Updates Archives - Page 2 of 11 - FD Associates, Inc.

JUNE 2023 EXPORT CONTROL REGULATIONS UPDATES

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 National Emergency With Respect To Belarus

June 14, 2023: 88 Fed. Reg. 39109: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency with respect to Belarus declared in Executive Order 13405 of June 16, 2006, as expanded in scope by Executive Order No. 14038 of August 9, 2021.

https://www.federalregister.gov/documents/2023/06/14/2023-12873/continuation-of-the-national-emergency-with-respect-to-belarus

President Biden Continues The National Emergency With Respect To The Western Balkans

June 22, 2023: 88 Fed. Reg. 40683: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency declared in Executive Order 13219 of June 26, 2001, which was expanded in scope in Executive Order 14033, with respect to the Western Balkans.

https://www.federalregister.gov/documents/2023/06/22/2023-13424/continuation-of-the-national-emergency-with-respect-to-the-western-balkans

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President Biden Continues The National Emergency With Respect To North Korea

June 22, 2023: 88 Fed. Reg. 40681: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency declared in Executive Order 13466 of June 26, 2008, expanded in scope in Executive Order 13551 of August 30, 2010, addressed further in Executive Order 13570 of April 18, 2021, further expanded in scope in Executive Order 13687 of January 2, 2015, and under which additional steps were taken in Executive Order 13722 of March 15, 2016, and Executive Order 13810 of September 20, 2017, with respect to North Korea.

https://www.federalregister.gov/documents/2023/06/22/2023-13420/continuation-of-the-national-emergency-with-respect-to-north-korea

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

DDTC Name And Address Changes Posted To Website

June 2 through 28, 2023: 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 umlaut Consulting Engineering, S.L., Vía de los poblados 1, Parque Empresarial Alvento, 28033 Madrid, Spain to calle Dulce Chacón 55, 7a Planta, 28050 Madrid, Spain.
Change in name for Toshiba Electronics Engineering Corporation, Toshiba Electronic Systems Corporation, and Toshiba Electro-Wave Components Co., Ltd. to Toshiba Electronic Technologies Corporation due to merger.
Change in name and address for General Electric International, Inc., Explora Business Centre Stodulky, Praha 5, 158 00, Czech Republic to GE Aviation Czech s.r.o., Beranovych 65, Praha 9, 199 02, Czech Republic, and all locations in the Czech Republic due to reorganization.
Change in name and address for General Electric International, Inc., Rond Point Schuman 204, Brussels 1040, Belgium, to GE Europe NV, Rond Point Schuman 2-4, Brussels 1040, Belgium, and all locations in Belgium due to reorganization.
Change in name for Altran Deutschland S.A.S. & Co. KG to Capgemini Engineering Deutschland S.A.S. & Co. KG due to acquisition.
Change in name and address for Pennine Tools Aerospace Ltd., Unit 1, Ravenscroft Business Park, Jackdaw Road, Barnoldswick, Lancashire BB18 6DX, United Kingdom to Buoyancy Aerospace V1 Ltd. (dba Buoyancy Aerospace), Jackdaw Road, Barnoldswick, Lancashire BB18 6DX, United Kingdom due to merger.
Change in name and address for General Electric International, Inc., 204 Rond-Point du Pont de Sevres, Citylights, Boulogne-Billancourt 92100, France to GE Aviation Systems France SARL, 17 Avenue Didier Daurat Immeuble Socrate, Blagnac 31700, France, and all locations in France, due to corporate reorganization.
Change in name for General Electric International, Inc. (Netherlands Operations) to GE Aviation Netherlands B.V. due to reorganization.
Change in name for General Electric International, Inc. (Ireland Operations) to GE Management Services Ireland Limited due to corporate reorganization.
Change in Name for General Electric Company Polska Sp. z.o.o. to GE Aerospace Poland Sp. z.o.o. due to corporate reorganization.
Change in Address for Agile Space Industries, Inc., from 1334 Airport Rd., Durango, CO 81303, to 1514 Main Ave., Durango, CO 81301.
Change in Name for SPX Corporation to SPX Technologies, Inc.

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The Directorate Of Defense Trade Controls (DDTC) Updates Two Open General Licenses Issued in July 2022, Extending the Validity by Three Years

June 1, 2023: 33 FR 35992: The Department of State, Directorate of Defense Trade Controls (DDTC) published a notice in the Federal Register to inform the public that it published two updated open general licenses, which extend the validity period by two years. The update also addresses ITAR citations changed by the rewrite of Part 120 in the Fall of 2020.

Federal Register:: International Traffic in Arms Regulations: Reissuance and Update of Open General Licenses 1 and 2

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The Department of State Deploys New Renewal Fee Details Function In DECCS

June 26, 2023: The Department of State’s IT Modernization Team will deploy the new “Renewal Fee Details” functionality to the DECCS Registration application. This feature will be visible to Registration application users who fulfill the following criteria:

90 days or fewer remaining prior to the Registration expiration date;
Organization is subject to a Tier 2 or Tier 3 registration renewal fee**; and
Organization has at minimum one or more licenses “Approved” or “Approved with Provisos” in the twelve-month window ending 90 days before Registration expiration.

Registration tiers are based on the number of license applications submitted by the registrant. Tier 1 registrants are those submitting an initial registration application, registrants who have not submitted any license applications during the preceding 12 months, and non-profit registrants. The set fee for Tier 1 registrants is $2,250. Tier 2 registrants are those renewing their registration who have submitted 1-10 license applications during the preceding 12 months. The set fee for Tier 2 registrants is $2,750. Tier 3 registrants are those renewing their registration who have submitted more than ten license applications during the preceding 12 months. The fee for Tier 3 registrations is based at $2,750 and increases by $250 for every license application after the 10^th application.

Provided the above criteria are met, users will see a new “Renewal Fee Details” button in their Registration dashboard when there are 90 days or less before the expiration date. Selecting this button will display a pop-up window featuring additional details and information on how the renewal fee was calculated. Users will now be able to see the following information consolidated into the new Renewal Fee Details window:

Registration expiration date;
License Period “Start” and “End” dates;
- Any licenses which were either “Approved” or “Approved with Provisos” within this date range were incorporated in the calculation of renewal fees;
Number of Licenses;
- Any licenses which were “Returned Without Action” (RWA) will not be included in the calculation of renewal fees;
- DS-4294 & DS-6004 licenses are not included in the calculation of renewal fees;
Total License Value;
3% of Total License Value Reduced Fee (Tier 3 Renewals Only)**;
- The 3% of Total License Value Reduced Fee field is provided only for calculation purposes and will not be applicable to all organizations. Please see the “Payment of Registration” website page to determine your organization’s renewal fee tier and discount fee eligibility; and
Renewal Fee Charged By DDTC.

Within this pop-up window, users will be presented with a “Download Licenses” button which generates a .csv file of all licenses considered when calculating the renewal fee charged by DDTC. This .csv file will include the case number, license type, approval date, and license value of all licenses “Approved” or “Approved with Provisos” within the license period date range that were used in the calculation of the renewal fee.

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

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Department of Defense

The Netherlands – MK 41 Vertical Launching System (VLS)

June 2, 2023: The State Department made a determination approving a possible Foreign Military Sale to the Government of the Netherlands of MK 41 Vertical Launching Systems (VLS) Baseline (B/L) VII Strike Length Launcher Modules (either system or standalone) and related equipment for an estimated cost of $110 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale today.

The Government of the Netherlands has requested a possible purchase of eight (8) eight-cell MK 41 Vertical Launching Systems (VLS) Baseline (B/L) VII Strike Length Launcher Modules (either system or standalone). Also included are spare parts; handling equipment; transportation test and support equipment; software; engineering/technical assistance; personnel training and training equipment; documentation, publications, and technical data; U.S. Government and contractor technical assistance; and other related elements of logistics and program support. The total estimated program cost is $110 million.

This proposed sale will support the foreign policy and national security objectives of the United States by improving the security of a NATO ally that is an important force for political stability and economic progress in Europe. It is vital to the U.S. national interest to assist the Netherlands in developing and maintaining a strong and ready self-defense capability.

The proposed sale will provide a defensive capability for the Netherlands while enhancing interoperability with the U.S. and other allied forces. The Royal Netherlands Navy intends to use the MK 41 VLS Baseline (B/L) VII strike-length launcher modules for their new ship class. These modules are intended for ESSM BLK1 and SM-2 capabilities in support of ongoing and emergent operational needs. The Netherlands has previously purchased MK 41 VLS capability and actively uses it on their current ship classes. The Netherlands will have no difficulty absorbing this equipment and support into its armed forces. The proposed sale of this equipment and support will not alter the basic military balance in the region.

The prime contractor will be Lockheed Martin Corporation, Bethesda, MD. There are no known offset agreements proposed in connection with this potential sale. Implementation of the proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to the Netherlands. However, U.S. Government or contractor personnel in-country visits will be required on a temporary basis in conjunction with program technical oversight and support requirements. There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.

The Netherlands – MK 41 Vertical Launching System (VLS) | Defense Security Cooperation Agency (dsca.mil)

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DSCA Notifies Congress Of Potential FMS Sale To The Netherlands

June 2, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of the Netherlands has requested a possible purchase of eight (8) eight-cell MK 41 Vertical Launching Systems (VLS) Baseline (B/L) VII Strike Length Launcher Modules (either system or standalone). Also included are spare parts; handling equipment; transportation test and support equipment; software; engineering/technical assistance; personnel training and training equipment; documentation, publications, and technical data; U.S. Government and contractor technical assistance; and other related elements of logistics and program support. The total estimated program cost is $110 million. The prime contractor will be Lockheed Martin Corporation, Bethesda, MD. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/netherlands-mk-41-vertical-launching-system-vls

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DSCA Notifies Congress Of Potential FMS Sale To France

June 13, 2023: The Government of France has requested to buy additional non-MDE E-2C Hawkeye sustainment items and services that will be added to a previously implemented case. The original FMS case, valued at $99.6 million, included E-2C Hawkeye sustainment support. Therefore, this notification is for E-2C Hawkeye sustainment support to include an Engine Component Improvement Program (CIP); software updates; technical publications; U.S. Government and contractor technical/product support/assistance; and other related elements of logistics and program support. The estimated total cost is $160 million. The principal U.S. contractor will be Northrop Grumman, Melbourne, FL. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/france-e-2c-hawkeye-sustainment-support

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DSCA Notifies Congress Of Potential FMS Sale To Kuwait

June 13, 2023: The Government of Kuwait has requested the continuation of contractor-provided engineering technical services; contractor maintenance services; Hush House (an enclosed, noise-suppressed aircraft jet engine testing facility) support services; and Liaison Office Support for the Government of Kuwait’s F/A-18 C/D/E/F program, to include: F/A-18 avionics software upgrades; engine component improvements; ground support equipment; engine and aircraft spares and repair parts; publications and technical documentation; Engineering Change Proposals (ECP); U.S. Government and contractor programmatic, financial, and logistics support; maintenance and engineering support; F404/F414 engine and engine test cell support; and other related elements of logistical and program support. This proposed sale will provide follow-on sustainment support to Kuwait’s F/A-18C/D/E/F aircraft. The estimated cost is $1.8 billion. The principal contractors will be Sigmatech, Inc., Huntsville, AL; Kay and Associates, Inc., Buffalo Grove, IL; Kellogg, Brown, and Root, Houston, TX; L3 Technologies, Melbourne, FL; The Boeing Company, St. Louis, MO; General Electric, Lynn, MA; Industrial Financial Services, Ottawa, ON; and Lockheed Martin, Orlando, FL. Additional principal contractors will be determined by a competitive contractual award process. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/kuwait-follow-technical-support

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DSCA Notifies Congress Of Potential FMS Sale To Spain

June 14, 2023: The Government of Spain has requested to buy an additional one hundred fifty-three (153) M982A1 Excalibur tactical projectiles that will be added to a previously implemented case whose value was under the congressional notification threshold. The original FMS case, valued at $21.87 million, included one hundred eighteen (118) M982A1 Excalibur tactical projectiles. This notification is for a combined total of two hundred seventy-one (271) M982A1 Excalibur tactical projectiles. Also included is a portable electronic Fire Control System (FCS); Improved Platform Integration Kit; Propelling Charge Modular Artillery Charge System; Simple Key Loaders (SKL); crypto cable; training aids; technical data; U.S. Government technical assistance; transportation; Excalibur spare parts; artillery cleaning sections; new equipment training; repair and return support equipment; support related to collateral damage estimation tables; and other related elements of logistics and program support. The total estimated cost is $48.2 million. The principal contractor will be Raytheon Company Missile Systems, McAlester, OK. There are no known offset agreements proposed in connection with this potential sale. Implementation of this sale will not require the assignment of any U.S. Government or contractor representatives to Spain.

https://www.dsca.mil/press-media/major-arms-sales/spain-excalibur-projectiles

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DSCA Notifies Congress Of Potential FMS Sale To The Netherlands

June 16, 2023: The Government of the Netherlands has requested to buy up to four (4) MQ-9A Block 5 aircraft; up to three (3) UAV MQ-9 Mobile Ground Control Systems (MGCS); up to thirty (30) Embedded Global Positioning Systems/Internal Navigation Systems (EGI) devices, Airborne, with Selective Availability Anti-Spoofing Module (SAASM) or M-Code; up to eight (8) AN/DAS-4 Multi-Spectral Targeting Systems; and up to twenty (20) Lynx AN/APY-8 Synthetic Aperture Radars. Also included are Reaper Engines; Selex Seaspray Synthetic Aperture Radars; SeaVue Maritime Radars; M299 Hellfire Longbow missile launchers; AN/ARC-210 radios; Line-of-Site (LOS) Ground Data Terminals; Ruggedized Aircraft Maintenance Test Stations (RAMTS); AN/APX-119 and other Identification Friend or Foe transponders; KIV-77 Cryptographic Appliques; KY-100M narrowband/wideband terminals; AN/PYQ-10 Simple Key Loaders; satellite communications earth terminal subsystems (SETSS); spare parts, consumables, and accessories and repair and return support; secure communication equipment and cryptographic devices; major/minor modifications, maintenance, and maintenance support; munitions support and support equipment; unclassified software delivery and support; transportation support; unclassified publications and technical documentation; studies and surveys; U.S. Government and contractor engineering, technical and logistics support services; and other related elements of logistic and program support. The estimated total cost is $611 million. The principal contractor will be General Atomics-Aeronautical Systems, Poway, CA. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/netherlands-mq-9a-block-5-aircraft

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DSCA Notifies Congress Of Potential FMS Sale To Canada

June 27, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Canada has requested to buy up to sixteen (16) P-8A Patrol Aircraft; up to twenty-six (26) Multifunctional Information Distribution System Joint Tactical Radio System 5 (MIDS JTRS 5); up to thirty-eight (38) Embedded Global Positioning Systems (GPS)/Inertial Navigation Systems (EGIs) for the LN-251; up to twenty-five (25) System Processor Replacements for AN/AAQ-24(V)N Large Aircraft Infrared Countermeasures (LAIRCM) System Processor Replacement (LSPR) with Exelis Embedded GPS Receiver (EGR) integrated with SAASM; and up to twenty-two (22) Guardian Laser Transmitter Assemblies (GLTA) for the AN/AAQ-24(V)N. Also included are commercial engines; Tactical Open Mission Software (TOMS); Electro-Optical (EO) and Infrared (IR) MX-20HD; AN/AAQ-2 Acoustic System; AN/APY-10 Radar; AN/ALQ-240 Electronic Support Measures; NexGen Missile Warning Sensors; AN/ARC-210 RT-2036(C) Radios; AN/PRC-117G Manpack Radios including MPE-S type II with SAASM 3.7; AN/ALQ-213 Electronic Countermeasures; AN/ALE-47 Countermeasures Dispenser Systems; AN/UPX-43 Identification Friend or Foe (IFF) Interrogators; AN/APX-123A(V) IFF Digital Transponders; KIV-78 IFF Mode 4/5 Cryptographic Appliques; KIV-701A Cryptographic Core Modules; KY-100M, KY-58, KYV-5 for HF-121C radios; KG-175 Encryptor Network Convergence System; AN/PYQ-10 V3 Simple Key Loaders (SKL) with KOV-21 Cryptographic Appliques; Radiant Mercury Hardware and Software with ENTR(V)4 Receiver with Embedded Crypto for the Integrated Broadcast System (IBS); software; publications; Dual KIV-7M with Power Supply HFIP Channel Link Encryptor; Advanced Digital Antenna Production (ADAP) Antenna Electronics (AE); Advanced Digital Antenna Production (ADAP) Controlled Reception Pattern Antennas (CRPA); Control Interface Units (CIU) for AN/AAQ-24(V)N LAIRCM; aircraft spares; spare engines; support equipment; operational support systems; training; training devices; maintenance trainer/classrooms; engineering technical assistance (ETA); logistics technical assistance (LTA); Country Liaison Officer (CLO) support; Contractor Engineering Technical Services (CETS); Contractor Logistics Support (CLS); repair and return; transportation; aircraft ferry; other associated training and support; and other related elements of logistics and program support. The estimated total cost is $5.9 billion. The prime contractor will be The Boeing Company, Seattle, WA. There are a significant number of other companies under contract with the U.S. Navy that will provide components, systems, and engineering services during the execution of this effort. While the purchaser typically requests offsets, any offset agreement will be defined in future negotiations between the purchaser and the contractor(s).

https://www.dsca.mil/press-media/major-arms-sales/canada-p-8a-aircraft

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The Department of Defense (DoD) Makes Recommendations To Improve And Accelerate To FMS Process

June 13, 2023: The Department of Defense (DoD) approved a tasking memo from the DoD Foreign Military Sales (FMS) Tiger Team that highlights six key FMS pressure points and directs the implementation of recommendations to improve and accelerate the Department’s institutional processes to execute FMS cases. The efforts of the Tiger Team and the Department’s commitment to improving the FMS system advance the direction of the 2022 National Defense Strategy to break down barriers to working with allies and partners.

The Tiger Team analyzed representative case studies at all phases of the FMS process, illuminated best practices to benchmark, and identified systemic challenges endemic in DoD’s FMS ecosystem. The team reviewed the findings of historical reform efforts and also solicited and incorporated feedback from allies and partner nations, and the U.S. industry on ways to improve the efficiency of DoD’s implementation of the FMS process.

The FMS-implementing agencies were instructed to:

Improve the Department’s understanding of ally and partner requirements. To accelerate discussions with allies and partner nations about FMS requirements and reduce delays during the FMS case lifecycle, the Department will change the way it organizes, trains, and equips for security cooperation, including by establishing a Defense Security Cooperation Service on par with the Defense Attaché Service;
Enable efficient reviews for the release of technology. To reduce barriers to the export of key capabilities, the Department will review and update relevant policies and empower accountable officials to improve the efficiency of the review and release of technology to allies and partner nations. The Department will also continue to support interagency efforts focused on technology review and release;
Provide allies and partner nations with relevant priority capabilities. To better enable allies and partner nations to support their own national security needs, the Department of Defense will develop a methodology to facilitate Non-Programs of Record;
Accelerate acquisition and contracting support. To advance FMS acquisition prioritization and award timelines for allies and partner nations, the Department will establish contract award standards and metrics as well as develop associated process maps to monitor the FMS prioritization and award process;
Expand Defense Industrial Base (DIB) capacity. To reduce production timelines, the Department will incorporate ally and partner requirements into ongoing efforts to expand DIB production capacity. This will include developing a comprehensive study to incentivize DIB investment in production capacity and building surge capability for high-demand, low-supply platforms, systems, and services. The strategy will include the use of multi-year contracts; enhanced use of the Special Defense Acquisition Fund; five-year predictive analyses of partner demand; and sustained engagement with the DIB; and
Ensure broad U.S. Government support. Recognizing that DoD is part of the broader U.S. Government FMS ecosystem, the Department will work with the Department of State and other stakeholders, including Congress, to identify opportunities to improve the FMS process.

To implement these recommendations and ensure the elevation of emergent FMS issues to senior leadership, the Department established an FMS Continuous Process Improvement Board (CPIB), which will act as an enduring governance structure within the Department. The Board, which reports to the Secretary of Defense, will provide accountability in implementing the recommendations, measuring impact, and continually pursuing areas to improve the overall process.

https://www.defense.gov/News/Releases/Release/Article/3425963/department-of-defense-unveils-comprehensive-recommendations-to-strengthen-forei/

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U.S. Census Bureau

Tips on How to Resolve AES Response Messages

June 21, 2023: To help the industry take the appropriate action for the different AES Response Messages, below are two tips on how to address the most frequent messages that were generated in AES for this month.

Response Code: 303

Narrative: Sold En Route Indicator Must be Y or N

Severity: Fatal

Reason: The Party Type is identified as Ultimate Consignee, and the Sold En Route Indicator is not reported as Yes or No.

Resolution: The Ultimate Consignee information must be reported on an EEI, including a valid Sold En Route Indicator. If the Ultimate Consignee is known and reported, set the Sold En Route Indicator to No. If the cargo is to be Sold En Route and the ultimate consignee is not known at the time of export, then set the Sold En Route Indicator to Yes.

Verify the Ultimate Consignee and the Sold En Route Indicator, correct the shipment, and resubmit.

Response Code: 331

Narrative: Ultimate Consignee Country Unknown

Severity: Fatal

Reason: The Ultimate Consignee Country code reported is not valid in AES.

Resolution: The Ultimate Consignee Country code must be a valid ISO Country code found in Appendix C – ISO Country Codes.

Verify the Ultimate Consignee Country code, correct the shipment, and resubmit.

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The Department of Commerce, the Department of Justice, the Department of State, and the Department of the Treasury

The Department Of Commerce, The Department Of Justice, The Department Of State, And The Department Of The Treasury Issued Guidance To Industry On Iran’s UAV-Related Activities

June 9, 2023: The Department of Commerce, the Department of Justice, the Department of State, and the Department of the Treasury issued guidance to industry on Iran’s UAV-Related activities. Iran’s procurement, development, and proliferation of unmanned aerial vehicles (UAVs) is an increasing threat to international peace and security. The Department of Commerce, the Department of Justice, the Department of State, and the Department of the Treasury are issuing this advisory to alert persons and businesses globally to the threat of Iran’s UAV-related activities and the need to take appropriate steps to avoid or prevent any activities that would support the further development of Iran’s UAV program. The United States is committed to countering Iran’s UAV programs, including by preventing abuse of the U.S. financial system and disrupting the procurement of foreign-sourced components. It is critical that private industry be aware of its legal obligations vis-à-vis entities and items involved in such procurement efforts, given the potential applicability of U.S. export controls and sanctions. The intent of the advisory is to highlight effective due diligence policies, compliance structures, and internal controls relevant specifically to Iran’s UAV-related activities to ensure compliance with applicable legal requirements across the entire supply chain. The advisory is also designed to help prevent companies from contributing to Iran’s UAV programs, including via direct and indirect transfers to third-country suppliers, which may threaten the broader national and international security interests of the United States and its allies and partners.

https://ofac.treasury.gov/media/931876/download?inline

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

OFAC To Retire Its Public-Facing File Transfer Protocol (FTP) Server

June 9, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) will retire its public-facing file transfer protocol (FTP) server (ofacftp.treas.gov) on or about June 10, 2024. In order to comply with updated Treasury security policies, OFAC will retire the FTP capability associated with the file transfer protocol. OFAC is aware that many users utilize ofacftp.treas.gov to automate their sanctions list data downloads. OFAC will maintain this server for one additional calendar year to allow users sufficient time to develop automation that utilizes the list content hosted on the agency’s website at the following URLs listed below. Members of the public may contact OFAC at O_F_A_C@treasury.gov for technical support related to this decision.

https://ofac.treasury.gov/recent-actions/20230609_33

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The U.S. OFAC And UK’s OFSI Published A Joint Humanitarian Assistance And Food Security Fact Sheet

June 28, 2023: In furtherance of the recent commitments by the United States and the United Kingdom to protect humanitarian activity from the unintended impacts of sanctions and in support of the enhanced partnership between the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) and His Majesty’s Treasury’s Office of Financial Sanctions Implementation (OFSI), OFAC and OFSI are publishing a joint Humanitarian Assistance and Food Security Fact Sheet to provide additional clarity on U.S. and UK Russia-related sanctions and the relevant authorizations, exceptions, and public guidance.

OFAC and OFSI continue to work together and with foreign partners to reduce the impacts of Russia’s war on global food supplies and prices and to address humanitarian concerns associated with sanctions.

https://ofac.treasury.gov/recent-actions/20230628 and https://ofac.treasury.gov/media/931946/download?inline

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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 12, 2023: 88 Fed. Reg. 38118: The U.S. Department of State has determined that the persons known as Maxamed Siidow (also known as Maxamed Siidow Sheikh Ibrahim), Cali Yare (also known as Ali Yare), Maxamed Dauud Gabaane (also known as Maxamed Daud Qaawane, Maxamed Daud, Mahamud Daud), Suleiman Cabdi Daoud (also known as Suleiman Daoud Goobe, Saleban Goobe, Saleeban Goobe), Mohamed Omar Mohamed (also known as Mohamed Omar Ma’alin, Maxamed Cumar Maxamed, Ma’d Umurow, Mohamed Omar Haji, Mohamed Haji Omar Mo’alin, Mohamed Omarow, Ibnu-Omar) are leaders of al-Shabaab, a group whose property and interests in property are currently blocked pursuant to a determination by the Secretary of State pursuant to E.O. 13224 and are designated as Specially Designated Global Terrorists.

https://www.federalregister.gov/documents/2023/06/12/2023-12419/designation-of-maxamed-siidow-cali-yare-maxamed-dauud-gaabane-suleiman-cabdi-daoud-mohamed-omar

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June 15, 2023: 88 Fed. Reg. 39323: The U.S. Department of State published a notice of ten persons statutorily debarred for having been convicted of violating, or conspiring to violate, the Arms Export Control Act (22 U.S.C. 2751, et seq.). This action, pursuant to section 127.7(b) of the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120-130), highlights the Department’s responsibility to protect the integrity of U.S. defense trade. Pursuant to section 38(g)(4) of the AECA and section 127.7(b) and (c)(1) of the ITAR, the following persons, having been convicted in a U.S. District Court, are denied export privileges and are statutorily debarred as of the date of this notice (Name; Date of Judgment; Judicial District; Case No.; Month/Year of Birth):

Almendarez, Maria Guadalupe; May 10, 2022; Eastern District of Arkansas; 4:19–cr–00116; December 1980.
Bukey, Murat; a.k.a. Bukey, Murat; a.k.a. Murat, Recep; March 22, 2023; District of Columbia; 1:18–cr–00129; January 1971.
Cassidy, Kevin Jerome; September 13, 2022; District of Arizona; 2:18–cr– 01236; December 1959.
Hamade, Usama Darwich; a.k.a. Hamade, Prince Sam; July 22, 2020; District of Minnesota; 0:15–cr–00237; December 1964.
Pierson, Andrew Scott; April 29, 2022; Eastern District of Arkansas; 4:19– cr–00116; May 1975.
Radionov, Ihor; August 27, 2021; Middle District of Florida; 8:20–cr– 00308; January 1969.
Sery, Joe; September 19, 2022; Southern District of California; 3:21–cr– 02898; June 1944.
Ugur, Arif; December 16, 2022; District of Massachusetts; 1:21–cr– 10221; January 1969.
Veletanlic, Hany; January 27, 2020; Western District of Washington; 2:18– cr–00162; December 1983.
Wu, Tian Min; a.k.a. Wu, Bob; a.k.a. Wu, David; a.k.a. Sones, Graham; a.k.a. Wang, Edward; June 9, 2021; Central District of California; 2:17–cr–00081; April 1965.

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.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=440cf1841befed50d1f1ea02f54bcbcf and https://www.state.gov/u-s-department-of-state-debars-ten-persons-for-violating-or-conspiring-to-violate-the-arms-export-control-act-2/

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June 28, 2023: 88 Fed. Reg. 41997: 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, the Department of State determined that the persons known as Arkan Ahmad `Abbas al-Matuti (also known as Arkan Ahmad Abbas Albu-Mazida Albu-Miteuti, Arkan Ahmad `Abbas al-Mitiwiti, and Abu Sarhan) and Nawaf Ahmad Alwan al-Rashidi (also known as Qahtan Nawaf Ahmad Alwan Sada, Nawaf Ahmed Alwan, and Abu Faris) are leaders of ISIS, a group whose property and interests in property are currently blocked pursuant to a determination by the Secretary of State pursuant to E.O. 13224. Arkan Ahmad `Abbas al-Matuti and Nawaf Ahmad Alwan al-Rashidi are designated as Specially Designated Global Terrorists.

https://www.federalregister.gov/documents/2023/06/28/2023-13703/designation-of-arkan-ahmad-abbas-al-matuti-and-nawaf-ahmad-alwan-al-rashidi-as-specially-designated

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

June 6, 2023: 88 Fed. Reg. 37007: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has renewed the Order temporarily denying the export privileges of Quicksilver Manufacturing, Inc., Rapid Cut LLC, and U.S. Prototype, Inc., for an additional 180 days. OEE’s request for renewal is based upon the facts underlying the issuance of the initial TDO, as well as evidence developed over the continuing course of this investigation. The initial TDO, issued on June 7, 2022, was based on evidence that Respondents engaged in conduct prohibited by the Regulations by exporting or causing the export from the United States of technology controlled on national security and/or missile technology grounds to China for 3D printing without the required U.S. government authorization. In its November 10, 2022, request for renewal of the TDO, BIS submitted evidence that Respondents’ export compliance failures were broader in scope than the investigation initially revealed, as well as evidence related to new concerns raised by actions taken after the issuance of the June 7, 2022, TDO. Specifically, BIS’s evidence and further investigation identified additional U.S. companies that engaged in business with Respondents involving the unlicensed export of technical specifications to China related to firearm components (ECCN 0E501.a) and space-rated items (ECCN 9E515.a), both of which are controlled on national security and regional stability grounds, as well as numerous additional suspected export control-related violations between 2017 and 2022. BIS’s renewal request was also based upon concerns related to Respondents’ initial attempts at compliance following the issuance of the June 7, 2022, TDO, including the provision of potentially inaccurate information to customers about the scope of items subject to the Regulations. In its November 10, 2022, BIS also submitted evidence that a China-based individual, known to operate an @rapidcut.com email address to facilitate Rapid Cut’s business operations, may have violated the TDO shortly after its issuance by providing customer information on how to complete and fulfill pending orders, despite the issuance of the TDO. Such information included instructions to cancel existing Rapid Cut orders and reissue purchase orders to China Company No. 1 in an apparent attempt to avoid the restrictions of the TDO. The May 10, 2023, request for renewal of the December 5, 2022, TDO is also based on evidence related to the nature and scope of BIS’ continuing investigation. This includes the circumstances surrounding the access by China-based employees to Respondents’ email accounts, as detailed above, which remain under investigation. The renewal request is also based on evidence provided by additional U.S. companies that engaged in business with Respondents involving the unlicensed export of technical specifications to China, including information received as recently as April 2023. In sum, and as detailed in the renewal request, BIS’ investigation is ongoing, the entirety of Respondent’s misconduct remains unknown, and a final written disclosure of prior violations has not yet been submitted.

https://www.federalregister.gov/documents/2023/06/06/2023-12067/quicksilver-manufacturing-inc-8209-market-st-a173-wilmington-nc-28411-rapid-cut-llc-8209-market-st

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June 7, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has renewed the Order temporarily denying the export privileges of Belavia Belarusian Airlines for an additional 180 days.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1523-e2861/file

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June 9, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued an Order denying the export privileges of Thomas Harris on March 1, 2022, for ten years until March 1, 2032. Harris was convicted of violating 18 U.S.C. § 554(a) for smuggling and attempting to smuggle 14 firearms from the United States to Saint Lucia. As a result of his conviction, the Court sentenced Harris to 46 months of confinement, three years of supervised release, and a $1,500 assessment.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1525-e2863/file

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June 12, 2023: 88 Fed. Reg. 38739: The Department of Commerce amended the Export Administration Regulations (EAR) by adding 43 entities under 50 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. These entries are listed on the Entity List under the destinations of China (31), Kenya (1), Laos (1), Malaysia (1), Pakistan (4), Singapore (1), South Africa (3), Thailand (1), the United Arab Emirates (5), and the United Kingdom (2). This rule also removes one entity from the Entity List under the destination of Latvia.

China:

Aviation Industry Corporation of China 612 Institute;
Aviation International Corporation of China International Simulation Technology Service Co., Ltd.;
Beijing China Aviation Technology Co., Ltd.;
Beijing Iwintall Technology Co. Ltd.;
Beijing Luo Luo Technology Development Co., Ltd.;
Beijing Ryan Wende Science and Technology Co., Ltd.;
Beijing Transemic Information Technology Ltd.;
Beijing Transemic Technology Ltd.;
Belt Consulting Co., Ltd.;
Changzhou Utek Composite Co., Ltd.;
Chengdu Poyotencon Technology;
China Taly Aviation Technologies Corporation;
Chinese Flight Test Establishment;
Enhance International Trade Limited;
Frontier Services Group Limited;
General Technology Limited;
Luoyang Institute of Science and Technology;
New Faith Enterprise Investment Limited;
Opturn Co., Ltd.;
Pera Global;
Qianpu Technology Co., Ltd.;
Shanghai Aerospace Science and Technology Development Co., Ltd.;
Shanghai Breeze Technology Co., Ltd.;
Shanghai Breeze Technology Jiangsu Co., Ltd.;
Shanghai Shark Sprite Technology Co., Ltd.;
Shanghai Supercomputing Technology Co., Ltd.;
The Test Flying Academy of South Africa;
Tiger Force Electronics Limited;
United Vision Limited;
Universal Enterprise Limited; and
Xinjiang Kehua Hechang Biological Science and Technology Co., Ltd.

Kenya:

Frontier Services Group Limited.

Laos:

Frontier Services Group Limited.

Malaysia:

International Aerospace Asia.

Pakistan:

Affiliates International;
Akhtar and Sons Private Limited;
Imminent Engineering Co., Ltd.; and
Quantum Logix (Private) Limited.

Singapore:

International Aerospace Asia.

South Africa:

AVIC International Flight Training Academy;
Pearl Coral 1173 CC; and
The Test Flying Academy of South Africa.

Thailand:

International Aerospace Asia.

United Arab Emirates:

Frontier Services Group Limited;
TFASA Group FZCO;
TFASA Group Training;
TFASA Services FZCO; and
TFASA Training Limited.

United Kingdom

TFASA Group Limited; and
International Aerospace Asia.

Removal From the Entity List

The End-User Review Committee determined to remove Fiber Optic Solutions from the Entity List. This is based on information that BIS received pursuant to § 744.16(e) of the EAR and the review that the ERC conducted in accordance with procedures described in supplement no. 5 to part 744 of the EAR. Prior to removal from the Entity List by this rule, Fiber Optic Solutions was listed under Latvia.

https://www.federalregister.gov/documents/2023/06/14/2023-12726/additions-of-entities-to-the-entity-list-and-removal-of-entity-from-the-entity-list

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June 15, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has renewed for 180 days Temporary Denial Orders (TDOs) against the following three Russian airlines for violations of license requirements it imposed in response to Russia’s invasion of Ukraine effective March 2, 2022, on any U.S.-origin aircraft or foreign aircraft that includes more than 25% controlled U.S.-origin content, and that is registered in, owned, or controlled by, or under charter or lease by Russia or a national of Russia, before such aircraft can travel to Russia:

Pobeda Airlines;
Nordwind Airlines and Pegas Touristik, a/k/a Pegas Touristik OOO;
Siberian Airlines d/b/a S7 Airlines.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1533-e2871/file and https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1534-e2872/file and https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1535-e2873/file

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June 21, 2023: 88 Fed. Reg. 40084: The Department of Commerce is amending the Export Administration Regulations (EAR) by adding an inadvertently omitted entity to the Entity List. This correcting amendment is effective June 16, 2023.

China:

China Aviation Development Harbin Bearing Co., Ltd.

https://www.federalregister.gov/documents/2023/06/21/2023-13196/additions-of-entities-to-the-entity-list-and-removal-of-entity-from-the-entity-list-correction

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

BIS Removed Pegas Touristik from the Temporary Denial Order

June 28, 2023: The Department of Commerce, Bureau of Industry and Security removed Pegas Touristik from the Temporary Denial Order of Nordwin.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1536-e2874/file

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

June 1, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Sudan General License Number 1, “Official Business of Certain International Organizations and Entities;” Sudan General License Number 2, “Certain Transactions in Support of Nongovernmental Organizations’ Activities;” Sudan General License Number 3 “Transactions Related to the Provision of Agricultural Commodities, Medicine, Medical Devices, Replacement Parts and Components, or Software Updates, and the Extraction, Processing, Transport, Sale, or Distribution of Water in Sudan;” and Sudan General License Number 4 “Authorizing the Wind Down of Transactions Involving Defense Industries System or Al Junaid Multi Activities Co Ltd.”

Sudan General License Number 1: All transactions prohibited by Executive Order (E.O.) 14098 that are for the conduct of the official business of the following entities by employees, grantees, or contractors thereof are authorized:

(1) The International Centre for Settlement of Investment Disputes (ICSID) and the Multilateral Investment Guarantee Agency (MIGA);

(2) The African Development Bank Group, the Asian Development Bank, the European Bank for Reconstruction and Development, and the Inter-American Development Bank Group (IDB Group), including any fund entity administered or established by any of the foregoing;

(3) The International Committee of the Red Cross and the International Federation of Red Cross and Red Crescent Societies;

(4) The Global Fund to Fight AIDS, Tuberculosis, and Malaria, and Gavi, the Vaccine Alliance;

(5) The African Union, including the African Union Commission and other subsidiary bodies and organs; and

(6) The Intergovernmental Authority on Development (IGAD).

This general license does not authorize funds transfers initiated or processed with knowledge or reason to know that the intended beneficiary of such transfers is a person blocked pursuant to E.O. 14098 other than for the purpose of effecting the payment of taxes, fees, or import duties, or the purchase or receipt of permits, licenses, or public utility services.

https://ofac.treasury.gov/media/931821/download?inline

Sudan General License Number 2: All transactions prohibited by Executive Order (E.O.) 14098 that are ordinarily incident and necessary to the activities described below by nongovernmental organizations are authorized, provided that the nongovernmental organization is not a person whose property or interests in property are blocked pursuant to E.O. 14098.

The activities referenced above are non-commercial activities designed to directly benefit the civilian population that fall into one of the following categories:

(1) Activities to support humanitarian projects to meet basic human needs, including disaster, drought, and flood relief; food, nutrition, or 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, including activities to support the 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, including combating illiteracy, increasing access to education, international exchanges, and assisting education reform projects;

(4) Activities to support non-commercial development projects directly benefitting civilians, including those related to health, food security, and water and sanitation;

(5) Activities to support environmental and natural resource protection, 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; and

(6) Activities to support disarmament, demobilization, and reintegration (DDR) programs and peacebuilding, conflict prevention, and conflict resolution programs.

Specific licenses may be issued on a case-by-case basis to authorize nongovernmental or other entities to engage in other activities designed to directly benefit the civilian population, including support for the removal of landmines and economic development projects directly benefiting the civilian population.

https://ofac.treasury.gov/media/931826/download?inline

Sudan General License Number 3: All transactions prohibited by Executive Order (E.O.) 14098 of May 4, 2023, that are related to the provision of agricultural commodities, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices to Sudan or to persons in third countries purchasing specifically for resale to Sudan, are authorized.

All transactions prohibited by E.O. 14098 that are related to the extraction, processing, transport, sale, or distribution of water, including the maintenance or repair of water pipelines, are authorized.

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

(1) Agricultural commodities. Agricultural commodities are products:

(i) 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

(ii) That are intended for ultimate use in Sudan as (A) 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); (B) Seeds for food crops; (C) Fertilizers or organic fertilizers; or (D) Reproductive materials (such as live animals, fertilized eggs, embryos, and semen) for the production of food animals.

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

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

https://ofac.treasury.gov/media/931831/download?inline

Sudan General License Number 4: All transactions prohibited by Executive Order (E.O.) 14098 that are ordinarily incident and necessary to the wind-down of any transaction involving Defense Industries System, Al Junaid Multi Activities Co Ltd, or any entity in which Defense Industries System or Al Junaid Multi Activities Co Ltd owns, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern daylight time, July 31, 2023, provided that any payment to a blocked person must be made into a blocked account and reported to the Office of Foreign Assets Control consistent with § 501.603 of the Reporting, Procedures and Penalties Regulations, 31 CFR part 501.

This general license does not authorize any transactions otherwise prohibited by E.O. 14098, including transactions involving any person blocked pursuant to E.O. 14098 other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.

https://ofac.treasury.gov/media/931836/download?inline

OFAC also designated members and affiliates of Iran’s Islamic Revolutionary Guard Corps (IRGC) and its external operations arm, the IRGC-Qods Force (IRGC-QF), who have participated in a series of terrorist plots including assassination plots targeting former United States government officials, dual U.S. and Iranian nationals, and Iranian dissidents. This action targets three Iran- and Türkiye-based individuals and a company affiliated with the IRGC-QF, along with two senior officials of the IRGC’s Intelligence Organization (IRGC-IO), who have been involved in plotting external lethal operations against civilians, including journalists and activists.

OFAC also designated four companies generating revenue from, and contributing to, the conflict in Sudan. The entities designated are affiliated with the two embattled forces that are fueling the ongoing conflict in Sudan: two companies affiliated with the paramilitary Rapid Support Forces (RSF) and two companies affiliated with the Sudanese Armed Forces (SAF).

In addition, the following changes have been made to OFAC’s list of Specially Designated Nationals:

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

Hossein Hafez Amini of Iran
Mohammad Reza Ansari of Iran
Rouhollah Bazghandi of Iran
Shahram Poursafi of Syria
Reza Seraj of Iran

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

Al Junaid Multi Activities Co Ltd of Sudan
Defense Industries System of Sudan
Rey Havacilik Ithalat Ihracat Sanayi Ve Ticaret Anonim Sirketi, of Turkey
Sudan Master Technology of Sudan
Tradive General Trading L.L.C of The U.A.E.

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

Alfa Nero (ZCTL4) Yacht 2,159GRT Cayman Islands flag of Russia

Counter Terrorism Designations; Sudan Designations; Russia-related Designation Removal; Issuance of Sudan General Licenses | Office of Foreign Assets Control (treasury.gov)

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June 2, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Iran-related General License P “Authorizing the Wind Down of Transactions Involving Navyan Abr Arvan Private Limited Company or Arvancloud Global Technologies L.L.C.”

In addition, the following changes have been made to OFAC’s list of Specially Designated Nationals:

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

Farhad Fatemi of Iran.
Pouya Pirhosseinloo of Iran

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

Arvancloud Global Technologies L.L.C. of The United Arab Emirates
Navyan Abr Arvan Private Limited Company of Iran

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June 5, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) published four general licenses (GLs) issued pursuant to the Russian Harmful Foreign Activities Sanctions Regulations: GLs 13E, 66, 67, and 68, each of which was previously made available on OFAC’s website.

Federal Register:: Publication of Russian Harmful Foreign Activities Sanctions Regulations Web General Licenses 13E, 66, 67, and 68

June 5, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) published one Russian Harmful Foreign Activities Sanctions directive in the Federal Register. The directive, issued pursuant to an April 15, 2021, Executive Order, was previously made available on OFAC’s website.

Federal Register:: Publication of Directive 4 (as Amended) Under Executive Order 14024 of April 15, 2021

June 5, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated seven leading members of a Russian intelligence-linked malign influence group for their role in the government of the Russian Federation’s destabilization campaign and continued malign influence campaigns in Moldova. An entity owned or controlled by one of these individuals has also been designated.

These designations are part of an ongoing effort to combat Russia’s malign influence in Moldova. The U.S. government has previously exposed Russia’s attempts to use covert operatives to subvert democracy in Moldova. On October 26, 2022, OFAC sanctioned Yuriy Igorevich Gudilin, Olga Yurievna Grak, and Leonid Mikhailovich Gonin for their coordinated efforts in 2020 and 2021 to influence the outcome of Moldova’s elections. Additionally, on May 30, 2023, the EU sanctioned several Russian and Moldovan individuals for engaging in destabilizing activities against the government of Moldova. The U.S. government will continue to support the Moldovan government and people in their efforts to combat coercive activities that undermine democracy in Moldova.

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

Boyko, Svetlana Andreyevna of Russia;
Gromovikov, Vasiliy Viktorovich of Russia;
Khloponin, Gleb Maksimovich of Russia;
Losev, Aleksey Vyacheslavovich of Russia;
Makolov, Yury Yuryevich of Russia;
Sapozhnikov, Konstantin Prokopyevich of Russia; and
Travnikova, Anna of Russia.

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

Perko Julleuchter of Russia.

https://home.treasury.gov/news/press-releases/jy1522 and https://ofac.treasury.gov/recent-actions/20230605

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June 6, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two senior members of the Cartel de Jalisco Nueva Generacion (CJNG) engaged in trafficking high-caliber firearms from the United States and fuel theft in Mexico. Additionally, OFAC designated another individual and one Mexican entity that provide support to CJNG by laundering illicit narcotics proceeds. CJNG is a violent Mexico-based drug trafficking organization responsible for a significant proportion of fentanyl, and other deadly drugs trafficked into the United States.

OFAC also sanctioned a network of seven individuals and six entities in Iran, the People’s Republic of China (PRC), and Hong Kong in connection with Iran’s ballistic missile program. This network has conducted financial transactions and facilitated procurement of sensitive and critical parts and technology for key actors in Iran’s ballistic missile development, including Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) and its affiliated organizations, Parchin Chemicals Industries (PCI), Aerospace Industries Organization (AIO), Iran Electronics Industries (IEI), and P.B. Sadr, which is PCI’s key intermediary for the procurement of parts to develop missile propellant. PCI, the main beneficiary of this network, is a subsidiary of MODAFL’s Defense Industries Organization (DIO) and produces ammunition, explosives, and solid propellants for rockets and missiles. OFAC is also designating Iran’s Defense Attaché in Beijing, which has coordinated military-related procurements from the PRC for Iranian end-users, including MODAFL subsidiaries.

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

Damghani, Davoud of China and Iran;
Gong, Jiao of China;
Guerrero Covarrubias, Alonso of Mexico;
Guerrero Covarrubias, Javier of Mexico;
Haghighat, Ghasem of China and Iran;
Li, Zeming, Zhejiang of China;
Qin, Xutong, Ji Lin of China;
Rodriguez Aguirre, Mary Cruz of Mexico;
Shen, Weisheng, Zhejiang of China; and
Wei, Zunyi of China.

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

Beijing Shiny Nights Technology Development CO., LTD, of China;
Blue Calm Marine Services Company of Iran;
Hong Kong Ke.Do International Trade CO., LIMITED of China;
Lingoe Process Engineering Limited of China;
Nacer Agencia Panamericana De Divisas Y Centro Cambiario, S.A. DE C.V., of Mexico;
Qingdao Zhongrongtong Trade Development CO., LTD. of China; and
Zhejiang Qingji Ind. CO., LTD of China.

https://home.treasury.gov/news/press-releases/jy1523 and https://home.treasury.gov/news/press-releases/jy1524 and https://ofac.treasury.gov/recent-actions/20230606

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June 8, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Counter Terrorism Designations, Iran-related Designations Updates, and a Non-Proliferation Designation Update.

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

Al-Mainuki, Abu Bakr ibn Muhammad ibn ‘Ali of Nigeria; and
Al-Rufay’i, Abdallah Makki Muslih of Iraq.

https://ofac.treasury.gov/recent-actions/20230608

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June 14, 2023: The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) is publishing a Fact Sheet on the “Provision of Humanitarian Assistance and Trade to Combat COVID-19.” OFAC is also issuing Iran-related General License N-2, Venezuela-related GL 39B, Syria GL 21B, and amending several FAQs.

The United States is committed to ensuring that humanitarian assistance continues to reach at-risk populations through legitimate and transparent channels as countries across the globe fight the Coronavirus Disease 2019 (COVID-19). The sanctions programs administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) generally allow for legitimate humanitarian-related trade, assistance, or activity under existing laws and regulations. OFAC encourages those interested in providing such COVID-19-related assistance to avail themselves of longstanding exemptions, exceptions, and authorizations pertaining to humanitarian assistance and trade available in many U.S. sanctions programs. In the event that individuals, governments, or entities facing sanctions-related challenges have questions related to the provision of humanitarian assistance to sanctioned countries, or believe additional authorizations are needed, OFAC stands ready to provide guidance and respond to applications for specific licenses. This Fact Sheet provides consolidated guidance highlighting the most relevant exemptions, exceptions, and authorizations for humanitarian assistance and trade under the OFAC-administered Iran, Venezuela, North Korea, Syria, Cuba, and Russia-related sanctions programs.

https://ofac.treasury.gov/media/931896/download?inline

Iran-related General License N-2: Authorized 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 14, 2024:

(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).

https://ofac.treasury.gov/media/931881/download?inline

Venezuela-related General License 39B: 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 14, 2024.

Authorized 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 14, 2024.

https://ofac.treasury.gov/media/931886/download?inline

Syria General license 21B: Authorized 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 14, 2024:

(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://ofac.treasury.gov/media/931891/download?inline

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June 15, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two Democratic People’s Republic of Korea (DPRK) nationals involved in the procurement of equipment and materials that support the DPRK ballistic missile program. The DPRK continues to utilize a network of representatives in foreign countries, including the People’s Republic of China (PRC) and Iran, to illicitly import restricted components necessary to conduct research and development of its unlawful weapons of mass destruction (WMD) and ballistic missile programs, in violation of multiple UN Security Council resolutions.

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

Choe, Chol Min of North Korea; and
Choe, Un Jong of North Korea.

https://home.treasury.gov/news/press-releases/jy1539 and https://ofac.treasury.gov/recent-actions/20230615

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June 16, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on the Hernandez Salas transnational criminal organization (TCO), a human smuggling organization based in Mexicali, Mexico, as well as several members and entities in its support network. The practice of human smuggling and the facilitation of fraudulent documentation undermines the U.S. asylum system, damaging public confidence in the vetting process and jeopardizing access to protection for vulnerable persons fleeing conflict, famine, and persecution. Often, migrants encounter violence in each territory they cross on their journey toward the United States and may even end up victims of human trafficking. This action continues the Biden-Harris administration’s whole-of-government effort to confront human smuggling on the southern border of the United States.

According to U.S. Immigration and Customs Enforcement, TCOs earn billions of dollars from human smuggling. Most individuals attempting to enter the United States covertly seek assistance organizing transport across the border; smuggling organizations, often associated with other TCOs, take advantage of those individuals by providing services at a significant cost.

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

Chavez Tamayo, Jesus Gerardo of Mexico;
Hernandez Salas, Ofelia of Mexico;
Hernandez Sanchez, Federico of Mexico;
Maldonado Lopez, Fatima del Rocio of Mexico; and
Saucedo Huipio, Raul of Mexico.

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

Hernandez Salas Transnational Criminal Organization of Mexico;
Hotel Plaza of Mexico; and
Hotelera Lopez Mateos S.A. DE C.V. of Mexico.

https://home.treasury.gov/news/press-releases/jy1545 and https://ofac.treasury.gov/recent-actions/20230616

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June 21, 2023: the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Burma’s Ministry of Defense and two regime-controlled financial institutions that facilitate much of the foreign currency exchange within Burma and enable transactions between the military regime and foreign markets, including for the purchase and import of arms and related materiel.

OFAC also issued the Burma-related General License 5, “Authorizing the Wind Down of Transactions Involving Myanma Investment and Commercial Bank or Myanma Foreign Trade Bank.”

Burma-related General License 5: All transactions prohibited by Executive Order 14014 that are ordinarily incident and necessary to the wind-down of transactions involving Myanma Investment and Commercial Bank (MICB), Myanma Foreign Trade Bank (MFTB), or any entity in which MICB or MFTB owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern daylight time, August 5, 2023, provided that any payment to a blocked person must be made into a blocked account in accordance with the Burma Sanctions Regulations, 31 CFR part 525 (BuSR).

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

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

Ministry Of Defense Of Burma;
Myanma Foreign Trade Bank; and
Myanma Investment And Commercial Bank.

https://home.treasury.gov/news/press-releases/jy1555 and https://ofac.treasury.gov/media/931936/download?inline and https://ofac.treasury.gov/recent-actions/20230621

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June 23, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two Russian Federal Security Service (FSB) officers recently indicted by the Department of Justice who played a significant role in the Kremlin’s attempts to conduct global malign influence operations, including efforts to influence a local election in the United States.

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

Popov, Yegor Sergeyevich of Russia; and
Sukhodolov, Aleksei Borisovich of Russia.

https://home.treasury.gov/news/press-releases/jy1572 and https://ofac.treasury.gov/recent-actions/20230623

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June 27, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned four companies and one individual connected to the violent Russian military group PMC Wagner (Wagner Group) and its founder and owner Yevgeniy Prigozhin, previously sanctioned by the United States, the European Union (EU), Canada, and the United Kingdom (U.K.). The Wagner Group exploits insecurity around the world, committing atrocities and criminal acts that threaten the safety, good governance, prosperity, and human rights of nations, as well as exploiting their natural resources. The targeted entities in the Central African Republic (CAR), United Arab Emirates (UAE), and Russia have engaged in illicit gold dealings to fund the Wagner Group to sustain and expand its armed forces, including in Ukraine and Africa, while the targeted individual has been central to activities of Wagner Group units in Mali.

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

Ivanov, Nikolayevich Andrey of Russia.

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

Diamville SAU of the Central African Republic;
Industrial Resources General Trading of the United Arab Emirates;
Limited Liability Company DM of Russia; and
Midas Ressources SARLU of the Central African Republic.

OFAC also published an Africa Gold Advisory.

https://home.treasury.gov/news/press-releases/jy1581 and https://ofac.treasury.gov/recent-actions/20230627_33 and https://ofac.treasury.gov/media/931956/download?inline

U.S. Department of Homeland Security

June 12, 2023: 88 Fed. Reg. 38080: The U.S. Department of Homeland Security (DHS), as the Chair of the Forced Labor Enforcement Task Force (FLETF), announces the publication and availability of the updated Uyghur Forced Labor Prevention Act (UFLPA) Entity List, a consolidated register of the four lists required to be developed and maintained pursuant to the UFLPA, on the DHS UFLPA website. The updated UFLPA Entity List is also published as an appendix to this notice. This update adds two entities and eight subsidiaries to the UFLPA Entity List for working with the government of Xinjiang to recruit, transport, transfer, harbor, or receive forced labor or Uyghurs, Kazakhs, Kyrgyz, or members of other persecuted groups out of Xinjiang.

https://www.federalregister.gov/documents/2023/06/12/2023-12481/notice-regarding-the-uyghur-forced-labor-prevention-act-entity-list

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Fines and Penalties

June 3, 2023: The U.S. Department of State has concluded an administrative settlement with VTA Telecom Corporation to resolve six 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 VTA Telecom Corporation reached this settlement following an extensive compliance review by the Office of Defense Trade Controls Compliance in the Department’s Bureau of Political-Military Affairs.

The administrative settlement between the Department of State and VTA Telecom Corporation, concluded pursuant to ITAR § 128.11, addresses unauthorized exports and attempted exports of ITAR-controlled defense articles, including hobby rocket motors, video trackers, including related technical data, and a gas turbine engine controlled under U.S. Munitions List Categories IV(d)(7), IV(h), IV(h)(11), XII(a), and XIX(c) to Vietnam, a proscribed country for exports and temporary imports of defense articles and defense services, by 22 CFR § 126.1 at the time of the violations.

The settlement demonstrates the Department’s role in furthering world peace and the security and foreign policy of the United States by controlling the export of defense articles. The settlement also highlights the importance of exporting defense articles only pursuant to appropriate authorization from the Department.

Under the terms of the Consent Agreement, VTA Telecom Corporation 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-settlement-resolving-export-violations-by-vta-telecom-corporation/ and https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=99e327b21b4ba990d1f1ea02f54bcb8d and https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=15e363b21b4ba990d1f1ea02f54bcb09 and https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=99e327b21b4ba990d1f1ea02f54bcb8b

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June 7, 2023: A federal judge sentenced Miguel Armando Castro, of Phoenix, to 51 months in prison, followed by supervised release for attempting to smuggle firearms and ammunition into Mexico. The judge also ordered him to pay a $100 special assessment. Castro pleaded guilty to smuggling goods from the United States following a Homeland Security Investigations (HSI) probe. On Jan. 19, 2022, Castro attempted to exit the United States into Mexico in a vehicle lane at the Mariposa Port of Entry in Nogales. Castro was the driver and sole occupant of a Chevrolet Silverado pickup truck. U.S. Customs and Border Protection officials had received alerts on the Silverado and Castro related to a prior ammunition smuggling incident. Upon initial inspection of the Silverado, officers found a bag on the front seat containing a loaded .22-caliber revolver. While inspecting the vehicle, they found two high-capacity Glock firearm magazines, four regular-capacity Glock firearm magazines, and one .22-caliber Walther firearm magazine. The firearm, ammunition, and magazines Castro intended to export to Mexico are designated on the U.S. Commerce Control List as prohibited for export from the United States into Mexico without a valid license. Castro did not have a license or any other lawful authority to export any of the items from the United States into Mexico.

https://www.ice.gov/news/releases/hsi-nogales-investigation-sends-firearms-and-ammunition-smuggler-prison-51-months

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June 8, 2023: Eric Nana Kofi Ampong Coker, age 41, of Columbia, Maryland, pleaded guilty to the illegal export of firearms to Ghana. According to his guilty plea, since 2017, Ampong Coker has purchased at least 81 firearms from three separate Maryland Federal Firearms Licensees (“FFLs”) and, in 2019, received Regulated Firearms Collector status through the Maryland State Police, which waived the restriction on the number of firearms he could purchase during a 30-day period.

https://www.justice.gov/usao-md/pr/columbia-man-pleads-guilty-illegally-exporting-firearms-ghana

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June 9, 2023: the Department of Commerce, Bureau of Industry and Security (BIS), issued a Temporary Denial Order (TDO) suspending the export privileges of the Aratos Group, a network of defense-related companies in the Netherlands and Greece, and its president, Nikolaos Bogonikolos. These actions are related to a May 22, 2023, criminal indictment issued in the Eastern District of New York and are the result of coordination by the Disruptive Technology Strike Force co-led by the Departments of Justice and Commerce. While Bogonikolos remains in custody, this action builds on the indictment by severing his company, Aratos Group, from access to U.S.-origin items and technologies. The TDO also renews the denial of export privileges against three persons – Boris Livshits, Svetlana Skvortsova, and Aleksey Ippolitov – and two companies – Advanced Web Services and Strandway, LLC – 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/3285-2023-06-09-bis-press-release-aratos-tdo-final/file and https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1524-e2862/file

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June 10, 2023: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Samet Doyduk for seven years until July 12, 2029. On July 12, 2022, Doyduk was convicted of violating 18 U.S.C. § 371 for conspiring to export firearm parts purchased in the United States to be shipped to Turkey and the Republic of Georgia. As a result of his conviction, the Court sentenced Doyduk to 15 months of imprisonment, three years of supervised release, and a $100 special assessment.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1526-e2864/file

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June 10, 2023: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Shaohua “Eric” Wang for ten years until February 2, 2030. On February 3, 2020, Wang was convicted of violating 18 U.S.C. § 371 for conspiring to willfully export from the United States to China, controlled military equipment and supplies for profit without the required licenses. As a result of his conviction, the Court sentenced Wang to 46 months of confinement, three years of supervised release, a $200 special assessment, and a $25,000 criminal fine.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1527-e2865/file

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June 10, 2023: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Jorge Jesus Sigala for five years until April 22, 2026. On April 22, 2021, Sigala was convicted of violating 18 U.S.C. § 554(a) for smuggling from the United States to Mexico various pistols. As a result of his conviction, the Court sentenced Sigala to 12 months and one day of confinement, three years of supervised release, and a $100 special assessment.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1528-e2866/file

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June 10, 2023: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Eli Espinoza for ten years until December 14, 2030. On December 14, 2020, Espinoza was convicted of violating 18 U.S.C. § 554(a) for smuggling and attempting to smuggle from the United States to Mexico firearms components to include, front trunnion, AK bolt body, upper hand guard and gad tube, rear sight block, recoil spring rear guide, dust cover, trigger for semi-automatic rifle, bolt carrier assembly, and bolt catch, without a license or written approval from the US Department of Commerce. As a result of his conviction, the Court sentenced Espinoza to 63 months of confinement, three years of supervised release, and a $100 assessment.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1530-e2868/file

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June 10, 2023: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Khalid Jarrah for ten years until August 11, 2031. On August 11, 2021, Jarrah was convicted of violating 18 U.S.C. § 371 for conspiring to knowingly, intentionally, and willfully engage in the business of dealing firearms without a license. As a result of his conviction, the Court sentenced Jarrah to 15 months of confinement, three years of supervised release, and a $100 assessment.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1531-e2869/file

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June 10, 2023: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Patrick Lee Sousa for ten years until October 29, 2031. On October 29, 2021, Sousa was convicted of violating 18 U.S.C. § 371 for conspiring to knowingly, intentionally, and willfully engage in the business of dealing firearms without a license. As a result of his conviction, the Court sentenced Sousa to 57 months of confinement, three years of supervised release, and a $300 assessment.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1532-e2870/file

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June 20, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with Swedbank AS (Latvia) (“Swedbank Latvia”), a subsidiary of Swedbank AB (publ), headquartered in Stockholm, Sweden. Swedbank Latvia has agreed to remit $3,430,900 to settle its potential civil liability for 386 apparent violations of OFAC’s Crimea sanctions. Throughout 2015 and 2016, a customer of Swedbank Latvia used Swedbank Latvia’s e-banking platform from an internet protocol address in Crimea to send payments to persons in Crimea through U.S. correspondent banks. The settlement amount reflects OFAC’s determination that Swedbank Latvia’s apparent violations were not voluntarily self-disclosed and were non-egregious.

https://ofac.treasury.gov/recent-actions/20230620_33 and https://ofac.treasury.gov/media/931911/download?inline

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June 20, 2023: Following the International Day for the Elimination of Sexual Violence in Conflict, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two South Sudanese individuals involved in conflict-related sexual violence (CRSV) in South Sudan. The two individuals designated have abused their positions of political and military authority to carry out acts of sexual violence against citizens of South Sudan. These designations, along with sanctions on ISIS leaders by the U.S. Department of State, represent the first time that a dedicated focus on conflict-related sexual violence —consistent with the Presidential Memorandum signed by President Biden in November 2022 —has led to the imposition of U.S. sanctions.

