MARCH 2024 EXPORT CONTROL REGULATIONS UPDATES

 

This newsletter is a listing of the latest changes in export control regulations through March 31, 2024.  The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities.  It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

 

See also our “Latest Sanctions Fines & Penalties” section below for an update on companies and

persons denied export privileges by the United States Government.

 

REGULATORY UPDATES

 

President

 

President Biden Terminated The National Emergency with Respect to Zimbabwe

 

March 4, 2024: President Biden found that the declaration of a national emergency in Executive Order 13288 of March 6, 2003, with respect to the actions and policies of certain members of the Government of Zimbabwe and other persons to undermine Zimbabwe’s democratic processes or institutions, as relied upon for additional steps taken in Executive Order 13391 of November 22, 2005, and as expanded by Executive Order 13469 of July 25, 2008, should no longer be in effect.  Although President Biden continues to be concerned with the situation in Zimbabwe, particularly with respect to acts of violence and other human rights abuses against political opponents and with respect to public corruption, including misuse of public authority, the declaration of a national emergency in Executive Order 13288 is no longer needed.  Accordingly, President Biden terminated the national emergency declared in Executive Order 13288, and revoke that order, Executive Order 13391, and Executive Order 13469.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/03/04/executive-order-on-the-termination-of-emergency-with-respect-to-the-situation-in-zimbabwe/

 

Editors note: The declaration of termination of the national emergency may result in revisions to the ITAR and EAR for an arms embargo on Zimbabwe. Follow our monthly newsletter for updates.

 

President Biden Continued The National Emergency with Respect to Ukraine

 

 

March 4, 2024: On March 6, 2014, by Executive Order 13660, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the situation in relation to Ukraine. The situation in and in relation to Ukraine undermine democratic processes and institutions in Ukraine; threaten its peace, security, stability, sovereignty, and territorial integrity; and contribute to the misappropriation of its assets, as well as the actions and policies of the Government of the Russian Federation, including its purported annexation of Crimea and its use of force in Ukraine, continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States

Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 13660.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/03/04/press-release-notice-on-the-continuation-of-the-national-emergency-with-respect-to-ukraine/

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President Biden Continued The National Emergency with Respect to Venezuela

March 5, 2024: On March 8, 2015, the President issued Executive Order 13692, declaring a national emergency with respect to the situation in Venezuela, including the Government of Venezuela’s erosion of human rights guarantees, persecution of political opponents, curtailment of press freedoms, use of violence and human rights violations and abuses in response to antigovernment protests, and arbitrary arrest and detention of antigovernment protesters, as well as the exacerbating presence of significant government corruption.

The situation in and in relation to Venezuela, continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 13692.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/03/05/press-release-notice-on-the-continuation-of-the-national-emergency-with-respect-to-venezuela/

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President Biden Continued The National Emergency with Respect to Iran

March 12, 2024: On March 15, 1995, by Executive Order 12957, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701‑1706) to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by the actions and policies of the Government of Iran. The actions and policies of the Government of Iran — including its proliferation and development of missiles and other asymmetric and conventional weapons capabilities, its network and campaign of regional aggression, its support for terrorist groups, and the malign activities of the Islamic Revolutionary Guard Corps and its surrogates — continue to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.

The situation in and relation to Iran continue to pose threat to the national security and foreign policy of the United States.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency with respect to Iran declared in Executive Order 12957.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/03/12/press-release-notice-on-the-continuation-of-the-national-emergency-with-respect-to-iran/

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President Biden Continued The National Emergency with Respect to Significant Malicious Cyber-Enabled Activities

 

March 26, 2024: On April 1, 2015, by Executive Order 13694, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by the increasing prevalence and severity of malicious cyber-enabled activities originating from, or directed by persons located, in whole or in substantial part, outside the United States.  On December 28, 2016, the President issued Executive Order 13757 to take additional steps to address the national emergency declared in Executive Order 13694.

These significant malicious cyber-enabled activities continue to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.  For this reason, the national emergency declared on April 1, 2015, must continue in effect beyond April 1, 2024.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 13694.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/03/26/press-release-notice-on-the-continuation-of-the-national-emergency-with-respect-to-significant-malicious-cyber-enabled-activities/

 

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President Biden Continued The National Emergency with Respect to South Sudan

 

March 26, 2024: On April 3, 2014, by Executive Order 13664, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the situation in and in relation to South Sudan, which has been marked by activities that threaten the peace, security, or stability of South Sudan and the surrounding region, including widespread violence and atrocities, human rights abuses, recruitment and use of child soldiers, attacks on peacekeepers, and obstruction of humanitarian operations.

 

The situation in and in relation to South Sudan continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States. For this reason, the national emergency declared on April 3, 2014, must continue in effect beyond April 3, 2024.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 13664.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/03/26/press-release-notice-on-the-continuation-of-the-national-emergency-with-respect-to-south-sudan-2/

 

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The U.S. Department of State

 

Change in Policy on Exports of Defense Articles and Defense Services to Nicaragua

 

March 15, 2024: 89 Fed. Reg. 18796: In response to growing concerns regarding Nicaragua’s continuing dismantling of democratic institutions, attacks on civil society, and increased security cooperation with Russia, to include support of Russia’s full-scale invasion of Ukraine, the Department of State amended the International Traffic in Arms Regulations (ITAR) to add Nicaragua to the 22 CFR § 126.1 list of countries for which it is the policy of the United States to deny licenses or other approvals for exports and imports of defense services and defense articles, except as otherwise provided.

 

The policy of denial toward Nicaragua applies to licenses or other approvals for exports and imports of defense articles or defense services, except that a license or other approval may be issued on a case-by-case basis for non-lethal military equipment intended solely for humanitarian assistance, to include natural disaster relief.

 

https://gcc02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fpublic-inspection.federalregister.gov%2F2024-05695.pdf%3Futm_campaign%3Dpi%2Bsubscription%2Bmailing%2Blist%26utm_medium%3Demail%26utm_source%3Dfederalregister.gov&data=05%7C02%7CJaniferDK%40state.gov%7Cc15f3fbaaf2b4daa7ca308dc4431627e%7C66cf50745afe48d1a691a12b2121f44b%7C0%7C0%7C638460226108622737%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=9ywCUi2YHxcB8bIcY9%2FGiVDcuaY1qEt5kdJFwg7shho%3D&reserved=0

 

Editors note: The EAR also takes a corresponding action for items with a 600 series ECCN by adding Nicaragua to the list of D:5 countries.

 

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State/DDTC Publishes FAQ re Value of Paragraph (x) Items

 

March 18, 2024: The Department of State published a new Frequently Asked Question (FAQ) on its website regarding the values of Paragraph (x) items:

 

Question:

 

“Will the value of the paragraph (x) items be used to decrement the authorization or count toward congressional notification threshold?”

 

Answer:

 

“No, however applicants must include the appropriate value of the paragraph (x) articles on the license applications. When adjudicating a license request, although the value of the paragraph (x) items is included in the total license value, DDTC will exclude the paragraph (x) value from threshold determinations such as congressional notifications. When the license is approved and the exporter files via Automated Export System (AES) for a shipment against the license, the exporter must include the declared value of the paragraph (x) items and that value will be decremented in AES against the total value of the license.”

 

https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_public_portal_faq_detail&sys_id=558b2d9cdb3d5b4044f9ff621f961931

 

Editor’s note: Paragraph (x) items are items subject to the EAR that have been licensed on an ITAR license.

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International Traffic in Arms Regulations: Removal of Certain Capacitors from Category XI(c)(5) of the U.S. Munitions List

 

March 25, 2024: 89 Fed. Reg. 20546: The Department of State published a final rule in the Federal Register that amends, effective April 24, 2024, U.S. Munitions List Category XI(c)(5), which describes certain high-energy storage capacitors.

 

The Department of State published an interim final rule on April 27, 2023, effective May 21, 2023, amending 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. After reviewing the comments received in response to that interim final rule, the Department is now further amending USML Category XI to remove additional high-energy storage capacitors and to more clearly identify those that remain in USML Category XI.

 

The Department received four comments from the public, all of which recommended that the Department define the voltage criterion according to “voltage rating” or “rated voltage,” rather than “capable of operating.” The Department accepts these comments and will implement the term “rated voltage” to specify the voltage criterion in place of the phrase “capable of operating,” which does not have a broadly accepted definition. The Department notes that rated voltage is commonly provided in manufacturers’ product literature worldwide, thereby giving persons other than the manufacturer valuable information in assessing the capabilities of the capacitors. Accordingly, the Department has decided to specify the voltage criterion in paragraph (c)(5)(i) of USML Category XI in terms of “rated voltage.”

 

USML Category XI(c)(5) includes the following changes:

 

Category XI—Military Electronics

 

(c)

(5) High-energy storage capacitors that:

(i) Have a rated voltage of greater than five hundred volts (500 V);

(ii) Have a repetition rate greater than or equal to six (6) discharges per minute;

(iii) Have a full energy life greater than or equal to 10,000 discharges at greater than 0.2 Amps per Joule peak current; and

(iv) Have any of the following:

(A) Volumetric energy density greater than or equal to 1.5 J/cc; or

(B) Mass energy density greater than or equal to 1.3 kJ/kg;

 

Note to paragraph (c)(5):

 

Volumetric energy density is Energy per unit Volume. Mass energy density is Energy per unit Mass, sometimes referred to as Gravimetric energy density or Specific energy. Energy (E = 1/2 CV2 , where C is Capacitance and V is the rated voltage) in these calculations must not be confused with useful energy or extractable energy. Rated voltage is the value, based on the capacitor’s design, testing, and evaluation, that describes the maximum amount of continuous voltage, at an operating temperature less than or equal to 85 degrees Celsius (85 °C), that will not damage the capacitor. Rated voltage does not include short-term transient or surge operating conditions.

 

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

https://www.federalregister.gov/documents/2024/03/25/2024-06199/international-traffic-in-arms-regulations-revision-to-us-munitions-list-category-xi-high-energy

 

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The Directorate of Defense Trade Controls Released New Joint Venture FAQs

 

March 25, 2024: The Directorate of Defense Trade Controls has released new Frequently Asked Questions (FAQs) regarding when and how joint ventures (JV) must be added to Block 8 (Affiliate/Subsidiary Information) of an DDTC registrant’s Statement of Registration (DS-2032 form). DDTC views JVs as separate legal entities which are established by two or more parties and are governed by a Joint Venture Agreement.

 

Question:

 

How do I register a foreign-incorporated joint venture (JV) in Defense Export Control and Compliance System (DECCS)?

 

Answer:

 

If a Directorate of Defense Trade Controls (DDTC) registrant owns more than 50% of the outstanding voting securities of the foreign JV then the registrant must add the JV to Block 8 of its DS-2032 form as a subsidiary. If a DDTC registrant does not own more than 50% of the outstanding voting securities of the foreign JV, but otherwise manages the day-to-day operations of the foreign-incorporated JV, then such DDTC registrant must add the JV to Block 8 of its DS-2032 form as a controlled affiliate. Otherwise, without U.S. persons managing the day-to-day operations of the foreign-incorporated JV then such JV is not able to be DDTC registered. Alternatively, if the DDTC registrant is a foreign broker and they own more than 50% of the outstanding voting securities of the foreign JV then they must add the foreign JV to Block 8 of its DS-2032 form as a subsidiary and the JV would only be registered as a foreign broker. If the foreign broker manages the day-to-day operations of the foreign JV then they must add the foreign JV to Block 8 of its DS-2032 form as a controlled affiliate and the JV would only be registered as a foreign broker.

 

DDTC registrants participating in a JV engaged in ITAR-related activities with foreign-persons are reminded that foreign-person employees who will receive ITAR-controlled technical data must first obtain appropriate licenses or other approvals. Special protocols may be appropriate to address the day-to-day involvement of foreign-person personnel including officers and senior managers. Export compliance briefings should be prepared for foreign-person personnel to ensure they understand ITAR-related restrictions as well as protocols/procedures to request access to ITAR-controlled activities (including defense articles, including technical data, and defense services). Furthermore, it is prohibited to perform defense services or export or temporary import ITAR-controlled defense articles to subsidiaries/affiliates located in proscribed countries under ITAR Section 126.1 (for example, the People’s Republic of China, North Korea, Syria, etc.) without first obtaining a license or other approval from DDTC. DDTC registrants should counsel their employees not to discuss the substance of ITAR-controlled technical data with foreign-person employees without a license or other approval. Also, DDTC registrants should ensure all employees are appropriately briefed on their ITAR compliance responsibilities.

 

Question:

 

Which Directorate of Defense Trade Controls (DDTC)-registered U.S. joint venture (JV) member holds responsibility for listing the JV on its Statement of Registration (DS-2032 form) in Defense Export Control and Compliance System (DECCS)?

 

Answer:

 

The answer will depend on several factors. If a DDTC registrant owns more than 50% of the outstanding voting securities of the JV, then such DDTC registrant must add the JV to Block 8 of its DS-2032 form in DECCS Registration as a subsidiary, so long as the JV is separately incorporated as its own legal entity (i.e., not an unincorporated collection of property and/or assets). Alternatively, if an DDTC registrant does not own more than 50% of the outstanding voting securities of the JV, but otherwise manages the day-to-day operations of the JV, then such DDTC registrant must add the JV to Block 8 of its DS-2032 form in DECCS Registration as a controlled affiliate, so long as the JV is separately incorporated as its own legal entity (i.e., not an unincorporated collection of property and/or assets).

If a DDTC registrant does not own or have ability to manage the day-to-day operations of the JV, the JV must send a registration submission using a DS-2032 form in DECCS Registration to receive its own, separate registration.

 

To confirm management control by the DDTC registrant, the Office of Defense Trade Controls Compliance may consider (including but not limited to): ownership distribution of the JV, whether the JV has an independent board of directors, terms of the JV agreement, and/or staffing and resources of the JV.

 

Question:

 

My joint venture (JV) is incorporated in the United States, but management and control are split 50/50 between two foreign persons—can I have my JV register on its own?

 

Answer:

 

If an U.S.-incorporated JV is engaged in ITAR activities, but both of its managing members are foreign persons as defined in ITAR 120.63, then the JV must send a registration submission, signed by a U.S. person senior officer, in Defense Export Control and Compliance System (DECCS) Registration to receive its own, separate registration and code. If an U.S.-incorporated JV does not have a U.S. person senior officer, then the JV will either not be able to register with DDTC or it must hire a U.S. person senior officer who has authority to manage the day-to-day operations of the JV. The U.S. person senior officer must sign and submit the DS-2032 form in DECCS Registration to receive a registration and code. Directorate of Defense Trade Controls Office of Defense Trade Controls Compliance (DDTC) registrants participating in a JV engaged in ITAR-related activities with foreign-persons are reminded that foreign-person employees who will receive ITAR-controlled technical data must first obtain appropriate licenses or other approvals.

 

 

 

 

Question:

 

What type of legal entities can be added to Block 8 of a Directorate of Defense Trade Controls (DDTC) registrant’s DS-2032 form?

 

Answer:

 

Entities listed as subsidiaries or controlled affiliates in Block 8 of the DS-2032 form must be separate and distinct legal entities from the registrant in the DS-2032 form. Such legal entities will have their own articles of incorporation and/or formation separate and distinct from their parent company.

However, office and factory locations owned by a DDTC registrant, but not separately incorporated from such registrant must not be added to Block 8 of the DS-2032 form as subsidiaries or controlled affiliates. Similarly, a joint venture consisting of certain resources (e.g., joint money, property, effort, and knowledge) must not be added to the DS-2032 form if such joint venture is not separately incorporated as a distinct legal entity.

 

If a DDTC registrant operates under a trade name distinct from its legal name, it must not separately list its trade name in Block 8 of the DS-2032 form. Instead, Block 5 of the DS-2032 form affords the registrant the opportunity to distinguish their “doing business as name” from the legal name reflected in their articles of incorporation or formation.

 

Question:

 

My Directorate of Defense Trade Controls (DDTC) U.S. registered company and another DDTC U.S. registered company each own 50% of an ITAR related legal entity. Which DDTC registrant must add the company to its DS-2032 form?

 

Answer:

 

Generally, the DDTC registrant that manages the day-to-day operations of the joint venture (JV), must add the JV to Block 8 of its DS-2032 form as a controlled affiliate. If both DDTC registered parties have equal management control of the JV, the Office of Defense Trade Controls Compliance may consider other factors which may be determinative of control (including but not limited to): responsibilities related to specific ITAR related activities enumerated in the JV agreement, specifically stipulated tie-breakers, arbitration agreements, etc. If the JV has a 50/50 ownership split and is independently managed, then the JV must send a registration submission using a DS-2032 form in Defense Export Control and Compliance System (DECCS) Registration to receive its own, separate registration and code.

 

https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_public_portal_faq_detail&sys_id=0fb3961fdb4942908fe6e01a13961922 and

https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_public_portal_faq_detail&sys_id=c7f1529bdb4942908fe6e01a139619e7 and

https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_public_portal_faq_detail&sys_id=0c83561fdb4942908fe6e01a13961922 and

https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_public_portal_faq_detail&sys_id=1c24525fdb4942908fe6e01a13961933 and

https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_public_portal_faq_detail&sys_id=68e212dbdb4942908fe6e01a13961912 and

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

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DDTC Name And Address Changes Posted To Website

 

March 11 through 26, 2024: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at    

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

 

  • Change in Address from Pilatus Training Solutions Australia Pty Ltd formerly at 249 Somerton Park Road, Sale, Victoria 3850, Australia to Pilatus Training Solutions Australia Pty Ltd at 81 Pearson Street, Sale, Victoria 3850, Australia;
  • Change in Address from D3O, LLC formerly at 2270 Kraft Drive, Suite 1260, Blacksburg, VA 24060 to D3O, LLC at 1750 Kraft Drive, Suite 1275, Blacksburg, VA 24060;
  • Change in Address from GEC Aviation Inc. formerly at 1919 Minnesota Court, Suite 100, Mississauga, Ontario L5N 0C9, Canada to GEC Aviation Inc. at 60 Queen Street, Suite 601, Ottawa, Ontario K1P 5YZ, Canada; and
  • Change in Name from Ayesa Air Control GmbH to Alten GmbH due to merger.

 

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U.S. Department of Defense, Defense Security Cooperation Agency (DSCA)

 

DSCA Notifies Congress Of Potential FMS Sale To Canada

 

March 7, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DCSA) has notified Congress that The Government of Canada has requested to buy telecommunications services providing Tactical Narrowband Satellite Communications (SATCOM) access to Canadian armed forces users over the Mobile User Objective System (MUOS) service; communication technical assistance to provide operational support, lifecycle management support, and engineering technical assistance and services; personnel training and training equipment; U.S. Government and contractor engineering; technical and logistics support services; and other related elements of logistics and program support. The estimated total cost is $138 million. The principal contractor will be General Dynamics, Reston, VA. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/canada-mobile-user-objective-system-access

 

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DSCA Notifies Congress Of Potential FMS Sale to South Korea

 

March 7, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DCSA) has notified Congress that The Republic of Korea (ROK) has requested to buy five (5) BQM-177A Subsonic Sea-Skimming Aerial Targets (SSAT) for KDX-III Batch-II AEGIS Class Destroyers. Also included are GQM-163 target drones; classified books and other publications (technical and non-technical); test support; technical documentation; personnel training; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $170.6 million. The principal contractor for the BQM-177A SSAT will be Kratos Defense, Sacramento, CA, and Fort Walton Beach, FL. The principal contractor for the GQM-163A target drones will be Northrop Grumman, Chandler, AZ. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/republic-korea-subsonic-sea-skimming-aerial-targets-kdx-iii-batch-ii

 

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DSCA Notifies Congress Of Potential FMS Sale to South Korea

 

March 8, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DCSA) has notified Congress that The Republic of Korea (ROK) has requested to buy six (6) T-700 GE 401C or 401D engines. Also included are spare engine containers; spare and repair parts; ferry support; publications and technical documentation; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $350 million. The principal contractor will be the General Electric Company, located in Lynn, MA. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/republic-korea-engines-and-sustainment-mh-60r-multi-mission

 

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DSCA Notifies Congress Of Potential FMS Sale to North Macedonia

 

March 8, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DCSA) has notified Congress that The Government of North Macedonia has requested to buy an additional eighteen (18) M1278A1/A2 Joint Light Tactical Vehicle (JLTV) Heavy Gun Carriers (HGC); and seven (7) M1280A1/A2 Joint Light Tactical Vehicle (JLTV) General Purpose (GP) that will be added to a previously implemented case whose value was under the congressional notification threshold. The original Foreign Military Sales (FMS) case, valued at $78.54 million ($23.16 million in MDE), included a total of seventy-one (71) JLTVs, consisting of forty-eight (48) M1278A1/A2 JLTVs HGC; seventeen (17) M1280A1/A2 JLTVs GP; and six (6) M1281A1/A2 JLTVs Close Combat Weapons Carrier (CCWC). This notification is for a combined total of sixty-six (66) M1278A1/A2 JLTV HGC; twenty-four (24) M1280A1/A2 JLTV GP; and six (6) M1281A1/A2 JLTV CCWC. Also included are Common Remotely Operated Weapon Stations (CROWS); CROWS spare parts; CROWS Basic Issue Items (BII) – Boresight Kit Components; CROWS packaging and handling; CROWS installation and training; M2A1 machine guns with support equipment; MK19 Mod III with support equipment; M240B machine guns with support equipment; MK93 weapon mount; Driver’s Visor Enhancer (DVE); Maintenance Tool Set Toughbook Laptops; high frequency radios; communications equipment; Defense Advanced Global Positioning System Receivers (DAGR) with Selective Availability Anti-Spoofing Modules (SAASM) and support equipment; JLTV kits; Vehicle Integration kits; LCD 4.0; spare and repair parts; Supplemental Common Tool Kit (SCTK); Special Tools and Test Equipment (STTE); Objective Gunner Protection Kit (OGPK); Javelin Integration Bracket Kit; turret rings and hatches; technical manuals and publications; New Equipment Training (NET); U.S. Government and contractor technical engineering, logistics, and personnel services; JLTV Field Service Representative support; JLTV integration support, and other related elements of logistics and program support. The estimated total cost is $111 million. The principal contractors will be Oshkosh Defense, Oshkosh, WI; AM General, Auburn Hills, MI; Leonardo DRS, West Plains, MO, and L3Harris, Melbourne, FL. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/north-macedonia-joint-light-tactical-vehicles

 

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DSCA Notifies Congress Of Potential FMS Sale to Poland

 

March 12, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DCSA) has notified Congress that The Government of Poland has requested to buy two hundred thirty-two (232) AIM-9X Sidewinder Block II Tactical Missiles and sixteen (16) AIM-9X Sidewinder Block II Tactical Missile Guidance Units. Also included are missile containers; training aids; active optical target detectors; spares; support equipment; missile support; U.S. Government and contractor technical assistance; and other related elements of logistics and program support. The estimated total cost is $219.1 million. The principal contractor will be RTX Corporation, Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

 

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

 

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DSCA Notifies Congress Of Potential FMS Sale to Poland

 

March 12, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DCSA) has notified Congress that The Government of Poland has requested to buy up to seven hundred forty-five (745) AIM-120C-8 Advanced Medium Range Air-to-Air Missiles (AMRAAM), up to sixteen (16) AIM-120C-8 AMRAAM guidance sections, and fifty (50) LAU-129 Guided Missile Launchers. Also included are AIM-120 Captive Air Training Missiles, missile containers, and control section spares; Common Munitions Built-in-Test Reprogramming Equipment; ADU-891 Adapter Group Test Sets; munitions support and support equipment; spare and repair parts, consumables, accessories, and repair and return support; contract logistics support; classified software delivery and support; classified and unclassified publications and technical documentation; personnel training and training support; transportation support; studies and surveys; U.S. Government and contractor engineering, technical, and logistical support services; and other related elements of logistics and program support. The estimated total cost is $1.69 billion. The principal contractor will be RTX Corporation, Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

 

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

 

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DSCA Notifies Congress Of Potential FMS Sale to Poland

 

March 12, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DCSA) has notified Congress that The Government of Poland has requested to buy up to eight hundred twenty-one (821) AGM-158B-2 Joint Air-to-Surface Standoff Missiles with Extended Range (JASSM-ER) All-Up-Rounds. Also included are AGM-158 JASSM classified test equipment; weapon system support; integration and test support and equipment; classified software delivery and support; unclassified publications and technical documentation; transportation; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $1.77 billion. The principal contractor will be Lockheed Martin, Orlando, FL. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/poland-agm-158b-2-joint-air-surface-standoff-missile-extended-range

 

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DSCA Notifies Congress Of Potential FMS Sale to Italy

 

March 15, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DCSA) has notified Congress that The Government of Italy has requested to buy twenty-eight (28) AIM-9X Sidewinder Block II+ Tactical Missiles; four (4) AIM-9X Block II+ Tactical Guidance Units; eight (8) AIM-9X Captive Air Training Missiles (CATM); and two (2) AIM-9X CATM Guidance Units that will be added to previously implemented cases whose values were under the congressional notification threshold. The original Foreign Military Sales cases, valued at $34.1 million ($24.1 million in MDE) and $17.6 million ($9.7 million in MDE), respectively, included a total of thirty-eight (38) AIM-9X Sidewinder Block II+ Tactical Missiles; three (3) AIM-9X Block II+ Tactical Guidance Units; sixteen (16) AIM-9X CATM; and two (2) AIM-9X CATM Guidance Units. This notification is for a combined total of sixty-six (66) AIM-9X Sidewinder Block II+ Tactical Missiles; seven (7) AIM-9X Block II+ Tactical Guidance Units; twenty-four (24) AIM-9X CATM; and four (4) AIM-9X CATM Guidance Units. Also included are active optical target detectors; containers; personnel training and training equipment; classified and unclassified publications and technical documents; warranties; U.S. Government engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $90.6 million. The principal contractor will be RTX Corporation, located in Arlington, VA. There are no known offset agreements proposed in connection with this potential sale.

 

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

 

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DSCA Notifies Congress Of Potential FMS Sale to Bahrain

 

March 19, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DCSA) has notified Congress that The Government of Bahrain has requested to buy fifty (50) M1A2 SEPv3 Abrams Main Battle Tanks; four (4) M88A2 HERCULES Combat Recovery Vehicles; eight (8) M1110 Joint Assault Bridges; eight (8) M1150 Assault Breacher Vehicles; eight (8) Heavy Assault Scissor Bridge (HASB); one hundred (100) M240 Coaxial 7.62mm machine guns; three (3) AGT1500 Gas Turbine engines; six thousand (6,000) 120mm M1002 Target Practice Multipurpose Tracer (TPMP-T) projectiles; and five thousand seven hundred sixty (5,760) 120mm M1147 High Explosive Multipurpose Tracers. Also included are M2A1 .50 caliber machine guns; Common Remote Operated Weapons Station Low Profile (CROWS-LP); Forward Repair System; M250 smoke grenade launchers; service and training ammunition; M1300/M1302 Enhanced Heavy Equipment Transporter System (EHETS); M978A4 Heavy Expanded Mobility Tactical Truck (HEMTT) tanker and Load Handling System (LHS); M074A1 Palletized Load Systems and trailers and flat racks; support and test equipment; integration and test support; spare and repair parts; Special Tools and Test Equipment (STTE); communications equipment; Selective Availability Anti-Spoofing Module (SAASM)-based Global Positioning System (GPS) receivers; software delivery and support; Identification Friend or Foe (IFF) equipment; publications and technical manuals; maintenance trainers; training equipment; U.S. Government and contractor engineering, technical, and logistics support services; Next Generation Automatic Test System (NGATS); and other related elements of logistics and program support. The estimated total cost is $2.2 billion. The principal contractors will be General Dynamics Land Systems, Sterling Heights, MI; BAE Systems, York, PA; Leonardo DRS, Arlington, VA; Honeywell Aerospace, Phoenix, AZ; RTX Corporation, McKinney, TX; and Lockheed Martin, Orlando, FL. The purchaser typically requests offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

 

https://www.dsca.mil/press-media/major-arms-sales/bahrain-m1a2-abrams-main-battle-tanks

 

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DSCA Notifies Congress Of Potential FMS Sale to Morocco

 

March 19, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DCSA) has notified Congress that The Government of Morocco has requested to buy six hundred twelve (612) Javelin FGM-148F missiles (includes twelve (12) fly-to-buy missiles) and two hundred (200) Javelin Lightweight Command Launch Units (LWCLUs). Also included are missile simulation rounds; Javelin support equipment; hand and measuring tools; books and publications; power plus distribution equipment; component parts and support equipment; life cycle support and other technical assistance; gunner training; ammunition officer’s training; System Integration and Checkout (SICO); maintenance training; Tactical Aviation and Ground Munitions (TAGM); and other related elements of logistics and program support. The total estimated cost is $260 million. The prime contractors will be the Javelin Joint Venture between Lockheed Martin in Orlando, FL, and RTX Corporation in Tucson, AZ. There are no known offset agreements in connection with this potential sale.

 

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

 

 

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

 

 

Clarification of Controls on Radiation Hardened Integrated Circuits and Expansion of License Exception GOV

 

March 13, 2024: 89 Fed. Reg. 18353: The Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) to clarify controls on radiation hardened integrated circuits, including controls on computer and telecommunications equipment incorporating such radiation hardened integrated circuits. This rule also addresses certain scenarios that apply to certain integrated circuits acquired, tested, or otherwise used by or for the United States Government and affirms the availability of License Exception GOV for such items when pursuant to an official written request or directive from the Department of Defense or the Department of Energy. Lastly, this rule expands the availability of License Exception GOV for microelectronics items being exported, reexported, or transferred (in-country) in furtherance of a contract between the exporter, reexporter, or transferor and a department or agency of the U.S. Government when the contract provides for the export, reexport, transfer (in-country) of the item by the exporter, reexporter, or transferor in order to remove export control obstacles for official business of the U.S. Government, including the Department of Energy and the Department of Defense.

 

https://www.federalregister.gov/documents/2024/03/13/2024-05267/clarification-of-controls-on-radiation-hardened-integrated-circuits-and-expansion-of-license

 

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Commerce Updates Rules To Further Restrict Exports To Nicaragua Due To Foreign Policy Concerns

 

March 15, 2024: 89 Fed. Reg. 18780: U.S. Commerce Department’s Bureau of Industry and Security (BIS) published revisions to the Export Administration Regulations (EAR) to apply more restrictive treatment to exports and reexports to Nicaragua of items subject to the EAR.  This action is consistent with the State Department’s recent addition of Nicaragua to the list of proscribed countries under Section 126.1 of the International Traffic in Arms Regulations. BIS’s amendments also address concerns regarding the Nicaraguan Government’s human rights abuses against citizens and civil society groups, as well as the government’s continuing military and security cooperation with Russia. Specifically, BIS is moving Nicaragua from Country Group B to Country Group D:5, a more restrictive country grouping, applying a stricter licensing policy for items controlled for national security reasons, and making the country subject to ‘military end use’ and ‘military end user’ restrictions.

 

https://www.bis.doc.gov/index.php/about-bis/newsroom/press-releases and

https://www.bis.doc.gov/index.php/component/docman/?task=doc_download&gid=3463

 

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BIS Imposes Stricter End-User Controls: Ensuring Consistency with OFAC Programs

 

March 20, 2024: 89 Fed. Reg. 20107: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) released a final rule to impose additional restrictions under the Export Administration Regulations (EAR) on persons identified under fourteen sanctions programs, on the List of Specially Designated Nationals and Blocked Persons (SDN List) maintained by the Department of the Treasury’s Office of Foreign Assets Control (OFAC). This action builds on long-standing end-user restrictions under the EAR.

 

While the EAR has for many years restricted the export, reexport, and transfer (in-country) transactions involving certain persons and entities identified on the SDN List or pursuant to certain statutory authorities, this rule ensures that persons and entities blocked under fourteen OFAC sanctions programs will also automatically be subject to stringent export, reexport, and transfer (in-country) controls under the EAR. The fourteen OFAC sanctions programs consist of:

 

  • Seven Executive Orders related to Russia’s harmful foreign activities, including its aggression in Ukraine dating back to its 2014 annexation of Crimea as well as the recent further invasion in 2022 and the undermining of democratic processes or institutions in Belarus (EOs 13405, 13660, 13661, 13662, 13685, 14024, and 14038);
  • Two programs related to terrorism (Foreign Terrorist Organizations Sanctions Regulations and Global Terrorism Sanctions Regulations);
  • The Weapons of Mass Destruction Proliferators Sanctions Regulations; and Four programs related to narcotics trafficking and other criminal networks (EOs 13581 and 1 14059, the Narcotics Trafficking Sanctions Regulations, and the Foreign Narcotics Kingpin Sanctions Regulations)

 

https://www.bis.doc.gov/index.php/component/docman/?task=doc_download&gid=3466 and

https://www.bis.doc.gov/index.php/about-bis/newsroom/press-releases and

https://www.federalregister.gov/documents/2024/03/21/2024-06067/export-administration-regulations-end-user-controls-imposition-of-restrictions-on-certain-persons

 

 

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BIS Updated Website

 

March 20, 2024: The Bureau of Industry and Security (BIS) has moved websites. You can now find it at https://www.bis.gov/

 

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BIS ANNUAL Update – Assistant Secretary Speech Highlights

 

March 28, 2024: Assistant Secretary for Export Enforcement Matthew S. Axelrod gave BIS’s 2024 update on export controls and policy. He highlighted 4 key actions taken by BIS as follows:

 

  1. Updated guidance for freight forwarders (including antiboycott guidance) is on the BIS website.

 

  1. A new “Don’t Let This Happen to You” (enforcement action summary document) packet is available on the BIS website. This captures many new actions since the Russian invasion of Ukraine.

 

  1. A list of parties requiring engagement with a foreign boycott is now available on the BIS website. This list was created from data provided in response to a new field on the OAC antiboycott reporting form (the field was added to the form last year).
  2. U.S. companies identified as having certain risky counterparties by BIS (based on, it seems, AES data) are being sent “red flag letters.” These letters now demonstrate how those counterparties are risky by providing “commercially available datasets” identifying those counterparties (over 600 foreign companies) as continuing to export to Russia. Contacted exporters are being encouraged not to export to these potentially diversionary parties. 20 companies have received these notices so far.

 

Additional Facts:

 

  • Russia and China prohibited diversion of US goods to these countries continue to be a primary focus for BIS.

 

  • In 2023, BIS received over 1,100 license application for exports to Russia, the majority for EAR99 medical products. The agency is now working on developing a License Exception to simplify the process for exporters.
  • BIS could soon consider controls on exports of EAR99 software to Russia to align with international counterparts.

 

  • Publication of a new Advanced Computing Semiconductor clarifications and conforming changes rule is imminent.

 

 

  • BIS is now sending letters to U.S. companies that identify their foreign customers that have been determined to be exporting high-priority items to Russia.

 

https://www.bis.gov/speeches/remarks-prepared-delivery-assistant-secretary-export-enforcement-matthew-s-axelrod-biss and

https://www.bis.doc.gov/index.php/documents/enforcement/1005-don-t-let-this-happen-to-you-1/file

 

See below for more expanded articles on some of the update.

 

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BIS Updates Freight Forwarder Guidance And Best Practices

 

March 28, 2024: the Department of Commerce’s Bureau of Industry and Security (BIS) published a document containing updated guidance and best practices for freight forwarders and exporters who use freight forwarders to help them ensure compliance with U.S. export controls and regulatory requirements.

 

The freight forwarding community has a key role and obligation in securing the global supply chain and stemming the flow of illegal exports. Fulfilling this role helps to prevent activities contrary to U.S. national security and foreign policy interests, including the proliferation of weapons of mass destruction, destabilizing military activities, and the enabling of human rights abuses. The guidance and best practices document contains discussions on: freight forwarder roles and responsibilities; responsibilities with respect to routed and non-routed exports; expectations of the exporter or U.S. principal party in interest (USPPI); considerations in selecting a freight forwarder; how the antiboycott regulations apply to freight forwarders; and red flags specific to freight forwarders and USPPIs.

 

https://www.bis.gov/press-release/bis-updates-freight-forwarder-guidance-and-best-practices and

https://www.bis.doc.gov/index.php/all-articles/24-compliance-a-training/export-management-a-compliance/48-freight-forwarder-guidance

 

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BIS Issues New Resources To Facilitate Antiboycott Compliance

 

March 28, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) published a new resource for companies, financial institutions, freight forwarders, and others to help them identify boycott-related requests they may receive during the regular course of business. The resource is a public list of entities who have been identified as having made a boycott-related request in reports received by BIS. The list is posted on the Office of Antiboycott Compliance (OAC) webpage with the objective of helping U.S. persons comply with the antiboycott regulations set forth in Part 760 of the Export Administration Regulations, 15 CFR Parts 730-774 (EAR).

 

Each entity on this list has been recently reported to BIS on a boycott request report form, as required by Section 760.5 of the EAR, as having made a boycott-related request in connection with a transaction in the interstate or foreign commerce of the United States. The list is not exhaustive and will be updated quarterly. If you believe that you have been listed in error or would like to discuss the listing, please contact the OAC.

 

U.S. persons are encouraged to diligently review transaction documents from all sources, but especially transaction documents with or involving these listed parties – given that they’ve been identified by others as a source of boycott requests – to identify possible boycott-related language and to determine whether U.S. persons have a reporting requirement to BIS pursuant to Part 760 of the EAR. The boycott request reporting form can be found here.

 

https://www.bis.gov/press-release/bis-issues-new-resource-facilitate-antiboycott-compliance and

https://www.bis.doc.gov/index.php/documents/policy-guidance/3301-strengthening-antiboycott-reporting-and-compliance/file and

https://www.bis.doc.gov/index.php/component/docman/?task=doc_download&gid=3485 and

https://www.bis.doc.gov/index.php/enforcement/oac?id=300

 

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U.S. Census Bureau

 

Tips on How to Resolve AES Response Messages

 

March 18, 2024: When a shipment is filed to the AES, a system response message is generated and indicates whether the shipment has been accepted or rejected.  If the shipment is accepted, the AES filer receives an Internal Transaction Number (ITN) as confirmation.  Though the shipment is accepted, the filer may still receive a Verify Message, Compliance Alert, Informational Message or Warning Message along with their ITN.  However, if the shipment is rejected, a Fatal Error notification is received and must be corrected to receive a valid ITN.

 

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

 

Response Code: 118

Narrative: Carrier Code Missing

Severity: Fatal

Reason: The Carrier ID (SCAC/ IATA) is missing.

Resolution: The Carrier ID identifies the carrier that transports the goods out of the United States. The Standard Carrier Alpha Code (SCAC) is valid for vessel, rail, and truck shipments. The International Air Transport Association (IATA) code is valid for air shipments.

Verify the Carrier ID and Mode of Transport, correct the shipment and resubmit.

 

Response Code: 649

Narrative: Quantity 1 Cannot Exceed Shipping Weight

Severity: Fatal

Reason: The Unit of Measure 1 for the reported Schedule B/HTS requires kilograms and Quantity 1 exceeds the Shipping Weight.

Resolution: For the Schedule B/HTS reported, Quantity 1 must be reported in kilograms. Quantity 1 in kilograms cannot exceed the Shipping Weight.

Verify the Quantity 1 and Shipping Weight, correct the shipment and resubmit.

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

 

Appendix A – Commodity Filing Response Messages

 

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NOTICE: Expansion of Data Elements in the AES 203 Report

 

March 20, 2024: There are three different export reports provided in the Automated Commercial Environment (ACE) system: the Automated Export System (AES) 201 Filer Report, the AES 202 USPPI Report and the AES 203 USPPI Routed Report.  At the request of the trade community, the U.S. Census Bureau along with the U.S. Customs and Border Protection has expanded the AES 203 Report to include ten additional data elements.  The Census Bureau authorizes that the additional data elements do not compromise the competitiveness between the USPPI and the FPPI, and the expanded report provides a greater visibility to users to measure compliance with routed export transactions.  The following data elements will be added to AES 203 Report effective March 22, 2024:

  • USPPI Contact Name
  • USPPI Contact Phone
  • Forwarder Company Name
  • Forwarder Contact Name
  • Forwarder Contact Phone
  • Unit of Measure (Quantity 1)
  • Unit of Measure (Quantity 2)
  • Late File Indicator
  • License Type Code
  • License Number

For more information or questions regarding AES Export Reports, please contact the U.S. Census Bureau’s Data User and Trade Outreach Branch at 1-800-549-0595, Option 5 or through email at exportreports@census.gov.

 

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New BIS License Types C67 ((NAC) Notification Required)) and C68 (NAC) (No Notification Required) – for exports authorized under License Exception Notified Advanced Computing (NAC)

 

March 22, 2024: The Department of Commerce, Bureau of Industry and Security (BIS) published an interim final rule with an effective date of October 17, 2023 for most provisions.  Among other actions, this interim final rule established a new License Exception Notified Advanced Computing (NAC) in § 740.8 of the Export Administrations Regulations (EAR), 15 C.F.R. parts 730 – 774. This license exception as specified under the paragraph (a) (Eligibility requirements) authorizes the export, reexport, and transfer (in-country) of any item classified in ECCNs 3A090, 4A090, 3A001.z, 4A003.z, 4A004.z, 4A005.z, 5A002.z, 5A004.z, 5A992.z, 5D002.z, or 5D992.z, except for items designed or marketed for use in a datacenter and meeting the parameters of 3A090.a.

New License Code C67 (NAC) (Notification required)

An update has been made to AES to create License Type Code C67 “Notified Advanced Computing Authorized” (NAC) (Notification required).

An update has been made to AES to create new License Code C67 “Notified Advanced Computing” (NAC), which authorizes certain exports and reexports of any item classified in ECCNs 3A090, 4A090, 3A001.z, 4A003.z, 4A004.z, 4A005.z, 5A002.z, 5A004.z, 5A992.z, 5D002.z, or 5D992.z, except for items designed or marketed for use in a datacenter and meeting the parameters of 3A090.a.  The notification requirements under NAC are limited to exports and reexports to Macau or any destination specified in Country Group D:5, or to an entity headquartered in, or with an ultimate parent headquartered in, Macau or a destination specified in Country Group D:5, wherever located.   Transactions under NAC must meet all of the applicable criteria identified under paragraph § 740.8(a) and must comply with the restrictions set forth in paragraph § 740.8(b).

The full terms of License Exception NAC are described in § 740.8.

AES filers must adhere to the following new reporting when using C67 (NAC) (Notification required) to prevent the return of fatal errors from AES:

  • Report License Code: C67 Notified Advanced Computing (NAC) (Notification required), if advanced notification was required.
  • Report License Number: Report the NAC confirmation number “(A######)” received from BIS in the license number block.
  • Allowable ECCNs: 3A090, 4A090, 3A001, 4A003, 4A004, 4A005, 5A002, 5A004, 5A992, 5D002, or 5D992.
  • Allowable countries: All destinations.
  • “.z” must be entered as the first characters to appear in the Commodity Description block for 3A001.z, 4A003.z, 4A004.z, 4A005.z, 5A002.z, 5A004.z, 5A992.z, 5D002.z, or 5D992.z.
  • Allowable Export Information Codes: All except UG
  • Allowable Modes of Transportation: All except ‘70’ (Fixed Transport)

New License Code C68 (NAC) (NO notification required)

An update has been made to AES to create License Type Code C68 “Notified Advanced Computing Authorized” (NAC) (NO notification required)

An update has been made to AES to create new License Code C68 “Notified Advanced Computing” (NAC) (NO notification required), which authorizes certain exports, reexports, and transfers (in-country) of any item classified in ECCNs 3A090, 4A090, 3A001z, 4A003.z, 4A004.z, 4A005.z, 5A002.z, 5A004.z, 5A992.z, 5D002.z, or 5D992.z to destinations specified in Country Group D:1 and D:4, and transfers (in-country) to Macau and destinations in Country Group D:5, for which no notification is required.  Transactions under NAC must meet all of the applicable criteria identified under paragraph § 740.8(a) and must comply with the restrictions set forth in paragraph § 740.8(b).

The full terms of License Exception NAC are described in § 740.8.

AES filers must adhere to the following new reporting when using C68 (NAC) (No notification required) to prevent the return of fatal errors from AES:

  • Report License Code: C68 Notified Advanced Computing (NAC) (No notification required), if no advanced notification was required.
  • Report License Number: Report “NAC” in the license number block.
  • Allowable ECCNs: 3A090, 4A090, 3A001, 4A003, 4A004, 4A005, 5A002, 5A004, 5A992, 5D002, or 5D992.
  • Allowable countries: Destinations specified in Country Groups D:1, D:4, and D:5.
  • “.z” must be entered as the first characters to appear in the Commodity Description block for 3A001.z, 4A003.z, 4A004.z, 4A005.z, 5A002.z, 5A004.z, 5A992.z, 5D002.z, or 5D992.z.
  • Allowable Export Information Codes: All except UG
  • Allowable Modes of Transportation: All except ‘70’ (Fixed Transport)

https://www.bis.doc.gov/index.php/documents/federal-register-notices-1/3369-88-fr-73458-acs-ifr-10-25-23/file

 

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The U.S. Department of Justice, the U.S. Department of Commerce, and the U.S. Department of the Treasury’s Office of Foreign Assets Control

 

Publication of Tri-Seal Compliance Note

 

March 6, 2024: The U.S. Department of Justice, the U.S. Department of Commerce, and the U.S. Department of the Treasury’s Office of Foreign Assets Control, have issued a Tri-Seal Compliance Note: Obligations of foreign-based persons to comply with U.S. sanctions and export control laws.

 

https://ofac.treasury.gov/recent-actions/20240306_33 and

https://ofac.treasury.gov/media/932746/download?inline

 

LATEST SANCTIONS FINES & PENALTIES

 

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

 

Fines and Penalties

 

March 1, 2024: Maxim Marchenko, a Russian citizen who has resided in Hong Kong, pleaded guilty to charges of money laundering and smuggling goods from the United States. Marchenko was arrested in September 2023.

 

Marchenko and two co-conspirators operated an illicit procurement network in Russia, Hong Kong, and elsewhere overseas. This procurement network has fraudulently obtained from U.S. distributors large quantities of dual-use, military grade microelectronics, on behalf of Russia-based end users. To carry out this scheme, Marchenko and his co-conspirators used shell companies based in Hong Kong and other deceptive means to conceal from U.S. Government agencies and U.S. distributors that the OLED micro-displays were destined for Russia.

 

The technology that Marchenko and his co-conspirators fraudulently procured have significant military applications, such as in rifle scopes, night-vision googles, thermal optics and other weapon systems.

 

https://www.justice.gov/opa/pr/russian-international-money-launderer-pleads-guilty-illicitly-procuring-large-quantities-us

 

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March 5, 2024: A federal criminal complaint was unsealed in the District of Arizona charging Abraham Chol Keech, 44, of Utah, and Peter Biar Ajak, 40, of Maryland, with conspiring to purchase and illegally export millions of dollars’ worth of fully automatic rifles, grenade launchers, Stinger missile systems, hand grenades, sniper rifles, ammunition, and other export-controlled items from the United States to South Sudan, in violation of the Arms Export Control Act (AECA) and the Export Control Reform Act (ECRA).

 

https://www.justice.gov/opa/pr/two-defendants-arrested-conspiring-illegally-export-weapons-south-sudan

 

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March 7, 2024: A federal grand jury indicted Leon Ding, charging him with four counts of theft of trade secrets in connection with an alleged plan to steal from Google LLC (Google) proprietary information related to artificial intelligence (AI) technology. Ding, 38, a national of the People’s Republic of China and resident of Newark, California, transferred sensitive Google trade secrets and other confidential information from Google’s network to his personal account while secretly affiliating himself with PRC-based companies in the AI industry.

 

https://www.justice.gov/opa/pr/chinese-national-residing-california-arrested-theft-artificial-intelligence-related-trade

 

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March 7, 2024: Korbein Schultz, a U.S. Army soldier and intelligence analyst, was arrested at Fort Campbell following an indictment by a federal grand jury charging him with conspiracy to obtain and disclose national defense information, exporting technical data related to defense articles without a license, conspiracy to export defense articles without a license, and bribery of a public official.

 

During the course of the conspiracy, Schultz also sent Conspirator A three documents that violated the Arms Export Control Act (AECA). The three documents included an Air Force Tactics Techniques and Procedures manual for the HH-60W helicopter, an Air Force Tactics Techniques and Procedures manual for the F22-A fighter aircraft, and an Air Force Tactics Techniques and Procedures manual for intercontinental ballistic missiles.

 

https://www.justice.gov/opa/pr/us-army-intelligence-analyst-arrested-and-charged-conspiracy-obtain-and-disclose-national and

https://www.justice.gov/opa/media/1341561/dl?inline

 

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March 14, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with EFG International AG, a Switzerland-based global private banking group.  EFG has agreed to pay $3,740,442 to settle its potential civil liability for processing 873 securities transactions in apparent violation of the Cuban Asset Control Regulations, the Kingpin Act, and Executive Order 14024. The settlement amount reflects OFAC’s determination that EFG’s apparent violations were voluntarily self-disclosed and were non-egregious.

 

https://ofac.treasury.gov/media/932766/download?inline

 

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March 20, 2024: 89 Fed. Reg. 19799: On May 12, 2022, in the U.S. District Court for the District of Arizona, Thomas Allen Glomski (“Glomski”) was convicted of violating 18 U.S.C. 371 and 18 U.S.C. 554(a). Specifically, Glomski was convicted of conspiring to smuggle and smuggling ammunition from the United States to Mexico. As a result of his conviction, the Court sentenced Glomski to time served, 36 months of supervised release, and a $200 special assessment.

 

https://www.federalregister.gov/documents/2024/03/20/2024-05818/in-the-matter-of-thomas-allen-glomski-8030-e-lakeside-parkway-apt-2207-tucson-az-85730-order-denying

 

*******

March 20, 2024: 89 Fed. Reg. 19801: On January 17, 2023, in the U.S. District Court for the Southern District of Texas, Oziel Zuniga (“Zuniga”) was convicted of violating 18 U.S.C. 554(a). Specifically, Zuniga was convicted of smuggling a Romarm/Cugir, Model Draco, 7.62×39 mm caliber pistol from the United States to Mexico. As a result of his conviction, the Court sentenced Zuniga to 51 months of imprisonment, three years of supervised release, and a $100 assessment.

 

https://www.federalregister.gov/documents/2024/03/20/2024-05808/in-the-matter-of-oziel-zuniga-inmate-number-00783-579-inmate-number-00783-579-fci-beaumont-low

 

*******

 

March 20, 2024: 89 Fed. Reg. 19805: On February 14, 2022, in the U.S. District Court for the District of Arizona, Alejandro Valles (“Valles”) was convicted of violating 18 U.S.C. 554(a). Specifically, Valles was convicted of smuggling a M203 40mm grenade launcher barrel from the United States to Mexico. As a result of his conviction, the Court sentenced Valles to 15 months of imprisonment with credit for time served, three years of supervised release, and a special $100 assessment.

 

https://www.federalregister.gov/documents/2024/03/20/2024-05811/in-the-matter-of-alejandro-valles-507-19-n-eagle-eye-rd-aguila-az-85320-and-po-box-744-aguila-az

 

*******

 

March 20, 2024: 89 Fed. Reg. 19805: On June 26, 2023, in the U.S. District Court for the Central District of California, Igor Panchernikov (“Panchernikov”) was convicted of violating Section 38 of the Arms Export Control Act (22 U.S.C 2778) (“AECA”). Specifically, Panchernikov was convicted of conspiring to knowingly and willfully export from the United States to Russia defense articles, including thermal imaging riflescopes and night vision goggles, that were covered by the United States Munitions List without first obtaining the required license or written approval from United States Department of State. As a result of his conviction, the Court sentenced Panchernikov to 27 months in prison, one year of supervised release and a $100 special assessment.

 

https://www.federalregister.gov/documents/2024/03/20/2024-05814/in-the-matter-of-igor-panchernikov-13870-ellis-park-trl-corona-ca-92880-3312-order-denying-export

 

*******

 

March 20, 2024: 89 Fed. Reg. 19800: On January 19, 2023, in the U.S. District Court for the Southern District of Miami, Hendel Laurent (“Laurent”) was convicted of violating 50 U.S.C. 4819. Specifically, Laurent was convicted of knowingly and willfully attempting to export and attempting to cause the export of firearms and related commodities, specifically, non-automatic and semi-automatic firearms equal to .50 caliber (12.7 mm) or less, and detachable magazines with a capacity of greater than 16 rounds specially designed for those firearms, from the United States to Haiti, without first having obtained the required licenses from the U.S. Department of Commerce. As a result of his conviction, the Court sentenced Laurent to 46 months of imprisonment, two years of supervised release and a $100 assessment.

 

https://www.federalregister.gov/documents/2024/03/20/2024-05812/in-the-matter-of-hendel-laurent-inmate-number-13937-510-fpc-pensacola-federal-correctional

 

*******

 

March 20, 2024: 89 Fed. Reg. 19802: On June 21, 2023, in the U.S. District Court for the District of Colorado, Victor Avalos-Tavera (“Avalos-Tavera”) was convicted of violating 18 U.S.C. 554(a). Specifically, Avalos-Tavera was convicted of smuggling from the United States to Mexico several firearms. As a result of his conviction, the Court sentenced Avalos-Tavera to 57 months of imprisonment and a $200 assessment.

 

https://www.federalregister.gov/documents/2024/03/20/2024-05815/in-the-matter-of-victor-avalos-tavera-aka-leonardo-torres-avalos-inmate-number-34749-013-fci-herlong

 

*******

 

March 20, 2024: 89 Fed. Reg. 19803: On September 24, 2019, in the U.S. District Court for the District of Utah, Ron Rockwell Hansen (“Hansen”) was convicted of violating 18 U.S.C. 794. Specifically, Hansen was convicted of attempting espionage by knowingly and unlawfully attempting to communicate, deliver, and transmit directly and indirectly to the People’s Republic of China, documents and information relating to the national defense of the United States including documents marked as SECRET//NOFORN that related to military readiness in a particular region, with intent and reason to believe that such documents and information would be used to the injury of the United States and to the advantage of any foreign nation. As a result of his conviction, the Court sentenced Hansen to 10 years of imprisonment, 60 months of supervised release and a $100 assessment.

 

https://www.federalregister.gov/documents/2024/03/20/2024-05810/in-the-matter-of-ron-rockwell-hansen-inmate-number-49078-086-fci-safford-federal-correctional

 

*******

 

March 20, 2024: 89 Fed. Reg. 19804: On April 13, 2023, in the U.S. District Court for the Southern District of Texas, Noe De Hoyos (“Hoyos”) was convicted of violating 18 U.S.C. 554(a). Specifically, Hoyos was convicted of smuggling from the United States to Mexico various firearms, various firearms accessories and various ammunition without the required license or written approval from the Department. As a result of his conviction, the Court sentenced Hoyos to 51 months of imprisonment, three years of supervised release, and a $100 assessment.

 

https://www.federalregister.gov/documents/2024/03/20/2024-05816/in-the-matter-of-noe-de-hoyos-inmate-number-27637-509-fci-beaumont-medium-federal-correctional

 

*******

 

March 20, 2024: 89 Fed. Reg. 19806: On December 19, 2022, in the U.S. District Court for the Western District of Texas, Martin Najera (“Najera”) was convicted of violating 18 U.S.C. 371 and 18 U.S.C. 554(a). Specifically, Najera was convicted of conspiring to smuggle firearms from the United States to Mexico. As a result of his conviction, the Court sentenced Najera to 37 months of imprisonment, three years of supervised release, restitution of $7,513.70 and a $100 special assessment.

 

https://www.federalregister.gov/documents/2024/03/20/2024-05817/in-the-matter-of-martin-najera-inmate-number-00416-510-fci-texarkana-federal-correctional

 

*******

 

March 20, 2024: 89 Fed. Reg. 19807: On July 19, 2022, in the U.S. District Court for the Southern District of Texas, Jonathan Guadalupe Almanza (“Almanza”) was convicted of violating 18 U.S.C. 554(a). Specifically, Almanza was convicted of smuggling one Glock 17 GEN5 pistol with three magazines, one Stoeger 9mm STR–9 pistol with one magazine, and one Springfield 9mm Hellcat pistol with two magazines without a license or written approval from the United States Department of Commerce. As a result of his conviction, the Court sentenced Almanza to 38 months of imprisonment, three years of supervised release, and $100 assessment.

 

https://www.federalregister.gov/documents/2024/03/20/2024-05809/in-the-matter-of-jonathan-guadalupe-almanza-311-sally-ave-san-juan-tx-78589-order-denying-export

 

*******

 

March 26, 2024: 89 Fed. Reg. 20942: On November 29, 2022, in the U.S. District Court for the Eastern District of Texas, Michael David Mummert (“Mummert”) was convicted of violating 18 U.S.C. 371 and 18 U.S.C. 554. Specifically, Mummert was convicted of conspiring to smuggle firearms and firearms parts from the United States to Mexico without first having obtained the required export license and authorization from the United States Department of State or United States Department of Commerce. As a result of his conviction, the Court sentenced him to 36 months in prison, three years of supervised release, a $100 assessment and a $10,000 fine.

 

https://www.federalregister.gov/documents/2024/03/26/2024-06267/in-the-matter-of-michael-david-mummert-inmate-number-38011-509-us-penitentiary-po-box-1000

 

*******

 

March 26, 2024: 89 Fed. Reg. 20943: On April 7, 2023, in the U.S. District Court for the Southern District of New York, Niloufar Bahadorifar (“Bahadorifar”), was convicted of violating the International Emergency Economic Powers Act (50 U.S.C 1701, et seq.) (“IEEPA”). Specifically, Bahadorifar was convicted of conspiring to provide services to Iran and the Government of Iran from the United States without first obtaining the required approval from U.S. Department of Treasury, Office of Foreign Assets Control. As a result of her conviction, the Court sentenced Bahadorifar to 48 months of imprisonment, three years of supervised release, and a $200 assessment.

 

https://www.federalregister.gov/documents/2024/03/26/2024-06268/in-the-matter-of-niloufar-bahadorifar-6417-spectrum-irvine-ca-92618-order-denying-export-privileges

 

*******

 

March 26, 2024: 89 Fed. Reg. 20943: On August 29, 2022, in the U.S. District Court for the Southern District of Texas, Juan Jose Roque (“Roque”) was convicted of violating 18 U.S.C. 554. Specifically, Roque was convicted of smuggling from the United States to Mexico, 12,800 rounds of 7.62 x 39mm ammunition, 150 rounds of 38 Special ammunition 60 rounds of .223 caliber ammunition and one Stoeger Cougar 9mm pistol, without a license or written approval from the U.S. Department of Commerce. As a result of his conviction, the Court sentenced him to 46 months in prison, and a $100 special assessment.

