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MAY 2022 EXPORT CONTROL REGULATION UPDATES

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

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

REGULATORY UPDATES

The President

The United States, European Union And G7 Increase Cost On Russia By Increased Sanctions For Ukraine Invasion

May 8, 2022: the United States, the European Union and G7 committed to ratchet up the costs on Russia for its invasion of Ukraine by collectively taking further measures, consistent with each partner’s respective legal authorities and processes. The White House issued the following information regarding the actions the United States is taking:

Targeting State-Controlled Media Within Russia That Bolster Putin’s War. The United States will sanction three of Russia’s most highly-viewed directly or indirectly state-controlled television stations in Russia – Joint Stock Company Channel One Russia, Television Station Russia-1, and Joint Stock Company NTV Broadcasting Company. All three stations have been among the largest recipients of foreign revenue, which feeds back to the Russian State’s revenue.

Banning Services that Help Finance Putin’s War and Aid Sanctions Evasion. The United States will prohibit U.S. persons from providing accounting, trust and corporate formation, and management consulting services to any person in the Russian Federation. These services are key to Russian companies and elites building wealth, thereby generating revenue for Putin’s war machine, and to trying to hide that wealth and evade sanctions. This action builds on previous prohibitions to restrict the export of goods related to aerospace, marine, electronics, technology, and defense and related materiel sectors of the Russian economy.

Cutting off Imports of Russian Oil and Reducing Dependence on Russian Energy. The United States has already banned the import of Russian oil, gas, and coal. The entire G7 committed to phasing out or banning the import of Russian oil. This will hit hard at the main artery of Putin’s economy and deny Putin the revenue needed to fund this war. The G7 also committed to work together to ensure stable global energy supplies, while accelerating efforts to reduce dependence on fossil fuels.

Impose further export controls and sanctions to degrade Russia’s war efforts. The United States will issue a new rule that imposes additional restrictions on Russia’s industrial sector, including a broad range of inputs and products including wood products, industrial engines, boilers, motors, fans, and ventilation equipment, bulldozers, and many other items with industrial and commercial applications. These new controls will further limit Russia’s access to items and revenue that could support its military capabilities. The United States also sanctioned Limited Liability Company Promtekhnologiya, which produces rifles and other weapons that have been used in military operations in Ukraine; seven shipping companies, which own or operate 69 vessels; and one marine towing company. The Nuclear Regulatory Commission will also suspend general licenses for exports of source material, special nuclear material, byproduct material, and deuterium to Russia.

Impose Sanctions on Russian Elites and their Family Members and Visa Restrictions on Russian and Belarusian Officials Undermining the Sovereignty, Territorial Integrity, or Political Independence of Ukraine. The United States imposed approximately 2,600 visa restrictions on Russian and Belarusian officials in response to their ongoing efforts to undermine the sovereignty, territorial integrity, or political independence of Ukraine. Additionally, the United States issued a new visa restriction policy that applies to Russian Federation military officials and Russia-backed or Russia-installed purported authorities who are believed to have been involved in human rights abuses, violations of international humanitarian law, or public corruption in Ukraine. The United States also sanctioned eight executives from Sberbank– the largest financial institution in Russia and uniquely important to the Russian economy, holding about a third of all bank assets in Russia; twenty-seven executives from Gazprombank – a prominent Russian bank facilitating business by Russia’s Gazprom, one of the largest natural gas exporters in the world; and Moscow Industrial Bank and its ten subsidiaries.

https://www.whitehouse.gov/briefing-room/statements-releases/2022/05/08/fact-sheet-united-states-and-g7-partners-impose-severe-costs-for-putins-war-against-ukraine/

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

DDTC Name And Address Changes Posted To Website

May 4 through 20, 2022: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at

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

Change in Name from Wartsila ELAC Nautik GmbH to ELAC Sonar GmbH due to Warsila divestiture of ELAC Nautik;
RUAG International Holding AG subsidiaries will change names as follows due to corporate rebranding:

Old Name	New Name
RUAG Schweiz AG (Space Business Line)	Beyond Gravity Schweiz AG
RUAG Corporate Services AG	Beyond Gravity Services AG
RUAG Slip Rings SA	Beyond Gravity Slip Rings SA
RUAG Sweden AB	Beyond Gravity Holding Sweden AB
RUAG Space AB	Beyond Gravity Sweden AB
RUAG Space GmbH	Beyond Gravity Austria GmbH
RUAG Space Finland OY AB	Beyond Gravity Finland OY
RUAG Space Germany GmbH	Beyond Gravity Germany GmbH
RUAG Schweiz AG (Aerostructures Business Line transferred to RUAG Aerostructures Schweiz AG)	RUAG Aerostructures Schweiz AG (spin-off)

Change in Name from Hamex Hardmetallverktyg AB to Hamex Precision Tools AB due to corporate rebranding;
Eaton Corporation entities will change names as follows due to corporate rebranding:

Old Name	New Name
Cobham Mission Systems Wimborne Limited (UK)	Mission Systems Wimborne Limited
Cobham India Private Limited (India)	Mission Systems India Private Limited

Change in Name from Ylipson GmbH to Ylipson by DERICHEBOURG GmbH due to acquisition by DERICHEBOURG GmbH;
The following Mitsubishi Electric Corporation subsidiaries changed their names and addresses as a result of a corporate reorganization:

New Name	New Address
Mitsubishi Electric Software Corporation	2-4-1, Hamamatsu-cho, Minato-ku, Tokyo 105- 5129, Japan
Old Name	Old Address
MELCO Power Systems Corporation	1-1-2 Wadasaki-cho, Hyogo-ku, Kobe, Hyogo 652-8555, Japan
Mitsubishi Electric Micro-Computer Application Software Co., Ltd.	2-5-1, Inadera, Amagasaki, Hyogo 661-0981, Japan
Mitsubishi Space Software Co., Ltd.	2-4-1, Hamamatsu-cho, Minato-ku, Tokyo 105- 5129, Japan
Nippon Advanced Technology Co., Ltd.	2-4-1, Hamamatsu-cho, Minato-ku, Tokyo 105- 5129, Japan
Mitsubishi Electric Control Software Corporation	1-1-2, Wadasaki-cho, Hyogo-ku, Kobe, Hyogo 652-8555, Japan
Mitsubishi Electric Mechatronics Software Corporation	5-1-14, Yadaminami, Higashi-ku, Nagoya, Aichi 461-8670, Japan

Change in Name from Mistequay Group, Ltd to Textron Aviation Inc., due to acquisition by Textron Aviation Inc.

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U.S. Department Of State Certifies Countries Not Cooperating With U.S. Antiterrorism Efforts

May 2022: 87 Fed. Reg. 31051: Pursuant to section 40A of the Arms Export Control Act (22 U.S.C. 2781), and E.O. 13637, as amended, the U.S. Department of State determined and certified to the Congress that the following countries are not cooperating fully with United States antiterrorism efforts: Iran, Democratic People's Republic of Korea (DPRK, or North Korea), Syria, Venezuela, and Cuba.

https://www.federalregister.gov/documents/2022/05/20/2022-10829/determination-and-certification-of-countries-not-cooperating-fully-with-antiterrorism-efforts

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U.S. Department Of State Revokes Designation Of Certain Organizations As Foreign Terrorist Organizations

May 20, 2022: Based upon a review of the Administrative Record assembled in this matter and in consultation with the Attorney General and the Secretary of the Treasury, Secretary of State Antony Blinken has concluded that the circumstances that were the basis for the designation of the following as a Foreign Terrorist Organization have changed in such a manner as to warrant revocation of the designation:

Aum Shinrikyo (and Other Aliases), 87 Fed. Reg. 31050: https://www.federalregister.gov/documents/2022/05/20/2022-10866/in-the-matter-of-the-designation-of-aum-shinrikyo-and-other-aliases-as-a-foreign-terrorist
Basque Fatherland and Liberty (and other aliases), 87 Fed. Reg. 31050: https://www.federalregister.gov/documents/2022/05/20/2022-10866/in-the-matter-of-the-designation-of-aum-shinrikyo-and-other-aliases-as-a-foreign-terrorist
Gama'a al-Islamiyya (and other aliases), 87 Fed. Reg. 31050: https://www.federalregister.gov/documents/2022/05/20/2022-10866/in-the-matter-of-the-designation-of-aum-shinrikyo-and-other-aliases-as-a-foreign-terrorist
Kahane Chai (and other aliases), 87 Fed. Reg. 31050: https://www.federalregister.gov/documents/2022/05/20/2022-10866/in-the-matter-of-the-designation-of-aum-shinrikyo-and-other-aliases-as-a-foreign-terrorist
Mujahidin Shura Council in the Environs of Jerusalem (and other aliases), 87 Fed. Reg. 31051: https://www.federalregister.gov/documents/2022/05/20/2022-10826/in-the-matter-of-the-designation-of-mujahidin-shura-council-in-the-environs-of-jerusalem-and-other

