Updates

LATEST EXPORT CONTROLS AND COMPLIANCE UPDATE

This newsletter is a listing of the latest changes in export control regulations through November 30, 2022.  The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

 

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

 

REGULATORY UPDATES

 

The President

 

President Biden Provided Advance Notification To The U.S. Congress Of His Intent To Terminate The Designation Of Burkina Faso As A Beneficiary Sub-Saharan African Country

 

November 1, 2022: In accordance with section 506A(a)(3)(B) of the Trade Act of 1974, as amended (19 U.S.C. 2466a(a)(3)(B)), President Joseph Biden provided advance notification to the U.S. Congress of his intent to terminate the designation of Burkina Faso as a beneficiary sub-Saharan African country under the African Growth and Opportunity Act (AGOA).

 

President Biden took this step because he determined that the Government of Burkina Faso has not established, or is not making continual progress toward establishing, the protection of the rule of law and of political pluralism, as stated in the eligibility requirements of section 104 of the AGOA.

 

https://www.whitehouse.gov/briefing-room/presidential-actions/2022/11/02/letter-to-the-speaker-of-the-house-of-representatives-and-the-president-of-the-senate-on-the-presidents-intent-to-terminate-the-designation-of-burkina-faso-as-a-beneficiary-sub-saharan-africa/

 

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President Biden Continues National Emergency In Sudan

 

November 3, 2022: 87 Fed. Reg. 66225: President Biden continued the national emergency in Sudan, declared in Executive Order 13067, as expanded by Executive Order 13400, and continue in effect beyond November 3, 2022. The situation in Darfur continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.

 

https://www.federalregister.gov/documents/2022/11/02/2022-24046/continuation-of-the-national-emergency-with-respect-to-sudan

 

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President Biden Continues National Emergency With Respect To The Threat From Securities Investments That Finance Certain Companies Of The People’s Republic Of China

 

November 10, 2022: 87 Fed. Reg. 68017: The national emergency declared in Executive Order 13959 of November 12, 2020, expanded in scope by Executive Order 14032 of June 3, 2021, must continue in effect beyond November 12, 2022 to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by the threat from securities investments that finance certain companies of the People’s Republic of China (PRC). Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 13959 with respect to the threat from securities investments that finance certain companies of the PRC and expanded in Executive Order 14032.

 

https://www.federalregister.gov/documents/2022/11/10/2022-24787/continuation-of-the-national-emergency-with-respect-to-the-threat-from-securities-investments-that

 

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President Biden Continues National Emergency In Iran

 

November 10, 2022: 87 Fed. Reg. 68013: President Biden has continued for 1 year the national emergency with respect to Iran declared in Executive Order 12170 of November 14, 1979, and the measures adopted on that date to deal with that emergency. The emergency declared by Executive Order 12170 is distinct from the emergency declared in Executive Order 12957 on March 15, 1995.

 

https://www.federalregister.gov/documents/2022/11/10/2022-24779/continuation-of-the-national-emergency-with-respect-to-iran

 

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President Biden Continues National Emergency Regarding The Proliferation Of Nuclear, Biological, And Chemical Weapons

 

November 10, 2022: 87 Fed. Reg. 68015: President Biden has continued for 1 year the national emergency with respect to the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States posed by the proliferation of nuclear, biological, and chemical weapons (weapons of mass destruction) and the means of delivering such weapons.

 

https://www.federalregister.gov/documents/2022/11/10/2022-24784/continuation-of-the-national-emergency-with-respect-to-the-proliferation-of-weapons-of-mass

 

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President Biden Continues National Emergency In Nicaragua

 

November 15, 2022: 87 Fed. Reg. 68589: President Biden has continued for one year the national emergency declared in Executive Order 13851 of November 27, 2018, in response to the situation in Nicaragua posing an unusual and extraordinary threat to the national security and foreign policy of the United States. The EO was augmented by the additional measures declared in Executive Order 14088 of October 24, 2022.

 

https://www.federalregister.gov/documents/2022/11/15/2022-25006/continuation-of-the-national-emergency-with-respect-to-the-situation-in-nicaragua

 

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U.S. Department Of Commerce, Bureau Of Industry and Security

 

The U.S. Department Of Commerce, Bureau Of Industry And Security Requests Comments On BIS Licensing Responsibilities And Enforcement

 

November 10, 2022: 87 Fed. Reg. 67867: The U.S. Department Of Commerce, Bureau Of Industry and Security requests comments on BIS licensing responsibilities and enforcement. To ensure consideration, comments regarding this proposed information collection must be received on or before January 9, 2023.

This collection of information involves ten miscellaneous activities described in Sections 744.15(b), Part 744 Supplement No. 7, paragraph (d), § 748.4, and Part 758 of the EAR that are associated with the export of items controlled by the Department of Commerce. Most of these activities do not involve the submission of documents to the BIS but instead involve the exchange of documents among parties in the export transaction to ensure that each party understands its obligations under U.S. law. Others involve writing certain export control statements on shipping documents or reporting unforeseen changes in shipping and disposition of exported commodities. These activities are needed by the Office of Export Enforcement and the U.S. Customs Service (Customs) to document export transactions, enforce the EAR and protect the National Security of the United States.

 

https://www.federalregister.gov/documents/2022/11/10/2022-24608/agency-information-collection-activities-submission-to-the-office-of-management-and-budget-omb-for

 

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U.S. Department Of Commerce, Bureau Of Industry and Security Updates Pakistan Due Diligence Guidance

 

November 17, 2022: The U.S. Department Of Commerce, Bureau Of Industry and Security updated its Pakistan due diligence guidance. Pakistan has a nuclear program and a missile program that are subject to end-use and end-user restrictions pursuant to Part 744 of the Export Administration Regulations (EAR) (15 C.F.R. Parts 730-774).

 

Accordingly, BIS’ guidance highlights:

1. The supplemental licensing requirements applicable to exports, reexports, and transfers (in-country) of items subject to the EAR that may be destined to nuclear or missile activities;
2. Restrictions on specific activities of U.S. persons; and

III. Best practices for screening customers in Pakistan to prevent the diversion of items subject to the EAR to unauthorized end uses and end users.

 

https://www.bis.doc.gov/index.php/policy-guidance/pakistan-due-diligence-guidance

 

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U.S. Department Of Commerce, Bureau Of Industry and Security Requests Comments on Entity List and Unverified List Requests

 

November 25, 2022: 87 Fed. Reg. 72446: The U.S. Department Of Commerce, Bureau Of Industry and Security requests comments on Entity List and Unverified List Requests. To ensure consideration, comments regarding this proposed information collection must be received on or before January 24, 2023. This collection is needed to provide a procedure for persons or organizations listed on the Entity List and Unverified List to request removal or modification of the entry that affects them.

 

https://www.federalregister.gov/documents/2022/11/25/2022-25700/agency-information-collection-activities-submission-to-the-office-of-management-and-budget-omb-for?utm_campaign=subscription+mailing+list&utm_source=federalregister.gov&utm_medium=email

 

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

 

DDTC Name And Address Changes Posted To Website

 

November 2 through 22, 2022: 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 for the Government of the United Kingdom from “Her Majesty the Queen” to “His Majesty the King”;
• Change in Name and Ownership from II-VI Incorporated to Coherent Corp. due to acquisition;
• Change in Name and Ownership from Newman & Spurr Consultancy Limited to QinetiQ Training and Simulation Limited due to acquisition;
• Change in Name and Ownership from SETTAS sa to CASTINGPAR sa due to acquisition;
• Change in Name from L3 Technologies MAS Inc. to L3Harris MAS Inc. due to corporate rebranding;
• Change in Name from L3 MAPPS Inc. to L3Harris Mapps Inc. due to corporate rebranding;
• Change in Name and Ownership from Altran Innovación, S.L. to Capgemini España S.L. due to acquisition;
• Change in Name and Ownership from Altran Sverige AB to Capgemini Engineering Sverige AB due to acquisition;
• Change in Name from Vectrus, Inc. to V2X, Inc. due to merger;
• Change in Name and Ownership from MD Helicopters, Inc. to MD Helicopters, LLC due to acquisition;
• Due to corporate rebranding Babcock Italy entities will change names as follows:

From Elilario Italia S.p.A. to Babcock Mission Critical Services Italia S.p.A;

From Aeroveneta Societa Di Servizi Aerei SRL to Babcock Mission Critical Services Italia S.p.A.;

From Elidolomiti S.r.l. to Babcock Mission Critical Services Italia S.p.A.;

From Helicapital Inversiones Aereas S.L. to Babcock Mission Critical Services Italia S.p.A.;

From Helitalia S.p.A. to Babcock Mission Critical Services Italia S.p.A.;

From Inaer Helicopter Italia S.p.A. to Babcock Mission Critical Services Italia S.p.A.;

From Societa Aerofotogrammetrica Nazionale SRL to Babcock Mission Critical Services Italia S.p.A.;

From Inaer Helicopter S.p.A. to Babcock Mission Critical Services Italia S.p.A.;

From TASS s.r.l. to Babcock Mission Critical Services Italia S.p.A.;

From Inaer Aviation Italia Fleet S.p.A. Babcock Mission Critical Services Fleet Management S.p.A.;

• Due to corporate rebranding Babcock Portugal entities will change names as follows:

From Inaer Helicopter Portugal LDA to Babcock Mission Critical Services Portugal Unipessoal LDA;

From Helisul – Sociedade de Meios Aéreos LDA to Babcock Mission Critical Services Portugal Unipessoal LDA; and

• Change in Name from Ultra Electronics Limited to Ultra PMES Limited and Ultra Cyber Limited due to internal restructuring.

 

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The Department Of State Temporarily Suspends 22 CFR § 120.11(c), “The See-Through Rule” For Capacitors In USML Category XI(c)(5)

 

November 21, 2022: The Deputy Assistant Secretary of State for Defense Trade Controls temporarily suspended for a period of six (6) months the applicability of § 120.11(c) of the International Traffic in Arms Regulations (ITAR) for certain capacitors described in U.S. Munitions List (USML) Category XI(c)(5). The DOS assessed that it is in the security and foreign policy interests of the United States to facilitate commercial uses of certain capacitors when integrated into any item not described on the USML (for example, certain items used in energy exploration and commercial aviation). Accordingly, pursuant to ITAR § 126.2, and the DOS’s administration of the Arms Export Control Act (AECA), the Deputy Assistant Secretary of State for Defense Trade Controls ordered the temporary suspension of ITAR § 120.11(c) with respect to capacitors described in USML Category XI(c)(5) that have a voltage rating of one hundred twenty-five volts (125 V) or less and have been integrated into, and included as an integral part of, any item not described on the USML. Such articles are licensed by the Department of Commerce when integrated into, and included as an integral part of, items subject to the EAR.  This temporary suspension is valid for a period of six months, from November 21, 2022 to May 21, 2022, or when terminated by notice, whichever occurs first.  Capacitors described in USML Category XI(c)(5) remain subject to the controls of the ITAR in all other circumstances, including as stand-alone articles. The export, reexport, retransfer, or temporary import of technical data and defense services directly related to all defense articles described in USML Category XI(c)(5) remain subject to the ITAR.  Any violation of the ITAR, including any violation of the terms and conditions of any export license issued by the Department of State prior to the temporary suspension announced herein, remains a violation of the AECA. The Department of State strongly encourages industry to disclose unauthorized exports, reexports, retransfers, or temporary imports of defense articles, including the subject capacitors, that occurred before this temporary suspension.

 

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

 

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Suspended For 1 Year, the Republic of Cyprus Designation As An ITAR 126.1 Country

 

November 22, 2022: 87 Fed. Reg. 71250: On September 16, 2022, DDTC announced Secretary Blinken’s determination and certification to Congress that the Republic of Cyprus has met the necessary conditions under the National Defense Authorization Act (NDAA) for the Fiscal Year 2020 (P.L. 116-92) and the Eastern Mediterranean Security and Energy Partnership Act of 2019 (Div. J. P.L. 116-94) to allow the Department to approve exports, reexports, and transfers of defense articles to the Republic of Cyprus for Fiscal Year 2023.

 

In conjunction with Secretary Blinken’s decision, the Under Secretary for Arms Control and International Security suspended the policy of denial for retransfers and temporary imports destined for or originating in the Republic of Cyprus and brokering activities involving the Republic of Cyprus for Fiscal Year 2023.

Accordingly, the Department has published a Federal Register notice amending § 126.1(r) of the International Traffic in Arms Regulations (ITAR) to specify that the Republic of Cyprus’ status as a proscribed destination is suspended from October 1, 2022, through September 30, 2023.  As a result of this change, certain exemptions to licensing requirements are now available for exports, reexports, retransfers, and temporary imports destined for or originating in the Republic of Cyprus and brokering activities involving the Republic of Cyprus, provided the conditions for the use of those exemptions are met.

 

https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_news_and_events&cat=Notice and https://www.federalregister.gov/documents/2022/11/22/2022-25541/international-traffic-in-arms-regulations-prohibited-exports-imports-and-sales-to-or-from-certain

 

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The U.S. Department of State’s Directorate of Defense Trade Controls (DDTC) Seeks Public Comment

 

November 30, 2022: 87 Fed. Reg. 73577: The U.S. Department of State’s Directorate of Defense Trade Controls (DDTC) is seeking public comment by December 30, 2022, on Commodity Jurisdiction Determinations.

 

https://www.federalregister.gov/documents/2022/11/30/2022-26103/30-day-notice-of-proposed-information-collection-request-for-commodity-jurisdiction-determination

 

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The U.S. Department of State’s Directorate of Defense Trade Controls (DDTC) Seeks Public Comment

 

November 30, 2022: 87 Fed. Reg. 73577: The U.S. Department of State’s Directorate of Defense Trade Controls (DDTC) is seeking public comment by December 30, 2022, on technology security/clearance plans, screening records, and non-disclosure agreements.

 

https://www.federalregister.gov/documents/2022/11/30/2022-26102/30-day-notice-of-proposed-information-collection-technology-securityclearance-plans-screening

 

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November 30, 2022: The U.S. Department of State’s Directorate of Defense Trade Controls (DDTC) has updated the ITAR Redline version made available as a supporting document to 87 FR 16396, Mar. 23, 2022. This Revision 2, dated Nov. 28, 2022, adopts changes made by 87 FR 71250, Nov.  22, 2022, and limits redlines to only those changes made by the March 23 reorganization rule (i.e., changes to plain text those corrections to the original document made by Revision 1 to the ITAR Redline, dated Sept. 16, 2022).

In addition to making Revision 2 available, DDTC has updated the link to the ITAR Redline in the original announcement entitled “International Traffic in Arms Regulations: Consolidation and Restructuring of Purposes and Definitions,” dated March 22, 2022.

 

https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=e3ad8a6c1befddd0d1f1ea02f54bcbde

 

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U.S. Department Of Defense

 

DOD Releases Zero Trust Strategy And Roadmap

 

November 7, 2022: The U.S. Department of Defense (DoD) has released the DoD Zero Trust Strategy and Roadmap. Current and future cyber threats and attacks drive the need for a Zero Trust approach that goes beyond the traditional perimeter defense approach. The Department intends to implement distinct Zero Trust capabilities and activities as outlined in the strategy and associated Roadmap by FY27. The strategy envisions a DoD Information Enterprise secured by a fully implemented, Department-wide Zero Trust cybersecurity framework that will reduce the attack surface, enable risk management and effective data-sharing in partnership environments, and quickly contain and remediate adversary activities. The strategy outlines four high-level and integrated strategic goals that define what the Department will do to achieve its vision for ZT:

• Zero Trust Cultural Adoption – All DoD personnel are aware, understand, trained, and committed to a Zero Trust mindset and culture and support integration of ZT.
• DoD information Systems Secured and Defended – Cybersecurity practices incorporate and operationalize Zero Trust in new and legacy systems.
• Technology Acceleration – Technologies deploy at a pace equal to or exceeding industry advancements.
• Zero Trust Enablement – Department- and Component-level processes, policies, and funding are synchronized with Zero Trust principles and approaches.

 

Implementing Zero Trust will be a continuous process in the face of evolving adversary threats and new technologies. Additional Zero Trust enhancements will be incorporated in subsequent years as technology changes and U.S. adversaries evolve.

 

https://dodcio.defense.gov/Portals/0/Documents/Library/DoD-ZTStrategy.pdf

 

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DSCA Notification to Congress of  Foreign Military Sale To The Government Of Belgium Of AIM-120C-8 Advanced Medium Range Air-To-Air Missiles

 

November 8, 2022: The Department of State has made a determination approving a possible Foreign Military Sale to the Government of Belgium of AIM-120C-8 Advanced Medium Range Air-to-Air Missiles (AMRAAM) and related equipment for a total estimated cost of $380 million. The Defense Security Cooperation Agency (DSCA) delivered the required certification notifying Congress of this possible sale on November 8, 2022.

 

https://www.dsca.mil/press-media/major-arms-sales/belgium-advanced-medium-range-air-air-missiles-f-16-and-f-35-programs

 

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DSCA Notification to Congress of  Foreign Military Sale To The Government Of Lithuania Of M142 High Mobility Artillery Rocket System

 

November 9, 2022: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Lithuania of M142 High Mobility Artillery Rocket System (HIMARS) Launchers and related equipment for an estimated cost of $495 million. The Defense Security Cooperation Agency (DSCA) delivered the required certification notifying Congress of this possible sale.

 

https://www.dsca.mil/press-media/major-arms-sales/lithuania-m142-high-mobility-artillery-rocket-system-himars

 

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DSCA Notification to Congress of Foreign Military Sale To The Government Of Oman Of Joint Stand Off Weapons

 

November 9, 2022: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Oman of Joint Stand Off Weapons (JSOW) and related equipment for an estimated cost of $385 million. The Defense Security Cooperation Agency (DSCA) delivered the required certification notifying Congress of this possible sale.

 

https://www.dsca.mil/press-media/major-arms-sales/oman-joint-stand-weapons-jsow

 

DSCA Notification to Congress of Foreign Military Sale To The Government Of Qatar Of The Fixed Site-Low, Slow, Small Unmanned Aircraft System Integrated Defeat System

 

November 29, 2022: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Qatar of the Fixed Site-Low, Slow, Small Unmanned Aircraft System Integrated Defeat System (FS-LIDS) System of Systems and related equipment for an estimated cost of $1 billion. The Defense Security Cooperation Agency (DSCA) delivered the required certification notifying Congress of this possible sale.

 

https://www.dsca.mil/sites/default/files/mas/Press%20Release%20-%20Qatar%2022-36%20CN.pdf

 

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Department of the Treasury

 

Treasury Announced Availability Of CFIUS Enforcement And Penalty Guidelines

 

November 2, 2022: 87 Fed. Reg. 66220: The Office of Investment Security, Department of the Treasury, announced the availability of the Committee on Foreign Investment in the United States (CFIUS) Enforcement and Penalty Guidelines. These guidelines provide the public with a summary of CFIUS’s practice regarding penalties and other remedies for violations of section 721 of the Defense Production Act of 1950 as amended (Section 721), the regulations promulgated thereunder, or mitigation agreements, conditions, or orders pursuant thereto (Violations).

 

CFIUS may impose civil penalties for the following:

 

 

• Failure to File.  Failure to timely submit a mandatory declaration or notice, as applicable.
• Non-Compliance with CFIUS Mitigation.  Conduct that is prohibited by or otherwise fails to comply with CFIUS mitigation agreements, conditions, or orders (“CFIUS Mitigation”).
• Material Misstatement, Omission, or False Certification.  Material misstatements in or omissions from information filed with CFIUS and false or materially incomplete certifications filed in connection with assessments, reviews, investigations, or CFIUS Mitigation, including information provided during informal consultations or in response to requests for information.

 

The text of the CFIUS Enforcement Guidelines is available in its entirety on the CFIUS section of the Treasury Department’s website at https://home.treasury.gov/​policy-issues/​international/​the-committee-on-foreign-investment-in-the-united-states-cfius/​cfius-enforcement-and-penalty-guidelines.

 

https://www.federalregister.gov/documents/2022/11/02/2022-23803/notice-of-availability-of-committee-on-foreign-investment-in-the-united-states-enforcement-and

 

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Census Bureau

 

Census Deletes Port Of Export Codes

 

November 2, 2022: The U.S. Census Bureau deleted the following Port of Export Codes for Automated Export System (AES) / Electronic Export Information (EEI) filing:

• 2781 Palm Springs User Fee, LAX, CA;
• 2782 San Bernardino International Airport; and
• 3707 Sheboygan, WI.

 

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U.S. Census Bureau Tips on How to Resolve AES Response Messages

 

November 22­, 2022: 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 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:  600

Narrative:     Vehicle ID Qualifier Must be V or P

Severity:       Fatal

Reason:        The Vehicle ID Qualifier was not reported.

Resolution:  The Vehicle ID Qualifier identifies the type of used vehicle number reported on the shipment.  The Vehicle ID Qualifier must be either V for Vehicle Identification Number (VIN) or P for Product Identification Number (PIN).

Verify the Vehicle ID Qualifier, correct the shipment and resubmit.

 

Response Code: 856

Narrative:      Improbable ISO

Severity:        Verify

Reason:         The ISO Country Code reported may not be valid for the Country of Destination.

Resolution:    Valid ISO Country Codes reportable in AES are contained in Appendix C – ISO Country Codes.

Verify the ISO Country Code, correct the shipment and resubmit.

 

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

 

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Federal Communications Commission

 

The Federal Communications Commission (FCC) Bans The Import Of Communications Equipment From Huawei Technologies, ZTE Corporation, Hytera Communications, Hangzhou Hikvision Digital Technology, and Dahua Technology (and their subsidiaries and affiliates).

 

November 25, 2022: The Federal Communications Commission (FCC) adopted new rules prohibiting communications equipment deemed to pose an unacceptable risk to national security from being authorized for importation or sale in the United States. This is the latest step by the Commission to protect our nation’s communications networks. In recent years, the Commission, Congress, and the Executive Branch have taken multiple actions to build a more secure and resilient supply chain for communications equipment and services within the United States.

 

The Report and Order apply to future authorizations of equipment identified on the Covered List published by the FCC’s Public Safety and Homeland Security Bureau pursuant to the Secure and Trusted Communications Networks Act of 2019. The new rules prohibit the authorization of equipment through the FCC’s Certification process and make clear that such equipment cannot be authorized under the Supplier’s Declaration of Conformity process or be imported or marketed under rules that allow exemption from an equipment authorization. The Covered List (which lists both equipment and services) currently includes communications equipment produced by Huawei Technologies, ZTE Corporation, Hytera Communications, Hangzhou Hikvision Digital Technology, and Dahua Technology (and their subsidiaries and affiliates). The new rules implement the directive in the Secure Equipment Act of 2021, signed into law by President Biden last November that requires the Commission to adopt such rules.

 

file:///C:/Users/jherzo/Downloads/DOC-389524A1.pdf and file:///C:/Users/jherzo/Downloads/FCC-22-84A1.pdf

 

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U.S. Customs & Border Protection

 

U.S. Customs & Border Protection Launched Updates To The ACE Automated Systems Homepage

 

November 2, 2022: U.S. Customs and Border Protection (CBP) launched of updates to the ACE and Automated Systems homepage. While users will continue to have access to all the latest information about the Automated Commercial Environment (ACE), the updated website will offer a streamlined organization of ACE resources and fewer clicks for users to access the information they need. In particular, the coming update will include a new “How to Use ACE” page, providing an overview of the ACE Portal and ACE electronic data interchange (EDI) processing and giving users a single location to access all related resources. Any links or bookmarks to URLs that are no longer in service will be redirected to the upgraded resource page.

