisovich of Russia.

https://home.treasury.gov/news/press-releases/jy1572 and https://ofac.treasury.gov/recent-actions/20230623

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June 27, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned four companies and one individual connected to the violent Russian military group PMC Wagner (Wagner Group) and its founder and owner Yevgeniy Prigozhin, previously sanctioned by the United States, the European Union (EU), Canada, and the United Kingdom (U.K.). The Wagner Group exploits insecurity around the world, committing atrocities and criminal acts that threaten the safety, good governance, prosperity, and human rights of nations, as well as exploiting their natural resources. The targeted entities in the Central African Republic (CAR), United Arab Emirates (UAE), and Russia have engaged in illicit gold dealings to fund the Wagner Group to sustain and expand its armed forces, including in Ukraine and Africa, while the targeted individual has been central to activities of Wagner Group units in Mali.

The following individual has been added to OFAC’s SDN List:

  • Ivanov, Nikolayevich Andrey of Russia.

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

  • Diamville SAU of the Central African Republic;
  • Industrial Resources General Trading of the United Arab Emirates;
  • Limited Liability Company DM of Russia; and
  • Midas Ressources SARLU of the Central African Republic.

OFAC also published an Africa Gold Advisory.

https://home.treasury.gov/news/press-releases/jy1581 and https://ofac.treasury.gov/recent-actions/20230627_33 and https://ofac.treasury.gov/media/931956/download?inline

U.S. Department of Homeland Security

June 12, 2023: 88 Fed. Reg. 38080:  The U.S. Department of Homeland Security (DHS), as the Chair of the Forced Labor Enforcement Task Force (FLETF), announces the publication and availability of the updated Uyghur Forced Labor Prevention Act (UFLPA) Entity List, a consolidated register of the four lists required to be developed and maintained pursuant to the UFLPA, on the DHS UFLPA website. The updated UFLPA Entity List is also published as an appendix to this notice. This update adds two entities and eight subsidiaries to the UFLPA Entity List for working with the government of Xinjiang to recruit, transport, transfer, harbor, or receive forced labor or Uyghurs, Kazakhs, Kyrgyz, or members of other persecuted groups out of Xinjiang.

https://www.federalregister.gov/documents/2023/06/12/2023-12481/notice-regarding-the-uyghur-forced-labor-prevention-act-entity-list

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Fines and Penalties

June 3, 2023: The U.S. Department of State has concluded an administrative settlement with VTA Telecom Corporation to resolve six violations of the Arms Export Control Act (AECA), 22 U.S.C. § 2751 et seq., and the International Traffic in Arms Regulations (ITAR), 22 C.F.R. Parts 120-130. The Department of State and VTA Telecom Corporation reached this settlement following an extensive compliance review by the Office of Defense Trade Controls Compliance in the Department’s Bureau of Political-Military Affairs.

The administrative settlement between the Department of State and VTA Telecom Corporation, concluded pursuant to ITAR § 128.11, addresses unauthorized exports and attempted exports of ITAR-controlled defense articles, including hobby rocket motors, video trackers, including related technical data, and a gas turbine engine controlled under U.S. Munitions List Categories IV(d)(7), IV(h), IV(h)(11), XII(a), and XIX(c) to Vietnam, a proscribed country for exports and temporary imports of defense articles and defense services, by 22 CFR § 126.1 at the time of the violations.

The settlement demonstrates the Department’s role in furthering world peace and the security and foreign policy of the United States by controlling the export of defense articles. The settlement also highlights the importance of exporting defense articles only pursuant to appropriate authorization from the Department.

Under the terms of the Consent Agreement, VTA Telecom Corporation will be administratively debarred and thereby prohibited from participating directly or indirectly in any activities subject to the ITAR for three years.

https://www.state.gov/u-s-department-of-state-concludes-settlement-resolving-export-violations-by-vta-telecom-corporation/ and https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=99e327b21b4ba990d1f1ea02f54bcb8d and https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=15e363b21b4ba990d1f1ea02f54bcb09 and https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=99e327b21b4ba990d1f1ea02f54bcb8b

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June 7, 2023: A federal judge sentenced Miguel Armando Castro, of Phoenix, to 51 months in prison, followed by supervised release for attempting to smuggle firearms and ammunition into Mexico. The judge also ordered him to pay a $100 special assessment. Castro pleaded guilty to smuggling goods from the United States following a Homeland Security Investigations (HSI) probe. On Jan. 19, 2022, Castro attempted to exit the United States into Mexico in a vehicle lane at the Mariposa Port of Entry in Nogales. Castro was the driver and sole occupant of a Chevrolet Silverado pickup truck. U.S. Customs and Border Protection officials had received alerts on the Silverado and Castro related to a prior ammunition smuggling incident. Upon initial inspection of the Silverado, officers found a bag on the front seat containing a loaded .22-caliber revolver. While inspecting the vehicle, they found two high-capacity Glock firearm magazines, four regular-capacity Glock firearm magazines, and one .22-caliber Walther firearm magazine. The firearm, ammunition, and magazines Castro intended to export to Mexico are designated on the U.S. Commerce Control List as prohibited for export from the United States into Mexico without a valid license. Castro did not have a license or any other lawful authority to export any of the items from the United States into Mexico.

https://www.ice.gov/news/releases/hsi-nogales-investigation-sends-firearms-and-ammunition-smuggler-prison-51-months

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June 8, 2023: Eric Nana Kofi Ampong Coker, age 41, of Columbia, Maryland, pleaded guilty to the illegal export of firearms to Ghana. According to his guilty plea, since 2017, Ampong Coker has purchased at least 81 firearms from three separate Maryland Federal Firearms Licensees (“FFLs”) and, in 2019, received Regulated Firearms Collector status through the Maryland State Police, which waived the restriction on the number of firearms he could purchase during a 30-day period.

https://www.justice.gov/usao-md/pr/columbia-man-pleads-guilty-illegally-exporting-firearms-ghana

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June 9, 2023: the Department of Commerce, Bureau of Industry and Security (BIS), issued a Temporary Denial Order (TDO) suspending the export privileges of the Aratos Group, a network of defense-related companies in the Netherlands and Greece, and its president, Nikolaos Bogonikolos. These actions are related to a May 22, 2023, criminal indictment issued in the Eastern District of New York and are the result of coordination by the Disruptive Technology Strike Force co-led by the Departments of Justice and Commerce. While Bogonikolos remains in custody, this action builds on the indictment by severing his company, Aratos Group, from access to U.S.-origin items and technologies. The TDO also renews the denial of export privileges against three persons – Boris Livshits, Svetlana Skvortsova, and Aleksey Ippolitov – and two companies – Advanced Web Services and Strandway, LLC – for the unauthorized export of sensitive items subject to the Export Administration Regulations (EAR) to Russia.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3285-2023-06-09-bis-press-release-aratos-tdo-final/file and https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1524-e2862/file

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June 10, 2023: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Samet Doyduk for seven years until July 12, 2029. On July 12, 2022, Doyduk was convicted of violating 18 U.S.C. § 371 for conspiring to export firearm parts purchased in the United States to be shipped to Turkey and the Republic of Georgia. As a result of his conviction, the Court sentenced Doyduk to 15 months of imprisonment, three years of supervised release, and a $100 special assessment.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1526-e2864/file

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June 10, 2023: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Shaohua “Eric” Wang for ten years until February 2, 2030. On February 3, 2020, Wang was convicted of violating 18 U.S.C. § 371 for conspiring to willfully export from the United States to China, controlled military equipment and supplies for profit without the required licenses. As a result of his conviction, the Court sentenced Wang to 46 months of confinement, three years of supervised release, a $200 special assessment, and a $25,000 criminal fine.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1527-e2865/file

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June 10, 2023: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Jorge Jesus Sigala for five years until April 22, 2026. On April 22, 2021, Sigala was convicted of violating 18 U.S.C. § 554(a) for smuggling from the United States to Mexico various pistols. As a result of his conviction, the Court sentenced Sigala to 12 months and one day of confinement, three years of supervised release, and a $100 special assessment.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1528-e2866/file

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June 10, 2023: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Eli Espinoza for ten years until December 14, 2030. On December 14, 2020, Espinoza was convicted of violating 18 U.S.C. § 554(a) for smuggling and attempting to smuggle from the United States to Mexico firearms components to include, front trunnion, AK bolt body, upper hand guard and gad tube, rear sight block, recoil spring rear guide, dust cover, trigger for semi-automatic rifle, bolt carrier assembly, and bolt catch, without a license or written approval from the US Department of Commerce. As a result of his conviction, the Court sentenced Espinoza to 63 months of confinement, three years of supervised release, and a $100 assessment.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1530-e2868/file

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June 10, 2023: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Khalid Jarrah for ten years until August 11, 2031. On August 11, 2021, Jarrah was convicted of violating 18 U.S.C. § 371 for conspiring to knowingly, intentionally, and willfully engage in the business of dealing firearms without a license. As a result of his conviction, the Court sentenced Jarrah to 15 months of confinement, three years of supervised release, and a $100 assessment.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1531-e2869/file

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June 10, 2023: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Patrick Lee Sousa for ten years until October 29, 2031. On October 29, 2021, Sousa was convicted of violating 18 U.S.C. § 371 for conspiring to knowingly, intentionally, and willfully engage in the business of dealing firearms without a license. As a result of his conviction, the Court sentenced Sousa to 57 months of confinement, three years of supervised release, and a $300 assessment.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1532-e2870/file

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June 20, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with Swedbank AS (Latvia) (“Swedbank Latvia”), a subsidiary of Swedbank AB (publ), headquartered in Stockholm, Sweden. Swedbank Latvia has agreed to remit $3,430,900 to settle its potential civil liability for 386 apparent violations of OFAC’s Crimea sanctions. Throughout 2015 and 2016, a customer of Swedbank Latvia used Swedbank Latvia’s e-banking platform from an internet protocol address in Crimea to send payments to persons in Crimea through U.S. correspondent banks. The settlement amount reflects OFAC’s determination that Swedbank Latvia’s apparent violations were not voluntarily self-disclosed and were non-egregious.

https://ofac.treasury.gov/recent-actions/20230620_33 and https://ofac.treasury.gov/media/931911/download?inline 

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June 20, 2023: Following the International Day for the Elimination of Sexual Violence in Conflict, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two South Sudanese individuals involved in conflict-related sexual violence (CRSV) in South Sudan. The two individuals designated have abused their positions of political and military authority to carry out acts of sexual violence against citizens of South Sudan. These designations, along with sanctions on ISIS leaders by the U.S. Department of State, represent the first time that a dedicated focus on conflict-related sexual violence —consistent with the Presidential Memorandum signed by President Biden in November 2022 —has led to the imposition of U.S. sanctions.

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

  • Al-Matuti, Arkan Ahmad ‘Abbas of Iraq and Syria;
  • Al-Rashidi, Nawaf Ahmad Alwan of Syria, Turkey, and Iraq;
  • Futuyo, Alfred of South Sudan; and
  • Nando, James of South Sudan and the Democratic Republic of the Congo.

https://home.treasury.gov/news/press-releases/jy1552 and https://ofac.treasury.gov/recent-actions/20230620

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June 23, 2023: A former member of the United States military was sentenced to 27 months in federal prison for conspiring to unlawfully export to Russia defense articles – including thermal imaging riflescopes and night vision goggles – without a license in violation of the Arms Export Control Act.

Igor Panchernikov, 41, a former Corona, California resident who once served in the United States Air Force Reserves. Panchernikov pleaded guilty on March 24 to one count of conspiracy to violate the Arms Export Control Act. He has been in federal custody since July 2022 after Israel extradited him to the United States. From December 2016 to May 2018, Panchernikov conspired with other individuals to knowingly export from the United States to Russia defense articles without obtaining from the State Department a valid license or other approval for such exports. Panchernikov’s accomplices purchased defense articles – including thermal riflescopes, weapons sights, monoculars, and night vision googles – from various online sellers located in the United States and directed the sellers to mail those items to Panchernikov’s residence in Corona.

https://www.justice.gov/usao-cdca/pr/former-us-serviceman-sentenced-27-months-prison-illegally-exporting-night-vision

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JUNE 2023 EXPORT CONTROL REGULATIONS UPDATES Read More »

MAY 2023 EXPORT CONTROL REGULATIONS UPDATES

This newsletter is a listing of the latest changes in export control regulations through May 31, 2023.  The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities.  It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

 

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

 

REGULATORY UPDATES

 

The President

 

President Biden Continues National Emergencies With Respect To Sudan

 

May 4, 2023: President Biden issued Executive Order 14098 that expanded the scope of the national emergency declared in Executive Order 13067 of November 3, 1997 (Blocking Sudanese Government Property and Prohibiting Transactions With Sudan), and expanded by Executive Order 13400 of April 26, 2006 (Blocking Property of Persons in Connection With the Conflict in Sudan’s Darfur Region), finding that the situation in Sudan, including the military’s seizure of power in October 2021 and the outbreak of inter-service fighting in April 2023, constitutes an unusual and extraordinary threat to the national security and foreign policy of the United States. The Executive Order imposed sanctions on certain persons destabilizing Sudan and undermining the goal of a democratic transition.

 

https://ofac.treasury.gov/media/931716/download?inline and https://ofac.treasury.gov/recent-actions/20230504

 

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President Biden Continues National Emergencies With Respect To The Central African Republic

 

May 11, 2023: 88 Fed. Reg. 30637:  On May 12, 2014, by Executive Order 13667, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701–1706) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the situation in and in relation to the Central African Republic, which has been marked by a breakdown of law and order; intersectarian tension; the pervasive, often forced recruitment and use of child soldiers; and widespread violence and atrocities, including those committed by Kremlin-linked and Yevgeniy Prigozhin-affiliated entities such as the Wagner Group, and which threatens the peace, security, or stability of the Central African Republic and neighboring states.

 

The situation in and in relation to the Central African Republic continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States. For this reason, the national emergency declared in Executive Order 13667 on May 12, 2014, to deal with that threat must continue in effect beyond May 12, 2023. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for one year the national emergency declared with respect to the Central African Republic.

 

https://www.federalregister.gov/documents/2023/05/11/2023-10315/continuation-of-the-national-emergency-with-respect-to-the-central-african-republic

 

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President Biden Continues National Emergencies With Respect To The Unrestricted Acquisition And Use Of Certain Information And Communications Technology And Services Transactions

 

May 11, 2023: 88 Fed. Reg. 30635: On May 15, 2019, by Executive Order 13873, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by the unrestricted acquisition and use of certain information and communications technology and services transactions.

 

The unrestricted acquisition or use in the United States of information and communications technology or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries augments the ability of these foreign adversaries to create and exploit vulnerabilities in information and communications technology or services, with potentially catastrophic effects. This threat continues to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States. For this reason, the national emergency declared on May 15, 2019, must continue in effect beyond May 15, 2023. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for one year the national emergency declared in Executive Order 13873 with respect to securing the information and communications technology and services supply chain.

 

https://www.federalregister.gov/documents/2023/05/11/2023-10314/continuation-of-the-national-emergency-with-respect-to-securing-the-information-and-communications

 

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President Biden Continues National Emergencies With Respect To Yemen

 

May 15, 2023: 88 Fed. Reg. 31141: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency declared in Executive Order 13611 of May 16, 2012, with respect to Yemen.

 

https://www.federalregister.gov/documents/2023/05/15/2023-10487/continuation-of-the-national-emergency-with-respect-to-yemen

 

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President Biden Continued The National Emergency With Respect To The Stabilization Of Iraq

 

May 17, 2023: 88 Fed. Reg. 31601: President Biden Continued The National Emergency With Respect to the Stabilization of Iraq for one (1) year.

 

https://www.federalregister.gov/documents/2023/05/17/2023-10756/continuation-of-the-national-emergency-with-respect-to-the-stabilization-of-iraq

 

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

 

DDTC Name And Address Changes Posted To Website

 

May 3 through 31, 2023: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at    

https://www.pmddtc.state.gov/ddtc_public?id=ddtc_kb_article_page&sys_id=bd72ca0adbf8d30044f9ff621f961981:

  • Change in Name from Hawker Pacific (Malaysia) SDN. BHD. to Jet Aviation (Malaysia) MRO SDN. BHD. due to company reorganization;
  • Change in Address from Sabena Technics ATP, formerly at 350, avenue Jean René Guillibert Gautier de la Lauzière, ZAC de Pichaury II, Parc du Golf Bâtiment 7, 13290 Aix-enProvence, France to Sabena technics ATP at Hangar Boussiron, Route de la Plage, 13700 Marignane, France;
  • Change in Address from Leonardo Electronics US Inc., 2345 Crystal Drive, Suite 901, Arlington, Virginia 22202, U.S. to 1650 Tysons Boulevard, Suite 700, McLean, Virginia, 22102;
  • Change in Name from Meta Mission Data Ltd to Metrea Mission Data Ltd. due to corporate reorganization;
  • Changes in Names and Ownership for Raytheon Anschutz GmbH due to acquisition by DMB Dr. Dieter Murmann Beteiligungsgesellschaft mbH:

 

Old Name New Name
Raytheon Anschuetz GmbH Portsmouth Office Raytheon Technologies Anschuetz UK Ltd.
Raytheon Anschütz GmbH Anschuetz GmbH
Raytheon Anschuetz do Brasil Sistemas Marítimos Ltda. Anschuetz do Brasil Sistemas Maritimos Ltda.
Raytheon Anschuetz Singapore Pte. Ltd. Anschuetz Singapore Pte Ltd.

 

  • Changes in Names and Ownership for Cobham Aviation Services Australia’s Special Mission business due to acquisition by Leidos:

 

Old Name New Name
Cobham Aviation Services Pty Ltd Leidos Airborne Solutions Australia Pty Ltd
Cobham SAR Services Pty Ltd Leidos SAR Services Pty Ltd
Cobham NAS Pty Ltd Leidos NAS Pty Ltd

 

  • Change in Name and Ownership from Apsys Risk Engineering GmbH to Airbus Protect GmbH due to merger;
  • Change in Name of Leonardo DRS, Inc.’s Israeli subsidiary company, from RADA Electronic Industries Ltd to DRS RADA Technologies Ltd. due to corporate rebranding;
  • Change in Name and Address from General Electric do Brasil Ltda. formerly at Av. Magalhaes de Castro, 4800 Continental Tower, Sao Paulo, Brazil to GE Celma LTDA at Rua Alice Herve 356, Bingen, Petropolis, RJ 25669-900 Brazil due to corporate rebranding;
  • Change in Name from Thales Programas De Electrónica Y Comunicaciones SAU to Thales España Sistemas SAU due to corporate rebranding; and
  • Change in Name from SPX Corporation to SPX Technologies, Inc. due to corporate rebranding.

 

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The Directorate Of Defense Trade Controls Posted Five Additional FAQs Regarding The Use Of USML Category XXI In The Automated Export System

 

May 3, 2023: Directorate of Defense Trade Controls (DDTC) posted five additional Frequently Asked Questions regarding the use of USML Category XXI in the Automated Export System (AES).

 

  • When can I use USML Category XXI to export my commodity?
  • Can I use a USML Category XXI determination number that has been assigned to a different commodity?
  • If an item is not described in any USML category, may I then self-classify it as USML Category XXI on the license?
  • Who do I contact if the Automated Export System (AES) is not accepting my DDTC Determination Number for USML Category XXI?
  • Who has the authority to determine that an item or service is included in USML Category XXI?

 

See the information below regarding the U.S. Census Bureau’s Notice of Proposed Rulemaking (NPRM) for the collection of a new data element – USML Category XXI.

 

https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_faq_cat&topic=840e3f6cdb3bc30044f9ff621f9619c0&subtopic=e0b1d163db0ddb00d0a370131f961988#e0b1d163db0ddb00d0a370131f961988

 

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The Directorate Of Defense Trade Controls (DDTC) Released An Update To The “Guidance For USPAB Authorization Requests”

 

May 23, 2023: The Directorate of Defense Trade Controls (DDTC) has released an update to the “Guidance for USPAB Authorization Requests” document. The update (v. 1.1) includes several clarifications, with the most significant being the following:

  • Support documents are to be submitted in PDF format;
  • Clarification on how to identify USML defense service categories and related USML commodity categories in the submission letter;
  • Updated guidance on preparing the DS-6004 (Part 4 of the guidance document), particularly the sections on commodity information (blocks 5-6) and blocks 8-10; and
  • Reiterates that applicants are to address periods of U.S. residency even if they have never lived in the U.S.
  • Reorganizes the instructions in Section II.A to highlight that defense services are to be listed in BOLD and that the scope of defense services is limited to the specific defense articles identified in the submission.

 

Additionally, the USPAB submission letter template and the sample ITAR §126.13 certification letter for USPAB requests have been added as appendices to the guidance document. They will no longer be found separately on the DDTC website.

 

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=f72d111c1b43a550d1f1ea02f54bcbdc

 

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The Department Of State Certified To Congress Certain Countries Are Not Cooperating Fully With United States Antiterrorism Efforts

 

May 23, 2023: 88 Fed. Reg. 33184: Pursuant to section 40A of the Arms Export Control Act (22 U.S.C. 2781), and Executive Order 13637, as amended, Secretary of State Antony Blinken has determined and certified to the Congress that the following countries are not cooperating fully with United States antiterrorism efforts: Cuba, Democratic People’s Republic of Korea (DPRK, or North Korea), Iran, Syria, and Venezuela.

 

https://www.federalregister.gov/documents/2023/05/23/2023-10903/determination-and-certification-of-countries-not-cooperating-fully-with-antiterrorism-efforts

 

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The Directorate Of Defense Trade Controls Released New FAQs Regarding The Open General License Pilot Program

 

May 26, 2023: The Directorate of Defense Trade Controls (DDTC) has released new frequently asked questions (FAQs) regarding the Open General License (OGL) Pilot Program. In addition, DDTC has released updated versions of previously published OGL FAQs and related factsheets.

 

https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=f8d90a611bc3e990c6c3866ae54bcbd7

 

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U.S. Department of Defense

 

DSCA Notifies Congress Of Potential FMS Sale To Latvia

 

May 2, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Latvia has requested to buy a Naval Strike Missile Coastal Defense System (NSM CDS), including tactical, telemetered, and training missiles; containers; mobile operational platforms; integration equipment; ordnance handling equipment (OHE); training equipment and aids; technical publications and data; training; spares; U.S. Government and contractor technical and product support or assistance; and other related elements of logistical and program support. The estimated total cost is $110 million. The principal contractor is to be determined. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/latvia-naval-strike-missile-coastal-defense-system

 

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DSCA Notifies Congress Of Potential FMS Sale To The Czech Republic

 

May 3, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of the Czech Republic has requested to buy equipment and services to refurbish six (6) AH-1Z and two (2) UH-1Y Excess Defense Article (EDA) helicopters. This equipment and services will include twenty-two (22) T-700 GE 401C engines (16 installed, six spares); fourteen (14) Honeywell Embedded Global Positioning System Inertial Navigation Systems (EGIs) w/Precise Positioning Service (PPS) (8 installed, 6 spares); four (4) M240 machine guns; and twenty-four (24) ARC-210 COMSEC radios. Also included is communication equipment; electronic warfare systems; support equipment; spare engine containers; flight training devices; Composite Maintenance trainer; spare and repair parts; tools and test equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total value is $650 million. The principal contractors will be Bell Helicopter, Textron, Fort Worth, TX, and General Electric Company, Lynn, MA. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/czech-republic-ah-1z-and-uh-1y-refurbishmentmodernization

 

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DSCA Notifies Congress Of Potential FMS Sale To Australia

 

May 4, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Australia has requested to buy Surveillance Towed Array Sensor System Expeditionary (SURTASS-E) mission systems for Vessels of Opportunity (VOO); a shore processing mission system, a spare SURTASS passive acoustic array; containers; communications parts and support equipment (Classified and Unclassified); software (Classified and Unclassified); publications (Classified and Unclassified); training; U.S. Government and contractor engineering support; and other related elements of logistics and program support. The estimated total cost is $207 million. The principal contractors will be Lockheed Martin-Syracuse, Syracuse, NY, and Lockheed Martin-Manassas, Manassas, VA. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/australia-surveillance-towed-array-sensor-system-expeditionary-surtass

 

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DSCA Notifies Congress Of Potential FMS Sale To Poland

 

May 9, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Poland has requested to buy thirty-four (34) AN/AAQ-33 Sniper Advanced Targeting Pods (ATP) with Shipping Containers.  Also included are system support and support equipment; spare parts, consumables, accessories, and repair and return support; integration and test equipment and support; unclassified software delivery and support; unclassified Computer Program Identification Number (CPIN) systems; unclassified publications and technical documentation; personnel training and training equipment; U.S. Government and contractor engineering, technical and logistics support services; and other related elements of logistical and program support.  The estimated total cost is $124.7 million.

 

https://www.dsca.mil/press-media/major-arms-sales/poland-sniper-advanced-targeting-pods

 

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DSCA Notifies Congress Of Potential FMS Sale To Slovakia

 

May 11, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Slovakia has requested to buy one hundred ninety-two (192) M1278A1/A2 Heavy Gun Carriers Joint Light Tactical Vehicles (JLTVs) as well as M153 Common Remote Weapons Stations (CROWS) with Display and Control Panels (DCP); M2 Quick Change Barrels (QCB) .50 caliber machine guns; MK19 40mm grenade launchers; M2A1 machine guns; M4A1 Joint Chemical Agent Detectors; AN/VAS-5B(V)2 Driver’s Vision Enhancers (DVE); JLTV kits; special tools to support the JLTV; JLTV spare parts; M205 gun mounts; basic issue items for CROWS; CROWS DCP retrofit kits; AN/VRC-104 radio kits; 16 port network switch kits; Silent Watch energy storage kits; DVE installation kits; M4A1 detector kits; M1114 turret rings and hatches; Maintenance Support Devices (MSD) with wireless at-platform test sets; Driver’s Vision Enhancer (DVE) sensor modules; display control modules; bracket assembly; electronics components assembly; CROWS appended trainers; CROWS diagnostic kits; CROWS maintenance tool sets; M2 Small Arms Tool Kits; Small Arms MK19 Tool Kits; M2 spare parts; MK93 weapon mounts; Toughbook laptops with interactive electronic technical manuals (IETM) and cables; JLTV contractor spare parts support; CROW Systems spare parts support; Maintenance Support Items (MSI) in support of MK19; MK19 Mod III spare parts support; CROWS spare parts; CROWS Basic Issue Items (BII) boresight kit components; Total Package Fielding; Field Service Representative support; U.S. government technical assistance; training; technical publications/manuals; and other related elements of logistics and program support.  The estimated cost is $250 million.

 

https://www.dsca.mil/press-media/major-arms-sales/slovakia-m1278a1a2-heavy-gun-carriers-joint-light-tactical-vehicles

 

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DSCA Notifies Congress Of Potential FMS Sale To Germany

 

May 11, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Germany has requested to buy sixty (60) CH-47F Block II Cargo Helicopters with customer-unique modifications; one hundred forty (140) T-55-GA-714A engines (120 installed, 20 spares); seventy-two (72) AN/AAR-57 Common Missile Warning Systems (CMWS) (60 installed, 12 spares); and two hundred eighty-four (284) AN/ARC-231A Communications Security (COMSEC) radios (240 installed, 44 spares). Also included are AN/AVR-2B Laser Detecting Sets; AN/APR-39C(V)1 Radar Detecting Sets; AN/ARC-220 High Frequency (HF) radios with electronic counter-countermeasures (ECCM); military Precise Positioning Service (PPS) (to include SAASM or M-Code); Digital Advanced Flight Control Systems (DAFCS); AN/APX-123A Identification Friend or Foe (IFF) transponder; AN/ARN-147 very high frequency (VHS) omnidirectional range and instrument landing system (VOR/ILS); AN/ARN-153 Tactical Air Navigation Systems (TACAN); air data computers; AN/APN-209 radar altimeter systems; AN/PYQ-10 simple key loaders; KIV-77 Mode 4/5 IFF Applique; KY-100M narrowband/wideband terminal COMSEC devices; AN/AVS-6 Night Vision Devices (NVD); IDM-401 Improved Data Modem; air-to-air refueling probes; M134 gun mounts; Infrared Suppression System (IRSS); Engine Air Particle Separator (EAPS); Ballistic Protection System (BPS) with Cockpit; cabin sides; Midas Underfloor COOLS; Extended Range Fuel System (ERFS) 800 gal and 500 gal; Forward Area Refueling Equipment (FARE); Tie Down Materiel/Helicopter Under-Slung Load Equipment (HUSLE) for internal and external loads; rotorbrake; rescue hoists; Fast Rope Insertion/Extraction System (FRIES); Electro Optical Infrared Sensors (EO/IR); crash resistant pilot and troop seats; skis; life rafts; litter straps and fittings; mission equipment (e.g., jungle penetrator; litter basket; Jacob’s ladder; Airborne Tactical Extraction Platform (AirTEP); special tools and test equipment; ground support equipment; airframe and engine spare parts; technical data; publications; Maintenance Work Orders/Engineering Change Proposals (MWO/ECPs); Repair and Return (R&R); technical assistance; airworthiness assistance; transportation of aircraft; training; flight training and maintenance trainers; and other related elements of logistics and program support. The total estimated cost is $8.5 billion. The principal contractor will be Boeing Helicopter Company, Philadelphia, PA. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/germany-ch-47f-chinook-helicopters

 

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DSCA Notifies Congress Of Potential FMS Sale To Ukraine

 

May 24, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Ukraine has requested to buy the National Advanced Surface-to-Air Missile System (NASAMS), which includes: one (1) AN/MPQ-64F1 Sentinel Radar. Also included are a Fire Distribution Center (FDC); canister launchers, secure communications, GPS receivers, code loaders, and cable sets; tool kits; test equipment; support equipment; prime movers; generators; technical documentation; spare parts; U.S. Government and contractor technical support; and other related elements of logistics and program support. The total estimated cost is $285 million. The principal contractor will be Raytheon Missiles and Defense, Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/ukraine-national-advanced-surface-air-missile-system-nasams

 

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Department of Commerce

 

The U.S. Department of Commerce Revised NIST 800-17

 

May 2023: The U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) has published on its website NIST 800-171 Rev. 3 – Protecting Controlled Unclassified Information in Nonfederal Systems and Organizations. This update to NIST SP 800-171 represents over one year of data collection, technical analyses, customer interaction, redesign, and development of the security requirements and supporting information for the protection of Controlled Unclassified Information (CUI). Many trade-offs have been made to ensure that the technical and non-technical requirements have been stated clearly and concisely while also recognizing the specific needs of both federal and nonfederal organizations. Significant changes NIST SP 800-171, Revision 3 include:

  • Updates to the security requirements and families to reflect updates in NIST SP 800-53, Revision 5 and the NIST SP 800-53B moderate control baseline;
  • Updated tailoring criteria;
  • Increased specificity for security requirements to remove ambiguity, improve the effectiveness of implementation, and clarify the scope of assessments;
  • Introduction of organization-defined parameters (ODP) in selected security requirements to increase flexibility and help organizations better manage risk; and
  • A prototype CUI overlay.