Secretary Blinken has also revoked the designation of the following as a Specially Designated Global Terrorist under Executive Order 13224 of September 23, 2001: 87 Fed. Reg. 31055:

Mohad Moalim;
Farah Mohamed Shirdon;
Musa Abu Dawud;
Aliaskhab Kebekov;
Ibrahim al-Rubaysh; and
Abu al-Wardah as-Syarqi (and Their Respective Aliases).

https://www.federalregister.gov/documents/2022/05/20/2022-10825/revocation-of-the-designations-of-mohad-moalim-farah-mohamed-shirdon-musa-abu-dawud-aliaskhab

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

The U.S. And Japan Agree To Lead International Efforts To Strengthen Export Controls On Semiconductors And Other Cutting-Edge Technologies

May 5, 2022: Japanese Minister of Economy, Trade and Industry Koichi Hagiuda and U.S. Commerce Secretary Gina Raimondo have agreed that the two countries will lead international efforts to strengthen export controls on semiconductors and other cutting-edge technologies. The agreement was reached at their meeting in Washington on May 4, 2022. Japan and the United States will work with other countries and regions that advocate free trade to prevent such advanced technologies from being used for military and other undesirable purposes. The two countries will take the lead in holding in-depth discussions on establishing a responsible export control framework among like-minded countries, Hagiuda told a press conference after the meeting. https://www.nippon.com/en/news/yjj2022050500487/

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BIS Outlines Key Changes To Its Administrative Enforcement Policies

May 16, 2022: The U.S. Department of Commerce, Bureau of Industry and Security’s (BIS) Assistant Secretary for Export Enforcement, Matthew S. Axelrod, outlined key changes to its administrative enforcement policies for export control violations under the Export Administration Regulations (EAR), as follows:

First, BIS’ administrative charging letters are currently not available to the public until after a case resolves. This means that the public is not aware of which companies BIS alleges have violated the EAR until the matter is completed, often years later. Moreover, it means that companies that may be engaging in similar misconduct aren’t fully disincentivized to stop, given that they are not given real-time examples of what happens when you violate the EAR. Therefore, BIS is considering changing this policy to make charging letters public when filed, just like with the initiation of criminal charges or of administrative proceedings with the SEC.

Second, BIS is reconsidering its use of no admit/no deny settlements. In the past, when BIS has resolved administrative enforcement matters short of trial, BIS has allowed companies to pay a reduced penalty without admitting misconduct. While doing so makes it easier to reach such resolutions, no admit/no deny settlements also have two significant downsides. One there’s no statement of facts that the company admits to. Without such an admitted statement of facts, it is more difficult for other companies to learn from their peers’ mistakes and adjust their behavior accordingly. In addition, companies get a significant reduction in a penalty when they resolve with BIS short of trial. That makes sense, as BIS wants to incentivize companies to resolve matters. However, in other enforcement contexts, companies must admit their conduct in order to qualify for the reduced penalty. BIS is concerned that without admitted facts, BIS may not be sending a deterrent message as strong as we believe warranted when the export laws are violated, especially given the magnitude of the national security threats those laws are designed to help combat.

Third, BIS is looking at penalty amounts. Penalties must be high enough to both punish and deter those who would violate the law. If penalties are low, it is too easy for companies to do a cost-benefit analysis and conclude that they would rather risk paying a small fine on the back end if they get caught than invest in compliance systems or forego revenue from sales they should be turning down upfront.

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/2992-2022-05-16-remarks-as-axelrod-to-sia/file

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BIS Seeks Public Comment On Control Of Four Naturally Occurring, Dual-Use Biological Toxins

May 23, 2022: 87 Fed. Reg. 31195: The U.S. Department of Commerce, Bureau of Industry and Security (BIS) published an interim final rule requesting public comment on the proposed new unilateral export controls on four naturally occurring, dual-use biological toxins (specifically, the marine toxins brevetoxin, gonyautoxin, nodularin and palytoxin), the synthesis and collection of which BIS has identified for evaluation according to the criteria in Section 1758 of the Export Control Reform Act of 2018 (ECRA) pertaining to emerging and foundational technologies. These toxins have the potential (through either accidental or deliberate release) to cause casualties in humans or animals, degrade equipment, or damage crops or the environment.

https://www.govinfo.gov/content/pkg/FR-2022-05-23/pdf/2022-10907.pdf

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BIS Finalized Changes To License Exception ACE

May 26, 2022: 87 FR 31948: BIS is finalizing changes to License Exception ACE and corresponding changes in the definition section of the Export Administration Regulations (EAR) in response to public comments to an October 21, 2021 interim rule. That rule established a new control on certain cybersecurity items for National Security (NS) and Anti-terrorism (AT) reasons, as well as added a new License Exception Authorized Cybersecurity Exports (ACE) that authorizes exports of these items to most destinations except in certain circumstances. These items warrant controls because these tools could be used for surveillance, espionage, or other actions that disrupt, deny or degrade the network or devices on it. This rule also corrects Export Control Classification Number (ECCN) 5D001 in the Commerce Control List.

https://www.bis.doc.gov/index.php/documents/federal-register-notices-1/3000-87-fr-31948-cyber-final-rule-0694-ah56-5-26-22/file

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U.S. Customs & Border Patrol

CBP Expands Foreign Trade Zone Identifier From 7 to 9 Characters

May 11, 2022: 85 Fed. Reg. 60479: The U.S. Customs and Border Protection (CBP) published a Federal Register Notice (85 FR 60479) that requires the expansion of the Foreign Trade Zone Identifier from 7 to 9-characters. As a result, the Automated Export System and the Automated Export System Trade Interface Requirements (AESTIR) have been updated to accommodate this change effective May 17, 2022. The AESDirect web application is updated to accept the new 9-character requirement

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U.S.-EU Trade and Technology Council

The U.S.-EU To Continue Coordinating Actions To Mitigate The Negative Impacts Of Russia’s Aggression Against Ukraine On The Global And Ukraine Economy

The co-chairs of the U.S.-EU Trade and Technology Council (“TTC”), United States Secretary of Commerce Gina Raimondo, United States Trade Representative Katherine Tai, European Commission Executive Vice President Margrethe Vestager, and European Commission Executive Vice President Valdis Dombrovskis, joined by European Commissioner Thierry Breton, held the second meeting of the Trade and Technology Council in Paris-Saclay on 16 May 2022, hosted by the French Presidency of the Council of the European Union, and issued the following Joint Statement on behalf of the United States of America and the European Union:

The U.S.-EU partnership is a cornerstone of our shared strength, prosperity, and commitment to freedom, democracy, and respect for human rights. In the past year, we have strengthened, deepened, and elevated our relationship. As recent events have proven, strong transatlantic bonds and cooperation on issues related to trade, technology, and security are more important than ever.

The U.S.-EU strongly condemn Russia’s military aggression against Ukraine, as a premeditated and unprovoked further invasion of a sovereign state in violation of international law, which threatens the multilateral rules-based order. The U.S.-EU support the Ukrainian people and their right to choose their own future.

The U.S.-EU remain committed to upholding Ukraine’s sovereignty, independence, and territorial integrity. We have cooperated closely to impose significant consequences on Russia for its continued aggression against Ukraine. The foundation that we cemented through the TTC was indispensable for fostering the unprecedented level of cooperation on export controls and sanctions in response to Russia’s further invasion of Ukraine, both between the U.S.-EU and with other allies and partners.

