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LATEST EXPORT CONTROLS AND COMPLIANCE UPDATE NOVEMBER 2024

This newsletter is a listing of the latest changes in export control regulations through November 30, 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 Continued the National Emergency with Respect to Iran

 

November 1, 2024: 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, 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 with respect to Iran declared in Executive Order 12170.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/11/01/notice-to-the-speaker-of-the-house-and-president-of-the-senate-on-the-continuation-of-the-national-emergency-with-respect-to-iran/

and

https://www.whitehouse.gov/briefing-room/presidential-actions/page/2/

 

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President Biden Continued the National Emergency with Respect to the Threat from Securities Investments That Finance Certain Companies of the People’s Republic of China

 

November 7, 2024: On November 12, 2020, by Executive Order 13959, 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 threat from securities investments that finance certain companies of the People’s Republic of China (PRC).

 

The President found that the PRC is exploiting United States capital to resource and enable the development and modernization of its military, intelligence, and other security apparatuses, which continues to allow the PRC to directly threaten the United States homeland and United States forces overseas.  Through the national strategy of Military‑Civil Fusion, the PRC increases the size of the country’s military-industrial complex by compelling civilian Chinese companies to support its military and intelligence activities.  Those companies, though remaining ostensibly private and civilian, directly support the PRC’s military, intelligence, and security apparatuses and aid in their development and modernization.  At the same time, those companies raise capital by selling securities to United States investors that trade on public exchanges both here and abroad, lobbying United States index providers and funds to include these securities in market offerings, and engaging in other acts to ensure access to United States capital.

 

The President further found that the PRC’s military-industrial complex, by directly supporting the efforts of the PRC’s military, intelligence, and other security apparatuses, constituted an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.

 

On January 13, 2021, the President signed Executive Order 13974 amending Executive Order 13959.

 

On June 3, 2021, President Biden signed Executive Order 14032, which expanded the scope of the national emergency declared in Executive Order 13959.  President Biden found that additional steps are necessary to address that national emergency, including the threat posed by the military-industrial complex of the PRC and its involvement in military, intelligence, and security research and development programs, and weapons and related equipment production under the PRC’s Military-Civil Fusion strategy.  In addition, President Biden found that the use of Chinese surveillance technology outside the PRC and the development or use of Chinese surveillance technology to facilitate repression or serious human rights abuse constituted unusual and extraordinary threats to the national security, foreign policy, and economy of the United States, and President Biden expanded the national emergency to address these threats.  Executive Order 14032 amended Executive Order 13959 and revoked Executive Order 13974 in its entirety.

 

The threat from securities investments that finance certain companies of the PRC and certain uses, and development of Chinese surveillance technology 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 in Executive Order 13959 of November 12, 2020, expanded in scope by Executive Order 14032 of June 3, 2021, must continue in effect beyond November 12, 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 13959 with respect to the threat from securities investments that finance certain companies of the PRC and expanded in Executive Order 14032.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/11/07/notice-on-the-continuation-of-the-national-emergency-with-respect-to-the-threat-from-securities-investments-that-finance-certain-companies-of-the-peoples-republic-of-china-3/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/

 

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President Biden Continued the National Emergency with Respect to the Proliferation of Weapons of Mass Destruction

 

November 7, 2024: On November 14, 1994, by Executive Order 12938, the President declared a national emergency with respect to the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States posed by the proliferation of nuclear, biological, and chemical weapons (weapons of mass destruction) and the means of delivering such weapons.  On July 28, 1998, by Executive Order 13094, the President amended Executive Order 12938 to respond more effectively to the worldwide threat of weapons of mass destruction proliferation activities.  On June 28, 2005, by Executive Order 13382, the President, among other things, further amended Executive Order 12938 to improve our ability to combat proliferation.  The proliferation of weapons of mass destruction and the means of delivering them continues to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.  For this reason, the national emergency declared in Executive Order 12938 of November 14, 1994, with respect to the proliferation of weapons of mass destruction and the means of delivering such weapons must continue beyond November 14, 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 12938, as amended.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/11/07/notice-to-the-speaker-of-the-house-and-president-of-the-senate-on-the-continuation-of-the-national-emergency-with-respect-to-the-proliferation-of-weapons-of-mass-destruction/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/

 

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President Biden Continued the National Emergency with Respect to Nicaragua

 

November 22, 2024: On November 27, 2018, by Executive Order 13851, 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 and foreign policy of the United States constituted by the situation in Nicaragua.  On October 24, 2022, President Biden issued Executive Order 14088 to take additional steps with respect to the national emergency declared in Executive Order 13851.

 

The situation in Nicaragua, including the violent response by the Government of Nicaragua to the protests that began on April 18, 2018, and the Ortega-Murillo regime’s continued systematic dismantling and undermining of democratic institutions and the rule of law, its use of indiscriminate violence and repressive tactics against civilians, as well as its corruption leading to the destabilization of Nicaragua’s economy, 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 November 27, 2018, must continue in effect beyond November 27, 2024.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden is continuing for 1 year the national emergency declared in Executive Order 13851 with respect to the situation in Nicaragua.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/11/22/press-release-notice-to-the-speaker-of-the-house-and-president-of-the-senate-on-the-continuation-of-the-national-emergency-with-respect-to-the-situation-in-nicaragua/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/

 

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

 

Extension of Comment Period for the Rule Proposing Changes to U.S. Munitions List Categories IV and XV

 

November 15, 2024: The Department of State is extending the comment period for the proposed rule “International Traffic in Arms Regulations (ITAR): U.S. Munitions List Categories IV and XV” (89 FR 84482, Oct. 23, 2024). The original comment period required submission of comments on or before November 22, 2024.  In response to requests from the public, the Department extends the comment period through December 23, 2024.

 

 

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

https://www.federalregister.gov/d/2024-27059

 

 

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International Traffic in Arms Regulations: Extension of an Existing Temporary Modification of Category VIII of the U.S. Munitions List

 

November 26, 2024: 89 Fed. Reg. 93170: The Department of State, pursuant to its regulations and in the interest of the national security and foreign policy of the United States, extended a previous temporary modification of the United States Munitions List (USML) Category VIII.

 

On December 4, 2023, the Department of State published a final rule in the Federal Register at 88 FR 84072 temporarily modifying the note to USML Category VIII(h)(1), such that parts, components, accessories, and attachments specially designed for aircraft identified in paragraph (h)(1) are not released from that paragraph due to their use in the KF-21 aircraft.

 

The Department of State previously determined it is in the national security and foreign policy interests of the United States to allow manufacturers to apply for export authorizations to participate in development of the KF-21 aircraft by using certain defense articles described in paragraph (h)(1) without removing those defense articles from the USML simply because they are used in the KF-21.

 

Now, the Department of State again determined it is in the security and foreign policy interests of the United States to extend the validity period of this temporary modification. Accordingly, pursuant to International Traffic in Arms Regulations (ITAR) § 126.2, the Acting Assistant Secretary of State for Political-Military Affairs hereby extends the previous temporary modification of the Note to paragraph (h)(1) of USML Category VIII.

 

Section 126.2 of the ITAR provides that the Deputy Assistant Secretary for Defense Trade Controls may order the temporary suspension or modification of any or all provisions of the ITAR when in the interest of the security and foreign policy of the United States. Section 120.1(b) of the ITAR authorizes the Assistant Secretary of State for Political-Military Affairs to exercise this authority for the Department of State.

 

This temporary modification, already effective and currently reflected in the USML at ITAR § 121.1, is hereby extended until December 1, 2026, or when terminated by the Department of State, whichever occurs first.

 

https://www.federalregister.gov/documents/2024/11/26/2024-27592/international-traffic-in-arms-regulations-extension-of-an-existing-temporary-modification-of

 

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Department of Defense, Defense Security Cooperation Agency (DSCA)

 

DSCA Notifies Congress of Potential FMS Sale To Poland

 

November 1, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government  Poland of has requested to buy mobile Ground Control Approach (GCA-2000) systems, which consist of ultra-high frequency radios; AN/UPX interrogators; radio navigation equipment; test equipment; precision navigation; spare and repair parts; consumables; accessories; warranties; publications and technical documentation; personnel training and training support; studies and surveys; 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 $105 million. The principal contractor will be L3Harris, located in Melbourne, FL. There is no known offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

 

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DSCA Notifies Congress of Potential FMS Sale To the Repubic of Korea

 

November 4, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Republic of Korea (ROK) has requested to buy four (4) E-7 Airborne Early Warning & Control (AEW&C) aircraft; ten (10) CFM56 jet engines (8 installed, 2 spares); seven (7) Guardian Laser Transmitter Assemblies (GLTA) (4 installed, 3 spares); eight (8) AN/AAR-57 AN/AAQ 24(V)N Large Aircraft Infrared Countermeasures (LAIRCM) System Processor Replacements (LSPR) (4 installed, 4 spares); ten (10) Embedded Global Positioning System/Inertial Navigation System (GPS/INS) (EGI) with Selective Availability Anti-Spoofing Module (SAASM) – or M-Code receiver (8 installed, 2 spares); and six (6) Multifunctional Information Distribution System Joint Tactical Radio Systems with Tactical Targeting Network Technology (MIDS JTRS TTNT) (4 installed, 2 spares). The following non-MDE items will also be included: AN/ARC-210 radios; digital radar warning receivers; AN/ALE-47 electronic countermeasure dispensers; LAIRCM control interface units; missile warning sensors; AN/APX-119 identification friend or foe (IFF) transponders; KY100M narrowband/wideband terminals; KIV-77 Mode 4/5 IFF cryptographic appliqué; AN/PYQ-10 Simple Key Loaders; KG-175 Link encryptors; communications security (COMSEC) cables and other COMSEC devices and equipment; communications equipment; precision navigation; Computer Program Identification Numbers (CPINS); user data module cards; testing and test equipment; major and minor modifications and maintenance support; aircraft components, parts, and accessories; training aids and devices, and spare parts; instruments and lab equipment; spare parts, consumables and accessories, and repair and return support; classified and unclassified software delivery and support; classified and unclassified publications and technical documentation; personnel training and training equipment; aircraft ferry and transportation support; studies and surveys; 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 $4.92 billion. The principal contractor will be The Boeing Company, located in Renton, WA. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/republic-korea-e-7-airborne-early-warning-control-aircraft and

https://www.dsca.mil/major-arms-sales/archive-date/202411

 

 

DSCA Notifies Congress of Potential FMS Sale To the Czech Republic

 

November 5, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of the Czech Republic has requested to buy a two-sector fixed satellite communications turnkey system, based on a Large Enterprise Terminals (LET) system, consisting of the following non-MDE items: communications equipment; spare parts, consumables and accessories, and repair and return support; personnel training and training equipment; U.S. Government and contractor engineering, technical and logistics support services; and other related elements of logistics and program support. The estimated total cost is $184 million. Implementation of this proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to the Czech Republic.

 

https://www.dsca.mil/press-media/major-arms-sales/czech-republic-large-enterprise-terminals-system and

https://www.dsca.mil/major-arms-sales/archive-date/202411

 

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DSCA Notifies Congress of Potential FMS Sale To Greece

 

November 14, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Greece has requested to buy equipment and services for follow-on support of its F-16 engines. The following non-MDE items will be included: engine components, parts, and accessories; aircraft engine and ground handling equipment; major and minor modifications; spare parts, consumables and accessories, and repair and return support; classified and unclassified software delivery and support; classified and unclassified publications and technical documentation; 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 $160 million. The proposed sale of this equipment and support will not alter the basic military balance in the region. The principal contractor will be General Electric Aerospace, located in Evendale, OH. There are no known offset agreements proposed in connection with this potential sale. Implementation of this proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to Greece. There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.

 

https://www.dsca.mil/press-media/major-arms-sales/greece-f-16-engine-follow-support

 

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DSCA Notifies Congress of Potential FMS Sale To the United Kingdom

 

November 18, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government the United Kingdom has requested to buy forty-six (46) Tactical Combat Training System Increment II (TCTS II) air combat training systems. The following non-MDE items will also be included: containers; integration and test support; spare and repair parts; 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 $70 million. The principal contractors will be Collins Aerospace, located in Cedar Rapids, IA, and Leonardo DRS Systems, located in Fort Walton Beach, FL. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/united-kingdom-tactical-combat-training-system-increment-ii

 

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DSCA Notifies Congress of Potential FMS Sale To the Republic of Korea

 

November 18, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Republic of Korea has requested to buy equipment and services to upgrade its F-15K aircraft fleet, including ninety-six (96) Advanced Display Core Processor II (ADCP II) mission system computers; seventy (70) AN/APG-82(v)1 Active Electronically Scanned Arrays (AESA) radars; seventy (70) AN/ALQ-250 Eagle Passive Active Warning Survivability System (EPAWSS) electronic warfare (EW) suites; and seventy (70) AN/AAR-57 Common Missile Warning Systems (CMWS). The following non-MDE items will also be included: Joint Mission Planning Systems (JMPS) with unique planning components; Computer Program Identification Numbers (CPINs); Joint Helmet Mounted Cueing Systems; major modifications and maintenance support; aircraft components, parts, and accessories; spare parts, consumables, accessories, and repair and return support; training aids and devices; weapons software and software support; classified and unclassified software delivery and support; classified and unclassified publications and technical documentation; personnel training and training equipment; aerial refueling support; aircraft ferry and transportation support; facilities and construction support; studies and surveys; 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 $6.2 billion. The primary contractors will be Boeing Company, based in Arlington, VA; Raytheon Technologies, located in Forest, MS; and BAE Systems, situated in Falls Church, VA. The U. S. Government is not aware of any offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/republic-korea-f-15k-aircraft-upgrade

 

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DSCA Notifies Congress of Potential FMS Sale To Ukraine

 

November 19, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that the Government of Ukraine has requested to buy equipment and services for refurbishment of vehicles; technical assistance; training; publications; and other related elements of logistics and program support. The estimated total cost is $100 million. The principal contractor(s) will be determined from approved vendors. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/ukraine-blanket-order-sustainment-us-army-supplied-systems-0

 

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DSCA Notifies Congress of Potential FMS Sale To the United Kingdom

 

November 27, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that the Government of the United Kingdom has requested to buy a High Gain Measurement System (HGMS) with off-aspect mid frequency line arrays (MFLAs), HGMS components that include acoustic sensors, cables, test hardware and software; containers; anchoring equipment; integration and test support; spare and repair parts; publications and technical documentation; personnel training and 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 $125 million. The principal contractor will be Leidos, Inc., located in Reston, VA. There are no known offset agreements proposed in connection with this potential sale.

 

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DSCA Notifies Congress of Potential FMS Sale To the Taipei Economic and Cultural Representative Office in the United States (TECRO)

 

November 29, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that the Taipei Economic and Cultural Representative Office in the United States (TECRO) has requested to buy critical spare and repair parts, consumables and accessories, and repair and return support for F-16 aircraft; Active Electronically Scanned Array (AESA) radar spare parts and support; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $320 million. Deliveries are estimated to begin in 2025. This equipment will be transferred from U.S. Government stock. There are no known offset agreements proposed in connection with this potential sale.

 

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DSCA Notifies Congress of Potential FMS Sale To the Taipei Economic and Cultural Representative Office in the United States (TECRO)

 

November 29, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that the Taipei Economic and Cultural Representative Office in the United States (TECRO) has requested to buy extended services provided under a previously implemented case whose value was under the congressional notification threshold. The original Foreign Military Sales (FMS) case, valued at $41.6 million ($0 in MDE), included services related to follow-on support for the Improved Mobile Subscriber Equipment (IMSE) and Experimental Force (EXFOR) system, including repair and return of equipment; management, replacement, and repair services; U.S. Government liaison support as required; contract engineering and technical support; logistics; contractor operation and management of the OCONUS depot, including repair and replacement; and other related elements of logistics and program support. This notification is for an extension of those same services for an additional two years. The estimated total cost is $65 million. The principal contractor will be General Dynamics Mission Systems, located in Fairfax, VA. There are no known offset agreements proposed in connection with this potential sale.

 

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

 

BIS Releases New Edition of “Don’t Let This Happen to You!”

November 12, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) Export Enforcement published an updated version of “Don’t Let This Happen to You!”, a compendium of case examples highlighting BIS criminal and administrative enforcement efforts. The publication was last updated in July 2024.

The updated version includes new enforcement cases involving: the first Disruptive Technology Strike Force case to result in a stand-alone administrative penalty; a criminal case against an illicit Russian procurement network; a criminal case where export-controlled items were smuggled outside of the United States and used in an assassination plot; an administrative case against a semiconductor wafer manufacturing company for unauthorized shipments to a party on the Entity List; and violations of the antiboycott regulations. Exporters are encouraged to review the publication, which provides useful illustrations of the type of conduct that gets companies and universities in trouble.

BIS Export Enforcement protects and promotes U.S. national security by aggressively investigating violations of export control and antiboycott regulations and by partnering with industry and academia to facilitate compliance with those regulation.

https://www.bis.gov/press-release/bis-releases-new-edition-dont-let-happen-you-0

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Export Administration Regulation: Revisions to Space-Related Export Controls; Extension of Comment Period

 

November 18, 2024: On October 23, 2024, the Bureau of Industry and Security (BIS) published in the Federal Register the interim final rule, “Export Administration Regulations: Revisions to Space Related Export Controls” with comments originally due November 22, 2024. This notification extends the deadline for written comments to December 23, 2024. This extension is being made to allow commenters to have additional time to review the interim final rule and to be informed by the public outreach that BIS is conducting on the rule in preparing their comments.  Extending the public comment period will not in any way undermine the rule or national security of the United States.

 

https://www.bis.gov/media/documents/export-administration-regulations-revisions-space-related-export-controls-extension and

https://www.bis.gov/news-updates/search?content_type=All&created=1&field_countries=All&field_learn_support_topics=All&field_news_updates_topic=All&news_search_query=&page=1&sort_by=created&sort_order=DESC

 

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Export Administration Regulations: Revisions to Space-Related Controls, including Addition of License Exception Commercial Space Activities (CSA); Extension of Comment Period

 

November 18, 2024: On October 23, 2024, the Bureau of Industry and Security (BIS) published in the Federal Register the proposed rule, “Export Administration Regulations: Revisions to Space Related Export Controls, Including Addition of License Exception Commercial Space Activities (CSA)” with comments originally due November 22, 2024. This notification extends the deadline for written comments to December 23, 2024. This extension is being made to allow commenters to have additional time to review the proposed rule and to be informed by the public outreach that BIS is conducting on the rule in preparing their comments. Extending the public comment period will not in any way undermine the rule or national security of the United States.

 

https://www.bis.gov/media/documents/export-administration-regulations-revisions-space-related-export-controls-including and

https://www.bis.gov/news-updates/search?content_type=All&created=1&field_countries=All&field_learn_support_topics=All&field_news_updates_topic=All&news_search_query=&page=1&sort_by=created&sort_order=DESC

 

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Department of Commerce Strengthens Restrictions on Exports to Pakistan to Address Diversion Concerns

 

November 25, 2024: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) published a final rule imposing new controls on exports, reexports, and transfers (in-country) involving six key categories of items – some of which were previously controlled for nuclear nonproliferation reasons – to Pakistan to address diversion concerns. BIS has determined that these items have been sought by entities on the Entity List, as well as front companies acting on their behalf. Controlling such items on a countrywide basis will allow the U.S. Government to review proposed transactions to mitigate the risk of diversion to an end use or end user of concern, while facilitating trade for legitimate commercial and civil end uses.

The items controlled in this rule are listed on the Commerce Control List under Export Control Classification Numbers (ECCNs) 1B999, 2A992, 2B999,1 3A992, 3A999, and 6A996. Items that fall within the scope of these ECCNs include the following:

  • Particle accelerators;
  • Certain stainless or alloy pipes and valves;
  • Certain pumps and welders;
  • Oscilloscopes;
  • Chromatographs and spectrometers; and

A BIS license will now be required for regional stability reasons to export, reexport, or transfer items (in-country) under these six ECCNs to or within Pakistan. Applications for such transactions will be denied if the U.S. Government determines that there is an unacceptable risk of use in an end use of concern or diversion to an end user of concern. The availability of license exceptions is limited.

https://www.federalregister.gov/ and

https://www.bis.gov/press-release/commerce-strengthens-restrictions-exports-pakistan-address-diversion-concerns

 

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U.S. Census Bureau

Implementation of SPD 15 in the American Community Survey

November 5, 2024: Earlier this year, the U.S. Office of Management and Budget (OMB) published the results of its review of Statistical Policy Directive No. 15 (SPD 15) and issued updated standards for maintaining, collecting and presenting race and ethnicity data across federal agencies. The updated 2024 SPD 15 requires the use of a combined race and ethnicity question, the addition of a new “Middle Eastern or North African” minimum reporting category, and the collection of detailed race and ethnicity responses.

Since then, programs across the U.S. Census Bureau have been assessing how and when to implement the updated race and ethnicity standards set by OMB in the 2024 SPD 15. We expect race and ethnicity data that align with the revised standards will enhance the entire range of Census Bureau data products that describe the demographic makeup and socioeconomic characteristics of our country and our diverse communities.

The U.S. Census Bureau recognizes the importance of implementing the updated standards as quickly as possible, while maintaining the high-quality American Community Survey (ACS) data that are relied upon by so many both inside and outside of government. We have given careful consideration regarding the implementation of the updated race and ethnicity standards, including an assessment of cost, risk, and benefit. Based on these assessments, we decided to implement the finalized 2024 SPD 15 published by OMB on March 28, 2024, in the 2027 ACS data collection cycle. This means:

  • The first ACS 1-year estimates produced using the updated standards will be the 2027 ACS 1-year data, planned for release in September 2028.
  • The first 5-year estimates produced solely using the data collected under the 2024 SPD 15 will be available in the 2027-2031 ACS 5-year data, scheduled for release in December 2032.
  • Until the ACS has 5 years of data collected using the updated standards, the Census Bureau will produce ACS 5-year estimates using a bridging technique, starting with the 2023-2027 ACS 5-year release scheduled for December 2028. Providing data products at low levels of geography following the 2024 SPD 15 will allow data users to gain new insights into the demographic makeup and socioeconomic characteristics of our diverse communities.

In making a final decision about the timing, the Census Bureau weighed the need for producing data under the updated standards as quickly as possible against the need for accurate data. The ACS program conducted an assessment of what would be necessary to implement the updated 2024 SPD 15 in the ACS in either the 2026 ACS or the 2027 ACS. This assessment considered multiple factors including the amount of time and resources needed to implement the change accurately and how the implementation of the 2024 SPD 15 could be accomplished alongside work on critical projects to modernize operations at the Census Bureau.

The Census Bureau also considered federal and nonfederal stakeholder feedback in its assessment. The Census Bureau solicited public feedback on the timing of the implementation of the updated 2024 SPD 15 through a Federal Register notice published on July 12, 2024. The ACS program and OMB also solicited comments about the timing of implementation from federal agencies that use ACS data. We appreciate those who responded with their thoughtful comments.

Related to this effort, the Census Bureau is participating in OMB’s Federal Committee on SPD 15, which will provide statistical tools such as bridging programs to crosswalk data collected under the 1997 SPD 15 and the revised 2024 SPD 15, and best practices for coding detailed racial and ethnic groups and write-in responses.

As we continue the work of implementing the updated standards in the ACS, we will keep the public, stakeholders, and data users informed. We look forward to implementing the updated race/ethnicity standards to improve and produce race/ethnicity statistics for our country.

Port of Unlading Codes Updated in the Automated Export System (AES) 

November 18, 2024: Please note the following Port of Unlading Code Name has been UPDATED in the AES effective immediately.

Port Name           Port Code          Country

Whonnock, BC     12488                 Canada

The following Port of Unlading Code Country has been UPDATED in the AES effective immediately.

Port Name           Port Code          Country

Tolu                      30111                  Colombia

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Tips on How to Resolve AES Response Messages

November 19, 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:  512

Narrative:      ECCN Missing

Severity:        Fatal

Reason:        The License Code/License Exemption Code requires an Export Control Classification Number (ECCN), but it was not reported.

Resolution:  The License Code/License Exemption Code requires the reporting of an ECCN. See ‘Appendix F – License and License Exemption Type Codes’ and reporting guidelines.

Verify the License Code/License Exemption Code requirements, correct the shipment and resubmit.

Response Code:  626

Narrative:      1st UOM Code Missing

Severity:        Fatal

Reason:         The Schedule B/HTS Number reported requires a Unit of Measure (1)  and Unit of Measure (1) is missing.

Resolution:  The Schedule B/HTS Number reported requires the Units for 1st Quantity to be reported.

Verify the Unit of Measure for the 1st Quantity, correct the shipment and resubmit.

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

 

November 1, 2024: As part of a settlement agreement, the Department of Commerce’s Bureau of Industry and Security (BIS) imposed a civil penalty of $500,000 against GlobalFoundries U.S. Inc., a semiconductor wafer manufacturing company headquartered in Malta, New York, and its subsidiary, GlobalFoundries U.S. 2 LLC (collectively, “GlobalFoundries”).

 

The penalty relates to GlobalFoundries’ shipments of semiconductor wafers valued at approximately $17.1 million to SJ Semiconductor (SJS), a company on the BIS Entity List, without the requisite license or other authorization from BIS. GlobalFoundries voluntarily disclosed the conduct to BIS, cooperated with the investigation by BIS’s Office of Export Enforcement (OEE), and took remedial measures after discovering the conduct at issue, which resulted in a significant reduction in the penalty.

 

https://www.bis.gov/press-release/bis-imposes-500000-mitigated-penalty-against-globalfoundries-74-shipments-entity

 

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November 1, 2024: Vadim Yermolenko, 43, a dual U.S.-Russian national and resident of New Jersey, pleaded guilty to conspiracy to violate the Export Control Reform Act, conspiracy to commit bank fraud, and conspiracy to defraud the United States for his role in a transnational procurement and money laundering network that sought to acquire sensitive dual-use electronics for Russian military and intelligence services.

 

The defendant and his co-conspirators unlawfully purchased and exported highly sensitive, export controlled electronic components, some of which can be used in the development of nuclear and hypersonic weapons, quantum computing and other military applications.

 

https://www.justice.gov/opa/pr/new-jersey-resident-pleads-guilty-helping-russias-defense-sector-evade-us-export-controls

 

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November 13, 2024: Stanislav Romanyuk, 39, a citizen of Ukraine last residing in Estonia, was sentenced to 33 months in prison, followed by three years of supervised release, for his role in a scheme to violate U.S. export laws and regulations by attempting to smuggle a dual-use export-controlled item to Russia.

 

According to court documents and statements made in court, beginning in 2018, Romanyuk, who operated Estonia-based BY Trade OÜ, conspired with Vadims Ananics and Eriks Mamonovs, both citizens of Latvia who operated the Latvia-based corporation CNC Weld. Romanyuk, Ananics, and Mamonovs violated U.S. export laws and regulations with individuals in Russia and a Russian company to smuggle to Russia a 500 Series CPWZ Precision Jig Grinder that was manufactured in Connecticut.

 

https://www.justice.gov/opa/pr/ukrainian-national-involved-scheme-export-dual-use-high-precision-jig-grinder-russia and

https://www.bis.gov/news-updates/search?content_type=All&created=1&field_countries=All&field_learn_support_topics=All&field_news_updates_topic=All&news_search_query=&page=1&sort_by=created&sort_order=DESC

 

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November 14, 2024: George Semerene Quintero (Semerene), 61, of Venezuela, was sentenced to 30 months in prison to be followed by three years of supervised release for conspiring to violate the International Emergency Economic Powers Act (IEEPA) and for his role in a scheme to evade U.S. sanctions imposed on Petróleos de Venezuela S.A. (PdVSA), a Venezuelan state-owned oil company.

 

https://www.justice.gov/opa/pr/venezuelan-national-sentenced-sanctions-evasion-scheme and

https://www.bis.gov/news-updates/search?content_type=All&created=1&field_countries=All&field_learn_support_topics=All&field_news_updates_topic=All&news_search_query=&page=1&sort_by=created&sort_order=DESC

 

 

November 14, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $178,421 settlement with American Life Insurance Company (ALICO), a subsidiary of MetLife, Inc.  ALICO agreed to settle its potential civil liability for 2,331 apparent violations of OFAC sanctions on Iran.  The apparent violations related to insurance policies provided to entities in the United Arab Emirates that were owned or controlled by the Government of Iran.  The settlement amount reflects OFAC’s determination that the apparent violations were voluntarily self-disclosed and were not egregious.

 

https://ofac.treasury.gov/recent-actions/20241114_33

 

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November 15, 2024:  The U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) has notified Moheed Latif, Hamza Latif, and Abdu Latif Chaudhry, and their company M&M Wireless Communications, Inc. (“M&M), of its intention to initiate an administrative proceeding against the individuals and M&M pursuant to Section 766.3 of the Export Administration Regulations (“EAR”). The individuals and M&M jointly committed 94 Violations of the EAR, including 4 acts of Misrepresentation and Concealment of Facts (15 C.F.R 764.2(g)) and 90 acts of Failure to Comply with Recordkeeping requirements (15 C.F.R. 764.2(i)).

 

Misrepresentation and Concealment of Facts

 

On four occasions between November 24, 2020 and November 17, 2021, M&M made false and misleading statements and falsified material facts a to U.S. based freight forwarding company in preparing and submitting “export control documents” as defined in Section 772.1 of the EAR. M&M provided false information to file Electronic Export Information (“EEI”) on four separate occasions where BIS inspected and detained the shipment.

 

Failure to Comply with Recordkeeping Requirements

 

On May 10, 2022, the Office of Export Enforcement (“OEE”) served M&M with a BIS Administrative Subpoena requesting the records, including but not limited to, invoices, correspondence with foreign purchasers, air waybills, and bills of lading, in connection with 90 exports. On June 10, 2022, OEE received a response from M&M stating that no such records existed.

 

Settlement

 

U.S. Customs and Border Protection has imposed a $5.4 million penalty and $462,669 civil forfeiture action against M&M.

 

BIS and M&M have entered into a Settlement Agreement:

 

  • For a period of three (3) years, M&M shall be made subject to a three-year denial of its export privileges under the EAR.

 

  • M&M shall complete export compliance training on the EAR within twelve (12) months of date of order.

 

 

  • Verification of attendance of an export compliance training are made conditions to the granting, restoration, or continuing validity of any export license, license exception, permission, privilege granted, or to be granted to M&M.

 

 

https://efoia.bis.doc.gov/index.php/component/docman/?task=doc_download&gid=1648emid=

 

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November 26, 2024: Richard Shih, 77, the founder and former chief executive officer of a California-based international logistics and freight forwarding company with offices in Grapevine, Texas, pleaded guilty to conspiring to violate export laws by shipping goods to Chinese companies on the U.S. Department of Commerce’s Entity List.

 

Shih pleaded guilty to conspiring to violate the Export Control Reform Act, in violation of 18 U.S.C. § 371, which carries a maximum sentence of up to five years in federal prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

 

https://www.justice.gov/opa/pr/founder-us-freight-forwarding-company-pleads-guilty-conspiring-illegally-export-goods-united

 

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November 26, 2024: On Nov. 20 in the District of Oregon, Sanjay Kaushik, 57, of India, was indicted for conspiring to export controlled aviation components with dual civilian and military applications to end users in Russia, in violation of the Export Control Reform Act. Kaushik was also charged with attempting to illegally export a navigation and flight control system from Oregon to Russia through India, and with making false statements in connection with an export. He was arrested in Miami, Florida, on Oct. 17, pursuant to a criminal complaint and arrest warrant issued by the District of Oregon.

 

If convicted, Kaushik faces maximum penalties of 20 years in prison and up to a $1 million for each count in the indictment. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

 

https://www.justice.gov/opa/pr/indian-national-charged-conspiring-illegally-export-us-aviation-components-russia

 

Sanctions

 

 

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

November 1, 2024: 89 Fed. Reg. 87279: In this final rule, the Bureau of Industry and Security (BIS) makes changes to the export controls against Russia and Belarus under the Export Administration Regulations (EAR). This final rule expands the scope of the Russian and Belarusian Industry Sector Sanctions by imposing controls on nine key precursors for riot control agents and a chemical weapon that Russia has deployed against Ukraine in violation of the Chemical Weapons Convention (CWC). This final rule also makes adjustments to exclusions, exceptions, and licensing policy for exports, reexports, or transfers (in-country) to certain components of the governments of Country Group A:5 and A:6 destinations that are in Russia and Belarus. Lastly, this final rule clarifies that the Russia/Belarus-Military End User and Procurement Foreign-Direct Product (FDP) rule and the EAR’s other Entity List FDP rules’ license requirements extend to or within any destination or to any end user or party that otherwise meets the criteria. This final rule is being published concurrently with a BIS final rule, “Additions and Revisions of Entities to the Entity List” (RIN 0694-AJ94), which includes additional changes related to export controls related to Russia and Belarus.

https://www.federalregister.gov/documents/2024/11/01/2024-25445/implementation-of-additional-export-controls-against-russia-and-belarus-under-the-export and

https://www.bis.gov/news-updates/search?content_type=All&created=1&field_countries=All&field_learn_support_topics=All&field_news_updates_topic=All&news_search_query=&sort_by=created&sort_order=DESC

 

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

 

November 6, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated one individual and one entity who support a corrupt patronage network in Bosnia and Herzegovina (BiH) that attempted to evade U.S. sanctions. This network is directly linked to U.S.-designated Igor Dodik (Igor), the son of Milorad Dodik (Dodik), the U.S.-designated President of BiH’s Republika Srpska (RS), one of two entities that make up BiH. For years, Dodik has used his official position to accumulate personal wealth through companies linked to himself and Igor. This corruption has contributed to an undermining of public confidence in BiH state institutions and the rule of law.

 

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) also issued Balkans-related General License (No. 5A), “Authorizing Certain Transactions Involving Pumps Manufactured or Distributed by Kaldera Company EL PGP d.o.o. or Elpring d.o.o. Laktasi for the Treatment or Distribution of Drinking Water.”

 

GENERAL LICENSE NO. 5A: Authorizing Certain Transactions Involving Pumps Manufactured or Distributed  by Kaldera Company EL PGP d.o.o. or Elpring d.o.o. Laktasi for the Treatment or Distribution of Drinking Water

 

  • All transactions prohibited by the Western Balkans Stabilization Regulations, 31 CFR part 588 (WBSR), that are ordinarily incident and necessary to the manufacture, distribution, operation, installation, or maintenance and repair of pumps manufactured or distributed by Kaldera Company EL PGP d.o.o. (Kaldera), Elpring d.o.o. Laktasi (Elpring), or any entity in which Kaldera or Elpring owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest, that are currently or are intended solely for use in the treatment or distribution of drinking water, are authorized.

 

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

 

  • Perisic, Vladimir of Bosnia and Herzegovina.

 

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

 

  • Elpring D.O.O. Laktasi, XVI of Bosnia and Herzegovina.

 

https://ofac.treasury.gov/recent-actions/20241106 and

https://home.treasury.gov/news/press-releases/jy2709 and

https://ofac.treasury.gov/media/933566/download?inline

 

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November 7, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC)  issued Venezuela General License 5Q, “Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After March 7, 2025,” and Venezuela General License 8O, “Authorizing Transactions Involving Petróleos de Venezuela, S.A. (PdVSA) Necessary for the Limited Maintenance of Essential Operations in Venezuela or the Wind Down of Operations in Venezuela for Certain Entities.”

 

GENERAL LICENSE NO. 5Q Authorizing Certain Transactions Related to the  Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After March 7, 2025

 

  • On or after March 7, 2025, 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.

 

 

GENERAL LICENSE NO. 😯 Authorizing Transactions Involving Petróleos de Venezuela, S.A. (PdVSA) Necessary for the Limited Maintenance of Essential Operations in Venezuela or the Wind Down of Operations in Venezuela for Certain Entities

 

  • All transactions and activities prohibited by Executive Order (E.O.) 13850 of November 1, 2018, as amended by E.O. 13857 of January 25, 2019, or E.O. 13884 of August 5, 2019, each as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), that are ordinarily incident and necessary to the limited maintenance of essential operations, contracts, or other agreements, that: (i) are for safety or the preservation of assets in Venezuela; (ii) involve PdVSA or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest; and (iii) were in effect prior to July 26, 2019, are authorized through 12:01 a.m. eastern daylight time, May 9, 2025, for the following entities and their subsidiaries (collectively, the “Covered Entities”):

 

  • Halliburton
  • Schlumberger Limited
  • Baker Hughes Holdings LLC
  • Weatherford International, Public Limited Company

 

Note to paragraph (a). Transactions and activities necessary for safety or the preservation of assets in Venezuela that are authorized by paragraph (a) of this general license include: transactions and activities necessary to ensure the safety of personnel, or the integrity of operations and assets in Venezuela; participation in shareholder and board of directors meetings; making payments on third-party invoices for transactions and activities authorized by paragraph (a) of this general license, or incurred prior to April 21, 2020, provided such activity was authorized at the time it occurred; payment of local taxes and purchase of utility services in Venezuela; and payment of salaries for employees and contractors in Venezuela.

 

(b) All transactions and activities prohibited by E.O. 13850, as amended, or E.O. 13884, each as incorporated into the VSR, that are ordinarily incident and necessary to the wind down of operations, contracts, or other agreements in Venezuela involving PdVSA or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, and that were in effect prior to July 26, 2019, are authorized through 12:01 a.m. eastern daylight time, May 9, 2025, for the Covered Entities.

 

https://ofac.treasury.gov/recent-actions/20241107 and

https://ofac.treasury.gov/media/933576/download?inline and

https://ofac.treasury.gov/media/933581/download?inline

 

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November 12, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Abdel Rahman Joma’a Barakallah (Barakallah) for his leadership role in the Rapid Support Forces (RSF), a primary party responsible for the ongoing violence against civilians in Sudan since April 2023. Barakallah led the RSF’s campaign in West Darfur, which was marked by credible claims of serious human rights abuses, including targeting of civilians, conflict-related sexual violence (CRSV), and ethnically motivated violence. This action is in furtherance of the United Nations Security Council’s November 8 designation of Barakallah and fellow RSF commander Osman Mohamed Hamid Mohamed, who was previously designated by the Department of the Treasury in May 2024.

 

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended the Burma Sanctions Regulations, 31 CFR part 525, to further implement E.O. 14014 and reissued them in their entirety. This regulatory amendment is currently available for public inspection with the Federal Register and will take effect upon publication in the Federal Register on November 13, 2024.

 

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

 

  • Barkallah, Abdel Rahman Joma’a of Sudan.

 

https://home.treasury.gov/news/press-releases/jy2710 and

https://ofac.treasury.gov/media/933591/download?inline and

https://ofac.treasury.gov/recent-actions/20241112

 

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November 13, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) published two new insurance-related FAQs (FAQ 1199 and FAQ 1200).

 

FAQ 1199:

 

Q: Can a claim be paid under a policy issued to a blocked individual or entity if the payment is to an innocent third-party (for example, the injured party in an automobile accident)?

A: The insurance company should contact OFAC for additional guidance. OFAC will work with you on the specifics of the case. Although authorizing payments to blocked persons is rarely aligned with the U.S. foreign policy and national security objectives of OFAC sanctions, circumstances may weigh in favor of authorizing payments to innocent third parties. Ultimately, the insurance policy itself is a blocked contract, so all otherwise prohibited dealings related to the policy would require OFAC authorization.

 

FAQ 1200:

 

Q: If a non-sanctioned person files a claim with their insurance company for a loss caused by a blocked person, such as a designated terrorist organization, is the insurance company permitted to pay the claim?

 

A: OFAC is aware that insurers at times receive claims from non-sanctioned persons in non-comprehensively sanctioned jurisdictions for losses caused by individuals or entities on OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List). For example, a U.S. insurance company may receive a claim request for death, injury, or property damage caused by a Specially Designated Global Terrorist. Under this scenario, the mere fact that a blocked person has caused the loss does not in and of itself create a blocked interest in the policy or any claim or payment under the policy, nor does it constitute a dealing involving the blocked person. Therefore, U.S. insurers may pay such claims to non-sanctioned recipients, provided the payment is not prohibited by other OFAC sanctions regulations (e.g., the recipient resides in a sanctioned jurisdiction and no other authorization applies). This guidance does not apply to scenarios in which a person is seeking reimbursement for payments that were made or will be made to a blocked person.

 

OFAC encourages insurers who receive claims for losses caused by a blocked person to conduct necessary due diligence to ensure there are no other potential sanctions risks associated with making or facilitating related claim payments (e.g., the involvement of a blocked financial institution).

OFAC is aware that some insurance policies may include subrogation rights, which provide a legal right for the insurer to pursue reimbursement from the liable third-party for payment of the claim. The mere existence of such rights in a situation involving a loss caused by a blocked person does not create an interest of the blocked person in the policy or claims made under the policy. However, claims paid as described above and all other obligations of the insurer on behalf of the insured (or their non-sanctioned beneficiaries) under a given policy must not be contingent on the successful pursuit of a subrogated claim by the insurer against a blocked person.

 

OFAC does not require U.S. persons to obtain a specific license to initiate legal proceedings against a blocked person. For example, a U.S. attorney, insurer, or other service provider initiating arbitral proceedings against a Specially Designated Global Terrorist does not require a specific license. In most OFAC programs, however, a license would generally be required to enter a settlement agreement with a blocked person, to accept payment from a blocked person, or to enforce an order or award transferring blocked property. Please see the relevant OFAC implementing regulations and the Sanctions Programs and Country Information page on OFAC’s website for further program-specific information. For guidance on how to request and apply for a specific license, please see 31 CFR § 501.801 and the License Application page on OFAC’s website.

 

https://ofac.treasury.gov/recent-actions/20241113 and

https://ofac.treasury.gov/faqs/1199 and

https://ofac.treasury.gov/faqs/1200

 

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November 14, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 26 companies, individuals, and vessels associated with the Al-Qatirji Company, a Syrian conglomerate responsible for generating hundreds of millions of dollars in revenue for Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and the Houthis through the sale of Iranian oil to Syria and the People’s Republic of China (PRC). Previously designated for its role in facilitating the sale of fuel between the Syrian regime and the Islamic State of Iraq and Syria (ISIS), the Al-Qatirji Company has morphed into one of the main channels through which the IRGC-QF generates revenue and funds its regional proxy groups. OFAC is expanding its targeting of Al-Qatirji’s network and its fleet of vessels to inhibit the IRGC-QF from benefiting from this relationship.

 

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

 

  • Katerji, Abbas of Syria; and
  • Qatirji, Muhammad Agha Ahmed Rashdi of Syria.

 

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

 

  • Amitis Jazireh Ship Management Co LLC of Iran;
  • Bluespectrum Shipping S.A. of Panama;
  • Elias Shipping & trading Group SA of Panama;
  • Moshtaq Tejarat Sanat Co JSC of Iran;
  • Nativa Management Ltd of the Marshall Islands;
  • Pearl Shipping & Trading Ltd of Lebanon;
  • Salina Ship Management PVT Ltd of India;
  • Softwater Naviagtion Holding Ltd of the Marshall Islands; and
  • Veline Shiptrade Incorporated of Seychelles.

 

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

 

  • Baron (8RCB2) Chemical/Products Tanker Guyana flag; Vessel Registration Identification IMO 9080493; MMSI 667001798 (vessel);
  • Celine 3E2126) Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9305609; MMSI 352001369 (vessel);
  • Chloe (8RAX1) Crude Oil Tanker Guyana flag; Vessel Registration Identification IMO 9173745; MMSI 750656000 (vessel);
  • Eline (8PAA5) Crude Oil Tanker Barbados flag; Vessel Registration Identification IMO 9292486; MMSI 314856000 (vessel);
  • Joel (T8A4642) Crude Oil Tanker Palau flag; Vessel Registration Identification IMO 9198094; MMSI 511101321 (vessel);
  • Lelia (8PAB1) Crude Oil Tanker Barbados flag; Vessel Registration Identification IMO 9258870; MMSI 314861000 (vessel);
  • Lotus (EPNF3) Crude Oil Tanker Iran flag; Vessel Registration Identification IMO 9203784; MMSI 422300300 (vessel);
  • Ramona (8RPE6) Crude Oil Tanker Guyana flag; Vessel Registration Identification IMO 9233222; MMSI 750925000 (vessel);
  • Rex 1 (3EUU2) Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9219056; MMSI 372979000 (vessel);
  • Romina (EPMH6) Crude Oil Tanker Iran flag; Vessel Registration Identification IMO 9114608; MMSI 422278900 (vessel); and
  • Star 5 (EPPV7) Crude Oil Tanker Iran flag; Vessel Registration Identification IMO 9150377; MMSI 422362100 (vessel).

 

https://home.treasury.gov/news/press-releases/jy2712 and

https://ofac.treasury.gov/recent-actions/20241114

 

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November 18, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Amana the Settlement Movement of Gush Emunim Central Cooperative Association Ltd (Amana), a settlement development organization that is involved with U.S.-sanctioned individuals and outposts that perpetrate violence in the West Bank, and its subsidiary Binyanei Bar Amana Ltd. This action, taken pursuant to Executive Order (E.O.) 14115, is part of an ongoing multilateral approach by the United States and its partners to hold accountable those who are threatening the peace, security, and stability of the West Bank. Amana has also been sanctioned by the United Kingdom and Canada.Top of Form

 

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issued West Bank-related General License 1, “Authorizing the Wind Down of Transactions Involving Entities Blocked on November 18, 2024.

 

GENERAL LICENSE NO. 1: Authorizing the Wind Down of Transactions Involving Entities Blocked on November 18, 2024

 

(a) All transactions prohibited by Executive Order (E.O.) 14115 that are ordinarily incident and necessary to the wind down of any transaction involving Amana The Settlement Movement Of Gush Emunim Central Cooperative Association Ltd (Amana), Binyanei Bar Amana Ltd (BBA), or any entity in which Amana or BBA owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern standard time, January 10, 2025, provided that any payment to a blocked person must be made into a blocked interest-bearing account and reported to the Office of Foreign Assets Control consistent with § 501.603 of the Reporting, Procedures and Penalties Regulations, 31 CFR part 501.

 

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

 

  • Koshlevsky, Shabtai of Israel;
  • Levi, Itamar Yehuda of Israel; and
  • Sabah, Zohar of Israel.

 

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

 

  • Amana The Settlment Movement of Gush Emunium Central Cooperative Association LTD of Israel;
  • Binyanei Bar Amana Ltd of Israel; and
  • Eyal Yehuda Company Ltd of Israel.

 

https://ofac.treasury.gov/recent-actions/20241118 and

https://home.treasury.gov/news/press-releases/jy2715 and

https://ofac.treasury.gov/media/933616/download?inline

 

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November 19, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a network of nine Mexican nationals involved in fentanyl, heroin, and other deadly drug trafficking and money laundering. Individuals designated in this network also engage in human smuggling in furtherance of their drug trafficking activities. Additionally, as members of the Cartel Jalisco Nueva Generacion (CJNG), some of the individuals sanctioned played a prominent role in the early stages of the U.S. opioid crisis, a leading factor driving the United States’ modern fentanyl crisis. CJNG is a violent Mexico-based drug trafficking organization responsible for a significant proportion of fentanyl and other deadly drugs trafficked into the United States.

 

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

 

  • Arias Ponce, Erandiny Jazim of Mexico;
  • Castaneda Meza, Giovanni of Mexico;
  • Castaneda Meza, Ivan Atzayacatl of Mexico;
  • Castaneda Meza, Juan Carlos of Mexico;
  • Catellanos Meza, Roberto of Mexico;
  • Catillo Lopez, Jose Adrian of Mexico;
  • Castillo Peinado, Araceli of Mexico;
  • Castro Alvarez, Jose Sinue of Mexico; and
  • Navarro Quezada, Luis Alonso of Mexico.

 

https://ofac.treasury.gov/recent-actions/20241119

 

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November 19, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated six senior Hamas officials, including the terrorist group’s representatives abroad, a senior member of the Hamas military wing, the Izz Al-Din Al-Qassam Brigades, as well as individuals involved in supporting the terrorist group’s fundraising efforts and weapons smuggling into Gaza.

 

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

 

  • Akari, Musa Daud Muhammad of Turkey;
  • Ghanimat, Abd Al-Rahman Ismail Abd Al-Rahman of Turkey;
  • Hamad, Gazi of Saudi Arabia;
  • Mari, Salama Aziz Muhammad of Turkey;
  • Naim, Basem of Palestine; and
  • Nazzal, Mohammad of Syria.

 

https://ofac.treasury.gov/recent-actions/20241119

 

*******

 

November 21, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took another major step in implementing commitments made by G7 leaders to curtail Russia’s use of the international financial system to further its war against Ukraine. OFAC’s action includes the designation of Gazprombank, more than 50 internationally connected Russian banks, more than 40 Russian securities registrars, and 15 Russian finance officials. OFAC also issued an alert describing sanctions risks related to Russia’s System for Transfer of Financial Messages (SPFS), which the Kremlin created and uses to evade sanctions.

 

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related GL 53A, “Authorizing Transactions for Diplomatic Missions of the Russian Federation Involving Gazprombank Joint Stock Company or Prohibited by Directive 4 under Executive Order 14024,” Russia-related GL 55C, “Authorizing Certain Services Related to Sakhalin-2,” Russia-related GL 113, “Authorizing the Wind Down of Transactions Involving Certain Financial Institutions Blocked on November 21, 2024,” and Russia-related GL 114, “Authorizing Certain Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Certain Entities Blocked on November 21, 2024.”

 

Additionally, OFAC issued two new Russia-related Frequently Asked Questions (FAQ 1201, FAQ 1202).

 

OFAC is also publishing a new, Russia-related Alert, “Sanctions Risk for Foreign Financial Institutions that Join Russian Financial Messaging System, System for Transfer of Financial Messages.”

 

GENERAL LICENSE NO. 53A: Authorizing Transactions for Diplomatic Missions of the Russian Federation Involving Gazprombank Joint Stock Company or Prohibited by Directive 4 under Executive Order 14024

 

(a) U.S. persons are authorized to engage in all transactions ordinarily incident and necessary to the official business of diplomatic or consular missions of the Government of the Russian Federation (“Russian missions”) that are prohibited by Executive Order (E.O.) 14024 and involve Gazprombank Joint Stock Company (Gazprombank), or any entity in which Gazprombank owns, directly or indirectly, a 50 percent or greater interest, or are 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.

 

GENERAL LICENSE NO. 55C: Authorizing Certain Services Related to Sakhalin-2

 

(a)  All transactions prohibited by the determination of November 21, 2022 made pursuant to section 1(a)(ii) of Executive Order (E.O.) 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, 2025, provided that the Sakalin-2 byproduct is solely for importation into Japan.

 

(b) All transactions prohibited by E.O. 14024 involving Gazprombank Joint Stock Company (Gazprombank) or any entity in which Gazprombank owns, directly or indirectly, a 50 percent or greater interest, that are related to the Sakhalin-2 project, including such transactions involving Sakhalin Energy LLC, are authorized through 12:01 a.m. eastern daylight time, June 28, 2025.

 

GENERAL LICENSE NO. 113: Authorizing the Wind Down of Transactions Involving Certain Financial Institutions Blocked on November 21, 2024

 

(a) All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of transactions involving the blocked persons listed in the Annex to this general license, and any entity in which those blocked persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern standard time, December 20, 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).

 

GENERAL LICENSE NO. 114: Authorizing Certain Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Certain Entities Blocked on November 21, 2024

 

(a) 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 standard time, December 20, 2024:

 

(1) Gazprombank Joint Stock Company;

(2) Interstate Bank; or

(3) 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.

 

(b) 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, November 21, 2024 are authorized through 12:01 a.m. eastern standard time, December 20, 2024.

 

(c) 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 21, 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 standard time, December 20, 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).

FAQ 1201:

 

Q: What authorizations exist for diplomatic or consular missions operating in Russia and Russian diplomatic or consular missions operating abroad?

 

A: The Office of Foreign Assets Control (OFAC) has issued several authorizations related to U.S. and third-country diplomatic or consular missions operating in Russia and Russian diplomatic or consular missions operating abroad.

 

FAQ 1202:

 

Q: Following the November 21, 2024 designation of Russian financial institutions, Treasury has now designated a significant number of financial institutions in Russia. Will this negatively impact the processing of personal, non-commercial remittances to or from Russia?

 

A: No. Treasury’s sanctions target Russian financial institutions that have continued to help Russia gain access to the critical goods it needs to prosecute its war in Ukraine. As a general matter, personal, non-commercial remittances are not the target of sanctions imposed by the United States on Russia.

 

There remain a number of non-sanctioned Russian banks, subsidiaries of foreign banks, and money service businesses that can continue to process legitimate transactions, including non-commercial, personal remittances.

 

U.S. and foreign financial institutions may continue to process transactions for activities, such as the facilitation of personal non-commercial remittances, that do not involve blocked persons and are not otherwise prohibited by OFAC. In addition, OFAC maintains various authorizations related to legitimate humanitarian activity and agricultural and medical trade, which include authorizations for dealings with certain sanctioned Russian financial institutions, such as General License (GL) 6D (authorizing transactions related to certain agricultural and medical activities); U.S. and foreign financial institutions may continue to process transactions for such authorized activities as well.

 

Please see link below for full list of sanctioned entities and individuals.

 

https://ofac.treasury.gov/recent-actions/20241121 and

https://home.treasury.gov/news/press-releases/jy2725 and

https://ofac.treasury.gov/media/933626/download?inline and

https://ofac.treasury.gov/media/933621/download?inline and

https://ofac.treasury.gov/media/933631/download?inline and

https://ofac.treasury.gov/media/933636/download?inline and

https://ofac.treasury.gov/faqs/1201 and

https://ofac.treasury.gov/faqs/1197 and

https://ofac.treasury.gov/media/933656/download?inline

 

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November 26, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned five Mexican individuals associated with the Gulf Cartel, one of Mexico’s most dangerous criminal organizations. Those designated are tied to the Gulf Cartel’s involvement in criminal activities associated with illegal, unreported, and unregulated (IUU) fishing, human smuggling, and narcotics trafficking in the Gulf of Mexico. IUU fishing often involves criminal activity, forced labor, and human rights abuses, and is often a revenue stream for criminal organizations. IUU fishing is also a threat to U.S. maritime security, as criminal organizations may use the same vessels for smuggling narcotics and humans across borders.

 

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

 

  • Carrillo Sapien, Ildelfonso of Mexico;
  • Decuir Garcia, Raul of Mexico;
  • Guerra Salinas, Ismael of Mexico;
  • Guerra Salinas, Omar of Mexico; and
  • Sierra Angulo, Franscisco Javier of Mexico.

 

https://ofac.treasury.gov/recent-actions/20241126 and

https://home.treasury.gov/news/press-releases/jy2729

 

*******

 

November 27, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 21 security and cabinet-level officials aligned with Nicolas Maduro. These individuals are sanctioned pursuant to Executive Order (E.O.) 13692, as amended, for being current or former officials of the Government of Venezuela. They have supported and carried out Maduro’s orders to repress civil society in his efforts to fraudulently declare himself the winner of Venezuela’s July 28 presidential election, thus ignoring the will of the overwhelming majority of Venezuelan voters who elected Edmundo Gonzalez Urrutia as their next president.

 

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

 

  • Aigster Villamizar, Carlos Eduardo of Venezuela;
  • Balestrini Jaramillo, Angel Daniel of Venezuela;
  • Cabello Contreras, Daniella Desiree of Venezuela;
  • Castillo Bolle, William Alfredo of Venezuela;
  • Coronado Millan, Anibal Eduardo of Venezuela;
  • Fernandez Alayon, Jesus Ramon of Venezuela;
  • Garcia Zerpa, Julio Jose of Venezuela;
  • Herrera Duarte, Jose Yunior of Venezuela;
  • Lizano Colmenter, Pablo Ernesto of Venezuela;
  • Marcano Tabata, Javier Jose of Venezuela;
  • Matheus Melendez, Alberto Alexander of Venezuela;
  • Menendez Prieto, Ricardo Jose of Venezuela;
  • Nazaret Nanez Contreras, Freddy Alfred of Venezuela;
  • Perez Davila, America Valentina of Venezuela;
  • Reyes Rivero, Luis Gerardo of Venezuela;
  • Rivera Bastardo, Jose Alfredo of Venezuela;
  • Rodriguez Cabello, Alexis Jose of Venezuela;
  • Rodriguez Dias, Dilio Guilermo of Venezuela;
  • Romero Bolivar, Orlando Ramon of Venezuela;
  • Santiago Servigna, Ruben of Venezuela; and
  • Villamizar Gomez, Jesus Rafael of Venezuela.

 

https://home.treasury.gov/news/press-releases/jy2730 and

https://ofac.treasury.gov/recent-actions/20241127

 

LATEST EXPORT CONTROLS AND COMPLIANCE UPDATE NOVEMBER 2024 Read More »

LATEST EXPORT CONTROLS AND COMPLIANCE UPDATE OCTOBER 2024

This newsletter is a listing of the latest changes in export control regulations through October 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 Continued the National Emergency with Respect to the Situation in and in Relation to Syria

 

October 10, 2024: On October 14, 2019, by Executive Order 13894, 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 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 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 national emergency declared in Executive Order 13894 of October 14, 2019, must continue in effect beyond October 14, 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 13894 with respect to the situation in and in relation to Syria.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/10/10/notice-on-the-continuation-of-the-national-emergency-with-respect-to-the-situation-in-and-in-relation-to-syria-4/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/page/2/

 

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President Biden Continued the National Emergency with Respect to the Democratic Republic of the Congo

 

October 11, 2024: On October 27, 2006, by Executive Order 13413, 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 foreign policy of the United States constituted by the situation in or in relation to the Democratic Republic of the Congo, which has been marked by widespread violence and atrocities that continue to threaten regional stability.  The President took additional steps to address this national emergency in Executive Order 13671 of July 8, 2014.

 

The situation in or in relation to the Democratic Republic of the Congo continues to pose an unusual and extraordinary threat to the foreign policy of the United States.  For this reason, the national emergency declared in Executive Order 13413 of October 27, 2006, as amended by Executive Order 13671 of July 8, 2014, must continue in effect beyond October 27, 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 with respect to the situation in or in relation to the Democratic Republic of the Congo declared in Executive Order 13413, as amended by Executive Order 13671.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/10/11/notice-on-the-continuation-of-the-national-emergency-with-respect-to-the-democratic-republic-of-the-congo-4/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/

 

*******

 

President Biden Continued the National Emergency with Respect to Sudan

 

October 25, 2024: On November 3, 1997, by Executive Order 13067, the President declared a national emergency with respect to Sudan 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 and foreign policy of the United States posed by the actions and policies of the Government of Sudan.  On April 26, 2006, by Executive Order 13400, the President determined that the conflict in Sudan’s Darfur region posed an unusual and extraordinary threat to the national security and foreign policy of the United States, expanded the scope of the national emergency declared in Executive Order 13067, and ordered the blocking of property of certain persons connected to the Darfur region.  On October 13, 2006, by Executive Order 13412, the President took additional steps with respect to the national emergency declared in Executive Order 13067 and expanded in Executive Order 13400.  In Executive Order 13412, the President also took steps to implement the Darfur Peace and Accountability Act of 2006 (Public Law 109-344).

 

On January 13, 2017, by Executive Order 13761, the President found that positive efforts by the Government of Sudan between July 2016 and January 2017 improved certain conditions that Executive Orders 13067 and 13412 were intended to address.  Given these developments, and in order to encourage the Government of Sudan to sustain and enhance these efforts, section 1 of Executive Order 13761 provided that sections 1 and 2 of Executive Order 13067 and the entirety of Executive Order 13412 would be revoked as of July 12, 2017, provided that the criteria in section 12(b) of Executive Order 13761 had been met.

 

On July 11, 2017, by Executive Order 13804, the President amended Executive Order 13761, extending until October 12, 2017, the effective date in section 1 of Executive Order 13761.  On October 12, 2017, pursuant to Executive Order 13761, as amended by Executive Order 13804, sections 1 and 2 of Executive Order 13067 and the entirety of Executive Order 13412 were revoked.

 

On May 4, 2023, by Executive Order 14098, the President further expanded the scope of the national emergency declared in Executive Order 13067, finding that the situation in Sudan, including the military’s seizure of power in October 2021 and the outbreak of inter-service fighting in April 2023, constituted an unusual and extraordinary threat to the national security and foreign policy of the United States.

 

The crisis that led to the declaration of a national emergency in Executive Order 13067 of November 3, 1997; the expansion of the scope of that emergency in Executive Order 13400 of April 26, 2006; the taking of additional steps with respect to that emergency in Executive Order 13412 of October 13, 2006, Executive Order 13761 of January 13, 2017, and Executive Order 13804 of July 11, 2017; and the further expansion of the scope of that emergency in Executive Order 14098 of May 4, 2023, has not been resolved.  The policies and actions of the Government of Sudan, and the situation in Sudan and Darfur, continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.  For this reason, the national emergency declared in Executive Order 13067, as expanded by Executive Orders 13400 and 14098, must continue in effect beyond November 3, 2024.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/10/25/notice-on-the-continuation-of-the-national-emergency-with-respect-to-sudan-4/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/

 

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

 

Changes to the International Traffic in Arms Regulations and U.S. Munitions List Categories IV and XV

 

October 23, 2024: 89 Fed. Reg. 84482: The Department of State published proposed rule to amend the International Traffic in Arms Regulations (ITAR). This rule proposed to amend § 121.0 and § 121.1 of the ITAR and add new exemptions to § 126.8. These proposed changes would revise existing USML definitions, along with USML Categories IV and XV, and certain entries under USML Categories VI, VII, VIII, XI, XIII, and XX. Further, the proposed addition to § 126.8 would create three new licensing exemptions intended to promote U.S. industrial base participation in civil space activity commensurate with national security and foreign policy goals.

 

With this rule, the Department proposed to amend specific paragraphs within the USML to address controls that were identified as potentially requiring addition, removal, revision, or clarification. The Department proposed the following general types of changes to the ITAR: (1) USML Modernization Efforts, (2) Civil Space-Related License Exemptions and Special Licensing Provisions, and (3) USML Category Revisions.

 

USML Modernization Efforts:

 

The Department is modernizing the USML, specifically to improve its usability, clarity, and consistency in structure and regulatory text. This proposed rule contains revisions to that effect in the following areas:

  • Revision and Removal of Notes and Expansion of § 121.0 Definitions;
  • Removal of Specially Designed as a Criterion in Certain Paragraphs;
  • Consistency in Construction; and
  • Clarification of Internal References and Standardization of Regulatory Text tructure of USML Categories.

 

Civil Space-Related License Exemptions and Special Licensing Provisions:

 

The Department proposed to add to part 126 three new licensing exemptions intended to promote U.S. industrial base participation in civil space activity commensurate with its national security and foreign policy goals. The Department further proposed to codify a fourth licensing exemption currently provided as guidance in an existing note within the USML.

 

Official Space Agency Exemption

 

This license exemption, proposed to be in a new § 126.8(a), would authorize certain transfers of defense articles and defense services when conducted entirely within the scope of an official U.S. government agency space program listed in § 126.8(a)(2). While the proposed list of articles and services subject to the exemption applies to several NASA spacecraft, the Department emphasizes this licensing exemption does not similarly apply to the space launch vehicles for these spacecraft. The Department assesses the underlying launch vehicle technology is independent of the spacecraft that potentially warrant a licensing exemption, in part due to the implicitly civil, multilateral, or scientific mission of these specific spacecraft.

 

Space Activity Exemption

 

This exemption, proposed to be in a new § 126.8(b), consists of four provisions. The first would authorize certain transfers of defense articles and § 120.32(a)(2) defense services supporting space launches. Certain transfers of electrical connectors would be eligible for this exemption, as the Department assesses that, while they continue to warrant regulation by this subchapter, certain transfers of these articles may be conducted under a licensing exemption without risk to U.S. national security and foreign policy interests.

 

The Department requested public comment on additional space technologies having both military and commercial applications that should be considered for incorporation into this exemption. Comments on the benefit of such an expansion of the exemption to the regulated community and any perceived or recommended proliferation risk mitigations are also requested.

 

The second provision would authorize certain services related to the transmission of space launch vehicle telemetry, to improve safety of flight and support the growing space launch industry. The Department proposed to limit this authorization to space launch vehicles since similar data can be used by rockets and missiles to deliver weapons of mass destruction.

 

The third provision would authorize certain services to support collaboration with foreign persons when on-orbit defense articles are utilized in support of fundamental research, as defined in § 120.34(a)(8).

 

The fourth provision would authorize certain services associated with radiofrequency transmissions using on-orbit defense articles, including geolocating certain automated information broadcasts, emergency transmissions, and cellular transmissions.

 

Space Tourism and Research Exemption

This exemption, proposed to be in a new § 126.8(c), would authorize certain transfers of manned spacecraft for space tourism or in support of fundamental research, as defined in § 120.34(a)(8).

 

The Department noted the proposed research exemptions apply specifically to certain basic and applied research, and not to the engineering development phase of research and development. Similarly, they do not apply to the design and development of a defense article or to research either not intended for publication or subject to publication restrictions or non-disclosure agreements.

 

Special Licensing Provision for Defense Articles Incorporated Into Spacecraft Subject to the EAR

This exemption, proposed to be in a new § 126.8(d), would authorize certain transfers of defense articles while they are incorporated into spacecraft subject to the EAR. This is consistent with two current notes (note 2 to paragraph (e) and note 2 to paragraph (e)(17)) the Department proposed to remove from Category XV.

 

Satellite Signature Reduction

 

In addition to the proposed exemptions previously described, the Department also requests public comment on specific regulatory changes or clarifications to facilitate industry efforts to reduce the apparent magnitude, as viewed from Earth, of satellite brightness. Commenters should be cognizant of the Department’s continued need to control signature reduction technologies that provide a critical military or intelligence advantage, including technologies to reduce spacecraft signatures as viewed in, or between, orbits.

 

USML Category Revisions:

 

USML Category IV

 

The Department proposed to update the title of Category IV to better reflect the items described therein and to avoid the potential misinterpretation that the list of items in the title is exhaustive.

 

Paragraphs (a)(1) and (2)

 

The Department proposed minor adjustments to USML Category IV(a)(1) and (2) for consistency in construction of the control text.

 

The proposed changes to USML Category IV relate to the controls on the following items:

 

  • Man-Portable Air Defense Systems (MANPADS);
  • Anti-Tank Missiles;
  • Rockets;
  • Bombs;
  • Mines;
  • Grenades;
  • Loitering Munitions;
  • Kinetic Kill Vehicles;
  • Post-Boost Vehicles;
  • Hypersonic Glide Vehicles;
  • Re-Entry Vehicles;
  • Range and Payload;
  • Model Rockets;
  • Launch Platforms;
  • Propulsion Systems;
  • Rocket Stages, Motors, and Engines;
  • Air-Breathing Engines and Pressure Gain Combustion-Based Propulsion Systems;
  • Flight Control Systems, Guidance Systems, and Attitude Control Equipment;
  • Thrust Vector Control Systems;
  • Thermal Protection Systems (g., Heat Shields and Heat Sinks);
  • Self-Destruct Systems;
  • Separation Systems;
  • SAFF Components;
  • Seeker Systems;
  • Test Equipment; and
  • Non-Nuclear Warheads.

 

Changes to USML Category IV(c): The Department notes it will address issues related USML Category IV(c) in a separate rulemaking. However, the Department still welcomes comments related to this paragraph.

 

Changes to USML Category IV(h):

The Department proposed to modify USML Category IV(h) to economize the text of its subordinate paragraphs. Currently, some subordinate paragraphs of (h) require an article be used in an end item described elsewhere in Category IV. The Department proposed to clearly stipulate in paragraph (h) that the articles in its subordinate paragraphs are for end-items described elsewhere in Category IV, thereby eliminating the need to repeat that requirement in each of its subordinate paragraphs. Consistent with its intent to move systems from paragraph (h) to paragraph (e), the Department also proposed to delete the reference to systems and subsystems in paragraph (h).

 

The proposed changes to USML Category IV(h) relate to the controls on the following items:

 

  • Grip Stocks for MANPADS;
  • Nozzles, Nozzle Throats, Nose Tips, Nose Fairings, and Aerospikes;
  • Engine or Motor Mounts;
  • Combustion Chambers;
  • Injectors;
  • Penetration Aids;
  • Motor Cases;
  • Liners and Insulation;
  • Radomes, Sensor Windows, Antenna Windows, and Embedded Antennae;
  • Payload Fairings;
  • Launch Canisters;
  • Fuzes;
  • Propellant Tanks and Altimeters;
  • Umbilical and Interstage Electrical Connectors; and
  • Turbo Pumps.

 

USML Category IV(i) Technical Data and Defense Services: The Department proposed minor modifications to USML Category IV(i) for consistency in construction of the control text.

