This newsletter is a listing of the latest changes in export control regulations through May 31, 2022.  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

 

The United States, European Union And G7 Increase Cost On Russia By Increased Sanctions For Ukraine Invasion

 

May 8, 2022: the United States, the European Union and G7 committed to ratchet up the costs on Russia for its invasion of Ukraine by collectively taking further measures, consistent with each partner’s respective legal authorities and processes. The White House issued the following information regarding the actions the United States is taking:

Targeting State-Controlled Media Within Russia That Bolster Putin’s War. The United States will sanction three of Russia’s most highly-viewed directly or indirectly state-controlled television stations in Russia – Joint Stock Company Channel One Russia, Television Station Russia-1, and Joint Stock Company NTV Broadcasting Company. All three stations have been among the largest recipients of foreign revenue, which feeds back to the Russian State’s revenue.

Banning Services that Help Finance Putin’s War and Aid Sanctions Evasion. The United States will prohibit U.S. persons from providing accounting, trust and corporate formation, and management consulting services to any person in the Russian Federation. These services are key to Russian companies and elites building wealth, thereby generating revenue for Putin’s war machine, and to trying to hide that wealth and evade sanctions. This action builds on previous prohibitions to restrict the export of goods related to aerospace, marine, electronics, technology, and defense and related materiel sectors of the Russian economy.

Cutting off Imports of Russian Oil and Reducing Dependence on Russian Energy. The United States has already banned the import of Russian oil, gas, and coal. The entire G7 committed to phasing out or banning the import of Russian oil. This will hit hard at the main artery of Putin’s economy and deny Putin  the revenue needed to fund this war. The G7 also committed to work together to ensure stable global energy supplies, while accelerating efforts to reduce dependence on fossil fuels.

Impose further export controls and sanctions to degrade Russia’s war efforts.  The United States will issue a new rule that imposes additional restrictions on Russia’s industrial sector, including a broad range of inputs and products including wood products, industrial engines, boilers, motors, fans, and ventilation equipment, bulldozers, and many other items with industrial and commercial applications. These new controls will further limit Russia’s access to items and revenue that could support its military capabilities. The United States also sanctioned Limited Liability Company Promtekhnologiya, which produces rifles and other weapons that have been used in military operations in Ukraine; seven shipping companies, which own or operate 69 vessels; and one marine towing company. The Nuclear Regulatory Commission will also suspend general licenses for exports of source material, special nuclear material, byproduct material, and deuterium to Russia.

Impose Sanctions on Russian Elites and their Family Members and Visa Restrictions on Russian and Belarusian Officials Undermining the Sovereignty, Territorial Integrity, or Political Independence of Ukraine. The United States imposed approximately 2,600 visa restrictions on Russian and Belarusian officials in response to their ongoing efforts to undermine the sovereignty, territorial integrity, or political independence of Ukraine. Additionally, the United States issued a new visa restriction policy that applies to Russian Federation military officials and Russia-backed or Russia-installed purported authorities who are believed to have been involved in human rights abuses, violations of international humanitarian law, or public corruption in Ukraine. The United States also sanctioned eight executives from Sberbank– the largest financial institution in Russia and uniquely important to the Russian economy, holding about a third of all bank assets in Russia; twenty-seven executives from Gazprombank – a prominent Russian bank facilitating business by Russia’s Gazprom, one of the largest natural gas exporters in the world; and Moscow Industrial Bank and its ten subsidiaries.

 

https://www.whitehouse.gov/briefing-room/statements-releases/2022/05/08/fact-sheet-united-states-and-g7-partners-impose-severe-costs-for-putins-war-against-ukraine/

 

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

 

DDTC Name And Address Changes Posted To Website

 

May 4 through 20, 2022: 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 Wartsila ELAC Nautik GmbH to ELAC Sonar GmbH due to Warsila divestiture of ELAC Nautik;
• RUAG International Holding AG subsidiaries will change names as follows due to corporate rebranding:

Old Name	New Name
RUAG Schweiz AG (Space Business Line)	Beyond Gravity Schweiz AG
RUAG Corporate Services AG	Beyond Gravity Services AG
RUAG Slip Rings SA	Beyond Gravity Slip Rings SA
RUAG Sweden AB	Beyond Gravity Holding Sweden AB
RUAG Space AB	Beyond Gravity Sweden AB
RUAG Space GmbH	Beyond Gravity Austria GmbH
RUAG Space Finland OY AB	Beyond Gravity Finland OY
RUAG Space Germany GmbH	Beyond Gravity Germany GmbH
RUAG Schweiz AG (Aerostructures Business Line transferred to RUAG Aerostructures Schweiz AG)	RUAG Aerostructures Schweiz AG (spin-off)

• Change in Name from Hamex Hardmetallverktyg AB to Hamex Precision Tools AB due to corporate rebranding;
• Eaton Corporation entities will change names as follows due to corporate rebranding:

Old Name	New Name
Cobham Mission Systems Wimborne Limited (UK)	Mission Systems Wimborne Limited
Cobham India Private Limited (India)	Mission Systems India Private Limited

• Change in Name from Ylipson GmbH to Ylipson by DERICHEBOURG GmbH due to acquisition by DERICHEBOURG GmbH;
• The following Mitsubishi Electric Corporation subsidiaries changed their names and addresses as a result of a corporate reorganization:

New Name	New Address
Mitsubishi Electric Software Corporation	2-4-1, Hamamatsu-cho, Minato-ku, Tokyo 105- 5129, Japan
Old Name	Old Address
MELCO Power Systems Corporation	1-1-2 Wadasaki-cho, Hyogo-ku, Kobe, Hyogo 652-8555, Japan
Mitsubishi Electric Micro-Computer Application Software Co., Ltd.	2-5-1, Inadera, Amagasaki, Hyogo 661-0981, Japan
Mitsubishi Space Software Co., Ltd.	2-4-1, Hamamatsu-cho, Minato-ku, Tokyo 105- 5129, Japan
Nippon Advanced Technology Co., Ltd.	2-4-1, Hamamatsu-cho, Minato-ku, Tokyo 105- 5129, Japan
Mitsubishi Electric Control Software Corporation	1-1-2, Wadasaki-cho, Hyogo-ku, Kobe, Hyogo 652-8555, Japan
Mitsubishi Electric Mechatronics Software Corporation	5-1-14, Yadaminami, Higashi-ku, Nagoya, Aichi 461-8670, Japan

• Change in Name from Mistequay Group, Ltd to Textron Aviation Inc., due to acquisition by Textron Aviation Inc.

 

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U.S. Department Of State Certifies Countries Not Cooperating With U.S. Antiterrorism Efforts

 

May 2022: 87 Fed. Reg. 31051: Pursuant to section 40A of the Arms Export Control Act (22 U.S.C. 2781), and E.O. 13637, as amended, the U.S. Department of State determined and certified to the Congress that the following countries are not cooperating fully with United States antiterrorism efforts: Iran, Democratic People's Republic of Korea (DPRK, or North Korea), Syria, Venezuela, and Cuba.

 

https://www.federalregister.gov/documents/2022/05/20/2022-10829/determination-and-certification-of-countries-not-cooperating-fully-with-antiterrorism-efforts

 

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U.S. Department Of State Revokes Designation Of Certain Organizations As Foreign Terrorist Organizations

 

May 20, 2022: Based upon a review of the Administrative Record assembled in this matter and in consultation with the Attorney General and the Secretary of the Treasury, Secretary of State Antony Blinken has concluded that the circumstances that were the basis for the designation of the following as a Foreign Terrorist Organization have changed in such a manner as to warrant revocation of the designation:

 

• Aum Shinrikyo (and Other Aliases), 87 Fed. Reg. 31050: https://www.federalregister.gov/documents/2022/05/20/2022-10866/in-the-matter-of-the-designation-of-aum-shinrikyo-and-other-aliases-as-a-foreign-terrorist
• Basque Fatherland and Liberty (and other aliases), 87 Fed. Reg. 31050: https://www.federalregister.gov/documents/2022/05/20/2022-10866/in-the-matter-of-the-designation-of-aum-shinrikyo-and-other-aliases-as-a-foreign-terrorist
• Gama'a al-Islamiyya (and other aliases), 87 Fed. Reg. 31050: https://www.federalregister.gov/documents/2022/05/20/2022-10866/in-the-matter-of-the-designation-of-aum-shinrikyo-and-other-aliases-as-a-foreign-terrorist
• Kahane Chai (and other aliases), 87 Fed. Reg. 31050: https://www.federalregister.gov/documents/2022/05/20/2022-10866/in-the-matter-of-the-designation-of-aum-shinrikyo-and-other-aliases-as-a-foreign-terrorist
• Mujahidin Shura Council in the Environs of Jerusalem (and other aliases), 87 Fed. Reg. 31051: https://www.federalregister.gov/documents/2022/05/20/2022-10826/in-the-matter-of-the-designation-of-mujahidin-shura-council-in-the-environs-of-jerusalem-and-other

 

Secretary Blinken has also revoked the designation of the following as a Specially Designated Global Terrorist under Executive Order 13224 of September 23, 2001: 87 Fed. Reg. 31055:

• Mohad Moalim;
• Farah Mohamed Shirdon;
• Musa Abu Dawud;
• Aliaskhab Kebekov;
• Ibrahim al-Rubaysh; and
• Abu al-Wardah as-Syarqi (and Their Respective Aliases).