 

https://content.govdelivery.com/bulletins/gd/USDHSCBP-33596f5?wgt_ref=USDHSCBP_WIDGET_2

 

LATEST SANCTIONS FINES & PENALTIES

 

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

 

Sanctions

 

 

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

 

November 8, 2022: The U.S. Department of Commerce, Bureau of Industry and Security (BIS) extended the temporary denial order against Mahan Airways, Pejman Mahmood Kosarayanifard, Mahmoud Amini, Kerman Aviation, Sirjanco Trading LLC, Mahan Air General Trading LLC, Mehdi Bahrami, Al Naser Airlines, Ali Abdullah Alhay, Bahar Safwa General Trading, Sky Blue Bird Group, and Issarn Shammout for 180 days.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1421-e2763/file

 

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November 21, 2022: 87 Fed. Reg. 70780: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued an Order Renewing the Temporary Denial of Export (TDO) privileges of Rossiya Airlines of Russia based on BIS’ evidence and related investigation indicated that after the issuance of the TDO, Rossiya continued to fly aircraft into Russia in violation of the EAR including flights from Antalya and Istanbul, Turkey. Rossiya has continued to operate aircraft subject to the EAR, which was flown into Russia on or after March 2, 2022, on flights within Russia, including, but not limited to, between such cities as Anadyr, Russia; Kaliningrad, Russia; Khaborovsk, Russia; Magadan, Russia; and Moscow, Russia, in violation of Section 736.2(b)(10) of the EAR.

 

https://www.federalregister.gov/documents/2022/11/21/2022-25265/rossiya-airlines-pilotov-st-18-4-st-petersburg-russia-196210

 

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

 

November 3, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated members of an international oil smuggling network that facilitated oil trades and generated revenue for Hizballah and the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF). The network being designated includes several key individuals and numerous front companies and vessels involved in blending oil to conceal the Iranian origins of the shipments and exporting it around the world in support of Hizballah and the IRGC-QF.

 

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

 

• Artemov, Viktor Sergiyovich of the Ukraine;
• El Zein, Mohamed of Iran;
• Fazzone, Gregorio of Switzerland;
• Nafrieh, Edman of Iran;
• Ryabikova, Tatiana of France; and
• Zahedi, Rouzbeh of Iran.

 

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

 

• Al Hakeel Al Aswad Oil Trading LLC of the United Arab Emirates;
• Ava Petroleum Services S.A. of Switzerland;
• Azul Vista Shipping Corporation of the Marshall Islands;
• Blue Berri Shipping Inc. of the Marshall Islands;
• Centrum Maritime PTE. LTD. of Singapore;
• Energotrade Plus Dmcc of the United Arab Emirates;
• Expanse Ship Management Limited of Turkey;
• Gilda Tar Karvan International Company of Iran;
• Harbour Ship Management Limited of the Marshall Islands;
• Intrepid Navigators S.A., of the Marshall Islands;
• Monumont Ship Management Limited of the Marshall Islands;
• Petro Naviero PTE. LTD. of Singapore;
• Pontus Navigation Corp. of the Marshall Islands;
• Rising Tide Shipping Corp. of the Marshall Islands;
• Technology Bright International Limited of the Marshall Islands;
• Triton Navigation Corp. of the Marshall Islands; and
• Vista Clara Shipping Corporation of the Marshall Islands.

 

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

 

• Adisa Oil Products Tanker Panama flag; Vessel Registration Identification IMO 9304667;
• B Luminosa Oil Products Tanker Djibouti flag; Vessel Registration Identification IMO 9256016;
• Bluefins Oil Products Tanker Djibouti flag; Vessel Registration Identification IMO 9221657;
• Boceanica Oil Products Tanker Djibouti flag; Vessel Registration Identification IMO 9267132;
• Bueno Oil Products Tanker Djibouti flag; Vessel Registration Identification IMO 9282443;
• Julia A (f.k.a. AZUL) Oil Products Tanker Liberia flag; Vessel Registration Identification IMO 9236353;
• Lara I (f.k.a. CLARA) Oil Products Tanker Liberia flag; Vessel Registration Identification IMO 9231767;
• Nolan (f.k.a. OSLO) Oil Products Tanker Panama flag; Vessel Registration Identification IMO 9179701;
• Rain Drop Crude Oil Tanker Cook Islands flag; Vessel Registration Identification IMO 9233208;
• Young Yong Oil Products Tanker Djibouti flag; Vessel Registration Identification IMO 9194127; and
• Zephyr I (f.k.a. ZHEN I) Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9255880.

 

https://home.treasury.gov/news/press-releases/jy1076 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221103

 

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November 4, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), along with the Government of Canada, designated Haitian nationals Joseph Lambert (Lambert) and Youri Latortue (Latortue) pursuant to Executive Order 14059 of December 15, 2021, “Imposing Sanctions on Foreign Persons Involved in the Global Illicit Drug Trade.” OFAC designated Lambert and Latortue for having engaged in, or attempted to engage in, activities or transactions that have materially contributed to, or pose a significant risk of materially contributing to, the international proliferation of illicit drugs or their means of production. Lambert is the sitting President of the Haitian Senate and has held political positions in Haiti for 20 years. Latortue is a former Haitian Senator and a longtime politician.

 

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

 

• Lambert, Joseph of Haiti; and
• Latortue, Youri of Haiti.

 

https://home.treasury.gov/news/press-releases/jy1080 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221104

 

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November 7, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated four members of an Islamic State of Iraq and Syria (ISIS) cell operating in South Africa who have provided technical, financial, or material support to the terrorist group. Treasury also designated eight companies owned, controlled, or directed by the individuals in this ISIS cell. ISIS continues to expand its terrorist network across the continent, as evidenced by the July 2022 United Nations Security Council report that highlighted the emerging importance of the country for funds transfers from ISIS leadership to ISIS affiliates across Africa. Treasury remains committed to exposing and disrupting terrorist financing on the African continent.

 

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

 

• Akbar, Mohamad of South Africa;
• Akbar, Nufael of South Africa;
• Akbar, Umar of South Africa; and
• Akbar, Yunus Mohamad of South Africa.

 

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

 

• Ashiq Jewellers CC of South Africa;
• Bailey Holdings PTY LTD of South Africa;
• Flexoseal Waterproofing Solutions PTY LTD of South Africa;
• HJ Bannister Construction CC of South Africa;
• Ineos Trading PTY LTD of South Africa;
• Ma Gold Traders PTY LTD of South Africa;
• Shaahista Shoes CC of South Africa; and
• Sultan’s Construction CC of South Africa.

 

https://home.treasury.gov/news/press-releases/jy1084 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221107

 

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November 8, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating two individuals for engaging in transportation and procurement activities on behalf of the Democratic People’s Republic of Korea (DPRK). These individuals have acted on behalf of Air Koryo, an entity previously designated by OFAC for operating in the transportation industry in the DPRK economy. OFAC also delisted and simultaneously redesignated Tornado Cash under Executive Order (E.O.) 13722 and E.O. 13694, as amended. The redesignation takes into account additional information and also includes an additional basis for the designation of Tornado Cash regarding its support for DPRK activities. Tornado Cash, an entity that provides virtual currency mixing services, obfuscated the movement of over $455 million stolen in March 2022 by the OFAC-designated, DPRK-controlled Lazarus Group in the largest known virtual currency heist to date. OFAC also issued a new Frequently Asked Question (FAQ) to provide additional compliance guidance regarding the nature of the Tornado Cash entity, and updated three existing FAQs with additional guidance.

 

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

 

• Oo, Kyaw Min, Yangon of Burma;
• Ri, Sok, Dandong of China and North Korea; and
• Yan, Zhiyong of China.

 

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

 

• Sky Aviator Company Limited of Burma; and
• Tornado Cash (See link below for Digital Currency Addresses associated with Tornado Cash.

 

Additional Frequently Asked Questions:

 

Question 1095: Who is the Tornado Cash “person” that OFAC designated pursuant to E.O. 13722 (“Blocking Property of the Government of North Korea and the Workers’ Party of Korea, and Prohibiting Certain Transactions with Respect to North Korea”) and Executive Order (E.O.) 13694 (“Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities”), as amended?

 

Answer: A “person” subject to designation under E.O. 13722 or E.O. 13694, as amended, includes an individual or an entity defined as “a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization.”  Once OFAC has determined that a person is subject to sanctions, OFAC adds that person to the Specially Designated Nationals and Blocked Persons List.

OFAC designated the entity known as Tornado Cash, which is a “partnership, association, joint venture, corporation, group, subgroup, or other organization” that may be designated pursuant to IEEPA.  Tornado Cash’s organizational structure consists of: (1) its founders and other associated developers, who together launched the Tornado Cash mixing service, developed new Tornado Cash mixing service features, created the Tornado Cash Decentralized Autonomous Organization (DAO), and actively promoted the platform’s popularity in an attempt to increase its user base; and (2) the Tornado Cash DAO, which is responsible for voting on and implementing new features created by the developers.  Tornado Cash uses computer code known as “smart contracts” to implement its governance structure, provide mixing services, offer financial incentives for users, increase its user base, and facilitate the financial gain of its users and developers.  OFAC has not designated Tornado Cash’s individual founders, developers, members of the DAO, or users, or other persons involved in supporting Tornado Cash at this time.  However, all Tornado Cash property and interests in property are blocked, and U.S. persons cannot transact with Tornado Cash or deal in its property and interests in property absent authorization from OFAC.  See FAQs 1077 and 1078.

 

Amended Frequently Asked Questions:

 

Question 1076: What is prohibited as a result of OFAC’s designation of Tornado Cash?

 

Answer: On August 8, 2022, OFAC designated the entity Tornado Cash pursuant to Executive Order (E.O.) 13694, as amended, for facilitating the laundering of proceeds of cybercrimes, including those committed by the Lazarus Group, a North Korea state-sponsored hacking group that was sanctioned in 2019.  On November 8, 2022, OFAC simultaneously designated Tornado Cash pursuant to E.O. 13722 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of the Government of North Korea and redesignated Tornado Cash pursuant to E.O. 13694, as amended, for facilitating the laundering of proceeds of cybercrimes, including those committed by the Lazarus Group, and as such the August 8, 2022 designation of Tornado Cash is no longer operative and is wholly replaced. As described in FAQs 561 and 562, OFAC may include identifiers on the Specially Designated Nationals and Blocked Persons List (SDN List) specific virtual currency wallet addresses associated with blocked persons.  As part of the SDN List entry for Tornado Cash, OFAC included as identifiers certain virtual currency wallet addresses associated with Tornado Cash, as well as the URL address for Tornado Cash’s website.  The Tornado Cash website has since been deleted from the Internet, but it currently remains available through certain Internet archives.

 

While engaging in any transaction with Tornado Cash or its blocked property or interests in property is prohibited for U.S. persons, interacting with open-source code itself in a way that does not involve a prohibited transaction with Tornado Cash is not prohibited.  For example, U.S. persons would not be prohibited by U.S. sanctions regulations from copying the open-source code and making it available online for others to view, as well as discussing, teaching about, or including open-source code in written publications, such as textbooks, absent additional facts.  Similarly, U.S. persons would not be prohibited by U.S. sanctions regulations from visiting the Internet archives for the Tornado Cash historical website, nor would they be prohibited from visiting the Tornado Cash website if it again becomes active on the Internet.

 

Question 1078: Do OFAC reporting obligations apply to “dusting” transactions?

 

Answer: OFAC is aware of reports following the August 8, 2022 designation of Tornado Cash that certain U.S. persons may have received unsolicited and nominal amounts of virtual currency or other virtual assets from Tornado Cash smart contracts, a practice commonly referred to as “dusting.”  Technically, OFAC’s regulations would apply to these transactions.  To the extent, however, these “dusting” transactions have no other sanctions nexus besides Tornado Cash, OFAC will not prioritize enforcement against the delayed receipt of initial blocking reports and subsequent annual reports of blocked property from such U.S. persons.  Persons who received a “dusting” transaction can also apply to OFAC for a specific license.

For guidance related to filing an initial and annual report of blocked property, please see FAQs 49, 50, and 646, respectively, and 31 C.F.R. § 501.603.  Please note that the annual filing requirement for 2022 applies only to persons holding blocked property as of June 30 of this year.

Question 1079: I sent the virtual currency to Tornado Cash but did not complete the mixing transaction or otherwise withdraw my virtual currency before Tornado Cash’s August 8, 2022 designation.  How can I complete the transaction or withdraw my virtual currency without violating U.S. sanctions regulations?

 

Answer: For transactions involving Tornado Cash that were initiated prior to its designation on August 8, 2022, but not completed by the date of designation, U.S. persons or persons conducting transactions within U.S. jurisdiction may request a specific license from OFAC to engage in transactions involving the subject virtual currency.  Applicants should be prepared to provide, at a minimum, all relevant information regarding these transactions with Tornado Cash, including the wallet addresses for the remitter and beneficiary, transaction hashes, the date and time of the transaction(s), as well as the amount(s) of virtual currency.  OFAC would have a favorable licensing policy towards such applications, provided that the transaction did not involve other sanctionable conduct.

 

In order to apply for a specific license to complete a transaction or withdraw virtual currency involving Tornado Cash that was deposited prior to its designation or to engage in other transactions or dealings with Tornado Cash, you are encouraged to file a licensing request by visiting the following link: https://home.treasury.gov/policy-issues/financial-sanctions/ofac-license-application-page.

 

https://home.treasury.gov/news/press-releases/jy1087 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221108 and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-11-08 and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/updated/2022-11-08

 

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November 9, 2022: In coordination with partners in the Netherlands and the United Kingdom (UK), the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Alex Adrianus Martinus Peijnenburg (Peijnenburg), Martinus Pterus Henri De Koning (De Koning), Matthew Simon Grimm (Grimm), and nine entities pursuant to Executive Order (E.O.) 14059 for supplying illicit fentanyl, synthetic stimulants, cannabinoids, and opioids to U.S. markets through internet sales and a host of shell companies. This action represents the first use of E.O. 14059 to target those involved in the sale of illicit drugs purchased online and via darknet marketplaces.

 

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) also designated two business associates of a sanctioned al-Qa’ida financial facilitator and external operations plotter. The two individuals designated are Mohamad Irshad Mohamad Haris Nizar and Musab Turkmen, who conducted businesses activities to assist Ahmed Luqman Talib (Talib), who was previously designated by OFAC for facilitating the international movement of individuals and finances in furtherance of al-Qa’ida’s objectives. Australian authorities arrested Talib on March 25, 2021, and days later charged him with plotting incursions into foreign states for the purpose of engaging in hostile activities.

 

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

 

• De Koning, Martinus Pterus Henrikus of The Netherlands;
• Grimm, Matthew Simon of the United Kingdom and The Netherlands including his Digital Currency Addresses;
• Haris Nizar, Mohamad Irshad Mohamadof Sri Lanka;
• Peijnenburg, Alex Adrianus Martinus of The Netherlands including his Digital Currency Addresses; and
• Turkmen, Musab of Turkey.

 

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

 

• A.M. Peijnenburg Holding B.V. of The Netherlands;
• Bellizo, Huygensstraat of The Netherlands;
• Best Sport Company B.V. of The Netherlands;
• Best Sport Company of The Netherlands;
• Erjm Limited of the United Kingdom;
• Green District B.V. of The Netherlands;
• King Trade B.V. of The Netherlands;
• Natural Gifts B.V. of The Netherlands; and
• Organic District B.V. of The Netherlands.

 

https://home.treasury.gov/news/press-releases/jy1089 and https://home.treasury.gov/news/press-releases/jy1088 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221109

 

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November 10, 2022: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 8D, “Authorizing Transactions Related to Energy.” 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, May 15, 2023:

(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) 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

(8) 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 above unless separately authorized.

 

Effective November 10, 2022, General License No. 8C, dated June 14, 2022, is replaced and superseded in its entirety by this General License No. 8D.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221110_44 and https://home.treasury.gov/system/files/126/russia_gl8d.pdf

 

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November 10, 2022: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 53 “Authorizing Transactions for Diplomatic Missions of the Russian Federation Prohibited by Directive 4 under Executive Order 14024”, and publishing one Russia-related Frequently Asked Question (1096).

 

Russia-related General License 53: U.S. persons are authorized to engage in all transactions ordinarily incident and necessary to the official business of diplomatic or consular missions of the Government of the Russian Federation (“Russian missions”), where the transactions are prohibited by Directive 4 under Executive Order (E.O.) 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation.

 

U.S. persons are authorized to engage in all transactions ordinarily incident and necessary to the compensation of employees of Russian missions, including payment of salaries and reimbursement of expenses, where the transactions are prohibited by Directive 4 under E.O. 14024.

 

This general license does not authorize:

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

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

 

Question 1096: Do U.S. sanctions prohibit U.S. persons from engaging in transactions that are ordinarily incident and necessary to the official business of diplomatic or consular missions of the Government of the Russian Federation located in or outside the United States?

 

Answer: OFAC issued Russia-related General License (GL) 53 to authorize U.S. persons to engage in all transactions ordinarily incident and necessary to the official business of diplomatic or consular missions of the Government of the Russian Federation (“Russian missions”), where the transactions are prohibited by Directive 4 under Executive Order (E.O.) 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation.  This authorization applies to transactions related to Russian missions located in or outside the United States.  For example, GL 53 authorizes the payment of salaries to employees of Russian missions that may otherwise be prohibited by Directive 4, such as a payment originated by the Ministry of Finance of the Russian Federation from a non-blocked Russian bank.  Importantly, GL 53 does not authorize any transactions involving blocked persons, including blocked Russian financial institutions; nor does it authorize debits to the accounts on the books of U.S. financial institutions of entities subject to Directive 4.  Non-U.S. persons may engage in transactions that are authorized for U.S. persons under this GL without risk of sanctions under E.O. 14024.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221110_33 and https://home.treasury.gov/system/files/126/russia_gl53.pdf and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1096

 

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November 14, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), alongside the U.S. Department of State, sanctioned a transnational network procuring technology that supports the Russian military-industrial complex. OFAC also designated a global network of financial facilitators, enablers, and others associated with two key Kremlin-linked elites whose fortunes are intertwined with the West. In total, OFAC’s actions designated 14 individuals and 28 entities, and identified eight aircraft as blocked property.

 

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

 

• Aliev, Murat Magomedovich of Russia;
• Gadzhiev, Nariman Gadzhievich of Switzerland; United Arab Emirates; Saint Kitts and Nevis; and Russia;
• Katz, Laurin of Switzerland;
• Kerimov, Said Suleymanovich of Russia;
• Kerimova, Amina Suleymanovna of Russia;
• Kerimova, Firuza Nazimovna of Russia;
• Kerimova, Gulnara Suleymanovna of Russia;
• Leng, Holger of Estonia and Switzerland;
• Pasche, Jacques of Switzerland;
• Pavlyuk, Mikhail Ilyich of Armenia and Russia;
• Rettich, Inga of Switzerland and Cyprus;
• Studhalter, Alexander-Walter of Switzerland; United Kingdom; Luxembourg; Spain; Germany; and France;
• Studhalter, Hugo Ange Christophe of France and Switzerland; and
• Studhalter, Jeremy Eric Camille of France and Switzerland.

 

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

 

• Adorabella AG of Russia and Switzerland;
• Alstone Investment AG of France and Switzerland;
• Bonum Capital Cyprus LTD of Cyprus;
• Bonum Capital Investors Corp of the British Virgin Islands;
• Chlodwig Enterprises AG of Russia and Switzerland;
• Constellation Advisors LTD of the United Arab Emirates;
• Emperor Aviation LTD of Russia;
• Eurimo Holding SA of Luxembourg;
• JSC Pkk Milandr of Russia;
• Limited Liability Company Aviakompaniya Dalnevostochnaya KSM of Russia;
• Limited Liability Company Bonum Capital of Russia;
• Limited Liability Company Bonum Investments of Russia;
• Limited Liability Company Bonum Management of Russia;
• Limited Liability Company Rb-Esteit of Russia;
• MG International AG of Russia and Switzerland;
• Milur Electronics LLC of Armenia;
• Milur SA of Switzerland;
• Papa Oscar Ventures GMBH of Germany;
• Papa Oscar Ventures SE SL of Spain;
• SCI AAA Properties of France;
• Service Immobiliere Antibes SAS of France;
• Service Immobiliere Et Gestion SAS of France;
• Sharp Edge Engineering Inc. of Taiwan;
• Studhalter International Group AG of Switzerland;
• Swiss International Advisory Group AG of Switzerland;
• Swiss International Real Estate Portfolio AG of Switzerland;
• VH Antibes SAS of France; and
• Villa Lexa Estates SAS of France.

 

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

 

• Aircraft Tail Number 9H-AMN; Aircraft Model BD-700-1A11;
• Aircraft Tail Number 9H-ARK; Aircraft Model BD-700-1A10;
• Aircraft Tail Number 9H-EAA; Aircraft Model Citation XLS+;
• Aircraft Tail Number 9H-MAO; Aircraft Model BD-700-1A10;
• Aircraft Tail Number 9H-OKO; Aircraft Model G650;
• Aircraft Tail Number 9H-SIS; Aircraft Model CL-600-2B16 (604 Variant);
• Aircraft Tail Number 9H-SSK; Aircraft Model G650; and
• Aircraft Tail Number 9H-TIO; Aircraft Model BD-700-1A11.

 

OFAC also issued Russia-related General License 40C “Civil Aviation Safety.” All transactions ordinarily incident and necessary to the provision, exportation, or reexportation of goods, technology, or services to ensure the safety of civil aviation involving one or more of the blocked entities that are prohibited by Executive Order (E.O.) 14024 are authorized, provided that:

(1) The aircraft is registered in a jurisdiction solely outside of the Russian Federation; and

(2) The goods, technology, or services that are provided, exported, or reexported are for use on aircraft operated solely for civil aviation purposes.

 

This general license does not authorize:

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

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

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

 

https://home.treasury.gov/news/press-releases/jy1102 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221114 and https://home.treasury.gov/system/files/126/russia_gl40c.pdf

 

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November 15, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is sanctioning firms involved in the production or ongoing transfer to Russia of Iranian unmanned aerial vehicles (UAVs), which Russia has used in devastating attacks against civilian infrastructure in Ukraine. OFAC is designating Shahed Aviation Industries Research Center, the firm responsible for the design and production of Shahed-series UAVs being used by Russian forces in Ukraine. OFAC is also targeting Success Aviation Services FZC, and I Jet Global DMCC for facilitating the transfer of Iranian UAVs to Russia. The U.S. Department of State is concurrently designating Russian Private Military Company “Wagner” (PMC Wagner) and Iran’s Islamic Revolutionary Guard Corps Aerospace Force (IRGC ASF) and Qods Aviation Industries pursuant to Executive Order (E.O.) 14024. To supplement the U.S. Department of State’s designation of PMC Wagner, OFAC is also designating two individuals for facilitating PMC Wagner’s acquisition of UAVs from Iran, Abbas Djuma and Tigran Khristoforovich Srabionov.

 

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

 

• Djuma, Abbas of Russia; and
• Srabionov, Tigran Khristoforovich of Russia.

 

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

• I Jet Global DMCC of the United Arab Emirates;
• Shahed Aviation Industries Research Center of Iran; and
• Success Aviation Services FZC of the United Arab Emirates.

 

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Counter Terrorism General License 21 “Authorizing Limited Safety and Environmental Transactions Involving Certain Vessels,” and publishing one Counter Terrorism Frequently Asked Question (1097).

 

General License 21: All transactions that are ordinarily incident and necessary to one of the following activities involving the persons or vessels described below that are prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), are authorized through 12:01 a.m. eastern standard time, December 15, 2022, provided that any payment to a blocked person must be made into a blocked account in accordance with the GTSR:

(1) The safe docking and anchoring of any of the blocked vessels listed in paragraph (b) of this general license (“blocked vessels”) in port;

(2) The preservation of the health or safety of the crew of any of the blocked vessels; and

(3) Emergency repairs of any of the blocked vessels or environmental mitigation or protection activities relating to any of the blocked vessels.

 

The authorization of this general license applies to the following blocked persons and vessels listed on the Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List and any entity in which any of the following persons own, directly or indirectly, a 50 percent or greater interest:

 

• Artemov, Victor Sergioyovich;
• Azul Vista Shipping Corp.;
• Harbour Ship Management Limited;
• Pontus Navigation Corp.;
• Triton Navigation Corp.; and
• Vista Clara Shipping Corp.

 

Question 1097: What does Counterterrorism-related General License 21 (GL 21) authorize?