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

Al-Matuti, Arkan Ahmad ‘Abbas of Iraq and Syria;
Al-Rashidi, Nawaf Ahmad Alwan of Syria, Turkey, and Iraq;
Futuyo, Alfred of South Sudan; and
Nando, James of South Sudan and the Democratic Republic of the Congo.

https://home.treasury.gov/news/press-releases/jy1552 and https://ofac.treasury.gov/recent-actions/20230620

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June 23, 2023: A former member of the United States military was sentenced to 27 months in federal prison for conspiring to unlawfully export to Russia defense articles – including thermal imaging riflescopes and night vision goggles – without a license in violation of the Arms Export Control Act.

Igor Panchernikov, 41, a former Corona, California resident who once served in the United States Air Force Reserves. Panchernikov pleaded guilty on March 24 to one count of conspiracy to violate the Arms Export Control Act. He has been in federal custody since July 2022 after Israel extradited him to the United States. From December 2016 to May 2018, Panchernikov conspired with other individuals to knowingly export from the United States to Russia defense articles without obtaining from the State Department a valid license or other approval for such exports. Panchernikov’s accomplices purchased defense articles – including thermal riflescopes, weapons sights, monoculars, and night vision googles – from various online sellers located in the United States and directed the sellers to mail those items to Panchernikov’s residence in Corona.

https://www.justice.gov/usao-cdca/pr/former-us-serviceman-sentenced-27-months-prison-illegally-exporting-night-vision

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JUNE 2023 EXPORT CONTROL REGULATIONS UPDATES Read More »

MAY 2023 EXPORT CONTROL REGULATIONS UPDATES

This newsletter is a listing of the latest changes in export control regulations through May 31, 2023. 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 National Emergencies With Respect To Sudan

May 4, 2023: President Biden issued Executive Order 14098 that expanded the scope of the national emergency declared in Executive Order 13067 of November 3, 1997 (Blocking Sudanese Government Property and Prohibiting Transactions With Sudan), and expanded by Executive Order 13400 of April 26, 2006 (Blocking Property of Persons in Connection With the Conflict in Sudan’s Darfur Region), finding that the situation in Sudan, including the military’s seizure of power in October 2021 and the outbreak of inter-service fighting in April 2023, constitutes an unusual and extraordinary threat to the national security and foreign policy of the United States. The Executive Order imposed sanctions on certain persons destabilizing Sudan and undermining the goal of a democratic transition.

https://ofac.treasury.gov/media/931716/download?inline and https://ofac.treasury.gov/recent-actions/20230504

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President Biden Continues National Emergencies With Respect To The Central African Republic

May 11, 2023: 88 Fed. Reg. 30637: On May 12, 2014, by Executive Order 13667, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701–1706) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the situation in and in relation to the Central African Republic, which has been marked by a breakdown of law and order; intersectarian tension; the pervasive, often forced recruitment and use of child soldiers; and widespread violence and atrocities, including those committed by Kremlin-linked and Yevgeniy Prigozhin-affiliated entities such as the Wagner Group, and which threatens the peace, security, or stability of the Central African Republic and neighboring states.

The situation in and in relation to the Central African Republic continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States. For this reason, the national emergency declared in Executive Order 13667 on May 12, 2014, to deal with that threat must continue in effect beyond May 12, 2023. 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 declared with respect to the Central African Republic.

https://www.federalregister.gov/documents/2023/05/11/2023-10315/continuation-of-the-national-emergency-with-respect-to-the-central-african-republic

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President Biden Continues National Emergencies With Respect To The Unrestricted Acquisition And Use Of Certain Information And Communications Technology And Services Transactions

May 11, 2023: 88 Fed. Reg. 30635: On May 15, 2019, by Executive Order 13873, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by the unrestricted acquisition and use of certain information and communications technology and services transactions.

The unrestricted acquisition or use in the United States of information and communications technology or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries augments the ability of these foreign adversaries to create and exploit vulnerabilities in information and communications technology or services, with potentially catastrophic effects. This threat continues to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States. For this reason, the national emergency declared on May 15, 2019, must continue in effect beyond May 15, 2023. 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 declared in Executive Order 13873 with respect to securing the information and communications technology and services supply chain.

https://www.federalregister.gov/documents/2023/05/11/2023-10314/continuation-of-the-national-emergency-with-respect-to-securing-the-information-and-communications

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President Biden Continues National Emergencies With Respect To Yemen

May 15, 2023: 88 Fed. Reg. 31141: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency declared in Executive Order 13611 of May 16, 2012, with respect to Yemen.

https://www.federalregister.gov/documents/2023/05/15/2023-10487/continuation-of-the-national-emergency-with-respect-to-yemen

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President Biden Continued The National Emergency With Respect To The Stabilization Of Iraq

May 17, 2023: 88 Fed. Reg. 31601: President Biden Continued The National Emergency With Respect to the Stabilization of Iraq for one (1) year.

https://www.federalregister.gov/documents/2023/05/17/2023-10756/continuation-of-the-national-emergency-with-respect-to-the-stabilization-of-iraq

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

DDTC Name And Address Changes Posted To Website

May 3 through 31, 2023: 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 Hawker Pacific (Malaysia) SDN. BHD. to Jet Aviation (Malaysia) MRO SDN. BHD. due to company reorganization;
Change in Address from Sabena Technics ATP, formerly at 350, avenue Jean René Guillibert Gautier de la Lauzière, ZAC de Pichaury II, Parc du Golf Bâtiment 7, 13290 Aix-enProvence, France to Sabena technics ATP at Hangar Boussiron, Route de la Plage, 13700 Marignane, France;
Change in Address from Leonardo Electronics US Inc., 2345 Crystal Drive, Suite 901, Arlington, Virginia 22202, U.S. to 1650 Tysons Boulevard, Suite 700, McLean, Virginia, 22102;
Change in Name from Meta Mission Data Ltd to Metrea Mission Data Ltd. due to corporate reorganization;
Changes in Names and Ownership for Raytheon Anschutz GmbH due to acquisition by DMB Dr. Dieter Murmann Beteiligungsgesellschaft mbH:

Old Name	New Name
Raytheon Anschuetz GmbH Portsmouth Office Raytheon Technologies	Anschuetz UK Ltd.
Raytheon Anschütz GmbH	Anschuetz GmbH
Raytheon Anschuetz do Brasil Sistemas Marítimos Ltda.	Anschuetz do Brasil Sistemas Maritimos Ltda.
Raytheon Anschuetz Singapore Pte. Ltd.	Anschuetz Singapore Pte Ltd.

Changes in Names and Ownership for Cobham Aviation Services Australia’s Special Mission business due to acquisition by Leidos:

Old Name	New Name
Cobham Aviation Services Pty Ltd	Leidos Airborne Solutions Australia Pty Ltd
Cobham SAR Services Pty Ltd	Leidos SAR Services Pty Ltd
Cobham NAS Pty Ltd	Leidos NAS Pty Ltd

Change in Name and Ownership from Apsys Risk Engineering GmbH to Airbus Protect GmbH due to merger;
Change in Name of Leonardo DRS, Inc.’s Israeli subsidiary company, from RADA Electronic Industries Ltd to DRS RADA Technologies Ltd. due to corporate rebranding;
Change in Name and Address from General Electric do Brasil Ltda. formerly at Av. Magalhaes de Castro, 4800 Continental Tower, Sao Paulo, Brazil to GE Celma LTDA at Rua Alice Herve 356, Bingen, Petropolis, RJ 25669-900 Brazil due to corporate rebranding;
Change in Name from Thales Programas De Electrónica Y Comunicaciones SAU to Thales España Sistemas SAU due to corporate rebranding; and
Change in Name from SPX Corporation to SPX Technologies, Inc. due to corporate rebranding.

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The Directorate Of Defense Trade Controls Posted Five Additional FAQs Regarding The Use Of USML Category XXI In The Automated Export System

May 3, 2023: Directorate of Defense Trade Controls (DDTC) posted five additional Frequently Asked Questions regarding the use of USML Category XXI in the Automated Export System (AES).

When can I use USML Category XXI to export my commodity?
Can I use a USML Category XXI determination number that has been assigned to a different commodity?
If an item is not described in any USML category, may I then self-classify it as USML Category XXI on the license?
Who do I contact if the Automated Export System (AES) is not accepting my DDTC Determination Number for USML Category XXI?
Who has the authority to determine that an item or service is included in USML Category XXI?

See the information below regarding the U.S. Census Bureau’s Notice of Proposed Rulemaking (NPRM) for the collection of a new data element – USML Category XXI.

https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_faq_cat&topic=840e3f6cdb3bc30044f9ff621f9619c0&subtopic=e0b1d163db0ddb00d0a370131f961988#e0b1d163db0ddb00d0a370131f961988

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The Directorate Of Defense Trade Controls (DDTC) Released An Update To The “Guidance For USPAB Authorization Requests”

May 23, 2023: The Directorate of Defense Trade Controls (DDTC) has released an update to the “Guidance for USPAB Authorization Requests” document. The update (v. 1.1) includes several clarifications, with the most significant being the following:

Support documents are to be submitted in PDF format;
Clarification on how to identify USML defense service categories and related USML commodity categories in the submission letter;
Updated guidance on preparing the DS-6004 (Part 4 of the guidance document), particularly the sections on commodity information (blocks 5-6) and blocks 8-10; and
Reiterates that applicants are to address periods of U.S. residency even if they have never lived in the U.S.
Reorganizes the instructions in Section II.A to highlight that defense services are to be listed in BOLD and that the scope of defense services is limited to the specific defense articles identified in the submission.

Additionally, the USPAB submission letter template and the sample ITAR §126.13 certification letter for USPAB requests have been added as appendices to the guidance document. They will no longer be found separately on the DDTC website.

https://www.pmddtc.state.gov/sys_attachment.do?sys_id=f72d111c1b43a550d1f1ea02f54bcbdc

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The Department Of State Certified To Congress Certain Countries Are Not Cooperating Fully With United States Antiterrorism Efforts

May 23, 2023: 88 Fed. Reg. 33184: Pursuant to section 40A of the Arms Export Control Act (22 U.S.C. 2781), and Executive Order 13637, as amended, Secretary of State Antony Blinken has determined and certified to the Congress that the following countries are not cooperating fully with United States antiterrorism efforts: Cuba, Democratic People’s Republic of Korea (DPRK, or North Korea), Iran, Syria, and Venezuela.

https://www.federalregister.gov/documents/2023/05/23/2023-10903/determination-and-certification-of-countries-not-cooperating-fully-with-antiterrorism-efforts

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The Directorate Of Defense Trade Controls Released New FAQs Regarding The Open General License Pilot Program

May 26, 2023: The Directorate of Defense Trade Controls (DDTC) has released new frequently asked questions (FAQs) regarding the Open General License (OGL) Pilot Program. In addition, DDTC has released updated versions of previously published OGL FAQs and related factsheets.

https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=f8d90a611bc3e990c6c3866ae54bcbd7

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U.S. Department of Defense

DSCA Notifies Congress Of Potential FMS Sale To Latvia

May 2, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DCSA) has notified Congress that the Government of Latvia has requested to buy a Naval Strike Missile Coastal Defense System (NSM CDS), including tactical, telemetered, and training missiles; containers; mobile operational platforms; integration equipment; ordnance handling equipment (OHE); training equipment and aids; technical publications and data; training; spares; U.S. Government and contractor technical and product support or assistance; and other related elements of logistical and program support. The estimated total cost is $110 million. The principal contractor is to be determined. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/latvia-naval-strike-missile-coastal-defense-system

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DSCA Notifies Congress Of Potential FMS Sale To The Czech Republic

May 3, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DCSA) has notified Congress that the Government of the Czech Republic has requested to buy equipment and services to refurbish six (6) AH-1Z and two (2) UH-1Y Excess Defense Article (EDA) helicopters. This equipment and services will include twenty-two (22) T-700 GE 401C engines (16 installed, six spares); fourteen (14) Honeywell Embedded Global Positioning System Inertial Navigation Systems (EGIs) w/Precise Positioning Service (PPS) (8 installed, 6 spares); four (4) M240 machine guns; and twenty-four (24) ARC-210 COMSEC radios. Also included is communication equipment; electronic warfare systems; support equipment; spare engine containers; flight training devices; Composite Maintenance trainer; spare and repair parts; tools and test equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total value is $650 million. The principal contractors will be Bell Helicopter, Textron, Fort Worth, TX, and General Electric Company, Lynn, MA. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/czech-republic-ah-1z-and-uh-1y-refurbishmentmodernization

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DSCA Notifies Congress Of Potential FMS Sale To Australia

May 4, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DCSA) has notified Congress that the Government of Australia has requested to buy Surveillance Towed Array Sensor System Expeditionary (SURTASS-E) mission systems for Vessels of Opportunity (VOO); a shore processing mission system, a spare SURTASS passive acoustic array; containers; communications parts and support equipment (Classified and Unclassified); software (Classified and Unclassified); publications (Classified and Unclassified); training; U.S. Government and contractor engineering support; and other related elements of logistics and program support. The estimated total cost is $207 million. The principal contractors will be Lockheed Martin-Syracuse, Syracuse, NY, and Lockheed Martin-Manassas, Manassas, VA. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/australia-surveillance-towed-array-sensor-system-expeditionary-surtass

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DSCA Notifies Congress Of Potential FMS Sale To Poland

May 9, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DCSA) has notified Congress that the Government of Poland has requested to buy thirty-four (34) AN/AAQ-33 Sniper Advanced Targeting Pods (ATP) with Shipping Containers. Also included are system support and support equipment; spare parts, consumables, accessories, and repair and return support; integration and test equipment and support; unclassified software delivery and support; unclassified Computer Program Identification Number (CPIN) systems; unclassified publications and technical documentation; personnel training and training equipment; U.S. Government and contractor engineering, technical and logistics support services; and other related elements of logistical and program support. The estimated total cost is $124.7 million.

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

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DSCA Notifies Congress Of Potential FMS Sale To Slovakia

May 11, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DCSA) has notified Congress that the Government of Slovakia has requested to buy one hundred ninety-two (192) M1278A1/A2 Heavy Gun Carriers Joint Light Tactical Vehicles (JLTVs) as well as M153 Common Remote Weapons Stations (CROWS) with Display and Control Panels (DCP); M2 Quick Change Barrels (QCB) .50 caliber machine guns; MK19 40mm grenade launchers; M2A1 machine guns; M4A1 Joint Chemical Agent Detectors; AN/VAS-5B(V)2 Driver’s Vision Enhancers (DVE); JLTV kits; special tools to support the JLTV; JLTV spare parts; M205 gun mounts; basic issue items for CROWS; CROWS DCP retrofit kits; AN/VRC-104 radio kits; 16 port network switch kits; Silent Watch energy storage kits; DVE installation kits; M4A1 detector kits; M1114 turret rings and hatches; Maintenance Support Devices (MSD) with wireless at-platform test sets; Driver’s Vision Enhancer (DVE) sensor modules; display control modules; bracket assembly; electronics components assembly; CROWS appended trainers; CROWS diagnostic kits; CROWS maintenance tool sets; M2 Small Arms Tool Kits; Small Arms MK19 Tool Kits; M2 spare parts; MK93 weapon mounts; Toughbook laptops with interactive electronic technical manuals (IETM) and cables; JLTV contractor spare parts support; CROW Systems spare parts support; Maintenance Support Items (MSI) in support of MK19; MK19 Mod III spare parts support; CROWS spare parts; CROWS Basic Issue Items (BII) boresight kit components; Total Package Fielding; Field Service Representative support; U.S. government technical assistance; training; technical publications/manuals; and other related elements of logistics and program support. The estimated cost is $250 million.

https://www.dsca.mil/press-media/major-arms-sales/slovakia-m1278a1a2-heavy-gun-carriers-joint-light-tactical-vehicles

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DSCA Notifies Congress Of Potential FMS Sale To Germany

May 11, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DCSA) has notified Congress that the Government of Germany has requested to buy sixty (60) CH-47F Block II Cargo Helicopters with customer-unique modifications; one hundred forty (140) T-55-GA-714A engines (120 installed, 20 spares); seventy-two (72) AN/AAR-57 Common Missile Warning Systems (CMWS) (60 installed, 12 spares); and two hundred eighty-four (284) AN/ARC-231A Communications Security (COMSEC) radios (240 installed, 44 spares). Also included are AN/AVR-2B Laser Detecting Sets; AN/APR-39C(V)1 Radar Detecting Sets; AN/ARC-220 High Frequency (HF) radios with electronic counter-countermeasures (ECCM); military Precise Positioning Service (PPS) (to include SAASM or M-Code); Digital Advanced Flight Control Systems (DAFCS); AN/APX-123A Identification Friend or Foe (IFF) transponder; AN/ARN-147 very high frequency (VHS) omnidirectional range and instrument landing system (VOR/ILS); AN/ARN-153 Tactical Air Navigation Systems (TACAN); air data computers; AN/APN-209 radar altimeter systems; AN/PYQ-10 simple key loaders; KIV-77 Mode 4/5 IFF Applique; KY-100M narrowband/wideband terminal COMSEC devices; AN/AVS-6 Night Vision Devices (NVD); IDM-401 Improved Data Modem; air-to-air refueling probes; M134 gun mounts; Infrared Suppression System (IRSS); Engine Air Particle Separator (EAPS); Ballistic Protection System (BPS) with Cockpit; cabin sides; Midas Underfloor COOLS; Extended Range Fuel System (ERFS) 800 gal and 500 gal; Forward Area Refueling Equipment (FARE); Tie Down Materiel/Helicopter Under-Slung Load Equipment (HUSLE) for internal and external loads; rotorbrake; rescue hoists; Fast Rope Insertion/Extraction System (FRIES); Electro Optical Infrared Sensors (EO/IR); crash resistant pilot and troop seats; skis; life rafts; litter straps and fittings; mission equipment (e.g., jungle penetrator; litter basket; Jacob’s ladder; Airborne Tactical Extraction Platform (AirTEP); special tools and test equipment; ground support equipment; airframe and engine spare parts; technical data; publications; Maintenance Work Orders/Engineering Change Proposals (MWO/ECPs); Repair and Return (R&R); technical assistance; airworthiness assistance; transportation of aircraft; training; flight training and maintenance trainers; and other related elements of logistics and program support. The total estimated cost is $8.5 billion. The principal contractor will be Boeing Helicopter Company, Philadelphia, PA. There are no known offset agreements proposed in connection with this potential sale.

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

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DSCA Notifies Congress Of Potential FMS Sale To Ukraine

May 24, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Ukraine has requested to buy the National Advanced Surface-to-Air Missile System (NASAMS), which includes: one (1) AN/MPQ-64F1 Sentinel Radar. Also included are a Fire Distribution Center (FDC); canister launchers, secure communications, GPS receivers, code loaders, and cable sets; tool kits; test equipment; support equipment; prime movers; generators; technical documentation; spare parts; U.S. Government and contractor technical support; and other related elements of logistics and program support. The total estimated cost is $285 million. The principal contractor will be Raytheon Missiles and Defense, Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/ukraine-national-advanced-surface-air-missile-system-nasams

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Department of Commerce

The U.S. Department of Commerce Revised NIST 800-17

May 2023: The U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) has published on its website NIST 800-171 Rev. 3 – Protecting Controlled Unclassified Information in Nonfederal Systems and Organizations. This update to NIST SP 800-171 represents over one year of data collection, technical analyses, customer interaction, redesign, and development of the security requirements and supporting information for the protection of Controlled Unclassified Information (CUI). Many trade-offs have been made to ensure that the technical and non-technical requirements have been stated clearly and concisely while also recognizing the specific needs of both federal and nonfederal organizations. Significant changes NIST SP 800-171, Revision 3 include:

Updates to the security requirements and families to reflect updates in NIST SP 800-53, Revision 5 and the NIST SP 800-53B moderate control baseline;
Updated tailoring criteria;
Increased specificity for security requirements to remove ambiguity, improve the effectiveness of implementation, and clarify the scope of assessments;
Introduction of organization-defined parameters (ODP) in selected security requirements to increase flexibility and help organizations better manage risk; and
A prototype CUI overlay.

https://nvlpubs.nist.gov/nistpubs/SpecialPublications/NIST.SP.800-171r3.ipd.pdf

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

The Department Of Commerce Is Strengthening Its Existing Sanctions Under The EAR Against Russia And Belarus

May 23, 2023: 88 Fed. Reg. 33422: In response to the Russian Federation’s (Russia’s) ongoing aggression against Ukraine, as substantially enabled by Belarus, the Department of Commerce is strengthening its existing sanctions under the Export Administration Regulations (EAR) against Russia and Belarus, including by expanding the scope of the EAR’s Russian and Belarusian Industry Sector Sanctions and by expanding the foreign direct product rule that currently applies to Russia and Belarus to apply to the temporarily occupied Crimea region of Ukraine as well. Additionally, this rule revised recent restrictions targeting Iran’s supply of Unmanned Aerial Vehicles to Russia. This rule also refined existing export controls on Russia and Belarus. The Department of Commerce is taking these actions to enhance the effectiveness of its controls on these countries and to better align them with those implemented by U.S. allies and partners.

The rule added the remaining HTS-6 Codes under three entire harmonized tariff system chapters (Chapters 84, 85, and 90; now over 2,000 total entries) to the industrial and commercial controls listed in Supplement No. 4 to Part 746 of the EAR so that every HTS-6 Code under these three chapters is now controlled. The items added in this rule include a variety of electronics, instruments, and advanced fibers for the reinforcement of composite materials, including carbon fibers. This comprehensive approach seeks to further cut off Russia’s access to any items of potential military application within these chapters and deny Russia additional resources it needs to continue waging war, while also simplifying the compliance decisions for persons trading in these items as all items in these chapters now require a license.
The rule also added certain additional chemicals to Supplement No. 6 to part 746 of the EAR, which consists of discrete chemicals, biologics, fentanyl, and its precursors, and related equipment designated EAR99 that may be useful for Russia’s industrial capability or may be diverted from Belarus to Russia for these activities of concern.

The rule expanded the list of foreign-produced items in Supplement No. 7 to part 746 of the EAR that require a license when destined to Russia, Belarus, and Iran to make the EAR’s controls stronger, more effective, and easier to understand and further limit Iran’s ability to support Russia’s military aggression against Ukraine by providing unmanned aerial vehicles or UAVs. This addition builds on the rule issued on February 24, 2023, that created Supplement No. 7, which identifies a number of priority items of concern and that is being used to advance counter-evasion efforts.
Expanding the destination scope of the Russia/Belarus Foreign-Direct Product (FDP) Rule, as well as other conforming changes. The rule applies the Russia/Belarus FDP Rule to the temporarily occupied Crimea region of Ukraine, thereby making it more difficult for items to be procured for Russia’s use in Crimea in support of its ongoing military aggression in Ukraine.

https://www.bis.doc.gov/index.php/documents/regulations-docs/federal-register-notices/federal-register-2023/3276-88-fr-33422/file

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U.S. Census Bureau

The U.S. Census Bureau Announced The Proposal For The Collection Of A New Data Element – USML Category XXI

May 3, 2023: The Department of Commerce, U.S. Census Bureau published a Notice of Proposed Rulemaking (NPRM). This NPRM announces the proposal for the collection of a new data element – USML Category XXI Determination Number – in the Automated Export System (AES) when USML Category XXI is selected under the DDTC United States Munitions List (USML) Category Code field.

This Department of State, Directorate of Defense Trade Controls (DDTC) proposed collection will help ensure that only commodities that have been determined to be controlled in USML Category XXI by the Director of DDTC’s Office of Defense Trade Controls Policy can be declared as such in AES. Technical details on the new data element and new response message are found below. The AESDirect web application was updated on May 9, 2023, to accept the proposed new data element and return the new response message.

https://www.govinfo.gov/content/pkg/FR-2023-05-03/pdf/2023-09322.pdf)

Editors note: see the article on page 4.

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The U.S. Census Bureau and DDTC Revert The AES Requirement of USML Category XXI And Response Message 5C2

May 9, 2023: the US Census Bureau, US Customs and Border Protection, and the Directorate of Defense Trade Control reverted the Automated Export System (AES) requirement of the Category XXI Determination Number data element when the USML Category XXI is entered. Additionally, the related Response Message 5C2 in the AES has been disabled. The original intent of the AES Broadcast on May 3, 2023, was to raise awareness to filers of USML Category XXI items of the Notice of Proposed Rulemaking (NPRM).

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AES Tips On How To Address The Most Frequent AES Response Messages

May 18, 2023: When a shipment is filed to the AES, a system response message is generated and indicates whether the shipment has been accepted or rejected. If the shipment is accepted, the AES filer receives an Internal Transaction Number (ITN) as confirmation. Though the shipment is accepted, the filer may still receive a Verify Message, Compliance Alert, Informational Message, or Warning Message along with their ITN. However, if the shipment is rejected, a Fatal Error notification is received and must be corrected to receive a valid ITN.

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

Response Code: 256

Narrative: USPPI Postal Code Not Valid for State

Severity: Fatal

Reason: The Postal Code and State Code reported in the USPPI Address do not match.

Resolution: The reported USPPI State Code must match the state associated with the Postal Code.

Verify the USPPI State Code and Postal Code combination, correct the shipment, and resubmit.

Response Code: 522

Narrative: Shipping Weight Exceeds Max Air Threshold

Severity: Fatal

Reason: The Mode of Transportation is reported as Air, and the Shipping Weight reported exceeds the maximum threshold allowed for an air shipment.

Resolution: The maximum Shipping Weight allowed for an air shipment is 150,000 kilograms (for other than fly-away aircraft).

Verify the Shipping Weight and Mode of Transportation, correct the shipment, and resubmit.

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Department of Treasury’s Office of Foreign Assets Control (OFAC)

The U.S. Department Of Treasury’s Office Of Foreign Assets Control (OFAC), The European External Action Service (EEAS), And The European Commission Directorate-General For Financial Stability, Financial Services And Capital Markets Union (DG FISMA) Exchanged Best Practices And Strengthened Working Relationships

May 16, 2023: The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC), the European External Action Service (EEAS), and the European Commission Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) concluded a multi-day technical meeting in Brussels, exchanging best practices and strengthening working relationships. The purpose of the meeting was to share sanctions expertise to enhance and improve the capabilities of those at the forefront of sanctions design, implementation, and compliance. OFAC, EEAS, and DG FISMA identified ways to align the implementation of sanctions, promote compliance, strengthen enforcement, and address shared foreign policy challenges. The teams also explored methods to ensure that sanctions do not prevent humanitarian trade and assistance from reaching those in need and that persons in sanctioned jurisdictions preserve their internet freedom. The partners have been working together to provide coordinated information to the compliance community and will continue to update and maintain their sanctions-related lists and published guidance.

https://home.treasury.gov/news/press-releases/jy1485

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Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) and Commerce’s Bureau of Industry and Security (BIS)

FinCEN And BIS Issued A Joint Supplemental Alert Urging Continued Vigilance For Potential Russian Export Control Evasion

May 19, 2023: Treasury’s Financial Crimes Enforcement Network (FinCEN) and Commerce’s Bureau of Industry and Security (BIS) have issued a joint supplemental alert urging continued vigilance for potential Russian export control evasion. This supplemental alert builds on FinCEN and BIS’s first joint alert, issued in June 2022, and provides financial institutions additional information with respect to new BIS export control restrictions relating to Russia. The alert also reinforces ongoing U.S. government engagements and initiatives designed to further constrain and prevent Russia from accessing needed technology and goods to supply and replenish its military and defense industrial base. It details evasion typologies and identifies additional transactional and behavioral red flags to assist financial institutions.

https://www.fincen.gov/sites/default/files/shared/FinCEN%20and%20BIS%20Joint%20Alert%20_FINAL_508C.pdf

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International Export Controls

Japan Tightens Export Controls On Manufacturing Equipment For Cutting-Edge Semiconductors

May 23, 2023: Japan’s trade ministry revised an ordinance to tighten export controls on manufacturing equipment for cutting-edge semiconductors. The revised ministry ordinance will take effect on July 23.

Japan’s tighter export controls will cover 23 items, including devices to remove impurities generated in the semiconductor manufacturing process and lithography equipment essential for semiconductor production. The newly added items also include manufacturing equipment for extreme ultraviolet lithography and etching equipment for stacking memory devices in three dimensions.

Under the Foreign Exchange and Foreign Trade Act, Japan regulates the export of weapons and other goods that can be converted to military applications. Such exports require prior approval from the Minister of Economy, Trade and Industry.

The 23 items to be added will require individual permissions unless they are destined for 42 countries and regions designated friendly. This makes exports to China and certain other countries much more selective.

The move comes after the United States, in October of 2022, tightened restrictions on exports to China of semiconductor manufacturing equipment and technologies that could be diverted for military use.

The United States then called on Japan, as well as the Netherlands, both home to major semiconductor manufacturing equipment makers, to take similar steps.

https://www.nippon.com/en/news/yjj2023052301027/japan%E2%80%99s-tighter-semiconductor-export-controls-to-take-effect-in-july.html and https://asia.nikkei.com/Business/Tech/Semiconductors/Japan-chip-export-curb-to-China-will-take-effect-in-July

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 19, 2023: In coordination with the G7, Australia, and other partners, the United States imposed new sanctions on Russia for its illegal war in Ukraine. These actions implement new commitments made at the G7 Leaders’ Summit and demonstrate shared resolve to hold Russia accountable for its mounting atrocities in Ukraine. These sanctions also reinforce the commitment the United States and its partners have made to taking action against those who aid the Kremlin in Ukraine by circumventing our sanctions and export control measures.

As part of these actions, the Department of State imposed sanctions on or identifying as blocked property over 200 entities, individuals, vessels, and aircraft. These actions include designations of targets across Russia’s defense and related material, technology, and metals and mining sectors. These actions also include the designation of entities and individuals involved in expanding Russia’s future energy production and capacity. The Department of State will continue to target entities and individuals that have engaged in the systematic and unlawful deportation of Ukraine’s children and the theft and transportation of stolen grain from Ukraine.

These actions also include designations of an international network of entities engaged in the procurement of components for the Russia-based entity responsible for the manufacture of the Orlan drone, which Russian forces are currently employing in their illegal war against Ukraine, and the Russia-installed puppet authorities in parts of Ukraine’s territory.

The Department of State took these steps in coordination with further sanctions being imposed by the Department of the Treasury and additional export control measures announced by the Department of Commerce.

https://www.state.gov/united-states-imposes-additional-sanctions-and-export-controls-on-russia-in-coordination-with-international-partners/

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

May 5, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an order renewing the temporary denial of export privileges for an additional 180 days of 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.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1500-e2839/file

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May 12, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order renewing the temporary denial of export privileges of Rossiya Airlines of St. Petersburg, Russia, for an additional 180 days.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1506-e2845/file

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May 16, 2023: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) issued a Temporary Denial Order (TDO) suspending the export privileges of Florida company MIC P&I, LLC, Russian airline Smartavia, freight forwarder Intermodal Maldives, and Oleg Patsulya and Vasilii Besedin, two Russian nationals residing in Florida, for diverting civilian aircraft parts to Russia.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1507-e2846/file

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May 19, 2023: 88 Fed. Reg. 32640: The Department of Commerce is amending the Export Administration Regulations (EAR) by adding seventy-one 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 Armenia, Kyrgyzstan, and Russia.

Armenia:

Medisar, LLC.

Kyrgyzstan:

Ya, LLC.

Russia:

Closed Joint Stock Company Special Design Bureau;
Federal State Enterprise Kazan State Gunpowder Plant;
Federal State Unitary Enterprise Central Scientific Research Institute of Chemistry and Mechanics;
Federal State Unitary Enterprise Rostov-On-Don Research Institute of Radio Communications;
Informtest Firm Limited Liability Company;
Joint Stock Company 150 Aircraft Repair Plant;
Joint Stock Company 810 Aircraft Repair Plant;
Joint Stock Company Arzamas Instrument-Making Plant named after P.I. Plandin;
Joint Stock Company Bryansk Automobile Plant;
Joint Stock Company Central Research Institute Burevestnik;
Joint Stock Company Central Research Institute of Automation and Hydraulics;
Joint Stock Company Concern Avrora Scientific and Production Association;
Joint Stock Company Concern Central Institute for Scientific Research Elektropribor;
Joint Stock Company Concern Morinformsystem Agat;
Joint Stock Company Concern Okeanpribor;
Joint Stock Company Dux;
Joint Stock Company Eastern Shipyard;
Joint Stock Company ENICS;
Joint Stock Company Information Satellite Systems Named After Academician M.F. Reshetnev;
Joint Stock Company Izhevsk Electromechanical Plant Kupol;
Joint Stock Company Kazan Optical-Mechanical Plant;
Joint Stock Company Khabarovsk Shipbuilding Yard;
Joint Stock Company Machine Building Company Vityaz;
Joint Stock Company Management Company Radiostandard;
Joint Stock Company Marine Instrument Engineering Corporation;
Joint Stock Company Nevskoe Design Bureau;
Joint Stock Company NII Gidrosvyazi Shtil;
Joint Stock Company Nizhny Novgorod Plant of the 70th Anniversary of Victory;
Joint Stock Company Northern Production Association Arktika;
Joint Stock Company Perm Machine Building Plant;
Joint Stock Company Precision Engineering Design Bureau named after A.E. Nudelman;
Joint Stock Company Production Complex Akhtuba;
Joint Stock Company Project Design Bureau RIO;
Joint Stock Company Ratep;
Joint Stock Company Scientific Production Association Impulse;
Joint Stock Company Scientific Production Association Orion;
Joint Stock Company Scientific Production Association Russian Basic Information Technologies;
Joint Stock Company Scientific Production Association Volna Plant;
Joint Stock Company Scientific Production Center of Automatics and Instrument Building Named After Academician N.A. Pilyugin;
Joint Stock Company Scientific Production Concern Tekhmash;
Joint Stock Company Scientific Research Engineering Institute;
Joint Stock Company Scientific Research Institute of Computing Complexes Named After M.A. Kartsev;
Joint Stock Company Scientific Technical Institute Radiosvyaz;
Joint Stock Company Taganrog Plant Priboy;
Joint Stock Company Tula Cartridge Works;
Joint Stock Company Tula Machine-Building Plant;
Joint Stock Company Ulan-Ude Aviation Plant;
Joint Stock Company Ulyanovsk Cartridge Works;
Joint Stock Company Ulyanovsk Mechanical Plant;
Joint Stock Company Ural Automotive Plant;
Joint Stock Company Ural Works of Civil Aviation;
Joint Stock Company Vodtranspribor;
Joint Stock Company Zavod Elecon;
Joint Stock Company Zavolzhskiy Plant of Caterpillar Tractors;
Joint Stock Company Zelenodolsk Plant Named After A.M. Gorky;
Machine Building Group Limited Liability Company;
Military Industrial Company Limited Liability Company;
Open Joint Stock Company Degtyaryov Plant;
Promtekhnologiya Limited Liability Company;
Public Joint Stock Company Kurganmashzavod;
Public Joint Stock Company Motovilikha Plants;
Public Joint Stock Company Proletarsky Plant;
Public Joint Stock Company Rostvertol;
Public Joint Stock Company Scientific Production Association Strela;
Scientific Production Association Izhevsk Unmanned Systems Limited Liability Company;
Scientific Production Enterprise Prima Limited Liability Company;
United Machine Building Group Limited Liability Company;
Volgograd Machine Building Company Limited Liability Company; and
VXI-Systems Limited Liability Company

https://www.federalregister.gov/documents/2023/05/22/2023-10684/addition-of-entities-to-the-entity-list

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

May 1, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Venezuela General License 42, “Authorizing Certain Transactions Related to the Negotiation of Certain Settlement Agreements with the IV Venezuelan National Assembly and Certain Other Persons.” In addition, OFAC published three new Frequently Asked Questions (1123, 1124, 1125) and amended one Frequently Asked Question (808).

Venezuela General License 42: All transactions prohibited by the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), that are ordinarily incident and necessary to the negotiation of settlement agreements with the IV Venezuelan National Assembly seated on January 5, 2016 (“IV National Assembly”), its Delegated Commission, any entity established by, or under the direction of, the IV National Assembly to exercise its mandate (“IV National Assembly Entity”), or any person appointed or designated by, or whose appointment or designation is retained by, an IV National Assembly Entity, relating to any debt of 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 are authorized.

Note 1. The authorization referenced above of this general license includes the negotiation of settlement agreements with persons appointed or designated by, or whose appointment or designation is retained by, an IV National Assembly Entity to the board of directors (including any ad hoc boards of directors), or as an executive officer of a Government of Venezuela entity (including entities owned or controlled, directly or indirectly, by the Government of Venezuela).

This general license does not authorize:

(1) Any transaction involving the Venezuelan National Constituent Assembly convened by Nicolas Maduro or the National Assembly seated on January 5, 2021, including their respective members and staff; or

(2) Any transaction otherwise prohibited by the VSR, including transactions involving any person blocked pursuant to the VSR other than the blocked persons described above, unless separately authorized.

https://ofac.treasury.gov/media/931696/download?inline

Question 1123: In Crystallex Int’l Corp. v. Bolivarian Republic of Venezuela, 17-mc-00151 (D. Del.), the U.S. District Court for the District of Delaware has entered a Sale Procedures Order with respect to certain shares in PDV Holding (PDVH) to satisfy a U.S. district court judgment confirming an arbitral award against Venezuela. May persons participate in or comply with steps relating to a judicial sale of such shares?

Answer: OFAC will not take enforcement action against any individuals or entities for participating in, facilitating, or complying with the prefatory steps set out in the court’s Sale Procedures Order, or for engaging in transactions that are ordinarily incident and necessary to participating in, facilitating, or complying with such steps (such as serving as potential or actual credit counterparties). See also General License 42 and OFAC Frequently Asked Question (FAQ) 1125. As recognized by the judge in the Crystallex case, an additional license will be required before any sale is executed. As is standard for OFAC’s process before providing a license for the disposition of blocked property, the United States Government will engage in due diligence about the identity of a potential purchaser and will consider relevant details of the proposed transaction. Before a potential purchaser has been identified, it would be premature to issue any such license or express a definitive view on the issuance of a specific license in a future scenario. OFAC nevertheless intends to implement a favorable licensing policy toward such license applications in connection with the execution of a sale as contemplated in the Sale Procedures Order. As with all OFAC licenses and statements of licensing policy, this licensing policy would be without prejudice to reconsideration if U.S. foreign policy and national security interests materially change. In making these licensing determinations, OFAC is committed to fair and equivalent treatment of potential creditors.

This non-enforcement posture applies to OFAC sanctions only and does not relieve persons of obligations to comply with any other applicable regulatory requirements, reviews, or approvals that may be necessary to finalize any sale.

Question 1124: I am a party seeking to enforce bondholder rights to the shares of CITGO Holding serving as collateral for the Petróleos de Venezuela, S.A. (PdVSA) 2020 8.5 percent bond, pending the outcome of ongoing litigation. How can I preserve or enforce my bondholder rights consistent with the Venezuela Sanctions Regulations, 31 CFR part 591 (VSR)?

Answer: OFAC will not take enforcement action against any person for taking steps to preserve the ability to enforce bondholder rights to the CITGO shares serving as collateral for the PdVSA 2020 8.5 percent bond (see also OFAC Frequently Asked Question (FAQ) 1123; General License 42 and OFAC FAQ 1125). This non-enforcement policy governs OFAC sanctions only and does not relieve persons of obligations to comply with any other applicable regulatory requirements, reviews, or approvals that may be necessary to finalize any sale. As noted in FAQ 1125, parties that have negotiated a settlement agreement pursuant to General License 42 will still need to seek a specific license for entry into that agreement.

Question 1125: I am a creditor of the Government of Venezuela, Petróleos de Venezuela, S.A. (PdVSA), or a PdVSA subsidiary. Do I need an OFAC license to negotiate the settlement of claims related to assets of the Government of Venezuela or PdVSA?

Answer: Venezuela General License (GL) 42 generally authorizes transactions prohibited by the Venezuela Sanctions Regulations, 31 CFR part 591 (VSR), that are ordinarily incident and necessary to the negotiation of settlement agreements with the IV National Assembly, its Delegated Commission, an IV National Assembly Entity, or a person appointed or designated by, or whose appointment or designation is retained by, an IV National Assembly Entity relating to any debt of the Government of Venezuela, PdVSA, or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest (a “PdVSA Subsidiary”).

For the purposes of GL 42, the term “IV National Assembly” means the IV Venezuelan National Assembly seated on January 5, 2016; GL 42 does not authorize transactions involving the Venezuelan National Constituent Assembly convened by Nicolas Maduro or the National Assembly seated on January 5, 2021. The term “IV National Assembly Entity” includes any entity established by, or under the direction of, the IV National Assembly to exercise its mandate, including persons appointed or designated by, or whose appointment or designation is retained by, an IV National Assembly Entity to the board of directors (including any ad hoc boards of directors), or as an executive officer of a Government of Venezuela entity (including entities owned or controlled, directly or indirectly, by the Government of Venezuela). Settlement agreements relating to debt include settlement agreements relating to bonds, promissory notes, and other receivables of the Government of Venezuela, PdVSA, or a PdVSA Subsidiary.

GL 42 does not authorize the entry into settlement agreements, contingent or otherwise. Parties that have negotiated a settlement agreement pursuant to GL 42 will need to seek a specific license for entry into that agreement. OFAC intends to implement a favorable licensing policy for license applications in connection with the negotiation of a settlement agreement, but as with all OFAC licenses and statements of licensing policy, specific licenses will only be granted after due diligence as to the parties and transaction, and this licensing policy would be without prejudice to reconsideration if U.S. foreign policy and national security interests materially change and may be revoked or modified at any time. GL 42 also does not authorize any transactions, including negotiation of settlement agreements, with persons blocked pursuant to the VSR other than those blocked persons enumerated in GL 42, unless separately authorized.

Question 808: Do I need a specific license from OFAC to file a suit in U.S. court against a person designated or blocked pursuant to Venezuela-related sanctions? Does a U.S. court, or its personnel, need a specific license from OFAC to hear such a case?

Answer: No. A specific license from OFAC is not required to initiate or continue U.S. legal proceedings against a person designated or blocked pursuant to the Venezuela Sanctions Regulations, 31 CFR part 591 (VSR), or for a U.S. court, or its personnel, to hear such a case. Similarly, creditors may file for writs of attachment without the need for OFAC authorization for matters involving property blocked under the VSR.

However, a specific license from OFAC is required for the entry into a settlement agreement, or for the enforcement of any lien, judgment, or other order through execution, garnishment, or other judicial process purporting to transfer or otherwise alter or affect property or interests in property blocked pursuant to the VSR.

For additional information, see 31 CFR §§ 591.309, 591.310, 591.407, and 591.506.

With respect to the specific facts and circumstances in Crystallex Int’l Corp. v. Bolivarian Republic of Venezuela, 17-mc-00151, before the U.S. District Court for the District of Delaware, please see Frequently Asked Question (FAQ) 1123. For information on general licenses that may authorize certain settlement negotiations involving persons designated or blocked pursuant to the VSR, please see OFAC FAQs 1124 and 1125.

https://ofac.treasury.gov/recent-actions/20230501 and https://ofac.treasury.gov/faqs/added/2023-05-01 and https://ofac.treasury.gov/faqs/808

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May 2, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), in a joint action with authorities in the Republic of Türkiye, designated two financial facilitators of Syria-based terrorist groups Hay’at Tahrir al-Sham (HTS) and Katibat al-Tawhid wal-Jihad (KTJ), both of which are sanctioned by the United States and the United Nations. This action continues the cooperation between the United States and Türkiye to counter the financing of terrorist groups that perpetuate violence and instability throughout the region. Concurrently, the Turkish Ministry of Treasury and Finance and the Turkish Ministry of Interior have implemented an asset freeze against these terrorist facilitators.

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

Alsheak, Omar of Turkey and Syria; and
Sari, Kubilay of Turkey.

https://home.treasury.gov/news/press-releases/jy1456 and https://ofac.treasury.gov/recent-actions/20230502

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May 4, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended one related Frequently Asked Question (836) related to President Biden’s Executive Order referenced above regarding Sudan.

Question 836: What sanctions are applicable to Sudan and the Government of Sudan?

Answer: The national emergency declared with respect to the Government of Sudan in Executive Order (E.O.) 13067 of November 3, 1997 — as expanded upon in scope by subsequent E.O.s — remains in effect. As detailed below, certain sanctions have been imposed, and others have been lifted pursuant to that national emergency in response to developments in Sudan.

The following sanctions authorities are in effect with respect to Sudan:

E.O. 14098 of May 4, 2023, among other things, authorizes the imposition of sanctions on foreign persons to address the situation in Sudan following the military’s seizure of power in October 2021 and the outbreak of inter-service fighting in April 2023 and to support a transition to democracy and the civilian transitional government in Sudan.
E.O. 13400 of April 26, 2006 imposes sanctions on individuals and entities in connection with the conflict in Darfur and, in part, implements sanctions with respect to that conflict adopted by the United Nations Security Council.

The following sanctions authorities are no longer in effect with respect to Sudan:

Effective October 12, 2017, sections 1 and 2 of E.O. 13067 of November 3, 1997, and all of E.O. 13412 of October 13, 2006, were revoked, pursuant to E.O. 13761 of January 13, 2017, as amended by E.O. 13804 of July 11, 2017. To reflect this revocation of authorities, OFAC removed the Sudanese Sanctions Regulations, 31 CFR part 538 (SSR) from the Code of Federal Regulations (CFR) on June 29, 2018. U.S. persons are not broadly prohibited from engaging in transactions with respect to Sudan or the Government of Sudan that were previously prohibited solely by the SSR. In addition, following the revocation of sections 1 and 2 of E.O. 13067 and E.O. 13412, persons designated solely pursuant to the blocking authorities of E.O. 13067 or E.O. 13412 were removed from OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List).
The determination regarding Sudan as a State Sponsor of Terrorism was rescinded on December 14, 2020. Accordingly, Sudan is no longer subject to prohibitions under the Terrorism List Governments Sanctions Regulations, 31 CFR part 596 (TLGSR), or section 906(a)(1) of the Trade Sanctions Reform and Export Enhancement Act of 2000 (22 U.S.C. 7205).

Note that the revocation of the aforementioned sanctions authorities does not affect past, present, or future OFAC enforcement investigations or actions associated with any apparent violations of the SSR that occurred prior to October 12, 2017 or of the TLGSR prior to December 14, 2020.

https://ofac.treasury.gov/faqs/836 and https://ofac.treasury.gov/recent-actions/20230504

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May 5, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 8G, “Authorizing Transactions Related to Energy”.

General License 8G: All transactions prohibited by Executive Order (E.O.) 14024 involving one or more of the following entities that are related to energy are authorized, through 12:01 a.m. Eastern daylight time, November 1, 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) Bank Zenit Public Joint Stock Company;

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

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

(11) the Central Bank of the Russian Federation.

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

https://ofac.treasury.gov/recent-actions/20230505 and https://ofac.treasury.gov/media/931721/download?inline

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May 9, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Joaquin Guzman Lopez, a son of Joaquin “El Chapo” Guzman Loera and the fourth member of Los Chapitos—as well as three Sinaloa Cartel members and two Mexico-based entities pursuant to Executive Order (E.O.) 14059. Those sanctioned are part of a Sinaloa Cartel network overseen by Los Chapitos and responsible for a significant portion of the illicit fentanyl and other deadly drugs trafficked into the United States.

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

Guzman Lopez, Joaquin of Mexico;
Ogazon Sedano, Mario Esteban of Mexico;
Paez Lopez, Saul of Mexico; and
Perez Uribe, Raymundo of Mexico.

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

Sumilab, S.A. DE C.V., of Mexico; and
Urbanizacion, Inmobiliaria Y Construccion De Obras, S.A. DE C.V., of Mexico.

https://home.treasury.gov/news/press-releases/jy1467 and https://ofac.treasury.gov/recent-actions/20230509

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May 16, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Mikhail Matveev (Matveev) for his role in launching cyberattacks against U.S. law enforcement, businesses, and critical infrastructure. Concurrently, the U.S. District Courts for the District of New Jersey and the District of Columbia unsealed indictments against Matveev. Additionally, the U.S. Department of State announced an award of up to $10 million for information that leads to the arrest and/or conviction of Matveev under its Transnational Organized Crime Rewards Program.

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

Matveev, Mikhail Pavlovich of Russia.

https://home.treasury.gov/news/press-releases/jy1486 and https://ofac.treasury.gov/recent-actions/20230516

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May 17, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended the South Sudan Sanctions Regulations and reissued them in their entirety.

https://ofac.treasury.gov/media/931756/download?inline and https://ofac.treasury.gov/recent-actions/20230517

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May 17, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) settled with Murad, LLC for $3,334,286 and with a former senior executive of Murad, LLC for $175,000 related to apparent violations of the Iranian Transactions and Sanctions Regulation. Murad, LLC (the “Company”), a cosmetics company based in El Segundo, California, has agreed to pay $3,334,286 to settle its potential civil liability for an apparent violation of OFAC sanctions on Iran. This apparent violation resulted from the Company’s participation in a conspiracy to engage in the unauthorized export of goods and services from the United States to Iran over an approximately eight-year period. The conspiracy, which ended in 2018, resulted in at least 62 exports of Company products, as well as the export of services to Iran, totaling more than $11 million. OFAC determined that the Company voluntarily self-disclosed its violation following its acquisition by Unilever United States, Inc. (“Unilever US”) and that the Company’s apparent violation was egregious.

A former senior Company executive (“U.S. Person-1”) has separately agreed to pay $175,000 to settle their potential civil liability for three apparent violations of OFAC’s Iran sanctions arising from their role as a manager at the Company. These apparent violations occurred between June 2016 and September 2017. OFAC determined that U.S. Person-1’s apparent violations were not voluntarily self-disclosed and that their conduct was egregious.

https://ofac.treasury.gov/media/931761/download?inline

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May 19, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 13E, “Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024;” General License 66, “Authorizing the Wind Down of Transactions Involving Public Joint Stock Company Polyus;” General License 67, “Authorizing Certain Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Public Joint Stock Company Polyus;” and General License 68, “Authorizing the Wind Down of Transactions Involving Certain Universities and Institutes.”

General License 13E: 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 daylight time, August 17, 2023.

https://ofac.treasury.gov/media/931786/download?inline

General License 66: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind-down of any transaction involving Public Joint Stock Company Polyus, or any entity in which Public Joint Stock Company Polyus owns, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern daylight time, August 17, 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://ofac.treasury.gov/media/931791/download?inline

General License 67: 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 Polyus, or any entity in which Public Joint Stock Company Polyus owns, directly or indirectly, a 50 percent or greater interest, purchased prior to May 19, 2023 (“covered debt or equity”), to a non-U.S. person are authorized through 12:01 a.m. eastern daylight time, August 17, 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 daylight time, May 19, 2023, are authorized through 12:01 a.m. eastern daylight time, August 17, 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 daylight time, May 19, 2023, that (i) include a blocked person as a counterparty or (ii) are linked to covered debt or equity are authorized through 12:01 a.m. eastern daylight time, August 17, 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://ofac.treasury.gov/media/931796/download?inline

General License 68: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind-down of any transaction involving one or more of the following blocked persons are authorized through 12:01 a.m. Eastern daylight time, July 18, 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):

(1) Federal State Budgetary Educational Institution of Higher Education Grozny State Oil Technical University Named After Academician M.D. Millionshchikov;

(2) Federal State Budget Educational Institution of Higher Education Saint Petersburg Mining University;

(3) Federal State Budgetary Educational Institution of Higher Education Sergo Ordzhonikidze Russian State University for Geological Prospecting;

(4) Federal State Budgetary Educational Institution of Higher Vocational Education Gubkin Russian State University of Oil and Gas;

(5) State Budgetary Educational Institution of Higher Education Almetyevsk State Oil Institute; or

(6) 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://ofac.treasury.gov/media/931801/download?inline

OFAC also issued Russia-related Directive 4 under Executive Order (E.O.) 14024, as amended, and updating Frequently Asked Questions (FAQs) 998-1002, 1004-1005, and 1118 to reflect the amendment. Russia-related Directive 4, as amended, imposes an additional reporting requirement on U.S. persons to identify assets of entities subject to Russia-related Directive 4, as amended, which U.S. persons may hold. U.S. persons must submit a report to OFACreport@treasury.gov on or before June 18, 2023, and annually thereafter, on property in their possession or control with an interest, direct or indirect of an entity subject to Russia-related Directive 4, as amended (see FAQ 998). Note that existing licenses or authorizations issued by OFAC pursuant to the prior version of Russia-related Directive 4 remain in effect.

Directive 4 under Executive Order (E.O.) 14024: Pursuant to sections 1(a)(iv), 1(d), and 8 of Executive Order 14024, “Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation” (the “Order”), the Director of the Office of Foreign Assets Control has determined, in consultation with the Department of State, that the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation are political subdivisions, agencies, or instrumentalities of the Government of the Russian Federation, and that the following activities by a United States person are prohibited, except to the extent provided by law, or unless licensed or otherwise authorized by the Office of Foreign Assets Control: any transaction involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation, including any transfer of assets to such entities or any foreign exchange transaction for or on behalf of such entities. All other activities with entities determined to be subject to the prohibitions of this Directive, or involving their property or interests in property, are permitted, provided that such activities are not otherwise prohibited by law, the Order, or any other sanctions program implemented by the Office of Foreign Assets Control.

Except to the extent otherwise provided by law or unless licensed or otherwise authorized by the Office of Foreign Assets Control, the following are also prohibited:

(1) any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions of this Directive; and

(2) any conspiracy formed to violate any of the prohibitions of this Directive.

https://ofac.treasury.gov/media/918806/download?inline

Frequently Asked Questions:

Question 998: What are the requirements of Directive 4 under Executive Order (E.O.) 14024, “Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation,” as amended (Russia-related Sovereign Transactions Directive)?

Answer: The Russia-related Sovereign Transactions Directive prohibits U.S. persons from engaging in any transaction involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation (collectively, “Directive 4 entities”), including any transfer of assets to such entities or any foreign exchange transaction for or on behalf of such entities. Effective February 28, 2022, U.S. persons may not engage in any transactions involving these entities unless exempt or authorized by the Office of Foreign Assets Control (OFAC). This includes both direct and indirect transactions involving any Directive 4 entity. Prohibited transactions include trade or financial transactions and other dealings in which U.S. persons may not engage unless exempt or expressly authorized by OFAC.

The Russia-related Sovereign Transactions Directive also prohibits: (1) any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions of the Russia-related Sovereign Transactions Directive; and (2) any conspiracy formed to violate any of the prohibitions of the Russia-related Sovereign Transactions Directive.

This action effectively immobilizes any assets of the Directive 4 entities that are held in the United States or by U.S. persons, wherever located, unless exempt or authorized by OFAC.

Effective February 28, 2022, U.S. financial institutions must reject transactions involving any Directive 4 entity, unless exempt or authorized by OFAC, and file a report within ten business days in accordance with 31 CFR § 501.604. OFAC issued general licenses that authorize certain limited transactions involving the Directive 4 entities (see FAQ 999).

On May 19, 2023, OFAC amended Directive 4 to require U.S. persons to submit a report to OFACreport@treasury.gov on or before June 18, 2023, and annually thereafter by June 30, regarding property in their possession or control in which any Directive 4 entity has an interest of any nature whatsoever, direct or indirect. This reporting requirement is intended to identify assets of Directive 4 entities held by U.S. persons as of May 31, 2023, and annually thereafter, and is separate from the above-noted requirement under 31 CFR 501.604 to file reports on rejected transactions involving any Directive 4 entity.

Entities determined to be subject to the Russia-related Sovereign Transactions Directive are listed on OFAC’s Non-SDN Menu-Based Sanctions (NS-MBS) List.

https://ofac.treasury.gov/faqs/998

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

Answer: OFAC issued Russia-related General License (GL) 8G to authorize certain energy-related transactions involving the Central Bank of the Russian Federation that would be prohibited by the Russia-related Sovereign Transactions Directive (see FAQs 976 and 977).

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

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

Note that GL 8G, GL 13E, and GL 14 continue to authorize against the Russia-related Sovereign Transactions Directive.

https://ofac.treasury.gov/faqs/999

Question 1000: What sanctions are applicable to the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation?

Answer: The Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation are subject to several restrictions under the following directives:

Effective February 28, 2022, Directive 4 under Executive Order (E.O.) 14024, “Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation,” as amended (Russia-related Sovereign Transactions Directive), prohibits U.S. persons from engaging in any transaction involving these entities, including any transfer of assets to such entities or any foreign exchange transaction for or on behalf of such entities. The Russia-related Sovereign Transactions Directive was amended on May 19, 2023, to include a reporting requirement. (see FAQ 998)
Pursuant to Directive 1A under E.O. 14024, “Prohibitions Related to Certain Sovereign Debt of the Russian Federation” (Russia-related Sovereign Debt Directive), the following activities by a U.S. financial institution are prohibited:
- As of June 14, 2021, participation in the primary market for ruble or non-ruble denominated bonds issued after June 14, 2021, by the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation;
- As of June 14, 2021, lending ruble or non-ruble denominated funds to the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation; and
- As of March 1, 2022, participation in the secondary market for ruble or non-ruble denominated bonds issued after March 1, 2022, by the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation (see FAQ 888).

Effective August 19, 2019, the Russia-Related Directive (the “CBW Act Directive”) prohibits U.S. banks from participating in the primary market for non-ruble denominated bonds issued by the Russian sovereign and also prohibits U.S. banks from lending non-ruble denominated funds to the Russian sovereign. The CBW Act Directive defines the term “Russian sovereign” as any ministry, agency, or sovereign fund of the Russian Federation, including the Central Bank of the Russian Federation, the National Wealth Fund, and the Ministry of Finance of the Russian Federation (see FAQs 675 and 676).

The Russia-related Sovereign Transactions Directive includes prohibitions more expansive than the Russia-related Sovereign Debt Directive and the CBW Act Directive; however, it is important to note that each directive operates independently of the others and may have different effective dates. Transactions involving these entities must comply with all three directives described above.

Furthermore, OFAC published a Determination Pursuant to Section 1(a)(i) of E.O. 14024 and a Determination Pursuant to Section 1(a)(ii) of E.O. 14071. OFAC published three associated FAQs and removed FAQs 964, 1037, and 1085, which were incorporated into new FAQs 1126-1128. These changes consolidate OFAC’s general guidance pertaining to Russia-related sector and service determinations. OFAC is also amending FAQs 1059 and 1061-1062.

In addition, OFAC issued one new FAQ related to a designated person (1129).

https://ofac.treasury.gov/faqs/1000

Question 1001: Does the 50 Percent Rule apply to Directive 4 under Executive Order (E.O.) 14024, “Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation,” as amended (Russia-related Sovereign Transactions Directive)?