 

USML Category VI, VII, VIII, and XX Conforming Changes:

 

The Department proposed to modify USML Category VI(f)(6) and (7) to avoid overlap in controls between those paragraphs and the proposed revision and intent of Category IV(b). As such, the Department proposed to clarify these paragraphs only describe certain integration equipment, aircraft launch and recovery equipment, and certain shipborne defensive systems, not articles described in Category IV(b). The Department further proposed to split paragraph (f)(6) into three subordinate paragraphs for ease of parsing and adjust the “MT” designations for consistency with the MTCR Annex.

 

 

Similarly, the Department proposed to modify USML Category VII(g)(2) to avoid overlap in controls between that paragraph and the proposed revision and intent of Category IV(b), and therefore proposed to clarify paragraph (g)(2) only describes articles not already described in Category IV(b).

 

The Department proposed to add USML Category VII(g)(15) and modify USML Category VIII(h)(6) to ensure items designed for integrating certain defense articles are described in the same USML category as the platform they are being integrated into and to avoid ambiguity about whether they are controlled in USML Category IV(b).

 

Subsequent to these changes, these paragraphs will only describe articles that assist in the integration between a vehicle and either a launching system or a self-launching munition.

 

The Department also proposed minor changes to USML Categories: XI; XII; and XIII. (refer to link at end of article)

 

USML Category XV

 

The proposed changes to USML Category XV relate to the controls on the following items:

 

  • Spacecraft;
  • Detection or Mitigation of a Nuclear Detonation;
  • Detect and Track Objects;
  • Spacecraft for Signals Intelligence;
  • Constellations;
  • Space-Based Weapons;
  • Spacecraft With Remote Sensing Capabilities;
  • Radar Remote Sensing;
  • Position, Navigation, and Timing;
  • Autonomous Collision Avoidance;
  • Suborbital Craft;
  • Inspection or Surveillance;
  • Classified Spacecraft;
  • Articles Jettisoned From Another Spacecraft;
  • Ground Control Systems;
  • Movement of Systems;
  • Active Cooling Systems;
  • Vibration Suppression Systems;
  • Attitude Determination and Control Systems;
  • Thermal Protection Systems (g., Heat Shields and Heat Sinks);
  • Spacecraft Propulsion;
  • Spacecraft Parts, Components, Accessories, and Attachments;
  • Antennas;
  • Optics;
  • Focal Plane Arrays;
  • Optical Bench Assemblies;
  • Directed Energy Systems;
  • Control Moment Gyroscopes;
  • Monolithic Microwave Integrated Circuits (MMICs);
  • Oscillators for Radar;
  • Star Trackers;
  • Primary, Secondary, or Hosted Payloads; and
  • Payloads Developed with Department of Defense Funding.

 

The Department proposed the following additions to USML Category XV:

 

  • The Department proposed to add paragraphs (a)(14) through (16). These paragraphs designate, respectively, spacecraft capable of non-cooperative grappling or docking, in-orbit construction of other defense articles, and deploying multiple spacecraft into different orbits.
    • The technology required to facilitate non-cooperative docking is likely to be used in an adversarial manner. A spacecraft capable of in-orbit construction of other defense articles represents a critical logistical advantage. And spacecraft that can rapidly deploy multiple spacecraft into multiple different orbits provide a critical military or intelligence advantage when compared to commercial systems that may be able to achieve the same result over a much longer timeframe.
  • Addition of USML Category XV(e)(22). The Department proposed to add a new paragraph at USML Category XV(e)(22) for technologies that facilitate the signature reduction of in-orbit spacecraft observations. The proposed regulatory text reflects the Department’s intent to exclude technology used only to minimize light pollution, as seen from the ground.
  • Notes USML Category XV(e): The Department proposed to eliminate note 1 to USML Category XV(e), as the jurisdiction of articles not described in paragraph (e) is already addressed in the order of review at § 120.11. Note 2 to paragraph (e) delegates the licensing of articles described in paragraph (e) when integrated into a spacecraft subject to the EAR. The Department proposed a licensing exemption in § 126.8 to codify this exemption and to facilitate the deletion of note 2. The Department also proposed to delete notes 3 and 4 to paragraph (e), as the proposed revisions to USML Category XV remove all but one reference to space-qualified and the Department assesses notes 3 and 4 are no longer required to identify space-qualified atomic clocks.

 

USML Category XV(f) Technical Data and Defense Services:

The Department proposed to modify USML Category XV(f) by incorporating guidance currently provided in notes 1 through 3 to paragraph (f), which is not already included in the definition of technical data at § 120.33 or the proposed definition of “spacecraft housekeeping data and output at § 121.0.” The Department also proposed to delete the explanatory information regarding defense services found in the control text, as it assesses such information does not provide substantial guidance beyond the order of review provided at § 120.11 and the USML text, and similar redundancy is not provided in other USML Categories.

 

Please see the federal register notice below for the complete proposed revisions to ITAR and USML Categories IV and XV.

 

https://www.federalregister.gov/documents/2024/10/23/2024-24091/international-traffic-in-arms-regulations-itar-us-munitions-list-categories-iv-and-xv 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

 

October 7 through 31, 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:

  • Name change of Eurocopter Kazkahstan Engineering LLP to Airbus Helicopters Kazakhstan Engineering due to merger;
  • Name change of Celemetrix Australia Pty Ltd to Trescal Australia Pty Ltd due to merger;
  • Name change of Delom Services Inc. to Wajax Limited due to corporate rebranding;
  • Name change of Bayanat AI PLC and AI Yah Satellite Communications Company PJSC to Space42 PLC due to merger;
  • Name change of WESCO Integrated Supply Polska Sp. z. o. o. to Vallen Integrated Supply Polska Sp z. o.o. due to merger.
  • Address change of ALTEN LTD from 41 Moorgate, London EC2 R6PP, United Kingdom to Saffron House, 6-10 Kirby Street, London EC1N 8TS, United Kingdom.
  • Address change of Filial af GE Aviation Systems North America LLC’s Denmark operations from Osterfaelled Torv 3, Copenhagen 2100, Denmark to Frederiksborggade 15, 3 Copenhagen 1358, Denmark.

 

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Department of Defense, Defense Security Cooperation Agency (DSCA)

 

DSCA Notifies Congress of Potential FMS Sale To India

 

October 7, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of India has requested to buy fifty-three (53) MK 54 MOD 0 Lightweight Torpedo all up rounds. The following non-MDE items will also be included: Recoverable Exercise Torpedoes (REXTORP); air launch accessories; classified and unclassified torpedo spare parts; torpedo containers; torpedo support equipment, including test equipment and tools; torpedo support services; classified and unclassified books and other publications; other technical assistance, including technical support, technical program management, infrastructure support, test equipment sustainment, exercise firing assistance, contract management, and initial follow-on-technical support (FOTS); in-country torpedo training; related equipment and services; and other related elements of logistics and program support. The estimated total cost is $175 million.

 

https://www.dsca.mil/press-media/major-arms-sales/india-mk-54-mod-0-lightweight-torpedoes

 

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DSCA Notifies Congress of Potential FMS Sale To Italy

 

October 7, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Italy has requested to buy the Electronic Attack (EA)-37B mission system, consisting of the following non-Major Defense Equipment: Network Centric Collaborative Targeting (NCCT) systems; System Control and Monitoring subsystems; Radio Frequency Receiver (RFR) subsystems; Software-defined Radio (SDR) subsystems; Counter Radar Assembly; Array Panels; AN/ARC-210 RT-2036 radios; KG-250 In-line Network Encryptors; KY-100 Narrow/wideband Terminals; KIV-77 Mode 4/5 Identification Friend or Foe (IFF); AN/PYQ-10C Simple Key Loaders; integration and test support and equipment; aircraft support and support equipment; secure communications equipment, precision navigation, and cryptographic devices; major and minor modifications, maintenance, and maintenance support; spare parts, consumables and accessories, and repair and return support; classified and unclassified software delivery and support; classified and unclassified publications and technical documentation; personnel training and training equipment; facilities and construction support; transportation and airlift 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. The estimated total cost is $680 million. The principal contractor will be BAE Systems, located in Hudson, NH. The U.S. government is not aware of any offset agreements in connection with this potential sale

 

https://www.dsca.mil/press-media/major-arms-sales/italy-electronic-attack-mission-system

 

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DSCA Notifies Congress of Potential FMS Sale To Romania

 

October 7, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Romania has requested to buy four (4) AN/MPQ-64 F1 Sentinel radar systems. The following non-MDE items will also be included: IPS 250X High Assurance Internet Protocol Encryptors (HAIPE); KIV-77 Identification Friend-or-Foe (IFF) crypto appliqué with Mode 5 and Mode S capability; AN/PSN-13 Defense Advanced Global Positioning System (GPS) Receivers (DAGR) with Selective Availability Anti-Spoofing Module (SAASM); AN/PYQ-10 Simple Key Loaders (SKL); support equipment; spare and repair parts, consumables, accessories and repair and return support; classified software; classified command and control (C2) systems and communications and data supply systems; prime movers; new equipment training; weapon system support and test equipment; publications and technical documentation; personnel training and training equipment; classified software; classified books and publications; 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 $110 million. The principal contractor will be RTX Corporation, located in Andover, MA. There are no known offset agreements in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/romania-sentinel-radar-systems

 

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DSCA Notifies Congress of Potential FMS Sale To Saudi Arabia

 

October 11, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Kingdom of Saudi Arabia has requested to buy two thousand five hundred three (2,503) AGM-114R3 Hellfire II missiles (3 for lot acceptance testing). Also included are support and test equipment; integration and test support; spare and repair parts; software delivery and support; publications and technical documentation; personnel training and training equipment; U.S. Government and contractor engineering, technical and logistics support services; storage; and other related elements of logistical and program support. The total estimated cost is $655 million. The principal contractor will be The Lockheed Martin Corporation, Troy, AL. 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/kingdom-saudi-arabia-agm-114r3-hellfire-ii-missiles

 

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DSCA Notifies Congress of Potential FMS Sale To Saudi Arabia

 

October 11, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Kingdom of Saudi Arabia has requested to buy ten thousand (10,000) M456 series, 105mm, High Explosive Anti-Tank Tracer cartridges. Also included are various types of tanks, howitzer, and machine gun ammunition; propelling charges; fuses; primers; grenades; support and test equipment; integration and test support; spare and repair parts; software delivery and support; publications and technical documentation; personnel training and training equipment; U.S. Government and contractor engineering, technical and logistics support services; storage; and other related elements of logistical and program support. The total estimated cost is $139 million. Implementation of this proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to Saudi Arabia.

 

https://www.dsca.mil/press-media/major-arms-sales/kingdom-saudi-arabia-ammunition-artillery-systems-machine-guns-and

 

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DSCA Notifies Congress of Potential FMS Sale To Saudi Arabia

 

October 11, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Kingdom of Saudi Arabia has requested to buy two-hundred twenty (220) AIM-9X Block II Sidewinder Tactical Missiles. Also included are missile containers; support equipment; spares; missile software; training; and U.S. Government and contractor technical assistance; and other related elements of logistics and program support. The estimated total cost is $251.8 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/kingdom-saudi-arabia-aim-9x-block-ii-sidewinder-missiles

 

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DSCA Notifies Congress of Potential FMS Sale To United Arab Emirates

 

October 11, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of the United Arab Emirates has requested to buy two hundred fifty-nine (259) Guided Multiple Launch Rocket System (GMLRS) M31A1 Unitary Pods (1,554 missiles at six missiles per pod) and two hundred three (203) Army Tactical Missile Systems (ATACMS) M57 Unitary Missiles. Also included are publications; personnel training and training equipment; software development; U.S. Government and contractor engineering, technical and logistics support services; and other related elements of logistical and program support. The estimated total cost is $1.2 billion. The principal contractor will be Lockheed Martin, Grand Prairie, TX. There are no known offset agreements proposed in connection with this potential sale. Implementation of this proposed sale will require the temporary assignment of four (4) U.S. Government and four (4) U.S. contractor representatives to the United Arab Emirates for a duration of no longer than ten (10) days to support new software equipment training and the stockpile reliability program.

 

https://www.dsca.mil/press-media/major-arms-sales/united-arab-emirates-gmlrs-and-atacms-munitions

 

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DSCA Notifies Congress of Potential FMS Sale To The Netherlands

 

October 16, 2024: : The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government the Netherlands has requested to buy the following non-Major Defense Equipment items: AN/PRC-117G radios; AN/PRC-152A radios; AN/PRC-160 radios; AN/PRC-163 radios; AN/PRC-167 radios; tactical key loaders; network encryptors; Government and contractor technical assistance; spares; and other related elements of logistics and program support. The estimated total cost is $1.42 billion. The principal contractor will be L3Harris Global Communications, Inc., located in Rochester, NY. The purchaser typically requests offsets. Any offset agreement will be defined in negotiations between the purchaser and the principal contractor. Products and services of TrellisWare Technologies, Inc., located in San Diego, CA, and ViaSat, Inc., located in Carlsbad, CA are included in the Foreign Military Sale.

 

https://www.dsca.mil/press-media/major-arms-sales/netherlands-radio-equipment

 

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DSCA Notifies Congress of Potential FMS Sale To Japan

 

October 18, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government Japan has requested to buy up to two hundred twelve (212) Rolling Airframe Missiles (RAM) Block 2B, RIM-116E. The following non-MDE items will also be included: RAM Guided Missiles Round Pack (GMRP); Tri-Pack shipping and storage containers; training equipment; operator manuals and technical documentation; U.S. Government and contractor engineering, technical, and logistics support and assistance; support for establishment of an Intermediate Level Maintenance Facility (ILMF); and other related elements of logistics and program support. The estimated total cost is $360 million. The principal contractor will be RTX Corporation, located in Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/japan-rolling-airframe-missile-block-2b-tactical-missiles

 

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DSCA Notifies Congress of Potential FMS Sale To Poland

 

October 23, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Poland has requested to buy fifty-eight (58) Improved Programmable Display Generators (48 installed, 10 spares); three (3) AGM-158 Joint Air-to-Surface Standoff Missile (JASSM) Flight Test Vehicles, Captive Carry; three (3) Small Diameter Bomb II (SDB II), GBU53/B Guided Test Vehicles (GTV); eight (8) SDB II, GBU-53/B Captive Carry Reliability Trainers; two (2) SDB I, GBU-39(T-1)/B Guided Test Vehicles (GTV); fifty-eight (58) 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) (48 installed, 10 spares); fifty-eight (58) AN/APG-83 Active Electronically Scanned Array (AESA) Scalable Agile Beam Radars (SABR) (48 installed, 10 spares); sixty (60) Modular Mission Computer (MMC) 7000AH upgrades, or equivalent (48 installed, 12 spares); sixty (60) Next Generation Mission Computer (XMC), or next generation equivalent (48 installed, 12 spares); seventy-three (73) AN/ALQ-257 Integrated Viper Electronic Warfare Suites (IVEWS), or seventy-three (73) AN/ALQ-254V(1) Viper Shield advanced electronic warfare (EW) suites, or equivalent (63 installed, 10 spares); two (2) AIM-9X Block II Sidewinder Special Air Training Missiles; and two (2) AIM-9X Block II Sidewinder Captive Air Training Missiles (CATM). The following non-MDE items will also be included: major modifications and maintenance equipment; Phased Array Warning System (PAWS-2) missile warning systems; Joint Helmet Mounted Cueing Systems (JHMCS II); AN/ARC-238 radios (or equivalent); AN/APX-126/127 Advanced Identification Friend or Foe (AIFF) with combined interrogator/transponder (CIT) and Mode 5 (or equivalent); AN/ALE-47 Countermeasure Dispenser Systems (CMDS), classified countermeasure processors, sequencer switching units, and control display units; AN/ALQ-254V(1) Viper Shield advanced EW suites, including lab assets (or equivalent); KY-58, KIV-78, or equivalent, KGV-135A, AN/PYQ-10 Simple Key Loaders (SKLs), MS-110 reconnaissance pods, communications security (COMSEC) cables, and cryptographic devices; tactical synthetic aperture radars; Joint Mission Planning Systems (JMPS) with unique planning components and software; AGM-158 JASSM classified test equipment; aircraft components, parts, and accessories; spare parts, accessories and consumables, and repair and return support; classified and unclassified 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. The estimated total cost is $7.30 billion. The principal contractor will be Lockheed Martin, located in Greenville, SC. 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/poland-f-16-viper-midlife-upgrade

 

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DSCA Notifies Congress of Potential FMS Sale To Saudi Arabia

 

October 24, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Kingdom of Saudi Arabia has requested to buy five hundred seven (507) tube-launched, optically-tracked, wireless-guided (TOW) 2A, radio frequency (RF) missiles (BGM-71E-4B-RF) (including 7 “fly-to-buy” missiles); and five hundred seven (507) TOW 2B, RF missiles (BGM-71F-3-RF) (including 7 “fly-to-buy” missiles). The following non-MDE is also included: support and test equipment; simulators; generators; integration and test support; spare and repair parts; communications equipment; software delivery and support; facilities and construction support; publications and technical documentation; personnel training and training equipment; support equipment; U.S. Government and contractor engineering, technical, and logistics support services; studies and surveys; and other related elements of logistics and program support. The estimated total cost is $440 million. The principal contractor will be RTX Corporation located in Tucson, AZ. 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/kingdom-saudi-arabia-tow-2a-tow-2b-missiles

 

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DSCA Notifies Congress of Potential FMS Sale To Japan

 

October 25, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Japan has requested to buy up to two (2) BQM-177A Subsonic Sea-Skimming Aerial Targets (SSAT) for Aegis System Equipped Vessels (ASEV). The following non-MDE items will also be included: GQM-163 target drones; follow-on technical support for ASEVs, including for Combat Systems Sea Qualification Trials (CSSQT) and sustainment support services; Aegis computer software updates; combat systems integration; system integration, testing, overhauls, and upgrades; development, familiarization, operational, and maintenance support; classified books and other publications (technical and non-technical); adaption data; annual service agreements; 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 $113 million. The principal contractor for the BQM-177A SSATs will be Kratos Defense, located in Sacramento, CA, and Fort Walton Beach, FL. The principal contractor for the GQM-163A target drones will be Northrop Grumman, located in Chandler, AZ. The principal contractor for the Aegis Weapon System (AWS) will be Lockheed Martin Corporation, located in Moorestown, NJ. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/japan-subsonic-sea-skimming-aerial-targets-and-follow-technical

 

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DSCA Notifies Congress of Potential FMS Sale To Taipei Economic and Cultural Representative Office

 

October 25, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Taipei Economic and Cultural Representative Office in the United States has requested to buy three (3) National Advanced Surface-to-Air Missile System (NASAMS) medium-range air defense solutions, that include: three (3) AN/MPQ-64F1 Sentinel radar systems; one hundred twenty-three (123) Advanced Medium-Range Air-to-Air Missiles-Extended Range (AMRAAM-ER); two (2) AMRAAM-C8 guidance sections; and four (4) Multifunctional Information Distribution Systems (MIDS). Also included are fire distribution centers (FDC); Canister Launcher Systems (CLS); electro-optical/infrared (EO/IR) systems; Tactical Control Center (TCC) systems; FDC indoor training simulator; radar communication nodes; MIDS Link 16-capable radios; IPS 250X High Assurance Internet Protocol Encryptions (HAIPE); KIV-77 Identification Friend-or-Foe (IFF) Crypto Applique; AN/PSN-13 Defense Advanced Global Positioning System (GPS) receivers (DAGR) with Selective Availability Anti-Spoofing Module (SAASM); AN/PYQ-10 Simple Key Loaders (SKL), code loaders and cable sets; AIM-120 control sections and containers; AMRAAM and AMRAAM-ER Captive Air Training Missiles (CATMs); AIM-120ER load trainers; weapon system support and support equipment; spare parts, consumables, accessories and repair and return support; classified software; classified and unclassified publications and technical documentation; studies and surveys; U.S. Government and contractor technical support, engineering and logistics support services; warranty services; Systems Integration and Checkout (SICO); and other related elements of logistics and program support. The total estimated cost is $1.16 billion. The principal contractor will be Raytheon, located in Andover, MA. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/taipei-economic-and-cultural-representative-office-united-states-36

 

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DSCA Notifies Congress of Potential FMS Sale To Taipei Economic and Cultural Representative Office

 

October 25, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Taipei Economic and Cultural Representative Office in the United States has requested to buy AN/TPS-77 and AN/TPS-78 radar turnkey systems; spare and repair parts, consumables and accessories; repair and return support; transportation support; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The total estimated cost is $828 million. Implementation of this proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to the recipient.

 

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

 

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DSCA Notifies Congress of Potential FMS Sale To Switzerland

 

October 28, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Switzerland has requested to buy sustainment support for its five (5) PATRIOT Fire Units and missile inventory. The following non-MDE items will be included: general electronic test station equipment and program sets; Foreign Liaison Officer support; international engineering services; Field Surveillance Program; modification and upgrade kits; unclassified and classified repair and return; classified missile processing; unclassified and classified spares; transportation; publications and technical documentation; training; U.S. Government and contractor technical, engineering, and logistics support services; and other related elements of logistics and program support. The total estimated cost is $450 million. The prime contractors will be RTX Corporation, located in Tewksbury, MA; Lockheed Martin, located in Dallas, TX; and Leidos, located in Huntsville, AL. 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/switzerland-patriot-sustainment

 

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DSCA Notifies Congress of Potential FMS Sale To Denmark

 

October 29, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Denmark has requested to buy up to two hundred three (203) AIM-120D-3 Advanced Medium Range Air-to-Air Missiles (AMRAAM); and up to nine (9) AIM-120D-3 AMRAAM guidance sections to include precise position provided by either Selective Availability Anti-Spoofing Module or M-Code. The following non-MDE items will also be included: spare AMRAAM control sections; missile containers and support equipment; munitions support and support equipment; spare parts, consumables and accessories, and repair and return support; weapons software and support equipment; classified software delivery and support; classified publications and technical documentation; transportation support; studies and surveys; 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 $744 million. The principal contractor will be RTX Corporation, located in Tucson, AZ. 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/denmark-aim-120d-3-advanced-medium-range-air-air-missiles

 

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DSCA Notifies Congress of Potential FMS Sale To Argentina

 

October 30, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Argentina has requested to buy equipment and services to support twenty-four (24) F-16 Block 10/15 aircraft procured through third-party transfer. These items include: thirty-six (36) AIM-120 C-8 Advanced Medium Range Air-to-Air Missiles (AMRAAM); two (2) AIM-120 C-8 AMRAAM guidance sections; one hundred two (102) MK-82 500lb general purpose bombs; fifty (50) MXU-650 air foil groups for 500lb GBU-12 Paveway II laser-guided bombs; one hundred two (102) FMU-152A/B joint programmable fuzes with FZU-63A/B fuze systems; and fifty (50) computer control groups MAU-169L/B. The following non-MDE items will also be included: weapons and weapons support equipment; explosive charges, devices, propellants, and components; AN/ARC-238 radios; Joint Mission Planning Systems (JMPS); FMU-169D/B inert fuzes; Ground Support System (GSS) for Link-16; KY-58M and KIV-78 cryptographic devices, AN/PYQ-10 Simple Key Loaders (SKL), communications security (COMSEC) cables, and other COMSEC devices and equipment; cartridges, chaffs, and flares; practical explosive ordinance disposal system trainer; avionics support; communications equipment; precision navigation; Computer Program Identification Numbers (CPINS); electronic warfare database support; major and minor modifications and maintenance support; aircraft components, parts, and accessories; instruments and lab equipment; spare parts, consumables and accessories, and repair and return support; classified and unclassified software delivery and support; classified and unclassified publications and technical documentation; personnel training and training equipment; clothing, textiles, and individual equipment; jet fuel; aircraft ferry, aerial refueling, and transportation support; studies and surveys; 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 $941 million. The principal contractor will be Lockheed Martin, located in Fort Worth, TX. There are no known offsets proposed in connection with this potential sale. Implementation of this proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to Argentina.

 

https://www.dsca.mil/press-media/major-arms-sales/argentina-f-16-aircraft-equipment-and-support

 

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

 

BIS Updates Boycott Requester List

 

October 1, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) published its second quarterly update of the boycott Requester List. This list notifies companies, financial institutions, freight forwarders, individuals, and other U.S. persons of potential sources of certain boycott-related requests they may receive during the regular course of business. A party’s inclusion on the Requester List does not mean that U.S. persons are restricted from dealing with the listed party; a party’s inclusion does mean that U.S. persons are on notice that the listed party is more likely to make reportable boycott-related requests. The updated public list of entities who have been identified as having made a boycott-related request in reports received by BIS includes a total of 36 additions. BIS has also removed 21 entities.

 

https://www.bis.gov/press-release/bis-updates-boycott-requester-list-0

 

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Expansion of Validated End User Authorization: Data Center Validated End User Authorization

 

October 2, 2024: 89. Fed. Reg. 80080: The Department of Commerce, Bureau of Industry and Security (BIS), amended the Export Administration Regulations (EAR) to expand the Validated End User Authorization (VEU) program to include VEU Authorization for data centers located in specified destinations (“Data Center VEU” or “Data Center VEU Authorization”). This expansion of the VEU program to include Data Center VEU is intended to facilitate quick and reliable export or reexport of items on the Commerce Control List necessary for a data center, including advanced computing items, to preapproved trusted end users. Data Center VEU adopts much of the framework of the existing VEU program, with additional requirements. This expansion of eligibility is intended to update the VEU program to recognize the advancement and benefits of artificial intelligence. As under the original VEU Authorization Program, the U.S. government will rigorously review Data Center VEU candidates’ applications subject to detailed and verifiable criteria.

 

https://www.federalregister.gov/documents/2024/10/02/2024-22587/expansion-of-validated-end-user-authorization-data-center-validated-end-user-authorization

 

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BIS Issues Guidance to Financial Institutions on Best Practices for Compliance with the Export Administration Regulations

 

October 9, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) published guidance for financial institutions (FIs) concerning best practice recommendations for complying with the Export Administration Regulations (EAR).

 

The guidance provides both background information on the EAR and recommendations for steps financial institutions can take to minimize the likelihood of EAR violations. The recommendations include a description of EAR-related due diligence best practices, the encouragement of ongoing transaction reviews for red flags, and a delineation of which types of real-time transaction screenings are and are not regarded as a best practice.

 

https://www.bis.gov/press-release/bis-issues-guidance-financial-institutions-best-practices-compliance-export

 

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Effectiveness of Licensing Procedures for the Export and Reexport of Agricultural Commodities to Cuba

 

October 16, 2024: 89 Fed. Reg. 8356: The Bureau of Industry and Security (BIS) is requesting public comments on the effectiveness of its licensing procedures as defined in the Export Administration Regulations (EAR) for the export and reexport of agricultural commodities to Cuba. BIS will include a description of any comments it receives in its biennial report to Congress, as required by the Trade Sanctions Reform and Export Enhancement Act of 2000, as amended (TSRA).

 

https://www.federalregister.gov/documents/2024/10/16/2024-23828/effectiveness-of-licensing-procedures-for-the-export-and-reexport-of-agricultural-commodities-to

 

 

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Commerce Announces Series of Rules to Modernize Space-Related Export Controls

 

October 17, 2024: The Commerce Department’s Bureau of Industry and Security (BIS) released three rules—one Final Rule, one Interim Final Rule, and one Proposed Rule—to modernize BIS’s space-related export controls. These updated controls will further U.S. innovation and technology leadership while protecting U.S. national security and foreign policy interests.

 

This action is the result of an extensive review—directed by the National Space Council, which is led by Vice President Kamala Harristo enable a globally competitive U.S. space industrial base, while strengthening U.S. international space partnerships. These updates reflect the Biden-Harris Administration’s commitment to maintaining U.S. leadership in space, protecting our national security, and strengthening our foreign alliances.

 

The series of regulatory changes modernizing space-related export controls consists of the following rules:

  1. 89 Fed. Reg. 84766: In a Final Rule, BIS is removing license requirements for exports of certain items involving remote sensing or space-based logistics, assembly, or servicing spacecraft destined for Australia, Canada, and the United Kingdom. This rule deepens the United States’ commitment to some of its closest allies, furthering our collective security, reducing unnecessary export control restrictions, and ensuring secure trade.

 

  1. 89 Fed. Reg. 84770: In an Interim Final Rule, BIS is removing license requirements for exports of certain spacecraft components to over 40 allies and partners worldwide, reducing licensing requirements for the least sensitive components for most destinations, and broadening license exceptions to support additional National Aeronautics and Space Administration (NASA) cooperative programs. These changes advance international cooperation and bolster America’s global leadership in space technology.

 

  1. 89 Fed. Reg. 84784: Additionally, in a Proposed Rule published in concert with the Department of State, BIS outlines initial proposals to transfer jurisdiction of certain space-related defense articles that no longer provide a critical military or intelligence advantage from the U.S. Munitions List (USML) maintained by the Department of State to the Commerce Control List. Examples include spacecraft capable of refueling other spacecraft and spacecraft capable of autonomous collision avoidance. This proposed transfer would enable the use of BIS license exceptions that facilitate exports of commercial space items to close allies and partners. BIS welcomes public comment from all interested parties on this Proposed Rule within 30 days of publication.

 

These actions mark a pivotal step in updating and modernizing the U.S. Government’s space-related export controls and enhancing international partnerships while continuing to deny critical technologies to our adversaries.

 

https://www.bis.gov/press-release/commerce-announces-series-rules-modernize-space-related-export-controls and

https://public-inspection.federalregister.gov/2024-23932.pdf?utm_campaign=pi+subscription+mailing+list&utm_medium=email&utm_source=federalregister.gov and

https://public-inspection.federalregister.gov/2024-23958.pdf?utm_campaign=pi+subscription+mailing+list&utm_medium=email&utm_source=federalregister.gov and

https://public-inspection.federalregister.gov/2024-23975.pdf?utm_campaign=pi+subscription+mailing+list&utm_medium=email&utm_source=federalregister.gov

 

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U.S. Census Bureau

 

October 17, 2024:

 

Tips on How to Resolve AES Response Messages

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:  105


Narrative:     Mode of Transportation Unknown

Severity:       Fatal

Reason:        The Mode of Transportation Code reported is not valid in AES.

Resolution:  The Mode of Transportation Code reported must be one recognized in AES and listed in the ‘Appendix T – Mode of Transportation Codes’.

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

Response Code:  147

Narrative:     Routed Export Indicator Missing

Severity:       Fatal

Reason:        The Routed Export Indicator is missing.

Resolution:  A routed export transaction is a transaction in which the Foreign Principal Party in Interest (FPPI) authorizes a U.S. agent to facilitate the export of items from the United States and to prepare and file Electronic Export Information (EEI).  You must report the Routed Export Indicator as Yes or No.

Verify whether or not this is a routed export transaction, correct the shipment and resubmit.

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.

 

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October 21, 2024:

Port of Unlading Codes Updated in the Automated Export System (AES) 

October 21, 2024

Please note the following Port of Unlading Code Name has been UPDATED in the AES effective immediately.

Port Name           Port Code          Country

Whannock, BC     12488                 Canada

The following Port of Unlading Codes have been ADDED to the AES effective immediately.

Port Name           Port Code          Country

Tolu 30111 Columbia
Krishnapatnam 53356 India
Nghi Son 55203 Vietnam
Phu My 55209 Vietnam
Nghe Tinh 55210 Vietnam
Morowali 56029 Indonesia

 

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Foreign Trade Regulations (FTR): Clarification of Filing Requirements Regarding In-Transit Shipments and Other FTR Provisions

 

October 31, 2024: 89. Fed. Reg. 86762: The Bureau of the Census (Census Bureau) proposed to amend its regulations to clarify the requirements governing in-transit shipments from foreign countries through the United States that are subsequently exported to a foreign destination. This rulemaking proposed to clarify who is the U.S. Principal Party in Interest (USPPI) and revise the entry number description when goods are entered into the United States for consumption or warehousing, and then stored in a warehouse or storage facility or admitted into a Foreign Trade Zone (FTZ) before being exported. This rule also proposed to clarify that when a customs broker is the USPPI and they are requested to provide information from the customs entry for the filing of the Electronic Export Information (EEI), that they obtain consent from their client, as required in the customs regulations. Additionally, this proposed rule revises several sections, including definitions, mandatory filing requirements, responsibilities of parties to the export transaction, confidentiality, penalties, and voluntary self-disclosures to ensure clarity, accuracy, and consistency throughout the FTR.

 

https://www.federalregister.gov/documents/2024/10/31/2024-24482/foreign-trade-regulations-ftr-clarification-of-filing-requirements-regarding-in-transit-shipments

 

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

 

Violations of the Arms Export Control Act and the International Traffic in Arms Regulations by Precision Castparts Corp.

 

October 7, 2024: Precision Castparts Corp. (“Precision”) entered into a three-year Consent Agreement to settle allegations that it violated the International Traffic in Arms Regulations (ITAR) in connection with twenty-four export violations involving unauthorized exports of Technical Data to Foreign-Person Employees (FPEs). All the violations were Voluntarily Disclosed to the Department of State by Precision in 2019 Precision agreed to pay a fine of three million ($3,000,000) of which one million ($100,00,000) will be used by Precision for remedial compliance measures.

 

Violations:

 

Precision disclosed the following violations to the Department:

 

Unauthorized Exports of Technical Data to Foreign-Person Employees

 

On October 17, 2019, Precision submitted a full voluntary disclosure describing unauthorized exports of technical data to certain foreign person employees at Precision’s wholly owned subsidiary, Mold Masters, identified as USML Category XIX(g), pertaining to tools (specifically, wax pattern and core dies) and wax patterns consumed in the subsequent production of casting blades used in gas turbine engines of 5th generation fighter aircraft to 46 FPEs, lawfully permitted to work in the United States, from Mexico, El Salvador, Honduras, Bhutan, Peru, and Burundi. Precision’s subsequent review has confirmed that eight (8) of the wax patterns relate to the hot section components for the 5th generation fighter aircraft.

 

Precision disclosed that, although these employees had lawful U.S. employment authorization, the prior ownership of Mold Masters’ did not validate their U.S.-person status when hiring employees for roles requiring authorization for the export of technical data or secure ITAR employee licenses. Violations persisted when FPEs present at the time of Precision’s acquisition of Mold Masters in 2018 continued to work under the same conditions through 2019. Mold Masters’ prior record keeping procedures failed to capture information such as specific dates, work assignments, or information on specific technical data.

 

Remedial Measures:

 

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

 

Precision, 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.

 

Precision shall appoint, in accordance with the provisions of the 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.

 

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

familiar with the AECA and the ITAR, and their own and Precision’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.

 

Precision 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) of the agreement. Precision shall provide to DTCC written confirmation that the company has completed this action.

 

Precision 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 Precision’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. Precision 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, Precision 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 Precision’s export compliance policies and procedures.

 

Classification Review:

 

Precision shall, under the supervision of the Designated Official, review, verify, and complete the export control jurisdiction of all hardware and/or software that Precision’s 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, Precision 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:

 

One audit shall be performed during the Consent Agreement. Precision shall have the audit conducted by an outside consultant with expertise in AECA and ITAR matters, approved by the Director, DTCC. The audit shall be conducted under the supervision of the Designated Official. The audit shall provide a thorough assessment of the effectiveness of Precision’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 Precision. The Designated Official or the Director, DTCC, may identify other areas (e.g., transactional review of agreements, Precision’s information technology systems) for the audit.

 

Debarment:

 

Precision 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 has determined not to impose an administrative debarment of Precision.

 

Onsite Reviews by the Department:

 

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

 

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

 

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=52a07c224701d21827972464336d4375 and

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=a5a07c224701d21827972464336d436e and

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=4aa07c224701d21827972464336d4372

 

Editor’s note: The compliance measures described here are representative of the direction the Department of State is taking with larger companies and their compliance programs. However small companies should review to align their programs to focus on the same compliance points noted.

 

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October 9, 2024: Zhanna Soldatenkova and Ruslan Almetov, both Russian nationals, were indicted along with Arthur Petrov, a dual Russian and German national, for export control violations, smuggling, wire fraud, and money laundering in connection with their alleged participation in a scheme to procure U.S.-sourced microelectronics subject to U.S. export controls on behalf of a Russia-based supplier of critical electronics components for manufacturers supplying weaponry and other equipment to the Russian military.

 

https://www.justice.gov/usao-sdny/pr/two-russian-nationals-charged-their-participation-illicit-procurement-network-exported

 

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October 17, 2024: Lin Chen pleaded guilty in federal court to illegally exporting U.S. technology to a prohibited end user in China, in violation of the International Emergency Economic Powers Act (IEEPA) and the Export Administration Regulations (EAR). The plea was accepted by the Hon. William Alsup, Senior U.S. District Judge.

 

In pleading guilty, Chen, 65, a citizen of the People’s Republic of China (PRC), admitted to acting on behalf of Jiangsu Hantang International Trade Group Corp., Ltd. (JHI), a company headquartered in Nanjing, PRC, to procure a wafer cutting machine on behalf of Chengdu GaStone Technology Co., Ltd. (GaStone), an entity located in Chengdu, PRC.  Chen admitted to knowing that GaStone was designated on the U.S. Department of Commerce’s Entity List on Aug. 1, 2014.  Federal regulations restrict the export of certain items to companies, research institutions, and other entities identified on the Department of Commerce’s Entity List. Under applicable Department of Commerce regulations, wafer cutting machines, which are used to cut thin semiconductors used in electronics (also known as silicon wafers), require a license for export to end-users such as GaStone.

 

Chen’s sentencing hearing is scheduled for January 28, 2025, before the Judge Alsup.  The maximum statutory penalty for an IEEPA violation is up to 20 years in prison and a $1 million fine.  However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence.

 

https://www.justice.gov/usao-ndca/pr/chinese-national-pleads-guilty-illegally-exporting-semiconductor-manufacturing-machine

 

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October 17, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced an $860,000 settlement with Vietnam Beverage Company Limited (VBCL). VBCL, a Vietnam-based alcoholic beverage company, has agreed to settle its subsidiaries’ potential civil liability for 43 apparent violations of the North Korea Sanctions Regulations. Between April 2016 and October 2018, VBCL’s subsidiaries caused U.S. financial institutions to process approximately $1,141,547 in payments for the sale of alcoholic beverages to North Korea. This settlement amount reflects OFAC’s determination that conduct at issue was not voluntarily disclosed and constituted a non-egregious case.

 

https://ofac.treasury.gov/recent-actions/20241017_33 and

https://ofac.treasury.gov/media/933501/download?inline

 

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October 25, 2024: Yuksel Senbol, 36, of Orlando, Florida, was sentenced to 15 months in prison for conspiracy to defraud the United States, conspiracy to commit wire fraud, wire fraud, conspiracy to commit money laundering, money laundering, conspiracy to violate the Export Control Reform Act, violating the Export Control Reform Act, and violating the Arms Export Control Act. As part of her sentence, the court also entered an order of forfeiture in the amount of $275,430.90, the proceeds of Senbol’s fraud and money laundering scheme. Senbol pleaded guilty on May 7.

 

https://www.justice.gov/opa/pr/defense-contractor-sentenced-15-months-prison-fraud-money-laundering-and-unlawful-export

 

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October 25, 2024: A federal jury convicted Brian Assi, also known as Brahim Assi, of conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR), attempted unlawful export of goods from the United States to Iran without a license, attempted smuggling goods from the United States, submitting false or misleading export information, and conspiracy to commit money laundering. Sentencing Brian Assi is scheduled for Jan. 7, 2025.

 

https://www.justice.gov/opa/pr/foreign-national-convicted-conspiring-export-us-made-drill-rigs-iran-violation-us-sanctions

 

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October 28, 2024: The Ninth U.S. Circuit Court of Appeals affirmed the 7-year prison sentence of a former UCLA electrical engineering adjunct professor relating to his exporting of military-grade semiconductor chips without a license to China in collaboration with a Chinese enterprise that develops weapons.

 

Federal regulations found in the International Emergency Economic Powers Act (“IEEPA”) require that a license be obtained for the export of certain items, which are assigned an Export Control Classification Number (“ECCN”). The list of ECCNs provides the “reasons for control” associated with each number.

 

In July 2019, a jury found Shih guilty of 18 counts of violating various offenses arising out of the export of the MMICs, including a violation of the IEEPA based on the fact that the semiconductor chips were assigned ECCNs that listed national security as a reason for control.

 

Senior District Court Judge John A. Kronstadt of the Central District of California ordered entry of a judgment of acquittal on the violation of the IEEPA violation, finding that the government had not proven that a license was required to export the MMICs, and declined to apply a sentencing enhancement providing for a higher base level if national security controls were evaded.

 

The Ninth Circuit reversed and reinstated the conviction on the overturned count. Kronstadt, on remand, applied the enhancement and sentenced Shih to two 7-year terms of imprisonment, to be run concurrently.

 

http://www.metnews.com/

 

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October 30, 2024: The Commerce Department’s Bureau of Industry and Security (BIS) is adding 40 foreign entities, as well as 4 addresses, to the Entity List in connection with their support for the Kremlin’s illegal war in Ukraine and tightening restrictions on 49 foreign entities that were already on the Entity List to address their procurement of high-priority U.S.-branded microelectronics and other items on behalf of Russia. These entities are located in the People’s Republic of China (PRC), as well as India, Malaysia, Russia, Singapore, Türkiye, Estonia, Finland, the United Arab Emirates (UAE), and the United Kingdom (UK). BIS is also imposing additional restrictions on the export of 9 chemical precursors used to produce riot control agents (RCAs) and chemical weapons used on the battlefield against Ukraine in violation of treaty commitments. These actions underscore the extensive controls the United States has placed on entities enabling Russian aggression against Ukraine since the further invasion in February 2022.

 

https://www.bis.gov/press-release/commerce-targets-illicit-procurement-networks-supplying-russias-military-and

 

Sanctions

 

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

 

October 16, 2024: 89 Fed. Reg. 834428: The Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) by adding eight persons to the Unverified List (UVL). Of the eight persons being added, three are under the destination of China, People’s Republic of (China); two are under the destination of Germany; one is under the destination of Pakistan; and two are under the destination of Türkiye. BIS is also amending the EAR by removing two persons from the UVL. Of the two persons being removed, one is under the destination of Saudi Arabia, and the other is under the destination of China.

 

Additions to the UVL:

 

  • Hengye Technology Co., Ltd of China;
  • Skytop Electronics Ltd. of China;
  • YXS Technology Co., Ltd. of China;
  • Arabian Aviation Trade Group of Germany;
  • Tiptrans Limited of Germany;
  • Marshal Traders of Pakistan;
  • Pegasus Technic Services of Turkey;
  • Vast Polymers of Turkey; and
  • Ambalaj Sanayi Ve Ticaret Limited Sirketi of Turkey.

 

https://www.federalregister.gov/documents/2024/10/16/2024-23638/revisions-to-the-unverified-list

 

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October 21, 2024: the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) added 26 entities to the Entity List for activities contrary to U.S. national security and foreign policy under the destinations of the People’s Republic of China (PRC) (6), Egypt (1), Pakistan (16), and the United Arab Emirates (UAE) (3). These additions are related to alleged violations of export controls, involvement in weapons programs of concern, and evasion of U.S. sanctions and export controls on Russia and Iran.

 

Nine of the entities under the destination of Pakistan were added for acting as front companies and procurement agents for the Advanced Engineering Research Organization, a Pakistan-based company added to the Entity List in 2014. The remaining 7 Pakistani entities were added for contributions to Pakistan’s ballistic missile program.

 

Three entities under the destination of the UAE and one under the destination of Egypt were added for acquiring and attempting to acquire U.S.-origin parts to evade U.S. sanctions and export controls imposed following Russia’s full-scale invasion of Ukraine in February 2022.

 

Six entities under the destination of the PRC were added for acquiring U.S.-origin items in support of the PRC’s military modernization, dilatory and evasive conduct during end-use checks, and procurement of U.S.-origin items for Iran’s weapons of mass destruction and unmanned aerial vehicle (UAV) programs.

 

https://www.bis.gov/press-release/commerce-adds-26-entities-entity-list-actions-contrary-us-national-security-interests

 

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October 30, 2024: The Commerce Department’s Bureau of Industry and Security (BIS) is adding 40 foreign entities, as well as 4 addresses, to the Entity List in connection with their support for the Kremlin’s illegal war in Ukraine and tightening restrictions on 49 foreign entities that were already on the Entity List to address their procurement of high-priority U.S.-branded microelectronics and other items on behalf of Russia. These entities are located in the People’s Republic of China (PRC), as well as India, Malaysia, Russia, Singapore, Türkiye, Estonia, Finland, the United Arab Emirates (UAE), and the United Kingdom (UK). BIS is also imposing additional restrictions on the export of 9 chemical precursors used to produce riot control agents (RCAs) and chemical weapons used on the battlefield against Ukraine in violation of treaty commitments. These actions underscore the extensive controls the United States has placed on entities enabling Russian aggression against Ukraine since the further invasion in February 2022.

 

https://www.bis.gov/press-release/commerce-targets-illicit-procurement-networks-supplying-russias-military-and

 

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

 

October 1, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated seven individuals, and two entities associated with the Russia-based cybercriminal group Evil Corp, in a tri-lateral action with the United Kingdom’s Foreign, Commonwealth & Development Office (FCDO) and Australia’s Department of Foreign Affairs and Trade (DFAT). On December 5, 2019, OFAC designated Evil Corp, its leader and founder Maksim Viktorovich Yakubets and over a dozen Evil Corp members, facilitators, and affiliated companies pursuant to Executive Order (E.O.) 13694, as amended by E.O. 13757 (“E.O. 13694, as amended”). The United Kingdom and Australia concurrently designated select Evil Corp-affiliated individuals designated by OFAC. Additionally, the U.S. Department of Justice has unsealed an indictment charging one Evil Corp member in connection with his use of BitPaymer ransomware targeting victims in the United States. This designation also coincides with the second day of the U.S.-hosted Counter Ransomware Initiative summit which involves over 50 countries working together to counter the threat of ransomware.

 

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

 

  • Benderskit, Eduard Vitalyevich of Russia;
  • Pogodin, Vadim Gennadievich of Russia;
  • Ramazanov, Beyat Enverovich of Russia;
  • Ryzhenkov, Aleksandr Viktorovich of Russia;
  • Ryzehenkov, Sergey Viktorovich of Russia;
  • Shchetinin, Aleksey, Yevgenevich of Russia; and
  • Yakubets, Viktor Grigoryevich of Russia.

 

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

 

  • Solar-Invest LLC of Russia; and
  • Vympel-Assistance LLC of Russia.

 

https://ofac.treasury.gov/recent-actions/20241001 and

https://home.treasury.gov/news/press-releases/jy2623

 

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October 1, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC)  designated Hilltop Youth, a violent extremist group that has repeatedly attacked Palestinians and destroyed Palestinian homes and property in the West Bank, pursuant to Executive Order (E.O.) 14115. Through these violent activities, Hilltop Youth is actively destabilizing the West Bank and harming the peace and security of Palestinians and Israelis alike. Hilltop Youth has devastated Palestinian communities and carried out killings, mass arson, and other so-called “price tag” attacks to exact revenge and intimidate Palestinian civilians, and has repeatedly clashed with the Israeli military as it counters their activities.

 

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

 

  • Suissa, Avichai of Israel; and
  • Yardeni, Eitan of Russia.

 

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

 

  • Hilltop Youth.

 

https://ofac.treasury.gov/recent-actions/20241001 and

https://home.treasury.gov/news/press-releases/jy2622

 

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October 2, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated one individual and three companies that have facilitated weapons procurement and smuggling operations for Ansarallah, commonly known as the Houthis. This action targets key procurement operatives and suppliers located in Iran and the People’s Republic of China (PRC) that have enabled the Houthis to acquire dual-use materials and components needed to manufacture, maintain, and deploy an arsenal of advanced missiles and unmanned aerial vehicles (UAVs) against U.S. and allied interests.

 

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

 

  • Al-kulani, Hasan Ahmad Hasan Muhammad of Iran.

 

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

 

  • Gemini Marine Limited of the Marshall Islands;
  • Shenzhen Boyu Imports and Exports Co. of China; and
  • Shenzhen Jinghon Electronics Limited of China.

 

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

 

  • Frunze (E5U4323) Crude Oil Tanker Cook Islands flag; Registration Identification IMO 9263643; MMSI 518998343 (vessel); and
  • Izumo (TRBQ9) Crude Oil Tanker Gabon flag; Vessel Registration Identification IMO 9249324; MMSI 626466000 (vessel).

 

https://home.treasury.gov/news/press-releases/jy2627 and

https://ofac.treasury.gov/recent-actions/20241002

 

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October 7, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated three individuals and one sham charity that are prominent international financial supporters of Hamas, as well as one Hamas-controlled financial institution in Gaza. OFAC also designated a longstanding Hamas supporter and nine of his businesses. These actors play critical roles in external fundraising for Hamas, often under the guise of charitable work, that finance the group’s terrorist activities. This action, which is being taken pursuant to the counterterrorism authority Executive Order (E.O.) 13224, as amended, highlights the abuse of the non-profit organization (NPO) sector by terrorist financiers through the use of sham charities to generate revenue.

 

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) also issued Counter Terrorism General License 30, “Authorizing the Wind Down of Transactions Involving Certain Entities Blocked on October 7, 2024,” and Counter Terrorism General License 31, “Authorizing Certain Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Certain Entities Blocked on October 7, 2024.”

 

General License 30: Authorizing the Wind Down of Transactions Involving Certain Entities Blocked on October 7, 2024

 

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 one or more of the following blocked persons are authorized through 12:01 a.m. eastern standard time, November 21, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the GTSR:

 

(1) Al Ahmar Trading Group;

(2) Al Salam Trading and Agencies General Establishment;

(3) Sabaturk Dis Ticaret Anomin Sirketi;

(4) Vivid Enerji Yatirimlari Anonim Sirketi;

(5) Investrade Portfoy Yonetimi Anomim Sirketi; or

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

 

General License 31: Authorizing Certain Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Certain Entities Blocked on October 7, 2024

 

 (a) All transactions prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), that are ordinarily incident and necessary to the divestment or transfer, or the facilitation of the divestment or transfer, of debt or equity of Investrade Portfoy Yonetimi Anomim Sirketi (Investrade Portfoy), and any entity in which Investrade Portfoy owns, directly or indirectly, a 50 percent or greater interest ( “Covered Debt or Equity”), to a non-U.S. person are authorized through 12:01 am eastern standard time November 21, 2024:

 

(b) All transactions prohibited by the GTSR 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, October 7, 2024, are authorized through 12:01 a.m. eastern standard time November 21, 2024.

 

(c) All transactions prohibited by the GTSR that are ordinarily incident and necessary to the wind down of derivative contracts entered into prior to 4:00 p.m. eastern daylight time, October 7, 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 standard time, November 21, 2024, provided that any payments to a blocked person are made into a blocked account in accordance with the GTSR.

 

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

 

  • Al Ahmar, Hamid Abdullah Hussein of Yemen;
  • Al-zeer, Majed of Jordan;
  • Doughman, Abel Saad al-Din Hassan of Austria; and
  • Hanoun, Muhammad Mahoud Ahmad Awad of Jordan.

 

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

  • Al Ahmar Oils and Supply Distribution of Yemen;
  • Al Ahmar Trading Group of Yemen;
  • Al Salam Trading and Agencies General Establishment of Yemen;
  • Al-Intaj Bank of Gaza;
  • Associazione Benefica Di Soldarieta of Italy;
  • Investrade Portfoy Yonetimi Anonim Sirketi of Turkey;
  • Saba , Trade & Investment S.R.O of Czech Republic;
  • Sabafon International Sal Offshore of Lebanon;
  • Sabaturk Dis Ticaret Anonim Sirketi of Turkey;
  • Sama International Media of Yemen; and
  • Vivid Enerji Yatirimlari Anonim Sirketi of Turkey.

 

https://ofac.treasury.gov/recent-actions/20241007 and

https://home.treasury.gov/news/press-releases/jy2632 and

https://ofac.treasury.gov/media/933471/download?inline and

https://ofac.treasury.gov/media/933476/download?inline and

https://ofac.treasury.gov/media/933481/download?inline

 

*******

October 8, 2024:  The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Algoney Hamdan Daglo Musa (Algoney), pursuant to Executive Order (E.O.) 14098, for leading efforts to supply weapons to continue the war in Sudan. The war between the Sudanese Armed Forces (SAF) and the Rapid Support Forces (RSF) has caused immense devastation, leaving tens of thousands dead, more than 11 million displaced, and millions facing emergency levels of hunger.  Algoney is the procurement director of the RSF and a brother of Mohammed Hamdan Daglo (Hemedti), the leader of the RSF. Algoney has extended this war by leading RSF efforts to procure weapons and military materiel. By arming the RSF, his actions have directly contributed to the RSF’s ongoing siege of El Fasher in North Darfur, a city of nearly two million vulnerable civilians, and the RSF’s operations elsewhere in Sudan.

 

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

 

  • Musa, Algoney Hamdan Daglo of Sudan.

 

https://home.treasury.gov/news/press-releases/jy2635 and

https://ofac.treasury.gov/recent-actions/20241008

 

*******

 

October 10, 2024: OFAC issued a new Russia-related Frequently Asked Question (FAQ): 1197.

 

FAQ 1197:

 

Q: I’m a U.S. person with securities held at the National Settlement Depository (NSD), which were transferred pursuant to Russian Decree 840 to another Russian registrar.  Am I required to block these securities? 

 

A: Yes.  On June 12, 2024, OFAC designated the National Settlement Depository (NSD), along with the Moscow Exchange (MOEX) and the National Clearing Center (NCC) pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy. As noted in the accompanying press release, Russia has reoriented the architecture of its financial system to facilitate investment into its defense industry and acquisition of goods needed to further its aggression against Ukraine.

Alongside this designation, OFAC issued, and subsequently extended, two general licenses to allow for wind-down of certain transactions involving NSD, MOEX, and NCC, and the divestment of securities held at NSD, among other authorized activities. These general licenses (General License 99A and General License 100A) are in place through 12:01 a.m. eastern daylight time, October 12, 2024. Following the expiration of GLs 99A and 100A, any securities in the possession or control of U.S. persons that are held at NSD should be treated as blocked, and dividends or other income received via NSD should be treated as blocked.

OFAC is aware that the Russian Federation has attempted to take action to evade or avoid OFAC sanctions on NSD via Presidential Decree 840 by requiring the transfer of certain securities to local Russian registrars. OFAC cautions that such transfers may not be authorized under the general licenses and may be considered null and void pursuant to OFAC’s regulations (see 31 CFR § 587.202). OFAC understands that these transactions may involve other blocked persons, including certain local Russian registrars. OFAC is also investigating the remaining non-blocked local Russian registrars for future designation under E.O. 14024.  The general licenses do not authorize transactions involving any blocked person other than those identified in the authorizations, and any transfer made in violation of OFAC sanctions is null and void. As such, U.S. persons should continue to treat these securities as blocked.

 

https://ofac.treasury.gov/faqs/1197 and

https://ofac.treasury.gov/recent-actions/20241010

 

*******

 

October 11, 2024: The United States expanded sanctions on Iran’s petroleum and petrochemical sectors in response to Iran’s October 1 attack on Israel, its second direct attack on Israel this year. This action intensifies financial pressure on Iran, limiting the regime’s ability to earn critical energy revenues to undermine stability in the region and attack U.S. partners and allies. The Secretary of the Treasury, in consultation with the Secretary of State, is identifying the petroleum and petrochemical sectors of the Iranian economy pursuant to section 1(a)(i) of Executive Order (E.O.) 13902, which allows Treasury to target a broader range of activities relating to Iran’s trade in petroleum and petrochemical products. E.O. 13902 provides authority to identify and impose sanctions on key sectors of Iran’s economy to deny the Iranian government financial resources that may be used to fund and support its nuclear program, missile development, terrorism and terrorist proxy networks, and malign regional influence. Pursuant to this determination, the Treasury may impose sanctions on any person determined to operate in the petroleum and petrochemical sectors of the Iranian economy.

 

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) published a Determination pursuant to Section 1(a)(i) of Executive Order 13902, “Petroleum and Petrochemical Sectors of the Iranian Economy”.

 

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

 

  • Alya Marine Sendirian Berhad of Malaysia;
  • Cathay Harvest Marine Ltd of China;
  • Celia Armas Ltd of China;
  • Davina Shipping Inc of the Marshall Islands;
  • Delnaz Ship Management SDN BHD of Malaysia;
  • Derecttor Company Limited of China;
  • Diamante Tankers Incorporated of Panama;
  • Elza Shipping SA of Liberia;
  • Engen Management NV of Suriname;
  • Gabbaro Ship Services Pvt Ltd of Mumbai;
  • Glazing Future Management NV of Suriname;
  • Harry Victor Ship Management and Operation L.L.C. of the United Arab Emirates;
  • Jazira Das International Refinded Oil Products Trading L.L.C. of the United Arab Emirates;
  • Max Maritime Solutions FZE of the United Arab Emirates;
  • Rita Shipping Inc of the Marshall Islands; and
  • Strong Roots Provider NV of Suriname.

 

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

 

  • Anhona (V3GK3) Oil Products Tanker Belize flag; MMSI 312171000 (vessel);
  • Aventus I (3E2078) Crude Oil Tanker Panama flag; MMSI 352898820 (vessel);
  • Bendingo (8P2397) Crude Oil Tanker Barbados flag; MMSI 314925000 (vessel);
  • Berg 1 (3DCZ1) Crude Oil Tanker Panama flag; (vessel);
  • Carina (8P2232) Crude Oil Tanker Barbados flag; MMSI 314872000 (vessel);
  • Carnatic (8P2398) Crude Oil Tanker Barbados flag; MMSI 314926000 (vessel);
  • Carol (V4BC4) LPG Tanker St. Kitts and Nevis flag; MMSI 341575000 (vessel);
  • Cross Ocean (3E4640) Crude Oil Tanker Panama flag; MMSI 352002860 (vessel);
  • Crystal Rose (3E4037) Crude Oil Tanker Panama flag; MMSI 352001298 (vessel);
  • Davina T8A4843) Crude Oil Tanker Palau flag; MMSI 511101471 (vessel);
  • Dimitra II (T7BI5) Crude Oil Tanker San Marino flag;   MMSI 268249801 (vessel);
  • Elza (D5SE4) Crude Oil Tanker Liberia flag; MMSI 636018950 (vessel);
  • Goodwin (E5U5022) Crude Oil Tanker Cook Islands flag;  MMSI 518999041 (vessel);
  • Hornet, Crude Oil Tanker Eswatini flag;  MMSI 6987100 (vessel);
  • Luna Prime (3E2167) Crude Oil Tanker Panama flag; MMSI 352001994 (vessel);
  • Octans (S9A15) Crude Oil Tanker Sao Tome and Principe flag; (vessel);
  • Salvia (T7BJ6) Crude Oil Tanker San Marino flag; MMSI 268240702 (vessel);
  • Satina (3E2250) Products Tanker Panama flag; MMSI 352002316 (vessel);
  • Shanaye Queen (9WNN6) Crude Oil Tanker Malaysia flag; MMSI 533132105 (vessel);
  • Spirit of Casper (3E6116) Crude Oil Tanker Panama flag; MMSI 352003872 (vessel);
  • Tyche I (3E5017) Crude Oil Tanker Panama flag; MMSI 352002704 (vessel);
  • Voras (TJM8VO) Crude Oil Tanker Cameroon flag; MMSI 613916701 (vessel); and
  • Wen Yao (E5U5189) Crude Oil Tanker Cook Islands flag; MMSI 518999208 (vessel).

 

https://home.treasury.gov/news/press-releases/jy2644 and

https://ofac.treasury.gov/media/933491/download?inline and

https://ofac.treasury.gov/recent-actions/20241011

 

*******

 

October 15, 2024: In a joint action with Canada, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated the Samidoun Palestinian Prisoner Solidarity Network, or “Samidoun,” a sham charity that serves as an international fundraiser for the Popular Front for the Liberation of Palestine (PFLP) terrorist organization. The PFLP, which was designated as a Foreign Terrorist Organization and a Specially Designated Global Terrorist by the U.S. Department of State in October 1997 and October 2001, respectively, uses Samidoun to maintain fundraising operations in both Europe and North America. Also designated is Khaled Barakat, a member of the PFLP’s leadership. Together, Samidoun and Barakat play critical roles in external fundraising for the PFLP. This action is being taken pursuant to the counterterrorism authority Executive Order (E.O.) 13224, as amended.

 

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

 

  • Barakat, Khaled of Canada.

 

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

 

  • Samidoun Palestinian Prisoner Solidarity Network of Canada.

 

https://home.treasury.gov/news/press-releases/jy2646 and

https://ofac.treasury.gov/recent-actions/20241015

 

*******

October 16, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated three individuals, and four associated companies involved in a Lebanon-based sanctions evasion network that generates millions of dollars in revenue for Hizballah. Hizballah’s finance team is responsible for the establishment and operation of Hizballah commercial projects throughout Lebanon, some of which are financed and facilitated by Iran. OFAC also designated three individuals involved in the illegal production and trafficking of Captagon that has benefitted Bashar al-Assad’s regime and its allies, including Hizballah. The illegal trade in Captagon, a dangerous, highly addictive amphetamine, has become a billion-dollar illicit enterprise operated by senior members of the Syrian regime.

 

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

 

  • Atwi, Silvana of Lebanon;
  • Falhout, Raji of Syria;
  • Ghaffar, Haidar Houssam Al Din Abdul of Lebanon;
  • Hamadi, Houssam Hasan of Lebanon;
  • Hamideh, Abdellatif of Syria; and
  • Hamieh, Khaldoun of Syria.

 

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

 

  • Global Tradeline Sarl of Lebanon;
  • GM Farm of Lebanon;
  • Liban Oui Sarl of Lebanon; and
  • United Sons of Lebanon.

 

https://ofac.treasury.gov/recent-actions/20241016 and

https://home.treasury.gov/news/press-releases/jy2648

 

*******

 

October 17, 2024:  The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) targeted three entities and one individual for their involvement in the development and production of Russia’s Garpiya series long-range attack unmanned aerial vehicle (UAV). The Garpiya has been deployed by Russia in its brutal war against Ukraine, destroying critical infrastructure and causing mass casualties. Designed and developed by People’s Republic of China (PRC)-based experts, the Garpiya is produced at PRC-based factories in collaboration with Russian defense firms before transferring the drones to Russia for use against Ukraine.

 

These private companies and individuals were involved in the development and production of military equipment for a U.S.-sanctioned Russian defense firm for use by the Russian military in Ukraine.  While the United States previously imposed sanctions on PRC entities providing critical inputs to Russia’s military-industrial base, these are the first U.S. sanctions imposed on PRC entities directly developing and producing complete weapons systems in partnership with Russian firms.

 

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

 

  • Yamshchikov, Artem Mikhailovich of Russia.

 

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

 

  • Limited Liability Company Trading House Vector of Russia;
  • Redlepus Vector Industry Shenzhen Co Ltd of China; and
  • Xiamen Limbach Aircraft Engine Co., Ltd. of China.

 

https://home.treasury.gov/news/press-releases/jy2651 and

https://ofac.treasury.gov/recent-actions/20241017

 

*******

 

October 17, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned eighteen companies, individuals, and vessels for their ties to Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF)-backed Houthi financial official Sa’id al-Jamal (al-Jamal) and his network. Included in this action are the captains of vessels transporting illicit oil as well as the companies that managed and operated these ships. The revenue from al-Jamal’s network continues to enable Houthi attacks in the region, including missile and unmanned aerial vehicle attacks on Israel and commercial vessels transiting the Red Sea.

 

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

 

  • Barkhordar, Ali of Iran;
  • Durrani, Whaid Ullah of Pakistan;
  • Keot, Dipankar Mohan of India;
  • Skiriban, Yevhen of Ukraine; and
  • Warikoo Rattanlal, Rahul Rattanlal of India.

 

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

 

  • Changtai Shipping Limited of the Marshall Islands;
  • Eco Max Fze of the United Arab Emirates;
  • Eco Max Trading Fze of the United Arab Emirates;
  • Indo Gukf Ship Management LLC of the United Arab Emirates;
  • Motionavigations Limited of the Marshall Islands.

 

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

 

  • Gratia (T8A4616) Chemical/Oil Tanker Palau flag; MMSI 511101304 (vessel);
  • Juvenis (T8A4619) Chemical/Oil Tanker Palau flag; MMSI 511101307 (vessel);
  • Kapok (3E6616) Crude Oil Tanker Panama flag; MMSI 352003068 (vessel);
  • Kukki (8PVO7) Chemical/Oil Tanker Barbados flag; MMSI 314823000 (vessel);
  • Liana (T8A3765) Oil Products Tanker Palau flag; MMSI 511100596 (vessel);
  • Marbel (E5U4474) Chemical/Oil Tanker Cook Islands flag; MMSI 518998494 (vessel);
  • Onyx (E5U4643) Products Tanker Cook Islands flag; MMSI 518998663 (vessel); and
  • Trophy (E5U4515) Chemical/Oil Tanker Cook Islands flag;  MMSI 518998535 (vessel).

 

https://home.treasury.gov/news/press-releases/jy2652 and

https://ofac.treasury.gov/recent-actions/20241017

 

*******

October 21, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued an updated Maritime Oil Industry Advisory for both government and private sector actors involved in the global maritime industry. Updates to the advisory include recommendations concerning specific best practices and reflects the Price Cap Coalition’s ongoing commitment to promote responsible practices in the industry, disrupt sanctioned trade, and enhance compliance with the price cap.

 

The Price Cap Coalition, which includes G7 countries as well as the European Union, Australia, and New Zealand, is updating its advisory for both government and private sector actors involved in the global maritime industry. The advisory provides recommendations concerning specific best practices and reflects the Coalition’s ongoing commitment to promoting responsible practices in the industry, disrupting sanctioned trade, and enhancing compliance with the price cap.

 

The Coalition originally published its advisory on October 12, 2023. This update provides stakeholders with new recommendations on meeting international obligations, enhancing due diligence around tanker sales, avoiding interactions with sanctioned counterparties, and raising internal awareness.

 

The Coalition remains focused on reducing the revenues Russia uses to fuel its brutal war against Ukraine while maintaining energy market stability.

 

https://home.treasury.gov/news/press-releases/jy2659 and

https://ofac.treasury.gov/recent-actions/20241021

 

*******

 

October 24, 2024: the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Mirghani Idris Suleiman (Idris) pursuant to Executive Order (E.O.) 14098, for leading the Sudanese Armed Forces’ (SAF) efforts to acquire weapons for use in its ongoing war with the Rapid Support Forces (RSF). Idris has been at the center of weapons deals that have fueled the brutality and scale of the war, serving as Director General of Defense Industries System (DIS), the SAF’s primary weapons production and procurement arm. OFAC designated DIS on June 1, 2023, for being responsible for, or complicit in, or having directly or indirectly engaged or attempted to engage in actions or policies that threaten the peace, security, or stability of Sudan,

 

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

 

Suleiman, Mirghani Idris of Sudan.

 

https://ofac.treasury.gov/recent-actions/20241024 and

https://home.treasury.gov/news/press-releases/jy2672

 

*******

 

October 30, 2024: The U.S. Department of the Treasury sanctioned 275 individuals and entities involved in supplying Russia with advanced technology and equipment that it desperately needs to support its war machine. This action targets both individual actors and sprawling sanctions evasion networks across 17 jurisdictions, including India, the People’s Republic of China (PRC), Switzerland, Thailand, and Türkiye. In addition to disrupting global evasion networks, this action also targets domestic Russian importers and producers of key inputs and other materiel for Russia’s military-industrial base.

 

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 8K, “Authorizing Transactions Related to Energy,” Russia-related General License 25G, “Authorizing Transactions Related to Telecommunications and Certain Internet-Based Communications,” Russia-related General License 110, “Authorizing the Wind Down of Transactions Involving Certain Entities Blocked on October 30, 2024,” Russia-related General License 111, “Authorizing Certain Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Certain Entities Blocked on October 30, 2024,” and Russia-related General License 112, “Authorizing Civil Aviation Safety and Wind Down Transactions Involving Shaurya Aeronautics Private Limited.”

 

Additionally, OFAC has issued one new Russia-related Frequently Asked Question (FAQ 1198).

 

GENERAL LICENSE NO. 8K: Authorizing Transactions Related to Energy

 

(a) All transactions prohibited by Executive Order (E.O.) 14024 involving one or more of the following entities that are related to energy are authorized, through 12:01 a.m. eastern daylight time, April 30, 2025:

 

(1) State Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank;

(2) Public Joint Stock Company Bank Financial Corporation Otkritie;

(3) Sovcombank Open Joint Stock Company;

(4) Public Joint Stock Company Sberbank of Russia;

(5) VTB Bank Public Joint Stock Company;

(6) Joint Stock Company Alfa-Bank;

(7) Public Joint Stock Company Rosbank;

(8) Bank Zenit Public Joint Stock Company;

(9) Bank Saint-Petersburg Public Joint Stock Company;

(10) National Clearing Center (NCC);

(11) 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

(12) the Central Bank of the Russian Federation.

