Updates

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

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

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

REGULATORY UPDATES

President

President Biden Continued the National Emergency with Respect to Hong Kong

July 10, 2024: On July 14, 2020, by Executive Order 13936, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by the situation with respect to Hong Kong.

The situation with respect to Hong Kong, including recent actions taken by the People’s Republic of China to fundamentally undermine Hong Kong’s autonomy, continues to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.  For this reason, the national emergency declared on July 14, 2020, must continue in effect beyond July 14, 2024.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 13936 with respect to the situation in Hong Kong.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/07/10/notice-on-the-continuation-of-the-national-emergency-with-respect-to-hong-kong-4/ and

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

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President Biden Launches the Ukraine Compact

July 11, 2024: President Biden launched the Ukraine Compact at the 33^rd NATO Summit in Washington D.C., an event with 23 allies and partners as part of the U.S. commitment to Ukraine’s long-term security. This Compact fulfills the promise President Biden and these countries made in Vilnius in 2023 to negotiate long-term bilateral security agreements with Ukraine to support Ukraine as it defends itself now, and to deter aggression against Ukraine in the future as part of its bridge to NATO membership. The signatories committed to providing Ukraine with ammunition, weapons, and training to resist Russian aggression. Leveraging each of the agreements, this historic Compact creates a unified and comprehensive security architecture to support Ukraine today and, in the future, in war and in peace.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/07/11/president-joe-biden-launches-the-ukraine-compact/ and

https://www.whitehouse.gov/briefing-room/presidential-actions/page/4/

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President Biden Continued the National Emergency with Respect to Hostage-Taking and the Wrongful Detention of United States Nationals Abroad.

On July 16, 2022, by Executive Order 14078, President Biden declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by hostage-taking and the wrongful detention of United States nationals abroad.

Hostage-taking and the wrongful detention of United States nationals are heinous acts that undermine the rule of law.  Terrorist organizations, criminal groups, and other malicious actors who take hostages for financial, political, or other gain — as well as foreign states that engage in the practice of wrongful detention, including for political leverage or to seek concessions from the United States — threaten the integrity of the international political system and the safety of United States nationals and other persons abroad.  Hostage-taking and the wrongful detention of United States nationals abroad continue to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.  For this reason, the national emergency declared in Executive Order 14078 of July 19, 2022, must continue in effect beyond July 19, 2024.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 14078 with respect to hostage-taking and the wrongful detention of United States nationals abroad.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/07/16/letter-to-the-speaker-of-the-house-and-president-of-the-senate-on-the-continuation-of-the-national-emergency-with-respect-to-hostage-taking-and-the-wrongful-detention-of-united-states-nationals-abroad/ and

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

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

Proposed Rule: Revisions to Definition of Defense Services and Enhancement

July 25, 2024: 89 Fed. Reg. 60980: On July 29, 2024, the Department of State published in the Federal Register a proposed rule to revise the definition of defense service and the scope of related controls in the International Traffic in Arms Regulations (ITAR).

The Department of State undertook a review of the definition of defense service in the ITAR (ITAR 120.32). This review focused on identifying activities of U.S. persons that (1) provide a critical military or intelligence advantage such that they warrant control under the ITAR and are activities that are not currently subject to the ITAR; or (2) are controlled under the ITAR, but the current control language would benefit from additional clarity. Following the review, the Department of State proposes a revised definition of defense service to better describe existing controls and the scope of activities it would regulate through the revised definition and proposes certain additions to the ITAR’s United States Munitions List (“USML”).

Included in this proposal is specific language regarding the furnishing of intelligence-related assistance that is not directly related to a defense article to certain types of foreign persons (i.e., a foreign unit, force, or government) or their proxies or agents. The Department of State assessed that these activities warrant and require control equivalent to those of intelligence-related defense articles since such assistance (including training or consulting) similarly furnishes a critical military or intelligence advantage to the foreign person. Review of such activity by the Department of State for consistency with U.S. foreign policy and national security interests is necessary prior to any furnishing of such services. Further, the inclusion of the activities in this proposed rule is reflective of the stated aims of AECA § 38(a)(2) (22 U.S.C. 2778(a)(2)) and principles in the United States Conventional Arms Transfer Policy.

First, a proposed revision would amend the definition of defense services at § 120.32(a)(1) by revising the list of regulated activities currently found in (a)(1) to include “assistance, including training or consulting, to foreign persons in the development (including, e.g., design), production (including, e.g., engineering and manufacture), assembly, testing, repair, maintenance, modification, disabling, degradation, destruction, operation, processing, use, or demilitarization of a defense article.” This revised list moves several activities currently individually specified in (a)(1) (i.e., design, engineering, and manufacture) into parentheticals following defined terms in which they are included. Those activities were folded into the revised definitions of “production” and “development” at § 120.43 by a recent ITAR rule (87 FR 16396, Mar. 23, 2022).

In addition, the revised list of activities includes two new references, “disabling” and “degradation.” The Department of State proposes these terms to make explicit that the act of harming a military capability through the disabling or degradation of defense articles via any method remains controlled. In assessing non-traditional methods of disrupting a nation’s military capabilities during its review, the Department of State noted that, while the current definition of defense service includes such activities, advances in technology that facilitate such activities merit explicit reference. The proposed revision clarifies that cyber services, or any other activities, that disable and degrade defense articles, but fall short of total destruction or demilitarization, are included within the definition of defense service at § 120.32(a)(1).

The Department of State also proposes a clarifying addition to the introductory text of paragraph (a)(1) to better describe the scope of activities controlled by the definition. In describing the assistance covered by the paragraph, the Department of State proposes to replace the parenthetical “(including training)” with a new clause clarifying that assistance includes training or consulting. In so doing, the Department of State does not intend to add a new level of control to its existing control of defense services, but rather intends to clarify that it does not treat training to mean only direct instructional activity. The proposed addition would reaffirm that providing the tools or means of furnishing training to a foreign person so that the foreign person may conduct training in lieu of the regulated person is included in the control. Such consulting is not limited to the furnishing of a completed product ,but includes assisting in the development of such training.

Second, the proposed amendments would remove § 120.32(a)(2) from the definition of defense service as redundant since the furnishing of technical data to a foreign person is already a controlled event described in §§ 120.50 through 120.52. Further, the proposed amendments would remove current paragraph (a)(3). In their stead, these two provisions are replaced by a proposed new paragraph (a)(2) that directs persons to the USML where descriptions of services to be controlled under ITAR are provided. The Department of State includes a proposed note to § 120.32 directing the regulated community to the new location.

Specifically, the proposed paragraph (a)(2) directs persons to two new proposed USML entries in Category IX that would control defense services related to intelligence and military assistance. The proposed entries differ from the type of defense services described in paragraph (a)(1), which directly relate to defense articles and already have corresponding entries in each USML category (e.g., Category I(i), Category II(k), etc.).

The two new entries are proposed for 2 reserved paragraphs of USML Category IX, and the category is proposed to be renamed “Military Training Equipment, Intelligence Defense Services, and Military Defense Services” to more accurately describe the controls in the category. The Department proposes to reserve new paragraph (s)(1) for use as a future entry and to place the new controls in proposed paragraphs (s)(2) and (3) within that category. For purposes of this preamble, the intelligence assistance controlled by paragraph (s)(2) is referred to as “intelligence assistance” and the military and paramilitary assistance controlled by paragraph (s)(3) are referred to by the singular “military assistance.”

The introductory text of proposed new USML Category IX(s)(2) describes defense services relating to intelligence assistance that do not necessarily involve defense articles. Following the introductory control text of proposed USML Category IX(s)(2), subsequent paragraphs would provide specified carve-outs to the general description of activities described in paragraph (s)(2). Similar carve-out provisions are also proposed to the military assistance control in USML Category IX(s)(3). The Department of State determined that rather than relying solely on the definition of defense service, it would be better to direct users to the USML to conduct their classification analysis since this approach is similar to how users currently conduct defense article classification analysis, and it allows for a more detailed articulation of certain specific activities meriting ITAR control. Moreover, AECA § 38(a)(1) (22 U.S.C. 2778(a)(1)) provides that defense services, like defense articles, are to be designated on the USML. By adding specific entries in addition to the existing USML paragraphs controlling defense services, including those furnished in connection with a defense article, the Department of State brings additional clarity to the regulations. Further to that effort, the Department of State proposes to amend § 120.11, which describes the order of review, to include a proposed paragraph (d) specific to defense services and to redesignate current paragraph (d) as paragraph (e).

As to the objective of the proposed additions to the USML, the Department of State determined revised and clarified controls are warranted and necessary to address the risks to U.S. national security and foreign policy interests posed by U.S. persons furnishing assistance in intelligence activities. In particular, the Department of State determined that certain intelligence activities that do not involve defense articles provide a critical military or intelligence advantage such that they warrant and require revised controls under the ITAR.

The proposed USML Category IX(s)(3) describes defense services relating to military assistance that do not necessarily involve defense articles and provides specified carve-outs to the controls. Persons furnishing certain military assistance to foreign persons can cause local and regional instability in a manner equal to or greater than the supply of a tangible article or weapon to a foreign person end-user. The proposed inclusion of certain specific forms of military assistance as a defense service within the USML is intended to provide U.S. persons with clear notice that such activities require authorization as, depending on the circumstances, the activities may be counter to U.S. national security or foreign policy interests, the stated aims of AECA § 38(a)(2) (22 U.S.C. 2778(a)(2)), Conventional Arms Transfer Policy objectives, or shared interests with our allies and partners.

To ensure that the military assistance controls are consistent with ITAR § 120.3(b) and only control those activities that provide a critical military or intelligence advantage, the proposed controls described in USML Category IX(s)(3) would regulate a higher level of support than front-line combatant activities. The Department of State notes, however, that although not intended for control in proposed Category IX(s)(3), such activities may be otherwise regulated by other provisions in the ITAR, or by regulations administered by other agencies of the U.S. Government. In conjunction with the addition of this proposed USML entry, the Department of State is proposing to remove the existing USML entry for military training at current Category IX(e)(3). In so doing, the Department does not intend to narrow the scope of what is controlled by that existing military training entry, but rather aims to bring additional clarity to that control as part of new text proposed as Category IX(s)(3).

See the following links for the full text of the proposed rule including the USML additions:

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

https://www.federalregister.gov/public-inspection/2024-16501/international-traffic-in-arms-regulations-revisions-to-definition-and-controls-related-to-defense

 

DDTC Name And Address Changes Posted To Website

July 25 through July 26, 2024: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at    

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

• Change in Name from Babcock Land Limited to Babcock Land Defence Limited due to internal corporate restructuring;
• Change in Address for Landes High End Machining b.v. from Magelhaenstraat 15, 7825VL, Emmen, Netherlands to Maxwellstraat 31, 7825 GA, Emmen, Netherlands;
• Change in Name from Air Liquide advanced Technologies to Aerospace & Defense Oxygen Systems due to corporate restructuring;
• Change in Name from Safran Data Systems to Safran Defense & Space, Inc due to corporate restructuring.
• Change in Name from SeaTec Consulting Inc. to Oliver Wyman Government Services LLC due to merger;
• Change in Address for Metrea Management Limited, MAFX UK Limited, Metrea Discovery Partners Limited, and Metrea Discovery Partners Holding 1 Limited from Third Floor, O’Gorman House, 37 Ixworth Place, London, SW3 3QH, United Kingdom to Third Floor, The Aircraft Factory, 100 Cambridge Grove, London, W6 0LE, United Kingdom;
• Change in Name from Ferranti Technologies Limited to ESUK Aerospace and Simulation Limited due to corporate rebranding;
• Change in Name from CASS Professional Services, Corp. dba Metrea Strategic Mobility to Metrea Strategic Mobility Inc. due to corporate rebranding;
• Change in Name from Teledyne FLIR Surveillance, Inc. to Teledyne FLIR Defense, Inc., due to corporate rebranding;
• Change in Name from Airbus Helicopters International Services to Airbus International Services DAC due to corporate rebranding;
• Change in Name and Address from Assistance Aéronautique et Aérospatiale SAS, 10 rue Mercoeur, 75011 Paris, France to Daher Industrial Services SAS at Immeuble BELAÏA, 7 avenue de l’Union, F-94390 ORLY, FRANCE, due to merger;
• Change in Name from Ayesa Air Control Ingenieria Aeronautica, S.L. to Alten Soluciones Productos Auditoria E Ingenieria SAU due to merger; and
• Change in Address for ATEXIS France from 10/12 Boulevard Pythagore, 13127 Vitrolles, France to 14 Draille Des Tribales, 13127 Vitrolles, France, and all other locations in France.
• Change in Name from Rafaut SAS to ARESIA-Villeneuve due to merger.
• Change in Name from Alkan SAS to ARESIA-Valenton due to merger.
• Change in Address for Metrea Simulations AB formerly at Stora Skondals Vag 9, Skondal 128 63, Sweden to Metrea Simulations AB at Luntmakargatan 66, 113 51 Stockholm, Sweden
• Change in Name from Globes Elektronik GmbH & Co KG to Milexia Deutschland GmbH due to merger.

Please note the DDTC website was revamped on 7/31/2024 and the name and address announcements are now found under a tab “Amending Authorizations”.

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DDTC FAQs

On March 25, 2024, DDTC published a short series of Frequently Asked Questions regarding joint ventures and how those contractual arrangements affect an exporter’s DDTC registration. The following are a few of the key points from the FAQs.

• DDTC views joint ventures as separate legal entities, rather than as a subsidiary or affiliate of the parties to the joint venture agreement. If the entity formed from a joint venture will be engaging in military or defense related activities that are subject to the ITAR, the joint venture entity must separately incorporate and register with DDTC.
• If a DDTC registered entity enters into a joint venture that results in 50% or more ownership of the new entity, the joint venture must be added to the registrant’s existing DDTC registration as a subsidiary. The same rule applies even if it is a foreign incorporated joint venture. Alternatively, if the DDTC registered entity owns less than 50% of the joint venture but is responsible for managing the day-to-day operations of the joint venture, then the joint venture entity would still be added to the existing DDTC registration and listed as a controlled affiliate.
• If a joint venture entity is equally owned (50/50) by two DDTC registered companies and control of business operations is also equally shared, then DDTC will consider other factors in deciding under which entity the joint venture will be registered, such as which of the registered entities is engaging in more ITAR specific activities or projects. If the joint venture is independently managed, then the joint venture entity must register with DDTC independently.
• If a U.S. incorporated joint venture is managed by foreign persons but will be engaging in ITAR-controlled activities, a U.S. person must be appointed as a senior officer for the U.S. joint venture and the joint venture can then apply for independent DDTC registration. If no U.S. person is acting as a senior officer of the joint venture, then it cannot register with DDTC and cannot conduct ITAR-controlled activities.

https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_public_portal_faq_cat&topic=2a3d376cdb3bc30044f9ff621f961982&subtopic=d6ca9bd387054a909012a7d40cbb3598#d6ca9bd387054a909012a7d40cbb3598

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Department of Defense, Defense Security Cooperation Agency (DSCA)

DSCA Notifies Congress of Potential FMS Sale To the Czech Republic

July 17, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government the Czech Republic has requested to buy two hundred (200) Hellfire Air-to-Ground Missiles, AGM-114R; four (4) Hellfire Captive Air Training Missiles (CATM); and six hundred (600) WGU-59A/B Advanced Precision Kill Weapon System (APKWS) II (single variant). The following non-MDE (Major Defense Equipment) is also included: support equipment; dummy cartridge rounds; containers; training material; inert components; publications; repair of repairables; and training and technical support. The estimated total cost is $138.26 million. The principal contractors will be Lockheed Martin, located in Orlando, FL, and BAE Systems, Inc., located in Nashua, NH. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/czech-republic-hellfire-missiles-and-advanced-precision-kill-weapon and

https://www.dsca.mil/major-arms-sales/archive-date/202407

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DSCA Notifies Congress of Potential FMS Sale To Saudi Arabia

July 23, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Kingdom of Saudi Arabia has requested to buy follow-on logistics support and services, including for Joint Mission Planning Software (JMPS) hardware and support; KIV-77/78 cryptographic devices and support; spares and repair parts, consumables and accessories, and repair and return support; calibration support and test equipment; ground and personnel equipment; classified and unclassified software and software support, classified and unclassified publications and technical documentation; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support, in support of, but not limited to, KC-130J, C-130, E-3, RE-3, KE-3, KA 350, Bell 212, and Bell 412 aircraft. The estimated total program cost is $2.8 billion. There will be various contractors associated with the provision of equipment and services involved with this case, and there is no prime contractor. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/kingdom-saudi-arabia-system-logistics-and-sustainment-support and

https://www.dsca.mil/major-arms-sales/archive-date/202407

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DSCA Notifies Congress of Potential FMS Sale To Belgium

July 25, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Belgium has requested to buy up to one hundred ninety-six (196) Guided Bomb Unit (GBU)-53/B Small Diameter Bombs-Increment II (SDB-II) All-Up-Rounds (AURs). Also included are SDB-II Weapons Load Crew Trainers (WLCT); training aids and devices; spare and repair parts, consumables, accessories, and repair and return support; unclassified software delivery and support; unclassified publications and technical documentation; major modifications and maintenance support; training and training equipment; munitions support and support equipment; transportation support; studies and surveys; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $115 million. The principal contractor will be RTX Corporation, located in Arlington, VA. There are no known offset agreements proposed in connection with this potential sale.

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

https://www.dsca.mil/major-arms-sales/archive-date/202407

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DSCA Notifies Congress of Potential FMS Sale To Slovakia

July 31, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) notified Congress that The Government of Slovakia has requested to buy twelve (12) AH-1Z attack helicopters; twenty-six (26) T-700 GE 401C engines (24 installed, 2 spares); one thousand six hundred eighty (1,680) Advanced Precision Kill Weapon Systems (APKWS), WGU-59/B; and fourteen (14) Honeywell embedded global positioning systems (GPS)/inertial navigation systems (INS) (EGIs) (12 installed, 2 spares). The following non-MDE items will also be included: support and test equipment; aircraft; weapons and munitions; countermeasures; integration and test support; spare and repair parts; communications equipment; mission planning; software delivery and support; Helmet Mounted Display System/Optimized TopOwl, Target Sight Systems and containers; technical refresh mission computers; ANVIS-9 night vision cueing displays; AN/ARC-210 Generation 6 receiver-transmitter 2036 radio equipment; AN/APX-123A identification friend or foe (IFF) Mode 5 mounting trays and batteries; cartridge actuated devices/propellant actuated devices (CAD/PADs); facilities and construction support; transportation; publications and technical documentation; personnel training and training equipment; countermeasures, including M299 launchers, LAU-61C/A and LAU-68F/A rocket launchers, M151 high explosive warheads for airborne 2.75 inch rockets; MK66 MOD 4, 2.75-inch rocket motors; WTU-1B warheads; M197 20 mm armament pod gun assemblies; 20 mm PGU-27A/B target practice rounds; 20 mm PGU-28A/B semi armor piercing high explosive incendiary rounds; AN/ALE-47 chaff and flare countermeasures system; MJU-32A/B and MJU-49B decoy flares; SMB875B/ALE flare simulators; RR-129A/AL chaff cartridges; RR-144A/AL training chaff cartridges; CCU-136A/A impulse cartridges; AN/AAR-47 missile warning system; AN/APR-39C radar warning receiver and conversion kits; KIV-78A cryptographic appliques; AN/PYQ-10C Simple Key Loader with KOV-21 cryptographic card; U.S. Government and contractor engineering; field service representative services; technical and logistical support services; studies and surveys; and other related elements of logistics and program support. The estimated total cost is $600 million. The principal contractors will be Bell Textron, located in Fort Worth, TX; and the General Electric Company, located in Lynn, MA. There are no known offset agreements in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/slovakia-ah-1z-attack-helicopters

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

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

July 1, 2024: the Department of Commerce’s Bureau of Industry and Security (BIS) Export Enforcement published an updated version of “Don’t Let This Happen to You!”, a compendium of case examples highlighting BIS criminal and administrative enforcement efforts. The publication was last updated in March 2024.

The updated version includes new enforcement cases involving a voluntary self-disclosure by an academic institution, violations of the antiboycott regulations, firearms export violations, export violations related to China and Iran, and non-compliance with a BIS settlement agreement. Exporters are encouraged to review the publication, which provides useful illustrations of the type of conduct that gets companies and universities in trouble.

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

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

https://www.bis.gov/sites/default/files/files/DLTHTY%21_7-1-2024.pdf

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BIS Issues Guidance on Addressing Export Diversion Risks

July 10, 2024:  The Department of Commerce’s Bureau of Industry and Security (BIS) published guidance outlining the different actions that BIS takes to inform industry and academia about parties – beyond those identified on public screening lists like the Entity List – those present risks of diversion of items subject to BIS export controls to countries or entities of concern. The guidance also outlines certain responsibilities companies and universities must comply with BIS regulations, as well as additional steps they should take to mitigate diversion risks.

https://www.bis.gov/sites/default/files/files/Guidance-for-Complying-with-BIS-Letters-Identifying-Transaction-Parties-of-Diversion-Risk_v8.pdf and

https://www.bis.gov/press-release/bis-issues-guidance-addressing-export-diversion-risks

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BIS Sets Higher KYC Standards for Companies and Universities Over Russia Diversion Concerns 

July 10, 2024: The U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) released new guidance (the “July 10 Release”) outlining different types of precautionary letters (“supplier list” letters, “Project Guardian” requests, “red flag” letters, and “is informed” letters) that BIS may send to “companies and universities” to notify them of “parties of national security concern, such as those that present a risk of diverting [Export Administration Regulations (“EAR”)] items to restricted end uses or end users in Russia.

https://www.wilmerhale.com/en/insights/client-alerts/20240726-bis-sets-higher-kyc-standards-for-companies-and-universities-over-russia-diversion-concerns

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BIS Issues Statement on Export Controls and Restrictions Against Russia

July 15, 2024: As part of BIS’ regular consultations on export control cooperation, the European Commission hosted a meeting with counterparts from Japan, the United Kingdom and the United States on 10 July 2024, to discuss ongoing efforts to align and enhance export restriction measures imposed in response to Russia’s illegal invasion of Ukraine.

The swift, unprecedented and massive export restrictions that have been collectively imposed since February 2022 have been calculated and continuously adjusted over time to maximize their effect on Russia’s military industrial base. As Russia intensifies illicit procurement attempts, it must not be given access to those items needed to manufacture its weapons and supply its military —either directly from the coalition of partner nations, or indirectly through transshipment networks often involving non-sanctioning third countries. Companies that seek to profit from selling coalition commodities, software and technology into Russia do so at the collective’s expense.

The regulatory services for each government will continue to enhance and expand, as appropriate, regulatory requirements in light of information from the battlefield, in order to maintain the effectiveness of the measures placed. The national competent authorities will continue to hold those who violate the laws accountable.

BIS and its foreign government counterparts are grateful for the efforts of industry to devote appropriate resources to know their customers and counter the risks of illegal transshipment. BIS and Industry has collectively developed specific tools to support industry compliance, such as the Common High Priority List (CHPL) of battlefield items. BIS is also actively identifying companies associated with Russia’s military-industrial complex and involved in the circumvention of our measures. BIS will continue to issue public guidance to improve the reach and effect of our export restrictions imposed in response to Russia’s illegal invasion of Ukraine.

BIS encourages industry to take advantage of the significant information and guidance issued to improve its compliance screening. BIS calls on responsible exporters to improve export compliance systems and exercise enhanced due diligence. This includes making efficient use of sources such as public business registries, commercially available trade databases, and information collected by non-profit organizations to identify companies that present a high risk of future diversion. These would notably include companies with a prior record of diverting controlled items from any of the aligned export control systems to Russia.

The ability of industry to identify high-risk transactions can make a difference. The collective actions will be both complementary and coordinated so that BIS and counterparts continue to effectively address the ongoing threat to international security.

https://www.bis.gov/press-release/statement-export-controls-and-restrictions-against-russia and

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

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BIS Announces Major Update to Participation in Global Standards Development

July 18, 2024: 89 Fed. Reg. 58265: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) published an interim final rule (IFR) amending the Export Administration Regulations (EAR) to reinforce the United States’ leadership and participation in global standards development, while continuing to prevent transfers of technology that harm our national security. This IFR ensures that U.S. companies can actively participate in the development of international standards without being unreasonably hindered by export controls and associated compliance concerns. Without the revisions to the EAR announced, there is greater risk that standards would be developed without the participation and input of U.S. companies, which harms U.S. national security.

Key updates include:

• Revising the definition of standards-related activities to accurately reflect the U.S. model of public-private cooperation in standards to further global innovation and trade.
• Clarifying the applicability of export controls to specific “software” and “technology” for “standards-related activity” to promote transparency and effectiveness in U.S. contributions to global standards.

In addition, this rule is essential in supporting ongoing efforts under the U.S. Government National Standards Strategy for Critical and Emerging Technology (USG NSSCET), which aims to enhance U.S. leadership in the development of standards for critical technologies. By facilitating easier participation, the rule advances U.S. interests in global technology standards, which are pivotal in shaping the future of industries and ensuring security benefits derived from technological advancements.

https://www.bis.gov/press-release/department-commerce-announces-major-update-us-leadership-global-standards-development and

https://www.whitehouse.gov/wp-content/uploads/2023/05/US-Gov-National-Standards-Strategy-2023.pdf

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BIS Expands The Scope of the Foreign Direct Product Rule Concerning Iran

July 24, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) implemented an expansion of controls on the export, reexport, or transfer (in-country) of certain foreign-produced items located in or destined to Iran, to address ongoing concerns regarding Iran’s potential use of U.S. technology in weapons systems.

This rule implements the requirements of the No Technology for Terror Act (the Act), which was passed in April as part of emergency supplemental appropriations for the current fiscal year. As required by the Act, the BIS rule expands the scope of the Export Administration Regulations’ (EAR) Iran Foreign Direct Product rule (FDPR). The expansion, effective July 23, 2024, is designed to further impede Iran’s ability to procure technology and components critical for military systems, including advanced drones that pose threats to U.S. forces and allies.

The expanded controls build upon existing restrictions on Iran that apply under the Iran FDPR by imposing licensing requirements for the export, reexport, and transfer (in-country) of additional foreign-produced items located in or destined to Iran and by adding a new end-user scope that targets transactions involving such items in which the Government of Iran is a party.

This rule reflects BIS’ efforts to ensure robust enforcement of export controls and to prevent the proliferation of weapons systems that threaten U.S. troops overseas or key allies.

https://www.bis.gov/press-release/iran-fdp-media-advisory and

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

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BIS Proposes Restrictions on U.S. Persons’ Support for Foreign Military, Intelligence, and Security Services and Controls to Protect National Security and Human Rights

July 25, 2024: 89 Fed. Reg. 60985: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) published proposed rules seeking public comment on enhanced restrictions on exports, reexports, or support to military or intelligence end users and end uses in countries of concern, consistent with the Fiscal Year 2023 National Defense Authorization Act (NDAA). These rules complement proposed revisions, also published, regarding the scope of defense services controlled by the Department of State’s Directorate of Defense Trade Controls (DDTC) pursuant to the International Traffic in Arms Regulations (ITAR). BIS is seeking public comment on the proposed rules, which include expanding restrictions against exporting items to, or providing support for, military or intelligence services in countries of concern.

The specific controls proposed in these rules include:

• S. Persons’ Activity Controls: Expanded restrictions on U.S. persons’ support activities regarding end uses and end users of concern, including facilitating the acquisition of certain foreign-origin items by military, intelligence, and security services of concern, as well as performing maintenance, repair, and overhaul of such foreign-origin items.
• End-Use and End-User Controls: Expanded restrictions to apply to all items subject to the EAR when destined to the armed forces or national guard of countries subjected to a U.S. arms embargo as well as civilian or military intelligence agencies (e.,intelligence end users) of over 40 countries of concern. Such controls are also proposed to apply to all items on the Commerce Control List when destined to foreign-security end users (e.g., police and security agencies) or military-support end users (e.g., defense contractors) in countries subject to a U.S. arms embargo.
• Item Controls: New restrictions on the export of certain facial recognition technologies that can enable mass surveillance to protect and promote human rights.

https://www.bis.gov/press-release/commerce-proposes-restrictions-us-persons-support-foreign-military-intelligence-and and

https://www.federalregister.gov/public-inspection/2024-16498/export-administration-regulations-crime-controls-and-expansionupdate-of-us-persons-controls and

https://www.federalregister.gov/public-inspection/2024-16496/end-use-and-end-user-based-export-controls-including-us-persons-activities-controls-military-and

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BIS Issues Standards-Related Activities and the Export Administration Regulations; Corrections

July 25, 2024: 89 Fed. Reg. 60302: On July 18, 2024, BIS published in the Federal Register the interim final rule (IFR), “Standards-Related Activities and the Export Administration Regulations” (89 FR 58265) that revised parts 734, 744 and 772 of the EAR. The revisions in the July 18, 2024, rule inadvertently reverted changes to part 744 that were amended in a final rule that BIS published on June 18, 2024 (89 FR 51644). This document corrects the inadvertent revisions introduced in the Federal Register on July 18, 2024, specifically to §§ 744.11, 744.16, and supplement no. 4 to part 744, to reintroduce language that was added in the June 18, 2024, rule that reflected the addition of paragraph (f) under § 744.16.

https://www.federalregister.gov/documents/2024/07/25/2024-16379/standards-related-activities-and-the-export-administration-regulations-corrections

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End-Use and End-User Based Export Controls, Including U.S. Persons Activities Controls: Military and Intelligence End Uses and End Users

July 29, 2024: 89 Fed. Reg. 60985: The Department of Commerce, Bureau of Industry and Security (BIS), seeks public comment on proposed changes to existing restrictions under the Export Administration Regulations (EAR) on military and intelligence end uses and end users and related U.S. persons activities controls, as well as the proposed addition of a military-support end-user control. These proposed revisions and additions to the EAR’s end-use, end-user, and “U.S. persons” activity controls would implement expanded Export Control Reform Act of 2018 (ECRA) authority to control certain “U.S. persons” activities under the EAR. Specific to the EAR’s “U.S. persons” activities controls, BIS is proposing amendments to control `support’ furnished by “U.S. persons” to military end users and military-production activities, as well as intelligence end users that are not otherwise already regulated under or prohibited by U.S. law. In addition, BIS is proposing to revise the definition of `support’ set forth in the EAR’s “U.S. person” activity control provision in response to requests by the public for clarification. The revisions and additions, along with clarifications, to end use, end user, and “U.S. persons” activity controls under the EAR, would further the national security and the foreign policy of the United States.

https://www.federalregister.gov/documents/2024/07/29/2024-16496/end-use-and-end-user-based-export-controls-including-us-persons-activities-controls-military-and

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 U.S. Census Bureau

Schedule B and Harmonized Tariff Schedule (HTS) Updated in the Automated Export System (AES)

July 1, 2024:

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

AES will accept shipments with outdated codes during a grace period for 30 days beyond the expiration date of June 30, 2024. Reporting an outdated code after the 30-day grace period will result in a fatal error.

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

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

https://www.census.gov/foreign-trade/aes/concordance.html

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

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

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Tips on How to Resolve AES Response Messages

July 18, 2024

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

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

Response Code:  531

Narrative:     Foreign/Domestic Origin Indicator Not Allowed For HH

Severity:       Fatal

Reason:        When the Export Information Code reported is HH for household goods, the Foreign/Domestic Origin Indicator is not allowed.

Resolution:  The Foreign/Domestic Origin Indicator should not be reported when the Export Information Code is HH for household goods.

Verify the Export Information Code and Foreign/Domestic Origin Indicator, correct the shipment and resubmit.

Response Code:  8W1

Narrative:     Shipping Weight/Quantity 1 Out of Range

Severity:       Verify

Reason:        For the reported Schedule B/HTS Number, the Shipping Weight/Quantity (1) ratio is outside of the expected range.