The U.S.-EU plan to continue coordinating our actions to mitigate the negative impacts of Russia’s aggression against Ukraine on the global economy, and on Ukraine’s economy in particular. U.S.-EU remain resolute in our efforts to work jointly with Ukraine to rebuild its economy and revive its entrepreneurial vigor, facilitate trade and investment, and address global challenges resulting from Russia’s actions. This includes addressing supply chain ruptures created by Russia’s aggression, with regard to industrial and food commodities. The TTC intends to develop common approaches and explore shared solutions toward improving supply chain resiliency, fostering predictability and trade diversification. 5. U.S.-EU confirm to continue to oppose actors who threaten the multilateral rules-based order and fundamental principles of international law. To protect U.S.-EU citizens, the U.S.-EU will draw upon bilateral trade and investment relations, our joint technology leadership, the transatlantic security partnership, and our shared democratic values. U.S.-EU cooperation and coordination in the TTC is essential to this effort, and we are committed to maintaining the TTC as a central pillar of the U.S.-EU transatlantic partnership.

https://www.commerce.gov/sites/default/files/2022-05/US-EU-Joint-Statement-Trade-Technology-Council.pdf

LATEST SANCTIONS FINES & PENALTIES

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

Sanctions

The U.S. Department of State:

May 4, 2022: 87 Fed. Reg. 26385: The Secretary of State has determined that KVT-RUS, has knowingly, on or after July 15, 2020, made an investment, or sold, leased, or provided to the Russian Federation, for the construction of Russian energy export pipelines, goods, services, technology, information, or support, any of which has a fair market value of $1,000,000 or more, or that during a 12 month period, have an aggregate fair market value of $5,000,000 or more. The Secretary of State has additionally determined that KVT-RUS, has knowingly, on or after January 1, 2021, sold, leased, or provided, or facilitated selling, leasing, or providing, a vessel that engaged in pipe-laying or pipe-laying activities at depths of 100 feet or more below sea level for the construction of the Nord Stream 2 pipeline project.

Pursuant to sections 232(a)(1) and 235 of Countering America's Adversaries Through Sanctions Act (CAATSA) and E.O. 13849, the Secretary of State has selected the following sanctions to be imposed upon KVT-RUS:

Order the United States Government not to issue any specific license and not to grant any other specific permission or authority to export any goods or technology to KVT-RUS (section 235(a)(2));
Prohibit any transactions in foreign exchange that are subject to the jurisdiction of the United States and in which KVT-RUS has any interest (section 235(a)(7));
Prohibit any transfers of credit or payments between financial institutions or by, through, or to any financial institution, to the extent that such transfers or payments are subject to the jurisdiction of the United States and involve any interest of KVT-RUS (section 235(a)(8));
Prohibit any person from acquiring, holding, withholding, using, transferring, withdrawing, transporting, importing, or exporting any property that is subject to the jurisdiction of the United States and with respect to which KVT-RUS has any interest (section 235(a)(9)(A); dealing in or exercising any right, power, or privilege with respect to such property (section 235(a)(9)(B)); or conducting any transaction involving such property (section 235(a)(9)(C));
Prohibit any United States person from investing in or purchasing significant amounts of equity or debt instruments of KVT-RUS (section 235(a)(10);
Block all property and interests in property of KVT-RUS that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person and provide that such property and interests in property may not be transferred, paid, exported, withdrawn, or otherwise dealt in (E.O. 13849 Section 1(a)(iv)).

Pursuant to Section 7503(c) of Protecting Europe's Energy Security Act (PEESA), as amended (“PEESA”) as amended, Sections 232(a)(1) and 235 of CAATSA, and E.O. 13849, KVT-RUS has been added to the Specially Designated Nationals and Blocked Persons List.

All property and interests in property of KVT-RUS subject to U.S. jurisdiction are blocked.

https://www.federalregister.gov/documents/2022/05/04/2022-09564/notice-of-department-of-state-sanctions-actions-pursuant-to-the-countering-americas-adversaries

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May 4, 2022: 87 Fed Reg 26386: The Secretary of State has determined, pursuant to Section 7503(a)(1)(B)(i) of PEESA, as amended, that Transadria Ltd has knowingly, on or after January 1, 2021, sold, leased, or provided, or facilitated selling, leasing, or providing, a vessel that engaged in pipe-laying or pipe-laying activities at depths of 100 feet or more below sea level for the construction of the Nord Stream 2 pipeline project.

Pursuant to E.O. 13049 and Section 7503(c) of PEESA, as amended, this entity has been added to the Specially Designated Nationals and Blocked Persons List. All property and interest in property of this entity subject to U.S. jurisdiction is blocked. The following vessel subject to U.S. jurisdiction is blocked:

Marlin (IMO 9396854) (Linked To: Transadria Ltd).

https://www.federalregister.gov/documents/2022/05/04/2022-09566/notice-of-department-of-state-sanctions-actions-pursuant-to-the-protecting-europes-energy-security

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May 4, 2022: 87 Fed Reg 26387: The Secretary of State has determined, pursuant to Section 7503(a)(1)(B)(i) of PEESA, as amended, that Joint Stock Company Nobility has knowingly, on or after January 1, 2021, sold, leased, or provided, or facilitated selling, leasing, or providing, a vessel that engaged in pipe-laying or pipe-laying activities at depths of 100 feet or more below sea level for the construction of the Nord Stream 2 pipeline project.

The Secretary of State has also determined, pursuant to Section 7503(a)(1)(B)(iii) of PEESA, as amended, that Konstanta, OOO has knowingly, on or after January 1, 2021, provided underwriting services or insurance or reinsurance to a vessel identified in section 7503(a)(1)(A).

Pursuant to E.O. 13049 and Section 7503(c) of PEESA, as amended, these entities have been added to the Specially Designated Nationals and Blocked Persons List. All property and interests in property of these entities subject to U.S. jurisdiction are blocked. The following vessels subject to U.S. jurisdiction are blocked:

Ostap Sheremeta (IMO 9624225) (Linked To: Joint Stock Company Nobility); and
Ivan Sidorenko (IMO 9624213) (Linked To: Joint Stock Company Nobility).

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May 25, 2022: The U.S. Department of State has taken the following sanctions actions against various Russian individuals and entities:

87 Fed. Reg. 31925:

Arkady Romanovich Rotenberg of Russia;
Dmitriy Sergeevich Peskov;
Sergei Chemezov;
Igor Ivanovich Shuvalov;
Boris Romanovich Rotenberg;
Yekaterina Sergeyevna Ignatova;
Stanislav Sergeyevich Chemezov;
Alexander Sergeevich Chemezov;
Sergey Sergeevich Chemezov;
Anastasia Mikhailovna Ignatova;
Igor Arkadyevich Rotenberg;
Liliya Arkadievna Rotenberg;
Pavel Arkadyevich Rotenberg;
Boris Borisovich Rotenberg;
Roman Borisovich Rotenberg;
Karina Yurevna Rotenberg;
Olga Viktorovna Shuvalova;
Evgeny Igorevich Shuvalov;
Maria Igorevna Shuvalova;
Otkrytye Aktivy OOO;
Sova Nedvizhimost OOO;
Avanfort OOO;
Firma Veardon OOO;
Zareche-4 OOO; and
Limited Liability Company Nemchinovo Investments, and Altitude X3 Ltd.

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

LX-MOW (Linked To: Altitude X3 Ltd).

Pursuant to E.O. 14024 these entities and individuals have been added to the Specially Designated Nationals and Blocked Persons List. All property and interests in property of these entities subject to U.S. jurisdiction are blocked.

https://www.federalregister.gov/documents/2022/05/25/2022-11179/notice-of-department-of-state-sanctions-actions

87 Fed. Reg. 31927:

AO ABR Management;
Elena Aleksandrovna Georgieva;
Valentinovich Belous;
Andrey Yurievich Sapelin, Dmitri Nikolaevich Vavulin;
Yuri Valentinovich Kovalchuk;
Kirill Mikhailovich Kovalchuk;
Dmitri Alekseevich Lebedev;
Vladimir Nikolaevich Knyaginin;
Tatyana Aleksandrovna Kovalchuk;
Boris Yurievich Kovalchuk;
Stepan Kirillovich Kovalchuk; and
Kira Valentinovna Kovalchuk.

https://www.federalregister.gov/documents/2022/05/25/2022-11181/notice-of-department-of-state-sanctions-actions

