Export Control Updates (Monthly) Archives - Page 8 of 8

MAY 2020 EXPORT CONTROL REGULATION UPDATES

May 2020

This newsletter is a listing of the latest changes in export control regulations through May 31, 2020. The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

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

REGULATORY UPDATES

The President

The President Directs Agencies To Modify Requirements Due To Effects Of COVID-19

May 19, 2020 – 85 Fed. Reg. 31353: President Trump issued Executive Order 13924, directing federal agencies to modify some of their requirements to recognize the efforts of businesses attempting to cope with federal regulatory requirements while taking action to recover from the effects of the COVID-19 pandemic. To accomplish this goal, EO 13924 directs agencies to modify some of the standards under which they operate by taking actions such as not requiring subjects of enforcement actions to bear the burden of proving compliance, providing guidance on what the law requires, granting extensions of time for compliance with agency requirements, accelerating procedures for receiving pre-enforcement rulings regarding proposed conduct, and temporarily or permanently waiving regulations and other requirements that may inhibit economic recovery.

Department of Commerce – Bureau of Industry and Security

BIS Extends Temporary General License Regarding Huawei

May 18, 2020 – 85 Fed. Reg. 29610: BIS extended through Aug. 13, 2020, the Temporary General License (TGL) authorizing certain exports, re-exports, and in-country transfers to Huawei Technologies Co. Ltd., and its 114 non-U.S. affiliates that are included on the Entity List (15 CFR Part 744, Supp. No. 4) . This 90-day extension provides an opportunity for users of Huawei devices and telecommunication providers – particularly those in rural U.S. communities – to continue operating such existing networks and devices while hastening the transition to alternative suppliers. However, in this new announcement, BIS cautioned that the activities authorized in this TGL may be revised and possibly eliminated after the end of this extension, in which case they may require license applications. BIS is in the process of reviewing the public comments it received on this topic in response to the requests for comments it issued March 12 and 27, 2020. (See March 2020 Regulatory Update.)

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BIS Amends Foreign-Produced Direct Product Rule

May 19, 2020 – 85 Fed. Reg. 29849: BIS issued an interim final rule, effective May 15, 2020, amending the EAR (Export Administration Regulations, 15 CFR Parts 730-774) foreign-produced direct product rule (General Prohibition Three, EAR Sec. 736.2(b)(3)) to expand the universe of foreign-produced items that are subject to the EAR to include items such as semiconductor designs produced by Huawei and Huawei’s affiliates on the Entity List that are the direct product of certain Commerce Control List (CCL) software and technology and, in limited cases, items such as chipsets produced from design specifications of Huawei or its affiliates that are the direct product of certain CCL semiconductor manufacturing equipment located outside the U.S., when there is knowledge that such items are destined to a designated entity on the Entity List, and when certain other conditions are satisfied.

As described in a Commerce Department press release (https://www.commerce.gov/news/press-releases/2020/05/commerce-addresses-huaweis-efforts-undermine-entity-list-restricts, May 14, 2020):

“Specifically, this targeted rule change will make the following foreign-produced items subject to the Export Administration Regulations (EAR): (i)Items, such as semiconductor designs, when produced by Huawei and its affiliates on the Entity List (e.g., HiSilicon), that are the direct product of certain U.S. Commerce Control List (CCL) software and technology; and
“Items, such as chipsets, when produced from the design specifications of Huawei or an affiliate on the Entity List (e.g., HiSilicon), that are the direct product of certain CCL semiconductor manufacturing equipment located outside the United States. Such foreign-produced items will only require a license when there is knowledge that they are destined for reexport, export from abroad, or transfer (in-country) to Huawei or any of its affiliates on the Entity List.”

In order to prevent immediate adverse economic consequences to foreign foundries that utilize U.S. semiconductor manufacturing equipment, this rule will not apply to shipments of foreign-produced items based on Huawei design specifications whose production had started prior to May 15, 2020 that are reexported, exported from a foreign country, or transferred in-country before September 14, 2020. The deadline for comments on this rule is July 14, 2020.

Department of Commerce – Census Bureau

Census Bureau Updates “How to Find Your Schedule B Number Revisited”

May 19, 2020: The Census Bureau published an updated version of “How to Find Your Schedule B Number Revisited,” an updated description of the function of Schedule B numbers and step-by-step guide to finding the right number for the user’s export. This guide is on the Census Bureau website at https://www.census.gov/newsroom/blogs/global-reach/2020/05/how_to_find_yoursch.html.

General Accounting Office

GAO Released Report - “Export Controls: State And Commerce Should Improve Guidance And Outreach To Address University-Specific Compliance Issues”

May 12, 2020: The General Accounting Office (GAO) released a report titled “Export Controls: State and Commerce Should Improve Guidance and Outreach to Address University-Specific Compliance Issues,” focused on the risk of deemed exports to foreign students and scholars. Key findings of the report include that current guidance from the Departments of State and Commerce does not adequately address issues that are more common to universities, such as fundamental research; that the Department of Defense has not consistently interpreted the export control regulations; and that while most universities in the study had robust export compliance practices in place, there were gaps in practices involving risk assessments, training, internal audits, and export compliance manuals. The full 94-page report is on the GAO website at https://www.gao.gov/assets/710/706829.pdf.

Department of State

DDTC Name And Address Changes Posted To Website

May 4 and 18, 2020: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at

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

Change in Name from Arconic Inc. to Howmet Aerospace Inc. due to corporate restructuring and spin-off;
RUAG Switzerland Ltd changed names as follows due to reorganization:

o RUAG Switzerland Ltd (also known as RUAG Schweiz AG) changed to RUAG Ltd (also known as RUAG AG), and

o RUAG Switzerland Ltd. (also known as RUAG Schweiz AG) - Space and Aerostructures division is unaffected; and

Change in Name for Elbit Systems’ Israeli wholly owned direct subsidiary, Elbit Systems Land and C4I Ltd. (ESLC), to Elbit Systems C4I and Cyber Ltd., due to corporate restructure.

Each announcement includes a link to a notice detailing the change and its effects on pending and currently approved authorizations involving the listed entity.

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DDTC Announced The Temporary Suspension Of Rules And/Or Deadlines During The SARS-COV2 (aka COVID-19) Public Health Emergency

May 1, 2020 – 85 Fed. Reg. 25287: DDTC announced the temporary suspension of several rules and/or deadlines during the SARS-COV2 public health emergency, as authorized by International Traffic in Arms Regulations (ITAR, 22 CFR Parts 120-130) Secs. 126.2 and 126.3. The suspensions include:

Effective Feb. 29, 2020, annual registrations under ITAR parts 122 and 129 as a manufacturer, exporter, and/or broker with expiration dates of Feb. 29, March 31 April 30, May 31, or June 30, 2020 are extended for two months from the original date of expiration;
Effective March 13, 2020, limitations on the duration of ITAR licenses and agreements contained in ITAR parts 120 through 130 that expire between March 13 and May 31, 2020 are suspended for six months after the original date of expiration, as long as there is no change in the scope or value of the authorization and no name /address changes are required;
Effective March 13, 2020, a contract employee who meets the requirements of ITAR Sec. 120.39(a)(2) may work at a remote work location excluding Russia or a country listed in ITAR Sec. 126.1 until July 31, 2020, unless that date is otherwise extended in writing; and
Effective March 13, 2020, a regular employee of a licensed entity who is working remotely in a country not currently authorized by a Technical Assistance Agreement (TAA), Manufacturing License Agreement (MLA), or exemption is authorized to send, receive, or access any technical data authorized for export, reexport, or retransfer to their employer via a TAA, MLA, or exemption so long as the regular employee is not located in Russia or an ITAR Sec.126.1 country until July 31, 2020, unless that date is otherwise extended in writing.

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DDTC Temporarily Reduced Registrations Fees Due To COVID-19 Public Health Emergency

May 6, 2020 – 85 Fed. Reg. 26847: In an action intended to help mitigate the economic impact of the COVID–19 public health emergency on the U.S. Defense Industrial Base and also warranted by the economic hardship caused by the pandemic, DDTC temporarily reduced registration fees referenced in ITAR Sec. 122.3 as follows:

Tier I (initial registration and those that file no licenses) and Tier II (those that file less than 10 licenses per year) registrants whose original expiration date is between May 30, 2020 and April 30, 2021: registration fee reduced to $500.
New applicants who submit their application between May 1, 2020 and April 30, 2021: registration fee reduced to $500.
All new registrants are in Tier I in their first year.
Tier I and Tier II entities after April 30, 2021: Fees revert to April 1, 2020 amounts.
Tier III registrants: No change from current fee structure.

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The Bureau of Political-Military Affairs Rescinded Its Policy Of Denial Concerning BAE Systems Saudi Arabia Limited

May 20, 2020 – 85 Fed. Reg. 30783: The Bureau of Political-Military Affairs gave notice that it has rescinded its policy of denial concerning BAE Systems Saudi Arabia Limited (BAES SAL), a subsidiary of BAE Systems plc, including BAES SAL’s divisions and business units and successor entities, based on a determination that the rescission is in the national security and foreign policy interests of the U.S. The policy of denial was announced on May 23, 2011 (76 Fed. Reg. 29814).