Resolution:  For a particular Schedule B/HTS Number reported, the shipping weight divided by the first quantity should fall within a certain parameter based on historical statistical averages for that commodity.  Ratios outside this pre-determined parameter might indicate either a keying error or misclassification of the product.

Verify the Shipping Weight, Quantity 1, and Schedule B/HTS Number, correct the shipment and resubmit (if necessary).  If the line item is verified correct as reported, no action is necessary.

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Office of Foreign Assets Control (OFAC)

July 5, 2024: the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued its OFAC Guidance: Production Submission Standards, updating OFAC’s former data delivery standards.  This guidance provides technical and general guidance to persons submitting material to OFAC and applies primarily to persons providing responses to administrative subpoenas, requests for information, disclosures, and especially for submissions that may entail voluminous documentation.

https://ofac.treasury.gov/recent-actions/20240705

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July 8, 2024: OFAC issued updated Venezuela General License 40C, Authorizing Certain Transactions Involving the Exportation or Reexportation of Liquefied Petroleum Gas to Venezuela.

General License 40C:

All transactions related to the exportation or reexportation, directly or indirectly, of liquefied petroleum gas to Venezuela, involving the Government of Venezuela, Petróleos de Venezuela, S.A. (PdVSA), or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, that are prohibited by E.O. 13850 of November 1, 2018, as amended by E.O. 13857 of January 25, 2019, or E.O. 13884 of August 5, 2019, each as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized through 12:01 a.m. eastern daylight time, July 8, 2025.

This general license does not authorize:

Any payment-in-kind of petroleum or petroleum products; or

Any transactions otherwise prohibited by the VSR, including transactions involving any blocked persons other than PdVSA, any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, or any Government of Venezuela person that is blocked solely pursuant to E.O. 13884.

Effective July 8, 2024, General License No. 40B, dated July 10, 2023, is replaced and superseded in its entirety by this General License No. 40C.

https://ofac.treasury.gov/media/933001/download?inline

https://ofac.treasury.gov/recent-actions/20240708

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OFAC Basics Video Series – My Funds are Blocked, Now What?

July 12, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) released the second video in its “OFAC Basics” video series, “My Funds Are Blocked, Now What?” This video provides viewers with guidance on what it means when funds are blocked in connection with OFAC sanctions, as well as recommended steps for what to do if your funds have been blocked.

The “OFAC Basics” series serves as a companion series to the “Introduction to OFAC” series, available here. For more information on this video series, please see the blog post below:

https://ofac.treasury.gov/recent-actions/20240712_33 and

https://www.youtube.com/watch?v=rc8jvauiEtc and

https://ofac.treasury.gov/ofac-video-series

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Updates to OFAC Licensing Portal Application Status and Hotline

July 18, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) took additional steps to provide greater transparency and information to specific license applicants by providing more detailed updates regarding the status of their applications via the public Licensing Portal. Applicants will now receive one of ten following case statuses to better indicate where their application is in the processing timeline.

• Received
• Guidance Issued
• Returned Without Action
• Pending Management Review
• Pending Interagency Review
• Pending Treasury Coordination
• Pending with Applicant
• Approved
• Denied
• Closed

Concurrently, OFAC is implementing updates to the Licensing Division hotline, including updating menus and transitioning to a callback-only system. These changes are aimed at helping the public access the information they need faster, reducing call wait times, and improving the overall customer experience.

https://licensing.ofac.treas.gov/Apply/Introduction.aspx and https://ofac.treasury.gov/recent-actions/20240718_33

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July 22, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) released guidance addressing questions raised by recent legislation that extended the statute of limitations for violations of certain sanctions that the agency administers.  As explained in the guidance, OFAC may now commence an enforcement action for civil violations of International Emergency Economic Powers Act- or Trading with Enemy Act-based sanctions prohibitions within 10 years of the latest date of the violation if such date was after April 24, 2019.

https://ofac.treasury.gov/media/933056/download?inline and https://ofac.treasury.gov/recent-actions/20240722

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July 23, 2024: As part of implementing the historic Rebuilding Economic Prosperity and Opportunity for Ukrainians Act (the “REPO for Ukrainians Act”), the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued a new reporting requirement for financial institutions holding Russian sovereign assets. Pursuant to section 104(a) of the REPO for Ukrainians Act, all financial institutions at which Russian sovereign assets are located, and that know or should know of such assets, must provide notice of such assets to OFAC no later than August 2, 2024, or within 10 days of the detection of such assets, and can do so via OFAC’s new form.

As described in more detail in the full instructions and in the REPO for Ukrainians Act Report Form, financial institutions should not re-report information on Russian sovereign assets that was previously reported to OFAC. A notice of these reporting instructions will be published in the Federal Register.

https://home.treasury.gov/news/press-releases/jy2479 and

https://ofac.treasury.gov/media/933066/download?inline and

https://ofac.treasury.gov/media/933061/download?inline

 

LATEST SANCTIONS FINES & PENALTIES

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

 

Fines and Penalties

July 2, 2024: Douglas Edward Robertson, 56, of Olathe, Kansas, the former vice president of KanRus Trading Company Inc., pleaded guilty for his role in a years-long conspiracy to circumvent U.S. export laws by filing false export forms with the U.S. government and, after Russia’s unprovoked invasion of Ukraine in February 2022, continued to sell and export sophisticated and controlled avionics equipment to customers in Russia without the required licenses from the U.S. Department of Commerce.

As a result of the guilty plea, Robertson faces a statutory maximum penalty of five years in prison for the conspiracy count, 20 years in prison for each of the two Export Control Reform Act counts, and 20 years in prison for the money laundering count. A sentencing hearing is scheduled for October 3, 2024.

https://www.justice.gov/opa/pr/vice-president-kansas-company-pleads-guilty-crimes-related-scheme-illegally-export-us and

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

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July 9, 2024: Nikolay Goltsev, 38, of Montreal, and Salimdzhon Nasriddinov, 53, of Brooklyn, New York, pleaded guilty to conspiracy to commit export control violations for their roles in a global procurement scheme on behalf of sanctioned Russian companies, including Russian military companies. Some of the electronic components shipped by the defendants were later found in seized Russian weapons platforms and signals intelligence equipment in Ukraine.

Goltsev and Nasriddinov are scheduled to be sentenced on Dec. 10 and Dec. 11, respectively. They each face a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

https://www.justice.gov/opa/pr/new-york-man-and-canadian-national-plead-guilty-multi-million-dollar-export-control-scheme and

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

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July 16, 2024: 89 Fed. Reg. 57853: On April 9, 2021, in the U.S. District Court for the District of Arizona, Ruben Arnulfo Chavarin (“Chavarin”) was convicted of violating 18 U.S.C. 554(a). Specifically, Chavarin was convicted of smuggling ammunition from the United States to Mexico. As a result of his conviction, the Court sentenced Chavarin to 78 months of imprisonment, with credit for time served, three years of supervised release, a $100 special assessment and additional monetary penalties of $10,307.20.

https://www.federalregister.gov/documents/2024/07/16/2024-15619/in-the-matter-of-ruben-arnulfo-chavarin-1042-e-15th-street-douglas-az-85607-order-denying-export

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July 16, 2024: 89 Fed. Reg. 57852: On December 4, 2023, in the U.S. District Court for the Southern District of New York, Robert Wise (“Wise”) was convicted of violating 18 U.S.C. 371. Specifically, Wise was convicted of conspiring to commit international money laundering by using international wire transfers to conduct U.S. dollar transactions for the benefit of a sanctioned Russian oligarch. As a result of his conviction, the Court sentenced Wise to time served, two years of supervised release, with the first 12 months in home detention, and a $100,000 fine.

https://www.federalregister.gov/documents/2024/07/16/2024-15618/in-the-matter-of-robert-wise-145-cliff-avenue-pelham-ny-10803-order-denying-export-privileges

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July 17, 2024: 89 Fed. Reg 58103: In the U.S. District Court for the District of Arizona, Melanie Ann Espinoza (“Espinoza”) was convicted of violating 18 U.S.C. 554(a). Specifically, Espinoza was convicted of smuggling approximately 7,000 rounds of Wolf 7.62 x 39 caliber ammunition, 1,500 rounds of Wolf .223 caliber ammunition, 2,000 rounds of Wolf 9 mm caliber ammunition and 50 rounds of Magtech Super .38 ammunition. As a result of her conviction, the Court sentenced Espinoza to nine months of imprisonment, with credit for time served, three years of supervised release, and a $100 special assessment.

https://www.federalregister.gov/documents/2024/07/17/2024-15636/in-the-matter-of-melanie-ann-espinoza-6605-w-pasadena-ave-apt-3-glendale-az-85301-order-denying

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July 17, 2024: Maxim Marchenko was sentenced by U.S. District Judge Nelson S. Román to three years in prison for his role in procuring dual-use, military grade OLED micro-displays for Russian end users.  Marchenko previously pled guilty to money laundering and smuggling charges before U.S. Magistrate Judge Victoria Reznik on February 29, 2024.

In addition to the prison term, Marchenko, 52, a Russian citizen who resided in Hong Kong, was sentenced to three years of supervised release.

https://www.justice.gov/usao-sdny/pr/russian-international-money-launderer-sentenced-three-years-prison-illicitly-procuring and

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

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July 17, 2024: 89 Fed. Reg. 58103: On December 14, 2023, in the U.S. District Court for the Southern District of New York, Charles McGonigal (“McGonigal”), was convicted of violating 18 U.S.C. 371. Specifically, McGonigal was convicted of conspiring to violate U.S. sanctions against Russia by going to work for a Russian oligarch whom he once investigated. As a result of his conviction, the Court sentenced McGonigal to 50 months in prison, three years of supervised release, a $100 special assessment and a fine of $40,000.

Pursuant to section 1760(e) of the Export Control Reform Act (“ECRA”),^[1] the export privileges of any person who has been convicted of certain offenses, including, but not limited to, 18 U.S.C. 371, may be denied for a period of up to ten (10) years from the date of his/her conviction. 50 U.S.C. 4819(e). In addition, any Bureau of Industry and Security (“BIS”) licenses or other authorizations issued under ECRA, in which the person had an interest at the time of the conviction, may be revoked. Id.

https://www.federalregister.gov/documents/2024/07/17/2024-15637/in-the-matter-of-charles-mcgonigal-175-w-13th-street-apt-8g-new-york-ny-10011-order-denying-export

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July 22, 2024: Ray Hunt, also known as Abdolrahman Hantoosh, Rahman Hantoosh and Rahman Natooshas, 70, of Owens Cross Roads, Alabama, pleaded guilty to conspiracy to export U.S.-origin goods to the Islamic Republic of Iran in violation of trade sanctions.

Hunt pleaded guilty to a conspiracy charge and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

https://www.justice.gov/opa/pr/alabama-man-pleads-guilty-violating-iran-sanctions and

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

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July 26, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $7,452,501 settlement with State Street Bank and Trust Company (State Street), a Massachusetts-based financial institution, on behalf of itself and its subsidiary, Charles River Systems, Inc. (Charles River).  State Street agreed to settle its potential civil liability for 38 apparent violations of OFAC’s Ukraine-/Russia-Related sanctions.  The apparent violations involved invoices that were redated or reissued by Charles River between 2016 and 2020 for certain customers who were subject to Directive 1 of Executive Order 13662, as well as certain payments outside of the applicable debt tenor accepted by Charles River from these customers.  The settlement amount reflects OFAC’s determination that the apparent violations were not voluntarily self-disclosed and were egregious.

https://ofac.treasury.gov/media/933081/download?inline and https://ofac.treasury.gov/media/933076/download?inline

Sanctions

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

July 1, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a Mexico-based money launderer and China-based members of a money laundering organization with criminal links to the Sinaloa Cartel as part of ongoing efforts to disrupt the flow of illicit narcotics into the United States. This action is the result of the U.S. government’s ongoing efforts, in cooperation with the Mexican government, to disrupt the trafficking of fentanyl and save lives — a priority under the President’s Unity Agenda. The action furthers efforts by Treasury’s Counter-Fentanyl Strike Force, which leverages Treasury’s unique expertise and capabilities to disrupt the illicit financial networks relied upon by the cartels.

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

• Acosta Ovalle, Diego of Mexico;
• He, Jiaxuan of China; and
• Tong, Peiji of China.

https://ofac.treasury.gov/recent-actions/20240701

https://ofac.treasury.gov/recent-actions?page=2

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June 10, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 13J, “Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024.”

General License 13J:

U.S. persons, or entities owned or controlled, directly or indirectly, by a U.S. person, are authorized to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations, certifications, or tax refunds to the extent such transactions are prohibited by Directive 4 under Executive Order 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation, provided such transactions are ordinarily incident and necessary to the day-to-day operations in the Russian Federation of such U.S. persons or entities, through 12:01 a.m. eastern daylight time, October 9, 2024.

This general license does not authorize:

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

Any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR, unless separately authorized.

Effective July 10, 2024, General License No. 13I, dated April 12, 2024, is replaced and superseded in its entirety by this General License No. 13J.

https://ofac.treasury.gov/media/933006/download?inline and https://ofac.treasury.gov/recent-actions/20240710

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July 11, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Tren de Aragua, a Venezuela-based transnational criminal organization that is expanding throughout the Western Hemisphere and engaging in diverse criminal activities, such as human smuggling and trafficking, gender-based violence, money laundering, and illicit drug trafficking.

The following individuals have been added to OFACs SDN List:

• Ben Haim, Reut of Israel;
• Manne, Isachar of Israel; and
• Sarid, Aviad Shlomo of Israel.

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

• Hamohoch Farm of the West Bank;
• Lehava of Israrel;
• Manne Farm Outpost of the West Bank;
• Meitarim Farm of the West Bank;
• Neriya’s Farm of the West Bank;
• Tren de Aguara of Venezuela, Colombia, Chile, Peru, Ecuado, Brazil, Bolivia, Panama, United States.

https://ofac.treasury.gov/recent-actions/20240711 and https://ofac.treasury.gov/recent-actions

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July 16, 2024:  The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned three Mexican accountants and four Mexican companies linked, directly or indirectly, to timeshare fraud led by the Cartel de Jalisco Nueva Generacion (CJNG). Concurrently, the Financial Crimes Enforcement Network (FinCEN) issued a Notice, jointly with OFAC and FBI, to financial institutions that provides an overview of timeshare fraud schemes in Mexico associated with CJNG and other Mexico-based transnational criminal organizations.

 

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

• Arredondo Pinzon, Griselda Margarita of Mexico;
• Foubert Cadena, Xeyda Del Refugio of Mexico; and
• Sanchez Martinez, Emiliano of Mexico.

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

• Bona Fide Consultores FS S.A.S., of Mexico;
• Constructora Sandgris, S. DE R.L. DE C.V., of Mexico;
• Pacifica Axis Real Estate, S.A. DE C.V., of Mexico; and
• Realty & Maintenance BJ, S.A. DE C.V. of Mexico.

https://home.treasury.gov/news/press-releases/jy2465 and https://ofac.treasury.gov/media/933016/download?inline= and https://ofac.treasury.gov/recent-actions/20240716

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July 18, 2024: The Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the Abdul Karim Conteh Human Smuggling Organization (Karim HSO), a transnational criminal organization (TCO) based in Tijuana, Mexico. Human smuggling is a federal crime in which criminals smuggle noncitizens into the United States, as well as transport and harbor noncitizens already in the country illegally, all in deliberate violation of U.S. immigration laws. Together with Department of Homeland Security and Department of Justice components, and other U.S. and foreign partners, OFAC targets these networks to disrupt their finances and illicit profits and ultimately dismantle their operations, which threaten the national security of the United States,

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

• Conteh, Abdul Karim of Mexico;
• Kamara, Issa of Mexico;
• Pidoukou, Pasaman Francis Marin Abee of Mexico; and
• Roblero Pivaral, Veronica of Mexico.

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

• Abdul Karim Conteh Human Smuggling Organization of Mexico;

https://home.treasury.gov/news/press-releases/jy2470 and https://ofac.treasury.gov/recent-actions/20240718

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July 18, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated and identified as blocked property a dozen persons and vessels, respectively, that have played a critical role in financing the Houthis’ destabilizing regional activities as part of the network of Sa’id al-Jamal. This action included Indonesia-based Malaysian and Singaporean national Mohammad Roslan Bin Ahmad and People’s Republic of China (PRC)-based Chinese national Zhuang Liang, who have facilitated illicit shipments and engaged in money laundering for the network. Sa’id al-Jamal’s network continues to provide tens of millions of dollars in revenue to the Houthis in Yemen through its shipment of Iranian commodities, including oil, a funding stream underpinning the Houthis’ ongoing attacks against commercial shipping in the Red Sea. This action targets numerous aspects of this illicit network across the spectrum of its operations, from clients and facilitators to insurance providers, vessels, and ship management firms.

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

• Bin Ahmad, Mohammad Rosland of Indonesia; and
• Zhuang, Liang of China.

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

• Alpha Shine Marine Services L.L.C of the United Arab Emirates;
• Ascent General Insurance Company of Thailand;
• Barco Ship Management Inc, of the United Arab Emirates;
• Fornacis Energy Trading Co. L.L.C of the United Arab Emirates; and
• Sea Knot Shipping Inc. of the Marshall Islands.

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

• Kasper, Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9293143; (vessel);
• Mirova Dynamic, Crude Oil Tanker Unknown flag; Vessel Registration Identification IMO 9237618 (vessel);
• Oceanic II, Products Tanker Hong Kong flag; Vessel Registration Identification IMO 9275995 (vessel);
• Tirex, Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9203772 (vessel); and
• Wanji, Chemical/Products Tanker Panama flag; Vessel Registration Identification IMO 9215103 (vessel).

https://ofac.treasury.gov/recent-actions/20240718 and https://ofac.treasury.gov/recent-actions?page=0

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July 19, 2024: The United States designated Yuliya Vladimirovna Pankratova (Pankratova) and Denis Olegovich Degtyarenko (Degtyarenko), two members of the Russian hacktivist group Cyber Army of Russia Reborn (CARR) for their roles in cyber operations against U.S. critical infrastructure. These two individuals are the group’s leader and a primary hacker, respectively.

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

• Degtyarenko, Denis Olegovich of Russia; and
• Pankratova, Yuliya Vladimirovna.

https://home.treasury.gov/news/press-releases/jy2473 and https://ofac.treasury.gov/recent-actions/20240719

*******

July 23, 2024: The United States has taken action against a network of three individuals associated with the expanded activities of the Islamic State of Iraq and Syria (ISIS) on the African continent. These individuals serve as key financiers and trusted operatives, enabling the activities of ISIS and its leaders across Central, Eastern, and Southern Africa. They also serve as critical links between far-flung ISIS operations, including ISIS affiliates in the Democratic Republic of the Congo (DRC), Mozambique, Somalia, and ISIS cells in South Africa, allowing ISIS leadership to leverage each affiliate’s capabilities to conduct terrorist attacks that undermine peace and security in the region.

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

• Gangat, Zayd of South Africa;
• Nabagala, Hamidah of the Democratic Republic of the Congo; and
• Swalleh, Abubakar of South Africa.

https://ofac.treasury.gov/recent-actions/20240723 and https://home.treasury.gov/news/press-releases/jy2477

*******

July 23, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two Mexican members of Cartel de Jalisco Nueva Generacion (CJNG) and two Mexican companies. CJNG, a Mexico-based criminal organization, is one of the largest producers and traffickers of illicit fentanyl to the United States. OFAC coordinated this action with the Government of Mexico, including its financial intelligence unit, La Unidad de Inteligencia Financiera (UIF), as well as U.S. Government partners, including the U.S. Attorney’s Office for the Central District of California, the Drug Enforcement Administration, Homeland Security Investigations, and Internal Revenue Service – Criminal Investigations.

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

• Banuelos Ramires, Jaun Carlos of Mexico; and
• Rivera Ibarra Gerardo of Mexico.

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

• Fornely Lab S.A. DE C.V. of Mexico; and
• Inmobiliaria Universal DEJA VU S.A. DE C.V. of Mexico.

https://ofac.treasury.gov/recent-actions/20240723 and https://home.treasury.gov/news/press-releases/jy2478

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July 24, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a network of six individuals and five entities based in the People’s Republic of China (PRC), involved in the procurement of items supporting the Democratic People’s Republic of Korea’s (DPRK) ballistic missile and space programs. In flagrant violation of multiple United Nations (UN) Security Council Resolutions (UNSCR), the DPRK has continued to conduct launches using ballistic missile technology, including a recent failed effort to place a military satellite into orbit in late May 2024. Moreover, the DPRK has supplied ballistic missiles to the Russian Federation, which continues to target civilian population centers and infrastructure in Ukraine, sustaining Russia’s brutal and unprovoked war.

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

• Chen, Tianxin of China;
• Du, Jiaxin of China;
• Han, Dejian of China;
• Shi, Anhui of China;
• Shi, Qianpei of China; and
• Wang, Dongliang of China.

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

• Beijing Jinghua Qidi Electronic Technology Co., LTD. of China;
• Beijing Sanshuda Electronics Science And Technology Co., LTD.
• Qidong Hengcheng Electronics Factory of China;
• Shenzen City Mean Well Electronics Co., LTD. of China; and
• Yidatong Tianjin Metal Materials Co., LTD.

https://home.treasury.gov/news/press-releases/jy2482 and https://ofac.treasury.gov/recent-actions/20240724

*******

July 25, 2024: The Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the Lopez Human Smuggling Organization (Lopez HSO), a transnational criminal organization (TCO) based in Guatemala. Human smuggling is a federal crime that includes bringing migrants into the United States illegally, as well as unlawfully transporting and harboring migrants already in the country. Working with Department of Homeland Security (DHS) components and other U.S. and foreign partners, OFAC sanctions aim to disrupt and ultimately dismantle these networks’ operations, which threaten the national security of the United States.

 

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

• Hernandez Vanegas, Karen Stefany of Guatemala;
• Lopez Ambrosio, Whiskey Hans of Guatemala; and
• Lopez Escobar, Ronaldo Galindo of Guatemala.

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

• Lopez Human Smuggling Organization of Guatemala

https://ofac.treasury.gov/recent-actions/20240725 and https://ofac.treasury.gov/media/933071/download?inline=

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July 25, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on the Congo River Alliance, known by its French name Alliance Fleuve Congo (AFC), a coalition of rebel groups that seeks to overthrow the government of the Democratic Republic of Congo (DRC) and is driving political instability, violent conflict, and civilian displacement. The principal member of AFC is the U.S.- and UN-sanctioned March 23 Movement (M23), an armed group with a long history of destabilizing the DRC’s North Kivu province and perpetrating human rights abuses. OFAC is also targeting individuals and entities associated with AFC, including Bertrand Bisimwa, the president of M23; Twirwaneho, an AFC-affiliated armed group in the DRC’s South Kivu province; and Charles Sematama, a commander and deputy military leader of Twirwaneho.

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

• Bismwa, Bertrand of The Democratic Republic Republic of the Congo; and
• Sematama, Charles of The Democratic Republic of the Congo.

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

• Congo River Alliance of The Democratic Republic of the Congo; and
• Twirwanheo of The Democratic Republic of the Congo.

https://ofac.treasury.gov/recent-actions/20240725 and https://ofac.treasury.gov/recent-actions?page=0

*******

July 30, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) targeted five individuals and seven entities based in Iran, the People’s Republic of China (PRC), and Hong Kong that have facilitated procurements on behalf of subordinates of Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL). Those designated procure various components, including accelerometers and gyroscopes, which serve as key inputs to Iran’s ballistic missile and unmanned aerial vehicle (UAV) program. Iran’s acquisition of critical missile and UAV components continues to enable its proliferation of weapons systems to its proxies in the Middle East and to Russia.

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

• Abdollahi, Mohammad of Iran;
• Hashemi, Sayyed Ali Seraj of Iran;
• Javar, Saeed Hamidi of Iran;
• Sorbani, Ezzatullah Ghasemian of Iran; and
• Tong, Thomas Ho Ming of China.

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

• Azmoon Pajohan Hesgar Limited Liability Company of Iran;
• Bright Shore Inc Limited of China;
• BTW International Limited of China;
• Buy Best Electronic Pars Company of Iran;
• Cloud Element Company Limited of China;
• Shenzhen Rion Technology Co., Ltd. of China; and
• Tas Technology Company Limited of China.

https://home.treasury.gov/news/press-releases/jy2510 and https://ofac.treasury.gov/recent-actions?page=0

 

This newsletter is a listing of the latest changes in export control regulations through June 30, 2024.  The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

 

Check out our newly added LICENSING TIPS SECTION

 

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

persons denied export privileges by the United States Government.

 

REGULATORY UPDATES

President

 

President Biden Continued The National Emergency with Respect to Belarus

 

June 13, 2024: On June 16, 2006, by Executive Order 13405, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the actions and policies of certain members of the Government of Belarus and other persons to undermine Belarus’s democratic processes or institutions, manifested in the fundamentally undemocratic March 2006 elections; to commit human rights abuses related to political repression, including detentions and disappearances; and to engage in public corruption, including by diverting or misusing Belarusian public assets or by misusing public authority.

 

The actions and policies of certain members of the Government of Belarus and other persons, and the Belarusian regime’s harmful activities and long-standing abuses, continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.  For this reason, the national emergency declared in Executive Order 13405, which was expanded in scope in Executive Order 14038, must continue in effect beyond June 16, 2024.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 13405.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/06/13/notice-on-the-continuation-of-the-national-emergency-with-respect-to-belarus-3/ and

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

 

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President Biden Continued The National Emergency with Respect to North Korea

 

June 13, 2024: On June 26, 2008, by Executive Order 13466, the President declared a national emergency with respect to North Korea pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the existence and risk of the proliferation of weapons-usable fissile material on the Korean Peninsula.  The President also found that it was necessary to maintain certain restrictions with respect to North Korea that would otherwise have been lifted pursuant to Proclamation 8271 of June 26, 2008, which terminated the exercise of authorities under the Trading With the Enemy Act (50 U.S.C. App. 1 et seq.) with respect to North Korea.

 

The existence and risk of the proliferation of weapons-usable fissile material on the Korean Peninsula and the actions and policies of the Government of North Korea continue to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.  For this reason, the national emergency declared in Executive Order 13466, expanded in scope in Executive Order 13551, addressed further in Executive Order 13570, further expanded in scope in Executive Order 13687, and under which additional steps were taken in Executive Order 13722 and Executive Order 13810, must continue in effect beyond June 26, 2024.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 13466 with respect to North Korea.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/06/13/notice-on-the-continuation-of-the-national-emergency-with-respect-to-north-korea-4/ and

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

 

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President Biden Continued The National Emergency with Respect to the Western Balkans

 

June 13, 2024: On June 26, 2001, by Executive Order 13219, the President declared a national emergency with respect to the Western Balkans pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the actions of persons engaged in, or assisting, sponsoring, or supporting, (i) extremist violence in the former Republic of Macedonia (what is now the Republic of North Macedonia) and elsewhere in the Western Balkans region, or (ii) acts obstructing implementation of the Dayton Accords in Bosnia or United Nations Security Council Resolution 1244 of June 10, 1999, in Kosovo.  The President subsequently amended that order in Executive Order 13304 of May 28, 2003, to take additional steps with respect to certain actions that obstruct implementation of, among other things, the Ohrid Framework Agreement of 2001 relating to Macedonia (what is now the Republic of North Macedonia).

 

The actions of persons threatening the peace and international stabilization efforts in the Western Balkans, including acts of extremist violence and obstructionist activity, and the situation in the Western Balkans, which stymies progress toward effective and democratic governance and full integration into transatlantic institutions, continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.  For this reason, the national emergency declared in Executive Order 13219, under which additional steps were taken in Executive Order 13304, and which was expanded in scope in Executive Order 14033, must continue in effect beyond June 26, 2024.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden is continued for 1 year the national emergency declared in Executive Order 13219 with respect to the Western Balkans.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/06/13/notice-on-the-continuation-of-the-national-emergency-with-respect-to-the-western-balkans-4/ and

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

 

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

 

Annual Report to Congress On Direct Commercial Sales Authorizations to Foreign Countries and International Organizations for Fiscal Year 2023

 

June 3, 2024: The Department of State provided it’s annual report to Congress on direct commercial sales. This report documents defense articles and defense services licensed for permanent export under Section 38 of the Arms Export Control Act (AECA), 22 U.S.C. 2778, to each foreign country and international organization during fiscal year (FY) 2023, in response to the requirements in Section 655(b)(3) of the Foreign Assistance Act (FAA) of 1961, as amended. The Department of Defense will report International Military Education and Training activities separately.

 

The report specifies the aggregate dollar value and quantity of defense articles, and defense services, authorized to each foreign country and international organization during the fiscal year, as well as data on the actual shipments of those licensed transactions. The actual-shipment data shows the total dollar value of all shipments that were authorized and exported during the fiscal year to each destination. Authorizations in this report are categorized based on the destination country. Authorizations applicable to multiple countries in the appendix are included under the designation “Various.” Documentation for shipping purposes requires a definitive destination be declared. Accordingly, actual shipments for those articles approved under the designation “Various” are attributed to the country listed on the shipping documentation.

 

The reported value of authorizations for defense articles and defense services does not correlate precisely to the value of articles actually transferred during the reporting period. The reasons for this are as follows: Most licenses issued for defense articles are valid for four years and may be used throughout the four years to execute authorized transactions. Similarly, manufacturing license and technical assistance agreements cover a wide range of programmatic activities for multi-year periods (generally exceeding the four-year validity period of defense-article export licenses). Export authorizations furnished in FY 2023 also include certain activities occurring in prior years, because the scope of the Department’s regulatory authority over such agreements continues for as long as these multi-year agreements remain in effect.

 

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=1707b48697e24a140083b3b0f053af31 and

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=6b07b48697e24a140083b3b0f053af34

 

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Department of State Sanctions Israeli Group for Disrupting and Destroying Humanitarian Aid to Civilians

 

June 14, 2024: The Department of State designated Tzav 9, a violent extremist Israeli group that has been blocking, harassing, and damaging convoys carrying lifesaving humanitarian assistance to Palestinian civilians in Gaza.  For months, individuals from Tzav 9 have repeatedly sought to thwart the delivery of humanitarian aid to Gaza, including by blockading roads, sometimes violently, along their route from Jordan to Gaza, including in the West Bank.  They also have damaged aid trucks and dumped life-saving humanitarian aid onto the road.   On May 13, 2024, Tzav 9 members looted and then set fire to two trucks near Hebron in the West Bank carrying humanitarian aid destined for men, women, and children in Gaza.

 

The provision of humanitarian assistance is vital to preventing the humanitarian crisis in Gaza from worsening and to mitigating the risk of famine.  The Government of Israel has a responsibility to ensure the safety and security of humanitarian convoys transiting Israel and the West Bank enroute to Gaza. The U.S. Government will not tolerate acts of sabotage and violence targeting this essential humanitarian assistance. As such, the U.S. Government will continue to use all tools at our disposal to promote accountability for those who attempt or undertake such heinous acts, and expects and urges that the Israeli authorities do the same.

 

https://www.state.gov/sanctioning-israeli-group-for-disrupting-and-destroying-humanitarian-aid-to-civilians/

 

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Renewal of Defense Trade Advisory Group Charter

 

June 21, 2024: 89 Fed. Reg. 50661: The Department of State announces the renewal of the Charter for the Defense Trade Advisory Group (DTAG) for another two years. The DTAG advises the Department on its support for and regulation of defense trade to help ensure the foreign policy and national security of the United States continue to be protected and advanced, while helping to reduce unnecessary impediments to legitimate exports in order to support the defense requirements of U.S. friends and allies. It is the only Department of State advisory committee that addresses defense trade related topics. The DTAG will remain in existence for two years after the filing date of the Charter unless terminated sooner. The DTAG is authorized by the Federal Advisory Committee Act.

