The Compliance Illusion Why Companies Miss the Risks Sitting Right in Front of Them

By George Canovas, Vice President Compliance, FD Associates

Over the past 35 years, FD Associates has seen just about every version of an export control failure.

Not every compliance failure looks the same. Some companies lack a real program altogether. Others have policies, training, and approvals in place, but still fail because they rely on information that is never independently verified.

What is becoming more visible is not just enforcement activity, but how predictable the underlying pattern has become, even inside organizations that consider themselves compliant.

A recent indcitment of three individuals revealed a significant diversion of advanced US AI enabled servers worth billons of US dollars to China involving the co-founder of the company, who was also a board member and Senior Vice President of Business Development, its office in Taiwan and a third party broker. The FBI described a familiar set of tactics, false documentation, layered intermediaries, and even staged audit environments designed to pass inspection.

What stands out is not how sophisticated the scheme was, but how closely it mirrors structures FD Associates has seen in compliance reviews and audits over the years. The details change, but the underlying mechanics often remain the same.

The Pattern Behind the Headlines

If you take a step back from the headlines and look at how this AI computer diversion unfolded, the structure becomes clear. In this case, a US manufacturer was selling high performance AI servers that required an export license from the Department of Commerce for export to China. Instead of shipping directly, orders were placed through a company in Southeast Asia that did not require an export license and that company was presented as the end user.

Those servers moved through legitimate channels and were delivered as expected. On paper, everything aligned. The destination was permissible, the documentation was in order, and internal approvals for the transaction were obtained.

However, it was from this point that the transaction changed.

The servers were repackaged and redirected. As it turns out, the end user on paper was really a false intermediary and the real end user was in China. The documentation that supported the transaction had been structured to pass internal review, not to reflect reality.

At the same time, when both internal and government inspections were expected, dummy servers were staged to create the appearance that the equipment remained in place. Meanwhile, the actual systems had already moved to their final destination.

Communication between the parties took place outside normal channels, i.e., outside of company emails in encrypted messaging apps and the illegal diversion structure became more aggressive over time, eventually moving significant volumes of controlled technology.

None of this is particularly complex. But clearly it is effective and it is repeatable. Step back from the specifics and the pattern becomes obvious. A legitimate destination is used as a front door. Intermediaries are layered in to create distance from the actual end user. Documentation tells a clean and consistent story, while the logistics chain operates outside the exporters visibility.

By the time anyone looks closely, or even looks at all, the product is already somewhere it was never supposed to be. As mentioned, these are pretty consistent diversion playbook moves, and ones we have seen play out many times in the past.

When dealing in a high risk area such as AI computers, heightened awareness should have prevailed among the C-Suite and functional department leads.

When Everything Looks Right on Paper

In many of these situations, the company involved does not believe it has a compliance issue, in fact, they indicate they have a robust compliance program. There are policies in place, training and there are approval processes that appear to function as intended.

The bottom line is that on paper, the system works. The problem is, and this is important to focus on, that these systems are designed to validate the information they receive. When that information is incomplete, structured, or intentionally misleading, the outcome still appears clean.

We have seen transactions where the stated consignee was not the real end user, where the destination country was technically correct but only temporary, and where intermediaries were involved but never fully understood. In each case, the documentation aligned because it was built to align.

The compliance program did not fail in a traditional sense, it operated on a version of reality that was not accurate.

Where Companies Consistently get Exposed

After enough of these reviews, the same pressure points start to surface.

Third country routing is often treated as low risk, particularly when the initial destination does not require a license. What happens after delivery is assumed rather than verified. Intermediaries are accepted based on familiarity or past dealings, without a clear understanding of who they represent or how they operate within the transaction.

Audits tend to focus on whether documentation is complete and consistent, rather than whether it reflects what actually occurred. Red flags are noticed, but not always escalated in a way that changes the outcome. And in many cases, compliance is brought in after the structure of the transaction has already been set, rather than at the point where decisions are being made.

None of these issues are unusual. That is what makes them so difficult to detect.

The Uncomfortable Part

What makes cases like this resonate is not how unusual they are, but how familiar the underlying patterns feel. Many organizations will recognize elements of this in their own operations, whether they acknowledge it or not. Not at the same scale or with the same intent; but, the structure is often there and structure is what determines outcome.

In most cases, no one thinks they are doing anything wrong. The transaction looks reasonable. The customer seems legitimate. The paperwork is complete. Each step, on its own, makes sense. That is exactly why it gets through.

The best diversions work the same way good magic trick works. They are not about hiding everything. They are about controlling where you look.

Your attention is on the paperwork, so the paperwork is clean.
Your attention is on the stated destination, so the destination appears compliant.
Your attention is on the approval process, so the approvals are in place.

While that is happening, something else is moving just outside that line of sight. Like in all organizations, the process is a checks-and-balances approach where everything is being reviewed in pieces or in steps. Each document checks out, each approval is based on what is presented, and each person is looking at their part of the process. It all checks out.

But what is clear is that no one is seeing the full picture, and by the time someone does, the product has already moved. This is what makes these situations so difficult to catch in real time. Everything is happening at normal speed, and each step looks reasonable on its own.

It is only when you slow down what happened, like an instant replay in sports, that the details become visible. In real time, the play looks clean, not out of bounds. But when it is replayed frame by frame, you start to see what was missed, the slight shift, the extra movement, the moment where the catch occurred out of bounds – something does not line up.

The best diversion schemes work the same way. In real time, the transaction looks complete and consistent. Only when you step back and reconstruct the full sequence do the gaps begin to appear. By then, the outcome is already decided.

The risk is not always in one obvious place. It lives in the gaps between what is documented and what is actually happening, and those gaps are easy to miss when everything is moving as expected. Something that most compliance programs are not designed to catch and this is the reason these situations keep repeating. Not because they are hidden, but because they look normal.

What Actually Works

So, how are these types of issues addressed, you may be wondering. Well, using traditional compliance corrective measures will not address these issues. Again, compliance programs are structures to address company process failures. In these types of cases it’s not about adding more policies or expanding training programs.

What tends to make a difference is how information is validated and how decisions are challenged. That includes independently verifying end use and end user, understanding the full transaction chain rather than just the immediate counterparty, and testing transactions in a way that goes beyond document review.

It also requires a clear separation between commercial pressure and compliance decision making, along with escalation paths that do more than record concerns and actually influence outcomes.

This is less about building a larger compliance program and more about building one that can see what is actually happening.

Final Thought

If there is one consistent lesson across the cases that FD Associates has seen over the years, it is this:

The biggest risk is not what companies do not know (although this is obviously important), it is what they believe to be true, but have never independently verified.

In real time, everything looks right using our normal compliance program lens. The transaction moves forward, all the paperwork aligns and the approvals are in place. There is no obvious reason to stop.

It looks like a clean play.

But as we have discussed, the best diversion schemes work like a well executed play that only reveals itself on replay. At full speed, nothing stands out. It is only when you slow it down and look at the full sequence do the details start to show. By then, it is too late.

From our experience, this is where most compliance programs begin to break down. Not because there are no rules, and not because there is no process, but because there is a belief that what is being seen reflects what is actually happening. As we note here, and in many other cases, it does not. And that gap, between what appears to be true and what is actually happening, is where serious compliance failures live.

If these issues resonate, maybe it is time to take a closer look at your compliance process before you need the replay.

The Compliance Illusion Why Companies Miss the Risks Sitting Right in Front of Them Read More »

The DOJ’s New Corporate Enforcement Policy: A Practical Guide for Companies

By George (Jorge) Cánovas, J.D. • Vice President Compliance, FD Associates

On March 10, 2026, the U.S. Department of Justice released what may become one of the most consequential policy statements for corporate compliance in recent years: the first Department-wide Corporate Enforcement Policy (CEP) applicable to virtually all corporate criminal cases handled by DOJ (U.S. Department of Justice, Corporate Enforcement and Voluntary Self-Disclosure Policy, Mar. 10, 2026).

While the concept of rewarding voluntary disclosure and cooperation is not new, what makes this development significant is that the Department has now standardized the framework across all DOJ components. Until now, corporate enforcement policies varied depending on which division or U.S. Attorney’s Office handled the matter. The Criminal Division maintained its own corporate enforcement guidance, and other DOJ components applied similar but not always identical approaches.

The CEP is intended to address that fragmentation and provide greater uniformity, predictability, and transparency in corporate criminal enforcement (See DOJ CEP, Introduction and Background).

For companies, however, the policy accomplishes something even more practical. It effectively codifies the enforcement playbook, explaining how prosecutors will evaluate corporate misconduct and what actions can meaningfully reduce criminal exposure.

In many respects, the policy formalizes what experienced compliance professionals and defense counsel have long understood: when misconduct occurs, the outcome often depends less on the violation itself and more on how the company responds once the misconduct is discovered. This is the message we tell all our clients at FD Associates.

The Framework That Now Governs Corporate Criminal Enforcement

At the heart of the CEP is a structured analytical framework. When prosecutors evaluate corporate misconduct, they focus on three primary factors:

Whether the company voluntarily disclosed the misconduct
Whether the company fully cooperated with investigators
Whether the company timely and appropriately remediated the misconduct

(See DOJ CEP, §I; Appendix A Decision Framework).

If a company satisfies all three elements, and there are no aggravating circumstances, the Department states that it will generally decline prosecution (See DOJ CEP, §I, Declination Path).
That outcome is significant. A “declination” means the company avoids criminal charges, although it may still be required to pay disgorgement or restitution tied to the misconduct. If one or more of these elements are missing, however, the enforcement outcome changes significantly. The policy outlines several alternative resolutions depending on the company’s actions and the severity of the misconduct (See DOJ CEP, §§II–III).

Voluntary Self Disclosure and the Importance of Timing

The most significant incentive in the policy revolves around voluntary self disclosure. The Department is attempting to encourage companies to come forward when they discover potential wrongdoing rather than waiting until regulators uncover the issue independently.
For disclosure to qualify under the CEP:

The disclosure must be made to the appropriate DOJ component
The misconduct must be previously unknown to the Department
The company must not already have a legal obligation to disclose
Disclosure must occur before there is an imminent threat of government discovery
Disclosure must be made within a reasonably prompt time after discovery

(See DOJ CEP, §I.A).

The policy also recognizes that companies may disclose misconduct before completing an internal investigation. DOJ explicitly acknowledges that early or initial disclosure may occur while the internal fact gathering process is still underway (See DOJ CEP, §I.A; Appendix A). This emphasis on timing reflects a broader enforcement philosophy. Early disclosure allows prosecutors to begin investigations sooner and potentially prevent additional harm.

Cooperation Expectations Under the Policy

Even when companies voluntarily disclose misconduct, they must demonstrate meaningful cooperation to receive the full benefits of the CEP.
The policy defines cooperation in relatively detailed terms. Companies are expected to provide all relevant non privileged facts related to the misconduct, including information gathered during internal investigations (See DOJ CEP, §I.B).
Cooperation typically includes:

Identifying individuals responsible for the misconduct
Preserving and producing relevant documents
Providing evidence located overseas
Facilitating interviews with employees and relevant third parties
Translating foreign language documents when necessary

(See DOJ CEP, §I.B; Appendix A).

Importantly, the policy states that cooperation credit does not require waiver of attorney client privilege or attorney work product protections (See DOJ CEP, §I.B). However, companies are expected to proactively identify relevant evidence rather than simply responding to government requests.

Remediation and the Role of Corporate Compliance Programs

The third pillar of the CEP focuses on remediation. Again, from FD Associates’ perspective this is a core and important remediation concept. Companies must demonstrate that they have corrected the underlying causes of misconduct and implemented measures designed to prevent recurrence. Remediation generally includes conducting a root cause analysis, disciplining individuals responsible for the misconduct, and strengthening internal compliance controls (DOJ CEP, §I.C). The Department also emphasizes the importance of effective compliance programs. Prosecutors will evaluate factors such as:

Independence of the compliance function
Adequacy of compliance resources
Effectiveness of internal reporting channels
Ongoing testing and monitoring of compliance controls
Leadership support for compliance initiatives

(See DOJ CEP, §I.C; U.S. Sentencing Guidelines §8B2.1).

In practice, DOJ is assessing whether compliance is integrated into corporate governance rather than functioning as a purely administrative exercise, i.e. temporary fix.

The Three Paths to Resolution

The CEP outlines three potential enforcement outcomes depending on how a company responds to misconduct.

A. Declination

A declination may occur when a company voluntarily discloses misconduct, fully cooperates with investigators, and implements effective remediation measures, and when no additional aggravating factors are present (See DOJ CEP, §I).

Even in these cases, the company must typically pay disgorgement, forfeiture, or restitution tied to the misconduct (See DOJ CEP, §I; Appendix A).
Declinations are publicly announced.

B. Near Miss Cases

When a company cooperates and remediates but fails to qualify for full voluntary disclosure, or when limited aggravating factors exist, DOJ may resolve the matter through a Non Prosecution Agreement (See NPA and DOJ CEP, §II).

Under the policy, these cases may include:

NPA terms shorter than three years
No independent compliance monitor
Penalty reductions between 50 and 75 percent from the low end of the Sentencing Guidelines fine range

(See DOJ CEP, §II; U.S. Sentencing Guidelines Chapter 8).

C. Other Cases

If companies fail to self-disclose misconduct or they do not meaningfully cooperate, prosecutors retain discretion to pursue traditional criminal resolutions, including:

Deferred prosecution agreements
Criminal charges
Compliance monitors
Financial penalties

(See DOJ CEP, §III).

Even in these cases, companies that demonstrate meaningful cooperation may still receive penalty reductions of up to 50 percent (DOJ CEP, §III; U.S. Sentencing Guidelines Chapter 8).

How the Policy Changes the Enforcement Landscape

Although the CEP builds on earlier DOJ policies, it this new version introduces several structural changes.

First, the Department has established a single enforcement framework across all DOJ components, reducing the uncertainty companies previously faced when dealing with different prosecutorial offices.

Second, the policy introduces a formal decision framework, including a flow chart that outlines enforcement outcomes based on disclosure, cooperation, and remediation (DOJ CEP, Appendix A).

Third, the policy strengthens incentives for early disclosure by encouraging companies to report misconduct before completing internal investigations.

Fourth, the CEP provides clearer guidance on potential penalty reductions tied to cooperation and remediation (DOJ CEP, §§II–III).

Finally, the policy integrates aspects of DOJ’s corporate whistleblower program. If an employee reports misconduct internally and also reports it to DOJ, a company may still qualify for a declination if it self reports within 120 days of receiving the internal report (DOJ CEP, Whistleblower Provision).

How the CEP Interacts With Export Control Enforcement

For companies operating in export controlled industries such as aerospace, defense, and advanced technology, the CEP can also influence export enforcement cases. The Corporate Enforcement Policy is a DOJ criminal enforcement policy, not an export control regulation.

Companies operating in defense, aerospace and advanced technology sectors often make coordinated filings with BIS, DDTC and DOJ for a serious enforcement matters.
Administrative export violations are typically handled either by the Bureau of Industry and Security (BIS) under the Export Administration Regulations (EAR), or the Department of States’s Directorate of Défense Trae Controls Compliance (DTCC), under the International Traffic In Arms Regulations (ITAR) depending on whether the items involved are controlled as dual use or commercial items under the EAR or are classified as defense article and defense services under the U.S. Munitions List (15 CFR §§730-774; 22 CFR Parts 120-130).

Enforcement actions are governed primarily by:

EAR Part 764 (Violations)
EAR Part 766 (Administrative Enforcement Proceedings) (See 15 C.F.R. §§764–766).

ITAR Enforcement actions, administered nu the DDTC with the U.S. Department of State, are governed primarily by:

ITAR §127.1 (Violations)
ITAR §127.10 (Civil penalties)
ITAR §127.7 (Debarment)
ITAR §128 (Administrative Procedures)

(See 22 CFR Parts 127-128)

Under these frameworks, BIS or DDTC may impose a range of civil penalties and sanctions including denial orders, debarment orders, license revocations, and other administrative sanctions. (See 15 CFR Part 764; 22 CFR Part 127)

However, serious export control violations under the EAR or ITAR are often referred to the Department of Justice for criminal prosecution, particularly when violations involve willful conduct, conspiracy, sanctions evasion, national security risks, or diversion schemes (15 C.F.R. §764.2; DOJ CEP applicability).

Once DOJ becomes involved, the CEP framework becomes relevant. Prosecutors may evaluate the company using the same three factors that apply in other corporate criminal cases: voluntary disclosure, cooperation, and remediation.

Export enforcement cases frequently involve parallel investigations involving multiple agencies, including the Department of Justice, the Bureau of Industry and Security, and the Treasury Department’s Office of Foreign Assets Control.

In those situations:

BIS may purse civil penalties or denial orders under the EAR
DDTC may impose civil penalties, consent agreements, or debarment under the ITAR
DOJ evaluates potential criminal liability using the CEP framework

The Practical Implications for Companies

The CEP does not radically alter the Department’s enforcement philosophy. Instead, it formalizes principles that prosecutors have increasingly applied over the past decade.
What has changed is the clarity with which those principles are now articulated by the DOJ.

Companies that detect misconduct quickly, escalate concerns internally, conduct credible investigations, disclose violations promptly, cooperate fully with investigators, and remediate underlying compliance weaknesses may significantly reduce enforcement exposure.
Companies that delay disclosure or fail to cooperate may face far more serious consequences.

Perhaps the most important lesson from the CEP is that compliance programs are no longer merely defensive tools designed to satisfy regulators. They are now central to enforcement outcomes.

When misconduct occurs, the credibility of a company’s compliance program, the speed of its response, and the seriousness of its remediation efforts may determine whether prosecutors pursue criminal charges or decline the case entirely.

For corporate leadership, the implications are clear. The effectiveness of a company’s compliance infrastructure can influence not only whether misconduct is detected, but also how the government ultimately chooses to respond.

The Role of Experienced Compliance Advisors

For many organizations, particularly those operating in highly regulated sectors such as aerospace, defense, advanced technology, and manufacturing, responding to potential violations requires navigating overlapping enforcement regimes and complex disclosure decisions. Determining whether an issue should be handled internally, disclosed through administrative channels such as a BIS voluntary self-disclosure, or elevated to the Department of Justice under the CEP framework often requires careful legal and compliance analysis.

Advisory firms with deep experience in export controls, corporate compliance, and enforcement matters can play an important role in helping companies assess risk, conduct internal investigations, and develop remediation strategies that align with regulatory expectations.

FD Associates, Inc., for example, works with companies to evaluate potential export control violations under the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR), develop voluntary disclosure strategies, and strengthen compliance programs designed to prevent future violations. This includes assisting organizations with internal investigations, root-cause analyses, compliance program design, and engagement with enforcement authorities where appropriate.

In an enforcement environment where the timing of disclosure, the quality of cooperation, and the credibility of remediation efforts can significantly influence outcomes under the DOJ Corporate Enforcement Policy, experienced compliance guidance can help companies respond to potential issues with greater clarity and confidence.

SYNOPSIS of the New CEP

DOJ has just clarified the corporate enforcement playbook. Its new Department-wide Corporate Enforcement Policy makes one thing clear, when misconduct occurs, prosecutors will focus on three questions: did the company voluntarily disclose it, fully cooperate, and meaningfully remediate. Companies that do may avoid criminal charges entirely. For organizations in regulated sectors like aerospace, defense, and advanced technology, where export control issues can quickly involve BIS, DDTC, and DOJ, how a company responds can determine the outcome. That is exactly where FD Associates helps companies act quickly and strategically, assessing violations, guiding disclosures, and strengthening compliance programs before enforcement decisions are made.

The DOJ’s New Corporate Enforcement Policy: A Practical Guide for Companies Read More »

LATEST EXPORT CONTROLS AND COMPLIANCE UPDATE FEBRUARY 2026

This newsletter is a listing of the latest changes in export control regulations through February 28, 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.

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

REGULATORY UPDATES

President

Continuation of the National Emergency With Respect to the Situation in Burma

February 3, 2026, 91 Fed. Reg. 5663. On February 3. 2026, the President issued a notice continuing for another year the national emergency declared on February 10, 2021 in EO 14014 in relation to Burma.

https://www.federalregister.gov/documents/2026/02/06/2026-02497/continuation-of-the-national-emergency-with-respect-to-the-situation-in-and-in-relation-to-burma

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Establishing An American First Arms Transfer Strategy

February 6, 2026: President Trump issued an Executive Order (EO 14383) Establishing an American First Arms Strategy, in which the policy of the U.S. is to intentionally use arms transfers as a tool of American foreign policy and to expand strategically relevant industrial production capacity in the U.S. by:

(a) establishing an America First Arms Transfer Strategy that provides clear direction and implementation guidance to arms transfer stakeholders; and

(b) streamlining processes across executive departments and agencies (agencies) to strengthen effectiveness and create efficiencies in our defense sales enterprise.

An America First Arms Transfer Strategy.

(a) An America First Arms Transfer Strategy shall accomplish the following objectives:

The United States will use arms sales and transfers to increase production and build production capacity for weapons and platforms the Secretary of War determines to be the most operationally relevant for executing the National Security Strategy (NSS);
The United States will use foreign purchases and capital to support domestic reindustrialization, expand production capacity, and improve the resilience of the United States defense industrial base. Arms sales and transfers will support Department of War (DoW) efforts to promote innovation and competition by incentivizing new entrants and nontraditional defense companies to contribute to the defense industrial base;
The United States will use arms sales and transfers to reinforce DoW acquisition and sustainment activities, including by building critical supply chain resilience and avoiding adding to backlogs on priority components and end-items that impact United States or ally and partner readiness;
Consistent with Executive Order 14268 of April 9, 2025 (Reforming Foreign Defense Sales to Improve Speed and Accountability), the United States will prioritize arms sales and transfers to partners that have invested in their own self-defense and capabilities, have a critical role or geography in United States plans and operations, or contribute to our economic security.

(b) Within 120 days of the date of this order, the Secretary of War, in coordination with the Secretary of State and the Secretary of Commerce, shall submit to the President, through the Assistant to the President for National Security Affairs, a sales catalog of prioritized platforms and systems that the United States shall encourage our allies and partners to acquire. The sales catalog shall be based on criteria identified in the America First Arms Transfer Strategy.

(c) Within 120 days of the date of this order, the Secretary of Commerce, in coordination with the Secretary of State and the Secretary of War, shall provide recommendations to enhance advocacy efforts encouraging foreign procurement of defense articles produced in America for the purpose of supporting an America First Arms Transfer Strategy.

(d) Within 120 days of the date of this order, the Secretary of State and the Secretary of War, in coordination with the Secretary of Commerce, shall identify Foreign Military Sales (FMS) and Direct Commercial Sales opportunities that will support the strategic objectives of the America First Arms Transfer Strategy and the growth of the United States defense industrial base.

(e) Within 60 days of the date of this order, the Secretary of State and the Secretary of War, in coordination with the Secretary of Commerce, shall develop an industry engagement plan and submit it to the President, through the Assistant to the President for National Security Affairs, to enable the United States Government to fully coordinate with American stakeholders while executing the America First Arms Transfer Strategy.

Eliminating Inefficiencies in American Arms Transfers

In order to fully implement an America First Arms Transfer Strategy and streamline our defense sales process, the United States Government shall undertake the following actions:

Within 90 days of the date of this order, the Secretary of War, in coordination with the Secretary of State, shall develop clear criteria for determining which weapons, platforms, or capabilities require Enhanced End Use Monitoring. Additionally, the Secretary of State, the Secretary of War, and the Secretary of Commerce shall establish an End Use Monitoring coordination group, consisting of designees from each respective department, which will meet to improve the effectiveness and coordination of their respective department’s end-use monitoring activities. These actions will improve information sharing and efficiencies to ensure allies and partners are complying with United States requirements and to reduce risk of diversion.
Within 60 days of the date of this order, the Secretary of State, in coordination with the Secretary of War, shall review Third-Party Transfer (TPT) processes and submit a plan to the President through the Assistant to the President for National Security Affairs to reduce and potentially realign the onerous TPT process, with due consideration to technology security risks.
Within 90 days of the date of this order, the Secretary of War, in coordination with the Secretary of State, shall develop a process to provide advanced notice, as appropriate, to allies and partners of upcoming contracting actions and associated deadlines for FMS Letter of Offer and Acceptance implementation.
The Secretary of State, the Secretary of War, and the Secretary of Commerce shall ensure effective coordination when assessing the impacts of Direct Commercial Sales to the defense industrial base.
To streamline Congressional notifications, Executive Order 13637 of March 8, 2013 (Administration of Reformed Export Controls) is hereby amended by revising section 1(j) and (k) to read as follows:“(j) Those under sections 36(a) Act (22 U.S.C. 2776(a)) to the Secretary of War. The Secretary of War, in the implementation of the delegated functions under sections 36(a), shall consult with the Secretary of State. With respect to those functions under sections 36(a)(5) and (6) (22 U.S.C. 2776(a)(5) and (6)), the Secretary of War shall also consult with the Director of the Office of Management and Budget.(k) Those under section 36(b)(1), (c) and (d) of the Act (22 U.S.C. 2776(b)(1), (c), and (d)) to the Secretary of State. To ensure coordination, the Secretary of State shall notify the Secretary of War of the intent to formally notify the Congress of proposed arms transfers.”

Enhancing Accountability and Transparency

(a) Within 30 days of the date of this order, the Secretary of State, the Secretary of War, and the Secretary of Commerce shall establish the Promoting American Military Sales Task Force (Task Force) to coordinate efforts to implement the America First Arms Transfer Strategy and enhance accountability and transparency throughout the arms transfer enterprise. The Task Force shall:
(i) be chaired by the Assistant to the President for National Security Affairs or his designee, and be composed of the Under Secretary of Defense for Acquisition and Sustainment, the Under Secretary of State for Arms Control and International Security, the Under Secretary of Commerce for International Trade;

(ii) develop a charter to clearly define the specific objectives and structure of the Task Force;

(iii) include as ex officio members the Service Acquisition Executives of the military departments and representatives of other non-military implementing agencies as appropriate to report on actions taken by the military departments and other implementing agencies to accelerate the contracting of priority FMS cases and ensure exportability of identified priority systems; and

(iv) convene quarterly, or as required, to review progress implementing the America First Arms Transfer Strategy, including whether targeted defense sales align with the Strategy’s objectives.

(b) Within 120 days of the date of this order, and to further the reforms directed in Executive Order 14268, and to improve transparency for United States industry and partners and allies, the Secretary of State, the Secretary of War, and the Secretary of Commerce shall begin to publish aggregate quarterly performance metrics on FMS case development and execution, and on the adjudication of Commerce and State export licenses.

https://www.whitehouse.gov/presidential-actions/2026/02/establishing-an-america-first-arms-transfer-strategy/

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Addressing Threats to the United States by the Government of Iran

February 6, 2026: 91 Fed. Reg. 6493: On February 6, 2026, the President issued EO 14382 authorizing, effective the date of this order, an additional ad valorem rate of duty—for example, 25 percent— to be imposed on goods imported into the United States that are products of any country that directly or indirectly purchases, imports, or otherwise acquires any goods or services from Iran. The order directs the Secretary Commerce to identify such countries and requires the Secretary of State, in consultation with Treasury, Commerce, Homeland Security, and the U.S. Trade representative to determine the specific tariff levels to apply.

https://www.whitehouse.gov/presidential-actions/2026/02/addressing-threats-to-the-united-states-by-the-government-of-iran/

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Modifying Duties To Address Threats to the United States by the Government of the Russian Federation

February 6, 2026: 91 Fed. Reg. 6501: On February 6, 2026, the President issued EO 14384 rescinding the U.S. tariff policy to impose an additional 25% ad valorem duty on imports from India. The President determined that India has taken actions to address U.S. National Security concerns by having committed to stop directly or indirectly importing Russian Federation oil, representing that it will purchase United States energy products from the United States, and has recently committed to a framework with the United States to expand defense cooperation over the next 10 years. The EO went into effect on or after 12:01AM on February 7, 2026.

https://www.whitehouse.gov/presidential-actions/2026/02/modifying-duties-to-address-threats-to-the-united-states-by-the-government-of-the-russian-federation-04b2/

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Continuation of the National Emergency With Respect to Ukraine

February 18, 2026: 91 Fed. Reg. 8355: On February 18, 2026, the President issued an Administrative Order continuing for 1 year the national emergency declared in Executive Order (EO) 13660. EO 13660, which was expanded in scope in EOs 13661, 13662, and 14065, and under which additional steps were taken in EOs 13685 and 13849, declared a national emergency, pursuant to the International Emergency Economic Powers Act, to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the actions and policies of persons that undermine democratic processes and institutions in Ukraine; threaten its peace, security, stability, sovereignty, and territorial integrity; and contribute to the misappropriation of its assets.

https://www.govinfo.gov/content/pkg/FR-2026-02-20/pdf/2026-03501.pdf

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Continuation of the National Emergency With Respect to Venezuela

February 18, 2026: 91 Fed. Reg. 8357: On February 18, 2026, the President issued Administrative Order continuing for 1 year the national emergency declared in Executive Order (EO) 13692. EO 13692, under which additional steps were taken in EOs 13808, 13827, 13835, 13857, 13884, and 14245, declared a national emergency with respect to the situation in Venezuela, including the Government of Venezuela’s erosion of human rights guarantees, persecution of political opponents, curtailment of press freedoms, use of violence and human rights violations and abuses in response to antigovernment protests, and arbitrary arrest and detention of antigovernment protesters, as well as the exacerbating presence of significant government corruption.

https://www.govinfo.gov/content/pkg/FR-2026-02-20/pdf/2026-03502.pdf

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Continuing The Suspension Of Duty-Free De Minimis Treatment For All Countries

February 20, 2026: 91 Fed. Reg. 9433: On February 20, 2026 the President issued EO 14388 that continues the suspension of duty-free de minimis treatment for all countries as implemented in EO 14193, EO 14194, EO 14195, and EO 14257

https://www.whitehouse.gov/presidential-actions/2026/02/continuing-the-suspension-of-duty-free-de-minimis-treatment-for-all-countries/ and

https://www.federalregister.gov/documents/2026/02/25/2026-03829/continuing-the-suspension-of-duty-free-de-minimis-treatment-for-all-countries

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Ending Certain Tariff Actions

February 20, 2026: 91 Fed. Reg. 9437: On February 20, 2026 the President issued an EO 14389 directing the Secretary of Commerce, the Secretary of Homeland Security, and the United States Trade Representative, as appropriate and in consultation with the Commissioner of U.S. Customs and Border Protection, the Chair of the United States International Trade Commission, and any other senior official they deem appropriate to terminate the ad valorem duties imposed under IEEPA.

https://www.whitehouse.gov/presidential-actions/2026/02/ending-certain-tariff-actions/ and

https://www.federalregister.gov/documents/2026/02/25/2026-03832/ending-certain-tariff-actions

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

DDTC Name And Address Changes Posted To Website

February 6 through February 27, 2026: 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&kb_number=KB0010093

Certain Honeywell International Inc. subsidiaries names and addresses that fall within Honeywell Aerospace Technologies changed their names and address due to corporate restructuring.
- From: Honeywell Belgium NV

To: Honeywell Aerospace Belgium B.V.

From: Hermes Plaza, Hermeslaan 1H, Diegem, 1831, Belgium

To: Hermes Plaza, Hermeslaan 1H, Diegem, 1831, Belgium

From: Honeywell S.r.l. Via Vittor Pisani n. 6, Milan, 20124, Italy

To: Honeywell II S.r.l. Via Alessandro Volta 16 CAP, Cologno Monzese Milan, 20093, Italy

From: Honeywell Co., Ltd. 4/F & 5/F Sangam IT Tower 1590 Sangam-dong, Mapo-gu, Seoul, 121-835, South Korea

To: Honeywell Aerospace Korea Ltd. 27F, 511, Yeongdong-daero, Gangnam-gu, Seoul, South Korea

From: Honeywell (Vietnam) Company Limited V1405-1406, 14/F, Pacific Place, No. 83B Ly Thuong Kiet Street, Tran Hung Dao Ward; Hoan Kiem District, Hanoi, Vietnam

To: Honeywell Aerospace Vietnam Company Limited Office No. 1638, Register 02, Level 16, Daeha Business Center Building, No. 360, Kim Ma Street, Giang Vo Ward, Hanoi City, Vietnam

Qnity Electronics, Inc. subsidiary acquisition and additions due to reorganization as follows:
- Transferred: Qnity Electronics, Inc.; DuPoint de Nemours, Inc.; DuPoint Electronics USA, LLC; and Laid R&F Products, Inc.

To: Qnity Electronics, Inc. as subsidiaries.

Add: EKC Advanced Electronics USA, LLC and Kalrez USA, LLC

To: Qnity Electronics, Inc. as subsidiaries.