 

https://nvlpubs.nist.gov/nistpubs/SpecialPublications/NIST.SP.800-171r3.ipd.pdf

 

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

 

The Department Of Commerce Is Strengthening Its Existing Sanctions Under The EAR Against Russia And Belarus

 

May 23, 2023: 88 Fed. Reg. 33422: In response to the Russian Federation’s (Russia’s) ongoing aggression against Ukraine, as substantially enabled by Belarus, the Department of Commerce is strengthening its existing sanctions under the Export Administration Regulations (EAR) against Russia and Belarus, including by expanding the scope of the EAR’s Russian and Belarusian Industry Sector Sanctions and by expanding the foreign direct product rule that currently applies to Russia and Belarus to apply to the temporarily occupied Crimea region of Ukraine as well. Additionally, this rule revised recent restrictions targeting Iran’s supply of Unmanned Aerial Vehicles to Russia. This rule also refined existing export controls on Russia and Belarus. The Department of Commerce is taking these actions to enhance the effectiveness of its controls on these countries and to better align them with those implemented by U.S. allies and partners.

 

The rule added the remaining HTS-6 Codes under three entire harmonized tariff system chapters (Chapters 84, 85, and 90; now over 2,000 total entries) to the industrial and commercial controls listed in Supplement No. 4 to Part 746 of the EAR so that every HTS-6 Code under these three chapters is now controlled. The items added in this rule include a variety of electronics, instruments, and advanced fibers for the reinforcement of composite materials, including carbon fibers. This comprehensive approach seeks to further cut off Russia’s access to any items of potential military application within these chapters and deny Russia additional resources it needs to continue waging war, while also simplifying the compliance decisions for persons trading in these items as all items in these chapters now require a license.
The rule also added certain additional chemicals to Supplement No. 6 to part 746 of the EAR, which consists of discrete chemicals, biologics, fentanyl, and its precursors, and related equipment designated EAR99 that may be useful for Russia’s industrial capability or may be diverted from Belarus to Russia for these activities of concern.

The rule expanded the list of foreign-produced items in Supplement No. 7 to part 746 of the EAR that require a license when destined to Russia, Belarus, and Iran to make the EAR’s controls stronger, more effective, and easier to understand and further limit Iran’s ability to support Russia’s military aggression against Ukraine by providing unmanned aerial vehicles or UAVs. This addition builds on the rule issued on February 24, 2023, that created Supplement No. 7, which identifies a number of priority items of concern and that is being used to advance counter-evasion efforts.
Expanding the destination scope of the Russia/Belarus Foreign-Direct Product (FDP) Rule, as well as other conforming changes. The rule applies the Russia/Belarus FDP Rule to the temporarily occupied Crimea region of Ukraine, thereby making it more difficult for items to be procured for Russia’s use in Crimea in support of its ongoing military aggression in Ukraine.

 

https://www.bis.doc.gov/index.php/documents/regulations-docs/federal-register-notices/federal-register-2023/3276-88-fr-33422/file

 

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U.S. Census Bureau

 

The U.S. Census Bureau Announced The Proposal For The Collection Of A New Data Element – USML Category XXI

 

May 3, 2023: The Department of Commerce, U.S. Census Bureau published a Notice of Proposed Rulemaking (NPRM). This NPRM announces the proposal for the collection of a new data element – USML Category XXI Determination Number – in the Automated Export System (AES) when USML Category XXI is selected under the DDTC United States Munitions List (USML) Category Code field.

 

This Department of State, Directorate of Defense Trade Controls (DDTC) proposed collection will help ensure that only commodities that have been determined to be controlled in USML Category XXI by the Director of DDTC’s Office of Defense Trade Controls Policy can be declared as such in AES. Technical details on the new data element and new response message are found below. The AESDirect web application was updated on May 9, 2023, to accept the proposed new data element and return the new response message.

 

https://www.govinfo.gov/content/pkg/FR-2023-05-03/pdf/2023-09322.pdf)

Editors note: see the article on page 4.

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The U.S. Census Bureau and DDTC Revert The AES Requirement of USML Category XXI And Response Message 5C2

 

May 9, 2023: the US Census Bureau, US Customs and Border Protection, and the Directorate of Defense Trade Control reverted the Automated Export System (AES) requirement of the Category XXI Determination Number data element when the USML Category XXI is entered. Additionally, the related Response Message 5C2 in the AES has been disabled. The original intent of the AES Broadcast on May 3, 2023, was to raise awareness to filers of USML Category XXI items of the Notice of Proposed Rulemaking (NPRM).

 

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AES Tips On How To Address The Most Frequent AES Response Messages

 

May 18, 2023: 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.

Response Code:  256

Narrative:     USPPI Postal Code Not Valid for State

Severity:       Fatal

Reason:        The Postal Code and State Code reported in the USPPI Address do not match.

Resolution:  The reported USPPI State Code must match the state associated with the Postal Code.

Verify the USPPI State Code and Postal Code combination, correct the shipment, and resubmit. 

Response Code:  522

Narrative:     Shipping Weight Exceeds Max Air Threshold

Severity:       Fatal

Reason:        The Mode of Transportation is reported as Air, and the Shipping Weight reported exceeds the maximum threshold allowed for an air shipment.

Resolution:  The maximum Shipping Weight allowed for an air shipment is 150,000 kilograms (for other than fly-away aircraft).

Verify the Shipping Weight and Mode of Transportation, correct the shipment, and resubmit.

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Department of Treasury’s Office of Foreign Assets Control (OFAC)

 

The U.S. Department Of Treasury’s Office Of Foreign Assets Control (OFAC), The European External Action Service (EEAS), And The European Commission Directorate-General For Financial Stability, Financial Services And Capital Markets Union (DG FISMA) Exchanged Best Practices And Strengthened Working Relationships

 

May 16, 2023: The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC), the European External Action Service (EEAS), and the European Commission Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) concluded a multi-day technical meeting in Brussels, exchanging best practices and strengthening working relationships. The purpose of the meeting was to share sanctions expertise to enhance and improve the capabilities of those at the forefront of sanctions design, implementation, and compliance. OFAC, EEAS, and DG FISMA identified ways to align the implementation of sanctions, promote compliance, strengthen enforcement, and address shared foreign policy challenges. The teams also explored methods to ensure that sanctions do not prevent humanitarian trade and assistance from reaching those in need and that persons in sanctioned jurisdictions preserve their internet freedom. The partners have been working together to provide coordinated information to the compliance community and will continue to update and maintain their sanctions-related lists and published guidance.

 

https://home.treasury.gov/news/press-releases/jy1485

 

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Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) and Commerce’s Bureau of Industry and Security (BIS) 

 

FinCEN And BIS Issued A Joint Supplemental Alert Urging Continued Vigilance For Potential Russian Export Control Evasion

 

May 19, 2023: Treasury’s Financial Crimes Enforcement Network (FinCEN) and Commerce’s Bureau of Industry and Security (BIS) have issued a joint supplemental alert urging continued vigilance for potential Russian export control evasion. This supplemental alert builds on FinCEN and BIS’s first joint alert, issued in June 2022, and provides financial institutions additional information with respect to new BIS export control restrictions relating to Russia. The alert also reinforces ongoing U.S. government engagements and initiatives designed to further constrain and prevent Russia from accessing needed technology and goods to supply and replenish its military and defense industrial base. It details evasion typologies and identifies additional transactional and behavioral red flags to assist financial institutions.

 

https://www.fincen.gov/sites/default/files/shared/FinCEN%20and%20BIS%20Joint%20Alert%20_FINAL_508C.pdf

 

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International Export Controls

 

Japan Tightens Export Controls On Manufacturing Equipment For Cutting-Edge Semiconductors

 

May 23, 2023: Japan’s trade ministry revised an ordinance to tighten export controls on manufacturing equipment for cutting-edge semiconductors. The revised ministry ordinance will take effect on July 23.

Japan’s tighter export controls will cover 23 items, including devices to remove impurities generated in the semiconductor manufacturing process and lithography equipment essential for semiconductor production. The newly added items also include manufacturing equipment for extreme ultraviolet lithography and etching equipment for stacking memory devices in three dimensions.

 

Under the Foreign Exchange and Foreign Trade Act, Japan regulates the export of weapons and other goods that can be converted to military applications. Such exports require prior approval from the Minister of Economy, Trade and Industry.

 

The 23 items to be added will require individual permissions unless they are destined for 42 countries and regions designated friendly. This makes exports to China and certain other countries much more selective.

 

The move comes after the United States, in October of 2022, tightened restrictions on exports to China of semiconductor manufacturing equipment and technologies that could be diverted for military use.

The United States then called on Japan, as well as the Netherlands, both home to major semiconductor manufacturing equipment makers, to take similar steps.

 

https://www.nippon.com/en/news/yjj2023052301027/japan%E2%80%99s-tighter-semiconductor-export-controls-to-take-effect-in-july.html and https://asia.nikkei.com/Business/Tech/Semiconductors/Japan-chip-export-curb-to-China-will-take-effect-in-July

 

 

 

This section of our newsletter provides information on the latest sanctions, fines, and penalties for export violations or matters of non-compliance with the ITAR or EAR issued by the US government enforcement agencies. It is provided as a service to exporters and associates of FD Associates to remind them of the importance of extreme due diligence in all international trade and export compliance matters, particularly those involving exports subject to the ITAR or the EAR. Don’t let this happen to you or your company! Call us with questions or concerns at 703-847-5801 or email info@fdassociates.net.

 

Sanctions

 

The U.S. Department of State:

 

May 19, 2023: In coordination with the G7, Australia, and other partners, the United States imposed new sanctions on Russia for its illegal war in Ukraine. These actions implement new commitments made at the G7 Leaders’ Summit and demonstrate shared resolve to hold Russia accountable for its mounting atrocities in Ukraine.  These sanctions also reinforce the commitment the United States and its partners have made to taking action against those who aid the Kremlin in Ukraine by circumventing our sanctions and export control measures.

 

As part of these actions, the Department of State imposed sanctions on or identifying as blocked property over 200 entities, individuals, vessels, and aircraft.  These actions include designations of targets across Russia’s defense and related material, technology, and metals and mining sectors.  These actions also include the designation of entities and individuals involved in expanding Russia’s future energy production and capacity. The Department of State will continue to target entities and individuals that have engaged in the systematic and unlawful deportation of Ukraine’s children and the theft and transportation of stolen grain from Ukraine.

 

These actions also include designations of an international network of entities engaged in the procurement of components for the Russia-based entity responsible for the manufacture of the Orlan drone, which Russian forces are currently employing in their illegal war against Ukraine, and the Russia-installed puppet authorities in parts of Ukraine’s territory.

 

The Department of State took these steps in coordination with further sanctions being imposed by the Department of the Treasury and additional export control measures announced by the Department of Commerce.

 

https://www.state.gov/united-states-imposes-additional-sanctions-and-export-controls-on-russia-in-coordination-with-international-partners/

 

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

 

May 5, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an order renewing the temporary denial of export privileges for an additional 180 days of Mahan Airways, Pejman Mahmood Kosarayanifard, Mahmoud Amini, Kerman Aviation, Sirjanco Trading LLC, Mahan Air General Trading LLC, Mehdi Bahrami, Al Naser Airlines, Ali Abdullah Alhay, Bahar Safwa General Trading, Sky Blue Bird Group, and Issarn Shammout.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1500-e2839/file

 

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May 12, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order renewing the temporary denial of export privileges of Rossiya Airlines of St. Petersburg, Russia, for an additional 180 days.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1506-e2845/file

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May 16, 2023: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) issued a Temporary Denial Order (TDO) suspending the export privileges of Florida company MIC P&I, LLC, Russian airline Smartavia, freight forwarder Intermodal Maldives, and Oleg Patsulya and Vasilii Besedin, two Russian nationals residing in Florida, for diverting civilian aircraft parts to Russia.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1507-e2846/file

 

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May 19, 2023: 88 Fed. Reg. 32640: The Department of Commerce is amending the Export Administration Regulations (EAR) by adding seventy-one entities to the Entity List. These entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States and will be listed on the Entity List under the destinations of Armenia, Kyrgyzstan, and Russia.

 

Armenia:

  • Medisar, LLC.

 

Kyrgyzstan:

  • Ya, LLC.

 

Russia:

  • Closed Joint Stock Company Special Design Bureau;
  • Federal State Enterprise Kazan State Gunpowder Plant;
  • Federal State Unitary Enterprise Central Scientific Research Institute of Chemistry and Mechanics;
  • Federal State Unitary Enterprise Rostov-On-Don Research Institute of Radio Communications;
  • Informtest Firm Limited Liability Company;
  • Joint Stock Company 150 Aircraft Repair Plant;
  • Joint Stock Company 810 Aircraft Repair Plant;
  • Joint Stock Company Arzamas Instrument-Making Plant named after P.I. Plandin;
  • Joint Stock Company Bryansk Automobile Plant;
  • Joint Stock Company Central Research Institute Burevestnik;
  • Joint Stock Company Central Research Institute of Automation and Hydraulics;
  • Joint Stock Company Concern Avrora Scientific and Production Association;
  • Joint Stock Company Concern Central Institute for Scientific Research Elektropribor;
  • Joint Stock Company Concern Morinformsystem Agat;
  • Joint Stock Company Concern Okeanpribor;
  • Joint Stock Company Dux;
  • Joint Stock Company Eastern Shipyard;
  • Joint Stock Company ENICS;
  • Joint Stock Company Information Satellite Systems Named After Academician M.F. Reshetnev;
  • Joint Stock Company Izhevsk Electromechanical Plant Kupol;
  • Joint Stock Company Kazan Optical-Mechanical Plant;
  • Joint Stock Company Khabarovsk Shipbuilding Yard;
  • Joint Stock Company Machine Building Company Vityaz;
  • Joint Stock Company Management Company Radiostandard;
  • Joint Stock Company Marine Instrument Engineering Corporation;
  • Joint Stock Company Nevskoe Design Bureau;
  • Joint Stock Company NII Gidrosvyazi Shtil;
  • Joint Stock Company Nizhny Novgorod Plant of the 70th Anniversary of Victory;
  • Joint Stock Company Northern Production Association Arktika;
  • Joint Stock Company Perm Machine Building Plant;
  • Joint Stock Company Precision Engineering Design Bureau named after A.E. Nudelman;
  • Joint Stock Company Production Complex Akhtuba;
  • Joint Stock Company Project Design Bureau RIO;
  • Joint Stock Company Ratep;
  • Joint Stock Company Scientific Production Association Impulse;
  • Joint Stock Company Scientific Production Association Orion;
  • Joint Stock Company Scientific Production Association Russian Basic Information Technologies;
  • Joint Stock Company Scientific Production Association Volna Plant;
  • Joint Stock Company Scientific Production Center of Automatics and Instrument Building Named After Academician N.A. Pilyugin;
  • Joint Stock Company Scientific Production Concern Tekhmash;
  • Joint Stock Company Scientific Research Engineering Institute;
  • Joint Stock Company Scientific Research Institute of Computing Complexes Named After M.A. Kartsev;
  • Joint Stock Company Scientific Technical Institute Radiosvyaz;
  • Joint Stock Company Taganrog Plant Priboy;
  • Joint Stock Company Tula Cartridge Works;
  • Joint Stock Company Tula Machine-Building Plant;
  • Joint Stock Company Ulan-Ude Aviation Plant;
  • Joint Stock Company Ulyanovsk Cartridge Works;
  • Joint Stock Company Ulyanovsk Mechanical Plant;
  • Joint Stock Company Ural Automotive Plant;
  • Joint Stock Company Ural Works of Civil Aviation;
  • Joint Stock Company Vodtranspribor;
  • Joint Stock Company Zavod Elecon;
  • Joint Stock Company Zavolzhskiy Plant of Caterpillar Tractors;
  • Joint Stock Company Zelenodolsk Plant Named After A.M. Gorky;
  • Machine Building Group Limited Liability Company;
  • Military Industrial Company Limited Liability Company;
  • Open Joint Stock Company Degtyaryov Plant;
  • Promtekhnologiya Limited Liability Company;
  • Public Joint Stock Company Kurganmashzavod;
  • Public Joint Stock Company Motovilikha Plants;
  • Public Joint Stock Company Proletarsky Plant;
  • Public Joint Stock Company Rostvertol;
  • Public Joint Stock Company Scientific Production Association Strela;
  • Scientific Production Association Izhevsk Unmanned Systems Limited Liability Company;
  • Scientific Production Enterprise Prima Limited Liability Company;
  • United Machine Building Group Limited Liability Company;
  • Volgograd Machine Building Company Limited Liability Company; and
  • VXI-Systems Limited Liability Company

 

https://www.federalregister.gov/documents/2023/05/22/2023-10684/addition-of-entities-to-the-entity-list

 

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

 

May 1, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Venezuela General License 42, “Authorizing Certain Transactions Related to the Negotiation of Certain Settlement Agreements with the IV Venezuelan National Assembly and Certain Other Persons.” In addition, OFAC published three new Frequently Asked Questions (1123, 1124, 1125) and amended one Frequently Asked Question (808).

 

Venezuela General License 42: All transactions prohibited by the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), that are ordinarily incident and necessary to the negotiation of settlement agreements with the IV Venezuelan National Assembly seated on January 5, 2016 (“IV National Assembly”), its Delegated Commission, any entity established by, or under the direction of, the IV National Assembly to exercise its mandate (“IV National Assembly Entity”), or any person appointed or designated by, or whose appointment or designation is retained by, an IV National Assembly Entity, relating to any debt of the Government of Venezuela, Petróleos de Venezuela, S.A. (PdVSA), or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest are authorized.

 

Note 1.  The authorization referenced above of this general license includes the negotiation of settlement agreements with persons appointed or designated by, or whose appointment or designation is retained by, an IV National Assembly Entity to the board of directors (including any ad hoc boards of directors), or as an executive officer of a Government of Venezuela entity (including entities owned or controlled, directly or indirectly, by the Government of Venezuela).

 

This general license does not authorize:

(1) Any transaction involving the Venezuelan National Constituent Assembly convened by Nicolas Maduro or the National Assembly seated on January 5, 2021, including their respective members and staff; or

(2) Any transaction otherwise prohibited by the VSR, including transactions involving any person blocked pursuant to the VSR other than the blocked persons described above, unless separately authorized.

 

https://ofac.treasury.gov/media/931696/download?inline

 

Question 1123: In Crystallex Int’l Corp. v. Bolivarian Republic of Venezuela, 17-mc-00151 (D. Del.), the U.S. District Court for the District of Delaware has entered a Sale Procedures Order with respect to certain shares in PDV Holding (PDVH) to satisfy a U.S. district court judgment confirming an arbitral award against Venezuela.  May persons participate in or comply with steps relating to a judicial sale of such shares?

 

Answer: OFAC will not take enforcement action against any individuals or entities for participating in, facilitating, or complying with the prefatory steps set out in the court’s Sale Procedures Order, or for engaging in transactions that are ordinarily incident and necessary to participating in, facilitating, or complying with such steps (such as serving as potential or actual credit counterparties).  See also General License 42 and OFAC Frequently Asked Question (FAQ) 1125.  As recognized by the judge in the Crystallex case, an additional license will be required before any sale is executed.  As is standard for OFAC’s process before providing a license for the disposition of blocked property, the United States Government will engage in due diligence about the identity of a potential purchaser and will consider relevant details of the proposed transaction.  Before a potential purchaser has been identified, it would be premature to issue any such license or express a definitive view on the issuance of a specific license in a future scenario.  OFAC nevertheless intends to implement a favorable licensing policy toward such license applications in connection with the execution of a sale as contemplated in the Sale Procedures Order.  As with all OFAC licenses and statements of licensing policy, this licensing policy would be without prejudice to reconsideration if U.S. foreign policy and national security interests materially change.  In making these licensing determinations, OFAC is committed to fair and equivalent treatment of potential creditors.

This non-enforcement posture applies to OFAC sanctions only and does not relieve persons of obligations to comply with any other applicable regulatory requirements, reviews, or approvals that may be necessary to finalize any sale.

 

Question 1124: I am a party seeking to enforce bondholder rights to the shares of CITGO Holding serving as collateral for the Petróleos de Venezuela, S.A. (PdVSA) 2020 8.5 percent bond, pending the outcome of ongoing litigation.  How can I preserve or enforce my bondholder rights consistent with the Venezuela Sanctions Regulations, 31 CFR part 591 (VSR)?  

 

Answer: OFAC will not take enforcement action against any person for taking steps to preserve the ability to enforce bondholder rights to the CITGO shares serving as collateral for the PdVSA 2020 8.5 percent bond (see also OFAC Frequently Asked Question (FAQ) 1123; General License 42 and OFAC FAQ 1125).  This non-enforcement policy governs OFAC sanctions only and does not relieve persons of obligations to comply with any other applicable regulatory requirements, reviews, or approvals that may be necessary to finalize any sale.  As noted in FAQ 1125, parties that have negotiated a settlement agreement pursuant to General License 42 will still need to seek a specific license for entry into that agreement.


Question 1125: I am a creditor of the Government of Venezuela, Petróleos de Venezuela, S.A. (PdVSA), or a PdVSA subsidiary.  Do I need an OFAC license to negotiate the settlement of claims related to assets of the Government of Venezuela or PdVSA?

 

Answer: Venezuela General License (GL) 42 generally authorizes transactions prohibited by the Venezuela Sanctions Regulations, 31 CFR part 591 (VSR), that are ordinarily incident and necessary to the negotiation of settlement agreements with the IV National Assembly, its Delegated Commission, an IV National Assembly Entity, or a person appointed or designated by, or whose appointment or designation is retained by, an IV National Assembly Entity relating to any debt of the Government of Venezuela, PdVSA, or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest (a “PdVSA Subsidiary”).

For the purposes of GL 42, the term “IV National Assembly” means the IV Venezuelan National Assembly seated on January 5, 2016; GL 42 does not authorize transactions involving the Venezuelan National Constituent Assembly convened by Nicolas Maduro or the National Assembly seated on January 5, 2021.  The term “IV National Assembly Entity” includes any entity established by, or under the direction of, the IV National Assembly to exercise its mandate, including persons appointed or designated by, or whose appointment or designation is retained by, an IV National Assembly Entity to the board of directors (including any ad hoc boards of directors), or as an executive officer of a Government of Venezuela entity (including entities owned or controlled, directly or indirectly, by the Government of Venezuela).  Settlement agreements relating to debt include settlement agreements relating to bonds, promissory notes, and other receivables of the Government of Venezuela, PdVSA, or a PdVSA Subsidiary.

GL 42 does not authorize the entry into settlement agreements, contingent or otherwise.  Parties that have negotiated a settlement agreement pursuant to GL 42 will need to seek a specific license for entry into that agreement.  OFAC intends to implement a favorable licensing policy for license applications in connection with the negotiation of a settlement agreement, but as with all OFAC licenses and statements of licensing policy, specific licenses will only be granted after due diligence as to the parties and transaction, and this licensing policy would be without prejudice to reconsideration if U.S. foreign policy and national security interests materially change and may be revoked or modified at any time.  GL 42 also does not authorize any transactions, including negotiation of settlement agreements, with persons blocked pursuant to the VSR other than those blocked persons enumerated in GL 42, unless separately authorized.

 

Question 808: Do I need a specific license from OFAC to file a suit in U.S. court against a person designated or blocked pursuant to Venezuela-related sanctions?  Does a U.S. court, or its personnel, need a specific license from OFAC to hear such a case?

 

Answer: No.  A specific license from OFAC is not required to initiate or continue U.S. legal proceedings against a person designated or blocked pursuant to the Venezuela Sanctions Regulations, 31 CFR part 591 (VSR), or for a U.S. court, or its personnel, to hear such a case.  Similarly, creditors may file for writs of attachment without the need for OFAC authorization for matters involving property blocked under the VSR.

However, a specific license from OFAC is required for the entry into a settlement agreement, or for the enforcement of any lien, judgment, or other order through execution, garnishment, or other judicial process purporting to transfer or otherwise alter or affect property or interests in property blocked pursuant to the VSR.

 

For additional information, see 31 CFR §§ 591.309, 591.310, 591.407, and 591.506.

With respect to the specific facts and circumstances in Crystallex Int’l Corp. v. Bolivarian Republic of Venezuela, 17-mc-00151, before the U.S. District Court for the District of Delaware, please see Frequently Asked Question (FAQ) 1123.  For information on general licenses that may authorize certain settlement negotiations involving persons designated or blocked pursuant to the VSR, please see OFAC FAQs 1124 and 1125.

 

https://ofac.treasury.gov/recent-actions/20230501 and https://ofac.treasury.gov/faqs/added/2023-05-01 and https://ofac.treasury.gov/faqs/808

 

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May 2, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), in a joint action with authorities in the Republic of Türkiye, designated two financial facilitators of Syria-based terrorist groups Hay’at Tahrir al-Sham (HTS) and Katibat al-Tawhid wal-Jihad (KTJ), both of which are sanctioned by the United States and the United Nations. This action continues the cooperation between the United States and Türkiye to counter the financing of terrorist groups that perpetuate violence and instability throughout the region. Concurrently, the Turkish Ministry of Treasury and Finance and the Turkish Ministry of Interior have implemented an asset freeze against these terrorist facilitators.

 

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

  • Alsheak, Omar of Turkey and Syria; and
  • Sari, Kubilay of Turkey.

 

https://home.treasury.gov/news/press-releases/jy1456 and https://ofac.treasury.gov/recent-actions/20230502

 

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May 4, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended one related Frequently Asked Question (836) related to President Biden’s Executive Order referenced above regarding Sudan.

 

Question 836: What sanctions are applicable to Sudan and the Government of Sudan?

 

Answer: The national emergency declared with respect to the Government of Sudan in Executive Order (E.O.) 13067 of November 3, 1997 — as expanded upon in scope by subsequent E.O.s — remains in effect.  As detailed below, certain sanctions have been imposed, and others have been lifted pursuant to that national emergency in response to developments in Sudan.

 

The following sanctions authorities are in effect with respect to Sudan:

  • E.O. 14098 of May 4, 2023, among other things, authorizes the imposition of sanctions on foreign persons to address the situation in Sudan following the military’s seizure of power in October 2021 and the outbreak of inter-service fighting in April 2023 and to support a transition to democracy and the civilian transitional government in Sudan.
  • E.O. 13400 of April 26, 2006 imposes sanctions on individuals and entities in connection with the conflict in Darfur and, in part, implements sanctions with respect to that conflict adopted by the United Nations Security Council.

 

The following sanctions authorities are no longer in effect with respect to Sudan:

  • Effective October 12, 2017, sections 1 and 2 of E.O. 13067 of November 3, 1997, and all of E.O. 13412 of October 13, 2006, were revoked, pursuant to E.O. 13761 of January 13, 2017, as amended by E.O. 13804 of July 11, 2017.  To reflect this revocation of authorities, OFAC removed the Sudanese Sanctions Regulations, 31 CFR part 538 (SSR) from the Code of Federal Regulations (CFR) on June 29, 2018.  U.S. persons are not broadly prohibited from engaging in transactions with respect to Sudan or the Government of Sudan that were previously prohibited solely by the SSR. In addition, following the revocation of sections 1 and 2 of E.O. 13067 and E.O. 13412, persons designated solely pursuant to the blocking authorities of E.O. 13067 or E.O. 13412 were removed from OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List).
  • The determination regarding Sudan as a State Sponsor of Terrorism was rescinded on December 14, 2020.  Accordingly, Sudan is no longer subject to prohibitions under the Terrorism List Governments Sanctions Regulations, 31 CFR part 596 (TLGSR), or section 906(a)(1) of the Trade Sanctions Reform and Export Enhancement Act of 2000 (22 U.S.C. 7205).

