LATEST EXPORT CONTROLS AND COMPLIANCE UPDATE OCTOBER 2026
This newsletter is a listing of the latest changes in export control regulations through October 31, 2026. 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
Implementing The Lindsey O. Graham Sanctioning Russia And Iran Act Of 2026
October 16, 2026: 91 Fed. Reg. 66627: The President signed an Executive Order (“EO”) waiving the application of certain sanctions, restrictions, and duties provided for in the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 (22 U.S.C. 10802 et seq.) (Graham Act) in the interest of U.S. national interests.
The Graham Act, signed into law on September 18, 2026 provides for the imposition of certain sanctions with respect to foreign persons, restrictions with respect to persons, and duties with respect to goods imported into the United States from the Russian Federation and certain other countries.
The waiver shall remain in effect until such time as the President or the Secretary of State, in consultation with the Secretary of the Treasury and the Trade Representative, as appropriate, determine that further action is appropriate.
*******
Department of State, Directorate of Defense Trade Controls (DDTC)
Amendment to International Traffic in Arms Regulations: Removal of Syria from Section 126.1
October 1, 2026: 91 Fed. Reg. 62313: Effective Thursday, October 1, 2026, the Department of State amended ITAR §126.1 to remove Syria from the list of countries subject to a policy of denial under ITAR §126.1(d)(1).
This amendment removes prohibitions for obtaining licenses or other approvals for export and imports of defense articles (see ITAR §120.31) and defense services (see ITAR §120.32) to and from Syria. The State Department will assess license requests and other approvals for Syria on a case-by-case basis. Relevantly, this amendment codifies the new defense trade policy for Syria Secretary of State Rubio approved on August 19, 2026. The amendment follows the recission of Syria’s designation as a State Sponsor of Terrorism on August 24, 2026.
*******
Open for Comment: Proposed Amendments to International Traffic in Arms Regulations: Review of the U.S. Munitions List (USML) and Related Definitions and License Exemptions
October 1, 2026: 91 Fed. Reg. 62361: The Department of State issued a proposed amendment to the International Traffic in Arms Regulations (ITAR) sections §120.31, §120.32, §120.33, §120.35, §120.41, §120.42, §120.43, §120.54 and §123.26 and to amend the U.S. Munitions List (USML) in ITAR section §121 to remove various items from then USML and ensure that the USML places ITAR controls on the most sensitive technologies. The proposed changes to USML categories include: USML Category II—Guns and Armament, USML Category VIII—Aircraft and Related Articles, USML Category X—Personal Protective Equipment, and USML Category XX—Submersible Vessels and Related Articles. Overall, the changes encapsulated in this proposed rule seek to remove certain items from the USML, update regulatory definitions, standardize regulatory text, and add a new exemption to ITAR licensing requirements.
The proposed rule includes proposals to:
- Narrow controls on submarine parts, components, accessories, and attachments;
- Remove certain radar altimeters, some protective eyewear, and certain
less-lethal canister launchers; - Narrow every catch-all control (each describes items specially designed for a defense article) by excluding twenty specific types of items (e.g., common gauges and circuit breakers) from the ITAR’s definition of specially designed;
- Address a rare set of circumstances by preventing the inadvertent application of ITAR controls to items not previously subject to the regulations by proposing “ What Is Not A Defense Article”;
- Create a new exemption for certain temporary exports of a foreign defense article to its manufacturer;
- Update the definitions of “development,” “production,” “defense article,” and “equivalent;” and
- Clarify the licensing exclusion for the launching of a spacecraft, launch vehicle, payload, or other article into space.
The Department of State is taking public comments on these proposed changes until November 30, 2026.
The Fact Sheet is found here:
https://www.pmddtc.state.gov/sys_attachment.do?sys_id=5d2f488397e7cb100083b3b0f053afdf
The Federal Register Notice is found here:
*******
DDTC Name And Address Changes Posted To Website
October 1, 2026 through October 31, 2026: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at
- Roll-Royce Canada Limited changed its name to FMD Handling Canada ULC;
- Berry Aviation, Inc. changed its name to Bristow Special Mission Inc.;
- Teledyne Technologies Incorporated affiliates changed their names as listed:
- FLIR Systems Australia Pty Ltd, located in Australia, to Teledyne FLIR Australia Pty Ltd
- FLIR Systems Brasil Comercio de Cameras Infravermelhas Ltda., located in Brazil, to Teledyne FLIR Brasil Comercio de Cameras Infravermelhas Ltda
- FLIR Systems GmbH, located in Germany, to Teledyne FLIR Germany GmbH
- FLIR Systems Japan K.K., located in Japan, to Teledyne FLIR Japan K.K.
- FLIR Systems Limited, located in the UK, to Teledyne FLIR UK Limited
- FLIR Systems S.r.l., located in Italy, to Teledyne FLIR Italia S.r.l.
- FLIR Networked Systems, S.L.U., located in Spain, to Teledyne FLIR Networked Systems, S.L.U.
- Thales Canada Inc. (DBA Thales Canada, Defence and Security), changed its address:
- From: 1 Chrysalia Way Ottawa, Ontario Canada K2G 6P9
- To: 500 Palladium Drive, Suite 110 Kanata, Ontario Canada K2v1C2
- Electronica, Informatica, Instrumentacion y Telecommunicaciones, S.A., changed its name to Controlar Innovating Industry Spain S.A.U.
*******
DDTC Final Commodity Jurisdiction Determinations Posted To Website
October 1, 2026: The Directorate of Defense Trade Controls (DDTC) posted the following Final CJ Determinations for CJ’s adjudicated between August 1, 2026 and September 30, 2026, on its website at:
https://www.pmddtc.state.gov/ddtc_public?id=ddtc_kb_article_page&kb_number=KB0011272
| Model Name | Manufacturer | Description | Final Determination | Final Determination Date |
| Left-Hand Filter Mount, Part Number 71004/6/1; Right-Hand Filter Mount, Part Number 71004/5/1; Filter Mount Clamp Ring, Part Number 71004/7 | Avon Protection Systems, Inc. | Parts for respiratory gas mask | Seek a CCATS | 8/16/2026 |
| SpeechMask Part Numbers M2-FI, MX-FI, M2-T (with 8 or 24 channel output), MX-T (with 8 or 24 channel output), VS1-M2, VS1-MX, MS99- M2 (for 1, 2, 3, 4, or 6 talkers), and MS99-MX (for 1, 2, 3, 4, or 6 talkers) |
Intelligent Devices | Designed to enhance speech privacy in sensitive environments through non-cryptographic acoustic processing techniques |
USML Category XI(a)(4)(iii) | 8/16/2026 |
| Rhapsos, Model V0.45.0 | Rhapsos AI | locally deployed software program that can analyze pieces of software code, assess dependencies, and integrate them into an executable software stack | Seek a CCATS | 8/20/2026 |
| Assured Global Positioning System Kit (AGK), Model and Part Number AGK-XN | Navigation Technology Associates, Inc | Self-contained fly-away kit designed to provide power, grounding and GPS Radio Frequency (RF) distribution using a customer furnished antennas |
Seek a CCATS | 8/20/2026 |
| XenoData Bridge (XDB), Model XDB Beta 1 (v0.23) | Xenotran Corporation | software that enables communications over various military radio networks | USML Category XI(d) | 8/25/2026 |
| Skyfire Unmanned Aerial Vehicle Software, Model V2FSCDFRC, Version 0.0.1 | Skyfire AI, Inc. | UAV software for mission planning and tasking | Seek a CCATS | 8/25/2026 |