Department of the Treasury

OFAC Revoked Venezuela-Related General License (GL) 13E

May 12, 2020: The Office of Foreign Assets Control (OFAC) revoked and archived on its website Venezuela-related General License (GL) 13E, “Authorizing Certain Activities Involving Nynas AB,” as changes in Nynas’s ownership and control had ended the need to maintain Nynas as a blocked party under the Venezuela Sanctions Regulations (VSR, 31 CFR Part 591). Consistent with this action, OFAC also issued GL 3H ("Authorizing Transactions Related to, Provision of Financing for, and Other Dealings in Certain Bonds") and GL 9G ("Authorizing Transactions Related to Dealings in Certain Securities") to remove Nynas from the prior versions of both licenses. FAQs 661 and 662, further describing GLs 3H and 9G, are on the Treasury Department website at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#661.

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OFAC Published An FAQ About the Wind-Down Period Regarding The Sanctions Waiver Covering All Remaining Nuclear Projects In Iran That Originated With The Joint Comprehensive Plan of Action

May 27, 2020: Following an announcement by the Secretary of State that the sanctions waiver covering all remaining nuclear projects in Iran that originated with the Joint Comprehensive Plan of Action (JCPOA) would end following a final 60-day wind-down period, OFAC published an FAQ about a wind-down period ending July 27, 2020 for activities associated with the waivers. Secretary Pompeo’s announcement is on the State Department website at https://www.state.gov/keeping-the-world-safe-from-irans-nuclear-program/; the OFAC FAQ is on the Treasury Department website at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_iran.aspx#829.

LATEST SANCTIONS FINES & PENALTIES

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

Sanctions

Department of State

May 20, 2020 – 85 Fed. Reg. 30783: DDTC imposed statutory debarment on the following persons based on their convictions for violating, or conspiracy to violate, the Arms Export Control Act (AECA, 22 USC 2778 et seq.):

(1) Asad-Ghanem, Rami Najm (aka Ghanem, Rami Najm);

(2) Boyko, Gennadiy;

(3) Browning, Scott Douglas;

(4) Brunt, Paul Stuart;

(5) Chehade, Walid;

(6) Dequarto, Dominick;

(7) Diab, Hicham;

(8) El Mir, Nafez;

(9) Heubschmann, Andy Lloyd;

(10) Joseph, Junior Joel;

(11) Peterson, John James;

(12) Prezas, Julian;

(13) Rodriguez, Chris;

(14) Ruchtein, Sergio;

(15) Saiag, Allexander (aka Saiag, Alexandre);

(16) Saidi, Abdul Majid;

(17) Shapovalov, Michael (aka Mikhail Shapovalov);

(18) Sheng, Zimo;

(19) Srivaranon, Apichart;

(20) Taylor, Maurice;

(21) Tishchenko, Oleg Mikhaylovich;

(22) Zamarron-Luna, Carlos Antonio; and

(23) Zuppone, Brunella.

These persons are prohibited from participating directly or indirectly in any activities that are regulated by the ITAR for 3 years following their conviction, and, beyond that date, until they request and receive reinstatement from the State Department. During debarment, the Department may grant transaction exceptions on a case-by-case basis. The Federal Register announcement includes a description of the rules applicable to statutory debarment.

Fines and Penalties

May 6, 2020: Biomin America, Inc. of Overland Park, KS, an animal nutrition company, paid $257,862 to settle charges by OFAC that Biomin and its owned or controlled foreign entities had violated Sec. 515.201 of the Cuban Assets Control Regulations (CACR, 31 CFR Part 515) by making 30 sales of agricultural commodities produced outside the U.S. to Alfarma S.A. in Cuba without authorization from OFAC. OFAC noted that Biomin could potentially have avoided these violations by making these exports under an existing general license under CACR Sec. 515.533(a) or applying for a specific license from OFAC; however, it apparently failed to seek appropriate advice and did not have an OFAC compliance program. The sales in question had a transactional value of $17,391,950.

MAY 2020 EXPORT CONTROL REGULATION UPDATES Read More »

APRIL 2020 EXPORT CONTROL REGULATION UPDATES

April 2020

This newsletter is a listing of the latest changes in export control regulations through April 30, 2020. 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.

REGULATORY UPDATES

Canada

Canadian Government Amends The Canadian Export Control List

April 1, 2020: The Government of Canada published an Order amending the Canadian Export Control List to incorporate changes agreed by the Nuclear Suppliers Group and the Australia Group at meetings in June 2018 and the Missile Technology Control Regime and the Wassenaar Group at meetings in December 2018. The Order, which came into force on May 1, 2020, also includes additions, changes, and clarifications of other items on the Export Control List. Order SOR/2020-48 (P.C. 2020-140), is in the Canada Gazette, Part II, Vol. 154, No. 7, on the Internet at http://www.gazette.gc.ca/rp-pr/p2/2020/2020-04-01/pdf/g2-15407.pdf.

U.S. Department of Commerce – Bureau of Industry and Security

BIS Will Not Implement Or Enforce Portions Of The Transition Of USML Category I, II and III Items To The CCL Related To 3D Printed Guns

April 2, 2020 – 85 Fed. Reg. 18438: The Bureau of Industry and Security (BIS) formally notified the public that in accordance with a nationwide preliminary injunction issued in the U.S. District Court for the Western District of Washington on March 6, 2020 (see description of this injunction in March 2020 Regulatory Update), it will not implement or enforce the portion of a rule that transferred control over many firearms and related technologies controlled under U.S. Munitions List (USML, 22 CFR Sec. 121.1) Categories I, II, and III from the State Department to the Commerce Department (85 Fed. Reg. 3819, Jan. 23, 2020 – see description in January 2020 and March 2020 Regulatory Updates) “insofar as [the rule] alters the status quo restrictions on technical data and software directly related to the production of firearms or firearm parts using a 3D-printer or similar equipment.'' Accordingly, BIS stated, applications to export such items should continue to be directed to the U.S. Department of State. (See announcement to similar effect in State Department section below.)

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BIS Amends EAR To Expand Requirements On Exports To Military End Use Or Military End Users In China, Russia And Venezuela

April 28, 2020 – 85 Fed. Reg. 23459: BIS amended the Export Administration Regulations (EAR, 15 CFR Parts 730-774) to expand license requirements on exports of items intended for military end use or military end users in China, Russia, or Venezuela. Among the changes, this rule --

Broadens license requirements in EAR Sec. 744.21 to apply to military end users in China and expands the scope of items in the List of Items Subject to the Military End-Use License Requirement of §744.21 (Supplement No. 2 to Part 744);
Adopts a license review presumption of denial in Sec. 744.21(e);
Broadens the definition of “military end use” by expanding the definition of “use” to include any item that supports or contributes to the operation, installation, maintenance, repair, overhaul, refurbishing, “development,” or [emphasis added] “production” of military items;
Clarifies the controls on exports of “600 series” .y and 9x515.y Export Control Classification Numbers (ECCNs) to China, Russia, or Venezuela by relocating them from Sec. 744.21 to the License Requirements sections of each ECCN;
Designates regional stability (RS) as the reason for control of these items; and
Expands Automated Export System (AES) filing requirements for exports to China, Russia, and Venezuela.

This final rule will become effective June 29, 2020.

See FD Associates’ expanded article regarding this rule change.

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BIS Removes License Exception CIV From The EAR

April 28, 2020 – 85 Fed. Reg. 23470: BIS amended the EAR by removing EAR License Exception CIV (Civil End Users, EAR Sec. 740.5), from the EAR, which authorized exports of items on the CCL whose ECCNs identify them as “CIV-Yes” and that required a license to the ultimate destination for National Security reasons only to civil end-users in Country Group D:1. This final rule will become effective June 29, 2020.

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BIS Proposes Amendment To License Exception APR

April 28, 2020 – 85 Fed. Reg. 23496: BIS proposed to amend EAR License Exception APR (Additional Permissive Reexports, EAR Sec. 740.16) to prohibit its use for reexports of items controlled on the Commerce Control List (CCL, EAR Part 774, Supp. No. 1) for national security reasons to Country Group D:1 countries from Hong Kong and Country Group A:1 countries. This proposal is based on evidence that A:1 countries and Hong Kong may have different standards than the U.S. for approving such exports. Deadline for comments is June 29, 2020.

Department of Homeland Security – Federal Emergency Management Agency

FEMA Issues A Temporary Rule Prohibiting The Export Of Certain Personal Protective Equipment

April 10, 2020 – 85 Fed. Reg. 20195: The Federal Emergency Management Agency (FEMA) issued a temporary final rule prohibiting exports of 5 types of personal protective equipment (PPE) products needed to respond to the spread of COVID-19 without the explicit approval of FEMA. The 5 affected product types (more specifically defined in the regulation) are:

N95 Filtering Facepiece Respirators;
Other filtering facepiece respirators (e.g., those designated as N99, N100, R95, R99, R100, or P95, P99, P100);
Elastomeric, air-purifying respirators and appropriate particulate filters/cartridges;
PPE surgical masks; and
PPE gloves or surgical gloves.

Shipments of covered products will be detained to allow FEMA to determine whether to return them for domestic use, issue a rated order for them, or allow the export of part or all of the shipment. An exception in the rule applies to manufacturers whose history of foreign vs. domestic sales meets specified requirements. Violation of this rule can result in a fine of up to $10,000 and/or imprisonment for up to one year. Authorities cited for this temporary rule include the Defense Production Act of 1950, as amended, 3 Executive Orders, and a Presidential Memorandum of April 3, 2020. The rule is effective from April 7 until August 10, 2020. (See following entry regarding subsequent additional exemptions.)