 

Note that the revocation of the aforementioned sanctions authorities does not affect past, present, or future OFAC enforcement investigations or actions associated with any apparent violations of the SSR that occurred prior to October 12, 2017 or of the TLGSR prior to December 14, 2020. 

 

https://ofac.treasury.gov/faqs/836 and https://ofac.treasury.gov/recent-actions/20230504

 

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May 5, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 8G, “Authorizing Transactions Related to Energy”.

 

General License 8G: All transactions prohibited by Executive Order (E.O.) 14024 involving one or more of the following entities that are related to energy are authorized, through 12:01 a.m. Eastern daylight time, November 1, 2023:

(1) State Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank;

(2) Public Joint Stock Company Bank Financial Corporation Otkritie;

(3) Sovcombank Open Joint Stock Company;

(4) Public Joint Stock Company Sberbank of Russia;

(5) VTB Bank Public Joint Stock Company;

(6) Joint Stock Company Alfa-Bank;

(7) Public Joint Stock Company Rosbank;

(8) Bank Zenit Public Joint Stock Company;

(9) Bank Saint-Petersburg Public Joint Stock Company;

(10) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest; or

(11) the Central Bank of the Russian Federation.

 

For the purposes of this general license, the term “related to energy” means the extraction, production, refinement, liquefaction, gasification, regasification, conversion, enrichment, fabrication, transport, or purchase of petroleum, including crude oil, lease condensates, unfinished oils, natural gas liquids, petroleum products, natural gas, or other products capable of producing energy, such as coal, wood, or agricultural products used to manufacture biofuels, or uranium in any form, as well as the development, production, generation, transmission, or exchange of power, through any means, including nuclear, thermal, and renewable energy sources.

 

https://ofac.treasury.gov/recent-actions/20230505 and https://ofac.treasury.gov/media/931721/download?inline

 

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May 9, 2023:  The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Joaquin Guzman Lopez, a son of Joaquin “El Chapo” Guzman Loera and the fourth member of Los Chapitos—as well as three Sinaloa Cartel members and two Mexico-based entities pursuant to Executive Order (E.O.) 14059. Those sanctioned are part of a Sinaloa Cartel network overseen by Los Chapitos and responsible for a significant portion of the illicit fentanyl and other deadly drugs trafficked into the United States.

 

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

 

  • Guzman Lopez, Joaquin of Mexico;
  • Ogazon Sedano, Mario Esteban of Mexico;
  • Paez Lopez, Saul of Mexico; and
  • Perez Uribe, Raymundo of Mexico.

 

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

 

  • Sumilab, S.A. DE C.V., of Mexico; and
  • Urbanizacion, Inmobiliaria Y Construccion De Obras, S.A. DE C.V., of Mexico.

 

https://home.treasury.gov/news/press-releases/jy1467 and https://ofac.treasury.gov/recent-actions/20230509

 

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May 16, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Mikhail Matveev (Matveev) for his role in launching cyberattacks against U.S. law enforcement, businesses, and critical infrastructure. Concurrently, the U.S. District Courts for the District of New Jersey and the District of Columbia unsealed indictments against Matveev. Additionally, the U.S. Department of State announced an award of up to $10 million for information that leads to the arrest and/or conviction of Matveev under its Transnational Organized Crime Rewards Program.

 

The following individual has been added to OFAC’s SDN List: 

  • Matveev, Mikhail Pavlovich of Russia.

 

https://home.treasury.gov/news/press-releases/jy1486 and https://ofac.treasury.gov/recent-actions/20230516

 

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May 17, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended the South Sudan Sanctions Regulations and reissued them in their entirety.

 

https://ofac.treasury.gov/media/931756/download?inline and https://ofac.treasury.gov/recent-actions/20230517

 

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May 17, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) settled with Murad, LLC for $3,334,286 and with a former senior executive of Murad, LLC for $175,000 related to apparent violations of the Iranian Transactions and Sanctions Regulation. Murad, LLC (the “Company”), a cosmetics company based in El Segundo, California, has agreed to pay $3,334,286 to settle its potential civil liability for an apparent violation of OFAC sanctions on Iran.  This apparent violation resulted from the Company’s participation in a conspiracy to engage in the unauthorized export of goods and services from the United States to Iran over an approximately eight-year period.  The conspiracy, which ended in 2018, resulted in at least 62 exports of Company products, as well as the export of services to Iran, totaling more than $11 million.  OFAC determined that the Company voluntarily self-disclosed its violation following its acquisition by Unilever United States, Inc. (“Unilever US”) and that the Company’s apparent violation was egregious.

 

A former senior Company executive (“U.S. Person-1”) has separately agreed to pay $175,000 to settle their potential civil liability for three apparent violations of OFAC’s Iran sanctions arising from their role as a manager at the Company.  These apparent violations occurred between June 2016 and September 2017.  OFAC determined that U.S. Person-1’s apparent violations were not voluntarily self-disclosed and that their conduct was egregious.

 

https://ofac.treasury.gov/media/931761/download?inline

 

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May 19, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 13E, “Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024;” General License 66, “Authorizing the Wind Down of Transactions Involving Public Joint Stock Company Polyus;” General License 67, “Authorizing Certain Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Public Joint Stock Company Polyus;” and General License 68, “Authorizing the Wind Down of Transactions Involving Certain Universities and Institutes.”

 

General License 13E: U.S. persons, or entities owned or controlled, directly or indirectly, by a U.S. person, are authorized to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations, or certifications, to the extent such transactions are prohibited by Directive 4 under Executive Order 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation, provided such transactions are ordinarily incident and necessary to the day-to-day operations in the Russian Federation of such U.S. persons or entities, through 12:01 a.m. eastern daylight time, August 17, 2023.

 

https://ofac.treasury.gov/media/931786/download?inline

 

General License 66: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind-down of any transaction involving Public Joint Stock Company Polyus, or any entity in which Public Joint Stock Company Polyus owns, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern daylight time, August 17, 2023, provided that any payment to a blocked person must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).

 

https://ofac.treasury.gov/media/931791/download?inline

 

General License 67: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the divestment or transfer, or the facilitation of the divestment or transfer, of debt or equity of Public Joint Stock Company Polyus, or any entity in which Public Joint Stock Company Polyus owns, directly or indirectly, a 50 percent or greater interest, purchased prior to May 19, 2023 (“covered debt or equity”), to a non-U.S. person are authorized through 12:01 a.m. eastern daylight time, August 17, 2023.

 

All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to facilitating, clearing, and settling trades of covered debt or equity that were placed prior to 4:00 p.m. eastern daylight time, May 19, 2023, are authorized through 12:01 a.m. eastern daylight time, August 17, 2023.

 

All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the wind-down of derivative contracts entered into prior to 4:00 p.m. Eastern daylight time, May 19, 2023, that (i) include a blocked person as a counterparty or (ii) are linked to covered debt or equity are authorized through 12:01 a.m. eastern daylight time, August 17, 2023, provided that any payments to a blocked person are made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).

 

https://ofac.treasury.gov/media/931796/download?inline

 

General License 68: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind-down of any transaction involving one or more of the following blocked persons are authorized through 12:01 a.m. Eastern daylight time, July 18, 2023, provided that any payment to a blocked person must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR):

(1) Federal State Budgetary Educational Institution of Higher Education Grozny State Oil  Technical University Named After Academician M.D. Millionshchikov;

(2) Federal State Budget Educational Institution of Higher Education Saint Petersburg  Mining University;

(3) Federal State Budgetary Educational Institution of Higher Education Sergo  Ordzhonikidze Russian State University for Geological Prospecting;

(4) Federal State Budgetary Educational Institution of Higher Vocational Education  Gubkin Russian State University of Oil and Gas;

(5) State Budgetary Educational Institution of Higher Education Almetyevsk State Oil  Institute; or

(6) Any entity in which one or more of the above persons own, directly or indirectly,  individually or in the aggregate, a 50 percent or greater interest.

 

https://ofac.treasury.gov/media/931801/download?inline

 

OFAC also issued Russia-related Directive 4 under Executive Order (E.O.) 14024, as amended, and updating Frequently Asked Questions (FAQs) 998-1002, 1004-1005, and 1118 to reflect the amendment.  Russia-related Directive 4, as amended, imposes an additional reporting requirement on U.S. persons to identify assets of entities subject to Russia-related Directive 4, as amended, which U.S. persons may hold.  U.S. persons must submit a report to OFACreport@treasury.gov on or before June 18, 2023, and annually thereafter, on property in their possession or control with an interest, direct or indirect of an entity subject to Russia-related Directive 4, as amended (see FAQ 998).  Note that existing licenses or authorizations issued by OFAC pursuant to the prior version of Russia-related Directive 4 remain in effect.

 

Directive 4 under Executive Order (E.O.) 14024: Pursuant to sections 1(a)(iv), 1(d), and 8 of Executive Order 14024, “Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation” (the “Order”), the Director of the Office of Foreign Assets Control has determined, in consultation with the Department of State, that the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation are political subdivisions, agencies, or instrumentalities of the Government of the Russian Federation, and that the following activities by a United States person are prohibited, except to the extent provided by law, or unless licensed or otherwise authorized by the Office of Foreign Assets Control:  any transaction involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation, including any transfer of assets to such entities or any foreign exchange transaction for or on behalf of such entities. All other activities with entities determined to be subject to the prohibitions of this Directive, or involving their property or interests in property, are permitted, provided that such activities are not otherwise prohibited by law, the Order, or any other sanctions program implemented by the Office of Foreign Assets Control.

 

Except to the extent otherwise provided by law or unless licensed or otherwise authorized by the Office of Foreign Assets Control, the following are also prohibited:

(1) any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions of this Directive; and

(2) any conspiracy formed to violate any of the prohibitions of this Directive.

 

https://ofac.treasury.gov/media/918806/download?inline

 

Frequently Asked Questions:

 

Question 998: What are the requirements of Directive 4 under Executive Order (E.O.) 14024, “Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation,” as amended (Russia-related Sovereign Transactions Directive)?

 

Answer: The Russia-related Sovereign Transactions Directive prohibits U.S. persons from engaging in any transaction involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation (collectively, “Directive 4 entities”), including any transfer of assets to such entities or any foreign exchange transaction for or on behalf of such entities.  Effective February 28, 2022, U.S. persons may not engage in any transactions involving these entities unless exempt or authorized by the Office of Foreign Assets Control (OFAC).  This includes both direct and indirect transactions involving any Directive 4 entity.  Prohibited transactions include trade or financial transactions and other dealings in which U.S. persons may not engage unless exempt or expressly authorized by OFAC.

 

The Russia-related Sovereign Transactions Directive also prohibits: (1) any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions of the Russia-related Sovereign Transactions Directive; and (2) any conspiracy formed to violate any of the prohibitions of the Russia-related Sovereign Transactions Directive.

This action effectively immobilizes any assets of the Directive 4 entities that are held in the United States or by U.S. persons, wherever located, unless exempt or authorized by OFAC.

 

Effective February 28, 2022, U.S. financial institutions must reject transactions involving any Directive 4 entity, unless exempt or authorized by OFAC, and file a report within ten business days in accordance with 31 CFR § 501.604.  OFAC issued general licenses that authorize certain limited transactions involving the Directive 4 entities (see FAQ 999).

 

On May 19, 2023, OFAC amended Directive 4 to require U.S. persons to submit a report to OFACreport@treasury.gov on or before June 18, 2023, and annually thereafter by June 30, regarding property in their possession or control in which any Directive 4 entity has an interest of any nature whatsoever, direct or indirect.  This reporting requirement is intended to identify assets of Directive 4 entities held by U.S. persons as of May 31, 2023, and annually thereafter, and is separate from the above-noted requirement under 31 CFR 501.604 to file reports on rejected transactions involving any Directive 4 entity.

 

Entities determined to be subject to the Russia-related Sovereign Transactions Directive are listed on OFAC’s Non-SDN Menu-Based Sanctions (NS-MBS) List.

 

https://ofac.treasury.gov/faqs/998

 

Question 999: What authorizations exist for entities subject to Directive 4 under Executive Order (E.O.) 14024, “Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation,” as amended (Russia-related Sovereign Transactions Directive)?

 

Answer: OFAC issued Russia-related General License (GL) 8G to authorize certain energy-related transactions involving the Central Bank of the Russian Federation that would be prohibited by the Russia-related Sovereign Transactions Directive  (see FAQs 976 and 977).

 

OFAC issued GL 13E to authorize U.S. persons to pay taxes, fees, or import duties and purchase or receive permits, licenses, registrations, or certifications, to the extent such transactions are prohibited by the Russia-related Sovereign Transactions Directive, provided such transactions are ordinarily incident and necessary to such persons’ day-to-day operations in the Russian Federation.  For further information on the types of transactions authorized by GL 13E, see FAQ 1118.

 

OFAC also issued GL 14, authorizing certain transactions involving any Directive 4 entity where the Directive 4 entity’s sole function in the transaction is to act as an operator of a clearing and settlement system.  GL 14 does not authorize any transfer of assets to or from any Directive 4 entity, or any transaction where a Directive 4 entity is either a counterparty or beneficiary to the transaction.  In addition, GL 14 does not authorize any debit to an account on the books of a U.S. financial institution of any Directive 4 entity.  See FAQ 1003.

 

Note that GL 8G, GL 13E, and GL 14 continue to authorize against the Russia-related Sovereign Transactions Directive.

 

https://ofac.treasury.gov/faqs/999

 

Question 1000: What sanctions are applicable to the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation?

 

Answer: The Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation are subject to several restrictions under the following directives:

  • Effective February 28, 2022, Directive 4 under Executive Order (E.O.) 14024, “Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation,” as amended (Russia-related Sovereign Transactions Directive), prohibits U.S. persons from engaging in any transaction involving these entities, including any transfer of assets to such entities or any foreign exchange transaction for or on behalf of such entities.  The Russia-related Sovereign Transactions Directive was amended on May 19, 2023, to include a reporting requirement. (see FAQ 998)
  • Pursuant to Directive 1A under E.O. 14024, “Prohibitions Related to Certain Sovereign Debt of the Russian Federation” (Russia-related Sovereign Debt Directive), the following activities by a U.S. financial institution are prohibited:
    • As of June 14, 2021, participation in the primary market for ruble or non-ruble denominated bonds issued after June 14, 2021, by the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation;
    • As of June 14, 2021, lending ruble or non-ruble denominated funds to the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation; and
    • As of March 1, 2022, participation in the secondary market for ruble or non-ruble denominated bonds issued after March 1, 2022, by the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation (see FAQ 888).
  • Effective August 19, 2019, the Russia-Related Directive (the “CBW Act Directive”) prohibits U.S. banks from participating in the primary market for non-ruble denominated bonds issued by the Russian sovereign and also prohibits U.S. banks from lending non-ruble denominated funds to the Russian sovereign.  The CBW Act Directive defines the term “Russian sovereign” as any ministry, agency, or sovereign fund of the Russian Federation, including the Central Bank of the Russian Federation, the National Wealth Fund, and the Ministry of Finance of the Russian Federation (see FAQs 675 and 676).

 

The Russia-related Sovereign Transactions Directive includes prohibitions more expansive than the Russia-related Sovereign Debt Directive and the CBW Act Directive; however, it is important to note that each directive operates independently of the others and may have different effective dates.  Transactions involving these entities must comply with all three directives described above.

 

Furthermore, OFAC published a Determination Pursuant to Section 1(a)(i) of E.O. 14024 and a Determination Pursuant to Section 1(a)(ii) of E.O. 14071.  OFAC published three associated FAQs and removed FAQs 964, 1037, and 1085, which were incorporated into new FAQs 1126-1128. These changes consolidate OFAC’s general guidance pertaining to Russia-related sector and service determinations.  OFAC is also amending FAQs 1059 and 1061-1062.

 

In addition, OFAC issued one new FAQ related to a designated person (1129).

 

https://ofac.treasury.gov/faqs/1000

 

Question 1001: Does the 50 Percent Rule apply to Directive 4 under Executive Order (E.O.) 14024, “Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation,” as amended (Russia-related Sovereign Transactions Directive)?

 

Answer: No.

 

https://ofac.treasury.gov/faqs/1001

 

Question 1002:  Can U.S. persons engage in indirect transactions with persons subject to Directive 4 under Executive Order (E.O.) 14024, “Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation,” as amended (Russia-related Sovereign Transactions Directive)?

 

Answer: No. The Russia-related Sovereign Transactions Directive prohibits U.S. persons from engaging in any transaction involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation, including any transfer of assets to such entities or any foreign exchange transaction for or on behalf of such entities.  Effective February 28, 2022, U.S. persons may not engage in any transactions involving these entities unless exempt or authorized by the Office of Foreign Assets Control (OFAC), including debiting funds from restricted accounts.  This includes both direct and indirect transactions. The Russia-related Sovereign Transactions Directive also prohibits: (1) any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions of the Russia-related Sovereign Transactions Directive; and (2) any conspiracy formed to violate any of the prohibitions of the Russia-related Sovereign Transactions Directive.

 

In light of the current economic situation in Russia, U.S. persons should be on alert for nonroutine foreign exchange transactions that may indirectly involve entities subject to the Russia-related Sovereign Transactions Directive, including transactions that are inconsistent with activity over the 12 months prior to February 28, 2022. For example, the Central Bank of the Russian Federation may seek to use import or export companies to engage in foreign exchange transactions on its behalf and obfuscate its involvement. U.S. persons should also exercise caution in engaging in foreign exchange transactions on the Moscow Exchange, given the current heightened risk that the Central Bank of the Russian Federation could be a counterparty to such transactions.

 

https://ofac.treasury.gov/faqs/1002

 

Question 1004: Are U.S. persons required to block transactions involving entities subject to Directive 4 under Executive Order (E.O.) 14024, “Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation,” as amended (Russia-related Sovereign Transactions Directive)?

 

Answer: No.  Although the prohibitions of the Russia-related Sovereign Transactions Directive effectively immobilize any assets of the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation (collectively, the “Directive 4 entities”) that are held in the United States or by U.S. persons, wherever located, the Russia-related Sovereign Transactions Directive does not impose blocking sanctions on the Directive 4 entities.  Rather, U.S. persons must reject transactions involving the Directive 4 entities, unless exempt or authorized by OFAC.

 

https://ofac.treasury.gov/faqs/1004

 

Question 1005: Does Directive 4 under Executive Order (E.O.) 14024, “Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation,” as amended (Russia-related Sovereign Transactions Directive), prohibit trading in the secondary markets for Russian sovereign debt?

 

Answer: No, the Russia-related Sovereign Transactions Directive does not prohibit trading in the secondary markets for debt or equity of the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation (collectively, “Directive 4 entities”), provided that no Directive 4 entity is a counterparty to such a transaction.  Please note, however, that Directive 1A under E.O. 14024, “Prohibitions Related to Certain Sovereign Debt of the Russian Federation” (Russia-related Sovereign Debt Directive), prohibits U.S. financial institutions from participation in the secondary market for ruble or non-ruble denominated bonds issued after March 1, 2022, by the Directive 4 entities.  However, the “new investment” prohibitions of E.O.14066, E.O. 14068, and E.O. 14071 prohibit U.S. persons from purchasing debt and equity securities issued by an entity in the Russian Federation.  Please see FAQ 1054.

 

https://ofac.treasury.gov/faqs/1005

 

Question 1118: As of December 2022, the Government of the Russian Federation may require a so-called “exit tax” payment prior to the divestment of assets located in the Russian Federation, potentially requiring transactions involving the Central Bank of the Russian Federation or the Ministry of Finance of the Russian Federation. Do U.S. sanctions prohibit the payment of this so-called “exit tax”? Does Russia-related General License (GL) 13E authorize transactions that involve the payment of this exit tax?

 

Answer: Directive 4 under Executive Order (E.O.) 14024, “Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation,” as amended (Russia-related Sovereign Transactions Directive), prohibits the following activities by U.S. persons:  any transaction involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation, including any transfer of assets to such entities or any foreign exchange transaction for or on behalf of such entities (collectively, “Directive 4 entities”).  As noted in FAQ 1002, this includes both direct and indirect transactions.

OFAC issued the Russia-related Sovereign Transactions Directive with the explicit aim of preventing the Government of the Russian Federation from leveraging these institutions and their holdings of international reserves in ways that would undermine the impact of U.S. sanctions.  Information currently available to OFAC suggests so-called “exit taxes” imposed by the Government of the Russian Federation involve payments to Directive 4 entities.  Consequently, U.S. persons whose divestment from the Russian Federation will involve the payment of such an exit tax require a specific license from OFAC prior to the payment of such tax, unless otherwise authorized by OFAC.

 

GL 13E authorizes U.S. persons or entities owned or controlled, directly or indirectly, by a U.S. person to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations, or certifications involving Directive 4 entities that would otherwise be prohibited by the Russia-related Sovereign Transactions Directive, provided such transactions are ordinarily incident and necessary to such persons’ day-to-day operations in the Russian Federation.  Payment of exit taxes is not considered ordinarily incident and necessary to day-to-day operations in the Russian Federation and, thus, is not authorized under GL 13E.

 

Therefore, U.S. persons whose divestment of assets in the Russian Federation will involve a payment of such an “exit tax” should seek a specific license from OFAC.  Such persons may submit a request for a specific license with OFAC’s Licensing Division online at https://ofac.treasury.gov/ofac-license-application-page.  License applications related to these payments should include information regarding the amount of the exit tax, the amount of ongoing taxes that would otherwise be paid to the Government of the Russian Federation should divestment not occur, the impact of a failure to pay the tax on the employees of the exiting company, the specific economic activity in Russia of the exiting company, and the impact on the Russian Federation of the divestment.  OFAC will expedite its review of such requests, which will be evaluated on a case-by-case basis.

 

While OFAC is aware that the Commission established by the Russian Federation to review such divestments may include individuals from entities subject to the Russia-related Sovereign Transactions Directive or individuals listed on the Specially Designated Nationals and Blocked Persons List, U.S. persons do not need to seek authorization from OFAC for their Russian buyers to submit an application to the Commission regarding a divestment transaction.

 

https://ofac.treasury.gov/faqs/1118

 

Furthermore, OFAC is publishing a Determination Pursuant to Section 1(a)(i) of E.O. 14024 and a Determination Pursuant to Section 1(a)(ii) of E.O. 14071.

 

Determination Pursuant to Section 1(a)(i) of E.O. 14024: Section 1(a)(i) of Executive Order (E.O.) 14024 of April 15, 2021 (“Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation”) imposes economic sanctions on any person determined by the Secretary of the Treasury, in consultation with the Secretary of State, or the Secretary of State, in consultation with the Secretary of the Treasury, to operate or have operated in such sectors of the Russian Federation economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State.   To further address the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States described in E.O. 14024, and in consultation with the Department of State and pursuant to 31 CFR § 587.802, I hereby determine that section 1(a)(i) of E.O. 14024 shall apply to the architecture, engineering, construction, manufacturing, and transportation sectors of the Russian Federation economy.  Any person determined, pursuant to section 1(a)(i) of E.O. 14024, to operate or have operated in such sectors shall be subject to sanctions pursuant to section 1(a)(i).

 

https://ofac.treasury.gov/media/931771/download?inline

 

Determination Pursuant to Section 1(a)(ii) of E.O. 14071: Pursuant to sections 1(a)(ii), 1(b), and 5 of Executive Order (E.O.) 14071 of April 6, 2022 (“Prohibiting New Investment in and Certain Services to the Russian Federation in Response to Continued Russian Federation Aggression”) and 31 CFR § 587.802, and in consultation with the Department of State, I hereby determine that the prohibitions in section 1(a)(ii) of E.O. 14071 shall apply to the following categories of services:  architecture and engineering.  As a result, the following activities are prohibited, except to the extent provided by law, or unless licensed or otherwise authorized by the Office of Foreign Assets Control:  the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of architecture services or engineering services to any person located in the Russian Federation.

 

This determination excludes the following:

(1) any service to an entity located in the Russian Federation that is owned or controlled,  directly or indirectly, by a United States person; and

(2) any service in connection with the wind-down or divestiture of an entity located in the Russian Federation that is not owned or controlled, directly or indirectly, by a Russian person.

 

This determination shall take effect beginning at 12:01 a.m. Eastern daylight time on June 18, 2023.

 

https://ofac.treasury.gov/media/931776/download?inline

 

OFAC is publishing three associated FAQs and removing FAQs 964, 1037, and 1085, which were incorporated into new FAQs 1126-1128. These changes consolidate OFAC’s general guidance pertaining to Russia-related sector and service determinations.

 

OFAC is also amending FAQs 1059 and 1061-1062.

 

In addition, OFAC is issuing one new FAQ related to a designated person (1129).

 

Question 1129: Do blocking sanctions issued by the State Department on May 19, 2023, on Polimetall AO apply to its corporate parent and affiliates?

 

Answer: On May 19, 2023, the Department of State designated Russia-based Polimetall AO pursuant to Executive Order (E.O.) 14024.  These blocking sanctions apply only to this entity and any entities in which it owns, directly or indirectly, a 50 percent or greater interest.

 

Neither the Department of State nor OFAC has designated this entity’s ultimate parent company, Jersey-based Polymetal International PLC, and based on information available to OFAC, Polymetal International PLC is not owned 50 percent or more by blocked persons or otherwise considered the blocked property of any blocked persons.  U.S. persons, therefore, are not prohibited from dealing with Polymetal International PLC, its non-blocked subsidiaries, or non-blocked affiliates to the extent the proposed dealings do not involve any blocked person, any interest in property of a blocked person, or any other activities prohibited pursuant to any OFAC sanctions authorities.

 

https://ofac.treasury.gov/faqs/1129

 

OFAC implemented new commitments made at the G7 Leaders’ Summit to hold Russia accountable for its war. OFAC’s sanctions on 22 individuals and 104 entities, with touchpoints in more than 20 countries or jurisdictions, target those attempting to circumvent or evade sanctions and other economic measures against Russia, the channels Russia uses to acquire critical technology, its future energy extraction capabilities, and Russia’s financial services sector. Additionally, OFAC expanded sanctions authorities to target new sectors of Russia’s economy and sever Russia’s access to new categories of services. See the link below for details.

 

https://ofac.treasury.gov/recent-actions/20230519

 

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May 23, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned four entities and one individual involved in obfuscated revenue generation and malicious cyber activities that support the Democratic People’s Republic of Korea (DPRK) Government. The DPRK conducts malicious cyber activities and deploys information technology (IT) workers who fraudulently obtain employment to generate revenue, including in virtual currency, to support the Kim regime and its priorities, such as its unlawful weapons of mass destruction and ballistic missile programs.

 

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Venezuela-related General License 8L, “Authorizing Transactions Involving Petróleos de Venezuela, S.A. (PdVSA) Necessary for the Limited Maintenance of Essential Operations in Venezuela or the Wind Down of Operations in Venezuela for Certain Entities.”

 

Venezuela-Related General License 8L: All transactions and activities prohibited by Executive Order (E.O.) 13850 of November 1, 2018, as amended by E.O. 13857 of January 25, 2019, or E.O. 13884 of August 5, 2019, each as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), that are ordinarily incident and necessary to the limited maintenance of essential operations, contracts, or other agreements, that:

(i) are for the safety or the preservation of assets in Venezuela;

(ii) involve PdVSA or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest; and

(iii) were in effect prior to July 26, 2019, are authorized through 12:01 a.m. eastern standard time, November 19, 2023, for the following entities and their subsidiaries (collectively, the “Covered Entities”):  • Halliburton;

  • Schlumberger Limited;
  • Baker Hughes Holdings LLC; and
  • Weatherford International, Public Limited Company.

 

Transactions and activities necessary for the safety or the preservation of assets in Venezuela that are authorized by this general license include transactions and activities necessary to ensure the safety of personnel or the integrity of operations and assets in Venezuela; participation in shareholder and board of directors meetings; making payments on third-party invoices for transactions and activities authorized by this general license, or incurred prior to April 21, 2020, provided such activity was authorized at the time it occurred; payment of local taxes and purchase of utility services in Venezuela; and payment of salaries for employees and contractors in Venezuela.

 

All transactions and activities prohibited by E.O. 13850, as amended, or E.O. 13884, each as incorporated into the VSR, that are ordinarily incident and necessary to the wind-down of operations, contracts, or other agreements in Venezuela involving PdVSA or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, and that were in effect prior to July 26, 2019, are authorized through 12:01 a.m. eastern standard time, November 19, 2023, for the Covered Entities.

 

https://ofac.treasury.gov/media/931811/download?inline

 

The following additions have been made to OFAC’s list of Specially Designated Nationals:

 

  • Kim, Sang Man of Russia and North Korea.