| Valiant Modular Unmanned Aerial System (UAS), Baseline air vehicle configuration | Printed Aerospace Inc. | Baseline Valiant UAV, designed to support interchangeable payload configurations | Seek a CCATS | 8/25/2026 |
| Advanced Cyber Security Training for Red Teaming and Offensive Operations | Lockstone Technologies LLC | Training on the tools and techniques within the MITRE ATT&CK framework, with specific limitations. | Not a defense service | 8/25/2026 |
| Watchtower software, Version 26.3 | Sherpa 6, Inc. | Standalone device management software suite to centrally provision and manage Android devices, Windows devices, Garmin smartwatches, and commercially available handheld radios | Seek a CCATS | 8/25/2026 |
| MDT ORYX Chassis System, Model ORYX Chassis, Part Number 106018-BLK | Modular Driven Technologies | Aftermarket rifle chassis system | CCL ECCN 0A501.y.1 | 8/25/2026 |
| Temperature Sensor, Part Number 560R835H55 (Modified from Part Number AD590MF) | Corfin Holdings Inc., d/b/a Micross | Radiation hardened integrated circuit | Seek a CCATS | 8/25/2026 |
| Electronic Advanced Ground Launcher System, Version 1 | M-SPEX, LLC dba MSI Defense Solutions |
Counter Unmanned Aerial System (C-UAS) | USML Category IV(b)(2) | 8/28/2026 |
| Un-doped ZnSe Wafers 75mm Diameter x 2mm Thick, Part Number ZnSe_2.0_75 | Radiation Detection Technologies, Inc. | Zinc Selenide wafers | Seek a CCATS | 8/28/2026 |
| DH24 & DH25 Tactical Rifle Slings | Corelock Defense Systems GmbH | Firearms slings | Seek a CCATS | 8/28/2026 |
| DH24 & DH25 Tactical Rifle Slings | Corelock Defense Systems GmbH | Firearms slings with certain IR signature reducing coating | Seek a CCATS | 8/28/2026 |
| Historic Daggers, Swords, and Sabers, Auction Lot Numbers Lot numbers 1206389-15, 1003000-11, 1206762-1, and 1190682-64 | Collectors Firearms | Historic Daggers, Swords, and Sabers, | EAR99 | 8/28/2026 |
| UHTR 6398s semi-solid resin | Polysiloxane resin material used to make composite panels with common fiber reinforcements, designed to handle service temperatures ranging from 500 °F to 1,832 °F with little to no weight loss | Seek a CCATS | 8/31/2026 | |
| Firmware, Model 1111, Part Number S626 | Moore Recovery Services | Specific code for embedding in microchips | Not subject to the ITAR nor the EAR | 8/31/2026 |
| Program Planning & Scheduling Support Services | ClearPlan LLC | Administrative and analytical services used to support program planning, execution monitoring, and reporting activities | Seek a CCATS | 8/31/2026 |
| SoloPulse Core Software Engine (EWALD), Model Number: SPC-D-COR-0001 “EWALD” | SoloPulse Corp. | Radiofrequency signal processing software platform that localizes emitters | Seek a CCATS | 9/4/2026 |
| Ultra Refined Tantalum and Ores | Moore Recovery Services | Ultra refined elemental tantalum, raw lithium, raw tungsten, raw cobalt | Seek a CCATS | 9/4/2026 |
| Cronus ATS Pro 50L-640 Thermal Scope, Part Number 210137 | SportsGear Outdoor Product LLC dba Athlon Optics | Long-range thermal imaging riflescope | USML Category XII(c)(2)(iii) | 9/22/2026 |
| 9606 Pyroceram | Corning Incorporated | Glass-ceramic material | Seek a CCATS | 9/22/2026 |
| Bell Helicopter, UH-1H, Serial Number: 72-21509 | MSS Holdings UK Ltd | Specific helicopter designed and produced by Bell Helicopter | CCL ECCN 9A610.a | 9/22/2026 |
| go2signals-BASIC, go2signals-PMR | Miller Canfield, Paddock and Stone, P.L.C. dba Miller Canfield | radiofrequency signal monitoring and processing software | USML Category XI(b) | 9/22/2026 |
| 6-Wheeled Adaptable Platform, Mothership, Model Number: 6WAP / V2, Part Number: 03-5437 | Richard Childress Racing Enterprises, Inc. | General-purpose, heavy-duty, off-road utility ground mobility and logistics platform | Seek a CCATS | 9/22/2026 |
| Heterojunction Silicon Space Photovoltaic Cells with and without Perovskite Layer | Swift Solar Inc. | Two configurations of solar cells | Seek a CCATS | 9/22/2026 |
| FalcoNet Pro | Cognyte Technologies Israel, Ltd. | Cellular network intelligence gathering software | USML Category XI(b) | 9/23/2026 |
| Stinger Series, Models M and S | Limitless Aeronautics LLC | Elements for drone munitions | USML Category IV(h)(18) | 9/23/2026 |
| AESOP Software, Version 0.4.9 | Integrity Defense Solutions, Inc. | AI Decision Support Platform | Seek a CCATS | 9/23/2026 |
| KTS897 Turboshaft Engine | Kratos Defense & Security Solutions, Inc. | 350 kW turboshaft engine | Seek a CCATS | 9/24/2026 |
| Zephr SDK Version .01 | Zephr.xyz Inc | GNSS positional correction Software Development Kit that does not geolocate sources of jamming or spoofing | CCL ECCN 5A001.f.3.b | 9/29/2026 |
| Helicopter, Model CH-47D, SN 92-0283 | Columbia Helicopters, Inc | Heavy lift tandem rotor helicopter | USML Category VIII(a)(8) | 9/29/2026 |
| Silencer Suppressor Video, Model Number: TWD-1 | Talon Defense Works, LLC | a video depicting a 3D rendering of a sound suppressor for marketing | Seek a CCATS | 9/29/2026 |
| Simplified Survey System – Modernized (TSM) Kit, Model TSM-KV1, Part Number 13806776 | Navigation Technology Associates, Inc | Mounting and survey accessory for the Honeywell TALIN 6000 | Seek a CCATS | 9/29/2026 |
| AT-1300-S Inertial G-Switch | HT Microanalytical, Inc. | Passive acceleration sensor | USML Category III(d)(12) | 9/29/2026 |
| QuadRF Kit, Model r.10, Part Number CS-QUADRF-01 | Scale RF Inc. | Software defined radio with populated printed circuit board | Seek a CCATS | 9/29/2026 |
| HIVE INT | Jackal Design LLC | handheld HF/VHF radio | Seek a CCATS | 9/29/2026 |
| PYLON | Harrow Defense, LLC | a compact body-worn electronic device that exchanges data with peer PYLON nodes over bluetooth low energy (BLE) sensors | Seek a CCATS | 9/29/2026 |
| Dewar Cooler Assembly Parts and Components | AMETEK Inc. | Dewar Cooler Parts and Components | USML Category XII(e)(15) | 9/30/2026 |
| Bullfrog Version 3.0 Part Number BF001v3 and Bullfrog Main operating software | Allen Control Systems Inc. | Remote controlled weapons station | Bullfrog v3: USML Category XII(a)(1)
Bullfrog Main operating software: |
9/30/2026 |
| AX ID Marker, Model Number Gen 1 | AX Innovations Corp | Identification marker that attaches to clothing or equipment and is visible through LWIR/MWIR thermal imaging systems | Seek a CCATS | 9/30/2026 |
| 1) Multi-Mission Remote Firing Device (MM-RFD), CC-RFD-001 2) Raider Strike Micro Unmanned Ground Vehicle (UGV), CC-RDR-001 3) CC Explosively Formed Penetrator (EFP) Liner, 2-inch, CC-EFP-002 4) CC EFP Liner, 3-inch, CC-EFP-003 5) CC EFP Liner, 4-inch, CC-EFP-004 6) Shock Tube Management System (STMS), Rail Roll 50, CC-STMS-001 7) STMS, Rail Roll 100, CC-STMS-002 8) STMS, Mag Roll, CC-STMS-003 |
Controller Concepts LLC | Subset of the elements of the Robotic Breaching and Clearance Kit (RBCK) for integration with legged quadruped unmanned ground vehicles | 1) MM-RFD: USML Category IV(c) 2) Raider Strike Micro UGV: USML Category IV(c) for the MM-RFD; see § 120.11(c) 3) CC EFP Liner, 2-inch: USML Category IV(h)(18) 4) CC EFP Liner, 3-inch: USML Category IV(h)(18) 5) CC EFP Liner, 4-inch: USML Category IV(h)(18) 6) STMS, Rail Roll 50: Seek a CCATS 7) STMS, Rail Roll 100: Seek a CCATS 8) STMS, Mag Roll: Seek a CCATS |
10/7/2026 |
| STABL3D, Version 1.0 | VirtusAero LLC | a computational fluid dynamics tool for the analysis of supersonic and hypersonic boundary layers | EAR99 | 10/7/2026 |
| FireFLY LE Acoustic Gunshot Detection System | Hyperion Technology Group, Inc. | Law enforcement system using stationary acoustic sensors and centralized analysis | Seek a CCATS | 10/7/2026 |
*******
Bureau of Political-Military Affairs (BPMA)