 

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

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=054111f347b242907ddc0c03e16d43ea and

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=4d4111f347b242907ddc0c03e16d43ed

 

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Statutory Debarment Under the Arms Export Control Act and the International Traffic in Arms Regulations

 

June 25, 2024: 89 Fed. Reg. 53172: The Department of State has imposed statutory debarment under the International Traffic in Arms Regulations (ITAR) on persons convicted of violating, or conspiracy to violate, the Arms Export Control Act (AECA).

 

Pursuant to section 38(g)(4) of the AECA and section 127.7(b) and (c)(1) of the ITAR, the following persons, having been convicted in a U.S. District Court, are denied export privileges, and are statutorily debarred as of the date of this notice:

 

• Akem, Roger;
• Al Eyani, Fares Abdo;
• Bangarie, Tse Ernst;
• Chang En-Wei, Eric;
• Fonguh, Wilson Che;
• Mancho, Godlove;
• Nevidomy, Vladimir;
• Ngang, Edith;
• Ngomanji, Anye Collins;
• Nji, Eric Fru;
• Panchernikov, Igor;
• Roggio, Ross;
• Sendino, Luis Guillermo;
• Sery, Dror of California;
• Micharl, Tamufor Nchumuluh; and
• Tita, Wilson Nuyila.

 

https://www.federalregister.gov/documents/2024/06/25/2024-13878/statutory-debarment-under-the-arms-export-control-act-and-the-international-traffic-in-arms and

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

 

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Department of State Imposes Sanctions on Lions Den

 

June 26, 2024: The Department of State is imposing sanctions on “Lions’ Den,” a militant Palestinian group centered in Nablus’s Old City in the West Bank.

 

In October 2022, Lions’ Den claimed responsibility for several drive-by shootings in the Nablus area.  Lions’ Den members opened fire at Israeli vehicles driving close to the nearby settlement of Elon Moreh, injuring a taxi driver and damaging vehicles.  In a separate attack, numerous shots were fired toward the West Bank settlement of Har Bracha.  In September 2022, Lions’ Den fighters injured and killed Palestinian civilians during clashes between Palestinian fighters and Palestinian Authority Security Forces in Nablus.  In April 2024, Palestinian media reported that Lions’ Den fighters targeted Israeli forces with small arms at an Israeli checkpoint in Nablus.

 

The United States condemns all acts of violence committed in the West Bank, whoever the perpetrators, and we will use the tools at our disposal to expose and hold accountable those who threaten peace and stability there.

 

https://www.state.gov/sanctioning-violent-palestinian-group-in-the-west-bank/

 

 

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Department of Defense, Defense Security Cooperation Agency (DSCA)

 

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

 

June 5, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Taipei Economic and Cultural Representative Office In the United States (TECRO) has requested to buy non-standard spare and repair parts, components, consumables, and accessories for F-16 aircraft; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $80 million.

 

https://www.dsca.mil/press-media/major-arms-sales/taipei-economic-and-cultural-representative-office-united-states-f-0

 

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

 

June 5, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Taipei Economic and Cultural Representative Office In the United States (TECRO) has requested to buy standard spare and repair parts, components, consumables, and accessories for F-16 aircraft; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $220 million.

 

https://www.dsca.mil/press-media/major-arms-sales/taipei-economic-and-cultural-representative-office-united-states-f-1

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DSCA Notifies Congress of Potential FMS Sale to Denmark

 

June 7, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Denmark has requested to buy eighty-four (84) AIM-120C-8 Advanced Medium-Range Air-to-Air Missiles (AMRAAM) and three (3) AIM-120 AMRAAM guidance sections. Also included is the following non-MDE: spare AMRAAM control sections; containers and support equipment; munitions support and support equipment; spare parts, consumables, accessories, and repair and return support; weapons software and support equipment; classified software delivery and support; transportation support; classified publications and technical documentation; studies and surveys; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $215.5 million. The principal contractor will be RTX Corporation, located in Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

 

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

 

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DSCA Notifies Congress of Potential FMS Sale to Norway

 

June 11, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Norway has requested to buy three hundred (300) AIM-120C-8 Advanced Medium-Range Air-to-Air Missiles (AMRAAM) and twenty (20) AIM-120C-8 AMRAAM guidance sections. Also included is the following non-MDE: AMRAAM containers and support equipment; spare parts, consumables, accessories, and repair and return support; weapons software, support equipment, and classified software delivery and support; transportation support; classified publications and technical documentation; training; studies and surveys; U.S. Government and contractor engineering; technical and logistics support services; and other related elements of logistics and program support. The estimated total cost is $1.94 billion.  The principal contractor will be RTX Corporation, located in Tucson, AZ. The purchaser typically requests offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

 

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

 

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DSCA Notifies Congress of Potential FMS Sale to The Netherlands

 

June 13, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of the Netherlands has requested to buy one-hundred seventy-four (174) Advanced Medium-Range Air-to-Air Missiles-Extended Range (AMRAAM-ER) and four AMRAAM-C8 guidance sections. Also included is the following non-MDE: AMRAAM containers, load trainers, control section spares and support equipment; KGV-135A cryptographic devices; Common Munition Built-in-Test (BIT)/Reprogramming Equipment (CMBRE); ADU-891 Adaptor Group Test Sets; integration and test support and equipment; munitions support and support equipment; spare parts, consumables, and accessories, and repair and return support; classified software delivery and support; classified and unclassified publications, and technical documentation; personnel training and training equipment; studies and surveys; Contractor Logistics Support (CLS); U.S. Government and contractor engineering, technical and logistics support services; and other related elements of logistics and program support. The estimated total cost is $678 million. The principal contractor will be RTX Corporation, located in Camden, AR. The purchaser typically requires offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor.

 

https://www.dsca.mil/press-media/major-arms-sales/netherlands-advanced-medium-range-air-air-missiles-extended-range

 

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

 

June 18, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Taipei Economic and Cultural Representative Office In the United States (TECRO) has requested to buy seven hundred twenty (720) Switchblade 300 (SB300) All Up Rounds (AURs) (includes 35 fly-to-buy AURs) and one hundred one (101) SB300 fire control systems (FCS). The following non-Major Defense Equipment will also be included: first line spares packs; operator manuals; operator and maintenance training; logistics and fielding support; Lot Acceptance Testing (LAT); U.S. Government technical assistance, including engineering services, program management, site surveys, facilities, logistics, and maintenance evaluations; quality assurance and de-processing team; field service representative(s); transportation; and other related elements of logistics and program support. The estimated total cost is $60.2 million. The principal contractor will be AeroVironment, Inc., located in Simi Valley, CA. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/taipei-economic-and-cultural-representative-office-united-states-34

 

*******

 

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

 

June 18, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Taipei Economic and Cultural Representative Office In the United States (TECRO) has requested to buy the following non-MDE: up to 291 ALTIUS 600M-V systems, comprised of an Unmanned Aerial Vehicle (UAV) loitering munition with extensible warhead and electro-optical/infrared (EO/IR) camera; ALTIUS 600 inert training UAVs; Pneumatic Integrated Launch Systems (PILS); PILS transport trailers; ground control systems; associated support, including spares; battery chargers; operator and maintenance training; operator, maintenance, and training manuals; technical manuals; logistics and fielding support; testing; technical assistance CONUS and OCONUS, including for engineering services; program management; site surveys; facility, logistics and maintenance evaluations; quality assurance and de-processing team support; field service representative support; transportation; and other related elements of logistics and program support. The estimated total cost is $300 million. The principal contractor will be Anduril, located in Atlanta, GA. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/taipei-economic-and-cultural-representative-office-united-states-34

 

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

 

Department of Commerce Announces Additional Export Restrictions to Counter Russian Aggression

 

June 12, 2024: In advance of the G7 Summit on June 12, and in concert with the Department of the Treasury and the Department of State, the Commerce Department’s Bureau of Industry and Security (BIS) announced several significant additional export control restrictions and related actions against Russia to further degrade its ability to continue waging war against Ukraine. These actions underscore the Biden-Harris Administration’s unwavering commitment to countering Russian aggression and its illegal, unjustified, and unprovoked war in Ukraine.

 

Key actions include:

 

1. Cracking down on diversion through shell companies;

1. Further cutting off exports of business software that enable Russian and Belarusian defense industries;

1. Restricting trade in more items destined to Russia and Belarus;

1. Tightening the availability of license exceptions for Russia and Belarus;

1. Cutting off trade to foreign companies through the Entity List;

1. Issuing Temporary Denial Orders (TDO), which cuts off not only the right to export items subject to the Export Administration Regulations (EAR) from the U.S., but also to receive or participate in exports from the U.S. or reexports of items subject to the EAR;

1. Restricting distributors and transhippers.

 

https://www.bis.gov/press-release/department-commerce-announces-additional-export-restrictions-counter-russian and

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

 

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BIS Updates Boycott Requester List

 

June 27, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) published its first quarterly update of the boycott Requester List. This list notifies companies, financial institutions, freight forwarders, individuals, and other U.S. persons of potential sources of certain boycott-related requests they may receive during the regular course of business.

 

The updated public list of entities from the countries listed below who have been identified as having made a boycott-related request in reports received by BIS includes 57 additions. BIS has also removed 127 entities. The list is posted on the Office of Antiboycott Compliance (OAC) webpage link with the objective of helping U.S. persons comply with the reporting requirements of the antiboycott regulations set forth in Part 760 of the Export Administration Regulations (EAR), 15 CFR Parts 730-774.

The countries included on the boycott requestor list are:

• Bangladesh
• Malaysia
• Saudi Arabia
• Qatar
• United Arab Emirates
• Oman
• Kuwait
• Bahrain
• Norway
• India
• Pakistan
• Japan
• Algeria
• Afghanistan
• Singapore
• Brazil
• Hong Kong
• United Kingdom
• Turkey
• Iraq
• Switzerland
• Libyan Arab Jamahirya

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

https://www.bis.gov/sites/default/files/files/OAC%20Requester%20List%20June%202024.pdf

 

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U.S. Census Bureau

Tips on How to Resolve AES Response Messages

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

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

Response Code: 123

Narrative:     Conveyance Name Missing

Severity:       Fatal

Reason:        The Conveyance Name/Carrier Name is missing when the Mode of Transportation is one that requires the Conveyance Name/Carrier Name to be reported.

Resolution:  The name of the transport conveyance must be reported on an EEI for the major modes of transportation (i.e., vessel, air, rail, truck).  For Vessel shipments, report the name of the vessel; for Air, Rail, or Truck shipments report the carrier name.

Verify the Mode of Transportation and the Conveyance Name/Carrier Name, correct the shipment and resubmit.

Fatal Error Response Code: 138

Narrative:     Port of Unlading Missing

Severity:       Fatal

Reason:        The Port of Unlading Code is missing.  All vessel shipments, and any air shipments between the United States and Puerto Rico must provide a Port of Unlading Code.

Resolution:  The Port of Unlading Code is the foreign port where the exported merchandise is unloaded from the exporting carrier.  Report a valid Port of Unlading Code for all vessel shipments, and any air shipments between the United States and Puerto Rico.

Verify the Port of Unlading Code, correct the shipment and resubmit.

It is important that AES filers correct Fatal Errors as soon as they are received in order to comply with the Foreign Trade Regulations.  These errors must be corrected prior to export for shipments filed predeparture and as soon as possible for shipments filed postdeparture but not later than five calendar days after departure.

 

LICENSING TIPS

 

Department of State licensing:

• DDTC policy – Letters of Intent may not exceed $2Million dollars
• DDTC Policy – Limited Defense Service licensing is generally limited to 6 months
• DDTC licensing – The ultimate end platform must be specified in the specific purpose block. You must identify exactly where the item being exported or reexported will ultimately be used
• Do not use the Government of XXXXX, as the end user, you must list the specific government agencies, i.e. Ministry of Defense

 

Department of Commerce licensing:

• 748P applications for firearm-related transactions
• Purchase order dated within one year of submission for license applications to destinations outside of Country Group A: 1,
• Passport or other national identity card information for applications to export or reexport to individual end users (natural persons) outside of Country Group A:1.
• Import certificate or import permit from the ultimate destination, if that destination requires one, per Section 748.12.

 

LATEST SANCTIONS FINES & PENALTIES

 

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

 

Fines and Penalties

 

June 3, 2024: the Department of Commerce’s Bureau of Industry and Security (BIS) imposed a civil penalty of $44,750 against Airbus DS Government Solutions Inc. (ADSGS), a satellite communications and networking systems company located in Plano, Texas, to resolve three violations of the antiboycott provisions of the Export Administration Regulations (EAR), as alleged in BIS’s Proposed Charging Letter.  ADSGS voluntarily self-disclosed the conduct to BIS, cooperated with the investigation by BIS’s Office of Antiboycott Compliance (OAC), and took remedial measures after discovering the conduct at issue, all of which resulted in a significant reduction in penalty.

 

https://www.bis.gov/press-release/bis-imposes-penalty-texas-company-airbus-ds-government-solutions-inc-resolve-alleged and

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

 

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June 12, 2024: An indictment was returned on June 11, 2024 in the District of Alaska charging Sergey Nefedov, 40, of Anchorage, Alaska, and Mark Shumovich, 35, of Bellevue, Washington, with allegedly operating a scheme to illegally export nearly half a million dollars’ worth of snowmachines and associated parts from the United States to Russia without the required licenses and approvals, in violation of U.S. export laws. Nefedov and Shumovich were arrested yesterday morning in Alaska and Washington, respectively.

 

Authorities seized all snowmachines related to this case. Nefedov and Shumovich are charged with the following offenses, which carry associated maximum penalties as follows: conspiracy to unlawfully export goods from the U.S. and defraud the U.S. (5 years in prison); false electronic export information activities (5 years in prison); smuggling (10 years in prison); unlawful export without a license in violation of the Export Control Reform Act (20 years in prison); and conspiracy to commit international money laundering (20 years in prison). Nefedov is also charged with money laundering and making a false statement in violation of the Export Control Reform Act of 2018, which both carry maximum penalties of 20 years in prison. The defendants face a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

 

https://www.justice.gov/usao-ak/pr/two-russia-born-us-citizens-arrested-conspiring-send-500000-worth-luxury-goods-russia?fbclid=IwZXh0bgNhZW0CMTAAAR05HAJN-2f9wjR9CjBObw5ff4hwFOUz7GlN8-0zv03LDnd0mZZE43o9ZSI_aem_AU80safIpkI-MfyfHXMjAvd3PgMuSjmuWScqi7RF1xjTMbArz1sUaSwKnalwisYjNXRT9lli_7nT3Wvi1-krCz1v and

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

 

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June 13, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) imposed a civil penalty of $285,000 against Sapphire Havacilik San Ltd. STI (Sapphire), an aviation company headquartered in Ankara, Türkiye, to resolve violations of the Export Control Reform Act of 2018 (ECRA) alleged in BIS’s Proposed Charging Letter.  As described in the Settlement Agreement and Proposed Charging Letter, in October 2023 and in January 2024, Sapphire flew private charter flights involving a U.S.-origin Gulfstream aircraft into Russia without a required BIS license.

 

The U.S. Department of Commerce, through BIS, responded to the Russian Federation’s further invasion of Ukraine by implementing a sweeping series of stringent export controls that severely restrict Russia’s access to technologies and other items, including luxury goods.  As part of those controls, effective February 24, 2022, BIS imposed expansive controls on aviation-related items to Russia, including a license requirement for the export, reexport, or transfer (in-country) to Russia of any aircraft or aircraft parts specified under any export control classification number.

 

https://www.bis.gov/press-release/bis-imposes-285000-penalty-against-sapphire-havacilik-san-ltd-sti-resolve-alleged and

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

 

 

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June 17, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) has imposed a three-year denial order against USGoBuy LLC of Portland, Oregon, prohibiting USGoBuy from participating in all exports under BIS jurisdiction from the United States. BIS activated this denial order—originally included as a suspended penalty pursuant to a 2021 settlement agreement with USGoBuy that resolved previous alleged violations of the Export Administration Regulations (EAR)—due to USGoBuy’s continued violations of the EAR and failure to address its past compliance failures.

 

USGoBuy is a package forwarding company that allows non-U.S.-based customers to purchase items online from U.S. retailers and have those items shipped to the company’s warehouse in Oregon. USGoBuy then consolidates and re-packages the items for export from the United States.

 

https://www.bis.gov/press-release/commerce-department-denies-export-privileges-package-forwarding-company-usgobuy and

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

 

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June 17, 2024: 89 Fed. Reg. 51302: the Bureau of Industry and Security (“BIS”), U.S. Department of Commerce, through its Office of Export Enforcement (“OEE”), has requested the issuance of an Order temporarily denying, for a period of 180 days, the export privileges under the Regulations of: Alexey Sumchenko (“Sumchenko”), Anna Shumakova (“Shumakova”), Branimir Salevic (“Branimir”), Danijela Salevic (“Danijela”); SkyTechnic, Skywind International Limited (“Skywind”), Hong Fan International (“Hong Fan”), Lufeng Limited (“Lufeng”), Unical dis Ticaret Ve Lojistik LSC (“Unical”), and Izzi Cup DOO (“Izzi Cup”) (collectively, the “Respondents”).

 

OEE’s request and related information indicate that these parties are located in the Russian Federation, Hong Kong, the British Virgin Islands, Turkey, Serbia, and Indonesia at the respective addresses listed on the caption page of this order. OEE’s request and related information further indicates that SkyTechnic, a Russian aircraft parts supplier, has developed and continues to utilize a network of Hong Kong-based shell companies, including Skywind, Hong Fan, and Lufeng, to obtain civil aircraft parts from the United States and obfuscate the ultimate end users of those parts in Russia, contrary to the requirements of the Export Administration Regulations.

 

https://www.federalregister.gov/documents/2024/06/17/2024-13258/order-temporarily-denying-export-privileges

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June 17, 2024: 89 Fed. Reg 51305: The Bureau of Industry and Security (“BIS”), U.S. Department of Commerce, through its Office of Export Enforcement (“OEE”), has requested the issuance of an Order temporarily denying, for a period of 180 days, the export privileges under the Regulations of: Turboshaft FZE (“Turboshaft”), Treetops Aviation (“Treetops”), Black Metal FZE (“Black Metal”), Timur Badr, and Elaine Balingit (collectively, the “Respondents”). OEE’s request and related information indicate that the parties are located in the United Arab Emirates (“UAE”), at the respective addresses listed on the caption page of this order, and that Badr, a Russian national, owns or controls Turboshaft FZE and Treetops Aviation.

 

https://www.federalregister.gov/documents/2024/06/17/2024-13257/order-temporarily-denying-export-privileges

 

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June 20,2024: A Fort Smith, Arkansas man, Neil Ravi Mehta, age 32, was sentenced to 57 months in federal prison followed by three years of supervised release and ordered to pay $659,825.52 in restitution, on one count of Possession of an Unregistered Firearm that was a Destructive Device, one count of Fraud and False Statements related to Tax Returns, and one count of False Declaration Before a Court.

 

In a separate case, Federal Armament LLC, which was owned by Neil Ravi Mehta, was sentenced to five years of probation and ordered to pay a fine of $500,000.00 on one count of Unlawfully Importation and Receipt of Firearms and one count of Filing False or Misleading Electronic Export Information. Federal Armament LLC was also ordered to forfeit the illegally imported firearms.

 

 

https://www.justice.gov/usao-wdar/pr/fort-smith-arms-dealer-neil-ravi-mehta-and-his-company-federal-armament-llc-sentenced

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June 24, 2024: As part of a settlement agreement, the Department of Commerce’s Bureau of Industry and Security (BIS) issued an order imposing an administrative penalty on Indiana University (IU) related to exports by IU’s Bloomington Drosophila Stock Center (BDSC).

 

This settlement resolves the allegations set forth in a Proposed Charging Letter (PCL) regarding 42 violations related to the export of fruit flies genetically modified to produce a subunit of a controlled toxin. These exports went to numerous research institutions and universities worldwide without the required export licenses. IU voluntarily disclosed the conduct to BIS, cooperated with the investigation by BIS’s Office of Export Enforcement (OEE), and took remedial measures after discovering the conduct at issue, which resulted in a significant reduction in the penalty.

 

https://www.bis.gov/press-release/bis-settles-alleged-export-control-violations-indiana-university and

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

 

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Sanctions

 

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

 

Implementation of Additional Sanctions Against Russia and Belarus Under the Export Administration Regulations (EAR) and Refinements to Existing Controls

 

June 18, 2024: 89 Fed. Reg. 51644: The Department of Commerce’s Bureau of Industry and Security (BIS) made changes to the Russia and Belarus sanctions under the Export Administration Regulations (EAR). This final rule imposes additional export control measures against Russia and Belarus by expanding the scope of items identified under two EAR supplements that are subject to the EAR’s Russian and Belarusian industry sector sanctions; imposing a “software” license requirement for certain EAR99-designated “software” when destined to or within Russia or Belarus; and narrowing the scope of commodities and software that may be authorized for export, reexport, or transfer (in-country) to or within Russia or Belarus under License Exception Consumer Communications Devices (CCD).

 

To promote clarity and facilitate compliance, this final rule also consolidates the EAR’s Russian and Belarus sanctions into a single section, while maintaining the existing related regulatory supplements identifying items that are subject to certain of those sanctions. This final rule also amends the EAR by adding five entities and eight addresses to the Entity List and making changes to the Entity List structure. These entries are listed on the Entity List under the destinations of the People’s Republic of China (China) and Russia and have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. Lastly, this final rule makes two additional revisions to the EAR: one to confirm the criteria used when revising, suspending, or revoking EAR license exceptions and one revision to clarify the control status of fasteners for purposes of the EAR’s Russian and Belarusian industry sector sanctions.

 

https://www.federalregister.gov/documents/2024/06/18/2024-13148/implementation-of-additional-sanctions-against-russia-and-belarus-under-the-export-administration

 

 

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June 20, 2024:  The Department of Commerce’s Bureau of Industry and Security (BIS) announced a Final Determination prohibiting Kaspersky Lab, Inc., the U.S. subsidiary of a Russia-based anti-virus software and cybersecurity company, from directly or indirectly providing anti-virus software and cybersecurity products or services in the United States or to U.S. persons. The prohibition also applies to Kaspersky Lab, Inc.’s affiliates, subsidiaries and parent companies (together with Kaspersky Lab, Inc., “Kaspersky”).

 

This action is the first of its kind and is the first Final Determination issued by BIS’s Office of Information and Communications Technology and Services (OICTS), whose mission is to investigate whether certain information and communications technology or services transactions in the United States pose an undue or unacceptable national security risk. Kaspersky will generally no longer be able to, among other activities, sell its software within the United States or provide updates to software already in use. The full list of prohibited transactions can be found at oicts.bis.gov/kaspersky.

In addition to this action, BIS added three entities—AO Kaspersky Lab and OOO Kaspersky Group (Russia), and Kaspersky Labs Limited (United Kingdom)—to the Entity List for their cooperation with Russian military and intelligence authorities in support of the Russian Government’s cyber intelligence objectives.

 

This Final Determination and Entity Listing are the result of a lengthy and thorough investigation, which found that the company’s continued operations in the United States presented a national security risk—due to the Russian Government’s offensive cyber capabilities and capacity to influence or direct Kaspersky’s operations—that could not be addressed through mitigation measures short of a total prohibition.

 

Individuals and businesses that utilize Kaspersky software are strongly encouraged to expeditiously transition to new vendors to limit exposure of personal or other sensitive data to malign actors due to a potential lack of cybersecurity coverage. Individuals and businesses that continue to use existing Kaspersky products and services will not face legal penalties under the Final Determination. However, any individual or business that continues to use Kaspersky products and services assumes all the cybersecurity and associated risks of doing so.

 

In order to minimize disruption to U.S. consumers and businesses and to give them time to find suitable alternatives, the Department’s determination will allow Kaspersky to continue certain operations in the United States—including providing anti-virus signature updates and codebase updates—until 12:00AM Eastern Daylight Time (EDT) on September 29, 2024.

 

https://www.bis.gov/press-release/commerce-department-prohibits-russian-kaspersky-software-us-customers and

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

 

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June 24, 2024: 89 Fed. Reg. 52362: In this rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding 3 entries to the Entity List, under the destinations of Russia (2), and the United Kingdom (1). These entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States.

 

The following entries have been added to the Entity List:

 

Russia

• AO Kaspersky Lab; and
• OOO Kaspersky Group.

 

United Kingdom

• Kaspersky Labs Limited.

 

https://www.federalregister.gov/documents/2024/06/24/2024-13695/additions-to-the-entity-list

 

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

 

Syrian Sanctions Regulations

 

June 6, 2024: 89 Fed. Reg. 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) adopted a final rule amending the Syrian Sanctions Regulations to, among other things, implement the relevant provisions of a May 1, 2012 Executive Order regarding foreign sanctions evaders with respect to Syria and Iran, and certain provisions of the Iran Threat Reduction and Syria Human Rights Act of 2012, the Countering America’s Adversaries Through Sanctions Act, and the Caesar Syria Civilian Protection Act of 2019. In addition to new prohibitions, OFAC is adding several relevant definitions and interpretations and one new general license. OFAC is also incorporating, with amendments, one general license, which has until now appeared only on OFAC’s website, and updating six general licenses.

OFAC also issued a new Syria Frequently Asked Question (FAQ 1180)

 

FAQ 1180:

 

Question: What changes did OFAC make in the June 5, 2024 regulatory amendments to the Syrian Sanctions Regulations, 31 CFR part 542 (SySR)?

 

Answer: On June 5, 2024, OFAC, in consultation with the Department of State, amended the SySR to, among other things, incorporate certain sanctions statutes, including the Caesar Syria Civilian Protection Act of 2019, which are designed to deny the Assad Regime the resources it needs to support its longstanding campaign of repression against the Syrian people.  The amendments also incorporate a web General License (GL) and modify certain existing GLs to facilitate the continued provision of legitimate humanitarian assistance and internet-based communications services to civilians in Syria and clarify the applicability of the SySR to persons sanctioned under certain sanctions authorities.  These changes include:

 

• Incorporation of Executive order and sanctions statutes: OFAC incorporated into the SySR the Caesar Syria Civilian Protection Act of 2019, the Syria Human Rights Accountability Act of 2012, and the Iran Threat Reduction and Syria Human Rights Act of 2012, as well as relevant provisions of the Countering America’s Adversaries Through Sanctions Act and Executive Order (E.O.) 13608.
• Incorporation of web GL 22 related to economic sectors in certain areas of Syria: OFAC incorporated into the SySR, at new § 542.533, web GL 22, which authorizes activities in certain economic sectors in non-regime held areas of Northeast and Northwest Syria.
• Additional non-governmental organization (NGO) activities: OFAC amended the GL related to the activities of nongovernmental organizations (NGO) at § 542.516.  These changes clarify which types of persons are covered by the NGO GL; add new authorized activities; and clarify that U.S. financial institutions may rely on statements of the originator of a funds, provided that the financial institution does not know or have reason to know that the funds transfer is not in compliance with the NGO GL.
• Additional international organizations (IO): OFAC amended the GL related to the activities of international organizations (IO) at § 542.513.  These changes add new IOs whose official business is authorized by the GL to include the International Committee of the Red Cross and the International Federation of Red Cross and Red Crescent Societies; and The Global Fund to Fight AIDS, Tuberculosis, and Malaria, and Gavi, the Vaccine Alliance.
• Expansion of authorization for internet-based communications: OFAC amended the GL related to internet-based communications at § 542.511.  These changes update the list of examples of communications technologies that are incident to, or enable services incident to, communications over the internet; authorize the provision of services incident to the export or reexport of certain communications software or hardware not subject to the Export Administration Regulations (“EAR”), 15 C.F.R. parts 730-774, that is incident to, or enables services incident to, communications over the internet, subject to certain conditions; and authorize the exportation and re-exportation to Syria of non-commercial-grade internet connectivity services

 

https://www.federalregister.gov/documents/2024/06/06/2024-12317/syrian-sanctions-regulations and

https://ofac.treasury.gov/media/932916/download?inline and

https://ofac.treasury.gov/media/932911/download?inline

 

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June 6, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the Ecuador-based Los Lobos Drug Trafficking Organization (Los Lobos) and its leader Wilmer Geovanny Chavarria Barre (also known as “Pipo”). Numbering thousands of members, Los Lobos has emerged as Ecuador’s largest drug trafficking organization and contributes significantly to the violence gripping the country. This action builds on Treasury’s February 7 designation of Los Choneros a prominent Ecuadorian drug gang—and comes as Ecuadorian criminal organizations backed by Mexico’s Cartel Jalisco Nueva Generación (CJNG) and Sinaloa Cartel continue to drive violence and instability in Ecuador.

 

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

 

• Chavarria Barre, Wilmer Geovanny of Ecuador.

 

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

 

• Los Lobos Drug Trafficking Organization of Ecuador.

 

https://home.treasury.gov/news/press-releases/jy2394 and

https://home.treasury.gov/news/press-releases?page=2

 

 

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June 6, 2024: In response to the Department of State’s sanction on “Lions’ Den” a militant Palestinian group centered in Nablus’s Old City in the West Bank, Department of the Treasury’s Office of Foreign Assets Control (OFAC) added the following entities to its SDN List:

 

 

• Al Jil Alqadem General Trading L.L.C. of the United Arab Emirates;
• Al Zumoroud and Al Yaqoot Gold and Jewllers Trading L.L.C of the United Arab Emirates;
• Capital Tap General Trading L.L.C. of the United Arab Emirates;
• Capital Tap Holding L.L.C. of the United Arab Emirates;
• Capital Tap Management and Consultancies L.L.C of the United Arab Emirates:
• Creative Python L.L.C. of the United Arab Emirates;
• Horizon Advanced Solutions General Trading – Sole Proprietorship L.L.C. of the United Arab Emirates; and
• Lions’ Den of the West Bank.

 

https://ofac.treasury.gov/recent-actions/20240606

 

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June 10, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned ten individuals, entities, and vessels, including tanker captains, in multiple jurisdictions that have engaged in the illicit transport of oil and other commodities, including for the network of Houthi financial facilitator Sa’id al-Jamal. This action targets maritime shipping and financial facilitators, several vessel managers and owners, and a company involved in forging shipping documents. This action, the seventh round of sanctions targeting the network of Sa’id al-Jamal since October 2023, underscores the U.S. government’s commitment to isolating and disrupting the financing of international terrorist groups such as the Houthis.

 

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

 

• Al-Jamal, Abdallah Najib Ahmad of Yemen;
• Aruldhas, John Britto of the United Arab Emirates;
• Choudhary, Sandeep Singh of India; and
• Pandey, Vivek Ashok of India.

 

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

 

• Lainey Shipping Limited of China;
• Louis Marine Shipholding Enterprises S.A. of Turkey;
• Rayyan Shipping Private Limited of India;
• Shark International Shipping L.L.C. of the United Arab Emirates.

 

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

 

• Bella 1, Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9230880; and
• Janet, Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9220952.

 

https://ofac.treasury.gov/recent-actions/20240610 and

https://ofac.treasury.gov/recent-actions?page=0

 

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June 11, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned members of one of Guyana’s wealthiest families, Nazar Mohamed (Nazar) and his son, Azruddin Mohamed (Azruddin), their company, Mohamed’s Enterprise, and a Guyanese government official, Mae Thomas (Thomas), for their roles in public corruption in Guyana.Additionally, OFAC designated two other entities, Hadi’s World and Team Mohamed’s Racing Team, for being owned or controlled by Mohamed’s Enterprise and Azruddin, respectively. These individuals and entities are sanctioned pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world.

 

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

 

• Mohamed, Azruddin Intiaz of Guyana;
• Mohammed, Nazar of Guyana;
• Thomas, Mae Toussaint of Guyana.

 

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

 

• Hadi’s World Incorporated of Guyana;
• Mohamed’s Enterprise of Guyana;
• Team Mohamed’s Racing Team.