 

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

 

  • 110th Research Center of North Korea;
  • Chinyong Information Technology Cooperation Company of North Korea;
  • Pyongyang University Of Automation of North Korea; and
  • Technical Reconnaissance Bureau of North Korea.

 

https://home.treasury.gov/news/press-releases/jy1498 and https://ofac.treasury.gov/recent-actions/20230523

 

*******

 

May 24, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) targeted 26 individuals and entities connected with the terrorist group al-Shabaab, including 15 financial facilitators and operatives, four charcoal smugglers, and seven of their associated companies. This action targets key regional leaders, affiliates, and members of the terrorist group in Somalia who are involved in a wide range of activities in support of al-Shabaab, including financial facilitation, business activities, collection of funds on behalf of the terrorist group, the proliferation of Improvised Explosive Devices (IEDs), and illegal charcoal smuggling from Somalia, all of which have exacerbated local conflicts and suffering.

 

The following individual has been added to OFAC’s SDN List:

 

  • Aadan, Hassan Yariisow of Somalia;
  • Aadan, Siciid Abdullahi of Somalia;
  • Abdi, Abdulwahab Noor of the United Arab Emirates and Ethiopia;
  • Ayuto, Siyaat of Somalia;
  • Barreh, Mariam of Somalia and the United Arab Emirates;
  • Burhan, Macalin of Somalia;
  • Cali, Maxamed, Wayanta of Somalia;
  • Daoud, Suleiman Cabdi of Somalia;
  • Dheere, Mumin of Somalia;
  • Gabaane, Maxamed Dauud of Somalia;
  • Guhaad, Cumar of Somalia;
  • Hirey, Mohamed Abdullah of Somalia;
  • Hussein, Ali Ahmed of Somalia;
  • Ibrahim, Aadan Yusuf Saciid of Somalia;
  • Jiss, Aadan, Daaru Salaam of Somalia;
  • Kabadhe, Ahmed, Jubaland of Somalia;
  • Malayle, Shiek Aadan Abuukar of Somalia;
  • Mohamed, Mohamed Omar of Somalia;
  • Musse, Bashir Khalif of Somalia, United Arab Emirates and Djibouti;
  • Naaji, Ali Ahmed of Somalia;
  • Roobow, Cabdi of Somalia;
  • Siidow, Maxamed of Somalia;
  • Xuuroow, Hasaan Abshir of Somalia; and
  • Yare, Cali of Somalia.

 

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

 

  • Al Nezam Al Asasy General Trading L.L.C. of the United Arab Emirates;
  • Bushra Bachir Shipping And Logistics Services L.L.C. of the United Arab Emirates;
  • Jamame Brothers Company of Somalia;
  • Kismayo General Trading LLC of the United Arab Emirates;
  • Red Sea Transit & Transport Service of Djibouti;
  • Royal Shipping Agency of Djibouti; and
  • Sitti General Trading LLC of the United Arab Emirates.

 

https://home.treasury.gov/news/press-releases/jy1499 and https://ofac.treasury.gov/recent-actions/20230524

 

*******

 

May 25, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Ivan Aleksandrovich Maslov (Maslov), the head of Russian Private Military Company ‘Wagner’ (Wagner Group) paramilitary units and its principal administrator based in Mali. The Wagner Group and its leader, Yevgeniy Viktorovich Prigozhin, are sanctioned by multiple authorities, including for support of Russia’s war against Ukraine. The Wagner Group may be attempting to obscure its efforts to acquire military equipment for use in Ukraine, including by working through Mali and other countries where it has a foothold. The United States opposes efforts by any country to assist Russia through the Wagner Group.

 

OFAC added a Russia-related Designation to its Specially Designated Nationals list:

 

  • Maslov, Ivan Aleksandrovich of Russia.

 

https://ofac.treasury.gov/recent-actions/20230525 and https://home.treasury.gov/news/press-releases/jy1502

 

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May 30, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 17 individuals and entities involved in the international proliferation of equipment used to produce illicit drugs. These targets are directly or indirectly involved in the sale of pill press machines, die molds, and other equipment used to impress counterfeit trade markings of legitimate pharmaceuticals onto illicitly produced pills, often laced with fentanyl, frequently destined for U.S. markets. These designations target seven entities and six individuals based in China and one entity and three individuals based in Mexico.

 

OFAC also designated two Syrian money service businesses that have secretly helped the Syrian regime under Bashar al-Assad and its Hizballah and Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) allies maintain access to the international financial system in violation of international sanctions. OFAC is also designating three brothers who own and operate Al-Fadel Exchange. These designations are pursuant to Executive Order (E.O.) 13582 of August 17, 2011, “Blocking Property of the Government of Syria and Prohibiting Certain Transactions With Respect to Syria,” and also the Caesar Syrian Civilian Protection Act of 2019 (“Caesar Act”), and underscore the serious threat posed by actors in the financial system who actively enable violent regimes to circumvent sanctions.

 

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

 

  • Balwi, Fadel Ma’ruf of Syria;
  • Balwi, Muhammad Ma’ruf of Syria;
  • Balwi, Mut’i Ma’ruf of Syria;
  • Fei, Yiren of China;
  • Guo, Chunyan of China;
  • Guo, Ruiguang of China;
  • Guo, Yunnian of China;
  • Macias Trevizo, Ernesto Alonso of Mexico;
  • Martinez Trevizo, Mario Ernesto of Mexico;
  • Pan, Hao of China;
  • Rodriguez Almeida, Cinthia Adriana of Mexico; and
  • Zhao, Dongdong of China.

 

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

 

  • Al-Adham Exchange Company of Syria;
  • Al-Fadel Exchange And Money Transfer Company of Syria;
  • Mexpacking Solutions of Mexico;
  • Shenzhen Yason General Machinery CO., LTD. NANCHANG BRANCH of China;
  • Tdpmolds of China;
  • Yantai Mei Xun Trade CO., LTD. of China;
  • Yantai Yixun International Trade CO., LTD. of China;
  • Yason Electronics Technology CO., LIMITED of China;
  • Yason General Machinery CO., LTD. of China; and
  • Youli Technology Development CO., LTD. of China.

 

https://home.treasury.gov/news/press-releases/jy1507 and https://home.treasury.gov/news/press-releases/jy1508 and https://ofac.treasury.gov/recent-actions/20230530

 

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May 31, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia Related General License 69.

 

General License 69: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the processing of interest or principal payments on debt securities issued by International Investment Bank (IIB) prior to April 12, 2023, are authorized through 12:01 a.m. eastern daylight time June 30, 2023, provided that such interest or principal payments are not made to persons located in the Russian Federation and that any payments to a blocked person, wherever located, are made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).

 

Note: For the purposes of this general license, the term “person located in the Russian Federation” includes persons in the Russian Federation, individuals ordinarily resident in the Russian Federation, and entities incorporated or organized under the laws of the Russian Federation or any jurisdiction within the Russian Federation.

 

U.S. financial institutions are authorized to unblock interest or principal payments that were blocked on or after April 12, 2023, but before May 31, 2023, on debt securities issued by IIB prior to April 12, 2023, provided that the funds are unblocked solely to effect transactions authorized in this general license.

 

Note: U.S. financial institutions unblocking property pursuant to paragraph (b) of this general license are required to file an unblocking report pursuant to 31 CFR § 501.603.

 

https://ofac.treasury.gov/media/931816/download?inline

 

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Fines and Penalties

 

May 1, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with Poloniex, LLC (“Poloniex”).  Poloniex agreed to remit $7,591,630 to settle its potential civil liability for 65,942 apparent violations of sanctions against Crimea, Cuba, Iran, Sudan, and Syria.  Between January 2014 and November 2019, the Poloniex trading platform allowed customers apparently located in sanctioned jurisdictions to engage in online digital asset-related transactions—consisting of trades, deposits, and withdrawals—with a combined value of $15,335,349, despite having reason to know their location based on both Know Your Customer information and internet protocol address data.  The settlement amount reflects OFAC’s determination that Poloniex’s apparent violations were not voluntarily self-disclosed and were not egregious.

 

https://ofac.treasury.gov/recent-actions/20230501_33 and https://ofac.treasury.gov/media/931701/download?inline

 

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May 2, 2023: Jesus Alberto Olivarez, a 32-year-old U.S. citizen, has pleaded guilty to smuggling goods from the United States. Olivarez admitted to attempting to export 5,680 rounds of assorted pistol ammunition to Mexico. Olivarez faces up to 10 years in prison and a possible $250,000 maximum fine.

 

https://www.justice.gov/usao-sdtx/pr/american-living-mexico-caught-trying-export-5680-rounds-ammunition

 

*******

 

May 3, 2023: Godlove Nche Manchoe, age 44, of Bowie, Maryland, was sentenced to 46 months in federal prison, followed by two years of supervised release, for conspiracy and for illegally exporting firearms and ammunition from the United States to Nigeria without obtaining the required licenses from the U.S. State Department.  According to trial testimony and court documents, the purpose of the conspiracy was to assist separatists fighting against the government of Cameroon. According to his plea agreement, from at least November 2017 until July 19, 2019, Manchoe and his co-conspirators agreed to export firearms, ammunition, and other military-type items in violation of the federal smuggling statute, the Arms Export Control Act and other export laws.  Manchoe participated in meetings of the conspirators, both online and in person, including in the basement of co-conspirator Tamufor St. Michael’s residence, where the conspirators, including Manchoe, also reloaded ammunition, assembled firearms, and wrapped various items for overseas shipment.  Manchoe also donated and forwarded funds received from other co-conspirators to St. Michael, to be used towards the purchase of ammunition and/or weapons in furtherance of the conspiracy.

 

https://www.justice.gov/usao-md/pr/member-conspiracy-illegally-export-firearms-ammunition-and-military-type-items-assist

 

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May 5, 2023: 88 Fed. Reg. 29080: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Lizzette B. Jaimes for seven years until September 21, 2028. On September 21, 2021, Jaimes was convicted of violating 18 U.S.C. 554(a) for smuggling and attempting to smuggle various firearms from the United States to Mexico without the required licenses. As a result of her conviction, the Court sentenced Jaimes to 24 months of confinement, two years of supervised release, and a $200 special assessment.

 

https://www.federalregister.gov/documents/2023/05/05/2023-09598/in-the-matter-of-lizzette-b-jaimes-1006-sunflower-trail-austin-tx-78745-2783-order-denying-export

 

*******

 

May 5, 2023: 88 Fed. Reg. 29081: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Andres Morales for ten years until June 28, 2031. On June 28, 2021, Morales was convicted of violating 18 U.S.C. 554(a) for smuggling from the United States to Mexico approximately ten (10) to fifteen (15) Barrett .50 caliber rifles; and ten (10) or more AK-47 assault-style rifles. As a result of his conviction, the Court sentenced Morales to 84 months of confinement, three years of supervised release, and a $200 assessment.

 

https://www.federalregister.gov/documents/2023/05/05/2023-09597/in-the-matter-of-andres-morales-inmate-number-61387-479-fci-forrest-city-low-federal-correctional

 

*******

 

May 11, 2023: The Justice Department announced the seizure of 13 domains used by Specially Designated Nationals (SNDs), Specially Designated Global Terrorists (SDGTs), and their members associated with Lebanese Hezbollah.

 

According to court records, the United States obtained court authorization to seize five domains registered to the Public Interest Registry (PIR) – moqawama.org, almanarnews.org, manarnews.org, almanar-tv.org, and alshahid.org – and eight domains registered to Verisign Inc. – manartv.net, manarnews.net, almanar-tv.com, almanar-tv.net, alidaamouch.com, Ibrahim-alsayed.net, alemdad.net, and naimkassem.net.

 

https://www.justice.gov/opa/pr/justice-department-seizes-13-domains-used-lebanese-hezbollah-and-its-affiliates

 

*******

 

May 12, 2023: 88 Fed. Reg. 30721: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Adriana Gabriela Guajardo-Cavazos for seven years until November 12, 2027. On November 12, 2020, Guajardo-Cavazos (“Guajardo-Cavazos”) was convicted of violating 18 U.S.C. 554(a) for smuggling and attempting to smuggle from the United States to Mexico, approximately one (1) .243 caliber rifle, one (1) .22 caliber rifle, one (1) 12 gauge shotgun, one (1) .223 caliber magazine, and one (1) .22 caliber magazine. As a result of her conviction, the Court sentenced Guajardo-Cavazos to 36 months of confinement, three years of supervised release, and a $100 assessment.

 

https://www.federalregister.gov/documents/2023/05/12/2023-10102/in-the-matter-of-adriana-gabriela-guajardo-cavazos-calle-manuel-otiz-49-matamoros-tamaulipas-mexico

 

*******

 

May 12, 2023: 88 Fed. Reg. 30722: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Colby Stephan Skolseg for five years until September 10, 2025. On September 10, 2020, Skolseg was convicted of violating 18 U.S.C. 554(a) knowingly and unlawfully attempting to export eight firearms from the United States to Canada. As a result of his conviction, the Court sentenced Skolseg to 12 months and one day in prison, one year of supervised release, and a $100 assessment.

 

https://www.federalregister.gov/documents/2023/05/12/2023-10103/in-the-matter-of-colby-stephan-skolseg-94-pleasant-view-drayton-valley-alberta-canada-t7a-1m9-order

 

*******

 

May 12, 2023: 88 Fed. Reg. 30720: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Juan Antonio Cepeda for seven years until March 25, 2028. On March 25, 2021, Cepeda was convicted of violating 18 U.S.C. 554(a) for smuggling and attempting to smuggle from the United States to Mexico firearms, ammunition, and firearms magazines. As a result of his conviction, the Court sentenced Cepeda to 41 months of confinement, three years of supervised release, and a $100 assessment.

 

https://www.federalregister.gov/documents/2023/05/12/2023-10101/in-the-matter-of-juan-antonio-cepeda-901-e-olive-street-apartment-number-8-laredo-texas-78041-order

 

*******

 

May 12, 2023: 88 Fed. Reg. 30719: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Juan Marvin Garcia for seven years until October 13, 2028. On October 13, 2021, Garcia was convicted of violating 18 U.S.C. 554(a) for smuggling from the United States to Mexico approximately 12,800 rounds of 7.62 x 39mm ammunition, 150 rounds of 38 Special ammunition, 60 rounds of .223 caliber ammunition, and one Stoeger Cougar 9 mm pistol without written approval from United States Department of Commerce. As a result of his conviction, the Court sentenced Garcia to 36 months of confinement, three years of supervised release, and a $100 assessment.

 

https://www.federalregister.gov/documents/2023/05/12/2023-10104/in-the-matter-of-juan-marvin-garcia-inmate-number-23021-509-fci-beaumont-medium-federal-correctional

 

*******

 

May 12, 2023: 88 Fed. Reg. 30718: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Virgil Griffith for ten years until April 12, 2032. On April 12, 2022, Griffith was convicted of two counts of violating the International Emergency Economic Powers Act (50 U.S.C 1701, et seq.) (“IEEPA”) for exporting services to North Korea without the required authorization from the Department of Treasury and evading and avoiding U.S. sanctions on North Korea. As a result of his conviction, the Court sentenced Griffith to 63 months of confinement, three years of supervised release, a $100 assessment, and a $100,000 criminal fine.

 

https://www.federalregister.gov/documents/2023/05/12/2023-10105/in-the-matter-of-virgil-griffith-inmate-number-79038-112-fci-allenwood-low-federal-correctional

 

*******

 

May 16, 2023: The Justice Department announced criminal charges in five cases and four arrests from five different U.S. Attorney’s offices in connection with the recently launched multi-agency Disruptive Technology Strike Force. The Disruptive Technology Strike Force is co-led by the Departments of Justice and Commerce to counter efforts by hostile nation-states to illicitly acquire sensitive U.S. technology to advance their authoritarian regimes and facilitate human rights abuses. The Strike Force’s work has led to the unsealing of charges against multiple defendants in five cases accused of crimes including export violations, smuggling and theft of trade secrets.

 

Two of these cases involve the disruption of alleged procurement networks created to help the Russian military and intelligence services obtain sensitive technology in violation of U.S. laws. In the Eastern District of New York, a Greek national was arrested on May 9 for federal crimes in connection with allegedly acquiring more than ten different types of sensitive technologies on behalf of the Russian government and serving as a procurement agent for two Russian Specially Designated Nationals (SDNs) operating on behalf of Russia’s intelligence services. In the District of Arizona, two Russian nationals were arrested for their involvement in a procurement scheme to supply multiple Russian commercial airline companies – which were subject to bans from engaging in certain types of commercial transactions – with export-controlled parts and components, including braking technology.

 

Two of the other cases charge former software engineers with stealing software and hardware source code from U.S. tech companies in order to market it to Chinese competitors. In the Central District of California, a senior software engineer was arrested on May 5 for theft of trade secrets for allegedly stealing source code used in metrology software which is used in “smart” automotive manufacturing equipment. The defendant then allegedly marketed the stolen technology to multiple Chinese companies. In the Northern District of California, a citizen of the People’s Republic of China (PRC) and former Apple engineer is accused of allegedly stealing thousands of documents containing the source code for software and hardware pertaining to Apple’s autonomous vehicle technology. This defendant fled to China and is believed to be working for a PRC-based autonomous vehicle competitor.

 

The fifth and final case involves a Chinese procurement network established to provide Iran with materials used in weapons of mass destruction (WMDs) and ballistic missiles. In the Southern District of New York, a PRC national is charged with allegedly participating in a scheme to use his employer to conduct transactions with a U.S. financial institution for the benefit of a purported Iranian entity, as part of an effort to provide isostatic graphite, a material used in the production of WMDs, to Iran.

 

https://www.justice.gov/opa/pr/justice-department-announces-five-cases-part-recently-launched-disruptive-technology-strike

 

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May 16, 2023: The former president of a New York-based non-governmental entity (NGO) was sentenced to three years and six months in prison for paying bribes to elected officials of the Republic of the Marshall Islands (RMI) in exchange for passing certain legislation. According to court documents, beginning in or around 2016 and continuing until at least August 2020, Cary Yan, 51, conspired with others, including his assistant, Gina Zhou, in connection with a multi-year bribery scheme. Yan offered and paid tens of thousands of dollars in bribes to high-level RMI officials, including members of the RMI legislature, in exchange for supporting legislation creating a semi-autonomous region within the RMI called the Rongelap Atoll Special Administrative Region (RASAR) that would benefit the business interests of Yan and his associates. Yan carried out the bribery scheme using the New York-based NGO, including the physical use of its headquarters in Manhattan, to meet and communicate with RMI officials.

In December 2022, Yan and Zhou each pleaded guilty to one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practice Act. On Feb. 16, Zhou was sentenced to two years and seven months in prison for her role in the scheme.

 

https://www.justice.gov/opa/pr/former-head-non-governmental-organization-sentenced-bribing-officials-republic-marshall

 

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May 16, 2023: A criminal complaint was unsealed in federal court in Brooklyn, charging Dr. Nikolaos “Nikos” Bogonikolos with wire fraud conspiracy and smuggling.  Bogonikolos, a Greek national, was arrested in Paris, France, on May 9, 2023, and remains in custody pending the resolution of extradition proceedings.

 

As alleged, while ostensibly operating as a defense contractor for NATO and other ally countries, the defendant and his Aratos Group were double-dealing, helping to fuel Russia’s war effort and their development of next-generation weapons.

 

As alleged, Bogonikolos conspired with a network of companies orchestrated by the Russian intelligence services to fraudulently acquire and then smuggle U.S.-origin military and dual-use technologies to aid the Russian defense and security sectors. Bogonikolos procured sensitive equipment meeting NATO specifications designed for tactical battlefield conditions as well as components with applications in space-based and cryptographic communications, on behalf of his Russian intelligence handlers seeking to improve their country’s warfighting capabilities.

 

As alleged in the complaint, the defendant headed the Aratos Group (Aratos), a collection of defense and technology companies in the Netherlands and Greece, which are both member countries of the North Atlantic Treaty Organization (NATO).  According to Aratos’ website, the companies’ areas of expertise included “Space Technologies,” “Homeland Security,” “Blockchain,” and “Counter-Drone Systems.”

 

https://www.justice.gov/usao-edny/pr/founder-and-president-european-defense-conglomerate-charged-helping-russian-military?utm_source=substack&utm_medium=email

 

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May 17, 2023: Tamufor Nchumuluh St. Michael, age 42, of Rosedale, Maryland, was sentenced to 30 months in federal prison, followed by two years of supervised release, for conspiracy and for violating the Arms Export Control Act by sending firearms, ammunition, and other military-type items from the United States to Nigeria without obtaining a license from the U.S. Department of State.  The arms were intended to assist separatists fighting against the government of Cameroon.

 

According to his plea agreement, from at least November 2017 continuing until July 19, 2019, St. Michael and his co-defendants conspired with each other and with others to export firearms, ammunition, and other military-type items from the United States to Nigeria.  Between March 2018 and July 2019, St. Michael and his co-conspirators purchased, both over the Internet and in person, large amounts of ammunition, ammunition reloading supplies, firearms, firearm parts, and other military-type items, which were sent to St. Michael’s residence.  St. Michael purchased at least 24 different rifles online, which he picked up at a firearms retailer in Essex, Maryland.  In each case, he certified an ATF Firearms Transaction Form certifying that he was the actual transferee or buyer of the firearm.  St. Michael knew the certificates were false because the guns were purchased to export overseas.

 

https://www.justice.gov/usao-md/pr/rosedale-man-sentenced-30-months-federal-prison-conspiracy-smuggle-firearms-and-other

 

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May 18, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has announced that Regal Beloit FZE (Dubai), a controlled-in-fact subsidiary of Regal Benoit America, Inc., has agreed to a civil penalty of $283,500 to settle charges that it committed 84 violations of EAR § 760.5 Failing to Report the Receipt of a Request to Engage in a Restricted Trade Practice or Foreign Boycott Against a Country Friendly to the United States. In a Proposed Charging Letter, BIS alleged that during the period February 2017 through September 2021, Regal Benoit FZE (Dubai) received on 84 occasions requests to take an action that would have the effect of furthering or supporting a restrictive trade practice of unsanctioned foreign boycott. By failing to report the receipt of these requests, BIS alleged that the company had committed 84 violations of EAR § 760.5.

 

https://efoia.bis.doc.gov/index.php/documents/antiboycott/alleged-antiboycott-violations-2023/1508-a768/file

 

*******

 

May 22, 2023: 88 Fed. Reg. 32727: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Carlos Daniel Rodriguez for ten years until December 2, 2031. On December 2, 2021, Rodriguez was convicted of violating 18 U.S.C. 554(a) for smuggling from the United States to Mexico, approximately 15,000 rounds of 5.56-millimeter ammunition and approximately 193 thirty-round magazines designed for use in AR-type rifles. As a result of his conviction, the Court sentenced Rodriguez to 46 months of confinement, three years of supervised release, and a $100 assessment.

 

https://www.federalregister.gov/documents/2023/05/22/2023-10872/in-the-matter-of-carlos-daniel-rodriguez-inmate-number-55257-509-fci-bastrop-federal-correctional

 

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May 22, 2023: 88 Fed. Reg. 32728: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Manuel Alberto Munoz-Sandoval for five years until November 10, 2026. On November 10, 2021, Munoz-Sandoval was convicted of violating 18 U.S.C. 554(a) for smuggling from the United States to Mexico, semi-automatic firearms, to wit: an Iberia Hi-Point, model JCP, .40 caliber pistol; a Smith and Wesson, model SD9VE, 9 mm caliber pistol; a Taurus, model PT111 G2A, 9mm caliber pistol; and a Ruger, model LCP II, .380 caliber pistol. As a result of his conviction, the Court sentenced Munoz-Sandoval to 28 months of confinement with credit for time served, two years of supervised release, and a $100 assessment.

 

https://www.federalregister.gov/documents/2023/05/22/2023-10871/in-the-matter-of-manuel-alberto-munoz-sandoval-inmate-number-17385-509-fci-big-spring-federal

 

*******

 

May 22, 2023: A federal jury convicted Ross Roggio, 54, of Stroudsburg, Pennsylvania, for numerous crimes, including the torture of an Estonian citizen in 2015 in the Kurdistan region of Iraq, in connection with the operation of an illegal weapons manufacturing plant in Kurdistan.

 

According to court documents and evidence presented at trial, Roggio arranged for Kurdish soldiers to abduct and detain the victim at a Kurdish military compound where Roggio suffocated the victim with a belt, threatened to cut off one of his fingers, and directed Kurdish soldiers to repeatedly beat, tase, choke, and otherwise physically and mentally abuse the victim over a 39-day period. The victim was employed at a weapons factory that Roggio was developing in the Kurdistan region of Iraq that was intended to manufacture M4 automatic rifles and Glock 9mm pistols.

 

In connection with the weapons factory project, which included Roggio providing training to foreign persons in the operation, assembly, and manufacturing of the M4 automatic rifle, Roggio also illegally exported firearm parts that were controlled for export by the Departments of State and Commerce.

 

Roggio was convicted of torture, conspiracy to commit torture, conspiring to commit an offense against the United States, exporting weapons parts and services to Iraq without the approval of the Department of State, exporting weapons tools to Iraq without the approval of the Department of Commerce, smuggling goods, wire fraud, and money laundering. He is scheduled to be sentenced on Aug. 23 and faces a maximum sentence of life in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

 

https://www.justice.gov/opa/pr/man-convicted-torture-and-exporting-weapons-parts-and-related-services-iraq

 

*******

 

May 23, 2023: 88 Fed. Reg. 33086: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Johnathon Martin Soria for ten years until July 12, 2031. On July 12, 2021, Soria was convicted of violating 18 U.S.C. 554(a) for smuggling or attempting to smuggle from the United States to Mexico firearms as defined in Category I of the United States Munitions List, without a license or written authorization. As a result of his conviction, the Court sentenced Soria to 50 months of confinement, with credit for time served, three years of supervised release, a $100 assessment, and a $1,000 criminal fine.

 

https://www.federalregister.gov/documents/2023/05/23/2023-10912/in-the-matter-of-johnathon-martin-soria-1103-e-main-street-eagle-lake-tx-77434-2829-order-denying

 

*******

 

May 23, 2023: 88 Fed. Reg. 33087: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Reynoldo Lopez-Cota for ten years until May 7, 2031. On May 7, 2021, Lopez-Cota was convicted of violating 18 U.S.C. 371 and 18 U.S.C. 554(a) for conspiracy and smuggling 1,000 rounds of 7.62 caliber ammunition, 100 rounds of .223 drum magazine, and a one-speed loader from the United States to Mexico. As a result of his conviction, the Court sentenced Lopez-Cota to 24 months of confinement with credit for time served, 36 months of supervised release, and a $200 special assessment.

 

https://www.federalregister.gov/documents/2023/05/23/2023-10883/in-the-matter-of-reynoldo-lopez-cota-1625-west-fort-lowell-rd-apt-44-tucson-arizona-85705-order

 

*******

 

May 23, 2023: 88 Fed. Reg. 33088: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Leonel Apolinar Lopez for ten years until March 9, 2030. On March 9, 2020, Lopez was convicted of violating 18 U.S.C. 371 for conspiring to straw purchase and smuggle firearms to Mexico. As a result of his conviction, the Court sentenced Lopez to 12 months and one day of confinement, with credit for time served and 36 months of supervised release.

 

https://www.federalregister.gov/documents/2023/05/23/2023-10966/in-the-matter-of-leonel-apolinar-lopez-7122-w-kingman-street-phoenix-az-85043-7818-order-denying

 

*******

 

May 23, 2023: 88 Fed. Reg. 33089: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Luis Manuel Bray-Vazquez for ten years until August 24, 2031. On August 24, 2021, Bray-Vazquez was convicted of violating 18 U.S.C. 554(a) for smuggling and attempting to smuggle from the United States to Mexico, five 7.62x39mm caliber rifles, four 7.62x39mm caliber pistols, three 5.56 caliber rifles, one Barrett .50 caliber rifle, one .45 ACP caliber pistol, and one 9x19mm caliber pistol. As a result of his conviction, the Court sentenced BrayVazquez to 46 months of confinement, with credit for time served, 36 months of supervised release, and a $100 special assessment.

 

https://www.federalregister.gov/documents/2023/05/23/2023-10907/in-the-matter-of-luis-manuel-bray-vazquez-inmate-number-16344-509-fci-lompoc-federal-correctional

 

*******

 

May 23, 2023: 88 Fed. Reg. 33090: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Luis Sanchez for six years until October 15, 2026. On October 15, 2020, Sanchez was convicted of violating 18 U.S.C. 371. Specifically, Sanchez was convicted of conspiring to export firearms using an alias from the United States to the Dominican Republic concealed in household items. As a result of his conviction, the Court sentenced Sanchez to 12 months and one day of confinement, three years of supervised release, and a $100 special assessment.

 

https://www.federalregister.gov/documents/2023/05/23/2023-10964/in-the-matter-of-luis-sanchez-56-mill-street-belleville-nj-07109-order-denying-export-privileges

 

May 23, 2023: 88 Fed. Reg. 33091: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Victor Ceballos Polanco for five years until November 6, 2025. On November 6, 2020, Polanco was convicted of violating 18 U.S.C. 371 for conspiring to export firearms using an alias from the United States to the Dominican Republic concealed in household items. As a result of his conviction, the Court sentenced Polanco to 3 years of probation, and a $100 special assessment.

