This newsletter is a listing of the latest changes in export control regulations through April 30, 2023.  The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities.  It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

 

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

 

REGULATORY UPDATES

 

The President

 

President Biden Continues National Emergency Against Russia

 

April 10, 2023: 88 Fed. Reg. 21457: President Biden continued for 1 year the national emergency against Russia declared in Executive Order 14024 of April 15, 2021, which was expanded in scope by Executive Order 14066, and with respect to which additional steps were taken in Executive Orders 14039, 14068, and 14071, must continue in effect beyond April 15, 2023.

 

Federal Register :: Continuation of the National Emergency With Respect to Specified Harmful Foreign Activities of the Government of the Russian Federation

 

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President Biden Continues National Emergency Against Somalia

 

April 10, 2023: 88 Fed. Reg. 21455: President Biden continued for 1 year the national emergency against Somalia declared in Executive Order 13536 of April 12, 2010, as further implemented by Executive Order 13620 of July 20, 2012, in view of United Nations Security Council Resolution 2036 of February 22, 2012, and Resolution 2002 of July 29, 2011, and to address: exports of charcoal from Somalia, which generate significant revenue for al-Shabaab; the misappropriation of Somali public assets; and certain acts of violence committed against civilians in Somalia, all of which contribute to the deterioration of the security situation and the persistence of violence in Somalia.

 

Federal Register :: Continuation of the National Emergency With Respect to Somalia

 

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President Biden Continues National Emergency Against Russia And Russian-Affiliated Vessels

 

April 20, 2023: 88 Fed. Reg. 24327: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency with respect to the Russian Federation and the emergency authority relating to the regulation of the anchorage and movement of Russian-affiliated vessels to United States ports set out in Proclamation 10371 of April 21, 2022.

 

https://www.federalregister.gov/documents/2023/04/20/2023-08501/continuation-of-the-national-emergency-and-of-the-emergency-authority-relating-to-the-regulation-of

 

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

 

DDTC Name And Address Changes Posted To Website

 

April 4 through 28, 2023: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at    

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

• The following Raytheon Anschuetz GmbH entities will change their name and ownership as a result of an acquisition by DMB Dr. Dieter Murmann Beteiligungsgesellschaft GmbH;

 

Old Name	New Name
Raytheon Systems Ltd. Raytheon Anschuetz GmbH Portsmouth Office Raytheon Technologies	Anschuetz UK Ltd.
Raytheon Anschütz GmbH	Anschuetz GmbH
Raytheon Anschuetz do Brasil Sistemas Marítimos Ltda.	Anschuetz do Brasil Sistemas Maritimos Ltda.
Raytheon Anschuetz Singapore Pte. Ltd.	Anschuetz Singapore Pte. Ltd.

 

• Cobham Holdings Inc. and its subsidiaries will change their names due to a reincorporation:

 

From:	To:
Cobham Holdings Inc.	Frontgrade Technologies Holdings Inc.
CAES Colorado Springs LLC	Frontgrade Colorado Springs LLC
Cobham Advanced Electronics Solutions Inc.	Frontgrade Technologies Inc.

 

• Change in Name from Aciturri Assembly S.A.U. to Aciturri Aerostructures S.L.U. due to merger;
• Change in Name from Airbus Defence and Space Netherlands B.V. to Airbus Netherlands B.V. due to corporate rebranding;
• Change in Address for V2X, Inc. from 2424 Garden of the Gods Road, Suite 300, Colorado Springs, CO 80919 to 7901 Jones Branch Drive, Suite 700, McLean, VA 22102;
• Change in Name from AKKA Germany GmbH to Akkodis Germany AS&D GmbH and in Address from Taunusstraße 31, Munich, Bavaria, Germany 80807 to Airbus-Allee 5, Bremen, Germany 28199 due to acquisition;
• Babcock Aviation entities in Spain, the Nordic Region, Portugal, Italy, Mozambique, and the UK changed names due to acquisition by Avincis;

 

From:	To:
Babcock Mission Critical Services España SAU	Avincis Aviation España SAU
Babcock Mission Critical Services Fleet Management SAU	Avincis Aviation Technics SAU
Babcock Mission Critical Services Galicia SLU	Avincis Aviation Iberia SL
Babcock Emergencias Aéreas España Holding, SLU	Avincis Aviation AOC Holding SLU
Babcock Mission Critical Services Asset Management SAU	Avincis Aviation Asset Management SAU
Babcock Mission Critical Services Group SAU	Avincis Aviation Group SAU
Babcock Mission Critical Services Holdings SLU	Avincis Aviation Holdings SLU
Babcock Mission Critical Services International, SAU	Avincis Aviation International SAU
Babcock Mission Critical Services SAU	Avincis Aviation SAU
Babcock International Spain, SL	Avincis Aviation International España SLU
Babcock Norway AS	Avincis Aviation Fleet Management Nordics AS
Babcock Scandinavian AirAmbulance AS	Avincis Aviation Norway AS
Babcock Scandinavian Aviation Services AS	Avincis Aviation Services Norway AS
Babcock Scandinavian Engineering AS	Avincis Aviation Engineering Norway AS
Babcock Scandinavian Holding AS	Avincis Aviation Holdings Norway AS
Babcock Scandinavia Holding AB	Avincis Aviation Holdings Sweden AB
Babcock Mission Critical Services, Scandinavia AB	Avincis Aviation Services Sweden AB
Babcock SAA FW AB	Avincis Aviation FW Sweden AB
Babcock Scandinavian AirAmbulance AB	Avincis Aviation Sweden AB
Babcock Scandinavian AirAmbulance AB, filial i Finland	Avincis Aviation Sweden AB, filial in Finland
Babcock Engineering Portugal, Unipessoal, LDA	Avincis Aviation Technics Portugal, Unipessoal Lda.
Babcock Mission Critical Services Portugal, Unipessoal, LDA	Avincis Aviation Portugal, Unipessoal Lda.
Babcock Holdings (Italy) S.p.A.	Avincis Aviation Holdings Italia S.p.A.
Babcock International Italy S.p.A.	Avincis Aviation International Italia S.p.A.
Babcock MCS Fleet Management S.p.A.	Avincis Aviation Italia S.p.A.Avincis
Babcock Mission Critical Services Italia S.p.A.	Aviation Fleet Management Italia S.p.A.
Babcock Mission Critical Services Mozambique, Limitada	Avincis Aviation Mozambique, Limitada
Babcock Investments (Number Nine) Limited	Avincis Aviation Management Services Ltd

• Babcock Marine (Clyde) Limited merged into Devonport Royal Dockyard Limited due to internal corporate restructuring.

 

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The U.S. Department Of State Amended The ITAR To Expand The Types of Defense Articles And Defense  Services To Be Provided Per the Canadian Exemption And the U.K. And Australia Treaty Exemptions

 

April 12, 2023: 88 Fed. Reg. 21910:  The U.S. Department of State, Directorate of Defense Trade Controls amended the ITAR to expand the types of defense articles and defense services to be provided pursuant to the Canadian Exemption and the U.K. and Australia treaty exemptions. The amendments also make clarifying changes and conforming updates to Supplement No. 1 entries, specifically to U.S. Munitions List (USML) Category IV(i) manufacturing know-how and USML Category XII night vision entries. The Department of State is implementing this amendment after a series of routine consultations with its interagency and international counterparts. This amendment is intended to ensure the Treaty exemptions and the Canadian exemptions continue to enhance operational capabilities, interoperability, and cooperation between the armed forces of the United States and its allies and partners. While future rulemaking will address other areas of the chart, this final rule implements four specific changes to Supplement No. 1 to § 126.

 

First, this final rule amends the entry USML Category IV which previously excluded “defense articles and services specific to torpedoes,” to exclude only “defense articles and services specific to the warhead or the sonar, guidance, and control section of torpedoes.”

 

Second, this final rule amends the entry in  USML Category XX(c), which previously excluded “defense articles and services specific to submarine combat control systems,” to remove mounting racks and cabinets from that entry.

 

Third, this final rule removes specific Underwater Acoustic Decoy Countermeasures (ADC) from Supplement No. 1 to Part 126 and clarifies Note 9.

 

Fourth, this final rule amends the entries regarding USML Category IV(i) manufacturing know-how and USML Category XII night vision. The USML Category IV(i) technical data entries are amended to reflect the fact that USML Category IV(h) was previously updated (79 FR 34) to describe the specific subassemblies of other USML Category IV defense articles that remain ITAR-controlled. Similarly, the night vision entries are updated to reflect the fact that first generation image intensification tubes are not subject to the ITAR, some items previously controlled in paragraph (c) of Category XII moved to paragraph (e) in a prior rulemaking (81 FR 70340), and to clarify that the technical data and defense services entry only applies to paragraph (f) of Category XII.

 

https://www.federalregister.gov/documents/2023/04/12/2023-07408/international-traffic-in-arms-regulations-expansion-of-defense-articles-and-defense-services and https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_news_and_events

 

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The U.S. Department Of State Maintained The Designations Of Foreign Terrorist Organizations

 

April 24, 2023: 88 Fed. Reg. 24842: Based on a review of the Administrative Records assembled pursuant to Section 219(a)(4)(C) of the Immigration and Nationality Act, amended (8 U.S.C. 1189(a)(4)(C))(“INA”), and in consultation with the Attorney General and the Secretary of the Treasury, the Department of State conclude that the circumstances that were the bases for the designations of organizations as a Foreign Terrorist Organizations have not changed in such a manner as to warrant revocation of the designations and that the national security of the United States does not warrant a revocation of the designations. Therefore, the designations of the certain organizations as Foreign Terrorist Organizations, pursuant to section 219 of the INA (8 U.S.C. 1189), shall be maintained.

 

https://www.federalregister.gov/documents/2023/04/24/2023-08613/review-of-the-designations-as-a-foreign-terrorist-organizations-of-islamic-jihad-union-and-islamic

 

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Foreign Terrorist Organizations Post 2022 End-Use Monitoring Reports

 

April 25, 2023: The U.S. Department of State’s Directorate of Defense Trade Controls (DDTC) has posted on its website the following end-use monitoring reports for fiscal year 2022:

• Blue Lantern Report – End Use Monitoring of Defense Articles and Defense Services FY22

https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=061652e31b5aa5102dc36311f54bcb00

• Golden Sentry Report – End Use Monitoring of Defense Articles and Defense Services FY22

/efaidnbmnnnibpcajpcglclefindmkaj/https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=821612e31b5aa5102dc36311f54bcbfe

 

Editors note: The Blue Lantern Program monitors the end use of defense articles including technical data and defense services and brokering activities subject to DOS licensing and other approvals. It includes pre and post license, pre and post shipment verification to verify the bona fides of foreign consignees and end users and confirm legitimacy of proposed transactions. The report is quite enlightening and is a reminder to all trade compliance professionals of the obligations of due diligence. DOS has responsibility for this program.

 

The Golden Sentry program is an end use monitoring program for defense articles and defense services sold or leased under the Arms Export Control Act or Foreign Assistance Act (Govt to Govt transfers) DOD has responsibility for this program.

 

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The U.S. Department Of State Amended The ITAR USML Category XI Controls On High-Energy Storage Capacitors

 

April 27, 2023: 88 Fed. Reg. 25488: The Department of State (the Department) amends the International Traffic in Arms Regulations (ITAR) to remove from U.S. Munitions List (USML) Category XI certain high-energy storage capacitors and to clearly identify the high-energy storage capacitors that remain in USML Category XI. The effective date of this amendment May 21, 2023 and public comments are due

by May 30, 2023.