 

(b) For the purposes of this general license, the term “related to energy” means the extraction, production, refinement, liquefaction, gasification, regasification, conversion, enrichment, fabrication, transport, or purchase of petroleum, including crude oil, lease condensates, unfinished oils, natural gas liquids, petroleum products, natural gas, or other     products capable of producing energy, such as coal, wood, or agricultural products used to manufacture biofuels, or uranium in any form, as well as the development, production, generation, transmission, or exchange of power, through any means, including nuclear, thermal, and renewable energy sources.

 

GENERAL LICENSE NO. 25G: Authorizing Transactions Related to Telecommunications and Certain Internet-Based Communications

 

(a) All transactions ordinarily incident and necessary to the receipt or transmission of telecommunications involving the Russian Federation that are prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized.

 

(b) The exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, wherever located, to the Russian Federation of services incident to the exchange of communications over the internet, such as instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, blogging, social media platforms, collaboration platforms, video conferencing, e-gaming, e-learning platforms, automated translation, web maps, user authentication services, web hosting, and domain name registration services, that is prohibited by the RuHSR, is authorized.

 

(c) The exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, to the Russian Federation of software, hardware, or technology incident to the exchange of communications over the internet is authorized, provided that:

 

(1) If the software, hardware, or technology is subject to the Export Administration Regulations, 15 CFR parts 730 through 774 (EAR), the exportation, reexportation, sale, or supply to the Russian Federation of such software, hardware, or technology is licensed or otherwise authorized by the Department of Commerce pursuant to the EAR; and

 

(2) If the software, hardware, or technology is not subject to the EAR, the exportation, reexportation, sale, or supply to the Russian Federation of such software, hardware, or technology would be eligible for a license exception or otherwise authorized by the Department of Commerce if it were subject to the EAR.

 

GENERAL LICENSE NO. 110: Authorizing the Wind Down of Transactions Involving Certain Entities Blocked on October 30, 2024

 

(a) 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 standard time, December 14, 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) XH Smart Tech China Co Ltd;

(2) Lokesh Machines Limited;

(3) Galaxy Bearings Ltd;

(4) Orbit Fintrade LLP;

(5) Wuhan Huazhong Numerical Control Co Ltd;

(6) Beijing Dynamic Power Co Limited;

(7) Sharpline Automation Private Limited; or

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

 

GENERAL LICENSE NO. 111: Authorizing Certain Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Certain Entities Blocked on October 30, 2024

  1. a) 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 standard time, December 14, 2024:

 

(1) XH Smart Tech China Co Ltd;

(2) Lokesh Machines Limited;

(3) Galaxy Bearings Ltd;

(4) Beijing Dynamic Power Co Limited;

(5) Wuhan Huazhong Numerical Control Co Ltd; or

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

 

(b) 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, October 30, 2024 are authorized through 12:01 a.m. eastern standard time, December 14, 2024.

 

(c) All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the wind down of derivative contracts entered into prior to 4:00 p.m. eastern daylight time, October 30, 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 standard time, December 14, 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).

 

GENERAL LICENSE NO. 112: Authorizing Civil Aviation Safety and Wind Down Transactions Involving Shaurya Aeronautics Private Limited

 

(a) All transactions prohibited by Executive Order (E.O.) 14024 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 Shaurya Aeronautics Private Limited (Shaurya), or any entity in which Shaurya owns, directly or indirectly, a 50 percent or greater interest (collectively, the “Blocked Persons”), are authorized through 12:01 a.m. eastern standard time, December 14, 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.

 

(b) All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the wind down of any transaction involving the Blocked Persons, are authorized through 12:01 a.m. eastern standard time, December 14, 2024, provided that any payment to the Blocked Persons must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).

 

FAQ 1198:

 

Q:  In light of the designation of Shreya Life Sciences Private Limited (Shreya), are U.S. persons authorized to engage in transactions related to pharmaceutical and other humanitarian-related goods involving Shreya and its subsidiaries?

 

A: Yes. As a general matter, humanitarian trade is not the target of U.S. sanctions.

OFAC has issued Russia-related General License (GL) 6D, which authorizes, among other things, certain transactions related to the production, manufacturing, sale, transport, or provision of medicine and medical devices. U.S. persons may continue to engage in authorized transactions involving Shreya under GL 6D. Additionally, non-U.S. persons generally would not face sanctions risk for engaging in transactions authorized for U.S. persons under general licenses issued pursuant to the Russian Harmful Foreign Activities Sanctions program. For further information, please review the OFAC Food Security Fact Sheet: Russia Sanctions and Agricultural Trade

 

Please see link below for full list of sanctioned entities and individuals.

 

https://ofac.treasury.gov/recent-actions/20241030 and

https://home.treasury.gov/news/press-releases/jy2700 and

https://ofac.treasury.gov/media/933531/download?inline and

https://ofac.treasury.gov/media/933536/download?inline and

https://ofac.treasury.gov/media/933541/download?inline and

https://ofac.treasury.gov/media/933546/download?inline and

https://ofac.treasury.gov/media/933551/download?inline and

https://ofac.treasury.gov/faqs/1198

 

*******

October 31, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned five Mexican nationals, and two Mexico-based entities linked to La Linea, a violent Mexico-based drug trafficking organization responsible for trafficking fentanyl and other deadly drugs into the United States. This action was coordinated closely with the Drug Enforcement Administration and the Government of Mexico, including La Unidad de Inteligencia Financiera (UIF), Mexico’s Financial Intelligence Unit.

 

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued an OFAC Compliance Communiqué: Sanctions Compliance Guidance for the Maritime Shipping Industry to aid maritime sector stakeholders in identifying certain new or common fact patterns that may be indicative of sanctions evasion, addressing common counterparty due diligence issues, and implementing best practices to promote sanctions compliance.

 

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

 

  • Aguayo, Adrian of Mexico;
  • Carrasco Levya, Josefa Yadira of Mexico;
  • Nieto Fierro, Heber of Mexico;
  • Oretega Gallegos, Jorge Adrian of Mexico; and
  • Salas Aguayo, Jesus of Mexico.

 

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

 

  • Y H. El Remate, Sociedad Anonima De Capital Variable; and
  • Soluciones Tecnologicas y Paqueteria Tres, Sociedad Anonima De Capital Variable.

 

https://ofac.treasury.gov/recent-actions/20241031 and

https://home.treasury.gov/news/press-releases/jy2704 and

https://ofac.treasury.gov/media/933556/download?inline

LATEST EXPORT CONTROLS AND COMPLIANCE UPDATE OCTOBER 2024 Read More »

SEPTEMBER 2024 EXPORT CONTROL REGULATIONS UPDATES

This newsletter is a listing of the latest changes in export control regulations through September 30, 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.

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

 

 REGULATORY UPDATES

President Biden Continued the National Emergency with Respect to Ethiopia

 September 6, 2024: On September 17, 2021, by Executive Order 14046, President Biden 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 and foreign policy of the United States constituted by the situation in and in relation to northern Ethiopia.

The situation in and in relation to northern Ethiopia, which has been marked by activities that threaten the peace, security, and stability of Ethiopia and the greater Horn of Africa region, continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.  For this reason, the national emergency declared in Executive Order 14046 of September 17, 2021, must continue in effect beyond September 17, 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 14046 with respect to Ethiopia.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/09/06/press-release-notice-on-the-continuation-of-the-national-emergency-with-respect-to-ethiopia/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/page/3/

*******

President Biden Continued the National Emergency with Respect to Foreign Interference in or Undermining Public Confidence in United States Elections

 September 9, 2024: On September 12, 2018, by Executive Order 13848, 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 and foreign policy of the United States constituted by the threat of foreign interference in or undermining public confidence in United States elections.

Although there has been no evidence of a foreign power altering the outcomes or vote tabulation in any United States election, foreign powers have historically sought to exploit America’s free and open political system.  In recent years, the proliferation of digital devices and internet-based communications has created significant vulnerabilities and magnified the scope and intensity of the threat of foreign interference.  The ability of persons located, in whole or in substantial part, outside the United States to interfere in or undermine public confidence in United States elections, including through the unauthorized accessing of election and campaign infrastructure or the covert distribution of propaganda and disinformation, 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 September 12, 2018, must continue in effect beyond September 12, 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 13848 with respect to the threat of foreign interference in or undermining public confidence in United States elections.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/09/09/press-release-notice-on-the-continuation-of-the-national-emergency-with-respect-to-foreign-interference-in-or-undermining-public-confidence-in-united-states-elections-2/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/page/3/

*******

 President Biden Continued the National Emergency with Respect to Certain Terrorist Attacks

 September 9, 2024:   Section 202(d) of the National Emergencies Act, 50 U.S.C. 1622(d), provides for the automatic termination of a national emergency unless, within 90 days prior to the anniversary date of its declaration, the President publishes in the Federal Register and transmits to the Congress a notice stating that the emergency is to continue in effect beyond the anniversary date.  Consistent with this provision, President Biden has sent to the Federal Register the enclosed notice, stating that the emergency declared in Proclamation 7463 with respect to the terrorist attacks on the United States of September 11, 2001, is to continue in effect for an additional year.

The terrorist threat that led to the declaration on September 14, 2001, of a national emergency continues.  For this reason, President Biden has determined that it is necessary to continue in effect after September 14, 2024, the national emergency with respect to the terrorist threat.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/09/09/message-to-the-congress-on-the-continuation-of-the-national-emergency-with-respect-to-certain-terrorist-attacks/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/page/3/

*******

President Biden Continued the National Emergency with Respect to Persons Who Commit, Threaten to Commit, or Support Terrorism

 September 18, 2024: On September 23, 2001, by Executive Order 13224, 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 grave acts of terrorism and threats of terrorism committed by foreign terrorists, including the terrorist attacks on September 11, 2001, in New York and Pennsylvania and against the Pentagon, and the continuing and immediate threat of further attacks against United States nationals or the United States.

On September 9, 2019, the President signed Executive Order 13886 to strengthen and consolidate sanctions to combat the continuing threat posed by international terrorism and to take additional steps to deal with the national emergency declared in Executive Order 13224, as amended.

The actions of persons who commit, threaten to commit, or support terrorism 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 in Executive Order 13224 of September 23, 2001, as amended, and the measures adopted to deal with that emergency, must continue in effect beyond September 23, 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 with respect to persons who commit, threaten to commit, or support terrorism declared in Executive Order 13224, as amended.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/09/18/notice-on-the-continuation-of-the-national-emergency-with-respect-to-persons-who-commit-threaten-to-commit-or-support-terrorism-3/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/

*******

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

 Update to US Person Abroad Guidance

September 4, 2024: The Directorate of Defense Trade Controls (DDTC) has released an update to the “Guidance for USPAB Authorization Requests” document. The update (v. 2.0) includes several clarifications and a new section, “Support for Space Launch Campaigns”. The updates are summarized below:

  • Provides clarification on defense service recipients including vendors, subcontractors, actual or potential customers, or other foreign entities with whom the USPAB may work directly;
  • Provides clarification on the scope of an approval in new “Scope of an Authorization” section to include requirements to identify the specific defense articles, programs, and platforms in the application. For developmental programs the authorization may be granted to furnish defense services related to defense articles in a development/prototype phase without identifying a specific defense article, program or platform. However, once the defense article moves beyond the development phase, you must submit a replacement request that identifies the defense article by its specific designation as well as the intended end-use systems and platforms;
  • Provides clarification on the identification of end-use systems/platforms. If the defense article for which defense services will be furnished is a system, component, or part, the application must identify the end-use systems and/or platforms for which the defense article will be used on, in, or with. All intended end-use systems and/or platforms must be identified;
  • Requests that all documents be submitted in text-searchable PDF format to make it easier on the reviewers to search for specific information in the filing;
  • Provides additional guidance in new subsection A on drafting the opening sentence of “Section II – Scope of Request” to identify the defense articles for which the applicant will be providing defense services, as well as any end-use systems and platforms which will incorporate the defense article with which the applicant will work. Whenever possible, identify defense articles by their specific designations (e.g., AN/APG-82(V)1 AESA radar);
  • Provides additional guidance in identifying the USML defense service subcategories in Parts 3 and 4 by adding Table 1 to the guidance that lists all of the technical data USML Categories;
  • Specifies that contact information should be provided if appointing a third party POC;
  • Adds new requirements for the completion of block 8 on the DS-6004 to provide a brief description of the request which identifies the defense services, defense articles, and end-use systems/platforms involved in the request;
  • Adds a new section – “Part 5 – Support for Space Launch Campaigns”. If the U.S. persons are employed with a foreign entity that will be involved in space launch campaign activities, additional information is required. The request must identify the following: 1) The specific satellites/payloads to be launched; 2) The launch facility and location; 3) The launch vehicle and launch service provider; and 4) The foreign parties involved in the space launch campaign;
  • Modifies the “Statement of Understanding” to identify that the applicant understands that their authorization will be limited to the defense articles and end-use systems/platforms specifically identified in their application; and
  • The updates also make various administrative changes to sample letters.

https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_kb_article_page&sys_id=f9ccfe96dbb4130044f9ff621f961929 and

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

*******

International Traffic in Arms Regulations: Revisions to Definition and Controls Related to Defense Services; Extension of Comment Period

 September 25, 2024: 89 Fed. Reg. 78278: The Department of State is extending the comment period for a proposed rule published July 29, 2024. The original comment period required submission of comments on or before September 27, 2024. In response to requests from the public, the Department extends the comment period through October 15, 2024.

https://www.federalregister.gov/documents/2024/09/25/2024-22041/international-traffic-in-arms-regulations-revisions-to-definition-and-controls-related-to-defense

*******

 Amendment to the International Traffic in Arms Regulations: Update to Republic of Cyprus (ROC) Country Policy

 September 27, 2024: 89 Fed. Reg. 79140: 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 Republic of Cyprus and its status as a proscribed destination from October 1, 2024, through September 30, 2025.

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

*******

DDTC Name And Address Changes Posted To Website

September 3rd through 27th, 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:

  • Name change of CPI International, Inc. to Beverly Microwave Division and Microwave Power Products, Inc. due to acquisition by TransDigm Inc.;
  • Name change of Cadence Engines Systems Acquistion, LLC to Kinetic Engines Systems Acquistion, LLC due to corporate restructuring;
  • Name change of Kongsberg Maritime Spain SLU to Kongsberg Discovery Spain SLU due to corporate restructuring;
  • Address change for Paradigm Parachute & Defense Inc., 4040 Ashland Avenue, Pensacola, Florida 32534 to Paradigm Parachute & Defense Inc. at 7303 Plantation Road, Pensacola, Florida 32504;
  • Name change of Meta Spectrum Operations LLC to Metrea Spectrum Operations LLC due to corporate rebranding;
  • Name change of Adimec Electronic Imaging, Inc. to Teledyne Adimec Electronic Imaging, Inc. due to corporate rebranding;
  • Address change for Metrea Executive Aviation LLC, 5525 W. Cypress St, Tampa, FL 33607 to Metrea Executive Aviation LLC, 4751 Jim Walter Blvd., Hangar 7B, Tampa, FL 33607; and
  • Address change from Metrea Mission Data Limited, Malvern Science Park, Geraldine Rd, Malvern, Worcestershire, UK WR14 3SZ, to Metrea Mission Data Limited, Third Floor, the Aircraft Factory, 100 Cambridge Grove, London, W6 0LE.

 *******

 DDTC Final Commodity Jurisdiction Determinations Posted to Website

 June 13, 2023 through September 12, 2024: On September 17, 2024 the Directorate of Defense Trade Controls (DDTC) posted the following Final CJ Determinations for CJ’s adjudicated between, June 13, 2023 through September 12, 2024, on its website at:

https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_kb_article_page&sys_id=6ea6afdcdbc36300529d368d7c96194b

Readers may find these determinations helpful when performing self-classification work.

Model Name Manufacturer Final Determination Final Determination Date
RAST System AC Motor, Part Number C15-42, NSN 610-50-1273-5927 Electromech Technologies USML Category VIII(h)(5) 6/13/2023
Spectral AI Nexus and ARTemis MIND Technology, Inc EAR99 6/13/2023
BL-1 Loader, Version 2, Part Number GN-80-00-00-000 US Advanced Systems LLC USML Category IV(c) 6/13/2023
Anti-Personnel Obstacle Breaching System (APBOS), Model MK7 MOD2, NSN 1375-01-508-4975 Ensign-Bickford Aerospace & Defense Company USML Category IV(b)(2) 6/13/2023
Integrated Panel Assemblies, Model 25515, Part Numbers 25515-004 and 25515-007 Transdigm, Inc USML Category XII(e)(1) 6/13/2023
Generic Radiofrequency (RF) Filter Manufacturing and Assembly Process Smiths Interconnect Americas Inc Seek CCATS 6/13/2023
XDE Cobalt, Model Number: V1.0, Part Number: XDE-CBT-OWT-LOQ Owl Cyber Defense Solutions, LLC CCL ECCN 5A002.a.1 6/13/2023
VISOR Ci ,/Model Number VISOR 36xx series, Part Number 100933xx Chemring Sensors and Electronic Systems, Inc/CHG Group, Inc USML Category IV(c) 7/11/2023
Gyromagnetic Nonlinear Transmission Line, Part Numbers: NLTL-1525-FCV3 and NLTL-1525-FCV3AL Metamagnetics, Inc USML Category XI(a)(7) 7/11/2023
Helios Ravn Inc USML Category XI(a)(7) 7/19/2023
Heli-Basket, HB2000 Helibasket LLC EAR99 7/19/2023
SWE-400 QUAD Trakka USA LLC CCL ECCN 6A003.b.4.b 7/19/2023
Advanced Systems Susceptibility and Risk Analysis Toolkit (ASSURANT) Software Version 4.0.2, and ASSURANT Commercial Software Knowledge Based Systems, Inc EAR99 7/19/2023
Face Seal Assembly, Model A, Part Number 913-0067-052 Enpro Industries, Inc CCL ECCN 9A619.x 7/24/2023
Mark 7 Genesys Automated Loading System, 101-1500-xx (various) Lyman Products Corporation CCL ECCN 0B505.a 7/24/2023
Booby Trap Simulator, Model Numbers M117, M118, and M119 WMDTECH, LLC CCL ECCN 0A614.a 7/24/2023
X4 – Fire Control System Maztech Industries, LLC USML Category XII(c)(2)(iii) 7/24/2023
LED 360-degree Situational Awareness Kit with Infrared, Model 07630, NSN 6220-01-629-4494 Truck-Lite Co, LLC CCL ECCN 0A606.y.12 7/24/2023
Aero Vodochody L-39 Albatross Turbojet Aircraft Aero Vodochody USML Category VIII(a)(3) 7/24/2023
Convoy Escort Vehicle Turret Wire Strain Relief Components Dillon Aero, Inc CCL ECCN 0A501.x:  1) Power Up-Converter Cable, Part Number DATV1219
2) Dual Battery Cage Charge Wire, Part Number DAVM0136
————————–
CCL ECCN 0A606.x:  3) Charge Swivel Disconnect Tab, Part Number DAVM0775
4) Disconnect Lanyard, Part Number DAVM0776
5) Swivel Disconnect Bracket Assembly, Part Number DAVM0777
6) Backshell Half, Charge – MMC, Part Number DGV1051
7) Charge Breakaway Pivot – MMC, Part Number DGV1052
————————–
EAR99:  8) Charge Breakaway Bushing – MMC, Part Number DGV1053
7/26/2023
Vapor Pinion Instruction Set and Boeing Pinion Instruction Set ITW Heartland Seek CCATS 7/26/2023
Cold Forming Machines (Formax 2, Models FX3 and FXP2; Formax 3, Models FX3 and FXP3; Formax 4, Models FX4 and FXP3; Formax 5, Models FX3 and FXP3; Formax 6, Models XXV; Formax 7, Model FXP7, and Formax 8, Model FXP8); Miscellaneous Cold Forming Tools; Steel Projectiles for Firearms National Machinery LLC Seek CCATS:  Formax Machines, replacement parts, components, and tooling, for the Formax Machines

USML Category III(d)(6):  Steel projectiles, regardless of caliber

Technical Support – Response Pending

7/26/2023
Low-Cost Blue-Chip Slapper (detonator), Part Number 334740 Excelitas Technologies Corp CCL ECCN 1A007.b.4 7/26/2023
AGM NVG-40, Models: NL1, NL2, NW1, and NW2, Part Numbers: 14NV4122483021, 14NV4122483011, 14NV4122484021, and 14NV4122484011

AGM NVG-50, Models: NL1, NL2, NW1, and NW2, Part Numbers: 14NV5122483021, 14NV5122483011, 14NV5122484011, and 14NV5122484021

AGM Global Vision LLC CCL ECCN 6A992.b 7/26/2023
Ammo Bearer Pack Kit, Model 98754-MC MMI Outdoor, Inc EAR99 7/26/2023
Tyton VS2X Series, Part Numbers 19-0251-
01 and 19-0251-11
EIZO Rugged Solutions Seek CCATS 7/26/2023
Axiom Thruster, Part Number 10007604 Axiom Space, Inc CCL ECCN 9A515.h 8/2/2023
Air-Scooping Electric Thruster Viridian Space Corporation Seek CCATS 8/2/2023
Bumper Assembly, Arresting Hook, Part Number 16L364-3 Sonfarrel Aerospace, LLC USML Category VIII(h)(5) 8/2/2023
X4-Magazine Magpul Industries Corp CCL ECCN 0A501.d 8/2/2023
Large Area Silicon Photodiode Detector Assembly with 904 nm NIR (Near-Infrared) Transmitting Optical Filter, Model Number: PIN 12492-2, Part Number: 90 504 000 OSI Optoelectronics, Inc CCL ECCN 0A614.x 8/2/2023
Bearing, Liquid Oxygen Turbopump; Technology Development and Manufacture, Part Number: 710-005 Napoleon Engineering Services CCL ECCN 9A604.x 8/2/2023
Extra Large Uncrewed Undersea Vehicle (XLUUV), Part Numbers 1717200-1000-1 and 1717401-2000, and its specially designed parts, components, accessories, and attachments The Boeing Company USML Category XXI(a) 8/2/2023
M548A1 Tracked Amphibious Cargo Carrier, Model M548A1, Serial Number CHX426HAB FMC Corporation CCL ECCN 0A606.a 8/19/2023
Hot Zone, Model GS1 Ochocoarms, dba HotZone Tactical CCL ECCN 0A504.f 8/19/2023
Frequency Converter 150kW, 50/400 Hz Part Number 015.09.0130 for the Patriot Missile System and Cable Set Tiburon Associates, Inc EAR99 8/19/2023
Rake System, its Design, Associated Assemblies, Test Data and Services Aerodyn Engineering, LLC USML Category VIII(i):  Direction in the integration of the System onto a jet trainer

CCL ECCN 9E619.a:  Rake System Design, Vibratory Testing Data, Flow Calibration Data, and Static Calibration Data

CCL ECCN 9B619.b:  Rake System Assembly, the Vibratory Test Rake System Assembly, and the Flow Calibration Rake

8/4/2023
Unified Data Library (UDL), Version Number 1.13.0 Sauternes Bluestaq CCL ECCN 5D002.c.1 8/23/2023
G.L.O.V.E. (Generated Low Output Voltage Emitter), Model and Part Number: CT-F2P Gen4.1 Sparrow Engineering, Inc CCL ECCN 0A503 8/28/2023
SX-124 Position, Navigation and Timing (PNT) Cards, Models SX-124-0000, SX-124-0103, and SX-124-0103v Spectranetix, Inc USML Category XI(c)(2) 8/28/2023
SX-124-5103 – Positioning, Navigation, Timing (PNT) Card with M-Code GPS receiver Spectranetix, Inc USML Category XII(d)(2)(ii) 8/28/2023
Sea Tel, Model 4212 Wideband Antenna, Part Number 140223-1 Sea Tel Inc, dba Cobham SATCOM USML Category XI(a)(5)(v) 8/28/2023
Ka-band SATCOM Terminal, Medium Form Factor, Part Number C810-00383-00, with Receive Array APAR-2EAF1 and Transmit Array APAT-1EAT1 CesiumAstro, Inc Seek CCATS 9/8/2023
Advanced Simulation Combat Operations Trainer Version 7 (ASCOT 7) PLEXSYS Interface Products Inc USML Category XI(d):  Link 11, Link 16, Link VMF, and JREAP-C modules

USML Category IX(b)(4)(ii):  IADS module

EAR99:  ASCOT 7 Core, Floating Client, ASTERIX interface, Smart Air Tactics, CIGI, Automatic Entity Generation, Group Editor, HLAe, Enhanced Weapons, Jamming, and ATO/ACO/OPTASKLINK

9/8/2023
AeroGuard Counter-UAS System, Model AeroGuard A6-B Sanmina Corporation Seek CCATS 9/8/2023
.22 Long Rifle Tracer Ammunition, Model Number .22LR Tracer, Part Number .22LRMK1 Piney Mountain Ammunition Company USML Category III(a)(6) 9/18/2023
Multi-Role Tactical Laser (MRTL), Model Number MRTL-A002 Acme Solutions LLC USML Category XVIII(a) 9/18/2023
UAS Kit THORAD, LLC Seek CCATS 9/18/2023
Lynq PRO, Models   VL-10000, VL-10100, VL-10200, VL-10300, VL-80000, VL-80006, VL-80012, VL-81012, and VL-82012 OTTO Seek CCATS 9/18/2023
Puma 550 AeroVironment, Inc CCL ECCN 9A012.a.2 9/18/2023
Double Layer Capacitors, Part Numbers: SCC‐2.7V‐3000F max, SCC‐2.7V-850F max-Low ESR, SCM‐9.0V max-7.5F max, and SCP‐2.1V‐8.5F max KYOCERA AVX Components Corporation EAR99 9/18/2023
NWUAV Proton Exchange Membrane (PEM) Fuel Cell for Unmanned Systems, Model NWFC-1500 Northwest ULD, Inc CCL ECCN 9A610.x 9/18/2023
Cylinder, Indent, Firing Pin, Drawing Number 13051594 Rev B Cox Manufacturing Company, Inc EAR99 9/22/2023
Infrared Chemiluminescent Light Sticks, Model and Version Number: 6″ Infrared Light Stick – 8 Hour Duration, Part Number: SKU: 9-17040PF Cyalume Technologies, Inc EAR99 9/22/2023
M710E TACAN Antenna, All-Band, Model Number 710E – NC, Part Number 711001-100 dB Systems Inc CCL ECCN 3A611.a 9/22/2023
Hypervelocity Accelerator System, Version V.1 Longshot Space Technologies Corp Seek CCATS 9/22/2023
1) HD80-MV-36X-MGI, Part Number 90-4718;
2) HD80-MV-36X-LP-MGI, Part Number 90-4717;
3) HD80RT-MV-36X-LP-MGI, Part Number 90-4713;
4) HD80RT-MV-36X-MGI, Part Number 90-4712;
5) HD80-MV-600-MGI, Part Number 90-4353;
6) HD80-MV-600-LP-MGI, Part Number 90-3317; and
7) HD80RT-MV-600-LP-MGI, Part Number 90-4368
Trillium Engineering, LLC CCL ECCN 6A003.b.4.a 9/22/2023
Mk48 Nutsack Type 1, Model Number TTS-MK48T1 Gen 1, and  MK48 Nutsack Type 2, Model Number TTS-MK48T2 Tribe Tactical Supply LLC USML Category I(h)(1) 9/29/2023
Speaker Modular Mission Payloads (MMP), Model MMP-SPEAKER, and Strobe and Noise Distraction MMP, Model MMP-SAND Reconrobots Inc Seek CCATS 9/29/2023
Computing, Networking, and Cyber Fundamentals Training Lockstone Technologies LLC Not a defense service 9/29/2023
Realtime Enhanced Voice Authentication (REVA) Eduworks Corporation Seek CCATS 10/9/2023
Cold Key Loading Set, Part Number 3867AS145-1 Form Fit and Function LLC CCL ECCN 3A611.x 10/9/2023
RGCS (Resilient Gravitronic Communication System) UNSPACE, LLC Seek CCATS 10/9/2023
Laser Instrumented Diagnostic Suite BlueHalo, LLC USML Category XVIII(e) 10/10/2023
Dual Rotary Variable Differential Transducer, Part Number 25565 Curtiss-Wright Corp USML Category VIII(h)(1) 10/26/2023
Stowable Telescoping Aircraft Boarding Ladder (STABL) Part Number 326C1S5901-201, for T-7A Trainer Aircraft The Boeing Company USML Category VIII(f) 10/26/2023
Cyber Intel Classification Banner, Model CICBv2, Part Number CICB-400 Arksoft Inc DBA Cyber Intel Systems EAR99 10/30/2023
RF Sensor Assembly, FireBurst, Part Number 2630-202 Technology Service Corporation USML Category IV(h)(18) 11/2/2023
High Mobility Multipurpose Wheeled Vehicles (HMMWV), Model M1165A1, Serial Number: 332621 AM General USML Category
VII(b)
11/2/2023
MP-781, 40 x 46 mm Training Round, Model and Part Number MP-781 NonLethal Technologies, Inc Seek CCATS 11/2/2023
Electronic Connector, Model Number MIL-C-5015, Part Number MS3452L24-10P Conesys, Inc CCL ECCN 3A611.y.1 11/2/2023
Starlink Internet Connectivity Services Space Exploration Technologies Corp CCL ECCN 5A992.c 11/7/2023
LiBM5JV-1 (5Ah cell) Part Number LiBM5JV-1 Vectra Co dba EaglePicher Technologies, LLC  CCL ECCN 3A991.j.2 11/7/2023
Equitus 6.0 Integration and Analysis Software Equitus Corporation CCL ECCN 5D002.c.1 11/7/2023
Unitary Braid Division Multiplexing (“UBDM”) Rampart Communications, Inc Seek CCATS 11/15/2023
Amphibious Bulk Liquid Transfer System (ABLTS), Model ROKNABLTS 001 Maritime Innovations Inc CCL ECCN 8A609.x 11/29/2023
ColdFIRE Photoluminescent Ceramic Powder, Model Number CF-V2, Part Number BST-CF-01 Battle Sight Technologies, LLC EAR99 12/6/2023
Carbon Plume Mapper Instrument California Institute of Technology – Jet Propulsion Laboratory CCL ECCN 9A515.g.3 12/6/2023
3-Inch, 8-Hour LightShape Infrared Light Circle, Part Number: 9-17050PF; 3-Inch, 3-Hour Cyalume LightShape Infrared Light Circle, Part Number: 9-50850PF; Infrared Chemiluminescent Light Pad, Part Number: 9-27621; and Cyalume S.O.S. Light, Part Number: SKU: 9-42741PF Cyalume Technologies Inc EAR99 12/6/2023
PowerBook T/R Module, Part Number 293999-1 L3 Harris Technologies, Inc USML Category XI(c)(1) 12/22/2023
Accelerometer, CVLG, 1000uA/g, integral 30 ft. twisted shielded pair cable, Model 631M21, Part Number 631M21 PCB Piezotronics, Inc EAR99 12/26/2023
Tube Assembly – Flanged, Model Number Revision 35, Part Number 294E246 – 35 Leech Holdings, LLC Seek CCATS 12/26/2023
High Mobility Multipurpose Wheeled Vehicle (HMMWV) Model 1097R1, Serial Number 003684 and Model 1097A2, Serial Number 214996 AM General LLC CCL ECCN 0A606.a 12/26/2023
C800 Gamma Ray Imaging Spectrometer H3D, Inc CCL ECCN 1A004.c.2 12/26/2023
Open Mission Systems (OMS), Version 2.2 and Universal Command and Control Interface (UCI), Version 2.2 The Boeing Company USML Category VIII(i) 12/27/2023
Beast Core Beast Code Seek CCATS 12/27/2023
Microwave Solid State Amplifiers, Part Numbers TSA-210040 and TSA-210043 Teledyne Technologies Incorporated
DBA: Teledyne Microwave Solutions
USML Category VI(a)(7) 12/28/2023
Gunners’ Display Unit, Part Number MG9900 Mandus Group LLC USML Category XII(e)(1) 12/28/2023
Non-Rechargeable Pistol-Mounted Light with White Light, IR Light, and IR Laser, TWM-30-IR Bayco Products USML Category XII(c)(2)(iv) 12/29/2023
Objective Cell Assembly, Model REV E, Part Number A3256364 FUJIFILM Optics Co., Ltd USML Category XII(e)(18) 12/29/2023
Remote Key Fill Device (RKFD), Model v2, Part Number FT-0106 Forward Thinking, Inc USML Category XIII(b)(5) 12/29/2023
National Instrument (NI) Satellite Link Emulator (SLE) Intellectual Property (IP) National Instruments Corporation Seek CCATS 12/29/2023
Tebis Software, Version V4.1R6SP2, and Installation, Configuration, Implementation, Technical Support, and Training Services for Tebis software Tebis America Inc Seek CCATS:  Software

Services: (1) Defense service when provided to a foreign person; assist in the design, production, or manufacture of a defense article; and directly related to the defense article; (2) Not a defense service when provided only to U.S. persons or not directly related to a defense article

1/4/2024
Cyber Attack Emulator Library, Model 8.0, Part Number SN100CYLA Keysight Technologies, Inc USML Category IX(b)(4)(iii) 1/17/2024
IK-1337 Keypad, PCB, design technology, and silicone casing, Model IK-1337 Rev 03, Part numbers IK-1337-PCB, IK-1337-PADBLUE,
and IK-1337-PADYELLOW
iKey, Ltd 1) USML Category XIII(b)(5):  keypad
2) USML Category XI(c)(2):  PCB
3) USML Category XI(d):  Design technology
4) EAR99:  keypad casing
1/30/2024
SUPERION Passive RF Detection System Stucan Solutions Corporation USML Category XI(a)(4)(i) 2/7/2024
MH-1 Night Vision Housing Low Light Innovations EAR99 2/7/2024
Solid State Microwave Amplifier, Part Number ALN/111-7015-172 Kratos Defense & Security Solutions, Inc/CTT, Inc USML Category XI(c)(3) 2/7/2024
Mine Clearing Loader U.S. Army Combat Capabilities Development Command (DEVCOM) USML Category IV(c) 2/7/2024
Voluntary Industry Performance Standards for Firearm Sound Suppressors Akin Gump Strauss Hauer & Feld LLP EAR99 2/7/2024
Pellets or granules of a Mixture of Boron and Potassium Nitrate, Model BKNO3 (Type IIA and Type IIB) Hunting Titan Inc USML Category V(c)(4)(ii)(A) 2/7/2024
COSA Design Principles and Open Architecture Recommendations (Document) Version 1.0, Document Number: COSA-MGT- 0063 U.S. Army DEVCOM AVMC TDD EAR99 2/7/2024
Microcircuit Chips, Model and Version Numbers: P1750A, P1750AE, P1753, P1754, and P1757ME HEICO Corporation
DBA: Pyramid Semiconductor Corporation
USML Category XI(c)(3):  Part Number P1757ME

CCL ECCN 3A001.a.2.c:  Part Numbers P1750A, P1750AE, P1753, and P1754

2/16/2024
Workbench Software, version 1.1, for Royce Geo’s Coordinate, Understand, Resource, Visualize, Enhance (CURVE) operating environment Royce Geospatial Consultants, Inc CCL ECCN 5D002.c.1 2/16/2024
DRF3182, part number 910-92081-03 Mercury Systems, Inc CCL ECCN 5A002.a.4 2/18/2024
iPad Pilot Training Software for a military aircraft Reaction Simulation, LLC USML Category VIII(i) 2/18/2024
SPYDR Version 1 Global Military Expert Consulting and Instruction, LLC
DBA: Spotlight Labs
Seek CCATS 2/18/2024
Oven-controlled Oscillator, Model and Version Number: OSI5, Part Number: OSI5010-10.0M Pletronics Inc CCL ECCN 3A001.b.10 2/16/2024
Oven-controlled Oscillator, Model and Version Number: OSF4, Part Number: OSF4005-10.0M Pletronics Inc CCL ECCN 3A001.b.10 2/16/2024
HV550CE1454 and HVHR550CE1454 Capacitors Cornell Dubilier Marketing, Inc USML Category VII(g)(2) 2/16/2024
DeconStrike, Version 1, Part Number 74-0006 North American Rescue, LLC CCL ECCN 1A607.g 2/16/2024
Swing Arm Assembly, Part Number SA-12 Military Systems Group, Inc USML Category VII(g)(8) 3/13/2024
Signal translation and processing software for the Digital Signal Generation Subsystem (DGEN), Part Number SRC6150A-4, and Radio Frequency Generation (RFGEN) Subsystem SRC Inc USML Category XI(d) 3/23/2024
Flat Based Mounting Bracket, Part Number M09-190 Military Systems Group, Inc USML Category VII(g)(8) 3/23/2024
Virtual Sandtable vTAK software Virtual Sandtable LLC Seek CCATS 3/23/2024
VR-Tak Core, version 4.8 Applied Research Associates, Inc Seek CCATS 3/23/2024
Secure Key Cryptographic Library (SKCL), Model v1.0.27, Part Number v1.0.27 JET Technology Labs Inc CCL ECCN 5A002.a 3/27/2024
Blast Exposure Monitor (BEMO), BEMO Safariland, LLC Category XI(a)(7) 3/27/2024
PlasmaTorch Trustees of Purdue University Seek CCATS 3/27/2024
Four versions of a Communications Management Unit (CMU), and related software Mercury Systems Inc USML Category XI(a)(5)(i):  Complete base model CMU with operating system and software application for interfacing with defense articles

USML Category XI(d):  Software application for interfacing with a defense article (AN/ARC 210(V))

CCL ECCN 9A610.x:
1.  Base model CMU with operating system only
2.  K-version CMU with operating system only
3.  Complete base model CMU with operating system and software application for interfacing only with equipment subject to the Export Administration Regulations (EAR)

CCL ECCN 9D610.a:  Software application for interfacing with equipment subject to the EAR (TACAN)

3/27/2024
THERM-A-GAP 579 Pad, Model 69-1145940-579PN, Part Number 20547279-0 Parker-Hannifin Corporation, d/b/a Parker-Hannifin Corporation, Chomerics USML Category XI(c)(10) 4/1/2024
Port Adapter, Part Number 100405-1020-001, and Starboard Adapter, Part Number 100405-1030-001 Babcock Integrated Technology Limited USML Category XX(c) 4/1/2024
Short Wave Infrared (IR) Stick Cyalume Technologies, Inc EAR99 4/1/2024
Common Operational Picture Event Response System (COPERS) KBR, INC. DBA: KBR Wyle Services, LLC Seek CCATS 4/1/2024
PASE Low Band Virtual Aperture Array (VAA), Generation 4.0, Part Number P4LV; PASE Low Band Non-VAA, Generation 4.0, Part Number P4LN; and PASE Mid-Band Non-VAA, Generation 4.0, Part Number P4MN Maerospace Corporation Seek CCATS 4/1/2024
1. Converted AR15 semiautomatic weapon to full auto machine gun;
2. Modified AR15 Lower Receiver- Model Number AR15 A2, Part Number AR15 Lower Receiver (NSN 1005-01-184-4041)
Everwood Run LLC 1. USML Category I(b) and
2. USML Category I(g)
4/1/2024
Runway Surface Monitoring System (RSMS) Oreyeon EAR99 4/1/2024
Silicon Avalanche Photodiode – SAT Series, Model Number: SAT800 and SAT3000 Laser Components USA, Inc EAR99 4/1/2024
MBL-15e, Model MBL-15e, Part Number MBL-15e TLD-ACE Corporation USML Category IV(c) 4/1/2024
MERLIN-A Directional Radiation Detector, Model A2, Part Number 5-15-35687 Spectral Labs Incorporated USML Category XI(a)(4)(i) 4/5/2024
RMS-1022D, 1U Dual Node Rugged Server, Model and Version Number: RMS-1022D, Part Number: F109414-F NCS Technologies, Inc Seek CCATS 4/5/2024
Military Symbology Renderer Version 1.0 Williams Mullen PC ECCN 3D611.a 4/16/2024
ATAK Ballistics Plugin, Version 1.0, and WinTAK Ballistics Plugin, Version 1.0 nVision Technology, Inc. USML Category XII(f) 4/16/2024
Mercury Free Space Optical Communications Terminal, Part Number 1426581 Viasat, Inc. USML Category XI(a)(5)(iii) 4/16/2024
Hybrid Battery Supercapacitor (HBS), Model HBS Wecoso d/b/a West Coast Solutions USML Category XI(a)(7) 4/19/2024
HMC1086 2-6GHz 25W GaN HEMT Power Amplifier, Models HMC1086 (bare die) and HMC1086F (packaged die) Analog Devices, Inc. ECCN 3A001.b.2.a.4 4/19/2024
Troy, Model: BBAI-0001, Part Number: BBAI-0001-P-0001 BigBear.ai, LLC CCL ECCN 5A002.a 4/19/2024
Working Dog Field Decontamination Kit – basic, Model Basic TDA Research, Inc. CCL ECCN 1A607.g.2 4/24/2024
Mid-Body Housing for MAWL series lasers, Model BEM-MAWL-XBX, NSN 1005-01-696-2360 B.E. Meyers & Co., Inc. CCL ECCN 7A611.x 5/6/2024
Training Screw for MAWL Laser, Model SPK-MAWL-TNG, NSN 5855-01-696-2396 B.E. Meyers & Co, Inc CCL ECCN 7A611.x 5/6/2024
Arming Plug for IZLID series lasers, R05-3PIN, NSN 5935-01-528-0139 B.E. Meyers & Co, Inc CCL ECCN 7A611.x 5/6/2024
Amphibious Excavator Humanitarian Demining System U.S. Army Combat Capabilities Development Command (DEVCOM) USML Category IV(c) 5/6/2024
Advanced Simulation Combat Operations Trainer Version 7 (ASCOT 7) Feature Modules: Simulated Integrated Air Defense System (IADS); Simulated JREAP-C; Simulated Link 11; Simulated Link 16; and Simulated Link VMF PLEXSYS Interface Products, Inc. USML Category IX(b)(4)(ii) (Simulated IADS)

USML Category XI(d) (Simulated JREAP-C, Link 11, Link 16, and Link VMF)

5/6/2024
Thrifty Wideband Transceiver, Model Thrifty Wideband Quad Transceiver, Part Number 910-00529-001 Herrick Technology Laboratories, Inc. CCL ECCN 5A991.b.1 5/6/2024
Joint Helmet Mounted Cueing (JHMCS) System Module Assembly for the Next Generation Fixed Wing Helmet (NGFWH). Gentex Corporation USML Category VIII(h)(15) 5/6/2024
Skydio X10 and X10D Drones; Skydio X10 and X10D
Controllers; Skydio X10 Gimbals, Model V100-L, Model
VT100, Model VT300-L, and Model VT300-Z
Skydio Skydio X10 and X10D Drones; Skydio X10 and X10D Controllers; and Skydio X10 Gimbal, Model V100-L – EAR99

Skydio X10 Gimbals, Model VT100, Model VT300-L, and Model VT300-Z – CCL ECCN 6A003.b.4.b

5/6/2024
6 Conductor Bulk Cable, part number N13-46T+00011 New England Wire Technologies USML Category XII(e)(1) 5/6/2024
Red Phosphorus/White Phosphorus (RP/WP) Disassembly and Disposition System and Related Services G. D. O. INC., d/b/a Gradient Technology RP/WP Disassembly and Disposition System: Seek a CCATS

Services:
(1) USML Category III(e) when done for a system designed for USML Category III munitions
(2) Not a defense service if for a system designed for end-items not described on the USML

5/6/2024
37mm Tactical Single Launcher, Models 1415, 1416, 1417, and 1417‐9, Part Numbers 1182510, 1190342, 1184311,
and 1186248
Lewis Machine & Tool (LMT) USML Category II(a)(4) 5/17/2024
IronFist 37/38mm Launcher System, Model Number IF-38-36 NonLethal Technologies, Inc. USML Category II(a)(4) 5/17/2024
Maritime Search-as-a-Service ThayerMahan Inc. USML Category XI(d) 5/17/2024
G222/C27A Spartan Aircraft, Serial Numbers 91-0104 through 91-0106 and 91-0172 through 91-0174 Alenia Aeronautica CCL ECCN 9A610.a 5/17/2024
Solenoid Coil, Model Number: 01-00, Part Number: WE-PN-000651-01-00 Woodruff Engineering Inc. Seek a CCATS 5/17/2024
Blue Steel Ballistics software, Version Number: 1.0 Blue Steel Ballistics, LLC Seek a CCATS 5/28/2024
Rocky Research Brazed Plate Heat Exchanger, Model B315Mx124 IP-SC-S HP SWEP North America, Inc. USML Category XVIII(f) 5/28/2024
Graviton Software Teledyne FLIR LLC EAR99 6/27/2024
Ammunition Manufacturing Equipment: 247-18A”F333″,T23260-B PCH-BLK, p/n 362974; D3878-8 PUNCH, FORM & BLANK, p/n 302492; D3877-9 INSERT FEMALE POINTING, p/n 17141; 211-286B T19741-D CLIPPING PUN, p/n 92769STK; T-31180D, MANDREL HD TURN 5.56, p/n 84964; T5099-3 PUNCH, SWAGING, p/n 963621; E16117_4 PIERCE PUNCH, p/n 1100618 Dayton Progress Corporation Seek a CCATS 6/27/2024
Scaffolding Used as Production Equipment for Submarines Senesco Marine, LLC USML Category XX(c) 6/27/2024
X-CAL, Model X-CAL, Part Number X-CAL, NSN 6920-01-689-7644 Explotrain, LLC CCL ECCN 0A614.a 6/27/2024
Transmit (TX) and Receive (RX) Application Specific Integrated Circuits (ASICs): TX ASIC Part Number 10091472-1, TX ASIC Part Number 10091472-2, and RX ASIC Part Number 009252 CHG Group, Inc. Seek a CCATS 7/24/2024
Azimuth
Bearing,
Model
AP5007466
7-ICD
SKF USA Inc. Seek a CCATS 7/24/2024
Dive Talk Go Dive Talk Gear, LLC CCL ECCN 8A002.q 7/24/2024
Stingray Humanitarian Demining System US Army DEVCOM HD R&D Program USML Category IV(c) 7/24/2024
WA1548, High Energy Storage Capacitor, Model and Part Number: WA1548 WA1548, High Energy Storage Capacitor, Model and Part Number: WA1548 USML Category II(j)(15) 7/26/2029
Pivoting Accessory Rail Scope / Optic Mount, ARS-000-A1, ARS-000-A2, ARS-000-A3, and ARS-000-FTA Austin Precision Products, Inc. (dba LaRue Tactical) EAR99 8/1/2024
TFD Supportability Workbench, Version V5.0.9 Andromeda Systems, Inc. EAR99 8/1/2024
System of Systems Technology Integration Tool Chain for Heterogeneous Electronic Systems (STITCHES) Apogee Research LLC USML Category XXI(a) 8/1/2024
Mobile Fuel and Energy Management (MFEM) Software Ricardo Defense Inc. Seek a CCATS 8/1/2024
Piezo-Resistive Pressure Sensors, Part No. 4260M0136 and 4260M0137 Kistler Instrument Corporation Seek a CCATS 8/1/2024
Vireo; Model Number DRA-16A1 CesiumAstro USML Category XV(e)(1)(ii) 8/20/2024
3D Coded Aperture Imager (Portable Gamma Camera) H3D, Inc. CCL ECCN 1A004.c.2 8/22/2024
AM9011 Tuner Chipset, Part Number: AM9011 Mercury Systems, Inc. EAR99 8/22/2024
Field, Line-of-sight Automated Radiance Exposure (FLARE) Systems, Model and Version Number: FLARE Lantern and FLARE Beacon Labsphere, Inc. Seek a CCATS 8/22/2024
Subphone 580, Model 580 Subsea Import LLC CCL ECCN 5A001.b.1.a 8/22/2024
Rancher Government Carbide and Rancher Federal Consulting Services Rancher Federal, Inc. DBA Name: Rancher Government Solutions CCL ECCN 5D002.c.1 8/22/2024
Elektron Magnesium Alloy Powder, Model Elektron MAP: Elektron® MAP+91, Elektron® MAP+31, Elektron® MAP+43, and Elektron® MAP+21 BA Holdings Inc. Seek a CCATS 8/22/2024
Fused Coupler, Part No. SSCSAP00A0-50 Neptec OS, Inc. Seek a CCATS 8/22/2024
BQ400 Unmanned Aerial Target Drone Mountain Horse, LLC USML Category VIII(a)(10) 8/22/2024
Gunnery Training
System (GTS),
Model Number
GTS-30-Mk44-
50, Part Number
70786; Model
Number GTS-30-
Mk44-762, Part
Number 70350;
Model Number
GTS-25-M242-
50, Part Number
70349; and
Model Number
GTS-25-M242-
762, Part
Number 70500
American
Apex
Corporation
USML
Category
IX(a)(6)
8/28/2024
rF1V Antigen and rF1V+cpG 1018 Plague Vaccine Dynavax Technologies Corporation EAR99/ECCN 1C991.a 8/28/2024
High Voltage Power Supply, model dB 2700 HEICO Corporation USML Category XII(e)(1) 8/28/2024
RF Forge Vadum, Inc. USML Category XI(a)(7) 8/28/2024
Onebrief Planning Software Onebrief, Inc. Seek a CCATS 8/28/2024
TNT-Trinitrotoluene SWORD Defense Systems, Inc. Seek a CCATS 8/28/2024
1. 14C1500 Payload Bay Assembly Forward
2. 14C2000 Payload Bay Assembly AFT
3. 14C3000 Fuselage and Empennage Assembly
4. 14C4000 Wing Assembly Aircraft LH
5. 14C6000 Tail Assembly Aircraft LH
6. 14F1000 Nosecone
7. 14F9050-101 Forward Airbag Door LH
8. 14F9060-101 AFT Airbag Door LH
Kratos Defense & Security Solutions, Inc. USML Category VIII(f) 9/5/2024
HB10K, Remote Tactical Hook System, Model Number HB10K Helibasket LLC Seek a CCATS 9/12/2024
Long Line (Sling-Load Long Line), Model and Part Numbers: LLWL10-XXX; LLWL25-XXX; LLWL30-XXX Helibasket LLC EAR99 9/12/2024
Tank Wall Interface, Part Number: AF-62983-1 Eaton Corporation USML Category VIII(h)(1) 9/12/2024

*******

 DDTC Frequently Asked Questions (FAQs)

Q: What is an Empowered Official (EO)?

A: An Empowered Official (EO) is a term defined in 120.67 of the ITAR. It is a role given by the Corporate Administrator (CA) to a user authorized to sign a licensing application. An EO MUST have a digital certificate to access the licensing application. The system will prompt for the digital certificate password when the EO accesses the Licensing application from the Applications menu.

 

Q: Is it possible for a defense article to be described in multiple entries on the U.S. Munitions List (USML)?

A: Yes, the Order of Review process in ITAR §120.11 allows for more than one category on the USML to apply to a defense article, and as such, you should review all potentially relevant USML entries. Generally, in cases where an item is described in multiple entries, an enumerated entry takes precedence over an entry controlling the item by virtue of a specially designed catch-all. The exception to this rule is where a SME entry is involved. In all situations, a SME entry will take precedence over a non-SME entry. Thus, a classified guidance system for a missile should be listed under Category IV(h)(30), which is SME, and not IV(h)(1).

If through the Order of Review, one determines a particular item itself is not specifically enumerated in the USML, it may still be controlled by virtue of its parts and components, which are caught via a catch-all. For example, a part or component of an airborne radar system specially designed for the F-35 may not be enumerated or captured in USML Category XI but controlled under the specially designed catch-all of Category VIII(h)(1).

 

Q: How do I know if an Australian or United Kingdom party is an “Authorized User” under the ITAR § 126.7 exemption?

A: The list of Authorized Users of Australia and the United Kingdom is available in the Defense Export Control and Compliance System (DECCS).  To access the list, you must enroll in DECCS, log-in, and navigate to the Authorized User list.

 

Q: Can a defense article that is produced or manufactured during the life of an agreement (TAA or MLA) using technical data or defense services received via the agreement be transferred to a foreign person who was a party to the agreement after the expiration of that agreement without further DDTC authorization

A: Yes, the transfer of defense articles that were manufactured during the life of a TAA or an MLA may be transferred among the same foreign signatories and sub-licensees and for the same end users and end uses that were previously authorized under the TAA or MLA.

 

Q: How will the Authorized User list be updated for name changes and mergers and acquisitions? Will there be a gap in Authorized User status to implement those changes?

A: Authorized Users of Australia and the United Kingdom will need to notify their respective government, who will then notify DDTC. There may be a gap in Authorized User status depending on the nature of the name change and the need to update the name on the Authorized User list. The Authorized User list on DECCS is the official list, so parties should ensure the name of the entity they are transferring to via the ITAR § 126.7 exemption is identified appropriately.

 

Q: Must I obtain a DSP-83 for the transfer of Significant Military Equipment or Classified defense articles when using the 126.7 (AUKUS) exemption?

A: No. 123.10(a) excepts the 126.7 exemption from the DSP-83 requirement. Authorized Users of Australia and the United Kingdom provide nontransfer and use certification through the Authorized User enrollment process.

*******

Department of Defense, Defense Security Cooperation Agency (DSCA)

DSCA Notified Congress of Potential FMS Sale To Japan

September 3, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Japan has requested to buy follow-on technical support of AEGIS Class Destroyers, which will include sustainment support and services; AEGIS computer software updates; system integration and testing; in-country and on-site engineering support; familiarization; sustainment; all necessary emergent support engineering and technical support services; operational support; system overhauls; system upgrades; on-the-job practical operations and maintenance; combat systems integration; development, testing, and installation of program patches and adaptation data and annual service agreements; technical inquiries by the purchaser; operation; integration; maintenance; field service engineering; problem investigation; technical assistance; solutions to the technical problems arising from post production and testing capabilities; U.S. Government and contractor technical assistance; and other related elements of logistics and program support. The estimated total cost is $150 million. The principal contractor will be Lockheed Martin Corporation, located in Moorestown, NJ. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/japan-aegis-class-destroyer-follow-technical-support

*******

DSCA Notified Congress of Potential FMS Sale To the Netherlands

September 6, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of the Netherlands has requested to buy two hundred forty-six (246) AIM-9X Sidewinder Block II tactical missiles; six (6) AIM-9X Block II sidewinder captive air training missiles (CATM); two (2) AIM-9X Block II Sidewinder special air training missiles; fourteen (14) AIM-9X Block II Sidewinder tactical guidance units; and two (2) AIM-9X Block II Sidewinder CATM guidance units. Also included are missile containers; spares; personnel training and training equipment; classified and unclassified publications and technical documents; warranties; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total program cost is $691 million. The principal contractor will be RTX Corporation, located in Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

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

*******

DSCA Notified Congress of Potential FMS Sale To Singapore

September 9, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Singapore has requested to buy fifty-four (54) AIM-120C-8 Advanced Medium Range Air-to-Air Missiles (AMRAAM) and two (2) AIM-120C-8 AMRAAM guidance sections. The following non-MDE items will also be included: AMRAAM control section spares, missile containers, and support equipment; Common Munitions Built-In-Test (BIT)/Reprogramming Equipment (CMBRE); ADU-89/E Adapter Group Computer Test Set; spare parts, consumables and accessories, and repair and return support; weapon system support and software, and classified software delivery and support; classified and unclassified publications and technical documentation; training support and equipment; studies and surveys; 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 $133 million. The principal contractor will be RTX Corporation, located in Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

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

 *******

 DSCA Notified Congress of Potential FMS Sale To Israel

 September 12, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Israel has requested to buy additional Heavy Duty Tank Trailers (HDTT) that will be added to a previously implemented case whose value was under the congressional notification threshold. The original FMS case, valued at $40.1 million ($0 in MDE), included HDTTs; spare and repair parts; tool kits; driver tools; corrosion protection; publications and technical documentation; U.S. Government support; technical and logistics support services; storage; and other related elements of logistics and program support. This notification is for the items in the original case and the additional HDTTs. The estimated total cost is $164.6 million. Deliveries are estimated to begin in 2027. The principal contractor will be Leonardo DRS, 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/israel-heavy-duty-tank-trailers

*******

 DSCA Notified Congress of Potential FMS Sale To Japan

 September 13, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Japan has requested to buy up to nine (9) KC-46A aircraft; up to eighteen (18) PW4062 turbofan engines; up to sixteen (16) AN/ALR-69A radar warning receivers (RWRs); up to thirty-three (33) Large Aircraft Infrared Countermeasure (LAIRCM) Guardian Laser Turret Assemblies (GLTAs); and up to eighteen (18) LAIRCM system processor replacements. The following non-MDE items will also be included: missile warning sensors; Cartridge Actuated Devices and Propellent Actuated Devices (CAD/PADs); control interface units; User Data Module (UDM) cards; electronic warfare database support; KIV-77 crypto modules; KY-100 crypto terminals; AN/PYQ-10 Simple Key Loaders (SKL); AN/APX-119 Identification Friend or Foe (IFF) transponders; communications equipment; Computer Program Identification Numbers (CPINS); integration and test support and equipment; aircraft components, parts, and accessories; support and support equipment; spare parts, consumables and accessories, and repair and return support; training aids, devices, and spare parts; minor modifications and maintenance support; instruments and lab equipment; classified and unclassified software delivery and support; facilities and construction support; unclassified publications and technical documentation; personnel training and training equipment; jet fuel; transportation and airlift 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. The estimated total cost is $4.1 billion. The proposed sale of this equipment and support will not alter the basic military balance in the region. The principal contractors will be Boeing Corporation, located in Everett, WA; Pratt & Whitney Military Engines, located in East Hartford, CT; RTX Corporation, located in Goleta, CA; and Northrop Grumman Corporation, located in Rolling Meadows, IL. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/japan-kc-46a-aerial-refueling-aircraft

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 DSCA Notified Congress of Potential FMS Sale To Romania

 September 13, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Romania has requested to buy thirty-two (32) F-35A Lightning II Joint Strike Fighter Conventional Take Off and Landing (CTOL) aircraft; and thirty-three (33) Pratt & Whitney F135-PW-100 engines (32 installed, 1 spare). The following non-MDE items will also be included: AN/PYQ-10 Simple Key Loaders (SKL); Identification Friend or Foe (IFF) equipment, secure communications, precision navigation, and cryptographic equipment; Cartridge Actuated Devices/Propellant Actuated Devices (CAD/PAD); multi-purpose missile equipment; ammunition and weapons components; aircraft and munitions support and support equipment; integration and test support and equipment; spare and repair parts, consumables and accessories, and repair and return support; training aids and devices, and spare parts; major and minor modifications, maintenance, and maintenance support; integrated computer system; electronic warfare data and Reprogramming Lab support; Electronic Combat International Security Assistance Program (ECISAP) software support; aircraft engine Component Improvement Program (CIP) support; classified and unclassified software and software development, delivery, and integration support; classified and unclassified publications and technical documentation; classified and unclassified personnel training, and training gear and equipment; transportation, ferry, and refueling support; facilities and construction support; studies and surveys; Contractor Logistics Support (CLS); 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 $7.2 billion. The principal contractor will be Lockheed Martin Aeronautics Company, located in Fort Worth, TX. 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/romania-f-35-aircraft

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 DSCA Notified Congress of Potential FMS Sale To the Taipei Economic and Cultural Representative Office in the United States

 September 16, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Taipei Economic and Cultural Representative Office in the United States (TECRO) has requested to buy return, repair, and reshipment of classified and unclassified spare parts for aircraft and related 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 $228 million.

https://www.dsca.mil/press-media/major-arms-sales/taipei-economic-and-cultural-representative-office-united-states-35

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 DSCA Notified Congress of Potential FMS Sale To Bulgaria

 September 20, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Bulgaria has requested to buy two hundred eighteen (218) Javelin FGM-148F missiles (includes four (4) fly to buy missiles) and one hundred seven (107) Javelin Lightweight Command Launch Units (LWCLU). Also included are Javelin LWCLU Basic Skills Trainers (BST); Javelin Outdoor Trainers (JOT); Battery Coolant Units (BCUs); System Integration and Check Out (SICO); lifecycle support; Javelin Restricted Interactive Electronic Technical Manual (IETM); Javelin operator manuals; tools; Javelin gunner training; Ammunition Technical Officer (ATO) training; Javelin maintenance training; technical assistance; other associated equipment and services; and other related elements of logistics and program support. The estimated total cost is $114 million. The prime contractors will be the Javelin Joint Venture between Lockheed Martin, located in Orlando, FL; and RTX Corporation, located in Tucson, AZ. There are no known offset agreements in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/bulgaria-fgm-148f-javelin-missiles

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 DSCA Notified Congress of Potential FMS Sale To Sweden

 September 20, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Sweden has requested to buy one hundred twenty (120) AN/USQ-190 Multifunctional Information Distribution System Joint Tactical Radio Systems (MIDS JTRS). The following non-Major Defense Equipment (MDE) items will also be included: communications equipment; support equipment; engineering and technical support and assistance; non-warranty repair and return; training; and other related elements of logistics and program support. The estimated total cost is $31.5 million. The principal contractor is Data Link Solutions, located in Cedar Rapids, IA. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/sweden-multifunctional-information-distribution-system-joint-tactical

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 DSCA Notified Congress of Potential FMS Sale To Egypt

 September 24, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Egypt has requested to buy seven hundred twenty (720) Stinger missiles for vehicle-based use on existing Avenger systems, including twenty (20) Product Verification Flight Test (PVFT) munitions. The following non-MDE items will also be included: 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. The total estimated cost is $740 million. The principal contractor will be RTX Corporation, located in Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/egypt-stinger-missiles

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 DSCA Notified Congress of Potential FMS Sale To Iraq

September 24, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government Iraq has requested to buy additional services that will be added to a previously implemented case whose value was under the congressional notification threshold. The original Foreign Military Sales case, valued at $39 million, included follow-on technical support (FOTS) for vessel maintenance and repair (VMR), which may include ship repair; maintenance; sustainment; support services; repair; upgrades; overhaul services; associated labor and support; U.S. Government and contractor engineering, technical, and logistics support services of off-shore vessels, patrol boats and defenders of U.S. origin; fuel for quarterly tri-lateral exercises; and other related elements of logistics and program support. This notification is for the continuation of this support and services. The estimated total cost is $65 million. The principal contractor will be Amentum, located in Chantilly, VA. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/iraq-follow-technical-support-vessel-maintenance-and-repair

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DSCA Notified Congress of Potential FMS Sale To Australia

 September 27, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Australia has requested to buy up to one hundred (100) Advanced Anti-Radiation Guided Missiles-Extended Range (AARGM-ER) with global positioning system (GPS) precise positioning system (PPS) provided by Selective Availability Anti-Spoofing Module (SAASM) or M-Code; up to twenty-four (24) AGM-88G AARGM-ER guidance sections (spares); and up to twenty-four (24) AGM-88G AARGM-ER control sections (spares). The following non-MDE items will also be included: missile containers; component parts and support equipment; repair; software (classified and unclassified); publications (classified and unclassified); training (classified and unclassified); transportation; U.S. Government and contractor engineering support; and other related elements of logistics and program support. The estimated total cost is $405 million. The principal contractor will be Northrop Grumman Systems, located in Falls Church, VA. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/australia-advanced-anti-radiation-guided-missiles-extended-range

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

 Department of Commerce Implemented Controls on Quantum Computing and Other Advanced Technologies Alongside International Partners

September 5, 2024: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) published an interim final rule (IFR) implementing controls on critical and emerging technologies that have reached broad technical agreement among our international partners. This IFR includes controls related to quantum computing, semiconductor manufacturing, and other advanced technologies. The action strengthens our international relationships with like-minded countries and ensures that U.S. export controls keep pace with rapidly advancing technologies that pose serious threats to our national security when in the wrong hands.

BIS is implementing worldwide export controls on specific types of items, including:

  • Quantum Computing Items: quantum computers, related equipment, components, materials, software, and technology that can be used in the development and maintenance of quantum computers.
  • Advanced Semiconductor Manufacturing Equipment: tools and machines that are essential for the production of advanced semiconductor devices.
  • Gate All-Around Field-Effect Transistor (GAAFET) Technology: technology that produces or develops high-performance computing chips that can be used in supercomputers.
  • Additive Manufacturing Items: Equipment, components and related technology and software designed to produce metal or metal alloy components.

The interim rule added new ECCNs to the CCL, revised existing ECCNs, and included a new license exception called “Implemented Export Controls (IEC)” that authorizes exports and reexports to and by countries that have implemented an export control regime equivalent to the U.S. system (15 CFR § 740.24).  BIS explains that the IEC exemption will be applicable to “900 series” items, which are ECCNs “for which the third digit is a 9 and the fourth digit is a number from 0 to 7 ( e.g., 3A901).”

Adds the following 18 ECCNs: 2B910, 2D910, 2E903, 2E910, 3A901, 3A904, 3B903, 3B904, 3C907, 3C908, 3C909, 3D901, 3D907, 3E901, 3E905, 4A906, 4D906, and 4E906.

Revises the following 9 ECCNs: 2E003, 3A001, 3B001, 3C001, 3D001, 3D002, 3E001, 4D001, and 4E001.

BIS also added “General Order No. 6 to implement three authorizations in paragraph (f) of supplement no. 1 to part 736 of the EAR,” which principally addressed certain quantum information science and technology (“QIST”) grandfathered development and production activity, deemed export / reexports prior to the rule’s promulgation, and recordkeeping requirements related thereto.

Certain license exceptions for “900 series” ECCNs have also become more restricted.  The update was made to 15 CFR § 740.2.

BIS has also added 15 CFR § 742.4(a) that will apply a worldwide licensing requirement “when an ECCN references § 742.4(a)(5) in a National Security license requirement paragraph in the license requirement table of the ECCN,” and establishes BIS presumption of review for certain Country Groups.  Country Group A:1 of supplement no. 1 to part 740 of the EAR will receive a presumption of approval for export and reexport.  Country Group D:1 or D:5 countries will have a presumption of denial.  A case-by-case review will apply to all other Country Groups.  A similar worldwide license requirement for Regional Stability reasons has also been implemented “when an ECCN references § 742.6(a)(10) in an RS license requirement in the license requirement table of the ECCN.”

Finally, 15 CFR Part 772.1 was also expanded to include the new definition.  “GDSII” or “Graphic Design System II.”  GDSII is a database file format for data exchange of integrated circuit artwork or integrated circuit layout artwork. This term is used in ECCNs in Category 3 of the CCL, e.g., ECCN 3D907.

https://www.bis.gov/press-release/department-commerce-implements-controls-quantum-computing-and-other-advanced and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

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 Commerce Proposed Reporting Requirements for Frontier AI Developers and Compute Providers

September 9, 2024: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) released a Notice of Proposed Rulemaking outlining a new mandatory reporting requirement for the world’s leading AI developers and cloud providers.

The proposed rule requires developers of the most powerful AI models and computing clusters to provide detailed reporting to the federal government. This includes reporting about developmental activities, cybersecurity measures, and outcomes from red-teaming efforts, which involve testing for dangerous capabilities like the ability to assist in cyberattacks or lower the barriers to entry for non-experts to develop chemical, biological, radiological, or nuclear weapons.

This proposed regulatory action follows a pilot survey conducted by BIS earlier this year. The information collected through the proposed reporting requirement will be vital for ensuring these technologies meet stringent standards for safety and reliability, can withstand cyberattacks, and have limited risk of misuse by foreign adversaries or non-state actors, all of which are imperative for maintaining national defense and furthering America’s technological leadership. With this proposed rule, the United States continues to foster innovation while safeguarding against potential abuses that could undermine global security and stability.

https://www.bis.gov/press-release/commerce-proposes-reporting-requirements-frontier-ai-developers-and-compute-providers

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 Commerce Implemented Regulatory Changes to Voluntary Self-Disclosure Process and Penalty Guidelines

September 16, 2024: 89 Fed. Reg. 75477: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) issued a final rule making changes to the provisions in the Export Administration Regulations (EAR) related to BIS’s policies and practices regarding voluntary self-disclosures (VSDs) and to the Guidance on Charging and Penalty Determinations in Settlement of Administrative Enforcement Cases (BIS Penalty Guidelines).

This rule provides BIS with increased flexibility to determine fair and appropriate penalty amounts while also making it less burdensome for companies to submit certain VSDs. The rule revises the BIS Penalty Guidelines to change how the Office of Export Enforcement (OEE) calculates the base penalty in administrative cases and how OEE applies various factors to the base penalty to determine the final penalty.