DSV Air & Sea, Inc. Entities Names and Locations Change Due to Restructuring

From: Schenker Deutschland AG Schlachte 15-18 28195 Bremen, Germany

To: DSV Air & Sea Germany GmbH Schlachte 15-18 28195 Bremen, Germany

From: Schenker International S.A. de C.V. Av. Patriotismo no. 201, Piso 3, Col. San Pedro de los Pinos 15520 Mexico City, Mexico

To: DSV Air & Sea, S.A. de C.V. Insurgentes Sur N0. 1271 Piso 4 03740 Mexico City, Mexico, and
DSV Contract Logistics S.A. de C.V. Av. Victor Hugo No 330 – D Col. Complejo Industrial Chihuahua 31136 Chihuahua, Mexico

From: Schenker Korea Ltd. 97-49, Gonghangdong-ro 296beon-gil, Jung-gu Airp. 22379 Incheon, South Korea

To: DSV Air & Sea Ltd. 16th Floor, Hanssem Bldg. 179, Seongam-ro, Mapo-gu 03929 Seoul, South Korea, and
DSV Contract Logistics Ltd. 1203ho, Queens Park Ten, 66 Magokjungang 6-ro Gangseo-gu, Seoul, South Korea

From: Schenker (L.L.C) 705, Al Masood Tower, Airport Road, Diera Dubai, United Arab Emirates
To: DSV Air & Sea DWC-LLC Dubai World Central Dubai Logistics City Jebel Ali, 644305 Dubai, United Arab Emirates, and

DSV Contract Logistics L.L.C. PO Box – 36683, Dubai Investment Park, Dubai, U.A.E Dubai, United Arab Emirates

Mitsubishi Electric Corporation changes in name to subsidiaries due to a reorganization as follows:
- From: Tsuryo Technica Corporation and Ryosai Technica Corporation

To: Ryoshin Technica Corporation

From: Ryoshin Technica Corporation

To: Mitsubishi Electric Infrastructure Technica Corporation

Change in Address for PCC Airfoils LLC from 3401 Enterprise Parkway, Suite 200, Beachwood, OH 44122 to 26800 Fargo Avenue, Suite 100k, Bedford Heights, OH 44146;
DSV Air & Sea, Inc. changes in name and address due to restructuring
- From: Schenker Australia Pty Ltd 72 – 80 Bourke Road 2015 Alexandria, Australia

To: DSV Air & Sea Pty. Ltd 47 Watson Drive 3045 Melbourne Airport Victoria, Australia; and

DSV Solutions Pty. Ltd 47 Watson Drive 3045 Melbourne Airport Victoria, Australia

From: Schenker NV Noorderlaan 147 2030 Antwerp, Belgium

To: DSV Air & Sea NV Schoonmansveld 40, 2870 Puurs, Belgium; DSV Road N.V. Schoonmansveld 40, B-2870 Puurs, Belgium; and DSV Contract Logistics NV Eddastraat 21, Kennedy Industriepark, 9042 Gent (St. Kruis-Winkel), Belgium

From: Schenker do Brasil Transportes Internacionais Ltda. Rua Geraldo Flausino Gomes, 78-12 Andar CEP 04575-060 Sao Paulo, Brazil

To: DSV Air & Sea Brasil Ltda. Av.Jornalista Roberto Marinho,85 12 andar 04576-010 São Paulo, Brazil; and DSV Contract Logistics Brasil Serviços de Logística Ltda. Av. Jornalista Roberto Marinho, 85, 12o andar 04576-010 Sao Paulo, Brazil

From: Schenker OY, Finland

To: DSV Air & Sea OY Trukkikuja 3, FIN-01360 Vantaa, Finland; DSV Road Oy Tikkurilantie 147 01530 Vantaa, Finland; and DSV Contract Logistics Oy Trukkikuja 3
FIN – 01360 Vantaa, Finland

From: Schenker Deutschland AG Schlachte 15-18 28195 Bremen, Germany

To: DSV Solutions GmbH Schlachte 15-18 28195 Bremen, Germany

From: Schenker Nederland B.V. Emma Goldmanweg 1 5000AS Tilburg, Postbus 718, Netherlands

To: Schenker Nederland B.V. Emma Goldmanweg 1 5000AS Tilburg, Postbus 718, Netherlands; and DSV Contract Logistics B.V. Tradeboulevard 4, Havennr. 528 4761 RL Zevenbergen, Netherlands

From: Schenker AS Alnabruveien 15 0668 Oslo, Norway

To: DSV Air & Sea AS Alf Bjerckes vei 10 0582 Oslo, Norway; and DSV Road AS Toveien 35-39 1540 Vestby, Norway

From: Schenker Transitarios, S.A. DSV Air Rua Florbela Espanca, n4, Casal Novo, Sao Juliao do Tojal 2660-364 Loures, Portugal

To: DSV Air and Sea Portugal, Lda PLLN-P.L Lisboa Norte Lote 19, Fracao A & B 2600-729 Vila Franca de Xira, Portugal; and DSV Transitarios Lda Rua Compo do Martelo, 319 P-4485-959 Vilar do Pinheiro, Portugal

From: Schenker Singapore (PTE) Ltd. 17 Changi South Street 2 486129 Singapore

To: DSV Air & Sea Singapore Pte. Ltd. 163 Kallang Way, #09-11 to 18 349256 Singapore; and DSV Solutions Pte Ltd. 5 Changi North Way 498771 Singapore

From: Schenker South Africa (Pty) Ltd. 1 and 2 Shiraz Close, JT Ross Park Plumbago 3, Witfontein Ext 54 1620 Kempton Park, South Africa

To: DSV South Africa (Pty) Ltd. DSV Park Gauteng, 16 Serengeti Boulevard, Witfontein X89 1620 Kempton Park 1620 Johannesburg, South Africa; DSV Road (Pty) Ltd. DSV Park Gauteng, 16 Serengeti Boulevard, Witfontein X89 1620 Johannesburg, South Africa; and DSV Contract Logistics (Pty) Ltd. DSV Park Gauteng, 16 Serengeti Blvd, Witfontein X89 1620 Johannesburg, South Africa

From: Schenker Logistics, S.A.U. Calle 4 No. 57-61 Sector C (Zona Franca) 08040 Barcelona, Spain

To: DSV Air & Sea S.A.U. Pol. Ind. Moli de la Bastida, c./Pagesia S/N 08191 Rubi – Barcelona, Spain; DSV Road Spain S.A.U. Pol Ind. Molí de la Bastida C. Pagesia S/N. 08191 RUBI – BARCELONA, Spain; and DSV Solutions Spain S.A.U. Pol.Ind. Molí de la Bastida C. Pagesia s/n. 08191 RUBI – BARCELONA, Spain

From: Schenker Limited Schenker House Unit 3 LHR Portal Scylla Road TW6 3FE Middlesex, United Kingdom

To: DSV Road Ltd Scandinavia House, Refinery Road, Parkeston CO12 4QG Harwich Essex, United Kingdom; and DSV Contract Logistics Ltd Scandinavia House, Refinery Road, Parkeston CO12 4QG Harwich, Essex, United Kingdom

From: Schenker, Inc 1305 Executive Blvd, Ste 200 Chesapeake, VA 23320

To: DSV Air & Sea, Inc. 200 South Wood Ave. Suite 300 Iselin, NJ 08830

Change in Name from Mytilineos S.A to Metien Energy & Metals S.A. due to a corporate rebranding.
Change in Name from GAL Air Navigation Services LLC to Global Air Navigation Services LLC as a result of corporate rebranding.

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DDTC Final Commodity Jurisdiction Determinations Posted To Website

February 3, 2026: The Directorate of Defense Trade Controls (DDTC) posted the following Final CJ Determinations for CJ’s adjudicated between December 31, 2025 and January 27, 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
SCHWACK Aerial Assault Units, Models SCHWACK 1 and SCHWACK-EBF, Part Numbers 1 and 2	Defensive Strategies Group	Battery Powered One Way UAVs	USML Category VIII(a)(5) when specially designed to incorporate a defense article; USML Category VIII(a)(16) otherwise	12/31/2025
Mann Barrels for Northrop Grumman chain guns (part numbers 465-1999-5, 465-5520-1, 465-5520-2, 465-5520-3, 465-5520-4, 465-5720, 465-8513, 12524502, X465-9647-1)	Northrop Grumman Corporation	Equipment used for testing ammunition for chain guns	USML Category II(j)(1)	12/31/2025
Combustion Chamber	Sintavia, LLC	Combustion chamber for use in a space launch vehicle	USML Category IV(h)(14)	12/31/2025
Saltenna Plasmonic Antenna (SPA) 1, 2, and 3	Saltenna, Inc.	Antennas that attach to existing radios for extended range	Seek a CCATS	12/31/2025
Hybrid Laser Rangefinder Receiver Module, Model 758-04	Analog Modules, Inc., a HEICO Company	Laser rangefinder receiver	USML Category XII(e)(21)	12/31/2025
SVX “Wyvern,” Model SVX-RFPV 001	Vorotnik LLC dba SkyVaultex LLC	Small multi-rotor UAV	Seek a CCATS	12/31/2025
Second Stage Turbine Disk (PN 4073102) and Front Turbine Case and Duct (PN 4081800)	Defense and Development Enterprises, LLC dba D&D Enterprises, LLC	Components of the F100-220 engine	Second Stage Turbine Disk: USML Category XIX(f)(2); Front Turbine Case and Duct: Seek a CCATS	12/31/2025
Ultra Low Phase Noise “Apollo” Series Oscillators, NVG45AD2025 and NVG45AD2140	KYOCERA AVX Components Corporation	Oven-controlled voltage-controlled crystal oscillators having extreme phase noise reduction	Seek a CCATS	12/31/2025
Deep Guard, Model DG-S1-20, Part Number US10115	Ultrasea, Inc	Modular, non-lethal subsurface net interdiction system	CCL ECCN 8A620.e	1/5/2026
Diode Assemblies, Part Numbers SG6301 Rev. 1 and SG6302 Rev. 1	Corfin Holdings Inc. d/b/a Micross	Electronic components	USML Category XII(e)(1)	1/5/2026
Signal Hunter, Model SH-6000 Version 3.3.4, Part Number DL-SH06000-01	Regulus Global, LLC	Radiofrequency detection and analysis system	USML Category XI(a)(4)(i)	1/5/2026
High Mobility Multipurpose Wheeled Vehicle (HMMWV) Model M1038/M998, Part Number: 069574	AM General	Specific unarmored 4-wheel drive military vehicle	CCL ECCN 0A606.a	1/5/2026
Inert Guided Projectile Prototype (Non-lethal), v1.0	James E. Smith LLC	Non-lethal projectile used in research and development	Seek a CCATS	1/5/2026
Mounting Bracket, Model 3068A, Part Number 00788	Truck-Lite Co., LLC	Mounting bracket for ground vehicle lights	CCL ECCN 0A606.x	1/5/2026
Signal Processor (P/N 7XX-3000-XXX SP), Receiver Transmitter (P/N 7XX-4000-XXX RT)	Griffon Corporation, d/b/a Telephonics Corporation	Line Replaceable Units for a Radar System	Signal Processor: USML Category XI(a)(5)(ii) when incorporating USG IFF Mode 4 or 5; otherwise, USML Category XI(a)(5)(i) Receiver Transmitter without firmware: ECCN 3A611.x Receiver Transmitter firmware: USML Category XI(d)	1/5/2026
Drone Delivery System, Version Number:1	Discordant Technologies LLC	Guidance kit for items dropped from an aircraft, that has not been designed for a specific payload, platform, or target	Seek a CCATS	1/5/2026
Drill with Polycrystalline Diamond (PCD) Edge and Tungsten Carbide Body, Part Numbers 55DR13NX-090699 N1DU, 84UM-0635-72-30, 84UM-0850-81-30, VI17200698-1910R.0 CD10, VIT7200698-.251R.0 CD10, VIT7200698-3135R.0 CD10, and VUK84U-0253-6.95R.0; Piloted Countersink with PCD Edge and Tungsten Carbide Body, Part Numbers VIT2OU0794-.188R.0, VIT20U0795-.248R.0, VIT20U0796-.310R.0, and VIT20U0797-373R.0; and Drill and Countersink with PCD Edge and Tungsten Carbide Body, Part Numbers	Sandvik Machining Solutions USA LLC	Cutting tools used to drill holes in aircraft components	Seek a CCATS	1/15/2026
BOS Thermal Imaging Sighting System, Model V1, Part Number BO-1	CHRK-Bishkek LLC	Device for observation, targeting, and fire-control assistance on heavy-caliber machine guns and vehicle-mounted weapon stations	USML Category XII(c)(2)(iii)	1/15/2026
EOTECH On Gun Laser (Non-Functioning/Disabled Unit), Model Number: OGL (Non-Functioning), Part Number: OGL-S-T-NF	Project Echo Holdings, LLC DBA: EOTECH, LLC	EOTECH On Gun Laser (OGL) housing	Seek a CCATS	1/20/2026
Specialized Rigid Wall Shelter System for Firing Container Unit (FCU), Part Number HMO10000B-E705	Marvin Engineering Co., Inc.	Portable shelter for a firing container unit	USML Category XVIII(e)	1/27/2026
Torren Software, Model Number: 0.1.3	Strategic Resilience Group, LLC	User interface and Large Language Model (LLM)-supported assessment of the ability to influence specific groups based on well-defined objectives	USML Category XI(b)	1/27/2026
SLM-5650 Satellite Modems with DSSS Firmware, Models A, B, and C, Part Numbers SLM-5650A/B/C	Comtech Telecommunications Corp	Devices that establish data links between satellites and other platforms	USML Category XI(a)(5)(iii)	1/27/2026
Miniaturized Laser Rangefinder Receiver with Range Processor, Model and Part Number 7551A-04	Analog Modules, Inc., a HEICO company	A laser rangefinding receiver	USML Category XI(c)(2)	1/27/2026
Rocket Engine Design Tool for Optimal Performance – REDTOP, v1.2.0, Part Number: RT-SU-1X_C	SpaceWorks Enterprises, Inc.	Software tool for conceptual-level design and analysis of liquid propellant rocket engines, excluding configuration data for modeling any specific engine	Seek a CCATS	1/27/2026
Charge Delivery System (CDS), Model 1, Version 1, Part Number 114000	TETAC Incorporated	Naval mine disposal and detonation system	USML Category VI(f)(8)	1/27/2026
VANQUISH-1C, Model Number: 00101800A	Chaos Industries, Inc.	Lightweight radar for the detection and tracking of airborne objects	Seek a CCATS	1/27/2026

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Notifications to the Congress of Proposed Commercial Export Licenses

February 17, 2026: 91 Fed. Reg 7351: February 17, 2026, the Directorate of Defense Trade Controls and the Department of State submitted to Congress 49 notices of Notifications of Proposed Commercial Export Licenses.

https://www.federalregister.gov/documents/2026/02/17/2026-03051/bureau-of-political-military-affairs-directorate-of-defense-trade-controls-notifications-to-the

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DDTC Frequently Asked Questions (FAQs)

Q: How do I submit classified information to the Directorate of Defense Trade Controls (DDTC), such as supporting classified information for a DSP-85?

A: Classified information can only be submitted to DDTC in a hard-copy document (i.e., paper) format, pursuant to the information provided below.

To submit classified documents to DDTC, please refer to the National Industrial Security Program Operating Manual (NISPOM)*, Chapter 5 (Safeguarding Classified Information), Section 4 (Transmission, starting on page 5-4-1) for detailed instructions. The NISPOM can be accessed at this link:
https://www.federalregister.gov/documents/2020/12/21/2020-27698/national-industrial-security-program-operating-manual-nispom

The Defense Counterintelligence and Security Agency (DCSCA) will release an Industrial Security Letters (ISLs) that provides further guidance about the rule’s implementation and interim or supplemental information. Each company’s Facility Security Officer (FSO) is the responsible party at the company to ensure compliance with the NISPOM and all ISLs. As such, they should be aware of the requirements in the ISL. ISLs can be accessed at https://www.dcsa.mil/Industrial-Security/National-Industrial-Security-Program-Oversight/NISP-Tools-Resources/.

Based on DDTC’s experience in receiving classified information through regular mail, DDTC recommends the following steps to ensure the security and delivery of your information:

Consider using the US Postal Service Registered Mail service. This ensures a signature will be required for receipt of the delivery, as other carriers have dropped this requirement due to COVID-19 precautions.
Only write the address below on the outer envelope. If the submission needs to be directed to a specific department or officer, add ‘Attention Of:’ on the INNER envelope.
Address all submissions to the following:

Directorate of Defense Trade Controls

2401 E Street, NW

Suite H1200

Washington, DC 20522-0112

Please note that DDTC has not resumed acceptance of hand-delivered documents.

Contact DDTC Prior to Sending Classified Information: Please contact Rob White at 202-663-1929 or WhiteRC3@state.gov to notify DDTC that you intend to send classified information.

*Please note there is a 2021 update to the NISPOM that modifies certain rules and incorporates the NISPOM into the Code of Federal Regulations. We do not anticipate these changes will impact the information provided in this posting. A summary of the 2021 NISPOM changes is available at this link: https://www.dcsa.mil/About-Us/News/News-Display/Article/2516880/32-code-of-federal-regulation-part-117-nispom-is-now-in-effect-cleared-contract/. Additionally, DCSA offers a 32 CFR Part 117 NISPOM Rule Cross Reference Tool under the heading, “Key Resources for FSOs,” located at https://www.cdse.edu/Training/Toolkits/FSO-Toolkit/.

Q: We need to review a classified proviso for an important meeting next week. Can we send someone to DDTC to pick it up?

A: Yes, it is possible to pick up a classified proviso for your company at DDTC, but three factors must be met first.

Company Clearance in NISS: DDTC must check the National Industrial Security System (NISS) and confirm your company meets all requirements for receiving and storing classified materials.
Urgent Need: The company must have an urgent, time-sensitive need for the proviso. Otherwise, DDTC will send the proviso through its standard delivery method, which is the U.S. Postal Service (USPS). If you find USPS is too slow, we offer service through UPS Next Day, but only if you have a cleared street address in NISS.
Cleared Company Representative: Before setting the date or time for the in-person transfer, DDTC must submit information to the Department’s Bureau of Diplomatic Security (DS) to clear the company representative who is retrieving the proviso. The turnaround time for this clearance is about 24 hours. To clear an individual, we need the following information:

- Full name, and
- Social Security Number.

To provide DDTC with information on the factors listed above, please contact Rob White whiterc2@state.gov and Ayanna Peoples peoplesad@state.gov. Your company’s Facility Security Officer should be included on the cc line of all written communications.

Once the three factors are met, Rob or Ayanna can arrange a meeting with the Cleared Company Representative to transfer the classified proviso. Please note the Cleared Company representative must bring two items to DDTC in order to receive a classified proviso:

government photo identification card, and
appropriate carrying case for classified documents.

Q: Can the § 126.7 exemption be used for transfers involving classified defense articles and defense services?

A: Yes. However, consistent with the note to paragraph (b) in § 126.7, compliance with all separate security controls governing the handling of classified articles and services is still separately required.

Q: If I have classified information to provide in support of my CJ request, how should I submit that to the Department?

A: Classified information MAY NOT be submitted through the electronic system used to submit CJ requests. If you have classified information associated with your request, please so indicate in your online application form or cover letter. The analyst assigned to your case will contact you with options for relaying that information via proper channels.

Q: How do I export or obtain U.S. classified defense articles under the UK exemption?

A: You must obtain a written request, directive or contract from the U.S. Department of Defense prior to the initial export from the United States. After that, U.S. classified materiel (Confidential and above) eligible for transfer under the Treaty will be moved in accordance with the Treaty’s detailed arrangements and other applicable security requirements.

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

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Department of Defense, Defense Security Cooperation Agency (DSCA)

DCSA Notifies Congress of Potential FMS Sale to Kingdom of Saudi Arabia

February 3, 2026: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that the Kingdom of Saudi Arabia has requested to buy F-15 Sustainment and related equipment. The potential sale includes the following non-major defense equipment items: spares and repair parts, consumables and accessories, and repair and return support; 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. The estimated total cost is $3.0 billion.

There will be various contractors associated with the provision of equipment and services involved with this case, and there is no prime contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4396586/kingdom-of-saudi-arabia-f-15-sustainment

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DCSA Notifies Congress of Potential FMS Sale to Iraq

February 5, 2026: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that Iraq has requested the extension of Contracted Logistical Services (CLS), including 24/7 help desk service, for two years in support of the Ministry of Interior’s VACIS XPL passenger vehicle scanning systems; corrective and preventive maintenance; spare and repair parts; software updates, remote monitoring; 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 $90 million.

The principal contractor will be Leidos, located in Reston, VA.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4398638/iraq-contracted-logistical-services-for-vacis-xpl-passenger-vehicle-scanning-sy

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DCSA Notifies Congress of Potential FMS Sale to Ukraine

February 6, 2026 The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that the Government of Ukraine has requested to buy Class IX spare parts in support of U.S. Army-supplied vehicles and weapon systems, as well as other related elements of logistics and program support. The estimated total cost is $185 million.

The principal contractor(s) will be determined from approved vendors.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4399552/ukraine-class-ix-spare-parts

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The U.S. Department of State Notifies Congress of Potential FMS Sale to Jordan

February 26, 2026: The U.S. Department of State has made a determination approving a possible Foreign Military Sale to the Government of Jordan of Ku band multi-function radio frequency system (KuMRFS) radars and related equipment for an estimated cost of $280 million. The State Department delivered the required certification notifying Congress of this possible sale.

The Government of Jordan has requested to buy KuMRFS radars and command and control system; generators; global positioning system receivers; spare and repair parts; special tools and test equipment; technical manuals and publications; training devices; new equipment training; U.S. Government and contractor technical, engineering, and logistics personnel services; concurrent spare parts, systems integration, and checkout support; field service representative support; contractor logistics support; program management reviews; and other related elements of logistics and program support.

The principal contractor will be RTX Missile Defense Technologies, located in Tucson, Arizona.

https://www.state.gov/jordan-ku-band-multi-function-radio-frequency-system-kumrfs-radars/

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Future Announcements Of Major Arms Sales

February 26, 2026: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) posted to their website that future announcement of major arms sales will be published on the U.S. Department of State’s website in accordance with Executive Order 14383 “ESTABLISHING AN AMERICA FIRST ARMS TRANSFER STRATEGY” signed on February 6, 2026.

https://www.state.gov/arms-sales-congressional-notifications/

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

Conforming Change to the Export Administration Regulations for Cambodia

February 4, 2026: 91 Fed. Reg. 5091: On February 4, 2026, BIS made conforming changes to the Export Administration Regulations (EAR) to reflect that Cambodia is no longer a Country Group D:5 country.

https://www.govinfo.gov/content/pkg/FR-2026-02-04/pdf/2026-02262.pdf

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Exports of U.S.-Origin Gas and Petroleum Products to Cuba

February 24, 2026: On February 24, 2026, the Department of Commerce, Bureau of Industry and Security (BIS) published on their website updated guidance on the availability of EAR License Exception Support for the Cuban People (SCP) for exports and reexports of U.S.-origin gas and other petroleum products to eligible Cuban private sector entities and to individual Cuban consumers. Under this guidance, certain transactions meeting the terms of License Exception SCP may be authorized without a license, including exports for private sector economic activities and those sold directly to individuals for personal or family use. License applications involving U.S.-origin gas and petroleum products that otherwise qualify for SCP, will be returned without action with direction to use the license exception. Exporters are responsible for ensuring that all SCP conditions are met and should carefully review § 740.21 before proceeding.

As a reminder, exporters and reexporters are responsible for complying with all applicable regulatory requirements in particular the Department of Treasury’s Office of Foreign Assets Control (OFAC) Cuba-related sanctions.

https://www.bis.gov/media/documents/scp-gas-petroleum-faq.pdf and

https://www.bis.gov/licensing/country-guidance/cuba-export-controls

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Office of Foreign Assets Control (OFAC)

Launch of Voluntary Self-Disclosure Portal

February 6, 2026: OFAC launched a new online Voluntary Self-Disclosure Portal. This portal provides a streamlined, secure method for submitting voluntary self-disclosures of potential violations of OFAC-administered sanctions programs.

https://disclosure.ofac.treas.gov/

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Office of Foreign Assets Control Reporting, Procedures and Penalties Regulations Sanctions Reconsideration Portal

February 26, 2026: OFAC is seeking to add a new electronic Sanctions Reconsideration Portal information collection contained within § 501.807 of OFAC’s Reporting, Procedures and Penalties Regulations (the ‘‘Regulations’’), which pertains to the operation of the various economic sanctions programs administered by OFAC under 31 CFR chapter V. The electronic Sanctions Reconsideration Portal would gather specific information from the petitioner and provide a more efficient process for collecting and reviewing applications for reconsideration. Petitioner use of the Sanctions Reconsideration Portal will be voluntary. The submissions covered by this information collection will be reviewed by the U.S. Department of the Treasury and may be used for sanctions reconsiderations and other regulatory or administrative actions by OFAC under its authorities.

The public is invited to submit comments to OFAC related to the information collection portal. Written comments must be received by March 27, 2026 to be assured of consideration.

https://www.govinfo.gov/content/pkg/FR-2026-02-25/pdf/2026-03780.pdf

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U.S. Census Bureau

Update to the Automated Export System Trade Interface Requirements (AESTIR) Appendix O – DDTC ITAR Codes

February 18, 2026:

AESTIR Appendix O has been updated to include International Traffic in Arms Regulations (ITAR) Exemption Code 126.9U – Temporary export, reexport, or temporary import of vessels described in USML Category XX(a)(10).

Additional information about the ITAR exemption can be found:

Fact sheet can be found at:

https://links1.govdelivery.com/CL0/https:%2F%2Fcontent.govdelivery.com%2Fattachments%2FUSCENSUS%2F2026%2F02%2F18%2Ffile_attachments%2F3557556%2FFact%2520Sheet%2520-%2520LR1%2520-%252020250827.pdf/1/0100019c721347d0-c14be6aa-ee0c-40ba-aacb-4d2476654091-000000/68lg_uzeh1oygTcJvoUXUQq4_jVvzK1d6BJPC2shsuI=445

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How to Resolve Common AES Response Messages

February 19, 2026:

When submitting your Electronic Export Information (EEI) to the Automated Export System (AES), you can receive different response messages: Fatal, Compliance, Verify, Informational and Warning. It is important that AES filers address and/or correct Response Messages as soon as they are received to comply with the Foreign Trade Regulations.

To help you take the appropriate action, here is guidance on how to address one of the most frequent Response Messages that were generated in the AES for the previous month.

Response Code: 643

Narrative: Quantity (2) Must Be Greater Than Zero

Severity: Fatal

Reason: The Schedule B/HTS number reported requires a second Quantity to be reported and the Quantity (2) is missing or reported as zero.

Resolution: Quantity (2) must be greater than zero.

Verify the Quantity (2) reported, correct the shipment and resubmit.

For a complete list of the AES Response Codes, their reasons and resolutions, see:

Appendix A – Commodity Filing Response Messages.

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License Type Code Requirements

February 26, 2026:

The U.S. Census Bureau was notified by the Bureau of Industry and Security (BIS) about an increase in filers reporting License Type Code “C33” for shipments with Drug Enforcement Administration (DEA) permit information. DEA along with several other Partnering Government Agencies (PGA) have their own record sets for the collection of permit and license information. However, DEA and other PGAs that collect permit and license information through PGA Record Sets do not have their own License Type Codes. For consistency, any agency that does not have their own License Type Code should report “Other Partnership Agency License” or “OPA” in the License Type Code.

Please note, BIS, Department of State, Office of Foreign Assets Control, Nuclear Regulatory Commission, and Department of Energy (covered under E01) licenses cannot use License Type Code “OPA.” Those licenses must be reported under the specific agency’s License Type Code. Please refer to Appendix F for the appropriate License Type Code selection for your shipment and Appendix Q for the existing PGA Record Sets. For more information or questions pertaining to your permit or license, please refer to the appropriate licensing agency.

LATEST SANCTIONS FINES & PENALTIES

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

Fines and Penalties

February 6, 2026. The U.S. District Court of Arizona sentenced Peter Biar Ajak to 46 months in prison, followed by three years of supervised release. Abraham Chol Keech, Ajak’s co-defendant, was sentenced on December 18, 2025 to 41 months in prison and three years of supervised release. Both previously plead guilty to conspiracy to violate the Arms Export Control Act (AECA) and the Export Control Reform Act (ECRA).

The defendants, with Mr. Ajak directing the conspiracy, amassed $4M military-grade weapons – which included ten Stinger missile systems, two hundred grenade launchers, more than a thousand machine guns and rifles, and over 3.5 million rounds of ammunition – to effect a coup d’état in South Sudan. Furthermore, the individuals sought to export the weapons to South Sudan without the required export licenses.

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

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February 11, 2026: Department of Commerce’s Bureau of Industry and Security (BIS) announced a settlement agreement with Applied Materials Inc. of Santa Clara, California (AMAT) and Applied Materials Korea, Ltd. (AMK), covering illegal exports of U.S. semiconductor manufacturing equipment to China. AMAT and AMK agreed to pay a penalty of approximately $252 million – the second-highest penalty ever imposed by BIS.

bis.gov/press-release/applied-materials-pay-252-million-penalty-bis-illegally-exporting-semiconductor-manufacturing-equipment

See our article “BIS imposes $252.5 Million Penalty on Applied Materials and Korean Subsidiary over unauthorized Reexports to SMIC” on our website or found at the attached Link

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February 12, 2026: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $1,720,000 settlement with IMG Academy, LLC to settle its potential civil liability for 89 apparent violations of OFAC counternarcotics sanctions. Between 2019 and 2025, IMG Academy dealt in the property or interests in property of two Specially Designated Nationals (SDNs) sanctioned for their ties to a sanctioned Mexico-based drug cartel. Specifically, IMG Academy entered into yearly tuition agreements with the SDNs and received and processed payments pursuant to those agreements. The settlement amount reflects OFAC’s determination that IMG Academy’s conduct was non-egregious and not voluntarily disclosed.

https://ofac.treasury.gov/media/935006/download?inline

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February 13, 2026: Eleview International Inc. (Eleview), Oleg Nayandin (Mr. Nayadin), 54, of Fairfax, Virginia, and Vitaliy Borisenko (Mr. Borisenko), 39, of Vienna, Virginia, were sentenced on February 13, 2026 for conspiracy to violate the Export Control Reform Act. Eleview was ordered to pay a fine of $125,000 and sentenced to three years of probation that included requirements to submit biannual compliance reports and mandate export-control training for its employees. Mr. Nayandin was sentenced to three years in prison. Mr. Borisenko was sentenced to a year in prison.

Eleview, Mr. Nayandin, and Mr. Borisenko operated an e-commerce website that allowed Russian customers to order U.S. goods and technology directly from U.S. retailers, who shipped the items to Eleview’s warehouse in Chantilly. They then consolidated the packages before shipping them to the Russian customers, often using other freight forwarders as intermediaries. After the Department of Commerce imposed stricter export controls in response to Russia’s further invasion of Ukraine in February 2022, Mr. Nayandin and Mr. Borisenko, on behalf of Eleview, coordinated shipments of items to purported end users in Turkey, Finland, and Kazakhstan that were ultimately destined for end users in Russia. To facilitate these illegal exports, they made numerous false statements to other freight forwarders about the end users and ultimate consignees of the items in these shipments.

https://www.justice.gov/usao-edva/pr/virginia-company-owner-and-senior-employee-sentenced-illegally-exporting-millions

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February 18, 2026: The Justice Department announced that Milan Dimitrov, a Bulgarian national, was sentenced in federal court to 38 months, time served, for conspiracy to violate the International Emergency Economic Powers by facilitating the export of U.S.-origin radiation-hardened and high-temperature electronic circuits to Russia.

In 2014, following Russia’s invasion of Crimea, the U.S. imposed export controls that made it illegal to export those goods directly to Russia without a license from the Department of Commerce, Bureau of Industry and Security.

Mr. Dimitrov worked at Multi Technology Integration Group EOOD (MTIG), a Bulgarian company created to enable two Russian companies to acquire U.S.-origin radiation-hardened and high-temperature electronic circuits. In 2015, MTIG shipped U.S.-origin radiation-hardened and high-temperature electronic circuits to OOO Sovtest Comp in Russia in violation of the EAR and IEEPA.
https://www.justice.gov/usao-wdtx/pr/bulgarian-national-sentenced-austin-scheme-illegally-export-us-origin-sensitive

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February 24, 2026: The Justice Department announced that Peter Williams (Mr. Williams), 39, an Australian national, was sentenced in the U.S. District Court for the District of Columbia to 87 months in prison for selling his employer’s trade secrets — sensitive and protected cyber-exploit components — to a Russian cyber-tools broker, announced the Department of Justice. In addition to the 87-month prison term, U.S. District Court Judge AliKhan for the District of Columbia ordered Mr. Williams to serve three years of supervised release with special conditions, to forfeit a money judgment of $1.3 million, cryptocurrency and property to include a house, and luxury items such as watches and jewelry.

“Peter Williams stole a U.S. defense contractor’s trade secrets about highly sensitive cyber capabilities and sold them to a broker whose clients include the Russian government, putting our national security and countless potential victims at risk,” said Assistant Director Roman Rozhavsky of the FBI’s Counterintelligence and Espionage Division.

Both the Department of State and the Department of Treasury’s Office Of Foreign Assets Control took separate action on February 24, 2026 to disrupt a Russian cyber-tools broker and its operators.

https://www.justice.gov/opa/pr/former-general-manager-us-defense-contractor-sentenced-87-months-selling-stolen-trade

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February 25, 2026: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced that a natural U.S. person (“U.S. Person-1”) has agreed to pay $3,777,000 to settle their potential civil liability for 20 apparent violations of OFAC sanctions on Syria previously in effect. Between January 2018 and December 2021, when U.S. sanctions on Syria were in place, U.S. Person-1 provided managerial services to Syrian entities in their role as an executive and board member for four Syrian real estate companies. These services included reviewing and signing financial statements, approving operational and employee expenses, and supervising the collection of service fees. The apparent violations occurred under the former regime of Syrian president Bashar al-Assad, and prior to the removal of U.S. sanctions on Syria in 2025.

The settlement amount reflects OFAC’s determination that the apparent violations were not voluntarily self-disclosed and were egregious. This enforcement action highlights the obligations of all U.S. persons, including U.S. citizens residing outside of the United States, to comply with OFAC sanctions.

https://ofac.treasury.gov/recent-actions/20260225_66

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February 25, 2026: The Bureau of Industry & Security published an administrative enforcement settlement with Vizocom ICT (Vizocom) of El Cajon, CA for one violation of the EAR.

On or about May 22, 2019, Vizocom uploaded/transferred specifications for a U.S. manufacturer’s Very High Frequency/Ultra High Frequency (VHF/UHF) antenna to the “Made in China” portal operated by a Chinese manufacturer located in the People’s Republic of China (“PRC”). The antenna is designed for military radios and has no civilian applications. The specification is classified as under Export Control Classification Number (“ECCN”) 3E611 for the production of an antenna controlled under ECCN 3A611. Pursuant to §§ 742.4 and 742.6 of the EAR, a BIS license was required to export the specifications to the PRC, and no license exceptions were available. Vizocom did not seek or obtain a license for the export of the specifications. Vizocom purchased antennas from the Chinese manufacturer that were produced based on the specifications that were uploaded and transmitted to the Chinese manufacturer. Vizocom supplied 450 antennas produced by the Chinese manufacturer to the U.S. Navy, falsely labeling the packaging an specification sheet to hide the identity of the manufacturer. Vizocom received $165,109.50 for the antennas.

The BIS assessed against Vizocom a civil penalty in the amount of $374,474. In addition to the civil penalty, Vizocom is subject to a five-year denial of its export privileges under EAR.

https://www.bis.gov/media/documents/vizocom-ict-final-order-2-24-2026.pdf

See our article “BIS Settlement with Vizocom ICT Highlights Enforcement Focus on Technical Data

Transfers in Vendor Workflows” at the attached Link

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February 25, 2026: Former U.S. Air Force officer and pilot Gerald Eddie Brown, Jr. (Mr. Brown), also known by the call sign “Runner,” 65, a U.S. citizen, was arrested on February 25, 2026 in Jeffersonville, Indiana. Brown was charged by criminal complaint for providing and conspiring to provide defense services to Chinese military pilots without authorization, in violation of the Arms Export Control Act (AECA).

Brown in or around August 2023 began to arrange the terms of his contract to train Chinese military pilots, using a co-conspirator to negotiate with Stephen Su Bin, a Chinese national who in 2016 pled guilty in the U.S. District Court for the Central District of California to conspiring to hack into the computer networks of major U.S. defense contractors and steal sensitive military and export-controlled data for the PRC. He was sentenced to nearly four years in prison. Su Bin and his company PRC Lode Technology Company were also added to the U.S. Department of Commerce’s Entity List in 2014. Throughout these communications, Brown consistently stated his intent to train PRC military pilots in combat aircraft operations.