 

https://www.federalregister.gov/documents/2022/05/20/2022-10825/revocation-of-the-designations-of-mohad-moalim-farah-mohamed-shirdon-musa-abu-dawud-aliaskhab

 

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

 

The U.S. And Japan Agree To Lead International Efforts To Strengthen Export Controls On Semiconductors And Other Cutting-Edge Technologies

 

May 5, 2022: Japanese Minister of Economy, Trade and Industry Koichi Hagiuda and U.S. Commerce Secretary Gina Raimondo have agreed that the two countries will lead international efforts to strengthen export controls on semiconductors and other cutting-edge technologies. The agreement was reached at their meeting in Washington on May 4, 2022. Japan and the United States will work with other countries and regions that advocate free trade to prevent such advanced technologies from being used for military and other undesirable purposes. The two countries will take the lead in holding in-depth discussions on establishing a responsible export control framework among like-minded countries, Hagiuda told a press conference after the meeting. https://www.nippon.com/en/news/yjj2022050500487/

 

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BIS Outlines Key Changes To Its Administrative Enforcement Policies

 

May 16, 2022: The U.S. Department of Commerce, Bureau of Industry and Security’s (BIS) Assistant Secretary for Export Enforcement, Matthew S. Axelrod, outlined key changes to its administrative enforcement policies for export control violations under the Export Administration Regulations (EAR), as follows:

 

First, BIS’ administrative charging letters are currently not available to the public until after a case resolves. This means that the public is not aware of which companies BIS alleges have violated the EAR  until the matter is completed, often years later. Moreover, it means that companies that may be engaging in similar misconduct aren’t fully disincentivized to stop, given that they are not given real-time examples of what happens when you violate the EAR. Therefore, BIS is considering changing this policy to make charging letters public when filed, just like with the initiation of criminal charges or of administrative proceedings with the SEC.

 

Second, BIS is reconsidering its use of no admit/no deny settlements. In the past, when BIS has resolved administrative enforcement matters short of trial, BIS has allowed companies to pay a reduced penalty without admitting misconduct. While doing so makes it easier to reach such resolutions, no admit/no deny settlements also have two significant downsides. One there’s no statement of facts that the company admits to. Without such an admitted statement of facts, it is more difficult for other companies to learn from their peers’ mistakes and adjust their behavior accordingly. In addition, companies get a significant reduction in a penalty when they resolve with BIS short of trial. That makes sense, as BIS wants to incentivize companies to resolve matters. However, in other enforcement contexts, companies must admit their conduct in order to qualify for the reduced penalty. BIS is concerned that without admitted facts, BIS may not be sending a deterrent message as strong as we believe warranted when the export laws are violated, especially given the magnitude of the national security threats those laws are designed to help combat.

 

Third, BIS is looking at penalty amounts. Penalties must be high enough to both punish and deter those who would violate the law. If penalties are low, it is too easy for companies to do a cost-benefit analysis and conclude that they would rather risk paying a small fine on the back end if they get caught than invest in compliance systems or forego revenue from sales they should be turning down upfront.

 

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/2992-2022-05-16-remarks-as-axelrod-to-sia/file

 

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BIS Seeks Public Comment On Control Of Four Naturally Occurring, Dual-Use Biological Toxins

 

May 23, 2022: 87 Fed. Reg. 31195: The U.S. Department of Commerce, Bureau of Industry and Security (BIS) published an interim final rule requesting public comment on the proposed new unilateral export controls on four naturally occurring, dual-use biological toxins (specifically, the marine toxins brevetoxin, gonyautoxin, nodularin and palytoxin), the synthesis and collection of which BIS has identified for evaluation according to the criteria in Section 1758 of the Export Control Reform Act of 2018 (ECRA) pertaining to emerging and foundational technologies. These toxins have the potential (through either accidental or deliberate release) to cause casualties in humans or animals, degrade equipment, or damage crops or the environment.

 

https://www.govinfo.gov/content/pkg/FR-2022-05-23/pdf/2022-10907.pdf

 

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BIS Finalized Changes To License Exception ACE

 

May 26, 2022: 87 FR 31948: BIS is finalizing changes to License Exception ACE and corresponding changes in the definition section of the Export Administration Regulations (EAR) in response to public comments to an October 21, 2021 interim rule.  That rule established a new control on certain cybersecurity items for National Security (NS) and Anti-terrorism (AT) reasons, as well as added a new License Exception Authorized Cybersecurity Exports (ACE) that authorizes exports of these items to most destinations except in certain circumstances.  These items warrant controls because these tools could be used for surveillance, espionage, or other actions that disrupt, deny or degrade the network or devices on it.  This rule also corrects Export Control Classification Number (ECCN) 5D001 in the Commerce Control List.

 

https://www.bis.doc.gov/index.php/documents/federal-register-notices-1/3000-87-fr-31948-cyber-final-rule-0694-ah56-5-26-22/file

 

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U.S. Customs & Border Patrol

 

CBP Expands Foreign Trade Zone Identifier From 7 to 9 Characters

 

May 11, 2022: 85 Fed. Reg. 60479: The U.S. Customs and Border Protection (CBP) published a Federal Register Notice (85 FR 60479) that requires the expansion of the Foreign Trade Zone Identifier from 7 to 9-characters. As a result, the Automated Export System and the Automated Export System Trade Interface Requirements (AESTIR) have been updated to accommodate this change effective May 17, 2022. The AESDirect web application is updated to accept the new 9-character requirement

 

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U.S.-EU Trade and Technology Council

 

The U.S.-EU To Continue Coordinating Actions To Mitigate The Negative Impacts Of Russia’s Aggression Against Ukraine On The Global And Ukraine Economy

 

The co-chairs of the U.S.-EU Trade and Technology Council (“TTC”), United States Secretary of Commerce Gina Raimondo, United States Trade Representative Katherine Tai, European Commission Executive Vice President Margrethe Vestager, and European Commission Executive Vice President Valdis Dombrovskis, joined by European Commissioner Thierry Breton, held the second meeting of the Trade and Technology Council in Paris-Saclay on 16 May 2022, hosted by the French Presidency of the Council of the European Union, and issued the following Joint Statement on behalf of the United States of America and the European Union:

 

The U.S.-EU partnership is a cornerstone of our shared strength, prosperity, and commitment to freedom, democracy, and respect for human rights. In the past year, we have strengthened, deepened, and elevated our relationship. As recent events have proven, strong transatlantic bonds and cooperation on issues related to trade, technology, and security are more important than ever.

 

The U.S.-EU strongly condemn Russia’s military aggression against Ukraine, as a premeditated and unprovoked further invasion of a sovereign state in violation of international law, which threatens the multilateral rules-based order. The U.S.-EU support the Ukrainian people and their right to choose their own future.

 

The U.S.-EU remain committed to upholding Ukraine’s sovereignty, independence, and territorial integrity. We have cooperated closely to impose significant consequences on Russia for its continued aggression against Ukraine. The foundation that we cemented through the TTC was indispensable for fostering the unprecedented level of cooperation on export controls and sanctions in response to Russia’s further invasion of Ukraine, both between the U.S.-EU and with other allies and partners.

 

The U.S.-EU plan to continue coordinating our actions to mitigate the negative impacts of Russia’s aggression against Ukraine on the global economy, and on Ukraine’s economy in particular. U.S.-EU remain resolute in our efforts to work jointly with Ukraine to rebuild its economy and revive its entrepreneurial vigor, facilitate trade and investment, and address global challenges resulting from Russia’s actions. This includes addressing supply chain ruptures created by Russia’s aggression, with regard to industrial and food commodities. The TTC intends to develop common approaches and explore shared solutions toward improving supply chain resiliency, fostering predictability and trade diversification. 5. U.S.-EU confirm to continue to oppose actors who threaten the multilateral rules-based order and fundamental principles of international law. To protect U.S.-EU citizens, the U.S.-EU will draw upon bilateral trade and investment relations, our joint technology leadership, the transatlantic security partnership, and our shared democratic values. U.S.-EU cooperation and coordination in the TTC is essential to this effort, and we are committed to maintaining the TTC as a central pillar of the U.S.-EU transatlantic partnership.

 

https://www.commerce.gov/sites/default/files/2022-05/US-EU-Joint-Statement-Trade-Technology-Council.pdf

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

 

The U.S. Department of State:

 

May 4, 2022: 87 Fed. Reg. 26385: The Secretary of State has determined that KVT-RUS, has knowingly, on or after July 15, 2020, made an investment, or sold, leased, or provided to the Russian Federation, for the construction of Russian energy export pipelines, goods, services, technology, information, or support, any of which has a fair market value of $1,000,000 or more, or that during a 12 month period, have an aggregate fair market value of $5,000,000 or more. The Secretary of State has additionally determined that KVT-RUS, has knowingly, on or after January 1, 2021, sold, leased, or provided, or facilitated selling, leasing, or providing, a vessel that engaged in pipe-laying or pipe-laying activities at depths of 100 feet or more below sea level for the construction of the Nord Stream 2 pipeline project.

Pursuant to sections 232(a)(1) and 235 of Countering America's Adversaries Through Sanctions Act (CAATSA) and E.O. 13849, the Secretary of State has selected the following sanctions to be imposed upon KVT-RUS:

• Order the United States Government not to issue any specific license and not to grant any other specific permission or authority to export any goods or technology to KVT-RUS (section 235(a)(2));
• Prohibit any transactions in foreign exchange that are subject to the jurisdiction of the United States and in which KVT-RUS has any interest (section 235(a)(7));
• Prohibit any transfers of credit or payments between financial institutions or by, through, or to any financial institution, to the extent that such transfers or payments are subject to the jurisdiction of the United States and involve any interest of KVT-RUS (section 235(a)(8));
• Prohibit any person from acquiring, holding, withholding, using, transferring, withdrawing, transporting, importing, or exporting any property that is subject to the jurisdiction of the United States and with respect to which KVT-RUS has any interest (section 235(a)(9)(A); dealing in or exercising any right, power, or privilege with respect to such property (section 235(a)(9)(B)); or conducting any transaction involving such property (section 235(a)(9)(C));
• Prohibit any United States person from investing in or purchasing significant amounts of equity or debt instruments of KVT-RUS (section 235(a)(10);
• Block all property and interests in property of KVT-RUS that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person and provide that such property and interests in property may not be transferred, paid, exported, withdrawn, or otherwise dealt in (E.O. 13849 Section 1(a)(iv)).