 

https://www.federalregister.gov/documents/2024/03/26/2024-06266/in-the-matter-of-juan-jose-roque-inmate-number-74029-509-fmc-fort-worth-po-box-15330-fort-worth-tx

 

*******

 

March 28, 2024: In a superseding indictment returned by a grand jury, a citizen of the Republic of Latvia was charged with crimes related to a years-long conspiracy to sell sophisticated avionics equipment to Russian companies, in violation of U.S. export laws. The defendant is the third to be arrested and charged in connection with the conspiracy led by a Kansas company and two U.S. nationals.

 

According to the superseding indictment, Oleg Chistyakov, also known as Olegs Čitsjakovs, 55, conspired with U.S. citizens Cyril Gregory Buyanovsky and Douglas Edward Robertson, of Kansas, to facilitate the sale, repair, and shipment of U.S. avionics equipment to customers in Russia and in other countries that operate Russian-built aircraft, including the Federal Security Service of Russia (FSB). Chistyakov was arrested on March 19 near Riga, Latvia, and remains detained pending extradition proceedings. In December 2023, Buyanovsky pleaded guilty to conspiracy and conspiracy to commit money laundering and consented to the forfeiture of over $450,000 worth of avionics equipment and a $50,000 personal forfeiture judgment.

 

https://www.justice.gov/opa/pr/latvian-broker-arrested-allegedly-smuggling-advanced-us-aircraft-technology-russia

 

*******

 

March 29, 2024: Fares Abdo Al Eyani, 41, of Oakland, California, was sentenced to 12 months and a day in prison, followed by three years of supervised release, for conspiring to export defense articles and attempting to export defense articles.

 

Court documents establish that the items Al Eyani attempted to export — four firearms, magazines, ammunition, and night-vision rifle scopes — were defense articles prohibited from export without a license by the AECA and the ITAR. Al Eyani did not have a license to export the defense articles.

 

In a separate sentencing, Al Eyani’s wife, Saba Mohsen Dhaifallah, 42, also of Oakland, was sentenced to three years of probation for making false statements to FBI special agents during the investigation of this matter.

 

https://www.justice.gov/opa/pr/california-man-sentenced-attempting-illegally-export-firearms-and-night-vision-rifle-scopes

 

Sanctions

 

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

 

March 1, 2024: 89 Fed. Reg. 15744: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended the “Darfur Sanctions Regulations”.  The newly updated “Sudan Stabilization Sanctions Regulations,” still found at 31 CFR part 546, implement Executive Order 14098 of May 4, 2023, as well as additional administrative updates.

 

https://ofac.treasury.gov/media/932691/download?inline and

https://ofac.treasury.gov/recent-actions/20240301

 

*******

March 1, 2024: 89 Fed. Reg. 15740: OFAC published a final rule to update terms across several sanctions programs’ regulations, to reflect current office names and email addresses, as well as to update grammatical terminology.

 

https://ofac.treasury.gov/media/932696/download?inline and

https://ofac.treasury.gov/recent-actions/20240301

 

*******

 

March 1, 2024: OFAC has published Frequently Asked Question (1167).

 

Question 1167: How does Venezuela General License (GL) 45B differ from Venezuela GL 45A?

 

Answer: On February 29, 2024, OFAC issued Venezuela GL 45B, “Authorizing Certain Repatriation Transactions Involving Consorcio Venezolano de Industrias Aeronáuticas y Servicios Aéreos, S.A.,” which narrowed the scope of transactions previously authorized by GL 45A.  GL 45B no longer authorizes transactions ordinarily incident and necessary to non-commercial flights between non-U.S. jurisdictions in the Western Hemisphere and Venezuela that are not exclusively for the purposes of repatriation.

 

https://ofac.treasury.gov/faqs/1167 and

https://ofac.treasury.gov/recent-actions/20240301

 

*******

 

March 4, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 11 individuals, including Zimbabwe’s President Emmerson Mnangagwa, and three entities for their involvement in corruption or serious human rights abuse pursuant to E.O. 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act.

 

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

 

  • Mnangagwa, Auxillia, of Zimbabwe; and
  • Tapfumaneyi, Asher Walter of Zimbabwe.

 

https://home.treasury.gov/news/press-releases/jy2154 and

https://ofac.treasury.gov/media/932741/download?inline and

https://home.treasury.gov/system/files/136/Treasury-2021-sanctions-review.pdf

 

*******

 

March 5, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two individuals and five entities associated with the Intellexa Consortium for their role in developing, operating, and distributing commercial spyware technology used to target Americans, including U.S. government officials, journalists, and policy experts. The proliferation of commercial spyware poses distinct and growing security risks to the United States and has been misused by foreign actors to enable human rights abuses and the targeting of dissidents around the world for repression and reprisal.

 

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

 

  • Dillan, Tal Jonathan of Israel; and
  • Hamous, Sara Aleksandra Fayssal of Poland.

 

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

 

  • Cytrox Ad of Macedonia;
  • Cytrox Holdings Zartkoruen Mukodo Reszvenytarsasag of Hungary;
  • Intellexa Limited of Ireland;
  • Iyellexa S.A. of Greece; and
  • Thalestris Limited of Ireland.

 

https://ofac.treasury.gov/recent-actions/20240306 and

https://home.treasury.gov/news/press-releases/jy2155

 

*******

 

March 6, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) took additional action to target shipments of Iranian commodities undertaken by the network of Iran-based, Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF)-backed Houthi financial facilitator Sa’id al-Jamal. This action targeted two Hong Kong- and Marshall Islands-based ship owners and two vessels for their role in shipping commodities on behalf of al-Jamal, and follows a February 27 action targeting a related vessel, the ARTURA. The revenue generated through al-Jamal’s network continues to enable Houthi militant efforts, including ongoing and unprecedented attacks on international maritime commerce in the Red Sea and Gulf of Aden.

 

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

 

  • Hongkong Unitop Group Ltd of China; and
  • Reneez Shipping of the Marshall Islands.

 

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

 

  • Eternal Fortune (3E5962) Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9230907; MMSI 352003073 (vessel); and
  • Reneez (T8A3663) Crude Oil Tanker Palau flag; Vessel Registration Identification IMO 9232450; MMSI 511100508 (vessel).

 

https://ofac.treasury.gov/recent-actions/20240306 and

https://home.treasury.gov/news/press-releases/jy2159

 

*******

 

March 8, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two companies – one in Russia and one in the Central African Republic (CAR) – for their efforts in advancing Russia’s malign activities in CAR. These targets have played an important role enabling the Private Military Company ‘Wagner’ (Wagner Group) and, by extension, the activities of the Russian Federation. Those designated sought monetary gain from illicit natural resource extraction and provided material and financial support to the Wagner Group and other organizations associated with the enterprise of Yevgeniy Prigozhin, the former Wagner Group owner who died in August 2023 in a plane explosion in Russia.

 

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

 

  • Bois Rogue Sarlu of Central African Republic; and
  • Limited Liability Company Broker Expert of Russia

 

https://ofac.treasury.gov/recent-actions/20240308 and

https://home.treasury.gov/news/press-releases/jy2164

 

*******

 

March 11, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on 16 entities and individuals who compose an expansive business network spanning the Horn of Africa, the United Arab Emirates (UAE), and Cyprus that raises and launders funds for al-Shabaab, a terrorist group affiliated with al-Qa’ida.  Individuals within this network include influential businesspeople in the region that lend financial backing to al-Shabaab, a terrorist group responsible for some of the worst terrorist attacks in East Africa’s modern history.  These attacks have claimed the lives of thousands of innocent civilians.  These individuals and entities are being designated pursuant to Executive Order (E.O.) 13224, as amended, which targets terrorist groups and their enablers.

 

OFAC is also issuing Counter Terrorism General License 29, “Authorizing the Wind Down of Transactions Involving Haleel Commodities LLC”.

 

General License 29: All transactions prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), that are ordinarily incident and necessary to the wind down of any transaction involving Haleel Commodities LLC (Haleel Commodities), or any entity in which Haleel Commodities owns, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern daylight time, April 10, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the GTSR.

 

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

 

  • Abdullahi, Abdulkadir Omar of Kenya;
  • Awale, Mohamed Jumale Ali of Kenya;
  • Dini, Faysal Yusuf of Kenya;
  • Abdulaziz Yusuf of Somalia;
  • Haydar, Farhan Hussein of Somalia;
  • Hilowle, Omar Sheikh Ali of Somalia;
  • Mahmad, Hassan Abdirahman of Somalia;
  • Momahed, Abdikarin Farah of Somalia; and
  • Robel, Mohammed Artan of Sweden.

 

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

 

  • Crown Bus Services Limited of Kenya;
  • Haleel commodities L. L C. of the United Arab Emirates;
  • Haleel commodities limited of Kenya;
  • Haleel commodities ltd. Of Uganda;
  • Haleel finance ltd of Cyprus;
  • Haleel holdings ltd of Cyprus;
  • Haleel ltd of Cyprus; and
  • Qemat Al Najah General Trading L.L.C of the United Arab Emirates .

 

https://ofac.treasury.gov/recent-actions/20240311 and

https://home.treasury.gov/news/press-releases/jy2168 and

https://ofac.treasury.gov/media/932761/download?inline and

https://ofac.treasury.gov/media/932756/download?inline

 

*******

 

March 12, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action in coordination with the Kingdom of Bahrain against key Iran-based operatives and a financial facilitator for designated terrorist group Al-Ashtar Brigades. The Department of State designated Al-Ashtar Brigades as a Foreign Terrorist Organization and a Specially Designated Global Terrorist in 2018.

 

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

 

  • Al-Dammami, Hussein Ahmad ‘Abdallah Ahmad Hussein of Bahrain;
  • Alshofa, Ali Abdulnabi Ahmed Ebrahim M of Bahrain;
  • Salman, Isa Saleh Isa Mohamed of Bahrain; and
  • Sarhan, Hasan Ahmed Radhi Husain of Bahrain.

 

https://home.treasury.gov/news/press-releases/jy2171 and

https://ofac.treasury.gov/recent-actions/20240312

 

*******

 

March 13, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated three individuals who have contributed to Specially Designated National (SDN) and Republika Srpska (RS) President Milorad Dodik’s (Dodik) efforts to undermine the peace and stability of Bosnia and Herzegovina (BiH) by organizing and executing the commemoration of “Republika Srpska Day” (RS Day) on January 9, 2024, an activity determined to be unconstitutional in BiH. These individuals facilitated Dodik’s efforts to undermine the Dayton Peace Agreement (DPA) and the authority of the BiH Constitutional Court and the High Representative.

 

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

 

  • Golic, Srebrenka of Bosnia and Herzegovina;
  • Okuka, Branislav of Bosnia and Herzegovina; and
  • Pajic Basinac, Jelena Banja Luka of Bosnia and Herzegovina.

 

https://ofac.treasury.gov/recent-actions/20240313 and

https://home.treasury.gov/news/press-releases/jy2175

 

*******

 

March 15, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is taking action against Marshall Islands-registered shipping company Vishnu Inc., whose vessel, the LADY SOFIA, is involved in illicit shipments to the People’s Republic of China (PRC) in support of Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and Houthi financial facilitator Sa’id al-Jamal, who is sanctioned under U.S. counterterrorism authorities.

 

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

 

  • Vishnu Inc of Marshall Islands.

 

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

 

  • Lady Sofia (3ESB9) Crude Oil Tanker Panama flag; Executive Order 13886; Vessel Registration Identification IMO 9212759; MMSI 371698000 (vessel).

 

 

https://ofac.treasury.gov/recent-actions/20240315 and

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

 

*******

 

March 20, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) targeted three procurement networks –– based in Iran, Türkiye, Oman, and Germany –– that have supported Iran’s ballistic missile, nuclear, and defense programs. These networks have procured carbon fiber, epoxy resins, and other missile-applicable goods for Iran’s Islamic Revolutionary Guard Corps Aerospace Force Self Sufficiency Jihad Organization (IRGC ASF SSJO), Ministry of Defense and Armed Forces Logistics (MODAFL), other U.S.-designated entities in Iran’s defense industrial base, and Iran Centrifuge Technology Company (TESA), which is linked to the Atomic Energy Organization of Iran (AEOI).

 

OFAC designated two individuals and two entities for services they provided the Government of the Russian Federation (GoR) in connection with a foreign malign influence campaign, including attempting to impersonate legitimate media outlets.

 

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

 

  • Gambashidze, Ilya Andreevich of Russia;
  • Gok, Mahmut, Istanbul of Turkey;
  • Inanlu, Mitra of Iran;
  • Kanoglu, Hidayet, Rize, of Turkey;
  • Karimi, Maziar of Iran;
  • Shahmari Ghojeh Biklo, Rostam of Iran; and
  • Tupikin, Nikolai Aleksandrovich of Russia.

 

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

 

  • Alborz Organic Material Engineering Company of Iran;
  • Company Group Structura LLC of Russia;
  • DM Gold Kiymelti Madenler Anonim Sirketi of Turkey;
  • Gokler Dis Ticaret Limited Sirketi of Tukey;
  • Klas Kimyasal Urunler Ticaret Limited Sirketi of Turkey;
  • Mahmut Gok Skies Petroleum Dis Ticaret of Turkey;
  • Mazya Alardh Aldhabia LLC of Oman;
  • Mazixon Gmbh and Co KG of Germany;
  • Mazixon Verwaltungs GMBH of Germany;
  • Pishro Mobtaker Peyvand of Iran;
  • Social Design Agency of Russia; and
  • Tit Uluslararasi Nakliyat Deri Tekstil Gida Sanayi Ve Ticaret Limited Sikreti of Turkey.

 

https://ofac.treasury.gov/recent-actions/20240320 and

https://home.treasury.gov/news/press-rleases/jy2194 and

https://home.treasury.gov/news/press-rleases/jy2195

 

*******

 

March 21, 2024:  The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Wendy Carolina Morales Urbina, Nicaragua’s Attorney General, for being complicit in the Ortega-Murillo regime’s oppression. This action, taken pursuant to Executive Order (E.O.) 13851, as amended, targets a key actor in the Nicaraguan regime’s unjust persecution of political prisoners and civil society within the country.

 

In 2018, anti-government protests erupted in Nicaragua, prompting ongoing violent repression by the Ortega-Murillo regime. President Ortega and the Vice President, Rosario Murillo, Ortega’s wife, have consolidated power, suppressed popular protests, incarcerated political opponents, and silenced critical voices in the media or forced them into exile. President Ortega governs with a tight-knit group of trusted figures in the police, the military, and parliament. On February 9, 2023, President Ortega expelled 222 political prisoners and put them on a flight to Washington, D.C. According to the Nicaraguan government, the deportation of the prisoners was intended to protect peace and national security and those freed have been declared traitors who can never serve in Nicaraguan public office. As a result, Nicaragua stripped the 222 former political prisoners of their Nicaraguan citizenship.

 

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

 

  • Morales Urbina, Wendy Carolina of Nicaragua.

 

https://ofac.treasury.gov/recent-actions/20240321 and

https://home.treasury.gov/news/press-releases/jy2200

 

*******

March 22, 2024: Deputy Secretary of the Treasury Wally Adeyemo announced, alongside local leaders and law enforcement in Arizona, that the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned operatives in a Black Market Peso Exchange (BMPE) scheme to launder millions in illicit fentanyl proceeds for the Sinaloa Cartel. OFAC designated 15 Sinaloa Cartel members—several of whom are fugitives—and six Mexico-based businesses pursuant to Executive Order (E.O.) 14059. The Sinaloa Cartel, which is one of the most notorious and pervasive drug trafficking organizations in the world, is responsible for a significant portion of the illicit fentanyl and other deadly drugs trafficked into the United States.

 

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

 

  • Garcia Velazco, Jorge Alejandro, of Mexico
  • Gonzalez Cordero, Mayra Gisel, of Mexico
  • Larranaga Herrera, Jesus Norberto of Mexico
  • Leon Valdez, Jesus Manuel of Mexico
  • Lizarraga Martinez, Victor of Mexico
  • Lizarrage Sanchez, Karla Gabriela of Mexico
  • Marin Gonzalez, Arturo D’Artagnan of Mexico
  • Marin Gonzalez, Porthos, of Mexico
  • Nunez Herrera, Alan Gabriel of Mexico
  • Robledo Arredondo, Adilene Mayre of Mexico
  • Robledo Arredondo, Ivan Yarethof Mexico
  • Tirado Andrade, Jesus of Mexico
  • Verduzco Castro, Rolando of Mexico
  • Vergara Meza, Alexis of Mexico
  • Vergara Meza, Edy of Mexico

 

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

 

  • Bufaluss of Mexico
  • Celulandia Taller & Store SLRC of Mexico
  • Dulce Vulcan of Mexico
  • Royal Room Dress of Mexico
  • Smart Depot of Mexico
  • Total Look of Mexico

 

 

https://ofac.treasury.gov/recent-actions/20240322 and

https://home.treasury.gov/news/press-releases/jy2201 and

 

*******

 

March 25, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Wuhan Xiaoruizhi Science and Technology Company, Limited (Wuhan XRZ), a Wuhan, China-based Ministry of State Security (MSS) front company that has served as cover for multiple malicious cyber operations. OFAC is also designating Zhao Guangzong and Ni Gaobin, two Chinese nationals affiliated with Wuhan XRZ, for their roles in malicious cyber operations targeting U.S. entities that operate within U.S. critical infrastructure sectors, directly endangering U.S. national security. This action is part of a collaborative effort with the U.S. Department of Justice, Federal Bureau of Investigation (FBI), Department of State, and the United Kingdom Foreign, Commonwealth & Development Office (FCDO).

 

People’s Republic of China (PRC) state-sponsored malicious cyber actors continue to be one of the greatest and most persistent threats to U.S. national security, as highlighted in the most recent Office of the Director of National Intelligence Annual Threat Assessment.

 

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

  •  Ni, Gaobin of China; and
  • Zhao, Guangzong of China

 

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

 

  • Wuhan Xiaoruizhi Science And Technology Company, Limited of China.

 

https://home.treasury.gov/news/press-releases/jy2205 and

https://ofac.treasury.gov/recent-actions/20240325

 

*******

 

March 25, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned thirteen entities and two individuals for operating in the financial services and technology sectors of the Russian Federation economy including persons developing or offering services in virtual assets that enable the evasion of U.S. sanctions. Five entities were designated for being owned or controlled by OFAC-designated persons.

 

Many of the individuals and entities designated facilitated transactions or offered other services that helped OFAC-designated entities evade sanctions. These designations build upon OFAC’s February 23, 2024 action to target companies servicing Russia’s core financial infrastructure and curtail Russia’s use of the international financial system to further its war against Ukraine.

 

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

 

  • Bukanov, Timur Evgenyevich of Russia;
  • Kaigorodov, Igor Veniaminovich of Russia;

 

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

 

  • Autonomous Non-Profit Organization of Additional Professional Education Echelon Training Center of Russia;
  • Bitfingroup OU of Estonia;
  • Bitpapa IC FZC LLC of United Arab Emirates;
  • Crypto Explorer DMCC of Russia;
  • Joint-Stock Company Echelon Technologies of Russia;
  • Joint-Stock Company B-Crypto of Russia;
  • Limited Liability Company Cybersecurity Laboratory of Russia;
  • Limited Liability Company Echelon Innovations of Russia;
  • Limited Liability Company Key Information Systems of Russia;
  • Limited Liability Company Project Consulting Bureau of Russia;
  • Obschestvo S Organichennoy Osvetstvennostyu Atomaiz of Russia;
  • Obschestvo S Organichennoy Osvetstvennostyu Kripto Eksplorer of Russia;
  • Obschestvo S Organichennoy Osvetstvennostyu Laitkhaus of Russia;
  • Obschestvo S Organichennoy Osvetstvennostyu Sistemy Raspredelennogog Reyestra
  • of Russia;
  • Obschestvo S Organichennoy Osvetstvennostyu Tsentr Obrabotki Elektronnykh Platezhy of Russia ;
  • Obschestvo S Organichennoy Osvetstvennostyu Veb3 Integrator of Russia;
  • Obschestvo S Organichennoy Osvetstvennostyu Veb3 Teknologii of Russia
  • Tokentrust Holdings Limited of Russia; and

 

https://home.treasury.gov/news/press-releases/jy2204 and

https://ofac.treasury.gov/recent-actions/20240325

 

*******

 

March 26, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is sanctioning six entities, one individual and two tankers that are based or registered in Liberia, India, Vietnam, Lebanon, and Kuwait that have engaged in facilitating commodity shipments and financial transactions for the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), the Houthis, and Hizballah. This action, the sixth round of sanctions targeting the network of Iran-based, IRGC-QF-backed Houthi financial facilitator Sa’id al-Jamal since December 2023, represents yet another step in a concerted campaign to disrupt IRGC-QF finances and its support to terrorist proxies such as the Houthis.

 

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

 

  • Makarov, Aleksey of Russia.

 

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

 

  • Abyss Palau flag Vessel Registration Identification IMO 9157765; MMSI 511101287 (vessel); and
  • Dawn II Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9185530; MMSI 374100000 (vessel).

 

https://home.treasury.gov/news/press-releases/jy2209 and

https://ofac.treasury.gov/recent-actions/20240326

 

*******

 

March 26, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 11 individuals and entities supporting the regime of Syrian President Bashar Al-Assad through the facilitation of illicit financial transfers and trafficking of illegal drugs, as well as the extraction and export of Syrian commodities.  Syria has become the leading producer and exporter of Captagon, a highly addictive amphetamine-type stimulant trafficked illegally throughout the Middle East and Europe.

 

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

 

  • Al-Dj, Mahmoud Abdulilah of Syria;
  • Al-Kayali, Taher of Syria;
  • Al-law, Tawfiq Muhammad Sa’id of Syria;
  • Al-Minala, Muhammad ‘Ali, of Syria; and

 

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

 

  • Al-Ta’ir Company of Syria;
  • Freebird Travel and tourism of Syria;
  • Grains Middle East Trading DWC-LLC of United Arab Emirates;
  • Hassaleh International Company of Liberia;
  • KNH Shipping Private Limited of India;
  • Limited Liability Company STG Logistic of Russia;
  • Mass Com Group General Trading and Contracting Company of Kuwait;
  • Maya Exchange Company of Syria;
  • Melody Shipment Pvt Ltd of India;
  • Neptunus LLC of Syria;
  • Orchida Regional For General Trading and Contracting Company of Kuwait; and
  • Quoc Viet Marine Transport JSC of Vietnam.

 

https://home.treasury.gov/news/press-releases/jy2210 and

https://ofac.treasury.gov/recent-actions/20240326

 

*******

 

March 27, 2024: In coordination with the Republic of Korea (ROK), the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned six individuals and two entities based in Russia, China, and the United Arab Emirates, that generate revenue and facilitate financial transactions for the Democratic People’s Republic of Korea (DPRK). Funds generated through these actors are ultimately funneled to support the DPRK’s weapons of mass destruction (WMD) programs.  The ROK is jointly designating six of the same individuals and entities for their involvement in illicit financing and revenue generation through overseas DPRK information technology (IT) workers. This action also accompanies the 6th U.S.-ROK Working Group on DPRK Cyber Threats.

 

This action targets agents of designated DPRK banks along with companies that employ DPRK IT workers abroad. DPRK banking representatives, IT workers, and the companies that employ them generate revenue and gain access to foreign currencies vital to the Kim regime. These actors, operating primarily through networks located in Russia and China, orchestrate schemes, set up front or shell companies, and manage surreptitious bank accounts to move and disguise illicit funds, evade sanctions, and finance the DPRK’s unlawful WMD and ballistic missile programs.

 

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

 

  • Han, Chol Man of North Korea;
  • Jon, Yun Gun of North Korea;
  • Jong, Song Ho of North Korea;
  • O, In Chun of North Korea;
  • Ri, Tong Hyok of North Korea; and
  • Yu, Pu Ung of North Korea.

 

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

 

  • Limited Liability Company Alis of Russia; and
  • Pioneer Bencot Star Real Estate of United Arab Emirates.

 

https://ofac.treasury.gov/recent-actions/20240327_33 and

https://home.treasury.gov/news/press-releases/jy2215

 

*******

 

March 27, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two individuals and three entities as key financial facilitators involved in fundraising for Hamas. In the wake of the October 7, 2023 terrorist attack perpetrated by Hamas against Israel, Gaza Now engaged in fundraising efforts to support Hamas. Gaza Now and its founder Mustafa Ayash, as well Al-Qureshi Executives and Aakhirah Limited, and their director Aozma Sultana, partnered on multiple fundraising efforts. This action is being taken as part of a collaborative effort with the United Kingdom’s Office of Foreign Sanctions Implementation, which is implementing sanctions on these same targets.

 

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

  • Ayash, Mustafa of Austria; and
  • Sultana, Aozma of United Kingdom.

 

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

  • Aakhiran Limited of United Kingdom;
  • Al-Quereshi Executives of United Kingdom; and
  • Gaza Now.

 

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

https://ofac.treasury.gov/recent-actions/20240327

MARCH 2024 EXPORT CONTROL REGULATIONS UPDATES Read More »

FEBRUARY 2024 EXPORT CONTROL REGULATIONS UPDATES

This newsletter is a listing of the latest changes in export control regulations through February 29, 2024.  The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities.  It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

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

REGULATORY UPDATES

President

President Biden Signed A New Executive Order Imposing Certain Sanctions on Persons Undermining Peace, Security, and Stability in the West Bank

February 5, 2024: 89 Fed. Reg. 7605: President Biden issued Executive Order 14115 and found that the situation in the West Bank-in particular high levels of extremist settler violence, forced displacement of people and villages, and property destruction-has reached intolerable levels and constitutes a serious threat to the peace, security, and stability of the West Bank and Gaza, Israel, and the broader Middle East region. These actions undermine the foreign policy objectives of the United States, including the viability of a two state solution and ensuring Israelis and Palestinians can attain equal measures of security, prosperity, and freedom. They also undermine the security of Israel and have the potential to lead to broader regional destabilization across the Middle East, threatening United States personnel and interests. For these reasons, these actions constitute an unusual and extraordinary threat to the national security and foreign policy of the United States. All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person, including any foreign branch, are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in pursuant to this Executive Order. See actions taken by the Department of the Treasury, Office of Foreign Assets Control’s (OFAC) and the Department of the Treasury, and the Department of Treasury, Financial Crimes Enforcement Network (FinCEN) in response to this Executive Order for the list of affected persons and entities.

https://ofac.treasury.gov/media/932576/download?inline

*******

President Biden Continued The National Emergency with Respect to Afghanistan

February 7, 2024: The widespread humanitarian crisis in Afghanistan — including the urgent needs of the people of Afghanistan for food security, livelihoods support, water, sanitation, health, hygiene, and shelter and settlement assistance, among other basic human needs — and the potential for a deepening economic collapse in Afghanistan continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.  In addition, the preservation of certain property of Da Afghanistan Bank (DAB) held in the United States by United States financial institutions is of the utmost importance to addressing this national emergency and the welfare of the people of Afghanistan.  Various parties, including representatives of victims of terrorism, have asserted legal claims against certain property of DAB or indicated in public court filings an intent to make such claims.  This property is blocked under Executive Order 14064.

For these reasons, the national emergency declared in Executive Order 14064 of February 11, 2022, must continue in effect beyond February 11, 2024.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 14064 with respect to the widespread humanitarian crisis in Afghanistan and the potential for a deepening economic collapse in Afghanistan.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/02/07/notice-on-the-continuation-of-the-national-emergency-with-respect-to-the-widespread-humanitarian-crisis-in-afghanistan-and-the-potential-for-a-deepening-economic-collapse-in-afghanistan-2/

*******

President Biden Continued The National Emergency with Respect to Burma

February 7, 2024: On February 10, 2021, by Executive Order 14014, President Biden declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the situation in and in relation to Burma.

The situation in and in relation to Burma, and in particular the February 1, 2021 coup, in which the military overthrew the democratically elected civilian government of Burma and unjustly arrested and detained government leaders, politicians, human rights defenders, journalists, and religious leaders, thereby rejecting the will of the people of Burma as expressed in elections held in November 2020 and undermining the country’s democratic transition and rule of law, continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.

Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 14014 with respect to the situation in and in relation to Burma.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/02/07/notice-on-the-continuation-of-the-national-emergency-with-respect-to-the-situation-in-and-in-relation-to-burma-2/

*******

President Biden Continued The National Emergency with Respect to Cuba and of the Emergency Authority Relating to the Regulation of the Anchorage and Movement of Vessels

February 21, 2024: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued the national emergency with respect to Cuba and the emergency authority relating to the regulation of the anchorage and movement of vessels set out in Proclamation 6867, as amended by Proclamation 7757, Proclamation 9398, and Proclamation 9699.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/02/21/notice-on-the-continuation-of-the-national-emergency-with-respect-to-cuba-and-of-the-emergency-authority-relating-to-the-regulation-of-the-anchorage-and-movement-of-vessels-3/

*******

President Biden Continued the National Emergency With Respect to Libya

February 21, 2024: The situation in Libya continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States, and measures are needed to protect against the diversion of assets or other abuses by members of Qadhafi’s family, their associates, and other persons hindering Libyan national reconciliation.

For this reason, the national emergency declared on February 25, 2011, and expanded on April 19, 2016, must continue in effect beyond February 25, 2024.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 13566.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/02/21/press-release-notice-on-the-continuation-of-the-national-emergency-with-national-emergency-with-respect-to-libya/

*******

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

DECCS Pending Payment Notification Email Update

February 5, 2024: The Department of State, Directorate of Defense Trade Controls (DDTC) made changes to the pending payment notification email message text.

The Notifications being updated are:

  • Status = “Pending Payment”
  • After 5 Days in “Pending Payment” Status
  • After 10 Days in “Pending Payment” Status

These updates clarify the instructions on how to proceed with making payments, ensuring a smoother and more user-friendly experience.

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

*******

DDTC Name And Address Changes Posted To Website

February 2 through 20, 2024: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at    

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

  • Change in Name from Hitachi Kokusai Electric, Inc. to Kokusai Denki Electric, Inc., due to acquisition;
  • Change in Name from Stichting Nationaal Lucht-en Ruimtevaartlaboratorium to Stichting Koninklijk Nederlands Lucht-en Ruimtevaartcentrum (Royal Netherlands Aerospace Centre) due to corporate rebranding;
  • Change in Name from Progeny Systems, LLC to General Dynamics Mission Systems, Inc., due to acquisition;
  • Change in Name from Atkins Limited to AtkinsRéalis UK Limited due to corporate rebranding;
  • Change in Name from Raytheon BBN Technologies Corp. to RTX BBN Technologies Inc., due to corporate rebranding;
  • Change in Address from NHIndustries SAS formerly at Building Alizé, 765, rue Albert Einstein, CS 70402, 13591 Aix-en-Provence Cedex 3, France to NHIndustries SAS at Parc Lumiére, 405 rue Emilien Gautier, 13090 Aix-en-Provence, France;
  • Change in Name from Airbus Defence and Space Savunma Uzay Havacilik Sanayi Ve Ticaret Anonim Sirketi to Airbus Havacilik Sanayi Ve Ticaret Anonim Sirketi due to corporate rebranding;
  • Change in Name from Zodiac US Corporation to Safran USA, Inc., due to acquisition;
  • Change in Name and Address from MASER Engineering B.V. formerly at Capitool 56, 7521 PR ENSCHEDE, The Netherlands to Eurofins MASER B.V. at Auke Vleerstraat 26, 7521 PG ENSCHEDE, The Netherlands due to corporate rebranding;
  • Change in Name from AI Yah Satellite Communications Company PJSC to Bayanat AI PLC due to merger;
  • Change in Name from Herley Industries LLC to CAES Mission Systems LLC due to acquisition;
  • Change in Name from W.S. Atkins International Limited to AtkinsRéalis UK International Limited due to corporate rebranding.

*******

2024 DECCS User Group (DUG) Enrollment

February 2024:

DDTC announced the enrollment period is open for the 2024 DECCS User Group

What is it?

  • The mission of the Defense Export Controls and Compliance System (DECCS) User Group (DUG) is to allow individual industry users to provide feedback on DECCS by establishing and maintaining a forum for active and regular communication between DECCS users and the Directorate of Defense Trade Controls (DDTC).
  • DUG members will have the opportunity to:
    • Identify functional and technical challenges when interacting with DECCS, and
    • Provide feedback and input for future DECCS enhancements and system support initiatives.

How to get involved:

  • To express your interest, email PM_DDTCProjectTeam@state.gov by COB February 29, 2024, and provide your name & company/government affiliation (as applicable).
  • DDTC will inform applicants by March 31, 2024, on DUG membership selection.

*******

DSCA Notifies Congress Of Potential FMS Sale To India

February 1, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Government of India of MQ-9B Remotely Piloted Aircraft and related equipment for an estimated cost of $3.99 billion. The Government of India has requested to buy thirty-one (31) MQ-9B Sky Guardian aircraft; one hundred sixty-one (161) Embedded Global Positioning & Inertial Navigation Systems (EGIs); thirty-five (35) L3 Rio Grande Communications Intelligence Sensor Suites; one hundred seventy (170) AGM-114R Hellfire missiles; sixteen (16) M36E9 Hellfire Captive Air Training Missiles (CATM); three hundred ten (310) GBU-39B/B Laser Small Diameter Bombs (LSDB); and eight (8) GBU-39B/B LSDB Guided Test Vehicles (GTVs) with live fuzes. Also included are Certifiable Ground Control Stations; TPE-331-10-GD engines; M299 Hellfire missile launchers; KIV-77 cryptographic appliques and other Identification Friend or Foe (IFF) equipment; KOR-24A Small Tactical Terminals (STT); AN/SSQ-62F, AN/SSQ-53G, and AN/SSQ-36 sonobuoys; ADU-891/E Adapter Group Test Sets; Common Munitions Built-In-Test (BIT) Reprogramming Equipment (CMBRE); GBU-39B/B tactical training rounds, Weapons Load Crew Trainers, and Reliability Assessment Vehicles-Instrumented; Portable Pre-flight/Post-flight Equipment (P3E); CCM-700A encryption devices; KY-100M Narrowband/wideband terminals; KI-133 cryptographic units; AN/PYQ-10 Simple Key Loaders; Automatic Identification System (AIS) transponders; ROVER 6Si and TNR2x transceivers; MR6000 ultra high frequency (UHF) and very high frequency (VHF) radios; Selex SeaSpray Active Electronically Scanned Array (AESA) surveillance radars; HISAR-300 Radars; SNC 4500 Auto Electronic Surveillance Measures (ESM) Systems; SAGE 750 ESM systems; Due Regard Radars (DRR); MX-20 Electro-Optical Infrared (EO-IR) Laser Target Designators (LTDs); Ku-Band SATCOM GAASI Transportable Earth Stations (GATES); C-Band Line-of-Sight (LOS) Ground Data Terminals; AN/DPX-7 IFF transponders; Compact Multi-band Data Links (CMDL); initial spare and repair parts, consumables, accessories, and repair and return support; secure communications, precision navigation, and cryptographic equipment; munitions support and support equipment; testing and integration support and equipment; classified and unclassified software delivery and support; classified and unclassified publications and technical documentation; personnel training and training equipment; transportation support; warranties; studies and surveys; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support.

https://www.dsca.mil/press-media/major-arms-sales/india-mq-9b-remotely-piloted-aircraft

*******

DSCA Notifies Congress Of Potential FMS Sale To The Netherlands

February 2, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Government of the Netherlands of Hellfire Missiles and related equipment for an estimated cost of $150 million. The Government of the Netherlands has requested to buy up to three hundred eighty-six (386) Hellfire Air-to-Ground Missiles, AGM-114R2. Also included is U.S. Army Aviation and Missile Command (AMCOM) Security Assistance Management Directorate (SAMD) technical assistance; Tactical Aviation and Ground Munitions (TAGM) Project Office technical assistance; non-standard books, publications, and other Hellfire publications; integration support; and other related elements of logistics and program support.

https://www.dsca.mil/press-media/major-arms-sales/netherlands-hellfire-missiles

*******

DSCA Notifies Congress Of Potential FMS Sale To The Netherlands

February 5, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Government of the Netherlands of Joint Air-to-Surface Standoff Missiles with Extended Range and related equipment for an estimated cost of $908 million. The Government of the Netherlands has requested to buy one hundred twenty (120) AGM-158B/B-2 Joint Air-to-Surface Standoff Missiles with Extended Range (JASSM-ER) All-Up-Rounds; fifteen (15) AGM-158 Inert JASSMs with Test Instrumentation Kits; two (2) AGM-158 JASSM Separation Test Vehicles; one (1) AGM-158 Instrumented Test Vehicle; and two (2) JASSM Jettison Test Vehicles. Also included are AGM-158 JASSM Dummy Air Training Missiles (DATM) and containers; KGV-135A encryption devices; test and integration equipment and support; spare parts, consumables, accessories, and repair and return support; munitions support and support equipment; classified and unclassified publications and technical documentation; Contractor Logistics Support (CLS); transportation support; personnel training and training equipment; studies and surveys; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support.

https://www.dsca.mil/press-media/major-arms-sales/netherlands-joint-air-surface-standoff-missiles-extended-range

*******

DSCA Notifies Congress Of Potential FMS Sale To Poland

February 7, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Poland of Airspace and Surface Radar Reconnaissance aerostat systems and related elements of logistics and program support for an estimated cost of $1.2 billion. The Government of Poland has requested to buy Airspace and Surface Radar Reconnaissance (ASRR) aerostat systems; Airborne Early Warning (AEW) Radars with Identification of Friend or Foe (IFF) capability; electronic sensor systems; mooring systems with powered tether with embedded fiber optics; Ground Control Systems (GCS); associated installation hardware; special tools and test equipment; Basic Issue Items (BII); program management support; verification testing; systems technical support; transportation; spare and repair parts; communications equipment; operators and maintenance manuals; personnel training and training equipment; tool and test equipment; repair and return; publications and technical documentation; Quality Assurance Team (QAT); U.S. Government and contractor engineering, technical, and logistics support services; in-country Field Service Representatives (FSR); and other related elements of logistics and program support.

https://www.dsca.mil/press-media/major-arms-sales/poland-aerostat-systems

*******

DSCA Notifies Congress Of Potential FMS Sale To Italy

February 15, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Italy of AIM-120C-8 Advanced Medium-Range Air-to-Air Missiles and related equipment for an estimated cost of $69.3 million. The Government of Italy has requested to buy twelve (12) AIM-120C-8 Advanced Medium Range Air-to-Air Missiles (AMRAAM) that will be added to a previously implemented case whose value was under the congressional notification threshold. The original Foreign Military Sales (FMS) case, valued at $32.5 million ($23.0 million in Major Defense Equipment (MDE)), included twelve (12) AIM-120C-8 AMRAAM missiles. This notification is for a combined total of twenty-four (24) AIM-120C-8 AMRAAM missiles. Also included are Common Munitions Built-in-Test (BIT)/Reprogramming Equipment (CMBRE); ADU-891 Adaptor Group Test Set; AMRAAM containers and support equipment; integration and test support and equipment; munitions support and support equipment; spare parts, consumables and accessories, and repair and return support; contractor logistics support; classified software delivery and support; classified and unclassified publications and technical documentation; studies and surveys; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support.

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

*******

DSCA Notifies Congress Of Potential FMS Sale To Italy

February 15, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Italy of Small Diameter Bomb II and related equipment for an estimated cost of $150 million. The Government of Italy has requested to buy one hundred twenty-five (125) Guided Bomb Unit (GBU)-53/B Small Diameter Bombs-Increment II (SDB-II) All-Up-Rounds (AURs); and eight (8) GBU-53/B SDB-II Captive Carry Reliability Tests (CCRTs) that will be added to a previously implemented case whose value was under the congressional notification threshold. The original FMS case, valued at $22.5 million ($9.7 million in MDE), included twenty-four (24) GBU-53/B SDB-II AURs; and four (4) GBU-53/B SDB-II CCRTs. The Government of Italy has also requested a new FMS case that includes twenty-four (24) GBU-53/B SDB-II AURs; and two (2) GBU-53/B SDB-II CCRTs. This notification is for a combined total of one hundred seventy-three (173) GBU-53/B SDB-II AURs; and fourteen (14) GBU-53/B SDB-II CCRTs. Also included are SDB-II Weapon Load Crew Trainers (WLCT) and Practical Explosive Ordnance Disposal Trainers (PEST); munitions support and support equipment; unclassified software delivery and support; spare parts, consumables and accessories, and repair and return support; modifications and maintenance support; unclassified publications and technical documentation; studies and surveys; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support.

https://www.dsca.mil/press-media/major-arms-sales/italy-small-diameter-bomb-ii

*******

DSCA Notifies Congress Of Potential FMS Sale To Taiwan

February 21, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Taipei Economic and Cultural Representative Office in the United States of a Taiwan Advanced Tactical Data Link System Upgrade Planning and related equipment for an estimated cost of $75 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.

The Taipei Economic and Cultural Representative Office in the United States (TECRO) has requested to buy Foreign Military Sales (FMS) Cross Domain Solutions (CDS); High Assurance devices; Global Positioning System (GPS) receivers; communications equipment; requirements analysis; engineering; technical services; and other related elements of logistics and program support.

https://www.dsca.mil/press-media/major-arms-sales/taipei-economic-and-cultural-representative-office-united-states-32

*******

DSCA Notifies Congress Of Potential FMS Sale To Germany

February 27, 2024: The State Department made a determination approving a possible Foreign Military Sale to the Government of Germany of High-Frequency, Very-High Frequency, and Ultra-High Frequency Radios and related equipment for an estimated cost of $281 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.

The Government of Germany has requested to buy AN/PRC-117 radios; AN/PRC-160 radios; spare and repair parts; support equipment; tools and test equipment; diagnostic equipment; technical data and publications; personnel training and training equipment; U.S. Government and contractor technical assistance; technical and logistics support services; and other related elements of logistics and program support.

https://www.dsca.mil/press-media/major-arms-sales/germany-high-frequency-very-high-frequency-and-ultra-high-frequency

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

Commerce and Industry Export Control Principals from the United States, Japan, and the Republic of Korea (ROK) Convened As A Follow-up to the Commerce and Industry Ministerial initiative from the Trilateral Leaders’ Summit

February 21, 2024: Commerce and Industry Export Control Principals from the United States, Japan, and the Republic of Korea (ROK) convened as a follow-up to the Commerce and Industry Ministerial initiative from the Trilateral Leaders’ Summit at Camp David last August. This meeting was the first in-person meeting of its kind under the trilateral relationship focused on further aligning export controls, enhancing the ability to effectively collaborate on shared priorities. The United States hosted the convening at the U.S. Embassy in Tokyo. The principals agreed to further align on Russia controls, collaborate on outreach to countries in Southeast Asia, and cooperate on controls for critical and emerging technologies.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3449-02-21-2024-trilat-readout-final/file

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February 23, 2024: 89 Fed. Reg. 13590: The Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR), which it maintains, by revising license requirements for certain cameras, systems, and related components. These revisions will better align controls with technological and commercial developments, such as the items’ global commercial availability, while recognizing the cooperative strategic relationship the United States has with our closest allies. In addition to these changes, BIS is adding controls on certain cameras that are not already controlled by either export control classification number (ECCN) 6A003 or 6A203. These new controls are detailed under new ECCN 6A293, which is a classification for temporary controls for which BIS is seeking multilateral agreement.

89 FR 13590.pdf (SECURED) (doc.gov)

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Department of Treasury, Financial Crimes Enforcement Network (FinCEN)

FinCEN Issued An Alert Related To The Financing Of Israeli Extremist Settler Violence Against Palestinians In The West Bank Per Executive Order 14115

February 2, 2024: The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an alert related to the financing of Israeli extremist settler violence against Palestinians in the West Bank per Executive Order 14115. The alert provides select red flags to assist U.S. financial institutions in identifying and reporting suspicious activity that finances such violence.

While the alert highlights the potential involvement of certain nonprofit organizations (NPOs) in facilitating payments to fund violence in the West Bank, FinCEN continues to emphasize that legitimate charities should have access to financial services and can transmit funds through legitimate and transparent channels. FinCEN is also reminding financial institutions to apply a risk-based approach to Customer Due Diligence (CDD) requirements when developing the risk profiles of charities and other non-profit customers. No specific customer types, including charities and NPOs, automatically presents a higher risk of illicit activity. Additionally, as no single red flag is necessarily indicative of illicit or suspicious activity, U.S. financial institutions are encouraged to consider all the surrounding facts and circumstances before determining whether a specific transaction is suspicious or associated with potential Israeli violent extremist groups or campaigns.

Finally, through the alert, Treasury’s Office of Foreign Assets Control (OFAC) is highlighting for members of the public that under the Executive Order of February 1, 2024, “Imposing Certain Sanctions on Persons Undermining Peace, Security, and Stability in the West Bank,” the U.S. government is authorized to impose sanctions on foreign persons that are responsible for or complicit in, or have directly or indirectly engaged or attempted to engage in (1) actions that threaten the peace, security, or stability of the West Bank; or (2) planning, ordering, otherwise directing, or participating in specified actions affecting the West Bank, such as violence targeting civilians and property destruction. The United States seeks to impose tangible and significant consequences on those engaged in such activities, as well as to protect the U.S. financial system from abuse.

https://www.fincen.gov/news/news-releases/fincen-issues-alert-israeli-extremist-settler-violence-against-palestinians-west

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U.S. Census Bureau

Tips on How to Resolve AES Response Messages February 20, 2024: When a shipment is filed to the AES, a system response message is generated and indicates whether the shipment has been accepted or rejected.  If the shipment is accepted, the AES filer receives an Internal Transaction Number (ITN) as confirmation.  Though the shipment is accepted, the filer may still receive a Verify Message, Compliance Alert, Informational Message or Warning Message along with their ITN.  However, if the shipment is rejected, a Fatal Error notification is received and must be corrected to receive a valid ITN.

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

 

Response Code: 107

Narrative:     Country of Ultimate Destination Unknown

Severity:       Fatal

Reason:       The Country of Ultimate Destination reported is not valid in AES.

Resolution: The Country of Ultimate Destination Code must be a valid ISO country code listed in the Appendix C – ISO Country Codes.

Verify the Country of Ultimate Destination, correct the shipment and resubmit.

 

Response Code:  511

Narrative:     Mode of Transportation Not Allowed for License Code

Severity:       Fatal

Reason:       The Mode of Transportation reported is not valid for the License Code/License Exemption reported.

Resolution: The Mode of Transportation must be compatible with the reported License Code/License Exemption. See ‘Appendix F, License and License Exemption Type Codes’ to determine the appropriate Mode of Transportation and License Code/License Exemption combination.

Verify the Mode of Transportation and License Code/License Exemption, correct the shipment and resubmit.

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NOTICE: “Forwarding Agent” will be changing to “Authorized Agent” across the AESTIR and AESDirect portal

February 27, 2024: At the request of the U.S. Census Bureau, the terms “Forwarding Agent” and “FWRD AGT” found in the Automated Export System Trade Interface Requirements (AESTIR) commodity record format, appendices (i.e., commodity filing response messages, AES acronyms and definitions) and the AESDirect portal will be replaced with the term “Authorized Agent” and “AUTH AGT,” consistent with the Foreign Trade Regulations (DTR) 15 CFR 30.6(b)(1).

This change will be effective April 1, 2024.

Background:

Authorized Agent is the term used in the FTR to identify the individual or legal entity physically located in or otherwise under the jurisdiction of the United States that has obtained power of attorney or written authorization from a U.S. Principal Party in Interest (USPPI) or Foreign Principal Party in Interest (FPPI) to act on its behalf and to complete and file the Electronic Export Information (EEI).

When the Filer ID in the header and trailer records of the AES commodity format is an Authorized Agent, the Census Bureau relies on the details in the party records/section (N01-N03 records) of the Authorized Agent for verification purposes. Without that level of detail, the Filer ID by itself does not suffice for verification purposes.

The trade community has informed the Census Bureau that the term Forwarding Agent, currently in the party record/section and the appendices, is misleading.  In most cases, the Forwarding Agent and the Authorized Agent are the same company.  However, when there are scenarios when the Authorized Agent files the EEI and a Forwarding Agent facilitates the movement of the export of that same shipment, the Census Bureau must ensure that the Authorized Agent information is collected in the party record for verification purposes.  The Census Bureau has had multiple occasions where the Forwarding Agent in the N01-N03 party records was not able to verify the data because they were not the filer. The Forwarding Agent in these filings only facilitated the export but did not prepare and file the EEI in AES. The same situation also applies when a USPPI files the EEI on their own behalf.

 

LATEST SANCTIONS FINES & PENALTIES

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

Fines and Penalties

February 1, 2024: Saber Fakih, 48, of the United Kingdom, to 18 months in prison for violations of the International Emergency Economic Powers Act (IEEPA) and Iranian Transactions and Sanctions Regulations. In addition to the prison term, Saber Fakih was ordered to serve three years of supervised release.

According to his plea agreement, Saber Fakih conspired with Bader Fakih, 43, of Canada, Altaf Faquih, 72, of the United Arab Emirates, and Alireza Taghavi, 48, of Iran, to export and attempt to export an Industrial Microwave System (IMS) and counter-drone system from the United States to Iran, without first obtaining the requisite license from the Department of Treasury’s Office of Foreign Assets Control (OFAC).

https://www.justice.gov/usao-dc/pr/uk-citizen-sentenced-18-months-prison-attempt-procure-high-powered-microwave-system-iran

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February 1, 2024: Joly Germine, 31, of Croix-des-Bouquets, Haiti, the self-described “King” of a notoriously violent Haitian gang known as 400 Mawozo, pleaded guilty to his role in a gunrunning conspiracy that smuggled firearms to Haiti in violation of U.S. export laws, and the laundering of ransoms paid for U.S. hostages to the gang in 2021.

The conspiracy resulted in the purchase in the United States of at least 24 firearms, including AK-47s, AR-15s, an M4 Carbine rifle, an M1A rifle, and a .50 caliber rifle, described by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) as a military weapon, which were smuggled from the United States to the gang in Haiti for their criminal activities. Co-defendant Eliande Tunis, 45, of Pompano Beach, Florida, pleaded guilty on Jan. 17 to the same offenses.

https://www.justice.gov/opa/pr/king-violent-haitian-gang-pleads-guilty-gun-smuggling-and-money-laundering-after-governments

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February 7, 2024: In two separate cases on opposite coasts, several individuals are charged – one of whom was arrested on February 6, 2024, in connection with sophisticated schemes to transfer sensitive technology, goods, and information for the benefit of hostile foreign adversaries, in violation of U.S. law.

In the Eastern District of New York, two Iranian nationals were charged with conspiring to export equipment used in the aerospace industry to the Government of Iran, in violation of the International Emergency Economic Powers Act (IEEPA), in connection with an alleged conspiracy to illegally export U.S. goods and technology without the required licenses.

In the Central District of California, a man was arrested for allegedly stealing trade secrets developed for use by the U.S. government to detect nuclear missile launches and track ballistic and hypersonic missiles.

https://www.justice.gov/opa/pr/justice-department-announces-charges-and-arrest-two-separate-illicit-technology-transfer

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February 7, 2024: David Murar, 73, waived his right to indictment by a grand jury and pleaded guilty in U.S. District Court in St. Louis to one felony count of conspiracy to commit wire fraud. Murar admitted that from roughly April through October of 2022, he bid on and received at least nine U.S. government contracts by way of fraudulent misrepresentations, including that he would provide parts from domestic sources. Murar actually provided parts from China and other foreign countries. By doing so, Murar was able to underbid domestic suppliers. Murar broke the law by providing “military critical technical data,” which was restricted and protected information, to foreign individuals and/or entities. Murar also admitted to fraudulently using his wife’s name to gain a competitive advantage for one of his companies as a woman-owned small business, when he was really the actual owner and operator.

Murar fraudulently obtained contracts worth at least $333,465 for parts including nuts, bolts, washers, sleeves, and tools.

https://www.justice.gov/usao-edmo/pr/defense-department-contractor-missouri-admits-fraud

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February 12, 2024: The Department of Justice completed enforcement of a final order for forfeiture of a U.S.-manufactured Boeing 747 cargo plane, previously owned by Mahan Air, a sanctioned Iranian airline affiliated with the Islamic Revolutionary Guard Corp-Qods Force (IRGC-QF), a designated Foreign Terrorist Organization (FTO).

On February 11, 2024, the government of Argentina transferred physical custody of the aircraft to the United States pursuant to the final order of forfeiture, which rests all right, title, and interest in the aircraft in the United States of America. The Boeing 747 cargo plane arrived in the Southern District of Florida where it will be prepared for disposition.

The plane was previously detained by Argentine law enforcement. On July 19, 2022, the U.S. District Court for the District of Columbia issued a seizure warrant for the aircraft, which Argentine authorities promptly enforced. On Oct. 20, 2022, in support of its ongoing criminal investigation, the United States filed a civil forfeiture complaint alleging that the aircraft’s transfer from Mahan Air to Empresa de Transporte Aéreocargo del Sur, S.A. (EMTRASUR), a Venezuelan cargo airline and subsidiary of Consorcio Venezolano de Industrias Aeronáuticas y Servicios Aéreos, S.A (CONVIASA), a Venezuelan state-owned company, violated U.S. export control laws. As alleged, Mahan Air was subject to a Department of Commerce Temporary Denial Order, which prohibited, among other things, Mahan Air from engaging in any transactions involving any commodity exported from the United States that is subject to the Export Administration Regulations. The complaint further alleged that the unauthorized transfer of this aircraft directly benefited the IRGC-QF.

https://www.justice.gov/opa/pr/former-iranian-owned-boeing-aircraft-successfully-returned-united-states

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February 12, 2024: Kristina Puzyreva pleaded guilty to money laundering conspiracy for her role in a multimillion-dollar scheme to send components used in unnamed aerial vehicles (UAVs) and guided missile systems and other weapons to sanctioned entities in Russia.  The components shipped in violation of export control and sanctions laws were later found in Russian weapons platforms and signals intelligence equipment in Ukraine.  At sentencing, Puzyreva faces up to twenty years in prison.

Kristina Puzyreva and her co-defendants allegedly purchased and dispatched millions of dollars in U.S.-sourced electronics to support the Kremlin in its ongoing attacks of Ukraine. Her money laundering conspiracy was directly linked to 298 shipments of restricted technology, valued at $7 million, to the Russian battlefield.

As alleged in the indictment and other court filings, the defendant laundered money as part of a sophisticated export control and sanctions evasion scheme involving SH Brothers Inc. (SH Brothers) and SN Electronics, Inc. (SN Electronics), two companies registered in Brooklyn, New York.  Using the SH Brothers and SN Electronics corporate entities, the defendant’s co-conspirators unlawfully sourced, purchased and shipped millions of dollars in dual-use electronics from U.S. manufacturers to end users, including sanctioned entities, in Russia.  The electronic components and integrated circuits shipped were later found in seized Russian weapons platforms and signals intelligence equipment in Ukraine, including in UAVs and guided missiles.  During the period charged in the indictment, SH Brothers made hundreds of shipments valued at over $7 million to Russia.

https://www.justice.gov/usao-edny/pr/russian-canadian-national-pleads-guilty-conspiracy-launder-money-scheme-send-uav-and

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February 28, 2024: The Boeing Company (“Boeing”) entered into a three (3) year Consent Agreement to settle allegations that it violated the International Traffic in Arms Regulations (ITAR) in connection with unauthorized exports and retransfers of technical data to foreign-person employees and contractors; unauthorized exports to the People’s Republic of China, a proscribed country; and violations of license terms, conditions, and provisos of Directorate of Defense Trade Controls – DDTC authorizations. All of the violations were Voluntarily Disclosed to the Department of State by Boeing over a period of years pursuant to multiple Voluntary Disclosures. Boeing agreed to pay a fine of $51,000,000 of which $24,000,000 will be used by Boeing for remedial compliance measures.

Remedial Measures:

Boeing shall ensure that adequate resources are dedicated to ITAR compliance throughout its ITAR-regulated operating divisions, subsidiaries, and business units. Boeing shall establish policies and procedures for all of Boeing ‘s employees with responsibility for AECA and ITAR compliance to address lines of authority, staffing levels, performance evaluations, and career paths.

Boeing, in coordination with the Designated Official (as defined below), shall conduct an internal review of AECA and ITAR compliance resources and establish the necessary actions to ensure that sufficient resources are dedicated to AECA and IT AR compliance.

Boeing shall appoint, in accordance with the provisions of this Consent Agreement and in consultation with and the approval of the Director, Defense Trade Controls Compliance – DTCC, a qualified individual to serve as a Designated Official for the entire term that the Consent Agreement is in force. The term “Designated Official” in this Consent Agreement refers to a Special Compliance Officer (SCO) 1 or Internal Special Compliance Officer (ISCO)2 during the term of their appointment.

Boeing shall strengthen corporate compliance procedures focused principally on Boeing’s business operations such that: (a) all Boeing employees engaged in AECA and ITAR-regulated activities are

familiar with the AECA and the ITAR, and their own and Boeing’s responsibilities thereunder; (b) all persons responsible for supervising those employees, including senior managers of those units, are knowledgeable about the underlying policies and principles of the AECA and the ITAR; and (c) there are records indicating the names of employees, trainers, and level and area of training received.

Boeing shall enhance its AECA and ITAR compliance program with specific attention to the areas described in paragraphs 9(k)(I)(i) through 9(k)(1)(vii). Respondent shall provide to DTCC written confirmation that the company has completed this action.

Boeing agreed to implement a comprehensive, automated export compliance system throughout its operating divisions, subsidiaries, and business units engaged in AECA and ITAR-regulated activities to strengthen its internal controls for ensuring compliance with the AECA and the ITAR. This system shall track the decision process from the initiation to conclusion of a request for export, reexport, or retransfer

authorization. The automated export compliance system shall improve Boeing’s ability to oversee and monitor export, reexport, and retransfer activity. This system shall also cover the initial identification of all technical data and technical assistance in any form proposed to be disclosed to any foreign persons. Boeing shall ensure the use of a means of alerting users to the AECA and ITAR requirements on electronic transmissions of ITAR-controlled technical data. In order to prevent unintentional or accidental transmissions to unauthorized recipients, Boeing shall also provide training lo all employees to ensure that any type of electronic transmissions of ITAR-controlled technical data are sent in accordance with Boeings’ export compliance policies and procedures.

Classification Review:

Boeing shall, under the supervision of the Designated Official, review, verify, and complete the export control jurisdiction of all hardware and/or software that Boeings’ AECA and ITAR-regulated operating divisions, subsidiaries and business units, and any defense services or technical data, directly related to such hardware and not related to any hardware.