In December 2023, Brown traveled to China to begin his work training PRC military pilots.

https://www.justice.gov/opa/pr/former-us-air-force-pilot-arrested-providing-defense-services-chinese-military

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February 26, 2026: The Bureau of Industry & Security (BIS) published on February 26, 2026 an administrative enforcement settlement with Teledyne FLIR LLC and its affiliates, FLIR Optoelectronic Technology (Shanghai) Co. Ltd. and Teledyne FLIR Commercial Systems Inc, collectively referred to as Teledyne FLIR. BIS assessed against Teledyne FLIR a civil penalty of $1M for 19 violations of the EAR.

The violations are the result of the following:

A flawed de minimis calculations that led Teledyne FLIR to incorrectly conclude that foreign produced commodities containing U.S. controlled content was not subject to the EAR causing the exports without the required BIS export license of 6A003 camera cores and 6A003.b.4.b camera kits from Sweden to China.
The intent to evade the EAR by entering into an agreement with a Chinese drone manufacturer to integrate a 6A003.b.4.b FLIR camera into a European-made camera system. The agreement was structed to purposely push the value of the U.S. controlled content to 25% below fair market value.
Failure to comply with the recordkeeping requirements imposed as conditions of a BIS export license.
Failure to obtain BIS export license for export transactions involving an address, ADDRESS 04, identified on the Entity List.

https://www.bis.gov/media/documents/teledyne-flir-final-order-2-26-2026.pdf

Sanctions

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

February 2, 2026: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Venezuela-related General License 5U, “Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After March 20, 2026.

General License No. 5U Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After March 20, 2026

All transactions related to, the provision of financing for, and other dealings in the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond that would be prohibited by subsection l(a)(iii) of Executive Order (E.O.) 13835 of May 21, 2018, as amended by E.O. 13857 of January 25, 2019, and incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized.

This general license does not authorize any transactions or activities otherwise prohibited by the VSR, or any other part of 31 CFR chapter V.

Additionally, OFAC also issued amended Venezuela-related Frequently Asked Question (FAQ 595).

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

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

General License 5 was replaced and superseded by General License 5A on October 24, 2019 with a delay in the effectiveness of the authorization in the general license. Since that date, OFAC has extended the delay in effectiveness multiple times. Most recently, OFAC issued General License 5U on February 2, 2026, which further delays the effectiveness of the authorization in GL 5 until March 20, 2026. Between October 24, 2019 and March 20, 2026 (the date the authorization in General License 5U becomes effective), there is no authorization in effect that licenses against subsection 1(a)(iii) of E.O. 13835 applicable to the holders of the PdVSA 2020 8.5 percent bond. As a result, during such period, transactions related to the sale or transfer of CITGO shares in connection with the PdVSA 2020 8.5 percent bond are prohibited, unless specifically authorized by OFAC.

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

https://ofac.treasury.gov/recent-actions/20260202

https://ofac.treasury.gov/media/934976/download?inline

https://ofac.treasury.gov/faqs/595

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February 6, 2026: OFAC issued 10 Venezuela-related FAQs 1226 – 1235

Question 1235: Does Venezuela General License (GL) 46 authorize downstream trading activities in Venezuelan-origin oil?

Answer: Yes. Once a transaction with the Government of Venezuela (GOV), Petróleos de Venezuela, S.A. (PdVSA), or its majority-owned subsidiaries (PdVSA Entities) has been completed pursuant to GL 46, and the interest—including any future or contingent interest—of a blocked entity is fully extinguished, then the oil can be freely sold, resold, and traded by any downstream purchaser, including entities that are not established U.S. entities, as defined in GL 46.

Question 1234: How does a financial institution verify a transaction is compliant with Venezuela General License (GL) 46?

Answer: In connection with its normal due diligence, a financial institution may rely on the statements of its customer that the transaction is consistent with the terms of GL 46, unless it knows or has reason to know otherwise.

Question 1233: Are all entities engaged in a transaction authorized by Venezuela General License (GL) 46 required to have contracts with the dispute resolution requirement included in paragraph (a)(1)?

Answer: No. The dispute resolution requirement in paragraph (a)(1) of GL 46 applies only to contracts governing transactions undertaken by an established U.S. entity when the contract is with the Government of Venezuela (GOV), Petróleos de Venezuela, S.A. (PdVSA), or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest (PdVSA Entities).

This requirement does not apply to indirect parties or indirect counterparties involved in transactions authorized by GL 46, such as downstream transactions involving the provision of shipping, insurance, or other services to an entity engaged in a transaction involving PdVSA. For example, this provision would not apply to a contract between an insurance provider and an established U.S. entity engaged in a transaction with PdVSA to purchase Venezuelan-origin oil (though it would apply to the contract between the U.S. entity and PdVSA).

Question 1232. What does OFAC consider “commercially reasonable terms,” as described in Venezuela General License (GL) 46?

Answer: “Commercially reasonable terms” means terms that are consistent with prevailing market and industry standards for like or similar products produced by a company of similar size and scope, while taking into account characteristics such as quality, quantity, pricing, performance, and safety, among others. Commercially reasonable terms include terms related to, among other things, the governance, economics, operations, and legal/compliance requirements of a contract negotiated at arm’s length between two or more parties.

Question 1231: What entities or jurisdictions are excluded from transactions authorized under Venezuela General License (GL) 46?

Answer: GL 46 excludes the involvement of persons located in or organized under the laws of the Russia Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, and the Republic of Cuba—as well as any entity owned or controlled, directly or indirectly (including by or in a joint venture with) any of the foregoing.

In addition, GL 46 does not authorize transactions with any Venezuelan or U.S. entity that is owned or controlled by, or in a joint venture with, a person located in or organized under the laws of the People’s Republic of China. However, GL 46 does not restrict the resale of Venezuelan-origin oil to China by an established U.S. entity.

Question 1230: Can an entity that is not an “established U.S. entity” be involved in transactions authorized by Venezuela General License (GL) 46?

Answer: Yes. Non-U.S. persons may engage in transactions or provide services that are ordinarily incident and necessary to the established U.S. entity’s transactions authorized by GL 46. Such activities or ancillary services could include: providing transportation and logistics services to an established U.S. entity for the export of Venezuelan-origin oil; providing marine insurance to vessels chartered by established U.S. entities to transport Venezuelan-origin oil; the financing of related cargoes or receivables; leasing storage facilities for Venezuelan-origin oil purchased by an established U.S. entity; or contracting with established U.S. entities for repair or maintenance services of infrastructure necessary to effectuate the export of oil from Venezuela, among others.

Please see FAQ 1235 for additional information regarding authorized downstream trading activities.

Please see FAQ 1231 for certain individuals and jurisdictions excluded from the scope of GL 46.

Question 1229: Venezuela General License (GL) 46 authorizes certain activity by an “established U.S. entity.” What is an “established U.S. entity” for purposes of GL 46?

Answer: For purposes of GL 46, the term “established U.S. entity” means any entity organized under the laws of the United States or any jurisdiction within the United States on or before January 29, 2025.

GL 46 is designed to help ensure that the oil exported from Venezuela will be through legitimate and authorized channels, consistent with U.S. law and President Trump’s efforts to restore prosperity, safety, and security to the United States and Venezuela. Established U.S. companies should be familiar with complying with U.S. laws and regulations, including U.S. sanctions regulations, which will help ensure their ability to market Venezuelan oil in the global marketplace for the benefit of the United States, Venezuela, and our allies.

Question 1228: Does Venezuela General License (GL) 46, “Authorizing Certain Activities Involving Venezuelan-Origin Oil,” authorize exploration activity or negotiations for new investment activities?

Answer: No. GL 46 authorizes the purchase, exportation, and sale of Venezuelan-origin oil that has already been extracted, including the refining of such oil. It does not authorize other exploration or production activities, such as conducting geological surveys, drilling wells, or extracting oil from fields in Venezuela, nor does it authorize activities related to investment in the Venezuelan oil sector, such as negotiations with Petróleos de Venezuela, S.A. (PdVSA) to enter into a contract to develop or operate oil fields, blocks, or other concessions. For more information on what transactions are authorized by GL 46, see FAQ 1227.

Questions 1227: What activities does Venezuela General License (GL) 46 authorize?

Answer: GL 46 authorizes activities that are ordinarily incident and necessary to the lifting (which refers to the physical loading and removal of oil from a terminal, storage facility, or production site for delivery to a buyer), exportation, reexportation, sale, resale, supply, storage, marketing, purchase, delivery, or transportation of Venezuelan-origin oil by an established U.S. entity, which may include:

engaging in commercial, legal, and technical discussions necessary to scope purchases of Venezuelan-origin oil, including with third-party legal, commercial, or due diligence consultants;
conducting safety, environmental, and other relevant inspections, including site surveys;
arranging logistics, security services, delivery points, and shipping preparation, including obtaining marine insurance and engaging with relevant port or maritime authorities of the Government of Venezuela (GOV) or their personnel;
conducting certain downstream activities, including the refining and resale of Venezuelan-origin oil;
coordinating payment structures, including payments in the form of swaps of oil, diluents, or refined petroleum products, among others;
making required repairs and maintenance to pipeline, storage, or port infrastructure necessary to effectuate the loading of vessels; or
the financing of related cargos or receivables.

Notably, GL 46 does not authorize:

transactions that are not on commercially reasonable terms;
payment in gold or the use of debt swaps;
payments denominated in digital currency, digital coin, or digital tokens issued by, for, or on behalf of the Government of Venezuela, including the petro;
any transaction involving a person located in the Russian Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, the Republic of Cuba, or any entity that is owned or controlled by or in a joint venture with such persons;
transactions involving an entity located in or organized under the laws of Venezuela or the United States that is owned or controlled, directly or indirectly, by or in a joint venture with a person located in or organized under the laws of the People’s Republic of China;
the unblocking of any property blocked pursuant to the Venezuela Sanctions Regulations; or
any transaction involving a blocked vessel.

For information on how an entity that is not an “established U.S. entities” (including non-U.S. entities) can be involved in transactions authorized by GL 46, see FAQ 1230.

Question 1226: Does “Venezuelan-origin oil” as referenced in Venezuela General License (GL) 46, “Authorizing Certain Activities Involving Venezuelan-Origin Oil,” include petroleum products?

Answer: Yes. Consistent with the term “Venezuelan oil” as defined in section 5(a) of Executive Order 14245, “Imposing Tariffs on Countries Importing Venezuelan Oil,” the term “Venezuelan-origin oil” means crude oil or petroleum products extracted, refined, or exported from Venezuela, regardless of the nationality of the entity involved in the production or sale of such crude oil or petroleum products.

As defined by the U.S. Energy Information Administration (EIA), petroleum products include unfinished oils, liquefied petroleum gases, pentanes plus, aviation gasoline, motor gasoline, naphtha-type jet fuel, kerosene-type jet fuel, kerosene, distillate fuel oil, residual fuel oil, petrochemical feedstocks, special naphthas, lubricants, waxes, petroleum coke, asphalt, road oil, still gas, and miscellaneous products obtained from the processing of crude oil (including lease condensate), natural gas, and other hydrocarbon compounds. In keeping with the EIA’s standard definition, petroleum products do not include natural gas, liquefied natural gas, biofuels, methanol, and other non-petroleum fuels.

Accordingly, crude oil blends such as Merey 16 or bitumen blends, as well as petroleum products or byproducts, including gasoline, asphalt, flexicoke, and petroleum coke, are considered “Venezuelan-origin oil” for the purposes of GL 46.

https://ofac.treasury.gov/faqs/added/2026-02-06

https://www.federalregister.gov/documents/2025/03/27/2025-05440/imposing-tariffs-on-countries-importing-venezuelan-oil

https://ofac.treasury.gov/media/934886/download?inline

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February 6, 2026: The Department of State sanctioned 15 entities, two individuals, and 14 shadow fleet vessels connected to the illicit trade in Iranian petroleum, petroleum products, and petrochemical products. These targets have generated revenue that the regime uses to conduct its malign activities. Based on the Department of State’s sanctions, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) added the following individuals to OFAC’s SDN List in connection to the illicit trade in Iranian petroleum, petroleum products, and petrochemical products:

Ozsuren, Mehmet of the United Kingdom; and
Shinde, Akash Anant of India;

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

All Win Shipping Management Limited of Hong Kong;
Amon Kimya Ve Makina Sanayi Ve Ticaret Limited Sirketi of Turkey;
Bakht Al Azhar Trading L.L.C of U.A.E.;
Diako Ic Ve Dis Ticaret Anonim Sirketi of Turkey;
Elevate Marine Management Private Limited of India;
Elysian Horizon Corp of the Seychelles;
Fluxus Marine Inc of Kazakhstan;
Manarat Alkhaleej Marine Services FZE of the U.A.E.;
Mars Oceanway Inc of Turkey;
MHK Shipping Corp of Turkey;
Mphasis Marine Solutions FZE of the U.A.E.;
Qingdao Ocean Kimo Ship Management Co Ltd of China;
Shanghai Qizhang Ship Management Co., Ltd of China;
Starex Dis Ticaret Kimya Anonim Sirketi of Turkey; and
Vicens Marine Co of the Marshall Islands.

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

Al Safa (3E3958) Oil Products Tanker Panama flag; Vessel Registration Identification IMO 9222649;
Aqua Live (P4AE06) Crude Oil Tanker Aruba flag; Vessel Registration Identification IMO 9282792;
Benedict (TJMC128) Crude Oil Tanker Cameroon flag; Vessel Registration Identification IMO 9293155;
Benlai (8PQJ) Crude Oil Tanker Barbados flag; Vessel Registration Identification IMO 9312494;
Fortune Gas (3E2335) LPG Tanker Panama flag; Vessel Registration Identification IMO 9471123;
Gas River (3E2285) LPG Tanker Panama flag; Vessel Registration Identification IMO 9369760;
Gaz Crystal (3E5206) LPG Tanker Panama flag; Vessel Registration Identification IMO 9318618;
Ocean Guardian (3E5421) Oil Products Tanker Panama flag; Vessel Registration Identification IMO 9267948;
Rayyan Gas (T8A4711) LPG Tanker Palau flag; Vessel Registration Identification IMO 9133109;
Veter (TJMC657) Crude Oil Tanker Cameroon flag; Vessel Registration Identification IMO 9233739;
Vicscene (a.k.a. GLOBAL HARVEST) (8PAA6) Crude Oil Tanker Barbados flag; Vessel Registration Identification IMO 9290775;
White Shark (T7DB9) LPG Tanker San Marino flag; Vessel Registration Identification IMO 9155626;
Yongheng Ocean (8PZW8) Chemical/Oil Tanker Barbados flag; Vessel Registration Identification IMO 9234472; and
Zevs (TJMC822) Crude Oil Tanker Cameroon flag; Vessel Registration Identification IMO 9168946.

https://ofac.treasury.gov/recent-actions/20260206 and

https://www.state.gov/releases/office-of-the-spokesperson/2026/02/sanctions-to-combat-illicit-traders-of-iranian-oil-and-the-shadow-fleet-2/

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February 10, 2026: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued:

Venezuela General License 48, “Authorizing the Supply of Certain Items and Services to Venezuela;”

Venezuela General License 30B, “Authorizing Certain Transactions Necessary to Port and Airport Operations;” and

Venezuela General License 46A, “Authorizing Certain Activities Involving Venezuelan-Origin Oil.

General License No. 48 Authorizing the Supply of Certain Items and Services to Venezuela

All transactions prohibited by the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), including those 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 (collectively, “PdVSA Entities”), that are ordinarily incident and necessary to the provision from the United States or by a U.S. person of goods, technology, software, or services for the exploration, development, or production of oil or gas in Venezuela are authorized, provided that:

(1) Any contract for such transactions with the Government of Venezuela, PdVSA, or PdVSA Entities specify that the laws of the United States or any jurisdiction within the United States govern the contract and that any dispute resolution under the contract occur in the United States; and

(2) Any monetary payment to a blocked person, excluding payments for local taxes, permits, or fees, is made into the Foreign Government Deposit Funds, as specified in Executive Order 14373 of January 9, 2026, or any other account as instructed by the U.S. Department of the Treasury.

This general license does not authorize:

(1) Payment terms that are not commercially reasonable, involve debt swaps or payments in gold, or are denominated in digital currency, digital coin, or digital tokens issued by, for, or on behalf of the Government of Venezuela, including the petro; 2

(2) Any transaction involving a person located in or organized under the laws of the Russian Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, the Republic of Cuba, the People’s Republic of China, or any entity that is owned or controlled, directly or indirectly, by or in a joint venture with such persons;

(3) The unblocking of any property blocked pursuant to the VSR;

(4) Any transaction involving a blocked vessel;

(5) The formation of new joint ventures or other entities in Venezuela to explore or produce oil or gas; or

(6) Any transactions or dealings related to the exportation or reexportation of diluents, directly or indirectly, to Venezuela.

Any person that exports, reexports, sells, resells, or supplies goods, technology, software, or services pursuant to this general license must provide a detailed report to Sanctions_inbox@state.gov and VZReporting@doe.gov for each of these transactions.

Reports are due ten days after the execution of the first of such transactions and every 90 days thereafter while such transactions are ongoing.

General License No. 30B Authorizing Certain Transactions Necessary to Port and Airport Operations

All transactions and activities involving the Government of Venezuela prohibited by Executive Order (E.O.) 13884 of August 5, 2019, as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), that are ordinarily incident and necessary to operations or use of ports and airports in Venezuela are authorized.

All transactions and activities prohibited by E.O. 13850 of November 1, 2018, as amended by E.O. 13857 of January 25, 2019, and incorporated into the VSR, involving the Instituto Nacional de los Espacios Acuaticos (INEA), or any entity in which INEA owns, directly or indirectly, a 50 percent or greater interest, that are ordinarily incident and necessary to operations or use of ports and airports in Venezuela are authorized.

This general license does not authorize any transactions or activities otherwise prohibited by the VSR, or any other part of 31 CFR chapter V, or any transactions or activities with any blocked person other than INEA, or any entity in which INEA 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, unless separately authorized.

General License No. 46A Authorizing Certain Activities Involving Venezuelan-Origin Oil

All transactions prohibited by the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), including those 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 (collectively, “PdVSA Entities”), that are ordinarily incident and necessary to the lifting, exportation, reexportation, sale, resale, supply, storage, marketing, purchase, delivery, or transportation of Venezuelan-origin oil, including the refining of such oil, by an established U.S. entity are authorized, provided that:

This general license does not authorize:

(1) Payment terms that are not commercially reasonable, involve debt swaps or payments in gold, or are denominated in digital currency, digital coin, or digital tokens issued by, for, or on 2 behalf of the Government of Venezuela, including the petro;

(2) Any transaction involving a person located in or organized under the laws of the Russian Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, the Republic of Cuba, or any entity that is owned or controlled, directly or indirectly, by or in a joint venture with such persons;

(3) Any transaction involving an entity located in or organized under the laws of Venezuela or the United States that is owned or controlled, directly or indirectly, by or in a joint venture with a person located in or organized under the laws of the People’s Republic of China;

(4) The unblocking of any property blocked pursuant to the VSR; or

(5) Any transaction involving a blocked vessel.

Any person that exports, reexports, sells, resells, or supplies Venezuelan-origin oil to countries other than the United States pursuant to this general license must provide a detailed report to Sanctions_inbox@state.gov and VZReporting@doe.gov for each of these transactions:

Reports are due ten days after the execution of the first of such transactions and every 90 days thereafter while such transactions are ongoing.

https://ofac.treasury.gov/recent-actions/20260210_33

https://ofac.treasury.gov/media/934986/download?inline

https://ofac.treasury.gov/media/934996/download?inline

https://ofac.treasury.gov/media/935001/download?inline

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February 10, 2026: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on Hizballah operatives who continue to exploit Lebanon’s informal financial sector that generate revenue for Hizballah. These actors have supported sanctions evasion schemes involving Hizballah-controlled financial institution Al-Qard Al-Hassan (AQAH) and an Iran-based Hizballah finance team operative. Hizballah uses AQAH as a financial institution to undermine the Lebanese state and fund its terrorist activities.

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

Borisov, Andrey Viktorovich or Russia; and
Maged, Mohamed Nayef of Lebanon.

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

Brilliance Maritime Ventures S.A of Panama;
Jood Sarl (a.k.a. “JUD”) of Lebanon;
Platinum Group International Dis Ticaret Limited Sirketi of Turkey; and
Sea Surf Shipping Limited of Turkey.

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

Brilliance Bulk Carrier Panama flag; Vessel Registration Identification IMO 9450715; and
Lara General Cargo St. Kitts & Nevis flag; Vessel Registration Identification IMO 9221475

https://ofac.treasury.gov/recent-actions/20260210 and

https://www.state.gov/releases/office-of-the-spokesperson/2026/02/sanctioning-hizballah-finance-operatives-2/

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February 13, 2026: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Venezuela-related General License 49, “Authorizing Negotiations of and Entry Into Contingent Contracts for Certain Investment in Venezuela;” and Venezuela-related General License 50, “Authorizing Transactions Related to Oil or Gas Sector Operations in Venezuela of Certain Entities.

General License No. 49 Authorizing Negotiations of and Entry Into Contingent Contracts for Certain Investment in Venezuela

All transactions prohibited by the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), including those 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 related to the negotiation of and entry into contingent contracts for new investment in oil or gas sector operations in Venezuela are authorized, provided that the performance of any such contract is made expressly contingent upon separate authorization from the Office of Foreign Assets Control (“contingent contracts”).

This general license does not authorize:

(1) Any transaction involving a person located in the Russian Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, the Republic of Cuba, the People’s Republic of China, or any entity that is owned or controlled by or in a joint venture with such persons;

(2) The unblocking of any property blocked pursuant to the VSR; or

(3) Any transaction involving a blocked vessel.

General License No. 50 Authorizing Transactions Related to Oil or Gas Sector Operations in Venezuela of Certain Entities

All transactions prohibited by the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), including those 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 (collectively, “PdVSA Entities”), that are related to oil or gas sector operations in Venezuela of the entities listed in the Annex to this general license and their subsidiaries are authorized, provided that:

This general license does not authorize:

(2) Any transaction involving a person located in the Russian Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, the Republic of Cuba, the People’s Republic of China, or any entity that is owned or controlled by or in a joint venture with such persons;

(3) The unblocking of any property blocked pursuant to the VSR; or 2

(4) Any transaction involving a blocked vessel.

Any person that engages in transactions pursuant to this general license must provide a detailed report to Sanctions_inbox@state.gov and VZReporting@doe.gov.

Reports are due ten days after the execution of the first of such transactions and every 90 days thereafter while such transactions are ongoing.

https://ofac.treasury.gov/recent-actions/20260213

https://ofac.treasury.gov/media/935011/download?inline

https://ofac.treasury.gov/media/935016/download?inline

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February 18, 2026: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued two new Venezuela-related Frequently Asked Questions (FAQs 1236 and 1237).

Question 1236: How does Venezuela General License (GL) 30B differ from Venezuela GL 30A?

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Bottom of Form

Answer: On February 10, 2026 OFAC issued Venezuela GL 30B, “Authorizing Certain Transactions Necessary to Port and Airport Operations,” which removes the prohibition in GL 30A regarding transactions or activities related to the exportation or reexportation of diluents to Venezuela. Transactions authorized by GL 30B continue to include payments that are ordinarily incident and necessary to operations or use of ports and airports in Venezuela, including transactions involving the Instituto Nacional de los Espacios Acuaticos (INEA) or its majority-owned subsidiaries. GL 30B authorizes the payment of port fees and customs duties—including for activities authorized under Venezuela GLs 46A, 47, and 48.

Question 1237: Do Venezuela General Licenses (GLs) 46A and 48 allow for the payments of certain local taxes, permits, and fees in support of authorized transactions involving Venezuela’s oil or gas sectors?

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Answer

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: Yes. Consistent with other authorizations issued by OFAC pursuant to the Venezuela Sanctions Regulations (VSR), GLs 46A and 48 authorize routine payments of local taxes, permits, and fees to the Government of Venezuela (GOV) or its instrumentalities.

However, other payments, including royalties, fixed per-barrel production levies, or federal taxes to blocked persons, such as the GOV or Petróleos de Venezuela, S.A. (PdVSA), must be made into the Foreign Government Deposit Funds, as specified in Executive Order (E.O.) 14373, or any other account as instructed by the U.S. Department of the Treasury.

https://ofac.treasury.gov/recent-actions/20260218

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February 19, 2026: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a timeshare fraud network led by the terrorist Cartel de Jalisco Nueva Generacion (CJNG). The action targets Kovay Gardens, a Mexican timeshare resort, as well as five Mexican individuals and 17 Mexican companies associated with the network. Many of these individuals and entities are based in or near Puerto Vallarta, a popular tourist destination that also serves as a strategic stronghold for CJNG. CJNG is a brutally violent terrorist cartel that continues to diversify its illicit revenue streams beyond drug trafficking, including through timeshare fraud and fuel theft. These activities generate significant proceeds for the organization at the expense of U.S. citizen victims. Timeshare fraud often targets vulnerable older Americans and can defraud victims of their life savings.

https://home.treasury.gov/news/press-releases/sb0400

https://ofac.treasury.gov/media/935021/download?inline

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February 19, 2026: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Counter Terrorism General License 34, “Authorizing the Wind Down of Transactions Involving Kovay Gardens.” Kovay Gardens, a timeshare resort, was added to the SDN List as result of being controlled by the CJNG and for defrauding potential buyers and owners.

General License No. 34 Authorizing the Wind Down of Transactions Involving Kovay Gardens

All transactions prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR) or the Illicit Drug Trade Sanctions Regulations, 31 CFR part 599 (IDTSR), that are ordinarily incident and necessary to the wind down of any transaction involving Kovay Gardens, or any entity in which Kovay Gardens owns, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern daylight time, March 21, 2026, provided that any payment to a blocked person is made into a blocked account in accordance with the IDTSR and GTSR.

This general license does not authorize any transactions otherwise prohibited by the GTSR or IDTSR, including transactions involving any person blocked pursuant to the GTSR or IDTSR other than the blocked persons described in this general license, unless separately authorized.

https://ofac.treasury.gov/recent-actions/20260219 https://ofac.treasury.gov/media/935026/download?inline

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February 19, 2026: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned three commanders of the Rapid Support Forces (RSF)—a Sudanese paramilitary group—for their actions in El-Fasher, Sudan. These individuals were involved in the RSF’s 18-month siege of and eventual capture of El-Fasher, in which the RSF perpetrated a horrific campaign of ethnic killings, torture, starvation, and sexual violence. Since the beginning of Sudan’s civil war in April 2023, the RSF and its aligned militias have committed widespread atrocities, including war crimes, crimes against humanity, and genocide.

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

Adam, Elfateh Abdullah Idris of Sudan;
Gutierrez Ochoa, Jose Luis of Mexico;
Jimenez Tapia, Oscar Enrique of Mexico;
Mohamed, Gedo Hamdan Ahmed of Sudan;
Mohamed, Tijani Ibrahim Moussa of Sudan;
Palacios Rodriguez, Jose Eduardo of Mexico;
Rios Gonzalez, Jonathan Faustino of Mexico; and
Rivera Miramontes, Carlos Humberto of Mexico.

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

Administradora Y Comercializadora Del Mar, S.A. De C.V. of Mexico;
Agencia De Servicios Turisticos Internacionales G8, S.A. De C.V. of Mexico;
Asesoria Y Servicios Importadores, S.A. De C.V. of Mexico;
Club Deportivo De Formacion Al Futbol Gmx, S.De R.L. De C.V. of Mexico;
Colinas Proyectos Y Construcciones, S.A. De C.V. of Mexico;
Constructora Palacios Pv, S.A. De C.V. of Mexico
Corporativo Controlador Explora, S.A. De C.V. of Mexico
Corporativo De Transferencias Internacionales De Bienes Raices, S.A. De C.V. of Mexico;
Deep Blue Desarrollos, S. De R.L. De C.V. of Mexico;
Deep Blue Servicios, S.A. De C.V. of Mexico;
Estrategia PVR, S. De R.L. De C.V. of Mexico;
High Land Park, S.A. De C.V. of Mexico;
Hotel Management International, LLC of Mexico;
Kovay Gardens (A.K.A. Vallarta Gardens) of Mexico;
Ornitorrinco Inmobiliaria, S.A. De C.V. of Mexico;
Punto 54, S.A. De C.V. of Mexico;
Reef Administracion Avanzada, S. De R.L. De C.V. of Mexico;
Solugas Soluciones En Gasolineras, S.A. De C.V. of Mexico; and
VG Desarrollos De La Bahia, S.A. De C.V. of Mexico.

https://home.treasury.gov/news/press-releases/sb0399

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February 24, 2026: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Sergey Sergeyevich Zelenyuk (Mr. Zelenyuk) and his company, Matrix LLC (doing business as Operation Zero), as well as five associated individuals and entities, for their acquisition and distribution of cyber tools harmful to U.S. national security. Mr. Zelenyuk and Operation Zero trade in “exploits”—pieces of code or techniques that take advantage of vulnerabilities in a computer program to allow users to gain unauthorized access, steal information, or take control of an electronic device—and have offered rewards to anyone who will provide them with exploits for U.S.-built software.

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

Kucherov, Oleg Vyacheslavovich a national of Russia;
Kucherov, Oleg Vyacheslavovich a national of Uzbekistan;
Vasanovich, Marina Evgenyevna a national of Russia; and
Zelenyuk, Sergey Sergeyevich a national of Russia.

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

Advance Security Solutions of Uzbekistan;
Matrix LLC of Russia; and
Special Technology Services LLC FZ of the U.A.E.

https://home.treasury.gov/news/press-releases/sb0404 and

https://www.state.gov/releases/office-of-the-spokesperson/2026/02/designation-of-russia-based-zero-day-exploits-broker-and-affiliates-for-theft-of-u-s-trade-secrets/

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February 25, 2026: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned over 30 individuals, entities, and vessels enabling illicit Iranian petroleum sales and Iran’s ballistic missile and advanced conventional weapons (ACW) production. Specifically, OFAC targeted additional vessels operating as part of Iran’s shadow fleet, which transport Iranian petroleum and petroleum products to foreign markets and serve as the regime’s primary source of revenue for financing domestic repression, terrorist proxies, and weapons programs. OFAC also targeted multiple networks that enable Iran’s Islamic Revolutionary Guard Corps (IRGC) and Ministry of Defense and Armed Forces Logistics (MODAFL) to secure the precursor materials and sensitive machinery required to reconstitute ballistic missile and ACW production capacity, as well as proliferate unmanned aerial vehicles (UAVs) to third countries.

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

Abedini, Mohammad of Iran;
Jafari, Mehrdad of Iran;
Shariatzadeh, Ebrahim of Iran; and
Zand, Mehdi of Iran.

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

Adak Pargas Pars Trading Company of Iran;
Altis Tekstil Makina Ticaret Limited Sirketi (a.k.a. Altis Textile Machinery Trading Company Limited) of Turkey;
Arya Global Gida Sanayi Ve Ticaret Limited Sirketi of Turkey;
Behengam Tadbir Qeshm Shipping And Maritime Services Company (a.k.a. Behengam Tadbeer Qeshm Shipping Company) of Iran;
Goldwave Maritime Services Inc. of the Marshall Islands;
Ithaki Maritime And Trading S.A. of Panama;
Kaito Navigation SA of Liberia;
Mistral Fleet Co Ltd (a.k.a. Mistral Fleet Company Limited) of the British Virgin Islands;
Mostafa Roknifard Prime Choice General Trading LLC (a.k.a. Mostafa Roknifard Perfumes And Cosmetics Trading LLC) of the U.A.E.;
NYR Shipping CO. of the Marshall Islands;
Ocean Kudos Shipping Company Limited of the Marshall Islands;
Paros Maritime S.A. of Panama;
Poros Maritime Ventures S.A. of Panama;
Utus Gumrukleme Gida Tekstil Ithalat Ihracat Dis Ticaret Ve Sanayi Limited Sirketi of Turkey;
Vast Marine Inc (a.k.a. Vast Marine Incorporated) of Liberia; and
Wansa Gas Shipping Co. of the Marshall Islands.

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

Alaa (T8A5128) LPG Tanker Palau flag; Vessel Registration Identification IMO 9155341;
Ateela 1 (EPCF9) Products Tanker Iran flag; Vessel Registration Identification IMO 9548990;
Ateela 2 (EPCG2) Products Tanker Iran flag; Vessel Registration Identification IMO 9549009;
Danuta I (T8A4990) LPG Tanker Palau flag; Vessel Registration Identification IMO 9193721;
Felicita (D6A3040) Crude Oil Tanker Comoros flag; Vessel Registration Identification IMO 9167162;
Gas Fate (3E6859) LPG Tanker Panama flag; Vessel Registration Identification IMO 9147394;
Hoot (3FIQ9) LPG Tanker Panama flag; Vessel Registration Identification IMO 9267962;
Luma (YJQY4) LPG Tanker Vanuatu flag; Vessel Registration Identification IMO 9034690;
Niba (T8A4992) LPG Tanker Palau flag; Vessel Registration Identification IMO 9046784;
North Star (8PPB) Crude Oil Tanker Barbados flag; Vessel Registration Identification IMO 9299563;
Ocean Koi (8P2574) Crude Oil Tanker Barbados flag; Vessel Registration Identification IMO 9255933; and
Remiz (3E8793) Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9223344.

https://home.treasury.gov/news/press-releases/sb0405 and https://ofac.treasury.gov/recent-actions/20260225

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February 25, 2026: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued a new, Venezuela-related Frequently Asked Question (FAQ 1238), pertaining to the resale of Venezuelan origin oil to Cuba.

Question 1238. Would OFAC approve the resale of Venezuelan origin oil to Cuba?

Answer: In accordance with the United States’ support and solidarity for the Cuban people, OFAC would implement a favorable licensing policy toward specific license applications seeking authorization for the resale of Venezuelan origin oil for use in Cuba. To qualify for this favorable licensing policy, the requested transactions would need to be consistent with the terms and conditions of Venezuela General License (GL) 46A, though applicants need not necessarily have an established U.S. entity and the limitations in GL 46A with respect to Cuba would not apply. This favorable licensing policy is directed towards transactions that support the Cuban people, including the Cuban private sector (e.g., exports for commercial and humanitarian use in Cuba). Consistent with applicable U.S. law and policy, transactions involving, or for the benefit, of any persons or entities associated with the Cuban military, intelligence services, or other government institutions, including entities listed on the U.S. State Department’s Cuba Restricted List, see 31 C.F.R. § 515.209, would not be covered by this favorable licensing policy.

As a reminder, the U.S. Department of Commerce primarily regulates the export or reexport of U.S.-origin oil to Cuba, as well as all other items subject to the Export Administration Regulations (EAR, 15 C.F.R. parts 730-774). Treasury’s Cuban Assets Control Regulations generally authorize U.S. persons to engage in transactions ordinarily incident to the export of oil from the United States to Cuba, or the reexport of U.S.-origin oil from a third country to Cuba, where that export or reexport has been authorized by the Commerce Department. See 31 C.F.R. § 515.533(a). This authorization applies to transactions covered by applicable Commerce Department license exceptions, including License Exception Support for the Cuban People (SCP), 15 C.F.R. § 740.21, which authorizes exports and reexports of gas and other petroleum products to improve living conditions and support independent economic activity. In other words, U.S.-origin oil exports, as well as other gas and petroleum products covered by License Exception SCP, do not require separate OFAC authorizations. Exporters and reexporters are responsible for reviewing current Commerce Department guidance, https://www.bis.gov/media/documents/scp-gas-petroleum-faq.pdf, and ensuring that any transaction undertaken pursuant to License Exception SCP or any other license exception meet all applicable terms and conditions.