 

Answer: GL 21 authorizes all activities otherwise prohibited by the Global Terrorism Sanctions Regulations (GTSR), 31 CFR part 594, that are ordinarily incident and necessary to the limited safety and environmental activities described in paragraph (a) of GL 21 involving certain blocked persons and vessels through 12:01 a.m. eastern standard time, December 15, 2022.  GL 21 does not authorize the offloading of any cargo onboard any of the blocked vessels listed in GL 21, and any payment of claims to or for the benefit of any blocked persons or vessels would require a specific license from OFAC.

 

After the expiration of GL 21, U.S. persons will be prohibited from engaging in any transactions with the blocked persons or vessels listed in GL 21, unless otherwise exempt or authorized by OFAC.  U.S. persons unable to conclude transactions authorized by GL 21 before 12:01 a.m. eastern standard time, December 15, 2022, are encouraged to seek guidance from OFAC.

 

 

Non-U.S. persons, including foreign financial institutions, generally do not risk exposure to sanctions for engaging in transactions with blocked persons where those transactions would not require a specific license if engaged in by a U.S. person.  Non-U.S. persons unable to conclude transactions authorized by GL 21 before 12:01 a.m. eastern standard time, December 15, 2022, are encouraged to seek guidance from OFAC.

 

https://home.treasury.gov/news/press-releases/jy1104 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221115 and https://home.treasury.gov/system/files/126/ct_gl21.pdf and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1097

 

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November 16, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating six senior employees of the Islamic Republic of Iran Broadcasting (IRIB), the Iranian state-run media corporation that has broadcast hundreds of forced confessions of Iranian, dual national, and international detainees in Iran. Designated in 2013, IRIB and its subsidiaries act not as objective media outlets but rather as a critical tool in the Iranian government’s mass suppression and censorship campaign against its own people. IRIB has produced and recently broadcast televised interviews of individuals being forced to confess that their relatives were not killed by Iranian authorities during nationwide protests but died due to accidental, unrelated causes.

 

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

 

• Barmahani, Mohsen of Iran;
• Jebelli, Peyman of Iran;
• Noroozi, Ahmad of Iran;
• Pouranvari, Yoosef of Iran;
• Rezvani, Ali of Iran; and
• Zabihpour, Ameneh Sadat of Iran.

 

https://home.treasury.gov/news/press-releases/jy1109 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221116

 

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November 17, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 13 companies in multiple jurisdictions facilitating the sale of hundreds of millions of dollars worth of Iranian petrochemicals and petroleum products to buyers in East Asia on behalf of sanctioned Iranian petrochemical brokers Persian Gulf Petrochemical Industry Commercial Co. (PGPICC) and Triliance Petrochemical Co. Ltd. (Triliance), as well as the National Iranian Oil Company (NIOC) and its marketing arm, Naftiran Intertrade Company Ltd. (NICO). This action, the fifth round of designations targeting Iran’s illicit petroleum and petrochemical trade since June 2022, demonstrates OFAC’s determination to target sanction evasion efforts.

 

OFAC also designated La Nueva Familia Michoacana and its co-leaders, Johnny Hurtado Olascoaga (Johnny Hurtado) and Jose Alfredo Hurtado Olascoaga (Jose Hurtado), pursuant to Executive Order (E.O.) 14059, for having engaged in, or attempted to engage in, activities or transactions that materially contributed to, or pose a significant risk of materially contributing to, the international proliferation of illicit drugs or their means of production. La Nueva Familia Michoacana smuggles illicit drugs into and throughout the United States. This organization is also behind the increasing U.S. presence of rainbow fentanyl, which, according to the U.S. Drug Enforcement Administration (DEA), appears in the form of pills/powder that comes in a variety of bright colors, shapes, and sizes and is made to attract children and young users.

 

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

 

• Hurtado Olascoaga, Johnny of Mexico;
• Hurtado Olascoaga, Jose Alfredo of Mexico.

 

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

 

• Access Technology Trading L.L.C. of the United Arab Emirates;
• Asian Zone Trading L.L.C. of the United Arab Emirates;
• Barza Style & Mode Co., Limited of China;
• East Asia Trading Import And Export Trade Co., LTD. of the Marshall Islands and China;
• Galaxy Petrochemical FZE of the United Arab Emirates;
• Highline Logistic Hk Limited of China;
• Hong Kong Aeonian Complex Co., Limited of China;
• La Nueva Familia Michoacana of Mexico;
• Monch General Trading L.L.C. of the United Arab Emirates;
• Newton Trading FZE of the United Arab Emirates;
• Sum Five Petrochemicals Trading L.L.C. of the United Arab Emirates;
• Torgan Co., Limited of China;
• Uteliz Resources Co., Limited of China; and
• Zhejiang Wonder Imp. And Exp. Co., LTD. of China.

 

https://home.treasury.gov/news/press-releases/jy1115 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221117 and https://home.treasury.gov/news/press-releases/jy1116

 

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November 18, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 54. All transactions ordinarily incident and necessary to the purchase or receipt of any debt or equity securities of VEON Ltd. that are prohibited by section 1(a)(i) of Executive Order (E.O.) 14071 are authorized, provided that the debt or equity securities were issued prior to June 6, 2022. Note to paragraph All transactions ordinarily incident and necessary to facilitating, clearing, and settling of transactions authorized by this general license that are prohibited by section 1(a)(i) of E.O. 14071 are authorized. 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.

 

https://home.treasury.gov/system/files/126/russia_gl54.pdf and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221118_33

 

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November 18, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned one Russian national, Dmitry Kudryakov, and one Belarusian national, Iryna Litviniuk, for their role in exploiting the Guatemalan mining sector, as well as three associated entities connected with their corruption schemes. These individuals and entities are designated pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world.

 

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

 

• Kudryakov, Dmitry of Russia;
• Litviniuk, Iryna of Belarus.

 

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

 

• Compania Guatemalteca De Niquel, Sociedad Anonima of Guatemala;
• Compania Procesadora De Niquel De Izabal, S.A. of Guatemala; and
• Mayaniquel, Sociedad Anonima of Guatemala.

 

https://home.treasury.gov/news/press-releases/jy1118 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221118

 

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November 21, 2022: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 13C “Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024.” 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, or certifications, to the extent such transactions are prohibited by Directive 4 under Executive Order 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation, provided such transactions are ordinarily incident and necessary to the day-to-day operations in the Russian Federation of such U.S. persons or entities, through 12:01 a.m. eastern standard time, March 7, 2023.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221121 and https://home.treasury.gov/system/files/126/russia_gl13c.pdf

 

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November 21, 2022: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has published a Determination pursuant to Executive Order (E.O.) 14071 to implement the price cap policy for crude oil of Russian Federation origin. Additionally, OFAC has published guidance on the implementation of the price cap policy for crude oil of Russian Federation origin. OFAC has also issued Russia-related General License 55, General License 56, and General License 57.

 

Pursuant to Sections l(a)(ii), l(b), and 5 of Executive Order (E.O.) 14071 of April 6, 2022 (“Prohibiting New Investment in and Certain Services to the Russian Federation in Response to Continued Russian Federation Aggression”), the Secretary of the Treasury, in consultation with the Secretary of State, determined that the prohibitions in Section l(a)(ii) of E.O. 14071 shall apply to the following categories of services as they relate to the maritime transport of crude oil of Russian Federation origin (collectively, the “Covered Services”):

• Trading/commodities brokering;
• Financing;
• Shipping;
• Insurance, including reinsurance and protection and indemnity;
• Flagging; and
• Customs brokering.

 

As a result, the following activities are prohibited, except to the extent provided by law, or unless licensed or otherwise authorized by the Office of Foreign Assets Control: the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any of the Covered Services to any person located in the Russian Federation. Notwithstanding that prohibition, the Covered Services are hereby authorized when the price of the crude oil of Russian Federation origin does not exceed the relevant price cap determined by the Secretary of the Treasury in consultation with the Secretary of State. The prohibitions on Covered Services in this determination shall take effect beginning at 12:01 a.m. eastern standard time on December 5, 2022. This determination excludes Covered Services with respect to crude oil of Russian Federation origin when such crude oil is loaded onto a vessel at the port of loading prior to 12:01 a.m. eastern standard time on December 5, 2022, and unloaded at the port of destination prior to 12:01 a.m. eastern standard time on January 19, 2023. See the link below for the full text of the Determination.

 

OFAC guidance on the implementation of the price cap policy for crude oil of Russian Federation origin. The United States is part of an international coalition, including the G7, the European Union, and Australia, that has agreed to prohibit the import of crude oil and petroleum products of Russian Federation origin (the “Price Cap Coalition”). These countries, home to many best-in-class financial and professional services, have also agreed to implement a policy with regard to a broad range of services as they relate to the maritime transport of crude oil and petroleum products of Russian Federation origin. This policy is known as the “price cap policy.” This document provides guidance on the implementation of the price cap policy for crude oil of Russian Federation origin (or “Russian oil”). OFAC anticipates publishing preliminary guidance on the implementation of the price cap policy for petroleum products of Russian Federation origin in the near future. The price cap policy is intended to maintain a reliable supply of oil to the global market while reducing the revenues the Russian Federation earns from oil after its own war of choice in Ukraine inflated global energy prices. See the link below for the full text of the guidance.

 

General License 55: 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, September 30, 2023, provided that the Sakalin-2 byproduct is solely for importation into Japan.

 

General License 56: 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 importation of crude oil into the Republic of Bulgaria, the Republic of Croatia, or landlocked European Union Member States as described in Council Regulation (EU) 2022/879 of June 3, 2022, are authorized.

 

General License 57: 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”) that are ordinarily incident and necessary to addressing vessel emergencies related to the health or safety of the crew or environmental protection, including safe docking or anchoring, emergency repairs, or salvage operations, are authorized.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221122 and https://home.treasury.gov/system/files/126/determination_11222022_eo14071.pdf and https://home.treasury.gov/system/files/126/price_cap_policy_guidance_11222022.pdf and https://home.treasury.gov/system/files/126/russia_gl55.pdf and https://home.treasury.gov/system/files/126/russia_gl56.pdf and https://home.treasury.gov/system/files/126/russia_gl57.pdf

 

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November 23, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated three Iranian security officials for the Iranian regime’s continued crackdown on ongoing protests throughout the country, including most recently in Kurdish areas. The Iranian regime has increased its aggressive actions against the Iranian people as part of its ongoing suppression of peaceful protests against a regime that denies human rights and fundamental freedoms to its people, especially women and girls.

 

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

 

• Asgari, Hassan of Iran;
• Moradi, Alireza of Iran;
• Osanloo, Mohammad Taghi of Iran.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221123 and https://home.treasury.gov/news/press-releases/jy1125

 

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November 26, 2022: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Venezuela-related General License 8K, “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” and Venezuela-related General License 41, “Authorizing Certain Transactions Related to Chevron Corporation’s Joint Ventures in Venezuela.”  Additionally, OFAC is issuing two new Venezuela-related Frequently Asked Questions (FAQs 1098 and 1099).

 

General License 8K: 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, is authorized through 12:01 a.m. eastern daylight time, May 26, 2023, for the following entities and their subsidiaries (collectively, the “Covered Entities”):

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

 

General License 41: All transactions ordinarily incident and necessary to the following activities for or related to the operation and management by Chevron Corporation or its subsidiaries (“Chevron”) of Chevron’s joint ventures in Venezuela (collectively, the “Chevron JVs”) involving 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 Executive Order (E.O.) 13850, as amended by E.O. 13857, or E.O. 13884, each as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized:

(1) Production and lifting of petroleum or petroleum products produced by the Chevron JVs, and any related maintenance, repair, or servicing of the Chevron JVs;

(2) Sale to, exportation to, or importation into the United States of petroleum or petroleum products produced by the Chevron JVs, provided that the petroleum and petroleum products produced by the Chevron JVs are first sold to Chevron;

(3) Ensuring the health or safety of personnel or the integrity of operations or assets of the Chevron JVs in Venezuela; and

(4) Purchase and importation into Venezuela of goods or inputs related to the activities described in paragraphs (a)(1)–(3) of this general license, including diluents, condensates, petroleum, or natural gas products.

 

Question 1098: Does Venezuela General License (GL) 41 authorize U.S. persons to provide goods or services for Chevron Corporation’s (Chevron) operation and management of its joint ventures (JVs) in Venezuela?

 

Answer: Yes, provided that such goods and services are for certain activities related to the operation and management of Chevron’s joint ventures in Venezuela, as specified in GL 41.  Such activities include, among others, the production and lifting of petroleum or petroleum products produced by Chevron’s JVs; related maintenance, repair, or servicing of the Chevron JVs; sale of petroleum or petroleum products to the United States produced by the Chevron JVs, provided that the petroleum and petroleum products produced by the Chevron JVs are first sold to Chevron; the procurement and import into Venezuela of goods or other inputs for authorized activities; and the processing of payments by U.S. financial institutions related to the foregoing activities.  Please see GL 41 for a complete list of authorized activities and associated conditions.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221126 and https://home.treasury.gov/system/files/126/venezuela_gl8k.pdf and https://home.treasury.gov/system/files/126/venezuela_gl41.pdf and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-11-26

Question 1099: Do non-U.S. persons risk exposure to U.S. sanctions for facilitating transactions related to Chevron Corporation (Chevron) and its joint ventures in Venezuela that are authorized pursuant to Venezuela General License (GL) 41?

 

Answer: No. Non-U.S. persons, including foreign financial institutions, generally do not risk exposure to U.S. sanctions for facilitating transactions or payments for or on behalf of, directly or indirectly, Chevron, its subsidiaries, joint ventures, or contractors that are authorized pursuant to Venezuela GL 41.  Non-U.S. persons generally do not risk exposure to the U.S. blocking sanctions under the Venezuela Sanctions Regulations, 31 CFR Part 591, for engaging in transactions with blocked persons, where those transactions would not require a specific license if engaged in by a U.S. person.

 

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November 30, 2022: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated the following individuals due to their ties to international terrorism and ties to Al-Qa’ida in the Indian subcontinent.

 

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

 

• Deroji, Mufti Hazrat of Pakistan;
• Ghouri, Atif Yahya of Afghanistan and Pakistan;
• Maruf, Muhammad of Afghanistan and Pakistan; and
• Mehmood, Osama of Afghanistan and Pakistan.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221130

 

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Fines and Penalties

 

November 3, 2022: 87 Fed. Reg. 66259: The U.S. Department of Commerce, Bureau of Industry and Security (BIS) has denied Jose Martin Gallegos-Luevanos’ (“Gallegos-Luevanos”) export privileges under the Regulations for a period of 10 years from the date of Gallegos-Luevanos’s conviction. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Gallegos-Luevanos had an interest at the time of conviction.

 

https://www.federalregister.gov/documents/2022/11/03/2022-23894/in-the-matter-of-jose-martin-gallegos-luevanos-inmate-number-94641-479-fci-pollock-federal

 

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On January 6, 2020, in the U.S. District Court for the Southern District of Texas, Gallegos-Luevanos was convicted of violating 18 U.S.C. 554(a). Specifically, Gallegos-Luevanos was convicted of fraudulently and knowingly attempting to export from the United States to Mexico one Barret .50 caliber bolt rifle, three FA Cugir Romanian AK-47 rifles, seven Century Arms VSKA AK-47 rifles, one Century Arms WASR AK-47 rifle, and 85 assorted magazines, in violation of 18 U.S.C. 554. As a result of his conviction, the Court sentenced Gallegos-Luevanos to 48 months in prison, three years supervised release, and a $100 court assessment.

 

https://www.federalregister.gov/documents/2022/11/03/2022-23894/in-the-matter-of-jose-martin-gallegos-luevanos-inmate-number-94641-479-fci-pollock-federal

 

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November 7, 2022: The Bureau of Industry and Security, U.S. Department of Commerce (“BIS”), issued a 15-count charging letter against Mohammad Alhamra (“Alhamra”) and WEBS Electronics Trading Company LLC (“WEBS”) of the United Arab Emirates (“UAE”) have violated the Export Administration Regulations (“the Regulations” or “the EAR”). The Charging Letter alleges violations of the Export Administration Regulations (EAR) related to exports of U.S. telecommunications equipment and related commodities to Syria and Iran and misrepresentations and concealment of facts to BIS officials regarding these exports. See all 14 counts at the following link:

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1420-alhamra-webs-charging-letter-final/file

 

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November 9, 2022: The U.S. Department of Justice (DOJ) announced that Phil Pascoe, 60, of Floyds Knobs, Indiana; Monica Pascoe, 45, of Floyds Knobs, Indiana; Scott Tubbs, 59, of Georgetown, Kentucky; and Quadrant Magnetics LLC are charged with wire fraud, violations of the Arms Export Control Act, and smuggling of goods for their roles in an illegal scheme to send export-controlled defense-related technical data to China and to unlawfully supply U.S. Department of Defense (DOD) with Chinese-origin rare earth magnets for aviation systems and military items.

 

The indictment alleges that between January 2012 and December 2018, the defendants conspired to send approximately 70 drawings containing export-controlled technical data to a company located in China without a license from the U.S. government, in violation of the Arms Export Control Act and the International Traffic in Arms Regulations. The technical data drawings were the property of two U.S. companies and related to end-use items for aviation, submarine, radar, tank, mortars, missiles, infrared and thermal imaging targeting systems, and fire control systems for DOD.

 

The indictment further alleges that Quadrant Magnetics imported rare earth magnets that were smelted and magnetized by a company in China. Quadrant then sold these magnets to two U.S. companies which included them in components sold to DOD for use in the F-16, the F-18, and other defense assets in violation of the Defense Acquisition Regulations System (DFARS). Under the DFARS specialty metal clause, rare earth magnets sold to DOD must be produced and magnetized in the United States or an approved country. China is not an approved country.

 

https://www.justice.gov/opa/pr/three-arrested-illegal-scheme-export-controlled-data-and-defraud-department-defense

 

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November 16, 2022: Yanjun Xu, 42, the first Chinese government intelligence officer ever to be extradited to the United States to stand trial, was sentenced in federal court in Cincinnati. Xu was sentenced to 20 years in prison. According to court documents, Xu targeted American aviation companies, recruited employees to travel to China, and solicited their proprietary information, all on behalf of the government of the People’s Republic of China (PRC). On Nov. 5, 2021, a federal jury in Cincinnati convicted Xu on all counts: conspiracy to commit economic espionage, conspiracy to commit trade secret theft, attempted economic espionage, and attempted trade secret theft.

 

Xu was a career intelligence officer, beginning in 2003 and rising to the rank of deputy division director at the Chinese Ministry of State Security (MSS), the intelligence and security agency for China. According to court documents and trial testimony, beginning in at least December 2013, Xu targeted specific companies in the United States and abroad that are recognized as leaders in the field of aviation.

Xu used aliases, front companies, and universities to deceive aviation employees and solicit information. He identified individuals who worked for the companies and recruited them to travel to China, often initially under the guise that they were traveling to give a presentation at a university. Xu and others paid the individuals stipends on top of covering travel costs.

 

https://www.justice.gov/opa/pr/chinese-government-intelligence-officer-sentenced-20-years-prison-espionage-crimes-attempting

 

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November 21, 2022: The Justice Department announced that it has reached a settlement agreement with Aero Precision LLC, a Washington state firearm manufacturer. The settlement resolves the department’s determination that Aero Precision had a policy of unlawfully screening out certain non-U.S. citizen job candidates, including asylees and refugees, in violation of the Immigration and Nationality Act (INA). Under governing law, asylees and refugees have the same eligibility to work in jobs involving access to sensitive defense-related information as U.S. citizens and lawful permanent residents, and would have to pass the same background check as other employees if an employer requires one.

 

The department’s investigation determined that from at least April 2020 until September 2020, Aero Precision routinely implemented a hiring policy that screened out eligible candidates who were not U.S. citizens or lawful permanent residents. Firearm manufacturers in the United States are subject to the International Traffic in Arms Regulations (ITAR), which regulate specific exports of defense articles and services. Absent State Department authorization, employers subject to these regulations must limit access to certain sensitive information to “U.S. persons,” which are defined as U.S. citizens, U.S. nationals, lawful permanent residents, asylees, and refugees. The ITAR thus does not authorize or require employers to exclude asylees and refugees from consideration and hire only U.S. citizens and lawful permanent residents. By limiting hiring to just U.S. citizens and lawful permanent residents, Aero Precision placed unnecessary hiring restrictions on its workforce. Under the settlement, Aero Precision must train staff on the requirements of the INA’s anti-discrimination provision, review its policies to ensure compliance with relevant law, and be subject to departmental monitoring and reporting requirements.

 

https://www.justice.gov/opa/pr/justice-department-secures-settlement-firearm-manufacturer-resolve-immigration-related

 

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November 28, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with Payward, Inc. d/b/a Kraken (“Kraken”), a Delaware-incorporated virtual currency exchange with operations in the United States and elsewhere.  Kraken agreed to remit $362,158.70 to settle its potential civil liability for apparent violations of sanctions against Iran.  As part of its settlement with OFAC, Kraken also has agreed to invest an additional $100,000 in certain sanctions compliance controls.  Due to Kraken’s failure to timely implement appropriate geolocation tools, including an automated internet protocol (IP) address blocking system, Kraken exported services to users who appeared to be in Iran when they engaged in virtual currency transactions on Kraken’s platform.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221128 and https://home.treasury.gov/system/files/126/20221128_kraken.pdf

 

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November 29, 2022: An indictment was unsealed, charging Ray Hunt, 69, of Madison County, Alabama, with federal offenses related to an illegal scheme to export U.S.-origin goods to Iran. The 15-count indictment charges the defendant with conspiracy to defraud the United States, sanctions violations, smuggling goods from the United States, and submitting false or misleading export information.  According to the indictment, since at least November 2017, the defendant conspired to export U.S.-origin parts used in the oil and gas industry, including control valves and oil tubing, through his Alabama-based company, Vega Tools LLC, to customers in Iran. The defendant transshipped the goods to Iran through Turkey and the UAE to evade U.S. sanctions.

 

https://www.justice.gov/opa/pr/alabama-man-indicted-violating-us-sanctions-against-iran

 

This newsletter is a listing of the latest changes in export control regulations through October 31, 2022.  The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

 

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

 

REGULATORY UPDATES

 

The President

 

President Biden Terminated Designation of Afghanistan as a Major Non-NATO Ally

 

October 4, 2022: 87 Fed. Reg. 60057: President Biden terminated the designation of Afghanistan as a Major Non-NATO Ally of the United States for the purposes of the Act and the Arms Export Control Act (22 U.S.C. 2751 et seq.).

 

https://www.federalregister.gov/documents/2022/10/04/2022-21654/terminating-the-designation-of-afghanistan-as-a-major-non-nato-ally

 

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President Continues National Emergency For 1 Year With Respect to Syria

 

October 14, 2022: 87 Fed. Reg. 62281: By Executive Order 13894, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the situation in and in relation to Syria.

 

The situation in and in relation to Syria, and in particular the actions by the Government of Turkey to conduct a military offensive into northeast Syria, undermines the campaign to defeat the Islamic State of Iraq and Syria, or ISIS, endangers civilians, and further threatens to undermine the peace, security, and stability in the region, and continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States. For this reason, the national emergency declared in Executive Order 13894 of October 14, 2019, must continue in effect beyond October 14, 2022. Therefore, the President continued for one year the national emergency declared in Executive Order 13894 with respect to the situation in and in relation to Syria.

 

https://www.federalregister.gov/documents/2022/10/13/2022-22472/continuation-of-the-national-emergency-with-respect-to-the-situation-in-and-in-relation-to-syria

 

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President Continues For 1 Year the National Emergency With Respect to the Democratic Republic of the Congo

 

October 17, 2022: 87 Fed. Reg. 62975: The situation in or in relation to the Democratic Republic of the Congo continues to pose an unusual and extraordinary threat to the foreign policy of the United States. For this reason, the national emergency declared in Executive Order 13413 of October 27, 2006, as amended by Executive Order 13671 of July 8, 2014, must continue in effect beyond October 27, 2022. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for one year the national emergency with respect to the situation in or in relation to the Democratic Republic of the Congo declared in Executive Order 13413, as amended by Executive Order 13671.