As part of these efforts, BIS is also announcing the appointment of Raj Parekh as its first-ever Chief of Corporate Enforcement. He will serve as the primary interface between BIS’s special agents, the Department of Commerce’s Office of Chief Counsel for Industry and Security, and the Department of Justice to advance significant corporate investigations. This is the first time BIS has appointed a Chief of Corporate Enforcement, further reflecting BIS’s commitment to this effort.

Here are some highlights related to the update:

  • Deliberate decisions “not to disclose a significant apparent violation” will now be considered an aggravating factor for administrative penalties.  Revision to 15 CR § 764.5(a).  Minor or technical violations were subsequently explained to be violations without aggravating factors.  Additionally, the changes allow for bundling of minor and technical violations into quarterly report.  OEE’s goal is to resolve minor or technical violations within 60 days.
  • A dual track VSD process was developed to help bifurcate relatively minor and technical violations (15 CR § 764.5(c)) from more significant violations (15 CR § 764.5(d)).
  • Former 15 CR § 764.5(d) was moved to 15 CR § 764.5(e) and updated to reflect the new dual VSD reporting program.
  • Former 15 CR § 764.5(f) was moved to 15 CR § 764.5(g) and updated to permit requests from any person (not just the VAS submitter) for continuation of activity that would otherwise be prohibited by 15 CFR § 764.2(e).  Additionally, BIS added that a notification would only be required for the return of unlawfully exported commodities to the United States.  Changes to this section also included additional information on VSD formatting and request processes.
  • BIS removed a base monetary cap on penalties that did not fit with BIS’ mission of deterrence.
  • BIS removed the application of monetary expenditures made for compliance program enhancements from being applied to monetary penalties as a result of enforcement actions.
  • BIS has also included additional aggravating factor considerations such as violations that enabled human rights abuses, failure to disclose a significant violation, failure to disclose a violation resulting from the operation of the company’s compliance program, broadened considerations related to historical violations, “language that limited BIS’s review of prior history to five years preceding the date of the transaction giving rise to the apparent violation,” and prior criminal convictions or guilty pleas.
  • Whether a violation is considered egregious has been clarified to refer to a determination by the OEE Director only.
  • “The “Base Penalty Matrix” under paragraph (IV)(B)(2)(a) and paragraph (IV)(B)(2)(b) are edited as follows: paragraph (IV)(B)(2)(a)(i) provides that in non-egregious VSD cases, the base penalty amount is no longer capped at a maximum of $125,000, but is instead capped at one-half of the transaction value. Paragraph (IV)(B)(2)(a)(ii) provides that, in a non-egregious case not initiated by a VSD, the base penalty amount is no longer based on the applicable schedule amount or capped at $250,000, but is instead capped at the full transaction value. Finally, refences to specific adjustable penalty factor values has been removed.

https://www.bis.gov/press-release/commerce-implements-regulatory-changes-voluntary-self-disclosure-process-and-penalty

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 ‘Export Enforcement Five’ Governments Reaffirm Commitment to Robust Export Control Enforcement to Counter Evasion

September 18, 2024: The governments of Australia, Canada, New Zealand, the United Kingdom (UK), and the United States (collectively, the “Export Enforcement Five” or “E5”) marked the completion of their second annual E5 conference in Washington, D.C. by reaffirming their commitment to robust enforcement of export controls on Russia.

The renewed pledge includes the group’s coordinated efforts to prevent the diversion of sensitive technologies and materials that support Russia’s full-scale invasion of Ukraine. Specifically, the E5 committed to enhancing enforcement-related information sharing and capacity building, increasing outreach and guidance to industry to prevent diversion, and expanding joint investigative efforts to impose penalties that deter and redress violations of our coordinated export controls on Russia.

Since June 2023, BIS and its law enforcement counterparts in Australia, Canada, New Zealand, and the UK have collaborated closely to partner with industry to harden supply chains of the items – especially common high priority list items – that Russia needs to sustain its unlawful invasion, identify entities that have violated our coordinated export controls, and share investigative information to take coordinated enforcement actions.

In September 2023, the E5 issued the first-of-its-kind Quint Seal Guidance on countering Russian evasion of export controls. Furthermore, the E5 coordinated activities that resulted in detentions, seizures, and investigations that prevented violators from illicitly acquiring items to support the Russian war machine, as well as formed the foundation for an enduring framework for enforcement of export controls more broadly.

https://www.bis.gov/press-release/export-enforcement-five-governments-reaffirm-commitment-robust-export-control

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 Commerce Announced Proposed Rule to Secure Connected Vehicle Supply Chains from Foreign Adversary Threats

September 23, 2024: the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) published a Notice of Proposed Rulemaking (NPRM) that would prohibit the sale or import of connected vehicles integrating specific pieces of hardware and software, or those components sold separately, with a sufficient nexus to the People’s Republic of China (PRC) or Russia.

The proposed rule focuses on hardware and software integrated into the Vehicle Connectivity System (VCS) and software integrated into the Automated Driving System (ADS). These are the critical systems that, through specific hardware and software, allow for external connectivity and autonomous driving capabilities in connected vehicles. Malicious access to these systems could allow adversaries to access and collect our most sensitive data and remotely manipulate cars on American roads. The proposed rule would apply to all wheeled on-road vehicles such as cars, trucks, and buses, but would exclude vehicles not used on public roads like agricultural or mining vehicles.

BIS and its Office of Information and Communications Technology and Services (OICTS) have found that certain technologies originating from the PRC or Russia present an undue risk to both U.S. critical infrastructure and those who use connected vehicles. This action is a proactive measure designed to protect our national security and the safety of U.S. drivers.

https://www.bis.gov/press-release/commerce-announces-proposed-rule-secure-connected-vehicle-supply-chains-foreign and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

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G7 Announced Industry Guidance on Preventing Evasion of Export Controls and Sanctions Imposed on Russia

September 24, 2024:  The United States, Canada, France, Germany, Italy, Japan, the United Kingdom, and the European Union (the G7) published, for the first time ever, joint guidance for industry on preventing evasion of the export controls and sanctions imposed on Russia.

The joint guidance outlines the following priority areas:

  • Items that pose a heightened risk of being diverted to Russia;
  • Red flag indicators of potential export control and/or sanctions evasion; and
  • Best practices for industry to use to address these red flags and conduct enhanced due diligence.

Representatives from the G7 Sub-Working Group on Export Control Enforcement met in Brussels, Belgium to announce the release of the guidance document and reaffirm their ongoing commitment to robust, multilateral export control and sanctions enforcement. By issuing this notice, the G7 Sub-Working Group aims to assist industry in identifying evolving Russian evasion practices and complying with multilateral export controls and sanctions. The goal of the guidance is to protect common high priority list items from misappropriation, prevent reputational harm, and mitigate liability risk, all while supporting the continued success of coordinated export controls and sanctions.

Since February 24, 2022, the G7, in coordination with the other members of the Global Export Control Coalition (GECC) (countries listed in supplement no. 3 to part 746 of the Export Administration Regulations), has implemented unprecedented sanctions and export controls that restrict Russia’s access to technologies and other materials required to sustain its military operations and illegal war in Ukraine. One year ago, in September 2023, the G7’s Enforcement Coordination Mechanism established the Sub-Working Group on Export Control Enforcement to provide a forum for exchanging information and operational results, discussing trends in research and analysis, and sharing best practices for enforcement, including through coordinated guidance to industry.

https://www.bis.gov/press-release/g7-announces-industry-guidance-preventing-evasion-export-controls-and-sanctions and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

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Export Administration Regulations: Crime Controls and Expansion/Update of U.S. Persons Controls; Extension of Comment Period

September 26, 2024: 89 Fed. Reg. 78836: On July 29, 2024, the Bureau of Industry and Security (BIS) published in the Federal Register a proposed rule, “Export Administration Regulations: Crime Controls and Expansion/Update of U.S. Persons Controls” with comments originally due September 27, 2024. This notification extends the deadline for written comments to October 15, 2024. This extension is being made to allow for commenters to have additional time to review the proposed rule and to benefit from the significant amount of public outreach that BIS is conducting on the rule in preparing their comments. Extending the public comment period will not in any way undermine the rule or national security of the United States.

https://www.federalregister.gov/documents/2024/09/26/2024-22145/export-administration-regulations-crime-controls-and-expansionupdate-of-us-persons-controls

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Proposed Amendments to End-Use and End-User Based Export Controls, Including U.S. Persons Activities Controls: Military and Intelligence End Uses and End Users; Extension of Comment Period

September 26, 2024: 89 Fed. Reg. 78835: On July 29, 2024, the Bureau of Industry and Security (BIS) published in the Federal Register the proposed rule, “Proposed Amendments to End-Use and End-User Based Export Controls, Including U.S. Persons Activities Controls: Military and Intelligence End Uses and End Users” with comments originally due September 27, 2024. This notification extends the deadline for written comments to October 15, 2024. This extension is being made to allow for commenters to have additional time to review the proposed rule and to be informed by the public outreach that BIS is conducting on the rule in preparing their comments. Extending the public comment period will not in any way undermine the rule or national security of the United States.

https://www.federalregister.gov/documents/2024/09/26/2024-22146/proposed-amendments-to-end-use-and-end-user-based-export-controls-including-us-persons-activities

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Commerce Updates Validated End User (VEU) Program for Eligible Data Centers to Bolster U.S. National Security, Promote Export Control Compliance

September 30, 2024:  The Commerce Department’s Bureau of Industry and Security (BIS) announced the expansion of the Validated End User (VEU) program to include data centers.  This update will contribute to the development of a trusted ecosystem for the responsible use of advanced computing and artificial intelligence (AI). This new license exception is an element of the Biden-Harris Administration’s broader strategy to ensure the United States leads the way in responsible AI innovation and development.

This update to the VEU program was designed to protect national security by ensuring high standards for physical and cybersecurity at data centers that house advanced AI systems. It will also reduce licensing burdens on industry by allowing data centers to fulfill the stringent requirements of the VEU program up front, enabling U.S. exporters to ship designated items to pre-approved entities under a general authorization, instead of under multiple individual export licenses.

https://www.bis.gov/press-release/commerce-updates-validated-end-user-veu-program-eligible-data-centers-bolster-us

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U.S. Census Bureau

New Automated Export System (AES) Fatal Error Message

September 13, 2024: To ensure compliance with the Foreign Trade Regulations (FTR), specifically ensuring the Ultimate Consignee Country is not reported as US when the Ultimate Country of Destination is neither US or Puerto Rico, the Census Bureau is deploying a new Fatal Error Response Message in the AES. The response message will be active in the Certification testing environment on September 16, 2024 and will go into the Production environment on September 30, 2024.

Response Code: 25B

Narrative Text: ULT CONS COUNTRY CANNOT BE US

Severity: FATAL

Reason: The Ultimate Consignee Country cannot be reported as US when the Ultimate Country of Destination is neither US or PR.

Resolution: The Ultimate Consignee Country should be reported as the location where the person, party or designee is located abroad. The AES only allows US as the Ultimate Consignee Country when the Ultimate Country of Destination is the US or PR, which would only apply for shipments between the US and PR. Verify the Ultimate Consignee Country, correct and retransmit.

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 Tips on How to Resolve AES Response Messages

 September 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: 166

Narrative:     Transportation Reference Number Missing

Severity:       Fatal

Reason:        The Mode of Transportation is reported as Vessel and the Transportation Reference Number is missing.

Resolution:  A number referencing the transportation booking number must be reported on a vessel shipment.

Verify the Transportation Reference Number, correct the shipment and resubmit.
Response Code:  8QR

Narrative:     Quantity Relationship Out of Range

Severity:       Verify

Reason:        For the reported Schedule B/HTS Number, both Quantity (1) and Quantity (2) are required and reported.  However, the relationship between Quantity (1) and Quantity (2) is outside of the expected range.

Resolution:  For the particular Schedule B/HTS Number reported, there is a relationship between the first quantity and second quantity 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 Quantity 1, Quantity 2 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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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

 

September 2, 2024:  The Justice Department announced the seizure of a Dassault Falcon 900EX aircraft owned and operated for the benefit of Nicolás Maduro Moros and persons affiliated with him in Venezuela. The aircraft was seized in the Dominican Republic and transferred to the Southern District of Florida at the request of the United States based on violations of U.S. export control and sanctions laws. The Dassault Falcon 900EX aircraft was illegally exported from the United Sates and used for the benefit of Maduro and his representatives.

https://www.justice.gov/opa/pr/united-states-seizes-aircraft-used-nicolas-maduro-moros-violation-us-export-control-and

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September 16, 2024: The Justice Department announced criminal charges in five cases from four U.S. Attorney’s offices in connection with the multi-agency Disruptive Technology Strike Force (Strike Force).

The Strike Force is co-led by the Departments of Justice and Commerce to counter efforts by hostile nation states to illicitly acquire sensitive U.S. technology to advance their authoritarian regimes and facilitate human rights abuses. Launched in February 2023, the Strike Force’s work has led to the unsealing of charges against 34 defendants in 24 cases involving alleged export control violations, smuggling, theft of trade secrets, and other charges by actors connected to Russia, China, and Iran.

The cases announced took place over the course of multiple weeks, culminating in the arrest of a Russian national allegedly seeking to illegally export electronics for use in Unmanned Aerial Vehicles (UAVs) to Russia. The other cases also cover spearfishing of U.S-based scientists by an employee of a state-owned Chinese defense company and the smuggling of laser welding machines used in nuclear munition production to Russia.

https://www.justice.gov/opa/pr/justice-department-announces-five-cases-tied-disruptive-technology-strike-force

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 September 30, 2024:  The Department of Commerce’s Bureau of Industry and Security (BIS) imposed a civil penalty of $151,875 against Quantum Corporation (Quantum), a data storage, management, and protection company based in San Jose, California, to resolve 45 alleged violations of the antiboycott provisions of the Export Administration Regulations (EAR). Quantum voluntarily self-disclosed the conduct to BIS, cooperated with the investigation by BIS’s Office of Antiboycott Compliance (OAC), and implemented remedial measures after discovering the conduct at issue, all of which resulted in a significant reduction in penalty.

https://www.bis.gov/press-release/bis-imposes-penalty-quantum-corporation-resolve-alleged-violations-antiboycott and https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

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September 30, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) announced an administrative settlement of $439,992 (partially suspended) against First Call International Inc. (First Call), located in Fort Worth, Texas, for the submission of a backdated document to make it appear that a transaction complied with the Export Administration Regulations (EAR) and for exporting military parts without BIS authorization.

https://www.bis.gov/press-release/bis-imposes-administrative-penalties-against-first-call-international-inc-submission

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Sanctions

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

 September 4, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 10 individuals and two entities as part of a coordinated U.S. government response to Moscow’s malign influence efforts targeting the 2024 U.S. presidential election. Russian state-sponsored actors have long used a variety of tools, such as generative artificial intelligence (AI) deep fakes and disinformation, in an attempt to undermine confidence in the United States’ election processes and institutions. Beginning in early 2024, executives at RT—Russia’s state-funded news media outlet—began an even more nefarious effort to covertly recruit unwitting American influencers in support of their malign influence campaign. RT used a front company to disguise its own involvement or the involvement of the Russian government in content meant to influence U.S. audiences.

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 25E – “Authorizing Transactions Related to Telecommunications and Certain Internet-Based Communications.”

Russia Related General License 25E:

(a) All transactions ordinarily incident and necessary to the receipt or transmission of telecommunications involving the Russian Federation that are prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized.

(b) The exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, wherever located, to the Russian Federation of services incident to the exchange of communications over the internet, such as instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, blogging, social media platforms, collaboration platforms, video conferencing, e-gaming, e-learning platforms, automated translation, web maps, user authentication services, web hosting, and domain name registration services, that is prohibited by the RuHSR, is authorized.

(c) The exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, to the Russian Federation of software, hardware, or technology incident to the exchange of communications over the internet is authorized, provided that:

  • If the software, hardware, or technology is subject to the Export Administration Regulations, 15 CFR parts 730 through 774 (EAR), the exportation, reexportation, sale, or supply to the Russian Federation of such software, hardware, or technology is licensed or otherwise authorized by the Department of Commerce pursuant to the EAR; and
  • (ii) If the software, hardware, or technology is not subject to the EAR, the exportation, reexportation, sale, or supply to the Russian Federation of such software, hardware, or technology would be eligible for a license exception or otherwise authorized by the Department of Commerce if it were subject to the EAR.

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

  • Afanasyeva, Elena Mikhaylovna of Russia;
  • Anisimov, Anton Sergeevich of Russia;
  • Brodskaia, Elizaveta Yuryevna of Russia;
  • Garaschenko, Aleksey Alekseyevich of Russia;
  • Kalashnikov, Konstantin Sergeyevich of Russia;
  • Kiyashako, Andrey Vladimirovich of Russia;
  • Nezhentsev, Aleksandr Vitalyevich of Russia;
  • Simonyan, Margarita Simonovna of Russia;
  • Tabak, Valdimir Grigoryevich of Russia; and
  • Yermoshkina, Anastasiya Igorevna of Russia.

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

  • Autonomous Non-Profit Organization Dialog of Russia; and
  • Autonomous Non-Profit Organization Dialog Regions of Russia.

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September 4, 2024: OFAC published an alert, “Russian Attempts to Evade Sanctions Using New Overseas Branches and Subsidiaries,” to warn foreign jurisdictions and financial institutions about Russia’s attempts to evade sanctions by opening new overseas branches and subsidiaries of Russian financial institutions.

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September 5, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC)  issued Russia-related General License 108, “Authorizing Limited Safety and Environmental Transactions Involving Certain Blocked Persons or Vessels.”

General License 108:

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 standard time, November 6, 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 (the “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.

(b) The authorization in paragraph (a) of this general license 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) Gotik Shipping Co; or

(2) Plio Energy Cargo Shipping OPC Private Limited.

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September 10, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned nine Mexican nationals, and 26 Mexico-based entities linked to a fuel theft network that generates tens of millions of dollars benefiting the Cartel Jalisco Nueva Generacion (CJNG), a violent Mexico-based drug trafficking organization responsible for a significant proportion of fentanyl and other deadly drugs trafficked into the United States. Mexico-based drug trafficking cartels such as CJNG have turned to fuel theft in recent years, resulting in billions of dollars in lost revenue to the Mexican government. This action was coordinated closely with the Drug Enforcement Administration and the Government of Mexico, including La Unidad de Inteligencia Financiera (UIF), Mexico’s Financial Intelligence Unit.

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

  • Alvarado, Castillo of Mexico;
  • Cazarin Molina, Cesar of Mexico;
  • Cazarin Molina, Ivan of Mexico;
  • Cazarin Ramos, Jahir of Mexico;
  • Estrada Medina, Santos Aldair of Mexico;
  • Herrera Medina, Brandon Ernesto of Mexico;
  • Medina Dias, Domingo of Mexico;
  • Rivera Garcia, Patricia of Mexico; and
  • Rodriguez Hernandez, Jose Saul of Mexico.

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

  • 3D Modern Printing Press of Mexico;
  • Aceites y Lubricantes Maye, S.A. DE C.V. of Mexico;
  • Aditivos Y Suministros Etanofuel, S.A. DE C.V., of Mexico;
  • Ahorrocombustibles De Veracruz, S.A. DE C.V., of Mexico;
  • Biocombustibles El Jicaro, S.A. DE C.V., of Mexico;
  • Carburantes Dos Oceanos, S.A. DE C.V., of Mexico;
  • Combustibles Evolutivos y Alternativos Dos Oceanos, S.A. DE C.V., of Mexico;
  • Combustibles y Lubricantes Maye, S.A. DE C.V., of Mexico;
  • Comercializadora Baguette KLIC, S.A. DE C.V., of Mexico;
  • Comercializadora Coffee KLIC, S.A. DE C.V., of Mexico;
  • Constructora JJESA S.A. DE C.V., of Mexico;
  • Dos Oceanos Combustibles y Carburantes, S.A. DE C.V., of Mexico;
  • Dos Oceanos Paso Del Toro, S.A. DE C.V., of Mexico;
  • Econocombustibles de Veracruz, S.A. De C.V. of Mexico;
  • Etanoful, S.A. De C.V. of Mexico;
  • Etanoplus, S.A. DE C.V., of Mexico;
  • Magnocombustibles De Veracruz, S.A. DE C.V. of Mexico;
  • Maquinas Edja, S.A. DE C.V., of Mexico;
  • Maxi-Gasoil Servicios, S.A. DE C.V., of Mexico;
  • Mayegas, S.A. DE C.V., of Mexico;
  • Multiservicios En Combustible Maye De Veracruz, S.A. DE C.V. of Mexico;
  • Rapicombustibles De Veracrus, S.A. De C.V., of Mexico;
  • Suministros Combustibles Oceanos, S.A. DE C.V. of Mexico;
  • Super Tiendas KLIC, S.A. DE C.V. of Mexico;
  • Traver Permisionarios, S.A. DE C.V. of Mexico; and
  • Veracruzana De Servicios Hoteleros y Gastronomicos Los Angeles, S.A. DE C.V. of Mexico.

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September 11, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned three individuals, five companies, and two vessels that are involved in smuggling oil and liquified petroleum gas (LPG) to generate revenue for Hizballah. The network, comprised of Lebanese businessmen and companies and overseen by a senior leader of Hizballah’s finance team, has facilitated dozens of LPG shipments to the Government of Syria and channeled the profits to Hizballah. Illicit oil and LPG smuggling operations generate hundreds of millions of dollars for Hizballah and support the group’s terrorist activities.

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

  • Al-Sayid, Muhammad Ibrahim Habib of Lebanon;
  • Obeid, Boutros Georges of Lebanon; and
  • Zgheib, Ali Nayef of Lebanon.

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

  • European Lebanese International Trade S.A.R.L. ELIT of Lebanon;
  • Heavy Industrial Fuels SAL HIF of Lebanon;
  • Heavy Oil Distribution Company Hodico S.A.L of Lebanon;
  • Heavy Oil Distribution Company Hodico SAL Offshore of Lebanon; and
  • H.G. Holding Sal of Lebanon.

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

  • Alpha Gas (51M771) Tanzania flag; MMSI 677067100 (vessel) [SDGT]; and
  • Marina (51M643) Tanzania flag; MMSI 677054300 (vessel) [SDGT].

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September 11, 2024: the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued an update to the March 2019 OFAC Advisory to the Maritime Petroleum Shipping Community to highlight risks associated with shipments to Syria. Amendments to this advisory include updates to certain deceptive shipping practices and risk mitigation measures, along with an updated annex of vessels currently identified as blocked property on OFAC’s SDN List, that have been involved in fuel shipments to Syria.

Additionally, OFAC put on public inspection Interim Final Rule to Extend Recordkeeping Requirements from Five to 10 Years, consistent with the extension of the statute of limitations for violations of certain sanctions administered by OFAC.

OFAC also put on public inspection a Comment Request for Reporting, Procedures and Penalties Regulations and Other Information Collections Maintained by OFAC for comments concerning OFAC’s information requirements.

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September 12, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Cambodian businessman Ly Yong Phat (Ly), his conglomerate L.Y.P. Group Co., LTD (L.Y.P. Group), and O‑Smach Resort for their role in serious human rights abuse related to the treatment of trafficked workers subjected to forced labor in online scam centers. OFACalso designated Cambodia-based Garden City Hotel, Koh Kong Resort, and Phnom Penh Hotel for being owned or controlled by Ly.

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

  • Ly, Yong Phat of Cambodia.

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

  • Garden City Hotel of Cambodia;
  • Koh Kong Resort of Cambodia
  • Y.P Group Co., LTD of Cambodia;
  • O-SMACH Resort of Cambodia; and
  • Phnom Penh Hotel of Cambodia.

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued Global Magnitsky General License 8 – “Authorizing Transactions Involving Certain Entities Owned by Ly Yong Phat or L.Y.P. Group Co., LTD.” Additionally, OFAC has issued a related, new Frequently Asked Question (FAQ 1191).

General License 8:

All transactions prohibited by the Global Magnitsky Sanctions Regulations, 31 CFR part 583 (GMSR), involving any entity that is blocked solely due to a property interest of Ly Yong Phat (Ly) or L.Y.P. Group Co., LTD (L.Y.P. Group) or any entity in which Ly or L.Y.P. Group owns, directly or indirectly, a 50 percent or greater interest, are authorized, provided that such entity is not identified on the Office of Foreign Assets Control’s List of Specially Designated Nationals and Blocked Persons.

FAQ 1191:

Q: On September 12, 2024, OFAC designated Ly Yong Phat (Ly), L.Y.P. Group Co., LTD (L.Y.P. Group), and the following entities owned by L.Y.P. Group under the Global Magnitsky sanctions authority: O-Smach Resort, Garden City Hotel, Koh Kong Resort, and Phnom Penh Hotel. Can I continue to engage in transactions or other dealings with other entities owned by Ly or L.Y.P. Group that are not listed on OFAC’s Specially Designation Nationals and Blocked Person List (SDN List) without facing sanctions risk?

A: Yes. Although transactions or other dealings involving Ly and L.Y.P. Group are prohibited as a result of OFAC’s designation, OFAC concurrently issued Global Magnitsky General License (GL) 8 authorizing U.S. persons to engage in all transactions with any entity owned 50% or more by Ly or the L.Y.P. Group that is not listed on SDN List.

Non-U.S. persons may engage in the transactions authorized by GL 8 without exposure to sanctions.

GL 8 does not authorize transactions with any entity listed on the SDN List, including the following entities that were designated on September 12, 2024: O-Smach Resort, Garden City Hotel, Koh Kong Resort, and Phnom Penh Hotel. OFAC will continue to closely monitor Ly’s and L.Y.P. Group’s activities and may designate or identify additional entities, as appropriate.

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September 12, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 16 Maduro-aligned officials who obstructed a competitive and inclusive presidential election process in Venezuela and violated the civil and human rights of the people. The individuals sanctioned pursuant to Executive Order (E.O.) 13692, as amended, include leaders of the Maduro-aligned National Electoral Council (CNE) and the Supreme Tribunal of Justice (TSJ) who impeded a transparent electoral process and the release of accurate election results, as well as the military, intelligence, and government officials responsible for intensifying repression through intimidation, indiscriminate detentions, and censorship. The officials were appointed by Nicolas Maduro, whom OFAC sanctioned in 2017.

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

  • Briceno Cisneros, Edward Miguel of Venezuela;
  • Brito Hernandez, Asdrubal Jose of Venezuela;
  • Bustamante Puerta, Dinorah Yoselin of Venezuela;
  • Duenez Reyes, Luis Ernesto of Venezuela;
  • Estrada Paredes, Elio Ramon of Venezuela;
  • Figueroa Arizaleta, Inocencio Antonio of Venezuela;
  • Gil Pacheco, Rosalba of Venezuela;
  • Gil Rodriguez, Malaquias of Venezuela;
  • Hernandez Larez, Domingo Antonio of Venezuela;
  • Hernandez Larez, Jonah Alexander of Venezuela;
  • Hildalgo Pandares, Juan Carlos of Venezuela;
  • Infante Aparicio, Pedro Jose of Venezuela;
  • Marquez Cordero, Fanny Beatriz of Venezuela;
  • Maneses Rodrigues, Antonio Jose of Venezuela;
  • Munos Palacios, Miguel Antonio of Venezuela; and
  • Rodriguez Rodriguez, Caryslia Beatriz of Venezuela.

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

  • Beijin Research Institute of Automation for Machinery Industry Co. Ltd. of China.

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https://ofac.treasury.gov/recent-actions/20240912

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September 13, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 109, “Authorizing the Wind Down of Transactions Involving Certain Entities Blocked on September 13, 2024” and Russia-related General License 25F, “Authorizing Transactions Related to Telecommunications and Certain Internet-Based Communications.”

OFAC also published an updated, Russia-related Frequently Asked Question (FAQ 1040).

General License 109:

(a)  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 standard time, November 13, 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) Federal State Unitary Enterprise International Information Agency Rossiya Segodnya;

(2) Autonomous Non Profit Organization TV Novosti; or

(3) 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.

 General License 25F:

(a) All transactions ordinarily incident and necessary to the receipt or transmission of telecommunications involving the Russian Federation that are prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized.

(b) The exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, wherever located, to the Russian Federation of services incident to the exchange of communications over the internet, such as instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, blogging, social media platforms, collaboration platforms, video conferencing, e-gaming, e-learning platforms, automated translation, web maps, user authentication services, web hosting, and domain name registration services, that is prohibited by the RuHSR, is authorized.

(c) The exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, to the Russian Federation of software, hardware, or technology incident to the exchange of communications over the internet is authorized, provided that:

(i) If the software, hardware, or technology is subject to the Export Administration Regulations, 15 CFR parts 730 through 774 (EAR), the exportation, reexportation, sale, or supply to the Russian Federation of such software, hardware, or technology is licensed or otherwise authorized by the Department of Commerce pursuant to the EAR; and

(ii) If the software, hardware, or technology is not subject to the EAR, the exportation, reexportation, sale, or supply to the Russian Federation of such software, hardware, or technology would be eligible for a license exception or otherwise authorized by the Department of Commerce if it were subject to the EAR. (

 

FAQ 1040:

Q: Are transactions related to telecommunications and certain internet-based communications that involve persons designated pursuant to Executive Order 14024 authorized by Russia-related General License (GL) 25F?

A: GL 25F authorizes certain transactions ordinarily incident and necessary to the receipt or transmission of telecommunications involving the Russian Federation that are prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR). In addition, GL 25F authorizes certain transactions from the United States or by U.S. persons, wherever located, to the Russian Federation that are incident to the exchange of communications over the internet and that are prohibited by the RuHSR. With respect to software, hardware, and technology, GL 25F authorizes the exportation or reexportation, sale, or supply from the United States or by U.S. persons, wherever located, to the Russian Federation of software, hardware, or technology incident to the exchange of communications over the internet that is authorized for export to Russia by the Department of Commerce if it is subject to the Export Administration Regulations, 15 CFR parts 730-774 (EAR), or that would be eligible for a license exception or otherwise authorized for export to Russia by the Department of Commerce if it were subject to the EAR. However, GL 25F explicitly excludes from the authorization any transactions that are prohibited by the RuHSR involving Joint Stock Company Channel One Russia, Television Station Russia-1, Joint Stock Company NTV Broadcasting Company, Limited Liability Company Algoritm, New Eastern Outlook, Oriental Review, Garantex Europe OU, Autonomous Non-Profit Organization Dialog, Autonomous Non-Profit Organization Dialog Regions, Federal State Unitary Enterprise International Information Agency Rossiya Segodnya, or Autonomous Non Profit Organization TV Novosti, which are designated pursuant to Executive Order 14024.

For further information on relevant authorizations, exemptions, and public guidance, please review OFAC’s Fact Sheet, “Preserving Agricultural Trade, Access to Communication, and Other Support to Those Impacted by Russia’s War Against Ukraine.”

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September 16, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned five individuals and one entity associated with the Intellexa Consortium for their role in developing, operating, and distributing commercial spyware technology that presents a significant threat to the national security of the United States. These designations complement concerted U.S. government actions against commercial spyware vendors, including previous sanctions against individuals and entities associated with the Intellexa Consortium; the Department of Commerce’s addition of commercial spyware vendors to the Entity List; and the Department of State’s visa ban policy targeting those who misuse or profit from the misuse of commercial spyware, subsequently exercised on thirteen individuals.

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

  • Artemiou, Artemis of Cyprus;
  • Bitzios, Felix of Greece;
  • Gambazzi, Andrea Nicola Costantino Hermes of Switzerland;
  • Harpaz, Merom of Romania; and
  • Karoli, Panagiota of Cyprus.

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

  • Aliada Group, Inc. of British Virgin Islands.

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September 16, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned individuals who have undermined fundamental freedoms, including freedom of expression, in Georgia.  Specifically, the Department of the Treasury sanctioned two Georgian government officials associated with brutal crackdowns on peaceful protestors and political opponents, and two private Georgian citizens that are responsible for or complicit in or have directly or indirectly engaged in violently suppressing the exercise of the freedom of peaceful assembly of Georgians engaged in the democratic process and peaceful expression. All four individuals are being designated pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse around the world.

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

  • Lagazuri, Mileri of Georgia;
  • Makharadze, Zurab of Georgia; and
  • Morgoshia, Konstantine of Georgia.

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September 18, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 12 individuals in connection with the Iranian regime’s ongoing, violent repression of the Iranian people, both within Iran’s borders and abroad. These designations target members of the Islamic Revolutionary Guard Corps (IRGC), officials of Iran’s Prisons Organization, and those responsible for lethal operations overseas. This action is in coordination with Canada and Australia, which have also unveiled new sanctions against those connected to human rights abuses in Iran.

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

  • Abdi, Ali of Iran;
  • Azadeh, Ahmad Reza of Iran;
  • Baghlani, Mahmud of Iran;
  • Bazvand, Mustafa of Iran;
  • Beheshti Rad, Saeed of Iran;
  • Farsani, Alireza Babaei of Iran;
  • Ghaffarhaddadi, Javad of Iran;
  • Khorramdel, Hamid of Iran;
  • Panjaki, Yahya Hosseini of Iran;
  • Roshan, Gholamerza of Iran;
  • Shahkoui, Ali Malek of Iran; and
  • Zareikajosangi, Hamid of Iran.

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September 24, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned five Colombian nationals and two Mexico-based businesses pursuant to Executive Order (E.O.) 14059, “Imposing Sanctions on Foreign Persons Involved in the Global Illicit Drug Trade.”  The Colombian individuals sanctioned are leaders within Colombia’s Clan del Golfo (CDG)—also known as Los Urabeños—which is one of the country’s largest drug trafficking organizations and a key contributor to human smuggling through the Darién Gap. The companies sanctioned are in Mexico and owned by designated Sinaloa Cartel fentanyl traffickers. One of the most notorious and pervasive drug trafficking organizations in the world, the Sinaloa Cartel 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:

  • Alcaraz Morales, Wilder de Jesus of Colombia;
  • Celis Durango, Alexander of Colombia;
  • Cordoba Quinto, Jose Emilson of Colombia;
  • Demoya Hernandez, Jose Miguel of Colombia; and
  • Sanchez Sanchez, Jose Gonzalo of Colombia.

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

  • Farmacia y Mini Super Trinidad of Mexico; and
  • Nieves y Paletas Evi of Mexico.

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing three new, Russia-related Frequently Asked Questions (FAQs): FAQ 1193, FAQ 1194, and FAQ 1195.

 

FAQ 1193:

Q: I am a U.S. company with a subsidiary organized and located in Russia. Can I provide the employees or contractors of my Russian subsidiary who are located in Russia with the services prohibited by the Information Technology (IT) and Software Services Determination under the exclusion “(1) any service to an entity located in the Russian Federation that is owned or controlled, directly or indirectly, by a U.S. person?

A: Yes, as long as the services provided are within the employees’ or contractors’ scope of employment for or on behalf of the U.S. subsidiary company located in Russia.

 

FAQ 1194:

 Q: I am a U.S. company with a subsidiary located in a third country (other than Russia). My third-country subsidiary has an employee or contractor located in Russia. Can I provide that employee or contractor located in Russia with the services prohibited by the Information Technology (IT) and Software Services Determination under the exclusion “(1) any service to an entity located in the Russian Federation that is owned or controlled, directly or indirectly, by a U.S. person”?

A: No. The scope of the exclusion applies only to U.S.-owned or controlled entities located in Russia and their employees and contractors acting within the scope of their employment. See FAQ 1193. A U.S. person may not provide a service prohibited by the IT and Software Services Determination to a person located in Russia who is working as an employee or contractor on behalf of a third-country company. OFAC may issue specific licenses on a case-by-case basis.

 

FAQ 1195:

 Q:  A U.S. company located in the United States has an employee or contractor located in Russia working directly for the U.S. company. Can the U.S. company provide that employee or contractor located in Russia with the services prohibited by the Information Technology (IT) and Software Services Determination under the exclusion “(1) any service to an entity located in the Russian Federation that is owned or controlled, directly or indirectly, by a U.S. person”?

A: No. The scope of the exclusion applies only to U.S.-owned or controlled entities located in Russia, and their employees and contractors acting within the scope of their employment. See FAQ 1193. A U.S. person may not provide a service prohibited by the IT and Software Services Determination to a person located in Russia who is working directly for a company located in the United States. OFAC may issue specific licenses on a case-by-case basis. To apply for a specific license.

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September 25, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a former member of Haiti’s parliament, Prophane Victor, for his role in forming, supporting, and arming gangs and their members that have committed serious human rights abuse in Haiti. OFAC also designated Luckson Elan, the current leader of the Gran Grif gang, for his involvement in serious human rights abuse related to gang activity in Haiti’s Artibonite department.

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

  • Elan, Luckson of Haiti; and
  • Victor, Prophane of Haiti.

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September 25, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned more than a dozen entities and vessels for their involvement in the shipment of Iranian crude oil and liquid petroleum gas to Syria and East Asia on behalf of the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and Hizballah. Among the vessels sanctioned are four ships associated with the fleet of illicit shipping Syrian magnate Abdul Jalil Mallah (Abdul Jalil) and his brother Luay al-Mallah. Since Abdul Jalil’s June 10, 2021 designation for his support to the network of IRGC-QF-backed Houthi financial official Sa’id al-Jamal, Luay al-Mallah has continued to use their shipping empire to support Iran’s malign activities and those of its proxies. Luay al-Mallah is also being designated in this action.

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

  • Al-Mallah, Luay of Syria.

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

  • Dragon Road Ltd of the Marshall Islands;
  • Oryx Denizcilik Limited Sirketi of Turkey;
  • Star Ocean Shipmanage Ltd of the Marshall Islands; and
  • Tai Feng Hai Shipping Limited of China.

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

  • Confidence P (3FGV5) Crude/Oil Products Tanker Panama flag; MMSI 357747000 (vessel);
  • Eternal 8 (3E3694) Crude Oil Tanker Panama flag; MMSI 352001640 (vessel);
  • Eternal Peace (3E3831) Crude Oil Tanker Panama flag; MMSI 352002158 (vessel);
  • Eternal Success (3E4722) Crude Oil Tanker Panama flag; MMSI 352002970 (vessel);
  • Feng Tai (3E4959) Crude Oil Tanker Panama flag; MMSI 352002635 (vessel);
  • Nova  (S9U17) Crude/Oil Products Tanker Sao Tome and Principe flag; MMSI 668116245 (vessel);
  • Rival 3FZA2) Chemical/Products Tanker Panama flag; MMSI 3708590000 (vessel);
  • Serene I (3EFX8) Crude Oil Tanker Panama flag; MMSI 374483000 (vessel); and
  • Tiyara (EPUN7) Crude Oil Tanker; MMSI 422471300 (vessel).

https://home.treasury.gov/news/press-releases/jy2613

https://ofac.treasury.gov/recent-actions/20240925

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September 27, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated seven individuals as part of a coordinated U.S. government response to Iran’s operations that sought to influence or interfere in the 2024 and 2020 presidential elections. Iranian state-sponsored actors undertook a variety of malicious cyber activities, such as hack-and-leak operations and spear-phishing, in an attempt to undermine confidence in the United States’ election processes and institutions and to interfere with political campaigns. The designations undertaken pursuant to Executive Order (E.O.) 13848, complement law enforcement actions taken by the Department of Justice against a variety of Iranian election interference actors.

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

  • Abdolarahimi, Mohammad Hosein of Iran;
  • Askarizadeh, Rahmatollah of Iran;
  • Jalili, Masoud of Iran;
  • Mahdavia, Ali of Iran;
  • Rahimi Hajjiabadi, Sayyed Mehdi of Iran;
  • Sadeghi, Fatemah of Iran; and
  • Yazdi, Elaheh of Iran.

https://ofac.treasury.gov/recent-actions/20240927 and

https://home.treasury.gov/news/press-releases/jy2621

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September 30, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 13K, “Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024.”

General License 13K:

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 8, 2025.

https://ofac.treasury.gov/media/933451/download?inline and

https://ofac.treasury.gov/recent-actions/20240930

SEPTEMBER 2024 EXPORT CONTROL REGULATIONS UPDATES Read More »

AUGUST 2024 EXPORT CONTROL REGULATIONS UPDATES

This newsletter is a listing of the latest changes in export control regulations through August 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  States Government 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.

  

REGULATORY UPDATES

President

 

President Biden Continued the National Emergency With Respect to the Advancement by Countries of Concern in Sensitive Technologies and Products Critical for the Military, Intelligence, Surveillance, or Cyber-Enabled Capabilities of Such Countries

 

August 6, 2024:  On August 9, 2023, by Executive Order 14105, President Biden 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 of the United States constituted by the advancement by countries of concern in sensitive technologies and products critical for the military, intelligence, surveillance, or cyber­enabled capabilities of such countries.  As described in Executive Order 14105, this threat to the national security of the United States has its source in whole or substantial part outside the United States, and certain United States investments risk exacerbating this threat.

 

Certain ongoing activities, such as the comprehensive, long-term strategies of countries of concern that direct, facilitate, or otherwise support advancements in sensitive technologies and products that are critical to such countries’ military, intelligence, surveillance, or cyber-enabled capabilities, significantly enhance such countries’ ability to conduct activities that threaten the national security of the United States.  As part of this ongoing strategy of advancing the development of these sensitive technologies and products, countries of concern are exploiting or have the ability to exploit certain United States outbound investments, including certain intangible benefits that often accompany United States investments and that help companies succeed.  Such investments risk exacerbating this threat to United States national security.

 

For this reason, the national emergency declared in Executive Order 14105 of August 9, 2023, must continue in effect beyond August 9, 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 14105 with respect to the threat posed by the advancement by countries of concern in sensitive technologies and products critical for the military, intelligence, surveillance, or cyber­enabled capabilities of such countries.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/08/06/notice-on-the-continuation-of-the-national-emergency-with-respect-to-the-advancement-by-countries-of-concern-in-sensitive-technologies-and-products-critical-for-the-military-intelligence-surveillanc/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/

 

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

 

DDTC Website Updates

 

August 1, 2024: The Directorate of Defense Trade Controls (DDTC) launched the next phase of its redesigned website on Wednesday, July 31st. This second phase of updates includes key Registration and Licensing pages and features a number of significant enhancements including improved navigation, searchability, and accessibility. Check out the new look!

 

https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_public_portal_news_and_events&timeframe=all&t=Notice

 

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Final Rule: Amendments to the Definition of Activities That are not Exports, Reexports, Retransfers, or Temporary Imports – the “Sovereign Deployments Rule”

 

August 14, 2024: 89 Fed. Reg. 66310: On August 15, 2024, the Department of State published a final rule in the Federal Register  amending the International Traffic in Arms Regulations (ITAR) section 120.54 to expand the definition of “activities that are not exports, reexports, retransfers, or temporary imports,” subject to certain conditions, to include:  1) the taking of a defense article subject to the reexport or retransfer requirements of the ITAR by the armed forces of a foreign government or United Nations military personnel on a deployment or training exercise outside a previously approved country; and 2) the reexport of retransfer of a foreign defense article previously imported into the United States that has since been exported from the United States pursuant to an ITAR license or other approval, that was not the subject of any enhancement or modification while in the United States.

 

https://www.federalregister.gov/documents/2024/08/15/2024-18249/international-traffic-in-arms-regulations-amendments-to-the-definition-of-activities-that-are-not and

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

 

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International Traffic in Arms Regulations: § 126.7 Exemption for Defense Trade and Cooperation Among Australia, the United Kingdom, and the United States

 

August 20, 2024: 89 Fed. Reg. 67270: The Department of State published an interim final rule in the Federal Register that took effect on September 1, 2024.  This rule amends the International Traffic in Arms Regulations (ITAR) to create an exemption for certain exports, reexports, retransfers, and temporary imports of defense articles and defense services, and certain brokering activities between or among authorized users within Australia, the United Kingdom, and the United States.

 

The exemption is available for all defense articles and defense services, except for those contained on the excluded technology list in Supplement No. 2 to part 126 of the ITAR.  The rule also introduces a provision to allow for certain transfers of classified defense articles to certain dual nationals, codifies an expedited license review process for Australia, the United Kingdom, and Canada, and makes changes to other ITAR sections to support the exemption.

 

The basic elements of the exemption are:

 

1. The U.S. exporter must be an authorized user i.e. registered with the Department of State.

To prove eligibility in transactions where you will be receiving Australian or UK technical data or hardware, you will need to show your DOS registration to the foreign authorized party or use the DOS OPT IN process to allow for the DOS to validate your company as an authorized user.

2. The foreign party in Australia or the U.K. must be an authorized user, posted on the DDTC website in the DECCS portal.

3. All the foreign parties in the transaction are in Australia or the U.K. are authorized users posted in the DDTC website DECCS portal.

4. For Hardware transfers, all the freight forwarders will need to be authorized users. The U.S. freight forwarders will need to be registered with DDTC, the foreign freight forwarders will need to follow the same process as the authorized users/ contractors.

5. The defense article, technical data or defense service cannot be excluded. The excluded list is Found at Supplement No #2 to Part 126.

6. The use of the defense article, technical data, or defense services must be wholly with Australia or the U.K.

 

As of September 3, 2024 75 authorized users were listed in the DECCS portal.

 

See our FAQ section for 10 FAQs on the 126.7 exemption.

 

Starting August 20, 2024, interested parties may submit comments to the Department over the following 90 days by using one of the methods described in the rule.

 

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=720a340b97889a5067b1791ad053af20 and

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

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Department of State and Department of Treasury Designations in Support of Ukraine

 

August 23, 2024: Building on the sanctions already imposed on Russia in response to its continued war of aggression against Ukraine, the U.S. Department of the Treasury and the Department of State targeted nearly 400 individuals and entities both in Russia and outside its borders—including in Asia, Europe, and the Middle East—whose products and services enable Russia to sustain its war effort and evade sanctions. The United States government will continue to support Ukraine as it defends its independence and hold Russia accountable for its aggression.

 

Please see link below for full list of sanctioned individuals.

 

https://home.treasury.gov/news/press-releases/jy2546 and

https://ofac.treasury.gov/recent-actions/20240823

 

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Violations of the Arms Export Control Act and the International Traffic in Arms Regulations by RTX Corporation

 

August 29, 2024: RTX Corporation (“RTX”) entered into a three year Consent Agreement to settle allegations that it violated the International Traffic in Arms Regulations (ITAR) in connection with 750 export violations involving unauthorized exports of defense articles  resulting from the failure to establish proper jurisdiction and classification; unauthorized exports of defense articles, including classified defense articles; unauthorized exports of defense articles (laptops) by employees via hand-carry to proscribed destinations listed in 22 C.F.R. 126.1; and  violations of terms, conditions, and provisos of DDTC authorizations by its subsidiaries, Collins Aerospace, Pratt & Whitney and Raytheon. All of the violations were Voluntarily Disclosed to the Department of State by RTX over a number of years pursuant to 113 Voluntary Disclosures, most related to the acquisition of Rockwell Collins, by UTC, a company Raytheon merged with in 2020. RTX agreed to pay a fine of two hundred million dollars ($200,00,000) of which one hundred million dollars ($100,00,000) will be used by RTX for remedial compliance measures.

 

550 of the 750 violations were a result of misclassification of defense articles as EAR regulated. The misclassification resulted in exports to China, Canada, France, Germany, Greece, Israel, Japan, Mexico Iran, Lebanon, Russia, Australia, Belgium, The Netherlands, The Republic of Korea, Saudi Arabia, Singapore, Sweden, Turkey, United Arab Emirates, and the U.K. Several of the exports were deemed to have caused harm to the national security of the United States, as the exports involved the release of sensitive technical data to sanctioned destinations related to major US programs.

 

Violations:

 

RTX disclosed the following violations to the Department:

 

Unauthorized Exports, Reexports, Retransfers, and Temporary Imports Resulting from the Failure to Establish Proper Jurisdiction and Classification

 

Since 2020, RTX has submitted 27 voluntary disclosures to the Department demonstrating systemic failures to establish proper jurisdiction and classification of defense articles within certain operating divisions.

 

Unauthorized Exports to the PRC Resulting from Misclassification

 

RTX disclosed that it exported without authorization technical data to the PRC on numerous occasions between 2014 and 2023 predominantly because of a historical misinterpretation by Rockwell Collins of the ITAR’s “specially designed” definition and release criteria in 22 C.F.R. 120.41.

In two disclosures that RTX initially submitted to the Department in 2021 and 2022, it disclosed unauthorized exports that occurred at RTX’s facility in Cedar Rapids, Iowa, in the form of unauthorized releases of USML Category VIII(i) technical data related to the Boeing E-3 Sentry Airborne Early Warning and Control Aircraft and the Embraer KC-390 Millenium Medium Weight Transport Plane to Chinese foreign-person employees (FPE).

In a subsequent disclosure submitted to the Department in 2023, RTX disclosed that in January 2023 it exported without authorization USML Category VIII(i) technical data, misclassified in March 2018, related to an aluminum display housing component of the F-22 Raptor Fighter Aircraft to two Chinese FPEs at Collins’ facility in Shanghai, PRC.

In a separate 2023 disclosure, RTX described a jurisdiction and classification review that it undertook following the discovery of the systemic violations described in the previous paragraphs. The review revealed that between March 2015 and May 2023 Respondent exported without authorization USML Category XI(d) technical data to Chinese entities.

 

Unauthorized Procurement from the PRC Resulting from Misclassification

 

RTX disclosed that between 2015 and 2023, Rockwell Collins and, for a period following the acquisition, Collins, exported without authorization technical data controlled under USML Category XI(d) to entities in the PRC to procure approximately 45 distinct USML Category XI(c)(2) printed wiring boards (PWBs). Subsequently, Rockwell Collins (and Collins) delivered these PWBs to other prime contractors and directly to U.S. Department of Defense (DoD) customers for ultimate end use in U.S. and foreign military platforms.

In at least one disclosure, RTX reported that, following issuance of purchase orders and production of the PWBs by its Chinese suppliers, it caused the retransfer without authorization of technical data in the form of first-article inspection reports to its Chinese FPEs in Shanghai.

 

Harm to National Security

 

In a 2023 disclosure, RTX disclosed that, predominantly as a result of misclassifications UTC Aerospace Systems made between 2013 and 2017, it exported without authorization USML Category VIII(i) technical data to entities in – 9 – multiple foreign countries, including the PRC, as between 2019 and 2021. Respondent also disclosed that, at the time of the exports, it had incorrectly classified the technical data, which related to the environmental control system of the F/A-18 E/F Super Hornet, under the EAR.

 

Unauthorized Exports Related to Sensitive Military Platforms Resulting from Misclassification

 

RTX disclosed that between August 2017 and August 2022, Raytheon Company, and subsequently RAY, exported without authorization USML Category IV(c), IV(h), VI(f), XI(c), XI(d), and XII(e) defense articles to Australia, Belgium, Canada, France, Germany, Greece, Israel, Japan, Mexico, the Netherlands, the Republic of Korea, Saudi Arabia, Singapore, Sweden, Türkiye, the United Arab Emirates (UAE), and the United Kingdom. The unauthorized exports comprised parts, components, and technical data related to sensitive U.S. and foreign government military platforms, including but not limited to the:

  • Tomahawk Cruise Missile;
  • RIM-162 Evolved SeaSparrow Missile (ESSM);
  • RIM-116 Rolling Airframe Missile;
  • Standard Missile-2; and the
  • PAVEWAY Laser Guided Bomb.

 

Unauthorized Reexports, Retransfers, and Temporary Imports Resulting from Misclassification

 

In seven disclosures, RTX reported that its failure to establish proper jurisdiction and classification of defense articles resulted in violations committed by its foreign affiliates in France and Germany.

 

Unauthorized Exports, Reexports, and Retransfers of Defense Articles, including Classified Defense Articles

Since 2019, RTX has submitted dozens of voluntary disclosures to the Department describing additional unauthorized exports of defense articles, including classified defense articles.

 

Unauthorized Exports of Classified Defense Articles

 

In four disclosures, RTX disclosed that it exported without authorization classified defense articles controlled under USML Categories IV(h), IV(i), and XI(c) to Australia, Germany, Norway, and the UAE related to the following programs:

  • National Advanced Surface-to-Air Missile System;
  • RIM-162 Evolved SeaSparrow Missile;
  • Tomahawk Cruise Missile; and
  • AIM-120 Advanced Medium-Range Air-to-Air Missile Extended Range (AMRAAM-ER)

 

Harm to National Security

 

RTX disclosed that in October 2020, it exported without authorization USML Category IV(i) classified technical data to Norway.

 

Additional Unauthorized Exports of Classified Defense Articles

 

In a 2021 disclosure, RTX described its unauthorized temporary exports of classified components related to the ESSM to Australia and Germany. In July 2020, RTX prepared to temporarily export eight unclassified USML Category IV(h) transition sections for the ESSM Block 1 Guided Missile Assembly to Germany for repair under a DSP-73 authorization. Two of the eight transition sections included “erroneously installed” USML Category IV(h) S-Band Transceiver Modules (SBT), which are classified, designated SME, and were not authorized for temporary export under the DSP-73.

In the same disclosure, RTX disclosed the unauthorized export of one classified USML Category XI(c) “erroneously installed” hard drive to Australia. In September 2019, RTX prepared to export to Australia an oscilloscope intended for use with the MK698 Guided Missile Test Set in support of the ESSM program.

In a 2023 disclosure, RTX described the unauthorized export of classified USML Category IV(i) technical data to Australia. In November 2021, Respondent exported a CD-ROM intended to include software related to the AMRAAM to its Australian affiliate, Raytheon Australia (RA), under a DDTC authorization.

In each of these four disclosures, RTX identified the primary root cause of the violations as individual employees’ failures to verify whether the defense articles were classified or approved under the relevant DDTC authorizations prior to the unauthorized exports.

 

Other Unauthorized Exports, Reexports, and Retransfers of Defense Articles

 

In 54 disclosures submitted to the Department since 2019, RTX disclosed that it exported, reexported, and retransferred without authorization hundreds of defense articles, some of which qualified as SME, to or within 25 different countries, including the PRC.

 

Unauthorized Exports of Defense Articles by Employees via Hand-Carry to Proscribed Destinations

 

Since 2019, RTX has submitted three voluntary disclosures describing unauthorized exports of defense articles to proscribed destinations during employee travel.

 

Unauthorized Exports to Lebanon

 

In a 2021 disclosure, RTX described the unauthorized export of defense articles to Lebanon, a proscribed destination listed in 22 C.F.R. 126.1, during two personal trips one employee took in 2020 and 2021. The employee hand-carried his RTX-issued laptop, which contained ITAR-controlled technical data and was “capable of accessing the Raytheon U.S. network using a secure Virtual Private Network,” on both trips.

 

 

Harm to National Security

 

RTX discovered these violations during a standard monthly compliance review in July 2021 and, following an internal investigation, determined that the employee’s laptop contained USML Category IV(i) technical data related to the Standard Missile-3, Standard Missile-6 (SM-6), and ESSM Block 2.

 

Unauthorized Exports to Russia

 

In a 2022 disclosure, RTX described the unauthorized exports of defense articles to Russia, a proscribed destination listed in 22 C.F.R. 126.1, during one employee’s personal trip in May and June of 2021. The employee hand carried his RTX-issued laptop, which contained ITAR-controlled technical data, to St. Petersburg, Russia and attempted to use the laptop while in Russia.

 

Unauthorized Exports to Iran

 

In a 2019 disclosure, Respondent described the unauthorized export of defense articles to Iran, a proscribed destination listed in 22 C.F.R. 126.1, during one employee’s personal travel.

 

Violations of Terms, Conditions, and Provisos of DDTC Authorizations

 

Respondent has submitted 36 disclosures to the Department related to its violations of terms, conditions, and provisos of DDTC authorizations on numerous occasions dating back to 2019. These violations comprise:

  • Failure to furnish or properly complete DSP-83 Nontransfer and Use Certificates;
  • Failure to return in a timely manner to the United States defense articles previously exported under DSP-73 temporary export licenses;
  • Failure to file or the filing of inaccurate annual sales reports related to Department-issued manufacturing licensing agreements (MLA);
  • Failure to file in a timely manner reports related to payments reportable under 22 C.F.R. 130;
  • Failure to notify DDTC in a timely manner of actions related to Departmentissued authorizations (e.g., agreement termination, agreement execution, failure to conclude agreements, initial export of technical data pursuant to an agreement);
  • Foreign manufacture of defense articles valued in excess of that authorized by the relevant MLA; and
  • Misrepresentation or omission of facts in export or temporary import control documents (e.g., citation of incorrect Department-issued authorizations in electronic export information filings, submission of amendments to Department-issued MLAs containing inaccurate valuations of defense articles manufactured abroad)

 

In additional to the payment of $100 million dollars RTX is required to undertake the following actions:

 

Remedial Measures:

 

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

 

RTX, 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.

 

RTX 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.

 

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

familiar with the AECA and the ITAR, and their own and RTX’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.

 

RTX 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) of the agreement. Respondent shall provide to DTCC written confirmation that the company has completed this action.

 

RTX 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 RTX’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. RTX 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, RTX 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 RTX’s export compliance policies and procedures.

 

Classification Review:

 

RTX shall, under the supervision of the Designated Official, review, verify, and complete the export control jurisdiction of all hardware and/or software that RTX’s 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, RTX 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:

 

One audit shall be performed during the Consent Agreement. RTX shall have the audit conducted by an outside consultant with expertise in AECA and ITAR matters, approved by the Director, DTCC. The audit shall be conducted under the supervision of the Designated Official. The audit shall provide a thorough assessment of the effectiveness of RTX’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 audit.

 

Debarment:

 

RTX 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, RTX agreed to arrange and facilitate, with minimum advance notice, onsite reviews by the Department while this Consent Agreement remains in effect.

 

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

 

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=016068ca9790565467b1791ad053affa and

 

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=3c6068ca9790565467b1791ad053aff2 and

 

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=096068ca9790565467b1791ad053aff7

 

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DDTC Name And Address Changes Posted To Website

 

August 12 through 30, 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:

  • Name change from Kongsberg Protech Systems USA Corporation to Kongsberg Defense & Aerospace Inc. due to corporate restructuring;
  • Name change from Kongsberg Defense & Aerospace, Inc. to Kongsberg Defense & Aerospace Holding Inc due to corporate restructuring;
  • Name change from Communications & Power Industries LLC to CPI International, Inc., Beverly Microwave Division, and Microwave Products, Inc. due to divestment of subsidiaries;
  • Address change for Wärtsilä Netherlands B.V at t Hanzelaan 95, 8017 JE Zwolle, the Netherlands to Wärtsilä Netherlands B.V. at Innovatiestraat 4, 8051 TC Hattem, the Netherlands.
  • Name change from Communications & Power Industries LLC to CPI International, Beverly Microwave Division and Microwave Power Products, Inc. due to Acquisition.

 

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DDTC FAQS – ITAR 126.7 EXEMPTION

 

Frequently Asked Questions (FAQS) related to the Australia/UK Exemption (AUKUS)

 

  1. Q: Does the ITAR § 126.7 exemption obviate the need to obtain a Foreign Person Employee DSP-5 license for U.S. person employers?

 

A: The foreign person, in their capacity as a natural person, must become an Authorized User to avail themselves of the exemption.  A DDTC authorization (e.g., DSP-5 FPE license) would be required for the transfer of any technical data beyond the scope and limitations of the ITAR § 126.7 exemption.  This would include, for example, transfers of defense articles described on the ETL.

 

  1. Q: How do I use the ITAR § 126.7 exemption in the Automated Export System (AES)?

 

A: Exporters of defense articles must electronically file Electronic Export Information (EEI) using the AES citing code “126.7” in the appropriate field in the EEI for each shipment.  This new code appears in the existing AES drop-down menu.

 

  1. Q: The end-users on my license application are all Australian, U.K, or Canadian entities but some intermediate consignees are located in different countries. Is my application still eligible for the expedited procedures outlined in ITAR § 126.15?

 

A: No.  The expedited procedures described in ITAR § 126.15 are available only when the export application would authorize the export of defense articles or defense services to only Australia, the United Kingdom, or Canada.  Any application that would authorize exports to parties in any other country will be subject to routine DDTC adjudication processes.

 

  1. How often will the Authorized User list of Australian and United Kingdom parties be updated?

A: The Authorized User list in DECCS is the official, up-to-date record of Australian and United Kingdom Authorized Users. DDTC will update the Authorized User list as needed.

 

  1. Q: If a U.S. company has United Kingdom and/or Australia subsidiaries on its DDTC registration, will these subsidiaries be treated as the U.S. Company?

 

A: No.  Legal entities incorporated in Australia or the United Kingdom are foreign persons, considered to be entities of those countries, and must enroll as Authorized Users through their governments to participate in transfers or activities pursuant to the ITAR § 126.7 exemption.

 

  1. Q: How do I know if an Australian or United Kingdom party is an “Authorized User” under the ITAR § 126.7 exemption?

 

A: The list of Authorized Users of Australia and the United Kingdom is available in the Defense Export Control and Compliance System (DECCS).  To access the list, you must enroll in DECCS, log-in, and navigate to the Authorized User list.

 

  1. Q: Will the Authorized User list be integrated into common automated screening tools used widely throughout industry?

 

A: DDTC does not develop or support such third-party screening software and cannot speak to its integration with the Authorized User list.

 

  1. Q: Where is the Excluded Technology List (ETL)?

 

A: The ETL that is applicable to ITAR § 126.7 is codified in Supplement No. 2 to Part 126 of the International Traffic in Arms Regulations (ITAR).

 

  1. Q: How should I note for DDTC in my license application the fact that the expedited licensing procedures provided for in ITAR § 126.15 apply?

 

A: DDTC will apply the expedited licensing procedures to export license applications that qualify for expedited treatment under ITAR § 126.15 automatically.  There is no need to request expedited treatment specifically.  However, applicants always are encouraged to submit any information that they believe would help facilitate an expeditious and streamlined review by the Department.

 

  1. Q: How does the § 126.7 exemption work?

 

A: The International Traffic in Arms Regulations (ITAR) § 126.7 exemption simplifies the transfer of ITAR-controlled defense articles, including technical data, the performance of defense services, and engaging in brokering activities between and among Australia, the United Kingdom, and the United States within an approved Authorized User group of government, private sector, and research and academic entities.  When all requirements are met, parties may engage in such activities without the need for additional Directorate of Defense Trade Controls (DDTC) authorization.  More information on who is an Authorized User is available in a corresponding FAQ.

 

Please see list of all FAQS related to AUKUS at the link below.

 

https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_public_portal_faq_detail&sys_id=1f3b2dad970416980083b3b0f053afc9

 

 

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Department of Defense, Defense Security Cooperation Agency (DSCA)

 

DSCA Notifies Congress of Potential FMS Sale To Norway

 

August 9, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government Norway has requested to buy sixteen (16) M142 High Mobility Artillery Rocket Systems (HIMARS); fifteen (15) M30A2 Guided Multiple Launch Rocket System (GMLRS) Alternative Warhead (AW) pods with Insensitive Munitions Propulsion System (IMPS); fifteen (15) M31A2 GMLRS Unitary (GMLRS-U) high explosive pods with IMPS; and one hundred (100) M57 Army Tactical Missile System (ATACMS) pods. Also included are Low Cost Reduced Range Practice Rocket (LCRRPR) pods; interactive electronic technical manuals; integration support services; spare parts; tool kits; test equipment; contractor logistics support; training; training equipment; technical assistance; technical publications; transportation; and other related elements of logistics and program support. The estimated total program cost is $580 million.

 

The principal contractor will be Lockheed Martin, located in Grand Prairie, TX. 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/norway-m142-high-mobility-artillery-rocket-systems

 

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DSCA Notifies Congress of Potential FMS Sale To Israel

 

August 13, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government Israel has requested to buy up to fifty (50) new F-15IA multi-role fighter aircraft, as well as Mid-Life Update modification kits for its existing twenty-five (25) F-15I multi-role fighter aircraft; one hundred twenty (120) F110-GE-129 engines; ninety (90) Advanced Display Core Processors II; seventy-five (75) APG-82(V)1 Active Electronically Scanned Array radars; fifty (50) AN/AAQ-13 LANTIRN navigation pods with containers; three-hundred twenty (320) LAU-128 Advanced Medium Range Air-to-Air Missile launchers; twenty-five (25) M61A Vulcan cannons; and one hundred eighty (180) Embedded Global Positioning System/Inertial Navigation System devices with M-Code. Also included are Cartridge Actuated Devices and Propellant Actuated Devices; Joint Helmet Mounted Cueing Systems; APX-119 Identification Friend or Foe (IFF) systems; KIV-77 Mode 4/5 IFF cryptographic appliques; AN/PYQ-10 Simple Key Loaders; impulse cartridges, chaff, and flares; integration and test support and equipment; aircraft and munitions support and support equipment; secure communications equipment, precision navigation, and cryptographic devices; classified software development, delivery, and support; spare parts, consumables and accessories, and repair and return support; major and minor modifications, maintenance, and maintenance support; facilities and construction support; transportation and airlift support; classified publications and technical documentation; personnel training and training equipment; warranties; studies and surveys; 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 $18.82 billion. Deliveries are estimated to begin in 2029. The prime contractor will be The Boeing Corporation, located in St. Louis, MO. 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/israel-f-15ia-and-f-15i-aircraft and

https://www.dsca.mil/major-arms-sales/archive-date/202408

 

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August 13, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Israel has requested to buy thirty (30) AIM-120C-8 Advanced Medium Range Air-to-Air Missiles (AMRAAM) and one (1) AMRAAM guidance section (spare). The following non-MDE items will also be included: AMRAAM control sections and containers; Common Munitions Built-In-Test/Reprogramming Equipment (CMBRE); ADU-891/E Adapter Group Computer Test Sets; spare parts, consumables, accessories, repair and return support, classified and unclassified publications, and technical documentation; classified software delivery and support; munitions support and support equipment; test support and support equipment; personnel training and training equipment; warranties; studies and surveys; contractor logistics support services; 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 $102.5 million. These items will be sourced from new production.

 

The prime contractor will be RTX Corporation, located in Tucson, AZ. 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/israel-advanced-medium-range-air-air-missiles

 

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DSCA Notifies Congress of Potential FMS Sale To Israel

 

August 13, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Israel has requested to buy thirty-two thousand seven hundred thirty-nine (32,739) 120mm tank cartridges, consisting of 120mm M1147 High Explosive Multi-Purpose with Tracer (HEMP-T) cartridges and/or 120mm M830A1 High Explosive Multi-Purpose Anti-Tank (MPAT) with Tracer cartridges. The following non-MDE is also included: various 120mm tank munitions; 120mm munitions canisters; transportation costs; publications and technical documentation; 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 $774.1 million. Deliveries are estimated to begin in 2027. The principal contractors will be General Dynamics Ordnance and Tactical Systems, located in St. Petersburg, FL, and Northrop Grumman Defense Systems, located in Falls Church, VA. There are no known offset agreements proposed in connection with this potential sale.