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FEMA Issues Exemptions From Prohibition On The Export Of Personal Protective Equipment

April 21, 2020 – 85 Fed. Reg. 22021: FEMA issued a rule exempting the following exports from the April 10, 2020 rule controlling shipments of PPE:

Shipments to U.S. commonwealths and territories, including Guam, American Samoa, Puerto Rico, U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands (including minor outlying islands);
Exports by non-profit or non-governmental organizations solely for donation to foreign charities or governments for free distribution (not sale) at their destination(s);
Intracompany transfers by U.S. companies from domestic facilities to company-owned or -affiliated foreign facilities;
Shipments exported solely for assembly in medical kits and diagnostic testing kits destined for U.S. sale and delivery;
Sealed, sterile medical kits and diagnostic testing kits where only a portion of the kit is made up of one or more covered materials that cannot be easily removed without damaging the kits;
Declared diplomatic shipments from foreign embassies and consulates to their home countries (may be shipped via intermediaries (logistics providers) but are shipped from and consigned to foreign governments);
Shipments to overseas U.S. military addresses, foreign service posts (e.g., diplomatic post offices), and embassies;
Shipments in transit through the U.S. with a foreign shipper and consignee, including shipments temporarily entered into a warehouse or temporarily admitted to a foreign-trade zone;
Shipments for which the final destination is Canada or Mexico; and
Shipments by or on behalf of the U.S. federal government, including its military.

Some of these exemptions require special documentation, and FEMA may waive any exemption at any time.

Nuclear Regulatory Commission

Nuclear Regulatory Commission Suspends General License For Exports of Byproduct Material To Pakistan

April 21, 2020 – 85 Fed. Reg. 22181: The Nuclear Regulatory Commission (NRC) suspended the general license authority for exports of byproduct material to Pakistan that would otherwise be provided under Sec. 82 of the Atomic Energy Act of 1954, as amended and 10 CFR Sec. 110.23. Such exports will now require a specific license in accordance with 10 CFR Sec. 110.31.

Department of State

DDTC Name and Address Changes Posted To Website

April 7 and 10, 2020: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at

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

Change in Name from Firth Rixon Forgings Limited to Forged Solution Group Limited due to acquisition of Firth Rixon Forgings by Arlington Capital Partners (ACP) to operate as part of Forged Solutions Group, ACP’s aerospace forging platform; and
Change in Name from United Technologies Corporation to Raytheon Technologies Corporation and change of address due to United Technologies Corporation merger with Raytheon Company. (Also, Raytheon Company became a wholly-owned subsidiary of Raytheon Technologies Corporation.)

Each announcement includes a link to a notice detailing the change and its effects on pending and currently approved authorizations involving the listed entity.

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DDTC Publishes New And Updated FAQs

March 31 and April 3, 6, and 9, 2020: DDTC published numerous new and updated FAQs. Topics covered include use of technical data following the expiration of Technical Assistance Agreements (TAAs) and Manufacturing License Agreements (MLAs); user guides for the DECCS Registration Application; and provision of defense services prior to DDTC authorization. The public portal for DDTC FAQs is at https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_faq_landing.

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DDTC To Comply With Injunction Related To USML Category I, II and III Changes Related To 3D Printed Guns

April 2, 2020 – 85 Fed. Reg. 18445: DDTC notified the public of the March 6, 2020 preliminary injunction prohibiting implementation of the rule passed on Jan. 23, 2020 (85 Fed. Reg. 3819) that transferred jurisdiction over certain items from USML Categories I, II, and III from the State Department to the Commerce Department “insofar as it alters the status quo restrictions on technical data and software directly related to the production of firearms or firearm parts using a 3D-printer or similar equipment.'' Accordingly, the announcement stated that such items will be treated as subject to control on the USML. (See announcement to similar effect in Commerce Department section above.)

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DDTC released its Section 655 Annual Military Assistance Report for FY 2019

April 23, 2020: DDTC released its Section 655 Annual Military Assistance Report for FY 2019, showing for every country and territory the category, quantity, authorized value, and shipped value of all defense articles and services authorized. The 2019 Section 655 report is on the DDTC website at https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=3b39303bdb1414105c3070808c9619e6 (43 pages).

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DDTC Announces Changes To Several Requirements Due to COVID-19 Pandemic

April 23, 2020: In an effort to mitigate the impact of the Covid-19 pandemic, DDTC announced temporary changes to several of its requirements, including --

A two-month extension of registrations required by ITAR Parts 122 and 129 as a manufacturer, exporter, and/or broker expiring between Feb. 29 and June 30, 2020;*
An additional 30 days for responses to request-for-information letters related to voluntary and directed disclosures;
Consideration of extensions for the submission of full voluntary disclosures on a case-by-case basis;
A temporary modification in the limits on the duration of certain ITAR licenses, including a 6-month extension of expiration dates between March 13 and May 31, 2020 if there is no change in the scope, value, or addresses;*
Modification of the requirement that a regular employee (including a long-term contract worker) work at the company’s facilities and, for regular employees working remotely, authorization for certain exchanges of technical data with the employer, so long as the worker is not located in Russia or an ITAR Sec 126.1 country, terminating July 31, 2020;*
DDTC will send email scans of final action letters for General Correspondence requests submitted in writing, if email information has been provided;
DDTC will send the applicant email scans of unclassified final action letters for DSP-85s submitted in writing. (Original sealed copies of these letters will be sent to the Defense Counterintelligence and Security Agency (DSCA) through the mail.);
DDTC is re-issuing guidance for the expedited authorization of requests submitted in support of U.S. Operations (USOP) at DTCL SOP – USOPS Guidance;
Congressional Notifications of proposed direct commercial sales (DCS) and foreign military sales (FMS) will be submitted electronically; and
DDTC is accepting submissions of Foreign Military Sales (FMS) Part 130 reports by email.

*This measure became effective March 13, 2020.

See announcement on DDTC website at https://www.pmddtc.state.gov/ddtc_public and/or contact us for details about the scope of any of these changes that may affect you.

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Department of the Treasury

OFAC Issues Venezuela-related General License (GL) 13E

April 6, 2020: The Office of Foreign Assets Control (OFAC) issued Venezuela-related General License (GL) 13E, “Authorizing Certain Activities Involving Nynas AB.” GL 13E extends the expiration date of this GL to May 14, 2020 to afford additional time for a proposed corporate restructuring that could significantly change Nynas AB’s ownership and control. GL 13E is on the OFAC website at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/venezuela_gl13e.pdf.

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OFAC Raises Maximum Civil Penalties For Violations

April 9, 2020 – 85 Fed. Reg. 19884: OFAC raised the maximum civil penalties for violations of the laws and regulations it administers, due to inflation, as provided in the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended. The laws, prior amounts, and adjusted amounts include:

Law Prior Amount New Amount

International Emergency Economic Powers Act (IEEPA) $ 302,584* $ 307,922*

Trading with the Enemy Act (TWEA) $ 89,170 $ 90,743

Foreign Narcotics Kingpin Designation Act (FNKDA) $1,503,470 $1,529,991

* Or twice the amount of the underlying transaction, whichever is greater.

The new amounts took effect April 9, 2020.

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OFAC Issues List Of Boycott Countries

April 9, 2020 -- 85 Fed. Reg. 20028: The Treasury Department published its quarterly list of countries that require or may require participation in, or cooperation with, an international boycott. The list remains unchanged since it was last published. It includes Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, the United Arab Emirates (UAE), and Yemen.

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OFAC Amends The North Korea Sanctions Regulations

April 10, 2020 – 85 Fed. Reg. 20158: OFAC amended many provisions of the North Korea Sanctions Regulations (NKSR, 31 CFR part 510). The changes include incorporating blocking and correspondent account sanctions provisions; adding a new prohibition that is applicable to persons established or maintained outside the United States that are owned or controlled by a U.S. financial institution; adding exemptions relevant to newly added prohibitions; making technical and conforming edits to the definitions of ‘‘effective date,’’ ‘‘financial, material, or technological support,” and ‘‘North Korean person;’’ revising an interpretive provision about significant transactions; and amending the definition of luxury goods. These changes implement provisions in the North Korea Sanctions and Policy Enhancement Act of 2016, as amended by the Countering America's Adversaries Through Sanctions Act (CAATSA, 22 USC 9201 et seq.) and the National Defense Authorization Act for Fiscal Year 2020 (FY 2020 NDAA).

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OFAC Issued A Fact Sheet, “Provision of Humanitarian Assistance and Trade to Combat COVID-19”

April 16, 2020: OFAC issued a Fact Sheet, “Provision of Humanitarian Assistance and Trade to Combat COVID-19,” providing guidance on the most relevant exemptions, exceptions, and authorizations for humanitarian assistance and trade under the OFAC-administered Iran, Venezuela, North Korea, Syria, Cuba, and Ukraine/Russia-related sanctions programs. This country-by-country resource includes country-by-country program summaries; lists of FAQs; lists and summaries of applicable GLs, specific licensing policies, and exemptions; and citations to other useful resources. This 10-page Fact Sheet is on the OFAC website at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/covid19_factsheet_20200416.pdf.

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Contact OFAC If COVID-19 May Cause Delay In Meeting Deadlines

April 20, 2020: OFAC issued a release encouraging persons to contact OFAC as soon as practicable if they believe that the COVID-19 global pandemic might cause them to experience delays in meeting deadlines associated with regulatory requirements administered by OFAC. In the same release, OFAC also encourages persons to submit self-disclosures by email to OFACdisclosures@treasury.gov rather than through physical mail. The full release is on the OFAC website at https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20200420.aspx.