 

https://www.federalregister.gov/documents/2022/10/17/2022-22672/continuation-of-the-national-emergency-with-respect-to-the-democratic-republic-of-the-congo

 

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

 

Secretary Of State Certification Of Statutory Requirements: Upcoming Change To The Policy Of Denial For The Republic Of Cyprus

 

September 16, 2022: Secretary Blinken has determined and certified to Congress that the Republic of Cyprus has met the necessary conditions under the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2020 (P.L. 116-92) and the Eastern Mediterranean Security and Energy Partnership Act of 2019 (Div. J. P.L. 116-94) to allow the Department to approve exports, reexports, and transfers of defense articles to the Republic of Cyprus for FY 2023.

 

Therefore, in the near future, the Department will be publishing a Federal Register notice amending the International Traffic in Arms Regulations (ITAR) § 126.1(r) to specify that the policy of denial as described in § 126.1(r) shall not apply with respect to exports, reexports, and transfers to the Republic of Cyprus for FY 2023 and to specify that the Republic of Cyprus’ status as a proscribed destination is also suspended for the fiscal year 2023 with respect to exports, reexports, and transfers.

 

Editors note: This article was inadvertently left off of the September 2022 Newsletter.

 

https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_news_and_events&timeframe=all&cat=Notice

 

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DDTC Name And Address Changes Posted To Website

 

October 4 through 11, 2022: 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 Address for PHI International Australia Pty Ltd from 50 Kings Park Road, West Perth, Australia, 6005 to PHI International Australia Pty Ltd at Level 6, 1100 Hay Street, West Perth, Australia, 6005;
• Change in Name from Eurocopter Kingdom of Saudi Arabia to Airbus Helicopters Arabia for Aircraft Maintenance due to corporate rebranding;
• Change in Name and Ownership from Progeny Systems Corporation to Progeny Systems, LLC due to acquisition by General Dynamics Mission Systems, Inc.

 

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The Department Of State Issued A 60 Day Notice Of Four Proposed Information Collections

 

October 18, 2022: 87 Fed. Reg. 63145: The Department of State issued a 60-day notice of four proposed information collections:

• Request for Approval of Manufacturing License Agreements, Technical Assistance Agreements, and Other Agreements;
• Maintenance of Records by DDTC Registrants
• Annual Brokering Report; and
• Brokering Prior Approval (License).

 

The Department of State will accept comments from the public up to December 19, 2022.

 

Comments may be submitted by any of the following methods:

• Web: Persons with access to the internet may comment on this notice by going to www.Regulations.gov. You can search for the document by entering “Docket Number: DOS-2022-0034” in the Search field. Then click the “Comment Now” button and complete the comment form.
• Email: DDTCPublicComments@state.gov.
• Regular Mail: Send written comments to: The public may mail comments to the Directorate of Defense Trade Controls, Department of State, 2401 E St NW, Suite H1205, Washington, DC 20522.

 

https://www.federalregister.gov/documents/2022/10/18/2022-22584/60-day-notice-of-four-proposed-information-collections-request-for-approval-of-manufacturing-license

 

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

 

BIS Updates Policy Regarding Enforcement Of The Antiboycott Rules

 

October 6, 2022: 87 Fed. Reg. 60890: The Department of Commerce’s Bureau of Industry and Security (BIS) updated its policy regarding enforcement of the antiboycott rules. The amendment took effect on October 7, 2022, and clarifies the categories of antiboycott violations and their associated penalties to ensure appropriate actions are taken based on the seriousness of the violation.

 

Summaries of the four enhancements to strengthen the antiboycott enforcement program are below:

 

1. Enhanced Penalties. Penalty amounts imposed will reflect BIS’s assessment of the seriousness of the violation and will be commensurate with the harm caused. Because not all antiboycott violations are equivalent in seriousness, BIS will continue to seek different levels of penalties depending on the different nature of the antiboycott violation. For the most serious violations – those in Category A under our regulations – BIS will begin its penalty calculus with the maximum penalty under the Anti-Boycott Act of 2018. BIS Antiboycott regulations have long provided for the imposition of the maximum penalty for Category A violations. All Category A violations will be subject to the maximum penalty as the starting point in our penalty calculus. For violations of Category B, penalties will be enhanced as well. Penalties must be high enough to both punish those who violate the antiboycott rules and deter those who would violate them. This means that penalties for Category C violations will also be increased.

 

2. Reprioritized Violation Categories. BIS has revised the Antiboycott Penalty Guidance to recategorize certain antiboycott violations in a manner that reflects BIS’s current view of their relative seriousness. A rulemaking amendment to the Export Administration Regulations reprioritizing certain categories of antiboycott violations went into effect on October 7, 2022.

 

3. Admissions of Misconduct. In the past, when BIS has resolved matters involving violations of the antiboycott rules, BIS has allowed companies to pay a reduced penalty without admitting misconduct. These “no admit/no deny” settlements had the advantage of making it easier to reach a resolution but also had two serious disadvantages. First, because there was no admission in such cases, there was no admitted statement of facts, i.e., no factual recitation making clear what got the company into trouble. Without such an admitted statement of facts, it is more difficult for other companies to learn from their peers’ mistakes and adjust their behavior accordingly. Second, companies get a significant reduction in a penalty when they resolve matters short of trial. BIS wants companies to resolve matters and want to incentivize them to do so. But in other enforcement contexts, including in BIS administrative export enforcement cases, companies must admit their conduct in order to obtain a resolution. The same will now be true in administrative antiboycott enforcement cases as well. Under the new policy, BIS will require those who enter into settlement agreements for antiboycott violations to admit to a statement of facts outlining their conduct as part of the settlement agreement.

 

4. Renewed Focus on Foreign Subsidiaries of U.S. Companies. Violations of our antiboycott rules have traditionally resulted in consequences being imposed on the U.S. parties receiving the boycott-related requests (for complying with or failing to report receipt of such requests) and not on the parties making them. The penalties BIS imposes on U.S. recipients help to deter them from complying with boycott-related requests by attaching significant costs on the back end. But this is only one side of the equation. BIS wants to dissuade foreign parties from making those requests in the first place. Going forward, BIS will be more aggressive in exploring ways to deter foreign parties from issuing or making boycott requests of U.S. persons. In particular, BIS will bring a renewed focus to its enforcement efforts against controlled foreign subsidiaries of U.S. parent companies when they act in violation of our antiboycott regulations.

 

https://www.federalregister.gov/documents/2022/10/07/2022-21713/export-administration-regulations-guidance-on-penalty-determinations-in-the-settlement-of and

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3155-2022-10-06-bis-press-release-enhancing-antiboycott-enforcement-final-1/file

 

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Commerce Implements LANDMARK New Export Controls On Advanced Computing And Semiconductor Manufacturing Items to the People’s Republic of China (PRC)

 

October 7, 2022: 87 Fed. Reg. 62186 and 87 Fed. Reg. 61971: The Department of Commerce’s Bureau of Industry and Security (BIS) implemented a series of targeted updates to its export controls as part of BIS’s ongoing efforts to protect U.S. national security and foreign policy interests. These updates will restrict the People’s Republic of China’s (PRC’s) ability to both purchase and manufacture certain high-end chips used in military applications and build on prior policies, company-specific actions, and less public regulatory, legal, and enforcement actions taken by BIS. The export controls announced in the two rules restrict the PRC’s ability to obtain advanced computing chips, develop and maintain supercomputers, and manufacture advanced semiconductors. These items and capabilities are used by the PRC to produce advanced military systems, including weapons of mass destruction; improve the speed and accuracy of its military decision-making, planning, and logistics, as well as of its autonomous military systems; and commit human rights abuses. Finally, these rules make clear that foreign government actions that prevent BIS from making compliance determinations will impact a company’s access to U.S. technology through addition to the Entity List.

 

BIS’s rule on advanced computing and semiconductor manufacturing addresses U.S. national security and foreign policy concerns in two key areas. First, the rule imposes restrictive export controls on certain advanced computing semiconductor chips, transactions for supercomputer end-uses, and transactions involving certain entities on the Entity List. Second, the rule imposes new controls on certain semiconductor manufacturing items and on transactions for certain integrated circuit (IC) end uses. Specifically, the rule:

1.) Adds certain advanced and high-performance computing chips and computer commodities that contain such chips to the Commerce Control List (CCL) in new ECCNs 3A090 and 4A090;

2.) Adds new license requirements for items destined for a supercomputer or semiconductor development or production end use in the PRC;

3.) Expands the scope of the Export Administration Regulations (EAR) Foreign Direct Product Rule over certain foreign-produced advanced computing items and foreign-produced items for supercomputer end uses;

4.) Expands the scope of the Foreign Direct Product Rule for foreign-produced items subjecting them to license requirements to twenty-eight existing entities on the Entity List that are located in the PRC;

5.) Adds certain semiconductor manufacturing equipment and related items to the CCL under a new ECCN 3B090;

6.) Adds new license requirements for items destined to a semiconductor fabrication “facility” in the PRC that fabricates ICs meeting specified. Licenses for facilities owned by PRC entities will face a “presumption of denial,” and facilities owned by multinationals will be decided on a case-by-case basis. The relevant thresholds are as follows:

• Logic chips with non-planar transistor architectures (I.e., FinFET or GAAFET) of 16nm or 14nm, or below;
• DRAM memory chips of 18nm half-pitch or less;
• NAND flash memory chips with 128 layers or more.

 

7.) Restricts the ability of U.S. persons to support the development, or production, of ICs at certain PRC-located semiconductor fabrication “facilities” without a license;

8.) Adds new license requirements to export items to develop or produce semiconductor manufacturing equipment and related items; and

9.) Establishes a Temporary General License (TGL) to minimize the short-term impact on the semiconductor supply chain by allowing specific, limited manufacturing activities related to items destined for use outside the PRC.

 

The rule was effective in phases after being filed for Public Inspection with the Federal Register. The semiconductor manufacturing items restrictions were effective upon filing for Public Inspection (October 7, 2022), the restrictions on U.S. persons’ ability to support the development, production, or use of ICs at certain PRC-located semiconductor fabrication “facilities” was effective five days later (October 12, 2022), and the advanced computing and supercomputer controls, as well as the other changes in the rule, was effective 14 days later (October 21, 2022). Additionally, public comments on all of these changes are due to BIS no later than 60 days from the date of Federal Register publication.

 

Editors Note: The requirements for compliance with the new rule is extremely complicated. If your company products or services in any way can be used in semiconductor manufacturing or advanced computing, please contract us for guidance before continuing business activities in China or Hong Kong.

 

Revisions to BIS’s Unverified List:

 

In the same rule making, BIS also updated its regulations related to BIS’s Entity List to clarify that a sustained lack of cooperation by the host government that effectively prevents BIS from determining compliance with the EAR may lead to the addition of an entity to the Entity List. The rule provides an example that stipulates that a sustained lack of cooperation by a foreign government that prevents BIS from verifying the bona fides of companies on the Unverified List (UVL) can result in those parties being moved to the Entity List.  If an end-use check is not timely scheduled and completed. All additions, removals, or revisions to the Entity List are still subject to the approval of the End-User Review Committee, which is made up of the Departments of Commerce, State, Defense, and Energy pursuant to existing rules. The rule adds 31 new entities to the UVL and removes nine entities that have met relevant requirements. Consistent with this regulatory change, Export Enforcement has issued a policy memorandum Addressing Foreign Government Prevention of End-Use Checks. The policy calls for adding parties to the Unverified List 60 days after checks are requested, but host government inaction prevents their completion and an additional 60-day process for adding UVL parties to the Entity List when there is a sustained lack of cooperation by a host government to facilitate completion of the checks.

 

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3158-2022-10-07-bis-press-release-advanced-computing-and-semiconductor-manufacturing-controls-final/file and https://www.federalregister.gov/documents/2022/10/13/2022-21658/implementation-of-additional-export-controls-certain-advanced-computing-and-semiconductor and https://www.federalregister.gov/documents/2022/10/13/2022-21714/revisions-to-the-unverified-list-clarifications-to-activities-and-criteria-that-may-lead-to

 

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BIS Adds 31 Persons To The Unverified List

 

October 14, 2022: 87 Fed. Reg 61971: The Department of Commerce, Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) by adding 31 persons to the Unverified List (UVL). The 31 persons were added to the UVL on the basis that BIS was unable to verify their bona fides because an end-use check could not be completed satisfactorily for reasons outside the U.S. Government’s control. All 31 persons are being added under the destination of the People’s Republic of China (China). This rule also removed nine persons, all under the destination of China, from the UVL because BIS was able to verify their bona fides. With this final rule, BIS also clarified the activities and criteria that may lead to the addition of an entity to the Entity List, including a sustained lack of cooperation by the host government (e.g., the government of the country in which an end-use check is to be conducted) that effectively prevents BIS from determining compliance with the EAR.

 

China

• Beijing Naura Magnetoelectric Technology Co., Ltd.;
• Beijing PowerMac Company;
• CCIC Southern Electronic Product Testing Co., Ltd.;
• Chang Zhou Jin Tan Teng Yuan Machinery Parts Co., Ltd.;
• Institute of Mineral Resources, Chinese Academy of Geological Sciences;
• Chinese Academy of Science (CAS) Institute of Chemistry;
• Chongqing Optel Telecom;
• Chongqing Xinyuhang Technology Co., Ltd.;
• Dandong Nondestructive Electronics;
• DK Laser Company Ltd.;
• Foshan Huaguo Optical Co., Ltd.;
• GRG Metrology & Test (Chongqing) Co., Ltd.;
• Guangdong Dongling Carbon Tech. Co., Ltd.;
• Guangxi Yuchai Machinery Co., Ltd.;
• Guangzhou GRG Metrology & Test (Beijing) Co., Ltd.;
• Jialin Precision Optics (Shanghai) Co., Ltd.;
• Lishui Zhengyang Electric Power Construction;
• Nanjing Gova Technology Co., Ltd.;
• Ningbo III Lasers Technology Co., Ltd.;
• Qingdao Sci-Tech Innovation Quality Testing Co., Ltd.;
• Shanghai Tech University;
• Suzhou Sen-Chuan Machinery Technology Co., Ltd.;
• Tianjin Optical Valley Technology Co., Ltd.;
• University of Chinese Academy of Sciences;
• University of Shanghai for Science and Technology;
• Vital Advanced Materials Co., Ltd.;
• Wuhan Institute of Biological Products Co., Ltd.;
• Wuhan Juhere Photonic Tech Co., Ltd.;
• Wuxi Hengling Technology Co., Ltd.;
• Xian Zhongsheng Shengyuan Technology Co., Ltd.; and
• Yangtze Memory Technologies Co., Ltd.

 

This final rule removed nine persons from the UVL after BIS was able to verify their bona fides. This rule removed:

 

• Anhui Institute of Metrology;
• Chuzhou HKC Optoelectronics Technology Co., Ltd.;
• Hefei Anxin Reed Precision Co. Ltd.;
• Hefei Institutes of Physical Science;
• Jiutian Intelligent Equipment Co. Ltd.;
• Suzhou Gyz Electronic Technology Co. Ltd.;
• Suzhou Lylap Mould Technology Co Ltd.;
• Wuxi Biologics Co., Ltd.; and
• Wuxi Turbine Blade Co., Ltd.

 

The inability of BIS to determine compliance with the EAR because of a host government’s action or inaction creates a circumstance that may place an entity at significant risk of being or becoming involved in activities contrary to the national security or foreign policy interests of the United States. For example, as previously mentioned, BIS frequently conducts end-use checks of foreign parties to verify their bona fides, thereby mitigating the risk of diversion of items subject to the EAR. If BIS is unable to conduct timely end-use checks, BIS’s ability to prevent diversion and resolve concerns about potentially problematic end uses and users is negatively impacted. The sustained and deliberate prevention of an end-use check by a foreign government is, therefore, contrary to the national security and foreign policy interests of the United States. Further, the inability of an entity to receive a timely end-use check could lead to the determination that it is at significant risk of involvement in activities contrary to U.S. national security or foreign policy interests, leading to concerns regarding its receipt of items subject to the EAR. To better reflect the nature of the risk presented by such entities, when the risk assessed is the result of the actions of the relevant host government authority rather than the actions of the entities themselves, BIS revised the heading of § 744.11, as well as the introductory text of § 744.11 and § 744.11(b), by adding language to also refer to entities that are “at significant risk” of acting contrary to the foreign policy and national security interests of the United States.

 

https://www.federalregister.gov/documents/2022/10/13/2022-21714/revisions-to-the-unverified-list-clarifications-to-activities-and-criteria-that-may-lead-to

 

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Samsung Electronics Co. Granted One-Year Exemption From BIS’ Export Controls On Advanced Computing And Semiconductor Manufacturing Items to the People’s Republic of China (PRC)

 

October 14, 2022: As reported in the Wall Street Journal,  Samsung Electronics Co. has been granted a one-year exemption from the new U.S. rules curbing China’s chip industry, joining a list of semiconductor companies that have received dispensation.

The U.S. Department of Commerce granted Samsung authorization to continue receiving chip-making equipment and other items needed to maintain its memory-chip production in China. The South Korean company operates chip facilities in two Chinese cities.

 

https://www.wsj.com/articles/samsung-gets-one-year-exemption-from-new-u-s-chip-restrictions-on-china-11665639994?page=1

 

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Department of the Treasury

 

List Of Countries That May Require Participation In An International Boycott

 

October 3, 2022: 87 Fed. Reg. 59866: In accordance with section 999(a)(3) of the Internal Revenue Code of 1986, the U.S. Department of the Treasury has published the following list of countries that require or may require participation in, or cooperation with, an international boycott (within the meaning of section 999(b)(3) of the Internal Revenue Code of 1986):

• Iraq;
• Kuwait;
• Lebanon;
• Libya;
• Qatar;
• Saudi Arabia;
• Syria; and
• Yemen.

 

https://www.federalregister.gov/documents/2022/10/03/2022-21397/list-of-countries-requiring-cooperation-with-an-international-boycott

 

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Census Bureau

 

Cancellation of the Advanced Export Information (AEI) Pilot Program

 

October 14, 2022: The Census Bureau’s Economic Management Division (EMD) announces that the Census Bureau, in cooperation with the U.S. Customs and Border Protection (CBP), has decided to cancel the Advanced Export Information (AEI) Pilot Program. This decision to eliminate the AEI pilot program as an AES filing option was made because the Census Bureau was unable to conduct sufficient analysis and evaluation of the pilot program due to a lack of adequate participation.

 

https://www.govinfo.gov/content/pkg/FR-2022-10-14/pdf/2022-21748.pdf?utm_campaign=&utm_content=&utm_medium=email&utm_source=govdelivery

 

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Disclosure Of Electronic Export Information (EEI) To Foreign Entities And Foreign Governments Is Not Permitted

 

October 27, 2022: Over the last several months, the U.S. Census Bureau (Census Bureau) has seen an increase in inquiries from foreign governments for copies of Electronic Export Information (EEI).  The Census Bureau has also received inquiries from Industry about specific countries requiring EEI-related documentation, such as the Internal Transaction Number (ITN).

The information contained in the EEI is confidential, pursuant to U.S. law (13 U.S.C. §301(g)). The specific confidentiality provisions on the release of the EEI are contained in the Foreign Trade Regulations (FTR), Title 15, Code of Federal Regulations, Section 30.60.  As stated in Section 30.60(c)(4) of the FTR, you may not provide the EEI to a foreign government for any purpose.

The EEI filing is required to satisfy U.S. regulatory requirements, not the needs of foreign governments.  In place of providing the EEI to the foreign government, it is acceptable to provide the ITN since it is not considered a data element as defined in Section 30.6 of the FTR.  However, if your shipment did not require EEI filing because the shipment was excluded or exempted from filing requirements, then the citation that was used in place of the ITN can be provided (i.e., post departure filing citation, AES downtime filing citation, and FTR exemption or exclusion).   Additionally, documents that do not have confidentiality restrictions, such as an invoice or commercial loading document, can be provided to the foreign government for shipment verification to occur.  Lastly, you can also provide the official response from the Census Bureau on letterhead indicating that EEI cannot be provided to foreign entities or governments under U.S. law, which is available below.

 

https://www.census.gov/foreign-trade/regulations/ftrletters/FTR_LETTERS_05182020.pdf?utm_campaign=&utm_content=&utm_medium=email&utm_source=govdelivery

 

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Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)

 

October 20, 2022: 87 Fed. Reg. 63800: The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Department of Justice (DOJ), submitted the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed collection OMB 1140-0005 (Application and Permit for Importation of Firearms, Ammunition, and Defense Articles (ATF6 permit)) is being revised due to minor material changes to the form, such as formatting and an additional sub question.

 

https://www.federalregister.gov/documents/2022/10/20/2022-22756/agency-information-collection-activities-proposed-ecollection-ecomments-requested-revision-of-a?utm_source=federalregister.gov&utm_medium=email&utm_campaign=subscription+mailing+list

 

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October 20, 2022: 87 Fed. Reg. 63799: The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Department of Justice (DOJ) submitted the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection (IC) OMB 1140-0011 (Application to Make and Register a Firearm—ATF Form 1 (5320.1) is being revised to include changes due to formatting, additional definitions, updates to the instructions, and additional sub-questions required to comply with the Bipartisan Safer Communities Act.

 

https://www.federalregister.gov/documents/2022/10/20/2022-22754/agency-information-collection-activities-proposed-ecollection-of-ecomments-requested-revision-of-a?utm_source=federalregister.gov&utm_medium=email&utm_campaign=subscription+mailing+list

 

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October 20, 2022: 87 Fed. Reg. 63801: The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Department of Justice (DOJ), submitted the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed collection OMB 1140-0055 (Identification of Explosive Materials) is being revised due to a reduction in the number of respondents, the total responses, and public burden hours associated with this IC, since the last renewal in 2019.

 

https://www.federalregister.gov/documents/2022/10/20/2022-22753/agency-information-collection-activities-proposed-ecollection-ecomments-requested-revision-of-a?utm_medium=email&utm_campaign=subscription+mailing+list&utm_source=federalregister.gov

 

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U.S. Congress

 

The House Proposes Moving The Department of Commerce Responsibilities To The Department of Defense

 

October 28, 2022: U.S. Congressmen Jim Banks, Robert Wittman, and Greg Steube introduced HR. 9241 proposing “Prioritizing National Security in Export Controls Act of 2022” to the Committee on Foreign Affairs and to the Committees on Armed Services, and Appropriations, for consideration of such provisions as fall within the jurisdiction of the committees.

 

The proposed Bill seeks the transfer of export control authorities from the Department of Commerce to the Department of Defense. The proposed Bill states, “It is the sense of Congress that export control authority should be taken away from the Bureau of Industry and Security of the Department of Commerce since the Bureau has manifestly been unable to resolve the conflict of interest between promoting trade and protecting United States national security through enforcing restrictions on technology transfer to high-risk countries, especially China.” The proposed Bill also seeks to restrict individuals employed in a Senior Executive Service position related to export control in the Department of Commerce, including the Bureau of Industry and Security, from transferring from such position to a position in the Defense Technology and Security Administration of the Department of Defense.

 

https://www.govtrack.us/congress/bills/117/hr9241/text?utm_source=sfmc&utm_medium=email&utm_campaign=&utm_term=China+Center+Update+10.31.22&utm_content=10/31/2022

 

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U.S. Defense Industry News

 

U.S. Next Generation Fighter To Be Developed Independently In U.S.

 

October 3, 2022: Unlike the F-35 program, which saw three US military branches and a handful of international partners involved in its creation, the US Air Force’s next-generation fighter will be developed independently, with many of its key attributes kept secret. However, Air Force officials have hinted there may be opportunities for the US and its allies to co-develop technologies that could be “associated” with future tactical aircraft — specifically the Collaborative Combat Aircraft (CCA) drones that will operate alongside the Next Generation Air Dominance (NGAD) manned fighter, as well as the mission systems inside the fighter itself.