Answer: No.

https://ofac.treasury.gov/faqs/1001

Question 1002: Can U.S. persons engage in indirect transactions with persons subject to Directive 4 under Executive Order (E.O.) 14024, “Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation,” as amended (Russia-related Sovereign Transactions Directive)?

Answer: No. The Russia-related Sovereign Transactions Directive prohibits U.S. persons from engaging in any transaction involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation, including any transfer of assets to such entities or any foreign exchange transaction for or on behalf of such entities. Effective February 28, 2022, U.S. persons may not engage in any transactions involving these entities unless exempt or authorized by the Office of Foreign Assets Control (OFAC), including debiting funds from restricted accounts. This includes both direct and indirect transactions. The Russia-related Sovereign Transactions Directive also prohibits: (1) any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions of the Russia-related Sovereign Transactions Directive; and (2) any conspiracy formed to violate any of the prohibitions of the Russia-related Sovereign Transactions Directive.

In light of the current economic situation in Russia, U.S. persons should be on alert for nonroutine foreign exchange transactions that may indirectly involve entities subject to the Russia-related Sovereign Transactions Directive, including transactions that are inconsistent with activity over the 12 months prior to February 28, 2022. For example, the Central Bank of the Russian Federation may seek to use import or export companies to engage in foreign exchange transactions on its behalf and obfuscate its involvement. U.S. persons should also exercise caution in engaging in foreign exchange transactions on the Moscow Exchange, given the current heightened risk that the Central Bank of the Russian Federation could be a counterparty to such transactions.

https://ofac.treasury.gov/faqs/1002

Question 1004: Are U.S. persons required to block transactions involving entities subject to Directive 4 under Executive Order (E.O.) 14024, “Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation,” as amended (Russia-related Sovereign Transactions Directive)?

Answer: No. Although the prohibitions of the Russia-related Sovereign Transactions Directive effectively immobilize any assets 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, the “Directive 4 entities”) that are held in the United States or by U.S. persons, wherever located, the Russia-related Sovereign Transactions Directive does not impose blocking sanctions on the Directive 4 entities. Rather, U.S. persons must reject transactions involving the Directive 4 entities, unless exempt or authorized by OFAC.

https://ofac.treasury.gov/faqs/1004

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,” as amended (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. However, 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.

https://ofac.treasury.gov/faqs/1005

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

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

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

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

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

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

https://ofac.treasury.gov/faqs/1118

Furthermore, OFAC is publishing a Determination Pursuant to Section 1(a)(i) of E.O. 14024 and a Determination Pursuant to Section 1(a)(ii) of E.O. 14071.

Determination Pursuant to Section 1(a)(i) of E.O. 14024: Section 1(a)(i) 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 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, I hereby determine that section 1(a)(i) of E.O. 14024 shall apply to the architecture, engineering, construction, manufacturing, and transportation sectors of the Russian Federation economy. Any person determined, pursuant to section 1(a)(i) of E.O. 14024, to operate or have operated in such sectors shall be subject to sanctions pursuant to section 1(a)(i).

https://ofac.treasury.gov/media/931771/download?inline

Determination Pursuant to Section 1(a)(ii) of E.O. 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, and in consultation with the Department of State, I hereby determine that the prohibitions in section 1(a)(ii) of E.O. 14071 shall apply to the following categories of services: architecture and engineering. 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 architecture services or engineering 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.

This determination shall take effect beginning at 12:01 a.m. Eastern daylight time on June 18, 2023.

https://ofac.treasury.gov/media/931776/download?inline

OFAC is publishing three associated FAQs and removing FAQs 964, 1037, and 1085, which were incorporated into new FAQs 1126-1128. These changes consolidate OFAC’s general guidance pertaining to Russia-related sector and service determinations.

OFAC is also amending FAQs 1059 and 1061-1062.

In addition, OFAC is issuing one new FAQ related to a designated person (1129).

Question 1129: Do blocking sanctions issued by the State Department on May 19, 2023, on Polimetall AO apply to its corporate parent and affiliates?

Answer: On May 19, 2023, the Department of State designated Russia-based Polimetall AO pursuant to Executive Order (E.O.) 14024. These blocking sanctions apply only to this entity and any entities in which it owns, directly or indirectly, a 50 percent or greater interest.

Neither the Department of State nor OFAC has designated this entity’s ultimate parent company, Jersey-based Polymetal International PLC, and based on information available to OFAC, Polymetal International PLC is not owned 50 percent or more by blocked persons or otherwise considered the blocked property of any blocked persons. U.S. persons, therefore, are not prohibited from dealing with Polymetal International PLC, its non-blocked subsidiaries, or non-blocked affiliates to the extent the proposed dealings do not involve any blocked person, any interest in property of a blocked person, or any other activities prohibited pursuant to any OFAC sanctions authorities.

https://ofac.treasury.gov/faqs/1129

OFAC implemented new commitments made at the G7 Leaders’ Summit to hold Russia accountable for its war. OFAC’s sanctions on 22 individuals and 104 entities, with touchpoints in more than 20 countries or jurisdictions, target those attempting to circumvent or evade sanctions and other economic measures against Russia, the channels Russia uses to acquire critical technology, its future energy extraction capabilities, and Russia’s financial services sector. Additionally, OFAC expanded sanctions authorities to target new sectors of Russia’s economy and sever Russia’s access to new categories of services. See the link below for details.

https://ofac.treasury.gov/recent-actions/20230519

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May 23, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned four entities and one individual involved in obfuscated revenue generation and malicious cyber activities that support the Democratic People’s Republic of Korea (DPRK) Government. The DPRK conducts malicious cyber activities and deploys information technology (IT) workers who fraudulently obtain employment to generate revenue, including in virtual currency, to support the Kim regime and its priorities, such as its unlawful weapons of mass destruction and ballistic missile programs.

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Venezuela-related General License 8L, “Authorizing Transactions Involving Petróleos de Venezuela, S.A. (PdVSA) Necessary for the Limited Maintenance of Essential Operations in Venezuela or the Wind Down of Operations in Venezuela for Certain Entities.”

Venezuela-Related General License 8L: 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 the safety or the preservation of assets in Venezuela;

(ii) involve PdVSA or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest; and

(iii) were in effect prior to July 26, 2019, are authorized through 12:01 a.m. eastern standard time, November 19, 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.

Transactions and activities necessary for the safety or the preservation of assets in Venezuela that are authorized by this general license include transactions and activities necessary to ensure the safety of personnel or the integrity of operations and assets in Venezuela; participation in shareholder and board of directors meetings; making payments on third-party invoices for transactions and activities authorized by this general license, or incurred prior to April 21, 2020, provided such activity was authorized at the time it occurred; payment of local taxes and purchase of utility services in Venezuela; and payment of salaries for employees and contractors in Venezuela.

All transactions and activities prohibited by E.O. 13850, as amended, or E.O. 13884, each as incorporated into the VSR, that are ordinarily incident and necessary to the wind-down of operations, contracts, or other agreements in Venezuela involving PdVSA or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, and that were in effect prior to July 26, 2019, are authorized through 12:01 a.m. eastern standard time, November 19, 2023, for the Covered Entities.

https://ofac.treasury.gov/media/931811/download?inline

The following additions have been made to OFAC’s list of Specially Designated Nationals:

Kim, Sang Man of Russia and North Korea.

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

110th Research Center of North Korea;
Chinyong Information Technology Cooperation Company of North Korea;
Pyongyang University Of Automation of North Korea; and
Technical Reconnaissance Bureau of North Korea.

https://home.treasury.gov/news/press-releases/jy1498 and https://ofac.treasury.gov/recent-actions/20230523

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May 24, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) targeted 26 individuals and entities connected with the terrorist group al-Shabaab, including 15 financial facilitators and operatives, four charcoal smugglers, and seven of their associated companies. This action targets key regional leaders, affiliates, and members of the terrorist group in Somalia who are involved in a wide range of activities in support of al-Shabaab, including financial facilitation, business activities, collection of funds on behalf of the terrorist group, the proliferation of Improvised Explosive Devices (IEDs), and illegal charcoal smuggling from Somalia, all of which have exacerbated local conflicts and suffering.

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

Aadan, Hassan Yariisow of Somalia;
Aadan, Siciid Abdullahi of Somalia;
Abdi, Abdulwahab Noor of the United Arab Emirates and Ethiopia;
Ayuto, Siyaat of Somalia;
Barreh, Mariam of Somalia and the United Arab Emirates;
Burhan, Macalin of Somalia;
Cali, Maxamed, Wayanta of Somalia;
Daoud, Suleiman Cabdi of Somalia;
Dheere, Mumin of Somalia;
Gabaane, Maxamed Dauud of Somalia;
Guhaad, Cumar of Somalia;
Hirey, Mohamed Abdullah of Somalia;
Hussein, Ali Ahmed of Somalia;
Ibrahim, Aadan Yusuf Saciid of Somalia;
Jiss, Aadan, Daaru Salaam of Somalia;
Kabadhe, Ahmed, Jubaland of Somalia;
Malayle, Shiek Aadan Abuukar of Somalia;
Mohamed, Mohamed Omar of Somalia;
Musse, Bashir Khalif of Somalia, United Arab Emirates and Djibouti;
Naaji, Ali Ahmed of Somalia;
Roobow, Cabdi of Somalia;
Siidow, Maxamed of Somalia;
Xuuroow, Hasaan Abshir of Somalia; and
Yare, Cali of Somalia.

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

Al Nezam Al Asasy General Trading L.L.C. of the United Arab Emirates;
Bushra Bachir Shipping And Logistics Services L.L.C. of the United Arab Emirates;
Jamame Brothers Company of Somalia;
Kismayo General Trading LLC of the United Arab Emirates;
Red Sea Transit & Transport Service of Djibouti;
Royal Shipping Agency of Djibouti; and
Sitti General Trading LLC of the United Arab Emirates.

https://home.treasury.gov/news/press-releases/jy1499 and https://ofac.treasury.gov/recent-actions/20230524

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May 25, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Ivan Aleksandrovich Maslov (Maslov), the head of Russian Private Military Company ‘Wagner’ (Wagner Group) paramilitary units and its principal administrator based in Mali. The Wagner Group and its leader, Yevgeniy Viktorovich Prigozhin, are sanctioned by multiple authorities, including for support of Russia’s war against Ukraine. The Wagner Group may be attempting to obscure its efforts to acquire military equipment for use in Ukraine, including by working through Mali and other countries where it has a foothold. The United States opposes efforts by any country to assist Russia through the Wagner Group.

OFAC added a Russia-related Designation to its Specially Designated Nationals list:

Maslov, Ivan Aleksandrovich of Russia.

https://ofac.treasury.gov/recent-actions/20230525 and https://home.treasury.gov/news/press-releases/jy1502

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May 30, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 17 individuals and entities involved in the international proliferation of equipment used to produce illicit drugs. These targets are directly or indirectly involved in the sale of pill press machines, die molds, and other equipment used to impress counterfeit trade markings of legitimate pharmaceuticals onto illicitly produced pills, often laced with fentanyl, frequently destined for U.S. markets. These designations target seven entities and six individuals based in China and one entity and three individuals based in Mexico.

OFAC also designated two Syrian money service businesses that have secretly helped the Syrian regime under Bashar al-Assad and its Hizballah and Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) allies maintain access to the international financial system in violation of international sanctions. OFAC is also designating three brothers who own and operate Al-Fadel Exchange. These designations are pursuant to Executive Order (E.O.) 13582 of August 17, 2011, “Blocking Property of the Government of Syria and Prohibiting Certain Transactions With Respect to Syria,” and also the Caesar Syrian Civilian Protection Act of 2019 (“Caesar Act”), and underscore the serious threat posed by actors in the financial system who actively enable violent regimes to circumvent sanctions.

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

Balwi, Fadel Ma’ruf of Syria;
Balwi, Muhammad Ma’ruf of Syria;
Balwi, Mut’i Ma’ruf of Syria;
Fei, Yiren of China;
Guo, Chunyan of China;
Guo, Ruiguang of China;
Guo, Yunnian of China;
Macias Trevizo, Ernesto Alonso of Mexico;
Martinez Trevizo, Mario Ernesto of Mexico;
Pan, Hao of China;
Rodriguez Almeida, Cinthia Adriana of Mexico; and
Zhao, Dongdong of China.

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

Al-Adham Exchange Company of Syria;
Al-Fadel Exchange And Money Transfer Company of Syria;
Mexpacking Solutions of Mexico;
Shenzhen Yason General Machinery CO., LTD. NANCHANG BRANCH of China;
Tdpmolds of China;
Yantai Mei Xun Trade CO., LTD. of China;
Yantai Yixun International Trade CO., LTD. of China;
Yason Electronics Technology CO., LIMITED of China;
Yason General Machinery CO., LTD. of China; and
Youli Technology Development CO., LTD. of China.

https://home.treasury.gov/news/press-releases/jy1507 and https://home.treasury.gov/news/press-releases/jy1508 and https://ofac.treasury.gov/recent-actions/20230530

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May 31, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia Related General License 69.

General License 69: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the processing of interest or principal payments on debt securities issued by International Investment Bank (IIB) prior to April 12, 2023, are authorized through 12:01 a.m. eastern daylight time June 30, 2023, provided that such interest or principal payments are not made to persons located in the Russian Federation and that any payments to a blocked person, wherever located, are made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).

Note: For the purposes of this general license, the term “person located in the Russian Federation” includes 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.

U.S. financial institutions are authorized to unblock interest or principal payments that were blocked on or after April 12, 2023, but before May 31, 2023, on debt securities issued by IIB prior to April 12, 2023, provided that the funds are unblocked solely to effect transactions authorized in this general license.

Note: U.S. financial institutions unblocking property pursuant to paragraph (b) of this general license are required to file an unblocking report pursuant to 31 CFR § 501.603.

https://ofac.treasury.gov/media/931816/download?inline

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Fines and Penalties

May 1, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with Poloniex, LLC (“Poloniex”). Poloniex agreed to remit $7,591,630 to settle its potential civil liability for 65,942 apparent violations of sanctions against Crimea, Cuba, Iran, Sudan, and Syria. Between January 2014 and November 2019, the Poloniex trading platform allowed customers apparently located in sanctioned jurisdictions to engage in online digital asset-related transactions—consisting of trades, deposits, and withdrawals—with a combined value of $15,335,349, despite having reason to know their location based on both Know Your Customer information and internet protocol address data. The settlement amount reflects OFAC’s determination that Poloniex’s apparent violations were not voluntarily self-disclosed and were not egregious.

https://ofac.treasury.gov/recent-actions/20230501_33 and https://ofac.treasury.gov/media/931701/download?inline

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May 2, 2023: Jesus Alberto Olivarez, a 32-year-old U.S. citizen, has pleaded guilty to smuggling goods from the United States. Olivarez admitted to attempting to export 5,680 rounds of assorted pistol ammunition to Mexico. Olivarez faces up to 10 years in prison and a possible $250,000 maximum fine.

https://www.justice.gov/usao-sdtx/pr/american-living-mexico-caught-trying-export-5680-rounds-ammunition

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May 3, 2023: Godlove Nche Manchoe, age 44, of Bowie, Maryland, was sentenced to 46 months in federal prison, followed by two years of supervised release, for conspiracy and for illegally exporting firearms and ammunition from the United States to Nigeria without obtaining the required licenses from the U.S. State Department. According to trial testimony and court documents, the purpose of the conspiracy was to assist separatists fighting against the government of Cameroon. According to his plea agreement, from at least November 2017 until July 19, 2019, Manchoe and his co-conspirators agreed to export firearms, ammunition, and other military-type items in violation of the federal smuggling statute, the Arms Export Control Act and other export laws. Manchoe participated in meetings of the conspirators, both online and in person, including in the basement of co-conspirator Tamufor St. Michael’s residence, where the conspirators, including Manchoe, also reloaded ammunition, assembled firearms, and wrapped various items for overseas shipment. Manchoe also donated and forwarded funds received from other co-conspirators to St. Michael, to be used towards the purchase of ammunition and/or weapons in furtherance of the conspiracy.

https://www.justice.gov/usao-md/pr/member-conspiracy-illegally-export-firearms-ammunition-and-military-type-items-assist

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May 5, 2023: 88 Fed. Reg. 29080: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Lizzette B. Jaimes for seven years until September 21, 2028. On September 21, 2021, Jaimes was convicted of violating 18 U.S.C. 554(a) for smuggling and attempting to smuggle various firearms from the United States to Mexico without the required licenses. As a result of her conviction, the Court sentenced Jaimes to 24 months of confinement, two years of supervised release, and a $200 special assessment.

https://www.federalregister.gov/documents/2023/05/05/2023-09598/in-the-matter-of-lizzette-b-jaimes-1006-sunflower-trail-austin-tx-78745-2783-order-denying-export

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May 5, 2023: 88 Fed. Reg. 29081: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Andres Morales for ten years until June 28, 2031. On June 28, 2021, Morales was convicted of violating 18 U.S.C. 554(a) for smuggling from the United States to Mexico approximately ten (10) to fifteen (15) Barrett .50 caliber rifles; and ten (10) or more AK-47 assault-style rifles. As a result of his conviction, the Court sentenced Morales to 84 months of confinement, three years of supervised release, and a $200 assessment.

https://www.federalregister.gov/documents/2023/05/05/2023-09597/in-the-matter-of-andres-morales-inmate-number-61387-479-fci-forrest-city-low-federal-correctional

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May 11, 2023: The Justice Department announced the seizure of 13 domains used by Specially Designated Nationals (SNDs), Specially Designated Global Terrorists (SDGTs), and their members associated with Lebanese Hezbollah.

According to court records, the United States obtained court authorization to seize five domains registered to the Public Interest Registry (PIR) – moqawama.org, almanarnews.org, manarnews.org, almanar-tv.org, and alshahid.org – and eight domains registered to Verisign Inc. – manartv.net, manarnews.net, almanar-tv.com, almanar-tv.net, alidaamouch.com, Ibrahim-alsayed.net, alemdad.net, and naimkassem.net.

https://www.justice.gov/opa/pr/justice-department-seizes-13-domains-used-lebanese-hezbollah-and-its-affiliates

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May 12, 2023: 88 Fed. Reg. 30721: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Adriana Gabriela Guajardo-Cavazos for seven years until November 12, 2027. On November 12, 2020, Guajardo-Cavazos (“Guajardo-Cavazos”) was convicted of violating 18 U.S.C. 554(a) for smuggling and attempting to smuggle from the United States to Mexico, approximately one (1) .243 caliber rifle, one (1) .22 caliber rifle, one (1) 12 gauge shotgun, one (1) .223 caliber magazine, and one (1) .22 caliber magazine. As a result of her conviction, the Court sentenced Guajardo-Cavazos to 36 months of confinement, three years of supervised release, and a $100 assessment.

https://www.federalregister.gov/documents/2023/05/12/2023-10102/in-the-matter-of-adriana-gabriela-guajardo-cavazos-calle-manuel-otiz-49-matamoros-tamaulipas-mexico

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May 12, 2023: 88 Fed. Reg. 30722: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Colby Stephan Skolseg for five years until September 10, 2025. On September 10, 2020, Skolseg was convicted of violating 18 U.S.C. 554(a) knowingly and unlawfully attempting to export eight firearms from the United States to Canada. As a result of his conviction, the Court sentenced Skolseg to 12 months and one day in prison, one year of supervised release, and a $100 assessment.

https://www.federalregister.gov/documents/2023/05/12/2023-10103/in-the-matter-of-colby-stephan-skolseg-94-pleasant-view-drayton-valley-alberta-canada-t7a-1m9-order

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May 12, 2023: 88 Fed. Reg. 30720: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Juan Antonio Cepeda for seven years until March 25, 2028. On March 25, 2021, Cepeda was convicted of violating 18 U.S.C. 554(a) for smuggling and attempting to smuggle from the United States to Mexico firearms, ammunition, and firearms magazines. As a result of his conviction, the Court sentenced Cepeda to 41 months of confinement, three years of supervised release, and a $100 assessment.

https://www.federalregister.gov/documents/2023/05/12/2023-10101/in-the-matter-of-juan-antonio-cepeda-901-e-olive-street-apartment-number-8-laredo-texas-78041-order

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May 12, 2023: 88 Fed. Reg. 30719: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Juan Marvin Garcia for seven years until October 13, 2028. On October 13, 2021, Garcia was convicted of violating 18 U.S.C. 554(a) for smuggling from the United States to Mexico approximately 12,800 rounds of 7.62 x 39mm ammunition, 150 rounds of 38 Special ammunition, 60 rounds of .223 caliber ammunition, and one Stoeger Cougar 9 mm pistol without written approval from United States Department of Commerce. As a result of his conviction, the Court sentenced Garcia to 36 months of confinement, three years of supervised release, and a $100 assessment.

https://www.federalregister.gov/documents/2023/05/12/2023-10104/in-the-matter-of-juan-marvin-garcia-inmate-number-23021-509-fci-beaumont-medium-federal-correctional

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May 12, 2023: 88 Fed. Reg. 30718: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Virgil Griffith for ten years until April 12, 2032. On April 12, 2022, Griffith was convicted of two counts of violating the International Emergency Economic Powers Act (50 U.S.C 1701, et seq.) (“IEEPA”) for exporting services to North Korea without the required authorization from the Department of Treasury and evading and avoiding U.S. sanctions on North Korea. As a result of his conviction, the Court sentenced Griffith to 63 months of confinement, three years of supervised release, a $100 assessment, and a $100,000 criminal fine.

https://www.federalregister.gov/documents/2023/05/12/2023-10105/in-the-matter-of-virgil-griffith-inmate-number-79038-112-fci-allenwood-low-federal-correctional

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May 16, 2023: The Justice Department announced criminal charges in five cases and four arrests from five different U.S. Attorney’s offices in connection with the recently launched multi-agency Disruptive Technology Strike Force. The Disruptive Technology Strike Force is co-led by the Departments of Justice and Commerce to counter efforts by hostile nation-states to illicitly acquire sensitive U.S. technology to advance their authoritarian regimes and facilitate human rights abuses. The Strike Force’s work has led to the unsealing of charges against multiple defendants in five cases accused of crimes including export violations, smuggling and theft of trade secrets.

Two of these cases involve the disruption of alleged procurement networks created to help the Russian military and intelligence services obtain sensitive technology in violation of U.S. laws. In the Eastern District of New York, a Greek national was arrested on May 9 for federal crimes in connection with allegedly acquiring more than ten different types of sensitive technologies on behalf of the Russian government and serving as a procurement agent for two Russian Specially Designated Nationals (SDNs) operating on behalf of Russia’s intelligence services. In the District of Arizona, two Russian nationals were arrested for their involvement in a procurement scheme to supply multiple Russian commercial airline companies – which were subject to bans from engaging in certain types of commercial transactions – with export-controlled parts and components, including braking technology.

Two of the other cases charge former software engineers with stealing software and hardware source code from U.S. tech companies in order to market it to Chinese competitors. In the Central District of California, a senior software engineer was arrested on May 5 for theft of trade secrets for allegedly stealing source code used in metrology software which is used in “smart” automotive manufacturing equipment. The defendant then allegedly marketed the stolen technology to multiple Chinese companies. In the Northern District of California, a citizen of the People’s Republic of China (PRC) and former Apple engineer is accused of allegedly stealing thousands of documents containing the source code for software and hardware pertaining to Apple’s autonomous vehicle technology. This defendant fled to China and is believed to be working for a PRC-based autonomous vehicle competitor.

The fifth and final case involves a Chinese procurement network established to provide Iran with materials used in weapons of mass destruction (WMDs) and ballistic missiles. In the Southern District of New York, a PRC national is charged with allegedly participating in a scheme to use his employer to conduct transactions with a U.S. financial institution for the benefit of a purported Iranian entity, as part of an effort to provide isostatic graphite, a material used in the production of WMDs, to Iran.

https://www.justice.gov/opa/pr/justice-department-announces-five-cases-part-recently-launched-disruptive-technology-strike

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May 16, 2023: The former president of a New York-based non-governmental entity (NGO) was sentenced to three years and six months in prison for paying bribes to elected officials of the Republic of the Marshall Islands (RMI) in exchange for passing certain legislation. According to court documents, beginning in or around 2016 and continuing until at least August 2020, Cary Yan, 51, conspired with others, including his assistant, Gina Zhou, in connection with a multi-year bribery scheme. Yan offered and paid tens of thousands of dollars in bribes to high-level RMI officials, including members of the RMI legislature, in exchange for supporting legislation creating a semi-autonomous region within the RMI called the Rongelap Atoll Special Administrative Region (RASAR) that would benefit the business interests of Yan and his associates. Yan carried out the bribery scheme using the New York-based NGO, including the physical use of its headquarters in Manhattan, to meet and communicate with RMI officials.

In December 2022, Yan and Zhou each pleaded guilty to one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practice Act. On Feb. 16, Zhou was sentenced to two years and seven months in prison for her role in the scheme.

https://www.justice.gov/opa/pr/former-head-non-governmental-organization-sentenced-bribing-officials-republic-marshall

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May 16, 2023: A criminal complaint was unsealed in federal court in Brooklyn, charging Dr. Nikolaos “Nikos” Bogonikolos with wire fraud conspiracy and smuggling. Bogonikolos, a Greek national, was arrested in Paris, France, on May 9, 2023, and remains in custody pending the resolution of extradition proceedings.

As alleged, while ostensibly operating as a defense contractor for NATO and other ally countries, the defendant and his Aratos Group were double-dealing, helping to fuel Russia’s war effort and their development of next-generation weapons.

As alleged, Bogonikolos conspired with a network of companies orchestrated by the Russian intelligence services to fraudulently acquire and then smuggle U.S.-origin military and dual-use technologies to aid the Russian defense and security sectors. Bogonikolos procured sensitive equipment meeting NATO specifications designed for tactical battlefield conditions as well as components with applications in space-based and cryptographic communications, on behalf of his Russian intelligence handlers seeking to improve their country’s warfighting capabilities.

As alleged in the complaint, the defendant headed the Aratos Group (Aratos), a collection of defense and technology companies in the Netherlands and Greece, which are both member countries of the North Atlantic Treaty Organization (NATO). According to Aratos’ website, the companies’ areas of expertise included “Space Technologies,” “Homeland Security,” “Blockchain,” and “Counter-Drone Systems.”

https://www.justice.gov/usao-edny/pr/founder-and-president-european-defense-conglomerate-charged-helping-russian-military?utm_source=substack&utm_medium=email

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May 17, 2023: Tamufor Nchumuluh St. Michael, age 42, of Rosedale, Maryland, was sentenced to 30 months in federal prison, followed by two years of supervised release, for conspiracy and for violating the Arms Export Control Act by sending firearms, ammunition, and other military-type items from the United States to Nigeria without obtaining a license from the U.S. Department of State. The arms were intended to assist separatists fighting against the government of Cameroon.

According to his plea agreement, from at least November 2017 continuing until July 19, 2019, St. Michael and his co-defendants conspired with each other and with others to export firearms, ammunition, and other military-type items from the United States to Nigeria. Between March 2018 and July 2019, St. Michael and his co-conspirators purchased, both over the Internet and in person, large amounts of ammunition, ammunition reloading supplies, firearms, firearm parts, and other military-type items, which were sent to St. Michael’s residence. St. Michael purchased at least 24 different rifles online, which he picked up at a firearms retailer in Essex, Maryland. In each case, he certified an ATF Firearms Transaction Form certifying that he was the actual transferee or buyer of the firearm. St. Michael knew the certificates were false because the guns were purchased to export overseas.

https://www.justice.gov/usao-md/pr/rosedale-man-sentenced-30-months-federal-prison-conspiracy-smuggle-firearms-and-other

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May 18, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has announced that Regal Beloit FZE (Dubai), a controlled-in-fact subsidiary of Regal Benoit America, Inc., has agreed to a civil penalty of $283,500 to settle charges that it committed 84 violations of EAR § 760.5 Failing to Report the Receipt of a Request to Engage in a Restricted Trade Practice or Foreign Boycott Against a Country Friendly to the United States. In a Proposed Charging Letter, BIS alleged that during the period February 2017 through September 2021, Regal Benoit FZE (Dubai) received on 84 occasions requests to take an action that would have the effect of furthering or supporting a restrictive trade practice of unsanctioned foreign boycott. By failing to report the receipt of these requests, BIS alleged that the company had committed 84 violations of EAR § 760.5.

https://efoia.bis.doc.gov/index.php/documents/antiboycott/alleged-antiboycott-violations-2023/1508-a768/file

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May 22, 2023: 88 Fed. Reg. 32727: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Carlos Daniel Rodriguez for ten years until December 2, 2031. On December 2, 2021, Rodriguez was convicted of violating 18 U.S.C. 554(a) for smuggling from the United States to Mexico, approximately 15,000 rounds of 5.56-millimeter ammunition and approximately 193 thirty-round magazines designed for use in AR-type rifles. As a result of his conviction, the Court sentenced Rodriguez to 46 months of confinement, three years of supervised release, and a $100 assessment.

https://www.federalregister.gov/documents/2023/05/22/2023-10872/in-the-matter-of-carlos-daniel-rodriguez-inmate-number-55257-509-fci-bastrop-federal-correctional

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May 22, 2023: 88 Fed. Reg. 32728: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Manuel Alberto Munoz-Sandoval for five years until November 10, 2026. On November 10, 2021, Munoz-Sandoval was convicted of violating 18 U.S.C. 554(a) for smuggling from the United States to Mexico, semi-automatic firearms, to wit: an Iberia Hi-Point, model JCP, .40 caliber pistol; a Smith and Wesson, model SD9VE, 9 mm caliber pistol; a Taurus, model PT111 G2A, 9mm caliber pistol; and a Ruger, model LCP II, .380 caliber pistol. As a result of his conviction, the Court sentenced Munoz-Sandoval to 28 months of confinement with credit for time served, two years of supervised release, and a $100 assessment.

https://www.federalregister.gov/documents/2023/05/22/2023-10871/in-the-matter-of-manuel-alberto-munoz-sandoval-inmate-number-17385-509-fci-big-spring-federal

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May 22, 2023: A federal jury convicted Ross Roggio, 54, of Stroudsburg, Pennsylvania, for numerous crimes, including the torture of an Estonian citizen in 2015 in the Kurdistan region of Iraq, in connection with the operation of an illegal weapons manufacturing plant in Kurdistan.

According to court documents and evidence presented at trial, Roggio arranged for Kurdish soldiers to abduct and detain the victim at a Kurdish military compound where Roggio suffocated the victim with a belt, threatened to cut off one of his fingers, and directed Kurdish soldiers to repeatedly beat, tase, choke, and otherwise physically and mentally abuse the victim over a 39-day period. The victim was employed at a weapons factory that Roggio was developing in the Kurdistan region of Iraq that was intended to manufacture M4 automatic rifles and Glock 9mm pistols.

In connection with the weapons factory project, which included Roggio providing training to foreign persons in the operation, assembly, and manufacturing of the M4 automatic rifle, Roggio also illegally exported firearm parts that were controlled for export by the Departments of State and Commerce.

Roggio was convicted of torture, conspiracy to commit torture, conspiring to commit an offense against the United States, exporting weapons parts and services to Iraq without the approval of the Department of State, exporting weapons tools to Iraq without the approval of the Department of Commerce, smuggling goods, wire fraud, and money laundering. He is scheduled to be sentenced on Aug. 23 and faces a maximum sentence of life in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

https://www.justice.gov/opa/pr/man-convicted-torture-and-exporting-weapons-parts-and-related-services-iraq

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May 23, 2023: 88 Fed. Reg. 33086: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Johnathon Martin Soria for ten years until July 12, 2031. On July 12, 2021, Soria was convicted of violating 18 U.S.C. 554(a) for smuggling or attempting to smuggle from the United States to Mexico firearms as defined in Category I of the United States Munitions List, without a license or written authorization. As a result of his conviction, the Court sentenced Soria to 50 months of confinement, with credit for time served, three years of supervised release, a $100 assessment, and a $1,000 criminal fine.

https://www.federalregister.gov/documents/2023/05/23/2023-10912/in-the-matter-of-johnathon-martin-soria-1103-e-main-street-eagle-lake-tx-77434-2829-order-denying

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May 23, 2023: 88 Fed. Reg. 33087: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Reynoldo Lopez-Cota for ten years until May 7, 2031. On May 7, 2021, Lopez-Cota was convicted of violating 18 U.S.C. 371 and 18 U.S.C. 554(a) for conspiracy and smuggling 1,000 rounds of 7.62 caliber ammunition, 100 rounds of .223 drum magazine, and a one-speed loader from the United States to Mexico. As a result of his conviction, the Court sentenced Lopez-Cota to 24 months of confinement with credit for time served, 36 months of supervised release, and a $200 special assessment.

https://www.federalregister.gov/documents/2023/05/23/2023-10883/in-the-matter-of-reynoldo-lopez-cota-1625-west-fort-lowell-rd-apt-44-tucson-arizona-85705-order

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May 23, 2023: 88 Fed. Reg. 33088: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Leonel Apolinar Lopez for ten years until March 9, 2030. On March 9, 2020, Lopez was convicted of violating 18 U.S.C. 371 for conspiring to straw purchase and smuggle firearms to Mexico. As a result of his conviction, the Court sentenced Lopez to 12 months and one day of confinement, with credit for time served and 36 months of supervised release.

https://www.federalregister.gov/documents/2023/05/23/2023-10966/in-the-matter-of-leonel-apolinar-lopez-7122-w-kingman-street-phoenix-az-85043-7818-order-denying

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May 23, 2023: 88 Fed. Reg. 33089: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Luis Manuel Bray-Vazquez for ten years until August 24, 2031. On August 24, 2021, Bray-Vazquez was convicted of violating 18 U.S.C. 554(a) for smuggling and attempting to smuggle from the United States to Mexico, five 7.62x39mm caliber rifles, four 7.62x39mm caliber pistols, three 5.56 caliber rifles, one Barrett .50 caliber rifle, one .45 ACP caliber pistol, and one 9x19mm caliber pistol. As a result of his conviction, the Court sentenced BrayVazquez to 46 months of confinement, with credit for time served, 36 months of supervised release, and a $100 special assessment.

https://www.federalregister.gov/documents/2023/05/23/2023-10907/in-the-matter-of-luis-manuel-bray-vazquez-inmate-number-16344-509-fci-lompoc-federal-correctional

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May 23, 2023: 88 Fed. Reg. 33090: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Luis Sanchez for six years until October 15, 2026. On October 15, 2020, Sanchez was convicted of violating 18 U.S.C. 371. Specifically, Sanchez was convicted of conspiring to export firearms using an alias from the United States to the Dominican Republic concealed in household items. As a result of his conviction, the Court sentenced Sanchez to 12 months and one day of confinement, three years of supervised release, and a $100 special assessment.

https://www.federalregister.gov/documents/2023/05/23/2023-10964/in-the-matter-of-luis-sanchez-56-mill-street-belleville-nj-07109-order-denying-export-privileges

May 23, 2023: 88 Fed. Reg. 33091: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Victor Ceballos Polanco for five years until November 6, 2025. On November 6, 2020, Polanco was convicted of violating 18 U.S.C. 371 for conspiring to export firearms using an alias from the United States to the Dominican Republic concealed in household items. As a result of his conviction, the Court sentenced Polanco to 3 years of probation, and a $100 special assessment.

https://www.federalregister.gov/documents/2023/05/23/2023-10909/in-the-matter-of-victor-ceballos-polanco-22-river-birch-road-nw-cartersville-ga-30121-order-denying

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May 23, 2023: 88 Fed. Reg. 33092: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Oscar Ignacio Lopez Soto for ten years until August 10, 2031. On August 10, 2021, Soto was convicted of violating 18 U.S.C. 371 for conspiring to straw purchase and smuggle firearms to Mexico. As a result of his conviction, the Court sentenced Soto to 12 months and one day of confinement, with credit for time served, 36 months of supervised release, and a $100 special assessment.

https://www.federalregister.gov/documents/2023/05/23/2023-10965/in-the-matter-of-oscar-ignacio-lopez-soto-7404-w-maldonado-road-laveen-az-85339-order-denying-export

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May 23, 2023: 88 Fed. Reg. 33093: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Mario Ismael Quijada, Jr. for ten years until January 13, 2030. On January 13, 2020, Quijada was convicted of violating 18 U.S.C. 371 for conspiring to straw purchase and smuggle firearms to Mexico. As a result of his conviction, the Court sentenced Quijada to 12 months and one day of confinement, with credit for time served and 36 months of supervised release.

https://www.federalregister.gov/documents/2023/05/23/2023-10961/in-the-matter-of-mario-ismael-quijada-jr-10039-w-parkway-drive-tolleson-az-85353-order-denying

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May 23, 2023: 88 Fed. Reg. 33093: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Alex Yun Cheong Yue for ten years until March 3, 2031. On March 3, 2021, Yue was convicted of three counts of violating the International Emergency Economic Powers Act (50 U.S.C 1701, et seq.) (“IEEPA”) and 18 U.S.C. 554(a) for conspiring to export and knowingly and willfully exporting, attempting to export, and causing to be exported cesium atomic clocks from the United States to Hong Kong without first obtaining the required licenses from the Department and one count of violating 18 U.S.C. 554(a) for fraudulently and knowingly buying, selling, and facilitating the transportation, concealment, and sale of cesium atomic clocks to Hong Kong. As a result of his conviction, the Court sentenced Yue to time served, three years of supervised release, and a $400 court assessment. The Court also ordered the civil forfeiture of Yue’s interest in $5,690.67 to the United States.

https://www.federalregister.gov/documents/2023/05/23/2023-10963/in-the-matter-of-alex-yun-cheong-yue-9723-cortada-street-south-el-monte-ca-91733-order-denying

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May 23, 2023: 88 Fed. Reg. 33094: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of David Alberto Duarte-Marquez for ten years until January 26, 2031. On January 26, 2021, Duarte-Marquez was convicted of violating 18 U.S.C. 554(a) for smuggling and attempting to smuggle from the United States to Mexico M203 40 mm grenade launcher barrels. As a result of his conviction, the Court sentenced Duarte-Marquez to 33 months of confinement with credit for time served, three years of supervised release: and a $100 special assessment.

https://www.federalregister.gov/documents/2023/05/23/2023-10884/in-the-matter-of-david-alberto-duarte-marquez-calle-prol-san-juan-sur-50-fracc-san-carlos-nogales

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May 23, 2023: 88 Fed. Reg. 33095: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Jacobo Javier Garza-Solis for ten years until October 16, 2030. On October 16, 2020, Garza-Solis was convicted of violating section 38 of the Arms Export Control Act (22 U.S.C 2778) (“AECA”) for knowingly and willfully exporting and causing to be exported and attempting to export and attempting to cause to be exported from the United States to Mexico, one Glock, .40 caliber, semiautomatic handgun charged with a magazine containing 13 rounds of ammunition and approximately 1,540 rounds of 7.62 x 39mm ammunition, which were 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. As a result of his conviction, the Court sentenced Garza-Solis to 82 months in prison, three years of supervised release, and a $100 assessment.

https://www.federalregister.gov/documents/2023/05/23/2023-10967/in-the-matter-of-jacobo-javier-garza-solis-1614-solar-dr-mission-tx-78572-order-denying-export

MAY 2023 EXPORT CONTROL REGULATIONS UPDATES Read More »

APRIL 2023 EXPORT CONTROL REGULATIONS UPDATES

This newsletter is a listing of the latest changes in export control regulations through April 30, 2023. 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 National Emergency Against Russia

April 10, 2023: 88 Fed. Reg. 21457: President Biden continued for 1 year the national emergency against Russia declared in Executive Order 14024 of April 15, 2021, which was expanded in scope by Executive Order 14066, and with respect to which additional steps were taken in Executive Orders 14039, 14068, and 14071, must continue in effect beyond April 15, 2023.

Federal Register :: Continuation of the National Emergency With Respect to Specified Harmful Foreign Activities of the Government of the Russian Federation

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President Biden Continues National Emergency Against Somalia

April 10, 2023: 88 Fed. Reg. 21455: President Biden continued for 1 year the national emergency against Somalia declared in Executive Order 13536 of April 12, 2010, as further implemented by Executive Order 13620 of July 20, 2012, in view of United Nations Security Council Resolution 2036 of February 22, 2012, and Resolution 2002 of July 29, 2011, and to address: exports of charcoal from Somalia, which generate significant revenue for al-Shabaab; the misappropriation of Somali public assets; and certain acts of violence committed against civilians in Somalia, all of which contribute to the deterioration of the security situation and the persistence of violence in Somalia.

Federal Register :: Continuation of the National Emergency With Respect to Somalia

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President Biden Continues National Emergency Against Russia And Russian-Affiliated Vessels

April 20, 2023: 88 Fed. Reg. 24327: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency with respect to the Russian Federation and the emergency authority relating to the regulation of the anchorage and movement of Russian-affiliated vessels to United States ports set out in Proclamation 10371 of April 21, 2022.

https://www.federalregister.gov/documents/2023/04/20/2023-08501/continuation-of-the-national-emergency-and-of-the-emergency-authority-relating-to-the-regulation-of

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

DDTC Name And Address Changes Posted To Website

April 4 through 28, 2023: 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:

The following Raytheon Anschuetz GmbH entities will change their name and ownership as a result of an acquisition by DMB Dr. Dieter Murmann Beteiligungsgesellschaft GmbH;

Old Name	New Name
Raytheon Systems Ltd. Raytheon Anschuetz GmbH Portsmouth Office Raytheon Technologies	Anschuetz UK Ltd.
Raytheon Anschütz GmbH	Anschuetz GmbH
Raytheon Anschuetz do Brasil Sistemas Marítimos Ltda.	Anschuetz do Brasil Sistemas Maritimos Ltda.
Raytheon Anschuetz Singapore Pte. Ltd.	Anschuetz Singapore Pte. Ltd.

Cobham Holdings Inc. and its subsidiaries will change their names due to a reincorporation:

From:	To:
Cobham Holdings Inc.	Frontgrade Technologies Holdings Inc.
CAES Colorado Springs LLC	Frontgrade Colorado Springs LLC
Cobham Advanced Electronics Solutions Inc.	Frontgrade Technologies Inc.

Change in Name from Aciturri Assembly S.A.U. to Aciturri Aerostructures S.L.U. due to merger;
Change in Name from Airbus Defence and Space Netherlands B.V. to Airbus Netherlands B.V. due to corporate rebranding;
Change in Address for V2X, Inc. from 2424 Garden of the Gods Road, Suite 300, Colorado Springs, CO 80919 to 7901 Jones Branch Drive, Suite 700, McLean, VA 22102;
Change in Name from AKKA Germany GmbH to Akkodis Germany AS&D GmbH and in Address from Taunusstraße 31, Munich, Bavaria, Germany 80807 to Airbus-Allee 5, Bremen, Germany 28199 due to acquisition;
Babcock Aviation entities in Spain, the Nordic Region, Portugal, Italy, Mozambique, and the UK changed names due to acquisition by Avincis;

From:	To:
Babcock Mission Critical Services España SAU	Avincis Aviation España SAU
Babcock Mission Critical Services Fleet Management SAU	Avincis Aviation Technics SAU
Babcock Mission Critical Services Galicia SLU	Avincis Aviation Iberia SL
Babcock Emergencias Aéreas España Holding, SLU	Avincis Aviation AOC Holding SLU
Babcock Mission Critical Services Asset Management SAU	Avincis Aviation Asset Management SAU
Babcock Mission Critical Services Group SAU	Avincis Aviation Group SAU
Babcock Mission Critical Services Holdings SLU	Avincis Aviation Holdings SLU
Babcock Mission Critical Services International, SAU	Avincis Aviation International SAU
Babcock Mission Critical Services SAU	Avincis Aviation SAU
Babcock International Spain, SL	Avincis Aviation International España SLU
Babcock Norway AS	Avincis Aviation Fleet Management Nordics AS
Babcock Scandinavian AirAmbulance AS	Avincis Aviation Norway AS
Babcock Scandinavian Aviation Services AS	Avincis Aviation Services Norway AS
Babcock Scandinavian Engineering AS	Avincis Aviation Engineering Norway AS
Babcock Scandinavian Holding AS	Avincis Aviation Holdings Norway AS
Babcock Scandinavia Holding AB	Avincis Aviation Holdings Sweden AB
Babcock Mission Critical Services, Scandinavia AB	Avincis Aviation Services Sweden AB
Babcock SAA FW AB	Avincis Aviation FW Sweden AB
Babcock Scandinavian AirAmbulance AB	Avincis Aviation Sweden AB
Babcock Scandinavian AirAmbulance AB, filial i Finland	Avincis Aviation Sweden AB, filial in Finland
Babcock Engineering Portugal, Unipessoal, LDA	Avincis Aviation Technics Portugal, Unipessoal Lda.
Babcock Mission Critical Services Portugal, Unipessoal, LDA	Avincis Aviation Portugal, Unipessoal Lda.
Babcock Holdings (Italy) S.p.A.	Avincis Aviation Holdings Italia S.p.A.
Babcock International Italy S.p.A.	Avincis Aviation International Italia S.p.A.
Babcock MCS Fleet Management S.p.A.	Avincis Aviation Italia S.p.A.Avincis
Babcock Mission Critical Services Italia S.p.A.	Aviation Fleet Management Italia S.p.A.
Babcock Mission Critical Services Mozambique, Limitada	Avincis Aviation Mozambique, Limitada
Babcock Investments (Number Nine) Limited	Avincis Aviation Management Services Ltd

Babcock Marine (Clyde) Limited merged into Devonport Royal Dockyard Limited due to internal corporate restructuring.

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The U.S. Department Of State Amended The ITAR To Expand The Types of Defense Articles And Defense Services To Be Provided Per the Canadian Exemption And the U.K. And Australia Treaty Exemptions

April 12, 2023: 88 Fed. Reg. 21910: The U.S. Department of State, Directorate of Defense Trade Controls amended the ITAR to expand the types of defense articles and defense services to be provided pursuant to the Canadian Exemption and the U.K. and Australia treaty exemptions. The amendments also make clarifying changes and conforming updates to Supplement No. 1 entries, specifically to U.S. Munitions List (USML) Category IV(i) manufacturing know-how and USML Category XII night vision entries. The Department of State is implementing this amendment after a series of routine consultations with its interagency and international counterparts. This amendment is intended to ensure the Treaty exemptions and the Canadian exemptions continue to enhance operational capabilities, interoperability, and cooperation between the armed forces of the United States and its allies and partners. While future rulemaking will address other areas of the chart, this final rule implements four specific changes to Supplement No. 1 to § 126.

First, this final rule amends the entry USML Category IV which previously excluded “defense articles and services specific to torpedoes,” to exclude only “defense articles and services specific to the warhead or the sonar, guidance, and control section of torpedoes.”

Second, this final rule amends the entry in USML Category XX(c), which previously excluded “defense articles and services specific to submarine combat control systems,” to remove mounting racks and cabinets from that entry.

Third, this final rule removes specific Underwater Acoustic Decoy Countermeasures (ADC) from Supplement No. 1 to Part 126 and clarifies Note 9.

Fourth, this final rule amends the entries regarding USML Category IV(i) manufacturing know-how and USML Category XII night vision. The USML Category IV(i) technical data entries are amended to reflect the fact that USML Category IV(h) was previously updated (79 FR 34) to describe the specific subassemblies of other USML Category IV defense articles that remain ITAR-controlled. Similarly, the night vision entries are updated to reflect the fact that first generation image intensification tubes are not subject to the ITAR, some items previously controlled in paragraph (c) of Category XII moved to paragraph (e) in a prior rulemaking (81 FR 70340), and to clarify that the technical data and defense services entry only applies to paragraph (f) of Category XII.

https://www.federalregister.gov/documents/2023/04/12/2023-07408/international-traffic-in-arms-regulations-expansion-of-defense-articles-and-defense-services and https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_news_and_events

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The U.S. Department Of State Maintained The Designations Of Foreign Terrorist Organizations

April 24, 2023: 88 Fed. Reg. 24842: Based on a review of the Administrative Records assembled pursuant to Section 219(a)(4)(C) of the Immigration and Nationality Act, amended (8 U.S.C. 1189(a)(4)(C))(“INA”), and in consultation with the Attorney General and the Secretary of the Treasury, the Department of State conclude that the circumstances that were the bases for the designations of organizations as a Foreign Terrorist Organizations have not changed in such a manner as to warrant revocation of the designations and that the national security of the United States does not warrant a revocation of the designations. Therefore, the designations of the certain organizations as Foreign Terrorist Organizations, pursuant to section 219 of the INA (8 U.S.C. 1189), shall be maintained.

https://www.federalregister.gov/documents/2023/04/24/2023-08613/review-of-the-designations-as-a-foreign-terrorist-organizations-of-islamic-jihad-union-and-islamic

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Foreign Terrorist Organizations Post 2022 End-Use Monitoring Reports

April 25, 2023: The U.S. Department of State’s Directorate of Defense Trade Controls (DDTC) has posted on its website the following end-use monitoring reports for fiscal year 2022:

Blue Lantern Report – End Use Monitoring of Defense Articles and Defense Services FY22

https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=061652e31b5aa5102dc36311f54bcb00

Golden Sentry Report – End Use Monitoring of Defense Articles and Defense Services FY22

/efaidnbmnnnibpcajpcglclefindmkaj/https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=821612e31b5aa5102dc36311f54bcbfe

Editors note: The Blue Lantern Program monitors the end use of defense articles including technical data and defense services and brokering activities subject to DOS licensing and other approvals. It includes pre and post license, pre and post shipment verification to verify the bona fides of foreign consignees and end users and confirm legitimacy of proposed transactions. The report is quite enlightening and is a reminder to all trade compliance professionals of the obligations of due diligence. DOS has responsibility for this program.

The Golden Sentry program is an end use monitoring program for defense articles and defense services sold or leased under the Arms Export Control Act or Foreign Assistance Act (Govt to Govt transfers) DOD has responsibility for this program.

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The U.S. Department Of State Amended The ITAR USML Category XI Controls On High-Energy Storage Capacitors

April 27, 2023: 88 Fed. Reg. 25488: The Department of State (the Department) amends the International Traffic in Arms Regulations (ITAR) to remove from U.S. Munitions List (USML) Category XI certain high-energy storage capacitors and to clearly identify the high-energy storage capacitors that remain in USML Category XI. The effective date of this amendment May 21, 2023 and public comments are due

by May 30, 2023.

The Department removed from USML Category XI certain high-energy storage capacitors that it assesses have broad commercial application, are available internationally, and do not provide a critical military or intelligence advantage. The Department assessed that adding a 125-volt (125 V) voltage criterion for the high-energy capacitors described on the USML ensures the capacitors that remain warrant control on the USML. While adding the 125 V criterion to paragraph (c)(5), the Department simultaneously reorganized the paragraph to delineate each element of the control criteria more clearly and added a note to explain those criteria.

These changes are warranted because the Department found that certain low-voltage high-energy storage capacitor technology has progressed such that many models that exceed the existing USML control criteria no longer provide a critical military or intelligence advantage. Although these lower-voltage capacitors meet the energy density and full energy life criteria, the technology for these lower-voltage capacitors is well understood, and the capacitors have been extensively integrated into commercial applications, such as Wi-Fi routers and civil aviation aircraft transponders. Further, comparable capacitors manufactured in other countries are widely available internationally without multilateral export restrictions placed on them.

https://www.federalregister.gov/documents/2023/04/27/2023-08825/international-traffic-in-arms-regulations-us-munitions-list-targeted-revisions

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Department of Treasury

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

April 10, 2023: 88 Fed. Reg. 21234: 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

Federal Register :: List of Countries Requiring Cooperation With an International Boycott

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

The Department Of The Treasury’s Office Of Foreign Assets Control (OFAC) Has Published An Alert, “Possible Evasion Of The Russian Oil Price Cap”

April 17, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has published an alert, “Possible Evasion of the Russian Oil Price Cap,” to warn U.S. persons about possible evasion of the price cap on crude oil of Russian Federation origin, particularly involving oil exported through the Eastern Siberia Pacific Ocean (ESPO) pipeline and ports on the eastern coast of the Russian Federation.

https://ofac.treasury.gov/recent-actions/20230417 and https://ofac.treasury.gov/media/931641/download?inline

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U.S. Department of Defense

DSCA Notifies Congress Of Potential FMS Sales To Morocco

April 11, 2023: The Government of Morocco has requested to buy forty (40) AGM-154C Joint Stand Off Weapons (JSOW). Also included are Dummy Air Training Missiles; Captive Flight Vehicles (CFVs); Free Flight Vehicles (FFVs); containers; mission planning, integration support, and testing; munitions storage security and training; weapon operational flight program software development; transportation, tools, and test equipment; support equipment; spare and repair parts; publications and technical documentation; personnel training and training equipment; U.S. Government and contractor engineering and logistics support services; and other related elements of logistical and program support. The estimated total cost is $250 million. The principal contractor will be Raytheon Missiles & Defense Company, Tucson, Arizona. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/morocco-joint-stand-weapons-jsow
April 11, 2023: The Government of Morocco has requested to buy eighteen (18) M142 High Mobility Artillery Rocket System (HIMARS) launchers; forty (40) M57 Army Tactical Missile Systems (ATACMS); thirty-six (36) M31A2 Guided Multiple Launch Rocket Systems (GMLRS) Unitary; thirty-six (36) M30A2 Guided Multiple Launch Rocket Systems (GMLRS) Alternative Warhead; nine (9) M1152A1 High Mobility Multipurpose Wheeled Vehicles (HMMWV); and eighteen (18) International Field Artillery Tactical Data Systems (IFATDS). Also included are forty (40) M28A2 Low Cost Reduced Range Practice Rocket Pods (LCRRPR); radios with similar “SINCGARS” capability; thirty-five (35) Vehicular Dual Long-Range Radio Systems w/GPS; twenty-four (24) Single Radio, Long Range Vehicular System w/GPS; eighteen (18) M1084A2 cargo truck, Family of Medium Tactical Vehicles (FMTV) Resupply Vehicles (RSV); three (3) M1089A2 wrecker truck, FMTV, RSV; eighteen (18) M1095 5-ton trailer, FMTV; twenty-three (23) Simple Key Loader (SKL), AN/PYQ-10; fifty (50) Defense Advanced Global Positioning System Receivers (DAGR); camouflage screen and support systems; support equipment; communications equipment; spare and repair parts; test sets; laptop computers; training and training equipment; publications; systems integration support; technical data; Stockpile Reliability, Quality Assurance and Technical Assistance teams; U.S. Government and contractor technical, engineering, and logistics support services; and other related elements of logistical and program support. The estimated total cost is $524.2 million. The principal contractors will be Lockheed Martin Missiles and Fire Control, Camden, AK; L3 Harris Communications, Inc., Rochester, NY; Raytheon, Waltham, MA; COBHAM Aerospace Connectivity, Buckinghamshire, UK; Oshkosh Defense, LLC, Oshkosh, WI; AAR Corporation AAR Manufacturing, Inc., Cadillac, MI; and AM General LLC, South Bend, IN. There are no known offset agreements proposed in connection with this potential sale.

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

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DSCA Notifies Congress Of Potential FMS Sale To Turkey

April 17, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Türkiye (Turkey) has requested to buy defense articles and services to support its current fleet of F-16 aircraft, to include software upgrades of the Operational Flight Program (OFP) avionics with the Automatic Ground Collision Avoidance System (AGCAS) capability; hardware modifications to enable integration of the Multifunctional Information Distribution System Block Upgrade II (MIDS BU II), procured separately; hardware and software upgrades to include aircraft major modification; both classified and unclassified software and software support; integration and test support; support equipment; training and training equipment; spare and repair parts; publications and technical documentation; U.S. Government and contractor engineering, technical, and logistical support services; and other related elements of logistical and program support. The estimated total cost is $259 million. The principal contractor will be Lockheed Martin Aeronautics Company of Fort Worth, TX. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/turkiye-f-16-avionics-upgrade

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DSCA Notifies Congress Of Potential FMS Sales To Norway

April 26, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress of the following possible Foreign Military Sale to Norway. The Government of Norway has requested to buy six (6) MH-60R Multi-Mission Helicopters; fifteen (15) T-700-GE-401C engines (12 installed, 3 spares); nine (9) Link 16 Multifunctional Information Distribution Systems Joint Tactical Radio Systems (MIDS JTRS) (6 installed, 3 spares); eighteen (18) Embedded Global Positioning System/Precise Positioning Service (GPS/PPS)/Inertial Navigation Systems (EGI) with Selective Availability/Anti-Spoofing Module (SAASM) (12 installed, 6 spares); and six (6) Airborne Low-Frequency Sonars (ALFS) (aircraft provisions only). Also included are M514 impulse cartridge/cartridge actuated devices; MJ20 cartridge actuated thruster/cartridge actuated devices; WB53 fire extinguisher cartridge/cartridge actuated devices; CCU-136A/A impulse cartridges; GAU-21 crew served guns (including pintle and laser pointer); AN/ARC-210 RT-2036 radios with Communications Security (COMSEC); AN/AAR-47 missile warning systems; AN/APX-123 Identification Friend or Foe (IFF) transponders; AN/ALE-47 dispensers; Electronic Countermeasures; Advanced Data Transfer Systems (ADTS); AN/AAS-44C(V) Multi-Spectral Targeting Systems; Identification Friend or Foe Mode 4/5 Cryptographic Applique, KIV-78; Joint Mission Planning Systems (JMPS); AN/ARQ-59 Hawklink radio terminals; Training Simulators/Operational Machine Interface Assistants (ATS/OMIA); Aviation Maintenance Weapons Loading Trainer (AMWLT); Tactical Operational Flight Trainer (TOFT); AN/ALQ-210 Electronic Support Measures (ESM) systems; APS-153(V) multi-mode radars; spare engine containers; spare and repair parts; support and test equipment; communications equipment; ferry support; publications and technical documentation; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; obsolescence engineering, integration, and test activities required to ensure readiness for the production of the Norwegian MH-60R helicopters; and other related elements of logistics and program support. The total estimated program cost is $1 billion. The principal contractor will be Lockheed Martin Rotary and Mission Systems, Owego, New York. The purchaser has requested offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor.
The Government of Norway has also requested continued sustainment and associated services for four (4) C-130J aircraft beyond Block 6 through 2028. Included are Joint Mission Planning Systems (JMPS); aircraft components, spare parts, consumables, and accessories; repair and return support; aircraft support and support equipment; unclassified publications and technical documentation; software delivery and support; unclassified Computer Program Identification Number (CPIN) systems; telecommunications support; minor modifications, maintenance and maintenance support; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistical and program support. The estimated total cost is $166 million. The principal contractor will be Lockheed Martin, Marietta, GA. The purchaser typically requests offsets. Any offset agreement would be defined in negotiations between the purchaser and the contractor.

https://www.dsca.mil/press-media/major-arms-sales/norway-defense-articles-and-services-related-mh-60r-multi-mission and https://www.dsca.mil/press-media/major-arms-sales/norway-c-130j-sustainment

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DSCA Notifies Congress Of Potential FMS Sales To The United Kingdom

April 28, 2023: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress of the following possible Foreign Military Sale to the United Kingdom. The Government of the United Kingdom has requested to buy up to seven hundred sixty-eight (768) Advanced Precision Kill Weapon System-II (APKWS-II) All Up Round (AURs) (Single Variant). Also included is support equipment; spare and repair parts; publications and technical documentation; transportation; U.S. Government and contractor engineering, technical and logistical support services; and other related elements of logistical and program support. The total estimated cost is $31.2 million.

https://www.dsca.mil/press-media/major-arms-sales/united-kingdom-advanced-precision-kill-weapon-system-ii

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April 26, 2023: The European Defence Agency (EDA) and the U.S. Department of Defense (DoD) have formalized a framework for cooperation through the signing of an Administrative Arrangement (AA). The two parties have reached an understanding on an initial scope of cooperation, which may, upon mutual consent, progressively develop in the future.

Forum of exchange and dialogue: The AA will enable a substantial defense dialogue on all topics within EDA’s remit and invitations for U.S. DoD to attend relevant meetings of EDA’s Steering Board and for EDA to attend meetings convened by the U.S. DoD, as appropriate.
Activities of cooperation: Initial activities include consultations on the impact of EU Registration, Evaluation, Authorisation, and Restriction of Chemicals (REACH) regulation; military mobility; supply chain issues; and the impact of climate change on defense. It also allows for U.S. participation in the open session of the European Defence Standardisation Committee.

https://www.defense.gov/News/Releases/Release/Article/3373635/dod-signs-new-administrative-arrangement-with-european-defence-agency/

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

The U.S. Department Of Commerce, The Bureau Of Industry And Security (BIS) Will Treat Failure To Voluntarily Disclose A Significant Violation As An Aggravating Factor

April 18, 2023: The U.S. Department of Commerce, The Bureau of Industry and Security (BIS) updated its policy regarding voluntary self-disclosures and disclosures concerning others. Effective compliance is the first line of effective enforcement and BIS needs the support and cooperation of U.S. businesses and universities – those who are at the forefront of these extraordinary technological advances. Both industry and academia must have proper compliance systems in place to identify, prevent, and mitigate export control violations. An important part of a robust export compliance system is a process for making two different types of disclosures to our Office of Export Enforcement: (1) voluntary self-disclosures (VSDs) about parties’ own possible violations of the Export Administration Regulations (EAR); and (2) disclosures about possible EAR violations by someone else.