 

Pursuant to Section 7503(c) of Protecting Europe's Energy Security Act (PEESA), as amended (“PEESA”) as amended, Sections 232(a)(1) and 235 of CAATSA, and E.O. 13849, KVT-RUS has been added to the Specially Designated Nationals and Blocked Persons List.

All property and interests in property of KVT-RUS subject to U.S. jurisdiction are blocked.

 

https://www.federalregister.gov/documents/2022/05/04/2022-09564/notice-of-department-of-state-sanctions-actions-pursuant-to-the-countering-americas-adversaries

 

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May 4, 2022: 87 Fed Reg 26386: The Secretary of State has determined, pursuant to Section 7503(a)(1)(B)(i) of PEESA, as amended, that Transadria Ltd has knowingly, on or after January 1, 2021, sold, leased, or provided, or facilitated selling, leasing, or providing, a vessel that engaged in pipe-laying or pipe-laying activities at depths of 100 feet or more below sea level for the construction of the Nord Stream 2 pipeline project.

 

Pursuant to E.O. 13049 and Section 7503(c) of PEESA, as amended, this entity has been added to the Specially Designated Nationals and Blocked Persons List. All property and interest in property of this entity subject to U.S. jurisdiction is blocked. The following vessel subject to U.S. jurisdiction is blocked:

 

• Marlin (IMO 9396854) (Linked To: Transadria Ltd).

 

https://www.federalregister.gov/documents/2022/05/04/2022-09566/notice-of-department-of-state-sanctions-actions-pursuant-to-the-protecting-europes-energy-security

 

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May 4, 2022: 87 Fed Reg 26387: The Secretary of State has determined, pursuant to Section 7503(a)(1)(B)(i) of PEESA, as amended, that Joint Stock Company Nobility has knowingly, on or after January 1, 2021, sold, leased, or provided, or facilitated selling, leasing, or providing, a vessel that engaged in pipe-laying or pipe-laying activities at depths of 100 feet or more below sea level for the construction of the Nord Stream 2 pipeline project.

 

The Secretary of State has also determined, pursuant to Section 7503(a)(1)(B)(iii) of PEESA, as amended, that Konstanta, OOO has knowingly, on or after January 1, 2021, provided underwriting services or insurance or reinsurance to a vessel identified in section 7503(a)(1)(A).

 

Pursuant to E.O. 13049 and Section 7503(c) of PEESA, as amended, these entities have been added to the Specially Designated Nationals and Blocked Persons List. All property and interests in property of these entities subject to U.S. jurisdiction are blocked. The following vessels subject to U.S. jurisdiction are blocked:

 

• Ostap Sheremeta (IMO 9624225) (Linked To: Joint Stock Company Nobility); and
• Ivan Sidorenko (IMO 9624213) (Linked To: Joint Stock Company Nobility).

 

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May 25, 2022: The U.S. Department of State has taken the following sanctions actions against various Russian individuals and entities:

 

87 Fed. Reg. 31925:

 

• Arkady Romanovich Rotenberg of Russia;
• Dmitriy Sergeevich Peskov;
• Sergei Chemezov;
• Igor Ivanovich Shuvalov;
• Boris Romanovich Rotenberg;
• Yekaterina Sergeyevna Ignatova;
• Stanislav Sergeyevich Chemezov;
• Alexander Sergeevich Chemezov;
• Sergey Sergeevich Chemezov;
• Anastasia Mikhailovna Ignatova;
• Igor Arkadyevich Rotenberg;
• Liliya Arkadievna Rotenberg;
• Pavel Arkadyevich Rotenberg;
• Boris Borisovich Rotenberg;
• Roman Borisovich Rotenberg;
• Karina Yurevna Rotenberg;
• Olga Viktorovna Shuvalova;
• Evgeny Igorevich Shuvalov;
• Maria Igorevna Shuvalova;
• Otkrytye Aktivy OOO;
• Sova Nedvizhimost OOO;
• Avanfort OOO;
• Firma Veardon OOO;
• Zareche-4 OOO; and
• Limited Liability Company Nemchinovo Investments, and Altitude X3 Ltd.

 

The following aircraft subject to U.S. jurisdiction is blocked:

• LX-MOW (Linked To: Altitude X3 Ltd).

 

Pursuant to E.O. 14024 these entities and individuals have been added to the Specially Designated Nationals and Blocked Persons List. All property and interests in property of these entities subject to U.S. jurisdiction are blocked.

 

https://www.federalregister.gov/documents/2022/05/25/2022-11179/notice-of-department-of-state-sanctions-actions

 

87 Fed. Reg. 31927:

 

• AO ABR Management;
• Elena Aleksandrovna Georgieva;
• Valentinovich Belous;
• Andrey Yurievich Sapelin, Dmitri Nikolaevich Vavulin;
• Yuri Valentinovich Kovalchuk;
• Kirill Mikhailovich Kovalchuk;
• Dmitri Alekseevich Lebedev;
• Vladimir Nikolaevich Knyaginin;
• Tatyana Aleksandrovna Kovalchuk;
• Boris Yurievich Kovalchuk;
• Stepan Kirillovich Kovalchuk; and
• Kira Valentinovna Kovalchuk.

 

Pursuant to E.O. 14024 these entities and individuals have been added to the Specially Designated Nationals and Blocked Persons List. All property and interests in property of these entities subject to U.S. jurisdiction are blocked.

 

https://www.federalregister.gov/documents/2022/05/25/2022-11181/notice-of-department-of-state-sanctions-actions

 

87 Fed. Reg. 31923:

 

• Kseniya Valentinovna Yudayeva;
• Mikhail Yurevich Alekseev;
• Anatoly Mikhailovich Karachinskiy;
• Vladimir Vladimirovich Kolychev;
• Alexey Yurevich Simanovskiy;
• Andrey Fedorovich Golikov;
• Elena Borisovna Titova;
• Mikhail Mikhaylovich Zadornov;
• Dmitriy Olegovich Levin;
• Svetlana Petrovna Emelyanova;
• Tatyana Gennadevna Nesterenko;
• Irina Vladimirovna Kremleva;
• Viktor Andreevich Nikolaev;
• Sergey Georgievich Rusanov;
• Nadia Narimanovna Cherkasova; and
• Paul Andrew Goldfinch.

 

Pursuant to E.O. 14024 these entities and individuals have been added to the Specially Designated Nationals and Blocked Persons List. All property and interests in property of these entities subject to U.S. jurisdiction are blocked.

 

https://www.federalregister.gov/documents/2022/05/25/2022-11183/notice-of-department-of-state-sanctions-actions

 

87 Fed. Reg. 31926:

 

• OOO Volga Group;
• Gennady Nikolayevich Timchenko;
• Ksenia Gennadevna Frank;
• Dmitry Vladimirovich Gusev;
• Mikhail Lvovich Kuchment;
• Anatoly Alexandrovich Braverman;
• Ilya Borisovich Brodskiy;
• Aleksey Leonidovich Fisun;
• Dmitry Vladimirovich Khotimskiy;
• Sergey Vladimirovich Khotimskiy;
• Mikhail Vasilyevich Klyukin;
• Mikhail Olegovich Avtukhov;
• Albert Alexandrovich Boris;
• Dmitry Vladimirovich Baryshnikov;
• Elena Alexandrovna Cherstvova;
• Sergey Nikolaevich Bondarovich;
• Oleg Alexandrovich Mashtalyar;
• Alexey Valeryevich Panferov;
• Irina Nikolayevna Kashina;
• Joel Raymond Lautier;
• Gleb Sergeevich Frank;
• Elena Petrovna Timchenko;
• Natalya Browning; and
• OOO Transoil.

 

Pursuant to E.O. 14024 these entities and individuals have been added to the Specially Designated Nationals and Blocked Persons List. All property and interests in property of these entities subject to U.S. jurisdiction are blocked.

 

The following vessel subject to U.S. jurisdiction is blocked:

• Lena (IMO: 9594339).

 

https://www.federalregister.gov/documents/2022/05/25/2022-11185/notice-of-department-of-state-sanctions-actions

 

87 Fed. Reg. 31929:

 

• The Federal State Budgetary Institution Marine Rescue Service (MRS), Limited Liability Company.
• Mortransservice (Mortransservice); and
• Samara Heat and Energy Property Fund LLC Koksokhimtrans.

 

These entities were added to the Specially Designated Nationals and Blocked Persons List (SDN List). All property and interests in property of these entities subject to U.S. jurisdiction are blocked.

 

The following vessels subject to U.S. jurisdiction and were added to the NS-MBS list on May 21, 2021. On August 20, 2021, these vessels were added to the Specially Designated Nationals and Blocked Persons List:

 

• Akademik Cherskiy (IMO 8770261);
• Baltiyskiy Issledovatel (IMO 9572020);
• Umka (IMO 9171620);
• Artemis Offshore (IMO 9747194);
• Finval (IMO 9272412);
• Narval (IMO 9171876);
• Sivuch (IMO 9157820);
• Kapitan Beklemishev (IMO 8724080);
• Spasatel Karev (IMO 9497531);
• Bakhtemir (IMO 9797577);
• Murman (IMO 9682423);
• Vladislav Strizhov (IMO 9310018); and
• Yury Topchev (IMO 9338230).

 

https://www.federalregister.gov/documents/2022/05/25/2022-11180/notice-of-department-of-state-sanctions-actions-pursuant-to-the-protecting-europes-energy-security

 

87 Fed. Reg. 31923:

 

The Secretary of State has terminated the waiver of sanctions under the Protecting Europe's Energy Security Act (PEESA), as amended and imposed sanctions on one entity and one individual pursuant to PEESA against the following entities:

 

NORD STREAM 2 AG of Switzerland; and

Matthias Warnig of Germany, Switzerland and Russia.