BPMA Notified Congress of Potential Foreign Military Sales (FMS) to the following countries, the details of which can be found at the links below:
- Kuwait – Patriot Missile Repair and Return
- United Arab Emirates – Advanced Precision Kill Weapon System-II Guidance Sections
- Egypt – Javelin Missiles
https://www.state.gov/releases/bureau-of-political-military-affairs/2026/10/egypt-javelin-missiles/
- Australia – Tomahawk Capability Development
- The Netherlands – Common Infrared Countermeasure Systems
- Ukraine – PATRIOT Advanced Capability-3 (PAC-3) Missiles
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
California Man Arrested for Smuggling More Than $300 Million in Export-Controlled Computer Servers to China
October 1, 2026: Greg Lui, 38, also known as “Yiu Kong Lui,” was arrested on October 1, 2026 on a three-count federal indictment charging him with smuggling more than $300 million worth of export-controlled high-end computer servers containing U.S.-manufactured graphics processing units (GPUs), commonly used for Super Intelligence (SI) applications, to China. Lui owns Earthmade Computer Inc., a City of Industry-based technology company. From 2023 to 2024, Lui and his co-conspirators used this company to buy and send export-controlled high-end computer servers containing GPUs manufactured by companies that specialize in SI computing to Malaysia and Singapore then illegally re-exported them to China. As part of the scheme, Lui and his co-conspirators avoided getting the necessary licenses the U.S. Department of Commerce requires for shipping to China by providing false documentation to U.S.-based manufacturers misrepresenting the servers would be shipped to permissible end users and end destinations not requiring an export license. Lui then employed various freight forwarding companies to ship the export-controlled servers to countries such as Malaysia and Singapore. Once the servers arrived in these locations, Lui worked with his coconspirators to reship the items to China. From January 2024 to October 2024, Lui’s company Earthmade Inc. received more than $176 million from two Malaysia-based shipment companies as part of the scheme.
“Protecting America’s national security means keeping our advanced Super Intelligence technology from being used to strengthen our adversaries’ military capabilities,” said First Assistant U.S. Attorney Bill Essayli for the Central District of California. “This defendant allegedly used false paperwork and shipments through third countries to smuggle more than $300 million in export-controlled computer servers to China. We will aggressively prosecute those who put our national security at risk for profit.”
Lui is charged with one count of conspiracy to violate the Export Control Reform Act and the Export Administration Regulations, one count of outbound smuggling, and one count of conspiracy to commit money laundering. If convicted of all charges, Lui could face a maximum penalty of 20 years in prison on the conspiracy count, a maximum penalty of 20 years in prison on the money laundering count, and a maximum penalty of 10 years in prison on the smuggling count.
*******
BIS Reaches Administrative Enforcement Settlement with Lambda Research Corporation
October 2, 2026: BIS reached a conditional $2 million settlement with Lambda Research Corporation (“Lambda”) for 66 violations of unlicensed software exports between April 10, 2021 and August 12, 2025, to parties on the Entity List and parties on the Unverified List. Specifically, Lambda exported or transmitted licenses for optical and illumination design software designated EAR99 to Huawei Technologies Japan K.K. (“Huawei Japan”) and Shenzhen SiCarrier Technologies Co., Ltd. (“SiCarrier”), parties on the Entity List, and entered into agreements to service and update such software for Huawei Japan and SiCarrier. In addition, Lambda exported a license for optical and illumination software designated EAR99 to Southern Marine Science and Engineering Laboratory, Sun Yat-Sen University (“SMSEL”), an entity on the Unverified List, without obtaining Unverified List Statements (“UVL”).
The violations involved:
- Lambda acting with knowledge of a violation would occur or reason to know including awareness of high probability that such export constituted a violation.
- Lambda exporting to Huawei Japan CodeMeter USB dongles that contained software licenses for TracePro, OSLO, IGES, and STEP software without BIS authorizations. The export of the software license constituted transfers of “access information” under the EAR.
- Lambda providing annual maintenance and support subscriptions to Huawei Japan without BIS auhorizations. These maintenance and support subscriptions enabled Huawei Japan to access the technical support and download section of Lambda’s website, including new releases of Lambda software, documentation, libraries, utilities, examples, and tutorials. Maintenance and support subscriptions also provided Huawei Japan access to periodic automatic updates of licensed Lambda software, including the TracePro, OSLO, IGES, and STEP software.
- Lambda exporting software to SiCarrier and Huawei Japan via automatic software updates.
- Lambda failing to obtain a UVL Statement in accordance with the EAR.
BIS will suspend the $2 million penalty if Lambda:
- Appoints at least two employees/officers to handle export compliance;
- Completes employee compliance training within 3 months; and.
- Completes an internal audit within 9 months.
https://media.bis.gov/media/documents/lambda-research-corporation-10-2-2026.pdf
*******
The Justice Department Moves to Strip Citizenship from 40 Criminals in Largest Single-Period Filing Under the Trump Administration
October 5, 2026: The Department of Justice announced on October 5, 2026 that between August 21 and October 2, 2026 it has filed 40 denaturalization actions in multiple U.S. district courts for individuals accused of serious offenses.
“Today’s announcement marks the largest denaturalization effort in modern history,” said Attorney General Todd Blanche. “From an individual convicted of espionage to others convicted of sexual offenses against minors, these defendants concealed critical facts from the U.S. government and represent serious criminal offenders. Under President Trump’s leadership, the Department of Justice will continue to employ the denaturalization process to maintain our national security and protect the American people.”
On September 30, 2026, the Department of Justice filed a case in the Southern District of California to denaturalize Jinchao Wei (country of origin: China; Age: 26) for committing espionage on behalf of the Chinese government. Wei enlisted in the Navy in 2021 and by February 2022 had begun conspiring to sell military secrets to China. Wei was arrested and convicted in August 2025 of conspiracy to commit espionage, espionage, and unlawful export of technical data related to defense articles. He was sentenced to 200 months in prison and discharged from the Navy.
*******
Pegasus Worldwide Logistics Settles with OFAC for $175,015 for Apparent Violations of Counter Narcotics Sanctions
October 9, 2026: Pegasus Worldwide Logistics (“Pegasus”), a California-based logistics company and freight forwarder, agreed to pay $175,015 to settle its potential civil liability for apparent violations of OFAC counter narcotics sanctions, as well as OFAC reporting obligations. The apparent violations occurred when Pegasus arranged for the shipment of equipment from a designated supplier in China and failed to identify the equipment as such due to substantial deficiencies in its compliance review and program. Pegasus also initially failed to respond fully to OFAC’s administrative subpoena.