 

The Department removed from USML Category XI certain high-energy storage capacitors that it assesses have broad commercial application, are available internationally, and do not provide a critical military or intelligence advantage. The Department assessed that adding a 125-volt (125 V) voltage criterion for the high-energy capacitors described on the USML ensures the capacitors that remain warrant control on the USML. While adding the 125 V criterion to paragraph (c)(5), the Department simultaneously reorganized the paragraph to delineate each element of the control criteria more clearly and added a note to explain those criteria.

 

These changes are warranted because the Department found that certain low-voltage high-energy storage capacitor technology has progressed such that many models that exceed the existing USML control criteria no longer provide a critical military or intelligence advantage. Although these lower-voltage capacitors meet the energy density and full energy life criteria, the technology for these lower-voltage capacitors is well understood, and the capacitors have been extensively integrated into commercial applications, such as Wi-Fi routers and civil aviation aircraft transponders. Further, comparable capacitors manufactured in other countries are widely available internationally without multilateral export restrictions placed on them.

 

https://www.federalregister.gov/documents/2023/04/27/2023-08825/international-traffic-in-arms-regulations-us-munitions-list-targeted-revisions

 

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Department of Treasury

 

The U.S. Department Of The Treasury Has Published The List Of Countries That Require Or May Require Participation In, Or Cooperation With, An International Boycott

 

April 10, 2023: 88 Fed. Reg. 21234: In accordance with section 999(a)(3) of the Internal Revenue Code of 1986, the U.S. Department of the Treasury has published the following list of countries that require or may require participation in, or cooperation with, an international boycott (within the meaning of section 999(b)(3) of the Internal Revenue Code of 1986):

• Iraq;
• Kuwait;
• Lebanon;
• Libya;
• Qatar;
• Saudi Arabia;
• Syria; and

Federal Register :: List of Countries Requiring Cooperation With an International Boycott

 

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

 

The Department Of The Treasury’s Office Of Foreign Assets Control (OFAC) Has Published An Alert, “Possible Evasion Of The Russian Oil Price Cap”

 

April 17, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has published an alert, “Possible Evasion of the Russian Oil Price Cap,” to warn U.S. persons about possible evasion of the price cap on crude oil of Russian Federation origin, particularly involving oil exported through the Eastern Siberia Pacific Ocean (ESPO) pipeline and ports on the eastern coast of the Russian Federation.

 

https://ofac.treasury.gov/recent-actions/20230417 and https://ofac.treasury.gov/media/931641/download?inline

 

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U.S. Department of Defense

 

DSCA Notifies Congress Of Potential FMS Sales To Morocco

 

April 11, 2023: The Government of Morocco has requested to buy forty (40) AGM-154C Joint Stand Off Weapons (JSOW). Also included are Dummy Air Training Missiles; Captive Flight Vehicles (CFVs); Free Flight Vehicles (FFVs); containers; mission planning, integration support, and testing; munitions storage security and training; weapon operational flight program software development; transportation, tools, and test equipment; support equipment; spare and repair parts; publications and technical documentation; personnel training and training equipment; U.S. Government and contractor engineering and logistics support services; and other related elements of logistical and program support. The estimated total cost is $250 million. The principal contractor will be Raytheon Missiles & Defense Company, Tucson, Arizona. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/morocco-joint-stand-weapons-jsow
April 11, 2023: The Government of Morocco has requested to buy eighteen (18) M142 High Mobility Artillery Rocket System (HIMARS) launchers; forty (40) M57 Army Tactical Missile Systems (ATACMS); thirty-six (36) M31A2 Guided Multiple Launch Rocket Systems (GMLRS) Unitary; thirty-six (36) M30A2 Guided Multiple Launch Rocket Systems (GMLRS) Alternative Warhead; nine (9) M1152A1 High Mobility Multipurpose Wheeled Vehicles (HMMWV); and eighteen (18) International Field Artillery Tactical Data Systems (IFATDS). Also included are forty (40) M28A2 Low Cost Reduced Range Practice Rocket Pods (LCRRPR); radios with similar “SINCGARS” capability; thirty-five (35) Vehicular Dual Long-Range Radio Systems w/GPS; twenty-four (24) Single Radio, Long Range Vehicular System w/GPS; eighteen (18) M1084A2 cargo truck, Family of Medium Tactical Vehicles (FMTV) Resupply Vehicles (RSV); three (3) M1089A2 wrecker truck, FMTV, RSV; eighteen (18) M1095 5-ton trailer, FMTV; twenty-three (23) Simple Key Loader (SKL), AN/PYQ-10; fifty (50) Defense Advanced Global Positioning System Receivers (DAGR); camouflage screen and support systems; support equipment; communications equipment; spare and repair parts; test sets; laptop computers; training and training equipment; publications; systems integration support; technical data; Stockpile Reliability, Quality Assurance and Technical Assistance teams; U.S. Government and contractor technical, engineering, and logistics support services; and other related elements of logistical and program support. The estimated total cost is $524.2 million. The principal contractors will be Lockheed Martin Missiles and Fire Control, Camden, AK; L3 Harris Communications, Inc., Rochester, NY; Raytheon, Waltham, MA; COBHAM Aerospace Connectivity, Buckinghamshire, UK; Oshkosh Defense, LLC, Oshkosh, WI; AAR Corporation AAR Manufacturing, Inc., Cadillac, MI; and AM General LLC, South Bend, IN. There are no known offset agreements proposed in connection with this potential sale.

 

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

 

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DSCA Notifies Congress Of Potential FMS Sale To Turkey

 

April 17, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Türkiye (Turkey) has requested to buy defense articles and services to support its current fleet of F-16 aircraft, to include software upgrades of the Operational Flight Program (OFP) avionics with the Automatic Ground Collision Avoidance System (AGCAS) capability; hardware modifications to enable integration of the Multifunctional Information Distribution System Block Upgrade II (MIDS BU II), procured separately; hardware and software upgrades to include aircraft major modification; both classified and unclassified software and software support; integration and test support; support equipment; training and training equipment; spare and repair parts; publications and technical documentation; U.S. Government and contractor engineering, technical, and logistical support services; and other related elements of logistical and program support. The estimated total cost is $259 million. The principal contractor will be Lockheed Martin Aeronautics Company of Fort Worth, TX. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/turkiye-f-16-avionics-upgrade

 

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DSCA Notifies Congress Of Potential FMS Sales To Norway

 

April 26, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress of the following possible Foreign Military Sale to Norway. The Government of Norway has requested to buy six (6) MH-60R Multi-Mission Helicopters; fifteen (15) T-700-GE-401C engines (12 installed, 3 spares); nine (9) Link 16 Multifunctional Information Distribution Systems Joint Tactical Radio Systems (MIDS JTRS) (6 installed, 3 spares); eighteen (18) Embedded Global Positioning System/Precise Positioning Service (GPS/PPS)/Inertial Navigation Systems (EGI) with Selective Availability/Anti-Spoofing Module (SAASM) (12 installed, 6 spares); and six (6) Airborne Low-Frequency Sonars (ALFS) (aircraft provisions only). Also included are M514 impulse cartridge/cartridge actuated devices; MJ20 cartridge actuated thruster/cartridge actuated devices; WB53 fire extinguisher cartridge/cartridge actuated devices; CCU-136A/A impulse cartridges; GAU-21 crew served guns (including pintle and laser pointer); AN/ARC-210 RT-2036 radios with Communications Security (COMSEC); AN/AAR-47 missile warning systems; AN/APX-123 Identification Friend or Foe (IFF) transponders; AN/ALE-47 dispensers; Electronic Countermeasures; Advanced Data Transfer Systems (ADTS); AN/AAS-44C(V) Multi-Spectral Targeting Systems; Identification Friend or Foe Mode 4/5 Cryptographic Applique, KIV-78; Joint Mission Planning Systems (JMPS); AN/ARQ-59 Hawklink radio terminals; Training Simulators/Operational Machine Interface Assistants (ATS/OMIA); Aviation Maintenance Weapons Loading Trainer (AMWLT); Tactical Operational Flight Trainer (TOFT); AN/ALQ-210 Electronic Support Measures (ESM) systems; APS-153(V) multi-mode radars; spare engine containers; spare and repair parts; support and test equipment; communications equipment; ferry support; publications and technical documentation; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; obsolescence engineering, integration, and test activities required to ensure readiness for the production of the Norwegian MH-60R helicopters; and other related elements of logistics and program support. The total estimated program cost is $1 billion. The principal contractor will be Lockheed Martin Rotary and Mission Systems, Owego, New York. The purchaser has requested offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor.
The Government of Norway has also requested continued sustainment and associated services for four (4) C-130J aircraft beyond Block 6 through 2028. Included are Joint Mission Planning Systems (JMPS); aircraft components, spare parts, consumables, and accessories; repair and return support; aircraft support and support equipment; unclassified publications and technical documentation; software delivery and support; unclassified Computer Program Identification Number (CPIN) systems; telecommunications support; minor modifications, maintenance and maintenance support; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistical and program support. The estimated total cost is $166 million. The principal contractor will be Lockheed Martin, Marietta, GA. The purchaser typically requests offsets. Any offset agreement would be defined in negotiations between the purchaser and the contractor.

 

https://www.dsca.mil/press-media/major-arms-sales/norway-defense-articles-and-services-related-mh-60r-multi-mission and https://www.dsca.mil/press-media/major-arms-sales/norway-c-130j-sustainment

 

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DSCA Notifies Congress Of Potential FMS Sales To The United Kingdom

 

April 28, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress of the following possible Foreign Military Sale to the United Kingdom. The Government of the United Kingdom has requested to buy up to seven hundred sixty-eight (768) Advanced Precision Kill Weapon System-II (APKWS-II) All Up Round (AURs) (Single Variant). Also included is support equipment; spare and repair parts; publications and technical documentation; transportation; U.S. Government and contractor engineering, technical and logistical support services; and other related elements of logistical and program support. The total estimated cost is $31.2 million.

 

https://www.dsca.mil/press-media/major-arms-sales/united-kingdom-advanced-precision-kill-weapon-system-ii

 

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April 26, 2023: The European Defence Agency (EDA) and the U.S. Department of Defense (DoD) have formalized a framework for cooperation through the signing of an Administrative Arrangement (AA). The two parties have reached an understanding on an initial scope of cooperation, which may, upon mutual consent, progressively develop in the future.

 

• Forum of exchange and dialogue: The AA will enable a substantial defense dialogue on all topics within EDA’s remit and invitations for U.S. DoD to attend relevant meetings of EDA’s Steering Board and for EDA to attend meetings convened by the U.S. DoD, as appropriate.
• Activities of cooperation: Initial activities include consultations on the impact of EU Registration, Evaluation, Authorisation, and Restriction of Chemicals (REACH) regulation; military mobility; supply chain issues; and the impact of climate change on defense. It also allows for U.S. participation in the open session of the European Defence Standardisation Committee.

 

https://www.defense.gov/News/Releases/Release/Article/3373635/dod-signs-new-administrative-arrangement-with-european-defence-agency/

 

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

 

The U.S. Department Of Commerce, The Bureau Of Industry And Security (BIS) Will Treat Failure To Voluntarily Disclose A Significant Violation As An Aggravating Factor

 

April 18, 2023: The U.S. Department of Commerce, The Bureau of Industry and Security (BIS) updated its policy regarding voluntary self-disclosures and disclosures concerning others. Effective compliance is the first line of effective enforcement and BIS needs the support and cooperation of U.S. businesses and universities – those who are at the forefront of these extraordinary technological advances. Both industry and academia must have proper compliance systems in place to identify, prevent, and mitigate export control violations. An important part of a robust export compliance system is a process for making two different types of disclosures to our Office of Export Enforcement: (1) voluntary self-disclosures (VSDs) about parties’ own possible violations of the Export Administration Regulations (EAR); and (2) disclosures about possible EAR violations by someone else.