 

https://www.federalregister.gov/documents/2022/05/25/2022-11186/notice-of-department-of-state-sanctions-actions-pursuant-to-the-protecting-europes-energy-security

 

 

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

 

May 9, 2022: 87 Fed. Reg. 28758: In response to the Russian Federation’s (Russia’s) ongoing aggression against Ukraine, the Department of Commerce is expanding the existing sanctions against Russian industry sectors by imposing a license requirement for exports, reexports, or transfers (in-country) to and within Russia for additional items subject to the Export Administration Regulations (EAR) identified under specific Schedule B numbers or Harmonized Tariff Schedule (HTS) codes. The Bureau of Industry and Security (BIS) is taking these actions to further restrict Russia’s ability to withstand the economic impact of the multilateral sanctions, further limit sources of revenue that could support Russia’s military capabilities, and to better align with the European Union’s controls. This final rule imposes a license requirement for EAR99 products for a variety of industries that fall under the listed  Schedule B or HTS codes and luxury goods, beer, wine, alcohol, tobacco, clothing and vehicles. Exporters be aware!

 

Expansion of Russian Industry Sector Sanctions: This final rule amends part 746 of the EAR (Embargoes and Other Special Controls) to further expand the scope of the Russian industry sector sanctions by adding additional HTS codes and Schedule B numbers to supplement no. 4 to part 746 of the EAR, thereby imposing a license requirement for all exports, reexports, and transfers (in-country) to or within Russia for such items. In this final rule, BIS is adding 205 HTS codes at the 6-digit level and 478 corresponding 10-digit Schedule B numbers to better align with the European Union’s controls.

 

In addition, this final rule adds one sentence at the end of the introductory text of supplement no. 5 to part 746— ‘Luxury Goods’ That Require a License For Export, Reexport, and Transfer (in-country) to or Within Russia or Belarus Pursuant to § 746.10(a)(1) and (2).

 

This final rule adds Schedule B number 8705200000 to the introductory text to indicate it is also listed in both supplements no. 2 and 4 and adds a sentence to indicate that Schedule B number 8412294000 is listed in both supplements no. 4 and 5 to this part.

 

The final rule also clarifies that in addition to Schedule B number 8479899850, Schedule B number 8705200000 is also listed in both supplements no. 2 and 4 and that exporters, reexporters, and transferors must comply with the license requirements under both § 746.5(a)(1)(i) and (ii), as applicable, for these Schedule B numbers.

 

Clarifications to Supplement No. 4 to Part 746 Controls: This final rule revises supplement no. 4 to part 746 by re-organizing the list of items subject to a license requirement under § 746.5(a)(1)(ii) in order to make it easier for exporters to determine whether a particular item is described in this supplement.

 

See the following link for the full rule and list of Schedule B numbers or Harmonized Tariff Schedule codes associated with the rule:

 

https://www.bis.doc.gov/index.php/documents/federal-register-notices-1/2991-87-fr-28758-expansion-of-russian-industry-sector-sanctions-2022-10099/file

 

Editors note: Before making any export of EAR99 items to Belarus or Russia, exporters are reminded of the significant due diligence required to ensure no license is required from BIS.

 

*******

 

May 13, 2022: The Department of Commerce, Bureau of Industry and Security (BIS) extended a temporary denial order denying export privileges for a period of a 180 days on the ground that issuance of the order was necessary in the public interest to prevent an imminent violation of the Regulations for  Mahan Airways, Blue Airways, of Yerevan, Armenia,  as well as the “Balli Group Respondents,” namely, Balli Group PLC, Balli Aviation, Balli Holdings, Vahid Alaghband, Hassan Alaghband, Blue Sky One Ltd., Blue Sky Two Ltd., Blue Sky Three Ltd., Blue Sky Four Ltd., Blue Sky Five Ltd., and Blue Sky Six Ltd., all of the United Kingdom.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1369-e2721/file

 

*******

 

May 20, 2022: The U.S. Department of Commerce, Bureau of Industry and Security’s (BIS) Assistant Secretary for Export Enforcement, Matthew S. Axelrod, issued an order denying the export privileges of a fifth Russian airline – Rossiya Airlines – due to ongoing export violations related to comprehensive export controls on Russia imposed by the Commerce Department. This Temporary Denial Order (TDO) terminates the right of Rossiya to participate in transactions subject to the Export Administration Regulations (EAR), including exports and reexports from the United States. This TDO is issued for 180-days and may be renewed.

 

BIS also publicly identified additional aircraft in likely violation of U.S. export controls, including a 787 Dreamliner owned by Russian oligarch Roman Abramovich. This is the second plane owned by Abramovich identified by BIS, and this listing notifies the public that providing any form or service to this aircraft subject to the EAR requires U.S. Government authorization. BIS is further updating the tail numbers of planes already on the list that have flown into Russia and/or Belarus in apparent violation of the EAR.

 

For a full listing of the subject aircraft see the following link:

 

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/2994-2022-05-20-press-release-bis-rossiya-tdo-and-list-update-final/file

 

*******

 

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

 

May 2, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 30, "Authorizing Transactions Involving Gazprom Germania GmbH Prohibited by Directive 3 under Executive Order 14024."

 

General License 30: All transactions involving Gazprom Germania GmbH, or any entity in which Gazprom Germania GmbH owns, directly or indirectly, a 50 percent or greater interest, that are prohibited by Directive 3 under Executive Order 14024, Prohibitions Related to New Debt and Equity of Certain Russia-related Entities, are authorized through 12:01 a.m. eastern daylight time, September 30, 2022. 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. https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220502 and https://home.treasury.gov/system/files/126/russia_gl30_0.pdf

 

*******

 

May 5, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 7A, General License 26A, General License 31, and General License 32.  In addition, OFAC has published one new Frequently Asked Question and amended one Frequently Asked Question.

 

General License 7A: All transactions ordinarily incident and necessary to the receipt of, and payment of charges for, services rendered in connection with overflights of the Russian Federation or emergency landings in the Russian Federation by aircraft registered in the United States or owned or controlled by, or chartered to, U.S. persons that are prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized. All transactions ordinarily incident and necessary to provide air ambulance and related medical services, including medical evacuation, to individuals in the Russian Federation that are prohibited by the RuHSR are authorized.

 

This general license does not authorize:

(1) The opening or maintaining of a correspondent account or payable-through account for or on behalf of any entity subject to Directive 2 under Executive Order 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions; or

(2) Any debit to an account on the books of a U.S. financial institution of the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation.

 

Effective May 5, 2022, General License No. 7, dated February 24, 2022, is replaced and superseded in its entirety by this General License No. 7A. https://home.treasury.gov/system/files/126/russia_gl7a.pdf

 

General License 26A: All transactions ordinarily incident and necessary to the wind-down of transactions involving Joint Stock Company SB Sberbank Kazakhstan, Sberbank Europe AG, or Sberbank (Switzerland) AG (collectively, “the blocked Sberbank subsidiaries”), or any entity in which the blocked Sberbank subsidiaries own, directly or indirectly, a 50 percent or greater interest, that are prohibited by Executive Order (E.O.) 14024 are authorized through 12:01 a.m. eastern daylight time, July 12, 2022.

 

This general license does not authorize:

(1) 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;

(2) 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

(3) 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 other than the blocked persons described in this general license, unless separately authorized.

 

Effective May 5, 2022, General License No. 26, dated April 12, 2022, is replaced and superseded in its entirety by this General License No. 26A. https://home.treasury.gov/system/files/126/russia_gl26a.pdf

 

General License 31: The following transactions in connection with a patent, trademark, copyright, or other forms of intellectual property protection in the United States or the Russian Federation that would be prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized:

(1) The filing and prosecution of any application to obtain a patent, trademark, copyright, or other forms of intellectual property protection;

(2) The receipt of a patent, trademark, copyright, or other forms of intellectual property protection;

(3) The renewal or maintenance of a patent, trademark, copyright, or other forms of intellectual property protection; and

(4) The filing and prosecution of any opposition or infringement proceeding with respect to a patent, trademark, copyright, or other forms of intellectual property protection, or the entrance of defense to any such proceeding.

 

This general license does not authorize:

(1) The opening or maintaining of a correspondent account or payable-through account for or on behalf of foreign financial institutions determined to be subject to the prohibitions of Directive 2 under Executive Order (E.O.) 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions;

(2) Any debit to an account on the books of a U.S. financial institution of the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation; or

(3) Any transactions prohibited by E.O. 14066 or E.O. 14068. https://home.treasury.gov/system/files/126/russia_gl31.pdf

 

General License 32: All transactions ordinarily incident and necessary to the wind-down of transactions involving Amsterdam Trade Bank NV, or any entity in which Amsterdam Trade Bank NV owns, directly or indirectly, a 50 percent or greater interest, that is prohibited by Executive Order (E.O.) 14024 are authorized through 12:01 a.m. eastern daylight time, July 12, 2022.

 

This general license does not authorize:

(1) 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;

(2) 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

(3) 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 other than the blocked persons described in this general license, unless separately authorized. https://home.treasury.gov/system/files/126/russia_gl32.pdf

 

New Frequently Asked Question:

 

Question: On April 20, 2022, Transkapitalbank (TKB) was designated pursuant to Russia-related Executive Order 14024.  Can U.S. persons continue to engage in Afghanistan-related transactions with TKB?

Answer:  Yes.  The Office of Foreign Assets Control (OFAC) issued two general licenses (GLs) related to TKB, which allow U.S. persons to engage in certain transactions involving TKB for specified time periods.

 

Russia-related GL 28 authorizes U.S. persons to engage in certain transactions involving TKB, or any entity in which TKB owns, directly or indirectly, a 50 percent or greater interest, that is ultimately destined for or originating from Afghanistan through 12:01 a.m. eastern daylight time, October 20, 2022.