Also, separately, prior to export, re-export and/or retransfer, Boeing shall review, verify, and complete the export control jurisdiction of each hardware item (and any defense services or technical data, including software, directly related to such hardware item and not related to any hardware) and items procured from

suppliers for which such jurisdiction was not previously and accurately determined and/or verified in accordance with this paragraph.

Audits:

Two audits shall be performed during the Consent Agreement. Boeing shall have the first audit conducted by an outside consultant with expertise in AECA and ITAR matters, approved by the Direcror, DTCC. The audit shall be conducted under the supervision of the Designated Official. The first audit shall provide a thorough assessment of the effectiveness of Boeing’s implementation of all measures set forth in this Consent Agreement with focus on those actions undertaken to address the compliance issues identified in the Proposed Charging Letter, the policies, procedures, and training established by Boeing. The Designated Official or the Director, DTCC, may identify other areas (e.g., transactional review of agreements, Respondent’s information technology systems) for the first audit.

Debarment:

Boeing has cooperated with the Department’s review, has expressed regret for these activities, and has taken steps to improve its compliance programs. It has also undertaken to pay a cash penalty and agrees to implement the significant additional remedial compliance actions specified in the Consent Agreement. For these reasons, the Department determined not to impose an administrative debarment of Boeing.

Onsite Reviews by the Department:

For the purpose of assessing compliance with the provisions of the AECA, the ITAR and future authorizations, Boeing agreed to arrange and facilitate, with minimum advance notice, onsite reviews by the Department while this Consent Agreement remains in effect.

Violations:

Boeing disclosed the following violations to the Department:

Unauthorized Exports to Foreign-Person Employees and Contractors:

Boeing disclosed in two separate voluntary disclosures that from 2013- 2018 foreign-person employees (FPEs) at multiple Boeing and partner facilities overseas downloaded without authorization on more than 100 occasions files containing ITAR-controlled technical data from the Boeing Library System (BLS), the company’s digital technical document repository.

From 2013-2017 three FPEs from the People’s Republic of China (PRC), which is a proscribed destination under ITAR 126.1(d)(1), working at Boeings’ facilities in the PRC downloaded ITAR-controlled technical data from the BLS on 25 occasions. The files were controlled under multiple USML categories, including IV(i), VIII(i), IX(e)(1), XI(d), XII(f), XIII(l), XIX(g), and involved multiple U.S. Department of Defense (DoD) platforms, including the F18, F-15, F-22, E-3 Airborne Warning and Control System, AH-64 Apache, AGM84E Standoff Land Attack Missile, and AGM-131 Short Range Attack Missile II.

In a subsequent voluntary disclosure, Boeing disclosed that from 2013-2018 an indeterminate number of FPEs and contractors working at Boeing and – 4 – partner facilities in 18 countries, including Australia, Canada, France, Germany, Hong Kong, India, Italy, Japan, Kenya, Morocco, Russia, Singapore, South Korea, Spain, Thailand, Taiwan, Ukraine, and the United Kingdom (UK) downloaded ITAR-controlled technical data on 80 occasions. At the time of these unauthorized exports, Russia was subject to restrictive measures on defense exports per the Department of State public announcement on April 28, 2014. The documents were controlled under multiple USML categories, including IV(i), VIII(i), IX(e)(1), XI(d), XII(f), and XIX(g).

Unauthorized Exports, Reexports, Retransfers, and Temporary Imports of Defense Articles, including Technical Data:

In addition to violations involving FPEs, Boeing submitted multiple voluntary disclosures involving unauthorized exports, reexports, retransfers, and temporary imports of defense articles, including technical data.

Unauthorized Exports Resulting from Fabricated Permanent Export Licenses:

A trade compliance specialist working at Boeing’s U.S. subsidiary, Aviall Services, Inc., fabricated five permanent export licenses, which resulted in Boeing exporting USML Category XIX(f)(1)-(3) nozzle segments and seal strips to Portugal and Turkey without DDTC authorization on seven occasions between July and November 2018. When the company became aware of the employee’s actions, it promptly took corrective measures and voluntarily disclosed the matter.

Unauthorized Exports and Retransfers of Technical Data Resulting from Jurisdiction and Classification Issues:

Boeing submitted multiple disclosures involving unauthorized exports stemming from jurisdiction and classification issues. For example, Boeing disclosed that due to misclassification, it temporarily imported and subsequently exported while improperly relying on Department of Commerce authorizations USML Category VIII(h)(18) parts for the AH-64 Apache Helicopter flight control system to multiple countries on five occasions between August 2018 and August 2022. Respondent

Unauthorized Exports, Retransfers, and Temporary Imports of Defense Articles:

Boeing exported USML Category XI(d) technical data to Canada without authorization on two occasions in March 2017. The exports occurred when an employee at Boeing’s U.S. subsidiary Argon exported without authorization requests for quotation to a potential supplier in Canada that contained a total of nine drawings with USML XI(d) technical data related to the ceramic acoustic structure of towed torpedo decoys used on U.S. and allied warships. The U.S. Government reviewed copies of the files and determined that it would not have authorized the exports had a license application been submitted.

Violation of Terms, Conditions, and Provisos of DDTC Authorizations:

Respondent submitted multiple voluntary disclosures that demonstrated issues with managing export authorizations, including failures to comply with the terms, conditions, and provisos of DDTC authorizations.

Copies of the Charging Letter, Agreement and Order can be found at the following links:

Article – DDTC Public Portal (state.gov) and

Article – DDTC Public Portal (state.gov) and

Article – DDTC Public Portal (state.gov)

Sanctions

Department of State

February 23, 2024: Following Russia’s two years of unprovoked full-scale war, the death of opposition politician and anticorruption activist Aleksey Navalny, and a decade of aggression against Ukraine, the United States sanctioned more than 500 individuals and entities in Russia and globally. There is a clear link between Russia’s authoritarianism, its domestic crackdown on dissent, and its aggression abroad.

The Department of State sanctioned three individuals in connection with the death of Navalny in Russian Penal Colony IK-3: the prison warden, regional prison head, and deputy director of the Federal Penitentiary Service of Russia. In addition, the Department imposed sanctions on more than 250 entities and individuals, including those engaged in sanctions evasion and circumvention, and those bolstering Russia’s future energy and metals and mining production.

Along with these actions, the Department sanctioned several individuals to promote accountability for acts supporting Russia’s war, including by those involved in the unlawful transfer and/or deportation of Ukrainian children. These financial sanctions targets were designated pursuant to Executive Order (E.O.) 14024, as amended, which authorizes sanctions with respect to specified harmful foreign activities of the Government of the Russian Federation.

The Department also took steps to impose visa restrictions on Russian Federation-installed purported authorities involved in human rights abuses in connection with the transfer, deportation and confinement of Ukrainian children.

Additionally, the U.S. government issued a business advisory to assist companies in making informed decisions regarding the risks of conducting business in Russia.

See the links below for the list of persons and entities sanctioned by the Department as the list is too voluminous to for this newsletter.

https://www.state.gov/imposing-measures-in-response-to-navalnys-death-and-two-years-of-russias-full-scale-war-against-ukraine/ and https://www.state.gov/russia-business-advisory/

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

February 23, 2024: 89 Fed. Reg. 14385: Following the death of opposition politician and anti-corruption activist Aleksey Navalny, and after two years of Russia’s unprovoked and unlawful full-scale invasion of Ukraine, the Commerce Department’s Bureau of Industry and Security (BIS) imposed additional export restrictions on 93 entities under 95 entries in Russia and seven other destinations. This action, along with others announced by the Department of State and the Department of Treasury, demonstrates the Biden-Harris Administration’s unwavering commitment to supporting those affected by Russia’s aggression.

Entity List additions continue efforts to cut off the Russian defense industrial base and military from even the low-technology consumer goods it seeks to sustain its war effort. Prior to this action, the Biden Harris Administration had added 815 entities in Russia, Belarus, and numerous third countries to the Entity List since March 2nd, 2022, for reasons related to Russia’s full-scale invasion of Ukraine or for otherwise supporting Russia’s military and/or defense industry.

Pursuant to this action, BIS added an additional 93 entities under 95 entries (due to some entities operating in multiple countries) to the Entity List for a variety of reasons related to their activities in support of Russia’s defense-industrial sector and war effort. Sixty-three of the entities are based in Russia, eight in the People’s Republic of China, sixteen in Turkiye, four in the United Arab Emirates (UAE), two in the Kyrgyz Republic, and one each in India and South Korea.

More than 50 of the entities added to the list will also receive a “footnote 3” designation as Russian-Belarusian military end users. A footnote 3 designation subjects these entities to some of the most severe restrictions under the Export Administration Regulations (EAR). The entities are added with a license requirement for all items subject to the EAR and a license review policy of denial, apart from food and medicine designated as EAR99, which will be reviewed on a case-by-case basis. These rules are meant to serve as a response to Russian aggression against Ukraine. BIS added entities in several allied and partner countries, but it is not an action against the countries in which the entities are located or registered or the governments of those countries. The restrictions imposed in this rule serve as an action against those entities listed, which have supported the Russian military industrial base and other activities contrary to U.S. national security and foreign policy interests.

See the links below for the list of persons and entities sanctioned by BIS as the list is too voluminous to for this newsletter.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3452-2024-02-23-bis-press-release-russia-two-year-actions/file and https://www.federalregister.gov/public-inspection/2024-03969/additions-of-entities-to-the-entity-list

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February 27, 2024: 89 Fed. Reg. 14403: The Commerce Department’s Bureau of Industry and Security (BIS) added two entities to the Entity List under seven entries for activities contrary to U.S. national security and foreign policy interests. One entity was found to have been involved in supporting online censorship and surveillance to target political actors and human rights activities, and the other is being added for diversion of U.S. items to an Entity Listed party.

Two entities are being added to the Entity List under seven entries in multiple countries. One entity operating in multiple destinations globally is being listed due to information that it supplies deep packet inspection technology to a foreign government, where it is used in mass web-monitoring and censorship to block news as well as target political actors and human rights activists. One entity is based in the People’s Republic of China (PRC) and is being added for acquiring and attempting to acquire U.S.-origin items on behalf of a party on the Entity List. As a result of this rule, any transactions with these entities that involve items subject to the Export Administration Regulations (EAR) will require a license from the BIS, and applications for those licenses are likely to be denied.

The following 2 entities are added to the Entity List under 7 entries to the Entity List and includes, where appropriate, aliases:

Canada

  • Sandvine Incorporated.

China

  • Chengdu Beizhan Electronics Co., Ltd.

India

  • Sandvine Incorporated.

Japan

  • Sandvine Incorporated.

Malaysia

  • Sandvine Incorporated.

Sweden

  • Sandvine Incorporated.

United Arab Emirates

  • Sandvine Incorporated.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3454-2024-02-26-bis-press-release-entity-list-additions/file and https://www.bis.doc.gov/index.php/documents/regulations-docs/federal-register-notices/federal-register-2024/3456-2024-03674/file

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February 29, 2024: The U.S. Department of Commerce issued an advance notice of proposed rulemaking (ANPRM) seeking public comment to inform the potential development of regulations to secure and safeguard the Information and Communications Technology and Services (ICTS) supply chain for connected vehicles (CVs).

The ANPRM explains how the incorporation of foreign adversary ICTS in CVs can create risks, for example, by offering a direct entry point to sensitive U.S. technology and data or by bypassing measures intended to protect U.S. persons’ safety and security. In such cases, ICTS provided by persons or entities owned, controlled, or subject to the jurisdiction or direction of a foreign adversary may pose undue risks to critical infrastructure in the United States and unacceptable risks to national security. The People’s Republic of China presents a particularly acute and persistent threat to the U.S. ICTS supply chain related to CVs. This ANPRM demonstrates the Biden-Harris Administration’s proactive efforts to address the potential national security risks associated with the ICTS integral to CVs and is a significant step in advancing the ICTS mission. In this ANPRM, the Department seeks feedback on a number of issues, including: definitions; how potential classes of ICTS transactions integral to CVs may present undue or unacceptable risks to U.S. national security; implementation mechanisms to address these risks through potential prohibitions or, where feasible, mitigation measures; and whether to create a process for the public to request approval to engage in an otherwise prohibited transaction by demonstrating that the risk to U.S. national security is sufficiently mitigated in the context of a particular transaction.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3458-2024-02-29-citing-national-security-concerns-biden-harris-administration-announces-inquiry-into-connected-vehicles/file

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

February 1, 2024:  The Department of the Treasury’s Office of Foreign Assets Control (OFAC) published the Price Cap Coalition Compliance and Enforcement Alert. The oil price cap (OPC), introduced by the “Price Cap Coalition” (or “G7+ Coalition”, comprising the G7, the European Union, and Australia) in December 2022, has two key objectives: 1) constraining Russian revenues that could otherwise be used to fund Russia’s war of aggression against Ukraine; while 2) maintaining global oil flows and protecting energy security.

This alert includes:

  • An overview of key OPC evasion methods and recommendations for identifying such methods and mitigating their risks and negative impacts; and
  • Information on how to report OPC suspected breaches across the Price Cap Coalition.

The OPC evasion methods covered in this alert are related to:

  • Falsified documentation and attestations;
  • Opaque shipping and ancillary costs;
  • Third country supply chain intermediaries and complex and irregular corporate structures;
  • Flagging;
  • The “shadow” fleet; and
  • Voyage irregularities.

https://ofac.treasury.gov/recent-actions/20240201_33 and https://ofac.treasury.gov/media/932571/download?inline

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February 1, 2024: Pursuant to Executive Order 14115 (See first entry above) the Department of the Treasury, Office of Foreign Assets Control’s (OFAC) updated its Specially Designated Nationals and Blocked Persons List:

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

  • Chasdai, David Chai of Israel;
  • Levi, Yinon of Israel;
  • Tanjil, Einan of Israel; and
  • Zicherman, Shalom of Israel.

https://ofac.treasury.gov/recent-actions/20240201

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February 2, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC)  amended FAQ 629 and published an updated document titled, “Frequently Asked Questions Related to the Suspension of Certain U.S. Sanctions with Respect to Venezuela on October 18, 2023.”

Frequently Asked Question 629: Executive order (E.O.) 13850 of November 1, 2018, “Blocking Property of Additional Persons Contributing to the Situation in Venezuela,” authorizes the imposition of sanctions on persons operating in Venezuela’s gold sector. For purposes of this E.O., how will OFAC target those who “operate in the gold sector of the Venezuela economy or any other sector of the Venezuela economy as may be determined by the Secretary of the Treasury in consultation with the Secretary of State”?

Answer: OFAC expects to use its discretion to target in particular those who operate corruptly in the gold or other identified sectors of the Venezuela economy, and not those who are operating legitimately in such sectors. This includes, for example, persons engaging in dishonest or fraudulent conduct, illicit activity, or deceptive transactions within Venezuela’s gold sector or other identified Venezuela sectors, with the purpose or effect of misappropriating Venezuelan resources in those sectors for personal, professional, or political gain.

https://ofac.treasury.gov/recent-actions/20240202_33 and https://ofac.treasury.gov/faqs/629 and https://ofac.treasury.gov/media/932581/download?inline

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February 2, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a key procurement network of prolific suppliers of materials and sensitive technology for Iran’s ballistic missile and Unmanned Aerial Vehicle (UAV) programs, including the Shahed-series UAV produced by Iran’s Shahed Aviation Industries Research Center (SAIRC). The four Iran- and Hong Kong-based entities designated have operated as covert procurement entities for OFAC designated Hamed Dehghan and Pishtazan Kavosh Gostar Boshra (PKGB), who are actively engaged in supporting multiple Iranian military organizations, including the Islamic Revolutionary Guard Corps (IRGC). Additionally, OFAC designated a Hong Kong-based front company involved in the sale of hundreds of millions of dollars’ worth of Iranian commodities for the benefit of the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF).

OFAC also sanctioned six officials in the Iranian Islamic Revolutionary Guard Corps Cyber-Electronic Command (IRGC-CEC), an Iranian government organization responsible for a series of malicious cyber activities against critical infrastructure in the United States and other countries.

The United States is taking action against these individuals in response to IRGC-affiliated cyber actors’ recent cyber operations in which they hacked and posted images on the screens of programmable logic controllers manufactured by Unitronics, an Israeli company.  Industrial control devices, such as programmable logic controllers, used in water and other critical infrastructure systems, are sensitive targets.  Although this particular operation did not disrupt any critical services, unauthorized access to critical infrastructure systems can enable actions that harm the public and cause devastating humanitarian consequences.

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

  • Homayunfal, Hamid of Iran;
  • Lashgarian, Hamid Reza of Iran;
  • Lashgarian, Mahdi of Iran;
  • Mansuri, Milad of Iran; and
  • Saberian, Reza Mohammad Amin of Iran.

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

  • Advantage Trading Co., Limited, of China;
  • China Oil And Petroleum Company Limited of China;
  • Duling Technology Hk Limited of China;
  • Fy International Trading Co., Limited of China; and
  • Narin Sepehr Mobin Isatis of Iran.

https://home.treasury.gov/news/press-releases/jy2073 and https://home.treasury.gov/news/press-releases/jy2072 and https://ofac.treasury.gov/recent-actions/20240202

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February 7, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned one of Ecuador’s most violent gangs, Los Choneros, and its leader, José Adolfo Macías Villamar (also known by the alias “Fito”), pursuant to counter narcotics authorities. OFAC’s action follows a steep rise in violence in Ecuador attributed to the actions of Los Choneros and other drug trafficking gangs in the country.

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

  • Macias Villamar, Jose Adolfo of Ecuador.

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

  • Los Choneros of Ecuador.

https://home.treasury.gov/news/press-releases/jy2082 and https://ofac.treasury.gov/recent-actions/20240207

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February 8, 2024:  The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took its second price cap enforcement action of 2024, imposing sanctions on four entities and identifying one vessel as blocked property. The network of these entities and the vessel were involved in a price cap violation scheme in late 2023. OFAC is also issued two new determinations that implement G7 commitments to ban the importation of Russian diamonds.

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

  • NS Leader Shipping Incorporated Of Liberia;
  • Oil Tankers Scf Mgmt FZCO of the United Arab Emirates;
  • Talassa Shipping DMCC of he United Arab Emirates; and
  • Zeenit Supply And Trading DMCC of the United Arab Emirates.

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

  • NS Leader (A8LU7) Crude Oil Tanker Gabon flag; Identification Number IMO 9339301; MMSI 636013272 (vessel).

OFAC also published a Determination for Prohibitions Related to Imports of Diamond Jewelry and Unsorted Diamonds of Russian Federation Origin and Diamond Jewelry and Unsorted Diamonds Exported From the Russian Federation, and a Determination for Prohibitions Related to Imports of Certain Categories of Diamonds.

OFAC also issued Russia-related General License 87, “Authorizing Limited Safety and Environmental Transactions Involving Certain Persons or Vessels Blocked on February 8, 2024.”

Russia-related General License 87: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to one of the following activities involving the blocked persons described below are authorized through 12:01 a.m. eastern daylight time, May 8, 2024, provided that any payment to a blocked person must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations (RuHSR):

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

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

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

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

(1) Oil Tankers SCF MGMT FZCO; and

(2) NS Leader Shipping Incorporated.

https://home.treasury.gov/news/press-releases/jy2085 and https://ofac.treasury.gov/recent-actions/20240208 and https://ofac.treasury.gov/media/932606/download?inline and https://ofac.treasury.gov/media/932611/download?inline and https://ofac.treasury.gov/media/932601/download?inline

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February 14, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a procurement network responsible for facilitating the illegal export of goods and technology from over two dozen U.S. companies to end-users in Iran, including the Central Bank of Iran (CBI), which is designated for its role in providing financial support to the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and Hizballah. These designations target three individuals and four entities tied to the procurement of sophisticated U.S. technology for use by CBI in violation of U.S. export restrictions and sanctions. Among the goods and technology acquired by CBI were items classified as information security items subject to national security and anti-terrorism controls by the U.S. Department of Commerce’s Bureau of Industry and Security.

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

  • Khademi, Mohammad Reza of the United Arab Emirates;
  • Mirdamadi, Pouria of Iran and France; and
  • Najafi, Seyed Abotaleb of Iran.

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

  • Advance Banking Solution Trading DMCC of the United Arab Emirates;
  • Freedom Star General Trading CO. L.L.C. of the United Arab Emirates;
  • Informatics Services Corporation of Iran; and
  • Ted Teknoloji Gelistirme Hizmetleri Sanayi Ticaret Anonim Sirketi of Turkey.

https://ofac.treasury.gov/recent-actions/20240214 and https://home.treasury.gov/news/press-releases/jy2095

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February 15, 2024: 89 Fed. Reg. 12233: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is amended the North Korea Sanctions Regulations to amend or add general licenses to facilitate certain humanitarian-related and journalistic activities.  Specifically, OFAC amended an existing general license for nongovernmental organizations and adding general licenses to authorize certain transactions related to the exportation and re-exportation of items authorized by the U.S. Department of Commerce; the provision of certain agricultural commodities, medicine, and medical devices; and certain journalistic activities in North Korea.

OFAC has also issued several new North Korea-related Frequently Asked Questions (1160, 1161, 1162, 1163).

Frequently Asked Question 1160: What changes did the February 15, 2024 regulatory amendment to the North Korea Sanctions Regulations, 31 CFR part 510 (NKSR), make?  

Answer: On February 15, 2024, OFAC, in consultation with the Department of State, amended the NKSR to modify an existing general license (GL) and add three new GLs to facilitate humanitarian-related and other activities in North Korea.  These changes include:

  • Additional non-governmental organization (NGO) activities

OFAC amended the GL at § 510.512 to authorize NGOs to engage in a broader range of humanitarian-related activities involving North Korea, including certain educational activities and activities to support disarmament, demobilization, and reintegration (DDR) programs and peacebuilding, conflict prevention, and conflict resolution programs.  The general license at § 510.512 allows transactions that are ordinarily incident and necessary to such NGO activities involving certain Government of North Korea entities, including limited partnerships, subject to certain conditions and limitations–including that the NGO must submit a report to the U.S. Department of State at least 30 days before their proposed activities, as further described in FAQ 1162.

The amended NGO GL at § 510.512 authorizes the export and reexport to North Korea of items not subject to the Export Administration Regulations (15 CFR parts 730 through 774) (EAR) to North Korea that are ordinarily incident and necessary to authorized NGO activities, provided the items would be designated as EAR99 if located in the United States.

  • Removal of dual licensing burden

To avoid duplicative licensing requirements, OFAC added a new GL at § 510.520 to authorize all transactions ordinarily incident to the exportation or reexportation of items (i.e., commodities, software, or technology) to North Korea, provided the exportation or reexportation is licensed or otherwise authorized by the Department of Commerce.  Such transactions may include transactions with the Government of North Korea, or any other person blocked pursuant to the NKSR, and services provided outside North Korea to install, repair, or replace authorized items.  Accordingly, U.S. persons no longer need to seek a specific license from OFAC to engage in transactions ordinarily incident to exports and reexports that are already licensed or otherwise authorized by the Department of Commerce.

  • Expansion of authorization for the exportation or reexportation of certain food, medicine, and other agricultural and medical items

OFAC added a new GL at § 510.521 to authorize certain transactions related to the export and reexport to North Korea of certain agricultural commodities (including food), medicine, medical devices, and replacement parts and components for medical devices, that are not subject to the EAR but that would be designated EAR99 if they were located in the United States, subject to certain conditions and limitations.

  • Journalistic activities

OFAC added a new GL at § 510.522 to authorize U.S. news reporting organizations and certain of their U.S. person employees to engage in certain transactions ordinarily incident and necessary to their journalistic activities or the establishment or operation of a news bureau in North Korea.

 

Frequently Asked Question 1161: Does the general license for non-governmental organization (NGO) activities at section 510.512 of the North Korea Sanctions Regulations, 31 CFR part 510 (NKSR), authorize NGOs to engage in transactions involving the Government of North Korea?

Answer: Yes, subject to certain conditions and limitations.  NGOs may engage in transactions with the Government of North Korea to the extent ordinarily incident and necessary to the activities authorized by § 510.512(a).  Such transactions may not include partnerships and partnership agreements with Government of North Korea military, intelligence, or law enforcement entities, except as necessary to export or import items to or from North Korea that are licensed or otherwise authorized pursuant to the NKSR or pursuant to the Export Administration Regulations (15 CFR parts 730 through 774) (EAR).  For example, NGOs may engage with North Korea’s Ministry of Public Health to provide assistance to clean water projects; with customs officials to import humanitarian-related items into the country; and with local jurisdictions, such as city governments and hospitals, to provide food and medical devices.  However, this general license does not authorize the exportation or reexportation of services to, charitable donations to or for the benefit of, or any other transactions involving, the Government of North Korea, the Workers’ Party of Korea, or any other person whose property and interests in property are blocked pursuant to the NKSR, except as ordinarily incident and necessary to an activity authorized pursuant to § 510.512(a).

 

Frequently Asked Question 1162: What must a non-governmental organization (NGO) do before relying on the general license (GL) at § 510.512 of the North Korea Sanctions Regulations, 31 CFR part 510 (NKSR)?

Answer: To be eligible for the NGO GL, an NGO must first submit a report to the U.S. Department of State via email to DPRK-NGO-GL-Notification-DL@state.gov no fewer than 30 days before the commencement of their activities, with one of the following:  (1) a copy of approval by the UN Security Council 1718 Committee (1718 Committee) with respect to the NGO’s activities; (2) a copy of a 1718 Committee exemption request or notification that has been or will be submitted to the 1718 Committee with respect to the NGO’s activities; or (3) a detailed explanation of why the NGO’s proposed activities do not require such an exemption or notification, including details about the type and scope of the proposed activities.  In the two-week period following submission of this information, the U.S. Department of State may notify the NGO that it is not eligible to rely upon the GL.  An NGO that does not receive this type of notification may proceed with the activities described in the report.

 

Frequently Asked Question 1163: Can I export tobacco or other luxury goods to North Korea?

Answer: No.  The general license for the exportation or reexportation of certain agricultural and medical items at § 510.521 of the North Korea Sanctions Regulations, 31 CFR part 510, does not authorize the exportation or reexportation to North Korea of luxury goods, including tobacco, as set forth in 15 CFR § 746.4(b)(1) of the Export Administration Regulations (15 CFR parts 730 through 774).

https://ofac.treasury.gov/recent-actions/20240215 and https://ofac.treasury.gov/media/932631/download?inline and https://ofac.treasury.gov/faqs/1160 and https://ofac.treasury.gov/faqs/1161 and https://ofac.treasury.gov/faqs/1162 and https://ofac.treasury.gov/faqs/1163

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February 16, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued an OFAC Compliance Communiqué: Guidance for the Provision of Humanitarian-Related Assistance and Critical Commodities to the Yemeni People in response to questions from the NGO community and the general public on how to ensure humanitarian assistance and trade continue to flow to the Yemeni people while complying with OFAC sanctions.

OFAC is also issued Counter Terrorism General License 28, “Authorizing Transactions for Third-Country Diplomatic and Consular Missions Involving Ansarallah.”

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

Ansarallah of Yemen.

Counter Terrorism General License 28:

All transactions prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), involving Ansarallah, or any entity in which Ansarallah owns, directly or indirectly, a 50 percent or greater interest, that are ordinarily incident and necessary to the official business of third-country diplomatic or consular missions to Yemen are authorized.

This general license does not authorize:

(1) Financial transfers to any blocked person described above, other than for the purpose of effecting the payment of taxes, fees, or import duties, or the purchase or receipt of permits, licenses, or public utility services; or

(2) Any transactions otherwise prohibited by the GTSR, including transactions involving any person blocked pursuant to the GTSR other than the blocked persons described above, unless separately authorized.

https://ofac.treasury.gov/recent-actions/20240216 and https://ofac.treasury.gov/media/932621/download?inline and https://ofac.treasury.gov/media/932626/download?inline

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February 20, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 83A, “Authorizing Certain Transactions Related to Imports of Certain Categories of Fish, Seafood, and Preparations Thereof Prohibited by Executive Order 14068.”

Russia-related General License 83A: All transactions prohibited by the determination of December 22, 2023 made pursuant to section 1(a)(i)(B) of Executive Order (E.O.) 14068, as amended by E.O. 14114 (“Prohibitions Related to Imports of Certain Categories of Fish, Seafood, and Preparations Thereof”), that are ordinarily incident and necessary to the importation into the United States of seafood derivative products that were loaded onto a vessel at the port of loading prior to 12:01 a.m. eastern standard time on February 20, 2024, pursuant to written contracts or written agreements entered into prior to December 22, 2023, are authorized through 12:01 a.m. eastern daylight time, May 31, 2024. (b) This general license does not authorize any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR, unless separately authorized. Effective February 20, 2024, General License No. 83, dated December 22, 2023, is replaced and superseded in its entirety by this General License No. 83A.

https://ofac.treasury.gov/recent-actions/20240220_33 and https://ofac.treasury.gov/media/932636/download?inline

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February 20, 2024: The United States designated two individuals who are affiliates of the Russia-based ransomware group LockBit. This action is the first in an ongoing collaborative effort with the U.S. Department of Justice, Federal Bureau of Investigation, and our international partners targeting LockBit.

Russia continues to offer safe harbor for cybercriminals where groups such as LockBit are free to launch ransomware attacks against the United States, its allies, and partners. These ransomware attacks have targeted critical infrastructure, including hospitals, schools, and financial institutions. Notably, LockBit was responsible for the November 2023 ransomware attack against the Industrial and Commercial Bank of China’s (ICBC) U.S. broker-dealer. The United States is a global leader in the fight against cybercrime and is committed to using all available authorities and tools to defend Americans from cyber threats. In addition to the actions announced, the U.S. government provides critical resources to support potential victims in protecting against and responding to ransomware attacks. For example, last year, the Cybersecurity & Infrastructure Security Agency in conjunction with other U.S. Departments and Agencies and foreign partners published two cybersecurity advisories, “Understanding Ransomware Threat Actors: LockBit” and “LockBit 3.0 Ransomware Affiliates Exploit CVE 2023-4966 Citrix Bleed Vulnerability.” These advisories detail the threats posed by this group and provide recommendations to reduce the likelihood and impact of future ransomware incidents.

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

  • Kondratiev, Ivan Gennadievich of Russia; and
  • Sungatov, Artur Ravilevich, Kazan, of Russia.

https://home.treasury.gov/news/press-releases/jy2114 and https://ofac.treasury.gov/recent-actions/20240220

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February 23, 2024: Marking Russia’s two years of unprovoked and unlawful full-scale war against Ukraine and in response to the death of opposition politician and anticorruption activist Aleksey Navalny, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned almost 300 individuals and entities. Together with actions from the U.S. Department of State (State), this is the largest number of sanctions imposed since Russia’s full-scale invasion of Ukraine. State designated three Government of Russia officials in connection with Navalny’s death; together, Treasury and State  sanctioned over 500 targets to impose additional costs for Russia’s repression, human rights abuses, and aggression against Ukraine. The Department of Commerce also added more than 90 companies to the Entity List.

To deny Russia the resources necessary to support its brutal war against Ukraine, Treasury designatedg targets including a major cog in Russia’s financial infrastructure; more than two dozen third-country sanctions evaders in Europe, East Asia, Central Asia, and the Middle East; and hundreds of entities in Russia’s military-industrial base and other key sectors.

State’s concurrent actions include sanctions on those involved in supporting Russian future energy revenue sources, maintaining Russia’s capacity to wage its war of aggression, and facilitating sanctions evasion and circumvention. State also took steps to impose visa restrictions on Russian Federation-installed purported authorities involved in the transfer, deportation, and confinement of Ukraine’s children.

See the links below for the list of persons and entities added to the SDN list as the list is too voluminous for this newsletter.

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 88, “Authorizing the Wind Down of Transactions Involving Certain Entities Blocked on February 23, 2024;” Russia-related General License 89, “Authorizing the Wind Down and Rejection of Transactions Involving Certain Financial Institutions Blocked on February 23, 2024;” Russia-related General License 90, “Authorizing Certain Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Certain Entities Blocked on February 23, 2024;” and Russia-related General License 91, “Authorizing Limited Safety and Environmental Transactions Involving Certain Blocked Persons or Vessels.”

Russia-related General License 88: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of any transaction involving one or more of the following blocked entities are authorized through 12:01 a.m. eastern daylight time, April 8, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR): (1) PJSC Transcontainer; (2) Publichnoe Aktsionernoe Obshchestvo Mechel; (3) JSC SUEK; (4) ILLC Geopromining Investment; (5) LLC Holding GPM; (6) Joint Stock Company Samara Metallurgical Plant; (7) Joint Stock Company Rimera; (8) Public Joint Stock Company Pipe Metallurgical Company; (9) Vostochnaya Stevedoring Company LLC; (10) JSC Rosgeologia; (11) National Payment Card System Joint Stock Company; (12) Limited Liability Company BSF Capital; (13) Limited Liability Company Investment Consultant Elbrus Capital; (14) Limited Liability Company Orbita Capital Partners; (15) Nonprofit Organization Investment and Venture Fund of the Republic of Tatarstan; (16) Obshchestvo S Ogranichennoi Otvetstvennostyu Guard Kapital; (18) Limited Liability Company Shipbuilding Complex Zvezda; (19) Joint Stock Company Sovcomflot; and (20) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.

https://ofac.treasury.gov/media/932671/download?inline

Russia-related General License 89: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of any transaction involving one or more of the following blocked entities are authorized through 12:01 a.m. eastern daylight time, April 8, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR): (1) Avangard Joint Stock Bank; (2) Bank RostFinance; (3) Joint Stock Commercial Bank Chelindbank; (4) Joint Stock Commercial Bank International Financial Club; (5) Joint Stock Commercial Bank Modulbank; (6) Joint Stock Company Databank; (7) Maritime Joint Stock Bank Joint Stock Company; (8) Public Joint Stock Company Bystrobank; and (9) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.

https://ofac.treasury.gov/media/932646/download?inline

Russia-related General License 90: 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 issued or guaranteed by the following blocked entities (“Covered Debt or Equity”) to a non-U.S. person are authorized through 12:01 a.m. eastern daylight time, April 8, 2024: (1) LLC Holding GPM; (2) Limited Liability Company Geopromaining Verkhne Menkeche; (3) Joint Stock Company Sarylakh Surma; (4) Joint Stock Company Zvezda; (5) ILLC Geopromining Investment; (6) Public Joint Stock Company PIK Specialized Homebuilder; and (7) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.

All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to facilitating, clearing, and settling trades of Covered Debt or Equity that were placed prior to 4:00 p.m. eastern standard time, February 23, 2024 are authorized through 12:01 a.m. eastern daylight time, April 8, 2024.

All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the wind down of derivative contracts entered into prior to 4:00 p.m. eastern standard time, February 23, 2024 that (i) include a blocked person described in paragraph (a) of this general license as a counterparty or (ii) are linked to Covered Debt or Equity are authorized through 12:01 a.m. eastern daylight time, April 8, 2024, provided that any payments to a blocked person are made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).

https://ofac.treasury.gov/media/932651/download?inline

Russia-related General License 91: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to one of the following activities involving the blocked persons described below are authorized through 12:01 a.m. eastern daylight time, May 23, 2024, provided that any payment to a blocked person must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR): (1) The safe docking and anchoring in port of any vessels in which any person listed below has a property interest (“blocked vessels”); (2) The preservation of the health or safety of the crew of any of the blocked vessels; or (3) Emergency repairs of any of the blocked vessels or environmental mitigation or protection activities relating to any of the blocked vessels.

The authorization above applies to the following blocked persons listed on the Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List and any entity in which any of the following persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest: (1) Ladoga Shipping Company Limited Liability Company; (2) JSC Polar Marine Geosurvey Expedition; (3) Yuzhmorgeologiya AO; (4) Sevmorneftegeofizika AO; and (5) Amige AO.

https://ofac.treasury.gov/media/932656/download?inline

OFAC is also issuing three new, Russia-related Frequently Asked Questions (FAQs 1164-1166) and amending eight Russia-related Frequently Asked Questions (FAQs 886, 887, 1019, 1022, 1025, 1027, 1092, and 1154).

FAQ 1164: What prohibitions has OFAC implemented with respect to diamonds and diamond jewelry under the Russian Harmful Foreign Activities Sanctions program?

Answer: On March 11, 2022, the Biden Administration issued Executive Order (E.O.) 14068, prohibiting the importation into the United States of non-industrial diamonds of Russian Federation origin.  See FAQs 1019 and 1027 for the definition of Russian Federation origin and non-industrial diamonds, respectively.  On December 6, 2023, the G7 Leaders announced a coordinated international effort to impose phased restrictions on the importation of certain Russian diamonds, including diamonds processed in third countries.  As a part of this G7 commitment, OFAC has issued additional restrictions on the importation of non-industrial diamonds mined, extracted, produced, or manufactured wholly or in part in the Russian Federation as well as unsorted diamonds and diamond jewelry.

Specifically, on February 8, 2024, OFAC issued two determinations, “Prohibitions Related to Imports of Certain Categories of Diamonds” pursuant to Executive Order (E.O.) 14068 (the “Diamonds Determination”) and “Prohibitions Related to Imports of Diamond Jewelry  and Unsorted Diamonds of Russian Federation Origin and Diamond Jewelry and Unsorted Diamonds Exported From the Russian Federation” pursuant to Executive Order (E.O.) 14068 (the “Diamond Jewelry and Unsorted Diamonds Determination”).

 

FAQ 1165: What does the determination “Prohibitions Related to Imports of Certain Categories of Diamonds” pursuant to Executive Order (E.O.) 14068 (the “Diamonds Determination”), prohibit?

Answer: The Diamonds Determination prohibits the importation and entry into the United States of two categories of diamonds, effective on the dates indicated below.

Effective March 1, 2024, the Diamonds Determination prohibits the importation of non-industrial diamonds that were mined, extracted, produced, or manufactured wholly or in part in the Russian Federation with a weight of 1.0 carat or greater, even if such diamonds have been substantially transformed into other products outside of the Russian Federation.

Effective September 1, 2024, the Diamonds Determination prohibits the importation of Russian non-industrial diamonds with a weight of 0.5 carats or greater, even if such diamonds have been substantially transformed into other products outside of the Russian Federation.

For example, a non-industrial diamond that is mined in Russia but then undergoes manufacturing operations such as being cut, faceted, or polished in a third country, is prohibited from importation and entry into the United States, if at the time of importation, it is 1.0 carat or greater as of March 1, 2024 or 0.5 carats or greater as of September 1, 2024.

See FAQ 1027 for the definition of non-industrial diamonds.  See FAQ 1166 for information on the prohibition related to diamond jewelry and unsorted diamonds.

 

FAQ 1166: What does the determination “Prohibitions Related to Imports of Diamond Jewelry and Unsorted Diamonds of Russian Federation Origin and Diamond Jewelry and Unsorted Diamonds Exported From the Russian Federation” pursuant to Executive Order (E.O.) 14068 (the “Diamond Jewelry Determination”), prohibit?

Answer: The Diamond Jewelry Determination prohibits the importation and entry into the United States of diamond jewelry and unsorted diamonds of Russian Federation origin, as well as diamond jewelry and unsorted diamonds that were exported from the Russian Federation.  For example, it prohibits the importation into the United States of a diamond bracelet that has been manufactured in the Russian Federation, regardless of where the diamonds originated.

This prohibition comes into effect on March 1, 2024.  See FAQ 1027 for the definition of diamond jewelry.  See FAQ 1019 for the definition of Russian Federation origin.  See FAQ 1165 for information on the prohibition related to certain categories of non-industrial diamonds.  For additional information on certification and traceability of diamonds, please contact U.S. Customs and Border Protection.

https://home.treasury.gov/news/press-releases/jy2117 and https://ofac.treasury.gov/faqs/added/2024-02-23 and https://ofac.treasury.gov/faqs/search/886+887+1019+1022+1025+1027+1092+1154

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February 23, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action to responsibly reduce Russia’s revenue from oil sales by targeting Joint Stock Company Sovcomflot (Sovcomflot), Russia’s state-owned shipping company and fleet operator. In addition to designating Sovcomflot, OFAC is identified 14 crude oil tankers as property in which Sovcomflot has an interest.

Concurrent with the designation of Sovcomflot, OFAC issued a  general license authorizing the offloading of crude oil (or other cargo) from these 14 vessels for a period of 45 days. In addition, OFAC issued a general license authorizing transactions with all other Sovcomflot-owned vessels at this time. Nothing in these general licenses changes any of the restrictions imposed by the price cap sanctions regime.

Sovcomflot was designated pursuant to Executive Order (E.O.) 14024 for operating or having operated in the marine sector of the Russian Federation economy and for being owned or controlled by, or having acted for or on behalf of, directly or indirectly, the Government of the Russian Federation. Sovcomflot has also been sanctioned by Australia, Canada, New Zealand, and the United Kingdom (UK) and is under certain European Union (EU) restrictions.

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

  • Joint Stock Company Sovcomflot of Russia.

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

  • Anatoly Kolodkin (3E7525) Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9610808; MMSI 352003372;
  • Georgy Maslov (TRBD9) Crude Oil Tanker Gabon flag; Vessel Registration Identification IMO 9610793; MMSI 626362000;
  • Krymsk (TRBE3) Crude Oil Tanker Gabon flag; Vessel Registration Identification IMO 9270529; MMSI 626364000 (vessel);
  • Liteyny Prospect (TRBE6) Crude Oil Tanker Gabon flag; Vessel Registration Identification IMO 9256078; MMSI 626367000 (vessel);
  • Nevskiy Prospect (TRBE8) Crude Oil Tanker Gabon flag; Vessel Registration Identification IMO 9256054; MMSI 626369000 (vessel);
  • NS Antarctic (TRBF3) Crude Oil Tanker Gabon flag; Vessel Registration Identification IMO 9413559; MMSI 626372000 (vessel);
  • NS Bravo (TRBF8) Crude Oil Tanker Gabon flag; Vessel Registration Identification IMO 9412359; MMSI 626377000 (vessel);
  • NS Burgas (TRBF9) Crude Oil Tanker Gabon flag; Vessel Registration Identification IMO 9411020; MMSI 626378000 (vessel);
  • NS Captain (TRBG2) Crude Oil Tanker Gabon flag; Vessel Registration Identification IMO 9341067; MMSI 626379000 (vessel);
  • NS Columbus (TRBG5) Crude Oil Tanker Gabon flag; Vessel Registration Identification IMO 9312884; MMSI 626382000 (vessel);
  • NS Consul (TRBH3) Crude Oil Tanker Gabon flag; Vessel Registration Identification IMO 9341093; MMSI 626388000 (vessel);
  • NS Creation (TRBH5) Crude Oil Tanker Gabon flag; Vessel Registration Identification IMO 9312896; MMSI 626390000 (vessel);
  • NS Lion (TRBH8) Crude Oil Tanker Gabon flag; Vessel Registration Identification IMO 9339313; MMSI 626393000 (vessel);
  • Sakhalin Island (3E4139) Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9249128; MMSI 352002202 (vessel).

Russia Related General License 88A: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of any transaction involving one or more of the following blocked entities are authorized through 12:01 a.m. eastern daylight time, April 8, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR): (1) PJSC Transcontainer; (2) Publichnoe Aktsionernoe Obshchestvo Mechel; (3) JSC SUEK; (4) ILLC Geopromining Investment; (5) LLC Holding GPM; (6) Joint Stock Company Samara Metallurgical Plant; (7) Joint Stock Company Rimera; (8) Public Joint Stock Company Pipe Metallurgical Company; (9) Vostochnaya Stevedoring Company LLC; (10) JSC Rosgeologia; (11) National Payment Card System Joint Stock Company; (12) Limited Liability Company BSF Capital; (13) Limited Liability Company Investment Consultant Elbrus Capital; (14) Limited Liability Company Orbita Capital Partners; (15) Nonprofit Organization Investment and Venture Fund of the Republic of Tatarstan; (16) Obshchestvo S Ogranichennoi Otvetstvennostyu Guard Kapital; (18) Limited Liability Company Shipbuilding Complex Zvezda; (19) Joint Stock Company Sovcomflot; and (20) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.

https://ofac.treasury.gov/media/932671/download?inline

Russia Related General License 91A: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to one of the following activities involving the blocked persons described in paragraph (b) are authorized through 12:01 a.m. eastern daylight time, May 23, 2024, provided that any payment to a blocked person must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR): (1) The safe docking and anchoring in port of any vessels in which any person listed in paragraph (b) of this general license has a property interest (“blocked vessels”); (2) The preservation of the health or safety of the crew of any of the blocked vessels; or (3) Emergency repairs of any of the blocked vessels or environmental mitigation or protection activities relating to any of the blocked vessels.

The authorization above applies to the following blocked persons listed on the Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List and any entity in which any of the following persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest: (1) Ladoga Shipping Company Limited Liability Company; (2) JSC Polar Marine Geosurvey Expedition; (3) Yuzhmorgeologiya AO; (4) Sevmorneftegeofizika AO (5) Amige AO; and (6) Joint Stock Company Sovcomflot.

https://ofac.treasury.gov/media/932676/download?inline

Russia Related General License 92: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the delivery and offloading of cargo from any vessel identified on the Office of Foreign Assets Control’s List of Specially Designated Nationals and Blocked Persons that is blocked solely due to a property interest of Joint Stock Company Sovcomflot (Sovcomflot), or any entity in which Sovcomflot owns, directly or indirectly, a 50 percent or greater interest, are authorized through 11:59 p.m. eastern daylight time, April 8, 2024, provided that the cargo was loaded prior to February 23, 2024.

https://ofac.treasury.gov/media/932661/download?inline

Russia Related General License 93: All transactions prohibited by Executive Order (E.O.) 14024 involving any vessel that is blocked solely due to a property interest of Joint Stock Company Sovcomflot or any entity in which Sovcomflot owns, directly or indirectly, a 50 percent or greater interest, are authorized, provided that such vessel is not identified on the Office of Foreign Assets Control’s List of Specially Designated Nationals and Blocked Persons.

https://ofac.treasury.gov/media/932666/download?inline

https://home.treasury.gov/news/press-releases/jy2121 and https://ofac.treasury.gov/recent-actions/20240223_33

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February 27, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC), in coordination with the United Kingdom, took action against the Deputy Commander of Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), Mohammad Reza Falahzadeh, as well as a Houthi group member. OFAC is also designating the owner and operator of a vessel used to ship Iranian commodities that were sold to support both the Houthis and the IRGC-QF. The revenue generated through these illicit networks enables the Houthis’ militant efforts, including numerous terrorist attacks in the region using advanced unmanned aerial vehicles and missiles. This action follows the recent U.S. Department of State designation of Ansarallah (commonly known as the Houthis) as a Specially Designated Global Terrorist as a result of their ongoing and unprecedented attacks on international maritime commerce in the Red Sea and Gulf of Aden. This action was taken pursuant to the counterterrorism authority Executive Order (E.O.) 13224, as amended, which targets terrorist groups, their supporters, and those who aid acts of terrorism.  The IRGC-QF was designated pursuant to E.O. 13224 on October 25, 2007, for providing support to multiple terrorist groups.

OFAC also took action against two companies registered in Hong Kong and the Marshall Islands that own and operate a vessel, the Panama-flagged KOHANA, shipping over $100 million in Iranian commodities to businesses in the People’s Republic of China (PRC) on behalf of Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL). MODAFL continues to facilitate the delivery of Iranian weapons, most notably unmanned aerial vehicles (UAVs), to Russia in support of its war of aggression in Ukraine and to Iranian-aligned militia groups in the Middle East.

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

  • Al-Nashiri, Ibrahim of Yemen; and
  • Falahzadeh, Mohammad Reza of Iran.

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

  • Cap Tees Shipping Co., Limited of China;
  • Iridescent Co LTD of the Marshall Islands and China; and
  • Kohana Company Limited of China.

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

  • Artura (3E3496) Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9150365; MMSI 352002279 (vessel); and
  • Kohana (3E4115) Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9254082; MMSI 352002176 (vessel).

https://home.treasury.gov/news/press-releases/jy2125 and https://home.treasury.gov/news/press-releases/jy2127 and https://ofac.treasury.gov/recent-actions/20240227

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February 28, 2024:  The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) redesignated, pursuant to Executive Order (E.O.) 14059, the Los Pochos Drug Trafficking Organization (DTO), and designated three members and four affiliated companies based in Guatemala. First sanctioned in 2019 pursuant to the Kingpin Act, the Los Pochos DTO is a Guatemala-based organization primarily engaged in cocaine trafficking from Guatemala through Mexico to the United States. This action placed renewed attention on the Los Pochos DTO following a change in leadership and involvement of its members in local Guatemalan politics. The Los Pochos DTO controls narcotics trafficking activities on the Guatemala-Mexico border and is associated with Mexico’s Sinaloa Cartel, one of the world’s most notorious drug trafficking organizations.

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

  • Morales Cifuentes, Juan Jose of Guatemala;
  • Ochoa Villagran, Erick Manuel of Guatemala; and
  • Suniga Morfin, Isel Aneli of Guatemala.

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

  • Condado Real of Guatemala;
  • Construhogar of Guatemala;
  • Importadora Jireh of Guatemala; and
  • Wiv, Sociedad Anonima of Guatemala.

https://home.treasury.gov/news/press-releases/jy2133 and https://ofac.treasury.gov/recent-actions/20240228

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February 29, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Venezuela General License 45B, “Authorizing Certain Repatriation Transactions Involving Consorcio Venezolano de Industrias Aeronáuticas y Servicios Aéreos, S.A.”

Venezuela General License 45B: All transactions ordinarily incident and necessary to the repatriation of Venezuelan nationals from non-U.S. jurisdictions in the Western Hemisphere to Venezuela, and which are exclusively for the purposes of such repatriation, involving Consorcio Venezolano de Industrias Aeronáuticas y Servicios Aéreos, S.A. (Conviasa), or any entity in which Conviasa owns, directly or indirectly, a 50 percent or greater interest, that are prohibited by Executive Order (E.O.) 13850, as amended by E.O. 13857, or E.O. 13884, each as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized.

This General License includes transactions for the maintenance (including repair) of the aircraft being used for such repatriation flights.

This general license does not authorize any transactions otherwise prohibited by the VSR, including any transactions involving any person blocked pursuant to the VSR other than the blocked persons described in paragraph (a) of this general license, Government of Venezuela persons blocked solely pursuant to E.O. 13884, Banco Central de Venezuela, or Banco de Venezuela SA Banco Universal.

https://ofac.treasury.gov/recent-actions/20240229 and https://ofac.treasury.gov/media/932686/download?inline

FEBRUARY 2024 EXPORT CONTROL REGULATIONS UPDATES Read More »

JANUARY 2024 EXPORT CONTROL REGULATIONS UPDATES

This newsletter is a listing of the latest changes in export control regulations through January 31, 2024.  The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that 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

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

Anticipated ITAR Rulemaking Developments for 2024

January 4, 2024: The State Department’s Directorate of Defense Trade Controls (DDTC) recently updated its list of planned rulemaking concerning the International Traffic in Arms Regulations (ITAR) and U.S. Munitions List (USML).

Anticipated Developments

DDTC’s anticipated rulemaking list includes 16 intended actions, as well as a civil monetary penalty adjustment. The following are some of the significant rulemaking items.

Proposed Revisions to Defense Services. DDTC plans to publish a proposed rule regarding the ITAR’s control of defense services. Specifically, the proposed rule involves “revisions to definitions and controls related to defense services.” Although this planned rulemaking is new to the regulatory agenda, it is already going through its final interagency review, as DDTC submitted it for that clearance in early November. This proposal will be the fourth proposed rule by DDTC concerning defense services. It published the first proposed rule in 2011, the second in 2013, and the third in 2015. Each time, DDTC conceded that the current rule is “overly broad.”

The ITAR’s defense services controls have been essentially unchanged for four decades—with two notable changes. First, in 1984, when DDTC added the definition of defense services to the ITAR, it changed its policy by controlling technical assistance “regardless of whether technical data will be used or disclosed.” In making that “significant” change, DDTC stated that it was previously the agency’s practice to control assistance “only if it involved the disclosure of technical data or the use of technical data that was not exempt from the licensing requirements of Part 125.” Second, in 1997, DDTC amended the definition to cover military training, now appearing within ITAR § 120.32(a)(3).

USML Revisions. In addition to the defense services proposed rule, DDTC intends to issue the following three rulemakings concerning USML revisions:

  • An interim final rule “to revise and exclude entries on the [USML] that no longer warrant inclusion and to add entries for critical and emerging technologies that do.”
  • A proposed rule that will seek to revise several areas of the USML that may involve revisions to Category IV and XV and circuit boards and semiconductors covered within Category XI(c).
  • A final rule that will respond to public comments and complete the control criteria revisions from the April 2023 interim final rule to Category XI(c)(5), which involves certain high-energy storage capacitors.

DDTC’s regulatory agenda also includes a proposal to modernize the USML and Supplement No. 1 to Part 126 to enhance their “clarity, consistency, and ease of use.” The agenda additionally includes issuing a final rule to address the public comments DDTC received for the USML revisions to Categories IV, V, VIII, XI, and XV that took place through an interim final rule in 2018.

Proposed Registration Fee Increase. DDTC expects to issue a proposed rule to increase the ITAR’s registration fees. The last fee change occurred in 2008, with other previous changes occurring in 2004, 1997, and 1985. The ITAR’s registration fees were the subject of litigation in 2015 concerning DDTC’s ability to raise those fees, but that case did not address the merits because the plaintiff lacked standing. This proposed rule is going through a final interagency review, and DDTC expects to publish it for public comment in the first half of 2024.

Final Rule Concerning Technical Data Releases to Foreign Persons. DDTC plans to issue a final rule to change how the ITAR handles “deemed exports” and “deemed reexports” of technical data to foreign persons so that there is “a release only to any countries in which that foreign person currently holds citizenship or permanent residency.” Both situations currently control such releases “to all countries in which the foreign person has held or holds citizenship or holds permanent residency.” DDTC issued a proposed rule regarding this rulemaking in February 2022.

Final Revisions Clarifying Non-Controlled Events. DDTC intends to issue a final rule amending ITAR § 120.54 to add two activities that are not exports, reexports, retransfers, or temporary imports. As DDTC explained in the proposed rule, the two activities cover:

  • “the taking of defense articles outside a previously approved country by the armed forces of a foreign government or United Nations personnel on a deployment or training exercise is not a controlled event, provided there is no change in end-use or end-user”; and
  • “the transfer of a foreign defense article originally imported into the United States that has since been exported out of the United States, is not a controlled event, unless certain enumerated circumstances have occurred.”

Notably, DDTC acknowledged that the rule intends to “codify” the agency’s “long-standing policy” that these two activities “are not controlled events.”

Proposed Rule Concerning Regular Employees. DDTC intends to issue another proposed rule seeking to revise the meaning of a regular employee within ITAR § 120.64. Specifically, the proposed revisions would update the definition by allowing “subject persons to work remotely, and to clarify the contractual relationships that meet the definition of regular employee.” The first proposed rule, published in May 2021, received several public comments critical of the proposed approach to distinguish between contract employees based on the duration of employment.

Proposed Rule Consolidating Licensing Provisions and Exemptions. DDTC plans to issue a proposed rule involving the consolidation of ITAR Parts 123, 124, and 125. That consolidation will place most licensing exemptions into Part 125, while Part 123 will focus on the licensing requirements and Part 124 will focus on the licensing process. The Defense Trade Advisory Group (DTAG) recently reviewed this consolidation process in October 2023.

Final Rule Concerning the Personal Protective Equipment (PPE) Exemption. DDTC is preparing a final rule “to expand the list of personal protective equipment covered by the exemption in ITAR section 123.17.” DTAG reviewed this exemption in May 2021 and submitted proposed revisions based on its recommendations.

Corrections and Clarifications. DDTC expects to build upon the initial Part 120 consolidation effort with a final rule covering non-substantive corrections and clarifications. DDTC calls this corrections and clarifications rule “ITAR Reorg 1.5.”

https://www.stagg.law/insights/anticipated-itar-rulemaking-developments-for-2024/ and https://www.reginfo.gov/public/do/eAgendaMain?operation=OPERATION_GET_AGENCY_RULE_LIST&currentPub=true&agencyCode=&showStage=active&agencyCd=0600&csrf_token=BF6B3C61CAF8BE26D24EF0A905F8FE61840DA695942104980FE1A083F9518CC504B25D8BCB417A2685F9343620BDA15DED13

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DDTC Updates The Civil Penalty Amount For Inflation

January 5, 2024: 89 Fed. Reg. 700: The U.S. Department of State adjusted the civil monetary penalties (CMP) for regulatory provisions maintained and enforced by the Department of State. The revised CMP adjusts the amount of civil monetary penalties assessed by the Department of State based on the December 2023 guidance from the Office of Management and Budget and by recent legislation. For violations of the International Traffic in Arms Regulations (“ITAR”) the penalty is now:

  • The greater of $1,238,892 or the amount that is twice the value of the transaction that is the basis of the violation with respect to which the penalty is imposed.

https://www.federalregister.gov/documents/2024/01/05/2023-29003/department-of-state-2024-civil-monetary-penalties-inflationary-adjustment

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DDTC Name and Address Changes Posted To Website

January 5 through 12, 2024: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at    

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

  • Change in Name and Address from General Electric International, Inc. at Bureaux 17 et 18 Immeuble Crystal 3, Boulevard des Almoahades, 3 Eme Etage, Casablanca 20030, Morocco to GE Aviation Systems North America LLC – Morocco at CFC Tower Lot 57, 5th Floor, Avenue Main Street, Casa Anfa, Hay Hassani, Casablanca 20250, Morocco due to corporate rebranding;
  • Change in Name from L3Harris Micro Pty Limited to L3Harris Space and Airborne Systems Australia Pty Ltd., due to corporate rebranding;
  • Fokker Technologies Holding B.V. and its operating units in The Netherlands have completed an internal corporate reorganization resulting in the following changes:
    • Fokker Landing Gear B.V. and Fokker Elmo B.V. will change their main addresses to Anthony Fokkerweg 4, 3551 NL Papendrecht, the Netherlands.
    • Fokker Landing Gear B.V. and Fokker Technologies Holding B.V. will merge into Fokker Aerostructures B.V.
    • Fokker Aerostructures B.V. will become a direct subsidiary of Fokker Technologies Group B.V. and will change its name to GKN Fokker Aerospace B.V. (“GKN Fokker Aero”).
    • GKN Fokker Aero will, on occasion, use the trade names “Fokker Landing Gear”, “Fokker Technologies Holding,” and “Fokker Aerostructures” but Fokker Landing Gear B.V. and Fokker Technologies Holding B.V. will no longer exist as separate legal entities.
    • Fokker Elmo B.V. will remain a separate legal entity owned by GKN Fokker Aero;
  • Change in Name from Consilium Technology Proprietary Limited to Aurizn Solutions Proprietary Limited due to merger;
  • Raytheon Company’s headquarters change in Address from 870 Winter Street, Waltham, Massachusetts 02451 to 1100 Wilson Blvd., Arlington, Virginia 22209; and
  • Change in Name from Airbus Group India Private Limited to Airbus India Private Limited due to corporate rebranding.