See FAQ 1226 for the definition of “Venezuelan-origin oil,” which includes petroleum products.

https://ofac.treasury.gov/recent-actions/20260225_33

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February 26, 2026: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned five Nicaraguan government officials who lead the principal financial, communications, and military agencies that enable Nicaragua’s Murillo-Ortega dictatorship to repress its people. The individuals sanctioned include the Director and Deputy Director of Nicaragua’s Financial Analysis Unit, the Minister of Labor, the Deputy Director General of the Nicaraguan Institute of Telecommunications and Postal Services, and the head of the Nicaraguan Army’s Directorate of Military Intelligence and Counterintelligence.

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

Flores Jimenez, Johana Vanessa of Nicaragua;
Gutierrez Lopez, Leonel Jose of Nicaragua;
Membreno Rivas, Denis, Managua of Nicaragua;
Reyes Ochoa, Celia Margarita of Nicaragua; and
SAENZ ULLOA, Aldo Martin of Nicaragua.

https://home.treasury.gov/news/press-releases/sb0409

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February 26, 2026: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 131C, “Authorizing Certain Transactions for the Negotiation of and Entry Into Contingent Contracts for the Sale of Lukoil International GmbH and Related Maintenance Activities.”

General License No. 131C Authorizing Certain Transactions for the Negotiation of and Entry Into Contingent Contracts for the Sale of Lukoil International GmbH and Related Maintenance Activities

All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the negotiation of and entry into contracts with Public Joint-Stock Company Oil Company Lukoil or any of its affiliates for the sale, disposition, or transfer of Lukoil International GmbH (“LIG”) or any entity in which LIG owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest (collectively, “LIG Entities”) are authorized through 12:01 a.m. eastern daylight time, April 1, 2026, provided that the performance of any such contract is made expressly contingent upon the receipt of separate authorization from the Office of Foreign Assets Control (“contingent contracts”).

All blocked accounts of LIG Entities may be used, debited, or credited for the transactions authorized in this general license.

This general license does not authorize:

(1) The unblocking of any property blocked pursuant to any part of 31 CFR chapter V, except as authorized in paragraph (c);

(2) Any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR, other than blocked persons described in paragraph (a) of this general license, unless separately authorized; or

(3) The transfer of funds to any person or account located in the Russian Federation.

Additionally, OFAC issued two amended, Russia-related Frequently Asked Questions (FAQs 1224 and 1225).

Question 1224: What negotiations does Russia-related General License 131C authorize, and what transaction conditions will OFAC consider when evaluating requests for further authorization to effectuate a sale of Lukoil International GmbH (LIG) assets?

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Answer: On October 22, 2025, OFAC designated Public Joint-Stock Company Oil Company Lukoil (Lukoil) to increase pressure on Russia’s energy sector and degrade Russia’s ability to raise revenue for its war machine. OFAC is aware of potential efforts by Lukoil to divest its assets outside of Russia to non-blocked parties, given the impact of sanctions. To support such divestments and further cut off funding to Russia, OFAC issued Russia-related General License (GL) 131C, which authorizes negotiations and entry into contingent contracts with Lukoil for the sale of LIG or any of LIG’s majority-owned subsidiaries. Authorized activities include negotiations on terms for definitive agreements and financial, legal, or operational due diligence, including engagement of outside counsel or advisors. GL 131C expires on April 1, 2026.

GL 131C does not authorize transactions to effectuate the actual sale, disposition, or transfer of any LIG entity or asset. Any contract entered into pursuant to GL 131C must expressly be made contingent upon the receipt of a separate authorization from OFAC. The goal of OFAC’s Russia sanctions is to place pressure on Moscow to end its war.

As such, Treasury would evaluate any proposed sale of LIG based on factors that support U.S. national security and foreign policy objectives. OFAC expects that, at a minimum, the proposed transaction must: completely sever LIG’s ties with Lukoil; block any funds owed to Lukoil until sanctions are lifted by placing them in an account subject to U.S. jurisdiction; and not provide a windfall to Lukoil, such as by providing up-front value to Lukoil, including through asset or share swaps. Further, as a condition of any future license for effectuating a sale of LIG, OFAC expects that it will require persons purchasing LIG’s assets to seek OFAC review before further divestment of material LIG assets.

OFAC may revoke GL 131C at any time, including if Lukoil and LIG do not appear to be engaging in good faith negotiations regarding the divestment of LIG or its assets.

Question 1225: What activities do Russia-related General License 128B and General License 131C authorize related to Lukoil International GmbH (LIG)?

Answer: OFAC has issued two General Licenses (GLs) relating specifically to Lukoil International GmbH (LIG) and its majority-owned subsidiaries (“LIG Entities”): GL 128B and GL 131C. The GLs are similar but have different expiration dates and terms as each serves a different purpose.

To mitigate the effects of Lukoil’s OFAC designation on retail consumers, OFAC issued on December 4, 2025 GL 128B to authorize maintenance, operation, and wind down activities for a narrow range of LIG entities, specifically Lukoil retail automobile service stations outside of the Russian Federation. This GL expires on April 29, 2026.
To enable Lukoil to divest its assets outside of Russia to non-blocked parties, OFAC issued on December 10, 2025 GL 131A to authorize, among other things, maintenance and wind down activities of all LIG Entities. OFAC subsequently issued GLs 131B and 131C to extend the existing authorization until April 1, 2026. Please see Frequently Asked Question 1224 for additional information on authorizations regarding negotiations for the sale of LIG Entities.

GL 128B and GL 131C expressly authorize transactions undertaken in the ordinary course of business, provided that the transactions do not involve any blocked persons other than the LIG Entities described in GL 128B and GL 131C. Transactions undertaken in the ordinary course of business may involve (but are not limited to): supply of motor fuel and lubricants; lease payments; insurance payments; property maintenance and environmental services; employee payroll, benefits, severance, and reimbursements; information technology services; payments to government authorities; legal services and proceedings; payments to suppliers, landlords, lenders, and partners; the preservation and upkeep of pre-existing tangible property; and activities associated with maintaining pre-existing capital investments. Also, both GL 128B and GL 131C authorize transactions ordinarily incident and necessary to performing pre-existing agreements and conducting intracompany transfers, provided that such transactions are consistent with previously established practices and support pre-existing projects or operations, consistent with the terms of the respective authorizations.

Both GL 128B and GL 131C also authorize financial institutions, payment processors, and other entities to use, debit, and credit the accounts of the relevant LIG Entities to effectuate the respective authorizations, but both GLs are also expressly limited by the condition that no funds may be transferred to a person or account in the Russian Federation.

Non-U.S. persons generally do not risk exposure to U.S. sanctions under E.O. 14024 for engaging in transactions with blocked persons that are generally authorized for U.S. persons, including for those authorized by GL 128B and GL 131C. Similarly, non-U.S. persons may rely upon GL 128B and GL 131C regardless of whether a foreign financial institution maintains blocked accounts, provided the non-U.S. person’s activities are consistent with the terms of GL 128B and GL 131C, including the requirement that no payments may be transferred to any person or account located in the Russian Federation.

https://ofac.treasury.gov/recent-actions/20260226

https://ofac.treasury.gov/faqs/1224

https://ofac.treasury.gov/faqs/1225

LATEST EXPORT CONTROLS AND COMPLIANCE UPDATE FEBRUARY 2026 Read More »

BIS Settlement with Vizocom ICT Highlights Enforcement Focus on Technical Data Transfers in Vendor Workflows

By George Canovas, Vice President Compliance, FD Associates

The U.S. Department of Commerce Bureau of Industry and Security (BIS) has entered into an administrative enforcement settlement with Vizocom ICT, a California company, concerning an alleged violation of the Export Administration Regulations (EAR) involving the export of controlled technology to the People’s Republic of China (PRC).

The Alleged Export Conduct

According to the BIS Order, the charged conduct relates to a single transaction occurring on or about May 22, 2019, when Vizocom uploaded and transferred antenna specifications through a “Made in China” web portal operated by a Chinese manufacturer located in the Peoples Republic of China (PRC).

BIS determined the uploaded specifications were “technology” subject to the EAR because they contained information necessary for the production of a Very High Frequency and Ultra High Frequency (VHF/UHF) antenna. BIS further stated the antenna was designed for military radios and had no civilian applications.

BIS described the specifications as controlled under ECCN 3E611 (National Security and Regional Stability reasons), as technology for the production of an antenna controlled under ECCN 3A611. BIS also stated that a BIS license was required to export the specifications to the PRC under 15 C.F.R. §§ 742.4 and 742.6, and that no license exceptions were available for that export, but Vizocom did not seek or obtain a license.

Contract Context and Downstream Conduct Described by BIS

The Order provides additional context tying the export of specifications to a U.S. government procurement. Specifically, BIS states Vizocom bid on a U.S. Navy Request for Proposal for 450 antennas identified as being manufactured by a U.S. company, with the solicitation stating there was no substitute and requiring the awardee to be an authorized distributor or reseller. BIS states Vizocom obtained a quote from the U.S. manufacturer for $165,109.50, submitted a bid in the same amount, and received the award.

After award, BIS states that Vizocom personnel engaged the Chinese manufacturer through the portal and conducted correspondence regarding antenna details, appearance, and pricing, ultimately agreeing to a price of $6 per antenna for 500 antennas, including emphasis that the finish and external appearance match the requested antenna.

BIS further states that the Chinese manufacturer mailed three sample antennas to the residence of Vizocom’s CEO for evaluation. Following receipt of the samples, Vizocom agreed to purchase 500 antennas from the Chinese supplier and arranged for a separate U.S. company to test and repackage the antennas in the United States under the name of the U.S. manufacturer identified in the Navy solicitation and from whom Vizocom had originally obtained its quotation. According to the Order, Vizocom subsequently supplied 450 of the repackaged PRC-manufactured antennas to the U.S. Navy under the awarded contract.

BIS also states Vizocom emailed the Navy a technical specification sheet altered to represent that the antennas were produced by the U.S. company, and that Vizocom provided 450 repackaged PRC-manufactured antennas to the Navy and received $165,109.50 in payment.

Settlement Terms

The BIS Order states the matter was resolved through a settlement in which Vizocom agreed to a civil penalty of $374,474, the maximum penalty and more than twice the transaction amount, payable over five years in 20 quarterly installments beginning March 15, 2026, with the final installment due December 15, 2030.

The Order also imposes a five-year denial of export privileges, suspended during a five-year probationary period, and subject to activation if Vizocom fails to make timely payments or commits another violation of ECRA, the EAR, or related orders, licenses, or authorizations.

Parallel Pattern Under ITAR – The Same Operational Failure with a Different Rulebook

Although Vizocom is an EAR case, the enforcement posture aligns with a recurring theme seen in major ITAR matters, where the core compliance breakdown is not a “shipment problem” but the unauthorized release of controlled technical data in the normal rhythm of program execution and supply-chain coordination.

For example, the U.S. Department of State announced a $13 million consent agreement with Honeywell to resolve alleged export violations involving the release of ITAR controlled technical data for several highly sensitive military platforms to China under the Arms Export Control Act and ITAR, under a multi-year compliance framework.

More recently, the State Department announced a $200 million consent agreement with RTX Corporation (Raytheon’s parent), again under a multi-year remedial structure, in a matter involving alleged export violations that included the release of controlled technical data to China and related compliance failures.

Why This Keeps Happening, and Why Generic Training is not Enough

Taken together, these matters illustrate a recurring enforcement theme across both regulatory regimes: unauthorized transfers of production or design information during vendor engagement or program support activities. The issue affects organizations of varying size because modern engineering and procurement processes routinely require technical data disclosure to confirm manufacturing capability, conduct testing, or coordinate system integration. In many such situations, the transfers occurs during routine operational exchanges where personnel may not recognize that the information being shared constitutes controlled technology or a regulated export or the export classification is misunderstood or the Order of Review process has not been conducted properly.

A reasonable interpretation from these cases is that the true compliance exposure point often sits much earlier in the workflow than most training assumes. Across enforcement actions and internal investigations, this recurring pattern highlights the limitations of generalized export compliance training that focuses primarily on shipping procedures, licensing forms, or high-level regulatory awareness. In many cases, the individuals closest to the risk are engineers, sourcing specialists, program managers, and technical support personnel whose day-to-day responsibilities require sharing drawings, tolerances, test procedures, build specifications, photos, or production instructions with vendors. The compliance moment is often an upload, an email attachment, a collaboration portal invitation, or a supplier onboarding step, not a physical shipment out the door.

That is why effective programs increasingly require job-specific training built around actual workflow decision points, for example:

Engineering and product teams, what counts as controlled “technology” or “technical data” when it is “necessary for production,” and when an upload or portal exchange becomes an export event.
Procurement and vendor-management teams, how to route vendor RFQs and capability assessments through a technology release check before specifications are transmitted to foreign vendors.
Program teams supporting defense or sensitive programs, how “get it built fast” pressures create predictable failure modes, and how to escalate before sharing controlled information outside the company’s authorized perimeter.

In other words, organizations reduce this risk less by repeating generic rules, and more by training people on the precise moments their jobs create export events.

Bottom Line

The Vizocom settlement confirms that export controls attach to technical information itself, and electronic transmission of production specifications may be a regulated export even without a physical shipment. The practical and material lesson here is operational: the real compliance trigger often occurs during routine engineering collaboration and vendor engagement, not at the moment goods leave the facility.

Knowledge is king here, it is clear that organizations need to look at all the touch points where export decisions are being made and address those touchpoints with specific/specialized training. Programs built only around shipping controls will overlook the primary exposure point. Controls must extend upstream to technical data sharing and workflow decision points.

~SYNOPSIS~

This article uses the recent BIS Settlement with Vizocom to explain how export control violations often arise not from physical shipments, but from routine sharing of technical information during engineering collaboration, supplier engagement, and production support. The key takeaway is that export controls attach to the data itself, meaning uploads, drawings, specifications, or troubleshooting exchanges can trigger regulated exports long before anything ships.

FD Associates brings decades of export compliance experience helping organizations identify these real operational touch points, map where export events actually occur, and train the specific personnel most exposed to the risk. By aligning compliance controls and role-based training with day-to-day workflows, FD Associates helps companies reduce exposure, prevent violations, and avoid costly enforcement outcomes.

BIS Settlement with Vizocom ICT Highlights Enforcement Focus on Technical Data Transfers in Vendor Workflows Read More »

BIS Imposes $252.5 Million Penalty on Applied Materials and Korean Subsidiary Over Unauthorized Reexports to SMIC

By George Canovas, Vice President of Compliance, FD Associates

The US Department of Commerce Bureau of Industry and Security has reached a settlement with Applied Materials, Inc. and Applied Materials Korea, Ltd. resolving allegations that the companies committed 56 violations of the Export Administration Regulations involving unauthorized reexports of semiconductor manufacturing equipment to Semiconductor Manufacturing International Corporation and affiliated entities in China.

The conduct occurred over an approximately 18 month period between March 2021 and June 2022 and involved ion implantation equipment valued at approximately $126 million. BIS imposed a civil penalty of $252,500,300, calculated at twice the value of the transactions and described by the agency as the statutory maximum and the second largest administrative penalty it has issued.

Manufacturing and export flow

Applied Materials produced ion implantation system modules at its facility in Gloucester, Massachusetts. Ion manipulation modules are used to accelerated ion beams to precisely introduce controlled amounts of dopant atoms into silicon wafers in order to modify their electrical properties during chip fabrication.

These modules, together with US origin components and certain foreign sourced parts, were shipped to the company facility in South Korea for completion of assembly, system integration, and testing. Finished systems were then exported from South Korea to SMIC fabrication facilities in China.

BIS determined that the equipment remained subject to the Export Administration Regulations throughout this process. The agency concluded that production of the systems began in the United States and that the assembly and testing activities performed in South Korea did not change their regulatory status for export control purposes.

Regulatory notice and Entity List restrictions

On September 25, 2020, BIS issued an informed notice to Applied Materials, advising that specified items required a license for export, reexport, or transfer to SMIC due to the risk of diversion to military end use in China. On December 18, 2020, SMIC and multiple subsidiaries were added to the Entity List. Following that designation, exports, reexports, or transfers of items subject to the EAR to those entities required BIS authorization.

The settlement states that between March 23, 2021 and June 3, 2022, the companies caused 54 unauthorized reexports of ion implantation equipment from South Korea to SMIC and attempted 2 additional shipments involving affiliated entities.

Internal export control analysis

The settlement describes that Applied Materials internal export control personnel evaluated whether the equipment completed in South Korea could be treated as foreign made.

According to the settlement, internal company export control personnel concluded that assembly and testing performed in South Korea resulted in sufficient transformation for the completed equipment to qualify as foreign made items. The company implemented internal procedures, including a transformation checklist, that allowed shipments to proceed when those internal criteria were satisfied.

The export compliance system included automated shipment blocks for SMIC transactions but permitted manual overrides when the internal checklist was met. BIS rejected the company analysis and determined that the Applied Material’s item sold to SMIC remained subject to the Export Administration Regulations and required authorization for shipment to the listed entities.

The settlement states that the concept of substantial transformation originates from Customs law and is not used within the Export Administration Regulations as the test for determining whether US origin items remain subject to the EAR.

Classification of the equipment

The settlement identifies the ion implantation equipment involved in the transactions as classified under ECCN 3B991.

Settlement terms and compliance requirements

In addition to the civil penalty, the agreement imposes a 3 year denial of export privileges that is suspended provided the companies comply with settlement conditions. Failure to meet those conditions may result in activation of the denial order.

The agreement also requires 2 internal export compliance audits focused on exports, reexports, or transfers of semiconductor manufacturing equipment involving China. The first audit covers the 12 month period beginning January 1, 2026, with a report due by July 1, 2027. The second audit covers the following 12 month period, with a report due by July 1, 2028.

The companies must maintain global export control training programs, certify training completion for relevant personnel, and maintain internal procedures for reporting suspected export compliance violations, including an anonymous reporting channel.

Enforcement significance for multinational manufacturers

The settlement confirms that reexports from foreign subsidiaries remain subject to EAR licensing requirements when items produced in the United States are exported to entities on the Entity List. The enforcement action also highlights the regulatory risk associated with relying on internal jurisdiction analyses to release shipments after formal licensing requirements have been communicated.

BIS Imposes $252.5 Million Penalty on Applied Materials and Korean Subsidiary Over Unauthorized Reexports to SMIC Read More »

LATEST EXPORT CONTROLS AND COMPLIANCE UPDATES JANUARY 2026

This newsletter is a listing of the latest changes in export control regulations through January 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.

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

REGULATORY UPDATES

President

Prioritizing the Warfighter in Defense Contracting

January 7, 2026: 91 Fed. Reg. 1377: On January 7, 2026, Executive Order 14372, titled “Prioritizing the Warfighter in Defense Contracting,” was issued. The order asserted that parts of the U.S. defense industrial base have focused excessively on shareholder returns—such as stock buybacks and dividends—at the expense of production capacity, timely delivery, and military readiness. While acknowledging that the United States produces highly capable weapons systems, the order emphasizes that insufficient speed and scale of production now pose a national security risk.

To address this, the order directs the federal government to reorient defense procurement around warfighter needs, making on‑time, on‑budget delivery and investment in production capacity core priorities. Major defense contractors that underperform on existing contracts are barred from issuing dividends or repurchasing stock until performance improves. The Secretary of Defense is tasked with reviewing contractor performance, notifying firms of deficiencies, and—where permitted by law—requiring board‑approved remediation plans, signaling a shift toward stricter oversight and enforcement in defense contracting.

https://www.whitehouse.gov/presidential-actions/2026/01/prioritizing-the-warfighter-in-defense-contracting/ and https://www.federalregister.gov/documents/2026/01/13/2026-00554/prioritizing-the-warfighter-in-defense-contracting

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Adjusting Imports of Semiconductors, Semiconductor Manufacturing Equipment, and Their Derivative Products Into the United States

January 14, 2026: 91 Fed. Reg. 2443: Issued on January 14, 2026, this presidential proclamation—Proclamation 11002, determined, following a Section 232 investigation by the Secretary of Commerce, that imports of semiconductors, semiconductor manufacturing equipment, and their derivative products threaten to impair U.S. national security due to inadequate domestic capacity and reliance on foreign supply chains. Acting under the Trade Expansion Act of 1962, the President directs measures to adjust imports, including targeted tariffs (25% ad valorem) on specified advanced semiconductors and certain derivatives effective January 15, 2026, with defined end‑use exclusions (e.g., data centers, R&D, repairs/replacements) and implementation guidance coordinated with CBP. The proclamation underscores semiconductors’ critical role in defense systems, AI, and all 16 critical infrastructure sectors, and frames the action as part of a broader strategy to strengthen domestic manufacturing and supply‑chain resilience.

https://www.whitehouse.gov/presidential-actions/2026/01/adjusting-imports-of-semiconductors-semiconductor-manufacturing-equipment-and-their-derivative-products-into-the-united-states/ and https://www.federalregister.gov/documents/2026/01/20/2026-01052/adjusting-imports-of-semiconductors-semiconductor-manufacturing-equipment-and-their-derivative

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January 14, 2026: On October 24, 2025, the Secretary of Commerce (Secretary) transmitted to the President a report on the investigation into the effects of imports of processed critical minerals and their derivative products (PCMDPs) on the national security of the United States under section 232 of the Trade Expansion Act of 1962, as amended, 19 U.S.C. 1862 (section 232). Based on the facts considered in that investigation, which took into account the close relation of the economic welfare of the Nation to the national security and other relevant factors, see 19 U.S.C. 1862(d), the Secretary found and advised of his opinion that PCMDPs are being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States.

In light of these findings, the Secretary recommended a range of actions, including actions to adjust the imports of PCMDPs so that such imports will not threaten to impair the national security. For example, the Secretary recommended that the negotiation of agreements with foreign nations to ensure the United States has adequate critical mineral supplies and to mitigate the supply chain vulnerabilities as quickly as possible. The Secretary also suggested that it may be appropriate to impose import restrictions, such as tariffs, if satisfactory agreements are not reached in a timely manner.

After considering the Secretary’s report, the factors in section 232(d) (19 U.S.C. 1862(d)), and other relevant factors and information, the President concurs with the Secretary’s finding that PCMDPs are being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States. In the Presidents judgment, and in light of the Secretary’s report, the factors in section 232(d) (19 U.S.C. 1862(d)), and other relevant factors and information, the President determined that it is necessary and appropriate to enter into negotiations with trading partners to adjust the imports of PCMDPs so that such imports will not threaten to impair the national security of the United States. Depending on the outcome of such negotiations, the President may consider alternative remedies in the future, including minimum import prices for specific types of critical minerals. The President has directed the Secretary and the United States Trade Representative (Trade Representative) to jointly pursue negotiation of agreements or continue any current negotiations of agreements, such as agreements contemplated in section 232(c)(3)(A)(i) (19 U.S.C. 1862(c)(3)(A)(i)), to address the threatened impairment of the national security with respect to PCMDPs. Depending on the status or outcome of those negotiations, the President may take other measures to adjust the imports of PCMDPs to address the threat to the national security found in this proclamation.

Section 232 authorizes the President to adjust the imports of an article and its derivatives that are being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security so that such imports will not threaten to impair the national security. Section 232 includes the authority to adopt and carry out a plan of action, with adjustments over time, to address the national security threat. That initial plan of action may include negotiations of agreements with foreign trading partners along with other measures to adjust imports to address the national security threat. If action under section 232 includes the negotiation of an agreement, such as one contemplated in section 232(c)(3)(A)(i) (19 U.S.C. 1862(c)(3)(A)(i)), the President may also take other actions he deems necessary to adjust imports and eliminate the threat to the national security, including if such an agreement is not entered into within 180 days of the date of this proclamation or is not being carried out or is ineffective. See 19 U.S.C. 1862(c)(3)(A).

https://www.whitehouse.gov/presidential-actions/2026/01/adjusting-imports-of-processed-critical-minerals-and-their-derivative-products-into-the-united-states/

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

DDTC Announces Enrollment for the 2026 DECCS User Group

January 12, 2026: What is the DECCS User Group?

The Defense Export Controls and Compliance System (DECCS) User Group (DUG) provides a forum for industry users to share feedback on DECCS directly with the Directorate of Defense Trade Controls (DDTC). The group fosters active, ongoing communication between DECCS users and DDTC to support system improvements.

DUG members will have the opportunity to:

Identify and communicate functional and technical challenges encountered in DECCS; and
Provide input on future DECCS enhancements and system support initiatives.

Who should apply?

DDTC seeks up to 50 industry volunteers including representatives from companies, government agencies, and third-party organizations who are enrolled in DECCS and can offer an end-user perspective. Both U.S.-based and international members are welcome.

Time Commitment:

DDTC plans to engage with DUG members to test new updates when system functionality is ready for testing; it is anticipated that total time commitment will not exceed 20 hours over the calendar year;
Participation in DUG Spring and Fall meetings (dates to be confirmed); and
The DUG term lasts one calendar year.

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

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Approval for Cluster Munition – Republic of Korea

January 14, 2026: 91 Fed. Reg. 1661: This notice published a Presidential Memorandum dated December 26, 2025, in which the President delegated authority to the Secretary of State to authorize up to $25.9 million in sales of cluster munitions technology to the Republic of Korea under the Arms Export Control Act. The delegation was issued under the President’s constitutional and statutory authority, including 3 U.S.C. § 301, and directed that the memorandum be published in the Federal Register, making the delegation effective upon publication.

https://www.federalregister.gov/documents/2026/01/14/2026-00698/delegation-of-authority-under-section-614a2-of-the-foreign-assistance-act-of-1961

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60‑Day Notice of Proposed Information Collection: Request for Commodity Jurisdiction Determination

January 15, 2026: 91 Fed. Reg. 1852: This notice announces a request for public comment on the Department of State’s proposed renewal of the information collection supporting the Commodity Jurisdiction (CJ) determination process, which determines whether an item or service is subject to the U.S. Munitions List and ITAR. The collection uses Form DS‑4076, is administered by DDTC, and assists exporters in determining the appropriate export control authority. The notice provides a 60‑day comment period, ending March 16, 2026, prior to submission to OMB for approval.

https://www.federalregister.gov/documents/2026/01/15/2026-00694/60-day-notice-of-proposed-information-collection-request-for-commodity-jurisdiction-determination

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Delegation to the Under Secretary of State for Arms Control and International Security for Country Reports on Terrorism

January 20, 2026: 91 Fed. Reg. 2415: This notice announced the delegation of authority (Delegation No. 606) by the Secretary of State to the Under Secretary of State for Arms Control and International Security to carry out the functions and authorities related to the annual Country Reports on Terrorism (CRT) required under section 140 of the Foreign Relations Authorization Act, Fiscal Years 1988 and 1989. The delegation allows the Under Secretary to prepare and oversee terrorism reporting while preserving the authority of the Secretary of State and senior Department leadership to exercise these functions concurrently. The delegation was signed on September 11, 2025, and published in the Federal Register on January 20, 2026.

https://www.federalregister.gov/documents/2026/01/20/2026-00905/delegation-to-the-under-secretary-of-state-for-arms-control-and-international-security-for-country

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60‑Day Notice of Proposed Information Collection: Request To Change End‑User, End‑Use and/or Destination

January 21, 2026: 91 Fed. Reg. 2582: This notice seeks public comment on the Department of State’s request for OMB approval to extend an existing information collection used by the Directorate of Defense Trade Controls (DDTC) to process requests to change the end‑user, end‑use, or destination of defense articles authorized under licenses or open general licenses. The collection, associated with Form DS‑6004, is mandatory, supports ITAR compliance, and is intended to ensure the United States maintains control over downstream transfers of controlled defense items. Comments are due by March 23, 2026.

https://www.federalregister.gov/documents/2026/01/21/2026-01018/60-day-notice-of-proposed-information-collection-request-to-change-end-user-end-use-andor

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60‑Day Notice of Proposed Information Collection: Technology Security/Clearance Plans and Screening Records

January 21, 2026: 91 Fed. Reg. 2583: This notice invites public comment on a proposed extension of an information collection supporting Technology Security/Clearance Plans (TSCPs), screening records, and non‑disclosure agreements required under 22 CFR § 126.18 (an exemption in the ITAR for foreign persons/entities to use in connection with their employment of dual and third country nationals). Administered by DDTC, the collection applies to businesses and nonprofit organizations engaged in certain controlled defense activities and is used to mitigate foreign national access risks associated with defense exports. The proposed collection is mandatory, with an estimated 100,000 annual burden hours, and comments are due by March 23, 2026.

https://www.federalregister.gov/documents/2026/01/21/2026-01017/60-day-notice-of-proposed-information-collection-technology-securityclearance-plans-screening

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Major Non-NATO Ally Designations

January 23, 2026: 91 Fed. Reg. 3019: Republic of Peru; Designated a Major Non‑NATO Ally of the United States under section 517 of the Foreign Assistance Act (22 U.S.C. 2321k) and the Arms Export Control Act (22 U.S.C. 2751 et seq.); Presidential Determination No. 2026‑04 (January 14, 2026);

January 23, 2026: 91 Fed. Reg. 3017: Kingdom of Saudi Arabia; Designated a Major Non‑NATO Ally of the United States under section 517 of the Foreign Assistance Act (22 U.S.C. 2321k) and the Arms Export Control Act (22 U.S.C. 2751 et seq.); Presidential Determination No. 2026‑03 (January 13, 2026);

https://www.federalregister.gov/documents/2026/01/23/2026-01422/presidential-determination-on-designation-of-the-republic-of-peru-as-a-major-non-nato-ally and

https://www.federalregister.gov/documents/2026/01/23/2026-01421/presidential-determination-on-designation-of-the-kingdom-of-saudi-arabia-as-a-major-non-nato-ally

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DDTC Name And Address Changes Posted To Website

January 21 through January 22, 2026: 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 of ThyssenKrupp Marine Systems (Singapore) Pte Ltd to TKMS Singapore Pte Ltd due to corporate rebranding;
Change in Name of CMI Defence LLC to John Cockerill Defense for Military Industries LLC due to corporate rebranding;
Change in Address for Enterprise Services Defence and Security UK Ltd., Entserv UK Limited, and ES Field Delivery UK Limited from Royal Pavillion, Wellesley Road, Aldershot, United Kingdom GU11 1PZ to 110 Pinehurst Road, Farnborough Business Park, Farnborough, United Kingdom, GU14 7BF;
Change in Address for Vicom Australia Pty Ltd., from 1064 Centre Road, Oakleigh South, Victoria 3167, Australia to 1374 North Road, Oakleigh, South, Victoria 3167, Australia;
Change in Address for Fjord Defense, Inc., from 8 Washington Court, Kennebunkport, Maine to 137 Wildes District Road, Kennebunkport, Maine 04046;
Change in Name from Helicopter Italy SRL to Airbus Helicopters Italia due to acquisition;
Change in Name from Telesat LEO Inc. to Telesat LEO ULC due to corporate restructuring;
Change in Name from Altran Technologies India Private Limited to Capgemini Technology Services India Limited due to acquisition; and
Change in Name and Address from CAE Aviation Training Inc., 15 Wing Moose Jaw, Moose Jaw, Saskatchewan S6H 7Z8, Canada to CAE Inc., 8585 Chemin de la Cote-de-Liesse, Montreal, Quebec H4T 1G6, Canada due to corporate restructuring.

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DDTC Frequently Asked Questions (FAQs) Related To Registrations With The Department Of State

DECCS IT Support FAQs

Q: What are the file size restrictions for uploading documents in DECCS applications?

A: The file size restrictions for uploading documents in DECCS applications are as follows:

DECCS Applications	File Size Restriction
Advisory Opinions (AO)	1G
Commodity Jurisdiction (CJ)	1G
Speaker Request (SPR)	20 MB
Registration (REG)	30MB
Licensing (LIC)	30MB
Licensing Batch Filed (LICB)	No limit

If a document exceeds the size limit, the system will reject the upload, and you will need to reduce the file size or split the document into smaller parts before attempting to upload again.

Q: How do I link my user account to my company? I’ve logged in DECCS but don’t see my company information.

A: To link your user account to your company, you must have an active DDTC registration code.

If you have a DDTC registration code: Request your Corporate Administrator (CA) to link your account by inviting you through Applications → User Management → Add User in DECCS. If your organization does not have an active CA, you can submit a Corporate Administrator Request Letter via a Support Case to become your company’s CA.

If you do not have a DDTC registration code: Your account will be linked to your company once your registration has been submitted by you and processed by DDTC.

If you are not planning to register with DDTC: Your information will remain tied to your individual user account rather than being associated with a company.

Q: What is the difference between enrolling in DECCS and registering with DDTC?

A: These are two separate processes often confused by new users:

Enrolling in DECCS means creating your personal user account in the DECCS portal. This allows you to log in and access applications like Registration, Licensing, or User Management.
Registering with DDTC is a formal, regulatory process required under ITAR Part 122. It’s how a company submits a Registration application in DECCS to become an approved registrant authorized to conduct ITAR-controlled business.

Q: What browsers does DECCS support?

A: DECCS supports the following web browsers:

Chrome
Firefox
Safari
Edge (Chromium-based version only)

Note: DECCS does not support Internet Explorer (IE).

Users attempting to access DECCS with unsupported or outdated browsers may encounter error messages on the homepage or application pages. To ensure secure and reliable access to your DECCS data, always use the most up-to-date version of your web browser.

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

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Department of Defense, Defense Security Cooperation Agency (DSCA)

DSCA Notified Congress of Potential FMS Sale To Denmark

January 8, 2026: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Denmark of AGM-114R Hellfire Missiles and related equipment for an estimated cost of $45 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Government of Denmark has requested to buy up to one hundred (100) AGM-114R Hellfire Missiles; three (3) AGM-114R Captive Air Test Missiles; six (6) Hellfire (Longbow) M299 Hellfire Launchers; two (2) MHU-191/M trailers; and three (3) BRU-14’s. The following non-MDE items will be included: containers, training aids, weapon software, training, support equipment, spare and repair parts, publications and technical documentation, transportation; U.S. Government and contractor engineering, technical and logistical support services; and other related elements of logistical and program support. The estimated total cost is $45 million.

The principal contractor will be Lockheed Martin Missile and Defense, Ocala, FL. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4373826/denmark-agm-114r-hellfire-missiles

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DSCA Notified Congress of Potential FMS Sale To Kuwait

January 14, 2026: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Kuwait of PATRIOT Program Sustainment and Follow-On Technical Support and related equipment for an estimated cost of $800 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.