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OFAC Issues General License 8F Related To Venezuela

April 21, 2020: OFAC issued GL 8F, “Authorizing Transactions Involving Petróleos de Venezuela, S.A. (PdVSA) Necessary for the Limited Maintenance of Essential Operations in Venezuela or the Wind Down of Operations in Venezuela for Certain Entities," extending the authorization for certain limited activities until December 1, 2020. GL 8F is on the OFAC website at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/venezuela_gl8f.pdf.

APRIL 2020 EXPORT CONTROL REGULATION UPDATES Read More »

MARCH 2020 EXPORT CONTROL REGULATION UPDATES

March 2020

This newsletter is a listing of the latest changes in export control regulations through March 31, 2020. The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

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

REGULATORY UPDATES

U.S. Courts

Nationwide Injunction Preventing The Transfer Of 3D Printed Gun Technical Data And Software To The EAR

March 6, 2020: The U.S. District Court for the Western District of Washington in Seattle, WA, issued a preliminary nationwide injunction preventing the transfer from the U.S. Munitions List (USML, 22 CFR Sec. 121.1) to the Commerce Control List (CCL, EAR Part 774, Supp. No. 1) of “technical data and software directly related to the production of firearms or firearm parts using a 3D-printer or similar equipment,” which would otherwise have occurred as part of the implementation by the State Department of the rule adopted Jan. 23, 2020 (85 Fed. Reg. 4136), effective March 9, 2020, that transferred jurisdiction over many firearms and related technologies controlled under USML Categories I, II, and III from the State Department to the Commerce Department (Case No. 2:20-cv-00111-RAJ). (See more information about this transfer of jurisdiction in January 2020 Regulatory Update and in Commerce Department and State Department sections below.)

Department of Commerce – Bureau of Industry and Security

BIS Published A Notice Regarding Licensing Of 3D Printed Gun Technical Data And Software Via The ITAR

March 6, 2020: The Bureau of Industry and Security (BIS) published a notice stating that requests for licenses for the technology and software covered by the injunction described above that would otherwise be directed to the Commerce Department under the January 23 regulation should instead be directed to the Department of State. This notice is on the BIS website at https://www.bis.doc.gov/index.php/documents/about-bis/2535-notice-of-court-order-march-6-2020/file.

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BIS Extends Temporary General License Related To Huawei

March 12, 2020 -- 85 Fed. Reg. 14416: BIS extended through May 15, 2020, the temporary general license (TGL) codified at 15 CFR Part 744, Supplement No. 7, which authorizes certain exports to Huawei Technologies Co. Ltd. and 114 of its non-U.S. affiliates that are listed on the Entity List (15 CFR Part 744, Supp. No. 4). The TGL covers exports supporting certain activities that are necessary for the continued operations of existing networks and equipment as well as the support of existing mobile services, including cybersecurity research critical to maintaining the integrity and reliability of existing and fully operational networks and equipment. (See related action in next item.)

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BIS Seeks Public Comment On Whether The Huawei Temporary General License Should Be Extended Beyond May 15, 2020

March 12, 2020 -- 85 Fed. Reg. 14428 and March 27, 2020 -- 85 Fed. Reg. 17300: BIS requested comments from the public to assist the U.S. Government in evaluating whether the Huawei TGL (see item above) should be extended beyond May 15 and whether any other changes should be made in the TGL, and to identify any alternative authorization or other regulatory provisions that might more effectively accomplish the goal of the TGL, which is to allow time for users to shift to non-Huawei sources of equipment, software, and technology. Deadline for comments is April 22, 2020.

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BIS Adds 6 Individuals And 18 Corporations To The Entity List

March 16, 2020 – 85 Fed. Reg. 14794: BIS amended the EAR by adding 6 individuals and 18 corporations in China, Iran, Pakistan, Russia, and the United Arab Emirates (UAE) to the Entity List based on a determination that each of these persons had acted contrary to the national security or foreign policy interests of the U.S. by enabling or assisting Iran’s nuclear program, Pakistan’s unsafeguarded nuclear and missile programs, or Russian military modernization efforts. A license requirement with no available license exceptions will apply to exports, reexports, or in-country transfers to all these persons of all items subject to the EAR, and a license review policy of presumption of denial will apply to 20 of them. The 24 entities are:

China

Jalal Rohollahnejad, and
Wuhan IRCEN Technology;

Iran

Aref Bali Lashak,
Ali Mehdipour Omrani,
Iran Air,
Kamran Daneshjou,
Mehdi Teranchi, and
Sayyed Mohammad Mehdi Hadavi;

Pakistan

Advance Multicom,
Kepler Corporation,
National Engineering Service Trading and Consultancy Co.,
Samina Pvt. Ltd.,
SANCO Pakistan,
Skytech Global Pvt. Ltd,
SNTS Tech.,
Triton Educational Equipment & Consultancy Co., and
United Engineering;

Russia

Avilon Ltd.,
Technomar;

United Arab Emirates

Focus Middle East,
Pegasus General Trading FZC, including six aliases (Pegasus General Trading FZE, Pegasus General Trading Company, Pegasus General Trading LLC, Pegasus General, Pegasus Trading, and Pegasus),
SANCO Middle East, FZC, including one alias (SANCO ME FZC),
SANCO Middle East, LLC, including one alias (SANCO ME, LLC), and
Wellmar Technology FZE.

The rule also revised the following 5 existing entries on the Entity List:

France

Dart Aviation

Iran

Dart Aviation

Lebanon

EDO–ELEMED

Singapore

Hia Soo Gan Benson

United Kingdom

Dart Aviation

Department of Commerce – Census Bureau

Census Announces Call Centers And Email Inboxes Will Remain Open, But Access To Physical Mail Will Be Limited

March 17, 2020: The U.S. Census Bureau announced that while many of its employees are operating remotely via telework, call centers and email inboxes will remain open, but access to physical mail will be limited. Therefore, Voluntary Self-Disclosures (VSDs) or data requests should be submitted electronically. Details are on the Census Bureau website at https://www.census.gov/foreign-trade/regulations/ftrletters/index.html.

Department of State

DDTC Name and Address Changes Posted To Website

March 10, 12, and 23, 2020: 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:

Nippon Avionics Co., Ltd. changed address;
Change in Name from P3 Group Consulting Engineering S.L U. to Umlaut Consulting Engineering, S.L. due to corporate rebranding;
Change in Name from P3 Group SARL to Umlaut SARL due to corporate rebranding;
Prins Metallurgische Producten BV changed address;
Change in Name from Panalpina Inc. to DSV Air & Sea Inc. due to DSV’s acquisition of Panalpina; and
Change in Name from 99x AS to Visolit Norway AS due to 99x’s acquisition by the Visolit Group.

Each announcement includes a link to a notice detailing the change and its effects on pending and currently approved authorizations involving the listed entity.

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DDTC Advises Transition Of USML Categories I, II and III Will Proceed As Planned Except For 3D Printed Gun Technical Data And Software

March 9, 2020: DDTC posted a notice stating that the transition to the CCL of certain items in USML Categories I, II, and III will proceed as provided in the guidance it issued on January 23, 2020, with the exception of technical data and software directly related to the production of firearms and firearm parts using a 3-D printer or similar equipment, which will remain under control of the State Department pursuant to the preliminary injunction issued on March 6, 2020. (See January 2020 Regulatory Update and U.S. Courts and Commerce Department sections above). The DDTC notice is at https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_news_and_events.

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DDTC Posted Update On Status Of Operations During COVID-19 Environment

March 19, 2020: DDTC posted an update on its status of operations in view of staffing and other adjustments in the COVID-19 operational environment. Functions covered in the notice include licensing; enrollment, registration, Commodity Jurisdiction and General Correspondence requests; and submission of disclosures (DTCC-CaseStatus@state.gov) and/or related information. The notice is at https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_news_and_events.

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DDTC Announced That March 25, 2020 Was The Effective Date Of The Interim Final Encryption Rule

March 25, 2020: DDTC announced that March 25, 2020, was the effective date of the interim final “Encryption Rule,” which had been published on Dec. 26, 2019 (84 Fed. Reg. 70887) and includes significant amendments to the ITAR including a new definition of activities that are not exports, reexports, retransfers, or temporary imports. (See information in December 2019 and February 2020 Regulatory Updates.) This announcement is at https://www.pmddtc.state.gov/ddtc_public.

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DDTC Published An FAQ About The New Encryption Rule

March 27, 2020: DDTC published a new FAQ about the use of the new “Encryption Rule” to provide “access information” – information that allows access to encrypted technical data in an unencrypted form -- to foreign persons. This FAQ is at https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_faq_detail&sys_id=8b09babddbbf80d07ede365e7c96192f.

Department of the Treasury

OFAC Issued Two General Licenses Related To The Nicaragua Sanctions Regulations

March 5 and 25, 2020: The Office of Foreign Assets Control (OFAC) issued two General Licenses (GLs) under the Nicaragua Sanctions Regulations (NSR, 31 CFR Part 582) -- GL No. 1, “Official Business of the United States Government,” and GL No. 2, “Authorizing the Wind Down of Transactions Involving the Nicaraguan National Police” -- and an FAQ describing the coverage of GL 2. GL 1 is on the Treasury Department website at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/nicaragua_gl1.pdf; GL 2 is at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/nicaragua_gl2.pdf; and the FAQ is at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#827. GL 1 was subsequently replaced by GL 1A, at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/nicaragua_gl1a.pdf , and GL 2 was replaced by GL 2A , at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/nicaragua_gl2a.pdf.

