Updates

DECEMBER 2022 EXPORT CONTROLS AND COMPLIANCE UPDATE

This newsletter is a listing of the latest changes in export control regulations through December 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 Continued The National Emergency With Respect To Global Illicit Drug Trafficking

 

December 14, 2022: 87 Fed. Reg. 76549: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for 1 year the national emergency declared in Executive Order 14059 of December 15, 2021, with respect to global illicit drug trafficking.

https://www.federalregister.gov/documents/2022/12/14/2022-27271/continuation-of-the-national-emergency-with-respect-to-the-global-illicit-drug-trade

 

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President Biden Continued The National Emergency With Respect To Serious Human Rights Abuse And Corruption

 

December 14, 2022: 87 Fed. Reg. 76547: - In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for 1 year the national emergency declared in Executive Order 13818 of December 20, 2017, with respect to serious human rights abuse and corruption.

https://www.federalregister.gov/documents/2022/12/14/2022-27270/continuation-of-the-national-emergency-with-respect-to-serious-human-rights-abuse-and-corruption

 

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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 Requested Comments On Areas And Priorities For U.S. And Japan Export Control Cooperation

December 1, 2022: 87 Fed. Reg. 73748: The Bureau of Industry and Security (BIS) requested public comments regarding areas and priorities for U.S. and Japan export control cooperation to help inform the work of the Japan-U.S. Commercial and Industrial Partnership (JUCIP) Export Control Working Group. Comments should address ways in which existing U.S. and/or Japanese dual-use export control policies and practices may be more transparent, more efficient and effective, and more convergent, including in identifying and controlling emerging or foundational technologies, and in better facilitating research collaboration between Japan and U.S. research organizations.

 

https://www.federalregister.gov/documents/2022/12/01/2022-25915/request-for-public-comments-regarding-areas-and-priorities-for-us-and-japan-export-control

 

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The U.S. Department Of Commerce, Bureau of Industry And Security Extends Period For Comments On Additional Export Controls: Certain Advanced Computing and Semiconductor Manufacturing Items; Supercomputer and Semiconductor End Use; Entity List Modification

 

December 7, 2022: 87 Fed. Reg. 74995: On October 13, 2022, the Bureau of Industry and Security (BIS) published the interim final rule Implementation of Additional Export Controls: Certain Advanced Computing and Semiconductor Manufacturing Items; Supercomputer and Semiconductor End Use; Entity List Modification. This document extends the deadline for written comments to January 31, 2023. This extension is being made to allow for commenters to have additional time to review the interim final rule and to benefit from the significant amount of public outreach that BIS is conducting on the rule in preparing their comments.

 

https://www.federalregister.gov/documents/2022/12/07/2022-26662/implementation-of-additional-export-controls-certain-advanced-computing-and-semiconductor?utm_source=federalregister.gov&utm_medium=email&utm_campaign=subscription+mailing+list

 

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

 

DDTC Name And Address Changes Posted To Website

 

December 1 through 23, 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 and Ownership due to merger from Airbus Operations GmbH and Premium AEROTEC GmbH to Airbus Aerostructures GmbH;
• Change in Name and Ownership from Hanwha Aerospace, Hanwha Corp. (Defense business) and Hanwha Defense Corporation to Hanwha Munitions Corporation due to corporate reorganization;
• Change in Name from GMV INSYEN AG to GMV GmbH due to corporate reorganization;

• Changes in Name of the following Saab AB Brazilian entities:

Old Name                                                    New Name
Saab Aeronáutica Montagens S.A.               Saab Brasil Ltda. also Saab Brasil São Bernardo do Campos
Gripen Flight Test Center                              Saab Brasil Ltda. also Saab Brasil Gripen Flight Test Center
Saab do Brasil Anápolis Branch Office         Saab Brasil Ltda. also Saab Brasil Anápolis
Saab do Brasil São Paulo Branch Office       Saab Brasil Ltda. also Saab Brasil São Paulo
Saab do Brasil Brasília Branch Office            Saab Brasil Ltda. also Saab Brasil Brasília
Saab do Brasil Rio de Janeiro Branch Office Saab Brasil Ltda. also Saab Brasil Rio de Janeiro
Gripen Design and Development Network   Saab Brasil Ltda. also Saab Brasil Gripen Design and Development Network
Saab Sensores & Serviços                             Saab Brasil Ltda. also Saab Brasil Sensores & Serviços

• Change in Address for GMV GmbH from Muenchener Str. 20, 82234 Wessling, Germany to Zeppelin Str. 16, 82205 Gilching, Germany;
• Change in Address for BMT Defence and Security UK Limited from Third Floor, 1 Park Road, Teddington, London TW11 0AP to Level 5, Zig Zag Building, 70 Victoria Street, London SW1E 6SQ;
• Change in Name from Hanwha Corp. to Hanwha Munitions Corporation due to corporate rebranding; and
• Change in Name and Address from BAE Systems plc – Enterprise IT Services, 6 Carlton Gardens, London, SW1Y 5AD, United Kingdom to BAE Systems Services Limited at Warwick House, PO Box 87, Farnborough Aerospace Centre, Farnborough, Hampshire, GU14 6YU, United Kingdom due to corporate consolidation.

 

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DDTC Final CJ Determinations Posted To Website

 

July 8, 2022 through September 23, 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
RMT Nomad Trigger, Model RMT Nomad Varangian Investments LLC Ergonomic trigger for semi-automatic rifles CCL ECCN 0A501.c 7/8/2022
Data Sync (TAK Plug-in), Version 1.2 TAK Product Center A plug-in used to synchronize multiple Tactical Assessment Kit (TAK) devices involved in the same exercise or event for use with the TAK application tool Seek CCATS 7/8/2022
RFnest D600 Family of RF Network Channel Emulators (Model Numbers D608, D616, D632, and D6128) BlueHalo, LLC Channel emulation devices that support RF applications USML Category XI(a)(11) 7/18/2022
Tow Bridle Load Out Kit, Model TB37000A, Part Number TB37000A Helibasket LLC Used as the integration piece for loading most rolling stock and aircraft onto cargo vessels, vehicle, or aircraft CCL ECCN 9A610.x 7/18/2022
Adeka Super TMA, Trimethylaluminum (CAS 75-24-1) Adeka USA Corporation Trimethylaluminum (CAS 75-24-1) Seek CCATS 7/22/2022
7.62 x 51mm M62 Tracer Round Olin Corporation Tracer ammunition USML Category III(a)(6) 7/22/2022
Solder Assembly RF, Revision M, Part Number 404338-001 Cobham Advanced Electronic Solutions Inc. Electrical components used in a defense article, and instructions detailing how to solder them into a housing for that defense article CCL ECCN 3A611.x - Solder Assembly RF
CCL ECCN 3E611 - Technology 8/1/2022
3.5” 960x640 DVGA Transflective NVIS Display with EMI and PCAP Touch Screen, Model and Part Number Q035-028 Q-Vio Corporation A touch screen manufactured with a filtering system that prevents the display from interfering with night vision goggles Seek CCATS 8/16/2022
WhiteKnightTwo, Model WK2 Virgin Galactic, LLC Dual fuselage aircraft whose primary function is to facilitate the ascent and release of SpaceShipTwo, a sub-orbital spacecraft CCL ECCN 9A004.g 8/16/2022
Silicon Assured Video Isolation (SAVI) Appliance consisting of Part Numbers IA21251, IA3041, IA21251-SP, IA7021-SP, IA3041-SP, GAPP-WIN-1, GAPP-LIN-2, GAPP-LIN-3, GAPP-AND-1, GAPP-IOS-1, RA-GSM01, and RA-GCB01. Garrison Technology, Ltd. Combination of hardware and software that provides web isolation for commercial customers and cross-domain access in classified government environments, that is not on the National Cross Domain Strategy and Management Office (NCDSMO) control list Seek CCATS 8/16/2022
Night Hawk HD Tracking System, Part Number 111855 PVP Advanced EO Systems, Inc. A pan and tilt tracking system for long-range surveillance USML Category XII(c)(3) 8/16/2022
Cold Key Loading Set, Part Number 3867AS145-1 GWT Aerospace, Corp. Data transfer device, whose purpose is to temporarily download encryption and decryption keys (classified and unclassified) for subsequent upload into military systems USML Category XIII(b)(1) 8/16/2022
AR-15 forging design drawing, Part Number 05-059-032-152 Palmetto State Defense, LLC Technical drawing required to produce a forging of a semi-automatic lower receiver CCL ECCN 0E501.a 8/18/2022
M1000 DHA Printed Circuit Board Set, Part Numbers 1000-142-25-XXX-1, 1000-142-25-XXX-2, 1000-182-25-XXX, 1000-232-25-XXX-1, and 1000-232-25-XXX-2 Mercury Systems, Inc Component of the Commander Display Unit of a tank USML Category XI(c)(2) 9/2/2022
Multi-Threat Locator - Dual Sensor Buried Object Detector, Model MTL-DS, Part Number 20ATL 1340-059 L3Harris Technologies, Inc Handheld buried object detector designed for commercial and humanitarian demining activities. Although capable of cataloguing specific detection signatures, the device is not capable of sharing these signatures with other devices. EAR99 9/2/2022
Advanced Microwave Mapping Probes, Models SP324 and SP2040 Compass Technology Group, LLC Hand-held devices for evaluating the surface topology of objects EAR99 9/2/2022
1) Gate-Lok Flash Comp, Model Number XHP762FCM, Part Number XHP762FCM
2) Taper Mount Hammer Comp, Model Number TMHC, Part Number TMHC305824 and TMHC91228
3) Taper Mount Linear Compensator, Model Number TMLC, Part Number TMLC
4) Blast Shield, Model Number GAMMBS1, Part Number GAMMBS1 Automated Export Processing, Inc Four separate muzzle devices that mount to firearms EAR99 9/2/2022
CA-SG010 8 Channel 25-6400 MHz Signal Generator Platform CellAntenna Corporation An 8-channel signal generator that can transmit three different onboard analog signal sources Seek CCATS 9/13/2022
Towed Vehicle Array (TVA) U.S. Army Humanitarian Demining Research and Development (HD R&D) Program Agricultural tractor, up-armored to NIJ level III, with an attached UPEX 740 Large Loop Detector that provides landmine detection USML Category IV(c) - UPEX 740
Seek CCATS - TVA without UPEX 740 9/13/2022
Very High Frequency Low Pressure Plasma Process (VHFLPP) Technology and Products Dow Inc A process for creating quantum dots with specific material properties Seek CCATS 9/13/2022
Avcon Multi-Use Pods made of (1) Fiberglass and Aluminum and (2) Fiberglass Composite with Astroquartz Butler National Corporation Multi-use pods that mount to the underside of the Beechcraft King Air turboprop airplane 1. EAR99
2. CCL ECCN 9A610.x 9/13/2022
MIL-STD-461G and IEC-60945 Rackmount System for Ship Controls and Mapping, Model AA-AO, Part Number 003492 Foxguard Solutions, Inc Rack mounted computer system that will be used for vessel navigation and mapping CCL ECCN 8A609.x 9/13/2022
65 Nanometer Unprogrammed Processor Layer, Part Number 430620 Raytheon Technologies Corporation A partially manufactured programmable logic device EAR99 9/22/2022
Thin Layer Chromatography (TLC) Paper, Model Number TL-100, Part Number 6577-TL100 Molpure, Inc Silica gel coated chromatography fiberglass membrane Seek CCATS 9/22/2022
DanInject Dart Projector, Model JM DanWild LLC CO2 powered tranquilizer-dart rifle EAR99 9/22/2022
M203Grip, Part Number 71G710 RM Equipment, Inc Detachable vertical grip for the M203 grenade launcher Seek CCATS 9/22/2022
Universal Load Bank, Model Number RL180 Series, Part Number 3746635 Universal Load Banks LLC A self-contained unit designed to provide resistive, reactive, and pulsed load aircraft testing of flightline generator sets CCL ECCN 9B610.a 9/22/2022
RTL-CHSIM-600 MHZ (Channel Simulator) Kratos RT Logic, Inc Creates radio frequency (RF) and intermediate frequency (IF) signals that precisely match those that occur when transmitters and receivers are in motion with respect to one another USML Category XI(c)(8) 9/22/2022
Series 2000 High-Resolution Thermal Imaging System, Models 2000E, 2000F, and 2000G Teledyne Technologies Incorporated Gimballed thermal imaging systems CCL ECCN 6A003.b.4.a - 2000F and 2000G
EAR99 - 2000E 9/22/2022
A. TWA Series COTS-Plus Wet Electrolytic Tantalum Capacitors (“Capacitor Family A”)
1. Model TWAE-470uf-125v / Part Number TWAE477(x)125(x)BSZ0(x)00
2. Model TWAE-750uf-100v / Part Number TWAE757(x)100(x)BEZ0(x)00
3. Model TWAE-3000uf-50v / Part Number TWAE308(x)050(x)B(x)Z0(x)00
4. Model TWAE-2200uf-60v / Part Number TWAE228M060(x)BEZ0(x)00
5. Model TWAE-560uf-125v / Part Number TWAE567(x)125(x)BSZ0(x)00

B. TWA-Y Series High Temperature COTS-Plus 200C Wet Electrolytic Tantalum Capacitors (“Capacitor Family B”)
6. Model TWAE-750uf-100v / Part Number TWAE757(x)100(x)BYZ0(x)00
7. Model TWAE-470uf-125v / Part Number TWAE477(x)125(x)BYZ0(x)00 KYOCERA AVX Components Corporation A series of wet electrolytic tantalum capacitors, five TWA series and two TWA-Y series USML Category XI(c)(5) 9/22/2022
Mortar Gunner Pack Kit, Model 98752-MC, NSN 1095-01-679-5616 MMI Outdoor, Inc Backpack that has MOLLE panels, pouches, cords, and pockets that organize and store gear to include a mortar tube system and Gustaf rounds EAR99 9/23/2022
Soldering Services BGA Technology LLC Post-manufacturing service for high reliability commodities that includes hot solder dip, trim and form, Ball Grid Array (BGA) reballing, wire lead/column attach, solderability testing, seal testing, ionic cleanliness testing, X-Ray fluorescence testing, tape and reel packaging, or bake and dry pack EAR99 9/23/2022
7.62 x 51mm Armor Piercing (AP) Sniper Ammunition, Model / Part Number 7.62 x 51mm 165AP Sentinel Precision, Inc Small arms ammunition cartridge featuring a bullet with a hardened steel core USML Category III(d)(6) 9/23/2022
Competency and Skills System (CaSS) Software Service Eduworks Corporation Competency and Skills System (CaSS) software services to include installation, operation, and maintenance Seek CCATS 9/23/2022
Omni Connector Palantir Technologies Inc Customized software plug-in that enables bidirectional communication between tactical radio software described on the USML and Palantir USML Category XI(d) 9/23/2022

 

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DDTC Issued New Compliance Program Guidelines

 

December 5, 2022: The U.S. Department of State, Directorate of Defense Trade Controls (DDTC) issued new Compliance Program Guidelines (CPG) that are intended to provide an overview of an effective compliance program and an introduction to defense trade controls, including information on the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR). More specifically, the new CPG contain information on the key elements of an effective ITAR Compliance Program (ICP) and how to design and implement an ICP for the defense industry and universities that manufacture, export, broker, or temporarily import defense articles and defense services described on the United States Munitions List (USML).

https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_news_and_events and https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=1216c09a1b671d14d1f1ea02f54bcb25

 

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DDTC Proposed To Add Two New Entries To The International Traffic In Arms Regulations (ITAR) To Expand The Definition Of “Activities That Are Not Exports, Reexports, Retransfers, Or Temporary Imports.”

 

December 15, 2022: 87 Fed. Reg. 77046: The Department of State proposes to add two new entries to the International Traffic in Arms Regulations (ITAR) to expand the definition of “activities that are not exports, reexports, retransfers, or temporary imports.”

First, subject to certain conditions, the taking of defense articles outside a previously approved country by the armed forces of a foreign government or United Nations personnel on a deployment or training exercise is not an export, reexport, retransfer, or temporary import.

Second, a foreign defense article that enters the United States, either permanently or temporarily, and that is subsequently exported from the United States pursuant to a license or other approval under this subchapter, is not subject to the reexport and retransfer requirements of this subchapter, provided it has not been modified, enhanced, upgraded, or otherwise altered or improved or had a U.S.-origin defense article integrated into it. Public comments are due by February 14, 2023.

https://www.federalregister.gov/documents/2022/12/16/2022-27156/international-traffic-in-arms-regulations-amendment-to-the-definition-of-activities-that-are-not

 

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U.S. Department Of Defense/U.S. Department of State

 

The State Department Approved Possible FMS Sale To Finland

 

December 1, 2022: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Finland of FIM-92K Stinger Man Portable missiles; Production Verification Flight Test (PVFT) FIM-92K Stinger Man Portable missiles; and related equipment for an estimated cost of $380 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.

https://www.dsca.mil/press-media/major-arms-sales/finland-stinger-man-portable-ground-air-missiles

 

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The State Department Approved Possible FMS Sale To Poland

 

December 6, 2022: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Poland of M1A1 Abrams Main Battle Tanks and related equipment for an estimated cost of $3.75 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.

https://www.dsca.mil/press-media/major-arms-sales/poland-m1a1-abrams-main-battle-tanks

 

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The State Department Approved Possible FMS Sale To South Korea

 

December 6, 2022: The State Department has made a determination approving a possible Foreign Military Sale to the Republic of Korea of CH-47F helicopters and related equipment for an estimated cost of $1.5 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.

https://www.dsca.mil/press-media/major-arms-sales/korea-ch-47f-chinook-helicopters

 

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The State Department Approved Possible FMS Sale To The Taipei Economic and Cultural Representative Office in the United States

 

December 28, 2022: The State Department has made a determination approving a possible Foreign Military Sale to the Taipei Economic and Cultural Representative Office in the United States of Volcano (vehicle-launched) anti-tank munition-laying systems and related equipment for an estimated cost of $180 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale.

https://www.dsca.mil/press-media/major-arms-sales/taipei-economic-and-cultural-representative-office-united-states-27

 

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Department of the Treasury

 

Secretary Of The Treasury Janet L. Yellen Announcement Of The Russian Oil Price Cap

 

December 2, 2022: Secretary of the Treasury Janet L. Yellen released the following statement following the announcement of the price cap.

“Together, the G7, European Union, and Australia have now jointly set a cap on the price of seaborne Russian oil that will help us achieve our goal of restricting Putin’s primary source of revenue for his illegal war in Ukraine while simultaneously preserving the stability of global energy supplies. Today’s announcement is the culmination of months of effort by our coalition, and I commend the hard work of our partners in achieving this outcome.

The price cap will encourage the flow of discounted Russian oil onto global markets and is designed to help protect consumers and businesses from global supply disruptions. The price cap will particularly benefit low- and medium-income countries who have already borne the brunt of elevated energy and food prices exacerbated by Putin’s war. Whether these countries purchase energy inside or outside of the cap, the cap will enable them to bargain for steeper discounts on Russian oil and benefit from greater stability in global energy markets.

This action will also help further constrain Putin’s finances and limit the revenues he’s using to fund his brutal invasion. With Russia’s economy already contracting and its budget increasingly stretched thin, the price cap will immediately cut into Putin’s most important source of revenue.
I look forward to further close coordination with our allies on implementation of the price cap, and on our united efforts against Russia’s unprovoked aggression.”

Following agreement by the 27 Member States of the European Union (EU), the members of the G7 (the United States, Canada, France, Germany, Italy, Japan, and United Kingdom) and Australia (collectively, the “Price Cap Coalition”) are joining the EU in adopting a price cap of $60/barrel on seaborne crude oil of Russian Federation origin. The price cap is an important tool to restrict the revenue Russia receives to fund its illegal war in Ukraine, while also maintaining a reliable supply of oil onto global markets. This policy is especially critical to make oil supplies available in low- and middle-income countries hit hard by the effects of Russia’s war.

https://home.treasury.gov/news/press-releases/jy1138 and https://home.treasury.gov/news/press-releases/jy1141

 

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The Department Of The Treasury Has Published A Determination Pursuant To Executive Order 14071 Related To A Price Cap On Crude Oil Of Russian Federation Origin

 

December 5, 2022: The Department of the Treasury has published a Determination pursuant to Executive Order 14071 related to a price cap on crude oil of Russian Federation origin.

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"), and the determination on November 21, 2022 made pursuant to sections l(a)(ii), l(b), and 5 of E.O. 14071 ("Prohibitions on Certain Services as They Relate to the Maritime Transport of Crude Oil of Russian Federation Origin"), the Secretary of the Treasury, in consultation with the Secretary of State, hereby determines that, effective 12:01 a.m. eastern standard time on December 5, 2022, the price cap on crude oil of Russian Federation origin shall be $60 per barrel.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221205

 

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Census Bureau

 

The U.S. Census Bureau Announced A New Automated Export System (AES) Informational Message

 

December 22, 2022: The U.S. Census Bureau announced a new Automated Export System (AES) informational message. This is intended to provide clear guidance for U.S. Principal Parties in Interest (USPPI) when the USPPI Address State and State of Origin do not match on the Electronic Export Information (EEI) in the Automated Export System (AES). If the U.S. State codes do not match, filers shall begin filing in compliance with the Foreign Trade Regulations (FTR) going forward. The message will be active in the Certification testing environment on January 10, 2023 and will go into the Production environment on February 7, 2023. This Informational Message will allow the filer to take notice of the USPPI Address and State of Origin fields being reported on the EEI in the AES when the data elements do not match and make changes.

 

Response Code: 26C
Narrative Text: STATE OF ORIGIN / USPPI STATE MISMATCH
Severity: INFORMATIONAL
Reason: The U.S. State of Origin Code and USPPI Address State Code do not match.
Resolution: The State of Origin and USPPI State must match and be reported as the location from which the goods actually begin the journey to the port of export as defined in section 30.6(a)(1)(ii) and 30.6(a)(4) of the Foreign Trade Regulations.

 

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U.S. Customs & Border Protection, Department of Homeland Security

 

U.S. Customs And Border Protection (CBP), Department Of Homeland Security Will Conduct A National Customs Automation Program Test Regarding The Electronic Transmission Of Certain Unique Entity Identifiers Through The Automated Commercial Environment

 

December 2, 2022: 87 Fed. Reg. 74157: U.S. Customs and Border Protection (CBP), Department of Homeland Security will conduct a National Customs Automation Program test regarding the electronic transmission of certain unique entity identifiers through the Automated Commercial Environment (ACE). This test, which is referred to as the “Global Business Identifier Evaluative Proof of Concept” (GBI EPoC), is for participation by entry filers (i.e., importers of record and licensed customs brokers) for merchandise imported into the United States. Test participants will voluntarily provide specific global business identifiers (GBIs) for the manufacturers, sellers, and shippers of merchandise covered by specified types of entries, which are limited for purposes of this test to certain commodities and countries of origin. Test participants may also, optionally, provide specific GBIs for exporters, distributors, and packagers associated with the covered entries. The test will permit CBP and certain Partner Government Agencies (PGAs) to access the underlying data associated with the GBIs (referred to as the “GBI data”), to determine whether the submission of GBIs at the time of entry filing will enable the enhanced tracing of the supply chains of certain commodities. This notice invites importers of record and licensed customs brokers to participate in the test, provides a description of the test, sets forth the criteria for participation, and invites public comments on all aspects of the test.

The GBI EPoC will commence on December 19, 2022, and will continue until July 21, 2023, subject to any extension, modification, or early termination as announced in the Federal Register. CBP will begin to accept requests from importers of record and licensed customs brokers to participate in the test on December 2, 2022, and CBP will continue to accept such requests until the GBI EPoC concludes. Public comments on the test are invited and may be submitted to the address set forth below at any time during the test period.

https://www.federalregister.gov/documents/2022/12/02/2022-26213/announcement-of-the-national-customs-automation-program-test-concerning-the-submission-through-the

 

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Department of the Treasury's Office of Foreign Assets Control

 

The Department Of The Treasury's Office Of Foreign Assets Control (OFAC) Added Regulations To Implement "Imposing Sanctions On Foreign Persons Involved In The Global Illicit Drug Trade"

December 20, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) added regulations to implement Executive Order 14059 of December 15, 2021, "Imposing Sanctions on Foreign Persons Involved in the Global Illicit Drug Trade". These regulations took effect on December 20, 2022. OFAC intends to supplement these regulations with a more comprehensive set of regulations, which may include additional interpretive guidance and definitions, general licenses, and other regulatory provisions.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221219 and https://home.treasury.gov/system/files/126/illicit_drug_trade_sanctions_regulations.pdf

 

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The U.S. Department Of The Treasury's Office Of Foreign Assets Control (OFAC) Is Publishing Preliminary Guidance On The Implementation Of The Price Cap Policy For Petroleum Products Of Russian Federation Origin

 

December 30, 2022: The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing preliminary guidance on the implementation of the price cap policy for petroleum products of Russian Federation origin. The United States is part of an international coalition, including the G7, the European Union, and Australia, that have 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.” To implement the price cap policy for Russian petroleum products, the Secretary of the Treasury intends to issue, in consultation with the Secretary of State, a determination (the “petroleum products determination”) pursuant to Executive Order 14071, as it did to implement the price cap policy for Russian oil (the “crude oil determination”). The petroleum products determination, which will cover the same categories of services (the “covered services”) as the crude oil determination, will take effect at 12:01 a.m. eastern standard time, February 5, 2023. As with the crude oil determination, OFAC anticipates issuing a separate determination to set the price caps for Russian petroleum products. OFAC anticipates amending General Licenses 56 and 57 to extend these authorizations to the petroleum products determination.

The price cap applies from the embarkment of maritime transport of Russian petroleum products (e.g., when the Russian petroleum products are sold by a Russian entity for maritime transport) through the first landed sale in a jurisdiction other than the Russian Federation (through customs clearance). For the purposes of the determination, “petroleum products” means articles defined at Harmonized Tariff Schedule of the United States (“HTSUS”) heading 2710.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221230 and https://home.treasury.gov/system/files/126/price_cap_prelim_guidance_petroleum_products_20221230.pdf

 

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WTO

 

China Filed A Dispute With The World Trade Organization Trying To Overturn US-Imposed Export Controls On Its Semiconductor Industry

 

December 12, 2022: China filed a dispute with the World Trade Organization trying to overturn US-imposed export controls, which aim to limit the Asian nation’s ability to develop a domestic semiconductor industry and equip its military. China lodged the compliant with the WTO on Monday, December 12, 2022, according to a statement from its Ministry of Commerce. With the trade rules threatening its foothold in the $580 billion industry, the country is arguing that the US is unfairly using vague security-related justifications to hold back its rival.

The chip industry has become a major flashpoint for trade tensions between the two economic superpowers. Though China is the biggest maker of phones and computers, US companies still control most of the underlying chip technology. The Biden administration has argued that it needs to limit China’s access to the most advanced equipment to safeguard national security.

In Monday’s statement, China said the US is engaging in economic protectionism that undermines trade rules. The behavior also threatens the global supply chain, according to the complaint. But even if the country is successful with its case, the WTO lacks the ability to force the US to reverse its actions.

https://news.bloombergtax.com/international-trade/china-tries-to-push-back-on-us-chip-sanctions-with-wto-case

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)

 

December 1, 2022: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has denied the export privileges of the following individuals:

• Jose Miguel Lazarin-Zurita;
• Mauricio Martelln ;
• Tian Min Wu;
• Mark Komoroski;
• Gene Shilman;
• Rene Sarmiento; and
• Jacqueline Castro-Aguilera.

https://efoia.bis.doc.gov/index.php/documents/antiboycott/1429-e2771/file and https://efoia.bis.doc.gov/index.php/documents/antiboycott/1428-e2770/file and https://efoia.bis.doc.gov/index.php/documents/antiboycott/1427-e2769/file and https://efoia.bis.doc.gov/index.php/documents/antiboycott/1426-e2768/file and https://efoia.bis.doc.gov/index.php/documents/antiboycott/1424-e2767/file and https://efoia.bis.doc.gov/index.php/documents/antiboycott/1425-e2766/file and https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1423-e2765/file.

 

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December 8, 2022: 87 Fed. Reg. 75173: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has amended Supplement No. 4 to EAR Part 744 by adding twenty-four entities under twenty-six 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 destinations of Latvia, Pakistan, Russia, Singapore, Switzerland, and the United Arab Emirates (U.A.E.). In addition, this final rule removes from the Entity List one entity listed in three entries under Oman, Saudi Arabia, and the U.A.E. This rule is effective December 8, 2022.

 

This final rule adds the following twenty-four entities under twenty-six entries to the Entity List and includes, where appropriate, aliases:

Latvia
• Fiber Optic Solutions.

Pakistan
• Dynamic Engineering Corporation;
• EnerQuip Private, Ltd.;
• NAR Technologies General Trading LLC;
• Rainbow Solutions;
• Trojans; and
• Universal Drilling Engineers.

Russia
• AO Kraftway Corporation PSC;
• AO PKK Milandr;
• AO Scientific Research Center for Electronic Computing;
• LLC Fibersense;
• Milandr EK OOO;
• Milandr ICC JSC;
• Milur IS, OOO;
• (OOO) Microelectronic Production Complex (MPK) Milandr;
• Ruselectronics JSC; and
• Scientific Production Company Optolink.

Singapore
• Falcon International Trading Company;
• Hawk Electronic Supply Company;
• Merlin Trading Company; and
• Pulse Tech International Company.

Switzerland
• Milur SA.

United Arab Emirates
• Enerquip Ltd. (UAE);
• NAR Technologies General Trading LLC;
• Trojans; and
• Zain Enterprises FZE.

Removal From the Entity List

Safe Technical Supply Co., LLC was removed from the Entity List. Prior to removal from the Entity List by this rule, Safe Technical Supply Co., LLC was listed under Oman, Saudi Arabia, and the U.A.E.

https://www.federalregister.gov/documents/2022/12/08/2022-26622/additions-of-entities-to-the-entity-list-removal-of-an-entity-from-the-entity-list

 

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December 5, 2022: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has renewed a Temporary Denial Order (TDO) suspending the export privileges of three U.S.-based companies, Quicksilver Manufacturing Inc., Rapid Cut LLC, and U.S. Prototype Inc., for an additional 180 days for the unauthorized export to China of technical drawings and blueprints used to 3-D print satellite, rocket, and defense-related prototypes. This order denies Quicksilver Manufacturing Inc., Rapid Cut LLC, and U.S. Prototype Inc. all of the export privileges described in part 764 of the Export Administration Regulations (EAR), which include (but are not limited to) applying for, obtaining, or using any license, license exception, or export control document, or engaging in or benefitting from such transactions, in order to prevent imminent violations of the EAR. The order cuts off not only the companies’ ability to export from the United States, but also their ability to receive or participate in exports from the United States. As described in the TDO, Quicksilver Manufacturing Inc., Rapid Cut LLC, and U.S. Prototype Inc., collectively utilizing the same rental mailbox, received export-controlled drawings from their domestic customers to 3-D-print requested items. Without their customers’ advance consent or knowledge, these drawings were provided to manufacturers in China to 3-D-print the items without the required U.S. Government authorizations. The items were then imported into the United States to be provided to the ordering customers. The information illegally sent to China included sensitive prototype space and defense technologies. As set forth in the TDO, U.S. customers are also advised that they are prohibited from taking any action that facilitates Quicksilver Manufacturing Inc., Rapid Cut LLC, or U.S. Prototype Inc. taking possession or control of items subject to the EAR that are intended for export.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1430-e2772/file

 

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December 13, 2022: Matthew S. Axelrod, Assistant Secretary of Commerce for Export Enforcement, issued a Temporary Denial Order (TDO) immediately suspending the export privileges of three persons: Boris Livshits, Svetlana Skvortsova, and Aleksey Ippolitov; and two companies: Advanced Web Services, and Strandway, LLC, for 180 days for the unauthorized export of sensitive items subject to the Export Administration Regulations (EAR) to Russia.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3194-2022-12-13-bis-press-release-russian-network-tdo/file and https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1431-livshits-tdo-signed-final-12-13-2022/file

 

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December 13, 2022: Assistant Secretary of Commerce for Export Enforcement Matthew Axelrod has renewed a Temporary Denial Order (TDO) suspending the export privileges of Belavia Belarusian Airlines for an additional 180 days. BIS' request for renewal was based upon the facts underlying the issuance of the initial TDO and the evidence developed over the course of its investigation, which indicate a blatant disregard for U.S. export controls, as well as the TDO. Specifically, the initial TDO, issued on June 16, 2022, was based on evidence that Belavia engaged in conduct prohibited by the Export Administration Regulations by operating multiple aircraft subject to the EAR and classified under ECCN 9A991.b on flights into Belarus after April 8, 2022, from destinations including but not limited to, Moscow, Russia; St. Petersburg, Russia; Antalya, Turkey; Istanbul, Turkey; Tbilisi, Georgia; Batumi, Georgia; Sharjah, United Arab Emirates; and Sharm el-Sheikh, Egypt, without the required BIS authorization. BIS’s evidence and related investigation indicated that after the issuance of the TDO, Belavia continued to fly aircraft into Belarus in violation of the EAR, including flights from St. Petersburg and Moscow Russia; Istanbul, Turkey; and Sharjah, UAE.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1432-e2774/file

 

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December 13, 2022: 87 Fed. Reg. 77067: The Bureau of Industry and Security (“BIS”), U.S. Department of Commerce, through its Office of Export Enforcement (“OEE”), has requested the issuance of an Order temporarily denying, for a period of 180 days, the export privileges under the Regulations of: Boris Livshits, Svetlana Skvortsova, Aleksey Ippolitov, Advanced Web Services, and Strandway, LCC (“Strandway”). OEE's request and related information indicates that these parties are located in the Russian Federation and New York.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1431-livshits-tdo-signed-final-12-13-2022/file

 

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December 16, 2022: 87 Fed. Reg. 76924: The Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) by removing 9 persons from the Unverified List (UVL) and adding them to the Entity List, all under the destination of Russia. BIS has been unable to verify the bona fides of all 9 persons being removed from the UVL and added to the Entity List, due to the foreign government's prevention of timely end-use checks. BIS is also amending the EAR by removing 27 persons from the UVL, one under the destination of Pakistan and 26 under the destination of China, because BIS was able to verify their bona fides.

The End User Review Committee determined to add the following entities to the Entity List pursuant to §  744.11(b)(4)(ii) under the destination of Russia:

• Alliance EG Ltd.;
• FSUE Rosmorport Far Eastern Basin Branch;
• Intercom Ltd.;
• Nasosy Ampika;
• Nuclin LLC;
• SDB IRE RAS;
• Security 2 Business Academy;
• Tavrida Microelectronics; and
• VIP Technology Ltd.

BIS removed the following 27 persons from the UVL after BIS was able to verify their bona fides. This rule removes ENGRO Polymer & Chemicals Limited under the destination of Pakistan and the following 26 persons under the destination of China:

• Beijing Naura Magnetoelectric Technology Co., Ltd.;
• CCIC Southern Electronic Product Testing Co., Ltd.;
• Center for High Pressure Science and Technology Advanced Research;
• Changchun National Extreme Precision Optics Co., Ltd.;
• Chinese Academy of Geological Sciences, Institute of Mineral Resources;
• Chinese Academy of Science (CAS) Institute of Chemistry;
• Dongguan Durun Optical Technology Co., Ltd.;
• Foshan Huaguo Optical Co., Ltd.;
• Guangdong University of Technology;
• Guangxi Intai Technology Co., Ltd.;
• Guangxi Yuchai Machinery Co., Ltd.;
• Guangzhou Hymson Laser Technology Co., Ltd.;
• Heshan Deren Electronic Technology Co., Ltd.;
• Hubei Longchang Optical Co., Ltd.;
• Hubei Sinophorus Electronic Materials Co., Ltd.;
• Kunshan Heng Rui Cheng Industrial Technology;
• Shanghai Fansheng Optoelectronic Science & Technology Co. Ltd.;
• Shanghai Micro Electronics Equipment (Group) Co., Ltd.;
• ShanghaiTech University;
• Southern University of Science and Technology, Department of Mechanical and Energy Engineering; University of Chinese Academy of Sciences, School of Chemical Sciences;
• University of Shanghai for Science and Technology;
• Vital Advanced Materials Co., Ltd.;
• Wuhan Juhere Photonic Tech Co., Ltd.;
• Wuxi Biologics (Shanghai) Co., Ltd.; and
• Zhongshan Thincloud Optics Co., Ltd.

https://www.federalregister.gov/documents/2022/12/16/2022-27149/revisions-to-the-unverified-list-and-the-entity-list

 

December 19, 2022: 87 Fed. Reg. 77505: The Department of Commerce is amending the Export Administration Regulations (EAR) by adding thirty-six entities 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 destinations of the People's Republic of China (China) and Japan. This rule also revises three entries on the Entity List under the destination of China. Lastly, as a conforming change to the addition of one entity to the Entity List under the destination of China, this rule removes this entity from the Unverified List (UVL). The entity is being added to the Entity List for reasons not related to the prevention of an end-use check and is removed from the UVL for consistency with the existing policy of not listing an entity on more than one of these lists at the same time.

 

BIS added the following thirty-six entities to the Entity List:

China
• Anhui Cambricon Information Technology Co., Ltd.;
• AVIC Research Institute for Special Structures of Aeronautical Composites;
• AZUP International Group Co., Ltd.;
• Beijing HiFar Technology Co., Ltd.;
• Beijing Machinery Industry Automation Research Institute Co., Ltd.;
• Beijing UniStrong Science & Technology Co., Ltd.;
• Beijing Vision Strategy Technology Co., Ltd.;
• Cambricon (Hong Kong) Co., Ltd.;
• Cambricon (Kunshan) Information Technology Co., Ltd.;
• Cambricon Jixingge (Nanjing) Technology Co., Ltd.;
• Cambricon (Nanjing) Information Technology Co., Ltd.;
• Cambricon Technologies Corporation Limited;
• Cambricon (Xi'an) Integrated Circuit Co., Ltd.;
• CETC Cloud (Beijing) Technology Co., Ltd.;
• CETC LES Information System Group Co., Ltd.;
• China Electronics Technology Group Corporation No. 28 Institute;
• Chinese Academy of Sciences Institute of Computing Technology;
• Guangdong Qinzhi Technology Research Institute Co., Ltd.;
• Hefei Core Storage Electronic Ltd.;
• Key Laboratory of Information Systems Engineering;
• Nanjing Aixi Information Technology Co., Ltd.;
• Nanjing LES Cybersecurity and Information Technology Research Institute Co., Ltd.;
• Nanjing LES Electronic Equipment Co., Ltd.;
• Nanjing LES Information Technology Co., Ltd.;
• PXW Semiconductor Manufactory Co., Ltd.;
• Shanghai Cambricon Information Technology Co., Ltd.;
• Shanghai Integrated Circuit Research and Development Center;
• Shanghai Micro Electronics Equipment (Group) Co., Ltd.;
• Shanghai Suowei Information Technology Co., Ltd.;
• Suzhou Cambricon Information Technology Co., Ltd.;
• System Equipment Co., Ltd. of the 28th Research Institute (Liyang);
• Tianjin Tiandi Weiye Technologies Co., Ltd.;
• Xiong'an Cambricon Technology Co., Ltd.;
• Yangtze Memory Technologies Co., Ltd.; and
• Zhongke Xinliang (Beijing) Technology Co., Ltd.
Japan
• Yangtze Memory Technologies (Japan) Inc.

https://www.federalregister.gov/documents/2022/12/19/2022-27151/additions-and-revisions-to-the-entity-list-and-conforming-removal-from-the-unverified-list

 

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December 21, 2022: The Commerce Department’s Bureau of Industry and Security (BIS) released a rule modifying the existing Entity List restrictions for the Russia-based Private Military Company Wagner (“Wagner Group”) resulting in the imposition of additional severe restrictions on the Wagner Group’s ability to acquire items globally to support the Russian government’s unprovoked war in Ukraine and ensuring that the license requirements apply to Wagner Group wherever located worldwide.

“The Wagner Group is one of the most notorious mercenary organizations in the world and is actively committing atrocities and human rights abuses across Ukraine,” said Under Secretary of Commerce for Industry and Security Alan Estevez. “Today we are sending a clear message to non-state actors seeking to pick up the baton of brutality from Putin’s faltering military that the Department of Commerce will not hesitate to act against them.” “BIS designates Russian and Belarusian military end users to make crystal clear which entities are a threat to Ukraine and need to be denied access to our technologies,” said Assistant Secretary of Commerce for Export Administration Thea D. Rozman Kendler. “The ongoing brutality and lawlessness of the Wagner Group in support of Russia’s unconscionable assault on Ukraine warrants the imposition of these severe restrictions.”

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3200-2022-12-21-bis-press-release-wagner-group-entity-listing-modification/file and https://www.federalregister.gov/public-inspection/2022-28033/modification-to-the-entity-list

 

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December 20, 2022: Assistant Secretary of Commerce for Export Enforcement Matthew Axelrod has renewed Temporary Denial Orders (TDOs) suspending the export privileges of the following three Russia-affiliated airlines for an additional 180 days based on evidence that they continue to operate in violation of their original TDOs and/or the EAR by operating aircraft subject to the EAR and classified under ECCN 9A991.b:
• Siberian Airlines d/b/a S7 Airlines;
• Pobeda Airlines; and
• Norwind Airlines.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1435-e2777/file and https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1436-e2778/file and https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1437-e2779/file

 

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

 

December 1, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action against two individuals and two companies based in Lebanon for providing financial services to Hizballah, along with an additional individual involved in facilitating weapons procurement for Hizballah. These designations target individuals and companies that manage and enable Hizballah’s overarching financial apparatus operating throughout Lebanon, including Al-Qard Al-Hassan (AQAH) and Hizballah’s Central Finance Unit. U.S.-designated AQAH is Hizballah’s quasi-financial institution, and Hizballah’s Central Finance Unit oversees the terrorist group’s budget within Hizballah’s Executive Council at the direction of Hizballah’s leader, Hassan Nasrallah. OFAC also sanctioned three individuals for being officials of the Workers’ Party of Korea (WPK). These individuals have provided support to the Democratic People’s Republic of Korea’s (DPRK) development of weapons of mass destruction (WMD) and ballistic missiles.

 

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

• Jon, Il Ho of North Korea;
• Khalil, Hassan of Lebanon;
• Kim, Su Gil of North Korea;
• Mansour, Adel Mohamad of Lebanon;
• Neser, Naser Hassan of Lebanon; and
• Yu, Jin of Nother Korea.

 

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

• Al-Khobara For Accounting, Auditing, And Studies of Lebanon; and
• The Auditors For Accounting And Auditing of Lebanon.

 

https://home.treasury.gov/news/press-releases/jy1135 and https://home.treasury.gov/news/press-releases/jy1134 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221201

 

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December 2, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Haitian nationals Rony Celestin (Celestin) and Richard Lenine Hervé Fourcand (Fourcand) pursuant to Executive Order (E.O.) 14059 of December 15, 2021, “Imposing Sanctions on Foreign Persons Involved in the Global Illicit Drug Trade.” Celestin is a current Haitian senator. Fourcand is a former Haitian senator.

 

OFAC designated Celestin and Fourcand 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. The Government of Canada also designated Celestin and Fourcand.

 

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

• Celestin, Rony of Haiti; and
• Fourcand, Herve of Haiti.

 

https://home.treasury.gov/news/press-releases/jy1137 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221202

 

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December 9, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Global Magnitsky General License 3, "Authorizing Transactions Related to Debt or Equity of Pingtan Marine Enterprise Ltd." and Global Magnitsky General License 4, "Authorizing the Wind Down of Transactions Involving Certain Vessels." OFAC is also issuing three Global Magnitsky-related Frequently Asked Questions (FAQs 1100 - 1102).

 

Global Magnitsky General License 3: All transactions prohibited by the Global Magnitsky Sanctions Regulations, 31 CFR part 583 (GMSR), that are ordinarily incident and necessary to the divestment or transfer, or facilitation of the divestment or transfer, of debt or equity of Pingtan Marine Enterprise Ltd. (PME) to a non-U.S. person are authorized through 12:01 a.m. eastern standard time, March 9, 2023.

 

All transactions prohibited by the GMSR that are ordinarily incident and necessary to facilitating, clearing, and settling trades of debt or equity of PME that were placed prior to 4:00 p.m. eastern standard time, December 9, 2022, are authorized through 12:01 a.m. eastern standard time, March 9, 2023.

 

All transactions prohibited by the GMSR that are ordinarily incident and necessary to the wind down of financial contracts or other agreements linked to the debt or equity of PME and entered into prior to 4:00 p.m. eastern standard time, December 9, 2022 are authorized through 12:01 a.m. eastern standard time, March 9, 2023, provided that any payments to a blocked person are made into a blocked account in accordance with the GMSR.

 

https://home.treasury.gov/system/files/126/glomag_gl3.pdf

 

Global Magnitsky General License 4: All transactions ordinarily incident and necessary to the wind down of any transaction involving any vessel in which any of the following blocked entities have an interest that are prohibited by the Global Magnitsky Sanctions Regulations, 31 CFR part 583 (GMSR), are authorized through 12:01 a.m. eastern standard time, March 9, 2023, provided that any payment to a blocked person must be made into a blocked account in accordance with the GMSR:
(1) Dalian Ocean Fishing Co., Ltd.;
(2) Fujian Provincial Pingtan County Ocean Fishing Group Co., Ltd.;
(3) Fuzhou Honglong Ocean Fishing Co., Ltd.;
(4) Pingtan Marine Enterprise Ltd.; or
(5) 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.

 

This general license does not authorize the entry into any new commercial contracts involving the entities or vessels described above. Any transactions otherwise prohibited by the GMSR, including transactions involving any person blocked pursuant to the GMSR other than the blocked entities described above, unless separately authorized.

 

https://home.treasury.gov/system/files/126/glomag_gl4.pdf

 

Question 1102: Do non-U.S. persons risk exposure to U.S. sanctions for engaging in transactions that U.S. persons would be authorized to engage in under Global Magnitsky General Licenses 3 and 4?

Answer: No. Non-U.S. persons may engage in the transactions authorized for U.S. persons by Global Magnitsky General License (GL) 3 and wind down transactions with the blocked persons specified in GL 4, without exposure to sanctions under Executive Order (E.O.) 13818 or the Global Magnitsky Sanctions Regulations, 31 CFR part 583, provided that such activity is consistent with those GLs. Further, such transactions involving non-U.S. persons may be processed through the U.S. financial system or involve U.S. persons as long as the transactions comply with the terms and conditions in GLs 3 and 4. Non-U.S. persons unable to wind down transactions in accordance with GLs 3 and 4 before 12:01 a.m. eastern standard time, March 9, 2023, are encouraged to seek guidance from OFAC before that date.

 

Question 1101: What activity does Global Magnitsky General License 4 authorize?

Answer: On December 9, 2022, OFAC designated, pursuant to Executive Order (E.O.) 13818, several persons, including Dalian Ocean Fishing Co., Ltd.; Fujian Provincial Pingtan County Ocean Fishing Group Co., Ltd.; Fuzhou Honglong Ocean Fishing Co. Ltd.; and Pingtan Marine Enterprise Ltd. Concurrent with this action, OFAC issued Global Magnitsky General License (GL) 4, which authorizes all transactions ordinarily incident and necessary to the wind down of any transaction involving any vessel in which any of these blocked entities have an interest that would otherwise be prohibited by the Global Magnitsky Sanctions Regulations, 31 CFR part 583, through 12:01 a.m. eastern standard time, March 9, 2023, provided that any payment to a blocked person must be made into a blocked account in accordance with OFAC sanctions regulations.

The wind-down authorization in GL 4 contemplates, for example, completion of ongoing voyages, including the discharge of cargo aboard such vessels to non-blocked persons; docking or anchoring of the vessels at third-country, non-sanctioned ports; transactions related to the safety and maintenance of such vessels, such as entering into certain contracts to pay for insurance coverage, flagging, and safety and compliance inspections during the wind-down period; and transactions related to the health and safety of any crew, including the provision and processing of wages or other employee benefits, or other provision of crewing services.

After the expiration of this authorization, persons will be prohibited from engaging in such wind-down transactions with the blocked persons or vessels, unless exempt or otherwise authorized by OFAC. Persons unable to wind down transactions with the blocked persons or vessels specified in GL 4 before 12:01 a.m. eastern standard time, March 9, 2023, are encouraged to seek guidance from OFAC before that date.

 

Question 1100: I am a U.S. person that owns debt or equity, including publicly traded shares, in Pingtan Marine Enterprise, Ltd. (PME), which was designated under Executive Order (E.O.) 13818. What actions am I authorized to take under Global Magnitsky General License 3?

Answer: Pursuant to Global Magnitsky General License (GL) 3, U.S. persons are authorized to engage in certain transactions that would otherwise be prohibited by the Global Magnitsky Sanctions Regulations, 31 CFR part 583, ordinarily incident and necessary to the divestment or transfer, or facilitation of the divestment or transfer, of debt or equity of PME to a non-U.S. person through 12:01 a.m. eastern standard time, March 9, 2023.

GL 3 also authorizes transactions ordinarily incident and necessary to facilitating, clearing, and settling trades of debt or equity of PME that were placed prior to 4:00 p.m. eastern standard time, December 9, 2022, through 12:01 a.m. eastern standard time, March 9, 2023.

GL 3 also authorizes, through 12:01 a.m. eastern standard time, March 9, 2023, transactions ordinarily incident and necessary to the wind down of financial contracts or other agreements linked to the debt or equity of PME and entered into prior to 4:00 p.m. eastern standard time, December 9, 2022, provided that any payments to a blocked person are made into a blocked account in accordance with OFAC sanctions regulations. This authorization includes transactions ordinarily incident and necessary to the delisting of PME from a U.S. securities exchange. However, GL 3 does not authorize U.S. persons to sell or facilitate the sale of debt or equity of PME to, directly or indirectly, any person whose property and interests in property are blocked, including Xinrong Zhuo, who was designated on the same day and is PME’s chairman and CEO, among other things. U.S. persons unable to wind down transactions in accordance with GL 3 before 12:01 a.m. eastern standard time, March 9, 2023, are encouraged to seek guidance from OFAC before that date.

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-12-09

 

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two individuals, Li Zhenyu and Xinrong Zhuo, and the networks of entities they control, including Dalian Ocean Fishing Co., Ltd. and Pingtan Marine Enterprise, Ltd. (Nasdaq: PME) along with eight other affiliated entities. Additionally, this action identifies 157 People’s Republic of China (PRC) flagged fishing vessels in which these entities have an interest.

 

As a result, the following names have been added to OFAC's list of Specially Designated Nationals:

• Li, Zhenyu of China; and
• Zhuo, Xinrong of China.

 

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

• Dalian Ocean Fishing Company Limited of China;
• Fujian Heyue Marine Fishing Development Co., Ltd. of China;
• Fujian Provincial Pingtan County Ocean Fishing Group Co., Ltd. of China;
• Fuzhou Honglong Ocean Fishing Co., Ltd. of China;
• Heroic Treasure Limited of the British Virgin Islands;
• Mars Harvest Co., Ltd., of the British Virgin Islands;
• Merchant Supreme Co., Ltd., of the British Virgin Islands;
• Pingtan Guansheng Ocean Fishing Co., Ltd. of China;
• Pingtan Marine Enterprise Ltd., of the Cayman Islands; and
• Prime Cheer Corporation Ltd. of China.

 

OFAC added one-hundred and fifty-seven Chinese fishing vessels to its SDN List.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221209 and https://home.treasury.gov/news/press-releases/jy1154

 

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December 9, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), in recognition of International Anti-Corruption Day and Human Rights Day, is sanctioning a diverse array of over 40 individuals and entities that are connected to corruption or human rights abuse across nine countries.