 

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

 

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DSCA Notifies Congress of Potential FMS Sale To Israel

 

August 13, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Israel has requested to buy fifty thousand (50,000) M933A1 120mm High Explosive (HE) mortar cartridges with M783 fuzes that will be added to a previously implemented case whose value was under the congressional notification threshold. The original FMS case, valued at $0.41 million ($0.37 million in MDE), included four hundred (400) M933A1 120mm HE mortar cartridges with M783 fuzes. This notification is for a combined total of fifty thousand four hundred (50,400) M933A1 120mm HE mortar cartridges with M783 fuzes. Also included are publications; technical documentation; U.S. Government and contractor engineering, technical, and logistics support services; studies and surveys; and other related elements of logistics and program support. The estimated total cost is $61.1 million. Deliveries are estimated to begin in 2026. The principal contractor will be General Dynamics Ordnance and Tactical Systems Inc., located in Quebec, Canada. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/israel-m933a1-120mm-high-explosive-mortar-cartridges

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DSCA Notifies Congress of Potential FMS Sale To Israel

 

August 13, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Israel has requested to buy additional modified M1148A1P2 Family of Medium Tactical Vehicles (FMTV) Load Handling System (LHS) 8-ton cargo trucks that will be added to a previously-implemented Foreign Military Sales (FMS) case whose value was under the congressional notification threshold. The original FMS case, valued at $62.4 million ($0 in Major Defense Equipment (MDE)), included modified M1148A1P2 FMTV LHS 8-ton cargo trucks and support. This notification is for the combined total of modified M1148A1P2 FMTV LHS 8-ton cargo trucks. Also included are armor b-kits; corrosion protection; special tools and test equipment; integration and test support; spare and repair parts; software delivery and support; publications and technical documentation; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; storage; and other related elements of logistics and program support. The estimated total cost is $583.1 million. Deliveries are estimated to begin in 2026. The principal contractor will be the Oshkosh Corporation, located in Oshkosh, WI. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/israel-m1148a1p2-family-medium-tactical-vehicles

 

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DSCA Notifies Congress of Potential FMS Sale To Germany

 

August 15, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Germany has requested to buy up to six hundred (600) PATRIOT Advanced Capability-3 (PAC-3) Missile Segment Enhancement (MSE) missiles (includes ten (10) fly-to-buy missiles). The following non-MDE items will also be included: tools and test equipment; range and test programs; support equipment; associated publications and technical documentation; training equipment; spare and repair parts; new equipment training; transportation; quality assurance team support; U.S. Government and contractor technical assistance, engineering, and logistics support services; systems integration and checkout; field office support; participation in the International Engineering Services Program and Field Surveillance Programs; launcher modification kits; MSE conversion kits; and other related elements of logistics and program support. The estimated total cost is $5.0 billion. The prime contractor will be Lockheed Martin, located in Dallas, TX. 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/germany-patriot-advanced-capability-3-missile-segment-enhancement

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DSCA Notifies Congress of Potential FMS Sale To Germany

 

August 15, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Denmark has requested to buy up to five thousand eight hundred thirty-two (5,832) M1156 Precision Guidance Kits (PGK). Also included are ancillary items; compatibility testing; firing tables; technical assistance; technical data; new equipment training; and other related elements of logistics and program support. The estimated total cost is $85 million. The principal contractor will be Northrop Grumman, located in Minneapolis, MN. 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/denmark-precision-guidance-kits

 

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DSCA Notifies Congress of Potential FMS Sale To Italy

 

August 15, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Italy has requested to buy six (6) Unmanned Aerial System (UAS) MQ-9 Block 5 Aircraft; three (3) Unmanned Aerial System (UAS) MQ-9 Mobile Ground Control Stations (MGCS); twelve (12) AN/DAS-4 Multi-spectral Target Systems; nine (9) LYNX AN/APY-8 Block 20A Synthetic Aperture Radars with Maritime Wide Area Surveillance (MWAS) capability; and one (1) Embedded Global Positioning & Inertial Navigation System (EGI). The following non-MDE items will also be included: Reaper/Predator engines; Ruggedized Aircraft Maintenance Test Stations (RAMTS); AN/ARC-210 Ultra High Frequency (UHF)/Very High Frequency (VHF) Radios (RT-2036); Ground Data Terminals (GDT) (line of sight link); AN/PYQ-10 Simple Key Loaders; KIV-77 Identification Friend or Foe (IFF) Cryptographic Applique; Transponder IFF AN/APX-119; KY100M Narrowband/Wideband terminal communications security (COMSEC) device; UAS MQ-9 Fixed Ground Control System (FGCS); satellite communications (SATCOM) Earth Terminal Subsystems (SETSS); precision navigation; integration and test support and equipment; aircraft or engine support equipment; spare parts, consumables and accessories, and repair and return support; major modifications, maintenance, and maintenance support; facilities and construction support; transportation and airlift support; classified and unclassified software delivery and support; classified and unclassified publications and technical documentation; personnel training and training equipment; special insurance and warranties; studies and surveys; 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 $738 million. The principal contractor will be General Atomics, located in San Diego, CA. There are no known offset agreements proposed in connection with this potential sale.

 

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

 

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DSCA Notifies Congress of Potential FMS Sale To Canada

 

August 16, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Canada has requested to buy forty-eight (48) AIM-9X Sidewinder Block II+ Tactical Missiles; one hundred twenty (120) AIM-9X Sidewinder Block II Tactical Missiles; forty-eight (48) AIM-9X Sidewinder Block II Captive Air Training Missiles; forty-eight (48) AIM-9X Sidewinder Block II Special Air Training Missiles; four (4) AIM-9X Sidewinder Block II+ Tactical Guidance Units; twelve (12) AIM-9X Sidewinder Block II Tactical Guidance Units; and eight (8) AIM-9X Sidewinder Block II Guidance Units. The following non-MDE items will also be included: Active Optical Target Detectors; KGV-135A COMSEC chips; missile containers; training aids, spares; support equipment; training, missile software; and U.S. Government and contractor technical, engineering, logistical, and program support; and other related elements of logistics and program support. The estimated total cost is $264.6 million. The principal contractor will be RTX Corporation, located in Tucson, AZ. The purchaser typically requests offsets. Any offset agreement(s) will be defined in negotiations between the purchaser and the contractor.

 

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

 

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DSCA Notifies Congress of Potential FMS Sale To the Republic of Korea

 

August 19, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Republic of Korea (ROK) has requested to buy up to thirty-six (36) AH-64E Apache Attack Helicopters; up to seventy-six (76) T700-GE-701D Engines (72 installed, 4 spares); up to thirty-six (36) AN/ASQ-170 Modernized Target Acquisition and Designation Sight/AN/AAR-11 Modernized Pilot Night Vision Sensors (M-TADS/PNVS); up to fourteen (14) AN/APG-78 Fire Control Radars (FCR) with Mast Mounted Assembly (MMA); up to fourteen (14) AN/APG-78 Fire Control Radars (FCR) with Radar Electronic Units (REU); up to fourteen (14) AN/APR-48B Modernized-Radar Frequency Interferometers (MRFI); up to four hundred fifty-six (456) AGM-114R2 (N) Hellfire Missiles; up to six (6) M36E8 Captive Air Training Missiles (CATM); up to one hundred fifty-two (152) AGM-179A Joint Air-to-Ground Missiles (JAGM); up to forty (40) AAR-57 Common Missile Warning Systems (CMWS) (36 installed, 4 spares). The following non-MDE items will also be included: AN/AVR-2B laser detecting sets; AN/APX-123A Identification Friend or Foe (IFF) transponders; IDM-401 improved data modems; Enhanced Image Intensifier (EI2) cameras; AN/ARN-149 (V)3 automatic direction finders; ASN-157 Doppler Radar Velocity Sensors; AN/APN-209 radar altimeters; AN/PYQ-10(C) Simple Key Loader; Airborne Global Positioning System (GPS)/Embedded Global Positioning System/Inertial Navigation System (EGI); AN/APR-39C(V)1+ Radar Signal Detecting sets; ARC-220 High Frequency Communication Systems; KIV-77 Mark XIIA IFF Crypto Applique; Common Missile Warning System (CMWS) software update; M230E-1 30mm automatic gun; M139 AWS 20mm automatic gun; M261 rocket launchers; M299 missile launchers; 2.75-inch rockets; 30mm rounds; MG62 Cartridge Impulse BBU-35/N; A965 cartridges, 25.4mm rounds; M839 decoys; L410 flares; M206 aircraft countermeasures decoy flares; Cartridge Actuated Devices/Propellant Actuated Devices (CAD/PADs); U.S. Government engineering, technical, and logistics support services; and other related elements of program and logistics support. The estimated total cost is $3.5 billion. The principal contractors will be Boeing, located in Mesa, AZ; and Lockheed Martin, located in 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/republic-korea-ah-64e-apache-helicopters

 

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DSCA Notifies Congress of Potential FMS Sale To Australia

 

August 19, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Australia has requested to buy three hundred fifty (350) Javelin FGM-148F missiles (includes four (4) fly-to-buy missiles). Also included is U.S. Government technical assistance; technical data; repair and return services; and other related elements of logistics and program support. The estimated cost is $100 million. The prime contractors will be the Javelin Joint Venture between RTX Corporation, located in Tucson, AZ, and Lockheed Martin, located in Orlando, FL. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/australia-fgm-148f-javelin-missiles

 

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DSCA Notifies Congress of Potential FMS Sale To Finland

 

August 19, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Finland has requested to buy five thousand five hundred (5,500) M1156A1 Precision Guidance Kit (PGK) multi-option fuzes 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 $.97 million, included technical data/reports; U.S. Government technical assistance; incidental travel; transportation; PGK spare parts; equipment training; and related elements of logistics and program support. This notification includes the original aforementioned items and adds five thousand five hundred (5,500) M1156A1 PGK multi-option fuzes. The following non-MDE items will also be included: ancillary items; compatibility testing; firing tables; integration kits; antennas; key loaders; precision-guided munition simulator; technical assistance; technical data/reports; and other related elements of logistics and program support. The estimated total program cost is $70 million. The principal contractor will be Northrop Grumman Innovation Systems, located in Dulles, VA. 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/finland-m1156a1-precision-guidance-kits

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DSCA Notifies Congress of Potential FMS Sale To the Netherlands

 

August 19, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of the Netherlands has requested to buy training in support of its CH-47 and AH-64 helicopter fleet. Included is training ammunition; Army Supply Class I-VI and VIII-X items; information technology (IT) equipment; ground components; parts and accessories; Installation Management Command (IMCOM)-related service support; U.S. Government and contractor personnel assistance; miscellaneous service contract support; and other related elements of logistics and program support. The estimated total cost is $305 million. A principal contractor is not associated with this proposed sale. There are no known offset agreements proposed in connection with this potential sale

 

https://www.dsca.mil/press-media/major-arms-sales/netherlands-ch-47-and-ah-64-helicopter-training

 

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DSCA Notifies Congress of Potential FMS Sale To Tunisia

 

August 20, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress The Government of Tunisia has requested to buy additional non-MDE 65’ SAFE Archangel boats and additional non-MDE articles and services that will be added to a previously implemented case. The original FMS case, valued at $49.3 million, included non-MDE 65’ SAFE Archangel boats and non-MDE articles and services, consisting of commercial variant marine global positioning systems; navigation systems; communications equipment; training; and other related elements of logistical and program support. The estimated total cost is $110 million. The principal contractor is SAFE Boats International, located in Bremerton, Washington. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/tunisia-65-safe-archangel-boats

 

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DSCA Notifies Congress of Potential FMS Sale To the Government of Denmark

 

August 20, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress The Government of Denmark has requested to buy three hundred thirty-nine (339) M982A1 Excalibur tactical projectiles. Also included are Portable Electronic Fire Control Systems (PEFCS); Improved Platform Integration Kits (iPIK); Simple Key Loaders (SKLs); extractors; Surface Danger Zones (SDZs); training for new equipment; spare parts; U.S. Government technical assistance; technical data; repair and return services; and other related elements of logistics and program support. The estimated cost is $121 million. The principal contractor will be RTX Corporation, located in Tucson, Arizona. 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/denmark-excalibur-projectiles

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DSCA Notifies Congress of Potential FMS Sale To the Government of Norway

 

August 22, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress The Government of Norway has requested to buy one hundred (100) Advanced Medium Range Air-to-Air Missiles-Extended Range (AMRAAM-ER) and four (4) AMRAAM AIM-120C-8 guidance sections. The following non-MDE items will also be included: AMRAAM containers and support equipment; spare parts, consumables, accessories, and repair and return support; weapons software and support equipment, and classified software delivery and support; transportation support; classified publications and technical documentation; training equipment and support; studies and surveys; 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 $405 million. The principal contractor will be RTX Corporation, located in Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/norway-advanced-medium-range-air-air-missiles-extended-range

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DSCA Notifies Congress of Potential FMS Sale To the Government of Romania

 

August 22, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress The Government of Romania has requested to buy up to one hundred eighty-six (186) AIM-120C-8 Advanced Medium Range Air-to-Air Missiles (AMRAAM) and four (4) AIM-120C-8 AMRAAM guidance sections. The following non-MDE items will also be included: AIM-120 Captive Air Training Missiles (CATMs), missile containers, propulsion sections, control sections, telemetry kits, and warhead spares; KGV-135A Cryptographic Devices; Common Munitions Built-In-Test (BIT)/Reprogramming Equipment (CMBREs); ADU-891 Computer Test Set Adapter Groups; spare parts, consumables, accessories, and repair and return support; munitions support and support equipment; classified and unclassified publications and technical documentation; classified and unclassified software delivery and support; warranties; studies and surveys; transportation support; contractor logistics support (CLS); 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 $592 million. The principal contractor will be RTX Corporation, located in Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

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

 

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DSCA Notifies Congress of Potential FMS Sale To the Government of Australia

 

August 23, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress The Government of Australia has requested to buy AH-64E Apache sustainment support services, including U.S. Government and contractor engineering, technical, and logistics support services; technical data and publications; personnel training; and other related elements of logistics, and program support. The estimated total cost is $300 million. The principal contractors will be The Boeing Company, located in Mesa, AZ, and Lockheed Martin, located in Orlando, FL. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/australia-ah-64e-apache-sustainment-support-services

 

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DSCA Notifies Congress of Potential FMS Sale To the Government of India

 

August 23, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress The Government of India has requested to buy AN/SSQ-53G High Altitude Anti-Submarine Warfare (HAASW) sonobuoys; AN/SSQ-62F HAASW sonobuoys; AN/SSQ-36 sonobuoys; technical and publications and data documentation; U.S. Government and contractor engineering and technical support; and other related elements of logistics and program services and support. The estimated total cost is $52.8 million. The principal contractor(s) will be Sparton Corporation, located in De Leon Springs, FL, or Undersea Sensor Systems Inc. (USSI), located in Columbia City, IN, or a combination of both. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/india-anti-submarine-warfare-sonobuoys

 

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

 

BIS Publishes New Export Control Compliance Resources for the Academic Community

 

August 14, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) Export Enforcement published new resources for the academic community: a compliance note on voluntary self-disclosure trends and a compendium of export compliance resources. These resources align with BIS’s ongoing commitment to support academic institutions in their efforts to comply with export controls.

 

The compliance note, Trends in Voluntary Self-Disclosures Related to Academia to Inform Improvements to Export Compliance Plans, details conduct commonly disclosed by academic institutions over the past ten years that constitutes export control violations. The document also highlights actions universities can take to address and prevent these violations, including enhanced training programs and improved internal controls.

 

The Compendium of Resources offers a comprehensive guide to export compliance tools, including informational and vetting resources, BIS-specific resources, and examples of recent enforcement actions. These tools should help academic institutions integrate export control requirements into everyday operations for professors, students, staff, and visitors, which in turn helps minimize the risk of violations.

 

Together, the compliance note and the compendium of resources build on the efforts of the Academic Outreach Initiative, first announced in June 2022. The Academic Outreach Initiative is intended to help academic institutions maintain an open, collaborative research environment in a way that also protects them from national security risk, and it includes strategically prioritized engagement, the assignment of outreach agents to prioritized institutions, background briefings, and trainings.

 

https://www.bis.gov/media/documents/academic-voluntary-self-disclosures-compliance-note-812 and

https://www.bis.gov/media/documents/compendium-resources-final-v40pdf and

https://www.bis.gov/sites/default/files/files/Academic%20Outreach%20Initiative%20Policy%20Memo%20–%20FINAL.pdf and

https://www.bis.gov/press-release/bis-publishes-new-export-control-compliance-resources-academic-community

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Commerce Tightens Export Controls, Targets Illicit Procurement Networks For Supplying Russian War Machine

 

August 23, 2024:  The Commerce Department’s Bureau of Industry and Security (BIS) took aggressive action to further restrict the supply of both U.S.-origin and “U.S. branded” (i.e., labeled) items to Russia and Belarus for the Kremlin’s illegal war on Ukraine. The actions will further constrain Russia’s ability to arm its military by targeting illicit procurement networks designed to circumvent global export controls.

 

Key actions include:

  1. Further tightening controls on Russia by expanding the scope of the Russia/Belarus Military End User (MEU) and Procurement Foreign Direct Product (FDP) rule and imposing additional license requirements on operation software for computer numerically controlled (CNC) machine tools;
  2. Cutting off exports to foreign companies on the BIS Entity List; applying the expanded Russia/Belarus MEU and Procurement FDP rule to dozens of entities outside Russia;
  3. Restricting trade to additional foreign addresses and issuing guidance to exporters on identifying suspicious transactions related to foreign corporate service providers and listed foreign addresses, strengthening recently implemented restrictions on shell company addresses; and
  4. Providing guidance and recommendations on contractual language referencing export regulations (the Export Administration Regulations, or EAR), specifically, restrictions that target unlawful reexports to Russia and Belarus.

 

https://www.bis.gov/press-release/commerce-tightens-export-controls-targets-illicit-procurement-networks-supplying

 

 

U.S. Census Bureau

 

Tips on How to Resolve AES Response Messages

 

August 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:  303

Narrative:     Sold En Route Indicator Must be Y or N

Severity:       Fatal

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

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

Verify the Ultimate Consignee and the Sold En Route Indicator, correct the shipment and resubmit.
Response Code:  538

Narrative:     Shipping Weight Must Be Greater Than Zero For MOT

Severity:       Fatal

Reason:       The Mode of Transportation Code reported was one that identifies a Vessel, Rail, Truck, or Air shipment and the Shipping Weight was not reported.

Resolution: When the Mode of Transportation is Vessel, Rail, Truck or Air, the Shipping Weight must be reported.

Verify the Mode of Transportation 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.

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.

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Update to License Code C68 (NAC) (NO notification required)

August 22, 2024: On October 25, 2023, the Department of Commerce, Bureau of Industry and Security (BIS) published an interim final rule “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). On April 4, 2024, BIS published a rule (https://www.federalregister.gov/documents/2024/04/04/2024-07004/implementation-of-additional-export-controls-certain-advanced-computing-items-supercomputer-and) to correct inadvertent errors in those rules and make additional clarifications for the rule. This rule revises the header of § 740.8 to reference License Exception ACA in addition to License Exception NAC. BIS has separated License Exception NAC into two separate license exceptions that will reside in the same section of the EAR § 740.8: Notified Advanced Computing (NAC) will authorize exports and reexports of specified items to Macau and destinations in Country Group D:5 and entities headquartered in, or with an ultimate parent headquartered in, Macau or a destination specified in Country Group D:5, wherever located, that require a notification to BIS, while Advanced Computing Authorized (ACA) will authorize exports, reexports, and transfers (in-country) of specified items to destinations in Country Group D:1 or D:4 (except Macau and destinations specified in Country Group D:5) that do not require a notification to BIS. License Exception ACA will also authorize transfers (in-country) to Macau and destinations in Country Group D:5, and entities headquartered in, or with an ultimate parent headquartered in, Macau or a destination specified in Country Group D:5, that do not require a notification to BIS.

Update to License Code C68 (NAC) (NO notification required)

An update has been made to AES to revise the name of License Code C68 to Advanced Computing Authorized (ACA) (NO notification required)

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

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

  • Report License Code: C68 Advanced Computing Authorized (ACA) (NO notification required), if no advanced notification was required.
  • Report License Number: Report “ACA” 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)

Please note that all license exceptions are also subject to the restrictions in § 740.2 and part 746 of the EAR, which would remove eligibility for embargoed and sanctioned countries, e.g., Belarus, Cuba, Russia, Iran, and Syria.

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Office of Foreign Assets Control (OFAC)

 

Important Announcement for Users of OFAC’s Compliance Hotline

 

August 2, 2024: To improve efficiency in responding to requests for sanctions guidance from the public, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is updating its Compliance Hotline by streamlining and enhancing the query submission process.

Thanks to helpful feedback from Compliance Hotline users, OFAC is transitioning to a single, user-friendly online platform to receive questions from the public.  Users can now submit queries—and provide all necessary details—directly through OFAC’s new OFAC Compliance Hotline page.  This new platform is designed to improve OFAC’s tracking of queries and help OFAC assess when additional public guidance may be helpful.

OFAC will fully transition its Compliance Hotline to this web form platform by January 1, 2025, and will retire other existing forms of contacting the OFAC Compliance Hotline according to the following schedule:  OFAC will retire the Compliance Hotline email (OFAC_Feedback@treasury.gov) on August 16, 2024; and its Compliance Hotline telephone (1-800-540-6322 and 202-622-2490) on December 31, 2024.

Please submit questions about how to comply with OFAC-administered sanctions programs or where to find helpful guidance on OFAC’s website via the new online OFAC Compliance Hotline.

As a reminder, please continue to use OFAC’s License Application page for license applications and requests for formal interpretive guidance.  Other information about contacting OFAC, including where to submit voluntary self-disclosures or appeal designations, can be found on our Contact OFAC page.

https://ofac.treasury.gov/recent-actions/20240802_33 and

https://ofac.treasury.gov/ofac-compliance-hotline and

https://ofac.treasury.gov/contact-ofac

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Publication of Regulatory Amendments

 

August 20, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) published a final rule to update terminology and references across several sanctions programs’ regulations, and  added a general license to the Burma Sanctions Regulations to authorize the provision of agricultural commodities, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices to individuals whose property and interests in property are blocked pursuant to the Burma Sanctions Regulations.

 

https://ofac.treasury.gov/recent-actions/20240820

 

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OFAC Modernization Efforts

 

August 21, 2024: The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced several initiatives underway aimed at assisting the public with sanctions implementation. As part of these efforts, OFAC amended several Frequently Asked Questions (FAQs) to ensure published guidance remains current. OFAC will continue reviewing FAQs through an ongoing process that is focused on providing up-to-date and useful information to the public.

 

https://ofac.treasury.gov/recent-actions/20240821 and

https://ofac.treasury.gov/faqs/updated/2024-08-21

 

LATEST SANCTIONS FINES & PENALTIES

 

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

 

Fines and Penalties

 

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

 

August 9, 2024: Arthur Petrov Allegedly Participated in a Russia-Based Illicit Procurement Network That, Subsequent to Russia’s Invasion of Ukraine, Illegally Procured Large Quantities of Sensitive Microelectronics for a Russian Company.

 

Petrov, 33, a dual Russian-German citizen who has resided in Russia and Cyprus, is charged with one count of conspiracy to defraud the U.S., which carries a maximum sentence of five years in prison; one count of conspiracy to violate the Export Control Reform Act (“ECRA”), which carries a maximum sentence of 20 years in prison; three counts of violating the ECRA, each of which carries a maximum sentence of 20 years in prison; one count of conspiracy to smuggle goods from the U.S., which carries a maximum sentence of five years in prison; three counts of smuggling goods from the U.S., which each carry a maximum sentence of 10 years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; and one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison

 

https://www.justice.gov/usao-sdny/pr/russian-german-national-extradited-illegally-exporting-russia-sensitive-us-sourced and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

 

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August 15, 2024: As part of a settlement agreement to resolve alleged violations of U.S. export controls, the Department of Commerce’s Bureau of Industry and Security (BIS) imposed a $5.8 million civil penalty against TE Connectivity Corporation (TE), located in Middletown, Pennsylvania, and TE Connectivity HK Limited, located in Kwai Chung, New Territories, Hong Kong, for shipments of low-level items to parties tied to the People’s Republic of China’s (PRC) hypersonics, unmanned aerial vehicles (UAV), and military electronics programs.

 

The alleged violations involved shipments of $1.74 million in Items subject to the Export Administration Regulations (EAR) to parties on the BIS Entity List and for restricted end uses in China.  Specifically, TE sent items such as wires, printed circuit-board connectors, and pressure and temperature scanners to parties previously placed on the BIS Entity List for supporting the PRC’s military modernization efforts in the fields of hypersonics, UAVs, and electronics. TE voluntarily disclosed the conduct to BIS, cooperated with the investigation by BIS’s Office of Export Enforcement, and took remedial measures after discovering the conduct at issue, which resulted in a significant reduction in the penalty.

 

https://www.bis.gov/press-release/bis-imposes-58-million-penalty-against-pennsylvania-company-shipments-low-level-items and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

 

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August 15, 2024: The Justice Department unsealed an indictment charging U.S.-Iranian national Jeffrey Chance Nader, 68, with crimes related to the illicit export of U.S.-manufactured aircraft components, including components used on military aircraft, to Iran in violation of U.S. economic sanctions and other federal laws. Nader was arrested yesterday in California.

 

This prosecution was coordinated through the Disruptive Technology Strike Force, 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. Under the leadership of the Assistant Attorney General for National Security and the Assistant Secretary of Commerce for Export Enforcement, the Strike Force leverages tools and authorities across the U.S. Government to enhance the criminal and administrative enforcement of export control laws.

 

https://www.justice.gov/opa/pr/california-man-indicted-unlawfully-exporting-aircraft-components-iran and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

 

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August 15, 2024: A Bulgarian national made his initial appearance in a federal court in San Antonio Monday after being extradited from Greece.

 

According to court documents, Milan Dimitrov, 50, allegedly conspired with Ilias Sabirov, 52, of Russia, and Dimitar Dimitrov, 74, of Bulgaria, to violate the International Emergency Economic Powers Act (IEEPA) and the Export Control Reform Act (ECRA) in a scheme to procure sensitive radiation-hardened integrated circuits from the United States and illegally export those components to Russia through Bulgaria without the required licenses from the U.S. government.

 

Milan Dimitrov is charged with two counts of IEEPA violations, one count of money laundering, and one count of making false statements to the Department of Commerce in violation of ECRA. Each count in the indictment carries up to 20 years in federal prison.

 

Sabirov and Dimitar Dimitrov currently remain at large. The two were charged in the same indictment in December 2020 with two counts of IEEPA violations and one count of money laundering.

 

The indictment alleges that between at least May 2014 and May 2018 the defendants used the Bulgarian company Multi Technology Integration Group EEOD (MTIG) to receive export-controlled items from the United States and transship them to Russia without the required licenses.

 

According to the indictment, Sabirov is the head of two Russian companies—Cosmos Complect and OOO Sovtest Comp.—and controls MTIG. Both Dimitar Dimitrov and Milan Dimitrov worked for

Sabirov at Cosmos Complect and MTIG.

 

As alleged, in 2014, the defendants met with the supplier of the radiation-hardened circuits in Austin and were informed that radiation-hardened circuits could not be shipped to Russia because of U.S. trade restrictions. Sabirov then established MTIG in Bulgaria to purchase the controlled electronic circuits, which did not require a license for export to Bulgaria. The radiation-hardened properties of these circuits made them resistant to damage or malfunction in the harsh outer-space environment. The circuits were controlled for export to Russia for these very reasons. The parts were shipped to Bulgaria in 2015, and MTIG soon thereafter transshipped them to Sabirov’s companies in Russia. OOO Sovtest Comp. transferred over $1 million to MTIG for the parts.

 

In the same timeframe, MTIG—at Sabirov’s direction—ordered over $1.7 million in other electronic components produced by another U.S.-based electronics manufacturer. MTIG bought these parts to fulfill part of its contract with OOO Sovtest Comp. Again, the parts were shipped from the United States to Bulgaria, where they were merely repackaged and then shipped to Russia.

 

In late 2018, a Department of Commerce Export Control Officer interviewed Milan Dimitrov during a visit to MTIG to determine whether the radiation-hardened components were still in MTIG’s possession in Bulgaria. Milan Dimitrov, among other things, falsely denied sending the components to Russia.

 

U.S. Attorney Jaime Esparza of the Western District of Texas made the announcement.

The Commerce Department’s Office of Export Enforcement and the FBI are investigating this case with assistance from Defense Criminal Investigative Service (DCIS).

 

https://www.justice.gov/usao-wdtx/pr/bulgarian-national-extradited-scheme-illegally-export-us-origin-sensitive and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

 

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August 16, 2024: 89. Fed. Reg.: On August 18, 2021, in the U.S. District Court for the District of Arizona, Marco Antonio Peralta-Vega was convicted of violating 18 U.S.C. 554(a). Specifically, Peralta-Vega was convicted of smuggling various firearms and ammunition from the United States to Mexico. As a result of his conviction, the Court sentenced him to 36 months in prison with credit for time served, three years of supervised release, a $100 special assessment, and denied export privileges for a period of 10 years.

 

https://www.federalregister.gov/documents/2024/08/16/2024-18399/order-denying-export-privileges-in-the-matter-of-marco-antonio-peralta-vega-1537-e-bristol-dr

 

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August 16, 2024: 89 Fed. Reg. 66674: On November 28, 2022, in the U.S. District Court for the Northern District of Georgia, Kenan L’Homme was convicted of violating 18 U.S.C. 554(a). Specifically, L’Homme pleaded guilty to willfully and knowingly attempting to export from the United States the following eleven (11) items: one (1) Smith & Wesson model M&P pistol; one (1) CZ P-10F pistol; one (1) Taurus revolver; one (1) Glock model 26 pistol; one (1) Glock model 43 pistol; one (1) Glock model 30s pistol; one (1) Anderson AR-15 lower unit; one (1) Aero Precision AR-15 lower unit; and three (3) Glock model 23s pistols. As a result of his conviction, the Court sentenced him to 36 months in prison, a $200 special assessment, denied export privileges for a period of 6 years.

 

 

https://www.federalregister.gov/documents/2024/08/16/2024-18401/order-denying-export-privileges-in-the-matter-of-kenan-lhomme-67-chastain-circle-newman-ga-30263

 

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August 16, 2024: 89 Fed. Reg. 66676: On November 17, 2023, the U.S. District Court for the Central District of California entered judgment against Yi-Chi Shih for violating (among other statutes) 50 U.S.C. 1705 (“IEEPA”) and 18 U.S.C. 1001. Specifically, Shih was convicted of knowingly and willfully exporting Monolithic Microwave Integrated Circuits (MMIC) from the United States to China without the required licenses. He was also found to have made false statements to federal agents. Yi-Chi Shih has been denied export privileges for 10 years.

 

https://www.federalregister.gov/documents/2024/08/16/2024-18400/order-denying-export-privileges-in-the-matter-of-yi-chi-shih-currently-incarcerated-at-inmate-number

 

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August 16, 2024: 89 Fed. Reg. 66676: On October 31, 2022, in the U.S. District Court for the Central District of California, Rami Najm Ghanem was convicted of violating 18 U.S.C. 371, 18 U.S.C. 554 and section 38 of the Arms Export Control Act (22 U.S.C 2778) (“AECA”). Specifically, Ghanem was convicted of having knowingly and willfully engaged in the business of weapons brokering activities without the required licenses, and of having engaged in negotiating and arranging contracts, purchases, sales, and transfers of defense articles, foreign defense articles, defense services, and foreign defense services, including for machine guns. Mr. Ghanem has been denied export privileges for 10 years.

 

https://www.federalregister.gov/documents/2024/08/16/2024-18397/order-denying-export-privileges-in-the-matter-of-rami-najm-ghanem-inmate-number-73420-112-mcfp

 

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August 20, 2024: George Semerene Quintero (Semerene), 60, of Venezuela, plead guilty to conspiring to violate the International Emergency Economic Powers Act (IEEPA) for his role in a scheme to evade U.S. sanctions imposed on Petróleos de Venezuela S.A. (PDVSA), a Venezuelan state-owned oil company.

 

Semerene is scheduled to be sentenced on Nov. 5 and faces a maximum penalty of 20 years in prison and denied export privileges for 10 years. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

 

https://www.justice.gov/opa/pr/venezuelan-national-pleads-guilty-sanctions-evasion-scheme

 

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August 26, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) imposed a civil penalty of $44,750 against Streamlight, Inc. (Streamlight), a global manufacturer of portable lighting products located in Eagleville, Pennsylvania, to resolve three alleged violations of the antiboycott provisions of the Export Administration Regulations (EAR). Streamlight voluntarily self-disclosed the conduct to BIS, cooperated with the investigation by BIS’s Office of Antiboycott Compliance (OAC), and implemented remedial measures after discovering the conduct at issue, all of which resulted in a significant reduction in penalty.

 

https://www.bis.gov/press-release/bis-imposes-penalty-pennsylvania-company-streamlight-inc-resolve-alleged-violations

Sanctions

 

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

 

Implementation of Additional Sanctions Against Russia and Belarus Under the Export Administration Regulations (EAR)

 

August 27, 2024: 89 Fed. Reg. 68539: The Bureau of Industry and Security (BIS) made changes to the Russian and Belarusian sanctions under the Export Administration Regulations (EAR). This final rule expanded the scope of the Russia/Belarus-Military End User (MEU) Foreign-Direct Product (FDP) rule, and renamed it accordingly, so that the rule will also apply to transactions involving entities on the Entity List that pose a significant risk of involvement in the supply or diversion of items subject to the EAR to procurement networks for Russia’s and Belarus’s defense industry or intelligence services. This final rule also added controls on the export, reexport, or transfer (in-country) to or within Russia or Belarus of “software” for the operation of computer numerical control (CNC) machine tools. In addition, this final rule makes corrections and clarifications to certain aspects of the EAR’s Russia and Belarus sanctions.

 

https://www.federalregister.gov/documents/2024/08/27/2024-19132/implementation-of-additional-sanctions-against-russia-and-belarus-under-the-export-administration

 

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

 

August 2, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 99A – “Authorizing the Wind Down of Transactions and Certain Transactions Related to Debt or Equity of, or Derivative Contracts Involving, MOEX, NCC, or NSD;” and Russia-related General License 100A – “Authorizing Certain Transactions Related to Debt or Equity or the Conversion of Currencies Involving MOEX, NCC, or NSD.”

 

General License 99A:

 

(a)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, October 12, 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) Moscow Exchange (MOEX);

(2) National Clearing Center (NCC);

(3) Non-Bank Credit Institution Joint Stock Company National Settlement Depository (NSD); and

(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.

 

(b) All transactions prohibited by 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 any of the blocked entities identified in paragraph (a) (“Covered Debt or Equity”) to a non-U.S. person are authorized through 12:01 a.m. eastern daylight time, October 12, 2024.

 

(c) 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, June 12, 2024 are authorized through 12:01 a.m. eastern daylight time, October 12, 2024.

 

(d) All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the wind down of derivative contracts entered into prior to 4:00 p.m. eastern daylight time June 12, 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, October 12, 2024, provided that any payments to a blocked person are made into a blocked account in accordance with the RuHSR.

 

General License 100A:

 

(a) All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the divestment of debt or equity to a non-U.S. person, who is not a person whose property or interests in property are blocked, or the conversion of currencies, involving one or more of the following blocked entities that is acting solely as a securities, trade, or settlement depository, central counterparty or clearing house, or public trading market, are authorized through 12:01 a.m. eastern daylight time, October 12, 2024:

 

(1) Moscow Exchange (MOEX);

(2) National Clearing Center (NCC);

(3) Non-Bank Credit Institution Joint Stock Company National Settlement Depository (NSD); and

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

 

https://ofac.treasury.gov/recent-actions/20240802 and

https://ofac.treasury.gov/media/933086/download?inline and

https://ofac.treasury.gov/media/933091/download?inline

 

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August 6, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Paraguayan tobacco company Tabacalera del Este S.A. (Tabesa) for providing financial support to Paraguay’s former president, Horacio Manuel Cartes Jara (Cartes), who OFAC sanctioned on January 26, 2023 for his involvement in corruption. Tabesa was 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.

 

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

 

  • Tabacalera Del Este S.A. of Paraguay.

 

https://ofac.treasury.gov/recent-actions/20240806 and

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

 

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August 9, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action against 19 individuals, 14 entities, and one aircraft pursuant to Belarus-related Executive Order (E.O.) 14038. This action targets persons involved in supporting Russia’s war in Ukraine through military resource production and transshipment of goods to Russia, sanctions evasion on behalf of Belarusian defense entities, and revenue generation for Belarusian oligarchs in Alyaksandr Lukashenka’s inner circle. OFAC designated five of these targets—three individuals and two entities—pursuant to Russia-related E.O. 14024.

 

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) also issued Russia-related General License 101, “Authorizing Civil Aviation Safety and Wind Down Transactions Involving Certain Entities Blocked on August 9, 2024.

 

General License 101:

 

  • All transactions prohibited by the Belarus Sanctions Regulations, 31 CFR part 548 (BSR), and Executive Order (E.O.) 14024, 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 one or more of the following blocked entities (collectively, the “Blocked Entities”) are authorized through 12:01 a.m. eastern daylight time, September 10, 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:

 

(1) Aviakompaniya Belkanto LLC;

(2) Aviakompaniya Rada LLC;

(3) UE RubiStar; or

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

 

(b) All transactions prohibited by the BSR or E.O. 14024 that are ordinarily incident and necessary to the wind down of any transaction involving any of the Blocked Entities are authorized through 12:01 a.m. eastern daylight time, September 10, 2024, provided that any payment to a Blocked Entity is made into a blocked account in accordance with the BSR and the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).

 

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

 

  • Arkadiev, Vladimir Mikhailovich of Russia;
  • Barabanov, Oleg Fedorovich of Belarus;
  • Chivel, Yuri Aleksandrovich of Belarus;
  • Chudakov, Vladimir Vladimirovich of Belarus;
  • Dimenshtein, Arkady Samuilovich of Belarus;
  • Gerasim, Oleg Romualdovich of Belarus;
  • Ishchenko, Dmitry Olegovich of Belarus;
  • Kastianok, Siarhei Uldadzimiravich of Belarus;
  • Krokhotin, Evgeniy Yurievich of Belarus;
  • Leschanka, Aliaksandr Mikalayevich of Belarus;
  • Mikholap, Evgeniy Ivanovich of Belarus;
  • Nareiko, Ivan Nikolaevich of Belarus;
  • Pavlenko, Vladislav Nikolaevich of Belarus;
  • Petrov, Oleg Vladimirovich of Belarus;
  • Savruk, Viktoriya Orestovna of Belarus;
  • Sidaruk, Siarhei Mikalaevich of Belarus;
  • Yavorki, Aleksey Nikolaevich of Belarus;
  • Zamulevich, Dmitriy Mikhailovich of Belarus; and
  • Zharski, Aliaksandr Uladzimiravich of Belarus.

 

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

 

  • ALC DISKOMS of Belarus;
  • Aviakompaniya Belkanto LLC of Belarus;
  • Aviakompaniya Rada LLC of Belarus;
  • Joint Stock Company Plant Legmash of Belarus;
  • KB Unmanned Helicopters LLC of Belarus;
  • Limited Liability Company Tochanya Mekhanikaof Belarus;
  • LLC Alyurtekh of Belarus;
  • LLC Grosver Group of Belarus;
  • LLC Laboratory of Additive Technologies of Belarus;
  • LLC MOT of Belarus;
  • OOO Ruchservomotor of Belarus;
  • Ruzekspeditsiya LLC of Belarus;
  • UE Rubistar of Belarus; and
  • VLATE Logistik LLC of Belarus.

 

 

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

 

  • EW-001PB;  Aircraft Model 767-32KER; Aircraft Manufacturer’s Serial Number (MSN) 33968; Aircraft Tail Number EW-001PB (aircraft) [BELARUS-EO14038].

 

https://ofac.treasury.gov/recent-actions/20240809 and

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

 

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August 12, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 102, “Authorizing Certain Transactions Involving VPower Finance Security (Hong Kong) Limited.”

 

General License 102:

 

(a) All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the transportation, delivery, or storage of currency; cash processing services; or maintenance of automated teller machines (ATMs) within Hong Kong involving VPower Finance Security (Hong Kong) Limited (“VPower”) are authorized through 12:01 a.m. eastern standard time, November 12, 2024.

 

(b) All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the provision and staffing of customer service centers for mass transit railway stations within Hong Kong involving VPower are authorized through 12:01 a.m. eastern standard time, November 12, 2024.

 

 

General License 5P:

 

(a) On or after November 12, 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.

 

https://ofac.treasury.gov/recent-actions/20240812 and

https://ofac.treasury.gov/media/933101/download?inline and

https://ofac.treasury.gov/media/933106/download?inline

 

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August 15, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned several companies, individuals, and vessels for their involvement in the shipment of Iranian commodities, including oil and liquefied petroleum gas (LPG), to Yemen and the United Arab Emirates (UAE) on behalf of the network of Iran-based, Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF)-backed Houthi financial official Sa’id al-Jamal.  OFAC is also updating the Specially Designated Nationals and Blocked Persons List (SDN List) entry for the sanctioned vessel ARTURA (IMO: 9150365), which was responsible for shipping commodities for Sa’id al-Jamal, to reflect the changing of its name to OHAR.

The revenue from al-Jamal’s network helps finance the Houthis’ reckless targeting of shipping in the Red Sea and civilian infrastructure, which has led to grave consequences for both the region and the international community.

 

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

 

  • Khot, Arif Ibrahim of India.

 

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

 

  • Arafat shipping company of the Marshall Islands;
  • DP Shipping Limited of the Marshall Islands:
  • K F D General Trading L.L.C. of the United Arab Emirates;
  • Kai Heng Long Global Energy Limited of China;
  • KDS Shipping Limited of the Marshall Islands;
  • ONX Trading FZE of the United Arab Emirates; and
  • Transmarine Navigation M SDN. BHD. Of Malaysia.

 

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

 

  • Divine Power (T8A4414) Chemical/Products Tanker Palau flag; Vessel Registration Identification IMO 9171357; MMSI 511101150 (vessel);
  • Fengshun H9ZK) LPG Tanker Eswatini flag; Vessel Registration Identification IMO 9007386; MMSI 374350000 (vessel);
  • Lady Liberty (3FTM2) LPG Tanker Sao Tome and Principe flag; Vessel Registration Identification IMO 9005065; MMSI 668116262 (vessel);
  • LPG OM (T8A4415) LPG Tanker Palau flag; Vessel Registration Identification IMO 9160475; MMSI 511101151 (vessel);
  • Parvati (3E3842) LPG Tanker Panama flag; Vessel Registration Identification IMO 8519966; MMSI 352002268 (vessel);
  • Raha Gas (T8A4761) LPG Tanker Palau flag; Vessel Registration Identification IMO 8818219; MMSI 511101405 (vessel); and
  • Victoria (S9Z6) LPG Tanker Sao Tome and Principe flag; Vessel Registration Identification IMO 9113379; MMSI 668116259 (vessel).

 

https://ofac.treasury.gov/recent-actions/20240815 and

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

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August 20, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the former President of Haiti, Michel Joseph Martelly (Martelly), pursuant to Executive Order (E.O.) 14059 of December 15, 2021, “Imposing Sanctions on Foreign Persons Involved in the Global Illicit Drug Trade.”

 

The following individual has been added to OFAC’s Non-SDN Menu-Based Sanctions List:

 

  • Martelly, Michel Joseph of Haiti.

 

https://ofac.treasury.gov/recent-actions/20240820

https://home.treasury.gov/news/press-releases/jy2542

 

*******

 

August 23, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 103 – “Authorizing Transactions Related to Imports of Certain Diamond Jewelry Prohibited by Executive Order 14068;” Russia-related General License 104 – “Authorizing Transactions Related to Imports of Certain Diamonds Prohibited by Executive Order 14068;” Russia-related General License 105 – “Authorizing Limited Safety and Environmental Transactions and the Unloading of Cargo Involving Certain Blocked Persons or Vessels;” Russia-related General License 106 – “Authorizing the Wind Down of Transactions Involving Certain Entities Blocked on August 23, 2024;” and Russia-related General License 107 – “Authorizing Limited Safety and Environmental Transactions Involving Certain Blocked Persons or Vessels.”

 

Additionally, OFAC issued one new, Russia-related Frequently Asked Question (FAQ 1189)

 

General License 103:

 

(a) All transactions prohibited by the determination of February 8, 2024 made pursuant to sections 1(a)(i)(A) and 1(a)(i)(D) of Executive Order 14068 (“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”) that are ordinarily incident and necessary to the importation and entry into the United States, including importation for admission into a foreign trade zone located in the United States, of diamond jewelry that was physically located outside of the Russian Federation prior to March 1, 2024, and not exported or reexported from the Russian Federation on or after March 1, 2024, are authorized.

 

General License 104:

 

(a) All transactions prohibited by the determination of February 8, 2024 made pursuant to section 1(a)(i)(B) of Executive Order (E.O.) 14068 (“Prohibitions Related to Imports of Certain Categories of Diamonds”) that are ordinarily incident and necessary to the importation and entry into the United States, including importation for admission into a foreign trade zone located in the United States, of the following categories of diamonds are authorized through 12:01 a.m. eastern daylight time, September 1, 2025, provided that the diamonds were physically located outside of the Russian Federation before, and were not exported or re-exported from the Russian Federation since:

 

(1) March 1, 2024 for non-industrial diamonds with a weight of 1.0 carat or greater; or

(2) September 1, 2024 for non-industrial diamonds with a weight of 0.5 carats or greater.

 

 

General License 105:

 

(a)  All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to one of the following activities involving White Fox Ship Management FZCO or any entity in which White Fox Ship Management FZCO owns, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern daylight time, October 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 (2) of this general license has a property interest (the “blocked vessels”);

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

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

 

(b) All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the delivery and offloading of cargo involving the blocked persons identified in paragraph (a) are authorized through 12:01 a.m. eastern daylight time, October 23, 2024, provided that the cargo was loaded prior to August 23, 2024.

 

General License 106:

 

(a) 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, October 9, 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) General Technology Group Dalian Machine Tool Import & Export Co Ltd;

(2) Public Joint Stock Company Yakutskaya Toplivno Energeticheskaya Kompaniya (YATEC);

(3) Joint Stock Company Holdingovaya Kompaniya SDS Ugol;

(4) Public Joint Stock Company Ugolnaya Kompaniya Yuzhnyi Kuzbass;

(5) Joint Stock Company Stroiservis;

(6) Guangzhou Chiphome Information Technology Limited;

(7) Chengdu Jingxin Technology Co Ltd;

(8) Shenzhen Huashuo Semiconductor Co Ltd;

(9) AirBridgeCargo Airlines Limited Liability Company;

(10) Speech Technology Center Limited;

(11) Idronaut S.R.L.;

(12) GRK Bystrinskoye;

(13) Aktsionernoe Obshchestvo Evraz Nizhnetagilski Metallurgicheski Kombinat (NTMK);

(14) Aktsionernoe Obshchestvo Evraz Vanadi Tula;

(15) Aktsionernoe Obshchestvo Evraz Market;

(16) Limited Liability Company Volga Dnepr Airlines;

(17) Atran Limited Liability Company; or

(18) 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.

 

General License 107:

 

(a) 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, October 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 (2) of this general license has a property interest (the “blocked vessels”);

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

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

 

(b) The authorization in paragraph (a) of this general license 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) Ocean Speedstar Solutions OPC Private Limited; or

(2) Zara Shipholding Co.

 

FAQ 1189:

 

Q: What additional authorizations did Treasury issue on August 23, 2024 with respect to certain diamonds and diamond jewelry prohibited by Executive Order (E.O.) 14068?

 

A: Treasury issued two general licenses (GLs), GL 103 and GL 104, authorizing certain transactions with respect to certain diamonds and diamond jewelry that would otherwise be prohibited by E.O. 14068 in “Prohibitions Related to Imports of Certain Categories of Diamonds” (the “Diamonds Determination”) and “Prohibitions Related to the Imports of Diamond Jewelry and Unsorted Diamonds of Russian Federation Origin and Diamond Jewelry and Unsorted Diamonds Exported from the Russian Federation” (the “Diamond Jewelry and Unsorted Diamonds Determination”).

 

General License 103 authorizes the importation into the United States of diamond jewelry if that jewelry was physically located outside of the Russian Federation before, and not exported or reexported from the Russian Federation since, March 01, 2024. This means that the importation ban issued pursuant to the Diamond Jewelry and Unsorted Diamonds Determination under E.O. 14068 no longer applies to diamond jewelry that was located outside of Russia and not exported or reexported from Russia since March 01, 2024.

 

General License 104 authorizes through September 01, 2025 the importation into the United States of non-industrial diamonds, substantially transformed into other products outside of the Russian Federation, with a weight of 1.0 carat or greater, if those diamonds were physically located outside of the Russian Federation before, and not exported or reexported from the Russian Federation since, March 01, 2024. GL 104 also authorizes the importation into the United States of non-industrial diamonds, substantially transformed into other products outside of the Russian Federation, with a weight of 0.5 carats or greater if those diamonds were physically located outside of the Russian Federation before, and not exported or reexported from the Russian Federation since, September 01, 2024. This means that, for non-industrial diamonds that meet these parameters, the importation ban issued pursuant to the Diamonds Determination under E.O. 14068 no longer applies.

 

https://ofac.treasury.gov/media/933116/download?inline

https://ofac.treasury.gov/media/933121/download?inline

https://ofac.treasury.gov/media/933126/download?inline

https://ofac.treasury.gov/media/933131/download?inline

https://ofac.treasury.gov/media/933131/download?inline

https://ofac.treasury.gov/media/933136/download?inline

https://ofac.treasury.gov/faqs/1189 and

https://ofac.treasury.gov/recent-actions/20240823

 

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August 27, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) published one new, basic information Frequently Asked Question (FAQ 1190)

 

Q: Do U.S. sanctions target persons for engaging in political speech, religious practice, or other constitutionally protected activities?

 

A: OFAC does not sanction persons for their engagement in activities subject to U.S. constitutional protection, such as protected speech or religious practice or for their religious beliefs; nor do U.S. persons violate OFAC sanctions for engaging in such constitutionally protected activity. Furthermore, additional limitations and authorizations are in place to ensure that U.S. sanctions do not restrict the exchange of information or informational materials, or personal communication. The majority of OFAC sanctions programs are promulgated pursuant to the International Emergency Economic Powers Act, 50 U.S.C. 1701 et seq., which limits the authority to “regulate or prohibit, directly or indirectly . . . any postal, telegraphic, telephonic, or other personal communication, which does not involve a transfer of anything of value . . . or, the importation from any country, or the exportation to any country, whether commercial or otherwise, . . . of any information or informational materials.” 50 U.S.C. § 1702(b)(1), (3).

 

No authorization is necessary for U.S. persons to engage in activities that are not prohibited by or are otherwise exempt from sanctions. If you are concerned that potential sanctions may interfere with constitutionally protected activities, please reach out to OFAC for further guidance as described here.

 

https://ofac.treasury.gov/faqs/1190 and

https://ofac.treasury.gov/recent-actions/20240827

 

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AUGUST 2024 EXPORT CONTROL REGULATIONS UPDATES Read More »

JULY 2024 EXPORT CONTROL REGULATIONS UPDATES

This newsletter is a listing of the latest changes in export control regulations through July 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.

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

REGULATORY UPDATES

President

President Biden Continued the National Emergency with Respect to Hong Kong

July 10, 2024: On July 14, 2020, by Executive Order 13936, 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 situation with respect to Hong Kong.

The situation with respect to Hong Kong, including recent actions taken by the People’s Republic of China to fundamentally undermine Hong Kong’s autonomy, continues to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.  For this reason, the national emergency declared on July 14, 2020, must continue in effect beyond July 14, 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 13936 with respect to the situation in Hong Kong.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/07/10/notice-on-the-continuation-of-the-national-emergency-with-respect-to-hong-kong-4/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/

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President Biden Launches the Ukraine Compact

July 11, 2024: President Biden launched the Ukraine Compact at the 33rd NATO Summit in Washington D.C., an event with 23 allies and partners as part of the U.S. commitment to Ukraine’s long-term security. This Compact fulfills the promise President Biden and these countries made in Vilnius in 2023 to negotiate long-term bilateral security agreements with Ukraine to support Ukraine as it defends itself now, and to deter aggression against Ukraine in the future as part of its bridge to NATO membership. The signatories committed to providing Ukraine with ammunition, weapons, and training to resist Russian aggression. Leveraging each of the agreements, this historic Compact creates a unified and comprehensive security architecture to support Ukraine today and, in the future, in war and in peace.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/07/11/president-joe-biden-launches-the-ukraine-compact/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/page/4/

*******

President Biden Continued the National Emergency with Respect to Hostage-Taking and the Wrongful Detention of United States Nationals Abroad.

On July 16, 2022, by Executive Order 14078, President Biden 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 hostage-taking and the wrongful detention of United States nationals abroad.

Hostage-taking and the wrongful detention of United States nationals are heinous acts that undermine the rule of law.  Terrorist organizations, criminal groups, and other malicious actors who take hostages for financial, political, or other gain — as well as foreign states that engage in the practice of wrongful detention, including for political leverage or to seek concessions from the United States — threaten the integrity of the international political system and the safety of United States nationals and other persons abroad.  Hostage-taking and the wrongful detention of United States nationals abroad 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 in Executive Order 14078 of July 19, 2022, must continue in effect beyond July 19, 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 14078 with respect to hostage-taking and the wrongful detention of United States nationals abroad.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/07/16/letter-to-the-speaker-of-the-house-and-president-of-the-senate-on-the-continuation-of-the-national-emergency-with-respect-to-hostage-taking-and-the-wrongful-detention-of-united-states-nationals-abroad/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/page/3/

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

Proposed Rule: Revisions to Definition of Defense Services and Enhancement

July 25, 2024: 89 Fed. Reg. 60980: On July 29, 2024, the Department of State published in the Federal Register a proposed rule to revise the definition of defense service and the scope of related controls in the International Traffic in Arms Regulations (ITAR).

The Department of State undertook a review of the definition of defense service in the ITAR (ITAR 120.32). This review focused on identifying activities of U.S. persons that (1) provide a critical military or intelligence advantage such that they warrant control under the ITAR and are activities that are not currently subject to the ITAR; or (2) are controlled under the ITAR, but the current control language would benefit from additional clarity. Following the review, the Department of State proposes a revised definition of defense service to better describe existing controls and the scope of activities it would regulate through the revised definition and proposes certain additions to the ITAR’s United States Munitions List (“USML”).

Included in this proposal is specific language regarding the furnishing of intelligence-related assistance that is not directly related to a defense article to certain types of foreign persons (i.e., a foreign unit, force, or government) or their proxies or agents. The Department of State assessed that these activities warrant and require control equivalent to those of intelligence-related defense articles since such assistance (including training or consulting) similarly furnishes a critical military or intelligence advantage to the foreign person. Review of such activity by the Department of State for consistency with U.S. foreign policy and national security interests is necessary prior to any furnishing of such services. Further, the inclusion of the activities in this proposed rule is reflective of the stated aims of AECA § 38(a)(2) (22 U.S.C. 2778(a)(2)) and principles in the United States Conventional Arms Transfer Policy.

First, a proposed revision would amend the definition of defense services at § 120.32(a)(1) by revising the list of regulated activities currently found in (a)(1) to include “assistance, including training or consulting, to foreign persons in the development (including, e.g., design), production (including, e.g., engineering and manufacture), assembly, testing, repair, maintenance, modification, disabling, degradation, destruction, operation, processing, use, or demilitarization of a defense article.” This revised list moves several activities currently individually specified in (a)(1) (i.e., design, engineering, and manufacture) into parentheticals following defined terms in which they are included. Those activities were folded into the revised definitions of “production” and “development” at § 120.43 by a recent ITAR rule (87 FR 16396, Mar. 23, 2022).

In addition, the revised list of activities includes two new references, “disabling” and “degradation.” The Department of State proposes these terms to make explicit that the act of harming a military capability through the disabling or degradation of defense articles via any method remains controlled. In assessing non-traditional methods of disrupting a nation’s military capabilities during its review, the Department of State noted that, while the current definition of defense service includes such activities, advances in technology that facilitate such activities merit explicit reference. The proposed revision clarifies that cyber services, or any other activities, that disable and degrade defense articles, but fall short of total destruction or demilitarization, are included within the definition of defense service at § 120.32(a)(1).

The Department of State also proposes a clarifying addition to the introductory text of paragraph (a)(1) to better describe the scope of activities controlled by the definition. In describing the assistance covered by the paragraph, the Department of State proposes to replace the parenthetical “(including training)” with a new clause clarifying that assistance includes training or consulting. In so doing, the Department of State does not intend to add a new level of control to its existing control of defense services, but rather intends to clarify that it does not treat training to mean only direct instructional activity. The proposed addition would reaffirm that providing the tools or means of furnishing training to a foreign person so that the foreign person may conduct training in lieu of the regulated person is included in the control. Such consulting is not limited to the furnishing of a completed product ,but includes assisting in the development of such training.

Second, the proposed amendments would remove § 120.32(a)(2) from the definition of defense service as redundant since the furnishing of technical data to a foreign person is already a controlled event described in §§ 120.50 through 120.52. Further, the proposed amendments would remove current paragraph (a)(3). In their stead, these two provisions are replaced by a proposed new paragraph (a)(2) that directs persons to the USML where descriptions of services to be controlled under ITAR are provided. The Department of State includes a proposed note to § 120.32 directing the regulated community to the new location.

Specifically, the proposed paragraph (a)(2) directs persons to two new proposed USML entries in Category IX that would control defense services related to intelligence and military assistance. The proposed entries differ from the type of defense services described in paragraph (a)(1), which directly relate to defense articles and already have corresponding entries in each USML category (e.g., Category I(i), Category II(k), etc.).

The two new entries are proposed for 2 reserved paragraphs of USML Category IX, and the category is proposed to be renamed “Military Training Equipment, Intelligence Defense Services, and Military Defense Services” to more accurately describe the controls in the category. The Department proposes to reserve new paragraph (s)(1) for use as a future entry and to place the new controls in proposed paragraphs (s)(2) and (3) within that category. For purposes of this preamble, the intelligence assistance controlled by paragraph (s)(2) is referred to as “intelligence assistance” and the military and paramilitary assistance controlled by paragraph (s)(3) are referred to by the singular “military assistance.”

The introductory text of proposed new USML Category IX(s)(2) describes defense services relating to intelligence assistance that do not necessarily involve defense articles. Following the introductory control text of proposed USML Category IX(s)(2), subsequent paragraphs would provide specified carve-outs to the general description of activities described in paragraph (s)(2). Similar carve-out provisions are also proposed to the military assistance control in USML Category IX(s)(3). The Department of State determined that rather than relying solely on the definition of defense service, it would be better to direct users to the USML to conduct their classification analysis since this approach is similar to how users currently conduct defense article classification analysis, and it allows for a more detailed articulation of certain specific activities meriting ITAR control. Moreover, AECA § 38(a)(1) (22 U.S.C. 2778(a)(1)) provides that defense services, like defense articles, are to be designated on the USML. By adding specific entries in addition to the existing USML paragraphs controlling defense services, including those furnished in connection with a defense article, the Department of State brings additional clarity to the regulations. Further to that effort, the Department of State proposes to amend § 120.11, which describes the order of review, to include a proposed paragraph (d) specific to defense services and to redesignate current paragraph (d) as paragraph (e).

As to the objective of the proposed additions to the USML, the Department of State determined revised and clarified controls are warranted and necessary to address the risks to U.S. national security and foreign policy interests posed by U.S. persons furnishing assistance in intelligence activities. In particular, the Department of State determined that certain intelligence activities that do not involve defense articles provide a critical military or intelligence advantage such that they warrant and require revised controls under the ITAR.

The proposed USML Category IX(s)(3) describes defense services relating to military assistance that do not necessarily involve defense articles and provides specified carve-outs to the controls. Persons furnishing certain military assistance to foreign persons can cause local and regional instability in a manner equal to or greater than the supply of a tangible article or weapon to a foreign person end-user. The proposed inclusion of certain specific forms of military assistance as a defense service within the USML is intended to provide U.S. persons with clear notice that such activities require authorization as, depending on the circumstances, the activities may be counter to U.S. national security or foreign policy interests, the stated aims of AECA § 38(a)(2) (22 U.S.C. 2778(a)(2)), Conventional Arms Transfer Policy objectives, or shared interests with our allies and partners.

To ensure that the military assistance controls are consistent with ITAR § 120.3(b) and only control those activities that provide a critical military or intelligence advantage, the proposed controls described in USML Category IX(s)(3) would regulate a higher level of support than front-line combatant activities. The Department of State notes, however, that although not intended for control in proposed Category IX(s)(3), such activities may be otherwise regulated by other provisions in the ITAR, or by regulations administered by other agencies of the U.S. Government. In conjunction with the addition of this proposed USML entry, the Department of State is proposing to remove the existing USML entry for military training at current Category IX(e)(3). In so doing, the Department does not intend to narrow the scope of what is controlled by that existing military training entry, but rather aims to bring additional clarity to that control as part of new text proposed as Category IX(s)(3).

See the following links for the full text of the proposed rule including the USML additions:

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

https://www.federalregister.gov/public-inspection/2024-16501/international-traffic-in-arms-regulations-revisions-to-definition-and-controls-related-to-defense

 

DDTC Name And Address Changes Posted To Website

July 25 through July 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 Name from Babcock Land Limited to Babcock Land Defence Limited due to internal corporate restructuring;
  • Change in Address for Landes High End Machining b.v. from Magelhaenstraat 15, 7825VL, Emmen, Netherlands to Maxwellstraat 31, 7825 GA, Emmen, Netherlands;
  • Change in Name from Air Liquide advanced Technologies to Aerospace & Defense Oxygen Systems due to corporate restructuring;
  • Change in Name from Safran Data Systems to Safran Defense & Space, Inc due to corporate restructuring.
  • Change in Name from SeaTec Consulting Inc. to Oliver Wyman Government Services LLC due to merger;
  • Change in Address for Metrea Management Limited, MAFX UK Limited, Metrea Discovery Partners Limited, and Metrea Discovery Partners Holding 1 Limited from Third Floor, O’Gorman House, 37 Ixworth Place, London, SW3 3QH, United Kingdom to Third Floor, The Aircraft Factory, 100 Cambridge Grove, London, W6 0LE, United Kingdom;
  • Change in Name from Ferranti Technologies Limited to ESUK Aerospace and Simulation Limited due to corporate rebranding;
  • Change in Name from CASS Professional Services, Corp. dba Metrea Strategic Mobility to Metrea Strategic Mobility Inc. due to corporate rebranding;
  • Change in Name from Teledyne FLIR Surveillance, Inc. to Teledyne FLIR Defense, Inc., due to corporate rebranding;
  • Change in Name from Airbus Helicopters International Services to Airbus International Services DAC due to corporate rebranding;
  • Change in Name and Address from Assistance Aéronautique et Aérospatiale SAS, 10 rue Mercoeur, 75011 Paris, France to Daher Industrial Services SAS at Immeuble BELAÏA, 7 avenue de l’Union, F-94390 ORLY, FRANCE, due to merger;
  • Change in Name from Ayesa Air Control Ingenieria Aeronautica, S.L. to Alten Soluciones Productos Auditoria E Ingenieria SAU due to merger; and
  • Change in Address for ATEXIS France from 10/12 Boulevard Pythagore, 13127 Vitrolles, France to 14 Draille Des Tribales, 13127 Vitrolles, France, and all other locations in France.
  • Change in Name from Rafaut SAS to ARESIA-Villeneuve due to merger.
  • Change in Name from Alkan SAS to ARESIA-Valenton due to merger.
  • Change in Address for Metrea Simulations AB formerly at Stora Skondals Vag 9, Skondal 128 63, Sweden to Metrea Simulations AB at Luntmakargatan 66, 113 51 Stockholm, Sweden
  • Change in Name from Globes Elektronik GmbH & Co KG to Milexia Deutschland GmbH due to merger.

Please note the DDTC website was revamped on 7/31/2024 and the name and address announcements are now found under a tab “Amending Authorizations”.

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DDTC FAQs

On March 25, 2024, DDTC published a short series of Frequently Asked Questions regarding joint ventures and how those contractual arrangements affect an exporter’s DDTC registration. The following are a few of the key points from the FAQs.

  • DDTC views joint ventures as separate legal entities, rather than as a subsidiary or affiliate of the parties to the joint venture agreement. If the entity formed from a joint venture will be engaging in military or defense related activities that are subject to the ITAR, the joint venture entity must separately incorporate and register with DDTC.
  • If a DDTC registered entity enters into a joint venture that results in 50% or more ownership of the new entity, the joint venture must be added to the registrant’s existing DDTC registration as a subsidiary. The same rule applies even if it is a foreign incorporated joint venture. Alternatively, if the DDTC registered entity owns less than 50% of the joint venture but is responsible for managing the day-to-day operations of the joint venture, then the joint venture entity would still be added to the existing DDTC registration and listed as a controlled affiliate.
  • If a joint venture entity is equally owned (50/50) by two DDTC registered companies and control of business operations is also equally shared, then DDTC will consider other factors in deciding under which entity the joint venture will be registered, such as which of the registered entities is engaging in more ITAR specific activities or projects. If the joint venture is independently managed, then the joint venture entity must register with DDTC independently.
  • If a U.S. incorporated joint venture is managed by foreign persons but will be engaging in ITAR-controlled activities, a U.S. person must be appointed as a senior officer for the U.S. joint venture and the joint venture can then apply for independent DDTC registration. If no U.S. person is acting as a senior officer of the joint venture, then it cannot register with DDTC and cannot conduct ITAR-controlled activities.

https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_public_portal_faq_cat&topic=2a3d376cdb3bc30044f9ff621f961982&subtopic=d6ca9bd387054a909012a7d40cbb3598#d6ca9bd387054a909012a7d40cbb3598

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Department of Defense, Defense Security Cooperation Agency (DSCA)

DSCA Notifies Congress of Potential FMS Sale To the Czech Republic

July 17, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government the Czech Republic has requested to buy two hundred (200) Hellfire Air-to-Ground Missiles, AGM-114R; four (4) Hellfire Captive Air Training Missiles (CATM); and six hundred (600) WGU-59A/B Advanced Precision Kill Weapon System (APKWS) II (single variant). The following non-MDE (Major Defense Equipment) is also included: support equipment; dummy cartridge rounds; containers; training material; inert components; publications; repair of repairables; and training and technical support. The estimated total cost is $138.26 million. The principal contractors will be Lockheed Martin, located in Orlando, FL, and BAE Systems, Inc., located in Nashua, NH. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/czech-republic-hellfire-missiles-and-advanced-precision-kill-weapon and

https://www.dsca.mil/major-arms-sales/archive-date/202407

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DSCA Notifies Congress of Potential FMS Sale To Saudi Arabia

July 23, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Kingdom of Saudi Arabia has requested to buy follow-on logistics support and services, including for Joint Mission Planning Software (JMPS) hardware and support; KIV-77/78 cryptographic devices and support; spares and repair parts, consumables and accessories, and repair and return support; calibration support and test equipment; ground and personnel equipment; classified and unclassified software and software support, classified and unclassified publications and technical documentation; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support, in support of, but not limited to, KC-130J, C-130, E-3, RE-3, KE-3, KA 350, Bell 212, and Bell 412 aircraft. The estimated total program cost is $2.8 billion. There will be various contractors associated with the provision of equipment and services involved with this case, and there is no prime contractor. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/kingdom-saudi-arabia-system-logistics-and-sustainment-support and

https://www.dsca.mil/major-arms-sales/archive-date/202407

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DSCA Notifies Congress of Potential FMS Sale To Belgium

July 25, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Belgium has requested to buy up to one hundred ninety-six (196) Guided Bomb Unit (GBU)-53/B Small Diameter Bombs-Increment II (SDB-II) All-Up-Rounds (AURs). Also included are SDB-II Weapons Load Crew Trainers (WLCT); training aids and devices; spare and repair parts, consumables, accessories, and repair and return support; unclassified software delivery and support; unclassified publications and technical documentation; major modifications and maintenance support; training and training equipment; munitions support and support equipment; transportation support; studies and surveys; 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 $115 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/belgium-small-diameter-bomb-increment-ii and

https://www.dsca.mil/major-arms-sales/archive-date/202407

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DSCA Notifies Congress of Potential FMS Sale To Slovakia

July 31, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Slovakia has requested to buy twelve (12) AH-1Z attack helicopters; twenty-six (26) T-700 GE 401C engines (24 installed, 2 spares); one thousand six hundred eighty (1,680) Advanced Precision Kill Weapon Systems (APKWS), WGU-59/B; and fourteen (14) Honeywell embedded global positioning systems (GPS)/inertial navigation systems (INS) (EGIs) (12 installed, 2 spares). The following non-MDE items will also be included: support and test equipment; aircraft; weapons and munitions; countermeasures; integration and test support; spare and repair parts; communications equipment; mission planning; software delivery and support; Helmet Mounted Display System/Optimized TopOwl, Target Sight Systems and containers; technical refresh mission computers; ANVIS-9 night vision cueing displays; AN/ARC-210 Generation 6 receiver-transmitter 2036 radio equipment; AN/APX-123A identification friend or foe (IFF) Mode 5 mounting trays and batteries; cartridge actuated devices/propellant actuated devices (CAD/PADs); facilities and construction support; transportation; publications and technical documentation; personnel training and training equipment; countermeasures, including M299 launchers, LAU-61C/A and LAU-68F/A rocket launchers, M151 high explosive warheads for airborne 2.75 inch rockets; MK66 MOD 4, 2.75-inch rocket motors; WTU-1B warheads; M197 20 mm armament pod gun assemblies; 20 mm PGU-27A/B target practice rounds; 20 mm PGU-28A/B semi armor piercing high explosive incendiary rounds; AN/ALE-47 chaff and flare countermeasures system; MJU-32A/B and MJU-49B decoy flares; SMB875B/ALE flare simulators; RR-129A/AL chaff cartridges; RR-144A/AL training chaff cartridges; CCU-136A/A impulse cartridges; AN/AAR-47 missile warning system; AN/APR-39C radar warning receiver and conversion kits; KIV-78A cryptographic appliques; AN/PYQ-10C Simple Key Loader with KOV-21 cryptographic card; U.S. Government and contractor engineering; field service representative services; technical and logistical support services; studies and surveys; and other related elements of logistics and program support. The estimated total cost is $600 million. The principal contractors will be Bell Textron, located in Fort Worth, TX; and the General Electric Company, located in Lynn, MA. There are no known offset agreements in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/slovakia-ah-1z-attack-helicopters

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

BIS Releases New Edition of “Don’t Let This Happen to You!”