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OFAC Issues Guidance On Ways To Ship Humanitarian Goods Or Assistance To the Iranian People During COVID-19 Outbreak

March 6, 2020: OFAC issued an FAQ describing several ways in which humanitarian goods or assistance can be provided to the Iranian people in response to the COVID-19 outbreak in Iran without violating U.S. sanctions. FAQ 828 is at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_iran.aspx#828.

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OFAC Removed The Terrorism Sanctions Regulations

March 10, 2020 -- 85 Fed. Reg. 13746: OFAC removed the Terrorism Sanctions Regulations (TSR, 31 CFR Part 595) from the Code of Federal Regulations (CFR) because the national emergency on which it was based was terminated by President Trump on Sep. 9, 2019.

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OFAC Issued Three Amended Venezuela General Licenses

March 12, 2020: OFAC issued three amended Venezuela-related GLs: GL 15C "Authorizing Transactions Involving Certain Banks for Certain Entities," GL 16C"Authorizing Maintenance of U.S. Person Accounts and Noncommercial, Personal Remittances involving Certain Banks," and GL 36A “Authorizing Certain Activities Necessary to the Wind Down of Transactions Involving Rosneft Trading S.A. or TNK, Trading International S.A.” These GLs are on the Treasury Department website at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/venezuela_gl15c.pdf, https://www.treasury.gov/resource-center/sanctions/Programs/Documents/venezuela_gl16c.pdf, and https://www.treasury.gov/resource-center/sanctions/Programs/Documents/venezuela_gl36a.pdf, respectively. OFAC also issued two amended FAQs relating to GL 36A, at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#817 and https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#818.

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OFAC Issued Two Amended Ukraine General Licenses

March 20, 2020: OFAC issued two amended Ukraine-related GLs related to GAZ Group: GL 13N, "Authorizing Certain Transactions Necessary to Divest or Transfer Debt, Equity, or Other Holdings in GAZ Group," and GL 15H, "Authorizing Certain Activities Necessary to Maintenance or Wind Down of Operations or Existing Contracts with GAZ Group, and Certain Automotive Safety and Environmental Activities," both of which extend expiration dates to July 22, 2020. These GLs are at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/ukraine_gl13n.pdf and https://www.treasury.gov/resource-center/sanctions/Programs/Documents/ukraine_gl15h.pdf, respectively.

LATEST SANCTIONS FINES & PENALTIES

Sanctions

Department of Commerce

March 18, 2020 – 85 Fed. Reg. 15414: The export privileges of Nordic Maritime Pte. Ltd. (Nordic) and its Chairman and Majority Shareholder, Morten N. Minnhaug, both of Singapore, were denied for 15 years in a decision by the Department of Commerce Undersecretary for Industry and Security. In this decision, the Undersecretary also affirmed findings by an Administrative Law Judge that Nordic had knowingly illegally reexported EAR-controlled seismic survey equipment to Iran and had made false and misleading statements to BIS during its investigation, and that Minnhaug had aided and abetted Nordic in violating the EAR. However, the Undersecretary remanded determination of the appropriate civil monetary penalty, which the initial decision had set at $31,425,760, to the Administrative Law Judge for reconsideration.

March 20, 2020 – 85 Fed. Reg. 16054: BIS denied the export privileges of Zimo Sheng of Changshu, China, and Milwaukee, WI until March 16, 2030, based on his conviction of violating the Arms Export Control Act (AECA, 22 USC 2778) by attempting to export the complete upper assembly for a Glock 43 pistol to China. In the criminal case, Sheng was sentenced to 40 months in prison and a special assessment of $200.

MARCH 2020 EXPORT CONTROL REGULATION UPDATES Read More »

FEBRUARY 2020 EXPORT CONTROL REGULATION UPDATES

February 2020

This newsletter is a listing of the latest changes in export control regulations through February 29, 2020. The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

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

REGULATORY UPDATES

Department of Commerce – Bureau of Industry and Security

BIS Requests Public Comment On The Impact Of The Implementation Of The Chemical Weapons Convention (CWC) On Commercial Activities Involving “Schedule 1” Chemicals

Feb. 13, 2020 – 85 Fed. Reg. 8246: The Bureau of Industry and Security (BIS) invited public comments on the impact of the implementation of the Chemical Weapons Convention (CWC) on commercial activities involving “Schedule 1” chemicals (including “Schedule 1” chemicals produced as intermediates) during calendar year 2019. The information will assist BIS in preparing a required annual certification to Congress about whether this implementation harms the legitimate commercial activities and interests of chemical, biotechnology, and pharmaceutical firms. Public comments should include both a quantitative and a qualitative assessment of the impact of the CWC on these activities.

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BIS Extends Validity Of Temporary General License (TGL) Related To Huawei

Feb. 18, 2020 – 85 Fed. Reg. 8722: BIS extended through April 1, 2020, the validity of the Temporary General License (TGL) authorizing certain exports to Huawei Technologies Co. Ltd., and 114 of its non-U.S. affiliates (collectively “Huawei”), which was codified as Supplement No. 7 to EAR Part 744 on May 20, 2019, and subsequently extended in August and November 2019. (See additional information about this TGL in November 2019 Regulatory Update.)

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BIS Posts 18 Huawei Entity List and Temporary General License FAQs

Feb. 18, 2020: BIS posted 18 “Huawei Entity List and Temporary General License FAQs” on its website at https://www.bis.doc.gov/index.php/documents/pdfs/2447-huawei-entity-listing-faqs/file. In a separate document on the same date, BIS also posted 8 “Huawei Temporary General License Extension FAQs” at https://www.bis.doc.gov/index.php/documents/pdfs/2446-huawei-entity-list-temporary-general-license-extension-faqs/file.

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BIS Amends The EAR To Tighten Rules On Russia and Yemen

Feb. 24, 2020 – 85 Fed. Reg. 10274: BIS amended the Export Administration Regulations (EAR, 15 CFR Parts 730-774) to toughen the rules for exports to Russia and Yemen by changing their designations on the Country Group chart (Supplement No. 1 to EAR Part 740) and the Commerce Country Chart (Supplement No. 1 to EAR Part 738) and by changing licensing policies and tightening end-use controls.

Specifically, on the Country Group chart Russia was removed from Country Groups A:2 (Missile Technology Control Regime) and A:4 (Nuclear Suppliers Group), which provide relatively favorable treatment for exports of covered items, and added to Country Groups of concern D:2 (Nuclear) and D:4 (Missile Technology), which subject covered items to more stringent controls. Also, on the Commerce Country Chart Russia was added to Column NP1 (Nuclear Nonproliferation), resulting in increased controls.Also, Yemen was removed from Country Group B on the Country Group Chart and added to Country Group D:1 (National Security), resulting in the loss of availability of many license exceptions.

These changes have many implications regarding license requirements, changes in licensing policy, availability of exceptions, and others. Contact us about their effect on specific contemplated exports to Russia or Yemen.

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BIS Controls Coronavirus, SARS-CoV-2

In an undated notice, BIS announced that it will continue to classify the virus causing the current outbreak of coronavirus disease, SARS-CoV-2, and its specific genetic elements as EAR99, and that therefore, an export license is generally not required for the export of this virus to most destinations. However, BIS reminded exporters that the EAR nonetheless requires a license for the export of EAR99 items to certain end-users, end-uses, and destination countries. This notice is on the BIS website at https://www.bis.doc.gov/index.php/documents/pdfs/2532-severe-acute-respiratory-syndrome-coronavirus-2-sars-cov-2-faq/file.

Department of State

DDTC Name and Address Changes Posted To Website

Feb. 5, 7, 13, 18, 20, 25, and 27, 2020: 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:

As a result of corporate rebranding, P3 entities changed names as follows:

Former Name	New Name
	P3 Group AG	umlaut AG
	P3 Engineering Holding GmbH	umlaut Engineering Holding GmbH
	P3 Engineering GmbH (DE)	umlaut Engineering GmbH
	P3 GROUP SARL (FR)	umlaut SARL
	P3 CONS ENG Pvt. Ltd. (IN)	umlaut Pvt. Ltd.
	P3 Aviation GmbH	umlaut Consulting GmbH
	P3 Communications GmbH	umlaut Communications GmbH
	P3 North America Inc.	umlaut Inc.

Change in Name from GE Aviation Systems Limited (GEASL) to Hamble Aerostructures Limited (HAL) due to corporate rebranding;
Bristow Group, Inc. changed address;
Alion Science and Technology Corporation changed address;
Change in Name from DRS Power Technology, Inc. to DRS Naval Power Systems, Inc. due to corporate reorganization;
Change in Name from Nammo Talley Inc. to Nammo Defense Systems Inc. due to corporate reorganization;
Change in Name from DSCHULNIGG GmbH & Co KG to GTML GmbH due to corporate rebranding;
Change in Name from Intermes BV to Trescal Hengelo BV due to corporate reorganization; and
Change in Name from San Swiss Arms AG to Sig Sauer AG due to corporate rebranding.

Each announcement includes a link to a notice detailing the change and its effects on pending and currently approved authorizations involving the listed entity.