 

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

• Andreev, Pavel Viktorovich of Russia;
• Borisov, Igor Borisovich of Russia;
• Budarina, Natalya Alekseevna of Russia and Germany;
• Bulaev, Nikolay Ivanovich of Russia;
• Castro Ramirez, Conan Tonathiu of El Salvador;
• Castro, Oscar Rolando of El Salvador;
• Chang Navarro, Luis Alfonso of Guatemala;
• Chol, Kim Myong of France;
• Conde, Alpha of Turkey and Guinea;
• Ebzeev, Boris Safarovich of Russia;
• Jadhav, Deepak of India;
• Javidan, Ali Akbar of Iran;
• Karam Azizi, ALLAH of Iran;
• Keita, Karim of the Cote d Ivoire, Mali and France;
• Khaimourzina, Elmira Abdulbarievna of Russia;
• Kim, Yevgeniy Radionovich of Russia;
• Kolyushin, Yevgeny Ivanovich of Russia;
• Kouchakzaei, Ebrahim of Iran;
• Kurdiumov, Aleksandr Borisovich of Russia;
• Levichev, Nikolay Vladimirovich of Russia;
• Lopatin, Anton Igorevich of Russia;
• Markina, Liudmila Leonidovna of Russia;
• Mazurevskii, Konstantin Sergeevich of Russia;
• Mongush, Ochur-Suge Terimovich of Russia;
• Nesterov, Oleg Yuryevich of Russia and the Ukraine;
• Pamfilova, Ella Aleksandrovna of Russia and Uzbekistan;
• Quiboloy, Apollo Carreon, Davao of the Philippines;
• Rodriguez Reyes, Allan Estuardo of Guatemala;
• Sereda, Marina Konstantinovna of Russia and the Ukraine;
• Shevchenko, Yevgeny Aleksandrovich of Russia;
• Shutov, Andrey Yurievich of Russia;
• Vargas Morales, Jorge Estuardo of Guatemala;
• Wu, Yingjie of China;
• Zaitseva, Lyudmila Nikolaevna of Russia;
• Zhang, Hongbo of China.

 

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

• 924th State Center For UAV Aviation of Russia;
• Central Election Commission Of The Russian Federation of Russia;
• Command Of The Military Transport Aviation of Russia;
• Everlasting Empire Limited of China;
• Fujian Nanan Import And Export Corporation of China;
• Funsaga PTE LTD., of Singapore;
• Kinoatis LLC of Russia;
• Konijane Strategic Marketing of the Cote d Ivoire;
• Ministry Of State Security Border Guard General Bureau of North Korea;
• Quanzhou Yiyangjin Import And Export Trade CO., LTD., of China;
• Russian Aerospace Forces of Russia;
• Tian Fang Hong Kong Holdings Limited of China; and
• Yancheng Three Line One Point Animation CO., LTD., of China.

 

https://home.treasury.gov/news/press-releases/jy1155 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221209_33

 

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December 12, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) made the following additions to its Specially Designated Nationals List.

 

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

• Chimuka, Obey of Zimbabwe;
• Magwizi, Nqobile, Unwinsdale Dr., of Zimbabwe;
• Mnangagwa, JR., Emmerson Dambudzo of Zimbabwe; and
• Mpunga, Sandra of Zimbabwe.

 

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

• Fossil Agro of Zimbabwe; and
• Fossil Contracting of Zimbabwe.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221212

 

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December 14, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Counter Terrorism General License 21A "Authorizing Limited Safety and Environmental Transactions Involving Certain Vessels" and amending one Counter Terrorism Frequently Asked Question (1097).

 

Counter Terrorism General License 21A: All transactions that are ordinarily incident and necessary to one of the following activities involving the persons or vessels described below of this general license that are prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), are authorized through 12:01 a.m. eastern standard time, January 14, 2023, 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.;
• Blue Berri Shipping Inc.;
• Harbour Ship Management Limited;
• Pontus Navigation Corp.;
• Technology Bright International Ltd.; and
• Vista Clara Shipping Corp.

 

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

Answer: GL 21A 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 21A involving certain blocked persons and vessels through 12:01 a.m. eastern standard time, January 14, 2023. GL 21A does not authorize the offloading of any cargo onboard any of the blocked vessels listed in GL 21A, 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 21A, U.S. persons will be prohibited from engaging in any transactions with the blocked persons or vessels listed in GL 21A, unless otherwise exempt or authorized by OFAC. U.S. persons unable to conclude transactions authorized by GL 21A before 12:01 a.m. eastern standard time, January 14, 2023, 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 21A before 12:01 a.m. eastern standard time, January 14, 2023, are encouraged to seek guidance from OFAC.

Additionally, the following name has been added to OFAC's list of Specially Designated Nationals:

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

• Calderon Rijo, Jose of the Dominican Republic.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221214 and https://home.treasury.gov/system/files/126/ct_gl21a.pdf and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1097

 

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December 15, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 8E,"Authorizing Transactions Related to Energy," General License 58, "Authorizing the Wind Down and Rejection of Transactions Involving Public Joint Stock Company Rosbank," and General License 59, "Authorizing Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Public Joint Stock Company Rosbank." OFAC is also publishing two Frequently Asked Questions (1103 & 1104).

 

General License 8E: 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 16, 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) Public Joint Stock Company Rosbank;
(8) 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
(9) the Central Bank of the Russian Federation.

 

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

 

https://home.treasury.gov/system/files/126/russia_gl8e.pdf

 

General License 58: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of transactions involving Public Joint Stock Company Rosbank, or any entity in which Public Joint Stock Company Rosbank owns, directly or indirectly, a 50 percent or greater interest (“Rosbank entities”), are authorized through 12:01 a.m. eastern daylight time, March 15, 2023, provided that any payment to a Rosbank entity is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).

 

U.S. persons are authorized to reject, rather than block, all transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the processing of funds involving one or more Rosbank entities as an originating, intermediary, or beneficiary financial institution, through 12:01 a.m. eastern daylight time, March 15, 2023.

 

https://home.treasury.gov/system/files/126/russia_gl58.pdf

 

General License 59: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the divestment or transfer, or the facilitation of the divestment or transfer, of debt or equity of Public Joint Stock Company Rosbank (Rosbank), or any entity in which Rosbank owns, directly or indirectly, a 50 percent or greater interest (“covered debt or equity”), to a non-U.S. person are authorized through 12:01 a.m. eastern daylight time, March 15, 2023.

 

All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to facilitating, clearing, and settling trades of covered debt or equity that were placed prior to 4:00 p.m. eastern standard time, December 15, 2022, are authorized through 12:01 a.m. eastern daylight time, March 15, 2023.

 

All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the wind down of derivative contracts entered into prior to 4:00 p.m. eastern standard time, December 15, 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, March 15, 2023, 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_gl59.pdf

 

Question 1103: Is there a wind-down period for transactions involving Public Joint Stock Company Rosbank (Rosbank), which was blocked on December 15, 2022 pursuant to Executive Order (E.O.) 14024? What transactions are authorized during the wind-down period?

Answer: OFAC issued General Licenses (GL) 58 and 59 concurrent with the designation of Rosbank. GL 58 authorizes a wind-down period for transactions involving Rosbank or any entity in which Rosbank owns, directly or indirectly, a 50 percent or greater interest (“Rosbank entities”) until 12:01 a.m. eastern daylight time, March 15, 2023. This includes transactions ordinarily incident and necessary to exit operations, contracts, or other agreements involving Rosbank entities that were in effect prior to December 15, 2022, provided that such transactions do not involve a debit to a blocked account on the books of a U.S. financial institution (see Frequently Asked Question (FAQ) 990). Wind-down activities covered by GL 58 do not include the continued processing of funds transfers, securities trades, or other transactions that involve a Rosbank entity that were part of ongoing business activities prior to the imposition of sanctions, unless separately authorized (see, e.g., GLs 6B, 8E, or 59).
In addition, GL 58 authorizes U.S. persons, including U.S. financial institutions, to reject, rather than block, all transactions ordinarily incident and necessary to the processing of funds involving one or more Rosbank entities as an originating, intermediary, or beneficiary financial institution, through 12:01 a.m. eastern daylight time, March 15, 2023. For individuals holding accounts at Rosbank entities, see FAQ 1080 for guidance, including GL 50, which authorizes individuals to engage in all transactions ordinarily incident and necessary to close their individual accounts held at a financial institution blocked pursuant to E.O. 14024.

GL 59 authorizes U.S. persons to divest or transfer holdings in securities of Rosbank entities to non-U.S. persons, as well as the wind down of certain derivative contracts, subject to certain conditions. Please see GL 59 for additional details.

 

Question 1104: Is Norilsk Nickel blocked as a result of the designation of Vladimir Potanin?

Answer: No. OFAC has not designated Norilsk Nickel and, based on information available to OFAC as of December 15, 2022, Norilsk Nickel is not owned 50% or more by blocked persons or otherwise considered the blocked property of Vladimir Potanin.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-12-15

 

In addition, OFAC has updated the following lists:

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

• Alekseenko, Andrey Anatolevich of Russia;
• Alikhanov, Anton Andreyevich of Russia;
• Artamonov, Igor Georgiyevich of Russia;
• Artyukhov, Dmitriy Andreevich of Russia;
• Avdeyev, Aleksandr Aleksandrovich of Russia;
• Azarov, Dmitriy Igorevich of Russia;
• Belousov, Andrey Removich of Russia;
• Belozyorov, Oleg Valentinovich of Russia and Latvia;
• Bobryshev, Volodymyr Mykhailovych of Russia and the Ukraine;
• Bocharov, Andrey Ivanovich of Russia;
• Bogomaz, Aleksandr Vasilyevich of Russia;
• Chernyshenko, Dmitriy Nikolaevich of Russia;
• Drozdenko, Aleksandr Yuryevich of Russia and Kazakhstan;
• Egorov, Maksim Borisovich of Russia;
• Frank, Sergey Ottovich of Russia;
• Garkusha, Gennadiy Oleksandrovych of the Ukraine;
• Gladkov, Vyacheslav Vladimirovich of Russia;
• Golubev, Vasiliy Yuryevich of Russia;
• Gusev, Alexander Viktorovich of Russia;
• Khabirov, Radiy Faritovich of Russia;
• Kuvshinnikov, Oleg Aleksandrovich of Russia;
• Kuyvashev, Evgeniy Vladimirovich of Russia;
• Lipandin, Volodymyr Vitalyovych of the Ukraine;
• Moor, Aleksandr Viktorovich of Russia;
• Nikitin, Andrey Sergeyevich of Russia;
• Nikolayev, Aysen Sergeyevich of Russia;
• Nikolayev, Oleg Alekseyevich of Russia;
• Ostrovskiy, Alexey Vladimirovich of Russia;
• Pasler, Denis Vladimirovich of Russia;
• Potanin, Ivan Vladimirovich of Russia;
• Potanin, Vladimir Olegovich of Russia;
• Potanina, Anastasia Vladimirovna of Russia;
• Potanina, Ekaterina Viktorovna of Russia;
• Sazanov, Aleksey Valerevich of Russia;
• Starovoyt, Roman Vladimirovich of Russia;
• Teksler, Aleksey Leonidovich of Russia;
• Tomenko, Viktor Petrovich of Russia;
• Travnikov, Andrey Aleksandrovich of Russia;
• Uss, Alexander Viktorovich of Russia;
• Uss, Artem Alexandrovich of Russia;
• Uyba, Vladimir Viktorovich of Russia;
• Vladimirov, Vladimir Vladimirovich of Russia;
• Vorobyev, Andrey Yuryevich of Russia;
• Vorobyev, Maxim Yuryevich of Russia.

 

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

• Aktsionernoe Obshchestvo SG-Development of Russia;
• Amereus Group PTE LTD of Singapore;
• Embassy Development Limited of Jersey;
• Estate Managment Company Limited of Russia;
• ITC Consultants Cyprus Limited of Cyprus;
• Joint Stock Company Citybike of Russia;
• Joint Stock Company VTB DevelopmenT of Russia;
• Kholdingovaya Kompaniya Interros OOO of Russia;
• Kordex Joint Stock Company of Russia;
• Limited Liability Company VTB Commercial Finance of Russia;
• Limited Liability Company VTB Infrastructure Investments of Russia;
• Megacom Limited Liability Company of Russia;
• Ministry Of Emergency Situations Of The Donetsk People's Republic of the Ukraine;
• Obshchestvo S Ogranichennoi Otvetstvennostyu Dolgovoi Tsentr of Russia;
• Obshchestvo S Ogranichennoi Otvetstvennostyu Proekt of Russia;
• Obshchestvo S Ogranichennoi Otvetstvennostyu VTB Syryevye Tovary Kholding of Russia;
• Public Joint Stock Company Rosbank of Russia;
• Ryabinovaya OOO of Russia;
• VB-Service Company Limited of Russia;
• VTB Leasing Joint Stock Company of Russia; and
• VTB Real Estate Limited Liability Company of Russia.

 

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

• Nirvana (ZGBM) Yacht Cayman Islands flag; Vessel Registration Identification IMO 1011202.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221215

 

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December 16, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) made the following deletions have been made to OFAC's SDN List:

• Baldenegro Bastidas of Mexico;
Huerta Ramos, Manuel of Mexico;
• Huerta Ramos, Jesus Manuel of Mexico;
• Mejia Salazar, Pedro Claver of Colombia;
• Mejia Alzate, Victor Gabriel of Colombia;
• Arenera El Cerrejon of Colombia;
• Canteras Copacabana S.A., of Colombia;
• Tramco S.A., of Colombia;
• Tritcon S.A.S., of Colombia;
• Almequip S.A.S., of Colombia;
• Inversiones Meybar S.A.S., of Colombia;
• Promotora Turistica Sol Plaza S.A., of Colombia;
Hotel Sol Plaza of Colombia;
• Mejia Alzate Asociados Y CIA. LTDA., of Colombia;
• Bedoya Lopez, Gildardo de Jesus of Colombia;
• Representaciones Midas of Colombia;
• Garces Y Bedoya CIA. LTDA of Colombia;
• Hernandez Durango, Wilton Cesar of Colombia; and
• Euromecanica of Colombia.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221216

 

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December 20, 2022: Following this month’s adoption of United Nations Security Council Resolution (UNSCR) 2664, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took historic steps to further enable the flow of legitimate humanitarian assistance supporting the basic human needs of vulnerable populations while continuing to deny resources to malicious actors. The United States and Ireland co-led the development of UNSCR 2664, which implemented a carveout from the asset freeze provisions of UN sanctions programs. To implement this new policy across U.S. sanctions programs and as the first country in the world to implement the new UNSCR, OFAC issued or amended general licenses (GLs) to ease the delivery of humanitarian aid and ensure a baseline of authorizations for the provision of humanitarian support across many sanctions programs.

 

OFAC amended multiple regulations to add or revise certain general licenses (GLs) across a number of OFAC sanctions programs to ease the delivery of humanitarian aid. Specifically, OFAC issued or amended four GLs across a number of OFAC sanctions programs authorizing the following four categories of activities:

• The official business of the U.S. Government;
• The official business of certain international organizations and entities;
• Transactions in support of certain nongovernmental organizations’ activities; and
• The provision of agricultural commodities, medicine, medical devices, replacement parts and components, or software updates for medical devices for personal, non-commercial use.

 

OFAC separately updated a regulatory interpretation in several sanctions programs’ regulations to explain that the property and interests of property of an entity are blocked if one or more blocked persons own, whether individually or in the aggregate, directly or indirectly, a 50 percent or greater interest in the entity.

 

OFAC also published four new Frequently Asked Questions (FAQs 1105, 1106, 1107 and 1108) to accompany this action.

 

Question 1105: What actions did OFAC take to implement the United Nations Security Council Resolution (UNSCR) 2664 of December 9, 2022 relating to a new UN sanctions exception for humanitarian assistance?

Answer: On December 9, 2022, the United Nations (UN) Security Council adopted UNSCR 2664, which establishes a humanitarian carveout to the asset freeze measure across United Nations sanctions regimes. The carveout enables the flow of legitimate humanitarian assistance and activities supporting the basic human needs of vulnerable populations while continuing to deny resources to malicious actors. On December 20, 2022, OFAC announced the issuance or amendment of four categories of general licenses (GLs) that support the conduct of U.S. government and humanitarian-related activities across a number of sanctions programs, including in OFAC sanctions programs that implement UN sanctions regimes.

Specifically, across a number of sanctions programs, OFAC issued or amended four categories of GLs authorizing the following activities:
• the official business of the U.S. government;
• the official business of certain international organizations and entities;
• transactions incident to certain humanitarian and other activities by nongovernmental organizations; and
• the provision of food and other agricultural commodities, medicine, medical devices, replacement parts and components, or software updates for medical devices for personal, non-commercial use.

For more information on the sanctions programs covered by these new or amended GLs, please see the Federal Register. For information on specific exemptions or authorizations under a particular OFAC sanctions program, please see the relevant OFAC implementing regulations and OFAC’s Sanctions Programs and Country Information page.

For humanitarian-related activity that may fall outside the scope of these authorizations, OFAC considers specific license requests on a case-by-case basis and prioritizes license applications and other requests for guidance that are related to humanitarian activity. Please see OFAC’s License Application Page for additional details regarding the specific licensing process.

If individuals, nongovernmental organizations, international organizations, or other entities, including financial institutions, have questions about engaging in or processing transactions related to these authorizations, they may contact the OFAC Compliance Hotline by email OFAC_Feedback@treasury.gov or by phone at (800) 540-6322 or (202) 622-2490. As with specific license requests, OFAC prioritizes responding to questions related to humanitarian activity.

 

Question 1106: Are financial institutions permitted to provide banking services, including processing funds transfers, related to activities authorized under the four categories of the general licenses (GLs) outlined in FAQ 1105? What are OFAC’s diligence expectations of financial institutions seeking to engage in such activities?

Answer: U.S. financial institutions may operate accounts, including processing funds transfers, for persons engaging in activities authorized by the GLs related to: (i) the official business of the U.S. government, (ii) official business of certain international organizations and entities, (iii) certain humanitarian and other specified activities by nongovernmental organizations (NGOs), and (iv) the provision of agricultural commodities, medicine, medical devices, replacement parts and components, or software updates for medical devices for personal, non-commercial use. In assessing whether a particular transaction is in compliance with such GLs, financial institutions may reasonably rely upon the information available to them in the ordinary course of business, provided that the financial institution does not know or have reason to know that the transaction is outside the scope of the applicable GL.
Separately, non-U.S. persons, including NGOs and other entities, as well as foreign financial institutions facilitating or assisting these activities, do not risk exposure to U.S. sanctions for engaging in or facilitating transactions that are otherwise exempt or authorized for U.S. persons pursuant to these GLs.
For general information on OFAC’s due diligence expectations and compliance programs, please see A Framework for OFAC Compliance Commitments and FAQ 819.

If financial institutions have questions about engaging in or processing transactions related to these authorizations, they may contact the OFAC Compliance Hotline by email at OFAC_Feedback@treasury.gov or by phone at (800) 540-6322 or (202) 622-2490. OFAC prioritizes responding to questions related to humanitarian activity.

 

Question 1107: For purposes of the OFAC general licenses related to the official business of certain international organizations and entities (IO GLs), what organizations are included within the United Nations’ “Programmes, Funds, and Other Entities and Bodies, as well as its Specialized Agencies and Related Organizations”?

Answer: For an organizational chart of the United Nations (UN), which lists the UN Programmes, Funds, and Other Entities and Bodies, as well as its Specialized Agencies and Related Organizations, including the World Bank, please see this page on the UN website. The IO GLs also authorize the activities of the fund entities administered or established by the foregoing UN organizations, as well as the activities of the international organizations and entities themselves, in addition to the activities of their employees, contractors, and grantees.

 

Question 1108: Does OFAC’s issuance of general licenses (GLs) as outlined in FAQ 1105 restrict the scope of any existing exemptions or OFAC authorizations for humanitarian activities?

Answer: No. OFAC’s action of December 20, 2022 does not restrict the scope of any existing exemptions or OFAC authorizations for humanitarian activities, including existing general licenses authorizing certain NGO activities in sanctioned jurisdictions such as the Crimea Region of Ukraine, Iran, and Syria, which have not been amended by this action, and pre-existing web general licenses that have been incorporated into the relevant program regulations, such as Venezuela GL 20B. Persons conducting humanitarian activities pursuant to these programs may continue to rely on existing exemptions and OFAC authorizations, subject to the applicable conditions and limitations, which may differ by sanctions program.

For information on specific exemptions or authorizations under a particular OFAC sanctions program, please see the relevant OFAC implementing regulations and OFAC’s Sanctions Programs and Country Information page.

 

https://home.treasury.gov/news/press-releases/jy1175 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221220 and https://home.treasury.gov/system/files/126/usg_io_official_business_regulations_amendment.pdf and https://home.treasury.gov/system/files/126/usg_io_official_business_regulations_amendment.pdf and https://home.treasury.gov/system/files/126/humanitarian_standardization_regulations_amendment_ngo_ag_med.pdf and https://home.treasury.gov/system/files/126/humanitarian_standardization_regulations_amendment_ngo_ag_med.pdf and https://home.treasury.gov/system/files/126/usg_io_official_business_regulations_amendment.pdf and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-12-20

 

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December 21, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) published one Russia-related Frequently Asked Question (1109).

 

Question 1109: Are petroleum products of Russian Federation origin that are loaded onto a vessel at the port of loading for maritime transport prior to February 5, 2023, subject to the price cap?

Answer: No, provided the petroleum products are unloaded at the port of destination prior to 12:01 a.m., eastern daylight time, April 1, 2023. Petroleum products of Russian Federation origin that are loaded onto a vessel at the port of loading prior to 12:01 a.m., eastern standard time, February 5, 2023, and unloaded at the port of destination prior to 12:01 a.m., eastern daylight time, April 1, 2023, are not subject to the price cap. U.S. service providers can continue to provide services related to the maritime transport of petroleum products of Russian Federation origin purchased at a price above the price cap, provided that the petroleum products are loaded onto a vessel at the port of loading for maritime transport prior to 12:01 a.m., eastern standard time, February 5, 2023, and unloaded at the port of destination prior to 12:01 a.m., eastern daylight time, April 1, 2023.
The following is an example of a permissible transaction:
• A U.S. commodities trader signs a contract on January 1, 2023, to purchase petroleum products of Russian Federation origin for shipment to a jurisdiction that has not prohibited the import of such petroleum products. The U.S. commodities trader arranges for the petroleum products to be loaded onto a vessel at the port of loading. The vessel is loaded on February 1, 2023, and a bill of lading is issued. The petroleum products are shipped and discharged at the port of destination on February 15, 2023. U.S. insurance companies provide cover for this shipment/voyage and pay out any related claims, as appropriate.

OFAC anticipates implementing the price cap on petroleum products of Russian Federation origin 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 petroleum products of Russian Federation origin, where the price of such petroleum products of Russian Federation origin do not exceed the price cap and (ii) prohibits such services if the petroleum products of Russian Federation origin are purchased above the relevant price cap. This determination would take effect at 12:01 a.m., eastern standard time, February 5, 2023, with respect to maritime transport of petroleum products of Russian Federation origin loaded on or after 12:01 a.m., eastern standard time, February 5, 2023.

 

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

• Hassanzadeh, Hassan of Iran;
• Hosseini, Seyed Sadegh of Iran;
• Maroufi, Hossein of Iran;
• Moein, Moslem of Iran; and
• Montazeri, Mohammad Jafar of Iran.

 

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

• Imen Sanat Zaman Fara Company of Iran.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221221 and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1109

 

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December 22, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) sanctioned the following Russian Naval entities.

 

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

• Concern Morinformsystem Agat Joint Stock Company;
• Federal State Unitary Enterprise Central Research Institute Of Structural Materials Prometey Named By I.V. Gorynin Of National Research Center Kurchatov Institute ;
• Joint Stock Company Battery Company Rigel;
• Joint Stock Company Central Research Institute Of Marine Engineering;
• Joint Stock Company Concern Avrora Scientific And Production Association;
• Joint Stock Company Concern Central Institute For Scientific Research Elektropribor;
• Joint Stock Company Obukhovskoye ;
• Marine Bridge And Navigation Systems Ltd;
• P.P. Shirshov Institute Of Oceanology Of The Russian Academy Of Sciences; and
• Technopole Company.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221222

 

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December 28, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) made the following additions to the Specially Designated Nationals (SDN) list.

• Midco Finance S.A. of Switzerland and Panama;
• Midco Financial S.A. of Switzerl and Panama;
• Montana Management Inc. of Switzerland and Panama;
• Al-Dulaimi, Khalaf of Iraq;
• Al-Dulaymi, Khalaf M.M. of Iraq.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221228

 

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U.S. Department of State

 

December 5, 2022: 87 Fed. Reg. 74467: The U.S. Department of State continued the designation of HAMAS (and Other Aliases) as a Foreign Terrorist Organization.

 

https://www.federalregister.gov/documents/2022/12/05/2022-26333/review-of-the-designation-as-a-foreign-terrorist-organization-of-hamas-and-other-aliases?utm_source=federalregister.gov&utm_medium=email&utm_campaign=subscription+mailing+list

 

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December 5, 2022: 87 Fed. Reg. 74465: The U.S. Department of State imposed sanctions on Anna Sergeevna Ershova and Olga Sergeevna Sobyanina, a spouse or adult child of Sergey Semyonovich Sobyanin, a person blocked whose property and interests in property are blocked pursuant to subsection (a)(ii) or (iii) of Section 1 of E.O. 14024.

 

https://www.federalregister.gov/documents/2022/12/05/2022-26319/notice-of-department-of-state-sanctions-actions?utm_source=federalregister.gov&utm_medium=email&utm_campaign=subscription+mailing+list

 

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December 5, 2022: 87 Fed. Reg. 74466: The U.S. Department of State has sanctioned seven Russian individuals and six Russian entities.

 

The following individuals have been sanctioned:

• Kostyantyn Volodymyrovych Ivashchenko;
• Sergey Vladimirovich Yeliseyev;
• Volodymyr Vasilyovich Saldo;
• Kyrylo Serhiyovych Stremousov;
• Dmitriy Aleksandrovich Pumpyanskiy;
• Andrey Igorevich Melnichenko; and
• Alexander Anatolevich Ponomarenko.

 

The following entities have been sactioned.

• Joint Stock Company State Transportation Leasing Company;
• GTLK Asia Limited;
• GTLK Europe Capital Designated Activity Company;
• GTLK Europe Designated Activity Company;
• GTLK Middle East Free Zone Company; and
• Salvation Committee For Peace And Order.

 

The following vessel subject to U.S. jurisdiction is blocked:

• AXIOMA (Linked To: Dmitriy Aleksandrovich Pumpyanskiy).

 

https://www.federalregister.gov/documents/2022/12/05/2022-26321/notice-of-department-of-state-sanctions-actions?utm_source=federalregister.gov&utm_medium=email&utm_campaign=subscription+mailing+list

 

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December 5, 2022: 87 Fed. Reg. 74466: The U.S. Department of State has sanctioned twenty-nine Russian individuals:

• Halyna Viktorivna Danylchenko;
• Nikolay Valentinovich Andrianov;
• Vladimir Vladimirovich Artyakov;
• Natalya Vladimirovna Borisova;
• Vasily Yuryevich Brovko;
• Oleg Nikolaevich Evtushenko;
• Victor Nikolayevich Kiryanov;
• Yury Nikolayevich Koptev;
• Dmitry Yuryevich Lelikov;
• Vladimir Zalmanovich Litvin;
• Aleksander Yuryevich Nazarov;
• Pavel Mikhaylovich Osin;
• Aleksandr Nikolaevich Popov;
• Anatoly Eduardovich Serdyukov;
• Elena Oduliovna Sierra;
• Natalya Ivanova Smirnova;
• Sergey Anatolyevich Tsyb;
• Nikolai Anatolevich Volobuev;
• Maksim Vladimirovich Vybornykh;
• Igor Nikolaevich Zaviyalov;
• Dmitriy Vladimirovich Artyakov;
• Tatiana Vladimirovna Artyakova;
• Tina Kandelaki;
• Leontiy Andreyevich Kondrakhin;
• Melaniya Andreyevna Kondrakhina;
• Tatiana Borisovna Kiryanova;
• Sergey Anatolevich Serdyukov;
• Natalya Anatolevna Serdyukova; and
• Evgeniya Nikolaevna Vasileva.

 

https://www.federalregister.gov/documents/2022/12/05/2022-26318/notice-of-department-of-state-sanctions-actions?utm_source=federalregister.gov&utm_medium=email&utm_campaign=subscription+mailing+list

 

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December 5, 2022: 87 Fed. Reg. 74467: The U.S. Department of State has sanctioned twenty-three Russian individuals:

• Volodymyr Valeriyovych Rogov;
• Oleksandr Fedorovych Saulenko;
• Volodymyr Volodymyrovich Bandura;
• Valery Mykhailovych Pakhnyts;
• Mikhail Leonidovich Rodikov;
• Vladimir Aleksandrovich Bespalov;
• Pavlo Ihorovych Filipchuk;
• Tetyana Yuriivna Tumilina;
• Hennadiy Oleksandrovych Shelestenko;
• Oleksandr Yuriyovych Kobets;
• Ihor Ihorovych Semenchev;
• Tetyana Oleksandrivna Kuz'mych;
• Serhiy Mykolayovych Cherevko;
• Yevhen Vitaliiovych Balytskyi;
• Andrey Dmitrievich Kozenko;
• Oleksiy Sergeevich Selivanov;
• Andriy Leonidovich Siguta;
• Anton Robertovich Titskiy;
• Andriy Yuriovych Trofimov;
• Anton Viktorovich Koltsov;
• Mykyta Ivanovich Samoilenko;
• Viktor Andriyovych Emelianenko; and
• Maxim Stanislavovich Oreshkin.

 

https://www.federalregister.gov/documents/2022/12/05/2022-26320/notice-of-department-of-state-sanctions-actions?utm_campaign=subscription+mailing+list&utm_source=federalregister.gov&utm_medium=email

 

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Secretary of State Antony Blinken Designated Persons As Specially Designated Global Terrorists

 

December 15, 2022: 87 Fed. Reg. 76660: Acting under the authority of and in accordance with section 1(a)(ii)(B) of E.O. 13224 of September 23, 2001, as amended by E.O. 13268 of July 2, 2002, E.O. 13284 of January 23, 2003, and E.O. 13886 of September 9, 2019, Secretary of State Antony Blinken has determined that the persons known as Osama Mehmood (also known as Usama Mahmud, Abu Zar, Atta Ullah, Zar Wali); Atif Yahya Ghouri (also known as Yahya Shoaib Ghauri, Qari Atif, Qari Ibrahim, Atif Ghauri); and Muhammad Maruf (also known as Ali Hamzah, Maulana Musanna, Maulana Ubaidullah) are leaders of al-Qa’ida in the Indian Subcontinent, and the person known as Qari Amjad (also known as Mufti Hazrat, Mufti Muzahim) is a leader of Tehrik-e Taliban Pakistan, groups whose property and interests in property are currently blocked pursuant to a determination by the Secretary of State pursuant to E.O. 13224, and as such, he has designated them as Specially Designated Global Terrorists.

 

https://www.federalregister.gov/documents/2022/12/15/2022-27174/designation-of-osama-mehmood-atif-yahya-ghouri-muhammad-maruf-and-qari-amjad-as-specially-designated

 

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December 22, 2022: The Department of State is designating 10 Russian naval entities. This action imposes severe costs on Russia’s defense establishment in response to Putin’s unprovoked war of choice in Ukraine. Specifically, the Department of State has designated the following six entities pursuant to section 1(a)(i) of Executive Order (E.O.) 14024 for operating or having operated in both the defense and related materiel sector and the marine sector of the Russian Federation economy:
• Joint Stock Company Battery Company Rigel (RIGEL);
• Joint Stock Company Concern Central Institute For Scientific Research Elektropribor (ELEKTROPRIBOR);
• Joint Stock Company Concern Avrora Scientific And Production Association (AVRORA);
• Сoncern Morinformsystem Agat Joint Stock Company;
• Central Research Institute Of Structural Materials Prometey; and
• Joint Stock Company Central Research Institute Of Marine Engineering.

 

Additionally, the Department of State has designated the following four entities pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the marine sector of the Russian Federation economy:
• P.P. Shirshov Institute Of Oceanology Of The Russian Academy Of Sciences;
• Technopole Company;
• Joint Stock Company Obukhovskoye; and
• Marine Bridge And Navigation Systems LTD.

 

https://www.state.gov/the-united-states-imposes-sanctions-on-russian-naval-entities/

 

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Department of Homeland Security, U.S. Customs And Border Protection

 

December 27, 2022: The Department of Homeland Security, U.S. Customs and Border Protection (CBP) began detaining merchandise produced or manufactured by Jingde Trading Ltd., Rixin Foods, Ltd., and Zhejiang Sunrise Garment Group Co. Ltd. at all U.S. ports of entry on Dec. 5, 2022. This enforcement action is the result of a CBP investigation indicating that these companies use North Korean labor in their supply chains in violation of the Countering America’s Adversaries Through Sanctions Act (CAATSA).

 

https://www.cbp.gov/newsroom/national-media-release/cbp-enforces-countering-americas-adversaries-through-sanctions

 

Fines and Penalties

 

December 7, 2022: The U.S. Department of Justice unsealed a seven-count indictment in federal court in Brooklyn charging Andrii Derkach, 55, of Ukraine, with conspiracy to violate the International Emergency Economic Powers Acts (IEEPA), bank fraud conspiracy, money laundering conspiracy, and four counts of money laundering in connection with the purchase and maintenance of two condominiums in Beverly Hills, California. Derkach allegedly concealed his interest in the transactions and violated sanctions imposed in 2020. Derkach remains at large. The charges and forfeiture action include the first use of criminal and forfeiture powers targeting the concealment of ownership by senior foreign political officials, passed as part of the National Defense Authorization Act of 2021.

 

https://www.justice.gov/opa/pr/active-russian-agent-andrii-derkach-indicted-scheme-violate-sanctions-united-states

 

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December 13 2022: A 16-count indictment was unsealed in Brooklyn, charging five Russian nationals – including a suspected Federal Security Service (FSB) officer – and two U.S. nationals with conspiracy and other charges related to a global procurement and money laundering scheme on behalf of the Russian government in which the defendants allegedly conspired to obtain military-grade and dual-use technologies from U.S. companies for Russia’s defense sector, and to smuggle sniper rifle ammunition, in violation of new U.S. sanctions imposed earlier this year.

 

Yevgeniy Grinin, 44, of Moscow; Aleksey Ippolitov, 57, of Moscow; Boris Livshits, 52, of St. Petersburg; Svetlana Skvortsova, 41, of Moscow; Vadim Konoshchenok, 48, of St. Petersburg; Alexey Brayman, 35, of New Hampshire; and Vadim Yermolenko, 41, of New Jersey, are charged with conspiracy to defraud the United States as to the enforcement of export controls and economic sanctions; conspiracy to violate the Export Control Reform Act (ECRA); smuggling; and failure to comply with the Automated Export System relating to the transportation of electronics.

 

According to the indictment, the defendants unlawfully purchased and exported highly sensitive and heavily regulated electronic components, some of which can be used in the development of nuclear and hypersonic weapons, quantum computing and other military applications.

 

https://www.justice.gov/opa/pr/russian-military-and-intelligence-agencies-procurement-network-indicted-brooklyn-federal

 

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December 15, 2022: Arif Ugur (Ugur), 53, of Cambridge Massachusetts man was sentenced to 33 months in prison followed by two years of supervised release for a scheme to illegally export defense technical data to foreign nationals in Turkey in connection with the fraudulent manufacturing of parts and components used by the U.S. military, 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. On Aug. 10, 2022, 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.

 

According to court documents, in 2015, Ugur, founded and was the sole managing partner of the Anatolia Group Limited Partnership (Anatolia), a domestic limited partnership registered in Massachusetts. Beginning in approximately July 2015, Ugur bid on and acquired numerous contracts to supply the DOD with various parts and components intended for use by the U.S. military. Many of these contracts required that the parts be manufactured in the United States. Both in bids submitted to DOD and in subsequent email communications with DOD representatives, Ugur falsely claimed that Anatolia was manufacturing the parts in the United States. In fact, Anatolia was a front company with no manufacturing facilities whatsoever. Unbeknownst to DOD, Ugur contracted with a company in Turkey to make the parts and then passed them off to DOD as if they had been manufactured by Anatolia in the United States. Because they had not been manufactured in the United States in accordance with the contacts, Ugur failed to allow DOD to inspect the parts prior to delivery to the U.S. military. Many of the parts were substandard and some could not be used at all.

 

https://www.justice.gov/opa/pr/massachusetts-man-sentenced-wire-fraud-and-illegally-exporting-defense-articles-turkey

 

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December 19, 2022: UOP LLC, doing business as Honeywell UOP, a U.S.-based subsidiary of Honeywell International Inc., has agreed to pay more than $160 million to resolve parallel bribery investigations by criminal and civil authorities in the United States and Brazil stemming from bribe payments offered to a high-ranking official at Brazil’s state-owned oil company.

 

The U.S. Department of Justice’s resolution is coordinated with prosecutorial authorities in Brazil, as well as the U.S. Securities and Exchange Commission (SEC).

 

According to court documents, Honeywell UOP entered into a three-year deferred prosecution agreement (DPA) with the department in connection with criminal information filed in the Southern District of Texas charging the company with conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA).

 

According to the company’s admissions and court documents, between 2010 and 2014, Honeywell UOP conspired to offer an approximately $4 million bribe to a then-high-ranking executive of Petróleo Brasileiro S.A (Petrobras) in Brazil. Specifically, Honeywell UOP offered the bribe to secure improper advantages in order to obtain and retain business from Petrobras in connection with Honeywell UOP’s efforts to win an approximately $425 million contract from Petrobras to design and build an oil refinery called Premium.

 

https://www.justice.gov/opa/pr/honeywell-uop-pay-over-160-million-resolve-foreign-bribery-investigations-us-and-brazil

 

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December 20, 2022: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has issued Orders denying the export privileges of the following two individuals:

• Priscilla Bustos Martinez - Until Nov. 24, 2028 - On November 24, 2020, in the U.S. District Court for the Western District of Texas, Priscilla Bustos Martinez (“Martinez”) was convicted of violating 18 U.S.C. § 554. Specifically, Martinez was convicted of fraudulently and knowingly exporting and sending or attempting to export and send from the United States to Mexico, four .22 caliber pistols without obtaining a license or written authorization for such export. As a result of her conviction, the Court sentenced Martinez to 37 months in prison, with credit for time served, three years supervised release, and a $100 special assessment; and
• Jesse Cortez-Arguelles - Until Nov. 5, 2030 - On November 5, 2020, in the U.S. District Court for the District of Arizona, Jesse Cortez-Arguelles (“Cortez-Arguelles”) was convicted of violating 18 U.S.C. § 554(a). Specifically, Cortez-Arguelles was convicted of attempting to smuggle one 9 mm pistol, two 5.56 caliber rifles, two 9 mm firearm magazines, two 30-round 5.56 caliber firearm magazines, 1,030 rounds of 9 mm ammunition, and 1,000 rounds of 10 mm ammunition, in violation of 18 U.S.C. § 554. As a result of his conviction, the Court sentenced Cortez-Arguelles to 36 months of confinement, with credit for time served, three years of supervised release and a $100 special assessment.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1433-e2775/file and https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1434-e2776/file

 

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December 30, 2022: OFAC Settled with Danfoss A/S for $4,379,810 related to apparent violations of the Iran, Syria, and Sudan Sanctions Programs. Danfoss A/S (“Danfoss”), a multinational Danish company that manufactures and sells refrigeration products, air conditioners, compressors, and other cooling products, has agreed to pay $4,379,810 to settle its potential civil liability for 225 apparent violations of multiple OFAC sanctions programs. The apparent violations occurred when Danfoss FZCO, Danfoss’s wholly owned UAE subsidiary, directed customers in Iran, Syria, and Sudan to make payments to its bank account at the UAE branch of a U.S. financial institution (“U.S. Branch Account”) and when Danfoss FZCO made payments from that same account to entities in Iran and Syria. As a result of this conduct, Danfoss FZCO caused the U.S. financial institution to facilitate prohibited financial transactions and export financial services to sanctioned jurisdictions. The settlement amount reflects OFAC’s determination that the apparent violations were non-egregious and not voluntarily self-disclosed.

 

https://home.treasury.gov/system/files/126/20221230_danfoss.pdf and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221230_33

NOVEMBER 2022 EXPORT CONTROLS AND COMPLIANCE UPDATE

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

 

OCTOBER 2022 EXPORT CONTROLS AND COMPLIANCE UPDATE

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.

 

  1. 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.

 

  1. 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.

 

  1. 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;

 

  1. 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;

 

  1. 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

 

  1. 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

 

 

SEPTEMBER 2022 EXPORT CONTROL REGULATION UPDATES

This newsletter is a listing of the latest changes in export control regulations through September 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 Issues Executive Order Regarding Guidance On CIFIUS

 

September 15, 2022: President Biden issued an Executive Order (“EO”) on the interagency Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”) and guidance for ensuring robust national security reviews of foreign investment in the United States. The EO outlines five key factors that the Biden Administration is instructing the Committee to consider when conducting national security reviews of covered transactions:

  1. A transaction’s impact on U.S. supply chains. The EO directs CFIUS to consider how a proposed transaction could affect “the resilience of critical U.S. supply chains” and associated national security implications that could result from a shift in ownership, rights, or control to a foreign entity or person. The EO notes that this review should include sectors outside of the defense industrial base, including manufacturing capabilities, services, critical mineral resources, and technologies that could cause supply disruptions.
  2. A transaction’s effect on U.S. technological leadership in areas affecting U.S. national security. The EO instructs the Committee to take into consideration the protection of U.S. technological leadership in sectors that are critical to US national security, including microelectronics, artificial intelligence, biotechnology and biomanufacturing, quantum computing, advanced clean energy, and climate adaptation technologies. The EO acknowledges that foreign investment can aid domestic innovation but asks CFIUS to consider whether a transaction could result in technological or application advancements by foreign third parties that may undermine national security.
  3. Industry investment trends. The EO directs the Committee to view proposed transactions in the context of previous investments or past acquisitions—rather than in isolation. The EO identifies the need to focus on aggregate trends, such as incremental investments over time or the acquisition of cumulative control, in a sector or technology that may cede, part-by-part, domestic development or control (such as through multiple unrelated investments by the same party or country across the same industry).
  4. Cybersecurity risks. The EO states that CFIUS should consider whether a transaction could provide foreign investors or related third parties with the ability to conduct cyber intrusions or other malicious cyber-enabled activity that would pose serious national security risks.
  5. Risks to U.S. persons’ sensitive data. Notably, the EO highlights the risk of access to U.S. persons’ sensitive personal data among the key factors for the Committee’s consideration. The EO notes that tools like surveillance, tracing, tracking, and targeting of individuals combined with advances in technology and access to large data sets now allow data that was previously unidentifiable to become re‑identified or de-anonymized. At the direction of the EO, CFIUS will now apply greater consideration to whether a transaction could provide a foreign investor with the ability to exploit such information to the detriment of national security.

 

https://www.jdsupra.com/legalnews/biden-administration-releases-5703369/ and https://www.whitehouse.gov/briefing-room/presidential-actions/2022/09/15/executive-order-on-ensuring-robust-consideration-of-evolving-national-security-risks-by-the-committee-on-foreign-investment-in-the-united-states/

 

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G7

 

G7 Members Confirmed Intention For A Price Cap On Russian Oil And Petroleum Products

 

September 2, 2022: At their summit in Elmau, G7 Leaders (which include the U.S.) reaffirmed a shared commitment to preventing Russia from profiting from its war of aggression, supporting stability in global energy markets, and to minimizing negative economic spillovers, especially on low and middle-income countries. To deliver on this commitment, the G7 confirmed its joint political intention to finalize and implement a comprehensive prohibition of services that enable maritime transportation of Russian-origin crude oil and petroleum products globally – the provision of such services would only be allowed if the oil and petroleum products are purchased at or below a price (“the price cap”) determined by the broad coalition of countries adhering to and implementing the price cap.

 

https://www.bundesfinanzministerium.de/Content/EN/Downloads/G7-G20/2022-09-02-g7-ministers-statement.pdf?__blob=publicationFile&v=7

 

See the corresponding article below from the U.S. Department of the Treasury.

 

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

 

ITAR Revisions to ITAR Part 120 In Effect

 

September 6, 2022: Changes proposed on March 22, 2022, revising the regulatory citations in ITAR Part 120 took effect September 6, 2022. There is no change in the scope of the ITAR. These changes affect industries’ compliance plans, manuals, procedures, and training. The revisions to ITAR Part 120 involved reorganization into three distinct sections; General Information, General Policies, and Processes and Definitions. Wherever your compliance plans, manuals, procedures, and training used ITAR Part 120 citations, updates to these documents are required. The use of existing documents will reflect a different definition in the ITAR.  I.E. Export was previously defined in ITAR 120.17, the new citation is ITAR 120.50. ITAR Part 120

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DDTC Name And Address Changes Posted To Website

 

September 13 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 Address for Axxeum, Inc., from 100 Church Street, Suite 300, Huntsville, AL 35824 to 351 Electronics Blvd. SW, Suite A, Huntsville, AL 35824;
  • Change in Name from APSYS SAS to Airbus Protect SAS due to merger with a part of Airbus CyberSecurity SAS’ businesses;
  • Change in Address for Pennant International Limited, from Pennant Court, Staverton Technology Park, Gloucester Road, Cheltenham, Glos, GL51 6TL to Unit D1 Staverton Connection, Old Gloucester Road, Cheltenham, England GL51 OTF;
  • Change in Name from Thales Management & Services Deutschland GmbH to Thales Deutschland GmbH due to corporate restructuring.

 

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 U.S. Department of the Treasury

 

The Secretary Of The Treasury Released A Statement Regarding Implementing A Cap On The Price Of Russian Oil

 

September 2, 2022: The Secretary of the Treasury, Janet L. Yellen, released the following statement on the G7 Finance Ministers’ agreement to finalize and implement a cap on the price of Russian oil.

 

“Today, the G7 took a critical step forward in achieving our dual goals of putting downward pressure on global energy prices while denying Putin revenue to fund his brutal war in Ukraine. By committing to finalize and implement a price cap, the G7 will significantly reduce Russia’s main source of funding for its illegal war while maintaining supplies to global energy markets by keeping Russian oil flowing at lower prices. While we’ve seen energy prices ease in the United States, energy costs remain a concern for Americans and continue to be elevated globally. This price cap is one of the most powerful tools we have to fight inflation and protect workers and businesses in the United States and globally from future price spikes caused by global disruptions.

Today’s action will help deliver a major blow to Russian finances and will both hinder Russia’s ability to fight its unprovoked war in Ukraine and hasten the deterioration of the Russian economy. We have already begun to see the impact of the price cap through Russia’s hurried attempts to negotiate bilateral oil trades at massive discounts.”

 

https://home.treasury.gov/news/press-releases/jy0936

 

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

 

OFAC Published Recent Actions Notice

 

September 19, 2022: As a reminder, the Office of Foreign Assets Control (OFAC) issued a recent actions notice, reminding holders of property blocked pursuant to OFAC sanctions regulations published in Chapter V of Title 31 of the Code of Federal Regulations (C.F.R.) of the requirement to provide OFAC with an Annual Report of Blocked Property (ARBP).  Persons subject to this reporting requirement must submit a comprehensive report, as outlined in 31 C.F.R. § 501.603 of the Reporting, Procedures and Penalties Regulations (RPPR), of all blocked property held as of June 30 of the current year by September 30.

The annual reports must be filed using the mandatory spreadsheet form TD-F 90-22.50.  Completed forms should be sent to ofacreport@treasury.gov or filed through the OFAC Reporting System (ORS).  Failure to submit a required ARBP by September 30 constitutes a violation of the RPPR.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220919

 

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OFAC Issued Quarterly Reports Of Licensing Activities

 

September 27, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) has released Quarterly Reports of Licensing Activities pursuant to Section 906(b) of the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA), covering activities undertaken by OFAC under Section 906(a)(1) of the TSRA from April 2019 through September 2021.  Under the procedures established in its TSRA-related regulations, OFAC processes license applications requesting authorization to export agricultural commodities, medicine, and medical devices to Iran and Sudan under the specific licensing regime set forth in Section 906 of the TSRA.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220927 and https://home.treasury.gov/policy-issues/financial-sanctions/ofac-license-application-page/trade-sanctions-reform-and-export-enhancement-act-of-2000-tsra-program/trade-sanctions-reform-and-export-enhancement-act-of-2000-tsra-reports-to-congress#quarterly

 

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)

 

September 8, 2022: 87 Fed. Reg. 55241: The Commerce Department’s Bureau of Industry and Security (BIS) issued an interim final rule revising the Export Administration Regulations (EAR) to authorize the release of certain technology and software in the context of standards setting and development in standards organizations. The changes made in this interim final rule address concerns from U.S. industry and other stakeholders about whether BIS licenses are required to release low-level technology for legitimate standards activities to parties on the Entity List stemming from the listing of Huawei and a number of its non-U.S. affiliates.

 

This rule is consistent with public comments received from the June 2020 interim final rule, specifically that additional actions are needed to protect U.S. technology without discouraging the full participation of U.S. companies in international standards development efforts. The rule amends the EAR to authorize the release of certain technology and software subject to the EAR to entities on the Entity List without a license when that release occurs in a standards-related activity with the intent that the resulting standard will be “published.” The requirement that the standard be published undermines any risk of unwanted transfer of proprietary technology.

 

The rule also revises the terms used in the EAR to describe the actions permissible under the authorization. As a result of this interim final rule, the release of EAR99 and Anti-Terrorism (AT) only controlled “software” and “technology,” as well as certain “software” and “technology” for specified cryptographic functionality, are included in the scope of the authorization. This interim final rule also defines the term “standards-related activity” to describe the actions permissible under the authorization.

 

Lastly, this interim final rule amends the scope of the authorization to apply to all entities listed in the Entity List. The rule only addresses Entity List related licensing requirements, and other export controls may apply and require authorization from BIS. BIS seeks public comments on the impact of these additional controls on participation in the standards-related activity.

 

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3127-2022-09-08-bis-press-release-standards-rule/file and https://www.federalregister.gov/documents/2022/09/09/2022-19415/authorization-of-certain-items-to-entities-on-the-entity-list-in-the-context-of-specific-standards

 

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September 16, 2022: 87 Fed. Reg. 57068: In response to the Russian Federation’s (Russia’s) ongoing aggression against Ukraine, the Department of Commerce expanded the existing sanctions against Russia and Belarus by imposing new export controls, including expanding the scope of the Russian industry sector sanctions to add lower-level items potentially useful for Russia’s chemical and biological weapons production capabilities and items needed for advanced production and development capabilities to enable advanced manufacturing across a number of industries. This rule also added Belarus to the scope of industry sector sanctions that currently apply solely to Russia. With respect to end users, this rule expanded the ‘military end user’ and ‘military-intelligence end user’ controls and applies the Russian/Belarusian Military End User Foreign Direct Product (FDP) rule to ten existing entries on the Entity List for six existing end users that have continued to supply Russian entities on the Entity List or are under sanction since Russia’s further invasion of Ukraine. Labeling these six end users as Russian ‘military end users’ and applying the Russia/Belarus-Military End User FDP rule to them will degrade Russia’s war efforts in Ukraine, as these entities produce items needed by the Russian and Belarussian military and industrial sectors. Correspondingly, this rule further specifies with respect to Burmese, Cambodian, Chinese, and Venezuelan ‘military end users’ located outside of Burma, Cambodia, China, or Venezuela that the requirement is limited to only those ‘military end users’ identified on the ‘Military EndUser’ (MEU) List. Finally, this rule refined existing controls on Russia and Belarus by adding additional dollar value exclusion thresholds for ‘luxury goods;’ and makes twelve corrections and clarifications to existing controls on Russia and Belarus. The Department of Commerce took these actions to clarify and enhance the effectiveness of U.S. controls and to better align its controls on both Russia.