DSCA Notifies Congress Of Potential FMS Sale To Australia

January 10, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Australia of General Tomahawk Weapons System Support Services Uplift and related equipment for an estimated cost of $250 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale. The Government of Australia has requested to buy services to support the Tomahawk Weapon System, including general weapons support services; logistics support management; material support; engineering technical support; management of technical data; and other related elements of logistics and program support.

https://www.dsca.mil/press-media/major-arms-sales/australia-general-tomahawk-weapons-system-support-services-uplift

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DSCA Notifies Congress Of Potential FMS Sale To Egypt

January 10, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Egypt of Light Tactical Vehicle Chassis and Fleet Build and related equipment for an estimated cost of $200 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale. The Government of Egypt has requested to buy additional light tactical vehicle chassis and fleet build that will be added to a previously implemented case. The original Foreign Military Sales case, valued at $41.9 million, included 4-Man REV1-B Rolling Chassis with 190 horsepower (HP) diesel engines upgraded to 205HP turbocharged engines; training for chassis assembly process, operations, and maintenance; spare and repair parts; testing equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistical and program support.

https://www.dsca.mil/press-media/major-arms-sales/egypt-light-tactical-vehicle-chassis-and-fleet-build

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DSCA Notifies Congress Of Potential FMS Sale To Egypt

January 10, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Egypt of 28-Meter Patrol Craft Kits and related equipment for an estimated cost of $129 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale. The Government of Egypt has requested to buy additional non-Major Defense Equipment (MDE) 28-meter patrol craft production kits and technical support. The kits consist of Rigid Hull Inflatable Boats, forward-looking infrared systems, and computer packages; technical and logistics support services; transportation; spare parts, materials, equipment, and components; and other related elements of logistical and program support.

https://www.dsca.mil/press-media/major-arms-sales/egypt-28-meter-patrol-craft-kits

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DSCA Notifies Congress Of Potential FMS Sale To Kosovo

January 11, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Republic of Kosovo of Javelin Missiles and related equipment for an estimated cost of $75 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale. The Republic of Kosovo has requested to buy two hundred forty-six (246) Javelin FGM-148F missiles (includes six (6) fly-to-buy missiles); and twenty-four (24) Javelin Lightweight Command Launch Units (LWCLU). Also included are Javelin LWCLU Basic Skills Trainers; Javelin Outdoor Trainers; Missile Simulation Rounds; Outdoor Training Instructor Stations (OTIS); Battery Coolant Units (BCUs); System Integration and Check out (SICO); Life Cycle Support (LCS); Javelin Restricted Interactive Electronic Technical Manual (IETM); Javelin Operator Manual and Technical Assistance (TAGM); tools; Javelin gunner training; Ammunition Technical Officer (ATO) training; Javelin maintenance training; and other elements of logistics and program support.

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

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DSCA Notifies Congress Of Potential FMS Sale To Croatia

January 26, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Croatia of UH-60M Black Hawk helicopters and related equipment and services for an estimated cost of $500 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale. The Government of Croatia has requested to buy eight (8) UH-60M Black Hawk helicopters; nineteen (19) T700-GE 701D engines (16 installed, 3 spares); twenty (20) AN/ARC-231A RT-1987 very high frequency (VHF) / ultra high frequency (UHF) / Line of Sight (LOS) satellite communications (SATCOM) radios; ten (10) AN/AAR-57 Counter Missile Warning Systems (CMWS); twenty (20) H-764U Embedded Global Position Systems with Inertial Navigation (EGI) and Selective Availability Anti-Spoofing Module (SAASM) (or future replacement); and eighteen (18) M240H machine guns. Also included are: AN/ARC-231 RT-1808A (or future replacement) VHF/UHF/ LOS SATCOM radios; APR-39C(V)1/4 radar warning receivers; AVR-2B laser detecting sets; APX-123A Identification Friend or Foe (IFF) transponders (or future replacement); ARC-220 high frequency (HF) radio with KY-100M; VRC-100 ground stations; AN/PYQ-10 Simple Key Loader (SKL); KIV-77 Common Identification Friend or Foe (IFF) crypto applique computers; KY-100M; communications security (COMSEC) encryption devices AN/ARN-147(V) VHF Omni-Directional Range (VOR)/instrument landing system (ILS) receiver radio; AN/ARN-149(V) low frequency (LF)/automatic direction finder (ADF) radio receiver; AN/ARN-153 tactical air navigation system (TACAN) receiver-transmitter; AN/APN-209 radar altimeter; AN/ARC-210 radios; EBC-406HM emergency locator transmitter (ELT); Encrypted Aircraft Wireless Intercommunications Systems (EAWIS); Improved Heads-Up Display (IHUD); signal data converters for IHUD; signal data converters for heads-up display (HUD); forward-looking infrared (FLIR) with electro-optical and infrared (EO/IR) capabilities; EO/IR cabin monitoring systems; EO/IR digital video recorder; AN/ARC-201D RT-1478D (or future replacement); Enhanced Ballistic Armor Protection Systems (EBAPS); Internal Auxiliary Fuel Tank Systems (IAFTS); Fast Rope Insertion & Extraction System (FRIES); External Rescue Hoist (ERH); rescue hoist equipment sets; Dual Patient Litter System (DPLS) Sets; Martin Baker palletized Crew Chief/Gunner seats with crashworthy floor structural modifications; External Stores Support System (ESSS); Integrated Tow Plates Production Assets; universal software loading kits; 60k volt-ampere (VA) generator kits; instrument panel sets; external gun mount systems; Black Hawk Aircrew Trainer (BAT); Black Hawk Maintenance Trainer (BHMT-M); Black Hawk Avionics Trainer; Maintenance Blended Reconfigurable Avionics Trainer (MBRAT); training devices; helmets; transportation; organizational equipment; spare and repair parts; support equipment; tools and test equipment; technical data and publications; personnel training and training equipment; U.S. government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support.

https://www.dsca.mil/press-media/major-arms-sales/croatia-uh-60m-black-hawk-helicopters-0

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DSCA Notifies Congress Of Potential FMS Sale To Türkiye

January 26, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Republic of Türkiye of F-16 Aircraft Acquisition and Modernization and related equipment for an estimated cost of $23.0 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale. The Republic of Türkiye has requested to buy 40 new F-16 aircraft and to modernize 79 existing F-16 aircraft to V-Configuration. The request includes: thirty-two (32) F-16 C Block 70 aircraft; eight (8) F-16 D Block 70 aircraft; forty-eight (48) F110-GE-129D engines (40 installed, 8 spares); one hundred forty-nine (149) Improved Programmable Display Generators (iPDG) (40 installed, 10 spares, 99 for modernization program (79 installed, 20 spares)); one hundred forty-nine (149) AN/APG-83 Active Electronically Scanned Array (AESA) Scalable Agile Beam Radars (SABR) (40 installed, 10 spares, 99 for modernization program (79 installed, 20 spares)); one hundred sixty-nine (169) Modular Mission Computers (MMC) 7000AHC (or available mission computer) (40 installed, 10 spares, 119 for modernization program (79 installed, 40 spares)); one hundred fifty nine (159) Embedded Global Positioning System (GPS) Inertial Navigation Systems (INS) (EGI) with Selective Availability Anti-Spoofing Module (SAASM) or M-Code capability and Precise Positioning Service (PPS) (40 installed, 8 spares, 111 for modernization program (79 installed, 32 spares)); one hundred sixty-eight (168) Integrated Viper Electronic Warfare Suite (IVEWS) or equivalent Electronic Warfare (EW) systems (40 installed, 10 spares, 118 for modernization program (79 installed, 39 spares)); eight hundred fifty-eight (858) LAU-129 guided missile launchers; forty-four (44) M61 Vulcan cannons (40 installed, 4 spares); sixteen (16) AN/AAQ-33 Sniper Advanced Targeting Pods (ATP); one hundred fifty-one (151) Multifunctional Information Distribution System-Joint Tactical Radio Systems (MIDS-JTRS) (40 installed and 4 ground terminals, 8 spares, and 99 for modernization program (79 installed and 4 ground terminals, 16 spares)); nine hundred fifty-two (952) Advanced Medium Range Air-to-Air Missiles (AMRAAM) AIM-120C-8 or equivalent missiles; ninety six (96) AMRAAM guidance sections; eight hundred sixty-four (864) GBU-39/B Small Diameter Bombs Increment 1 (SDB-1); two (2) GBU-39(T-1)/B SDB-1 guided test vehicles; two (2) GBU-39(T-1)/B SDB-1 practice bombs; ninety-six (96) AGM-88B High-Speed Anti-Radiation Missiles (HARM); ninety-six (96) AGM-88E Advanced Anti-Radiation Guided Missiles (AARGM); ten (10) AARGM Captive Air Training Missiles (CATM); eleven (11) AARGM control sections; twelve (12) AARGM guidance sections; four hundred one (401) AIM-9X Block II Sidewinder missiles; twelve (12) AIM-9X Block II Sidewinder Captive Air Training Missiles (CATMs); forty (40) AIM-9X Block II Sidewinder tactical guidance units; twelve (12) AIM-9X Block II Sidewinder CATM guidance units; twelve (12) MK82 Inert Filled general purpose bombs; eight hundred fifty (850) Joint Direct Attack Munition (JDAM) KMU-556 tail kits for GBU-31; two hundred (200) JDAM KMU-557 tail kits for GBU-31v3; three hundred eighty-four (384) JDAM KMU-559 tail kits for GBU-32; three (3) JDAM KMU-572 tail kits for GBU-38 or Laser JDAM GBU-54; one thousand fifty (1,050) FMU-152 fuzes. Also included are AMRAAM CATMs; AIM-9X Sidewinder training missiles and Active Optical Target Detectors (AOTD); HARM control sections, rocket motors, and warhead spares; FMU-139 Joint Programmable Fuzes; DSU-38 Laser Guidance Sets for GBU-54; missile containers; AN/ARC-238 radios; AN/APX-127 or equivalent Advanced Identification Friend or Foe (AIFF) Combined Interrogator Transponders (CIT) with mode 5; Joint Helmet Mounted Cueing Systems (JHMCS) II or Scorpion Hybrid Optical-based Inertial Tracker (HObIT) helmet mounted displays; Infrared Search and Track (IRST) pods; AN/ALE-47 Countermeasure Dispenser Systems (CMDS); KY-58 and KIV-78 cryptographic devices; Simple Key Loaders (SKLs); additional secure communications, precision navigation, and cryptographic equipment; Flight Mission Planning Systems (FMPS); Remote Operated Video Enhanced Receivers (ROVER) 6i/6Sis; Tactical Network ROVER kits, and STINGER Multi Bi-Directional (MBI) antennas; SNIPER pod pylons; impulse cartridges, chaff, flares, and ammunition; bomb components and Common Munitions Built-in-Test Reprogramming Equipment (CMBRE); Rackmount Improved Avionics Intermediate Shop (RIAIS); Cartridge Actuated Devices/Propellant Actuated Devices (CAD/PAD); Triple Missile Launcher Adapters (TMLA); aircraft, avionics, and weapons integration, test support, and equipment; major modernization upgrade kits for F-16 Block 40 and Block 50+ aircraft and Service Life Extension Program (SLEP) modifications; aircraft and engine repair and refurbishment after maintenance; engine and aircraft spare and repair parts, consumables, and accessories and repair and return support; aircraft, engine, ground, and pilot support equipment; Classified/Unclassified Computer Program Identification Number (CPIN) systems; electronic warfare database support; pylons, launcher adaptors, weapon interfaces, bomb and ejection racks, conformal fuel tanks, and travel pods; precision measurement equipment laboratory and calibration support; Classified/Unclassified software and software support; Classified/Unclassified publications, manuals, and technical documentation; maps and mapping data; facilities and construction support; simulators and training devices; personnel training and training equipment; U.S. Government and contractor engineering, technical and logistics support services, studies and surveys; and other related elements of logistical and program support.

https://www.dsca.mil/press-media/major-arms-sales/turkiye-f-16-aircraft-acquisition-and-modernization

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DSCA Notifies Congress Of Potential FMS Sale To Greece

January 26, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Greece of F-35 Joint Strike Fighter Conventional Take Off and Landing (CTOL) aircraft and related equipment for an estimated cost of $8.6 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale. The Government of Greece has requested to buy up to forty (40) F-35 Joint Strike Fighter Conventional Take Off and Landing (CTOL) aircraft; and forty-two (42) Pratt & Whitney F135-PW-100 engines (40 installed, 2 spares). Also included are AN/PYQ-10 Simple Key Loaders; KGV-135A embedded secure communications devices; Cartridge Actuated Devices/Propellant Actuated Devices (CAD/PAD); impulse cartridges, chaff, and flares; Full Mission Simulators and system trainers; electronic warfare systems and Reprogramming Lab support; logistics management and support systems; threat detection, tracking, and targeting systems; Contractor Logistics Support (CLS); classified software and software development, delivery and integration support; transportation, ferry, and refueling support; weapons containers; aircraft and munitions support and support equipment; integration and test support and equipment; aircraft engine component improvement program (CIP) support; secure communications, precision navigation, and cryptographic systems and equipment; Identification Friend or Foe (IFF) equipment; spare and repair parts, consumables, and accessories, and repair and return support; minor modifications, maintenance, and maintenance support; personnel training and training equipment; classified and unclassified publications and technical documents; warranties; and U.S. Government and engineering, technical, and logistics support services, studies, and surveys; and other related elements of logistics and program support.

https://www.dsca.mil/press-media/major-arms-sales/greece-f-35-joint-strike-fighter-conventional-take-and-landing-ctol

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Michael Vaccaro Named The New Deputy Assistant Secretary of State for Defense Trade

January 16, 2024: The Directorate of Defense Trade Controls (DDTC) welcomed Michael Vaccaro, the new permanent Deputy Assistant Secretary of State for Defense Trade. As of Tuesday, January 16, 2024, DAS Vaccaro began overseeing DDTC’s mission to ensure commercial exports of defense articles and defense services advance U.S. national security and foreign policy objectives.

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

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

BIS Published Frequently Asked Questions for “Export Controls on Semiconductor Manufacturing Items” (SME IFR) and “Implementation of Additional Export Controls: Certain Advanced Computing Items; Supercomputer and Semiconductor End Use; Updates and Corrections” (AC/S IFR)

January 2024: The Frequently Asked Questions (“FAQs”) address comments received in response to the “Implementation of Additional Export Controls: Certain Advanced Computing and Semiconductor Manufacturing Items; Supercomputer and Semiconductor End Use” (October 7 IFR)(87 Fed. Reg. 62186, October 13, 2022) and amend the Export Administration Regulations (EAR) to implement export controls on semiconductor manufacturing equipment (SME), advanced computing items, and supercomputers more effectively and to address ongoing national security concerns that items in these rules can be used for military modernization and other applications such as the development and production of weapons of mass destruction (WMD). See the following link for the list of FAQs and answers:

https://www.bis.doc.gov/index.php/documents/policy-guidance/3434-2023-frequently-asked-questions-003-clean-for-posting/file

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BIS Increases The Civil Penalty Amount For Inflation

January 15, 2024: 88 Fed. Reg. 89300: Effective on January 15, 2024, the U.S. Department of Commerce, Bureau of Industry and Security adjusted its penalties for violations of Export Controls Act of 2018 (2018), from a maximum of $353,534 to $364,992 pursuant to the 2024 the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.

https://www.federalregister.gov/documents/2023/12/27/2023-28484/civil-monetary-penalty-adjustments-for-inflation

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BIS Enhances Its Voluntary Self-Disclosure Process

January 16, 2024: Accordingly, to better support industry’s and academia’s compliance efforts and to further

streamline BIS’ internal processes, BIS announced that it was making several key updates

regarding our Voluntary Self-Disclosure (VSD) process.

 

Manner of Submission

BIS strongly encourages the submission of VSDs via email. Electronic submissions of initial notifications, extension requests, and narrative accounts of disclosure through the email address bisvsdintake@bis.doc.gov will allow BIS to receive, monitor, and track submissions more effectively, thus enabling a quicker and more responsive interface with those making disclosures. The submissions can also be electronically signed. As before, BOS will continue to accept hard-copy, written paper submissions for VSDs, but BIS has made a change to its VSD webpage to encourage parties to provide an email address in any hard-copy submission to allow for more expedient follow-up and response.

 

Abbreviated Narrative Account of Certain Disclosures

Regarding VSDs that involve only minor or technical infractions, BIS implemented a “fasttrack”

resolution policy on June 30, 2022. Under this dual-track system, VSDs falling under this

category now receive a warning or no-action letter within 60 days of final submission. The current

updates further enhance the “fast-track” resolution policy by adopting an abbreviated “narrative

account” option for the overwhelming majority of VSD submissions.

 

Specifically, parties disclosing violations where no aggravating factors are present may now

submit an abbreviated narrative account as part of their disclosure. The abbreviated narrative account

should briefly describe the nature of the violations as outlined in Section 764.5(c)(3), but need not

include all of the accompanying documentation outlined in Section 764.5(c)(4), unless specifically

requested by the Office of Export Enforcement (OEE). Additionally, parties submitting such

abbreviated narratives do not need to conduct the full five-year lookback recommended in Section

764.5(c)(3), unless specifically requested by OEE.

 

If OEE suspects the presence of aggravating factors that are not disclosed, the OEE Director

will request a full narrative account, including the five-year lookback, with accompanying

documentation. For VSDs that involve circumstances with aggravating factors, submitting parties

should continue to conduct a thorough review of all export-related transactions where possible

violations are suspected. In those instances, BIS continues to recommend that the review of the

suspected violations cover a period of up to five years prior to the date of the initial notification,

consistent with Section 764.5(c)(3).

 

Aggravating factors are addressed in Section IIl(A) of Supplement No. 1 to Part 766. Section 764.5(c)(3) of the EAR outlines the contents of the VSD narrative, which should include:

(i) The kind of violation involved, for example a shipment without the required license or dealing with a party denied export privileges;

(ii) An explanation of when and how the violations occurred;

(iii) The complete identities and addresses of all individuals and organizations, whether foreign or domestic, involved in the activities giving rise to the violations;

(iv) License numbers;

(v) The description, quantity, value in U.S. dollars and ECCN or other classification of the items involved; and

(vi) A description of any mitigating circumstances.”

 

Section 764.5(c)(4)(ii) reads: “Any relevant documents not attached to the narrative account must be retained by the person making the disclosure until OEE requests them, or until a final decision on the disclosed information has been made. After a final decision, the documents should be maintained in accordance with the recordkeeping rules in part 762 of the EAR.”

 

Parties should continue to note, however, that, as explained in Section 764.5(c)(3), “[a]ny violations not voluntarily disclosed do not receive consideration under this section.”

 

What Makes a Violation Significant?

Many apparent violations are minor or technical ones, the result of a good-faith misinterpretation or the checking of a wrong box on a form. If no aggravating factors are present, BIS will generally consider these violations minor and address them through the “fast track” for resolution. Resolutions for minor violations include either a no-action determination letter or a warning letter. In contrast, significant violations are those involving aggravating factors that may result in an administrative penalty or other action.

 

In BIS’ April 18, 2023 policy memorandum, BIS noted that parties could bundle multiple minor

or technical violations – i.e., those without aggravating factors – into one overarching submission, if

the violations occurred close in time. Now, BIS’ VSD webpage further clarifies that parties can

bundle these disclosures for submission on a quarterly basis. This clarification will help streamline

the process for minor or technical infractions and help us to more easily fast-track a response.

 

Treatment of Unlawfully Exported Items

By definition, a party making a voluntary self-disclosure believes that a violation may have

occurred. Therefore, when dealing with an item subject to a VSD, the party making the disclosure is

prohibited from engaging in the activities listed in Section 764.2(e), such as buying, disposing of,

transferring, or storing the item. BIS recognizes that the list of activities prohibited by Section

764.2(e) is an expansive one, and BIS also understand that parties who disclose violations often seek

to take corrective actions. Accordingly, parties may request special permission from BIS to engage

in activities that would otherwise be prohibited by Section 764.2(e).

 

While these requests must be formally submitted to BIS’ s Office of Exporter Services, the VSD webpage updates notify the regulated community that to help expedite the requests, BIS suggest that courtesy copies of such requests be sent to O EE via email. BIS will then work with the Office of Exporter Services to help expedite its review and analysis of the request to ensure decisions to grant such requests are appropriate, thereby allowing the items to be placed back into the lawful stream of commerce.

 

In addition, the VSD webpage updates now make clear that any person (i.e., not just a party

submitting a VSD) may notify the OEE Director that a violation has occurred and request permission

from the Office of Exporter Services to engage in otherwise prohibited activities. OEE will consider

such disclosures to have fulfilled the requirements of Section 764.S(f) even when the request does not

disclose a violation by the submitter (assuming there was no violation by the submitter to disclose),

but instead just seeks permission to engage in otherwise prohibited activities.

 

Furthermore, for parties seeking to return an unlawfully exported item back to the United States from abroad, OEE’s presumptive recommendation will be for BIS to authorize such reexports, regardless of who is seeking such permission.

https://www.bis.doc.gov/index.php/documents/enforcement/3435-vsd-policy-memo-01-16-2024/file

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BIS Deploys Assessment On The Use Of Mature-Node Chips

January 18, 2024: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) is conducting a comprehensive assessment of the use of mature-node semiconductor devices in the supply chains that support—directly or indirectly—U.S. national security and critical infrastructure.  The intent of the survey is to identify how U.S. companies are sourcing mature-node semiconductors, also known as legacy chips. This analysis will inform U.S. policy to bolster the semiconductor supply chain, promote a level playing field for legacy chip production, and reduce national security risks posed by the People’s Republic of China (PRC). The assessment was requested by the Secretary of Commerce in response to findings in a Congressionally mandated report released in December 2023 that assessed the capabilities of the U.S. microelectronics industrial base to support U.S. national defense.

The survey will be performed under Section 705 of the Defense Production Act of 1950 to evaluate the extent of, and visibility into, the use of mature-node chips manufactured by PRC-based companies in supply chains of critical U.S. industries like telecommunications, automotive, medical device, and the defense industrial base.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3437-2024-01-18-bis-press-release-legacy-chip-survey-final/file

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BIS Strengthens Controls Against Russia And Belarus In Response To Russia’s Continued War Against Ukraine

January 23, 2024: The Commerce Department’s Bureau of Industry and Security (BIS) strengthened its existing controls under the Export Administration Regulations (EAR) against Russia and Belarus in response to the Russian Federation’s (Russia’s) ongoing aggression against Ukraine and Belarus’s complicity in the invasion.  This action expands the scope of the EAR’s Russian and Belarusian Industry Sector Sanctions by adding 94 6-digit Harmonized Tariff Schedule (HTS) codes to the list of items requiring a license for export, reexport, or transfer (in-country) to Russia or Belarus.

The expanded list of items includes certain chemicals, lubricants, and metals, and it covers the entirety of Chapter 88 of the HTS (aircraft, spacecraft, and parts thereof), thereby further restricting Russia’s access to inputs for its defense industrial base and better aligning U.S. controls with those implemented by U.S. partners and allies.  The rule also expands controls on certain EAR99 antennas, antenna reflectors, and parts thereof to further restrict these items from going to Iran and Russia, including when produced abroad with U.S. technology or software.

This action also removes the lowest-level military and spacecraft-related items (i.e., .y items) from being eligible for de minimis treatment when incorporated into foreign-made items for export from abroad or reexport to Russia or Belarus.

Finally, the new rule makes several clarifying changes, including by adding an exclusion from BIS license requirements in situations involving transactions that are related to deployments by the Armed Forces of Ukraine to or within the temporarily occupied Crimea region of Ukraine and covered regions of Ukraine.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3439-commerce-strengthens-rules-against-russia-and-belarus/file

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BIS Published A Notice Of Proposed Rulemaking (NPRM) For Establishing New Requirements For Infrastructure As A Service Providers (Iaas Or “Cloud Infrastructure Providers”)

January 29, 2024: 89 Fed. Reg. 5698: The Department of Commerce (Department) published a notice of proposed rulemaking (NPRM) for establishing new requirements for Infrastructure as a Service providers (IaaS or “cloud infrastructure providers”). The NPRM outlines proposed requirements to address the risk of foreign malicious actors using U.S. cloud services that could be used in malicious cyber-enabled activity to harm U.S. critical infrastructure or national security, including to train large artificial intelligence (AI) models.

This NPRM demonstrates the Biden-Harris Administration’s proactive efforts to address the potential national security risks associated with frontier AI models and the abuse of U.S. cloud infrastructure by malicious actors and is a significant step in implementing the President’s Executive Order (EO) on “Safe, Secure, and Trustworthy Use and Development of Artificial Intelligence” (EO 14110) and the National Cybersecurity Strategy.

The proposed rule introduces potential regulations that require U.S. cloud infrastructure providers and their foreign resellers to implement and maintain Customer Identification Programs (CIPs), which would include the collection of “Know Your Customer” (KYC) information. Similar KYC requirements already exist in other industries and seek to assist service providers in identifying and addressing potential risks posed by providing services to certain customers.  Such risks include fraud, theft, facilitation of terrorism, and other activities contrary to U.S. national security interests.

The NPRM also authorizes the imposition of certain special measures that can restrict malicious cyber-enabled actors’ access to U.S. IaaS. In this NPRM, the Department seeks feedback on a number of issues, including: minimum verification standards, access, and record-keeping requirements that providers must adopt; the procedures by which the Secretary of Commerce decides when and how to impose a special measure; and the definitions of several key IaaS and AI-related terms as they apply to the regulations.   This NPRM incorporates many of the public comments received in response to a September 24, 2021, Advanced Notice of Proposed Rulemaking (ANPRM). That ANPRM sought feedback on how the Department should implement various provisions of EO 13984, “Taking Additional Steps To Address the National Emergency With Respect to Significant Malicious Cyber Enabled Activities.” Based on these comments, the Department has drafted the proposed rule to clarify requirements for the public in ways that are consistent with industry and public understanding of IaaS-related products and services.   The deadline for public comments is April 29, 2024.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3443-2024-01-29-bis-press-release-infrastructure-as-as-service-know-your-customer-nprm-final/file and https://www.federalregister.gov/documents/2024/01/29/2024-01580/taking-additional-steps-to-address-the-national-emergency-with-respect-to-significant-malicious

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U.S. Census Bureau

The U.S. Census Bureau Updated AES Tables Regarding Schedule B, Harmonized Tariff Schedule (HTS), and HTS Codes That Are Not Valid

January 2, 2024: The Schedule B, Harmonized Tariff Schedule (HTS), and HTS Codes That Are Not Valid for AES tables have been updated to accept the changes to the January 1, 2024 codes.

AES will accept shipments with outdated codes during a grace period for 30 days beyond the expiration date of December 31, 2023Reporting an outdated code after the 30-day grace period will result in a fatal error.

The ACE program has been updated with the 2024 codes and will accept shipments with outdated codes during the grace period as well.

The 2024 Schedule B and HTS tables are available for downloading at:

http://www.census.gov/foreign-trade/aes/documentlibrary/#concordance

The current list of HTS codes that are not valid for AES are available at:

https://www.census.gov/foreign-trade/aes/documentlibrary/concordance/hts-not-for-aes.txt

Editors tip: Now is the time for exporters to reverify their HTS and Schedule B # classifications to ensure codes used exist in the 2024 tables.

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AES Response Messages Updates

January 17, 2024:  When a shipment is filed to the AES, a system response message is generated and indicates whether the shipment has been accepted or rejected.  If the shipment is accepted, the AES filer receives an Internal Transaction Number (ITN) as confirmation.  Though the shipment is accepted, the filer may still receive a Verify Message, Compliance Alert, Informational Message or Warning Message along with their ITN.  However, if the shipment is rejected, a Fatal Error notification is received and must be corrected to receive a valid ITN.

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

 

Response Code: 341

Narrative:     Ultimate Consignee Must Be Reported Within 4 Days

Severity:       Warning

Reason:        The Party Type is C for Ultimate Consignee and the ‘To Be Sold en Route’ indicator is reported as Yes.

Resolution:  Incomplete Ultimate Consignee information may be declared on an EEI when a ‘To Be Sold en Route’ declaration has been made.  However, the actual Ultimate Consignee must be declared within 4 days of the Estimated Departure Date.

Verify the ‘To Be Sold en Route’ indicator, correct the shipment and resubmit.

 

Response Code:  8VW

Narrative:     Value/Shipping Weight Out of Range

Severity:       Verify

Reason:        For the reported Schedule B/HTS Number, the Value of Goods/Shipping Weight ratio is outside of the expected range.

Resolution:  For a particular Schedule B/HTS Number reported, the value of goods divided by the shipping weight should fall within a certain parameter based on historical statistical averages for that commodity.  Ratios outside this pre-determined parameter might indicate either a keying error or misclassification of the product. Verify the Value of Goods, Shipping Weight and Schedule B/HTS Number, correct the shipment and resubmit (if necessary).  If the line item is verified correct as reported, no action is necessary.

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Department of the Treasury

Treasury Increases The Civil Penalty Amount For Inflation

January 11, 2024: 89 Fed. Reg. 2139: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended its regulations to implement for 2024 the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.  This regulatory amendment adjusts for inflation the maximum amount of the civil monetary penalties that may be assessed under relevant OFAC regulations.  This regulatory amendment took effect on Friday, January 12, 2024.

Maximum CMP Amounts For Relevant Statutes

TWEA $105,083 to $108,489;

IEEPA $356,579 to $368,136;

AEDPA $94,127 to $97,178;

FNKDA $1,771,754 to $1,829,177; and

CDTA $16,108 to $16,630.

https://ofac.treasury.gov/recent-actions/20240111 and https://ofac.treasury.gov/media/932506/download?inline

In The News

Nvidia Semiconductors Acquired By Chinese Entities Despite US Ban

January 15, 2024: Chinese government and military-linked institutions – including AI research institutes and universities – have reportedly succeeded in acquiring Nvidia semiconductors over the past year, skillfully evading stringent export bans by the US. As detailed in comprehensive tender documents reviewed by Reuters, this revelation underscores the complexities surrounding the U.S.-China technological landscape and raises questions about the efficacy of export controls.

The acquisitions, involving small quantities of Nvidia semiconductors, were not facilitated by Nvidia itself or its approved retailers, but rather by lesser-known Chinese suppliers. Notably, the procured Nvidia chips include the A100, H100, A800, and H800 models, all of which were subject to U.S. export bans implemented in the last two years. The U.S. export bans targeted specific Nvidia chips with potential military applications, aiming to curtail China’s access to advanced technologies. Despite these targeted measures, the tender documents reviewed by Reuters indicate a successful circumvention of these restrictions, bringing to light the challenges faced by the United States in imposing comprehensive controls on semiconductor exports.

The list of purchasers includes not only elite universities but also entities subject to U.S. export restrictions, such as the Harbin Institute of Technology and the University of Electronic Science and Technology of China. The procurement of Nvidia chips by these entities, accused of involvement in military matters, showcases the multifaceted nature of this technological landscape. It is noteworthy that none of the entities mentioned in the Reuters review responded to requests for comment. The acquisition of Nvidia chips, renowned for their prowess in AI applications, enhances China’s potential breakthroughs in AI. This, in turn, could contribute to the development of sophisticated computing systems with military applications. The use of these semiconductors may bolster China’s AI capabilities, posing challenges to U.S. technological dominance in this critical field.

https://thetechportal-com.cdn.ampproject.org/c/s/thetechportal.com/2024/01/15/nvidia-semiconductors-acquired-by-chinese-entities-despite-us-ban-report/?amp

LATEST FINES, PENALTIES AND SANCTIONS

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

Fines and Penalties

January 2, 2024: The New Hampshire charity NuDay, a/k/a NuDay Syria, was sentenced in federal court for export offenses.  NuDay was sentenced to five years of probation, the maximum penalty for an organizational defendant.  NuDay was also ordered to pay a $25,000 fine.  On September 8, 2023, NuDay pleaded guilty to three counts of Failure to File Export Information. NuDay was founded by Nadia Alawa as a non-profit charity in 2013 and is headquartered in Windham, New Hampshire.  Alawa served as NuDay’s President, and several family members served as board members and employees.

 

Between 2018 and 2021, NuDay made over 100 shipments to Syria, a country that was subject to sanctions and export restrictions.  NuDay claimed that these shipments were worth over $100 million.  NuDay had the items shipped to Mersin, Turkey, where another company would transship them into Syria.  U.S. Department of Commerce regulations require exporters, such as NuDay, to report true and accurate information about the items being exported, including the shipment’s description, end user, and monetary value.  However, NuDay falsely reported that the end destination of the shipments was Turkey and not Syria, and artificially deflated the value of the goods to be below the $2,500 reporting threshold.  Alawa’s Facebook messages indicated that she and NuDay were aware of export restrictions, including the need to obtain export licenses, but ignored them.

https://www.justice.gov/usao-nh/pr/nuday-charity-sentenced-illegal-exports-syria

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January 3, 2024: Three siblings admitted to buying, transporting and concealing ammunition intended to be smuggled into Mexico. Rolando Herrera, 26, plead guilty to these charges and to another charge of conspiracy to smuggle ammunition with intent to promote a felony. His sisters, Ashley Herrera, 22, and Yamileth Herrera, 21, entered their guilty pleas on Dec. 12, 2023. All are U.S. citizens and maintain residences in Laredo and in Nuevo Laredo, Tamaulipas, Mexico.

Between May 16, 2023, through May 24, 2023, the siblings placed orders at a local sporting goods store for 7,000 rounds of 5.56-millimeter ammunition. Ashley placed the first order of 3,000 rounds which she and Rolando picked up at the store. Ashley later placed a second order in another person’s name for 3,000 rounds who picked up that ammunition and delivered it to the Herreras’ parents’ home. Yamileth later ordered and picked up 1,000 rounds of ammunition.

Rolando admitted he intended to smuggle the ammunition to persons in Mexico, provided the funds for all purchases and requested his sisters order the ammunition for him.

Ashley transported cartons of 6,000 rounds of ammunition to her parents’ home where she and Yamileth moved them into a bedroom where it remained concealed until Rolando would pick it up to smuggle to Mexico.

Law enforcement intercepted Yamileth Herrera who was in possession of 1,000 rounds she had just purchased.

https://www.justice.gov/usao-sdtx/pr/siblings-convicted-purchasing-7000-rounds-ammunition-transport-across-border

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January 8, 2024: A U.S. Navy service member, Petty Officer Wenheng Zhao, 26, aka Thomas Zhao (Zhao) was sentenced to 27 months in prison and ordered to pay a $5,500 fine for transmitting sensitive U.S. military information to an intelligence officer from the People’s Republic of China (PRC) in exchange for bribery payments.

According to court documents, Zhao pleaded guilty in October 2023 to one count of conspiring with the intelligence officer and one count of receiving a bribe.

Zhao, who worked at Naval Base Ventura County in Port Hueneme and held a U.S. security clearance, engaged in a corrupt scheme to collect and transmit sensitive U.S. military information to the intelligence officer in violation of his official duties.

Between August 2021 and at least May 2023, Zhao received at least $14,866 in at least 14 separate bribe payments from the intelligence officer. In exchange for the illicit payments, Zhao secretly collected and transmitted to the intelligence officer sensitive, non-public information regarding U.S. Navy operational security, military trainings and exercises, and critical infrastructure. Zhao entered restricted military and naval installations to collect and record this information.

Zhao transmitted plans for a large-scale maritime training exercise in the Pacific theatre, operational orders and electrical diagrams and blueprints for a Ground/Air Task Oriented Radar system located in Okinawa, Japan.

https://www.justice.gov/opa/pr/us-navy-sailor-sentenced-27-months-prison-transmitting-sensitive-us-military-information

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January 18, 2024: Ilya Kahn, 66, a citizen of the United States, Israel and Russia, and resident of Brooklyn, New York, and Los Angeles, California, was arrested on January 17, 2024, in Los Angeles for his alleged involvement in a years-long scheme to secure and unlawfully export sensitive technology from the United States for the benefit of a Russian business. The business was sanctioned by the U.S. government following Russia’s unprovoked invasion of Ukraine in February 2022 and whose clients included elements of the Russian military and the Federal Security Service (FSB), the main successor agency to the Soviet Union’s KGB.

According to court documents, Kahn is charged by criminal complaint with conspiracy to violate the Export Control Reform Act (ECRA). Kahn will make his initial appearance in the Central District of California.

https://www.justice.gov/opa/pr/businessman-arrested-scheme-illegally-export-semiconductors-and-other-controlled-technology

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January 18, 2024: Jalal Hajavi (Hajavi) was sentenced to 24 months in prison followed by three years of supervised release for criminal conduct in connection with a scheme to unlawfully export heavy equipment from the United States to Iran by routing the shipments though the United Arab Emirates (UAE).

Hajavi was convicted by a jury in September 2023, of conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR), smuggling, and unlawfully exporting and reexporting goods from the United States to Iran without a license.

https://www.justice.gov/opa/pr/exporter-sentenced-prison-shipping-heavy-equipment-iran-violation-us-sanctions

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January 25, 2024: 89 Fed. Reg. 4901: The Bureau of Industry and Security (“BIS”), U.S. Department of Commerce, through its Office of Export Enforcement (“OEE”), renewed the temporary denial order (“TDO”) issued against Venezuela-based cargo airline Empresa de Transporte Aéreocargo del Sur, S.A., a/k/a Aerocargo del Sur Transportation Company, a/k/a EMTRASUR (“EMTRASUR”) on July 25, 2023 for a period of 180 days on the ground that issuance of the order was necessary in the public interest to prevent an imminent violation of the Regulations.

https://www.federalregister.gov/documents/2024/01/25/2024-01411/order-renewing-temporary-denial-of-export-privileges

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January 30, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) imposed a civil penalty of $153,175 against Wabtec Corporation (Wabtec), a global manufacturer and supplier of rail technology headquartered in Pittsburgh, Pennsylvania, to resolve 43 violations of the antiboycott provisions of the Export Administration Regulations (EAR) (antiboycott regulations) alleged in BIS’s Proposed Charging Letter. Wabtec voluntarily disclosed the conduct to BIS, cooperated with the investigation by BIS’s Office of Antiboycott Compliance (OAC), and took remedial measures after discovering the conduct at issue, which resulted in a significant reduction in the penalty.

As part of the BIS settlement, Wabtec admitted to the conduct set forth in a Proposed Charging Letter, which alleged 43 violations of Section 760.5 of the EAR (Failing to Report the Receipt of a Request to Engage in a Restrictive Trade Practice or Foreign Boycott Against a Country Friendly to the United States). Specifically, between February 2018 and July 2022, on forty-three occasions, Wabtec received a request from a customer in Pakistan to refrain from importing Israeli-origin goods into Pakistan in fulfillment of its orders. Wabtec failed to report to BIS the receipt of these requests, as required by Section 760.5 of the EAR, thereby giving rise to the 43 alleged violations.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3444-antiboycott-1-30-2024/file and https://efoia.bis.doc.gov/index.php/documents/antiboycott/alleged-antiboycott-violations-2024/1591-a773/file

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January 31, 2024: Four Chinese nationals were charged in an indictment in the District of Columbia with various federal crimes related to a years-long conspiracy to unlawfully export and smuggle U.S.-origin electronic components from the United States to Iran.

According to court documents, Baoxia Liu, aka Emily Liu; Yiu Wa Yung, aka Stephen Yung; Yongxin Li, aka Emma Lee; and Yanlai Zhong, aka Sydney Chung, unlawfully exported and smuggled U.S. export controlled items through China and Hong Kong ultimately for the benefit of entities affiliated with the Islamic Revolutionary Guard Corps (IRGC) and Ministry of Defense and Armed Forces Logistics (MODAFL), which supervises Iran’s development and production of missiles, weapons, and military aerial equipment to include Unmanned Aerial Vehicles (UAVs).

According to the indictment, beginning as early as May 2007 and continuing until at least July 2020, the defendants utilized an array of front companies in the People’s Republic of China (PRC) to funnel dual-use U.S.-origin items, including electronics and components that could be utilized in the production of UAVs, ballistic missile systems, and other military end uses, to sanctioned Iranian entities with ties to the Islamic Revolutionary Guard Corps (IRGC) and Ministry of Defense and Armed Forces Logistics (MODAFL) such as Shiraz Electronics Industries (SEI), Rayan Roshd Afzar, and their affiliates.

The defendants are charged with conspiring to violate the International Emergency Economic Powers Act (IEEPA), violating IEEPA, smuggling goods from the United States, and one count of submitting false or misleading export information. If convicted, the defendants face a maximum penalty of 20 years in prison for violating the IEEPA; up to 10 years in prison for smuggling goods from the United States; and up to five years in prison for each count of conspiracy and submitting false or misleading export information. Arrest warrants have been issued for Liu, Yung, Li and Zhong who all remain fugitives.

https://www.justice.gov/opa/pr/chinese-nationals-charged-illegally-exporting-us-origin-electronic-components-iran-and

Sanctions

U.S. Department of State

January 17, 2024: The Department of State announced the designation of Ansarallah, commonly referred to as the Houthis, as a Specially Designated Global Terrorist group, effective 30 days from January 17, 2024.

Since November, the Houthis have launched unprecedented attacks against international maritime vessels in the Red Sea and Gulf of Aden, as well as military forces positioned in the area to defend the safety and security of commercial shipping.  These attacks against international shipping have endangered mariners, disrupted the free flow of commerce, and interfered with navigational rights and freedoms.  This designation seeks to promote accountability for the group’s terrorist activities.  If the Houthis cease their attacks in the Red Sea and Gulf of Aden, the United States will reevaluate this designation.

The Houthis must be held accountable for their actions, but it should not be at the expense of Yemeni civilians.  As the Department of State moves forward with this designation, it is are taking significant steps to mitigate any adverse impacts this designation may have on the people of Yemen.  During the 30-day implementation delay, the U.S. government will conduct robust outreach to stakeholders, aid providers, and partners who are crucial to facilitating humanitarian assistance and the commercial import of critical commodities in Yemen.  The Department of the Treasury is also publishing licenses authorizing certain transactions related to the provision of food, medicine, and fuel, as well as personal remittances, telecommunications and mail, and port and airport operations on which the Yemeni people rely.

https://www.state.gov/terrorist-designation-of-the-houthis/

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

January 25, 2024: 89 Fed. Reg. 4804: In response to the Russian Federation’s (Russia’s) ongoing aggression against Ukraine and Belarus’s complicity in the invasion, the Department of Commerce is strengthening its existing sanctions under the Export Administration Regulations (EAR) against Russia and Belarus, including by expanding the scope of the EAR’s Russian and Belarusian Industry Sector Sanctions and making certain changes to the licensing requirements that apply to the occupied Crimea region of Ukraine as well. Additionally, this rule revises recent restrictions targeting Iran’s supply of Unmanned Aerial Vehicles to Russia. This rule also refines certain existing export controls on Russia and Belarus. The Department of Commerce is taking these actions to enhance the effectiveness of its controls on these countries and to better align them with those implemented by U.S. allies and partners.

This rule revises the EAR to enhance and strengthen the existing sanctions against Russia and Belarus by expanding the scope of the Russian and Belarusian industry sector sanctions to better align them with the controls that have been implemented by U.S. allies and partners imposing substantially similar controls on Russia and Belarus, including a control added on Iran pursuant to the Iran UAV rule, that targeted Iran’s supply of UAVs to Russia (88 FR 12150, February 27, 2023) (Iran UAVs rule). For similar policy reasons, this rule also refines other controls on Russia and Belarus that were imposed in response to Russia’s February 2022 further invasion of Ukraine.

This rule enhances and strengthens the sanctions that have been implemented on Russia, Belarus, the occupied Crimea region of Ukraine, and Iran under the EAR, as described under sections A and B below. The regulatory revisions described under Section A. Imposition of new export controls on Russia, Belarus, and Iran, including changes to align controls with those imposed by U.S. allies and partners include:

  • Expansion of Russian and Belarusian Industry Sector Sanctions that apply to items listed in supplement no. 4 to part 746 to add additional items to align with controls imposed by U.S. partners and allies and to make other changes to render the EAR’s controls stronger, more effective, and easier to understand; Expansion of items that require a license under §746.7 when destined to Iran and under §746.8 when destined to Russia or Belarus under supplement no. 7 to part 746 to add an additional item to align with controls imposed by U.S. partners and allies and to make other changes to render the EAR’s controls stronger, more effective, and easier to understand; and
  • Eliminating the lowest-level military and spacecraft-related items (i.e., .y items) from being eligible for de minimis treatment when incorporated into foreign-made items for export from abroad or reexport to Russia or Belarus. A. Imposition of New Export Controls on Russia, Belarus, and Iran, Including Changes To Align Controls With Those Imposed by U.S. Allies and Partners.

This rule expands the scope of the Russian and Belarusian Industry Sector Sanctions (§746.5 of the EAR) by adding additional items to supplement no. 4 to part 746 that will require a license under §746.5(a)(1)(ii), as described further below. This rule also adds an additional item to supplement no. 7 to part 746 that will require a license under §746.7 when destined to Iran and under §746.8 when destined to Russia or Belarus.

https://www.bis.doc.gov/index.php/documents/regulations-docs/federal-register-notices/federal-register-2024/3442-89-fr-4804-russian-and-belarus-sanctions-rule-effective-1-23-24-and-published-1-25-24/file and https://www.bis.doc.gov/index.php/regulations/federal-register-notices#89FR4804

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

January 11, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) updated its Specially Designated Nationals and Blocked Persons List:

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

  • Mikheychik, Vladimir Vladimirovich of Russia.

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

  • Ashuluk Firing Range of Russia; and
  • Vladimirovka Advanced Weapons And Research Complex of Russia.

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

  • RF-78757; Aircraft Manufacture Date 27 Apr 1988; Aircraft Mode S Transponder Code 1533A5; Aircraft Model IL-76MD; Aircraft Manufacturer’s Serial Number (MSN) 83484547; Aircraft Tail Number RF-78757;
  • RF-82011; Aircraft Manufacture Date 31 Dec 1986; Aircraft Mode S Transponder Code 15405B; Aircraft Model AN-124; Aircraft Manufacturer’s Serial Number (MSN) 9773054616023; Aircraft Tail Number RF-82011; and
  • RF-86898; Aircraft Manufacture Date 28 Jan 1982; Aircraft Mode S Transponder Code 155372; Aircraft Model IL-76; Aircraft Manufacturer’s Serial Number (MSN) 23435028; Aircraft Tail Number RF-86898.

https://ofac.treasury.gov/recent-actions/20240111

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January 12, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two companies in Hong Kong (PRC) and the United Arab Emirates for shipping Iranian commodities on behalf of the network of Iran-based, Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF)-backed Houthi financial facilitator Sa’id al-Jamal. OFAC is also identified four vessels as blocked property in which these companies have an interest. The revenue from the commodity sales supports the Houthis and their continued attacks against international shipping in the Red Sea and the Gulf of Aden.

These action is being taken pursuant to the counterterrorism authority in Executive Order (E.O.) 13224, as amended. Sa’id al-Jamal was designated pursuant to E.O. 13224, as amended, on June 10, 2021 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the IRGC-QF. The IRGC-QF was designated pursuant to E.O. 13224 on October 25, 2007 for providing support to multiple terrorist groups.

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

  • Cielo Marine LTD of China; and
  • Global Tech Marine Services Inc of the Marshall Islands and the United Arab Emirates.

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

  • Fortune Galaxy (3E2520) Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9257010; MMSI 352001505;
  • Mehle (3E3893) Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9191711; MMSI 352002537;
  • Molecule (TJMC241) Crude Oil Tanker Cameroon flag; Vessel Registration Identification IMO 9209300; MMSI 613003214; and
  • Sincere 02 (3E4733) Oil Products Tanker Kiribati flag; Vessel Registration Identification IMO 9226011; MMSI 352002984.

https://home.treasury.gov/news/press-releases/jy2022 and https://ofac.treasury.gov/recent-actions/20240112

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January 16, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Venezuela-related General License 5N “Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After April 16, 2024.”

Venezuela-related General License 5N: On or after April 16, 2024, all transactions related to, the provision of financing for, and other dealings in the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond that would be prohibited by subsection l(a)(iii) of Executive Order (E.O.) 13835 of May 21, 2018, as amended by E.O. 13857 of January 25, 2019, and incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized.

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 January 16, 2024, General License No. 5M, dated October 18, 2023, is replaced and superseded in its entirety by this General License No. 5N.

https://ofac.treasury.gov/media/932511/download?inline and https://ofac.treasury.gov/recent-actions/20240116

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January 17, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing a new Counter Terrorism-related Frequently Asked Question (1158).

Frequently Asked Question (1158): On January 17, 2024, the Department of State (State) announced the designation of Ansarallah under Executive Order (E.O.) 13224, as amended, effective February 16, 2024.  What will be the impact of this action?  What steps are the U.S. government taking to ensure that commercial goods and humanitarian assistance continues to flow to the Yemeni people?

Answer: Following the designation of Ansarallah (commonly referred to as “the Houthis”) under E.O. 13224, as amended, on February 16, 2024, OFAC will add the group to the List of Specially Designated Nationals and Blocked Persons (SDN List) as a Specially Designated Global Terrorist.  As a result of the designation, transactions by U.S. persons or within (or transiting) the United States involving Ansarallah will be blocked, unless they are otherwise authorized.  Note that Yemen is not subject to jurisdiction-based sanctions, nor will it become subject to jurisdiction-based sanctions on February 16, 2024.

In order to ensure that the humanitarian aid community and commercial actors can continue providing humanitarian aid and commercial goods in Yemen, on January 17, 2024, OFAC issued five general licenses (GLs) to authorize certain categories of transactions, including:  (1) agriculture, medicine, and medical devices; (2) telecommunications mail, and certain internet communications; (3) personal remittances; (4) refined petroleum products (including fuel); and (5) operation and use of ports and airports for import of goods.  These GLs will take effect on February 16, 2024, the same date on which the designation will take effect.

The above GLs supplement broad preexisting humanitarian GLs in the Global Terrorism Sanctions Regulations (GTSR) covering the United States government, certain international organizations and entities, nongovernmental organizations (NGOs), and for the provision of food, other agricultural commodities, medicine, and medical devices.  For more information on these baseline humanitarian general licenses, please consult OFAC’s Supplemental Guidance for the Provision of Humanitarian Assistance, and FAQs 1105, 1106, 1107, and 1108.  Other humanitarian-related guidance documents are available in the NGO section of OFAC’s Information for Industry Groups webpage.  OFAC also intends to issue further public guidance specifically related to the Ansarallah designation on or before February 16, 2024.

Non-U.S. persons may engage in or facilitate transactions for which a U.S. person would not require a specific license pursuant to the GTSR without exposure to sanctions under the GTSR or E.O. 13224, as amended.

https://ofac.treasury.gov/recent-actions/20240117_33 and https://ofac.treasury.gov/faqs/1106

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January 17, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Alberto Pimentel Mata (Pimentel) for his role in exploiting the Guatemalan mining sector through widespread bribery schemes, including schemes related to government contracts and mining licenses. Pimentel is being designated pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world. This action follows the Department of State’s October 2023 announcement of visa restriction on Pimentel and other individuals for their involvement in significant corruption.

Corrupt and anti-democratic acts undermine Guatemala’s public institutions and threaten the stability of Guatemala and the region as a whole. This action demonstrates the U.S. government’s continued commitment to promote accountability for corrupt and undemocratic actors in Guatemala and expands upon the Administration’s efforts to address corruption as a root cause of irregular migration through the northern Central America region.

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

  • Pimentel Mata, Alberto of Guatemala.

https://home.treasury.gov/news/press-releases/jy2024 and https://ofac.treasury.gov/recent-actions/20240117

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January 17, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued issuing Counter Terrorism General License 22, “Transactions Related to the Provision of Agricultural Commodities, Medicine, Medical Devices, Replacement Parts and Components, or Software Updates Involving Ansarallah,” General License 23, “Authorizing Transactions Related to Telecommunications Mail, and Certain Internet-Based Communications Involving Ansarallah,” General License 24, “Authorizing Noncommercial, Personal Remittances Involving Ansarallah,” General License 25, “Authorizing Transactions Related to Refined Petroleum Products in Yemen Involving Ansarallah,” and General License 26, “Authorizing Certain Transactions Necessary to Port and Airport Operations Involving Ansarallah.”

General License 22: All transactions prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), involving Ansarallah, or any entity in which Ansarallah owns, directly or indirectly, a 50 percent or greater interest, that are ordinarily incident and necessary to the provision (including sale) of agricultural commodities, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices to Yemen, or to persons in third countries purchasing specifically for provision to Yemen, are authorized.

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

(1) Agricultural commodities.  Agricultural commodities are products that:

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

(ii) Are intended for ultimate use in Yemen as:

(A) Food for humans (including raw, processed, and packaged foods; live animals; vitamins and minerals; food additives or supplements; and bottled drinking water) or animals (including animal feeds);

(B) Seeds for food crops;

(C) Fertilizers or organic fertilizers; or

(D) Reproductive materials (such as live animals, fertilized eggs, embryos, and semen) for the production of food animals.

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

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

This General License takes effect February 16, 2024.

https://ofac.treasury.gov/media/932516/download?inline

General License 23: All transactions prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), involving Ansarallah, or any entity in which Ansarallah owns, directly or indirectly, a 50 percent or greater interest, with respect to the receipt or transmission of telecommunications to, from, or in Yemen are authorized.

https://ofac.treasury.gov/media/932521/download?inline

General License 24: All transactions prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), involving Ansarallah, or any entity in which Ansarallah owns, directly or indirectly, a 50 percent or greater interest, that are ordinarily incident and necessary to the transfer of noncommercial, personal remittances to or from an individual in Yemen, are authorized, provided the individual is not a person whose property or interests in property are blocked pursuant to the GTSR.

Noncommercial, personal remittances do not include charitable donations of funds to or for the benefit of an entity or funds transfers for use in supporting or operating a business, including a family-owned business.

Transferring institutions may rely on the originator of a funds transfer with regard to compliance, provided that the transferring institution does not know or have reason to know that the funds transfer is not in compliance.

https://ofac.treasury.gov/media/932526/download?inline

General License 25: All transactions prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), involving Ansarallah, or any entity in which Ansarallah owns, directly or indirectly, a 50 percent or greater interest, that are ordinarily incident and necessary to the provision (including sale) of refined petroleum products for personal, commercial, or humanitarian use in Yemen are authorized.

https://ofac.treasury.gov/media/932531/download?inline

General License 26: All transactions prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), involving Ansarallah, or any entity in which Ansarallah owns, directly or indirectly, a 50 percent or greater interest, that are ordinarily incident and necessary to the operation of, or import or export of goods or transit of passengers through, ports and airports in Yemen are authorized.

https://ofac.treasury.gov/media/932536/download?inline and https://ofac.treasury.gov/recent-actions/20240117

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January 18, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is taking its first oil price cap enforcement action of 2024, targeting a shipping company linked to a price cap violation.

The United States is part of an international coalition of countries (the Price Cap Coalition), including the G7, the European Union, and Australia, that have committed to prohibit the import of crude oil and petroleum products of Russian Federation origin. These countries, home to many best-in-class financial and professional services, have also committed to restrict a broad range of services related to the maritime transport of crude oil and petroleum products of Russian Federation origin (“Russian oil”)—unless that Russian oil is bought and sold at or below the specific price caps established by the Coalition or is authorized by a license. This policy is known as the “price cap.” The price cap is intended to maintain a reliable supply of crude oil and petroleum products to the global market while reducing the revenues the Russian Federation earns from oil after its own war of choice against Ukraine inflated global energy prices.

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

  • Hennesea Holdings Limited of the United Arab Emirates.

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

  • Aristo (5LJI7) Chemical/Products Tanker Liberia flag; Vessel Registration Identification IMO 9327413; MMSI 636022549;
  • Hai II (D5HH9) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9259599; MMSI 636016693;
  • HS Arge (5LIK5) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9299745; MMSI 636022360;
  • HS Buraq (5LIK9) Products Tanker Liberia flag; Vessel Registration Identification IMO 9381732; MMSI 636022364;
  • HS Esberg (5LIN6) Products Tanker Liberia flag; Vessel Registration Identification IMO 9410894; MMSI 636022386;
  • HS Everett (5LIP7) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9410870; MMSI 636022403;
  • HS Glory (D5OH4) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9249087; MMSI 636018127;
  • HS Legend (5LIK7) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9381744; MMSI 636022362;
  • HS Star (D5RV6) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9274446; MMSI 636018885;
  • LA Pride (5LHW6) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9274616; MMSI 636022251;
  • Mona (5LIS6) Chemical/Oil Tanker Liberia flag; Vessel Registration Identification IMO 9314818; MMSI 636022424;
  • Nellis (5LJI8) Chemical/Oil Tanker Liberia flag; Vessel Registration Identification IMO 9322267; MMSI 636022550;
  • Osperous (5LHE4) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9412995; MMSI 636022098;
  • Peria (5LIZ6) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9322827; MMSI 636022479;
  • Sara II (5LJI4) Chemical/Oil Tanker Liberia flag; Vessel Registration Identification IMO 9301615; MMSI 636022546;
  • Sensus (5LHJ7) Products Tanker Liberia flag; Vessel Registration Identification IMO 9296585; MMSI 636022146; and
  • UZE (5LHB3) Chemical/Oil Tanker Liberia flag; Vessel Registration Identification IMO 9323338; MMSI 636022072.

https://home.treasury.gov/news/press-releases/jy2028 and https://ofac.treasury.gov/recent-actions/20240118

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January 18, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 13H, “Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024,” and Russia-related General License 86, “Authorizing Limited Safety and Environmental Transactions Involving Certain Persons or Vessels Blocked on January 18, 2024.” OFAC is also amending Frequently Asked Question 1157.