 

https://breakingdefense.com/2022/10/on-next-generation-air-dominance-program-us-eyes-cooperation-with-allies/

 

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L3Harris Technologies Agreed To Buy Viasat’s Tactical Data Link Business

 

October 3, 2022: L3Harris Technologies agreed to buy Viasat’s tactical data link business for roughly $1.96 billion, a move officials with the defense and IT company say will extend its reach into the Pentagon’s ambitious communications overhaul known as Joint All-Domain Command and Control. The prospective acquisition consists of Link 16 Multifunctional Information Distribution System platforms, their associated terminals, which are installed in tens of thousands of U.S. and allied systems worldwide, and space assets.

 

https://www.defensenews.com/battlefield-tech/it-networks/2022/10/03/l3harris-to-buy-viasats-link-16-portfolio-expand-jadc2-offerings/

LATEST SANCTIONS FINES & PENALTIES

 

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

 

Sanctions

 

Department of State, Directorate of Defense Trade Controls (DDTC), Department of Commerce, Bureau of Industry and Security (BIS) and the Department of the Treasury, Office of Foreign Assets Control (OFAC)

 

October 14, 2022: The Department of State, Directorate of Defense Trade Controls (DDTC), Department of Commerce, Bureau of Industry and Security (BIS), and the Department of the Treasury, Office of Foreign Assets Control (OFAC) issued a joint statement on the impact of Sanctions and Export Controls on Russia and a summary of the actions they have taken. Since Russia’s unjustified and unprovoked invasion of Ukraine in February 2022, the United States has worked with allies and partners around the world to impose costs on Russia for its war of aggression. DDTC, BIS, and OFAC issued this joint alert to inform the public of the impact of sanctions and export control restrictions targeting Russia’s defense capabilities and warn of the risks of supporting Russia’s military-industrial complex.

 

See the following link for a copy of the statement:

 

https://home.treasury.gov/system/files/126/20221014_russia_alert.pdf

 

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Department of State, Bureau of International Security and Nonproliferation, State Department.

 

October 14, 2022: 87 Fed. Reg. 625484: The Department of State, Bureau of International Security and Nonproliferation, State Department has applied Section 3 of the Iran, North Korea, and Syria Nonproliferation Act against the following entities:

 

• Beijing J&A Industry & Trade Co. Ltd. (People’s Republic of China (PRC); and any successor, sub-unit, or subsidiary thereof;
• Linda Zhai (PRC individual);
• Synnat Pharma Pvt Ltd (India) and any successor, sub-unit, or subsidiary thereof; and
• OTOBOT Project Group (Turkey) and any successor, sub-unit, or subsidiary thereof.

 

Accordingly, pursuant to Section 3 of the Act, the following measures are imposed on these persons:

 

1. No department or agency of the U.S. government may procure or enter into any contract for the procurement of any goods, technology, or services from these foreign persons, except to the extent that the Secretary of State otherwise may determine;

 

2. No department or agency of the U.S. government may provide any assistance to these foreign persons, and these persons shall not be eligible to participate in any assistance program of the U.S. government, except to the extent that the Secretary of State otherwise may determine;

 

3. No U.S. government sales to these foreign persons of any item on the United States Munitions List are permitted, and all sales to these persons of any defense articles, defense services, or design and construction services under the Arms Export Control Act are terminated; and

 

4. No new individual licenses shall be granted for the transfer to these foreign persons of items the export of which is controlled under the Export Control Reform Act of 2018 or the Export Administration Regulations, and any existing such licenses are suspended.

 

https://www.federalregister.gov/documents/2022/10/14/2022-22347/imposition-of-nonproliferation-measures-against-foreign-persons-including-a-ban-on-united-states

 

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

 

October 4, 2022: 87 Fed. Reg. 60064: In response to the Russian Federation’s (Russia’s) further invasion of Ukraine on February 24, 2022, the illegal and unjustifiable basis of which has been furthered by its illegal purported annexation of regions of Ukraine, the Department of Commerce amended the Export Administration Regulations (EAR) by adding 57 entities under 57 entries to the Entity List. 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. Of these 57 entities, 56 will be listed on the Entity List under the destination of Russia and one will be listed under the destination of the Crimea Region of Ukraine.

 

Crimea Region of Ukraine:

 

• Subsidiary Sevastopol Naval Plant of Zvezdochka Shipyard.

 

Russia:

• A. Lyulki Experimental-Design Bureau;
• A. Lyulki Science and Technology Center;
• AO Aviaagregat;
• Central Aerohydrodynamic Institute;
• Closed Joint Stock Company Turborus;
• Federal Autonomous Institution Central Institute of Engine-Building N.A. P.I. Baranov;
• Federal State Budgetary Institution of Science P.I. K.A. Valiev RAS of the Ministry of Science and Higher Education of Russia;
• Federal State Budgetary Institution National Research Center Institute n.a. NE Zhukovsky;
• Federal State Unitary Enterprise All-Russian Research Institute of Physical, Technical and Radio Engineering Measurements;
• Federal State Unitary Enterprise State Scientific-Research Institute for Aviation Systems;
• Federal Technical Regulation and Metrology Agency;
• Institute of Physics Named After P.N. Lebedev of the Russian Academy of Sciences;
• Institute of Solid-State Physics of the Russian Academy of Sciences;
• Joint Stock Company 121 Aviation Repair Plant;
• Joint Stock Company 123 Aviation Repair Plant;
• Joint Stock Company 218 Aviation Repair Plant;
• Joint Stock Company 360 Aviation Repair Plant;
• Joint Stock Company 514 Aviation Repair Plant;
• Joint Stock Company 766 UPTK;
• Joint Stock Company Aramil Aviation Repair Plant;
• Joint Stock Company Aviaremont;
• Joint Stock Company Flight Research Institute N.A. M.M. Gromov;
• Joint Stock Company Metallist Samara;
• Joint Stock Company Moscow Machinebuilding Enterprise named after V.V. Chernyshev;
• Joint Stock Company NII Steel;
• Joint Stock Company Remdizel;
• Joint Stock Company Special Industrial and Technical Base Zvezdochka;
• Joint Stock Company STAR;
• Joint Stock Company Votkinsk Machine Building Plant;
• Joint Stock Company Yaroslavl Radio Factory;
• Joint Stock Company Zlatoustovsky Machine Building Plant;
• Limited Liability Company Center for Specialized Production OSK Propulsion;
• Lytkarino Machine-Building Plant;
• Moscow Aviation Institute;
• Moscow Institute of Thermal Technology;
• National Research Center Kurchatov Institute;
• Omsk Motor-Manufacturing Design Bureau;
• Open Joint Stock Company 20 Aviation Repair Plant;
• Open Joint Stock Company 32 Repair Plant of Flight Support Equipment;
• Open Joint Stock Company 170 Flight Support Equipment Repair Plant;
• Open Joint Stock Company 275 Aviation Repair Plant;
• Open Joint Stock Company 308 Aviation Repair Plant;
• Open Joint Stock Company 322 Aviation Repair Plant;
• Open Joint Stock Company 325 Aviation Repair Plant;
• Open Joint Stock Company 680 Aircraft Repair Plant;
• Open Joint Stock Company 720 Special Flight Support Equipment Repair Plant;
• Open Joint Stock Company Volgograd Radio-Technical Equipment Plant;
• Public Joint Stock Company Agregat;
• Russian Institute of Radio Navigation and Time;
• Rzhanov Institute of Semiconductor Physics, Siberian Branch of Russian Academy of Sciences;
• Salute Gas Turbine Research and Production Center;
• Scientific-Production Association Vint of Zvezdochka Shipyard;
• Scientific Research Institute of Applied Acoustics;
• Siberian Scientific-Research Institute of Aviation N.A. S.A. Chaplygin;
• Software Research Institute, and

• Tula Arms Plant.

 

https://www.federalregister.gov/documents/2022/10/04/2022-21520/additions-of-entities-to-the-entity-list

 

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October 20, 2022: 87 Fed. Reg. 63760: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued an Order renewing the Temporary Denial Order that it issued against Russian airline Avistar TU on April 21, 2022. The Office of Export Enforcement based its request for renewal upon the facts underlying the issuance of the initial TDO and the evidence developed over the course of this investigation, which indicate a blatant disregard for U.S. export controls, as well as the TDO. Specifically, the initial TDO, issued on April 21, 2022, was based on evidence that Aviastar engaged in conduct prohibited by the Regulations by operating multiple aircraft subject to the EAR and classified under ECCN 9A991.b on flights into Russia after March 2, 2022, from destinations including Hangzhou, China, Shenzhen, China, and Zhengzhou, China, without the required BIS authorization.

 

https://www.federalregister.gov/documents/2022/10/20/2022-22815/aviastar-tu-5-b-7-leningradsky-prospekt-g-moskva-125040-moscow-russia-order-renewing-temporary

 

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

 

October 3, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two individuals and one business entity in Bosnia and Herzegovina (BiH) pursuant to Executive Order (E.O.) 14033. These designations follow OFAC’s September 26, 2022, designation of a corrupt state prosecutor in BiH and build on other recent sanctions imposed on individuals and entities in the region. Collectively, these actions underscore the United States’ willingness to hold accountable those enabling divisive and destabilizing activities in the Western Balkans.

 

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

 

• Novalic, Fadil of Bosnia and Herzegovina; and
• Stankovic, Slobodan of Bosnia and Herzegovina.

 

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

 

• Integral Inzenjering A.D. Laktasi of Bosnia and Herzegovina.

 

https://home.treasury.gov/news/press-releases/jy0985 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221003

 

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October 6, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC)  designated seven senior leaders within Iran’s government and security apparatus for the shutdown of Iran’s Internet access and the continued violence against peaceful protesters in the wake of the tragic death of 22-year-old Mahsa Amini, who was arrested for allegedly wearing a hijab improperly, and died in the custody of Iran’s Morality Police. This action follows OFAC’s September 22 designation of Iran’s Morality Police, its senior leadership, and other senior leaders of Iran’s security organizations. Together with the release of Iran General License D-2, which authorizes exports of additional tools to assist Iranians in accessing the Internet, these designations demonstrate the United States’ commitment to free, peaceful assembly and open communication. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) also designated three individuals and one entity connected to Burma’s military regime pursuant to Executive Order (E.O.) 14014. Following the February 1, 2021, coup that overthrew Burma’s democratically elected civilian government, the military has committed numerous atrocities against people in Burma, including the violent repression of political dissent, the killing of over 2,300 innocent civilians, and displacement of more than 900,000 people.

 

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

 

• Javani, Yadollah of Iran;
• Majid, Vahid Mohammad Naser of Iran;
• Nejat, Hossein of Iran;
• Rahimi, Hossein of Iran;
• Sajedinia, Hossein of Iran;
• Zarepour, Eisa of Iran;
• Myint, Aung Moe of Burma;
• Myint, Hlaing Moe of Burma; and
• Thitsar, Myo of Burma.

 

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

 

• Dynasty International Company Limited of Burma.

 

https://home.treasury.gov/news/press-releases/jy0994 and https://home.treasury.gov/news/press-releases/jy0996 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221006

 

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October 7, 2022:  The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two individuals and three entities for activities related to the exportation of petroleum to the Democratic People’s Republic of Korea (DPRK), which directly supports the development of DPRK weapons programs and its military. This action highlights the U.S. Government’s commitment to implement existing United Nations Security Council resolutions (UNSCRs), including holding the DPRK accountable for its use of illicit ship-to-ship (STS) transfers to circumvent UN sanctions that restrict the import of petroleum products and supports the development of its weapons programs and military.

 

OFAC also designated Malaysian national Teo Boon Ching, the Teo Boon Ching Wildlife Trafficking Transnational Criminal Organization (TCO), and the Malaysian company Sunrise Greenland Sdn. Bhd. for the cruel trafficking of endangered and threatened wildlife and the products of brutal poaching. Teo Boon Ching specializes in the transportation of rhino horn, ivory, and pangolins from Africa, generally utilizing routes through Malaysia and Laos and onward to consumers in Vietnam and China.

 

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

 

• Chen, Shih Huan of Taiwan;
• Ching, Teo Boon of Malaysia; and
• Kwek, Kee Seng of Singapore.

 

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

 

• Anfasar Trading S PTE. LTD. of Singapore;
• New Eastern Shipping Co LTD of Singapore and China;
• Sunrise Greenland SDN. BHD of Malaysia;
• Swanseas Port Services PTE. LTD. of Signapore; and
• Teo Boon Ching Wildlife Trafficking Transnational Criminal Organization of Malaysia, Thailand, Laos, Vietnam, China and Hong Kong.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221007 and https://home.treasury.gov/news/press-releases/jy1000 and https://home.treasury.gov/news/press-releases/jy1001

 

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October 14, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) published the following new Russia Frequently Asked Questions:

 

Question 1092: Do non-U.S. companies risk exposure to sanctions for providing ammunition or other military goods to Russia or for supporting Russia’s military-industrial complex? 

 

Answer: Yes.  Multiple Russia-related sanctions authorities authorize sanctions against non-U.S. persons that provide goods, services, or other support for Russia’s military-industrial complex.  For example, OFAC may block any person determined to operate or have operated in the defense and related materiel sector of the Russian Federation economy pursuant to Executive Order (E.O.) 14024 of April 15, 2021, “Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation.”  In addition, pursuant to E.O. 14024, OFAC may block persons determined to have materially assisted, sponsored, or provided financial, material, or technological support for or goods or services to or in support of certain sanctionable activities enumerated in E.O. 14024 or any person whose property and interests in property are blocked pursuant to E.O. 14024.  OFAC also has robust targeting authorities pursuant to the Ukraine-/Russia-Related Sanctions Regulations (URSR), 31 C.F.R. part 589, which implement multiple authorities that could provide for the blocking of persons who engage in the provision of ammunition or other military goods to the Russian Federation, including persons determined to operate or have operated in the arms or related materiel sector of the Russian Federation economy, or those who have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of persons blocked pursuant to the URSR.

 

OFAC is prepared to use its broad targeting authorities against non-U.S. persons that provide ammunition or other support to the Russian Federation’s military-industrial complex, as well as private military companies (PMCs) or paramilitary groups participating in or otherwise supporting the Russian Federation’s unlawful and unjustified attack on Ukraine.  OFAC will continue to target Russia’s efforts to resupply its weapons and sustain its war of aggression against Ukraine, including any foreign persons who assist the Russian Federation in those efforts.

 

OFAC and the Department of State have imposed numerous targeted sanctions on the Russian Federation’s military-industrial complex, including on State Corporation Rostec, the cornerstone of Russia’s defense-industrial base, and multiple other key firms.  In addition, the Department of State has identified persons that are part of, or operate for or on behalf of, the defense and intelligence sectors of the Government of the Russian Federation pursuant to Section 231 of the Countering America’s Adversaries Through Sanctions Act (CAATSA) (CAATSA 231 List of Specified Persons).  Persons determined to knowingly engage in a significant transaction with those identified on the CAATSA 231 List of Specified Persons are subject to five or more sanctions described in Section 235 of CAATSA.  The Department of Commerce’s Bureau of Industry and Security (BIS) has also imposed highly restrictive controls on the export and reexport of U.S.-origin and certain foreign-produced commodities, software, and technologies to the Russian Federation to cut off its access to inputs and products needed to sustain its military capabilities.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1092

 

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October 13, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) published one sectoral determination issued pursuant to an April 15, 2021, Executive order, as well as a category of services determination issued pursuant to an April 6, 2022, Executive order. Each determination was previously issued on OFAC’s website. On April 15, 2021, the President, invoking the authority of, inter alia, the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), issued Executive Order (E.O.) 14024 (86 FR 20249, April 19, 2022). Among other prohibitions, section 1(a) of E.O. 14024 blocks, with certain exceptions, all property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of any U.S. person of, any person determined by the Secretary of the Treasury, in consultation with the Secretary of State: (i) to operate or have operated in the technology sector or the defense and related materiel sector of the Russian Federation economy, or any other sector of the Russian Federation economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State. On April 6, 2022, the President, invoking the authority of, inter alia, IEEPA, issued E.O. 14071 of April 6, 2022, “Prohibiting New Investment in and Certain Services to the Russian Federation in Response to Continued Russian Federation Aggression” (87 FR 20999, April 8, 2022). Among other prohibitions, section 1(a)(ii) of E.O. 14071 prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any category of services as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State, to any person located in the Russian Federation. On September 15, 2022, pursuant to delegated authority, the Director of OFAC, in consultation with the Department of State, issued a sectoral determination pursuant to E.O. 14024. This determination took effect upon publication on OFAC’s website, which occurred on September 15, 2022. Also, on September 15, 2022, pursuant to delegated authority, the Director of OFAC, in consultation with the Department of State, issued a category of services determination pursuant to E.O. 14071.

 

https://www.federalregister.gov/documents/2022/10/13/2022-22162/publication-of-russian-harmful-foreign-activities-sanctions-regulations-determinations

 

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October 13, 2022: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) published the following General licenses:

 

General License D-2 (87 Fed. Reg. 62003):

 

General License With Respect to Certain Services, Software, and Hardware Incident to Communications

(a) To the extent that such transactions are not exempt from the prohibitions of the Iranian Transactions and Sanctions Regulations, 31 CFR part 560 (ITSR), and subject to the restrictions set forth in paragraph (b), the following transactions are authorized:

(1) Fee-based or no-cost services. The exportation or reexportation, directly or indirectly, from the United States or by a U.S. person, wherever located, to Iran of fee-based or no-cost 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, and user authentication services, as well as cloud-based services in support of the foregoing or of any other transaction, authorized or exempt under the ITSR.

(2) Fee-based or no-cost software. (i) Software subject to the EAR. The exportation, reexportation, or provision, directly or indirectly, to Iran of fee-based or no-cost software subject to the Export Administration Regulations, 15 CFR parts 730 through 774 (EAR), that is incident to, or enables 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, and user authentication services, as well as cloud-based services in support of the foregoing or of any other transaction authorized or exempt under the ITSR, provided that such software is designated EAR99 or classified by the U.S. Department of Commerce on the Commerce Control List, 15 CFR part 774, supplement No. 1 (CCL), under export control classification number (ECCN) 5D992.c.

(ii) Software that is not subject to the EAR because it is of foreign origin and is located outside the United States. The exportation, reexportation, or provision, directly or indirectly, by a U.S. person, wherever located, to Iran of fee-based or no-cost software that is not subject to the EAR because it is of foreign origin and is located outside the United States, that is incident to, or enables 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, and user authentication services, as well as cloud-based services in support of the foregoing or of any other transaction authorized or exempt under the ITSR, provided that such software would be designated EAR99 if it were located in the United States or would meet the criteria for classification under ECCN 5D992.c if it were subject to the EAR.

 

https://www.federalregister.gov/documents/2022/10/13/2022-22233/publication-of-iranian-transactions-and-sanctions-regulations-web-general-license-d-2

 

General License 13B (87 Fed. Reg. 62005):

 

Authorizing Certain Administrative Transactions Prohibited by Directive 4 Under Executive Order 14024

 

(a) Except as provided in paragraph (b) of this general license, 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, or certifications, to the extent such transactions are prohibited by Directive 4 under Executive Order (E.O.) 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation, provided such transactions are ordinarily incident and necessary to the day-to-day operations in the Russian Federation of such U.S. persons or entities, through 12:01 a.m. eastern standard time, December 7, 2022.

 

(b) This general license does not authorize:

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

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

(c) Effective September 8, 2022, General License No. 13A, dated May 25, 2022, is replaced and superseded in its entirety by this General License No. 13B.

 

https://www.federalregister.gov/documents/2022/10/13/2022-22236/publication-of-russian-harmful-foreign-activities-sanctions-regulations-web-general-license-13b

 

General License 3 (87 Fed. Reg. 62005):

 

Authorizing Transactions Related to, Provision of Financing for, and Other Dealings in Certain Bonds.

 

(a) Except as provided in paragraph (c) of this general license, all transactions related to, the provision of financing for, and other dealings in bonds specified in the Annex to this general license that would be prohibited by Subsection l(a)(iii) of Executive Order of August 24, 2017, “Imposing Additional Sanctions with Respect to the Situation in Venezuela,” are authorized.

(b) Except as provided in paragraph (c) of this general license, all transactions related to, the provision of financing for, and other dealings in bonds that were issued both (i) prior to the effective date of Executive Order of August 24, 2017, and (ii) by U.S. person entities owned or controlled, directly or indirectly, by the Government of Venezuela, are authorized.

(c) This general license does not authorize any transaction that is otherwise prohibited by Executive Order of August 24, 2017, Executive Order 13692 of March 8, 2015, or any part of 31 CFR chapter V.

 

https://www.federalregister.gov/documents/2022/10/13/2022-22198/publication-of-venezuela-sanctions-regulations-web-general-license-3-and-subsequent-iterations

 

General License 9 (87 Fed. Reg. 62020):

 

Authorizing Transactions Related to Dealings in Certain Debt.

 

(a) Except as provided in paragraph (d) of this general license, all transactions and activities prohibited by Section 1(a)(iii) of Executive Order 13808 (E.O. 13808) or Executive Order 13850 that are ordinarily incident and necessary to dealings in any debt (including the bonds listed on the Annex to this general license, promissory notes, and other receivables) of Petróleos de Venezuela, S.A. (PdVSA) or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest (together, PdVSA-related debt), issued prior to August 25, 2017 (the effective date of E.O. 13808), are authorized, provided that any divestment or transfer of, or facilitation of divestment or transfer of, any holdings in such debt must be to a non-U.S. person.

 

(b) The transactions and activities authorized in paragraph (a) include facilitating, clearing, and settling transactions to divest to a non-U.S. person PdVSA-related debt, including on behalf of U.S. persons.

 

(c) Except as provided in paragraph (d) of this general license, all transactions and activities prohibited by Section 1(a)(iii) of E.O. 13808 that are ordinarily incident and necessary to dealings in any bonds that were issued prior to August 25, 2017 (the effective date of E.O. 13808) by the following entities or any of their subsidiaries, are authorized:

• PDV Holdings, Inc.
• CITGO Holdings, Inc.
• Nynas AB

 

(d) This general license does not authorize:

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

(2) U.S. persons to sell PdVSA-related debt to, to purchase or invest in the debt of, or to facilitate such transactions with, directly or indirectly, any person whose property and interests in property are blocked pursuant to E.O. 13850, including PdVSA and any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, other than purchases of or investments in PdVSA-related debt (including settlement of purchases or sales that were pending on January 28, 2019) that are ordinarily incident and necessary to the divestment or transfer of PdVSA-related debt;

(3) Any transaction that is otherwise prohibited under Executive Order 13850 of November 1, 2018, Executive Order 13835 of May 21, 2018, Executive Order 13827 of March 19, 2018, Executive Order 13808 of August 24, 2017, Executive Order 13692 of March 8, 2015, or any part of 31 CFR chapter V, or any transactions or dealings with any blocked person other than the transactions described in paragraph (a) of this general license.

 

https://www.federalregister.gov/documents/2022/10/13/2022-22197/publication-of-venezuela-sanctions-regulations-web-general-license-9-and-subsequent-iterations

 

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October 17, 2022: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 28A.

 

General License 28A: Authorizing Certain Transactions Involving Public Joint Stock Company Transkapitalbank and Afghanistan. All transactions involving Public Joint Stock Company Transkapitalbank (TKB), or any entity in which TKB owns, directly or indirectly, a 50 percent or greater interest, that are ultimately destined for or originating from Afghanistan and prohibited by Executive Order (E.O.) 14024 are authorized through 12:01 a.m. eastern standard time, January 18, 2023.

 

U.S. financial institutions are authorized to operate correspondent accounts on behalf of TKB, or any entity in which TKB owns, directly or indirectly, a 50 percent or greater interest, provided such accounts are used solely to effect transactions authorized above.