BIS specifically wants to further incentivize the submission of VSDs when industry or academia uncovers significant possible violations of the EAR. Note the modifier “significant” before “possible violations of the EAR.” BIS is not focused on increasing the number of minor or technical VSDs. BIS wants to let VSD filers know that when they identify multiple minor technical violations close in time, they can submit one overarching submission (as opposed to in multiple separate VSDs) to help streamline the process on their end and conserve resources. Rather, BIS is interested in increasing the number of VSDs it receives that disclose significant possible violations – the types of violations that reflect potential national security harm.

BIS has advised that when someone chooses to file a VSD, they get concrete benefits; however when someone affirmatively chooses not to file a VSD, they risk incurring concrete costs. In the past, BIS has consistently applied it as a mitigating factor when a VSD has been filed after a potential violation was uncovered. Going forward, BIS will also consistently apply this factor as an aggravating factor when a significant possible violation has been uncovered by a party’s export compliance program, but no VSD has been submitted.

https://www.bis.doc.gov/index.php/documents/enforcement/3262-vsd-policy-memo-04-18-2023/file

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The U.S. Department of Commerce, Bureau of Industry and Security (BIS) Added Certain Instruments For The Automated Synthesis Of Peptides As A Section 1758 Emerging And Foundational Technology

April 20, 2023: 88 Fed. Reg. 24341: The Bureau of Industry and Security (BIS), maintains controls on the export, reexport and transfer (in-country) of dual-use items and less sensitive military items pursuant to the Export Administration Regulations (EAR). Certain instruments for the automated synthesis of peptides (automated peptide synthesizers) have been identified by BIS as a Section 1758 emerging and foundational technology. In this rule, BIS proposes controls for these automated peptide synthesizers. BIS is seeking public comments on the proposed controls no later than May 22, 2023.

https://www.federalregister.gov/documents/2023/04/20/2023-08269/section-1758-technology-export-controls-on-instruments-for-the-automated-chemical-synthesis-of

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National Institute of Standards and Technology (NIST)

The National Institute of Standards and Technology (NIST) Outlines Its Vision And Strategy For A National Semiconductor Technology Center (NSTC)

April 25, 2023: National Institute of Standards and Technology (NIST) has released a paper outlining its vision and strategy for a National Semiconductor Technology Center (NSTC), a key component of the research and development program established by President Biden’s CHIPS and Science Act. CHIPS for America includes the CHIPS Program Office, responsible for semiconductor incentives, and the CHIPS Research and Development Office, responsible for R&D programs, that both sit within the NIST at the Department of Commerce. NIST promotes U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology in ways that enhance economic security and improve our quality of life. NIST is uniquely positioned to successfully administer the CHIPS for America program because of the bureau’s strong relationships with U.S. industries, its deep understanding of the semiconductor ecosystem, and its reputation as fair and trusted.

Chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.nist.gov/system/files/documents/2023/04/25/A%20Vision%20and%20Strategy%20for%20the%20NSTC.pdf

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U.S. Census Bureau

The U.S. Census Bureau Issued Tips On How To Address The Most Frequent AES Response Messages

April 19, 2023: 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: 505

Narrative: Value of Goods Contains Non-Numerics

Severity: Fatal

Reason: The Value of Goods reported contains non-numerics or spaces.

Resolution: The Value of Goods must be reported as numerics on the EEI.

Verify the Value of Goods, correct the shipment and resubmit.

Response Code: 808

Narrative: Improbable Destination for Commodity

Severity: Verify

Reason: For the reported Schedule B/HTS Number, the Country of Destination Code is improbable.

Resolution: Certain products are highly unlikely to be exported to certain Countries of Destination based on historical data and industry input. This might indicate either a keying error or misclassification of the product.

Verify the Schedule B/HTS Number and Country of Destination Code, correct the shipment and resubmit (if necessary). If the information is verified correct as reported, no action is necessary.

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:

April 19, 2023: 88 Fed. Reg. 24258: The U.S. Department of State, 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 person known as Sami Mahmud Mohammed al-Uraydi (also known as Sami Mahmoud Mohammad Eridi and Abu Mahmud al-Shami) is a leader of Hurras al-Din, a group whose property and interests in property are currently blocked pursuant to a determination by the Secretary of State pursuant to E.O. 13224 and should therefore be designated as a Specially Designated Global Terrorist.

https://www.federalregister.gov/documents/2023/04/19/2023-08210/designation-of-sami-mahmud-mohammed-al-uraydi-as-a-specially-designated-global-terrorist

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April 19, 2023: 88 Fed. Reg. 24258: The U.S. Department of State, 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 there is a sufficient factual basis to find that Qari Amjad uses the additional aliases Mufti Hazrat Deroji and Mufti Hazrat Ali. It was also concluded that Mufti Hazrat Deroji is the primary name for this person. Pursuant to Section 1(a)(ii) of E.O. 13224, The designation of Qari Amjad as a Specially Designated Global Terrorist is amended to include the following new aliases: Mufti Hazrat Deroji and Mufti Hazrat Ali.

https://www.federalregister.gov/documents/2023/04/19/2023-08208/amendment-of-the-designation-of-qari-amjad-and-other-aliases-as-a-specially-designated-global

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

April 12, 2023: 88 Fed. Reg. 23332: The Department of Commerce, Bureau of Industry and Security (BIS) added the following twenty eight entities to the Entity List:

Armenia:

Tako LLC.

China:

3HC Semiconductors (HK) Co., Ltd.;
Allparts Trading Co., Ltd.;
Avtex Semiconductor Limited;
ETC Electronics Ltd.;
Leadway Technology Limited;
Maxtronic International Co., Ltd.;
Newsuntech Electronics Limited;
STK Electronics (HK) Co., Ltd.;
Wynn Electronics Co. Ltd.;
Xinnlinx Electronics Pte Ltd.;
Yishang Network (Shenzhen) Co., Ltd.; and
Yongli Electronic Components (Shenzhen) Co., Ltd.

Malta:

I JET GLOBAL DMCC.

Russia:

Art Logistics LLC;
ETC Electronics;
GFK Logistics LLC;
Novastream Limited;
OOO Vest-Ost;
Promelektronika;
SKS Elektron Broker LLC;
TD Promelektronika LLC;
Trust Logistics; and
Trust Logistics Group LLC.

Singapore:

Xinnlinx Electronics Pte Ltd.

Spain:

I JET GLOBAL DMCC.

Syria:

I JET GLOBAL DMCC.

Turkey:

Dexias Industrial Products and Trade Limited Company.

United Arab Emirates:

I JET GLOBAL DMCC; and
Success Aviation Services FZC.

Uzbekistan:

Alfa Beta Creative LLC; and
GFK Logistic Asia LLC.

https://www.bis.doc.gov/index.php/documents/2020-virtual-conference/3263-88-fr-23332/file

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April 14, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has renewed for 180 days the Temporary Denial Order denying the export privileges of URAL Airlines JSC of Russia.

Federal Register :: URAL Airlines JSC, Utrenniy Lane 1-g, Yekaterinburg, Russia 620025; Order Renewing Temporary Denial of Export Privileges

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April 14, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has renewed for 180 days the Temporary Denial Order denying the export privileges of Aviastar-TU of Russia.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1496-e2835/file

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

April 4, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two Lebanese brothers — Raymond Zina Rahme and Teddy Zina Rahme — who used their wealth, power, and influence to engage in corrupt practices that contribute to the breakdown of the rule of law in Lebanon, thereby undermining Lebanon’s democratic processes to the detriment of the Lebanese people. At a time when the Lebanese people face significant economic distress, a dire energy crisis, and unprecedented political dysfunction, the Rahme brothers have used their business empire and political connections to enrich themselves at the expense of their fellow citizens.

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

Rahme, Raymond Zina of Lebanon; and
Rahme, Teddy Zina of Lebanon.

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

ZR ENERGY DMCC of the United Arab Emirates;
ZR GROUP SAL HOLDING of Lebanon; and
ZR LOGISTICS SAL of Lebanon.

https://home.treasury.gov/news/press-releases/jy1384 and https://ofac.treasury.gov/recent-actions/20230404

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April 5, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the former President of the Haitian Chamber of Deputies, Gary Bodeau (Bodeau), pursuant to Executive Order (E.O.) 13818, for his extensive involvement in corruption in Haiti. E.O. 13818 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 individual has been added to OFAC’s SDN List:

BODEAU, Gary of Haiti.

OFAC also took action to designate Genesis Market, one of the world’s largest illicit marketplaces, for its part in the theft and sale of device credentials and related sensitive information. Genesis Market gains unauthorized access to victim devices and offers stolen data, including usernames and passwords, for sale. This action was coordinated with the U.S. Department of Justice (DOJ) and international partners from a dozen countries, who are taking law enforcement actions against Genesis Market users across multiple jurisdictions and seizing the website domains associated with Genesis Market.

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

GENESIS MARKET of Russia.

https://home.treasury.gov/news/press-releases/jy1389 and https://ofac.treasury.gov/recent-actions/20230405 and https://home.treasury.gov/news/press-releases/jy1388

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April 11, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) updated its Specially Designated Nationals list to add one (1) individual for counter terrorism purposes:

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

AL-URAYDI, Sami Mahmud Mohammed of Jordan.

https://ofac.treasury.gov/recent-actions/20230411

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April 12, 2023: the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is further curbing Russia’s access to the international financial system through facilitators and their businesses. The United States, in coordination with the United Kingdom, is targeting the facilitation network of Alisher Usmanov, who is subject to sanctions in multiple jurisdictions. This action also includes designations to reinforce existing measures and further disrupt Russia’s importation of critical technologies used in its war against Ukraine. In total, OFAC is designating 25 individuals and 29 entities with touchpoints in 20 jurisdictions. The U.S. Department of State is concurrently designating several entities operating in the defense sector of the Russian Federation economy and entities supporting Russia’s war against Ukraine, as well as additional entities associated with Russia’s State Atomic Energy Corporation (Rosatom). For more information on these State actions, see the fact sheet at the website below. Additionally, the U.S. Department of Commerce will take concurrent action to add 28 entities to its Entity List.

OFAC issued the following Russia-related General Licenses:

General License 62: “Authorizing the Wind Down of Transactions Involving Holdingovaya Kompaniya Metalloinvest AO, MegaFon PAO, Limited Liability Company USM Telecom, or Akkermann Cement Ca Limited Liability Company”. This general license authorizes all transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of any transaction involving Holdingovaya Kompaniya Metalloinvest AO (Metalloinvest), Megafon PAO (Megafon), Limited Liability Company USM Telecom (USM Telecom), Akkermann Cement Ca Limited Liability Company (Akkermann), or any entity in which Metalloinvest, Megafon, USM Telecom, or Akkermann owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern daylight time, July 11, 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). (b) This general license does not authorize:

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

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

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

https://ofac.treasury.gov/media/931606/download?inline

General License 63: “Authorizing Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Holdingovaya Kompaniya Metalloinvest AO”. This general license authorizes 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 Holdingovaya Kompaniya Metalloinvest AO (Metalloinvest), or any entity in which Metalloinvest owns, directly or indirectly, a 50 percent or greater interest purchased prior to April 12, 2023 (“covered debt or equity”), to a non-U.S. person are authorized through 12:01 a.m. eastern daylight time, July 11, 2023. This general license also authorizes all transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to facilitating, clearing, and settling trades of covered debt or equity that were placed prior to 4:00 p.m. eastern daylight time, April 12, 2023 are authorized through 12:01 a.m. eastern daylight time, July 11, 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 daylight time, April 12, 2023 that (i) include a blocked person described above in 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, July 11, 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).

This general license does not authorize:

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

(2) U.S. persons to purchase or invest in, or to facilitate the purchase of or investment in, directly or indirectly, covered debt or equity, other than purchases of or investments in covered debt or equity ordinarily incident and necessary to the divestment or transfer of covered debt or equity as described in above in this general license.

This general license also does not authorize:

https://ofac.treasury.gov/media/931611/download?inline

General License 64: “Authorizing Certain Transactions Involving Kommersant”. This general license authorizes all transactions prohibited by Executive Order (E.O.) 14024 involving Joint-Stock Company Kommersant, or any entity in which Joint-Stock Company Kommersant owns, directly or indirectly, a 50 percent or greater interest, that are ordinarily incident and necessary to the operations of the newspaper Kommersant are authorized.

This general license does not authorize:

(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 above in this general license, unless separately authorized.

https://ofac.treasury.gov/media/931616/download?inline

General License 65: “Authorizing Transactions Related to Telecommunications and Certain Internet-based Communications Involving MegaFon PAO or Digital Invest Limited Liability Company.” This general license authorizes all transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR) that are ordinarily incident and necessary to the receipt or transmission of telecommunications involving Megafon PAO (Megafon) or Digital Invest Limited Liability Company (Digital Invest), or any entity in which Megafon or Digital Invest owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest (collectively, “Covered Entities”), and involving Tajikistan or Uzbekistan, 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 Covered Entities 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.

This general license does not authorize:

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

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

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

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

https://ofac.treasury.gov/media/931621/download?inline

OFAC also revoked Russia-related General License 15, on April 12, 2023, “Authorizing Transactions Involving Certain Blocked Entities Owned by Alisher Burhanovich Usmanov.”

https://ofac.treasury.gov/media/918901/download?inline

OFAC issued Frequently Asked Question:

Question 1122: Certain transactions related to telecommunications and certain internet-based communications are already authorized by Russia-related General License (GL) 25C. What additional transactions does Russia-related GL 65 authorize?

Answer: The United States generally supports the free flow of information globally as facilitated by telecommunications and certain internet-based communications. Accordingly, GL 25C authorizes — with certain exceptions and exclusions — (i) 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) and (ii) the exportation or reexportation, sale, or supply from the United States or by U.S. persons, wherever located, to the Russian Federation of services, software, hardware, or technology that are incident to the exchange of communications over the internet and that are prohibited by the RuHSR (see FAQ 1040).

However, certain transactions related to Megafon PAO (Megafon) or Limited Liability Company Digital Invest (Digital Invest) — which were designated by the Department of State on April 12, 2023 pursuant to Executive Order 14024 — or any entity in which Megafon or Digital Invest owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest (collectively, “Covered Entities”), may not involve the Russian Federation, and thus, may not be authorized by GL 25C. To ensure certain transactions related to telecommunications and internet-based communications involving the Covered Entities and Tajikistan or Uzbekistan can continue, OFAC issued GL 65. GL 65 authorizes — with certain exceptions and exclusions — (i) all transactions prohibited by the RuHSR that are ordinarily incident and necessary to the receipt or transmission of telecommunications involving the Covered Entities, and involving Tajikistan or Uzbekistan or (ii) the exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, wherever located, to the Covered Entities of services, software, hardware, or technology incident to the exchange of communications over the internet that is prohibited by the RuHSR. Please note that GL 65 does not relieve persons from compliance with other Federal laws, such as the export licensing requirements maintained by the Department of Commerce’s Bureau of Industry and Security.

https://ofac.treasury.gov/faqs/1122

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

Attikouris, Kyriakos of Cyprus;
Bashkirov, Aleksei Vladimirovich of Russia;
Ditrikh, Yevgeniy Ivanovich of Russia;
Efendiev, Nazim Tofik Ogly of Russia;
Firov, Alim Khazkhismelovich of Russia;
Georgiou, Marilena of Cyprus;
Giannakou, Kostas of Cyprus;
Giger, Markus Jakob of Switzerland and the United Kingdom;
Grigoriev, Grigoriy Igorevich of Russia;
Ismailova, Gulbakhor Burkhanovna of Uzbekistan;
Kamperi, Kyriaki Demetriou of Cyprus and the United Kingdom;
Kazikaev, Valery Dzhekovich of Italy, Slovakia and Russia;
Khusnullin, Marat Shakirzyanovich of Russia;
Kocharov, Vakhtang Ernstovich of Azerbaijan, Cyprus, Russia and the United Arab Emirates;
Kocharova, Gulnoz Zunnurovna of Russia, Cyprus, Switzerland and Uzbekistan;
Kosov, Nikolay Nikolayevich of Hungary;
Laszloczki, Imre, of Hungary;
Narzieva, Nasiba Erkinovna of Uzbekistan;
Narzieva, Saodat Burxanovna of Uzbekistan;
Nasirkhodjaev, Shokhrukh Olimdjonovich of the United Arab Emirates and Uzbekistan;
Oehri, Roland of Liechtenstein, Austria and Switzerland;
Ostrowsky, Alexander of Austria and Switzerland;
Pakermanov, Evgeny Markovich of Russia;
Potapov, Georgy Nugzarovich of Hungary and Russia;
Serghides, Demetrios of Cyprus, Monaco and Italy;
Skoch, Varvara Andreevna of Russia and the United Kingdom;
Skoch, Vladimir Nikitovich of Ukraine and Russia;
Streshinskaya, Natalia Alexeevna of Cyprus, France and Russia;
Streshinskiy, Vladimir Yakovlevich of Russia, Switzerland and Ukraine;
Vakanas, Antonis Kyriakou of Cyprus and the United Kingdom;
Vassiliades, Anna Mariaof Cyrprus and the United Kingdom;
Vassiliades, Christodoulos Georgiou of Cyprus and the United Kingdom;
Vassiliades, Giorgos of Cyprus and the United Kingdom; and
Viner, Natan Adadievich of Russia.

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

Aeromotus Unmanned Aerial Vehicles Trading LLC of the United Arab Emirates;
AF Telecom Holding Limited Liability Company of Russia;
Akhangarancement Joint Stock Company of Uzbekistan;
Akkerman Cement OOO of Russia;
Akkermann Cement CA Limited Liability Company of Uzbekistan;
Alayne Investments Limited of Cyprus;
All Russian Children And Youth Military Patriotic Public Movement Youth Army of Russia;
Almenor Holdings Limited of Cyprus;
Artvin Maritime And Trade Limited Company of Turkey;
AZU International Bilgi Teknolojileri Ve Dis Ticaret Limited Sirketi of Turkey;
China Head Aerospace Technology Company of China;
Christodoulos G. Vassiliades & Co. LLC of Cyprus;
City Development Limited Liability Company of Russia;
Dexias International Products And Trade Limited Company of Turkey;
Dexias Limited Liability Company of Russia;
Digital Invest Limited Liability Company of Russia;
Federal Scientific And Production Center Mv Protsenko Start Production Association JSC of Russia;
Fedorovskoe OOO of Russia;
GKR Nedvizhimost OOO of Russia;
GKR OOO of Russia;
GKR UK OOO of Russia;
Gruppa Rodina OOO of Russia;
Hamriyah Steel Free Zone Company of the United Arab Emirates;
Headey Investments Limited of Cyprus;
Hightrail LTD of Cyprus;
Holdingovaya Kompaniya Metalloinvest AO of Russia;
Hulm Al Sahra Electric Devices Trading of the United Arab Emirates;
International Digital Technology Centre Limited Liability Company of Russia;
International Investment Bank of Hungary;
Investitsionnaya Gruppa Partnery OOO of Russia;
Ionics Nominees Limited of Cyprus;
Ironhill Holdings Limited of Cyprus;
Joint Stock Company IIB Capital of Russia;
Joint Stock Company Vladimir Production Amalgamation Tochmash of Russia;
JSC Nauchno Issledovatelsky I Konstruktorsky Institut Montazhnoy Technology Atomstroy of Russia;
King-Pai Technology HK CO., Limited of China;
Klaret Aviation Limited of the Cayman Islands;
Kovrov Mechanical Plant PJSC of Russia;
KTH Group SPOL SRO of Slovakia;
Lebedinskiy Gorno Obogatitelniy Kombinat Joint Stock Company of Russia;
Ledra Nominees Limited of Cyprus;
Ledra Trustee Services Limited of Cyprus;
Ledra Trustees Limited of Cyprus;
Limited Liability Company Forum of Russia;
Limited Liability Company Land Technologies of Russia;
Limited Liability Company NDN of Russia;
Limited Liability Company Novelco of Russia;
Limited Liability Company Novelco Global Forwarding of Russia;
Limited Liability Company Novogorsk Real Estate of Russia;
Limited Liability Company Translineinvest of Russia;
Limited Liability Company USM Telecom of Russia;
Management Company Metalloinvest LLC of Russia;
Masterskill Investments Limited of Cyprus;
Megafon PAO of Russia;
Metalloinvest Trading AG of Switzerland;
Mikhailovskiy Gorno Obogatitelniy Kombinat Joint Stock Company of Russia;
Miramonte Investments Limited of Cyprus;
Navis Marine Limited of the Cayman Islands;
Nexign Joint Stock Company of Russia;
Obshchestvo S Ogranichennoi Otvetstvennostyu Kholdingovaya Kompaniya Yuesem of Russia;
Omnia Antibes of France;
Omnia Services Cyprus LTD of Cyprus;
Onefactor Limited Liability Company of Russia;
Oskol Electrometallurgical Plant AO of Russia;
Patriot Private Military Company of Russia;
Platifino Limited of the Isle of Man;
Pomerol Capital SA of Switzerland;
Rodina Stroi Grupp OOO of Russia;
Rusatom Overseas Joint Stock Company of Russia;
Salda Management Maritime And Trade Limited Company of Turkey;
Savoler Development Limited of Cyprus;
Sequoia Treuhand Trust REG of Liechtenstein;
Smart Trading Transportation Industry And Trade Limited Company of Turkey;
Sommen Secretarial Services Limited of Cyprus;
State Budgetary Educational Institution Of Additional Education Of The Republic Of Crimea Crimea Patriot Center of Ukraine;
Storm Technologies Limited Liability Company of Russia;
The Sister Trust of Switzerland and Bermuda;
Udokan Copper LLC of Russia;
USM Cement LLC of Russia;
USM City Limited Liability Company of Russia;
USM Gold Limited Liability Company of Russia;
USM Metalloinvest Limited Liability Company of Russia;
USM Urban Mining Limited Liability Company of Russia;
U-TERRA LLC of Russia;
Vassiliades & CO UK Limited of the United Kingdom;
Vassiliades & Co. Malta Limited of Malta;
Waldau Investments Limited of Russia;
WCP Management Company LTD of the United Arab Emirates;
Windfel Properties Limited of Cyprus;
Yuesem Markirovka OOO of Russia; and
Zincum LLC of Russia.

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

Alara (TCA7253) Bulk Carrier Turkey flag; Vessel Registration Identification IMO 9741724;
Alexandr Deev (UBSX6) Passenger Russia flag; Vessel Registration Identification IMO 9940186;
Alpha Helios (UBSV3) General Cargo Russia flag; Vessel Registration Identification IMO 9924340;
Alpha Hermes (UBDW5) General Cargo Russia flag; Vessel Registration Identification IMO 9924352;
Avrora Altair (UBYS) Oil Products Tanker Russia flag; Vessel Registration Identification IMO 9300348;
Avrora Regul (UGGU) Oil Products Tanker Russia flag; Vessel Registration Identification IMO 9300350;
Avrora Sirius (UHSW) Oil Products Tanker Russia flag; Vessel Registration Identification IMO 9313589;
Baltiysk (UHMA) Roll-on Roll-off Russia flag; Vessel Registration Identification IMO 8318130;
Gennady Egorov (UBGX4) General Cargo Russia flag; Vessel Registration Identification IMO 9945124;
Ipsala (TCA7254) Bulk Carrier Turkey flag; Vessel Registration Identification IMO 9759666;
Leonid Pestrikov (UBJV2) General Cargo Russia flag; Vessel Registration Identification IMO 9922122;
Navis 6 (UAQK) General Cargo Russia flag; Vessel Registration Identification IMO 9868807;
Nikolai Leonov (UBLV9) General Cargo Russia flag; Vessel Registration Identification IMO 9922134;
Nikolay Anishchenkov General Cargo Russia flag; Vessel Registration Identification IMO 9942392;
Petrotrans 5902 (UBXT9) General Cargo Russia flag; Vessel Registration Identification IMO 9900514;
ULA (TCA7252) Bulk Carrier Turkey flag; Vessel Registration Identification IMO 9780940;
Victor Andryukhin (UBIV4) General Cargo Russia flag; Vessel Registration Identification IMO 9922110;
Vladimir Latyshev (UBEV8) General Cargo Russia flag; Vessel Registration Identification IMO 9921996; and
Vyacheslav Arshinov (UBGX2) General Cargo Russia flag; Vessel Registration Identification IMO 9945136.

https://www.state.gov/further-curbing-russias-efforts-to-evade-sanctions-and-perpetuate-its-war-against-ukraine/ and https://home.treasury.gov/news/press-releases/jy1402 and https://ofac.treasury.gov/recent-actions/20230412

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April 14, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two entities in the People’s Republic of China (PRC) and five individuals, based in the PRC and Guatemala, for supplying precursor chemicals to drug cartels in Mexico for the production of illicit fentanyl intended for U.S. markets.

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

Rubio Zea, Ana Gabriela of Guatemala;
Wang, Hongfei of China;
Wu, Yaqin of China;
Wu, Yonghao of China; and
Yao, Huatao of China.

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

Suzhou Xiaoli Pharmatech CO., LTD of China; and
Wuhan Shuokang Biological Technology CO., LTD of China.

U.S. Sanctions Suppliers of Precursor Chemicals for Fentanyl Production | U.S. Department of the Treasury and Counter Narcotics Designations; Russia-related Designations Updates | Office of Foreign Assets Control (treasury.gov)

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April 18, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated a vast international money laundering and sanctions evasion network of 52 individuals and entities in Lebanon, the United Arab Emirates, South Africa, Angola, Côte d’Ivoire, the Democratic Republic of the Congo, Belgium, the United Kingdom, and Hong Kong. This network facilitated the payment, shipment, and delivery of cash, diamonds, precious gems, art, and luxury goods for the benefit of Hizballah financier and Specially Designated Global Terrorist Nazem Said Ahmad, who was designated on December 13, 2019, for providing material support to Hizballah. The network designated includes dozens of individuals and their associated companies involved in assisting Nazem Said Ahmad in evading U.S. sanctions to maintain his ability to finance Hizballah and his luxurious lifestyle. This designation is a part of a coordinated action with the Department of Homeland Security, the Department of State’s Rewards for Justice program, and the United Kingdom.

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

Ahmad, Firas Nazem of South Africa and Belgium;
Ahmad, Hind Nazem of France and Belgium;
Baker, Rami Yaacoub of Lebanon and Belgium;
Baker, Rima Yaacoub of Lebanon and Belgium;
El Riz, Daoud of France and the Democratic Republic of the Congo;
Francisco, Maricel Factura of the Philippines;
Ghaddar, Ibrahim Fadel of the United Arab Emirates;
Hijazi, Mohamad Hussein of the United Arab Emirates;
Ismail, Mohamad Hassan of Lebanon;
Khawaja, Mohamad of the United Arab Emirates and Lebanon;
Mossalem, Ali of Lebanon;
Murad, Bassem of Belgium;
Nachar, Ali of Lebanon;
Nachar, Hussein Moussa of Lebanon and the United Kingdom;
Nagarajan, Sundar of Belgium and India;
Nasser, Rim of Lebanon;
Osseiran, Ali of Lebanon and the United Arab Emirates;
Saad, Fadi Abbas of Lebanon;
Sader, Fadi of China and Lebanon; and
Wehbe, Mohamad of Lebanon and South Africa.

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

76 Benmore Garden Trust of South Africa;
Amana Diam DMCC of the United Arab Emirates;
Artual Gallery of Lebanon;
Associates Of Partners SAL Off-Shore of Lebanon;
Best Diamond House DMCC of the United Arab Emirates;
Bexley Way General Trading L.L.C. of the United Arab Emirates;
Collecting Bee SRL of Romania;
Debbiye 383 SAL of Lebanon;
Dida of the Cote d Ivoire;
Diotrix Proprietary LTD of South Africa;
Fadico H.K. Limited of China;
Fadico S A CC of South Africa;
G and S Diamond FZE of the United Arab Emirates;
Gavia Tradings PTY LTD of South Africa;
Helics GEMB of Belgium;
Highrise Property Investments PTY LTD of South Africa;
House Of Art Limited of China;
Idiams DMCC of the United Arab Emirates;
Ismail General Trading of Lebanon;
Joud General Trading of Lebanon;
Mega Gems PTY LTD of South Africa;
MSD Capital PTY LTD of South Africa;
MSD DMCC of the United Arab Emirates;
MSD SPRL Diamond Trading of South Africa;
Murad En Sons Diamonds of Belgium;
Oriental Dynasty Limited of China;
Oxfocento Proprietary LTD of South Africa;
Park Ventures SAL of Lebanon;
Thula Uzwe Trading of South Africa;
Tia Trading 2013 LTD OOD of Bulgaria;
United Investment Group SAL of Lebanon; and
White Star DMCC of the United Arab Emirates.

https://home.treasury.gov/news/press-releases/jy1422 and https://ofac.treasury.gov/recent-actions/20230418

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April 19, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated one individual and six entities in a sanctions evasion network that has facilitated Iran’s procurement of electronic components for its destabilizing military programs, including those used in unmanned aerial vehicles (UAVs). Particularly, this action targets the head of U.S.-designated Iran’s Pardazan System Namad Arman (PASNA), and the entity’s Iran-, Malaysia-, Hong Kong-, and PRC-based front companies and suppliers that have enabled PASNA’s procurement of goods and technology. This action also updates the OFAC Specially Designated Nationals and Blocked Persons List (SDN List) entry for PASNA to include an alias and the names of two fictitious companies used by PASNA in its procurement efforts.

Iran’s proliferation of UAVs and other weapons continues to destabilize the Middle East region and beyond. Since September 2022, OFAC has issued several rounds of designations targeting Iran’s UAV and missile programs, to include elements involved in production, procurement, and proliferation.

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

Khoshghadam, Mehdi of Malaysia and Iran.

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

Amvaj Nilgoun Bushehr Co., of Iran;
Arttronix International Hk Limited of China;
Jotrin Electronics Limited of China;
Pasna International Group Snd. Bhd of Malaysia;
Vohom Technology Hk Co., Limited of China; and
Yinke Hk Electronics Company Limited of China.

OFAC also issued Venezuela-related General License 5K, “Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After July 20, 2023.”

Venezuela-related General License 5K: On or after July 20, 2023, all transactions related to, the provision of financing for, and other dealings in the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond that would be prohibited by subsection l(a)(iii) of Executive Order (E.O.) 13835 of May 21, 2018, as amended by E.O. 13857 of January 25, 2019, and incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized. This general license does not authorize any transactions or activities otherwise prohibited by the VSR, or any other part of 31 CFR chapter V. Effective April 19, 2023, General License No. 5J, dated January 17, 2023, is replaced and superseded in its entirety by this General License No. 5K.

OFAC amended the following Venezuela-related Frequently Asked Question (595).

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

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

General License 5 was replaced and superseded by General License 5A on October 24, 2019 with a delay in the effectiveness of the authorization in the general license. Since that date, OFAC has extended the delay in effectiveness a number of times. Most recently, OFAC issued General License 5K on April 19, 2023, which further delays the effectiveness of the authorization in GL 5 until July 20, 2023. Between October 24, 2019 and July 20, 2023 (the date the authorization in General License 5K becomes effective), there is no authorization in effect that licenses against subsection 1(a)(iii) of E.O. 13835 applicable to the holders of the PdVSA 2020 8.5 percent bond. As a result, during such period, transactions related to the sale or transfer of CITGO shares in connection with the PdVSA 2020 8.5 percent bond are prohibited, unless specifically authorized by OFAC.

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

https://home.treasury.gov/news/press-releases/jy1423 and https://ofac.treasury.gov/recent-actions/20230419 and https://ofac.treasury.gov/media/931646/download?inline and https://ofac.treasury.gov/faqs/595

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April 19, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated three Nicaraguan judicial officials involved in human rights abuses conducted by the regime of Nicaraguan President Daniel Ortega and the broader oppression of Nicaraguan citizens who oppose his government.

The three individuals designated are judges or presiding magistrates in the Managua District Court of Appeals, the Second District Trial Court in Managua, and the First Criminal Appeals Court of Managua. These courts affirmed decisions that revoked the citizenship of more than 300 Nicaraguan citizens.

The Managua District Court of Appeals declared 222 Nicaraguan citizens traitors of the state and stripped them of their citizenship. An additional 94 individuals had their citizenship revoked and were declared “fugitives of the law.” One of the judges designated issued a sentencing order imposing penalties on a prominent Nicaraguan Catholic bishop who was given the opportunity to depart Nicaragua along with the 222 departing individuals but refused to go into exile. The bishop was sentenced to over 26 years in prison, stripped of his citizenship, and declared a traitor for being critical of the regime. These actions reflect the regime’s disregard for human rights in Nicaragua.

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

Rodriguez Mejia, Ernesto Leonel of Nicaragua;
Rothschuh Andino, Octavio Ernesto of Nicaragua; and
Tardencilla Rodriguez, Nadia Camila of Nicaragua.

https://home.treasury.gov/news/press-releases/jy1424

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April 24, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned four senior officials of the Law Enforcement Forces of Iran (LEF) and Islamic Revolutionary Guard Corps (IRGC), the primary Iranian security forces responsible for the regime’s brutal suppression of the protests that broke out in September 2022 following the arrest and death of Mahsa Jina Amini while in the custody of Iran’s Morality Police. OFAC is also taking action against the new Secretary of Iran’s Supreme Council of Cyberspace (SCC), the authority responsible for Iran’s cyberspace policy and blockage of popular websites. This action is being taken in coordination with the United Kingdom, which is also imposing similar sanctions on senior Iranian security officials.

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

Absalan, Parviz of Iran;
Adinehvand, Salman of Iran;
Aghamiri, Seyyed Mohammad Amin of Iran;
Cheng, Hung Man of China;
Goshtasbi, Amanollah of Iran;
Seyedoshohada, Ahmad Khadem of Iran;
Sim, Hyon Sop of China; and
Wu, Huihui of China.

https://home.treasury.gov/news/press-releases/jy1436 and https://ofac.treasury.gov/recent-actions/20230424

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April 27, 2023: 88 Fed. Reg. 25491: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) published amendment updates to the Iranian Transactions and Sanctions Regulations, 31 CFR part 560, and the Western Balkans Stabilization Regulations, 31 part CFR 588, to correct typographical errors, update cross-references, and publish a general license that had been omitted from a prior update.

https://ofac.treasury.gov/media/931671/download?inline

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April 27, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned four senior officials of Iran’s Islamic Revolutionary Guard Corps Intelligence Organization (IRGC-IO), an entity that is being concurrently designated by the State Department for its role in the hostage-taking or wrongful detention of U.S. nationals in Iran. The IRGC-IO frequently holds and interrogates detainees in the notorious Evin Prison, in addition to the IRGC-IO’s direct role in the repression of protests and arrest of dissidents, including dual nationals. This action is the first under Executive Order (E.O.) 14078, “Bolstering Efforts to Bring Hostages and Wrongfully Detained U.S. Nationals Home,” which reaffirms the fundamental commitment of the U.S. government to bring home those U.S. nationals held hostage and wrongfully detained abroad.

Concurrent with this action, OFAC implemented the Department of State’s designation of Russia’s Federal Security Service, in addition to the IRGC-IO, for their involvement in the wrongful detention of U.S. nationals abroad.

OFAC also sanctioned Eduardo Pardo Espino, who is a fugitive from a U.S. drug trafficking charge, along with six other individuals and 19 Mexican companies. These individuals and companies are linked, directly or indirectly, to timeshare fraud led by the Cartel de Jalisco Nueva Generacion (CJNG), which is a violent Mexico-based organization that traffics a significant proportion of the illicit fentanyl and other deadly drugs that enter the United States. OFAC coordinated this action with the Government of Mexico and U.S. Government partners.

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

Bazghandi, Rouhollah of Iran;
Gomez Arias, Luis Lorenzo of Mexico;
Gonzalez Villegas, Ian Jassiel of Mexico;
Lelo De Larrea Ventimilla, Horacio Edmundo of Mexico;
Luquin Rodriguez, Brayan Moises of Mexico;
Mohagheghi, Mohammad Hassan of Iran;
Padilla Zarate, Clemente of Mexico;
Pardo Espino, Eduardo of Mexico;
Rivas Sanchez, Pedro of Mexico; and
Sayyari, Mohammad Mehdi of Iran.

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

Aka Integral Services, S. De R.L. DE C.V., of Mexico;
Asesores Y Promotores ACG, S.A. DE C.V., of Mexico;
Atlantic Diamond Group, S.A. DE C.V., of Mexico;
Besthings, S.A. DE C.V., of Mexico;
Bussines Corporativo T Service Inc, S.A. DE C.V., of Mexico;
Constructores B2, S.A. DE C.V., of Mexico;
Corporativo Bussines Mx Insider, S.A. DE C.V., of Mexico;
Corporativo Soporte Legal Recovery, S.A. DE C.V., of Mexico;
Envigh, S. DE R.L. DE C.V., of Mexico;
Islamic Revolutionary Guard Corps Intelligence Organization (A.K.A. Irgc Intelligence Organization; of Iran;
Magniservia, S.A. DE C.V., of Mexico;
NT Insurance Corporativo, S.A. DE C.V., of Mexico;
Produzioni Peca, S. DE R.L. DE C.V., of Mexico;
Resguardo De Valores Y Servicios Integrales RSVI, S.A. DE C.V., of Mexico;
RH Litman, S. DE R.L. DE C.V., of Mexico;
Servicios Administrativos Dantwoo, S.A. DE C.V., of Mexico;
Sociedad Spa Peninsula, S. DE R.L. DE C.V., of Mexico;
Suncan Mexico, S. DE R.L. DE C.V., of Mexico;
T Service Bussines Inc, S.A. DE C.V., of Mexico; and
Trados Comercio, S. DE R.L. DE C.V., of Mexico.

https://home.treasury.gov/news/press-releases/jy1444 and https://home.treasury.gov/news/press-releases/jy1443 and https://ofac.treasury.gov/recent-actions/20230427

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April 27, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Cyber-related General License 1C, “Authorizing Certain Transactions with the Federal Security Service.” OFAC is also amended three Cyber-related Frequently Asked Questions (501, 502, 503).

Cyber-related General License 1C: All transactions prohibited by the Cyber-Related Sanctions Regulations, 31 CFR part 578 (CRSR), the Weapons of Mass Destruction Proliferators Sanctions Regulations, 31 CFR part 544 (WMDPSR), or Executive Order (E.O.) 14078, involving the Federal Security Service (a.k.a. Federalnaya Sluzhba Bezopasnosti) (a.k.a. FSB) are authorized, provided that such transactions are ordinarily incident 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.

Except for the limited purposes described above it 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; or

(3) Complying with rules and regulations administered by the Federal Security Service.

Question 501: What does General License 1C (GL 1C), “Authorizing Certain Transactions with the Federal Security Service,” authorize?

Answer: GL 1C authorizes transactions with the Federal Security Service (a.k.a. Federalnaya Sluzhba Bezopasnosti) (a.k.a. FSB) that are ordinarily incident and necessary to requesting, receiving, utilizing, paying for, or dealing in certain licenses and authorizations for the importation, distribution, or use of certain information technology products in the Russian Federation. It also authorizes transactions ordinarily incident and necessary to compliance with rules and regulations administered by, and certain actions or investigations involving, the Federal Security Service.

This general license does not authorize U.S. persons to engage in transactions with the Federal Security Service, except for the limited purposes described above, nor does it authorize the exportation, reexportation, sale or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any goods, services, or technology to the so-called “Donetsk People’s Republic” or “Luhansk People’s Republic” (DNR/LNR) 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, pursuant to Executive Order 14065, or to the Crimea region of Ukraine.

Question 502: What sanctions remain in place on the Federal Security Service following the issuance of GL 1C?

Answer: GL 1C only authorizes certain transactions and activities with the Federal Security Service acting in its administrative and law enforcement capacities. The GL was issued in order to ensure that U.S. persons engaging in certain business activities in Russia that are not otherwise prohibited are not unduly impacted. All other transactions and activities involving any property subject to U.S. jurisdiction or within the possession or control of U.S. persons in which the Federal Security Service has an interest, including all other transactions and activities directly or indirectly with the Federal Security Service, remain prohibited unless exempt or otherwise authorized by OFAC.

Question 503: Does GL 1C authorize the exportation of hardware or software directly to the Federal Security Service, or where the Federal Security Service is the end user of such hardware and software?

Answer: No. GL 1C does not authorize the export of any goods, technology, or services directly or indirectly to the Federal Security Service or any other blocked person, except for the limited purposes of complying with rules and regulations administered by, and certain actions and investigations involving, the Federal Security Service or requesting certain licenses or authorizations for the importation, distribution, or use of information technology products in the Russian Federation.

https://ofac.treasury.gov/recent-actions/20230427 and chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://ofac.treasury.gov/media/931686/download?inline and https://ofac.treasury.gov/faqs/501 and https://ofac.treasury.gov/faqs/502 and https://ofac.treasury.gov/faqs/503

Fines and Penalties

April 5, 2023: Federal Court Orders Forfeiture of $826K in Funds Used in Attempt to Export Dual-Use High Precision Jig Grinder to Russia. An investigation into the attempted smuggling of a dual-use export-controlled item to Russia in violation of United States export laws and regulations has resulted in the forfeiture of approximately $826,000.

As alleged in court documents and statements made in court, beginning in 2018, operators of a Latvia-based corporation conspired with the operator of By Trade OU, an Estonia-based company, as well as individuals in Russia and a Russia-based company, to violate U.S. export laws and regulations and smuggle a jig grinder that was manufactured in Connecticut to Russia. A jig grinder is a high-precision grinding machine system that does not require a license to export to European Union countries, but does require a license for export and reexport to Russia because of its potential application in nuclear proliferation and defense programs. At no time did the defendants apply for, receive or possess a license of authorization from the U.S. Department of Commerce to export or reexport the jig grinder to Russia, as required by the Export Control Reform Act of 2018 and the Export Administration Regulations (EAR), which restrict the export of items that could make a significant contribution to the military potential of other nations or that could be detrimental to U.S. foreign policy and national security.

U.S. authorities, working with Latvian authorities, intercepted the jig grinder in Riga, Latvia, before it was to be shipped to Russia.

Several individuals and companies involved in this alleged scheme have been charged by indictment in the District of Connecticut with conspiracy, violation of the Export Control Reform Act, smuggling goods from the United States and international money laundering conspiracy offenses.

https://www.justice.gov/opa/pr/federal-court-orders-forfeiture-826k-funds-used-attempt-export-dual-use-high-precision-jig

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April 6, 2023: As part of a coordinated enforcement effort, the Department of Commerce’s Bureau of Industry and Security (“BIS”) and the Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) imposed a combined $3.3 million in civil penalties against Microsoft Corporation (“Microsoft”) for alleged and apparent violations of U.S. export controls and sanctions laws. Microsoft voluntarily self-disclosed the alleged violations to both BIS and OFAC, cooperated with the joint investigation conducted by BIS’s Office of Export Enforcement and OFAC, and took remedial measures after discovering the conduct at issue, which predated the export controls and sanctions imposed in connection with the current Russian war in Ukraine.

OFAC announced a settlement with Microsoft. Microsoft has agreed to remit $2,980,265.86 to settle its potential civil liability for 1,339 apparent violations of the Cuban Assets Control Regulations, the Iranian Transactions and Sanctions Regulations, the Syrian Sanctions Regulations, and the Ukraine-/Russia-Related Sanctions Regulations involving the exportation of services or software from the United States to comprehensively sanctioned jurisdictions and to Specially Designated Nationals or blocked persons in violation of OFAC’s Cuba, Iran, Syria, and Ukraine-/Russia-Related sanctions programs. The majority of the apparent violations involved blocked Russian entities or persons located in the Crimea region of Ukraine, and occurred as a result of the Microsoft Entities’ failure to identify and prevent the use of its products by prohibited parties. The settlement amount reflects OFAC’s determination that Microsoft’s conduct was non-egregious and voluntarily self-disclosed.

BIS imposed an administrative penalty of $624,013 on Microsoft. As part of the BIS settlement, Microsoft admitted to the conduct set forth in a Proposed Charging Letter (“PCL”) involving Microsoft’s subsidiary Microsoft Rus LLC (“Microsoft Russia”). Microsoft was given a $276,382 credit by BIS contingent upon Microsoft fulfilling its requirements under the OFAC settlement agreement, resulting in a combined overall penalty amount of $3,327,896.86.

https://ofac.treasury.gov/recent-actions/20230406 and https://home.treasury.gov/news/press-releases/jy1394 and https://ofac.treasury.gov/media/931591/download?inline and https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3259-2023-04-06-bis-press-release-bis-ofac-microsoft-settlement/file

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April 7, 2023: Niloufar Bahadorifar, a/k/a “Nellie Bahadorifar,” was sentenced to four years in prison for conspiring to violate the International Emergency Economic Powers Act (“IEEPA”) by providing services, including financial services, to Iran and the Government of Iran, in violation of U.S. sanctions against Iran, and for structuring. Bahadorifar pled guilty on December 15, 2022.

California Resident Sentenced To Four Years In Prison For Conspiring To Violate U.S. Sanctions Against Iran | USAO-SDNY | Department of Justice

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April 17, 2023: The Justice Department announced the indictment and arrest of John Can Unsalan, aka Hurrem Can Unsalan, the president of Metalhouse LLC, for engaging in a three-year scheme to violate U.S. sanctions against oligarch Sergey Kurchenko and two of Kurchenko’s companies by providing those sanctioned parties with over $150 million in return for steelmaking materials. As alleged in the indictment, between July 2018 and October 2021, Unsalan, 41, of Orlando, Florida, acting through his company, Metalhouse, transferred over $150 million to Kurchenko and companies controlled by Kurchenko. In return, Unsalan received from Kurchenko metal products used in steelmaking and attempted to collect from Kurchenko millions of dollars of funds for undelivered products.

https://www.justice.gov/opa/pr/president-metalhouse-llc-indicted-sanctions-evasion-and-international-money-laundering

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April 18, 2023: 88 Fed. Reg. 23620: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Gustavo Cavazos for five years until November 19, 2025. On November 19, 2020, Cavazos was convicted of smuggling firearms from the United States to Mexico without the required licenses. As a result of his conviction, the Court sentenced Cavazos to time served, three years of supervised release, and a $100 assessment.

https://www.federalregister.gov/documents/2023/04/18/2023-08120/in-the-matter-of-gustavo-cavazos-1117-cherokee-dr-pasadena-tx-77506-order-denying-export-privileges

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April 18, 2023: 88 Fed. Reg. 23621: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Darus Zehrbach for ten years until April 24, 2029. On April 24, 2019, Zehrbach was convicted of knowingly and willfully making a materially false, fictitious, fraudulent statement and representation, that is, the defendant stated in a letter to an agent of the United States Department of Commerce that any shipment he had caused to be made to Iran had originated in China when the defendant then and there knew that any shipment he had caused to be made to Iran had originated in the United States, in violation of 18 U.S.C. 1001(a)(2). Zehrbach was sentenced to six months in prison, one year of supervised release, and a $100 assessment.

https://www.federalregister.gov/documents/2023/04/18/2023-08117/in-the-matter-of-darus-zehrbach-32-jefferson-street-westover-wv-26501-order-denying-export

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April 18, 2023: 88 Fed. Reg. 23622: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Damian Espinoza-Gonzalez for ten years until April 6, 2031. On April 5, 2021, Espinoza-Gonzalez was convicted of conspiracy and of unlawfully smuggling, and attempting to smuggle, firearms and ammunition from the United States to Mexico. As a result of his conviction, the Court sentenced Espinoza-Gonzalez to time served, 36 months of supervised release, a $200 special assessment, and a $1,500 criminal fine.

https://www.federalregister.gov/documents/2023/04/18/2023-08126/in-the-matter-of-damian-espinoza-gonzalez-6707-south-caballo-road-tucson-az-85701-order-denying

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April 18, 2023: 88 Fed. Reg. 23623: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Katie Ellen O’Brien for ten years until January 17, 2029. On January 17, 2019, O’Brien was convicted of making false statements or misrepresentations to the U.S. Government during the course of an investigation and smuggling and attempting to smuggle firearms from the United States to Mexico. As a result of her conviction, the Court sentenced O’Brien to 60 months confinement with credit for time served, three years supervised release, and a $600 special assessment.

https://www.federalregister.gov/documents/2023/04/18/2023-08124/in-the-matter-of-katie-ellen-obrien-2777-north-santa-marta-place-tucson-az-85715-order-denying

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April 18, 2023: The Justice Department announced that it has secured a settlement agreement with General Motors (GM) to resolve the department’s determination that GM discriminated against non-U.S. citizens in violation of the Immigration and Nationality Act (INA). The department also announced the release of a new Fact Sheet to help employers avoid citizenship status discrimination when complying with export control laws, which govern U.S. companies’ ability to export certain goods and software, technology and technical data. The department’s investigation of GM revealed that the company’s violations stemmed in part from its failure to properly consider the INA’s nondiscrimination requirements when also complying with export control laws.

The department’s investigation determined that until at least September 2021, GM’s export compliance assessments unnecessarily required lawful permanent residents to provide an unexpired foreign passport as a condition of employment, imposing a discriminatory barrier on them in the hiring process. From at least July 2019 until May 2021, GM improperly combined its process for verifying workers’ permission to work in the United States with its export compliance assessment, which resulted in GM unnecessarily requiring that newly hired non-U.S. citizens provide specific and unnecessary documents to prove their permission to work.

Under the terms of the agreement, GM will pay $365,000 in civil penalties to the United States. The agreement also requires GM to train its personnel on the INA’s requirements, revise its employment policies and be subject to departmental monitoring and reporting requirements. Specifically, GM must separate its process to verify permission to work in the United States from its export compliance assessment process, and stop requiring lawful permanent residents to present foreign passports as a condition of employment.

A copy of the Fact Sheet can be found at the following link:

https://www.justice.gov/crt/page/file/1579981/download and https://www.justice.gov/opa/pr/justice-department-secures-agreement-general-motors-and-announces-new-resource-help-employers

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April 18, 2023: Two international business organizations pleaded guilty and were sentenced in the United States District Court for the District of Columbia for their participation in a criminal conspiracy to violate U.S. export laws and sanctions by sending U.S.-origin goods to Iran. Taiwan business organization DES International Co. Ltd. (DES), and Brunei business organization Soltech Industry Co. Ltd. (Soltech) each pleaded guilty to conspiring to defraud the United States and to violate the International Emergency Economic Powers Act and the Iranian Transactions and Sanctions Regulations. The two companies were each sentenced to pay a fine of $83,769, which is three times the value of the goods unlawfully exported to Iran, and to serve a five-year term of corporate probation.

https://www.justice.gov/opa/pr/international-business-organizations-convicted-criminal-conspiracy-violate-iranian-sanctions

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April 18, 2023: A nine-count indictment was unsealed in the Eastern District of New York charging Nazem Ahmad and eight co-defendants with conspiring to defraud the United States and foreign governments, evade U.S. sanctions and customs laws and conduct money laundering transactions by securing goods and services for the benefit of Ahmad, a Lebanese resident and dual Belgian-Lebanese citizen who was sanctioned by the United States for being a financier for Hezbollah, a foreign terrorist organization. According to court documents, despite being sanctioned and prohibited from engaging in transactions with U.S. persons since December 2019, Ahmad and his co-conspirators relied on a complex web of business entities to obtain valuable artwork from U.S. artists and art galleries and to secure U.S.-based diamond-grading services all while hiding Ahmad’s involvement in and benefit from these activities. Approximately $160 million worth of artwork and diamond-grading services were transacted through the U.S. financial system. One defendant was arrested in the United Kingdom at the request of the United States, and the eight remaining defendants, including Ahmad, are believed to reside outside the United States and remain at large. The government obtained seizure warrants for millions of dollars in assets that include a diamond ring, cash in an account and artwork.

https://www.justice.gov/opa/pr/ofac-designated-hezbollah-financier-and-eight-associates-charged-multiple-crimes-arising-out

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April 19, 2023: The Department of Commerce’s Bureau of Industry and Security (BIS) imposed a $300 million civil penalty against Seagate Technology LLC of Fremont, California (Seagate US) and Seagate Singapore International Headquarters Pte. Ltd., of Singapore (Seagate Singapore) (collectively, Seagate) to resolve alleged violations of U.S. export controls related to selling hard disk drives (HDDs) to Huawei Technologies Co. Ltd. (Huawei) in violation of the foreign direct product (FDP) rule. This historic foreign direct product enforcement case and settlement represents the largest standalone administrative penalty in BIS history. This resolution also includes a multi-year audit requirement and a five-year suspended Denial Order.

In August 2020, BIS imposed controls over certain foreign-produced items related to Huawei, as further described below. Despite this, in September 2020, Seagate announced it would continue to do business with Huawei. Seagate did so despite the fact that its only two competitors had stopped selling HDDs to Huawei, resulting in Seagate becoming Huawei’s sole source provider of HDDs. Subsequently, Seagate entered into a three-year Strategic Cooperation Agreement with Huawei, naming Seagate as “Huawei’s strategic supplier” and granting the company “priority basis over other Huawei suppliers.” As alleged in the Proposed Charging Letter, BIS’ investigation determined that Seagate engaged in conduct prohibited by the Export Administration Regulations (EAR) by ordering or causing the reexport, export from abroad, or transfer (in-country) of more than 7.4 million HDDs subject to the Huawei FDP rule without BIS authorization.

As described and alleged in greater detail in the Proposed Charging Letter (PCL), between approximately August 17, 2020, and September 29, 2021, Seagate US and Seagate Singapore, working with other Seagate entities, engaged in conduct prohibited by the EAR on 429 occasions. As alleged in the PCL, Seagate ordered or caused the reexport, export from abroad, or transfer (in-country) of approximately 7,420,496 foreign-produced HDDs, valued at approximately $1,104,732,205, to Huawei entities listed on the BIS Entity List or where such entities were a party to a transaction without authorization from BIS. The two other companies capable of making HDDs promptly—and publicly—indicated that they had ceased sales to Huawei. Of the three, only Seagate refused to stop sales and transactions involving Huawei. BIS’s $300 million monetary penalty is more than twice what BIS estimates to be the company’s net profits for the alleged illegal exports to or involving Huawei. As the transactions progressed, Seagate US repeatedly authorized extending lines of credit to Huawei totaling more than $1 billion dollars between January and September 2021 resulting in an increasing volume of HDD exports to Huawei that the entity was otherwise unable to obtain. In March 2021, Seagate and Huawei even entered into a Long-Term Agreement involving a purchase agreement of over 5 million HDDs and naming Seagate a “key strategic supplier.” All the while, Seagate’s competitors declined similar exports.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3264-2023-04-19-bis-press-release-seagate-settlement/file and https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1497-e2836/file

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April 20, 2023: Rana Zeeshan Tanveer, 42, of Beckley, West Virginia, pleaded guilty to the federal felony offense of committing an export fraud violation. According to court documents and statements made in court, Tanveer admitted in the plea agreement to knowingly submitting false export valuations for certain items that Tanveer shipped to Pakistan. Specifically, in June 2017, Tanveer purchased two high technology items, paying more than $4,000 for both items. Prior to shipping, Tanveer created and used a false invoice that intentionally understated the value of the items as less than $200. After undervaluing the items on the invoice, Tanveer then shipped the items to Pakistan using a freight forwarding service. From 2014 to 2018, Tanveer intentionally used false invoices that deliberately undervalued the purchase cost of other U.S. origin technology items that Tanveer exported to Pakistan. Tanveer is scheduled to be sentenced on Aug. 4 and faces a maximum penalty of five years in prison, three years of supervised release, and a $250,000 fine.

https://www.justice.gov/opa/pr/west-virginia-man-pleads-guilty-export-fraud-violation

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April 20, 2023: The Justice Department announced that it has secured a settlement agreement with Micron Technology Inc. (Micron), a manufacturer of semiconductor memory and storage products based in Boise, Idaho. The settlement resolves the department’s determination that Micron violated the Immigration and Nationality Act (INA) by discriminating against a U.S. citizen when it failed to hire him for a position and instead hired a temporary visa worker. The department’s investigation began when a U.S. citizen worker complained that Micron unfairly denied him employment because of his citizenship status. The department determined that Micron unlawfully preferred a temporary visa worker for the position, failing to meaningfully consider the U.S. citizen’s qualifications. Under the INA, employers cannot discriminate based on citizenship, immigration status or national origin at any stage of the hiring process, unless required or allowed by law.

https://www.justice.gov/opa/pr/justice-department-secures-agreement-micron-technology-resolve-claim-immigration-related

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April 21, 2023: Tse Ernst Bangarie, age 47, of Hyattsville, Maryland, and co-defendant Edith Ngang, age 57, of St. Louis Park, Minnesota, were sentenced to 46 months in federal prison each, followed by two years of supervised release, for conspiracy, and for illegally exporting firearms and ammunition from the United States to Nigeria without obtaining the required licenses from the U.S. State Department. According to court documents, the purpose of the conspiracy was to assist separatists fighting against the government of Cameroon. Bangarie was sentenced on April 18, 2023 and Ngang was sentenced on April 20, 2023.

According to their plea agreements, from at least November 2017 until July 19, 2019, Bangarie, Ngang and their co-conspirators agreed to export firearms, ammunition and other military-type items in violation of the federal smuggling statute, the Arms Export Control Act and other export laws. Bangarie owned and operated a freight forwarding company in Landover, Maryland and was responsible for arranging for the shipment of the firearms, ammunition and other items in at least one overseas shipping container. Bangarie also referred individuals to co-conspirator Tamufor St. Michael to cut open and then weld shut metal compressors that the conspirators used to conceal many of the firearms in the shipping containers. Bangarie participated in meetings of the conspirators, both online and in person, including in the basement of St. Michael’s residence, where the conspirators also reloaded ammunition, assembled firearms, and wrapped various items for overseas shipment.

https://www.justice.gov/usao-md/pr/two-conspirators-sentenced-almost-four-years-federal-prison-illegally-exporting-firearms

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April 24, 2023: L3 Technologies, Inc., Communication Systems West, a Utah-based manufacturer of communications equipment for military systems, has agreed to pay $21.8 million to resolve allegations that it violated the False Claims Act by knowingly submitting and causing the submission of false claims to the Department of Defense by including in contract proposals the cost of certain parts twice.

From approximately 2008 to 2011, L3 submitted, and the Department of Defense accepted, dozens of contract proposals for a handheld receiver called the Remote Operations Video Enhanced Receiver (ROVER), and a compact transceiver called the Video Oriented Transceiver for Exchange of Information (VORTEX), which operate together to provide real-time, full-motion video and other crucial data from the battlefield. The contract proposals included the cost of low-cost common-stock items, such as nuts and bolts, twice. As a result, the United States alleged that L3 knowingly double-charged the government for these parts.

https://www.justice.gov/opa/pr/l3-technologies-settles-false-claims-act-allegations-relating-double-charging-certain-0

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April 25, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $508,612,492 settlement with British American Tobacco p.l.c. (“BAT”). BAT, a London, England-headquartered tobacco company, has agreed to settle its potential civil liability for apparent violations of the Weapons of Mass Destruction Proliferators Sanctions Regulations (WMDPSR) and the North Korea Sanctions Regulations (NKSR). The apparent violation of the WMDPSR arose from BAT’s formation of a conspiracy to remit approximately $250 million in payments from a North Korean joint venture, through bank accounts controlled by blocked North Korean banks, to BAT’s Singaporean subsidiary – in a manner that involved U.S. banks in clearing the transactions – between 2009 and 2016. The apparent violations of the NKSR arose from BAT’s Singaporean subsidiary’s use of the U.S. financial system to receive payments for its exports of tobacco to the North Korean Embassy in Singapore. This settlement amount reflects OFAC’s determination that BAT’s conduct was egregious and not voluntarily disclosed.

https://ofac.treasury.gov/recent-actions/20230425 and https://ofac.treasury.gov/media/931661/download?inline

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April 25, 2023: British American Tobacco (BAT) and its subsidiary, BAT Marketing Singapore (BATMS), one of the world’s largest manufacturers of tobacco products based in the United Kingdom, has agreed to pay combined penalties of more than $629 million to resolve bank fraud and sanctions violations charges with U.S. authorities, arising out of the companies’ scheme to do business in North Korea through a third-party company in Singapore, in violation of the bank fraud statute and the International Emergency Economic Powers Act (IEEPA). Separately, charges were unsealed in the District of Columbia against a North Korean banker and Chinese facilitators for their roles in facilitating the illicit sale of tobacco products in North Korea.