Russia-related General License 13H: U.S. persons, or entities owned or controlled, directly or indirectly, by a U.S. person, are authorized to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations, certifications, or tax refunds to the extent such transactions are prohibited by Directive 4 under Executive Order 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation, provided such transactions are ordinarily incident and necessary to the day-to-day operations in the Russian Federation of such U.S. persons or entities, through 12:01 a.m. eastern daylight time, April 17, 2024.

https://ofac.treasury.gov/media/932541/download?inline

Russia-related General License 86: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to one of the following activities involving the blocked persons described below are authorized through 12:01 a.m. eastern daylight time, April 17, 2024, provided that any payment to a blocked person must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations (RuHSR):

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

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

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

The authorization of this general license applies to Hennesea Holdings Limited (Hennesea) and any entity in which Hennesea owns, directly or indirectly, a 50 percent or greater interest.

https://ofac.treasury.gov/media/932546/download?inline

Frequently Asked Question 1157: For the purposes of the determination of December 22, 2023 pursuant to Executive Order (E.O.) 14068, as amended by E.O. 14114 of December 22, 2023, (Seafood Determination) what is meant by the terms “salmon,” “cod,” “pollock,” and “crab”? 

Answer: For the purposes of the Seafood Determination, OFAC anticipates publishing regulations defining these terms to include articles defined at the following Harmonized Tariff Schedule of the United States (HTSUS) subheadings:

  • “Salmon:” articles defined at HTSUS subheadings 0302.13.0013, 0302.13.0014, 0302.13.0022, 0302.13.0032, 0302.13.0042, 0302.13.0053, 0302.13.0054, 0302.13.0062, 0302.14.0003, 0302.14.0004, 0302.14.0062, 0303.11.0000, 0303.12.0012, 0303.12.0022, 0303.12.0032, 0303.12.0052, 0303.12.0062, 0303.13.0000, 0303.91.4040, 0304.41.00, 0304.41.0010, 0304.41.0020, 0304.41.0090, 0304.52.00, 0304.52.0010, 0304.52.0015, 0304.52.0020, 0304.52.0090, 0304.81.1000, 0304.81.5010, 0304.81.5090, 0305.20.4020, 0305.41.0000, 0305.69.4000, 1604.11.2020, 1604.11.2030, 1604.11.2090, 1604.11.4010, 1604.11.4020, 1604.11.4030, 1604.11.4040, 1604.11.4050, including any subsequent revisions to the list of HTSUS classifications.
  • “Cod:” articles defined at HTSUS subheadings 0302.51.0010, 0302.51.0090, 0303.63.0010, 0303.63.0090, 0304.44.0010, 0304.44.0015, 0304.53.0010, 0304.53.0015, 0304.71.1000, 0304.71.5000, 0304.95.1010, 0304.95.1015, 0304.95.1020, 0305.32.0010, 0305.32.0090, 0305.51.0000, 0305.62.0010, 0305.62.0025, 0305.62.0030, 0305.62.0045, 0305.62.0050, 0305.62.0060, 0305.62.0070, 0305.62.0080, including any subsequent revisions to the list of HTSUS classifications.
  • “Pollock:” articles defined at HTSUS subheadings 0302.55.1100, 0302.55.5000, 0302.59.5010, 0303.67.0000, 0304.44.0025, 0304.53.0025, 0304.75.1000, 0304.75.5000, 0304.79.1010, 0304.94.1005, 0304.94.1010, 0304.94.1090, 0304.94.9000, 0304.95.1030, 0305.69.1022, 0305.69.1042, 1604.19.1000, 1604.19.2500, including any subsequent revisions to the list of HTSUS classifications.
  • “Crab:” articles defined at HTSUS subheadings 0306.14.2000, 0306.14.40, 0306.14.4003, 0306.14.4006, 0306.14.4009, 0306.14.4012, 0306.14.4015, 0306.14.4020, 0306.14.4030, 0306.14.4090, 0306.33.2000, 0306.33.4000, 0306.93.2000, 0306.93.4000, 1605.10.0510, 1605.10.0590, 1605.10.2010, 1605.10.2022, 1605.10.2025, 1605.10.2030, 1605.10.2051, 1605.10.2059, 1605.10.2090, 1605.10.4002, 1605.10.4005, 1605.10.4010, 1605.10.4015, 1605.10.4025, 1605.10.4030, 1605.10.4035, 1605.10.4040, 1605.10.6010, 1605.10.6090, including any subsequent revisions to the list of HTSUS classifications.

Additionally, these terms apply to products of salmon, cod, pollack and crab classified under the HTSUS subheadings 0301.99.0390, 0302.59.1100, 0304.95.1005, 0304.95.1090, 0304.99.1104, 0304.99.1109, 0304.99.1183, 0305.20.4065, 0305.39.6180, 0305.49.4020, 0305.49.4045, 0305.59.0001, 0305.72.0000, 0305.79.0000, 1603.00.9090, 1604.19.2200, 1604.19.3200, 1604.19.4100, 1604.19.5100, 1604.19.6100, 1604.19.8200, 1604.20.0510, 1604.20.0590, 1604.20.1000, 1604.20.1500, 1604.20.2000, 1604.20.2500, 1604.20.3000, 1604.20.4000, 1604.20.5010, 1604.20.5090, 1604.20.6010, 1604.20.6090, including any subsequent revisions to the list of HTSUS classifications.

https://ofac.treasury.gov/faqs/1157 and https://ofac.treasury.gov/recent-actions/20240118

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January 19, 2024: OFAC released the first video in its “OFAC Basics” video series.  The OFAC Basics: Sanctions List Search video provides viewers with a brief tutorial on how to use OFAC’s Sanctions List Search Tool and recommended steps for assessing a potential match to one of OFAC’s published sanctions lists.  The “OFAC Basics” series serves as a companion series to the “Introduction to OFAC” series.

https://www.youtube.com/watch?v=aQAb7Cf6keI and https://www.youtube.com/watch?v=A1QAv7eNgVo

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January 22, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Counter Terrorism General License 27, “Authorizing Civil Aviation Safety and Wind Down Transactions Involving Fly Baghdad.”  OFAC is also issuing one new Counter Terrorism Frequently Asked Question (1159).

Counter Terrorism General License 27: All transactions prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), that are ordinarily incident and necessary to the provision, exportation, or reexportation of goods, technology, or services to ensure the safety of civil aviation involving Fly Baghdad are authorized through 12:01 a.m. eastern daylight time, March 22, 2024, provided that the goods, technology, or services that are provided, exported, or reexported are for use on aircraft operated solely for civil aviation purposes.

All transactions prohibited by the GTSR that are ordinarily incident and necessary to the wind down of any transaction involving Fly Baghdad are authorized through 12:01 a.m. eastern daylight time, March 22, 2024, provided that any payment to Fly Baghdad must be made into a blocked account in accordance with the GTSR.

This general license does not authorize any transactions otherwise prohibited by the GTSR, including transactions involving any person blocked pursuant to the GTSR other than Fly Baghdad, unless separately authorized.

https://ofac.treasury.gov/media/932556/download?inline

Counter Terrorism Frequently Asked Question 1159: What transactions does Global Terrorism Sanctions Regulations (GTSR) General License (GL) 27 authorize?

Answer: Wind down transactions:  GL 27 authorizes all transactions prohibited by the GTSR that are ordinarily incident and necessary to the wind down of any transaction involving Fly Baghdad through 12:01 a.m. eastern daylight time, March 22, 2024, provided that any payment to Fly Baghdad must be made into a blocked account in accordance with the GTSR.  This includes transactions necessary to wind down leases, refueling contracts, and other commercial agreements with Fly Baghdad or to repossess aircraft leased to Fly Baghdad.

U.S. persons are not required to seek a license from OFAC to initiate legal proceedings against Fly Baghdad, including lawsuits for the repossession of aircraft from Fly Baghdad, although a specific license is required to enter into a settlement or enforce an order transferring property blocked pursuant to the GTSR.

Civil aviation safety transactions:  GL 27 authorizes all transactions prohibited by the GTSR that are ordinarily incident and necessary to the provision, exportation, or re-exportation of goods, technology, or services to ensure the safety of civil aviation involving Fly Baghdad through 12:01 a.m. eastern daylight time, March 22, 2024, provided that the goods, technology, or services are for use on aircraft operated solely for civil aviation purposes.  This includes transactions necessary to ensure the safety of aircraft crew and passengers and the safe operation of aircraft owned or operated by Fly Baghdad and used solely for civil aviation purposes, including maintenance, insurance, and ground services ordinarily incident and necessary to such activities.

U.S. and non-U.S. persons may need to obtain a license from the Department of Commerce’s Bureau of Industry and Security (BIS) for the export or reexport or certain items subject to the Export Administration Regulations (EAR) involving Fly Baghdad or other Specially Designated Global Terrorists (SDGTs).

https://ofac.treasury.gov/faqs/1159

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January 22, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Iraqi airline Fly Baghdad and its CEO for providing assistance to the Islamic Revolutionary Guard Corps–Qods Force (IRGC-QF) and its proxy groups in Iraq, Syria, and Lebanon. OFAC is also designating three leaders and supporters of one of the IRGC-QF’s main Iran-aligned militias in Iraq, Kata’ib Hizballah (KH), as well as a business that moves and launders funds for KH. This action underscores the ongoing threat the IRGC-QF and its proxy network pose to U.S. personnel and the region. KH has carried out a series of sharply escalating drone and missile attacks against U.S. personnel in Iraq and Syria since Hamas’s horrific attack on Israel on October 7. KH and other Iran-aligned militia groups in Iraq have consistently issued statements in support of Hamas’s terrorism and declared their commitment to attacking U.S. personnel.

This action is being taken pursuant to Executive Order (E.O.) 13224, as amended, which targets terrorists and their supporters. The Treasury Department designated the IRGC-QF as a Specially Designated Global Terrorist (SDGT) pursuant to E.O. 13224 on October 25, 2007 for providing support to multiple terrorist groups, and the Department of State designated the group as a Foreign Terrorist Organization (FTO) pursuant to the Immigration and Nationality Act on April 8, 2019. State designated KH as an SDGT pursuant to E.O. 13224 and as a FTO pursuant to the Immigration and Nationality Act on July 2, 2009.

OFAC has updated its Specially Designated Nationals and Blocked Persons List:

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

  • Al-Azzawi, Riyadh Ali Hussein of Iraq;
  • Al-Hamidawi, Awqad Muhsin Faraj of Iraq;
  • Al-‘Ibudi, Hossein Moanes of Iraq;
  • Al-Shabbani, Basheer Abdulkadhim Alwan of Iraq;
  • Hirzallah, Muhammad Fallah Kamil of Palestine;
  • Hirzallah, Na’im Kamil Raghib of Palestine;
  • Hirzallah, Salah Kamil Raghib of Palestine;
  • Hirzallah, Samir ‘Abd Al-Mu’in ‘Abd of Palestine;
  • Hirzallah, Thair Abd Al Raziq Shukri of Israel;
  • Shamlakh, Ahmed of Palestine;
  • Shamlakh, Alaa of Turkey and Palestine;
  • Shamlakh, Imad Younes of Palestine; and
  • Shamlakh, Zuhair of Palestine.

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

  • Al-Markaziya Li-Siarafa of Palestine and Turkey;
  • Al-Massal Land Travel And Tourism Company of Iraq;
  • Arab China Trading Company of Turkey;
  • Fly Baghdad Airlines Company of Iraq;
  • Herzallah Exchange And General Trading Company LLC of Palestine; and
  • Samir Herzallah And Brothers For Money Exchange And Remittances of Palestine.

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

  • YI-BAF; Aircraft Model B 737; Aircraft Operator Fly Baghdad; Aircraft Manufacturer’s Serial Number (MSN) 32412; Aircraft Tail Number YI-BAF; and
  • YI-BAN; Aircraft Model B 737; Aircraft Operator Fly Baghdad; Aircraft Manufacturer’s Serial Number (MSN) 35064; Aircraft Tail Number YI-BAN.

https://ofac.treasury.gov/recent-actions/20240122 and https://home.treasury.gov/news/press-releases/jy2037

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January 23, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC), in coordination with Australia and the United Kingdom, designated Alexander Ermakov (Ermakov), a cyber actor who played a pivotal in the 2022 ransomware attack against Medibank Private Limited, an Australian healthcare insurer.

Australia sanctioned Ermakov for utilizing ransomware to attack the Medibank network and for the exfiltration of sensitive data of 9.7 million users of Medibank services. The United States and the United Kingdom, in solidarity with Australia, are taking action against the same individual because of the similar risk presented by this actor to the United States and the UK.

This action demonstrates that the United States stands with our partners to disrupt ransomware actors who victimize the backbone of our economies and critical infrastructure. Ransomware attacks against healthcare firms, which are frequent targets of ransomware attacks in the United States, present risks to patient care, safety, and sensitive personally identifiable data. Russia continues to provide a safe haven to ransomware actors like Ermakov, enabling cyber actors to freely perpetrate ransomware attacks and other malicious cyber activities from Russia. In addition, Russia has also enabled ransomware attacks by cultivating and co-opting criminal hackers. Treasury has previously stressed that Russia must take concrete steps to prevent cyber criminals from freely operating in its jurisdiction.

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

Ermakov, Aleksandr of Russia.

https://home.treasury.gov/news/press-releases/jy2041 and https://ofac.treasury.gov/recent-actions/20240123

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January 25, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on key officials of the forces of Ansarallah, commonly known as the Houthis, for their support to acts of terrorism targeting commercial shipping. This action targets four individuals who have supported the Houthis’ recent attacks against commercial vessels in the Red Sea and Gulf of Aden, including holding civilian crews hostage. Concurrent with OFAC’s designations, the United Kingdom is also imposing sanctions on these key figures of Houthi forces.

On January 17, 2024, the U.S. Department of State announced the designation of Ansarallah as a Specially Designated Global Terrorist (SDGT), effective February 16, 2024. This OFAC designation of Houthi forces officials, taken in advance of the effective date of the designation of Ansarallah, serves to further promote accountability for the group’s recent terrorist attacks. Individuals targeted are being designated pursuant to Executive Order (E.O.) 13224, as amended, which targets terrorist groups, their supporters, and those who aid acts of terrorism.

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

  • Al-Atifi, Mohamed of Yemen;
  • Al-Nabi, Muhammad Fadl Abd of Yemen;
  • Al-Qadiri, Muhammad Ali of Yemen; and
  • Al-Talibi, Muhammad Ahmad of Yemen.

https://home.treasury.gov/news/press-releases/jy2048 and https://ofac.treasury.gov/recent-actions/20240125

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January 29, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Venezuela-related General License 43A, “Authorizing the Wind Down of Transactions Involving CVG Compania General de Mineria de Venezuela CA.”

Venezuela-related General License 43A: All transactions that are ordinarily incident and necessary to the wind down of any transaction involving CVG Compania General de Mineria de Venezuela CA (Minerven), or any entity in which Minerven owns, directly or indirectly, a 50 percent or greater interest, that are prohibited by Executive Order (E.O.) 13850, as amended by E.O. 13857, or E.O. 13884, each as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized through 12:01 a.m. eastern standard time, February 13, 2024.

This general license does not authorize any transactions otherwise prohibited by the VSR, including any transactions involving any person blocked pursuant to the VSR other than the blocked persons described in this general license, Government of Venezuela persons blocked solely pursuant to E.O. 13884, Banco Central de Venezuela, or Banco de Venezuela SA Banco Universal.

https://ofac.treasury.gov/recent-actions/20240129_33 and https://ofac.treasury.gov/media/932561/download?inline

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January 29, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets

Control (OFAC) and the United Kingdom took joint action against a network of individuals that targeted Iranian dissidents and opposition activists for assassination at the direction of the Iranian regime. The network is led by Iranian narcotics trafficker Naji Ibrahim Sharifi-Zindashti (Zindashti) and operates at the behest of Iran’s Ministry of Intelligence and Security (MOIS). Zindashti’s network has carried out numerous acts of transnational repression including assassinations and kidnappings across multiple jurisdictions in an attempt to silence the Iranian regime’s perceived critics. The network has also plotted operations in the United States. This action was taken in conjunction with the unsealing of an indictment by the Department of Justice and the Federal Bureau of Investigation. The United Kingdom is also designating Mohammad Reza Ansari, who was previously designated by OFAC.

This action was taken pursuant to Executive Order (E.O.) 13553, which authorizes sanctions on certain persons with respect to serious human rights abuses by the Government of Iran. The MOIS was designated pursuant to E.O. 13553 on February 16, 2012 for being responsible for or complicit in the commission of serious human rights abuses against the Iranian people since June 12, 2009. The MOIS was also concurrently designated pursuant to the counterterrorism authority, E.O. 13224, for its support to multiple terrorist groups, including Hizballah, Hamas, and Al-Qa’ida, and pursuant to E.O. 13572, an authority that targets those responsible for human rights abuses in Syria, for its support to the Syrian General Intelligence Directorate.

OFAC also used powerful tools to protect the Iraqi and international financial system from abuse by terrorist financiers, fraudsters, and money launderers. OFAC issued a finding and notice of proposed rulemaking (NPRM) that identifies Al-Huda Bank, an Iraqi bank that serves as a conduit for terrorist financing, as a foreign financial institution of primary money laundering concern. Along with its finding, the Financial Crimes Enforcement Network (FinCEN) proposed a rule that would sever the bank from the U.S. financial system by prohibiting domestic financial institutions and agencies from opening or maintaining a correspondent account for or on behalf of Al-Huda Bank. In addition, the Office of Foreign Assets Control (OFAC) is imposing sanctions on the bank’s owner.

Al-Huda Bank and its foreign sponsors, including Iran and its proxy groups, divert funds that could otherwise support legitimate business and the economic aspirations of the Iraqi people. These bad actors fuel violence that threatens the stability of Iraq and the lives of U.S. and Iraqi citizens alike. Treasury remains committed to its longstanding shared work with the Government of Iraq to strengthen the Iraqi economy and protect both the U.S. and Iraqi financial systems from abuse.

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

  • Al-Moussawi, Hamad of Iraq;
  • Asan, Nihat Abdul Kadir of Iran and Turkey;
  • Esfanjani, Ali of Iran;
  • Hamidiravari, Reza of Iran;
  • KOCAK, Abdulvahap of Turkey;
  • Kocak, Ali of Turkey;
  • Naserzadeh, Muhammad Reza of Iran;
  • Oztunc, Ekrem Abdulkerym of Iran;
  • Pearson, Adam Richard of Canada;
  • Ryan, Damion Patrick John of Canada;
  • Sharifi-Zindashti, Naji Ibrahim of Iran; and
  • Tamarzadeh Zavieh Jakki, Shahram Ali Reza of Iran.

https://home.treasury.gov/news/press-releases/jy2052 and https://home.treasury.gov/news/press-releases/jy2053 and https://ofac.treasury.gov/recent-actions/20240129

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January 30, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two cybersecurity experts affiliated with the Islamic State of Iraq and Syria (ISIS) for providing ISIS leadership and supporters with cybersecurity training, enabling their use of virtual currency, and supporting the terrorist group’s recruitment.  Additionally, OFAC designated an ISIS financial facilitator involved in transferring funds to ISIS-affiliated individuals in Syria.

These actions reinforce the United States’ commitment to the mission of the Counter ISIS Finance Group (CIFG), a working group of the Global Coalition to Defeat ISIS comprising over 80 countries and international organizations.  These designations also coincide with the 19th meeting of the CIFG to discuss the disruption of ISIS financing networks worldwide.

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

  • Al-Sayyid, Sarah Jamal Muhammad of Egypt;
  • Guzel, Faruk of Turkey; and
  • Salim, Mu’min al-Mawji Mahmud of Egypt.

https://home.treasury.gov/news/press-releases/jy2056 and https://ofac.treasury.gov/recent-actions/20240130

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January 31, 2024:  The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned three entities and one individual located in Lebanon and Türkiye for providing critical financial support to an Iranian Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and Hizballah financial network. These entities have generated hundreds of millions of dollars’ worth of revenue from selling Iranian commodities, including to the Syrian government. These commodity sales provide a key source of funding for the IRGC-QF and Hizballah’s continued terrorist activities and support to other terrorist organizations throughout the region.

OFAC also sanctioned three entities for their role in undermining the peace, security, and stability of Sudan. These designations signal the continued commitment of the United States to identify and isolate funding sources for both the Sudanese Armed Forces (SAF) and the Rapid Support Forces (RSF), the two main belligerent parties responsible for the conflict in Sudan.

OFAC also designated two entities closely associated with Burma’s military regime, as well as four cronies, pursuant to Executive Order (E.O.) 14014. OFAC has coordinated this sanctions action to include individuals and entities that were previously designated by Canada’ on October 31, 2023.

Based on the above, OFAC has updated its Specially Designated Nationals and Blocked Persons List:

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

  • Al-‘Uwayr, Ibrahim Talal of Turkey and Syria;
  • Htet, Theint Win of Burma;
  • Kyaw, Win Paing of Burma;
  • Min, Tin Latt of Burma; and
  • Zaw, Thein Win of Burma.

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

  • Al-Fakher Advanced Works CO. LTD. of Sudan;
  • Alkhaleej Bank CO LTD of Sudan;
  • Hydro Company For Drilling Equipment Rental of Lebanon;
  • Mira Ihracat Ithalat Petrol Urunleri Sanayi Ticaret Limited Sirketi of Turkey;
  • Myanma Five Star Line Company Limited of Burma;
  • Shwe Byain Phyu Group of Companies of Burma;
  • Yara S.A.L. Offshore Company of Lebanon; and
  • Zadna International Co For Investment LTD of Sudan.

https://home.treasury.gov/news/press-releases/jy2065 and https://home.treasury.gov/news/press-releases/jy2066 and https://home.treasury.gov/news/press-releases/jy2067 and https://ofac.treasury.gov/recent-actions/20240131

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January 31, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issued Burma General License 6, “Authorizing the Wind Down of Transactions Involving Shwe Byain Phyu Group of Companies.”

Burma General License 6: All transactions prohibited by the Burma Sanctions Regulations, 31 CFR part 594 (BuSR), that are ordinarily incident and necessary to the wind down of any transaction involving Shwe Byain Phyu Group of Companies (SBPG) or any entity in which SBPG owns, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern standard time, March 1, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the BuSR.

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

https://ofac.treasury.gov/recent-actions/20240131 and https://ofac.treasury.gov/media/932566/download?inline

JANUARY 2024 EXPORT CONTROL REGULATIONS UPDATES Read More »

NOVEMBER 2023 EXPORT CONTROL REGULATIONS UPDATES

This newsletter is a listing of the latest changes in export control regulations through November 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 Signs Executive Order Establishing Artificial Intelligence Policy for the Federal Government 

November 1, 2023: 88 FR 75191: On October 30, 2023, the Biden Administration issued Executive Order (E.O.) 14110 on Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence. It establishes a government-wide effort to guide responsible artificial intelligence (AI) development and deployment through federal agency leadership, regulation of industry, and engagement with international partners.

The E.O. directs over 50 federal entities to engage in more than 100 specific actions to implement the guidance set forth across eight overarching policy areas.

  • Safety and security. The E.O. promotes the development and implementation of repeatable processes and mechanisms to understand and mitigate risks related to AI adoption, including with respect to biosecurity, cybersecurity, national security, and critical infrastructure.
  • Innovation and competition. The E.O. compels actions to attract AI talent to the United States, understand novel intellectual property (IP) questions, protect inventors and creators, and promote AI innovation, including at startups and small businesses.
  • Worker support. The E.O. states that AI adoption may be disruptive to the workforce and directs agencies to research and develop potential mitigations against such disruptions.
  • Consideration of AI bias and civil rights. The E.O. states that AI models may perpetuate biases and their implementation may lead to civil rights violations. The E.O. includes a section on equity and civil rights considerations for use of AI in the criminal justice system and the administration of federal government programs and benefits.
  • Consumer protection. The E.O. instructs agencies to enforce existing, technology-agnostic authorities in an effort to minimize harm to consumers, and to identify needed authorities related to AI.
  • The E.O. calls for the evaluation and mitigation of privacy risks—potentially exacerbated by AI— associated with the collection, use, and retention of user data.
  • Federal use of AI. The E.O. requires the Office of Management and Budget (OMB) to establish an interagency council to coordinate AI use by federal agencies and develop guidance on AI governance and risk management activities for agencies. It acknowledges the ubiquity of generative AI (GenAI) tools, and directs agencies to move toward adoption with safeguards in place. The E.O. also calls for additional agency hiring and training activities to increase the AI workforce capacity across the federal government.
  • International leadership. The E.O. declares that the United States should be a global leader in AI development and adoption by engaging with international allies and partners, leading efforts to develop common AI regulatory and accountability principles and advancing responsible global technical standards for AI.

https://www.federalregister.gov/d/2023-24283

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White House Announces Continuation of National Emergency with Respect to Iran

November 7, 2023: On November 14, 1979, by Executive Order 12170, the President declared a national emergency with respect to Iran pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) and took related steps to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by the situation in Iran.

U.S. relations with Iran have not yet normalized, and the process of implementing the agreements with Iran, dated January 19, 1981, is ongoing.  For this reason, the national emergency declared on November 14, 1979, and the measures adopted on that date to deal with that emergency, must continue in effect beyond November 14, 2023.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden authorized the continuation for 1 year the national emergency with respect to Iran declared in Executive Order 12170.

The emergency declared by Executive Order 12170 is distinct from the emergency declared in Executive Order 12957 on March 15, 1995.  This renewal, therefore, is distinct from the emergency renewal of March 10, 2023.

https://www.whitehouse.gov/briefing-room/presidential-actions/2023/11/07/notice-on-the-continuation-of-the-national-emergency-with-respect-to-iran-6/

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

DDTC Name and Address Changes Posted To Website

November 13 through 29, 2023: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at:

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

  • Change in name from Callenberg Technology AB to Trident BMC AB due to acquisition.
  • Change in name and address from General Electric International, Inc. (Israel), 40 Tuval Street, 13th Floor, Ramat Gan 5252247, Israel to GE Aviation Systems North America LLC, 21 Leonardo Da Vinci St., Tel Aviv 6473319, Israel, and all locations in Israel.
  • Change in name from L-3 Communications India Private Ltd. to L3Harris Maritime & Aero Private Ltd. due to corporate reorganization.
  • Change in address for Airbus Military, S.L. from Avenida Aragón 404, 28022 Madrid, Spain to Calle Aviocar 2, 28906 Getafe, Madrid, Spain.
  • Change in name from Teledyne FLIR Detection, Inc. to Teledyne FLIR Defense, Inc. due to corporate reorganization.
  • Change in name from Babcock Defence and Security Holdings LLP to Babcock Land Defence Limited due to corporate restructuring.
  • Change in address from Warwick House, Farnborough Aerospace Centre, Farnborough, Hampshire, GU14 6YU, United Kingdom to Victory Point, Lyon Way, Frimley, Camberley, Surrey, GU16 7EX, United Kingdom for the following entities due to corporate restructuring:
    • BAE Systems (Defence Systems) Limited
    • BAE Systems (Global Combat Munitions) Limited
    • BAE Systems (International) Limited
    • BAE Systems (Military Air) Overseas Limited
    • BAE Systems (Oman) Limited
    • BAE Systems (Operations) Limited
    • BAE Systems Display Technologies Limited
    • BAE Systems Electronic Systems (Overseas) Limited
    • BAE Systems Global Combat Systems Limited
    • BAE Systems (Global Combat Munitions) Limited
    • BAE Systems Hawk (Synthetic Training) Limited
    • BAE Systems Integrated System Technologies
    • BAE Systems (Marine) Limited
    • BAE Systems Surface Ships Limited
    • BAE Systems Integrated System Technologies (Overseas) Limited
    • BAE Systems Project Services Limited
    • BAE Systems Surface Ships International Limited
    • BAE Systems Global Combat Systems Munitions Limited
    • BAE Systems (Defence Systems) Limited
    • BAE Systems Services Limited

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Department of Defense

DSCA Notifies Congress of Potential FMS Sale To Iraq

November 2, 2023: The State Department made a determination approving a possible Foreign Military Sale to the Government of Iraq of Bell Helicopter Contracted Logistics Support (CLS) and related equipment for an estimated cost of $300 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of the possible sale, which will support the foreign policy and national security of the United States by helping to improve the security of a strategic partner. Further, the proposed sale will improve the Republic of Iraq’s capability to meet current and future threats by enhancing the strength of its homeland defense. The Republic of Iraq will have no difficulty absorbing these services into its armed forces.

https://www.dsca.mil/sites/default/files/mas/Press%20Release%20-%2023-63%20Iraq%20CN.pdf

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DSCA Notifies Congress of Potential FMS Sale To Romania

November 9, 2023: The State Department made a determination approving a possible Foreign Military Sale to the Government of Romania of M1A2 Abrams Main Battle Tanks and related equipment for an estimated cost of $2.53 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale, which will support the foreign policy and national security objectives of the United States by helping to improve the security of a NATO Ally which is an important force for political and economic stability in Europe. Further, the proposed sale will improve Romania’s capability to meet current and future threats by providing a credible force that is capable of deterring adversaries and participating in NATO operations. Romania will have no difficulty absorbing this equipment into its armed forces.

https://www.dsca.mil/sites/default/files/mas/Press%20Release%20-%20Romania%2023-71%20CN.pdf

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DSCA Notifies Congress of Potential FMS Sale To South Korea

November 14, 2023: The State Department made a determination approving a possible Foreign Military Sale to the Republic of Korea of Standard Missile 6 Block I (SM-6 Blk I) and related equipment for an estimated cost of $650 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale, which will support the foreign policy goals and national security objectives of the United States by improving the security of a major ally that is a force for political stability and economic progress in the Indo-Pacific region. Further, the proposed sale will improve the Republic of Korea’s capability to meet current and future threats while further enhancing interoperability with the United States and other allies. The Republic of Korea will have no difficulty absorbing these articles into its armed forces.

https://www.dsca.mil/sites/default/files/mas/Press%20Release%20-%20Korea%2023-78%20CN.pdf

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DSCA Notifies Congress of Potential FMS Sale To South Korea

November 15, 2023: The State Department made a determination approving a possible Foreign Military Sale to the Republic of Korea of AIM-9X Block II and Block II+ (Plus) Sidewinder Missiles and related equipment for an estimated cost of $52.1 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale, which will support the foreign policy goals and national security objectives of the United States by improving the security of a major ally that is a force for political stability and economic progress in the Indo-Pacific region. Further, the proposed sale will improve the Republic of Korea’s capability to meet current and future threats while further enhancing interoperability with the United States and other allies. Korea will have no difficulty absorbing these articles into its armed forces.

https://www.dsca.mil/sites/default/files/mas/Press%20Release%20-%20Korea%2023-76%20CN.pdf

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DSCA Notifies Congress of Potential FMS Sale To Japan

November 17, 2023:  The State Department made a determination approving a possible Foreign Military Sale to the Government of Japan of Tomahawk Weapon System and related equipment for an estimated cost of $2.35 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale, which will support the foreign policy goals and national security objectives of the United States by improving the security of a major ally that is a force for political stability and economic progress in the Indo-Pacific region. Further, the proposed sale will improve Japan’s capability to meet current and future threats by providing a long range, conventional surface-to-surface missile with significant standoff range that can neutralize growing threats. Japan will have no difficulty absorbing these articles into its armed forces.

https://www.dsca.mil/sites/default/files/mas/Press%20Release%20-%20Japan%2023-69%20CN.pdf

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

FinCEN and the U.S. Department of Commerce’s Bureau of Industry and Security Announce New Reporting Key Term and Highlight Red Flags Relating to Global Evasion of U.S. Export Controls

November 6, 2023: the Department of Commerce’s Bureau of Industry and Security (BIS) and the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a joint notice highlighting a new Suspicious Activity Report (SAR) key term (“FIN-2023-GLOBALEXPORT”) for financial institutions to reference when reporting potential efforts by individuals or entities seeking to evade U.S. export controls not related to Russia’s invasion of Ukraine. FinCEN and BIS previously issued two joint alerts in June 2022 and May 2023 urging financial institutions to be vigilant against potential Russian export control evasion in response to Russia’s illegal invasion of Ukraine. Financial institutions are encouraged to continue to use the key term “FIN-2022-RUSSIABIS” when filing SARs related to suspected Russian export control evasion.

The joint notice emphasizes the importance of financial institutions applying a risk-based approach to trade transactions and remaining vigilant against efforts by individuals or entities seeking to evade export controls, globally. This joint notice highlights global red flag indicators of export control evasion, with a focus on advanced and critical technologies, that also can be applicable to due diligence efforts of exporters in addition to financial institutions.

BIS leverages SARs to investigate violations of U.S. export control regulations. Investigations involving advanced technologies (e.g., advanced semiconductors, quantum, hypersonics) sought by nation state adversaries to support military modernization efforts designed to overcome U.S. military superiority, or mass surveillance programs that enable human rights abuses are being prioritized and worked through the interagency Disruptive Technology Strike Force, co-led by BIS and the Department of Justice.

The joint notice is part of the ongoing efforts by BIS and the U.S. Department of the Treasury to strengthen export controls and prevent global evasion of U.S. export controls. By working together and leveraging their respective expertise, BIS and FinCEN aim to disrupt illicit acquisition activities and enhance the overall security and integrity of the international trade and financial systems.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3380-2023-11-06-bis-release-export-enforcement-and-fincen-joint-alert-3/file

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LATEST FINES, PENALTIES AND SANCTIONS

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

Fines and Penalties

November 1, 2023: Four individuals were arrested, and an indictment and criminal complaint were unsealed in the Eastern District of New York regarding two separate conspiracies to unlawfully export controlled, dual-use technologies to Russia following Russia’s full-scale invasion of Ukraine.

A Brooklyn, New York, resident and two Canadian nationals were also arrested in connection with a sophisticated global procurement scheme in which the defendants used two corporate entities registered in Brooklyn to unlawfully source and purchase millions of dollars’ worth of dual-use electronics on behalf of end-users in Russia, including companies affiliated with the Russian military. Some of the electronic components and integrated circuits shipped by the defendants are the same make, model, and part number that have been found in seized Russian weapons platforms and signals intelligence equipment in Ukraine.

Separately, a Brooklyn resident was arrested, and a four-count indictment was unsealed alleging an illegal exports scheme to procure dual-use electronic components for entities in Russia involved in the development and manufacture of drones for the Russian war effort in Ukraine.

According to court documents, Nikolay Goltsev, 37, of Montreal, Canada; Salimdzhon Nasriddinov, 52, of Brooklyn; and Kristina Puzyreva, 32, of Montreal, Canada have been charged in a sanctions evasion and export control scheme, in which millions of dollars’ worth of semiconductors, integrated circuits and other dual-use electronic components were unlawfully exported to Russia through two Brooklyn front companies.

In a four-count indictment unsealed in the Eastern District of New York, Nikita Arkhipov, 39, and Artem Oloviannikov, 37, both of St. Petersburg, Russia; and Nikolay Grigorev, 36, of Brooklyn; are charged with conspiracy and other offenses related to an export control scheme to benefit companies affiliated with the Russian military, including SMT-iLogic, a sanctioned Russian entity that has been identified as part of the supply chain for producing Russian military drones used in Russia’s war against Ukraine.

These actions were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force and the Justice Department’s Task Force KleptoCapture. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine.

https://www.justice.gov/opa/pr/four-arrested-and-multiple-russian-nationals-charged-connection-two-schemes-evade-sanctions

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November 3, 2023: The Department of Commerce’s Bureau of Industry and Security (BIS) announced the imposition of a civil penalty of $44,750 against Forta LLC (Forta), a manufacturer of synthetic reinforcement fibers, located in Grove City, Pennsylvania, to resolve three violations of the antiboycott provisions of the Export Administration Regulations (EAR, 15 C.F.R. parts 730-774) (antiboycott regulations), as alleged in BIS’s Proposed Charging Letter (PCL). Forta voluntarily disclosed the conduct to BIS, cooperated with the investigation by BIS’s Office of Antiboycott Compliance (OAC), and took remedial measures after discovering the conduct at issue, all of which resulted in a significant reduction in penalty.

As part of the settlement with BIS, Forta admitted to the conduct set forth in the PCL, which alleged violations involving the furnishing of information about business relationships with boycotted countries or blacklisted persons and the failure to report the receipt of a request to engage in a restrictive trade practice or foreign boycott against a country friendly to the United States. Specifically, Forta participated in a trade show in Abu Dhabi in 2019. In connection with the shipment of products and items for display at the trade show, the company furnished to its freight forwarder a commercial invoice/packing list certifying that the goods were not of Israeli origin and not manufactured by a company on the “Israeli Boycott Blacklist.” Furnishing such information is prohibited by Section 760.2(d) of the EAR. In addition, the company failed to report to BIS the receipt of the request to furnish this information as required by Section 760.5 of the EAR.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3377-2023-11-03-forta-antiboycott-settlement/file

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November 3, 2023: Pursuant to Section 766.24 of the Export Administration Regulations, 15 CFR Parts 730–774 (2021) (“EAR” or “the Regulations”), the Commerce Department’s Industry and Security Bureau  granted the request of the Office of Export Enforcement (“OEE”) to renew the temporary denial order issued in this matter on May 5, 2023. The Bureau has found that renewal of this order, as modified, is necessary in the public interest to prevent an imminent violation of the Regulations and that renewal for an extended period is appropriate because Mahan Airways has engaged in a pattern of repeated, ongoing and/or continuous apparent violations of the EAR.

  • Mahan Airways of Iran
  • Pejman Mahmood Kosarayanifard, a/k/a Kosarian Fard of the United Arab Emirates
  • Mahmoud Amini of the United Arab Emirates
  • Kerman Aviation, a/k/a GIE Kerman Aviation of France
  • Sirjanco Trading LLC of the United Arab Emirates
  • Mahan Air General Trading LLC of the United Arab Emirates
  • Mehdi Bahrami of Turkey
  • Al Naser Airlines, a/k/a al-Naser Airlines, a/k/a Al Naser Wings Airline, a/k/a Alnaser Airlines and, Air Freight Ltd of the United Arab Emirates
  • Ali Abdullah Alhay, a/k/a Ali Alhay, a/k/a Ali Abdullah Ahmed Alhay of Saudi Arabia
  • Bahar Safwa General Trading of the United Arab Emirates
  • Sky Blue Bird Group, a/k/a Sky Blue Bird Aviation, a/k/a Sky Blue Bird Ltd., a/k/a Sky Blue Bird FZC of the United Arab Emirates
  • Issam Shammout, a/k/a Muhammad Isam Muhammad, Anwar Nur Shammout, a/k/a Issam Anwar of Turkey

https://www.federalregister.gov/d/2023-24310

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November 6, 2023: Swift Prepaid Solutions, Inc. d/b/a daVinci Payments (daVinci), a financial services and payments firm based in Buffalo Grove, Illinois, has agreed to remit $206,213 to settle its potential civil liability for 12,391 apparent violations of OFAC sanctions on Crimea, Iran, Syria, and Cuba.

Between November 15, 2017 and July 27, 2022, daVinci, which manages prepaid reward card programs, enabled reward cards to be redeemed from persons apparently resident in sanctioned jurisdictions. The settlement amount reflects OFAC’s determination that daVinci’s conduct was non-egregious and was voluntarily self-disclosed.

Between March 2020 and February 2022, in the course of a compliance review and subsequent investigation, daVinci discovered that on 12,378 occasions it had redeemed prepaid cards for users with Internet Protocol (IP) addresses associated with Iran, Syria, Cuba, and Crimea. After daVinci began preventing access to its platform from IP addresses associated with these sanctioned jurisdictions, the company further discovered it had redeemed prepaid cards for 13 card recipients who had used email addresses with suffixes (sometimes called top-level domains) associated with sanctioned jurisdictions (e.g., Syria is .sy, Iran is .ir) during the redemption process and who were apparently resident therein. Over the course of the relevant time period, this absence of comprehensive geolocation controls led daVinci to process 12,391 redemptions totaling $549,134.89 for cardholders apparently located in sanctioned jurisdictions, resulting in apparent violations of the Cuban Assets Control Regulations, 31 C.F.R. § 515.201; the Iranian Transactions and Sanctions Regulations, 31 C.F.R. 2 § 560.204; the Ukraine-/Russia-Related Sanctions Regulations, 31 C.F.R. § 589.287; and the Syrian Sanctions Regulations, 31 C.F.R. § 542.207 (the “Apparent Violations”).

This enforcement action underscores the importance of obtaining and using all available information to verify a customer’s identity or residency, including by using location-related data, such as IP address and top-level domains, for sanctions compliance purposes. As appropriate, firms providing services through online platforms should integrate such information into a risk-based sanctions compliance program to prevent the provision of services to persons in sanctioned jurisdictions. This case further demonstrates the potential shortcomings of controls that rely on customer-provided information, rather than a holistic information-gathering system that can mitigate evasion or misrepresentation. The action further highlights the value of conducting proactive, self-initiated reviews to identify compliance gaps, disclose any potential violations to OFAC, and taking steps to remediate deficiencies, including by instituting periodic independent testing to ensure adequate controls.

https://ofac.treasury.gov/media/932276/download?inline

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November 7, 2023: Matthew S. Axelrod, Assistant Secretary for Export Enforcement at the U.S. Commerce Department’s Bureau of Industry and Security (BIS), issued a Temporary Denial Order (TDO) suspending the export privileges of seven persons and three companies – Nikolay Goltsev, Salimdzhon Nasriddinov, Kristina Puzyreva, Oleg Zenchenko, Yekaterina Vetoshkina, Pavel Chernikov, Vladimir Bochkarev, SH Brothers Group Inc. (SH Brothers), SN Electronics, Inc. (SN Electronics), and Suntronic F.Z.E. (Suntronic). These ten parties are alleged to be part of a sophisticated global procurement scheme that unlawfully sourced and purchased millions of dollars in dual-use electronics for end-users in Russia, including companies affiliated with the Russian military.

These actions are related to an indictment in the Eastern District of New York and are the result of coordination by the Disruptive Technology Strike Force co-led by the Departments of Justice and Commerce and Task Force KleptoCapture. Goltsev, Nasriddinov, Puzyreva, Zenchenko, Vetoshkina, Chernikov, and Bochkarev were indicted in the Eastern District of New York on multiple charges, including conspiracy to violate the Export Control Reform Act. Goltsev, Nasriddinov and Puzyreva were previously arrested on October 31, 2023, pursuant to a criminal complaint. The actions by the Department of Commerce build on the indictment by blocking SH Brothers, SN Electronics, and Suntronic, along with the other parties to the TDO, from access to U.S. origin items and technologies.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3382-2023-11-07-bis-press-release-sh-brothers-tdo/file

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November 14, 2023: Pursuant to section 766.24 of the Export Administration Regulations (the “Regulations” or “EAR”), the Bureau of Industry and Security (“BIS”), U.S. Department of Commerce, through its Office of Export Enforcement (“OEE”), has requested the issuance of an Order temporarily denying, for a period of 180 days, the export privileges under the Regulations of:

  • Nikolay Goltsev, a/k/a Nick Stevens, a/k/a Gio Ross of Quebec, Canada.
  • Salimdzhon Nasriddinov of New York, USA
  • Kristina Puzyreva of Quebec, Canada
  • Vladimir Bochkarev of Russia
  • Pavel Chernikov of Russia
  • Yekaterina Vetoshkina of Russia
  • Oleg Zenchenko of Russia
  • SH Brothers Group, Inc. of New York, USA
  • SN Electronics, Inc. of New York, USA
  • Suntronic FZE of the United Arab Emirates

https://www.federalregister.gov/d/2023-25005

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November 21, 2023: The U.S. Department of the Treasury, through the Financial Crimes Enforcement Network (FinCEN), the Office of Foreign Assets Control (OFAC), and IRS Criminal Investigation (CI), has taken unprecedented action to hold Binance Holdings Ltd. and its affiliates (collectively, Binance) accountable for violations of the U.S. anti-money laundering (AML) and sanctions laws that protect American national security and the integrity of the international financial system. Binance is the world’s largest virtual currency exchange, responsible for an estimated 60% of centralized virtual currency spot trading.

Binance settled with FinCEN and OFAC for violations of the Bank Secrecy Act (BSA) and apparent violations of multiple sanctions programs. The violations include failure to implement programs to prevent and report suspicious transactions with terrorists — including Hamas’ Al-Qassam Brigades, Palestinian Islamic Jihad (PIJ), Al Qaeda, and the Islamic State of Iraq and Syria (ISIS) — ransomware attackers, money launderers, and other criminals, as well as matching trades between U.S. users and those in sanctioned jurisdictions like Iran, North Korea, Syria, and the Crimea region of Ukraine. By failing to comply with AML and sanctions obligations, Binance enabled a range of illicit actors to transact freely on the platform. This settlements are part of a global agreement simultaneous with Binance’s resolution of related matters with the Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC).

FinCEN’s settlement agreement assesses a civil money penalty of $3.4 billion, imposes a five-year monitorship, and requires significant compliance undertakings, including to ensure Binance’s complete exit from the United States. OFAC’s settlement agreement assesses a penalty of $968 million and requires Binance to abide by a series of robust sanctions compliance obligations, including full cooperation with the monitorship overseen by FinCEN. To ensure that Binance fulfils the terms of its settlement — including that it does not offer services to U.S. persons — and to ensure that illicit activity is addressed, Treasury will retain access to books, records, and systems of Binance for a period of five years through a monitor. Failure to live up to these obligations could expose Binance to substantial additional penalties, including a $150 million suspended penalty, which would be collected by FinCEN if Binance fails to comply with the terms of the required compliance undertakings and monitorship.

The monitor will oversee remedial undertakings necessary to address Binance’s failure to comply with its anti-money laundering and sanctions obligations. The monitor will also conduct periodic reviews and report to FinCEN, OFAC, and the CFTC on its findings and recommendations to ensure Binance’s ongoing compliance with the terms of the settlement agreements.

These actions underscore Treasury’s commitment to promoting compliance within the virtual currency industry, including by actively enforcing AML and sanctions laws. Treasury’s authorities to enforce those laws are broad, reaching a wide range of misconduct, and can apply to both U.S. and foreign persons. Wherever located, virtual currency exchanges and financial technology firms should, like any other financial institution, ensure they adopt a managerial commitment to compliance at the very top, and that risk-based programs and controls are integrated effectively into their platforms and technology from “Day One.”

https://home.treasury.gov/news/press-releases/jy1925

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November 22, 2023: On June 23, 2022, in the U.S. District Court for the Southern District of Texas, Samantha Coronado (“Coronado”) was convicted of violating 18 U.S.C. 554(a). Specifically, Coronado was convicted of smuggling 730 rounds of CBC .50 caliber ammunition from the United States to Mexico. As a result of her conviction, the Court sentenced Coronado to 46 months of confinement, three years of supervised release and a $100 assessment.

The Bureau of Industry and Security has decided to deny Coronado’s export privileges under the Regulations for a period of seven years from the date of Coronado’s conviction. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Coronado had an interest at the time of her conviction.

From the date of this Order until June 23, 2029, Samantha Coronado, with a last known address of Inmate Number: 83982–509, FMC Carswell, Federal Medical Center, P.O. Box 27137, Fort Worth, TX 76127, and when acting for or on her behalf, her successors, assigns, employees, agents or representatives (“the Denied Person”), may not directly or indirectly participate in any way in any transaction involving any commodity, software or technology (hereinafter collectively referred to as “item”) exported or to be exported from the United States that is subject to the Regulations.

https://www.federalregister.gov/d/2023-25838

Sanctions

U.S. Department of State

November 2, 2023: The Department of State imposed sanctions to further target individuals and entities associated with Russia’s war effort and other malign activities. All targets are being designated pursuant to Executive Order (E.O.) 14024, which authorizes sanctions with respect to specified harmful foreign activities of the Government of the Russian Federation. The Department of State designated a major entity involved in the development, operation, and ownership of Russia’s key Arctic LNG 2 liquified natural gas (LNG) project, as well as the metals and mining sector of the Russian Federation economy, and a network procuring items in support of the production of the KUB-BLA and Lancet suicide drones being used by the Russian military in Ukraine.

  • Limited Liability Company Arctic LNG 2 (LLC Arctic LNG 2)
  • Joint Stock Company Russian Titanium Resources (Rustitan)
  • Anatoliy Nikolaevich Tkachuk
  • Alexey Alexeyevich Novikov
  • Russian Titanium Resources Limited
  • Limited Liability Company Zala Aero
  • A Level Aerosystems Cst
  • Aleksandr Vyacheslavovich Zakharov
  • Svetlana Nikolaevna Zakharova
  • Limited Liability Company Invest Group
  • Maria Aleksandrovna Osetrova
  • Limited Liability Company Scientific And Technical Center Orion
  • Limited Liability Company Doris
  • Lavrentii Aleksandrovich Zakharov
  • Nikita Aleksandrovich Zakharov
  • Limited Liability Company Aeroscan
  • Limited Liability Company Emergency Digital Solutions
  • Limited Liability Company RTK
  • Limited Liability Company Omp
  • Maksim Alekseyevich Kotelnikov
  • Limited Liability Company Hartis DV
  • Dmitriy Alekseyevich Dmitriev
  • Limited Liability Company Id Solution
  • Igor Nikolaevich Ievlev
  • Ooo Mvizion
  • Limited Liability Company Sputnik Electronics
  • Limited Liability Company Technical Center Windeq
  • Limited Liability Company Alfakomponent
  • Limited Liability Company Fotopark
  • Limited Liability Company Bik Inform
  • Limited Liability Company Nanochip
  • Limited Liability Company N Chip Msk
  • Limited Liability Company Sputnik Spetspostavka
  • Limited Liability Company Entep
  • Limited Liability Company Spetstechnotrade
  • Limited Liability Company Orelmetallpolymer
  • Bestop Globle Mfg Limited
  • Limited Liability Company Legion Komplekt (Legion Komplekt)
  • Baltelektron Limited Liability Company
  • Makro Tim Limited Liability Company
  • Dafeng Asia Co LLC
  • Limited Liability Company Advanta Electro
  • Limited Liability Company Comfort Max
  • Neway Technologies Limited
  • LLC Laser Components
  • Limited Liability Company Scientific Production Company Electronic, Optical, And Mechanical Systems
  • Limited Liability Company Stilsoft
  • Limited Liability Company New Technologies
  • Joint Stock Company Npc Spetsneftprodukt
  • Moscow State Technical University Named After N. E. Bauman
  • Limited Liability Company Machine Building Association Pressmash
  • Limited Liability Company Lanmax (Lanmax)
  • Dream Lite Trading LLC
  • Limited Liability Company Mdikam Ek
  • Bliksem Computers & Requisites Trading Company LLC
  • Joint Stock Company Plastmass Plant
  • Gleb Romanovich Trotsenko
  • Limited Liability Company Lex Prime
  • Limited Liability Company Start Aero
  • Limited Liability Company Gleniks Teknolodzhis
  • LLC A Invest
  • Limited Liability Company Infrastructure Corporation Aeon
  • Limited Liability Company Tsrti
  • LLC Bp Inzhiniring
  • LLC Aeon Development
  • Limited Liability Company Ri2
  • Limited Liability Company Yacht Club River Park Nagatino
  • Limited Liability Company Rechnikov Invest
  • Limited Liability Company River Park
  • Limited Liability Company Yup 2
  • Limited Liability Company Ksk Ltd
  • Limited Liability Company Torgrechtrans
  • Limited Liability Company Ahd South Port
  • Limited Liability Company Rassvet
  • Limited Liability Company Flemsted
  • LLC Tsentrtekhkhimmash
  • Qualified Developer Kutuzovskiy 16 Limited Liability Company
  • Limited Liability Company Ahd Kutuzovskiy Towers
  • Elena Igorevna Milskaia
  • Limited Liability Company Kaliningrad Balttrans
  • Limited Liability Company Pozitivinfo
  • Limited Liability Company Prospekt
  • Interregional Public Organization For The Promotion Of Domestic Traditions And Cultural Heritage Veche
  • Salman Soipovich Zakriev
  • Yakub Salmanovich Zakriev
  • Public Legal Company Military Construction Company
  • LLC Abz Belyi Rast
  • Federal Autonomous Institution Roskapstroy
  • Limited Liability Company Roskapstroy Infrastructural Projects
  • Limited Liability Company Roskapstroy Clean Water
  • Limited Liability Company Roskapstroy Novorossiya
  • Aleksey Sergeevich Besprozvannykh
  • Anastasiya Borisovna Bondarenko
  • Viktor Leonidovich Evtukhov
  • Oleg Yurevich Kachanov
  • Dmitriy Aleksandrovich Oguryaev
  • Lev Valentinovich Gershanok
  • Aleksey Mikhaylovich Serko

https://www.state.gov/taking-additional-sweeping-measures-against-russia/

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

November 6, 2023: 88 FR 76128: The Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) by adding 13 entities to the Entity List under the destinations of Russia (12), and Uzbekistan (1). These entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States.

Russia

  • Aeroscan Limited Liability Company;
  • Alfakomponent;
  • BIC-Inform LLC;
  • Hartis DV LLC;
  • ID Solution LLC;
  • OOO OMP;
  • Orelmetallpolimer LLC;
  • Spel LLC;
  • Spetstehnotreyd LLC;
  • STC Orion LLC;
  • Technical Center Windeq LLC
  • ZALA Aero Group.

Uzbekistan

  • Mvizion LLC.

https://www.federalregister.gov/d/2023-24508

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November 14, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued an OFAC Compliance Communiqué: Guidance for the Provision of Humanitarian Assistance to the Palestinian People in response to questions from the NGO community and the general public on how to provide humanitarian assistance while complying with OFAC sanctions.

OFAC issued this guidance to clarify that U.S. sanctions do not stand in the way of legitimate humanitarian assistance to the Palestinian people. Donors seeking to support the Palestinian people are encouraged to donate to trusted organizations.

https://ofac.treasury.gov/media/932311/download?inline

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November 17, 2023: 88 FR 80955: The Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) by adding four entities under nine entries to the Entity List. These entities are listed under the destinations of Costa Rica (1), Ecuador (1), India (1) Panama (2), Spain (1), Russia (1), and Venezuela (2). These entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States.

The End-User Review Committee (ERC) determined to add Aerofalcon S.L., under the destination of Spain; Novax Group S.A., under the destinations of Costa Rica, Ecuador, Panama, Venezuela, and Russia; and Zero Waste Global SA, under the destinations of Panama and Venezuela, to the Entity List. These entities are added to the Entity List pursuant to § 744.11 of the EAR for engaging in activities contrary to U.S. national security and foreign policy interests. Specifically, these entities were used by their principals to circumvent U.S. sanctions, supplying the representatives of Nicolás Maduro in Venezuela with U.S. origin aircraft parts. This circumvention was conducted by, among other efforts, concealing the true end user and end destination of the exports using misrepresentations and fraudulent documents, including the filing of false Electronic Export Information. These entities will be added with a license requirement for all items subject to the EAR and a license review policy of presumption of denial.

The ERC also determined to add Si2 Microsystems Private Limited, under the destination of India, to the Entity List. This entity is added to the Entity List for providing support to Russia’s military and/or defense industrial base. Specifically, this entity supplied Russian consignees connected to the Russian defense sector with U.S.-origin integrated circuits after March 1, 2023. These integrated circuits are classified under Harmonized Tariff System (HTS)-6 codes 854231, 854232, 854233, and/or 854239. These HTS–6 codes are identified under supplement no. 4 to part 746 (Russian and Belarusian Industry Sector Sanctions Pursuant to § 746.5(a)(1)(ii)). All U.S.-origin items classified under these HTS–6 codes have been controlled for export and reexport and transfer within Russia since September 15, 2022. Such U.S.-origin items require a license under § 746.5(a)(1)(ii) of the EAR when destined to Russia or Belarus. Therefore, the documented shipments by this entity to Russia of such U.S.-origin items are contrary to U.S. national security and foreign policy interests under § 744.11(b) of the EAR. This entity will be added with a license requirement for all items subject to the EAR and a license review policy of denial.

Costa Rica

  • Novax Group S.A.

Ecuador

  • Novax Group S.A.

India

  • Si2 Microsystems Private Limited.

Panama

  • Novax Group S.A.;
  • Zero Waste Global SA.

Spain

  • Aerofalcon S.L.

Russia

  • Novax Group S.A.

Venezuela

  • Novax Group S.A.;
  • Zero Waste Global SA.

https://www.federalregister.gov/d/2023-25684

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

November 2, 2023: OFAC Issued General License 13G: “Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024”.

General License 13G: U.S. persons, or entities owned or controlled, directly or indirectly, by a U.S. person, are authorized to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations, certifications, or tax refunds to the extent such transactions are prohibited by Directive 4 under Executive Order 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation, provided such transactions are ordinarily incident and necessary to the day-to-day operations in the Russian Federation of such U.S. persons or entities, through 12:01 a.m. eastern standard time, January 31, 2024.

This General License 13G does not authorize: (1) Any debit to an account on the books of a U.S. financial institution of the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation; or (2) Any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR, unless separately authorized.

Effective November 2, 2023, General License No. 13F, dated August 10, 2023, is replaced and superseded in its entirety by this General License No. 13G

https://ofac.treasury.gov/media/932271/download?inline

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November 2, 2023: OFAC Issued General License 74: “Authorizing the Wind Down and Rejection of Transactions Involving East-West United Bank”.

General License 74: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of transactions involving East-West United Bank, or any entity in which East-West United Bank owns, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern standard time, January 31, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).

Except as provided in this General License 74, U.S. persons are authorized to reject, rather than block, and return to the originator or originating financial institution or their successor-in-interest, all transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the processing of funds involving East-West United Bank, or any entity in which East-West United Bank owns, directly or indirectly, a 50 percent or greater interest, as an originating, intermediary, or beneficiary financial institution, through 12:01 a.m. eastern standard time, January 31, 2024.

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 debit to an account on the books of a U.S. financial institution of the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation; or (3) Any transactions otherwise prohibited by the RuHSR, including transactions involving any person blocked pursuant to the RuHSR other than the blocked persons described in this General License 74, unless separately authorized.

https://ofac.treasury.gov/media/932256/download?inline

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November 2, 2023: OFAC Issued General License 75: “Authorizing Certain Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Certain Entities Blocked on November 2, 2023”.

General License 75: 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 the following blocked entities (“Covered Debt or Equity”) to a non-U.S. person are authorized through 12:01 a.m. eastern standard time, January 31, 2024: (1) Sistema Public Joint Stock Financial Corporation; (2) East-West United Bank; (3) Limited Liability Company Arctic LNG 2; or (4) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.

Except as provided in this general license, 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, November 2, 2023 are authorized through 12:01 a.m. eastern standard time, January 31, 2024.

Except as provided in this General License 75 , all transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the wind down of derivative contracts entered into prior to 4:00 p.m. eastern standard time, November 2, 2023 that (i) include a blocked person described in this general license as a counterparty or (ii) are linked to Covered Debt or Equity are authorized through 12:01 a.m. eastern standard time, January 31, 2024, provided that any payments to a blocked person are made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).

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 thisgeneral license.