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DDTC Implements DECCS

Feb. 18, 2020: DDTC announced the commencement of operations of the Defense Export Control and Compliance System (DECCS), a single, cloud-based portal that will replace the DETRA, DTRADE, EFS, ELLIE, and MARY systems. Currently the Registration, Licensing, Advisory Opinions, and Commodity Jurisdiction applications are live in DECCS. This announcement, including a user sign-up link and a link to a DECCS Enrollment User Guide, are on the DDTC website at https://www.pmddtc.state.gov/deccs.

A link to FAQs about many aspects of DECCS is at https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_faq_landing, and a DECCS Webinar for Corporate Administrators is at https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=9f80f5d0db878c147ede365e7c9619c8.

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DDTC Adds Two New FAQs On Defense Services and U.S. Persons Abroad

Feb. 19, 2020: DDTC added two new FAQs to its collection of FAQs on Defense Services and U.S. Persons Abroad, both regarding voluntary disclosure aspects of requests for authorization for defense services that the applicant is already performing overseas. These FAQs are included in a compilation of 16 FAQs on Defense Services and U.S. Persons Abroad on the DDTC website at https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=2e58f110db838c14529d368d7c96193a.

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DDTC Published A Summary Of Changes To International Traffic In Arms Regulations - Encryption Rule

Feb. 20, 2020: DDTC published a “Summary of Changes to International Traffic in Arms Regulations - Encryption Rule” clarifying the changes to the ITAR made on Dec. 26, 2019, with respect to activities that are not exports, reexports, retransfers, or temporary imports (84 Fed. Reg. 70887 – see December 2019 Regulatory Update). This 2 page document, which focuses on issues regarding encryption, is on the DDTC website at https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=dd2ecd1adbcbc8105564ff1e0f9619f2.

Department of the Treasury

OFAC Issues Mali Sanctions

Feb. 7, 2020 – 85 Fed. Reg. 7223: The Office of Foreign Assets Control (OFAC) issued the Mali Sanctions Regulations, codified as 31 CFR Part 555, to implement Executive Order 13882 of July 26, 2019, “Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Mali.”

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Treasury Publishes Lists Of Countries That Require Or May Require Participation In, Or Cooperation With, An International Boycott

Feb. 10, 2020 – 85 Fed. Reg. 7618: The Treasury Department published its quarterly list of countries that require or may require participation in, or cooperation with, an international boycott. The list remains unchanged since it was last published. It includes Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, the United Arab Emirates (UAE), and Yemen.

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OFAC Issues Venezuela-related General License (GL) 36

Feb. 18, 2020: OFAC issued Venezuela-related General License (GL) 36, “Authorizing Certain Activities Necessary to the Wind Down of Transactions Involving Rosneft Trading S.A.,” valid until May 20, 2020. At the same time, OFAC also published two FAQs regarding issues including the scope of the applicability of GL 36 to companies related to Rosneft. GL 36 is on the OFAC website at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/venezuela_gl36.pdf; FAQs 817 and 818 are at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#817.

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Feb. 19, 2020: OFAC released its Second Quarter FY2019 Quarterly Report of Licensing Activities pursuant to Section 906(b) of the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA). The report covers OFAC’s activities regarding license applications for exports of agricultural commodities, medicine, and medical devices to Iran and Sudan. The report is on the OFAC website at https://www.treasury.gov/resource-center/sanctions/Documents/2quarter2019.pdf.

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OFAC Published Two FAQs Related To The Reporting, Procedures And Penalties Regulations

Feb. 20, 2020: OFAC published two FAQs related to the Reporting, Procedures and Penalties Regulations (RPPR, 31 CFR Part 501). The FAQs relate to updated instructions and new requirements for parties filing reports on blocked property, unblocked property, or rejected transactions that were included in a June 21, 2019, amendment to the RPPR (June 21, 2019 – 84 Fed. Reg. 29055). (See June 2019 Regulatory Update.) The new FAQs are on the OFAC website at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#819.

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OFAC Issued General License 8 Authorizing Certain Humanitarian Trade Transactions Involving The Central Bank of Iran

Feb. 27, 2020: OFAC issued General License 8 “Authorizing Certain Humanitarian Trade Transactions Involving the Central Bank of Iran” under the Global Terrorism Sanctions Regulations (GTSR, 31 CFR Part 594) and the Iranian Transactions and Sanctions Regulations (ITSR, 31 CFR Part 560). GL 8 authorizes certain transactions with the Central Bank of Iran under limited, carefully specified circumstances. GL 8 is on the OFAC website at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/gtsr_gl8.pdf, and 6 related FAQs are at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_iran.aspx#821.

LATEST SANCTIONS FINES & PENALTIES

Fines and Penalties

Jan. 14, 2020: Kuwait Airways Corporation (New Jersey) (Kuwait Airways) agreed to pay a civil penalty of $700,000 (of which $100,000 shall be suspended) to settle charges by BIS of 14 violations of EAR Sec. 760.2(a) by refusing to do business with a national or resident of a boycotted country pursuant to an agreement with a request from or on behalf of a boycotting country. Specifically, the violations consisted of 14 occasions when Kuwait Airways refused to accept individuals who were holders of Israeli passports as passengers on a Kuwait Airways flight from Kennedy Airport in New York to London Heathrow Airport.

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Feb. 11, 2020: Nicholas Hovan of New York, NY; Zhenyu Wang, a/k/a “Bill Wang,” of Dallas, TX; Robert Thwaites of Dallas, TX; Nicholas James Fuchs of Dallas, TX; and Daniel Ray Lane of McKinney, TX were arrested and charged with conspiracy and violating the International Emergency Economic Powers Act (IEEPA, 50 USC Sec. 1701 -1707) based on allegations that they conspired to arrange for the purchase of oil from the Islamic Republic of Iran, in violation of the U.S. economic sanctions imposed on Iran, for sale to a refinery in China.

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Feb. 14, 2020: Wei Sun, a former engineer at Raytheon Missile Systems in Tucson, AZ, pleaded guilty to violating the Arms Export Control Act (AECA, 22 USC 2778 et seq.) and the International Traffic in Arms Regulations (ITAR, 22 CFR Parts 120-130) by carrying his company-owned laptop that included an ITAR-controlled user’s guide to a component of Raytheon’s Advanced Medium Range Air-to-Air Missile (ARAAM) as well as security software that itself was subject to the ITAR to China without the required export authorization.

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Feb. 18, 2020: Cho Yan Nathan Man, a Chinese national, was arraigned in federal court in Washington, DC on an indictment charging him with violating the AECA and the ITAR by attempting to export and/or causing the export of defense articles including enhanced night vision goggles and several types of lasers to Hong Kong without the required authorization. Man was also charged with money laundering in connection with these transactions. Man was arrested in Switzerland on June 13, 2019 and extradited to the U.S. on Feb. 14, 2020. The court ordered him to be detained pending trial.

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Feb. 24, 2020: Apichart Srivaranon, a national of Thailand, was removed to Thailand by U.S. Immigration and Customs Enforcement’s (ICE) Enforcement and Removal Operations. Srivaranon had been sentenced to 26 months in prison after pleading guilty in both Maryland and the District of Columbia to conspiring to violate the AECA and attempting to export firearms parts to Thailand. He purchased firearms parts including key components for AR-15 and M-16 military-style assault rifles on the Internet and had them sent to various co-conspirators in the U.S. who repackaged the parts, labeled and declared them on shipping documents falsely, and shipped them to Thailand via USPS and private shipping companies. He was arrested in Las Vegas, NV after flying from Thailand to attend a trade show unrelated to the charges in the case.

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Feb. 26, 2020: OFAC announced that Société Internationale de Télécommunications Aéronautiques SCRL (“SITA”) of Geneva, Switzerland, a service provider for the civilian air transportation industry, had agreed to pay $7,829,640 to settle its potential civil liability for 9,256 apparent violations of the GTSR. The violations involved the provision of services and software that were subject to U.S. jurisdiction that benefited SITA member airlines that had been designated as Global Terrorists.

FEBRUARY 2020 EXPORT CONTROL REGULATION UPDATES Read More »

JANUARY 2020 EXPORT CONTROL REGULATION UPDATES

January 2020

This newsletter is a listing of the latest changes in export control regulations through January 31, 2020. The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

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

REGULATORY UPDATES

European Union

EU Published Description of Member States’ Conformity To EU Dual-Use Export Control Regulation

Jan. 17, 2020: The European Commission published an up-to-date, country-by-country description of all measures imposed by individual Member States to conform with the European Union (EU) dual-use export control regulation, Council Regulation (EC) No 428/2009. This document is on the EU website at https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52020XC0117(02)&from=EN.

United Kingdom

UK Export Control Joint Unit Updates Export Control List

Jan. 8, 2020: The United Kingdom (UK) Export Control Joint Unit (ECJU) published an updated export control list to reflect changes made by the EU in the dual-use export control list it released in October 2019. (See October 2019 Regulatory Update.) The updated UK Consolidated List of Strategic Military and Dual-Use Items That Require Export Authorization is at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/856510/UK_strategic_export_control_lists_20191231.pdf.

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UK Published A Notice Regarding Applicability Of Export Controls During Brexit Transition Period

Jan. 29, 2020: The ECJU published a notice describing the applicability of export controls to trade with EU countries during the transition period through Dec. 31, 2020, when the UK’s departure from the EU will become complete. Current export licensing arrangements will continue to apply during the entire transition period. A link to “Notice to Exporters 2020/03: Exporting and Trading Items Subject to Strategic Controls During the Transition Period,” is at https://www.gov.uk/government/organisations/export-control-organisation.