On May 30, 2023, OFAC designated Youli Technology Development Co., Ltd. (“Youli”), a China based supplier of pill press and packaging equipment, pursuant to Executive Order (E.O.) 14059 “Imposing Sanctions on Foreign Persons Involved in the Global Illicit Drug Trade,” for shipping machinery to individuals in the United States involved in the manufacture of counterfeit pills using techniques intended to evade law enforcement scrutiny. As a result of its designation, all property and interests in property of Youli became blocked, and all transactions by U.S. persons involving Youli’s property or interests in property generally became prohibited. Upon its designation, OFAC added Youli to the SDN List and included several additional identifiers, including its phone number and email address. After its designation, Youli changed its name to Huizhou Youli Fushi Co., Ltd. Youli’s other identifiers, however, remained unchanged.
In August 2023, a U.S. nutritional supplement company (the “U.S. Purchaser”) engaged Pegasus to coordinate the purchase and shipment of a customized sugar packet-filling machine valued at $5,950 from Youli. The U.S. purchaser had previously purchased from Youli a tableting machine used to make breath mints and had used Pegasus to assist with that importation. On September 7, 2023, Youli informed the U.S. Purchaser that the sugar packet-filling machine was ready to ship. On September 12, 2023, Pegasus instructed Youli—via communication with an email address identified as associated with Youli on the SDN List—to arrange with a Chinese shipping agent for the machine to be shipped to the United States. The Chinese shipping agent prepared the necessary shipping documents from China and sent them to Pegasus. Those documents identified the shipper using Youli’s new post-designation name, “Huizhou Youli Fushi Co., Ltd,” but included Youli’s unchanged telephone number as OFAC identified it on the SDN List. Pegasus used this information to file an Importer Security Filing (ISF), via a U.S. customs broker, with Customs and Border Protection (CBP). On or after September 28, 2023, Pegasus paid the Chinese shipping agent $146.33 for transporting the machine from China into the United States.
Pegasus’s sanctions compliance procedure made no mention of when to check the SDN List, and, rather than performing any due diligence at the beginning of the transaction, Pegasus waited until just before the machine was to depart China, by which point Pegasus had already engaged in prohibited conduct. After receiving the shipping documents from the Chinese shipping agent, pursuant to its policy, Pegasus performed rudimentary manual sanctions screening by checking “Huizhou Youli Fushi Co., Ltd,” against the SDN List, which resulted in a null response. Youli’s other identifiers, however, including its phone number and email address, remained the same in all the relevant shipping documents and electronic communications following its designation. A Pegasus employee failed to screen these identifiers in contravention of the company’s policy which called for screening “parties’ name, address, email, phone, and other information” against the SDN List. Screening the other identifiers, including through a basic internet search, would have yielded a positive match for Youli.
On October 11, 2023, the sugar packet-filling machine arrived at the port in Long Beach, California. On November 3, 2023, having identified the machine as coming from a blocked person, CBP notified Pegasus that it had detained the machine and issued Pegasus a Detention Notice that identified OFAC as the responsible agency. Neither the Detention Notice nor the mention of OFAC prompted Pegasus to investigate further. Approximately a week later, the U.S. customs broker issued the U.S. Purchaser, via Pegasus, a $1,463.55 invoice for import duties and fees associated with the machine, which Pegasus promptly paid. Pegasus subsequently received $2,358.62 from the U.S. Purchaser covering both these import fees and Pegasus’s fees for freight forwarding services associated with the machine. On December 6, 2023, CBP seized the machine as blocked property.
OFAC issued Pegasus an administrative subpoena seeking information about the machine shortly before CBP seized it. OFAC provided three name variations in its questions related to Youli as well as several other identifiers, including Youli’s email address and phone number as included on the SDN List. On February 1, 2024, Pegasus submitted a certified response denying that it had any responsive information. OFAC thereafter presented Pegasus with the relevant arrival notice, which did not include additional information about Youli, but which did demonstrate Pegasus’s involvement with the shipment of the machine. Only then did Pegasus locate records responsive to OFAC’s administrative subpoena. Pegasus also explained to OFAC that it had failed to provide all necessary information to its attorney at the time its subpoena response was being prepared. On August 8, 2024—six months after Pegasus submitted its first certified response—Pegasus sent OFAC a revised response detailing Pegasus’s involvement with the shipment of the machine.
OFAC determined that Pegasus did not voluntarily self-disclose the apparent IDTSR and RPPR violations (the “Apparent Violations”) and that the Apparent Violations constitute a non-egregious case. Accordingly, under OFAC’s Economic Sanctions Enforcement Guidelines (the “Enforcement Guidelines”), 31 C.F.R. Part 501, app. A., the base civil monetary penalty applicable in this matter equals the sum of the applicable schedule amount, which is $205,900.
The settlement amount of $175,015 reflects OFAC’s consideration of the General Factors under the Enforcement Guidelines.
https://ofac.treasury.gov/media/937206/download?inline
.
*******
U.S. Treasury Announces Record Enforcement Actions Against Bank of America
October 13, 2026: The U.S. Department of the Treasury announced enforcement actions imposing more than $1.21 billion in penalties against Bank of America (“the Bank”), the second-largest bank in the United States, for violations of anti-money laundering and sanctions laws. These actions include the third-largest penalty in Treasury history and the largest in the Office of the Comptroller of the Currency (OCC) history.
- The Financial Crimes Enforcement Network (FinCEN) assessed a $1.2 billion penalty for the Bank’s failure to mitigate and report priority national security risks, including Chinese Money Laundering Networks and illicit finance along the southwest border.
- The OCC assessed a $750 million civil money penalty for the Bank’s deficient and ineffective BSA/AML (anti-money laundering) compliance program.
- The Office of Foreign Assets Control (OFAC) announced an $11.6 million settlement agreement with the Bank over apparent violations of numerous sanctions programs, including on Iran, Russia, narcotics, and global terrorism.
“Financial institutions are on the front lines of protecting our economic and national security,” said Secretary Scott Bessent. “When a bank of this size fails to meet its anti-money laundering and sanctions obligations, the consequences extend far beyond its own walls, exposing the entire U.S. financial system to significant illicit finance risks. Today’s actions send a clear message that even the biggest financial institutions are not above the law.”
Together, these actions underscore the importance of effectively complying with U.S. AML/CFT and sanctions requirements. Given the converging nature of AML/CFT and sanctions-related risks, financial institutions should ensure their AML and sanctions compliance efforts are effectively integrated and mutually reinforcing
Meaningful, risk-based customer due diligence is critical to meeting AML/CFT obligations. Financial institutions must maintain and update customer risk profiles throughout the customer relationship to reflect relevant information, including customer activity, products and services, and geographic exposure. When new information indicates heightened risks or raises AML/CFT concerns, financial institutions must take timely, meaningful action commensurate with those risks. Merely documenting concerns or engaging in prolonged internal reviews without appropriate corrective action does not satisfy an institution’s compliance obligations.
https://home.treasury.gov/news/press-releases/sb0657/
*******
Settlement Agreement between the U.S. Department of the Treasury’s Office of Foreign Assets Control and Bank of America, N.A.