 

BIS specifically wants to further incentivize the submission of VSDs when industry or academia uncovers significant possible violations of the EAR. Note the modifier “significant” before “possible violations of the EAR.” BIS is not focused on increasing the number of minor or technical VSDs. BIS wants to let VSD filers know that when they identify multiple minor technical violations close in time, they can submit one overarching submission (as opposed to in multiple separate VSDs) to help streamline the process on their end and conserve resources. Rather, BIS is interested in increasing the number of VSDs it receives that disclose significant possible violations – the types of violations that reflect potential national security harm.

 

BIS has advised that when someone chooses to file a VSD, they get concrete benefits; however when someone affirmatively chooses not to file a VSD, they risk incurring concrete costs. In the past, BIS has consistently applied it as a mitigating factor when a VSD has been filed after a potential violation was uncovered. Going forward, BIS will also consistently apply this factor as an aggravating factor when a significant possible violation has been uncovered by a party’s export compliance program, but no VSD has been submitted.

 

https://www.bis.doc.gov/index.php/documents/enforcement/3262-vsd-policy-memo-04-18-2023/file

 

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The U.S. Department of Commerce, Bureau of Industry and Security (BIS) Added Certain Instruments For The Automated Synthesis Of Peptides As A Section 1758 Emerging And Foundational Technology

 

April 20, 2023: 88 Fed. Reg. 24341: The Bureau of Industry and Security (BIS), maintains controls on the export, reexport and transfer (in-country) of dual-use items and less sensitive military items pursuant to the Export Administration Regulations (EAR). Certain instruments for the automated synthesis of peptides (automated peptide synthesizers) have been identified by BIS as a Section 1758 emerging and foundational technology. In this rule, BIS proposes controls for these automated peptide synthesizers. BIS is seeking public comments on the proposed controls no later than May 22, 2023.

 

https://www.federalregister.gov/documents/2023/04/20/2023-08269/section-1758-technology-export-controls-on-instruments-for-the-automated-chemical-synthesis-of

 

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National Institute of Standards and Technology (NIST)

 

The National Institute of Standards and Technology (NIST) Outlines Its Vision And Strategy For A National Semiconductor Technology Center (NSTC)

 

April 25, 2023: National Institute of Standards and Technology (NIST) has released a paper outlining its vision and strategy for a National Semiconductor Technology Center (NSTC), a key component of the research and development program established by President Biden’s CHIPS and Science Act. CHIPS for America includes the CHIPS Program Office, responsible for semiconductor incentives, and the CHIPS Research and Development Office, responsible for R&D programs, that both sit within the NIST at the Department of Commerce. NIST promotes U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology in ways that enhance economic security and improve our quality of life. NIST is uniquely positioned to successfully administer the CHIPS for America program because of the bureau’s strong relationships with U.S. industries, its deep understanding of the semiconductor ecosystem, and its reputation as fair and trusted.

 

Chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.nist.gov/system/files/documents/2023/04/25/A%20Vision%20and%20Strategy%20for%20the%20NSTC.pdf

 

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U.S. Census Bureau

 

The U.S. Census Bureau Issued Tips On How To Address The Most Frequent AES Response Messages

 

April 19, 2023: To help take the appropriate action for the different AES Response Messages, here are some tips on how to address the most frequent messages that were generated in AES for this month.

Response Code: 505

Narrative:     Value of Goods Contains Non-Numerics

Severity:       Fatal

Reason:        The Value of Goods reported contains non-numerics or spaces.

Resolution:   The Value of Goods must be reported as numerics on the EEI.

Verify the Value of Goods, correct the shipment and resubmit.

Response Code:  808

Narrative:     Improbable Destination for Commodity

Severity:      Verify

Reason:        For the reported Schedule B/HTS Number, the Country of Destination Code is improbable.

Resolution: Certain products are highly unlikely to be exported to certain Countries of Destination based on historical data and industry input.  This might indicate either a keying error or misclassification of the product.

Verify the Schedule B/HTS Number and Country of Destination Code, correct the shipment and resubmit (if necessary).  If the information is verified correct as reported, no action is necessary.

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:

 

April 19, 2023: 88 Fed. Reg. 24258: The U.S. Department of State, acting under the authority of and in accordance with section 1(a)(ii)(B) of E.O. 13224 of September 23, 2001, as amended by E.O. 13268 of July 2, 2002, E.O. 13284 of January 23, 2003, and E.O. 13886 of September 9, 2019, Secretary of State Antony Blinken has determined that the person known as Sami Mahmud Mohammed al-Uraydi (also known as Sami Mahmoud Mohammad Eridi and Abu Mahmud al-Shami) is a leader of Hurras al-Din, a group whose property and interests in property are currently blocked pursuant to a determination by the Secretary of State pursuant to E.O. 13224 and should therefore be designated as a Specially Designated Global Terrorist.

 

https://www.federalregister.gov/documents/2023/04/19/2023-08210/designation-of-sami-mahmud-mohammed-al-uraydi-as-a-specially-designated-global-terrorist

 

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April 19, 2023: 88 Fed. Reg. 24258: The U.S. Department of State, 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 there is a sufficient factual basis to find that Qari Amjad uses the additional aliases Mufti Hazrat Deroji and Mufti Hazrat Ali. It was also concluded that Mufti Hazrat Deroji is the primary name for this person. Pursuant to Section 1(a)(ii) of E.O. 13224, The designation of Qari Amjad as a Specially Designated Global Terrorist is amended to include the following new aliases: Mufti Hazrat Deroji and Mufti Hazrat Ali.

 

https://www.federalregister.gov/documents/2023/04/19/2023-08208/amendment-of-the-designation-of-qari-amjad-and-other-aliases-as-a-specially-designated-global

 

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

 

April 12, 2023: 88 Fed. Reg. 23332: The Department of Commerce, Bureau of Industry and Security (BIS) added the following twenty eight entities to the Entity List:

 

Armenia:

• Tako LLC.

 

China:

• 3HC Semiconductors (HK) Co., Ltd.;
• Allparts Trading Co., Ltd.;
• Avtex Semiconductor Limited;
• ETC Electronics Ltd.;
• Leadway Technology Limited;
• Maxtronic International Co., Ltd.;
• Newsuntech Electronics Limited;
• STK Electronics (HK) Co., Ltd.;
• Wynn Electronics Co. Ltd.;
• Xinnlinx Electronics Pte Ltd.;
• Yishang Network (Shenzhen) Co., Ltd.; and
• Yongli Electronic Components (Shenzhen) Co., Ltd.

 

Malta:

• I JET GLOBAL DMCC.

 

Russia:

• Art Logistics LLC;
• ETC Electronics;
• GFK Logistics LLC;
• Novastream Limited;
• OOO Vest-Ost;
• Promelektronika;
• SKS Elektron Broker LLC;
• TD Promelektronika LLC;
• Trust Logistics; and
• Trust Logistics Group LLC.

 

Singapore:

• Xinnlinx Electronics Pte Ltd.

 

Spain:

• I JET GLOBAL DMCC.

 

Syria:

• I JET GLOBAL DMCC.

 

Turkey:

• Dexias Industrial Products and Trade Limited Company.

 

United Arab Emirates:

• I JET GLOBAL DMCC; and
• Success Aviation Services FZC.

 

Uzbekistan:

• Alfa Beta Creative LLC; and
• GFK Logistic Asia LLC.

 

https://www.bis.doc.gov/index.php/documents/2020-virtual-conference/3263-88-fr-23332/file

 

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April 14, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has renewed for 180 days the Temporary Denial Order denying the export privileges of URAL Airlines JSC of Russia.

 

Federal Register :: URAL Airlines JSC, Utrenniy Lane 1-g, Yekaterinburg, Russia 620025; Order Renewing Temporary Denial of Export Privileges

 

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April 14, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has renewed for 180 days the Temporary Denial Order denying the export privileges of Aviastar-TU of Russia.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1496-e2835/file

 

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

 

April 4, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two Lebanese brothers — Raymond Zina Rahme and Teddy Zina Rahme — who used their wealth, power, and influence to engage in corrupt practices that contribute to the breakdown of the rule of law in Lebanon, thereby undermining Lebanon’s democratic processes to the detriment of the Lebanese people. At a time when the Lebanese people face significant economic distress, a dire energy crisis, and unprecedented political dysfunction, the Rahme brothers have used their business empire and political connections to enrich themselves at the expense of their fellow citizens.

 

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

 

• Rahme, Raymond Zina of Lebanon; and
• Rahme, Teddy Zina of Lebanon.

 

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

 

• ZR ENERGY DMCC of the United Arab Emirates;
• ZR GROUP SAL HOLDING of Lebanon; and
• ZR LOGISTICS SAL of Lebanon.

 

https://home.treasury.gov/news/press-releases/jy1384 and https://ofac.treasury.gov/recent-actions/20230404

 

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April 5, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the former President of the Haitian Chamber of Deputies, Gary Bodeau (Bodeau), pursuant to Executive Order (E.O.) 13818, for his extensive involvement in corruption in Haiti. E.O. 13818 builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world.

 

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

 

• BODEAU, Gary of Haiti.

 

OFAC also took action to designate Genesis Market, one of the world’s largest illicit marketplaces, for its part in the theft and sale of device credentials and related sensitive information. Genesis Market gains unauthorized access to victim devices and offers stolen data, including usernames and passwords, for sale. This action was coordinated with the U.S. Department of Justice (DOJ) and international partners from a dozen countries, who are taking law enforcement actions against Genesis Market users across multiple jurisdictions and seizing the website domains associated with Genesis Market.

 

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

 

• GENESIS MARKET of Russia.

 

https://home.treasury.gov/news/press-releases/jy1389 and https://ofac.treasury.gov/recent-actions/20230405 and https://home.treasury.gov/news/press-releases/jy1388

 

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April 11, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) updated its Specially Designated Nationals list to add one (1) individual for counter terrorism purposes:

 

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

 

• AL-URAYDI, Sami Mahmud Mohammed of Jordan.

 

https://ofac.treasury.gov/recent-actions/20230411

 

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April 12, 2023:  the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is further curbing Russia’s access to the international financial system through facilitators and their businesses. The United States, in coordination with the United Kingdom, is targeting the facilitation network of Alisher Usmanov, who is subject to sanctions in multiple jurisdictions. This action also includes designations to reinforce existing measures and further disrupt Russia’s importation of critical technologies used in its war against Ukraine. In total, OFAC is designating 25 individuals and 29 entities with touchpoints in 20 jurisdictions. The U.S. Department of State is concurrently designating several entities operating in the defense sector of the Russian Federation economy and entities supporting Russia’s war against Ukraine, as well as additional entities associated with Russia’s State Atomic Energy Corporation (Rosatom). For more information on these State actions, see the fact sheet at the website below. Additionally, the U.S. Department of Commerce will take concurrent action to add 28 entities to its Entity List.

 

OFAC issued the following Russia-related General Licenses:

 

General License 62: “Authorizing the Wind Down of Transactions Involving Holdingovaya Kompaniya Metalloinvest AO, MegaFon PAO, Limited Liability Company USM Telecom, or Akkermann Cement Ca Limited Liability Company”. This general license authorizes all transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of any transaction involving Holdingovaya Kompaniya Metalloinvest AO (Metalloinvest), Megafon PAO (Megafon), Limited Liability Company USM Telecom (USM Telecom), Akkermann Cement Ca Limited Liability Company (Akkermann), or any entity in which Metalloinvest, Megafon, USM Telecom, or Akkermann owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern daylight time, July 11, 2023, provided that any payment to a blocked person must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR). (b) 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 RuHSR, including transactions involving any person blocked pursuant to the RuHSR other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.