GL 28 also authorizes U.S. financial institutions to operate correspondent accounts on behalf of TKB, or any entity in which TKB owns, directly or indirectly, a 50 percent or greater interest, provided such accounts are used solely to effect transactions ultimately destined for or originating from Afghanistan that are authorized by the GL. This means that U.S. financial institutions are authorized to debit or credit correspondent accounts maintained for TKB, provided these debits or credits are for payments that are ultimately destined for or originating from Afghanistan.

 

In addition, through 12:01 a.m. eastern daylight time, May 20, 2022, Russia-related GL 29 authorizes certain transactions ordinarily incident and necessary to the wind-down of transactions involving TKB, or any entity in which TKB owns, directly or indirectly, a 50 percent or greater interest, regardless of whether such transactions are related to Afghanistan.  GL 29 does not authorize debits to blocked accounts.  https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1032

 

Revised Frequently Asked Question:

 

Question:  Does Executive Order (E.O.) 14065 block the entire Donetsk and Luhansk oblasts?

 

Answer: No.  E.O. 14065 targets the so-called Donetsk People’s Republic and Luhansk People’s Republic regions of Ukraine or such other regions of Ukraine as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State (collectively, the “Covered Regions”).  In determining whether a location is within the regions subject to sanctions, U.S. persons may reasonably rely on vetted information from reliable third parties, such as postal codes and maps.

U.S. persons engaging in activity that does not involve the Covered Regions are not subject to the prohibitions in E.O. 14065. https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1009

 

*******

 

May 6, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned virtual currency mixer Blender.io (Blender), which is used by the Democratic People’s Republic of Korea (DPRK) to support its malicious cyber activities and money-laundering of stolen virtual currency. On March 23, 2022, Lazarus Group, a DPRK state-sponsored cyber hacking group, carried out the largest virtual currency heist to date, worth almost $620 million, from a blockchain project linked to the online game Axie Infinity; Blender was used in processing over $20.5 million of the illicit proceeds. Under the pressure of robust U.S. and UN sanctions, the DPRK has resorted to illicit activities, including cyber-enabled heists from cryptocurrency exchanges and financial institutions, to generate revenue for its unlawful weapons of mass destruction (WMD) and ballistic missile programs.

OFAC updated its List of Specially Designated Nationals and Blocked Persons (SDN List) to identify additional virtual currency addresses used by the Lazarus Group to launder illicit proceeds.  Treasury is committed to exposing components of the virtual currency ecosystem, like Blender, that are critical to the obfuscation of the trail of stolen proceeds from illicit cyber activity. OFAC sanctioned the Lazarus Group on September 13, 2019, pursuant to Executive Order (E.O.) 13722, and identified it as an agency, instrumentality, or controlled entity of the Government of the DPRK, based on its relationship to the U.S.- and UN-designated Reconnaissance General Bureau, the DPRK’s premiere intelligence organization, which is also involved in the conventional arms trade. https://home.treasury.gov/news/press-releases/jy0768

 

See the following link for the list of virtual currency addresses used by the Lazarus Group to launder illicit proceeds: https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220506

 

*******

 

May 8, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated individuals and entities critical to Russia’s ability to wage war against Ukraine. These include the board members of two of Russia’s most important banks, a Russian state-owned bank and 10 of its subsidiaries, a state-supported weapons manufacturer, and three of Russia’s state-controlled television stations that generate revenue for the state. OFAC took this action to cut off access to services that are used by the Russian Federation and Russian elites to evade sanctions. OFAC identified accounting, trust and corporate formation, and management consulting as categories of services that are subject to a prohibition on the export, reexport, sale, or supply, directly or indirectly, from the United States, or by a U.S. person, wherever located, to any person located in the Russian Federation, pursuant to Executive Order (E.O.) 14071. OFAC has further determined that these same services sectors of the Russian Federation economy are subject to sanctions pursuant to E.O. 14024. Wealthy Russians have relied on U.S. expertise to set up shell companies, move wealth and resources to alternate jurisdictions, and conceal assets from authorities around the world. In addition, Russian companies, particularly state-owned and state-supported enterprises, rely on these services to run and grow their businesses, generating revenue for the Russian economy that helps fund Putin’s war machine. https://home.treasury.gov/news/press-releases/jy0771

 

OFAC also issued Russia-related General License 25A, General License 33, General License 34, and General License 35.  OFAC has published a Determination Pursuant to Section 1(a)(i) of Executive Order 14024 and a Determination Pursuant To Section 1(a)(ii) Of Executive Order 14071 as well as new Frequently Asked Questions.

 

General License 25A: All transactions ordinarily incident and necessary to the receipt or transmission of telecommunications involving the Russian Federation that are prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized. Except as provided in this general license, the exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, wherever located, to the Russian Federation of services, software, hardware, or technology incident to the exchange of communications over the internet, such as instant messaging, videoconferencing, chat and email, social networking, sharing of photos, movies, and documents, web browsing, blogging, web hosting, and domain name registration services, that is prohibited by the RuHSR, is authorized. https://home.treasury.gov/system/files/126/russia_gl25a.pdf

 

General License 33: All transactions ordinarily incident and necessary to the wind-down of operations, contracts, or other agreements involving one or more of the following blocked persons that were in effect prior to May 8, 2022, and that are prohibited by Executive Order (E.O.) 14024, are authorized through 12:01 a.m. eastern daylight time, June 7, 2022, provided that any payment to a blocked person must be made into a blocked account located in the United States in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR):

(1) Joint Stock Company Channel One Russia;

(2) Joint Stock Company NTV Broadcasting Company;

(3) Television Station Russia-1; 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. https://home.treasury.gov/system/files/126/russia_gl33.pdf

 

General License 34: All transactions ordinarily incident and necessary to the wind-down of the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of accounting, trust and corporate formation, or management consulting services to any person located in the Russian Federation that is prohibited by section 1(a)(ii) of Executive Order 14071 are authorized through 12:01 a.m. eastern daylight time, July 7, 2022. 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. https://home.treasury.gov/system/files/126/russia_gl34.pdf

 

General License 35: All transactions ordinarily incident and necessary to the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of credit rating or auditing services to any person located in the Russian Federation that are prohibited by section 1(a)(ii) of Executive Order 14071 are authorized through 12:01 a.m. eastern daylight time, August 20, 2022. 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. https://home.treasury.gov/system/files/126/russia_gl35.pdf

 

Determination Pursuant to Section 1(a)(i) of Executive Order 14024: 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, OFAC determined that section 1(a)(i) shall apply to the accounting, trust and corporate formation services, and management consulting sectors of the Russian Federation economy. Any person that the Secretary of the Treasury or the Secretary of the Treasury’s designee, in consultation with the Secretary of State or the Secretary of State’s designee, or the Secretary of State or the Secretary of State’s designee, in consultation with the Secretary of the Treasury or the Secretary of the Treasury’s designee, subsequently determines operates or has operated in such sectors shall be subject to sanctions pursuant to section 1(a)(i). https://home.treasury.gov/system/files/126/determination_05082022_eo14024.pdf

 

Determination Pursuant To Section 1(a)(ii) Of Executive Order 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, the Director of the Office of Foreign Assets Control, in consultation with the Department of State, hereby determines that the prohibitions in section 1(a)(ii) of E.O. 14071 shall apply to the following categories of services: accounting, trust and corporate formation, and management consulting. 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 accounting, trust and corporate formation, or management consulting 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;

(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 7, 2022. https://home.treasury.gov/system/files/126/determination_05082022_eo14071.pdf

 

New Frequently Asked Questions: See the following link for the eight (8) new Frequently Asked Questions and Answers: https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-05-08

 

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

 

• Alymova, Natalya Andreevna of Russia;
• Belous, Aleksei Petrovich of Russia;
• Borisenko, Elena Adolfovna of Russia;
• Buriko, Alexandra Yurevna of Russia;
• Dmitriev, Vladimir Aleksandrovich of Russia;
• Gavrilenko, Anatolii Anatolyevich of Russia;
• Gazaryan, Yuriy Garunovich of Russia;
• Golodets, Olga Yuryevna of Russia;
• Kamyshev, Denis Valentinovich of Russia, United Kingdom and South Africa;
• Kaplunnik, Irina Aleksandrovna of Russia and Bulgaria;
• Khachaturov, Tigran Garikovich of Russia and Armenia;
• Komanov, Viktor Alekseevich of Russia;
• Kuznetsov, Stanislav Konstantinovich of Russia and Germany;
• Maltsev, Sergey Aleksandrovich of Russia;
• Matveev, Aleksei Anatolievich of Russia;
• Muranov, Aleksander Yurievich of Russia And Armenia;
• Popov, Anatoliy Leonidovich of Russia;
• Popovich, Aleksei Valerievich of Russia;
• Puzyrnikova, Natalya Vladislavovna of Russia;
• Rosseev, Mikhail Nikolaevich of Russia;
• Rusanov, Igor Valerievich of Russia;
• Ryskin, Vladimir Markovich of Russia;
• Sadygov, Famil Kamil Ogly of Russia;
• Sereda, Mikhail Leonidovich of Russia;
• Shamalov, Yurii Nikolaevich of Russia;
• Sobol, Alexander Ivanovich of Russia;
• Stepanov, Aleksandr Mikhailovich of Russia;
• Tsarev, Kirill Aleksandrovich of Russia;
• Tyurin, Vyacheslav Aleksandrovich of Russia;
• Vinokurov, Vladimir Nikolaevich of Russia;
• Yeliseyev, Ilya Vladimirovich of Russia;
• Zauers, Dmitrii Vladimirovich of Russia; and
• Zlatkis, Bella Ilyinichna of Russia.