87 Fed. Reg. 31923:

Kseniya Valentinovna Yudayeva;
Mikhail Yurevich Alekseev;
Anatoly Mikhailovich Karachinskiy;
Vladimir Vladimirovich Kolychev;
Alexey Yurevich Simanovskiy;
Andrey Fedorovich Golikov;
Elena Borisovna Titova;
Mikhail Mikhaylovich Zadornov;
Dmitriy Olegovich Levin;
Svetlana Petrovna Emelyanova;
Tatyana Gennadevna Nesterenko;
Irina Vladimirovna Kremleva;
Viktor Andreevich Nikolaev;
Sergey Georgievich Rusanov;
Nadia Narimanovna Cherkasova; and
Paul Andrew Goldfinch.

https://www.federalregister.gov/documents/2022/05/25/2022-11183/notice-of-department-of-state-sanctions-actions

87 Fed. Reg. 31926:

OOO Volga Group;
Gennady Nikolayevich Timchenko;
Ksenia Gennadevna Frank;
Dmitry Vladimirovich Gusev;
Mikhail Lvovich Kuchment;
Anatoly Alexandrovich Braverman;
Ilya Borisovich Brodskiy;
Aleksey Leonidovich Fisun;
Dmitry Vladimirovich Khotimskiy;
Sergey Vladimirovich Khotimskiy;
Mikhail Vasilyevich Klyukin;
Mikhail Olegovich Avtukhov;
Albert Alexandrovich Boris;
Dmitry Vladimirovich Baryshnikov;
Elena Alexandrovna Cherstvova;
Sergey Nikolaevich Bondarovich;
Oleg Alexandrovich Mashtalyar;
Alexey Valeryevich Panferov;
Irina Nikolayevna Kashina;
Joel Raymond Lautier;
Gleb Sergeevich Frank;
Elena Petrovna Timchenko;
Natalya Browning; and
OOO Transoil.

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

Lena (IMO: 9594339).

https://www.federalregister.gov/documents/2022/05/25/2022-11185/notice-of-department-of-state-sanctions-actions

87 Fed. Reg. 31929:

The Federal State Budgetary Institution Marine Rescue Service (MRS), Limited Liability Company.
Mortransservice (Mortransservice); and
Samara Heat and Energy Property Fund LLC Koksokhimtrans.

These entities were added to the Specially Designated Nationals and Blocked Persons List (SDN List). All property and interests in property of these entities subject to U.S. jurisdiction are blocked.

The following vessels subject to U.S. jurisdiction and were added to the NS-MBS list on May 21, 2021. On August 20, 2021, these vessels were added to the Specially Designated Nationals and Blocked Persons List:

Akademik Cherskiy (IMO 8770261);
Baltiyskiy Issledovatel (IMO 9572020);
Umka (IMO 9171620);
Artemis Offshore (IMO 9747194);
Finval (IMO 9272412);
Narval (IMO 9171876);
Sivuch (IMO 9157820);
Kapitan Beklemishev (IMO 8724080);
Spasatel Karev (IMO 9497531);
Bakhtemir (IMO 9797577);
Murman (IMO 9682423);
Vladislav Strizhov (IMO 9310018); and
Yury Topchev (IMO 9338230).

https://www.federalregister.gov/documents/2022/05/25/2022-11180/notice-of-department-of-state-sanctions-actions-pursuant-to-the-protecting-europes-energy-security

87 Fed. Reg. 31923:

The Secretary of State has terminated the waiver of sanctions under the Protecting Europe's Energy Security Act (PEESA), as amended and imposed sanctions on one entity and one individual pursuant to PEESA against the following entities:

NORD STREAM 2 AG of Switzerland; and

Matthias Warnig of Germany, Switzerland and Russia.

https://www.federalregister.gov/documents/2022/05/25/2022-11186/notice-of-department-of-state-sanctions-actions-pursuant-to-the-protecting-europes-energy-security

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

May 9, 2022: 87 Fed. Reg. 28758: In response to the Russian Federation’s (Russia’s) ongoing aggression against Ukraine, the Department of Commerce is expanding the existing sanctions against Russian industry sectors by imposing a license requirement for exports, reexports, or transfers (in-country) to and within Russia for additional items subject to the Export Administration Regulations (EAR) identified under specific Schedule B numbers or Harmonized Tariff Schedule (HTS) codes. The Bureau of Industry and Security (BIS) is taking these actions to further restrict Russia’s ability to withstand the economic impact of the multilateral sanctions, further limit sources of revenue that could support Russia’s military capabilities, and to better align with the European Union’s controls. This final rule imposes a license requirement for EAR99 products for a variety of industries that fall under the listed Schedule B or HTS codes and luxury goods, beer, wine, alcohol, tobacco, clothing and vehicles. Exporters be aware!

Expansion of Russian Industry Sector Sanctions: This final rule amends part 746 of the EAR (Embargoes and Other Special Controls) to further expand the scope of the Russian industry sector sanctions by adding additional HTS codes and Schedule B numbers to supplement no. 4 to part 746 of the EAR, thereby imposing a license requirement for all exports, reexports, and transfers (in-country) to or within Russia for such items. In this final rule, BIS is adding 205 HTS codes at the 6-digit level and 478 corresponding 10-digit Schedule B numbers to better align with the European Union’s controls.

In addition, this final rule adds one sentence at the end of the introductory text of supplement no. 5 to part 746— ‘Luxury Goods’ That Require a License For Export, Reexport, and Transfer (in-country) to or Within Russia or Belarus Pursuant to § 746.10(a)(1) and (2).

This final rule adds Schedule B number 8705200000 to the introductory text to indicate it is also listed in both supplements no. 2 and 4 and adds a sentence to indicate that Schedule B number 8412294000 is listed in both supplements no. 4 and 5 to this part.

The final rule also clarifies that in addition to Schedule B number 8479899850, Schedule B number 8705200000 is also listed in both supplements no. 2 and 4 and that exporters, reexporters, and transferors must comply with the license requirements under both § 746.5(a)(1)(i) and (ii), as applicable, for these Schedule B numbers.

Clarifications to Supplement No. 4 to Part 746 Controls: This final rule revises supplement no. 4 to part 746 by re-organizing the list of items subject to a license requirement under § 746.5(a)(1)(ii) in order to make it easier for exporters to determine whether a particular item is described in this supplement.

See the following link for the full rule and list of Schedule B numbers or Harmonized Tariff Schedule codes associated with the rule:

https://www.bis.doc.gov/index.php/documents/federal-register-notices-1/2991-87-fr-28758-expansion-of-russian-industry-sector-sanctions-2022-10099/file

Editors note: Before making any export of EAR99 items to Belarus or Russia, exporters are reminded of the significant due diligence required to ensure no license is required from BIS.

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May 13, 2022: The Department of Commerce, Bureau of Industry and Security (BIS) extended a temporary denial order denying export privileges for a period of a 180 days on the ground that issuance of the order was necessary in the public interest to prevent an imminent violation of the Regulations for Mahan Airways, Blue Airways, of Yerevan, Armenia, as well as the “Balli Group Respondents,” namely, Balli Group PLC, Balli Aviation, Balli Holdings, Vahid Alaghband, Hassan Alaghband, Blue Sky One Ltd., Blue Sky Two Ltd., Blue Sky Three Ltd., Blue Sky Four Ltd., Blue Sky Five Ltd., and Blue Sky Six Ltd., all of the United Kingdom.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1369-e2721/file

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May 20, 2022: The U.S. Department of Commerce, Bureau of Industry and Security’s (BIS) Assistant Secretary for Export Enforcement, Matthew S. Axelrod, issued an order denying the export privileges of a fifth Russian airline – Rossiya Airlines – due to ongoing export violations related to comprehensive export controls on Russia imposed by the Commerce Department. This Temporary Denial Order (TDO) terminates the right of Rossiya to participate in transactions subject to the Export Administration Regulations (EAR), including exports and reexports from the United States. This TDO is issued for 180-days and may be renewed.

BIS also publicly identified additional aircraft in likely violation of U.S. export controls, including a 787 Dreamliner owned by Russian oligarch Roman Abramovich. This is the second plane owned by Abramovich identified by BIS, and this listing notifies the public that providing any form or service to this aircraft subject to the EAR requires U.S. Government authorization. BIS is further updating the tail numbers of planes already on the list that have flown into Russia and/or Belarus in apparent violation of the EAR.

For a full listing of the subject aircraft see the following link:

https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/2994-2022-05-20-press-release-bis-rossiya-tdo-and-list-update-final/file

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

May 2, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 30, "Authorizing Transactions Involving Gazprom Germania GmbH Prohibited by Directive 3 under Executive Order 14024."