October 13, 2026: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced an $11,662,930 settlement with Bank of America, N.A. Bank of America agreed to settle its potential civil liability for 475 apparent violations of OFAC sanctions programs targeting Russia, Belarus, Iran, Burma, Somalia, narcotics, and global terrorism. The apparent violations occurred when Bank of America processed payments involving blocked banks, failed to appropriately prioritize alerts for customers who were exact name- and date of birth-matches to blocked persons, failed to promptly update watchlists following OFAC designations, and mishandled two business accounts associated with blocked persons due to human error. The settlement amount reflects OFAC’s determination that Bank of America’s apparent violations were non-egregious but largely not voluntarily self-disclosed
https://ofac.treasury.gov/recent-actions/20261013_33 https://ofac.treasury.gov/media/937231/download?inline
Bosnian National Sentenced for Violating International Sanctions Against North Korea
October 14, 2026: Sasa Micev, 43, a Bosnian national, was sentenced to 60 months in federal prison after pleading guilty to federal export and sanctions violations. Micev, an international arms dealer, conspired and attempted to broker the sale of anti-aircraft missiles Man Portable Air Defense Systems.
Micev worked with co-conspirators to violate and evade restrictions imposed by the U.S. Department of the Treasury under the North Korea Sanctions Regulations through brokering the purchase of SA-18 Igla portable surface-to-air missiles from North Korea without the required license or approvals from the Department of Treasury Office of Foreign Assets Control. In late 2020, Micev and the co-conspirator traveled to Ankara, Turkey to meet and complete the sale of the Igla missiles but the sale was not successful due to a price dispute with the North Koreans. Acting Special Agent in Charge Ryan G. McRae of Homeland Security Investigations (HSI) El Paso said “Their willingness to profit from prohibited weapons transactions demonstrates blatant disregard for the law. HSI aggressively pursues those who traffic in restricted military technology and hold them accountable for their actions.”
“U.S. sanctions mean little if those who knowingly evade them face no consequences,” said First Assistant U.S. Attorney Ryan Ellison for the District of New Mexico. “This defendant helped carry out an international scheme to conduct business that U.S. law prohibited, and this sentence holds him accountable for his role.”
*******
Russian National Arrested and Extradited to New York on Charges of Evading Sanctions on Russia
October 15, 2026: Alexander Suvorov, 52, a Russian national, has been charged by a criminal complaint with three counts related to the unlawful exporting of micro-electronic components from the United States to Russia via a front company based in Hong Kong.
“Those, like the defendant, as alleged, who seek to enrich themselves by evading economic sanctions on Russia, must understand that their actions carry serious consequences and will not be tolerated,” said First Assistant U.S. Attorney John A. Sarcone III for the Northern District of New York. “My office, working together with the FBI and the Department of Commerce, will continue to aggressively prosecute these types of cases and hold offenders accountable to the fullest extent of the law. This historic extradition shows that we will fly over 3,800 miles to locate and bring to justice those who threaten national security.”
“Alexander Suvorov was the alleged mastermind behind an international procurement network that illegally supplied buyers in Russia with American-made electronic components that have military applications,” said Assistant Director Roman Rozhavsky of the FBI’s Counterintelligence and Espionage Division. “His extradition to face charges here in the U.S. demonstrates the FBI’s commitment to keeping sensitive, export-controlled technology out of the hands of the Russian military. We will continue working with our law enforcement, intelligence, private sector, and international partners to bring to justice all who attempt to arm our adversaries at the expense of our citizens and our national security.”
“The Bureau of Industry and Security is committed to strong enforcement,” said Special Agent in Charge Jonathan Carson of the U.S. Department of Commerce Bureau of Industry and Security New York Field Office. “Working closely with out law enforcement partners, we will continue to uncover and disrupt illicit procurement and diversion networks wherever they operate.”
Suvorov was extradited from Sweden to the Northern District of New York on Oct. 15 and is expected to have his initial appearance on Oct. 16 in Albany, New York.
The complaint filed against Suvorov alleges that between about March 2022 and April 2023, Suvorov led an illicit procurement network responsible for unlawfully exporting U.S. electronic components out of the United States to Russia. One of the procurement network’s main goals was to fraudulently obtain dual-use electronic components — that is, electronic components with both civilian and military applications — from U.S. companies for shipment to Russia. As alleged in the complaint, Suvorov’s primary role in the procurement network was to maintain front companies based in Hong Kong, including GS Group Limited, which the procurement network used to order electronic components from U.S. companies in an effort to conceal that the end users of the components were in Russia, and to then transship, via Hong Kong, the components from the U.S. companies to the end users in Russia. Suvorov and his companies are also alleged to have sent multiple wires to various U.S. companies to pay for the electronic components. Some of the components unlawfully purchased and exported to Russia by Suvorov and his procurement network can be used in military communication and radar systems, as well as precision location systems.
Count 1 of the complaint alleges conspiracy to commit international promotional money laundering and carries a maximum penalty of 20 years in prison, three years of supervised release, and a fine of $500,000. Count 2 alleges conspiracy to commit outbound smuggling and carries a maximum penalty of five years in prison, three years of supervised release, and a fine of $250,000. Count 3 alleges conspiracy to violate the Export Control Reform Act (ECRA) and carries a maximum penalty of 20 years in prison, three years of supervised release, and a fine of $1,000,000. A federal district judge will determine the sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
*******
Texas Residents Charged with Offenses Stemming from Trade-Based Money Laundering Scheme
October 21, 2026: KETAN KAMDAR, 61, a resident of Katy, Texas, and JHEEL KAMDAR, 30, of Katy, Texas, have been charged by indictment with offenses related to a trade-based money laundering scheme involving the purchase and sale of used copiers from American companies to pay operators of alleged fraud schemes in India.
The announcement was made by David X. Sullivan, United States Attorney for the District of Connecticut; James Guanci, Special Agent in Charge of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, Boston; P.J. O’Brien, Special Agent in Charge of the New Haven Division of the FBI; Jeff Grimming, Acting Special Agent in Charge of Homeland Security Investigations (HSI), New England; Thomas Demeo, Special Agent in Charge of IRS Criminal Investigation in New England; and Jessica Herrington, Acting Special Agent in Charge of the Defense Criminal Investigative Service, Northeast Field Office.
As alleged in court documents and statements made in court, trade-based money laundering (“TBML”) is a method of money laundering in which criminals use proceeds or anticipated proceeds of illegal activity to purchase goods in one country and then ship the goods to another country where they are resold for currency in the destination country. While the movement of goods may still be useful, the primary goal of TBML is financial movement, not the goods used in the purported commercial activity.
The indictment alleges that Ketan Kamdar, a citizen of India, was the majority owner of Jainam International, Inc., a used copier wholesaler based in Houston, Texas. Ketan Kamdar and his daughter, Jheel Kamdar, were both listed in various corporate filings and other documents as President of Jainam International. Since approximately 2023, Ketan Kamdar and Jheel Kamdar conspired with individuals based in India to launder the proceeds of frauds schemes. The Kamdars used Jainam International to purchase used copiers from companies, including companies based in Connecticut, with fraudulently obtained funds received from their Indian co-conspirators. The copiers were then shipped to Texas, and then to India where they were sold to pay the India-based conspirators in India’s native currency, rupees. The Kamdars fabricated invoices to reflect false sales for items they did not sell, and which misrepresented that the used copiers were sold to companies in Singapore and India that were controlled by the Kamdar family.
As an example, the indictment alleges that in June 2024, a Massachusetts resident (the “victim”) was contacted by a co-conspirator of the Kamdars who claimed to be from the Social Security Administration and told the victim that the victim had been charged with a crime. In order to resolve the purported charges, the victim withdrew approximately $248,000 from a retirement account and, as instructed, deposited the money into five different bank accounts, including more than $48,000 into a bank account held in the name of Jainam International. Jainam International accounted for the funds through fabricated invoices as payments for the sale of used copiers from a company based in India that was controlled by Ketan Kamdar. The proceeds from the sale of the used copiers in India were then used to pay the India-based criminals in rupees.
Ketan Kamdar and Jheel Kamdar were arrested on federal criminal complaints on September 2, 2026. On September 3, 2026, a grand jury in Bridgeport returned an indictment charging each with two counts of money laundering conspiracy, an offense that carries a maximum term of imprisonment of 20 years on each count.