 

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

 

• Agropromyshlenny Kompleks Voronezhski OOO of Russia;
• Anninskii Elevator OOO of Russia;
• Auditkonsalt OOO of Russia;
• Azovskaya Zernovaya Kompaniya OOO of Russia;
• Belinveststroi OOO of Russia;
• Dve Stolitsy OOO of Russia;
• Ekspluatiruyushchaya Kompaniya Tsentr OOO of Russia;
• Joint Stock Company Channel One Russia of Russia;
• Joint Stock Company Moscow Industrial Bank of Russia;
• Joint Stock Company Northern Shipping Company of Russia;
• Joint Stock Company NTV Broadcasting Company of Russia;
• Kontrakt OOO of Russia;
• Ladoga OOO of Russia;
• Limited Liability Company Promtekhnologiya of Russia;
• M Leasing LLC of Russia;
• Marine Trans Shipping LLC of Russia;
• Nekommercheskaya Organizatsiya Fond Khimicheskoe Razoruzhenie I Konversiya of Russia;
• Nord Project LLC Transport Company of Russia;
• Obshchestvo S Ogranichennoi Otvetstvennostyu Fertoing of Russia;
• SC South LLC of Russia;
• Television Station Russia-1 of Russia; and
• Transmorflot LLC of Russia.

 

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

 

• Adler Roll-on Roll-off 8,811GRT Russia flag; Vessel Registration Identification IMO 9179854;
• Ambal Roll-on Roll-off 20,729GRT Russia flag; Vessel Registration Identification IMO 8807416;
• Anastasiia General Cargo 9,611GRT Russia flag; Vessel Registration Identification IMO 9349291;
• Angara Roll-on Roll-off 8,811GRT Russia flag; Vessel Registration Identification IMO 9179842;
• Ascalon Roll-on Roll-off 8,821GRT Russia flag; Vessel Registration Identification IMO 9198226;
• Askar-Sarydzha General Cargo 4,991GRT Russia flag; Vessel Registration Identification IMO 9082142;
• Belomorskiy Dredger 2,628GRT Russia flag; Vessel Registration Identification IMO 8305781;
• Chizhovka Hopper Barge 745GRT Russia flag; Vessel Registration Identification IMO  8730455;
• Dvinskiy Zaliv Dredger 2,081GRT Russia flag; Vessel Registration Identification IMO 8922486;
• Enisey Bulk Carrier 27,078GRT Russia flag; Vessel Registration Identification IMO 9079169;
• Etim Emin General Cargo 1,853GRT Russia flag; Vessel Registration Identification IMO 8700010;
• Gasret Aliev General Cargo 4,991GRT Russia flag; Vessel Registration Identification IMO 9083330;
• Genrikh Gasanov General Cargo 4,991GRT Russia flag; Vessel Registration Identification IMO 9083196;
• Inzhener Trubin General Cargo 6,418GRT Russia flag; Vessel Registration Identification IMO 8502080;
• Inzhener Veshnyakov General Cargo 6,418GRT Russia flag; Vessel Registration Identification IMO 8502107;
• Iohann Mahmastal General Cargo 6,395GRT Russia flag; Vessel Registration Identification IMO 8603406;
• Kapitan Kokovin General Cargo 2,474GRT Russia flag; Vessel Registration Identification IMO 9279422;
• Kapitan Ryntsyn General Cargo 2,601GRT Russia flag; Vessel Registration Identification IMO 8618073;
• Kapitan Sakharov General Cargo 2,474GRT Russia flag; Vessel Registration Identification IMO 9279434;
• Kholmogory General Cargo 2,986GRT Russia flag; Vessel Registration Identification IMO 9109081;
• Kompozitor Gasanov Roll-on Roll-off 6,894GRT Russia flag; Vessel Registration Identification IMO 8606628;
• Lady D General Cargo 9,611GRT Russia flag; Vessel Registration Identification IMO 9349289;
• Lady Mariia Roll-on Roll-off 8,831GRT Russia flag; Vessel Registration Identification IMO 9220641;
• Lady R Roll-on Roll-off 7,260GRT Russia flag; Vessel Registration Identification IMO 9161003;
• Lapominka Hopper Barge 643GRT Russia flag; Vessel Registration Identification IMO 8928143;
• Maia-1 General Cargo 9,611GRT Russia flag; Vessel Registration Identification IMO 9358010;
• Maria E (a.k.a. "MARIA") Roll-on Roll-off 3,069GRT Togo flag; Other Vessel Type Passenger; Vessel Registration Identification IMO 9617923;
• Mekhanik Brilin General Cargo 2,489GRT Russia flag; Vessel Registration Identification IMO  8904408;
• Mekhanik Kottsov General Cargo 2,489GRT Russia flag; Vessel Registration Identification IMO 8904410;
• Mekhanik Kraskovskiy General Cargo 2,489GRT Russia flag; Vessel Registration Identification IMO 8904458;
• Mekhanik Makarin General Cargo 3,178GRT Russia flag; Vessel Registration Identification IMO 8904379;
• Mekhanik Pustoshnyy General Cargo 2,489GRT Russia flag; Vessel Registration Identification IMO 8904422;
• Mekhanik Pyatlin General Cargo 2,489GRT Russia flag; Vessel Registration Identification IMO 8904434;
• Mekhanik Yartsev General Cargo 2,489GRT Russia flag; Vessel Registration Identification IMO 8904367;
• Mikhail Lomonosov General Cargo 2,990GRT Russia flag; Vessel Registration Identification IMO 9216482;
• NP Dikson Chemical/Oil Tanker 15,980GRT Russia flag; Vessel Registration Identification IMO 9255270;
• NP Dudinka Chemical/Oil Tanker 14,400GRT Russia flag; Vessel Registration Identification IMO 9183831;
• Olga General Cargo 1,853GRT Russia flag; Vessel Registration Identification IMO 8700046;
• Pizhma General Cargo 3,466GRT Russia flag; Vessel Registration Identification IMO 8814354;
• POLAR Rock Crude Oil Tanker 56,924GRT Russia flag; Vessel Registration Identification IMO 9116632;
• Port Olya-1 General Cargo 4,878GRT Russia flag; Vessel Registration Identification IMO 9481922;
• Port Olya-2 General Cargo 4,878GRT Russia flag; Vessel Registration Identification IMO 9481881;
• Rasul Gamzatov General Cargo 4,991GRT Russia flag; Vessel Registration Identification IMO 8861058;
• RZK Constanta General Cargo 7,095GRT Russia flag; Vessel Registration Identification IMO 8711289;
• Kuznetsov General Cargo 6,204GRT Russia flag; Vessel Registration Identification IMO 9210359;
• Sabetta General Cargo 12,936GRT Russia flag; Vessel Registration Identification IMO 9347061;
• Severniy Proect General Cargo 13,066GRT Russia flag; Vessel Registration Identification IMO 9202053;
• Siberia Bulk Carrier 17,665GRT Russia flag; Vessel Registration Identification IMO 9239458;
• SIYANIE Severa General Cargo 6,577GRT Russia flag; Vessel Registration Identification IMO 9250385;
• SMP Arkhangelsk General Cargo 7,752GRT Russia flag; Vessel Registration Identification IMO 9240550;
• SMP Novodvinsk General Cargo 4,106GRT Russia flag; Vessel Registration Identification IMO 9398046;
• SMP Severodvinsk General Cargo 4,106GRT Russia flag; Vessel Registration Identification IMO 9376440;
• Sona General Cargo 1,853GRT Russia flag; Vessel Registration Identification IMO 8700060;
• Sparta II Roll-on Roll-off 7,260GRT Russia flag; Vessel Registration Identification IMO 9160994;
• Sparta III (a.k.a. URSA MAJOR) General Cargo 12,679GRT Russia flag; Vessel Registration Identification IMO 9538892;
• Sparta IV General Cargo 7,522GRT Russia flag; Vessel Registration Identification IMO 9743033;
• Sparta Roll-on Roll-off 8,831GRT Russia flag; Vessel Registration Identification IMO 9268710;
• Taibola General Cargo 8,448GRT Russia flag; Vessel Registration Identification IMO 9086253;
• Taimyr General Cargo 7,949GRT Russia flag; Vessel Registration Identification IMO 8821797;
• Tambey General Cargo 7,949GRT Russia flag; Vessel Registration Identification IMO 9014872;
• Teriberka General Cargo 8,448GRT Russia flag; Vessel Registration Identification IMO 9081291;
• Teriberka Hopper Barge 643GRT Russia flag; Vessel Registration Identification IMO 8931748;
• Terskiy Bereg General Cargo 8,448GRT Russia flag; Vessel Registration Identification IMO 9081368;
• Tiksy General Cargo 7,949GRT Russia flag; Vessel Registration Identification IMO 8821802;
• Triton Tug 161GRT Russia flag; Vessel Registration Identification IMO 7236141;
• Turukhan General Cargo 8,448GRT Russia flag; Vessel Registration Identification IMO 9081332;
• Utrenniy General Cargo 12,936GRT Russia flag; Vessel Registration Identification IMO 9347059;
• Valentin Emirov General Cargo 4,110GRT Russia flag; Vessel Registration Identification IMO 8866591; and
• Viktor ZAbelin General Cargo 6,204GRT Russia flag; Vessel Registration Identification IMO 9210256.

 

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May 9, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated a network of five Islamic State of Iraq and Syria (ISIS) financial facilitators operating across Indonesia, Syria, and Turkey. The five individuals, who are designated pursuant to Executive Order (E.O.) 13224, as amended, have played a key role in facilitating the travel of extremists to Syria and other areas where ISIS operates. This network has also conducted financial transfers to support ISIS efforts in Syria-based displaced persons camps by collecting funds in Indonesia and Turkey, some of which were used to pay for smuggling children out of the camps and delivering them to ISIS foreign fighters as potential recruits.

 

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

 

• Adhiguna, Muhammad Dandi of Turkey and Indonesia;
• Heryadi, Rudi, Bogor of Indonesia;
• Kardian, Ari, Cempakawarna Rt, Tasikmalaya of Indonesia;
• Ramadhani, Dini, Kayseri of Turkey and Indonesia; and
• Susanti, Dwi Dahlia, Idlib of Syria and Indonesia.