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 this general license, unless separately authorized.

https://ofac.treasury.gov/media/932261/download?inline

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November 2, 2023: OFAC Issued General License 76: “Authorizing the Wind Down of Transactions Involving Certain Entities Blocked on November 2, 2023”.

General License 76: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of any transaction involving one or more of the following blocked entities (collectively, the “Blocked Entities”) are authorized through 12:01 a.m. eastern standard time, January 31, 2024, provided that any payment to a Blocked Entity is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR): (1) Sistema Public Joint Stock Financial Corporation; (2) Saint Petersburg Stock Exchange; (3) Limited Liability Company Arctic LNG 2; or (4) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.

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 Entities described in this general license, unless separately authorized.

https://ofac.treasury.gov/media/932266/download?inline

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November 3, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Ekaterina Zhdanova, a Russian national, for her role in laundering and moving funds using virtual currency on behalf of Russian elites. This action is consistent with the G7’s commitment to crack down on sanctions evasion and closing loopholes that allow the Russian state, its elites, proxies, and oligarchs to leverage virtual currency to offset the impact of international sanctions.

In response to Russia’s illegal invasion of Ukraine in February 2022, OFAC has imposed expansive economic sanctions on the Russian financial system. In March 2022, Ekaterina Zhdanova (Zhdanova) assisted a Russian client in obfuscating their source of wealth in order to transfer over $2.3 million into Western Europe through a fraudulently opened investment account and real estate purchases. Zhdanova’s services result in the provision of access to Western financial markets for Russian individuals that may otherwise be blocked due to U.S. and international prohibitions. This type of illicit financial activity can be used to evade the multilateral U.S. and international sanctions that impose costs on Russia for its unprovoked war and deny the access of sanctioned Russian individuals and entities to the international financial system.

Zhdanova has also provided services to individuals connected with the Russian Ryuk ransomware group. In 2021, Zhdanova laundered over $2.3 million of suspected victim payments on behalf of a Ryuk ransomware affiliate. Ryuk has been used to target thousands of victims worldwide, including in the United States, across a variety of sectors. In October 2022, U.S. law enforcement specifically identified Ryuk as an imminent and increasing cybercrime threat to hospitals and healthcare providers in the United States.

https://home.treasury.gov/news/press-releases/jy1874

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November 7, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 13 Sinaloa Cartel members—several of whom are fugitives—and four Sonora, Mexico-based entities. Responsible for a significant portion of the illicit fentanyl and other deadly drugs trafficked into the United States, the Sinaloa Cartel is one of the most powerful and pervasive drug trafficking organizations in the world. This action was coordinated closely with the Government of Mexico, including La Unidad de Inteligencia Financiera (UIF), Mexico’s Financial Intelligence Unit.

  • Juan Carlos Morgan Huerta
  • Jose Arnoldo Morgan Huerta
  • Jose Luis Morgan Huerta
  • Miguel Angel Morgan Huerta
  • Martin Morgan Huerta
  • Oscar Murillo Morgan
  • David Alonso Chavarin Preciado
  • Jesus Francisco Camacho Porchas
  • Oscar Enrique Moreno Orozco
  • Ramiro Martin Romero Wirichaga
  • Cristian Julian Meneses Ospina
  • Sergio Isaias Hernandez Mazon
  • Alvaro Ramos Acosta
  • Conceptos Gastronomicos de Sonora, S. de R.L. de C.V.
  • Morgan Golden Mining, S.A. de C.V.
  • Comercializadora Villba Stone, S.A. de C.V.
  • Exportadora del Campos Ramos Acosta, S. de R.L. de C.V.

https://home.treasury.gov/news/press-releases/jy1887

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OFAC Issued General License 76A: “Authorizing the Wind Down of Transactions Involving Certain Entities Blocked on November 2, 2023”.

November 8, 2023: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of any transaction involving one or more of the following blocked entities (collectively, the “Blocked Entities”) are authorized through 12:01 a.m. eastern standard time, January 31, 2024, provided that any payment to a Blocked Entity is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR): (1) Sistema Public Joint Stock Financial Corporation; (2) Public Joint Stock Company Saint Petersburg Exchange; (3) Limited Liability Company Arctic LNG 2; or (4) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.

This general license does not authorize 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; 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 any transactions otherwise prohibited by the RuHSR, including transactions involving any person blocked pursuant to the RuHSR other than the Blocked Entities described in this General License 76A, unless separately authorized.

Effective November 8, 2023, General License No. 76, dated November 2, 2023, has been replaced and superseded in its entirety by this General License No. 76A.

https://ofac.treasury.gov/media/932286/download?inline

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November 14, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed its third round of sanctions targeting Hamas-affiliated individuals and entities since the October 7 Hamas terrorist attacks on Israel. The action designates key Hamas officials and the mechanisms by which Iran provides support to Hamas and Palestinian Islamic Jihad (PIJ). The designations are coordinated with action by the U.K. and are aimed at protecting the international financial system from abuse by Hamas and their enablers.

  • Nasser Abu Sharif
  • Muhjat AlQuds Foundation
  • Jamil Yusuf Ahmad ‘Aliyan
  • Akram al-Ajouri
  • Nabil Chouman & Co
  • Nabil Khaled Halil Chouman
  • Khaled Chouman
  • Reda Ali Khamis
  • Mahmoud Khaled Zahhar
  • Mu’ad Ibrahim Muhammed Rashid al-Atili

https://ofac.treasury.gov/recent-actions/20231114_33

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November 14, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued the OFAC Compliance Communiqué: Guidance for the Provision of Humanitarian Assistance to the Palestinian People in response to questions from the NGO community and the general public on how to provide humanitarian assistance while complying with OFAC sanctions.

The U.S. Department of the Treasury remains committed to denying Hamas access to funds following its heinous terrorist attacks against the people of Israel, while also ensuring legitimate humanitarian aid can continue to flow to the Palestinian people in Gaza. The Office of Foreign Assets Control (OFAC) has continued to use sanctions to degrade and disrupt Hamas’s fundraising network and is working with partners and allies around the globe to combat terrorist financing. Groups such as Hamas raise funds through entities that present themselves outwardly as legitimate charities but are in fact fronts for Hamas’s illicit fundraising, often abusing the good will of donors. OFAC will continue using the tools and authorities at its disposal to sever Hamas’s illicit fundraising avenues.

OFAC is issuing this guidance to clarify that U.S. sanctions do not stand in the way of legitimate humanitarian assistance to the Palestinian people. Donors seeking to support the Palestinian people are encouraged to donate to trusted organizations.

https://ofac.treasury.gov/media/932311/download?inline

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November 15, 2023: In support of President Biden’s National Drug Control Strategy and in cooperation with the government of Costa Rica, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating a Costa Rican narcotics trafficker, known not only for the volume of drugs he moves but the violence with which he operates, who has played a significant role in Costa Rica’s recent transformation into a major narcotics transit hub.

According to the State Department’s 2023 International Narcotics Control Strategy Report, Costa Rica has a growing domestic drug consumption problem, as drugs warehoused in Costa Rica increasingly enter the local market and domestic criminal organizations gain influence with increased narcotics revenues. The national homicide rate rose from 11.2 per 100,000 inhabitants in 2021 to 12.6 per 100,000 inhabitants in 2022. The homicide rate in the province of Limon is 35.8 per 100,000 inhabitants. Despite these challenges, Costa Rica works closely with the United States to professionalize police, strengthen citizen security, and increase drug interdictions. However, resource limitations strain Costa Rican law enforcement services and pose significant challenges to future success. This action is the result of close collaboration with the U.S. Drug Enforcement Administration’s Costa Rica Country Office.

  • Gilbert Hernan de Los Angeles Bell Fernandez

https://ofac.treasury.gov/recent-actions/20231115

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OFAC Issued General License 77: “Authorizing Limited Safety and Environmental Transactions Involving Certain Persons or Vessels”.

November 16, 2023: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to one of the following activities involving the blocked persons or vessels described in this general license are authorized through 12:01 a.m. eastern standard time, February 14, 2024, provided that any payment to a blocked person must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations (RuHSR): (1) The safe docking and anchoring of any of the blocked vessels listed in this General License 77 (“blocked vessels”) in port; (2) The preservation of the health or safety of the crew of any of the blocked vessels; or (3) Emergency repairs of any of the blocked vessels or environmental mitigation or protection activities relating to any of the blocked vessels.

The authorizations in this General License 77 apply to the following blocked persons and vessels listed on the Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List and any entity in which any of the following persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest:

  • Kazan Shipping Incorporated (registered owner of KAZAN, IMO 9258002);
  • Progress Shipping Company Limited (registered owner of LIGOVSKY PROSPECT, IMO 9256066); or
  • Gallion Navigation Incorporated (registered owner of NS CENTURY, IMO 9306782).

This General License 77 does not authorize: The entry into any new commercial contracts involving the property or interests in property of any blocked persons, including the blocked entities and vessels described in this General License 77, except as otherwise authorized; The offloading of any cargo onboard any of the blocked vessels, including the offloading of crude oil or petroleum products of Russian Federation origin, except for the offloading of cargo that is ordinarily incident and necessary to address vessel emergencies authorized pursuant to this General License 77; Any transactions related to the sale of crude oil or petroleum products of Russian Federation origin; 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; 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 Any transactions otherwise prohibited by the RuHSR, including transactions involving the property or interests in property of any person blocked pursuant to the RuHSR, other than transactions involving the blocked persons or vessels in this General License 77, unless separately authorized.

https://ofac.treasury.gov/media/932336/download?inline

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OFAC Issued General License 2: “Authorizing the Wind Down of Transactions Involving Orka Holding AD”.

November 16, 2023: All transactions prohibited by the Western Balkans Stabilization Regulations (WBSR), 31 CFR part 588, that are ordinarily incident and necessary to the wind down of any transaction involving Orka Holding AD, or any entity in which Orka Holding AD owns, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern daylight time, March 15, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the WBSR.

This General License 2 does not authorize any transactions otherwise prohibited by the WBSR, including transactions involving any person blocked pursuant to the WBSR other than the blocked persons described in this general license, unless separately authorized.

https://ofac.treasury.gov/media/932326/download?inline

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OFAC Issued General License 3: “Authorizing Certain Transactions Related to Agricultural Commodities,

Medicine, Medical Devices, Replacement Parts and Components, Software Updates, or Medical Prevention, Diagnosis, or Treatment, or Clinical Trials Involving Orka Holding AD”.

November 16, 2023: All transactions prohibited by the Western Balkans Stabilization Regulations (WBSR), 31 CFR part 588, involving Orka Holding AD, or any entity in which Orka Holding AD owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest, related to the following are authorized: (1) the production, manufacturing, sale, transport, or provision of agricultural commodities, agricultural equipment, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices; (2) the prevention, diagnosis, or treatment of any disease or medical condition; or (3) the conducting of clinical trials or other medical research.

For the purposes of this General License 3, agricultural commodities, medicine, and medical devices are defined as follows:

  1. Agricultural commodities. Agricultural commodities are products that fall within the term “agricultural commodity” as defined in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602) and are intended for use as:
    1. Food for humans (including raw, processed, and packaged foods; live animals; vitamins and minerals; food additives or supplements; and bottled drinking water) or animals (including animal feeds);
    2. Seeds for food crops;
    3. Fertilizers or organic fertilizers; or
    4. Reproductive materials (such as live animals, fertilized eggs, embryos, and semen) for the production of food animals.
  2.  Medicine. Medicine is an item that falls within the definition of the term “drug” in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).
  3. Medical devices. A medical device is an item that falls within the definition of “device” in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).

This general license does not authorize any transactions otherwise prohibited by the WBSR, including transactions involving any person blocked pursuant to the WBSR other than the blocked persons described in this General License 3, unless separately authorized.

Note to General License No. 3. Nothing in this general license relieves any person from compliance with any other Federal laws or requirements of other Federal agencies.

https://ofac.treasury.gov/media/932331/download?inline

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November 16, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is imposing sanctions on three entities and identifying as blocked property three vessels that used Price Cap Coalition service providers while carrying Russian crude oil above the Coalition-agreed price cap. This action underscores Treasury’s commitment, alongside its international partners, to responsibly reducing oil revenues that the Russian government can use to bankroll its invasion of Ukraine.

The United States is part of an international coalition of countries (the Price Cap Coalition), including the G7, the European Union, and Australia, that have agreed to prohibit the import of crude oil and petroleum products of Russian Federation origin. These countries, home to many best-in-class financial and professional services, have also agreed to restrict a broad range of services related to the maritime transport of crude oil and petroleum products of Russian Federation origin—unless that oil is bought and sold at or below the specific price caps established by the Coalition or is authorized by a license. This policy is known as the “price cap.” The price cap is intended to maintain a reliable supply of crude oil and petroleum products to the global market while reducing the revenues the Russian Federation earns from oil after its own war of choice against Ukraine inflated global energy prices.

On October 12, 2023, the Price Cap Coalition published a Coalition Advisory for the Maritime Oil Industry and Related Sectors (“the Advisory”). The Advisory, which is directed at both government and private sector actors involved in the maritime trade of crude oil and refined petroleum products, provides recommendations concerning specific best practices and reflects our commitment to promoting responsible practices in the industry, preventing and disrupting sanctioned trade, and enhancing compliance with the price cap.

  • Kazan Shipping Incorporated
  • Progress Shipping Company Limited
  • Gallion Navigation Incorporated

https://home.treasury.gov/news/press-releases/jy1915

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November 16, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated eight individuals and six entities pursuant to Western Balkans-related Executive Order (E.O.) 14033 and Russia-related E.O. 14024.

Bosnia and Herzegovina

  • Savo Cvijetinovic
  • BN Inzinjering
  • Petar Djokic

Montenegro

  • Miodrag “Daka” Davidovic
  • Branislav “Brano” Micunovic

North Macedonia

  • Sergey Samsonenko
  • Irina Samsonenko
  • Ratka Kunoska Kamceva
  • Kamchev Konsalting Skopje DOOEL
  • Orka Fajnans Skopje DOOEL
  • Orka Holding AD
  • Sistina Lajf Kear Sentar Skopje DOOEL
  • Bet City International DOO Skopje

Serbia

  • Nenad Popovic
  • Asset Electro LLC
  • Asset Automation LLC
  • Mosen Esset Menedzhment LLC

Russia

  • Joint Stock Company All-Russian Scientific Research Design and Technological Institute of Relay Engineering with Experimental Production
  • VNIIR Promelektro LLC
  • ABS Electrotekhnika LLC
  • VNIIR Gidroelektroavtomatika JSC
  • JSC VNIIR Progress
  • VNIIR Transstroi LLC
  • JSC ABS ZEiM Automation
  • Dominion Tverskaya Yaroslavskaya LLC
  • Dominion Nikolski LLC

https://home.treasury.gov/news/press-releases/jy1916

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OFAC Issued General License 77: “Authorizing Certain Transactions Related to Agricultural Commodities, Medicine, Medical Devices, Replacement Parts and Components, Software Updates, or Medical Prevention, Diagnosis, or Treatment, or Clinical Trials Involving Orka Holding AD”.

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November 17, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating six individuals affiliated with the Iran-aligned militia group (IAMG) Kata’ib Hizballah (KH) based in Iraq. Trained, funded, and supported by Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), KH is behind a spate of recent attacks against the United States and partners in Iraq and Syria following the horrific attacks by Hamas against Israel. The U.S. Department of State is also designating Kata’ib Sayyid al-Shuhada (KSS) and KSS leader Hashim Finyan Rahim al-Saraji. KSS, another Iraq-based IAMG that receives support from the IRGC, has planned and been involved in attacks against U.S. personnel in Iraq and Syria.

  • Imad Naji al-Bahadli
  • Habib Hasan Mughamis Darraji
  • Ja’afar al-Husayni
  • Khalid Kadhim Jasim al-Skeni
  • Basim Mohammad Hasab al-Majidi
  • Mojtaba Jahandust

https://home.treasury.gov/news/press-releases/jy1921

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November 29, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned over 20 individuals and entities for their involvement in financial facilitation networks for the benefit of Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) and Iranian Armed Forces General Staff (AFGS), and the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF). Iran generates the equivalent of billions of dollars via commodity sales to fund its destabilizing regional activities and support of multiple regional proxy groups, including Hamas and Hizballah. MODAFL, the AFGS and the IRGC-QF utilize intricate networks of foreign-based front companies and brokers to enable these illicit commercial activities and exploit the international financial system.

Iran

  • Sepehr Energy Jahan Nama Pars Company
  • Majid A’zami
  • Elyas Niroomand Toomaj
  • Pishro Tejarat Sana Company
  • Seyyed Abdoljavad Alavi

Hong Kong

  • Puyuan Trade Co., Limited
  • HK Sihang Haochen Trading Limited

United Arab Emirates

  • Unique Performance General Trading L.L.C
  • OPG Global General Trading Co. L.L.C
  • JEP Petrochemical Trading L.L.C
  • Future Energy Trading L.L.C
  • Tetis Global FZE
  • Royal Shell Goods Wholesalers L.L.C
  • A Three Energy FZE
  • Transmart DMCC
  • Zabi Vahap
  • Adelina Kuliyeva
  • Mehboob Thachankandy Palikandy
  • Solise Energy

Singapore

  • MSE Overseas PTE. Ltd.
  • Sealink Overseas PTE. Ltd.

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November 30, 2023: In coordination with foreign partners, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned eight foreign-based Democratic People’s Republic of Korea’s (DPRK) agents that facilitate sanctions evasion, including revenue generation and missile-related technology procurement that support the DPRK’s weapons of mass destruction (WMD) programs. Additionally, OFAC sanctioned cyber espionage group Kimsuky for gathering intelligence to support the DPRK’s strategic objectives.

These actions are in response to the DPRK’s November 21 claimed military reconnaissance satellite launch and demonstrates the multilateral efforts of the United States and foreign partners to hinder the DPRK’s ability to generate revenue, procure materiel, and gather intelligence that advances the development of its WMD program and the unlawful export of arms and related materiel from the DPRK.

  • Kang Kyong Il
  • Ri Sung Il
  • Kang Phyong Guk
  • So Myong
  • Choe Un Hyok
  • Jang Myong Chol
  • Choe Song Chol
  • Im Song Sun
  • Kimsuky

https://home.treasury.gov/news/press-releases/jy1938

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November 30, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned three Mexican individuals and 13 Mexican companies.  These individuals and companies are linked, directly or indirectly, to timeshare fraud led by the Cartel de Jalisco Nueva Generacion (CJNG). CJNG, a violent Mexico-based organization, 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, including its Financial Intelligence Unit, as well as U.S. Government partners, including the Federal Bureau of Investigation (FBI), and the Drug Enforcement Administration.

  • Teresa De Jesus Alvarado Rubio
  • Manuel Alejandro Foubert Cadena
  • Gabriela Del Villar Contreras
  • Grupo Empresarial Epta, S.A. de C.V.
  • Assis Realty And Vacation Club, S.A. de C.V.
  • Axis Sale & Maintenance Buildings, S.A. de C.V.
  • Comercializadora de Servicios Turisticos de Vallarta, S.A. de C.V.
  • Condos & Vacations Buildings Sale & Maintenance, S.A. de C.V.
  • Grupo Minera Barro Pacifico, S.A.P.I. de C.V.
  • International Realty & Maintenance, S.A. de C.V.
  • Mega Comercial Ferrelectrica, S.A. de C.V.
  • Real Estates & Holiday Cities, S.A. de C.V.
  • Terra Minas e Inversiones del Pacifico, S.A.P.I. de C.V.
  • Banlu Comercializadora, S.A. de C.V.
  • Crowlands, S.A. de C.V.
  • Skairu, S.A. de C.V.

https://home.treasury.gov/news/press-releases/jy1936

NOVEMBER 2023 EXPORT CONTROL REGULATIONS UPDATES Read More »

OCTOBER 2023 EXPORT CONTROL REGULATIONS UPDATES

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

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

REGULATORY UPDATES

The President

President Biden Continues National Emergency With Respect To Syria.

October 12, 2023: 88 FR 71271:  On October 14, 2019, by Executive Order 13894, the President declared a national emergency pursuant to the International Emergency Economic Powers Act to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the situation in and in relation to Syria.

The situation in and in relation to Syria, and in particular the actions by the Government of Turkey to conduct a military offensive into northeast Syria, undermines the campaign to defeat the Islamic State of Iraq and Syria, or ISIS, endangers civilians, and further threatens to undermine the peace, security, and stability in the region, and continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.  For this reason, the President determined that the national emergency declared in Executive Order 13894 of October 14, 2019, must continue in effect beyond October 14, 2023.  Therefore, in accordance with section 202(d) of the National Emergencies Act, the President continued for 1 year the national emergency declared in Executive Order 13894 with respect to the situation in and in relation to Syria.

https://www.federalregister.gov/d/2023-22862

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

DDTC Name and Address Changes Posted To Website

October 2 through 30, 2023: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at    

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

  • Change in name and address from General Electric International Operations Company (Abu Dhabi), 17th Floor, WTC The Office Tower, Hamdan Street, Box No. 34637, Abu Dhabi, United Arab Emirates to GE Aviation Systems North America LLC – Abu Dhabi at Al Hisn, East 6, C5, Building Amna Ahmed Mohamed Onwani, 621, Zayet The First St., Al Hisn, Abu Dhabi 20035, United Arab Emirates, and all locations in the United Arab Emirates due to corporate reorganization.
  • Change in name from NGK Spark Plugs Co., Ltd. to Niterra Co., Ltd. due to corporate reorganization.
  • Change in name and address from General Electric International, Inc. (Argentina), Enrique Butty 275, 6th Floor, Office 103C, Ciudad Autonoma de Buenos Aires, C1001AFA, Argentina to GE Aviation Systems North America LLC, Sucursal Argentina at Maipu 1300, Piso 9, Ciudad Autonoma de Buenos Aires, Argentina, and all locations in Argentina due to corporate reorganization.
  • Change in name and address from General Electric International, Inc. DLF Cyber City, Sector 25A DLF Phase III, Building No 7 A, Gurgaon 122002, India and AIFCS Bldg 1, Rafi Marg, New Delhi, India to GE India Industrial Pvt Ltd. A-18 First Floor, Okhla Industrial Area, Phase II, New Delhi 110020, India, and all locations in India due to corporate reorganization.
  • Change in name and address from General Electric International, Inc. 6F, No. 8, Minsheng E. Rd., Section 3, NanShan Minshen Bldg, Taipei, Taiwan and 7F, No. 8, Minsheng E. Rd., Taipei, Taiwan to GE Aviation Systems North America LLC – Taiwan Branch 15F-2, No. 168 Section 3, Nanjing E. Rd., Taipei City, 10488 Taiwan, and all locations in Taiwan due to corporate reorganization.
  • Change in name from Netherlands Ministry of Defence’s Defence Materiel Organisation to Materiel and IT Command, ‘Commando Materieel en IT.’ due to government reorganization.
  • Change in name from Daewoo Shipbuilding and Marine Engineering Co., Ltd. to Hanwha Ocean Co., Ltd. due to acquisition.
  • Change in name from LR Nederland B.V. to LRQA Nederland B.V. due to corporate rebranding.
  • Change in name from General Electric International, Inc. (Chile) to Industrial C&S Chile SpA. due to corporate reorganization.
  • Change in name from Sogeti Deutschland GmbH to Capgemini Engineering Deutschland S.A.S. & Co. KG. due to corporate reorganization.
  • Change in name and address from General Electric International, Inc., Carrera 7 #166-50, Oficina 02-109 B, Bogota D.C., Colombia to Aviation Systems North America LLC, Sucursal Colombia, Carrera 7 #71-21, Torre B, Oficina 602, Bogota D.C., Colombia due to corporate reorganization.
  • Change in name from Aerojet Rocketdyne Holdings, Inc. to L3Harris Technologies, Inc. due to merger.
  • Change in name from Quantel-USA, Inc. to Lumibird Photonics USA, Inc. due to acquisition by Lumibird.
  • Change in name and address from General Electric International, Inc., 5th Floor, Tatweer Tower, King Fahad Road, Riyadh 11433, Saudi Arabia to Branch of General Electric Aviation Systems North America LLC, Building Number 7546, Qurtubah District, Unit 1110, Riyadh 13244, Saudi Arabia due to corporate reorganization.
  • Change in names from STS Aviation Services International Limited, NAAS Aviation Services International Limited, and Triumph Aviation Services International Limited to STS Aviation Services Ireland Limited due to merger.
  • Change in name from Pinnacles Solutions, Inc. to Pinnacles Solutions, LLC due to acquisition by NANA Regional Corporation, Inc.
  • Change in name and address from General Electric International, Inc., Calle Osiris, Num. 13, Planta 1, Edificio Osiris, Madrid 28037, Spain to GE Aviation Systems North America LLC, Sucursal en Espana, Spaces Rio, Calle de Manzanares, 4, Madrid 28005, Spain due to corporate reorganization.
  • Change in name and address from General Electric International, Inc, C Ring Road, Najma Intersection, Doha, Qatar to GE Aviation Systems North America QSTP-B, Qatar Science & Technology Park-B, Al Gharafa Street, Al Rayyan, Education City, Doha, Qatar due to corporate reorganization.

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DDTC Final Commodity Jurisdiction Determinations Posted to Website

October 11, 2022 through May 25, 2023: On October 12, 2023 the Directorate of Defense Trade Controls (DDTC) posted the following Final CJ Determinations for CJ’s adjudicated between October 11, 2022 and May 25, 2023, on its website at:

https://www.pmddtc.state.gov/ddtc_public?id=ddtc_kb_article_page&sys_id=6ea6afdcdbc36300529d368d7c96194b

Readers may find these determinations helpful when performing self-classification work.

Model Name Description Final Determination Date

 

Final Determination Manufacturer
Gerber files for a printed circuit board (part number 33244-20 PCB) used for proof-of-concept during the development of a Variable Emissivity Panel for Identification of Friend or Foe (VEPIFF) Gerber files describing a flexible printed circuit board 2023-05-25 USML Category XI(d) Intellisense Systems, Inc
Talyn Platform, Model & Version 1 Unmanned aerial electric vertical takeoff and landing (eVTOL) cargo transportation platform that can operate without airport infrastructure 2023-05-25 Seek CCATS Talyn Air, Inc
Quad Element P I N Photodiode, Part Number OG-QPPP-7000-25 An InGaAs-based PIN photodiode 2023-05-25 USML Category XII(e)(1) Optogration, Inc
SAFEScreen Psychophys-iological Touch Screen Stress Analyzer (PTSSA)TM An investigative tool to determine deceptiveness or inappropriate (unlawful) behavior patterns of individuals being tested 2023-05-25 EAR99 THORAD LLC
2x Extender, See-spot Device for ECOSI, Part Number 14245-3082 Provides magnification and greater daylight operation capabilities to the ECOSI (a device used to see the infrared spot on targets produced by coded target markers and laser target designators) 2023-05-25 CCL ECCN 7A611.x Optics 1, Inc
Griffin ESAF Det Socket Kapton Disc, part number 332400-C; Initiator Kapton Sleeve, part number 332629-002 B; and Initiator Polyimide Wrap, part number 332845-A Electrically insulating pieces 2023-05-25 EAR99 Excelitas Technologies Corp
NW-230 Engine, Model and Part Number: NW-230 A two-stroke reciprocating engine system planned for use in unmanned systems including aerial vehicles 2023-05-25 EAR99 Northwest ULD, Inc
Written training material or PowerPoint presentations for de-escalation training, post traumatic stress disorder counselor training, and humanitarian aid Training and humanitarian assistance including food, water, and clothing 2023-05-25 EAR99 National De-escalation Training Center
Training on the Operation and Use of the Mi-17 Helicopter Training of foreign personnel on the operation and use of the utility transport model of the Mi-17 helicopter in an Mi-17 simulator 2023-05-25 USML Category VIII(i) Concord XXI USA, LLC
Microneedle Sensor Patch for Continuous Interstitial Fluid Cortisol Measurement A skin-worn continuous cortisol monitor device that can detect circulating levels of cortisol to assess cognitive performance and fatigue 2023-05-25 EAR99 Biolinq Incorporated
Mask Light Amplified Microphone, Part Number: N1001682-00 Hands-free supplemental cockpit lighting for fixed wing aircraft that use electret microphones 2023-05-25 CCL ECCN 9A610.x Gentex Corporation
Rapid Attack Payload Targeted Release (RAPTR) System, consisting of 1) RAPTR Control Module, Part Number 1C0512; 2) RAPTR Energetic Module, Part Number D12476; 3) RAPTR Handheld, Part Number EB0721-600; 4) RAPTR Adapter Plate, Part Number F22104 Weaponization system for unmanned air and vehicle platforms, and its constituent elements 2023-05-23 RAPTR System: USML Category IV(a)(6) 1) Control Module: USML Category IV(c) 2) Energetic Module: USML Category V(a)(15) 3) Handheld: Category USML Category IV(c) 4) Adapter Plate: USML Category IV(c) Ensign-Bickford Aerospace & Defense Company
Optical Transceiver, D-Lightsys, consisting of part numbers ACSM2410IP201 and ACSM2410IP202, firmware version 1.0.901-629-4494 Electro-optical transceiver consisting of a pair of transmitter and receiver modules 2023-05-18 USML Category VIII(h)(1) Radiall America, Inc
LED 360-degree Situational Awareness Kit with Infrared, Model 07630, NSN 6220-01-629-4494 360-degree situational awareness infrared external lighting kit 2023-05-18 CCL ECCN 0A606.y.12 Truck-Lite Co., LLC
100G Ethernet Network Switch with RESCUE module, Model and Version Number: SX-154-4110, Part Number: SX1544110 An electronic component used to provide encrypted bridging between different security domains 2023-05-18 USML Category XIII(b)(4) Spectranetix, Inc
Avcon King Air Hardpoints, Model KA HARDPOINT Kit consisting of Internal mounts and racks that, once installed, allows for the attachment of external stores on the wings of certain models of the King Air aircraft 2023-05-15 EAR99 Butler National Corporation
IXD Tera, Model V1.3 (1 Gigabit) (part number IXD-MC) and Model 2.0 (10 Gigabit) (part number IXD-HC) Hardware and operating system software in a custom configuration to provide uni-directional and bidirectional transfers between two networks 2023-05-15 Seek CCATS Owl Cyber Defense Solutions, LLC
XDE Radium, part numbers XDE‐RAD‐OWT‐OI‐LOQ v1.4 (optical) and XDE‐RAD‐OWT‐DI‐LOQ (digital) Security device for computers and networks 2023-05-15 Seek CCATS Owl Cyber Defense Solutions, LLC
Aeternus and LLUL-21 3D Printed Night Vision Housings 3D printed night vision housings designed for handheld or helmet-mounted devices 2023-04-13 EAR99 Low Light Innovations LLC
Joint Chemical Agent Detector – Solid Liquid Adapter (JCAD-SLA) Kit, Part Number: 5-15-35000 A chemical particulates kit that gives operators the ability to identify trace amounts of solid and liquid residues, including explosives, narcotics, pharmaceuticals, and fourth generation agents 2023-04-13 CCL ECCN 1A607.j Smiths Detection US, LLC
Joint Chemical Agent Detector – Solid Liquid Adapter (JCAD-SLA) Kit, Part Number: 5-15-35000 A chemical particulates kit that gives operators the ability to identify trace amounts of solid and liquid residues, including explosives, narcotics, pharmaceuticals, and fourth generation agents 2023-04-13 CCL ECCN 1A607.j Smiths Detection US, LLC
Holographic Enabled Display System, Version 3.0 (HEDS3), and Augmented Reality Display System (ARDS) Holographic display systems that overlay information received from sensors on what the user is viewing 2023-04-13 EAR99 Creative Microsystems Corporation
GC Patrol Shield Model 3.1 A lightweight shield that exceeds the National Institute of Justice (NIJ) NIJ 0108.01 Level III Standard 2023-03-22 USML Category XIII(e)(5) Graphene Composites Usa, Inc
LumY, Model 2302 V2, Part Number 12002 Through-wall radar sensor capable of 2 dimensional detection 2023-03-22 USML Category XI(a)(3)(xvi) Lumineye Inc
Foresight Advisory Services, Model Number: LNGVWS-FO01 Part Number: 001, and Foresight Facilitation Training, Model Number: LNGVWS-FA01 Part Number: 001 Foresight advisory services on long-range thinking and strategic planning using futures literacy, futures studies, and foresight, and training in facilitation for foresight, to empower groups in their search of insights when doing foresight exercises 2023-03-17 EAR99 Longviews S.R.L.
Mode-locked Laser, Model MLO-100, Part Numbers MLO-100-100 and MLO-100-200 and Mode-Lockable Fiber Laser Oscillator, Model FO-100, Part Numbers FO-100-100 and FO-100-200 A laser and a mode-lockable fiber laser oscillator, which is a component of the laser 2023-03-14 EAR99 Vescent Photonics LLC
Back Driven Recovery Assist, Secure and Traverse System (BDRAST) Control Module Part Number: 0711617-001 An integrated hydraulic control module, designed to control the hydraulics in a helicopter RAST system 2023-03-14 USML Category VIII(h)(5) Arkwin Industries, Inc
Fuel System Preservation Cart, Model & Part Number: S-277LM Fuel filtration cart for a military aircraft 2023-03-14 CCL ECCN 9B610.a Maney Aircraft, Inc
Fuselage Section of an A-4N Skyhawk Aircraft, Serial Number 14483 A-4N Skyhawk fuselage that does not include the wings, tail, engine, sensors, avionics, communications, or navigation systems 2023-03-14 CCL ECCN 9A610.x Top Aces Corp
Advanced Technology Search Tool; Crossover Scenario Modelling Tool; Capability Spider Chart; and Dynamic Technology Database Software and digital tools for assessing technology competitiveness and identifying critical areas of investment 2023-03-14 EAR99 TechNext, Inc
tM 35, Part Number: 72020 A thermal imaging device that can be attached to a rifle scope and can also be used as a stand-alone monocular 2023-02-22 USML Category XII(c)(2)(i) Swarovski Optik North America
2001 AMGN, Model M1043A2, VIN: 190440 Vehicle, model M1043A2, VIN 190440 2023-02-22 USML Category VII(b) Dakap s.r.o.
Chilled Water Expansion Tank, Part Number: 142-232ITAR Expansion Tank for a naval warship 2023-02-06 CCL ECCN 8A609.x Samuel Pressure Vessel Group Inc
VXE30 Unmanned Aerial System, Part Number: 107-102560 Vertical Take Off and Landing (VTOL) small Unmanned Aircraft System (UAS) designed for Intelligence, Surveillance, and Reconnaissance (ISR) 2023-02-06 Seek CCATS Edge Autonomy Holdings, LLC
Enhanced Waterside Security Barrier (EWSB), Version 1 & Version 2, Part Numbers: 3114M-001 & 3144M-00 A floating barrier system designed to protect ships and waterfront assets from waterside threats 2023-01-31 Seek CCATS Oceanetics
DCON Mitt, Model DCON-MITT, Part Number: CW-MFMT-CT10-01MT Absorbent microfiber mitt used to remove contaminants from surfaces 2023-01-31 EAR99 Tradeways, Ltd
Advanced Tactics Courses Close Air Support (CAS) and Intelligence, Surveillance, and Reconnaissance (ISR) courses 2023-01-20 USML Category IX(e)(3) The Vidar Group, LLC
3D Hyperspectral Imaging, Model: Visualizer 3.1, Update 3.1 A radiation-imaging algorithm used to estimate the energy, and distribution in space, of radiation sources 2023-01-12 Seek CCATS H3D, Inc
FuzeX, Model and Version Number: FuzeX An inert system that acts as a safe classroom alternative to aid in the training and education of Explosive Ordnance Disposal (EOD) personnel in Render Safe Procedures (RSPs) 2023-01-12 CCL ECCN 0A614.a Explotrain, LLC
MAGCOM Version 1, Part Number 01000064 A wireless transmission system that converts an input signal to magnetic waves for both transmission and reception of the received magnetic waves, which are then converted to an output signal 2023-01-11 USML Category XII(e)(8) ZRF, LLC
Mediator Fluid A solution of one or more ferrocene derivatives, lithium chloride (LiCl), and water, used as a liquid desiccant to absorb moisture in certain applications 2023-01-11 USML Category V(f)(4)(xv) Palo Alto Research Center (PARC)
Multi Weapon Aiming Device, Model and Version: MWAD Version 1, Part Number: MB-MWAD A ballistic computer that digitally displays range and azimuth for indirect fire weapon systems 2023-01-11 USML Category XII(c)(2)(iii) MATBOCK, LLC
LX32 A component for a PIN-diode linear attenuator 2022-12-30 USML Category XII(e)(1) Teledyne Technologies Incorporated
“Bread Box” Small Explosive Protective Transport Bag Protective bag for transporting small explosives and energetics 2022-12-30 EAR99 Hazard Protection Systems, Inc
Multicoupler Frame, Part Number SP-4326-1 A frame that holds up to four one-to-four multicouplers and allows radiofrequency signals to be distributed to multiple receiving devices 2022-12-30 Seek CCATS Silver Palm Technologies, LLC
Helios, Versions: 1.0-1.2 Cybersecurity platforms designed to mitigate against memory corruption exploits 2022-12-30 Seek CCATS Idaho Scientific, LLC
Max-Viz 1400 Enhanced Vision System Cameras; P/Ns 756500103, 756500104, 756500105, 756500106, 756500107, and 756500108 Aircraft camera designed to enhance situational awareness during takeoff and landing 2022-12-30 CCL ECCN 6A003.b.4.b Astronics PECO, Inc
FLIGHTLAB AH-64E Flight Dynamics Development Model, Version FDM-AH-64E-A AH-64E simulation software used to perform variable fidelity modeling and engineering analysis 2022-12-30 USML Category VIII(i) Advanced Rotorcraft Technology, Inc
Polyalphaolefin Resistant Shielded 760 Double End Z Shape Right Angle Cable Assy, Part Number: 178-6784-001 A shielded cable assembly that is incorporated into a multi-function radar that is used in an air defense system 2022-12-30 USML Category XII(e)(1) Teledyne Technologies Incorporated
Advanced Pilot Training for the Mi-17 Helicopter Advanced pilot training on foreign origin Mi-17 helicopters 2022-12-30 USML Category VIII(i) Concord XXI USA, LLC
Remote Initiation System Wireless detonation system for energetic charges 2022-12-30 Seek CCATS Ensign-Bickford Aerospace & Defense Company
Ultra 8000 Series Multi-Sensor Airborne Gimbals, Models 8000, 8500, 8500 XR, and 8500 FW 9” stabilized gimbal assemblies incorporating an InSb midwave-infrared (MWIR) focal plane array (FPA). The different sub-models have different tracking and zoom capabilities 2022-12-30 CCL ECCN 6A003.b.4.a Teledyne Technologies Incorporated
FuseBlox, Part Number 001AZ-103 A self-aligning docking and connection device that can dock without requiring relative velocity between the docking spacecraft 2022-12-30 CCL ECCN 9A515.x SpaceWorks Enterprises, Inc
Hearing Protection Helmet (HPH) System, Models HPH-Basic, HPHComm-Boom, HPH-Comm-Cup, and HPH-Comm-SPP Helmet providing hearing protection, head protection, and communication capabilities 2022-12-30 Seek CCATS Creare LLC
Night Vision Goggle (NVG) Flight Training to Foreign Military Personnel Night Vision Goggle (NVG) Flight Training to Foreign Military Personnel 2022-12-30 USML Category XII(f) Concord XXI USA, LLC
Multi-Function Stationary Infantry Target (MF-SIT) lifter with LOMAH, Model and Part Number MFSIT-155 and Stationary Armor Target (SAT) with LOMAH, Model and Part Number SAT-AA25 Stationary ballistic targets upgraded with a location of miss and hit (LOMAH) electronic device that indicates performance accuracy 2022-12-30 USML Category IX(a)(1)(ii) InVeris Training Solutions, Inc
Cuvier Deep Hybrid Autonomous Underwater Vehicle, Model Cuvier Deep; and Cuvier Deep Hybrid Autonomous Underwater Vehicle – Future Configuration Autonomous Underwater Vehicles (UAVs) 2022-12-21 CCL ECCN 8A001.c 3D at Depth, Inc
Inlet Shell, Outlet Shell, and Diaphragm (Part Numbers M0 101793, A2 101792, and M0 101663) for Diaphragm Tank Machined tank shell of aluminum, machined tank shell of aluminum with helicoil inserts, and formed diaphragm of Viton-F 2022-12-21 Seek CCATS Benchmark Space Systems, Inc
Metallic Hose Assemblies, Part Numbers AE1002867H and AE100120H v.A Metallic hose assemblies, pneumatic 2022-12-21 USML Category XX(c) Danfoss Power Solutions II, LLC
Procurement Specification – Cathelco Marine Growth Prevention System (MGPS), Model and Version Number: Specification PS-256-01 Technical information created for the purpose of qualifying equipment proposed for an ITAR vessel 2022-12-13 USML Category VI(g) EVAC North America Inc
Advanced Architecture Phase, Amplitude and Time Simulator (A2PATS) Test environment for electronic subsystems of various platforms 2022-11-25 USML Category XI(a)(11) Textron, Inc
Ball Screw Assembly, part numbers 2417 and 2418 (sub-supplier part numbers TS05957-0500-02 and TS05957-0400-02) Screw spindle shaft and a nut packaged as an assembly with recirculating balls 2022-11-22 Seek CCATS Learjet Inc
Ball screw assembly for a missile flight control surface Ball Screw Assembly 2022-11-22 CCL ECCN 9A604.x Learjet Inc
Glass Preform, Part Number: R-9869 Glass preform for a naval gun round 2022-11-22 EAR99 Electro-Glass Products, Inc
Overvoltage Spark Gap, Part Number OGP-44R-21 Rugged ceramic-metal Krypton-filled switch used in a crowbar circuit 2022-11-09 USML Category XII(e)(1) Excelitas Technologies Corp
Thermal Module, Model No. ODI 384, version 1.0, Part No. ODI-MOD384 A 384×288 focal plane array thermal sensor linked to a control board and to a 1280×1024 micro-LED display, intended for OEMs to build into their hand-held or riflescope enclosure 2022-11-09 USML Category XII(e)(4) Outcome Driven Innovation Inc
Common Control Module (CCM), Part Number A0033 System that augments a UAV flight control system 2022-11-09 USML Category VIII(h)(17) The SURVICE Engineering Company
Bid Information for Ocean Research Vessel No. NCPOR/VOM-14/1/2022 Information associated with a response to a Tender Notice issued by India’s National Centre for Polar & Ocean Research (NCPOR) for a new Ocean Research Vessel 2022-11-02 Seek CCATS TAI Engineers LLC
Container MK 825 MOD 0, Model DL8410944, Part Number: 8410944 Shipping and storage container for a missile 2022-11-02 USML Category IV(c) B&P Manufacturing
Project Hermes Radar An airborne detect and avoid radar for unmanned aerial vehicles (UAVs) operating in the 15.4-16.6 GHz range 2022-11-02 CCL ECCN 6A008.e Echodyne Corp
Ruggedized Drone Mitigation System, Model Number DD-SP360 and Ruggedized Handheld Drone Mitigation Unit, Model Number HH-SP1 Ruggedized drone mitigation systems using a dual-band, dual-antenna system that provides 360-degree coverage for a range up to five kilometers 2022-11-02 USML Category XI(a)(4)(iii) Vigilant Drone Defense Inc
C137 Ammunition Container, Part Number: 9804981 Container used for the storage and transportation of a rocket 2022-11-02 USML Category IV(c) Nammo Defense Systems Inc
Information associated with the design of an Ocean Research Vessel Information associated with a proposal for the design of the NOAA Class B Ocean Research Vessel 2022-11-02 Seek CCATS TAI Engineers LLC
Hi-Q Antennae, Models: Hi-Q-4-OTM, Hi-Q-4.5-OTM, Hi-Q-5-OTM, Hi-Q-6-OTM, Hi-Q-OTM-HVY, and Hi-Q-MRZR High frequency tunable antennnas that resonate and receive radio frequency signals in the HF 1.8 Mhz to 30 Mhz spectrum 2022-10-31 CCL ECCN 3A611.x Viking Exports LLC
Ultra 6000 A medium-wave infrared (MWIR) thermal imaging system for commercial airborne operations 2022-10-31 CCL ECCN 6A003.b.4.a Teledyne Technologies Incorporated
(1) Sea Scan Ranger, (2) Ranger 750, and (3) Ranger 1500 Synthetic Aperture Sonars (SAS), without real-time processing, designed for Autonomous Underwater Vehicles (AUVs) 2022-10-31 CCL ECCN 6A991: (1) and (2); Seek CCATS: (3) Atlas North America, LLC
Odyssey International Autonomous navigation and hazard avoidance software for unmanned maritime and ground platforms 2022-10-31 USML Category VI(g) Huntington Ingalls Industries, Inc
GSM Geo-Location Cellphone geolocation software 2022-10-28 Seek CCATS Defentek Inc
Nomex False Deck Panel, Part Numbers 100009, 100156, 100164, 221910, 221911, 221912, and SM3252 False deck panel for use inside navy vessels. The panel operates as a floor for the sailors to walk on 2022-10-28 CCL ECCN 8A609.x Plascore, Inc
T Series Gamma Detector Module, Model T410 Modules that detect gamma radiation from a standoff distance 2022-10-11 Seek CCATS H3D, Inc

https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_kb_article_page&sys_id=6ea6afdcdbc36300529d368d7c96194b

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Department of Defense

DSCA Notifies Congress of Potential FMS Sale To Oman

October 3, 2023: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Oman of TOW 2B Radio Frequency Missiles (BGM-71F-7-RF) and Support and related equipment for an estimated cost of $70 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale, which will support the foreign policy and national security of the United States by helping to improve the security of Oman, a friendly country that continues to be an important force for political stability and economic progress in the Middle East. Further, the proposed sale will improve the Royal Army of Oman’s capability to meet current and future threats by enhancing the strength of its homeland defense. Oman will have no difficulty absorbing this equipment and services into its armed forces.

https://www.dsca.mil/press-media/major-arms-sales/oman-tow-2b-radio-frequency-missiles-bgm-71f-7-rf-and-support

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DSCA Notifies Congress of Potential FMS Sale To Spain

October 4, 2023 – The State Department has made a determination approving a possible Foreign Military Sale to the Government of Spain of PATRIOT Configuration-3+ Modernized Fire Units and related equipment for an estimated cost of $2.8 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale, which will support the foreign policy and national security of the United States by improving the security of a NATO ally which is an important force for political stability and economic progress in Europe. Further, the proposed sale of the PATRIOT missile system will improve Spain’s missile defense capability, increase the defensive capabilities of its military, and support its goal of improving national and territorial defense and interoperability with U.S. and NATO forces. Spain will use the PATRIOT to defend its territorial integrity and for regional stability. Spain will have no difficulty absorbing this equipment into its armed forces.

https://www.dsca.mil/press-media/major-arms-sales/spain-patriot-configuration-3-modernized-fire-units

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DSCA Notifies Congress of Potential FMS Sale To Finland

October 23, 2023 – The State Department has made a determination approving a possible Foreign Military Sale to the Government of Finland of Advanced Anti-Radiation Guided Missiles-Extended Range (AARGM-ER) and related equipment for an estimated cost of $500 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale, which support the foreign policy and national security of the United States by improving the security of a NATO Ally that is an important force for political stability and economic progress in Europe. Further, the proposed sale will improve Finland’s capability to meet current and future threats by strengthening its self-defense capabilities and ensuring interoperability with United States and other allied forces. Finland will have no difficulty absorbing this equipment into its armed forces.

https://www.dsca.mil/press-media/major-arms-sales/finland-advanced-anti-radiation-guided-missiles-extended-range-aargm

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DSCA Notifies Congress of Potential FMS Sale To Lithuania

October 23, 2023 – The State Department has made a determination approving a possible Foreign Military Sale to the Government of Lithuania of AIM-120C-8 Advanced Medium-Range Air-to-Air Missiles (AMRAAM) and related equipment for an estimated cost of $100 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale, which support the foreign policy and national security of the United States by helping to improve the security of a NATO Ally that is an important force for ensuring peace and stability in Europe. Further, the proposed sale will be for use with the National Advanced Surface-to-Air Missile System (NASAMS) and will improve Lithuania’s capability to conduct self-defense and regional security missions while enhancing interoperability with the U.S. and other NATO members. Lithuania will have no difficulty absorbing these articles and services into its armed forces.

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

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DSCA Notifies Congress of Potential FMS Sale To The United Kingdom

October 23, 2023 – The State Department has made a determination approving a possible Foreign Military Sale to the Government of the United Kingdom of Joint Air-to-Ground Missiles (JAGM) for an estimated cost of $957.4 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale, which support the foreign policy goals and national security objectives of the United States by improving the security of a NATO Ally that is a force for political stability and economic progress in Europe. Further, the proposed sale will improve the United Kingdom’s capability to meet current and future threats. The United Kingdom will use the enhanced capability to strengthen its homeland defense and deter regional threats. The United Kingdom will have no difficulty absorbing this equipment and services into its armed forces.

https://www.dsca.mil/press-media/major-arms-sales/united-kingdom-joint-air-ground-missiles-jagm

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DSCA Notifies Congress of Potential FMS Sale To Japan

October 24, 2023 – The State Department has made a determination approving a possible Foreign Military Sale to the Government of Japan of Rolling Airframe Missiles (RAM) Block 2B Tactical Missiles and related equipment for an estimated cost of $74.6 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale, which support the foreign policy goals and national security objectives of the United States by improving the security of a major ally that is a force for political stability and economic progress in the Indo-Pacific region. Further, the proposed sale will improve Japan’s capability to meet current and future threats by providing significantly enhanced self-defense for surface units defending/transiting/patrolling critical air and sea lines of communication and will not alter the basic military balance in the region.

https://www.dsca.mil/press-media/major-arms-sales/japan-rolling-airframe-missiles-ram-block-2b-tactical-missiles

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DSCA Notifies Congress of Potential FMS Sale To Latvia

October 24, 2023 – The State Department has made a determination approving a possible Foreign Military Sale to the Government of Latvia of M142 High Mobility Artillery Rocket Systems and related equipment for an estimated cost of $220 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale, which will support the foreign policy goals and national security objectives of the United States by improving the security of a NATO Ally that is an important force for political stability and economic progress in Europe. Further, the proposed sale will improve Latvia’s capability to meet current and future threats and will enhance its interoperability with U.S. and other allied forces. Latvia will have no difficulty absorbing this equipment into its armed forces.

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

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

Commerce Issued Rule to Strengthen National Security Partnership to Secure Semiconductor Supply Chains with Republic of Korea

October 13, 2023: The Commerce Department’s Bureau of Industry and Security (BIS) issued a rule updating the general authorizations for Samsung and SK hynix— companies headquartered in the Republic of Korea (RoK) – for their semiconductor fabrication facilities in the Peoples Republic of China (PRC). Samsung’s and SK hynix’s PRC facilities are Validated End-Users (VEUs). VEUs can apply for, and after national security review and approval by the U.S. government, obtain a general authorization to acquire certain items rather than seeking multiple individual licenses. The updated rule updates the items that may be exported to these companies under the VEU authorization.

The updated rule allows these companies to continue their operations in the PRC. The VEU authorizations announced in the updated rule reflect close consultations between the United States and ROK through various channels, including the Korea-U.S. Supply Chain and Commercial Dialogue (SCCD) and the SCCD Working Group on Export Controls announced in November 2022.

https://www.bis.doc.gov/index.php/component/docman/?task=doc_download&gid=3351

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BIS Announces Implementation of 2022 Wassenaar Arrangement Decisions

October 17, 2023: 88 FR 71932: The Bureau of Industry and Security (BIS) maintains, as part of its Export Administration Regulations (EAR), the Commerce Control List (CCL), which identifies certain items subject to Department of Commerce jurisdiction. During the December 2022 Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (WA) Plenary meeting, Participating States of the WA (Participating States) made certain decisions affecting the WA dual-use and munitions control lists, which BIS is now implementing via amendments to the CCL. BIS seeks comments on restricting STA eligibility for countries in EAR Country Group A:5 of certain technology for the development of supersonic aero gas turbine engine components controlled under ECCN 9E003.k, formerly controlled under ECCN 9E001 as part of its ongoing assessment of current export control licensing policy.

https://www.federalregister.gov/d/2023-22299

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BIS Implements Export Controls on Semiconductor Manufacturing Items

October 25, 2023: 88 FR 73424: The Bureau of Industry and Security (BIS) released the interim final rule (IFR) “Implementation of Additional Export Controls: Certain Advanced Computing and Semiconductor Manufacturing Items; Supercomputer and Semiconductor End Use”, which amended the Export Administration Regulations (EAR) to implement controls on advanced computing integrated circuits (ICs), computer commodities that contain such ICs, and certain semiconductor manufacturing items. The IFR also made other EAR changes to ensure appropriate related controls, including on certain “U.S. person” activities. The IFR updated the technical parameters used for classifying items controlled under ECCN 3A090 to counter workarounds for the former controls that entailed using larger numbers of smaller data chips to match the power of one restricted chip.

The IFR also created new .z paragraphs for nine ECCNs (3A001.z, 4A003.z, 4A004.z, 4A005.z, 5A002.z, 5A004.z, 5A992.z, 5D002.z, and 5D992.z) to capture items the BIS determined have performance levels that meet or exceed relevant parameters, and in certain cases, requires exporters to identify the .z items in the electronic export information filing and/or the commercial invoice for export clearance.

Additionally, the IFR expanded the end-use controls in EAR §744.23, imposing a license requirement on the export, reexport, and transfer of advanced computing items identified in ECCN 3A090, 4A090 or one of the new .z paragraphs to or within any country that is not a D:1, D:4, D:5 country, or the reexport and in-country transfer from or within Macau or a D:5 country of 3E001 items developed by an entity or parent entity based in Macau or a D:5 country.

https://www.federalregister.gov/d/2023-23049

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BIS Announces 90 Day Moratorium on Firearms and Ammunition Export Licenses

October 27, 2023: Effective October 27, 2023, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) paused for approximately 90 days the issuance of new export licenses involving certain firearms, related components, night vision devices and ammunition under its jurisdiction and the provision of new export assistance activities for such products to all non-governmental end users worldwide, apart from those in certain destinations to facilitate a review of export control policies. The BIS may take additional steps to further U.S. national security and foreign policy interests following the review. During this “pause” period, the BIS will further assess current firearm export control review policies to determine whether any changes are warranted to advance U.S. national security and foreign policy interests. The review will be conducted with urgency and will enable the Department to assess and mitigate the risk of firearms being diverted to entities or activities that promote regional instability, violate human rights, or to refuel criminal activities more effectively. This pause applies to the issuance of new licenses involving certain firearms, related components, night vision devices, and and ammunition controlled under four Export Control Classification Numbers (ECCNs): ECCN 0A501, ECCN 0A502, ECCN 0A504, and ECCN 0A505. Only applications for firearms, night vision devices, and ammunition regulated by the EAR to non-governmental end users located in Ukraine, Israel, and Country Group A:1 will be considered.

https://www.bis.doc.gov/index.php/documents/policy-guidance/3374-2023-10-27-bis-faqs-firearms-pause-and-review/file

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U.S. Census Bureau

Census Bureau Issues Tips on How to Resolve AES Response Messages

October 18, 2023: When a shipment is filed to the AES, a system response message is generated and indicates whether the shipment has been accepted or rejected.  If the shipment is accepted, the AES filer receives an Internal Transaction Number (ITN) as confirmation.  Though the shipment is accepted, the filer may still receive a Verify Message, Compliance Alert, Informational Message or Warning Message along with their ITN.  However, if the shipment is rejected, a Fatal Error notification is received and must be corrected to receive a valid ITN.

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

Fatal Error Response Code:  161

Narrative:     Equipment Number Not Allowed for MOT

Severity:       Fatal

Reason:        The Mode of Transportation Code reported does not allow an Equipment Number.

Resolution: One or more Equipment Numbers may be reported for vessel, air, rail or truck shipments.  An Equipment Number cannot be reported for any other Mode of Transportation.

Verify the Mode of Transportation Code and the Equipment Number, correct the shipment and resubmit.

Response Code:  851

Narrative:     Improbable Commodity for Air Shipment

Severity:       Verify

Reason:        For the reported Schedule B/HTS Number, a Mode of Transportation of Air is improbable for this commodity.

Resolution: Certain products are highly unlikely to be exported with a Mode of Transportation Air.  This might indicate either a keying error or misclassification of the product.

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

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

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

For further information or questions, contact the U.S. Census Bureau’s Trade Data Collection Branch. Telephone: (800) 549-0595, select option 1 for AES.

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LATEST SANCTIONS FINES & PENALTIES

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

Sanctions

U.S. Department of State

October 20, 2023: The State Department designated three entities pursuant to Executive Order (E.O.) 13382, which targets proliferators of weapons of mass destruction and their means of delivery. The three entities, based in the People’s Republic of China (PRC), have worked to supply missile‐applicable items to Pakistan’s ballistic missile program.

The Department of State designated General Technology Limited, Beijing Luo Luo Technology Development Co Ltd., and Changzhou Utek Composite Company Ltd. pursuant to E.O. 13382 for having engaged, or attempted to engage, in activities or transactions that have materially contributed to, or pose a risk of materially contributing to, the proliferation of weapons of mass destruction or their means of delivery (including missiles capable of delivering such weapons), including any efforts to manufacture, acquire, possess, develop, transport, transfer or use such items, by Pakistan.

General Technology Limited has worked to supply brazing materials, which are used to join components in ballistic missile rocket engines, and in the production of combustion chambers. Beijing Luo Luo Technology Development Co Ltd. has worked to supply mandrels and other machinery, which can be used in the production of solid‐propellant rocket motors and can be controlled by the Missile Technology Control Regime. Changzhou Utek Composite Company Ltd. has worked since 2019 to supply D‐glass glass fiber, quartz fabric, and high silica cloth, all of which have applications in missile systems.

https://www.state.gov/united-states-sanctions-entities-contributing-to-ballistic-missile-proliferation/

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

October 6, 2023: 88 FR 70352: The Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) by adding 49 entities under 52 entries to the Entity List. These entries have been listed under the destinations of the People’s Republic of China (China) (42), Estonia (1), Finland (1), Germany (1), India (3), Turkey (2), United Arab Emirates (1), and the United Kingdom (1). These entities have been added to the Entity List for providing support to Russia’s military and/or defense industrial base. Specifically, these entities supplied Russian consignees connected to the Russian defense sector with U.S.-origin integrated circuits after March 1, 2023. These integrated circuits are classified under Harmonized Tariff System (HTS)- 6 codes 854231, 854232, 854233, and/or 854239. These HTS–6 codes are identified under supplement no. 4 to part 746 (Russian and Belarusian Industry Sector Sanctions Pursuant to § 746.5(a)(1)(ii)). All U.S.-origin items classified under these HTS–6 codes have been controlled for export and reexport and transfer within Russia since September 15, 2022. Such U.S.- origin items require a license under § 746.5(a)(1)(ii) of the EAR when destined to Russia or Belarus.1 Therefore, the documented shipments by these entities to Russia of such U.S.- origin items are contrary to U.S. national security and foreign policy interests under § 744.11(b) of the EAR.