 

https://ofac.treasury.gov/media/931606/download?inline

 

General License 63: “Authorizing Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Holdingovaya Kompaniya Metalloinvest AO”. This general license authorizes all transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the divestment or transfer, or the facilitation of the divestment or transfer, of debt or equity of Holdingovaya Kompaniya Metalloinvest AO (Metalloinvest), or any entity in which Metalloinvest owns, directly or indirectly, a 50 percent or greater interest purchased prior to April 12, 2023 (“covered debt or equity”), to a non-U.S. person are authorized through 12:01 a.m. eastern daylight time, July 11, 2023. This general license also authorizes all transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to facilitating, clearing, and settling trades of covered debt or equity that were placed prior to 4:00 p.m. eastern daylight time, April 12, 2023 are authorized through 12:01 a.m. eastern daylight time, July 11, 2023. All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the wind down of derivative contracts entered into prior to 4:00 p.m. eastern daylight time, April 12, 2023 that (i) include a blocked person described above in this general license as a counterparty or (ii) are linked to covered debt or equity are authorized through 12:01 a.m. eastern daylight time, July 11, 2023, provided that any payments to a blocked person are made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).

 

This general license does not authorize:

(1) U.S. persons to sell, or to facilitate the sale of, covered debt or equity to, directly or indirectly, any person whose property and interests in property are blocked; or

(2) U.S. persons to purchase or invest in, or to facilitate the purchase of or investment in, directly or indirectly, covered debt or equity, other than purchases of or investments in covered debt or equity ordinarily incident and necessary to the divestment or transfer of covered debt or equity as described in above in this general license.

 

This general license also 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 RuHSR, including transactions involving any person blocked pursuant to the RuHSR other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.

 

https://ofac.treasury.gov/media/931611/download?inline

 

General License 64: “Authorizing Certain Transactions Involving Kommersant”. This general license authorizes all transactions prohibited by Executive Order (E.O.) 14024 involving Joint-Stock Company Kommersant, or any entity in which Joint-Stock Company Kommersant owns, directly or indirectly, a 50 percent or greater interest, that are ordinarily incident and necessary to the operations of the newspaper Kommersant are authorized.

 

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 above in this general license, unless separately authorized.

 

https://ofac.treasury.gov/media/931616/download?inline

 

General License 65: “Authorizing Transactions Related to Telecommunications and Certain Internet-based Communications Involving MegaFon PAO or Digital Invest Limited Liability Company.” This general license authorizes all transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR) that are ordinarily incident and necessary to the receipt or transmission of telecommunications involving Megafon PAO (Megafon) or Digital Invest Limited Liability Company (Digital Invest), or any entity in which Megafon or Digital Invest owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest (collectively, “Covered Entities”), and involving Tajikistan or Uzbekistan, are authorized. The exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, wherever located, to the Covered Entities 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.

 

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 (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;

(3) Any transactions prohibited by E.O. 14066 or E.O. 14068; or

(4) Any transactions otherwise prohibited by the RuHSR, including transactions involving any person blocked pursuant to the RuHSR other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.

 

https://ofac.treasury.gov/media/931621/download?inline

 

OFAC also revoked Russia-related General License 15, on April 12, 2023, “Authorizing Transactions Involving Certain Blocked Entities Owned by Alisher Burhanovich Usmanov.”

 

https://ofac.treasury.gov/media/918901/download?inline

 

OFAC issued Frequently Asked Question:

 

Question 1122: Certain transactions related to telecommunications and certain internet-based communications are already authorized by Russia-related General License (GL) 25C.  What additional transactions does Russia-related GL 65 authorize?

 

Answer: The United States generally supports the free flow of information globally as facilitated by telecommunications and certain internet-based communications.  Accordingly, GL 25C authorizes — with certain exceptions and exclusions — (i) 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) and (ii) the exportation or reexportation, sale, or supply from the United States or by U.S. persons, wherever located, to the Russian Federation of services, software, hardware, or technology that are incident to the exchange of communications over the internet and that are prohibited by the RuHSR (see FAQ 1040).

 

However, certain transactions related to Megafon PAO (Megafon) or Limited Liability Company Digital Invest (Digital Invest) — which were designated by the Department of State on April 12, 2023 pursuant to Executive Order 14024 — or any entity in which Megafon or Digital Invest owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest (collectively, “Covered Entities”), may not involve the Russian Federation, and thus, may not be authorized by GL 25C.  To ensure certain transactions related to telecommunications and internet-based communications involving the Covered Entities and Tajikistan or Uzbekistan can continue, OFAC issued GL 65.  GL 65 authorizes — with certain exceptions and exclusions — (i) all transactions prohibited by the RuHSR that are ordinarily incident and necessary to the receipt or transmission of telecommunications involving the Covered Entities, and involving Tajikistan or Uzbekistan or (ii) the exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, wherever located, to the Covered Entities of services, software, hardware, or technology incident to the exchange of communications over the internet that is prohibited by the RuHSR.  Please note that GL 65 does not relieve persons from compliance with other Federal laws, such as the export licensing requirements maintained by the Department of Commerce’s Bureau of Industry and Security.

 

https://ofac.treasury.gov/faqs/1122

 

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

 

• Attikouris, Kyriakos of Cyprus;
• Bashkirov, Aleksei Vladimirovich of Russia;
• Ditrikh, Yevgeniy Ivanovich of Russia;
• Efendiev, Nazim Tofik Ogly of Russia;
• Firov, Alim Khazkhismelovich of Russia;
• Georgiou, Marilena of Cyprus;
• Giannakou, Kostas of Cyprus;
• Giger, Markus Jakob of Switzerland and the United Kingdom;
• Grigoriev, Grigoriy Igorevich of Russia;
• Ismailova, Gulbakhor Burkhanovna of Uzbekistan;
• Kamperi, Kyriaki Demetriou of Cyprus and the United Kingdom;
• Kazikaev, Valery Dzhekovich of Italy, Slovakia and Russia;
• Khusnullin, Marat Shakirzyanovich of Russia;
• Kocharov, Vakhtang Ernstovich of Azerbaijan, Cyprus, Russia and the United Arab Emirates;
• Kocharova, Gulnoz Zunnurovna of Russia, Cyprus, Switzerland and Uzbekistan;
• Kosov, Nikolay Nikolayevich of Hungary;
• Laszloczki, Imre, of Hungary;
• Narzieva, Nasiba Erkinovna of Uzbekistan;
• Narzieva, Saodat Burxanovna of Uzbekistan;
• Nasirkhodjaev, Shokhrukh Olimdjonovich of the United Arab Emirates and Uzbekistan;
• Oehri, Roland of Liechtenstein, Austria and Switzerland;
• Ostrowsky, Alexander of Austria and Switzerland;
• Pakermanov, Evgeny Markovich of Russia;
• Potapov, Georgy Nugzarovich of Hungary and Russia;
• Serghides, Demetrios of Cyprus, Monaco and Italy;
• Skoch, Varvara Andreevna of Russia and the United Kingdom;
• Skoch, Vladimir Nikitovich of Ukraine and Russia;
• Streshinskaya, Natalia Alexeevna of Cyprus, France and Russia;
• Streshinskiy, Vladimir Yakovlevich of Russia, Switzerland and Ukraine;
• Vakanas, Antonis Kyriakou of Cyprus and the United Kingdom;
• Vassiliades, Anna Mariaof Cyrprus and the United Kingdom;
• Vassiliades, Christodoulos Georgiou of Cyprus and the United Kingdom;
• Vassiliades, Giorgos of Cyprus and the United Kingdom; and
• Viner, Natan Adadievich of Russia.

 

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

 

• Aeromotus Unmanned Aerial Vehicles Trading LLC of the United Arab Emirates;
• AF Telecom Holding Limited Liability Company of Russia;
• Akhangarancement Joint Stock Company of Uzbekistan;
• Akkerman Cement OOO of Russia;
• Akkermann Cement CA Limited Liability Company of Uzbekistan;
• Alayne Investments Limited of Cyprus;
• All Russian Children And Youth Military Patriotic Public Movement Youth Army of Russia;
• Almenor Holdings Limited of Cyprus;
• Artvin Maritime And Trade Limited Company of Turkey;
• AZU International Bilgi Teknolojileri Ve Dis Ticaret Limited Sirketi of Turkey;
• China Head Aerospace Technology Company of China;
• Christodoulos G. Vassiliades & Co. LLC of Cyprus;
• City Development Limited Liability Company of Russia;
• Dexias International Products And Trade Limited Company of Turkey;
• Dexias Limited Liability Company of Russia;
• Digital Invest Limited Liability Company of Russia;
• Federal Scientific And Production Center Mv Protsenko Start Production Association JSC of Russia;
• Fedorovskoe OOO of Russia;
• GKR Nedvizhimost OOO of Russia;
• GKR OOO of Russia;
• GKR UK OOO of Russia;
• Gruppa Rodina OOO of Russia;
• Hamriyah Steel Free Zone Company of the United Arab Emirates;
• Headey Investments Limited of Cyprus;
• Hightrail LTD of Cyprus;
• Holdingovaya Kompaniya Metalloinvest AO of Russia;
• Hulm Al Sahra Electric Devices Trading of the United Arab Emirates;
• International Digital Technology Centre Limited Liability Company of Russia;
• International Investment Bank of Hungary;
• Investitsionnaya Gruppa Partnery OOO of Russia;
• Ionics Nominees Limited of Cyprus;
• Ironhill Holdings Limited of Cyprus;
• Joint Stock Company IIB Capital of Russia;
• Joint Stock Company Vladimir Production Amalgamation Tochmash of Russia;
• JSC Nauchno Issledovatelsky I Konstruktorsky Institut Montazhnoy Technology Atomstroy of Russia;
• King-Pai Technology HK CO., Limited of China;
• Klaret Aviation Limited of the Cayman Islands;
• Kovrov Mechanical Plant PJSC of Russia;
• KTH Group SPOL SRO of Slovakia;
• Lebedinskiy Gorno Obogatitelniy Kombinat Joint Stock Company of Russia;
• Ledra Nominees Limited of Cyprus;
• Ledra Trustee Services Limited of Cyprus;
• Ledra Trustees Limited of Cyprus;
• Limited Liability Company Forum of Russia;
• Limited Liability Company Land Technologies of Russia;
• Limited Liability Company NDN of Russia;
• Limited Liability Company Novelco of Russia;
• Limited Liability Company Novelco Global Forwarding of Russia;
• Limited Liability Company Novogorsk Real Estate of Russia;
• Limited Liability Company Translineinvest of Russia;
• Limited Liability Company USM Telecom of Russia;
• Management Company Metalloinvest LLC of Russia;
• Masterskill Investments Limited of Cyprus;
• Megafon PAO of Russia;
• Metalloinvest Trading AG of Switzerland;
• Mikhailovskiy Gorno Obogatitelniy Kombinat Joint Stock Company of Russia;
• Miramonte Investments Limited of Cyprus;
• Navis Marine Limited of the Cayman Islands;
• Nexign Joint Stock Company of Russia;
• Obshchestvo S Ogranichennoi Otvetstvennostyu Kholdingovaya Kompaniya Yuesem of Russia;
• Omnia Antibes of France;
• Omnia Services Cyprus LTD of Cyprus;
• Onefactor Limited Liability Company of Russia;
• Oskol Electrometallurgical Plant AO of Russia;
• Patriot Private Military Company of Russia;
• Platifino Limited of the Isle of Man;
• Pomerol Capital SA of Switzerland;
• Rodina Stroi Grupp OOO of Russia;
• Rusatom Overseas Joint Stock Company of Russia;
• Salda Management Maritime And Trade Limited Company of Turkey;
• Savoler Development Limited of Cyprus;
• Sequoia Treuhand Trust REG of Liechtenstein;
• Smart Trading Transportation Industry And Trade Limited Company of Turkey;
• Sommen Secretarial Services Limited of Cyprus;
• State Budgetary Educational Institution Of Additional Education Of The Republic Of Crimea Crimea Patriot Center of Ukraine;
• Storm Technologies Limited Liability Company of Russia;
• The Sister Trust of Switzerland and Bermuda;
• Udokan Copper LLC of Russia;
• USM Cement LLC of Russia;
• USM City Limited Liability Company of Russia;
• USM Gold Limited Liability Company of Russia;
• USM Metalloinvest Limited Liability Company of Russia;
• USM Urban Mining Limited Liability Company of Russia;
• U-TERRA LLC of Russia;
• Vassiliades & CO UK Limited of the United Kingdom;
• Vassiliades & Co. Malta Limited of Malta;
• Waldau Investments Limited of Russia;
• WCP Management Company LTD of the United Arab Emirates;
• Windfel Properties Limited of Cyprus;
• Yuesem Markirovka OOO of Russia; and
• Zincum LLC of Russia.