 

https://home.treasury.gov/news/press-releases/jy0772 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220509

 

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May 11, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) has updated FAQs 1034, 1035, and 1038.

 

1034. For the purposes of the determination of May 8, 2022, made pursuant to Executive Order (E.O.) 14071, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services,” what is meant by the terms “accounting,” “trust and corporate formation,” and “management consulting” services?

 

Answer

For the purposes of the determination of May 8, 2022, made pursuant to E.O. 14071, OFAC anticipates publishing regulations defining these terms to include the following:

• “Accounting services” – includes services related to the measurement, processing, and evaluation of financial data about economic entities.  Please note that OFAC has issued General License 35 to authorize certain transactions ordinarily incident and necessary to the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of credit rating or auditing services to any person located in the Russian Federation through 12:01 a.m. eastern daylight time, August 20, 2022.  See FAQ 1035.
• “Trust and corporate formation services” – includes services related to assisting persons in forming or structuring legal persons, such as trusts and corporations; acting or arranging for other persons to act as directors, secretaries, administrative trustees, trust fiduciaries, registered agents, or nominee shareholders of legal persons; providing a registered office, business address, correspondence address, or administrative address for legal persons; and providing administrative services for trusts.  Please note that all of these activities are common activities of trust and corporate service providers (TCSPs), although they may be provided by other persons.
• “Management consulting services” – includes services related to strategic business advice; organizational and systems planning, evaluation, and selection; development or evaluation of marketing programs or implementation; mergers, acquisitions, and organizational structure; staff augmentation and human resources policies and practices; and brand management.

 

This determination excludes from the scope of the aforementioned services: (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.

For the purposes of the determination of May 8, 2022, made pursuant to E.O. 14071, OFAC anticipates publishing regulations defining the term “Russian person” to mean an individual who is a citizen or national of the Russian Federation, or an entity organized under the laws of the Russian Federation.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1034

 

1035. For the purposes of Russia-related General License 35 what is meant by the terms “credit rating services” and “auditing services?”

 

Answer

The term “credit rating services” means services related to assessments of a borrower’s ability to meet financial commitments, including analysis of general creditworthiness or with respect to a specific debt or financial obligation.

 

The term “auditing services” means examination or inspection of business records by an auditor, including checking and verifying accounts, statements, or other representation of the financial position or regulatory compliance of the auditee.

 

General License 35 authorizes certain transactions ordinarily incident and necessary to the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of credit rating or auditing services to any person located in the Russian Federation through 12:01 a.m. eastern daylight time, August 20, 2022.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1035

 

1038. For the purposes of the determination of May 8, 2022, made pursuant to Executive Order (E.O.) 14024, what is meant by the terms “accounting,” “trust and corporate formation services,” and “management consulting” sectors of the Russian Federation economy?

 

Answer

 

For the purposes of the determination of May 8, 2022, made pursuant to E.O. 14024, OFAC interprets the following terms to include activities related to products and services in or involving the Russian Federation in the following:

• “Accounting sector” – includes the measurement, processing, and evaluation of financial data about economic entities.
• “Trust and corporate formation services sector” – includes assisting persons in forming or structuring legal persons, such as trusts and corporations; acting or arranging for another person to act as directors, secretaries, administrative trustees, trust fiduciaries, registered agents, or nominee shareholders of legal persons; providing a registered office, business address, correspondence address, or administrative address for legal persons; and providing administrative services for trusts.
• “Management consulting sector” – includes strategic business advice; organizational and systems planning, evaluation, and selection; development or evaluation of marketing programs or implementation; mergers, acquisitions, and organizational structure; staff augmentation and human resources policies and practices; and brand management.

The determination regarding these sectors pursuant to E.O. 14024 takes effect immediately.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1038

 

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May 12, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issues Syria General License 22 and publishes additional Frequently Asked Questions.

 

General License 22: Transactions prohibited by § 542.206 or 542.207 of the Syrian Sanctions Regulations, 31 CFR part 542 (SySR), that are ordinarily incident and necessary to activities in the following economic sectors in the areas of northeast and northwest Syria described in the Annex to this general license are authorized: (1) agriculture; (2) information and telecommunications; (3) power grid infrastructure; (4) construction; (5) finance; (6) clean energy; (7) transportation and warehousing; (8) water and waste management; (9) health services; (10) education; (11) manufacturing; and (12) trade.

 

The purchase of refined petroleum products of Syrian origin for use in Syria prohibited by § 542.209 of the SySR that is ordinarily incident and necessary to the activities described in paragraph (a) of this general license are authorized.

 

https://home.treasury.gov/system/files/126/syria_gl22.pdf

 

See the following link for the full text of new Frequently Asked Questions 1045 through 1041:

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-05-12.

 

See the following link for the full text of reviewed Frequently Asked Question 884:

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/884.

 

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May 19, 2022: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Ahmad Jalal Reda Abdallah, a Lebanese businessman and Hizballah financial facilitator, as well as five of his associates and eight of his companies in Lebanon and Iraq. This action illuminates Hizballah’s modus operandi of using the cover of seemingly legitimate businesses to generate revenue and leverage commercial investments across a multitude of sectors to secretly fund Hizballah and its terrorist activities. It also demonstrates how Hizballah goes to great lengths to establish companies with opaque ownership structures in order to conceal their involvement in these businesses, and also their involvement in criminal activities such as altering of medication labels for black market pharmaceutical sales.

 

https://home.treasury.gov/news/press-releases/jy0796

 

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

• Abdallah, Ahmad Jalal Red of Lebanon;
• Abdallah, Ali Reda of Lebanon;
• Abdallah, Hussein Ahmad Jalal of Lebanon;
• Abdallah, Hussein Reda of Lebanon;
• Attia, Hussein Kamel of Lebanon; and
• Haidamous, Joseph Ilya of Lebanon.

 

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

 

• Al Moukhtar Products Co. SARL of Lebanon;
• Focus Company SARL of Lebanon;
• Focus Media Company Sal Offshore of Lebanon;
• United General Contracting Company SARL of Lebanon;
• United General Holding SAL of Lebanon;
• United General Offshore SAL of Lebanon;
• United General Services SARL of Lebanon; and
• United International Exhibition Company SARL of Lebanon.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220519

 

*******

 

May 24, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) will not renew the provisions of GL-9C issued pursuant to the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587, that expire on May 25, 2022 at 12:01 a.m. EDT. Therefore, Russia will not be able to pay its debts in U.S. dollars and makes it more likely that Russia will default on its debts.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220524_33

 

May 25, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 13A, "Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024."

 

General License 13A: 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 (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, 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, September 30, 2022.

 

This general license does not authorize: Any debit to an account on the books of a U.S. financial institution of the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation; or 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. Effective May 25, 2022, General License No. 13, dated March 2, 2022, is replaced and superseded in its entirety by this General License No. 13A.

 

https://home.treasury.gov/system/files/126/russia_gl13a.pdf

 

*******

 

May 24, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated a Hamas finance official as well as an expansive network of three Hamas financial facilitators and six companies that have generated revenue for the terrorist group through the management of an international investment portfolio. Hamas’s Investment Office, whose leadership oversees this network, held assets estimated to be worth more than $500 million, including companies operating in Sudan, Turkey, Saudi Arabia, Algeria, and the United Arab Emirates (UAE). While Hamas’s Shura Council and Executive Committee exercise control and oversight of the group’s international investment portfolio, the Investment Office is in charge of the day-to-day management of this investment portfolio.

https://home.treasury.gov/news/press-releases/jy0798

 

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

• Ali, Usama of Lebanon, Canada and Palestine;
• Odeh, Ahmed Sharif Abdallah of Jordan;
• Qafisheh, Hisham Younis Yahia of Turkey, Palestine, Saudi Arabia and Jordan; and
• Sabri, Abdallah Yusuf Faisal of Jordan.

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

• Agrogate Holding of Sudan;
• Al Rowad Real Estate Development of Sudan;
• Anda Company of Saudi Arabia;
• Itqan Real Estate JSC of the United Arab Emirates;
• Sidar Company of Algeria; and
• Trend GYO of Turkey.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220524

 

*******

 

May 25, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating an international oil smuggling and money laundering network led by Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) officials that has facilitated the sale of hundreds of millions of dollars worth of Iranian oil for both the IRGC-QF and Hizballah. This oil smuggling network, led by U.S.-designated IRGC-QF official Behnam Shahriyari and former IRGC-QF official Rostam Ghasemi and backed by senior levels of the Russian Federation government and state-run economic organs, has acted as a critical element of Iran’s oil revenue generation, as well as its support for proxy militant groups that continue to perpetuate conflict and suffering throughout the region.

 

https://home.treasury.gov/news/press-releases/jy0799

 

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

• Celik, Abdulhamid of Turkey;
• Ettehadi, Esam of Iran;
• Gunduz, Seyyid Cemal, of Turkey;
• Hamidi, Mihrab Suhrab  of Afghanistan and Russia;
• Karimian, Mohammad Sadegh of  Iran;
• Kashanimehr, Alireza of Iran;
• Kaskariy, Abdulaziz of Turkey;
• Monzavi, Azim of Iran;
• Nabizada, Kamaluddin Gulam of Afghanistan and Russia; and
• Sanli, Hakki Selcuk of Turkey.