 

https://www.federalregister.gov/documents/2023/05/23/2023-10909/in-the-matter-of-victor-ceballos-polanco-22-river-birch-road-nw-cartersville-ga-30121-order-denying

 

*******

 

May 23, 2023: 88 Fed. Reg. 33092: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Oscar Ignacio Lopez Soto for ten years until August 10, 2031. On August 10, 2021, Soto was convicted of violating 18 U.S.C. 371 for conspiring to straw purchase and smuggle firearms to Mexico. As a result of his conviction, the Court sentenced Soto to 12 months and one day of confinement, with credit for time served, 36 months of supervised release, and a $100 special assessment.

 

https://www.federalregister.gov/documents/2023/05/23/2023-10965/in-the-matter-of-oscar-ignacio-lopez-soto-7404-w-maldonado-road-laveen-az-85339-order-denying-export

 

*******

 

May 23, 2023: 88 Fed. Reg. 33093: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Mario Ismael Quijada, Jr. for ten years until January 13, 2030. On January 13, 2020, Quijada was convicted of violating 18 U.S.C. 371 for conspiring to straw purchase and smuggle firearms to Mexico. As a result of his conviction, the Court sentenced Quijada to 12 months and one day of confinement, with credit for time served and 36 months of supervised release.

 

https://www.federalregister.gov/documents/2023/05/23/2023-10961/in-the-matter-of-mario-ismael-quijada-jr-10039-w-parkway-drive-tolleson-az-85353-order-denying

 

*******

 

May 23, 2023: 88 Fed. Reg. 33093: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Alex Yun Cheong Yue for ten years until March 3, 2031. On March 3, 2021, Yue was convicted of three counts of violating the International Emergency Economic Powers Act (50 U.S.C 1701, et seq.) (“IEEPA”) and 18 U.S.C. 554(a) for conspiring to export and knowingly and willfully exporting, attempting to export, and causing to be exported cesium atomic clocks from the United States to Hong Kong without first obtaining the required licenses from the Department and one count of violating 18 U.S.C. 554(a) for fraudulently and knowingly buying, selling, and facilitating the transportation, concealment, and sale of cesium atomic clocks to Hong Kong. As a result of his conviction, the Court sentenced Yue to time served, three years of supervised release, and a $400 court assessment. The Court also ordered the civil forfeiture of Yue’s interest in $5,690.67 to the United States.

 

https://www.federalregister.gov/documents/2023/05/23/2023-10963/in-the-matter-of-alex-yun-cheong-yue-9723-cortada-street-south-el-monte-ca-91733-order-denying

 

*******

 

May 23, 2023: 88 Fed. Reg. 33094: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of David Alberto Duarte-Marquez for ten years until January 26, 2031. On January 26, 2021, Duarte-Marquez was convicted of violating 18 U.S.C. 554(a) for smuggling and attempting to smuggle from the United States to Mexico M203 40 mm grenade launcher barrels. As a result of his conviction, the Court sentenced Duarte-Marquez to 33 months of confinement with credit for time served, three years of supervised release: and a $100 special assessment.

 

https://www.federalregister.gov/documents/2023/05/23/2023-10884/in-the-matter-of-david-alberto-duarte-marquez-calle-prol-san-juan-sur-50-fracc-san-carlos-nogales

 

*******

 

May 23, 2023: 88 Fed. Reg. 33095: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Jacobo Javier Garza-Solis for ten years until October 16, 2030. On October 16, 2020, Garza-Solis was convicted of violating section 38 of the Arms Export Control Act (22 U.S.C 2778) (“AECA”) for knowingly and willfully exporting and causing to be exported and attempting to export and attempting to cause to be exported from the United States to Mexico, one Glock, .40 caliber, semiautomatic handgun charged with a magazine containing 13 rounds of ammunition and approximately 1,540 rounds of 7.62 x 39mm ammunition, which were designated as defense articles on the United States Munitions List, without first obtaining from the Department of State a license for such export or written authorization. As a result of his conviction, the Court sentenced Garza-Solis to 82 months in prison, three years of supervised release, and a $100 assessment.

 

https://www.federalregister.gov/documents/2023/05/23/2023-10967/in-the-matter-of-jacobo-javier-garza-solis-1614-solar-dr-mission-tx-78572-order-denying-export

MAY 2023 EXPORT CONTROL REGULATIONS UPDATES Read More »

BIS Issues Largest Civil Penalty In History for Export from Abroad of Foreign Manufactured EAR99 Hard Disk Drives to Huawei in China

By:      Keil Ritterpusch – Vice President – Compliance – FD Associates, Inc.

 

On April 19, 2023, the U.S. Department of Commerce Bureau of Industry & Security (“BIS”) issued a $300 million civil penalty to Seagate Technology LLC of Fremont, California (“Seagate US”) and Seagate US’s Singaporean affiliate, Seagate Singapore International Headquarters Pte. Ltd. (“Seagate Singapore”) for the export from abroad to Huawei Technologies Co. Ltd. (“Huawei”) of approximately 7,420,496 foreign manufactured Hard Disk Drives (“HDDs”) for a total sales price of $1,104,732,205.

BIS determined, through an extended investigation into sales by Seagate US and Seagate Singapore to Huawei and through the review of technologies and equipment used by Seagate affiliated companies manufacturing HDDs, that all HDDs manufactured by Seagate in China, Northern Ireland, Malaysia, Singapore, and Thailand were “subject to the EAR” when sold to Huawei (directly or by downstream parties where Seagate had knowledge).  BIS reached this conclusion by applying the Export Administration Regulations’ (“EAR’s”) Foreign Direct Product Rule (“FDPR”) specific to transactions involving Huawei entities, EAR § 734.9(e)(1), to the sale of foreign manufactured HDDs by Seagate US foreign affiliates.[1]

Specifically, BIS found that Seagate HDDs manufactured outside the United States were manufactured using technology originating in the United States that was controlled for export by Export Control Classification Number (“ECCN”) 3E991, among other ECCNs, and that Seagate plants manufacturing HDDs abroad used ECCN 3B992 inspection equipment for detecting defects on HDD substrates and media.  From information on Seagate US’s website, all Seagate HDDs are listed as EAR99 items.  The use of this technology and equipment alone made all of their products, when sold to Huawei, “subject to the EAR”.

In reviewing information on the civil penalty imposed by BIS in BIS’s public announcement of the penalty, the BIS Order, the Settlement Agreement, and the Proposed Charging Letter (“PCL”) for the civil penalty, it is clear that two major aggravating factors were at play in this case. The first was that all of Seagate’s competitors publicly stated after August 2020 that they would not sell HDDs to Huawei.  The second aggravating factor was that Seagate not only continued to sell to Huawei, but substantially increased its sales and entered into long-term supply agreements with Huawei.

 

(https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3264-2023-04-19-bis-press-release-seagate-settlement/file)

Nothing in the published documents references any defenses claimed by Seagate for the sale of its foreign manufactured HDDs to Huawei.  However, we can deduce that Seagate determined – albeit informally — that its foreign manufactured HDDs were “not subject to the EAR”.  What the Seagate civil penalty case says for any worldwide party who sells products to Huawei or any of the 48 other Entity List entities with special FDPR Rules in EAR § 734.9(e)(2) is that the bar for determining whether your foreign manufactured products are “subject to the EAR” is very low.  BIS declared emphatically in the press release for the Seagate civil penalty that companies:

“need to evaluate [their] entire manufacturing process to determine if specified U.S. technologies, [equipment] or software [are] used in building the essential tools used in production” and if specific U.S. technologies, equipment, or software are used directly in the manufacture of products outside of the United States.

Given that Huawei was added to the Entity List with a special FDPR in August 2020 and more than 45 entities were added to the Entity List with similar (if not more expansive) FDPR requirements in October 2022, this major compliance action by BIS should be a warning.  BIS’s Director of Export Enforcement John Sonderman stated this expressly in the public release for the Seagate civil penalty:

“Those who would violate our FDP rule restrictions are now on notice that these cases will be investigated and charged, as appropriate”

[1] The “Huawei FDPR” was moved from Footnote 1 to Supplement No. 4 to Part 744 of the EAR to EAR § 734.9(e)(1) on February 3, 2022 (87 FR 6033), with a further revision to the “Huawei FDPR” by BIS on October 13, 2022 (87 FR 62186).

BIS Issues Largest Civil Penalty In History for Export from Abroad of Foreign Manufactured EAR99 Hard Disk Drives to Huawei in China Read More »

3D Systems Corporation’s Trifecta Of Violations Of U.S. Export Control Laws

By John Herzo, Senior Associate, FD Associates, Inc.
And Jenny Hahn, President, FD Associates, Inc.
April 11, 2023

Background:

On February 27, 2023, 3D Systems Corporation (“3D Systems”) entered into a settlement agreement with the Department of Commerce, Bureau of Industry and Security (“BIS”) for violations of the Export Administration Regulations (“EAR”) resulting in a fine up to $2,777,570; a three (3) year consent agreement with the Department of State for violations of the International Traffic in Arms Regulations (“ITAR”) with a fine of up to $20,000,000; and a settlement with the Department of Justice for violations of the False Claims Act with a fine of up to $4,540,000. In addition to the fines related to the EAR violations, 3D Systems must conduct two (2) audits of its export controls compliance program and is subject to a three-year denial of its export privileges under the EAR. Based on the ITAR violations, 3D Systems will engage an external Special Compliance officer for at least the first year of its 3 year Consent Agreement with the Department of State and will conduct two external audits of its ITAR compliance program and implement additional compliance measures.

3D Systems’ violations, included those of its subsidiary Quickparts.com, Inc., (“Quickparts”). Quickparts provided prototypes and low-volume production parts using traditional computer numerical control machining, cast urethane modeling, and injection molding services. Quickparts regularly exported customer data primarily to third-party suppliers abroad, including China, for quotation and potential production.

3D Systems’ violations, including those of operating divisions, subsidiaries (in particular Quickparts), and business units, of the EAR, ITAR and False Claims Act included:
• Exports to China without a license;
• Acting with knowledge a violation would occur by exporting EAR-controlled technology to China without the required license; exports, reexports and transfers of technology/technical data to Germany without a license;
• Exports, reexports and transfers to Taiwan without an ITAR license;
• Exports, reexports and transfers to China without an ITAR license;
• Exports of technical data to foreign person employees (FPEs) from India and the United Kingdom;
• A failure to maintain records; and
• Violations of the False Claims Act by improperly transmitting export-controlled technical data to China in violation of the export control laws of the United States in connection with certain NASA and DOD contracts.

Having an effective compliance program including training that educates all employees on all aspects of export is a foundational element of a trade compliance program. The facts of this case presented several lessons that industry should take note of when making exports and vetting suppliers. These actions resulted in the noted enforcement actions:

• Heed the warning. The enforcement actions taken against 3D Systems, including those of operating divisions, subsidiaries (in particular Quickparts), and business units by the Department of Commerce, Department of State and the Department of Justice began when a customer of Quickparts notified Quickparts in 2015 of potential violations of the EAR in connection with the export of technology subject to the EAR to China. The customer also informed Quickparts that it had submitted a voluntary disclosure to the United States Government regarding such potential violations. 3D Systems and Quickparts did not act on this information by filing their own self-disclosure and they continued to make exports to China without export licenses. It was not until two years later, after a visit by the BIS’ Office of Export Enforcement in April 2017 and in response to BIS’s October 2017 administrative subpoenas, that 3D Systems/Quickparts subsequently filed self-disclosures; and

• The agencies talk! An interagency referral from BIS/OEE to the Department of Justice led to the civil settlement between the Department of Justice and 3D Systems to resolve allegations that 3D Systems violated the False Claims Act by improperly transmitting export-controlled technical data to China in violation of the export control laws of the United States in connection with certain NASA and DOD contracts; and

• You are responsible for the acts of your subsidiaries, even when sold. Most of the ITAR, EAR and False Claims Act violations by Quickparts occurred when Quickparts was a subsidiary of 3D Systems. 3D Systems sold Quickparts in June of 2021, to Trilantic North America, a middle-market private equity firm, prior to the enforcement actions taken against 3D Systems. By charging 3D Systems after the sale of its subsidiary, BIS, the Department of State and the Department of Justice broke prior precedent of applying successor liability to the new owner. To date, BIS, the Department of State and the Department of Justice have not taken any known enforcement action against Quickparts’ new owner, Trilantic North America; and

• Export Jurisdiction and Classification analysis: A foundational element of all trade compliance programs is knowing the export jurisdiction (ITAR or EAR) of incoming technical information. Before exporting technical data received from customers, the exporter must establish the export jurisdiction (ITAR or EAR) and the export classification within the U.S. Munitions List (USML) for ITAR or Commerce Control List (CCL) for EAR. These determinations drive the export licensing requirements. Not knowing or understanding the export markings on technical data identifying the export jurisdiction or classification led to the export violations of the nature described herein; and

• Know where your technical data is stored on your network. The violations regarding exports to Germany occurred because 3D Systems arranged for the backup of the U.S. email systems for Quickparts’ and other subsidiaries to a server in Germany creating an immediate export scenario. Employee emails containing design documents such as blueprints, drawings, plans, diagrams, engineering designs and specifications, computer-aided design files were included in these email files. It is imperative that company IT personnel and management understand the risks with backup of emails and other programs that will contain export controlled information to servers outside the U.S. and being able to identify where in your network your technical data or your customers technical data is critical to a successful export compliance program. Not only is the unencrypted backup of technical data a contravention of U.S. export rules, any government contractor may cause violations of the NIST 800-171 and DFARS Cybersecurity rules by doing so; and

• Fox in the hen house. Hiring foreign persons creates an immediate export scenario. Placing these persons in positions of direct responsibility for ITAR and EAR controlled programs obligates the company to first secure the access to export controlled technical data until they have secured the appropriate ITAR and EAR Foreign Person Employee Licenses from the appropriate government agencies. 3D Systems or its subsidiaries failed to lock down the network and failed to obtain the required Foreign Person Employee Licenses; and

• Restricting network access: Implementing network access requirements to the level of “need to know” and coordination with IT to block folders with export controlled content regulated by the ITAR or EAR is the first step to ensuring export compliance until the foreign person employees or foreign subsidiaries have been granted ITAR and EAR authorizations to such export controlled data for specific programs; and

• Understanding restricted countries: An essential element of any trade compliance program is training personnel on the export status of individual countries under sanction. The ITAR, EAR and OFAC all have different levels of restrictions on countries, in addition to that placed on individuals and entities. China has been an armed embargoed nation under the ITAR since 1989; and

• Maintenance of Records: It is an ITAR and EAR requirement to maintain records for a minimum period of five years from the date of export. It is expected that the company export compliance program will have specific policies and procedures including the retention of employee emails for the required period. This includes all related records including those created by former employees. The enforcement actions against 3D Systems, its operating divisions, subsidiaries and business units included failures to maintain records pursuant to the EAR and the ITAR. Email accounts were deleted when employees left the company; and

• Don’t be snarky with the government: Statements made in voluntary disclosure filings should genuinely reflect the serious nature of violation(s) being disclosed and express respect to the government process. Discounting the importance of conducting a full review and investigation into possible violations because the company deems it burdensome will result in only one outcome. A financial penalty.

This article explores the details of these violations below.

EAR:

3D Systems entered into a settlement agreement with BIS regarding nineteen (19) violations of the EAR.

On November 30, 2015, a Quickparts customer notified Quickparts of potential violations of the EAR in connection with the export of technology subject to the EAR to China. The customer also informed Quickparts that it had submitted a disclosure to the United States Government regarding such potential violations. On April 19, 2017, in connection with the disclosure, a BIS Special Agent conducted an outreach with 3D Systems’ then Director of Operations and Special Projects. On April 20, 2017, BIS issued a Warning Letter to 3D Systems regarding the conduct described in the disclosure. 3D Systems and Quickparts therefore knew or had reason to know that certain technology it handled regularly as part of its On Demand Manufacturing (“ODM”) business unit that was subject to the EAR and likely required BIS licenses prior to its release to most countries, including China. However, despite the outreach and explanation by a BIS Special Agent of the Company’s export control compliance obligations under the EAR, neither 3D Systems nor Quickparts sought to or obtained a license for such technology before exporting it. Thus, by forwarding technology subject to the EAR to China without the required BIS license it was with knowledge that a violation of the EAR had occurred. Refer to 15 C.F.R. § 772.1, which provides that “Knowledge of a circumstance (the term may be a variant, such as ‘know,’ ‘reason to know’ or ‘reason to believe’) includes not only positive knowledge that the circumstance exists or is substantially certain to occur, but also an awareness of a high probability of its existence or future occurrence. Such awareness is inferred from evidence of the conscious disregard of facts known to a person and is also inferred from a person’s willful avoidance of facts.”

The first two charges related to the export of controlled technology to China without a license. On two occasions from October 2, 2015 through October 3, 2015, 3D Systems’ subsidiary Quickparts exported technology subject to the EAR to China without the required license from the Department of Commerce. Specifically, Quickparts exported design documents such as blueprints, drawings, plans, diagrams, engineering designs and specifications, computer-aided design files, via e-mail to its then-subsidiary’s office located in China. These design documents were technology required for the development, production, operation, installation, repair, overhaul, or refurbishing of spacecraft and related commodities, classified under Export Control Classification Number (“ECCN”) 9E515. The 9E515 technology at issue is controlled for national security and regional stability related reasons, and, pursuant to Sections 742.4 and 742.6 of the EAR, a BIS license was required to export such items to China (and per the EAR a policy of denial exists for such license applications).

The next four charges relate to 3D Systems and Quickparts acting with knowledge of a violation by exporting EAR-controlled technology to China without the required license. On four occasions from June 14, 2016, through February 7, 2018, Quickparts exported technology subject to the EAR to China with knowledge that a violation of the EAR had occurred, was occurring, or was about to occur in connection with the export. Specifically, Quickparts released design documents such as blueprints, drawings, plans, diagrams, engineering designs and specifications, computer-aided design files, via e-mail to its Chinese subsidiary. The design documents were technology required for military electronics, classified under ECCN 3E611 and technology required for the development, production, operation, installation, repair, overhaul, or refurbishing of spacecraft and related commodities, classified under ECCN 9E515. Both 3E611 and 9E515 technology are controlled for national security and regional stability related reasons. A BIS license was required to export such items to China.

Four charges related to 3D Systems, via Quickparts, engaging in prohibited conduct by exporting EAR-controlled technology to Germany without the required license. On four occasions between January 21, 2015 and June 14, 2016, Quickparts exported technology subject to the EAR to Germany without the required license from the Department of Commerce. Specifically, Quickparts’ employee emails containing design documents such as blueprints, drawings, plans, diagrams, engineering designs and specifications, computer-aided design files, were stored on a server located in Germany. These design documents were classified under ECCN 3E611, technology required for military electronics, and ECCN 9E515, technology required for the development, production, operation, installation, repair, overhaul, or refurbishing of spacecraft and related commodities. Both the 3E611 and 9E515 technology at issue was controlled for national security and regional stability related reasons, and pursuant to Sections 742.4 and 742.6 of the EAR, a BIS license was required to export such items to Germany. All Quickparts employee emails and attachments were stored on a server located in Germany, which “mirrored” the email server in the United States. When the mirrored server was activated in December 2014, any emails in an employee’s inbox as of that date, and those that the employees sent or received after that date, were transferred to the German server. 3D Systems ceased the practice for its subsidiary’s in December 2017 and fully decommissioned the German server in October 2018, since which time all 3D Systems employee email, including those of its operating divisions, subsidiaries and business units are hosted exclusively in the United States.

Lastly, 3D Systems failed to comply with the EAR’s recordkeeping requirements. Between January 21, 2015 and February 7, 2018, in connection with the transactions described in the charges referenced above, 3D Systems failed to comply with the recordkeeping requirements set forth in Section 762.2 of the EAR. 3D Systems failed to retain documents required to be retained under Section 762.2, including contracts relating to these exports.

Based on the violations described above, 3D Systems was assessed a civil penalty in the amount of $2,777,570, that was required to be paid to the U.S. Department of Commerce within 30 days of the date of the Order. 3D Systems shall complete two (2) audits of its export controls compliance program. 3D Systems Corporation is subject to a three-year denial of its export privileges under the EAR. Such denial shall be suspended for a probationary period of three years, and shall thereafter be waived, provided that 3D Systems has made full and timely payment as set forth above, has completed the audits and submitted the audit results as set forth above, and has not committed another violation of EAR or any order, license, or authorization issued under the EAR.

ITAR:

As noted, in October 2017, the Bureau of Industry and Security served a subpoena on 3D Systems seeking information related to potential export violations under the EAR. Following the receipt of the subpoena, 3D Systems expanded the scope of its internal investigation of Quickparts’ handling of export control data, which resulted in the discovery of ITAR violations that 3D Systems disclosed to the Department of State in three disclosures. The violations involved unauthorized exports, reexports, and retransfers of technical data to Germany, Taiwan, and China; unauthorized exports of technical data to foreign person employees (FPEs) from India and the United Kingdom; and a failure to maintain records related to foreign person employees’ and exports of technical data to Germany and China.

3D Systems agreed to pay a civil penalty of $20,000,000 pursuant to the 3 year Consent Agreement with the Department of State. Half of the civil penalty, $10,000,000, will be suspended if 3D Systems uses $10,000,000 for Department of State approved remedial compliance measures to strengthen 3D Systems’ compliance program. 3D Systems will also engage an external Special Compliance officer for at least the first year of the Consent Agreement and will conduct two external audits of its ITAR compliance program and implement additional compliance measures.

From December 2014 to October 2018, 3D Systems stored all employee emails, including Quickparts employee’s email that contained technical data and attachments, on an unencrypted email server located in Germany, which “mirrored” the email exchange server in the United States to provide a back-up system and improve service for users outside of the United States. Through this mirroring process, all email 3D Systems employees sent or received appeared simultaneously on 3D Systems’ U.S. and German email servers. 3D Systems reported that emails on its U.S. and German servers contained technical data controlled under multiple USML Categories, including IV(i), VII(h), VIII(i), XII(f), and XIII(l), for the purpose of providing quotation and manufacturing services for third-party customers and troubleshooting technical issues. As a result of the implementation of this mirroring process, 3D Systems exported without authorization ITAR-controlled technical data to Germany many times when its employees’ emails containing technical data appeared on its German servers.

3D Systems ceased mirroring to the German server of Quickparts’ employee emails in December 2017. However, in addition to Quickparts employees’ emails, emails from employees in other 3D Systems business units were also mirrored to the unencrypted email server in Germany. At the time, Advanced Manufacturing Group (“AMG”) was a business unit within 3D Systems. AMG created benchmarking parts for potential 3D Systems customers in connection with the sale of its 3D printers. As part of the benchmarking process, 3D Systems customers provided AMG with technical data to print test parts so that the customers could evaluate the capabilities of 3D Systems’ printers. Customers occasionally provided ITAR-controlled technical data to AMG as part of their benchmarking requests, including via email. The mirroring continued until October 2018, when 3D Systems fully decommissioned the German server. Thus, until October 1, 2018, 3D Systems automatically backed-up ITAR-controlled technical data included in emails to the unencrypted email server located in Germany, resulting in unauthorized exports. Through the use of this process, 3D Systems, its operating divisions, subsidiaries, and business units, without authorization exported technical data to Germany on multiple additional occasions.

Quickparts’ office in China, assisted Quickparts employees in the United States with obtaining quotations from third-party suppliers in China and managing projects that proceeded from quotation to production. As part of the quotation process, Quickparts employees in the United States provided requests for quotation (RFQs), which included associated technical data received from Quickparts customers in the United States, to Quickparts employees in China without authorization. The Quickparts employees in China retransferred the technical data to third-party suppliers in China for quotations. Also, Quickparts employees in the United States sent RFQs and associated technical data directly to third-party suppliers in China. In some instances, the third-party suppliers in China used the technical data to manufacture ITAR-controlled defense articles. Quickparts exported without authorization technical data controlled under USML Categories IV(i), XII(f), and XIII(l) 36 times and Quickparts China retransferred without authorization technical data 28 times from December 2015 to December 2017.

Quickparts’ offices in China sometimes used overseas third-party suppliers located in countries other than China as part of the quotation process. For example, between June 2017 and April 2018, Quickparts’ offices in China reexported without authorization ITAR-controlled technical data from China to Taiwan. On three such occasions, Quickparts’ offices in China emailed technical data to Idea Development Company in Taiwan.

3D Systems identified two foreign person employees (FPEs) (one each from India and the United Kingdom, respectively) whose job functions required export controlled information which meant 3D Systems/Quickparts had without authorization repeatedly exported ITAR-controlled technical data to the FPEs. The two FPEs were a Sales Manager and a Manufacturing Manager who reviewed ITAR-controlled documents to provide customers and Quickparts personnel with advice regarding the manufacturing options. These two individuals had substantive interactions with ITAR-controlled technical data whenever a customer’s question or production issue was brought to their attention. These activities likely resulted in unauthorized exports of technical data to other foreign persons/entities listed under several USML Categories referenced.

3D Systems failed to produce copies of multiple records related to its ITAR controlled activities that the Department of State requested, which limited the scope of the Department’s investigation. The full scope of 3D System’s, including those of its operating divisions, subsidiaries and business units, unauthorized exports to China and Germany, retransfers within the China, and exports to FPEs is unknown because 3D Systems disclosed that it did not maintain complete records for:
• Unauthorized exports of technical data via email;
• The members of the Quickparts China email distribution list, and thus the number of unauthorized exports and retransfers;
• The nationality of employees who received technical data from customers; and
• The individual use of technical data on company servers because IT systems did not record this information.

As a consequence of not having a central system to transfer RFQs and associated ITAR-controlled technical data within 3D Systems, 3D Systems only has records of the exports of ITAR-controlled technical data in employee emails. Historically, 3D Systems had not implemented a document retention policy with respect to employee emails. In some instances, 3D Systems deleted former employee emails upon their departure or sometime thereafter. 3D Systems identified 30 former employees, approximately 16 percent of the total employees potentially involved in exporting technical data, for whom emails were no longer available for review. The failure to retain these employees’ emails meant 3D Systems did not maintain complete records of all exports to Germany and China these employees made, even though, based on their job duties, they exported technical data to Germany and China.

In addition to the failure to maintain employee emails, any 3D Systems employee with IT credentials had the ability to locate folders containing ITAR technical data, and all users’ credentials permitted them to open and view documents within those folders. 3D Systems identified 65 FPEs who worked for 3D Systems since January l, 2012, and who could have accessed ITAR-controlled technical data due to their IT systems access credentials. 3D Systems’ IT system was not designed to track individual access to technical data. As a result, 3D Systems could not provide records of exports of ITAR-controlled technical data to these FPEs even if, based on their job duties, some exports likely did occur. 3D Systems identified additional business units other than Quickparts and AMG that may have received ITAR-controlled technical data from customers. Specifically, 3D Systems reported that the plastics printer sales team (Plastic Printer Sales) and the software services and technical support teams (Services & Support) on occasion received ITAR-controlled data from potential plastic printer customers and from customers experiencing technical issues with software purchased from 3D Systems. However, while 3D Systems acknowledged that it is likely that the employees of the Plastic Printer Sales and the Services & Support business units had their email mirrored to the German server until October 2018, 3D Systems did not conduct a review for potential ITAR violations because they believed “the risk of controlled data existing in these employees’ email was low, conducting a review of this email was unlikely to uncover potential ITAR violations and therefore did not justify such a burdensome review.”

Department of Justice:

3D Systems agreed to pay the United States up to $4.54 million to resolve allegations that it violated the False Claims Act by improperly transmitting export-controlled technical data to China in violation of the export control laws of the United States in connection with certain NASA and DOD contracts.

Per the terms of a civil settlement executed with the Department of Justice on February 27, 2023, 3D Systems Corporation agreed to pay $2.27 million in restitution to the federal government within 30 days. The company may be required to pay an additional $2.27 million in penalties under the Justice Department settlement agreement, for a total of up to $4.54 million, if it fails to pay at least that amount in civil penalties to the Department of State and the Department of Commerce in connection with the parallel administrative settlements referenced above.

According to the Justice Department Settlement Agreement, 3D Systems, through its Quickparts subsidiary completed on-demand manufacturing projects both directly and indirectly on contracts issued by DOD and NASA, including for projects involving technical or other data potentially classified under and controlled by the International Emergency Economic Powers Act, the Arms Export Control Act, the Export Administration Regulations, and/or the International Traffic in Arms Regulations.