The President

The President Imposes Additional Sanctions On Iran

Jan. 14, 2020 – 85 Fed. Reg. 2014: President Trump issued Executive Order 13902, “Imposing Sanctions With Respect to Additional Sectors of Iran,” targeting additional sources of revenue used by Iran to fund and support its nuclear and other programs. The EO authorizes sanctions against persons involved in additional sectors of the Iranian economy, including construction, mining, manufacturing, and textiles, and on foreign financial institutions that knowingly conduct or facilitate significant transactions involving those sectors of Iran’s economy or persons sanctioned under the order. (See Treasury Department section below for an FAQ about this EO.)

Department of Commerce

The Department Of Commerce Adjusts Civil Monetary Penalties For Inflation

Jan. 3, 2020 – 85 Fed. Reg. 207: The Commerce Department issued its annual rule adjusting maximum civil monetary penalties (CMPs) for inflation. Adjusted maximum CMPs for violations involving dual-use export controls include the following:

violations of the International Emergency Economic Powers Act (IEEPA, 50 USC Sec. 1705(b)) – maximum increased from $302,584 to $307,922
violations of Export Control Reform Act of 2018 (ECRA, 50 USC Sec. 4819) – maximum increased from $300,000 to $305,292
violations of 13 USC Sec. 304 (Census, Collection of Foreign Trade Statistics -- failure to file export information, delayed filings) – maximum per day increased from $1,394 to $1,419; maximum per violation increased from $13,948 to $14,194
violations of 13 USC Sec. 305 (Census, Collection of Foreign Trade Statistics – other unlawful export information activities) – maximum increased from $13,948 to $14,194.

The new maximum CMPs will apply to violations assessed after Jan. 15, 2020, including violations that occurred prior to that date.

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BIS Amends EAR On Interim Basis Assigning ECCN 0D521 To Software That Automates The Analysis Of Geospatial Imagery

Jan. 6, 2020 – 85 Fed. Reg. 459: The Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR, 15 CFR Parts 730-774) by classifying under Export Control Classification Number (ECCN) 0D521 software that is specially designed to automate the analysis of geospatial imagery and meets specified additional criteria. A license will be required for regional stability reasons for the export and reexport of these items to all destinations except Canada, and the only available License Exception (LE) will be LE GOV (EAR Sec. 740.11), covering exports, reexports, and in-country transfers made by or consigned to a USG department or agency. This control under ECCN 0D521 will apply for a maximum of one year; after that time it will expire unless it is extended while the USG submits a proposal to the Wassenaar Arrangement or it is reclassified under another ECCN. This interim final regulation became effective Jan. 6, 2020; comments will be accepted until March 6, 2020.

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BIS Amends EAR In Final Rule To Regulate Certain Firearms And Ammunition (Previously ITAR) For Export Effective March 9, 2020

Jan. 23, 2020 – 85 Fed. Reg. 4136: BIS amended the EAR to add 17 new ECCNs to the Commerce Control List (CCL, EAR Part 774, Supp. No. 1) to include certain commercially available firearms and ammunition items that have been determined no longer to require control under U.S. Munitions List (USML, 22 CFR Sec. 121.1) Categories I, II, and III, based on a thorough interagency review that concluded that they do not provide a critical military or intelligence advantage to the U.S. and, in the case of firearms, do not have an inherently military function. (See State Department section below for additional information about the changes in the USML. Also, see May 2018 Regulatory Update for information about a proposed rule on this topic.) Certain software and technology capable of producing firearms when posted on the Internet under specified circumstances is also controlled under this rule. The items removed from the USML will be classified under new 500 and 600 series controls in CCL Category 0. An authorization from BIS will be required to export or reexport any of these items to any country, including releases of related technology and software to foreign persons in the U.S. A 3-page BIS list of Myths and Facts about this transition is on the BIS website at https://www.bis.doc.gov/index.php/documents/regulations-docs/federal-register-notices/federal-register-2020/2516-cats-i-iii-myths-and-facts/file. Effective date of this final rule is March 9, 2020. Contact us for additional information about this rule and about its effect on specific CCL and USML items.

Attend FD Associates’ workshops February 11 and 25 or March 10 and 24 to learn about these changes.

Department of State

DDTC Name and Address Changes Posted To Website

Jan. 6, 9, 17, 28, and 30, 2020: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at https://www.pmddtc.state.gov/ddtc_public?id=ddtc_kb_article_page&sys_id=bd72ca0adbf8d30044f9ff621f961981:

Change in name from P3 engineering GmbH to Umlaut engineering GmbH due to corporate rebranding;
Change in name from Sogeti UK Limited to CapGemini UK due to corporate rebranding;
Change in address for Itter B.V.;
Change in name from General Dynamics European Land Systems – Santa Barbara Sistemas to Fabrica De Municiones De Granada due to acquisition of GDELS – Santa Barbara Sistemas by Fabrica De Municiones De Granada;
Change in name from Lord Corporation to Parker Hannifin Corporation due to the acquisition of Lord Corporation by Parker Hannifin;
Change in name from FERCHAU Engineering to FERCHAU France SAS due to corporate reorganization;
Change in name from Bond Offshore Helicopters Limited to Babcock Mission Critical Services Offshore Ltd. due to corporate reorganization;
Change in address for Sikorsky Aircraft Australia Limited (SAAL);
Change in address for Keysight Technologies UK Ltd; and
Change in name from Triumph Aviation Services International Ltd. to STS Aviation Services International Ltd. due to acquisition of Triumph Aviation by STS Aviation.

Each announcement includes a link to a notice detailing the change and its effects on pending and currently approved authorizations involving the listed entity.

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DDTC Posts FAQs Related To U.S. Persons Working Abroad

Jan. 6, 2020: DDTC posted one general FAQ and 14 specific FAQs providing guidance regarding provision of defense services by U.S. persons for foreign entities located outside the U.S. Among other things, the FAQs provide that the U.S. person employee of a foreign employer, as exporter of the services, is responsible for obtaining authorization from DDTC, usually by a General Correspondence authorization; confirmed that the foreign employer is not required to register with DDTC nor is the individual U.S. person; and discussed issues such as whether a foreign-origin defense article becomes subject to the International Traffic in Arms Regulations (ITAR, 22 CFR Parts 120-130) by virtue of the involvement of the U.S. employee. The general FAQ is on the DDTC website at https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_faq_detail&sys_id=6831a4fbdbca80d05564ff1e0f961996; the 14 specific FAQs are at https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_faq_cat&topic=6acdbfe8db3bc30044f9ff621f96197e&subtopic=6d00203bdbca80d05564ff1e0f9619e3#6d00203bdbca80d05564ff1e0f9619e3.

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The State Department Adjusts Civil Monetary Penalties For Inflation

Jan. 14, 2020 – 85 Fed. Reg. 2020: The State Department issued its annual rule adjusting maximum CMPs for inflation. Adjusted maximum CMPs for violations involving the ITAR are:

violations of Arms Export Control Act (AECA, 22 USC 2778 et seq.) Sec. 38(e) (ITAR Sec. 127.10(a)(1)(i)): $1,183,736
violations of AECA Sec. 39A(c) (ITAR Sec. 127.10(a)(1)(ii)): $860,683 or 5 times the amount of the prohibited payment, whichever is greater
violations of AECA Sec. 40(k) (ITAR Sec. 127.10(a)(1)(iii)): $1,024,457.

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DDTC Amends The ITAR In Final Rule Revising USML Categories I, II and III Effective March 9, 2020

Jan. 23, 2020 – 85 Fed. Reg. 3819: DDTC amended USML Categories I (Firearms, Close Assault Weapons and Combat Shotguns, to be renamed “Firearms and Related Articles’’), II (Guns and Armament), and III (Ammunition and Ordnance) to limit their scope to those articles that provide the U.S. with a critical military or intelligence advantage or, in the case of weapons, perform an inherently military function. Control over items that do not meet that standard, e.g., articles that are widely available in retail outlets in the U.S. and abroad, will be transferred to the CCL; however, all the transferred items will remain subject to export authorization requirements. and License Exception STA will not be available for them. Effective date of this final rule is March 9, 2020. (See Commerce Department section above for additional information about the changes in the CCL. Also, see May 2018 Regulatory Update for information about a proposed rule on this topic.) A DDTC Fact Sheet on these changes, including Myths and Facts, is on the DDTC website at https://www.state.gov/proposed-rules-for-oversight-of-firearms-exports-published-for-public-comment/, and DDTC transition guidance is at https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=11608c55db664c107ede365e7c96196e [5 pp.]. Contact us for additional information on this rule, and about its effect on the specific defense articles and defense services that affect you.

Department of the Treasury

OFAC Issues Amended Venezuela-Related General Licenses

Jan. 7, 17, and 21, 2020: The Office of Foreign Assets Control (OFAC) issued the following amended Venezuela-related General Licenses (GLs):

GL 6A, “Authorizing Certain Activities Necessary to the Wind Down of Operations or Existing Contracts with Globovision Tele C.A. or Globovision Tele CA, Corp." (effective through Jan. 21, 2020) (https://www.treasury.gov/resource-center/sanctions/Programs/Documents/venezuela_gl6a.pdf);
GL 8E, “Authorizing Transactions Involving Petróleos de Venezuela, S.A. (PdVSA) Necessary for Maintenance of Operations for Certain Entities in Venezuela” (effective through April 22, 2020) (https://home.treasury.gov/system/files/126/venezuela_gl8e.pdf); and
GL 20B, "Authorizing Official Activities of Certain International Organizations Involving the Government of Venezuela" (https://www.treasury.gov/resource-center/sanctions/Programs/Documents/venezuela_gl20b.pdf).