The Government of Kuwait has requested to buy equipment and services related to sustainment and follow-on technical support for its PATRIOT program. The following non-Major Defense Equipment items will be included: spare and repair parts; storage and aging; surveillance firing; stockpile reliability; shared and country-unique PATRIOT PAC-3 Missile Support Center (P3MSC) support; operator and maintenance support; test program set development process support; publications and technical documentation; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; studies and surveys; transportation; and other related elements of logistics and program support. The estimated total cost is $800 million.

The principal contractors will be RTX Corporation, located in Waltham, MA, and Huntsville, AL; Lockheed Martin, located in Bethesda, MD, and Huntsville, AL; LEIDOS, Inc., located in Reston, VA, and Huntsville, AL; and KBR, located in Houston, TX, and Huntsville, AL. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4379701/kuwait-patriot-program-sustainment-and-follow-on-technical-support

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DSCA Notified Congress of Potential FMS Sale To Iraq

January 14, 2026: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Iraq of Very Small Aperture Terminals and related equipment for an estimated cost of $110 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Government of Iraq has requested to buy additional Very Small Aperture Terminals (VSAT); VSAT modems; VSAT hubs; L-band tactical satellite service (L-TAC) manpacks; spare parts; personnel training; U.S. Government and contractor engineering, technical, and logistics support services and personnel services; and other related elements of logistics and program support 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 $46 million ($0 in Major Defense Equipment), included VSATs; VSAT modems; VSAT hubs; L-TAC manpacks; commercial satellite services; satellite ground terminals, modems, and hubs; spare parts; field service representative services; and technical support and training. The estimated total cost is $110 million.

The principal contractor will be Network Innovations, located in Frederick, MD. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4379668/iraq-very-small-aperture-terminals

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DSCA Notified Congress of Potential FMS Sale To Peru

January 15, 2026: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Peru of Design and Construction at Callao Naval Base and related elements of logistics and program support for an estimated cost of $1.5 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.

The Government of Peru has requested to buy equipment and services to support the procurement of maritime and onshore facilities at the Callao Naval Base. The following non-Major Defense Equipment items will be included: lifecycle design; construction; project management; engineering studies; engineering services; technical support; facility and infrastructure assessments; surveys; planning; programming; design; acquisition; contract administration; construction management; 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 $1.5 billion.

Contractor or contractors will be determined later from a list of approved vendors, likely through a competitive process. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor or contractors.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4380611/peru-design-and-construction-at-callao-naval-base

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DSCA Notified Congress of Potential FMS Sale To Spain

January 29, 2026: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Spain of F-100 Frigate Mid-Life Upgrade and related equipment for an estimated cost of $1.7 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Government of Spain has requested to buy five (5) Shipsets AEGIS Weapon System; six (6) Shipsets Digital Signal Processor; five (5) Shipsets MK 41 Baseline VIII Vertical Launching System; five (5) Shipsets of Next Generation Surface Search Radar. The following non-major defense equipment articles (MDE) will also be included: ultra high frequency satellite communications radio terminal systems; Global Positioning System Miniature Precision Lightweight GPS Receiver Engines with M-Code; AN/SRQ-4 Ku-band hardware; material required to support the upgrade of NIXIE SLQ-25A to a SLQ-25E; MK 331 Torpedo Setting Panels; MK 32 surface vessel torpedo tube upgrades; U.S. Government support for the MK 45 Mod 2 and Mod 2B Gun Weapon System; modernization efforts, integration, and test support and equipment; munitions support and support equipment; spare parts; consumables and accessories; repair and return support; classified software delivery and support; classified and unclassified publications; technical documentation; personnel training and training equipment; studies and surveys; Contractor Logistics 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 $1.7 billion.

The principal contractors will be Lockheed Martin, located in Moorestown, NJ, and Manassas, VA; RTX Corporation, located in Arlington, VA; Ultra Maritime Naval Systems and Sensors, located in Braintree, MA; and General Dynamics, located in Williston, VT. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4393093/spain-f-100-frigate-mid-life-upgrade

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DSCA Notified Congress of Potential FMS Sale To Israel

January 30, 2026: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Israel of Joint Light Tactical Vehicle and related equipment for an estimated cost of $1.98 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Government of Israel has requested to buy three thousand two hundred fifty (3,250) Joint Light Tactical Vehicles (JLTVs), including JLTV Utility M1279A1/A2/A3 (JLTV-UTL), JLTV Heavy Guns Carrier M1278A1/A2/A3 (JLTV-HGC), JLTV Close Combat Weapons Carrier M1281A1/A2/A3 (JLTV-CCWC), and JLTV General Purpose M1280A1/A2/A3 (JLTV-GP). The following non-MDE items will also be included: Common Remotely Operated Weapon Stations (CROWS); JLTV cargo trailers (M1289); JLTV kits; standard and non-standard command, control, communications, computers, intelligence, surveillance, and reconnaissance equipment; system unique integration; Objective Gunner Protection Kits (OGPK); Driver’s Vision Enhancement (DVE); spare and repair parts; Special Tools and Test Equipment (STTE); technical manuals and publications; maintenance trainers; new equipment training; total package fielding support; depot-level maintenance, repair, and return 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 $1.98 billion.

The principal contractor will be AM General LLC, located in Auburn Hills, MI and Mishawaka, IN. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4394563/israel-joint-light-tactical-vehicle

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DSCA Notified Congress of Potential FMS Sale To Israel

January 30, 2026: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Israel of AH-64E Apache Helicopters and related equipment for an estimated cost of $3.8 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Government of Israel has requested to buy thirty (30) AH-64E Apache attack helicopters; seventy (70) T700-GE 701D engines (60 installed, 10 spares); thirty (30) AN/ASQ-170 Modernized Target Acquisition and Designation Sight/AN/AAR-11 Modernized Pilot Night Vision Sensors (M-TADS/PNVS); one (1) M-TADS/PNVS in support of Special Repair Activity (SRA); thirty (30) AN/APG-78 Longbow Fire Control Radars (FCR) Mast Mounted Assembly (MMA); one (1) FCR MMA in support of SRA; thirty (30) Longbow Fire Control Radar (FCR) Radar Electronic Units (REU); one (1) Longbow FCR REU in support of SRA; thirty (30) AN/APR-48B Modernized Radar Frequency Interferometers (MRFI); six (6) MRFI maintenance floats; thirty (30) AN/AAR-57 with 5th Sensor Common Missile Warning Systems (CMWS); four (4) AN/AAR-57 with 5th Sensor CMWS maintenance floats; thirty(30) AN/ARC-231A (RT-1987) Very High Frequency/Ultra High Frequency (VHF/UHF) radios; six (6) AN/ARC-231A (RT-1987) Very High Frequency/Ultra High Frequency (VHF/UHF) radios maintenance floats; sixty (60) M36E8 Captive Air Training Missiles (CATM); seventy-two (72) Embedded Global Positioning System/Inertial Navigation Systems with M-code (EAGLE-M) and Multi-Mode Receiver (MMR); thirty-six (36) Common Infrared Countermeasure Systems. The following non-Major Defense Equipment items will also be included: Enhanced Image Intensifier (EI2) cameras; Radar Signal Detecting Sets; Laser Detecting Sets; AN/APX-123A Identification Friend or Foe (IFF) transponders; AN/APR-39 Radar Warning Receiver Signal Detecting Set Improved Data Modems; AN/AVR-2B Laser Warning Set, M299 Missile Launcher, M261 2.75 Inch Rocket Launcher, Small Tactical Terminals; improved countermeasures dispensing systems (ICMD); automatic direction finders; Doppler radar velocity sensors; radar altimeters common core (RACC); tactical air navigation system (TACAN); Global Positioning System receivers; simple key loader; Advanced Weapon System Automatic Machine Guns; rocket launchers; missile launchers; Manned-Unmanned Teaming (MUMT) Unmanned Aerial System (UAS) receiver; MUMT air-air-ground kits; air to ground network radios; transponder test sets; KIV-77 assets; Cartridge Actuated Devices/Propellant Actuated Devices (CAD/PAD); Small Tactical Terminal KOR-24A for Link-16; Longbow Crew Trainer (LCT); tactical engagement simulation (TESS); Maintenance Training Device (MTD); training devices; communication systems; helmets; simulators; generators; aircrew survivability equipment; transportation and organization 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 technical assistance; technical and logistics support services; and other related elements of program and logistical support. The estimated total cost is $3.8 billion.

The principal contractors will be The Boeing Company, located in Arlington, VA; and Lockheed Martin, located in Orlando, FL. At this time, the U.S. government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4394583/israel-ah-64e-apache-helicopters

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DSCA Notified Congress of Potential FMS Sale To Israel

January 30, 2026: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Israel of Namer Armored Personnel Carrier Power Packs Less Transmissions and Integrated Logistics Support and related equipment for an estimated cost of $740 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Government of Israel has requested to buy Namer Armored Personnel Carrier (APC-MT883) Power Packs Less Transmissions (NPPLTs) in full and lite configurations. Also included is an integrated logistics support package that includes special tools for C-Level maintenance and transmission parts; control and diagnostic systems; preservation and packaging; containers; configuration management; technical manuals, spare parts catalogs, other documentation, and publications; U.S. Government and contractor technical assistance and contractor non-recurring engineering (NRE); and other related elements of logistics and program support. The estimated total cost is $740 million.
This proposed sale will contribute to the foreign policy and national security of the United States by helping to improve the security of a strategic regional partner that has been, and continues to be, an important force for political stability and economic progress in the Middle East.

The principal contractor will be Rolls-Royce Solutions America, Inc., located in Novi, MI. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4394549/israel-namer-armored-personnel-carrier-power-packs-less-transmissions-and-integ

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DSCA Notified Congress of Potential FMS Sale To Israel

January 30, 2026: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Israel of AW119Kx Light Utility Helicopters and related equipment for an estimated cost of $150 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Government of Israel has requested to buy additional AW-119Kx light utility helicopters; Aviation Ground Support Equipment (AGSE); supplemental type certificate (STC) tools; engineering; spare and repair parts; support equipment; tools and test equipment; technical data and publications; personnel training and training equipment; U.S. Government and contractor technical assistance; technical, and logistics support services; and other related elements of program and logistical support 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 $78.2 million, included the following non-MDE items: AW-119Kx light utility helicopters, spares, and support. The estimated total cost is $150 million.

The principal contractor will be Leonardo Helicopters USA, AgustaWestland Philadelphia Corporation, located in Philadelphia, PA. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4394591/israel-aw119kx-light-utility-helicopters

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DSCA Notified Congress of Potential FMS Sale To The Kingdom of Saudi Arabia

January 30, 2026: The State Department has made a determination approving a possible Foreign Military Sale to the Kingdom of Saudi Arabia of PATRIOT Advanced Capability-3 Missile Segment Enhancement Missiles and related equipment for an estimated cost of $9.0 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Kingdom of Saudi Arabia has requested to buy seven hundred thirty (730) PATRIOT Advanced Capability-3 Missile Segment Enhancement (PAC-3 MSE) missiles. The following non-major defense equipment items will be included: PAC-3 MSE missile launcher conversion kits; PATRIOT automated logistics systems kits; PAC-3 telemetry kits; PAC-3 MSE shorting plug accumulation kit; PAC-3 MSE missile skid kits; PAC-3 MSE missiles round trainer; PAC-3 MSE empty round trainer; PAC-3 missile and ground support equipment spare parts; PAC-3 missile canister consumables; PAC-3 field surveillance program; integration and test support and equipment; munitions support and support equipment; spare parts, consumables, 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; 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 $9.0 billion.

The principal contractor will be Lockheed-Martin Corporation, located in Dallas, TX. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4394629/kingdom-of-saudi-arabia-patriot-advanced-capability-3-missile-segment-enhanceme

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

Revision to License Review Policy for Advanced Computing Commodities

January 15, 2026: 91 Fed. Reg. 1684: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued a final rule effective January 15, 2026, revising its export license review policy for certain advanced computing semiconductors to China and Macau. The rule changes the default standard from a “presumption of denial” to a case‑by‑case review for specified chips, including the NVIDIA H200 and equivalent products, as well as some less advanced chips, if strict certification and testing conditions are met. These conditions require exporters to certify sufficient U.S. domestic supply, ensure exports do not divert global foundry capacity away from U.S. needs, confirm adequate security procedures by the recipient, and submit the items to independent, third‑party performance testing in the United States. BIS states the revision is intended to balance national security and foreign policy objectives with preserving U.S. leadership in artificial intelligence.

https://www.federalregister.gov/documents/2026/01/15/2026-00789/revision-to-license-review-policy-for-advanced-computing-commodities

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Streamlining Export Controls for Drone Exports

January 21, 2026: 91 Fed. Reg. 2467: The Bureau of Industry and Security (BIS) issued an interim final rule, effective January 20, 2026, to ease U.S. export controls on certain civil unmanned aerial vehicles (UAVs) in order to improve the global competitiveness of U.S. drone manufacturers while maintaining national security safeguards.

The rule eliminates license requirements for exports of low‑risk commercial drones—specifically UAVs with less than one hour of endurance and broad foreign availability—to most Wassenaar Arrangement participating countries (Country Group A:1). This change reflects BIS’s assessment that these drones no longer present significant national security risks.

For more capable but still non‑military drones, such as long‑range cargo delivery and agricultural spraying UAVs, the rule allows exports to close U.S. allies and partners (Country Group A:5) under License Exception Strategic Trade Authorization (STA). Use of STA requires advance notification, reporting, and foreign recipient assurances to ensure appropriate end use and prevent diversion.

BIS emphasized that the rule does not relax controls on military‑grade UAVs, drones designed for combat, intelligence gathering, surveillance, or autonomous strike capabilities, or exports to restricted destinations or end users of concern, which remain subject to strict licensing and due‑diligence requirements.

The changes are made pursuant to Executive Order 14307, “Unleashing American Drone Dominance,” and are intended to reduce regulatory friction for U.S. commercial and public‑safety drone exporters while preserving protections tied to national security and foreign policy. BIS is accepting public comments through February 19, 2026, before deciding whether to finalize or modify the rule.

https://www.federalregister.gov/documents/2026/01/21/2026-01059/streamlining-export-controls-for-drone-exports

Check out our article on the change: https://www.linkedin.com/pulse/sky-turning-red-white-blue-fd-associates-inc--lgz4e

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U.S. Census Bureau

2026 Schedule B List Released

https://www.census.gov/foreign-trade/schedules/b/2026/index.html

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

January 7, 2026: Exyte Shanghai Ltd., (“Exyte China”) is a member of the Exyte group located in the People’s Republic of China. As described further below, between on or about March 8, 2021, through on or about March 24, 2022, Exyte China violated the Export Administration Regulations (“EAR”) when it caused, counseled, procured, or aided the in-country transfer of items subject to the EAR to a party on the Entity List without the required license or other authorization from BIS. Specifically, Exyte China caused, counseled, procured, and aided the transfer of approximately 884 EAR99 items used to fabricate semiconductors to Semiconductor Manufacturing International (Beijing) Corporation (“SMIC Beijing”), a party on the Entity List. At all relevant times, a license for the export, reexport, or transfer (in-country) of items subject to the EAR to SMIC Beijing was required under § 744.11 of the Regulations.

BIS and Exyte formalize their agreement, under which Exyte admits the charged conduct and is ordered to pay a $1,500,000 civil penalty within 75 days; failure to pay on time triggers interest, penalty charges, and administrative fees under the Debt Collection Act of 1982, as detailed in the accompanying Notice. Full and timely payment is also made an explicit condition for Exyte’s eligibility for any export license, license exception, permission, or privilege going forward. The Order further requires that the Proposed Charging Letter, Settlement Agreement, and Final Order be made public, and it states that the Order constitutes the final agency action, effective immediately, signed by Assistant Secretary David Peters in January 2026.

https://www.bis.gov/media/documents/exyte-order-final.pdf

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January 12, 2026: The Justice Department announced that Jinchao Wei, a former U.S. Navy sailor who was convicted of espionage by a federal jury in August 2025, was sentenced in federal court to 200 months in prison. Wei, 25, also known as Patrick Wei, was arrested in August 2023 on espionage charges as he arrived for work on the amphibious assault ship U.S.S. Essex at Naval Base San Diego, the homeport of the Pacific Fleet. He was indicted by a federal grand jury, accused of selling national defense information to an intelligence officer working for the People’s Republic of China for $12,000.

Following a five-day trial and one day of deliberation, the jury convicted Wei of six crimes, including conspiracy to commit espionage, espionage, and unlawful export of, and conspiracy to export, technical data related to defense articles in violation of the Arms Export Control Act and the International Traffic in Arms Regulations. He was found not guilty of one count of naturalization fraud.

https://www.justice.gov/opa/pr/former-us-navy-sailor-sentenced-200-months-spying-china

Sanctions

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

January 6, 2026: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 13P, "Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024."

Russia-related General License 13P: U.S. persons, or entities owned or controlled, directly or indirectly, by a U.S. person, are authorized to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations, certifications, or tax refunds to the extent such transactions are prohibited by Directive 4 under Executive Order 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation, provided such transactions are ordinarily incident and necessary to the day-to-day operations in the Russian Federation of such U.S. persons or entities, through 12:01 a.m. eastern daylight time, April 9, 2026.

This general license does not authorize:

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

Effective January 6, 2026, General License No. 13O, dated September 29, 2025, is replaced and superseded in its entirety by this General License No. 13P.

Additionally, OFAC published two amended Russia-related Frequently Asked Questions, FAQ 999 and FAQ 1118.

FAQ 999: What authorizations exist for entities subject to Directive 4 under Executive Order (E.O.) 14024, "Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation," as amended (Russia-related Sovereign Transactions Directive)?

OFAC issued Russia-related General License (GL) 132 to authorize transactions involving the Paks II civil nuclear power plant project in Hungary, including those involving the Central Bank of the Russian Federation, that would be prohibited by the Russia-related Sovereign Transactions Directive.

OFAC issued Russia-related General License (GL) 115C to authorize civil nuclear energy-related transactions, including those involving the Central Bank of the Russian Federation, that would be prohibited by the Russia-related Sovereign Transactions Directive.

OFAC issued GL 13P to authorize U.S. persons to pay taxes, fees, or import duties and purchase or receive permits, licenses, registrations, or certifications, to the extent such transactions are prohibited by the Russia-related Sovereign Transactions Directive, provided such transactions are ordinarily incident and necessary to such persons' day-to-day operations in the Russian Federation. For further information on the types of transactions authorized by GL 13P, see FAQ 1118.

OFAC also issued GL 14, authorizing certain transactions involving any Directive 4 entity where the Directive 4 entity's sole function in the transaction is to act as an operator of a clearing and settlement system. GL 14 does not authorize any transfer of assets to or from any Directive 4 entity, or any transaction where a Directive 4 entity is either a counterparty or beneficiary to the transaction. In addition, GL 14 does not authorize any debit to an account on the books of a U.S. financial institution of any Directive 4 entity. See FAQ 1003.

Note that GL 13P, GL 14, GL 115C, and GL 132 continue to authorize against the Russia-related Sovereign Transactions Directive.

FAQ 1118: As of December 2022, the Government of the Russian Federation may require a so-called "exit tax" payment prior to the divestment of assets located in the Russian Federation, potentially requiring transactions involving the Central Bank of the Russian Federation or the Ministry of Finance of the Russian Federation. Do U.S. sanctions prohibit the payment of this so-called "exit tax"? Does Russia-related General License (GL) 13P authorize transactions that involve the payment of this exit tax?

Directive 4 under Executive Order (E.O.) 14024, "Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation," as amended (Russia-related Sovereign Transactions Directive), prohibits the following activities by U.S. persons: any transaction involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation, including any transfer of assets to such entities or any foreign exchange transaction for or on behalf of such entities (collectively, "Directive 4 entities"). As noted in FAQ 1002, this includes both direct and indirect transactions.

OFAC issued the Russia-related Sovereign Transactions Directive with the explicit aim of preventing the Government of the Russian Federation from leveraging these institutions and their holdings of international reserves in ways that would undermine the impact of U.S. sanctions. Information currently available to OFAC suggests so-called "exit taxes" imposed by the Government of the Russian Federation involve payments to Directive 4 entities. Consequently, U.S. persons whose divestment from the Russian Federation will involve the payment of such an exit tax require a specific license from OFAC prior to the payment of such tax, unless otherwise authorized by OFAC.

GL 13P authorizes U.S. persons, or entities owned or controlled, directly or indirectly, by a U.S. person, to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations, or certifications involving Directive 4 entities that would otherwise be prohibited by the Russia-related Sovereign Transactions Directive, provided such transactions are ordinarily incident and necessary to such persons' day-to-day operations in the Russian Federation. Payment of exit taxes is not considered ordinarily incident and necessary to day-to-day operations in the Russian Federation and, thus, is not authorized under GL 13P.

Therefore, U.S. persons whose divestment of assets in the Russian Federation will involve a payment of such an "exit tax" should seek a specific license from OFAC. Such persons may submit a request for a specific license with OFAC's Licensing Division online at https://ofac.treasury.gov/ofac-license-application-page. License applications related to these payments should include information regarding the amount of the exit tax, the amount of ongoing taxes that would otherwise be paid to the Government of the Russian Federation should divestment not occur, the impact of a failure to pay the tax on the employees of the exiting company, the specific economic activity in Russia of the exiting company, and the impact on the Russian Federation of the divestment. OFAC will expedite its review of such requests, which will be evaluated on a case-by-case basis.

While OFAC is aware that the Commission established by the Russian Federation to review such divestments may include individuals from entities subject to the Russia-related Sovereign Transactions Directive or individuals listed on the Specially Designated Nationals and Blocked Persons List, U.S. persons do not need to seek authorization from OFAC for their Russian buyers to submit an application to the Commission regarding a divestment transaction.

https://ofac.treasury.gov/recent-actions/20260106 and https://ofac.treasury.gov/media/934881/download?inline and https://ofac.treasury.gov/faqs/999 and https://ofac.treasury.gov/faqs/1118

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January 13, 2026: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), in coordination with the Department of State, took action pursuant to the Administration’s policy to curtail the pernicious influence of the Muslim Brotherhood and protect the United States and its partners from Muslim Brotherhood chapters’ support for terrorism. Chapters of the Muslim Brotherhood purport to be legitimate civic organizations while, behind the scenes, they explicitly and enthusiastically support terrorist groups like Hamas. Consequently, OFAC designated the Egyptian and Jordanian branches of the Muslim Brotherhood for their material support to Hamas as Specially Designated Global Terrorists pursuant to the counterterrorism authority, Executive Order (E.O.) 13224, as amended.

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

Taqqosh, Muhammad Fawzi of Lebanon.

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

Egyptian Muslim Brotherhood of Egypt;
Jordanian Muslim Brotherhood of Jordan; and
Lebanese Muslim Brotherhood of Lebanon.

https://home.treasury.gov/news/press-releases/sb0357 and https://ofac.treasury.gov/recent-actions/20260113

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January 14, 2026: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 131B, "Authorizing Certain Transactions for the Negotiation of and Entry Into Contingent Contracts for the Sale of Lukoil International GmbH and Related Maintenance Activities."

Russia-related General License 131B: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the negotiation of and entry into contracts with Public Joint-Stock Company Oil Company Lukoil or any of its affiliates for the sale, disposition, or transfer of Lukoil International GmbH (“LIG”) or any entity in which LIG owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest (collectively, “LIG Entities”) are authorized through 12:01 a.m. eastern standard time, February 28, 2026, provided that the performance of any such contract is made expressly contingent upon the receipt of separate authorization from the Office of Foreign Assets Control (“contingent contracts”). Note: For purposes of this general license, the term “contingent contracts” includes executory contracts, executory pro forma invoices, agreements in principle, executory offers capable of acceptance such as bids or proposals in response to public tenders, binding memoranda of understanding, or any other similar agreement.

All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the maintenance or wind down of operations, contracts, or other agreements of LIG Entities are authorized through 12:01 a.m. eastern standard time, February 28, 2026. All blocked accounts of LIG Entities may be used, debited, or credited for the transactions authorized in this paragraph.

This general license does not authorize:

(1) The unblocking of any property blocked pursuant to any part of 31 CFR chapter V;

(3) The transfer of funds to any person or account located in the Russian Federation.

Effective January 14, 2026, General License No. 131A, dated December 10, 2025, is replaced and superseded in its entirety by this General License No. 131B.

Additionally, OFAC is publishing two amended Frequently Asked Questions (FAQs 1224 and 1225).

FAQ 1224: What negotiations does Russia-related General License 131B authorize, and what transaction conditions will OFAC consider when evaluating requests for further authorization to effectuate a sale of Lukoil International GmbH (LIG) assets?

On October 22, 2025, OFAC designated PJSC Lukoil (Lukoil) to increase pressure on Russia's energy sector and degrade Russia's ability to raise revenue for its war machine. OFAC is aware of potential efforts by Lukoil to divest its assets outside of Russia to non-blocked parties, given the impact of sanctions. To support such divestments and further cut off funding to Russia, OFAC issued Russia-related General License (GL) 131B, which authorizes negotiations and entry into contingent contracts with Lukoil for the sale of LIG or any of LIG's majority-owned subsidiaries. Authorized activities include negotiations on terms for definitive agreements and financial, legal, or operational due diligence, including engagement of outside counsel or advisors. GL 131B expires on February 28, 2026.

GL 131B does not authorize transactions to effectuate the actual sale, disposition, or transfer of any LIG entity or asset. Any contract entered into pursuant to GL 131B must expressly be made contingent upon the receipt of a separate authorization from OFAC. The goal of OFAC's Russia sanctions is to place pressure on Moscow to end its war.

As such, Treasury would evaluate any proposed sale of LIG based on factors that support U.S. national security and foreign policy objectives. OFAC expects that, at a minimum, the proposed transaction must: completely sever LIG's ties with Lukoil; block any funds owed to Lukoil until sanctions are lifted by placing them in an account subject to U.S. jurisdiction; and not provide a windfall to Lukoil, such as by providing up-front value to Lukoil, including through asset or share swaps. Further, as a condition of any future license for effectuating a sale of LIG, OFAC expects that it will require persons purchasing LIG's assets to seek OFAC review before further divestment of material LIG assets.

OFAC may revoke GL 131B at any time, including if Lukoil and LIG do not appear to be engaging in good faith negotiations regarding the divestment of LIG or its assets.

FAQ 1225: What activities do Russia-related General License 128B and General License 131B authorize related to Lukoil International GmbH (LIG)?

OFAC has issued two General Licenses (GLs) relating specifically to Lukoil International GmbH (LIG) and its majority-owned subsidiaries ("LIG Entities"): GL 128B and GL 131B. The GLs are similar but have different expiration dates and terms as each serves a different purpose.

To mitigate the effects of Lukoil's OFAC designation on retail consumers, OFAC issued on December 4, 2025 GL 128B to authorize maintenance, operation, and wind down activities for a narrow range of LIG entities, specifically Lukoil retail automobile service stations outside of the Russian Federation. This GL expires on April 29, 2026.
To enable Lukoil to divest its assets outside of Russia to non-blocked parties, OFAC issued on December 10, 2025 GL 131A to authorize, among other things, maintenance and wind down activities of all LIG Entities. On January 14, 2026, OFAC issued GL 131B to extend the existing authorization until February 28, 2026. Please see Frequently Asked Question 1224 for additional information on authorizations regarding negotiations for the sale of LIG Entities.

GL 128B and GL 131B expressly authorize transactions undertaken in the ordinary course of business, provided that the transactions do not involve any blocked persons other than the LIG Entities described in GL 128B and GL 131B. Transactions undertaken in the ordinary course of business may involve (but are not limited to): supply of motor fuel and lubricants; lease payments; insurance payments; property maintenance and environmental services; employee payroll, benefits, severance, and reimbursements; information technology services; payments to government authorities; legal services and proceedings; payments to suppliers, landlords, lenders, and partners; the preservation and upkeep of pre-existing tangible property; and activities associated with maintaining pre-existing capital investments. Also, both GL 128B and GL 131B authorize transactions ordinarily incident and necessary to performing pre-existing agreements and conducting intracompany transfers, provided that such transactions are consistent with previously established practices and support pre-existing projects or operations, consistent with the terms of the respective authorizations.

Both GL 128B and GL 131B also authorize financial institutions, payment processors, and other entities to use, debit, and credit the accounts of the relevant LIG Entities to effectuate the respective authorizations, but both GLs are also expressly limited by the condition that no funds may be transferred to a person or account in the Russian Federation.

Non-U.S. persons generally do not risk exposure to U.S. sanctions under E.O. 14024 for engaging in transactions with blocked persons that are generally authorized for U.S. persons, including for those authorized by GL 128B and GL 131B. Similarly, non-U.S. persons may rely upon GL 128B and GL 131B regardless of whether a foreign financial institution maintains blocked accounts, provided the non-U.S. person's activities are consistent with the terms of GL 128B and GL 131B, including the requirement that no payments may be transferred to any person or account located in the Russian Federation.

https://ofac.treasury.gov/recent-actions/20260114 and https://ofac.treasury.gov/media/934896/download?inline and https://ofac.treasury.gov/faqs/1224 and https://ofac.treasury.gov/faqs/1225

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January 15, 2026: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action against the architects of the Iranian regime’s brutal crackdown on peaceful demonstrators. OFAC also against the shadow banking networks that allow Iran’s elite to steal and launder revenue generated by the country’s natural resources.

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

ABBASPOUR QOMI, Bashir of Iran;
ARDAKANI, Masoud Mahdavi of Iran;
BAGHERI, Nematollah of Iran;
BUALI, Yadollah of Iran;
GIVARI, Akbar of Iran;
HASHEMIFAR, Mohammad Reza of Iran;
KHAMER, Hamid Reza of Iran;
LARIJANI, Ali of Iran;
MALEKI, Azizollah of Iran;
RASHNO, Mehdi of Iran; and
SHAMANI, Masoud of Iran.

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

Crystal Gas FZE of Iran;
Desert Pulse Trading FZE of Iran;
Empire International Trading FZE of Iran;
Fardis Prison of Iran;
Golden Mist PTE. LTD., of Iran;
HMS Trading FZE of Iran;
Limonium Petrochemicals Trading LLC SOC of Iran;
Nanshan LTD, of Iran;
Naviera Shipping And Trading FZ LLC of Iran;
Nikan Pezhvak Aria Kish Company of Iran;
Shine Road Trading FZE of Iran;
Tejarat Hermes Energy Qeshm of Iran; and
Turkiz Fuel Trading LLC of Iran.

https://home.treasury.gov/news/press-releases/sb0364 and https://ofac.treasury.gov/recent-actions/20260115

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January 16, 2026: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 21 individuals and entities and identifying one vessel that have transferred oil products, procured weapons and dual-use equipment, and provided financial services for Iran-backed terrorist organization Ansarallah, commonly known as the Houthis. This action targets financial conduits between the Iranian government and the Houthis, building on previous Treasury actions to constrict the Iranian regime’s use of its oil wealth to fund regional terrorist proxies at the expense of the Iranian population’s welfare. It also targets key front companies, facilitators, and operatives located in Yemen, Oman, and the United Arab Emirates (UAE) that are part of the Houthis’ vast revenue generation and smuggling networks, which enable the group to sustain its capability to conduct destabilizing regional activities and unprovoked attacks on commercial vessels in the Red Sea.

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

Adriss, Ahmad of Syria;
Al Muayyad, Adil Mutahhar Abdallah of Yemen;
Al-Matari, Ebrahim Ahmed Abdullah of Yemen;
Al-Sharafi, Zayd 'Ali Ahmed of Yemen;
Asghar, Imran of the United Arab Emirates and Pakistan;
Baidhani, Waleed Fathi Salam of Yemen and the United Arab Emirates;
Bseis, Ahmad of Syria;
Dahan, Ameen Hamid Mohammed of Yemen;
Ismail, Ahmad of Syria;
Pshenichnyy, Alexander Yurovich of Russia; and
Singh, Ranveer of India.

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

Adeema Oil FZC of the United Arab Emirates;
Al Sharafi Oil Companies Services of Yemen;
Albarraq Shipping Co, Trust Company Complex of the Marshall Islands;
Al-Ridhwan Exchange And Transfer Company of Yemen;
Alsaa Petroleum And Shipping FZC of the United Arab Emirates;
Barash Aviation And Cargo Company Limited of Yemen;
New Ocean Trading FZE of the United Arab Emirates;
Rabya For Trading FZC of Oman;
Sama Airline of Yemen; and
Wadi Kabir Co. For Logistics Services of Oman.

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

Albarraq Z Vessel Registration Identification IMO 9252943; MMSI 620800006.

https://home.treasury.gov/news/press-releases/sb0367 and https://ofac.treasury.gov/recent-actions/20260116

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January 21, 2026: The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) released a Quarterly Report of Licensing Activities pursuant to Section 906(b) of the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA), covering activities undertaken by OFAC under Section 906(a)(1) of the TSRA from July through September 2025. Under the procedures established in its TSRA-related regulations, OFAC processes license applications requesting authorization to export agricultural commodities, medicine, and medical devices to Iran under the specific licensing regime set forth in Section 906 of the TSRA.

https://ofac.treasury.gov/recent-actions/20260121_33

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January 22, 2026: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated five Costa Rican nationals and five Costa Rica-based entities for their involvement in narcotics trafficking and money laundering. A key global cocaine transshipment point, Costa Rica has become an increasingly significant waypoint for criminal organizations trafficking cocaine to the United States. The network designated is responsible for transporting multi-ton quantities of cocaine from Colombia, storing the drugs in Costa Rica, and ultimately shipping them to the United States and Europe. Luis Manuel Picado Grijalba, the leader of this network, is one of the most prolific drug traffickers operating in the Caribbean.

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

Mc Donal Rodriguez, Anita Yorleny of Costa Rica;
Mc Donald Rodriguez, Estefania of Costa Rica;
Pena Russell, Tonny Alexander of Costa Rica;
Picado Grijalba, Jordie Kevin of Costa Rica; and
Picado Grijalba, Luis Manuel of Costa Rica.

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

3-101-507688 SA of Costa Rica;
Asociacion De Lideres Limonenses Del Sector Pesquero of Costa Rica;
Celajes De York Cdy SA of Costa Rica;
Inversiones Laurita L And L SA of Costa Rica; and
Magic Esthetic Salon SA of Costa Rica.

https://home.treasury.gov/news/press-releases/sb0369 and https://ofac.treasury.gov/recent-actions/20260122

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January 23, 2026: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) increased pressure on Iran’s shadow fleet. OFAC targeted nine shadow fleet vessels and their respective owners or management firms that have collectively transported hundreds of millions of dollars’ worth of Iranian oil and petroleum products to foreign markets. This revenue, which rightfully belongs to the Iranian people, is instead diverted to fund its regional terrorist proxies, weapons programs, and security services, instead of the basic economic services the Iranian people have bravely demanded.

OFAC also issued Iran-related General License T, "Authorizing Limited Safety and Environmental Transactions and the Offloading of Cargo Involving Certain Persons or Vessels Blocked on January 23, 2026."