 

https://ofac.treasury.gov/recent-actions/20240611 and

https://ofac.treasury.gov/recent-actions?page=0

 

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June 12, 2024: As President Biden and Group of Seven (G7) Leaders met in Italy, the U.S. Department of the Treasury issued sweeping new measures guided by G7 commitments to intensify the pressure on Russia for its continued cruel and unprovoked war against Ukraine. These actions ratchet up the risk of secondary sanctions for foreign financial institutions that deal with Russia’s war economy; restrict the ability of Russian military-industrial base to take advantage of certain U.S. software and information technology (IT) services; and, together with the Department of State, target more than 300 individuals and entities both in Russia and outside its borders including in Asia, the Middle East, Europe, Africa, Central Asia, and the Caribbean whose products and services enable Russia to sustain its war effort and evade sanctions.

 

Treasury targeted the architecture of Russia’s financial system, which has been reoriented to facilitate investment into its defense industry and acquisition of goods needed to further its aggression against Ukraine. Treasury also targeted more than a dozen transnational networks laundering gold for a designated Russian gold producer, supporting Russia’s production of unmanned aerial vehicles (UAVs), and procuring sensitive and critical items such as materials for Russia’s chemical and biological weapons program, anti-UAV equipment, machine tools, industrial machinery, and microelectronics. This action also takes further steps to limit Russia’s future revenue from liquefied natural gas.

 

The State Department targeted over 100 entities and individuals engaged in the development of Russia’s future energy, metals, and mining production and export capacity; sanctions evasion and circumvention; and furthering Russia’s ability to wage its war against Ukraine.

 

OFAC also issued Russia-related General License 6D, 8J, 25D, 98, 99, and 100.

 

General License No. 6D: All transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587, related to:

 

(1) the production, manufacturing, sale, transport, or provision of agricultural commodities, agricultural equipment, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices;

(2) the prevention, diagnosis, or treatment of COVID-19 (including research or clinical studies relating to COVID-19); or (3) clinical trials and other medical research activities are authorized.

 

For the purposes of this general license, agricultural commodities, medicine, and medical devices are defined as follows:

 

(1) Agricultural commodities.  For the purposes of this general license, agricultural commodities are products that fall within the term “agricultural commodity” as defined in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602) and are intended for use as:

 

• Food for humans (including raw, processed, and packaged foods; live animals; vitamins and minerals; food additives or supplements; and bottled drinking water) or animals (including animal feeds);
• (ii) Seeds for food crops;
• (iii) Fertilizers or organic fertilizers; or
• (iv) Reproductive materials (such as live animals, fertilized eggs, embryos, and semen) for the production of food animals.

 

(2) Medicine.  For the purposes of this general license, medicine is an item that falls within the definition of the term “drug” in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).

(3) Medical devices.  For the purposes of this general license, a medical device is an item that falls within the definition of “device” in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).

 

This general license does not authorize:

 

(1) The opening or maintaining of a correspondent account or payable-through account for or on behalf of any entity subject to Directive 2 under Executive Order (E.O.) 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions;

 

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

 

(3) Transactions prohibited by E.O. 14066, E.O. 14068, or E.O. 14071, except for transactions prohibited by the determination of May 8, 2022, made pursuant to section 1(a)(ii) of E.O. 14071, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services,” or the determination of June 12, 2024, made pursuant to section 1(a)(ii) of E.O. 14071, “Prohibition on Certain Information Technology and Software Services.”

 

Effective June 12, 2024, General License No. 6C, dated January 17, 2023, is replaced and superseded in its entirety by this General License No. 6D

 

General License No. 8J:

 

All transactions prohibited by Executive Order (E.O.) 14024 involving one or more of the following entities that are related to energy are authorized, through 12:01 a.m. eastern daylight time, November 1, 2024:

 

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

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

(3) Sovcombank Open Joint Stock Company;

(4) Public Joint Stock Company Sberbank of Russia;

(5) VTB Bank Public Joint Stock Company;

(6) Joint Stock Company Alfa-Bank;

(7) Public Joint Stock Company Rosbank;

(8) Bank Zenit Public Joint Stock Company;

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

(10) National Clearing Center (NCC);

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

(12) the Central Bank of the Russian Federation.

 

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

 

This general license does not authorize:

 

(1) Any transactions prohibited by Directive 1A under E.O. 14024, Prohibitions Related to Certain Sovereign Debt of the Russian Federation;

(2) The opening or maintaining of a correspondent account or payable-through account for or on behalf of any entity subject to Directive 2 under E.O. 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions;

(3) Any debit to an account on the books of a U.S. financial institution of the Central Bank of the Russian Federation; or

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

 

Effective June 12, 2024, General License No. 8I, dated April 29, 2024, is replaced and superseded in its entirety by this General License No. 8J.

 

General License No. 25D:

 

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

 

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

 

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

 

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

 

This general license does not authorize:

 

(1) The opening or maintaining of a correspondent account or payable-through account for or on behalf of any entity subject to Directive 2 under Executive Order (E.O.) 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions;

 

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

 

(3) Any transactions prohibited by E.O. 14066 or E.O. 14068; or

 

(4) Any transactions involving Joint Stock Company Channel One Russia, Joint Stock Company NTV Broadcasting Company, Television Station Russia-1, Limited Liability Company Algoritm, New Eastern Outlook, Oriental Review, or Garantex Europe OU, unless separately authorized.

 

Effective June 12, 2024, General License No. 25C, dated July 14, 2022, is replaced and superseded in its entirety by this General License No. 25D.

 

General License No. 98:

 

All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of any transaction involving one or more of the following blocked entities are authorized through 12:01 a.m. eastern daylight time, July 27, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR):

 

(1) Aviatech FZC

 

(2) Beijing Deepcool Industries Co., Ltd.

 

(3) Guangdong Pratic CNC Technology Co., Ltd.

 

(4) Joint Stock Company Uralredmet (5) Joint Stock Company Goznak

 

(5) Joint Stock Company Goznak

 

(6) Limited Liability Company Elga Stroy Mining Services

 

(7) Limited Liability Company Elgaugol

 

(8) Limited Liability Company Management Company Elga

 

(9) Limited Liability Company Koulstar

 

(10) Max Jet Service Limited Liability Company

 

(11) Mile Hao Xiang Technology Co., Ltd.

 

(12) Platin Group Machine Manufacturing International Company Limited

 

(13) Public Joint Stock Company Seligdar

 

(14) Shandong Oree Laser Technology Co., Ltd.

 

(15) Wuhan Tianyu Information Industry Co., Ltd; or

 

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

 

(b) This general license does not authorize:

 

(1) Any transactions prohibited by Directive 2 under E.O. 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions;

 

(2) Any transactions prohibited by Directive 4 under E.O. 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation; or

(3) Any transactions otherwise prohibited by the RuHSR, including transactions involving any person blocked pursuant to the RuHSR other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.

 

General License No. 99:

 

All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of any transaction involving one or more of the following blocked entities are authorized through 12:01 a.m. eastern daylight time, August 13, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR):

 

(1) Moscow Exchange (MOEX);

 

(2) National Clearing Center (NCC);

 

(3) Non-Bank Credit Institution Joint Stock Company National Settlement Depository (NSD); and

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

 

All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the divestment or transfer, or the facilitation of the divestment or transfer, of debt or equity issued or guaranteed by any of the blocked entities identified in paragraph (a) (“Covered Debt or Equity”) to a non-U.S. person are authorized through 12:01 a.m. eastern daylight time, August 13, 2024, 2024:

 

All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to facilitating, clearing, and settling trades of Covered Debt or Equity that were placed prior to 4:00 p.m. eastern daylight time, June 12, 2024 are authorized through 12:01 a.m. eastern daylight time, August 13, 2024, 2024.

 

All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the wind down of derivative contracts entered into prior to 4:00 p.m. eastern daylight time June 12, 2024 that (i) include a blocked person described in paragraph (a) of this general license as a counterparty or (ii) are linked to Covered Debt or Equity are authorized through 12:01 a.m. eastern daylight time August 13, 2024, provided that any payments to a blocked person are made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).

 

This general license does not authorize:

 

(1) U.S. persons to sell, or to facilitate the sale of, Covered Debt or Equity to, directly or indirectly, any person whose property and interests in property are blocked; or

 

(2) U.S. persons to purchase or invest in, or to facilitate the purchase of or investment in, directly or indirectly, Covered Debt or Equity, other than purchases of or investments in Covered Debt or Equity ordinarily incident and necessary to the divestment or transfer of Covered Debt or Equity as described in paragraph (b) of this general license.

 

This general license does not authorize:

 

(1) Any transactions prohibited by Directive 2 under E.O. 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions;

 

(2) Any transactions prohibited by Directive 4 under E.O. 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation; or

 

(3) Any transactions otherwise prohibited by the RuHSR, including transactions involving any person blocked pursuant to the RuHSR other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.

 

General License No. 100:

 

All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the divestment of debt or equity to a non-U.S. person, who is not a person whose property or interests in property are blocked, or the conversion of currencies, involving one or more of the following blocked entities that is acting solely as a securities, trade, or settlement depository, central counterparty or clearing house, or public trading market, are authorized through 12:01 eastern daylight time August 13, 2024:

 

(1) Moscow Exchange (MOEX);

 

(2) National Clearing Center (NCC);

 

(3) Non-Bank Credit Institution Joint Stock Company National Settlement Depository (NSD); and

 

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

 

This general license does not authorize:

 

(1) Any transactions prohibited by Directive 2 under E.O. 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions;

 

(2) Any transactions prohibited by Directive 4 under E.O. 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation; or (3) Any transactions otherwise prohibited by the RuHSR, including transactions involving any person blocked pursuant to the RuHSR other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.

 

Additionally, OFAC is issuing eight new, Russia-related Frequently Asked Questions (FAQs 1181 – 1188)

 

FAQ 1181:

 

Question: Effective June 12, 2024, how is Treasury interpreting Russia’s military-industrial base under section 11 of Executive Order (E.O.) 14024, as amended by E.O. 14114?

 

Answer: In line with G7 commitments and in response to the Government of the Russian Federation’s continued efforts to reorient its economy and government resources to support its war effort, Treasury has updated its definition of Russia’s military-industrial base to include all persons blocked pursuant to E.O. 14024.  This updated definition reflects Russia’s reorientation of its economy and government resources to support its war.  This action means that FFIs risk being sanctioned for conducting or facilitating any significant transaction or transactions or for providing any service involving a person blocked pursuant to E.O. 14024.

 

As updated in FAQ 1151, Russia’s military-industrial base includes all persons blocked pursuant to E.O. 14024, as well as any person operating in the technology, defense and related materiel, construction, aerospace, and manufacturing sectors of the Russian Federation economy (and other sectors as may be determined pursuant to E.O. 14024).  For definitions of those identified sectors, see FAQ 1126.  Russia’s military-industrial base may also include individuals and entities that support the sale, supply, or transfer, directly or indirectly, of critical items identified pursuant to subsection 11(a)(ii) of E.O. 14024 to the Russian Federation.  See determination of December 22, 2023 pursuant to subsection 11(a)(ii) of Executive Order 14024 (Russia Critical Items Determination)

 

FAQ 1182:

 

Question: Are foreign financial institutions (FFIs) subject to sanctions risk for providing all financial services involving persons blocked pursuant to Executive Order (E.O.) 14024, as amended?  What about agricultural, medical, and other transactions authorized by OFAC General Licenses?

 

Answer: Treasury remains focused on counteracting activity that involves sanctions evasion or third-country support to Russia’s military-industrial base. At the same time, legitimate humanitarian activity and agricultural and medical trade are not the target of our sanctions. Accordingly, FFIs may continue to conduct or facilitate any transaction(s) or provide any service related to activities that are otherwise authorized or exempted under the Russian Harmful Foreign Activities Sanctions program.

 

Foreign persons do not risk the imposition of sanctions for engaging in transactions authorized for U.S. persons under General Licenses issued under the Russian Harmful Foreign Activities Sanctions program.

FFIs may continue to rely on Treasury’s existing authorizations in place for transactions related to agricultural commodities, medicine, medical devices and related replacement parts, components, or software updates, the Coronavirus Disease 2019 (General License (GL) 6D), energy-related transactions (GL 8J), certain transactions in support of non-governmental organizations (GL 27), official business of third-country diplomatic or consular missions located in the Russian Federation (GL 20), certain transactions and official business of certain international organizations and entities by employees, grantees, or contractors thereof (31 CFR 587.510). Additionally, the importation or exportation of information or informational materials and transactions ordinarily incident to travel to or from any country are exempt under the International Emergency Economic Powers Act (IEEPA).

 

FAQ 1183:

 

Question: What authorizations are in place with respect to the Moscow Exchange (MOEX), National Clearing Center (NCC), and Non-Bank Credit Institution Joint Stock Company National Settlement Depository (NSD)?

 

Answer: On June 12, 2024, OFAC issued Russia-related general licenses (GLs) GL 99, GL 100, and amended GL 8J, authorizing certain transactions involving MOEX, NCC, NSD, or any entity in which one of these entities owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest (collectively, “the Blocked Entities”).

 

GL 99 authorizes the wind down of transactions involving the Blocked Entities, as well as certain transactions related to the divestment to non-U.S. persons of debt or equity issued or guaranteed by, or derivative contracts involving, the Blocked Entities.  For example, GL 99 would authorize a U.S. person to divest their equity in MOEX to a non-blocked non-U.S. person.  This authorization expires at 12:01 a.m. eastern daylight time August 12, 2024.  See GL 99 for more information.

 

GL 100 authorizes certain transactions for the divestment to non-blocked, non-U.S. persons of debt or equity, or for the conversion of currencies, involving one or more of the Blocked Entities solely as a securities, trade, or settlement depository, central counterparty or clearing house, or public trading market.  GL 100 is intended to cover the divestment of debt or equity of non-blocked companies that may be traded on or through one of the Blocked Entities in their capacity as a securities, trade, or settlement depository, central counterparty or clearing house, or public trading market.  For example, GL 100 would authorize a U.S. person to divest their equity in a non-blocked Russian company that is being traded on MOEX to a non-blocked, non-U.S. person.  This example would be distinct from the divestment of equity in MOEX itself, which would be covered by GL 99.  GL 100 would also authorize U.S. persons to transact with one of the Blocked Entities to the extent ordinarily incident and necessary to convert U.S. dollars to another currency, or vice versa.  This authorization expires at 12:01 a.m. eastern daylight time August 12, 2024. See GL 100 for more information.

 

FAQ 1184:

 

Question: What action did Treasury take on June 12, 2024 with regards to prohibiting certain information technology (IT) and software-related services?

 

Answer: In line with G7 efforts to disrupt Russia’s defense industry’s reliance on western IT systems, on June 12, 2024, Treasury issued a determination that restricts the provision of certain IT and software-related services to Russia.  The determination, “Prohibition on Certain Information Technology and Software Services,” issued pursuant to Executive Order (E.O.) 14071 (the “IT and Software Services Determination”), prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, to any person located in the Russian Federation of:  (1) IT consultancy and design services; and (2) IT support services and cloud-based services for the following categories of software: enterprise management software and design and manufacturing software (collectively, “Covered Software”).  The IT and Software Services Determination will take effect at 12:01 a.m. eastern daylight time on September 12, 2024.  See FAQs 1185, 1186, 1187, and 1188 for additional information.

 

The aim of this action is not to prohibit all activity relating to the provision of IT and software-related services to Russia.  The United States strongly supports the free flow of information and communications globally as facilitated by telecommunications and the internet.  These measures do not prohibit internet access or the delivery of internet-based communications services.  Treasury already has in place General License (GL) 25D, which authorizes certain transactions ordinarily incident and necessary to the receipt or transmission of telecommunications involving the Russian Federation and the provision of certain services incident to the exchange of communications over the internet, subject to certain restrictions.  For additional information, see FAQ 1040.  Treasury has also amended GL 6D to authorize transactions related to certain agricultural and medical activities involving the provision of information technology and software-related services.  Additionally, the importation from any country, or the exportation to any country of any information or informational materials, regardless of format or medium, is generally exempt from the scope of sanctions prohibitions under the International Emergency Economic Powers Act.  See 50. U.S.C. § 1702(b)(3).

 

In addition, the IT and Software Services Determination does not prohibit the following IT and software services, which are excluded from its scope:  (1) any service to an entity located in the Russian Federation that is owned or controlled, directly or indirectly, by a United States person; (2) any service in connection with the wind down or divestiture of an entity located in the Russian Federation that is not owned or controlled, directly or indirectly, by a Russian person; and (3) any service for software that would be eligible for a license exception or otherwise authorized for export or reexport to Russia by the Department of Commerce.

 

FAQ 1185:

 

Question: What activities are considered prohibited “information technology (IT) consultancy and design services” under the determination, “Prohibition on Certain Information Technology and Software Services,” pursuant to Executive Order (E.O. 14071) (the “IT and Software Services Determination”)?

 

Answer: IT consultancy and design services include the development and implementation of software, as well as assistance or advice relating to the development and implementation of software, including the supply and installation of bespoke software.  However, the retail sale of off-the-shelf software, falling under United Nations’ Central Product Classification (CPC) Code 63252, is not included in the scope of IT consultancy and design services.  IT consultancy and design services are distinct from information technology (IT) support services, which fall under United Nations’ CPC Code 83132.  See FAQ 1187 for more information on how OFAC intends to define “IT consultancy and design services.”  See FAQ 1186 for a description of prohibited “IT support services” and “cloud-based services” for enterprise management software and design and manufacturing software.

 

The following are examples of activities that would be prohibited by the IT and Software Services Determination if such services were provided to a company located in the Russian Federation that is not owned or controlled directly or indirectly by a U.S. person (Russian company):

 

• A U.S. company signs a contract with a Russian company to assist the Russian company in upgrading its IT systems.  The U.S. consulting company advises on, among other matters, the kinds of software and hardware needed for the Russian company’s operations and how best to

procure such technology.

 

• A U.S. company works to modify existing web applications to be functional within a Russian company’s internal IT environment.

 

• A U.S. service provider signs a contract with a Russian company for the design and engineering of bespoke (i.e., custom-made) software that the Russian company uses for internal purposes.

 

• A U.S. person working at a third country company signs a contract with a Russian company to design the structure of their sales website.

 

The following are examples of activities that would not be prohibited by the IT and Software Services Determination:

 

• A U.S. service provider provides a Russian company with internet access.

 

• A U.S. service provider provides a Russian company with internet services.  The delivery of internet services includes, for example, Domain Name Services.

 

• A U.S. company provides Russian individuals and entities with continued access to cloud-based, free-of-charge, publicly available web applications, such as email, spreadsheet, and document applications.
• A U.S. company provides virtual private network (VPN) services to customers in the Russian Federation.

 

Some of these activities – such as the sale of off-the-shelf software – may be subject to other Federal laws or requirements of other Federal agencies, including export, reexport, and transfer (in-country) license requirements maintained by the Department of Commerce’s Bureau of Industry and Security under the Export Administration Regulations, 15 CFR parts 730–774 (EAR).

 

FAQ 1186:

 

Question: What activities are considered prohibited “IT support services” and “cloud-based services” for enterprise management software and design and manufacturing software (collectively “Covered Software”) under the determination, “Prohibition on Certain Information Technology and Software Services”, pursuant to Executive Order (E.O.) 14071 (the “IT and Software Services Determination”)?

 

Answer: The IT and Software Services Determination prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of both IT support services and cloud-based services for the Covered Software to a person located in the Russian Federation.  IT support services include the provision of technical expertise to solve problems for the client in using software, hardware, or an entire computer system.  Cloud-based services include the supply of software and associated services via the internet or the cloud, including through Software-as-a-Service (SaaS).  See FAQ 1187 for more information on how OFAC intends to define “enterprise management software,” “design and manufacturing software,” “cloud-based services,” and “information technology support services.”

 

The following are examples of activities that would be prohibited by the IT and Software Services Determination if such services were provided to a company located in the Russian Federation that is not owned or controlled directly or indirectly by a U.S. person (Russian company):

 

• A U.S. company sells a cloud-based enterprise resource planning software subscription to a Russian company.

 

• A U.S. employee of a third country company provides customer support services to a Russian company that is experiencing technical difficulties with its human resources software.

 

• A U.S. company provides a software patch to a Russian company to fix a bug in its computer-aided design software.

 

The following are examples of activities that would not be prohibited by the IT and Software Services Determination:

 

• A U.S. company sells a cloud-based electronic health records software subscription to a Russian company.

 

• A U.S. company provides customer support services to a Russian individual who is experiencing technical difficulties with their publicly available cloud-based spreadsheet web application.
• A U.S. person working at a third country company provides customer support services to a Russian individual who is experiencing technical difficulties with their free-of-charge publicly available teleconferencing application.

 

• A U.S. company provides IT support services to a Russian individual to a non-covered software application.

 

The IT and Software Services Determination complements regulations to be issued by the U.S. Department of Commerce Bureau of Industry and Security (BIS) pertaining to the export, reexport, or transfer (in-country) to the Russian Federation of the following types of software subject to the Export Administration Regulations, 15 CFR part 730–774 (EAR):  Enterprise resource planning (ERP); customer relationship management (CRM); business intelligence (BI); supply chain management (SCM); enterprise data warehouse (EDW); computerized maintenance management system (CMMS); project management software, product lifecycle management (PLM);  building information modelling (BIM); computer aided design (CAD); computer-aided manufacturing (CAM); and engineering to order (ETO).

 

See General License (GL) 25D for more information about certain authorizations for transactions relating to the receipt or transmission of telecommunications involving the Russian Federation and the provision of certain services incident to the exchange of communications over the internet.  See GL 6D for more information on authorizations for transactions related to certain agricultural and medical activities involving the provision of information technology and software-related services.

 

FAQ 1187:

 

Question: How does OFAC intend to interpret the following terms in the determination, “Prohibition on Certain Information Technology and Software Services,” pursuant to Executive Order (E.O.) 14071 (the “IT and Software Services Determination”):  “enterprise management software,” “design and manufacturing software,” “cloud-based services,” “information technology support services,” and “information technology consultancy and design services”?

 

Answer: OFAC expects to promulgate regulations that define or interpret these terms as follows:

 

The term enterprise management software means the following types of software:  enterprise resource planning (ERP), customer relationship management (CRM), business intelligence (BI), supply chain management (SCM), enterprise data warehouse (EDW), computerized maintenance management system (CMMS), project management, and product lifecycle management (PLM) software.

 

The term design and manufacturing software means the following types of software:  building information modelling (BIM), computer aided design (CAD), computer-aided manufacturing (CAM), and engineer to order (ETO) software.

 

The term cloud-based services includes the delivery of software via the internet or over the cloud, including through Software-as-a-Service (SaaS), or SaaS cloud services in relation to such software.

 

The term information technology support services is defined consistent with the United Nations’ Central Product Classification (CPC) Code 83132 to include:

1. providing technical expertise to solve problems for the client in using software, hardware, or an entire computer system, such as: (a) providing customer support in using or troubleshooting the software; (b) upgrading services and the provision of patches and updates; (c) providing customer support in using or troubleshooting the computer hardware, including testing and cleaning on a routine basis and repair of information technology (IT) equipment; (d) technical assistance in moving a client’s computer system to a new location; (e) providing customer support in using or troubleshooting the computer hardware and software in combination; and

 

1. providing technical expertise to solve specialized problems for the client in using a computer system, such as:  (a) auditing or assessing computer operations without providing advice or other follow-up action including auditing, assessing and documenting a server, network or process for components, capabilities, performance, or security; (b) data recovery services, i.e. retrieving a client’s data from a damaged or unstable hard drive or other storage medium, or providing standby computer equipment and duplicate software in a separate location to enable a client to relocate regular staff to resume and maintain routine computerized operations in event of a disaster such as a fire or flood; and (c) other IT technical support services not elsewhere classified.

 

The term information technology consultancy and design services includes both IT consulting services and IT design and development services for applications, and is defined consistent with United Nations’ Central Product Classification (CPC) Codes 83131 and 83141, respectively.

 

• IT consultancy services includes providing advice or expert opinion on technical matters related to the use of information technology, such as:  (a) advice on matters such as hardware and software requirements and procurement; (b) systems integration; (c) systems security; and (d) provision of expert testimony on IT related issues.

 

• IT design and development services for applications includes services of designing the structure and/or writing the computer code necessary to create and/or implement a software application, such as:  (a) designing the structure of a web page and/or writing the computer code necessary to create and implement a web page; (b) designing the structure and content of a database and/or writing the computer code necessary to create and implement a database; (c) designing the structure and writing the computer code necessary to design and develop a custom software application; (d) customization and integration, adapting (modifying, configuring, etc.) and installing an existing application so that it is functional within the clients’ information system environment.

 

FAQ 1188:

 

Question: Does the determination, “Prohibition on Certain Information Technology and Software Services,” pursuant to Executive Order (E.O.) 14071 (the “IT and Software Services Determination”) prohibit U.S. persons from providing services to persons located outside of the Russian Federation that are owned or controlled by persons located in the Russian Federation? 

 

Answer: No, provided that the provision of services is not an indirect export to a person located in the Russian Federation.  For the purposes of the IT and Software Services Determination, OFAC interprets the “indirect” provision of the prohibited services to include when the benefit of the services is ultimately received by a “person located in the Russian Federation.”

 

In contrast, OFAC would not consider to be prohibited the provision of services to a third country company that is located outside of Russia, including such a company owned or controlled by persons located in the Russian Federation, provided that the services will not be further exported or reexported to persons located in the Russian Federation.

 

For example, the following scenarios describe services that would be prohibited under the IT and Software Services Determination:

 

• A U.S. company designs and delivers proprietary supply chain management software to a third country limited liability company (Company X) on behalf of its Russian parent company, which Company X intends to supply to its parent company.

 

• A U.S. company designs and delivers proprietary accounting software to a third country software re-seller (Company Y), which Company Y indicates that they intend to supply to a Russian company.

 

• A U.S. consulting company signs a contract to provide enterprise management software and related information technology support services to Company X.  Company X provides access to these services to its Russian parent, such that employees from the Russian parent call the U.S. consulting company when they have problems with their enterprise management software.

 

The following scenarios illustrate services to a non-Russian subsidiary of a Russian person that would not be prohibited under the IT and Software Services Determination:

 

• A U.S. software company assists a U.S. subsidiary of a Russian company in upgrading the U.S. subsidiary’s IT systems, including procuring new software and hardware.  The U.S. subsidiary has an office and employees in the United States and conducts business in the United States, and the services will not be exported or reexported to the Russian parent company.

 

• A U.S. software company signs a contract with the third-country subsidiary (Company Z) of a Russian company for the delivery via cloud of building information software to Company Z.  This subsidiary has an office and employees in the third country and conducts business in this third country, and the software will not be provided to the Russian parent company.

 

 

• A U.S. technology company designs a website for the subsidiary of a Russian company located in a third country. This subsidiary has an office and employees in the third country and conducts business in this third country, and the services will not be reexported to the Russian parent company.
  

OFAC is publishing an updated Compliance Advisory to Foreign Banks on Russia Sanctions Risks in order to provide additional guidance for Foreign Financial Institutions the update advisory warns foreign financial institutions that conduct or facilitate significant transactions or provide any service involving Russia’s military-industrial base run the risk of being sanctioned by OFAC.  OFAC is revising the definition of “Russia’s military-industrial base” to include all persons blocked under E.O. 14024, as amended.

 

Please see the full list of sanctioned Russian individuals and entities posted in the links below:

 

https://ofac.treasury.gov/recent-actions/20240612

https://home.treasury.gov/news/press-releases/jy2404

https://ofac.treasury.gov/media/932951/download?inline

https://ofac.treasury.gov/media/932921/download?inline

https://ofac.treasury.gov/media/932926/download?inline

https://ofac.treasury.gov/media/932931/download?inline

https://ofac.treasury.gov/media/932936/download?inline

https://ofac.treasury.gov/media/932941/download?inline

https://ofac.treasury.gov/media/932946/download?inline

https://ofac.treasury.gov/faqs/added/2024-06-12 and

https://ofac.treasury.gov/media/932436/download?inline

 

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June 14, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on four individuals with links to the Islamic State of Iraq and Syria (ISIS), including members of an ISIS-linked human smuggling network. The investigations into these targets, as well as their subsequent designations, were taken in close coordination with the Government of Türkiye. As a result of this close cooperation, the Government of Türkiye is concurrently taking its own domestic action against this network.

 

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

 

• Ismailov, Olimkhon Makhmudjon Ugli of Uzbekistan;
• Khamirzaev, Adam of Turkey;
• Mirzoev, Muhammadyusuf Alisher Ogli of Uzbekistan: and
• Niyazov, Muhammad Ibrohimjon of Turkey.

 

https://ofac.treasury.gov/recent-actions/20240614 and

https://ofac.treasury.gov/recent-actions/20240617

 

 

 

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June 14, 2024: Based on the Department of State’s designation of Tzav 9, a violent extremist Israeli group that has been blocking, harassing, and damaging convoys carrying lifesaving humanitarian assistance to Palestinian civilians in Gaza, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) added the following individuals to its SDN List:

 

• Eklund, Leif Robert of Sweden;
• Oberg, Par of Sweden;
• Vejeland, Tor Frederik of Sweden.

 

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

 

• Nordic Resistance Movement of Sweden; and
• TZAV 9 of Israel.

 

https://ofac.treasury.gov/recent-actions/20240614 and

https://ofac.treasury.gov/recent-actions?page=0

 

*******

 

June 17, 2024:  The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated individuals and entities that have facilitated weapons procurement for Ansarallah, commonly referred to as the Houthis. OFAC is also designating one individual and one company, as well as identifying one vessel, that have facilitated the shipment of commodities, the sale of which provides an important funding stream to the Houthis that aids in their weapons procurement. This action targets key actors who have enabled the Houthis to generate revenue and acquire a range of materials to manufacture the advanced weaponry they are now using to conduct ongoing terrorist attacks against commercial ships. Since November 2023, the Houthis have deployed a range of unmanned aerial vehicles (UAVs), ballistic missiles, and cruise missiles to attack merchant vessels and their crews in the Red Sea and Gulf of Aden, killing innocent civilians, causing severe damage to commercial ships, and threatening global freedom of navigation.

 

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

 

• Al-Haifi, Muaadh Ahmed Mohammed of Oman;
• Al-Sa’idi, Haydar Muzhir Ma’lak of Iraq;
• Al-Wazir, Ali Abd Al-Wahhab Muhammad of Yemen; and
• Salyga, Vyacheslav of Ukraine.

 

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

 

• Dongguan Yuze Machining Tools Company Limited of China;
• Guangzhou Tasneem Trading Company Limited of China;
• Harakat Ansar Allah Al-Awfiya of Iraq;
• International Smart Digital Interface Limited Liability Company of Oman;
• Ningbo Beilun Saige Machine Co., Ltd., No. 2 of China;
• Stellar Wave Marine L.L.C. of the United Arab Emirates; and
• Tasneem Trading Company Limited of China.

 

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

 

• Otaria, rude Oil Tanker Cameroon flag; Vessel Registration Identification IMO 9192260.

 

https://ofac.treasury.gov/recent-actions/20240617 and

https://ofac.treasury.gov/recent-actions?page=0

 

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June 18, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated a network of two individuals and seven entities that provide major sources of revenue for U.S.-designated Republika Srpska (RS) President Milorad Dodik (Dodik) and his family. Dodik has used his official position to accumulate personal wealth through companies linked to himself and to Igor Dodik (Igor). For example, in 2024, Igor and Dodik exercised their control over senior Bosnia and Herzegovina (BiH) government officials to manipulate the draft BiH state budget so that a state-level contract could be awarded to Prointer ITSS d.o.o. Banja Luka Clan Infinity International Group—an entity in the network—outside of the competitive process.

 

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) published Balkans-Related General License 3A, 4, and 5.