China

  • Ace Electronics (HK) Co., Limited;
  • Alliance Electro Tech Co., Limited;
  • Alpha Trading Investments Limited;
  • Asialink Shanghai Int’l Logistics Co., Ltd.;
  • Benico Limited;
  • C & I Semiconductor Co., Ltd.;
  • Check IC Solution Limited;
  • Chengdu Jingxin Technology Co. Ltd.;
  • China Shengshi International Trade, Ltd.;
  • E-Chips Solution Co. Ltd.;
  • Farteco Limited;
  • Glite Electronic Technology Co., Limited;
  • Global Broker Solutions Limited;
  • Grants Promotion Service Limited;
  • Guangdong Munpower Electronic Commerce Co. Ltd.;
  • Huayuanshitong Technology Co. Ltd.;
  • IMAXChip;
  • Insight Electronics;
  • Kingford PCB Electronics Co., Ltd.;
  • Kobi International Company;
  • Most Technology Limited;
  • New Wally Target International Trade Co., Limited;
  • Nuopuxun Electronic Technology Co., Limited;
  • Onstar Electronics Co. Ltd.;
  • PT Technology Asia Limited;
  • Robotronix Semiconductors Limited;
  • Rui En Koo Technology Co. Ltd;
  • Shaanxi Yingsaeir Electronic Technology Co. Ltd.;
  • Shanghai IP3 Information Technology Co. Ltd.;
  • Shenzhen One World International Logistics Co., Limited;
  • Shvabe Opto-Electronics Co. LTD.;
  • Suntop Semiconductor Co., LTD.;
  • Tordan Industry Limited;
  • TYT Electronics Co. Ltd.;
  • UCreate Electronics Group;
  • Wargos Industry Limited;
  • Win Key Limited;
  • Xin Quan Electronics Hong Kong Co., Limited;
  • ZeYuan Technology Limited;
  • Zhejiang Foso Electronics Technology Co. Ltd.;
  • Zixis Limited; and
  • Zone Chips Electronics Hong Kong Co., Limited.

Estonia

  • Elmec Trade OU.

Finland

  • PT Technology Asia Limited.

Germany

  • Interquest GmbH.

India

  • Abhar Technologies and Services Private Limited;
  • C & I Semiconductor Co., Ltd.; and
  • Innovio Ventures.

Turkey

  • LL Chip Elektrik Elektronic Paz; and
  • Scitech Tasimacilik Ticaret Limited

United Arab Emirates  

  • Hulm al Sahra Elect Devices TR.

United Kingdom

  • China Shengshi International Trade Ltd.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3349-bis-press-release-entity-list-additions-49-russi/file

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

October 3, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 28 individuals and entities involved with the international proliferation of illicit drugs, including a China-based network responsible for the manufacturing and distribution of ton quantities of fentanyl, methamphetamine, and MDMA precursors. These individuals and entities designated by OFAC are also involved in the global trafficking of xylazine and “nitazenes,” which are highly potent and often mixed with illicit fentanyl or other drugs.

  • Wang Shucheng
  • Du Changgen
  • Hubei Vast Chemical Co., Limited
  • Hebei Guanlang Biotechnology Co., Limited
  • Hebei Xiuna Trading Co., LTD.
  • Shanghai Jarred Industrial Co., LTD.
  • Hanhong Pharmaceutical Technology Co., LTD
  • Gan Xuebi a.k.a Bella Chen
  • Song Xueqin a.k.a. Shelly Song
  • Yang Qi a.k.a. Daisy Yang
  • Gao Lanfang
  • Wang Mingming
  • Wang Mingjing
  • Hebei Crovell Biotech Co., LTD.
  • Zhang Wei
  • Qingdao Cemo Technology Develop Co., LTD
  • Hebei Yaxin Restaurant Management Co., LTD.
  • Jinhu Minsheng Pharmaceutical Machinery Co. LTD.
  • Shen Xingbiao
  • Valerian Labs, Inc. and Valerian Labs Distribution Corp.
  • Bahman Djebelibak a.k.a. Bobby Shah
  • Jiangsu Bangdeya New Material Technology Co., LTD.
  • Wang Jiantong
  • Xia Fengbing
  • Xingtai Dong Chuang New Material Technology Co., LTD.

https://home.treasury.gov/news/press-releases/jy1779

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October 12, 2023: The Price Cap Coalition issued an advisory to provide recommendations concerning specific best practices in the maritime oil industry. The advisory reflects efforts to promote responsible practices in the industry to prevent and disrupt sanctioned trade and enhance compliance with the price caps on crude oil and petroleum products of Russian Federation origin, put in place by the G7, the European Union, and Australia (“the Price Cap Coalition” or “Coalition”).

The advisory is directed at both government and private sector actors (“industry stakeholders”) involved in the maritime trade of crude oil and refined petroleum products. The Coalition is committed to encouraging responsible maritime trade in crude oil and petroleum products within a reputable, safe, and secure market. Recent developments in the maritime oil trade, described below, expose industry stakeholders to increased safety, environmental, economic, reputational, financial, logistical, and legal risks. The advisory outlines best practices industry stakeholders can adopt to reduce risks while promoting the safe flow of oil on the market. The recommendations build upon previous guidance issued by the Price Cap Coalition such as the May 2020 Sanctions Advisory for the Maritime Industry, the Office of Financial Sanctions Implementation (OFSI) December 2020 Maritime Guidance, the Office of Foreign Assets Control (OFAC) February 2023 Guidance on Implementation of the Price Cap Policy, OFAC’s April 2023 Alert on Possible Evasion of the Russian Oil Price Cap, OFSI’s UK Maritime Services Ban and Oil Price Cap Industry Guidance, and the European Commission’s Oil Price Cap Guidance.

Increased Risks from Recent Developments in the Maritime Oil Trade

Geopolitical changes continue to impact and shape the world’s maritime oil trade, shifting trade routes, broadening the scope of shipping service providers, and, at times, resulting in loss of transparency. As “shadow” trade has become more pronounced, often involving actors and cargo affiliated with countries and persons subject to sanctions or associated with other illicit activity. This shadow trade is characterized by irregular and often high-risk shipping practices that generate significant concerns for both the public and private sectors. These heightened risks include but are not limited to:

  • Maritime Safety and Marine Environment: The vessels engaged in this shadow trade, sometimes called the “shadow fleet,” are typically older ships, many of which are operating past their traditional lifespans. These vessels are often registered with flag states that fail to meet their international obligations. There is also an increased risk of falsified registration. Vessels in the shadow trade may fabricate or neglect the appropriate surveys or inspections and lack regulatory certificates required under international conventions. Additionally, crews employed on shadow fleet vessels may face pressure to disregard prudent shipboard practices, including those provided by the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (“STCW”). These factors (i.e., vessel age; substandard certifications; inadequate safety and maintenance standards performed by substandard flags or unrecognized organizations; imprudence by crew) could increase the likelihood of marine casualties.
  • Insurance and Economic: Oil spills can create tremendous environmental damage and impose immense economic costs on coastal states. Ships involved in the shadow trade may rely on unproven Protection and Indemnity (P&I) insurance providers that operate in jurisdictions with opaque or limited regulation, and insufficient capital, reinsurance arrangements, and/or technical expertise to handle a major claim in the event of a marine casualty. Accordingly, it is more challenging to hold such vessels accountable for the heavy economic burden generated by environmental damage.
  • Reputational, Logistical, and Financial: Actors involved in the shadow trade often conceal their ownership structures and the origin of their cargo. The ownership of shadow fleet tankers may be concealed through complex corporate arrangements, with a recent increase of single vessel fleets. These vessels may disable or manipulate AIS systems to conceal illicit activity or other information about their voyages. Such deceptive practices may cause industry stakeholders to unknowingly engage in transactions that are inconsistent with industry stakeholders’ compliance policies, affect industry stakeholders’ reputations, and trigger de-risking behavior from counterparties. This de-risking can result in loss of access to reputable service providers, financing, customers, and ports.
  • Legal and Sanctions: A coalition of over thirty countries have adopted a variety of economic measures in response to Russia’s war against Ukraine, including the oil price cap policy implemented by the Price Cap Coalition. Bad actors may use deceptive practices to gain or maintain access to Price Cap Coalition services to transport Russian oil or petroleum products 3 to be sold above the price cap or to engage in activity that may otherwise violate the Coalition’s sanctions, laws, or regulations.

Recommended Actions

The following recommendations are best practices that the Coalition encourages industry stakeholders to adopt, subject to applicable laws and regulations and, as appropriate according to their risk, based on: (i) their role; (ii) the information available to them; and (iii) the types of transactions in which they engage:

Recommendation 1: Require appropriately capitalized P&I insurance. The shadow trade involves ships that may rely on unknown, untested, sporadic, or fraudulent insurance. Without legitimate, continuous insurance coverage, these ships may be unable to pay the costs of accidents in which they are involved, including oil spills, which entail tremendous environmental damage and safety risks and associated costs. The Coalition encourages industry stakeholders to require that vessels have continuous and appropriate maritime insurance coverage for the entirety of their voyages. The Coalition further recommends that industry stakeholders require vessels to be insured by legitimate insurance providers with sufficient coverage for CLC9 liabilities. If an industry participant is engaging with a ship that is not insured by such a legitimate insurance provider, the industry participant should conduct sufficient due diligence to ensure that the insurer can cover all relevant risks. Such due diligence could include, as feasible, a review of an insurer’s financial soundness, track record, regulatory record, and/or ownership structure.

Recommendation 2: Receive classification from an International Association of Classification Societies10 member society. The information gathered by classification societies is useful in enabling insurers, port states, and other industry stakeholders to make informed decisions about the seaworthiness of vessels. Some ships involved in the shadow trade have shifted away from industry standard classification societies, and instead use societies that are not a part of, or have been removed from, the International Association of Classification Societies. The Coalition encourages11 industry stakeholders to ensure counterparties receive classification from IACS member classification societies to ensure vessels are fit for the service intended.

Recommendation 3: Best-practice use of Automatic Identification Systems (“AIS”). Consistent with the International Convention for the Safety of Life at Sea (“SOLAS”), industry stakeholders should promote the continuous broadcasting of AIS throughout the lifetime of a voyage. If a ship needs to disable its AIS in response to a legitimate safety concern, the ship should document the circumstances that necessitated disablement. Industry stakeholders should also vigilantly monitor irregular AIS patterns or data that are inconsistent with actual ship locations. By requiring that ships with which they engage use AIS in accordance with the SOLAS, industry stakeholders will improve their understanding of vessels’ activities, and reduce their exposure to criminal actors and associated risks.

  • If accessible, complement AIS Tracking with Long-Range Identification and Tracking

(“LRIT”). In instances of AIS outages or suspected AIS manipulation, industry

stakeholders such as flagging registries that have access to LRIT should use it to determine the true location of vessels, including, where feasible, those leased to third parties. For those industry stakeholders who have access to LRIT, combining AIS and LRIT is a best practice for mitigating risk.

Recommendation 4: Monitor high-risk ship-to-ship transfers. While ship-to-ship (STS) transfers (the transfer of cargo between ships at sea) are often conducted for legitimate purposes, such transfers can also be used to conceal the origin or destination of cargo in circumvention of sanctions or other regulations. Furthermore, STS transfers of crude oil or petroleum products outside of safe and sheltered waters entail heightened environmental and safety risks. Industry stakeholders should recognize these enhanced risks and, as appropriate to their role, conduct enhanced due diligence in the context of STS transfers, including the notification of STS oil cargo transfers as required by Annex I of the International Convention for the Prevention of Pollution from Ships (“MARPOL“), especially in areas at higher risk for illicit trading activity or AIS manipulation. It is also recommended that industry stakeholders verify oil record logs to hold accountable record of cargo movements aboard vessels.

Recommendation 5: Request associated shipping and ancillary costs. The inflation of shipping and ancillary costs (e.g., freight, customs, insurance), or the bundling of such costs, are tactics that may be used to conceal that Russian oil was purchased above the price cap. The billing of commercially unreasonable or opaque shipping and ancillary costs should be viewed as a sign of potential price cap evasion. Shipping, freight, customs, and insurance costs are not included in the price caps and must be invoiced separately and at commercially reasonable rates. Industry stakeholders involved in the Russian oil trade that use “Cost, Insurance, Freight” contracts or whose counterparts use such agreements should require an itemized breakdown of all costs to determine the price paid for oil or petroleum products. This may require that industry stakeholders update contractual terms and conditions with sellers or counterparts or adjust invoicing models to show the price of the oil until the port of loading and the price for transportation and other services separately.

Recommendation 6: Undertake appropriate due diligence. Industry stakeholders should carry out appropriate due diligence. Heightened diligence may be appropriate for ships that have undergone numerous administrative changes (e.g., re-flagging). Industry stakeholders may also wish to conduct increased diligence when dealing with intermediary companies (e.g., management companies, traders, brokerages, etc.) that conceal their beneficial ownership or otherwise engage in unusually opaque practices. Such companies may be more likely to engage in deceptive practices and expose counterparties to heightened risks. Industry stakeholders’ due diligence should be calibrated according to the specificities of their business and the related risk exposure. Due diligence is especially important where market assessments indicate that Russian oil prices exceed the price cap, and Coalition services are being used or sought.

Recommendation 7: Report ships that trigger concerns. If an industry participant is aware of potentially illicit or unsafe maritime oil trade, including suspected breaches of the oil price cap, they should report this to relevant authorities. By reporting these concerning behaviors, industry stakeholders can collectively help protect the trade from malign activity, while promoting safety and integrity across the market.

https://home.treasury.gov/news/press-releases/jy1797

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October 12, 2023: OFAC Issued General License No. 73: “Authorizing Limited Safety and Environmental Transactions Involving Certain Persons or Vessels”.

General License No. 73: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to one of the following activities involving the blocked persons or vessels described in paragraph are authorized through 12:01 a.m. eastern standard time, January 8, 2024, provided that any payment to a blocked person must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations (RuHSR): (1) The safe docking and anchoring of any of the blocked vessels listed this general license (“blocked vessels”) in port; (2) The preservation of the health or safety of the crew of any of the blocked vessels; or (3) Emergency repairs of any of the blocked vessels or environmental mitigation or protection activities relating to any of the blocked vessels.

The authorizations in this general license apply to the following blocked persons and vessels listed on the Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List and any entity in which any of the following persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest: (1) Ice Pearl Navigation Corp (registered owner of YASA GOLDEN BOSPHORUS, IMO 9334038); or (2) Lumber Marine SA (registered owner of SCF PRIMORYE, IMO 9421960).

The general license does not authorize: (1) The entry into any new commercial contracts involving the property or interests in property of any blocked persons, including the blocked entities and vessels described in this general license, except as otherwise authorized; (2) The offloading of any cargo onboard any of the blocked vessels, including the offloading of crude oil or petroleum products of Russian Federation origin, except for the offloading of cargo that is ordinarily incident and necessary to address vessel emergencies authorized pursuant to this general license; (3) Any transactions related to the sale of crude oil or petroleum products of Russian Federation origin; (4) Any transactions prohibited by Directive 2 under E.O. 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions; (5) Any transactions prohibited by Directive 4 under E.O. 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation; or (6) Any transactions otherwise prohibited by the RuHSR, including transactions involving the property or interests in property of any person blocked pursuant to the RuHSR, other than transactions involving the blocked persons or vessels in this general license, unless separately authorized.

https://ofac.treasury.gov/media/932196/download?inline

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October 18, 2023: In response to the signing of an electoral roadmap agreement between Venezuela’s Unitary Platform and representatives of Maduro, and in support of the Venezuelan people, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued 4 General Licenses suspending select sanctions. The OFAC also published a FAQ related to the suspension of sanctions and the newly-issued General Licenses.

  • General License 44 authorizes transactions involving the oil and gas sector in Venezuela. The license will be renewed only if Venezuela meets its commitments under the electoral roadmap as well as other commitments with respect to those who are wrongfully detained.

https://ofac.treasury.gov/media/932231/download?inline

  • General License 43 authorizes dealings with Minerven – the Venezuelan state-owned gold mining company – which Treasury assesses would have the effect of reducing black-market trading in gold.

https://ofac.treasury.gov/media/932226/download?inline

https://home.treasury.gov/news/press-releases/jy1822

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October 18, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 11 individuals, eight entities, and one vessel based in Iran, Hong Kong, the People’s Republic of China (PRC), and Venezuela that are enabling Iran’s destabilizing ballistic missile and unmanned aerial vehicle (UAV) programs. The persons designated have materially supported Iran’s Islamic Revolutionary Guard Corps (IRGC), Ministry of Defense and Armed Forces Logistics (MODAFL), or their subordinates in the production and proliferation of missiles and UAVs.

  • Fanavaran Sanat Ertebatat Company of Iran
  • Armin Ghorsi Anbaran of Iran
  • Hossein Hemsi of Iran
  • Saberin Kish Company of Iran
  • Alireza Matinkia of Iran
  • Electro Optic Sairan Industries Co. of Iran
  • Sarmad Electronic Sepahan Company of Iran
  • Ghasem Damavandian of Iran
  • Mohammad-Reza Ashtiani of Iran
  • Seyed Hojatollah Ghoreishi of Iran
  • Jaber Reihani of Iran
  • Seyed Hamzeh Ghalandari of Iran
  • Cargo Vessel PARNIA of Iran
  • Lin Jinghe A/K/A Gary Lam of the PRC
  • Yongxin Li A/K/A Emma Lee of the PRC
  • Yiu Wa Yung A/K/A Stephen Yung of the PRC
  • Nanxigu Technology Co., Limited of Hong Kong
  • Dali RF Technology Co., Limited of Hong Kong
  • ICGOO Electronics Limited of Hong Kong

https://ofac.treasury.gov/recent-actions/20231018_33

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October 18, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on ten key Hamas terrorist group members, operatives, and financial facilitators in Gaza and elsewhere including Sudan, Turkey, Algeria, and Qatar. The action targets members managing assets in a secret Hamas investment portfolio, a Qatar-based financial facilitator with close ties to the Iranian regime, a key Hamas commander, and a Gaza-based virtual currency exchange and its operator. The designations are part of a continuous effort by the United States to root out Hamas’s sources of revenue in the West Bank and Gaza and across the region and is taken in close coordination with regional partners and allies.

  • Musa Muhammad Salim Dudin of Palestine
  • Abdelbasit Hamza Elhassan Mohamed Khair of Sudan
  • Amer Kamal Sharif Alshawa of Turkey
  • Ahmed Sadu Jahleb of Egypt
  • Aiman Ahmad Al-Duwaik of Jordan
  • Walid Mohammed Mustafa Jadallah of Jordan
  • Muhammad Ahmad ‘Abd Al-Dayim Nasrallah of Jordan
  • Ayman Nofal of Palestine
  • Buy Cash Money and Money Transfer Company of Palestine

https://home.treasury.gov/news/press-releases/jy1816

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October 20, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two individuals and four entities that form a core part of Specially Designated National (SDN) and Republika Srpska (RS) President Milorad Dodik’s (Dodik) patronage network. Members of this network, which include Dodik’s adult children, facilitate Dodik’s ongoing corruption in Bosnia and Herzegovina’s (BiH) RS entity, allowing him to siphon public funds from the RS and enrich himself and his family at the expense of BiH citizens and functional governance in the country.

Dodik previously served as a member of BiH’s Presidency and is widely known for openly calling for, and supporting, the unilateral transfer of state competencies from the BiH government to the RS, one of two entities that comprise BiH. Dodik has used his official BiH position and a network of personal ties and companies to accumulate personal wealth through graft, bribery, and other forms of corruption. His divisive ethno-nationalistic rhetoric reflects his efforts to advance these political goals and divert attention from his corrupt activities. Additionally, Dodik has publicly denigrated other ethnic and religious groups within BiH, further sowing division and political gridlock.

  • Igor Dodik of Bosnia and Herzegovina
  • Gorica Dodik of Bosnia and Herzegovina
  • Global Liberty d.o.o. Laktasi of Bosnia and Herzegovina
  • Agro Voce d.o.o. Laktasi of Bosnia and Herzegovina
  • Agape Gorica Dodik i Ivana Dodik s.p. Banja Luka of Bosnia and Herzegovina
  • Fruit Eco d.o.o. Gradiska of Bosnia and Herzegovina

https://home.treasury.gov/news/press-releases/jy1825

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October 25, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 8H, authorizing transactions related to energy involving certain entities.

For the purposes of the general license, the term “related to energy” means the extraction, production, refinement, liquefaction, gasification, regasification, conversion, enrichment, fabrication, transport, or purchase of petroleum, including crude oil, lease condensates, unfinished oils, natural gas liquids, petroleum products, natural gas, or other products capable of producing energy, such as coal, wood, or agricultural products used to manufacture biofuels, or uranium in any form, as well as the development, production, generation, transmission, or exchange of power, through any means, including nuclear, thermal, and renewable energy sources.

The general license does not authorize:

  • Any transactions prohibited by Directive 1A under E.O. 14024, Prohibitions Related to Certain Sovereign Debt of the Russian Federation;
  • The opening or maintaining of a correspondent account or payable-through account for or on behalf of any entity subject to Directive 2 under E.O. 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions;
  • Any debit to an account on the books of a U.S. financial institution of the Central Bank of the Russian Federation; or
  • Any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.

The entities authorized by the General License are:

  • State Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank
  • Public Joint Stock Company Bank Financial Corporation Otkritie
  • Sovcombank Open Joint Stock Company
  • Public Joint Stock Company Sberbank of Russia
  • VTB Bank Public Joint Stock Company
  • Joint Stock Company Alfa-Bank
  • Public Joint Stock Company Rosbank
  • Bank Zenit Public Joint Stock Company
  • Bank Saint-Petersburg Public Joint Stock Company
  • Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest; or
  • The Central Bank of the Russian Federation

https://ofac.treasury.gov/media/932246/download?inline

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October 27, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed a second round of sanctions on key Hamas-linked officials and financial networks following the October 7 barbaric attacks on Israel and its civilian population. The action targets additional assets in Hamas’s investment portfolio and individuals who are facilitating sanctions evasion by Hamas-affiliated companies. Treasury is also designating a Hamas official in Iran and members of Iran’s Islamic Revolutionary Guard Corps (IRGC), as well as a Gaza-based entity that has served as a conduit for illicit Iranian funds to Hamas and Palestinian Islamic Jihad (PIJ).

  • Khaled Qaddoumi of Jordan
  • Ali Morshed Shirazi of Lebanon
  • Mostafa Mohammad Khani of Iran
  • Ali Ahmad Faizullahi of Iran
  • Al-Ansar Charity Association of Palestine
  • Nasser Al Sheikh Ali of Palestine
  • Zawaya Group for Development and Investment Co. LTD of Sudan
  • Zawaya Group for Development Investment Sociedad Limitada of Spain
  • Larrycom for Investment Company of Sudan
  • Alaeddin Senguler of Turkey
  • Gulsah Yigidoglu of Turkey
  • Arwa Mangoush of Turkey

https://home.treasury.gov/news/press-releases/jy1845

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October 31, 2023: Pursuant to Executive Order 14014, “Blocking Property With Respect to the Situation in Burma” (the “Order”), the Director of the Office of Foreign Assets Control (OFAC) determined, in consultation with the Department of State that the Myanma Oil and Gas Enterprise (MOGE) is a political subdivision, agency, or instrumentality of the Government of Burma, and that the following activities by a U.S. person are prohibited on or after December 15, 2023 except to the extent provided by law, or unless licensed or otherwise authorized by OFAC: the provision, exportation, or reexportation, directly or indirectly, of financial services to or for the benefit of MOGE or its property or interests in property.

All other activities with MOGE or involving MOGE’s property or interests in property are permitted, provided such activities are not otherwise prohibited by law, the Order, or any other sanctions program implemented by OFAC. Therefore, the following persons and entities have been added to the SDN list:

  • Swe Swe Aung of Burma
  • Maung Maung Aye of Burma
  • Zaw Min of Burma
  • Charlie Than of Burma
  • Kan Zaw of Burma
  • Sky Royal Hero Company Limited of Burma
  • Suntac International Trading Company Limited of Burma
  • Suntac Technologies Company Limited of Burma

https://ofac.treasury.gov/recent-actions/20231031

Fines and Penalties

October 4, 2023: 88 FR 68568: On December 1, 2022, in the U.S. District Court for the Western District of Texas, Carlos Eduardo Zepeda (“Zepeda”) was convicted of violating 18 U.S.C. 554(a). Specifically, Zepeda was convicted of smuggling from the United States to Mexico approximately 800 rounds of 5.56 mm ammunition. As a result of his conviction, the Court sentenced Zepeda to 24 months of imprisonment, three years of supervised release, and a $100 assessment. BIS received notice of Zepeda’s conviction for violating 18 U.S.C. 554. As provided in section 766.25 of the Export Administration Regulations (“EAR” or the “Regulations”), BIS provided notice and opportunity for Zepeda to make a written submission to BIS. 15 CFR 766.25. BIS has not received a written submission from Zepeda. BIS has decided to deny Zepeda’s export privileges under the Regulations for a period of seven years from the date of Zepeda’s conviction. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Zepeda had an interest at the time of his conviction.

https://www.federalregister.gov/d/2023-21900

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October 4, 2023: 88 FR 68567: On May 24, 2022, in the U.S. District Court for the Eastern District of North Carolina, Jacques Yves Sebastien Duroseau (“Duroseau”) was convicted of violating 18 U.S.C. 371, 50 U.S.C. 4819, section 38 of the Arms Export Control Act (22 U.S.C. 2778) (“AECA”), and 18 U.S.C. 554. Specifically, Duroseau was convicted of conspiring to illegally export and smuggle firearms and controlled equipment from the United States to Haiti, as well as transporting United States Munitions List-controlled firearms and Commerce Control List-controlled riflescopes without a license to the Haitian Army. As a result of his conviction, the Court sentenced Duroseau to 60 months of imprisonment, three years of supervised release and a $400 assessment. BIS received notice of Duroseau’s conviction for violating 18 U.S.C. 371, 50 U.S.C. 4819, section 38 of the AECA and 18 U.S.C. 554. BIS provided notice and opportunity for Duroseau to make a written submission to BIS, as provided in section 766.25 of the Export Administration Regulations (“EAR” or the “Regulations”). 15 CFR 766.25. BIS has not received a written submission from Duroseau. The BIS has decided to deny Duroseau’s export privileges under the Regulations for a period of 10 years from the date of Duroseau’s conviction. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Duroseau had an interest at the time of his conviction.

https://www.federalregister.gov/d/2023-21901

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October 4, 2023: 88 FR 68566: On October 21, 2021, in the U.S. District Court for the District of Arizona, Saphara Lynn Anderson (“Anderson”) was convicted of violating 18 U.S.C. 371. Specifically, Anderson was convicted of conspiring to export ammunition from the United States to Mexico. As a result of her conviction, the Court sentenced Anderson to probation for 60 months and a $100 special assessment. BIS received notice of Anderson’s conviction for violating 18 U.S.C. 371. As provided in section 766.25 of the Export Administration Regulations (“EAR” or the “Regulations”), BIS provided notice and opportunity for Anderson to make a written submission to BIS. 15 CFR 766.25. BIS has not received a written submission from Anderson. The BIS has decided to deny Anderson’s export privileges under the Regulations for a period of seven years from the date of Anderson’s conviction. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Anderson had an interest at the time of her conviction.

https://www.federalregister.gov/d/2023-21899

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October 4, 2023: 88 FR 68565: On March 2, 2023, in the U.S. District Court for the Southern District of Texas, Leonel Molina, Jr. (“Molina”) was convicted of violating 18 U.S.C. 554(a). Specifically, Molina was convicted of smuggling from the United States to Mexico Wolf 7.62x39mm caliber ammunition, without a license or written approval from the United States Department of Commerce. As a result of his conviction, the Court sentenced Molina to 46 months of imprisonment, three years of supervised release, and a $100 assessment. BIS received notice of Molina’s conviction for violating 18 U.S.C. 554. As provided in section 766.25 of the Export Administration Regulations (“EAR” or the “Regulations”), BIS provided notice and opportunity for Molina to make a written submission to BIS. 15 CFR 766.25. BIS has not received a written submission from Molina. The BIS has decided to deny Molina’s export privileges under the Regulations for a period of 10 years from the date of Molina’s conviction. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Molina had an interest at the time of his conviction.

https://www.federalregister.gov/d/2023-21902

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October 13, 2023: 88 FR 70928: On April 21, 2022, the BIS issued an order denying Aviastar—TU’s (“Aviastar”) export privileges for a period of 180 days on the ground that issuance of the order was necessary in the public interest to prevent an imminent violation of the Regulations. The renewal is based upon the facts underlying the issuance of the TDO and the renewal orders subsequently issued in this matter on October 17, 2022, and April 14, 2023, as well as other evidence developed during this investigation. This evidence demonstrates that Aviastar has acted, and continues to act, in blatant disregard for U.S. export controls and the terms of existing TDOs. The TDO, initially issued on April 21, 2022, was based on evidence that Aviastar violated the Regulations by operating multiple aircraft subject to the EAR and classified under ECCN 9A991.b on flights into and out of Russia after March 2, 2022 from destinations including, but not limited to, Hangzhou, China; Shenzhen, China; and Zhengzhou, China from/to Novosibirsk, Russia and Abakan, Russia, without the required BIS authorization.

Further evidence indicated that Aviastar also operated aircraft subject to the EAR on domestic flights within Russia, potentially in violation of Section 736.2(b)(10) of the Regulations.

BIS also presented evidence that, while subject to a TDO, Aviastar operated aircraft subject to the EAR and classified under ECCN 9A991.b on flights both into and out of Russia, in violation of the Regulations and the terms of the existing TDO.

Specifically, previous renewal orders detailed Aviastar’s continued operation of aircraft subject to the EAR, including, but not limited to, on flights into and out of Russia from/to Zhengzhou, China and Hangzhou, China, as well as on domestic flights within Russia.

In its September 19, 2023 request for TDO renewal, BIS submitted evidence that Aviastar violated the TDO and/or the Regulations by operating aircraft subject to the EAR and flown into Russia on or after March 2, 2022, on flights within Russia, in apparent violation of Section 736.2(b)(10) of the Regulations, as well as the TDO.

First, Aviastar—TU, 5 b. 7 Leningradsky prospekt, g. Moskva, 125040, Moscow, Russia, when acting for or on their behalf, any successors or assigns, agents, or employees may not, directly or indirectly, participate in any way in any transaction involving any commodity, software or technology (hereinafter collectively referred to as “item”) exported or to be exported from the United States that is subject to the EAR, or in any other activity subject to the EAR including, but not limited to:

  1. Applying for, obtaining, or using any license (except directly related to safety of flight), license exception, or export control document;
  2. Carrying on negotiations concerning, or ordering, buying, receiving, using, selling, delivering, storing, disposing of, forwarding, transporting, financing, or otherwise servicing in any way, any transaction involving any item exported or to be exported from the United States that is subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to Section 764.3(a)(2) of the Regulations, or engaging in any other activity subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to Section 764.3(a)(2) of the Regulations; or
  3. Benefitting in any way from any transaction involving any item exported or to be exported from the United States that is subject to the EAR, or from any other activity subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to Section 764.3(a)(2) of the Regulations.

Second, that no person may, directly or indirectly, do any of the following:

  1. Export, reexport, or transfer (in-country) to or on behalf of Aviastar any item subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to Section 764.3(a)(2) of the Regulations;
  2. Take any action that facilitates the acquisition or attempted acquisition by Aviastar of the ownership, possession, or control of any item subject to the EAR that has been or will be exported from the United States, including financing or other support activities related to a transaction whereby Aviastar acquires or attempts to acquire such ownership, possession or control except directly related to safety of flight and authorized by BIS pursuant to Section 764.3(a)(2) of the Regulations;
  3. Take any action to acquire from or to facilitate the acquisition or attempted acquisition from Aviastar of any item subject to the EAR that has been exported from the United States except directly related to safety of flight and authorized by BIS pursuant to Section 764.3(a)(2) of the Regulations;
  4. Obtain from Aviastar in the United States any item subject to the EAR with knowledge or reason to know that the item will be, or is intended to be, exported from the United States except directly related to safety of flight and authorized by BIS pursuant to Section 764.3(a)(2) of the Regulations; or
  5. Engage in any transaction to service any item subject to the EAR that has been or will be exported from the United States and which is owned, possessed or controlled by Aviastar, or service any item, of whatever origin, that is owned, possessed or controlled by Aviastar if such service involves the use of any item subject to the EAR that has been or will be exported from the United States except directly related to safety of flight and authorized by BIS pursuant to Section 764.3(a)(2) of the Regulations. For purposes of this paragraph, servicing means installation, maintenance, repair, modification, or testing.

Third, that, after notice and opportunity for comment as provided in section 766.23 of the EAR, any other person, firm, corporation, or business organization related to Aviastar by ownership, control, position of responsibility, affiliation, or other connection in the conduct of trade or business may also be made subject to the provisions of this Order.

https://www.federalregister.gov/d/2023-22614

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October 13, 2023: 88 FR 70925: On October 13, 2022, the BIS issued an order denying URAL’s export privileges for a period of 180 days on the ground that issuance of the order was necessary in the public interest to prevent an imminent violation of the Regulations. Evidence presented by BIS indicated that, after the initial October 13, 2022, TDO issued, URAL continued to operate aircraft subject to the EAR and classified under ECCN 9A991.b on flights both into and within Russia, in violation of the Regulations and the TDO itself.

Specifically, the April 10, 2023, renewal order detailed URAL’s continued operation of aircraft subject to the EAR, including, but not limited to, on flights into and out of Russia from/to Bishkek, Kyrgyzstan, Dushanbe, Tajikistan, and Khujand, Tajikistan, as well as within Russia. Since that time, URAL has continued to engage in conduct prohibited by the TDO and Regulations. In its September 15, 2023, request for renewal of the TDO, BIS submitted evidence that URAL continues to operate aircraft subject to the EAR and classified under ECCN 9A991.b, both on flights into and within Russia, in violation of the April 10, 2023 TDO and/or the Regulations. Specifically, BIS’s evidence and related investigation demonstrates that URAL has continued to operate aircraft subject to the EAR, including, but not limited to, on flights into and out of Russia from/to Dushanbe, Tajikistan, Tamchy, Kyrgyzstan, and Bishkek, Kyrgyzstan, as well as domestically within Russia.

First, URAL Airlines JSC, Utrenniy Lane 1-g, Yekaterinburg, Russia 620025, when acting for or on their behalf, any successors or assigns, agents, or employees may not, directly or indirectly, participate in any way in any transaction involving any commodity, software or technology (hereinafter collectively referred to as “item”) exported or to be exported from the United States that is subject to the EAR, or in any other activity subject to the EAR including, but not limited to:

  1. Applying for, obtaining, or using any license (except directly related to safety of flight), license exception, or export control document;
  2. Carrying on negotiations concerning, or ordering, buying, receiving, using, selling, delivering, storing, disposing of, forwarding, transporting, financing, or otherwise servicing in any way, any transaction involving any item exported or to be exported from the United States that is subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to Section 764.3(a)(2) of the Regulations, or engaging in any other activity subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to Section 764.3(a)(2) of the Regulations; or
  3. Benefitting in any way from any transaction involving any item exported or to be exported from the United States that is subject to the EAR, or from any other activity subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to Section 764.3(a)(2) of the Regulations.

Second, that no person may, directly or indirectly, do any of the following:

  1. Export, reexport, or transfer (in-country) to or on behalf of URAL any item subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to Section 764.3(a)(2) of the Regulations;
  2. Take any action that facilitates the acquisition or attempted acquisition by URAL of the ownership, possession, or control of any item subject to the EAR that has been or will be exported from the United States, including financing or other support activities related to a transaction whereby URAL acquires or attempts to acquire such ownership, possession or control except directly related to safety of flight and authorized by BIS pursuant to Section 764.3(a)(2) of the Regulations;
  3. Take any action to acquire from or to facilitate the acquisition or attempted acquisition from URAL of any item subject to the EAR that has been exported from the United States except directly related to safety of flight and authorized by BIS pursuant to Section 764.3(a)(2) of the Regulations;
  4. Obtain from URAL in the United States any item subject to the EAR with knowledge or reason to know that the item will be, or is intended to be, exported from the United States except directly related to safety of flight and authorized by BIS pursuant to Section 764.3(a)(2) of the Regulations; or
  5. Engage in any transaction to service any item subject to the EAR that has been or will be exported from the United States and which is owned, possessed or controlled by URAL, or service any item, of whatever origin, that is owned, possessed or controlled by URAL if such service involves the use of any item subject to the EAR that has been or will be exported from the United States except directly related to safety of flight and authorized by BIS pursuant to Section 764.3(a)(2) of the Regulations. For purposes of this paragraph, servicing means installation, maintenance, repair, modification, or testing.

Third, that, after notice and opportunity for comment as provided in section 766.23 of the EAR, any other person, firm, corporation, or business organization related to URAL by ownership, control, position of responsibility, affiliation, or other connection in the conduct of trade or business may also be made subject to the provisions of this Order.

https://www.federalregister.gov/d/2023-22604

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October 25, 2023: 88 FR 73309: The Bureau of Industry and Security, U.S. Department of Commerce (“BIS”), has notified Dina Zhu, of Lawrenceville, GA (“Zhu”), of its intention to initiate an administrative proceeding against Zhu pursuant to section 766.3 of the Export Administration Regulations, through the issuance of a Proposed Charging Letter to Zhu that alleges that Zhu committed one violation of the Regulations, specifically: 15 CFR 764.2(c)—Attempted Unlicensed Export to China.

On or about November 30, 2018, Zhu engaged in conduct prohibited by the Regulations by attempting to export optical sighting devices, items subject to the Regulations, and valued at approximately $25,000, from the United States to the Peoples Republic of China, via Hong Kong, without the required Department of Commerce export license. At the time of the attempted export, the items were classified under export control classification 0A987 and controlled on Crime Control grounds.

Pursuant to Section 742.7 of the Regulations, a Department of Commerce export license was required before the items could be exported to Hong Kong or China. OEE was able to interdict this transaction by issuing the courier a re-delivery order to return or unload the shipment pursuant to Section 758.8 of the Regulations.

BIS and Zhu have entered into a Settlement Agreement pursuant to Section 766.18(a) of the Regulations, whereby they agreed to settle this matter in accordance with the terms and conditions set forth therein;

First, for a period of one (1) year from the date of the Order, Zhu, with a last known address of 101 Windsor Chase Drive, Lawrenceville, GA 30043, and when acting for or on her behalf, her successors, assigns, representatives, agents, or employees (hereinafter collectively referred to as the “Denied Person”), may not, directly or indirectly, participate in any way in any transaction involving any commodity, software or technology (hereinafter collectively referred to as “item”) exported or to be exported from the United States that is subject to the Regulations, or in any other activity subject to the Regulations, including, but not limited to:

  1. Applying for, obtaining, or using any license, license exception, or export control document;
  2. Carrying on negotiations concerning, or ordering, buying, receiving, using, selling, delivering, storing, disposing of, forwarding, transporting, financing, or otherwise servicing in any way, any transaction involving any item exported or to be exported from the United States that is subject to the Regulations, or engaging in any other activity subject to the Regulations; or
  3. Benefitting in any way from any transaction involving any item exported or to be exported from the United States that is subject to the Regulations, or from any other activity subject to the Regulations.

Second, no person may, directly or indirectly, do any of the following:

  1. Export or reexport to or on behalf of the Denied Person any item subject to the Regulations;
  2. Take any action that facilitates the acquisition or attempted acquisition by the Denied Person of the ownership, possession, or control of any item subject to the Regulations that has been or will be exported from the United States, including financing or other support activities related to a transaction whereby the Denied Person acquires or attempts to acquire such ownership, possession or control;
  3. Take any action to acquire from or to facilitate the acquisition or attempted acquisition from the Denied Person of any item subject to the Regulations that has been exported from the United States;
  4. Obtain from the Denied Person in the United States any item subject to the Regulations with knowledge or reason to know that the item will be, or is intended to be, exported from the United States; or
  5. Engage in any transaction to service any item subject to the Regulations that has been or will be exported from the United States and which is owned, possessed or controlled by the Denied Person, or service any item, of whatever origin, that is owned, possessed or controlled by the Denied Person if such service involves the use of any item subject to the Regulations that has been or will be exported from the United States. For purposes of this paragraph, servicing means installation, maintenance, repair, modification or testing.

Third, any licenses issued under the Regulations in which Zhu has an interest as of the date of this Order shall be revoked by BIS.

Fourth, that, after notice and opportunity for comment as provided in Section 766.23 of the Regulation, any person, firm, corporation, or business organization related to Zhu by affiliation, ownership, control, or position of responsibility in the conduct or trade or related services may also be made subject to the provisions of this Order.

Fifth, as authorized by Section 766.18(c) of the Regulations, the denial period shall be imposed and extended for a second year, but for that second year shall be suspended for a probationary period and shall thereafter be waived, provided that Zhu has not committed another violation of ECRA, the Regulations, or any order, license or authorization issued under ECRA or the Regulations. If Zhu commits another violation of ECRA, the Regulations, or any order, license or authorization issued under ECRA or the Regulations during the two-year period from the date of the Order the suspended portion of the Order may be modified or revoked by BIS pursuant to Section 766.17(c) of the Regulations. If the suspension of the denial is modified or revoked, BIS may extend the active denial period up to two-years from the date of the Order.

https://www.federalregister.gov/d/2023-23571

OCTOBER 2023 EXPORT CONTROL REGULATIONS UPDATES Read More »

SEPTEMBER 2023 EXPORT CONTROL REGULATIONS UPDATES

This newsletter is a listing of the latest changes in export control regulations through September 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/Executive Branch

Presidential Determination Issued Continuing the Sanctions in Cuba

September 18, 2023: 88 FR 64347: On September 13, the President extended for one year the exercise of certain authorities with respect to Cuba under the Trading with the Enemy Act, which was scheduled to expire on September 14, 2023. The president determined that the continuation of the exercise of those authorities with respect to Cuba for 1 year is in the national interest of the United States.

https://www.federalregister.gov/d/2023-20302

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Presidential Determination Issued Designating Major Drug Transit or Major Drug Illicit Countries

September 27, 2023: 88 FR 66673: The President issued a Presidential Determination, pursuant to the Foreign Relations Authorization Act, Fiscal Year 2003 (FRAA), identifying the following countries as major drug transit or major illicit drug producing countries: Afghanistan, The Bahamas, Belize, Bolivia, Burma, the People’s Republic of China (PRC), Colombia, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, India, Jamaica, Laos, Mexico, Nicaragua, Pakistan, Panama, Peru, and Venezuela.

A country’s presence on the foregoing list is not necessarily a reflection of its government’s counterdrug efforts or level of cooperation with the United States. Consistent with the statutory definition of a major drug transit or major illicit drug producing country set forth in sections 481(e)(2) and 481(e)(5) of the Foreign Assistance Act of 1961 (FAA), as amended, the reason countries are placed on the list is the combination of geographic, commercial, and economic factors that allow drugs to be transited or produced, even if a government has engaged in robust and diligent narcotics control and law enforcement measures.

The James M. Inhofe National Defense Authorization Act for Fiscal Year 2023 amended the definition of major drug source countries to include source countries of precursor chemicals used to produce illicit drugs significantly affecting the United States. For countries with large chemical and pharmaceutical industries, preventing precursor chemicals from being diverted to the production of illicit drugs is a particularly difficult challenge, including for the United States and other countries with strict regulatory regimes to prevent diversion. The People’s Republic of China (PRC) has been identified as a major source country due to this change in legislation, and the United States strongly urges the PRC and other chemical source countries to tighten chemical supply chains and prevent diversion.

Pursuant to section 706(2)(A) of the FRAA, the President designated Bolivia, Burma, and Venezuela as having failed demonstrably during the previous 12 months to both adhere to their obligations under the international counternarcotics agreements and to take the measures required by section 489(a)(1) of the FAA. The President also determined, in accordance with provisions of section 706(3)(A) of the FRAA, that United States programs that support Bolivia, Burma, and Venezuela are vital to the national interests of the United States.

https://www.federalregister.gov/d/2023-21378

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Department of State

DSCA Notifies Congress of Potential FMS Sale To Bulgaria

September 1, 2023: The State Department approved a possible Foreign Military Sale to the Government of the Republic of Bulgaria of Stryker Vehicles and related equipment for an estimated cost of $1.5 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale, which will support the foreign policy and national security objectives of the United States by helping to improve the security of a North Atlantic Treaty Organization ally. The proposed sale will improve Bulgaria’s rapid infantry deployment and force projection capability. Bulgaria will use this enhanced capability to strengthen its homeland defense and deter regional threats. Bulgaria will have no difficulty absorbing this equipment and services into its armed forces.

https://www.dsca.mil/press-media/major-arms-sales/bulgaria-stryker-vehicles

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DSCA Notifies Congress of Potential FMS Sale To Poland

September 12, 2023: The State Department made a determination approving a possible Foreign Military Sale to the Government of Poland of an Integrated Air and Missile Defense (IAMD) Battle Command System (IBCS) and related equipment for an estimated cost of $4.0 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale on September 11, 2023. The proposed sale will support the foreign policy goals and national security objectives of the United States by improving the security of a North Atlantic Treaty Organization Ally that is a force for political stability and economic progress in Europe. Further, this proposed sale will improve Poland’s missile defense capability and contribute to Poland’s goal of updating its military capability while further enhancing interoperability with the United States and other allies. Poland will have no difficulty absorbing this equipment into its armed forces.

https://www.dsca.mil/press-media/major-arms-sales/poland-integrated-air-and-missile-defense-iamd-battle-command-system-1

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DSCA Notifies Congress Of Potential FMS Sale To South Korea

September 13, 2023: The State Department made a determination approving a possible Foreign Military Sale to the Republic of Korea of F-35 Aircraft and related equipment for an estimated cost of $5.06 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale. The proposed sale will improve the Republic of Korea’s capability to meet current and future threats by providing credible defense capability to deter aggression in the region and ensure interoperability with U.S. forces. The proposed sale will augment the Republic of Korea’s operational aircraft inventory and enhance its air-to-air and air-to-ground self-defense capability. The Republic of Korea already has F-35s in its inventory and will have no difficulty absorbing these articles and services into its armed forces.

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

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DSCA Notifies Congress Of Potential FMS Sale To Poland

September 13, 2023: The State Department made a determination approving a possible Foreign Military Sale to the Government of Poland of F-16 Sustainment and related equipment for an estimated cost of $389 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale. The proposed sale will improve Poland’s capability to meet current and future threats by increasing the reliability of their F-16 fleet. Poland has purchased sustainment support for the F-16s in its inventory for many years and will have no difficulty absorbing these articles and services into its armed forces.

https://www.dsca.mil/press-media/major-arms-sales/poland-f-16-sustainment

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DSCA Notifies Congress Of Potential FMS Sale To Canada

September 15, 2023: The State Department made a determination approving a possible Foreign Military Sale to the Government of Canada of munitions and other systems to be integrated into MQ-9Bs for an estimated cost of $313.4 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.  The proposed sale will improve Canada’s capability to meet current and future threats by enabling unmanned surveillance and reconnaissance patrols of its northern arctic territories. It will also enable Canada to optimally fulfill its North American Aerospace Defense (NORAD) and NATO missions while increasing interoperability with U.S. and NATO forces. Canada will have no difficulty absorbing these articles and services into its armed forces.

https://www.dsca.mil/press-media/major-arms-sales/canada-mq-9b-integrated-systems

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DSCA Notifies Congress Of Potential FMS Sale To Kuwait

September 20, 2023:  The State Department made a determination approving a possible Foreign Military Sale to the Government of Kuwait of Repair and Recertification of Patriot Advanced Capability-3 Missiles and support for an estimated cost of $150 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale. The proposed sale will support the foreign policy and national security objectives of the United States by helping to improve the infrastructure of a Major Non-NATO ally that has been an important force for political stability and economic progress in the Middle East. It will also improve Kuwait’s capability to sustain their missile density and ensure readiness for air operations. Kuwait will use this capability as a deterrent to regional threats and to strengthen homeland defense. Kuwait will have no difficulty absorbing this infrastructure, support, and associated services into its armed forces.

https://www.dsca.mil/press-media/major-arms-sales/kuwait-repair-and-recertification-patriot-advanced-capability-3

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DSCA Notifies Congress Of Potential FMS Sale To Saudi Arabia

September 21, 2023: The State Department made a determination approving a possible Foreign Military Sale to the Kingdom of Saudi Arabia of Cooperative Logistics Supply Support Arrangement (CLSSA) Program, Foreign Military Sales Order (FMSO) II and related equipment for an estimated cost of $500 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale. This proposed sale will support U.S. foreign policy and national security objectives by supporting a strategic partner’s self-defense and promoting stability in the Middle East. It will also maintain Saudi Arabia’s capability to meet current and future threats by allowing the RSLF to continue to purchase needed spare/repair parts, through their current CLSSA program, to replenish in-country stocks required for general maintenance and sustain the operability of RSLF equipment. The RSLF has participated in the CLSSA program since 1965 and will have no difficulty absorbing these items into its armed forces.

https://www.dsca.mil/press-media/major-arms-sales/saudi-arabia-cooperative-logistics-supply-support-arrangement-clssa

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Department of State Lifts Defense Trade Restrictions on Cyprus

September 14, 2023: 88 FR 63016: On August 18, 2023, the Department of State, Directorate of Defense Trade Controls (DDTC) announced Secretary Blinken’s certification of the statutory requirements to lift the defense trade restrictions relating to the Republic of Cyprus (ROC) for Fiscal Year 2024. Accordingly, the Department has published a Federal Register notice amending § 126.1(r) of the International Traffic in Arms Regulations (ITAR), which continues the suspension of defense trade restrictions for the ROC and its status as a proscribed destination from October 1, 2023, through September 30, 2024.

https://www.federalregister.gov/d/2023-19851

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DDTC Issues New ITAR Compliance Risk Matrix

September 15, 2023: The Department of State, Directorate of Defense Trade Controls (DDTC) issued a new ITAR Compliance Risk Matrix, accompanied by a supplemental risk matrix specific to universities. These risk matrices are intended to assist organizations in assessing their level of ITAR compliance risk and assist in the evaluation of potential compliance risks that are specific to each organization and that, if left unaddressed, may lead to ITAR violations.  The new risk matrices are available for download on the DDTC website.

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=aff9e5101bd975102b6ca932f54bcbf7

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United States Hosts Inaugural Plenary Meeting on the Export Controls and Human Rights Initiative Voluntary Code of Conduct

September 15, 2023: The U.S. Department of State hosted the inaugural plenary meeting of Subscribing States to the voluntary Code of Conduct of the Export Controls and Human Rights Initiative (ECHRI) in Washington, D.C. on September 14-15. ECHRI was launched at the first Summit for Democracy in 2021 as part of the Presidential Initiative for Democratic Renewal.  ECHRI is a multilateral effort intended to counter state and non-state actors’ misuse of goods and technology to commit serious violations or abuses of human rights by using export controls in pursuit of national security interests.

The Code of Conduct released at the second Summit for Democracy in 2023 is the result of a U.S.-led effort to establish voluntary, nonbinding political commitments by Subscribing States to apply export controls in preventing the proliferation of goods, software, and technologies that could enable serious human rights abuses.

The plenary session marked the first in-person meeting of the 25 Subscribing States and non-government stakeholders to discuss implementation of the Code of Conduct and further integrate human rights criteria into export control regimes. The two-day event also focused on best practices for information sharing and efforts to strengthen consideration of human rights in export controls.

https://www.state.gov/the-united-states-hosts-inaugural-plenary-meeting-on-the-export-controls-and-human-rights-initiative-voluntary-code-of-conduct/

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DDTC Name And Address Changes Posted To Website

September 14 through 27, 2023: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at    

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

  • Change in name from Kratos RT Logic, Inc. to Kratos S1, Inc. due to corporate reorganization.
  • Change in name from GS Optics LLC to Gooch and Housego LLC due to acquisition.
  • Change in name from CTS-Nordic Aktiebolag to Cubic Technologies Sweden AB
  • Change in address for Milestone Aviation Group Limited, Vertical Aviation No 1 Limited, and Vertical Aviation No 2 Limited from Minerva House, 2nd Floor, Simmonscourt Road, Ballsbridge, Dublin, D04 H9P8, Ireland to Dolmen House, 3rd Floor, 4 Earlsfort Terrace, Dublin, D02 E024, Ireland.

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Department of Commerce, Bureau of Industry and Security

Commerce Amends the EAR Re: Transfer of Access Information and Release of Software (Source Code and Object Code)

September 18, 2023: The Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) to make a technical correction that also serves to clarify provisions of the EAR pertaining to the release of “software” as set out in the sections on release and transfer of access information. This final rule clarifies an ambiguity in the EAR by adding a cross-reference addressing transfer of access information in the section on releases of “technology” and “software,” as was originally intended. In addition, the final rule adds a clarifying note that, for purposes of transfer of access information, a release of “software” includes both source code and object code.

https://www.bis.doc.gov/index.php/component/docman/?task=doc_download&gid=3331

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Commerce Adds Seven HTS Codes and Updates the High Priority List of Critical Items Required by Russia for Its War Effort

September 19, 2023: The Department of Commerce’s Bureau of Industry and Security (BIS) announced important updates to its list of controlled “common high priority” items identified as critical to Russia’s war effort following productive meetings with key members of the Global Export Control Coalition. BIS has added seven new Harmonized System (HS) codes to the list, including bearings needed for heavy vehicles or other machinery and antennae used for navigation systems. Most of these HTS codes in the list require prior approval for export. Additionally, Tier 3 has been divided into mechanical and non-mechanical items to provide greater clarity. As published in BIS’ previous guidance involving the nine HS codes in Tiers 1 and 2 of highest priority, exporters and reexporters are strongly encouraged to conduct due diligence when encountering the listed HS codes to identify possible third-party intermediaries and attempts at evasion of U.S. export controls.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3332-2023-09-14-bis-press-release-quad-meeting-hs-code-update-final/file

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United States-Australia-Canada-New Zealand-United Kingdom Release Joint Guidance on Countering Russian Evasion

September 26, 2023: As a follow-up to the establishment of the “Export Enforcement Five” or “E5” partnership to coordinate on export control enforcement issues in June 2023, the governments of Australia, Canada, New Zealand, the United Kingdom, and the United States issued joint guidance to industry and academia identifying high priority items critical to Russian weapons systems and urging specific actions to prevent diversion of these items to Russia through third countries. Since February 24, 2022, BIS has implemented a series of stringent export controls that restrict Russia’s access to the technologies and other items that it needs to sustain its illegal war in Ukraine. These controls target Russia’s defense, aerospace, and maritime sectors, and have been expanded to Russia’s oil refining, industrial, and commercial sectors, as well as to luxury goods used by Russian elites. BIS’s controls have also been applied to Belarus for its substantial enabling of Russia’s invasion and have been continually updated to align with GECC allies and partners, which include the E5.

https://www.bis.doc.gov/index.php/component/docman/?task=doc_download&gid=3337

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

Reminder to file the 2023 Annual Report of Blocked Property

September 22, 2023: On July 3, 2023, the Office of Foreign Assets Control (OFAC) issued a recent actions notice, reminding holders of property blocked pursuant to OFAC sanctions regulations published in Chapter V of Title 31 of the Code of Federal Regulations (C.F.R.) of the requirement to provide OFAC with an Annual Report of Blocked Property (ARBP).  Persons subject to this reporting requirement must submit a comprehensive report, as outlined in 31 C.F.R. § 501.603 of the Reporting, Procedures and Penalties Regulations (RPPR), of all blocked property held as of June 30 of the current year by September 30.

The annual reports must be filed using the mandatory spreadsheet form TD-F 90-22.50.  Completed forms should be sent to ofacreport@treasury.gov or filed through the OFAC Reporting System (ORS).  Failure to submit a required ARBP by September 30 constitutes a violation of the RPPR.

https://ofac.treasury.gov/recent-actions/20230922

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International Organizations

New WTO Publication Provides Insights into The World of Export Regulations and Controls

September 15, 2023: A new WTO publication explores for the first time how the different national export-related frameworks developed beyond the WTO operate in practice and how they are linked to the multilateral trading system. “The book is intended to serve as a guide for policymakers, government officials, academia and members of the public with an interest in the areas covered,” said Suja Rishikesh Mavroidis Director of the WTO’s Market Access Division, in a foreword to the publication. “By fostering a better understanding of the existing international agreements regulating exports and how they link to the multilateral trading system, the WTO can help to strengthen global cooperation, promote transparency and perhaps even inspire future agreements seeking to strike a balance between advancing international trade and protecting the global community against potential risks”, she said.

In terms of the products affected by export-related measures, the publication notes that chemical products are the most frequently affected, followed by optical and measuring instruments, and different types of machinery and pharmaceuticals.  The “General Exceptions” provision under Article XX of the General Agreement on Tariffs and Trade was the most frequently cited WTO basis for the export-related QRs — 73 per cent of the total — with paragraph (b) of Article XX regarding measures “necessary to protect human, animal or plant life or health” cited in 38 per cent of the export measures.

https://www.wto.org/english/news_e/news23_e/pf23_15sep23_e.htm

LATEST SANCTIONS FINES & PENALTIES

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

Sanctions

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

September 25, 2023: The Commerce Department’s Bureau of Industry and Security (BIS) released a rule adding 28 entities to the Entity List, 11 of which are based in the People’s Republic of China (China), 5 in Russia, 5 in Pakistan, along with others located in Finland, Oman, Germany, and the United Arab Emirates (UAE). The entities listed in action were added to the Entity List for having been involved, being involved, or posing a significant risk of being or becoming involved in activities contrary to the national security or foreign policy of the United States. Among those entities listed, nine entities under the destinations of China, Finland, Germany, and Russia have been implicated in a conspiracy to violate U.S. export controls, including a scheme to supply the Special Technology Center, an entity on the BIS Entity List, with components to make unmanned aerial vehicles (UAVs) for Russia’s Main Intelligence Directorate of the General Staff (GRU).