Iran-related General License T: All transactions prohibited by Executive Order (E.O.) 13902 that are ordinarily incident and necessary to one or more of the following activities involving the blocked vessels or blocked persons listed in the Annex to this general license, and any entity in which the listed 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, February 22, 2026, provided that any payment to a blocked person must be made into a blocked interest-bearing account located in the United States:

(1) The safe docking and anchoring in any port, excluding ports located in Iran or the Russian Federation or Venezuela, or under the control of the Government of Iran or the Government of the Russian Federation or the Government of Venezuela, of the blocked vessels listed in the Annex to this general license (the “Blocked Vessels”);

(2) The preservation of the health or safety of the crew of any of the Blocked Vessels;

(3) Emergency repairs of any of the Blocked Vessels or environmental mitigation or protection activities relating to any of the Blocked Vessels; or

(4) The delivery and offloading of cargo involving the Blocked Vessels, provided that the cargo is not of Iranian-origin and was loaded on or before January 23, 2026, and that the delivery and offloading of cargo does not occur at any port located in Iran or the Russian Federation or Venezuela, or under the control of the Government of Iran or the Government of the Russian Federation or the Government of Venezuela.

Note 1: The authorization above includes services such as vessel management, crewing, bunkering, piloting, registration, flagging, insurance, classification, and salvage. This general license does not authorize:

(1) The entry into any new commercial contracts involving the property or interests in property of any blocked persons, including the blocked persons described in paragraph (a) of this general license, except as authorized above; or

(2) Any transactions or activities prohibited by E.O. 13902, except as authorized above, or any transaction or activity prohibited by any other E.O. or any part of 31 CFR chapter V, including any transaction or activity involving Iran, the Government of Iran, or Iranian-origin goods or services that is prohibited by the Iranian Transactions and Sanctions Regulations (31 CFR part 560).

Additionally, OFAC has updated the Specially Designated Nationals and Blocked Persons List.

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

AAYAT Ship Management Private Limited of India;
Benoil Shipping Inc of Liberia;
Black Stone Oil And Gas of Oman;
Galeran Service Corp of the Seychelles;
Horizon Harvest Shipping LLC of the United Arab Emirates;
Longevity Shipping Limited of the Marshall Islands;
Odyssey Marine Inc., of the Marshall Islands; and
Trade Bridge Global Inc., of the Marshall Islands.

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

Al Diab II Vessel Registration Identification IMO 9053816; MMSI 511100397;
Aqua Spirit Vessel Registration Identification IMO 9197727; MMSI 352001226;
Avon Vessel Registration Identification IMO 9034705; MMSI 620800259;
Cesaria Vessel Registration Identification IMO 9251602; MMSI 511101849;
Chiron 5 Vessel Registration Identification IMO 9306665; MMSI 620827000;
Eastern Hero Vessel Registration Identification IMO 9353905; MMSI 511101182;
Keel Vessel Registration Identification IMO 9176929; MMSI 620800174;
Longevity 7 Vessel Registration Identification IMO 9240885; and
Sea Bird Vessel Registration Identification IMO 9088536; MMSI 511101458.

https://home.treasury.gov/news/press-releases/sb0370 and https://ofac.treasury.gov/recent-actions/20260123 and https://ofac.treasury.gov/media/934946/download?inline

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January 29, 2026: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Venezuela-related General License 46, "Authorizing Certain Activities Involving Venezuelan-Origin Oil."

Venezuela-related General License 46: All transactions prohibited by the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), including those 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 (collectively, “PdVSA Entities”), that are ordinarily incident and necessary to the lifting, exportation, reexportation, sale, resale, supply, storage, marketing, purchase, delivery, or transportation of Venezuelanorigin oil, including the refining of such oil, by an established U.S. entity are authorized, provided that:

(2) Any monetary payment to a blocked person is made into the Foreign Government Deposit Funds, as specified in Executive Order 14373 of January 9, 2026, or any other account as instructed by the U.S. Department of the Treasury.

Note 1: For purposes of this general license, the term “established U.S. entity” means any entity organized under the laws of the United States or any jurisdiction within the United States on or before January 29, 2025.

Note 2: Transactions authorized include arranging shipping and logistics services, including chartering vessels, obtaining marine insurance and protection and indemnity (P&I) coverage, and arranging port and terminal services, including with port authorities or terminal operators that are part of the Government of Venezuela. The above also authorizes commercially reasonable payments in the form of swaps of crude oil, diluents, or refined petroleum products.

This general license does not authorize:

(2) Any transaction involving a person located in or organized under the laws of the Russian Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, the Republic of Cuba, or any entity that is owned or controlled, directly or indirectly, by or in a joint venture with such persons;

(4) The unblocking of any property blocked pursuant to the VSR; or (5) Any transaction involving a blocked vessel.

(1) The parties involved;

(2) The quantities, values, and countries of ultimate destination;

(3) The dates the transactions occurred; and

(4) Any taxes, fees, or other payments provided to the Government of Venezuela.

Reports described above are due ten days after the execution of the first of such transactions and every 90 days thereafter while such transactions are ongoing.

Note to General License No. 46: Nothing in this general license relieves any person from compliance with the requirements of other Federal agencies, including the Department of Commerce’s Bureau of Industry and Security.

https://ofac.treasury.gov/recent-actions/20260129 and https://ofac.treasury.gov/media/934886/download?inline

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January 30, 2026: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took additional action against Iranian officials responsible for the regime’s brutal crackdown on its own people. Among the officials sanctioned is Eskandar Momeni Kalagari —Iran’s Minister of the Interior—who oversees the murderous Law Enforcement Forces of the Islamic Republic of Iran (LEF), a key entity responsible for the deaths of thousands of peaceful protestors.

OFAC also designated Babak Morteza Zanjani, a criminal Iranian investor who previously embezzled billions of dollars in Iranian oil revenue that rightfully belonged to the Iranian people and was never fully recovered. Freed from imprisonment in order to launder money for the regime, Zanjani has provided financial backing for major projects that support the Islamic Revolutionary Guard Corps (IRGC) and the Iranian regime more broadly.

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

Damghani, Hamid of Iran;
Hajian, Mehdi of Iran;
Kamali, Hossein Zare of Iran;
Khademi, Majid of Iran;
Momeni Kalagari, Eskandar of Iran;
Valizadeh, Ghorban Mohammad of Iran; and
Zanjani, Babak Morteza of Iran.

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

Zedcex Exchange LTD of the United Kingdom; and
Zedxion Exchange LTD of the United Kingdom.

https://home.treasury.gov/news/press-releases/sb0375 and https://ofac.treasury.gov/recent-actions/20260130

LATEST EXPORT CONTROLS AND COMPLIANCE UPDATES JANUARY 2026 Read More »

When the Compliance Role Goes Unfilled, and Everyone Thinks They Can Manage

ByGeorge (Jorge) Cánovas, J.D. • Vice President Compliance, FD Associates

This happens constantly, across industries, geographies, and company sizes.

The compliance lead in your company leaves. The departure may be orderly or abrupt, but the organizational response is usually the same. There is no immediate fallout. No regulator calls. No customer escalations. The business keeps moving. Leadership concludes, sometimes on purpose and sometimes by inertia, that the role can remain unfilled, at least for a while. After all, nothing broke.

That initial calm is misleading, but understandably so. Compliance is one of the few functions whose success is defined almost entirely by the absence of visible events. When it works, nothing happens. No blocked transactions. No uncomfortable meetings. No late night emails to outside counsel. The system hums quietly in the background.

So when the role disappears and the system does not immediately fail, it creates a false sense of resilience and comfort.

What follows is not dramatic. It is incremental, structural, and easy to miss.

First, decision ownership begins to fragment.

Compliance decisions that once had a clear escalation point disperse across the organization. Legal weighs in on legal exposure. Operations focuses on delivery. Sales pushes for speed. Engineering frames issues as technical rather than regulatory. Everyone is acting rationally within their own incentives, but no one is responsible for synthesizing those perspectives into a defensible compliance judgment.

As a result, decisions start defaulting to consensus or momentum rather than analysis.

This is what happens when a control function designed to slow decisions just enough to test assumptions, quietly disappears. The organization still decides, but without a consistent framework for risk tolerance.

Several years after I left a company, I received a call from their newly hired CMMC lead. She was sharp, diligent, and trying to understand how the organization handled classification, escalation, and risk decisions. Her questions were basic, but telling. How were products classified? Which business units owned which decisions? What processes existed for handling gray areas?

The answer, awkwardly, was that all of this already existed.

The classification logic had been built. Risk matrices had been issued to the business units. Compliance plans had been rolled out, reviewed, and socialized. Decision trees existed for escalation and documentation. It had been implemented while I was there.

But by the time she arrived, it had all been forgotten in practice.

Not repealed. Not deleted. Just put away. The business units had been given the tools, but once “the compliance guy” was gone, the tools stopped being used. Without someone maintaining cadence, context, and judgment, the system quietly decayed.

No one had decided to abandon compliance. It simply stopped living.

That call was not about rebuilding from scratch. It was about reconstructing intent. Why those controls existed. What risks they were designed to manage. Where the organization had already learned hard lessons it was now relearning again.

That is what gets lost when compliance leadership disappears. Not rules, but reasoning.

Second, edge cases quietly become the norm.

Most compliance exposure does not arise from obvious violations. It arises from gray areas. Product modifications, new customer use cases, unusual deal structures, or cross border collaborations that do not fit neatly into prior models. A functioning compliance role is designed to live in those gray zones, to ask uncomfortable questions early, and to document why a particular path was chosen.

Without that role, gray areas are resolved ad hoc. One team treats them as low risk. Another escalates them as urgent. Precedent becomes inconsistent. Over time, the organization loses the ability to explain not just what it decided, but why it decided it.

Third, compliance quietly shifts from governance to negotiation.

Without clear authority, compliance becomes something teams work around rather than through. Questions are framed to obtain approval rather than analysis. Risk is described narrowly. Facts are simplified. This is rarely malicious. It is human behavior responding to organizational signals. If no one owns the function, the cost of slowing down feels more immediate than the cost of getting it wrong. It is over time that this becomes the norm and this is how exposure accumulates without triggering alarms.

Eventually, something happens, and the symptoms become visible.

Approvals take longer and longer. Internal emails grow more cautious. Outside counsel appears on threads where they never used to be needed. Customer diligence responses become harder to assemble. Leadership senses that decisions carry more weight and less confidence, even when no single issue appears catastrophic.

At this point, many organizations still believe they are managing. In reality, they are compensating for a missing function by absorbing cost elsewhere, and quite frankly, this is where the response from companies often goes wrong.

The answer is not always to rush into a permanent hire, especially when the organization needs immediate structure, restored judgment, and credibility with customers or regulators. This is where experienced external compliance leadership, such as FD Associates, can step in and stabilize the system while the right permanent hire is identified for the business.

The key is to getting things back in order. That means reestablishing clear escalation paths. Re-grounding classification and risk frameworks. Dusting off compliance plans and making them operational again. Recreating institutional memory before it is lost entirely. And doing so in a way that supports the business rather than slowing it to a crawl.

Just as importantly, it does not end there. Part of restoring a healthy compliance function is helping the organization decide what it actually needs long term, and helping recruit and transition to a new compliance lead who inherits a functioning system rather than a mess.

Organizations that do this early tend to recover quickly. Decisions become cleaner. Risk tolerance becomes explicit. Teams regain clarity on where compliance fits into daily operations, not as friction, but as an enabling control.

Leaving a compliance role unfilled often feels manageable because the consequences are deferred. But deferred does not mean avoided. It just means the bill arrives later.

When the Compliance Role Goes Unfilled, and Everyone Thinks They Can Manage Read More »

New Foreign UAS Systems Shutdown by the FCC

ByGeorge (Jorge) Cánovas, J.D. • Vice President Compliance, FD Associates

This article was originally posted to FD Associates’ LinkedIn page .

Read on LinkedIn

In late December 2025, the Federal Communications Commission (FCC) issued a national security determination (Pubic Notice DA-25-1086) concluding that unmanned aircraft systems and certain UAS critical components produced outside the United States pose an unacceptable risk to national security and to the safety and security of U.S. persons. The determination focused on specific risks tied to unauthorized surveillance, sensitive data collection, remote system access, and the ability to alter, degrade, or disable system functionality through software or firmware updates after deployment.

Based on that determination, the FCC placed foreign-produced UAS and UAS critical components on its Covered List, prohibiting those items from operating in the United States, unless a specific national security determination is issued by the Department of Defense or the Department of Homeland Security concluding that a particular system or component does not present those risks.

The national security are issued through an interagency national security review led by the Department of Defense or the Department of Homeland Security, typically involving intelligence, cybersecurity, and supply-chain risk offices, and focus on how a specific UAS or critical component is designed, manufactured, controlled, updated, and accessed over its lifecycle. The review examines communications architecture, component origin, firmware and software update authority, remote access capabilities, data collection and transmission pathways, and the ability to alter or disable system functionality after deployment.

If the reviewing department concludes that the system or component does not present the identified national security risks, it issues a specific determination covering that system or class of systems, which the FCC then implements ministerially by updating the Covered List, rather than through an FCC-run application, appeal, or waiver process.

The practical effect is immediate for new UAS equipment seeking authorization. Covered drones and components may not be imported into the United States unless they are first cleared through the applicable national security review process. The FCC will not grant equipment authorization for covered systems to operate in the United States, and operating such systems without authorization is unlawful.

The issue here is not flight safety or airspace regulation, but the communications systems embedded in these platforms and the national security risks they present.

FCC Covered UAS and Critical Components

Rather than publishing a finite or part-numbered list, the FCC adopted a functional approach focused on system operation, communications, and control. Any foreign-produced component that is essential to the operation of a UAS, particularly where it enables communications, navigation, control, or data transmission, may fall within scope.

Covered items include, but are not limited to:

Complete unmanned aircraft systems and associated elements required for safe and effective operation
Communications radios and radio frequency transmission equipment
Data transmission and telemetry devices
Flight controllers and integrated control units
Ground control stations and UAS controllers
Navigation systems, including GPS, GNSS, and inertial navigation units
Sensors, payload sensors, and cameras
Motors and motor controllers
Batteries and battery management systems
Associated software and firmware required for operation, control, communications, or updates

Because the scope is functional rather than categorical, a single foreign-produced communications or control component can prevent FCC authorization for an entire drone system, regardless of where final assembly occurs or how the product is marketed.

Recent FCC clarification adds a limited, temporary carve-out. In a January 7, 2026 Public Notice (See FCC DOC DA-26-22A1), the FCC announced that certain foreign-produced UAS and UAS critical components will be removed from the Covered List on a time-limited basis, including systems appearing on the “Defense Contract Management Agency Blue UAS Cleared List” (See The Blue UAS Cleared List and Blue UAS Framework) and products that qualify as domestic end products under the Buy American Standard. These removals are not permanent. They expire on January 1, 2027, after which covered foreign-produced UAS and components will again be ineligible for FCC authorization absent a new national security determination. The FCC emphasized that these temporary allowances do not reflect a change in its underlying national security assessment and should be viewed as transitional measures rather than long-term relief.

What the Rule Does and Does Not Do

The FCC is not enforcing export laws. Its action is based on communications authorization and national security risk. The consequence for drone companies is straightforward: new systems containing covered foreign-produced components will face challenges upon importation and to lawfully operated in the United States.

The rule does not turn on whether a drone is described as civil or commercial, nor does it depend on historical acceptance of a platform. The analysis focuses on foreign production and the presence of covered functionality tied to foreign communications, system control, or data transmission.

How This Plays Out in Practice

In practice, the FCC rule often surfaces earlier in the business cycle than companies expect.
A product, component, or fleet is first identified for import, sale, deployment, or continued operation in the United States. This may be tied to a new product launch, a customer procurement, or a review of systems already in use.

The system is then examined at the component level to identify foreign-produced elements tied to communications, navigation, control, data transmission, or firmware. This is frequently where issues surface, particularly with radios, GNSS modules, flight controllers, sensors, and embedded software.

If the system contains covered foreign-produced UAS or critical components, FCC equipment authorization is unavailable unless a specific national security determination applies. At that point, the question is no longer abstract compliance, but whether the product can be imported or lawfully operated at all.

For existing fleets, this risk arises primarily when systems are modified, upgraded, or otherwise require new or amended FCC authorization. For new products, it can halt sales, integration, or deployment entirely.

Companies are then forced into business decisions. Options may include redesigning systems, re-sourcing components, segmenting product lines for different markets, adopting alternative platforms, or exiting certain use cases altogether. These decisions are driven by technical feasibility, cost, and time to market, not regulatory preference.

What the FCC Actually Examines During Authorization

FCC authorization reviews are grounded in detailed technical disclosures. Companies are required to explain, with specificity:

How the drone communicates with ground control stations and other systems
Which components enable command, control, telemetry, navigation, and data transmission
Where those components are designed, manufactured, and integrated
How firmware and software updates are delivered and who controls them
Whether the system allows remote access, diagnostics, or configuration after deployment
How data is collected, stored, transmitted, and accessed

These are not peripheral details. They go directly to whether the FCC will authorize operation of the system in the United States.

Why This Is More Complicated Than It First Appears

For many drone companies, risk does not reside solely in the airframe. It resides in subsystems selected years earlier for cost, performance, or availability, long before national security screening became decisive.

Communications modules, navigation units, sensors, and firmware stacks are often globally sourced and deeply embedded in the system architecture. As a result, a drone assembled in the United States can still be disqualified because of a single foreign-produced radio, control board, or software dependency that cannot easily be replaced without redesign.

The rule also reaches beyond new sales. Fleet operators, integrators, and service providers must consider whether systems already deployed can continue operating lawfully if they rely on covered components that cannot receive authorization. Replacement parts, upgrades, firmware changes, or shifts in who controls software updates are often the trigger point. Systems that were lawfully authorized at deployment can face new scrutiny when their configuration, control pathways, or update mechanisms change over time.

What This Means for U.S. Drone Companies

U.S. manufacturers, distributors, integrators, operators and brokers must now look at end platforms and a component-level view of their products and operations.

Companies that manufacture drones domestically but rely on foreign-produced critical components face the same authorization barrier for new systems as fully foreign-manufactured systems. Companies importing foreign-produced drones for resale, integration, or specialized use must assess whether those platforms can be authorized at all.

The impact is especially acute where civil drones are being used or adapted for government, public safety, critical infrastructure inspection, or defense-adjacent missions. In those contexts, national security risk is assessed more conservatively, and tolerance for foreign control or access is lower.

Downstream activities matter as well. Software updates, configuration changes, maintenance, and technical support can all be relevant where authorization turns on who controls system behavior over time.

For some companies, compliance will require redesign, re-sourcing, or segmentation of product lines. For others, the rule may eliminate U.S. market access for certain platforms entirely.

The Bottom Line

The FCC has not issued a blanket ban on drones. It has conditioned U.S. market access on national security clearance for foreign-produced unmanned aircraft systems and critical components.

For drone companies operating in or selling into the United States, the issue is no longer abstract. Product architecture, component sourcing, system control, and lifecycle management now determine whether a drone can be imported, authorized, or lawfully operated.

This is an operational gate to the U.S. drone market, and it requires a level of technical and supply-chain scrutiny that many companies have not previously needed to apply.

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New Foreign UAS Systems Shutdown by the FCC Read More »

When In-Country Still Counts as an “Transfer” or “Export”, and Why Small Oversights Add Up

ByGeorge (Jorge) Cánovas, J.D. • Vice President Compliance, FD Associates

A colleague of mine, Shahab Wahdatehagh at Descartes, recently flagged something on LinkedIn that many teams still underestimate. Transferring EAR-controlled items within the same country can still require an export license. This is not a gray area, as the regulations are clear. Yet it continues to be missed, even by experienced organizations. And in my experience, these misses rarely come from bad intent. People do not wake up in the morning planning to violate export law. They happen because the rules are not consistently understood across everyone involved in the transaction. When training is uneven, outdated, or limited to a small group, gaps form. That is usually where the error starts.

The point is simple, but the consequences are certainly not.

The reflex that causes trouble: “It’s just EAR99”

EAR99 often gets treated as shorthand for low risk. No license from the USA. No issue transfer in country. Move on. That assumption is wrong and can cause many problems.

The EAR covers far more than cross-border shipments. Those in-country transfers can still trigger licensing requirements, especially where end users or end uses are restricted. The General Prohibitions apply broadly, and classification alone does not get you out of trouble.

General Prohibitions in Part 736 and the Entity List makes this pretty clear. If a party appears in Supplement No. 4 to Part 744, almost any item subject to the EAR, including EAR99, requires a license for export, reexport, or in-country transfer, and exceptions are rare. Where the item is physically located does not change the obligation, who is in possession does.

Where compliance usually breaks down

Exports from the U.S. tend to get careful review. U.S. Customs, freight forwarders, and paperwork force the issue. Once abroad, in-country movements feel routine. Internal transfers. Long-standing partners. Very familiar workflows. And that is where the attention to details drops. Assumptions are made and transactional compliance is not validated against the EAR.

In international settings, responsibility for U.S. export compliance may be passed around. Sales assumes operations handled it. Operations assumes legal reviewed it. Legal assumes compliance screened it. Compliance trusts the system. No one actually owns the call. Hence problems can arise, whether its EAR99 or an item under the EAR with an ECCN or an ITAR item. Lack of procedures and inventory management are the culprits.

At FD Associates, we see this across the board. Large primes. Mid-size manufacturers. Fast-growing companies. Scale does not protect you. In some cases, it makes things worse.

Recent BIS enforcement actions, including the Haas Automation case, show how quickly this can escalate. In-country activity tied to Entity List parties led to a civil penalty of roughly $1.5 million, even with cooperation. Voluntary self-disclosure can help reduce penalties, but it does not erase the financial hit, the reputational damage, or the internal disruption that follows.

Why practical training matters

At FD Associates, we focus on the situations that actually cause violations. In-country transfers. Known customers. Products everyone thinks they understand. We walk through how General Prohibitions, Entity List restrictions, and end-user controls intersect in real workflows, not just in theory.

I have said this many times, most violations are not intentional. They happen because people move fast on what feels routine and do not realize a control applies. The transactions that look the safest are often the riskiest, precisely because no one slows down to question them.

Compliance protects revenue

Compliance is not just a cost. It protects the bottom line, and violations mean giving back money already earned. CEO’s and Boards do not like that equation. Errors like this mean time lost to remediation, audits, and regulator follow-up. A solid compliance program with inventory controls and tracking plus regular auditing allows teams to operate with confidence instead of hesitation or guesswork.

Experience and consistency make the difference

Export compliance is not a one-time exercise. It builds through institutional knowledge, sound judgment, and steady engagement with how the rules are actually enforced.

The strongest programs are not defined by the length of their policies. They are built on experienced people, clear ownership, practical and ongoing training, and leadership that understands a simple truth. - Small oversights add up. And in export controls, they add up fast.

For organizations looking to reduce this kind of risk, consistent and practical training matters. At FD Associates, we work with companies to deliver tailored, role-specific training for the people who actually touch these decisions, from sales and operations to engineering and compliance. We also offer scheduled training courses for teams and individuals who want to strengthen their understanding without building something from scratch. The goal is simple, to help organizations catch the small issues early, before they turn into costly ones.

When In-Country Still Counts as an “Transfer” or “Export”, and Why Small Oversights Add Up Read More »

LATEST EXPORT CONTROLS AND COMPLIANCE UPDATE DECEMBER 2025

This newsletter is a listing of the latest changes in export control regulations through December 31, 2025. 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

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

DDTC Published Redlined ITAR Regarding Cyprus And Cambodia Changes To The ITAR

December 2, 2025: Effective October 1 and November 7, 2025, the U.S. Department of State revised ITAR section 126.1 and suspended Cyprus’ status as a proscribed destination (90 FR 43388, Sept. 9, 2025) and removed Cambodia from the list of proscribed destinations (90 FR 50489, Nov. 7, 2025), respectively. To assist users of the ITAR, the U.S. Department provided a link to the updated ITAR Reorg redline, including all amendments made by those rulemakings. Those changes are identified in the reorg redline by identifier “Rev.17”.

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=9c52bc864761f2d027972464336d43d0

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DDTC Launched A New AI-Enabled Virtual Agent

December 19, 2025: DDTC launched a new AI-Enabled Virtual Agent, available on the DDTC public website. This tool is designed to support defense industry users by providing 24/7 access to IT assistance.

The Virtual Agent leverages artificial intelligence to help you quickly find answers to common IT questions and search the DDTC IT Knowledge Base for relevant IT information and resources. This makes it easier to resolve routine IT issues without delay.

If your inquiry requires additional expertise, the Virtual Agent can connect you to a live support agent during business hours - Monday through Friday (excluding Federal holidays), 8:00 a.m. to 5:00 p.m. (EST).

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

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December 22, 2025: On December 10, 2024, the Department issued a final rule regarding ITAR registration fees, effective January 9, 2025. In that rule, the Department announced a one-year initiative providing a Tier 1 registration fee discount and directing readers to our website for further information. The Department announced the extension of that initiative beyond January 9, 2026. Tier 1 registrants renewing or initiating registration on or after January 9, 2026, may continue to request the discount in accordance with those instructions. The Department will be publishing a Federal Register document providing additional direction regarding the discount.

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

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The U.S. Department of State Revised the ITAR AUKUS Exemption At 22 CFR § 126.7

December 30, 2025: 90 Fed. Reg. 61053: The Department of State published a final rule in the Federal Register effective the same day (90 FR 61053). This rule amends the International Traffic in Arms Regulations (ITAR) to further facilitate defense trade between and among Australia, the United Kingdom, and the United States. This rule finalizes the interim final rule 89 FR 67270, Aug. 2024, with amendments to refine the existing § 126.7(a) exemption introduced by that rule and create a new exemption in § 126.7(c) for certain reexports, retransfers, or temporary imports in support of the armed forces of Australia, the United Kingdom, or the United States.

Key Updates to the ITAR § 126.7 Exemptions

Expanded the definition of Authorized Users at § 126.7(b)(2), to state that the transferor, recipient, or broker must be:

S. persons registered with the applicable Directorate of Defense Trade Controls (DDTC) registration pursuant to §§ 122.1 and 129.3 and eligible under § 120.16. The amendment did not change this section of the regulations;
S. government, Australian federal-level, or UK national-level departments or agencies. This is a key change as such Australian federal-level and UK national level departments or agencies no longer need to be listed in DECCS as Authorized Users; or
Australian or UK Authorized Users identified in the Defense Export Control and Compliance System (DECCS) (after having completed an enrollment process initiated through their respective national-level governments) The amendment did not change this section of the regulations.

Note: Non-U.S. Person Brokers must be registered with DDTC pursuant to § 129.3, eligible under § 120.16, and identified on the Authorized User List in DECCS.

Addition of §§ 126.7(c) and 126.7(d)

New sections § 126.7(c) and (d) were added to the exemption pursuant to this final rule.

Reexports, retransfers, or temporary imports in support of the armed forces of Australia, the United Kingdom, or the United States were added as § 126.7(c). The requirements and limitations to § 126.7(c) were added as § 126.7(d), which include that the defense article must have been originally exported via a license or other approval, and that the transferor is under contract with and either directly embedded with or operating alongside the armed forces of Australia, the United Kingdom, or the United States to provide direct on-site support or for returning the defense articles used in on-site support to Australia, the United Kingdom, or the United States.

Other Changes in the Final Rule

The rule revises § 126.18(e)(2), for the foreign persons to vet their dual/third country national employees, to align with the updates in § 126.7(b)(2)(ii) and (iii).

https://www.federalregister.gov/documents/2025/12/30/2025-23998/international-traffic-in-arms-regulations-exemption-for-defense-trade-and-cooperation-among and https://www.pmddtc.state.gov/sys_attachment.do?sys_id=611596cb9702b2d067b1791ad053af16

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December 30, 2025: The Department of State updated its ITAR Reorg I – Redline document, Revision 18, to reflect amendments made by the final rule, referenced above, that amended the AUKUS exemption at 22 CFR § 126.7.

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

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DDTC Frequently Asked Questions (FAQs)

Q: I've received a letter, apparently unrelated to any voluntary disclosure I previously filed, with questions from DDTC asking for information. What should I do?

A: If DDTC reached out to you with questions regarding a potential violation that you have not previously reported through a voluntary disclosure, please submit a complete and detailed response, attaching any requested or otherwise relevant documentation following the format and procedures for disclosures outlined in ITAR § 127.12 and reference the DDTC letter and the DTCC case number therein. This is referred to as a “Directed Disclosure.”

Q: I believe I may have violated the AECA or the ITAR. Am I required to disclose the violation to DDTC?

A: The ITAR mandates disclosures of certain types of violations. In particular, disclosures are required in certain cases involving (1) countries listed in ITAR § 126.1 (see ITAR §§ 126.1(e)(2), 126.16(h)(8), and 126.17(h)(8)), and (2) unreturned temporary exports of personal protective gear (see ITAR § 123.17(j)). Failure to disclose in such cases may itself constitute a violation of the ITAR.

For all other types of suspected violations, DDTC strongly encourages voluntary disclosure pursuant to ITAR § 127.12 by the party that may have committed a violation. DDTC may consider a voluntary disclosure a mitigating factor in determining the administrative penalty, if any, that should be imposed. Failure to disclose a violation may result in circumstances detrimental to U.S. national security and foreign policy interests and will be an adverse factor in determining the appropriate disposition of the violation. DDTC views voluntary disclosures as a positive step toward improving ITAR compliance.

Q: I am aware of a potential ITAR violation that I did not commit, and the ITAR does not require that I disclose the violation to DDTC. Should I submit a voluntary disclosure?

A: DDTC strongly encourages the submission of tips by any person with information about another party’s potential violation of any export control provision of the AECA, the ITAR, or any order, license, or other authorization issued by the State Department under the AECA.

DDTC encourages a party submitting a tip to provide as much detail about the potential violation as possible. The process, information, and documentation described in ITAR § 127.12 may be helpful in assembling and providing a comprehensive and actionable report. DDTC treats such tips as confidential.

If you would like to report a ITAR violation that you did not commit, you can submit a tip (and request confidentiality, if appropriate) by accessing the DDTC website “Contact Us” page at this link: https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_contact_us,” then scroll down to “Contact the DDTC Response Team,” and click the “Email” button. The subject line of your email should clearly describe the submission as a notification to DDTC of a potential violation by a third party, rather than a voluntary disclosure. For more information, please refer to the “Report a Violation” page on DDTC’s website.

Q: How much time do I have to submit a voluntary disclosure?

A: Any person submitting a voluntary disclosure pursuant to ITAR § 127.12 should initially notify DDTC immediately after a violation is discovered and then, if warranted, conduct a thorough review of all defense trade transactions where a violation is suspected (see ITAR § 127.12(c)(2) for requirements). If submitting an initial notification, which does not contain all the information required of a full disclosure, the disclosing party has sixty (60) calendar days from the date of the initial notification to conduct a thorough review of all defense trade-related activities to submit a full disclosure.

Q: What should be included in a voluntary disclosure?

A: A detailed list of the information and documentation to include in a voluntary disclosure submission is provided in ITAR § 127.12(c)-(e). Voluntary disclosure submissions should also include: a first page with the disclosing party’s letterhead; the disclosing party’s contact information (including email address); documentation substantiating any claims made within the submission (e.g., proof of corrective actions, relevant compliance procedures in effect at the time the violation occurred, etc.); and a certification, signed by an empowered official (see ITAR § 120.67) or a senior officer, stating that all of the representations made in connection with the voluntary disclosure submission are true and correct to the best of that person’s knowledge and belief.

Moreover, if the disclosing party wishes to authorize DDTC to communicate directly with a third-party representative, such as a consultant or outside counsel, an empowered official or senior officer of the disclosing party should provide DDTC with a signed note on company letterhead identifying: (1) the name and full contact information of the third-party representative, and (2) the third-party representative’s relationship to the disclosing party. Please note that the third-party representative may not make the certification required by ITAR § 127.12(e) on behalf of the disclosing party.

For more information, please refer to the “Report a Violation” page on DDTC’s website.

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Department of Defense, Defense Security Cooperation Agency (DSCA)

DSCA Notified Congress of Potential FMS Sale To The Kingdom Of Saudi Arabia

December 1, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Kingdom of Saudi Arabia of Blanket Order Training and related equipment for an estimated cost of $500 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Kingdom of Saudi Arabia has requested to buy blanket order aviation training services for the Royal Saudi Land Forces Aviation Corps (RSLFAC) from the U.S. Army. The following non-MDE items will be included: initial through advanced rotary-wing flight and maintainer training for personnel of the (RSLFAC) under sponsorship of the U.S. Army Training and Doctrine Command (TRADOC). The training will be conducted by U.S. Army instructors on the AH-64E Apache, CH-47F Chinook, UH-72A Lakota, and UH-60L/M Black Hawk Helicopters. The estimated total cost is $500 million.

This training will be provided at various CONUS based U.S. Army training sites under sponsorship of the U.S. Army Training and Doctrine Command (TRADOC). At this time, the U.S. government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4345481/kingdom-of-saudi-arabia-blanket-order-training

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DSCA Notified Congress of Potential FMS Sale To The Kingdom Of Saudi Arabia

December 1, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Kingdom of Saudi Arabia of Cooperative Logistics Supply Support Arrangement Program, Foreign Military Sales Order II Case and related equipment for an estimated cost of $500 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Kingdom of Saudi Arabia has requested to buy a Cooperative Logistics Supply Support Arrangement (CLSSA) Foreign Military Sales Order (FMSO) II case to requisition orders for centrally managed spares and repair parts. This case supports the Royal Saudi Land Forces Aviation Corps’ UH-60A/L/M Black Hawk utility helicopters; AH-64A/D/E Apache attack helicopters; CH-47F Chinook cargo helicopters; Schweizer 333 helicopters; and Aerial Scout helicopters; and other related elements of logistics and program support. The estimated total cost is $500 million.

There are no principal contractors involved with this potential sale. At this time, the U.S. government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4345453/kingdom-of-saudi-arabia-cooperative-logistics-supply-support-arrangement-progra

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DSCA Notified Congress of Potential FMS Sale To Bahrain

December 1, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Government of Bahrain of F-16 Sustainment and related equipment for an estimated cost of $445 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.

The Government of Bahrain has requested to buy aircraft components; missile containers; radar receiver component parts; guidance and control section spares; weapons system support; ground handling equipment; and instruments and lab equipment 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 $47 million ($0 in major defense equipment), included major and minor modifications; Computer Program Identification Numbers (CPINs); aircraft maintenance support equipment; launcher spare parts and support 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; studies and surveys; transportation 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 $445 million.

The proposed sale of this equipment and support will not alter the basic military balance in the region.