 

General License 3A:

 

All transactions prohibited by the Western Balkans Stabilization Regulations, 31 CFR part 588 (WBSR), involving one or more of the blocked entities described in this general license related to the following are authorized:  (1) the production, manufacturing, sale, transport, or provision of agricultural commodities, agricultural equipment, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices; (2) the prevention, diagnosis, or treatment of any disease or medical condition; or (3) the conduct of clinical trials or other medical research.

 

The authorization this general license applies to the following blocked entities:

(1) Orka Holding AD;

 

(2) Infinity International Group d.o.o. Banja Luka;

 

(3) Sirius 2010 d.o.o. Banja Luka; or

 

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

 

(c) For the purposes of this general license, agricultural commodities, medicine, and medical devices are defined as follows:

 

(1) Agricultural commodities.  Agricultural commodities are products that fall within the term “agricultural commodity” as defined in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602) and are intended for use as:

 

• Food for humans (including raw, processed, and packaged foods; live animals; vitamins and minerals; food additives or supplements; and bottled drinking water) or animals (including animal feeds);

 

• Seeds for food crops;

 

• Fertilizers or organic fertilizers; or

 

• Reproductive materials (such as live animals, fertilized eggs, embryos, and semen) for the production of food animals.

 

(2) Medicine.  Medicine is an item that falls within the definition of the term “drug” in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).

 

(3) Medical devices.  A medical device is an item that falls within the definition of “device” in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).

 

(d) This general license does not authorize any transactions otherwise prohibited by the WBSR, including transactions involving any person blocked pursuant to the WBSR other than the blocked persons described in paragraph (b) of this general license, unless separately authorized.

 

(e) Effective June 18, 2024, General License No. 3, dated November 16, 2023, is replaced and superseded in its entirety by this General License No. 3A.

 

General License 4:

 

All transactions prohibited by the Western Balkans Stabilization Regulations, 31 CFR part 588 (WBSR), that are ordinarily incident and necessary to the wind down of any transaction involving one or more of the following blocked entities are authorized through 12:01 a.m. eastern daylight time, August 17, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the WBSR:

 

(1) Infinity International Group d.o.o. Banja Luka;

 

(2) Sirius 2010 d.o.o. Banja Luka; or

 

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

 

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

 

General License 5:

 

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

 

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

 

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

 

• Cicic, Milenko of Bosnia and Herzegovina; and
• Djuric, Djordje of Serbia.

 

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

 

• Infinity International Group D.O.O. Banja Luka of Bosnia and Herzegovina;
• Infinity Media D.O.O of Bosnia and Herzegovina;
• K-2 Audio Services Banja Luka D.O.O. of Bosnia and Herzegovina;
• Kaldera Company El PGP D.O.O. of Bosnia and Herzegovina;
• Prointer ITSS D.O.O. Banja Luka Clan Infinity International Group of Bosnia and Herzegovina;
• Sirius 2010 D.O.O. Banja Luka of Bosina and Herzegovina; and
• UNA World Networdk D.O.O. of Bosnia and Herzegovina.

 

https://ofac.treasury.gov/recent-actions/20240618 and

https://ofac.treasury.gov/recent-actions?page=0

 

*******

 

June 20, 2024: Secretary Yellen announced that the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned eight Mexico-based targets affiliated with La Nueva Familia Michoacana drug cartel for trafficking fentanyl, cocaine, and methamphetamine into the United States. In addition to narcotics trafficking, La Nueva Familia Michoacana smuggles migrants from Mexico into the United States. La Nueva Familia Michoacana is one of the most powerful and violent cartels in Mexico and has become a priority focus of the Mexican government in recent years.

 

Concurrently, Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a Supplemental Advisory to highlight critical new information to help U.S. banks and other financial institutions guard against activity associated with the illicit fentanyl supply chain. The advisory includes new trends and red flags that can be indicators of activity associated with the procurement of precursor chemicals and manufacturing equipment used for the synthesis of illicit fentanyl and other synthetic opioids. Reporting from financial institutions of suspected financial transactions involving illicit fentanyl and narcotics trafficking plays a key role in law enforcement investigations and Treasury’s sanctions efforts globally.

 

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

 

• Arzate Gomez, Kevin of Mexico;
• Camacho Goicochea, Euclides of Mexico;
• Duran Alvarez, David of Mexico;
• Lopez Hernandez, Josue of Mexico;
• Maldonado Bustos, Rodolfo of Mexico;
• Ochoa Lagunes, Lucio of Mexico;
• Ramirez Carrera, Josue of Mexico;
• Tabares Martines, Uriel of Mexico.

 

https://ofac.treasury.gov/recent-actions/20240620 and

https://ofac.treasury.gov/recent-actions?page=0

 

*******

 

June 25, 2024: the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned  nearly 50 entities and individuals that constitute multiple branches of a sprawling “shadow banking” network used by Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) and Islamic Revolutionary Guard Corps (IRGC) to gain illicit access to the international financial system and process the equivalent of billions of dollars since 2020. MODAFL and the IRGC engage in several commercial revenue-generating activities, most notably the sale of Iranian oil and petrochemicals.

 

Networks of Iranian exchange houses and dozens of foreign cover companies under their control enable MODAFL and the IRGC to disguise the revenue they generate abroad that is then available to use for a range of MODAFL and IRGC activities, including the procurement and development of advanced weapons systems such as unmanned aerial vehicles. This revenue also supports the provision of weapons and funding to Iran’s regional proxy groups, including Yemen’s Houthis, who continue a campaign of reckless attacks on global shipping, as well as the transfer of UAVs to Russia for use in its war of aggression against Ukraine.

 

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

 

• Jalalian, Ramin of the United Arab Emirates;
• Mir Mohammed Ali, Seyyed Reza of Iran;
• Najibi, Seyyed Mohammad Mosanna’i of Turkey; and
• Nourian, Siavash of Iran.

 

The full list of sanctioned entities can be found at the posting below

 

https://ofac.treasury.gov/recent-actions/20240625 and

https://home.treasury.gov/news/press-releases/jy2431

 

*******

 

June 26, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $538,000 settlement with Mondo TV, S.p.a. (“Mondo”).  Mondo, an Italy-based animation company, has agreed to settle its potential civil liability for 18 apparent violations of the North Korea Sanctions Regulations. Between May 2019 and November 2021, Mondo caused U.S. financial institutions to process approximately $537,939 in payments for animation work Mondo outsourced to a Government of North Korea-owned animation studio. This settlement amount reflects OFAC’s determination that Mondo’s conduct was non-egregious and not voluntarily disclosed.

 

https://ofac.treasury.gov/media/932986/download?inline and

https://ofac.treasury.gov/recent-actions/20240626

 

OFAC issued Russia-related General License 55B:

 

All transactions prohibited by the determination of November 21, 2022 made pursuant to section 1(a)(ii) of Executive Order 14071 (“Prohibitions on Certain Services as They Relate to the Maritime Transport of Crude Oil of Russian Federation Origin”) related to the maritime transport of crude oil originating from the Sakhalin-2 project (“Sakhalin-2 byproduct”) are authorized through 12:01 a.m. eastern daylight time, June 28, 2025, provided that the Sakhalin-2 byproduct is solely for importation into Japan.

 

This general license does not authorize any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR, unless separately authorized.

 

Effective June 26, 2024, General License No. 55A, dated September 14, 2023, is replaced and superseded in its entirety by this General License No. 55B.

 

*******

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

 

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

persons denied export privileges by the United States Government.

 

REGULATORY UPDATES

President

President Biden Continued The National Emergency with Respect to the Actions of the Government of Syria

 

May 8, 2024: On May 11, 2004, pursuant to his authority under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) and the Syria Accountability and Lebanese Sovereignty Restoration Act of 2003 (Public Law 108-175), the President issued Executive Order 13338, in which he declared a national emergency with respect to the actions of the Government of Syria.  The national emergency was modified in scope and relied upon for additional steps taken in Executive Order 13399 of April 25, 2006, Executive Order 13460 of February 13, 2008, Executive Order 13572 of April 29, 2011, Executive Order 13573 of May 18, 2011, Executive Order 13582 of August 17, 2011, Executive Order 13606 of April 22, 2012, and Executive Order 13608 of May 1, 2012.

 

The President took these actions to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by the actions of the Government of Syria in supporting terrorism, maintaining its then-existing occupation of Lebanon, pursuing weapons of mass destruction and missile programs, and undermining United States and international efforts with respect to the stabilization and reconstruction of Iraq.

 

The regime’s brutality and repression of the Syrian people, who have called for freedom and a representative government, not only endangers the Syrian people themselves, but also generates instability throughout the region.  The Syrian regime’s actions and policies, including with respect to chemical weapons and supporting terrorist organizations, continue to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.  As a result, the national emergency declared in Executive Order 13338, which was expanded in scope in Executive Order 13572, and with respect to which additional steps were taken in Executive Order 13399, Executive Order 13460, Executive Order 13573, Executive Order 13582, Executive Order 13606, and Executive Order 13608, must continue in effect beyond May 11, 2024.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared with respect to the actions of the Government of Syria.

 

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

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/05/08/notice-on-the-continuation-of-the-national-emergency-with-respect-to-the-actions-of-the-government-of-syria-4/

 

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President Biden Continued The National Emergency with Respect to Securing the Information and Communications Technology and Services Supply Chain

 

May 8, 2024: On May 15, 2019, by Executive Order 13873, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by the unrestricted acquisition and use of certain information and communications technology and services transactions.

 

The unrestricted acquisition or use in the United States of information and communications technology or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries augments the ability of these foreign adversaries to create and exploit vulnerabilities in information and communications technology or services, with potentially catastrophic effects.  This threat continues to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.  For this reason, the national emergency declared on May 15, 2019, must continue in effect beyond May 15, 2024.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 13873 with respect to securing the information and communications technology and services supply chain.

 

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

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/05/08/notice-on-the-continuation-of-the-national-emergency-with-respect-to-securing-the-information-and-communications-technology-and-services-supply-chain-4/

 

*******

 

President Biden Continued The National Emergency with Respect to the Central African Republic

 

May 8, 2024: On May 12, 2014, by Executive Order 13667, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the situation in and in relation to the Central African Republic, which has been marked by a breakdown of law and order; intersectarian tension; the pervasive, often forced recruitment and use of child soldiers; and widespread violence and atrocities, including those committed by Kremlin-linked and Yevgeniy Prigozhin-affiliated entities such as the Wagner Group, and which threatens the peace, security, or stability of the Central African Republic and neighboring states.

 

The situation in and in relation to the Central African Republic continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.  For this reason, the national emergency declared in Executive Order 13667 on May 12, 2014, to deal with that threat must continue in effect beyond May 12, 2024.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared with respect to the Central African Republic.

 

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

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/05/08/notice-on-the-continuation-of-the-national-emergency-with-respect-to-the-central-african-republic-4/

 

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President Biden Continued The National Emergency with Respect to Yemen

 

May 14, 2024: On May 16, 2012, by Executive Order 13611, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the actions and policies of certain members of the Government of Yemen and others that threatened Yemen’s peace, security, and stability.  These actions include obstructing the political process in Yemen and blocking the implementation of the agreement of November 23, 2011, between the Government of Yemen and those in opposition to it, which provides for a peaceful transition of power that meets the legitimate demands and aspirations of the Yemeni people.

 

The actions and policies of certain former members of the Government of Yemen and others in threatening Yemen’s peace, security, and stability continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.  For this reason, the national emergency declared in Executive Order 13611 on May 16, 2012, to deal with that threat must continue in effect beyond May 16, 2024.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 13611 with respect to Yemen.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/05/14/notice-on-the-continuation-of-the-national-emergency-with-respect-to-yemen-4/ and

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

 

*******

 

President Biden Continued The National Emergency with Respect to the Stabilization of Iraq

 

May 20, 2024: On May 22, 2003, by Executive Order 13303, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States posed by obstacles to the orderly reconstruction of Iraq, the restoration and maintenance of peace and security in the country, and the development of political, administrative, and economic institutions in Iraq.

 

The obstacles to the orderly reconstruction of Iraq, the restoration and maintenance of peace and security in the country, and the development of political, administrative, and economic institutions in Iraq continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.  For this reason, the national emergency declared in Executive Order 13303, as modified in scope and relied upon for additional steps taken in Executive Order 13290 of March 20, 2003, Executive Order 13315 of August 28, 2003, Executive Order 13350 of July 29, 2004, Executive Order 13364 of November 29, 2004, Executive Order 13438 of July 17, 2007, and Executive Order 13668 of May 27, 2014, must continue in effect beyond May 22, 2024.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency with respect to the stabilization of Iraq declared in Executive Order 13303.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/05/20/notice-on-the-continuation-of-the-national-emergency-with-respect-to-the-stabilization-of-iraq-4/

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

 

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President Biden Notifies Congress on Intent to Designate Kenya as a Major Non-NATO Ally

 

May 22, 2024:  In accordance with section 517 of the Foreign Assistance Act of 1961, as amended (22 U.S.C. 2321k), President Biden provided notice on intent to designate Kenya as a Major Non-NATO Ally.

 

President Biden made this designation in recognition of Kenya’s many years of contributions to the United States Africa Command area of responsibility and globally and in recognition of our own national interest in deepening bilateral defense and security cooperation with the Government of Kenya.  Kenya is one of the United States Government’s top counterterrorism and security partners in sub-Saharan Africa, and the designation will demonstrate that the United States sees African contributions to global peace and security as equivalent to those of our Major Non-NATO Allies in other regions.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/05/23/message-to-congress-on-intent-to-designate-kenya-as-a-major-non-nato-ally/ and

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

 

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

 

International Traffic in Arms Regulations: Exemption for Defense Trade and Cooperation Among Australia, the United Kingdom, and the United States 

 

May 1, 2024: 89 Fed. Reg. 35028: The Department of State (the Department) proposes to amend the International Traffic in Arms Regulations (ITAR) to support the goals of the AUKUS partnership, the enhanced trilateral security partnership among Australia, the United Kingdom, and the United States. This exemption is designed to foster defense trade and cooperation between and among the United States and two of its closest allies. It is reflective of the nations’ collective commitment to implement shared security standards on protecting defense technology and sensitive military know-how. To achieve this, the Department proposes to amend the ITAR to include an exemption to the requirement to obtain a license or other approval from the Department’s Directorate of Defense Trade Controls (DDTC) prior to any export, reexport, retransfer, or temporary import of defense articles; the performance of defense services; or engagement in brokering activities between or among authorized users within Australia, the United Kingdom, and the United States. The Department also proposes to add a list of defense articles and defense services excluded from eligibility for transfer under the proposed new exemption; add to the scope of the exemption for intra-company, intra-organization, and intra-governmental transfers to allow for the transfer of classified defense articles to certain dual nationals who are authorized users or regular employees of an authorized user within the United Kingdom and Australia; and revise the section on expediting license review applications by referencing new processes for Australia, the United Kingdom, and Canada.

 

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

https://www.federalregister.gov/documents/2024/05/01/2024-08829/international-traffic-in-arms-regulations-exemption-for-defense-trade-and-cooperation-among

 

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30-Day Notice of Proposed Information Collection: Statement of Material Change, Merger, Acquisition, or Divestiture of a Registered Party

 

May 13, 2024: 89 Fed. Reg. 41482: The Department of State has submitted the information collection described below to the Office of Management and Budget (OMB) for approval. In accordance with the Paperwork Reduction Act of 1995. DOS is requesting comments on this collection from all interested individuals and organizations. The purpose of this Notice is to allow 30 days for public comment.

 

The Directorate of Defense Trade Controls (DDTC), Bureau of Political-Military Affairs, U.S. Department of State, in accordance with the Arms Export Control Act (AECA) (22 U.S.C. 2751 et seq.) and the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120-130), has the principal missions of taking final action on license applications and other requests for defense trade transactions via commercial channels, ensuring compliance with the statute and regulations, and collecting various types of reports. By statute, Executive Order, regulation, and delegation of authority, DDTC is charged with controlling the export and temporary import of defense articles, the provision of defense services, and the brokering thereof, which are covered by the U.S. Munitions List.

 

ITAR §§ 122.4 and 129.8 requires registrants to notify DDTC in the event of a change in registration information or if the registrant is a party to a merger, acquisition, or divestiture of an entity producing or marketing ITAR-controlled items. Based on certain conditions enunciated in the ITAR, respondents must notify DDTC of these changes at differing intervals—no less than 60 days prior to the event, if a foreign person is acquiring a registered entity, and/or within 5 days of its culmination. This information is necessary for DDTC to ensure registration records are accurate and to determine whether the transaction is in compliance with the regulations ( e.g., with respect to ITAR § 126.1); assess the steps that need to be taken with respect to existing authorizations ( e.g., transfers); and to evaluate the implications for US national security and foreign policy.

 

 

https://www.federalregister.gov/documents/2024/05/13/2024-10365/30-day-notice-of-proposed-information-collection-statement-of-material-change-merger-acquisition-or

 

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Department of Defense, Defense Security Cooperation Agency (DSCA)

 

DSCA Notifies Congress of Potential FMS Sale To Malaysia

 

May 6, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government Malaysia has requested to buy ten (10) AN/AAQ-33 Sniper Advanced Targeting Pods. Also included are technical data and publications; personnel training; software and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $80 million. The principal contractor will be Lockheed Martin Corporation, located in Orlando, FL, and The Boeing Company, located in St. Louis, MO. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/malaysia-sniper-advanced-targeting-pods

 

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DSCA Notifies Congress of Potential FMS Sale To the United Arab Emirates

 

May 7, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of the United Arab Emirates (UAE) has requested to buy up to one hundred forty-nine (149) WCU-33/B High-Speed Anti-Radiation Missile (HARM) Control Section Modification (HCSM) upgrade kits. Also included are high bandwidth HSCM telemetry kits loaned for integration support to be used in CONUS use only. This includes HARM Control Section containers; encryption devices; software and mission data support; test flight and live-fire range support; HARM support and test equipment; spare parts and repair and return support; publications and technical documentation; personnel training and training support; design and construction; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistical and program support. The estimated total cost is $144 million. The principal contractor will be RTX Corporation located in Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/united-arab-emirates-high-speed-anti-radiation-missile-harm-control

 

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DSCA Notifies Congress of Potential FMS Sale To Ukraine

 

May 10, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of Ukraine has requested to buy three (3) High Mobility Artillery Rocket Systems (HIMARS). The estimated total cost is $30 million, which will be funded by the Government of Germany on behalf of Ukraine.

 

The Secretary of State has determined and provided detailed justification that an emergency exists that requires the immediate sale to the Government of Ukraine of the above defense articles and services in the national security interests of the United States, thereby waiving the congressional review requirements under Section 36(b) of the Arms Export Control Act, as amended. This will be a sale from U.S. Army inventory. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/ukraine-high-mobility-artillery-rocket-systems

 

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DSCA Notifies Congress of Potential FMS Sale To Romania

 

May 14, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of Romania has requested to buy up to three hundred (300) AIM-9X Sidewinder Block II Tactical Missiles; forty (40) AIM-9X Sidewinder Block II Tactical Missile Guidance Units; forty (40) AIM-9X Sidewinder Block II Captive Air Training Missiles (CATM); and twenty (20) AIM-9X Sidewinder Block II CATM Guidance Units. Also included are missile containers; personnel training and training equipment; classified and unclassified publications and technical documents; warranties; U.S. Government engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total program cost is $340.8 million. The principal contractor will be RTX Corporation, located In tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

 

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

 

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DSCA Notifies Congress of Potential FMS Sale To NATO

 

May 16, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The NATO Support and Procurement Agency (NSPA) has requested to buy radar equipment spares and additional items and services that will be added to a previously implemented case whose value was under the congressional notification threshold. The original Foreign Military Sales case, valued at $40.26 million, included Alliance Ground Surveillance (AGS) system equipment and support, including: AN/APG-68 radar processors; Global Hawk engine controllers; classified and unclassified spare components and parts; consumables and accessories; repair and return support; facilities support including storage; classified and unclassified publications and technical documentation; classified and unclassified software delivery and support; transportation support; U.S. Government and contractor engineering, technical, and logistics support services; studies and surveys; and other related elements of logistics and program support. This notification is for the combined non-MDE AGS system equipment and services, including: AN/APG-68 radar processors; Global Hawk engine controllers; communications equipment spares; classified and unclassified spare components and parts; consumables, accessories, and repair and return support; facilities support including storage; classified and unclassified publications and technical documentation; classified and unclassified software delivery and support; transportation support; U.S. Government and contractor engineering, technical, and logistics support services; studies and surveys; and other related elements of logistics and program support. The estimated total cost is $250.2 million. The principal contractor will be Northrop Grumman located in Mojave, CA. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/nato-support-and-procurement-agency-alliance-ground-surveillance

 

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DSCA Notifies Congress of Potential FMS Sale To Ukraine

 

May 16, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Ukraine has requested to buy equipment and services for sustainment support of U.S. Army supplied vehicles and weapon systems, utilizing Blanket Orders, Cooperative Logistics Supply Support Arrangement (CLSSA), and/or Simplified Non-Standard Acquisition Program (SNAP), as well as other related elements of logistics and program support. The estimated total cost is $100 million. The principal contractor(s) will be determined from approved vendors. There are no known offset agreements proposed in connection with this potential sale.

 

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

 

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DSCA Notifies Congress of Potential FMS Sale to Canada

 

May 21, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Canada has requested to buy an additional six hundred ninety (690) KMU-572 Joint Direct Attack Munition (JDAM) tail kits; seventy-five (75) KMU-556 JDAM tail kits; and twenty-five (25) KMU-557 JDAM tail kits that will be added to a previously implemented case whose value was under the congressional notification threshold. The original Foreign Military Sales (FMS) case, valued at $16.1 million ($11.8 million in MDE), included a total of two hundred ten (210) KMU-572 JDAM tail kits; fifty (50) KMU-556 JDAM tail kits; and twenty-five (25) KMU-557 JDAM tail kits. This notification is for a combined total of nine hundred (900) KMU-572 JDAM tail kits; one hundred twenty-five (125) KMU-556 JDAM tail kits; and fifty (50) KMU-557 JDAM tail kits. Also included are Laser Illuminated Target Detectors; FMU-139 fuzes; weapons support equipment; spare and repair parts, consumables and accessories, and repair and return support; publications and technical documentation; studies and surveys; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $96.4 million. The principal contractor will be Boeing Corporation, located in St. Louis, MO. There are no known offset agreements proposed in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/canada-joint-direct-attack-munition-tail-kits

 

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DSCA Notifies Congress of Potential FMS Sale to Brazil

 

May 24, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Brazil has requested to buy twelve (12) UH-60M Black Hawk helicopters; thirty-four (34) T700-GE-701D engines (24 installed, 10 spares); twenty-eight (28) EAGLE-M Embedded Global Position Systems with Inertial Navigation (EGI) or functional equivalent (24 installed, 4 spares); and twenty-four (24) AN/ARC-231A radio systems. The following non-MDE is also included: AN/PYQ-10 Simple Key Loader (SKL), KIV-77 Common Identification Friend or Foe (IFF) crypto appliques, APX-123A Identification Friend or Foe (IFF) transponders; AN/ARC-231 radio systems; ARC-201D Single Channel Ground and Airborne Radio System (SINCGARS) or functional equivalents; ARC-220 high frequency airborne communication systems or functional equivalents with KY-100M; VRC-100 advanced high frequency ground/vehicular communications systems; ARN-147 navigation receivers; ARN-149 low frequency automatic direction finders; ARN-153 advanced digital Tactical Airborne Navigation (TACAN) receiver-transmitters; APN-209 radar altimeter systems; AN/ARC-210 Gen 6 very high frequency/frequency modulation radios; AN/AVR-2B(V) laser warning systems (provisions only); Airspace Concept Evaluation System (ACES); M-134D-H minigun, mount, power supply, and ammunition handling systems gun and mount accessories package; contractor-provided gun and mount accessories, including spare parts, in support of the M-134D-H minigun systems; Aviation Mission Planning System (AMPS); Aviation Ground Support Equipment (AGSE); HGU-56/P Rotary Wing Helmets (RWH); Advanced Sight Display Computers (ASDC); Common Display Interface Units (CDIU); Wide Color Day Display Module (WCDDM); Wide Color Night Display Module (WCNDM); ADS-B Out ability; Integrated Area Navigation (I-RNAV); RDR-7000 weather radar systems; external rescue hoists; Traffic Collision Avoidance Systems (TCAS); Fast Rope Insertion Extraction System (FRIES); EBC-406HM Emergency Locator Transmitters (ELT); Aircrew Combat Equipment (ACE); Internal Auxiliary Fuel Tank System (IAFTS); technical assistance and logistics support services; publications; and other related elements of logistics and program support. The estimated total cost is up to $950 million. The principal contractor will be Lockheed Martin, Sikorsky, located in Stratford, CT. There are no known offset agreements proposed in connection with this potential sale.

 

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

 

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DSCA Notifies Congress of Potential FMS Sale to Austria

 

May 29, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Austria has requested to buy twelve (12) UH-60M Black Hawk helicopters with twenty-six (26) T700-GE-701D engines; fifteen (15) AN/AAR-57 Counter Missile Warning Systems (CMWS); and thirty (30) H-764U Embedded Global Positioning Systems with Inertial Navigation (EGI) with country-unique selective availability anti-spoofing modules (or Future M-Code replacement). The following non-MDE is also included: APR-39C(V)1/4 radar warning receivers; AVR-2B laser detecting sets; AN/ARN-147(V) very high frequency omni-directional range instrument landing system receiver radio; AN/ARN-149(V) low frequency automatic direction finder (ADF) radio receiver; AN/ARN-153 Tactical Air Navigation System (TACAN) receiver transmitter; AN/APN-209 radar altimeter radios; EBC-406HM emergency locator transmitter (ELT); Improved Heads Up Display (IHUD); signal data converters for IHUD; color weather radars; MX-10D electro optical and infrared with laser designator; Engine Inlet Barrier Filters (EIBF); Ballistic Armor Protection Systems (BAPS); Internal Auxiliary Fuel Tank Systems (IAFTS); Fast Rope Insertion Extraction System (FRIES); External Rescue Hoist (ERH); rescue hoist equipment sets; dual patient litter system (DPLS) sets; Martin Baker palletized crew chief and gunner seats with crashworthy floor structural modifications; External Stores Support System (ESSS); instrument panel; cockpit multi-function display (MFD); degraded visual environment (DVE) system; Traffic Alert Collision Avoidance System (TCAS II); cargo hook scale; sling load observation capability; Direction Finder DF-935; environmental control system; snow skis provisions; Bambi bucket provisions; Helicopter Terrain Awareness System (HTAWS); CONRAD troop radio capability; TETRA BOS radio capability; very important person kit; 28 volts of direct current 10 ampere utility power socket (cabin); Universal Serial Bus (USB) charging outlet; Crashworthy Extended Range Fuel Systems (CEFS) tanks; Black Hawk Aircrew Trainer (BAT); training devices; helmets; transportation; organizational equipment; spare and repair parts; support equipment; tools and test equipment; technical data and publications; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics support. The estimated cost is $1.05 billion. The principal contractors will be Lockheed Martin, Sikorsky, located in Stratford, CT. There are no known offset agreements in connection with this potential sale.

 

https://www.dsca.mil/press-media/major-arms-sales/austria-uh-60m-blackhawk-helicopters

 

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DSCA Notifies Congress of Potential FMS Sale to Sweden

 

May 29, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Sweden has requested to buy twelve (12) UH-60M Black Hawk helicopters; thirty (30) T700-GE-701D engines (24 installed, 6 spares); and seventeen (17) AN/AAR-57 common missile warning systems (CMWS). The following is also included: AN/APR-39C(V)1/4 radar warning receivers; AN/AVR-2B laser detecting sets; AN/ARN-149(V) low frequency automatic direction finder radio receivers; AN/ARN-153 tactical air navigation systems (TACAN) receiver transmitters; AN/APN-209 radar altimeters; EBC-406HM emergency locator transmitters (ELT); Enhanced Ballistic Armor Protection Systems (EBAPS); Internal Auxiliary Fuel Tank Systems (IAFTS); Fast Rope Insertion Extraction Systems (FRIES); external rescue hoists (ERH); rescue hoist equipment sets; Martin Baker palletized crew chief and gunner seats with crashworthy floor structural modifications; aircraft fire extinguisher cartridge; impulse cartridge; thruster TCU-3/A; helmets; transportation; organizational equipment; spare and repair parts; support equipment; tools and test equipment; technical data and publications; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $900 million. The principal contractor will be Lockheed Martin, Sikorsky, located in Stratford, CT. There are no known offset agreements in connection with this potential sale.

 

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

 

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

 

Export Control Revisions for Australia, United Kingdom, United States (AUKUS) Enhanced Trilateral Security Partnership; Correction

 

May 8, 2024: 89 Fed. Reg. 38837: On April 19, 2024, BIS published in the Federal Register an interim final rule (IFR), “Export Control Revisions for Australia, United Kingdom, United States (AUKUS) Enhanced Trilateral Security Partnership.” The April 19 IFR removed license requirements, expanded the availability of license exceptions, and reduced the scope of end-use and end-user-based license requirements for exports, reexports, and transfers (in-country) to or within Australia and the United Kingdom (UK) to enhance technological innovation among the three countries and support the goals of the AUKUS Trilateral Security Partnership. This correction revises a footnote included in the April 19 IFR to add greater specificity for the Export Control Classification Numbers (ECCN) referenced, so only portions of those 0x5zz ECCNs in the footnote that were previously controlled for national security column 1 (NS1) or regional stability column 1 (RS1) reasons for control for the destinations of Australia and the United Kingdom will continue to require a license to Australia and the United Kingdom based on the license requirements specified in this footnote.

 

https://www.federalregister.gov/documents/2024/05/08/2024-10079/export-control-revisions-for-australia-united-kingdom-united-states-aukus-enhanced-trilateral

 

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Conforming and Clarifying Changes to the Export Administration Regulations (EAR)

 

May 10, 2024: 89 Fed. Reg. 40369: This final rule makes conforming and clarifying changes to the Export Administration Regulations (EAR). These changes include making conforming changes to the EAR to ensure that destination names reflect the current destination names that are recognized by the United States Government, clarifying the removal of certain license requirements for exports, reexports, and transfers (in-country) to and within Australia and the United Kingdom, making a conforming change to reflect that Cyprus is no longer a Country Group D:5 country, and clarifying how Russia and the Russian Federation are referenced for consistency with the designation of Russia as a U.S. Arms Embargoed country.

 

https://www.federalregister.gov/documents/2024/05/10/2024-10280/conforming-and-clarifying-changes-to-the-export-administration-regulations-ear and

https://www.federalregister.gov/documents/search?conditions%5Bpublication_date%5D%5Bgte%5D=05%2F01%2F2024&conditions%5Bpublication_date%5D%5Blte%5D=05%2F31%2F2024&conditions%5Bterm%5D=EAR

 

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Antiboycott Advisory on Turkey

 

May 14, 2024: The Turkish government has recently announced that it will suspend all exports and imports to and from Israel until the Israeli government allows an uninterrupted and sufficient flow of humanitarian aid into Gaza.

 

All United States persons, wherever located, are reminded that, with respect to their activities in United States commerce, the Export Administration Regulations prohibit taking certain actions in furtherance or support of an unsanctioned foreign boycott maintained by a country against a country friendly to the United States and require reporting of receipt of a boycott-related request to BIS.  U.S. companies operating in Turkey, in particular, are cautioned to be alert to their receipt of any requests to refrain from importing or exporting goods to or from Israel or to provide certification that the goods are not of Israeli origin or do not contain Israeli-origin components or materials.

 

https://www.bis.gov/press-release/antiboycott-advisory-turkiye and

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

 

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Department of Commerce Announces Revisions to Section 232 Steel and Aluminum Tariff Exclusions Process

 

May 17, 2024: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) published a final rule revising the Section 232 exclusions process for steel and aluminum imports. These changes, effective July 1, 2024, aim to refine the framework under which exclusions from the tariffs on steel and aluminum can be requested, ensuring a fairer and more transparent process.