General License 30: All transactions involving Gazprom Germania GmbH, or any entity in which Gazprom Germania GmbH owns, directly or indirectly, a 50 percent or greater interest, that are prohibited by Directive 3 under Executive Order 14024, Prohibitions Related to New Debt and Equity of Certain Russia-related Entities, are authorized through 12:01 a.m. eastern daylight time, September 30, 2022. This general license does not authorize any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR, unless separately authorized. https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220502 and https://home.treasury.gov/system/files/126/russia_gl30_0.pdf

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May 5, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 7A, General License 26A, General License 31, and General License 32. In addition, OFAC has published one new Frequently Asked Question and amended one Frequently Asked Question.

General License 7A: All transactions ordinarily incident and necessary to the receipt of, and payment of charges for, services rendered in connection with overflights of the Russian Federation or emergency landings in the Russian Federation by aircraft registered in the United States or owned or controlled by, or chartered to, U.S. persons that are prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized. All transactions ordinarily incident and necessary to provide air ambulance and related medical services, including medical evacuation, to individuals in the Russian Federation that are prohibited by the RuHSR are authorized.

This general license does not authorize:

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

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

Effective May 5, 2022, General License No. 7, dated February 24, 2022, is replaced and superseded in its entirety by this General License No. 7A. https://home.treasury.gov/system/files/126/russia_gl7a.pdf

General License 26A: All transactions ordinarily incident and necessary to the wind-down of transactions involving Joint Stock Company SB Sberbank Kazakhstan, Sberbank Europe AG, or Sberbank (Switzerland) AG (collectively, “the blocked Sberbank subsidiaries”), or any entity in which the blocked Sberbank subsidiaries own, directly or indirectly, a 50 percent or greater interest, that are prohibited by Executive Order (E.O.) 14024 are authorized through 12:01 a.m. eastern daylight time, July 12, 2022.

This general license does not authorize:

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

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

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

Effective May 5, 2022, General License No. 26, dated April 12, 2022, is replaced and superseded in its entirety by this General License No. 26A. https://home.treasury.gov/system/files/126/russia_gl26a.pdf

General License 31: The following transactions in connection with a patent, trademark, copyright, or other forms of intellectual property protection in the United States or the Russian Federation that would be prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized:

(1) The filing and prosecution of any application to obtain a patent, trademark, copyright, or other forms of intellectual property protection;

(2) The receipt of a patent, trademark, copyright, or other forms of intellectual property protection;

(3) The renewal or maintenance of a patent, trademark, copyright, or other forms of intellectual property protection; and

(4) The filing and prosecution of any opposition or infringement proceeding with respect to a patent, trademark, copyright, or other forms of intellectual property protection, or the entrance of defense to any such proceeding.

This general license does not authorize:

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

(3) Any transactions prohibited by E.O. 14066 or E.O. 14068. https://home.treasury.gov/system/files/126/russia_gl31.pdf

General License 32: All transactions ordinarily incident and necessary to the wind-down of transactions involving Amsterdam Trade Bank NV, or any entity in which Amsterdam Trade Bank NV owns, directly or indirectly, a 50 percent or greater interest, that is prohibited by Executive Order (E.O.) 14024 are authorized through 12:01 a.m. eastern daylight time, July 12, 2022.

This general license does not authorize:

New Frequently Asked Question:

Question: On April 20, 2022, Transkapitalbank (TKB) was designated pursuant to Russia-related Executive Order 14024. Can U.S. persons continue to engage in Afghanistan-related transactions with TKB?

Answer: Yes. The Office of Foreign Assets Control (OFAC) issued two general licenses (GLs) related to TKB, which allow U.S. persons to engage in certain transactions involving TKB for specified time periods.

Russia-related GL 28 authorizes U.S. persons to engage in certain transactions involving TKB, or any entity in which TKB owns, directly or indirectly, a 50 percent or greater interest, that is ultimately destined for or originating from Afghanistan through 12:01 a.m. eastern daylight time, October 20, 2022.

GL 28 also authorizes U.S. financial institutions to operate correspondent accounts on behalf of TKB, or any entity in which TKB owns, directly or indirectly, a 50 percent or greater interest, provided such accounts are used solely to effect transactions ultimately destined for or originating from Afghanistan that are authorized by the GL. This means that U.S. financial institutions are authorized to debit or credit correspondent accounts maintained for TKB, provided these debits or credits are for payments that are ultimately destined for or originating from Afghanistan.

In addition, through 12:01 a.m. eastern daylight time, May 20, 2022, Russia-related GL 29 authorizes certain transactions ordinarily incident and necessary to the wind-down of transactions involving TKB, or any entity in which TKB owns, directly or indirectly, a 50 percent or greater interest, regardless of whether such transactions are related to Afghanistan. GL 29 does not authorize debits to blocked accounts. https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1032

Revised Frequently Asked Question:

Question: Does Executive Order (E.O.) 14065 block the entire Donetsk and Luhansk oblasts?

Answer: No. E.O. 14065 targets the so-called Donetsk People’s Republic and Luhansk People’s Republic regions of Ukraine or such other regions of Ukraine as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State (collectively, the “Covered Regions”). In determining whether a location is within the regions subject to sanctions, U.S. persons may reasonably rely on vetted information from reliable third parties, such as postal codes and maps.

U.S. persons engaging in activity that does not involve the Covered Regions are not subject to the prohibitions in E.O. 14065. https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1009

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May 6, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned virtual currency mixer Blender.io (Blender), which is used by the Democratic People’s Republic of Korea (DPRK) to support its malicious cyber activities and money-laundering of stolen virtual currency. On March 23, 2022, Lazarus Group, a DPRK state-sponsored cyber hacking group, carried out the largest virtual currency heist to date, worth almost $620 million, from a blockchain project linked to the online game Axie Infinity; Blender was used in processing over $20.5 million of the illicit proceeds. Under the pressure of robust U.S. and UN sanctions, the DPRK has resorted to illicit activities, including cyber-enabled heists from cryptocurrency exchanges and financial institutions, to generate revenue for its unlawful weapons of mass destruction (WMD) and ballistic missile programs.

OFAC updated its List of Specially Designated Nationals and Blocked Persons (SDN List) to identify additional virtual currency addresses used by the Lazarus Group to launder illicit proceeds. Treasury is committed to exposing components of the virtual currency ecosystem, like Blender, that are critical to the obfuscation of the trail of stolen proceeds from illicit cyber activity. OFAC sanctioned the Lazarus Group on September 13, 2019, pursuant to Executive Order (E.O.) 13722, and identified it as an agency, instrumentality, or controlled entity of the Government of the DPRK, based on its relationship to the U.S.- and UN-designated Reconnaissance General Bureau, the DPRK’s premiere intelligence organization, which is also involved in the conventional arms trade. https://home.treasury.gov/news/press-releases/jy0768

See the following link for the list of virtual currency addresses used by the Lazarus Group to launder illicit proceeds: https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220506

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May 8, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated individuals and entities critical to Russia’s ability to wage war against Ukraine. These include the board members of two of Russia’s most important banks, a Russian state-owned bank and 10 of its subsidiaries, a state-supported weapons manufacturer, and three of Russia’s state-controlled television stations that generate revenue for the state. OFAC took this action to cut off access to services that are used by the Russian Federation and Russian elites to evade sanctions. OFAC identified accounting, trust and corporate formation, and management consulting as categories of services that are subject to a prohibition on the export, reexport, sale, or supply, directly or indirectly, from the United States, or by a U.S. person, wherever located, to any person located in the Russian Federation, pursuant to Executive Order (E.O.) 14071. OFAC has further determined that these same services sectors of the Russian Federation economy are subject to sanctions pursuant to E.O. 14024. Wealthy Russians have relied on U.S. expertise to set up shell companies, move wealth and resources to alternate jurisdictions, and conceal assets from authorities around the world. In addition, Russian companies, particularly state-owned and state-supported enterprises, rely on these services to run and grow their businesses, generating revenue for the Russian economy that helps fund Putin’s war machine. https://home.treasury.gov/news/press-releases/jy0771

OFAC also issued Russia-related General License 25A, General License 33, General License 34, and General License 35. OFAC has published a Determination Pursuant to Section 1(a)(i) of Executive Order 14024 and a Determination Pursuant To Section 1(a)(ii) Of Executive Order 14071 as well as new Frequently Asked Questions.