 

https://www.bis.doc.gov/index.php/documents/regulations-docs/federal-register-notices/federal-register-2022/3136-87-fr-57068/file

 

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September 19, 2022: The U.S. Commerce Department, through the Bureau of Industry and Security (BIS), updated its list of aircraft that have flown into Russia in apparent violation of the Export Administration Regulations (EAR) by adding the first three Iranian-owned and -operated aircraft providing cargo flight services on U.S.-origin aircraft to Russia. There are now a total of 183 aircraft identified on the list for apparent violations of U.S. export controls. Using commercially available data, BIS identified three Iranian cargo aircraft subject to the EAR flying and transporting goods, including electronic items, to Russia in apparent violation of BIS’s stringent export controls on Russia. These aircraft are operated by Mahan Air, Qeshm Fars Air, and Iran Air. Any subsequent actions taken with regard to any of the listed aircraft, including, but not limited to, refueling, maintenance, repair, or the provision of spare parts or services, are subject to the prohibitions outlined in General Prohibition Ten of the EAR (15 C.F.R. § 736.2(b)(10)).

 

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3138-bis-press-release-gp10-iranian-craft-additions/file

 

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September 26, 2022: The U.S. Commerce Department, through the Bureau of Industry and Security (BIS), has updated its list of aircraft, a majority of which are U.S. origin, that have flown into Russia in apparent violation of the Export Administration Regulations (EAR) by adding a fourth Iranian-owned and -operated aircraft providing cargo flight services on U.S.-origin aircraft to Russia. Public reporting shows that an airplane owned by Saha Airlines, which itself is owned and operated by the Islamic Republic of Iran Air Force, has flown into Russia without BIS authorization since export controls were imposed on such aircraft on February 24, 2022. There are now a total of 184 aircraft identified on the list for apparent violations of U.S. export controls.

 

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3143-2022-09-26-bis-press-release-additional-iranian-gp10-aircraft/file

 

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

 

September 2, 2022: The Department of the Treasury, Office of Foreign Assets Control (OFAC) announced that it will amend and reissue in their entirety, the Cyber-Related Sanctions Regulations, 31 C.F.R. part 578.  This administrative action replaces the regulations that were published in abbreviated form on December 31, 2015, with a more comprehensive set of regulations that includes additional interpretive and definitional guidance, general licenses, and other regulatory provisions that will provide further guidance to the public. The Cyber-Related Sanctions Regulations became effective when they were published in the Federal Register on Tuesday, September 6, 2022.

 

In addition, the publication of this final rule has triggered an automatic administrative update to a number of sanctions entries.  The unique identifier numbers (UIDs) for the affected entries are listed below as part of this administrative update.  The UIDs for the sanctions entries affected by this update are found at the following link:

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220902

and

https://home.treasury.gov/system/files/126/20220902_cyber_regulations.pdf

 

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September 8, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) designated an air transportation service provider for its involvement in the shipment of Iranian Unmanned Aerial Vehicles (UAVs) to Russia for its war against Ukraine. Additionally, OFAC designated three companies and one individual involved in the research, development, production, and procurement of Iranian UAVs and UAV components, including the Shahed series of drones, for Iran’s Islamic Revolutionary Guard Corps (IRGC) and its Aerospace Force (IRGC ASF) and Navy.

 

The following name has been added to OFAC's list of Specially Designated Nationals (SDN) List:

 

  • Heidari, Rahmatollah of Iran;

 

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

 

  • Baharestan Kish Company of Iran;
  • Design And Manufacturing Of Aero-Engine Company of Iran;
  • Paravar Pars Company of Iran; and
  • Safiran Airport Services of Iran.

 

OFAC also issued Russia-related General License 13B.

 

General License 13B: 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.

 

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.

 

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://home.treasury.gov/system/files/126/russia_gl13b.pdf and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220908 and https://home.treasury.gov/news/press-releases/jy0940

 

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September 9, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC)  designated Iran’s Ministry of Intelligence and Security (MOIS) and its Minister of Intelligence for engaging in cyber-enabled activities against the United States and its allies. Since at least 2007, the MOIS and its cyber actor proxies have conducted malicious cyber operations targeting a range of government and private-sector organizations around the world and across various critical infrastructure sectors. In July 2022, cyber threat actors assessed to be sponsored by the Government of Iran and MOIS disrupted Albanian government computer systems, forcing the government to suspend online public services for its citizens.

 

As a result of these designations, all property and interests in property of the designated targets that are subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them. Additionally, any entities that are owned 50 percent or more by one or more designated persons are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person.

 

In addition, non-U.S. persons that engage in certain transactions with the persons designated may themselves be exposed to the designation. Furthermore, any foreign financial institution that knowingly conducts or facilitates a significant transaction for or on behalf of the persons designated could be subject to U.S. correspondent or payable-through account sanctions.

 

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

 

  • Khatib, Esmail of Iran.

 

The following changes have been made to OFAC's SDN List:

 

  • Iranian Ministry Of Intelligence And Security (a.k.a. Vezarat-E Ettela'at Va Amniat-E Keshvar; a.k.a. "MOIS"; a.k.a. "VEVAK"), bounded roughly by Sanati Street on the west, 30th Street on the south, and Iraqi Street on the east, Tehran, Iran; Ministry of Intelligence, Second Negarestan Street, Pasdaran Avenue, Tehran, Iran; Additional Sanctions Information - Subject to Secondary Sanctions;
  • Iranian Ministry Of Intelligence And Security (a.k.a. Vezarat-E Ettela'at Va Amniat-E Keshvar; a.k.a. "MOIS"; a.k.a. "VEVAK"), bounded roughly by Sanati Street on the west, 30th Street on the south, and Iraqi Street on the east, Tehran, Iran; and
  • Ministry of Intelligence, Second Negarestan Street, Pasdaran Avenue, Tehran, Iran.

 

https://home.treasury.gov/news/press-releases/jy0941 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220909

 

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September 9, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) published Preliminary Guidance on Implementation of a Maritime Services Policy and Related Price Exception for Seaborne Russian Oil.

 

As part of a coalition of countries including the G7 and the EU, the United States will implement a policy with regard to a broad range of services related to the maritime transportation (the “maritime services policy”) of Russian Federation origin crude oil and petroleum products (“seaborne Russian oil”). This ban will take effect on December 5, 2022, with respect to maritime transportation of crude oil, and on February 5, 2023, with respect to maritime transportation of petroleum products.

 

This policy, constructed as a ban on services, will have an important exception: jurisdictions or actors that purchase seaborne Russian oil at or below a price cap to be established by the coalition (the “price exception”) will expressly be able to receive such services. This policy is intended to expressly establish a framework for Russian oil to be exported by sea under a capped price and achieve three objectives:

  • Maintain a reliable supply of seaborne Russian oil to the global market;
  • Reduce upward pressure on energy prices; and
  • Reducing the revenues the Russian Federation earns from oil after its own war of choice in Ukraine has inflated global energy prices.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220909_33 and https://home.treasury.gov/system/files/126/cap_guidance_20220909.pdf

 

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September 13, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) published new Cyber-related Frequently Asked Questions (1076-1079).

 

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 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.  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 1077: Can U.S. persons engage in transactions involving identified Tornado Cash virtual currency wallet addresses absent a specific license from OFAC?

 

Answer: No.  U.S. persons are prohibited from engaging in transactions involving Tornado Cash, including through the virtual currency wallet addresses that OFAC has identified.  If U.S. persons were to initiate or otherwise engage in a transaction with Tornado Cash, including or through one of its wallet addresses, such a transaction would violate U.S. sanctions prohibitions unless exempt or authorized by OFAC.

 

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

 

Answer: OFAC is aware of reports following the 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, 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.

 

For guidance related to filing an initial and annual report of the 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.  U.S. persons 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/policy-issues/financial-sanctions/faqs/added/2022-09-13 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220913_33

 

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September 14, 2022:  The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned ten individuals and two entities for their roles in conducting malicious cyber acts, including ransomware activity. These designations are part of joint action with the Department of Justice, Department of State, Federal Bureau of Investigation, U.S. Cyber Command, National Security Agency, and Cybersecurity and Infrastructure Security Agency. The individuals and entities designated are all affiliated with Iran’s Islamic Revolutionary Guard Corps (IRGC).  These actions continue the series of OFAC designations that aim to protect U.S. persons from ransomware activity, facilitators of ransomware activity, and other cybercrime.

 

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

 

  • Agha Ahmadi, Mohammad of Iran;
  • Agha-Ahmadi, Ali of Iran;
  • Ahmadi, Mansour of Iran;
  • Haji Hosseini, Mojtaba of Iran;
  • Haji Hosseini, Mostafa of Iran;
  • Khatibi Aghada, Ahmad of Iran;
  • Mahdavi, Mo'in of Iran;
  • Nikaeen Ravari, Amir Hossein of Iran;
  • Rashidi-Barjini, Aliakbar of Iran;
  • Shakeri Ashtijeh, Mohammad of Iran.

 

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

 

  • Afkar System Yazd Company of Iran; and
  • Najee Technology Hooshmand Fater LLC of Iran.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220914 and https://home.treasury.gov/news/press-releases/jy0948

 

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September 15, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) has issued Russia-related General License 51 "Authorizing the Wind Down of Transactions Involving Limited Liability Company Group of Companies Akvarius." All transactions ordinarily incident and necessary to the wind-down of any transaction involving Limited Liability Company Group of Companies Akvarius (Aquarius), or any entity in which Aquarius 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 daylight time, October 15, 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).

 

https://home.treasury.gov/system/files/126/russia_gl51.pdf

 

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

 

  • Akhmadova, Aminat of Russia;
  • Astanin, Eddie Vladimirovich of Russia;
  • Balytskyi, Yevhen Vitaliiovych of Russia;
  • Bandura, Volodymyr Volodymyrovich of Ukraine;
  • Belousov, Mikhail Nikolaevich of Russia and the Ukraine;
  • Bespalov, Vladimir Aleksandrovich of Russia and the Ukraine;
  • Bulgakov, Sergei Viktorovich of the Ukraine;
  • Cherevko, Serhiy Mykolayovych of the Ukraine;
  • Dolgopolov, Andrey Nikolayevich of Russia, the Ukraine, and Kyrgyzstan;
  • Emelianenko, Viktor Andriyovych of the Ukraine;
  • Ermakova, Mariya Gennadevna of Russia and the Ukraine;
  • Filipchuk, Pavlo Ihorovych of the Ukraine;
  • Gramashov, Dmitry Sergeevich of the Ukraine;
  • Ibragimov, Turpal-Ali Vakhayevich of Russia;
  • Kadyrov, Ramzan Akhmatovich of Russia;
  • Kadyrova, Ayshat Ramzanovna of Russia;
  • Kadyrova, Karina Ramzanovna of Russia;
  • Kadyrova, Medni Musaevna of Russia;
  • Kadyrova, Tabarik Ramzanovna of Russia;
  • Khazueva, Fatima Shaykhievna of Russia;
  • Kobets, Oleksandr Yuriyovych of the Ukraine;
  • Koltsov, Anton Viktorovich of Russia;
  • Komlev, Vladimir Valerievich of Russia;
  • Kryllo, Pavel Velerevich of Russia;
  • Kuz'mych, Tetyana Oleksandrivna of the Ukraine;
  • Lvova-Belova, Maria Alexeyevna of Russia;
  • Milchakov, Alexey Yurevich of Russia;
  • Mozhelyanskiy, Viktor Anatolyevich of Russia and the Ukraine;
  • Mutamba, Stephen of Zimbabwe;
  • Oreshkin, Maxim Stanislavovich of Russia;
  • Pakhnyts, Valery Mykhailovych of the Ukraine;
  • Petrovskiy, Yan Igorevich of Russia and the Ukraine;
  • Rodikov, Mikhail Leonidovich of Russia and the Ukraine;
  • Rogov, Volodymyr Valeriyovych of the Ukraine;
  • Samoilenko, Mykyta Ivanovich of the Ukraine;
  • Saulenko, Oleksandr Fedorovych of the Ukraine;
  • Selivanov, Oleksiy Sergeevich of the Ukraine;
  • Semenchev, Ihor Ihorovych of the Ukraine;
  • Shelestenko, Hennadiy Oleksandrovych of the Ukraine;
  • Siguta, Andriy Leonidovich of the Ukraine;
  • Titskiy, Anton Robertovich of the Ukraine;
  • Trofimov, Andriy Yuriovych of the Ukraine
  • Tumilina, Tetyana Yuriivna of the Ukraine;
  • Zhidkov, Viktor Olegovich of Russia.

 

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

 

  • Baikal Electronics JSC of Russia;
  • Elvees Research And Development Center JSC of Russia;
  • Federal Research Center Institute Of Applied Physics Of The Russian Academy Of Sciences of Russia;
  • Federal State Financed Institution Of Science Higher Education Institution Spectroscopy Of The Russian Federation Academy Of Sciences of Russia;
  • Federal State Financed Institution Of Science Physical Higher Education Institution Named After P. N. Lebedeva Of The Russian Federation Academy Sciences of Russia;
  • Federal State Financed Institution Of Science Physics And Technology Institute Named After A. F. Ioffe Of The Russian Federation Academy Of Sciences of Russia;
  • Federal State Financed Institution Of Science Physics And Technology Institute Named After K. A. Valieva Of The Russian Federation Academy Of Sciences of Russia;
  • International Center For Quantum Optics And Quantum Technologies Limited Liability Company of Russia;
  • Joint Stock Company Angstrem of Russia;
  • Joint Stock Company Element of Russia;
  • Joint Stock Company Institute For Scientific Research Elektronnoy Tekhniki of Russia;
  • Joint Stock Company Institute For Scientific Research Vychislitelnykh Kompleksov Named After M. A. Kartseva of Russia;
  • Joint Stock Company Production Association Sever of Russia;
  • Joint Stock Company Research And Development Enterprise Radiosvyaz of Russia;
  • Joint Stock Company Research And Development Enterprise Sapfir of Russia;
  • Joint Stock Company Research And Production Association Named After S. A. Lavochkina of Russia;
  • Joint Stock Company Research Center Elins of Russia;
  • Joint Stock Company Rossiyskiye Kosmicheskiye Sistemy of Russia;
  • Joint Venture Quantum Technologies of Russia;
  • JSC Academician M.F. Reshetnev Information Satellite Systems of Russia;
  • JSC Additive Technologies Center of Russia;
  • JSC Moscow Center Of Sparc Technologies of Russia;
  • JSC Scientific And Technical Center Zaslon of Russia;
  • D. Landau Institute For Theoretical Physics Of Russian Academy Of Sciences of Russia;
  • Limited Liability Company Firdaws of Russia;
  • Limited Liability Company Group Of Companies Akvarius of Russia;
  • Limited Liability Company Krokus Nanoelektronika of Russia;
  • Limited Liability Company Yadro Fab Dubna of Russia;
  • Multiclet Corporation of Russia;
  • Rzhanov Institute Of Semiconductor Physics Siberian Branch Of Russian Academy Of Sciences of Russia;
  • Specialized Engineering And Design Bureau Of Electronic Systems Joint Stock Company of Russia; and
  • Task Force Rusich of Russia.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220915

 

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September 15, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 52. News reporting organizations that are U.S. persons, and individual U.S. persons who are journalists (including photojournalists) or broadcast or technical personnel, are authorized to engage in the following transactions, where such transactions are ordinarily incident and necessary to such U.S. persons’ journalistic activities or to the establishment or operation of a news bureau and are prohibited by Executive Order (E.O.) 14024 or section (1)(a)(i) of E.O. 14071, provided that the only involvement of blocked persons is the processing of funds by financial institutions blocked pursuant to E.O. 14024:

(1) Compensating support staff (e.g., stringers, translators, interpreters, camera operators, technical experts, freelance producers, or drivers), persons to handle logistics or other office personnel;

(2) Leasing or renting office space;

(3) Purchasing, leasing, or renting goods and services (e.g., mobile phones and related airtime); or

(4) Paying for all other expenses ordinarily incident and necessary to journalistic activities, including sales or employment taxes.

 

For the purposes of this general license, the term “news reporting organization” means an entity whose primary purpose is the gathering and dissemination of news to the general public.

 

https://home.treasury.gov/system/files/126/russia_gl52.pdf

 

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September 15, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) has published a Determination Pursuant to Section 1(a)(i) of Executive Order 14024, a Determination Pursuant to Section 1(a)(ii) of Executive Order 14071, four related Frequently Asked Questions (FAQs) (1083-1086), and five amended FAQs (1033, 1034, 1059, 1061, 1062).

 

Determination Pursuant to Section 1(a)(i) of Executive Order 14024: Section 1(a) of 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”) imposes economic sanctions on any person determined by the Secretary of the Treasury, in consultation with the Secretary of State, or the Secretary of State, in consultation with the Secretary of the Treasury, to operate or have operated in such sectors of the Russian Federation economy as may be determined, pursuant to section 1(a)(i) of E.O. 14024, by the Secretary of the Treasury, in consultation with the Secretary of State. To further address the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States described in E.O. 14024, and in consultation with the Department of State and pursuant to 31 CFR § 587.802, OFAC determined that section 1(a)(i) shall apply to the quantum computing sector of the Russian Federation economy. Any person that the Secretary of the Treasury or the Secretary of the Treasury’s designee, in consultation with the Secretary of State or the Secretary of State’s designee, or the Secretary of State or the Secretary of State’s designee, in consultation with the Secretary of the Treasury or the Secretary of the Treasury’s designee, subsequently determines operates or has operated in this sector shall be subject to sanctions pursuant to section 1(a)(i).

 

https://home.treasury.gov/system/files/126/determination_09152022_eo14024.pdf

 

Determination Pursuant to Section 1(a)(ii) of Executive Order 14071: Pursuant to sections 1(a)(ii), 1(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”) and 31 CFR § 587.802, the Director of the Office of Foreign Assets Control, in consultation with the Department of State, hereby determines that the prohibitions in section 1(a)(ii) of E.O. 14071 shall apply to quantum computing services. 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 quantum computing services to any person located in the Russian Federation.

 

This determination excludes the following:

(1) any service to an entity located in the Russian Federation that is owned or controlled, directly or indirectly, by a United States person; and

 

(2) any service in connection with the wind-down or divestiture of an entity located in the Russian Federation that is not owned or controlled, directly or indirectly, by a Russian person.

 

https://home.treasury.gov/system/files/126/determination_09152022_eo14071.pdf

 

OFAC has published four Frequently Asked Questions:

 

Question 1080: I am a U.S. person with an account at a Russian financial institution blocked pursuant to Executive Order (E.O.) 14024.  What am I required or allowed to do under OFAC sanctions with respect to such accounts? 

 

Answer: Since Russia’s further invasion of Ukraine beginning in February 2022, OFAC has blocked a number of Russian financial institutions pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy (see FAQ 966).  In addition, all property and interests in property of any financial institution that is owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked.  Accordingly, U.S. persons are prohibited from transacting with these financial institutions unless the activity is exempt or authorized by OFAC.

 

Question 1081: Am I required to show official documentation that I’ve closed my account at a Russian financial institution blocked pursuant to Executive Order (E.O.) 14024 in order to take advantage of Russia-related General License (GL) 50? 

 

Answer: No. GL 50 authorizes individuals with accounts at Russian financial institutions blocked pursuant to E.O. 14024 to unblock and lump sum transfer funds to an account at a non-designated financial institution.  Individuals do not need to provide official documentation proving they have closed their account at the blocked Russian financial institution when utilizing the GL.

 

Question 1082: National Payment Card System Joint Stock Company (NSPK) is not a blocked entity under the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).  Do non-U.S. financial institutions risk exposure to sanctions for contracting or otherwise dealing with NSPK? 

 

Answer: NSPK is the operator of Russia’s MIR National Payment System, which clears and settles payments between consumers, merchants, and banks for debit and credit card payments, primarily in the Russian Federation.  NSPK and the MIR National Payment System process transactions for designated Russian banks and may be used to process transactions involving other sanctioned persons or activity under the RuHSR.  Accordingly, those non-U.S. financial institutions that enter into new or expanded agreements with NSPK risk supporting Russia’s efforts to evade U.S. sanctions through the expanded use of the MIR National Payment System outside the territory of the Russian Federation.

 

The RuHSR authorizes OFAC to impose blocking sanctions on persons determined to have materially assisted, sponsored or provided financial, material, or technological support for, or goods or services to or in support of (i) any activity sanctionable under the RuHSR, including deceptive or structured transactions or dealings to circumvent any United States sanctions or (ii) any person whose property and interests in property are blocked pursuant to the RuHSR.  OFAC is prepared to use these targeting authorities in response to supporters of Russia’s sanctions evasion, including Russia’s efforts to expand the use of NSPK or the MIR National Payment System outside of the territory of the Russian Federation.

 

Question 1083: What actions were taken on September 15, 2022, related to certain quantum computing services? 

 

Answer: On September 15, 2022, the Director of OFAC, in consultation with the Department of State, issued a determination pursuant to Executive Order (E.O.) 14071, “Prohibitions Related to Certain Quantum Computing Services,” prohibiting the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of certain quantum computing services to any person located in the Russian Federation.  This determination takes effect on October 15, 2022.  This determination excludes from the scope of the prohibited services: (1) any service to an entity located in the Russian Federation that is owned or controlled, directly or indirectly, by a United States person; and (2) any service in connection with the wind-down or divestiture of an entity located in the Russian Federation that is not owned or controlled, directly or indirectly, by a Russian person.  For more information, please see FAQ 1084.

 

Question 1084: For the purposes of the determination of September 15, 2022, made pursuant to Executive Order (E.O.) 14071, “Prohibitions Related to Certain Quantum Computing Services” (“the determination”),  what is meant by the term “quantum computing services”?

 

Answer: For the purposes of the determination, OFAC anticipates publishing regulations defining this term to include any of the following services when related to quantum computing, quantum computers, electronic assemblies thereof, or cryogenic refrigeration systems related to quantum computing:  infrastructure, web hosting, or data processing services; custom computer programming services; computer systems integration design services; computer systems and data processing facilities management services; computing infrastructure, data processing services, web hosting services, and related services; repairing computer, computer peripherals, or communication equipment; other computer-related services; as well as services related to the exportation, reexportation, sale, or supply, directly or indirectly, of quantum computing, quantum computers, electronic assemblies thereof, or cryogenic refrigeration systems related to quantum computing to any person located in the Russian Federation.

 

For the purposes of the determination, OFAC also anticipates publishing regulations defining the term “person located in the Russian Federation” as set forth in FAQ 1058, as well as regulations defining the term “Russian person” to mean an individual who is a citizen or national of the Russian Federation, or an entity organized under the laws of the Russian Federation.

 

Question 1085: Does the determination of September 15, 2022, made pursuant to Executive Order (E.O.) 14024 with regard to the quantum computing sector of the Russian Federation economy mean that all persons that operate or have operated in these sectors of the Russian Federation economy are sanctioned by OFAC?

 

Answer: No.  The Director of OFAC, in consultation with the State Department, has issued a determination pursuant to E.O. 14024 that authorizes the imposition of economic sanctions against persons that operate or have operated in the quantum computing sector of the Russian Federation economy.

 

Question 1086: For the purposes of the determination of September 15, 2022, made pursuant to Executive Order (E.O.) 14024, what is meant by the term “quantum computing sector of the Russian Federation economy”?

 

Answer: For the purposes of the determination of September 15, 2022, made pursuant to E.O. 14024, OFAC interprets the term “quantum computing sector of the Russian Federation economy” to include activities related to products and services in or involving the Russian Federation in research, development, manufacturing, assembling, maintenance, repair, sale, or supply of quantum computing, quantum computers, electronic assemblies thereof, or cryogenic refrigeration systems related to quantum computing.  OFAC also interprets the term “quantum computing sector of the Russian Federation economy” to include any of the following services when related to quantum computing:  infrastructure, web hosting or data processing services; custom computer programming services; computer systems integration design services; computer systems and data processing facilities management services; computing infrastructure, data processing services, web hosting services, and related services; repairing computer, computer peripherals, and communication equipment; other computer-related services; as well as the exportation, reexportation, sale, or supply, directly or indirectly, of quantum computing, quantum computers, electronic assemblies thereof, or cryogenic refrigeration systems related to quantum computing to or from the Russian Federation.

 

A sector determination pursuant to E.O. 14024 exposes persons that operate or have operated in an identified sector to sanctions risk; however, a sector determination does not automatically impose sanctions on all persons who operate or have operated in the sector.  Only persons determined, pursuant to E.O. 14024, by the Secretary of the Treasury in consultation with the Secretary of State, or by the Secretary of State in consultation with the Secretary of the Treasury, or their delegates, to operate or have operated in the above-identified sectors are subject to sanctions.

 

Persons sanctioned pursuant to E.O. 14024 for operating or having operated in an identified sector are added to one or more OFAC sanctions lists based on the type of sanction, including the Specially Designated Nationals and Blocked Persons List (SDN List), the List of Foreign Financial Institutions Subject to Correspondent Account or Payable-Through Account Sanctions (CAPTA List), and the Non-SDN Menu-Based Sanctions List (NS-MBS List).
On September 15, 2022, the Director of OFAC, in consultation with the Department of State, also issued a sectoral determination pursuant to E.O. 14024 that authorizes the imposition of economic sanctions on individuals and entities that are determined to operate or have operated in the quantum computing sector of the Russian Federation economy.  The determination regarding this sector pursuant to E.O. 14024 takes effect immediately.
Individuals who have filed a blocking report with OFAC and are availing themselves of GL 50 must file an unblocking report with OFAC within 10 business days of the unblocking in accordance with 31 CFR § 501.603(b)(3).  For guidance related to filing an initial report of the blocked property, an annual report of the blocked property, and an unblocking report, 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.

 

In practice, this means that accounts held by U.S. persons at any blocked Russian financial institutions generally are themselves considered blocked property unless exempt.  This includes, for example, checking and savings accounts, credit cards, CDs, loans, and mortgages.  U.S. persons must stop utilizing such accounts and treat them as blocked, even if the designated Russian financial institution does not.  Additionally, within 10 business days of the blocking of the account or other property, U.S. persons are required to file a blocking report with OFAC describing any property or interests in property (e.g., accounts, etc.).  Information on the requirement to report blocked property, including accounts, and on filing initial and annual reports of blocked property with OFAC can be found in FAQs 49, 50, and 646, respectively, and 31 CFR § 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.

 

On August 19, 2022, OFAC issued Russia-related General License (GL) 50 authorizing individuals, wherever located, to engage in all transactions ordinarily incident and necessary to close their individual accounts held at a financial institution blocked pursuant to E.O. 14024.  GL 50 also authorizes the unblocking and lump sum transfer to the account holder of all remaining funds and other assets in the account at the blocked financial institution, including to an account held at a non-blocked financial institution.  Individuals may avail themselves of GL 50 to terminate their accounts with Russian financial institutions blocked pursuant to E.O. 14024 and repatriate the proceeds of any account closures.  Individuals who have filed a blocking report with OFAC and are availing themselves of GL 50 must file an unblocking report with OFAC within 10 business days of the unblocking in accordance with 31 CFR § 501.603(b)(3).

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-09-15

 

OFAC Amended Five Frequently Asked Questions:

 

Question 1033: What actions were taken on May 8, 2022, related to certain accounting, trust and corporate formation, and management consulting services?

 

Answer: On May 8, 2022, the Director of OFAC, in consultation with the Department of State, issued a determination pursuant to Executive Order (E.O.) 14071, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services,” prohibiting the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of certain accounting, trust, and corporate formation, and management consulting services to any person located in the Russian Federation.  This determination takes effect on June 7, 2022.  For more information, please see FAQ 1034.

 

On May 8, 2022, the Director of OFAC, in consultation with the Department of State, also issued a sectoral determination pursuant to E.O. 14024 that authorizes the imposition of economic sanctions on individuals and entities that operate or have operated in the accounting, trust and corporate formation services, or management consulting sectors of the Russian Federation economy.  This determination takes effect on May 8, 2022.  For further information, please see FAQ 1037.

 

Question 1034: For the purposes of the determination of May 8, 2022, made pursuant to Executive Order (E.O.) 14071, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services,” what is meant by the terms “accounting,” “trust and corporate formation,” and “management consulting” services?

 

Answer: For the purposes of the determination of May 8, 2022, made pursuant to E.O. 14071, OFAC anticipates publishing regulations defining these terms to include the following:

  • “Accounting services” – includes services related to the measurement, processing, and evaluation of financial data about economic entities.  Please note that OFAC has issued General License 35 to authorize certain transactions ordinarily incident and necessary to the exportation, reexportation, sale, or supply, directly or indirectly, from the United States or by a United States person, wherever located, of credit rating or auditing services to any person located in the Russian Federation through 12:01 a.m. eastern daylight time, August 20, 2022.  See FAQ 1035.
  • “Trust and corporate formation services” – includes services related to assisting persons in forming or structuring legal persons, such as trusts and corporations; acting or arranging for other persons to act as directors, secretaries, administrative trustees, trust fiduciaries, registered agents, or nominee shareholders of legal persons; providing a registered office, business address, correspondence address, or administrative address for legal persons; and providing administrative services for trusts.  Please note that all of these activities are common activities of the trust and corporate service providers (TCSPs), although they may be provided by other persons.
  • “Management consulting services” – includes services related to strategic business advice; organizational and systems planning, evaluation, and selection; development or evaluation of marketing programs or implementation; mergers, acquisitions, and organizational structure; staff augmentation and human resources policies and practices; and brand management.

 

This determination excludes from the scope of the aforementioned services: (1) any service to an entity located in the Russian Federation that is owned or controlled, directly or indirectly, by a United States person; and (2) any service in connection with the wind-down or divestiture of an entity located in the Russian Federation that is not owned or controlled, directly or indirectly, by a Russian person.

For the purposes of the prohibitions set forth in the determination of May 8, 2022, made pursuant to E.O. 14071, OFAC anticipates publishing regulations defining the term “person located in the Russian Federation” as set forth in FAQ 1058.  For the purposes of the exclusion set forth in the determination of May 8, 2022, made pursuant to E.O. 14071, OFAC anticipates publishing regulations defining the term “Russian person” to mean an individual who is a citizen or national of the Russian Federation or an entity organized under the laws of the Russian Federation.

 

Question 1059: Do the determinations made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services,” and on September 15, 2022, “Prohibitions Related to Certain Quantum Computing Services” (“the determinations”), prohibit U.S. persons from providing services to persons located outside of the Russian Federation that are owned or controlled by persons located in the Russian Federation?

 

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

 

In contrast, OFAC would not consider to be prohibited the provision of services to a non-Russian company that has a physical presence and operations outside of the Russian Federation, including such a company owned or controlled by persons located in the Russian Federation, provided that the services will not be further exported or reexported to persons located in the Russian Federation.

 

For example, the following scenarios describe services that would be prohibited under the determination:

  • A U.S. corporate service provider administers a trust established under the laws of a U.S. state, where the trust exists predominantly to hold, sell, or purchase assets on behalf of a settlor, trustor, or beneficiary who is an individual ordinarily resident in Russia.
  • A U.S. corporate service provider registers a limited liability company in a third country on behalf of an individual ordinarily resident in Russia for the purpose of holding real estate assets, and this company has no other physical presence or operations in the third country.

 

The following scenarios illustrate services to a non-Russian subsidiary of a Russian person that would not be prohibited under the determination:

  • A U.S. accounting firm provides tax advisory and preparation services to the U.S. subsidiary of a Russian company.  This U.S. subsidiary has an office and employees in the United States and conducts business in the United States, and the services will not be exported or reexported to the Russian parent company.
  • A U.S. management consulting firm provides strategic business advice to the subsidiary of a Russian company located in a third country.  This subsidiary has an office and employees in a third country and conducts business in this third country, and the services will not be reexported to the Russian parent company.

 

Question 1061: Do the determinations made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services,” and on September 15, 2022, “Prohibitions Related to Certain Quantum Computing Services” (“the determinations”), prohibit U.S. persons from working as employees of entities located in the Russian Federation?

 

Answer: Not necessarily. Under the determinations, U.S. persons are prohibited from exporting, reexporting, selling, or supplying, directly or indirectly: management consulting, trust and corporate formation services; accounting services; or quantum computing services to persons located in the Russian Federation.  Thus, U.S. persons are prohibited from providing these services to companies located in the Russian Federation (“Russian companies”) in their capacity as employees.  However, the determinations do not prohibit U.S. persons from providing other services not covered by these determinations as part of their employment by Russian companies.

 

In addition, please note that the determinations exclude from the scope of the aforementioned services:  (1) any service to an entity located in the Russian Federation that is owned or controlled, directly or indirectly, by a United States person; and (2) any service in connection with the wind-down or divestiture of an entity located in the Russian Federation that is not owned or controlled, directly or indirectly, by a Russian person.

 

Question 1062: Do the prohibitions imposed by the determinations made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services,” and on and on September 15, 2022, “Prohibitions Related to Certain Quantum Computing Services,” apply to services provided to a parent company located in the Russian Federation by a U.S. subsidiary?

 

Answer: Yes. The prohibitions apply to services provided to a company located in the Russian Federation (the “Russian company”) by any U.S. person, including the Russian company’s U.S. subsidiary.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/updated/2022-09-15

 

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September 22, 2022:  The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Iran’s Morality Police for abuse and violence against Iranian women and the violation of the rights of peaceful Iranian protestors. The Morality Police are responsible for the recent death of 22-year-old Mahsa Amini, who was arrested and detained for allegedly wearing a hijab improperly.

 

OFAC also targeted seven senior leaders of Iran’s security organizations: the Morality Police, the Ministry of Intelligence and Security (MOIS), the Army’s Ground Forces, Basij Resistance Forces, and Law Enforcement Forces. These officials oversee organizations that routinely employ violence to suppress peaceful protesters and members of Iranian civil society, political dissidents, women’s rights activists, and members of the Iranian Baha’i community.

 

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

 

  • Abnoush, Salar of Iran;
  • Amanollahi, Manouchehr of Iran;
  • Heidari, Kiyumars of Iran;
  • Mirzaei, Haj Ahmad of Iran;
  • Rezaei, Qasem of Iran;
  • Esmail Khati of Iran; and
  • Rostami Cheshmeh Gachi, Mohammad of Iran.

 

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

 

Iran's Morality Police of Iran.

 

https://home.treasury.gov/news/press-releases/jy0969 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220922

 

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September 23, 2022: The U.S. Department of the Treasury issued Iran General License (GL) D-2 to increase support for internet freedom in Iran by bringing U.S. sanctions guidance in line with the changes in modern technology since the issuance of Iran GL D-1. The Iranian government cut off access to the Internet for most of its 80 million citizens to prevent the world from watching its violent crackdown on peaceful protestors sparked by the brutal death of Mahsa Amini in the custody of Iran’s Morality Police. While Iran’s government is cutting off its people’s access to the global internet, the United States is taking action to support the free flow of information and access to fact-based information to the Iranian people. The updated guidance will authorize technology companies to offer the Iranian people more options of secure, outside platforms and services.

 

Iran General License (GL) D-2: 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.

(3) Additional Software, Hardware, and Related Services. To the extent not authorized by paragraphs (a)(1) or (a)(2) of this general license, the exportation, reexportation, or provision, directly or indirectly, to Iran of certain software and hardware incident to communications, as well as related services, as follows: (i) In the case of hardware and software subject to the EAR, the items specified in the Annex to this general license; (ii) In the case of hardware and software that is not subject to the EAR because it is of foreign origin and is located outside the United States that is exported, reexported, or provided, directly or indirectly, by a U.S. person, wherever located, hardware and software that is of a type described in the Annex to this general license provided that it would be designated EAR99 if it were located in the United States or would meet the criteria for classification under the relevant ECCN specified in the Annex to this general license if it were subject to the EAR; and (iii) In the case of software not subject to the EAR because it is described in 15 CFR § 734.3(b)(3) that is exported, reexported, or provided, directly or indirectly, from the United States or by a U.S. person, wherever located, software that is of a type described in the Annex to this general license.

(4) Internet connectivity services and telecommunications capacity. The exportation or reexportation, directly or indirectly, from the United States or by a U.S. person, wherever located, to Iran of non-commercial-grade Internet connectivity services, including cloud-based services, and the provision, sale, or leasing of capacity on telecommunications transmission facilities (such as satellite or terrestrial network connectivity) incident to communications.

(5) Importation into the United States of hardware and software previously exported to Iran. The importation into the United States of hardware and software authorized for exportation, reexportation, or provision to Iran under 31 CFR § 560.540(a), paragraphs (a)(2) or (a)(3) of this general license, or paragraphs (a)(2) or (a)(3) of General License D-1, by an individual entering the United States, directly or indirectly, from Iran, provided that the items previously were exported, reexported, or provided by the individual to Iran pursuant to 31 CFR § 560.540(a), paragraphs (a)(2) or (a)(3) of this general license, or paragraphs (a)(2) or (a)(3) of General License D-1 when it was in effect.

(6) Publicly available, 2 no cost services and software to the Government of Iran. 3 (i) Services. The exportation or reexportation, directly or indirectly, from the United States or by a U.S. person, wherever located, to the Government of Iran of services described in 31 CFR § 560.540(a)(1) or categories (6) through (11) of the Annex to this general license, provided that such services are publicly available at no cost to the user. (ii) Software. The exportation, reexportation, or provision, directly or indirectly, to the Government of Iran of the software described in 31 CFR § 560.540(a)(2) or categories (6) through (11) of the Annex to this general license, read in conjunction with paragraph (a)(3) of this general license, provided that such software is publicly available at no cost to the user.

 

https://home.treasury.gov/news/press-releases/jy0974 and https://home.treasury.gov/system/files/126/iran_gld2.pdf

 

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September 26, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Diana Kajmakovic, a state prosecutor in Bosnia and Herzegovina (BiH), pursuant to Executive Order (E.O.) 14033 for being responsible for or complicit in corruption or the undermining of democratic processes or institutions in the Western Balkans. This action furthers the United States strategy to hold accountable those who carry out the destabilizing activity in the Western Balkans. These activities occur against the backdrop of BiH’s most serious political crisis since 1995, as ethno-nationalist politicians and affiliated patronage networks continue to undermine the country.

 

https://home.treasury.gov/news/press-releases/jy0975

 

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September 26, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) published one new Cuba Frequently Asked Question (1090):

 

Question 1090: Can U.S. persons send remittances to Cuba using digital payments? 

 

Answer: Yes, provided the underlying remittance transactions are authorized under 31 CFR § 515.570 of the Cuban Assets Control Regulations (CACR), and the digital payment service provider is a U.S.-registered money transmitter or other qualifying banking institution within the definition of that term provided in 31 CFR § 515.314.  For purposes of this FAQ, “digital payments” means transfers of funds sent through mobile money, mobile wallets, digital bank accounts, credit/debit cards, online payments, or other digital technology.

 

Pursuant to 31 CFR § 515.570 of the CACR, OFAC authorizes persons subject to U.S. jurisdiction to make certain categories of remittances to persons in Cuba, subject to certain conditions (please see FAQ 732 for an overview of the types of remittances U.S. persons can send and applicable conditions and requirements).  Additionally, pursuant to 31 CFR § 515.572(a)(3) of the CACR, banking institutions, as defined in 31 CFR § 515.314, including U.S.-registered money transmitters, are authorized to provide services in connection with the collection, forwarding, or receipt of authorized remittances.  Thus, digital payments service providers that fall within the definition of “banking institution” provided in 31 CFR § 515.314, including U.S.-registered money transmitters, can process authorized remittances to Cuba via digital payments.

 

A banking institution is expected to conduct a level of due diligence commensurate with its overall risk profile and internal compliance policies and procedures.  However, as noted in FAQ 1057, banking institutions, including U.S-registered money transmitters within the context of § 515.572(a)(3), may rely on the statements of their customers that remittance transactions are authorized unless they know or have reason to know a transaction is not authorized.

Section 515.572(a)(3) of the CACR does not authorize any transaction related to the collection, forwarding, or receipt of remittances involving any entity or subentity identified on the State Department’s Cuba Restricted List (CRL).

 

Generally, OFAC’s general licenses are self-executing.  This means that if U.S. persons assess that their transactions fall within the scope of the authorizations in 31 CFR § 515.570 and 31 CFR § 515.572, they may execute such transactions without further assurance from OFAC.
For transactions that do not fall within the scope of these authorizations, U.S. persons may apply for an OFAC specific license.  For example, financial institutions that fall outside the scope of 31 CFR § 515.572(a)(3) that seek to provide remittance forwarding services would not qualify for the authorization and would require a specific license.  Consistent with U.S. foreign policy, OFAC will prioritize specific license applications seeking authorization to enable remittances to flow more freely to the Cuban people via digital payments.  It is OFAC’s policy to deny specific license requests that involve transactions with CRL-listed entities for the purpose of collection, forwarding, or receipt of remittances.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1090

 

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September 28, 2022: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) reissued in their entirety the Central African Republic Sanctions Regulations, 31 CFR part 553, and the Western Balkans Stabilization Regulations, 31 CFR 588.  The Central African Republic Sanctions Regulations were previously published in abbreviated form in 2014.  The Western Balkans Stabilization Regulations were originally published in abbreviated form in 2002 and last amended in 2011.  These publications include additional interpretive guidance and definitions, general licenses, and other regulatory provisions that will provide further guidance to the public.

 

https://home.treasury.gov/system/files/126/fr87_58972.pdf and https://home.treasury.gov/system/files/126/fr87_58983.pdf

 

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September 29, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned an international network of companies involved in the sale of hundreds of millions of dollars worth of Iranian petrochemicals and petroleum products to end users in South and East Asia. This action targets Iranian brokers and several front companies in the UAE, Hong Kong, and India that have facilitated financial transfers and shipping of Iranian petroleum and petrochemical products. These entities have played a critical role in concealing the origin of the Iranian shipments and enabling two sanctioned Iranian brokers, Triliance Petrochemical Co. Ltd. (Triliance) and Persian Gulf Petrochemical Industry Commercial Co. (PGPICC), to transfer funds and ship Iranian petroleum and petrochemicals to buyers in Asia. In addition to OFAC’s designations, the Department of State is designating two entities based in the People’s Republic of China (PRC), Zhonggu Storage and Transportation Co. Ltd. and WS Shipping Co. Ltd., for their involvement in Iran’s petrochemical trade.

 

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

 

  • Clara Shipping LLC of the United Arab Emirates;
  • Iran Chemical Industries Investment Company Public Joint Stock of Iran;
  • Middle East Kimiya Pars CO., of Iran;
  • ML Holding Group Limited of China;
  • Sierra Vista Trading Limited of China;
  • Sophychem HK Limited of China;
  • Tibalaji Petrochem Private Limited of India;
  • Virgo Marine of the United Arab Emirates;
  • WS Shipping Co. Ltd., of China; and
  • Zhonggu Storage And Transportation Co., Ltd., of China.

 

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

 

  • Gas Allure (3E2066) Chemical/Oil Tanker Panama flag; Vessel Registration Identification IMO 9142150.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220929 and https://home.treasury.gov/news/press-releases/jy0980

 

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September 30, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 14 persons in Russia’s military-industrial complex, including two international suppliers, three key leaders of Russia’s financial infrastructure, immediate family members of some of the senior Russian officials, and 278 members of Russia’s legislature for enabling Russia’s sham referenda and attempt to annex sovereign Ukrainian territory. In addition, OFAC issued new guidance that warns of the heightened sanctions risk that international actors outside of Russia would face for providing political or economic support to Russia as a result of its illegal attempts to change the status of Ukrainian territory.

 

https://home.treasury.gov/news/press-releases/jy0981

 

For this complete list of designated individuals and entities please see the following link:

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220930

 

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September 30, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) published a Russia-related Frequently Asked Question (1091).

 

Question 1091: Do non-U.S. persons face sanctions risk for supporting Russia following its sham referenda, purported annexation, and continued occupation of the Kherson, Zaporizhzhya, Donetsk, and Luhansk regions of Ukraine?

 

Answer: Yes.  On September 23, G7 Leaders issued a statement condemning Russia’s sham referenda and noting their collective readiness to impose further economic costs on Russia and on individuals and entities both inside and outside of Russia that provide political or economic support for Russia’s illegal attempts to change the status of Ukrainian territory.

 

The United States is prepared to more aggressively use its authorities under existing U.S. sanctions programs to target such persons whose activities may constitute material assistance, sponsorship, financial, material, or technological support for, or goods or services to, or in support of (together “material support”), sanctioned persons or sanctionable activity.  Particular areas of targeting focus include entities and individuals in jurisdictions outside Russia that provide political or economic support for Russia’s illegal attempt to annex Ukrainian sovereign territory.  Examples of activities that could be targeted include those related to:

  • Providing material support for the organization of Russia’s sham referenda or annexation, as well as economic or other activity that seeks to legitimize Russia’s sham referenda or annexation;
  • Providing material support to Russia’s military and defense industrial base, including significant transactions by entities in third countries that provide material support to Russia’s military, defense industrial base, and designated entities and persons operating in Russia’s defense industrial base;
  • Attempting to circumvent or evade U.S. sanctions on Russia and Belarus; and
  • Providing material support to Russian entities or individuals subject to certain blocking sanctions.

 

Multiple Executive Orders (E.O.) — including E.O.s 13660, 14024, and 14065 — authorize the imposition of blocking sanctions on categories of persons — inside or outside Russia — who provide material support for Russia following its sham referenda, purported annexation, and continued occupation of the Kherson, Zaporizhzhya, Donetsk, and Luhansk regions of Ukraine.

 

U.S. sanctions are not designed to target Ukraine or the Ukrainian people, including those living in areas occupied or purportedly annexed by Russia.  In addition, as noted in OFAC’s Fact Sheet: Preserving Agricultural Trade, Access to Communication, and Other Support to Those Impacted by Russia’s War Against Ukraine and Frequently Asked Question (FAQ) 1007, OFAC sanctions do not target transactions related to the export of food or medicine, the response to the Coronavirus Disease 2019 (COVID-19) pandemic, the official business of an international organization, or the activities of nongovernmental organizations, as well as personal remittances, telecommunications, internet services, or mail.

Finally, OFAC sanctions do not prohibit transactions related to the sale of or transport of crude oil; petroleum; petroleum fuels, oils, and products of their distillation; liquefied natural gas; coal; and coal products of Russian Federation origin, aside from the importation of such products into the United States.  OFAC will generally not impose sanctions on non-U.S. persons that engage in transactions that would be authorized for U.S. persons.  For additional information, please see Russia-related General License (GL) 8C, FAQ 980, and FAQ 1018.  OFAC has issued preliminary guidance on the planned maritime services policy and related price exception for seaborne Russian oil and intends to issue additional guidance in the coming weeks.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1091

 

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September 30, 2022: The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing "Sanctions Compliance Guidance for Instant Payment Systems,” which emphasizes the importance of taking a risk-based approach to managing sanctions risks in the context of new payment technologies such as instant payment systems and to highlight considerations relevant to managing those risks.  This guidance also encourages developers of instant payment systems to incorporate sanctions compliance considerations and features as they develop these systems.

 

See the following link for guidance:

 

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

 

OFAC is also reissuing in their entirety the Libyan Sanctions Regulations, 31 CFR 570, which were previously published in abbreviated form in 2011.  This reissuance of the Libyan Sanctions Regulations includes additional interpretive guidance and definitions, general licenses, and other regulatory provisions that will provide further guidance to the public.

 

The Libyan Sanctions Regulations can be found at the following link:

 

https://home.treasury.gov/system/files/126/20220930_libya_regulations_0.pdf

 

Fines and Penalties

 

September 7, 2022: The Department of Justice announced that Instec Inc. (Instec), located in Boulder, Colorado, and Dr. Zhong Zou, Instec’s owner, and president, has agreed to pay $625,000 to resolve allegations that the company and Zou violated the False Claims Act by failing to comply with the requirements of the Buy American Act (BAA) when selling scientific instruments to federal agencies and national laboratories.

 

https://www.justice.gov/opa/pr/colorado-company-and-owner-agree-pay-625000-alleged-false-claims-related-buy-american-act

 

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September 26, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with CA Indosuez Switzerland S.A. (“CAIS”), an indirect subsidiary of Credit Agricole Corporate and Investment Bank located in Switzerland that specializes in wealth management and corporate and investment banking.  CAIS agreed to remit $720,258 to settle its potential civil liability for apparent violations of sanctions against Cuba, Ukraine-related, Iran, Sudan, and Syria.  CAIS operated U.S. dollar (USD) banking and securities accounts on behalf of 17 individual customers located in sanctioned jurisdictions and conducted USD business on behalf of these customers through the U.S. financial system, including through U.S. correspondent banks and the U.S. registered brokers or dealers in securities.

 

https://home.treasury.gov/system/files/126/20220926_CAIS.pdf

 

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September 26, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with CFM Indosuez Wealth (“CFM”), an indirect subsidiary of Credit Agricole Corporate and Investment Bank located in Monaco that specializes in wealth management and corporate and investment banking.  CFM agreed to remit $401,039 to settle its potential civil liability for apparent violations of sanctions against Cuba, Iran, and Syria.  CFM operated U.S. dollar (USD) banking and securities accounts on behalf of 11 individual customers located in sanctioned jurisdictions and conducted USD business on behalf of these customers through the U.S. financial system, including through U.S. correspondent banks and the U.S. registered brokers or dealers in securities.

 

https://home.treasury.gov/system/files/126/20220926_CFM.pdf

 

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September 27, 2022: A federal jury convicted Ji Chaoqun, 31, of Chicago, a Chinese national and former Army Reservist, yesterday for acting within the United States as an illegal agent of the People’s Republic of China.

 

According to court documents and evidence presented at trial, Ji was found guilty on one count of conspiracy to act as an agent of a foreign government, specifically the People’s Republic of China, without first notifying the Attorney General; one count of acting as an agent of the People’s Republic of China without first notifying the Attorney General; and one count of making a material false statement to the U.S. Army. The jury acquitted Ji on two counts of wire fraud.

 

Evidence presented at the two-week trial revealed that Ji worked at the direction of a high-level intelligence officer in the Jiangsu Province Ministry of State Security (JSSD), a provincial department of the Ministry of State Security for the People’s Republic of China. Ji, a Chinese citizen residing in Chicago, was tasked with providing the intelligence officer with biographical information on certain individuals for possible recruitment by the JSSD. The individuals included Chinese nationals who were working as engineers and scientists in the United States, some of whom were U.S. defense contractors.

 

https://www.justice.gov/opa/pr/former-army-reservist-convicted-acting-within-united-states-unregistered-agent-people-s

 

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September 29, 2022: Jareh Sebastian Dalke, 30, of Colorado Springs, made his initial appearance in federal court on charges that he attempted to transmit classified National Defense Information (NDI) to a representative of a foreign government.

 

Dalke was an employee of the National Security Agency (NSA) where he served as an Information Systems Security Designer from June 6, 2022, to July 1, 2022. According to the affidavit in support of the criminal complaint, between August and September 2022, Dalke used an encrypted email account to transmit excerpts of three classified documents he had obtained during his employment to an individual Dalke believed to be working for a foreign government. In actuality, that person was an undercover FBI agent. Dalke subsequently arranged to transfer additional classified information in his possession to the undercover FBI agent at a location in Denver, Colorado. The FBI arrested Dalke on Sept. 28 after Dalke arrived at the specified location.