The indictment also seeks the forfeiture of $4,184,295.22.
Ketan Kamdar, a citizen of India, appeared before U.S. Magistrate Judge S. Dave Vatti, pleaded not guilty to the charges in the indictment, and is released on a $1.5 million bond. Jheel Kamdar was arraigned on September 30, 2026, and is released on a $100,000 bond.
U.S. Attorney Sullivan stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This investigation is being conducted by the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement; the Federal Bureau of Investigation; Homeland Security Investigations; the Internal Revenue Service, Criminal Investigation Division; and the Defense Criminal Investigative Service. The case is being prosecuted by Assistant U.S. Attorneys Rahul Kale, Konstantin Lantsman, and Stephanie T. Levick.
*******
U.S. Government Contractor Arrested for Allegedly Leaking National Defense Information
October 23, 2026: A U.S. government contractor was arrested by the FBI for allegedly leaking national defense information to another individual who repeatedly posted classified information to an online publication.
“National defense information is classified to protect the American people from bad actors around the world who wish to do us harm,” said Attorney General Todd Blanche. “The details alleged in this affidavit reflect the behavior of a government contractor who exempted himself from a federal law governing the protection of classified information. The Department of Justice will continue prosecuting individuals who leak classified information and put our national security at risk.”
“The FBI arrested the subject after he was caught allegedly betraying his oath and leaking classified defense information,” said FBI Director Kash Patel. “Protecting America’s secrets is a top counterintelligence priority of this FBI – and anyone caught abusing their position of trust within the government by jeopardizing national security and putting our brave warriors at risk will be met with the full weight of justice.”
“Following a referral from the Agency, on Friday, October 23rd, the FBI arrested a contractor who provided services to CIA for alleged unauthorized disclosures of classified information,” said CIA Director John Ratcliffe. “The unauthorized release of classified material poses grave risks to our national security, intelligence sources, ongoing operations, and our officers. There is absolutely zero tolerance for leaking, and anyone who violates their oath will be held accountable and prosecuted to the fullest extent of the law.”
“As alleged, Brinksman reached far outside his own duties to obtain some of our Nation’s most closely held secrets and handed them to a romantic partner he knew intended to publish them,” said Assistant Attorney General for National Security John A. Eisenberg. “That is not carelessness. It is a betrayal of his oath and the American people who entrusted him to fulfill his duties honorably. Those cleared to hold our Nation’s secrets undertake a solemn obligation to protect that information. If proven at trial, this conduct is a grave violation of the Espionage Act, and the National Security Division will prosecute it as such.”
Ian A. Brinksman, 42, of the District of Columbia was arrested following a search of his residence and charged by criminal complaint with unlawfully transmitting national defense information.
According to the criminal complaint, beginning in 2020, the defendant worked as an employee of a U.S. government agency based in the Eastern District of Virginia and later in 2022 began working as a developer for systems integration for “Company 1,” a contractor to the same U.S. government agency. During all times relevant to the complaint, Brinksman held a Top Secret security clearance with Sensitive Compartmented Information (SCI) access.
As further detailed in the complaint, Brinksman had an ongoing personal relationship with an individual who maintains an online publication on Substack (Individual 1). A fundraising article reportedly published by Individual 1 in September 2026 claimed Individual 1 had “published reporting based on classified [relevant U.S. government agency] assessments.” Individual 1 posted on her social media profile, “I also accept leaks.”
*******
Boston Man Sentenced to Prison for Failure to File Export Information
October 26, 2026: A Boston man has been sentenced in federal court in Boston for illegally sending firearms between the United States and the Dominican Republic.
Alexis Lara Herrera, 28, was sentenced by U.S. Senior District Court Judge F. Dennis Saylor IV to eight months in prison, to be followed by two years of supervised release. The defendant is subject to deportation. In May 2026, Herrera pleaded guilty to failure to file export information.
On or about March 18, 2023, law enforcement in the Port of Haina in the Dominican Republic conducted security examinations of international freight in the port. During a search of a shipping container from Brooklyn, New York, they discovered a shipping manifest indicating the container contained household goods. During a search of the container, four Glock firearms and 500 rounds of ammunition were found inside an air conditioner. Further investigation revealed that the shipping container originated in Boston.
Four of the Glock firearms seized in the shipment originated from federally licensed firearms dealers. Herrera was also in communication with multiple co-conspirators throughout the shipment. A search of his phone showed his engagement in firearms smuggling, including texts and a photo of multiple guns. Additional evidence recovered from Herrera’s cell phone indicated that he discussed numerous shipments of firearms to the Dominican Republic, including one in June of 2023 after authorities seized this shipment.
https://www.justice.gov/usao-ma/pr/boston-man-sentenced-prison-failure-file-export-information
*******
National Security Division Announces First “Near Miss” Non-Prosecution Agreement Under the Department-wide Corporate Enforcement Policy
October 27, 2026: The Department of Justice announced that it has entered into a non-prosecution agreement with Extreme Networks, Inc. The company agreed to pay criminal penalties totaling $975,721.84 to resolve the Department’s investigation of sanctions and export control offenses.
The Department reached the agreement under its 2026 Corporate Enforcement and Voluntary Self-Disclosure Policy (“the Policy”), which incentivizes companies to voluntarily disclose discovered misconduct, cooperate with Department investigations, and timely and appropriately remediate the wrongdoing.
This agreement with Extreme Networks marks the Department’s first non-prosecution agreement in a “near-miss” case under the Policy, meaning a case that involved full cooperation and appropriate remediation but did not qualify for a declination of prosecution. While Extreme Networks’ disclosure to the National Security Division (NSD) was not timely because it occurred under imminent threat of disclosure by a news publication, Extreme Networks nonetheless fully cooperated with the Department’s investigation and timely and appropriately remediated the misconduct. As a result, its disclosure qualified as a “Near Miss” Voluntary Self-Disclosure under the Policy.
“This non-prosecution agreement and million-dollar criminal penalty mark the successful resolution of our investigation into the illegal sale of advanced networking equipment and services to a Russian weapons manufacturer, in clear violation of U.S. sanctions and export controls,” said Assistant Director Roman Rozhavsky of the FBI’s Counterintelligence and Espionage Division. “The FBI remains dedicated to keeping sensitive technology out of the hands of the Russian military, and we’re grateful to Homeland Security Investigations and the Bureau of Industry and Security for their partnership on this case. Let this announcement serve as a clear warning: if you attempt to arm our adversaries by violating U.S. law, justice will find you.”
“HSI remains committed to investigating companies and individuals who evade U.S. export controls and sanctions to provide goods or services to foreign weapons manufacturers,” said Acting Special Agent in Charge Jeremy Pierczynski of Homeland Security Investigations (HSI) Detroit. “These laws protect our national security and prevent U.S.-origin products and services from supporting adversaries’ military capabilities. HSI will continue working with our law enforcement and regulatory partners to identify and hold accountable those who undermine these critical safeguards.”
The agreement arose out of an investigation into Extreme Networks’ sales of products and services to Moscow Machinery Building Plant Avangard (MMZA), a Russian weapons manufacturer that was owned by JSC Concern Almaz-Antey (Almaz Antey), which was added to the Specially Designated Nationals and Blocked Persons List by the Department of the Treasury’s Office of Foreign Assets Control (OFAC) in July 2014.
Pursuant to the non-prosecution agreement, Extreme Networks will forfeit $487,860.92 in proceeds from the sanctions and export control offenses and pay a criminal fine of $487,860.92, for a total criminal penalty of $975,721.84. Extreme Networks will also resolve a parallel administrative action by OFAC.