General License 25A: All transactions ordinarily incident and necessary to the receipt or transmission of telecommunications involving the Russian Federation that are prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized. Except as provided in this general license, the exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, wherever located, to the Russian Federation of services, software, hardware, or technology incident to the exchange of communications over the internet, such as instant messaging, videoconferencing, chat and email, social networking, sharing of photos, movies, and documents, web browsing, blogging, web hosting, and domain name registration services, that is prohibited by the RuHSR, is authorized. https://home.treasury.gov/system/files/126/russia_gl25a.pdf

General License 33: All transactions ordinarily incident and necessary to the wind-down of operations, contracts, or other agreements involving one or more of the following blocked persons that were in effect prior to May 8, 2022, and that are prohibited by Executive Order (E.O.) 14024, are authorized through 12:01 a.m. eastern daylight time, June 7, 2022, provided that any payment to a blocked person must be made into a blocked account located in the United States in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR):

(1) Joint Stock Company Channel One Russia;

(2) Joint Stock Company NTV Broadcasting Company;

(3) Television Station Russia-1; or

(4) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest. https://home.treasury.gov/system/files/126/russia_gl33.pdf

General License 34: All transactions ordinarily incident and necessary to the wind-down of the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of accounting, trust and corporate formation, or management consulting services to any person located in the Russian Federation that is prohibited by section 1(a)(ii) of Executive Order 14071 are authorized through 12:01 a.m. eastern daylight time, July 7, 2022. This general license does not authorize any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR, unless separately authorized. https://home.treasury.gov/system/files/126/russia_gl34.pdf

General License 35: All transactions ordinarily incident and necessary to the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of credit rating or auditing services to any person located in the Russian Federation that are prohibited by section 1(a)(ii) of Executive Order 14071 are authorized through 12:01 a.m. eastern daylight time, August 20, 2022. This general license does not authorize any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR, unless separately authorized. https://home.treasury.gov/system/files/126/russia_gl35.pdf

Determination Pursuant to Section 1(a)(i) of Executive Order 14024: To further address the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States described in E.O. 14024, and in consultation with the Department of State and pursuant to 31 CFR § 587.802, OFAC determined that section 1(a)(i) shall apply to the accounting, trust and corporate formation services, and management consulting sectors of the Russian Federation economy. Any person that the Secretary of the Treasury or the Secretary of the Treasury’s designee, in consultation with the Secretary of State or the Secretary of State’s designee, or the Secretary of State or the Secretary of State’s designee, in consultation with the Secretary of the Treasury or the Secretary of the Treasury’s designee, subsequently determines operates or has operated in such sectors shall be subject to sanctions pursuant to section 1(a)(i). https://home.treasury.gov/system/files/126/determination_05082022_eo14024.pdf

Determination Pursuant To Section 1(a)(ii) Of Executive Order 14071: Pursuant to sections 1(a)(ii), 1(b), and 5 of Executive Order (E.O.) 14071 of April 6, 2022 (“Prohibiting New Investment in and Certain Services to the Russian Federation in Response to Continued Russian Federation Aggression”) and 31 CFR § 587.802, the Director of the Office of Foreign Assets Control, in consultation with the Department of State, hereby determines that the prohibitions in section 1(a)(ii) of E.O. 14071 shall apply to the following categories of services: accounting, trust and corporate formation, and management consulting. As a result, the following activities are prohibited, except to the extent provided by law, or unless licensed or otherwise authorized by the Office of Foreign Assets Control: the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of accounting, trust and corporate formation, or management consulting services to any person located in the Russian Federation.

This determination excludes the following:

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

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

This determination shall take effect beginning at 12:01 a.m. eastern daylight time on June 7, 2022. https://home.treasury.gov/system/files/126/determination_05082022_eo14071.pdf

New Frequently Asked Questions: See the following link for the eight (8) new Frequently Asked Questions and Answers: https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-05-08

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

Alymova, Natalya Andreevna of Russia;
Belous, Aleksei Petrovich of Russia;
Borisenko, Elena Adolfovna of Russia;
Buriko, Alexandra Yurevna of Russia;
Dmitriev, Vladimir Aleksandrovich of Russia;
Gavrilenko, Anatolii Anatolyevich of Russia;
Gazaryan, Yuriy Garunovich of Russia;
Golodets, Olga Yuryevna of Russia;
Kamyshev, Denis Valentinovich of Russia, United Kingdom and South Africa;
Kaplunnik, Irina Aleksandrovna of Russia and Bulgaria;
Khachaturov, Tigran Garikovich of Russia and Armenia;
Komanov, Viktor Alekseevich of Russia;
Kuznetsov, Stanislav Konstantinovich of Russia and Germany;
Maltsev, Sergey Aleksandrovich of Russia;
Matveev, Aleksei Anatolievich of Russia;
Muranov, Aleksander Yurievich of Russia And Armenia;
Popov, Anatoliy Leonidovich of Russia;
Popovich, Aleksei Valerievich of Russia;
Puzyrnikova, Natalya Vladislavovna of Russia;
Rosseev, Mikhail Nikolaevich of Russia;
Rusanov, Igor Valerievich of Russia;
Ryskin, Vladimir Markovich of Russia;
Sadygov, Famil Kamil Ogly of Russia;
Sereda, Mikhail Leonidovich of Russia;
Shamalov, Yurii Nikolaevich of Russia;
Sobol, Alexander Ivanovich of Russia;
Stepanov, Aleksandr Mikhailovich of Russia;
Tsarev, Kirill Aleksandrovich of Russia;
Tyurin, Vyacheslav Aleksandrovich of Russia;
Vinokurov, Vladimir Nikolaevich of Russia;
Yeliseyev, Ilya Vladimirovich of Russia;
Zauers, Dmitrii Vladimirovich of Russia; and
Zlatkis, Bella Ilyinichna of Russia.

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

Agropromyshlenny Kompleks Voronezhski OOO of Russia;
Anninskii Elevator OOO of Russia;
Auditkonsalt OOO of Russia;
Azovskaya Zernovaya Kompaniya OOO of Russia;
Belinveststroi OOO of Russia;
Dve Stolitsy OOO of Russia;
Ekspluatiruyushchaya Kompaniya Tsentr OOO of Russia;
Joint Stock Company Channel One Russia of Russia;
Joint Stock Company Moscow Industrial Bank of Russia;
Joint Stock Company Northern Shipping Company of Russia;
Joint Stock Company NTV Broadcasting Company of Russia;
Kontrakt OOO of Russia;
Ladoga OOO of Russia;
Limited Liability Company Promtekhnologiya of Russia;
M Leasing LLC of Russia;
Marine Trans Shipping LLC of Russia;
Nekommercheskaya Organizatsiya Fond Khimicheskoe Razoruzhenie I Konversiya of Russia;
Nord Project LLC Transport Company of Russia;
Obshchestvo S Ogranichennoi Otvetstvennostyu Fertoing of Russia;
SC South LLC of Russia;
Television Station Russia-1 of Russia; and
Transmorflot LLC of Russia.