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OFAC Posts New Iran-Related FAQ

Jan. 16, 2020: OFAC posted a new Iran-related FAQ addressing whether there is a wind-down period for EO 13902 of Jan. 14, 2020, “Imposing Sanctions With Respect to Additional Sectors of Iran,” (see The President section above) at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_iran.aspx#816.

LATEST SANCTIONS FINES & PENALTIES

Sanctions

Department of Commerce

Jan. 8, 2020 – 85 Fed. Reg. 873: BIS denied the export privileges of Edgar Sanchez-Muro until June 19, 2024, based on his conviction of violating the AECA by knowingly attempting to export and exporting approximately 980 rounds of ammunition from the U.S. to Mexico without the required authorization. In the criminal case, Sanchez-Muro was sentenced to 12 months and one day in prison and a $100 special assessment.

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Jan. 8, 2020 – 85 Fed. Reg. 874: BIS denied the export privileges of Resit Tavan until Aug. 29, 2029, based on his conviction of conspiracy to violate U.S. sanctions by exporting specialized marine equipment from the U.S. to Iran without the required authorization. (See additional details in September 2019 Regulatory Update.) In the criminal case, Tavan was sentenced to 28 months in prison with credit for time served and a $100 special assessment.

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Jan. 8, 2020 – 85 Fed. Reg. 875: BIS denied the export privileges of Ruben Beltran-Ramos, a/k/a Ruben Ramos-Beltran, until Nov. 20, 2028, based on his conviction of violating the AECA by knowingly attempting to export and exporting 5,000 cartridges of ammunition from the U.S. to Mexico without the required authorization. In the criminal case, Beltran-Ramos was sentenced to 26 months in prison and a $100 special assessment.

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Jan. 24, 2020 – 85 Fed. Reg. 4271: BIS entered a 180-day Temporary Denial Order (TDO) against the following persons and businesses:

Muhammad Kamran Wali, Rawalpindi, Pakistan;
Muhammad Ahsan Wali, Mississauga, Ontario, Canada;
Haji Wali Muhammad Sheikh, Mississauga, Ontario, Canada;
Ahmed Waheed, Essex, United Kingdom;
Ashraf Khan Muhammad, Kowloon, Hong Kong;
Business World, Rawalpindi, Pakistan;
Buziness World, Mississauga, Ontario, Canada;
Business World, Kowloon, Hong Kong;
Industria Hong Kong Ltd, d/b/a Transcool Auto Air Conditioning Products, d/b/a Electro-Power Solutions, Kowloon, Hong Kong; and
Product Engineering, Rawalpindi, Punjab, Pakistan.

(See Fines and Penalties section below for indictment of 5 of these persons.)

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Jan. 24, 2020 – 85 Fed. Reg. 4276: BIS denied the export privileges of Marjan Caby of Miami, FL for 4 years based on a settlement agreement between Caby and the U.S. Attorney’s Office for the Southern District of Florida involving a charge of conspiracy to violate IEEPA by shipping various aircraft parts and equipment to Syrian Arab Airlines without the required authorization. (See related denial orders in November 2019 Regulatory Update.)

Department of State

Jan. 16, 2020 – 85 Fed. Reg. 2802: The State Department rescinded the statutory debarments of the following individuals and entities, all of whom had been debarred because they had pled guilty to violations of the AECA:

Jami Siraj Choudhury;
David Michael Janowski II;
Netria Corporation;
Jonathan Robert Reynolds; and
State Metal Industries, Inc.

As a result of this rescission, all otherwise eligible persons may engage in exports of any of the Parties’ manufactured defense articles, incorporate any of the Parties’ manufactured items into defense articles for export, or otherwise engage in transactions subject to the ITAR without providing prior written notification of the Parties’ involvement as would otherwise be required. However, the Parties’ direct export privileges have not been reinstated.

Fines and Penalties

Jan. 15, 2020: The Department of Justice announced the unsealing of an indictment returned on Oct. 16, 2019, against Muhammad Kamran Wali of Pakistan; Muhammad Ahsan Wali and Haji Wali Muhammad Sheikh, both of Mississauga, Ontario, Canada; Ashraf Khan Muhammad of Hong Kong; and Ahmed Waheed of Ilford, Essex, United Kingdom, for conspiracy to violate the IEEPA and the ECRA by exporting U.S.-origin goods without the required USG authorizations to two Pakistani entities that were included on the Commerce Department’s Entity List (15 CFR Part 744, Supp. No. 4) because they were involved in Pakistan’s cruise missile and strategic UAV programs. All 5 defendants were associated with a front company, “Business World” in Rawalpindi, Pakistan, that operated as an international procurement network for these programs.

According to the indictment, the defendants concealed the actual destination of the goods from their U.S. suppliers by using a network of front companies as the claimed purchasers, end-users, and sources of payments, allegedly causing 29 different U.S. exporters to unintentionally falsely identify the ultimate consignees of the shipments on export documents. Arrest warrants are pending for all 5 defendants; none has thus far been apprehended. (See related Temporary Denial Order in Sanctions section above.)

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Jan. 16, 2020: Majid Ghorbani, an Iranian citizen and resident of California, was sentenced in U.S. District Court in the District of Columbia to a prison term of 30 months followed by 36 months of supervised release based on his guilty plea to willfully violating the IEEPA and the Iranian Transactions and Sanctions Regulations (ITSR, 31 CFR Part 560) by providing surveillance of and collecting identifying information about the U.S. members and activities of the Mujahadeen-e-Khalq (MEK), an organization that opposes the current Government of Iran. Ghorbani provided the information and materials, including photographs of rally attendees, to a codefendant who tasked him on behalf of the Iranian regime and, among other things, paid him $2,000 provided by his Government of Iran handler.

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Jan. 26, 2020: James P. Meharg of Pensacola, FL was sentenced in U.S. District Court for the Northern District of Florida to 40 months in prison followed by 3 years of federal supervised release, and, ordered to forfeit $250,000 based on his conviction of violating the ITSR by conspiring with citizens of the United Kingdom and Iran to export a Solar Mars 90 S turbine core engine and parts, from the U.S. to a recipient in Iran. Meharg also allegedly falsified documents used to export the items from the U.S. The turbine was seized by U.S. law enforcement authorities before its transatlantic journey.

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Jan. 28, 2020: Honeywell Middle East FZE of Dubai, United Arab Emirates (UAE) agreed to pay a civil penalty of $26,250 to settle charges of violating the Antiboycott Regulations (EAR Part 760) by refusing to do business (EAR Sec. 760.2(a)) on 2 occasions and by failing to report the receipt of requests to engage in a restrictive trade practice or foreign boycott against a country friendly to the U.S. (EAR Sec. 760.5) on one occasion. The violations involved transactions with Oman and the UAE.

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Jan. 29, 2020: Airbus SE (Airbus) of Leiden, The Netherlands, agreed to pay a civil penalty of $10 million ($5 million in 3 installments and $5 million assessed for remedial compliance measures and suspended on condition of completion of remedial measures), assign a Special or Internal Compliance Officer, and take extensive remedial compliance measures to settle charges by DDTC of 75 violations of the AECA and ITAR including failure to report accurate ITAR Part 130 statements for fees or commissions paid to facilitate sales; failure to maintain required ITAR Part 130 records; unauthorized reexports of defense articles from Spain to Australia; and unauthorized retransfers of defense articles in Spain.

Separately, Airbus also entered into a deferred prosecution agreement (DPA) with the Department of Justice (DOJ) in connection with a criminal investigation charging it with conspiracy to violate the AECA and the ITAR and conspiracy to violate the anti-bribery provision of the Foreign Corrupt Practices Act (FCPA, 15 U.S.C. §§ 78dd-1, et seq.). The AECA charge involves Airbus’ willful failure to inform DDTC of commissions it paid to third-party brokers who were hired to generate sales of defense articles and defense services to foreign armed forces. Under this DPA, Airbus will pay penalties of $527 million (including $5 million to be credited by DOJ from the $10 million DDTC penalty), plus 50 million Euros (approximately $55 million) as part of the civil forfeiture agreement for the ITAR-related conduct. A DOJ press release with additional information is on the DOJ website at https://www.justice.gov/opa/pr/airbus-agrees-pay-over-39-billion-global-penalties-resolve-foreign-bribery-and-itar-case.

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Jan. 30, 2020: Mahin Mojtahedzadeh, a citizen of Iran, was sentenced in federal district court in Albany, NY to time served (443 days in jail) and a $5,000 fine for violating the IEEPA and the ITSR by conspiring to export gas turbine parts valued at more than $3,000 from the U.S. to Iran without the required license from OFAC. Mojtahedzadeh was President and Managing Director of ETCO-FZC, a supplier of spare and replacement turbine parts for power generation companies in the Middle East with an office in Dubai, UAE. Working with companies in Canada and Germany, she arranged for U.S.-origin turbine parts to be illegally trans-shipped from those countries to Iran. Two co-conspirators in these violations, Olaf Tepper and Mojtaba Biria, both citizens of Germany, pleaded guilty to violating the IEEPA and were sentenced in August 2018 and August 2019, respectively. (See August 2019 Regulatory Update.) Mojtahedzadeh will now be placed in immigration custody for removal from the U.S.

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