 

https://www.justice.gov/opa/pr/former-nsa-employee-arrested-espionage-related-charges

 

*******

 

September 30, 2022: OFAC announced a settlement with Tango Card, Inc. (Tango Card), a Seattle, Washington-based company that supplies and distributes electronic rewards.  Tango Card agreed to remit $116,048.60 to settle its potential civil liability for 27,720 apparent violations of multiple U.S. sanctions programs.  As a result of deficient geolocation identification processes, Tango Card transmitted stored value products to individuals with Internet Protocol (IP) and email addresses associated with Cuba, Iran, Syria, North Korea, and the Crimea region of Ukraine.  The settlement amount reflects OFAC’s determination that Tango Card’s apparent violations were non-egregious and voluntarily self-disclosed.

 

https://home.treasury.gov/system/files/126/20220930_tango_card.pdf

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AUGUST 2022 EXPORT CONTROL REGULATION UPDATES

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.

 

*******

 

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

 

*******

 

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

 

*******

 

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

 

*******

 

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

 

*******

 

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

 

*******

 

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

 

JULY 2022 EXPORT CONTROL REGULATION UPDATES

LATEST EXPORT CONTROLS AND COMPLIANCE UPDATE

JULY 2022

This newsletter is a listing of the latest changes in export control regulations through July 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 To Sign Directives Regarding Investment In Hypersonic Weapon Industrial Base

 

July 12, 2022: President Joe Biden is poised to sign two directives that would allow the U.S. Department of Defense to invest in its hypersonic weapons industrial base as adversaries demonstrate advanced capabilities. China and Russia’s recent progress in developing hypersonic weapons, which are unique in their ability to maneuver at speeds higher than Mach 5, has the Pentagon addressing potential supply chain disruption in key technology areas. Michael White, principal director for hypersonics in the Office of the Undersecretary of Defense for Research and Engineering, said the presidential directives “about to be signed” would enable the Pentagon to invest Defense Production Act Title III funds to bolster hypersonic engine and guidance and control subsystem suppliers. Speaking during a virtual 12 Executive Mosaic forum on July 12, White said there are a number of different industrial base investment mechanisms being leveraged and enhanced for hypersonic activities. The DODs five-year spending plan for hypersonic programs is just under $25 billion for efforts ranging from early research to prototyping to fielding.

 

https://www.defensenews.com/2022/07/12/biden-to-sign-two-defense-production-act-directives-targeting-hypersonic-industrial-base/ and https://blog.executivebiz.com/government-contracting-event/event/ebiz-hypersonics-forum/

 

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

 

DDTC Name And Address Changes Posted To Website

 

July 8 through 12, 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 BAE Systems Australia Limited from Taranaki Road, Edinburgh Parks, Edinburgh SA 5111, Australia to Level 2, 80 Flinders Street, Adelaide SA 5000, Australia;
  • Change in Name from EDO MBM Technology Limited to L3Harris Release & Integrated Solutions Ltd. due to corporate rebranding; and
  • Change in Name from RUAG Australia Pty Ltd to Rosebank Engineering Pty Ltd due to corporate rebranding.

 

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The U.S. Department Of State Issued Two Temporary Open General Licenses

 

July 19, 2022: In an exciting development, DDTC has announced on July 19, 2022, the implementation of  pilot program that will provide foreign companies in the United Kingdom, Australia and Canada relief from obtaining Retransfer and Reexport authorizations for the transfer of defense articles in their possession by issuing two Temporary Open General Licenses (“OGEL”) pursuant to the International Traffic in Arms Regulations (“ITAR”) and ITAR § 126.9(b). The OGELS will authorize the retransfer and reexport of previously authorized and exported defense articles and technical data to and within Australia, Canada and the UK. The Temporary OGELs go into effect on August 1, 2022 and expire one year later on July 31, 2023. DDTC is issuing these OGELs as part of a pilot program to assess the viability and appropriateness of the open general license concept.

 

OGEL 1 and OGEL 2 relate to ITAR-controlled defense articles and technical that were previously authorized for export from the U.S. pursuant to a valid license, agreement or other authorization and cannot be used as authorization for any exports from the U.S.

 

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

 

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The U.S. Department Of State Will Accept Digital Signatures On TAAs, MLAs and WDAs

 

July 19, 2022: Based on a query from FD Associates, Inc., the U.S. Department of State, Office of Defense Trade Controls confirmed that signatories to a TAA, MLA, or WDA may use a digital signature, such as those provided by a third-party vendor (i.e., IdenTrust) who validates the identity of the individual to sign such documents.

 

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U.S. Department of Defense


The U.S. Department Of Defense Held An Industry Engagement Day Event For The Rapid Defense Experimentation Reserve

 

July 14, 2022: The U.S. Department of Defense (DoD) held an Industry Engagement Day event for the Rapid Defense Experimentation Reserve (RDER) at Johns Hopkins Applied Physics Laboratory (JHU-APL) on July 26, 2022. RDER is an initiative to encourage prototyping and experimentation in pursuit of solutions to Joint problems. Components will propose experiments to be conducted in near-term Joint

 

exercises and compete for RDER funding. The Secretary will select among proposed experiments based on alignment to the Joint Warfighting Concept and the potential to yield demonstrable warfighting utility. The Industry Engagement Day was an opportunity for the industry to learn about the RDER effort’s vision, proposal cycle, technical priorities, capability challenges, and opportunities that require private-sector support. RDER will spearhead efforts to develop capabilities that support the joint warfighter, including, but not limited to, fires, command and control, logistics, and capabilities that will drive information advantage. These efforts will culminate with multi-competent experiments that combine multiple prototypes and capabilities to expeditiously explore new concepts and create new capabilities.

 

https://www.defense.gov/News/Releases/Release/Article/3092576/department-of-defense-announces-industry-engagement-day-for-the-rapid-defense-e/

 

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U.S. Census Bureau

 

The U.S. Census Bureau Posted Guidance On Response Code 66Q Being Upgraded From A Compliance Alert To A Fatal Error

 

July 7, 2022: Effective July 13, 2022, Response Code 66Q will be upgraded from “Compliance Alert” to “Fatal” in the Automated Export System (AES).  The Response Message 66Q was initially deployed on January 13, 2022 for exports filed under the license type “C33: No License Required (NLR)”.  When a filer selects License Type C33, they are subject to the terms, provisions, and conditions described in the Export Administration Regulations (EAR) in 15 CFR Parts 730-774.

Under the EAR, an item may require a BIS export license or license exception and may not be exported under the License Type C33 NLR depending on the reason for control of the ECCN and Country of Destination.  If a filer attempts to file Electronic Export Information (EEI) with an ECCN(s) and Country of Destination combination that is prohibited from being shipped under NLR, pursuant to the EAR, they will now receive the following AES generated Response Message:

Response Code: 66Q

Narrative Text: ECCN & CTRY OF DEST NOT ALLOWED FOR C33 (NLR)

Severity: FATAL

How to Address this Response Code:

Please review the accuracy of the reported ECCN, Country of Destination, and License Type (15 CFR Parts 730-774).  If inaccurate, please correct the appropriate fields and resubmit.  If all three fields are reported correctly, and this response code is still occurring, please email BIS at ECDOEXS@bis.doc.gov and inquire about the ECCN and additional licensing authorization that may be required.

 

Editors Note: This AES response has been implemented with exports to China and Russia in mind.

 

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New Harmonized Tariff Schedule (HTS), and HTS Codes Updated On July 1, 2022

 

July 11, 2022: The Harmonized Tariff Schedule (HTS) and HTS Codes that are not valid for AES tables have been updated to accept the changes made on July 1, 2022. AES will accept shipments with outdated codes during a grace period of 30 days beyond the expiration date of June 30th, 2022Reporting an outdated code after the 30-day grace period will result in a fatal error. The ACE AESDirect program has been updated with the 2022 codes and will accept shipments with outdated codes during the grace period as well.

The 2022 Schedule B and HTS tables are available for downloading at:

http://www.census.gov/foreign-trade/aes/documentlibrary/#concordance

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

http://www.census.gov/foreign-trade/aes/documentlibrary/concordance/hts-not-for-aes.html

Editors Note: All company shipping departments should audit and validate the Schedule B and HTS codes they are using for exports and imports.      

 

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The U.S. Census Bureau Issued Tips On How To Resolve AES Response Messages

 

July 18, 2022: The U.S. Census Bureau issued tips on how to resolve AES Response Messages. When a shipment is filed in 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 exporters 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.

Fatal Error Response Code:  523

Narrative:          Schedule B/HTS Number Not Allowed for HH Goods

Severity:           Fatal

Reason:            When the Export Information Code is reported as HH for household goods, a Schedule  B/HTS Number is not allowed.

Resolution:  The Schedule B/HTS Number is not allowed to be reported when the Export Information Code is HH for household goods.

 

 

Verify the Export Information Code and Schedule B/HTS Number combination, correct the shipment and resubmit.

Response Code:  105

Narrative:          Mode of Transportation Unknown

Severity:           Fatal

Reason:             The Mode of Transportation Code reported is not valid in AES.

Resolution:       The Mode of Transportation Code reported must be one recognized in AES and listed in the ‘Appendix T, Mode of Transportation Codes’.

Verify the Mode of Transportation Code, correct the shipment and resubmit.

 

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

 

https://content.govdelivery.com/accounts/USCENSUS/bulletins/318572f

 

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

 

OFAC Advised Holders Of Blocked Property To Provide OFAC With A List Of Blocked Property Held By September 30th

 

July 1, 2022:  Pursuant to 31 C.F.R. § 501.603 the Office of Foreign Assets Control (OFAC) advises the Reporting, Procedures and Penalties Regulations (RPPR) requires holders of blocked property to provide the OFAC with a comprehensive list of all blocked property held as of June 30 of the current year by September 30.  Persons that do not hold blocked property as of June 30 do not need to file an Annual Report of Blocked Property (ARBP).  Please note that the term blocked property only applies to property that is blocked pursuant to OFAC regulations.  Property that was unblocked by an OFAC general or specific license or was previously blocked pursuant to a sanctions program that was terminated on or before June 30, 2022, is not considered blocked property and should not be reported in the ARBP.  Similarly, a restricted account of a person ordinarily resident in Iran is not blocked and should not be reported to OFAC in the ARBP unless there is an interest in the account of a person whose property and interests in property are blocked pursuant to an applicable sanctions authority.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220701

 

 

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The U.S. Department Of Treasury Published The Current List Of Countries Which Require Or May Require Participation In, Or Cooperation With, An International Boycott

 

July 7, 2022: 87 Fed. Reg. 39931: In accordance with section 999(a)(3) of the Internal Revenue Code of 1986, the Department of the Treasury published the current 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). On the basis of the best information currently available to the Department of the Treasury, the following countries 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/2022/07/05/2022-14192/list-of-countries-requiring-cooperation-with-an-international-boycott

 

Editors note: the list above does not reflect all boycotting countries. It is prudent for finance, contracts, and sales departments to be on the lookout for boycott requests.

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:

 

July 6, 2022: The Department of State is designating one Vietnam-based entity, Truong Phat Loc Shipping Trading JSC, for engaging in the shipment of petroleum products from Iran.  Truong Phat Loc Shipping Trading JSC served as the commercial and technical manager for a vessel that transported Iranian petroleum products.  The State Department is also designating one Singapore-based entity, Everwin Ship Management Pte. Ltd., which has engaged in the transport of Iranian petroleum products.  Everwin Ship Management Pte. Ltd. served as the technical manager for a vessel that transported Iranian petroleum products.  Additionally, the State Department is designating three Iran-based entities, Zagros Tarabaran-E Arya, Persian Gulf Star Oil Company, and East Ocean Rashin Shipping Co. Ltd., which have engaged in the sale and/or shipment of Iranian petroleum products.  Zagros Tarabaran-E Arya is a shipper

 

of Iranian petroleum products, while Persian Gulf Star Oil Company is the largest producer of gas condensate in Iran, and as such, has directly engaged in the production of Iranian petroleum products.  East Ocean Rashin Shipping Co. Ltd. is a port agent and freight forwarder of Iranian petroleum and petrochemical products. These actions are being taken pursuant to Executive Order 13846.

 

https://www.state.gov/targeting-irans-international-petroleum-trade/

 

 

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

 

July 8, 2022: The U.S. Department of Commerce, Bureau of Industry and Security (BIS) denied the export privileges of Amilkar Murillo of Mexico for ten (10) years. Mr. Murillo was convicted of knowingly and unlawfully concealing, buying, or facilitating the transportation and concealment of any merchandise, article, and object, prior to exportation, knowing the same to be intended for exportation from the United States, a Taurus 9mm handgun with two magazines, a Taurus 40 caliber handgun with two magazines, a Ruger 9mm handgun with two magazines, a Smith & Wesson 9mm handgun with two magazines, a Glock 380 handgun with two magazines, a Smith & Wesson 40 caliber handgun with two magazines, and a box of .380 ammunition (20 rounds), all in violation of 18 U.S.C. § 554.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/1381-e2731/file

 

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July 8, 2022: The U.S. Department of Commerce, Bureau of Industry and Security (BIS) denied the export privileges of Jason Wayne Jarvis for five (5) years. Mr. Jarvis was convicted of attempting to sell and facilitate the transportation of firearms, silencers, a short-barreled rifle, and a destructive device prior to exportation, knowing them to be intended for exportation contrary to any law or regulation of the United States, all in violation of 18 U.S.C. § 554.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/1380-e2730/file

 

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July 8, 2022: The U.S. Department of Commerce, Bureau of Industry and Security (BIS) denied the export privileges of Usama Darwich Hamade for ten (10) years. Mr. Hamade was convicted of conspiring to export parts and technology from the United States to Lebanon, and specifically to Hizballah, for among other purposes, inclusion in unmanned aerial vehicles, without obtaining the required export licenses under the Export Administration Regulations or under the International Traffic in Arms Regulations.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/1379-e2729/file

 

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July 8, 2022: The U.S. Department of Commerce, Bureau of Industry and Security (BIS) denied the export privileges of Hassan Ali Moshir-Fatemi for ten (10) years. Mr. Moshir-Fatemi was convicted of knowingly and willfully conspiring and agreeing to export, reexport, and supply, and causing to be

 

exported, reexported, and supplied, directly and indirectly, goods and services from the United States to Iran; and engaging in transactions for the purpose of avoiding and evading the Iranian Transaction Sanctions Regulations, including financing and facilitating transactions by foreign persons where such transactions are prohibited by United States law, without having first obtained from the Department of the Treasury, Office of Foreign Assets Control, the required license or written authorization. As noted in his plea agreement, Mr. Moshir-Fatemi agreed to the imposition of a ten-year Denial Order in exchange for an agreement by BIS not to pursue administrative action against him.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/1378-e2728/file

 

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July 18, 2022: The U.S. Department of Commerce, Bureau of Industry and Security (BIS) denied the export privileges of Ismael Gomez, Jr. for ten (10) years. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Gomez had an interest at the time of his conviction. Mr. Gomez was convicted of fraudulently and knowingly exporting and sending or attempting to export and send from the United States to Mexico one thousand and ten (1,010) rounds of .223 caliber ammunition, in violation of 18 U.S.C. § 554.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/1383-e2733/file

 

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July 18, 2022: The U.S. Department of Commerce, Bureau of Industry and Security (BIS) denied the export privileges of Scott Douglas Browning for seven (7) years. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Mr. Browning had an interest at the time of his conviction. Mr. Browning was convicted of willfully exporting and causing to be exported from the United States to the Netherlands defense articles, specifically Image Intensifier Generation 3 MX-10130, Image Intensifier Generation 3 MX-10160, Image Intensifier Generation 3 MX-11769, and the BAE Systems OASYS SkeetIR Micro Thermal Imaging Monocular 640x480, which are all designated as defense articles on the United States Munitions List, without having first obtained from the Department of State a license for such export or written authorization for such export. Browning was also placed on the Department of State’s debarred list.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/1384-e2734/file

 

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July 19, 2022: 87 Fed. Reg. 42997: The U.S. Department of Commerce, Bureau of Industry and Security (BIS) denied the export privileges of Joyce Marie Eliabachus (Eliabachus) for ten years based on her conviction of violating 18 U.S.C. 371. Specifically, Eliabachus was convicted of knowingly and intentionally conspiring and agreeing with others known and unknown to export, re-export, sell and supply and attempting to re-export, sell and supply aircraft components, directly or indirectly from the United States to Iran, including to Mahan Air, without first obtaining the authorization from the Office of Foreign Assets Control, in violation of 18 U.S.C. 371. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Eliabachus had an interest at the time of her conviction.

 

https://www.federalregister.gov/documents/2022/07/19/2022-15322/in-the-matter-of-joyce-marie-eliabachus-17-frederick-st-morristown-nj-07960-order-denying-export

 

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

 

July 6, 2022:  The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned an international network of individuals and entities that has used a web of Gulf-based front companies to facilitate the delivery and sale of hundreds of millions of dollars worth of Iranian petroleum and petrochemical products from Iranian companies to East Asia. These actions are taken pursuant to Executive Order (E.O.) 13846 and follows OFAC’s June 16, 2022, designation of an international sanctions evasion network supporting Iranian petrochemical sales. Concurrently with OFAC’s designations, the Department of State imposed sanctions on five entities based in Iran, Vietnam, and Singapore and two vessels pursuant to E.O. 13846 in connection with significant transactions for the sale and transport of petroleum products from Iran, on or after November 5, 2018.

 

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

 

  • Rajabieslami, Morteza of Iran, Saint Kitts and Nevis and the United Kingdom;
  • Sanchuli, Mahdieh of Iran.

 

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

  • Ali Almutawa Petroleum And Petrochemical Trading L.L.C. of the United Arab Emirates;
  • East Ocean Rashin Shipping Co of Iran;
  • Edgar Commercial Solutions FZE of the United Arab Emirates;
  • Emerald Global FZE of the United Arab Emirates;
  • Everwin Shipmanagement PTE. LTD., of Singapore;
  • Jam Petrochemical Company of Iran;
  • Lustro Industry Limited of China;
  • Oligei International Trading Co., Limited of China;
  • Persian Gulf Star Oil Company of Iran;
  • Petrogat FZE of the United Arab Emirates;
  • Petrokick LLC of the United Arab Emirates;
  • Truong Phat Loc Shipping Trading Joint Stock Company of Vietnam; and
  • Zagros Tarabaran-E Arya of Iran.

 

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

  • BS Bravo, Chemical/Oil Tanker Gabon flag (Truong Phat Loc Shipping Trading); Vessel Registration Identification IMO 9294795; and
  • Summer 5, Chemical/Oil Tanker Panama flag; Vessel Registration Identification IMO 9204805.

https://home.treasury.gov/news/press-releases/jy0851 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220706

 

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July 7, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Venezuela-Related General License 40A, "Authorizing Certain Transactions Involving the Exportation or Reexportation of Liquefied Petroleum Gas to Venezuela."

 

 

Venezuela-Related General License 40A: All transactions and activities related to the exportation or reexportation, directly or indirectly, of liquefied petroleum gas to Venezuela, involving the Government of Venezuela, Petróleos de Venezuela, S.A. (PdVSA), or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, that are prohibited by E.O. 13850 of November 1, 2018, as amended by E.O. 13857 of January 25, 2019, or E.O. 13884 of August 5, 2019, each as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized through 12:01 a.m. eastern daylight time, July 12, 2023.

 

https://home.treasury.gov/system/files/126/venezuela_gl40a.pdf

 

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July 11, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated an individual engaged in trafficking high-caliber firearms from the United States to one of Mexico’s most powerful drug organizations. OFAC designated Obed Christian Sepulveda Portillo (Obed Sepulveda) pursuant to Executive Order (E.O.) 14059 for acting for or on behalf of the Cartel de Jalisco Nueva Generacion (CJNG), a violent drug trafficking organization based in Mexico responsible for a significant proportion of fentanyl and other deadly drugs trafficked into the United States. Obed Sepulveda, a Mexican national, was designated for being directed by, or acting or purporting to act for or on behalf of, directly or indirectly, CJNG. Obed Sepulveda coordinates the daily procurement of firearms and bulk ammunition from the U.S. southwest border into Mexico through a network of individuals working directly with CJNG. Obed Sepulveda was added to OFAC’s Specially Designated Nationals List.

 

https://home.treasury.gov/news/press-releases/jy0855 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220711

 

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July 14, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 6B, General License 25C, General License 30A, General License 44, and is publishing three amended Russia-related Frequently Asked Questions (FAQs). See the following link for a description of the amended FAQs:

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/updated/2022-07-14

 

OFAC is also publishing a Food Security Fact Sheet on "Russia Sanctions and Agricultural Trade." OFAC is issuing this Fact Sheet to further clarify that the United States has not imposed sanctions on the production, manufacturing, sale, or transport of agricultural commodities (including fertilizer), agricultural equipment, or medicine relating to the Russian Federation (Russia). In addition, OFAC has issued a broad general license (GL) to authorize certain transactions related to agricultural commodities, agricultural equipment, medicine, and medical devices, as described in more detail below. The United States strongly supports efforts by the United Nations to bring both Ukrainian and Russian grain to world markets and to reduce the impact of Russia’s unprovoked war on Ukraine on global food supplies and prices. The fact sheet can be found at the following link:

 

https://home.treasury.gov/system/files/126/russia_fact_sheet_20220714.pdf

 

 

 

General License 6B: All transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587, (RuHSR),  related to (1) the production, manufacturing, sale, or transport of agricultural commodities, agricultural equipment, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices; (2) the prevention, diagnosis, or treatment of COVID19 (including research or clinical studies relating to COVID-19); or (3) ongoing clinical trials and other medical research activities are authorized. (b) For the purposes of this general license, agricultural commodities, medicine, and medical devices are defined as follows:

(1) Agricultural commodities. For the purposes of this general license, agricultural commodities are products that fall within the term “agricultural commodity” as defined in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602) and are intended for use as: (i) Food for humans (including raw, processed, and packaged foods; live animals; vitamins and minerals; food additives or supplements; and bottled drinking water) or animals (including animal feeds); (ii) Seeds for food crops; (iii) Fertilizers or organic fertilizers; or (iv) Reproductive materials (such as live animals, fertilized eggs, embryos, and semen) for the production of food animals;

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

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

 

https://home.treasury.gov/system/files/126/russia_gl6b.pdf

 

General License 25C: All transactions ordinarily incident and necessary to the receipt or transmission of telecommunications involving the RuHSR are authorized. The exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, wherever located, to the Russian Federation of services, software, hardware, or technology incident to the exchange of communications over the internet, such as instant messaging, videoconferencing, chat and email, social networking, sharing of photos, movies, and documents, web browsing, blogging, web hosting, and domain name registration services, that is prohibited by the RuHSR, is authorized.

 

https://home.treasury.gov/system/files/126/russia_gl25c.pdf

 

General License 30A: All transactions involving SEFE Securing Energy for Europe GmbH (formerly known as Gazprom Germania GmbH), or any entity in which SEFE Securing Energy for Europe GmbH owns, directly or indirectly, a 50 percent or greater interest that are prohibited by Directive 3 under Executive Order 14024, Prohibitions Related to New Debt and Equity of Certain Russia-related Entities, are authorized through 12:01 a.m. eastern standard time, December 16, 2022.

 

https://home.treasury.gov/system/files/126/russia_gl30a.pdf

 

General License 44: All transactions ordinarily incident and necessary to the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of tax preparation or filing services to any individual who is a United States person located in the Russian Federation, which are prohibited by section 1(a)(ii) of Executive Order 14071, are authorized.

 

https://home.treasury.gov/system/files/126/russia_gl44.pdf

 

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

  • Subsidiary Bank Alfa-Bank JSC of Russia; and
  • JSC SB Alfa Bank of Russia.

Bottom of Form

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July 21, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued a Finding of Violation (FOV) to MidFirst Bank (MidFirst) for violations of the Weapons of Mass Destruction Proliferators Sanctions Regulations (WMDPSR). The violations related to MidFirst’s maintaining accounts for and processing of 34 payments on behalf of two individuals added to OFAC’s List of Specially Designated Nationals and Blocked Persons (the “SDN List”) for 14 days post-designation. The violations stemmed from MidFirst’s misunderstanding of the frequency of its vendor’s screening of new names added to the SDN List against its existing customer base. OFAC determined that the appropriate administrative action in this matter was a FOV in lieu of a civil monetary penalty. This FOV reaffirms that financial institutions should take a risk-based approach to sanctions compliance, including when implementing sanctions screening tools, and demonstrates the importance of ensuring the scope and capabilities of outsourced sanctions compliance services are consistent with the financial institution’s assessment of its exposure to sanctions risks.

 

https://home.treasury.gov/system/files/126/20220721_midfirst.pdf

 

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July 22, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 45 and General License 46. OFAC is also publishing two new Frequently Asked Questions and two amended Frequently Asked Questions.

 

General License 45: All transactions prohibited by section (1)(a)(i) of Executive Order (E.O.) 14071 that are ordinarily incident and necessary to the wind down of financial contracts or other agreements that were entered into on or before June 6, 2022, and involve, or are linked to, debt or equity issued by an entity in the Russian Federation (“covered contracts”), are authorized through 12:01 a.m. eastern daylight time, October 20, 2022. The transactions authorized by this general license include:

(1) the purchase by U.S. persons of debt or equity issued by an entity in the Russian Federation where that purchase is ordinarily incident and necessary to the wind down of covered contracts; and

(2) the facilitating, clearing, and settling of purchase by U.S. persons of debt or equity issued by an entity in the Russian Federation, where that purchase is ordinarily incident and necessary to the wind-down of covered contracts.

 

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_gl45.pdf

 

General License 46: All transactions related to the establishment, administration, participation in, and execution of an auction process as announced by the EMEA Credit Derivatives Determination Committee (“the auction”) to settle credit derivative transactions with a reference entity of “the Russian Federation” and prohibited by section 1(a)(i) of Executive Order (E.O.) 14071 is authorized. Except as provided above, the purchase or receipt of debt obligations of the Russian Federation by U.S. persons prohibited by section 1(a)(i) of E.O. 14071 is authorized for the period beginning two business days prior to the announced date of the auction and ending eight business days after the conclusion of the auction. All transactions ordinarily incident and necessary to facilitating, clearing, and settling transactions authorized above 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 RuHSR, including transactions involving any person blocked pursuant to the RuHSR, unless separately authorized.

 

https://home.treasury.gov/system/files/126/russia_gl46.pdf

 

New Frequently Asked Questions:

 

Question 1072: What does Russia-related General License (GL) 46 authorize with respect to credit derivative transactions referencing “the Russian Federation”? 

 

Answer: Russia-related GL 46 authorizes transactions otherwise prohibited by section (1)(a)(i) of Executive Order (E.O.) 14071 related to the establishment, administration, participation in, and execution of an auction process, as announced by the EMEA Credit Derivatives Determination Committee, to settle credit derivative transactions with a reference entity of “the Russian Federation” (“the auction”).

 

Examples of transactions that may be related to the auction include the submission and acceptance of bids and offers and physical settlement requests by auction participants and their customers, or the delivery and acceptance of the Russian Federation debt obligations and corresponding settlement amounts.

To promote the proper functioning of such an auction, GL 46 also authorizes U.S. persons to purchase or receive Russian Federation debt obligations for the period beginning two business days prior to the announced date of the auction and ending eight business days after the conclusion of the auction.

GL 46 also authorizes financial institutions, among others, to facilitate, clear, and settle transactions authorized by GL 46, including the transfer to, or purchase or receipt by U.S. persons of Russian Federation debt obligations.  GL 46 does not require the clearance and settlement of such transactions to be completed within eight business days after the conclusion of the auction.  For example, a purchase by a U.S. person of Russian Federation debt obligations made on the seventh business day after the conclusion of the auction does not have to be settled or cleared by the eighth business day.  Accordingly, U.S. financial institutions may continue settling or clearing such transactions after the eighth business day following the conclusion of the auction.

 

Financial institutions processing transactions pursuant to GL 46 may reasonably rely upon the information available to them in the ordinary course of business for the purposes of assessing whether a transaction is authorized by GL 46, provided that the financial institution does not know or have reason to know that a transaction is not in compliance with GL 46.

 

Question 1071: Can I wind down financial contracts that may involve transactions prohibited pursuant to section (1)(a)(i) of Executive Order (E.O.) 14071 related to the purchase or receipt of debt or equity securities issued by an entity in the Russian Federation?

 

Answer: Through 12:01 a.m. eastern daylight time, October 20, 2022, Russia-related General License (GL) 45 authorizes all transactions prohibited by section (1)(a)(i) of E.O. 14071 that are ordinarily incident and necessary to the wind-down of financial contracts or other agreements that were entered into on or before June 6, 2022, and involve, or are linked to, debt or equity securities issued by an entity in the Russian Federation.

 

The authorized transactions include the purchase, or facilitating the purchase, by U.S. persons of debt or equity securities issued by an entity in the Russian Federation if that purchase is ordinarily incident and necessary to the wind-down of a financial contract or agreement entered into on or before June 6, 2022.  For example, U.S. persons may purchase securities issued by an entity in the Russian Federation in order to cover or close out a short position, per a securities lending agreement, if such agreement was entered into on or before June 6, 2022.  Please see FAQ 1054 for additional information on the scope of the prohibition in section 1(a)(i) of E.O. 14071, including permissible transactions related to the divestment or transfer of debt or equity securities to a non-U.S. person.

 

Note that Russia-related GL 46 separately authorizes transactions related to the settlement of credit derivative transactions referencing “the Russian Federation” via an auction process.  For further information, please see FAQ 1072.  GL 45 does not authorize any transactions involving blocked persons unless separately authorized.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-07-22

 

See the following link for the amended FAQs:

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/updated/2022-07-22

 

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July 29, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) added the following individuals its Specially Designated Nationals (SDN) list: 

  • Burlinova, Natalya Valeryevna of Russia; and
  • Ionov, Aleksandr Viktorovich of Russia.

 

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

  • Anti-Globalization Movement Of Russia;
  • Center For Support And Development Of Public Initiative Creative Diplomacy of Russia;
  • Ionov Transkontinental, OOO of Russia; and
  • Stop-Imperialism Global Information Agency of Russia.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220729

 

Fines and Penalties

 

July 1, 2022: Kristopher Sean Matthews, aka Ali Jibreel, 36, of South Carolina, was sentenced to 20 years in prison, and Jaylyn Christopher Molina, aka Abdur Rahim, 24, of Cost, Texas, was sentenced to 18 years in prison for conspiring to provide material support to the designated foreign terrorist organization the Islamic State of Iraq and al-Sham/Syria (ISIS). According to court documents, since May 2019, Matthews conspired with Molina to provide services to ISIS by administering an encrypted, members-only chat group for persons who supported ISIS ideology; by collecting, generating, and disseminating pro-ISIS propaganda; and by disseminating firearms training materials and bomb-making instructions to each other and to other members of the chat group and others.

 

https://www.justice.gov/opa/pr/men-sentenced-federal-prison-conspiring-provide-material-support-terrorists

 

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July 8, 2022: Aerojet Rocketdyne Inc., headquartered in El Segundo, California, has agreed to pay $9 million to resolve allegations that it violated the False Claims Act by misrepresenting its compliance with cybersecurity requirements in certain federal government contracts, the Justice Department announced. Aerojet provides propulsion and power systems for launch vehicles, missiles and satellites, and other space vehicles to the Department of Defense, NASA, and other federal agencies. The settlement resolves a lawsuit filed and litigated by former Aerojet employee Brian Markus against Aerojet under the qui tam or whistleblower provisions of the False Claims Act, which permit a private party (known as a relator) to file a lawsuit on behalf of the United States and receive a portion of any recovery. Mr. Markus and Aerojet reached a settlement of the case on the second day of trial. Mr. Markus will receive $2.61 million as his share of the False Claims Act recovery.

 

https://www.justice.gov/opa/pr/aerojet-rocketdyne-agrees-pay-9-million-resolve-false-claims-act-allegations-cybersecurity

 

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July 8, 2022: The United States Court of Appeals for the District of Columbia upheld a lower court’s ruling dismissing a complaint from Federal Express Corporation (FedEx) and holding it liable for violating the Export Control Reform Act of 2018 (ECRA) even though the common carrier had been completely unaware of its violation. On appeal, FedEx unsuccessfully argued the Department of Commerce’s strict liability interpretation of 15 C.F.R.  § 764.2(b) is ultra vires – a clear overstep of statutory authority. The Appeals Court strongly held that Commerce’s strict liability regime was permissible pursuant to the statutory text, circuit precedent, and judicial deference to the executive branch on national security and foreign policy matters.

 

https://www.jdsupra.com/legalnews/fedex-held-liable-for-act-done-3316874/ and https://www.cadc.uscourts.gov/internet/opinions.nsf/D120DC56392651728525887900595C97/$file/20-5337-1954068.pdf

 

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July 11, 2022: Intertech Trading Corporation, an Atkinson, New Hampshire-based laboratory equipment distributor, plead guilty in federal court to 14 felony counts of failure to file export information on shipments to Russia and Ukraine. 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 the 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. Intertech is scheduled to be sentenced on October 17, 2022.

 

https://www.justice.gov/usao-nh/pr/intertech-trading-corp-pleads-guilty-14-felonies-failure-file-export-information

 

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July 14, 2022: John “Mark” Leveritt, 62, a Texas military contractor, pleaded guilty to rigging bids on government contracts from at least May 2013 through April 2018. According to court documents, Leveritt conspired with others to rig bids on certain government contracts in order to give the false impression of competition and to secure government payments in excess of $17.5 million. The plea agreement detailed seven contracting bids that Leveritt and his co-conspirator rigged, which included work performed for the Red River Army Depot in Texarkana and the U.S. Contracting Command in Warren, Michigan. Leveritt also admitted to falsely representing himself to be an employee of one business so that he could obtain government contracts that were set aside for qualifying businesses that were required to be owned and operated by certain categories of minority, disadvantaged or disabled persons. In fact, the work for some of the contracts was performed by businesses that had not placed any bids. Leveritt also admitted to providing a government employee with: tickets to a 2011 World Series game; tickets to two college football games; two expense-paid family vacations to Las Vegas; donations to youth sports teams coached by the government employee; and approximately 100 meals at restaurants.

 

https://www.justice.gov/opa/pr/military-contractor-pleads-guilty-rigging-bids-public-contracts-texas-and-michigan

 

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July 15, 2022: American Express National Bank (Amex), a subsidiary of American Express Company, which provides charge and credit card products and travel-related services to consumers and businesses, has agreed to a settlement with the Department of the Treasury's Office of Foreign Assets Control (OFAC)  and agreed to remit $430,500 to settle its potential civil liability for 214 apparent violations of OFAC’s Kingpin sanctions. Over the course of two months, Amex processed transactions for an account whose supplemental card holder was designated in connection with illegal drug distribution and money laundering. A combination of human error and sanctions compliance program deficiencies enabled the account to engage in $155,189.42 worth of transactions. The settlement amount reflects OFAC’s determination that the apparent violations were not voluntarily self-disclosed and were non-egregious.

 

https://home.treasury.gov/system/files/126/20220715_amex.pdf

 

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July 26, 2022: Federal law enforcement officials announced that three indictments were unsealed in federal court, detailing charges against three men, two formerly of Northeast Ohio, who are believed to be currently residing in Lebanon. Named in the indictments are George Nakhle Ajaltouni, 47, formerly of North Olmsted; Jean Youssef Issa, 48, of Batroun, Lebanon; and Nakhle “Mike” Nader, 51, formerly of Cleveland.  Ajaltouni and Issa are charged for their roles in a scheme to smuggle and illegally ship firearms from Cleveland to Lebanon.  Nader is charged in a separate indictment with income tax evasion.

Jean Youssef Issa was recently arrested pursuant to a Red Notice issued by Interpol. The three indictments describe separate schemes, one involving Ajaltouni and Issa; one involving Ajaltouni alone; and the other solely concerning Nader. While the schemes are separate, it is believed that Ajaltouni and Nader are acquaintances and that the two men are currently residing near Batroun, Lebanon.  The indictments were originally filed between 2016 - 2019, and efforts to apprehend Ajaltouni and Nader remain ongoing.

 

https://www.justice.gov/usao-ndoh/pr/three-lebanon-charged-schemes-smuggle-weapons-cleveland-and-income-tax-evasion

 

 

JUNE 2022 EXPORT CONTROL REGULATION UPDATES

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

 

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

 

DDTC Name And Address Changes Posted To Website

 

June 7 through 24, 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 from Cyalume Technologies, Inc., to Safariland, LLC, due to acquisition;
  • Change in Name and Address from GECAS Australia Pty Ltd at 572 Swan Street, Burnley, Victoria 3121, Australia to AerCap Australia Pty Ltd at c/o TMF Corporate Services (Aust) Pty Limited, Suite 1, Level 11, 66 Goulburn Street, Sydney, New South Wales 2000, Australia due to acquisition;
  • Change in Address for Mitsubishi International Corporation from 655 3rd Avenue, New York, New York 10017 to 151 W. 42nd Street, New York, New York 10036-6641;
  • Change in Name and Ownership from APSYS SAS to Airbus Protect SAS due to merger with Airbus CyberSecurity SAS;

 

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Department of Defense

 

June 17, 2022: The Defense Counterintelligence and Security Agency (DCSA) is renaming the Department of Defense Consolidated Adjudications Facility (DOD CAF) to better reflect personnel vetting into the future. DoD CAF is now DCSA Consolidated Adjudication Services (CAS). The renaming to DCSA CAS does not change any internal or external organizational reporting relationships, missions, resources, or support functions. DCSA, through the CAS, will continue to deliver informed and timely adjudicative decisions for the Federal Government to enable operational readiness in keeping with risk management principles.

 

https://www.dcsa.mil/About-Us/News/News-Display/Article/3067652/renaming-of-the-dod-caf/

 

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

 

BIS Updates The EAR Adopting Prior Notification Requirements To Congress For Small Arms

 

June 1, 2022: 87 Fed. Reg. 32983: In this final rule, the Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) to add a new section, § 743.6, “Prior Notifications To Congress” of exports of semiautomatic firearms, to adopt a congressional notification requirement for certain license applications having semiautomatic firearms that are (i) classified under Export Control Classification Number (ECCN) 0A501.a and (ii) valued at $4 million or more. The congressional notification requirement will not apply if the total value of the application is valued at $4 million or more, but contains 0A501.a semiautomatic firearms valued at less than $4 million. Further, the congressional notification requirement will not apply to license applications if the 0A501.a semiautomatic firearms are destined for countries in Country Group A:5 or A:6 (see supplement no.1 to part 740 of the EAR), with the exception of Mexico, South Africa, and Turkey. The congressional notification requirement will also not apply to exports to personnel and agencies of the U.S. Government under License Exception GOV (§ 740.11(b) of the EAR) or when for the official use by an agency of the North Atlantic Treaty Organization (NATO). While the ITAR's congressional notification requirement is informative for developing new § 743.6 of the EAR, BIS is utilizing a different scope for this congressional notification requirement. Under the EAR, exporters can make a good faith estimate of the quantity and value of exports needed over the standard four-year validity period of a BIS license. This can include a license covering multiple purchase orders or anticipated purchase orders. Under the ITAR, DSP-5 licenses are generally tied to a single purchase order. To account for these differences, BIS is using $4 million as the value for the congressional notification requirement under § 743.6, which is an equivalent annual average of $1 million in potential exports per year during the validity period of the license. Essentially, the value threshold in § 743.6 will be four times the value of the ITAR's value threshold in ITAR §123.15(a)(3) reflecting the difference in licensing requirements. Additionally, because these semiautomatic firearms are less sensitive than the fully-automatic firearms that continue to be controlled under USML Category I of the ITAR, the congressional notification requirement will not apply to the group of allied countries referenced above.

 

https://www.federalregister.gov/documents/2022/06/01/2022-11761/adoption-of-congressional-notification-requirement-for-certain-semiautomatic-firearms-exports-under

 

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U.S. Census Bureau

 

June 30, 2022: The U.S. Census Bureau has researched the reporting of two data elements in the AES, reporting the USPPI Address and State of Origin and discovered that over 12 percent of the EEI contained differences even though the definitions are merely identical.  As a result, the Census Bureau’s Trade Regulations Branch (TRB) contacted USPPIs whose USPPI Address State and State of Origin did not match to educate and train on the AES filing requirements.  The overall goal of this research is to determine if the removal of the State of Origin data element would have any risk to the Census Bureau’s statistical processing.

Below is a common example of how to properly report the USPPI Address and State of Origin data elements:

A U.S. company, Pack, Inc. (Pack), headquartered in Texas sold goods to a foreign buyer in the United Kingdom. The goods originated in several states and were consolidated by a freight forwarder in California to be prepared for export.  Pack could not determine the state where the highest value of goods originated.  Therefore, to be compliant with the FTR, the USPPI Address and State of Origin shall be California, where the goods were consolidated.  This is the case, even if Pack does not own/lease the consolidation facility.  Pack would be incorrect if they reported their headquarters in Texas as the USPPI Address and State of Origin because that is not the location where the goods actually began their journey to the port of export.

For reference, the definitions from section 30.6 of the FTR are provided below:

(a)(1)(ii) Address of the USPPI. In all EEI filings, the USPPI shall report the address or location (no post office box number) from which the goods actually begin the journey to the port of export even if the USPPI does not own/lease the facility.  For example, the EEI covering goods laden aboard a truck at a warehouse in Georgia for transport to Florida for loading onto a vessel for export to a foreign country shall show the address of the warehouse in Georgia. For shipments with multiple origins, report the address from which the commodity with the greatest value begins its export journey. If such information is not known, report the address in the state where the commodities are consolidated for export.

(a)(4) U.S. state of origin. The U.S. state of origin is the 2-character postal code for the state in which the goods begin their journey to the port of export. For example, a shipment covering goods laden aboard a truck at a warehouse in Georgia for transport to Florida for loading onto a vessel for export to a foreign country shall show Georgia as the state of origin. The U.S. state of origin may be different from the U.S. state where the goods were produced, mined, or grown. For shipments of multi-state origin, reported as a single shipment, report the U.S. state of the commodity with the greatest value. If such information is not known, report the state in which the commodities are consolidated for export.

 

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:

 

June 9, 2022: 87 Fed. Reg. 35281: Based upon a review of the Administrative Record assembled pursuant to Section 219(a)(4)(C) of the Immigration and Nationality Act, as amended (8 U.S.C. 1189(a)(4)(C)) (“INA”), and in consultation with the Attorney General and the Secretary of the Treasury, the U.S. Department of State continues to designate al-Qa'ida in the Arabian Peninsula (and Other Aliases) as a Foreign Terrorist Organization.

 

https://www.federalregister.gov/documents/2022/06/09/2022-12356/review-of-the-designation-as-foreign-terrorist-organizations-of-al-qaida-in-the-arabian-peninsula

 

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

 

June 6, 2022: 87 Fed. Reg. 34154: In response to the Russian Federation's (Russia's) further invasion of Ukraine on February 24, 2022, the Department of Commerce amended the Export Administration Regulations (EAR) by adding 71 entities under 71 entries to the Entity List. These entities have been determined by the U.S. Government to be acting contrary to the national security interests or foreign policy of the United States and will be listed on the Entity List under the destinations of Belarus and Russia.

 

For the reasons described above, this final rule adds the following 71 entities under 71 entries to the Entity List and includes, where appropriate, aliases:

 

Belarus:

  • Joint Stock Company Eleron.

 

Russia:

  • A. Kharkevich Institute for Information Transmission Problems (IITP), Russian Academy of Sciences (RAS);
  • Ak Bars Holding;
  • AO Rubin;
  • Branch of AO Company Sukhoi Yuri Gagarin Komsomolsk on Amur Aircraft Plant;
  • Branch of PAO Il—Aviastar;
  • Branch of RSK MiG Nizhny Novgorod Aircraft Construction Plant Sokol;
  • Chkalov Novosibirsk Aviation Plant;
  • Concern Radio-Electronic Technologies, Joint Stock Company Aeropribor Voskhod;
  • Concern Radio-Electronic Technologies, Joint Stock Company All Russian Scientific Research Institute Gradient;
  • Concern Radio-Electronic Technologies, Joint Stock Company Almatyevsk Radiopribor Plant;
  • Concern Radio-Electronic Technologies, Joint Stock Company Experimental Design Bureau Elektroavtomatika in the name of P.A. Efimov;
  • Concern Radio-Electronic Technologies, Joint Stock Company Industrial Controls Design Bureau;
  • Concern Radio-Electronic Technologies, Joint Stock Company Kazan Instrument Engineering and Design Bureau;
  • Concern Radio-Electronic Technologies, Joint Stock Company Microtechnology;
  • Concern Radio-Electronic Technologies, Joint Stock Company Phasotron Scientific Research Institute of Radio Engineering;
  • Concern Radio-Electronic Technologies, Joint Stock Company Radiopribor;
  • Concern Radio-Electronic Technologies, Joint Stock Company Ramensk Instrument Engineering Bureau;
  • Concern Radio-Electronic Technologies, Joint Stock Company Research and Production Center SAPSAN;
  • Concern Radio-Electronic Technologies, Joint Stock Company Rychag;
  • Concern Radio-Electronic Technologies, Joint Stock Company Scientific Production Enterprise Izmeritel;
  • Concern Radio-Electronic Technologies, Joint Stock Company Scientific Production Union for Radioelectronics named after V.I. Shimko;
  • Concern Radio-Electronic Technologies, Joint Stock Company Taganrog Communications Scientific Research Institute;
  • Concern Radio-Electronic Technologies, Joint Stock Company Urals Instrument Engineering Plant;
  • Concern Radio-Electronic Technologies, Joint Stock Company Vzlet Engineering Testing Support;
  • Concern Radio-Electronic Technologies, Joint Stock Company Zhiguli Radio Plant;
  • Concern Radio-Electronic Technologies, Public Joint Stock Company Bryansk Special Design Bureau;
  • Concern Radio-Electronic Technologies, Public Joint Stock Company Moscow Institute of Electro Mechanics and Automation;
  • Concern Radio-Electronic Technologies, Public Joint Stock Company Stavropol Radio Plant Signal;
  • Concern Radio-Electronic Technologies, Public Joint Stock Company Techpribor;
  • Concern Radio-Electronic Technologies, Ramensky Instrument Engineering Plant;
  • Concern Radio-Electronic Technologies, V.V. Tarasov Avia Avtomatika;
  • Design Bureau of Chemical Machine Building KBKhM;
  • Far Eastern Shipbuilding and Ship Repair Center;
  • Gazprom Neft Shelf;
  • Ilyushin Aviation Complex Branch: Myasishcheva Experimental Mechanical Engineering Plant;
  • Institute of Marine Technology Problems Far East Branch Russian Academy of Sciences;
  • Irkutsk Aviation Plant;
  • Joint Stock Company Aerocomposit;
  • Joint Stock Company Avtomatika;
  • Joint Stock Company Bryansk Electromechanical Plant;
  • Joint Stock Company Eleron;
  • Joint Stock Company Experimental Design Bureau named after A.S. Yakovlev;
  • Joint Stock Company Federal Research and Production Center Altai;
  • Joint Stock Company Head Special Design Bureau Prozhektor;
  • Joint Stock Company Ilyushin Aviation Complex;
  • Joint Stock Company Lazurit Central Design Bureau;
  • Joint Stock Company Ramensky Instrument Engineering Plant;
  • Joint Stock Company Research and Development Enterprise Protek;
  • Joint Stock Company SPMDB Malachite;
  • Joint Stock Company Votkinsky Zavod;
  • Kalyazinsky Machine Building Factory Branch of RSK MiG;
  • Main Directorate of Deep-Sea Research;
  • NPP Start;
  • OAO Radiofizika;
  • A. Voronin Lukhovitsk Aviation Plant, branch of RSK MiG;
  • Public Joint Stock Company Voronezh Joint Stock Aircraft Company;
  • Radio Technical Institute named after A. L. Mints;
  • Russian Federal Nuclear Center—All Russian Research Institute of Experimental Physics;
  • Shvabe JSC;
  • Special Research Bureau for Automation of Marine Researches Far East Branch Russian Academy of Sciences;
  • Special Technological Center LLC;
  • Petersburg Marine Bureau of Machine Building Malakhit;
  • Petersburg Naval Design Bureau Almaz;
  • Petersburg Shipbuilding Institution Krylov 45;
  • Strategic Control Posts Corporation;
  • Systems of Biological Synthesis LLC;
  • TsKB MT Rubin;
  • Vladimir Design Bureau for Radio Communications OJSC;
  • A. Trapeznikov Institute of Control Sciences of Russian Academy of Sciences; and
  • Voentelecom JSC.

 

https://www.federalregister.gov/documents/2022/06/06/2022-12144/additions-of-entities-to-the-entity-list

 

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June 16, 2022: The U.S. Department of Commerce, Bureau of Industry and Security (BIS) issued an order temporarily denying all export privileges for Belavia Belarusian Airlines (Belavia) due to ongoing violations of the comprehensive export controls imposed on Belarus by the Commerce Department. The flag carrier and state-owned national airline of Belarus, Belavia has been providing flight services for passengers and cargo on U.S.-origin aircraft in violation of U.S. export controls. This is the first enforcement action taken by BIS against an airline in Belarus under the stringent export controls imposed by the United States in response to Belarus’s steadfast support of Russia’s unprovoked and brutal invasion of Ukraine.

 

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3029-2022-06-16-bis-press-release-belavia-tdo/file

 

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June 24, 2022: The U.S. Department of Commerce, Bureau of Industry and Security (BIS) issued orders denying the export privileges of three Russian airlines – Nordwind Airlines, Pobeda Airlines, and S7 Airlines – due to ongoing apparent violations of the comprehensive export controls imposed on Russia by the Commerce Department. These three Temporary Denial Orders (TDOs) terminate the right of these airlines to participate in transactions subject to the Export Administration Regulations (EAR), including exports and reexports from the United States. These TDOs are issued for 180 days and may be renewed.

 

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3038-2022-06-24-bis-press-release-nordwind-pobeda-s7-temporary-denial-orders/file

 

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June 30, 2022: 87 Fed. Reg. 38920: In this rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding 36 entities under 41 entries to the Entity List. These 36 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. These entities will be listed on the Entity List under the destinations of the People’s Republic of China (China), Lithuania, Pakistan, the Russian Federation (Russia), Singapore, the United Arab Emirates (UAE), the United Kingdom, Uzbekistan, and Vietnam. Some entities are added under multiple entries, accounting for the difference in the total number of entities and entries in this rule. This rule also revises eleven existing entries under the destinations of Belarus, China, Russia, and Slovakia and corrects one existing entry on the Entity List under the destination of Pakistan. Lastly, this rule removes two entities and one address for a non-listed entity, consisting of one removal of an entity and one removal of an address under the destination of China, and one removal under the destination of Pakistan. The removals from the Entity List are made in connection with requests for removal that BIS received pursuant to the EAR and a review of the information provided in those requests.

 

Six entities under ten entries are added to the Entity List on the basis of § 744.11(b) and under the destinations of China, Lithuania, Russia, the United Kingdom, Uzbekistan, and Vietnam. These six entities and their identified subsidiaries are added to the Entity List with a license requirement for all items subject to the EAR. BIS will review license applications for items for these entities under a policy of denial apart from food and medicine designated as EAR99, which will be reviewed on a case-by-case basis. No license exceptions are available for exports, reexports, or transfers (in-country) to these entities.

 

  • Connec Electronic Ltd. (added under China and the United Kingdom);
  • King Pai Technology Co., Ltd. (added under China, Russia, and Vietnam);
  • Sinno Electronics Co., Ltd. (added under China and Lithuania);
  • Winninc Electronic (added under China);
  • World Jetta (H.K.) Logistics Limited (added under China); and
  • Promcomplektlogistic Private Company (added under Uzbekistan) for providing support to Russia’s military and/or defense industrial base.

 

 

The following twelve entities are added to the Entity List on the basis of § 744.11(b) under the destination of China.  These entities are added for their activities contrary to the national security and foreign policy interests of the United States. Specifically, these entities use deceptive practices to supply or attempt to supply Iran with U.S-origin electronics that would ultimately provide support to Iran’s military. These entities are added to the Entity List with a license requirement for all items subject to the EAR. BIS will review license applications for items for these entities under a presumption of denial. No license exceptions are available for exports, reexports, or transfers (in-country) to these entities.