July 1, 2024: the Department of Commerce’s Bureau of Industry and Security (BIS) Export Enforcement published an updated version of “Don’t Let This Happen to You!”, a compendium of case examples highlighting BIS criminal and administrative enforcement efforts. The publication was last updated in March 2024.

The updated version includes new enforcement cases involving a voluntary self-disclosure by an academic institution, violations of the antiboycott regulations, firearms export violations, export violations related to China and Iran, and non-compliance with a BIS settlement agreement. Exporters are encouraged to review the publication, which provides useful illustrations of the type of conduct that gets companies and universities in trouble.

BIS Export Enforcement protects and promotes U.S. national security by aggressively investigating violations of export control and antiboycott regulations and by partnering with industry and academia to facilitate compliance with those regulations.

https://www.bis.gov/press-release/bis-releases-new-edition-dont-let-happen-you and

https://www.bis.gov/sites/default/files/files/DLTHTY%21_7-1-2024.pdf

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BIS Issues Guidance on Addressing Export Diversion Risks

July 10, 2024:  The Department of Commerce’s Bureau of Industry and Security (BIS) published guidance outlining the different actions that BIS takes to inform industry and academia about parties – beyond those identified on public screening lists like the Entity List – those present risks of diversion of items subject to BIS export controls to countries or entities of concern. The guidance also outlines certain responsibilities companies and universities must comply with BIS regulations, as well as additional steps they should take to mitigate diversion risks.

https://www.bis.gov/sites/default/files/files/Guidance-for-Complying-with-BIS-Letters-Identifying-Transaction-Parties-of-Diversion-Risk_v8.pdf and

https://www.bis.gov/press-release/bis-issues-guidance-addressing-export-diversion-risks

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BIS Sets Higher KYC Standards for Companies and Universities Over Russia Diversion Concerns 

July 10, 2024: The U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) released new guidance (the “July 10 Release”) outlining different types of precautionary letters (“supplier list” letters, “Project Guardian” requests, “red flag” letters, and “is informed” letters) that BIS may send to “companies and universities” to notify them of “parties of national security concern, such as those that present a risk of diverting [Export Administration Regulations (“EAR”)] items to restricted end uses or end users in Russia.

https://www.wilmerhale.com/en/insights/client-alerts/20240726-bis-sets-higher-kyc-standards-for-companies-and-universities-over-russia-diversion-concerns

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BIS Issues Statement on Export Controls and Restrictions Against Russia

July 15, 2024: As part of BIS’ regular consultations on export control cooperation, the European Commission hosted a meeting with counterparts from Japan, the United Kingdom and the United States on 10 July 2024, to discuss ongoing efforts to align and enhance export restriction measures imposed in response to Russia’s illegal invasion of Ukraine.

The swift, unprecedented and massive export restrictions that have been collectively imposed since February 2022 have been calculated and continuously adjusted over time to maximize their effect on Russia’s military industrial base. As Russia intensifies illicit procurement attempts, it must not be given access to those items needed to manufacture its weapons and supply its military —either directly from the coalition of partner nations, or indirectly through transshipment networks often involving non-sanctioning third countries. Companies that seek to profit from selling coalition commodities, software and technology into Russia do so at the collective’s expense.

The regulatory services for each government will continue to enhance and expand, as appropriate, regulatory requirements in light of information from the battlefield, in order to maintain the effectiveness of the measures placed. The national competent authorities will continue to hold those who violate the laws accountable.

BIS and its foreign government counterparts are grateful for the efforts of industry to devote appropriate resources to know their customers and counter the risks of illegal transshipment. BIS and Industry has collectively developed specific tools to support industry compliance, such as the Common High Priority List (CHPL) of battlefield items. BIS is also actively identifying companies associated with Russia’s military-industrial complex and involved in the circumvention of our measures. BIS will continue to issue public guidance to improve the reach and effect of our export restrictions imposed in response to Russia’s illegal invasion of Ukraine.

BIS encourages industry to take advantage of the significant information and guidance issued to improve its compliance screening. BIS calls on responsible exporters to improve export compliance systems and exercise enhanced due diligence. This includes making efficient use of sources such as public business registries, commercially available trade databases, and information collected by non-profit organizations to identify companies that present a high risk of future diversion. These would notably include companies with a prior record of diverting controlled items from any of the aligned export control systems to Russia.

The ability of industry to identify high-risk transactions can make a difference. The collective actions will be both complementary and coordinated so that BIS and counterparts continue to effectively address the ongoing threat to international security.

https://www.bis.gov/press-release/statement-export-controls-and-restrictions-against-russia and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

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BIS Announces Major Update to Participation in Global Standards Development

July 18, 2024: 89 Fed. Reg. 58265: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) published an interim final rule (IFR) amending the Export Administration Regulations (EAR) to reinforce the United States’ leadership and participation in global standards development, while continuing to prevent transfers of technology that harm our national security. This IFR ensures that U.S. companies can actively participate in the development of international standards without being unreasonably hindered by export controls and associated compliance concerns. Without the revisions to the EAR announced, there is greater risk that standards would be developed without the participation and input of U.S. companies, which harms U.S. national security.

Key updates include:

  • Revising the definition of standards-related activities to accurately reflect the U.S. model of public-private cooperation in standards to further global innovation and trade.
  • Clarifying the applicability of export controls to specific “software” and “technology” for “standards-related activity” to promote transparency and effectiveness in U.S. contributions to global standards.

In addition, this rule is essential in supporting ongoing efforts under the U.S. Government National Standards Strategy for Critical and Emerging Technology (USG NSSCET), which aims to enhance U.S. leadership in the development of standards for critical technologies. By facilitating easier participation, the rule advances U.S. interests in global technology standards, which are pivotal in shaping the future of industries and ensuring security benefits derived from technological advancements.

https://www.bis.gov/press-release/department-commerce-announces-major-update-us-leadership-global-standards-development and

https://www.whitehouse.gov/wp-content/uploads/2023/05/US-Gov-National-Standards-Strategy-2023.pdf

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BIS Expands The Scope of the Foreign Direct Product Rule Concerning Iran

July 24, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) implemented an expansion of controls on the export, reexport, or transfer (in-country) of certain foreign-produced items located in or destined to Iran, to address ongoing concerns regarding Iran’s potential use of U.S. technology in weapons systems.

This rule implements the requirements of the No Technology for Terror Act (the Act), which was passed in April as part of emergency supplemental appropriations for the current fiscal year. As required by the Act, the BIS rule expands the scope of the Export Administration Regulations’ (EAR) Iran Foreign Direct Product rule (FDPR). The expansion, effective July 23, 2024, is designed to further impede Iran’s ability to procure technology and components critical for military systems, including advanced drones that pose threats to U.S. forces and allies.

The expanded controls build upon existing restrictions on Iran that apply under the Iran FDPR by imposing licensing requirements for the export, reexport, and transfer (in-country) of additional foreign-produced items located in or destined to Iran and by adding a new end-user scope that targets transactions involving such items in which the Government of Iran is a party.

This rule reflects BIS’ efforts to ensure robust enforcement of export controls and to prevent the proliferation of weapons systems that threaten U.S. troops overseas or key allies.

https://www.bis.gov/press-release/iran-fdp-media-advisory and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

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BIS Proposes Restrictions on U.S. Persons’ Support for Foreign Military, Intelligence, and Security Services and Controls to Protect National Security and Human Rights

July 25, 2024: 89 Fed. Reg. 60985: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) published proposed rules seeking public comment on enhanced restrictions on exports, reexports, or support to military or intelligence end users and end uses in countries of concern, consistent with the Fiscal Year 2023 National Defense Authorization Act (NDAA). These rules complement proposed revisions, also published, regarding the scope of defense services controlled by the Department of State’s Directorate of Defense Trade Controls (DDTC) pursuant to the International Traffic in Arms Regulations (ITAR). BIS is seeking public comment on the proposed rules, which include expanding restrictions against exporting items to, or providing support for, military or intelligence services in countries of concern.

The specific controls proposed in these rules include:

  • S. Persons’ Activity Controls: Expanded restrictions on U.S. persons’ support activities regarding end uses and end users of concern, including facilitating the acquisition of certain foreign-origin items by military, intelligence, and security services of concern, as well as performing maintenance, repair, and overhaul of such foreign-origin items.
  • End-Use and End-User Controls: Expanded restrictions to apply to all items subject to the EAR when destined to the armed forces or national guard of countries subjected to a U.S. arms embargo as well as civilian or military intelligence agencies (e.,intelligence end users) of over 40 countries of concern. Such controls are also proposed to apply to all items on the Commerce Control List when destined to foreign-security end users (e.g., police and security agencies) or military-support end users (e.g., defense contractors) in countries subject to a U.S. arms embargo.
  • Item Controls: New restrictions on the export of certain facial recognition technologies that can enable mass surveillance to protect and promote human rights.

https://www.bis.gov/press-release/commerce-proposes-restrictions-us-persons-support-foreign-military-intelligence-and and

https://www.federalregister.gov/public-inspection/2024-16498/export-administration-regulations-crime-controls-and-expansionupdate-of-us-persons-controls and

https://www.federalregister.gov/public-inspection/2024-16496/end-use-and-end-user-based-export-controls-including-us-persons-activities-controls-military-and

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BIS Issues Standards-Related Activities and the Export Administration Regulations; Corrections

July 25, 2024: 89 Fed. Reg. 60302: On July 18, 2024, BIS published in the Federal Register the interim final rule (IFR), “Standards-Related Activities and the Export Administration Regulations” (89 FR 58265) that revised parts 734, 744 and 772 of the EAR. The revisions in the July 18, 2024, rule inadvertently reverted changes to part 744 that were amended in a final rule that BIS published on June 18, 2024 (89 FR 51644). This document corrects the inadvertent revisions introduced in the Federal Register on July 18, 2024, specifically to §§ 744.11, 744.16, and supplement no. 4 to part 744, to reintroduce language that was added in the June 18, 2024, rule that reflected the addition of paragraph (f) under § 744.16.

https://www.federalregister.gov/documents/2024/07/25/2024-16379/standards-related-activities-and-the-export-administration-regulations-corrections

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End-Use and End-User Based Export Controls, Including U.S. Persons Activities Controls: Military and Intelligence End Uses and End Users

July 29, 2024: 89 Fed. Reg. 60985: The Department of Commerce, Bureau of Industry and Security (BIS), seeks public comment on proposed changes to existing restrictions under the Export Administration Regulations (EAR) on military and intelligence end uses and end users and related U.S. persons activities controls, as well as the proposed addition of a military-support end-user control. These proposed revisions and additions to the EAR’s end-use, end-user, and “U.S. persons” activity controls would implement expanded Export Control Reform Act of 2018 (ECRA) authority to control certain “U.S. persons” activities under the EAR. Specific to the EAR’s “U.S. persons” activities controls, BIS is proposing amendments to control `support’ furnished by “U.S. persons” to military end users and military-production activities, as well as intelligence end users that are not otherwise already regulated under or prohibited by U.S. law. In addition, BIS is proposing to revise the definition of `support’ set forth in the EAR’s “U.S. person” activity control provision in response to requests by the public for clarification. The revisions and additions, along with clarifications, to end use, end user, and “U.S. persons” activity controls under the EAR, would further the national security and the foreign policy of the United States.

https://www.federalregister.gov/documents/2024/07/29/2024-16496/end-use-and-end-user-based-export-controls-including-us-persons-activities-controls-military-and

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 U.S. Census Bureau

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

July 1, 2024:

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

AES will accept shipments with outdated codes during a grace period for 30 days beyond the expiration date of June 30, 2024Reporting an outdated code after the 30-day grace period will result in a fatal error.

The ACE AESDirect 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:

https://www.census.gov/foreign-trade/aes/concordance.html

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     

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Tips on How to Resolve AES Response Messages

July 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:  531

Narrative:     Foreign/Domestic Origin Indicator Not Allowed For HH

Severity:       Fatal

Reason:        When the Export Information Code reported is HH for household goods, the Foreign/Domestic Origin Indicator is not allowed.

Resolution:  The Foreign/Domestic Origin Indicator should not be reported when the Export Information Code is HH for household goods.

Verify the Export Information Code and Foreign/Domestic Origin Indicator, correct the shipment and resubmit.

Response Code:  8W1

Narrative:     Shipping Weight/Quantity 1 Out of Range

Severity:       Verify

Reason:        For the reported Schedule B/HTS Number, the Shipping Weight/Quantity (1) ratio is outside of the expected range.

Resolution:  For a particular Schedule B/HTS Number reported, the shipping weight divided by the first quantity 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 Shipping Weight, Quantity 1, 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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Office of Foreign Assets Control (OFAC)

July 5, 2024: the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued its OFAC Guidance: Production Submission Standards, updating OFAC’s former data delivery standards.  This guidance provides technical and general guidance to persons submitting material to OFAC and applies primarily to persons providing responses to administrative subpoenas, requests for information, disclosures, and especially for submissions that may entail voluminous documentation.

https://ofac.treasury.gov/recent-actions/20240705

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July 8, 2024: OFAC issued updated Venezuela General License 40C, Authorizing Certain Transactions Involving the Exportation or Reexportation of Liquefied Petroleum Gas to Venezuela.

General License 40C:

All transactions related to the exportation or reexportation, directly or indirectly, of liquefied petroleum gas to Venezuela, involving the Government of Venezuela, Petróleos de Venezuela, S.A. (PdVSA), or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, that are prohibited by E.O. 13850 of November 1, 2018, as amended by E.O. 13857 of January 25, 2019, or E.O. 13884 of August 5, 2019, each as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized through 12:01 a.m. eastern daylight time, July 8, 2025.

This general license does not authorize:

Any payment-in-kind of petroleum or petroleum products; or

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

Effective July 8, 2024, General License No. 40B, dated July 10, 2023, is replaced and superseded in its entirety by this General License No. 40C.

https://ofac.treasury.gov/media/933001/download?inline

https://ofac.treasury.gov/recent-actions/20240708

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OFAC Basics Video Series – My Funds are Blocked, Now What?

July 12, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) released the second video in its “OFAC Basics” video series, “My Funds Are Blocked, Now What?” This video provides viewers with guidance on what it means when funds are blocked in connection with OFAC sanctions, as well as recommended steps for what to do if your funds have been blocked.

The “OFAC Basics” series serves as a companion series to the “Introduction to OFAC” series, available here. For more information on this video series, please see the blog post below:

https://ofac.treasury.gov/recent-actions/20240712_33 and

https://www.youtube.com/watch?v=rc8jvauiEtc and

https://ofac.treasury.gov/ofac-video-series

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Updates to OFAC Licensing Portal Application Status and Hotline

July 18, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) took additional steps to provide greater transparency and information to specific license applicants by providing more detailed updates regarding the status of their applications via the public Licensing Portal. Applicants will now receive one of ten following case statuses to better indicate where their application is in the processing timeline.

  • Received
  • Guidance Issued
  • Returned Without Action
  • Pending Management Review
  • Pending Interagency Review
  • Pending Treasury Coordination
  • Pending with Applicant
  • Approved
  • Denied
  • Closed

Concurrently, OFAC is implementing updates to the Licensing Division hotline, including updating menus and transitioning to a callback-only system. These changes are aimed at helping the public access the information they need faster, reducing call wait times, and improving the overall customer experience.

https://licensing.ofac.treas.gov/Apply/Introduction.aspx and https://ofac.treasury.gov/recent-actions/20240718_33

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July 22, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) released guidance addressing questions raised by recent legislation that extended the statute of limitations for violations of certain sanctions that the agency administers.  As explained in the guidance, OFAC may now commence an enforcement action for civil violations of International Emergency Economic Powers Act- or Trading with Enemy Act-based sanctions prohibitions within 10 years of the latest date of the violation if such date was after April 24, 2019.

https://ofac.treasury.gov/media/933056/download?inline and https://ofac.treasury.gov/recent-actions/20240722

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July 23, 2024: As part of implementing the historic Rebuilding Economic Prosperity and Opportunity for Ukrainians Act (the “REPO for Ukrainians Act”), the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued a new reporting requirement for financial institutions holding Russian sovereign assets. Pursuant to section 104(a) of the REPO for Ukrainians Act, all financial institutions at which Russian sovereign assets are located, and that know or should know of such assets, must provide notice of such assets to OFAC no later than August 2, 2024, or within 10 days of the detection of such assets, and can do so via OFAC’s new form.

As described in more detail in the full instructions and in the REPO for Ukrainians Act Report Form, financial institutions should not re-report information on Russian sovereign assets that was previously reported to OFAC. A notice of these reporting instructions will be published in the Federal Register.

https://home.treasury.gov/news/press-releases/jy2479 and

https://ofac.treasury.gov/media/933066/download?inline and

https://ofac.treasury.gov/media/933061/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

July 2, 2024: Douglas Edward Robertson, 56, of Olathe, Kansas, the former vice president of KanRus Trading Company Inc., pleaded guilty for his role in a years-long conspiracy to circumvent U.S. export laws by filing false export forms with the U.S. government and, after Russia’s unprovoked invasion of Ukraine in February 2022, continued to sell and export sophisticated and controlled avionics equipment to customers in Russia without the required licenses from the U.S. Department of Commerce.

As a result of the guilty plea, Robertson faces a statutory maximum penalty of five years in prison for the conspiracy count, 20 years in prison for each of the two Export Control Reform Act counts, and 20 years in prison for the money laundering count. A sentencing hearing is scheduled for October 3, 2024.

https://www.justice.gov/opa/pr/vice-president-kansas-company-pleads-guilty-crimes-related-scheme-illegally-export-us and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC 

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July 9, 2024: Nikolay Goltsev, 38, of Montreal, and Salimdzhon Nasriddinov, 53, of Brooklyn, New York, pleaded guilty to conspiracy to commit export control violations for their roles in a global procurement scheme on behalf of sanctioned Russian companies, including Russian military companies. Some of the electronic components shipped by the defendants were later found in seized Russian weapons platforms and signals intelligence equipment in Ukraine.

Goltsev and Nasriddinov are scheduled to be sentenced on Dec. 10 and Dec. 11, respectively. They each face a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

https://www.justice.gov/opa/pr/new-york-man-and-canadian-national-plead-guilty-multi-million-dollar-export-control-scheme and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

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July 16, 2024: 89 Fed. Reg. 57853: On April 9, 2021, in the U.S. District Court for the District of Arizona, Ruben Arnulfo Chavarin (“Chavarin”) was convicted of violating 18 U.S.C. 554(a). Specifically, Chavarin was convicted of smuggling ammunition from the United States to Mexico. As a result of his conviction, the Court sentenced Chavarin to 78 months of imprisonment, with credit for time served, three years of supervised release, a $100 special assessment and additional monetary penalties of $10,307.20.

https://www.federalregister.gov/documents/2024/07/16/2024-15619/in-the-matter-of-ruben-arnulfo-chavarin-1042-e-15th-street-douglas-az-85607-order-denying-export

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July 16, 2024: 89 Fed. Reg. 57852: On December 4, 2023, in the U.S. District Court for the Southern District of New York, Robert Wise (“Wise”) was convicted of violating 18 U.S.C. 371. Specifically, Wise was convicted of conspiring to commit international money laundering by using international wire transfers to conduct U.S. dollar transactions for the benefit of a sanctioned Russian oligarch. As a result of his conviction, the Court sentenced Wise to time served, two years of supervised release, with the first 12 months in home detention, and a $100,000 fine.

https://www.federalregister.gov/documents/2024/07/16/2024-15618/in-the-matter-of-robert-wise-145-cliff-avenue-pelham-ny-10803-order-denying-export-privileges

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July 17, 2024: 89 Fed. Reg 58103: In the U.S. District Court for the District of Arizona, Melanie Ann Espinoza (“Espinoza”) was convicted of violating 18 U.S.C. 554(a). Specifically, Espinoza was convicted of smuggling approximately 7,000 rounds of Wolf 7.62 x 39 caliber ammunition, 1,500 rounds of Wolf .223 caliber ammunition, 2,000 rounds of Wolf 9 mm caliber ammunition and 50 rounds of Magtech Super .38 ammunition. As a result of her conviction, the Court sentenced Espinoza to nine months of imprisonment, with credit for time served, three years of supervised release, and a $100 special assessment.

https://www.federalregister.gov/documents/2024/07/17/2024-15636/in-the-matter-of-melanie-ann-espinoza-6605-w-pasadena-ave-apt-3-glendale-az-85301-order-denying

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July 17, 2024: Maxim Marchenko was sentenced by U.S. District Judge Nelson S. Román to three years in prison for his role in procuring dual-use, military grade OLED micro-displays for Russian end users.  Marchenko previously pled guilty to money laundering and smuggling charges before U.S. Magistrate Judge Victoria Reznik on February 29, 2024.

In addition to the prison term, Marchenko, 52, a Russian citizen who resided in Hong Kong, was sentenced to three years of supervised release.

https://www.justice.gov/usao-sdny/pr/russian-international-money-launderer-sentenced-three-years-prison-illicitly-procuring and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

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July 17, 2024: 89 Fed. Reg. 58103: On December 14, 2023, in the U.S. District Court for the Southern District of New York, Charles McGonigal (“McGonigal”), was convicted of violating 18 U.S.C. 371. Specifically, McGonigal was convicted of conspiring to violate U.S. sanctions against Russia by going to work for a Russian oligarch whom he once investigated. As a result of his conviction, the Court sentenced McGonigal to 50 months in prison, three years of supervised release, a $100 special assessment and a fine of $40,000.

Pursuant to section 1760(e) of the Export Control Reform Act (“ECRA”),[1] the export privileges of any person who has been convicted of certain offenses, including, but not limited to, 18 U.S.C. 371, may be denied for a period of up to ten (10) years from the date of his/her conviction. 50 U.S.C. 4819(e). In addition, any Bureau of Industry and Security (“BIS”) licenses or other authorizations issued under ECRA, in which the person had an interest at the time of the conviction, may be revoked. Id.

https://www.federalregister.gov/documents/2024/07/17/2024-15637/in-the-matter-of-charles-mcgonigal-175-w-13th-street-apt-8g-new-york-ny-10011-order-denying-export

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July 22, 2024: Ray Hunt, also known as Abdolrahman Hantoosh, Rahman Hantoosh and Rahman Natooshas, 70, of Owens Cross Roads, Alabama, pleaded guilty to conspiracy to export U.S.-origin goods to the Islamic Republic of Iran in violation of trade sanctions.

Hunt pleaded guilty to a conspiracy charge and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

https://www.justice.gov/opa/pr/alabama-man-pleads-guilty-violating-iran-sanctions and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

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July 26, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $7,452,501 settlement with State Street Bank and Trust Company (State Street), a Massachusetts-based financial institution, on behalf of itself and its subsidiary, Charles River Systems, Inc. (Charles River).  State Street agreed to settle its potential civil liability for 38 apparent violations of OFAC’s Ukraine-/Russia-Related sanctions.  The apparent violations involved invoices that were redated or reissued by Charles River between 2016 and 2020 for certain customers who were subject to Directive 1 of Executive Order 13662, as well as certain payments outside of the applicable debt tenor accepted by Charles River from these customers.  The settlement amount reflects OFAC’s determination that the apparent violations were not voluntarily self-disclosed and were egregious.

https://ofac.treasury.gov/media/933081/download?inline and https://ofac.treasury.gov/media/933076/download?inline

Sanctions

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

July 1, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a Mexico-based money launderer and China-based members of a money laundering organization with criminal links to the Sinaloa Cartel as part of ongoing efforts to disrupt the flow of illicit narcotics into the United States. This action is the result of the U.S. government’s ongoing efforts, in cooperation with the Mexican government, to disrupt the trafficking of fentanyl and save lives — a priority under the President’s Unity Agenda. The action furthers efforts by Treasury’s Counter-Fentanyl Strike Force, which leverages Treasury’s unique expertise and capabilities to disrupt the illicit financial networks relied upon by the cartels.

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

  • Acosta Ovalle, Diego of Mexico;
  • He, Jiaxuan of China; and
  • Tong, Peiji of China.

https://ofac.treasury.gov/recent-actions/20240701

https://ofac.treasury.gov/recent-actions?page=2

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June 10, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 13J, “Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024.”

General License 13J:

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, October 9, 2024.

This general license does not authorize:

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

Any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR, unless separately authorized.

Effective July 10, 2024, General License No. 13I, dated April 12, 2024, is replaced and superseded in its entirety by this General License No. 13J.

https://ofac.treasury.gov/media/933006/download?inline and https://ofac.treasury.gov/recent-actions/20240710

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July 11, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Tren de Aragua, a Venezuela-based transnational criminal organization that is expanding throughout the Western Hemisphere and engaging in diverse criminal activities, such as human smuggling and trafficking, gender-based violence, money laundering, and illicit drug trafficking.

The following individuals have been added to OFACs SDN List:

  • Ben Haim, Reut of Israel;
  • Manne, Isachar of Israel; and
  • Sarid, Aviad Shlomo of Israel.

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

  • Hamohoch Farm of the West Bank;
  • Lehava of Israrel;
  • Manne Farm Outpost of the West Bank;
  • Meitarim Farm of the West Bank;
  • Neriya’s Farm of the West Bank;
  • Tren de Aguara of Venezuela, Colombia, Chile, Peru, Ecuado, Brazil, Bolivia, Panama, United States.

https://ofac.treasury.gov/recent-actions/20240711 and https://ofac.treasury.gov/recent-actions

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July 16, 2024:  The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned three Mexican accountants and four Mexican companies linked, directly or indirectly, to timeshare fraud led by the Cartel de Jalisco Nueva Generacion (CJNG). Concurrently, the Financial Crimes Enforcement Network (FinCEN) issued a Notice, jointly with OFAC and FBI, to financial institutions that provides an overview of timeshare fraud schemes in Mexico associated with CJNG and other Mexico-based transnational criminal organizations.

 

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

  • Arredondo Pinzon, Griselda Margarita of Mexico;
  • Foubert Cadena, Xeyda Del Refugio of Mexico; and
  • Sanchez Martinez, Emiliano of Mexico.

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

  • Bona Fide Consultores FS S.A.S., of Mexico;
  • Constructora Sandgris, S. DE R.L. DE C.V., of Mexico;
  • Pacifica Axis Real Estate, S.A. DE C.V., of Mexico; and
  • Realty & Maintenance BJ, S.A. DE C.V. of Mexico.

https://home.treasury.gov/news/press-releases/jy2465 and https://ofac.treasury.gov/media/933016/download?inline= and https://ofac.treasury.gov/recent-actions/20240716

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July 18, 2024: The Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the Abdul Karim Conteh Human Smuggling Organization (Karim HSO), a transnational criminal organization (TCO) based in Tijuana, Mexico. Human smuggling is a federal crime in which criminals smuggle noncitizens into the United States, as well as transport and harbor noncitizens already in the country illegally, all in deliberate violation of U.S. immigration laws. Together with Department of Homeland Security and Department of Justice components, and other U.S. and foreign partners, OFAC targets these networks to disrupt their finances and illicit profits and ultimately dismantle their operations, which threaten the national security of the United States,

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

  • Conteh, Abdul Karim of Mexico;
  • Kamara, Issa of Mexico;
  • Pidoukou, Pasaman Francis Marin Abee of Mexico; and
  • Roblero Pivaral, Veronica of Mexico.

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

  • Abdul Karim Conteh Human Smuggling Organization of Mexico;

https://home.treasury.gov/news/press-releases/jy2470 and https://ofac.treasury.gov/recent-actions/20240718

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July 18, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated and identified as blocked property a dozen persons and vessels, respectively, that have played a critical role in financing the Houthis’ destabilizing regional activities as part of the network of Sa’id al-Jamal. This action included Indonesia-based Malaysian and Singaporean national Mohammad Roslan Bin Ahmad and People’s Republic of China (PRC)-based Chinese national Zhuang Liang, who have facilitated illicit shipments and engaged in money laundering for the network. Sa’id al-Jamal’s network continues to provide tens of millions of dollars in revenue to the Houthis in Yemen through its shipment of Iranian commodities, including oil, a funding stream underpinning the Houthis’ ongoing attacks against commercial shipping in the Red Sea. This action targets numerous aspects of this illicit network across the spectrum of its operations, from clients and facilitators to insurance providers, vessels, and ship management firms.

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

  • Bin Ahmad, Mohammad Rosland of Indonesia; and
  • Zhuang, Liang of China.

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

  • Alpha Shine Marine Services L.L.C of the United Arab Emirates;
  • Ascent General Insurance Company of Thailand;
  • Barco Ship Management Inc, of the United Arab Emirates;
  • Fornacis Energy Trading Co. L.L.C of the United Arab Emirates; and
  • Sea Knot Shipping Inc. of the Marshall Islands.

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

  • Kasper, Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9293143; (vessel);
  • Mirova Dynamic, Crude Oil Tanker Unknown flag; Vessel Registration Identification IMO 9237618 (vessel);
  • Oceanic II, Products Tanker Hong Kong flag; Vessel Registration Identification IMO 9275995 (vessel);
  • Tirex, Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9203772 (vessel); and
  • Wanji, Chemical/Products Tanker Panama flag; Vessel Registration Identification IMO 9215103 (vessel).

https://ofac.treasury.gov/recent-actions/20240718 and https://ofac.treasury.gov/recent-actions?page=0

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July 19, 2024: The United States designated Yuliya Vladimirovna Pankratova (Pankratova) and Denis Olegovich Degtyarenko (Degtyarenko), two members of the Russian hacktivist group Cyber Army of Russia Reborn (CARR) for their roles in cyber operations against U.S. critical infrastructure. These two individuals are the group’s leader and a primary hacker, respectively.

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

  • Degtyarenko, Denis Olegovich of Russia; and
  • Pankratova, Yuliya Vladimirovna.

https://home.treasury.gov/news/press-releases/jy2473 and https://ofac.treasury.gov/recent-actions/20240719

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July 23, 2024: The United States has taken action against a network of three individuals associated with the expanded activities of the Islamic State of Iraq and Syria (ISIS) on the African continent. These individuals serve as key financiers and trusted operatives, enabling the activities of ISIS and its leaders across Central, Eastern, and Southern Africa. They also serve as critical links between far-flung ISIS operations, including ISIS affiliates in the Democratic Republic of the Congo (DRC), Mozambique, Somalia, and ISIS cells in South Africa, allowing ISIS leadership to leverage each affiliate’s capabilities to conduct terrorist attacks that undermine peace and security in the region.

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

  • Gangat, Zayd of South Africa;
  • Nabagala, Hamidah of the Democratic Republic of the Congo; and
  • Swalleh, Abubakar of South Africa.

https://ofac.treasury.gov/recent-actions/20240723 and https://home.treasury.gov/news/press-releases/jy2477

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July 23, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two Mexican members of Cartel de Jalisco Nueva Generacion (CJNG) and two Mexican companies. CJNG, a Mexico-based criminal organization, is one of the largest producers and traffickers of illicit fentanyl to the United States. OFAC coordinated this action with the Government of Mexico, including its financial intelligence unit, La Unidad de Inteligencia Financiera (UIF), as well as U.S. Government partners, including the U.S. Attorney’s Office for the Central District of California, the Drug Enforcement Administration, Homeland Security Investigations, and Internal Revenue Service – Criminal Investigations.

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

  • Banuelos Ramires, Jaun Carlos of Mexico; and
  • Rivera Ibarra Gerardo of Mexico.

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

  • Fornely Lab S.A. DE C.V. of Mexico; and
  • Inmobiliaria Universal DEJA VU S.A. DE C.V. of Mexico.

https://ofac.treasury.gov/recent-actions/20240723 and https://home.treasury.gov/news/press-releases/jy2478

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July 24, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a network of six individuals and five entities based in the People’s Republic of China (PRC), involved in the procurement of items supporting the Democratic People’s Republic of Korea’s (DPRK) ballistic missile and space programs. In flagrant violation of multiple United Nations (UN) Security Council Resolutions (UNSCR), the DPRK has continued to conduct launches using ballistic missile technology, including a recent failed effort to place a military satellite into orbit in late May 2024. Moreover, the DPRK has supplied ballistic missiles to the Russian Federation, which continues to target civilian population centers and infrastructure in Ukraine, sustaining Russia’s brutal and unprovoked war.

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

  • Chen, Tianxin of China;
  • Du, Jiaxin of China;
  • Han, Dejian of China;
  • Shi, Anhui of China;
  • Shi, Qianpei of China; and
  • Wang, Dongliang of China.

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

  • Beijing Jinghua Qidi Electronic Technology Co., LTD. of China;
  • Beijing Sanshuda Electronics Science And Technology Co., LTD.
  • Qidong Hengcheng Electronics Factory of China;
  • Shenzen City Mean Well Electronics Co., LTD. of China; and
  • Yidatong Tianjin Metal Materials Co., LTD.

https://home.treasury.gov/news/press-releases/jy2482 and https://ofac.treasury.gov/recent-actions/20240724

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July 25, 2024: The Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the Lopez Human Smuggling Organization (Lopez HSO), a transnational criminal organization (TCO) based in Guatemala. Human smuggling is a federal crime that includes bringing migrants into the United States illegally, as well as unlawfully transporting and harboring migrants already in the country. Working with Department of Homeland Security (DHS) components and other U.S. and foreign partners, OFAC sanctions aim to disrupt and ultimately dismantle these networks’ operations, which threaten the national security of the United States.

 

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

  • Hernandez Vanegas, Karen Stefany of Guatemala;
  • Lopez Ambrosio, Whiskey Hans of Guatemala; and
  • Lopez Escobar, Ronaldo Galindo of Guatemala.

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

  • Lopez Human Smuggling Organization of Guatemala

https://ofac.treasury.gov/recent-actions/20240725 and https://ofac.treasury.gov/media/933071/download?inline=

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July 25, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on the Congo River Alliance, known by its French name Alliance Fleuve Congo (AFC), a coalition of rebel groups that seeks to overthrow the government of the Democratic Republic of Congo (DRC) and is driving political instability, violent conflict, and civilian displacement. The principal member of AFC is the U.S.- and UN-sanctioned March 23 Movement (M23), an armed group with a long history of destabilizing the DRC’s North Kivu province and perpetrating human rights abuses. OFAC is also targeting individuals and entities associated with AFC, including Bertrand Bisimwa, the president of M23; Twirwaneho, an AFC-affiliated armed group in the DRC’s South Kivu province; and Charles Sematama, a commander and deputy military leader of Twirwaneho.

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

  • Bismwa, Bertrand of The Democratic Republic Republic of the Congo; and
  • Sematama, Charles of The Democratic Republic of the Congo.

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

  • Congo River Alliance of The Democratic Republic of the Congo; and
  • Twirwanheo of The Democratic Republic of the Congo.

https://ofac.treasury.gov/recent-actions/20240725 and https://ofac.treasury.gov/recent-actions?page=0

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July 30, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) targeted five individuals and seven entities based in Iran, the People’s Republic of China (PRC), and Hong Kong that have facilitated procurements on behalf of subordinates of Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL). Those designated procure various components, including accelerometers and gyroscopes, which serve as key inputs to Iran’s ballistic missile and unmanned aerial vehicle (UAV) program. Iran’s acquisition of critical missile and UAV components continues to enable its proliferation of weapons systems to its proxies in the Middle East and to Russia.

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

  • Abdollahi, Mohammad of Iran;
  • Hashemi, Sayyed Ali Seraj of Iran;
  • Javar, Saeed Hamidi of Iran;
  • Sorbani, Ezzatullah Ghasemian of Iran; and
  • Tong, Thomas Ho Ming of China.

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

  • Azmoon Pajohan Hesgar Limited Liability Company of Iran;
  • Bright Shore Inc Limited of China;
  • BTW International Limited of China;
  • Buy Best Electronic Pars Company of Iran;
  • Cloud Element Company Limited of China;
  • Shenzhen Rion Technology Co., Ltd. of China; and
  • Tas Technology Company Limited of China.

https://home.treasury.gov/news/press-releases/jy2510 and https://ofac.treasury.gov/recent-actions?page=0

 

JULY 2024 EXPORT CONTROL REGULATIONS UPDATES Read More »

JUNE 2024 EXPORT CONTROL REGULATIONS UPDATES

This newsletter is a listing of the latest changes in export control regulations through June 30, 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.

 

Check out our newly added LICENSING TIPS SECTION

 

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

persons denied export privileges by the United States Government.

 

REGULATORY UPDATES

President

 

President Biden Continued The National Emergency with Respect to Belarus

 

June 13, 2024: On June 16, 2006, by Executive Order 13405, 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 and foreign policy of the United States constituted by the actions and policies of certain members of the Government of Belarus and other persons to undermine Belarus’s democratic processes or institutions, manifested in the fundamentally undemocratic March 2006 elections; to commit human rights abuses related to political repression, including detentions and disappearances; and to engage in public corruption, including by diverting or misusing Belarusian public assets or by misusing public authority.

 

The actions and policies of certain members of the Government of Belarus and other persons, and the Belarusian regime’s harmful activities and long-standing abuses, continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.  For this reason, the national emergency declared in Executive Order 13405, which was expanded in scope in Executive Order 14038, must continue in effect beyond June 16, 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 13405.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/06/13/notice-on-the-continuation-of-the-national-emergency-with-respect-to-belarus-3/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/

 

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President Biden Continued The National Emergency with Respect to North Korea

 

June 13, 2024: On June 26, 2008, by Executive Order 13466, the President declared a national emergency with respect to North Korea 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 and foreign policy of the United States constituted by the existence and risk of the proliferation of weapons-usable fissile material on the Korean Peninsula.  The President also found that it was necessary to maintain certain restrictions with respect to North Korea that would otherwise have been lifted pursuant to Proclamation 8271 of June 26, 2008, which terminated the exercise of authorities under the Trading With the Enemy Act (50 U.S.C. App. 1 et seq.) with respect to North Korea.

 

The existence and risk of the proliferation of weapons-usable fissile material on the Korean Peninsula and the actions and policies of the Government of North Korea 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 in Executive Order 13466, expanded in scope in Executive Order 13551, addressed further in Executive Order 13570, further expanded in scope in Executive Order 13687, and under which additional steps were taken in Executive Order 13722 and Executive Order 13810, must continue in effect beyond June 26, 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 13466 with respect to North Korea.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/06/13/notice-on-the-continuation-of-the-national-emergency-with-respect-to-north-korea-4/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/

 

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President Biden Continued The National Emergency with Respect to the Western Balkans

 

June 13, 2024: On June 26, 2001, by Executive Order 13219, the President declared a national emergency with respect to the Western Balkans 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 and foreign policy of the United States constituted by the actions of persons engaged in, or assisting, sponsoring, or supporting, (i) extremist violence in the former Republic of Macedonia (what is now the Republic of North Macedonia) and elsewhere in the Western Balkans region, or (ii) acts obstructing implementation of the Dayton Accords in Bosnia or United Nations Security Council Resolution 1244 of June 10, 1999, in Kosovo.  The President subsequently amended that order in Executive Order 13304 of May 28, 2003, to take additional steps with respect to certain actions that obstruct implementation of, among other things, the Ohrid Framework Agreement of 2001 relating to Macedonia (what is now the Republic of North Macedonia).

 

The actions of persons threatening the peace and international stabilization efforts in the Western Balkans, including acts of extremist violence and obstructionist activity, and the situation in the Western Balkans, which stymies progress toward effective and democratic governance and full integration into transatlantic institutions, continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.  For this reason, the national emergency declared in Executive Order 13219, under which additional steps were taken in Executive Order 13304, and which was expanded in scope in Executive Order 14033, must continue in effect beyond June 26, 2024.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden is continued for 1 year the national emergency declared in Executive Order 13219 with respect to the Western Balkans.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/06/13/notice-on-the-continuation-of-the-national-emergency-with-respect-to-the-western-balkans-4/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/

 

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

 

Annual Report to Congress On Direct Commercial Sales Authorizations to Foreign Countries and International Organizations for Fiscal Year 2023

 

June 3, 2024: The Department of State provided it’s annual report to Congress on direct commercial sales. This report documents defense articles and defense services licensed for permanent export under Section 38 of the Arms Export Control Act (AECA), 22 U.S.C. 2778, to each foreign country and international organization during fiscal year (FY) 2023, in response to the requirements in Section 655(b)(3) of the Foreign Assistance Act (FAA) of 1961, as amended. The Department of Defense will report International Military Education and Training activities separately.

 

The report specifies the aggregate dollar value and quantity of defense articles, and defense services, authorized to each foreign country and international organization during the fiscal year, as well as data on the actual shipments of those licensed transactions. The actual-shipment data shows the total dollar value of all shipments that were authorized and exported during the fiscal year to each destination. Authorizations in this report are categorized based on the destination country. Authorizations applicable to multiple countries in the appendix are included under the designation “Various.” Documentation for shipping purposes requires a definitive destination be declared. Accordingly, actual shipments for those articles approved under the designation “Various” are attributed to the country listed on the shipping documentation.

 

The reported value of authorizations for defense articles and defense services does not correlate precisely to the value of articles actually transferred during the reporting period. The reasons for this are as follows: Most licenses issued for defense articles are valid for four years and may be used throughout the four years to execute authorized transactions. Similarly, manufacturing license and technical assistance agreements cover a wide range of programmatic activities for multi-year periods (generally exceeding the four-year validity period of defense-article export licenses). Export authorizations furnished in FY 2023 also include certain activities occurring in prior years, because the scope of the Department’s regulatory authority over such agreements continues for as long as these multi-year agreements remain in effect.

 

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=1707b48697e24a140083b3b0f053af31 and

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=6b07b48697e24a140083b3b0f053af34

 

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Department of State Sanctions Israeli Group for Disrupting and Destroying Humanitarian Aid to Civilians

 

June 14, 2024: The Department of State designated Tzav 9, a violent extremist Israeli group that has been blocking, harassing, and damaging convoys carrying lifesaving humanitarian assistance to Palestinian civilians in Gaza.  For months, individuals from Tzav 9 have repeatedly sought to thwart the delivery of humanitarian aid to Gaza, including by blockading roads, sometimes violently, along their route from Jordan to Gaza, including in the West Bank.  They also have damaged aid trucks and dumped life-saving humanitarian aid onto the road.   On May 13, 2024, Tzav 9 members looted and then set fire to two trucks near Hebron in the West Bank carrying humanitarian aid destined for men, women, and children in Gaza.

 

The provision of humanitarian assistance is vital to preventing the humanitarian crisis in Gaza from worsening and to mitigating the risk of famine.  The Government of Israel has a responsibility to ensure the safety and security of humanitarian convoys transiting Israel and the West Bank enroute to Gaza. The U.S. Government will not tolerate acts of sabotage and violence targeting this essential humanitarian assistance. As such, the U.S. Government will continue to use all tools at our disposal to promote accountability for those who attempt or undertake such heinous acts, and expects and urges that the Israeli authorities do the same.

 

https://www.state.gov/sanctioning-israeli-group-for-disrupting-and-destroying-humanitarian-aid-to-civilians/

 

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Renewal of Defense Trade Advisory Group Charter

 

June 21, 2024: 89 Fed. Reg. 50661: The Department of State announces the renewal of the Charter for the Defense Trade Advisory Group (DTAG) for another two years. The DTAG advises the Department on its support for and regulation of defense trade to help ensure the foreign policy and national security of the United States continue to be protected and advanced, while helping to reduce unnecessary impediments to legitimate exports in order to support the defense requirements of U.S. friends and allies. It is the only Department of State advisory committee that addresses defense trade related topics. The DTAG will remain in existence for two years after the filing date of the Charter unless terminated sooner. The DTAG is authorized by the Federal Advisory Committee Act.

 

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

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=054111f347b242907ddc0c03e16d43ea and

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=4d4111f347b242907ddc0c03e16d43ed

 

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Statutory Debarment Under the Arms Export Control Act and the International Traffic in Arms Regulations

 

June 25, 2024: 89 Fed. Reg. 53172: The Department of State has imposed statutory debarment under the International Traffic in Arms Regulations (ITAR) on persons convicted of violating, or conspiracy to violate, the Arms Export Control Act (AECA).

 

Pursuant to section 38(g)(4) of the AECA and section 127.7(b) and (c)(1) of the ITAR, the following persons, having been convicted in a U.S. District Court, are denied export privileges, and are statutorily debarred as of the date of this notice:

 

  • Akem, Roger;
  • Al Eyani, Fares Abdo;
  • Bangarie, Tse Ernst;
  • Chang En-Wei, Eric;
  • Fonguh, Wilson Che;
  • Mancho, Godlove;
  • Nevidomy, Vladimir;
  • Ngang, Edith;
  • Ngomanji, Anye Collins;
  • Nji, Eric Fru;
  • Panchernikov, Igor;
  • Roggio, Ross;
  • Sendino, Luis Guillermo;
  • Sery, Dror of California;
  • Micharl, Tamufor Nchumuluh; and
  • Tita, Wilson Nuyila.

 

https://www.federalregister.gov/documents/2024/06/25/2024-13878/statutory-debarment-under-the-arms-export-control-act-and-the-international-traffic-in-arms and

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

 

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Department of State Imposes Sanctions on Lions Den

 

June 26, 2024: The Department of State is imposing sanctions on “Lions’ Den,” a militant Palestinian group centered in Nablus’s Old City in the West Bank.

 

In October 2022, Lions’ Den claimed responsibility for several drive-by shootings in the Nablus area.  Lions’ Den members opened fire at Israeli vehicles driving close to the nearby settlement of Elon Moreh, injuring a taxi driver and damaging vehicles.  In a separate attack, numerous shots were fired toward the West Bank settlement of Har Bracha.  In September 2022, Lions’ Den fighters injured and killed Palestinian civilians during clashes between Palestinian fighters and Palestinian Authority Security Forces in Nablus.  In April 2024, Palestinian media reported that Lions’ Den fighters targeted Israeli forces with small arms at an Israeli checkpoint in Nablus.

 

The United States condemns all acts of violence committed in the West Bank, whoever the perpetrators, and we will use the tools at our disposal to expose and hold accountable those who threaten peace and stability there.

 

https://www.state.gov/sanctioning-violent-palestinian-group-in-the-west-bank/

 

 

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Department of Defense, Defense Security Cooperation Agency (DSCA)

 

DSCA Notifies Congress of Potential FMS Sale To the Taipei Economic and Cultural Representative Office in the United States (TECRO)

 

June 5, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Taipei Economic and Cultural Representative Office In the United States (TECRO) has requested to buy non-standard spare and repair parts, components, consumables, and accessories for F-16 aircraft; 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 $80 million.

 

https://www.dsca.mil/press-media/major-arms-sales/taipei-economic-and-cultural-representative-office-united-states-f-0

 

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DSCA Notifies Congress of Potential FMS Sale To the Taipei Economic and Cultural Representative Office in the United States (TECRO)

 

June 5, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Taipei Economic and Cultural Representative Office In the United States (TECRO) has requested to buy standard spare and repair parts, components, consumables, and accessories for F-16 aircraft; 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 $220 million.

 

https://www.dsca.mil/press-media/major-arms-sales/taipei-economic-and-cultural-representative-office-united-states-f-1

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DSCA Notifies Congress of Potential FMS Sale to Denmark

 

June 7, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Denmark has requested to buy eighty-four (84) AIM-120C-8 Advanced Medium-Range Air-to-Air Missiles (AMRAAM) and three (3) AIM-120 AMRAAM guidance sections. Also included is the following non-MDE: spare AMRAAM control sections; containers and support equipment; munitions support and support equipment; spare parts, consumables, accessories, and repair and return support; weapons software and support equipment; classified software delivery and support; transportation support; classified publications and technical documentation; studies and surveys; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $215.5 million. The principal contractor will be RTX Corporation, located in Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

 

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

 

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DSCA Notifies Congress of Potential FMS Sale to Norway

 

June 11, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Norway has requested to buy three hundred (300) AIM-120C-8 Advanced Medium-Range Air-to-Air Missiles (AMRAAM) and twenty (20) AIM-120C-8 AMRAAM guidance sections. Also included is the following non-MDE: AMRAAM containers and support equipment; spare parts, consumables, accessories, and repair and return support; weapons software, support equipment, and classified software delivery and support; transportation support; classified publications and technical documentation; training; studies and surveys; 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 $1.94 billion.  The principal contractor will be RTX Corporation, located in Tucson, AZ. 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/norway-aim-120c-8-advanced-medium-range-air-air-missiles

 

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DSCA Notifies Congress of Potential FMS Sale to The Netherlands

 

June 13, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of the Netherlands has requested to buy one-hundred seventy-four (174) Advanced Medium-Range Air-to-Air Missiles-Extended Range (AMRAAM-ER) and four AMRAAM-C8 guidance sections. Also included is the following non-MDE: AMRAAM containers, load trainers, control section spares and support equipment; KGV-135A cryptographic devices; Common Munition Built-in-Test (BIT)/Reprogramming Equipment (CMBRE); ADU-891 Adaptor Group Test Sets; integration and test support and equipment; munitions support and support equipment; spare parts, consumables, and accessories, and repair and return support; classified software delivery and support; classified and unclassified publications, and technical documentation; personnel training and training equipment; studies and surveys; Contractor Logistics Support (CLS); 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 $678 million. The principal contractor will be RTX Corporation, located in Camden, AR. The purchaser typically requires offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

 

https://www.dsca.mil/press-media/major-arms-sales/netherlands-advanced-medium-range-air-air-missiles-extended-range

 

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DSCA Notifies Congress of Potential FMS Sale To the Taipei Economic and Cultural Representative Office in the United States (TECRO)

 

June 18, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Taipei Economic and Cultural Representative Office In the United States (TECRO) has requested to buy seven hundred twenty (720) Switchblade 300 (SB300) All Up Rounds (AURs) (includes 35 fly-to-buy AURs) and one hundred one (101) SB300 fire control systems (FCS). The following non-Major Defense Equipment will also be included: first line spares packs; operator manuals; operator and maintenance training; logistics and fielding support; Lot Acceptance Testing (LAT); U.S. Government technical assistance, including engineering services, program management, site surveys, facilities, logistics, and maintenance evaluations; quality assurance and de-processing team; field service representative(s); transportation; and other related elements of logistics and program support. The estimated total cost is $60.2 million. The principal contractor will be AeroVironment, Inc., located in Simi Valley, CA. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/taipei-economic-and-cultural-representative-office-united-states-34

 

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DSCA Notifies Congress of Potential FMS Sale To the Taipei Economic and Cultural Representative Office in the United States (TECRO)

 

June 18, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Taipei Economic and Cultural Representative Office In the United States (TECRO) has requested to buy the following non-MDE: up to 291 ALTIUS 600M-V systems, comprised of an Unmanned Aerial Vehicle (UAV) loitering munition with extensible warhead and electro-optical/infrared (EO/IR) camera; ALTIUS 600 inert training UAVs; Pneumatic Integrated Launch Systems (PILS); PILS transport trailers; ground control systems; associated support, including spares; battery chargers; operator and maintenance training; operator, maintenance, and training manuals; technical manuals; logistics and fielding support; testing; technical assistance CONUS and OCONUS, including for engineering services; program management; site surveys; facility, logistics and maintenance evaluations; quality assurance and de-processing team support; field service representative support; transportation; and other related elements of logistics and program support. The estimated total cost is $300 million. The principal contractor will be Anduril, located in Atlanta, GA. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/taipei-economic-and-cultural-representative-office-united-states-34

 

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

 

Department of Commerce Announces Additional Export Restrictions to Counter Russian Aggression

 

June 12, 2024: In advance of the G7 Summit on June 12, and in concert with the Department of the Treasury and the Department of State, the Commerce Department’s Bureau of Industry and Security (BIS) announced several significant additional export control restrictions and related actions against Russia to further degrade its ability to continue waging war against Ukraine. These actions underscore the Biden-Harris Administration’s unwavering commitment to countering Russian aggression and its illegal, unjustified, and unprovoked war in Ukraine.

 

Key actions include:

 

  1. Cracking down on diversion through shell companies;
  1. Further cutting off exports of business software that enable Russian and Belarusian defense industries;
  1. Restricting trade in more items destined to Russia and Belarus;
  1. Tightening the availability of license exceptions for Russia and Belarus;
  1. Cutting off trade to foreign companies through the Entity List;
  1. Issuing Temporary Denial Orders (TDO), which cuts off not only the right to export items subject to the Export Administration Regulations (EAR) from the U.S., but also to receive or participate in exports from the U.S. or reexports of items subject to the EAR;
  1. Restricting distributors and transhippers.

 

https://www.bis.gov/press-release/department-commerce-announces-additional-export-restrictions-counter-russian and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

 

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BIS Updates Boycott Requester List

 

June 27, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) published its first quarterly update of the boycott Requester List. This list notifies companies, financial institutions, freight forwarders, individuals, and other U.S. persons of potential sources of certain boycott-related requests they may receive during the regular course of business.

 

The updated public list of entities from the countries listed below who have been identified as having made a boycott-related request in reports received by BIS includes 57 additions. BIS has also removed 127 entities. The list is posted on the Office of Antiboycott Compliance (OAC) webpage link with the objective of helping U.S. persons comply with the reporting requirements of the antiboycott regulations set forth in Part 760 of the Export Administration Regulations (EAR), 15 CFR Parts 730-774.

The countries included on the boycott requestor list are:

  • Bangladesh
  • Malaysia
  • Saudi Arabia
  • Qatar
  • United Arab Emirates
  • Oman
  • Kuwait
  • Bahrain
  • Norway
  • India
  • Pakistan
  • Japan
  • Algeria
  • Afghanistan
  • Singapore
  • Brazil
  • Hong Kong
  • United Kingdom
  • Turkey
  • Iraq
  • Switzerland
  • Libyan Arab Jamahirya

https://www.bis.gov/press-release/bis-updates-boycott-requester-list and

https://www.bis.gov/sites/default/files/files/OAC%20Requester%20List%20June%202024.pdf

 

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U.S. Census Bureau

Tips on How to Resolve AES Response Messages

June 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: 123

Narrative:     Conveyance Name Missing

Severity:       Fatal

Reason:        The Conveyance Name/Carrier Name is missing when the Mode of Transportation is one that requires the Conveyance Name/Carrier Name to be reported.

Resolution:  The name of the transport conveyance must be reported on an EEI for the major modes of transportation (i.e., vessel, air, rail, truck).  For Vessel shipments, report the name of the vessel; for Air, Rail, or Truck shipments report the carrier name.

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

Fatal Error Response Code: 138

Narrative:     Port of Unlading Missing

Severity:       Fatal

Reason:        The Port of Unlading Code is missing.  All vessel shipments, and any air shipments between the United States and Puerto Rico must provide a Port of Unlading Code.

Resolution:  The Port of Unlading Code is the foreign port where the exported merchandise is unloaded from the exporting carrier.  Report a valid Port of Unlading Code for all vessel shipments, and any air shipments between the United States and Puerto Rico.

Verify the Port of Unlading Code, correct the shipment and resubmit.

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.

 

LICENSING TIPS

 

Department of State licensing:

  • DDTC policy – Letters of Intent may not exceed $2Million dollars
  • DDTC Policy – Limited Defense Service licensing is generally limited to 6 months
  • DDTC licensing – The ultimate end platform must be specified in the specific purpose block. You must identify exactly where the item being exported or reexported will ultimately be used
  • Do not use the Government of XXXXX, as the end user, you must list the specific government agencies, i.e. Ministry of Defense

 

Department of Commerce licensing:

  • 748P applications for firearm-related transactions
  • Purchase order dated within one year of submission for license applications to destinations outside of Country Group A: 1,
  • Passport or other national identity card information for applications to export or reexport to individual end users (natural persons) outside of Country Group A:1.
  • Import certificate or import permit from the ultimate destination, if that destination requires one, per Section 748.12.

 

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

 

June 3, 2024: the Department of Commerce’s Bureau of Industry and Security (BIS) imposed a civil penalty of $44,750 against Airbus DS Government Solutions Inc. (ADSGS), a satellite communications and networking systems company located in Plano, Texas, to resolve three violations of the antiboycott provisions of the Export Administration Regulations (EAR), as alleged in BIS’s Proposed Charging Letter.  ADSGS voluntarily self-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.

 

https://www.bis.gov/press-release/bis-imposes-penalty-texas-company-airbus-ds-government-solutions-inc-resolve-alleged and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

 

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June 12, 2024: An indictment was returned on June 11, 2024 in the District of Alaska charging Sergey Nefedov, 40, of Anchorage, Alaska, and Mark Shumovich, 35, of Bellevue, Washington, with allegedly operating a scheme to illegally export nearly half a million dollars’ worth of snowmachines and associated parts from the United States to Russia without the required licenses and approvals, in violation of U.S. export laws. Nefedov and Shumovich were arrested yesterday morning in Alaska and Washington, respectively.

 

Authorities seized all snowmachines related to this case. Nefedov and Shumovich are charged with the following offenses, which carry associated maximum penalties as follows: conspiracy to unlawfully export goods from the U.S. and defraud the U.S. (5 years in prison); false electronic export information activities (5 years in prison); smuggling (10 years in prison); unlawful export without a license in violation of the Export Control Reform Act (20 years in prison); and conspiracy to commit international money laundering (20 years in prison). Nefedov is also charged with money laundering and making a false statement in violation of the Export Control Reform Act of 2018, which both carry maximum penalties of 20 years in prison. The defendants face a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

 

https://www.justice.gov/usao-ak/pr/two-russia-born-us-citizens-arrested-conspiring-send-500000-worth-luxury-goods-russia?fbclid=IwZXh0bgNhZW0CMTAAAR05HAJN-2f9wjR9CjBObw5ff4hwFOUz7GlN8-0zv03LDnd0mZZE43o9ZSI_aem_AU80safIpkI-MfyfHXMjAvd3PgMuSjmuWScqi7RF1xjTMbArz1sUaSwKnalwisYjNXRT9lli_7nT3Wvi1-krCz1v and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

 

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June 13, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) imposed a civil penalty of $285,000 against Sapphire Havacilik San Ltd. STI (Sapphire), an aviation company headquartered in Ankara, Türkiye, to resolve violations of the Export Control Reform Act of 2018 (ECRA) alleged in BIS’s Proposed Charging Letter.  As described in the Settlement Agreement and Proposed Charging Letter, in October 2023 and in January 2024, Sapphire flew private charter flights involving a U.S.-origin Gulfstream aircraft into Russia without a required BIS license.

 

The U.S. Department of Commerce, through BIS, responded to the Russian Federation’s further invasion of Ukraine by implementing a sweeping series of stringent export controls that severely restrict Russia’s access to technologies and other items, including luxury goods.  As part of those controls, effective February 24, 2022, BIS imposed expansive controls on aviation-related items to Russia, including a license requirement for the export, reexport, or transfer (in-country) to Russia of any aircraft or aircraft parts specified under any export control classification number.

 

https://www.bis.gov/press-release/bis-imposes-285000-penalty-against-sapphire-havacilik-san-ltd-sti-resolve-alleged and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

 

 

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June 17, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) has imposed a three-year denial order against USGoBuy LLC of Portland, Oregon, prohibiting USGoBuy from participating in all exports under BIS jurisdiction from the United States. BIS activated this denial order—originally included as a suspended penalty pursuant to a 2021 settlement agreement with USGoBuy that resolved previous alleged violations of the Export Administration Regulations (EAR)—due to USGoBuy’s continued violations of the EAR and failure to address its past compliance failures.

 

USGoBuy is a package forwarding company that allows non-U.S.-based customers to purchase items online from U.S. retailers and have those items shipped to the company’s warehouse in Oregon. USGoBuy then consolidates and re-packages the items for export from the United States.

 

https://www.bis.gov/press-release/commerce-department-denies-export-privileges-package-forwarding-company-usgobuy and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

 

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June 17, 2024: 89 Fed. Reg. 51302: 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: Alexey Sumchenko (“Sumchenko”), Anna Shumakova (“Shumakova”), Branimir Salevic (“Branimir”), Danijela Salevic (“Danijela”); SkyTechnic, Skywind International Limited (“Skywind”), Hong Fan International (“Hong Fan”), Lufeng Limited (“Lufeng”), Unical dis Ticaret Ve Lojistik LSC (“Unical”), and Izzi Cup DOO (“Izzi Cup”) (collectively, the “Respondents”).

 

OEE’s request and related information indicate that these parties are located in the Russian Federation, Hong Kong, the British Virgin Islands, Turkey, Serbia, and Indonesia at the respective addresses listed on the caption page of this order. OEE’s request and related information further indicates that SkyTechnic, a Russian aircraft parts supplier, has developed and continues to utilize a network of Hong Kong-based shell companies, including Skywind, Hong Fan, and Lufeng, to obtain civil aircraft parts from the United States and obfuscate the ultimate end users of those parts in Russia, contrary to the requirements of the Export Administration Regulations.

 

https://www.federalregister.gov/documents/2024/06/17/2024-13258/order-temporarily-denying-export-privileges

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June 17, 2024: 89 Fed. Reg 51305: 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: Turboshaft FZE (“Turboshaft”), Treetops Aviation (“Treetops”), Black Metal FZE (“Black Metal”), Timur Badr, and Elaine Balingit (collectively, the “Respondents”). OEE’s request and related information indicate that the parties are located in the United Arab Emirates (“UAE”), at the respective addresses listed on the caption page of this order, and that Badr, a Russian national, owns or controls Turboshaft FZE and Treetops Aviation.

 

https://www.federalregister.gov/documents/2024/06/17/2024-13257/order-temporarily-denying-export-privileges

 

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June 20,2024: A Fort Smith, Arkansas man, Neil Ravi Mehta, age 32, was sentenced to 57 months in federal prison followed by three years of supervised release and ordered to pay $659,825.52 in restitution, on one count of Possession of an Unregistered Firearm that was a Destructive Device, one count of Fraud and False Statements related to Tax Returns, and one count of False Declaration Before a Court.

 

In a separate case, Federal Armament LLC, which was owned by Neil Ravi Mehta, was sentenced to five years of probation and ordered to pay a fine of $500,000.00 on one count of Unlawfully Importation and Receipt of Firearms and one count of Filing False or Misleading Electronic Export Information. Federal Armament LLC was also ordered to forfeit the illegally imported firearms.

 

 

https://www.justice.gov/usao-wdar/pr/fort-smith-arms-dealer-neil-ravi-mehta-and-his-company-federal-armament-llc-sentenced

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June 24, 2024: As part of a settlement agreement, the Department of Commerce’s Bureau of Industry and Security (BIS) issued an order imposing an administrative penalty on Indiana University (IU) related to exports by IU’s Bloomington Drosophila Stock Center (BDSC).

 

This settlement resolves the allegations set forth in a Proposed Charging Letter (PCL) regarding 42 violations related to the export of fruit flies genetically modified to produce a subunit of a controlled toxin. These exports went to numerous research institutions and universities worldwide without the required export licenses. IU voluntarily disclosed the conduct to BIS, cooperated with the investigation by BIS’s Office of Export Enforcement (OEE), and took remedial measures after discovering the conduct at issue, which resulted in a significant reduction in the penalty.

 

https://www.bis.gov/press-release/bis-settles-alleged-export-control-violations-indiana-university and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

 

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Sanctions

 

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

 

Implementation of Additional Sanctions Against Russia and Belarus Under the Export Administration Regulations (EAR) and Refinements to Existing Controls

 

June 18, 2024: 89 Fed. Reg. 51644: The Department of Commerce’s Bureau of Industry and Security (BIS) made changes to the Russia and Belarus sanctions under the Export Administration Regulations (EAR). This final rule imposes additional export control measures against Russia and Belarus by expanding the scope of items identified under two EAR supplements that are subject to the EAR’s Russian and Belarusian industry sector sanctions; imposing a “software” license requirement for certain EAR99-designated “software” when destined to or within Russia or Belarus; and narrowing the scope of commodities and software that may be authorized for export, reexport, or transfer (in-country) to or within Russia or Belarus under License Exception Consumer Communications Devices (CCD).

 

To promote clarity and facilitate compliance, this final rule also consolidates the EAR’s Russian and Belarus sanctions into a single section, while maintaining the existing related regulatory supplements identifying items that are subject to certain of those sanctions. This final rule also amends the EAR by adding five entities and eight addresses to the Entity List and making changes to the Entity List structure. These entries are listed on the Entity List under the destinations of the People’s Republic of China (China) and Russia and have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. Lastly, this final rule makes two additional revisions to the EAR: one to confirm the criteria used when revising, suspending, or revoking EAR license exceptions and one revision to clarify the control status of fasteners for purposes of the EAR’s Russian and Belarusian industry sector sanctions.

 

https://www.federalregister.gov/documents/2024/06/18/2024-13148/implementation-of-additional-sanctions-against-russia-and-belarus-under-the-export-administration

 

 

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June 20, 2024:  The Department of Commerce’s Bureau of Industry and Security (BIS) announced a Final Determination prohibiting Kaspersky Lab, Inc., the U.S. subsidiary of a Russia-based anti-virus software and cybersecurity company, from directly or indirectly providing anti-virus software and cybersecurity products or services in the United States or to U.S. persons. The prohibition also applies to Kaspersky Lab, Inc.’s affiliates, subsidiaries and parent companies (together with Kaspersky Lab, Inc., “Kaspersky”).

 

This action is the first of its kind and is the first Final Determination issued by BIS’s Office of Information and Communications Technology and Services (OICTS), whose mission is to investigate whether certain information and communications technology or services transactions in the United States pose an undue or unacceptable national security risk. Kaspersky will generally no longer be able to, among other activities, sell its software within the United States or provide updates to software already in use. The full list of prohibited transactions can be found at oicts.bis.gov/kaspersky.

In addition to this action, BIS added three entities—AO Kaspersky Lab and OOO Kaspersky Group (Russia), and Kaspersky Labs Limited (United Kingdom)—to the Entity List for their cooperation with Russian military and intelligence authorities in support of the Russian Government’s cyber intelligence objectives.

 

This Final Determination and Entity Listing are the result of a lengthy and thorough investigation, which found that the company’s continued operations in the United States presented a national security risk—due to the Russian Government’s offensive cyber capabilities and capacity to influence or direct Kaspersky’s operations—that could not be addressed through mitigation measures short of a total prohibition.

 

Individuals and businesses that utilize Kaspersky software are strongly encouraged to expeditiously transition to new vendors to limit exposure of personal or other sensitive data to malign actors due to a potential lack of cybersecurity coverage. Individuals and businesses that continue to use existing Kaspersky products and services will not face legal penalties under the Final Determination. However, any individual or business that continues to use Kaspersky products and services assumes all the cybersecurity and associated risks of doing so.

 

In order to minimize disruption to U.S. consumers and businesses and to give them time to find suitable alternatives, the Department’s determination will allow Kaspersky to continue certain operations in the United States—including providing anti-virus signature updates and codebase updates—until 12:00AM Eastern Daylight Time (EDT) on September 29, 2024.

 

https://www.bis.gov/press-release/commerce-department-prohibits-russian-kaspersky-software-us-customers and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

 

*******

June 24, 2024: 89 Fed. Reg. 52362: In this rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding 3 entries to the Entity List, under the destinations of Russia (2), and the United Kingdom (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.

 

The following entries have been added to the Entity List:

 

Russia

  • AO Kaspersky Lab; and
  • OOO Kaspersky Group.

 

United Kingdom

  • Kaspersky Labs Limited.

 

https://www.federalregister.gov/documents/2024/06/24/2024-13695/additions-to-the-entity-list

 

*******

 

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

 

Syrian Sanctions Regulations

 

June 6, 2024: 89 Fed. Reg. 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) adopted a final rule amending the Syrian Sanctions Regulations to, among other things, implement the relevant provisions of a May 1, 2012 Executive Order regarding foreign sanctions evaders with respect to Syria and Iran, and certain provisions of the Iran Threat Reduction and Syria Human Rights Act of 2012, the Countering America’s Adversaries Through Sanctions Act, and the Caesar Syria Civilian Protection Act of 2019. In addition to new prohibitions, OFAC is adding several relevant definitions and interpretations and one new general license. OFAC is also incorporating, with amendments, one general license, which has until now appeared only on OFAC’s website, and updating six general licenses.

OFAC also issued a new Syria Frequently Asked Question (FAQ 1180)

 

FAQ 1180:

 

Question: What changes did OFAC make in the June 5, 2024 regulatory amendments to the Syrian Sanctions Regulations, 31 CFR part 542 (SySR)?