According to court documents, BATMS pleaded guilty to a criminal information filed in the District of Columbia charging BAT and BATMS with conspiracy to commit bank fraud and conspiracy to violate IEEPA. BAT entered into a deferred prosecution agreement (DPA) related to the same charges.

Specifically, in 2007, BAT spun off its North Korea sales to a third-party company, issuing a press statement that it was no longer involved in North Korea tobacco sales. In reality, BAT continued to do business in North Korea through the third-party company and BATMS maintained control over all relevant aspects of the North Korean business. Between 2007 and 2017, BAT and BATMS ran the payments for the tobacco sold to North Korean entities through the third-party company, resulting in approximately $418 million of U.S. dollar cash and correspondent banking transactions from North Korea to the third-party company in Singapore – money that was then passed on to BATMS and BAT. To make these payments, North Korean purchasers used front companies so that U.S. banks – which processed the transactions – would not know about the connection to North Korea. Pursuant to the DPA and plea agreement, BAT and BATMS will pay a total of $629 million in penalties and fines.

https://www.justice.gov/opa/pr/united-states-obtains-629-million-settlement-british-american-tobacco-resolve-illegal-sales

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April 25, 2023: A New York attorney pleaded guilty to participating in a scheme to make approximately $3.8 million in U.S. dollar payments to maintain six real properties in the United States that were owned by Viktor Vekselberg, a sanctioned oligarch.

According to court documents, Robert Wise of Pelham, New York, pleaded guilty to one count of conspiring to commit international money laundering, which carries a maximum sentence of five years in prison. Wise also agreed to forfeit more than $3.7 million and to be satisfied by a payment of $210,441. Sentencing is scheduled for Nov. 6.

According to the allegations in the information filed in Manhattan federal court and other public filings:

On April 6, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Vekselberg as a Specially Designated National (SDN) in connection with its finding that the actions of the Government of the Russian Federation in Ukraine constituted an unusual and extraordinary threat to the national security and foreign policy of the United States. On or about March 11, 2022, OFAC redesignated Vekselberg as an SDN and blocked Vekselberg’s yacht and private airplane.

Prior to his designation by OFAC, between approximately 2008 and 2017, Vekselberg, through a series of shell companies, acquired six real properties in the United States, specifically, (i) two apartments on Park Avenue in New York, New York, (ii) an estate in Southampton, New York, (iii) two apartments on Fisher Island, Florida, and (iv) a penthouse apartment also on Fisher Island, Florida (collectively, the Properties). As of the date of this information, the Properties were worth approximately $75 million.

Voronchenko, Vekselberg’s longtime associate, retained Wise, an attorney who practiced in New York, New York, to assist in the acquisition of the Properties. Wise also managed the finances of the Properties, including by paying common charges, property taxes, insurance premiums, and other fees associated with the Properties in U.S. dollar transactions from Wise’s interest on lawyer’s trust account (IOLTA account).

In particular, prior to Vekselberg’s designation as an SDN, between approximately February 2009 and March 2018, shell companies owned by Vekselberg sent approximately 90 wire transfers totaling approximately $18.5 million to the IOLTA account. At the direction of Voronchenko and his family member who lived in Russia, Wise used these funds to make various U.S. dollar payments to maintain and service the Properties.

https://www.justice.gov/opa/pr/new-york-attorney-pleads-guilty-conspiring-commit-money-laundering-promote-sanctions

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April 27, 2023: Tao Jiang, the president and owner of Broad Tech System, Inc., a California-based electronics distribution company, and his company were both sentenced in U.S. District Court in Rhode Island for concealing information from the U.S. Department of Commerce and from U.S. Customs and Border Protection as part of a scheme to illegally export chemicals manufactured and/or distributed by a Rhode Island-based company to a technology company in China with ties to the Chinese military, announced United States Attorney Zachary A. Cunha.

Mr Jiang and Broad Tech Systems pleaded guilty on January 11, 2023, to charges of conspiracy, violation of the Export Control Act, and money laundering conspiracy. Jiang was ordered by U.S. District Court Chief Judge John J. McConnell, Jr., to serve one year of federal probation, to pay a fine of $5,500, and to perform 100 hours of community service; Broad Tech Systems was placed on federal probation for one year and ordered to pay a fine of $120,000.

https://www.justice.gov/usao-ri/pr/california-based-company-company-president-sentenced-scheme-violate-export-control-act

APRIL 2023 EXPORT CONTROL REGULATIONS UPDATES Read More »

MARCH 2023 EXPORT CONTROL REGULATIONS UPDATES

This newsletter is a listing of the latest changes in export control regulations through March 31, 2023. The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

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

REGULATORY UPDATES

President

President Biden Continued The National Emergency Regarding Ukraine

March 2, 2023: 88 Fed. Reg. 13285: President Biden has continued for one year the national emergency declared in Executive Order 13660 of March 6, 2014, as expanded by Executive Order 13661 of March 16, 2014, Executive Order 13662 of March 20, 2014, and Executive Order 14065 of February 21, 2022, and relied on for additional steps taken in Executive Order 13685 of December 19, 2014, and Executive Order 13849 of September 20, 2018, with respect to Ukraine.

https://www.federalregister.gov/documents/2023/03/02/2023-04522/continuation-of-the-national-emergency-with-respect-to-ukraine

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President Biden Continued The National Emergency Regarding Venezuela

March 2, 2023: 88 Fed. Reg. 13287: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency regarding Venezuela declared in Executive Order 13692 of March 8, 2015, and relied on for additional steps taken in Executive Order 13808 of August 24, 2017, Executive Order 13827 of March 19, 2018, Executive Order 13835 of May 21, 2018, Executive Order 13850 of November 1, 2018, Executive Order 13857 of January 25, 2019, and Executive Order 13884 of August 5, 2019.

https://www.federalregister.gov/documents/2023/03/02/2023-04531/continuation-of-the-national-emergency-with-respect-to-venezuela

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President Biden Continued The National Emergency Regarding Zimbabwe

March 2, 2023: 88 Fed. Reg. 13289: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency regarding Zimbabwe declared in Executive Order 13288 of March 6, 2003, as expanded by Executive Order 13469 of July 25, 2008, and as relied on for additional steps taken in Executive Order 13391 of November 22, 2005.

https://www.federalregister.gov/documents/2023/03/02/2023-04532/continuation-of-the-national-emergency-with-respect-to-zimbabwe

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President Biden Continued The National Emergency Regarding Iran

March 13, 2023: 88 Fed. Reg. 15595: 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 with respect to Iran declared in Executive Order 12957 of March 15, 1995. On May 6, 1995, the President issued Executive Order 12959, imposing more comprehensive sanctions on Iran to further respond to this threat. On August 19, 1997, the President issued Executive Order 13059, consolidating and clarifying those previous orders. The President took additional steps pursuant to this national emergency in Executive Order 13553 of September 28, 2010; Executive Order 13574 of May 23, 2011; Executive Order 13590 of November 20, 2011; Executive Order 13599 of February 5, 2012; Executive Order 13606 of April 22, 2012; Executive Order 13608 of May 1, 2012; Executive Order 13622 of July 30, 2012; Executive Order 13628 of October 9, 2012; Executive Order 13645 of June 3, 2013; Executive Order 13716 of January 16, 2016, which revoked Executive Orders 13574, 13590, 13622, 13645, and provisions of Executive Order 13628; Executive Order 13846 of August 6, 2018, which revoked Executive Orders 13716 and 13628; Executive Order 13871 of May 8, 2019; Executive Order 13876 of June 24, 2019; Executive Order 13902 of January 10, 2020; and Executive Order 13949 of September 21, 2020. The emergency declared by Executive Order 12957 constitutes an emergency separate from that declared on November 14, 1979, by Executive Order 12170, in connection with the hostage crisis. This renewal, therefore, is distinct from the emergency renewal of November 8, 2022.

https://www.federalregister.gov/documents/2023/03/13/2023-05300/continuation-of-the-national-emergency-with-respect-to-iran

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Presidential Biden Waived Statutory Requirements Pursuant to Section 303 of the Defense Production Act of 1950, as Amended, on Department of Defense Supply Chains Resilience

Memorandum for the Secretary of Defense

March 2, 2023: 88 Fed. Reg. 13015: President Biden waived statutory requirements pursuant to Section 303 of the Defense Production Act of 1950, as amended (the “Act”) (50 U.S.C. 4533). President Biden determined, pursuant to section 303(a)(7)(B) of the Act, that action is necessary to avert shortfalls in critical Department of Defense supply chains that would severely impair national defense capability. Therefore, President Biden waived the requirements of section 303(a)(1)-(a)(6) of the Act for supply chains enumerated in the June 2021 White House report titled “Building Resilient Supply Chains, Revitalizing American Manufacturing, and Fostering Broad-Based Growth: 100-Day Reviews Under Executive Order 14017” and the February 2022 Department of Defense report titled “Securing Defense-Critical Supply Chains: An Action Plan Developed in Response to President Biden's Executive Order 14017,” specifically for defense organic industrial base supply chains critical to the Department of Defense and critical supply chains for electronics, kinetic capabilities, castings and forgings, minerals and materials, and power and energy storage. Ensuring a robust, resilient, and sustainable domestic industrial base is essential to our national security and the preservation of domestic critical infrastructure.

https://www.federalregister.gov/documents/2023/03/02/2023-04421/presidential-waiver-of-statutory-requirements-pursuant-to-section-303-of-the-defense-production-act

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President Biden Announced A National Cybersecurity Strategy

March 2, 2023: The White House has announced a National Cybersecurity Strategy. This strategy seeks to build and enhance collaboration around five pillars: (i) Defend critical infrastructure, (ii) Disrupt and dismantle threat actors, (iii) Shape market forces to drive security and resilience, (iv) Invest in a resilient future, and (v) Forge international partnerships to pursue shared goals. To realize the vision these pillars layout, the strategy calls for making two fundamental shifts in how the United States allocates roles, responsibilities, and resources in cyberspace. In realizing these shifts, the strategy aspires not just to improve U.S. defenses, but to change those underlying dynamics that currently contravene its interests.

https://www.whitehouse.gov/wp-content/uploads/2023/03/National-Cybersecurity-Strategy-2023.pdf

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President Biden Signed A Presidential Determination (PD) Authorizing The Use Of Defense Production Act (DPA) Title III Authorities To Rebuild And Expand The Nation's Domestic Hypersonics Industrial Base

March 6, 2023: 88 Fed. Reg. 13657: President Joe Biden has signed a presidential determination (PD) authorizing the use of Defense Production Act (DPA) Title III authorities to rebuild and expand the nation's domestic hypersonics industrial base. The authority specifically targets air-breathing engines, advanced avionics, guidance systems, as well as constituent materials for hypersonic systems. The Department of Defense is leveraging this authority to strategically accelerate the transition of operational prototypes and advanced manufacturing technologies across the spectrum of airbreathing engines and advanced avionics position, navigation, and timing (PNT) systems. Kinetic capabilities, including those for hypersonic systems, were one of the key focus areas in President Biden's Executive Order 14017, "America's Supply Chains." The efforts executed under these authorities will be part of a larger DoD strategy to ensure the United States preeminence in these game-changing technologies as well as a partnership with allied nations seeking similar capabilities. The PD allows the Office of Defense Production Act Investments (DPAI), part of the Manufacturing Capability Expansion and Investment Prioritization (MCEIP) office, to leverage DPA Title III purchases and purchase commitments to support the modernization and expansion of the hypersonics industrial base. Applications for funding related to the above authority may be submitted through the DPA Title III Open Funding Opportunity Announcement.

https://www.federalregister.gov/documents/2023/03/06/2023-04617/presidential-determination-pursuant-to-section-303-of-the-defense-production-act-of-1950-as-amended

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President Biden Signed Executive Order Regarding Operational Use Of Commercial Spyware

March 27, 2023: President Biden signed Executive Order that the United States Government shall not make operational use of commercial spyware that poses significant counterintelligence or security risks to the United States Government or significant risks of improper use by a foreign government or foreign person. In furtherance of the national security and foreign policy interests of the United States, this order accordingly directs steps to implement that policy and protect the safety and security of United States Government institutions, personnel, information, and information systems; discourage the improper use of commercial spyware; and encourage the development and implementation of responsible norms regarding the use of commercial spyware that are consistent with respect for the rule of law, human rights, and democratic norms and values. The actions directed in this order are consistent with the policy objectives set forth in section 6318 of the James M. Inhofe National Defense Authorization Act for Fiscal Year 2023 (NDAA FY 2023) (Public Law 117-263) and section 5502 of the National Defense Authorization Act for Fiscal Year 2022 (NDAA FY 2022) (Public Law 117-81).

https://www.whitehouse.gov/briefing-room/presidential-actions/2023/03/27/executive-order-on-prohibition-on-use-by-the-united-states-government-of-commercial-spyware-that-poses-risks-to-national-security/

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President Biden Pursuant To Section 303 Of The Defense Production Act Of 1950 Determined Printed Circuit Boards and Advanced Packaging Are Essential To National Defense

March 27, 2023: President Biden pursuant to Section 303 of the Defense Production Act of 1950, as amended (the “Act”) (50 U.S.C. 4533), determined that printed circuit boards and advanced packaging, their components, and the manufacturing systems that produce such systems and components are industrial resources, materials, or critical technology items essential to national defense; without Presidential action under section 303 of the Act, United States industry cannot reasonably be expected to provide the capability for the needed industrial resource, material, or critical technology item in a timely manner; and purchases, purchase commitments, or other action pursuant to section 303 of the Act are the most cost-effective, expedient, and practical alternative method for meeting the need. Action to expand the domestic production capability for printed circuit boards and advanced packaging is necessary to avert an industrial resource or critical technology item shortfall that would severely impair national defense capability.

https://www.whitehouse.gov/briefing-room/presidential-actions/2023/03/27/memorandum-on-presidential-determination-pursuant-to-section-303-of-the-defense-production-act-of-1950-as-amended-on-printed-circuit-boards-and-advanced-packaging-production-capability/

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President Biden Continues The Export Controls and Human Rights Initiative

March 30, 2023: President Biden and the United States continues to put human rights at the center of U.S. foreign policy. The Export Controls and Human Rights Initiative – launched at the first Summit for Democracy as part of the Presidential Initiative for Democratic Renewal – is a multilateral effort intended to counter state and non-state actors’ misuse of goods and technology that violate human rights. During the Year of Action following the first Summit, the United States led an effort to establish a voluntary, nonbinding written code of conduct outlining political commitments by Subscribing States to apply export control tools to prevent the proliferation of goods, software, and technologies that enable serious human rights abuses. Written with the input of partner countries, the Code of Conduct complements existing multilateral commitments and will contribute to regional and international security and stability.

In addition to the United States, the governments that have endorsed the voluntary Code of Conduct are: Albania, Australia, Bulgaria, Canada, Croatia, Czechia, Denmark, Ecuador, Estonia, Finland, France, Germany, Japan, Kosovo, Latvia, The Netherlands, New Zealand, North Macedonia, Norway, Republic of Korea, Slovakia, Spain, and the United Kingdom. The Code of Conduct is open for all Summit for Democracy participants to join.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3257-2023-03-30-bis-press-release-echri-code-of-conduct/file

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U.S. Congress

The U.S. House Of Representatives Passed House Bill H.R. 1093 That Requires The Department Of State To Report To Congress On State Department Efforts To Implement The Advanced Capabilities Pillar Of The Trilateral Security Partnership Between Australia, The United Kingdom (UK), And The United States (AUKUS)

March 22, 2023: The U.S. House of Representatives passed House bill H.R. 1093, that requires the Department of State to report to Congress on State Department efforts to implement the advanced capabilities pillar of the trilateral security partnership between Australia, the United Kingdom (UK), and the United States. (One of the goals of the partnership is to develop and provide joint advanced military capabilities, such as artificial intelligence, hypersonics, and electronic warfare.)

The report must include (1) the average and median times for the U.S. government to review applications for export licenses for defense articles or services to the governments and persons (entities and individuals) of Australia or the UK, (2) information about certain violations of the International Traffic in Arms Regulations by the governments or persons of Australia or the UK, and (3) recommended changes to the export control laws and regulations of the three partnership countries to implement the partnership.

https://www.congress.gov/bill/118th-congress/house-bill/1093?q=%7B%22search%22%3A%22hr1093%22%7D

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Department of State

DDTC Name And Address Changes Posted To Website

March 1 through 31, 2023: 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 S.C. Harris Assured Communications S.R.L. to L3Harris Assured Communications Romania S.R.L. due to corporate restructuring;
Change in Name from TAE Aviation Pty Ltd. to TAE Aerospace Pty Ltd. due to merger;
Change in Name from AeroTech Pro to Sabena technics ATP due to acquisition;
Change in Names from Herley Industries Inc. and Herley-CTI Inc. to Herley Industries LLC and Herley-CTI LLC due to a reincorporation after sale to CAES Systems Holdings LLC.

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The U.S. Department Of State Updates The DS-6004, DS-4294, and DSP-85 Forms To Include A Block For Voluntary Disclosure Numbers

March 2, 2023: The U.S. Department of State’s IT Modernization Team updated the DS-6004 (Block 10), DS-4294 (Block 11), and DSP-85 (Block 9) forms in the DECCS Licensing application by adding new voluntary disclosure field questions. This update will allow industry to report a disclosure previously filed with the Office of Defense Trade Controls Compliance (DTCC) when submitting one of the listed licenses. If you have any questions on the new field updates, please submit a support ticket on DECCS Self-Service.

Due to the update referenced above, the U.S. Department of State recommend that all users of DECS clear their cache to ensure that they can view the latest updates.

Reference this FAQ for how to clear your cache:

https://www.pmddtc.state.gov/)?id=ddtc_public_portal_faq_detail&sys_id=d7f093331b2624502dc36311f54bcbd7

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

See our July 2022 newsletter for more details on the Open General Licenses

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The Department Of State, Directorate Of Defense Trade Controls (DDTC) Extends Validity Period Of Open General Licenses By Three Years

March 27, 2023: On July 13, 2022, the Department of State, Directorate of Defense Trade Controls (DDTC) issued two open general licenses as part of a pilot program pursuant to the International Traffic in Arms Regulations (ITAR), 22 C.F.R. parts 120-130, § 120.22(b). These open general licenses were originally published with a validity period of one year, effective August 1, 2022, through July 31, 2023.

DDTC has now updated both open general licenses to extend their validity period by three years and update citations for certain referenced ITAR sections that have since moved. Extending the validity period of the open general licenses by three years was necessary in order to allow DDTC to collect sufficient data to consider the usefulness of the Open General License pilot program and to provide industry with sufficient certainty to be able to rely on the open general licenses without fear that they could expire more quickly than a traditional license.

DDTC has also made other non-substantive edits to both open general licenses to clarify that multiple defense articles need not be reexported or retransferred simultaneously and that the open general licenses can be used to reexport or retransfer a single defense article.

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

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U.S. Department of Defense

The U.S. Department Of Defense Is Proposing To Amend The DFARS To Enable The Defense Contract Management Agency To Obtain Export Authorizations From Certain Contractors

March 22, 2023: 88 Fed. Reg. 17357: The U.S. Department of Defense (DoD) is proposing to amend the DFARS to enable the Defense Contract Management Agency (DCMA) to obtain export authorizations from certain contractors. Specifically, when a contract requires government quality assurance surveillance oversight and has delivery to, or production or performance in, government quality assurance countries, DoD proposes to require the contractor to provide relevant export authorizations ( i.e., export license exemptions, export license exceptions, export licenses, or other approvals) to the cognizant DCMA administrative contracting officer along with contact information for the empowered official or the export point of contact. Government quality assurance countries include the following countries: Australia, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Israel, Italy, Republic of Korea, Netherlands, Norway, Poland, Romania, Slovakia, Spain, Sweden, Turkey, and the United Kingdom.

DCMA has found that a significant amount of time is required to determine whether or not a contractor's export license allows for foreign auditors to perform required quality assurance functions in lieu of DCMA. Currently, DCMA is not able to review the export authorization unless their personnel travel to the contractor's worksite. If DCMA is able to receive and review an export authorization from the contractor to determine whether or not they can delegate the work to foreign auditors, this problem would be resolved.

https://www.federalregister.gov/documents/2023/03/22/2023-05676/defense-federal-acquisition-regulation-supplement-export-controlled-items-dfars-case-2018-d053

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DSCA Notifies Congress Of Potential FMS Sale To Taiwan

March 1, 2023: The U.S. Department of Defense's Defense Security Cooperation Agency (DCSA) has notified Congress that the Taipei Economic and Cultural Representative Office in the United States (TECRO) has requested to buy one hundred (100) AGM-88B High-Speed Anti-Radiation Missiles (HARM); twenty-three (23) HARM training missiles; two hundred (200) AIM-120C-8 Advanced Medium Range Air-to-Air Missiles (AMRAAM); four (4) AIM-120C-8 AMRAAM Guidance Sections; and twenty-six (26) LAU-129 multi-purpose launchers. Also included are LAU-118A missile launchers with Aircraft Launcher Interface Computer (ALIC); HARM missile containers; AIM-120 control sections and containers; AIM-120C Captive Air Training Missiles (CATM); dummy air training missiles (DATM), integration and test support and equipment; munitions support and support equipment; spare parts, consumables and accessories and repair and return support; classified software; maintenance and maintenance support; classified publications and technical documentation; U.S. Government and contractor engineering, technical and logistics support services, studies and surveys; and other related elements of logistical and program support. The estimated total cost is $619 million. The principal contractors will be Raytheon Missiles and Defense, Tucson, AZ; and Lockheed Martin Corporation, Bethesda, MD. The purchaser typically requests offsets. Any offset agreement would be defined in negotiations between the purchaser and the contractor(s).

https://www.dsca.mil/press-media/major-arms-sales/taipei-economic-and-cultural-representative-office-united-states-f-16

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DSCA Notifies Congress Of Potential FMS Sale To Australia

March 7, 2023: The Government of Australia has requested to buy up to two hundred fifty-five (255) Javelin FGM-148F missiles (includes five (5) fly-to-buy missiles). Also included are U.S. technical assistance, consisting of Tactical Air Ground Missiles (TAGM) Project Office technical assistance and other related elements of logistical and program support. The estimated total cost is $60.18 million. The prime U.S. contractor will be the Javelin Joint Venture between Lockheed Martin in Orlando, FL, and Raytheon Missiles and Defense in Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/australia-javelin-fgm-148f-missiles
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DSCA Notifies Congress Of Potential FMS Sale To Japan

March 7, 2023: The Government of Japan has requested to buy up to five (5) E-2D Advanced Hawkeye Airborne Early Warning and Control Aircraft; twelve (12) T56-A-427A Engines (10 installed, 2 spares); six (6) Multifunction Information Distribution System Joint Tactical Radio System Terminals (5 installed, 1 spare); five (5) APY-9 Radars (installed); five (5) AN/AYK-27 Integrated Navigation Control and Display Systems (installed); twelve (12) LN-251 Embedded Global Positioning Systems/Inertial Navigation Systems with Embedded Airborne Selective Availability Anti-Spoofing Module or M-Code Receiver (10 installed, 2 spares); and six (6) ALQ-217 Electronic Support Measures Systems (5 installed and 1 spare). Also included are aircraft ancillary equipment; modifications; spare and repair parts; support equipment; publications and technical documentation; software; personal protective equipment; personnel training and training equipment; ferry services; U.S. Government and contractor logistics, engineering, and technical support services; and other related elements of logistics and program support. The estimated total program cost is $1.381 billion. The principal contractor will be Northrop Grumman Corporation Aerospace Systems, Melbourne, FL. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/japan-e-2d-advanced-hawkeye-ahe-airborne-early-warning-and-control

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DSCA Notifies Congress Of Potential FMS Sale To Australia

March 16, 2023: The Government of Australia has requested to buy up to two hundred (200) Tomahawk Block V All Up Rounds (AUR) (RGM-109E); and up to twenty (20) Tomahawk Block IV All Up Rounds (AUR) (RGM-109E). Also included is support for all three segments of Australia’s Tomahawk Weapon System (TWS) including the All Up Round (AUR), the Tactical Tomahawk Weapon Control System (TTWCS), and the Theater Mission Planning Center (TMPC). The support consists of unscheduled missile maintenance; spares; procurement; training; in-service support; software; hardware; communication equipment; operational flight test; engineering and technical expertise to maintain the TWS capability; and other related elements of logistical and program support. The estimated total cost is $895 million. The prime U.S. contractor will be Raytheon Missiles and Defense, Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/australia-tomahawk-weapon-system

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DSCA Notifies Congress Of Potential FMS Sale To Poland

March 16, 2023: The Republic of Poland has requested to buy eight hundred (800) AGM-114R2 Hellfire missiles; and four (4) M36 Hellfire Captive Air Training Missiles (CATM). Also included is Tactical Aviation Ground Munition Program Office technical assistance; Security Assistance Management Directorate technical assistance; Joint Attack Munition Systems technical assistance; Classified and Unclassified publications; spare parts; repair and return; storage; and other related elements of logistics and program support. The total estimated cost is $150 million. The principal contractor will be Lockheed Martin Corporation, Orlando, FL. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/poland-hellfire-missiles

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DSCA Notifies Congress Of Potential FMS Sale To Greece

March 17, 2023: The Government of Greece has requested to buy sixty-three (63) Assault Amphibious Vehicles, Personnel Variant (AAVP-7A1), nine (9) Assault Amphibious Vehicles, Command Variant (AAVC-7A1), four (4) Assault Amphibious Vehicles, Recovery Variant (AAVR-7A1), and sixty-three (63) 50-Caliber Machine Guns (Heavy Barrel). Also included are MK-19 Grenade Launchers, M36E T1 Thermal Sighting Systems (TSS), supply support (spare parts), support equipment (including special mission kits/tools/Enhanced Applique Kits (EAAK)), training, technical manuals (unclassified), technical data, U.S. Government and contractor engineering, technical support and assistance (including Contractor Engineering Technical Services (CETS)), Integrated Logistic Support (ILS) management services, parts obsolescence remediation, calibration services, transportation, Follow-on Support (FOS), Return, Repair and Reshipment of unserviceable repairable. There is not a principal contractor associated with this potential sale. Consequently, there are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/greece-assault-amphibious-vehicles-aavs

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DSCA Notifies Congress Of Potential FMS Sale To Bahrain

March 29, 2023: The Government of Bahrain has requested to buy equipment and services to refurbish twenty-four (24) Excess Defense Article (EDA) AH-1W multi-role helicopters. Included are services to refurbish a full-motion Aircraft Procedures Trainer (APT), M272A1 missile launchers and spare T-700-GE-401 aircraft engines, spare parts, support, training, publications, and other related elements of logistics and program support. The estimated total cost is $350 million. The principal contractor will be Bell Corporation, Fort Worth, TX. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/bahrain-ah-1w-helicopter-refurbishment

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DSCA Notifies Congress Of Potential FMS Sale To Kuwait

March 29, 2023: The Government of Kuwait has requested to buy additional Cartridge Actuated Device/Propellant Actuated Devices (CAD/PAD) and support that will be added to a previously implemented case that was under the Congressional notification threshold. The original FMS case, valued at $48.2 million, included CAD/PAD items and support for Calendar Years 2025-2026 (CY25-CY26). This notification is for CAD/PAD items and support of Kuwait’s F/A-18 and KC-130/J aircraft fleet. Also included is engineering, technical, and program support and other related elements of logistics and program support. The total estimated cost is $59.1 million. The principal contractors are currently unknown, as there will be competitive contract solicitations after FMS case implementation. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/press-media/major-arms-sales/kuwait-cartridge-actuated-devicepropellant-actuated-devices-cadpad-and

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

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS), the U.S. Department of Justice (DOJ), and the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC)

March 2, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS), the U.S. Department of Justice (DOJ), and the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), issued a Tri-Seal Compliance Note: Cracking Down on Third-Party Intermediaries Used to Evade Russia-Related Sanctions and Export Controls to alert the international community, the private sector, and the public to attempts by malign actors to continue to try to evade sanctions and export controls to support Russia’s military-industrial complex in support of Russia’s illegal and unprovoked war against Ukraine. The Compliance Note details how Russia uses third-party intermediaries and transshipment points to circumvent restrictions and obscure the true identities of Russian end users. The Compliance Note provides common red flags that can indicate a third-party intermediary may be engaged in efforts to evade sanctions or export controls.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230302_33 and https://home.treasury.gov/system/files/126/20230302_compliance_note.pdf

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The Department of Commerce, Bureau of Industry and Security (BIS) and U.S. Customs & Border Protection

New BIS License Types C65 – (TGL) Temporary General License and C66 – (SCAL) Supply Chain Authorization Letter

March 15, 2023: The Department of Commerce, Bureau of Industry and Security (BIS) and U.S. Customs & Border Protection, created two new License Types for the Automated Export System.

New License Code C65 (TGL):

An update has been made to AES to create new License Codes C65 “Temporary General License” (TGL), which authorizes certain exports, reexports, in-country transfers, and exports from abroad destined to or within China or Macau by companies not headquartered in Country Groups D:1 or D:5 or E (see supplement no. 1 to part 740 of the EAR) to continue or engage in integration, assembly (mounting), inspection, testing, quality assurance, and distribution of items covered by ECCN 3A090, 4A090, and associated software and technology in ECCN 3D001, 3E001, 4D090, or 4E001; or any item that is a computer, integrated circuit, “electronic assembly” or “component” and associated software and technology, specified elsewhere on Commerce Control List (supplement no. 1 to part 774), which meets or exceeds the performance parameters of ECCN 3A090 or 4A090. The full terms of this Temporary General License are described in General Order No. 4 of in paragraph (d) in supplement no. 1 to part 736 of the EAR.

AES filers must adhere to the following new reporting when using C65 (TGL) to prevent the return of fatal errors from AES.

Report License Code: C65 Temporary General License (TGL)
Allowable ECCNs: 3A090, 4A090, 3D001, 3E001, 4D090, 4E001, or any item that is a computer, integrated circuit, “electronic assembly” or “component” and associated software and technology, specified elsewhere on Commerce Control List (supplement no. 1 to part 774), which meets or exceeds the performance parameters of ECCN 3A090 or 4A090.
Allowable Export Information Codes: All except UG
Allowable Modes of Transportation: All except ‘70’ (Fixed Transport)

Please refer to “General Order No. 4” in paragraph (d) in supplement no. 1 to part 736 of the EAR for additional requirements for this Temporary General License. This does not authorize the export, reexport, in-country transfer, or export from abroad to “end-users” or “ultimate consignees” in China or Macau. This Temporary General License does not overcome the license requirements of §§ 744.11 or 744.21 when an entity listed in supplements no. 4 or 7 to part 744 is a party to the transaction as described in § 748.5(c) through (f) of the EAR, or when there is knowledge of any other prohibited end use or end user. This Temporary General License is only for companies that engage in the specific activities authorized under this Temporary General License. This Temporary General License and its associated License Code (TGL) are valid for use through April 7, 2023.

New License Code C66 (SCAL):

An update has been made to AES to create License Type Code C66 “Supply Chain Authorization Letter” (SCAL). The BIS Deputy Assistant Secretary for Export Administration issued a number of such letters in response to specific requests based on exigent circumstances of actual or potential supply chain disruptions. Recipients of Supply Chain Authorization Letters must comply with the specific terms issued by BIS in such letters. A Supply Chain Authorization Letter is only valid for use by the original recipient of the letter or by parties authorized therein.

AES filers must adhere to the following new reporting when using C66 (SCAL) to prevent the return of fatal errors from AES. Supply Chain Authorization Letter

Report License Code: C66 Supply Chain Authorization Letter (SCAL)
Allowable ECCNs: All, including EAR99.
Allowable Export Information Codes: All except UG
Allowable Modes of Transportation: All except ‘70’ (Fixed Transport)

https://content.govdelivery.com/bulletins/gd/USDHSCBP-34ee05e?wgt_ref=USDHSCBP_WIDGET_2#:~:text=An%20update%20has%20been%20made,or%20E%20(see%20supplement%20no.

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U.S. Census Bureau

New AESDirect Navigation in Modernized ACE Portal

March 29, 2023: Census launched the AESDirect User Interface (UI) in the Modernized ACE portal to the Account level. In response to some changes in the Modernized ACE portal, ACE filers are now required to launch the AESDirect UI from the Account menu by selecting “Submit AES Filing”. Below are the steps of the required navigation to launch the AESDirect UI moving forward:

Step 1 – Sign in to the Modernized ACE portal at: https://ace.cbp.gov/;

Step 2 – Launch ‘Exporter’ under the ‘Accounts’ drop-down menu;

Step 3 – Select the appropriate Exporter Account to use by clicking the hyperlink for the account under the ‘Account Name’ column; and

Step 4 – Click “Submit AES Filing” on the right side of the screen to launch the AESDirect UI.

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)

March 2, 2023: 88 Fed. Reg. 13673: The Bureau of Industry and Security amended the Export Administration Regulations (EAR) by adding 37 entities under 38 entries to the Entity List. These entities are listed under the destinations of Belarus (1), Burma (3), the People's Republic of China (China) (28), Pakistan (4), Russia (1), and Taiwan (1). Some entities are added under multiple entries, accounting for the difference in the totals. This final rule also modified ten existing entries on the Entity List under the destination of China. For the reasons described above, this final rule adds the following 37 entities under 38 entries to the Entity List and includes, where appropriate, aliases:

Belarus:

DMT Trading LLC.

Burma:

FISCA Security & Communication Co., Ltd.;
Ministry of Transport and Communications; and
Naung Yoe Technologies Co., Ltd.

China:

4Paradigm Technology Co., Ltd.;
AIF Global Logistics Co., Ltd.;
Aispeed Industry Ltd.;
Arttronix International (HK) Ltd.;
Baoding Giant Import and Export Co., Ltd.;
Baoding Shimaotong Enterprises Services Co., Ltd.;
Beijing Zhengyuan Chuangshi Consulting Co., Ltd.;
BGI Research;
BGI Tech Solutions (Hongkong) Co., Ltd.;
Forensic Genomics International;
Galaxy Electronics;
Gaobeidian Kaituo Precise Instrument Co., Ltd.;
Hongtai Electric Ltd.;
Inspur Group Co., Ltd.;
Jotrin Electronics Ltd.;
Korchina Logistics (HK) Ltd.;
Liang Ping Huang;
Loongson Technology;
Luo Dingwen;
Nanjing colpak Mechanical Equipment Co., Ltd.;
Nanjing Jiuding Refrigeration & Air-conditioning Equipment Co., Ltd.;
National Research Center for Parallel Computer Engineering and Technology;
Qingdao National Laboratory of Marine Science and Technology;
Rayscience Optoelectronics Innovation Co., Ltd.;
Sunton Tech Hong Kong Ltd.;
Suzhou Centec Communications Co., Ltd.;
Suzhou Centec Technology Co., Ltd.; and
Wuxi Institute of Advanced Technology.

Pakistan:

Abdul Razaq Asim;
Add-On Technology;
Dynamic Engineers; and
Nanjing Jiuding Refrigeration & Air-conditioning Equipment Co., Ltd.

Russia

DMT Electronics.

Taiwan

Neotec Semiconductor Ltd.

https://www.federalregister.gov/documents/2023/03/06/2023-04558/additions-and-revisions-of-entities-to-the-entity-list

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March 24, 2023: 88 Fed. Reg. 17706: The Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) by adding 32 persons to the Unverified List (UVL). Of the 32 persons being added, one is under each of the following destinations: Bulgaria, Canada, Indonesia, Israel, Malaysia, Saudi Arabia, and Singapore; 14 are under the destination of China, two are under the destination of Germany, four are under the destination of Turkey, and five under the destination of the United Arab Emirates (UAE).

Supplement no. 6 to part 744 is amended:

Bulgaria:

Vera Yordanova.

Canada:

Skymount Drones.

China:

Airpart Consolidated Trading;
ECOM International (HK) Co., Ltd.;
Guangzhou Trusme Electronics Technology Co., Ltd.;
HK P&W Industry Co. Ltd. (HKPW);
Jet-Prop International Forwarding (HK) Ltd.;
Kesina Services;
Lightstar Technology Ltd.;
Shandong Yuehaitongxin Keji Ltd.;
Shengwei Technology Co., Ltd.;
Small Leopard Electronics Co., Ltd.;
Solar Way (Hong Kong) Ltd.;
Sunway Technology Electronics Ltd.;
USETA Tech (HK) Ltd.; and
Winners Global Trading Co.

Germany:

In Time Forwarding & Courier e.K; and
One Light GMBH.

Indonesia:

PT Smart Cakrawala Aviation.

Israel:

CNG Labs.

Malaysia:

Golden Gamp Sdn Bhd.

Saudi Arabia:

Al Gihaz Co., Ltd. for Contracting and Trading.

Singapore:

Smart Cakrawala Aviation.

Turkey:

BLC Havacilik Saglik Medikal Insaat Elektrik Ic ve Dis Ticaret;
Odak Kimya; Piro Deniz Motorlari; and
Üçüzler Lojistik Gida Tekstil.

United Arab Emirates:

Al Kabiru Trading LLC;
BNS Hardware;
Delma Industrial Supply & Marine Services;
Diamond River General Trading; and
Masoud Afghan General Trading.

https://www.federalregister.gov/documents/2023/03/24/2023-06171/revisions-to-the-unverified-list

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March 28, 2023: 88 Fed. Reg. 18983: The Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding eleven entities to the Entity List under the destinations of Burma, the People's Republic of China (China), Nicaragua, and Russia. These eleven 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. In this rule, BIS also amends the EAR to explicitly confirm that the foreign policy interest of protecting human rights worldwide is a basis for adding entities to the Entity List.

Burma:

Miya Win International Ltd.;
Myanmar New Era Trading Company Ltd.; and
Suntac Group.

China:

Luopu Haishi Dingxin Electronic Technology Co., Ltd.;
Moyu Haishi Electronic Technology Co., Ltd.;
Pishan Haishi Yong'an Electronic Technology Co., Ltd.;
Urumqi Haishi Xin'an Electronic Technology Co., Ltd.; and
Yutian Haishi Meitian Electronic Technology Co., Ltd.

Nicaragua:

Nicaraguan National Police (NNP).

Russia:

Aviatech Supply Ltd.; and
Aviazapchast PLC.

https://www.federalregister.gov/documents/2023/03/30/2023-06663/additions-to-the-entity-list-amendment-to-confirm-basis-for-adding-certain-entities-to-the-entity

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

March 1, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned three entities and two individuals illicitly generating revenue in support of the government of the Democratic People’s Republic of Korea (DPRK).

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

Hwang, Kil Su of the Democratic Republic of the Congo and North Korea; and
Pak, Hwa Song of the Democratic Republic of the Congo and North Korea.

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

Chilsong Trading Corporation of North Korea;
Congo Aconde SARL of the Democratic Republic of the Congo; and
Korea Paekho Trading Corporation of North Korea.

https://home.treasury.gov/news/press-releases/jy1313 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230301

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March 2, 2023: The Department of the Treasury's Office of Foreign Assets Control (OFAC) has published an Alert "Notice of Fraudulent Communications Requesting Payments involving OFAC" to make the public aware of telephone, email, and letter scams involving individuals falsely claiming to represent OFAC and requesting payments. One example involves timeshare fraud schemes, where scammers have falsely claimed that OFAC has “blocked” payments of taxes made by the timeshare owner.

https://home.treasury.gov/system/files/126/20230302_ofac_alert_timeshare_fraud.pdf

OFAC also issued Iran General License O "Authorizing Wind-Down and Limited Safety and Environmental Transactions Involving Certain Vessels" and two related Frequently Asked Questions (1119 and 1120).

Iran General License O: The following transactions are authorized through 12:01 a.m. Eastern daylight time, June 30, 2023, provided that any payment to a blocked person, including any blocked entity described below in this general license, must be made into a blocked account and reported to the Office of Foreign Assets Control consistent with § 501.603 of the Reporting, Procedures, and Penalties Regulations, 31 CFR part 501:

(1) All transactions prohibited by section 5 of Executive Order (E.O.) 13846 that are ordinarily incident and necessary to the wind-down of any transaction involving any vessel in which one or more entities described below in this general license, have an interest, including the vessels described in the Annex to this general license (the “blocked vessels”); and

(2) All transactions prohibited by the Iranian Transactions and Sanctions Regulations, 31 CFR part 560 (ITSR), that are ordinarily incident and necessary to any of the following activities involving the blocked vessels or entities described below in this general license:

(i) The safe docking and anchoring of any of the blocked vessels in port;

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

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

The authorizations of this general license apply to the following entities:

(1) Golden Lotus Oil Gas and Real Estate Joint Stock Company;

(2) Swedish Management CO SA;

(3) Shanghai Xuanrun Shipping Company Limited;

(4) Global Marine Ship Management Co., 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:

(1) The offloading of any Iranian-origin petroleum, petroleum products, or petrochemical products;

(2) The entry into any new commercial contracts involving the blocked vessels or the entities described in above in this general license. Any transactions otherwise prohibited by section 5 of E.O. 13846 or the ITSR, including transactions involving any person blocked pursuant to section 5 of E.O. 13846 or the ITSR other than the blocked entities described above unless separately authorized.

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

Question 1119: Does General License (GL) O authorize all wind-down transactions for any vessel that was blocked on March 2, 2023? What if the vessel contains Iranian-origin merchandise?

Answer: Iran GL O authorizes U.S. persons to wind down all transactions otherwise prohibited by section 5 of Executive Order 13846 involving any vessel blocked as part of the March 2, 2023 designation (“blocked vessels”), subject to certain conditions. This includes, among other activities, the unloading of any non-Iranian merchandise loaded on the blocked vessel as of March 2, 2023, provided there is no other sanctions nexus.

U.S. persons are separately prohibited, pursuant to the Iranian Transactions and Sanctions Regulations, 31 CFR part 560 (ITSR), from engaging in most Iran-related transactions. Accordingly, for blocked vessels containing Iranian-origin merchandise or involving persons ordinarily resident in Iran, Iran GL O provides a separate, more limited authorization under the ITSR. This narrower authorization under the ITSR allows only transactions ordinarily incident and necessary to certain limited safety and environmental situations: the safe docking and anchoring of any of the blocked vessels in port, the preservation of the health and safety of the crew, or emergency repairs or environmental mitigation or protection activities. The offloading of Iranian-origin petroleum, petroleum products, or petrochemical products, regardless of the situation, is not authorized pursuant to Iran GL O and requires a specific license from OFAC.

U.S. financial institutions may also process transactions conducted by non-U.S. persons if such transactions would be authorized for U.S. persons pursuant to Iran GL O. Iran GL O is in effect until 12:01 Eastern daylight time, June 30, 2023. Persons unable to complete authorized transactions involving the blocked vessels specified in Iran GL O before its expiration are encouraged to seek guidance from OFAC in advance of that date. As with all OFAC GLs, Iran GL O only authorizes against the authorities identified in the GL and contains certain conditions.

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1119

Question 1120: 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 Iran General License (GL) O?

Answer: No. Non-U.S. persons generally do not risk exposure to sanctions for engaging in activities or facilitating transactions for such activities that would be authorized for U.S. persons pursuant to GL O. Non-U.S. persons unable to wind down transactions in accordance with Iran GL O before 12:01 a.m. eastern daylight time, June 30, 2023, are encouraged to seek guidance from OFAC in advance of that date.

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1120

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

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

Bushehr Petrochemical Company of Iran;
Corporativo Title I, S.A. DE C.V., of Mexico;
Corporativo Ts Business Inc, S.A. DE C.V., of Mexico;
Global Marine Ship Management CO., LTD. of China;
Golden Lotus Oil Gas And Real Estate Joint Stock Company of Vietnam;
Integracion Badeva, S.A. DE C.V., of Mexico;
JM Providers Office, S.A. DE C.V., of Mexico;
Promotora Vallarta One, S.A. DE C.V. of Mexico;
Recservi, S.A. DE C.V., of Mexico;
Servicios Administrativos Fordtwoo, S.A. DE C.V., of Mexico;
Shanghai Xuanrun Shipping Company Limited, of China;
Shiraz Petrochemical Company of Iran;
Swedish Management CO SA, of the United Arab Emirates; and
TS Business Corporativo, S.A. DE C.V., of Mexico.

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

AMIAS Chemical/Products Tanker Vietnam flag; Vessel Registration Identification IMO 9342786;
Cattle Force Livestock Carrier Togo flag; Vessel Registration Identification IMO 9175901;
Dolphin LPG Tanker Sao Tome and Principe flag; Vessel Registration Identification IMO 9052331;
Forever Rich Chemical/Products Tanker Hong Kong flag; Vessel Registration Identification IMO 9203928;
Full Star Chemical/Products Tanker Hong Kong flag; Vessel Registration Identification IMO 9773301;
Gas Cathar LPG Tanker Panama flag; Vessel Registration Identification IMO 9250505;
Gladiator Tug Togo flag; Vessel Registration Identification IMO 7621011;
Golden Bridge Bulk Carrier Panama flag; Vessel Registration Identification IMO 9218301;
Golden Light 09 Bulk Carrier Vietnam flag; Vessel Registration Identification IMO 9445057;
Golden Phoenix Bulk Carrier Panama flag; Vessel Registration Identification IMO 9224790;
Hercules Offshore Tug/Supply Ship Togo flag; Vessel Registration Identification IMO 9558517;
Jamaica Crude Oil Tanker Vietnam flag; Vessel Registration Identification IMO 9230098;
Lauren LPG Tanker Tuvalu flag; Vessel Registration Identification IMO 9249685;
Liang Sheng Chemical/Products Tanker Hong Kong flag; Vessel Registration Identification IMO 9526693;
Rising Eagle Bulk Carrier St. Vincent and the Grenadines flag; Vessel Registration Identification IMO 9073672;
Rising Falcon Bulk Carrier St. Vincent and the Grenadines flag; Vessel Registration Identification IMO 9105396;
Rising Harrier Bulk Carrier St. Vincent and the Grenadines flag; Vessel Registration Identification IMO 9122291;
Xuan Ning Chemical/Products Tanker China flag; Vessel Registration Identification IMO 9349095;
Yong Xiang 29 Chemical/Products Tanker China flag; Vessel Registration Identification IMO 8744107;
Yong Xin Chemical/Products Tanker Hong Kong flag; Vessel Registration Identification IMO 9203930.

https://www.state.gov/designating-iran-sanctions-evaders/ and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230302

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March 3, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Elena Anatolievna Lenskaya, Andrei Andreevich Zadachin, and Danila Yurievich Mikheev for their involvement in serious human rights abuse against human rights defender, prominent opposition leader, author, and historian Vladimir Kara-Murza (Kara-Murza). These individuals are being 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.

Kara-Murza has been a major advocate for the adoption of Magnitsky-style sanctions authorities by the United States, Canada, the European Union, and the United Kingdom to target human rights abusers and corrupt actors in Russia. U.S. Senator John McCain (R-Ariz.) called Kara-Murza “one of the most passionate and effective advocates for passage of the Magnitsky Act.” Sergei Magnitsky, the namesake of Magnitsky sanctions, was an attorney and auditor who uncovered a large-scale tax fraud scheme by Russian officials and was then arrested and detained by Russian authorities, subjected to physical abuse and psychological pressure, and died in a pretrial detention center in Moscow.

Kara-Murza was arrested in Moscow in April 2022 for speaking out against Russia’s war of aggression against Ukraine. Since then, the Kremlin has had additional politically motivated charges brought against Kara-Murza, and he currently faces the prospect of more than 35 years in prison. Governments and human rights organizations around the world have called for Kara-Murza’s release. In January 2022, the Department of State launched the “Without Just Cause” campaign, which calls for the release of Kara-Murza and other political prisoners globally. In May 2022, Amnesty International determined Kara-Murza to be a prisoner of conscience. In November 2022, Canada designated all three individuals for systematic human rights violations in Russia against opposition leaders, including Vladimir Kara-Murza.

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

Kozlov, Ilya Pavlovich of Russia;
Lenskaya, Elena Anatolievna of Russia;
Mikheev, Danila Yurievich of Russia;
Mishchenko, Diana Igorevna of Russia;
Sviridenko, Oleg Mikhailovich of Russia; and
Zadachin, Andrei Andreevich of Russia.

https://home.treasury.gov/news/press-releases/jy1320 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230303

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March 8, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned several Iranian regime officials and entities, including two senior officials in Iran’s prison system who have been responsible for serious human rights abuses against women and girls. OFAC also took action against the top commander of the Iranian army and a high-ranking leader in the Islamic Revolutionary Guard Corps (IRGC), as well as an Iranian official who was central to the regime’s efforts to block internet access. Finally, OFAC is sanctioning three Iranian companies and their leadership for enabling the violent repression by the Iranian Law Enforcement Forces (LEF) of peaceful protestors, including many women and girls. Iran’s prisons are notorious for mistreatment, abuse, and death. Women prisoners, especially, suffer sexual violence, torture, and other cruel, inhumane, and degrading treatment.

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

Abdollahinejad, Bahram of Iran;
Amiri, Mahdi of Iran;
Asgharian, Reza of Iran;
Bakhshi, Dariush of Iran;
Chaharmahali, Ali of Iran;
Mousavi, Sayyed Abdolrahim of Iran;
Ramezanian Sani, Gholamreza of Iran; and
ShahsavarI, Habib of Iran.

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

Entebagh Gostar Sepehr Company of Iran;
Naji Pars Amin Institute of Iran; and
Naji Pas Company of Iran; of Iran.

https://home.treasury.gov/news/press-releases/jy1327 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230308

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March 9, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 39 entities constituting a significant “shadow banking” network, one of several multi-jurisdictional illicit finance systems which grant sanctioned Iranian entities, such as Persian Gulf Petrochemical Industry Commercial Co. (PGPICC) and Triliance Petrochemical Co. Ltd. (Triliance), access to the international financial system and obfuscate their trade with foreign customers. Iranian exchange houses create front companies abroad to enable trade on behalf of their Iranian clients, with foreign currency transactions maintained via internal ledgers. PGPICC is the marketing arm of sanctioned Iranian petrochemical conglomerate Persian Gulf Petrochemical Industries Company (PGPIC), which generates the equivalent of tens of billions of dollars annually for the Iranian regime.

OFAC also designated a network of five companies and one individual for supporting Iran’s unmanned aerial vehicle (UAV) procurement efforts. This People’s Republic of China-based network is responsible for the sale and shipment of thousands of aerospace components, including components that can be used for UAV applications, to the Iran Aircraft Manufacturing Industrial Company (HESA). HESA has been involved in the production of the Shahed-136 UAV model that Iran has used to attack oil tankers and has exported to Russia. HESA was designated pursuant to Executive Order (E.O.) 13382 on September 17, 2008, for being owned or controlled by Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) and for having provided support to Iran’s Islamic Revolutionary Guard Corps (IRGC).

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

Yuan, Yun Xia of China.

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

Al Kashaf Petroleum And Petrochemical Trading L.L.C. of the United Arab Emirates;
Albahr Alaahmar Energy FZE of the United Arab Emirates;
Albahr Alaahmar Offshore Refined Oil Product Trading L.L.C. of the United Arab Emirates;
Alliance Energy PVT. Limited of Pakistan;
Alshivan Line Trading FZE of the United Arab Emirates;
Bavi General Trading Co L.L.C. of the United Arab Emirates;
Bordo Plastic Materials Trading L.L.C. of the United Arab Emirates;
Dayan Global Trade Dis Ticaret Ithalat Ihracat Sanayi Ve Ticaret Limited Sirketi of Turkey;
Dragon Trading Limited of the Marshall Islands;
Fairtrade Non Edible Oil And Liquefied Natural Gas Trading L.L.C. of the United Arab Emirates;
Famin FZE of the United Arab Emirates;
Foraben Trading Limited of China;
Global Visiness PTE. LTD., of China and Singapore;
Glotreasure Company Limited of China;
Goldenix Co., Limited of China;
Greenland Oil & Gas Trading FZE of the United Arab Emirates;
Guilin Alpha Rubber & Plastics Technology CO., LTD of China;
Hangzhou Fuyang Koto Machinery CO., LTD of China;
Herstel Trading Limited of the Marshall Islands;
HK Sihai Yingtong Industry Co., Limited of China;
Hongkong Canway Co., Limited of China;
Hongkong Well International Trading Limited of China;
Horryzin International Trade Co., Limited of China;
Jin Xin Nuo Trading Limited of China;
Kambiz Nabizadeh And Partners Exchange of Iran;
Longford Trading L.L.C. of the United Arab Emirates;
Lowell Limited of China;
Marafi International Trading Co., Limited of China;
Mehr Petrochemical Company of Iran;
Melikal For Medical & Medicine Trading Co., Limited of China;
Multi Well Trading Co., Limited of China;
Naab Kimya Dis Ticaret Limited Sirketi of Turkey;
Nashville HK Limited of China;
Ningbo More Interest I/E CO., LTD. of China;
Nord Trading L.L.C. of the United Arab Emirates;
QI Group Limited of China;
Raven International Trade Limited of China;
S&C Trade PTY CO., LTD of China;
Salita Trade Limited of China;
Shams Alrabeea Chemicals Trading L.L.C. of the United Arab Emirates;
Shenzhen Caspro Technology CO., LTD of China;
Sparrow Trading FZE of the United Arab Emirates;
Unite Resources Co., Limited of China; and
Univest Limited of China.

https://home.treasury.gov/news/press-releases/jy1330 and https://home.treasury.gov/news/press-releases/jy1331 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230309

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March 15, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) made the following Balkans-related Designations and Counter Narcotics Designation to its Specially Designated Nationals (SDN) List:

Gacanin, Edin of Bosnia and Herzegovina; Dubai, United Arab Emirates; and The Netherlands;
Mehmedagic, Osman of Bosnia and Herzegovina; and
Stankovic, Dragan of Bosnia and Herzegovina.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230315

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March 21, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), in coordination with the Federal Bureau of Investigation (FBI), designated four entities and three individuals in Iran and Turkey for their involvement in the procurement of equipment, including European-origin engines of unmanned aerial vehicles (UAV) in support of Iran’s UAV and weapons programs. This procurement network operates on behalf of Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL), which oversees several firms involved in UAV and ballistic missile development.

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

Bukey, Murat of Turkey;
Mahmoudi, Asghar of Iran;
Paidar, Amanallah of Iran.

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

Defense Technology And Science Research Center of Iran;
Farazan Industrial Engineering, Inc. of Iran;
Ozone Havacilik Ve Savunma Sanayi Ticaret Anonim Sirketi of Turkey; and
Selin Technic Co of Iran.

https://home.treasury.gov/news/press-releases/jy1355 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230321

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March 24, 2023: The Department of the Treasury's Office of Foreign Assets Control (OFAC) amended the Belarus Sanctions Regulations and reissued them in their entirety.

OFAC also published an alert, "Sanctions Risks Associated with Provision of Jet Fuel to the Burmese Military."

https://home.treasury.gov/system/files/126/20230324_ofac_alert_jet_fuel.pdf

OFAC also designated two individuals and six entities that are connected to Burma’s military and that have enabled the military regime’s continuing atrocities, including through the importation, storage, and distribution of jet fuel to Burma’s military. These actions come as the military regime prepares to mark the 78th Armed Forces Day. The two individuals and six entities are being designated pursuant to Executive Order (E.O) 14014.

OFAC also designated three entities and nine individuals and identifying one presidential aircraft as blocked property, pursuant to Executive Order (E.O.) 14038. These designations build on sanctions imposed on individuals and entities in Belarus in response to the ongoing brutal crackdown against the pro-democracy movement and civil society surrounding the fraudulent August 2020 presidential election. These actions also underscore the United States’ willingness to hold the regime in Minsk to account for its complicity in the Russian Federation’s ongoing unjustified war of choice against Ukraine.

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

Baldouskaya, Alena Anatolieuna of Belarus;
Duk, Dzyanis Uladzimiravich of Belarus;
Fedasenka, Katsyaryna Alyaksandrauna of Belarus;
Ivankovich, Valery Valerievich of Belarus;
Karpenka, Ihar Vasilyevich of Belarus and Russia;
Kuntsevich, Alena Kanstantsinauna of Belarus;
Latt, Tun Min of Burma;
Nikiforovich, Sergei Olegovich of Belarus;
Soe, Win Min of Burma;
Tkachou, Alyaksandr Henadzievich of Belarus;
Yuzhyk, Alyaksandr Uladzimiravich of Belarus.

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

Asia Sun Group of Burma;
Asia Sun Trading Co. Ltd. of Burma;
Cargo Link Petroleum Logistics Co. Ltd. of Burma;
Open Joint Stock Company Belarusian Automobile Plant of Belarus;
Open Joint Stock Company Minsk Automobile Plant of Belarus;
Star Sapphire Group Of Companies of Burma;
Star Sapphire Group Pte. Ltd., of Singapore; and
Star Sapphire Trading Company Limited of Burma.

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

EW-001PA; Aircraft Manufacture Date 29 Jan 2002; Aircraft Model B.737-8EV BBJ2; Aircraft Manufacturer's Serial Number (MSN) 33079; Aircraft Tail Number EW-001PA.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230324 and https://home.treasury.gov/news/press-releases/jy1365 and https://home.treasury.gov/news/press-releases/jy1364

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March 28, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action in coordination with counterparts in the United Kingdom to designate key individuals supporting the regime of Syrian President Bashar al-Assad (al-Assad) and the production or export of Captagon, a dangerous amphetamine. The trade in Captagon is estimated to have become a billion-dollar illicit enterprise. These designations, some of which are being implemented pursuant to the Caesar Syrian Civilian Protection Act of 2019 (“Caesar Act”), also highlight the important role of Lebanese drug traffickers, some of whom maintain ties to Hizballah in facilitating the export of Captagon. This action also underscores the al-Assad family's dominance of illicit Captagon trafficking and its funding for the oppressive Syrian regime.

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

Abu Zureik, Imad of Syria;
Al-Assad, Samer Kamal of Syria;
Al-Assad, Wassim of Syria;
Daqqou, Hassan Muhammad of Syria;
Qaddour, Khalid of Syria; and
Zaitar, Noah of Syria and Lebanon.

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

Al-Israa Establishment For Import And Export of Lebanon; and
Hassan Daqqou Trading of Lebanon.

https://home.treasury.gov/news/press-releases/jy1369 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230328

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March 30, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned one individual, Mkrtychev Ashot, for attempting to facilitate arms deals between Russia and the Democratic People’s Republic of Korea (DPRK). Sanctions and export controls imposed by a coalition of over 30 countries have constrained Russia’s ability to replace lost military equipment and supplies with modern technology. At the same time, the United States and its partners are continuing to provide Ukraine with advanced weapons to defend itself against Russia’s brutal war of choice.

Between the end of 2022 and early 2023, Mkrtychev worked with DPRK officials to obtain over two dozen kinds of weapons and munitions for Russia in exchange for materials ranging from commercial aircraft, raw materials, and commodities to be sent to the DPRK. Mkrtychev’s negotiations with DPRK and Russian officials detailed mutually beneficial cooperation between North Korea and Russia to include financial payments and barter arrangements. He confirmed Russia’s readiness to receive military equipment from the DPRK with senior Russian officials. Mkrtychev’s negotiations with those officials indicated that necessary Russian preparations for a proposed deal were complete and that they were ready to receive materials from and transfer materials to the DPRK. He also provided DPRK officials with information from Russian officials, likely connected to his attempts to obtain military equipment for Russia from DPRK. Lastly, Mkrtychev worked with a Russian individual to locate commercial aircraft suitable for delivery to the DPRK.

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

Mkrtychev, Ashot of Slovakia.

https://home.treasury.gov/news/press-releases/jy1377 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230330

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March 31, 2023: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issued Global Magnitsky General License 7, "Authorizing Certain Transactions Involving Tabacalera del Este S.A. or Tabacos USA Inc. Pursuant to the Tobacco Master Settlement Agreement."

Global Magnitsky General License 7: All transactions prohibited by the Global Magnitsky Sanctions Regulations, 31 CFR part 583 (GMSR), involving Tabacalera del Este S.A. (“TABESA”), Tabacos USA Inc. (“Tabacos”), or any entity in which TABESA or Tabacos owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest, that are ordinarily incident and necessary to payments under the tobacco Master Settlement Agreement (MSA), entered into on November 23, 1998, between certain U.S. state and territory attorneys general and certain tobacco companies, are authorized.

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

OFAC is also issued one Global Magnitsky-related Frequently Asked Question (1121).