China

  • Asia Pacific Links Ltd.;
  • Guilin Alpha Rubber & Plastics Technology Company Limited;
  • Hangzhou Fuyang Koto Machinery Company Limited;
  • Nanjing Institute of Astronomical Optics and Technology;
  • Raven International Trade Limited;
  • S&C Trade PTY Company Limited;
  • Shenzhen Caspro Technology Company Limited;
  • Speed Business Trading (HK) Ltd.;
  • Sunrising Logistics (HK) Ltd.;
  • Well Fair International (Hong Kong) Ltd.;
  • Yun Xia Yuan.

Finland

  • Evelog Oy;
  • Luminor Oy;
  • Siberica Oy.

Germany

  • ICW-Industrial Components Weirich.

Oman

  • International Smart Digital Interface Company (ISDIC);
  • Moaz Ahmed Mohammed al-Haifi.

Pakistan

  • AHD International;
  • Genesis Technical Consultancy;
  • Indus Tooling Solution;
  • Longford Engineering (Pvt) Ltd.;
  • Polymaster Engineering.

Russia

  • Device Consulting;
  • Grant Instrument;
  • SMT-iLogic;
  • Streloy;
  • VSMPO–AVISMA Corporation PJSC.

United Arab Emirates

  • New Era Enterprises FZE.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3335-2023-09-25-bis-release-28-entity-list-additions/file

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

September 6, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Abdelrahim Hamdan Dagalo (Abdelrahim) for his leadership of the Rapid Support Forces (RSF), an entity whose members have engaged in acts of violence and human rights abuses, including the massacre of civilians, ethnic killings, and use of sexual violence. Since the beginning of conflict between the RSF and Sudanese Armed Forces (SAF) on April 15, 2023, both sides have failed to implement a ceasefire, and the RSF and allied militias have been credibly accused of extensive human rights abuses in Darfur and elsewhere.

Abdelrahim is a high-ranking leader in the RSF and the brother of RSF Commander Lieutenant General Mohamed Hamdan Dagalo. Abdelrahim is being designated pursuant to Executive Order 14098 for being a foreign person who is or has been a leader, official, senior executive officer, or member of the board of directors of the RSF, an entity that has, or whose members have, engaged in actions or policies that threaten the peace, security, or stability of Sudan relating to the tenure of such leader, official, senior executive officer, or member of the board of directors. Abdelrahim is also being designated for being a foreign person who is or has been a leader, official, senior executive officer, or member of the board of directors of the RSF, an entity that has, or whose members have, engaged in the targeting of women, children, or any other civilians through the commission of acts of violence (including killing, maiming, torture, or rape or other sexual violence), abduction, forced displacement, or attacks on schools, hospitals, religious sites, or locations where civilians are seeking refuge, or through conduct that would constitute a serious abuse or violation of human rights or a violation of international humanitarian law relating to the tenure of such leader, official, senior executive officer, or member of the board of directors.

Treasury Sanctions Sudanese Paramilitary Leader | U.S. Department of the Treasury

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September 7, 2023: The United States, in coordination with the United Kingdom, sanctioned eleven individuals who are part of the Russia-based Trickbot cybercrime group. Russia has long been a safe haven for cybercriminals, including the Trickbot group. This action was taken by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC). The U.S. Department of Justice (DOJ) is concurrently unsealing indictments against nine individuals in connection with the Trickbot malware and Conti ransomware schemes, including seven of the individuals designated here.

The sanctions target key actors involved in management and procurement for the Trickbot group, which has ties to Russian intelligence services and has targeted the U.S. Government and U.S. companies, including hospitals. During the COVID-19 pandemic, the Trickbot group targeted many critical infrastructure and health care providers in the United States.

Trickbot, first identified in 2016 by security researchers, was a trojan virus that evolved from the Dyre trojan. Dyre was an online banking trojan operated by Moscow-based individuals who began targeting non-Russian businesses and entities in mid-2014. Dyre and Trickbot were developed and operated by a group of cybercriminals to steal financial data from targets outside of Russia. The Trickbot trojan infected millions of victim computers worldwide, including those of U.S. businesses and individuals. It has since evolved into a highly modular malware suite that provides the Trickbot group the ability to conduct a variety of malicious cyber activities, including ransomware. During the height of the COVID-19 pandemic in 2020, the Trickbot group launched a wave of ransomware disruptions against hospitals and other healthcare centers across the United States. In one instance, the Trickbot group deployed ransomware against three Minnesota medical facilities, disrupting their computer networks and telephones, and causing a diversion of ambulances. Members of the Trickbot group publicly gloated over the ease of targeting the medical facilities and the speed with which ransoms had been paid to the group. Members of the Trickbot group are associated with Russian intelligence services. The Trickbot group’s preparations in 2020 aligned them to Russian state objectives and actions taken by the Russian intelligence services. This included targeting the U.S. Government and U.S. companies. The following individuals have been named:

  • Andrey Zhuykov
  • Maksim Galochkin
  • Maksim Rudenskiy
  • Mikhail Tsarev. Tsarev is also known by the monikers Mango, Alexander Grachev, Super Misha, Ivanov Mixail, Misha Krutysha, and Nikita Andreevich Tsarev.
  • Dmitry Putilin. Putilin is also known by the online monikers Grad and Staff.
  • Maksim Khaliullin. Khaliullin is also known by the online moniker Kagas.
  • Sergey Loguntsov
  • Vadym Valiakhmetov. Valiakhmetov is known by the online monikers Weldon, Mentos, and Vasm.
  • Artem Kurov. Artem Kurov is also known by the online moniker Naned.
  • Mikhail Chernov. Chernov is also known by the online moniker Bullet.
  • Alexander Mozhaev. Mozhaev is known by the online monikers Green and Rocco.

OFAC designated each of these individuals pursuant to Executive Order (E.O.) 13694, as amended by E.O. 13757, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, an activity described in subsection (a)(ii) of section 1 of E.O. 13694, as amended.

https://home.treasury.gov/news/press-releases/jy1714

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September 12, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), in coordination with the Drug Enforcement Administration, designated key Hizballah operatives and financial facilitators in South America and Lebanon. This action includes Amer Mohamed Akil Rada (Amer), who in addition to his role as a senior Hizballah operative, was one of the operational members of Hizballah who carried out the terrorist attack against the Asociacion Mutual Israelita Argentina (AMIA) in Argentina in 1994 that killed 85 people. Amer and his associates manage a commercial enterprise for Hizballah, including charcoal exports to Lebanon. This action targets seven key individuals and entities in this network that generates revenue for Hizballah’s terrorist activities and enables the terrorist group’s presence and nefarious activities in Latin America. Since its inception, Hizballah has established an extensive global infrastructure that includes commercial activities that allow Hizballah operatives to travel freely, strategically case targets, and transfer materials and funds.

  • Amer Mohamed Akil Rada.
  • Samer Akil Rada (Samer)
  • Mahdy Akil Helbawi (Helbawi).
  • Zanga S.A.S.
  • Ali Ismail Ajrouch
  • Black Diamond SARL
  • A.S.

https://home.treasury.gov/news/press-releases/jy1726

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September 14, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is imposing nearly 100 individual sanctions on Russian elites and Russia’s industrial base, financial institutions, and technology suppliers as the United States continues to leverage sanctions and economic restrictions to undermine Russia’s capacity to wage its war against Ukraine, as described below. The following individuals have been named:

  • Andrei Removich Bokarev (Bokarev)
  • Olga Vladimirovna Syrovatskaya (Syrovatskaya)
  • Transmashholding JSC (Transmash)
  • Iskandar Kakhramonovich Makhmudov (Makhmudov)
  • Dzhakhangir Iskandarovich Makhmudov (Dzhakhangir).
  • Open Joint Stock Company Aero Engine Scientific and Technical Complex Soyuz (Soyuz)
  • Open Joint Stock Company Balashikhinskiy Liteyno Mekhanicheskiy Zavod (Balashikha)
  • Mkrtich Okroevich Okroyan (Mkrtich)
  • Aleksei Yurievich Krivoruchko (Krivoruchko)
  • Joint Stock Company Gavrilov Yam Machine Building Plant Agat (Agat)
  • Joint Stock Company Star (JSC Star)
  • Joint Stock Company Mechanical Engineering Research Institute (NIMI)
  • Aktsionernoe Obshchestvo Ulyanovskii Patronnyi Zavod (Ulyanovsk Cartridge Works)

OFAC is also designating a Finland-based network that specializes in shipping foreign electronics to Russia-based end-users. Finland-based logistics firms Siberica Oy (Siberica) and Luminor Oy (Luminor) have sent a wide variety of electronics into Russia, including UAV cameras, high-performance optical filters, and lithium batteries. French national Gabriel Temin is Siberica’s owner, managing director, and a member of Siberica’s board of directors and Estonian national Catherine Esther Temin is a deputy board member of Siberica.

  • Gabriel Temin
  • Catherine Esther Temin

The following Russia-based entities were importing directly from Luminor:

  • Flytechgroup Limited Liability Company (Flytechgroup)
  • OOO NPK Fotonika Limited Liability Company (NPK Fotonika)
  • Globaltrans Limited (Globaltrans)
  • Limited Liability Company Aservice (Aservice)
  • OOO Mayak (Mayak)

OFAC is also targeting two entities based in Turkey. Russia continues to rely on third-country entities to keep importing much-needed dual-use goods to enable its unprovoked war of aggression on Ukraine. The U.S. Department of the Treasury has repeatedly raised the issue of the shipment or transshipment of dual-use goods to Russia with the Government of Turkey and the Turkish private sector. They are:

  • Margiana Insaat Dis Ticaret Limited Sirketi (Margiana)
  • Demirci Bilisim Ticaret Sanayi Limited Sirketi (Demirci)

OFAC also designated the owner and director of previously designated Russia-based entity Limited Liability Company AK Microtech (AKM), Russian national Andrei Rostislavovich Khokhlun (Khokhlun), as well as two companies owned by Khokhlun: Russia-based Limited Liability Company Keko R (Keko R) and Slovenia-based Arktec Tehnologije na Podrocju Elektronike doo (Arktec).

OFAC also designated the following Russia-based entities were designated pursuant to E.O. 14024 for operating or having operated in the electronics, technology, manufacturing, construction, and/or financial services sector of the Russian Federation economy:

  • OOO Enkor Grupp
  • Nauchno Proizvodstvennoe Predpiyatie Itelma
  • OOO Makro Grupp
  • Limited Liability Company Streloi
  • Vertikal Limited (Vertikal)
  • OOO VMK (VMK)
  • OOO Aiti Tsentr
  • Limited Liability Company Baltinfokom
  • OOO Bitteriya
  • Eastern Trade Limited Liability Company
  • Joint Stock Company Echelon Union for Science and Development
  • Limited Liability Company Inforion
  • Obshchestvos Ogranichennoi Otvetstvennostyu Inforser Inzhiniring
  • Intech Engineering LTD
  • Joint Stock Company Kraftway Corporation PLS (Kraftway)
  • Limited Liability Company Kvarta VK
  • OOO Lanprint
  • OOO Novyi Ai Ti Proekt
  • Aktsionernoe Obshchestvo Pluton
  • Federal State Unitary Enterprise Rostov on Don Research Institute of Radio Communications’s (RNIIRS)
  • Joint Stock Company Signaltek
  • Silkway Limited Liability Company
  • OOO Solar Sekyuriti (Solar Security)
  • Limited Liability Company Status Complains
  • Svetlana Rost Joint Stock Company (Svetlana Rost)
  • Joint Stock Company Special Economic Zone Technopolis Moscow (Technopolis Moscow)
  • OOO Trialkom
  • Limited Liability Company Tribit
  • OOO Vneshekostil
  • Aktsionernoe Obshchestvo Taskom
  • Joint Stock Company Avtovaz
  • Gaz Group
  • Joint Stock Company HMS Group
  • Kirovsky Zavod Public Joint Stock Company
  • Kriogenmash OAO (Kriogenmash)
  • Joint Stock Company Moscow Automotive Factory Moskvich
  • JSC Power Machines (Power Machines)
  • Publichnoe Aktsionernoe Obschestvo Sollers
  • Limited Liability Company Machine Building Plant Tonar
  • Joint Stock Company United Metallurgical Company (OMK)
  • Open Joint Stock Company Tikhoretsk Machine Construction Plant V.V. Vorovsky
  • Aktsionernoe Obshchestvo BashVzryvTekhnologii (BVT)
  • Limited Liability Company Gazprom Nedra (Gazprom Nedra)
  • Joint Stock Company Gazstroyprom (Gazstroyprom)
  • Velesstroi Limited Liability Company (Velesstroi)
  • JSC AGD Diamonds (AGD Diamonds)
  • Vitalij Victorovich Perfilev (Perfilev)
  • Joint Stock Commercial Bank Ak Bars Public Joint Stock Company (Ak Bars Bank)
  • Obshchestvo s Ogranichennoi Otvetstvennostyu Kommercheski Bank Sinko Bank (Sinko Bank)
  • Katarzyna Ewa Pawlowska Hanafin (Pawlowska)
  • Obshchestvo S Ogranichennoi Otvetstvennostyu A1 (A1)
  • KSK Group (KSK)

https://home.treasury.gov/news/press-releases/jy1731

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September 14, 2023: OFAC issued Russia-Related General License 55A: “Authorizing Certain Services Related to Sakhalin-2”

All transactions prohibited by the determination of November 21, 2022 made pursuant to section 1(a)(ii) of Executive Order 14071 (“Prohibitions on Certain Services as They Relate to the Maritime Transport of Crude Oil of Russian Federation Origin”) related to the maritime transport of crude oil originating from the Sakhalin-2 project (“Sakhalin-2 byproduct”) are authorized through 12:01 a.m. eastern daylight time, June 28, 2024, provided that the Sakhalin-2 byproduct is solely for importation into Japan.

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

Effective September 14, 2023, General License No. 55, dated November 22, 2022, is replaced and superseded in its entirety by this General License No. 55A.

https://ofac.treasury.gov/media/932136/download?inline

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September 14, 2023: OFAC issued Russia-Related General License 72: “Authorizing the Wind Down of Transactions Involving Certain Entities Blocked on September 14, 2023”

All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of any transaction involving one or more of the following blocked persons (collectively, the “Blocked Entities”) are authorized through 12:01 a.m. eastern standard time, December 13, 2023, provided that any payment to a Blocked Entity is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR):

  • Joint Stock Company Russian Copper Company;
  • Joint Stock Company United Metallurgical Company;
  • Transmashholding JSC;
  • Joint Stock Company Avtovaz;
  • Joint Stock Company Moscow Automotive Factory Moskvich;
  • Limited Liability Company Machine Building Plant Tonar;
  • Publichnoe Aktsionernoe Obschestvo Sollers;
  • Arctic Transshipment Limited Liability Company; or
  • Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.

This general license does not authorize:

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;

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

Any transactions otherwise prohibited by the RuHSR, including transactions involving any person blocked pursuant to the RuHSR other than the Blocked Entities described in this general license, unless separately authorized.

https://ofac.treasury.gov/media/932131/download?inline

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September 15, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 29 individuals and entities in connection with the Iranian regime’s violent suppression of nationwide protests following the death of Mahsa “Zhina” Amini in custody of its ‘Morality Police,’ and the regime’s continued efforts to detain dissenting voices and restrict access to a free and open internet. OFAC’s action targets: 18 key members of the regime’s security forces, the Islamic Revolutionary Guard Corps (IRGC) and the Law Enforcement Forces (LEF); the head of Iran’s Prisons Organization; three individuals and one company in connection with the regime’s systematic censorship and blocking of access to the internet; and three IRGC and regime-controlled media outlets––Fars News, Tasnim News and Press TV––and three senior officials.

Concurrently, the Department of State is imposing visa restrictions on 13 Iranian officials and other individuals for their involvement in the detention or killing of peaceful protestors or inhibiting their rights to freedom of expression or assembly, including through censorship via a country-wide internet shutdown in Iran. Since Mahsa Amini’s death and the protests that followed, the Department of State has imposed visa restrictions on 40 Iranian officials and other individuals for their involvement in acts targeting peaceful protestors.

  • Saeed Montazerolmehdi (Montazerolmehdi)
  • Hossein Amjadian (Amjadian)
  • Alaaddin Aykut (Aykut)
  • Abbasali Mohammadian (Mohammadian)
  • Hassan Shahrestani (Shahrestani)
  • Ahmad Taheri (Taheri)
  • Ahmad Naderian (Naderian)
  • Seyyed Khalil Safavi (Safavi)
  • Delavar Alghasi-Mehr (Alghasi-Mehr)
  • Mohammad Mozzami Goudarzi (Goudarzi)
  • Roham Bakhsh Habibi (Habibi)
  • Khodarahm Sarani (Sarani)
  • Mazaher Majidi (Majidi)
  • Bahman Reyhani (Reyhani)
  • Jamal Shakarami (Shakarami)
  • Mohammad Abdollahpour (Abdollahpour)
  • Gholamhossein Gheib-Parvar (Gheib-Parvar)
  • Ali Akbar Pourjamshidian (Pourjamshidian)
  • Abdolreza Abedzadeh (Abedzadeh)
  • Gholamali Mohammadi (Mohammadi)
  • Alireza Abedinejad
  • Yaftar Pazhohan Pishtaz Rayanesh (Yaftar)
  • Press TV
  • Tasnim News Agency (Tasnim)
  • Fars News Agency

https://home.treasury.gov/news/press-releases/jy1733

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September 18, 2023: The U.S. government announced the establishment of a humanitarian channel in Qatar (HC) to further facilitate the flow of humanitarian assistance to the people of Iran consistent with the U.S. government’s longstanding support for humanitarian trade.  Similar to humanitarian channels established under previous administrations, the HC is designed to support the Iranian people’s access to food, agricultural goods, medicine, and medical devices under stringent due diligence measures that guard against money laundering, misuse, and evasion of U.S. sanctions.  The HC does not lift any U.S. sanctions on Iran, and the U.S. government continues to impose sanctions on Iran’s malign activity, including in response to Iran’s weapons proliferation and its support for international terrorism.  To that end, OFAC added secondary sanctions on the Iranian Ministry of Intelligence and Security.

The following individual has been added to the OFAC SDN List:

  • Mahmoud Ahmadinejad

https://ofac.treasury.gov/recent-actions/20230918

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September 19, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned seven individuals and four entities based in Iran, the People’s Republic of China (PRC), Russia, and Turkey in connection with Iran’s unmanned aerial vehicle (UAV) and military aircraft development. This network has facilitated shipments and financial transactions in support of the U.S.-designated Iran Aircraft Manufacturing Industrial Company’s (HESA’s) UAV and military aircraft production, procurement, and maintenance activities. This action builds on OFAC’s March 9, 2023 designation of five PRC-based companies and one individual responsible for the sale and shipment of thousands of aerospace components, including those with UAV applications, to HESA.

 

Iran

  • HESA
  • Mehdi Gogerdchian (Gogerdchian)

China

  • Shenzhen Jiasibo Technology Co., Ltd. (Shenzhen Jiasibo)
  • Dong Wenbo (Dong)

Russia

  • Delta-Aero Technical Service Center LLC (Delta-Aero)

Turkey

  • Mehmet Tokdemir (Tokdemir)
  • Alaaddin Aykut (Aykut)

https://home.treasury.gov/news/press-releases/jy1745

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September 26, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 10 individuals, including several Sinaloa Cartel affiliates and fugitives, pursuant to Executive Order (E.O.) 14059. Those sanctioned operate under the Los Chapitos faction of Mexico’s Sinaloa Cartel. Responsible for a significant portion of the illicit fentanyl and other deadly drugs trafficked into the United States, the Sinaloa Cartel is one of the world’s most damaging transnational criminal organizations. Additionally, OFAC sanctioned the leader of the Clan del Golfo, one of Colombia’s largest criminal enterprises that controls most of the country’s cocaine cultivation, production, and transportation routes.

  • Jorge Humberto Figueroa Benitez
  • Leobardo Garcia Corrales
  • Martin Garcia Corrales
  • Liborio Nunez Aguirre
  • Samuel Leon Alvarado
  • Carlos Mario Limon Vazquez
  • Mario Alberto Jimenez Castro (Jimenez Castro)
  • Julio Cesar Dominguez Hernandez (Dominguez Hernandez)
  • Jesus Miguel Vibanco Garcia (Vibanco Garcia)
  • Jobanis de Jesus Avila Villadiego (Avila Villadiego)

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September 27, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned five entities and two individuals based in Iran, the People’s Republic of China (PRC), Hong Kong, Turkey, and the United Arab Emirates (UAE) involved in the procurement of sensitive parts for Iran’s one-way attack unmanned aerial vehicle (UAV) program. This network has facilitated shipments and financial transactions in support of the Islamic Revolutionary Guard Corps Aerospace Force Self Sufficiency Jihad Organization’s (IRGC ASF SSJO) procurement of servomotors, a critical component used in Iran’s Shahed-series UAVs. Iran has been supplying Russia with Shahed-136 UAVs to support Russia’s illegal invasion of Ukraine. One of the servomotors procured by the network designated was recovered in the remnants of a Russia-operated Shahed-136 that was recently shot down in Ukraine.

Iran

  • Pishgam Electronic Safeh Company (PESC)
  • Hamid Reza Janghorbani (Janghorbani)

Hong Kong

  • Hongkong Himark Electron Model Limited (Hongkong Himark)

People’s Republic of China

  • Fan Yang (Fan)

Turkey

  • Dal Enerji Madencilik Turizm Sanayi Ve Ticaret Anonim Sirketi (Dal Enerji)
  • Anka Port Ic Ve Dis Ticaret INSAAT Lojistik Sanayi Limited Sirketi (Anka Port)

United Arab Emirates

  • Farhad Ghaedi Goods Wholesalers LLC (Farhad Ghaedi)

https://home.treasury.gov/news/press-releases/jy1766

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September 28, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) targeted two entities and one individual for their role in undermining the peace, security, and stability of Sudan. Since the Sudanese people peacefully ousted Omar al-Bashir in April 2019, various actors, including the individual being designated, have taken steps to undermine Sudan’s efforts to establish civilian, democratic governance. His actions have obstructed efforts to reach a ceasefire to end the current conflict between the Sudanese Armed Forces (SAF) and the Rapid Support Forces (RSF), and opposed Sudanese civilian efforts to resume Sudan’s stalled democratic transition. The two entities designated in this action are RSF-affiliated companies generating revenue from, and contributing to, the conflict in Sudan.

  • Ali Karti (Karti)
  • GSK Advance Company Ltd (GSK)
  • Aviatrade LLC

https://home.treasury.gov/news/press-releases/jy1769

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Fines and Penalties

BIS Imposes Penalty Against Pratt & Whitney Component Solutions to Resolve 13 Alleged Violations of the Antiboycott Regulations

September 7, 2023: The Department of Commerce’s Bureau of Industry and Security (BIS) imposed a civil penalty of $48,750 against Pratt & Whitney Component Solutions, Inc (PWCS), located in Muskegon, Michigan, to resolve 13 violations of the antiboycott provisions of the Export Administration Regulations (EAR) (antiboycott regulations), as alleged in BIS’s Proposed Charging Letter. PWCS voluntarily disclosed the conduct to BIS, cooperated with the investigation by BIS’s Office of Antiboycott Compliance (OAC), and took remedial measures after discovering the conduct at issue, all of which resulted in a significant reduction in penalty.

As part of the settlement with BIS, PWCS admitted to the conduct set forth in the Proposed Charging Letter, which alleged 13 violations of Section 760.5 of the EAR (Failing to Report the Receipt of a Request to Engage in a Restrictive Trade Practice or Foreign Boycott Against a Country Friendly to the United States). Specifically, between May 2019 and March 2020, on thirteen occasions, PWCS received a request from Qatar Airways, a customer in Qatar, to refrain from importing Israeli-origin goods into Qatar in fulfillment of purchase orders from Qatar Airways. PWCS failed to report to BIS the receipt of these requests, as required by Section 760.5 of the Regulations.

These BIS actions were taken under the authority of the Anti-Boycott Act of 2018, a subpart of the Export Control Reform Act of 2018, and its implementing regulations, the EAR. The antiboycott provisions set forth in Part 760 of the EAR discourage, and in certain circumstances prohibit, U.S. persons from taking certain actions in furtherance or support of a boycott maintained by a foreign country against a country friendly to the United States (an unsanctioned foreign boycott). In addition, U.S. persons must report to OAC their receipt of certain boycott-related requests. Reports may be filed electronically or by mail on form BIS 621-P for single transactions or on form BIS 6051P for multiple transactions involving boycott requests received in the same calendar quarter. U.S. persons located in the U.S. must postmark or electronically date stamp their reports by the last day of the month following the calendar quarter in which the underlying request was received. For U.S. persons located outside the U.S., the postmark or date stamp deadline is the last day of the second month following the calendar quarter in which the request was received.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3330-09-07-antiboycott-penalty-pr-final/file

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Justice Department Announces First Criminal Resolution Involving the Illicit Sale and Transport of Iranian Oil in Violation of U.S. Sanctions

September 8, 2023: The Justice Department announced the successful disruption of a multimillion-dollar shipment of crude oil by the Islamic Revolutionary Guard Corps (IRGC), a designated foreign terrorist organization, that was bound for another country. This is the first-ever criminal resolution involving a company that violated sanctions by facilitating the illicit sale and transport of Iranian oil and comes in concert with a successful seizure of over 980,000 barrels of contraband crude oil.

The contraband cargo is now the subject of a civil forfeiture action in the U.S. District Court for the District of Columbia. The United States’ forfeiture complaint alleges that the oil aboard the vessel is subject to forfeiture based on U.S. terrorism and money laundering statutes.

The complaint alleges a scheme involving multiple entities affiliated with Iran’s IRGC and the IRGC-Qods Force (IRGC-QF) to covertly sell and transport Iranian oil to a customer abroad. Participants in the scheme attempted to disguise the origin of the oil using ship-to-ship transfers, false automatic identification system reporting, falsified documents and other means. The complaint further alleges that the charterer of the vessel used the U.S. financial system to facilitate the transportation of Iranian oil.

The complaint further alleges that the oil constitutes the property of, or provided a “source of influence” over, the IRGC and the IRGC-QF, both of which have been designated by the United States as foreign terrorist organizations, and that the oil facilitated money laundering. The documents allege that profits from oil sales support the IRGC’s full range of malign activities, including the proliferation of weapons of mass destruction and their means of delivery, support for terrorism and both domestic and international human rights abuses.

Funds successfully forfeited with a connection to a state sponsor of terrorism may in whole or in part be directed to the U.S. Victims of State Sponsored Terrorism Fund.

https://www.justice.gov/opa/pr/justice-department-announces-first-criminal-resolution-involving-illicit-sale-and-transport

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September 12, 2023: 88 FR 62534: Ruben Beltran Pedroza (“Pedroza”) was convicted of violating 18 U.S.C. 554(a) on November 3, 2022, in the U.S. District Court for the Western District of Texas. Specifically, Pedroza was convicted of smuggling a Smith & Wesson M&P Shield .40 pistol from the United States to Mexico. As a result of his conviction, the Court sentenced Pedroza to 34 months of confinement, with credit for time served, three years of supervised release and a $100 assessment. BIS received notice of Pedroza’s conviction for violating 18 U.S.C. 554. As provided in section 766.25 of the Export Administration Regulations, BIS provided notice and opportunity for Pedroza to make a written submission to BIS. BIS has not received a written submission from Pedroza. The Bureau of Industry and Security has decided to deny Pedroza’s export privileges under the Regulations for a period of five years from the date of Pedroza’s conviction. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Pedroza had an interest at the time of his conviction.

https://www.federalregister.gov/d/2023-19678

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September 12, 2023: 88 FR 62535: Jonathan Santiago (“Santiago”) was convicted of violating 18 U.S.C. 554(a) on October 25, 2022, in the U.S. District Court for the Western District of Texas. Specifically, Santiago was convicted of smuggling a Smith & Wesson M&P Shield .40 pistol from the United States to Mexico. As a result of his conviction, the Court sentenced Santiago to 42 months of confinement, with credit for time served and three years of supervised release. BIS received notice of Santiago’s conviction for violating 18 U.S.C. 554. As provided in section 766.25 of the Export Administration Regulations, BIS provided notice and opportunity for Santiago to make a written submission to BIS. BIS has not received a written submission from Santiago. The Bureau of Industry and Security has decided to deny Santiago’s export privileges under the Regulations for a period of seven years from the date of Santiago’s conviction. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Santiago had an interest at the time of his conviction.

https://www.federalregister.gov/d/2023-19679

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September 12, 2023: 88 FR 62536: Nicholas Ayala (“Ayala”) was convicted of violating 18 U.S.C. 371 and 18 U.S.C. 554 on November 16, 2022, in the U.S. District Court for the Southern District of Florida. Specifically, Ayala was convicted of conspiring to smuggle various handguns and firearms from the United States to Ecuador. As a result of his conviction, the Court sentenced him to 36 months in prison, three years of supervised release, and a $400 special assessment.  BIS received notice of Ayala’s conviction for violating 18 U.S.C. 371 and 18 U.S.C. 554. As provided in section 766.25 of the Export Administration Regulations, BIS provided notice and opportunity for Ayala to make a written submission to BIS. BIS has not received a written submission from Ayala. The Bureau of Industry and Security has decided to deny Ayala’s export privileges under the Regulations for a period of 10 years from the date of Ayala’s conviction. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Ayala had an interest at the time of his conviction.

https://www.federalregister.gov/d/2023-19680

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September 12, 2023: 88 FR 62533: Peter Sotis (“Sotis”) was convicted of violating 18 U.S.C. 371, the International Emergency Economic Powers Act (50 U.S.C 1701, et seq.) (“IEEPA”) and 18 U.S.C. 554 on January 12, 2022, in the U.S. District Court for the Southern District of Florida. Specifically, Sotis was convicted of conspiring to export, exported and attempted to export and smuggling four (4) rEvo III rebreathers from the United States to Libya without the required license or written approval. As a result of his conviction, the Court sentenced him to 57 months in prison, three years of supervised release and a $300 special assessment. BIS received notice of Sotis conviction for violating 18 U.S.C. 371, IEEPA and 18 U.S.C 554. As provided in section 766.25 of the Export Administration Regulations, BIS provided notice and opportunity for Sotis to make a written submission to BIS. BIS received and considered a written submission from Sotis. The Bureau of Industry and Security has decided to deny Sotis’s export privileges under the Regulations for a period of 10 years from the date of Sotis’s conviction. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Sotis had an interest at the time of his conviction.

https://www.federalregister.gov/d/2023-19681

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September 14, 2023: A federal jury has convicted Jalal Hajavi of conspiring to violate the International Emergency Economic Powers Act (“IEEPA”) and the Iranian Transactions and Sanctions Regulations (“ITSR”), smuggling goods from the United States, unlawfully exporting and reexporting goods from the U.S. to Iran without a license, and unlawfully engaging in transactions and dealings based on his participation in a scheme to unlawfully export heavy equipment from the U.S. to Iran by routing the shipments though the United Arab Emirates.

https://www.justice.gov/usao-ndga/pr/virginia-man-convicted-exporting-heavy-equipment-iran-violation-us-sanctions-laws

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September 15, 2023: 88 FR 63550: Katie Ellen O’Brien (“O’Brien”) was convicted of violating 18 U.S.C. 554(a) and 18 U.S.C. 1001(a)(2) on January 17, 2019, in the U.S. District Court for the District of Arizona. Specifically, 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.

Following issuance of the April 12, 2023 Order, BIS received notification that the last known address listed on the Order was incorrect. Specifically, BIS has since learned that another individual named Katie O’Brien, who is not the intended subject of the Denial Order, resides at the address listed on the April 12, 2023 Order. BIS has subsequently obtained updated information that indicates that the last known address for the individual who is the intended subject of the Denial Order is 1026 East Spence Avenue, Unit 103, Tempe, AZ 85281. Therefore, BIS is amending the April 12, 2023, Order to reflect the last known address of the individual convicted of the listed offenses for purposes of the denial of this individual’s export privileges.

https://www.federalregister.gov/d/2023-20049

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September 21, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $9,618,477 settlement with 3M Company (“3M”).  3M has agreed to settle its potential civil liability for 54 apparent violations of OFAC sanctions on Iran that arose from its subsidiary’s sale of reflective license plate sheeting to an Iranian entity controlled by the Iranian Law Enforcement Forces.  Between September 2016 and September 2018, 3M East AG sold 43 orders of this product to a reseller with knowledge that it was destined for a customer in Iran.  Additionally, one U.S.-person employee of another 3M subsidiary was substantively involved in these sales.  OFAC determined that these apparent violations were egregious and were voluntarily self-disclosed.

Separately, OFAC also announced a settlement with Emigrant Bank (Emigrant).  Emigrant agreed to remit $31,867.90 to settle its potential civil liability for apparent violations of sanctions against Iran.  For approximately 26 years, Emigrant maintained a Certificate of Deposit account on behalf of two individuals ordinarily resident and located in Iran, for which it processed 30 transactions between June 2017 and March 2021 totaling $91,051.13.  Emigrant had actual knowledge of the Iranian address and apparent location of the accountholders during this period.  The settlement amount reflects OFAC’s determination that Emigrant’s conduct was non-egregious and voluntarily self-disclosed.

https://ofac.treasury.gov/recent-actions/20230921

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September 28, 2023: 88 FR 66807: The Bureau of Industry and Security renewed an order denying PJSC Aeroflot’s (“Aeroflot”) export privileges for a period of 180 days on the ground that Aeroflot has engaged in a pattern of repeated, ongoing and/or continuous apparent violations of the EAR. Therefore, Aeroflot, when acting for or on their behalf, any successors or assigns, agents, or employees may not, directly or indirectly, participate in any way in any transaction involving any commodity, software or technology (hereinafter collectively referred to as “item”) exported or to be exported from the United States that is subject to the EAR, or in any other activity subject to the EAR including, but not limited to:

  1. Applying for, obtaining, or using any license (except directly related to safety of flight), license exception, or export control document;
  2. Carrying on negotiations concerning, or ordering, buying, receiving, using, selling, delivering, storing, disposing of, forwarding, transporting, financing, or otherwise servicing in any way, any transaction involving any item exported or to be exported from the United States that is subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations, or engaging in any other activity subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations; or
  3. Benefitting in any way from any transaction involving any item exported or to be exported from the United States that is subject to the EAR, or from any other activity subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations.

Second, that no person may, directly or indirectly, do any of the following:

  1. Export, reexport, or transfer (in-country) to or on behalf of Aeroflot any item subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations;
  2. Take any action that facilitates the acquisition or attempted acquisition by Aeroflot of the ownership, possession, or control of any item subject to the EAR that has been or will be exported from the United States, including financing or other support activities related to a transaction whereby Aeroflot acquires or attempts to acquire such ownership, possession or control except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations;
  3. Take any action to acquire from or to facilitate the acquisition or attempted acquisition from Aeroflot of any item subject to the EAR that has been exported from the United States except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations;
  4. Obtain from Aeroflot in the United States any item subject to the EAR with knowledge or reason to know that the item will be, or is intended to be, exported from the United States except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations; or
  5. Engage in any transaction to service any item subject to the EAR that has been or will be exported from the United States and which is owned, possessed or controlled by Aeroflot, or service any item, of whatever origin, that is owned, possessed or controlled by Aeroflot if such service involves the use of any item subject to the EAR that has been or will be exported from the United States except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations. For purposes of this paragraph, servicing means installation, maintenance, repair, modification, or testing.

Third, that, after notice and opportunity for comment as provided in section 766.23 of the EAR, any other person, firm, corporation, or business organization related to Aeroflot by ownership, control, position of responsibility, affiliation, or other connection in the conduct of trade or business may also be made subject to the provisions of this Order.

https://www.federalregister.gov/d/2023-21173

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September 28, 2023: 88 FR 66805: The Bureau of Industry and Security renewed an order denying Azur Air’s (“Azur”) export privileges for a period of 180 days on the grounds that Azur has engaged in a pattern of repeated, ongoing and/or continuous apparent violations of the EAR. Therefore, Azur, when acting for or on their behalf, any successors or assigns, agents, or employees may not, directly or indirectly, participate in any way in any transaction involving any commodity, software or technology (hereinafter collectively referred to as “item”) exported or to be exported from the United States that is subject to the EAR, or in any other activity subject to the EAR including, but not limited to:

  1. Applying for, obtaining, or using any license (except directly related to safety of flight), license exception, or export control document;
  2. Carrying on negotiations concerning, or ordering, buying, receiving, using, selling, delivering, storing, disposing of, forwarding, transporting, financing, or otherwise servicing in any way, any transaction involving any item exported or to be exported from the United States that is subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations, or engaging in any other activity subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations; or
  3. Benefitting in any way from any transaction involving any item exported or to be exported from the United States that is subject to the EAR, or from any other activity subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations.

Second, that no person may, directly or indirectly, do any of the following:

  1. Export, reexport, or transfer (in-country) to or on behalf of Azur any item subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations;
  2. Take any action that facilitates the acquisition or attempted acquisition by Azur of the ownership, possession, or control of any item subject to the EAR that has been or will be exported from the United States, including financing or other support activities related to a transaction whereby Azur acquires or attempts to acquire such ownership, possession or control except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations;
  3. Take any action to acquire from or to facilitate the acquisition or attempted acquisition from Azur of any item subject to the EAR that has been exported from the United States except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations;
  4. Obtain from Azur in the United States any item subject to the EAR with knowledge or reason to know that the item will be, or is intended to be, exported from the United States except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations; or
  5. Engage in any transaction to service any item subject to the EAR that has been or will be exported from the United States and which is owned, possessed or controlled by Azur, or service any item, of whatever origin, that is owned, possessed or controlled by Azur if such service involves the use of any item subject to the EAR that has been or will be exported from the United States except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations. For purposes of this paragraph, servicing means installation, maintenance, repair, modification, or testing.

Third, that, after notice and opportunity for comment as provided in section 766.23 of the EAR, any other person, firm, corporation, or business organization related to Azur by ownership, control, position of responsibility, affiliation, or other connection in the conduct of trade or business may also be made subject to the provisions of this Order.

https://www.federalregister.gov/d/2023-21172

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September 28, 2023: 88 FR 66802: The Bureau of Industry and Security renewed an order denying UTair Aviation JSC’s (“UTair”) export privileges for a period of 180 days on the grounds that UTair has engaged in a pattern of repeated, ongoing and/or continuous apparent violations of the EAR. Therefore, UTair, when acting for or on their behalf, any successors or assigns, agents, or employees may not, directly or indirectly, participate in any way in any transaction involving any commodity, software or technology (hereinafter collectively referred to as “item”) exported or to be exported from the United States that is subject to the EAR, or in any other activity subject to the EAR including, but not limited to:

  1. Applying for, obtaining, or using any license (except directly related to safety of flight), license exception, or export control document;
  2. Carrying on negotiations concerning, or ordering, buying, receiving, using, selling, delivering, storing, disposing of, forwarding, transporting, financing, or otherwise servicing in any way, any transaction involving any item exported or to be exported from the United States that is subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations, or engaging in any other activity subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations; or
  3. Benefitting in any way from any transaction involving any item exported or to be exported from the United States that is subject to the EAR, or from any other activity subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations.

Second, that no person may, directly or indirectly, do any of the following:

  1. Export, reexport, or transfer (in-country) to or on behalf of UTair any item subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations;
  2. Take any action that facilitates the acquisition or attempted acquisition by UTair of the ownership, possession, or control of any item subject to the EAR that has been or will be exported from the United States, including financing or other support activities related to a transaction whereby UTair acquires or attempts to acquire such ownership, possession or control except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations;
  3. Take any action to acquire from or to facilitate the acquisition or attempted acquisition from UTair of any item subject to the EAR that has been exported from the United States except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations;
  4. Obtain from UTair in the United States any item subject to the EAR with knowledge or reason to know that the item will be, or is intended to be, exported from the United States except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations; or
  5. Engage in any transaction to service any item subject to the EAR that has been or will be exported from the United States and which is owned, possessed or controlled by UTair, or service any item, of whatever origin, that is owned, possessed or controlled by UTair if such service involves the use of any item subject to the EAR that has been or will be exported from the United States except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations. For purposes of this paragraph, servicing means installation, maintenance, repair, modification, or testing.

Third, that, after notice and opportunity for comment as provided in section 766.23 of the EAR, any other person, firm, corporation, or business organization related to UTair by ownership, control, position of responsibility, affiliation, or other connection in the conduct of trade or business may also be made subject to the provisions of this Order.

https://www.federalregister.gov/d/2023-21171

SEPTEMBER 2023 EXPORT CONTROL REGULATIONS UPDATES Read More »

ITAR Brokering – The Good, The Bad and the Ugly

John Hezro, Senior Associate of ITAR for FD Associates

By John Herzo, Senior Associate, FD Associates, Inc.

Edited by Jenny Hahn, President, FD Associates, Inc.

September 20, 2023

Did you know that the International Traffic in Arms Regulations (“ITAR”) has an entire chapter devoted to non export activities?? ITAR Part §129 relates to brokering activities performed by U.S. Persons (individuals and companies), foreign companies owned by U.S. persons and foreign persons conducting brokering activities in the U.S. The ITAR’s brokering requirements are some of the most challenging aspects of the ITAR to understand and comply with. This article will provide you with a quick guide to the brokering requirements.

Before we step into this discussion, we explore a recent Department of State consent agreement levied on a U.S. company who did not appreciate the complexities of the ITAR’s brokering requirements.  On August 25, 2023, Island Pyrochemical Industries Corp (“IPI”) entered into a 3 year consent agreement with the Department of State (“DOS”) regarding certain violations of the ITAR, including brokering violations. They received a civil penalty and have committed to a monitored compliance program for 3 years. The Charging Letter, Consent Agreement and Order (Link here) are for public display on the Department of State website.

IPI is a small, privately held corporation with less than 100 employees and a manufacturer and supplier of specialty chemicals and related materials with a variety of applications in both the commercial and military sectors, including rocket propellants and precursor chemicals used in explosive ordnance. IPI has affiliates in Brazil and the People’s Republic of China (“PRC”). IPI engages in both domestic and foreign sales.

After registering as a broker in March, 2015, on or around April 2015, IPI contacted three companies to discuss the procurement of ammonium perchlorate (“APC”).  APC is listed on the US Munitions List and is considered a defense article. IPI, including IPI’s President and Chief Executive Officer (“CEO”), met with representatives from Avibras Industria Aeroespacial SA (“Avibras”), a Brazilian company, to discuss a transaction to procure APC for Avibras’ use in manufacturing certain rockets for its client, the Kingdom of Saudi Arabia.

At the same time, IPI contacted Dalian Gaojia Chemical Co., Ltd (“Dalian”), a PRC manufacturer of APC, and an export company, Aerospace Long-March International Co., Ltd. (“ALIT”), a subsidiary of China Aerospace Science and Technology Corporation, about the supply of APC to Brazil from China.

By undertaking these activities, IPI, engaged in brokering activities, as described in ITAR Part §129.2)\, by facilitating communications and engagement between Avibras. Brazil and ALIT, China[1]. On May 27, 2015, IPI entered into an agreement with Avibras for the procurement of APC from ALIT. The underlying communications validated that IPI was taking an action on behalf of another, coordinating the sale and delivery of the APC from ALIT, China to Avibras, Brazil.

In addition to this activity, IPI also engaged in multiple brokering activities in this transaction involving the solicitation, promotion, negotiating, contracting for, arranging, and otherwise assisting in the purchase of APC from China. All of this was done without obtaining a broker authorization from the Department of State, after having attempted to secure an export license for the transaction.

IPI’s brokering activities included:

(1) Recommending courses of action to Avibras on obtaining the APC from the PRC and assisting in arranging meetings with suppliers during a planned trip to the PRC, thereby negotiating for, arranging for, and otherwise assisting in and facilitating the purchase of APC by Avibras and the transfer of the APC from the PRC to Brazil;

(2) IPI finalizing an arrangement to supply Avibras with APC manufactured in the PRC thereby facilitating the manufacture and intended export of a foreign defense article from the PRC to Brazil on behalf of Avibras;

(3) IPI arranging for shipment of APC from the PRC to Brazil on behalf of Avibras;

(4) IPI issuing Dalian the final specifications for the APC thereby facilitating, on behalf of Avibras, the manufacture of the APC;

(5) IPI providing a down payment to Dalian to enable Dalian to begin manufacturing the APC thereby facilitating on behalf of Avibras Dalian’s manufacture of APC; and

(6) IPI arranging for Avibras to send a purchase order to ALIT with pricing specified by IPI for shipment of APC from the PRC to Avibras in Brazil demonstrating that IPI assisted in the export and transfer of APC from the PRC to Brazil on behalf of Avibras.

As stated earlier, IPI registered with the DOS as a broker in March, 2015. Such registration implies that IPI understood the requirements of the ITAR, particularly related to brokering. IPI  then applied for a DSP5 permanent export license for unclassified materials and technical data in July, 2015 in connection with the sale of the APC material to Avibras, listing itself as the manufacturer and ALIT, China as an intermediary party. Apply for a DSP-5 license implied that the APC was being exported from the United States to Brazil, not the transfer from China to Brazil of APC. The DOS rejected the DSP-5 application seeking an explanation on the roles of the parties. In a resubmission of the DSP-5 license, in August, 2015, ALIT was no longer listed, but IPI was still listed as the manufacturer. The application was DENIED because it was not consistent with U.S. national security and foreign policy objectives. This was because China is an ITAR 126.1 sanctioned country. The facts described herein were described in a Directed Disclosure response by IPI to DOS.  (meaning that IPI did not voluntarily report these actions to the DOS).

IPI was charged with 3 violations of the ITAR, count one – unauthorized brokering without a license, counts 2 and 3, misrepresentation or omission of facts in an export control document.

DOS determined that IPI’s unauthorized brokering activities demonstrated a disregard for its export compliance responsibilities.

IPI was fined $850,000 by the Department of State, required to appoint a Special Compliance Officer, complete a Classification Review, obtain an Audit by an outside auditor, allow onsite reviews by the Department of State and obtain export compliance training, among other remedial measures. The fine and remedial measures are significant for a small company with less than 100 employees.

Provided below is guidance to assist your company’s compliance with the ITAR’s brokering requirements found at § 129 of the ITAR.

Broker Registration

The first step is registration with the Department of State specifically as a broker. It is a precondition for applying for broker prior approval licenses (when needed). Registration is required for only one brokering activity. Registration as a broker is separate from registration as a manufacturer or export.

Pursuant to §129.3, the following persons must register as a broker:

  • U.S. and foreign persons meeting the definition of a broker must register with the Department of State as a broker per the ITAR at §129.3(a); and
  • Broker registrations are submitted via the Department of State’s DECCS electronic licensing system using form DS2032 and checking the box for broker.

The ITAR at §129.3(b) includes the following exemptions from the broker registration requirements:

  • Foreign governments or international organizations, including their employees, acting in an official capacity; and
  • Persons exclusively in the business of financing, insuring, transporting, customs brokering, or freight forwarding, whose activities do not extend beyond financing, insuring, transporting, customs brokering, or freight forwarding. Examples include air carriers or freight forwarders that merely transport or arrange transportation for licensed defense articles, and banks or credit companies who merely provide commercially available lines or letters of credit to persons registered or required to register in accordance with §122 or 129.

Who Is A Broker

Before you register as a broker, you need to know who the ITAR defines as a broker and how it defines brokering activities. The ITAR at §129.2(a) defines who a broker is as follows:

  • Broker means any person who engages in the business of brokering activities:
    • Any U.S. Person wherever located;
    • Any foreign person located in the United States; or
    • Any foreign person located outside the United States where the foreign person is owned or controlled by a U.S. Person.

The key point to remember regarding the ITAR’s definition of a broker is that it only captures foreign persons when they are located in the U.S. or foreign person located outside the United States where the foreign person is owned or controlled by a U.S. Person. Therefore, most foreign persons are NOT subject to the ITAR’s brokering regulations and do NOT need to register as a broker.

What Is Considered ITAR Brokering

The next step is to define what constitutes what the ITAR considers is brokering as it may differ from the traditional brokering activities. The ITAR at §129.2(a) defines brokering activity as follows:

  • Any action on behalf of another to facilitate the manufacture, export, permanent import, transfer, reexport, or retransfer of a U.S. or foreign defense article or defense service, regardless of its origin;
  • Such action includes, but is not limited to: financing, insuring, transporting, or freight forwarding defense articles and defense services; or
  • Soliciting, promoting, negotiating, contracting for, arranging, or otherwise assisting in the purchase, sale, transfer, loan, or lease of a defense article or defense service.

As you can see, a company can perform a brokering activity that does not involve the export from the United States of ITAR controlled technical data, hardware or defense services. In IPI’s case it was the transfer of material described in the ITAR’s U.S. Munitions List from China to Brazil at the heart of the broker violation.

“Any action on behalf of another” is broad and applicable to any actions that facilitate the manufacture, export, permanent import, transfer, reexport, or retransfer of a U.S. or foreign defense article or defense service. The phrase “any action” has been interpreted to mean several different things, for instance:

  • Exactly what it says, any action. This could be as simple as providing an email address or phone number of prospective foreign buyer of a U.S. or foreign defense article to the seller of the defense article;
  • Letting a purchase order for the drop shipment of a foreign defense article from one foreign country to another foreign country;
  • Initiating the manufacturing activity, caused when the purchase order is let, which starts the manufacturing process for a defense article that will be shipped from one foreign country to another foreign country; or
  • Initiating or supporting the shipping arrangements to have the material finalized for the drop shipment from one foreign country to another foreign country.

To determine if the activities your company engages in are brokering activities pursuant to the ITAR, first ask yourself, is your company assisting in the transaction in the following types of administrative activities as referenced in §129.2(b)(2):

  • Providing or arranging office space and equipment;
  • Providing hospitality;
  • Providing advertising;
  • Providing clerical assistance;
  • Providing assistance with obtaining visas;
  • Providing translation services;
  • Collecting product and pricing information to prepare a request to proposal;
  • Promoting company goodwill at trade shows; or
  • Providing legal advice to clients.

If your company is performing any of the administrative activities referenced above, it is not performing a brokering activity.

The following are also not brokering activities per §129.2(b)(2):

  • Activities performed by an affiliate on behalf of another affiliate; and
  • Activities by persons, including their regular employees, that do not extend beyond acting as an end-user of a defense article or defense service exported pursuant to a license or other approval under §123, §124, or §125, or subsequently acting as a reexporter or retransferor of such article or service under such license or other approval, or under an approval pursuant to §123.9.

If the activities your company engages in aren’t listed above, ask yourself is this transaction related to the prospective sale and/or export or import (as applicable) of U.S. or foreign origin ITAR regulated (or enumerated) hardware, technical data or services, and are on behalf of another party, U.S. or foreign? If your answer is yes, ask yourself, is my company taking any of the following actions:

  • Soliciting the sale of the ITAR regulated[2] (or enumerated[3]) hardware?
  • Promoting the sale of the ITAR regulated (or enumerated) hardware?
  • Negotiating the sale of the ITAR regulated (or enumerated) hardware?
  • Contracting for the sale of the ITAR regulated (or enumerated) hardware?
  • Arranging for the sale and/or export or import of the ITAR regulated (or enumerated) hardware?
  • Arranging the transfer of foreign defense articles from the foreign supplier to a foreign purchaser or foreign end user?
  • Obtaining a DSP-5 license for the export of the ITAR regulated hardware (or enumerated) or a DSP-61 for the temporary import of ITAR regulated hardware on behalf of another?
  • Obtaining an ATF Form 6 Permanent Import Permit for the permanent import of ITAR regulated (or enumerated) hardware that is listed on the ATF’s United States Munitions Import List (“USMIL”), on behalf of another?
  • Buying foreign origin ITAR enumerated hardware listed on the ITAR’s United States Munitions List (“USML”) or equipment listed on the USMIL from a foreign manufacturer or foreign owner for delivery to the U.S. for sale to another U.S. party?

If you answer yes to any of the above, brokering is occurring and a broker license will be required from the Department of State prior to ANY brokering activity taking place, for the articles listed below pursuant to §129.4(a)(2), if listed on the USML or the USMIL and for any foreign origin defense articles listed on the USML or listed on the USMIL, unless a license exemption is available:

  • Firearms and other weapons described by USML and USMIL Category I(a) through (d), USML and USMIL Category II(a) and (d), and full up rounds of Ammunition described in USML and USMIL Category III(a);
  • Rockets, bombs, and grenades as well as launchers for such defense articles described by USML Category IV(a), and launch vehicles and missile and anti-missile systems described by USML Category IV(b) (including man-portable air-defense systems);
  • Vessels of war described by USML Category VI;
  • Tanks and military vehicles described by USML Category VII;
  • Aircraft and unmanned aerial vehicles described by USML Category VIII;
  • Night vision-related defense articles and inertial platform, sensor, and guidance-related systems described by USML Categories XII(c) and (d);
  • Chemical agents and precursors described by USML Categories XIV(a), (d), and (e), biological agents and biologically derived substances described by USML Category XIV(b), and equipment described by USML Category XIV(f) for dissemination of the chemical agents and biological agents described by USML Categories XIV(a), (b), and (e);
  • Submersible vessels described by USML Category XX; and
  • Miscellaneous articles described by USML and USMIL Category XXI.

Broker License Exemptions

If you determine that your company is brokering and requires prior approval brokering authorization, the next step of the process is to determine if any of the ITAR’s brokering license exemptions apply to your transaction. The ITAR’s brokering license exemptions are found at §129.5(a) and §129.5(b).

Pursuant to §129.5(a), brokering activities undertaken for an agency of the U.S. government pursuant to a contract between the broker and that agency are exempt from the requirement for approval provided that:

  • The brokering activities concern defense articles or defense services solely for the use of the agency; or
  • The brokering activities are undertaken for carrying out a foreign assistance or sales program authorized by law and subject to control by the president by other means, as demonstrated by one of the following conditions being met:
    • The U.S. Government agency contract with the broker contains an explicit provision stating the contract supports a foreign assistance or sales program authorized by law and the contracting agency has established control of the activity covered by the contract by other means equivalent to that established under this subchapter; or
    • The Directorate of Defense Trade Controls provides written concurrence in advance that the condition is met.

Pursuant to §129.5(b), brokering activities regarding a foreign defense article or defense service are exempt from the requirement for approval when arranged wholly within and destined exclusively for the North Atlantic Treaty Organization, any member country of that organization, Australia, Israel, Japan, New Zealand, or the Republic of Korea, except in the case of the defense articles or defense services specified in § 129.4(a)(2) (see above), for which a broker license is required.

In order to use the broker license exemptions at §§ 129.5(a) and 129.5(b), pursuant to §129.5(c), brokers engaging in brokering activities described in §§129.5(a) or (b) are not exempt from obtaining a broker license from the Department of State if:

  • The broker is not registered as required by §129.3; or
  • The broker or any person who has a direct or indirect interest in or may benefit from the brokering activities, including any related defense article or defense service transaction, is ineligible as defined in §120.1(c)(2); or
  • A country or person referred to in §126.1 of this subchapter is involved in the brokering activities or such activities are otherwise subject to §129.7.

Broker Licensing

If your company is performing brokering activities and does not meet the requirements of the broker license exemptions referenced above, your company will need to submit a broker license (DS4294) to the Department of State, after it has secured a Broker registration code and before it undertakes any brokering activity. Below are the steps to file a broker license request:

  • The broker license request must be filed via the DS4294 form utilizing the Department of State’s DECCS electronic licensing system detailing the known specifics of the transaction, refer to §129.6(b);
  • Must identify the applicant’s name, address and PM/DDTC broker registration code;
  • Identify the specific brokering activity to be approved;
  • Identify the name, nationality, address, and place of business of all persons who may participate in the brokering activities;
  • Requires the ITAR 126.13 certification;
  • Must identify the specific defense article(s) or defense services involved as follows:
    • The USML/USMIL category;
    • The name or military nomenclature of each defense article;
    • Whether the defense article is Significant Military Equipment;
    • Estimated quantity of each defense article;
    • Estimated U.S. Dollar value of defense articles and defense services;
    • Security classification;
    • End-user and end-use; and
  • Identify whether the brokering activities are related to a sale through Direct Commercial Sale or under the U.S. Foreign Military Sales program or other activity in support of the U.S. Government.

Brokering Items On The USML Not  Listed In ITAR §129.4?

 

Provided the defense articles, technical data or defense services are U.S. origin, and not described in ITAR §129.4, no prior brokering approval is required, unless a sanctioned country or party is involved. If no prior brokering approval is required, the broker is required to report the brokering activity specifics with each annual broker registration renewal.

 

Summary

As you will now conclude, the ITAR brokering regulations are complex and compliance is critical to avoid fines and compliance remedial measures as described for IPI. Some key points to remember are:

  • Anyone who engages in a brokering activity, even a single brokering activity, must register with the Department of State as a broker before undertaking the brokering activity;
  • Foreign persons must register as brokers if they are to conduct a brokering activity when they are located in the U.S. or when they are owned or controlled by a U.S. Person;
  • The brokering of ANY foreign defense article requires prior brokering authorization approval, unless an ITAR broker exemption applies;
  • Even though most small arms and full up ammunition has moved to the export jurisdiction of the Export Administration Regulations (“EAR”), the brokering of U.S. or foreign origin small arms or full up ammunition enumerated on the ATF’s USMIL require prior ITAR brokering authorization approval;
  • Your company can perform a brokering activity without making an export of ITAR controlled technical data, hardware or defense services;
  • If your company is brokering any U.S. defense articles enumerated in 129.4(a)(2) your company will require a prior approval broker license or the utilization of a broker license exemption;
  • If your company is brokering any foreign defense article enumerated on the USML or the USMIL, your company will require a prior approval broker license or the utilization of a broker license exemption.
  • If your company is brokering a foreign defense articles enumerated in 129.4(a)(2) your company can utilize the NATO, Australia, Israel, Japan, New Zealand, or the Republic of Korea broker license exemption at §129.5(b) if the transaction is wholly within these countries including the country of manufacture; and
  • Annually all brokering activities, licensed or unlicensed, must be reported to DOS with the annual registration renewal.

Need help?? Contact our expert export consultants and attorneys for assistance at 703-847-5801 or by email at info@fdassociates.net.

[1] China is an ITAR 126.1 arms sanctioned country

[2] ITAR Regulated = Controlled by the ITAR.

[3] ITAR Enumerated = Foreign origin equipment, no U.S. content, included in the ITAR’s United States Munitions List (USML) or the ATF’s United States Munitions Import List (USMIL).

ITAR Brokering – The Good, The Bad and the Ugly Read More »