 

This general license does not authorize:

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

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

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

 

https://home.treasury.gov/system/files/126/russia_gl28a.pdf

 

In addition, OFAC has updated the following lists:

 

The following individuals have been added to OFAC’s Specially Designated Nationals List:

 

• Adale, Khalif of Somlia and Djibouti;
• Aden, Mohamoud Abdi of Somalia and Kenya;
• Afgooye, Hassan of Somalia;
• Ato, Mustaf of Somalia;
• Badaas, Mohamed Ali of Yemen;
• Gagaale, Abdikarim Hussein of Somalia;
• Jeeri, Abdullahi of Somalia;
• Jiis, Yasir of Somalia;
• Mataan, Ahmed Hasan Ali Sulaiman of Yemen;
• Mire, Mohamed, Jilib of Somalia;
• Nurey, Abdirahman of Somalia;
• Nurow, Yusuf Ahmed Hajji of Somalia;
• Salad, Mohamed Hussein, Al Mukalla of Yemen; and
• Samad, Abdi of Somalia.

 

The following deletions have been made to OFAC’s SDN List:

 

• Micallef, Terence of Malta.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221017

 

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October 19, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Juan Francisco Valenzuela Valenzuela and the Valenzuela Drug Trafficking Organization (“Valenzuela DTO”), among others, pursuant to Executive Order (E.O.) 14059. Originally established as a transportation cell, the Valenzuela DTO evolved into a sophisticated network that became invaluable to Sinaloa Cartel leadership. Named after the family who facilitated its rise to prominence, the Valenzuela DTO was run by siblings Jorge Alberto, Wuendi Yuridia, and Juan Francisco Valenzuela Valenzuela in recent years. Following the arrests of Jorge Alberto and Wuendi Yuridia by U.S. authorities in October 2020 and November 2021, respectively, Juan Francisco Valenzuela Valenzuela is the last remaining sibling involved in the Valenzuela DTO’s operations in Mexico. Operating under the umbrella of the Sinaloa Cartel, the Valenzuela DTO is involved in the importation and transport of multi-ton quantities of illicit drugs, including methamphetamine, heroin, and fentanyl, from Mexico to the United States.

 

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

 

• Araujo Peralta of Mexico;
• Rivas Chaires of Mexico; and
• Valenzuela Valenzuela of Mexico.

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

 

• ARFEL Transportadora Cool Logistic, S.A. DE C.V. of Mexico;
• Servicios De Transporte Maruha, Sociedad Anonima De Capital Variable of Mexico;
• Transportes Refrigerados Pandas Trucking, Sociedad Anonima De Capital Variable of Mexico; and
• Valenzuela Drug Trafficking Organization of Mexico.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221019 and https://home.treasury.gov/news/press-releases/jy1034

 

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October 19, 2022: In coordination with the U.S. Department of Justice and the Federal Bureau of Investigation (FBI), the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated a Russian network that procured military and sensitive dual-use technologies from U.S. manufacturers and supplied them to Russian end-users.

 

Those designated are Russian national and procurement agent Yury Yuryevich Orekhov (Orekhov) and two of his companies, Nord-Deutsche Industrieanlagenbau GmbH (NDA GmbH) and Opus Energy Trading LLC (Opus Energy Trading). These designations highlight the U.S. government’s continuing efforts to hinder Russia’s ability to wage its war of aggression in Ukraine, including by holding accountable those who support Russia’s military by disrupting its illicit defense and technology procurement networks around the world.

 

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

 

OREKHOV, Yury Yuryevichof the United Arab Emirates, Kazakhstan, and Russia.

 

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

 

• Nda Nord-Deutsche Industrieanlagenbau GMBH of Germany; and
• Opus Energy Trading LLC of the United Arab Emirates.

 

https://home.treasury.gov/news/press-releases/jy1035 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221019_33

 

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October 24, 2022:  The U.S. Department of the Treasury (Treasury) Office of Foreign Assets Control (OFAC) designated the Nicaraguan mining authority General Directorate of Mines (DGM) as well as one official of the Government of Nicaragua, pursuant to Executive Order (E.O.) 13851.

 

Additionally, President Biden signed a new E.O. that amends E.O. 13851 and expands the Treasury’s authority to hold the Ortega-Murillo regime accountable for its continued attacks on Nicaraguans’ freedom of expression and assembly. Furthermore, the new E.O. gives Treasury the authority to target certain persons that operate or have operated in the gold sector of the Nicaraguan economy, and any other sector identified by the Secretary of the Treasury in consultation with the Secretary of State. The new E.O. also provides expanded sanctions authorities that could be used to prohibit new U.S. investment in certain identified sectors in Nicaragua, the importation of certain products of Nicaraguan origin into the United States, or the exportation from the United States, or by a United States person, wherever located, of certain items to Nicaragua.

 

The following names have been added to OFAC’s list of Specially Designated Nationals:

 

• Cerna Juarez, Reinaldo Gregorio Lenin of Nicaragua.

 

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

 

• General Directorate Of Mines of Nicaragua.

 

Nicaragua General License 4: All transactions ordinarily incident and necessary to the wind-down of any transaction involving the Directorate General of Mines (DGM) of the Nicaraguan Ministry of Energy and Mines, or any entity in which DGM owns, directly or indirectly, a 50 percent or greater interest that are prohibited by the Nicaragua Sanctions Regulations, 31 CFR part 582 (NSR), are authorized through 12:01 a.m. eastern standard time, November 23, 2022, provided that any payment to a blocked person must be made into a blocked account in accordance with the NSR. This general license does not authorize any transactions otherwise prohibited by the NSR, including transactions involving any person blocked pursuant to the NSR, other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.

 

https://home.treasury.gov/news/press-releases/jy1046 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221024 and https://home.treasury.gov/system/files/126/14088.pdf and https://home.treasury.gov/system/files/126/nicaragua_gl4.pdf and

 

OFAC issued the following Nicaragua Sanctions related to Frequently Asked Questions:

 

Question 1093: What does Nicaragua General License (GL) 4 authorize?

 

Answer: Nicaragua GL 4  authorizes U.S. persons to engage in transactions prohibited by the Nicaragua Sanctions Regulations, 31 CFR part 582 (the NSR), that are ordinarily incident and necessary to the wind-down of any transaction involving the Directorate General of Mines (DGM) of the Nicaraguan Ministry of Energy and Mines, or any entity in which DGM owns, directly or indirectly, a 50 percent or greater interest (collectively, “Blocked DGM Entities”), through 12:01 a.m. eastern standard time, November 23, 2022, provided that any payment to a blocked person must be made into a blocked account in accordance with the NSR.

 

After the expiration of this authorization, unless exempt or authorized by the Office of Foreign Assets Control, U.S. persons will be prohibited from engaging in transactions with the Blocked DGM Entities and must block property or interests in property of any Blocked DGM Entities that are in, or thereafter come within, the United States, or the possession or control of a U.S. person.

 

Non-U.S. persons generally do not risk exposure to U.S. blocking sanctions under the NSR for engaging in transactions with blocked persons where those transactions would not require a specific license if engaged in by a U.S. person.

 

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October 26, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 10 Iranian officials for the brutal ongoing crackdown on nationwide protests in Iran, as well as two Iranian intelligence actors and two Iranian entities involved in the Iranian government’s efforts to disrupt digital freedom. This action comes 40 days after 22-year-old Mahsa Amini’s arrest and death in the custody of Iran’s Morality Police and the ongoing brutal crackdown on peaceful protests in Iran and follows OFAC designations on September 22 and October 6, 2022, which targeted key Iranian organizations and officials involved in the Iranian regime’s ongoing repression and its denial of the fundamental freedoms and universal rights of its citizens. These sanctions, coupled with additional initiatives such as the release of Iran General License D-2, which expands and clarifies the range of U.S. software and internet services available to Iranians under OFAC’s sanctions program, demonstrate the United States’ commitment to supporting the Iranian people’s call for accountability and justice, as well as their right to freely exchange information, including online.

 

OFAC also took action to counter the Government of the Russian Federation’s (GoR) persistent malign influence campaigns and systemic corruption in Moldova by imposing sanctions on nine individuals and 12 entities. The individuals and entities sanctioned include oligarchs widely recognized for capturing and corrupting Moldova’s political and economic institutions and those acting as instruments of Russia’s global influence campaign, which seeks to manipulate the United States and its allies and partners, including Moldova and Ukraine. The designations include former Moldovan government official Vladimir Plahotniuc, who engaged in state capture by exerting control over and manipulating key sectors of Moldova’s government, including the law enforcement, electoral, and judicial sectors.

 

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

 

• Al-Ghaib, Seyyed Heshmatollah Hayat of Iran;
• Chayka, Igor Yuryevich of Russia;
• Farzadi, Hedayat of Iran;
• Fathi, Murad of Iran;
• Gonin, Leonid Mikhailovich of Russia;
• Grak, Olga Yurievna of Russia;
• Gudilin, Yuriy Igorevich of Russia;
• Karimi, Farzin of Iran;
• Kazemi, Mohammad of Iran;
• Khiabani, Hossein Modarres of Iran;
• Khosravi, Mohammad Hossein of Iran;
• Mirheydary, Mohammad Reza of Iran;
• Mostafavi, Seyed Mojtaba of Iran;
• Nilforushan, Abbas of Iran;
• Ostad, Mohammad Reza of Iran;
• Pasandideh, Heidar of Iran;
• Piri, Morteza of Iran;
• Plahotniuc, Vladimir of Cyprus, Romania and Maldova;
• Shafahi, Ahmad of Iran;
• Shor, Ilan Mironovich of Israel and Moldova;
• Shor, Sara Lvovna or Russia;
• Troshin, Aleksei Valeryevich or Russia;
• Zavorotnyi, Ivan Aleksandrovich of Russia.

 

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

 

• Aktsionernoe Obshchestvo Natsionalnaya Inzhiniringovaya Korporatsiya of Russia;
• Bushehr Prison of Iran;
• OOO Agro-Region of Russia;
• OOO Aqua Solid of Russia;
• OOO BM Proekt-Ekologiya of Russia;
• OOO Ekogrupp of Russia;
• OOO Innovatsii Sveta of Russia;
• OOO Inzhiniring.RF of Russia;
• OOO Khartiya of Russia;
• OOO Kompaniya Zolotoi Vek of Russia;
• OOO Mezhmunitsipalnoe ATP of Russia;
• OOO Region-Comfort of Russia;
• Ravin Academy of Iran;
• Samane Gostar Sahab Pardaz Private Limited Company of Iran; and
• Shor Party of Russia.

 

https://home.treasury.gov/news/press-releases/jy1048 and https://home.treasury.gov/news/press-releases/jy1049 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221026

 

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October 28, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action against the 15 Khordad Foundation, an Iran-based foundation that has issued a multi-million-dollar bounty for the killing of prominent Indian-born, British-American author Salman Rushdie. Since Ayatollah Ruhollah Khomeini’s order pronouncing a death sentence on Rushdie in February 1989, 15 Khordad Foundation has committed millions of dollars to anyone willing to carry out this heinous act. Since putting its bounty on Rushdie, the 15 Khordad Foundation, which is affiliated with the Supreme Leader, has raised the reward for targeting the author.

 

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

 

• 15 Khordad Foundation of Iran.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221028

 

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October 31, 2022: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is publishing a Russia-related Frequently Asked Question (1094).

 

Question 1094: Is crude oil of Russian Federation origin that is loaded onto a vessel at the port of loading for maritime transport prior to December 5, 2022, subject to the price cap?  

 

Answer: No, provided the oil is unloaded at the port of destination prior to 12:01 a.m., eastern standard time, January 19, 2023.  Crude oil of Russian Federation origin that is loaded onto a vessel at the port of loading prior to 12:01 a.m., eastern standard time, December 5, 2022, and unloaded at the port of destination prior to 12:01 a.m., eastern standard time, January 19, 2023, is not subject to the price cap (also known as the “maritime services policy”).  U.S. service providers can continue to provide services related to the maritime transport of crude oil of Russian Federation origin purchased at a price above the price cap, provided that the crude oil is loaded onto a vessel at the port of loading for maritime transport prior to 12:01 a.m., eastern standard time, December 5, 2022, and unloaded at the port of destination prior to 12:01 a.m., eastern standard time, January 19, 2023.

The following is an example of a permissible transaction in line with the maritime service’s policy:

• A U.S. commodities trader signs a contract on November 1, 2022, to purchase crude oil of Russian Federation origin for shipment to a jurisdiction that has not prohibited the import of such crude oil.  The U.S. commodities trader arranges for the oil to be loaded onto a vessel at the port of loading.  The vessel is loaded on December 1, 2022, and a bill of lading is issued.  The oil is shipped and discharged at the port of destination on December 15, 2022.  U.S. insurance companies provide cover for this shipment/voyage and pay out any related claims, as appropriate.

 

As noted in OFAC’s preliminary guidance, OFAC anticipates implementing the maritime service’s policy by publishing a determination pursuant to Executive Order 14071 that (i) permits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States or by a United States person, wherever located, of services related to the maritime transport of crude oil or petroleum products of Russian Federation origin, where the price of such crude oil or petroleum products of Russian Federation origin does not exceed the price cap and (ii) prohibits such services if the crude oil or petroleum products of Russian Federation origin are purchased above the price cap.  This determination would take effect at 12:01 a.m., eastern standard time, December 5, 2022, with respect to maritime transport of crude oil of Russian Federation origin loaded on or after 12:01 a.m., eastern standard time, December 5, 2022.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1094

 

Fines and Penalties

 

October 11, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) settled with Bittrex, Inc., a private company based in Bellevue, Washington, that provides online virtual currency exchange and hosted wallet services.  Bittrex agreed to remit $24,280,829.20 to settle its potential civil liability for apparent violations of sanctions against Cuba, Ukraine-related, Iran, Sudan, and Syria.  As a result of deficiencies related to Bittrex’s sanctions compliance procedures, Bittrex failed to prevent persons apparently located in the sanctioned jurisdictions from using its platform to engage in over $263,000,000 worth of virtual currency-related transactions.  Based on internet protocol (“IP”) address information and physical address information collected about each customer at onboarding, Bittrex had reason to know that these users were located in jurisdictions subject to sanctions.  At the time of the transactions, however, Bittrex was not screening this customer information for terms associated with sanctioned jurisdictions.

 

The statutory maximum civil monetary penalty applicable in this matter is $35,773,364,108.57. OFAC determined that the Apparent Violations were not voluntarily self-disclosed and were non-egregious. Accordingly, under OFAC’s Economic Sanctions Enforcement Guidelines (“Enforcement Guidelines”), the base civil monetary penalty amount applicable in this matter equals the applicable schedule amount, which is $485,616,584.00. The settlement amount of $24,280,829.20 reflects OFAC’s consideration of the General Factors under the Enforcement Guidelines.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221011 and https://home.treasury.gov/system/files/126/20221011_bittrex.pdf

 

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October 11, 2022: A U.K. national, Graham Bonham-Carter, 62, was arrested for conspiracy to violate U.S. sanctions imposed on Russian Oligarch Oleg Vladimirovich Deripaska and wire fraud in connection with funding U.S. properties purchased by Deripaska and efforts to expatriate Deripaska’s artwork in the United States through misrepresentations. The U.S. government will seek his extradition to the United States. Deripaska was previously charged with U.S. sanctions violations in an indictment unsealed on Sept. 29.

 

On April 6, 2018, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) designated Deripaska as a Specially Designated National (SDN), in connection with its finding that the actions of the Government of the Russian Federation with respect to Ukraine constitute an unusual and extraordinary threat to U.S. national security and foreign policy (the OFAC Sanctions). According to the U.S. Treasury, Deripaska was sanctioned for having acted or purported to act on behalf of, directly or indirectly, a senior official of the Government of the Russian Federation and for operating in the energy sector of the Russian Federation economy.

According to court documents, Graham Bonham-Carter, 62, of the United Kingdom, worked for entities controlled by Deripaska from July 2003 through the present. Among other things, Bonham-Carter managed Deripaska’s residential properties located in the United Kingdom and Europe, including a house in Belgravia Square, London. Even after OFAC designated Deripaska, Bonham-Carter continued to work for Deripaska and referred to Deripaska as his “boss.” For example, in an email dated on or about June 18, 2018, Bonham-Carter wrote: “Times a bit tough for my boss as sanctions have hit him from the USA, so not an ideal time.” In an email dated on or about Oct. 13, 2021, Bonham-Carter wrote: “It[’]s all good apart from banks keep shutting me down because of my affiliation to my boss Oleg Deripaska…. I have even been advised not to go to the USA where Oleg still has personal sanctions as the authorities will undoubtedly pull me to one side, and the questioning could be hours or even days!!”

 

https://www.justice.gov/opa/pr/uk-businessman-graham-bonham-carter-indicted-sanctions-evasion-benefitting-russian-oligarch

 

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October 13, 2022: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order temporarily denying the export privileges of URAL Airlines JSC headquartered in Yekaterinburg, Russia. The Order is based on facts indicating that URAL engaged in conduct prohibited by the Export Administration Regulations (EAR) by operating multiple aircraft subject to the EAR and classified under ECCN 9A991 on international flights, including from Bishkek, Kyrgyzstan; Dushanbe, Tajikistan; Khudzhand, Tajikistan and Tamchy, Kyrgyzstan to Russia after March 2, 2022, without the required BIS authorization.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1416-e2759/file

 

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October 17, 2022:  Intertech Trading Corporation, an Atkinson, New Hampshire-based laboratory equipment distributor, was sentenced in federal court after pleading guilty to 14 felony counts of failure to file export information on shipments to Russia and Ukraine, United States Attorney Jane E. Young announced. Judge Paul Barbadoro ordered that Intertech pay the maximum allowable fine of $10,000 per count, for a total of $140,000, and be subject to a two-year term of corporate probation and monitoring.

According to court documents and statements made in court, between 2015 and 2019, Intertech exported laboratory equipment to Russia, Ukraine, and elsewhere, falsely describing the nature and value of the exported items on commercial invoices and shipping forms. In its plea agreement, Intertech admitted that it used false, innocuous descriptions such as “lamp for aquarium” or “spares for welding system,” rather than accurately identifying the sophisticated scientific equipment actually contained in the shipments. Intertech admitted that it drastically undervalued the shipments, thereby evading the requirement to file Electronic Export Information, which would have been reported to the Departments of Commerce and Homeland Security.

 

https://www.justice.gov/usao-nh/pr/intertech-trading-corp-sentenced-pay-140000-14-felony-counts-failure-file-export

 

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October 18, 2022: A global building materials manufacturer and its subsidiary, Lafarge S.A., headquartered in Paris, France, and Lafarge Cement Syria (LCS) S.A., headquartered in Damascus, Syria, pleaded guilty to a one-count criminal information charging them with conspiring to provide material support and resources in Northern Syria from 2013 to 2014 to the Islamic State of Iraq and al-Sham (ISIS) and the al-Nusrah Front (ANF), both U.S.-designated foreign terrorist organizations. Immediately following the defendants’ guilty pleas this morning, the defendants were sentenced to terms of probation and to pay financial penalties, including criminal fines and forfeiture, totaling $77.78 million. According to court documents, Lafarge S.A. and Lafarge Cement Syria (LCS) S.A., schemed to pay ISIS and ANF in exchange for permission to operate a cement plant in Syria from 2013 to 2014, which enabled LCS to obtain approximately $70.3 million in revenue.

 

https://www.justice.gov/opa/pr/lafarge-pleads-guilty-conspiring-provide-material-support-foreign-terrorist-organizations

 

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October 18, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued a Finding of Violation (FoV) to Nodus International Bank, Inc. (Nodus), an international financial entity located in Puerto Rico, for violations of the Venezuelan Sanctions Regulations (VSR) and the Reporting, Penalties, and Procedures Regulations (RPPR). The VSR violations related to Nodus’s voluntary self-disclosure of three unlicensed transactions in which an individual (the “blocked person”) on OFAC’s List of Specially Designated Nationals and Blocked Persons (the “SDN List”) had an interest. The RPPR violations reflected Nodus’s failure to maintain full and accurate records related to the handling of blocked property and its inaccurate reporting of the blocked property to OFAC. OFAC determined that the appropriate administrative action in this matter was an FoV in lieu of a civil monetary penalty. This action emphasizes that financial institutions should properly maintain blocked property and records, report such information accurately to OFAC, and obtain a specific license from OFAC in order to deal in blocked property.

 

https://home.treasury.gov/system/files/126/20221018_nodus.pdf and

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221018

 

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October 19, 2022: In separate charges unsealed by the U.S. Attorney’s Offices for the Eastern District of New York and the District of Connecticut, and with the support of the Department’s Task Force KleptoCapture, the Justice Department has charged nearly a dozen individuals and several corporate entities with participating in unlawful schemes to export powerful, civil-military, dual-use technologies to Russia some of which have been recovered on battlefields in Ukraine while another nuclear proliferation technology was intercepted before reaching Russian soil.

 

In the Eastern District of New York, five Russian nationals (Yury Orekhov, Artem Uss, Svetlana Kuzurgasheva, also known as “Lana Neumann,” Timofey Telegin, and Sergey Tulyakov) and two oil brokers (Juan Fernando Serrano Ponce, also known as “Juanfe Serrano” and Juan Carlos Soto) for Venezuela are charged in an indictment for their alleged participation in a global sanctions evasion and money laundering scheme. One defendant was arrested on Oct. 17 in Germany, and another defendant was arrested on Oct. 17 in Italy, both at the request of the United States. As alleged, the defendants obtained military technology from U.S. companies, smuggled millions of barrels of oil, and laundered tens of millions of dollars for Russian industrialists, sanctioned entities, and the world’s largest energy conglomerate.

 

Separately, in the U.S. District Court for the District of Connecticut, a superseding indictment was unsealed charging four individuals, three of whom were arrested by Latvian authorities on Oct. 18 and one by Estonian authorities on June 13 at the request of the United States and two companies in Europe with violating U.S. export laws by attempting to smuggle a dual-use, export-controlled item – a high-precision computer-controlled grinding machine – to Russia. Commonly known as a “jig grinder,” the item is export-controlled for its use in nuclear proliferation and defense programs.

 

https://www.justice.gov/opa/pr/justice-department-announces-charges-and-arrests-two-cases-involving-export-violation-schemes

 

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In three separate cases in the U.S. Attorney’s Offices for the Eastern District of New York and the District of New Jersey, the U.S. Department of Justice (DOJ) has charged 13 individuals, including members of the People’s Republic of China (PRC) security and intelligence apparatus and their agents, for alleged efforts to unlawfully exert influence in the United States for the benefit of the government of the PRC.

 

A criminal complaint has been unsealed in federal court in Brooklyn, charging two People’s Republic of China (PRC) intelligence officers with attempting to obstruct a criminal prosecution in the Eastern District of New York. The defendants remain at large. According to court documents, Dong He, aka Guochun He and aka Jacky He, and Zheng Wang, aka Zen Wang, allegedly orchestrated a scheme to steal files and other information from the U.S. Attorney’s Office for the Eastern District of New York related to the ongoing federal criminal investigation and prosecution of a global telecommunications company (Company-1) based in the PRC, including by paying a $41,000 Bitcoin bribe to a U.S. government employee who the defendants believed had been recruited to work for the PRC, but who in fact was a double agent working on behalf of the FBI.

 

https://www.justice.gov/opa/press-release/file/1546421/download

 

A federal indictment has been unsealed charging four Chinese nationals, including three Ministry of State Security (MSS) intelligence officers, in connection with a long-running intelligence campaign targeting individuals in the United States to act as agents of the PRC. As alleged in the indictment, from at least 2008 to 2018, Wang Lin, 59; Bi Hongwei, age unknown; Dong Ting, aka Chelsea Dong, 40; Wang Qiang, 55, and others engaged in a wide-ranging and systematic effort to target and recruit individuals to act on behalf of the PRC in the United States with requests to provide information, materials, equipment, and assistance to the Chinese government in ways that would further China’s intelligence objectives. These recruitment efforts included targeting professors at universities, former federal law enforcement, and state homeland security official, and others to act on behalf of, and as agents of, the Chinese government. As part of the conspiracy, MSS intelligence officers Wang Lin, Dong Ting, and others used a purported academic institute at the Ocean University of China – referred to as the Institute for International Studies (IIS) – as cover for their clandestine intelligence activities. Acting undercover as the purported director of the IIS, Wang Lin, in coordination with other MSS operatives operating under the guise of academics at the IIS, targeted professors at American universities and others in the United States with access to sensitive information and equipment. According to the indictment unsealed, MSS intelligence officers Wang Lin, Bi, Dong, and others, acting for and on behalf of the MSS and the Chinese government, systematically targeted United States persons, including but not limited to a coconspirator who was a resident of the state of New Jersey and a second individual who was a former federal law enforcement officer and state homeland security official and a professor at an American university.