 

The revisions remove twelve General Approved Exclusions (GAEs), six for steel and six for aluminum. The GAEs were originally established to streamline the exclusions process for products consistently found not to be produced in sufficient quantity or quality in the United States. Reversing previous exemptions that facilitated imports of these metals aims to strengthen our U.S. industrial base and our national security by reducing reliance on foreign manufacturing and enhancing domestic production of steel and aluminum.

https://www.bis.gov/press-release/department-commerce-announces-revisions-section-232-steel-and-aluminum-tariff and

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

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U.S. Census Bureau

May 21, 2024: Tips on How to Resolve AES Response Messages

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

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

Response Code:  622

Narrative: Schedule B/HTS Number Missing

Severity:  Fatal

Reason:    The Export Information Code is not ‘HH’ for household goods and the Schedule B/HTS Number is missing.

Resolution:  A Schedule B/HTS Number must be declared on an EEI with the exception of household goods reported with Export Information Code ‘HH’.

Verify the Schedule B/HTS Number, correct the shipment and resubmit.

Response Code:  627

Narrative:     1^st Unit of Measure Code Unknown

Severity:       Fatal

Reason:  The Schedule B/HTS Number reported requires a 1^st Unit of Measure Code to be reported and the 1^st Unit of Measure Code is not valid in the AES.

Resolution:  The 1^st Unit of Measure Code, based on the Schedule B/HTS reported, must be a valid code contained in Appendix K, Unit of Measure Codes.

Verify the 1^st Unit of Measure Code required for the Schedule B/HTS Number reported, correct the shipment and resubmit.

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

It is important that AES filers correct Fatal Errors as soon as they are received in order to comply with the Foreign Trade Regulations.  These errors must be corrected prior to export for shipments filed predeparture and as soon as possible for shipments filed postdeparture but not later than five calendar days after departure.

https://www.cbp.gov/document/guidance/ace-appendix-k-unit-measure-codes?utm_campaign=&utm_content=&utm_medium=email&utm_source=govdelivery and

https://www.cbp.gov/document/guidance/aestir-appendix-commodity-filing-response-messages?utm_campaign=&utm_content=&utm_medium=email&utm_source=govdelivery

 

LATEST SANCTIONS FINES & PENALTIES

 

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

 

Fines and Penalties

 

May 8, 2024: Yuksel Senbol, 36, of Orlando, pleaded guilty to 25 felony counts in Florida federal court, including conspiracy to defraud the United States, conspiracy to commit wire fraud, eight counts of wire fraud, conspiracy to commit money laundering, seven counts of money laundering, conspiracy to violate the Export Control Reform Act (ECRA), four counts of violating the ECRA, and one count of violating the Arms Export Control Act.

 

According to court documents, beginning in approximately April 2019, Senbol operated a front company in the Middle District of Florida called Mason Engineering Parts LLC. She used this front company to assist her co-conspirators, Mehmet Ozcan and Onur Simsek, to fraudulently procure contracts to supply critical military components to the Department of Defense. These components were intended for use in the U.S. Navy Nimitz and Ford Class Aircraft Carriers, U.S. Navy Submarines, U.S. Marine Corps Armored Vehicles, and U.S. Army M-60 Series Tank and Abrahams Battle Tanks, among other weapons systems.

 

Senbol faces up to 10 years in prison for the conspiracy to defraud the United States offense and for each count of money laundering. She faces up to 20 years in prison for each count of conspiracy to commit wire fraud, wire fraud, conspiracy to commit money laundering, conspiracy to violate the ECRA, violating the ECRA and violating the Arms Export Control Act. Sentencing is scheduled for Aug. 6. Alleged co-conspirators Mehmet Ozcan and Onur Simsek are fugitives.

 

https://www.justice.gov/opa/pr/defense-contractor-pleads-guilty-fraud-money-laundering-and-unlawful-export-military-data and

https://www.justice.gov/news?search_api_fulltext=+export&start_date=05%2F01%2F2024&end_date=05%2F31%2F2024&sort_by=field_date

 

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May 22, 2024: The Justice Department announced that Pen Yu, also known as Ben Yu, 51, of Gibsonton, Florida, and Gregory Muñoz, 45, of Minneola, Florida, have each pleaded guilty to one count of wire fraud conspiracy for their roles in a scheme to fraudulently procure deeply discounted products from Massachusetts biochemical company Sigma-Aldrich Inc., doing business as MilliporeSigma, and export them to China using falsified export documents.

 

In addition, the Justice Department announced that it has declined the prosecution of MilliporeSigma after considering the factors set forth in the Department’s Principles of Federal Prosecution of Business Organizations and the National Security Division Enforcement Policy for Business Organizations (NSD Enforcement Policy). The NSD Enforcement Policy creates a presumption that companies that (1) voluntarily self-disclose to NSD potentially criminal violations arising out of or relating to the enforcement of export control or sanctions laws, (2) fully cooperate, and (3) timely and appropriately remediate will generally receive a non-prosecution agreement, unless aggravating factors are present. This is the first time that NSD has declined the prosecution of a company under the NSD Enforcement Policy.

 

https://www.justice.gov/opa/pr/ringleader-and-company-insider-plead-guilty-defrauding-biochemical-company-and-diverting

 

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Sanctions

 

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

 

May 9, 2024: 89 Fed. Reg. 41886: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) added 37 entities to the Entity List under the Export Administration Regulations (EAR). This action reflects BIS ‘s commitment to safeguarding U.S. national security and foreign policy interests. Also, the Commerce Department has added 355 PRC entries to the Entity List – more than any prior Administration.

Among the new entities added to the Entity List, 22 institutes and firms were added for their participation in the People’s Republic of China’s (PRC) quantum technology advancements and for acquiring or attempting to acquire U.S.-origin items to enhance the PRC’s quantum capabilities. These activities have substantial military applications and pose a significant threat to U.S. national security. Additionally, some of these entities are linked to advancements in the PRC’s nuclear programs or have been involved in the shipment of controlled items to Russia following its invasion of Ukraine in February 2022.

Four entities were added for acquiring or attempting to acquire U.S.-origin items to be used by the PRC’s military for its unmanned aerial systems (UAS).

Eleven entities were added under the destination of PRC for their involvement in China’s High Altitude Balloon program, which poses significant national security concerns. This builds on previous actions the Commerce Department took in February 2023 to target PRC aerospace programs, including airships, balloons and related materials.

The list of sanctioned entities can be found below:

• AEE Shenzhen Yidian Aviation Technology Co., Ltd.;
• Beijing Academy of Quantum Information Sciences;
• Beijing BDStar Navigation Co., Ltd;
• Beijing Leike Defense Technology Co., Ltd.;
• Beijing Ruidakang Technology Co., Ltd.;
• Beijing Tianhaida Technology Co., Ltd.;
• Beijing Zhongshang Dingsheng Mechanical and Electrical Equipment Co., Ltd.;
• CETC Chip Technology Co., Ltd.;
• Ceyear Technologies Co., Ltd.;
• Chengdu Day Communication Technology Co., Ltd.;
• Chengdu Zongheng Automation Technology Co., Ltd.;
• China Electronics Technology Group Corporation 16th Research Institute;
• China Electronics Technology Group Corporation 32nd Research Institute;
• China Electronics Technology Group Corporation 36th Research Institute;
• China Electronics Technology Group Corporation 41st Research Institute;
• China Electronics Technology Group Corporation 45th Research Institute;
• China Electronics Technology Group Corporation Electronic Equipment Group Co., Ltd.;
• Chinese Academy of Science, Center for Excellence in Quantum Information and Quantum Physics;
• Chinese Academy of Sciences, Institute of Physics;
• Chinese Academy of Sciences, Key Laboratory for Quantum Information;
• Chinese Academy of Sciences’ Shanghai Institute of Microsystem and Information Technology;
• CSIC Pride (Nanjing) Cryogenic Technology Co., Ltd.;
• GEOVIS Technology Co., Ltd.;
• Hefei National Laboratory for Quantum Information Science;
• Hexin Xingtong Technology (Beijing) Co., Ltd.,
• Jinan Institute of Quantum Technology;
• Origin Quantum Computing Technology (Hefei) Co., Ltd.;
• Quantum Science and Technology Yangtze River Delta Industrial Innovation Center;
• Shanghai Center for Quantum Science Research;
• Shenzhen Institute of Quantum Science and Engineering;
• Shenzhen Yidian Technology Co., Ltd.;
• Suzhou Telecom Electric Plant Co., Ltd.;
• TaiYuan EFT Equipment Manufacturing Co., Ltd;
• United Microelectronics Center Co., Ltd.;
• University of Science and Technology of China;
• Xi’an Hengda Microwave Technology Development Co., Ltd.; and
• Zhongke Xingtu Space Technology Co., Ltd.

https://www.bis.gov/press-release/commerce-adds-37-prc-entities-entity-list-enabling-prc-quantum-and-aerospace-programs and

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

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

 

May 1, 2024: The Department of the Treasury acted to further degrade Russia’s ability to sustain its war machine, continuing a multilateral campaign to limit the Kremlin’s revenue and access to the materiel it needs to prosecute its illegal war against Ukraine. The actions target Russia’s military-industrial base and chemical and biological weapons programs as well as companies and individuals in third countries that help Russia acquire key inputs for weapons or defense-related production.

The United States, along with many international partners, is particularly concerned about entities based in the People’s Republic of China (PRC) and other third countries that provide critical inputs to Russia’s military-industrial base. This support enables Russia to continue its war against Ukraine and poses a significant threat to international security. The almost 300 targets being sanctioned by both Treasury and the Department of State include sanctions on dozens of actors that have enabled Russia to acquire desperately needed technology and equipment from abroad.

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 95, “Authorizing Civil Aviation Safety and Wind Down Transactions Involving Limited Liability Company Aviakompaniya Pobeda,” Russia-related General License 96, “Authorizing Limited Safety and Environmental Transactions Involving Certain Blocked Persons or Vessels,” and Russia-related General License 97, “Authorizing the Wind Down of Transactions Involving Certain Entities Blocked on May 1, 2024.”

Russia-related General License 95: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the provision, exportation, or reexportation of goods, technology, or services to ensure the safety of civil aviation involving Limited Liability Company Aviakompaniya Pobeda are authorized through 12:01 a.m. eastern daylight time, July 30, 2024, provided that the goods, technology, or services that are provided, exported, or reexported are for use on aircraft operated solely for civil aviation purposes.

Russia-related General License 96: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to one of the following activities involving blocked persons are authorized through 12:01 a.m. eastern daylight time, July 30, 2024, provided that any payment to a blocked person must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations.

Russia-related General License 97: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of any transaction involving one or more of the following blocked entities are authorized through 12:01 a.m. eastern daylight time, June 17, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations.

Please see the full list of sanctioned individuals, entities, and vessels at the links below.

https://ofac.treasury.gov/recent-actions/20240501 and https://home.treasury.gov/news/press-releases/jy2318

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May 2, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated five individuals for helping U.S.-designated Hizballah money exchanger Hassan Moukalled (Moukalled) and his company, CTEX Exchange, evade sanctions and facilitate illicit activities in support of Hizballah. These individuals, including two co-founders of CTEX Exchange and two of Moukalled’s sons, operate two companies in Lebanon and the United Arab Emirates (UAE) that were concurrently designated. Individuals and entities targeted are designated pursuant to Executive Order (E.O.) 13224, as amended, which targets terrorist groups, their supporters, and those who aid acts of terrorism.

 

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

 

• Al-Zein, Mazen Hassan of Lebanon;
• Mansur, Firas Hasan of Lebanon;
• Moukalled, Firas Hasan of Lebanon;
• Mushantaf, Andriyah Samir of Lebanon; and
• Youssef, Adnan Mahmoud of Lebanon.

 

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

 

• Teleport Company Sal of Lebanon; and
• The Crystal Group of the United Arab Emirates.

 

https://home.treasury.gov/news/press-releases/jy2319 and https://ofac.treasury.gov/recent-actions/20240502

 

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May 6, 2024: OFAC has deployed its new Sanctions List Service (SLS).  SLS is now the primary application OFAC will use to deliver sanctions list files and data to the public.

SLS includes support for all OFAC legacy and modern sanctions list data files.

While certain sanctions list data are now hosted within the SLS cloud, existing links to OFAC list files remain functional through URL redirects.

 

https://ofac.treasury.gov/recent-actions/20240506_33 and

https://ofac.treasury.gov/sanctions-list-service

 

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May 7, 2024:  The United States designated Dmitry Yuryevich Khoroshev, a Russian national and a leader of the Russia-based LockBit group, for his role in developing and distributing LockBit ransomware. This designation is the result of a collaborative effort with the U.S. Department of Justice, Federal Bureau of Investigation, the United Kingdom’s National Crime Agency, the Australian Federal Police, and other international partners. Concurrently, the Department of Justice unsealed an indictment and the Department of State announced a reward offer for information leading to the arrest and/or conviction of Khoroshev. The United Kingdom and Australia also announced the designation of Khoroshev.

 

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

 

• Khoroshev, Dmitry Yuryevich of Russia.

 

https://home.treasury.gov/news/press-releases/jy2326 and

https://ofac.treasury.gov/recent-actions/20240507

 

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May 8, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC)  amended the Reporting, Procedures and Penalties Regulations (RPPR).  The RPPR sets forth standard reporting and recordkeeping requirements and license application and other procedures relevant to the economic sanctions programs administered by OFAC.

 

https://ofac.treasury.gov/recent-actions/20240508 and

https://ofac.treasury.gov/media/932891/download?inline

 

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May 10, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Venezuela General License 8N, “Authorizing Transactions Involving Petróleos de Venezuela, S.A. (PdVSA) Necessary for the Limited Maintenance of Essential Operations in Venezuela or the Wind Down of Operations in Venezuela for Certain Entities.”

 

Venezuela General License 8N:  All transactions and activities prohibited by Executive Order (E.O.) 13850 of November 1, 2018, as amended by E.O. 13857 of January 25, 2019, or E.O. 13884 of August 5, 2019, each as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), that are ordinarily incident and necessary to the limited maintenance of essential operations, contracts, or other agreements, that: (i) are for safety or the preservation of assets in Venezuela; (ii) involve PdVSA or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest; and (iii) were in effect prior to July 26, 2019, are authorized through 12:01 a.m. eastern standard time, November 15, 2024, for the following entities and their subsidiaries (collectively, the “Covered Entities”):

 

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

 

https://ofac.treasury.gov/recent-actions/20240510 and

https://ofac.treasury.gov/media/932871/download?inline

 

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May 14, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated one Russian individual and three Russia-based companies involved in an attempted sanctions evasion scheme in which an opaque and complex supposed divestment could have unfrozen more than $1.5 billion worth of shares belonging to U.S.-designated Russian oligarch Oleg Vladimirovich Deripaska (Deripaska).

 

OFAC designated Deripaska on April 6, 2018 pursuant to Executive Order (E.O.) 13661 for having acted or purported to act for or on behalf of, directly or indirectly, a senior official of the Government of the Russian Federation as well as pursuant to E.O. 13662 for operating in the energy sector of the Russian Federation economy. Deripaska is also sanctioned by Australia, Canada, the European Union, New Zealand, and the United Kingdom. On September 29, 2022, the U.S. Department of Justice charged Deripaska with conspiring to violate and evade U.S. sanctions in violation of the International Emergency Economic Powers Act.

 

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

 

• Beloglazov, Dimitrii Aleksandrovich of Russia.

 

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

 

• Aktsionerno Obshcestvo Iliadis of Russia;
• International Company Joint Stock Company Raperia Trading Limited of Russia; and
• Obschestvo Organichennoi Otvetstvennostiu Titlu of Russia.

 

https://ofac.treasury.gov/recent-actions/20240514 and

https://home.treasury.gov/news/press-releases/jy2337 and

https://home.treasury.gov/news/press-releases/sm0338 and

https://www.justice.gov/opa/pr/russian-oligarch-oleg-vladimirovich-deripaska-and-associates-indicted-sanctions-evasion-and

 

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May 15, 2024: the Department of the Treasury’s Office of Foreign Assets Control (OFAC) targeted the Ortega-Murillo regime’s repression of the Nicaraguan people and its ability to manipulate the gold sector and profit from corrupt operations. Treasury imposed sanctions on three Nicaragua-based entities, the Training Center of the Russian Ministry of Internal Affairs in Managua (RTC); Compania Minera Internacional, Sociedad Anónima (COMINTSA); and Capital Mining Investment Nicaragua, Sociedad Anónima (Capital Mining), pursuant to Executive Order (E.O.) 13851, as amended.

The RTC is a Nicaragua-based subdivision of the Government of the Russian Federation’s (GOR) Ministry of Internal Affairs, which trains those under the Ortega-Murillo regime’s command under the Russian authoritarian government’s playbook of oppression. It is a key actor in the Nicaraguan regime’s repression of civil society and unjust detention and imprisonment of individuals for expressing dissent, or otherwise peacefully exercising their human rights and fundamental freedoms.

 

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

 

• Capital Mining Investment Nicaragua, Sociedad Anonima of Nicaragua;
• Compania Minera Internacional, Sociedad Anonima of Nicaragua; and
• Training Center of The Russian Ministry of Internal Affairs in Managua of Nicaragua.

 

https://ofac.treasury.gov/recent-actions/20240515 and

https://home.treasury.gov/news/press-releases/jy2339

 

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May 15, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Ali Yagoub Gibril and Osman Mohamed Hamid Mohamed, pursuant to Executive Order (E.O.) 14098, for leading the Rapid Support Forces’ (RSF) war campaign. The RSF’s attacks in North Darfur, which started last month, have caused dozens of civilian casualties, including children. The RSF encirclement of North Darfur’s capital of El Fasher and recent fighting between the RSF and the Sudanese Armed Forces have endangered nearly one million Sudanese civilians in the last major safe haven in Darfur, impeded humanitarian access, increased the risk of mass atrocities, and could undermine vital peace efforts.

 

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

 

• Gibril, Ali Yagoub of Sudan; and
• Mohamed, Osman Mohamed Hamid of Sudan.

 

https://ofac.treasury.gov/recent-actions/20240515 and

https://home.treasury.gov/news/press-releases/jy2340

 

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May 16, 2024:  The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on two Russian individuals and three Russia-based entities for facilitating weapons transfers between Russia and the Democratic People’s Republic of Korea (DPRK). This action promotes U.S. government objectives to disrupt and expose arms transfers between the DPRK and Russia and builds upon sanctions imposed by the Department of the Treasury and the Department of State related to DPRK-Russia arms transfers, including the transfer and testing of DPRK-origin ballistic missiles for Russia’s use against Ukraine. This action demonstrates our resolve to impose costs on and hold the DPRK and Russia to account for their unlawful activities.

 

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

 

• Budnev, Aleksey of Russia; and
• Gazaryan, Rafael Anatolyevich of Russia.

 

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

 

• Rafort Limited Liability Company of Russia;
• Tekhnologiya, OOO of Russia; and
• Trans Kapital Limited Liability Company of Russia.

 

https://ofac.treasury.gov/recent-actions/20240516 and

https://home.treasury.gov/news/press-releases/jy2345

 

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May 16, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended the Iranian Transactions and Sanctions Regulations (ITSR) to incorporate Iran-related General License D-2 and publishing an associated List of Services, Software, and Hardware Incident to Communications, which can be found under the General Licenses and Federal Register Notices sections of the Iran Sanctions page.

 

In addition, OFAC published a new Frequently Asked Question (FAQ) 1173 and amended 26 ITSR-related FAQs.

 

Frequently Asked Question 1173:

 

Q: What are “user authentication services” for purposes of the general license in 31 CFR § 560.540 of the Iranian Transactions and Sanctions Regulations (ITSR)?

 

A: User authentication services are services used to login or verify the identity of a user to a particular software or service, such as a user identification account often used to login to email, mobile app stores, or other activities authorized by 31 CFR § 560.540.

 

*******

 

 

 

 

 

May 17, 2024: 89 Fed. Reg. 43311: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) adopted a final rule amending the Iranian Transactions and Sanctions Regulations (ITSR) to incorporate a general license that was previously published on OFAC’s website. In particular, the rule incorporates, with amendments, a general license relating to the export, reexport, and provision of certain services, software, and hardware incident to communications over the internet. This amendment also makes additional conforming changes.

 

https://www.federalregister.gov/documents/2024/05/17/2024-10721/iranian-transactions-and-sanctions-regulations

 

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May 28, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated three individuals, Yunhe Wang, Jingping Liu, and Yanni Zheng, for their activities associated with the malicious botnet tied to the residential proxy service known as 911 S5. OFAC also sanctioned three entities—Spicy Code Company Limited, Tulip Biz Pattaya Group Company Limited, and Lily Suites Company Limited—for being owned or controlled by Yunhe Wang.

 

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

 

• Liu, Jingping of China;
• Wang, Yunhe of China; and
• Zheng, Yanni of China.

 

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

 

• Lily Suites Company Limited of Thailand;
• Spicy Code Company Limited of Thailand; and
• Tulip Biz Pattaya Group Company Limited of Thailand.

 

https://ofac.treasury.gov/recent-actions/20240528_33 and

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

 

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May 28, 2024:89 Fed. Reg. 46323: The Department of the Treasury’s (Treasury) Office of Foreign Assets Control (OFAC) amended the Cuban Assets Control Regulations, 31 CFR part 515, (CACR) to further implement the policy announced by the Biden-Harris Administration on May 16, 2022 to increase support for the Cuban people.  These regulatory amendments update and clarify authorizations in support of internet-based services to promote internet freedom in Cuba, support independent Cuban private sector entrepreneurs, and expand access to certain financial services for the Cuban people.

 

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended the Cuban Assets Control Regulations, 31 C.F.R. Part 515 (CACR) to further implement portions of the President’s foreign policy toward Cuba. Among other things, these amendments increase support for internet freedom for the Cuban people and independent Cuban private sector entrepreneurs by expanding authorizations for internet-based services and a range of financial transactions.

 

OFAC is also issuing six new, Cuba-related Frequently Asked Questions (FAQs 1174-1179)

 

FAQ 1174:

 

Q: What level of due diligence are web hosting providers expected to conduct to ensure that a hosted website is not “for the promotion of tourism” pursuant to 31 CFR § 515.578?

 

A: Persons providing web hosting services authorized pursuant to 31 CFR § 515.578 may reasonably rely on information provided to them by their customers in the ordinary course of business, unless they know or have reason to know their provision of web hosting services is for the promotion of tourism.

 

FAQ 1175:

 

Q: Are services related to application programming interfaces (APIs) that are incident to the exchange of communications over the internet authorized for exportation or reexportation to Cuba pursuant to OFAC regulations?

 

A: Yes.  Section 515.578(a)(1)(i) of the CACR authorizes the direct or indirect exportation or reexportation to Cuba, from the United States or by a person subject to U.S. jurisdiction, of certain services. Among these are API-related services incident to the exchange of communications over the internet.  This authorization may include, for example, API services incident to, among other services described in 31 CFR § 515.578(a)(1)(i), web maps, social media platforms, collaboration platforms, video conferencing, and e-gaming and e-learning platforms.  Section 515.578(a)(ii) of the CACR authorizes the direct or indirect exportation or reexportation to Cuba, from the United States or by a person subject to U.S. jurisdiction, of services to support the exchange of communications over the internet, such as software design, business consulting, information technology management services, and cloud-based services (including remote data storage, data transport service, content distribution networks, virtual machines, software-as-a-service, and infrastructure-as-a-service).

With respect to the exportation or reexportation of API software to Cuba, including the download of such software, 31 CFR § 515.533(a) authorizes all transactions ordinarily incident to the export to Cuba of items from the United States, or reexport to Cuba of items from a third country, if the export or reexport is licensed or otherwise authorized by the Department of Commerce pursuant to the Export Administration Regulations (EAR) (15 CFR parts 730 through 774).  For example, the export and reexport to Cuba of certain software is authorized under License Exception Consumer Communications Devices (CCD), 15 CFR § 740.19, and License Exception Support for the Cuban People (SCP), 15 CFR § 740.21.

 

FAQ 1176:

 

Q: What level of due diligence are internet-based service providers expected to conduct to determine whether the intended recipients of an export or reexport are prohibited officials of the Government of Cuba, prohibited members of the Cuban Communist Party, or organizations administered or controlled by the Government of Cuba or the Cuban Communist Party pursuant to 31 CFR § 515.578(b)(1)?

 

A: Section 515.578(b)(1) of the CACR excludes from authorization under 31 CFR 515.578(a)(1)-(3) the direct or indirect exportation or reexportation of services with knowledge or reason to know that such services are intended for a prohibited official of the Government of Cuba, as defined in 31 CFR § 515.337, a prohibited member of the Cuban Communist Party, as defined in 31 CFR § 515.338, or to organizations administered or controlled by the Government of Cuba or the Cuban Communist Party, except as specified in 31 CFR § 515.578(a)(4).

 

For purposes of assessing whether exports or reexports are excluded from 31 CFR § 515.578 pursuant to 31 CFR § 515.578(b)(1), internet-based service providers subject to U.S. jurisdiction may reasonably rely on information provided to them by their customers in the ordinary course of business, unless they know or have reason to know a transaction is not authorized.

 

FAQ 1177:Top of Form

 

Q: What internet-based services can be exported or reexported from the United States or by persons subject to U.S. jurisdiction to prohibited officials of the Government of Cuba, prohibited members of the Cuban Communist Party, or organizations administered or controlled by the Government of Cuba or the Cuban Communist Party?

 

A: Section 515.578(a)(4)(i) of the CACR authorizes the exportation or reexportation, directly or indirectly, from the United States or by a person subject to U.S. jurisdiction, to a prohibited official of the Government of Cuba, as defined in 31 CFR § 515.337, a prohibited member of the Cuban Communist Party, as defined in 31 CFR § 515.338, of certain internet-based services and services related to certain exportations and reexportations, as described in 31 CFR § 515.578(a)(1) or 31 CFR § 515.578(a)(2), respectively, provided that such services are widely available to the public at no cost to the user.  Examples of authorized services include:

• Social media platforms;
• Collaboration platforms;
• Video conferencing;
• E-gaming and e-learning platforms;
• Automated translation;
• Web maps;
• User authentication services;
• Cloud-based services to support services described in section § 515.584(a)(1)(i); and

Services to install, repair, or replace items related to communication, or items used to develop software that improves the free flow of information or that will support private sector activities in Cuba consistent with the export or reexport licensing policy of the Department of Commerce.

 

FAQ 1178:

 

Q: Can a good be considered “produced by independent private sector entrepreneurs” for purposes of 31 CFR § 515.582 (authorizing the importation of certain goods and services produced by independent private sector entrepreneurs) if a Cuban state-owned entity is involved?

 

A: Section 515.582 of the CACR authorizes persons subject to U.S. jurisdiction to import certain goods and services produced by independent private sector entrepreneurs, as determined by the State Department and set forth on the State Department’s Section 515.582 List.  See FAQ 770.

In determining whether a good is produced by an independent private sector entrepreneur, as defined in 31 CFR § 515.340, persons subject to U.S. jurisdiction should consider the extent of Cuban state-owned entities’ involvement in the production and exportation of such goods.  For example, goods generally are not considered produced by independent private sector entrepreneurs if the manufacturing or processing conducted by Cuban state-owned entities results in a product with a new name, character, or use.  For example, an agricultural commodity grown by an independent grower but then processed by Cuban state-owned entities into a new product prior to exportation would not be a good produced by an independent private sector entrepreneur for purposes of 31 CFR § 515.582.  However, a good can still be considered produced by an independent private sector entrepreneur if, for example, Cuban state-owned entities are involved only in packing of the final product or acting solely as an export agent.

 

FAQ 1179:

 

Q: What type of small businesses are considered an “independent private sector entrepreneur” (as defined in 31 CFR § 515.340)?

 

A: Section 515.340 defines the term “independent private sector entrepreneur” to mean a Cuban national who is not a prohibited official of the Government of Cuba or a prohibited member of the Cuban Communist Party, and who is one or more of the following:  (a) an owner, including a self-employed individual (cuentapropista), or employee of a small private business entity, private cooperative, or a sole proprietorship located in Cuba, in each case of up to 100 employees; (b) an independent contractor or consultant; (c) a small farmer who owns his or her own land; (d) a small usufruct farmer who cultivates state-owned land to sell products on the open market; or (e) a private cooperative or small private business entity located in Cuba of up to 100 employees that is owned only by individuals described in paragraphs (a) through (d) of § 515.340.  For example, small private business entities or private cooperatives owned only by independent private sector entrepreneurs, as defined, could include:

 

• Agricultural businesses and farming cooperatives;
• Animal feed and veterinary services;
• IT services, software development businesses, and mobile application developers
• Food and beverage importers, production/processing businesses, packaging and food distributors;
• Clothing, jewelry, fashion design, and beauty/cosmetics suppliers and services;
• Historic preservation and cultural preservation businesses;
• Arts-related businesses;
• Machinery manufacturing and repair businesses;
• Shipping, logistics, expediting, and delivery of goods businesses;
• Medical supply businesses;
• Restaurants and bars;
• Taxis and transportation services;
• Bed and breakfasts;
• Manufacturing companies;
• Business consulting services, marketing and branding services;
• Accounting and bookkeeping services;
• Home construction business and remodeling, plumbing, electrical, or other repair companies for business or residential facilities and homes;
• Furniture design and manufacturing companies;
• Travel services;
• Vendors of personal care and household items, furniture, and appliances;
• Interior decoration and design businesses;
• Film and media production or journalism businesses;
• Gyms, personal training, or fitness classes; and
• Mechanical services (automobile, refrigeration, heating and A/C services and repair).

 

 

https://home.treasury.gov/news/press-releases/jy2374 and

https://ofac.treasury.gov/media/932896/download?inline and

https://ofac.treasury.gov/faqs/added/2024-05-28 and

https://ofac.treasury.gov/recent-actions/20240528 and

https://www.federalregister.gov/documents/2024/05/29/2024-11618/cuban-assets-control-regulations

 

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May 30, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) continued to counter Russia’s destabilizing activities in Africa by sanctioning two companies that are linked to the Private Military Company “Wagner” (Wagner Group). Mining Industries SARLU and Logistique Economique Etrangere SARLU are being designated pursuant to Executive Order (E.O.) 14024 for enabling Wagner Group security operations and Wagner Group-linked illicit mining endeavors in the Central African Republic (CAR).

 

Since its arrival in CAR in late 2017, the Kremlin-backed Wagner Group and companies formerly controlled by the now-deceased Yevgeny Prigozhin have established a vast security and business network in CAR, among other African counties. This network has advanced Russia’s destabilizing activities at the expense of CAR’s sovereignty, including the Wagner Group’s destructive operations and Wagner Group-linked companies’ involvement in illicit gold and diamond mining and logging. OFAC has taken previous action against several Wagner Group-linked companies in CAR, including Lobaye Invest, Midas Ressources SARLU, and Bois Rouge SARLU (Bois Rouge), now known as Wood International Group SARLU.

 

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

 

• Mining Industries Sarlu of the Central African Republic

 

https://ofac.treasury.gov/recent-actions/20240530

 

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May 31, 2024: the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has targeted four entities associated with OFAC-designated Rayan Roshd Afzar Company (RRA) that have procured critical parts for Iran’s unmanned aerial vehicle (UAV) program. Additionally, OFAC has targeted an Iranian executive of Iran Aviation Industries Organization (IAIO), a subsidiary of Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) that oversees UAV manufacturers Iran Aircraft Manufacturing Industrial Company (HESA) and Qods Aviation Industries (QAI).

 

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

 

• Khajeh Fard, Afshin of Iran.