 

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

 

• Alara (TCA7253) Bulk Carrier Turkey flag; Vessel Registration Identification IMO 9741724;
• Alexandr Deev (UBSX6) Passenger Russia flag; Vessel Registration Identification IMO 9940186;
• Alpha Helios (UBSV3) General Cargo Russia flag; Vessel Registration Identification IMO 9924340;
• Alpha Hermes (UBDW5) General Cargo Russia flag; Vessel Registration Identification IMO 9924352;
• Avrora Altair (UBYS) Oil Products Tanker Russia flag; Vessel Registration Identification IMO 9300348;
• Avrora Regul (UGGU) Oil Products Tanker Russia flag; Vessel Registration Identification IMO 9300350;
• Avrora Sirius (UHSW) Oil Products Tanker Russia flag; Vessel Registration Identification IMO 9313589;
• Baltiysk (UHMA) Roll-on Roll-off Russia flag; Vessel Registration Identification IMO 8318130;
• Gennady Egorov (UBGX4) General Cargo Russia flag; Vessel Registration Identification IMO 9945124;
• Ipsala (TCA7254) Bulk Carrier Turkey flag; Vessel Registration Identification IMO 9759666;
• Leonid Pestrikov (UBJV2) General Cargo Russia flag; Vessel Registration Identification IMO 9922122;
• Navis 6 (UAQK) General Cargo Russia flag; Vessel Registration Identification IMO 9868807;
• Nikolai Leonov (UBLV9) General Cargo Russia flag; Vessel Registration Identification IMO 9922134;
• Nikolay Anishchenkov General Cargo Russia flag; Vessel Registration Identification IMO 9942392;
• Petrotrans 5902 (UBXT9) General Cargo Russia flag; Vessel Registration Identification IMO 9900514;
• ULA (TCA7252) Bulk Carrier Turkey flag; Vessel Registration Identification IMO 9780940;
• Victor Andryukhin (UBIV4) General Cargo Russia flag; Vessel Registration Identification IMO 9922110;
• Vladimir Latyshev (UBEV8) General Cargo Russia flag; Vessel Registration Identification IMO 9921996; and
• Vyacheslav Arshinov (UBGX2) General Cargo Russia flag; Vessel Registration Identification IMO 9945136.

 

https://www.state.gov/further-curbing-russias-efforts-to-evade-sanctions-and-perpetuate-its-war-against-ukraine/ and https://home.treasury.gov/news/press-releases/jy1402 and https://ofac.treasury.gov/recent-actions/20230412

 

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April 14, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two entities in the People’s Republic of China (PRC) and five individuals, based in the PRC and Guatemala, for supplying precursor chemicals to drug cartels in Mexico for the production of illicit fentanyl intended for U.S. markets.

 

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

 

• Rubio Zea, Ana Gabriela of Guatemala;
• Wang, Hongfei of China;
• Wu, Yaqin of China;
• Wu, Yonghao of China; and
• Yao, Huatao of China.

 

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

• Suzhou Xiaoli Pharmatech CO., LTD of China; and
• Wuhan Shuokang Biological Technology CO., LTD of China.

 

U.S. Sanctions Suppliers of Precursor Chemicals for Fentanyl Production | U.S. Department of the Treasury and Counter Narcotics Designations; Russia-related Designations Updates | Office of Foreign Assets Control (treasury.gov)

 

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April 18, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated a vast international money laundering and sanctions evasion network of 52 individuals and entities in Lebanon, the United Arab Emirates, South Africa, Angola, Côte d’Ivoire, the Democratic Republic of the Congo, Belgium, the United Kingdom, and Hong Kong. This network facilitated the payment, shipment, and delivery of cash, diamonds, precious gems, art, and luxury goods for the benefit of Hizballah financier and Specially Designated Global Terrorist Nazem Said Ahmad, who was designated on December 13, 2019, for providing material support to Hizballah. The network designated includes dozens of individuals and their associated companies involved in assisting Nazem Said Ahmad in evading U.S. sanctions to maintain his ability to finance Hizballah and his luxurious lifestyle. This designation is a part of a coordinated action with the Department of Homeland Security, the Department of State’s Rewards for Justice program, and the United Kingdom.

 

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

 

• Ahmad, Firas Nazem of South Africa and Belgium;
• Ahmad, Hind Nazem of France and Belgium;
• Baker, Rami Yaacoub of Lebanon and Belgium;
• Baker, Rima Yaacoub of Lebanon and Belgium;
• El Riz, Daoud of France and the Democratic Republic of the Congo;
• Francisco, Maricel Factura of the Philippines;
• Ghaddar, Ibrahim Fadel of the United Arab Emirates;
• Hijazi, Mohamad Hussein of the United Arab Emirates;
• Ismail, Mohamad Hassan of Lebanon;
• Khawaja, Mohamad of the United Arab Emirates and Lebanon;
• Mossalem, Ali of Lebanon;
• Murad, Bassem of Belgium;
• Nachar, Ali of Lebanon;
• Nachar, Hussein Moussa of Lebanon and the United Kingdom;
• Nagarajan, Sundar of Belgium and India;
• Nasser, Rim of Lebanon;
• Osseiran, Ali of Lebanon and the United Arab Emirates;
• Saad, Fadi Abbas of Lebanon;
• Sader, Fadi of China and Lebanon; and
• Wehbe, Mohamad of Lebanon and South Africa.

 

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

 

• 76 Benmore Garden Trust of South Africa;
• Amana Diam DMCC of the United Arab Emirates;
• Artual Gallery of Lebanon;
• Associates Of Partners SAL Off-Shore of Lebanon;
• Best Diamond House DMCC of the United Arab Emirates;
• Bexley Way General Trading L.L.C. of the United Arab Emirates;
• Collecting Bee SRL of Romania;
• Debbiye 383 SAL of Lebanon;
• Dida of the Cote d Ivoire;
• Diotrix Proprietary LTD of South Africa;
• Fadico H.K. Limited of China;
• Fadico S A CC of South Africa;
• G and S Diamond FZE of the United Arab Emirates;
• Gavia Tradings PTY LTD of South Africa;
• Helics GEMB of Belgium;
• Highrise Property Investments PTY LTD of South Africa;
• House Of Art Limited of China;
• Idiams DMCC of the United Arab Emirates;
• Ismail General Trading of Lebanon;
• Joud General Trading of Lebanon;
• Mega Gems PTY LTD of South Africa;
• MSD Capital PTY LTD of South Africa;
• MSD DMCC of the United Arab Emirates;
• MSD SPRL Diamond Trading of South Africa;
• Murad En Sons Diamonds of Belgium;
• Oriental Dynasty Limited of China;
• Oxfocento Proprietary LTD of South Africa;
• Park Ventures SAL of Lebanon;
• Thula Uzwe Trading of South Africa;
• Tia Trading 2013 LTD OOD of Bulgaria;
• United Investment Group SAL of Lebanon; and
• White Star DMCC of the United Arab Emirates.

 

https://home.treasury.gov/news/press-releases/jy1422 and https://ofac.treasury.gov/recent-actions/20230418

 

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April 19, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated one individual and six entities in a sanctions evasion network that has facilitated Iran’s procurement of electronic components for its destabilizing military programs, including those used in unmanned aerial vehicles (UAVs). Particularly, this action targets the head of U.S.-designated Iran’s Pardazan System Namad Arman (PASNA), and the entity’s Iran-, Malaysia-, Hong Kong-, and PRC-based front companies and suppliers that have enabled PASNA’s procurement of goods and technology. This action also updates the OFAC Specially Designated Nationals and Blocked Persons List (SDN List) entry for PASNA to include an alias and the names of two fictitious companies used by PASNA in its procurement efforts.

 

Iran’s proliferation of UAVs and other weapons continues to destabilize the Middle East region and beyond. Since September 2022, OFAC has issued several rounds of designations targeting Iran’s UAV and missile programs, to include elements involved in production, procurement, and proliferation.

 

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

 

• Khoshghadam, Mehdi of Malaysia and Iran.

 

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

 

• Amvaj Nilgoun Bushehr Co., of Iran;
• Arttronix International Hk Limited of China;
• Jotrin Electronics Limited of China;
• Pasna International Group Snd. Bhd of Malaysia;
• Vohom Technology Hk Co., Limited of China; and
• Yinke Hk Electronics Company Limited of China.

 

OFAC also issued Venezuela-related General License 5K, “Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After July 20, 2023.”

 

Venezuela-related General License 5K: On or after July 20, 2023, all transactions related to, the provision of financing for, and other dealings in the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond that would be prohibited by subsection l(a)(iii) of Executive Order (E.O.) 13835 of May 21, 2018, as amended by E.O. 13857 of January 25, 2019, and incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized. This general license does not authorize any transactions or activities otherwise prohibited by the VSR, or any other part of 31 CFR chapter V. Effective April 19, 2023, General License No. 5J, dated January 17, 2023, is replaced and superseded in its entirety by this General License No. 5K.

 

OFAC amended the following Venezuela-related Frequently Asked Question (595).

 

Question 595: What does Venezuela-related General License 5K authorize?

 

Answer: The President issued Executive Order (E.O.) 13835 on May 21, 2018. Subsection 1(a)(iii) of E.O. 13835 prohibits U.S. persons from engaging in transactions related to the sale, transfer, assignment, or pledging as collateral by the Government of Venezuela (GOV) of any equity interest in an entity owned 50 percent or more by the GOV. One effect of subsection 1(a)(iii) is to require authorization before U.S. persons may engage in certain transactions regarding any equity interest in an entity owned 50 percent or more by the GOV. Subsequent to the issuance of E.O. 13835, OFAC received inquiries about how and whether subsection 1(a)(iii) of E.O. 13835 could affect the ability to enforce bondholder rights to the CITGO shares serving as collateral for the Petróleos de Venezuela, S.A. (PdVSA) 2020 8.5 percent bond. OFAC issued General License (GL) 5 on July 19, 2018, which removed E.O. 13835 as an obstacle to holders of the PdVSA 2020 8.5 percent bond gaining access to their collateral.

 

General License 5 was replaced and superseded by General License 5A on October 24, 2019 with a delay in the effectiveness of the authorization in the general license. Since that date, OFAC has extended the delay in effectiveness a number of times. Most recently, OFAC issued General License 5K on April 19, 2023, which further delays the effectiveness of the authorization in GL 5 until July 20, 2023. Between October 24, 2019 and July 20, 2023 (the date the authorization in General License 5K becomes effective), there is no authorization in effect that licenses against subsection 1(a)(iii) of E.O. 13835 applicable to the holders of the PdVSA 2020 8.5 percent bond. As a result, during such period, transactions related to the sale or transfer of CITGO shares in connection with the PdVSA 2020 8.5 percent bond are prohibited, unless specifically authorized by OFAC.

 

To the extent an agreement may be reached on proposals to restructure or refinance payments due to the holders of the PdVSA 2020 8.5 percent bond, additional licensing requirements may apply. OFAC would encourage parties to apply for a specific license and would have a favorable licensing policy toward such an agreement.