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

Adler Roll-on Roll-off 8,811GRT Russia flag; Vessel Registration Identification IMO 9179854;
Ambal Roll-on Roll-off 20,729GRT Russia flag; Vessel Registration Identification IMO 8807416;
Anastasiia General Cargo 9,611GRT Russia flag; Vessel Registration Identification IMO 9349291;
Angara Roll-on Roll-off 8,811GRT Russia flag; Vessel Registration Identification IMO 9179842;
Ascalon Roll-on Roll-off 8,821GRT Russia flag; Vessel Registration Identification IMO 9198226;
Askar-Sarydzha General Cargo 4,991GRT Russia flag; Vessel Registration Identification IMO 9082142;
Belomorskiy Dredger 2,628GRT Russia flag; Vessel Registration Identification IMO 8305781;
Chizhovka Hopper Barge 745GRT Russia flag; Vessel Registration Identification IMO 8730455;
Dvinskiy Zaliv Dredger 2,081GRT Russia flag; Vessel Registration Identification IMO 8922486;
Enisey Bulk Carrier 27,078GRT Russia flag; Vessel Registration Identification IMO 9079169;
Etim Emin General Cargo 1,853GRT Russia flag; Vessel Registration Identification IMO 8700010;
Gasret Aliev General Cargo 4,991GRT Russia flag; Vessel Registration Identification IMO 9083330;
Genrikh Gasanov General Cargo 4,991GRT Russia flag; Vessel Registration Identification IMO 9083196;
Inzhener Trubin General Cargo 6,418GRT Russia flag; Vessel Registration Identification IMO 8502080;
Inzhener Veshnyakov General Cargo 6,418GRT Russia flag; Vessel Registration Identification IMO 8502107;
Iohann Mahmastal General Cargo 6,395GRT Russia flag; Vessel Registration Identification IMO 8603406;
Kapitan Kokovin General Cargo 2,474GRT Russia flag; Vessel Registration Identification IMO 9279422;
Kapitan Ryntsyn General Cargo 2,601GRT Russia flag; Vessel Registration Identification IMO 8618073;
Kapitan Sakharov General Cargo 2,474GRT Russia flag; Vessel Registration Identification IMO 9279434;
Kholmogory General Cargo 2,986GRT Russia flag; Vessel Registration Identification IMO 9109081;
Kompozitor Gasanov Roll-on Roll-off 6,894GRT Russia flag; Vessel Registration Identification IMO 8606628;
Lady D General Cargo 9,611GRT Russia flag; Vessel Registration Identification IMO 9349289;
Lady Mariia Roll-on Roll-off 8,831GRT Russia flag; Vessel Registration Identification IMO 9220641;
Lady R Roll-on Roll-off 7,260GRT Russia flag; Vessel Registration Identification IMO 9161003;
Lapominka Hopper Barge 643GRT Russia flag; Vessel Registration Identification IMO 8928143;
Maia-1 General Cargo 9,611GRT Russia flag; Vessel Registration Identification IMO 9358010;
Maria E (a.k.a. "MARIA") Roll-on Roll-off 3,069GRT Togo flag; Other Vessel Type Passenger; Vessel Registration Identification IMO 9617923;
Mekhanik Brilin General Cargo 2,489GRT Russia flag; Vessel Registration Identification IMO 8904408;
Mekhanik Kottsov General Cargo 2,489GRT Russia flag; Vessel Registration Identification IMO 8904410;
Mekhanik Kraskovskiy General Cargo 2,489GRT Russia flag; Vessel Registration Identification IMO 8904458;
Mekhanik Makarin General Cargo 3,178GRT Russia flag; Vessel Registration Identification IMO 8904379;
Mekhanik Pustoshnyy General Cargo 2,489GRT Russia flag; Vessel Registration Identification IMO 8904422;
Mekhanik Pyatlin General Cargo 2,489GRT Russia flag; Vessel Registration Identification IMO 8904434;
Mekhanik Yartsev General Cargo 2,489GRT Russia flag; Vessel Registration Identification IMO 8904367;
Mikhail Lomonosov General Cargo 2,990GRT Russia flag; Vessel Registration Identification IMO 9216482;
NP Dikson Chemical/Oil Tanker 15,980GRT Russia flag; Vessel Registration Identification IMO 9255270;
NP Dudinka Chemical/Oil Tanker 14,400GRT Russia flag; Vessel Registration Identification IMO 9183831;
Olga General Cargo 1,853GRT Russia flag; Vessel Registration Identification IMO 8700046;
Pizhma General Cargo 3,466GRT Russia flag; Vessel Registration Identification IMO 8814354;
POLAR Rock Crude Oil Tanker 56,924GRT Russia flag; Vessel Registration Identification IMO 9116632;
Port Olya-1 General Cargo 4,878GRT Russia flag; Vessel Registration Identification IMO 9481922;
Port Olya-2 General Cargo 4,878GRT Russia flag; Vessel Registration Identification IMO 9481881;
Rasul Gamzatov General Cargo 4,991GRT Russia flag; Vessel Registration Identification IMO 8861058;
RZK Constanta General Cargo 7,095GRT Russia flag; Vessel Registration Identification IMO 8711289;
Kuznetsov General Cargo 6,204GRT Russia flag; Vessel Registration Identification IMO 9210359;
Sabetta General Cargo 12,936GRT Russia flag; Vessel Registration Identification IMO 9347061;
Severniy Proect General Cargo 13,066GRT Russia flag; Vessel Registration Identification IMO 9202053;
Siberia Bulk Carrier 17,665GRT Russia flag; Vessel Registration Identification IMO 9239458;
SIYANIE Severa General Cargo 6,577GRT Russia flag; Vessel Registration Identification IMO 9250385;
SMP Arkhangelsk General Cargo 7,752GRT Russia flag; Vessel Registration Identification IMO 9240550;
SMP Novodvinsk General Cargo 4,106GRT Russia flag; Vessel Registration Identification IMO 9398046;
SMP Severodvinsk General Cargo 4,106GRT Russia flag; Vessel Registration Identification IMO 9376440;
Sona General Cargo 1,853GRT Russia flag; Vessel Registration Identification IMO 8700060;
Sparta II Roll-on Roll-off 7,260GRT Russia flag; Vessel Registration Identification IMO 9160994;
Sparta III (a.k.a. URSA MAJOR) General Cargo 12,679GRT Russia flag; Vessel Registration Identification IMO 9538892;
Sparta IV General Cargo 7,522GRT Russia flag; Vessel Registration Identification IMO 9743033;
Sparta Roll-on Roll-off 8,831GRT Russia flag; Vessel Registration Identification IMO 9268710;
Taibola General Cargo 8,448GRT Russia flag; Vessel Registration Identification IMO 9086253;
Taimyr General Cargo 7,949GRT Russia flag; Vessel Registration Identification IMO 8821797;
Tambey General Cargo 7,949GRT Russia flag; Vessel Registration Identification IMO 9014872;
Teriberka General Cargo 8,448GRT Russia flag; Vessel Registration Identification IMO 9081291;
Teriberka Hopper Barge 643GRT Russia flag; Vessel Registration Identification IMO 8931748;
Terskiy Bereg General Cargo 8,448GRT Russia flag; Vessel Registration Identification IMO 9081368;
Tiksy General Cargo 7,949GRT Russia flag; Vessel Registration Identification IMO 8821802;
Triton Tug 161GRT Russia flag; Vessel Registration Identification IMO 7236141;
Turukhan General Cargo 8,448GRT Russia flag; Vessel Registration Identification IMO 9081332;
Utrenniy General Cargo 12,936GRT Russia flag; Vessel Registration Identification IMO 9347059;
Valentin Emirov General Cargo 4,110GRT Russia flag; Vessel Registration Identification IMO 8866591; and
Viktor ZAbelin General Cargo 6,204GRT Russia flag; Vessel Registration Identification IMO 9210256.

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May 9, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated a network of five Islamic State of Iraq and Syria (ISIS) financial facilitators operating across Indonesia, Syria, and Turkey. The five individuals, who are designated pursuant to Executive Order (E.O.) 13224, as amended, have played a key role in facilitating the travel of extremists to Syria and other areas where ISIS operates. This network has also conducted financial transfers to support ISIS efforts in Syria-based displaced persons camps by collecting funds in Indonesia and Turkey, some of which were used to pay for smuggling children out of the camps and delivering them to ISIS foreign fighters as potential recruits.

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

Adhiguna, Muhammad Dandi of Turkey and Indonesia;
Heryadi, Rudi, Bogor of Indonesia;
Kardian, Ari, Cempakawarna Rt, Tasikmalaya of Indonesia;
Ramadhani, Dini, Kayseri of Turkey and Indonesia; and
Susanti, Dwi Dahlia, Idlib of Syria and Indonesia.

https://home.treasury.gov/news/press-releases/jy0772 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220509

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May 11, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) has updated FAQs 1034, 1035, and 1038.

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

Answer

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

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

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

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

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1034

For the purposes of Russia-related General License 35 what is meant by the terms “credit rating services” and “auditing services?”

Answer

The term “credit rating services” means services related to assessments of a borrower’s ability to meet financial commitments, including analysis of general creditworthiness or with respect to a specific debt or financial obligation.

The term “auditing services” means examination or inspection of business records by an auditor, including checking and verifying accounts, statements, or other representation of the financial position or regulatory compliance of the auditee.

General License 35 authorizes certain transactions ordinarily incident and necessary to the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of credit rating or auditing services to any person located in the Russian Federation through 12:01 a.m. eastern daylight time, August 20, 2022.