 

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

 

• Fanavarihaye Hava Pishran Sazeh Sepehr Co LLC of Iran;
• Kish Mechatronics Co of Iran;
• Mersad Mohajer Co LLC of Iran; and
• Rayan Fan Kav Andish Co of Iran.

 

https://ofac.treasury.gov/recent-actions/20240531

This newsletter is a listing of the latest changes in export control regulations through April 30, 2024.  The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

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

REGULATORY UPDATES

President

President Biden Continued the National Emergency with Respect to Somalia

April 9, 2024: On April 12, 2010, by Executive Order 13536, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the deterioration of the security situation and the persistence of violence in Somalia; acts of piracy and armed robbery at sea off the coast of Somalia, which have been the subject of United Nations Security Council resolutions; and violations of the arms embargo imposed by the United Nations Security Council.

On July 20, 2012, the President issued Executive Order 13620 to take additional steps to deal with the national emergency declared in Executive Order 13536 in view of United Nations Security Council Resolution 2036 of February 22, 2012, and Resolution 2002 of July 29, 2011, and to address:  exports of charcoal from Somalia, which generate significant revenue for al-Shabaab; the misappropriation of Somali public assets; and certain acts of violence committed against civilians in Somalia, all of which contribute to the deterioration of the security situation and the persistence of violence in Somalia.

The situation with respect to Somalia continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.  For this reason, the national emergency declared on April 12, 2010, and the measures adopted on that date and on July 20, 2012, to deal with that threat, must continue in effect beyond April 12, 2024.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 13536.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/04/09/press-release-notice-on-the-continuation-of-the-national-emergency-with-respect-to-somalia/ and

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

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President Biden Continued The National Emergency with Respect to Russia

April 9, 2024: On April 15, 2021, by Executive Order 14024, President Biden declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by specified harmful foreign activities of the Government of the Russian Federation.  On March 8, 2022, President Biden issued Executive Order 14066 to expand the scope of the national emergency declared in Executive Order 14024. On August 20, 2021, March 11, 2022, April 6, 2022, and December 22, 2023, President Biden issued Executive Orders 14039, 14068, 14071, and 14114, respectively, to take additional steps with respect to the national emergency declared in Executive Order 14024.

Specified harmful foreign activities of the Government of the Russian Federation — in particular, efforts to undermine the conduct of free and fair democratic elections and democratic institutions in the United States and its allies and partners; to engage in and facilitate malicious cyber-enabled activities against the United States and its allies and partners; to foster and use transnational corruption to influence foreign governments; to pursue extraterritorial activities targeting dissidents or journalists; to undermine security in countries and regions important to United States national security; and to violate well-established principles of international law, including respect for the territorial integrity of states -‑ continue to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.

For this reason, the national emergency declared in Executive Order 14024, which was expanded in scope by Executive Order 14066, and with respect to which additional steps were taken in Executive Orders 14039, 14068, 14071, and 14114, must continue in effect beyond April 15, 2024.

Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 14024.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/04/09/press-release-notice-on-the-continuation-of-the-national-emergency-with-respect-to-specified-harmful-foreign-activities-of-the-government-of-the-russian-federation/ and

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

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President Biden Continued The National Emergency with Respect to the Regulation of the Anchorage and Movement of Russian-Affiliated Vessels to United States Ports

April 16, 2024: On April 21, 2022, by Proclamation 10371, President Biden declared a national emergency by reason of a disturbance or threatened disturbance of international relations of the United States and authorized the Secretary of Homeland Security to regulate the anchorage and movement of Russian-affiliated vessels, pursuant to the National Emergencies Act (50 U.S.C. 1601 et seq.) and section 1 of title II of Public Law 65-24, ch. 30, June 15, 1917, as amended (Magnuson Act) (46 U.S.C. 70051).

The policies and actions of the Government of the Russian Federation to continue the premeditated, unjustified, unprovoked, and brutal war against Ukraine continue to constitute a national emergency by reason of a disturbance or threatened disturbance of international relations of the United States.  Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency with respect to the Russian Federation and the emergency authority relating to the regulation of the anchorage and movement of Russian‑affiliated vessels to United States ports set out in Proclamation 10371.

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/04/16/press-release-notice-on-the-continuation-of-the-national-emergency-and-of-the-emergency-authority-relating-to-the-regulation-of-the-anchorage-and-movement-of-russian-affiliated-vessels-to-united-stat/ and

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

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

DDTC Issues General Findings from Visits to Universities and Research Centers

April 10, 2024: The Directorate of Defense Trade Controls issued a white paper providing general findings from visiting various universities and research centers that are engaged in activities of the International Traffic in Arms Regulations from 2020 to early 2024.  The paper provides general compliance commendations, including “best practices” and recommendations that the Office of Defense Trade Controls Compliance provided to the universities following each visit.

https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_kb_article_page&sys_id=4f06583fdb78d300d0a370131f961913 and

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

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Proposed Rule: DDTC Registration Fees

April 24, 2024: 89 Fed. Reg. 3119: The State Department published in the Federal Register a proposed rule to amend the International Traffic in Arms Regulations (ITAR).  A link to the proposed rule is provided below.

As a brief summary, for the first time in nearly sixteen years the Department of State proposes to amend the ITAR to increase the fee amounts required for registration with the Directorate of Defense Trade Controls (DDTC).  The proposed rule is necessary to account for inflation, increased operating expenses, and to provide better services to the regulated public and to our partners in the defense industrial base.  The proposed amendments also include:

• A return of the fee structure to the text of the ITAR at § 122.3;
• Non-substantive movement of text from ITAR § 122.3 to § 122.2 to better organize content;
• Revision of a section heading to better describe content;
• Addition of text regarding registration discounts and how to obtain further guidance; and
• Conforming changes to brokering in ITAR part 129.

The fee increases are summarized below:

• Tier 1 registrant’s flat fee would increase from $2,250 to $3,000.
• Tier 2 registrant’s flat fee would increase from $2,750 to $4,000.
• Tier 3 registrant’s flat fee would increase from $2,750 to $4,000 and each subsequent favorable determination past the first five instead of ten, would rise from $250 to $1,100.

DDTC will accept comments on this rule through June 10, 2024.

See our detailed article on our website.

https://fdassociates.net/the-fifteen-year-freeze-in-ddtc-registration-fees-sees-a-big-thaw/

https://www.federalregister.gov/documents/2024/04/24/2024-08627/international-traffic-in-arms-regulations-registration-fees and

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

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DDTC Name And Address Changes Posted To Website

April 2 through 29, 2024: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at    

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

 

• Change in Name from TRIGO Qualitaire GmbH to TRIGO ADR (Aerospace, Defense, & Rail) Germany GmbH due to corporate rebranding;
• Change in Name from TRIGO Qualitaire S.A.S. to TRIGO ADR (Aerospace, Defense, & Rail) France S.A.S. due to corporate rebranding;
• Change in Address for Boeing Defence Australia Ltd. from 150 Charlotte Street, Brisbane, QLD 4000, Australia to 123 Albert Street, Brisbane, QLD 4000, Australia;
• Change in Name from Harris Communications GmbH to L3Harris Technologies Germany GmbH due to corporate rebranding;
• Change in Name from Brammer S.A. to Rubix Polska S.A due to merger;
• Change in Address for TransDigm Inc. from 1301 East 9th Street, Suite 3000, Cleveland, OH 44114 to US Bank Centre, 1350 Euclid Avenue, Suite 1600, Cleveland, OH 44115.
• Change in Name from L-3 Communications India Private Ltd. to L3Harris Maritime & Aero Private Ltd due to corporate rebranding;
• The following KNDS N.V. entities will change their name as a result of corporate rebranding;

 

Old Name	New Name
Nexter Systems	KNDS France
Nexter Munitions	KNDS Ammo France
NBC Sys	KNDS CBRN
Nexter Mechanics	KNDS France Mechanics
OPTSys	KNDS Optronics
Nexter Training	KNDS France Training
Nexter Robotics	KNDS France Robotics
Krauss-Maffei Wegmann GmbH & Co. KG	KNDS Deutschland GmbH & Co. KG
BTD Battle Tank Dismantling GmbH	KNDS Deutschland Battle Tank Dismantling GmbH
ATM ComputerSysteme GmbH	KNDS Deutschland Mission Electronics GmbH
DST Defence Service Tracks GmbH	KNDS Deutschland Tracks GmbH
DSL Defence Service Logistics GmbH	KNDS Deutschland Maintenance GmbH
KMW Schweisstechnik GmbH	KNDS Deutschland Steel Contructions GmbH
MECAR	KNDS Belgium
Simmel Difesa S.p.A.	KNDS Ammo Italy S.p.A.
WFEL Limited	to KNDS Defence UK Limited

 

• Change in Name from Ball Aerospace & Technologies Corporation to BAE Systems Space & Mission Systems, Inc. due to acquisition;
• Change in Name from H.C. Starck Inc. to Materion Corporation due to acquisition;
• The following BAE Systems Saudi Development and Training Company Ltd entities will change their name as a result of a merger with Saudi Maintenance and Supply Chain Management Company Ltd (SMSCMC);

 

Old Name	New Name
BAE Systems Saudi Development and Training Company Ltd (SDT)	BAE Systems Arabian Industries Ltd
BAE Systems SDT Ltd	BAE (UK) Ltd to BAE Systems Arabian Industries (Capability & Training-UK) Ltd
SMSCMC (UK) Ltd	BAE Systems Arabian Industries (Supply Chain-UK)

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Newsflash:

The use of digital signatures are not acceptable for signing TAAs per DDTC licensing.

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Department of Defense, Defense Security Cooperation Agency (DSCA)

DSCA Notifies Congress of Potential FMS Sale To Ukraine

April 9, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of Ukraine has requested to buy sustainment-related articles and services for the HAWK Phase III missile system, including engineering and integration for communications and interoperability; refurbishment and system overhaul of HAWK air defense fire units; missile recertification components; tool kits; test equipment; support equipment; technical documentation; spare parts; training; U.S. Government and contractor technical and field office support; and other related elements of logistics and program support. The estimated total cost is $138 million.

The Secretary of State has determined and provided detailed justification that an emergency exists that requires the immediate sale to the Government of Ukraine of the above defense articles and services in the national security interests of the United States, thereby waiving the congressional review requirements under Section 36(b) of the Arms Export Control Act, as amended.

The principal contractors will be RTX Corporation, located in Andover, MA, and PROJECTXYZ, located in Huntsville, AL. Equipment will be supplied from a combination of U.S. Army stock, country donations, Commercial Off-the-Shelf (COTS), and new production. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/ukraine-hawk-phase-iii-missile-system-sustainment

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DSCA Notifies Congress Of Potential FMS Sale to the Kingdom of Saudi Arabia

April 10, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Kingdom of Saudi Arabia has requested to buy fifty (50) Multifunctional Information Distribution System-Low Volume Terminal (MIDS-LVT) Block Upgrade 2 (BU2) Terminals and one hundred (100) additional MIDS-LVT BU2 Retrofit Kits that will be added to a previously implemented case whose value was under the congressional notification threshold. The original Foreign Military Sales (FMS) case, valued at $12.6 million, included thirty-five (35) Multifunctional Information Distribution System Joint Tactical Radio System (MIDS JTRS) and twenty-four (24) MIDS-LVT BU2 Retrofit Kits. The Kingdom of Saudi Arabia has also requested a new FMS case that includes one hundred ninety-four (194) MIDS JTRS and thirteen (13) MIDS-LVT BU2 Terminals. This notification is for a combined total of two hundred twenty-nine (229) MIDS JTRS; sixty-three (63) MIDS-LVT BU2 Terminals; and one hundred twenty-four (124) MIDS-LVT BU2 Retrofit Kits. Also included are TacNet Tactical Radios; Low Volume Terminal Cryptographic Modules; other communications equipment; support equipment; engineering and technical support and assistance; training; and other related elements of logistics and program support. The estimated total cost is $101.1 million. The principal contractor has not been determined as there will be a competitive contractual award process after case implementation. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/kingdom-saudi-arabia-multifunctional-information-distribution-systems

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DSCA Notifies Congress Of Potential FMS Sale to The Government of Iraq

April 15, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of Iraq has requested to buy Contractor Logistics Support (CLS) and training in support of its C-172 and AC/RC-208 aircraft fleet. Included is advising, technical, and proficiency training for Iraqi maintainers and aircrews; CLS; spare and repair parts, components, accessories, and repair and return support; minor modifications and upgrades; subscription services; overhaul and depot level maintenance and maintenance support; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $140 million. The principal contractor will be Northrop Grumman Corporation, located in Falls Church, VA. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/iraq-c-172-and-acrc-208-aircraft-contractor-logistics-support

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DSCA Notifies Congress Of Potential FMS Sale to The Government of Argentina

April 18, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of Argentina has requested to buy Basler BT-67 aircraft; spare engines; spares and repair parts, consumables, accessories, and repair and return services; major modifications and maintenance support; aircraft and ground handling equipment and support; unclassified publications and technical documentation; Technical Coordination Program participation fees; studies and surveys; ferry and transportation support; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $143 million. The principal contractor will be Basler Turbo Conversions located in Oshkosh, WI. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/argentina-basler-bt-67-aircraft

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DSCA Notifies Congress of Potential FMS Sale to The Government of Poland

The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of Poland has requested to buy three hundred sixty (360) Advanced Anti-Radiation Guided Missile-Extended Range (AARGM-ER) All Up Rounds (AUR); eight (8) AGM-88G AARGM-ER Guidance Sections (spares); and eight (8) AGM-88G AARGM-ER Control Sections (spares). Also included are Dummy Air Training Missiles (DATM); missile containers, software; training; support equipment; spare and repair parts; embedded Global Positioning System receiver, M-Code; publications and technical documentation; transportation, U.S. Government, and contractor engineering; technical and logistical support services; and other related elements of logistics and program support. The estimated total cost is $1.275 billion. The principal contractor will be Northrop Grumman Systems located in Falls Church, VA. There are no known offset agreements proposed in connection with this potential sale.

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

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DSCA Notifies Congress of Potential FMS Sale to The Government of the Netherlands

April 24, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of the Netherlands has requested to buy two hundred sixty-five (265) AGM-88G Advanced Anti-Radiation Guided Missiles – Extended Range (AARGM-ER) All Up Rounds (AUR) (includes fifteen (15) Fly-to-Buy Rounds); eight (8) AGM-88G AARGM-ER Guidance Sections (spares); and eight (8) AGM-88G AARGM-ER Control Sections (spares). Also included are Dummy Air Training Missiles (DATM), missile containers; software; training; support equipment; spare and repair parts; embedded GPS receiver, M-Code; publications and technical documentation; transportation; U.S. Government and contractor engineering; technical and logistical support services; and other related elements of logistics and program support. The estimated total cost is $700 million. The principal contractor will be Northrop Grumman Systems located in Falls Church, VA. There are no known offset agreements proposed in connection with this potential sale.

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

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DSCA Notifies Congress of Potential FMS Sale to The Kingdom of Saudi Arabia

April 30, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Kingdom of Saudi Arabia has requested to buy additional blanket order training for Royal Saudi Naval Forces (RSNF) that will be added to a previously implemented case whose value was under the congressional notification threshold. The original Foreign Military Sales (FMS) case, valued at $37 million ($0 in Major Defense Equipment (MDE)), included blanket order training for the RSNF, including: precision targeting, collateral damage reduction, core technical and professional development training, ship repair facility maintainer and language proficiency courses, and professional military education provided by the U.S. Navy. This notification is for the entire blanket order training with an estimated total cost of $250 million. The principal contractor(s) will be determined after contract competition and award. There are no known offset agreements proposed in connection with this sale.

https://www.dsca.mil/press-media/major-arms-sales/kingdom-saudi-arabia-blanket-order-training

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

Commerce Releases Clarifications of Export Control Rules to Restrict the PRC’s Access to Advanced Computing and Supercomputing Items and Semiconductor Manufacturing Equipment

April 4, 2024: 89 Fed. Reg. 23976: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) has published an interim final rule (IFR) revising and clarifying two interim final rules released on October 17, 2023: (1) “Export Controls on Semiconductor Manufacturing Items” (SME IFR); and (2) “Implementation of Additional Export Controls: Certain Advanced Computing Items; Supercomputer and Semiconductor End Use; Updates and Corrections” (AC/S IFR).

The rules released on October 17, 2023, reinforce the October 7, 2022, controls to restrict the People’s Republic of China’s (PRC) ability to both purchase advanced computing chips and manufacture advanced chips critical for military advantage. These rules underscore BIS’ clear focus on strategically addressing the threats to our national security posed by the PRC Government’s military-civil fusion strategy by controlling items necessary to enable the development and production of technologies, such as artificial intelligence (AI), used in military applications. The clarifications in this Interim Final Rule answer questions posed from industry and other stakeholders after the rules were released on October 17, 2023.

Highlights of this new IFR include clarifying that:

• Computers and other products incorporating integrated circuits that require export notification to BIS also require export notification; and
• Parts and components exported for ultimate incorporation into indigenous PRC Semiconductor Manufacturing Equipment (SME) require a BIS license for the initial export.

These sector-based controls, originally released on October 7, 2022, are calibrated to address, among other concerns, the PRC Government’s efforts to produce and use advanced integrated circuits. These advanced integrated circuits, produced by critical semiconductor manufacturing equipment, can be used for the next generation of advanced weapon systems. They can also be used for advanced artificial intelligence (AI) applications, which can be leveraged to enhance the speed and accuracy of military decision making, planning, and logistics; cognitive electronic warfare; radar; signals intelligence; and jamming. Advanced AI applications can also be leveraged to monitor, track, and surveil citizens and in other applications that enable human rights violations and abuses.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3355-2023-10-17-bis-press-release-acs-and-sme-rules-final-js/file and

https://www.bis.gov/press-release/commerce-releases-clarifications-export-control-rules-restrict-prcs-access-advanced and

https://www.federalregister.gov/documents/2024/04/04/2024-07004/implementation-of-additional-export-controls-certain-advanced-computing-items-supercomputer-and

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Department of Commerce’s Bureau of Industry and Security (BIS) imposing additional controls to further restrict Iran’s access to low-level technologies.

April 18, 2024: In response to Iran’s unprecedented air attack on Israel, and its continued military cooperation with Russia, the Department of Commerce’s Bureau of Industry and Security (BIS) imposed additional controls to further restrict Iran’s access to low-level technologies, such as basic commercial grade microelectronics. This action will cut off a wider range of items from reaching Iran’s arsenal – including items manufactured outside the U.S. that are produced using U.S. technology. These changes build on BIS’s comprehensive export restrictions on Iran, which already include controls targeting Iran’s involvement in supplying Unmanned Aerial Vehicles (UAVs) in support of Russia’s illegal war in Ukraine.

BIS’s longstanding and expansive controls on dual-use items to Iran and more recent actions against Russia have forced these nations to use lower-level technologies for their military ambitions. Over the past two years, BIS has added controls on thousands of items to inhibit Russia and Iran’s access to necessary components for their war efforts.

https://www.bis.gov/press-release/media-advisory-department-commerces-bureau-industry-and-security-bis-imposing

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Export Control Revisions for Australia, United Kingdom, United States (AUKUS) Enhanced Trilateral Security Partnership

April 19, 2024: 89 Fed. Reg. 28594: The Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) to remove export license requirements, expand the availability of license exceptions, and reduce the scope of end-use and end-user-based license requirements for exports, reexports, and transfers (in-country) to or within Australia and the United Kingdom (UK) to enhance technological innovation among the three countries and support the goals of the AUKUS Trilateral Security Partnership.

With this rule, Australia and the UK will have nearly the same export licensing treatment under the EAR as Canada. The biggest changes to the EAR pursuant to this rule are the removal of list-based license requirements for exports, reexports, and transfers (in-country) to Australia and the UK including the removal of license requirements for national security column 1 (NS1), regional stability column 1 (RS1), and missile technology column 1 (MT1) reasons for control for the destinations of Australia and the UK. This is an important change as it removes licensing requirements for exports of ALL 600 Series ECCN items to Australia and the UK and many 9×515 satellite-related license requirements to Australia and the UK.

Other minor changes to the EAR pursuant to this rule include the applicability of License Exceptions under §§ 740.15, 740.16, and 740.17 (License Exceptions Aircraft, Vessels and Spacecraft (AVS), Additional Permissive Reexports (APR), and Encryption Commodities, Software, and Technology (ENC), respectively), for use to Australia, Canada, and the UK.

BIS also exempted Australia and the UK alongside Canada from unilateral reporting requirements for thermal imaging camera transactions.

Consistent with recent changes to the EAR concerning thermal imaging cameras, the interim final rule removes military end-use and end-user-based license requirements for exports, reexports, and transfers (in-country) of certain cameras, systems, or related components detailed under § 744.9(a)(1)(i) and (a)(1)(iii) of the EAR which previously only applied to Canada.  The exception now applies to Australia, Canada, and the UK.

BIS requires certain transactions involving Canada to be reported in Electronic Export Information (EEI) filings, and these changes now include Australia and the UK for clarity in this requirement. Effective May 1, 2023, No License Required License Code C33 is in effect for 600 Series and other controlled items exported to Australia and the UK.

https://www.federalregister.gov/documents/2024/04/19/2024-08446/export-control-revisions-for-australia-united-kingdom-united-states-aukus-enhanced-trilateral

See article posted on our website for more details.

https://fdassociates.net/the-department-of-state-published-a-proposed-rule-to-create-an-exemption-for-certain-exports-reexports-retransfers-or-temporary-imports-of-defense-articles-or-defense-services-or-certain-brokering/

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Export Control Measures Under the Export Administration Regulations (EAR) To Address Iranian Aggression Against Israel and Military Support for Russia

April 22, 2024: 89 Fed. Reg. 2024: The Bureau of Industry and Security (BIS) made changes to the Export Administration Regulations (EAR) to expand the scope of items that require a license for export and reexport to Iran; this rule also expands the scope of the Russia/Belarus/Temporarily occupied Crimea region of Ukraine Foreign Direct Product (FDP) rule and the Iran FDP rule. Certain foreign-made items located outside of the United States are subject to the EAR because they meet criteria specified under one of the FDP rules under the EAR. This final rule expands the product scope of two of the FDP rules to make additional items subject to the EAR and imposes a license requirement when they are reexported or exported from abroad to Iran, Russia, Belarus, or the Temporarily occupied Crimea region of Ukraine. Prior to this rule, BIS had not controlled all foreign transactions involving items covered by this rule, but in light of recent events and the need to fully leverage EAR controls to address U.S. national security and foreign policy interests, these additional controls are now warranted under the EAR.

https://www.federalregister.gov/documents/2024/04/22/2024-08622/export-control-measures-under-the-export-administration-regulations-ear-to-address-iranian and

https://www.federalregister.gov/documents/search?conditions%5Bpublication_date%5D%5Bgte%5D=03%2F30%2F2024&conditions%5Bterm%5D=EAR

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Department of Commerce Establishes New Humanitarian License Exception for Certain Medical Devices

April 25, 2024: 89 Fed Reg 33224: the U.S. Commerce Department’s Bureau of Industry and Security (BIS) published a final rule introducing the new License Exception MED, which enables delivery of humanitarian medical devices to the citizens of Russia, Belarus, and the temporarily occupied areas of Ukraine, consistent with the longstanding practice of authorizing transfers of life-saving medical devices to civilian populaces. At the same time, BIS is maintaining its sweeping restrictions on the export, reexport, or transfer (in-country) of items that could aid Russia’s brutal full-scale invasion of Ukraine.

Specifically, License Exception MED authorizes certain exports, reexports, and transfers (in country) of the following items that are designated as EAR99 to Russia, Belarus, the temporarily occupied Crimea region of Ukraine, and the covered regions of Ukraine: low-level “medical devices” and related low-level “parts,” “components,” “accessories,” and “attachments” that are exclusively for use in or with “medical devices”.

https://www.bis.gov/press-release/department-commerce-establishes-new-humanitarian-license-exception-certain-medical and

https://www.bis.doc.gov/index.php/policy-guidance/countryguidance/russia-belarus and

https://www.federalregister.gov/documents/2024/04/29/2024-09076/amendment-to-existing-controls-on-russia-and-belarus-under-the-export-administration-regulations-ear

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The Department of Commerce, Bureau of Industry and Security Amended The EAR Regarding Firearms And Related Items

April 30, 2024: 89 Fed. Reg. 34680: In this interim final rule (IFR), the Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) to enhance the control structure for firearms and related items. These changes will better protect U.S. national security and foreign policy interests, which include countering the diversion and misuse of firearms and related items and advancing human rights. This rule identifies semi-automatic firearms under new Export Control Classification Numbers (ECCNs); 0A506 and 0A507 adds additional license requirements for Crime Control and Detection (CC) items, thereby resulting in additional restrictions on the availability of license exceptions for most destinations; amends license review policies so that they are more explicit as to the nature of review that will accompany different types of transactions and license exception availability (including adding a new list of high-risk destinations); identifies 36 countries that will be subject to a policy of denial; updates and expands requirements for support documentation submitted with license applications; and better accounts for the import documentation requirements of other countries (such as an import certificate or other permit prior to importation) when firearms and related items are authorized under a BIS license exception. BIS is publishing this rule as an IFR to solicit comments from the public on additional changes to export controls on firearms and related items that would better protect U.S. national security and foreign policy interests. The IFT will become effective May 30, 2024.

Prior to this Interim Final Rule, ECCN 0A501 controlled rifles, pistols, and related “parts,” “components,” and certain “attachments,” and “accessories” on the CCL, while ECCN 0A502 controlled shotguns and related “parts,” “components,” and certain “attachments,” and “accessories.” Neither ECCN distinguished between non-automatic and semi-automatic firearms. BIS was unable to readily identify what share of firearms exports to a country were semi-automatic rifles versus non-automatic pistols because they were controlled under the same item paragraph of ECCN 0A501. Accordingly, BIS was unable to readily disaggregate and review licensing and export data for specific types of end-item firearms or specific “parts,” “components,” “attachments” and “accessories” of most concern. This data gap limited BIS’s ability to efficiently evaluate the export, reexport, transfer (in-country) and diversion of specific types of rifles, pistols, shotguns, and certain “parts,” “components,” “attachments,” and “accessories” that may pose risks to U.S. national security and foreign policy. However, such information is useful to assess the risk of diversion.

To better track the export, reexport, transfer (in-country) and diversion of different types of firearms and related items, this Interim Final Rule adds four new ECCNs to the CCL. ECCN 0A506 controls semi-automatic rifles, ECCN 0A507 controls semi-automatic pistols, ECCN 0A508 controls semi-automatic shotguns, and ECCN 0A509 controls certain “parts,” “components,” devices, “accessories,” and “attachments” for items controlled under ECCNs 0A506, 0A507, and 0A508. The creation of these four new ECCNs will enable BIS to better track and more readily identify exports of end-item semi-automatic firearms and shotguns and certain related “parts,” “components,” “accessories,” and “attachments” of concern when reviewing the Electronic Export Information (EEI) that exporters file in the Automated Export System (AES). Pursuant to § 758.1(g)(1) and (2), an EEI must specify the ECCN of the exported item.

https://www.federalregister.gov/documents/2024/04/30/2024-08813/revision-of-firearms-license-requirements and https://www.federalregister.gov/documents/search?conditions%5Bpublication_date%5D%5Bgte%5D=03%2F30%2F2024&conditions%5Bterm%5D=EAR

In a separate action, BIS has begun sending out letters advising exporters that their existing licenses for non-government end-users in 36 countries are revoked as of July 1, 2024.

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Department of Commerce and Department of Justice

The Departments Of Justice And Commerce Launch The Disruptive Technology Protection Network With Japan And The Republic Of Korea

April 26, 2024: the U.S. Departments of Justice and Commerce launched the Disruptive Technology Protection Network with Japan and the Republic of Korea (ROK), hosting the first high-level trilateral summit in Washington, D.C.  The creation of this network follows an August 2023 Camp David summit between the leaders of the three countries, during which they committed to expanding collaboration on technology protection measures and build connections between representatives of the U.S. Disruptive Technology Strike Force and Japan and ROK counterparts.  The Disruptive Technology Protection Network expands information-sharing and the exchange of best practices across the three countries’ enforcement agencies.

https://www.bis.gov/press-release/departments-justice-and-commerce-launch-disruptive-technology-protection-network and

https://www.whitehouse.gov/briefing-room/statements-releases/2023/08/18/fact-sheet-the-trilateral-leaders-summit-at-camp-david/ and

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

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U.S. Census Bureau

April 18, 2024: Tips on How to Resolve AES Response Message

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

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

Response Code:  170

Narrative: Air Waybill Format: NNN-NNNNNNNN

Severity: Fatal

Reason: The Transportation Reference Number reported for this Air shipment was not in the correct format.

Resolution: A number identifying the carrier’s master air waybill may be declared on an air shipment. When reported, a master air waybill number must be reported in the following format: ‘NNN-NNNNNNNN’ (where ‘N’ = a numeric value).

Verify the Transportation Reference Number, correct the shipment and resubmit.

Response Code:  336

Narrative: Ultimate Consignee State Cannot be Reported

Severity: Fatal

Reason: The Country of Destination reported does not allow a State Code.

Resolution: Report a State Code only if the Country of Destination is the United States or Mexico.

Verify the Ultimate Consignee Country Code and State Code, correct the shipment and resubmit.

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NEW BIS LICENSE TYPES C69 License Exception (MED) – for exports authorized under License Exception Medical Devices (MED)

April 30, 2024: On Monday, April 29, 2024, the Department of Commerce, Bureau of Industry and Security (BIS) published a final rule, Amendment to Existing Controls on Russia and Belarus Under the Export Administration Regulations (EAR) Adding New License Exception Medical Devices (MED); Corrections with an effective date of April 29, 2024.  This final rule established a new License Exception Medical Devices (MED) in § 740.23 of the Export Administrations Regulations (EAR), 15 C.F.R. parts 730 – 774. This license exception as specified under the paragraph (a) (Scope) authorizes the export, reexport, and transfer (in-country) of “medical devices” designated as EAR99 to or within Russia, Belarus, the temporarily occupied Crimea region of Ukraine, or the covered regions of Ukraine (as specified in § 746.6(a)(2) of the EAR).  Paragraph (a) directs exporters, reexporters, and transferors to see Supplement no. 3 to part 774 – Statements of Understanding under paragraph (a) (Statement of Understanding ‑ medical equipment) for guidance on classifying medical equipment and the definition of “medical device” in § 772.1 of the EAR.

Paragraph (a) also specifies that License Exception MED authorizes the export, reexport, or transfer (in country) to or within Russia, Belarus, the temporarily occupied Crimea region of Ukraine, or the covered regions of Ukraine of “parts,” “components,” “accessories,” and “attachments” designated as EAR99 that are exclusively for use in or with “medical devices” designated as EAR99.  For “parts,” “components,” “accessories,” and “attachments” authorized under License Exception MED, such replacement “parts,” “components,” “accessories,” and “attachments” may only be exported, reexported, or transferred (in-country) if they also meet the additional requirements under paragraphs (a)(1) and (2) of § 740.23.

Exports, reexports, and transfers (in-country) authorized under License Exception MED must not be restricted under § 740.23(b) (Restrictions), which restricts “proscribed persons” and any item destined to a “production” “facility” or when you have “knowledge” that the item is intended to develop or produce items.  Exports, reexports, and transfers (in-country) authorized under License Exception MED must also comply with the verification requirements specified in paragraph (c) (Verification) and the recordkeeping requirements specified in paragraph (d) Recordkeeping and review or inspection of records.

As a result of these actions, the following changes will be made to the AES in order for exporters and authorized agents to successfully report electronic export information in the AES.

New License Code C69 License Exception (MED)

An update has been made to AES to create License Type Code C69 MED.

An update has been made to AES to create new License Code C69 “License Exception Medical Devices” (MED), which authorizes certain exports, reexports of any item “medical devices” designated as EAR99 and “parts,” “components,” “accessories,” and “attachments” designated as EAR99 that are exclusively for use in or with “medical devices” designated as EAR99.