Question 1121: What does Global Magnitksy General License 7, Authorizing Certain Transactions Involving Tabacalera del Este, S.A. or Tabacos USA Inc., Pursuant to the Tobacco Master Settlement Agreement, authorize?

Answer: Global Magnitsky General License 7 authorizes certain transactions involving the blocked entities Tabacos USA Inc. (Tabacos) and Tabacalera del Este S.A. (Tabesa) (or any entity in which Tabesa or Tabacos owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest) that are ordinarily incident and necessary to payments under the Master Settlement Agreement (MSA) entered into on November 23, 1998, between certain U.S. state and territory attorneys general and certain tobacco companies. On January 26, 2023, OFAC designated former Paraguayan president Horacio Manuel Cartes Jara (Cartes) pursuant to Executive Order 13818 for involvement in corruption and also designated Tabacos for being owned or controlled by Cartes. On March 31, 2023, OFAC identified Tabesa as an entity that is owned, directly or indirectly, 50 percent or more by Cartes and added Tabesa to the SDN List.

Global Magnitsky General License 7 does not authorize debits to any blocked account on the books of a U.S. financial institution or any other transactions otherwise prohibited by the Global Magnitsky Sanctions Regulations.

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

Tabacalera Del Este S.A. of Paraguay.

https://ofac.treasury.gov/faqs/1121 and https://ofac.treasury.gov/recent-actions/20230331 and https://ofac.treasury.gov/media/931551/download?inline

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Fines and Penalties

March 1, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $332,500 settlement with Godfrey Phillips India Limited ("GPI"). GPI, a Mumbai, India-registered tobacco company, has agreed to settle its potential civil liability for five apparent violations of the North Korea Sanctions Regulations, 31 C.F.R. part 510. Specifically, between July and August 2017, GPI requested payment in U.S. dollars for its indirect exportation of tobacco to the Democratic People’s Republic of Korea. One of these five payments was directed to the foreign branch of a U.S. financial institution. OFAC determined that GPI did not voluntarily self-disclose the apparent violations and that the apparent violations constitute a non-egregious case.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230301_33 and https://home.treasury.gov/system/files/126/20230301_gpi.pdf

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March 2, 2023: Two Kansas men, Cyril Gregory Buyanovsky, 59, of Lawrence, and Douglas Robertson, 55, of Olathe, were arrested on charges related to a years-long scheme to circumvent U.S. export laws that included the illegal export of aviation-related technology to Russia after Russia’s unprovoked invasion of Ukraine on Feb. 24, 2022, and the imposition of stricter restrictions on exports to Russia.

According to the indictment, Buyanovsky and Robertson owned and operated KanRus Trading Company, which supplied Western avionics equipment (i.e., electronics installed in aircraft) to Russian companies and provided repair services for equipment used in Russian-manufactured aircraft. Since 2020, the defendants have conspired to evade U.S. export laws by concealing and misstating the true end users, value, and end destinations of their exports and by transshipping items through third-party countries. For example, between November 2020 and February 2021, the defendants received avionics equipment, including a computer processor bearing a sticker identifying Russia’s Federal Security Services (FSB), from a Russian company for repair in the United States. The defendants concealed the true end user and end destination by providing a fraudulent invoice to the shipment company identifying the end destination as Germany.

As further alleged, on Feb. 28, 2022, the defendants attempted to export avionics to Russia. U.S. authorities detained the shipment, and the U.S. Department of Commerce informed the defendants that a license was required to export the equipment to Russia. In an April 2022 communication, Robertson expressed to a Russia-based customer that “things are complicated in the USA” and that “[t]his is NOT the right time for [more paperwork and visibility].” Subsequently, in May, June, and July 2022, the defendants illegally transshipped avionics through Armenia and Cyprus to Russia without obtaining the required licenses.

The defendants are charged with conspiracy, exporting controlled goods without a license, falsifying and failing to file electronic export information, and smuggling goods contrary to U.S. law. If convicted, they face a maximum penalty of 20 years in prison for each count of exporting controlled goods without a license, up to 10 years in prison for each count of smuggling, and up to five years in prison for each count of conspiracy and falsifying export information. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factor.

https://www.justice.gov/opa/pr/two-us-citizens-arrested-illegally-exporting-technology-russia

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March 2, 2023: Telefonaktiebolaget LM Ericsson (Ericsson), a multinational telecommunications company headquartered in Stockholm, Sweden, has agreed to plead guilty and pay a criminal penalty of more than $206 million after breaching a 2019 Deferred Prosecution Agreement (DPA). Ericsson breached the DPA by violating the agreement’s cooperation and disclosure provisions. Based on the same underlying criminal conduct that gave rise to the DPA, Ericsson will plead guilty to engaging in a long-running scheme to violate the Foreign Corrupt Practices Act (FCPA) by paying bribes, falsifying books and records, and failing to implement reasonable internal accounting controls in multiple countries around the world.

https://www.justice.gov/opa/pr/ericsson-plead-guilty-and-pay-over-206m-following-breach-2019-fcpa-deferred-prosecution

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March 8, 2023: The United States of America obtained a warrant to seize a Boeing 737-7JU aircraft owned by PJSC Rosneft Oil Company (Rosneft), a Russian integrated energy company headquartered in Moscow, Russia headed by Igor Ivanovich Sechin. The United States District Court for the Eastern District of New York authorized the seizure, finding probable cause that the Boeing aircraft was subject to seizure based on violations of the Export Control Reform Act (ECRA) and the recent sanctions issued against Russia.

Since February 2022, when the Russia sanctions went into effect, the plane has left and reentered Russia at least seven times, in violation of federal law. The Boeing jet, which was manufactured in the United States, was last in the United States in March 2014 and is currently believed to be in, traveling to, or from Russia.

Rosneft—which is headed by sanctioned oligarch Igor Ivanovich Sechin, who owns the Boeing aircraft. The Boeing was flown from a foreign country to Russia in violation of the Export Control Reform Act (“ECRA”), and regulations issued thereunder, including the Russia sanctions. The Boeing is believed to be valued at over $25 million.

https://www.justice.gov/usao-edny/pr/united-states-obtains-warrant-seizure-airplane-owned-russian-oil-company-valued-over

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March 9, 2023: Nathan Nichols, a 46-year-old resident of Corpus Christi, TX was sentenced in the U.S. District Court for the Southern District of Texas to 27 months in federal prison, immediately followed by two years of supervised release. He pleaded guilty to conspiring to steal government property and operating an illegal gambling business on March 21, 2022.

In July 2021, authorities executed a search warrant at Nichols’ residence. They discovered sensitive military equipment, including laser range finders, thermal scopes, night vision scopes, night vision goggles, and laser aiming devices that belonged to the U.S. Army. During his trial, Nichols admitted that he conspired with others to steal sensitive U.S. Army property valued at $2,176,000 from Fort Hood in June 2021. He had been in contact with one of the people responsible for the theft and requested pictures of the property before agreeing to buy it for resale. After he obtained the items, Nichols listed them for sale on eBay.

In a separate case, Nichols admitted that from March 2018 to August 2019, he operated illegal gambling businesses in Corpus Christi. Nichols was the co-owner of Theo's Bar and owner and operator of Lady Luck. Both facilities contained illegal sweepstakes games that people play by using computers and monitors rather than casino-style equipment. The games are software-based and function as traditional slot-machine games or “8-liners,” but the reels are simulated on a computer screen rather than on mechanical reels. People playing the machines place bets before each spin and receive winnings in cash.

With his guilty pleas, Nichols agreed to forfeit $2,185,218.73 in proceeds from his illegal activities.

https://www.ice.gov/news/releases/texas-man-imprisoned-conspiring-steal-sensitive-military-equipment-running-illegal

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March 9, 2023: A federal grand jury in the District of Columbia returned an indictment charging an Iranian national with the unlawful export of electrical cables and connectors from the United States to Iran through Hong Kong. According to court documents, Mehdi Khoshghadam, a.k.a. “David Lei,” and “Pouyan,” an Iranian national residing in Tehran, Iran, were indicted by a grand jury in the U.S. District Court for the District of Columbia on one count of conspiracy, one count of violation of the International Emergency Economic Powers Act (IEEPA), and one count of conspiracy to commit money laundering. The indictment also includes a forfeiture allegation seeking all proceeds of the alleged crimes. A warrant has been issued for Khoshghadam’s arrest, and he remains a fugitive.

https://www.justice.gov/usao-dc/pr/iranian-national-charged-illegally-exporting-electrical-equipment-iran

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March 9, 2023: 88 Fed. Reg. 14601: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Edgar Ariel Bernal-Gonzalez for five years until June 10, 2026. On June 10, 2021, in the U.S. District Court for the Southern District of Texas, Edgar Ariel Bernal-Gonzalez (“Bernal-Gonzalez”) was convicted of violating 18 U.S.C. 554(a). Specifically, Bernal-Gonzalez was convicted of smuggling and attempting to smuggle from the United States to Mexico approximately 50 rounds of 9 mm ammunition, approximately 50 rounds of .38 caliber ammunition, one MEC-GAR Colt 38 magazine, one AK-47 Quad rail system, and 12 rubber rifle rail guards. As a result of his conviction, the Court sentenced Bernal-Gonzalez to 10 months of confinement, three years of supervised release, and a $100 assessment.

https://www.federalregister.gov/documents/2023/03/09/2023-04821/in-the-matter-of-edgar-ariel-bernal-gonzalez-11932-lake-june-road-balch-springs-tx-75180-order

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March 9, 2023: 88 Fed. Reg. 14598: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Erick Samuel Chavez Gonzalez for seven years until August 12, 2027. On August 12, 2020, in the U.S. District Court for the Western District of Texas, Erick Samuel Chavez Gonzalez (“Chavez Gonzalez”) was convicted of violating 18 U.S.C. 554(a). Specifically, Chavez Gonzalez was convicted of knowingly and willfully attempting to smuggle from the United States to Mexico various rifles and handguns. As a result of his conviction, the Court sentenced Chavez Gonzalez to 37 months in prison, with credit for time served, three years of supervised release, and a $100 special assessment.

https://www.federalregister.gov/documents/2023/03/09/2023-04820/in-the-matter-of-erick-samuel-chavez-gonzalez-pluton-1708-satelite-cd-juarez-chih-mexico-order

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March 9, 2023: 88 Fed. Reg. 14600: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Mohammad Khazrai Shaneivar for ten years until October 1, 2030. On October 1, 2020, in the U.S. District Court for the Northern District of Ohio, Mohammad Khazrai Shaneivar (“Shaneivar”) was convicted of violating the International Emergency Economic Powers Act (50 U.S.C. 1701, et seq.) (“IEEPA”). Specifically, Shaneivar was convicted of exporting and causing to be exported goods from the United States to Iran without the required authorizations from the United States Department of the Treasury's Office of Foreign Assets Control. As a result of his conviction, the Court sentenced Shaneivar to a $100,000 criminal fine in lieu of probation or imprisonment and a $100 assessment.

https://www.federalregister.gov/documents/2023/03/09/2023-04823/in-the-matter-of-mohammad-khazrai-shaneivar-16-udine-court-richmond-hill-ontario-l4c8c6-canada-order

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March 9, 2023: 88 Fed. Reg. 1414599: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Parisa Mohamadi for ten years until September 10, 2029. On September 10, 2019, in the U.S. District Court for the Northern District of Ohio, Parisa Mohamadi (“Mohamadi”) was convicted of two counts of violating the International Emergency Economic Powers Act (50 U.S.C. 1701, et seq.) (“IEEPA”). Specifically, Mohamadi was convicted of exporting and causing to be exported goods from the United States to Iran without the required authorizations from the United States Department of the Treasury's Office of Foreign Assets Control. As a result of her conviction, the Court sentenced Mohamadi to 24 months in prison on each count, to run concurrently and with credit for time served, two years of supervised release, and a $200 assessment.

https://www.federalregister.gov/documents/2023/03/09/2023-04822/in-the-matter-of-parisa-mohamadi-2906-fletcher-parkway-apartment-c-el-cajon-california-92020-order

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March 21, 2023: The U.S. Department of Justice unsealed two indictments charging multiple defendants with violations of the Arms Export Control Act (AECA) and the International Emergency Economic Powers Act (IEEPA) for their roles in separate schemes to procure and export U.S. technology to Iran between 2005 and 2013. In connection with this announcement, the Department of Treasury’s Office of Foreign Assets Control designated three of the defendants and four entities for their involvement in the procurement of equipment that supports Iran’s unmanned aerial vehicle (UAV) and weapons programs.

United States v. Paidar et al.

According to the indictment, between 2012 and 2013, defendants Amanallah Paidar of Iran, and Murat Bükey, of Turkey, conspired to procure and export U.S. technology for Iran through their companies Farazan Industrial Engineering in Iran, and Ozon Spor Ve Hobbi Ürünleri, in Turkey. Specifically, Paidar and Bükey exported from the United States and transshipped through Turkey a device that can test the efficacy and power of fuel cells and attempted to obtain a bio-detection system that has application in weapons of mass destruction (WMD) research and use.

Bükey, who was extradited to the United States from Spain in July 2022, pleaded guilty to conspiring to violate the AECA and IEEPA in December 2022. He was sentenced in the U.S. District Court for the District of Columbia to 28 months in prison, with credit for time served. He will be removed from the United States after completing his sentence. Paidar is a fugitive and remains at large.

United States v. Mahmoudi, et al.

According to the indictment, between 2005 and 2009, defendants Agshar Mahmoudi of Iran; Bahram Mahmoudi Mahmoud Alilou of Iran; and Shahin Golshani of the United Arab Emirates (UAE); conspired to obtain U.S. technology, including a high-speed camera that has known nuclear and ballistic missile testing applications, a nose landing gear assembly for an F-5 fighter jet, and a meteorological sensor system, through their companies Aran Modern Devices Kish Company, in Iran; and Modern Technologies, in the UAE. The defendants are fugitives and remain at large.

https://www.justice.gov/usao-dc/pr/justice-department-announces-charges-and-sentence-connection-attempts-acquire-military

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March 24, 2023: 88 Fed. Reg. 17793: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Jesus Adrian Ramirez for ten years until December 16, 2030. On December 16, 2020, Ramirez was convicted of smuggling and attempting to smuggle from the United States to Mexico firearms and firearm components, including one 40 round AK- 47 variant firearm magazine, two AK-47 variant firearm barrels, two AK-47 variant firearm bolts, two AK-47 variant firearm bolt springs, two AK-47 variant firearm gas pistons, and one AR variant firearm unfinished lower receiver. As a result of his conviction, the Court sentenced Ramirez to 46 months of confinement with credit for time served, three years of supervised release, and a $100 special assessment.

https://www.federalregister.gov/documents/2023/03/24/2023-06133/in-the-matter-of-jesus-adrian-ramirez-534-n-maknab-drive-apt-c-nogales-az-85621-and-154-w-mendibles

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March 24, 2023: 88 Fed. Reg. 17793: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Manuel Alonso Enriquez for ten years until September 17, 2030. On September 17, 2020, Enriquez was convicted of knowingly and unlawfully attempting to export from the United States to Mexico 3,000 rounds of 7.62 x 39 caliber ammunition. As a result of his conviction, the Court sentenced Enriquez to 37 months in prison, three years of supervised release, a $150 criminal fine, and a $100 assessment.

https://www.federalregister.gov/documents/2023/03/24/2023-06121/in-the-matter-of-manuel-alonso-enriquez-12129-st-laurence-avenue-el-paso-texas-79936-order-denying

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March 24, 2023: 88 Fed. Reg. 17794: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Gerardo Emmanuel Sifuentes for ten years until September 17, 2030. On September 17, 2020, Sifuentes was convicted of violating 18 U.S.C. 554(a). Specifically, Sifuentes was convicted of smuggling and attempting to smuggle from the United States to Mexico approximately 5,000 rounds of 7.62 x39 caliber ammunition, an Anderson Manufacturing AR-15 rifle, and a Beretta 9mm handgun. As a result of his conviction, the Court sentenced Sifuentes to 46 months of confinement, three years of supervised release, a $100 special assessment, and a $250 fine.

https://www.federalregister.gov/documents/2023/03/24/2023-06131/in-the-matter-of-gerardo-emmanuel-sifuentes-247-val-verde-street-el-paso-tx-79905-3916-order-denying

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March 24, 2023: 88 Fed. Reg. 17795: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Erik Aguero for ten years until July 15, 2031. On July 15, 2021, Aguero was convicted of smuggling, and attempting to smuggle from the United States to Mexico, various firearms defined under Category I of the United States Munitions List without the required license or written authorization. As a result of his conviction, the Court sentenced Aguero to 48 months of confinement with credit for time served, three years of supervised release, a $100 assessment, and a $1,000 criminal fine.

https://www.federalregister.gov/documents/2023/03/24/2023-06127/in-the-matter-of-enrique-reyes-morales-inmate-number-54549-509-fci-allenwood-low-federal

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March 24, 2023: 88 Fed. Reg. 17796: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Randy Lew Williams for ten years until March 3, 2031. On March 3, 2021, Williams was convicted of knowingly and willfully exporting and causing to be exported from the United States to Iraq Glock 19 gun barrels; Glock 19 slides, a Glock 19 recoil spring assembly, a Glock 19 slide stop lever, a Glock 19 trigger mechanism housing with ejector, and a Glock 19 trigger with trigger bar, which are designated as defense articles on the United States Munitions Lists, without having first obtained from the Department of State a license for such export or written authorization. As a result of his conviction, the Court sentenced Williams to 40 months of confinement, two years of supervised release, and a $300 assessment. Williams was also placed on the U.S. Department of State’s debarred list.

https://www.federalregister.gov/documents/2023/03/24/2023-06126/in-the-matter-of-randy-lew-williams-4009-oxford-way-norman-ok-73072-3231-order-denying-export

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March 24, 2023: 88 Fed. Reg 17797: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Genovevo Alvarez-Ronquillo for ten years until October 13, 2030. On October 13, 2020, Alvarez-Ronquillo was convicted of multiple counts of violating 18 U.S.C. 554(a). Specifically, Alvarez-Ronquillo was convicted of fraudulently and knowingly receiving, concealing, buying, selling, and facilitating the transportation, concealment, and sale of merchandise, specifically firearms, from the United States to Mexico. As a result of his conviction, the Court sentenced Alvarez- Ronquillo to 78 months in prison, two years of supervised release, and a $2,400 special assessment.

https://www.federalregister.gov/documents/2023/03/24/2023-06132/in-the-matter-of-genovevo-alvarez-ronquillo-inmate-number-04312-151-fci-allenwood-low-federal

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March 24, 2023: 88 Fed. Reg. 17798: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Joseph Ormond Kirk for five years until October 5, 2026. On October 5, 2021, Kirk was convicted of smuggling and attempting to smuggle from the United States to Mexico various firearms. As a result of his conviction, the Court sentenced Kirk to 18 months of confinement, two years of supervised release, and a $100 assessment.

https://www.federalregister.gov/documents/2023/03/24/2023-06129/in-the-matter-of-joseph-ormond-kirk-iii-13204-saxby-court-austin-tx-78729-order-denying-export

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March 24, 2023: Igor Panchernikov, 41, a former Corona, CAresident who once served in the United States Air Force Reserves, pleaded guilty to one count of conspiracy to violate the Arms Export Control Act. He has been in federal custody since July 2022 after being extradited to the United States from Israel.

According to his plea agreement, from December 2016 to May 2018, Panchernikov conspired with other individuals to knowingly export from the United States to Russia defense articles without obtaining from the State Department a valid license or other approval for such exports.

Panchernikov’s accomplices purchased defense articles – including thermal riflescopes, weapons sights, monoculars, and night vision googles – from various online sellers located in the United States and directed the sellers to mail those items to Panchernikov’s residence in Corona. At his Corona residence, Panchernikov received at least 19 defense articles that his co-conspirators purchased from online sellers. After receiving these items, Panchernikov inspected the items to ensure that they were undamaged and operational. Pursuant to his co-conspirators’ instructions, Panchernikov then mailed two of the items to accomplices in Russia and mailed 17 defense articles to Elena Shifrin, 61, of Mundelein, Illinois, who then mailed these items to Russia.

https://www.justice.gov/usao-cdca/pr/former-us-serviceman-pleads-guilty-exporting-defense-items-such-night-vision-goggles

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March 27, 2023: Dariush Niknia was sentenced to two years and ten months in prison, and Richard Lant, was sentenced to 24 months of home detention and fined $7,500 for conspiracy to export to an embargoed country, Iran.

According to court documents, between May and October 2015, Niknia, Lant, and others conspired to unlawfully sell and supply 500 Russian-made tank helmets to Niknia’s contact in Tehran, Iran. The helmets were to be configured for a Russian-produced T-72S battle tank and were required to have a five-pin plug, a feature that is necessary to enable a tank communication device.

https://www.justice.gov/usao-edca/pr/elk-grove-and-las-vegas-residents-sentenced-conspiring-violate-us-trade-embargo-iran

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March 29, 2023: 88 Fed. Reg. 18518: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Obed Rafael Cuevas-Serratos for nine years until August 3, 2030. On August 3, 2021 Cuevas-Serratos was convicted of smuggling and attempting to smuggle from the United States to Mexico approximately 13000 rounds of 7.62-millimeter ammunition. As a result of his conviction, the Court sentenced CuevasSerratos to 30 months of confinement, three years of supervised release, and a $100 assessment.

https://www.federalregister.gov/documents/2023/03/29/2023-06418/in-the-matter-of-obed-rafael-cuevas-serratos-1502-calle-del-norte-apt-11-laredo-tx-78041-6000-order

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March 29, 2023: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has renewed for 180 days the Temporary Denial Orders denying the export privileges of PJSC Aeroflot of Russia.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1486-e2825/file

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March 29, 2023: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has renewed for 180 days the Temporary Denial Orders denying the export privileges of UTair Aviation JSC of Russia.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1487-e2826/file

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March 29, 2023: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has renewed for 180 days the Temporary Denial Orders denying the export privileges of Azur Air of Russia.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1488-e2827/file

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March 29, 2023: A federal jury convicted three military contractors on one count of conspiring to defraud the United States and two counts of major fraud. According to court documents and evidence presented at trial, former Envistacom LLC President and co-founder Alan Carson, former Envistacom Vice President Valerie Hayes, and the owner of another company, Philip Flores, conspired to defraud the United States at least from September 2014 through November 2016, by preparing and procuring sham quotes for government contracts totaling over $7.8 million. Carson, Hayes, and Flores also fraudulently prepared “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-convicted-7-million-procurement-fraud-scheme

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March 30, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with Wells Fargo Bank, N.A. (“Wells Fargo”). Wells Fargo agreed to remit $30,000,000 to settle its potential civil liability for apparent violations of sanctions against Iran, Syria, and Sudan. For about seven years beginning in 2008 and ending in 2015, Wells Fargo and its predecessor, Wachovia Bank (“Wachovia”), provided a foreign bank located in Europe with software that the foreign bank then used to process trade finance transactions with U.S.-sanctioned jurisdictions and persons. Wachovia, at the direction of a mid-level manager, customized a trade insourcing software platform for general use by the European bank that Wachovia knew or should have known would involve engaging in trade-finance transactions with sanctioned jurisdictions and persons.

The settlement amount reflects OFAC’s determination that Wells Fargo’s 124 apparent violations, which occurred between approximately December 27, 2010, and December 7, 2015, were voluntarily self disclosed. Moreover, while OFAC determined that the apparent violations were egregious, the failure by Wells Fargo to identify and prevent the apparent violations was not a result of a systemic compliance breakdown within the broader Wells Fargo organization, which OFAC acknowledges had a historically strong overall sanctions compliance program.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230330_33 and https://home.treasury.gov/system/files/126/20230330_wells_fargo.pdf

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March 30, 2023: 88 Fed. Reg. 19057: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Jose Luis Alonso for seven years until January 13, 2029. On January 13, 2022, Alonso was convicted of attempted smuggling from the United States to Mexico one (1) AM 15 pistol, one (1) .22 caliber rifle, and one (1) 12-gauge shotgun. As a result of his conviction, the Court sentenced Alonso to 24 months of confinement, three years of supervised release, and a $100 assessment.

https://www.federalregister.gov/documents/2023/03/30/2023-06635/in-the-matter-of-jose-luis-alonso-3433-nottingham-drive-brownsville-tx-78526-and-2719-gibraltar

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March 30, 2023: 88 Fed. Reg. 19058: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Ye Sang “Ivy” Wang for ten years until December 21, 2031. On December 21, 2021, Wang was convicted of conspiring to willfully export from the United States to China, controlled military equipment and supplies for profit without the required licenses. As a result of her conviction, the Court sentenced Wang to 30 months of confinement, three years of supervised release, a $100 special assessment, and a $20,000 criminal fine. Pursuant to Section 1760(e) of the Export Control Reform Act (“ECRA”), the export privileges of any person who has been convicted of certain offenses, including, but not limited to, 18 U.S.C. 371, may be denied for a period of up to ten (10) years from the date of his/her conviction. 50 U.S.C. 4819(e). In addition, any Bureau of Industry and Security (“BIS”) licenses or other authorizations issued under ECRA, in which the person had an interest at the time of the conviction, may be revoked.

https://www.federalregister.gov/documents/2023/03/30/2023-06631/order-denying-export-privileges-in-the-matter-of-ye-sang-ivy-wang-972-red-granite-road-chula-vista

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March 30, 2023: 88 Fed. Reg. 19059: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Mario Ramirez-Rios for ten years until October 23, 2030. On October 23, 2020, Ramirez-Rios was convicted of attempted smuggling from the United States to Mexico: 3,280 rounds of 7.62 x 39mm ammunition and 200 rounds of 9 mm ammunition, items designated as defense articles on the United States Munitions List without the required license or written approval. As a result of his conviction, the Court sentenced Ramirez-Rios to 46 months of confinement with credit for time served and a $100 special assessment.

https://www.federalregister.gov/documents/2023/03/30/2023-06634/in-the-matter-of-mario-ramirez-rios-3724-magali-circle-brownsville-texas-78521

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March 31, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with Uphold HQ Inc. (“Uphold”). Uphold agreed to remit $72,230.32 to settle its potential civil liability for apparent violations of sanctions against Iran, Cuba, and Venezuela. Between March 2017 and May 2022, Uphold or its affiliates processed 152 transactions totaling $180,575.80 in apparent violation of OFAC’s sanctions against Iran, Cuba, and Venezuela. These apparent violations included processing transactions for customers who self-identified as being located in Iran or Cuba and for employees of the Government of Venezuela. The settlement amount reflects OFAC’s determination that Uphold’s apparent violations were non-egregious and voluntarily self-disclosed.

https://ofac.treasury.gov/recent-actions/20230331_33 and https://ofac.treasury.gov/media/931556/download?inline

MARCH 2023 EXPORT CONTROL REGULATIONS UPDATES Read More »

FEBRUARY 2023 EXPORT CONTROL REGULATION UPDATES

This newsletter is a listing of the latest changes in export control regulations through February 28, 2023. The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

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

REGULATORY UPDATES

President

President Biden Continued The National Emergency Regarding Afghanistan

February 3, 2023: 88 Fed. Reg. 7837: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency declared in Executive Order 14064 with respect to the widespread humanitarian crisis in Afghanistan and the potential for a deepening economic collapse in Afghanistan.

https://www.federalregister.gov/documents/2023/02/07/2023-02671/continuation-of-the-national-emergency-with-respect-to-the-widespread-humanitarian-crisis-in

Note: Afghanistan continues to remain an arms embargoed country under the ITAR.

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President Biden Continued The National Emergency Regarding Burma (Myanmar)

February 3, 2023: 88 Fed. Reg. 8205: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency declared in Executive Order 14014 with respect to the situation in and in relation to Burma.

https://www.federalregister.gov/documents/2023/02/07/2023-02770/continuation-of-the-national-emergency-with-respect-to-the-situation-in-and-in-relation-to-burma

Note: Burma aka Myanmar, continues to remain an Arms Embargoed country under the ITAR

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President Biden Continued The National Emergency Regarding Cuba

February 21, 2023: 88 Fed. Reg. 10821: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued the national emergency with respect to Cuba and the emergency authority relating to the regulation of the anchorage and movement of vessels set out in Proclamation 6867 of March 1, 1996, as amended by Proclamation 7757 of February 26, 2004, Proclamation 9398 of February 24, 2016, and Proclamation 9699 of February 22, 2018.

https://www.federalregister.gov/documents/2023/02/21/2023-03746/continuation-of-the-national-emergency-with-respect-to-cuba-and-of-the-emergency-authority-relating

Note: Cuba continues to be an arms-embargoed country under the ITAR and is subject to associated sanctions under the EAR and economic sanctions under the Office of Foreign Assets Controls

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President Biden Continued The National Emergency Regarding Libya

February 21, 2023: 88 Fed. Reg. 10823: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency declared in Executive Order 13566 of February 25, 2011, and expanded in Executive Order 13726 of April 19, 2016.

https://www.federalregister.gov/documents/2023/02/21/2023-03747/continuation-of-the-national-emergency-with-respect-to-libya

Note: Libya continues to be an arms embargo country under the ITAR

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President Biden And The White House Have Issued A Memorandum On the United States Conventional Arms Transfer Policy

February 23, 2023: President Biden and the White House has issued a Memorandum on the United States Conventional Arms Transfer (CAT) Policy, a key guidance document building on the October 2022 National Security Strategy that articulates the framework under which U.S. government agencies review and evaluate proposed arms transfers to allies and partners worldwide. The CAT Policy reflects the Biden-Harris Administration’s foreign policy vision and priorities of prevailing in an era of complex strategic competition by leading with diplomacy, renewing alliances, elevating human rights, and delivering for the American people through support and advocacy for U.S. industry. Under the Biden-Harris Administration’s revised CAT Policy, the United States will exercise restraint and promote norms and controls for the responsible international transfer of conventional arms. The United States will continue considering arms transfers on a case-by-case basis, taking into account the full spectrum of U.S. foreign policy and national security interests. In an increasingly competitive market, the U.S. Government will promote transfers when they are in the U.S. national interest, in line with the considerations of the CAT Policy, applicable export control laws and regulations, and consistent with defense trade advocacy procedures.

https://www.whitehouse.gov/briefing-room/presidential-actions/2023/02/23/memorandum-on-united-states-conventional-arms-transfer-policy/

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President Biden Raised Tariffs On Certain Russian Products

February 24, 2023: President Biden raised tariffs on certain Russian products imported to the United States, building on previous efforts to strip Russia of its international trade privileges. These measures are designed to target key Russian commodities generating revenue for the Kremlin while reducing U.S. reliance on Russia. These measures are carefully calibrated to impose costs on Russia while minimizing costs to U.S. consumers. This action will result in increased tariffs on more than 100 Russian metals, minerals, and chemical products worth approximately $2.8 billion to Russia. It will also significantly increase costs for aluminum that was smelted or cast in Russia to enter the U.S. market in order to counter harm to the domestic aluminum industry, which is being squeezed by energy costs as a result of Russia’s invasion of Ukraine.

https://www.whitehouse.gov/briefing-room/statements-releases/2023/02/24/fact-sheet-on-one-year-anniversary-of-russias-invasion-of-ukraine-biden-administration-announces-actions-to-support-ukraine-and-hold-russia-accountable/

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

Department of State Responds To Public Comments On Interim Final Rule Regarding Reorganization of ITAR Part 120 And Made Minor Amendments

February 27, 2023: 88 Fed. Reg. 12210: The Department of State published an interim final rule on March 23, 2022, effective September 6, 2022, amending the International Traffic in Arms Regulations (ITAR) to better organize the purposes and definitions of the regulations. After reviewing the comments received in response to that interim final rule, the Department is now responding to public comments and finalizing the interim final rule, including making minor amendments to 22 CFR §§ 120.13(registration) and 120.40 (compositional items). This rule is effective February 27, 2023.

https://www.federalregister.gov/documents/2023/02/27/2023-03828/international-traffic-in-arms-regulations-consolidation-and-restructuring-of-purposes-and

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DDTC Name And Address Changes Posted To Website

February 1 through 27, 2023: 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 from General Dynamics United Kingdom Limited at Units 3&4 Bryn Brithdir, Oakdale Business Park, Blackwood NP12 4AA to Units 1&3 Bryn Brithdir, Oakdale Business Park, Blackwood NP12 4AD;
Change in Address from Raytheon Technologies Corporation at 870 Winter Street, Waltham, Massachusetts 02451 to 1000 Wilson Blvd., Arlington, Virginia 22209;
Change in Names from Zenetex LLC, Delex Systems and V2X, Inc., to Vectrus Systems Corporation due to dissolution;
Change in Address from Kokusai AeroMarine Co., Ltd. at 5-2, 2-Chome NishiShinbashi, Minato-Ku, Tokyo, 105-0003 Japan to 10-6, 1-Chome, Shinbashi, Minato-Ku, Tokyo, 105-0004 Japan;
Change in Name from Harris Global Communications Inc. to L3Harris Global Communications Inc., due to merger;
Change in Name from Pilatus Defence Solutions Australia Pty Ltd to Pilatus Training Solutions Australia Pty Ltd. due to corporate rebranding;
Change in Name from Raytheon Technical Services International Company to Vertex Technical Services International Company due to acquisition;
Change in Name from Colt Defense LLC to Colt’s Manufacturing Company LLC due to dissolution;
Change in Name from umlaut SARL to umlaut SAS due to change in corporate structure;

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The Department Of State Designates Tehrik-e Taliban Pakistan, Hizbul Mujahideen, And Army of Islam (And Other Aliases) As Foreign Terrorist Organizations

February 16, 2023: 88 Fed. Reg. 10171: Based on a review of the Administrative Records assembled pursuant to Section 219(a)(4)(C) of the Immigration and Nationality Act, amended (8 U.S.C. 1189(a)(4)(C))(“INA”), 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 bases for the designations of Tehrik-e Taliban Pakistan, Hizbul Mujahideen, and Army of Islam (and Other Aliases) as Foreign Terrorist Organizations have not changed in such a manner as to warrant revocation of the designations and that the national security of the United States does not warrant a revocation of the designations.

https://www.federalregister.gov/documents/2023/02/16/2023-03255/review-of-the-designations-as-foreign-terrorist-organizations-of-tehrik-e-taliban-pakistan-hizbul

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U.S. Department of Commerce and U.S. Department of Justice

The Department Of Justice And The Department Of Commerce Are Launching The Disruptive Technology Strike Force

February 16, 2023: The Department of Justice and the Department of Commerce are launching the Disruptive Technology Strike Force. Under the leadership of the Justice Department’s National Security Division and the Commerce Department’s Bureau of Industry and Security (BIS), the strike force will bring together experts throughout government – including the FBI, Homeland Security Investigations (HSI) and 14 U.S. Attorneys’ Offices in 12 metropolitan regions across the country – to target illicit actors, strengthen supply chains and protect critical technological assets from being acquired or used by nation-state adversaries.

The strike force will be co-led by Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division and Assistant Secretary for Export Enforcement Matthew Axelrod of the Department of Commerce’s Bureau of Industry and Security.

When acquired by nation-state adversaries such as the People’s Republic of China, Iran, Russia, and North Korea, advanced technologies can be used in new or novel ways to enhance their military capabilities or support mass surveillance programs that enable human rights abuses. End users of national security concern seek technologies, including those related to supercomputing and exascale computing, artificial intelligence, advanced manufacturing equipment and materials, quantum computing, and biosciences. Although they have important commercial uses, technologies in these fields can threaten U.S. national security when used by adversaries for disruptive purposes, such as improving calculations in weapons design and testing; improving the speed and accuracy of military or intelligence decision-making; and breaking or developing unbreakable encryption algorithms that protect sensitive communications and classified information.

The strike force’s work will focus on investigating and prosecuting criminal violations of export laws; enhancing administrative enforcement of U.S. export controls; fostering partnerships with the private sector; leveraging international partnerships to coordinate law enforcement actions and disruption strategies; utilizing advanced data analytics and all-source intelligence to develop and build investigations; conducting regular training for field offices; and strengthening connectivity between the strike force and the Intelligence Community.

The strike force will operate in 12 metropolitan regions across the United States, with oversight and support from the local U.S. Attorneys’ Offices in Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York City (Southern and Eastern Districts of New York), San Jose, Calif., Phoenix, Portland, Ore., and the Washington, D.C. region (District of Columbia and the Eastern District of Virginia).

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3222-distruptive-tech-strike-force/file

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

BIS Published A Report On The Effect Of Imports Of Neodymium-Iron-Boron (Ndfeb) Permanent Magnets On The National Security Of The United States

February 14, 2023: 88 Fed. Reg. 9430: The Bureau of Industry and Security (BIS) published a report that summarizes the findings of an investigation conducted by the U.S. Department of Commerce (the “Department”) pursuant to section 232 of the Trade Expansion Act of 1962, as amended (“section 232”), into the effect of imports of neodymium-iron-boron (NdFeB) permanent magnets on the national security of the United States. This report was completed in June 2022 and posted on the BIS website in September 2022. BIS has not published the appendices to the report in this notification of report findings, but they are available online at the BIS website, along with the rest of the report.

https://www.federalregister.gov/documents/2023/02/14/2023-03078/publication-of-a-report-on-the-effect-of-imports-of-neodymium-iron-boron-ndfeb-permanent-magnets-on and https://www.bis.doc.gov/index.php/documents/section-232-investigations/3141-report-1/file and https://www.bis.doc.gov/index.php/documents/section-232-investigations/3142-2022-09-fact-sheet-biden-harris-administration-announces-actions-to-secure-rare-earth-element/file

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BIS Seeks Comments On Licensing Procedures For The Export And Reexport Of Agricultural Commodities To Cuba

February 17, 2023: 88 Fed. Reg. 10286: The Bureau of Industry and Security (BIS) is requesting public comments on the effectiveness of its licensing procedures as defined in the Export Administration Regulations (EAR) for the export and reexport of agricultural commodities to Cuba. BIS will include a description of any comments it receives in its biennial report to Congress, as required by the Trade Sanctions Reform and Export Enhancement Act of 2000, as amended (TSRA). Comments must be received by March 20, 2023.

https://www.federalregister.gov/documents/2023/02/17/2023-03359/effectiveness-of-licensing-procedures-for-the-export-and-reexport-of-agricultural-commodities-to

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BIS Expedites Processing Of Export License Applications For Items Needed To Aid Survivors Of Turkish/Syria Earthquake

February 17, 2023: In response to the devastating earthquake on February 6, 2023, that has heavily impacted Türkiye and Syria, the Department of Commerce’s Bureau of Industry and Security (BIS) has expedited the processing of export license applications for items needed to aid survivors. These export and reexport license requirements should not prevent or otherwise impede the shipment of aid and recovery-related items intended directly for the Syrian people or through nongovernmental humanitarian organizations (NGOs) in-country, including in areas under the control of the Assad regime and non-state actors. Examples of items eligible for expedited licensing include heavy equipment, telecommunications hardware and software, portable generators and other power generation equipment, medical devices, water purification and sanitation equipment, and shelter materials.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3224-2022-02-17-bis-press-release-turkiye-syria-earthquake-relief-support/file

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BIS Updates the EAR Pursuant To Wassenaar Arrangement Meetings In December of 2021.

February 24, 2023: 88 Fed. Reg. 12108: The Department of Commerce, Bureau of Industry and Security (BIS) maintains, as part of its Export Administration Regulations (EAR), the Commerce Control List (CCL), which identifies certain items subject to Department of Commerce jurisdiction. During the December 2021 Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (WA) Plenary meeting, Participating States of the WA (Participating State) made certain decisions affecting the WA control lists, which BIS is now implementing via amendments to the CCL. On August 15, 2022, BIS published a final rule that implemented some of these decisions by adding to the CCL four technologies that met the criteria for emerging or foundational technologies under Section 1758 of the Export Control Reform Act of 2018 (ECRA). These technologies are two substrates of ultra-wide bandgap semiconductors (Gallium Oxide (Ga₂ O₃) and diamond), Electronic Computer Aided Design (ECAD) software specially designed for the development of integrated circuits with any Gate-All-Around Field-Effect Transistor (GAAFET) structure, and pressure gain combustion (PGC) technology for the production and development of gas turbine engine components or systems. This final rule implements the remaining controls agreed to during the December 2021 WA Plenary meeting by revising the CCL, as well as certain EAR provisions, including License Exception Adjusted Peak Performance (APP). This final rule also makes corrections to align the scope of Significant Item (SI) license requirements throughout the EAR and makes a revision to License Exception Strategic Trade Authorization (STA). This rule is effective February 24, 2023.

https://www.federalregister.gov/documents/2023/02/24/2023-03683/implementation-of-2021-wassenaar-arrangement-decisions

Department of Treasury

CFIUS Committee Published Determinations That New Zealand And The United Kingdom Have Established And Are Effectively Controlling Investment Security, Allowing Them To Be Deemed An Excepted Foreign State

February 13, 2023: 88 Fed. Reg. 9190: The Department of the Treasury, as Chair of the Committee on Foreign Investment in the United States, has published the Committee's determinations that New Zealand and the United Kingdom have established and are effectively utilizing a robust process to analyze foreign investments for national security risks and to facilitate coordination with the United States on matters relating to investment security. This determination satisfies the second criterion in the definition of an excepted foreign state under 31 CFR 800.218 with respect to New Zealand and the United Kingdom of Great Britain and Northern Ireland. Therefore, New Zealand and the United Kingdom of Great Britain and Northern Ireland are and will remain excepted foreign states absent further Committee action and notice in the Federal Register. These determinations are effective February 10, 2023.

https://www.federalregister.gov/documents/2023/02/13/2023-02533/determination-regarding-excepted-foreign-states

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

OFAC Publishes Fact Sheet “Disrupting And Degrading – One Year Of U.S. Sanctions On Russia And Its Enablers”

February 24, 2023: The Department of the Treasury's Office of Foreign Assets Control (OFAC) published a fact sheet titled, “Disrupting and Degrading – One Year of U.S. Sanctions on Russia and Its Enablers.” This fact sheet summarizes the actions that OFAC and U.S. allies have taken to make it harder and costlier for the Kremlin to obtain the capital, materials, technology, and support it needs to sustain its war of aggression.

https://home.treasury.gov/news/press-releases/jy1298

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OFAC Issued A Humanitarian Assistance Fact Sheet

February 27, 2023: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued a humanitarian assistance fact sheet, Supplemental Guidance for the Provision of Humanitarian Assistance. This 2023 fact sheet supplements OFAC’s 2014 Guidance Related to the Provision of Humanitarian Assistance by Not-for-Profit Non-Governmental Organizations. OFAC issued this 2023 Fact Sheet to provide guidance on the reach of economic sanctions for persons involved in the conduct of humanitarian-related activities, including the U.S. government (USG); international organizations and entities (IOs); nongovernmental organizations (NGOs); persons involved in the provision of food, other agricultural commodities, medicine, and medical devices (Ag-Med); and financial institutions and other service providers who support or facilitate transactions for such persons.

https://home.treasury.gov/system/files/126/supplemental_ngo_humanitarian.pdf and https://home.treasury.gov/system/files/126/ngo_humanitarian.pdf

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U.S. Census Bureau

Tips on How to Resolve AES Response Messages

February 16, 2023: Census published the following tip:

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

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

Response Code: 512

Narrative: ECCN Missing

Severity: Fatal

Reason: The License Code/License Exemption Code requires an Export Control Classification Number (ECCN), but it was not reported.

Resolution: The License Code/License Exemption Code requires the reporting of an ECCN. See ‘Appendix F – License and License Exemption Type Codes’ and reporting guidelines.

Verify the License Code/License Exemption Code requirements, correct the shipment, and resubmit.

Response Code: 8W1

Narrative: Shipping Weight/Quantity 1 Out of Range

Severity: Verify

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

Resolution: For a particular Schedule B/HTS Number reported, the shipping weight divided by the first quantity should fall within a certain parameter based on historical statistical averages for that commodity. Ratios outside this pre-determined parameter might indicate either a keying error or misclassification of the product. Verify the Shipping Weight, Quantity 1, and Schedule B/HTS Number, correct the shipment and resubmit (if necessary). If the line item is verified correctly as reported, no action is necessary.

U.S. Department of Defense

DSCA Notifies Congress Of Potential FMS Sale To Poland

February 7, 2023: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) has notified Congress that the Republic of Poland has requested to buy eighteen (18) M142 High Mobility Artillery Rocket System (HIMARS) launchers; four hundred sixty-eight (468) HIMARS Launcher Loader Module kits; forty-five (45) M57 Army Tactical Missile Systems (ATACMS); four hundred sixty-one (461) M30A2 Guided Multiple Launch Rocket System Alternative Warhead (GMLRS-AW) pods with Insensitive Munitions Propulsion System (IMPS); five hundred twenty-one (521) M31A2 Guided Multiple Launch Rocket System Unitary (GMLRS-U) pods with Insensitive Munitions Propulsion System (IMPS); and five hundred thirty-two (532) XM403 Guided Multiple Launch Rocket System Extended Range Alternative Warhead (GMLRS-ER AW) pods. Also included are Low Cost Reduced Range Practice Rockets; support equipment; communications equipment; spare and repair parts; test sets; batteries; laptop computers; publications and technical data; facility design; personnel training and equipment; systems integration support; Quality Assurance Teams and a Technical Assistance Fielding Team; United States Government and contractor engineering and logistics personnel services; training; sensors; and other related elements of logistics and program support. The total estimated cost is $10 billion.

https://www.dsca.mil/press-media/major-arms-sales/poland-high-mobility-artillery-rocket-system-himars-0

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DSCA Notifies Congress Of Potential FMS Sale To Singapore

February 9, 2023: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Singapore has requested to buy one hundred (100) KMU-556 Tail Kits for Joint Direct-Attack Munition (JDAM) GBU-31; nine hundred (900) KMU-572 Tail Kits for JDAM GBU-38 and Laser JDAM GBU-54; two hundred fifty (250) MAU-169 Computer Control Group for 500lb Paveway-II (PWII) GBU-12; and two hundred fifty (250) MXU-650 Air Foil Group for 500lb PWII GBU-12. Also included are DSU-38 laser guidance sets; Common Munitions Built-In-Test (BIT)/Reprogramming Equipment (CMBRE); spare parts, consumables, and accessories, and repair and return support; aircraft and munitions support and support equipment; personnel training and training equipment; unclassified software; unclassified technical books and other publications; U.S. Government and contractor engineering, technical and logistics support services, studies and surveys; and other related elements of logistical and program support. The estimated total cost is $55 million.

https://www.dsca.mil/press-media/major-arms-sales/singapore-air-ground-munitions-kits-and-services

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DSCA Notifies Congress Of Potential FMS Sale To Kuwait

February 14, 2023: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Kuwait has requested to buy planning, integration, implementation, and maintenance of a Medical Information System for its Kuwait Military Medical Command (KMMC) that consists of Health Information Systems Information Technology (IT) hardware and software, IT infrastructure, implementation of life-cycle management practices, training, maintenance, support, and warranty services, along with U.S. Government and contractor engineering, technical and logistics support services; and other related elements of logistical and program support. The estimated total cost is $250 million.

https://www.dsca.mil/press-media/major-arms-sales/kuwait-medical-information-system-kuwait-military-medical-command-kmmc

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DSCA Notifies Congress Of Potential FMS Sale To The Netherlands

February 16, 2023: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of The Netherlands has requested a possible purchase of twenty (20) M142 High Mobility Artillery Rocket System (HIMARS) launchers; thirty-nine (39) M30A2 Guided Multiple Launch Rocket System (GMLRS) Alternative Warhead (AW) Missile Pods with Insensitive Munitions Propulsion System (IMPS); thirty-eight (38) M31A2 GMLRS Unitary (GMLRS-U) High Explosive (HE) Missile Pods with IMPS; eighty (80) M57 Army Tactical Missile System (ATACMS) Missile Pods; and seventeen (17) M1152A1 High Mobility Multipurpose Wheeled Vehicles (HMMWVs). Also included are M28A2 Reduced Range Practice Rocket (RRPR) pods; radios with similar “SINCGARS” capability, including vehicular dual long-range radio systems w/GPS; single radio, long range vehicular system w/GPS; High Frequency/VHF radios; M1084A2 cargo trucks, Family of Medium Tactical Vehicles (FMTVs) Resupply Vehicles (RSVs); M1089A2 wrecker truck, FMTVs; M1095 5-ton trailer FMTVs; Simple Key Loaders (SKLs), AN/PYQ-10; Defense Advanced Global Positioning System Receivers (DAGRs); machine gun mounts; battle management systems, Vehicle Integration Kits, ruggedized laptops, and training equipment publications for HIMARS and munitions; camouflage screen and support systems; support equipment; communications equipment; spare and repair parts; test sets; training and training equipment; publications; systems integration support; technical data; Stockpile Reliability, Quality Assurance and Technical Assistance teams; U.S. Government and contractor technical, engineering, and logistics support services; and other related elements of logistical and program support. The total estimated cost is $670 million. The principal contractor will be Lockheed Martin, Grand Prairie, TX. There are no known offset agreements proposed in connection with this potential sale.

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

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DSCA Notifies Congress Of Potential FMS Sale To Australia

February 28, 2023: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Australia has requested to buy up to sixty-three (63) Advanced Anti-Radiation Guided Missiles-Extended Range (AARGM-ERs); and up to twenty (20) AARGM-ER Captive Air Training Missiles (CATMs). Also included are AGM-88G Advanced Anti-Radiation Guided Missile-Extended Range Dummy Air Training Missiles (AARGM-ER DATMs), containers, component parts, and support equipment; Repair of Repairables; software (Classified and Unclassified); publications (Classified and Unclassified); training (Classified and Unclassified); transportation; U.S. Government and Contractor engineering support; and other related elements of logistical and program support. The estimated total cost is $506 million. The prime U.S. contractor will be the Javelin Joint Venture between Lockheed Martin in Orlando, FL, and Raytheon Missiles and Defense in Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.

https://www.dsca.mil/major-arms-sales/archive-date/202302

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)

February 1, 2023: 88 Fed. Reg. 6621: The Department of Commerce, Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) by adding seven entities to the Entity List. These seven entities, listed under the destination of Iran, have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States for contributing to Russia's military and defense industrial base. They are being added to the Entity List with the application of the Russia/Belarus-Military End User Foreign Direct Product rule.

Design and Manufacturing of Aircraft Engines (DAMA);
Islamic Revolutionary Guard Corps Aerospace Force;
Islamic Revolutionary Guard Corps Research and Self-Sufficiency Jihad Organization;
Oje Parvaz Mado Nafar Company;
Paravar Pars Company;
Qods Aviation Industry; and
Shahed Aviation Industries.

https://www.federalregister.gov/documents/2023/02/01/2023-02130/additions-to-the-entity-list

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February 14, 2023: 88 Fed. Reg. 9389: The Department of Commerce, Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) by adding six entities to the Entity List, under the destination of the People's Republic of China (China). These six 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 are being added for their support to China's military modernization efforts, specifically the People's Liberation Army's (PLA) aerospace programs, including airships and balloons and related materials and components. The PLA utilizes High Altitude Balloons (HAB) for intelligence and reconnaissance activities. This activity is contrary to U.S. national security and foreign policy interests under § 744.11 of the EAR. For these six entities, BIS imposes a license requirement for all items subject to the EAR and will review license applications under a presumption of denial.

The following entities have been added to the Entity List:

Beijing Nanjiang Aerospace Technology Co., Ltd.;
China Electronics Technology Group Corporation 48th Research Institute;
Dongguan Lingkong Remote Sensing Technology Co., Ltd.;
Eagles Men Aviation Science and Technology Group Co., Ltd. (EMAST);
Guangzhou Tian-Hai-Xiang Aviation Technology Co., Ltd.; and
Shanxi Eagles Men Aviation Science and Technology Group Co., Ltd.

https://www.federalregister.gov/documents/2023/02/14/2023-03193/additions-to-the-entity-list

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February 27, 2023: 88 Fed. Reg. 12175: The Department of Commerce, Bureau of Industry and Security (BIS) revised the EAR to enhance and strengthen the existing sanctions against Russia and Belarus by expanding the scope of the Russian and Belarusian industry sector sanctions and the `luxury goods' sanctions to better align them with the controls that have been implemented by U.S. allies and partners imposing substantially similar controls on Russia and Belarus. For similar policy reasons, this rule also refines other existing controls on Russia and Belarus that were imposed in response to the February 2022 further invasion of Ukraine. The regulatory changes include:

Revisions to the sanctions under Supplement No. 2 to EAR Part 746 to make conforming changes with other supplements (Supplements Nos. 4 and 6 to EAR Part 746) used under the Russian and Belarusian Industry Sector Sanctions to provide alignment with sanctions imposed by U.S. partners and allies, and make the EAR sanctions stronger, more effective, and easier to understand. This rule makes a clarifying change by revising the section heading to add Belarus and a reference to § 746.5(a)(1)(i). Changing the methodology for identifying items by using the HTS-6 Code and HTS Description to make it easier to align with U.S. allies' and partners' controls. Conforming changes to Supplement no. 2 to Part 746 introductory text to reflect the use of the HTS-6 Codes and HTS Descriptions and to better align this Supplement with Supplement No. 4 to Part 746 introductory text. This rule expands and clarifies Supplement no. 2 to Part 746 to strengthen the controls by specifying that the supplement includes any modified or designed “parts,” “components,” “accessories,” and “attachments” for the items identified in the table to better align the Supplement with Supplement No. 4 to Part 746. This rule also clarifies Supplement No. 2 to Part 746 introductory text to specify that the scope of the license requirement applies to an item's HTS-6 Code and describe how such information relates to other information in the Supplement's table, as well as to content describing other HTS Codes that are longer but still derived from HTS-6 Codes;
Expansion of Russian Industry Sector Sanctions under Supplement No. 4 to EAR Part 746 by adding additional items to align the sanctions with sanctions imposed by U.S. partners and allies and by making other changes to render the EAR's sanctions stronger, more effective, and easier to understand. This rule expands the controls by adding 322 HTS-6 Codes to Supplement No. 4 to Part 746. The rule removes Schedule B and Schedule B Description columns under Supplement No. 4 to Part 746 to make it easier to understand the Supplement's scope and to align the controls with those imposed by U.S. allies and partners. There is also a revision to the column used to identify the license requirement under Supplement No. 4 to Part 746 to use the HTS-6 Code column instead of the HTS Description column. There are clarifications to Supplement No. 4 to Part 746’s introductory text to specify how the HTS-6 Codes relate to other information in the table, as well as to content referring to other HTS Codes that are longer but derived from HTS-6 Codes;
Expansion of Russian Industry Sector Sanctions under Supplement No. 6 to EAR Part 746 by adding additional items to align them with sanctions imposed by U.S. partners and allies and by making other changes to render the EAR's sanctions stronger, more effective, and easier to understand;
Expansion of `Luxury Goods' Sanctions by adding additional items to Supplement No. 5 to EAR Part 746 to align them with sanctions imposed by U.S. allies and partners. This rule expands the scope of the `Luxury Goods' Sanctions by adding two hundred and seventy-six additional entries that will require a license for export or reexport to or transfers within Russia or Belarus and for designated Russian and Belarusian oligarchs and malign actors worldwide under § 746.10(a)(1) and (2); and

Alignment changes to Supplement No. 3 to EAR Part 746 (Countries Excluded from Certain License Requirements of EAR §§ 746.7 and 746.8) to add Taiwan. Pursuant to the Russia Sanctions rule, 32 countries were added to new Supplement No. 3. In March 2022, BIS published a rule that added South Korea to the list of countries, and in April 2022, it published a rule that added Iceland, Liechtenstein, Norway, and Switzerland to the list. Taiwan has implemented measures on Russia and Belarus that are substantially similar to those imposed by BIS. This rule recognizes Taiwan's implementation of such measures; BIS is adding Taiwan to Supplement No. 3 to Part 746 of the EAR with the designation of “full.”

The remaining changes include:

Clarification that EAR § 744.7 extends to transfers (in-country), in addition to exports and reexports. In § 744.7, this rule adds the term “transfer (in-country)” wherever the terms “exports” and “reexports” occur to clarify that the license requirements of this section also apply to transfers (in-country);
Clarification that the exclusion for items controlled under ECCN 5A992 or 5D992 under EAR§ 746.8 also applies to "Luxury Goods Sanctions" license requirements under EAR § 746.10(a)(1). In § 746.10 (`Luxury goods' sanctions against Russia and Belarus and Russian and Belarusian oligarchs and malign actors), this rule adds introductory text to paragraph (a) to clarify that the same exclusion for ECCNs 5A992 or 5D992 under § 746.8(a) introductory text also applies to the `luxury goods' sanctions under § 746.10(a)(1).; and
Conforming changes to the licensing policies under EAR§§ 746.5, 746.8, and 746.10 and addition of a case-by-case license review policy for applications for the disposition of items needed as part of companies curtailing or closing all operations in Russia or Belarus. In §§ 746.5(b)(1) and (2) and 746.10(b), this rule makes conforming changes to each of the licensing policies to conform to the structure of the licensing policy paragraph under § 746.8(b). This rule does so by revising each of the sentences that specify the policy of denial license review policy by adding a period and then adding a new sentence adding the same case-by-case license review policy text to §§ 746.5(b)(1) and (2) and 746.10(b), as is currently found in § 746.8(b). In §§ 746.5(b)(1) and (2), 746.8(b), and 746.10(b), this rule adds a new case-by-case license review policy for applications for the disposition of items by companies not headquartered in Country Group D:1, D:5, E:1 or E:2 that are curtailing or closing all operations in Russia or Belarus. Companies deciding to curtail or close all operations in Russia put further pressure on the Russian government and on the Russian and Belarusian defense industrial base, as their departure will hollow out both countries' industrial capacity and economy, which may lead to further degradation of their defense industrial base.

https://www.federalregister.gov/documents/2023/02/27/2023-03927/implementation-of-additional-sanctions-against-russia-and-belarus-under-the-export-administration

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February 27, 2023: 88 Fed. Reg. 12150: The Department of Commerce, Bureau of Industry and Security (BIS) amended the Export Administrations Regulations (EAR) to impose new export control measures on Iran. These measures address the use of Iranian Unmanned Aerial Vehicles (UAVs) by the Russian Federation (Russia) in its ongoing war against Ukraine, contrary to U.S. national security and foreign policy interests. Although UAVs are also known as Unmanned Aircraft Systems (UASs), for purposes of consistency with the Missile Technology Control Regime (MTCR) they are referred to as UAVs in the EAR. These amendments to the EAR target Iran's supply of UAVs to Russia to enhance Russia's defense industrial base and its military efforts against Ukraine and build on prior EAR amendments, including the addition of Iranian entities to the Entity List as Russian "military end users." Specifically, these controls

Impose license requirements for a subset of generally low-technology EAR99 items, including semiconductors that are destined for Iran, that are destined to Iran, regardless of whether a U.S. person is involved in the transaction;
Establish a new list (Supplement No. 7 to EAR Part 746) identifying these EAR99 items by HTS-6 Code to allow BIS and other U.S. government agencies to track and quantify these exports;
Create a new “Iran Foreign Direct Product (FDP) Rule” specific to Iran for items in certain categories of the Commerce Control List and EAR99 items identified in the new Supplement No. 7 to EAR Part 746; And
Revise the existing Russia/Belarus FDP rule to cover EAR99 items that have been found in UAVs containing parts and components branded U.S. or U.S.-origin (although they may not actually be U.S. branded or U.S.-origin) which will help to ensure that U.S. products are not available for shipment to Iran for use in the manufacture of UAVs being used by Russia in Ukraine.

https://www.federalregister.gov/documents/2023/02/27/2023-03930/export-control-measures-under-the-export-administration-regulations-ear-to-address-iranian-unmanned

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February 27, 2023: 88 Fed. Reg. 12170: The Department of Commerce, Bureau of Industry and Security (BIS) amended the Entity List set forth in Supplement No. 4 to EAR Part 744 by adding 10 entities under 13 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. These entities are listed on the Entity List under the destinations of Canada (2), China (5), France (1), Luxembourg (1), Netherlands (1), and Russia (3).

This final rule added the following ten entities under 13 entries to the Entity List and includes, where appropriate, aliases:

Canada:

CPUNTO Inc.; and
Electronic Network Inc.

China:

AOOK Technology Ltd.;
Beijing Ti-Tech Science and Technology Development Co.;
Beijing Yunze Technology Co., Ltd.;
China HEAD Aerospace Technology Co.; and
Spacety Co. Ltd.

France:

China HEAD Aerospace Technology Co.

Luxembourg:

Spacety Co., Ltd.

The Netherlands:

China HEAD Aerospace Technology Co.