 

https://home.treasury.gov/news/press-releases/jy1423 and https://ofac.treasury.gov/recent-actions/20230419 and https://ofac.treasury.gov/media/931646/download?inline and https://ofac.treasury.gov/faqs/595

 

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April 19, 2023:  The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated three Nicaraguan judicial officials involved in human rights abuses conducted by the regime of Nicaraguan President Daniel Ortega and the broader oppression of Nicaraguan citizens who oppose his government.

 

The three individuals designated are judges or presiding magistrates in the Managua District Court of Appeals, the Second District Trial Court in Managua, and the First Criminal Appeals Court of Managua. These courts affirmed decisions that revoked the citizenship of more than 300 Nicaraguan citizens.

 

The Managua District Court of Appeals declared 222 Nicaraguan citizens traitors of the state and stripped them of their citizenship. An additional 94 individuals had their citizenship revoked and were declared “fugitives of the law.” One of the judges designated issued a sentencing order imposing penalties on a prominent Nicaraguan Catholic bishop who was given the opportunity to depart Nicaragua along with the 222 departing individuals but refused to go into exile. The bishop was sentenced to over 26 years in prison, stripped of his citizenship, and declared a traitor for being critical of the regime. These actions reflect the regime’s disregard for human rights in Nicaragua.

 

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

 

• Rodriguez Mejia, Ernesto Leonel of Nicaragua;
• Rothschuh Andino, Octavio Ernesto of Nicaragua; and
• Tardencilla Rodriguez, Nadia Camila of Nicaragua.

 

https://home.treasury.gov/news/press-releases/jy1424

 

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April 24, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned four senior officials of the Law Enforcement Forces of Iran (LEF) and Islamic Revolutionary Guard Corps (IRGC), the primary Iranian security forces responsible for the regime’s brutal suppression of the protests that broke out in September 2022 following the arrest and death of Mahsa Jina Amini while in the custody of Iran’s Morality Police. OFAC is also taking action against the new Secretary of Iran’s Supreme Council of Cyberspace (SCC), the authority responsible for Iran’s cyberspace policy and blockage of popular websites. This action is being taken in coordination with the United Kingdom, which is also imposing similar sanctions on senior Iranian security officials.

 

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

 

• Absalan, Parviz of Iran;
• Adinehvand, Salman of Iran;
• Aghamiri, Seyyed Mohammad Amin of Iran;
• Cheng, Hung Man of China;
• Goshtasbi, Amanollah of Iran;
• Seyedoshohada, Ahmad Khadem of Iran;
• Sim, Hyon Sop of China; and
• Wu, Huihui of China.

 

https://home.treasury.gov/news/press-releases/jy1436 and https://ofac.treasury.gov/recent-actions/20230424

 

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April 27, 2023: 88 Fed. Reg. 25491: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) published amendment updates to the Iranian Transactions and Sanctions Regulations, 31 CFR part 560, and the Western Balkans Stabilization Regulations, 31 part CFR 588, to correct typographical errors, update cross-references, and publish a general license that had been omitted from a prior update.

 

https://ofac.treasury.gov/media/931671/download?inline

 

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April 27, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned four senior officials of Iran’s Islamic Revolutionary Guard Corps Intelligence Organization (IRGC-IO), an entity that is being concurrently designated by the State Department for its role in the hostage-taking or wrongful detention of U.S. nationals in Iran. The IRGC-IO frequently holds and interrogates detainees in the notorious Evin Prison, in addition to the IRGC-IO’s direct role in the repression of protests and arrest of dissidents, including dual nationals. This action is the first under Executive Order (E.O.) 14078, “Bolstering Efforts to Bring Hostages and Wrongfully Detained U.S. Nationals Home,” which reaffirms the fundamental commitment of the U.S. government to bring home those U.S. nationals held hostage and wrongfully detained abroad.

 

Concurrent with this action, OFAC implemented the Department of State’s designation of Russia’s Federal Security Service, in addition to the IRGC-IO, for their involvement in the wrongful detention of U.S. nationals abroad.

 

OFAC also sanctioned Eduardo Pardo Espino, who is a fugitive from a U.S. drug trafficking charge, along with six other individuals and 19 Mexican companies.  These individuals and companies are linked, directly or indirectly, to timeshare fraud led by the Cartel de Jalisco Nueva Generacion (CJNG), which is a violent Mexico-based organization that traffics a significant proportion of the illicit fentanyl and other deadly drugs that enter the United States. OFAC coordinated this action with the Government of Mexico and U.S. Government partners.

 

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

 

• Bazghandi, Rouhollah of Iran;
• Gomez Arias, Luis Lorenzo of Mexico;
• Gonzalez Villegas, Ian Jassiel of Mexico;
• Lelo De Larrea Ventimilla, Horacio Edmundo of Mexico;
• Luquin Rodriguez, Brayan Moises of Mexico;
• Mohagheghi, Mohammad Hassan of Iran;
• Padilla Zarate, Clemente of Mexico;
• Pardo Espino, Eduardo of Mexico;
• Rivas Sanchez, Pedro of Mexico; and
• Sayyari, Mohammad Mehdi of Iran.

 

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

 

• Aka Integral Services, S. De R.L. DE C.V., of Mexico;
• Asesores Y Promotores ACG, S.A. DE C.V., of Mexico;
• Atlantic Diamond Group, S.A. DE C.V., of Mexico;
• Besthings, S.A. DE C.V., of Mexico;
• Bussines Corporativo T Service Inc, S.A. DE C.V., of Mexico;
• Constructores B2, S.A. DE C.V., of Mexico;
• Corporativo Bussines Mx Insider, S.A. DE C.V., of Mexico;
• Corporativo Soporte Legal Recovery, S.A. DE C.V., of Mexico;
• Envigh, S. DE R.L. DE C.V., of Mexico;
• Islamic Revolutionary Guard Corps Intelligence Organization (A.K.A. Irgc Intelligence Organization; of Iran;
• Magniservia, S.A. DE C.V., of Mexico;
• NT Insurance Corporativo, S.A. DE C.V., of Mexico;
• Produzioni Peca, S. DE R.L. DE C.V., of Mexico;
• Resguardo De Valores Y Servicios Integrales RSVI, S.A. DE C.V., of Mexico;
• RH Litman, S. DE R.L. DE C.V., of Mexico;
• Servicios Administrativos Dantwoo, S.A. DE C.V., of Mexico;
• Sociedad Spa Peninsula, S. DE R.L. DE C.V., of Mexico;
• Suncan Mexico, S. DE R.L. DE C.V., of Mexico;
• T Service Bussines Inc, S.A. DE C.V., of Mexico; and
• Trados Comercio, S. DE R.L. DE C.V., of Mexico.

 

https://home.treasury.gov/news/press-releases/jy1444 and https://home.treasury.gov/news/press-releases/jy1443 and https://ofac.treasury.gov/recent-actions/20230427

 

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April 27, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Cyber-related General License 1C, “Authorizing Certain Transactions with the Federal Security Service.”  OFAC is also amended three Cyber-related Frequently Asked Questions (501, 502, 503).

 

Cyber-related General License 1C: All transactions prohibited by the Cyber-Related Sanctions Regulations, 31 CFR part 578 (CRSR), the Weapons of Mass Destruction Proliferators Sanctions Regulations, 31 CFR part 544 (WMDPSR), or Executive Order (E.O.) 14078, involving the Federal Security Service (a.k.a. Federalnaya Sluzhba Bezopasnosti) (a.k.a. FSB) are authorized, provided that such transactions are ordinarily incident and necessary to:

(1) Requesting, receiving, utilizing, paying for, or dealing in licenses, permits, certifications, or notifications issued or registered by the Federal Security Service for the importation, distribution, or use of information technology products in the Russian Federation, provided that

(i) the exportation, reexportation, or provision of any goods or technology that are subject to the Export Administration Regulations, 15 CFR parts 730 through 774, is licensed or otherwise authorized by the Department of Commerce; and

(ii) the payment of any fees to the Federal Security Service for such licenses, permits, certifications, or notifications does not exceed $5,000 in any calendar year.

 

Except for the limited purposes described above it does not authorize the exportation, reexportation, or provision of goods or technology to or on behalf of the Federal Security Service.

 

(2) Complying with law enforcement or administrative actions or investigations involving the Federal Security Service; or

 

(3) Complying with rules and regulations administered by the Federal Security Service.

 

Question 501: What does General License 1C (GL 1C), “Authorizing Certain Transactions with the Federal Security Service,” authorize?

 

Answer: GL 1C authorizes transactions with the Federal Security Service (a.k.a. Federalnaya Sluzhba Bezopasnosti) (a.k.a. FSB) that are ordinarily incident and necessary to requesting, receiving, utilizing, paying for, or dealing in certain licenses and authorizations for the importation, distribution, or use of certain information technology products in the Russian Federation.  It also authorizes transactions ordinarily incident and necessary to compliance with rules and regulations administered by, and certain actions or investigations involving, the Federal Security Service.

This general license does not authorize U.S. persons to engage in transactions with the Federal Security Service, except for the limited purposes described above, nor does it authorize the exportation, reexportation, sale or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any goods, services, or technology to the so-called “Donetsk People’s Republic” or “Luhansk People’s Republic” (DNR/LNR) 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, pursuant to Executive Order 14065, or to the Crimea region of Ukraine.

 

Question 502: What sanctions remain in place on the Federal Security Service following the issuance of GL 1C?

 

Answer: GL 1C only authorizes certain transactions and activities with the Federal Security Service acting in its administrative and law enforcement capacities. The GL was issued in order to ensure that U.S. persons engaging in certain business activities in Russia that are not otherwise prohibited are not unduly impacted. All other transactions and activities involving any property subject to U.S. jurisdiction or within the possession or control of U.S. persons in which the Federal Security Service has an interest, including all other transactions and activities directly or indirectly with the Federal Security Service, remain prohibited unless exempt or otherwise authorized by OFAC.

 

Question 503: Does GL 1C authorize the exportation of hardware or software directly to the Federal Security Service, or where the Federal Security Service is the end user of such hardware and software?

 

Answer: No. GL 1C does not authorize the export of any goods, technology, or services directly or indirectly to the Federal Security Service or any other blocked person, except for the limited purposes of complying with rules and regulations administered by, and certain actions and investigations involving, the Federal Security Service or requesting certain licenses or authorizations for the importation, distribution, or use of information technology products in the Russian Federation.

 

https://ofac.treasury.gov/recent-actions/20230427 and chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://ofac.treasury.gov/media/931686/download?inline and https://ofac.treasury.gov/faqs/501 and https://ofac.treasury.gov/faqs/502 and https://ofac.treasury.gov/faqs/503

 

Fines and Penalties

 

April 5, 2023: Federal Court Orders Forfeiture of $826K in Funds Used in Attempt to Export Dual-Use High Precision Jig Grinder to Russia. An investigation into the attempted smuggling of a dual-use export-controlled item to Russia in violation of United States export laws and regulations has resulted in the forfeiture of approximately $826,000.

 

As alleged in court documents and statements made in court, beginning in 2018, operators of a Latvia-based corporation conspired with the operator of By Trade OU, an Estonia-based company, as well as individuals in Russia and a Russia-based company, to violate U.S. export laws and regulations and smuggle a jig grinder that was manufactured in Connecticut to Russia. A jig grinder is a high-precision grinding machine system that does not require a license to export to European Union countries, but does require a license for export and reexport to Russia because of its potential application in nuclear proliferation and defense programs. At no time did the defendants apply for, receive or possess a license of authorization from the U.S. Department of Commerce to export or reexport the jig grinder to Russia, as required by the Export Control Reform Act of 2018 and the Export Administration Regulations (EAR), which restrict the export of items that could make a significant contribution to the military potential of other nations or that could be detrimental to U.S. foreign policy and national security.