The referenced Export Control Laws prohibit certain controlled items and/or intellectual property from being exported to certain foreign countries, including China, without a license or authorization from the appropriate federal agencies. In the Justice Department settlement agreement, the United States alleged that between January 1, 2012 and December 31, 2017 3D Systems exported certain items and/or intellectual property to China without the appropriate license or authorization in violation of the Export Control Laws in connection with certain contracts issued by DOD and NASA in violation of the False Claims Act. The claims resolved by the settlement are allegations only. There has been no determination of liability.

https://www.pmddtc.state.gov/ddtc_public?id=ddtc_kb_article_page&sys_id=384b968adb3cd30044f9ff621f961941 and https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3233-2023-02-27-3d-press-release/file and https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1468-e2807/file and https://www.justice.gov/usao-ndtx/pr/3d-printing-company-pay-454-million-settle-false-claims-act-allegations-export and https://www.3dsystems.com/press-releases/3d-systems-announces-sale-demand-manufacturing-business

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MARCH 2023 EXPORT CONTROL REGULATIONS UPDATES

This newsletter is a listing of the latest changes in export control regulations through March 31, 2023.  The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities.  It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

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

REGULATORY UPDATES

President

President Biden Continued The National Emergency Regarding Ukraine

March 2, 2023: 88 Fed. Reg. 13285: President Biden has continued for one year the national emergency declared in Executive Order 13660 of March 6, 2014, as expanded by Executive Order 13661 of March 16, 2014, Executive Order 13662 of March 20, 2014, and Executive Order 14065 of February 21, 2022, and relied on for additional steps taken in Executive Order 13685 of December 19, 2014, and Executive Order 13849 of September 20, 2018, with respect to Ukraine.

 

https://www.federalregister.gov/documents/2023/03/02/2023-04522/continuation-of-the-national-emergency-with-respect-to-ukraine

 

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President Biden Continued The National Emergency Regarding Venezuela

 

March 2, 2023: 88 Fed. Reg. 13287: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency regarding Venezuela declared in Executive Order 13692 of March 8, 2015, and relied on for additional steps taken in Executive Order 13808 of August 24, 2017, Executive Order 13827 of March 19, 2018, Executive Order 13835 of May 21, 2018, Executive Order 13850 of November 1, 2018, Executive Order 13857 of January 25, 2019, and Executive Order 13884 of August 5, 2019.

 

https://www.federalregister.gov/documents/2023/03/02/2023-04531/continuation-of-the-national-emergency-with-respect-to-venezuela

 

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President Biden Continued The National Emergency Regarding Zimbabwe

 

March 2, 2023: 88 Fed. Reg. 13289: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency regarding Zimbabwe declared in Executive Order 13288 of March 6, 2003, as expanded by Executive Order 13469 of July 25, 2008, and as relied on for additional steps taken in Executive Order 13391 of November 22, 2005.

 

https://www.federalregister.gov/documents/2023/03/02/2023-04532/continuation-of-the-national-emergency-with-respect-to-zimbabwe

 

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President Biden Continued The National Emergency Regarding Iran

 

March 13, 2023: 88 Fed. Reg. 15595: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for 1 year the national emergency with respect to Iran declared in Executive Order 12957 of March 15, 1995. On May 6, 1995, the President issued Executive Order 12959, imposing more comprehensive sanctions on Iran to further respond to this threat. On August 19, 1997, the President issued Executive Order 13059, consolidating and clarifying those previous orders. The President took additional steps pursuant to this national emergency in Executive Order 13553 of September 28, 2010; Executive Order 13574 of May 23, 2011; Executive Order 13590 of November 20, 2011; Executive Order 13599 of February 5, 2012; Executive Order 13606 of April 22, 2012; Executive Order 13608 of May 1, 2012; Executive Order 13622 of July 30, 2012; Executive Order 13628 of October 9, 2012; Executive Order 13645 of June 3, 2013; Executive Order 13716 of January 16, 2016, which revoked Executive Orders 13574, 13590, 13622, 13645, and provisions of Executive Order 13628; Executive Order 13846 of August 6, 2018, which revoked Executive Orders 13716 and 13628; Executive Order 13871 of May 8, 2019; Executive Order 13876 of June 24, 2019; Executive Order 13902 of January 10, 2020; and Executive Order 13949 of September 21, 2020. The emergency declared by Executive Order 12957 constitutes an emergency separate from that declared on November 14, 1979, by Executive Order 12170, in connection with the hostage crisis. This renewal, therefore, is distinct from the emergency renewal of November 8, 2022.

 

https://www.federalregister.gov/documents/2023/03/13/2023-05300/continuation-of-the-national-emergency-with-respect-to-iran

 

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Presidential Biden Waived Statutory Requirements Pursuant to Section 303 of the Defense Production Act of 1950, as Amended, on Department of Defense Supply Chains Resilience

Memorandum for the Secretary of Defense

 

March 2, 2023: 88 Fed. Reg. 13015: President Biden waived statutory requirements pursuant to Section 303 of the Defense Production Act of 1950, as amended (the “Act”) (50 U.S.C. 4533). President Biden determined, pursuant to section 303(a)(7)(B) of the Act, that action is necessary to avert shortfalls in critical Department of Defense supply chains that would severely impair national defense capability. Therefore, President Biden waived the requirements of section 303(a)(1)-(a)(6) of the Act for supply chains enumerated in the June 2021 White House report titled “Building Resilient Supply Chains, Revitalizing American Manufacturing, and Fostering Broad-Based Growth: 100-Day Reviews Under Executive Order 14017” and the February 2022 Department of Defense report titled “Securing Defense-Critical Supply Chains: An Action Plan Developed in Response to President Biden's Executive Order 14017,” specifically for defense organic industrial base supply chains critical to the Department of Defense and critical supply chains for electronics, kinetic capabilities, castings and forgings, minerals and materials, and power and energy storage. Ensuring a robust, resilient, and sustainable domestic industrial base is essential to our national security and the preservation of domestic critical infrastructure.

 

https://www.federalregister.gov/documents/2023/03/02/2023-04421/presidential-waiver-of-statutory-requirements-pursuant-to-section-303-of-the-defense-production-act

 

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President Biden Announced A National Cybersecurity Strategy

 

March 2, 2023: The White House has announced a National Cybersecurity Strategy. This strategy seeks to build and enhance collaboration around five pillars: (i) Defend critical infrastructure, (ii) Disrupt and dismantle threat actors, (iii) Shape market forces to drive security and resilience, (iv) Invest in a resilient future, and (v) Forge international partnerships to pursue shared goals. To realize the vision these pillars layout, the strategy calls for making two fundamental shifts in how the United States allocates roles, responsibilities, and resources in cyberspace. In realizing these shifts, the strategy aspires not just to improve U.S. defenses, but to change those underlying dynamics that currently contravene its interests.

 

https://www.whitehouse.gov/wp-content/uploads/2023/03/National-Cybersecurity-Strategy-2023.pdf

 

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President Biden Signed A Presidential Determination (PD) Authorizing The Use Of Defense Production Act (DPA) Title III Authorities To Rebuild And Expand The Nation's Domestic Hypersonics Industrial Base

 

March 6, 2023: 88 Fed. Reg. 13657: President Joe Biden has signed a presidential determination (PD) authorizing the use of Defense Production Act (DPA) Title III authorities to rebuild and expand the nation's domestic hypersonics industrial base. The authority specifically targets air-breathing engines, advanced avionics, guidance systems, as well as constituent materials for hypersonic systems. The Department of Defense is leveraging this authority to strategically accelerate the transition of operational prototypes and advanced manufacturing technologies across the spectrum of airbreathing engines and advanced avionics position, navigation, and timing (PNT) systems. Kinetic capabilities, including those for hypersonic systems, were one of the key focus areas in President Biden's Executive Order 14017, "America's Supply Chains." The efforts executed under these authorities will be part of a larger DoD strategy to ensure the United States preeminence in these game-changing technologies as well as a partnership with allied nations seeking similar capabilities. The PD allows the Office of Defense Production Act Investments (DPAI), part of the Manufacturing Capability Expansion and Investment Prioritization (MCEIP) office, to leverage DPA Title III purchases and purchase commitments to support the modernization and expansion of the hypersonics industrial base. Applications for funding related to the above authority may be submitted through the DPA Title III Open Funding Opportunity Announcement.

 

https://www.federalregister.gov/documents/2023/03/06/2023-04617/presidential-determination-pursuant-to-section-303-of-the-defense-production-act-of-1950-as-amended

 

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President Biden Signed Executive Order Regarding Operational Use Of Commercial Spyware

 

March 27, 2023: President Biden signed Executive Order that the United States Government shall not make operational use of commercial spyware that poses significant counterintelligence or security risks to the United States Government or significant risks of improper use by a foreign government or foreign person.  In furtherance of the national security and foreign policy interests of the United States, this order accordingly directs steps to implement that policy and protect the safety and security of United States Government institutions, personnel, information, and information systems; discourage the improper use of commercial spyware; and encourage the development and implementation of responsible norms regarding the use of commercial spyware that are consistent with respect for the rule of law, human rights, and democratic norms and values.  The actions directed in this order are consistent with the policy objectives set forth in section 6318 of the James M. Inhofe National Defense Authorization Act for Fiscal Year 2023 (NDAA FY 2023) (Public Law 117-263) and section 5502 of the National Defense Authorization Act for Fiscal Year 2022 (NDAA FY 2022) (Public Law 117-81).

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2023/03/27/executive-order-on-prohibition-on-use-by-the-united-states-government-of-commercial-spyware-that-poses-risks-to-national-security/

 

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President Biden Pursuant To Section 303 Of The Defense Production Act Of 1950 Determined Printed Circuit Boards and Advanced Packaging Are Essential To National Defense

 

March 27, 2023: President Biden pursuant to Section 303 of the Defense Production Act of 1950, as amended (the “Act”) (50 U.S.C. 4533), determined that printed circuit boards and advanced packaging, their components, and the manufacturing systems that produce such systems and components are industrial resources, materials, or critical technology items essential to national defense; without Presidential action under section 303 of the Act, United States industry cannot reasonably be expected to provide the capability for the needed industrial resource, material, or critical technology item in a timely manner; and purchases, purchase commitments, or other action pursuant to section 303 of the Act are the most cost-effective, expedient, and practical alternative method for meeting the need. Action to expand the domestic production capability for printed circuit boards and advanced packaging is necessary to avert an industrial resource or critical technology item shortfall that would severely impair national defense capability.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2023/03/27/memorandum-on-presidential-determination-pursuant-to-section-303-of-the-defense-production-act-of-1950-as-amended-on-printed-circuit-boards-and-advanced-packaging-production-capability/

 

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President Biden Continues The Export Controls and Human Rights Initiative

 

March 30, 2023: President Biden and the United States continues to put human rights at the center of U.S. foreign policy. The Export Controls and Human Rights Initiative – launched at the first Summit for Democracy as part of the Presidential Initiative for Democratic Renewal – is a multilateral effort intended to counter state and non-state actors’ misuse of goods and technology that violate human rights. During the Year of Action following the first Summit, the United States led an effort to establish a voluntary, nonbinding written code of conduct outlining political commitments by Subscribing States to apply export control tools to prevent the proliferation of goods, software, and technologies that enable serious human rights abuses. Written with the input of partner countries, the Code of Conduct complements existing multilateral commitments and will contribute to regional and international security and stability.

 

In addition to the United States, the governments that have endorsed the voluntary Code of Conduct are: Albania, Australia, Bulgaria, Canada, Croatia, Czechia, Denmark, Ecuador, Estonia, Finland, France, Germany, Japan, Kosovo, Latvia, The Netherlands, New Zealand, North Macedonia, Norway, Republic of Korea, Slovakia, Spain, and the United Kingdom. The Code of Conduct is open for all Summit for Democracy participants to join.

 

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3257-2023-03-30-bis-press-release-echri-code-of-conduct/file

 

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U.S. Congress

 

The U.S. House Of Representatives Passed House Bill H.R. 1093 That Requires The Department Of State To Report To Congress On State Department Efforts To Implement The Advanced Capabilities Pillar Of The Trilateral Security Partnership Between Australia, The United Kingdom (UK), And The United States (AUKUS)

 

March 22, 2023: The U.S. House of Representatives passed House bill H.R. 1093, that requires the Department of State to report to Congress on State Department efforts to implement the advanced capabilities pillar of the trilateral security partnership between Australia, the United Kingdom (UK), and the United States. (One of the goals of the partnership is to develop and provide joint advanced military capabilities, such as artificial intelligence, hypersonics, and electronic warfare.)

 

The report must include (1) the average and median times for the U.S. government to review applications for export licenses for defense articles or services to the governments and persons (entities and individuals) of Australia or the UK, (2) information about certain violations of the International Traffic in Arms Regulations by the governments or persons of Australia or the UK, and (3) recommended changes to the export control laws and regulations of the three partnership countries to implement the partnership.

 

https://www.congress.gov/bill/118th-congress/house-bill/1093?q=%7B%22search%22%3A%22hr1093%22%7D

 

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Department of State

 

DDTC Name And Address Changes Posted To Website

 

March 1 through 31, 2023: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at    

https://www.pmddtc.state.gov/ddtc_public?id=ddtc_kb_article_page&sys_id=bd72ca0adbf8d30044f9ff621f961981:

 

  • Change in Name from S.C. Harris Assured Communications S.R.L. to L3Harris Assured Communications Romania S.R.L. due to corporate restructuring;
  • Change in Name from TAE Aviation Pty Ltd. to TAE Aerospace Pty Ltd. due to merger;
  • Change in Name from AeroTech Pro to Sabena technics ATP due to acquisition;
  • Change in Names from Herley Industries Inc. and Herley-CTI Inc. to Herley Industries LLC and Herley-CTI LLC due to a reincorporation after sale to CAES Systems Holdings LLC.

 

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The U.S. Department Of State Updates The DS-6004, DS-4294, and DSP-85 Forms To Include A Block For Voluntary Disclosure Numbers

 

March 2, 2023: The U.S. Department of State’s IT Modernization Team updated the DS-6004 (Block 10), DS-4294 (Block 11), and DSP-85 (Block 9) forms in the DECCS Licensing application by adding new voluntary disclosure field questions. This update will allow industry to report a disclosure previously filed with the Office of Defense Trade Controls Compliance (DTCC) when submitting one of the listed licenses. If you have any questions on the new field updates, please submit a support ticket on DECCS Self-Service.

 

Due to the update referenced above, the U.S. Department of State recommend that all users of DECS clear their cache to ensure that they can view the latest updates.

 

Reference this FAQ for how to clear your cache:

https://www.pmddtc.state.gov/)?id=ddtc_public_portal_faq_detail&sys_id=d7f093331b2624502dc36311f54bcbd7

 

https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_news_and_events

 

See our July 2022 newsletter for more details on the Open General Licenses

 

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The Department Of State, Directorate Of Defense Trade Controls (DDTC) Extends Validity Period Of Open General Licenses By Three Years

 

March 27, 2023: On July 13, 2022, the Department of State, Directorate of Defense Trade Controls (DDTC) issued two open general licenses as part of a pilot program pursuant to the International Traffic in Arms Regulations (ITAR), 22 C.F.R. parts 120-130, § 120.22(b). These open general licenses were originally published with a validity period of one year, effective August 1, 2022, through July 31, 2023.

DDTC has now updated both open general licenses to extend their validity period by three years and update citations for certain referenced ITAR sections that have since moved. Extending the validity period of the open general licenses by three years was necessary in order to allow DDTC to collect sufficient data to consider the usefulness of the Open General License pilot program and to provide industry with sufficient certainty to be able to rely on the open general licenses without fear that they could expire more quickly than a traditional license.

 

DDTC has also made other non-substantive edits to both open general licenses to clarify that multiple defense articles need not be reexported or retransferred simultaneously and that the open general licenses can be used to reexport or retransfer a single defense article.

 

https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_news_and_events

 

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U.S. Department of Defense

 

The U.S. Department Of Defense Is Proposing To Amend The DFARS To Enable The Defense Contract Management Agency To Obtain Export Authorizations From Certain Contractors

 

March 22, 2023: 88 Fed. Reg. 17357: The U.S. Department of Defense (DoD) is proposing to amend the DFARS to enable the Defense Contract Management Agency (DCMA) to obtain export authorizations from certain contractors. Specifically, when a contract requires government quality assurance surveillance oversight and has delivery to, or production or performance in, government quality assurance countries, DoD proposes to require the contractor to provide relevant export authorizations ( i.e., export license exemptions, export license exceptions, export licenses, or other approvals) to the cognizant DCMA administrative contracting officer along with contact information for the empowered official or the export point of contact. Government quality assurance countries include the following countries: Australia, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Israel, Italy, Republic of Korea, Netherlands, Norway, Poland, Romania, Slovakia, Spain, Sweden, Turkey, and the United Kingdom.

 

DCMA has found that a significant amount of time is required to determine whether or not a contractor's export license allows for foreign auditors to perform required quality assurance functions in lieu of DCMA. Currently, DCMA is not able to review the export authorization unless their personnel travel to the contractor's worksite. If DCMA is able to receive and review an export authorization from the contractor to determine whether or not they can delegate the work to foreign auditors, this problem would be resolved.

 

https://www.federalregister.gov/documents/2023/03/22/2023-05676/defense-federal-acquisition-regulation-supplement-export-controlled-items-dfars-case-2018-d053

 

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DSCA Notifies Congress Of Potential FMS Sale To Taiwan

 

March 1, 2023: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) has notified Congress that the Taipei Economic and Cultural Representative Office in the United States (TECRO) has requested to buy one hundred (100) AGM-88B High-Speed Anti-Radiation Missiles (HARM); twenty-three (23) HARM training missiles; two hundred (200) AIM-120C-8 Advanced Medium Range Air-to-Air Missiles (AMRAAM); four (4) AIM-120C-8 AMRAAM Guidance Sections; and twenty-six (26) LAU-129 multi-purpose launchers. Also included are LAU-118A missile launchers with Aircraft Launcher Interface Computer (ALIC); HARM missile containers; AIM-120 control sections and containers; AIM-120C Captive Air Training Missiles (CATM); dummy air training missiles (DATM), integration and test support and equipment; munitions support and support equipment; spare parts, consumables and accessories and repair and return support; classified software; maintenance and maintenance support; classified publications and technical documentation; U.S. Government and contractor engineering, technical and logistics support services, studies and surveys; and other related elements of logistical and program support. The estimated total cost is $619 million. The principal contractors will be Raytheon Missiles and Defense, Tucson, AZ; and Lockheed Martin Corporation, Bethesda, MD. The purchaser typically requests offsets. Any offset agreement would be defined in negotiations between the purchaser and the contractor(s).

 

https://www.dsca.mil/press-media/major-arms-sales/taipei-economic-and-cultural-representative-office-united-states-f-16

 

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DSCA Notifies Congress Of Potential FMS Sale To Australia

 

March 7, 2023: The Government of Australia has requested to buy up to two hundred fifty-five (255) Javelin FGM-148F missiles (includes five (5) fly-to-buy missiles). Also included are U.S. technical assistance, consisting of Tactical Air Ground Missiles (TAGM) Project Office technical assistance and other related elements of logistical and program support. The estimated total cost is $60.18 million. The prime U.S. contractor will be the Javelin Joint Venture between Lockheed Martin in Orlando, FL, and Raytheon Missiles and Defense in Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/australia-javelin-fgm-148f-missiles
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DSCA Notifies Congress Of Potential FMS Sale To Japan

 

March 7, 2023: The Government of Japan has requested to buy up to five (5) E-2D Advanced Hawkeye Airborne Early Warning and Control Aircraft; twelve (12) T56-A-427A Engines (10 installed, 2 spares); six (6) Multifunction Information Distribution System Joint Tactical Radio System Terminals (5 installed, 1 spare); five (5) APY-9 Radars (installed); five (5) AN/AYK-27 Integrated Navigation Control and Display Systems (installed); twelve (12) LN-251 Embedded Global Positioning Systems/Inertial Navigation Systems with Embedded Airborne Selective Availability Anti-Spoofing Module or M-Code Receiver (10 installed, 2 spares); and six (6) ALQ-217 Electronic Support Measures Systems (5 installed and 1 spare). Also included are aircraft ancillary equipment; modifications; spare and repair parts; support equipment; publications and technical documentation; software; personal protective equipment; personnel training and training equipment; ferry services; U.S. Government and contractor logistics, engineering, and technical support services; and other related elements of logistics and program support. The estimated total program cost is $1.381 billion. The principal contractor will be Northrop Grumman Corporation Aerospace Systems, Melbourne, FL. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/japan-e-2d-advanced-hawkeye-ahe-airborne-early-warning-and-control

 

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DSCA Notifies Congress Of Potential FMS Sale To Australia

 

March 16, 2023: The Government of Australia has requested to buy up to two hundred (200) Tomahawk Block V All Up Rounds (AUR) (RGM-109E); and up to twenty (20) Tomahawk Block IV All Up Rounds (AUR) (RGM-109E). Also included is support for all three segments of Australia’s Tomahawk Weapon System (TWS) including the All Up Round (AUR), the Tactical Tomahawk Weapon Control System (TTWCS), and the Theater Mission Planning Center (TMPC). The support consists of unscheduled missile maintenance; spares; procurement; training; in-service support; software; hardware; communication equipment; operational flight test; engineering and technical expertise to maintain the TWS capability; and other related elements of logistical and program support. The estimated total cost is $895 million. The prime U.S. contractor will be Raytheon Missiles and Defense, Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/australia-tomahawk-weapon-system

 

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DSCA Notifies Congress Of Potential FMS Sale To Poland

 

March 16, 2023: The Republic of Poland has requested to buy eight hundred (800) AGM-114R2 Hellfire missiles; and four (4) M36 Hellfire Captive Air Training Missiles (CATM). Also included is Tactical Aviation Ground Munition Program Office technical assistance; Security Assistance Management Directorate technical assistance; Joint Attack Munition Systems technical assistance; Classified and Unclassified publications; spare parts; repair and return; storage; and other related elements of logistics and program support. The total estimated cost is $150 million. The principal contractor will be Lockheed Martin Corporation, Orlando, FL. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/poland-hellfire-missiles

 

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DSCA Notifies Congress Of Potential FMS Sale To Greece

 

March 17, 2023: The Government of Greece has requested to buy sixty-three (63) Assault Amphibious Vehicles, Personnel Variant (AAVP-7A1), nine (9) Assault Amphibious Vehicles, Command Variant (AAVC-7A1), four (4) Assault Amphibious Vehicles, Recovery Variant (AAVR-7A1), and sixty-three (63) 50-Caliber Machine Guns (Heavy Barrel). Also included are MK-19 Grenade Launchers, M36E T1 Thermal Sighting Systems (TSS), supply support (spare parts), support equipment (including special mission kits/tools/Enhanced Applique Kits (EAAK)), training, technical manuals (unclassified), technical data, U.S. Government and contractor engineering, technical support and assistance (including Contractor Engineering Technical Services (CETS)), Integrated Logistic Support (ILS) management services, parts obsolescence remediation, calibration services, transportation, Follow-on Support (FOS), Return, Repair and Reshipment of unserviceable repairable. There is not a principal contractor associated with this potential sale. Consequently, there are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/greece-assault-amphibious-vehicles-aavs

 

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DSCA Notifies Congress Of Potential FMS Sale To Bahrain

 

March 29, 2023: The Government of Bahrain has requested to buy equipment and services to refurbish twenty-four (24) Excess Defense Article (EDA) AH-1W multi-role helicopters. Included are services to refurbish a full-motion Aircraft Procedures Trainer (APT), M272A1 missile launchers and spare T-700-GE-401 aircraft engines, spare parts, support, training, publications, and other related elements of logistics and program support. The estimated total cost is $350 million. The principal contractor will be Bell Corporation, Fort Worth, TX. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/bahrain-ah-1w-helicopter-refurbishment

 

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DSCA Notifies Congress Of Potential FMS Sale To Kuwait

 

March 29, 2023: The Government of Kuwait has requested to buy additional Cartridge Actuated Device/Propellant Actuated Devices (CAD/PAD) and support that will be added to a previously implemented case that was under the Congressional notification threshold. The original FMS case, valued at $48.2 million, included CAD/PAD items and support for Calendar Years 2025-2026 (CY25-CY26). This notification is for CAD/PAD items and support of Kuwait’s F/A-18 and KC-130/J aircraft fleet. Also included is engineering, technical, and program support and other related elements of logistics and program support. The total estimated cost is $59.1 million. The principal contractors are currently unknown, as there will be competitive contract solicitations after FMS case implementation. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/kuwait-cartridge-actuated-devicepropellant-actuated-devices-cadpad-and

 

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

 

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS), the U.S. Department of Justice (DOJ), and the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC)

 

March 2, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS), the U.S. Department of Justice (DOJ), and the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), issued a Tri-Seal Compliance Note: Cracking Down on Third-Party Intermediaries Used to Evade Russia-Related Sanctions and Export Controls to alert the international community, the private sector, and the public to attempts by malign actors to continue to try to evade sanctions and export controls to support Russia’s military-industrial complex in support of Russia’s illegal and unprovoked war against Ukraine.  The Compliance Note details how Russia uses third-party intermediaries and transshipment points to circumvent restrictions and obscure the true identities of Russian end users.  The Compliance Note provides common red flags that can indicate a third-party intermediary may be engaged in efforts to evade sanctions or export controls.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230302_33 and https://home.treasury.gov/system/files/126/20230302_compliance_note.pdf

 

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The Department of Commerce, Bureau of Industry and Security (BIS) and U.S. Customs & Border Protection

 

New BIS License Types C65 – (TGL) Temporary General License and C66 – (SCAL) Supply Chain Authorization Letter

 

March 15, 2023: The Department of Commerce, Bureau of Industry and Security (BIS) and U.S. Customs & Border Protection, created two new License Types for the Automated Export System.

 

New License Code C65 (TGL):

An update has been made to AES to create new License Codes C65 “Temporary General License” (TGL), which authorizes certain exports, reexports, in-country transfers, and exports from abroad destined to or within China or Macau by companies not headquartered in Country Groups D:1 or D:5 or E (see supplement no. 1 to part 740 of the EAR) to continue or engage in integration, assembly (mounting), inspection, testing, quality assurance, and distribution of items covered by ECCN 3A090, 4A090, and associated software and technology in ECCN 3D001, 3E001, 4D090, or 4E001; or any item that is a computer, integrated circuit, “electronic assembly” or “component” and associated software and technology, specified elsewhere on Commerce Control List (supplement no. 1 to part 774), which meets or exceeds the performance parameters of ECCN 3A090 or 4A090.  The full terms of this Temporary General License are described in General Order No. 4 of in paragraph (d) in supplement no. 1 to part 736 of the EAR.

AES filers must adhere to the following new reporting when using C65 (TGL) to prevent the return of fatal errors from AES.

  • Report License Code: C65 Temporary General License (TGL)
  • Allowable ECCNs: 3A090, 4A090, 3D001, 3E001, 4D090, 4E001, or any item that is a computer, integrated circuit, “electronic assembly” or “component” and associated software and technology, specified elsewhere on Commerce Control List (supplement no. 1 to part 774), which meets or exceeds the performance parameters of ECCN 3A090 or 4A090.
  • Allowable Export Information Codes: All except UG
  • Allowable Modes of Transportation: All except ‘70’ (Fixed Transport)

Please refer to “General Order No. 4” in paragraph (d) in supplement no. 1 to part 736 of the EAR for additional requirements for this Temporary General License. This does not authorize the export, reexport, in-country transfer, or export from abroad to “end-users” or “ultimate consignees” in China or Macau. This Temporary General License does not overcome the license requirements of §§ 744.11 or 744.21 when an entity listed in supplements no. 4 or 7 to part 744 is a party to the transaction as described in § 748.5(c) through (f) of the EAR, or when there is knowledge of any other prohibited end use or end user. This Temporary General License is only for companies that engage in the specific activities authorized under this Temporary General License.  This Temporary General License and its associated License Code (TGL) are valid for use through April 7, 2023.

New License Code C66 (SCAL):

An update has been made to AES to create License Type Code C66 “Supply Chain Authorization Letter” (SCAL).  The BIS Deputy Assistant Secretary for Export Administration issued a number of such letters in response to specific requests based on exigent circumstances of actual or potential supply chain disruptions. Recipients of Supply Chain Authorization Letters must comply with the specific terms issued by BIS in such letters.  A Supply Chain Authorization Letter is only valid for use by the original recipient of the letter or by parties authorized therein.

AES filers must adhere to the following new reporting when using C66 (SCAL) to prevent the return of fatal errors from AES.  Supply Chain Authorization Letter

  • Report License Code: C66 Supply Chain Authorization Letter (SCAL)
  • Allowable ECCNs: All, including EAR99.
  • Allowable Export Information Codes: All except UG
  • Allowable Modes of Transportation: All except ‘70’ (Fixed Transport)

https://content.govdelivery.com/bulletins/gd/USDHSCBP-34ee05e?wgt_ref=USDHSCBP_WIDGET_2#:~:text=An%20update%20has%20been%20made,or%20E%20(see%20supplement%20no.

 

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U.S. Census Bureau

 

New AESDirect Navigation in Modernized ACE Portal

 

March 29, 2023: Census launched the AESDirect User Interface (UI) in the Modernized ACE portal to the Account level. In response to some changes in the Modernized ACE portal, ACE filers are now required to launch the AESDirect UI from the Account menu by selecting “Submit AES Filing”. Below are the steps of the required navigation to launch the AESDirect UI moving forward:

 

Step 1 – Sign in to the Modernized ACE portal at: https://ace.cbp.gov/;

Step 2 – Launch ‘Exporter’ under the ‘Accounts’ drop-down menu;

Step 3 – Select the appropriate Exporter Account to use by clicking the hyperlink for the account under the ‘Account Name’ column; and

Step 4 – Click “Submit AES Filing” on the right side of the screen to launch the AESDirect UI.