 

  • At One Electronics;
  • Blueschip Company Limited;
  • Chen Zhouqian;
  • Chipwinone Electronics;
  • Chuangxinda ElectronicsTech Co., Ltd.;
  • Ehang International Trade Limited;
  • Gaohui HK Electronics;
  • ICSOSO Electronics Company Limited;
  • Shenzhen Avanlane;
  • Suntric Company Limited;
  • Wayne Weipeng; and
  • Yiru Zhuang.

 

 

Eight entities under nine entries to the Entity List on the basis of § 744.11(b) under the destinations of China and Singapore, with one of the entities listed under both destinations.  All of the eight entities are added to the Entity List for acquiring and attempting to acquire U.S.-origin items in support of military applications, contrary to the national security or foreign policy interests of the United States. These entities are added to the Entity List with a license requirement for all items subject to the EAR. BIS will review license applications for items for these entities under a presumption of denial. No license exceptions are available for exports, reexports, or transfers (in-country) to these entities.

 

The entities are as follows:

  • Beijing Highlander Digital Technology Co. Ltd (added under China and Singapore);
  • China Academy of Science—Shenyang Institute of Automation;
  • China State Shipbuilding Corp.—Systems Engineering Research Institute;
  • CSSC Electronic Technology;
  • Highlander (Hong Kong) Maritime Navigation Science and Technology LLC;
  • Laurel Technologies Co. Ltd.;
  • Sansha Highlander Marine Information Technology Co. Ltd.; and
  • Sanya Highlander Huanyu Ocean Information Technology Corporation.

 

 

Two entities are added to the Entity List on the basis of § 744.11(b) under the destination of Russia.

The two entities are added on the basis of their attempts to procure items, including U.S.-origin items, for activities contrary to the national security and foreign policy interests of the United States. Specifically, Intertech Rus LLC and Laboratory Systems and Technologies LTD are acting as agents, fronts, or shell companies for OOO Intertech Instruments, an entity added to the Entity List under the destination of Russia on March 4, 2021 (86 FR 12531). The two entities are added to the Entity List with a license requirement for all items subject to the EAR. BIS will review license applications for items for these entities under the license review policies specified in §§ 744.2(d) (restrictions on certain nuclear end-uses), 744.3(d) (restrictions on certain rocket systems and unmanned aerial vehicles end uses), and 744.4(d) (restrictions on certain chemical and biological weapons end-uses) of the EAR. No license exceptions are available for exports, reexports, or transfers (incountry) to these entities.

 

  • Laboratory Systems and Technologies LTD; and
  • Intertech Rus LLC.

 

 

Two entities are added to the Entity List on the basis of § 744.11(b) under the destination of Russia.

These two entities are added for actions contrary to the national security and foreign policy interests of the United States. These entities are added to the Entity List with a license requirement for all items subject to the EAR. BIS will review license applications for items for these entities under a case-by-case license review policy. No license exceptions are available for exports, reexports, or transfers (in-country) to these entities.

 

  • FASTAIR; and

 

Four entities are added to the Entity List on the basis of §§ 744.11(b), 744.2 and 744.3.

The four entities are added for actions contrary to the national security or foreign policy interests of the United States, and because these entities pose an unacceptable risk of using or diverting items subject to the EAR to certain nuclear end-uses and certain rocket systems and unmanned aerial vehicles end-uses. These entities are added to the Entity List with a license requirement for all items subject to the EAR. BIS will review license applications for items for these entities under a presumption of denial. No license exceptions are available for exports, reexports, or transfers (in-country) to these entities.

 

  • Gulf Trade House FZC; UAE;
  • Industrial Process Automation; Pakistan;
  • Jim Corporation; Pakistan; and
  • Maira Trade International; Pakistan.

 

Al Noor Alaili Trading Company (ANATCO) is added to the Entity List on the basis of § 744.11(b) under the destination of the UAE. ANATCO is added for preventing the accomplishment of an End Use Check (EUC) by precluding access to, refusing to provide information to, and/or providing false or misleading information about parties to the transaction or the item to be checked. This entity is added to the Entity List with a license requirement for all items subject to the EAR. BIS will review license applications for items for this entity under a presumption of denial. No license exceptions are available for exports, reexports, or transfers (in-country) to this entity.

 

Scott Technologies FZE: UAE is added to the Entity List on the basis of § 744.11(b) for acquiring and attempting to acquire U.S.-origin items on behalf of entities listed on the Entity List, in circumvention of the licensing requirements set forth in § 744.11 of the EAR. Specifically, Scott Technologies FZE was added for re-exporting aircraft parts to Syria. A license is required for all items subject to the EAR. BIS will review license applications for items for this entity under a presumption of denial. No license exceptions are available for exports, reexports, or transfers (in-country) to this entity.

 

The following entities under to the Entity List including, where appropriate, aliases:

China:

  • At One Electronics;
  • Beijing Highlander Digital Technology Co. Ltd;
  • Blueschip Company Limited;
  • Chuangxinda Electronics-Tech Co.;
  • Chen Zhouqian;
  • China Academy of Science - Shenyang Institute of Automation;
  • China State Shipbuilding Corp. - Systems Engineering Research Institute;
  • Chipwinone Electronics Co., Limited;
  • Connec Electronic Ltd.;
  • CSSC Electronic Technology;
  • Ehang International Trade Limited;
  • Gaohui HK Electronics;
  • Highlander (Hong Kong) Maritime Navigation Science and Technology LLC;
  • ICSOSO Electronics Co. Ltd.;
  • King Pai Technology Co., Ltd.;
  • Laurel Technologies Co. Ltd.;
  • Sansha Highlander Marine Information Technology Co. Ltd.;
  • Sanya Highlander Huanyu Ocean Information Technology Corporation;
  • Shenzhen Avanlane;
  • Sinno Electronics Co., Ltd.;
  • Suntric Company Limited;
  • Wayne Weipeng;
  • Winninc Electronic;
  • World Jetta (H.K.) Logistics Limited; and
  • Yiru Zhuang Lithuania; Sinno Electronics.

 

Pakistan:

  • Industrial Process Automation;
  • Jim Corporation; and
  • Maira Trade International.

 

Russia:

  • Avcom-Technique;
  • FASTAIR;
  • Intertech Rus LLC;
  • KingPai Technology Int’l Co., Limited; and
  • Laboratory Systems and Technologies LTD.

 

Singapore:

  • Beijing Highlander Digital Technology Co., Ltd.

 

United Arab Emirates

  • Al Noor Alaili Trading Company;
  • Gulf Trade House FZC; and
  • Scott Technologies FZE.

 

United Kingdom:

  • Connec Electronic.

 

Uzbekistan:

  • Promcomplektlogistic Private Company.

 

Vietnam:

  • KingPai Technology Int’l Co., Limited.

 

https://www.bis.doc.gov/index.php/documents/regulations-docs/federal-register-notices/federal-register-2022/3053-87-fr-38920-entity-list-rule-effective-6-28-22-published-6-30-22/file and https://www.bis.doc.gov/index.php/federal-register-notices#fr38920

 

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

 

June 1, 2022: the U.S. Department of Treasury's Office of Foreign Assets Control has published three new Frequently Asked Questions related to the Chinese Military-Industrial Complex Sanctions.


Question 1048: After the relevant 365-day divestment period, are U.S. financial institutions required to block the attempted purchase or sale of Chinese Military-Industrial Complex Companies' (CMIC) securities covered by Executive Order (E.O.) 13959, as amended?

 

Answer: No.  E.O. 13959, as amended, does not require U.S. financial institutions to block transactions.  However, transactions that would be prohibited under E.O. 13959, as amended (including an attempted sale of covered securities by a U.S. person made to effect the divestment of CMIC securities after the 365-day divestment period), must be rejected and reported to OFAC within 10 business days.  Consistent with FAQ 863, U.S. financial institutions may continue to intermediate purchases or sales by or from non-U.S. persons to or for non-U.S. persons.

 

 

Question 1047: For the purposes of Executive Order (E.O.) 13959, as amended, can holders of Chinese Military-Industrial Complex Companies' (CMIC) securities receive stock splits, cash dividends, or dividend reinvestments related to the covered securities, and are U.S. financial institutions allowed to process transactions related to this activity?

 

Answer: U.S. persons who hold securities of CMICs identified pursuant to E.O. 13959, as amended, may continue to receive cash dividends and stock splits related to such covered securities, and U.S. financial institutions may continue to process such transactions.  However, purchases of CMIC securities effected through dividend reinvestments constitute purchases that are prohibited pursuant to E.O. 13959, as amended.  U.S. persons may, however, continue to facilitate the distribution of dividend reinvestments for non-U.S. persons after the relevant divestment period.

 

Question 1046: Are U.S. persons required to divest their current holdings of Chinese Military-Industrial Complex Companies' (CMIC) securities before the end of the relevant 365-day divestment period pursuant to section 1(c) of Executive Order (E.O.) 13959, as amended?

 

Answer: U.S. persons are not required to divest their holdings of CMIC securities during the relevant 365-day divestment period and may continue to hold such securities after the divestment period.  E.O. 13959, as amended, permits purchases or sales made solely to effect the divestment of CMIC securities, but only during the 365-day divestment period.  Accordingly, any such purchase or sale is prohibited after the 365-day divestment period, absent OFAC authorization.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-06-01 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220601

 

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June 2, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) has issued Russia-related General License 25B, General License 36, General License 37 and General License 38.

 

General License 25B: All transactions ordinarily incident and necessary to the receipt or transmission of telecommunications involving the Russian Federation that are prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized. The exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, wherever located, to the Russian Federation of services, software, hardware, or technology incident to the exchange of communications over the internet, such as instant messaging, videoconferencing, chat and email, social networking, sharing of photos, movies, and documents, web browsing, blogging, web hosting, and domain name registration services, that is prohibited by the RuHSR, is authorized.

 

https://home.treasury.gov/system/files/126/russia_gl25b.pdf

 

General License 36: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of transactions involving Public Joint Stock Company Severstal or any entity in which Public Joint Stock Company Severstal owns, directly or indirectly, a 50 percent or greater interest are authorized through 12:01 a.m. eastern daylight time, August 31, 2022, provided that any payment to Public Joint Stock Company Severstal or any other 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_gl36.pdf

 

General License 37: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of transactions involving Nord Gold PLC or any entity in which Nord Gold PLC owns, directly or indirectly, a 50 percent or greater interest are authorized through 12:01 a.m. eastern daylight time, July 1, 2022, provided that any payment to Nord Gold PLC or any other 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_gl37.pdf

 

General License 38: All transactions ordinarily incident and necessary to the processing of pension payments to U.S. persons that are prohibited by Executive Order (E.O.) 14024 are authorized, provided that the only involvement of blocked persons is the processing of funds by financial institutions blocked pursuant to E.O. 14024.

 

https://home.treasury.gov/system/files/126/russia_gl38.pdf

 

The OFAC is taking further action to degrade the key networks used by Russia’s elites, including President Vladimir Putin, to attempt to hide and move money and anonymously make use of luxury assets around the globe. OFAC targets a Kremlin-aligned yacht brokerage, several prominent Russian government officials, and a close Putin associate and money manager, Sergei Roldugin, who is a custodian of President Putin’s offshore wealth. In order to further tighten and enforce existing sanctions, this action further identifies yachts and aircraft in which sanctioned Russian elites maintain interests.

 

The OFAC also designated six individuals pursuant to Executive Order (E.O.) 14059 because of their support for, or actions on behalf of, the Cartel de Jalisco Nueva Generacion (CJNG), a violent Mexico-based organization that traffics a significant proportion of the fentanyl and other deadly drugs that enter the United States. OFAC’s action is the result of a collaboration between the U.S. Treasury Department, the Government of Mexico, and the U.S. Drug Enforcement Administration (DEA). U.S. Customs and Border Protection also provided support to this case.

 

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

 

  • Faizullin, Irek Envarovich of Russia;
  • Flores Mendoza, Severo of Mexico;
  • Gasilov, Andrei Valeryevich of Russia;
  • Godoy Arellano, Esther of Mexico;
  • Gonzalez Anguiano of Mexico;
  • Gorkov, Sergey Nikolaevich of Russia;
  • Grigorenko, Dmitriy Yuryevich of Russia;
  • Kochman, Evgeniy Borisovich of Russia, Monaco and France;
  • Mirtova, Elena Yuryevna of Russia;
  • Montero Pinzon, Julio Cesar of Mexico;
  • Mordashov, Alexey Aleksandrovich of Russia;
  • Mordashov, Kirill Alekseyevich of Russia;
  • Mordashov, Nikita Alekseyevich of Russia;
  • Mordashova, Marina Aleksandrovna of Russia;
  • Nisanov, God Semenovich of Russia and Azerbaijan;
  • Novitsky, Evgeny Grigorievich of Russia;
  • Reshetnikov, Maxim Gennadyevich of Russia;
  • Rincon Godoy, Angelberto of Mexico;
  • Rincon Godoy, Julio Efrain of Mexico;
  • Roldugin, Sergei Pavlovich of Russia;
  • Savelyev, Vitaly Gennadyevich of Russia;
  • Slyusar, Yury Borisovich of Russia; and
  • Zakharova, Mariya Vladimirovna of Russia.

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

  • Imperial Yachts SARL of Russia;
  • Ironstone Marine Investments of Cyprus;
  • JSC Argument of Russia;
  • Limited Liability Company Algoritm of Russia;
  • Limited Liability Corporation Gelios of Russia;
  • Non-Profit Partnership Revival Of Maritime Traditions of Russia;
  • Nord Gold PLC of the United Kingdom, Russia, Burkina Faso, and Guinea;
  • O'Neill Assets Corporation of Cyprus;
  • OOO Bilding Menedzhment of Russia;
  • OOO Nord Marin Inzhiniring of Russia;
  • OOO Nord Marine of Russia;
  • OOO Yakht-Treid of Russia;
  • Public Joint Stock Company Severstal of Russia;
  • SCF Management Services Cyprus LTD of Cyprus;
  • Severgroup Limited Liability Company of Russia; and
  • SRL Skyline Aviation of San Marino.

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

  • Flying Fox (ZGHN) Yacht 9, 022GRT Cayman Islands flag; Vessel Registration Identification IMO 9829394;
  • Graceful (UBGV8) Yacht 2,685GRT Russia flag; Vessel Registration Identification IMO 1011551;
  • Madame Gu (ZGCW7) Yacht 2,991GRT Cayman Islands flag; Vessel Registration Identification IMO 1011331;
  • Nega (J8Y4483) Yacht Russia flag; Vessel Registration Identification RS 130280;
  • Olympia (ZCGR) Yacht 776GRT Cayman Islands flag; Vessel Registration Identification IMO 1006960;
  • Sea Rhapsody (V7VR9) Yacht 1,503GRT Marshall Islands flag; Vessel Registration Identification IMO 1010648; and
  • Shellest (UBAO8) Yacht Russia flag; Vessel Registration Identification RS 150443.

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

  • 3A-MGU; Aircraft Model AS365 Dauphin; Aircraft Manufacturer's Serial Number (MSN) 6959; Aircraft Tail Number 3A-MGU;
  • P4-MGU; Aircraft Manufacture Date 18 Feb 2013; Aircraft Model A319; Aircraft Manufacturer's Serial Number (MSN) 5445; Aircraft Tail Number P4-MGU; and
  • T7-OKY; Aircraft Manufacture Date 2014; Aircraft Model BD700-1A10 Global 6000; Aircraft Manufacturer's Serial Number (MSN) 9576; Registration Number T7-OKY.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220602 and https://home.treasury.gov/news/press-releases/jy0802 and https://home.treasury.gov/news/press-releases/jy0803

 

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June 6, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) updated its Specially Designated Nationals (SDN) list.

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

 

  • Cavara, Marinko of Bosnia and Herzegovina; and
  • Seranic, Alen of Bosnia and Herzegovina.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220606

 

*******

 

June 6, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) has published new Frequently Asked Questions and amended Frequently Asked Questions.

Question 1055: Do the new investment prohibitions of Executive Order (E.O.) 14066, E.O. 14068, or E.O. 14071 (collectively, “the respective E.O.s”) prohibit U.S. persons from lending funds to, or purchasing an equity interest in, entities located outside of the Russian Federation?  

Answer: No, provided that (i) such funds are not specifically intended for new projects or operations in the Russian Federation and (ii) the revenues of the entity located outside the Russian Federation are not predominantly derived from its investments in the Russian Federation.  For the purposes of assessing the foregoing, U.S. persons, including U.S. financial institutions, may reasonably rely upon the information available to them in the ordinary course of business.

Question 1054: Do the new investment prohibitions of Executive Order (E.O.) 14066, E.O. 14068, or E.O. 14071 (collectively, “the respective E.O.s”) prohibit U.S. persons from purchasing debt or equity securities issued by an entity in the Russian Federation?

Answer: Yes, the respective E.O.s prohibit U.S. persons from purchasing both new and existing debt and equity securities issued by an entity in the Russian Federation.  However, the new investment prohibitions of the respective E.O.s do not prohibit U.S. persons from selling or divesting, or facilitating the sale or divestment of, debt or equity securities issued by an entity in the Russian Federation to a non-U.S. person (see FAQs 1049 and 1053).  Please note that U.S. persons are not required to divest such securities and may continue to hold such previously acquired securities.  Moreover, the conversion of depositary receipts to underlying local shares of non-sanctioned Russian issuers would not be considered a prohibited “new investment” in the Russian Federation under the respective E.O.s.

Additionally, the purchase of shares in a U.S. fund that contains debt or equity securities issued by entities in the Russian Federation generally would not be considered a prohibited “new investment,” under the respective E.O.s, so long as these holdings represent less than a predominant share by value of debt or equity securities issued by entities in the Russian Federation.  As a result, U.S. persons may continue to invest in the fund, and the fund may continue to operate.  Generally, the fund may also divest itself of these prohibited holdings.

Please note that transactions must not involve blocked persons or other prohibited transactions unless exempt or otherwise authorized by OFAC.

Question 1053: Under the new investment prohibitions of Russia-related Executive Order (E.O.) 14066, E.O. 14068, or E.O. 14071 (collectively, “the respective E.O.s”), are transactions related to divestment permissible?

Answer: Yes.  Transactions related to the divestment or the facilitation of divestment of a pre-existing investment, including a pre-existing investment in an entity, project, or operation in the Russian Federation, are not prohibited by the new investment prohibitions of the respective E.O.s.  Such transactions may not involve a blocked person or otherwise prohibited transactions unless exempt or authorized by the Office of Foreign Assets Control (OFAC).

The respective E.O.s prohibit any approval, financing, facilitation, or guarantee by a United States person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited if performed by a United States person or within the United States.  Such provisions do not prohibit U.S. persons from facilitating the wind-down or divestment of existing investment in the Russian Federation provided that such facilitation is on behalf of the selling party only.  For example, a U.S. financial institution is not prohibited from advising a client that seeks to sell an equity interest in an entity located in the Russian Federation (i.e., the seller in a divestment transaction).  However, a U.S. person is prohibited from providing any approval, financing, facilitation, or guarantee to a non-U.S. person that seeks to acquire an equity interest in an entity located in the Russian Federation (i.e., the buyer in such a transaction).

Such provisions also do not prohibit U.S. persons from advising on the requirements of U.S. sanctions laws consistent with OFAC’s Guidance on the Provision of Certain Services Relating to the Requirements of U.S. Sanctions Laws.

Question 1052: Can U.S. persons continue to fund their subsidiaries and affiliates with projects or operations located in the Russian Federation prior to the effective dates of the new investment prohibitions of Executive Order (E.O.) 14066, E.O. 14068, or E.O. 14071 (collectively, “the respective E.O.s”)?

 

Answer: Yes, provided that the use of the funds by the subsidiary or affiliate is consistent with the maintenance, as described in FAQ 1050.  “Maintenance” does not include the expansion of pre-existing projects or operations beyond those in effect prior to the effective dates of the respective E.O. prohibitions.  Therefore, U.S. persons may not fund new or expanded projects or operations undertaken by their subsidiaries and affiliates located in the Russian Federation after the effective dates of the respective E.O. prohibitions.

 

Question 1051: Is the export to the Russian Federation or import from the Russian Federation of goods, services, or technology considered “new investment” for the purposes of Russia-related Executive Order (E.O.) 14066, E.O. 14068, or E.O. 14071 (collectively, “the respective E.O.s”)?

Answer: The prohibitions on “new investment” pursuant to the respective E.O.s do not prohibit the export or import of goods, services, or technology, or related sales or purchases, to or from the Russian Federation, provided that such transaction is made pursuant to ordinary commercial sales terms (e.g., a payment of an invoice for goods made within the contracted time period, where such payment does not involve ongoing participation in royalties or ongoing profits) (see FAQ 1049).  Such transactions can be supported through traditional trade finance products, including commercial letters of credit and documentary collections.  U.S. persons are not prohibited pursuant to the respective E.O.s from entering into new contracts or agreements for such transactions.

However, please note that U.S. persons are prohibited or restricted from exporting, reexporting, or importing certain goods and services involving the Russian Federation, as described by law (see, for example, section 1(a)(i) of E.O. 14068; see also FAQ 415).

Question 1050: What types of transactions are considered to be “maintenance” activities described in FAQ 1049 and therefore outside the scope of the “new investment” prohibitions of Russia-related Executive Order (E.O.) 14066, E.O. 14068, or E.O. 14071 (collectively, “the respective E.O.s”)?

Answer: For the purposes of the respective E.O. prohibitions, “new investment” generally excludes the maintenance of investments in the Russian Federation that were made prior to the effective dates of the respective E.O. prohibitions (“pre-existing projects or operations”).  “Maintenance” of investments includes:

  • Transactions to ensure continuity of pre-existing projects or operations located in the Russian Federation, including payments to employees, suppliers, landlords, lenders, and partners;
  • The preservation and upkeep of the pre-existing tangible property in the Russian Federation; and
  • Activities associated with maintaining pre-existing capital investments or equity investments.

As a general matter, “maintenance” includes all transactions ordinarily incident to performing under an agreement in effect prior to the effective date of the respective E.O. prohibitions (“pre-existing agreement”), provided that such transactions are consistent with previously established practices and support pre-existing projects or operations.  However, “maintenance” does not include the expansion of pre-existing projects or operations beyond those in effect prior to the effective dates of the respective E.O. prohibitions, even if pursuant to a pre-existing agreement, where such expansion occurs on or after the effective dates of the respective E.O. prohibitions.  Nor does “maintenance” include commitments pursuant to the exercise of rights under a pre-existing agreement where such commitment is made on or after the effective dates of the respective E.O. prohibitions.

In connection with maintenance activity, U.S. persons also may modify or alter pre-existing agreements, or enter into new contracts or agreements, provided that any transaction under such contracts or agreements are consistent with previously established practices and support pre-existing projects or operations.  For example, a pre-existing agreement may be modified, or new contract established, to substitute suppliers, conduct maintenance or repairs, or comply with new environmental or safety standards.  In assessing whether activity is consistent with past practice, the Office of Foreign Assets Control (OFAC) will consider all relevant facts and circumstances, including the transaction history between contract parties prior to the effective date of the respective E.O.s.

Note that maintenance activities must not involve blocked persons or other prohibited transactions unless exempt or otherwise authorized by OFAC.

Question 1049: For the purposes of Russia-related Executive Order (E.O.) 14066, E.O. 14068, or E.O. 14071 (collectively, “the respective E.O.s”), what is meant by the term “new investment”?

Answer: For the purposes of the respective E.O.s, the Office of Foreign Assets Control (OFAC) views “investment” as the commitment of capital or other assets for the purpose of generating returns or appreciation.  OFAC interprets “new” investment as such a commitment made on or after the effective date of the respective E.O. prohibitions.  As a general matter, new investment includes such commitments that are pursuant to an agreement entered on or after the effective dates of the respective E.O. prohibitions.  New investment also includes such commitments pursuant to the exercise of rights under an agreement entered into before the effective dates of the respective E.O. prohibitions, where such commitment is made on or after the effective dates of the respective E.O. prohibitions.  We note, however, that new investment does not include the maintenance of an investment made prior to the applicable effective dates of the respective E.O. prohibitions (see FAQ 1050).

Unless exempt or otherwise authorized by OFAC, transactions that OFAC considers to be “new investment” for the purposes of the respective E.O. prohibitions include:

  • The purchase or acquisition of real estate in the Russian Federation, other than for noncommercial, personal use;
  • Entry into an agreement requiring the commitment of capital or other assets for the establishment or expansion of projects or operations in the Russian Federation, including the formation of joint ventures or other corporate entities in the Russian Federation;
  • Entry into an agreement providing for the participation in royalties or ongoing profits in the Russian Federation;
  • The lending of funds to persons located in the Russian Federation for commercial purposes, including when such funds are intended to be used to fund a new or expanded project or operation in the Russian Federation;
  • The purchase of an equity interest in an entity located in the Russian Federation (see FAQs 1054 and 1055); and
  • The purchase or acquisition of rights to natural resources or exploitation thereof in the Russian Federation.

Examples of transactions that OFAC does not consider to be “new investment” for the purposes of the respective E.O. prohibitions include:

  • Entry into, the performance of, or financing of a contract, pursuant to ordinary commercial sales terms, to sell or purchase goods, services, or technology to or from an entity in the Russian Federation (e.g., a payment of an invoice for goods, where payment is made within the contracted time period and such payment does not involve participation in royalties or ongoing profits);
  • Maintenance of an investment in the Russian Federation, where the investment was made prior to the effective date of the respective E.O. prohibitions, including maintenance of pre-existing entities, projects, or operations, including associated tangible property, in the Russian Federation (see FAQ 1050); and
  • Wind down or divestment of a pre-existing investment, such as a pre-existing investment in an entity, project, or operation, including any associated tangible property, located in the Russian Federation (see FAQs 1053 and 1054).

Even if a transaction is not a prohibited form of “new investment” pursuant to the respective E.O.s, U.S. persons engaging in the transaction must comply with all other relevant sanctions prohibitions, including those pursuant to Ukraine-/Russia-Related Sanctions Regulations and Russian Harmful Foreign Activities Sanctions Regulations (see, e.g., FAQ 415).  For example, the respective E.O.s include provisions prohibiting any approval, financing, facilitation, or guarantee by a United States person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited if performed by a United States person or within the United States.  For more information, see FAQ 1053.

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-06-06

 

The following OFAC FAQs have been updated:

 

Questions 1019: For the purposes of Executive Order (E.O.) 14066, what is meant by the term “Russian Federation origin”?

Answer: For the purposes of E.O. 14066, the Office of Foreign Assets Control anticipates publishing regulations defining the term “Russian Federation origin” to include goods produced, manufactured, extracted, or processed in the Russian Federation, excluding any Russian Federation origin goods that has been incorporated or substantially transformed into a foreign-made product.

For information on prohibitions related to new investment pursuant to Russia-related E.O. 14066, E.O. 14068, and E.O. 14071, please see FAQs 1049-1055.

Question 1005: Does 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” (Russia-related Sovereign Transactions Directive) prohibit trading in the secondary markets for Russian sovereign debt?

Answer: No, the Russia-related Sovereign Transactions Directive does not prohibit trading in the secondary markets for debt or equity 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 (collectively, “Directive 4 entities”), provided that no Directive 4 entity is a counterparty to such a transaction. Please note, however, that Directive 1A under E.O. 14024, “Prohibitions Related to Certain Sovereign Debt of the Russian Federation” (Russia-related Sovereign Debt Directive), prohibits U.S. financial institutions from participation in the secondary market for ruble or non-ruble denominated bonds issued after March 1, 2022 by the Directive 4 entities. Moreover, the “new investment” prohibitions of E.O. 14066, E.O. 14068, and E.O. 14071 prohibit U.S. persons from purchasing debt and equity securities issued by an entity in the Russian Federation.  Please see FAQ 1054.

With respect to the receipt of interest, dividend, or maturity payments made in connection with debt or equity of the Directive 4 entities, please see General License 9A and FAQ 981.

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/updated/2022-06-06

 

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June 8, 2022: 87 Fed. Reg. 35088: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended the Cuban Assets Control Regulations, 31 C.F.R. Part 515 (CACR) to further implement portions of the President’s foreign policy toward Cuba. OFAC is also publishing a number of new and updated Frequently Asked Questions.

 

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is amending the Cuban Assets Control Regulations to implement elements of the policy announced by the Administration on May 16, 2022 to increase support for the Cuban people. This rule authorizes group people-to-people educational travel to Cuba and removes certain restrictions on authorized academic educational activities, authorizes travel to attend or organize professional meetings or conferences in Cuba, removes the $1,000 quarterly limit on family remittances, and authorizes donative remittances to Cuba. These amendments also add or update several cross-references.

 

https://home.treasury.gov/system/files/126/fr87_35088.pdf

 

OFAC issued the following new Frequently Asked Question:

 

Question 1056: What does the June 9, 2022 amendment to the Cuban Assets Control Regulations (CACR) do?

Answer: Effective June 9, 2022, in consultation with the Department of State, OFAC amended the CACR to implement elements of policy changes announced by the Administration on May 16, 2022 to increase support for the Cuban people.

Professional meetings and conferences in Cuba:  Effective June 9, 2022, OFAC amended 31 CFR § 515.564(a) to include a general license authorizing, subject to conditions, travel-related and other transactions incident to attending or organizing professional meetings or conferences in Cuba, such as professional meetings or conferences to support expanded internet access and remittance processing and to provide additional support and training to independent Cuban entrepreneurs.  OFAC also amended and added cross-references to § 515.564(a) in notes to §§ 515.534, 515.542, 515.547, 515.572, 515.577, and 515.591.

Group people-to-people and other academic educational activities:  Effective June 9, 2022, OFAC amended § 515.565(a) to remove certain restrictions on authorized academic educational activities. OFAC also amended § 515.565(b) to authorize group people-to-people educational travel conducted under the auspices of an organization that is subject to U.S. jurisdiction and that sponsors such exchanges to promote people-to-people contact, provided such travelers are accompanied by an employee, paid consultant, or agent of the sponsoring organization.  Travel-related transactions authorized pursuant to § 515.565(b) must be for the purpose of engaging, while in Cuba, in a full-time schedule of activities that are intended to enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities; and will result in meaningful interactions with individuals in Cuba.  This amendment does not authorize individual people-to-people travel.  Travel for tourist activities is not permitted.

Remittances:  Effective June 9, 2022, OFAC amended § 515.570(a) to remove the $1,000 quarterly limit on family remittances to Cuban nationals who are close relatives.  OFAC also added § 515.570(b) to authorize donative remittances to Cuban nationals who are not prohibited officials of the Government of Cuba, prohibited members of the Cuban Communist Party, or close relatives of a prohibited official of the Government of Cuba or prohibited member of the Cuban Communist Party.  Finally, OFAC added a general license in § 515.570(h) authorizing the unblocking and return of previously blocked remittances, provided they would be authorized under the revised § 515.570(a) or (b).

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-06-08

 

See the following link for Frequently Asked Questions that OFAC amended related to Cuba:

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/updated/2022-06-08

 

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June 9, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) has published new Russia Frequently Asked Questions.

 

Question 1068: For the purposes of the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services” (“the determination”), do accounting services include tax preparation and filing?

 

Answer: Yes.  U.S. persons, wherever located, are prohibited from exporting, reexporting, selling, or supplying, directly or indirectly, accounting services, which would include tax preparation and filing services, to any person located in the Russian Federation, unless otherwise exempt or authorized by OFAC.  Please see FAQ 1059 for more information.  Please note the determination excludes the provision by a U.S. person of any service to an entity located in the Russian Federation that is owned or controlled, directly or indirectly, by a United States person, and any service in connection with the wind down or divestiture of an entity located in the Russian Federation that is not owned or controlled, directly or indirectly, by a Russian person.

 

As noted in FAQ 1067, this determination does not prohibit the export, reexport, sale, or supply, directly or indirectly, of tax preparation-related software to the Russian Federation, as distinct from tax preparation and filing services.  Please see FAQ 1067 for more information.
Question 1067: Do the prohibitions imposed by the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services” (“the determination”), prohibit U.S. persons from providing software related to accounting, management consulting, or trust and corporate formation to persons located in the Russian Federation? 

 

Answer: The determination does not prohibit U.S. persons from exporting, reexporting, selling, or supplying, directly or indirectly, software to the Russian Federation, nor does the determination prohibit U.S. persons from providing services associated with the export of such software, such as software design and engineering, provided that such associated services do not fall within the categories of management consulting, accounting, or trust and corporate formation.
For example, the following scenario describes activities that would not be prohibited under the determination:

  • A U.S. software company signs a contract with a company located in the Russian Federation (“Russian company”) for the design, engineering, licensing, and delivery of software that the Russian company uses to perform its internal accounting.  As part of the contract, the U.S. company provides continuing updates and technical support services related to the software (setting up new users, troubleshooting errors, etc.).

 

The following scenarios illustrate activities that would be prohibited under the determination:

  • A U.S. management consulting company signs a contract with a Russian company to assist the Russian company in selecting a new enterprise application software.  This contract includes assessing the needs of the Russian company, providing a list of possible software choices to the company, and providing continuing advisory services on the implementation and use of the software to optimize the Russian company’s profits.

 

Question 1066: Do the prohibitions imposed by the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services,” prohibit the provision of educational services, such as online university courses, on the subjects of accounting, management consulting, or trust and corporate formation to persons located in the Russian Federation?

 

Answer: No, provided such services do not evade or avoid the prohibition on providing the underlying services to persons located in the Russian Federation.

Released on 06/09/2022

 

Question 1065: Do the prohibitions imposed by the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services,” prohibit U.S. persons from serving as voting trustees on behalf of, or for shares of, persons located in the Russian Federation? 

 

Answer: Yes, unless otherwise exempt or authorized by OFAC.

 

Question 1064: Are executive search and vetting services included in the prohibition on management consulting services imposed by the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services”?

 

Answer: Yes.  For the purposes of this determination, OFAC interprets management consulting services to include services related to strategic business advice; organizational and systems planning, evaluation, and selection; development or evaluation of marketing programs or implementation; mergers, acquisitions, and organizational structure; staff augmentation and human resources policies and practices; and brand management.  Please see FAQ 1034 for more information.

 

Question 1063: Do the prohibitions imposed by the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services” (“the determination”), apply only with respect to the formation of new trusts and companies or do the prohibitions also apply with respect to existing trusts and companies?

 

Answer: The prohibitions imposed by the determination do not distinguish between new and existing trusts and companies.  Under the determination, U.S. persons are prohibited from providing trust and corporate formation services to persons located in the Russian Federation, regardless of whether the services are performed as part of the formation of a new trust or company, or as part of the administration or maintenance of an existing trust or company.  Please see FAQ 1034 for more information.

 

In addition, please note that the determination excludes from the scope of the aforementioned services: (1) any service to an entity located in the Russian Federation that is owned or controlled, directly or indirectly, by a United States person; and (2) any service in connection with the wind down or divestiture of an entity located in the Russian Federation that is not owned or controlled, directly or indirectly, by a Russian person.

Released on 06/09/2022

 

Question 1062: Do the prohibitions imposed by the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services,” apply to services provided to a parent company located in the Russian Federation by a U.S. subsidiary?

 

Answer: Yes.  The prohibitions apply to services provided to a company located in the Russian Federation (the “Russian company”) by any U.S. person, including the Russian company’s U.S. subsidiary.

 

Question 1061: Does the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services” (“the determination”), prohibit U.S. persons from working as employees of entities located in the Russian Federation?

 

Answer: Not necessarily.  Under the determination, U.S. persons are prohibited from exporting, reexporting, selling, or supplying, directly or indirectly, management consulting, trust and corporate formation services, and accounting services to persons located in the Russian Federation.  Thus, U.S. persons are prohibited from providing these services to companies located in the Russian Federation (“Russian companies”) in their capacity as employees.  However, the determination does not prohibit U.S. persons from providing other services not covered by this determination as part of their employment by Russian companies.

In addition, please note that the determination excludes from the scope of the aforementioned services:  (1) any service to an entity located in the Russian Federation that is owned or controlled, directly or indirectly, by a United States person; and (2) any service in connection with the wind-down or divestiture of an entity located in the Russian Federation that is not owned or controlled, directly or indirectly, by a Russian person.
Question 1060: Does the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services” (“the determination”), prohibit U.S. persons from serving as directors of companies located in the Russian Federation?

 

Answer: Under the determination, U.S. persons are prohibited from exporting, reexporting, selling, or supplying, directly or indirectly, trust and corporate formation services to persons located in the Russian Federation.  This prohibition on trust and corporate formation services does not, in and of itself, prohibit U.S. persons from serving on the board of directors of a company located in the Russian Federation.

 

However, this determination would prohibit U.S. persons from providing nominee officer or director services in which a U.S. person is contracted to serve as a nominee officer, director, shareholder, or signatory of a legal person on behalf of a person located in the Russian Federation.

 

Question 1059: Does the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services” (“the determination”), prohibit U.S. persons from providing services to persons located outside of the Russian Federation that are owned or controlled by persons located in the Russian Federation?

 

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

 

In contrast, OFAC would not consider to be prohibited the provision of services to a non-Russian company that has a physical presence and operations outside of the Russian Federation, including such a company owned or controlled by persons located in the Russian Federation, provided that the services will not be further exported or reexported to persons located in the Russian Federation.

 

For example, the following scenarios describe services that would be prohibited under the determination:

  • A U.S. corporate service provider administers a trust established under the laws of a U.S. state, where the trust exists predominantly to hold, sell, or purchase assets on behalf of a settlor, trustor, or beneficiary who is an individual ordinarily resident in Russia.
  • A U.S. corporate service provider registers a limited liability company in a third country on behalf of an individual ordinarily resident in Russia for the purpose of holding real estate assets, and this company has no other physical presence or operations in the third country.

 

The following scenarios illustrate services to a non-Russian subsidiary of a Russian person that would not be prohibited under the determination:

  • A U.S. accounting firm provides tax advisory and preparation services to the U.S. subsidiary of a Russian company.  This U.S. subsidiary has an office and employees in the United States and conducts business in the United States, and the services will not be exported or reexported to the Russian parent company.
  • A U.S. management consulting firm provides strategic business advice to the subsidiary of a Russian company located in a third country.  This subsidiary has an office and employees in the third country and conducts business in this third country, and the services will not be reexported to the Russian parent company.

 

Question 1058: For the purposes of section 1(a)(ii) of Executive Order (E.O.) 14071, what is meant by the term “person located in the Russian Federation”?

 

Answer: For the purposes of section 1(a)(ii) of E.O. 14071, OFAC interprets “person located in the Russian Federation” to include persons in the Russian Federation, individuals ordinarily resident in the Russian Federation, and entities incorporated or organized under the laws of the Russian Federation or any jurisdiction within the Russian Federation.

Please note that section 1(a)(ii) of E.O. 14071 prohibits the direct or indirect exportation, reexportation, sale, or supply from the United States, or by a United States person, wherever located, of such services determined pursuant to E.O. 14071.  For the purposes of E.O. 14071, OFAC interprets the “indirect” provision of such services to include when the benefit of the services is ultimately received by a “person located in the Russian Federation.”  Please see FAQ 1059 for more information.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-06-09

 

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June 10, 2022: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Syria General License 21A, Venezuela General License 39A, and Iran General License N-1, "Authorizing Certain Activities to Respond to the Coronavirus Disease 2019 (COVID-19) Pandemic." In addition, OFAC is also publishing a number of updated Frequently Asked Questions.

 

Syria General License 21A: Authorizing certain COVID-19-related transactions prohibited by the Syrian Sanctions Regulations. The following transactions and activities that are prohibited by the Syrian Sanctions Regulations, 31 CFR part 542 (SySR), are authorized through 12:01 a.m. eastern daylight time, June 17, 2023:

(1) Exportation of services related to COVID-19. All transactions and activities related to the exportation, reexportation, sale, or supply, directly or indirectly, of services to Syria that are related to the prevention, diagnosis, or treatment of COVID-19 (including research or clinical studies relating to COVID-19); and (2) COVID-19-related transactions involving certain blocked persons. All transactions and activities involving the Government of Syria, Polymedics LLC, Letia Company, or any entity in which Polymedics LLC or Letia Company owns, whether individually or in the aggregate, directly or indirectly, a 50 percent or greater interest, that are related to the prevention, diagnosis, or treatment of COVID-19 (including research or clinical studies relating to COVID-19), provided that any exportation or reexportation of items to Syria must be licensed or otherwise authorized by the Department of Commerce.

 

https://home.treasury.gov/system/files/126/syria_gl21a.pdf

 

Venezuela General License 39A: Authorizing certain COVID-19-related transactions involving the Government of Venezuela. All transactions and activities involving the Government of Venezuela that are related to the prevention, diagnosis, or treatment of COVID-19 (including research or clinical studies relating to COVID-19), that are prohibited by Executive Order (E.O.) 13808 of August 27, 2017, as amended by E.O. 13857 of January 25, 2019, or E.O. 13884 of August 5, 2019, each as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized through 12:01 a.m. eastern daylight time, June 17, 2023.

 

Authorizing certain COVID-19-related transactions involving certain banks. All transactions and activities described above involving Banco Central de Venezuela (BCV), Banco de Venezuela, S.A. Banco Universal (Banco de Venezuela), Banco Bicentenario del Pueblo, de la Clase Obrera, Mujer y Comunas, Banco Universal C.A. (Banco Bicentenario del Pueblo), or any entity in which BCV, Banco de Venezuela, or Banco Bicentenario del Pueblo owns, whether individually or in the aggregate, directly or indirectly, a 50 percent or greater interest, that are prohibited by E.O. 13850 of November 1, 2018, as amended by E.O. 13857, each as incorporated into the VSR, are authorized through 12:01 a.m. eastern daylight time, June 17, 2023.

 

https://home.treasury.gov/system/files/126/venezuela_gl39a.pdf

 

Iran General License N-1: Authorizing certain COVID-19-related transactions prohibited by the Iranian Transactions and Sanctions Regulations. The following transactions and activities that are prohibited by the Iranian Transactions and Sanctions Regulations, 31 CFR part 560 (ITSR), are authorized through 12:01 a.m. eastern daylight time, June 17, 2023:

(1) Exportation of goods or technology. All transactions and activities related to the exportation, reexportation, sale, or supply, directly or indirectly, of goods or technology for use in connection with the prevention, diagnosis, or treatment of COVID-19 (including research or clinical studies related to COVID-19) to Iran or the Government of Iran, or to persons in third countries purchasing specifically for resale to Iran or the Government of Iran;

(2) Importation of or dealings in certain COVID-19-related goods. All transactions and activities related to the importation into the United States of, or dealings in or related to, goods that previously were exported or reexported to Iran or the Government of Iran pursuant to this general license and that are broken, defective, or non-operational, or are connected to product recalls, adverse events, or other safety concerns, or for routine maintenance or the permanent return of such items to the United States or a third country; and

(3) Exportation or importation of services. All transactions and activities related to the exportation, reexportation, sale, or supply, directly or indirectly, of services to Iran or the Government of Iran, or the importation into the United States of, or dealings in or related to, Iranian-origin services, in each case that are related to the prevention, diagnosis, or treatment of COVID-19 (including research or clinical studies relating to COVID-19). (b) Authorizing certain transactions involving the Central Bank of Iran (CBI) or the National Iranian Oil Company (NIOC). All transactions and activities described above involving CBI, NIOC, or any entity in which NIOC owns, directly or indirectly, a 50 percent or greater interest, that are prohibited by the ITSR, the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), or Executive Order (E.O.) 13224, as amended, are authorized through 12:01 a.m. eastern daylight time, June 17, 2023.

 

Authorizing certain financial transactions. The processing of funds transfers or trade finance transactions that are ordinarily incident and necessary to give effect to the transactions and activities authorized in paragraphs (a) and (b) of this general license that are prohibited by the ITSR, GTSR, or E.O. 13224, as amended, are authorized through 12:01 a.m. eastern daylight time, June 17, 2023.

Any exportation or reexportation of goods or technology pursuant to the above is subject to the following conditions:

(1) Any goods or technology exported or reexported must: (i) Be designated as EAR99 under the Export Administration Regulations, 15 CFR parts 730 through 774 (EAR); or (ii) In the case of goods or technology that are not subject to the EAR, not be listed on any multilateral export control regime; and

(2) All exports or reexports made pursuant to this general license must be concluded prior to the expiration date of this general license.

 

This general license does not authorize:

(1) The exportation or reexportation of goods or technology to CBI, NIOC, or any entity in which NIOC owns, directly or indirectly, a 50 percent or greater interest;

(2) The exportation or reexportation of any goods, technology, or services to military, intelligence, or law enforcement purchasers or importers;

(3) The exportation or reexportation of any goods, technology, or services used to facilitate the development or production of a chemical or biological weapon or weapon of mass destruction;

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

(5) Any transactions or activities otherwise prohibited by the ITSR, the GTSR, or E.O. 13224, as amended, or prohibited by any other part of 31 CFR chapter V, or involving any person blocked pursuant to the GTSR or E.O. 13224, as amended.

 

https://home.treasury.gov/system/files/126/iran_gln1.pdf

 

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June 14, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 8C, "Authorizing Transactions Related to Energy."  In addition, OFAC has published amended Frequently Asked Questions.

 

Russia-related General License 8C: 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 standard time, December 5, 2022:

(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.

 

https://home.treasury.gov/system/files/126/russia_gl8c.pdf

 

See the following link for OFAC’s amended Frequently Asked Questions:

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/updated/2022-06-14

 

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June 15, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating two key supporters of the ethnically motivated violent extremist group known as the Russian Imperial Movement (RIM) pursuant to Executive Order (E.O.) 13224, as amended. RIM was previously designated by the U.S. Department of State as a Specially Designated Global Terrorist (SDGT) organization on April 7, 2020 for having provided training for acts of terrorism. Concurrent with OFAC’s action, the U.S. Department of State also designated an individual for posing a significant risk of committing acts of terrorism.

 

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

 

  • Shevchuk, Stanislav of the Ukraine;
  • Thulin, Anton of Sweden; and
  • Zhuchkovsky, Alexander of Russia.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220615 and https://home.treasury.gov/news/press-releases/jy0817

 

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June 16, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a network of Iranian petrochemical producers, as well as front companies in the People’s Republic of China (PRC) and the United Arab Emirates (UAE) that support Triliance Petrochemical Co. Ltd. (Triliance) and Iran’s Petrochemical Commercial Company (PCC), entities instrumental in brokering the sale of Iranian petrochemicals abroad. This network helps effectuate international transactions and evade sanctions, supporting the sale of Iranian petrochemical products to customers in the PRC and the rest of East Asia.

 

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

 

  • Bhore, Mohammed Shaheed Ruknooddin of India; and
  • Gao, Jingfeng of China.

 

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

 

  • Fanavaran Petrochemical Company of Iran;
  • Future Gate Fuel And Petrochemical Trading L.L.C. of the United Arab Emirates;
  • GX Shipping FZE of the United Arab Emirates;
  • Keen Well International Limited of China;
  • Kharg Petrochemical Company Limited of Iran;
  • Marun Petrochemical Company of Iran;
  • Sky Zone Trading FZE of the United Arab Emirates;
  • Teamford Enterprises Limited of China; and
  • Youchem General Trading FZE of the United Arab Emirates.

 

See the following links for the names of entities removed from OFAC’s SDN list.

 

https://home.treasury.gov/news/press-releases/jy0819 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220616

 

 

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June 17, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Nicaragua-related General License 3. OFAC is also publishing one related Frequently Asked Question.

 

Nicaragua-related General License 3: All transactions ordinarily incident and necessary to the wind-down of transactions involving Eniminas, or any entity in which Eniminas owns, directly or indirectly, a 50 percent or greater interest that are prohibited by the Nicaragua Sanctions Regulations, 31 CFR part 582 (the NSR), are authorized through 12:01 a.m. eastern daylight time, July 18, 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 above in this general license, unless separately authorized.

 

https://home.treasury.gov/system/files/126/nicaragua_gl3.pdf

 

The following Frequently Asked Question regarding Nicaragua has been published:

 

Question 1069: What does Nicaragua General License (GL) 3 authorize?

 

Answer: Nicaragua GL 3authorizes 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 transactions involving Empresa Nicaraguense de Minas (Eniminas), or any entity in which Eniminas owns, directly or indirectly, a 50 percent or greater interest (collectively, “Blocked Eniminas Entities”), through 12:01 a.m. eastern daylight time, July 18, 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 Eniminas Entities and must block such entities’ property or interests in property 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 the 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.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1069

 

In addition, the following names have been added to OFAC's list of Specially Designated Nationals:

 

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

 

  • Lopez Delgado, Ruy, Carretera Masaya, of Nicaragua.

 

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

 

  • Empresa Nicaraguense De Minas of Nicaragua.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220617

 

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June 17, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) removed the following Venezuelan national and nephew of the first lady Cilia Flores and her husband Nicolás Maduro.

Malpica Flores, Carlos Erik, of Venezuela.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220617_33

 

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June 28, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Russia-Related General License 39, General License 40, General License 41, and General License 42. OFAC is also issuing Russia-Related General License 43. OFAC has published a Determination Pursuant to Section 1(a)(i) of Executive Order 14068 as well as one new Frequently Asked Question and one amended Frequently Asked Question.

 

Russia-Related General License 39: All transactions ordinarily incident and necessary to the wind-down of any transaction involving State Corporation Rostec, or any entity blocked not earlier than June 28, 2022, in which State Corporation Rostec 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 daylight time, August 11, 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).

 

https://home.treasury.gov/system/files/126/russia_gl39.pdf

 

General License 40: 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_gl40.pdf

 

General License 41: All transactions ordinarily incident and necessary to the manufacture, sale, and maintenance, including the provision and receipt of warranty and maintenance services, of agricultural equipment, components, and spare parts produced by Nefaz Publicly Traded Company (“Nefaz”) or Public Joint Stock Company Tutaev Motor Plant (“Tutaev Motor Plant”), or any entity in which Nefaz or Tutaev Motor Plant owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest, that are prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized through 12:01 a.m. eastern standard time, December 22, 2022, provided that any payment to a blocked person must be made into a blocked account in accordance with the RuHSR.

 

https://home.treasury.gov/system/files/126/russia_gl41.pdf

 

General License 42: All transactions involving the Federal Security Service (a.k.a. Federalnaya Sluzhba Bezopasnosti) (a.k.a. FSB) prohibited by Executive Order (E.O.) 14024 are authorized, provided that such transactions and activities are ordinarily incidents and necessary to:

(1) Requesting, receiving, utilizing, paying for, or dealing in licenses, permits, certifications, or notifications issued or registered by the Federal Security Service for the importation, distribution, or use of information technology products in the Russian Federation, provided that

(i) the exportation, reexportation, or provision of any goods or technology that are subject to the Export Administration Regulations, 15 CFR parts 730 through 774, is licensed or otherwise authorized by the Department of Commerce; and

(ii) the payment of any fees to the Federal Security Service for such licenses, permits, certifications, or notifications does not exceed $5,000 in any calendar year;

Note to paragraph (a)(1). Except for the limited purposes described in paragraph (a)(1), this paragraph does not authorize the exportation, reexportation, or provision of goods or technology to or on behalf of the Federal Security Service.

(2) Complying with law enforcement or administrative actions or investigations involving the Federal Security Service; and

(3) Complying with rules and regulations administered by the Federal Security Service.

 

https://home.treasury.gov/system/files/126/russia_gl42.pdf

 

Russia-Related General License 43: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to 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”) are authorized through 12:01 a.m. eastern daylight time, August 31, 2022, provided that any divestment or transfer, or facilitation of divestment or transfer, of covered debt or equity, must be to a non-U.S. person. 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 in paragraph (a) of this general license as a counterparty or (ii) are linked to covered debt or equity are authorized through 12:01 a.m. eastern daylight time, August 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).