Russia:

Dexias Industrial Products and Trade Limited Company;
Innovation and Technologies LLC; and
Promtekhkomplekt JSC.

https://www.federalregister.gov/documents/2023/02/27/2023-03929/additions-of-entities-to-the-entity-list

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February 27, 2023: 88 Fed. Reg. 12155: The Department of Commerce, Bureau of Industry and Security (BIS) amended the Entity List set forth in Supplement No. 4 to EAR Part 744 by adding seventy-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 are listed on the Entity List under the destination of Russia. This rule also revises four existing entries on the Entity List under the destination of Russia. The list is found at the attached link.

https://www.federalregister.gov/documents/2023/02/27/2023-04099/additions-of-entities-to-the-entity-list-revisions-of-entities-on-the-entity-list

Editors note: the ongoing additions to the entities list by the Department of State, Commerce, and Treasury mandates active denied party screening by exporters before engaging in export activity. Not only a best practice but a necessary export control process to keep up with the pace of changes to the DPL!

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

February 1, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed full-blocking sanctions against 22 individuals and entities across multiple countries related to a sanctions evasion network supporting Russia’s military-industrial complex. This action, taken pursuant to Executive Order (E.O.) 14024, is part of the U.S. strategy to methodically and intensively target sanctions evasion efforts around the globe, close down key backfilling channels, expose facilitators and enablers, and limit Russia’s access to the revenue needed to wage its brutal war in Ukraine. Over the last year, Treasury has sanctioned over 100 individuals and entities engaging in activity to circumvent international sanctions and export controls imposed on Russia.

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

Blats, Marks of Latvia;
Ng, Serena Bee Lin of Singapore;
Palnychenko, Igor of Cyprus;
Piflaks, Gilad of Uzbekistan and Israel;
Piflaks, Maks Borisovich of Uzbekistan;
Volfovich, Alexander of Cyprus;
Volfovich, Ariel of Cyprus;
Volfovich, Stanislav of Ukraine, Cyprus, and Israel;
Zimenkov, Igor Vladimirovich of Russia; Cyprus; Israel; and Uzbekistan; and
Zimenkov, Jonatan Russia; Italy; and Israel.

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

Asia Trading & Construction PTE LTD of Singapore;
E.S. Defense Engineering Solutions LTD of Israel;
Elektrooptika SIA of Latvia;
GBD Limited of Cyprus;
GMI Global Manufacturing & Integration LTD of Cyprus;
Kliosa Limited of Cyprus;
Mateas Limited of Cyprus;
Pitaron Limited of Cyprus;
Terra-Az Limited of Cyprus;
Texel F.C.G. Technology 2100 LTD of Israel;
U-Stone Limited EOOD of Bulgaria; and
VFC Solutions LTD of Cyprus.

https://home.treasury.gov/news/press-releases/jy1241 and https://home.treasury.gov/news/press-releases/jy1241

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February 3, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating eight senior executives of Paravar Pars Company (Paravar Pars), an Iran-based firm that was previously sanctioned by the United States and European Union for manufacturing Shahed-series unmanned aerial vehicles (UAVs) for Iran’s Islamic Revolutionary Guard Corps Aerospace Force (IRGC ASF). OFAC also identifies two Islamic Republic of Iran Navy (IRIN) vessels, the Iris Makran and the frigate Iris Dena, as property in which the Government of Iran has an interest.

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

Asadi, Mohsen of Iran;
Mohammadi, Mohammad Reza of Iran;
Mousa, Mohammad Sadegh Heidari of Iran;
Nazeri, Abualfazl of Iran;
Salehnejad, Abulfazl of Iran;
Shamsabadi, Hossein of Iran; and
Valagohar, Abulghasem of Iran.

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

Iris Dena Vessel Registration Identification IMO 4743313; and
Iris Makran Vessel Registration Identification IMO 9486910.

https://home.treasury.gov/news/press-releases/jy1246 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230203

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February 3, 2023: The Department of the Treasury's Office of Foreign Assets Control (OFAC) has published a determination pursuant to sections 1(a)(ii), 1(b), and 5 of Executive Order (E.O.) 14071 and that effective 12:01 a.m. eastern standard time on February 5, 2023, the price cap on Discount to Crude petroleum products of Russian Federation origin shall be $45 per barrel, and the price cap on Premium to Crude petroleum products of Russian Federation origin shall be $ 100 per barrel. OFAC also issued a determination pursuant to section 1(a)(ii) of Executive Order (E.O.) 14071 to implement the price cap policy for crude oil and petroleum products of Russian Federation origin. 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 petroleum products of Russian Federation origin (collectively, the "Covered Services"):

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

https://home.treasury.gov/system/files/126/price_cap_determination_20230203.pdf and https://home.treasury.gov/system/files/126/determination_eo14071_20230203.pdf

Additionally, OFAC has published Guidance on Implementation of the Price Cap Policy for Crude Oil and Petroleum Products of Russian Federation Origin.

https://home.treasury.gov/system/files/126/price_cap_guidance_combined_20230203.pdf

OFAC has issued Russia-related General License 56A and General License 57A.

Russia-related General License 56A: All transactions prohibited by (1) the determination of November 21, 2022, made pursuant to section 1(a)(ii) of Executive Order (E.O.) 14071 (“Prohibitions on Certain Services as They Relate to the Maritime Transport of Crude Oil of Russian Federation Origin”) related to the importation of crude oil, or (2) the determination of February 3, 2023, made pursuant to section 1(a)(ii) of E.O. 14071 (“Prohibitions on Certain Services as They Relate to the Maritime Transport of Petroleum Products of Russian Federation Origin”) related to the importation of petroleum products, 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.

This general license does not authorize any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR, unless separately authorized. Effective February 3, 2023, General License No. 56, dated November 22, 2022, is replaced and superseded in its entirety by this General License No. 56A.

https://home.treasury.gov/system/files/126/russia_gl56a.pdf

Russia-related General License 57A: All transactions prohibited by (1) the determination of November 21, 2022, made pursuant to section 1(a)(ii) of Executive Order (E.O.) 14071 (“Prohibitions on Certain Services as They Relate to the Maritime Transport of Crude Oil of Russian Federation Origin”) or (2) the determination of February 3, 2023, made pursuant to section 1(a)(ii) of E.O. 14071 (“Prohibitions on Certain Services as They Relate to the Maritime Transport of Petroleum Products 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.

This general license does not authorize:

(1) Any transactions related to the offloading of crude oil or petroleum products of Russian Federation origin, except for the offloading of crude oil or petroleum products that is ordinarily incident and necessary to address vessel emergencies authorized pursuant to paragraph (a) of this general license;

(2) Any transactions related to the sale of crude oil or petroleum products of Russian Federation origin; 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, unless separately authorized.

https://home.treasury.gov/system/files/126/russia_gl57a.pdf

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February 8, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Yulan Adonay Archaga Carias, a.k.a. “Alexander Mendoza” a.k.a. “Porky,” an MS-13 gang leader based in Honduras, and David Elias Campbell Licona a.k.a. “Jorge Eduardo Perez Paz,” an MS-13 associate based in Nicaragua, pursuant to transnational criminal organization authorities. Both individuals are heavily involved in drug trafficking, violence, murder, extortion, and money laundering.

The U.S. Department of State’s Transnational Organized Crime Rewards Program also announced a reward offer of up to $5 million for information leading to the arrest or conviction of Yulan Adonay Archaga Carias. Submit tips via phone, text, or through the following applications WhatsApp/Signal/Telegram at (+1-202-451-8122) or in Honduras (+504-8886-7166).

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

Archaga Carias, Yulan Adonay of Honduras; and
Campbell Licona, David Elias of Nicaragua.

https://home.treasury.gov/news/press-releases/jy1253 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230208

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February 8, 2023: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing one Russia-related Frequently Asked Question (1113).

Question 1113: If a decedent’s estate includes securities issued by non-blocked Russian entities, do the new investment prohibitions in Executive Order (E.O.) 14066, E.O. 14068, or E.O. 14071 prohibit the transfer of such securities, through inheritance, to the relevant beneficiary of the decedent’s estate?

Answer: No. U.S. persons, including U.S. financial institutions, may transfer securities issued by non-blocked Russian entities from a decedent’s estate to the account of a relevant beneficiary or beneficiaries, including a successor entity (e.g., a family trust), provided such transfers (i) are part of the ordinary course administration of the decedent’s estate, (ii) do not involve an exchange for value, and (iii) have no other sanctions nexus (including the involvement of blocked persons).

Please note, however, that blocked securities in a decedent’s estate must remain blocked. The administration of a decedent’s estate requiring the transfer of blocked securities would require a specific license from OFAC.

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1113 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230208

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February 9, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued Syria General License 23 "Authorizing Transactions Related to Earthquake Relief Efforts in Syria." Syria General License (GL) 23 authorizes for 180 days all transactions related to earthquake relief that would be otherwise prohibited by the Syrian Sanctions Regulations (SySR).

Syria General License 23: All transactions related to earthquake relief efforts in Syria that would otherwise be prohibited by the Syrian Sanctions Regulations, 31 CFR part 542 (SySR), are authorized through 12:01 p.m. eastern daylight time, August 8, 2023. This authorization includes the processing or transfer of funds on behalf of third-country persons to or from Syria in support of the transactions. U.S. financial institutions and U.S. registered money transmitters may rely on the originator of a funds transfer with regard to compliance, provided that the financial institution does not know or have reason to know that the funds transfer is not in compliance with this general license.

This general license does not authorize: (1) Any transactions prohibited by section 542.208 of the SySR (prohibiting importation into the United States of petroleum or petroleum products of Syrian origin); or (2) Any transactions involving any person whose property and interests in property are blocked pursuant to the SySR, other than persons who meet the definition of the term Government of Syria, as defined in section 542.305(a) of the SySR, unless separately authorized. Nothing in this general license relieves any person from compliance with any other Federal laws or requirements of other Federal agencies.

https://home.treasury.gov/news/press-releases/jy1261 and https://home.treasury.gov/system/files/126/syria_gl23.pdf

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February 9, 2023: The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC), in coordination with the United Kingdom, is designating seven individuals who are part of the Russia-based cybercrime gang Trickbot. This action represents the very first sanctions of their kind for the U.K. and results from a collaborative partnership between OFAC and the U.K.’s Foreign, Commonwealth, and Development Office; National Crime Agency; and His Majesty’s Treasury to disrupt Russian cybercrime and ransomware.

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

Iskritsky, Mikhail of Russia;
Karyagin, Valentin Olegovich of Russia;
Kovalev, Vitaly Nikolayevich of Russia;
Mikhailov, Maksim Sergeevich of Russia;
Pleshevskiy, Dmitry of Russia;
Sedletski, Valery of Russia; and
Vakhromeyev, Ivan Vasilyevich of Russia.

https://home.treasury.gov/news/press-releases/jy1256 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230209 and https://www.gov.uk/government/news/uk-cracks-down-on-ransomware-actors

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February 9, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned nine entities across multiple jurisdictions that have played a critical role in the production, sale, and shipment of hundreds of millions of dollars worth of Iranian petrochemicals and petroleum to buyers in Asia. Treasury is targeting six Iran-based petrochemical manufacturers or their subsidiaries and three firms in Malaysia and Singapore involved in facilitating the sale and shipment of petroleum and petrochemicals on behalf of Triliance Petrochemical Co. Ltd., which OFAC designated on January 23, 2020, for facilitating the sale of Iranian petroleum products from the National Iranian Oil Company (NIOC).

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

Amir Kabir Petrochemical Company of Iran;
Asia Fuel PTE. LTD., of Singapore;
Laleh Petrochemical Company of Iran;
Marun Sepehr Ofogh Company of Iran;
Marun Supplemental Industries Company of Iran;
Marun Tadbir Tina Company of Iran;
Sense Shipping And Trading SDN. BHD., of Malaysia;
Simorgh Petrochemical Company of Iran; and
Unicious Energy PTE. LTD., of Singapore.

https://home.treasury.gov/news/press-releases/jy1257 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230209

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

Iskritsky, Mikhail of Russia;
Karyagin, Valentin Olegovich of Russia;
Kovalev, Vitaly Nikolayevich of Russia;
Mikhailov, Maksim Sergeevich of Russia;
Pleshevskiy, Dmitry of Russia;
Sedletski, Valery of Russia;
Vakhromeyev, Ivan Vasilyevich of Russia.

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

Amir Kabir Petrochemical Company of Iran;
Asia Fuel PTE. LTD. of Singapore;
Laleh Petrochemical Company of Iran;
Marun Sepehr Ofogh Company of Iran;
Marun Supplemental Industries Company of Iran;
Marun Tadbir Tina Company of Iran;
Sense Shipping And Trading SDN. BHD of Malaysia;
Simorgh Petrochemical Company of Iran; and
Unicious Energy PTE. LTD., of Singapore.

https://home.treasury.gov/news/press-releases/jy1257 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230209

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February 10, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned five current or former Bulgarian government officials — Rumen Stoyanov Ovcharov (Ovcharov), Aleksandar Hristov Nikolov (Nikolov), Ivan Kirov Genov (Genov), Nikolay Simeonov Malinov (Malinov), and Vladislav Ivanov Goranov (Goranov) — for their extensive involvement in corruption in Bulgaria. OFAC also designated four entities owned or controlled by Malinov, as well as an entity owned or controlled by Goranov. These individuals and entities are being 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 worldwide.

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

Genov, Ivan Kirov of Bulgaria;
Goranov, Vladislav Ivanov of Bulgaria;
Malinov, Nikolay Simeonov of Bulgaria;
Nikolov, Aleksandar Hristov of Bulgaria; and
Ovcharov, Rumen Stoyanov of Bulgaria.

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

Inter Trade 2021 EOOD of Bulgaria;
MS Konsult 2016 EOOD of Bulgaria;
Russophiles For The Revival Of The Fatherland Political Party of Bulgaria;
Russophiles National Movement of Bulgaria; and
Trilemma Consulting LTD EOOD of Bulgaria.

https://home.treasury.gov/news/press-releases/jy1264 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230210

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February 21, 2023: The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) issued an OFAC Compliance Communique: Guidance on Authorized Transactions Related to Earthquake Relief Efforts in Syria in response to questions from the NGO community and the general public on how to provide assistance related to earthquake relief to Syria while complying with OFAC sanctions.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230221 and https://home.treasury.gov/system/files/126/syria_earthquake_relief_compliance_guidance.pdf

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February 22, 2023: The U.S. Department of Treasury’s Office of Foreign Assets Control (OFCA) added the following individuals and organizations of the Sinaloa Cartel to the Specially Designated Nationals (SDN) list.

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

Arredondo Beltran of Mexico;
Flores Madrid of Mexico;
Machado Torres of Mexico;
Zamudio Ibarra of Mexico;
Zamudio Lerma of Mexico; and
Zamudio Lerma of Mexico.

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

Aceros Y Refacciones Del Humaya, S.A. DE C.V., of Mexico;
Farmacia Ludim of Mexico;
Grupo Zait, S.A. DE C.V., of Mexico;
Inmobiliaria Del Rio Humaya, S.A. DE C.V., of Mexico;
Operadora Del Humaya, S.A. DE C.V., of Mexico; and
Operadora Parque Alamedas, S. DE R.L. DE C.V., of Mexico.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230222

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February 24, 2023: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 8F, "Authorizing Transactions Related to Energy," General License 13D, "Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024," General License 60, "Authorizing the Wind-Down and Rejection of Transactions Involving Certain Entities Blocked on February 24, 2023,", and General License 61, "Authorizing Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Certain Entities Blocked on February 24, 2023."

Russia-related General License 8FL: 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) Bank Zenit Public Joint Stock Company;

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

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

(11) the Central Bank of the Russian Federation.

https://home.treasury.gov/system/files/126/russia_gl8f.pdf

General License 13D: 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 daylight time, June 6, 2023.

https://home.treasury.gov/system/files/126/russia_gl13d.pdf

General License 60: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind-down of transactions involving one or more of the following blocked persons (collectively, “the Blocked Entities”) are authorized through 12:01 a.m. eastern daylight time, May 25, 2023, provided that any payment to a Blocked Entity is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR):

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

(2) Bank Zenit Public Joint Stock Company;

(3) Joint Stock Commercial Bank Primorye;

(4) Public Joint Stock Company Bank Uralsib;

(5) Joint Stock Company Commercial Bank Lanta Bank;

(6) SDM-Bank Public Joint Stock Company;

(7) Public Joint Stock Company Stock Commercial Bank Metallurgical Investment Bank;

(8) Public Joint Stock Company Ural Bank for Reconstruction And Development;

(9) Credit Bank of Moscow Public Joint Stock Company; or

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

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 of the Blocked Entities as an originating, intermediary or beneficiary financial institution through 12:01 a.m. eastern daylight time, May 25, 2023.

https://home.treasury.gov/system/files/126/russia_gl60.pdf

General License 61: 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 the following blocked persons (“covered debt or equity”) to a non-U.S. person are authorized through 12:01 a.m. eastern daylight time, May 25, 2023:

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

(2) Bank Zenit Public Joint Stock Company;

(3) Public Joint Stock Company Bank Uralsib;

(4) Joint Stock Company Commercial Bank Lanta Bank;

(5) SDM-Bank Public Joint Stock Company;

(6) Public Joint Stock Company Stock Commercial Bank Metallurgical Investment Bank; 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.

Except as provided in paragraph (e) of this general license, 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, February 24, 2023, are authorized through 12:01 a.m. eastern daylight time, May 25, 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, February 24, 2023, 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, May 25, 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_gl61.pdf

Additionally, OFAC issued five associated Frequently Asked Questions (1114-1118).

Question 1114: What actions were taken on February 24, 2023 related to the metals and mining sector of the Russian Federation economy?

Answer: On February 24, 2023, the Director of OFAC, in consultation with the Department of State, issued a sectoral determination pursuant to Executive Order (E.O.) 14024 that authorizes the imposition of economic sanctions on any person determined to operate or have operated in the metals and mining sector of the Russian Federation economy. This sectoral determination is effective February 24, 2023. Also, on February 24, 2023, OFAC designated certain entities for operating in the metals and mining sector of the Russian Federation economy. The U.S. government may, as appropriate, impose sanctions on additional persons determined pursuant to E.O. 14024 to operate or to have operated in this sector. For further information, please see FAQ 1115.

Question 1115: For the purposes of the determination of February 24, 2023 made pursuant to Executive Order (E.O.) 14024, what is meant by the term “metals and mining sector of the Russian Federation economy”?

Answer: For the purposes of the determination of February 24, 2023, made pursuant to E.O. 14024, OFAC anticipates publishing regulations defining the term “metals and mining sector of the Russian Federation economy” to include any act, process, or industry of extracting, at the surface or underground, ores, coal, precious stones, or any other minerals or geological materials in the Russian Federation, or any act of procuring, processing, manufacturing, or refining such geological materials, or transporting them to, from, or within the Russian Federation. This is the definition OFAC used to define the same term in the Ukraine/Russia-related Sanctions Regulations (see 31 CFR 589.325).

Question 1116: Does the determination of February 24, 2023, made pursuant to Executive Order (E.O.) 14024 with regard to the metals and mining sector of the Russian Federation economy mean that all persons that operate or have operated in this sector 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 on any person determined to operate or have operated in the metals and mining sector of the Russian Federation economy.

Certain additional sanctions may apply to dealings in the metals and mining sector of the Russian Federation economy. For example, E.O. 14071 prohibits U.S. persons from new investments in the Russian Federation, including in the metals and mining sector. In addition, certain goods produced by the metals and mining sector of the Russian Federation economy may be prohibited from importation into the United States pursuant to E.O. 14068, such as non-industrial diamonds and gold of Russian Federation origin. For more information about prohibitions related to non-industrial diamonds, see Frequently Asked Questions (FAQs) 1022, 1023, 1024, 1026, and 1027. For more information about prohibitions related to gold, see FAQs 1029 and 1070.

Question 1117: My company provides goods or services to, or engages in trade with, persons that operate or have operated in the metals and mining sector of the Russian Federation economy. Does my company risk being sanctioned by OFAC?

Answer: The determination made on February 24, 2023, pursuant to Executive Order (E.O.) 14024, authorizes sanctions on any person determined to operate or have operated in the metals and mining sector of the Russian Federation economy. Non-U.S. persons may also be exposed to sanctions for activities with persons blocked pursuant to E.O. 14024 (see FAQ 980), including persons blocked following a determination that such persons operate or have operated in the metals and mining sector.

However, OFAC does not intend to target persons for operating in the metals and mining sector where the provision of goods or services is solely for the safety and care of personnel, protection of human life, prevention of accidents or injuries, maintenance or repair necessary to avoid environmental or other significant damage, or activities related to environmental mitigation or remediation. Examples of such goods include personal protective equipment, safety devices, ventilation systems, and alarm systems; examples of such services include rescue and accident response services, cleaning, safety inspections, and services necessary for use of the goods described above.

In addition, non-U.S. persons generally do not risk exposure to U.S. blocking sanctions under E.O. 14024 for engaging in transactions with blocked persons, including in the metals and mining sector, where those transactions would not require a specific license if engaged in by a U.S. person. For example, non-U.S. persons generally do not risk exposure to U.S. blocking sanctions for engaging in transactions in the metals and mining sector if such transactions would be authorized for U.S. persons by General License (GL) 8F (authorizing certain energy-related transactions) or by GL 6C (authorizing certain transactions related to the production, manufacturing, sale, transport, or provision of medicine or medical devices, including certain industrial isotopes used in nuclear medicine, among other things).

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

Answer: No. GL 13D authorizes U.S. persons, or entities owned or controlled, directly or indirectly, by a U.S. person, to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations, or certifications involving 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, Russia-related Directive 4 Entities) that would otherwise be prohibited by Russia-related Directive 4 under Executive Order 14024 (the Russia-related Sovereign Transactions Directive ), provided such transactions are ordinarily incident and necessary to such persons’ day-to-day operations in the Russian Federation. This so-called “exit tax” is not considered ordinarily incident and necessary to day-to-day operations in the Russian Federation and, thus, not authorized under GL 13D. Pursuant to the Russia-related Sovereign Transactions Directive, U.S. persons are prohibited from engaging in direct or indirect transactions involving any Russia-related Directive 4 Entity. Please see Frequently Asked Question 1002. In light of the potential for the payment of this so-called “exit tax” to involve a Russia-related Directive 4 Entity, U.S. persons whose divestment will involve an “exit tax” payment may require a license from OFAC. Such persons may submit a request for a specific license with OFAC’s Licensing Division online at http://www.home.treasury.gov/policy-issues/financial-sanctions/ofac-license-application-page. OFAC will evaluate such requests on a case-by-case basis.

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2023-02-24

OFAC also published a Determination Pursuant to Section 1(a)(i) of Executive Order 14024. Section 1(a)(i) 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 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, I hereby determine that section 1(a)(i) of E.O. 14024 shall apply to the metals and mining sector of the Russian Federation economy. Any person determined, pursuant to section 1(a)(i) of E.O. 14024, to operate or have operated in this sector shall be subject to sanctions pursuant to section 1(a)(i). This determination shall take effect on February 24, 2023.

https://home.treasury.gov/system/files/126/determination_02242023_eo14024.pdf

In addition, OFAC has added 200 Russian individuals and entities to the Specially Designated Nationals List. The list of persons and entities is found in the link below.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230224

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February 28, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Jesus Cisneros Hernandez, a Mexican arms trafficker, pursuant to Executive Order (E.O.) 14059 for having provided, or have attempted to provide, financial, material, or technological support for, or goods or services in support of a person designated under E.O. 14059, namely, the Cartel de Jalisco Nueva Generacion (CJNG). CJNG is a violent Mexico-based organization that traffics a significant proportion of the illicit fentanyl and other deadly drugs that enter the United States. This action was taken in coordination with the Government of Mexico and is the result of OFAC’s collaboration with the Bureau of Alcohol, Tobacco, Firearms, and Explosives.

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

Cisneros Hernandez, Jesus of Mexico.

https://home.treasury.gov/news/press-releases/jy1310 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230228

Fines and Penalties

Editors note: Fines and Penalties are listed by date. This month February 27, 2023, held the trifecta of export penalties. 3D Systems Corporation entered into a consent agreement with the Department of State for violations of the ITAR, a settlement agreement with the Department of Commerce for violations of the EAR, and a settlement with the Department of Justice for violations of the False Claims Act. The charges are described on pages 35 and 36.

February 2, 2023: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has announced that Dotphins LLC of North Miami, Florida, has agreed to a Settlement Agreement under which its export privileges will be denied for two years (such denial shall be suspended during this two-year probationary period and thereafter waived if Dotphins has not committed any further violations) and it will be required to complete export control training to settle charges that it engaged in two violations of EAR § 764.2(a) - Engaging in Prohibited Conduct. Specifically, on two occasions on or about March 28, 2016, and on or about December 1, 2016, Dotphins engaged in conduct prohibited by the EAR when it shipped red dot scopes from the United States destined to Austria and Switzerland without the required BIS licenses. The red dot scopes, which are subject to the EAR, were then classified under Export Control Classification Number 0A987.c, controlled on crime control grounds, and valued in total at approximately $199.26. Pursuant to Section 762.7 of the Regulations, a license was (and remains) required for the export of these items.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1456-e2796/file

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February 3, 2023: 88 Fed. Reg. 7394: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Michael Cox for ten years until May 18, 2031. On May 18, 2021, in the U.S. District Court for the Western District of Pennsylvania, Michael Cox (“Cox”) was convicted of violating 18 U.S.C. 371. Specifically, Cox was convicted of conspiring to export defense articles, specifically Night Sighting Equipment, to Ukraine without the required licenses. As a result of his conviction, the Court sentenced Cox to 32 months of confinement, three years of supervised release, and $100 special assessment. BIS has also revoked any BIS-issued licenses in which Cox had an interest at the time of his conviction.

https://www.federalregister.gov/documents/2023/02/03/2023-02321/in-the-matter-of-michael-cox-1513-e-muir-avenue-hazel-park-mi-48030-2671-order-denying-export

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February 3, 2023: 88 Fed. Reg. 7395: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Shirley Trinity Inzunza for eight years until January 22, 2026. On January 22, 2018, in the U.S. District Court for the District of Arizona, Shirley Trinity Inzunza (“Inzunza”) was convicted of violating Section 38 of the Arms Export Control Act (22 U.S.C 2778) (“AECA”). Specifically, Inzunza was convicted of knowingly and willfully attempting to export and causing to be exported from the United States to Mexico 10,000 23 rounds of .223 caliber ammunition, which was designated as a defense article 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.

https://www.federalregister.gov/documents/2023/02/03/2023-02323/in-the-matter-of-shirley-trinity-inzunza-6767-n-7th-street-unit-220-phoeniz-az-85014-order-denying

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February 3, 2023: 88 Fed. Reg. 7396: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Amin Yousefi Jam for seven years until November 17, 2028. On November 17, 2021, in the U.S. District Court for the Eastern District of Michigan, Amin Yousefi Jam (“Amin Jam”) was convicted of violating 18 U.S.C. 371. Specifically, Amin Jam was convicted of conspiring to export goods from the United States to Iran through the United Arab Emirates without having first obtained the required licenses from the Office of Foreign Assets Control. As a result of his conviction, the Court sentenced Amin Jam to time served, one year of supervised release, and a $100 assessment.

https://www.federalregister.gov/documents/2023/02/03/2023-02324/in-the-matter-of-amin-yousefi-jam-7165-yonge-street-markham-ontario-canada-l3t-0c9-order-denying

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February 3, 2023: 88 Fed. Reg. 7397: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Josef Koyshman for ten years until February 6, 2030. On February 6, 2020, in the U.S. District Court for the District of Columbia, Josef Koyshman (“Koyshman”) was convicted of violating Section 38 of the Arms Export Control Act (22 U.S.C 2778) (“AECA”). Specifically, Koyshman was convicted of willfully exporting, attempting to export, and attempting to cause the export, from the United States to Hong Kong, one (1) High Power Advanced Laser-Aiming System and one (1) AN/PRC-152 Handheld Radio and one (1) AN/PVS-31A Binocular Night Vision Goggles, all of which were designated as defense articles on the United States Munition List, without first obtaining from the U. S. Department of State a license for such export or written approval. As a result of his conviction, the Court sentenced Koyshman to 12 months and one day in prison, 24 months of supervised release and a $100 assessment.

https://www.federalregister.gov/documents/2023/02/03/2023-02326/in-the-matter-of-josef-koyshman-17410-fairland-ct-granada-hills-ca-91344-order-denying-export

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February 3, 2023: 88 Fed. Reg. 7398: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Victor Anthony Bocanegra for ten years until March 3, 2030. On March 3, 2020, in the U.S. District Court for the District of Arizona, Victor Anthony Bocanegra (“Bocanegra”) was convicted of violating 18 U.S.C. 554(a). Specifically, Bocanegra was convicted of smuggling from the U.S. to Mexico one (1) Barrett .50 caliber, semi-automatic rifle bearing the serial number #AA007434 in violation of 18 U.S.C. 554. As a result of his conviction, the Court sentenced Bocanegra to 37 months confinement with credit for time served, two years of supervised release, and a $100 assessment.

https://www.federalregister.gov/documents/2023/02/03/2023-02329/in-the-matter-of-victor-anthony-bocanegra-6767-n-7th-street-unit-220-phoenix-az-85014-order-denying

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February 3, 2023: 88 Fed. Reg. 7399: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Maria Guadalupe Pina for eight years until February 2, 2029. On February 2, 2021, in the U.S. District Court for the Southern District of Texas, Maria Guadalupe Pina (“Pina”) was convicted of violating 18 U.S.C. 554(a). Specifically, Pina was convicted of fraudulently and knowingly exporting and sending, and attempting to export and send, from the United States to Mexico twenty (20) full automatic lower parts kits for M-16 rifles and twenty (20) pistol grips for M-16 and AR-type rifles. As a result of her conviction, the Court sentenced Pina to 30 months in prison, three years of supervised release, and a $100 court assessment.

https://www.federalregister.gov/documents/2023/02/03/2023-02322/in-the-matter-of-maria-guadalupe-pina-807-guadalupe-st-laredo-tx-78040-order-denying-export

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February 3, 2023: 88 Fed. Reg. 7685: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Obaidullah Syed for ten years until May 17, 2032. On May 17, 2022, in the U.S. District Court for the Northern District of Illinois, Obaidullah Syed (“Syed”) was convicted of violating 18 U.S.C. 371. Specifically, Syed was convicted of conspiring to export computers, computer systems, and associated equipment from the United States to the Pakistan Atomic Energy Commission without a license from the U.S. Department of Commerce, in violation of 18 U.S.C. 371. As a result of his conviction, the Court sentenced Syed to one year and one day in prison, one year and one day of supervised release, an assessment of $100, and forfeiture in the amount of $247,000.

https://www.federalregister.gov/documents/2023/02/06/2023-02397/in-the-matter-of-obaidullah-syed-12-cottonwood-road-northbrook-il-60659-order-denying-export

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February 7, 2023: A federal court in New York unsealed an indictment charging a citizen of the Russian Federation and legal permanent resident of the United States with participating in a scheme to make over $4 million in U.S. dollar payments to maintain four real properties in the United States that were owned by Viktor Vekselberg, a sanctioned oligarch, as well as to attempt to sell two of those properties.

According to court documents, Vladimir Voronchenko, aka Vladimir Vorontchenko, 70, of Moscow, Russia; New York, New York; Southampton, New York; and Fisher Island, Florida, is additionally charged with contempt of court in connection with his flight from the United States following receipt of a grand jury subpoena requiring his personal appearance and testimony.

According to allegations in the indictment, Voronchenko, who resided at various times in New York, Florida, and Russia, held himself out as a successful businessman, art collector, and art dealer, and as a close friend and business associate of Vekselberg.

https://www.justice.gov/opa/pr/associate-sanctioned-oligarch-indicted-sanctions-evasion-and-money-laundering

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February 9, 2023: Kambiz Attar Kashani, 44, a dual citizen of the United States and Iran, was sentenced to 30 months in prison for conspiring to illegally export U.S. goods and technology to end users in Iran, including the Central Bank of Iran, in violation of the International Economic Powers Act (IEEPA). The Central Bank of Iran is an Iranian government agency that, according to the U.S. government, has materially supported Lebanese Hizballah and the Qods Force of Iran’s Islamic Revolutionary Guards Corps, both designated terrorist organizations.

According to court documents, between February 2019 and June 2021, Kashani and his co-conspirators used two front companies in the United Arab Emirates (UAE) to illegally procure electronic goods and technology from multiple U.S. technology companies, including one located in Brooklyn, for end users in Iran, including the Central Bank of Iran. Certain goods and technology Kashani and his co-conspirators transshipped were controlled by the U.S. government for national security and anti-terrorism reasons. Kashani and his co-conspirators intentionally concealed from the U.S. companies that they intended to send the items to Iran, falsely claiming that the UAE companies would be the ultimate end users. By providing the Central Bank of Iran and other end users in Iran with sophisticated, top-tier U.S. electronic equipment and software, Kashani and his co-conspirators enabled the Iranian banking system to operate more efficiently, effectively and securely.

https://www.justice.gov/opa/pr/us-citizen-sentenced-conspiring-provide-electronic-equipment-and-technology-government-iran

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February 3, 2023: 88 Fed. Reg. 9429: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Arash Yousefi Jam for seven years until October 14, 2028. On October 14, 2021, in the U.S. District Court for the Eastern District of Michigan, Arash Yousefi Jam (“Arash Jam”) was convicted of violating 18 U.S.C. 371. Specifically, Arash Jam was convicted of conspiring to export goods from the United States to Iran through the United Arab Emirates without having first obtained the required licenses from the Office of Foreign Assets Control. As a result of his conviction, the Court sentenced Arash Jam to time served, one year of supervised release, and a $100 assessment.

https://www.federalregister.gov/documents/2023/02/14/2023-03103/in-the-matter-of-arash-yousefi-jam-24-great-heron-court-king-city-ontario-canada-order-denying

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February 3, 2023: 88 Fed. Reg. 9475: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Luc Edmond for five years until February 19, 2025. On February 19, 2020, Edmond was convicted of violating 18 U.S.C. 554(a) for knowingly and willfully attempting to smuggle from the U.S. to Canada a Sig Sauer P228 pistol kit and an AR-15 300 AAC 7.5” pistol kit, which were designated as defense articles on the United States Munitions List, without first obtaining the required license or written authorization from the Department of State. As a result of his conviction, the Court sentenced Emond to 10 months in prison, a fine of $3,000, and a $100 special assessment.

https://www.federalregister.gov/documents/2023/02/14/2023-03104/in-the-matter-of-luc-emond-9300-justine-street-montreal-quebec-h1j2p2-canada-order-denying-export

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February 3, 2023: 88 Fed. Reg. 10286: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Shuren Qin for ten years until September 8, 2031. On September 8, 2021, Qin was convicted of violating the International Emergency Economic Powers Act (50 U.S.C. 1701, et seq.) (“IEEPA”), 8 U.S.C. 1001, and 18 U.S.C. 554(a), among other violations. Specifically, Qin was convicted of conspiring to unlawfully export items from the United States to Northwestern Polytechnical University, an entity on the Department of Commerce's Entity List, without first obtaining the required export licenses; two counts of making false statements to law enforcement agents regarding his customers and the types of parts he caused to be exported from the United States to China; and two counts of smuggling hydrophones from the United States to China. As a result of his conviction, the Court sentenced Qin to 24 months of confinement, two years of supervised release, a $1,000 assessment, and a $20,000 criminal fine.

https://www.federalregister.gov/documents/2023/02/17/2023-03420/in-the-matter-of-shuren-qin

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February 3, 2023: 88 Fed. Reg. 10287: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Jorge Martin Dorame, Jr. for five years until January 26, 2026. On January 26, 2021, Dorame was convicted of violating 18 U.S.C. 554(a) for smuggling and attempting to smuggle from the United States to Mexico weapons, weapons components, and weapons parts, specifically: four Matrix Arms AR-15 80% lower receivers, two Tapco AR T6 collapsible stocks, twenty Browning 1919 A4 .308 WIN caliber ammunition links, five Apex SAW/M249 M27 5.56x45 caliber ammunition links, two AR-15 compensators, three Brownells AR-15 H3 carbine buffers, five DPMS AR-15 hammer springs, five Magpul MOE AR-15 trigger guards, five DPMS AR-15 trigger springs, one DPMS AR-15 buffer tube, one Brownells M 16 bolt carrier group, two Brownells AR-15 receiver end plates, two Brownells AR-15 charging handles, three DPMS AR-15 receiver extension castle nuts, five Luth-AR M-16 auto sears with springs, and six Luth-AR M-16 disconnectors. As a result of his conviction, the Court sentenced Dorame to 60 months of probation and a $100 special assessment.

https://www.federalregister.gov/documents/2023/02/17/2023-03445/in-the-matter-of-jorge-martin-dorame-jr-4540-s-rural-road-apt-g8-tempe-az-85282-order-denying-export

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February 3, 2023: 88 Fed. Reg. 10288: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Rafael Palomares, Jr. for ten years until May 13, 2031. On May 31, 2021, Palomares was convicted of violating section 38 of the Arms Export Control Act (22 U.S.C 2778) (“AECA”) for knowingly and willfully agreeing to conspire with others to export firearms from the United States to Mexico without the required licenses. As a result of his conviction, the Court sentenced Palomares to 45 months of confinement with credit for time served, three years of supervised release, and a $100 assessment.

https://www.federalregister.gov/documents/2023/02/17/2023-03450/in-the-matter-of-rafael-palomares-jr-inmate-number-16266-508-fci-florence-federal-correctional

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February 3, 2023: 88 Fed. Reg. 10289: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Carlos Francisco Rodriguez for seven years until November 3, 2028. On November 3, 2028, Rodriguez was convicted of violating 18 U.S.C. 554(a) for knowingly and willfully attempting to smuggle from the U.S. to Mexico approximately 15,923 rounds of ammunition of assorted calibers. As a result of his conviction, the Court sentenced Francisco Rodriguez to 24 months in prison, 3 years of supervised release, and a $100 special assessment.

https://www.federalregister.gov/documents/2023/02/17/2023-03448/in-the-matter-of-carlos-francisco-rodriguez-4902-marcella-ave-apartment-25-laredo-tx-78041-6315

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February 9, 2023: Todd Coleman of Massachusetts was sentenced to 33 months in prison for his role in a scheme in which he accepted bribes from an Afghan company in exchange for helping it deceive the U.S. military into awarding at least ten contracts at inflated values.

According to court documents, Coleman was an analyst at a U.S. company who was deployed to Afghanistan in 2011 and 2012 to evaluate bids for U.S.-funded reconstruction contracts awarded by the U.S. military. At that time, Coleman and Orlando Clark, a manager of reconstruction projects at a different U.S. company who was also deployed to Afghanistan, received approximately $400,000 in bribes from an Afghan company. In return, Coleman and Clark assisted the company in obtaining millions of dollars in contracts that involved the construction of an Afghan police station and a security checkpoint for U.S. forces.

To conceal their conduct, Coleman and Clark registered fictitious companies in the State of Georgia and opened bank accounts to which bribes were sent via wire transfers from Afghanistan. Coleman and Clark also created false invoices to make it appear as though they were involved in a car-exporting business in the United Arab Emirates. In reality, Coleman and Clark used the bribe payments to enrich themselves by purchasing personal items, such as a BMW. During the scheme, Coleman and Clark also traveled to the United Arab Emirates to receive cash bribes, which they smuggled into the United States without declaring the currency.

On Jan. 4, Clark pleaded guilty to conspiracy to commit bribery of a public official and (in an unrelated scheme) conspiracy to commit visa fraud. He is scheduled to be sentenced on April 12 and faces a maximum penalty of five years in prison on each charge. 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/man-sentenced-scheme-involving-us-funded-military-contracts

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February 17, 2023: An indictment was unsealed in the District of Connecticut charging Glenn Oztemel, 64, of Westport, Connecticut, and a foreign national with conspiracy, multiple counts of violating the Foreign Corrupt Practices Act (FCPA), and money laundering in connection with an alleged scheme to pay bribes to Brazilian officials to win contracts with Brazil’s state-owned and state-controlled energy company, Petróleo Brasileiro S.A. – Petrobras (Petrobras).

According to court documents, Oztemel worked as a senior oil and gas trader at two Connecticut-based trading companies (Trading Company #1 and Trading Company #2). Eduardo Innecco, 73, a dual Brazilian and Italian citizen, worked as an oil and gas broker and agent for Trading Company #1 and Trading Company #2 in Brazil. Between approximately mid-2010 and continuing into 2018, Oztemel, Innecco, and others allegedly paid bribes to Petrobras officials for their assistance in helping Trading Company #1 and Trading Company #2 obtain and retain business with Petrobras, including by providing Oztemel, Innecco, and others with confidential information regarding Petrobras’ fuel oil business. As alleged, Oztemel and his co-conspirators caused Trading Company #1 and Trading Company #2 to make corrupt payments – disguised as purported consulting fees and commissions – to Innecco, knowing that Innecco would pay a portion of those funds to Brazilian officials as bribes. To conceal the scheme, Oztemel, Innecco, and their co-conspirators allegedly used coded language to refer to the bribes and communicated using personal email accounts, fictitious names, and encrypted messaging applications.

Oztemel and Innecco are each charged with conspiracy to violate the FCPA, conspiracy to commit money laundering, three counts of violating the FCPA, and two counts of money laundering. They face up to five years in prison for each of the bribery conspiracy and bribery charges, and up to 20 years in prison for each of the money laundering conspiracy and money laundering charges.

https://www.justice.gov/opa/pr/senior-oil-and-gas-trader-and-brazil-based-intermediary-charged-bribery-and-money-laundering

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February 24, 2023: Pursuant to Section 766.24 of the Export Administration Regulations ( “EAR”), the Bureau of Industry and Security (“BIS”), U.S. Department of Commerce, through its Office of Export Enforcement (“OEE”), has requested the issuance a Temporary Denial Order of temporarily denying, for a period of 180 days, the export privileges under the Regulations of Ilya Balakaev and Radiotester OOO a/k/a Radiotester LLC or Russia, for the unauthorized export of controlled counterintelligence items to Russia and North Korea.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1467-e2806/file

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February 24, 2023: A five-count indictment was unsealed in federal court in Brooklyn, New York, charging Ilya Balakaev with various charges related to smuggling devices commonly used in counterintelligence operations out of the U.S. to Russia for the benefit of the Federal Security Service of the Russian Federation (FSB) and Democratic People’s Republic of Korea (“DPRK” or “North Korea”).

As alleged, between 2017 and the present, the defendant Ilya Balakaev entered into multiple contracts through his company Radiotester LLC with the FSB—the principal intelligence and security agency of the Russian government—to repair spectrum analyzers and signal generators. The devices that the defendant was tasked to repair were frequently used as part of counterintelligence operations to sweep for surveillance bugs and to transmit covert communications. Because the devices were not readily available in Russia, the defendant created a network of individuals in the U.S. to assist him in purchasing the equipment in the U.S., which he used to repair the FSB devices in violation of U.S. sanctions.

The defendant worked closely with Russian government officials from FSB Center 8’s Military Unit 43753, the agency responsible for Russia’s communication security and cryptology. In furtherance of his scheme, the defendant entered into at least ten contracts with FSB Military Unit 43753, purchased approximately 43 devices in the U.S., and traveled to the U.S. approximately 14 times in the span of approximately four years.

In addition to his scheme to evade Russian sanctions, the defendant also provided U.S. technology to a North Korean government official in violation of U.S. sanctions against North Korea. The defendant contracted with the First Secretary of the North Korean Embassy to the Russian Federation, based in Moscow, to obtain hazardous gas detectors and software from the U.S. for the benefit of the North Korean government.

https://www.justice.gov/usao-edny/pr/russian-national-charged-supplying-us-technology-russian-and-north-korean-governments

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February 24, 2023: From the outset of Russia’s unprovoked, full-scale invasion of Ukraine one year ago, the Department of Justice has prioritized enforcing the sweeping sanctions, export restrictions, and economic countermeasures that the United States has imposed alongside our global partners. The Department continues that work by actions in two separate federal cases to disrupt sanctions evasion and smuggling networks supporting the Russian regime.

The U.S. Attorney for the Southern District of New York filed a civil forfeiture complaint against six real properties located in New York, New York; Southampton, New York; and Fisher Island, Florida, worth approximately $75 million. The complaint alleges that the properties beneficially owned by Russian oligarch Viktor Vekselberg are the proceeds of sanctions violations and were involved in international money laundering transactions. The case arises in the wake of the indictment of Vekselberg’s alleged strawman, Vladimir Voronchenko, a fugitive previously charged in the Southern District of New York. In the Eastern District of New York, a five-count indictment (see reference above) was unsealed, charging Ilya Balakaev, 47, of Moscow, with various offenses related to a years-long scheme to illegally smuggle sensitive devices used in counterintelligence operations from the United States to Russia for the benefit of the Federal Security Service of the Russian Federation (FSB), the principal intelligence and security agency of the Russian government. Balakaev is further charged with illegally exporting a gas detector and related software from the United States to Russia for the benefit of the Democratic People’s Republic of Korea (DPRK or North Korea). Concurrent with this action in the Eastern District of New York, the Department of Commerce separately issued a Temporary Denial Order denying the export privileges of Balakaev and his company, Radiotester OOO (aka Radiotester LLC), for 180 days with the possibility of renewal.

https://www.justice.gov/opa/pr/task-force-kleptocapture-unseals-two-cases-charging-evasion-russian-economic-countermeasures

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February 27, 2023: 88 Fed. Reg. 12310: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Javier Campos for ten years until February 22, 2031. On February 22, 2021, Campos was convicted of violating 18 U.S.C. 554(a) of smuggling and attempting to smuggle from the United States to Mexico 6000 rounds of 7.62 x 39 mm ammunition. As a result of his conviction, the Court sentenced Campos to 51 months of confinement, three years of supervised release and a $100 assessment.

https://www.federalregister.gov/documents/2023/02/27/2023-03984/in-the-matter-of-javier-campos-inmate-number-13278-579-fci-terre-haute-federal-correctional

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February 27, 2023: 88 Fed. Reg. 12311: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Marco Rodriguez for ten years until March 12, 2031. On March 12, 2021, Rodriguez was convicted of violating 18 U.S.C. 371 and 18 U.S.C. 554(a) for conspiring and unlawfully smuggling from the US to Mexico, 5,000 rounds of .223 caliber ammunition and 5,000 rounds of 7.62 x 39 mm caliber ammunition. As a result of his conviction, the Court sentenced Rodriguez to 40 months of confinement on each count, to run concurrently and with credit for time served, 36 months of supervised release and a $300 special assessment.

https://www.federalregister.gov/documents/2023/02/27/2023-03983/in-the-matter-of-marco-rodriguez-inmate-number-14132-508-fci-safford-federal-correctional

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February 27, 2023: The U.S. Department of State has concluded an administrative settlement with 3D Systems Corporation (3D) of Rock Hill, South Carolina, 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 3D have reached this settlement following an extensive compliance review by the Office of Defense Trade Controls Compliance in the Department’s Bureau of Political-Military Affairs.

The Department of State and 3D have reached an agreement pursuant to ITAR § 128.11 to address alleged ITAR violations occurring during the period of 2012 – 2018 involving unauthorized exports of technical data to Germany, unauthorized exports and retransfers of technical data to the People’s Republic of China (PRC), a proscribed destination under ITAR § 126.1, unauthorized reexports of technical data to Taiwan, unauthorized exports of technical data to foreign-person employees, and the failure to maintain ITAR records.

The settlement demonstrates the Department’s role in strengthening U.S. industry by protecting U.S.-origin technical data from unauthorized exports. The settlement also highlights the importance of obtaining appropriate authorization from the Department before exporting ITAR-controlled technical data.

Under the terms of the 36-month Consent Agreement, 3D Systems Corporation will pay a civil penalty of $20,000,000. The Department has agreed to suspend $10,000,000 of this amount on the condition that the funds will be used for Department-approved Consent Agreement remedial compliance measures to strengthen 3D’s compliance program. In addition, the Company will engage an external Special Compliance officer for at least the first year of the Consent Agreement and will conduct two external audits of its ITAR compliance program and implement additional compliance measures.

https://www.state.gov/u-s-department-of-state-concludes-20000000-settlement-of-alleged-export-violations-by-3d-systems-corporation/

The Consent Agreement for this case is posted on the following Department of State website:

https://www.pmddtc.state.gov/ddtc_public?id=ddtc_kb_article_page&sys_id=384b968adb3cd30044f9ff621f961941

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February 27, 2023: As part of a settlement agreement, the Bureau of Industry and Security (BIS) issued an order imposing an administrative penalty of $2,777,750 on 3D Systems Corp. (3D Systems). 3D Systems is also required to retain a third-party consultant and to complete two audits of its export controls compliance program. This settlement resolves the allegations set forth in a Proposed Charging Letter (PCL) regarding 19 violations by 3D Systems of the Export Administration Regulations (EAR) by exporting controlled aerospace technology and metal alloy powder to China without the required license, and by exporting controlled technology to Germany without the required license. The PCL also included allegations related to 3D Systems failing to comply with the EAR’s recordkeeping requirements. 3D Systems admitted to committing the alleged conduct set forth in the PCL as part of this agreement. In addition to the BIS penalty, 3D Systems entered into corresponding settlement agreements with the Department of State and the Department of Justice.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3233-2023-02-27-3d-press-release/file

The BIS order can be found at the following website:

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1468-e2807/file

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February 27, 2023: 3D Systems Corp. (3D Systems), a 3D printing company, has agreed to pay the United States up to $4.54 million to resolve allegations that it violated the False Claims Act by improperly transmitting export-controlled technical data to China in violation of the export control laws of the United States in connection with certain NASA and DOD contracts, announced U.S. Attorney for the Northern District of Texas Leigha Simonton.

In parallel agreements also related to alleged export violations, the company has agreed to a $20 million administrative settlement with the U.S. Department of State and a $2.77 million administrative settlement with the U.S. Department of Commerce.

Per the terms of a civil settlement executed with the Department of Justice on February 27, 2023, South Carolina-based 3D Systems Corporation agreed to pay $2.27 million in restitution to the federal government within the next 30 days. The company may be required to pay an additional $2.27 million in penalties under the Justice Department settlement agreement, for a total of up to $4.54 million, if it fails to pay at least that amount in civil penalties to the Department of State and the Department of Commerce in connection with the parallel administrative settlements referenced above.

According to the Justice Department Settlement Agreement, 3D Systems – through its Quickparts subsidiary – completed on-demand manufacturing projects both directly and indirectly on contracts issued by DOD and NASA, including for projects involving technical or other data potentially classified under and controlled by the International Emergency Economic Powers Act, the Arms Export Control Act, the Export Administration Regulations, and/or the International Traffic in Arms Regulations (collectively, the Export Control Laws).

Generally, the Export Control Laws prohibit certain controlled items and/or intellectual property from being exported to certain foreign countries, including the People’s Republic of China, without a license or authorization from the appropriate federal agencies. In the Justice Department settlement agreement, the United States alleged that between January 1, 2012, and December 31, 2017, 3D exported certain items and/or intellectual property to China without the appropriate license or authorization in violation of the Export Control Laws in connection with certain contracts issued by DOD and NASA in violation of the False Claims Act.

https://www.justice.gov/usao-ndtx/pr/3d-printing-company-pay-454-million-settle-false-claims-act-allegations-export

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February 28, 2023: 88 Fed. Reg. 12654: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Qingshan Li for ten years until June 12, 2030. On June 12, 2020, Li was convicted of violating Section 38 of the Arms Export Control Act (22 U.S.C 2778) (“AECA”). For knowingly and willfully attempting to export from the United States to China a Harris Falcon III AN/PRC 152A Radio, which is designated as a defense article on the United States Munitions List, without the required licenses or written authorization from the State Department. As a result of his conviction, the Court sentenced Li to 36 months of confinement, three years of supervised release, and a $100 assessment. Li was also placed on the U.S. Department of State’s debarred list.

https://www.federalregister.gov/documents/2023/02/28/2023-03985/in-the-matter-of-qingshan-li-room-201-no106-lane-24-chengshan-rd-pudong-district-shanghai-china

FEBRUARY 2023 EXPORT CONTROL REGULATION UPDATES Read More »

JANUARY 2023 EXPORT CONTROL REGULATION UPDATES

This newsletter lists the latest changes in export control regulations through January 31, 2023. The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It summarizes 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 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 Enacted The Protecting American Intellectual Property Act of 2022

January 5, 2023: On January 5, 2023, President Biden signed the Protecting American Intellectual Property Act of 2022 (the Act) into law. The Act requires periodic reports to Congress identifying any “foreign persons” who are found to have engaged in significant theft of trade secrets of U.S. persons. The Act also requires menu-based sanctions against such persons, which may include blocking sanctions.

https://www.congress.gov/bill/117th-congress/senate-bill/1294/text and https://www.mondaq.com/unitedstates/export-controls–trade–investment-sanctions/1270622/new-sanctions-authority-for-theft-of-us-trade-secrets-by-foreign-persons

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U.S. Department Of Commerce

The U.S. Department of Commerce Issued Adjustments For Inflation To Each Civil Monetary Penalty Within Its Jurisdiction

January 3, 2023: 88 Fed. Reg. 3: The U.S. Department of Commerce has issued adjustments for inflation to each civil monetary penalty within its jurisdiction. The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, required the head of each agency to adjust for inflation its CMP levels in effect as of November 2, 2015, under a revised methodology that was effective for 2016 which provided for initial catch up adjustments for inflation in 2016, and requires adjustments for inflation to CMPs under a revised methodology for each year thereafter. The Department of Commerce’s 2023 adjustments for inflation to CMPs, effective January 15, 2023, apply only to CMPs with a dollar amount and will not apply to CMPs written as functions of violations. The Department of Commerce’s 2023 adjustments for inflation to CMPs apply only to those CMPs, including those whose associated violation predated such adjustment, which is assessed by the Department of Commerce after the effective date of the new CMP level. The adjustments for civil violations at the maximum level for violations of the Export Controls Act of 2018 increased from $328,121 to $353,534 on January 15, 2023.

https://www.federalregister.gov/documents/2023/01/03/2022-28363/civil-monetary-penalty-adjustments-for-inflation

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Bureau of Industry and Security (BIS) Amended The EAR Per Decisions Made At The Australia Group (AG) Virtual Implementation Meetings And The AG Plenary Meeting

January 17, 2023: 88 Fed. Reg. 2507: The Bureau of Industry and Security (BIS) published a final rule to amend the Export Administration Regulations (EAR) to reflect decisions made at the November 2021 and March 2022 Australia Group (AG) Virtual Implementation Meetings and the AG Plenary Meeting held in July 2022. The amendments include revisions to certain Export Control Classification Numbers to clarify the controls on genetic elements and genetically modified organisms and the scope of the exclusion that applies to medical isolators “specially designed” for barrier nursing or transportation of infected patients; and make clarifications by adding four naturally occurring, dual-use marine toxins (specifically, brevetoxins, gonyautoxins, nodularins and palytoxin) and removing cholera toxin. The addition of these four toxins is consistent with Section 1758 of the Export Control Reform Act of 2018 (ECRA) regarding emerging and foundational technologies. This rule also included amendments to reflect the AG Plenary updates to the nomenclature of certain bacteria and fungi, and the clarification of the definition of “disinfected” as it applies to certain biological equipment.

https://www.federalregister.gov/documents/2023/01/17/2023-00397/implementation-of-australia-group-decisions-from-2021-and-2022-virtual-meetings-controls-on-marine

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January 18, 2023: 88 Fed. Reg. 2821: On October 7, 2022, the Bureau of Industry and Security (BIS) updated the Export Administration Regulations (EAR) to implement necessary controls on advanced computing integrated circuits (ICs), computer commodities that contain such ICs, and certain semiconductor manufacturing items, and to make other changes to the EAR to ensure that appropriate controls are in place for these items, including specific activities of “U.S. persons.” This rule updates the controls to more effectively achieve the policy objectives identified in previous regulations by adding the same controls implemented in China in that rule to Macau.

This rule is effective on January 17, 2023.

https://www.federalregister.gov/documents/2023/01/18/2023-00888/implementation-of-additional-export-controls-certain-advanced-computing-and-semiconductor

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

DDTC Name And Address Changes Posted To Website

January 3 through 26, 2023: 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:

General Electric Canada Changes in Names and Addresses from General Electric International Inc. 2300 Meadowdale Blvd., Mississauga, Canada (and all locations in Canada), General Electric International Inc. 201 Brownlow Ave., Unit 12, Dartmouth, Canada (and all locations in Canada), General Electric Canada Company 2300 Meadowdale Blvd., Mississauga, Canada (and all locations in Canada), and General Electric Canada 60 Queen Street, Suite 1200, Ottawa, Canada (and all locations in Canada) to GEC Aviation Inc. 1919 Minnesota Court, Suite 100, Mississauga, Canada L5N 0C9 due to corporate reorganization;
Change in Address for Howmet de Mexico S De RL CV (Howmet de Mexico) from K.M. 7.100.500 Carretera Presa La Amistad, Parque Industrial Amistad, Acuna, Coahuila, Mexico C.P. 26220 to Avenida Hidalgo No. 120, Parque Industrial Amistad, Ciudad Acuna, Coahuila, Mexico C.P. 26220;
Change in Name from Hanwha Defense Co., Ltd. to Hanwha Aerospace Co., Ltd due to merger;
Change in Name from Ultra Electronics Limited to Ultra Sonar Systems Limited, Ultra I&C Limited, and Ultra Nuclear Limited due to internal restructuring;
Change in Name from Ultra Electronics Limited to Ultra PCS Limited and Ultra Electronics CEMS Limited due to internal restructuring;
Change in Name from Viasat, Inc. to L3Harris Technologies, Inc., subsidiary L3 Technologies, Inc. as a result of the acquisition of the Tactical Data Link product line assets by L3Harris Technologies, Inc.;
Changes in Name from Alion Science and Technology Corporation and HII Defense and Federal Solutions, Inc. to HII Mission Technologies Corp. as a result of corporate restructuring;
Change in Name from Astek Industrie to Astek Technology;
Change in Address for MTG Marinetechnik GmbH from Budnikowsky-Twiete 7, 22041 Hamburg, Germany to Am Stadtrand 63, 22047 Hamburg, Germany;
Change in Name from Tecnavia to Babcock Mission Critical Services France SA due to acquisition;
Change in Name from Proteus to Babcock Mission Critical Services France SA due to acquisition;
Change in Name from Inaer Helicopters France SA to Babcock Mission Critical Services France SA due to acquisition;
Change in Name from Airbus HAPS Connectivity Solutions Ltd. to Aalto Haps Limited due to corporate rebranding;
Change in Name from Viasat Australia Pty Ltd to L3Harris Communications Australia Pty Ltd. as a result of the acquisition of the Australian Tactical Data Link product line assets by L3Harris Technologies, Inc.;
Change in Address for Unitronex Corporation from 2155 Shelby Drive, Suite C, Sedona, Arizona 86336 to 781 Cove Parkway, Suite B, Cottonwood, Arizona 86326.

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The U.S. Department Of State Established The Office Of The Special Envoy For Critical And Emerging Technology

January 3, 2023: The U.S. Department of State has established the Office of the Special Envoy for Critical and Emerging Technology and began operations at the Department of State on January 3, 2023. Secretary Blinken established the office as part of the wider modernization agenda because the constellation of critical and emerging technologies reshaping the world is now an integral part of the conduct of U.S. foreign policy and diplomacy. The competition to develop and deploy foundational technologies is intensifying. The Office of the Special Envoy will bring additional technology policy expertise, diplomatic leadership, and strategic direction to the Department’s approach to critical and emerging technologies. As the Department works to strengthen tech diplomacy across the organization, the office will provide a center of expertise and energy to develop and coordinate critical and emerging technology foreign policy, and to engage foreign partners on emerging technologies that will transform our societies, economies, and security—including biotechnology, advanced computing, artificial intelligence, and quantum information technologies. It will work in close coordination with the various bureaus and offices across the Department that are engaging on these and other technology topics that are central to our foreign policy.

https://www.state.gov/establishing-the-office-of-the-special-envoy-for-critical-and-emerging-technology/

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The Directorate of Defense Trade Controls Updated Its Guidance For U.S. Persons Working Abroad

January 5, 2023: The Directorate of Defense Trade Controls (DDTC) has updated the guidance for U.S. persons working abroad (USPAB) applications. The Guidance is a 10-page, four-part guidance. Part 1 provides General Guidance, Part 2 provides an outline of the required elements for a USPAB Authorization Submission Request, Part 3 provides a template for the required submission letter, and Part 4 provides guidance for the completion of the required DS-6004 form in DECCS.

The Guidance for USPAB Authorizations relies heavily on defined terms from Part 120 of the ITAR in its guidance and also in the preparation of any USPAB request.