 

U.S. authorities, working with Latvian authorities, intercepted the jig grinder in Riga, Latvia, before it was to be shipped to Russia.

 

Several individuals and companies involved in this alleged scheme have been charged by indictment in the District of Connecticut with conspiracy, violation of the Export Control Reform Act, smuggling goods from the United States and international money laundering conspiracy offenses.

 

https://www.justice.gov/opa/pr/federal-court-orders-forfeiture-826k-funds-used-attempt-export-dual-use-high-precision-jig

 

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April 6, 2023: As part of a coordinated enforcement effort, the Department of Commerce’s Bureau of Industry and Security (“BIS”) and the Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) imposed a combined $3.3 million in civil penalties against Microsoft Corporation (“Microsoft”) for alleged and apparent violations of U.S. export controls and sanctions laws.  Microsoft voluntarily self-disclosed the alleged violations to both BIS and OFAC, cooperated with the joint investigation conducted by BIS’s Office of Export Enforcement and OFAC, and took remedial measures after discovering the conduct at issue, which predated the export controls and sanctions imposed in connection with the current Russian war in Ukraine.

 

OFAC announced a settlement with Microsoft. Microsoft has agreed to remit $2,980,265.86 to settle its potential civil liability for 1,339 apparent violations of the Cuban Assets Control Regulations, the Iranian Transactions and Sanctions Regulations, the Syrian Sanctions Regulations, and the Ukraine-/Russia-Related Sanctions Regulations involving the exportation of services or software from the United States to comprehensively sanctioned jurisdictions and to Specially Designated Nationals or blocked persons in violation of OFAC’s Cuba, Iran, Syria, and Ukraine-/Russia-Related sanctions programs. The majority of the apparent violations involved blocked Russian entities or persons located in the Crimea region of Ukraine, and occurred as a result of the Microsoft Entities’ failure to identify and prevent the use of its products by prohibited parties. The settlement amount reflects OFAC’s determination that Microsoft’s conduct was non-egregious and voluntarily self-disclosed.

 

BIS imposed an administrative penalty of $624,013 on Microsoft. As part of the BIS settlement, Microsoft admitted to the conduct set forth in a Proposed Charging Letter (“PCL”) involving Microsoft’s subsidiary Microsoft Rus LLC (“Microsoft Russia”). Microsoft was given a $276,382 credit by BIS contingent upon Microsoft fulfilling its requirements under the OFAC settlement agreement, resulting in a combined overall penalty amount of $3,327,896.86.

 

https://ofac.treasury.gov/recent-actions/20230406 and https://home.treasury.gov/news/press-releases/jy1394 and https://ofac.treasury.gov/media/931591/download?inline and https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3259-2023-04-06-bis-press-release-bis-ofac-microsoft-settlement/file

 

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April 7, 2023: Niloufar Bahadorifar, a/k/a “Nellie Bahadorifar,” was sentenced to four years in prison for conspiring to violate the International Emergency Economic Powers Act (“IEEPA”) by providing services, including financial services, to Iran and the Government of Iran, in violation of U.S. sanctions against Iran, and for structuring.  Bahadorifar pled guilty on December 15, 2022.

 

California Resident Sentenced To Four Years In Prison For Conspiring To Violate U.S. Sanctions Against Iran | USAO-SDNY | Department of Justice

 

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April 17, 2023: The Justice Department announced the indictment and arrest of John Can Unsalan, aka Hurrem Can Unsalan, the president of Metalhouse LLC, for engaging in a three-year scheme to violate U.S. sanctions against oligarch Sergey Kurchenko and two of Kurchenko’s companies by providing those sanctioned parties with over $150 million in return for steelmaking materials. As alleged in the indictment, between July 2018 and October 2021, Unsalan, 41, of Orlando, Florida, acting through his company, Metalhouse, transferred over $150 million to Kurchenko and companies controlled by Kurchenko. In return, Unsalan received from Kurchenko metal products used in steelmaking and attempted to collect from Kurchenko millions of dollars of funds for undelivered products.

 

https://www.justice.gov/opa/pr/president-metalhouse-llc-indicted-sanctions-evasion-and-international-money-laundering

 

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April 18, 2023: 88 Fed. Reg. 23620: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Gustavo Cavazos for five years until November 19, 2025. On November 19, 2020, Cavazos was convicted of smuggling firearms from the United States to Mexico without the required licenses. As a result of his conviction, the Court sentenced Cavazos to time served, three years of supervised release, and a $100 assessment.

 

https://www.federalregister.gov/documents/2023/04/18/2023-08120/in-the-matter-of-gustavo-cavazos-1117-cherokee-dr-pasadena-tx-77506-order-denying-export-privileges

 

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April 18, 2023: 88 Fed. Reg. 23621: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Darus Zehrbach for ten years until April 24, 2029. On April 24, 2019, Zehrbach was convicted of knowingly and willfully making a materially false, fictitious, fraudulent statement and representation, that is, the defendant stated in a letter to an agent of the United States Department of Commerce that any shipment he had caused to be made to Iran had originated in China when the defendant then and there knew that any shipment he had caused to be made to Iran had originated in the United States, in violation of 18 U.S.C. 1001(a)(2). Zehrbach was sentenced to six months in prison, one year of supervised release, and a $100 assessment.

 

https://www.federalregister.gov/documents/2023/04/18/2023-08117/in-the-matter-of-darus-zehrbach-32-jefferson-street-westover-wv-26501-order-denying-export

 

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April 18, 2023: 88 Fed. Reg. 23622: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Damian Espinoza-Gonzalez for ten years until April 6, 2031. On April 5, 2021, Espinoza-Gonzalez was convicted of conspiracy and of unlawfully smuggling, and attempting to smuggle, firearms and ammunition from the United States to Mexico. As a result of his conviction, the Court sentenced Espinoza-Gonzalez to time served, 36 months of supervised release, a $200 special assessment, and a $1,500 criminal fine.

 

https://www.federalregister.gov/documents/2023/04/18/2023-08126/in-the-matter-of-damian-espinoza-gonzalez-6707-south-caballo-road-tucson-az-85701-order-denying

 

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April 18, 2023: 88 Fed. Reg. 23623: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Katie Ellen O’Brien for ten years until January 17, 2029. On January 17, 2019, O’Brien was convicted of making false statements or misrepresentations to the U.S. Government during the course of an investigation and smuggling and attempting to smuggle firearms from the United States to Mexico. As a result of her conviction, the Court sentenced O’Brien to 60 months confinement with credit for time served, three years supervised release, and a $600 special assessment.

 

https://www.federalregister.gov/documents/2023/04/18/2023-08124/in-the-matter-of-katie-ellen-obrien-2777-north-santa-marta-place-tucson-az-85715-order-denying

 

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April 18, 2023: The Justice Department announced that it has secured a settlement agreement with General Motors (GM) to resolve the department’s determination that GM discriminated against non-U.S. citizens in violation of the Immigration and Nationality Act (INA). The department also announced the release of a new Fact Sheet to help employers avoid citizenship status discrimination when complying with export control laws, which govern U.S. companies’ ability to export certain goods and software, technology and technical data. The department’s investigation of GM revealed that the company’s violations stemmed in part from its failure to properly consider the INA’s nondiscrimination requirements when also complying with export control laws.

 

The department’s investigation determined that until at least September 2021, GM’s export compliance assessments unnecessarily required lawful permanent residents to provide an unexpired foreign passport as a condition of employment, imposing a discriminatory barrier on them in the hiring process. From at least July 2019 until May 2021, GM improperly combined its process for verifying workers’ permission to work in the United States with its export compliance assessment, which resulted in GM unnecessarily requiring that newly hired non-U.S. citizens provide specific and unnecessary documents to prove their permission to work.

 

Under the terms of the agreement, GM will pay $365,000 in civil penalties to the United States. The agreement also requires GM to train its personnel on the INA’s requirements, revise its employment policies and be subject to departmental monitoring and reporting requirements. Specifically, GM must separate its process to verify permission to work in the United States from its export compliance assessment process, and stop requiring lawful permanent residents to present foreign passports as a condition of employment.

 

A copy of the Fact Sheet can be found at the following link:

 

https://www.justice.gov/crt/page/file/1579981/download and https://www.justice.gov/opa/pr/justice-department-secures-agreement-general-motors-and-announces-new-resource-help-employers

 

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April 18, 2023: Two international business organizations pleaded guilty and were sentenced in the United States District Court for the District of Columbia for their participation in a criminal conspiracy to violate U.S. export laws and sanctions by sending U.S.-origin goods to Iran. Taiwan business organization DES International Co. Ltd. (DES), and Brunei business organization Soltech Industry Co. Ltd. (Soltech) each pleaded guilty to conspiring to defraud the United States and to violate the International Emergency Economic Powers Act and the Iranian Transactions and Sanctions Regulations. The two companies were each sentenced to pay a fine of $83,769, which is three times the value of the goods unlawfully exported to Iran, and to serve a five-year term of corporate probation.

 

https://www.justice.gov/opa/pr/international-business-organizations-convicted-criminal-conspiracy-violate-iranian-sanctions

 

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April 18, 2023: A nine-count indictment was unsealed in the Eastern District of New York charging Nazem Ahmad and eight co-defendants with conspiring to defraud the United States and foreign governments, evade U.S. sanctions and customs laws and conduct money laundering transactions by securing goods and services for the benefit of Ahmad, a Lebanese resident and dual Belgian-Lebanese citizen who was sanctioned by the United States for being a financier for Hezbollah, a foreign terrorist organization. According to court documents, despite being sanctioned and prohibited from engaging in transactions with U.S. persons since December 2019, Ahmad and his co-conspirators relied on a complex web of business entities to obtain valuable artwork from U.S. artists and art galleries and to secure U.S.-based diamond-grading services all while hiding Ahmad’s involvement in and benefit from these activities. Approximately $160 million worth of artwork and diamond-grading services were transacted through the U.S. financial system. One defendant was arrested in the United Kingdom at the request of the United States, and the eight remaining defendants, including Ahmad, are believed to reside outside the United States and remain at large. The government obtained seizure warrants for millions of dollars in assets that include a diamond ring, cash in an account and artwork.

 

https://www.justice.gov/opa/pr/ofac-designated-hezbollah-financier-and-eight-associates-charged-multiple-crimes-arising-out

 

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April 19, 2023: The Department of Commerce’s Bureau of Industry and Security (BIS) imposed a $300 million civil penalty against Seagate Technology LLC of Fremont, California (Seagate US) and Seagate Singapore International Headquarters Pte. Ltd., of Singapore (Seagate Singapore) (collectively, Seagate) to resolve alleged violations of U.S. export controls related to selling hard disk drives (HDDs) to Huawei Technologies Co. Ltd. (Huawei) in violation of the foreign direct product (FDP) rule. This historic foreign direct product enforcement case and settlement represents the largest standalone administrative penalty in BIS history. This resolution also includes a multi-year audit requirement and a five-year suspended Denial Order.

 

In August 2020, BIS imposed controls over certain foreign-produced items related to Huawei, as further described below. Despite this, in September 2020, Seagate announced it would continue to do business with Huawei. Seagate did so despite the fact that its only two competitors had stopped selling HDDs to Huawei, resulting in Seagate becoming Huawei’s sole source provider of HDDs. Subsequently, Seagate entered into a three-year Strategic Cooperation Agreement with Huawei, naming Seagate as “Huawei’s strategic supplier” and granting the company “priority basis over other Huawei suppliers.” As alleged in the Proposed Charging Letter, BIS’ investigation determined that Seagate engaged in conduct prohibited by the Export Administration Regulations (EAR) by ordering or causing the reexport, export from abroad, or transfer (in-country) of more than 7.4 million HDDs subject to the Huawei FDP rule without BIS authorization.