 

https://home.treasury.gov/system/files/126/russia_gl43.pdf

 

Determination Pursuant to Section 1(a)(i) of Executive Order 14068:

 

Pursuant to sections 1(a)(i), 1(b), and 5 of Executive Order (E.O.) 14068 of March 11, 2022 (“Prohibiting Certain Imports, Exports, and New Investment With Respect to Continued Russian Federation Aggression”) and 31 CFR § 587.802, the Director of the Office of Foreign Assets Control, in consultation with the Department of State and the Department of Commerce, hereby determines that the prohibitions in section 1(a)(i) of E.O. 14068 shall apply to the gold of Russian Federation origin. As a result, the importation into the United States of gold of Russian Federation origin is prohibited, except to the extent provided by law, or unless licensed or otherwise authorized by the Office of Foreign Assets Control.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220628

OFAC added the following Frequently Asked Question:

Question 1070: What does the gold-related determination pursuant to Executive Order (E.O.)14068 prohibit?

 

Answer: The determination of June 28, 2022, issued pursuant to Section 1(a)(i) of E.O. 14068, “Prohibitions Related to Imports of Gold of Russian Federation Origin,” prohibits the importation into the United States of gold of Russian Federation origin.  Please note that per the determination, the importation into the United States of gold of Russian Federation origin that was located outside of the Russian Federation prior to June 28, 2022, is not prohibited.  For information regarding the term “Russian Federation origin,” please see FAQ 1019.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-06-28

 

OFAC also amended the following Frequently Asked Question:


Question 1029: How do the prohibitions of Executive Order (E.O.) 14024 and other Russia-related sanctions impact gold-related transactions or persons participating in the gold market?

 

Answer: Gold-related transactions involving the Russian Federation may be sanctionable under E.O. 14024 or other Russia-related sanctions authorities.  For example, E.O. 14024 authorizes sanctions against:

  • Persons determined to be responsible for or complicit in, or to have directly or indirectly engaged or attempted to engage in, deceptive or structured transactions or dealings to circumvent U.S. sanctions, including through the use of assets such as gold or other precious metals;
  • Persons determined to operate or to have operated in the financial services sector of the Russian Federation economy, which could include those engaging in gold-related transactions involving the Russian Federation; and
  • Persons that have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, persons blocked under E.O. 14024.  This could include transactions in gold or other precious metals that involve such blocked persons.

 

In addition, gold-related transactions involving Russia or the Russian Federation may be prohibited under E.O. 14024 or other Russia-related sanctions authorities.  For example:

  • The determination of June 28, 2022, issued pursuant to E.O. 14068, “Prohibitions Related to Imports of Gold of Russian Federation Origin,” prohibits the importation into the United States of certain gold of Russian Federation origin (see FAQ 1070).
  • U.S. persons, including gold dealers, distributors, wholesalers, buyers, individual traders, refineries, and financial institutions, are generally prohibited from engaging in or facilitating prohibited transactions, including gold-related transactions, in which blocked persons have an interest.
  • U.S. persons are prohibited from engaging in any transaction — including gold-related transactions — involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation, pursuant to 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 (Russia-related Sovereign Transactions Directive).  Please see FAQ 998.
  • U.S. financial institutions are also generally prohibited from processing transactions, including gold-related transactions, involving foreign financial institutions that are determined to be subject to the prohibitions of Directive 2 under Executive Order 14024, “Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions” (Russia-related CAPTA Directive).  Please see FAQ 967 and FAQ 969.
  • Non-U.S. persons are prohibited from causing or conspiring to cause U.S. persons to violate U.S. sanctions, as well as engaging in conduct that evades or avoids a violation of OFAC sanctions.

 

Sanctioned Russian persons are known to employ a wide variety of measures in their efforts to evade U.S. and international sanctions. As such, U.S. persons, wherever located, including persons that process or facilitate gold-related transactions, must be vigilant against attempts to circumvent OFAC regulations and must take risk-based steps to ensure they do not engage in prohibited transactions.

 

Violations of OFAC regulations may result in criminal or civil penalties. OFAC is closely monitoring any efforts to circumvent or violate Russia-related sanctions, including through the use of gold or other precious metals, and is committed to using its authorities to act against sanctions evaders and promote compliance.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/updated/2022-06-28

 

OFAC also designated 70 entities, many of which are critical to the Russian Federation’s defense industrial base, including State Corporation Rostec, the cornerstone of Russia’s defense, industrial, technology, and manufacturing sectors, as well as 29 Russian individuals. These actions, taken pursuant to Executive Orders (E.O.s) 14024 and 14065, strike at the heart of Russia’s ability to develop and deploy weapons and technology used for Vladimir Putin’s brutal war of aggression against Ukraine. Concurrent with these sanctions actions, OFAC prohibited the importation of Russian gold into the United States, and Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a joint alert with the U.S. Department of Commerce’s Bureau of Industry and Security, advising vigilance against Russian and Belarusian export control evasion. Financial institutions and the private sector continue to play a key role in disrupting Russia’s efforts to acquire critical goods and technology to support its war-making efforts.

 

The Director of OFAC, in consultation with the Department of State and the Department of Commerce, determined that the prohibitions of section 1(a)(i) of E.O. 14068 shall apply to the gold of Russian Federation origin, with immediate effect.  As a result, the importation into the United States of gold of Russian Federation origin is prohibited, except to the extent provided by law, or unless licensed or otherwise authorized by OFAC. This determination excludes gold of Russian Federation origin that was located outside of the Russian Federation prior to the implementation of this prohibition.

 

In addition, the following names have been added or updated to or removed from OFAC's list of Specially Designated Nationals or updated on the Sectoral Sanctions Identifications (SSI) list:

 

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

 

  • Afanasyev, Dmitriy Valeryevich of Russia;
  • Ananchenko, Aleksandr Evgenyevich of Ukraine;
  • Andrianov, Nikolay Valentinovich of Russia;
  • Anosov, Viktor Yuryevich of Russia and Ukraine;
  • Antonov, Vladimir Nikolaevich of Russia and Ukraine;
  • Artyakov, Dmitriy Vladimirovich of Russia;
  • Artyakov, Vladimir Vladimirovich of Russia;
  • Artyakova, Tatiana Vladimirovna of Russia;
  • Borisova, Natalya Vladimirovna of Russia;
  • Brovko, Vasily Yuryevich of Russia;
  • Chumakov, Aleksey Nikolaevich of Russia;
  • Daniltsev, Yuriy Viktorovich of Russia and Ukraine;
  • Danylchenko, Halyna Viktorivna of Ukraine;
  • Dzinikashvili, Dmitriy Vladimirovich of Russia;
  • Enaldiev, Tamerlan Borisovich of Russia;
  • Evtushenko, Oleg Nikolaevich of Russia;
  • Ezhikov, Vladimir Vladimirovich of Russia;
  • Govtvin, Yuriy Nikolaevich of the Ukraine;
  • Grigoryev, Andrey Ivanovich of Russia;
  • Kandelaki, Tina of Georgia and Russia;
  • Khavchenko, Dmitriy Vasilyevich of Russia and Ukraine
  • Khotsenko, Vitaliy Pavlovich of Russia and Ukraine;
  • Kiryanov, Victor Nikolayevich of Russia;
  • Kiryanova, Tatiana Borisovna of Russia;
  • Kogogin, Sergei Anatolyevich of Russia;
  • Kokorev, Alexander Aleksandrovich of Russia;
  • Kokoreva, Natalia Vasilyevna of Russia;
  • Koleda, Mariya Vasilyevna of Russia;
  • Kondrakhin, Leontiy Andreyevich of Russia;
  • Kondrakhina, Melaniya Andreyevna of Russia;
  • Koptev, Yury Nikolayevich of Russia;
  • Krinitsyn, Oleg Anatolyevich of Russia;
  • Kulygina, Olga Ivanovna of Russia;
  • Kuznetsova, Anastasiya Viktorovna of Russia;
  • Lashkaryova, Nadezhda Vitalyevna of Russia;
  • Lelikov, Dmitry Yuryevich of Russia;
  • Lenshin, Roman Yuryevich of Russia;
  • Litvin, Vladimir Zalmanovich of Russia;
  • Nazarov, Aleksander Yuryevich of Russia;
  • Osin, Pavel Mikhaylovich of Russia;
  • Pereverzeva, Tatiana Viktorovna of the Ukraine;
  • Pinchuk, Andrei Yuryevich of of Russia and Moldova;
  • Popov, Aleksandr Nikolaevich of Russia;
  • Pugachyov, Oleg Ivanovich of Russia;
  • Serdyukov, Anatoly Eduardovich of Russia;
  • Serdyukov, Sergey Anatolevich of Russia;
  • Serdyukova, Natalya Anatolevna of Russia;
  • Shevchenko, Yuriy Valeryevich of Russia;
  • Sierra, Elena Oduliovna of Russia;
  • Smirnova, Natalya Ivanova of Russia;
  • Sosonnyy, Aleksey Petrovich of Russia;
  • Todorova, Anna Yurievna of Russia and Ukraine;
  • Tsyb, Sergey Anatolyevich of Russia;
  • Vasileva, Evgeniya Nikolaevna of Russia;
  • Volobuev, Nikolai Anatolevich of Russia;
  • Vybornykh, Maksim Vladimirovich of Russia; and
  • Zaviyalov, Igor Nikolaevich of Russia.

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

 

  • 64th GUARDS DETACHED MOTOR RIFLE BRIGADE of Russia;
  • 76th Guards Airborne Assault Chernigov Red Banner Order Of Suvorov Division of Russia;
  • 234th Guards Airborne Assault Regiment of Russia;
  • Advanced Research Foundation of Russia;
  • Aktsionernoe Obshchestvo Elektron Optronik of Russia;
  • Aktsionernoe Obshchestvo Nauchno Issledovatelskii Institut Promyshlennogo Televideniya Rastr of Russia;
  • Aktsionernoe Obshchestvo Nauchno Issledovatelskii Institut Sredstv Vychislitelnoi Tekhniki of Russia;
  • Aktsionernoe Obshchestvo Nauchno Proizvodstvennoe Predpriyatie Svyaz of Russia;
  • Aktsionernoe Obshchestvo Ryazanskii Zavod Metallokeramicheskikh Priborov of Russia;
  • Aktsionernoe Obshchestvo Spetsialnoe Konstruktorskoe Byuro Vychislitelnoi Tekhniki of Russia;
  • Aktsionernoe Obshchestvo Spetsialnoe Proektno Konstruktorskoe Byuro Sredstv Upravleniya of Russia;
  • Aktsionernoe Obshchestvo Torgovo-Finansovaya Kompaniya Kamaz of Russia;
  • Ao Npp Tsiklon Test of Russia;
  • Aviaavtomatika Named After V. Tarasov JSC of Russia;
  • Begishevo Airport Joint Stock Company of Russia;
  • Bm Bank JSC of Russia;
  • Chelnyvodokanal OOO of Russia;
  • Closed Joint-Stock Company Scientific Production Enterprise Topaz of Russia;
  • Emc Sud Limited of Russia;
  • Energotsentr Irkut of Russia;
  • Federal Service For Military-Technical Cooperation of Russia;
  • Interregional Social Organization Union of Donbas Volunteers of Russia;
  • Irkut Corporation Joint Stock Company of Russia;
  • Irkut-Avtotrans of Russia;
  • Irkut-Remstroi of Russia;
  • Irkut-Stanko Service of Russia;
  • Joint Stock Company All-Russian Research Institute Signal of Russia;
  • Joint Stock Company Arzamassky Priborostroitelny Zavod Imeni Plandina of Russia;
  • Joint Stock Company Center Of Research And Technology Services Dinamika of Russia;
  • Joint Stock Company Central Research Institute Cyclone of Russia;
  • Joint Stock Company Concern Avtomatika of Russia;
  • Joint Stock Company Corporation Moscow Institute of Heat Technology Of Russia;
  • Joint Stock Company Flight Research Institute N.A. M.M. Gromov of Russia;
  • Joint Stock Company Ilyushin Finance Company of Russia;
  • Joint Stock Company Information Security Reform of Russia;
  • Joint Stock Company Krasnodarskiy Avtocentr Kamaz of Russia;
  • Joint Stock Company Machine-Building Engineering Office Fakel of Russia;
  • Joint Stock Company Meteor Plant of Russia;
  • Joint Stock Company North Western Regional Center Of Almaz Antey Concern Obukhovsky Plant of Russia;
  • Joint Stock Company Obninsk Research And Production Enterprise Technologiya of Russia;
  • Joint Stock Company Permskiy Zavod Mashinostroitel of Russia;
  • Joint Stock Company Plasma of Russia;
  • Joint Stock Company Production Association Strela of Russia;
  • Joint Stock Company Production Association Ural Optical And Mechanical Plant of Russia;
  • Joint Stock Company Radiopribor of Russia;
  • Joint Stock Company Radiozavod of Russia;
  • Joint Stock Company Ramensky Instrument Engineering Plant of Russia;
  • Joint Stock Company Research And Development Enterprise Almaz of Russia;
  • Joint Stock Company Research And Production Enterprise Radar Mms of Russia;
  • Joint Stock Company Research Institute Polyus Of M.F. Stelmakh of Russia;
  • Joint Stock Company Rt-Tekhpriemka of Russia;
  • Joint Stock Company Russian Research Institute Electronstandart of Russia;
  • Joint Stock Company Ryazan State Instrument Making Enterprise of Russia;
  • Joint Stock Company Scientific And Research Institute Of Electronic Engineering Materials of Russia;
  • Joint Stock Company Scientific Production Enterprise Kontakt of Russia;
  • Joint Stock Company Scientific Research Institute Giricond of Russia;
  • Joint Stock Company Scientific Research Institute Of Electrical Carbon Products of Russia;
  • Joint Stock Company Scientific Research Institute Platan With Plant of Russia;
  • Joint Stock Company Shipbuilding Corporation Ak Bars of Russia;
  • Joint Stock Company Shvabe of Russia;
  • Joint Stock Company Special Design Bureau Turbina of Russia;
  • Joint Stock Company Special Relay System Design And Engineering Bureau of Russia;
  • Joint Stock Company State Scientific Research Institute Kristall of Russia;
  • Joint Stock Company Tekhnodinamika of Russia;
  • Joint Stock Company Trading House Rosel of Russia;
  • Joint Stock Company United Engine Corporation of Russia;
  • Joint Stock Company Vyatskoye Mashinostroitelnoye Predpriyatiye Avitek of Russia;
  • JSC All Russian Research Institute Of Radio Engineering of Russia;
  • JSC Scientific And Production Association Of Electro Mechanic of Russia;
  • Kaluga Research Institute Of Radio Engineering JSC of Russia;
  • Kamaz Publicly Traded Company of Russia;
  • Kizlyar Electromechanical Plant JSC of Russia;
  • Krylov State Scientific Center Federal State Unitary Enterprise of Russia;
  • Leasing Company Kamaz Incorporated of Russia;
  • Limited Liability Company Alfa-Invest of Russia;
  • Limited Liability Company Kapo-Avtotrans of Russia;
  • Limited Liability Company Kapo-Zhilbiltservis of Russia;
  • Limited Liability Company Nauchno-Proizvodstvennoye Obyedineniye Radiovolna of Russia;
  • Limited Liability Company PFMK of Russia;
  • Limited Liability Company Private Security Organization RSB-Group of Russia;
  • Limited Liability Company RSB-Group of Russia;
  • Mariyskiy Machine-Building Plant Open Joint Stock Company of Russia;
  • Mikam Holdings Limited of Russia;
  • Moscow Institute Of Electromechanics And Automatics JSC of Russia;
  • Nefaz Publicly Traded Company of Russia;
  • Non-State Pension Fund First Industrial Alliance of Russia;
  • Open Joint Stock Company Ilyushin Aviation Complex of Russia;
  • Open Joint Stock Company Khabarovsk Radio Engineering Plant of Russia;
  • Open Joint Stock Company Moscow Machinery Building Plant Avangard of Russia;
  • Open Joint Stock Company Russian Electronics of Russia;
  • Open Joint Stock Company Start Scientific And Production Enterprise of Russia;
  • Private Company Promcomplektlogistic of Russia;
  • Public Joint Stock Company Research & Production Corporation Istok of Russia;
  • Public Joint Stock Company Taganrog Aviation Scientific-Technical Complex of Russia;
  • Public Joint Stock Company Tutaev Motor Plant of Russia;
  • Public Joint Stock Company United Aircraft Corporation of Russia;
  • Public Joint Stock Company Vympel Interstate Corporation of Russia;
  • Ramenskoye Design Company Joint Stock Company of Russia;
  • Rapart Servisez of Russia;
  • Rt-Business Development of Russia;
  • Rt-Capital Limited Liability Company of Russia;
  • Rt-Inform Limited Liability Company of Russia;
  • Rt-Project Technology Open Joint Stock Company of Russia;
  • Scientific And Research Institute Ferrit Domen of Russia;
  • Sportivno-Ozdorovitelnyi Tsentr Irkut-Zenit of Russia;
  • State Corporation Rostec of Russia;
  • State Flight Testing Center of Russia;
  • State Research Institute Of Aviation Systems State Research Center Of The Russian Federation of Russia;
  • The Limited Liability Company Networking Company Irkut of Russia;
  • Tipografiya Irkut of Russia;
  • Tupolev Public Joint Stock Company of Russia;
  • Zalog OOO of Russia.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220628 and https://home.treasury.gov/news/press-releases/jy0838

 

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June 30, 2022: The Department of the Treasury’s Office of Foreign Assets Control is amending the Global Terrorism Sanctions Regulations.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220630

 

See the following link for the scope of the amendment:

 

https://home.treasury.gov/system/files/126/20220630_gtsr.pdf

 

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Fines and Penalties

 

June 2, 2022: Janet Sturmer, age 66, of Manassas, Virginia was sentenced to 54 months in federal prison, followed by 3 years of supervised release, for conspiracy to commit mail, wire fraud, and aggravated identity theft.  As part of her guilty plea, Sturmer will be required to pay $4.4 million in restitution.

The sentence was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Christopher Dillard of the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service - Mid-Atlantic Field Office; and Acting Special Agent in Charge Selwyn Smith of Homeland Security Investigations (HSI) Baltimore. According to her plea agreement, from October 2015 to March 2017, Sturmer conspired with Peter Unakalu, Khalid Razaq, Brandon Ross, Saulina Eady, Saul Eady, and others to commit wire fraud by posing as navy contracted agents and convincing victim companies that conspiracy members were authorized to order specialized communications equipment without prior payment.

 

https://www.justice.gov/usao-md/pr/virginia-woman-sentenced-54-months-federal-prison-identity-theft-scheme-and-ordered-pay

 

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June 6, 2022: The United States of America has been authorized to seize a Boeing 787-8 aircraft and a Gulfstream G650ER aircraft owned and controlled by Russian oligarch Roman Abramovich, pursuant to a seizure warrant from the U.S. District Court for the Southern District of New York, which found that the airplanes are subject to seizure and forfeiture based on probable cause of violations of the Export Control Reform Act (ECRA) and the recent sanctions issued against Russia.

 

According to the seizure warrant and affidavit unsealed: In response to Russia’s invasion of Ukraine, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued various sanctions against Russia that impose export controls and license requirements to protect U.S. national security and foreign policy interests. These Russia sanctions include expanded prohibitions on the export, reexport, or in-country transfer of U.S.-manufactured aircraft and aircraft parts and components to or within Russia without a BIS license, and eliminate the availability of any license exception for aircraft owned or controlled, or under charter or lease, by Russia or a Russian national.

The Boeing and the Gulfstream each were reexported to Russia (i.e., flown from a foreign country to Russia) in violation of the ECRA and regulations issued thereunder, including the recent Russia sanctions. The Boeing was flown to Russia on March 4, 2022, without a BIS license, and is now in the United Arab Emirates. The Gulfstream was flown to Russia on March 12 and 15, 2022 without a BIS license, and remains in Russia. The Boeing and Gulfstream are owned and controlled by Roman Abramovich, a Russian national, through a series of shell companies in Cyprus, Jersey, and the British Virgin Islands.

 

https://www.justice.gov/opa/pr/united-states-obtains-warrant-seizure-two-airplanes-russian-oligarch-roman-abramovich-worth

 

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June 6, 2022: The Bureau of Industry and Security (BIS) Office of Export Enforcement (OEE) issued an Administrative Charging Letter against Russian oligarch Roman Abramovich, alleging violations of the Export Administration Regulations (EAR) involving flights of two U.S. origin aircraft to Russia without the required export licenses from BIS. These aircraft include a Boeing 787-8 Dreamliner (Tail Number P4- BDL, Manufacturer Serial Number 37306), valued at approximately $350 million, and a Gulfstream G650ER (Tail Number LX-RAY, Manufacturer Serial Number 6417), valued at approximately $60 million.

 

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3014-2022-06-06-bis-press-release-abramovich-charging-letter/file

 

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June 6, 2022: Rashad Sargeant, 27, of College Park, Georgia, has been sentenced for his role in trafficking firearms to Barbados. Together with his co-defendant, David Johnson, Sargeant shipped at least 30 firearms to Barbados after obliterating the serial numbers from the firearms and packing them inside false compartments in boxes. Rashad Sargeant has been sentenced to three years, ten months in prison to be followed by three years of supervised release after pleading guilty on September 2, 2021.

 

https://www.justice.gov/usao-ndga/pr/third-defendant-sentenced-trafficking-guns-barbados

 

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June 7, 2022: The Bureau of Industry and Security (BIS) Office of Export Enforcement (OEE) issued an Administrative Charging Letter against Kenneth Scott and Scott Communications, Inc. (collectively “Scott”), as well as Mission Communications, LLC (“Mission”) of St. Ignatius, Montana have violated the Export Administration Regulations (“the Regulations” or “the EAR”) regarding the sale of certain radios with the knowledge that they were destined for Iran without the required U.S. Government authorization.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1373-scott-charging-charging-letter-6-7-2022/file

 

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June 8, 2022: The Office of Export Enforcement at the U.S. Commerce Department’s Bureau of Industry and Security (BIS), issued a Temporary Denial Order (TDO) suspending the export privileges of three U.S.-based companies, Quicksilver Manufacturing Inc., Rapid Cut LLC, and U.S. Prototype Inc., for 180 days for the unauthorized export to China of technical drawings and blueprints used to 3-D print satellite, rocket, and defense-related prototypes. This type of information is subject to strict U.S. export controls due to its sensitivity and importance to U.S. national security. “Outsourcing 3-D printing of space and defense prototypes to China harms U.S. national security,” said Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod. “By sending their customers’ technical drawings and blueprints to China, these companies may have saved a few bucks—but they did so at the collective expense of protecting U.S. military technology.” TDOs are some of the most significant civil sanctions BIS can issue, cutting off not only the right to export items subject to the EAR from the U.S. but also to receive or participate in exports from the United States or reexports of items subject to the EAR. OEE’s order denies Quicksilver Manufacturing Inc., Rapid Cut LLC, and U.S. Prototype Inc., all of the export privileges described in part 764 of the Export Administration Regulations (EAR), which include (but are not limited to) applying for, obtaining, or using any license, license exception, or export control document, or engaging in or benefitting from such transactions, in order to prevent imminent violations of the EAR. The order was issued for a renewable 180-day period and cuts off not only the companies’ ability to export from the United States but also their ability to receive or participate in exports from the United States. As described in the TDO, Quicksilver Manufacturing Inc., Rapid Cut LLC, and U.S. Prototype Inc., collectively utilizing the same rental mailbox, received export-controlled drawings from their domestic customers to 3-D-print requested items. Without their customers’ advance consent or knowledge, these drawings were provided to manufacturers in China to 3-D-print the items without the required U.S. Government authorizations. The items were then imported into the United States to be provided to the ordering customers.

 

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3023-2022-06-08-bis-press-release-quicksilver-rapid-cut-and-us-prototype-tdo/file and https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1372-quicksilver-tdo-final-6-7-2022/file

 

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June 9, 2022: Joe Sery, former owner and chief executive officer of Tungsten Heavy Powder & Parts, pleaded guilty to conspiring to commit offenses against the United States, including the unlawful exportation of defense articles on the U.S. Munitions List from the United States to the People’s Republic of China, the Republic of India, and elsewhere, without first obtaining a valid license or approval for such export from the U.S. Department of State, in violation of federal export laws pursuant to the International Traffic in Arms Regulations (ITAR).

 

According to his plea agreement, Sery admitted that, while the CEO of Tungsten Heavy Parts and Powder, he was educated and trained on the requirements of U.S. export control laws, which prohibit the unlicensed export of items and data contained on the U.S. Munitions List. Sery entered into contracts with various defense contractors related to munitions and obtained ITAR-controlled technical data from them.  Thereafter, knowing it was unlawful, he provided this information to a foreign national, his brother, who took the technical data to the People’s Republic of China, the Republic of India, and elsewhere at Sery’s direction.  Sery also permitted his brother full access to THPP’s file system while overseas, knowing that it contained export-controlled technical data.

 

https://www.justice.gov/usao-sdca/pr/former-tungsten-heavy-powder-parts-ceo-pleads-guilty-conspiring-export-united-states

 

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June 16, 2022: Simon Saw-Teong Ang, 64, of Fayetteville, Arkansas, and former University of Arkansas professor was sentenced to 12 months and a day in prison followed by one year of supervised release on one count of making a false statement to the FBI about the existence of patents for his inventions in the People’s Republic of China (PRC).

 

According to court documents, there are 24 patents in the PRC, which bear Ang’s name or Chinese birth name. The University of Arkansas, where Ang worked as a professor, required individuals such as Ang to promptly furnish to the university “full and complete” disclosures of inventions, and university policy provided that it, not individual inventors, would own all inventions created by those subject to the policy. This policy was established “in furtherance of the commitment of the university to the widest possible distribution of the benefits of university research, the protection of inventions resulting from such research, and the development of Inventions for the public good.”

 

Despite this requirement, Ang did not disclose his Chinese patents to the university and, when interviewed by an FBI agent, lied about his involvement in the inventions. Specifically, when asked whether his name would be listed as “the inventor” of numerous patents in China, Ang denied being the inventor, despite knowing he was. In addition, Ang also received numerous talent awards from the PRC government, which he did not list on the university’s annual conflict of interest disclosure forms.

 

https://www.justice.gov/opa/pr/former-university-arkansas-professor-sentenced-year-and-day-lying-federal-agents-about

 

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June 23, 2022: A federal grand jury in the Northern District of Georgia returned an indictment charging military contractors with an alleged fraud scheme involving government contracts totaling over $7 million.

The three-count indictment charges Envistacom LLC, its President Alan Carson and a vice president Valerie Hayes, and the owner of another company, Philip Flores, each with one count of conspiracy to defraud the United States and two counts of major fraud.

 

According to the indictment, from at least September 2014 through at least November 2016, the defendants and others conspired by preparing and procuring purported “competitive quotes” from other companies, which were sham quotes that were intentionally higher than the proposal prices and/or price quotes from Envistacom and Flores’ company to ensure the sole-source awards. The conspirators also concealed that the defendants prepared the independent government cost estimates and other procurement documents for the award of these contracts and made false statements, representations, and material omissions to federal government contracting officials regarding these estimates being legitimate independent cost estimates and the sham quotes being “competitive.”

 

https://www.justice.gov/opa/pr/military-contractors-indicted-7-million-procurement-fraud-scheme

 

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June 23, 2022: Shapour Moinian, 67, of San Diego, a former U.S. Army helicopter pilot-turned-civilian-contractor pleaded guilty in federal court, admitting that he acted as an unregistered agent of China and accepted thousands of dollars from representatives of the Chinese government to provide aviation-related information from his defense-contractor employers. He also pleaded guilty to making related false statements during national security background checks.

 

Moinian served in the Army in the United States, Germany, and South Korea from approximately 1977 through 2000. After his service, Moinian worked for various cleared defense contractors in the United States – including in San Diego – as well as the Department of Defense. “Cleared” is a term that indicates a contractor is permitted to work on projects that involve classified information. According to his plea agreement, while Moinian was working for a cleared defense contractor, or CDC, on various aviation projects used by the U.S. military and U.S. intelligence agencies, he was contacted by an individual in China who claimed to be working for a technical recruiting company. This person offered Moinian the opportunity to consult for the aviation industry in China.

 

https://www.justice.gov/opa/pr/former-us-military-pilot-admits-acting-paid-agent-china-and-lying-national-security

 

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June 27, 2022: The Department of Justice announced that it signed settlement agreements requiring 16 private employers to pay a total of $832,944 in civil penalties to resolve claims that each company discriminated against non-U.S. citizens in hiring. According to the department, each company posted at least one job announcement excluding non-U.S. citizens on an online job recruitment platform operated by the Georgia Institute of Technology (Georgia Tech). One employer posted as many as 74 discriminatory advertisements on Georgia Tech’s platform, while several of the employers posted discriminatory advertisements on other college or university platforms as well. The department determined that the advertisements deterred qualified students from applying for jobs because of their citizenship status, and in many cases, the citizenship status restrictions also blocked students from applying or even meeting with company recruiters.

 

The Immigration and Nationality Act (INA) generally prohibits employers and recruiters from limiting jobs based on citizenship or immigration status unless required by a law, regulation, executive order or government contract. The INA protects U.S. citizens, U.S. nationals, refugees, asylees, and recent lawful permanent residents from citizenship status discrimination in hiring, firing and recruitment or referral for a fee. Regardless of whether colleges or universities run afoul of the INA in the way they operate their job recruitment platforms, employers themselves are liable if the advertisements they post on those platforms violate the INA.

 

The 16 Private Employers that settled with the Department of Justice are: KPMG LLP, Keyot LLC, Area-I, Inc., CapTech, Akuna Capital, American Express Company, Sealed Air Corporation, Clarkston-Potomac Group, Toast, Inc., Blackbaud, Clay Electric Cooperative, Inc., CONMED, Edward Jones Investments, KNAPP Inc., SimpleNexus, LLC, f/k/a L Brewer and Associates, LLC, d/b/a LBA Ware, and The Royster Group, Inc.

 

https://www.justice.gov/opa/pr/justice-department-secures-settlements-16-employers-posting-job-advertisements-college

 

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June 28, 2022: A dual citizen of the United States and Iran, Kambiz Attar Kashani, 44, pleaded guilty to conspiring to illegally export U.S. goods, technology and services to end users in Iran, including the Government of Iran, in violation of the International Emergency Economic Powers Act (IEEPA).

According to court documents, Kashani and his co-conspirators, using two United Arab Emirates companies, evaded U.S. export laws between February 2019 and June 2021 by procuring electronic goods, technology, and services from U.S. technology companies for end-users in Iran without obtaining the required licenses or other authorization from the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC). Kashani acted at the direction of an arm of the Central Bank of Iran (CBI). CBI has been designated by OFAC for having materially assisted, sponsored, or provided financial, material, or technological support to known terrorist organizations.

 

Kashani faces a maximum penalty of 20 years in prison, and he has agreed to pay a $50,000 fine, in addition to any forfeiture owed. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

 

https://www.justice.gov/opa/pr/us-citizen-pleads-guilty-conspiring-provide-electronic-equipment-and-technology-government

 

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MAY 2022 EXPORT CONTROL REGULATION UPDATES

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

 

The United States, European Union And G7 Increase Cost On Russia By Increased Sanctions For Ukraine Invasion

 

May 8, 2022: the United States, the European Union and G7 committed to ratchet up the costs on Russia for its invasion of Ukraine by collectively taking further measures, consistent with each partner’s respective legal authorities and processes. The White House issued the following information regarding the actions the United States is taking:

Targeting State-Controlled Media Within Russia That Bolster Putin’s War. The United States will sanction three of Russia’s most highly-viewed directly or indirectly state-controlled television stations in Russia – Joint Stock Company Channel One Russia, Television Station Russia-1, and Joint Stock Company NTV Broadcasting Company. All three stations have been among the largest recipients of foreign revenue, which feeds back to the Russian State’s revenue.

Banning Services that Help Finance Putin’s War and Aid Sanctions Evasion. The United States will prohibit U.S. persons from providing accounting, trust and corporate formation, and management consulting services to any person in the Russian Federation. These services are key to Russian companies and elites building wealth, thereby generating revenue for Putin’s war machine, and to trying to hide that wealth and evade sanctions. This action builds on previous prohibitions to restrict the export of goods related to aerospace, marine, electronics, technology, and defense and related materiel sectors of the Russian economy.

Cutting off Imports of Russian Oil and Reducing Dependence on Russian Energy. The United States has already banned the import of Russian oil, gas, and coal. The entire G7 committed to phasing out or banning the import of Russian oil. This will hit hard at the main artery of Putin’s economy and deny Putin  the revenue needed to fund this war. The G7 also committed to work together to ensure stable global energy supplies, while accelerating efforts to reduce dependence on fossil fuels.

Impose further export controls and sanctions to degrade Russia’s war efforts.  The United States will issue a new rule that imposes additional restrictions on Russia’s industrial sector, including a broad range of inputs and products including wood products, industrial engines, boilers, motors, fans, and ventilation equipment, bulldozers, and many other items with industrial and commercial applications. These new controls will further limit Russia’s access to items and revenue that could support its military capabilities. The United States also sanctioned Limited Liability Company Promtekhnologiya, which produces rifles and other weapons that have been used in military operations in Ukraine; seven shipping companies, which own or operate 69 vessels; and one marine towing company. The Nuclear Regulatory Commission will also suspend general licenses for exports of source material, special nuclear material, byproduct material, and deuterium to Russia.

Impose Sanctions on Russian Elites and their Family Members and Visa Restrictions on Russian and Belarusian Officials Undermining the Sovereignty, Territorial Integrity, or Political Independence of Ukraine. The United States imposed approximately 2,600 visa restrictions on Russian and Belarusian officials in response to their ongoing efforts to undermine the sovereignty, territorial integrity, or political independence of Ukraine. Additionally, the United States issued a new visa restriction policy that applies to Russian Federation military officials and Russia-backed or Russia-installed purported authorities who are believed to have been involved in human rights abuses, violations of international humanitarian law, or public corruption in Ukraine. The United States also sanctioned eight executives from Sberbank– the largest financial institution in Russia and uniquely important to the Russian economy, holding about a third of all bank assets in Russia; twenty-seven executives from Gazprombank – a prominent Russian bank facilitating business by Russia’s Gazprom, one of the largest natural gas exporters in the world; and Moscow Industrial Bank and its ten subsidiaries.

 

https://www.whitehouse.gov/briefing-room/statements-releases/2022/05/08/fact-sheet-united-states-and-g7-partners-impose-severe-costs-for-putins-war-against-ukraine/

 

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

 

DDTC Name And Address Changes Posted To Website

 

May 4 through 20, 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 from Wartsila ELAC Nautik GmbH to ELAC Sonar GmbH due to Warsila divestiture of ELAC Nautik;
  • RUAG International Holding AG subsidiaries will change names as follows due to corporate rebranding:
Old Name New Name
RUAG Schweiz AG (Space Business Line) Beyond Gravity Schweiz AG
RUAG Corporate Services AG Beyond Gravity Services AG
RUAG Slip Rings SA Beyond Gravity Slip Rings SA
RUAG Sweden AB Beyond Gravity Holding Sweden AB
RUAG Space AB Beyond Gravity Sweden AB
RUAG Space GmbH Beyond Gravity Austria GmbH
RUAG Space Finland OY AB Beyond Gravity Finland OY
RUAG Space Germany GmbH Beyond Gravity Germany GmbH
RUAG Schweiz AG (Aerostructures Business Line transferred to RUAG Aerostructures Schweiz AG) RUAG Aerostructures Schweiz AG (spin-off)
  • Change in Name from Hamex Hardmetallverktyg AB to Hamex Precision Tools AB due to corporate rebranding;
  • Eaton Corporation entities will change names as follows due to corporate rebranding:
Old Name New Name
Cobham Mission Systems Wimborne Limited (UK) Mission Systems Wimborne Limited
Cobham India Private Limited (India) Mission Systems India Private Limited
  • Change in Name from Ylipson GmbH to Ylipson by DERICHEBOURG GmbH due to acquisition by DERICHEBOURG GmbH;
  • The following Mitsubishi Electric Corporation subsidiaries changed their names and addresses as a result of a corporate reorganization:
New Name New Address
Mitsubishi Electric Software Corporation 2-4-1, Hamamatsu-cho, Minato-ku, Tokyo 105- 5129, Japan
Old Name Old Address
MELCO Power Systems Corporation 1-1-2 Wadasaki-cho, Hyogo-ku, Kobe, Hyogo 652-8555, Japan
Mitsubishi Electric Micro-Computer Application Software Co., Ltd. 2-5-1, Inadera, Amagasaki, Hyogo 661-0981, Japan
Mitsubishi Space Software Co., Ltd. 2-4-1, Hamamatsu-cho, Minato-ku, Tokyo 105- 5129, Japan
Nippon Advanced Technology Co., Ltd. 2-4-1, Hamamatsu-cho, Minato-ku, Tokyo 105- 5129, Japan
Mitsubishi Electric Control Software Corporation 1-1-2, Wadasaki-cho, Hyogo-ku, Kobe, Hyogo 652-8555, Japan
Mitsubishi Electric Mechatronics Software Corporation 5-1-14, Yadaminami, Higashi-ku, Nagoya, Aichi 461-8670, Japan
  • Change in Name from Mistequay Group, Ltd to Textron Aviation Inc., due to acquisition by Textron Aviation Inc.

 

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U.S. Department Of State Certifies Countries Not Cooperating With U.S. Antiterrorism Efforts

 

May 2022: 87 Fed. Reg. 31051: Pursuant to section 40A of the Arms Export Control Act (22 U.S.C. 2781), and E.O. 13637, as amended, the U.S. Department of State determined and certified to the Congress that the following countries are not cooperating fully with United States antiterrorism efforts: Iran, Democratic People's Republic of Korea (DPRK, or North Korea), Syria, Venezuela, and Cuba.

 

https://www.federalregister.gov/documents/2022/05/20/2022-10829/determination-and-certification-of-countries-not-cooperating-fully-with-antiterrorism-efforts

 

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U.S. Department Of State Revokes Designation Of Certain Organizations As Foreign Terrorist Organizations

 

May 20, 2022: Based upon a review of the Administrative Record assembled in this matter and in consultation with the Attorney General and the Secretary of the Treasury, Secretary of State Antony Blinken has concluded that the circumstances that were the basis for the designation of the following as a Foreign Terrorist Organization have changed in such a manner as to warrant revocation of the designation:

 

 

Secretary Blinken has also revoked the designation of the following as a Specially Designated Global Terrorist under Executive Order 13224 of September 23, 2001: 87 Fed. Reg. 31055:

  • Mohad Moalim;
  • Farah Mohamed Shirdon;
  • Musa Abu Dawud;
  • Aliaskhab Kebekov;
  • Ibrahim al-Rubaysh; and
  • Abu al-Wardah as-Syarqi (and Their Respective Aliases).

 

https://www.federalregister.gov/documents/2022/05/20/2022-10825/revocation-of-the-designations-of-mohad-moalim-farah-mohamed-shirdon-musa-abu-dawud-aliaskhab

 

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

 

The U.S. And Japan Agree To Lead International Efforts To Strengthen Export Controls On Semiconductors And Other Cutting-Edge Technologies

 

May 5, 2022: Japanese Minister of Economy, Trade and Industry Koichi Hagiuda and U.S. Commerce Secretary Gina Raimondo have agreed that the two countries will lead international efforts to strengthen export controls on semiconductors and other cutting-edge technologies. The agreement was reached at their meeting in Washington on May 4, 2022. Japan and the United States will work with other countries and regions that advocate free trade to prevent such advanced technologies from being used for military and other undesirable purposes. The two countries will take the lead in holding in-depth discussions on establishing a responsible export control framework among like-minded countries, Hagiuda told a press conference after the meeting. https://www.nippon.com/en/news/yjj2022050500487/

 

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BIS Outlines Key Changes To Its Administrative Enforcement Policies

 

May 16, 2022: The U.S. Department of Commerce, Bureau of Industry and Security’s (BIS) Assistant Secretary for Export Enforcement, Matthew S. Axelrod, outlined key changes to its administrative enforcement policies for export control violations under the Export Administration Regulations (EAR), as follows:

 

First, BIS’ administrative charging letters are currently not available to the public until after a case resolves. This means that the public is not aware of which companies BIS alleges have violated the EAR  until the matter is completed, often years later. Moreover, it means that companies that may be engaging in similar misconduct aren’t fully disincentivized to stop, given that they are not given real-time examples of what happens when you violate the EAR. Therefore, BIS is considering changing this policy to make charging letters public when filed, just like with the initiation of criminal charges or of administrative proceedings with the SEC.

 

Second, BIS is reconsidering its use of no admit/no deny settlements. In the past, when BIS has resolved administrative enforcement matters short of trial, BIS has allowed companies to pay a reduced penalty without admitting misconduct. While doing so makes it easier to reach such resolutions, no admit/no deny settlements also have two significant downsides. One there’s no statement of facts that the company admits to. 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. In addition, companies get a significant reduction in a penalty when they resolve with BIS short of trial. That makes sense, as BIS wants to incentivize companies to resolve matters. However, in other enforcement contexts, companies must admit their conduct in order to qualify for the reduced penalty. BIS is concerned that without admitted facts, BIS may not be sending a deterrent message as strong as we believe warranted when the export laws are violated, especially given the magnitude of the national security threats those laws are designed to help combat.

 

Third, BIS is looking at penalty amounts. Penalties must be high enough to both punish and deter those who would violate the law. If penalties are low, it is too easy for companies to do a cost-benefit analysis and conclude that they would rather risk paying a small fine on the back end if they get caught than invest in compliance systems or forego revenue from sales they should be turning down upfront.

 

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/2992-2022-05-16-remarks-as-axelrod-to-sia/file

 

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BIS Seeks Public Comment On Control Of Four Naturally Occurring, Dual-Use Biological Toxins

 

May 23, 2022: 87 Fed. Reg. 31195: The U.S. Department of Commerce, Bureau of Industry and Security (BIS) published an interim final rule requesting public comment on the proposed new unilateral export controls on four naturally occurring, dual-use biological toxins (specifically, the marine toxins brevetoxin, gonyautoxin, nodularin and palytoxin), the synthesis and collection of which BIS has identified for evaluation according to the criteria in Section 1758 of the Export Control Reform Act of 2018 (ECRA) pertaining to emerging and foundational technologies. These toxins have the potential (through either accidental or deliberate release) to cause casualties in humans or animals, degrade equipment, or damage crops or the environment.

 

https://www.govinfo.gov/content/pkg/FR-2022-05-23/pdf/2022-10907.pdf

 

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BIS Finalized Changes To License Exception ACE

 

May 26, 2022: 87 FR 31948: BIS is finalizing changes to License Exception ACE and corresponding changes in the definition section of the Export Administration Regulations (EAR) in response to public comments to an October 21, 2021 interim rule.  That rule established a new control on certain cybersecurity items for National Security (NS) and Anti-terrorism (AT) reasons, as well as added a new License Exception Authorized Cybersecurity Exports (ACE) that authorizes exports of these items to most destinations except in certain circumstances.  These items warrant controls because these tools could be used for surveillance, espionage, or other actions that disrupt, deny or degrade the network or devices on it.  This rule also corrects Export Control Classification Number (ECCN) 5D001 in the Commerce Control List.

 

https://www.bis.doc.gov/index.php/documents/federal-register-notices-1/3000-87-fr-31948-cyber-final-rule-0694-ah56-5-26-22/file

 

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U.S. Customs & Border Patrol

 

CBP Expands Foreign Trade Zone Identifier From 7 to 9 Characters

 

May 11, 2022: 85 Fed. Reg. 60479: The U.S. Customs and Border Protection (CBP) published a Federal Register Notice (85 FR 60479) that requires the expansion of the Foreign Trade Zone Identifier from 7 to 9-characters. As a result, the Automated Export System and the Automated Export System Trade Interface Requirements (AESTIR) have been updated to accommodate this change effective May 17, 2022. The AESDirect web application is updated to accept the new 9-character requirement

 

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U.S.-EU Trade and Technology Council

 

The U.S.-EU To Continue Coordinating Actions To Mitigate The Negative Impacts Of Russia’s Aggression Against Ukraine On The Global And Ukraine Economy

 

The co-chairs of the U.S.-EU Trade and Technology Council (“TTC”), United States Secretary of Commerce Gina Raimondo, United States Trade Representative Katherine Tai, European Commission Executive Vice President Margrethe Vestager, and European Commission Executive Vice President Valdis Dombrovskis, joined by European Commissioner Thierry Breton, held the second meeting of the Trade and Technology Council in Paris-Saclay on 16 May 2022, hosted by the French Presidency of the Council of the European Union, and issued the following Joint Statement on behalf of the United States of America and the European Union:

 

The U.S.-EU partnership is a cornerstone of our shared strength, prosperity, and commitment to freedom, democracy, and respect for human rights. In the past year, we have strengthened, deepened, and elevated our relationship. As recent events have proven, strong transatlantic bonds and cooperation on issues related to trade, technology, and security are more important than ever.

 

The U.S.-EU strongly condemn Russia’s military aggression against Ukraine, as a premeditated and unprovoked further invasion of a sovereign state in violation of international law, which threatens the multilateral rules-based order. The U.S.-EU support the Ukrainian people and their right to choose their own future.

 

The U.S.-EU remain committed to upholding Ukraine’s sovereignty, independence, and territorial integrity. We have cooperated closely to impose significant consequences on Russia for its continued aggression against Ukraine. The foundation that we cemented through the TTC was indispensable for fostering the unprecedented level of cooperation on export controls and sanctions in response to Russia’s further invasion of Ukraine, both between the U.S.-EU and with other allies and partners.

 

The U.S.-EU plan to continue coordinating our actions to mitigate the negative impacts of Russia’s aggression against Ukraine on the global economy, and on Ukraine’s economy in particular. U.S.-EU remain resolute in our efforts to work jointly with Ukraine to rebuild its economy and revive its entrepreneurial vigor, facilitate trade and investment, and address global challenges resulting from Russia’s actions. This includes addressing supply chain ruptures created by Russia’s aggression, with regard to industrial and food commodities. The TTC intends to develop common approaches and explore shared solutions toward improving supply chain resiliency, fostering predictability and trade diversification. 5. U.S.-EU confirm to continue to oppose actors who threaten the multilateral rules-based order and fundamental principles of international law. To protect U.S.-EU citizens, the U.S.-EU will draw upon bilateral trade and investment relations, our joint technology leadership, the transatlantic security partnership, and our shared democratic values. U.S.-EU cooperation and coordination in the TTC is essential to this effort, and we are committed to maintaining the TTC as a central pillar of the U.S.-EU transatlantic partnership.

 

https://www.commerce.gov/sites/default/files/2022-05/US-EU-Joint-Statement-Trade-Technology-Council.pdf

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:

 

May 4, 2022: 87 Fed. Reg. 26385: The Secretary of State has determined that KVT-RUS, has knowingly, on or after July 15, 2020, made an investment, or sold, leased, or provided to the Russian Federation, for the construction of Russian energy export pipelines, goods, services, technology, information, or support, any of which has a fair market value of $1,000,000 or more, or that during a 12 month period, have an aggregate fair market value of $5,000,000 or more. The Secretary of State has additionally determined that KVT-RUS, has knowingly, on or after January 1, 2021, sold, leased, or provided, or facilitated selling, leasing, or providing, a vessel that engaged in pipe-laying or pipe-laying activities at depths of 100 feet or more below sea level for the construction of the Nord Stream 2 pipeline project.

Pursuant to sections 232(a)(1) and 235 of Countering America's Adversaries Through Sanctions Act (CAATSA) and E.O. 13849, the Secretary of State has selected the following sanctions to be imposed upon KVT-RUS:

  • Order the United States Government not to issue any specific license and not to grant any other specific permission or authority to export any goods or technology to KVT-RUS (section 235(a)(2));
  • Prohibit any transactions in foreign exchange that are subject to the jurisdiction of the United States and in which KVT-RUS has any interest (section 235(a)(7));
  • Prohibit any transfers of credit or payments between financial institutions or by, through, or to any financial institution, to the extent that such transfers or payments are subject to the jurisdiction of the United States and involve any interest of KVT-RUS (section 235(a)(8));
  • Prohibit any person from acquiring, holding, withholding, using, transferring, withdrawing, transporting, importing, or exporting any property that is subject to the jurisdiction of the United States and with respect to which KVT-RUS has any interest (section 235(a)(9)(A); dealing in or exercising any right, power, or privilege with respect to such property (section 235(a)(9)(B)); or conducting any transaction involving such property (section 235(a)(9)(C));
  • Prohibit any United States person from investing in or purchasing significant amounts of equity or debt instruments of KVT-RUS (section 235(a)(10);
  • Block all property and interests in property of KVT-RUS that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person and provide that such property and interests in property may not be transferred, paid, exported, withdrawn, or otherwise dealt in (E.O. 13849 Section 1(a)(iv)).

 

Pursuant to Section 7503(c) of Protecting Europe's Energy Security Act (PEESA), as amended (“PEESA”) as amended, Sections 232(a)(1) and 235 of CAATSA, and E.O. 13849, KVT-RUS has been added to the Specially Designated Nationals and Blocked Persons List.

All property and interests in property of KVT-RUS subject to U.S. jurisdiction are blocked.

 

https://www.federalregister.gov/documents/2022/05/04/2022-09564/notice-of-department-of-state-sanctions-actions-pursuant-to-the-countering-americas-adversaries

 

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May 4, 2022: 87 Fed Reg 26386: The Secretary of State has determined, pursuant to Section 7503(a)(1)(B)(i) of PEESA, as amended, that Transadria Ltd has knowingly, on or after January 1, 2021, sold, leased, or provided, or facilitated selling, leasing, or providing, a vessel that engaged in pipe-laying or pipe-laying activities at depths of 100 feet or more below sea level for the construction of the Nord Stream 2 pipeline project.

 

Pursuant to E.O. 13049 and Section 7503(c) of PEESA, as amended, this entity has been added to the Specially Designated Nationals and Blocked Persons List. All property and interest in property of this entity subject to U.S. jurisdiction is blocked. The following vessel subject to U.S. jurisdiction is blocked:

 

  • Marlin (IMO 9396854) (Linked To: Transadria Ltd).

 

https://www.federalregister.gov/documents/2022/05/04/2022-09566/notice-of-department-of-state-sanctions-actions-pursuant-to-the-protecting-europes-energy-security

 

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May 4, 2022: 87 Fed Reg 26387: The Secretary of State has determined, pursuant to Section 7503(a)(1)(B)(i) of PEESA, as amended, that Joint Stock Company Nobility has knowingly, on or after January 1, 2021, sold, leased, or provided, or facilitated selling, leasing, or providing, a vessel that engaged in pipe-laying or pipe-laying activities at depths of 100 feet or more below sea level for the construction of the Nord Stream 2 pipeline project.

 

The Secretary of State has also determined, pursuant to Section 7503(a)(1)(B)(iii) of PEESA, as amended, that Konstanta, OOO has knowingly, on or after January 1, 2021, provided underwriting services or insurance or reinsurance to a vessel identified in section 7503(a)(1)(A).

 

Pursuant to E.O. 13049 and Section 7503(c) of PEESA, as amended, these entities have been added to the Specially Designated Nationals and Blocked Persons List. All property and interests in property of these entities subject to U.S. jurisdiction are blocked. The following vessels subject to U.S. jurisdiction are blocked:

 

  • Ostap Sheremeta (IMO 9624225) (Linked To: Joint Stock Company Nobility); and
  • Ivan Sidorenko (IMO 9624213) (Linked To: Joint Stock Company Nobility).