The full terms of License Exception MED are described in § 740.23.

AES filers must adhere to the following new reporting when using C69 (MED) to prevent the return of fatal errors from AES:

• Report License Code: C69 MED.
• Allowable ECCNs: No ECCNs are allowed. Only EAR99 is allowable.
• Allowable countries: Belarus, Russia, and Ukraine. (Note that although all of Ukraine is specified as an allowable country in AES, that License Exception MED is only needed to authorize exports exports, reexports, and transfers (in-country) to or within temporarily occupied Crimea region of Ukraine, or the covered regions of Ukraine (as specified in § 746.6(a)(2) of the EAR)).
• Allowable Export Information Codes: All except UG
• Allowable Modes of Transportation: All except ‘70’ (Fixed Transport)

https://www.federalregister.gov/documents/2024/04/29/2024-09076/amendment-to-existing-controls-on-russia-and-belarus-under-the-export-administration-regulations-ear?utm_campaign=&utm_content=&utm_medium=email&utm_source=govdelivery and https://www.cbp.gov/document/guidance/aestir-appendix-f-license-and-license-exemption-type-codes?utm_campaign=&utm_content=&utm_medium=email&utm_source=govdelivery

 

LATEST SANCTIONS FINES & PENALTIES

This section of our newsletter provides information on the latest sanctions, fines and penalties for export violations or matters of non-compliance with the ITAR or EAR issued by the US government enforcement agencies. It is provided as a service to 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

April 4, 2024: Two Russian nationals pleaded guilty to conspiracy to violate the Export Control Reform Act (ECRA) in connection with a scheme to acquire and unlawfully export controlled aviation technology to Russian end users. One of the defendants, Oleg Sergeyevhich Patsulya, also pleaded guilty to conspiracy to commit international money laundering.

According to court documents, Patsulya and Vasilii Sergeyevich Besedin, both of whom reside in Miami-Dade County, Florida, conspired with each other and several others to evade U.S. export laws and regulations to send aircraft technology from the United States to Russia. According to court documents, the unlawful scheme began in or about May 2022, in the wake of Russia’s most recent invasion of Ukraine and enhanced U.S. sanctions on Russia.

Both Besedin and Patsulya pleaded guilty to conspiracy to export items from the United States without a license in violation of the Export Control Reform Act, which carries a maximum penalty of 20 years in prison. Patsulya additionally pleaded guilty to one count of conspiracy to commit international money laundering, which carries a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Sentencing is scheduled for June 17.

https://www.justice.gov/opa/pr/russian-nationals-admit-illegally-sending-controlled-aviation-technology-russia

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April 5, 2024: 89 Fed. Reg. 23967: On April 21, 2022, an order denying Aviastar export privileges was signed 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 temporary denial order was subsequently renewed on October 17, 2022, April 14, 2023, and October 6, 2023^.

On March 11, 2024, BIS, through OEE, submitted a written request for a fourth renewal of the TDO. The written request was made more than 20 days before the TDO’s scheduled expiration and, given the temporary suspension of international mail service to Russia, OEE has attempted to deliver a copy of the renewal request to Aviastar by alternative means. No opposition to the renewal of the TDO has been received.

The Office of Export Enforcement (“OEE”) renewed the temporary denial order (“TDO”) issued in this matter on April 14, 2023. It was found that the renewal of this order is necessary in the public interest to prevent an imminent violation of the Regulations and that renewal for an extended period is appropriate because Aviastar—TU’s (“Aviastar”) has engaged in a pattern of repeated, ongoing and/or continuous apparent violations of the EAR.

https://www.federalregister.gov/documents/2024/04/05/2024-07303/order-renewing-temporary-denial-of-export-privileges

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April 15, 2024: Ross Roggio (Roggio) was sentenced to 70 years in prison for torturing an Estonian citizen in 2015 in the Kurdistan region of Iraq and for the illegal export of weapons parts and related services.

According to court documents and evidence presented at trial, Roggio, 55, of Stroudsburg, arranged for Kurdish soldiers to abduct and detain the victim at a Kurdish military compound, where Roggio suffocated the victim with a belt, threatened to cut off one of his fingers, and directed Kurdish soldiers to repeatedly beat, choke, tase, and otherwise physically and mentally abuse the victim over a 39-day period. The victim was an employee at a weapons factory that Roggio was developing in the Kurdistan region of Iraq that was intended to manufacture automatic rifles and pistols.

https://www.justice.gov/opa/pr/pennsylvania-man-sentenced-prison-torture-and-illegally-exporting-weapons-parts-and-related

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April 16, 2024: An indictment was unsealed charging Syria national Mohamad Deiry and Lebanese national Samer Rayya, both principals of an Iraq-based arms company, Black Shield Ltd., with conspiring to export munitions from the United States to Sudan and Iraq without the necessary licenses and approvals, in violation of the Arms Export Control Act. Additionally, Deiry and Rayya were charged with conspiring to commit money laundering in furtherance of their illicit procurement activities.

Deiry and Rayya are charged with conspiracy to unlawfully export defense articles from the United States, which carries a maximum statutory penalty of five years in prison; and conspiracy to engage in international money laundering, which carries a maximum statutory penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

https://www.justice.gov/opa/pr/international-arms-dealers-charged-conspiring-unlawfully-export-weapons-and-ammunition

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April 19, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with SCG Plastics Co., Ltd. (“SCG Plastics”), part of a multinational enterprise headquartered in Bangkok, Thailand.  SCG Plastics has agreed to pay $20,000,000 to settle its potential civil liability for 467 apparent violations of OFAC sanctions on Iran.  From 2017 to 2018, SCG Plastics caused U.S. financial institutions to process $291 million in wire transfers for sales of Iranian origin polyethylene resin manufactured by a joint venture in Iran. The $20,000,000 settlement amount reflects OFAC’s determination that SCG Plastics’ apparent violations were egregious and, with the exception of certain transactions, were not voluntarily self-disclosed.

 

https://ofac.treasury.gov/recent-actions/20240419_33 and

https://ofac.treasury.gov/media/932836/download?inline and

https://ofac.treasury.gov/media/932841/download?inline

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April 25, 2024: The Justice Department announced the unsealing of an indictment charging 10 defendants with conspiring to violate the International Economic Emergency Powers Act (IEEPA) for their roles in a scheme to evade U.S. sanctions imposed on Petróleos de Venezuela, S.A. (PDVSA), the Venezuelan state-owned oil company, in January 2019. One of the defendants, George Clemente Semerene Quintero, 60, was arrested on April 19, 2024, upon arrival at the Miami International Airport.

As alleged in the indictment, between January 2019 and December 2021, after learning of the sanctions imposed on PDVSA, the defendants devised a scheme to illegally procure aircraft parts, including Honeywell Turbofan Engines, from the United States to service PDVSA’s aircraft fleet in Venezuela, in violation of U.S. sanctions and export controls. To carry out this scheme, the defendants concealed from U.S. companies that the goods were destined for Venezuela and PDVSA by exporting them to third parties in other countries, including Novax Group SA (Novax), a Costa Rican company, and Aerofalcon SL (Aerofalco), a Spanish company.

According to court documents, the defendants include:

• Four individuals associated with PDVSA: Gilberto Ramon Araujo Prieto, 54, a PDVSA air transport manager and colonel in the Venezuelan military; Guillermo Ysrael Marval Rivero, 62, and Fernando Jose Blequett Landaeta, 52, both PDVSA air transport managers and logistics analysts responsible for procurement; and Semerene, PDVSA’s head of logistics, procurement and warehousing.
• Four individuals associated with Novax: Luis Alberto Duque Carvajal, 63, of San Jose, Costa Rica, the owner of Novax; Melvin Aleman Espinoza, 39, Novax’s director of operations; Mikhail Largin, 60, Novax’s director of special projects; and Pedro Elias Sucre Salazar, 58, a Novax employee located in Venezuela.
• Two individuals associated with Aerofalcon: Juan Carlos Gonzalez Perez, 60, the owner of Aerofalcon; and Juan David Guerra Viera, 54, a director for Aerofalcon.

The defendants are charged with conspiring to violate IEEPA, and if convicted, face a maximum penalty of 20 years in prison. Defendants Duque, Aleman, Sucre, Gonzalez, and Guerra Viera are additionally charged with submitting false or misleading export information and smuggling of goods, which respectively carry maximum penalties of five and 10 years in prison.

https://www.justice.gov/usao-sdfl/pr/ten-charged-and-one-arrested-connection-sanctions-evasion-scheme and

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

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April 25, 2024: An indictment was unsealed charging two Chinese nationals, Han Li, also known as Anson Li, 44, and Lin Chen, 64, with crimes related to a conspiracy to illegally export U.S. technology, including a machine manufactured by a California-based company that is used to process silicon wafer microchips, to prohibited end users in China, in violation of the International Emergency Economic Powers Act (IEEPA) and Export Administration Regulations (EAR). Chen was arrested in Chicago yesterday.

Li and Chen are each charged with the following offenses, and if convicted, face maximum penalties as indicated: Conspiracy to violate IEEPA, up to 20 years in prison and a $1 million fine; false electronic export information activities, up to five years in prison and a $250,000 fine; smuggling, up to 10 years in prison and a $250,000 fine; and IEEPA violations, up to 20 years in prison and a $1 million fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

https://www.justice.gov/opa/pr/chinese-national-arrested-united-states-alleged-scheme-illegally-export-semiconductor

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April 30, 2024: Nikolay Grigorev, 36, of Brooklyn, pleaded guilty to conspiring to defraud the United States for his role in an illicit export control scheme to ship electronic components from the United States to companies affiliated with the Russian military. Co-defendants Nikita Arkhipov and Artem Oloviannikov remain at large.

As a result of the guilty plea, Grigorev faces a maximum penalty of five years in prison. A sentencing hearing has not yet been scheduled. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

https://www.justice.gov/opa/pr/new-york-man-pleads-guilty-conspiracy-unlawfully-export-dual-use-electronics-used-russian

Sanctions

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

April 11, 2024: 89 Fed Reg. 25503: The Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) by adding 11 entries to the Entity List, under the destinations of the Peoples Republic of China (China) (6), the Russian Federation (Russia) (3), and the United Arab Emirates (UAE) (2). These entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. This rule also modifies one existing entity on the Entity List under the destination of China.

China

• Beijing Anwise Technology Co., Ltd.;
• Jiangxi Xintuo Enterprise Co., Ltd.;
• Linkzol Technology Co., Ltd.;
• Shenzhen Jiasibo Technology Co., Ltd.;

• Sitonholy Co., Ltd.; and

• Xi’an Like Innovative Information Technology Co., Ltd.

Russia

• Aerosila JSC SPE;

• Delta-Aero LLC; and

• JSC ODK-Star.

United Arab Emirates

• Khalaj Trading LLC; and
• Mahdi Khalaj Amirhosseini.

https://www.federalregister.gov/documents/2024/04/11/2024-07760/addition-of-entities-to-and-revision-of-entry-on-the-entity-list

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

April 4, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) took additional action against Iranian military revenue generation, targeting Oceanlink Maritime DMCC for facilitating the shipment of Iranian commodities on behalf of Iran’s Armed Forces General Staff (AFGS) and Ministry of Defense and Armed Forces Logistics (MODAFL). OFAC is also identified 13 vessels managed by Oceanlink Maritime DMCC as blocked property. The Oceanlink Maritime DMCC-managed vessel HECATE recently loaded Iranian commodities valued at over $100 million dollars via a ship-to-ship (STS) transfer from another sanctioned tanker, the DOVER, on behalf of Iran’s Sepehr Energy Jahan Nama Pars (Sepehr Energy), which OFAC sanctioned in November 2023 for its role selling Iranian commodities for the AFGS and MODAFL.

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

• Oceanlink Maritime DMCC of The United Arab Emirates.

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

• Anthea (D6A3314) Crude Oil Tanker Comoros flag; Vessel Registration Identification IMO 9281683; MMSI 620999315 (vessel);
• Baxter (V3TF5) Oil Products Tanker Belize flag; Vessel Registration Identification IMO 9282522; MMSI 312513000 (vessel);
• Boreas (D6A3315) Crude Oil Tanker Comoros flag; Vessel Registration Identification IMO 9248497; MMSI 620999316 (vessel);
• Calypso Gas (V2YC2) LPG Tanker Antigua and Barbuda flag; Vessel Registration Identification IMO 9131101; MMSI 304563000 (vessel);
• Cape Gas (D6A2739) LPG Tanker Comoros flag; Vessel Registration Identification IMO 9002491; MMSI 620739000 (vessel);
• Demeter (HPGV) Oil Products Tanker Panama flag; Vessel Registration Identification IMO 9258674; MMSI 370921000 (vessel);
• Elisa (V3RZ8) Crude Oil Tanker Belize flag; Vessel Registration Identification IMO 9256468; MMSI 312038000 (vessel);
• Glaucus (D6A3421) Crude Oil Tanker Comoros flag; Vessel Registration Identification IMO 9337389; MMSI 620999422 (vessel);
• Hebe (D6A3378) Crude Oil Tanker Comoros flag; Vessel Registration Identification IMO 9259185; MMSI 620999378 (vessel);
• Hecate (D6A3379) Crude Oil Tanker Comoros flag; Vessel Registration Identification IMO 9233753; MMSI 620999379 (vessel);
• Meraki (V2YB7) Crude Oil Tanker Antigua and Barbuda flag; Vessel Registration Identification IMO 9194139; MMSI 304552000 (vessel);
• Oceanus Gas (D6A3372) LPG Tanker Comoros flag; Vessel Registration Identification IMO 9397080; MMSI 620999373 (vessel); and
• Ourea (E5U5002) LPG Tanker Cook Islands flag; Vessel Registration Identification IMO 9350422; MMSI 518999021 (vessel).

https://ofac.treasury.gov/recent-actions/20240404 and https://ofac.treasury.gov/recent-actions?page=0

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April 12, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) published a Determination for Prohibitions Related to Imports of Aluminum, Copper, and Nickel of Russian Federation Origin, and a Determination for Prohibitions on Certain Services for the Acquisition of Aluminum, Copper, or Nickel of Russian Federation Origin.

OFAC also issued Russia-related General License 13I, “Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024”.

General License 13I: 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.

OFAC also issued five new, Russia-related Frequently Asked Questions (FAQs 1168 – 1172)

 

Question 1168: What action did Treasury take on April 12, 2024 with regards to aluminum, copper, and nickel of Russian Federation origin?

Answer: On December 6, 2023, and February 24, 2024, the G7 Leaders issued statements signaling their intent to reduce Russia’s revenues from metals.  On April 12, 2024, in coordination with the United Kingdom, the United States issued two new prohibitions that will further disrupt the revenue that Russia earns from its export of aluminum, copper, and nickel of Russian Federation origin, including using U.S. global metal exchanges.

 

Question 1169: What is prohibited by the determination “Prohibitions on Certain Services for the Acquisition of Aluminum, Copper, or Nickel of Russian Federation Origin” pursuant to Executive Order (E.O.) 14071 (the “Metals Services Determination”)?

Answer: The Metals Services Determination prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of the following categories of services to any person located in the Russian Federation:  warranting services for aluminum, copper, or nickel of Russian Federation origin on a global metal exchange; and services to acquire aluminum, copper, or nickel of Russian Federation origin as part of the physical settlement of a derivative contract (collectively, “Covered Metals Acquisition Services”).  This determination does not apply to services related to aluminum, copper, or nickel of Russian Federation origin that was produced prior to April 13, 2024.

 

Question 1170: For the purposes of the determination “Prohibitions Related to Imports of Aluminum, Copper, and Nickel of Russian Federation Origin” pursuant to Executive Order (E.O.) 14068, as amended by E.O. 14114, (the “Metals Import Determination”) and the determination “Prohibitions on Certain Services for the Acquisition of Aluminum, Copper, or Nickel of Russian Federation Origin” pursuant to Executive Order (E.O.) 14071 (the “Metals Services Determination”), what is meant by the terms “aluminum,” “nickel,” and “copper”?

Answer: For the purposes of the Metals Import Determination and the Metals Services Determination, OFAC anticipates publishing regulations defining “aluminum,” “nickel,” and “copper” to include articles or products defined at the following Harmonized Tariff Schedule of the United States (HTSUS) chapter headings:

• “Aluminum”: defined at HTSUS Chapter 76.
• “Nickel”: defined at HTSUS Chapter 75.
• “Copper”: defined at HTSUS Chapter 74.

 

Question 1171: Do the determinations “Prohibitions Related to Imports of Aluminum, Copper, and Nickel of Russian Federation Origin” pursuant to Executive Order (E.O.) 14068, as amended by E.O. 14114, (the “Metals Import Determination”) and the determination “Prohibitions on Certain Services for the Acquisition of Aluminum, Copper, or Nickel of Russian Federation Origin” pursuant to Executive Order (E.O.) 14071 (the “Metals Services Determination”) apply to aluminum, copper, or nickel that has been incorporated or substantially transformed into other products outside of the Russian Federation?

Answer: The term “Russian Federation origin” excludes “any Russian Federation origin good that has been incorporated or substantially transformed into a foreign-made product.”

 

Question 1172: Does the determination “Prohibitions on Certain Services for the Acquisition of Aluminum, Copper, or Nickel of Russian Federation Origin” pursuant to Executive Order (E.O.) 14071 (the “Metals Services Determination”) impose new prohibitions on banks acting as intermediaries for payments related to Russian metals?

Answer: No.  The processing, clearing, or sending of payments related to Russian metals by a U.S. bank on behalf of non-U.S. persons is not prohibited by the Metals Services Determination where the bank:  (1) is operating solely as an intermediary; and (2) does not have any direct relationship with the person providing a service covered by the Metals Services Determination (i.e., the person is a non-account party) as it relates to the relevant transaction.  Thus, the Metals Services Determination does not impose any new prohibitions or requirements relating to the processing, clearing, or sending of payments by intermediary banks.

https://ofac.treasury.gov/recent-actions/20240412_33 and

https://home.treasury.gov/news/press-releases/jy2249 and

https://ofac.treasury.gov/media/932796/download?inline and

https://ofac.treasury.gov/media/932801/download?inline and

https://ofac.treasury.gov/media/932806/download?inline and

https://ofac.treasury.gov/faqs/added/2024-04-12 and

https://ofac.treasury.gov/media/932801/download?inline

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April 12, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action against Hamas, targeting Gaza- and Lebanon-based leaders of the terrorist group’s offensive cyber and unmanned aerial vehicle (UAV) operations. Concurrent with this action, the European Union is imposing sanctions targeting Hamas.

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

• Abu Shanab, William of Lebanon;
• Al-Kahlut, Hudhayfa Samir ‘Abdallah of Palestine;
• ‘Azzam, Khalil Muhammad of Palestine; and
• Farhat, Bara’a Hasan of Palestine.

https://home.treasury.gov/news/press-releases/jy2248 and https://ofac.treasury.gov/recent-actions/20240412

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April 15, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Venezuela-related General License 50 “Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After August 13, 2024.”

General License 50: On or after August 13, 2024, all transactions related to, the provision of financing for, and other dealings in the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond that would be prohibited by subsection l(a)(iii) of Executive Order (E.O.) 13835 of May 21, 2018, as amended by E.O. 13857 of January 25, 2019, and incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized.

https://ofac.treasury.gov/recent-actions/20240415 and https://ofac.treasury.gov/media/932811/download?inline

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April 15, 2024: the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 12 entities and 10 individuals pursuant to Executive Order (E.O.) 14038. This action builds on U.S. sanctions imposed in response to Belarus’s fraudulent August 2020 election, as well as President Alyaksandr Lukashenka’s (Lukashenka) support for Russia’s illegal full-scale invasion of Ukraine. This action sustains U.S. financial pressure on the Lukashenka regime for its continuing support for Russia’s war against Ukraine and the financial benefit it derives from this activity.

The individuals and entities OFAC targeted include six revenue-generating state-owned enterprises (SOEs) and one entity and five individuals involved in facilitating transactions for a U.S.-designated major Belarusian defense sector enterprise. OFAC is additionally targeting five entities and five individuals involved in a global arms network doing business with a U.S.-designated Belarusian defense firm.

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

• Akisianchuk, Aliaksandra of Belarus;
• Ali, Alhaitham Al of Slovakia;
• Braim, Dmitry of Belarus;
• Charheika, Siarhei of Belarus;
• Deiry, Mohamad Majd of Syria;
• Mikhaltsou, Dzmitry of Belarus;
• Protopovich, Tatyana of Belarus;
• Rayya, Samer of Lebanon;
• Yagmur, Nora of Sweden; and
• Yurchik, Oleg of Belarus.

 

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

• Black Shield Company For General Trading LLC of Iraq;
• Centuronic Ltd of Cyprus;
• Joint Stock Company Communication Equipment of Belarus;
• JSC Agat-System of Belarus;
• JSC Niievm of Belarus;
• LLC Innotech Solutions of Belarus;
• OJSC Agat-Control System-Managing Company of Geoinformation of Belarus;
• Open Joint Stock Company Stankgomel of Belarus;
• Phoenix Lines S.R.O of Slovakia ;
• Rayya Danismanlik Hizmetleri Limited Sirketi of Belarus;
• Group Airlines LTD of Cyprus; and
• Shenzen 5G High-Tech Innovation Co., of China.

https://ofac.treasury.gov/recent-actions/20240415 and https://home.treasury.gov/news/press-releases/jy2251

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April 16, 2024: 89 Fed. Reg. 27386: The Office of Foreign Assets Control (OFAC) issued  a final rule to remove the Zimbabwe Sanctions Regulations, 31 CFR part 541, from the Code of Federal Regulations.  OFAC took this action because the national emergency on which part 541 was based was terminated by the President on March 4, 2024.

 

https://ofac.treasury.gov/media/932816/download?inline and

https://ofac.treasury.gov/recent-actions/20240416

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April 17, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued  Venezuela-related General License 44A, “Authorizing the Wind Down of Transactions Related to Oil or Gas Sector Operations in Venezuela.”

General License 44A: All transactions prohibited by the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), including transactions involving 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 wind down of any transaction related to oil or gas sector operations in Venezuela previously authorized by Venezuela General License 44 are authorized through 12:01 a.m. eastern daylight time May 31, 2024.

https://ofac.treasury.gov/media/932826/download?inline and https://ofac.treasury.gov/recent-actions/20240417

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April 18, 2024: In response to Iran’s unprecedented attack on Israel on April 13, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) targeted 16 individuals and two entities enabling Iran’s UAV production, including engine types that power Iran’s Shahed variant UAVs, which were used in the April 13 attack. These actors work on behalf of Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), its UAV production arm, Kimia Part Sivan Company (KIPAS), and other Iranian manufacturers of UAVs and UAV engines. OFAC also designated five companies in multiple jurisdictions providing component materials for steel production to Iran’s Khuzestan Steel Company (KSC), one of Iran’s largest steel producers, or purchasing KSC’s finished steel products. Iran’s metals sector generates the equivalent of several billion dollars in revenue annually, with the majority coming from steel exports.

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

• Abutalebi, Ali Asghar of Iran;
• Abutalebi, Mohammad Sadegh of Iran;
• Al-Taf, Ali Asghar of Iran;
• Arambuenezhad, Hasan of Iran;
• Azizkhani Esma’il, Sepahan of Iran;
• Dehghan, Majid of Iran;
• Ebrahimi Forushani, Hamid Hajji of Iran;
• Fatehi, Mohammad Sadegh of Iran;
• Moshkani, Abolfazl Ramazanzadeh of Iran;
• Naghneh, Mehdi Ghaffari of Iran;
• Nahar Dani, Reza of Iran;
• Najafi Ali Habibi of Iran;
• Ramsheh, Ali Reza Nurian of Iran;
• Sartaji, Abbas of Iran;
• Turanlu, Mohsen Sayyadi of Iran; and
• Zavarki, Hadi Jamshidi of Iran.

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

• Aseman Pishraneh Co. Ltd of Iran;
• Bahman Diesel Co. of Iran;
• Fateh Aseman Sharif Company of Iran;
• Good Run Limited of Iran;
• HSF DIS Ticaret Limited Sirketi of Turkey;
• Iean Chassis Manufacturing Co of Iran;
• Iran Docharkh Co. of Iran;
• Kara Industrial Trading GMBH of Germany;
• Magellanic Phoenix Marine and Trading of China; and
• PSI DMCC of United Arab Emirates.

https://ofac.treasury.gov/recent-actions/20240418 and https://ofac.treasury.gov/recent-actions?page=0

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April 19, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on two entities for their roles in establishing fundraising campaigns on behalf of Yinon Levi (Levi) and David Chai Chasdai (Chasdai), two violent extremists who were sanctioned on February 1, 2024 in connection with violence in the West Bank. The fundraising campaigns established by Mount Hebron Fund for Levi and by Shlom Asiraich for Chasdai generated the equivalent of $140,000 and $31,000, respectively.

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

• Gopstein, Ben-Zion of Israel.

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

• Granpect Co. Ltd. of China;
• Mount Hebron Fund of Israel;
• Shlom Asiraich of Israel;
• Tianjin Creative Source International Trade Co Ltd of China; and
• Xi’an Longde Technology Development Company Limited of China

https://home.treasury.gov/news/press-releases/jy2281 and https://ofac.treasury.gov/recent-actions/20240419

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April 19, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 94, “Authorizing Transactions Involving OWH SE i.L. (Formerly Known as VTB Bank Europe SE).”

General License 94: All transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR) or the Ukraine-/Russia-Related Sanctions Regulations, 31 CFR part 589 (URSR), involving OWH SE i.L. (formerly known as VTB Bank Europe SE), or any entity in which OWH SE i.L. owns, directly or indirectly, a 50 percent or greater interest (“OWH SE i.L. Entities”), are authorized.

https://ofac.treasury.gov/media/932831/download?inline and https://ofac.treasury.gov/recent-actions/20240419

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April 23, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two companies and four individuals involved in malicious cyber activity on behalf of the Iranian Islamic Revolutionary Guard Corps Cyber Electronic Command (IRGC-CEC). These actors targeted more than a dozen U.S. companies and government entities through cyber operations, including spear phishing and malware attacks. In conjunction with this action, the U.S. Department of Justice and the Federal Bureau of Investigation unsealed an indictment against the four individuals for their roles in cyber activity targeting U.S. entities.

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

• Haruni, Hosein Mohammad of Iran;
• Nasab, Alireza Shafie of Iran;
• Rahman, Reza Kazemifar of Iran; and
• Salmani, Komeil Baradaran of Iran.

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

• Dadeh Afzar Arman of Iran; and
• Mehrsam Andisheh Saz Nik of Iran.

https://www.justice.gov/opa/pr/justice-department-charges-four-iranian-nationals-multi-year-cyber-campaign-targeting-us and https://home.treasury.gov/news/press-releases/jy2292

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April 23, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two leaders of al-Qa’ida-aligned terrorist group Jama’at Nusrat al-Islam wal-Muslimin (JNIM) for hostage-taking of U.S. persons in West Africa. OFAC designated these individuals pursuant to Executive Order (E.O.) 14078, “Bolstering Efforts To Bring Hostages and Wrongfully Detained United States Nationals Home,” which targets those involved in, hostage-taking of a U.S. national or the wrongful detention of a U.S. national abroad. The Department of State concurrently designated five JNIM leaders pursuant to E.O. 14078, and designated two of these, as well as two additional leaders of JNIM, pursuant to E.O. 13224, as amended.

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

• Al-Libi, Talha, of Mauritania;
• Belhireche, Messaoud of Mali;
• Dicko, Jafar of Burkina Faso;
• Hammada, Hussein Ould of Mali; and
• Khouier, Hamama Ould of Mali.

https://home.treasury.gov/news/press-releases/jy2293 and https://ofac.treasury.gov/recent-actions/20240423

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April 25, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned over one dozen entities, individuals, and vessels that have played a central role in facilitating and financing the clandestine sale of Iranian unmanned aerial vehicles (UAVs) for Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL), which itself is involved in supporting Iran’s Islamic Revolutionary Guard Corps (IRGC) and Russia’s war in Ukraine. Sahara Thunder is the main front company that oversees MODAFL’s commercial activities in support of these efforts. Sahara Thunder also plays a key role in Iran’s design, development, manufacture, and sale of thousands of UAVs, many of them ultimately transferred to Russia for use in its war of aggression against Ukraine. OFAC is also sanctioning two companies and a vessel involved in the shipment of Iranian commodities for Sepehr Energy Jahan Nama Pars, which similarly plays a leading role in the commercial activities of Iran’s Armed Forces General Staff (AFGS). Concurrent with this action, the United Kingdom and Canada are imposing sanctions targeting several entities and individuals involved in Iran’s UAV procurement and other military-related activities.

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

• Abdi Asjerd, Abbas of Iran;
• Abdi Asjerd, Zahra of Iran;
• Abdulahi Fard, Hojat of Iran;
• Bakhshayesh, Hossein of Iran;
• Eidi Ashjerdi, Hamid of Iran;
• Mirzai Kondori, Kazem of Iran;
• Moradipour, Mohammad Ali of Iran; and
• Vahabzadeh Moghadam, Seyed of Iran.

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

• Arsang Safe Trading Co. of Iran;
• Asia Marine Crown Agency of Iran;
• Baran Sazan Caspian Anzali Free Zone Company of Iran;
• Bonyan Danesh Shargh Private Company of Iran;
• Coral Trading EST of Iran;
• Etemad Tejarat Misagh of Iran;
• Onden General Trading FZE of Iran;
• Pishro Sanat Aseman Sharif Private Company of Iran;
• Safe Seas Ship Management FZE of the United Arab Emirates;
• Sahara Thunder of Iran;
• Sanaye Motorsazi Alvand Private Company of Iran;
• Saone Shipping Corporation of Panama;
• Sea Art Ship Management OPC Private Limited of India;
• Trans Gulf Agency Llc of The United Arab Emirates; and
• Zen Shipping & Port India Private Limited of India.

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

• Chem (E5U4368) Chemical/Products Tanker Cook Islands flag; Vessel Registration Identification IMO 9240914; MMSI 518998388 (vessel);
• Conrad (E5U4542) Oil Products Tanker Cook Islands flag; Vessel Registration Identification IMO 9546722; MMSI 518998562 (vessel);
• Dancy Dynamic (T8A3476) Oil Products Tanker Palau flag; Vessel Registration Identification IMO 9158161; MMSI 511100350 (vessel);
• K M A (E5U4542) Chemical/Products Tanker Cook Islands flag; Vessel Registration Identification IMO 9234616; MMSI 518998425 (vessel);
• La Pearl (5IM808) Crude Oil Tanker Tanzania flag; Vessel Registration Identification IMO 9174660; MMSI 677070800 (vessel).

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

• EP-PUS; Aircraft Manufacture Date 1992; Aircraft Mode S Transponder Code 7342B3; Aircraft Model Ilyushin IL-76TD; Aircraft Manufacturer’s Serial Number (MSN) 1023409321

https://ofac.treasury.gov/recent-actions/20240425 and https://ofac.treasury.gov/recent-actions?page=0

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April 29, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 8I “Authorizing Transactions Related to Energy.

General License 8I: All transactions prohibited by Executive Order (E.O.) 14024 involving one or more of the following entities that are related to energy are authorized, through 12:01 a.m. eastern daylight time, November 1, 2024:

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

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

(3) Sovcombank Open Joint Stock Company;

(4) Public Joint Stock Company Sberbank of Russia;

(5) VTB Bank Public Joint Stock Company;

(6) Joint Stock Company Alfa-Bank;

(7) Public Joint Stock Company Rosbank;

(8) Bank Zenit Public Joint Stock Company;

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

(10) 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

(11) the Central Bank of the Russian Federation.

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

https://ofac.treasury.gov/media/932846/download?inline and https://ofac.treasury.gov/recent-actions/20240429