 

Answer: On June 5, 2024, OFAC, in consultation with the Department of State, amended the SySR to, among other things, incorporate certain sanctions statutes, including the Caesar Syria Civilian Protection Act of 2019, which are designed to deny the Assad Regime the resources it needs to support its longstanding campaign of repression against the Syrian people.  The amendments also incorporate a web General License (GL) and modify certain existing GLs to facilitate the continued provision of legitimate humanitarian assistance and internet-based communications services to civilians in Syria and clarify the applicability of the SySR to persons sanctioned under certain sanctions authorities.  These changes include:

 

  • Incorporation of Executive order and sanctions statutes: OFAC incorporated into the SySR the Caesar Syria Civilian Protection Act of 2019, the Syria Human Rights Accountability Act of 2012, and the Iran Threat Reduction and Syria Human Rights Act of 2012, as well as relevant provisions of the Countering America’s Adversaries Through Sanctions Act and Executive Order (E.O.) 13608.
  • Incorporation of web GL 22 related to economic sectors in certain areas of Syria: OFAC incorporated into the SySR, at new § 542.533, web GL 22, which authorizes activities in certain economic sectors in non-regime held areas of Northeast and Northwest Syria.
  • Additional non-governmental organization (NGO) activities: OFAC amended the GL related to the activities of nongovernmental organizations (NGO) at § 542.516.  These changes clarify which types of persons are covered by the NGO GL; add new authorized activities; and clarify that U.S. financial institutions may rely on statements of the originator of a funds, provided that the financial institution does not know or have reason to know that the funds transfer is not in compliance with the NGO GL.
  • Additional international organizations (IO): OFAC amended the GL related to the activities of international organizations (IO) at § 542.513.  These changes add new IOs whose official business is authorized by the GL to include the International Committee of the Red Cross and the International Federation of Red Cross and Red Crescent Societies; and The Global Fund to Fight AIDS, Tuberculosis, and Malaria, and Gavi, the Vaccine Alliance.
  • Expansion of authorization for internet-based communications: OFAC amended the GL related to internet-based communications at § 542.511.  These changes update the list of examples of communications technologies that are incident to, or enable services incident to, communications over the internet; authorize the provision of services incident to the export or reexport of certain communications software or hardware not subject to the Export Administration Regulations (“EAR”), 15 C.F.R. parts 730-774, that is incident to, or enables services incident to, communications over the internet, subject to certain conditions; and authorize the exportation and re-exportation to Syria of non-commercial-grade internet connectivity services

 

https://www.federalregister.gov/documents/2024/06/06/2024-12317/syrian-sanctions-regulations and

https://ofac.treasury.gov/media/932916/download?inline and

https://ofac.treasury.gov/media/932911/download?inline

 

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June 6, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the Ecuador-based Los Lobos Drug Trafficking Organization (Los Lobos) and its leader Wilmer Geovanny Chavarria Barre (also known as “Pipo”). Numbering thousands of members, Los Lobos has emerged as Ecuador’s largest drug trafficking organization and contributes significantly to the violence gripping the country. This action builds on Treasury’s February 7 designation of Los Choneros a prominent Ecuadorian drug gang—and comes as Ecuadorian criminal organizations backed by Mexico’s Cartel Jalisco Nueva Generación (CJNG) and Sinaloa Cartel continue to drive violence and instability in Ecuador.

 

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

 

  • Chavarria Barre, Wilmer Geovanny of Ecuador.

 

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

 

  • Los Lobos Drug Trafficking Organization of Ecuador.

 

https://home.treasury.gov/news/press-releases/jy2394 and

https://home.treasury.gov/news/press-releases?page=2

 

 

*******

 

June 6, 2024: In response to the Department of State’s sanction on “Lions’ Den” a militant Palestinian group centered in Nablus’s Old City in the West Bank, Department of the Treasury’s Office of Foreign Assets Control (OFAC) added the following entities to its SDN List:

 

 

  • Al Jil Alqadem General Trading L.L.C. of the United Arab Emirates;
  • Al Zumoroud and Al Yaqoot Gold and Jewllers Trading L.L.C of the United Arab Emirates;
  • Capital Tap General Trading L.L.C. of the United Arab Emirates;
  • Capital Tap Holding L.L.C. of the United Arab Emirates;
  • Capital Tap Management and Consultancies L.L.C of the United Arab Emirates:
  • Creative Python L.L.C. of the United Arab Emirates;
  • Horizon Advanced Solutions General Trading – Sole Proprietorship L.L.C. of the United Arab Emirates; and
  • Lions’ Den of the West Bank.

 

https://ofac.treasury.gov/recent-actions/20240606

 

*******

June 10, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned ten individuals, entities, and vessels, including tanker captains, in multiple jurisdictions that have engaged in the illicit transport of oil and other commodities, including for the network of Houthi financial facilitator Sa’id al-Jamal. This action targets maritime shipping and financial facilitators, several vessel managers and owners, and a company involved in forging shipping documents. This action, the seventh round of sanctions targeting the network of Sa’id al-Jamal since October 2023, underscores the U.S. government’s commitment to isolating and disrupting the financing of international terrorist groups such as the Houthis.

 

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

 

  • Al-Jamal, Abdallah Najib Ahmad of Yemen;
  • Aruldhas, John Britto of the United Arab Emirates;
  • Choudhary, Sandeep Singh of India; and
  • Pandey, Vivek Ashok of India.

 

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

 

  • Lainey Shipping Limited of China;
  • Louis Marine Shipholding Enterprises S.A. of Turkey;
  • Rayyan Shipping Private Limited of India;
  • Shark International Shipping L.L.C. of the United Arab Emirates.

 

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

 

  • Bella 1, Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9230880; and
  • Janet, Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9220952.

 

https://ofac.treasury.gov/recent-actions/20240610 and

https://ofac.treasury.gov/recent-actions?page=0

 

*******

 

June 11, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned members of one of Guyana’s wealthiest families, Nazar Mohamed (Nazar) and his son, Azruddin Mohamed (Azruddin), their company, Mohamed’s Enterprise, and a Guyanese government official, Mae Thomas (Thomas), for their roles in public corruption in Guyana.Additionally, OFAC designated two other entities, Hadi’s World and Team Mohamed’s Racing Team, for being owned or controlled by Mohamed’s Enterprise and Azruddin, respectively. These individuals and entities are sanctioned 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.

 

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

 

  • Mohamed, Azruddin Intiaz of Guyana;
  • Mohammed, Nazar of Guyana;
  • Thomas, Mae Toussaint of Guyana.

 

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

 

  • Hadi’s World Incorporated of Guyana;
  • Mohamed’s Enterprise of Guyana;
  • Team Mohamed’s Racing Team.

 

https://ofac.treasury.gov/recent-actions/20240611 and

https://ofac.treasury.gov/recent-actions?page=0

 

*******

 

June 12, 2024: As President Biden and Group of Seven (G7) Leaders met in Italy, the U.S. Department of the Treasury issued sweeping new measures guided by G7 commitments to intensify the pressure on Russia for its continued cruel and unprovoked war against Ukraine. These actions ratchet up the risk of secondary sanctions for foreign financial institutions that deal with Russia’s war economy; restrict the ability of Russian military-industrial base to take advantage of certain U.S. software and information technology (IT) services; and, together with the Department of State, target more than 300 individuals and entities both in Russia and outside its borders including in Asia, the Middle East, Europe, Africa, Central Asia, and the Caribbean whose products and services enable Russia to sustain its war effort and evade sanctions.

 

Treasury targeted the architecture of Russia’s financial system, which has been reoriented to facilitate investment into its defense industry and acquisition of goods needed to further its aggression against Ukraine. Treasury also targeted more than a dozen transnational networks laundering gold for a designated Russian gold producer, supporting Russia’s production of unmanned aerial vehicles (UAVs), and procuring sensitive and critical items such as materials for Russia’s chemical and biological weapons program, anti-UAV equipment, machine tools, industrial machinery, and microelectronics. This action also takes further steps to limit Russia’s future revenue from liquefied natural gas.

 

The State Department targeted over 100 entities and individuals engaged in the development of Russia’s future energy, metals, and mining production and export capacity; sanctions evasion and circumvention; and furthering Russia’s ability to wage its war against Ukraine.

 

OFAC also issued Russia-related General License 6D, 8J, 25D, 98, 99, and 100.

 

General License No. 6D: All transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587, related to:

 

(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 COVID-19 (including research or clinical studies relating to COVID-19); or (3) clinical trials and other medical research activities are authorized.

 

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

 

(1) Agricultural commodities.  For the purposes of this general license, 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:

 

  • 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);
  • (ii) Seeds for food crops;
  • (iii) Fertilizers or organic fertilizers; or
  • (iv) Reproductive materials (such as live animals, fertilized eggs, embryos, and semen) for the production of food animals.

 

(2) Medicine.  For the purposes of this general license, 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.  For the purposes of this general license, 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:

 

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

 

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

 

(3) Transactions prohibited by E.O. 14066, E.O. 14068, or E.O. 14071, except for transactions prohibited by the determination of May 8, 2022, made pursuant to section 1(a)(ii) of E.O. 14071, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services,” or the determination of June 12, 2024, made pursuant to section 1(a)(ii) of E.O. 14071, “Prohibition on Certain Information Technology and Software Services.”

 

Effective June 12, 2024, General License No. 6C, dated January 17, 2023, is replaced and superseded in its entirety by this General License No. 6D

 

General License No. 8J:

 

All transactions prohibited by Executive Order (E.O.) 14024 involving one or more of the following entities that are related to energy are authorized, through 12:01 a.m. eastern daylight time, November 1, 2024:

 

(1) State Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank;

(2) Public Joint Stock Company Bank Financial Corporation Otkritie;

(3) Sovcombank Open Joint Stock Company;

(4) Public Joint Stock Company Sberbank of Russia;

(5) VTB Bank Public Joint Stock Company;

(6) Joint Stock Company Alfa-Bank;

(7) Public Joint Stock Company Rosbank;

(8) Bank Zenit Public Joint Stock Company;

(9) Bank Saint-Petersburg Public Joint Stock Company;

(10) National Clearing Center (NCC);

(11) 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

(12) the Central Bank of the Russian Federation.

 

For the purposes of this general license, the term “related to energy” means the extraction, production, refinement, liquefaction, gasification, regasification, conversion, enrichment, fabrication, transport, or purchase of petroleum, including crude oil, lease condensates, unfinished oils, natural gas liquids, petroleum products, natural gas, or other products capable of producing energy, such as coal, wood, or agricultural products used to manufacture biofuels, or uranium in any form, as well as the development, production, generation, transmission, or exchange of power, through any means, including nuclear, thermal, and renewable energy sources.

 

This general license does not authorize:

 

(1) Any transactions prohibited by Directive 1A under E.O. 14024, Prohibitions Related to Certain Sovereign Debt of the Russian Federation;

(2) 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;

(3) Any debit to an account on the books of a U.S. financial institution of the Central Bank of the Russian Federation; or

(4) 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.

 

Effective June 12, 2024, General License No. 8I, dated April 29, 2024, is replaced and superseded in its entirety by this General License No. 8J.

 

General License No. 25D:

 

All transactions ordinarily incident and necessary to the receipt or transmission of telecommunications involving the Russian Federation that are prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized.

 

The exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, wherever located, to the Russian Federation of services incident to the exchange of communications over the internet, such as instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, blogging, social media platforms, collaboration platforms, video conferencing, e-gaming, e-learning platforms, automated translation, web maps, user authentication services, web hosting, and domain name registration services, that is prohibited by the RuHSR, is authorized.

 

The exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, to the Russian Federation of software, hardware, or technology incident to the exchange of communications over the internet is authorized, provided that:

 

  • If the software, hardware, or technology is subject to the Export Administration Regulations, 15 CFR parts 730 through 774 (EAR), the exportation, reexportation, sale, or supply to the Russian Federation of such software, hardware, or technology is licensed or otherwise authorized by the Department of Commerce pursuant to the EAR; and
  • (ii) If the software, hardware, or technology is not subject to the EAR, the exportation, reexportation, sale, or supply to the Russian Federation of such software, hardware, or technology would be eligible for a license exception or otherwise authorized by the Department of Commerce if it were subject to the EAR.

 

This general license does not authorize:

 

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

 

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

 

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

 

(4) Any transactions involving Joint Stock Company Channel One Russia, Joint Stock Company NTV Broadcasting Company, Television Station Russia-1, Limited Liability Company Algoritm, New Eastern Outlook, Oriental Review, or Garantex Europe OU, unless separately authorized.

 

Effective June 12, 2024, General License No. 25C, dated July 14, 2022, is replaced and superseded in its entirety by this General License No. 25D.

 

General License No. 98:

 

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, July 27, 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) Aviatech FZC

 

(2) Beijing Deepcool Industries Co., Ltd.

 

(3) Guangdong Pratic CNC Technology Co., Ltd.

 

(4) Joint Stock Company Uralredmet (5) Joint Stock Company Goznak

 

(5) Joint Stock Company Goznak

 

(6) Limited Liability Company Elga Stroy Mining Services

 

(7) Limited Liability Company Elgaugol

 

(8) Limited Liability Company Management Company Elga

 

(9) Limited Liability Company Koulstar

 

(10) Max Jet Service Limited Liability Company

 

(11) Mile Hao Xiang Technology Co., Ltd.

 

(12) Platin Group Machine Manufacturing International Company Limited

 

(13) Public Joint Stock Company Seligdar

 

(14) Shandong Oree Laser Technology Co., Ltd.

 

(15) Wuhan Tianyu Information Industry Co., Ltd; or

 

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

 

(b) This general license does not authorize:

 

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

 

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

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

 

General License No. 99:

 

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, August 13, 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) Moscow Exchange (MOEX);

 

(2) National Clearing Center (NCC);

 

(3) Non-Bank Credit Institution Joint Stock Company National Settlement Depository (NSD); and

(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.

 

All transactions prohibited by 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 any of the blocked entities identified in paragraph (a) (“Covered Debt or Equity”) to a non-U.S. person are authorized through 12:01 a.m. eastern daylight time, August 13, 2024, 2024:

 

All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to facilitating, clearing, and settling trades of Covered Debt or Equity that were placed prior to 4:00 p.m. eastern daylight time, June 12, 2024 are authorized through 12:01 a.m. eastern daylight time, August 13, 2024, 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 daylight time June 12, 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 August 13, 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 paragraph (b) of this general 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 paragraph (a) of this general license, unless separately authorized.

 

General License No. 100:

 

All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the divestment of debt or equity to a non-U.S. person, who is not a person whose property or interests in property are blocked, or the conversion of currencies, involving one or more of the following blocked entities that is acting solely as a securities, trade, or settlement depository, central counterparty or clearing house, or public trading market, are authorized through 12:01 eastern daylight time August 13, 2024:

 

(1) Moscow Exchange (MOEX);

 

(2) National Clearing Center (NCC);

 

(3) Non-Bank Credit Institution Joint Stock Company National Settlement Depository (NSD); and

 

(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 persons described in paragraph (a) of this general license, unless separately authorized.

 

Additionally, OFAC is issuing eight new, Russia-related Frequently Asked Questions (FAQs 1181 – 1188)

 

FAQ 1181:

 

Question: Effective June 12, 2024, how is Treasury interpreting Russia’s military-industrial base under section 11 of Executive Order (E.O.) 14024, as amended by E.O. 14114?

 

Answer: In line with G7 commitments and in response to the Government of the Russian Federation’s continued efforts to reorient its economy and government resources to support its war effort, Treasury has updated its definition of Russia’s military-industrial base to include all persons blocked pursuant to E.O. 14024.  This updated definition reflects Russia’s reorientation of its economy and government resources to support its war.  This action means that FFIs risk being sanctioned for conducting or facilitating any significant transaction or transactions or for providing any service involving a person blocked pursuant to E.O. 14024.

 

As updated in FAQ 1151, Russia’s military-industrial base includes all persons blocked pursuant to E.O. 14024, as well as any person operating in the technology, defense and related materiel, construction, aerospace, and manufacturing sectors of the Russian Federation economy (and other sectors as may be determined pursuant to E.O. 14024).  For definitions of those identified sectors, see FAQ 1126.  Russia’s military-industrial base may also include individuals and entities that support the sale, supply, or transfer, directly or indirectly, of critical items identified pursuant to subsection 11(a)(ii) of E.O. 14024 to the Russian Federation.  See determination of December 22, 2023 pursuant to subsection 11(a)(ii) of Executive Order 14024 (Russia Critical Items Determination)

 

FAQ 1182:

 

Question: Are foreign financial institutions (FFIs) subject to sanctions risk for providing all financial services involving persons blocked pursuant to Executive Order (E.O.) 14024, as amended?  What about agricultural, medical, and other transactions authorized by OFAC General Licenses?

 

Answer: Treasury remains focused on counteracting activity that involves sanctions evasion or third-country support to Russia’s military-industrial base. At the same time, legitimate humanitarian activity and agricultural and medical trade are not the target of our sanctions. Accordingly, FFIs may continue to conduct or facilitate any transaction(s) or provide any service related to activities that are otherwise authorized or exempted under the Russian Harmful Foreign Activities Sanctions program.

 

Foreign persons do not risk the imposition of sanctions for engaging in transactions authorized for U.S. persons under General Licenses issued under the Russian Harmful Foreign Activities Sanctions program.

FFIs may continue to rely on Treasury’s existing authorizations in place for transactions related to agricultural commodities, medicine, medical devices and related replacement parts, components, or software updates, the Coronavirus Disease 2019 (General License (GL) 6D), energy-related transactions (GL 8J), certain transactions in support of non-governmental organizations (GL 27), official business of third-country diplomatic or consular missions located in the Russian Federation (GL 20), certain transactions and official business of certain international organizations and entities by employees, grantees, or contractors thereof (31 CFR 587.510). Additionally, the importation or exportation of information or informational materials and transactions ordinarily incident to travel to or from any country are exempt under the International Emergency Economic Powers Act (IEEPA).

 

FAQ 1183:

 

Question: What authorizations are in place with respect to the Moscow Exchange (MOEX), National Clearing Center (NCC), and Non-Bank Credit Institution Joint Stock Company National Settlement Depository (NSD)?

 

Answer: On June 12, 2024, OFAC issued Russia-related general licenses (GLs) GL 99, GL 100, and amended GL 8J, authorizing certain transactions involving MOEX, NCC, NSD, or any entity in which one of these entities owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest (collectively, “the Blocked Entities”).

 

GL 99 authorizes the wind down of transactions involving the Blocked Entities, as well as certain transactions related to the divestment to non-U.S. persons of debt or equity issued or guaranteed by, or derivative contracts involving, the Blocked Entities.  For example, GL 99 would authorize a U.S. person to divest their equity in MOEX to a non-blocked non-U.S. person.  This authorization expires at 12:01 a.m. eastern daylight time August 12, 2024.  See GL 99 for more information.

 

GL 100 authorizes certain transactions for the divestment to non-blocked, non-U.S. persons of debt or equity, or for the conversion of currencies, involving one or more of the Blocked Entities solely as a securities, trade, or settlement depository, central counterparty or clearing house, or public trading market.  GL 100 is intended to cover the divestment of debt or equity of non-blocked companies that may be traded on or through one of the Blocked Entities in their capacity as a securities, trade, or settlement depository, central counterparty or clearing house, or public trading market.  For example, GL 100 would authorize a U.S. person to divest their equity in a non-blocked Russian company that is being traded on MOEX to a non-blocked, non-U.S. person.  This example would be distinct from the divestment of equity in MOEX itself, which would be covered by GL 99.  GL 100 would also authorize U.S. persons to transact with one of the Blocked Entities to the extent ordinarily incident and necessary to convert U.S. dollars to another currency, or vice versa.  This authorization expires at 12:01 a.m. eastern daylight time August 12, 2024. See GL 100 for more information.

 

FAQ 1184:

 

Question: What action did Treasury take on June 12, 2024 with regards to prohibiting certain information technology (IT) and software-related services?

 

Answer: In line with G7 efforts to disrupt Russia’s defense industry’s reliance on western IT systems, on June 12, 2024, Treasury issued a determination that restricts the provision of certain IT and software-related services to Russia.  The determination, “Prohibition on Certain Information Technology and Software Services,” issued pursuant to Executive Order (E.O.) 14071 (the “IT and Software Services Determination”), prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, to any person located in the Russian Federation of:  (1) IT consultancy and design services; and (2) IT support services and cloud-based services for the following categories of software: enterprise management software and design and manufacturing software (collectively, “Covered Software”).  The IT and Software Services Determination will take effect at 12:01 a.m. eastern daylight time on September 12, 2024.  See FAQs 1185, 1186, 1187, and 1188 for additional information.

 

The aim of this action is not to prohibit all activity relating to the provision of IT and software-related services to Russia.  The United States strongly supports the free flow of information and communications globally as facilitated by telecommunications and the internet.  These measures do not prohibit internet access or the delivery of internet-based communications services.  Treasury already has in place General License (GL) 25D, which authorizes certain transactions ordinarily incident and necessary to the receipt or transmission of telecommunications involving the Russian Federation and the provision of certain services incident to the exchange of communications over the internet, subject to certain restrictions.  For additional information, see FAQ 1040.  Treasury has also amended GL 6D to authorize transactions related to certain agricultural and medical activities involving the provision of information technology and software-related services.  Additionally, the importation from any country, or the exportation to any country of any information or informational materials, regardless of format or medium, is generally exempt from the scope of sanctions prohibitions under the International Emergency Economic Powers Act.  See 50. U.S.C. § 1702(b)(3).

 

In addition, the IT and Software Services Determination does not prohibit the following IT and software services, which are excluded from its scope:  (1) any service to an entity located in the Russian Federation that is owned or controlled, directly or indirectly, by a United States person; (2) any service in connection with the wind down or divestiture of an entity located in the Russian Federation that is not owned or controlled, directly or indirectly, by a Russian person; and (3) any service for software that would be eligible for a license exception or otherwise authorized for export or reexport to Russia by the Department of Commerce.

 

FAQ 1185:

 

Question: What activities are considered prohibited “information technology (IT) consultancy and design services” under the determination, “Prohibition on Certain Information Technology and Software Services,” pursuant to Executive Order (E.O. 14071) (the “IT and Software Services Determination”)?

 

Answer: IT consultancy and design services include the development and implementation of software, as well as assistance or advice relating to the development and implementation of software, including the supply and installation of bespoke software.  However, the retail sale of off-the-shelf software, falling under United Nations’ Central Product Classification (CPC) Code 63252, is not included in the scope of IT consultancy and design services.  IT consultancy and design services are distinct from information technology (IT) support services, which fall under United Nations’ CPC Code 83132.  See FAQ 1187 for more information on how OFAC intends to define “IT consultancy and design services.”  See FAQ 1186 for a description of prohibited “IT support services” and “cloud-based services” for enterprise management software and design and manufacturing software.

 

The following are examples of activities that would be prohibited by the IT and Software Services Determination if such services were provided to a company located in the Russian Federation that is not owned or controlled directly or indirectly by a U.S. person (Russian company):

 

  • A U.S. company signs a contract with a Russian company to assist the Russian company in upgrading its IT systems.  The U.S. consulting company advises on, among other matters, the kinds of software and hardware needed for the Russian company’s operations and how best to

procure such technology.

 

  • A U.S. company works to modify existing web applications to be functional within a Russian company’s internal IT environment.

 

  • A U.S. service provider signs a contract with a Russian company for the design and engineering of bespoke (i.e., custom-made) software that the Russian company uses for internal purposes.

 

  • A U.S. person working at a third country company signs a contract with a Russian company to design the structure of their sales website.

 

The following are examples of activities that would not be prohibited by the IT and Software Services Determination:

 

  • A U.S. service provider provides a Russian company with internet access.

 

  • A U.S. service provider provides a Russian company with internet services.  The delivery of internet services includes, for example, Domain Name Services.

 

  • A U.S. company provides Russian individuals and entities with continued access to cloud-based, free-of-charge, publicly available web applications, such as email, spreadsheet, and document applications.
  • A U.S. company provides virtual private network (VPN) services to customers in the Russian Federation.

 

Some of these activities – such as the sale of off-the-shelf software – may be subject to other Federal laws or requirements of other Federal agencies, including export, reexport, and transfer (in-country) license requirements maintained by the Department of Commerce’s Bureau of Industry and Security under the Export Administration Regulations, 15 CFR parts 730–774 (EAR).

 

FAQ 1186:

 

Question: What activities are considered prohibited “IT support services” and “cloud-based services” for enterprise management software and design and manufacturing software (collectively “Covered Software”) under the determination, “Prohibition on Certain Information Technology and Software Services”, pursuant to Executive Order (E.O.) 14071 (the “IT and Software Services Determination”)?

 

Answer: The IT and Software Services Determination prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of both IT support services and cloud-based services for the Covered Software to a person located in the Russian Federation.  IT support services include the provision of technical expertise to solve problems for the client in using software, hardware, or an entire computer system.  Cloud-based services include the supply of software and associated services via the internet or the cloud, including through Software-as-a-Service (SaaS).  See FAQ 1187 for more information on how OFAC intends to define “enterprise management software,” “design and manufacturing software,” “cloud-based services,” and “information technology support services.”

 

The following are examples of activities that would be prohibited by the IT and Software Services Determination if such services were provided to a company located in the Russian Federation that is not owned or controlled directly or indirectly by a U.S. person (Russian company):

 

  • A U.S. company sells a cloud-based enterprise resource planning software subscription to a Russian company.

 

  • A U.S. employee of a third country company provides customer support services to a Russian company that is experiencing technical difficulties with its human resources software.

 

  • A U.S. company provides a software patch to a Russian company to fix a bug in its computer-aided design software.

 

The following are examples of activities that would not be prohibited by the IT and Software Services Determination:

 

  • A U.S. company sells a cloud-based electronic health records software subscription to a Russian company.

 

  • A U.S. company provides customer support services to a Russian individual who is experiencing technical difficulties with their publicly available cloud-based spreadsheet web application.
  • A U.S. person working at a third country company provides customer support services to a Russian individual who is experiencing technical difficulties with their free-of-charge publicly available teleconferencing application.

 

  • A U.S. company provides IT support services to a Russian individual to a non-covered software application.

 

The IT and Software Services Determination complements regulations to be issued by the U.S. Department of Commerce Bureau of Industry and Security (BIS) pertaining to the export, reexport, or transfer (in-country) to the Russian Federation of the following types of software subject to the Export Administration Regulations, 15 CFR part 730–774 (EAR):  Enterprise resource planning (ERP); customer relationship management (CRM); business intelligence (BI); supply chain management (SCM); enterprise data warehouse (EDW); computerized maintenance management system (CMMS); project management software, product lifecycle management (PLM);  building information modelling (BIM); computer aided design (CAD); computer-aided manufacturing (CAM); and engineering to order (ETO).

 

See General License (GL) 25D for more information about certain authorizations for transactions relating to the receipt or transmission of telecommunications involving the Russian Federation and the provision of certain services incident to the exchange of communications over the internet.  See GL 6D for more information on authorizations for transactions related to certain agricultural and medical activities involving the provision of information technology and software-related services.

 

FAQ 1187:

 

Question: How does OFAC intend to interpret the following terms in the determination, “Prohibition on Certain Information Technology and Software Services,” pursuant to Executive Order (E.O.) 14071 (the “IT and Software Services Determination”):  “enterprise management software,” “design and manufacturing software,” “cloud-based services,” “information technology support services,” and “information technology consultancy and design services”?

 

Answer: OFAC expects to promulgate regulations that define or interpret these terms as follows:

 

The term enterprise management software means the following types of software:  enterprise resource planning (ERP), customer relationship management (CRM), business intelligence (BI), supply chain management (SCM), enterprise data warehouse (EDW), computerized maintenance management system (CMMS), project management, and product lifecycle management (PLM) software.

 

The term design and manufacturing software means the following types of software:  building information modelling (BIM), computer aided design (CAD), computer-aided manufacturing (CAM), and engineer to order (ETO) software.

 

The term cloud-based services includes the delivery of software via the internet or over the cloud, including through Software-as-a-Service (SaaS), or SaaS cloud services in relation to such software.

 

The term information technology support services is defined consistent with the United Nations’ Central Product Classification (CPC) Code 83132 to include:

  1. providing technical expertise to solve problems for the client in using software, hardware, or an entire computer system, such as: (a) providing customer support in using or troubleshooting the software; (b) upgrading services and the provision of patches and updates; (c) providing customer support in using or troubleshooting the computer hardware, including testing and cleaning on a routine basis and repair of information technology (IT) equipment; (d) technical assistance in moving a client’s computer system to a new location; (e) providing customer support in using or troubleshooting the computer hardware and software in combination; and

 

  1. providing technical expertise to solve specialized problems for the client in using a computer system, such as:  (a) auditing or assessing computer operations without providing advice or other follow-up action including auditing, assessing and documenting a server, network or process for components, capabilities, performance, or security; (b) data recovery services, i.e. retrieving a client’s data from a damaged or unstable hard drive or other storage medium, or providing standby computer equipment and duplicate software in a separate location to enable a client to relocate regular staff to resume and maintain routine computerized operations in event of a disaster such as a fire or flood; and (c) other IT technical support services not elsewhere classified.

 

The term information technology consultancy and design services includes both IT consulting services and IT design and development services for applications, and is defined consistent with United Nations’ Central Product Classification (CPC) Codes 83131 and 83141, respectively.

 

  • IT consultancy services includes providing advice or expert opinion on technical matters related to the use of information technology, such as:  (a) advice on matters such as hardware and software requirements and procurement; (b) systems integration; (c) systems security; and (d) provision of expert testimony on IT related issues.

 

  • IT design and development services for applications includes services of designing the structure and/or writing the computer code necessary to create and/or implement a software application, such as:  (a) designing the structure of a web page and/or writing the computer code necessary to create and implement a web page; (b) designing the structure and content of a database and/or writing the computer code necessary to create and implement a database; (c) designing the structure and writing the computer code necessary to design and develop a custom software application; (d) customization and integration, adapting (modifying, configuring, etc.) and installing an existing application so that it is functional within the clients’ information system environment.

 

FAQ 1188:

 

Question: Does the determination, “Prohibition on Certain Information Technology and Software Services,” pursuant to Executive Order (E.O.) 14071 (the “IT and Software Services Determination”) prohibit U.S. persons from providing services to persons located outside of the Russian Federation that are owned or controlled by persons located in the Russian Federation? 

 

Answer: No, provided that the provision of services is not an indirect export to a person located in the Russian Federation.  For the purposes of the IT and Software Services Determination, OFAC interprets the “indirect” provision of the prohibited services to include when the benefit of the services is ultimately received by a “person located in the Russian Federation.”

 

In contrast, OFAC would not consider to be prohibited the provision of services to a third country company that is located outside of Russia, including such a company owned or controlled by persons located in the Russian Federation, provided that the services will not be further exported or reexported to persons located in the Russian Federation.

 

For example, the following scenarios describe services that would be prohibited under the IT and Software Services Determination:

 

  • A U.S. company designs and delivers proprietary supply chain management software to a third country limited liability company (Company X) on behalf of its Russian parent company, which Company X intends to supply to its parent company.

 

  • A U.S. company designs and delivers proprietary accounting software to a third country software re-seller (Company Y), which Company Y indicates that they intend to supply to a Russian company.

 

  • A U.S. consulting company signs a contract to provide enterprise management software and related information technology support services to Company X.  Company X provides access to these services to its Russian parent, such that employees from the Russian parent call the U.S. consulting company when they have problems with their enterprise management software.

 

The following scenarios illustrate services to a non-Russian subsidiary of a Russian person that would not be prohibited under the IT and Software Services Determination:

 

  • A U.S. software company assists a U.S. subsidiary of a Russian company in upgrading the U.S. subsidiary’s IT systems, including procuring new software and hardware.  The U.S. subsidiary has an office and employees in the United States and conducts business in the United States, and the services will not be exported or reexported to the Russian parent company.

 

  • A U.S. software company signs a contract with the third-country subsidiary (Company Z) of a Russian company for the delivery via cloud of building information software to Company Z.  This subsidiary has an office and employees in the third country and conducts business in this third country, and the software will not be provided to the Russian parent company.

 

 

  • A U.S. technology company designs a website for the subsidiary of a Russian company located in a third country. This subsidiary has an office and employees in the third country and conducts business in this third country, and the services will not be reexported to the Russian parent company.

OFAC is publishing an updated Compliance Advisory to Foreign Banks on Russia Sanctions Risks in order to provide additional guidance for Foreign Financial Institutions the update advisory warns foreign financial institutions that conduct or facilitate significant transactions or provide any service involving Russia’s military-industrial base run the risk of being sanctioned by OFAC.  OFAC is revising the definition of “Russia’s military-industrial base” to include all persons blocked under E.O. 14024, as amended.

 

Please see the full list of sanctioned Russian individuals and entities posted in the links below:

 

https://ofac.treasury.gov/recent-actions/20240612

https://home.treasury.gov/news/press-releases/jy2404

https://ofac.treasury.gov/media/932951/download?inline

https://ofac.treasury.gov/media/932921/download?inline

https://ofac.treasury.gov/media/932926/download?inline

https://ofac.treasury.gov/media/932931/download?inline

https://ofac.treasury.gov/media/932936/download?inline

https://ofac.treasury.gov/media/932941/download?inline

https://ofac.treasury.gov/media/932946/download?inline

https://ofac.treasury.gov/faqs/added/2024-06-12 and

https://ofac.treasury.gov/media/932436/download?inline

 

*******

 

June 14, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on four individuals with links to the Islamic State of Iraq and Syria (ISIS), including members of an ISIS-linked human smuggling network. The investigations into these targets, as well as their subsequent designations, were taken in close coordination with the Government of Türkiye. As a result of this close cooperation, the Government of Türkiye is concurrently taking its own domestic action against this network.

 

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

 

  • Ismailov, Olimkhon Makhmudjon Ugli of Uzbekistan;
  • Khamirzaev, Adam of Turkey;
  • Mirzoev, Muhammadyusuf Alisher Ogli of Uzbekistan: and
  • Niyazov, Muhammad Ibrohimjon of Turkey.

 

https://ofac.treasury.gov/recent-actions/20240614 and

https://ofac.treasury.gov/recent-actions/20240617

 

 

 

*******

June 14, 2024: Based on the Department of State’s designation of Tzav 9, a violent extremist Israeli group that has been blocking, harassing, and damaging convoys carrying lifesaving humanitarian assistance to Palestinian civilians in Gaza, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) added the following individuals to its SDN List:

 

  • Eklund, Leif Robert of Sweden;
  • Oberg, Par of Sweden;
  • Vejeland, Tor Frederik of Sweden.

 

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

 

  • Nordic Resistance Movement of Sweden; and
  • TZAV 9 of Israel.

 

https://ofac.treasury.gov/recent-actions/20240614 and

https://ofac.treasury.gov/recent-actions?page=0

 

*******

 

June 17, 2024:  The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated individuals and entities that have facilitated weapons procurement for Ansarallah, commonly referred to as the Houthis. OFAC is also designating one individual and one company, as well as identifying one vessel, that have facilitated the shipment of commodities, the sale of which provides an important funding stream to the Houthis that aids in their weapons procurement. This action targets key actors who have enabled the Houthis to generate revenue and acquire a range of materials to manufacture the advanced weaponry they are now using to conduct ongoing terrorist attacks against commercial ships. Since November 2023, the Houthis have deployed a range of unmanned aerial vehicles (UAVs), ballistic missiles, and cruise missiles to attack merchant vessels and their crews in the Red Sea and Gulf of Aden, killing innocent civilians, causing severe damage to commercial ships, and threatening global freedom of navigation.

 

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

 

  • Al-Haifi, Muaadh Ahmed Mohammed of Oman;
  • Al-Sa’idi, Haydar Muzhir Ma’lak of Iraq;
  • Al-Wazir, Ali Abd Al-Wahhab Muhammad of Yemen; and
  • Salyga, Vyacheslav of Ukraine.

 

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

 

  • Dongguan Yuze Machining Tools Company Limited of China;
  • Guangzhou Tasneem Trading Company Limited of China;
  • Harakat Ansar Allah Al-Awfiya of Iraq;
  • International Smart Digital Interface Limited Liability Company of Oman;
  • Ningbo Beilun Saige Machine Co., Ltd., No. 2 of China;
  • Stellar Wave Marine L.L.C. of the United Arab Emirates; and
  • Tasneem Trading Company Limited of China.

 

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

 

  • Otaria, rude Oil Tanker Cameroon flag; Vessel Registration Identification IMO 9192260.

 

https://ofac.treasury.gov/recent-actions/20240617 and

https://ofac.treasury.gov/recent-actions?page=0

 

*******

 

June 18, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated a network of two individuals and seven entities that provide major sources of revenue for U.S.-designated Republika Srpska (RS) President Milorad Dodik (Dodik) and his family. Dodik has used his official position to accumulate personal wealth through companies linked to himself and to Igor Dodik (Igor). For example, in 2024, Igor and Dodik exercised their control over senior Bosnia and Herzegovina (BiH) government officials to manipulate the draft BiH state budget so that a state-level contract could be awarded to Prointer ITSS d.o.o. Banja Luka Clan Infinity International Group—an entity in the network—outside of the competitive process.

 

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) published Balkans-Related General License 3A, 4, and 5.

 

General License 3A:

 

All transactions prohibited by the Western Balkans Stabilization Regulations, 31 CFR part 588 (WBSR), involving one or more of the blocked entities described in this general license 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 conduct of clinical trials or other medical research.

 

The authorization this general license applies to the following blocked entities:

(1) Orka Holding AD;

 

(2) Infinity International Group d.o.o. Banja Luka;

 

(3) Sirius 2010 d.o.o. Banja Luka; 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.

 

(c) 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 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:

 

  • 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);

 

  • Seeds for food crops;

 

  • Fertilizers or organic fertilizers; or

 

  • 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).

 

(d) 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 paragraph (b) of this general license, unless separately authorized.

 

(e) Effective June 18, 2024, General License No. 3, dated November 16, 2023, is replaced and superseded in its entirety by this General License No. 3A.

 

General License 4:

 

All transactions prohibited by the Western Balkans Stabilization Regulations, 31 CFR part 588 (WBSR), 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, August 17, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the WBSR:

 

(1) Infinity International Group d.o.o. Banja Luka;

 

(2) Sirius 2010 d.o.o. Banja Luka; or

 

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

 

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, unless separately authorized.

 

General License 5:

 

All transactions prohibited by the Western Balkans Stabilization Regulations, 31 CFR part 588 (WBSR), that are ordinarily incident and necessary to the manufacture, distribution, operation, installation, or maintenance and repair of pumps manufactured or distributed by Kaldera Company EL PGP d.o.o., or any entity in which Kaldera Company EL PGP d.o.o. owns, directly or indirectly, a 50 percent or greater interest, that are currently or are intended solely for use in the treatment or distribution of drinking water, are authorized.

 

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, unless separately authorized.

 

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

 

  • Cicic, Milenko of Bosnia and Herzegovina; and
  • Djuric, Djordje of Serbia.

 

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

 

  • Infinity International Group D.O.O. Banja Luka of Bosnia and Herzegovina;
  • Infinity Media D.O.O of Bosnia and Herzegovina;
  • K-2 Audio Services Banja Luka D.O.O. of Bosnia and Herzegovina;
  • Kaldera Company El PGP D.O.O. of Bosnia and Herzegovina;
  • Prointer ITSS D.O.O. Banja Luka Clan Infinity International Group of Bosnia and Herzegovina;
  • Sirius 2010 D.O.O. Banja Luka of Bosina and Herzegovina; and
  • UNA World Networdk D.O.O. of Bosnia and Herzegovina.

 

https://ofac.treasury.gov/recent-actions/20240618 and

https://ofac.treasury.gov/recent-actions?page=0

 

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June 20, 2024: Secretary Yellen announced that the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned eight Mexico-based targets affiliated with La Nueva Familia Michoacana drug cartel for trafficking fentanyl, cocaine, and methamphetamine into the United States. In addition to narcotics trafficking, La Nueva Familia Michoacana smuggles migrants from Mexico into the United States. La Nueva Familia Michoacana is one of the most powerful and violent cartels in Mexico and has become a priority focus of the Mexican government in recent years.

 

Concurrently, Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a Supplemental Advisory to highlight critical new information to help U.S. banks and other financial institutions guard against activity associated with the illicit fentanyl supply chain. The advisory includes new trends and red flags that can be indicators of activity associated with the procurement of precursor chemicals and manufacturing equipment used for the synthesis of illicit fentanyl and other synthetic opioids. Reporting from financial institutions of suspected financial transactions involving illicit fentanyl and narcotics trafficking plays a key role in law enforcement investigations and Treasury’s sanctions efforts globally.

 

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

 

  • Arzate Gomez, Kevin of Mexico;
  • Camacho Goicochea, Euclides of Mexico;
  • Duran Alvarez, David of Mexico;
  • Lopez Hernandez, Josue of Mexico;
  • Maldonado Bustos, Rodolfo of Mexico;
  • Ochoa Lagunes, Lucio of Mexico;
  • Ramirez Carrera, Josue of Mexico;
  • Tabares Martines, Uriel of Mexico.

 

https://ofac.treasury.gov/recent-actions/20240620 and

https://ofac.treasury.gov/recent-actions?page=0

 

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June 25, 2024: the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned  nearly 50 entities and individuals that constitute multiple branches of a sprawling “shadow banking” network used by Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) and Islamic Revolutionary Guard Corps (IRGC) to gain illicit access to the international financial system and process the equivalent of billions of dollars since 2020. MODAFL and the IRGC engage in several commercial revenue-generating activities, most notably the sale of Iranian oil and petrochemicals.

 

Networks of Iranian exchange houses and dozens of foreign cover companies under their control enable MODAFL and the IRGC to disguise the revenue they generate abroad that is then available to use for a range of MODAFL and IRGC activities, including the procurement and development of advanced weapons systems such as unmanned aerial vehicles. This revenue also supports the provision of weapons and funding to Iran’s regional proxy groups, including Yemen’s Houthis, who continue a campaign of reckless attacks on global shipping, as well as the transfer of UAVs to Russia for use in its war of aggression against Ukraine.

 

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

 

  • Jalalian, Ramin of the United Arab Emirates;
  • Mir Mohammed Ali, Seyyed Reza of Iran;
  • Najibi, Seyyed Mohammad Mosanna’i of Turkey; and
  • Nourian, Siavash of Iran.

 

The full list of sanctioned entities can be found at the posting below

 

https://ofac.treasury.gov/recent-actions/20240625 and

https://home.treasury.gov/news/press-releases/jy2431

 

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June 26, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $538,000 settlement with Mondo TV, S.p.a. (“Mondo”).  Mondo, an Italy-based animation company, has agreed to settle its potential civil liability for 18 apparent violations of the North Korea Sanctions Regulations. Between May 2019 and November 2021, Mondo caused U.S. financial institutions to process approximately $537,939 in payments for animation work Mondo outsourced to a Government of North Korea-owned animation studio. This settlement amount reflects OFAC’s determination that Mondo’s conduct was non-egregious and not voluntarily disclosed.

 

https://ofac.treasury.gov/media/932986/download?inline and

https://ofac.treasury.gov/recent-actions/20240626

 

OFAC issued Russia-related General License 55B:

 

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, 2025, 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 June 26, 2024, General License No. 55A, dated September 14, 2023, is replaced and superseded in its entirety by this General License No. 55B.

 

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JUNE 2024 EXPORT CONTROL REGULATIONS UPDATES Read More »

MAY 2024 EXPORT CONTROL REGULATIONS UPDATES

This newsletter is a listing of the latest changes in export control regulations through May 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 Continued The National Emergency with Respect to the Actions of the Government of Syria

 

May 8, 2024: On May 11, 2004, pursuant to his authority under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) and the Syria Accountability and Lebanese Sovereignty Restoration Act of 2003 (Public Law 108-175), the President issued Executive Order 13338, in which he declared a national emergency with respect to the actions of the Government of Syria.  The national emergency was modified in scope and relied upon for additional steps taken in Executive Order 13399 of April 25, 2006, Executive Order 13460 of February 13, 2008, Executive Order 13572 of April 29, 2011, Executive Order 13573 of May 18, 2011, Executive Order 13582 of August 17, 2011, Executive Order 13606 of April 22, 2012, and Executive Order 13608 of May 1, 2012.

 

The President took these actions to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by the actions of the Government of Syria in supporting terrorism, maintaining its then-existing occupation of Lebanon, pursuing weapons of mass destruction and missile programs, and undermining United States and international efforts with respect to the stabilization and reconstruction of Iraq.

 

The regime’s brutality and repression of the Syrian people, who have called for freedom and a representative government, not only endangers the Syrian people themselves, but also generates instability throughout the region.  The Syrian regime’s actions and policies, including with respect to chemical weapons and supporting terrorist organizations, continue to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.  As a result, the national emergency declared in Executive Order 13338, which was expanded in scope in Executive Order 13572, and with respect to which additional steps were taken in Executive Order 13399, Executive Order 13460, Executive Order 13573, Executive Order 13582, Executive Order 13606, and Executive Order 13608, must continue in effect beyond May 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 with respect to the actions of the Government of Syria.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/page/2/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/05/08/notice-on-the-continuation-of-the-national-emergency-with-respect-to-the-actions-of-the-government-of-syria-4/

 

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President Biden Continued The National Emergency with Respect to Securing the Information and Communications Technology and Services Supply Chain

 

May 8, 2024: On May 15, 2019, by Executive Order 13873, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by the unrestricted acquisition and use of certain information and communications technology and services transactions.

 

The unrestricted acquisition or use in the United States of information and communications technology or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries augments the ability of these foreign adversaries to create and exploit vulnerabilities in information and communications technology or services, with potentially catastrophic effects.  This threat continues to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.  For this reason, the national emergency declared on May 15, 2019, must continue in effect beyond May 15, 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 13873 with respect to securing the information and communications technology and services supply chain.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/page/2/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/05/08/notice-on-the-continuation-of-the-national-emergency-with-respect-to-securing-the-information-and-communications-technology-and-services-supply-chain-4/

 

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President Biden Continued The National Emergency with Respect to the Central African Republic

 

May 8, 2024: On May 12, 2014, by Executive Order 13667, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the situation in and in relation to the Central African Republic, which has been marked by a breakdown of law and order; intersectarian tension; the pervasive, often forced recruitment and use of child soldiers; and widespread violence and atrocities, including those committed by Kremlin-linked and Yevgeniy Prigozhin-affiliated entities such as the Wagner Group, and which threatens the peace, security, or stability of the Central African Republic and neighboring states.

 

The situation in and in relation to the Central African Republic continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.  For this reason, the national emergency declared in Executive Order 13667 on May 12, 2014, to deal with that threat must continue in effect beyond May 12, 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 with respect to the Central African Republic.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/05/08/notice-on-the-continuation-of-the-national-emergency-with-respect-to-the-central-african-republic-4/

 

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President Biden Continued The National Emergency with Respect to Yemen

 

May 14, 2024: On May 16, 2012, by Executive Order 13611, 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 and foreign policy of the United States constituted by the actions and policies of certain members of the Government of Yemen and others that threatened Yemen’s peace, security, and stability.  These actions include obstructing the political process in Yemen and blocking the implementation of the agreement of November 23, 2011, between the Government of Yemen and those in opposition to it, which provides for a peaceful transition of power that meets the legitimate demands and aspirations of the Yemeni people.

 

The actions and policies of certain former members of the Government of Yemen and others in threatening Yemen’s peace, security, and stability continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.  For this reason, the national emergency declared in Executive Order 13611 on May 16, 2012, to deal with that threat must continue in effect beyond May 16, 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 13611 with respect to Yemen.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/05/14/notice-on-the-continuation-of-the-national-emergency-with-respect-to-yemen-4/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/

 

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President Biden Continued The National Emergency with Respect to the Stabilization of Iraq

 

May 20, 2024: On May 22, 2003, by Executive Order 13303, 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 and foreign policy of the United States posed by obstacles to the orderly reconstruction of Iraq, the restoration and maintenance of peace and security in the country, and the development of political, administrative, and economic institutions in Iraq.

 

The obstacles to the orderly reconstruction of Iraq, the restoration and maintenance of peace and security in the country, and the development of political, administrative, and economic institutions in Iraq continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.  For this reason, the national emergency declared in Executive Order 13303, as modified in scope and relied upon for additional steps taken in Executive Order 13290 of March 20, 2003, Executive Order 13315 of August 28, 2003, Executive Order 13350 of July 29, 2004, Executive Order 13364 of November 29, 2004, Executive Order 13438 of July 17, 2007, and Executive Order 13668 of May 27, 2014, must continue in effect beyond May 22, 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 with respect to the stabilization of Iraq declared in Executive Order 13303.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/05/20/notice-on-the-continuation-of-the-national-emergency-with-respect-to-the-stabilization-of-iraq-4/

https://www.whitehouse.gov/briefing-room/presidential-actions/

 

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President Biden Notifies Congress on Intent to Designate Kenya as a Major Non-NATO Ally

 

May 22, 2024:  In accordance with section 517 of the Foreign Assistance Act of 1961, as amended (22 U.S.C. 2321k), President Biden provided notice on intent to designate Kenya as a Major Non-NATO Ally.

 

President Biden made this designation in recognition of Kenya’s many years of contributions to the United States Africa Command area of responsibility and globally and in recognition of our own national interest in deepening bilateral defense and security cooperation with the Government of Kenya.  Kenya is one of the United States Government’s top counterterrorism and security partners in sub-Saharan Africa, and the designation will demonstrate that the United States sees African contributions to global peace and security as equivalent to those of our Major Non-NATO Allies in other regions.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/05/23/message-to-congress-on-intent-to-designate-kenya-as-a-major-non-nato-ally/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/page/2/

 

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

 

International Traffic in Arms Regulations: Exemption for Defense Trade and Cooperation Among Australia, the United Kingdom, and the United States 

 

May 1, 2024: 89 Fed. Reg. 35028: The Department of State (the Department) proposes to amend the International Traffic in Arms Regulations (ITAR) to support the goals of the AUKUS partnership, the enhanced trilateral security partnership among Australia, the United Kingdom, and the United States. This exemption is designed to foster defense trade and cooperation between and among the United States and two of its closest allies. It is reflective of the nations’ collective commitment to implement shared security standards on protecting defense technology and sensitive military know-how. To achieve this, the Department proposes to amend the ITAR to include an exemption to the requirement to obtain a license or other approval from the Department’s Directorate of Defense Trade Controls (DDTC) prior to any export, reexport, retransfer, or temporary import of defense articles; the performance of defense services; or engagement in brokering activities between or among authorized users within Australia, the United Kingdom, and the United States. The Department also proposes to add a list of defense articles and defense services excluded from eligibility for transfer under the proposed new exemption; add to the scope of the exemption for intra-company, intra-organization, and intra-governmental transfers to allow for the transfer of classified defense articles to certain dual nationals who are authorized users or regular employees of an authorized user within the United Kingdom and Australia; and revise the section on expediting license review applications by referencing new processes for Australia, the United Kingdom, and Canada.

 

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

https://www.federalregister.gov/documents/2024/05/01/2024-08829/international-traffic-in-arms-regulations-exemption-for-defense-trade-and-cooperation-among

 

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30-Day Notice of Proposed Information Collection: Statement of Material Change, Merger, Acquisition, or Divestiture of a Registered Party

 

May 13, 2024: 89 Fed. Reg. 41482: The Department of State has submitted the information collection described below to the Office of Management and Budget (OMB) for approval. In accordance with the Paperwork Reduction Act of 1995. DOS is requesting comments on this collection from all interested individuals and organizations. The purpose of this Notice is to allow 30 days for public comment.

 

The Directorate of Defense Trade Controls (DDTC), Bureau of Political-Military Affairs, U.S. Department of State, in accordance with the Arms Export Control Act (AECA) (22 U.S.C. 2751 et seq.) and the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120-130), has the principal missions of taking final action on license applications and other requests for defense trade transactions via commercial channels, ensuring compliance with the statute and regulations, and collecting various types of reports. By statute, Executive Order, regulation, and delegation of authority, DDTC is charged with controlling the export and temporary import of defense articles, the provision of defense services, and the brokering thereof, which are covered by the U.S. Munitions List.

 

ITAR §§ 122.4 and 129.8 requires registrants to notify DDTC in the event of a change in registration information or if the registrant is a party to a merger, acquisition, or divestiture of an entity producing or marketing ITAR-controlled items. Based on certain conditions enunciated in the ITAR, respondents must notify DDTC of these changes at differing intervals—no less than 60 days prior to the event, if a foreign person is acquiring a registered entity, and/or within 5 days of its culmination. This information is necessary for DDTC to ensure registration records are accurate and to determine whether the transaction is in compliance with the regulations ( e.g., with respect to ITAR § 126.1); assess the steps that need to be taken with respect to existing authorizations ( e.g., transfers); and to evaluate the implications for US national security and foreign policy.

 

 

https://www.federalregister.gov/documents/2024/05/13/2024-10365/30-day-notice-of-proposed-information-collection-statement-of-material-change-merger-acquisition-or

 

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Department of Defense, Defense Security Cooperation Agency (DSCA)

 

DSCA Notifies Congress of Potential FMS Sale To Malaysia

 

May 6, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government Malaysia has requested to buy ten (10) AN/AAQ-33 Sniper Advanced Targeting Pods. Also included are technical data and publications; personnel training; software 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 $80 million. The principal contractor will be Lockheed Martin Corporation, located in Orlando, FL, and The Boeing Company, located in St. Louis, MO. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/malaysia-sniper-advanced-targeting-pods

 

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DSCA Notifies Congress of Potential FMS Sale To the United Arab Emirates

 

May 7, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of the United Arab Emirates (UAE) has requested to buy up to one hundred forty-nine (149) WCU-33/B High-Speed Anti-Radiation Missile (HARM) Control Section Modification (HCSM) upgrade kits. Also included are high bandwidth HSCM telemetry kits loaned for integration support to be used in CONUS use only. This includes HARM Control Section containers; encryption devices; software and mission data support; test flight and live-fire range support; HARM support and test equipment; spare parts and repair and return support; publications and technical documentation; personnel training and training support; design and construction; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistical and program support. The estimated total cost is $144 million. The principal contractor will be RTX Corporation located in Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/united-arab-emirates-high-speed-anti-radiation-missile-harm-control

 

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DSCA Notifies Congress of Potential FMS Sale To Ukraine

 

May 10, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of Ukraine has requested to buy three (3) High Mobility Artillery Rocket Systems (HIMARS). The estimated total cost is $30 million, which will be funded by the Government of Germany on behalf of Ukraine.

 

The Secretary of State has determined and provided detailed justification that an emergency exists that requires the immediate sale to the Government of Ukraine of the above defense articles and services in the national security interests of the United States, thereby waiving the congressional review requirements under Section 36(b) of the Arms Export Control Act, as amended. This will be a sale from U.S. Army inventory. There are no known offset agreements proposed in connection with this potential sale.

 

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

 

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DSCA Notifies Congress of Potential FMS Sale To Romania

 

May 14, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of Romania has requested to buy up to three hundred (300) AIM-9X Sidewinder Block II Tactical Missiles; forty (40) AIM-9X Sidewinder Block II Tactical Missile Guidance Units; forty (40) AIM-9X Sidewinder Block II Captive Air Training Missiles (CATM); and twenty (20) AIM-9X Sidewinder Block II CATM Guidance Units. Also included are missile 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 program cost is $340.8 million. The principal contractor will be RTX Corporation, located In tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

 

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

 

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DSCA Notifies Congress of Potential FMS Sale To NATO

 

May 16, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The NATO Support and Procurement Agency (NSPA) has requested to buy radar equipment spares and additional items and services that will be added to a previously implemented case whose value was under the congressional notification threshold. The original Foreign Military Sales case, valued at $40.26 million, included Alliance Ground Surveillance (AGS) system equipment and support, including: AN/APG-68 radar processors; Global Hawk engine controllers; classified and unclassified spare components and parts; consumables and accessories; repair and return support; facilities support including storage; classified and unclassified publications and technical documentation; classified and unclassified software delivery and support; transportation support; U.S. Government and contractor engineering, technical, and logistics support services; studies and surveys; and other related elements of logistics and program support. This notification is for the combined non-MDE AGS system equipment and services, including: AN/APG-68 radar processors; Global Hawk engine controllers; communications equipment spares; classified and unclassified spare components and parts; consumables, accessories, and repair and return support; facilities support including storage; classified and unclassified publications and technical documentation; classified and unclassified software delivery and support; transportation support; U.S. Government and contractor engineering, technical, and logistics support services; studies and surveys; and other related elements of logistics and program support. The estimated total cost is $250.2 million. The principal contractor will be Northrop Grumman located in Mojave, CA. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/nato-support-and-procurement-agency-alliance-ground-surveillance

 

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DSCA Notifies Congress of Potential FMS Sale To Ukraine

 

May 16, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Ukraine has requested to buy equipment and services for sustainment support of U.S. Army supplied vehicles and weapon systems, utilizing Blanket Orders, Cooperative Logistics Supply Support Arrangement (CLSSA), and/or Simplified Non-Standard Acquisition Program (SNAP), as well as other related elements of logistics and program support. The estimated total cost is $100 million. The principal contractor(s) will be determined from approved vendors. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/ukraine-blanket-order-sustainment-us-army-supplied-systems

 

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DSCA Notifies Congress of Potential FMS Sale to Canada

 

May 21, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Canada has requested to buy an additional six hundred ninety (690) KMU-572 Joint Direct Attack Munition (JDAM) tail kits; seventy-five (75) KMU-556 JDAM tail kits; and twenty-five (25) KMU-557 JDAM tail kits 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 $16.1 million ($11.8 million in MDE), included a total of two hundred ten (210) KMU-572 JDAM tail kits; fifty (50) KMU-556 JDAM tail kits; and twenty-five (25) KMU-557 JDAM tail kits. This notification is for a combined total of nine hundred (900) KMU-572 JDAM tail kits; one hundred twenty-five (125) KMU-556 JDAM tail kits; and fifty (50) KMU-557 JDAM tail kits. Also included are Laser Illuminated Target Detectors; FMU-139 fuzes; weapons support equipment; spare and repair parts, consumables and accessories, and repair and return support; 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. The estimated total cost is $96.4 million. The principal contractor will be Boeing Corporation, located in St. Louis, MO. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/canada-joint-direct-attack-munition-tail-kits

 

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DSCA Notifies Congress of Potential FMS Sale to Brazil

 

May 24, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Brazil has requested to buy twelve (12) UH-60M Black Hawk helicopters; thirty-four (34) T700-GE-701D engines (24 installed, 10 spares); twenty-eight (28) EAGLE-M Embedded Global Position Systems with Inertial Navigation (EGI) or functional equivalent (24 installed, 4 spares); and twenty-four (24) AN/ARC-231A radio systems. The following non-MDE is also included: AN/PYQ-10 Simple Key Loader (SKL), KIV-77 Common Identification Friend or Foe (IFF) crypto appliques, APX-123A Identification Friend or Foe (IFF) transponders; AN/ARC-231 radio systems; ARC-201D Single Channel Ground and Airborne Radio System (SINCGARS) or functional equivalents; ARC-220 high frequency airborne communication systems or functional equivalents with KY-100M; VRC-100 advanced high frequency ground/vehicular communications systems; ARN-147 navigation receivers; ARN-149 low frequency automatic direction finders; ARN-153 advanced digital Tactical Airborne Navigation (TACAN) receiver-transmitters; APN-209 radar altimeter systems; AN/ARC-210 Gen 6 very high frequency/frequency modulation radios; AN/AVR-2B(V) laser warning systems (provisions only); Airspace Concept Evaluation System (ACES); M-134D-H minigun, mount, power supply, and ammunition handling systems gun and mount accessories package; contractor-provided gun and mount accessories, including spare parts, in support of the M-134D-H minigun systems; Aviation Mission Planning System (AMPS); Aviation Ground Support Equipment (AGSE); HGU-56/P Rotary Wing Helmets (RWH); Advanced Sight Display Computers (ASDC); Common Display Interface Units (CDIU); Wide Color Day Display Module (WCDDM); Wide Color Night Display Module (WCNDM); ADS-B Out ability; Integrated Area Navigation (I-RNAV); RDR-7000 weather radar systems; external rescue hoists; Traffic Collision Avoidance Systems (TCAS); Fast Rope Insertion Extraction System (FRIES); EBC-406HM Emergency Locator Transmitters (ELT); Aircrew Combat Equipment (ACE); Internal Auxiliary Fuel Tank System (IAFTS); technical assistance and logistics support services; publications; and other related elements of logistics and program support. The estimated total cost is up to $950 million. The principal contractor will be Lockheed Martin, Sikorsky, located in Stratford, CT. There are no known offset agreements proposed in connection with this potential sale.

 

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

 

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DSCA Notifies Congress of Potential FMS Sale to Austria

 

May 29, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Austria has requested to buy twelve (12) UH-60M Black Hawk helicopters with twenty-six (26) T700-GE-701D engines; fifteen (15) AN/AAR-57 Counter Missile Warning Systems (CMWS); and thirty (30) H-764U Embedded Global Positioning Systems with Inertial Navigation (EGI) with country-unique selective availability anti-spoofing modules (or Future M-Code replacement). The following non-MDE is also included: APR-39C(V)1/4 radar warning receivers; AVR-2B laser detecting sets; AN/ARN-147(V) very high frequency omni-directional range instrument landing system receiver radio; AN/ARN-149(V) low frequency automatic direction finder (ADF) radio receiver; AN/ARN-153 Tactical Air Navigation System (TACAN) receiver transmitter; AN/APN-209 radar altimeter radios; EBC-406HM emergency locator transmitter (ELT); Improved Heads Up Display (IHUD); signal data converters for IHUD; color weather radars; MX-10D electro optical and infrared with laser designator; Engine Inlet Barrier Filters (EIBF); Ballistic Armor Protection Systems (BAPS); 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 and gunner seats with crashworthy floor structural modifications; External Stores Support System (ESSS); instrument panel; cockpit multi-function display (MFD); degraded visual environment (DVE) system; Traffic Alert Collision Avoidance System (TCAS II); cargo hook scale; sling load observation capability; Direction Finder DF-935; environmental control system; snow skis provisions; Bambi bucket provisions; Helicopter Terrain Awareness System (HTAWS); CONRAD troop radio capability; TETRA BOS radio capability; very important person kit; 28 volts of direct current 10 ampere utility power socket (cabin); Universal Serial Bus (USB) charging outlet; Crashworthy Extended Range Fuel Systems (CEFS) tanks; Black Hawk Aircrew Trainer (BAT); 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 support. The estimated cost is $1.05 billion. The principal contractors will be Lockheed Martin, Sikorsky, located in Stratford, CT. There are no known offset agreements in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/austria-uh-60m-blackhawk-helicopters

 

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DSCA Notifies Congress of Potential FMS Sale to Sweden

 

May 29, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Sweden has requested to buy twelve (12) UH-60M Black Hawk helicopters; thirty (30) T700-GE-701D engines (24 installed, 6 spares); and seventeen (17) AN/AAR-57 common missile warning systems (CMWS). The following is also included: AN/APR-39C(V)1/4 radar warning receivers; AN/AVR-2B laser detecting sets; AN/ARN-149(V) low frequency automatic direction finder radio receivers; AN/ARN-153 tactical air navigation systems (TACAN) receiver transmitters; AN/APN-209 radar altimeters; EBC-406HM emergency locator transmitters (ELT); Enhanced Ballistic Armor Protection Systems (EBAPS); Internal Auxiliary Fuel Tank Systems (IAFTS); Fast Rope Insertion Extraction Systems (FRIES); external rescue hoists (ERH); rescue hoist equipment sets; Martin Baker palletized crew chief and gunner seats with crashworthy floor structural modifications; aircraft fire extinguisher cartridge; impulse cartridge; thruster TCU-3/A; 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. The estimated total cost is $900 million. The principal contractor will be Lockheed Martin, Sikorsky, located in Stratford, CT. There are no known offset agreements in connection with this potential sale.

 

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

 

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

 

Export Control Revisions for Australia, United Kingdom, United States (AUKUS) Enhanced Trilateral Security Partnership; Correction

 

May 8, 2024: 89 Fed. Reg. 38837: On April 19, 2024, BIS published in the Federal Register an interim final rule (IFR), “Export Control Revisions for Australia, United Kingdom, United States (AUKUS) Enhanced Trilateral Security Partnership.” The April 19 IFR removed license requirements, expanded the availability of license exceptions, and reduced the scope of end-use and end-user-based license requirements for exports, reexports, and transfers (in-country) to or within Australia and the United Kingdom (UK) to enhance technological innovation among the three countries and support the goals of the AUKUS Trilateral Security Partnership. This correction revises a footnote included in the April 19 IFR to add greater specificity for the Export Control Classification Numbers (ECCN) referenced, so only portions of those 0x5zz ECCNs in the footnote that were previously controlled for national security column 1 (NS1) or regional stability column 1 (RS1) reasons for control for the destinations of Australia and the United Kingdom will continue to require a license to Australia and the United Kingdom based on the license requirements specified in this footnote.

 

https://www.federalregister.gov/documents/2024/05/08/2024-10079/export-control-revisions-for-australia-united-kingdom-united-states-aukus-enhanced-trilateral

 

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Conforming and Clarifying Changes to the Export Administration Regulations (EAR)

 

May 10, 2024: 89 Fed. Reg. 40369: This final rule makes conforming and clarifying changes to the Export Administration Regulations (EAR). These changes include making conforming changes to the EAR to ensure that destination names reflect the current destination names that are recognized by the United States Government, clarifying the removal of certain license requirements for exports, reexports, and transfers (in-country) to and within Australia and the United Kingdom, making a conforming change to reflect that Cyprus is no longer a Country Group D:5 country, and clarifying how Russia and the Russian Federation are referenced for consistency with the designation of Russia as a U.S. Arms Embargoed country.

 

https://www.federalregister.gov/documents/2024/05/10/2024-10280/conforming-and-clarifying-changes-to-the-export-administration-regulations-ear and

https://www.federalregister.gov/documents/search?conditions%5Bpublication_date%5D%5Bgte%5D=05%2F01%2F2024&conditions%5Bpublication_date%5D%5Blte%5D=05%2F31%2F2024&conditions%5Bterm%5D=EAR

 

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Antiboycott Advisory on Turkey

 

May 14, 2024: The Turkish government has recently announced that it will suspend all exports and imports to and from Israel until the Israeli government allows an uninterrupted and sufficient flow of humanitarian aid into Gaza.

 

All United States persons, wherever located, are reminded that, with respect to their activities in United States commerce, the Export Administration Regulations prohibit taking certain actions in furtherance or support of an unsanctioned foreign boycott maintained by a country against a country friendly to the United States and require reporting of receipt of a boycott-related request to BIS.  U.S. companies operating in Turkey, in particular, are cautioned to be alert to their receipt of any requests to refrain from importing or exporting goods to or from Israel or to provide certification that the goods are not of Israeli origin or do not contain Israeli-origin components or materials.

 

https://www.bis.gov/press-release/antiboycott-advisory-turkiye and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

 

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Department of Commerce Announces Revisions to Section 232 Steel and Aluminum Tariff Exclusions Process

 

May 17, 2024: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) published a final rule revising the Section 232 exclusions process for steel and aluminum imports. These changes, effective July 1, 2024, aim to refine the framework under which exclusions from the tariffs on steel and aluminum can be requested, ensuring a fairer and more transparent process.

 

The revisions remove twelve General Approved Exclusions (GAEs), six for steel and six for aluminum. The GAEs were originally established to streamline the exclusions process for products consistently found not to be produced in sufficient quantity or quality in the United States. Reversing previous exemptions that facilitated imports of these metals aims to strengthen our U.S. industrial base and our national security by reducing reliance on foreign manufacturing and enhancing domestic production of steel and aluminum.

https://www.bis.gov/press-release/department-commerce-announces-revisions-section-232-steel-and-aluminum-tariff and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

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U.S. Census Bureau

May 21, 2024: Tips on How to Resolve AES Response Messages

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:  622

Narrative: Schedule B/HTS Number Missing

Severity:  Fatal

Reason:    The Export Information Code is not ‘HH’ for household goods and the Schedule B/HTS Number is missing.

Resolution:  A Schedule B/HTS Number must be declared on an EEI with the exception of household goods reported with Export Information Code ‘HH’.

Verify the Schedule B/HTS Number, correct the shipment and resubmit.

Response Code:  627

Narrative:     1st Unit of Measure Code Unknown

Severity:       Fatal

Reason:  The Schedule B/HTS Number reported requires a 1st Unit of Measure Code to be reported and the 1st Unit of Measure Code is not valid in the AES.

Resolution:  The 1st Unit of Measure Code, based on the Schedule B/HTS reported, must be a valid code contained in Appendix K, Unit of Measure Codes.

Verify the 1st Unit of Measure Code required for the Schedule B/HTS Number reported, correct the shipment and resubmit.

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.

https://www.cbp.gov/document/guidance/ace-appendix-k-unit-measure-codes?utm_campaign=&utm_content=&utm_medium=email&utm_source=govdelivery and

https://www.cbp.gov/document/guidance/aestir-appendix-commodity-filing-response-messages?utm_campaign=&utm_content=&utm_medium=email&utm_source=govdelivery

 

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

 

May 8, 2024: Yuksel Senbol, 36, of Orlando, pleaded guilty to 25 felony counts in Florida federal court, including conspiracy to defraud the United States, conspiracy to commit wire fraud, eight counts of wire fraud, conspiracy to commit money laundering, seven counts of money laundering, conspiracy to violate the Export Control Reform Act (ECRA), four counts of violating the ECRA, and one count of violating the Arms Export Control Act.