 

https://www.justice.gov/opa/press-release/file/1546466/download and https://www.justice.gov/usao-nj/pr/chinese-intelligence-officers-charged-using-academic-cover-target-individuals-united

 

An eight-count indictment has been unsealed in Brooklyn charging a total of seven nationals of the PRC – Quanzhong An, 55, of Roslyn, New York; Guangyang An, 34, of Roslyn, New York; Tian Peng, 38, of the PRC; Chenghua Chen of the PRC; Chunde Ming of the PRC; Xuexin Hou, 52, of the PRC; and Weidong Yuan, 55, of the PRC – with participating in a scheme to cause the forced repatriation of a PRC national residing in the United States. The lead defendant, Quanzhong An, allegedly acted at the direction and under the control of various officials with the PRC’s government’s Provincial Commission for Discipline Inspection (Provincial Commission) – including Peng, Chen, Ming, and Hou – to conduct surveillance of and engage in a campaign to harass and coerce a U.S. resident to return to the PRC as part of an international extralegal repatriation effort known as “Operation Fox Hunt.”

 

https://www.justice.gov/usao-edny/press-release/file/1545641/download

 

 

This newsletter is a listing of the latest changes in export control regulations through August 31, 2022.  The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

 

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

 

REGULATORY UPDATES

 

The President

 

President Biden Continues The Export Administration Act Of 1979 For 1 Year

 

August 5, 2022: Fed. Reg. 48077: President Biden has determined that the national emergency declared on August 17, 2001, must continue in effect beyond August 17, 2022, as the implementation of certain sanctions authorities, including sections 11A, 11B, and 11C of such Export Administration Act of 1979, consistent with section 1766(b) of Public Law 115-232, the Export Control Reform Act of 2018 (50 U.S.C. 4801 note), is to be carried out under the International Emergency Economic Powers Act. Thus, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), the President has continued for 1 year the national emergency declared in Executive Order 13222, as amended by Executive Order 13637 of March 8, 2013.

 

https://www.federalregister.gov/documents/2022/08/05/2022-17049/continuation-of-the-national-emergency-with-respect-to-export-control-regulations

 

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

 

DDTC Name And Address Changes Posted To Website

 

August 8 through 29, 2022: 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 for JENOPTIK Advanced Systems GmbH to VINCORION Advanced Systems GmbH due to acquisition;
• Change in Name and Ownership for Oasis Systems, LLC to Engineering Research and Consulting, LLC due to acquisition;
• Change in Name for Hawker Pacific NZ Limited to Jet Aviation NZ Limited due to corporate rebranding;
• Change in Name and Ownership for Triumph Aerospace, Inc. and its subsidiaries, due to acquisition:

Old Name	New Name
Triumph Group, Inc.	Radius Aerospace, Inc.
Triumph Fabrications – Fort Worth, Inc.	Radius Aerospace – Fort Worth, Inc.
Triumph Fabrications – San Diego, Inc.	Radius Aerospace – San Diego, Inc.

• Change in Name for Hawker Pacific Asia Pte Ltd to Jet Aviation (Asia Pacific) Pte Ltd due to corporate rebranding;
• Change in Name for RUAG Australia Pty Ltd at C/o Finlaysons, Level 7, 43 Franklin Street, Adelaide, SA 5000 Australia to Rosebank Engineering Pty Ltd at 836 Mountain Highway, Bayswater, 3153 Victoria, Australia due to corporate rebranding;
• Change in Address for Ametrine, Inc., 1007 North Orange Street, 4th Floor, Wilmington, Delaware 19801 to Ametrine, Inc. at 900 E Old Settlers Blvd, Suite 300, Round Rock, Texas 78664;
• Change in Name for Jeppesen Poland Sp. z.o.o. to Boeing Poland Sp. z.o.o. due to corporate rebranding;
• Change in Name for Hawker Pacific Asia Pte Ltd (Philippines Branch) to Jet Aviation (Asia Pacific) Pte Ltd (Philippines Branch) due to corporate rebranding;
• Change in Name and Ownership for Progeny Systems Corporation to Progeny Systems, LLC due to acquisition by General Dynamics Mission Systems, Inc.;
• Change in Name and Ownership for JENOPTIK Power Systems GmbH to VINCORION Power Systems GmbH due to acquisition;
• Change in Name for Wärtsilä Defense, Inc. to Defense Maritime Solutions, Inc., due to corporate rebranding;
• Change in Address for Avanade Spain S.L.U., Paseo de Gracia 11, 08007 Barcelona, Spain to Avanade Spain S.L.U. at Passeig Saint Gervasi n 51, planta 4, modulo B, 08022 Barcelona, Spain;
• Change in Name for BAE Systems (International) Limited – Japan or BAE Systems (International) Limited Japan to BAE Systems Japan GK due to corporate rebranding;
• Change in Address for STACATO LLC, 192 Halpine Road, Apt 3401, Rockville, MD 20852 to STACATO LLC, 12300 Carroll Ave., Rockville, MD 20852;
• Change in Name and Ownership for Emirates Advanced Investments Group, LLC to Aerospace Investment Company due to acquisition by Aerospace Investment Company;
• Change in Name for Airbus Operations GmbH and Premium AEROTEC GmbH to Airbus Aerostructures GmbH due to corporate reorganization;
• Change in Address for Aero Precision Industries, Inc. at 2525 Collier Canyon Rd., Livermore, CA 94551 to 15501 SW 29th Street, Suite 101, Miramar, FL 33027;
• Change in Address for General Dynamics Land Systems – Force Protection Inc. at 9801 Highway 78 Ladson, South Carolina 29456 to Edgefield Test Center, 2055 US Highway 25 N Edgefield, South Carolina 29824;
• Change in Address for General Dynamics Land Systems – Australia Pty. Ltd. at 26 Williams Circuit, Pooraka, South Australia 5095, Australia to 01A, Innovation House, 50 Mawson Lakes Boulevard, Mawson Lakes, South Australia 5095, Australia.

 

 

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DDTC Final CJ Determinations Posted To Website

 

Editors note: To our readers, we have added recent Commodity Jurisdiction (CJ) determinations to our newsletter. We believe some readers will find the government determinations enlightening.

 

June 8, 2022 through July 5, 2022: The Directorate of Defense Trade Controls (DDTC) posted the following Final CJ Determinations on its website at: https://www.pmddtc.state.gov/ddtc_public?id=ddtc_kb_article_page&sys_id=6ea6afdcdbc36300529d368d7c96194b

 

Model Name	Description	Final Determination Date	Final Determination	Applicant
Palledrone-MX, Model Number MX01-0122, Part Number DMX22	Palledrone-MX, a heavy-lift drone designed to carry large payloads (up to 100 pounds) for up to 30 miles that is operated from a ground station laptop using open-source mission planning software	2022-07-05	Seek CCATS	Rotor-X LLC
X-59 Quiet Supersonic Technology Low-Boom Flight Demonstrator, and Parts, Components, Accessories, Attachments, and Systems Therefor	A U.S. government technology demonstrator, part of a research project to conduct flight validation of design tools and technologies applicable to low sonic boom aircraft in order to advance supersonic civilian passenger flight; the X-59’s constituent elements, including its engine	2022-07-05	USML Category XIX(a)(1) and (f)(1) – engine and specially designed parts, components, accessories, and attachments CCL ECCN 9A991.b – X-59 aircraft RWA – other X-59 parts, components, accessories, attachments, and systems	Lockheed Martin Corp
Perimeter Surveillance Radar Software Version PSR EC and UC	Perimeter surveillance software that enables connections between radars described on the USML and a computer to list radar contacts, as well as their precise speed and location	2022-06-24	USML Category XI(d)	Teledyne Technologies Incorporated
Coil Form (Bobbin), Part Number 408246	A rigid plastic spool consisting of a tubular body with two round flanges at either end of the tube	2022-06-24	EAR99	Cosmo Plastics Co
Haven Retriever, Part Number 01	A spacecraft under development that can autonomously detect and track other satellites in real time using imaging, infrared, radar, or laser systems	2022-06-24	USML Category XV(a)(2)	In Orbit Aerospace Inc
M1 Hardware Portal, Version 1	A standardized communication protocol, agnostic to the equipment it is connected to, that enables improved efficiency in facility management through smart hardware and robotics	2022-06-23	EAR99	Service Robotics & Technologies
High Mobility Multipurpose Wheeled Vehicle (HMMWV), Model Number M1025, Serial Number 013471	HMMWV that is designed to be an armament carrier and is based on the M966 TOW Missile HMMWV variant	2022-06-21	USML Category VII(b)	Kenvas, Inc
Bus Defender with General Integrated Circuit and Bus Defender with Application Specific Integrated Circuit	Hardware and firmware deployed in-line with a 1553 data bus to detect and block attacks	2022-06-21	Seek CCATS	Peraton Corp
Software and Technology for Vericut Verification, Vericut Composites, and Vericut Drilling and Fastening	Software and technology that simulates Computer Numerical Control (CNC) of manufacturing equipment to provide confidence that valuable resources will not be wasted in the manufacturing process	2022-06-21	USML when customized to simulate defense article production equipment or tooling (e.g., the technical data paragraphs for the following USML categories: VI(f)(5), XIII(k)(1), XVI(d), or XX(c)); otherwise, EAR99	CGTech
Media Swivel Rotary Joint (Two Channel Coolant and Two Channel Air), Part Number P770HP-2/2HANS1	A device for transferring cooling fluids and cooling air between the base of a radar station and its rotating antenna	2022-06-21	USML Category XII(e)(1)	United Equipment Accessories, Inc
Fusion Imaging Monocular AGM F14, Models AP and APW, Part Numbers 7152521111012F14 and 7152521121012F14	Thermal imaging and night vision devices	2022-06-13	USML Category XII(c)(1)(ii)	AGM Global Vision LLC
TAKBox System, Model Revision A, Part Number MST-000048-000 i	A rugged field-case desktop computer with peripherals in a pelican case that includes interfaces to connect to power, USB, and Ethernet	2022-06-08	Seek CCATS	Human Systems Integration, Inc.

 

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Effective September 6, 2022, All DECCS Applications Will Reflect Revised ITAR Citations

 

August 29, 2022: The U.S. Department of State, Directorate of Defense Trade Controls (DDTC) announced that its website and the Defense Export Control and Compliance System (DECCS) application are being updated with the new ITAR citations to reflect regulatory changes taking effect on Sept. 6, 2022, as a result of the ITAR Reorganization Rule 1 (87 FR 16396, Mar. 23, 2022). Updates are being made on a rolling basis. As DDTC updates its web pages, some ITAR references on the website may be temporarily outdated. DDTC expects these changes to be completed and updated no later than September 9th.  Effective September 6, all DECCS applications (Registration, Licensing, Advisory Opinions, and Commodity Jurisdictions) will reflect the revised ITAR citations.

 

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

 

Editors Note: The revised citations for definitions in the ITAR Part 120 will create requirements for the update of training programs, compliance plans, manuals and procedures, which should be updated as soon as possible.

 

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U.S. Department of Commerce, Bureau of Industry & Security

 

BIS Issued An Interim Final Rule That Establishes New Export Controls On Four Technologies That Meet The Criteria For Emerging And Foundational Technologies

 

August 12, 2022: The Commerce Department’s Bureau of Industry and Security (BIS) issued an interim final rule that establishes new export controls on four technologies that meet the criteria for emerging and foundational technologies under Section 1758 of the Export Control Reform Act (ECRA) and are essential to the national security of the United States. These Section 1758 technologies support the production of advanced semiconductors and gas turbine engines. These four technologies are among the items that the 42 Participating States of the Wassenaar Arrangement reached a consensus to control at the December 2021 Plenary. The United States additionally controls a wider range of technologies, including additional equipment, software, and technology used to produce semiconductors, beyond the items agreed upon in the Wassenaar Arrangement.

 

The four technologies covered by the rule include two substrates of ultra-wide bandgap semiconductors: Gallium Oxide (Ga2O3), and diamond; Electronic Computer-Aided Design (ECAD) software specially designed for the development of integrated circuits with Gate-AllAround Field-Effect Transistor (GAAFET) structure; and Pressure Gain Combustion (PGC) technology.

 

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3116-2022-08-12-bis-press-release-wa-2021-1758-technologies-controls-rule/file

 

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U.S. Senate

 

Senator Rubio Calls For New Export Control Laws To Protect America’s National And Economic Security

 

August 18, 2022: U.S. Senator Marco Rubio called for new export control laws to protect America’s national and economic security due to a report that the U.S. Department of Commerce approves nearly every request to sell semiconductors, aerospace components, artificial intelligence assets, and other sensitive technologies to Chinese companies, according to an analysis of trade data conducted by the Wall Street Journal.

During last month’s debate over the $280 billion CHIPS and Science Act, Rubio criticized the lack of safeguards in the bill, specifically calling attention to the flexibility granted to Commerce to broaden the definition of “legacy chips.” The Journal’s new analysis suggests Commerce will continue to expand the type of semiconductors U.S. companies are allowed to produce in China.

https://www.rubio.senate.gov/public/index.cfm/2022/8/rubio-calls-for-new-export-control-laws and https://www.wsj.com/articles/u-s-approves-nearly-all-tech-exports-to-china-data-shows-11660596886

 

LATEST SANCTIONS FINES & PENALTIES

 

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

 

Sanctions

 

The U.S. Department of State:

 

ODTC Posts Frequently Asked Questions Regarding New Temporary Open General Export Licenses 1 and 2

 

August 1, 2022: The U.S. Department of State, Office of Defense Trade Controls (ODTC) post Frequently Asked Questions (FAQ) regarding the two new temporary Open General Export Licenses that went into effect August 1, 2022.  See the following link to review the FAQs:

 

https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_faq_cat&topic=6acdbfe8db3bc30044f9ff621f96197e&subtopic=56bf93251b8159d0c6c3866ae54bcbd8#56bf93251b8159d0c6c3866ae54bcbd8

 

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Visa Restrictions Imposed By The Department of State

 

August 2, 2022: The United States is committed to working alongside our allies and partners to further impose severe consequences on President Putin and his enablers for Russia’s unconscionable war against Ukraine.

 

The Department of State imposed the following Visa restrictions:

• Visa restrictions on 893 Russian Federation officials, including members of the Federation Council and members of Russia’s military, pursuant to a policy under Section 212(a)(3)(C) of the Immigration and Nationality Act (INA) that restricts visa issuance to those who are believed to have supported, been actively complicit in, or been responsible for ordering or otherwise directing or authorizing actions that threaten or violate the sovereignty, territorial integrity, or political independence of Ukraine.

• Visa restrictions on 31 foreign government officials who have acted to support Russia’s purported annexation of the Crimea region of Ukraine pursuant to a policy under Section 212(a)(3)(C) of INA that restricts visa issuance to those who are believed to have supported, been actively complicit in, or been responsible for ordering or otherwise directing or authorizing actions that threaten or violate the sovereignty, territorial integrity, or political independence of Ukraine.

 

The Department of State designated the following Russian oligarchs, Dmitriy Pumpyanskiy, Andrey Melnichenko, And Alexander Ponomarenko.

 

The Department of State designated the following four individuals and one entity that are or are enabling illegitimate political leaders installed by Russia or its proxy forces to undermine political stability in Ukraine in support of Russia’s further invasion of Ukraine. The four individuals and the entity were designated pursuant to Section 1(a)(ii)(F) of E.O. 14024 for being responsible for or complicit in, or having directly or indirectly engaged or attempted to engage in, activities that undermine the peace, security, political stability, or territorial integrity of the United States, its allies, or its partners, for or on behalf of, or for the benefit of, directly or indirectly, the Government of the Russian Federation:

• Salvation Committee For Peace And Order;
• Kostyantyn Volodymyrovych Ivashchenko;
• Volodymyr Vasilyovich Saldo;
• Kyrylo Serhiyovych Stremousov; and
• Sergey Vladimirovich Yeliseyev.

 

Pursuant to Section 1(a)(vii) of E.O. 14024, the Department of State designated Joint Stock Company State Transportation Leasing Company (JSC GTLK).

 

Pursuant to Section 1(a)(vii) of E.O. 14024, the Department of State designated the following four JSC GTLK subsidiaries for being owned or controlled by or having acted or purported to act for or on behalf of, directly or indirectly, JSC GTLK. These companies leased JSC GTLK’s transportation equipment outside of Russia and /or enabled JSC GTLK to access capital from western financial markets to fund its activities:

• GTLK Europe Designated Activity Company;
• GTLK Europe Capital Designated Activity Company;
• GTLK Middle East Free Zone Company; and
• GTLK Asia Limited.

 

Under the leadership of Russian President Vladimir Putin, the Russian Federation has systematically focused on exploiting high-technology research and innovations to advance Russia’s defense capabilities. Putin has also repeatedly underscored his concerns about Russia’s access to microelectronics.  Advanced technologies such as microelectronics are used in numerous weapon systems used by Russia’s military.  The Department of State imposed sanctions on numerous Russian high-technology entities as a part of the United States’ efforts to impose additional costs on Russia’s war machine, as follows:

 

• Federal State Institution Of Higher Vocational Education Moscow Institute Of Physics And Technology (Moscow Institute Of Physics And Technology) (MIPT);
• Skolkovo Foundation;
• Skolkovo Institute Of Science And Technology (Skoltech) ;
• Technopark Skolkovo Limited Liability Company;
• Joint Stock Company Penzensky Nauchno Issledovatelsky Elektrotekhnichesky Higher Education Institution;
• JSC Zelenograd Nanotechnology Center;
• Joint Stock Company Institute Of Electronic Control Computers Named After I.S. Bruk;
• Federal State Institution Federal Scientific Center Scientific Research Institute For System Analysis Of The Russian Academy Of Sciences;
• Scientific And Production Association Of Measuring Equipment JSC;
• Mitishinskiy Scientific Research Institute Of Radio Measuring Instruments;
• Joint Stock Company Research Institute Of Electronic And Mechanical Devices;
• JSC Svetlana Poluprovodniki;
• Joint Stock Company Design Center Soyuz;
• OJSC Scientific Research Institute Of Precision Mechanical Engineering;
• Public Joint Stock Company Kremny;
• Joint Stock Company Institute For Scientific Research Microelectronic Equipment Progress;
• Joint Stock Company Voronezhsky Factory Poluprovodnikovykh Priborov Sborka;
• Open Joint Stock Company Scientific And Production Enterprise Pulsar;
• LLC Scientific Production Enterprise Digital Solutions;
• Joint Stock Company Design Technology Center Elektronika;
• Joint Stock Company Vologodsky Optiko Mekhanichesky Factory;
• Federal State Budgetary Scientific Institution Research And Production Complex Technology Center;
• JSC Scientific Research Institute Submicron; and
• Academician A.L. Mints Radiotechnical Institute Joint Stock Company.

 

https://www.state.gov/imposing-additional-costs-on-russia-for-its-continued-war-against-ukraine/

 

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August 10, 2022: 87 Fed Reg 48748: The U.S. Department of State, Office of Defense Trade Controls Compliance pursuant to section 38(g)(4) of the AECA and section 127.7(b) and (c)(1) of the ITAR, denied export privileges and statutorily debarred the following ten individuals as of the date of this notice:

 

• Awer, Akeem Shonari;
• Cabalceta, Oben;
• Camaj, Rrok Martin;
• Guerra, Claudia;
• Sin, Aydan;
• Sobrado, Roger;
• Wang, Shaohua;
• Wang, Ye Sang;
• Xie, Tuqiang; and
• Zhang, Jian.

 

At the end of the three-year period following the date of this notice, the above-named persons remain debarred unless a request for reinstatement from statutory debarment is approved by the Department of State.

 

https://www.federalregister.gov/documents/2022/08/10/2022-17123/bureau-of-political-military-affairs-statutory-debarment-under-the-arms-export-control-act-and-the

 

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

 

August 2, 2022: The U.S. Commerce Department, through its Bureau of Industry and Security (BIS), updated its list of aircraft that have flown into Russia or Belarus in apparent violation of the Export Administration Regulations (EAR) by adding the first 25 foreign-produced aircraft that BIS has identified as apparently violating the EAR’s de minimis threshold for U.S. components. There are now a total of 183 aircraft identified on the list for apparent violations of U.S. export controls. Based on publicly available information, BIS has identified aircraft subject to the EAR flying from third countries to Russia (since March 2—see background on EAR restrictions below) or Belarus since April 8 (see background on EAR restrictions below), all of which are owned or controlled by, or under charter or lease to, Belarus, Russia, or Russian or Belarusian nationals. In addition to U.S.-origin aircraft, foreign-produced aircraft that exceed a de minimis amount – greater than 25 percent – of controlled U.S.-origin content by value are also subject to the EAR. As a result, BIS identified 25 foreign-produced aircraft that are subject to the EAR due to meeting this de minimis threshold that has apparently violated BIS’s stringent export controls on Russia. A complete list of the 183 aircraft identified on the list for apparent violations of U.S. export controls is included at the following link:

 

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3108-2022-08-02-bis-press-release-gp10-list-foreign-produced-de-minimis-additions/file

 

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August 24, 2022: 87 Fed. Reg. 51876: The Department of Commerce amended the Export Administration Regulations (EAR) by adding seven entities under seven entries to the Entity List. 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 and will be listed on the Entity List under the destination of the People’s Republic of China (China). The seven entities are:

 

• China Aerospace Science and Technology Corporation (CASC) 9th Academy 771 Research Institute;
• China Aerospace Science and Technology Corporation (CASC) 9th Academy 772 Research Institute;
• China Academy of Space Technology 502 Research Institute;
• China Academy of Space Technology 513 Research Institute;
• China Electronics Technology Group Corporation 43 Research Institute;
• China Electronics Technology Group Corporation 58 Research Institute; and
• Zhuhai Orbita Control Systems.

 

https://www.bis.doc.gov/index.php/documents/federal-register-notices-1/3122-87-fr-51876-entity-list-rule-8-24-22/file

 

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August 24, 2022: The Department of Commerce, Bureau of Industry and Security (BIS) denied the export privileges of the following individuals:

• Aaron Abraham Villa (Mr. Villa) under the Export Administration Regulations for a period of five years from the date of Mr. Villa’s conviction on January 14, 2021, for violating 18 U.S.C. § 554(a). Specifically, Mr. Villa was convicted of knowingly and unlawfully concealing, buying, or facilitating the transportation and concealment or exportation of a Glock 21C .45 caliber Roni pistol conversion kit and magazines from the United States to Mexico, in violation of 18 U.S.C. § 554. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Mr. Villa had an interest at the time of his conviction.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1388-e2737/file

 

• Ronald Adjei Danso (Mr. Danso) under the Export Administration Regulations for a period of five years from the date of Danso’s conviction on September 15, 2020, for violating Section 38 of the Arms Export Control Act (22 U.S.C § 2778) (AECA). Specifically, Mr. Danso was convicted of knowingly and willfully attempting to export from the United States to the Republic of Ghana 20 firearms, which are designated as defense articles on the United States Munitions List, without first obtaining from the Department of State a license for such export or written authorization. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Mr. Danso had an interest at the time of his conviction.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1389-e2738/file

 

• Julio Cesar Vega-Amaral (Mr. Vega-Amaral) under the Export Administration Regulations for a period of seven years from the date of Mr. Vega-Amaral’s conviction on February 12, 2020, for violating 18 U.S.C. § 554(a). Specifically, Mr. Vega-Amaral was convicted of knowingly attempting to export and exporting, from the United States to Mexico, merchandise, articles, and objects, to wit: 4,325 live rounds of ammunition consisting of various calibers, in violation of 18 U.S.C. § 554. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Mr. Vega-Amaral had an interest at the time of his conviction.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1390-e2739/file

 

• Irina Morgovsky (Ms. Morgovsky) under the Export Administration Regulations for a period of 10 years from the date of Ms. Morgovsky’s conviction on October 31, 2018, for violating Section 38 of the Arms Export Control Act (22 U.S.C § 2778) (AECA). Specifically, Ms. Morgovsky was convicted of, among other things, knowingly and willfully and intentionally conspiring to export components for the production of night-vision and thermal devices designated as defense articles on the United States Munitions List from the United States to Russia, without having first obtained from the Department of State a license for such export or written authorization for such export. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Ms. Morgovsky had an interest at the time of her conviction.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1391-e2740/file

 

• Naum Morgovsky (Mr. Morgovsky) under the Export Administration Regulations for a period of 10 years from the date of Mr. Morgovsky’s conviction on November 13, 2018, for violating Section 38 of the Arms Export Control Act (22 U.S.C § 2778) (AECA). Specifically, Mr. Morgovsky was convicted of, among other things, knowingly and willfully and intentionally conspiring to export components for the production of night-vision and thermal devices designated as defense articles on the United States Munitions List from the United States to Russia without having first obtained from the Department of State a license for such export or written authorization for such export. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Mr. Morgovsky had an interest at the time of her conviction.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1392-e2741/file

 

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

 

August 1, 2022:  The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action against companies used by Iran’s Persian Gulf Petrochemical Industry Commercial Co. (PGPICC), one of the nation’s largest petrochemical brokers to facilitate the sale of tens of millions of dollars worth of Iranian petroleum and petrochemical products from Iran to East Asia. PGPICC is a subsidiary of Iran’s petrochemical conglomerate Persian Gulf Petrochemical Industry Co. (PGPIC), which accounts for half of all of Iran’s total petrochemical exports. These actions are taken pursuant to Executive Order (E.O.) 13846 and follows OFAC’s July 6, 2022, designation of an Iranian oil and petrochemical network selling Iranian petroleum and petrochemicals to purchasers in East Asia and the June 16, 2022, designation of international sanctions evasion network supporting Iranian petrochemical sales.