 

As described and alleged in greater detail in the Proposed Charging Letter (PCL), between approximately August 17, 2020, and September 29, 2021, Seagate US and Seagate Singapore, working with other Seagate entities, engaged in conduct prohibited by the EAR on 429 occasions. As alleged in the PCL, Seagate ordered or caused the reexport, export from abroad, or transfer (in-country) of approximately 7,420,496 foreign-produced HDDs, valued at approximately $1,104,732,205, to Huawei entities listed on the BIS Entity List or where such entities were a party to a transaction without authorization from BIS. The two other companies capable of making HDDs promptly—and publicly—indicated that they had ceased sales to Huawei. Of the three, only Seagate refused to stop sales and transactions involving Huawei. BIS’s $300 million monetary penalty is more than twice what BIS estimates to be the company’s net profits for the alleged illegal exports to or involving Huawei. As the transactions progressed, Seagate US repeatedly authorized extending lines of credit to Huawei totaling more than $1 billion dollars between January and September 2021 resulting in an increasing volume of HDD exports to Huawei that the entity was otherwise unable to obtain. In March 2021, Seagate and Huawei even entered into a Long-Term Agreement involving a purchase agreement of over 5 million HDDs and naming Seagate a “key strategic supplier.” All the while, Seagate’s competitors declined similar exports.

 

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3264-2023-04-19-bis-press-release-seagate-settlement/file and https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1497-e2836/file

 

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April 20, 2023: Rana Zeeshan Tanveer, 42, of Beckley, West Virginia, pleaded guilty to the federal felony offense of committing an export fraud violation. According to court documents and statements made in court, Tanveer admitted in the plea agreement to knowingly submitting false export valuations for certain items that Tanveer shipped to Pakistan. Specifically, in June 2017, Tanveer purchased two high technology items, paying more than $4,000 for both items. Prior to shipping, Tanveer created and used a false invoice that intentionally understated the value of the items as less than $200. After undervaluing the items on the invoice, Tanveer then shipped the items to Pakistan using a freight forwarding service. From 2014 to 2018, Tanveer intentionally used false invoices that deliberately undervalued the purchase cost of other U.S. origin technology items that Tanveer exported to Pakistan. Tanveer is scheduled to be sentenced on Aug. 4 and faces a maximum penalty of five years in prison, three years of supervised release, and a $250,000 fine.

 

https://www.justice.gov/opa/pr/west-virginia-man-pleads-guilty-export-fraud-violation

 

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April 20, 2023: The Justice Department announced that it has secured a settlement agreement with Micron Technology Inc. (Micron), a manufacturer of semiconductor memory and storage products based in Boise, Idaho. The settlement resolves the department’s determination that Micron violated the Immigration and Nationality Act (INA) by discriminating against a U.S. citizen when it failed to hire him for a position and instead hired a temporary visa worker. The department’s investigation began when a U.S. citizen worker complained that Micron unfairly denied him employment because of his citizenship status. The department determined that Micron unlawfully preferred a temporary visa worker for the position, failing to meaningfully consider the U.S. citizen’s qualifications. Under the INA, employers cannot discriminate based on citizenship, immigration status or national origin at any stage of the hiring process, unless required or allowed by law.

 

https://www.justice.gov/opa/pr/justice-department-secures-agreement-micron-technology-resolve-claim-immigration-related

 

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April 21, 2023: Tse Ernst Bangarie, age 47, of Hyattsville, Maryland, and co-defendant Edith Ngang, age 57, of St. Louis Park, Minnesota, were sentenced to 46 months in federal prison each, followed by two years of supervised release, for conspiracy, and for illegally exporting firearms and ammunition from the United States to Nigeria without obtaining the required licenses from the U.S. State Department.  According to court documents, the purpose of the conspiracy was to assist separatists fighting against the government of Cameroon.  Bangarie was sentenced on April 18, 2023 and Ngang was sentenced on April 20, 2023.

 

According to their plea agreements, from at least November 2017 until July 19, 2019, Bangarie, Ngang and their co-conspirators agreed to export firearms, ammunition and other military-type items in violation of the federal smuggling statute, the Arms Export Control Act and other export laws.  Bangarie owned and operated a freight forwarding company in Landover, Maryland and was responsible for arranging for the shipment of the firearms, ammunition and other items in at least one overseas shipping container.  Bangarie also referred individuals to co-conspirator Tamufor St. Michael to cut open and then weld shut metal compressors that the conspirators used to conceal many of the firearms in the shipping containers.  Bangarie participated in meetings of the conspirators, both online and in person, including in the basement of St. Michael’s residence, where the conspirators also reloaded ammunition, assembled firearms, and wrapped various items for overseas shipment.

 

https://www.justice.gov/usao-md/pr/two-conspirators-sentenced-almost-four-years-federal-prison-illegally-exporting-firearms

 

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April 24, 2023: L3 Technologies, Inc., Communication Systems West, a Utah-based manufacturer of communications equipment for military systems, has agreed to pay $21.8 million to resolve allegations that it violated the False Claims Act by knowingly submitting and causing the submission of false claims to the Department of Defense by including in contract proposals the cost of certain parts twice.

 

From approximately 2008 to 2011, L3 submitted, and the Department of Defense accepted, dozens of contract proposals for a handheld receiver called the Remote Operations Video Enhanced Receiver (ROVER), and a compact transceiver called the Video Oriented Transceiver for Exchange of Information (VORTEX), which operate together to provide real-time, full-motion video and other crucial data from the battlefield. The contract proposals included the cost of low-cost common-stock items, such as nuts and bolts, twice. As a result, the United States alleged that L3 knowingly double-charged the government for these parts.

 

https://www.justice.gov/opa/pr/l3-technologies-settles-false-claims-act-allegations-relating-double-charging-certain-0

 

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April 25, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $508,612,492 settlement with British American Tobacco p.l.c. (“BAT”).  BAT, a London, England-headquartered tobacco company, has agreed to settle its potential civil liability for apparent violations of the Weapons of Mass Destruction Proliferators Sanctions Regulations (WMDPSR) and the North Korea Sanctions Regulations (NKSR).  The apparent violation of the WMDPSR arose from BAT’s formation of a conspiracy to remit approximately $250 million in payments from a North Korean joint venture, through bank accounts controlled by blocked North Korean banks, to BAT’s Singaporean subsidiary – in a manner that involved U.S. banks in clearing the transactions – between 2009 and 2016.  The apparent violations of the NKSR arose from BAT’s Singaporean subsidiary’s use of the U.S. financial system to receive payments for its exports of tobacco to the North Korean Embassy in Singapore.  This settlement amount reflects OFAC’s determination that BAT’s conduct was egregious and not voluntarily disclosed.

 

https://ofac.treasury.gov/recent-actions/20230425 and https://ofac.treasury.gov/media/931661/download?inline

 

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April 25, 2023: British American Tobacco (BAT) and its subsidiary, BAT Marketing Singapore (BATMS), one of the world’s largest manufacturers of tobacco products based in the United Kingdom, has agreed to pay combined penalties of more than $629 million to resolve bank fraud and sanctions violations charges with U.S. authorities, arising out of the companies’ scheme to do business in North Korea through a third-party company in Singapore, in violation of the bank fraud statute and the International Emergency Economic Powers Act (IEEPA). Separately, charges were unsealed in the District of Columbia against a North Korean banker and Chinese facilitators for their roles in facilitating the illicit sale of tobacco products in North Korea.

 

According to court documents, BATMS pleaded guilty to a criminal information filed in the District of Columbia charging BAT and BATMS with conspiracy to commit bank fraud and conspiracy to violate IEEPA. BAT entered into a deferred prosecution agreement (DPA) related to the same charges.

 

Specifically, in 2007, BAT spun off its North Korea sales to a third-party company, issuing a press statement that it was no longer involved in North Korea tobacco sales. In reality, BAT continued to do business in North Korea through the third-party company and BATMS maintained control over all relevant aspects of the North Korean business. Between 2007 and 2017, BAT and BATMS ran the payments for the tobacco sold to North Korean entities through the third-party company, resulting in approximately $418 million of U.S. dollar cash and correspondent banking transactions from North Korea to the third-party company in Singapore – money that was then passed on to BATMS and BAT. To make these payments, North Korean purchasers used front companies so that U.S. banks – which processed the transactions – would not know about the connection to North Korea. Pursuant to the DPA and plea agreement, BAT and BATMS will pay a total of $629 million in penalties and fines.

 

https://www.justice.gov/opa/pr/united-states-obtains-629-million-settlement-british-american-tobacco-resolve-illegal-sales

 

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April 25, 2023: A New York attorney pleaded guilty to participating in a scheme to make approximately $3.8 million in U.S. dollar payments to maintain six real properties in the United States that were owned by Viktor Vekselberg, a sanctioned oligarch.

 

According to court documents, Robert Wise of Pelham, New York, pleaded guilty to one count of conspiring to commit international money laundering, which carries a maximum sentence of five years in prison. Wise also agreed to forfeit more than $3.7 million and to be satisfied by a payment of $210,441. Sentencing is scheduled for Nov. 6.

 

According to the allegations in the information filed in Manhattan federal court and other public filings:

 

On April 6, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Vekselberg as a Specially Designated National (SDN) in connection with its finding that the actions of the Government of the Russian Federation in Ukraine constituted an unusual and extraordinary threat to the national security and foreign policy of the United States. On or about March 11, 2022, OFAC redesignated Vekselberg as an SDN and blocked Vekselberg’s yacht and private airplane.

 

Prior to his designation by OFAC, between approximately 2008 and 2017, Vekselberg, through a series of shell companies, acquired six real properties in the United States, specifically, (i) two apartments on Park Avenue in New York, New York, (ii) an estate in Southampton, New York, (iii) two apartments on Fisher Island, Florida, and (iv) a penthouse apartment also on Fisher Island, Florida (collectively, the Properties). As of the date of this information, the Properties were worth approximately $75 million.

 

Voronchenko, Vekselberg’s longtime associate, retained Wise, an attorney who practiced in New York, New York, to assist in the acquisition of the Properties. Wise also managed the finances of the Properties, including by paying common charges, property taxes, insurance premiums, and other fees associated with the Properties in U.S. dollar transactions from Wise’s interest on lawyer’s trust account (IOLTA account).

In particular, prior to Vekselberg’s designation as an SDN, between approximately February 2009 and March 2018, shell companies owned by Vekselberg sent approximately 90 wire transfers totaling approximately $18.5 million to the IOLTA account. At the direction of Voronchenko and his family member who lived in Russia, Wise used these funds to make various U.S. dollar payments to maintain and service the Properties.

 

https://www.justice.gov/opa/pr/new-york-attorney-pleads-guilty-conspiring-commit-money-laundering-promote-sanctions

 

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April 27, 2023: Tao Jiang, the president and owner of Broad Tech System, Inc., a California-based electronics distribution company, and his company were both sentenced in U.S. District Court in Rhode Island for concealing information from the U.S. Department of Commerce and from U.S. Customs and Border Protection as part of a scheme to illegally export chemicals manufactured and/or distributed by a Rhode Island-based company to a technology company in China with ties to the Chinese military, announced United States Attorney Zachary A. Cunha.

 

Mr Jiang and Broad Tech Systems pleaded guilty on January 11, 2023, to charges of conspiracy, violation of the Export Control Act, and money laundering conspiracy. Jiang was ordered by U.S. District Court Chief Judge John J. McConnell, Jr., to serve one year of federal probation, to pay a fine of $5,500, and to perform 100 hours of community service; Broad Tech Systems was placed on federal probation for one year and ordered to pay a fine of $120,000.

 

https://www.justice.gov/usao-ri/pr/california-based-company-company-president-sentenced-scheme-violate-export-control-act