The principal contractors will be General Electric Aerospace, located in Evendale, OH; and Lockheed Martin Aeronautics, located in Fort Worth, TX. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4345416/bahrain-f-16-sustainment

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DSCA Notified Congress of Potential FMS Sale To Canada

December 4, 2025: December 4, 2025 - The State Department made a determination to approve a possible Foreign Military Sale to the Government of Canada of Air Strike Weapons and related equipment for an estimated cost of $2.68 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Government of Canada has requested to buy up to seven hundred fifty (750) GBU-39 practice bombs inert with fuzes; up to one hundred (100) GBU-39 Guided Test Vehicles (GTVs); up to one hundred (100) MK-82 inert filled bombs; up to two hundred twenty (220) 2,000-lb BLU-117 General Purpose (GP) bombs; up to one hundred forty-six (146) I-2000 penetrator warheads; up to three thousand four hundred fourteen (3,414) BLU-111 500-lb GP bombs; up to three thousand one hundred eight (3,108) GBU-39 Small Diameter Bomb Increment I (SDB-I) bombs; up to five thousand three hundred thirty-two (5,352) KMU-572 Joint Direct Attack Munition (JDAM) guidance sets; up to three hundred ninety-six (396) KMU-556 JDAM guidance sets; up to one hundred forty (140) KMU-557 JDAM guidance sets; up to two thousand four (2,004) GBU-53 SDBs – Increment II (SDB-II); and up to one hundred (100) GBU-53 SDB-II GTVs. The following non-MDE items will also be included: FMU-139 fuze systems; FMU-167 Hard Target Void Sensing Fuzes (HTVSF); DSU-38 laser illuminated target detectors for GBU-54; practice bombs; ammunition tools and special equipment; major and minor modifications equipment; spare and repair parts, consumables and accessories, and repair and return support; weapons and weapon support equipment; test equipment; training aids, devices, and spare parts; classified and unclassified software and software support; classified and unclassified publications and technical documentation; U.S. Government and contractor technical, engineering, and logistics personnel services; and other related elements of logistics and program support. The estimated total cost is $2.68 billion.

The principal contractors will be The Boeing Company, located in Arlington, VA; and RTX Corporation, located in Arlington, VA. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4348692/canada-air-strike-weapons

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DSCA Notified Congress of Potential FMS Sale To South Korea

December 5, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Republic of Korea of GBU-39/B Small Diameter Bombs-Increment I (SDB-I) and related equipment for an estimated cost of $111.8 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Republic of Korea has requested to buy an additional six hundred twenty-four (624) GBU-39/B Small Diameter Bombs (SDB-I) 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 $18.8 million ($15.4 million in major defense equipment (MDE)), included three hundred eighty-seven (387) GBU-39/B SDB-Is; aircraft components, spares, and accessories; explosive charges, devices, propellants, and components; spare parts, consumables and accessories, and repair and return 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 $111.8 million.

The principal contractor will be The Boeing Corporation, located in Arlington, VA. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4351321/republic-of-korea-gbu-39b-small-diameter-bombs-increment-i-sdb-i

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DSCA Notified Congress of Potential FMS Sale To Italy

December 5, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Government of Italy of Joint Air-to-Surface Standoff Missiles with Extended Range and related equipment for an estimated cost of $301 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Government of Italy has requested to buy one hundred (100) AGM-158B/B-2 Joint Air-to-Surface Standoff Missiles with Extended Range (JASSM-ER). The following non-MDE items will also be included: JASSM classified test equipment and containers; KGV-135A encryption devices; spare and repair parts, consumables and accessories, and repair and return support; weapon system support and software; classified and unclassified software; classified and unclassified publications and technical documentation; transportation support; site 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 $301 million.

The principal contractor will be Lockheed Martin, located in Orlando, FL. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4351311/italy-joint-air-to-surface-standoff-missiles-with-extended-range

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DSCA Notified Congress of Potential FMS Sale To Denmark

December 5, 2025: The State Department made a determination approving a possible Foreign Military Sale to the Government of Denmark of AIM-120C-8 Advanced Medium Range Air-to-Air Missiles and related equipment for an estimated cost of $730 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Government of Denmark has requested to buy two hundred (200) AIM-120C-8 Advanced Medium Range Air-to-Air Missiles (AMRAAM) and three (3) AIM-120-C8 AMRAAM guidance sections. The following non-major defense equipment items will also be included: AMRAAM control sections, containers, and support equipment; spare parts, consumables and accessories, and repair and return support; weapons software and support equipment; classified and unclassified software delivery and support; classified and unclassified publications and technical documentation; transportation 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 $730 million.

The principal contractor will be RTX Corporation, located in Arlington, VA. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4351295/denmark-aim-120c-8-advanced-medium-range-air-to-air-missiles

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DSCA Notified Congress of Potential FMS Sale To Denmark

December 5, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Government of Denmark of Integrated Battle Command System with Indirect Fire Protection Capability and related equipment for an estimated cost of $3.0 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Government of Denmark has requested to buy twenty-four (24) All Up Round Magazine (AUR-M); eight (8) Indirect Fire Protection Capability Increment 2 launchers; two (2) Sentinel A4 radars and Integrated Battle Command System (IBCS); two (2) IBCS Engagement Operations Centers; two (2) IBCS Integrated Collaborative Environments; and six (6) IBCS Integrated Fire Control Network relays. The following non-Major Defense Equipment items will also be included: reload vehicles; communications equipment, including, but not limited to, AN/PSN-13A Defense Advanced Global Positioning System receivers, AN/PYQ-10A Simple Key Loaders, AN/VRC-92F radio sets, RT-1523F receiver-transmitters, AN/TPX-61 interrogator set, AN/TPX-57A(V)1 Identification Friend or Foe (IFF) devices, KG-250X Inline Network Encryptors, and KIV-77 encryptors; tools and test equipment; support equipment; generators; publications and technical documentation; training equipment, including the Air Defense Reconfigurable Trainer; spare and repair parts; personnel training; Technical Assistance Field Team support; U.S. Government and contractor technical, engineering, and logistics support services; Systems Integration and Checkout; field office support; and other related elements of logistics and program support. The estimated total program cost is
$3.0 billion.

The principal contractors will be RTX Corporation, located in Arlington, VA; Lockheed-Martin, located in Syracuse, NY; Leidos Inc., located in Reston, VA; and Northrop Grumman, located in Falls Church, VA. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4351038/denmark-integrated-battle-command-system-with-indirect-fire-protection-capabili

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DSCA Notified Congress of Potential FMS Sale To Lebanon

December 5, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Government of Lebanon of M1085A2 and M1078A2 Medium Tactical Vehicles and related equipment for an estimated cost of $90.5 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Government of Lebanon has requested to buy 5-ton M1085A2 Medium Tactical Vehicles (MTVs) without winch; 2.5-ton M1078A2 MTVs without winch; spare and repair parts; publications and technical documentation; personnel training and training equipment; technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $90.5 million.

The principal contractor will be Oshkosh Defense, located in Oshkosh, WI. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4350902/lebanon-m1085a2-and-m1078a2-medium-tactical-vehicles

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DSCA Notified Congress of Potential FMS Sale To Belgium

December 8, 2025: The State Department made a determination approving a possible Foreign Military Sale to the Government of Belgium of Hellfire missiles and related equipment for an estimated cost of up to $79 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Government of Belgium has requested to buy up to two hundred forty (240) Hellfire missiles (AGM-114R2). The following non-MDE items will also be included: U.S. Government and contractor engineering, technical, and logistics support services; support equipment; communications and training equipment; ammunition, spare parts, consumables, accessories, and repair and return support; facility design; classified and unclassified publications; technical documentation; personnel training and training equipment; studies and surveys; and other related elements of logistics and program support. The estimated total cost is $79 million.

The principal contractor will be Lockheed Martin Corporation, located in Troy, AL. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4354471/belgium-hellfire-missiles

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DSCA Notified Congress of Potential FMS Sale To Lebanon

December 16, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Government of Lebanon of M1151A1 High Mobility Multi-Purpose Wheeled Vehicles and related equipment for an estimated cost of $34.5 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Government of Lebanon has requested to buy an additional ninety (90) M1151A1 High Mobility Multi-Purpose Wheeled Vehicles (HMMWVs) 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 $12.26 million ($10.85 million in MDE), included fifty M1151A1 HMMWVs. This notification is for a combined total of one hundred forty HMMWVs. The following non-MDE items will also be included: RF-7850M-HH multiband handheld radio; Global Positioning System receiver; Quicklook electronic counter-countermeasures waveform; spare parts, repair parts, publications and technical documentation; 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 $34.5 million.

The principal contractor will be AM General, located in South Bend, IN. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4361462/lebanon-m1151a1-high-mobility-multi-purpose-wheeled-vehicles

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DSCA Notified Congress of Potential FMS Sale To Japan

December 16, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Government of Japan for Aegis Class Destroyer Support and related equipment for an estimated cost of $100.2 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Government of Japan has requested to buy follow-on technical support of Aegis class destroyers, including Combat Systems Sea Qualification Trials (CSSQT); test and evaluation services; sustainment support and services; Aegis computer software updates; systems integration and testing, in-country and on-site engineering support; all necessary emergent engineering and technical support services; familiarization, operational support; system overhauls; system upgrades; on-the-job practical operations and maintenance; combat systems integration; development, testing, and installation of program patches; adaptation data and annual service agreements; fielding technical inquiries by the purchaser; operational integration and maintenance support; field service engineering; problem investigation; technical assistance; support solutions to technical problems arising from post-production; testing capabilities; supporting U.S. Government contractors and technical engineers; and other related elements of logistics and program support. The estimated total cost is $100.2 million.

The principal contractor will be Lockheed Martin Corporation, located in Moorestown, NJ. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4361445/japan-aegis-class-destroyer-support

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DSCA Notified Congress of Potential FMS Sale To Taiwan

December 17, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Taipei Economic and Cultural Representative Office in the United States (TECRO) of ALTIUS-700M and ALTIUS-600 Systems and related equipment for an estimated cost of $1.1 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

TECRO has requested to buy the following non-MDE items: ALTIUS-700M system loitering munitions integrated with full-motion video and an infrared gimbal seeker/tracker as well as assured position, navigation, timing, and resilient communications systems, and an integrated warhead assembly with energetics and canisters; inert 700M systems for training use only; ALTIUS-600 intelligence, surveillance, and reconnaissance systems integrated with command and control radio, multi-constellation Global Navigation Satellite System module, electro-optical/long-wave infrared camera gimbal, and canister launchers; associated support; solid metal training rounds; spares; ALTIUS trailers; ground control systems; battery chargers; operator and maintenance training; operator, maintenance, and training manuals; technical manuals; maintenance tool kits and test sets; logistics and fielding support; testing support; technical assistance including engineering services; program management; transportation; site surveys; facility, logistics, and maintenance evaluations; quality assurance and de-processing team support; field service support; and other related elements of logistics and program support. The total estimated cost is $1.1 billion.

The principal contractor(s) will be selected through competitive procurements conducted by the U.S. Government in accordance with the Federal Acquisition Regulation. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4363162/taipei-economic-and-cultural-representative-office-in-the-united-states-altius

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DSCA Notified Congress of Potential FMS Sale To Taiwan

December 17, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Taipei Economic and Cultural Representative Office in the United States (TECRO) of Harpoon Missile Repair Follow-on Support and related equipment for an estimated cost of $91.4 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

TECRO has requested to buy Harpoon radar seekers; return, repair and reshipment (RRR) of Naval Harpoon missiles; component parts and support equipment (SE); spare containers; personnel training and training equipment (both classified and unclassified); publications and technical documentation; U.S. Government and contractor technical support services; and other related elements of logistical and program support. The estimated total cost is $91.4 million.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4363138/taipei-economic-and-cultural-representative-office-in-the-united-states-harpoon

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DSCA Notified Congress of Potential FMS Sale To Taiwan

December 17, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Taipei Economic and Cultural Representative Office in the United States (TECRO) of Javelin Missile System and related equipment for an estimated cost of $375 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

TECRO has requested to buy one thousand and fifty (1,050) Javelin FGM-148F missiles; ten (10) Javelin FGM-148F fly-to-buy lot acceptance missiles; and seventy (70) Javelin Lightweight Command Launch Units (LwCLU). The following non-MDE items will also be included: Javelin LwCLU basic skills trainers; missile simulation rounds; battery coolant units; interactive electronic technical manuals; Javelin operator manuals; lifecycle support; physical security inspection; spare parts; system integration and check out; technical assistance; tool kits; training; and other elements of logistics and program support. The estimated total cost is $375 million.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4363124/taipei-economic-and-cultural-representative-office-in-the-united-states-javelin

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DSCA Notified Congress of Potential FMS Sale To Taiwan

December 17, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Taipei Economic and Cultural Representative Office in the United States (TECRO) of Tube-launched, optically tracked, Wire-guided missile system and related equipment for an estimated cost of $353 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

TECRO has requested to buy one thousand five hundred forty-five (1,545) tube-launched, optically tracked, wire-guided (TOW) 2B BGM-71F-7-RF missiles; fourteen (14) TOW 2B BGM-71F-7-RF fly-to-buy lot acceptance missiles; and twenty-four (24) Improved Target Acquisition Systems. The following non-MDE items will also be included: lithium-Ion battery box; missile simulation rounds; ITAS High Mobility Multipurpose Wheeled Vehicle (HMMWV) mounting kits; engineering and logistics support services; technical assistance; training; and other related elements of logistics and program support. The estimated total cost is $353 million.

The principal contractor will be selected through competitive procurements conducted by the U.S. Government in accordance with the Federal Acquisition Regulation. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4363101/taipei-economic-and-cultural-representative-office-in-the-united-states-tube-la

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DSCA Notified Congress of Potential FMS Sale To Taiwan

December 17, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Taipei Economic and Cultural Representative Office in the United States (TECRO) of High Mobility Artillery Rocket Systems and related equipment for an estimated cost of $4.05 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

TECRO has requested to buy eighty-two (82) M142 High Mobility Artillery Rocket Systems (HIMARS); four hundred twenty (420) M57 Army Tactical Missile System (ATACMS); seven hundred fifty-six (756) M31A2 Guided Multiple Launch Rocket System-Unitary pods (GMLRS-U); four hundred forty-seven (447) M30A2 Guided Multiple Launch Rocket System-Alternative Warhead pods (GMLRS-AW); thirty-nine (39) M1152A1 High Mobility Multipurpose Wheeled Vehicles (HMMWV); forty-five (45) International Field Artillery Tactical Data Systems (IFATDS). The following non-MDE items will also be included: M28A2 Low Cost Reduced Range Practice Rocket pods (LCRRPR); M249 machine gun; 5.56mm; M2A1 machine gun .50 CAL; M1084A2 truck, cargo, Family of Medium Tactical Vehicles (FMTV); Resupply Vehicles (RSV); M1089A2 truck, wrecker, FMTV, cargo, FMTV, RSV; M1095 Trailer, cargo, FMTV 5 Ton; Single Channel Ground and Airborne Radio System (SINCGRAS) Core Communication Management System (CCMS) in support of AN/VRC-90E and AN/VRC-92E; frequency-hopping radios; tool kits; test equipment; support equipment; technical documentation; spare parts; training; U.S. Government and contractor technical support; engineering and logistics support services; field office support; and elements of logistics/program support. The estimated total cost is $4.05 billion.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4363081/taipei-economic-and-cultural-representative-office-in-the-united-states-high-mo

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DSCA Notified Congress of Potential FMS Sale To Taiwan

December 17, 2025: The State Department made a determination approving a possible Foreign Military Sale to the Taipei Economic and Cultural Representative Office in the United States (TECRO) of M107A7 Self-Propelled Howitzers and related equipment for an estimated cost of $4.03 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

TECRO has requested to buy sixty (60) M109A7 Self-Propelled Howitzers (SPH); sixty (60) M992A3 Carrier Ammunition Tracked (CAT) Vehicles; thirteen (13) M88A2 Recovery Vehicles (RV); four thousand and eighty (4,080) Precision Guidance Kits (PGK); and forty-two (42) International Field Artillery Tactical Data Systems (IFATDS). The following non-MDE items will also be included: M2A1 Machine Guns; M2A1 Spare barrels; Vehicle Internal Communication Systems training; Simple Key Loaders (SKLs); Defense Advanced Global Positioning System (GPS) Receiver (DAGR); M795 High Explosive 155mm projectiles; primers; fuzes; propellant charges; technical assistance; accessories; technical data; spare parts; new equipment training; contractor and United States Government services; tool kits; technical manuals; training devices; and other related elements of logistics and program support. The estimated total cost is $4.03 billion.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4363063/taipei-economic-and-cultural-representative-office-in-the-united-states-m109a7

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DSCA Notified Congress of Potential FMS Sale To Taiwan

December 17, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Taipei Economic and Cultural Representative Office in the United States (TECRO) of AH-1W Helicopter Spare and Repair Parts and related equipment for an estimated cost of $96 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

TECRO has requested to buy AH-1W helicopter unclassified spare and repair parts; U.S. Government technical and logistics support services; and other related elements of logistics and program support. The estimated total cost is $96 million.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4363047/taipei-economic-and-cultural-representative-office-in-the-united-states-ah-1w-h

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DSCA Notified Congress of Potential FMS Sale To Taiwan

December 17, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Taipei Economic and Cultural Representative Office in the United States (TECRO) of Tactical Mission Network Software, Equipment, and Services and related equipment for an estimated cost of $1.01 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

TECRO has requested to buy a Tactical Mission Network (TMN). The following non-MDE items will be included: unmanned aerial systems; government and commercial off-the-shelf software; communications equipment; tool kits; test equipment; support equipment; technical documentation; training; spare parts; maintenance; telecommunication hosted/managed services; system security services and engineering support; analysis services; fusion services; safety and range support; cloud engineering support and services; U.S. Government and contractor technical support; engineering and logistics support services; warranty services; Systems Integration and Checkout (SICO); field office support; and other related elements of logistics and program support. The estimated total cost is $1.01 billion.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4363006/taipei-economic-and-cultural-representative-office-in-the-united-states-tactica

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DSCA Notified Congress of Potential FMS Sale To The NATO Support And Procurement Agency

December 18, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the NATO Support and Procurement Agency of Stinger Service Life Extension Program Components, Parts, and Services and related equipment for an estimated cost of $136.1 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.

The NATO Support and Procurement Agency (NSPA) manages the Stinger Service Life Extension Program on behalf of Germany, Italy, and the Netherlands, and has requested to buy additional booster pellets; flight motors; gas generator cartridges; Stinger warheads sections; U.S. Government and contractor technical, engineering, and logistics support services; technical documentation; and other related elements of logistics and program support 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 $50.7 million, included the following non-MDE items: booster pellets; flight motors; gas generators; Stinger warheads sections; and U.S. Government and contractor engineering and technical services. The estimated total cost is $136.1 million.

The principal contractors will be PTI Technologies Inc., located in Oxnard, CA; and L3 Harris, located in Camden, AR. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4364192/nato-support-and-procurement-agency-stinger-service-life-extension-program-comp

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DSCA Notified Congress of Potential FMS Sale To Spain

December 22, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Government of Spain of F-404 Engine Fans and related equipment for an estimated cost of $200 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Government of Spain has requested to buy an additional two hundred (200) F-404 engine fans that will be added to a previous implemented case whose value was under the congressional notification threshold. The original Foreign Military Sales (FMS) case was valued at $98.80 million ($11.25 million in MDE) and included fifty (50) F-404 engine fans, associated computer power supply (CP-1325/APG-65) and receiver exciter (R-2089/APG-65) units, and associated services and equipment, spare parts, consumables, accessories, classified software delivery, and support. This notification is for a combined total of two hundred fifty (250) F-404 engine fans. The following non-MDE items will also be included: computer power supply (CP-1325/APG-65) and receiver exciter (R-2089/APG-65) units; associated services and equipment; spare parts, consumables, and accessories; repair and return support; classified software delivery and support; classified and unclassified publications; 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 $200 million.

The F-404 engine fans will be transferred from United States Navy stock. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4366877/spain-f-404-engine-fans

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DSCA Notified Congress of Potential FMS Sale To Denmark

December 22, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Government of Denmark of Advanced Medium Range Air-to-Air Missiles – Extended Range and related equipment for an estimated cost of up to $951 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Government of Denmark has requested to buy up to two hundred thirty-six (236) Advanced Medium Range Air to Air Missiles – Extended Range (AMRAAM-ER); and five (5) AIM-120-C8 guidance sections. The following non-MDE items will also be included: AMRAAM-ER load trainers, containers, 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; 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 up to $951 million.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4366864/denmark-advanced-medium-range-air-to-air-missiles-extended-range

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DSCA Notified Congress of Potential FMS Sale To Poland

December 29, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Government of Poland of Blanket Order Training and related elements of logistics and program support for an estimated cost of $200 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.

The Government of Poland has requested to buy training aids and other related elements of logistics and program support 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 $95 million ($0 in major defense equipment (MDE)), included 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. This notification is for a combined total of non-MDE training aids; 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 $200 million.

There is no principal contractor associated with this potential sale. Training will be provided by U.S. Government or contract vendors based upon requirements as they are determined. At this time, the U.S. Government is not aware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4368289/poland-blanket-order-training

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DSCA Notified Congress of Potential FMS Sale To Denmark

December 29, 2025: The State Department made a determination to approve a possible Foreign Military Sale to the Government of Denmark of Multi-Mission Maritime Patrol and Reconnaissance Aircraft P-8A with Indirect Fire Protection Capability and related equipment for an estimated cost of $1.8 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress.

The Government of Denmark has requested to buy up to three (3) P-8A Patrol Aircraft; four (4) Multifunctional Distribution System Joint Tactical Radio Systems; four (4) Guardian Laser Transmitter Assemblies for the AN/AAQ-24(V)N; four (4) system processor replacements for AN/AAQ-24(V)N with Selective Availability Anti-spoofing Modules (SAASMs); and eight (8) LN-251 with Embedded Global Positioning Systems / Inertial Navigations Systems with SAASMs. The following non-MDE items will be included: Tactical Open Mission Software; electro-optical and infrared MX-20HD systems; NexGEN Missile Warning Sensors for the AN/AAQ-24(V)N; AN/AAQ-2(V) acoustic systems; AN/APY-10 radar systems; ALQ-213 early warning management systems; A/N UPX-43 interrogators; KIV-78A cryptographic appliqués; A/N APX-123A Identification Friend or Foe transmitters; AN/ARC-210 ultra high frequency / very high frequency radios; AN/ALE-47 Countermeasures Dispenser System (CMDS) programmers; KY-100M communications security (COMSEC) devices; 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 $1.8 billion.

The principal contractor will be The Boeing Company, located in Arlington, VA. At this time, the U.S. Government is unaware of any offset agreement proposed in connection with this potential sale. Any offset agreement will be defined in negotiations.

https://www.dsca.mil/Press-Media/Major-Arms-Sales/Article-Display/Article/4368281/denmark-multi-mission-maritime-patrol-and-reconnaissance-aircraft-p-8a

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U.S. Census Bureau

How to Resolve Common AES Response Messages

December 17, 2025: When submitting your Electronic Export Information (EEI) to the Automated Export System (AES), you can receive different response messages: Fatal, Compliance, Verify, Informational and Warning. It is important that AES filers address and/or correct Response Messages as soon as they are received to comply with the Foreign Trade Regulations.

To help you take the appropriate action, here is guidance on how to address one of the most frequent Response Messages that were generated in the AES for the previous month.

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.

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

December 8, 2025: Two businessmen are now in custody for allegedly violating U.S. export control and smuggling laws. As part of the overall investigation, a Houston company and its owner also pleaded guilty to smuggling cutting-edge Artificial Intelligence (AI) technology out of the United States, and the United States has seized over $50 million in Nvidia technologies and cash.

According to court documents, Alan Hao Hsu, also known as Haochun Hsu, 43, of Missouri City, Texas, and his company, Hao Global LLC, both pleaded guilty to smuggling and unlawful export activities on Oct. 10, 2025. According to now unsealed court documents, between October 2024 and May 2025, Hsu and others knowingly exported and attempted to export at least $160 million worth of export-controlled Nvidia H100 and H200 Tensor Core graphic processing units (GPUs).

The H100 and H200 are high-speed GPUs used for AI applications and high-performance computing. They are designed to process massive amounts of data, advancing generative AI and large language models and accelerating scientific computing. These GPUs are used for both civilian and military applications.

Hsu and others falsified shipping paperwork, misclassifying the true nature of the goods and their recipients to conceal the ultimate destination of the GPUs. Hsu and Hao Global received more than $50 million in wire transfers that originated from the People’s Republic of China (PRC) to help fund the scheme. The GPUs were ultimately shipped to the PRC, Hong Kong and other destinations in violation of U.S. export laws.

At sentencing, Hsu faces up to 10 years in prison on Feb. 18, and Hao Global LLC faces a maximum penalty of twice the gross gain from the offense and a term of probation.

Also charged in relation to the scheme are two PRC natives. Benlin Yuan, 58, the chief executive officer of a Sterling, Virginia, IT services company, which is the U.S. subsidiary of a large PRC IT company based in Beijing, was arrested in Sterling, Virginia, on Nov. 28 and charged with conspiring to violation the Export Control Reform Act (ECRA) of 2018. Yuan is a Canadian citizen who resides in Mississauga, Ontario.

Fanyue Gong, also known as Tom Gong, 43, a PRC citizen who resides in Brooklyn, New York, is the owner of a New York technology company and was arrested in New York on Dec. 3. Gong was charged with conspiring to smuggle goods out of the United States.

According to charging documents, Gong and Yuan also independently conspired with employees of a Hong Kong-based logistics company and a China-based AI technology company to circumvent U.S. export controls.

If convicted, Yuan faces up to 20 years in prison for conspiring to violate ECRA and up to a $1 million fine. If convicted, Gong faces up to 10 years in prison for conspiring to smuggle goods out of the United States.

https://www.justice.gov/opa/pr/us-authorities-shut-down-major-china-linked-ai-tech-smuggling-network

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December 8, 2025: 90 Fed. Reg. 56717: On June 24, 2022, the then-Assistant Secretary of Commerce for Export Enforcement signed an order denying Siberian Airlines d/b/a S7 Airlines (“Siberian”) export privileges for a period of 180 days on the ground that issuance of the order was necessary in the public interest to prevent an imminent violation of the Regulations. The order was issued ex parte pursuant to Section 766.24(a) of the Regulations and was effective upon issuance. The temporary denial order was subsequently renewed on December 20, 2022, June 15, 2023, December 11, 2023, and December 6, 2024, respectively and were also effective upon issuance.

The Department of Commerce extended the denial order for Siberian for one year until December 8, 2026.

https://www.federalregister.gov/documents/2025/12/08/2025-22199/siberian-airlines-dba-s7-airlines-633104-russia-novosibirskaya-obl-g-ob-prospekt-mozzherina-d-10

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December 9, 2025: 90 Fed. Reg. 57026: On June 24, 2022, the then-Assistant Secretary of Commerce for Export Enforcement signed an order denying Nordwind Airlines (“Nordwind”) export privileges for a period of 180 days on the ground that issuance of the order was necessary in the public interest to prevent an imminent violation of the Regulations. The order was issued ex parte pursuant to Section 766.24(a) of the Regulations and was effective upon issuance. The temporary denial order was subsequently renewed on December 20, 2022, June 15, 2023, December 11, 2023, and December 6, 2024, respectively, and were also effective upon issuance.

The Department of Commerce extended the denial order for Nordwind for one year until December 9, 2026.

https://www.federalregister.gov/documents/2025/12/09/2025-22354/order-renewing-temporary-denial-of-export-privileges-nordwind-airlines-leningradskaya-str-building

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December 17, 2025: 90 Fed. Reg. 58544: On March 10, 2022, in the U.S. District Court for the District of Arizona, Arthur Ching-Fu Gau (“Gau”) was convicted of violating the International Emergency Economic Powers Act (50 U.S.C. 1701, et seq.) (“IEEPA”). Specifically, Gau was convicted of knowingly and willfully exporting and causing to exported from the United States to China technical data related to the electronic control unit of the legacy aircraft auxiliary power units, without having first obtaining the required license from the U.S. Department of Commerce. As a result of his conviction, Gau was sentenced him to 36 months of probation.

The U.S. Department of Commerce denied Gau's export privileges under the EAR for a period of 4 years from the date of Gau's conviction, March 10, 2026. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Gau had an interest at the time of his conviction.

https://www.federalregister.gov/documents/2025/12/17/2025-23123/in-the-matter-of-arthur-ching-fu-gau-8802-south-feliz-drive-tempe-az-85284-order-denying-export

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December 17, 2025: 90 Fed. Reg. 58548: On January 8, 2025, in the U.S. District Court for the Eastern District of New York, Nikolay Goltsev (“Goltsev”) was convicted of violating 50 U.S.C. 4819. Specifically, Goltsev was convicted of exporting and causing to be exported from the United States to Russia dual-use electronic components, items on the Commerce Control List and Common High Priority List, without having first obtained a license for such export from the U.S. Department of Commerce. Over the course of a year, Goltsev coordinated the export of over 300 shipments valued at over $7 million USD to Russian military-end users designated on BIS' Entity List and OFAC's SDN list. As a result of his conviction, Goltsev was sentenced to 40 months of imprisonment and one year of supervised release.

The U.S. Department of Commerce denied Goltsev's export privileges under the EAR for a period of 10 years from the date of Goltsev's conviction, January 8, 2035. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Goltsev had an interest at the time of his conviction.

https://www.federalregister.gov/documents/2025/12/17/2025-23122/order-denying-export-privileges

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December 17, 2025: 90 Fed. Reg. 58547: On March 13, 2025, in the U.S. District Court for the Northern District of Texas, Richard Shih (“Shih”), was convicted of violating 18 U.S.C. 371. Specifically, Shih conspired to illegally export U.S. goods from the United States to Chinese companies on the U.S. Department of Commerce's Entity List without required authorization. As a result of Shih's conviction, he was sentenced Shih to 60 months of probation.

The U.S. Department of Commerce denied Shih's export privileges under the EAR for a period of 10 years from the date of Shih's conviction, March 13, 2035. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Shih had an interest at the time of his conviction.

https://www.federalregister.gov/documents/2025/12/17/2025-23120/in-the-matter-of-richard-g-shih-26-buggy-whip-drive-rolling-hills-ca-90274-order-denying-export

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December 17, 2025: 90 Fed. Reg. 58546: On August 1, 2022, in the U.S. District Court for the Central District of California, Marco Santillan, Jr. (“Santillan, Jr.”) was convicted of violating 50 U.S.C. 4819. Specifically, Santillan, Jr. was convicted of conspiring to violate the Export Administration Regulations by conspiring to export firearms and ammunition to Mexico. As a result of his conviction, the Court sentenced Santillan, Jr. to 57 months of imprisonment and three years of supervised release.

The U.S. Department of Commerce denied Santillan, Jr.'s export privileges under the EAR for a period of 10 years from the date of Santillan, Jr.'s conviction, August 1, 2032. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Santillan, Jr. had an interest at the time of his conviction.

https://www.federalregister.gov/documents/2025/12/17/2025-23119/order-denying-export-privileges

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December 17, 2025: 90 Fed. Reg. 58549: On January 8, 2024, in the U.S. District Court for the Central District of California, Marco Antonio Santillan Valencia (“Santillan”) was convicted of violating 50 U.S.C. 4819. Specifically, Santillan was convicted of conspiring to violate the Export Administration Regulations by conspiring to export firearms and ammunition to Mexico. As a result of his conviction, he was sentenced to eight months of imprisonment and three years of supervised release.

The U.S. Department of Commerce denied Santillan's export privileges under the EAR for a period of 10 years from the date of Santillan's conviction, January 8, 2034. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Santillan had an interest at the time of his conviction.

https://www.federalregister.gov/documents/2025/12/17/2025-23118/in-the-matter-of-marco-antonio-santillan-valencia-12904-foxley-drive-whittier-ca-90602-order-denying

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December 17, 2025: 90 Fed. Reg. 58545: On October 31, 2023, in the U.S. District Court for the Southern District of Florida, Jose Raul Paredes Arispe (“Arispe”) was convicted of violating 18 U.S.C. 371 and 50 U.S.C. 4819. Specifically, Arispe was convicted of conspiring to smuggle and knowingly and willfully attempting to export and attempting to cause the export of firearms parts and firearms accessories from the U.S. to Bolivia without first having obtained the required license from the U.S. Department of Commerce. As a result of his conviction, he was sentenced 46 months of imprisonment and three years of supervised release.

The U.S. Department of Commerce denied Arispe 's export privileges under the EAR for a period of 10 years from the date of Santillan's conviction, October 31, 2033. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Arispe had an interest at the time of his conviction.

https://www.federalregister.gov/documents/2025/12/17/2025-23117/order-denying-export-privileges

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December 18, 2025: The United States collected over $53 million in settlement of a civil penalty lawsuit against Wanxiang America Corporation, a domestic importer for Wanxiang Group Corporation, a multinational conglomerate in the People’s Republic of China that manufactures and sells automotive components. The settlement marks the conclusion of nearly 10 years of contentious litigation, with the United States collecting all the lost revenue it sought and over $30 million in civil penalties.

The lawsuit brought by the United States against Wanxiang alleged that, for a period of five years, Wanxiang committed multiple violations of 19 U.S.C. § 1592 by making false statements to customs officials when importing automotive components, including tapered roller bearings and wheel hub assemblies incorporating tapered roller bearings. During that time, wheel hub assemblies were covered by a Department of Commerce antidumping duty order for tapered roller bearings from China, and except for specifically identified Chinese exporters, the China country-wide liquidation rate for goods covered by the antidumping duty order was 92.84%. Although it was aware of the antidumping duty order, Wanxiang falsely classified its imported wheel hub assemblies and failed to disclose that those importations were covered by the antidumping duty order. Wanxiang also misclassified multiple categories of automotive components, parts, and accessories under incorrect tariff provisions. These misrepresentations resulted in Wanxiang vastly underpaying the amount of customs and antidumping duties owed on its merchandise.

https://www.justice.gov/opa/pr/united-states-settles-suit-misclassification-chinese-automotive-components

Sanctions

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

December 2, 2025: The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) announced a $11,485,352 settlement with IPI Partners, LLC ("IPI") to settle its civil liability for 51 apparent violations of OFAC's sanctions against Russia. In 2017 and 2018, IPI solicited and received investments from Russian oligarch Suleiman Kerimov through a series of legal structures, and continued to maintain those investments for four years after OFAC designated Kerimov on April 6, 2018. The settlement amount reflects OFAC's determination that IPI's conduct was non-egregious and not voluntarily self-disclosed.

https://ofac.treasury.gov/recent-actions/20251202 and https://ofac.treasury.gov/media/934786/download?inline

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December 3, 2025: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned key affiliates of the designated Foreign Terrorist Organization (FTO), Tren de Aragua (TdA). Notably, this action includes the designation of Venezuelan entertainer Jimena Romina Araya Navarro (a.k.a. “Rosita”), who is part of a network of five persons affiliated with the entertainment industry that have provided material support to TdA. Rosita, for example, reportedly helped the notorious head of TdA, Hector Rusthenford Guerrero Flores (a.k.a. “Niño Guerrero”) escape from the Tocorón prison in Venezuela in 2012, and others in this network have laundered money for TdA leaders. OFAC is also sanctioned five additional key TdA affiliates and one entity located in South America.