 

*******

 

May 25, 2022: The U.S. Department of State has taken the following sanctions actions against various Russian individuals and entities:

 

87 Fed. Reg. 31925:

 

  • Arkady Romanovich Rotenberg of Russia;
  • Dmitriy Sergeevich Peskov;
  • Sergei Chemezov;
  • Igor Ivanovich Shuvalov;
  • Boris Romanovich Rotenberg;
  • Yekaterina Sergeyevna Ignatova;
  • Stanislav Sergeyevich Chemezov;
  • Alexander Sergeevich Chemezov;
  • Sergey Sergeevich Chemezov;
  • Anastasia Mikhailovna Ignatova;
  • Igor Arkadyevich Rotenberg;
  • Liliya Arkadievna Rotenberg;
  • Pavel Arkadyevich Rotenberg;
  • Boris Borisovich Rotenberg;
  • Roman Borisovich Rotenberg;
  • Karina Yurevna Rotenberg;
  • Olga Viktorovna Shuvalova;
  • Evgeny Igorevich Shuvalov;
  • Maria Igorevna Shuvalova;
  • Otkrytye Aktivy OOO;
  • Sova Nedvizhimost OOO;
  • Avanfort OOO;
  • Firma Veardon OOO;
  • Zareche-4 OOO; and
  • Limited Liability Company Nemchinovo Investments, and Altitude X3 Ltd.

 

The following aircraft subject to U.S. jurisdiction is blocked:

  • LX-MOW (Linked To: Altitude X3 Ltd).

 

Pursuant to E.O. 14024 these entities and individuals have been added to the Specially Designated Nationals and Blocked Persons List. All property and interests in property of these entities subject to U.S. jurisdiction are blocked.

 

https://www.federalregister.gov/documents/2022/05/25/2022-11179/notice-of-department-of-state-sanctions-actions

 

87 Fed. Reg. 31927:

 

  • AO ABR Management;
  • Elena Aleksandrovna Georgieva;
  • Valentinovich Belous;
  • Andrey Yurievich Sapelin, Dmitri Nikolaevich Vavulin;
  • Yuri Valentinovich Kovalchuk;
  • Kirill Mikhailovich Kovalchuk;
  • Dmitri Alekseevich Lebedev;
  • Vladimir Nikolaevich Knyaginin;
  • Tatyana Aleksandrovna Kovalchuk;
  • Boris Yurievich Kovalchuk;
  • Stepan Kirillovich Kovalchuk; and
  • Kira Valentinovna Kovalchuk.

 

Pursuant to E.O. 14024 these entities and individuals have been added to the Specially Designated Nationals and Blocked Persons List. All property and interests in property of these entities subject to U.S. jurisdiction are blocked.

 

https://www.federalregister.gov/documents/2022/05/25/2022-11181/notice-of-department-of-state-sanctions-actions

 

87 Fed. Reg. 31923:

 

  • Kseniya Valentinovna Yudayeva;
  • Mikhail Yurevich Alekseev;
  • Anatoly Mikhailovich Karachinskiy;
  • Vladimir Vladimirovich Kolychev;
  • Alexey Yurevich Simanovskiy;
  • Andrey Fedorovich Golikov;
  • Elena Borisovna Titova;
  • Mikhail Mikhaylovich Zadornov;
  • Dmitriy Olegovich Levin;
  • Svetlana Petrovna Emelyanova;
  • Tatyana Gennadevna Nesterenko;
  • Irina Vladimirovna Kremleva;
  • Viktor Andreevich Nikolaev;
  • Sergey Georgievich Rusanov;
  • Nadia Narimanovna Cherkasova; and
  • Paul Andrew Goldfinch.

 

Pursuant to E.O. 14024 these entities and individuals have been added to the Specially Designated Nationals and Blocked Persons List. All property and interests in property of these entities subject to U.S. jurisdiction are blocked.

 

https://www.federalregister.gov/documents/2022/05/25/2022-11183/notice-of-department-of-state-sanctions-actions

 

87 Fed. Reg. 31926:

 

  • OOO Volga Group;
  • Gennady Nikolayevich Timchenko;
  • Ksenia Gennadevna Frank;
  • Dmitry Vladimirovich Gusev;
  • Mikhail Lvovich Kuchment;
  • Anatoly Alexandrovich Braverman;
  • Ilya Borisovich Brodskiy;
  • Aleksey Leonidovich Fisun;
  • Dmitry Vladimirovich Khotimskiy;
  • Sergey Vladimirovich Khotimskiy;
  • Mikhail Vasilyevich Klyukin;
  • Mikhail Olegovich Avtukhov;
  • Albert Alexandrovich Boris;
  • Dmitry Vladimirovich Baryshnikov;
  • Elena Alexandrovna Cherstvova;
  • Sergey Nikolaevich Bondarovich;
  • Oleg Alexandrovich Mashtalyar;
  • Alexey Valeryevich Panferov;
  • Irina Nikolayevna Kashina;
  • Joel Raymond Lautier;
  • Gleb Sergeevich Frank;
  • Elena Petrovna Timchenko;
  • Natalya Browning; and
  • OOO Transoil.

 

Pursuant to E.O. 14024 these entities and individuals have been added to the Specially Designated Nationals and Blocked Persons List. All property and interests in property of these entities subject to U.S. jurisdiction are blocked.

 

The following vessel subject to U.S. jurisdiction is blocked:

  • Lena (IMO: 9594339).

 

https://www.federalregister.gov/documents/2022/05/25/2022-11185/notice-of-department-of-state-sanctions-actions

 

87 Fed. Reg. 31929:

 

  • The Federal State Budgetary Institution Marine Rescue Service (MRS), Limited Liability Company.
  • Mortransservice (Mortransservice); and
  • Samara Heat and Energy Property Fund LLC Koksokhimtrans.

 

These entities were added to the Specially Designated Nationals and Blocked Persons List (SDN List). All property and interests in property of these entities subject to U.S. jurisdiction are blocked.

 

The following vessels subject to U.S. jurisdiction and were added to the NS-MBS list on May 21, 2021. On August 20, 2021, these vessels were added to the Specially Designated Nationals and Blocked Persons List:

 

  • Akademik Cherskiy (IMO 8770261);
  • Baltiyskiy Issledovatel (IMO 9572020);
  • Umka (IMO 9171620);
  • Artemis Offshore (IMO 9747194);
  • Finval (IMO 9272412);
  • Narval (IMO 9171876);
  • Sivuch (IMO 9157820);
  • Kapitan Beklemishev (IMO 8724080);
  • Spasatel Karev (IMO 9497531);
  • Bakhtemir (IMO 9797577);
  • Murman (IMO 9682423);
  • Vladislav Strizhov (IMO 9310018); and
  • Yury Topchev (IMO 9338230).

 

https://www.federalregister.gov/documents/2022/05/25/2022-11180/notice-of-department-of-state-sanctions-actions-pursuant-to-the-protecting-europes-energy-security

 

87 Fed. Reg. 31923:

 

The Secretary of State has terminated the waiver of sanctions under the Protecting Europe's Energy Security Act (PEESA), as amended and imposed sanctions on one entity and one individual pursuant to PEESA against the following entities:

 

NORD STREAM 2 AG of Switzerland; and

Matthias Warnig of Germany, Switzerland and Russia.

 

https://www.federalregister.gov/documents/2022/05/25/2022-11186/notice-of-department-of-state-sanctions-actions-pursuant-to-the-protecting-europes-energy-security

 

 

*******

 

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

 

May 9, 2022: 87 Fed. Reg. 28758: In response to the Russian Federation’s (Russia’s) ongoing aggression against Ukraine, the Department of Commerce is expanding the existing sanctions against Russian industry sectors by imposing a license requirement for exports, reexports, or transfers (in-country) to and within Russia for additional items subject to the Export Administration Regulations (EAR) identified under specific Schedule B numbers or Harmonized Tariff Schedule (HTS) codes. The Bureau of Industry and Security (BIS) is taking these actions to further restrict Russia’s ability to withstand the economic impact of the multilateral sanctions, further limit sources of revenue that could support Russia’s military capabilities, and to better align with the European Union’s controls. This final rule imposes a license requirement for EAR99 products for a variety of industries that fall under the listed  Schedule B or HTS codes and luxury goods, beer, wine, alcohol, tobacco, clothing and vehicles. Exporters be aware!

 

Expansion of Russian Industry Sector Sanctions: This final rule amends part 746 of the EAR (Embargoes and Other Special Controls) to further expand the scope of the Russian industry sector sanctions by adding additional HTS codes and Schedule B numbers to supplement no. 4 to part 746 of the EAR, thereby imposing a license requirement for all exports, reexports, and transfers (in-country) to or within Russia for such items. In this final rule, BIS is adding 205 HTS codes at the 6-digit level and 478 corresponding 10-digit Schedule B numbers to better align with the European Union’s controls.

 

In addition, this final rule adds one sentence at the end of the introductory text of supplement no. 5 to part 746— ‘Luxury Goods’ That Require a License For Export, Reexport, and Transfer (in-country) to or Within Russia or Belarus Pursuant to § 746.10(a)(1) and (2).

 

This final rule adds Schedule B number 8705200000 to the introductory text to indicate it is also listed in both supplements no. 2 and 4 and adds a sentence to indicate that Schedule B number 8412294000 is listed in both supplements no. 4 and 5 to this part.

 

The final rule also clarifies that in addition to Schedule B number 8479899850, Schedule B number 8705200000 is also listed in both supplements no. 2 and 4 and that exporters, reexporters, and transferors must comply with the license requirements under both § 746.5(a)(1)(i) and (ii), as applicable, for these Schedule B numbers.

 

Clarifications to Supplement No. 4 to Part 746 Controls: This final rule revises supplement no. 4 to part 746 by re-organizing the list of items subject to a license requirement under § 746.5(a)(1)(ii) in order to make it easier for exporters to determine whether a particular item is described in this supplement.

 

See the following link for the full rule and list of Schedule B numbers or Harmonized Tariff Schedule codes associated with the rule:

 

https://www.bis.doc.gov/index.php/documents/federal-register-notices-1/2991-87-fr-28758-expansion-of-russian-industry-sector-sanctions-2022-10099/file

 

Editors note: Before making any export of EAR99 items to Belarus or Russia, exporters are reminded of the significant due diligence required to ensure no license is required from BIS.

 

*******

 

May 13, 2022: The Department of Commerce, Bureau of Industry and Security (BIS) extended a temporary denial order denying export privileges for a period of a 180 days on the ground that issuance of the order was necessary in the public interest to prevent an imminent violation of the Regulations for  Mahan Airways, Blue Airways, of Yerevan, Armenia,  as well as the “Balli Group Respondents,” namely, Balli Group PLC, Balli Aviation, Balli Holdings, Vahid Alaghband, Hassan Alaghband, Blue Sky One Ltd., Blue Sky Two Ltd., Blue Sky Three Ltd., Blue Sky Four Ltd., Blue Sky Five Ltd., and Blue Sky Six Ltd., all of the United Kingdom.

 

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1369-e2721/file

 

*******

 

May 20, 2022: The U.S. Department of Commerce, Bureau of Industry and Security’s (BIS) Assistant Secretary for Export Enforcement, Matthew S. Axelrod, issued an order denying the export privileges of a fifth Russian airline – Rossiya Airlines – due to ongoing export violations related to comprehensive export controls on Russia imposed by the Commerce Department. This Temporary Denial Order (TDO) terminates the right of Rossiya to participate in transactions subject to the Export Administration Regulations (EAR), including exports and reexports from the United States. This TDO is issued for 180-days and may be renewed.

 

BIS also publicly identified additional aircraft in likely violation of U.S. export controls, including a 787 Dreamliner owned by Russian oligarch Roman Abramovich. This is the second plane owned by Abramovich identified by BIS, and this listing notifies the public that providing any form or service to this aircraft subject to the EAR requires U.S. Government authorization. BIS is further updating the tail numbers of planes already on the list that have flown into Russia and/or Belarus in apparent violation of the EAR.

 

For a full listing of the subject aircraft see the following link:

 

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/2994-2022-05-20-press-release-bis-rossiya-tdo-and-list-update-final/file

 

*******

 

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

 

May 2, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 30, "Authorizing Transactions Involving Gazprom Germania GmbH Prohibited by Directive 3 under Executive Order 14024."

 

General License 30: All transactions involving Gazprom Germania GmbH, or any entity in which Gazprom Germania GmbH owns, directly or indirectly, a 50 percent or greater interest, that are prohibited by Directive 3 under Executive Order 14024, Prohibitions Related to New Debt and Equity of Certain Russia-related Entities, are authorized through 12:01 a.m. eastern daylight time, September 30, 2022. 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/policy-issues/financial-sanctions/recent-actions/20220502 and https://home.treasury.gov/system/files/126/russia_gl30_0.pdf

 

*******

 

May 5, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 7A, General License 26A, General License 31, and General License 32.  In addition, OFAC has published one new Frequently Asked Question and amended one Frequently Asked Question.

 

General License 7A: All transactions ordinarily incident and necessary to the receipt of, and payment of charges for, services rendered in connection with overflights of the Russian Federation or emergency landings in the Russian Federation by aircraft registered in the United States or owned or controlled by, or chartered to, U.S. persons that are prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized. All transactions ordinarily incident and necessary to provide air ambulance and related medical services, including medical evacuation, to individuals in the Russian Federation that are prohibited by the RuHSR are authorized.

 

This general license does not authorize:

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

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

 

Effective May 5, 2022, General License No. 7, dated February 24, 2022, is replaced and superseded in its entirety by this General License No. 7A. https://home.treasury.gov/system/files/126/russia_gl7a.pdf

 

General License 26A: All transactions ordinarily incident and necessary to the wind-down of transactions involving Joint Stock Company SB Sberbank Kazakhstan, Sberbank Europe AG, or Sberbank (Switzerland) AG (collectively, “the blocked Sberbank subsidiaries”), or any entity in which the blocked Sberbank subsidiaries own, 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 daylight time, July 12, 2022.

 

This general license does not authorize:

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

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

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

 

Effective May 5, 2022, General License No. 26, dated April 12, 2022, is replaced and superseded in its entirety by this General License No. 26A. https://home.treasury.gov/system/files/126/russia_gl26a.pdf

 

General License 31: The following transactions in connection with a patent, trademark, copyright, or other forms of intellectual property protection in the United States or the Russian Federation that would be prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized:

(1) The filing and prosecution of any application to obtain a patent, trademark, copyright, or other forms of intellectual property protection;

(2) The receipt of a patent, trademark, copyright, or other forms of intellectual property protection;

(3) The renewal or maintenance of a patent, trademark, copyright, or other forms of intellectual property protection; and

(4) The filing and prosecution of any opposition or infringement proceeding with respect to a patent, trademark, copyright, or other forms of intellectual property protection, or the entrance of defense to any such proceeding.

 

This general license does not authorize:

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

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

(3) Any transactions prohibited by E.O. 14066 or E.O. 14068. https://home.treasury.gov/system/files/126/russia_gl31.pdf

 

General License 32: All transactions ordinarily incident and necessary to the wind-down of transactions involving Amsterdam Trade Bank NV, or any entity in which Amsterdam Trade Bank NV owns, directly or indirectly, a 50 percent or greater interest, that is prohibited by Executive Order (E.O.) 14024 are authorized through 12:01 a.m. eastern daylight time, July 12, 2022.

 

This general license does not authorize:

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

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

(3) Any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR other than the blocked persons described in this general license, unless separately authorized. https://home.treasury.gov/system/files/126/russia_gl32.pdf

 

New Frequently Asked Question:

 

Question: On April 20, 2022, Transkapitalbank (TKB) was designated pursuant to Russia-related Executive Order 14024.  Can U.S. persons continue to engage in Afghanistan-related transactions with TKB?

Answer:  Yes.  The Office of Foreign Assets Control (OFAC) issued two general licenses (GLs) related to TKB, which allow U.S. persons to engage in certain transactions involving TKB for specified time periods.

 

Russia-related GL 28 authorizes U.S. persons to engage in certain transactions involving TKB, or any entity in which TKB owns, directly or indirectly, a 50 percent or greater interest, that is ultimately destined for or originating from Afghanistan through 12:01 a.m. eastern daylight time, October 20, 2022.

GL 28 also authorizes U.S. financial institutions 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 ultimately destined for or originating from Afghanistan that are authorized by the GL. This means that U.S. financial institutions are authorized to debit or credit correspondent accounts maintained for TKB, provided these debits or credits are for payments that are ultimately destined for or originating from Afghanistan.

 

In addition, through 12:01 a.m. eastern daylight time, May 20, 2022, Russia-related GL 29 authorizes certain transactions ordinarily incident and necessary to the wind-down of transactions involving TKB, or any entity in which TKB owns, directly or indirectly, a 50 percent or greater interest, regardless of whether such transactions are related to Afghanistan.  GL 29 does not authorize debits to blocked accounts.  https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1032

 

Revised Frequently Asked Question:

 

Question:  Does Executive Order (E.O.) 14065 block the entire Donetsk and Luhansk oblasts?

 

Answer: No.  E.O. 14065 targets the so-called Donetsk People’s Republic and Luhansk People’s Republic regions of Ukraine or such other regions of Ukraine as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State (collectively, the “Covered Regions”).  In determining whether a location is within the regions subject to sanctions, U.S. persons may reasonably rely on vetted information from reliable third parties, such as postal codes and maps.

U.S. persons engaging in activity that does not involve the Covered Regions are not subject to the prohibitions in E.O. 14065. https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1009

 

*******

 

May 6, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned virtual currency mixer Blender.io (Blender), which is used by the Democratic People’s Republic of Korea (DPRK) to support its malicious cyber activities and money-laundering of stolen virtual currency. On March 23, 2022, Lazarus Group, a DPRK state-sponsored cyber hacking group, carried out the largest virtual currency heist to date, worth almost $620 million, from a blockchain project linked to the online game Axie Infinity; Blender was used in processing over $20.5 million of the illicit proceeds. Under the pressure of robust U.S. and UN sanctions, the DPRK has resorted to illicit activities, including cyber-enabled heists from cryptocurrency exchanges and financial institutions, to generate revenue for its unlawful weapons of mass destruction (WMD) and ballistic missile programs.

OFAC updated its List of Specially Designated Nationals and Blocked Persons (SDN List) to identify additional virtual currency addresses used by the Lazarus Group to launder illicit proceeds.  Treasury is committed to exposing components of the virtual currency ecosystem, like Blender, that are critical to the obfuscation of the trail of stolen proceeds from illicit cyber activity. OFAC sanctioned the Lazarus Group on September 13, 2019, pursuant to Executive Order (E.O.) 13722, and identified it as an agency, instrumentality, or controlled entity of the Government of the DPRK, based on its relationship to the U.S.- and UN-designated Reconnaissance General Bureau, the DPRK’s premiere intelligence organization, which is also involved in the conventional arms trade. https://home.treasury.gov/news/press-releases/jy0768

 

See the following link for the list of virtual currency addresses used by the Lazarus Group to launder illicit proceeds: https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220506

 

*******

 

May 8, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated individuals and entities critical to Russia’s ability to wage war against Ukraine. These include the board members of two of Russia’s most important banks, a Russian state-owned bank and 10 of its subsidiaries, a state-supported weapons manufacturer, and three of Russia’s state-controlled television stations that generate revenue for the state. OFAC took this action to cut off access to services that are used by the Russian Federation and Russian elites to evade sanctions. OFAC identified accounting, trust and corporate formation, and management consulting as categories of services that are subject to a prohibition on the export, reexport, sale, or supply, directly or indirectly, from the United States, or by a U.S. person, wherever located, to any person located in the Russian Federation, pursuant to Executive Order (E.O.) 14071. OFAC has further determined that these same services sectors of the Russian Federation economy are subject to sanctions pursuant to E.O. 14024. Wealthy Russians have relied on U.S. expertise to set up shell companies, move wealth and resources to alternate jurisdictions, and conceal assets from authorities around the world. In addition, Russian companies, particularly state-owned and state-supported enterprises, rely on these services to run and grow their businesses, generating revenue for the Russian economy that helps fund Putin’s war machine. https://home.treasury.gov/news/press-releases/jy0771

 

OFAC also issued Russia-related General License 25A, General License 33, General License 34, and General License 35.  OFAC has published a Determination Pursuant to Section 1(a)(i) of Executive Order 14024 and a Determination Pursuant To Section 1(a)(ii) Of Executive Order 14071 as well as new Frequently Asked Questions.

 

General License 25A: All transactions ordinarily incident and necessary to the receipt or transmission of telecommunications involving the Russian Federation that are prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized. Except as provided in this general license, the exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, wherever located, to the Russian Federation of services, software, hardware, or technology incident to the exchange of communications over the internet, such as instant messaging, videoconferencing, chat and email, social networking, sharing of photos, movies, and documents, web browsing, blogging, web hosting, and domain name registration services, that is prohibited by the RuHSR, is authorized. https://home.treasury.gov/system/files/126/russia_gl25a.pdf

 

General License 33: All transactions ordinarily incident and necessary to the wind-down of operations, contracts, or other agreements involving one or more of the following blocked persons that were in effect prior to May 8, 2022, and that are prohibited by Executive Order (E.O.) 14024, are authorized through 12:01 a.m. eastern daylight time, June 7, 2022, provided that any payment to a blocked person must be made into a blocked account located in the United States in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR):

(1) Joint Stock Company Channel One Russia;

(2) Joint Stock Company NTV Broadcasting Company;

(3) Television Station Russia-1; or

(4) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest. https://home.treasury.gov/system/files/126/russia_gl33.pdf

 

General License 34: All transactions ordinarily incident and necessary to the wind-down of the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of accounting, trust and corporate formation, or management consulting services to any person located in the Russian Federation that is prohibited by section 1(a)(ii) of Executive Order 14071 are authorized through 12:01 a.m. eastern daylight time, July 7, 2022. 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_gl34.pdf

 

General License 35: All transactions ordinarily incident and necessary to the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of credit rating or auditing services to any person located in the Russian Federation that are prohibited by section 1(a)(ii) of Executive Order 14071 are authorized through 12:01 a.m. eastern daylight time, August 20, 2022. 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_gl35.pdf

 

Determination Pursuant to Section 1(a)(i) of Executive Order 14024: To further address the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States described in E.O. 14024, and in consultation with the Department of State and pursuant to 31 CFR § 587.802, OFAC determined that section 1(a)(i) shall apply to the accounting, trust and corporate formation services, and management consulting sectors of the Russian Federation economy. Any person that the Secretary of the Treasury or the Secretary of the Treasury’s designee, in consultation with the Secretary of State or the Secretary of State’s designee, or the Secretary of State or the Secretary of State’s designee, in consultation with the Secretary of the Treasury or the Secretary of the Treasury’s designee, subsequently determines operates or has operated in such sectors shall be subject to sanctions pursuant to section 1(a)(i). https://home.treasury.gov/system/files/126/determination_05082022_eo14024.pdf

 

Determination Pursuant To Section 1(a)(ii) Of Executive Order 14071: Pursuant to sections 1(a)(ii), 1(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”) and 31 CFR § 587.802, the Director of the Office of Foreign Assets Control, in consultation with the Department of State, hereby determines that the prohibitions in section 1(a)(ii) of E.O. 14071 shall apply to the following categories of services: accounting, trust and corporate formation, and management consulting. 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 accounting, trust and corporate formation, or management consulting services to any person located in the Russian Federation.

 

This determination excludes the following:

(1) any service to an entity located in the Russian Federation that is owned or controlled, directly or indirectly, by a United States person;

(2) any service in connection with the wind-down or divestiture of an entity located in the Russian Federation that is not owned or controlled, directly or indirectly, by a Russian person.

 

This determination shall take effect beginning at 12:01 a.m. eastern daylight time on June 7, 2022. https://home.treasury.gov/system/files/126/determination_05082022_eo14071.pdf

 

New Frequently Asked Questions: See the following link for the eight (8) new Frequently Asked Questions and Answers: https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-05-08

 

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

 

  • Alymova, Natalya Andreevna of Russia;
  • Belous, Aleksei Petrovich of Russia;
  • Borisenko, Elena Adolfovna of Russia;
  • Buriko, Alexandra Yurevna of Russia;
  • Dmitriev, Vladimir Aleksandrovich of Russia;
  • Gavrilenko, Anatolii Anatolyevich of Russia;
  • Gazaryan, Yuriy Garunovich of Russia;
  • Golodets, Olga Yuryevna of Russia;
  • Kamyshev, Denis Valentinovich of Russia, United Kingdom and South Africa;
  • Kaplunnik, Irina Aleksandrovna of Russia and Bulgaria;
  • Khachaturov, Tigran Garikovich of Russia and Armenia;
  • Komanov, Viktor Alekseevich of Russia;
  • Kuznetsov, Stanislav Konstantinovich of Russia and Germany;
  • Maltsev, Sergey Aleksandrovich of Russia;
  • Matveev, Aleksei Anatolievich of Russia;
  • Muranov, Aleksander Yurievich of Russia And Armenia;
  • Popov, Anatoliy Leonidovich of Russia;
  • Popovich, Aleksei Valerievich of Russia;
  • Puzyrnikova, Natalya Vladislavovna of Russia;
  • Rosseev, Mikhail Nikolaevich of Russia;
  • Rusanov, Igor Valerievich of Russia;
  • Ryskin, Vladimir Markovich of Russia;
  • Sadygov, Famil Kamil Ogly of Russia;
  • Sereda, Mikhail Leonidovich of Russia;
  • Shamalov, Yurii Nikolaevich of Russia;
  • Sobol, Alexander Ivanovich of Russia;
  • Stepanov, Aleksandr Mikhailovich of Russia;
  • Tsarev, Kirill Aleksandrovich of Russia;
  • Tyurin, Vyacheslav Aleksandrovich of Russia;
  • Vinokurov, Vladimir Nikolaevich of Russia;
  • Yeliseyev, Ilya Vladimirovich of Russia;
  • Zauers, Dmitrii Vladimirovich of Russia; and
  • Zlatkis, Bella Ilyinichna of Russia.

 

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

 

  • Agropromyshlenny Kompleks Voronezhski OOO of Russia;
  • Anninskii Elevator OOO of Russia;
  • Auditkonsalt OOO of Russia;
  • Azovskaya Zernovaya Kompaniya OOO of Russia;
  • Belinveststroi OOO of Russia;
  • Dve Stolitsy OOO of Russia;
  • Ekspluatiruyushchaya Kompaniya Tsentr OOO of Russia;
  • Joint Stock Company Channel One Russia of Russia;
  • Joint Stock Company Moscow Industrial Bank of Russia;
  • Joint Stock Company Northern Shipping Company of Russia;
  • Joint Stock Company NTV Broadcasting Company of Russia;
  • Kontrakt OOO of Russia;
  • Ladoga OOO of Russia;
  • Limited Liability Company Promtekhnologiya of Russia;
  • M Leasing LLC of Russia;
  • Marine Trans Shipping LLC of Russia;
  • Nekommercheskaya Organizatsiya Fond Khimicheskoe Razoruzhenie I Konversiya of Russia;
  • Nord Project LLC Transport Company of Russia;
  • Obshchestvo S Ogranichennoi Otvetstvennostyu Fertoing of Russia;
  • SC South LLC of Russia;
  • Television Station Russia-1 of Russia; and
  • Transmorflot LLC of Russia.

 

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

 

  • Adler Roll-on Roll-off 8,811GRT Russia flag; Vessel Registration Identification IMO 9179854;
  • Ambal Roll-on Roll-off 20,729GRT Russia flag; Vessel Registration Identification IMO 8807416;
  • Anastasiia General Cargo 9,611GRT Russia flag; Vessel Registration Identification IMO 9349291;
  • Angara Roll-on Roll-off 8,811GRT Russia flag; Vessel Registration Identification IMO 9179842;
  • Ascalon Roll-on Roll-off 8,821GRT Russia flag; Vessel Registration Identification IMO 9198226;
  • Askar-Sarydzha General Cargo 4,991GRT Russia flag; Vessel Registration Identification IMO 9082142;
  • Belomorskiy Dredger 2,628GRT Russia flag; Vessel Registration Identification IMO 8305781;
  • Chizhovka Hopper Barge 745GRT Russia flag; Vessel Registration Identification IMO  8730455;
  • Dvinskiy Zaliv Dredger 2,081GRT Russia flag; Vessel Registration Identification IMO 8922486;
  • Enisey Bulk Carrier 27,078GRT Russia flag; Vessel Registration Identification IMO 9079169;
  • Etim Emin General Cargo 1,853GRT Russia flag; Vessel Registration Identification IMO 8700010;
  • Gasret Aliev General Cargo 4,991GRT Russia flag; Vessel Registration Identification IMO 9083330;
  • Genrikh Gasanov General Cargo 4,991GRT Russia flag; Vessel Registration Identification IMO 9083196;
  • Inzhener Trubin General Cargo 6,418GRT Russia flag; Vessel Registration Identification IMO 8502080;
  • Inzhener Veshnyakov General Cargo 6,418GRT Russia flag; Vessel Registration Identification IMO 8502107;
  • Iohann Mahmastal General Cargo 6,395GRT Russia flag; Vessel Registration Identification IMO 8603406;
  • Kapitan Kokovin General Cargo 2,474GRT Russia flag; Vessel Registration Identification IMO 9279422;
  • Kapitan Ryntsyn General Cargo 2,601GRT Russia flag; Vessel Registration Identification IMO 8618073;
  • Kapitan Sakharov General Cargo 2,474GRT Russia flag; Vessel Registration Identification IMO 9279434;
  • Kholmogory General Cargo 2,986GRT Russia flag; Vessel Registration Identification IMO 9109081;
  • Kompozitor Gasanov Roll-on Roll-off 6,894GRT Russia flag; Vessel Registration Identification IMO 8606628;
  • Lady D General Cargo 9,611GRT Russia flag; Vessel Registration Identification IMO 9349289;
  • Lady Mariia Roll-on Roll-off 8,831GRT Russia flag; Vessel Registration Identification IMO 9220641;
  • Lady R Roll-on Roll-off 7,260GRT Russia flag; Vessel Registration Identification IMO 9161003;
  • Lapominka Hopper Barge 643GRT Russia flag; Vessel Registration Identification IMO 8928143;
  • Maia-1 General Cargo 9,611GRT Russia flag; Vessel Registration Identification IMO 9358010;
  • Maria E (a.k.a. "MARIA") Roll-on Roll-off 3,069GRT Togo flag; Other Vessel Type Passenger; Vessel Registration Identification IMO 9617923;
  • Mekhanik Brilin General Cargo 2,489GRT Russia flag; Vessel Registration Identification IMO  8904408;
  • Mekhanik Kottsov General Cargo 2,489GRT Russia flag; Vessel Registration Identification IMO 8904410;
  • Mekhanik Kraskovskiy General Cargo 2,489GRT Russia flag; Vessel Registration Identification IMO 8904458;
  • Mekhanik Makarin General Cargo 3,178GRT Russia flag; Vessel Registration Identification IMO 8904379;
  • Mekhanik Pustoshnyy General Cargo 2,489GRT Russia flag; Vessel Registration Identification IMO 8904422;
  • Mekhanik Pyatlin General Cargo 2,489GRT Russia flag; Vessel Registration Identification IMO 8904434;
  • Mekhanik Yartsev General Cargo 2,489GRT Russia flag; Vessel Registration Identification IMO 8904367;
  • Mikhail Lomonosov General Cargo 2,990GRT Russia flag; Vessel Registration Identification IMO 9216482;
  • NP Dikson Chemical/Oil Tanker 15,980GRT Russia flag; Vessel Registration Identification IMO 9255270;
  • NP Dudinka Chemical/Oil Tanker 14,400GRT Russia flag; Vessel Registration Identification IMO 9183831;
  • Olga General Cargo 1,853GRT Russia flag; Vessel Registration Identification IMO 8700046;
  • Pizhma General Cargo 3,466GRT Russia flag; Vessel Registration Identification IMO 8814354;
  • POLAR Rock Crude Oil Tanker 56,924GRT Russia flag; Vessel Registration Identification IMO 9116632;
  • Port Olya-1 General Cargo 4,878GRT Russia flag; Vessel Registration Identification IMO 9481922;
  • Port Olya-2 General Cargo 4,878GRT Russia flag; Vessel Registration Identification IMO 9481881;
  • Rasul Gamzatov General Cargo 4,991GRT Russia flag; Vessel Registration Identification IMO 8861058;
  • RZK Constanta General Cargo 7,095GRT Russia flag; Vessel Registration Identification IMO 8711289;
  • Kuznetsov General Cargo 6,204GRT Russia flag; Vessel Registration Identification IMO 9210359;
  • Sabetta General Cargo 12,936GRT Russia flag; Vessel Registration Identification IMO 9347061;
  • Severniy Proect General Cargo 13,066GRT Russia flag; Vessel Registration Identification IMO 9202053;
  • Siberia Bulk Carrier 17,665GRT Russia flag; Vessel Registration Identification IMO 9239458;
  • SIYANIE Severa General Cargo 6,577GRT Russia flag; Vessel Registration Identification IMO 9250385;
  • SMP Arkhangelsk General Cargo 7,752GRT Russia flag; Vessel Registration Identification IMO 9240550;
  • SMP Novodvinsk General Cargo 4,106GRT Russia flag; Vessel Registration Identification IMO 9398046;
  • SMP Severodvinsk General Cargo 4,106GRT Russia flag; Vessel Registration Identification IMO 9376440;
  • Sona General Cargo 1,853GRT Russia flag; Vessel Registration Identification IMO 8700060;
  • Sparta II Roll-on Roll-off 7,260GRT Russia flag; Vessel Registration Identification IMO 9160994;
  • Sparta III (a.k.a. URSA MAJOR) General Cargo 12,679GRT Russia flag; Vessel Registration Identification IMO 9538892;
  • Sparta IV General Cargo 7,522GRT Russia flag; Vessel Registration Identification IMO 9743033;
  • Sparta Roll-on Roll-off 8,831GRT Russia flag; Vessel Registration Identification IMO 9268710;
  • Taibola General Cargo 8,448GRT Russia flag; Vessel Registration Identification IMO 9086253;
  • Taimyr General Cargo 7,949GRT Russia flag; Vessel Registration Identification IMO 8821797;
  • Tambey General Cargo 7,949GRT Russia flag; Vessel Registration Identification IMO 9014872;
  • Teriberka General Cargo 8,448GRT Russia flag; Vessel Registration Identification IMO 9081291;
  • Teriberka Hopper Barge 643GRT Russia flag; Vessel Registration Identification IMO 8931748;
  • Terskiy Bereg General Cargo 8,448GRT Russia flag; Vessel Registration Identification IMO 9081368;
  • Tiksy General Cargo 7,949GRT Russia flag; Vessel Registration Identification IMO 8821802;
  • Triton Tug 161GRT Russia flag; Vessel Registration Identification IMO 7236141;
  • Turukhan General Cargo 8,448GRT Russia flag; Vessel Registration Identification IMO 9081332;
  • Utrenniy General Cargo 12,936GRT Russia flag; Vessel Registration Identification IMO 9347059;
  • Valentin Emirov General Cargo 4,110GRT Russia flag; Vessel Registration Identification IMO 8866591; and
  • Viktor ZAbelin General Cargo 6,204GRT Russia flag; Vessel Registration Identification IMO 9210256.

 

*******

 

May 9, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated a network of five Islamic State of Iraq and Syria (ISIS) financial facilitators operating across Indonesia, Syria, and Turkey. The five individuals, who are designated pursuant to Executive Order (E.O.) 13224, as amended, have played a key role in facilitating the travel of extremists to Syria and other areas where ISIS operates. This network has also conducted financial transfers to support ISIS efforts in Syria-based displaced persons camps by collecting funds in Indonesia and Turkey, some of which were used to pay for smuggling children out of the camps and delivering them to ISIS foreign fighters as potential recruits.

 

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

 

  • Adhiguna, Muhammad Dandi of Turkey and Indonesia;
  • Heryadi, Rudi, Bogor of Indonesia;
  • Kardian, Ari, Cempakawarna Rt, Tasikmalaya of Indonesia;
  • Ramadhani, Dini, Kayseri of Turkey and Indonesia; and
  • Susanti, Dwi Dahlia, Idlib of Syria and Indonesia.

 

https://home.treasury.gov/news/press-releases/jy0772 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220509

 

*******

 

May 11, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) has updated FAQs 1034, 1035, and 1038.

 

  1. For the purposes of the determination of May 8, 2022, made pursuant to Executive Order (E.O.) 14071, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services,” what is meant by the terms “accounting,” “trust and corporate formation,” and “management consulting” services?

 

Answer

For the purposes of the determination of May 8, 2022, made pursuant to E.O. 14071, OFAC anticipates publishing regulations defining these terms to include the following:

  • “Accounting services” – includes services related to the measurement, processing, and evaluation of financial data about economic entities.  Please note that OFAC has issued General License 35 to authorize certain transactions ordinarily incident and necessary to the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of credit rating or auditing services to any person located in the Russian Federation through 12:01 a.m. eastern daylight time, August 20, 2022.  See FAQ 1035.
  • “Trust and corporate formation services” – includes services related to assisting persons in forming or structuring legal persons, such as trusts and corporations; acting or arranging for other persons to act as directors, secretaries, administrative trustees, trust fiduciaries, registered agents, or nominee shareholders of legal persons; providing a registered office, business address, correspondence address, or administrative address for legal persons; and providing administrative services for trusts.  Please note that all of these activities are common activities of trust and corporate service providers (TCSPs), although they may be provided by other persons.
  • “Management consulting services” – includes services related to strategic business advice; organizational and systems planning, evaluation, and selection; development or evaluation of marketing programs or implementation; mergers, acquisitions, and organizational structure; staff augmentation and human resources policies and practices; and brand management.

 

This determination excludes from the scope of the aforementioned services: (1) any service to an entity located in the Russian Federation that is owned or controlled, directly or indirectly, by a United States person; and (2) any service in connection with the wind down or divestiture of an entity located in the Russian Federation that is not owned or controlled, directly or indirectly, by a Russian person.

For the purposes of the determination of May 8, 2022, made pursuant to E.O. 14071, OFAC anticipates publishing regulations defining the term “Russian person” to mean an individual who is a citizen or national of the Russian Federation, or an entity organized under the laws of the Russian Federation.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1034

 

  1. For the purposes of Russia-related General License 35 what is meant by the terms “credit rating services” and “auditing services?”

 

Answer

The term “credit rating services” means services related to assessments of a borrower’s ability to meet financial commitments, including analysis of general creditworthiness or with respect to a specific debt or financial obligation.

 

The term “auditing services” means examination or inspection of business records by an auditor, including checking and verifying accounts, statements, or other representation of the financial position or regulatory compliance of the auditee.

 

General License 35 authorizes certain transactions ordinarily incident and necessary to the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of credit rating or auditing services to any person located in the Russian Federation through 12:01 a.m. eastern daylight time, August 20, 2022.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1035

 

  1. For the purposes of the determination of May 8, 2022, made pursuant to Executive Order (E.O.) 14024, what is meant by the terms “accounting,” “trust and corporate formation services,” and “management consulting” sectors of the Russian Federation economy?

 

Answer

 

For the purposes of the determination of May 8, 2022, made pursuant to E.O. 14024, OFAC interprets the following terms to include activities related to products and services in or involving the Russian Federation in the following:

  • “Accounting sector” – includes the measurement, processing, and evaluation of financial data about economic entities.
  • “Trust and corporate formation services sector” – includes assisting persons in forming or structuring legal persons, such as trusts and corporations; acting or arranging for another person to act as directors, secretaries, administrative trustees, trust fiduciaries, registered agents, or nominee shareholders of legal persons; providing a registered office, business address, correspondence address, or administrative address for legal persons; and providing administrative services for trusts.
  • “Management consulting sector” – includes strategic business advice; organizational and systems planning, evaluation, and selection; development or evaluation of marketing programs or implementation; mergers, acquisitions, and organizational structure; staff augmentation and human resources policies and practices; and brand management.

The determination regarding these sectors pursuant to E.O. 14024 takes effect immediately.

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1038

 

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May 12, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issues Syria General License 22 and publishes additional Frequently Asked Questions.

 

General License 22: Transactions prohibited by § 542.206 or 542.207 of the Syrian Sanctions Regulations, 31 CFR part 542 (SySR), that are ordinarily incident and necessary to activities in the following economic sectors in the areas of northeast and northwest Syria described in the Annex to this general license are authorized: (1) agriculture; (2) information and telecommunications; (3) power grid infrastructure; (4) construction; (5) finance; (6) clean energy; (7) transportation and warehousing; (8) water and waste management; (9) health services; (10) education; (11) manufacturing; and (12) trade.

 

The purchase of refined petroleum products of Syrian origin for use in Syria prohibited by § 542.209 of the SySR that is ordinarily incident and necessary to the activities described in paragraph (a) of this general license are authorized.

 

https://home.treasury.gov/system/files/126/syria_gl22.pdf

 

See the following link for the full text of new Frequently Asked Questions 1045 through 1041:

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-05-12.

 

See the following link for the full text of reviewed Frequently Asked Question 884:

 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/884.

 

*******

 

May 19, 2022: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Ahmad Jalal Reda Abdallah, a Lebanese businessman and Hizballah financial facilitator, as well as five of his associates and eight of his companies in Lebanon and Iraq. This action illuminates Hizballah’s modus operandi of using the cover of seemingly legitimate businesses to generate revenue and leverage commercial investments across a multitude of sectors to secretly fund Hizballah and its terrorist activities. It also demonstrates how Hizballah goes to great lengths to establish companies with opaque ownership structures in order to conceal their involvement in these businesses, and also their involvement in criminal activities such as altering of medication labels for black market pharmaceutical sales.

 

https://home.treasury.gov/news/press-releases/jy0796

 

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

  • Abdallah, Ahmad Jalal Red of Lebanon;
  • Abdallah, Ali Reda of Lebanon;
  • Abdallah, Hussein Ahmad Jalal of Lebanon;
  • Abdallah, Hussein Reda of Lebanon;
  • Attia, Hussein Kamel of Lebanon; and
  • Haidamous, Joseph Ilya of Lebanon.

 

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

 

  • Al Moukhtar Products Co. SARL of Lebanon;
  • Focus Company SARL of Lebanon;
  • Focus Media Company Sal Offshore of Lebanon;
  • United General Contracting Company SARL of Lebanon;
  • United General Holding SAL of Lebanon;
  • United General Offshore SAL of Lebanon;
  • United General Services SARL of Lebanon; and
  • United International Exhibition Company SARL of Lebanon.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220519

 

*******

 

May 24, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) will not renew the provisions of GL-9C issued pursuant to the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587, that expire on May 25, 2022 at 12:01 a.m. EDT. Therefore, Russia will not be able to pay its debts in U.S. dollars and makes it more likely that Russia will default on its debts.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220524_33

 

May 25, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 13A, "Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024."

 

General License 13A: 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 daylight time, September 30, 2022.

 

This general license does not authorize: Any debit to an account on the books of a U.S. financial institution of the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation; or any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR, unless separately authorized. Effective May 25, 2022, General License No. 13, dated March 2, 2022, is replaced and superseded in its entirety by this General License No. 13A.

 

https://home.treasury.gov/system/files/126/russia_gl13a.pdf

 

*******

 

May 24, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated a Hamas finance official as well as an expansive network of three Hamas financial facilitators and six companies that have generated revenue for the terrorist group through the management of an international investment portfolio. Hamas’s Investment Office, whose leadership oversees this network, held assets estimated to be worth more than $500 million, including companies operating in Sudan, Turkey, Saudi Arabia, Algeria, and the United Arab Emirates (UAE). While Hamas’s Shura Council and Executive Committee exercise control and oversight of the group’s international investment portfolio, the Investment Office is in charge of the day-to-day management of this investment portfolio.

https://home.treasury.gov/news/press-releases/jy0798

 

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

  • Ali, Usama of Lebanon, Canada and Palestine;
  • Odeh, Ahmed Sharif Abdallah of Jordan;
  • Qafisheh, Hisham Younis Yahia of Turkey, Palestine, Saudi Arabia and Jordan; and
  • Sabri, Abdallah Yusuf Faisal of Jordan.

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

  • Agrogate Holding of Sudan;
  • Al Rowad Real Estate Development of Sudan;
  • Anda Company of Saudi Arabia;
  • Itqan Real Estate JSC of the United Arab Emirates;
  • Sidar Company of Algeria; and
  • Trend GYO of Turkey.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220524

 

*******

 

May 25, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating an international oil smuggling and money laundering network led by Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) officials that has facilitated the sale of hundreds of millions of dollars worth of Iranian oil for both the IRGC-QF and Hizballah. This oil smuggling network, led by U.S.-designated IRGC-QF official Behnam Shahriyari and former IRGC-QF official Rostam Ghasemi and backed by senior levels of the Russian Federation government and state-run economic organs, has acted as a critical element of Iran’s oil revenue generation, as well as its support for proxy militant groups that continue to perpetuate conflict and suffering throughout the region.

 

https://home.treasury.gov/news/press-releases/jy0799

 

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

  • Celik, Abdulhamid of Turkey;
  • Ettehadi, Esam of Iran;
  • Gunduz, Seyyid Cemal, of Turkey;
  • Hamidi, Mihrab Suhrab  of Afghanistan and Russia;
  • Karimian, Mohammad Sadegh of  Iran;
  • Kashanimehr, Alireza of Iran;
  • Kaskariy, Abdulaziz of Turkey;
  • Monzavi, Azim of Iran;
  • Nabizada, Kamaluddin Gulam of Afghanistan and Russia; and
  • Sanli, Hakki Selcuk of Turkey.

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

  • China Haokun Energy Limited of China;
  • Concepto Screen Sal Off-Shore of Lebanon;
  • Fujie Petrochemical Zhoushan Co., Ltd. of China;
  • Haokun Energy Group Company Limited of China;
  • Petro China Pars CO. of Iran;
  • Rpp Limited Liability Company of Russia;
  • Shandong Sea Right Petrochemical Co., Ltd. of China;
  • Turkoca Import Export Transit Co., Ltd. of South Korea; and
  • Zamanoil Dmcc of the United Arab Emirates.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220525

 

*******

 

May 27, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned one individual, two banks, and a trading company for their support to the Democratic People’s Republic of Korea’s (DPRK) development of weapons of mass destruction (WMD) and ballistic missile programs and to the U.S.-designated DPRK national airline.  On May 24, 2022, the DPRK launched three missiles:  one intercontinental ballistic missile (ICBM) and two shorter-range ballistic missiles.  So far this year, the DPRK has launched 23 ballistic missiles, including six ICBMs — all in violation of multiple United Nations Security Council resolutions (UNSCRs).

 

https://home.treasury.gov/news/press-releases/jy0801

 

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

 

  • Jong, Yong Nam of Belarus and North Korea.

 

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

 

  • Air Koryo Trading Corporation of China;
  • Far Eastern Bank of Russia; and
  • Public Joint-Stock Company Commercial Bank 'Sputnik' of Russia.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220527

 

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Nuclear Regulatory Commission

 

May 17, 2022: 87 Fed. Reg. 29882: The U.S. Nuclear Regulatory Commission (NRC) issued an Order suspending the general license authority under NRC regulations to export radioactive material, and deuterium for nuclear end use, to the Russian Federation. Exporters are no longer authorized to use the general license to export radioactive material, or deuterium for nuclear end-use, to the Russian Federation and now must apply for a specific license pursuant to NRC regulations.

 

https://www.govinfo.gov/content/pkg/FR-2022-05-17/pdf/2022-10565.pdf

 

 

 

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The U.S. Departments of State, Treasury, Commerce, and Labor 

 

May 23, 2022:  The U.S. Departments of State, Treasury, Commerce, and Labor issued an advisory "Risks and Considerations for U.S. Businesses Operating in Sudan" to highlight growing risks to American businesses and individuals associated with conducting business with Sudanese State-Owned Enterprises which includes all companies under military control.  These risks arise from recent actions undertaken by Sudan’s Sovereign Council and security forces under the military’s control and could adversely impact U.S. businesses, individuals, other persons, and their operations in the country and the region.

 

https://www.state.gov/risks-and-considerations-for-u-s-businesses-operating-in-sudan/

 

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Fines and Penalties

 

May 9, 2022: A federal judge in Greeneville, Tennessee, sentenced Xiaorong You, aka Shannon You, a Michigan woman to 168 months, the equivalent of 14 years, in prison for a scheme to steal trade secrets, engage in economic espionage and commit fraud. The defendant was also ordered to serve three years of supervised release and pay a $200,000 fine. In April 2021, following a 13-day jury trial, Xiaorong You, aka Shannon You, was convicted of conspiracy to commit trade secret theft, conspiracy to commit economic espionage, possession of stolen trade secrets, economic espionage and wire fraud.

 

https://www.justice.gov/opa/pr/chemist-sentenced-stealing-trade-secrets-economic-espionage-and-wire-fraud

 

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May 13, 2022: The U.S. Department of Justice (DOJ) has filed its first criminal complaint against a U.S. citizen who allegedly tried to evade American sanctions using cryptocurrency, according to a judicial opinion document filed on May 13 2022, by U.S. Magistrate Judge Zia M. Faruqui. The case is still sealed.  The DOJ’s criminal complaint is against an American citizen accused of transmitting more than $10 million worth of bitcoin to a crypto exchange in a comprehensively sanctioned country. Comprehensive sanctions are currently placed on Cuba, Iran, North Korea, Syria, and the regions of Crimea, Donetsk, and Luhansk.

 

https://theparadise.ng/doj-files-first-criminal-complaint-against-us-citizen-allegedly-using-cryptocurrency-to-evade-sanctions/

 

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May 18, 2022: A Chicago technology executive, Obaidullah Syed, 67, of Northbrook, Ill., has been sentenced to a year in federal prison for illegally exporting computer equipment from the United States to a nuclear research agency of the Pakistani government. Obaidullah Syed pleaded guilty last year to conspiring to export goods from the U.S. without a license from the Department of Commerce and to submit false export information.  U.S. District Judge Mary M. Rowland sentenced Syed to a year and a day in federal prison.  Prior to sentencing, Syed forfeited $247,000 of criminally derived cash to the U.S. government.

 

https://www.justice.gov/usao-ndil/pr/chicago-tech-executive-sentenced-year-federal-prison-illegally-exporting-computer

 

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May 18, 2022: Seven South Korea-based companies have agreed to pay $3.1 million to resolve allegations they violated the False Claims Act by engaging in a bid-rigging conspiracy that targeted U.S. Army Corps of Engineers (USACE) contracts for construction and engineering work on U.S. military bases in South Korea. The seven companies are Korea Engineering Consultants Corporation; Yul Lim Construction Co. Ltd.; Shin Woo Construction & Industrial Co. Ltd.; Seongbo Const. Ind. Co. Ltd.; Wooseok Construction Co. Ltd.; Yuil Engineering and Construction Co.; and Seokwang Development Co. Ltd. The companies have agreed to each pay an equal share of the settlement amount.

 

The United States alleged the seven companies conspired to suppress and eliminate competition during the bidding process on 15 USACE contracts awarded between 2016 and 2019. The United States further alleged that as a result of this anticompetitive conduct, the USACE paid substantially more for services performed under the contracts than it would have had there been competition among the bidders.

 

https://www.justice.gov/opa/pr/seven-south-korean-companies-agree-pay-approximately-31-million-settle-civil-false-claims-act

 

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May 20, 2022: A federal grand jury in the Eastern District of Texas returned an indictment charging a military contractor, Aaron Stephens, for rigging bids on public military contracts in Texas and Michigan and defrauding the United States.

 

According to the indictment, from at least as early as May 2013 through at least April 2018, Stephens formed agreements with multiple co-conspirators to rig bids on certain government contracts in order to give the false impression of competition and secure government payments, and to defraud the United States.  As a part of two different schemes, Stephens and his co-conspirators allegedly rigged eight military contracts and received more than $15 million from the government for those contracts. The contracts included work performed for the Red River Army Depot in Texarkana, Texas; the U.S. Army Contracting Command in Warren, Michigan; and the Sierra Army Depot in Herlong, California.