 

According to court documents, beginning in approximately April 2019, Senbol operated a front company in the Middle District of Florida called Mason Engineering Parts LLC. She used this front company to assist her co-conspirators, Mehmet Ozcan and Onur Simsek, to fraudulently procure contracts to supply critical military components to the Department of Defense. These components were intended for use in the U.S. Navy Nimitz and Ford Class Aircraft Carriers, U.S. Navy Submarines, U.S. Marine Corps Armored Vehicles, and U.S. Army M-60 Series Tank and Abrahams Battle Tanks, among other weapons systems.

 

Senbol faces up to 10 years in prison for the conspiracy to defraud the United States offense and for each count of money laundering. She faces up to 20 years in prison for each count of conspiracy to commit wire fraud, wire fraud, conspiracy to commit money laundering, conspiracy to violate the ECRA, violating the ECRA and violating the Arms Export Control Act. Sentencing is scheduled for Aug. 6. Alleged co-conspirators Mehmet Ozcan and Onur Simsek are fugitives.

 

https://www.justice.gov/opa/pr/defense-contractor-pleads-guilty-fraud-money-laundering-and-unlawful-export-military-data and

https://www.justice.gov/news?search_api_fulltext=+export&start_date=05%2F01%2F2024&end_date=05%2F31%2F2024&sort_by=field_date

 

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May 22, 2024: The Justice Department announced that Pen Yu, also known as Ben Yu, 51, of Gibsonton, Florida, and Gregory Muñoz, 45, of Minneola, Florida, have each pleaded guilty to one count of wire fraud conspiracy for their roles in a scheme to fraudulently procure deeply discounted products from Massachusetts biochemical company Sigma-Aldrich Inc., doing business as MilliporeSigma, and export them to China using falsified export documents.

 

In addition, the Justice Department announced that it has declined the prosecution of MilliporeSigma after considering the factors set forth in the Department’s Principles of Federal Prosecution of Business Organizations and the National Security Division Enforcement Policy for Business Organizations (NSD Enforcement Policy). The NSD Enforcement Policy creates a presumption that companies that (1) voluntarily self-disclose to NSD potentially criminal violations arising out of or relating to the enforcement of export control or sanctions laws, (2) fully cooperate, and (3) timely and appropriately remediate will generally receive a non-prosecution agreement, unless aggravating factors are present. This is the first time that NSD has declined the prosecution of a company under the NSD Enforcement Policy.

 

https://www.justice.gov/opa/pr/ringleader-and-company-insider-plead-guilty-defrauding-biochemical-company-and-diverting

 

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Sanctions

 

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

 

May 9, 2024: 89 Fed. Reg. 41886: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) added 37 entities to the Entity List under the Export Administration Regulations (EAR). This action reflects BIS ‘s commitment to safeguarding U.S. national security and foreign policy interests. Also, the Commerce Department has added 355 PRC entries to the Entity List – more than any prior Administration.

Among the new entities added to the Entity List, 22 institutes and firms were added for their participation in the People’s Republic of China’s (PRC) quantum technology advancements and for acquiring or attempting to acquire U.S.-origin items to enhance the PRC’s quantum capabilities. These activities have substantial military applications and pose a significant threat to U.S. national security. Additionally, some of these entities are linked to advancements in the PRC’s nuclear programs or have been involved in the shipment of controlled items to Russia following its invasion of Ukraine in February 2022.

Four entities were added for acquiring or attempting to acquire U.S.-origin items to be used by the PRC’s military for its unmanned aerial systems (UAS).

Eleven entities were added under the destination of PRC for their involvement in China’s High Altitude Balloon program, which poses significant national security concerns. This builds on previous actions the Commerce Department took in February 2023 to target PRC aerospace programs, including airships, balloons and related materials.

The list of sanctioned entities can be found below:

  • AEE Shenzhen Yidian Aviation Technology Co., Ltd.;
  • Beijing Academy of Quantum Information Sciences;
  • Beijing BDStar Navigation Co., Ltd;
  • Beijing Leike Defense Technology Co., Ltd.;
  • Beijing Ruidakang Technology Co., Ltd.;
  • Beijing Tianhaida Technology Co., Ltd.;
  • Beijing Zhongshang Dingsheng Mechanical and Electrical Equipment Co., Ltd.;
  • CETC Chip Technology Co., Ltd.;
  • Ceyear Technologies Co., Ltd.;
  • Chengdu Day Communication Technology Co., Ltd.;
  • Chengdu Zongheng Automation Technology Co., Ltd.;
  • China Electronics Technology Group Corporation 16th Research Institute;
  • China Electronics Technology Group Corporation 32nd Research Institute;
  • China Electronics Technology Group Corporation 36th Research Institute;
  • China Electronics Technology Group Corporation 41st Research Institute;
  • China Electronics Technology Group Corporation 45th Research Institute;
  • China Electronics Technology Group Corporation Electronic Equipment Group Co., Ltd.;
  • Chinese Academy of Science, Center for Excellence in Quantum Information and Quantum Physics;
  • Chinese Academy of Sciences, Institute of Physics;
  • Chinese Academy of Sciences, Key Laboratory for Quantum Information;
  • Chinese Academy of Sciences’ Shanghai Institute of Microsystem and Information Technology;
  • CSIC Pride (Nanjing) Cryogenic Technology Co., Ltd.;
  • GEOVIS Technology Co., Ltd.;
  • Hefei National Laboratory for Quantum Information Science;
  • Hexin Xingtong Technology (Beijing) Co., Ltd.,
  • Jinan Institute of Quantum Technology;
  • Origin Quantum Computing Technology (Hefei) Co., Ltd.;
  • Quantum Science and Technology Yangtze River Delta Industrial Innovation Center;
  • Shanghai Center for Quantum Science Research;
  • Shenzhen Institute of Quantum Science and Engineering;
  • Shenzhen Yidian Technology Co., Ltd.;
  • Suzhou Telecom Electric Plant Co., Ltd.;
  • TaiYuan EFT Equipment Manufacturing Co., Ltd;
  • United Microelectronics Center Co., Ltd.;
  • University of Science and Technology of China;
  • Xi’an Hengda Microwave Technology Development Co., Ltd.; and
  • Zhongke Xingtu Space Technology Co., Ltd.

https://www.bis.gov/press-release/commerce-adds-37-prc-entities-entity-list-enabling-prc-quantum-and-aerospace-programs and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

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

 

May 1, 2024: The Department of the Treasury acted to further degrade Russia’s ability to sustain its war machine, continuing a multilateral campaign to limit the Kremlin’s revenue and access to the materiel it needs to prosecute its illegal war against Ukraine. The actions target Russia’s military-industrial base and chemical and biological weapons programs as well as companies and individuals in third countries that help Russia acquire key inputs for weapons or defense-related production.

The United States, along with many international partners, is particularly concerned about entities based in the People’s Republic of China (PRC) and other third countries that provide critical inputs to Russia’s military-industrial base. This support enables Russia to continue its war against Ukraine and poses a significant threat to international security. The almost 300 targets being sanctioned by both Treasury and the Department of State include sanctions on dozens of actors that have enabled Russia to acquire desperately needed technology and equipment from abroad.

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 95, “Authorizing Civil Aviation Safety and Wind Down Transactions Involving Limited Liability Company Aviakompaniya Pobeda,” Russia-related General License 96, “Authorizing Limited Safety and Environmental Transactions Involving Certain Blocked Persons or Vessels,” and Russia-related General License 97, “Authorizing the Wind Down of Transactions Involving Certain Entities Blocked on May 1, 2024.”

Russia-related General License 95: All transactions prohibited by Executive Order (E.O.) 14024 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 Limited Liability Company Aviakompaniya Pobeda are authorized through 12:01 a.m. eastern daylight time, July 30, 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.

Russia-related General License 96: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to one of the following activities involving blocked persons are authorized through 12:01 a.m. eastern daylight time, July 30, 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.

Russia-related General License 97: 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, June 17, 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.

Please see the full list of sanctioned individuals, entities, and vessels at the links below.

https://ofac.treasury.gov/recent-actions/20240501 and https://home.treasury.gov/news/press-releases/jy2318

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May 2, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated five individuals for helping U.S.-designated Hizballah money exchanger Hassan Moukalled (Moukalled) and his company, CTEX Exchange, evade sanctions and facilitate illicit activities in support of Hizballah. These individuals, including two co-founders of CTEX Exchange and two of Moukalled’s sons, operate two companies in Lebanon and the United Arab Emirates (UAE) that were concurrently designated. Individuals and entities targeted are 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-Zein, Mazen Hassan of Lebanon;
  • Mansur, Firas Hasan of Lebanon;
  • Moukalled, Firas Hasan of Lebanon;
  • Mushantaf, Andriyah Samir of Lebanon; and
  • Youssef, Adnan Mahmoud of Lebanon.

 

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

 

  • Teleport Company Sal of Lebanon; and
  • The Crystal Group of the United Arab Emirates.

 

https://home.treasury.gov/news/press-releases/jy2319 and https://ofac.treasury.gov/recent-actions/20240502

 

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May 6, 2024: OFAC has deployed its new Sanctions List Service (SLS).  SLS is now the primary application OFAC will use to deliver sanctions list files and data to the public.

SLS includes support for all OFAC legacy and modern sanctions list data files.

While certain sanctions list data are now hosted within the SLS cloud, existing links to OFAC list files remain functional through URL redirects.

 

https://ofac.treasury.gov/recent-actions/20240506_33 and

https://ofac.treasury.gov/sanctions-list-service

 

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May 7, 2024:  The United States designated Dmitry Yuryevich Khoroshev, a Russian national and a leader of the Russia-based LockBit group, for his role in developing and distributing LockBit ransomware. This designation is the result of a collaborative effort with the U.S. Department of Justice, Federal Bureau of Investigation, the United Kingdom’s National Crime Agency, the Australian Federal Police, and other international partners. Concurrently, the Department of Justice unsealed an indictment and the Department of State announced a reward offer for information leading to the arrest and/or conviction of Khoroshev. The United Kingdom and Australia also announced the designation of Khoroshev.

 

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

 

  • Khoroshev, Dmitry Yuryevich of Russia.

 

https://home.treasury.gov/news/press-releases/jy2326 and

https://ofac.treasury.gov/recent-actions/20240507

 

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May 8, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC)  amended the Reporting, Procedures and Penalties Regulations (RPPR).  The RPPR sets forth standard reporting and recordkeeping requirements and license application and other procedures relevant to the economic sanctions programs administered by OFAC.

 

https://ofac.treasury.gov/recent-actions/20240508 and

https://ofac.treasury.gov/media/932891/download?inline

 

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May 10, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Venezuela General License 8N, “Authorizing Transactions Involving Petróleos de Venezuela, S.A. (PdVSA) Necessary for the Limited Maintenance of Essential Operations in Venezuela or the Wind Down of Operations in Venezuela for Certain Entities.”

 

Venezuela General License 8N:  All transactions and activities prohibited by Executive Order (E.O.) 13850 of November 1, 2018, as amended by E.O. 13857 of January 25, 2019, or E.O. 13884 of August 5, 2019, each as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), that are ordinarily incident and necessary to the limited maintenance of essential operations, contracts, or other agreements, that: (i) are for safety or the preservation of assets in Venezuela; (ii) involve PdVSA or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest; and (iii) were in effect prior to July 26, 2019, are authorized through 12:01 a.m. eastern standard time, November 15, 2024, for the following entities and their subsidiaries (collectively, the “Covered Entities”):

 

  • Halliburton
  • Schlumberger Limited
  • Baker Hughes Holdings LLC
  • Weatherford International, Public Limited Company

 

https://ofac.treasury.gov/recent-actions/20240510 and

https://ofac.treasury.gov/media/932871/download?inline

 

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May 14, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated one Russian individual and three Russia-based companies involved in an attempted sanctions evasion scheme in which an opaque and complex supposed divestment could have unfrozen more than $1.5 billion worth of shares belonging to U.S.-designated Russian oligarch Oleg Vladimirovich Deripaska (Deripaska).

 

OFAC designated Deripaska on April 6, 2018 pursuant to Executive Order (E.O.) 13661 for having acted or purported to act for or on behalf of, directly or indirectly, a senior official of the Government of the Russian Federation as well as pursuant to E.O. 13662 for operating in the energy sector of the Russian Federation economy. Deripaska is also sanctioned by Australia, Canada, the European Union, New Zealand, and the United Kingdom. On September 29, 2022, the U.S. Department of Justice charged Deripaska with conspiring to violate and evade U.S. sanctions in violation of the International Emergency Economic Powers Act.

 

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

 

  • Beloglazov, Dimitrii Aleksandrovich of Russia.

 

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

 

  • Aktsionerno Obshcestvo Iliadis of Russia;
  • International Company Joint Stock Company Raperia Trading Limited of Russia; and
  • Obschestvo Organichennoi Otvetstvennostiu Titlu of Russia.

 

https://ofac.treasury.gov/recent-actions/20240514 and

https://home.treasury.gov/news/press-releases/jy2337 and

https://home.treasury.gov/news/press-releases/sm0338 and

https://www.justice.gov/opa/pr/russian-oligarch-oleg-vladimirovich-deripaska-and-associates-indicted-sanctions-evasion-and

 

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May 15, 2024: the Department of the Treasury’s Office of Foreign Assets Control (OFAC) targeted the Ortega-Murillo regime’s repression of the Nicaraguan people and its ability to manipulate the gold sector and profit from corrupt operations. Treasury imposed sanctions on three Nicaragua-based entities, the Training Center of the Russian Ministry of Internal Affairs in Managua (RTC); Compania Minera Internacional, Sociedad Anónima (COMINTSA); and Capital Mining Investment Nicaragua, Sociedad Anónima (Capital Mining), pursuant to Executive Order (E.O.) 13851, as amended.

The RTC is a Nicaragua-based subdivision of the Government of the Russian Federation’s (GOR) Ministry of Internal Affairs, which trains those under the Ortega-Murillo regime’s command under the Russian authoritarian government’s playbook of oppression. It is a key actor in the Nicaraguan regime’s repression of civil society and unjust detention and imprisonment of individuals for expressing dissent, or otherwise peacefully exercising their human rights and fundamental freedoms.

 

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

 

  • Capital Mining Investment Nicaragua, Sociedad Anonima of Nicaragua;
  • Compania Minera Internacional, Sociedad Anonima of Nicaragua; and
  • Training Center of The Russian Ministry of Internal Affairs in Managua of Nicaragua.

 

https://ofac.treasury.gov/recent-actions/20240515 and

https://home.treasury.gov/news/press-releases/jy2339

 

*******

May 15, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Ali Yagoub Gibril and Osman Mohamed Hamid Mohamed, pursuant to Executive Order (E.O.) 14098, for leading the Rapid Support Forces’ (RSF) war campaign. The RSF’s attacks in North Darfur, which started last month, have caused dozens of civilian casualties, including children. The RSF encirclement of North Darfur’s capital of El Fasher and recent fighting between the RSF and the Sudanese Armed Forces have endangered nearly one million Sudanese civilians in the last major safe haven in Darfur, impeded humanitarian access, increased the risk of mass atrocities, and could undermine vital peace efforts.

 

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

 

  • Gibril, Ali Yagoub of Sudan; and
  • Mohamed, Osman Mohamed Hamid of Sudan.

 

https://ofac.treasury.gov/recent-actions/20240515 and

https://home.treasury.gov/news/press-releases/jy2340

 

*******

 

 

 

 

May 16, 2024:  The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on two Russian individuals and three Russia-based entities for facilitating weapons transfers between Russia and the Democratic People’s Republic of Korea (DPRK). This action promotes U.S. government objectives to disrupt and expose arms transfers between the DPRK and Russia and builds upon sanctions imposed by the Department of the Treasury and the Department of State related to DPRK-Russia arms transfers, including the transfer and testing of DPRK-origin ballistic missiles for Russia’s use against Ukraine. This action demonstrates our resolve to impose costs on and hold the DPRK and Russia to account for their unlawful activities.

 

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

 

  • Budnev, Aleksey of Russia; and
  • Gazaryan, Rafael Anatolyevich of Russia.

 

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

 

  • Rafort Limited Liability Company of Russia;
  • Tekhnologiya, OOO of Russia; and
  • Trans Kapital Limited Liability Company of Russia.

 

https://ofac.treasury.gov/recent-actions/20240516 and

https://home.treasury.gov/news/press-releases/jy2345

 

*******

 

May 16, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended the Iranian Transactions and Sanctions Regulations (ITSR) to incorporate Iran-related General License D-2 and publishing an associated List of Services, Software, and Hardware Incident to Communications, which can be found under the General Licenses and Federal Register Notices sections of the Iran Sanctions page.

 

In addition, OFAC published a new Frequently Asked Question (FAQ) 1173 and amended 26 ITSR-related FAQs.

 

Frequently Asked Question 1173:

 

Q: What are “user authentication services” for purposes of the general license in 31 CFR § 560.540 of the Iranian Transactions and Sanctions Regulations (ITSR)?

 

A: User authentication services are services used to login or verify the identity of a user to a particular software or service, such as a user identification account often used to login to email, mobile app stores, or other activities authorized by 31 CFR § 560.540.

 

*******

 

 

 

 

 

May 17, 2024: 89 Fed. Reg. 43311: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) adopted a final rule amending the Iranian Transactions and Sanctions Regulations (ITSR) to incorporate a general license that was previously published on OFAC’s website. In particular, the rule incorporates, with amendments, a general license relating to the export, reexport, and provision of certain services, software, and hardware incident to communications over the internet. This amendment also makes additional conforming changes.

 

https://www.federalregister.gov/documents/2024/05/17/2024-10721/iranian-transactions-and-sanctions-regulations

 

*******

 

May 28, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated three individuals, Yunhe Wang, Jingping Liu, and Yanni Zheng, for their activities associated with the malicious botnet tied to the residential proxy service known as 911 S5. OFAC also sanctioned three entities—Spicy Code Company Limited, Tulip Biz Pattaya Group Company Limited, and Lily Suites Company Limited—for being owned or controlled by Yunhe Wang.

 

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

 

  • Liu, Jingping of China;
  • Wang, Yunhe of China; and
  • Zheng, Yanni of China.

 

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

 

  • Lily Suites Company Limited of Thailand;
  • Spicy Code Company Limited of Thailand; and
  • Tulip Biz Pattaya Group Company Limited of Thailand.

 

https://ofac.treasury.gov/recent-actions/20240528_33 and

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

 

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May 28, 2024:89 Fed. Reg. 46323: The Department of the Treasury’s (Treasury) Office of Foreign Assets Control (OFAC) amended the Cuban Assets Control Regulations, 31 CFR part 515, (CACR) to further implement the policy announced by the Biden-Harris Administration on May 16, 2022 to increase support for the Cuban people.  These regulatory amendments update and clarify authorizations in support of internet-based services to promote internet freedom in Cuba, support independent Cuban private sector entrepreneurs, and expand access to certain financial services for the Cuban people.

 

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended the Cuban Assets Control Regulations, 31 C.F.R. Part 515 (CACR) to further implement portions of the President’s foreign policy toward Cuba. Among other things, these amendments increase support for internet freedom for the Cuban people and independent Cuban private sector entrepreneurs by expanding authorizations for internet-based services and a range of financial transactions.

 

OFAC is also issuing six new, Cuba-related Frequently Asked Questions (FAQs 1174-1179)

 

FAQ 1174:

 

Q: What level of due diligence are web hosting providers expected to conduct to ensure that a hosted website is not “for the promotion of tourism” pursuant to 31 CFR § 515.578?

 

A: Persons providing web hosting services authorized pursuant to 31 CFR § 515.578 may reasonably rely on information provided to them by their customers in the ordinary course of business, unless they know or have reason to know their provision of web hosting services is for the promotion of tourism.

 

FAQ 1175:

 

Q: Are services related to application programming interfaces (APIs) that are incident to the exchange of communications over the internet authorized for exportation or reexportation to Cuba pursuant to OFAC regulations?

 

A: Yes.  Section 515.578(a)(1)(i) of the CACR authorizes the direct or indirect exportation or reexportation to Cuba, from the United States or by a person subject to U.S. jurisdiction, of certain services. Among these are API-related services incident to the exchange of communications over the internet.  This authorization may include, for example, API services incident to, among other services described in 31 CFR § 515.578(a)(1)(i), web maps, social media platforms, collaboration platforms, video conferencing, and e-gaming and e-learning platforms.  Section 515.578(a)(ii) of the CACR authorizes the direct or indirect exportation or reexportation to Cuba, from the United States or by a person subject to U.S. jurisdiction, of services to support the exchange of communications over the internet, such as software design, business consulting, information technology management services, and cloud-based services (including remote data storage, data transport service, content distribution networks, virtual machines, software-as-a-service, and infrastructure-as-a-service).

With respect to the exportation or reexportation of API software to Cuba, including the download of such software, 31 CFR § 515.533(a) authorizes all transactions ordinarily incident to the export to Cuba of items from the United States, or reexport to Cuba of items from a third country, if the export or reexport is licensed or otherwise authorized by the Department of Commerce pursuant to the Export Administration Regulations (EAR) (15 CFR parts 730 through 774).  For example, the export and reexport to Cuba of certain software is authorized under License Exception Consumer Communications Devices (CCD), 15 CFR § 740.19, and License Exception Support for the Cuban People (SCP), 15 CFR § 740.21.

 

FAQ 1176:

 

Q: What level of due diligence are internet-based service providers expected to conduct to determine whether the intended recipients of an export or reexport are prohibited officials of the Government of Cuba, prohibited members of the Cuban Communist Party, or organizations administered or controlled by the Government of Cuba or the Cuban Communist Party pursuant to 31 CFR § 515.578(b)(1)?

 

A: Section 515.578(b)(1) of the CACR excludes from authorization under 31 CFR 515.578(a)(1)-(3) the direct or indirect exportation or reexportation of services with knowledge or reason to know that such services are intended for a prohibited official of the Government of Cuba, as defined in 31 CFR § 515.337, a prohibited member of the Cuban Communist Party, as defined in 31 CFR § 515.338, or to organizations administered or controlled by the Government of Cuba or the Cuban Communist Party, except as specified in 31 CFR § 515.578(a)(4).

 

For purposes of assessing whether exports or reexports are excluded from 31 CFR § 515.578 pursuant to 31 CFR § 515.578(b)(1), internet-based service providers subject to U.S. jurisdiction may reasonably rely on information provided to them by their customers in the ordinary course of business, unless they know or have reason to know a transaction is not authorized.

 

FAQ 1177:Top of Form

 

Q: What internet-based services can be exported or reexported from the United States or by persons subject to U.S. jurisdiction to prohibited officials of the Government of Cuba, prohibited members of the Cuban Communist Party, or organizations administered or controlled by the Government of Cuba or the Cuban Communist Party?

 

A: Section 515.578(a)(4)(i) of the CACR authorizes the exportation or reexportation, directly or indirectly, from the United States or by a person subject to U.S. jurisdiction, to a prohibited official of the Government of Cuba, as defined in 31 CFR § 515.337, a prohibited member of the Cuban Communist Party, as defined in 31 CFR § 515.338, of certain internet-based services and services related to certain exportations and reexportations, as described in 31 CFR § 515.578(a)(1) or 31 CFR § 515.578(a)(2), respectively, provided that such services are widely available to the public at no cost to the user.  Examples of authorized services include:

  • Social media platforms;
  • Collaboration platforms;
  • Video conferencing;
  • E-gaming and e-learning platforms;
  • Automated translation;
  • Web maps;
  • User authentication services;
  • Cloud-based services to support services described in section § 515.584(a)(1)(i); and

Services to install, repair, or replace items related to communication, or items used to develop software that improves the free flow of information or that will support private sector activities in Cuba consistent with the export or reexport licensing policy of the Department of Commerce.

 

FAQ 1178:

 

Q: Can a good be considered “produced by independent private sector entrepreneurs” for purposes of 31 CFR § 515.582 (authorizing the importation of certain goods and services produced by independent private sector entrepreneurs) if a Cuban state-owned entity is involved?

 

A: Section 515.582 of the CACR authorizes persons subject to U.S. jurisdiction to import certain goods and services produced by independent private sector entrepreneurs, as determined by the State Department and set forth on the State Department’s Section 515.582 List.  See FAQ 770.

In determining whether a good is produced by an independent private sector entrepreneur, as defined in 31 CFR § 515.340, persons subject to U.S. jurisdiction should consider the extent of Cuban state-owned entities’ involvement in the production and exportation of such goods.  For example, goods generally are not considered produced by independent private sector entrepreneurs if the manufacturing or processing conducted by Cuban state-owned entities results in a product with a new name, character, or use.  For example, an agricultural commodity grown by an independent grower but then processed by Cuban state-owned entities into a new product prior to exportation would not be a good produced by an independent private sector entrepreneur for purposes of 31 CFR § 515.582.  However, a good can still be considered produced by an independent private sector entrepreneur if, for example, Cuban state-owned entities are involved only in packing of the final product or acting solely as an export agent.

 

FAQ 1179:

 

Q: What type of small businesses are considered an “independent private sector entrepreneur” (as defined in 31 CFR § 515.340)?

 

A: Section 515.340 defines the term “independent private sector entrepreneur” to mean a Cuban national who is not a prohibited official of the Government of Cuba or a prohibited member of the Cuban Communist Party, and who is one or more of the following:  (a) an owner, including a self-employed individual (cuentapropista), or employee of a small private business entity, private cooperative, or a sole proprietorship located in Cuba, in each case of up to 100 employees; (b) an independent contractor or consultant; (c) a small farmer who owns his or her own land; (d) a small usufruct farmer who cultivates state-owned land to sell products on the open market; or (e) a private cooperative or small private business entity located in Cuba of up to 100 employees that is owned only by individuals described in paragraphs (a) through (d) of § 515.340.  For example, small private business entities or private cooperatives owned only by independent private sector entrepreneurs, as defined, could include:

 

  • Agricultural businesses and farming cooperatives;
  • Animal feed and veterinary services;
  • IT services, software development businesses, and mobile application developers
  • Food and beverage importers, production/processing businesses, packaging and food distributors;
  • Clothing, jewelry, fashion design, and beauty/cosmetics suppliers and services;
  • Historic preservation and cultural preservation businesses;
  • Arts-related businesses;
  • Machinery manufacturing and repair businesses;
  • Shipping, logistics, expediting, and delivery of goods businesses;
  • Medical supply businesses;
  • Restaurants and bars;
  • Taxis and transportation services;
  • Bed and breakfasts;
  • Manufacturing companies;
  • Business consulting services, marketing and branding services;
  • Accounting and bookkeeping services;
  • Home construction business and remodeling, plumbing, electrical, or other repair companies for business or residential facilities and homes;
  • Furniture design and manufacturing companies;
  • Travel services;
  • Vendors of personal care and household items, furniture, and appliances;
  • Interior decoration and design businesses;
  • Film and media production or journalism businesses;
  • Gyms, personal training, or fitness classes; and
  • Mechanical services (automobile, refrigeration, heating and A/C services and repair).

 

 

https://home.treasury.gov/news/press-releases/jy2374 and

https://ofac.treasury.gov/media/932896/download?inline and

https://ofac.treasury.gov/faqs/added/2024-05-28 and

https://ofac.treasury.gov/recent-actions/20240528 and

https://www.federalregister.gov/documents/2024/05/29/2024-11618/cuban-assets-control-regulations

 

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May 30, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) continued to counter Russia’s destabilizing activities in Africa by sanctioning two companies that are linked to the Private Military Company “Wagner” (Wagner Group). Mining Industries SARLU and Logistique Economique Etrangere SARLU are being designated pursuant to Executive Order (E.O.) 14024 for enabling Wagner Group security operations and Wagner Group-linked illicit mining endeavors in the Central African Republic (CAR).

 

Since its arrival in CAR in late 2017, the Kremlin-backed Wagner Group and companies formerly controlled by the now-deceased Yevgeny Prigozhin have established a vast security and business network in CAR, among other African counties. This network has advanced Russia’s destabilizing activities at the expense of CAR’s sovereignty, including the Wagner Group’s destructive operations and Wagner Group-linked companies’ involvement in illicit gold and diamond mining and logging. OFAC has taken previous action against several Wagner Group-linked companies in CAR, including Lobaye Invest, Midas Ressources SARLU, and Bois Rouge SARLU (Bois Rouge), now known as Wood International Group SARLU.

 

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

 

  • Mining Industries Sarlu of the Central African Republic

 

https://ofac.treasury.gov/recent-actions/20240530

 

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May 31, 2024: the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has targeted four entities associated with OFAC-designated Rayan Roshd Afzar Company (RRA) that have procured critical parts for Iran’s unmanned aerial vehicle (UAV) program. Additionally, OFAC has targeted an Iranian executive of Iran Aviation Industries Organization (IAIO), a subsidiary of Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) that oversees UAV manufacturers Iran Aircraft Manufacturing Industrial Company (HESA) and Qods Aviation Industries (QAI).

 

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

 

  • Khajeh Fard, Afshin of Iran.

 

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

 

  • Fanavarihaye Hava Pishran Sazeh Sepehr Co LLC of Iran;
  • Kish Mechatronics Co of Iran;
  • Mersad Mohajer Co LLC of Iran; and
  • Rayan Fan Kav Andish Co of Iran.

 

https://ofac.treasury.gov/recent-actions/20240531

MAY 2024 EXPORT CONTROL REGULATIONS UPDATES Read More »

Department of State Agreement Notifications – Inking the Deal

By Kenneth E. Schmidt, J.D. – Senior Associate

After fording the river and finally getting your Technical Assistance Agreement (“TAA”) of Manufacturing License Agreement (“MLA”) approved by Directorate for Defense Trade Controls (“DDTC”), it can be tempting to start firing off information to and performing defense services for authorized parties.  Like cowboys and cowgirls of the past, however, we need to keep firmly in the saddle and not let the cart drift ahead of our horse.

While approval of a TAA/MLA is a good first step on the journey to share export-controlled information and begin defense services, we need to be careful to disarm those thorny administrative tasks, such as inking the TAA/MLA and providing a copy of the fully executed agreement to DDTC within 30 days of the last signature.  The International Traffic in Arms Regulations (“ITAR”) Part 124.4 states:

(a) The United States party to a manufacturing license or a technical assistance agreement must file one copy of the concluded agreement with the Directorate of Defense Trade Controls not later than 30 days after it enters into force. If the agreement is not concluded within one year of the date of approval, the Directorate of Defense Trade Controls must be notified in writing and be kept informed of the status of the agreement until the requirements of this paragraph or the requirements of § 124.5 are satisfied.

Yes, DDTC wants to see dried ink on that TAA/MLA as a condition precedent to utilizing TAA/MLA authorization.  And while it may seem outdated, digital signatures are still not permitted.

Now the second obligation often overlooked in the excitement and flurry of the next great adventure, is the need to let the sheriff (a/k/a DDTC) know before you set out to export technical data or perform defense services.  This initial notification requirement is set forth in ITAR Part 123.22(b)(3)(ii), which states:

(ii) Manufacturing license and technical assistance agreements. Prior to the initial export of any technical data and defense services authorized in an agreement the U.S. agreement holder must electronically inform DDTC that exports have begun. In accordance with this subchapter, all subsequent exports of technical data and services are not required to be filed electronically with DDTC except when the export is done using a U.S. Port. Records of all subsequent exports of technical data shall be maintained by the exporter in accordance with this subchapter and shall be made immediately available to DDTC upon request. Exports of technical data in furtherance of an agreement using a U.S. Port shall be made in accordance with § 125.4 of this subchapter and made in accordance with the procedures in paragraph (b)(3)(iii) of this section.

Did you catch that “[p]rior to?”  Yep, prior to setting out on the trail with your TAA/MLA, your TAA/MLA must be signed (fully executed), a copy of which provided to DDTC within 30 days after entering into force, and DDTC must be notified prior to the initial export of technical data and/or providing of defense services under the TAA/MLA.

So, if you need help navigating the wild west of TAA/MLA implementation or would like to know what to do if your cart got ahead of the horse, give us a call at 703-847-5801.

Department of State Agreement Notifications – Inking the Deal Read More »

The Department of State Published a Proposed Rule to Create an Exemption for Certain Exports, Reexports, Retransfers, Or Temporary Imports Of Defense Articles Or Defense Services, Or Certain Brokering Activities Between or Among Authorized Users Within Australia, The United Kingdom, And The United States (AUKUS)

By John Herzo, Senior Compliance Associate, FD Associates, Inc.

89 Fed. Reg. 35028

On April 19, 2024, FD Associates, Inc., advised its followers of the U.S. Department of Commerce, Bureau of Industry and Security’s (“BIS”) amendment to the Export Administration Regulations (“EAR”) to remove license requirements, expand the availability of license exceptions, and reduce the scope of end-use and end-user-based license requirements for exports, reexports, and transfers (in-country) to or within Australia and the United Kingdom (“UK”) to enhance technological innovation among the three countries and support the goals of the Governments of Australia, United Kingdom, United States (“AUKUS”).

The Department of State’s (“the Department”) proposed rule for exports by and between AUKUS member nations has been published. On May 1, 2024, the Department of State published a proposed rule in the Federal Register (89 Fed. Reg. 35028) that, if finalized, would create an exemption for certain exports, reexports, retransfers, or temporary imports of defense articles or defense services, or certain brokering activities between or among authorized users within Australia, the United Kingdom, and the United States. The exemption would be available for all defense articles or defense services, except for those contained within a limited excluded list. The proposed rule would also introduce a provision to allow for certain transfers of classified defense articles to certain dual nationals and would codify an expedited license review process for Australia, the United Kingdom, and Canada. Industry may submit comments regarding the proposed rule to the Department by May 31, 2024.

The Department has proposed to amend the International Traffic in Arms Regulations (ITAR) to support the goals of the AUKUS partnership, the enhanced trilateral security partnership among Australia, the United Kingdom, and the United States. This exemption is designed to foster defense trade and cooperation between and among the United States and two of its closest allies. It is reflective of the nations’ collective commitment to implement shared security standards on protecting defense technology and sensitive military know-how.

The proposed new exemption, designed to implement the provisions of new section 38(l) of the Armes Export Control Act (AECA), would be located in ITAR § 126.7 and would provide that no license or other approval is required for the export, reexport, retransfer, or temporary import of defense articles; the performance of defense services; or engagement in brokering activities between or among designated authorized users within Australia, the United Kingdom, and the United States provided certain requirements and limitations are met. These include a list of excluded defense articles and defense services not eligible for the exemption, which can be found in a proposed Supplement No. 2 to Part 126. The scope of excluded defense articles and defense services remain subject to revision and the Department welcomes comment on proposed Supplement No. 2 to Part 126.

 

A summary of the key details regarding the requirements and limitations of the proposed exemption are as follows:

  • In § 126.7(b)(1), the exemption may only be used for transfers to or within the physical territory of Australia, the United Kingdom, or the United States;
  • In § 126.7(b)(2), the pool of eligible members, known as authorized users, is created to facilitate secure defense trade and cooperation. Australia and the United Kingdom’s members will undergo an authorized user enrollment process, in coordination with DDTC, and those members will be listed through the DDTC website. Members located in the United States must be registered with DDTC and not debarred under ITAR § 127.7.
  • In § 126.7(b)(3), the defense articles and defense services listed in Supplement No. 2 to Part 126 are not eligible for this proposed exemption. These items are excluded from eligibility under the proposed exemption because (1) they are exempted from eligibility by statute, including AECA section 38(j)(1)(C)(ii), or (2) are specifically exempted by either the UK, Australia, or the United States, per AECA section 38(l)(4)(A). These items are, however, subject to the expedited licensing procedures listed in § 126.15 and may be reviewed and revised during the lifetime of the exemption.
  • In § 126.7(b)(4), transferors that use this proposed exemption must abide by this requirement for recordkeeping purposes, and such records must be made available to DDTC upon request.
  • In § 126.7(b)(5), the limitations provided exclude exemption use for transfers that would require certification to Congress pursuant to sections 36(c) and 36(d) of the AECA.
  • In § 126.7(b)(6) and (7), the Department is reiterating other ITAR provisions to underscore that the proposed exemption is subject to other requirements within the subchapter, and the named sections are not an exhaustive list.
  • In § 126.7(b)(8), the Department is establishing that classified defense articles and defense services are eligible for transfer under this exemption provided the authorized users in the United States, Australia, and the United Kingdom meet their respective industrial security requirements. For authorized users in the United States, this is the National Industrial Security Program Operating Manual (NISPOM) (32 CFR part 117) and, for Restricted Data, the Atomic Energy Act of 1954, as amended. For Australian authorized users, this is the Defence Security Principles Framework (DSPF) Principle 16 and Control 16.1, Defence Industry Security Program, and for United Kingdom authorized users this is the Government Functional Standards (GovS) 007: Security.
  • The Department is also proposing to add a provision to the exemption in ITAR § 126.18 to allow certain dual nationals of Australia and the United Kingdom to receive classified defense articles without a separate license from DDTC. These persons must be authorized users of the exemption in § 126.7 or regular employees of such authorized users in § 126.7, hold a security clearance approved by Australia, the United Kingdom, or the United States that is equivalent to the classification level of SECRET or above in the United States, and be located within the physical territory of Australia, the United Kingdom, or the United States or be a member of the armed forces of Australia, the United Kingdom, or the United States acting in their official capacity.
  • Lastly, the Department is proposing to revise § 126.15 per the provisions of section 1344 of the NDAA for Fiscal Year 2024. This revised text would note the review of license applications for exports of certain commercial, advanced-technology defense articles and defense services to or between the physical territories of Australia, the United Kingdom, or Canada, and are with government or corporate entities from such countries, shall be processed within certain timeframes. The subject export must not be eligible for transfer under an ITAR exemption. License requests related to a government-to-government agreement between Australia, the United Kingdom, or Canada and the United States must be approved, returned, or denied within 30 days of submission. For all other license applications subject to this section, any review shall be completed no later than 45 calendar days after the date of the application.

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

The Department of State Published a Proposed Rule to Create an Exemption for Certain Exports, Reexports, Retransfers, Or Temporary Imports Of Defense Articles Or Defense Services, Or Certain Brokering Activities Between or Among Authorized Users Within Australia, The United Kingdom, And The United States (AUKUS) Read More »

APRIL 2024 EXPORT CONTROL REGULATIONS UPDATES

This newsletter is a listing of the latest changes in export control regulations through April 30, 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 Continued the National Emergency with Respect to Somalia

April 9, 2024: On April 12, 2010, by Executive Order 13536, 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 deterioration of the security situation and the persistence of violence in Somalia; acts of piracy and armed robbery at sea off the coast of Somalia, which have been the subject of United Nations Security Council resolutions; and violations of the arms embargo imposed by the United Nations Security Council.

On July 20, 2012, the President issued Executive Order 13620 to take additional steps to deal with the national emergency declared in Executive Order 13536 in view of United Nations Security Council Resolution 2036 of February 22, 2012, and Resolution 2002 of July 29, 2011, and to address:  exports of charcoal from Somalia, which generate significant revenue for al-Shabaab; the misappropriation of Somali public assets; and certain acts of violence committed against civilians in Somalia, all of which contribute to the deterioration of the security situation and the persistence of violence in Somalia.

The situation with respect to Somalia 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 12, 2010, and the measures adopted on that date and on July 20, 2012, to deal with that threat, must continue in effect beyond April 12, 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 13536.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/04/09/press-release-notice-on-the-continuation-of-the-national-emergency-with-respect-to-somalia/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/

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President Biden Continued The National Emergency with Respect to Russia

April 9, 2024: On April 15, 2021, by Executive Order 14024, President Biden 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 specified harmful foreign activities of the Government of the Russian Federation.  On March 8, 2022, President Biden issued Executive Order 14066 to expand the scope of the national emergency declared in Executive Order 14024. On August 20, 2021, March 11, 2022, April 6, 2022, and December 22, 2023, President Biden issued Executive Orders 14039, 14068, 14071, and 14114, respectively, to take additional steps with respect to the national emergency declared in Executive Order 14024.

Specified harmful foreign activities of the Government of the Russian Federation — in particular, efforts to undermine the conduct of free and fair democratic elections and democratic institutions in the United States and its allies and partners; to engage in and facilitate malicious cyber-enabled activities against the United States and its allies and partners; to foster and use transnational corruption to influence foreign governments; to pursue extraterritorial activities targeting dissidents or journalists; to undermine security in countries and regions important to United States national security; and to violate well-established principles of international law, including respect for the territorial integrity of states -‑ 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 in Executive Order 14024, which was expanded in scope by Executive Order 14066, and with respect to which additional steps were taken in Executive Orders 14039, 14068, 14071, and 14114, must continue in effect beyond April 15, 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 14024.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/04/09/press-release-notice-on-the-continuation-of-the-national-emergency-with-respect-to-specified-harmful-foreign-activities-of-the-government-of-the-russian-federation/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/page/2/

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President Biden Continued The National Emergency with Respect to the Regulation of the Anchorage and Movement of Russian-Affiliated Vessels to United States Ports

April 16, 2024: On April 21, 2022, by Proclamation 10371, President Biden declared a national emergency by reason of a disturbance or threatened disturbance of international relations of the United States and authorized the Secretary of Homeland Security to regulate the anchorage and movement of Russian-affiliated vessels, pursuant to the National Emergencies Act (50 U.S.C. 1601 et seq.) and section 1 of title II of Public Law 65-24, ch. 30, June 15, 1917, as amended (Magnuson Act) (46 U.S.C. 70051).

The policies and actions of the Government of the Russian Federation to continue the premeditated, unjustified, unprovoked, and brutal war against Ukraine continue to constitute a national emergency by reason of a disturbance or threatened disturbance of international relations 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 the Russian Federation and the emergency authority relating to the regulation of the anchorage and movement of Russian‑affiliated vessels to United States ports set out in Proclamation 10371.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/04/16/press-release-notice-on-the-continuation-of-the-national-emergency-and-of-the-emergency-authority-relating-to-the-regulation-of-the-anchorage-and-movement-of-russian-affiliated-vessels-to-united-stat/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/

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

DDTC Issues General Findings from Visits to Universities and Research Centers

April 10, 2024: The Directorate of Defense Trade Controls issued a white paper providing general findings from visiting various universities and research centers that are engaged in activities of the International Traffic in Arms Regulations from 2020 to early 2024.  The paper provides general compliance commendations, including “best practices” and recommendations that the Office of Defense Trade Controls Compliance provided to the universities following each visit.

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

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

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Proposed Rule: DDTC Registration Fees

April 24, 2024: 89 Fed. Reg. 3119: The State Department published in the Federal Register a proposed rule to amend the International Traffic in Arms Regulations (ITAR).  A link to the proposed rule is provided below.

As a brief summary, for the first time in nearly sixteen years the Department of State proposes to amend the ITAR to increase the fee amounts required for registration with the Directorate of Defense Trade Controls (DDTC).  The proposed rule is necessary to account for inflation, increased operating expenses, and to provide better services to the regulated public and to our partners in the defense industrial base.  The proposed amendments also include:

  • A return of the fee structure to the text of the ITAR at § 122.3;
  • Non-substantive movement of text from ITAR § 122.3 to § 122.2 to better organize content;
  • Revision of a section heading to better describe content;
  • Addition of text regarding registration discounts and how to obtain further guidance; and
  • Conforming changes to brokering in ITAR part 129.

The fee increases are summarized below:

  • Tier 1 registrant’s flat fee would increase from $2,250 to $3,000.
  • Tier 2 registrant’s flat fee would increase from $2,750 to $4,000.
  • Tier 3 registrant’s flat fee would increase from $2,750 to $4,000 and each subsequent favorable determination past the first five instead of ten, would rise from $250 to $1,100.

DDTC will accept comments on this rule through June 10, 2024.

See our detailed article on our website.

https://fdassociates.net/the-fifteen-year-freeze-in-ddtc-registration-fees-sees-a-big-thaw/

https://www.federalregister.gov/documents/2024/04/24/2024-08627/international-traffic-in-arms-regulations-registration-fees and

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

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DDTC Name And Address Changes Posted To Website

April 2 through 29, 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 TRIGO Qualitaire GmbH to TRIGO ADR (Aerospace, Defense, & Rail) Germany GmbH due to corporate rebranding;
  • Change in Name from TRIGO Qualitaire S.A.S. to TRIGO ADR (Aerospace, Defense, & Rail) France S.A.S. due to corporate rebranding;
  • Change in Address for Boeing Defence Australia Ltd. from 150 Charlotte Street, Brisbane, QLD 4000, Australia to 123 Albert Street, Brisbane, QLD 4000, Australia;
  • Change in Name from Harris Communications GmbH to L3Harris Technologies Germany GmbH due to corporate rebranding;
  • Change in Name from Brammer S.A. to Rubix Polska S.A due to merger;
  • Change in Address for TransDigm Inc. from 1301 East 9th Street, Suite 3000, Cleveland, OH 44114 to US Bank Centre, 1350 Euclid Avenue, Suite 1600, Cleveland, OH 44115.
  • Change in Name from L-3 Communications India Private Ltd. to L3Harris Maritime & Aero Private Ltd due to corporate rebranding;
  • The following KNDS N.V. entities will change their name as a result of corporate rebranding;

 

Old Name New Name
Nexter Systems KNDS France
Nexter Munitions KNDS Ammo France
NBC Sys KNDS CBRN
Nexter Mechanics KNDS France Mechanics
OPTSys KNDS Optronics
Nexter Training KNDS France Training
Nexter Robotics KNDS France Robotics
Krauss-Maffei Wegmann GmbH & Co. KG KNDS Deutschland GmbH & Co. KG
BTD Battle Tank Dismantling GmbH KNDS Deutschland Battle Tank Dismantling GmbH
ATM ComputerSysteme GmbH KNDS Deutschland Mission Electronics GmbH
DST Defence Service Tracks GmbH KNDS Deutschland Tracks GmbH
DSL Defence Service Logistics GmbH KNDS Deutschland Maintenance GmbH
KMW Schweisstechnik GmbH KNDS Deutschland Steel Contructions GmbH
MECAR KNDS Belgium
Simmel Difesa S.p.A. KNDS Ammo Italy S.p.A.
WFEL Limited to KNDS Defence UK Limited

 

  • Change in Name from Ball Aerospace & Technologies Corporation to BAE Systems Space & Mission Systems, Inc. due to acquisition;
  • Change in Name from H.C. Starck Inc. to Materion Corporation due to acquisition;
  • The following BAE Systems Saudi Development and Training Company Ltd entities will change their name as a result of a merger with Saudi Maintenance and Supply Chain Management Company Ltd (SMSCMC);

 

Old Name New Name
BAE Systems Saudi Development and Training Company Ltd (SDT) BAE Systems Arabian Industries Ltd
BAE Systems SDT Ltd BAE (UK) Ltd to BAE Systems Arabian Industries (Capability & Training-UK) Ltd
SMSCMC (UK) Ltd BAE Systems Arabian Industries (Supply Chain-UK)

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Newsflash:

The use of digital signatures are not acceptable for signing TAAs per DDTC licensing.

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Department of Defense, Defense Security Cooperation Agency (DSCA)

DSCA Notifies Congress of Potential FMS Sale To Ukraine

April 9, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of Ukraine has requested to buy sustainment-related articles and services for the HAWK Phase III missile system, including engineering and integration for communications and interoperability; refurbishment and system overhaul of HAWK air defense fire units; missile recertification components; tool kits; test equipment; support equipment; technical documentation; spare parts; training; U.S. Government and contractor technical and field office support; and other related elements of logistics and program support. The estimated total cost is $138 million.

The Secretary of State has determined and provided detailed justification that an emergency exists that requires the immediate sale to the Government of Ukraine of the above defense articles and services in the national security interests of the United States, thereby waiving the congressional review requirements under Section 36(b) of the Arms Export Control Act, as amended.

The principal contractors will be RTX Corporation, located in Andover, MA, and PROJECTXYZ, located in Huntsville, AL. Equipment will be supplied from a combination of U.S. Army stock, country donations, Commercial Off-the-Shelf (COTS), and new production. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/ukraine-hawk-phase-iii-missile-system-sustainment

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DSCA Notifies Congress Of Potential FMS Sale to the Kingdom of Saudi Arabia

April 10, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Kingdom of Saudi Arabia has requested to buy fifty (50) Multifunctional Information Distribution System-Low Volume Terminal (MIDS-LVT) Block Upgrade 2 (BU2) Terminals and one hundred (100) additional MIDS-LVT BU2 Retrofit Kits 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 $12.6 million, included thirty-five (35) Multifunctional Information Distribution System Joint Tactical Radio System (MIDS JTRS) and twenty-four (24) MIDS-LVT BU2 Retrofit Kits. The Kingdom of Saudi Arabia has also requested a new FMS case that includes one hundred ninety-four (194) MIDS JTRS and thirteen (13) MIDS-LVT BU2 Terminals. This notification is for a combined total of two hundred twenty-nine (229) MIDS JTRS; sixty-three (63) MIDS-LVT BU2 Terminals; and one hundred twenty-four (124) MIDS-LVT BU2 Retrofit Kits. Also included are TacNet Tactical Radios; Low Volume Terminal Cryptographic Modules; other communications equipment; support equipment; engineering and technical support and assistance; training; and other related elements of logistics and program support. The estimated total cost is $101.1 million. The principal contractor has not been determined as there will be a competitive contractual award process after case implementation. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/kingdom-saudi-arabia-multifunctional-information-distribution-systems

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DSCA Notifies Congress Of Potential FMS Sale to The Government of Iraq

April 15, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of Iraq has requested to buy Contractor Logistics Support (CLS) and training in support of its C-172 and AC/RC-208 aircraft fleet. Included is advising, technical, and proficiency training for Iraqi maintainers and aircrews; CLS; spare and repair parts, components, accessories, and repair and return support; minor modifications and upgrades; subscription services; overhaul and depot level maintenance and maintenance support; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $140 million. The principal contractor will be Northrop Grumman Corporation, located in Falls Church, VA. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/iraq-c-172-and-acrc-208-aircraft-contractor-logistics-support

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DSCA Notifies Congress Of Potential FMS Sale to The Government of Argentina

April 18, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of Argentina has requested to buy Basler BT-67 aircraft; spare engines; spares and repair parts, consumables, accessories, and repair and return services; major modifications and maintenance support; aircraft and ground handling equipment and support; unclassified publications and technical documentation; Technical Coordination Program participation fees; studies and surveys; ferry and transportation support; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $143 million. The principal contractor will be Basler Turbo Conversions located in Oshkosh, WI. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/argentina-basler-bt-67-aircraft

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DSCA Notifies Congress of Potential FMS Sale to The Government of Poland

The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of Poland has requested to buy three hundred sixty (360) Advanced Anti-Radiation Guided Missile-Extended Range (AARGM-ER) All Up Rounds (AUR); eight (8) AGM-88G AARGM-ER Guidance Sections (spares); and eight (8) AGM-88G AARGM-ER Control Sections (spares). Also included are Dummy Air Training Missiles (DATM); missile containers, software; training; support equipment; spare and repair parts; embedded Global Positioning System receiver, M-Code; publications and technical documentation; transportation, 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 $1.275 billion. The principal contractor will be Northrop Grumman Systems located in Falls Church, VA. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/poland-advanced-anti-radiation-guided-missiles-extended-range

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DSCA Notifies Congress of Potential FMS Sale to The Government of the Netherlands

April 24, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of the Netherlands has requested to buy two hundred sixty-five (265) AGM-88G Advanced Anti-Radiation Guided Missiles – Extended Range (AARGM-ER) All Up Rounds (AUR) (includes fifteen (15) Fly-to-Buy Rounds); eight (8) AGM-88G AARGM-ER Guidance Sections (spares); and eight (8) AGM-88G AARGM-ER Control Sections (spares). Also included are Dummy Air Training Missiles (DATM), missile containers; software; training; support equipment; spare and repair parts; embedded GPS receiver, M-Code; publications and technical documentation; transportation; 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 $700 million. The principal contractor will be Northrop Grumman Systems located in Falls Church, VA. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/netherlands-advanced-anti-radiation-guided-missiles-extended-range

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DSCA Notifies Congress of Potential FMS Sale to The Kingdom of Saudi Arabia

April 30, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Kingdom of Saudi Arabia has requested to buy additional blanket order training for Royal Saudi Naval Forces (RSNF) 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 $37 million ($0 in Major Defense Equipment (MDE)), included blanket order training for the RSNF, including: precision targeting, collateral damage reduction, core technical and professional development training, ship repair facility maintainer and language proficiency courses, and professional military education provided by the U.S. Navy. This notification is for the entire blanket order training with an estimated total cost of $250 million. The principal contractor(s) will be determined after contract competition and award. There are no known offset agreements proposed in connection with this sale.

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

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

Commerce Releases Clarifications of Export Control Rules to Restrict the PRC’s Access to Advanced Computing and Supercomputing Items and Semiconductor Manufacturing Equipment

April 4, 2024: 89 Fed. Reg. 23976: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) has published an interim final rule (IFR) revising and clarifying two interim final rules released on October 17, 2023: (1) “Export Controls on Semiconductor Manufacturing Items” (SME IFR); and (2) “Implementation of Additional Export Controls: Certain Advanced Computing Items; Supercomputer and Semiconductor End Use; Updates and Corrections” (AC/S IFR).

The rules released on October 17, 2023, reinforce the October 7, 2022, controls to restrict the People’s Republic of China’s (PRC) ability to both purchase advanced computing chips and manufacture advanced chips critical for military advantage. These rules underscore BIS’ clear focus on strategically addressing the threats to our national security posed by the PRC Government’s military-civil fusion strategy by controlling items necessary to enable the development and production of technologies, such as artificial intelligence (AI), used in military applications. The clarifications in this Interim Final Rule answer questions posed from industry and other stakeholders after the rules were released on October 17, 2023.

Highlights of this new IFR include clarifying that:

  • Computers and other products incorporating integrated circuits that require export notification to BIS also require export notification; and
  • Parts and components exported for ultimate incorporation into indigenous PRC Semiconductor Manufacturing Equipment (SME) require a BIS license for the initial export.

These sector-based controls, originally released on October 7, 2022, are calibrated to address, among other concerns, the PRC Government’s efforts to produce and use advanced integrated circuits. These advanced integrated circuits, produced by critical semiconductor manufacturing equipment, can be used for the next generation of advanced weapon systems. They can also be used for advanced artificial intelligence (AI) applications, which can be leveraged to enhance the speed and accuracy of military decision making, planning, and logistics; cognitive electronic warfare; radar; signals intelligence; and jamming. Advanced AI applications can also be leveraged to monitor, track, and surveil citizens and in other applications that enable human rights violations and abuses.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3355-2023-10-17-bis-press-release-acs-and-sme-rules-final-js/file and

https://www.bis.gov/press-release/commerce-releases-clarifications-export-control-rules-restrict-prcs-access-advanced and

https://www.federalregister.gov/documents/2024/04/04/2024-07004/implementation-of-additional-export-controls-certain-advanced-computing-items-supercomputer-and

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Department of Commerce’s Bureau of Industry and Security (BIS) imposing additional controls to further restrict Iran’s access to low-level technologies.

April 18, 2024: In response to Iran’s unprecedented air attack on Israel, and its continued military cooperation with Russia, the Department of Commerce’s Bureau of Industry and Security (BIS) imposed additional controls to further restrict Iran’s access to low-level technologies, such as basic commercial grade microelectronics. This action will cut off a wider range of items from reaching Iran’s arsenal – including items manufactured outside the U.S. that are produced using U.S. technology. These changes build on BIS’s comprehensive export restrictions on Iran, which already include controls targeting Iran’s involvement in supplying Unmanned Aerial Vehicles (UAVs) in support of Russia’s illegal war in Ukraine.

BIS’s longstanding and expansive controls on dual-use items to Iran and more recent actions against Russia have forced these nations to use lower-level technologies for their military ambitions. Over the past two years, BIS has added controls on thousands of items to inhibit Russia and Iran’s access to necessary components for their war efforts.

https://www.bis.gov/press-release/media-advisory-department-commerces-bureau-industry-and-security-bis-imposing

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Export Control Revisions for Australia, United Kingdom, United States (AUKUS) Enhanced Trilateral Security Partnership

April 19, 2024: 89 Fed. Reg. 28594: The Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) to remove export license requirements, expand the availability of license exceptions, and reduce the scope of end-use and end-user-based license requirements for exports, reexports, and transfers (in-country) to or within Australia and the United Kingdom (UK) to enhance technological innovation among the three countries and support the goals of the AUKUS Trilateral Security Partnership.

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

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

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

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

BIS requires certain transactions involving Canada to be reported in Electronic Export Information (EEI) filings, and these changes now include Australia and the UK for clarity in this requirement. Effective May 1, 2023, No License Required License Code C33 is in effect for 600 Series and other controlled items exported to Australia and the UK.

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

See article posted on our website for more details.

https://fdassociates.net/the-department-of-state-published-a-proposed-rule-to-create-an-exemption-for-certain-exports-reexports-retransfers-or-temporary-imports-of-defense-articles-or-defense-services-or-certain-brokering/

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Export Control Measures Under the Export Administration Regulations (EAR) To Address Iranian Aggression Against Israel and Military Support for Russia

April 22, 2024: 89 Fed. Reg. 2024: The Bureau of Industry and Security (BIS) made changes to the Export Administration Regulations (EAR) to expand the scope of items that require a license for export and reexport to Iran; this rule also expands the scope of the Russia/Belarus/Temporarily occupied Crimea region of Ukraine Foreign Direct Product (FDP) rule and the Iran FDP rule. Certain foreign-made items located outside of the United States are subject to the EAR because they meet criteria specified under one of the FDP rules under the EAR. This final rule expands the product scope of two of the FDP rules to make additional items subject to the EAR and imposes a license requirement when they are reexported or exported from abroad to Iran, Russia, Belarus, or the Temporarily occupied Crimea region of Ukraine. Prior to this rule, BIS had not controlled all foreign transactions involving items covered by this rule, but in light of recent events and the need to fully leverage EAR controls to address U.S. national security and foreign policy interests, these additional controls are now warranted under the EAR.

https://www.federalregister.gov/documents/2024/04/22/2024-08622/export-control-measures-under-the-export-administration-regulations-ear-to-address-iranian and

https://www.federalregister.gov/documents/search?conditions%5Bpublication_date%5D%5Bgte%5D=03%2F30%2F2024&conditions%5Bterm%5D=EAR

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Department of Commerce Establishes New Humanitarian License Exception for Certain Medical Devices

April 25, 2024: 89 Fed Reg 33224: the U.S. Commerce Department’s Bureau of Industry and Security (BIS) published a final rule introducing the new License Exception MED, which enables delivery of humanitarian medical devices to the citizens of Russia, Belarus, and the temporarily occupied areas of Ukraine, consistent with the longstanding practice of authorizing transfers of life-saving medical devices to civilian populaces. At the same time, BIS is maintaining its sweeping restrictions on the export, reexport, or transfer (in-country) of items that could aid Russia’s brutal full-scale invasion of Ukraine.

Specifically, License Exception MED authorizes certain exports, reexports, and transfers (in country) of the following items that are designated as EAR99 to Russia, Belarus, the temporarily occupied Crimea region of Ukraine, and the covered regions of Ukraine: low-level “medical devices” and related low-level “parts,” “components,” “accessories,” and “attachments” that are exclusively for use in or with “medical devices”.

https://www.bis.gov/press-release/department-commerce-establishes-new-humanitarian-license-exception-certain-medical and

https://www.bis.doc.gov/index.php/policy-guidance/countryguidance/russia-belarus and

https://www.federalregister.gov/documents/2024/04/29/2024-09076/amendment-to-existing-controls-on-russia-and-belarus-under-the-export-administration-regulations-ear

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The Department of Commerce, Bureau of Industry and Security Amended The EAR Regarding Firearms And Related Items

April 30, 2024: 89 Fed. Reg. 34680: In this interim final rule (IFR), the Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) to enhance the control structure for firearms and related items. These changes will better protect U.S. national security and foreign policy interests, which include countering the diversion and misuse of firearms and related items and advancing human rights. This rule identifies semi-automatic firearms under new Export Control Classification Numbers (ECCNs); 0A506 and 0A507 adds additional license requirements for Crime Control and Detection (CC) items, thereby resulting in additional restrictions on the availability of license exceptions for most destinations; amends license review policies so that they are more explicit as to the nature of review that will accompany different types of transactions and license exception availability (including adding a new list of high-risk destinations); identifies 36 countries that will be subject to a policy of denial; updates and expands requirements for support documentation submitted with license applications; and better accounts for the import documentation requirements of other countries (such as an import certificate or other permit prior to importation) when firearms and related items are authorized under a BIS license exception. BIS is publishing this rule as an IFR to solicit comments from the public on additional changes to export controls on firearms and related items that would better protect U.S. national security and foreign policy interests. The IFT will become effective May 30, 2024.

Prior to this Interim Final Rule, ECCN 0A501 controlled rifles, pistols, and related “parts,” “components,” and certain “attachments,” and “accessories” on the CCL, while ECCN 0A502 controlled shotguns and related “parts,” “components,” and certain “attachments,” and “accessories.” Neither ECCN distinguished between non-automatic and semi-automatic firearms. BIS was unable to readily identify what share of firearms exports to a country were semi-automatic rifles versus non-automatic pistols because they were controlled under the same item paragraph of ECCN 0A501. Accordingly, BIS was unable to readily disaggregate and review licensing and export data for specific types of end-item firearms or specific “parts,” “components,” “attachments” and “accessories” of most concern. This data gap limited BIS’s ability to efficiently evaluate the export, reexport, transfer (in-country) and diversion of specific types of rifles, pistols, shotguns, and certain “parts,” “components,” “attachments,” and “accessories” that may pose risks to U.S. national security and foreign policy. However, such information is useful to assess the risk of diversion.

To better track the export, reexport, transfer (in-country) and diversion of different types of firearms and related items, this Interim Final Rule adds four new ECCNs to the CCL. ECCN 0A506 controls semi-automatic rifles, ECCN 0A507 controls semi-automatic pistols, ECCN 0A508 controls semi-automatic shotguns, and ECCN 0A509 controls certain “parts,” “components,” devices, “accessories,” and “attachments” for items controlled under ECCNs 0A506, 0A507, and 0A508. The creation of these four new ECCNs will enable BIS to better track and more readily identify exports of end-item semi-automatic firearms and shotguns and certain related “parts,” “components,” “accessories,” and “attachments” of concern when reviewing the Electronic Export Information (EEI) that exporters file in the Automated Export System (AES). Pursuant to § 758.1(g)(1) and (2), an EEI must specify the ECCN of the exported item.

https://www.federalregister.gov/documents/2024/04/30/2024-08813/revision-of-firearms-license-requirements and https://www.federalregister.gov/documents/search?conditions%5Bpublication_date%5D%5Bgte%5D=03%2F30%2F2024&conditions%5Bterm%5D=EAR

In a separate action, BIS has begun sending out letters advising exporters that their existing licenses for non-government end-users in 36 countries are revoked as of July 1, 2024.

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Department of Commerce and Department of Justice

The Departments Of Justice And Commerce Launch The Disruptive Technology Protection Network With Japan And The Republic Of Korea

April 26, 2024: the U.S. Departments of Justice and Commerce launched the Disruptive Technology Protection Network with Japan and the Republic of Korea (ROK), hosting the first high-level trilateral summit in Washington, D.C.  The creation of this network follows an August 2023 Camp David summit between the leaders of the three countries, during which they committed to expanding collaboration on technology protection measures and build connections between representatives of the U.S. Disruptive Technology Strike Force and Japan and ROK counterparts.  The Disruptive Technology Protection Network expands information-sharing and the exchange of best practices across the three countries’ enforcement agencies.

https://www.bis.gov/press-release/departments-justice-and-commerce-launch-disruptive-technology-protection-network and

https://www.whitehouse.gov/briefing-room/statements-releases/2023/08/18/fact-sheet-the-trilateral-leaders-summit-at-camp-david/ and

https://www.bis.gov/news-updates/search?close_filters=1&content_type=press_release&sort_by=created&sort_order=DESC

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U.S. Census Bureau

April 18, 2024: Tips on How to Resolve AES Response Message

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:  170

Narrative: Air Waybill Format: NNN-NNNNNNNN

Severity: Fatal

Reason: The Transportation Reference Number reported for this Air shipment was not in the correct format.

Resolution: A number identifying the carrier’s master air waybill may be declared on an air shipment. When reported, a master air waybill number must be reported in the following format: ‘NNN-NNNNNNNN’ (where ‘N’ = a numeric value).

Verify the Transportation Reference Number, correct the shipment and resubmit.

Response Code:  336

Narrative: Ultimate Consignee State Cannot be Reported

Severity: Fatal

Reason: The Country of Destination reported does not allow a State Code.

Resolution: Report a State Code only if the Country of Destination is the United States or Mexico.

Verify the Ultimate Consignee Country Code and State Code, correct the shipment and resubmit.

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NEW BIS LICENSE TYPES C69 License Exception (MED) – for exports authorized under License Exception Medical Devices (MED)

April 30, 2024: On Monday, April 29, 2024, the Department of Commerce, Bureau of Industry and Security (BIS) published a final rule, Amendment to Existing Controls on Russia and Belarus Under the Export Administration Regulations (EAR) Adding New License Exception Medical Devices (MED); Corrections with an effective date of April 29, 2024.  This final rule established a new License Exception Medical Devices (MED) in § 740.23 of the Export Administrations Regulations (EAR), 15 C.F.R. parts 730 – 774. This license exception as specified under the paragraph (a) (Scope) authorizes the export, reexport, and transfer (in-country) of “medical devices” designated as EAR99 to or within Russia, Belarus, the temporarily occupied Crimea region of Ukraine, or the covered regions of Ukraine (as specified in § 746.6(a)(2) of the EAR).  Paragraph (a) directs exporters, reexporters, and transferors to see Supplement no. 3 to part 774 – Statements of Understanding under paragraph (a) (Statement of Understanding ‑ medical equipment) for guidance on classifying medical equipment and the definition of “medical device” in § 772.1 of the EAR.

Paragraph (a) also specifies that License Exception MED authorizes the export, reexport, or transfer (in country) to or within Russia, Belarus, the temporarily occupied Crimea region of Ukraine, or the covered regions of Ukraine of “parts,” “components,” “accessories,” and “attachments” designated as EAR99 that are exclusively for use in or with “medical devices” designated as EAR99.  For “parts,” “components,” “accessories,” and “attachments” authorized under License Exception MED, such replacement “parts,” “components,” “accessories,” and “attachments” may only be exported, reexported, or transferred (in-country) if they also meet the additional requirements under paragraphs (a)(1) and (2) of § 740.23.

Exports, reexports, and transfers (in-country) authorized under License Exception MED must not be restricted under § 740.23(b) (Restrictions), which restricts “proscribed persons” and any item destined to a “production” “facility” or when you have “knowledge” that the item is intended to develop or produce items.  Exports, reexports, and transfers (in-country) authorized under License Exception MED must also comply with the verification requirements specified in paragraph (c) (Verification) and the recordkeeping requirements specified in paragraph (d) Recordkeeping and review or inspection of records.

As a result of these actions, the following changes will be made to the AES in order for exporters and authorized agents to successfully report electronic export information in the AES.

New License Code C69 License Exception (MED)

An update has been made to AES to create License Type Code C69 MED.

An update has been made to AES to create new License Code C69 “License Exception Medical Devices” (MED), which authorizes certain exports, reexports of any item “medical devices” designated as EAR99 and “parts,” “components,” “accessories,” and “attachments” designated as EAR99 that are exclusively for use in or with “medical devices” designated as EAR99.

The full terms of License Exception MED are described in § 740.23.

AES filers must adhere to the following new reporting when using C69 (MED) to prevent the return of fatal errors from AES:

  • Report License Code: C69 MED.
  • Allowable ECCNs: No ECCNs are allowed. Only EAR99 is allowable.
  • Allowable countries: Belarus, Russia, and Ukraine. (Note that although all of Ukraine is specified as an allowable country in AES, that License Exception MED is only needed to authorize exports exports, reexports, and transfers (in-country) to or within temporarily occupied Crimea region of Ukraine, or the covered regions of Ukraine (as specified in § 746.6(a)(2) of the EAR)).
  • Allowable Export Information Codes: All except UG
  • Allowable Modes of Transportation: All except ‘70’ (Fixed Transport)

https://www.federalregister.gov/documents/2024/04/29/2024-09076/amendment-to-existing-controls-on-russia-and-belarus-under-the-export-administration-regulations-ear?utm_campaign=&utm_content=&utm_medium=email&utm_source=govdelivery and https://www.cbp.gov/document/guidance/aestir-appendix-f-license-and-license-exemption-type-codes?utm_campaign=&utm_content=&utm_medium=email&utm_source=govdelivery

 

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