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

Aponte Cordova, Noe Manases of Venezuela;
Araya Navarro, Jimena Romina of Venezuela and Colombia;
Escobar Cabrera, Asdrubal Rafael of Venezuela;
Espinal Quintero, Richard Jose of Venezuela;
Guerrero Palma, Cheison Royer of Chile and Venezuela;
Landaeta Hernandez, Eryk Manuel of Colombia and Venezuela; and
Sevilla Arteaga, Kenffersso Jhosue of Colombia and Venezuela.

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

Eryk Producciones SAS, of Colombia;
Global Import Solutions S.A., of Venezuela;
Maiquetia Vip Bar Restaurant of Colombia; and
Yakera Y Lane SAS of Colombia.

https://home.treasury.gov/news/press-releases/sb0327 and https://ofac.treasury.gov/recent-actions/20251203

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December 4, 2025: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed a $7,139,305 penalty on Gracetown Inc., a property management company in New York, for violating OFAC’s Russia-related sanctions and for failing to report blocked assets to OFAC. This enforcement action, which resulted in a penalty near the statutory maximum, highlights the importance of following OFAC-issued guidance and the significant consequences that can occur from failing to do so.

OFAC’s investigation revealed that between April 2018 and May 2020, Gracetown received 24 payments totaling $31,250 on behalf of a company ultimately owned by sanctioned Russian oligarch Oleg Deripaska, despite having received explicit prior notice from OFAC that direct and indirect dealings with Deripaska were prohibited. Additionally, Gracetown failed to report blocked assets in its possession or control for over 45 months.

https://home.treasury.gov/news/press-releases/sb0328 and https://ofac.treasury.gov/media/934796/download?inline and https://ofac.treasury.gov/recent-actions/20251204_33

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December 4, 2025: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 128B, "Authorizing Certain Transactions Involving Lukoil Retail Service Stations Located Outside of Russia."

Russia-related General License 128B: All transactions prohibited by Executive Order (E.O.) 14024 involving Lukoil International GmbH (LIG) or any entity in which LIG owns, directly or indirectly, a 50 percent or greater interest, including Lukoil North America LLC and Lukoil Americas Corporation, (collectively, “LIG Entities”) that are ordinarily incident and necessary to the purchase of goods and services from, or the maintenance, operation, or wind down of, physical retail service stations located outside of the Russian Federation, are authorized through 12:01 a.m. eastern daylight time, April 29, 2026.

All blocked accounts of LIG Entities may be used, debited, or credited for the transactions authorized above.

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; (3) Any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR other than the LIG Entities described above, unless separately authorized; or (4) The transfer of funds to any person or account located in the Russian Federation.

Effective December 4, 2025, General License No. 128A, dated November 14, 2025, is replaced and superseded in its entirety by this General License No. 128B.

Additionally, OFAC published one new Russia-related Frequently Asked Question, FAQ 1225.

Question 1225: What activities do Russia-related General License 128B and General License 131A authorize related to Lukoil International GmbH (LIG)?

Answer: OFAC has issued two General Licenses (GLs) relating specifically to Lukoil International GmbH (LIG) and its majority-owned subsidiaries (“LIG Entities”): GL 128B and GL 131A. The GLs are similar but have different expiration dates and terms as each serves a different purpose.

To mitigate the effects of Lukoil’s OFAC designation on retail consumers, OFAC issued on December 4, 2025 GL 128B to authorize maintenance, operation, and wind down activities for a narrow range of LIG entities, specifically Lukoil retail automobile service stations outside of the Russian Federation. This GL expires on April 29, 2026.
To enable Lukoil to divest its assets outside of Russia to non-blocked parties, OFAC issued on December 10, 2025 GL 131A to authorize, among other things, maintenance and wind down activities of all LIG Entities. This GL has a shorter duration as it expires on January 17, 2026. Please see Frequently Asked Question 1224 for additional information on authorizations regarding negotiations for the sale of LIG Entities.

GL 128B and GL 131A expressly authorize transactions undertaken in the ordinary course of business, provided that the transactions do not involve any blocked persons other than the LIG Entities described in GL 128B and GL 131A. Transactions undertaken in the ordinary course of business may involve (but are not limited to): supply of motor fuel and lubricants; lease payments; insurance payments; property maintenance and environmental services; employee payroll, benefits, severance, and reimbursements; information technology services; payments to government authorities; legal services and proceedings; payments to suppliers, landlords, lenders, and partners; the preservation and upkeep of pre-existing tangible property; and activities associated with maintaining pre-existing capital investments. Also, both GL 128B and GL 131A authorize transactions ordinarily incident and necessary to performing pre-existing agreements and conducting intracompany transfers, provided that such transactions are consistent with previously established practices and support pre-existing projects or operations, consistent with the terms of the respective authorizations.

Both GL 128B and GL 131A also authorize financial institutions, payment processors, and other entities to use, debit, and credit the accounts of the relevant LIG Entities to effectuate the respective authorizations, but both GLs are also expressly limited by the condition that no funds may be transferred to a person or account in the Russian Federation.

Non-U.S. persons generally do not risk exposure to U.S. sanctions under E.O. 14024 for engaging in transactions with blocked persons that are generally authorized for U.S. persons, including for those authorized by GL 128B and GL 131A. Similarly, non-U.S. persons may rely upon GL 128B and GL 131A regardless of whether a foreign financial institution maintains blocked accounts, provided the non-U.S. person’s activities are consistent with the terms of GL 128B and GL 131A, including the requirement that no payments may be transferred to any person or account located in the Russian Federation.

https://ofac.treasury.gov/media/934791/download?inline and https://ofac.treasury.gov/recent-actions/20251204 and https://ofac.treasury.gov/faqs/1225

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December 9, 2025: The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) announced a $1,092,000 settlement with an individual ("U.S. Person-1") to settle their civil liability for 122 apparent violations of OFAC sanctions against Russia. Between April 2018 and June 2022, U.S. Person-1 served as the fiduciary of the U.S.-based family trust of a sanctioned Russian oligarch. In that capacity, U.S. Person-1 dealt in the blocked property of, and provided prohibited services to, the oligarch. OFAC determined that U.S. Person-1's conduct was non-egregious and not voluntarily self-disclosed. The settlement amount also reflects U.S. Person-1's substantial cooperation with OFAC's investigation.

https://ofac.treasury.gov/recent-actions/20251209_33 and https://ofac.treasury.gov/media/934806/download?inline

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December 9, 2025: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on four individuals and four entities for their roles in fueling the civil war in Sudan, a conflict that has provoked the world’s worst ongoing humanitarian crisis. This transnational network—primarily composed of Colombian nationals and companies—recruits former Colombian military personnel and trains soldiers, including children, to fight for the Sudanese paramilitary group known as the Rapid Support Forces (RSF).

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

Duque Botero, Mateo Andres, of Colombia and Spain;
Munoz Ucros, Monicaof Colomibia;
Oliveros Forero, Claudia Viviana of Colombia; and
Quijano Becerra, Alvaro Andres of Colombia and the United Arab Emirates.

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

Comercializadora San Bendito S.A.S., of Colombia;
International Services Agency S.A.S. of Colombia;
Maine Global Corp S.A.S., of Colombia; and
Talent Bridge, S.A. of Panama.

https://home.treasury.gov/news/press-releases/sb0330 and https://ofac.treasury.gov/recent-actions/20251209

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December 10, 2025: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 131A, "Authorizing Certain Transactions for the Negotiation of and Entry Into Contingent Contracts for the Sale of Lukoil International GmbH and Related Maintenance Activities."

General License 131A: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the negotiation of and entry into contracts with Public Joint-Stock Company Oil Company Lukoil or any of its affiliates for the sale, disposition, or transfer of Lukoil International GmbH (“LIG”) or any entity in which LIG owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest (collectively, “LIG Entities”) are authorized through 12:01 a.m. eastern standard time, January 17, 2026, provided that the performance of any such contract is made expressly contingent upon the receipt of separate authorization from the Office of Foreign Assets Control (“contingent contracts”). Note: For purposes of this general license, the term “contingent contracts” includes executory contracts, executory pro forma invoices, agreements in principle, executory offers capable of acceptance such as bids or proposals in response to public tenders, binding memoranda of understanding, or any other similar agreement.

Except as provided below this general license, all transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the maintenance or wind down of operations, contracts, or other agreements of LIG Entities are authorized through 12:01 a.m. eastern standard time, January 17, 2026.

All blocked accounts of LIG Entities may be used, debited, or credited for the transactions authorized.

This general license does not authorize: (1) The unblocking of any property blocked pursuant to any part of 31 CFR chapter V, except as authorized above; (2) Any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR, other than blocked persons described in this general license, unless separately authorized; or (3) The transfer of funds to any person or account located in the Russian Federation.

Effective December 10, 2025, General License No. 131, dated November 14, 2025, is replaced and superseded in its entirety by this General License No. 131A.

https://ofac.treasury.gov/recent-actions/20251210 and https://ofac.treasury.gov/media/934801/download?inline

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December 11, 2025: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) targeted Nicolas Maduro’s illegitimate regime in Venezuela, sanctioned three nephews of Maduro’s wife, Cilia Flores; a Maduro-affiliated businessman; and six shipping companies operating in Venezuela’s oil sector. Additionally, OFAC identified six associated vessels that have engaged in deceptive and unsafe shipping practices and continue to provide financial resources that fuel Maduro’s corrupt narco-terrorist regime.

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

Campo Flores, Efrain Antonio of Venezuela;
Carretero Napolitano, Ramon of Panama;
Flores De Freitas, Franqui Francisco of Venezuela; and
Malpica Flores, Carlos Erik of Venezuela.

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

Arctic Voyager Incorporated of the Marshall Islands;
Full Happy Limited, of the Marshall Islands;
Myra Marine Limited, of the Marshall Islands;
Poweroy Investment Limited of the British Virgin Islands;
Ready Great Limited, of the Marshall Islands; and
Sino Marine Services Limited of the United Kingdom.

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

Constance (3E2177) Vessel Registration Identification IMO 9237773; MMSI 352002009;
Kiara M (3E2278) Vessel Registration Identification IMO 9285823; MMSI 352002348;
Lattafa (3E2298) Vessel Registration Identification IMO 9245794;
Monique (E5U5122) Vessel Registration Identification IMO 9311270; MMSI 518999141;
Tamia (VRXC8) Vessel Registration Identification IMO 9315642; MMSI 477186300; and
White Crane (HOA6213) Vessel Registration Identification IMO 9323429; MMSI 352003199.

https://home.treasury.gov/news/press-releases/sb0332 and https://ofac.treasury.gov/recent-actions/20251211

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December 15, 2025: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Belarus General License 13, "Authorizing Transactions Involving Joint Stock Company Belarusian Potash Company, Agrorozkvit LLC, and Belaruskali OAO."

Belarus General License 13: All transactions prohibited by the Belarus Sanctions Regulations, 31 CFR part 548 (BSR), involving the following entities are authorized: (1) Joint Stock Company Belarusian Potash Company; (2) Agrorozkvit LLC; (3) Belaruskali OAO; or (4) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.

This general license does not authorize: (1) The unblocking of any property blocked pursuant to any part of 31 CFR chapter V; or (2) Any transactions otherwise prohibited by the BSR, including transactions involving the property or interests in property of any person blocked pursuant to the BSR other than the blocked persons described above, unless separately authorized.

https://ofac.treasury.gov/recent-actions/20251215 and https://ofac.treasury.gov/media/934826/download?inline

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December 16, 2025: The Department of State designated Clan del Golfo as a Foreign Terrorist Organization (FTO) and a Specially Designated Global Terrorist (SDGT).

Based in Colombia, Clan del Golfo is a violent and powerful criminal organization with thousands of members. The group’s primary source of income is cocaine trafficking, which it uses to fund its violent activities. Clan del Golfo is responsible for terrorist attacks against public officials, law enforcement and military personnel, and civilians in Colombia.

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

Clan Del Golfo (A.K.A. Banda Criminal De Uraba; A.K.A. Clan Usuga; A.K.A. Gulf Clan; A.K.A. Los Autodefensas Gaitanistas De Colombia; A.K.A. Los Urabenos (Latin: Los Urabeños)), Colombia [Sdntk] [Illicit-Drugs-Eo14059]. -To- Clan Del Golfo (A.K.A. Banda Criminal De Uraba; A.K.A. Clan Usuga; A.K.A. Gulf Clan; A.K.A. Los Autodefensas Gaitanistas De Colombia; A.K.A. Los Urabenos (Latin: Los Urabeños)), Colombia; Secondary Sanctions Risk: Section 1(B) Of Executive Order 13224, As Amended By Executive Order 13886; Organization Type: Transnational Terrorist Group; Target Type Criminal Organization [SDNTK] [FTO] [SDGT] [ILLICIT-DRUGS-EO14059].

https://www.state.gov/releases/office-of-the-spokesperson/2025/12/terrorist-designations-of-clan-del-golfo/ and https://ofac.treasury.gov/recent-actions/20251216

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December 16, 2025: The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) announced a $3,103,360 settlement with Exodus Movement, Inc. ("Exodus") to settle its potential civil liability for 254 apparent violations of OFAC’s sanctions on Iran. Between October 2017 and January 2019, Exodus provided customer support services to users in Iran which in certain instances helped such users access digital asset exchanges through Exodus's wallet software. The settlement amount reflects OFAC's determination that the apparent violations were not voluntarily self-disclosed and that 12 of the 254 apparent violations were egregious.

https://ofac.treasury.gov/recent-actions/20251216_33 and https://ofac.treasury.gov/media/934836/download?inline and https://ofac.treasury.gov/media/934831/download?inline

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December 17, 2025: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the Cartel de Santa Rosa de Lima (CSRL), which derives the vast majority of its illicit revenue from fuel and oil theft in the Mexican state of Guanajuato. The violent conflict between CSRL and the notorious Mexican terrorist Cartel Jalisco Nuevo Generacion (CJNG) for control of fuel and oil in Guanajuato has made the state one of the deadliest in Mexico. CSRL’s activities also help enable a cross-border energy black market, undermine legitimate U.S. oil and natural gas companies, and deprive the Mexican government of critical revenue. OFAC also sanctioned Jose Antonio Yepez Ortiz, the leader of CSRL.

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

Yepez Ortiz, Jose Antonio of Mexico.

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

Cartel De Santa Rosa De Lima of Mexico.

https://home.treasury.gov/news/press-releases/sb0339 and https://ofac.treasury.gov/recent-actions/20251217

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December 17, 2025: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 55E, "Authorizing Certain Services Related to Sakhalin-2;" and Russia-related General License 115C, "Authorizing Certain Transactions Related to Civil Nuclear Energy."

Russia-related General License 55E: 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 18, 2026, provided that the Sakhalin-2 byproduct is solely for importation into Japan.

Except as provided above, 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 18, 2026.

Except as provided above, all transactions prohibited by the determination of January 10, 2025 made pursuant to section 1(a)(ii) of E.O. 14071 (“Prohibition on Petroleum Services”) that are related to the Sakhalin-2 project are authorized through 12:01 a.m. eastern daylight time, June 18, 2026.

This general license does not authorize:

(1) Any transactions prohibited by Directive 2 under E.O. 14024, Prohibitions Related to

Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain

Foreign Financial Institutions;

(2) Any transactions prohibited by Directive 4 under E.O. 14024, Prohibitions Related to

Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of

the Russian Federation, and the Ministry of Finance of the Russian Federation; or

(3) Any transactions otherwise prohibited by the Russian Harmful Foreign Activities

Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person

blocked pursuant to the RuHSR, other than the blocked persons described in paragraph (b),

unless separately authorized.

Effective December 17, 2025, General License No. 55D, dated June 18, 2025, is replaced and superseded in its entirety by this General License No. 55E.

Russia-related General License 115C: All transactions prohibited by Executive Order (E.O.) 14024 involving one or more of the following entities that are related to civil nuclear energy are authorized through 12:01 a.m. eastern daylight time, June 18, 2026: (1) Gazprombank Joint Stock Company; (2) State Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank; (3) Public Joint Stock Company Bank Financial Corporation Otkritie; (4) Sovcombank Open Joint Stock Company; (5) Public Joint Stock Company Sberbank of Russia; (6) VTB Bank Public Joint Stock Company; (7) Joint Stock Company Alfa-Bank; (8) Public Joint Stock Company Rosbank; (9) Bank Zenit Public Joint Stock Company; (10) Bank Saint-Petersburg Public Joint Stock Company; (11) National Clearing Center (NCC); (12) 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 (13) the Central Bank of the Russian Federation.

For the purposes of this general license, the term “related to civil nuclear energy” means transactions undertaken solely to maintain or support civil nuclear projects initiated before November 21, 2024.

Additionally, OFAC is amending eight Russia-related Frequently Asked Questions: FAQs 967, 978, 999, 1011, 1117, 1182, 1203, and 1216.

https://ofac.treasury.gov/recent-actions/20251217 and https://ofac.treasury.gov/media/934846/download?inline and https://ofac.treasury.gov/media/934851/download?inline

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December 18, 2025: OFAC issued two amended Russia-related Frequently Asked Questions, FAQ 1224 and 1225.

Question 1224: What negotiations does Russia-related General License 131A authorize, and what transaction conditions will OFAC consider when evaluating requests for further authorization to effectuate a sale of Lukoil International GmbH (LIG) assets?

Answer: On October 22, 2025, OFAC designated PJSC Lukoil (Lukoil) to increase pressure on Russia’s energy sector and degrade Russia’s ability to raise revenue for its war machine. OFAC is aware of potential efforts by Lukoil to divest its assets outside of Russia to non-blocked parties, given the impact of sanctions. To support such divestments and further cut off funding to Russia, OFAC issued Russia-related General License (GL) 131A, which authorizes negotiations and entry into contingent contracts with Lukoil for the sale of LIG or any of LIG’s majority-owned subsidiaries. Authorized activities include negotiations on terms for definitive agreements and financial, legal, or operational due diligence, including engagement of outside counsel or advisors. GL 131A expires on January 17, 2026.

GL 131A does not authorize transactions to effectuate the actual sale, disposition, or transfer of any LIG entity or asset. Any contract entered into pursuant to GL 131A must expressly be made contingent upon the receipt of a separate authorization from OFAC. The goal of OFAC’s Russia sanctions is to place pressure on Moscow to end its war.

OFAC may revoke GL 131A at any time, including if Lukoil and LIG do not appear to be engaging in good faith negotiations regarding the divestment of LIG or its assets.

Question 1225: What activities do Russia-related General License 128B and General License 131A authorize related to Lukoil International GmbH (LIG)?

Answer: OFAC has issued two General Licenses (GLs) relating specifically to Lukoil International GmbH (LIG) and its majority-owned subsidiaries (“LIG Entities”): GL 128B and GL 131A. The GLs are similar but have different expiration dates and terms as each serves a different purpose.

To mitigate the effects of Lukoil’s OFAC designation on retail consumers, OFAC issued on December 4, 2025 GL 128B to authorize maintenance, operation, and wind down activities for a narrow range of LIG entities, specifically Lukoil retail automobile service stations outside of the Russian Federation. This GL expires on April 29, 2026.

To enable Lukoil to divest its assets outside of Russia to non-blocked parties, OFAC issued on December 10, 2025 GL 131A to authorize, among other things, maintenance and wind down activities of all LIG Entities. This GL has a shorter duration as it expires on January 17, 2026. Please see Frequently Asked Question 1224 for additional information on authorizations regarding negotiations for the sale of LIG Entities.

Non-U.S. persons generally do not risk exposure to U.S. sanctions under E.O. 14024 for engaging in transactions with blocked persons that are generally authorized for U.S. persons, including for those authorized by GL 128B and GL 131A. Similarly, non-U.S. persons may rely upon GL 128B and GL 131A regardless of whether a foreign financial institution maintains blocked accounts, provided the non-U.S. person’s activities are consistent with the terms of GL 128B and GL 131A, including the requirement that no payments may be transferred to any person or account located in the Russian Federation.

https://ofac.treasury.gov/faqs/1224 and https://ofac.treasury.gov/faqs/1225 and https://ofac.treasury.gov/recent-actions/20251218_33

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December 18, 2025: Marco Rubio, Secretary of State, designated two International Criminal Court (ICC) judges, Gocha Lordkipanidze of Georgia and Erdenebalsuren Damdin of Mongolia, pursuant to Executive Order 14203, “Imposing Sanctions on the International Criminal Court.” These individuals have directly engaged in efforts by the ICC to investigate, arrest, detain, or prosecute Israeli nationals, without Israel’s consent, including voting with the majority in favor of the ICC’s ruling against Israel’s appeal on December 15.

The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued International Criminal Court-related General License 11, "Authorizing the Wind Down of Transactions Involving Certain Persons Blocked on December 18, 2025;" and Iran-related General License S, "Authorizing Limited Safety and Environmental Transactions and the Offloading of Cargo Involving Certain Persons or Vessels Blocked on December 18, 2025."

International Criminal Court-related General License 11: All transactions prohibited by the International Criminal Court-Related Sanctions Regulations (ICCSR), 31 CFR part 528, 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, January 17, 2026, provided that any payment to a blocked person is made into a blocked interest bearing account located in the United States, in accordance with the ICCSR: (1) Gocha Lordkipanidze; (2) Erdenebalsuren Damdin; 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. This general license does not authorize any transactions otherwise prohibited by the ICCSR, including transactions involving any person blocked pursuant to the ICCSR other than the blocked persons described above, unless separately authorized.

Iran-related General License S: All transactions prohibited by Executive Order (E.O.) 13902 that are ordinarily incident and necessary to one or more of the following activities involving the blocked vessels or blocked persons listed in the Annex to this general license, and any entity in which the listed 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, January 18, 2026, provided that any payment to a blocked person must be made into a blocked interest-bearing account located in the United States: (1) The safe docking and anchoring in any port, excluding ports located in Iran or the Russian Federation or Venezuela, or under the control of the Government of Iran or the Government of the Russian Federation or the Government of Venezuela, of the blocked vessels listed in the Annex to this general license (the “Blocked Vessels”); (2) The preservation of the health or safety of the crew of any of the Blocked Vessels; (3) Emergency repairs of any of the Blocked Vessels or environmental mitigation or protection activities relating to any of the Blocked Vessels; or (4) The delivery and offloading of cargo involving the Blocked Vessels, provided that the cargo is not of Iranian-origin and was loaded on or before December 18, 2025, and that the delivery and offloading of cargo does not occur at any port located in Iran or the Russian Federation or Venezuela, or under the control of the Government of Iran or the Government of the Russian Federation or the Government of Venezuela. Note: The authorization in paragraph (a) of this general license includes services such as vessel management, crewing, bunkering, piloting, registration, flagging, insurance, classification, and salvage.

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

Damdin, Erdenebalsuren of The Netherlands and Mongolia;
Lordkipanidze, Gocha of The Netherlands and Georgia; and
Sakr, Hatem Elsaid Farid Ibrahim of the United Arab Emirates and Egypt.

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

Adonis Shipping Inc, of the Marshall Islands;
Agape Shipping Inc, of the Marshall Islands;
Aleah Shipping Inc, of the British Virgin Islands;
Arihant Shipping Inc., of Panama;
Concord Shipping Inc., of the Marshall Islands;
Darya Shipping Private Limited of India;
Everest Sea Navigation SA of Liberia;
Golden Gate Ship Management of India;
Hemera Lines Inc., of the Marshall Islands;
High Seas Petroleum LLC of the United Arab Emirates;
J M A Shipping Inc., of Panama;
Kurdos Shipping Inc., of Panama;
M K A Shipping Inc., of the Marshall Islands;
Maruti Shipping Inc., of the Marshall Islands;
Phoenix Ship Management FZE of the United Arab Emirates;
Qatrat Alnada Almasi Ship Management L.L.C., of the United Arab Emirates;
Red Sea Ship Management LLC of the United Arab Emirates;
Rukbat Marine Services CO of India;
S M A Shipping Inc., of Panama;
Sinostar Marine Group Limited of the Marshall Islands.

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

Aether Sail (T8A4543) Vessel Registration Identification IMO 9277371; MMSI 511101256
Arihant (T8A3376) Vessel Registration Identification IMO 9464156; MMSI 511100268;
Auroura (3E3982) Vessel Registration Identification IMO 9262912; MMSI 352001225;
Diana (6YWV8) Vessel Registration Identification IMO 9255945; MMSI 339000161;
Flora Dolce (8PZQ8) Vessel Registration Identification IMO 9258595; MMSI 314001081;
Foshan (3E2124) Vessel Registration Identification IMO 9404572; MMSI 352001366;
Golden Eagle Vessel Registration Identification IMO 9255684; MMSI 341313001;
Hemera (T8A4764) Vessel Registration Identification IMO 9263954; MMSI 511101408;
Intan Premier (T8A5105) Vessel Registration Identification IMO 9358802; MMSI 511101645;
J M A (E5U4180) Vessel Registration Identification IMO 9246487; MMSI 518998202;
Kassia (3E2726) Vessel Registration Identification IMO 9409986; MMSI 352001708;
Khadiga (T8A4125) Vessel Registration Identification IMO 9321469; MMSI 511100904;
Kurdos (T8A5448) Vessel Registration Identification IMO 9236731; MMSI 511101920;
Kurdos II (T8A4469) Vessel Registration Identification IMO 9453729; MMSI 511101194;
Kurdos III (T8A5317) Vessel Registration Identification IMO 9380570; MMSI 511101819;
M K A (E5U4496) Vessel Registration Identification IMO 9269403; MMSI 518998516;
Majesty (E5U4288) Vessel Registration Identification IMO 9430715;
Maruti (E5U4438) Vessel Registration Identification IMO 9546710; MMSI 518998458;
Nebula Drift (T8A5231) Vessel Registration Identification IMO 9233973; MMSI 511101749;
Nomiki (3E7581) Vessel Registration Identification IMO 9242443; MMSI 352004062;
Ramya (8PZQ3) Vessel Registration Identification IMO 9363182; MMSI 314001076;
S M A (E5U3873) Vessel Registration Identification IMO 9273002; MMSI 518100962;
Sea Citrine VI (T8A4765) Vessel Registration Identification IMO 9207273; MMSI 511101409;
Sea Rock Vessel Registration Identification IMO 9140451;
Sea Wise (T8A3980) Vessel Registration Identification IMO 9224570; MMSI 511100774;
Seamull (T8A3433) Vessel Registration Identification IMO 9204776; MMSI 511100317;
Skylight (T8A4356) Vessel Registration Identification IMO 9330020; MMSI 511101102;
Tidal Rhythm (3E6978) Vessel Registration Identification IMO 9297101; MMSI 352004719; and
Voyager Haven (3E6786) Vessel Registration Identification IMO 9271896; MMSI 352004496.

https://www.state.gov/releases/office-of-the-spokesperson/2025/12/sanctioning-icc-judges-directly-engaged-in-the-illegitimate-targeting-of-israel/ and https://ofac.treasury.gov/media/934856/download?inline and https://ofac.treasury.gov/media/934861/download?inline

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December 19, 2025: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned several family members and associates of the Maduro-Flores family. This action further targets the narco-corruption structure that sustains Nicolás Maduro’s illegitimate regime, namely the familial networks of Carlos Erik Malpica Flores (Malpica Flores) and Ramon Carretero Napolitano (Ramon Carretero).

The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Venezuela-related General License 5T, "Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After February 3, 2026."

Venezuela-related General License 5T: On or after February 3, 2026, all transactions related to, the provision of financing for, and other dealings in the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond that would be prohibited by subsection l(a)(iii) of Executive Order (E.O.) 13835 of May 21, 2018, as amended by E.O. 13857 of January 25, 2019, and incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized.

This general license does not authorize any transactions or activities otherwise prohibited by the VSR, or any other part of 31 CFR chapter V. Effective December 19, 2025, General License No. 5S, dated June 20, 2025, is replaced and superseded in its entirety by this General License No. 5T.

Additionally, OFAC published an amended Venezuela-related Frequently Asked Question, FAQ 595.

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

Carretero Napolitano, Roberto of Panama;
Carretero Napolitano, Vicente Luis of Panama;
Flores De Malpica, Eloisa of Venezuela;
Hurtado Perez, Damaris del Carmen of Venezuela;
Malpica Flores, Iriamni of Venezuela;
Malpica Hurtado, Erica Patricia of Venezuela;
Malpica Torrealba, Carlos Evelio of Venezuela.

https://home.treasury.gov/news/press-releases/sb0343 and https://ofac.treasury.gov/media/934866/download?inline and https://ofac.treasury.gov/recent-actions/20251219

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December 23, 2025: The U.S. Department of State, the U.S. Department of Commerce, and the U.S. Department of the Treasury's Office of Foreign Assets Control, issued an amended Tri-Seal Advisory: Sanctions and Export Controls Relief for Syria, to reflect the repeal of the Caesar Syria Civilian Protection Act of 2019 (Caesar Act).

https://ofac.treasury.gov/media/934736/download?inline and https://ofac.treasury.gov/recent-actions/20251223

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December 30, 2025: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) targeted individuals and entities based in Venezuela and Iran, including a Venezuelan company that has contributed to Iran’s unmanned aerial vehicle (UAV) trade with Venezuela.

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

Ghaffari, Mehdi of Iran;
Qaysari, Erfan of Iran;
Rezaei, Bahram of Iran;
Rostami Sani, Mostafa of Iran;
Urdaneta Gonzalez, Jose Jesus of Venezuela; and
Zarepour Taraghi, Reza of Iran.

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

Empresa Aeronautica Nacional SA of Venezuela;
Fanavari Electro Moj Mobin Company of Iran;
Kavoshgaran Asman Moj Ghadir Company of Iran; and
Pardisan Rezvan Shargh International Private Joint Stock Company of Iran.

https://home.treasury.gov/news/press-releases/sb0347 and https://ofac.treasury.gov/recent-actions/20251230

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December 31, 2025: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned four companies for operating in Venezuela’s oil sector and identified four associated oil tankers as blocked property. These vessels, some of which are part of the shadow fleet serving Venezuela, continue to provide financial resources that fuel Maduro’s illegitimate narco-terrorist regime. Maduro’s regime increasingly depends on a shadow fleet of worldwide vessels to facilitate sanctionable activity, including sanctions evasion, and to generate revenue for its destabilizing operations. This action further signals that those involved in the Venezuelan oil trade continue to face significant sanctions risks.

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

Aries Global Investment LTD of China;
Corniola Limited of China;
Krape Myrtle CO LTD of China;
Winky International Limited of China.

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

Della (VRUB7) Vessel Registration Identification IMO 9227479; MMSI 477714500;
Nord Star (3E7463) Vessel Registration Identification IMO 9323596; MMSI 352003296;
Rosalind Vessel Registration Identification IMO 9277735; and
Valiant (VRXH3) Vessel Registration Identification IMO 9409247; MMSI 477206500.

https://home.treasury.gov/news/press-releases/sb0348 and https://ofac.treasury.gov/recent-actions/20251231

LATEST EXPORT CONTROLS AND COMPLIANCE UPDATE DECEMBER 2025 Read More »

Consultants Corner

The Framework That Now Governs Corporate Criminal Enforcement

Voluntary Self Disclosure and the Importance of Timing

Cooperation Expectations Under the Policy

Remediation and the Role of Corporate Compliance Programs

The Three Paths to Resolution

A. Declination

B. Near Miss Cases

C. Other Cases

How the Policy Changes the Enforcement Landscape

How the CEP Interacts With Export Control Enforcement

The Practical Implications for Companies

The Role of Experienced Compliance Advisors

SYNOPSIS of the New CEP

REGULATORY UPDATES

Continuation of the National Emergency With Respect to the Situation in Burma

Establishing An American First Arms Transfer Strategy

Addressing Threats to the United States by the Government of Iran

Modifying Duties To Address Threats to the United States by the Government of the Russian Federation

Continuation of the National Emergency With Respect to Ukraine

Continuation of the National Emergency With Respect to Venezuela

Continuing The Suspension Of Duty-Free De Minimis Treatment For All Countries

Ending Certain Tariff Actions

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

DDTC Name And Address Changes Posted To Website

DDTC Final Commodity Jurisdiction Determinations Posted To Website

Notifications to the Congress of Proposed Commercial Export Licenses

DDTC Frequently Asked Questions (FAQs)

Department of Defense, Defense Security Cooperation Agency (DSCA)

DCSA Notifies Congress of Potential FMS Sale to Iraq

DCSA Notifies Congress of Potential FMS Sale to Ukraine

The U.S. Department of State Notifies Congress of Potential FMS Sale to Jordan

Future Announcements Of Major Arms Sales

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

Conforming Change to the Export Administration Regulations for Cambodia

Exports of U.S.-Origin Gas and Petroleum Products to Cuba

Office of Foreign Assets Control (OFAC)

Launch of Voluntary Self-Disclosure Portal

Office of Foreign Assets Control Reporting, Procedures and Penalties Regulations Sanctions Reconsideration Portal

U.S. Census Bureau

Update to the Automated Export System Trade Interface Requirements (AESTIR) Appendix O – DDTC ITAR Codes

How to Resolve Common AES Response Messages

License Type Code Requirements

LATEST SANCTIONS FINES & PENALTIES

Fines and Penalties

See our article “BIS Settlement with Vizocom ICT Highlights Enforcement Focus on Technical Data

Transfers in Vendor Workflows” at the attached Link

Sanctions

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

The Alleged Export Conduct

Contract Context and Downstream Conduct Described by BIS

Settlement Terms

Parallel Pattern Under ITAR – The Same Operational Failure with a Different Rulebook

Why This Keeps Happening, and Why Generic Training is not Enough

Bottom Line

~SYNOPSIS~

Manufacturing and export flow

Regulatory notice and Entity List restrictions

Internal export control analysis

Classification of the equipment

Settlement terms and compliance requirements

Enforcement significance for multinational manufacturers

REGULATORY UPDATES

Prioritizing the Warfighter in Defense Contracting

Adjusting Imports of Semiconductors, Semiconductor Manufacturing Equipment, and Their Derivative Products Into the United States

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

DDTC Announces Enrollment for the 2026 DECCS User Group

Approval for Cluster Munition – Republic of Korea

60‑Day Notice of Proposed Information Collection: Request for Commodity Jurisdiction Determination

Delegation to the Under Secretary of State for Arms Control and International Security for Country Reports on Terrorism

60‑Day Notice of Proposed Information Collection: Request To Change End‑User, End‑Use and/or Destination

60‑Day Notice of Proposed Information Collection: Technology Security/Clearance Plans and Screening Records

Major Non-NATO Ally Designations

DDTC Name And Address Changes Posted To Website

DDTC Frequently Asked Questions (FAQs) Related To Registrations With The Department Of State

DECCS IT Support FAQs

Department of Defense, Defense Security Cooperation Agency (DSCA)

DSCA Notified Congress of Potential FMS Sale To Denmark

DSCA Notified Congress of Potential FMS Sale To Kuwait

DSCA Notified Congress of Potential FMS Sale To Iraq