 

LATEST SANCTIONS, FINES & PENALTIES

 

This section of our newsletter provides information on the latest sanctions, fines and penalties for export violations or matters of non-compliance with the ITAR or EAR issued by the US government enforcement agencies. It is provided as a service to exporters and associates of FD Associates to remind them of the importance of extreme due diligence in all international trade and export compliance matters, particularly those involving exports subject to the ITAR or the EAR. Don't let this happen to you or your company! Call us with questions or concerns at 703-847-5801 or email info@fdassociates.net.

 

Sanctions

 

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

 

March 2, 2023: 88 Fed. Reg. 13673: The Bureau of Industry and Security amended the Export Administration Regulations (EAR) by adding 37 entities under 38 entries to the Entity List. These entities are listed under the destinations of Belarus (1), Burma (3), the People's Republic of China (China) (28), Pakistan (4), Russia (1), and Taiwan (1). Some entities are added under multiple entries, accounting for the difference in the totals. This final rule also modified ten existing entries on the Entity List under the destination of China. For the reasons described above, this final rule adds the following 37 entities under 38 entries to the Entity List and includes, where appropriate, aliases:

 

Belarus:

 

  • DMT Trading LLC.

 

Burma:

 

  • FISCA Security & Communication Co., Ltd.;
  • Ministry of Transport and Communications; and
  • Naung Yoe Technologies Co., Ltd.

 

China:

 

  • 4Paradigm Technology Co., Ltd.;
  • AIF Global Logistics Co., Ltd.;
  • Aispeed Industry Ltd.;
  • Arttronix International (HK) Ltd.;
  • Baoding Giant Import and Export Co., Ltd.;
  • Baoding Shimaotong Enterprises Services Co., Ltd.;
  • Beijing Zhengyuan Chuangshi Consulting Co., Ltd.;
  • BGI Research;
  • BGI Tech Solutions (Hongkong) Co., Ltd.;
  • Forensic Genomics International;
  • Galaxy Electronics;
  • Gaobeidian Kaituo Precise Instrument Co., Ltd.;
  • Hongtai Electric Ltd.;
  • Inspur Group Co., Ltd.;
  • Jotrin Electronics Ltd.;
  • Korchina Logistics (HK) Ltd.;
  • Liang Ping Huang;
  • Loongson Technology;
  • Luo Dingwen;
  • Nanjing colpak Mechanical Equipment Co., Ltd.;
  • Nanjing Jiuding Refrigeration & Air-conditioning Equipment Co., Ltd.;
  • National Research Center for Parallel Computer Engineering and Technology;
  • Qingdao National Laboratory of Marine Science and Technology;
  • Rayscience Optoelectronics Innovation Co., Ltd.;
  • Sunton Tech Hong Kong Ltd.;
  • Suzhou Centec Communications Co., Ltd.;
  • Suzhou Centec Technology Co., Ltd.; and
  • Wuxi Institute of Advanced Technology.

 

Pakistan:

  • Abdul Razaq Asim;
  • Add-On Technology;
  • Dynamic Engineers; and
  • Nanjing Jiuding Refrigeration & Air-conditioning Equipment Co., Ltd.

 

Russia

  • DMT Electronics.

 

Taiwan

  • Neotec Semiconductor Ltd.

 

https://www.federalregister.gov/documents/2023/03/06/2023-04558/additions-and-revisions-of-entities-to-the-entity-list

 

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March 24, 2023: 88 Fed. Reg. 17706: The Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) by adding 32 persons to the Unverified List (UVL). Of the 32 persons being added, one is under each of the following destinations: Bulgaria, Canada, Indonesia, Israel, Malaysia, Saudi Arabia, and Singapore; 14 are under the destination of China, two are under the destination of Germany, four are under the destination of Turkey, and five under the destination of the United Arab Emirates (UAE).

 

Supplement no. 6 to part 744 is amended:

 

Bulgaria:

  • Vera Yordanova.

 

Canada:

  • Skymount Drones.

 

China:

  • Airpart Consolidated Trading;
  • ECOM International (HK) Co., Ltd.;
  • Guangzhou Trusme Electronics Technology Co., Ltd.;
  • HK P&W Industry Co. Ltd. (HKPW);
  • Jet-Prop International Forwarding (HK) Ltd.;
  • Kesina Services;
  • Lightstar Technology Ltd.;
  • Shandong Yuehaitongxin Keji Ltd.;
  • Shengwei Technology Co., Ltd.;
  • Small Leopard Electronics Co., Ltd.;
  • Solar Way (Hong Kong) Ltd.;
  • Sunway Technology Electronics Ltd.;
  • USETA Tech (HK) Ltd.; and
  • Winners Global Trading Co.

 

Germany:

  • In Time Forwarding & Courier e.K; and
  • One Light GMBH.

 

Indonesia:

  • PT Smart Cakrawala Aviation.

 

Israel:

  • CNG Labs.

 

Malaysia:

  • Golden Gamp Sdn Bhd.

 

Saudi Arabia:

  • Al Gihaz Co., Ltd. for Contracting and Trading.

 

Singapore:

  • Smart Cakrawala Aviation.

 

Turkey:

  • BLC Havacilik Saglik Medikal Insaat Elektrik Ic ve Dis Ticaret;
  • Odak Kimya; Piro Deniz Motorlari; and
  • Üçüzler Lojistik Gida Tekstil.

 

United Arab Emirates:

  • Al Kabiru Trading LLC;
  • BNS Hardware;
  • Delma Industrial Supply & Marine Services;
  • Diamond River General Trading; and
  • Masoud Afghan General Trading.

 

https://www.federalregister.gov/documents/2023/03/24/2023-06171/revisions-to-the-unverified-list

 

*******

 

March 28, 2023: 88 Fed. Reg. 18983: The Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding eleven entities to the Entity List under the destinations of Burma, the People's Republic of China (China), Nicaragua, and Russia. These eleven entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. In this rule, BIS also amends the EAR to explicitly confirm that the foreign policy interest of protecting human rights worldwide is a basis for adding entities to the Entity List.

 

Burma:

  • Miya Win International Ltd.;
  • Myanmar New Era Trading Company Ltd.; and
  • Suntac Group.

 

China:

  • Luopu Haishi Dingxin Electronic Technology Co., Ltd.;
  • Moyu Haishi Electronic Technology Co., Ltd.;
  • Pishan Haishi Yong'an Electronic Technology Co., Ltd.;
  • Urumqi Haishi Xin'an Electronic Technology Co., Ltd.; and
  • Yutian Haishi Meitian Electronic Technology Co., Ltd.

 

Nicaragua:

  • Nicaraguan National Police (NNP).

 

Russia:

  • Aviatech Supply Ltd.; and
  • Aviazapchast PLC.

 

https://www.federalregister.gov/documents/2023/03/30/2023-06663/additions-to-the-entity-list-amendment-to-confirm-basis-for-adding-certain-entities-to-the-entity

 

*******

 

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

 

March 1, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned three entities and two individuals illicitly generating revenue in support of the government of the Democratic People’s Republic of Korea (DPRK).

 

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

 

  • Hwang, Kil Su of the Democratic Republic of the Congo and North Korea; and
  • Pak, Hwa Song of the Democratic Republic of the Congo and North Korea.

 

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

 

  • Chilsong Trading Corporation of North Korea;
  • Congo Aconde SARL of the Democratic Republic of the Congo; and
  • Korea Paekho Trading Corporation of North Korea.

 

https://home.treasury.gov/news/press-releases/jy1313 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230301

 

*******

 

March 2, 2023: The Department of the Treasury's Office of Foreign Assets Control (OFAC) has published an Alert "Notice of Fraudulent Communications Requesting Payments involving OFAC" to make the public aware of telephone, email, and letter scams involving individuals falsely claiming to represent OFAC and requesting payments. One example involves timeshare fraud schemes, where scammers have falsely claimed that OFAC has “blocked” payments of taxes made by the timeshare owner.

 

https://home.treasury.gov/system/files/126/20230302_ofac_alert_timeshare_fraud.pdf

 

OFAC also issued Iran General License O "Authorizing Wind-Down and Limited Safety and Environmental Transactions Involving Certain Vessels" and two related Frequently Asked Questions (1119 and 1120).

 

Iran General License O: The following transactions are authorized through 12:01 a.m. Eastern daylight time, June 30, 2023, provided that any payment to a blocked person, including any blocked entity described below in this general license, must be made into a blocked account and reported to the Office of Foreign Assets Control consistent with § 501.603 of the Reporting, Procedures, and Penalties Regulations, 31 CFR part 501:

(1) All transactions prohibited by section 5 of Executive Order (E.O.) 13846 that are ordinarily incident and necessary to the wind-down of any transaction involving any vessel in which one or more entities described below in this general license, have an interest, including the vessels described in the Annex to this general license (the “blocked vessels”); and

(2) All transactions prohibited by the Iranian Transactions and Sanctions Regulations, 31 CFR part 560 (ITSR), that are ordinarily incident and necessary to any of the following activities involving the blocked vessels or entities described below in this general license:

(i) The safe docking and anchoring of any of the blocked vessels in port;

(ii) The preservation of the health or safety of the crew of any of the blocked vessels; and

(iii) Emergency repairs of any of the blocked vessels or environmental mitigation or protection activities relating to any of the blocked vessels.

 

The authorizations of this general license apply to the following entities:

(1) Golden Lotus Oil Gas and Real Estate Joint Stock Company;

(2) Swedish Management CO SA;

(3) Shanghai Xuanrun Shipping Company Limited;

(4) Global Marine Ship Management Co., Ltd.; or

(5) Any entity in which one or more of the above entities own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.

 

This general license does not authorize:

(1) The offloading of any Iranian-origin petroleum, petroleum products, or petrochemical products;

(2) The entry into any new commercial contracts involving the blocked vessels or the entities described in above in this general license. Any transactions otherwise prohibited by section 5 of E.O. 13846 or the ITSR, including transactions involving any person blocked pursuant to section 5 of E.O. 13846 or the ITSR other than the blocked entities described above unless separately authorized.

 

https://home.treasury.gov/system/files/126/iran_glo.pdf

 

Question 1119: Does General License (GL) O authorize all wind-down transactions for any vessel that was blocked on March 2, 2023?  What if the vessel contains Iranian-origin merchandise?

 

Answer: Iran GL O authorizes U.S. persons to wind down all transactions otherwise prohibited by section 5 of Executive Order 13846 involving any vessel blocked as part of the March 2, 2023 designation (“blocked vessels”), subject to certain conditions.  This includes, among other activities, the unloading of any non-Iranian merchandise loaded on the blocked vessel as of March 2, 2023, provided there is no other sanctions nexus.

 

U.S. persons are separately prohibited, pursuant to the Iranian Transactions and Sanctions Regulations, 31 CFR part 560 (ITSR), from engaging in most Iran-related transactions.  Accordingly, for blocked vessels containing Iranian-origin merchandise or involving persons ordinarily resident in Iran, Iran GL O provides a separate, more limited authorization under the ITSR.  This narrower authorization under the ITSR allows only transactions ordinarily incident and necessary to certain limited safety and environmental situations:  the safe docking and anchoring of any of the blocked vessels in port, the preservation of the health and safety of the crew, or emergency repairs or environmental mitigation or protection activities.  The offloading of Iranian-origin petroleum, petroleum products, or petrochemical products, regardless of the situation, is not authorized pursuant to Iran GL O and requires a specific license from OFAC.

 

U.S. financial institutions may also process transactions conducted by non-U.S. persons if such transactions would be authorized for U.S. persons pursuant to Iran GL O.  Iran GL O is in effect until 12:01 Eastern daylight time, June 30, 2023.  Persons unable to complete authorized transactions involving the blocked vessels specified in Iran GL O before its expiration are encouraged to seek guidance from OFAC in advance of that date.  As with all OFAC GLs, Iran GL O only authorizes against the authorities identified in the GL and contains certain conditions.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1119

 

Question 1120: Do non-U.S. persons risk exposure to U.S. sanctions for engaging in transactions that U.S. persons would be authorized to engage in under Iran General License (GL) O?

 

Answer: No.  Non-U.S. persons generally do not risk exposure to sanctions for engaging in activities or facilitating transactions for such activities that would be authorized for U.S. persons pursuant to GL O.  Non-U.S. persons unable to wind down transactions in accordance with Iran GL O before 12:01 a.m. eastern daylight time, June 30, 2023, are encouraged to seek guidance from OFAC in advance of that date.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1120

 

In addition, the following updates have been made to OFAC's list of Specially Designated Nationals:

 

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

 

  • Bushehr Petrochemical Company of Iran;
  • Corporativo Title I, S.A. DE C.V., of Mexico;
  • Corporativo Ts Business Inc, S.A. DE C.V., of Mexico;
  • Global Marine Ship Management CO., LTD. of China;
  • Golden Lotus Oil Gas And Real Estate Joint Stock Company of Vietnam;
  • Integracion Badeva, S.A. DE C.V., of Mexico;
  • JM Providers Office, S.A. DE C.V., of Mexico;
  • Promotora Vallarta One, S.A. DE C.V. of Mexico;
  • Recservi, S.A. DE C.V., of Mexico;
  • Servicios Administrativos Fordtwoo, S.A. DE C.V., of Mexico;
  • Shanghai Xuanrun Shipping Company Limited, of China;
  • Shiraz Petrochemical Company of Iran;
  • Swedish Management CO SA, of the United Arab Emirates; and
  • TS Business Corporativo, S.A. DE C.V., of Mexico.

 

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

 

  • AMIAS Chemical/Products Tanker Vietnam flag; Vessel Registration Identification IMO 9342786;
  • Cattle Force Livestock Carrier Togo flag; Vessel Registration Identification IMO 9175901;
  • Dolphin LPG Tanker Sao Tome and Principe flag; Vessel Registration Identification IMO 9052331;
  • Forever Rich Chemical/Products Tanker Hong Kong flag; Vessel Registration Identification IMO 9203928;
  • Full Star Chemical/Products Tanker Hong Kong flag; Vessel Registration Identification IMO 9773301;
  • Gas Cathar LPG Tanker Panama flag; Vessel Registration Identification IMO 9250505;
  • Gladiator Tug Togo flag; Vessel Registration Identification IMO 7621011;
  • Golden Bridge Bulk Carrier Panama flag; Vessel Registration Identification IMO 9218301;
  • Golden Light 09 Bulk Carrier Vietnam flag; Vessel Registration Identification IMO 9445057;
  • Golden Phoenix Bulk Carrier Panama flag; Vessel Registration Identification IMO 9224790;
  • Hercules Offshore Tug/Supply Ship Togo flag; Vessel Registration Identification IMO 9558517;
  • Jamaica Crude Oil Tanker Vietnam flag; Vessel Registration Identification IMO 9230098;
  • Lauren LPG Tanker Tuvalu flag; Vessel Registration Identification IMO 9249685;
  • Liang Sheng Chemical/Products Tanker Hong Kong flag; Vessel Registration Identification IMO 9526693;
  • Rising Eagle Bulk Carrier St. Vincent and the Grenadines flag; Vessel Registration Identification IMO 9073672;
  • Rising Falcon Bulk Carrier St. Vincent and the Grenadines flag; Vessel Registration Identification IMO 9105396;
  • Rising Harrier Bulk Carrier St. Vincent and the Grenadines flag; Vessel Registration Identification IMO 9122291;
  • Xuan Ning Chemical/Products Tanker China flag; Vessel Registration Identification IMO 9349095;
  • Yong Xiang 29 Chemical/Products Tanker China flag; Vessel Registration Identification IMO 8744107;
  • Yong Xin Chemical/Products Tanker Hong Kong flag; Vessel Registration Identification IMO 9203930.

 

https://www.state.gov/designating-iran-sanctions-evaders/ and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230302

 

*******

 

March 3, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Elena Anatolievna Lenskaya, Andrei Andreevich Zadachin, and Danila Yurievich Mikheev for their involvement in serious human rights abuse against human rights defender, prominent opposition leader, author, and historian Vladimir Kara-Murza (Kara-Murza). These individuals are being designated pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world.

 

Kara-Murza has been a major advocate for the adoption of Magnitsky-style sanctions authorities by the United States, Canada, the European Union, and the United Kingdom to target human rights abusers and corrupt actors in Russia. U.S. Senator John McCain (R-Ariz.) called Kara-Murza “one of the most passionate and effective advocates for passage of the Magnitsky Act.” Sergei Magnitsky, the namesake of Magnitsky sanctions, was an attorney and auditor who uncovered a large-scale tax fraud scheme by Russian officials and was then arrested and detained by Russian authorities, subjected to physical abuse and psychological pressure, and died in a pretrial detention center in Moscow.

 

Kara-Murza was arrested in Moscow in April 2022 for speaking out against Russia’s war of aggression against Ukraine. Since then, the Kremlin has had additional politically motivated charges brought against Kara-Murza, and he currently faces the prospect of more than 35 years in prison. Governments and human rights organizations around the world have called for Kara-Murza’s release. In January 2022, the Department of State launched the “Without Just Cause” campaign, which calls for the release of Kara-Murza and other political prisoners globally. In May 2022, Amnesty International determined Kara-Murza to be a prisoner of conscience. In November 2022, Canada designated all three individuals for systematic human rights violations in Russia against opposition leaders, including Vladimir Kara-Murza.

 

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

 

  • Kozlov, Ilya Pavlovich of Russia;
  • Lenskaya, Elena Anatolievna of Russia;
  • Mikheev, Danila Yurievich of Russia;
  • Mishchenko, Diana Igorevna of Russia;
  • Sviridenko, Oleg Mikhailovich of Russia; and
  • Zadachin, Andrei Andreevich of Russia.

 

https://home.treasury.gov/news/press-releases/jy1320 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230303

 

********

 

March 8, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned several Iranian regime officials and entities, including two senior officials in Iran’s prison system who have been responsible for serious human rights abuses against women and girls. OFAC also took action against the top commander of the Iranian army and a high-ranking leader in the Islamic Revolutionary Guard Corps (IRGC), as well as an Iranian official who was central to the regime’s efforts to block internet access. Finally, OFAC is sanctioning three Iranian companies and their leadership for enabling the violent repression by the Iranian Law Enforcement Forces (LEF) of peaceful protestors, including many women and girls. Iran’s prisons are notorious for mistreatment, abuse, and death. Women prisoners, especially, suffer sexual violence, torture, and other cruel, inhumane, and degrading treatment.

 

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

 

  • Abdollahinejad, Bahram of Iran;
  • Amiri, Mahdi of Iran;
  • Asgharian, Reza of Iran;
  • Bakhshi, Dariush of Iran;
  • Chaharmahali, Ali of Iran;
  • Mousavi, Sayyed Abdolrahim of Iran;
  • Ramezanian Sani, Gholamreza of Iran; and
  • ShahsavarI, Habib of Iran.

 

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

 

  • Entebagh Gostar Sepehr Company of Iran;
  • Naji Pars Amin Institute of Iran; and
  • Naji Pas Company of Iran; of Iran.

 

https://home.treasury.gov/news/press-releases/jy1327 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230308

 

*******

 

March 9, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 39 entities constituting a significant “shadow banking” network, one of several multi-jurisdictional illicit finance systems which grant sanctioned Iranian entities, such as Persian Gulf Petrochemical Industry Commercial Co. (PGPICC) and Triliance Petrochemical Co. Ltd. (Triliance), access to the international financial system and obfuscate their trade with foreign customers. Iranian exchange houses create front companies abroad to enable trade on behalf of their Iranian clients, with foreign currency transactions maintained via internal ledgers. PGPICC is the marketing arm of sanctioned Iranian petrochemical conglomerate Persian Gulf Petrochemical Industries Company (PGPIC), which generates the equivalent of tens of billions of dollars annually for the Iranian regime.

 

OFAC also designated a network of five companies and one individual for supporting Iran’s unmanned aerial vehicle (UAV) procurement efforts. This People’s Republic of China-based network is responsible for the sale and shipment of thousands of aerospace components, including components that can be used for UAV applications, to the Iran Aircraft Manufacturing Industrial Company (HESA). HESA has been involved in the production of the Shahed-136 UAV model that Iran has used to attack oil tankers and has exported to Russia. HESA was designated pursuant to Executive Order (E.O.) 13382 on September 17, 2008, for being owned or controlled by Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) and for having provided support to Iran’s Islamic Revolutionary Guard Corps (IRGC).

 

The following individual has been added to OFAC's SDN List:

 

  • Yuan, Yun Xia of China.

 

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

 

  • Al Kashaf Petroleum And Petrochemical Trading L.L.C. of the United Arab Emirates;
  • Albahr Alaahmar Energy FZE of the United Arab Emirates;
  • Albahr Alaahmar Offshore Refined Oil Product Trading L.L.C. of the United Arab Emirates;
  • Alliance Energy PVT. Limited of Pakistan;
  • Alshivan Line Trading FZE of the United Arab Emirates;
  • Bavi General Trading Co L.L.C. of the United Arab Emirates;
  • Bordo Plastic Materials Trading L.L.C. of the United Arab Emirates;
  • Dayan Global Trade Dis Ticaret Ithalat Ihracat Sanayi Ve Ticaret Limited Sirketi of Turkey;
  • Dragon Trading Limited of the Marshall Islands;
  • Fairtrade Non Edible Oil And Liquefied Natural Gas Trading L.L.C. of the United Arab Emirates;
  • Famin FZE of the United Arab Emirates;
  • Foraben Trading Limited of China;
  • Global Visiness PTE. LTD., of China and Singapore;
  • Glotreasure Company Limited of China;
  • Goldenix Co., Limited of China;
  • Greenland Oil & Gas Trading FZE of the United Arab Emirates;
  • Guilin Alpha Rubber & Plastics Technology CO., LTD of China;
  • Hangzhou Fuyang Koto Machinery CO., LTD of China;
  • Herstel Trading Limited of the Marshall Islands;
  • HK Sihai Yingtong Industry Co., Limited of China;
  • Hongkong Canway Co., Limited of China;
  • Hongkong Well International Trading Limited of China;
  • Horryzin International Trade Co., Limited of China;
  • Jin Xin Nuo Trading Limited of China;
  • Kambiz Nabizadeh And Partners Exchange of Iran;
  • Longford Trading L.L.C. of the United Arab Emirates;
  • Lowell Limited of China;
  • Marafi International Trading Co., Limited of China;
  • Mehr Petrochemical Company of Iran;
  • Melikal For Medical & Medicine Trading Co., Limited of China;
  • Multi Well Trading Co., Limited of China;
  • Naab Kimya Dis Ticaret Limited Sirketi of Turkey;
  • Nashville HK Limited of China;
  • Ningbo More Interest I/E CO., LTD. of China;
  • Nord Trading L.L.C. of the United Arab Emirates;
  • QI Group Limited of China;
  • Raven International Trade Limited of China;
  • S&C Trade PTY CO., LTD of China;
  • Salita Trade Limited of China;
  • Shams Alrabeea Chemicals Trading L.L.C. of the United Arab Emirates;
  • Shenzhen Caspro Technology CO., LTD of China;
  • Sparrow Trading FZE of the United Arab Emirates;
  • Unite Resources Co., Limited of China; and
  • Univest Limited of China.

 

https://home.treasury.gov/news/press-releases/jy1330 and https://home.treasury.gov/news/press-releases/jy1331 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230309

 

*******

 

March 15, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) made the following Balkans-related Designations and Counter Narcotics Designation to its Specially Designated Nationals (SDN) List:

 

  • Gacanin, Edin of Bosnia and Herzegovina; Dubai, United Arab Emirates; and The Netherlands;
  • Mehmedagic, Osman of Bosnia and Herzegovina; and
  • Stankovic, Dragan of Bosnia and Herzegovina.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230315

 

*******

 

March 21, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), in coordination with the Federal Bureau of Investigation (FBI), designated four entities and three individuals in Iran and Turkey for their involvement in the procurement of equipment, including European-origin engines of unmanned aerial vehicles (UAV) in support of Iran’s UAV and weapons programs. This procurement network operates on behalf of Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL), which oversees several firms involved in UAV and ballistic missile development.

 

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

 

  • Bukey, Murat of Turkey;
  • Mahmoudi, Asghar of Iran;
  • Paidar, Amanallah of Iran.

 

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

 

  • Defense Technology And Science Research Center of Iran;
  • Farazan Industrial Engineering, Inc. of Iran;
  • Ozone Havacilik Ve Savunma Sanayi Ticaret Anonim Sirketi of Turkey; and
  • Selin Technic Co of Iran.

 

https://home.treasury.gov/news/press-releases/jy1355 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230321

 

*******

 

March 24, 2023: The Department of the Treasury's Office of Foreign Assets Control (OFAC) amended the Belarus Sanctions Regulations and reissued them in their entirety.

OFAC also published an alert, "Sanctions Risks Associated with Provision of Jet Fuel to the Burmese Military."

 

https://home.treasury.gov/system/files/126/20230324_ofac_alert_jet_fuel.pdf

 

OFAC also designated two individuals and six entities that are connected to Burma’s military and that have enabled the military regime’s continuing atrocities, including through the importation, storage, and distribution of jet fuel to Burma’s military. These actions come as the military regime prepares to mark the 78th Armed Forces Day. The two individuals and six entities are being designated pursuant to Executive Order (E.O) 14014.

 

OFAC also designated three entities and nine individuals and identifying one presidential aircraft as blocked property, pursuant to Executive Order (E.O.) 14038. These designations build on sanctions imposed on individuals and entities in Belarus in response to the ongoing brutal crackdown against the pro-democracy movement and civil society surrounding the fraudulent August 2020 presidential election. These actions also underscore the United States’ willingness to hold the regime in Minsk to account for its complicity in the Russian Federation’s ongoing unjustified war of choice against Ukraine.

 

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

 

  • Baldouskaya, Alena Anatolieuna of Belarus;
  • Duk, Dzyanis Uladzimiravich of Belarus;
  • Fedasenka, Katsyaryna Alyaksandrauna of Belarus;
  • Ivankovich, Valery Valerievich of Belarus;
  • Karpenka, Ihar Vasilyevich of Belarus and Russia;
  • Kuntsevich, Alena Kanstantsinauna of Belarus;
  • Latt, Tun Min of Burma;
  • Nikiforovich, Sergei Olegovich of Belarus;
  • Soe, Win Min of Burma;
  • Tkachou, Alyaksandr Henadzievich of Belarus;
  • Yuzhyk, Alyaksandr Uladzimiravich of Belarus.

 

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

 

  • Asia Sun Group of Burma;
  • Asia Sun Trading Co. Ltd. of Burma;
  • Cargo Link Petroleum Logistics Co. Ltd. of Burma;
  • Open Joint Stock Company Belarusian Automobile Plant of Belarus;
  • Open Joint Stock Company Minsk Automobile Plant of Belarus;
  • Star Sapphire Group Of Companies of Burma;
  • Star Sapphire Group Pte. Ltd., of Singapore; and
  • Star Sapphire Trading Company Limited of Burma.

 

The following aircraft have been added to OFAC's SDN List

 

  • EW-001PA; Aircraft Manufacture Date 29 Jan 2002; Aircraft Model B.737-8EV BBJ2; Aircraft Manufacturer's Serial Number (MSN) 33079; Aircraft Tail Number EW-001PA.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230324 and https://home.treasury.gov/news/press-releases/jy1365 and https://home.treasury.gov/news/press-releases/jy1364

 

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March 28, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action in coordination with counterparts in the United Kingdom to designate key individuals supporting the regime of Syrian President Bashar al-Assad (al-Assad) and the production or export of Captagon, a dangerous amphetamine. The trade in Captagon is estimated to have become a billion-dollar illicit enterprise. These designations, some of which are being implemented pursuant to the Caesar Syrian Civilian Protection Act of 2019 (“Caesar Act”), also highlight the important role of Lebanese drug traffickers, some of whom maintain ties to Hizballah in facilitating the export of Captagon. This action also underscores the al-Assad family's dominance of illicit Captagon trafficking and its funding for the oppressive Syrian regime.

 

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

 

  • Abu Zureik, Imad of Syria;
  • Al-Assad, Samer Kamal of Syria;
  • Al-Assad, Wassim of Syria;
  • Daqqou, Hassan Muhammad of Syria;
  • Qaddour, Khalid of Syria; and
  • Zaitar, Noah of Syria and Lebanon.

 

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

 

  • Al-Israa Establishment For Import And Export of Lebanon; and
  • Hassan Daqqou Trading of Lebanon.

 

https://home.treasury.gov/news/press-releases/jy1369 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230328

 

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March 30, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned one individual, Mkrtychev Ashot, for attempting to facilitate arms deals between Russia and the Democratic People’s Republic of Korea (DPRK). Sanctions and export controls imposed by a coalition of over 30 countries have constrained Russia’s ability to replace lost military equipment and supplies with modern technology. At the same time, the United States and its partners are continuing to provide Ukraine with advanced weapons to defend itself against Russia’s brutal war of choice.