Between around March 2018 and March 2022, Extreme Networks, through its then-Russia based subsidiary, Extreme Networks Rus LLC, processed and fulfilled 11 purchase orders for networking equipment and services to MMZA without the required license or authorization from OFAC. MMZA was a primary producer of the S-300 and S-400 anti-aircraft missile systems used by the Russian army. To facilitate these sales, certain Russia-based Extreme Networks employees concealed the identity of MMZA from Extreme Networks’ global trade compliance group, causing Extreme Networks to file false electronic export information via the Automated Export System and smuggle goods from the United States. Through this scheme, Extreme Networks deprived the U.S. government of its ability to carry out its lawful function of enforcing sanctions and export controls designed to protect national security and economic interests. As a result of its unlawful conduct, Extreme Networks earned approximately $487,860.92 in revenue from the sales of goods and services.
Although Extreme Networks’ self-disclosure to NSD was not timely pursuant to the Policy, Extreme Networks nonetheless cooperated with the Department’s investigation by timely providing relevant facts and documents and making employees available for interviews. Extreme Networks also appropriately remediated the misconduct by terminating its contract with the third-party distributor it used to facilitate these sales, improving screening procedures, hiring additional compliance personnel, and implementing diligence procedures in connection with mergers and acquisitions. Given these steps and the lack of aggravating circumstances, the Department agreed to enter into a non-prosecution agreement.
https://www.justice.gov/opa/media/1468856/dl?inline
*******
Settlement Agreement between the U.S. Department of the Treasury’s Office of Foreign Assets Control and Extreme Networks, Inc.
October 27, 2026: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced an $1,529,685 settlement with Extreme Networks, Inc. (“Extreme”), a North Carolina headquartered cloud networking solutions provider. Between September 2018 and March 2022, Extreme exported networking equipment and related services on nine occasions from the United States to Joint Stock Company (JSC) Moskovskiy Mashinostroitelniy Zavod Avangard, a Russian defense manufacturer that is blocked by operation of law and majority owned by designated JSC Concern Almaz Antey. The settlement amount reflects OFAC’s determination that these apparent violations were voluntarily self-disclosed and egregious.
https://ofac.treasury.gov/recent-actions/20261027
*******
Seattle man arrested on indictment for illegally shipping restricted items to Russia by going through straw buyers in Turkey, Korea, and Kazakhstan
October 27, 2026: A 53-year-old Seattle man was arrested on a twelve-count indictment charging he illegally conspired to ship restricted goods to Russia, violating sanctions put in place after Russia invaded Ukraine, announced Acting U.S. Attorney Charles Neil Floyd. Ilya Pankov, aka Ilia Pankov worked for Pacific Route Inc. and allegedly conspired to evade United States’ export control laws and regulations and smuggle export-controlled mining and other equipment to Russia, without the required license and authorization. Pankov appeared in U.S. District Court in Seattle today and entered a plea of “Not guilty.” Trial was scheduled in front of U.S. District Judge Tana Lin on January 4, 2027.
“As alleged in the indictment, Mr. Pankov conspired with others to find ways to send restricted items to a variety of companies in Russia, and then lied about it to export regulators,” said Acting U.S. Attorney Neil Floyd. “The email exchanges capture in real time the ways they worked to subvert the export control system while they openly discussed using these third-party business in other countries to break the law.”
“The 12 counts in this indictment are wide ranging, but all tied into our core mission of investigating the
illegal movement of people, goods, money, contraband, weapons and sensitive technology into, out of and through the United States,” said Acting HSI Seattle Special Agent in Charge April Miller. “We will continue to investigate anyone who chooses to circumvent the laws of the United States in these areas.”
According to the indictment, Pacific Route is a procurement company, established in 2008 and incorporated in Washington State, that exports construction and mining equipment. Pankov is one of the principals of Pacific Route and the company’s registered agent. The indictment alleges that in February and March 2022, after more restrictions were placed on what goods could be exported to Russia, Pankov conspired with others to continue to ship goods to Russian companies by first sending them to companies in Korea, Turkey, or Kazakhstan, which then sent the goods on to the companies in Russia.
In furtherance of the crime, Pankov and others filed false Electronic Export Information and misrepresented whether a license was needed for the export. The indictment identifies four shipments in 2023 and 2024 that were illegally exported. The indictment identifies two communications in 2024 where Pankov submitted false statements to CBP regarding two shipments that had been seized due to violations of U.S. sanctions. In those communications Pankov falsely claimed that the straw-buyer in Korea was the end user of the items when he knew the items were being shipped to Russian companies by way of Korea.
The indictment alleges that at least $225,000 in proceeds from the illegal sales were then laundered through bank accounts connection with Pacific Route Inc.
Conspiracy is punishable by up to five years in prison. Unlawful exporting of goods is punishable by up to 20 years in prison. Smuggling goods from the U.S. is punishable by up to ten years in prison. Making false statements is punishable by up to five years in prison. Conspiracy to commit money laundering is punishable by up to 20 years in prison.
*******
Homeland Security Task Force: Dual Dominican and French National Sentenced to More Than 5 Years in Federal Prison for Trafficking Firearms
October 28, 2026: DIMITRI BEIX, 29, a Dominican and French citizen and resident of Dominican Republic, was sentenced by U.S. District Judge Vernon D. Oliver in Hartford to 66 months of imprisonment for his role in the illegal trafficking and export of firearms and firearm components from the United States to Dominican Republic.
According to court documents and statements made in court, from at least January 2021 through September 2024, Beix led a scheme to smuggle firearms, firearm components, and ammunition from the U.S. to Dominican Republic without first having obtained the required licenses or authorization from the U.S. Department of Commerce, in violation of the Export Control Reform Act. Beix used a network of suppliers, buyers, and shippers in Connecticut and elsewhere in the U.S. to facilitate his illicit procurement of firearms. Beix provided to his U.S. suppliers a list of firearm parts to purchase on his behalf via eBay and other retailers. Beix, using his own eBay accounts, also purchased more than 100 firearm parts himself and had the items shipped to individuals in the United States. Firearms and parts were then shipped to Beix in Dominican Republic.
In February 2023, Dominican Republic authorities intercepted three parcels shipped from the U.S. to Beix in Dominican Republic. The parcels contained six handguns, Glock slides, trigger assemblies, sight assemblies, rifle magazines, pistol magazines, AM15 rifle parts, a suppressor kit, ammunition, and other firearm components.
Beix has been detained since November 27, 2024, when he was arrested in Sint Maarten at the request of the United States. He was extradited to the United States in February 2026. On August 4, 2026, he pleaded guilty to conspiracy to violate the Export Control Reform Act.
*******
Belarusian Woman Sentenced in D.C. for Illegally Exporting U.S.-Sourced Aviation Components to Russia
October 28, 2026: Yana Leonova, 34, a Belarusian citizen most recently residing in Russia, was sentenced in U.S. District Court to 12 months and one day in federal prison in connection with unlawfully exporting numerous avionics and other aircraft equipment from the United States to Russia, announced U.S. Attorney Jeanine Ferris Pirro.
“Those who attempt to hide behind shell companies, falsified documents, or any other form of evasion to move restricted U.S. goods and technology to our adversaries should understand that their actions will be uncovered,” said Special Agent in Charge Chris Ormerod of the FBI Kansas City Field Office. “This case reflects the diligent work of our agents and partners to identify, disrupt, and hold accountable anyone who seeks to undermine our nation’s security.”
Leonova, aka “Yana Liavonava,” pleaded guilty on May 20 before the Honorable Loren L. AliKhan to violating the Export Control Reform Act. In addition to the 12-month prison term, Judge AliKhan ordered Leonova to be deported to Belarus following completion of her prison sentence.
According to court documents and admissions during the plea hearing, following Russia’s full-scale invasion of Ukraine in 2022, Leonova and her U.S. and Armenian co-conspirators procured aircraft components from U.S.-based distributors and unlawfully exported them from the United States to Russia via Armenia, which resulted in dozens of aircraft components being shipped to Russia and millions of dollars being paid in return.