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

• China Haokun Energy Limited of China;
• Concepto Screen Sal Off-Shore of Lebanon;
• Fujie Petrochemical Zhoushan Co., Ltd. of China;
• Haokun Energy Group Company Limited of China;
• Petro China Pars CO. of Iran;
• Rpp Limited Liability Company of Russia;
• Shandong Sea Right Petrochemical Co., Ltd. of China;
• Turkoca Import Export Transit Co., Ltd. of South Korea; and
• Zamanoil Dmcc of the United Arab Emirates.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220525

 

*******

 

May 27, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned one individual, two banks, and a trading company for their support to the Democratic People’s Republic of Korea’s (DPRK) development of weapons of mass destruction (WMD) and ballistic missile programs and to the U.S.-designated DPRK national airline.  On May 24, 2022, the DPRK launched three missiles:  one intercontinental ballistic missile (ICBM) and two shorter-range ballistic missiles.  So far this year, the DPRK has launched 23 ballistic missiles, including six ICBMs — all in violation of multiple United Nations Security Council resolutions (UNSCRs).

 

https://home.treasury.gov/news/press-releases/jy0801

 

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

 

• Jong, Yong Nam of Belarus and North Korea.

 

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

 

• Air Koryo Trading Corporation of China;
• Far Eastern Bank of Russia; and
• Public Joint-Stock Company Commercial Bank 'Sputnik' of Russia.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220527

 

*******

 

Nuclear Regulatory Commission

 

May 17, 2022: 87 Fed. Reg. 29882: The U.S. Nuclear Regulatory Commission (NRC) issued an Order suspending the general license authority under NRC regulations to export radioactive material, and deuterium for nuclear end use, to the Russian Federation. Exporters are no longer authorized to use the general license to export radioactive material, or deuterium for nuclear end-use, to the Russian Federation and now must apply for a specific license pursuant to NRC regulations.

 

https://www.govinfo.gov/content/pkg/FR-2022-05-17/pdf/2022-10565.pdf

 

 

 

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The U.S. Departments of State, Treasury, Commerce, and Labor 

 

May 23, 2022:  The U.S. Departments of State, Treasury, Commerce, and Labor issued an advisory "Risks and Considerations for U.S. Businesses Operating in Sudan" to highlight growing risks to American businesses and individuals associated with conducting business with Sudanese State-Owned Enterprises which includes all companies under military control.  These risks arise from recent actions undertaken by Sudan’s Sovereign Council and security forces under the military’s control and could adversely impact U.S. businesses, individuals, other persons, and their operations in the country and the region.

 

https://www.state.gov/risks-and-considerations-for-u-s-businesses-operating-in-sudan/

 

*******

 

Fines and Penalties

 

May 9, 2022: A federal judge in Greeneville, Tennessee, sentenced Xiaorong You, aka Shannon You, a Michigan woman to 168 months, the equivalent of 14 years, in prison for a scheme to steal trade secrets, engage in economic espionage and commit fraud. The defendant was also ordered to serve three years of supervised release and pay a $200,000 fine. In April 2021, following a 13-day jury trial, Xiaorong You, aka Shannon You, was convicted of conspiracy to commit trade secret theft, conspiracy to commit economic espionage, possession of stolen trade secrets, economic espionage and wire fraud.

 

https://www.justice.gov/opa/pr/chemist-sentenced-stealing-trade-secrets-economic-espionage-and-wire-fraud

 

*******

 

May 13, 2022: The U.S. Department of Justice (DOJ) has filed its first criminal complaint against a U.S. citizen who allegedly tried to evade American sanctions using cryptocurrency, according to a judicial opinion document filed on May 13 2022, by U.S. Magistrate Judge Zia M. Faruqui. The case is still sealed.  The DOJ’s criminal complaint is against an American citizen accused of transmitting more than $10 million worth of bitcoin to a crypto exchange in a comprehensively sanctioned country. Comprehensive sanctions are currently placed on Cuba, Iran, North Korea, Syria, and the regions of Crimea, Donetsk, and Luhansk.

 

https://theparadise.ng/doj-files-first-criminal-complaint-against-us-citizen-allegedly-using-cryptocurrency-to-evade-sanctions/

 

*******

 

May 18, 2022: A Chicago technology executive, Obaidullah Syed, 67, of Northbrook, Ill., has been sentenced to a year in federal prison for illegally exporting computer equipment from the United States to a nuclear research agency of the Pakistani government. Obaidullah Syed pleaded guilty last year to conspiring to export goods from the U.S. without a license from the Department of Commerce and to submit false export information.  U.S. District Judge Mary M. Rowland sentenced Syed to a year and a day in federal prison.  Prior to sentencing, Syed forfeited $247,000 of criminally derived cash to the U.S. government.

 

https://www.justice.gov/usao-ndil/pr/chicago-tech-executive-sentenced-year-federal-prison-illegally-exporting-computer

 

*******

 

May 18, 2022: Seven South Korea-based companies have agreed to pay $3.1 million to resolve allegations they violated the False Claims Act by engaging in a bid-rigging conspiracy that targeted U.S. Army Corps of Engineers (USACE) contracts for construction and engineering work on U.S. military bases in South Korea. The seven companies are Korea Engineering Consultants Corporation; Yul Lim Construction Co. Ltd.; Shin Woo Construction & Industrial Co. Ltd.; Seongbo Const. Ind. Co. Ltd.; Wooseok Construction Co. Ltd.; Yuil Engineering and Construction Co.; and Seokwang Development Co. Ltd. The companies have agreed to each pay an equal share of the settlement amount.

 

The United States alleged the seven companies conspired to suppress and eliminate competition during the bidding process on 15 USACE contracts awarded between 2016 and 2019. The United States further alleged that as a result of this anticompetitive conduct, the USACE paid substantially more for services performed under the contracts than it would have had there been competition among the bidders.

 

https://www.justice.gov/opa/pr/seven-south-korean-companies-agree-pay-approximately-31-million-settle-civil-false-claims-act

 

*******

 

May 20, 2022: A federal grand jury in the Eastern District of Texas returned an indictment charging a military contractor, Aaron Stephens, for rigging bids on public military contracts in Texas and Michigan and defrauding the United States.

 

According to the indictment, from at least as early as May 2013 through at least April 2018, Stephens formed agreements with multiple co-conspirators to rig bids on certain government contracts in order to give the false impression of competition and secure government payments, and to defraud the United States.  As a part of two different schemes, Stephens and his co-conspirators allegedly rigged eight military contracts and received more than $15 million from the government for those contracts. The contracts included work performed for the Red River Army Depot in Texarkana, Texas; the U.S. Army Contracting Command in Warren, Michigan; and the Sierra Army Depot in Herlong, California.

 

https://www.justice.gov/opa/pr/military-contractor-indicted-15-million-bid-rigging-scheme-and-conspiracy-defraud-united

 

*******

 

May 20, 2022: Cape Henry Associates (Cape Henry), located in Virginia Beach, Virginia, has agreed to pay $425,000 to resolve allegations that it violated the False Claims Act by failing to inform contracting officers of the company’s organizational conflicts of interest (OCI) in connection with the award and performance of task orders on government contracts. Cape Henry performs manpower analysis, personnel analysis and training services for the U.S. Armed Forces.

 

The Justice Department alleged that Cape Henry failed to disclose that one of the company’s officers had an ownership interest in KOVA Global, a company to which Cape Henry awarded subcontracts to provide warehouse services in connection with two sole source task orders issued by the Army and General Services Administration (GSA).

 

https://www.justice.gov/opa/pr/government-contractor-agrees-pay-425000-alleged-false-claims-related-conflicts-interest

 

*******

 

May 26, 2022: The United States Attorney’s Office unsealed a criminal complaint charging Jonathan Yet Wing Soong with smuggling and violating export control laws by allegedly secretly funneling sensitive aeronautics software to a Beijing university. The allegations against Soong, 34, of San Jose, were set out in a complaint filed May 23, 2022.  According to the complaint, Soong was employed by Universities Space Research Association (USRA) between April 2016 and September 2020 as a program administrator.  USRA is a nonprofit corporation contracted by the National Aeronautics and Space Administration (NASA) to, among other things, distribute domestically and internationally sensitive aeronautics-related software developed through the Army’s Software Transfer Agreement (STA) program.  As USRA’s STA program administrator, Soong was responsible for overseeing certain software license sales, conducting export compliance screening of customers, generating software licenses, and, on occasion, physically exporting software.

 

Soong is alleged to have been trained in and been aware of export compliance rules which, among other things, restrict sales and exports to certain entities.  As relevant to this case, the complaint describes rules that restrict sales of certain technology to entities on the U.S. Department of Commerce Entity List (Entity List), a list with associated regulations that are maintained by the Department of Commerce pursuant to a federal statutory and presidential directive.  The Entity List and associated regulations prohibit export without a license of certain technology with commercial and potential military applications to entities and individuals whose activities have been found to be contrary to U.S. national security or foreign policy interests.  The complaint alleges Soong unlawfully and without a license exported and facilitated the sale and transfer of software to an entity on the Entity List—Beijing University of Aeronautics and Astronautics (BUAA), which is also known as Beihang University.  According to the complaint, Beihang University was added to the Entity List due to the University’s involvement in People’s Republic of China military rocket systems and unmanned air vehicle systems.  Given its inclusion on the Entity List, BUAA is prohibited from receiving certain items without a license.  The complaint alleges Soong used an intermediary in hopes that the illegal transfer would not be detected.

 

https://www.justice.gov/usao-ndca/pr/south-bay-resident-charged-smuggling-and-exporting-american-aviation-technology-beijing

 

*******

 

May 27, 2022: The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with Banco Popular de Puerto Rico (BPPR), a Puerto Rican bank with branches in Puerto Rico and the Virgin Islands.  BPPR agreed to remit $225,937.86 to settle its potential civil liability for 337 apparent violations of the Venezuela Sanctions Regulations.  The apparent violations occurred when BPPR processed transactions totaling $853,126 on behalf of two individuals who were low-level employees of the Government of Venezuela (GoV), in apparent violation of U.S. sanctions against Venezuela.  All of the apparent violations resulted from the maintenance of four personal accounts operated by these two employees of the GoV.  The settlement amount reflects OFAC’s determination that BPPR’s apparent violations were non-egregious and voluntarily self-disclosed.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220527_33