 

Between the end of 2022 and early 2023, Mkrtychev worked with DPRK officials to obtain over two dozen kinds of weapons and munitions for Russia in exchange for materials ranging from commercial aircraft, raw materials, and commodities to be sent to the DPRK. Mkrtychev’s negotiations with DPRK and Russian officials detailed mutually beneficial cooperation between North Korea and Russia to include financial payments and barter arrangements. He confirmed Russia’s readiness to receive military equipment from the DPRK with senior Russian officials. Mkrtychev’s negotiations with those officials indicated that necessary Russian preparations for a proposed deal were complete and that they were ready to receive materials from and transfer materials to the DPRK. He also provided DPRK officials with information from Russian officials, likely connected to his attempts to obtain military equipment for Russia from DPRK. Lastly, Mkrtychev worked with a Russian individual to locate commercial aircraft suitable for delivery to the DPRK.

 

The following individual has been added to OFAC's SDN List:

 

  • Mkrtychev, Ashot of Slovakia.

 

https://home.treasury.gov/news/press-releases/jy1377 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230330

 

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March 31, 2023: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issued Global Magnitsky General License 7, "Authorizing Certain Transactions Involving Tabacalera del Este S.A. or Tabacos USA Inc. Pursuant to the Tobacco Master Settlement Agreement."

 

Global Magnitsky General License 7: All transactions prohibited by the Global Magnitsky Sanctions Regulations, 31 CFR part 583 (GMSR), involving Tabacalera del Este S.A. (“TABESA”), Tabacos USA Inc. (“Tabacos”), or any entity in which TABESA or Tabacos owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest, that are ordinarily incident and necessary to payments under the tobacco Master Settlement Agreement (MSA), entered into on November 23, 1998, between certain U.S. state and territory attorneys general and certain tobacco companies, are authorized.

 

This general license does not authorize any transaction otherwise prohibited by the GMSR, including transactions involving any person blocked pursuant to the GMSR other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.

 

OFAC is also issued one Global Magnitsky-related Frequently Asked Question (1121).

 

Question 1121: What does Global Magnitksy General License 7, Authorizing Certain Transactions Involving Tabacalera del Este, S.A. or Tabacos USA Inc., Pursuant to the Tobacco Master Settlement Agreement, authorize?

 

Answer: Global Magnitsky General License 7 authorizes certain transactions involving the blocked entities Tabacos USA Inc. (Tabacos) and Tabacalera del Este S.A. (Tabesa) (or any entity in which Tabesa or Tabacos owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest) that are ordinarily incident and necessary to payments under the Master Settlement Agreement (MSA) entered into on November 23, 1998, between certain U.S. state and territory attorneys general and certain tobacco companies.  On January 26, 2023, OFAC designated former Paraguayan president Horacio Manuel Cartes Jara (Cartes) pursuant to Executive Order 13818 for involvement in corruption and also designated Tabacos for being owned or controlled by Cartes.  On March 31, 2023, OFAC identified Tabesa as an entity that is owned, directly or indirectly, 50 percent or more by Cartes and added Tabesa to the SDN List.

 

Global Magnitsky General License 7 does not authorize debits to any blocked account on the books of a U.S. financial institution or any other transactions otherwise prohibited by the Global Magnitsky Sanctions Regulations.

 

Additionally, the following name has been added to OFAC's list of Specially Designated Nationals:

 

Tabacalera Del Este S.A. of Paraguay.

 

https://ofac.treasury.gov/faqs/1121 and https://ofac.treasury.gov/recent-actions/20230331 and https://ofac.treasury.gov/media/931551/download?inline

 

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Fines and Penalties

 

March 1, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $332,500 settlement with Godfrey Phillips India Limited ("GPI").  GPI, a Mumbai, India-registered tobacco company, has agreed to settle its potential civil liability for five apparent violations of the North Korea Sanctions Regulations, 31 C.F.R. part 510.  Specifically, between July and August 2017, GPI requested payment in U.S. dollars for its indirect exportation of tobacco to the Democratic People’s Republic of Korea.  One of these five payments was directed to the foreign branch of a U.S. financial institution.  OFAC determined that GPI did not voluntarily self-disclose the apparent violations and that the apparent violations constitute a non-egregious case.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230301_33 and https://home.treasury.gov/system/files/126/20230301_gpi.pdf

 

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March 2, 2023: Two Kansas men, Cyril Gregory Buyanovsky, 59, of Lawrence, and Douglas Robertson, 55, of Olathe, were arrested on charges related to a years-long scheme to circumvent U.S. export laws that included the illegal export of aviation-related technology to Russia after Russia’s unprovoked invasion of Ukraine on Feb. 24, 2022, and the imposition of stricter restrictions on exports to Russia.

 

According to the indictment, Buyanovsky and Robertson owned and operated KanRus Trading Company, which supplied Western avionics equipment (i.e., electronics installed in aircraft) to Russian companies and provided repair services for equipment used in Russian-manufactured aircraft. Since 2020, the defendants have conspired to evade U.S. export laws by concealing and misstating the true end users, value, and end destinations of their exports and by transshipping items through third-party countries. For example, between November 2020 and February 2021, the defendants received avionics equipment, including a computer processor bearing a sticker identifying Russia’s Federal Security Services (FSB), from a Russian company for repair in the United States. The defendants concealed the true end user and end destination by providing a fraudulent invoice to the shipment company identifying the end destination as Germany.

 

As further alleged, on Feb. 28, 2022, the defendants attempted to export avionics to Russia. U.S. authorities detained the shipment, and the U.S. Department of Commerce informed the defendants that a license was required to export the equipment to Russia. In an April 2022 communication, Robertson expressed to a Russia-based customer that “things are complicated in the USA” and that “[t]his is NOT the right time for [more paperwork and visibility].” Subsequently, in May, June, and July 2022, the defendants illegally transshipped avionics through Armenia and Cyprus to Russia without obtaining the required licenses.

 

The defendants are charged with conspiracy, exporting controlled goods without a license, falsifying and failing to file electronic export information, and smuggling goods contrary to U.S. law. If convicted, they face a maximum penalty of 20 years in prison for each count of exporting controlled goods without a license, up to 10 years in prison for each count of smuggling, and up to five years in prison for each count of conspiracy and falsifying export information. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factor.

 

https://www.justice.gov/opa/pr/two-us-citizens-arrested-illegally-exporting-technology-russia

 

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March 2, 2023: Telefonaktiebolaget LM Ericsson (Ericsson), a multinational telecommunications company headquartered in Stockholm, Sweden, has agreed to plead guilty and pay a criminal penalty of more than $206 million after breaching a 2019 Deferred Prosecution Agreement (DPA).  Ericsson breached the DPA by violating the agreement’s cooperation and disclosure provisions. Based on the same underlying criminal conduct that gave rise to the DPA, Ericsson will plead guilty to engaging in a long-running scheme to violate the Foreign Corrupt Practices Act (FCPA) by paying bribes, falsifying books and records, and failing to implement reasonable internal accounting controls in multiple countries around the world.

 

https://www.justice.gov/opa/pr/ericsson-plead-guilty-and-pay-over-206m-following-breach-2019-fcpa-deferred-prosecution

 

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March 8, 2023: The United States of America obtained a warrant to seize a Boeing 737-7JU aircraft owned by PJSC Rosneft Oil Company (Rosneft), a Russian integrated energy company headquartered in Moscow, Russia headed by Igor Ivanovich Sechin.  The United States District Court for the Eastern District of New York authorized the seizure, finding probable cause that the Boeing aircraft was subject to seizure based on violations of the Export Control Reform Act (ECRA) and the recent sanctions issued against Russia.

 

Since February 2022, when the Russia sanctions went into effect, the plane has left and reentered Russia at least seven times, in violation of federal law. The Boeing jet, which was manufactured in the United States, was last in the United States in March 2014 and is currently believed to be in, traveling to, or from Russia.

 

Rosneft—which is headed by sanctioned oligarch Igor Ivanovich Sechin, who owns the Boeing aircraft.  The Boeing was flown from a foreign country to Russia in violation of the Export Control Reform Act (“ECRA”), and regulations issued thereunder, including the Russia sanctions.  The Boeing is believed to be valued at over $25 million.

 

https://www.justice.gov/usao-edny/pr/united-states-obtains-warrant-seizure-airplane-owned-russian-oil-company-valued-over

 

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March 9, 2023: Nathan Nichols, a 46-year-old resident of Corpus Christi, TX was sentenced in the U.S. District Court for the Southern District of Texas to 27 months in federal prison, immediately followed by two years of supervised release. He pleaded guilty to conspiring to steal government property and operating an illegal gambling business on March 21, 2022.

 

In July 2021, authorities executed a search warrant at Nichols’ residence. They discovered sensitive military equipment, including laser range finders, thermal scopes, night vision scopes, night vision goggles, and laser aiming devices that belonged to the U.S. Army. During his trial, Nichols admitted that he conspired with others to steal sensitive U.S. Army property valued at $2,176,000 from Fort Hood in June 2021. He had been in contact with one of the people responsible for the theft and requested pictures of the property before agreeing to buy it for resale. After he obtained the items, Nichols listed them for sale on eBay.

 

In a separate case, Nichols admitted that from March 2018 to August 2019, he operated illegal gambling businesses in Corpus Christi. Nichols was the co-owner of Theo's Bar and owner and operator of Lady Luck. Both facilities contained illegal sweepstakes games that people play by using computers and monitors rather than casino-style equipment. The games are software-based and function as traditional slot-machine games or “8-liners,” but the reels are simulated on a computer screen rather than on mechanical reels. People playing the machines place bets before each spin and receive winnings in cash.

With his guilty pleas, Nichols agreed to forfeit $2,185,218.73 in proceeds from his illegal activities.

 

https://www.ice.gov/news/releases/texas-man-imprisoned-conspiring-steal-sensitive-military-equipment-running-illegal

 

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March 9, 2023:  A federal grand jury in the District of Columbia returned an indictment charging an Iranian national with the unlawful export of electrical cables and connectors from the United States to Iran through Hong Kong. According to court documents, Mehdi Khoshghadam, a.k.a. “David Lei,” and “Pouyan,” an Iranian national residing in Tehran, Iran, were indicted by a grand jury in the U.S. District Court for the District of Columbia on one count of conspiracy, one count of violation of the International Emergency Economic Powers Act (IEEPA), and one count of conspiracy to commit money laundering. The indictment also includes a forfeiture allegation seeking all proceeds of the alleged crimes. A warrant has been issued for Khoshghadam’s arrest, and he remains a fugitive.

 

https://www.justice.gov/usao-dc/pr/iranian-national-charged-illegally-exporting-electrical-equipment-iran

 

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March 9, 2023: 88 Fed. Reg. 14601: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Edgar Ariel Bernal-Gonzalez for five years until June 10, 2026. On June 10, 2021, in the U.S. District Court for the Southern District of Texas, Edgar Ariel Bernal-Gonzalez (“Bernal-Gonzalez”) was convicted of violating 18 U.S.C. 554(a). Specifically, Bernal-Gonzalez was convicted of smuggling and attempting to smuggle from the United States to Mexico approximately 50 rounds of 9 mm ammunition, approximately 50 rounds of .38 caliber ammunition, one MEC-GAR Colt 38 magazine, one AK-47 Quad rail system, and 12 rubber rifle rail guards. As a result of his conviction, the Court sentenced Bernal-Gonzalez to 10 months of confinement, three years of supervised release, and a $100 assessment.

 

https://www.federalregister.gov/documents/2023/03/09/2023-04821/in-the-matter-of-edgar-ariel-bernal-gonzalez-11932-lake-june-road-balch-springs-tx-75180-order

 

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March 9, 2023: 88 Fed. Reg. 14598: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Erick Samuel Chavez Gonzalez for seven years until August 12, 2027. On August 12, 2020, in the U.S. District Court for the Western District of Texas, Erick Samuel Chavez Gonzalez (“Chavez Gonzalez”) was convicted of violating 18 U.S.C. 554(a). Specifically, Chavez Gonzalez was convicted of knowingly and willfully attempting to smuggle from the United States to Mexico various rifles and handguns. As a result of his conviction, the Court sentenced Chavez Gonzalez to 37 months in prison, with credit for time served, three years of supervised release, and a $100 special assessment.

 

https://www.federalregister.gov/documents/2023/03/09/2023-04820/in-the-matter-of-erick-samuel-chavez-gonzalez-pluton-1708-satelite-cd-juarez-chih-mexico-order

 

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March 9, 2023: 88 Fed. Reg. 14600: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Mohammad Khazrai Shaneivar for ten years until October 1, 2030. On October 1, 2020, in the U.S. District Court for the Northern District of Ohio, Mohammad Khazrai Shaneivar (“Shaneivar”) was convicted of violating the International Emergency Economic Powers Act (50 U.S.C. 1701, et seq.) (“IEEPA”). Specifically, Shaneivar was convicted of exporting and causing to be exported goods from the United States to Iran without the required authorizations from the United States Department of the Treasury's Office of Foreign Assets Control. As a result of his conviction, the Court sentenced Shaneivar to a $100,000 criminal fine in lieu of probation or imprisonment and a $100 assessment.

 

https://www.federalregister.gov/documents/2023/03/09/2023-04823/in-the-matter-of-mohammad-khazrai-shaneivar-16-udine-court-richmond-hill-ontario-l4c8c6-canada-order

 

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March 9, 2023: 88 Fed. Reg. 1414599: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Parisa Mohamadi for ten years until September 10, 2029. On September 10, 2019, in the U.S. District Court for the Northern District of Ohio, Parisa Mohamadi (“Mohamadi”) was convicted of two counts of violating the International Emergency Economic Powers Act (50 U.S.C. 1701, et seq.) (“IEEPA”). Specifically, Mohamadi was convicted of exporting and causing to be exported goods from the United States to Iran without the required authorizations from the United States Department of the Treasury's Office of Foreign Assets Control. As a result of her conviction, the Court sentenced Mohamadi to 24 months in prison on each count, to run concurrently and with credit for time served, two years of supervised release, and a $200 assessment.

 

https://www.federalregister.gov/documents/2023/03/09/2023-04822/in-the-matter-of-parisa-mohamadi-2906-fletcher-parkway-apartment-c-el-cajon-california-92020-order

 

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March 21, 2023: The U.S. Department of Justice unsealed two indictments charging multiple defendants with violations of the Arms Export Control Act (AECA) and the International Emergency Economic Powers Act (IEEPA) for their roles in separate schemes to procure and export U.S. technology to Iran between 2005 and 2013. In connection with this announcement, the Department of Treasury’s Office of Foreign Assets Control designated three of the defendants and four entities for their involvement in the procurement of equipment that supports Iran’s unmanned aerial vehicle (UAV) and weapons programs.

 

United States v. Paidar et al.

According to the indictment, between 2012 and 2013, defendants Amanallah Paidar of Iran, and Murat Bükey, of Turkey, conspired to procure and export U.S. technology for Iran through their companies Farazan Industrial Engineering in Iran, and Ozon Spor Ve Hobbi Ürünleri, in Turkey. Specifically, Paidar and Bükey exported from the United States and transshipped through Turkey a device that can test the efficacy and power of fuel cells and attempted to obtain a bio-detection system that has application in weapons of mass destruction (WMD) research and use.

 

Bükey, who was extradited to the United States from Spain in July 2022, pleaded guilty to conspiring to violate the AECA and IEEPA in December 2022. He was sentenced in the U.S. District Court for the District of Columbia to 28 months in prison, with credit for time served. He will be removed from the United States after completing his sentence. Paidar is a fugitive and remains at large.

 

United States v. Mahmoudi, et al.

According to the indictment, between 2005 and 2009, defendants Agshar Mahmoudi of Iran; Bahram Mahmoudi Mahmoud Alilou of Iran; and Shahin Golshani of the United Arab Emirates (UAE); conspired to obtain U.S. technology, including a high-speed camera that has known nuclear and ballistic missile testing applications, a nose landing gear assembly for an F-5 fighter jet, and a meteorological sensor system, through their companies Aran Modern Devices Kish Company, in Iran; and Modern Technologies, in the UAE. The defendants are fugitives and remain at large.

 

https://www.justice.gov/usao-dc/pr/justice-department-announces-charges-and-sentence-connection-attempts-acquire-military

 

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March 24, 2023: 88 Fed. Reg. 17793: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Jesus Adrian Ramirez for ten years until December 16, 2030. On December 16, 2020, Ramirez was convicted of smuggling and attempting to smuggle from the United States to Mexico firearms and firearm components, including one 40 round AK- 47 variant firearm magazine, two AK-47 variant firearm barrels, two AK-47 variant firearm bolts, two AK-47 variant firearm bolt springs, two AK-47 variant firearm gas pistons, and one AR variant firearm unfinished lower receiver. As a result of his conviction, the Court sentenced Ramirez to 46 months of confinement with credit for time served, three years of supervised release, and a $100 special assessment.

 

https://www.federalregister.gov/documents/2023/03/24/2023-06133/in-the-matter-of-jesus-adrian-ramirez-534-n-maknab-drive-apt-c-nogales-az-85621-and-154-w-mendibles

 

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March 24, 2023: 88 Fed. Reg. 17793: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Manuel Alonso Enriquez for ten years until September 17, 2030. On September 17, 2020, Enriquez was convicted of knowingly and unlawfully attempting to export from the United States to Mexico 3,000 rounds of 7.62 x 39 caliber ammunition. As a result of his conviction, the Court sentenced Enriquez to 37 months in prison, three years of supervised release, a $150 criminal fine, and a $100 assessment.

 

https://www.federalregister.gov/documents/2023/03/24/2023-06121/in-the-matter-of-manuel-alonso-enriquez-12129-st-laurence-avenue-el-paso-texas-79936-order-denying

 

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March 24, 2023: 88 Fed. Reg. 17794: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Gerardo Emmanuel Sifuentes for ten years until September 17, 2030. On September 17, 2020, Sifuentes was convicted of violating 18 U.S.C. 554(a). Specifically, Sifuentes was convicted of smuggling and attempting to smuggle from the United States to Mexico approximately 5,000 rounds of 7.62 x39 caliber ammunition, an Anderson Manufacturing AR-15 rifle, and a Beretta 9mm handgun. As a result of his conviction, the Court sentenced Sifuentes to 46 months of confinement, three years of supervised release, a $100 special assessment, and a $250 fine.

 

https://www.federalregister.gov/documents/2023/03/24/2023-06131/in-the-matter-of-gerardo-emmanuel-sifuentes-247-val-verde-street-el-paso-tx-79905-3916-order-denying

 

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March 24, 2023: 88 Fed. Reg. 17795: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Erik Aguero for ten years until July 15, 2031. On July 15, 2021, Aguero was convicted of smuggling, and attempting to smuggle from the United States to Mexico, various firearms defined under Category I of the United States Munitions List without the required license or written authorization. As a result of his conviction, the Court sentenced Aguero to 48 months of confinement with credit for time served, three years of supervised release, a $100 assessment, and a $1,000 criminal fine.

https://www.federalregister.gov/documents/2023/03/24/2023-06127/in-the-matter-of-enrique-reyes-morales-inmate-number-54549-509-fci-allenwood-low-federal

 

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March 24, 2023: 88 Fed. Reg. 17796: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Randy Lew Williams for ten years until March 3, 2031. On March 3, 2021, Williams was convicted of knowingly and willfully exporting and causing to be exported from the United States to Iraq Glock 19 gun barrels; Glock 19 slides, a Glock 19 recoil spring assembly, a Glock 19 slide stop lever, a Glock 19 trigger mechanism housing with ejector, and a Glock 19 trigger with trigger bar, which are designated as defense articles on the United States Munitions Lists, without having first obtained from the Department of State a license for such export or written authorization. As a result of his conviction, the Court sentenced Williams to 40 months of confinement, two years of supervised release, and a $300 assessment. Williams was also placed on the U.S. Department of State’s debarred list.

 

https://www.federalregister.gov/documents/2023/03/24/2023-06126/in-the-matter-of-randy-lew-williams-4009-oxford-way-norman-ok-73072-3231-order-denying-export

 

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March 24, 2023: 88 Fed. Reg 17797: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Genovevo Alvarez-Ronquillo for ten years until October 13, 2030. On October 13, 2020, Alvarez-Ronquillo was convicted of multiple counts of violating 18 U.S.C. 554(a). Specifically, Alvarez-Ronquillo was convicted of fraudulently and knowingly receiving, concealing, buying, selling, and facilitating the transportation, concealment, and sale of merchandise, specifically firearms, from the United States to Mexico. As a result of his conviction, the Court sentenced Alvarez- Ronquillo to 78 months in prison, two years of supervised release, and a $2,400 special assessment.

 

https://www.federalregister.gov/documents/2023/03/24/2023-06132/in-the-matter-of-genovevo-alvarez-ronquillo-inmate-number-04312-151-fci-allenwood-low-federal

 

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March 24, 2023: 88 Fed. Reg. 17798: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Joseph Ormond Kirk for five years until October 5, 2026. On October 5, 2021, Kirk was convicted of smuggling and attempting to smuggle from the United States to Mexico various firearms. As a result of his conviction, the Court sentenced Kirk to 18 months of confinement, two years of supervised release, and a $100 assessment.

 

https://www.federalregister.gov/documents/2023/03/24/2023-06129/in-the-matter-of-joseph-ormond-kirk-iii-13204-saxby-court-austin-tx-78729-order-denying-export

 

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March 24, 2023: Igor Panchernikov, 41, a former Corona, CAresident who once served in the United States Air Force Reserves, pleaded guilty to one count of conspiracy to violate the Arms Export Control Act. He has been in federal custody since July 2022 after being extradited to the United States from Israel.

According to his plea agreement, from December 2016 to May 2018, Panchernikov conspired with other individuals to knowingly export from the United States to Russia defense articles without obtaining from the State Department a valid license or other approval for such exports.

 

Panchernikov’s accomplices purchased defense articles – including thermal riflescopes, weapons sights, monoculars, and night vision googles – from various online sellers located in the United States and directed the sellers to mail those items to Panchernikov’s residence in Corona. At his Corona residence, Panchernikov received at least 19 defense articles that his co-conspirators purchased from online sellers. After receiving these items, Panchernikov inspected the items to ensure that they were undamaged and operational. Pursuant to his co-conspirators’ instructions, Panchernikov then mailed two of the items to accomplices in Russia and mailed 17 defense articles to Elena Shifrin, 61, of Mundelein, Illinois, who then mailed these items to Russia.

 

https://www.justice.gov/usao-cdca/pr/former-us-serviceman-pleads-guilty-exporting-defense-items-such-night-vision-goggles

 

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March 27, 2023: Dariush Niknia was sentenced to two years and ten months in prison, and Richard Lant, was sentenced to 24 months of home detention and fined $7,500 for conspiracy to export to an embargoed country, Iran.

 

According to court documents, between May and October 2015, Niknia, Lant, and others conspired to unlawfully sell and supply 500 Russian-made tank helmets to Niknia’s contact in Tehran, Iran. The helmets were to be configured for a Russian-produced T-72S battle tank and were required to have a five-pin plug, a feature that is necessary to enable a tank communication device.

 

https://www.justice.gov/usao-edca/pr/elk-grove-and-las-vegas-residents-sentenced-conspiring-violate-us-trade-embargo-iran

 

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March 29, 2023: 88 Fed. Reg. 18518: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Obed Rafael Cuevas-Serratos for nine years until August 3, 2030. On August 3, 2021 Cuevas-Serratos was convicted of smuggling and attempting to smuggle from the United States to Mexico approximately 13000 rounds of 7.62-millimeter ammunition. As a result of his conviction, the Court sentenced CuevasSerratos to 30 months of confinement, three years of supervised release, and a $100 assessment.

 

https://www.federalregister.gov/documents/2023/03/29/2023-06418/in-the-matter-of-obed-rafael-cuevas-serratos-1502-calle-del-norte-apt-11-laredo-tx-78041-6000-order

 

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March 29, 2023: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has renewed for 180 days the Temporary Denial Orders denying the export privileges of PJSC Aeroflot of Russia.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1486-e2825/file

 

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March 29, 2023: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has renewed for 180 days the Temporary Denial Orders denying the export privileges of UTair Aviation JSC of Russia.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1487-e2826/file

 

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March 29, 2023: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has renewed for 180 days the Temporary Denial Orders denying the export privileges of Azur Air of Russia.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1488-e2827/file

 

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March 29, 2023: A federal jury convicted three military contractors on one count of conspiring to defraud the United States and two counts of major fraud. According to court documents and evidence presented at trial, former Envistacom LLC President and co-founder Alan Carson, former Envistacom Vice President Valerie Hayes, and the owner of another company, Philip Flores, conspired to defraud the United States at least from September 2014 through November 2016, by preparing and procuring sham quotes for government contracts totaling over $7.8 million. Carson, Hayes, and Flores also fraudulently prepared “independent” government cost estimates and other procurement documents for the award of these contracts and made false statements, representations, and material omissions to federal government contracting officials regarding these estimates being legitimate independent cost estimates and the sham quotes being “competitive.”

 

https://www.justice.gov/opa/pr/military-contractors-convicted-7-million-procurement-fraud-scheme

 

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March 30, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with Wells Fargo Bank, N.A. (“Wells Fargo”).  Wells Fargo agreed to remit $30,000,000 to settle its potential civil liability for apparent violations of sanctions against Iran, Syria, and Sudan. For about seven years beginning in 2008 and ending in 2015, Wells Fargo and its predecessor, Wachovia Bank (“Wachovia”), provided a foreign bank located in Europe with software that the foreign bank then used to process trade finance transactions with U.S.-sanctioned jurisdictions and persons.  Wachovia, at the direction of a mid-level manager, customized a trade insourcing software platform for general use by the European bank that Wachovia knew or should have known would involve engaging in trade-finance transactions with sanctioned jurisdictions and persons.

 

The settlement amount reflects OFAC’s determination that Wells Fargo’s 124 apparent violations, which occurred between approximately December 27, 2010, and December 7, 2015, were voluntarily self disclosed. Moreover, while OFAC determined that the apparent violations were egregious, the failure by Wells Fargo to identify and prevent the apparent violations was not a result of a systemic compliance breakdown within the broader Wells Fargo organization, which OFAC acknowledges had a historically strong overall sanctions compliance program.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230330_33 and https://home.treasury.gov/system/files/126/20230330_wells_fargo.pdf

 

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March 30, 2023: 88 Fed. Reg. 19057: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Jose Luis Alonso for seven years until January 13, 2029. On January 13, 2022, Alonso was convicted of attempted smuggling from the United States to Mexico one (1) AM 15 pistol, one (1) .22 caliber rifle, and one (1) 12-gauge shotgun. As a result of his conviction, the Court sentenced Alonso to 24 months of confinement, three years of supervised release, and a $100 assessment.

 

https://www.federalregister.gov/documents/2023/03/30/2023-06635/in-the-matter-of-jose-luis-alonso-3433-nottingham-drive-brownsville-tx-78526-and-2719-gibraltar

 

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March 30, 2023: 88 Fed. Reg. 19058: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Ye Sang “Ivy” Wang for ten years until December 21, 2031. On December 21, 2021, Wang was convicted of conspiring to willfully export from the United States to China, controlled military equipment and supplies for profit without the required licenses. As a result of her conviction, the Court sentenced Wang to 30 months of confinement, three years of supervised release, a $100 special assessment, and a $20,000 criminal fine. Pursuant to Section 1760(e) of the Export Control Reform Act (“ECRA”), the export privileges of any person who has been convicted of certain offenses, including, but not limited to, 18 U.S.C. 371, may be denied for a period of up to ten (10) years from the date of his/her conviction. 50 U.S.C. 4819(e). In addition, any Bureau of Industry and Security (“BIS”) licenses or other authorizations issued under ECRA, in which the person had an interest at the time of the conviction, may be revoked.

 

https://www.federalregister.gov/documents/2023/03/30/2023-06631/order-denying-export-privileges-in-the-matter-of-ye-sang-ivy-wang-972-red-granite-road-chula-vista

 

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March 30, 2023: 88 Fed. Reg. 19059: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Mario Ramirez-Rios for ten years until October 23, 2030. On October 23, 2020, Ramirez-Rios was convicted of attempted smuggling from the United States to Mexico: 3,280 rounds of 7.62 x 39mm ammunition and 200 rounds of 9 mm ammunition, items designated as defense articles on the United States Munitions List without the required license or written approval. As a result of his conviction, the Court sentenced Ramirez-Rios to 46 months of confinement with credit for time served and a $100 special assessment.

 

https://www.federalregister.gov/documents/2023/03/30/2023-06634/in-the-matter-of-mario-ramirez-rios-3724-magali-circle-brownsville-texas-78521

 

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March 31, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with Uphold HQ Inc. (“Uphold”).  Uphold agreed to remit $72,230.32 to settle its potential civil liability for apparent violations of sanctions against Iran, Cuba, and Venezuela.  Between March 2017 and May 2022, Uphold or its affiliates processed 152 transactions totaling $180,575.80 in apparent violation of OFAC’s sanctions against Iran, Cuba, and Venezuela.  These apparent violations included processing transactions for customers who self-identified as being located in Iran or Cuba and for employees of the Government of Venezuela.  The settlement amount reflects OFAC’s determination that Uphold’s apparent violations were non-egregious and voluntarily self-disclosed.

 

https://ofac.treasury.gov/recent-actions/20230331_33 and https://ofac.treasury.gov/media/931556/download?inline

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