Key points are as follows:

The applicant can only be a U.S. person/individual working abroad;
The authorization is limited to the provision of defense services by the applicant to his/her foreign employer or foreign parties on behalf of their employer;
No technical data or defense articles will be authorized for export under such authorization;
The inclusion of two provisos from DDTC for every USPAB authorization which validates the preceding statement;
The requirement to specifically identify in accordance with 22 CFR §§ 120.32(a)(1) or (3) the defense services being provided; and
The requirement to identify the applicant’s U.S. education or experience related to defense articles in the submission letter to be included with the submission.

Part 1 begins by stating that a USPAB is an individual U.S. Person as defined in § 120.62 who “…resides overseas, works for a foreign employer, and provides defense services as defined in § 120.32(a)(1) [furnishing of assistance (including training) to foreign persons, whether in the United States or abroad in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing, or use of defense articles] and/or (3) [Military training of foreign units and forces…] to their employer or other foreign parties.”

Note the exclusion of § 120.32(a)(2), which is the furnishing of technical data to foreign persons. This is because USPAB authorizations may authorize the provision of defense services only. They do not authorize the export of defense articles or technical data. Such authorization must be obtained under separate DDTC authorization.

Only the USPAB can be the applicant. The employer is the foreign end user of the defense services. A USPAB license authorization will allow a USPAB to provide defense services to their employer or other foreign persons (as defined in § 120.63) on behalf of their employer. Any recipient of the defense services must be listed in the license authorization.

Due to the limitations stated above, every USPAB authorization will include the following two provisos from DDTC:

“This approval authorizes you to furnish defense services to your foreign employer and the foreign parties specifically identified in your application as needing to receive defense services from you. Should you need to furnish defense services to any other foreign parties, you must submit another request that specifically identifies these parties as recipients of defense services.”

And

“This approval does not authorize you to transfer ITAR-controlled technical data (as defined in 22 CFR 120.33). Any ITAR-controlled technical data used in connection with the activities authorized by this license must be the subject of a separate Department authorization.”

Note that the above provisos do not preclude the applicant from working with U.S.-origin ITAR technical data lawfully exported to their employer.

All USPAB authorizations (to include any provisos) will be sent in letter format to the applicant via email.

Part 2 identifies and enumerates the six elements of a USPAB authorization request as follows:

Form DS-6004 (the application form to use for the request)
Submission letter [Required and must be structured in accordance with Part 3 of the Guidance];
Resume;
Detailed job description (if not included in the submission letter);
ITAR § 126.13(a) certification (applicant must self-certify); and
Other supporting documentation.

This Part also specifically identifies that the applicant may have its submission prepared on its behalf by a third party (should be evidenced with written acknowledgment).

Part 3 breaks down the required submission letter into seven Sections. Of note is Section 2, which requires that the applicant specifically tie their work back to one or more of the defense services defined in 120.32(a)(1) or (3). To drive home this point, examples are provided as follows:

“I will be furnishing assistance in designing, developing, and maintaining the XXX defense article. As the project engineer, I will be …”

“I will be training the Country X Air Force in the use of ….”

Applicants are reminded to be as descriptive as possible.

Part 4 provides direction on completing the DS-6004.

The Frequently Asked Questions (“FAQs”) associated with this Guidance are 21 questions ranging from whether registration is required to whether a USPAB authorization is required for a project that is the subject of a TAA.

A new guidance document, as well as a submission letter template and sample §126.13 certification letter for USPAB authorization requests, are located on the “Guidelines & Instructions” page of the DDTC website:

https://www.pmddtc.state.gov/ddtc_public?id=ddtc_kb_article_page&sys_id=f9ccfe96dbb4130044f9ff621f961929 and https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_news_and_events

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The U.S. Department Of State Published A Final Rule To Adjust Civil Monetary Penalties

January 11, 2023: 88 Fed. Reg. 1505: The U.S. Department of State published a final rule to adjust the civil monetary penalties (CMP) for regulatory provisions maintained and enforced by the Department of State. The revised CMP adjusts the amount of civil monetary penalties assessed by the Department of State based on the December 2022 Office of Management and Budget guidance and recent legislation. For penalties adjusted according to the December 2022 guidance, the new amounts will apply only to those penalties assessed on or after the effective date of this rule, regardless of the date on which the underlying facts or violations occurred. For the penalty adjusted according to recent legislation, the new amounts will apply only to those penalties assessed for violations occurring on or after December 27, 2022.

Citation in 22 CFR	FY22 Max Penalties	New (FY 23) Max Penalties
§ 35.3	$12,537 up to $376,138	$13,508 up to $405,270
§ 103.6(a)(1) Prohibited Acts	$42,163	$45,429
§ 103.6(a)2) Recordkeeping Violations	$8433	$9086
ITAR § 127.10(a)(1)(i)	$1,272,251	the greater of $1,200,000 or the amount that is twice the value of the transaction that is the basis of the violation with respect to which the penalty is imposed
ITAR § 127.10(a)(1)(ii)	$925,041, or five times the amount of the prohibited payment, whichever is greater	$996,685, or five times the amount of the prohibited payment, whichever is greater
ITAR § 127.10(a)(1)(iii)	$1,101,061	$1,186,338
§ 138.400 First Offenders	$21,665	$23,343
§ 138.400	$22,021 up to $220,213	$23,727 up to $237,268

https://www.federalregister.gov/documents/2023/01/11/2023-00353/department-of-state-2023-civil-monetary-penalties-inflationary-adjustment

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Census Bureau

U.S. Customs And Border Protection (CBP) Deployed Additional Features As Part Of The Automated Commercial Environment

January 12, 2023: The U.S. Customs and Border Protection (CBP) deployed additional features as part of the Automated Commercial Environment (ACE) Portal Modernization – Phase 3.

The References Tab has a new link to access the AEDirect portal titled “AES Direct UI”. Users should begin navigating to the AESDirect Portal using only the “AES Direct UI” link. Access through the “Legacy ACE” link will be discontinued in the future.

https://ace.cbp.gov/s/login/

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U.S. Customs And Border Protection (CBP) Published Tips On How To Resolve AES Response Messages

January 24, 2023: The U.S. Customs and Border Protection (CBP) published the following tips on how to resolve AES response messages.

Response Code: 171

Narrative: Transportation Reference Number Not Allowed for MOT

Severity: Fatal

Reason: The Transportation Reference Number is not allowed to be reported for the Mode of Transportation reported for this shipment.

Resolution: A Transportation Reference Number is required for vessel shipments and allowed for air, rail or truck shipments. A Transportation Reference Number cannot be reported for a shipment using any other mode of transportation (i.e., mail, fixed, or other).

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

Response Code: 501

Narrative: Export Information Code Missing

Severity: Fatal

Reason: The Export Information Code was not reported.

Resolution: An Export Information Code must be reported on every shipment. For a complete list of Export Information Codes, refer to ‘Appendix E – Commodity Filing Export Information’ of the AESTIR.

Verify the Export Information Code, correct the shipment, and resubmit.

It is important that AES filers correct Fatal Errors as soon as they are received to comply with Foreign Trade Regulations. These errors must be corrected before 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.

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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) Adjusted For Inflation The Maximum Amount Of The Civil Monetary Penalties

January 12, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended its regulations to implement for 2023 the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. This regulatory amendment adjusts for inflation the maximum amount of the civil monetary penalties that may be assessed under relevant OFAC regulations.

Maximum CMP amounts for Relevant Statutes Statute Existing maximum Civil Monetary Penalties.

Statute	Prior Maximum CMP Amount	New Maximum CMP Amount
TWEA	$97,529	$105,083
IEEPA	$330,947	$356,579
AEDPA	$87,361	$94,127
FNKDA	$1,644,396	$1,771,754
CDTA	$14,950	$16,108

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230112 and https://home.treasury.gov/system/files/126/20230112_penalties_inflation.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

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

The Commerce Department’s Bureau Of Industry And Security (BIS) Imposed Restrictions On Seven Iranian Drone Producers

January 31, 2023: 88 Fed. Reg. 6621: The Commerce Department’s Bureau of Industry and Security (BIS) imposed restrictions on seven Iranian drone producers, including on transferring foreign-made components to them. These entities were added to the Entity List for contributing to Russia’s military and defense industrial base through the production of Iranian unmanned aerial vehicles (UAVs or “drones”), which are being transferred to Russia for use in its war of aggression against Ukraine. The rule applies some of the Department’s most severe export restrictions on these entities, effectively cutting them off from legally accessing items made subject to U.S. jurisdiction. The action serves to further U.S. efforts to cut the Russian military off from the items and sources of support it needs to sustain its unjust and illegal war against Ukraine.

Design and Manufacturing of Aircraft Engines (DAMA);
Islamic Revolutionary Guard Corps Aerospace Force;
Islamic Revolutionary Guard Corps Research and Self-Sufficiency Jihad Organization;
Oje Parvaz Mado Nafar Company;
Paravar Pars Company;
Qods Aviation Industry; and
Shahed Aviation Industries.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3213-iran-drones/file and https://www.bis.doc.gov/index.php/documents/regulations-docs/federal-register-notices/federal-register-2023/3215-88-fr-6621/file

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

January 5, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated critical nodes of a key financial facilitation network of the Islamic State of Iraq and Syria (ISIS), which included four individuals and two entities in Turkey, who have enabled the terrorist group’s recruitment and financial transfers to and from Iraq and Syria. This network played a key role in money management, transfer, and distribution for ISIS in the region. Concurrently, the Turkish Ministry of Treasury and Finance and the Ministry of Interior have implemented an asset freeze against members of this network.

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

Al-Juburi, Lu’ay Jasim Hammadi of Turkey;
Al-Khatuni, Abd Al Hamid Salim Ibrahim Ismail Brukan of Iraq;
Al-Khatuni, Muhammad Abdul Hamid Salim Brukan of Iraq;
Al-Khatuni, Umar Abdul Hamid Salim Brukan of Iraq.

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

Sham Express of Turkey;
Wadi Alrrafidayn For Foodstuffs of Turkey.

https://home.treasury.gov/news/press-releases/jy1181 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230105

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January 6, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has designated six executives and board members of U.S. designated Qods Aviation Industries (QAI), a key Iranian defense manufacturer responsible for the design and production of unmanned aerial vehicles (UAVs). Iran has transferred these UAVs for use in Russia’s unprovoked war of aggression in Ukraine. OFAC is also updating QAI’s entry on the Specially Designated Nationals and Blocked Persons List (SDN List) to include its new alias, Light Airplanes Design, and Manufacturing Industries. Finally, OFAC is designated the director of Iran’s Aerospace Industries Organization (AIO), the key organization responsible for overseeing Iran’s ballistic missile programs.

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

Arlanizadeh, Vali of Iran;
Damavandian, Ghassem of Iran;
Ghoreishi, Seyed Hojatollah of Iran;
Khaki, Reza of Iran;
Niyazi-Angili, Majid Reza of Iran;
Sharifi-Tehrani, Hamidreza of Iran;
Siavash, Nader Khoon of Iran.

https://home.treasury.gov/news/press-releases/jy1182 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230106

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January 9, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Venezuela-related General License 31B,”Certain Transactions Involving the IV Venezuelan National Assembly and Certain Other Persons.” OFAC also amends several Frequently Asked Questions (522, 547, 660, 679, and 680).

Venezuela-related General License 31B: U.S. persons are authorized to engage in all transactions prohibited by Executive Order (E.O.) 13884, as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), involving the IV Venezuelan National Assembly seated on January 5, 2016 (“IV National Assembly”); its Delegated Commission; any entity established by, or under the direction of, the IV National Assembly to exercise its mandate (“IV National Assembly Entity”); or any person appointed or designated by, or whose appointment or designation is retained by, the IV National Assembly, its Delegated Commission, or a IV National Assembly Entity, including their respective members and staff. U.S. persons are authorized to engage in all transactions prohibited by E.O. 13850, as amended by E.O. 13857, and incorporated into the VSR, involving any person appointed or designated by, or whose appointment or designation is retained by, the IV National Assembly, its Delegated Commission, or an IV National Assembly Entity to the board of directors (including an ad hoc board of directors) or as an executive officer of a Government of Venezuela entity (including entities owned or controlled, directly or indirectly, by the Government of Venezuela). This general license does not authorize:

(2) Any transaction otherwise prohibited by the VSR, including transactions involving any person blocked pursuant to the VSR other than the persons identified in paragraph (a) or (b) of this general license unless separately authorized.

https://home.treasury.gov/system/files/126/venezuela_gl31b.pdf

The following Venezuela Frequently Asked Questions (“FAQs”) are amended:

Question 522: Other than through the existing general licenses, under what circumstances might U.S. persons be authorized to deal in new debt of greater than 30 or 90 days issued by the Government of Venezuela?

Answer: In the Lima Declaration of August 8, 2017, 12 countries across the Americas refused to recognize the Constituent Assembly or the laws it adopts because of its illegitimate nature while at the same time fully backing the democratically elected IV Venezuelan National Assembly seated on January 5, 2016 (“IV National Assembly”). We stand in solidarity with our friends and allies in the region. If the democratically elected IV National Assembly approved a new debt issuance by the Government of Venezuela that Executive Order (E.O.) 13808 would prohibit U.S. persons from dealing in, the United States would consider using licensing authority to allow U.S. persons to deal in the issuance.

Question 547: Can U.S. Persons participate in meetings about restructuring outstanding Venezuelan and PDVSA debt?

Answer: U.S. persons are generally prohibited from engaging in transactions or dealings with persons named on OFAC’s SDN List, including dealing with an SDN in the context of efforts to restructure Venezuelan and Petroleos de Venezuela, S.A. (PdVSA) debt. Provided there is no SDN involvement, Venezuela-related General License 3 authorizes U.S. persons to engage in all transactions related to bonds specified in the Annex to General License 3, including participating in negotiations regarding such bonds. General License 3 does not authorize any transaction by a U.S. person or within the United States that involves the creation or subsequent dealing in new debt of PdVSA or debt otherwise of the Government of Venezuela with a maturity of greater than 90 days or 30 days, respectively, absent a license from OFAC. OFAC would consider license applications involving any such new debt or equity on a case-by-case basis and base licensing determinations on the facts and circumstances of the particular application. As stated in FAQ 522, the United States government would consider using licensing authority to allow U.S. persons to deal with new debt of the Government of Venezuela approved by the democratically elected IV Venezuelan National Assembly seated on January 5, 2016.

Question 660: When will sanctions be lifted on Petróleos de Venezuela, S.A. (PdVSA) or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest?

Answer: The path to sanctions relief for PdVSA and its subsidiaries is through the expeditious transfer of control of the company to a democratically elected government that is committed to taking concrete and meaningful actions to combat corruption, restore democracy, and respect human rights. A bona fide transfer of control will ensure that the assets of Venezuela are preserved for the country’s people rather than misused and diverted by former President Nicolas Maduro. Treasury will continue to use its economic tools to support the IV Venezuelan National Assembly seated on January 5, 2016, and the Venezuelan people’s efforts to restore their democracy.

Question 679: Executive Order (E.O.) 13884 of August 5, 2019, “Blocking Property of the Government of Venezuela,” blocks all property and interests in property of the Government of Venezuela. What does this mean for the IV Venezuelan National Assembly seated on January 5, 2016 (“IV National Assembly”)?

Answer: The United States stands with the Venezuelan people and the IV National Assembly in opposition to the Maduro regime. On January 09, 2023, OFAC issued Venezuela-related General License 31B authorizing all transactions involving the IV National Assembly, its Delegated Commission, any entity established by, or under the direction of, the IV National Assembly to exercise its mandate (“IV National Assembly Entity”), or involving any person appointed or designated by, or whose appointment or designation is retained by, the IV National Assembly, its Delegated Commission, or an IV National Assembly Entity, to act on behalf of the Government of Venezuela, including their respective members and staff, that are otherwise prohibited by E.O. 13884. The authorization also covers transactions prohibited by E.O. 13850, as amended, with respect to any person appointed or designated by, or whose appointment or designation is retained by, the IV National Assembly, its Delegated Commission, or an IV National Assembly Entity to the board of directors (including an ad hoc board of directors) or as an executive officer of a Government of Venezuela entity (including entities owned or controlled, directly or indirectly, by the Government of Venezuela).

Effective January 09, 2023, General License 31B replaced and superseded General License 31A in its entirety.

Question 680: Does the blocking of the Government of Venezuela impact the ability of U.S. persons to transact with the Government of Venezuela, or persons in which the Government of Venezuela owns, directly or indirectly, a 50 percent or greater interest?

Answer: Yes. Unless exempt or authorized by OFAC, all property, and interests in property of persons meeting the definition of the Government of Venezuela (see section 6(d) of E.O. 13884 of August 5, 2019) that are in or come within the United States or the possession or control of a United States person are blocked, pursuant to E.O. 13884. The term “Government of Venezuela,” as defined in E.O. 13884, includes the state and Government of Venezuela, any political subdivision, agency, or instrumentality thereof, including the Central Bank of Venezuela and Petroleos de Venezuela, S.A. (PdVSA), any person owned or controlled, directly or indirectly, by the foregoing, and any person who has acted or purported to act directly or indirectly for or on behalf of, any of the foregoing, including as a member of the Maduro regime.

OFAC has issued several General Licenses (GLs) that provide authorization for categories of persons blocked by E.O. 13884. GL 34A authorizes transactions with certain Government of Venezuela individuals, including United States citizens; permanent resident aliens of the United States; individuals who have a valid U.S. immigrant or nonimmigrant visa, other than individuals in the United States as part of Venezuela’s mission to the United Nations; former employees and contractors of the Government of Venezuela; and current employees and contractors of the Government of Venezuela who provide health or education services in Venezuela, including at hospitals, schools, and universities. In addition, GL 22 authorizes certain transactions related to Venezuela’s mission to the United Nations, and GL 31B provides authorization related to the IV Venezuelan National Assembly seated on January 5, 2016 (“IV National Assembly”). Please see FAQ 679 regarding the scope of GL 31B. Without authorization from OFAC, U.S. persons are generally prohibited from engaging in transactions with the Government of Venezuela, or persons in which the Government of Venezuela owns, directly or indirectly, a 50 percent or greater interest. U.S. persons are not prohibited from engaging in transactions involving the country or people of Venezuela, provided blocked persons or any conduct prohibited by any other Executive order imposing sanctions measures related to the situation in Venezuela are not involved.

Please note that persons meeting the definition of Government of Venezuela and persons that are owned, directly or indirectly, 50 percent or more by the Government of Venezuela are blocked pursuant to E.O. 13884, regardless of whether the person appears on the Specially Designated Nationals and Blocked Persons list (SDN List), unless exempt or authorized by OFAC.

As a general matter, OFAC expects financial institutions to conduct due diligence on their own direct customers (including, for example, their ownership structure) to confirm that those customers are not persons whose property and interests in property are blocked. For other types of transactions where a financial institution acts solely as an intermediary and fails to block transactions involving a sanctions target, OFAC will consider the totality of the circumstances surrounding the bank’s processing of the transaction to determine what, if any, regulatory response is appropriate.

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/updated/2023-01-09 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230109

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January 11, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is publishing one new Iran-related Frequently Asked Question (FAQ 1110) and amending several Iran-related Frequently Asked Questions (FAQs 337, 338, 339, 340, 341, 342, 343, 344, 345, 346, 348, 434, 435, 436, 437, 438, 439, 440, 441, 442, 443, and 853).

Question 1110: What are key changes made by Iran General License D-2 in comparison to Iran General License D-1?

Answer: On September 23, 2022, OFAC issued Iran General License (GL) D-2 to further support the provision of communication tools to ordinary Iranians and assist in their efforts to resist repressive internet censorship and surveillance tools deployed by the Iranian government. GL D-2, which supersedes GL D-1, both expands and clarifies the authorizations in GL D-1 and section 560.540 of the Iranian Transactions and Sanctions Regulations, 31 CFR 560 (ITSR), with respect to the exportation and reexportation, directly or indirectly, from the United States or by a U.S. person, of certain software and services incident to the exchange of communications over the internet. See FAQ 344 for additional information on how the authorizations in GL D-2 compare to section 560.540 of the ITSR.

Since GL D-1 was issued on February 7, 2014, the types of software and services that support communication over the internet have changed. To reflect technological developments in communication-related software and services since the issuance of GL D-1 (including in cloud-based services), OFAC issued GL D-2 to expand and clarify the range of U.S. software and services available to Iranians under OFAC’s sanctions program. For example, GL D-2 explicitly authorizes certain types of software and services for exportation or reexportation to Iran that are incident to communications over the internet, including cloud-based software and services.

GL D-2 expands and clarifies the pre-existing authorizations in several ways, including by making the following changes:

Removing the “personal” qualifier from the prior authorizations relating to “personal communications,” which resulted in compliance burdens for companies seeking to verify the personal nature of the communications supported by their software or services;
Expanding and clarifying the list of examples of communication tools within the authorizations in paragraphs (a)(1) and (2) to include: 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 software and services in support of the foregoing, or of any other activity authorized or exempt under the ITSR;
Expanding the authorization in paragraph (a)(2) for software incident to the exchange of communications over the internet to include software that enables services incident to the exchange of communications over the internet (including cloud-based services);
Clarifying that the authorization in paragraph (a)(4) for the export or reexport of non-commercial grade internet connectivity services includes cloud-based services; and
Expanding the case-by-case licensing policy for activity not authorized by the general license or exempt to include additional services that support internet freedom in Iran, such as certain activities relating to the development and hosting of anti-surveillance software by Iranian software developers. Such services would also include, for example, the development and hosting of anti-censoring software by Iranian software developers and the exportation of certain software development tools to Iranians seeking to create their own anti-surveillance or anti-censorship apps and upload them to mobile app sites.

See the following link for updates to FAQs 337, 338, 339, 340, 341, 342, 343, 344, 345, 346, 348, 434, 435, 436, 437, 438, 439, 440, 441, 442, 443, and 853: https://home.treasury.gov/policy-issues/financial-sanctions/faqs/updated/2023-01-11.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230111 and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1110

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January 12, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Counter Terrorism General License 21B “Authorizing Limited Safety and Environmental Transactions Involving Certain Vessels,” and is amending one Counter Terrorism-related Frequently Asked Question (1097).

Counter Terrorism General License 21B: All transactions that are ordinarily incident and necessary to one of the following activities involving the persons or vessels described below in 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 daylight time, April 13, 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 below 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 above 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
- BOCEANICA, IMO 9267132
- ZEPHYR I (f.k.a. ZHEN I), IMO 9255880
Azul Vista Shipping Corp.
- JULIA A (f.k.a. AZUL), IMO 9236353
Blue Berri Shipping Inc.
- RAIN DROP, IMO 9233208
Harbour Ship Management Limited
- B LUMINOSA, IMO 9256016
- BLUEFINS, IMO 9221657
- BUENO, IMO 9282443
Pontus Navigation Corp.
- NOLAN (f.k.a. OSLO), IMO 9179701
Technology Bright International Ltd.
- YOUNG YONG, IMO 9194127
Triton Navigation Corp.
- ADISA, IMO 9304667
Vista Clara Shipping Corp.
- LARA I (f.k.a. CLARA), IMO 9231767

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

Answer: GL 21B 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 21B involving certain blocked persons and vessels through 12:01 a.m. eastern daylight time, April 13, 2023. GL 21B does not authorize the offloading of any cargo onboard any of the blocked vessels listed in GL 21B, 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 21B, U.S. persons will be prohibited from engaging in any transactions with the blocked persons or vessels listed in GL 21B, unless otherwise exempt or authorized by OFAC. U.S. persons unable to conclude transactions authorized by GL 21B before 12:01 a.m. eastern daylight time, April 13, 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 21B before 12:01 a.m. eastern daylight time, April 13, 2023, are encouraged to seek guidance from OFAC.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230112_33 and https://home.treasury.gov/system/files/126/ct_gl21b.pdf and

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January 17, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 6C “Transactions Related to Agricultural Commodities, Medicine, Medical Devices, Replacement Parts and Components, or Software Updates, the Coronavirus Disease 2019 (COVID-19) Pandemic, or Clinical Trials”, Russia-related General License 54A “Authorizing Certain Transactions Involving VEON Ltd. or VEON Holdings B.V. Prohibited by Executive Order 14071”, and Russia-related General License 28B “Authorizing the Wind-Down and Rejection of Certain Transactions Involving Public Joint Stock Company Transkapitalbank and Afghanistan”. OFAC also amends four Russia-related Frequently Asked Questions (982, 1054, 1055, and 1059).

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

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

(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_gl6c.pdf

Russia Related General License 54A: All transactions ordinarily incident and necessary to the purchase or receipt of any debt or equity securities of VEON Ltd. or VEON Holdings B.V. 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 before June 6, 2022. Note: Except as provided below, all transactions ordinarily incident and necessary to facilitating, clearing, and settling of transactions authorized by the above that is 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. Effective January 17, 2023, General License No. 54, dated November 18, 2022, is entirely replaced and superseded by this General License No. 54A.

https://home.treasury.gov/system/files/126/russia_gl54a.pdf

Russia Related General License 28B: All transactions that are 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 (collectively, “TKB entities”), 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, March 18, 2023, provided that any payment to any TKB entity is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).

Note: The transactions authorized above include the wind-down and closure of correspondent accounts operated by U.S. financial institutions on behalf of TKB entities, provided any remaining funds or assets in the correspondent account to be paid to any TKB entity are placed in a blocked account. U.S. persons are authorized to reject, rather than block, all transactions ordinarily incident and necessary to the processing of funds ultimately destined for or originating from Afghanistan involving one or more TKB entities as an originating, intermediary or beneficiary financial institution and prohibited by E.O. 14024 through 12:01 a.m. eastern daylight time, March 18, 2023.

https://home.treasury.gov/system/files/126/russia_gl28b.pdf and

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230117

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January 17, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Venezuela-related General License 5J, “Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After April 20, 2023”. OFAC also amended Venezuela-related Frequently Asked Question 595.

Venezuela-related General License 5J: On or after April 20, 2023, all transactions related to the provision of financing for and other dealings in the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond that would be prohibited by subsection l(a)(iii) of Executive Order (E.O.) 13835 of May 21, 2018, as amended by E.O. 13857 of January 25, 2019, and incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized. This general license does not authorize any transactions or activities otherwise prohibited by the VSR or any other part of 31 CFR chapter V. Effective January 17, 2023, General License No. 5I, dated January 20, 2022, is replaced and superseded in its entirety by this General License No. 5J.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230117_33 and

https://home.treasury.gov/system/files/126/venezuela_gl5j.pdf

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January 17, 2023: 88 Fed. Reg. 2522: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has published two general licenses (GLs) issued pursuant to the Global Magnitsky Sanctions Regulations: GLs 3 and 4, each of which was previously made available on OFAC’s website. GLs 3 and 4 were issued on December 9, 2022. See December 2022 newsletter for details on the GLs.

https://www.federalregister.gov/documents/2023/01/17/2023-00348/publication-of-global-magnitsky-sanctions-regulations-web-general-licenses-3-and-4

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January 19, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) made the following deletions to its SDN List:

Khalifeh, Hanna Elias of Lebanon.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230119

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January 23, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Iran’s Islamic Revolutionary Guard Corps (IRGC) Cooperative Foundation and five of its board members, the Deputy Minister of Intelligence and Security, and four senior IRGC commanders in Iran under human rights authorities. These actions, in coordination with the United Kingdom and European Union, target a key economic pillar of the IRGC, which funds much of the regime’s brutal suppression, as well as senior security officials coordinating Tehran’s crackdown at the national and provincial levels.

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

Ala’Oddini, Yahya of Iran;
Asiabani, Kourosh of Iran;
Azimi, Mohammad Nazar of Iran;
Babamoradi, Jamal of Iran;
Fada, Mojtaba of Iran;
Karimi, Ahmad of Iran;
Norouzi, Aliasghar of Iran;
Rashedi, Naser of Iran;
Tabatabai, Seyyed Aminollah Emami of Iran; and
Tanavar, Hossein of Iran.

https://home.treasury.gov/news/press-releases/jy1209 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230123

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January 24, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated several individuals and associated entities for facilitating financial activities for Hizballah. At the center of this network is Lebanese money exchanger and so-called financial expert Hassan Moukalled, who plays a key role in enabling Hizballah to continue to exploit and exacerbate Lebanon’s economic crisis. Treasury also designated CTEX Exchange, a money service business owned by Hassan Moukalled, in addition to Hassan Moukalled’s sons, Rayyan Moukalled and Rani Moukalled, who facilitate Hassan Moukalled and his company’s financial activities in support of Hizballah.

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

Moukalled, Hassan Ahmed of Lebanon;
Moukalled, Rani Hassan of Lebanon;
Moukalled, Rayyan Hassan of Lebanon.

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

CTEX Exchange of Lebanon;
Lebanese Company For Information And Studies SARL of Lebanon; and
Lebanese Company For Publishing, Media, And Research of Lebanon.

https://home.treasury.gov/news/press-releases/jy1211 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230124

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January 26, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took additional actions to degrade the Russian Federation’s capacity to wage war against Ukraine by sanctioning eight individuals and 16 entities and four aircraft. These actions, concurrent with additional sanctions actions by the Department of State, target the infrastructure that supports battlefield operations in Ukraine, including producers of Russia’s weapons and those administering Russian-occupied areas of Ukraine. Notably, these actions include the designation of persons that support Russian defense-related entities, including PMC Wagner (Wagner Group).

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

Adonev, Sergei Nikolaevich of Israel;
Adonyev, Filipp Sergeevich of the United Kingdom and Russia;
Adonyev, Luka Sergeevich of the United Kingdom, Bulgaria and Russia;
Batekhin, Sergey Leonidovich of Russia;
Bezrukikh, Dmitriy Nikolaevich of Russia;
Burov, Andrey Vladimirovich of Russia;
Cartes Jara, Horacio Manuel of Paraguay;
Gostev, Arkadiy Aleksandrovich of Russia;
Ivanov, Aleksandr Aleksandrovich of Russia;
Kharichev, Aleksandr Dmitrievich of Russia;
Lushnikov, Alan Valeryevich of Russia;
Malyarevich, Aleksei Alekseevich of Russia;
Manturov, Denis Valentinovich of Russia;
Minnikhanov, Rustam Nurgaliyevich of Russia, France and the United Arab Emirates;
Minnikhanova, Gulsina Akhatovna Russia, France and the United Arab Emirates;
Novikov, Yan Valentinovich of Russia;
Rapoport, Boris Yakovlevich of Russia;
Velazquez Moreno, Hugo Adalberto, Asuncion of Paraguay;
Zakharov, Valery Nikolayevichof the Central African Republic and Russia.

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

Africa Politology;
Aktsionernoye Obshchestvo 179 Sudoremontnyy Zavod;
Aktsionernoye Obshchestvo 30 Sudoremontnyy Zavod;
Aktsionernoye Obshchestvo Dalnevostochnyy Tsentr Sudostroyeniya I Sudoremonta;
Aktsionernoye Obshchestvo Dalnevostochnyy Zavod Zvezda;
Aktsionernoye Obshchestvo Severo-Vostochnyy Remontnyy Tsentr;
Aktsionernoye Obshchestvo Tsentr Sudoremonta Dalzavod;
Aktsionernoye Obshchestvo Tsentralnoye Konstruktorskoye Byuro Lazurit;
Aktsionernoye Obshchestvo Vladivostokskoye Predpriyatie Elektroradioavtimatika;
AO Ural Civil Aviation Factory;
Bebidas USA Inc.;
Changsha Tianyi Space Science And Technology Research Institute CO. LTD;
Dominicana Acquisition S.A.;
Federal State Unitary Enterprise Scientific And Production Enterprise Gamma;
Frigorifico Chajha S.A.E.;
International Limited Liability Company Interros Capital;
Joint Stock Company National Aviation Service Company;
Joint Stock Company Research And Production Concern BARL;
Joint Stock Company Terra Tech;
JSC Aviacon Zitotrans;
Kratol Aviation;
Limited Liability Company Charter Green Light Moscow;
Limited Liability Company Kaleidoskop;
Limited Liability Company TKKH-Invest;
LLC Research & Production Enterprise Prima;
MK Interros Invest;
Obshchestvo S Ogranichennoi Otvetstvennostyu Luchano;
Obshchestvo S Organichennoy Otvetstvennostyu Dalnevostochnyy Proektnyy Institut Vostokproektverf;
Officer’s Union For International Security;
Prime Security And Development;
Saltcliff Trading Limited;
Sewa Security Services;
Spacety Luxembourg S.A.;
Tabacos USA Inc.;
Whiteleave Holdings Limited.

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

Addiction (9HA4571) Yacht Malta flag; Vessel Registration Identification IMO 1010193; and
Anatta (ZGB15) Yacht Cayman Islands flag; Vessel Registration Identification IMO 1011159.

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

RA-76502; Aircraft Model IL-76TD; Aircraft Tail Number RA-76502;
RA-76842; Aircraft Model IL-76TD; Aircraft Tail Number RA-76842;
RA-76846; Aircraft Model IL-76TD; Aircraft Tail Number RA-76846;
RA-78765; Aircraft Model IL-76TD; Aircraft Tail Number RA-78765; and
S5-SAD; Aircraft Model Bombardier Global 6000; Aircraft Manufacturer’s Serial Number (MSN) 9553.

https://home.treasury.gov/news/press-releases/jy1220 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230126

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January 26, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Global Magnitsky Sanctions Regulations General License 5 and General License 6.

General License 5: 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 the facilitation of the divestment or transfer, of debt or equity of Frigorifico Chajha S.A.E. (Frigorifico Chajha), to a non-U.S. person are authorized through 12:01 a.m. eastern daylight time, March 27, 2023. All transactions prohibited by the GMSR that are ordinarily incident and necessary to facilitating, clearing, and settling trades of debt or equity of Frigorifico Chajha that were placed before 4:00 p.m. eastern standard time, January 26, 2023, are authorized through 12:01 a.m. eastern daylight time, March 27, 2023. All transactions prohibited by the GMSR that are ordinarily incident and necessary to the wind-down of derivative contracts entered into before 4:00 p.m. eastern standard time, January 26, 2023, that (i) include Frigorifico Chajha as a counterparty or (ii) are linked to the debt or equity of Frigorifico Chajha are authorized through 12:01 a.m. eastern daylight time, March 27, 2023, provided that any payments to a blocked person are made into a blocked account in accordance with the GMSR.

This general license does not authorize: (1) U.S. persons to sell, or to facilitate the sale of, debt or equity of Frigorifico Chajha to, directly or indirectly, any person whose property and interests in property are blocked; or (2) U.S. persons to purchase or invest in, or to facilitate the purchase of or investment in, directly or indirectly, debt or equity of Frigorifico Chajha, other than purchases of or investments in debt or equity of Frigorifico Chajha that are ordinarily incident and necessary to the divestment or transfer of debt or equity of Frigorifico Chajha, as described in this general license. This general license does not authorize any transactions otherwise prohibited by the GMSR, including transactions involving any person blocked pursuant to the GMSR other than Frigorifico Chajha, unless separately authorized.

https://home.treasury.gov/system/files/126/glomag_gl5.pdf

General License 6: All transactions prohibited by the Global Magnitsky Sanctions Regulations, 31 CFR part 583 (GMSR), that are ordinarily incident and necessary to the wind-down of any transaction involving Bebidas USA Inc., Tabacos USA Inc., Frigorifico Chajha S.A.E., or Dominicana Acquisition S.A. (collectively, the “designated Cartes entities”), or any entity in which Horacio Manuel Cartes Jara or the designated Cartes entities own, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern daylight time, March 27, 2023, provided that any payment to a blocked person must be made into a blocked account in accordance with the GMSR.

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

https://home.treasury.gov/system/files/126/glomag_gl6.pdf

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January 26, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Global Magnitsky Sanctions Frequently Asked Questions.

Question 1111: What does Global Magnitsky General License 5 Authorizing Certain Transactions Related to Frigorifico Chajha S.A.E. authorize?

Answer: On January 26, 2023, OFAC designated Frigorifico Chajha S.A.E. (Frigorifico Chajha), pursuant to E.O. 13818. Concurrent with this action, OFAC issued General License (GL) 5, which authorizes certain transactions ordinarily incident and necessary to the divestment or transfer, or the facilitation of the divestment or transfer, of debt or equity of Frigorifico Chajha to a non-U.S. person, through 12:01 a.m. eastern daylight time, March 27, 2023.

GL 5 also authorizes certain transactions ordinarily incident and necessary to facilitating, clearing, and settling trades of debt or equity of Frigorifico Chajha that were placed before 4:00 p.m. eastern standard time, January 26, 2023, through 12:01 a.m. eastern daylight time, March 27, 2023.

GL 5 also authorizes certain transactions that are ordinarily incident and necessary to the wind-down of derivative contracts entered into before 4:00 p.m. eastern standard time, January 26, 2023, that (1) include Frigorifico Chajha as a counterparty, or (2) are linked to the debt or equity of Frigorifico Chajha, through 12:01 a.m. eastern daylight time, March 27, 2023, provided that any payments to a blocked person are made into a blocked account in accordance with the Global Magnitsky Sanctions Regulations, 31 CFR part 583.

However, GL 5 does not authorize U.S. persons to sell or to facilitate the sale of debt or equity of Frigorifico Chajha to, directly or indirectly, any person whose property and interests in property are blocked. GL 5 also does not authorize U.S. persons to purchase or invest in, or to facilitate the purchase of or investment in, directly or indirectly, debt or equity of Frigorifico Chajha, other than purchases of or investments in debt or equity of Frigorifico Chajha that are ordinarily incident and necessary to the divestment or transfer of debt or equity of Frigorifico Chajha as described in GL 5.

Non-U.S. persons generally do not risk exposure to U.S. sanctions for engaging in activities that would be exempt or authorized for U.S. persons pursuant to GL 5.

Question 1112: What does Global Magnitsky General License 6 Authorizing the Wind Down of Transactions Involving Bebidas USA Inc., Tabacos USA Inc., Frigorifico Chajha S.A.E., Dominicana Acquisition S.A., or Certain Blocked Entities Owned by Horacio Manuel Cartes Jara authorize?

Answer: On January 26, 2023, OFAC designated, pursuant to E.O. 13818, Horacio Manuel Cartes Jara (Cartes) for his involvement in corruption in Paraguay. Also on that day, OFAC designated four entities owned or controlled by Cartes, pursuant to E.O. 13818: Tabacos USA Inc., Bebidas USA Inc., Dominicana Acquisition S.A., and Frigorifico Chajha S.A.E. (collectively, “designated Cartes entities”). Concurrent with this action, OFAC issued Global Magnitsky General License (GL) 6 , which authorizes, subject to certain conditions, transactions prohibited by the Global Magnitsky Sanctions Regulations, 31 CFR part 583 (GMSR), that are ordinarily incident and necessary to the wind-down of any transaction involving any of the designated Cartes entities, or any entity in which Cartes or the designated Cartes entities own, directly or indirectly, a 50 percent or greater interest (collectively, “blocked Cartes entities”), through 12:01 a.m. eastern daylight time, March 27, 2023, provided that any payment to a blocked person must be made into a blocked account in accordance with the GMSR. GL 6 does not authorize any transactions involving Cartes himself.

After the expiration of this general authorization, U.S. persons will be prohibited from engaging in such wind-down transactions with blocked Cartes entities unless exempt or otherwise authorized by OFAC. U.S. persons unable to wind down transactions with blocked Cartes entities before 12:01 a.m. eastern daylight time, March 27, 2023, are encouraged to seek guidance from OFAC.

Non-U.S. persons may wind down transactions with blocked Cartes entities without exposure to sanctions under E.O. 13818, provided that such wind-down activity is consistent with GL 6. Wind-down 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 GL 6. Non-U.S. persons unable to wind down transactions with blocked Cartes entities before 12:01 a.m. eastern daylight time, March 27, 2023, are encouraged to seek guidance from OFAC.

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2023-01-26

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January 30, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated the leader of a Mexico-based network and two associates pursuant to Executive Order (E.O.) 14059 for procuring precursor chemicals to manufacture and traffic illicit fentanyl and other synthetic drugs to the United States. These actions result from ongoing efforts by U.S. agencies to disrupt the importation into and distribution of illicit fentanyl within the United States. These actions were coordinated closely with the government of Mexico and would not have been possible without the cooperation and support of the Drug Enforcement Administration.

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

Rivera Zazueta, Jose Angel of Mexico;
Santiso Aguila, Nelton of Mexico; and
Yang Lopez, Jason Antonio of Guatemala.

https://home.treasury.gov/news/press-releases/jy1229 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230130

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January 31, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated six individuals and three entities connected to Burma’s military regime pursuant to Executive Order (E.O.) 14014. This action occurred in conjunction with actions taken by both the United Kingdom and Canada.

On February 1, 2021, Burma’s military overthrew the democratically elected government and removed the civilian government leaders from power, including President Win Myint and State Counsellor Aung San Suu Kyi. Over the past two years, the military has continued to use violence and oppression to deny the people of Burma the ability to choose their own leaders. Burma’s military regime has used its military aircraft to conduct aerial bombings and other attacks against pro-democracy forces, killing and displacing countless civilians.

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

Aung, Htun of Burma;
Min, Aung of Burma;
Min, Than of Burma;
Oo, Myo Myint of Burma;
Swe, Hla of Burma; and
Tay Za, Htoo Htwe of Burma.

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

Mining Enterprise No 1;
Mining Enterprise NO 2; and
Union Election Commission.

https://home.treasury.gov/news/press-releases/jy1233 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230131

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U.S. Department of Treasury

January 18, 2023: The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an order identifying the virtual currency exchange Bitzlato Limited (Bitzlato) as a “primary money laundering concern” in connection with Russian illicit finance pursuant to section 9714(a) of the Combatting Russian Money Laundering Act, as amended.

https://home.treasury.gov/news/press-releases/jy1193

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U.S. Department of State

January 26, 2023: The United States will continue to impede the Kremlin’s ability to arm and equip its war machine engaged in an unjustified war against Ukraine. The Department of State designated five entities and one individual linked to the Wagner Group and its head, Yevgeniy Prigozhin. Additionally, the Department designated nine individuals and 14 entities for their status as government officials, their involvement in the extended networks of designated persons, and/or for being part of Russia’s military-industrial complex. Finally, the Department identified two yachts and one aircraft as blocked property. All targets are designated pursuant to Executive Order (E.O.) 14024, which authorizes sanctions with respect to specified harmful foreign activities of the Government of the Russian Federation.

Infrastructure And Operations Of The Wagner Group:

Charter Green Light Moscow;
Aleksei Alekseevich Malyarevich;
Africa Politology;
Prime Security And Development;
Sewa Security Services;
Officers Union For International Security;

Russian Government Officials:

The following three Russian Federal Penitentiary Service officials have been identified as having facilitated the recruitment of Russian prisoners into the Wagner Group. These individuals are being designated for being persons who are or have been leaders, officials, senior executive officers, or members of the board of directors of the Government of the Russian Federation:

Dmitriy Nikolaevich Bezrukikh;
Arkadiy Aleksandrovich Gostev; And
Ivan Pavlovitch Prokopenko.

Russian Deputy Prime Minister and Minister of Industry and Trade Denis Valentinovich Manturov is being designated for being a leader, official, senior executive officer, or member of the board of directors of the Government of the Russian Federation. Manturov oversees Russia’s defense industry and the production of war materiel for Russia’s use in Ukraine.

The Chairman of the Election Commission of the Rostov Region, Andrey Vladimirovich Burov, is designated for being a leader, official, senior executive officer, or member of the board of directors of the Government of the Russian Federation. Burov is responsible for facilitating illegitimate referendums in the occupied regions of Ukraine.

Vladimir Potanin’s Network:

Vladimir Olegovich Potanin, one of Russia’s wealthiest oligarchs, was designated alongside members of his network on December 15, 2022. The Department of State designated four additional entities in Potanin’s network:

Mk Interros Invest;
Whiteleave Holdings Limited (Whiteleave):
Saltcliff Trading Limited (Saltcliff);
International Limited Liability Company Interros Capital (Interros Capital).

Additionally, the Department of State designated Sergey Leonidovich Batekhin, the CEO of Interros, for being or having been a leader, official, senior executive officer, or member of the board of directors of Kholdingovaya Kompaniya Interros OOO (Interros), an entity whose property and interests in property are blocked pursuant to Section 1(a)(i). Interros was founded by Vladimir Potanin.

Businessman Adonev And His Network:

Sergei Nikolaevich Adonev is a businessman in Russia who acts as a financier to Russian President Vladimir Putin and Rostec State Corporation head Sergei Chemezov.

Limited Liability Company Kaleidoskop;
Sergei Nikolaevich Adonev;
Filipp Sergeevich Adonyev;
Luka Sergeevich Adonyev;
The Yacht Addiction is identified as blocked property in which Sergei Nikolaevich Adonev has an interest.
The yacht Anatta is dentified as blocked property in which Sergei Nikolaevich Adonev has an interest.
The aircraft S5-SAD is identified as blocked property in which Sergei Nikolaevich Adonev has an interest.

Entities Supporting Russia’s Military Industrial Complex:

Aktsionernoye Obshchestvo Dalnevostochnyy Tsentr Sudostroyeniya I Sudoremonta (AO DTSSS);

Aktsionernoye Obshchestvo Tsentr Sudoremonta Dalzavod;
Aktsionernoye Obshchestvo Severo-Vostochnyy Remontnyy Tsentr;
Aktsionernoye Obshchestvo Dalnevostochnyy Zavod Zvezda;
Aktsionernoye Obshchestvo 179 Sudoremontnyy Zavod;
Aktsionernoye Obshchestvo 30 Sudoremontnyy Zavod;
Obshchestvo S Organichennoy Otvetstvennostyu Dalnevostochnyy Proektnyy Institut Vostokproektverf;
Aktsionernoye Obshchestvo Vladivostokskoye Predpriyatie Elektroradioavtomatika; and
Aktsionernoye Obshchestvo Tsentralnoye Konstruktorskoye Byuro Lazurit.

Visa Restrictions:

The Department of State imposed visa restrictions on 531 members of the Russian Federation military for actions that threaten or violate the sovereignty, territorial integrity, or political independence of Ukraine pursuant to Section 212(a)(3)(C) of the Immigration and Nationality Act.

Sanctions Implications:

As a result of these actions, all property and interests in property of the individuals above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked 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 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.

https://www.state.gov/actions-to-counter-wagner-and-degrade-russias-war-efforts-in-ukraine/

Fines and Penalties

January 3, 2023: Xiaoqing Zheng, 59, of Niskayuna, New York, was sentenced to 24 months in prison for conspiring to steal General Electric (GE) trade secrets, knowing or intending to benefit the People’s Republic of China (PRC). Zheng was convicted of conspiracy to commit economic espionage, following a four-week jury trial that ended on March 31, 2022. According to court documents, Zheng was employed at GE Power in Schenectady, New York, as an engineer specializing in turbine sealing technology. He worked at GE from 2008 until the summer of 2018. The trial evidence demonstrated that Zheng and others in China conspired to steal GE’s trade secrets surrounding GE’s ground-based and aviation-based turbine technologies, knowing or intending to benefit the PRC and one or more foreign instrumentalities, including China-based companies and universities that research, develop, and manufacture parts for turbines. Zheng was sentenced to pay a $7,500 fine and serve one year of post-imprisonment supervised release.

https://www.justice.gov/opa/pr/former-ge-power-engineer-sentenced-conspiracy-commit-economic-espionage

January 5, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Nathan Christopher Ball until November 26, 2024. On November 6, 2019, in the U.S. District Court for the District of New Mexico, Nathan Christopher Ball (Ball) was convicted of violating 18 U.S.C. § 371 and 18 U.S.C. § 554(a). Specifically, Ball was convicted of conspiring to smuggle from the US to Mexico, firearms and ammunition without the required license or written authorization. As a result of his conviction, the Court sentenced Ball to 27 months of confinement, two years of supervised release, a $300 assessment, and $50,000 criminal fine.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1439-e2780/file

January 5, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Hany Veletanlic until January 27, 2030. On January 27, 2020, in the U.S. District Court for the Western District of Washington, Hany Veletanlic (Veletanlic) was convicted of violating Section 38 of the Arms Export Control Act (22 U.S.C § 2778) (AECA). Specifically, Veletanlic was convicted of willfully exporting from the US to Sweden defense articles designated on the United States Munitions List, namely a Glock lower 23 receiver, without having obtained from the United States Department of State a license or written approval for the export of the defense article. As a result of his conviction, the Court sentenced Veletanlic to 85 months of confinement, three years of supervised release, and a $400 assessment.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1440-e2781/file

January 5, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Mauricio Robles until December 1, 2028. On December 1, 2021, in the U.S. District Court for the District of Arizona, Mauricio Robles (Robles) was convicted of violating 18 U.S.C. § 554(a). Specifically, Robles was convicted of smuggling and attempting to smuggle from the US to Mexico 1,680 rounds of 5.56mm ammunition, 1,000 rounds of 10mm ammunition, 3,200 rounds of 7.62x39mm ammunition, and 50 rounds of 7.62x25mm ammunition. As a result of his conviction, the Court sentenced Robles to 37 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-2022/1441-e2782/file

January 9, 2023: Behrouz Mokhtari, 72, of McLean, Virginia, and Tehran, Iran, a naturalized U.S. citizen, pleaded guilty to two separate conspiracies to violate sanctions imposed by the United States on Iran regarding the exportation, re-exportation, sale, or supply, directly or indirectly, of any goods, technology, or services to Iran. According to his guilty plea, from at least March 2018 until at least September 2020, Mokhtari conspired with his co-defendant and others to evade Iranian sanctions by engaging in business activities on behalf of Iranian entities without first obtaining the required licenses from the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).

Mokhtari held management positions and/or maintained ownership control of multiple businesses in Iran and the United Arab Emirates (UAE), referred to collectively as “the FSR Network.” Mokhtari and his co-conspirators used the FSR Network to provide services to Iranian entities and engage in transactions involving Iranian petrochemical products, including refining petrochemical products and transporting them by sea. Mokhtari and his co-conspirators used bank accounts located in the UAE, including Bitubiz FZE, which was part of the FSR Network and over which Mokhtari exercised partial or complete control, to process these U.S. dollar transactions.

As part of his guilty plea, Mokhtari must forfeit money, property, and assets derived from, obtained as the result of, or used to facilitate the commission of his illegal activities, including the residence he purchased in Campbell, California, and money judgment in the amount of $2,862,598.12. Mokhtari faces a maximum sentence of five years in federal prison for each of the two conspiracy counts and is scheduled for sentencing on April 3.

https://www.justice.gov/opa/pr/virginia-man-pleads-guilty-conspiring-violate-iranian-sanctions

January 11, 2023: Tao Jiang, the president and owner of Broad Tech System, Inc., a California-based electronics distribution company, admitted to a federal judge in Providence that he and his company participated in a conspiracy to conceal information from the U.S. Department of Commerce and U.S. Customs and Border Protection as part of a scheme to illegally export chemicals manufactured and/or distributed by a Rhode Island-based company to a technology company in China with ties to the Chinese military, announced United States Attorney Zachary A. Cunha.

Tao Jiang, aka Jason Jiang, 53, of Riverside, CA, and Broad Tech Systems, Inc., pleaded guilty as charged by way of indictment to conspiracy, violation of the Export Control Act, and money laundering conspiracy.

Jiang and Broad Tech System admitted that they conspired together and with Bohr Winn-Shih, an engineer employed at Broad Tech System, to order the chemicals Photoresist and HPRD (Developer) from a North Kingstown-based manufacturer, then knowingly submitted false and misleading documentation to the U.S. Government and to shipping companies in an effort to have those products illegally shipped to a company in China, in violation of the Export Control Reform Act.

https://www.justice.gov/usao-ri/pr/california-based-company-company-president-plead-guilty-scheme-violate-export-control-act

January 17, 2023: 88 Fed. Reg. 2605: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Brett McGinnis until September 16, 2031. On September 16, 2021, in the U.S. District Court for the Southern District of Texas, Brett McGinnis was convicted of violating 18 U.S.C. 554. Specifically, McGinnis was convicted of knowingly and willfully exporting and smuggling from the United States to Mexico, a Beretta Model 84, .380 caliber pistol; a Beretta, Model 92FS, .22LR caliber pistol; 2,451 rounds of .22 caliber ammunition; 1,500 rounds of Fiocchi .38 Super Caliber Ammunition, 500 rounds of Magtech .44 Caliber Ammunition; 440 rounds of TulAmmo 7.62 caliber Ammunition; 300 Rounds of G2 Research .380 Caliber Ammunition; 200 Rounds of G2 Research 9mm Ammunition; 200 Rounds of Hornady .270 Caliber Ammunition; 150 Rounds of Remington .45 Caliber Colt Ammunition; 120 Rounds of Remington .308 Caliber Ammunition; and various other firearms, firearms parts, and ammunition. As a result of his conviction, the Court sentenced McGinnis to 24 months in prison, three years supervised release, $100 special assessment, and a $10,000 fine.

https://www.federalregister.gov/documents/2023/01/17/2023-00711/in-the-matter-of-brett-mcginnis-54-north-st-andrews-drive-ormond-beach-fl-32174-order-denying-export

January 17, 2023: 88 Fed. Reg. 2604: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Ge Song Tao until July 14, 2031. On July 14, 2021, in the U.S. District Court for the Middle District of Florida, Ge Song Tao was convicted of violating 18 U.S.C. 371 and 18 U.S.C. 554(a). Specifically, Ge was convicted of conspiring to submit false export information through the federal government’s Automated Export System and to export maritime raiding craft and engines to China fraudulently and attempting to export that equipment fraudulently. As a result of his conviction, the Court sentenced Ge to 42 months of confinement, three years of supervised release, a $50,000 criminal fine, and $200 assessment.

https://www.federalregister.gov/documents/2023/01/17/2023-00710/in-the-matter-of-ge-song-tao-ge-block-3-zijinyuan-no-5-muxuyuan-street-nanjing-210007-china-order

January 17, 2023: 88 Fed. Reg. 2603: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Daniel Medina until February 22, 2026. On February 22, 2019, in the U.S. District Court for the District of Arizona, Jose Daniel Medina was convicted of violating 18 U.S.C. 554. Specifically, Medina was convicted of knowingly smuggling and attempting to smuggle from the United States to Mexico one (1) Barrett model 50 BMG and a .50 caliber rifle. As a result of his conviction, the Court sentenced Medina to 37 months in prison, with credit time served, three years supervised release, and a $100 special assessment.

https://www.federalregister.gov/documents/2023/01/17/2023-00709/in-the-matter-of-jose-daniel-medina-calle-los-piros-72-colonia-luis-donaldo-colosio-nogales-sonora

January 17, 2023: Jonathan Yet Wing Soong pleaded guilty to violating export control laws in connection with a scheme to secretly funnel sensitive aeronautics software to a Beijing university. Between August 2016 and September 2020, Soong, 35, of Castro Valley, Calif., was employed as a program administrator by Universities Space Research Association (USRA), a nonprofit research corporation focusing on advancing space science and technology. In April of 2016, USRA contracted with the National Aeronautics and Space Administration (NASA) to, among other things, license and distribute aeronautics-related Army flight control software for a fee. Soong’s duties included, among other things, conducting and servicing software license sales, conducting export compliance screening of customers, generating software licenses, and exporting software pursuant to purchased licenses. As part of his duties, Soong was responsible for vetting customers to ensure they did not appear on certain restrictive lists—including the Department of Commerce’s Entity List and other U.S. government lists—that placed limitations on the transfer of products to identified entities. In pleading guilty, Soong admitted that he willingly exported and facilitated the sale and transfer of restricted software to Beihang University, knowing that the university was on the Department of Commerce’s Entity List. According to government filings in the case, Beihang University was added to the Entity List due to the University’s involvement in the People’s Republic of China military rocket systems and unmanned air vehicle systems. In his plea agreement, Soong acknowledged he used an intermediary to complete the export of the program to avoid detection that the real purchaser was on the Entity List. Soong remains out of custody pending sentencing.

https://www.justice.gov/usao-ndca/pr/castro-valley-resident-pleads-guilty-illegally-exporting-american-aviation-technology

January 18, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Eli Isael Rodriguez-Jasso until October 28, 2026. On October 28, 2020, in the U.S. District Court for the Western District of Texas, Eli Isael Rodriguez-Jasso (“Rodriguez-Jasso”) was convicted of violating 18 U.S.C. § 554(a). Specifically, Rodriguez-Jasso was convicted of knowingly and unlawfully exporting or attempting to export from the United States to Mexico ammunition and two firearms magazines in violation of 18 U.S.C. § 554. As a result of his conviction, the Court sentenced Rodriguez-Jasso to 46 months in prison, with credit for time served, three years supervised release and a $100 assessment.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1443-e2787/file

January 18, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Jermaine Craig Rhoomes until February 5, 2030. On February 5, 2020, in the U.S. District Court for the Middle District of Florida, Jermaine Craig Rhoomes (“Rhoomes”) was convicted of violating Section 38 of the Arms Export Control Act (22 U.S.C. § 2778) (“AECA”). Specifically, Rhoomes was convicted of knowingly and willfully exporting and causing to be exported from the U.S. to Jamaica two (2) 7.62-caliber AK47-style rifles; five (5) 5.56-caliber AR15-style rifles; four (4) 9mm-caliber pistols; two (2) .40-caliber pistols; two (2) .45-caliber pistols; 3,315 rounds of ammunition; and 38 firearm magazines, all of which were designated as defense articles on the United States Munitions List at the time of export, without first obtaining the required license or written authorization from the Department of State.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1442-e2786/file

January 20, 2023: Two businessmen, Vladislav Osipov, 51, a Russian national, and Richard Masters, 52, a United Kingdom national, are charged in separate indictments in the U.S. District Court for the District of Columbia, with facilitating a sanctions evasion and money laundering scheme in relation to the ownership and operation of the Motor Yacht (M/Y) Tango (International Maritime Organization number 1010703), a $90 million, a 255-foot luxury yacht owned by sanctioned Russian oligarch Viktor Vekselberg. The defendants are charged with conspiracy to defraud the United States and to commit offenses against the United States, violating the International Emergency Economic Powers Act (IEEPA) and money laundering. The United States requested that the Kingdom of Spain provisionally arrest Masters for purposes of extradition. The arrest was executed by the Spanish Guardia Civil. An arrest warrant against Osipov is outstanding.

https://www.justice.gov/opa/pr/arrest-and-criminal-charges-announced-against-british-and-russian-businessmen-facilitating

January 23, 2023: A former Special Agent in Charge of the FBI New York Counterintelligence Division and a former Soviet and Russian diplomat were arrested Saturday on criminal charges related to their alleged violating and conspiring to violate the International Emergency Economic Powers Act (IEEPA) and conspiring to commit money laundering and money laundering.

According to court documents, Charles F. McGonigal, 54, of New York City, and Sergey Shestakov, 69, of Morris, Connecticut, are charged in a five-count indictment in the Southern District of New York with violating and conspiring to violate the IEEPA, and with conspiring to commit money laundering and money laundering.

According to court documents, on April 6, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Oleg 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. 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.

McGonigal is a former Special Agent in Charge (SAC) of the FBI’s Counterintelligence Division in New York who retired in 2018. While working at the FBI, McGonigal supervised and participated in investigations of Russian oligarchs, including Deripaska. Sergey Shestakov is a former Soviet and Russian diplomat who later became a U.S. citizen and a Russian interpreter for courts and government offices.

https://www.justice.gov/opa/pr/former-special-agent-charge-fbi-new-york-counterintelligence-division-charged-violating-us

January 26, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has renewed the Temporary Denial Order denying the export privileges of Empresa de Transporte Aéreocargo del Sur, S.A., a/k/a Aerocargo del Sur Transportation Company, a/k/a EMTRASUR, located at Avenida Intercomunal, Edificio Sede, Sector 6.3, Maiquetia, Distrito Federal, Venezuela, and Avenida Lecuna Torre Oeste Piso 49, Libertador, Caracas, Venezuela, for an additional 180 days. As noted in OEE’s initial request for a temporary denial order, EMTRASUR is a subsidiary of Consorcio Venezolano de Industrias Aeronauticas Y Servicios Aereos, S.A., a/k/a CONVIASA (“CONVIASA”), a Venezuelan state-owned airline.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2023/1447-e2788/file

JANUARY 2023 EXPORT CONTROL REGULATION UPDATES Read More »

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.

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.

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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

DECEMBER 2022 EXPORT CONTROLS AND COMPLIANCE UPDATE Read More »

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:

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;
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.

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:

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.

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

NOVEMBER 2022 EXPORT CONTROLS AND COMPLIANCE UPDATE Read More »

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:

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.

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.

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.

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:

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;

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;

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

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:

(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:

(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

OCTOBER 2022 EXPORT CONTROLS AND COMPLIANCE UPDATE Read More »

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:

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.
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.
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).
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.
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 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:

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.

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.

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.

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

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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

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