Leonova and her co-conspirators devised the transshipment route to conceal that U.S.-origin components were bound for Russia and to evade U.S. export controls. Using companies located in Armenia, Leonova and her co-conspirators re-exported the components to Russia without the required licenses from the U.S. Department of Commerce, in violation of federal law.
The exported items were for use on private jets and other aircraft operated or maintained by Leonova’s former employer, a company identified on the U.S. Department of Commerce’s Entity List for engaging in or enabling activities contrary to U.S. national security and foreign policy interests.
In November 2025, Leonova was extradited to the United States from France in connection with this case.
*******
Former U.S. Government Contractor Arrested for Allegedly Leaking National Defense Information and Stealing Night Vision Goggles
October 30, 2026: James Thomas Ashbacher, 37, of Spring Lake, North Carolina, a former U.S. government contractor, was arrested by the FBI for allegedly leaking national defense information by posting the information on a popular social media site, unlawfully retaining other national defense information at his residence, and stealing night vision goggles from the U.S. Army’s Special Operations Command.
Ashbacher was charged by an indictment with unlawfully transmitting and retaining national defense information and with theft of government property.
According to the indictment, beginning in or about 2021, the defendant worked as an employee of a private company that provided security and emergency management services at the U.S. Army Special Operations Command facility in Fort Bragg, North Carolina. To perform the required functions of his employment, Ashbacher held a Top Secret security clearance with Sensitive Compartmented Information (SCI) access.
As further detailed in the indictment, Ashbacher photographed and removed without authorization videos and photographs containing images of classified military operations and transmitted the materials to a social media site. The classified materials were later re-posted by other users to a second social media site. Ashbacher asked a social media user in a private message to remove some materials and further stated that he was “trying to do some damage control.” A search of Ashbacher’s residence also revealed a classified award write-up that contained additional national defense information, along with a night vision goggle system specific to a military unit within Army Special Operations Command that had been reported missing.
Sanctions
Department of Commerce, Bureau of Industry and Security (BIS)
Order Renewing Order Temporarily Denying Export Privileges: Mahan Airways and Associated Parties
October 27, 2026: 91 Fed. Reg. 67542: BIS issued an order renewing its Temporary Denial Order (“TDO”) that prohibits U.S. persons and companies from engaging in direct and indirect transactions with Mahan Airways, Blue Airways, of Yerevan, Armenia (‘‘Blue Airways of Armenia’’), as well as the ‘‘Balli Group Respondents,’’ namely, Balli Group PLC, Balli Aviation, Balli Holdings, two of its officers, Blue Sky One Ltd., Blue Sky Two Ltd., Blue Sky Three Ltd., Blue Sky Four Ltd., Blue Sky Five Ltd., and Blue Sky Six Ltd., all of the United Kingdom.
https://www.bis.gov/media/documents/mahan-airways-tdo-renewal-10.22.26.pdf
*******
Department of the Treasury, Office of Foreign Assets Control (OFAC)
The following is a summary of OFAC actions for October 1 through October 31, 2026.
- Operation Economic Outcast Takes Unprecedented Action Against Sanctions Evasion Network Used by Iran
https://home.treasury.gov/news/press-releases/sb0644/ - Operation Economic Outcast Targets Iran’s Remaining Industrial Lifelines
https://home.treasury.gov/news/press-releases/sb0643/ - Iran-related Designations and Designations Updates; Transnational Criminal Organizations Designation; Publication of Iran-related Determination; Publication of Amended Iran-related Frequently Asked Question
https://ofac.treasury.gov/recent-actions/20261001
- Treasury Dismantles Major Hamas Financing Network
https://home.treasury.gov/news/press-releases/sb0647/
- Counter Terrorism Designations
https://ofac.treasury.gov/recent-actions/20261002
- Treasury Announces Third Round of Sanctions Removals, Updates in Modernization Initiative
https://home.treasury.gov/news/press-releases/sb0650/
- Notice to Foreign Financial Institutions Conducting Business with Iran
https://ofac.treasury.gov/media/937091/download?inline
- Designations Removals; Designations Updates; Publication of Iran-related OFAC Alert; Publication of Amended Iran-related Frequently Asked Question
https://ofac.treasury.gov/recent-actions/20261005
- Treasury Announces Enforcement Penalty for Violation of Outbound Program
https://home.treasury.gov/news/press-releases/sb0652/
- Operation Economic Outcast Neutralizes Iranian Regime’s Remaining Shadow Fleet Network
https://home.treasury.gov/news/press-releases/sb0653/
- Operation Economic Outcast Neutralizes Iranian Regime’s Remaining Shadow Fleet Network
- Iran-related Designations; Issuance of Iran-related General License; Issuance of Amended Russia-related General License
https://ofac.treasury.gov/recent-actions/20261008
- Issuance of Russia-related General License
https://ofac.treasury.gov/recent-actions/20261009_33
- Treasury Targets Cartel del Noreste’s Horse Racing Enterprise and Expansive Criminal Network
https://home.treasury.gov/news/press-releases/sb0656/
- Counter Narcotics and Counter Terrorism Designations
https://ofac.treasury.gov/recent-actions/20261013
- Venezuela-related Designation Removal
https://ofac.treasury.gov/recent-actions/20261014
- Operation Economic Outcast Targets Iranian Regime’s Abuse of Religious Charity Networks
https://home.treasury.gov/news/press-releases/sb0661/ - Operation Economic Outcast Targets Iran’s International Financial Networks and Shadow Banking Architecture
https://home.treasury.gov/news/press-releases/sb0660/
- Sanctioning Cuban State-Owned Banco Internacional de Comercio, S.A. (BICSA)
- Iran-related Designations; Cuba Designation; Issuance of New and Amended General Licenses and Frequently Asked Questions
https://ofac.treasury.gov/recent-actions/20261015
- Issuance of Amended Venezuela-related General License and Frequently Asked Question https://ofac.treasury.gov/recent-actions/20261016
- Imposing Sanctions to Protect Americans from Intellectual Property Theft
- Protecting American Intellectual Property Act of 2022 (PAIPA) Designations; Issuance of Associated General Licenses
https://ofac.treasury.gov/recent-actions/20261019
- Operation Economic Outcast Targets Iran’s Shadow Fleet Networks
https://home.treasury.gov/news/press-releases/sb0664/
- Iran-related Designations; Belarus and North Korea Designations Removals; Issuance of Iran-related and Russia-related General Licenses and Amended Frequently Asked Questions
https://ofac.treasury.gov/recent-actions/20261021
- Issuance of Amended Frequently Asked Questions Regarding Blocking and Rejecting Transactions and Filing Reports with OFAC
https://ofac.treasury.gov/recent-actions/20261026
- Treasury Sanctions Facilitators of DPRK IT Worker Fraud Targeting U.S. Businesses
https://home.treasury.gov/news/press-releases/sb0669/
- Treasury Sanctions Rwandan Ministry of Defence and Financial Institution Supporting M23
https://home.treasury.gov/news/press-releases/sb0668/
- North Korea Designations; Democratic Republic of the Congo-related Designations
https://ofac.treasury.gov/recent-actions/20261028
- Issuance of Amended Iran-related General License
https://ofac.treasury.gov/recent-actions/20261029
*********************
Be sure to catch our upcoming webinars and workshops!
| US Canada Joint Certification Program | November 10, 2026 |
| ITAR AUKUS Exemption | November 17, 2026 |
| ITAR Compliance Programs | November 18 – 19 , 2026 |
| ITAR FMS Exemption | December 1, 2026 |
LATEST EXPORT CONTROLS AND COMPLIANCE UPDATE OCTOBER 2026 Read More »