 

https://www.justice.gov/opa/pr/military-contractor-indicted-15-million-bid-rigging-scheme-and-conspiracy-defraud-united

 

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May 20, 2022: Cape Henry Associates (Cape Henry), located in Virginia Beach, Virginia, has agreed to pay $425,000 to resolve allegations that it violated the False Claims Act by failing to inform contracting officers of the company’s organizational conflicts of interest (OCI) in connection with the award and performance of task orders on government contracts. Cape Henry performs manpower analysis, personnel analysis and training services for the U.S. Armed Forces.

 

The Justice Department alleged that Cape Henry failed to disclose that one of the company’s officers had an ownership interest in KOVA Global, a company to which Cape Henry awarded subcontracts to provide warehouse services in connection with two sole source task orders issued by the Army and General Services Administration (GSA).

 

https://www.justice.gov/opa/pr/government-contractor-agrees-pay-425000-alleged-false-claims-related-conflicts-interest

 

*******

 

May 26, 2022: The United States Attorney’s Office unsealed a criminal complaint charging Jonathan Yet Wing Soong with smuggling and violating export control laws by allegedly secretly funneling sensitive aeronautics software to a Beijing university. The allegations against Soong, 34, of San Jose, were set out in a complaint filed May 23, 2022.  According to the complaint, Soong was employed by Universities Space Research Association (USRA) between April 2016 and September 2020 as a program administrator.  USRA is a nonprofit corporation contracted by the National Aeronautics and Space Administration (NASA) to, among other things, distribute domestically and internationally sensitive aeronautics-related software developed through the Army’s Software Transfer Agreement (STA) program.  As USRA’s STA program administrator, Soong was responsible for overseeing certain software license sales, conducting export compliance screening of customers, generating software licenses, and, on occasion, physically exporting software.

 

Soong is alleged to have been trained in and been aware of export compliance rules which, among other things, restrict sales and exports to certain entities.  As relevant to this case, the complaint describes rules that restrict sales of certain technology to entities on the U.S. Department of Commerce Entity List (Entity List), a list with associated regulations that are maintained by the Department of Commerce pursuant to a federal statutory and presidential directive.  The Entity List and associated regulations prohibit export without a license of certain technology with commercial and potential military applications to entities and individuals whose activities have been found to be contrary to U.S. national security or foreign policy interests.  The complaint alleges Soong unlawfully and without a license exported and facilitated the sale and transfer of software to an entity on the Entity List—Beijing University of Aeronautics and Astronautics (BUAA), which is also known as Beihang University.  According to the complaint, Beihang University was added to the Entity List due to the University’s involvement in People’s Republic of China military rocket systems and unmanned air vehicle systems.  Given its inclusion on the Entity List, BUAA is prohibited from receiving certain items without a license.  The complaint alleges Soong used an intermediary in hopes that the illegal transfer would not be detected.

 

https://www.justice.gov/usao-ndca/pr/south-bay-resident-charged-smuggling-and-exporting-american-aviation-technology-beijing

 

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May 27, 2022: The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with Banco Popular de Puerto Rico (BPPR), a Puerto Rican bank with branches in Puerto Rico and the Virgin Islands.  BPPR agreed to remit $225,937.86 to settle its potential civil liability for 337 apparent violations of the Venezuela Sanctions Regulations.  The apparent violations occurred when BPPR processed transactions totaling $853,126 on behalf of two individuals who were low-level employees of the Government of Venezuela (GoV), in apparent violation of U.S. sanctions against Venezuela.  All of the apparent violations resulted from the maintenance of four personal accounts operated by these two employees of the GoV.  The settlement amount reflects OFAC’s determination that BPPR’s apparent violations were non-egregious and voluntarily self-disclosed.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220527_33

APRIL 2022 EXPORT CONTROL REGULATION UPDATES

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

 

The President Designated Colombia As A Major Non-NATO Ally

 

April 21, 2022: The President, in accordance with section 517 of the Foreign Assistance Act of 1961, as amended (22 U.S.C. 2321k), provided notice of his intent to designate Colombia as a Major Non-NATO Ally in recognition of the importance of the U.S.-Colombia relationship and Colombia’s crucial contributions to regional and international security.

https://www.whitehouse.gov/briefing-room/statements-releases/2022/04/21/letter-to-the-speaker-of-the-house-of-representatives-and-president-of-the-senate-on-providing-notice-of-intent-to-designate-colombia-as-a-major-non-nato-ally/

 

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

 

DDTC Name And Address Changes Posted To Website

 

April 1 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 from RFEL Ltd. to Rheinmetall Electronics UK Ltd., due to corporate rebranding;
  • Change in Name from Flightline Electronics, Inc., to Undersea Sensor Systems, Inc., due to corporate merger with Undersea Sensor Systems, Inc.;
  • Change in Address for ITOCHU Aviation Co., Ltd. Nagoya Branch from 5-28, Meieki 4-chome, Nakamura-ku, Nagoya 450-0002 Japan to 7-1, Meieki 4-chome, Nakamura-ku, Nagoya 450-6215 Japan;
  • Change in Address for Sonovision Canada Inc., from 85 Albert Street, Suite 400, Ottawa, Ontario K1P 6A4, Canada to 179 Colonnade Rd. South, Unit 100, Nepean, Ontario K2E 7J4, Canada; and
  • Change in Name from Sysco AS to Cegal AS due to corporate merger.

 

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

 

BIS Excludes Iceland, Liechtenstein, Norway And Switzerland From The Russia/Belarus Foreign-Produced Product Rule

 

April 8, 2022: 87 Fed. Reg. 21554:  The U.S. Department of Commerce, Bureau of Industry and Security (BIS), established highly restrictive license requirements and policies for certain transactions involving Russia and Belarus under the Export Administration Regulations (EAR). These restrictive licensing requirements impact foreign parties who use U.S. manufacturing equipment and aids in the production of items sold to Russia and Belarus. Refer to the Foreign Direct Product rule at the EAR Part 734.9.

To recognize partner countries implementing substantially similar export controls on Russia and Belarus, the Department of Commerce published a list of countries excluded from the Foreign Direct Product rule related to foreign-produced items. In this rule, the Department of Commerce adds Iceland, Liechtenstein, Norway, and Switzerland to the list of excluded countries.

https://www.federalregister.gov/documents/2022/04/12/2022-07836/additions-to-the-list-of-countries-excluded-from-certain-license-requirements-under-the-export

 

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The Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives

 

ATF Revised Definitions For “Firearm Frame Or Receiver” And “Frame Or Receiver”

 

April 26, 2022: 87 Fed. Reg. 24625: The Department of Justice (Department) is amending Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) regulations to remove and replace the regulatory definitions of “firearm frame or receiver” and “frame or receiver” because the current regulations fail to capture the full meaning of those terms. The Department is also amending ATF's definitions of “firearm” and “gunsmith” to clarify the meaning of those terms, and to provide definitions of terms such as “complete weapon,” “complete muffler or silencer device,” “multi-piece frame or receiver,” “privately made firearm,” and “readily” for purposes of clarity given advancements in firearms technology. Further, the Department is amending ATF's regulations on marking and recordkeeping that are necessary to implement these new or amended definitions. See the revised definitions at: https://www.federalregister.gov/documents/2022/04/26/2022-08026/definition-of-frame-or-receiver-and-identification-of-firearms

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 President

 

April 6, 2022: The President issued E.O. of April 6, 2022, “Prohibiting New Investment in and Certain Services to the Russian Federation in Response to Continued Russian Federation Aggression,” to ban all new investment in the Russian Federation by U.S. persons, wherever located, as well as 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. These prohibitions follow recently issued Executive Orders 14066 and 14068, which prohibit certain imports and exports involving Russia, and are consistent with commitments made by the G7 leaders to ensure that our citizens are not underwriting Putin’s war.

https://home.treasury.gov/news/press-releases/jy0705 and https://www.whitehouse.gov/briefing-room/presidential-actions/2022/04/06/prohibiting-new-investment-in-and-certain-services-to-the-russian-federation-in-response-to-continued-russian-federation-aggression/

 

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April 6, 2022: The White House issued a Fact Sheet on the United States, G7, and EU sanctions on Russia. The U.S., with the G7 and the European Union, will continue to impose severe and immediate economic costs on the Putin regime for its atrocities in Ukraine, including in Bucha. The United States, G7, and EU will document and share information on these atrocities and use all appropriate mechanisms to hold accountable those responsible. As one part of this effort, the United States is announcing devastating economic measures to ban new investment in Russia and impose the most severe financial sanctions on Russia’s largest bank and several of its most critical state-owned enterprises and on Russian government officials and their family members. These sweeping financial sanctions follow White House action earlier to cut off Russia’s frozen funds in the United States to make debt payments. Importantly, these measures are designed to reinforce each other to generate intensifying impact over time.

 

The United States and more than 30 allies and partners across the world have levied the most impactful, coordinated, and wide-ranging economic restrictions in history. Experts predict Russia’s GDP will contract up to 15 percent this year, wiping out the last fifteen years of economic gains. Inflation is already spiking above 15 percent and is forecast to accelerate higher. More than 600 private sector companies have already left the Russian market. Supply chains in Russia have been severely disrupted. Russia will likely lose its status as a major economy, and it will continue a long descent into economic, financial, and technological isolation. Compared to last year, U.S. exports to Russia of items subject to the new export controls have decreased 99 percent by value – and the power of these restrictions will compound over time as Russia draws down any remaining stockpiles of spare parts for certain planes, tanks, and other resources needed for Putin’s war machine. As long as Russia continues its brutal assault on Ukraine, the United States, G7 and EU will stand unified with our allies and partners in imposing additional costs on Russia for its actions. To review the complete Fact Sheet, please go to the following link:

https://www.whitehouse.gov/briefing-room/statements-releases/2022/04/06/fact-sheet-united-states-g7-and-eu-impose-severe-and-immediate-costs-on-russia/

 

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April 6, 2022: 87 Fed. Reg. 20999: The President issued Executive Order 14071, which prohibits the following new investment in and certain services to the Russian Federation in response to continued Russian Federation aggression:

(i) new investment in the Russian Federation by a United States person, wherever located;

(ii) 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; and

(iii) any approval, financing, facilitation, or guarantee by a United States person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited by this section if performed by a United States person or within the United States.

https://www.federalregister.gov/documents/2022/04/08/2022-07757/prohibiting-new-investment-in-and-certain-services-to-the-russian-federation-in-response-to

 

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April 22, 2022: 87 Fed. Reg. 24265: The policies and actions of the Government of the Russian Federation to continue the premeditated, unjustified, unprovoked, and brutal war against Ukraine constitute a national emergency by reason of a disturbance or threatened disturbance of international relations of the United States. In order to address this national emergency and secure the observance of the rights and obligations of the United States the President of the United States authorized the Secretary of Homeland Security (Secretary) to make and issue such rules and regulations as the Secretary may find appropriate to regulate the anchorage and movement of Russian-affiliated vessels, and delegate to the Secretary the President’s authority to approve such rules and regulations, as authorized by the Magnuson Act. Specifically, the President of the United States prohibits Russian-affiliated vessels from entering into United States ports. https://www.federalregister.gov/documents/2022/04/22/2022-08872/declaration-of-national-emergency-and-invocation-of-emergency-authority-relating-to-the-regulation

 

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The U.S. Department of State:

 

The U.S. Department of State established the Bureau of Cyberspace and Digital Policy, which leads and coordinates the Department of State’s work on cyberspace and digital diplomacy to encourage responsible state behavior in cyberspace and advance policies that protect the integrity and security of the infrastructure of the Internet, serve U.S. interests, promote competitiveness, and uphold democratic values. The Bureau of Cyberspace and Digital Policy addresses the national security challenges, economic opportunities, and values considerations presented by cyberspace, digital technologies, and digital policy and promotes standards and norms that are fair, transparent, and support our values.

https://www.state.gov/bureaus-offices/deputy-secretary-of-state/bureau-of-cyberspace-and-digital-policy/

 

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April 6, 2022: 87 Fed. Reg. 20029: Acting under the authority of and in accordance with section 1(a)(ii)(A) of E.O. 13224 of September 23, 2001, as amended by E.O. 13268 of July 2, 2002, E.O. 13284 of January 23, 2003, and E.O. 13886 of September 9, 2019, (“E.O. 13224”), I hereby determine that the person known as Katibat al Tawhid wal Jihad (also known as KTJ, Khatiba al-Tawhid wal-Jihad, Jannat Oshiklari, and Tawhid and Jihad Brigade) is a foreign person that has committed and poses a significant risk of committing acts of terrorism that threaten the security of U.S. nationals or the national security, foreign policy, or economy of the United States.

https://www.federalregister.gov/documents/2022/04/06/2022-07304/designation-of-katibat-al-tawhid-wal-jihad-as-a-specially-designated-global-terrorist

 

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April 7, 2022: The U.S. Department Of State targets Russia’s largest shipbuilding company, subsidiaries, and board members. United Shipbuilding Corporation (USC) is a major Russian State-Owned Enterprise (SOE) responsible for developing and building the Russian Navy’s warships. USC is responsible for the construction of almost all of Russia’s warships, as well as those built for foreign customers. Along with re-designating USC, the Department of State designated 28 subsidiaries and eight board members. These actions were also taken pursuant to E.O. 14024. See the entry below for OFAC’s designation of this entity and persons as Specially Designated Nationals and Blocked Persons.

https://www.state.gov/additional-state-department-designations-targeting-russian-state-owned-defense-shipbuilding-enterprise/

 

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

 

April 4, 2022: 87 Fed. Reg. 20295: In response to the Russian Federation's (Russia's) further invasion of Ukraine on February 24, 2022, the Department of Commerce, Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) by adding 120 entities under 120 entries to the Entity List. These 120 entities have been determined by the U.S. Government to be acting contrary to the national security interests or foreign policy of the United States and are listed on the Entity List under the destinations of Belarus and Russia.

 

The following entities from Belarus were added to the Entity List:

  • 140 Repair Plant JSC;
  • 558 Aircraft Repair Plant JSC;
  • 2566 Radioelectronic Armament Repair Plant JSC;
  • AGAT—Control Systems—Managing Company of Geoinformation Control Systems Holding JSC;
  • Agat-Electromechanical Plant OJSC;
  • AGAT-SYSTEM;
  • ATE-Engineering LLC;
  • BelOMO Holding;
  • Belspetsvneshtechnika SFTUE;
  • BSVT-New Technologies;
  • CJSC Beltechexport;
  • Department of Internal Affairs of the Gomel Region Executive Committee;
  • Internal Troops of The Ministry of Internal Affairs of the Republic of Belarus;
  • JSC Transaviaexport Airlines;
  • KGB Alpha; Kidma Tech OJSC;
  • Minotor-Service; Minsk Wheeled Tractor Plant;
  • Oboronnye Initsiativy LLC;
  • OJS KB Radar Managing Company;
  • Peleng JSC;
  • State Authority for Military Industry of the Republic of Belarus;
  • State Security Committee of the Republic of Belarus; and
  • Volatavto OJSC.

 

The following entities from Russia were added to the Entity List:

  • 5th Shipyard;
  • Alagir Resistor Factory;
  • All-Russian Scientific-Research Institute Etalon JSC;
  • Almaz JSC;
  • Dolgoprudniy Design Bureau of Automatics;
  • Electronic Computing Technology Scientific-Research Center;
  • Electrosignal JSC;
  • Inteltech PJSC;
  • Joint Stock Company NPO Elektromechaniki;
  • Kulon Scientific-Research Institute JSC;
  • Lutch Design Office JSC;
  • Meteor Plant JSC;
  • Moscow Communications Research Institute JSC;
  • Moscow Order of the Red Banner of Labor Research Radio Engineering Institute JSC;
  • Omsk Production Union Irtysh JSC;
  • Omsk Scientific-Research Institute of Instrument Engineering JSC;
  • Optron JSC;
  • Polyot Chelyabinsk Radio Plant JSC;
  • Pskov Distance Communications Equipment Plant;
  • Radiozavod JSC;
  • Razryad JSC;
  • Research Production Association Mars;
  • Ryazan Radio-Plant;
  • Scientific-Production Association and Scientific-Research Institute of Radio-Components;
  • Scientific-Production Enterprise Almaz JSC;
  • Scientific-Production Enterprise “Kant”;
  • Scientific Production Enterprise “Radiosviaz”;
  • Scientific-Production Enterprise “Svyaz”;
  • Scientific-Production Enterprise Volna;
  • Scientific-Production Enterprise Vostok JSC;
  • Scientific-Research Institute “Argon”;
  • Scientific-Research Institute of Automated Systems and Communications Complexes Neptune JSC; Scientific Research Institute of Communication Management Systems;
  • Scientific Research Institute Ferrite-Domen;
  • Special Design and Technical Bureau for Relay Technology;
  • Tactical Missile Corporation, 711 Aircraft Repair Plant (711 ARZ);
  • Tactical Missile Corporation, AO GNPP “Region”;
  • Tactical Missile Corporation, AO TMKB “Soyuz”;
  • Tactical Missile Corporation, Azov Optical and Mechanical Plant;
  • Tactical Missile Corporation, “Central Design Bureau of Automation”;
  • Tactical Missile Corporation, Concern “MPO—Gidropribor”;
  • Tactical Missile Corporation, Joint Stock Company Avangard;
  • Tactical Missile Corporation, Joint Stock Company Concern Granit-Electron;
  • Tactical Missile Corporation, Joint Stock Company Elektrotyaga;
  • Tactical Missile Corporation, Joint Stock Company GosNIIMash;
  • Tactical Missile Corporation JSC “KRASNY GIDROPRESS”;
  • Tactical Missile Corporation, Joint Stock Company PA Strela;
  • Tactical Missile Corporation, Joint Stock Company “Plant Dagdiesel”;
  • Tactical Missile Corporation, Joint Stock Company Plant Kulakov;
  • Tactical Missile Corporation, Joint Stock Company Ravenstvo;
  • Tactical Missile Corporation, Joint Stock Company Ravenstvo-service;
  • Tactical Missile Corporation, Joint-Stock Company “Research Center for Automated Design”;
  • Tactical Missile Corporation, Joint Stock Company “Salute”;
  • Tactical Missile Corporation, Joint Stock Company Saratov Radio Instrument Plant;
  • Tactical Missile Corporation Joint Stock Company “Scientific Research Institute of Marine Heat Engineering”;
  • Tactical Missile Corporation, Joint Stock Company Severny Press;
  • Tactical Missile Corporation, Joint Stock Company “State Machine Building Design Bureau “Vympel” By Name I.I. Toropov”;
  • Tactical Missile Corporation, Joint Stock Company “URALELEMENT”;
  • Tactical Missile Corporation, KB Mashinostroeniya;
  • Tactical Missile Corporation, NPO Electromechanics;
  • Tactical Missile Corporation, NPO Lightning;
  • Tactical Missile Corporation, Petrovsky Electromechanical Plant “Molot”;
  • Tactical Missile Corporation, PJSC ANPP Temp Avia;
  • Tactical Missile Corporation, PJSC “MBDB ISKRA”;
  • Tactical Missile Corporation, Raduga Design Bureau;
  • Tactical Missile Corporation, RKB Globus;
  • Tactical Missile Corporation, Smolensk Aviation Plant;
  • Tactical Missile Corporation, TRV Engineering;
  • Tactical Missile Corporation, Ural Design Bureau “Detal”;
  • Tactical Missile Corporation, Zvezda-Strela Limited Liability Company;
  • United Shipbuilding Corporation “Production Association Northern Machine Building Enterprise”;
  • 46th TSNII Central Scientific Research Institute;
  • All Russia Scientific Research Institute of Optical Physical Measurements;
  • Arzam Scientific Production Enterprise Temp Avia;
  • Automated Procurement System for State Defense Orders, LLC;
  • Engineering Center Moselectronproekt;
  • Etalon Scientific and Production Association;
  • Evgeny Krayushin;
  • Far-East Factory Zvezda;
  • Federal Center for Dual-Use Technology (FTsDT) Soyuz;
  • Foreign Trade Association Mashpriborintorg; Ineko LLC;
  • Informakustika JSC;
  • Institute of High Energy Physics;
  • Institute of Theoretical and Experimental Physics;
  • ISE SO RAN Institute of High-Current Electronics;
  • JSC Energiya, Kaluga Scientific-Research Institute of Telemechanical Devices JSC;
  • OJSC Pella Shipyard;
  • Scientific Production Center Vigstar JSC;
  • Scientific-Production Enterprise Salyut JSC;
  • Scientific-Research Institute and Factory Platan;
  • Special Design Bureau Salute JSC;
  • Tambov Plant (TZ) “October”;
  • Turayev Machine Building Design Bureau Soyuz; and
  • Zhukovskiy Central Aerohydrodynamics Institute (TsAGI).

https://www.federalregister.gov/documents/2022/04/07/2022-07284/additions-of-entities-to-the-entity-list

 

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April 7, 2022: The U.S. Department of Commerce, Bureau of Industry and Security (BIS) issued orders denying the export privileges of three Russian Airlines – Aeroflot, Azur Air, and UTair – due to ongoing export violations related to comprehensive export controls on Russia imposed by the Commerce Department.  These three Temporary Denial Orders (TDOs) terminate the right of these airlines to participate in transactions subject to the Export Administration Regulations (EAR), including exports and reexports from the United States. These TDOs are issued for 180-days and may be renewed. https://www.commerce.gov/news/press-releases/2022/04/bis-takes-enforcement-actions-against-three-russian-airlines-operating

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April 7, 2022: 87 Fed. Reg. 20295: In response to the Russian Federation's (Russia's) further invasion of Ukraine on February 24, 2022, the Department of Commerce is amending the Export Administration Regulations (EAR) by adding 120 entities under 120 entries to the Entity List. These 120 entities have been determined by the U.S. Government to be acting contrary to the national security interests or foreign policy of the United States and will be listed on the Entity List under the destinations of Belarus and Russia. See the following link for a listing of the 120 entities added to the Entity List. https://www.federalregister.gov/documents/2022/04/07/2022-07284/additions-of-entities-to-the-entity-list

 

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April 8, 2022: 87 Fed. Reg. 22130: In response to the Russian Federation’s (Russia) ongoing aggression in Ukraine following its further invasion of the country, as substantially enabled by Belarus, the U.S. Department of Commerce, Bureau of Industry and Security (BIS) expanded license requirements for Russia and Belarus under the Export Administration Regulations (EAR) to all items on the Commerce Control List (CCL), which added CCL Categories 0 – 2 to previous license requirements for CCL Categories 3 - 9. It also removes license exception eligibility for aircraft registered in, owned or controlled by, or under charter or lease by Belarus or a national of Belarus. https://www.bis.doc.gov/index.php/documents/federal-register-notices-1/2962-expansion-russia-and-belarus-rin-0694-ai83-4142022-effec482022-2022-07937/file

 

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April 14, 2022: The U.S. Commerce Department, through its Bureau of Industry and Security (BIS), publicly identified 10 additional aircraft likely in violation of U.S. export controls, including the first seven Belarusian owned/operated commercial aircraft identified since restrictions on Belarus were tightened via regulation effective on April 8, 2022. BIS is also updating the tail numbers of 32 planes already on the list to account for the planes’ purported re-registration in Russia. BIS has also authorized two planes to leave Russia and they will be removed from the list. The aircraft identified on the list have flown into Russia and/or Belarus in apparent violation of the Export Administration Regulations (EAR). See a list of aircraft at the following link:

https://www.commerce.gov/news/press-releases/2022/04/commerce-department-identifies-first-belarusian-and-more-russian

 

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April 20, 2022: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) denied the export privileges of Arnoldo Vidaurri (Vidaurri). Vidaurri was convicted of violating 18 U.S.C. § 554(a)  for fraudulently and knowingly exporting and sending, from the United States to Mexico, two Ruger LCP 380 pistols and 100 rounds of ammunition, without a Department of State export license or other written authorization, in violation of 18 U.S.C. § 554.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1367-e2719/file

 

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

 

April 1, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned five entities for providing support to the Democratic People’s Republic of Korea’s (DPRK), a.k.a. North Korea, development of weapons of mass destruction (WMD) and ballistic missile programs in violation of multiple United Nations Security Council resolutions (UNSCRs).

 

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

 

  • Hapjanggang Trading Corporation;
  • Korea Rounsan Trading Corporation;
  • Ministry of Rocket Industry;
  • Sungnisan Trading Corporation; And
  • Unchon Trading Corporation.

https://home.treasury.gov/news/press-releases/jy0695 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220401

 

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April 5, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the world’s largest and most prominent darknet market, Hydra Market (Hydra), in a coordinated international effort to disrupt the proliferation of malicious cybercrime services, dangerous drugs, and other illegal offerings available through the Russia-based site. The operation targeting Hydra was a collaborative initiative joined by the U.S. Department of Justice, Federal Bureau of Investigations, Drug Enforcement Administration, Internal Revenue Service Criminal Investigation, and Homeland Security Investigations. This action was enhanced by international cooperation with the German Federal Criminal Police, who shut down Hydra servers in Germany and seized $25 million worth of bitcoin.

 

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

 

  • Garantex Europe Ou of Estonia and Russia;
  • Hydra Market including its various websites of Russia. See the following links for the list of websites.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220405 and https://home.treasury.gov/news/press-releases/jy0701

 

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April 6, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took major steps to degrade the economy of the Russian Federation in response to Russia’s continued brutal war against Ukraine and atrocities against Ukrainian citizens. Treasury is imposing full blocking sanctions on Sberbank, Russia’s largest state-owned bank, and Alfa-Bank, Russia’s largest private bank. Treasury is also targeting family members of President Vladimir Putin (Putin) and Foreign Minister Sergey Lavrov (Lavrov), as well as Russian Security Council members who are complicit in the war against Ukraine.

 

OFAC has issued Russia-related General License 8B, General License 9B, General License 10B, General License 21, General License 22, and General License 23, as described below.

 

General License 8B: 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, June 24, 2022:

(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.

https://home.treasury.gov/system/files/126/russia_gl8b.pdf

 

General License 9B: All transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), that are ordinarily incident and necessary to dealings in debt or equity of one or more of the following entities issued prior to February 24, 2022 (“Tranche 1 debt or equity”) are authorized through 12:01 a.m. eastern daylight time, May 25, 2022, provided that any divestment or transfer of, or facilitation of divestment or transfer of, Tranche 1 debt or equity must be to a non-U.S. person:

(i) State Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank; (ii) Public Joint Stock Company Bank Financial Corporation Otkritie;

(iii) Sovcombank Open Joint Stock Company;

(iv) Public Joint Stock Company Sberbank of Russia;

(v) VTB Bank Public Joint Stock Company; or

(vi) 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 the RuHSR that are ordinarily incident and necessary to dealings in debt or equity of Joint Stock Company Alfa-Bank (“Alfa-Bank”) or any entity in which Alfa-Bank owns, directly or indirectly, a 50 percent or greater interest, issued prior to April 6, 2022 (“Alfa-Bank debt or equity”) are authorized through 12:01 a.m. eastern daylight time, June 30, 2022, provided that any divestment or transfer of, or facilitation of divestment or transfer of, Alfa-Bank debt or equity must be to a non-U.S. person.

https://home.treasury.gov/system/files/126/russia_gl9b.pdf

 

General License 10B: All transactions prohibited by the RuHSR that are ordinarily incident and necessary to the wind down of derivative contracts entered into prior to 4:00 p.m. eastern standard time, February 24, 2022, that:

(i) include one of the following entities (together, the “Tranche 1 entities”) as a counterparty or

(ii) are linked to debt or equity of a Tranche 1 entity are authorized through 12:01 a.m. eastern daylight time, May 25, 2022, provided that any payments to a blocked person are made into a blocked account:

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

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

(iii) Sovcombank Open Joint Stock Company;

(iv) Public Joint Stock Company Sberbank of Russia;

(v) VTB Bank Public Joint Stock Company; or

(vi) 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 the RuHSR that are ordinarily incident and necessary to the wind down of derivative contracts entered into prior to 4:00 p.m. eastern daylight time, April 6, 2022, that:

(i) include Joint Stock Company Alfa-Bank (“Alfa-Bank”) or any entity in which Alfa-Bank owns, directly or indirectly, a 50 percent or greater interest (collectively, “Alfa-Bank entities”) as a counterparty; or

(ii) are linked to debt or equity of an Alfa-Bank entity are authorized through 12:01 a.m. eastern daylight time, June 30, 2022, provided that any payments to a blocked person are made into a blocked account. (3) Debits to accounts on the books of a U.S. financial institution are authorized to the extent ordinarily incident and necessary to effect the transactions authorized in this general license.

 

All transactions 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, that are ordinarily incident and necessary to the wind-down of derivative contracts, repurchase agreements, or reverse repurchase agreements entered into prior to 12:01 a.m. eastern standard time, March 1, 2022, that include the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation (collectively, “Directive 4 entities”) as a counterparty are authorized through 12:01 a.m. eastern daylight time, May 25, 2022. https://home.treasury.gov/system/files/126/russia_gl10b.pdf

 

General License 21: U.S. persons are authorized to engage in all transactions ordinarily incident and necessary to the wind-down of Sberbank CIB USA, Inc., or any entity in which Sberbank CIB USA, Inc. owns, directly or indirectly, a 50 percent or greater interest, that are prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including the processing and payment of salaries, severance, and expenses; payments to vendors and landlords; and closing of accounts, through 12:01 a.m. eastern daylight time, June 7, 2022. https://home.treasury.gov/system/files/126/russia_gl21.pdf

 

General License 22: All transactions ordinarily incident and necessary to the wind-down of transactions involving Public Joint Stock Company Sberbank of Russia (“Sberbank”) or any entity in which Sberbank 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 daylight time, April 13, 2022. https://home.treasury.gov/system/files/126/russia_gl22.pdf

 

General License 23: All transactions ordinarily incident and necessary to the wind-down of transactions involving Joint Stock Company AlfaBank (“Alfa-Bank”) or any entity in which Alfa-Bank owns, directly or indirectly, a 50 percent or greater interest that is prohibited by Executive Order 14024 are authorized through 12:01 a.m. eastern daylight time, May 6, 2022. https://home.treasury.gov/system/files/126/russia_gl23.pdf

 

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

 

  • Katerina Vladimirovna Tikhonova, Vladmir Putin’s daughter, of Russia;
  • Maria Vladimirovna Vorontsova, Vladmir Putin’s daughter, of Russia;
  • Beglov, Aleksandr Dmitrievich of Russia and Azerbeijan;
  • Bulavin, Vladimir Ivanovich of Russia;
  • Chayka, Yuriy Yakovlevich of Russia;
  • Chuychenko, Konstantin Anatolyevich of Russia;
  • Gutsan, Aleksandr Vladimirovich of Russia;
  • Komarov, Igor Anatolyevich of Russia;
  • Lavrova, Maria Aleksandrovna, Sergey Lavrov’s wife, of Russia;
  • Medvedev, Dmitry Anatolievich of Russia;
  • Mishustin, Mikhail Vladimirovich of Russia;
  • Nurgaliev, Rashid Gumarovich of Russia and Kazakhstan;
  • Seryshev, Anatoliy Anatolievich of Russia;
  • Siluanov, Anton Germanovich of Russia;
  • Sobyanin, Sergey Semyonovich of Russia;
  • Trutnev, Yuriy Petrovich of Russia;
  • Ustinov, Vladimir Vasilyevich of Russia;
  • Vaino, Anton Eduardovich of Russia;
  • Vinokurova, Yekaterina Sergeyevna of Russia and the United States, Sergey Lavrov’s daughter;
  • Yakushev, Vladimir Vladimirovich of Russia.

 

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

 

  • Alfa Capital Markets Ltd, of Cyprus;
  • Alfa-Direct of Russia;
  • Alfa-Forex LLC of Russia;
  • Alfa-Lizing OOO of Russia;
  • Amsterdam Trade Bank NV of The Netherlands;
  • Arimero Holding Limited, of Cyprus;
  • Auction Limited Liability Company of Russia;
  • Bankruptcy Technology Center Limited Liability Company of Russia;
  • Barus Limited Liability Company of Russia;
  • IKS Joint Stock Company of Russia;
  • Insurance Company Sberbank Insurance Limited Liability Company of Russia;
  • Insurance Company Sberbank Life Insurance Limited Liability Company of Russia;
  • Joint Stock Company Alfa-Bank of Russia;
  • Joint Stock Company Business Environment of Russia;
  • Joint Stock Company Loyalty Programs Center of Russia;
  • Joint Stock Company Raschetniye Resheniya of Russia;
  • Joint Stock Company Sberbank of Russia and the Ukraine;
  • Joint Stock Company Sberbank Automated Trade System of Russia;
  • Joint Stock Company Sberbank Leasing of Russia;
  • Joint Stock Company Sberbank Private Pension Fund of Russia;
  • Joint Stock Company Sberbank Technologies of Russia;
  • Joint Stock Company Strategy Partners Group of Russia;
  • Joint Stock Company United Credit Bureau of Russia;
  • Limited Liability Company Active Business Consult of Russia;
  • Limited Liability Company Digital Technologies of Russia;
  • Limited Liability Company Korus Consulting CIS of Russia;
  • Limited Liability Company Market Fund Administration of Russia;
  • Limited Liability Company Promising Investments of Russia;
  • Limited Liability Company Rutarget of Russia;
  • Limited Liability Company Sberbank Capital of Russia;
  • Limited Liability Company Sberbank CIB Holding of Russia;
  • Limited Liability Company Sberbank Factoring of Russia;
  • Limited Liability Company Sberbank Financial Company of Russia;
  • Limited Liability Company Sberbank Insurance Broker of Russia;
  • Limited Liability Company Sberbank Investments of Russia;
  • Limited Liability Company Sberbank Real Estate Center of Russia;
  • Limited Liability Company Sberbank Service of Russia;
  • Limited Liability Company Yoomoney of Russia;
  • Open Joint Stock Company BPS-Sberbank of Russia;
  • Public Joint Stock Company Sberbank Of Russia of Russia;
  • SB Securities SA, of Luxembourg;
  • SBER Legal Limited Liability Company of Russia;
  • SBER Vostok Limited Liability Partnership of Russia;
  • Sberbank Europe AG, of Austria;
  • Setelem Bank Limited Liability Company of Russia;
  • Sovremennye TekhnologII Limited Liability Company of Russia;
  • Subsidiary Bank Alfa-Bank JSC of Russia;
  • Subsidiary Bank Sberbank Of Russia Joint Stock Company of Kazakhstan;
  • Tekhnologii Kreditovaniya Limited Liability Company of Russia;
  • Vydayushchiesya Kredity Microcredit Company Limited Liability Company of Russia.

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

 

  • Lady Leila (UCGL) of Russia;
  • Lady Rania (UBBO9) of Russia;
  • Lady Sevda (UBWL7) of Russia;
  • Sv Konstantin (UBUS4) of Russia;
  • Sv Nikolay (UBTU6) of Russia.

 

https://home.treasury.gov/news/press-releases/jy0705 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220406 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220406_33

 

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April 7, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Alrosa, a Russian state-owned enterprise (SOE) and the world’s largest diamond mining company, which is also responsible for 90 percent of Russia’s diamond mining capacity. The Department of State also redesignated Joint Stock Company United Shipbuilding Corporation (USC), as well as its subsidiaries and board members. USC is a Russian SOE that develops and constructs the majority of the Russian military’s warships, likely including many of those used to bombard Ukraine’s cities and harm Ukraine’s citizens. These actions were taken pursuant to Executive Order (E.O.) 14024. Through these designations, Treasury is cutting off additional sources of support and revenue for the Government of the Russian Federation (GoR) to wage its unprovoked war against Ukraine.

OFAC also issued Russia-related General License 9C, General License 10C, General License 21A, General License 24, and General License 25.

 

General License 9C: All transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), that are ordinarily incident and necessary to dealings in debt or equity of one or more of the following entities issued prior to February 24, 2022 (“Russian financial institution debt or equity”) are authorized through 12:01 a.m. eastern daylight time, May 25, 2022, provided that any divestment or transfer of, or facilitation of divestment or transfer of, Russian financial institution debt or equity must be to a non-U.S. person:

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

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

(iii) Sovcombank Open Joint Stock Company;

(iv) Public Joint Stock Company Sberbank of Russia;

(v) VTB Bank Public Joint Stock Company; or

(vi) 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.

https://home.treasury.gov/system/files/126/russia_gl9c.pdf

 

General License 10C: All transactions prohibited by the RuHSR, that are ordinarily incident and necessary to the wind down of derivative contracts entered into prior to 4:00 p.m. eastern standard time, February 24, 2022, that (i) include one of the following entities (collectively, the “Russian financial institution entities”) as a counterparty or (ii) are linked to debt or equity of a Russian financial institution entity are authorized through 12:01 a.m. eastern daylight time, May 25, 2022, provided that any payments to a blocked person are made into a blocked account:

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

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

(iii) Sovcombank Open Joint Stock Company;

(iv) Public Joint Stock Company Sberbank of Russia;

(v) VTB Bank Public Joint Stock Company; or

(vi) 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.

https://home.treasury.gov/system/files/126/russia_gl10c.pdf

 

General License 21A: U.S. persons are authorized to engage in all transactions ordinarily incident and necessary to the wind-down of Sberbank CIB USA, Inc. or Alrosa USA, Inc. (collectively, the “blocked entities”), or any entity in which the blocked entities own, directly or indirectly, a 50 percent or greater interest, that are prohibited by the RuHSR, including the processing and payment of salaries, severance, and expenses; payments to vendors and landlords; and closing of accounts, through 12:01 a.m. eastern daylight time, June 7, 2022.

https://home.treasury.gov/system/files/126/russia_gl21a.pdf

 

General License 24: All transactions ordinarily incident and necessary to the wind-down of transactions involving Public Joint Stock Company Alrosa (“Alrosa”) or any entity in which Alrosa owns, directly or indirectly, a 50 percent or greater interest that is prohibited by Executive Order 14024 are authorized through 12:01 a.m. eastern daylight time, May 7, 2022. https://home.treasury.gov/system/files/126/russia_gl24.pdf

 

General License 25: All transactions ordinarily incident and necessary to the receipt or transmission of telecommunications involving the Russian Federation that are prohibited by the RuHSR, are authorized. The exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, wherever located, to the Russian Federation of services, software, hardware, or technology incident to the exchange of communications over the internet, such as instant messaging, videoconferencing, chat and email, social networking, sharing of photos, movies, and documents, web browsing, blogging, web hosting, and domain name registration services, that is prohibited by the RuHSR, is authorized.

https://home.treasury.gov/system/files/126/russia_gl25.pdf

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

 

  • Lavrishchev, Andrey Vasilyevich of Russia;
  • Markelov, Vitaliy Anatolyevich of Russia;
  • Poltavchenko, Georgiy Sergeyevich of Russia;
  • Pospelov, Vladimir Yakovlevich of Russia;
  • Rakhmanov, Aleksey Lvovich of Russia;
  • Ryazantsev, Oleg Nikolayevich of Russia;
  • Shestakov, Ilya Vasilyevich of Russia;
  • Shishkin, Andrei Nikolaevich of Russia.

 

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

 

  • Almaz Central Marine Design Bureau Joint Stock Company of Russia;
  • Baltic Shipyard JSC of Russia;
  • Federal State Unitary Enterprise Kronshtadtskyy Morskoy Factory Minoborony Rossii of Russia;
  • Joint Public Stock Company Nevskoe Design Bureau of Russia;
  • Joint Stock Company 10 Ordena Trudovogo Krasnogo Znameni Dockyard of Russia;
  • Joint Stock Company Admiralty Shipyards of Russia;
  • Joint Stock Company Baltic Shipbuilding Plant Yantar of Russia;
  • Joint Stock Company Central Design Bureau For Marine Engineering Rubin of Russia;
  • Joint Stock Company Design Office For Shipbuilding Vympel of Russia;
  • Joint Stock Company Khabarovsk Shipbuilding Yard of Russia;
  • Joint Stock Company Northern Production Association Arktika of Russia;
  • Joint Stock Company Production Association Northern Machine-Building Enterprise of Russia;
  • Joint Stock Company Research Design And Technological Bureau Onega of Russia;
  • Joint Stock Company Shipbuilding Plant Lotos of Russia;
  • Joint Stock Company Shiprepairing Center Zvyozdochka of Russia;
  • Joint Stock Company Sredne-Nevsky Shipyard of Russia;
  • Joint Stock Company Sudoexport of Russia;
  • Joint Stock Company Svetlovsky Enterprise Era of Russia;
  • Joint Stock Company The St. Petersburg's Sea Bureau Of Mechanical Engineering Malachite of Russia;
  • JSC 33 Shipyard of Russia;
  • Limited Liability Company Kaspiyskaya Energiya Administration Office of Russia;
  • Public Joint Stock Company Alrosa of Russia;
  • Public Joint Stock Company Amursky Shipbuilding Plant of Russia;
  • Public Joint Stock Company Krasnoye Sormovo Shipyard of Russia;
  • Public Joint Stock Company Proletarsky Zavod of Russia;
  • Public Joint Stock Company Shipbuilding Plant Severnaya Verf of Russia;
  • Public Joint Stock Company Vyborg Shipyard of Russia;
  • Severnoe Design Bureau Joint Stock Company of Russia;
  • United Shipbuilding Corporation Jsc Aysberg Central Design Building of Russia.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220407 and https://home.treasury.gov/news/press-releases/jy0707

 

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April 11, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated seven individuals and one entity across four countries in the Western Balkans pursuant to Executive Order (E.O.) 14033. This is the second action OFAC has taken under E.O. 14033 targeting persons who threaten the stability of the region through corruption, criminal activity, and other destabilizing behavior. This action reinforces Treasury’s commitment to promoting accountability for actors in the Western Balkans region engaged in destabilizing and corrupt behavior. Such corrupt behavior undermines the rule of law and economic growth, and it deprives people in these countries of opportunities and stability.

 

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

 

  • Gruevski, Nikola of North Macedonia;
  • Marovic, Svetozar of Montenegro;
  • Mijalkov, Sasho of North Macedonia;
  • Ndroqi, Ylli Bahri of Alabania;
  • Rakipi, Aqif of Albania;
  • Sarajlic, Asim of Bosnia and Herzegovina;
  • Tadic, Gordana of Bosnia and Herzegovina.

 

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

 

  • C.I.C. KFT. of Hungary.

 

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

 

  • Arsenovic, Djojo of Bosnia-Herzegovin;
  • Bala, Haradin of Serbia and Montenegro;
  • Borovnica, Goran of the Balkans;
  • Cengic, Hasan of Bosnia-Herzegovina;
  • Deronjic, Miroslav of Bosnia-Herzegovina;
  • Gashi, Sabit of Serbia and Montenegro;
  • Hyseni, Xhemajl of Macedonia;
  • Josipovic, Drago; of Bosnia-Herzegovina;
  • Marinic, Zoran of Bosnia-Herzegovina;
  • Mrksic, Milan of Croatia;
  • Mucic, Zdravko of the Balkans;
  • Musliu, Jonuz of Serbia and Montenegro;
  • Nikolic, Drago of Bosnia-Herzegovina;
  • Ojdanic, Dragoljub of Serbia and Montenegro;
  • Rushiti, Sait of the Balkans;
  • Ruxheti, Sait of the Balkans;
  • Strugar, Pavle of Serbia and Montenegro;
  • Talic, Momir of Bosnia-Herzegovina;
  • Todorovic, Stevan of Bosnia-Herzegovina;
  • Zelenovic, Dragan of the Balkans;
  • Beara, Ljubisa of Bosnia and Herzegovina;
  • Hadzic, Goran of Croatia.

https://home.treasury.gov/news/press-releases/jy0712 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220411

 

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April 11, 2022:  The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated the Kinahan Organized Crime Group (KOCG) along with seven of its key members, including its Irish leaders Christopher Vincent Kinahan Senior, Daniel Joseph Kinahan, Christopher Vincent Kinahan Junior, and three associated businesses pursuant to Executive Order (E.O.) 13581, “Blocking Property of Transnational Criminal Organizations,” as amended. Today’s action is the result of close collaboration between OFAC, the Drug Enforcement Administration, the U.S. Department of State, U.S. Customs and Border Protection, Ireland’s national police force (An Garda Síochána), the United Kingdom’s National Crime Agency, and the European Union Agency for Law Enforcement Cooperation.

 

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

 

  • Clancy, Bernard Patrick of Spain; Dubai, United Arab Emirates; and Ireland;
  • Dixon, Ian Thomas of the United Arab Emirates and Ireland;
  • Kinahan Junior, Christopher Vincent of the United Arab Emirates and Ireland;
  • Kinahan, Christopher Vincent of the United Arab Emirates, the United Kingdom, and Ireland;
  • Kinahan, Daniel Joseph of the United Arab Emirates, Spain, the United Kingdom, and Ireland;
  • Mcgovern, Sean Gerard of the United Arab Emirates and Ireland;
  • Morrissey, John Francis of Spain and Ireland.

 

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

 

  • Ducashew General Trading LLC of the United Arab Emirates;
  • Hoopoe Sports LLC of the United Arab Emirates;
  • Kinahan Organized Crime Group of Ireland, the United Kingdom, Spain, The Netherlands, and the United Arab Emirates;
  • Nero Drinks Company Limited of the United Kingdom and Spain.

https://home.treasury.gov/news/press-releases/jy0713 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220411_33

 

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April 12, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 26. This General License authorizes all transactions ordinarily incident and necessary to the wind-down of transactions involving Joint Stock Company SB Sberbank Kazakhstan or Sberbank Europe AG (collectively, “the blocked Sberbank subsidiaries”), or any entity in which the blocked Sberbank subsidiaries own, 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 daylight time, July 12, 2022.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220412

 

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April 14, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) made  following changes to the SDN List:

 

  • Lazarus Group was listed as a secondary sanctions risk: North Korea Sanctions Regulations, sections 510.201 and 510.210; Transactions Prohibited For Persons Owned or Controlled By U.S. Financial Institutions: North Korea Sanctions Regulations section 510.214. LAZARUS GROUP is a North Korean hacker group that is linked to the recent Ronin bridge hack.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220414 and https://news.bitcoin.com/ofac-update-claims-ronin-hack-is-tethered-to-north-koreas-hacker-syndicate-lazarus-group/

 

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April 19, 2022:  The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 27 "Certain Transactions in Support of Nongovernmental Organizations’ Activities." General License 27 authorizes all transactions ordinarily incident and necessary to the activities described below by non-governmental organizations that are prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized, provided that the only involvement of blocked persons is the processing of funds by financial institutions blocked pursuant to Executive Order (E.O.) 14024. (b) The activities are as follows:

(1) Activities to support humanitarian projects to meet basic human needs in Ukraine or the Russian Federation, including drought and flood relief; food, nutrition, and medicine distribution; the provision of health services; assistance for vulnerable or displaced populations, including individuals with disabilities and the elderly; and environmental programs;

(2) Activities to support democracy-building in Ukraine or the Russian Federation, including activities to support rule of law, citizen participation, government accountability, and transparency, human rights and fundamental freedoms, access to information, and civil society development projects;

(3) Activities to support education in Ukraine or the Russian Federation, including combating illiteracy, increasing access to education, international exchanges, and assisting education reform projects;

(4) Activities to support non-commercial development projects directly benefiting the people of Ukraine or the Russian Federation, including those related to health, food security, and water and sanitation; and (5) Activities to support environmental and natural resource protection in Ukraine or the Russian Federation, including the preservation and protection of threatened or endangered species, responsible and transparent management of natural resources, and the remediation of pollution or other environmental damage.

https://home.treasury.gov/system/files/126/russia_gl27.pdf and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220419

 

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April 20, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) has issued Russia-related General License 28 and General License 29.

In addition, the following names have been added or updated to OFAC's list of Specially Designated Nationals.

 

General License 28: Authorizes 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 daylight time, October 20, 2022. 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 in paragraph (a) of this general license. https://home.treasury.gov/system/files/126/russia_gl28.pdf

 

General License 29: Authorizes all transactions ordinarily incident and necessary to the wind-down of 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 is prohibited by Executive Order (E.O.) 14024, are authorized through 12:01 a.m. eastern daylight time, May 20, 2022. https://home.treasury.gov/system/files/126/russia_gl29_0.pdf

 

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) also designated entities and individuals involved in attempts to evade sanctions imposed by the United States and its international partners on Russia. OFAC designated Russian commercial bank Transkapitalbank and a global network of more than 40 individuals and entities led by U.S.-designated Russian oligarch Konstantin Malofeyev, including organizations whose primary mission is to facilitate sanctions evasion for Russian entities. OFAC also designated companies operating in Russia’s virtual currency mining industry, reportedly the third-largest in the world. This is the first time Treasury has designated a virtual currency mining company.

 

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

 

  • Alekseev, Mikhail Yurevich of Russia;
  • Cherkasova, Nadia Narimanovna of Russia;
  • Emelyanova, Svetlana Petrovna of Russia;
  • Gadetskiy, Yevgeniy Yuryevich of Russia;
  • Goldfinch, Paul Andrew of Russia and New Zealand;
  • Golikov, Andrey Fedorovich of Russia;
  • Karachinskiy, Anatoly Mikhailovich of Russia;
  • Kolychev, Vladimir Vladimirovich of Russia;
  • Kremleva, Irina Vladimirovna of Russia;
  • Kupriyanov, Alexey Aleksandrovich of Russia;
  • Kuzmin, Pavel Vladimirovich of Russia;
  • Leshchenko, Mikhail Aleksandrovich of Russia;
  • Levin, Dmitriy Olegovich of Russia;
  • Malofeyev, Kirill Konstantinovich of Russia;
  • Markov, Ilya Anatolyevich of Russia;
  • Melikov, Nikita of Russia;
  • Nechiporuk, Roman Viktorovich of Russia;
  • Nesterenko, Tatyana Gennadevna of Russia;
  • Nikolaev, Viktor Andreevich of Russia;
  • Okulov, Aleksandr of Russia; Romania; United Arab Emirates; and Moldova;
  • Rusanov, Sergey Georgievich of Russia;
  • Samoylov, Artem of Russia;
  • Simanovskiy, Alexey Yurevich of Russia;
  • Subbotin, Alexey Anatolyevich of Russia;
  • Titova, Elena Borisovna of Russia;
  • Tyurina, Natalya Aleksandrovna of Russia;
  • Yakushev, Mikhail Ilich of Russia;
  • Yudayeva, Kseniya Valentinovna of Russia;
  • Zadornov, Mikhail Mikhaylovich of Russia.

 

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

 

  • Agent De Asigurare Lider Asig Societate Cu Raspundere Limitata of Moldova;
  • All-Russian Public Organization Society For The Promotion Of Russian Historical Development Tsargrad of Russia;
  • Analiticheski Tsentr Katekhon OOO of Russia;
  • Autonomous Noncommercial Organization For The Study And Development Of International Cooperation In The Economic Sphere International Agency Of Sovereign Development of Russia;
  • Bitriver AG of Switzerland;
  • Ekoferma Zareche OOO of Russia;
  • Imenie Tsargrad OOO of Russia;
  • Imperiya 19-31 OOO of Russia;
  • Joint Stock Company Investtradebank of Russia;
  • Joint Stock Company Marshal Global of Russia;
  • Kontur OOO of Russia;
  • Kurort Livadiya OOO of Russia;
  • Kurort Tsargrad Spas-Teshilovo OOO of Russia;
  • Limited Liability Company Russian Digital Solutions of Russia;
  • Limited Liability Company Vladeks of Russia;
  • Limited Liability Company Vladeks Kholding of Russia;
  • MGI PTE LTD of Singapore;
  • Okaf Trading Societatea Cu Raspundere Limitata of Moldova;
  • OOO Bitriver Rus of Rus