 

In a separate but related action, the Department of State also designated two entities that have engaged in the purchase, acquisition, sale, transport, or marketing of Iranian petroleum and petroleum products, including providing logistical support to the Iranian petroleum trade, pursuant to E.O. 13846.

 

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

 

• Blue Cactus Heavy Equipment And Machinery Spare Parts Trading L.L.C. of the United Arab Emirates;
• Farwell Canyon Hk Limited of China;
• Golden Warrior Shipping Co. Limited of China;
• Pioneer Shipmanagement PTE. LTD., of Singapore;
• Pznfr Trading Limited of China;
• Shekufei International Trading Co., Limited of China.

 

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

 

• Glory Harvest (3FYH7) LPG Tanker Panama flag; Vessel Registration Identification IMO 9143506.

 

https://home.treasury.gov/news/press-releases/jy0901 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220801

 

Editors Note: When booking sea freight transportation, be sure your freight forwarder is validating the vessels used to transport your freight against the U.S. Denied Parties List.

 

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August 2, 2022: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 40A, General License 43A, General License 47, General License 48, and General License 49. OFAC is also publishing three Frequently Asked Questions.

 

General License 40A: All transactions ordinarily incident and necessary to the provision, exportation, or reexportation of goods, technology, or services to ensure the safety of civil aviation involving one or more of the blocked entities listed in the Annex to this general license and that are prohibited by Executive Order (E.O.) 14024 are authorized, provided that:

(1) The aircraft is registered in a jurisdiction solely outside of the Russian Federation; and

(2) The goods, technology, or services that are provided, exported, or reexported are for use on aircraft operated solely for civil aviation purposes.

 

https://home.treasury.gov/system/files/126/russia_gl40a.pdf

 

General License 43A: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the divestment or transfer, or facilitation of the divestment or transfer, of debt or equity of Public Joint Stock Company Severstal (“Severstal”) or Nord Gold PLC (“Nord Gold”), or any entity in which Severstal or Nord Gold owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest, purchased prior to June 2, 2022 (“covered debt or equity”) to a non-U.S. person are authorized through 12:01 a.m. eastern daylight time, August 31, 2022. Except as provided above, all transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the wind down of derivative contracts entered into prior to June 2, 2022, that (i) include a blocked person described above as a counterparty or (ii) are linked to covered debt or equity are authorized through 12:01 a.m. eastern daylight time, August 31, 2022, 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). U.S. financial institutions are authorized to unblock covered debt or equity that was blocked on or after June 2, 2022, but before June 28, 2022, provided that the unblocked covered debt or equity is solely used to effect transactions authorized above.

 

https://home.treasury.gov/system/files/126/russia_gl43a.pdf

 

General License 47: All transactions ordinarily incident and necessary to the wind-down of any transaction involving one or more of the following blocked persons that are prohibited by Executive Order (E.O.) 14024 are authorized through 12:01 a.m. eastern daylight time, September 1, 2022, provided that any payment to a blocked person must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR):

(1) Skolkovo Foundation;

(2) Skolkovo Institute of Technology;

(3) Technopark Skolkovo Limited Liability Company;

(4) Federal State Institution of Higher Vocational Education Moscow Institute of Physics and Technology;

(5) Publichnoe Aktsionernoe Obschestvo Magnitogorskiy Metallurgicheskiy Kombinat;

(6) Joint Stock Company Government Transport Company; or

(7) 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.

 

https://home.treasury.gov/system/files/126/russia_gl47.pdf

 

General License 48: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the divestment or transfer, or facilitation of the divestment or transfer, of debt or equity of one or more of the following entities purchased prior to August 2, 2022 (“covered debt or equity”) to a non-U.S. person are authorized through 12:01 a.m. eastern daylight time, October 3, 2022: (i) Publichnoe Aktsionernoe Obschestvo Magnitogorskiy Metallurgicheskiy Kombinat;

(ii) Joint Stock Company Government Transport Company; or

(iii) Any entity in which one or more of the above entities 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 facilitating, clearing, and settling trades of covered debt or equity are authorized through 12:01 a.m. eastern daylight time, October 31, 2022, provided that such trades were placed prior to 4:00 p.m. eastern daylight time, August 2, 2022.

 

All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the wind-down of derivative contracts entered into prior to August 2, 2022, that (i) include a blocked person described in paragraph (a) of this general license as a counterparty or (ii) are linked to covered debt or equity are authorized through 12:01 a.m. eastern daylight time, October 3, 2022, 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).

 

https://home.treasury.gov/system/files/126/russia_gl48.pdf

 

General License 49: All transactions ordinarily incident and necessary to the wind-down of any transaction involving MMK Metalurji Sanayi Ticaret Ve Liman Isletmeciligi Anonim Sirketi (MMK Metalurji), or any entity in which MMK Metalurji owns, directly or indirectly, a 50 percent or greater interest, that are prohibited by Executive Order (E.O.) 14024 are authorized through 12:01 a.m. eastern standard time, January 31, 2023, provided that any payment to a blocked person must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).

 

https://home.treasury.gov/system/files/126/russia_gl49.pdf

 

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

 

• Guryev, Andrey Andreevich of Russia;
• Guryev, Andrey Grigoryevich of Russia;
• Ivashchenko, Kostyantyn Volodymyrovych of Ukraine;
• Kabaeva, Alina Maratovna of Russia and Uzbekistan;
• Melnichenko, Andrey Igorevich of Russia and Belarus;
• Ponomarenko, Alexander Anatolevich of Russia, Ukraine, and Cyprus;
• Popova, Natalya Valeryevna of Russia;
• Pumpyanskiy, Dmitriy Aleksandrovich of Russia;
• Saldo, Volodymyr Vasilyovich of the Ukraine;
• Stremousov, Kyrylo Serhiyovych of Russia and the Ukraine;
• Urusov, Anton Sergeevich of Russia;  and
• Yeliseyev, Sergey Vladimirovich of Russia.

 

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

 

• Academician A.L. Mints Radiotechnical Institute Joint Stock Company of Russia;
• Dzhi Ai Invest OOO, of Russia;
• Federal State Budgetary Scientific Institution Research And Production Complex Technology Center of Russia;
• Federal State Institution Federal Scientific Center Scientific Research Institute For System Analysis Of The Russian Academy Of Sciences of Russia;
• Federal State Institution Of Higher Vocational Education Moscow Institute Of Physics And Technology of Russia;
• GTLK Asia Limited of China;
• GTLK Europe Capital Designated Activity Company of Ireland;
• GTLK Europe Designated Activity Company of Ireland;
• GTLK Middle East Free Zone Company of the United Arab Emirates;
• Investitsionnaya Kompaniya Mmk-Finans of Russia;
• Joint Stock Company Design Center Soyuz of Russia;
• Joint Stock Company Design Technology Center Elektronika of Russia;
• Joint Stock Company Institute For Scientific Research Microelectronic Equipment Progress of Russia;
• Joint Stock Company Institute Of Electronic Control Computers of Russia;
• Joint Stock Company Penzensky Nauchno Issledovatelsky Elektrotekhnichesky Higher Education Institution of Russia;
• Joint Stock Company Promising Industrial And Infrastructure Technologies of Russia;
• Joint Stock Company Research Institute Of Electronic And Mechanical Devices of Russia;
• Joint Stock Company State Transportation Leasing Company of Russia;
• Joint Stock Company Vologodsky Optiko Mekhanichesky Factory of Russia;
• Joint Stock Company Voronezhsky Factory Poluprovodnikovykh Priborov-Sborka of Russia;
• JSC Scientific Research Institute Submicron of Russia;
• JSC Svetlana Poluprovodniki of Russia;
• JSC Zelenograd Nanotechnology Center of Russia;
• Limited Liability Company Active Business Consult of Russia;
• LLC Scientific Production Enterprise Digital Solutions of Russia;
• Mitishinskiy Scientific Research Institute Of Radio Measuring Instruments of Russia;
• Mmk Metalurji Sanayi Ticaret Ve Liman Isletmeciligi Anonim Sirketi of Turkey;
• OJSC Scientific Research Institute Of Precision Mechanical Engineering of Russia;
• Open Joint Stock Company Scientific And Production Enterprise Pulsar of Russia;
• Public Joint Stock Company Kremny of Russia;
• Publichnoe Aktsionernoe Obschestvo Magnitogorskiy Metallurgicheskiy Kombinat of Russia;
• Salvation Committee For Peace And Order of the Ukraine;
• Scientific And Production Association Of Measuring Equipment JSC of Russia;
• Skolkovo Foundation of Russia;
• Skolkovo Institute Of Science And Technology of Russia; and
• Technopark Skolkovo Limited Liability Company of Russia.

 

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

 

• Alfa Nero (ZCTL4) Yacht 2,159GRT Cayman Islands flag; Vessel Registration Identification IMO 1009376; and
• Axioma (9HA3697) Yacht Malta flag; Vessel Registration Identification IMO 9571143.

 

The following deletions have been made to OFAC’s SDN List:

 

• LIMITED LIABILITY COMPANY ACTIVE BUSINESS CONSULT of Russia;
• “ABC LLC” of Russia; and
• Limited Liability Company Activebusinesscollection of Russia.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220802

 

OFAC issued the following Frequently Asked Questions:

 

Question 1075: Is PhosAgro PJSC blocked as a result of the designation of Andrey Grigoryevich Guryev and Andrey Andreevich Guryev? 

 

Answer: No. OFAC has not designated PhosAgro PJSC and based on information available to OFAC, PhosAgro PJSC is not owned 50% or more by blocked persons or otherwise considered the blocked property of Andrey Grigoryevich Guryev and Andrey Andreevich Guryev.

 

As a general matter, agricultural and medical trade are not the target of sanctions imposed by the United States on Russia in response to its unprovoked and brutal war against Ukraine, and OFAC has issued General License 6B to authorize certain transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations (RuHSR) related to agricultural commodities (including fertilizer), agricultural equipment, medicine, and medical devices, among other things.  For information on exemptions and authorizations pursuant to the RuHSR related to fertilizer and other agricultural commodities, please see “OFAC Food Security Fact Sheet: Russia Sanctions and Agricultural Trade” and “Fact Sheet: Preserving Agricultural Trade, Access to Communication, and Other Support to Those Impacted by Russia’s War Against Ukraine.”

Question 1074: Is EuroChem Group AG blocked as a result of the designation of Andrey Igorevich Melnichenko?

 

Answer: No. OFAC has not designated EuroChem Group AG and based on information available to OFAC, EuroChem Group AG is not owned 50% or more by blocked persons or otherwise considered the blocked property of Andrey Igorevich Melnichenko.

 

As a general matter, agricultural and medical trade are not the target of sanctions imposed by the United States on Russia in response to its unprovoked and brutal war against Ukraine, and OFAC has issued General License 6B to authorize certain transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations (RuHSR) related to agricultural commodities (including fertilizer), agricultural equipment, medicine, and medical devices, among other things.  For information on exemptions and authorizations pursuant to the RuHSR related to fertilizer and other agricultural commodities, please see “OFAC Food Security Fact Sheet: Russia Sanctions and Agricultural Trade” and “Fact Sheet: Preserving Agricultural Trade, Access to Communication, and Other Support to Those Impacted by Russia’s War Against Ukraine.”

 

Question 1073: Is Sheremetyevo International Airport blocked as a result of the designation of Alexander Anatolevich Ponomarenko?

 

Answer: No.  OFAC has not designated Sheremetyevo International Airport and based on information available to OFAC, Sheremetyevo International Airport is not owned 50% or more by blocked persons or otherwise considered the blocked property of Alexander Anatolevich Ponomarenko.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-08-02

 

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August 3, 2022: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended Russia-related General Licenses (GLs) 40A, 47, and 48, which were issued on August 2, 2022, to clarify that the licenses apply to Joint Stock Company State Transportation Leasing Company.  The August 2, 2022, GLs did not include the term ‘Leasing’ in the company’s name. The GLs are otherwise unchanged.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220803

 

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August 8, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned virtual currency mixer Tornado Cash, which has been used to launder more than $7 billion worth of virtual currency since its creation in 2019. This includes over $455 million stolen by the Lazarus Group, a Democratic People’s Republic of Korea (DPRK) state-sponsored hacking group that was sanctioned by the U.S. in 2019, in the largest known virtual currency heist to date. Tornado Cash was subsequently used to launder more than $96 million of malicious cyber actors’ funds derived from the June 24, 2022, Harmony Bridge Heist and at least $7.8 million from the August 2, 2022, Nomad Heist. This action is being taken pursuant to Executive Order (E.O.) 13694, as amended, and follows OFAC’s May 6, 2022 designation of virtual currency mixer Blender.io (Blender).

 

https://home.treasury.gov/news/press-releases/jy0916

 

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August 15, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) updated its Specially Designated Nationals (SDN) List per the Global Magnitsky Designations.

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

 

• Cephus, Sayma Syrenius of Liberia;
• McGill, Nathaniel of Liberia; and
• Twehway, Bill of Liberia.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220815

 

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August 25, 2022: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Iran General License M-2, “Authorizing the Exportation of Certain Graduate Level Educational Services and Software”. In addition, OFAC is amended one related Frequently Asked Question.

 

General License M-2:  Accredited graduate and undergraduate degree-granting academic institutions located in the United States (collectively, “U.S. academic institutions”), including their contractors, are authorized through 12:01 a.m. eastern daylight time, September 1, 2023, to engage in the following activities with respect to Iranian students:

(1) Online Educational Services. The provision of online educational services related to graduate educational courses provided that the courses are the equivalent of courses ordinarily required for the completion of graduate degree programs in the humanities, social sciences, law, or business or are introductory science, technology, engineering, or mathematics courses ordinarily required for the completion of graduate degree programs in the humanities, social sciences, law, or business, and participation in all activities related to the provision of such online educational services to Iranian students.

(2) Exportation of Software. The exportation of software to Iranian students to facilitate participation in the activities authorized in this general license or (ii) paragraph (b)(1)(iii) of Iran General License G, provided such software is designated as EAR99 under the Export Administration Regulations, 15 CFR parts 730 through 774 (EAR), or constitutes information or software not subject to the EAR pursuant to 15 CFR § 734.3(b)(3).

 

Iranian students are individuals located in Iran or located outside Iran but who are ordinarily resident in Iran, who are eligible for non-immigrant classification under categories F (students) or M (non-academic students), and have been granted a non-immigrant visa by the U.S. State Department, but are not physically present in the United States due to the COVID-19 pandemic.

 

https://home.treasury.gov/system/files/126/iran_glm2.pdf

 

OFAC updated the following Frequently Asked Question:

 

Question 853: Can U.S. academic institutions provide online learning services to Iranian students who are not physically present in the United States because of the Coronavirus Disease 2019 (COVID-19) pandemic?  Can U.S. technology companies provide software and services to assist Iranian students in accessing online coursework?

 

Answer: General licenses issued under the Iranian Transactions and Sanctions Regulations (ITSR) authorize certain U.S. academic institutions and other U.S. persons to provide certain services and software to Iranian students.  These general licenses include:

 

• General License G (GL G) authorizes accredited graduate and undergraduate degree-granting U.S. academic institutions, including their contractors, to export services to students located in Iran, or located outside of Iran but who are ordinarily resident in Iran (“Iranian students”), to sign up for and participate in certain undergraduate level online courses, notably:  (i) courses in the humanities, social sciences, law, or business that are the equivalent of courses ordinarily required for the completion of undergraduate degree programs in the humanities, social sciences, law, or business; and (ii) introductory undergraduate level science, technology, engineering, or mathematics courses ordinarily required for the completion of undergraduate degree programs in the humanities, social sciences, law, or business.  In addition, under Section 560.405 of the ITSR, certain transactions ordinarily incident to a licensed transaction are also authorized.  OFAC interprets Section 560.405 of the ITSR to authorize certain transactions ordinarily incident to courses authorized by GL G, including the giving of assignments and testing and grading of Iranian students.
• General License M-2 (GL M-2) authorizes, on a time-limited basis, accredited graduate and undergraduate degree-granting U.S. academic institutions, including their contractors, to export additional services to those Iranian students who are eligible for non-immigrant classification under categories F (students) or M (non-academic students), and have been granted a nonimmigrant visa by the U.S. State Department, but are not physically present in the United States due to the COVID-19 pandemic.  Specifically, GL M-2 authorizes the provision of certain online educational services related to: educational courses that are (i) the equivalent of courses ordinarily required for the completion of graduate degree programs in the humanities, social sciences, law, or business; and (ii) introductory science, technology, engineering, or mathematics courses ordinarily required for the completion of graduate degree programs in the humanities, social sciences, law, or business.  OFAC interprets Section 560.405 of the ITSR to authorize certain transactions ordinarily incident to courses authorized by GL M-2, including the giving of assignments and testing and grading of Iranian students. GL M-2 also authorizes the exportation of certain software to facilitate the participation of certain Iranian students in certain online educational activities, as explained further below.  GL M-2 authorizes covered activities through 12:01 a.m. eastern daylight time, September 1, 2023.
• Section 560.540 of the ITSR and General License D-1 authorize the exportation to Iran of certain services and software incident to the exchange of personal communications over the Internet, such as instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, and blogging.  OFAC interprets these authorizations to cover video conferencing software and related services, as well as educational technology software and related services, that allow students to view courses and course materials, complete tests and assignments, receive grades, participate in discussions, and other similar course-related online activity, provided that the software meets the additional criteria of the applicable authorization.  For more guidance on Section 560.540 of the ITSR and General License D-1, please see FAQs 337, 338, 339, 340, 341, 342, 343, 344, 345, 346, 347, 348, 434, 435, 436, 437, 438, 439, 440, 441, 442, and 443.  In addition, GL M-2 also authorizes the exportation of certain software in order to facilitate participation in online educational activities described in GL G and GL M-2 by Iranian students who are eligible for non-immigrant classification under categories F (students) or M (non-academic students), and have been granted a nonimmigrant visa by the U.S. State Department, but are not physically present in the United States due to the Covid-19 pandemic.

 

To export services to Iranian students that fall outside of these authorizations, U.S. persons may apply for a specific license through the OFAC License Application Page.  OFAC is committed to mitigating the adverse impacts of the COVID-19 pandemic and prioritizes the review of specific license applications to provide online learning services to Iranian students who are not physically present in the United States because of the COVID-19 pandemic.

 

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Fines and Penalties

 

August 8, 2022:  The United States of America has been authorized to seize an Airbus A319-100 (the “Airbus”) owned and controlled by sanctioned Russian oligarch Andrei Skoch, pursuant to a seizure warrant from the U.S. District Court for the Southern District of New York, which found that the airplane is subject to seizure and forfeiture based on probable cause of violation of the federal anti-money laundering laws.

 

https://www.justice.gov/usao-sdny/pr/united-states-obtains-warrant-seizure-airplane-sanctioned-russian-oligarch-andrei-skoch

 

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August 10, 2022:  Arif Ugur, 53, a former Cambridge man plead guilty in Boston in connection with his scheme to illegally export defense technical data to foreign nationals in Turkey for the fraudulent manufacturing of various United States military parts, in violation of the Arms Export Control Act. The U.S. Department of Defense (DOD) later determined that some of the parts were substandard and unsuitable for use by the military.

 

Mr. Ugur pleaded guilty to two counts of wire fraud, two counts of violating the Arms Export Control Act, and one count of conspiring to violate the Arms Export Control Act. Mr. Ugur was indicted on July 21, 2021.

 

https://www.justice.gov/usao-ma/pr/former-cambridge-man-pleads-guilty-wire-fraud-and-illegally-exporting-defense-articles

 

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August 26, 2022: The U.S. Department of State has concluded administrative settlements with Ryan Adams, Marc Baier, and Daniel Gericke, respectively, to resolve alleged violations of the Arms Export Control Act (AECA), 22 U.S.C. § 2751 et seq., and the International Traffic in Arms Regulations (ITAR), 22 C.F.R. Parts 120-130.  The Department of State and Mr. Adams, Mr. Baier, and Mr. Gericke have reached these settlements following an extensive compliance review by the Office of Defense Trade Controls Compliance in the Department’s Bureau of Political-Military Affairs.

 

The administrative settlements between the Department of State and Mr. Adams, Mr. Baier, and Mr. Gericke, who are three former U.S. Intelligence operatives, pursuant to ITAR § 128.11, address the charge of unauthorized furnishing of defense services involving electronic systems, equipment, and software that were specially designed for intelligence purposes that collect, survey, monitor, exploit, analyze, or produce information from the electromagnetic spectrum to foreign persons in the United Arab Emirates. The three worked as cyber spies for the United Arab Emirates and admitted to hacking American networks that helped the UAE spy on human rights activists, journalists, and governments.

 

Under the terms of the Consent Agreements, Mr. Adams, Mr. Baier, and Mr. Gericke will be administratively debarred and thereby prohibited from participating directly or indirectly in any activities subject to the ITAR for three years.

 

https://www.state.gov/u-s-department-of-state-concludes-settlements-of-alleged-export-violations-by-ryan-adams-marc-baier-and-daniel-gericke/ and https://www.reuters.com/world/state-dept-concludes-settlements-with-ex-us-intel-operatives-who-worked-uae-2022-08-26/

 

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August 31, 2022: The United States obtained a warrant to seize a Boeing 737-7EM aircraft owned by PJSC LUKOIL, a Russian multinational oil and gas corporation headquartered in Moscow, Russia. The U.S. District Court for the Southern District of Texas authorized the seizure, finding probable cause that the Boeing aircraft was subject to seizure based on violations of federal law.

 

Earlier this year, the U.S. Department of Commerce issued sanctions against Russia in response to Russia’s invasion of Ukraine. The sanctions impose export controls and license requirements to protect U.S. national security and foreign policy interests. The Russia sanctions expanded prohibitions on the export, reexport, or in-country transfer of, among other things, U.S.-manufactured aircraft to or within Russia without a valid license or license exception.

 

According to court documents, LUKOIL owns the Boeing aircraft – bearing the tail number VP-CLR and the manufacturer serial number 34865 – which flew into and out of Russia in violation of the Department of Commerce’s sanctions against Russia.

 

https://www.justice.gov/opa/pr/united-states-obtains-warrant-seizure-45-million-airplane-owned-russian-energy-company-pjsc