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1035

For the purposes of the determination of May 8, 2022, made pursuant to Executive Order (E.O.) 14024, what is meant by the terms “accounting,” “trust and corporate formation services,” and “management consulting” sectors of the Russian Federation economy?

Answer

For the purposes of the determination of May 8, 2022, made pursuant to E.O. 14024, OFAC interprets the following terms to include activities related to products and services in or involving the Russian Federation in the following:

“Accounting sector” – includes the measurement, processing, and evaluation of financial data about economic entities.
“Trust and corporate formation services sector” – includes assisting persons in forming or structuring legal persons, such as trusts and corporations; acting or arranging for another person to act as directors, secretaries, administrative trustees, trust fiduciaries, registered agents, or nominee shareholders of legal persons; providing a registered office, business address, correspondence address, or administrative address for legal persons; and providing administrative services for trusts.
“Management consulting sector” – includes strategic business advice; organizational and systems planning, evaluation, and selection; development or evaluation of marketing programs or implementation; mergers, acquisitions, and organizational structure; staff augmentation and human resources policies and practices; and brand management.

The determination regarding these sectors pursuant to E.O. 14024 takes effect immediately.

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1038

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May 12, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issues Syria General License 22 and publishes additional Frequently Asked Questions.

General License 22: Transactions prohibited by § 542.206 or 542.207 of the Syrian Sanctions Regulations, 31 CFR part 542 (SySR), that are ordinarily incident and necessary to activities in the following economic sectors in the areas of northeast and northwest Syria described in the Annex to this general license are authorized: (1) agriculture; (2) information and telecommunications; (3) power grid infrastructure; (4) construction; (5) finance; (6) clean energy; (7) transportation and warehousing; (8) water and waste management; (9) health services; (10) education; (11) manufacturing; and (12) trade.

The purchase of refined petroleum products of Syrian origin for use in Syria prohibited by § 542.209 of the SySR that is ordinarily incident and necessary to the activities described in paragraph (a) of this general license are authorized.

https://home.treasury.gov/system/files/126/syria_gl22.pdf

See the following link for the full text of new Frequently Asked Questions 1045 through 1041:

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-05-12.

See the following link for the full text of reviewed Frequently Asked Question 884:

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/884.

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May 19, 2022: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Ahmad Jalal Reda Abdallah, a Lebanese businessman and Hizballah financial facilitator, as well as five of his associates and eight of his companies in Lebanon and Iraq. This action illuminates Hizballah’s modus operandi of using the cover of seemingly legitimate businesses to generate revenue and leverage commercial investments across a multitude of sectors to secretly fund Hizballah and its terrorist activities. It also demonstrates how Hizballah goes to great lengths to establish companies with opaque ownership structures in order to conceal their involvement in these businesses, and also their involvement in criminal activities such as altering of medication labels for black market pharmaceutical sales.

https://home.treasury.gov/news/press-releases/jy0796

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

Abdallah, Ahmad Jalal Red of Lebanon;
Abdallah, Ali Reda of Lebanon;
Abdallah, Hussein Ahmad Jalal of Lebanon;
Abdallah, Hussein Reda of Lebanon;
Attia, Hussein Kamel of Lebanon; and
Haidamous, Joseph Ilya of Lebanon.

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

Al Moukhtar Products Co. SARL of Lebanon;
Focus Company SARL of Lebanon;
Focus Media Company Sal Offshore of Lebanon;
United General Contracting Company SARL of Lebanon;
United General Holding SAL of Lebanon;
United General Offshore SAL of Lebanon;
United General Services SARL of Lebanon; and
United International Exhibition Company SARL of Lebanon.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220519

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May 24, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) will not renew the provisions of GL-9C issued pursuant to the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587, that expire on May 25, 2022 at 12:01 a.m. EDT. Therefore, Russia will not be able to pay its debts in U.S. dollars and makes it more likely that Russia will default on its debts.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220524_33

May 25, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 13A, "Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024."

General License 13A: U.S. persons, or entities owned or controlled, directly or indirectly, by a U.S. person, are authorized to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations, or certifications, to the extent such transactions are prohibited by Directive 4 under Executive Order (E.O.) 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation, provided such transactions are ordinarily incident and necessary to the day-to-day operations in the Russian Federation of such U.S. persons or entities, through 12:01 a.m. eastern daylight time, September 30, 2022.

This general license does not authorize: Any debit to an account on the books of a U.S. financial institution of the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation; or any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR, unless separately authorized. Effective May 25, 2022, General License No. 13, dated March 2, 2022, is replaced and superseded in its entirety by this General License No. 13A.

https://home.treasury.gov/system/files/126/russia_gl13a.pdf

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May 24, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated a Hamas finance official as well as an expansive network of three Hamas financial facilitators and six companies that have generated revenue for the terrorist group through the management of an international investment portfolio. Hamas’s Investment Office, whose leadership oversees this network, held assets estimated to be worth more than $500 million, including companies operating in Sudan, Turkey, Saudi Arabia, Algeria, and the United Arab Emirates (UAE). While Hamas’s Shura Council and Executive Committee exercise control and oversight of the group’s international investment portfolio, the Investment Office is in charge of the day-to-day management of this investment portfolio.

https://home.treasury.gov/news/press-releases/jy0798

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

Ali, Usama of Lebanon, Canada and Palestine;
Odeh, Ahmed Sharif Abdallah of Jordan;
Qafisheh, Hisham Younis Yahia of Turkey, Palestine, Saudi Arabia and Jordan; and
Sabri, Abdallah Yusuf Faisal of Jordan.

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

Agrogate Holding of Sudan;
Al Rowad Real Estate Development of Sudan;
Anda Company of Saudi Arabia;
Itqan Real Estate JSC of the United Arab Emirates;
Sidar Company of Algeria; and
Trend GYO of Turkey.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220524

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May 25, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating an international oil smuggling and money laundering network led by Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) officials that has facilitated the sale of hundreds of millions of dollars worth of Iranian oil for both the IRGC-QF and Hizballah. This oil smuggling network, led by U.S.-designated IRGC-QF official Behnam Shahriyari and former IRGC-QF official Rostam Ghasemi and backed by senior levels of the Russian Federation government and state-run economic organs, has acted as a critical element of Iran’s oil revenue generation, as well as its support for proxy militant groups that continue to perpetuate conflict and suffering throughout the region.

https://home.treasury.gov/news/press-releases/jy0799

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

Celik, Abdulhamid of Turkey;
Ettehadi, Esam of Iran;
Gunduz, Seyyid Cemal, of Turkey;
Hamidi, Mihrab Suhrab of Afghanistan and Russia;
Karimian, Mohammad Sadegh of Iran;
Kashanimehr, Alireza of Iran;
Kaskariy, Abdulaziz of Turkey;
Monzavi, Azim of Iran;
Nabizada, Kamaluddin Gulam of Afghanistan and Russia; and
Sanli, Hakki Selcuk of Turkey.

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

China Haokun Energy Limited of China;
Concepto Screen Sal Off-Shore of Lebanon;
Fujie Petrochemical Zhoushan Co., Ltd. of China;
Haokun Energy Group Company Limited of China;
Petro China Pars CO. of Iran;
Rpp Limited Liability Company of Russia;
Shandong Sea Right Petrochemical Co., Ltd. of China;
Turkoca Import Export Transit Co., Ltd. of South Korea; and
Zamanoil Dmcc of the United Arab Emirates.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220525

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May 27, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned one individual, two banks, and a trading company for their support to the Democratic People’s Republic of Korea’s (DPRK) development of weapons of mass destruction (WMD) and ballistic missile programs and to the U.S.-designated DPRK national airline. On May 24, 2022, the DPRK launched three missiles: one intercontinental ballistic missile (ICBM) and two shorter-range ballistic missiles. So far this year, the DPRK has launched 23 ballistic missiles, including six ICBMs — all in violation of multiple United Nations Security Council resolutions (UNSCRs).

https://home.treasury.gov/news/press-releases/jy0801

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

Jong, Yong Nam of Belarus and North Korea.

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

Air Koryo Trading Corporation of China;
Far Eastern Bank of Russia; and
Public Joint-Stock Company Commercial Bank 'Sputnik' of Russia.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220527

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Nuclear Regulatory Commission

May 17, 2022: 87 Fed. Reg. 29882: The U.S. Nuclear Regulatory Commission (NRC) issued an Order suspending the general license authority under NRC regulations to export radioactive material, and deuterium for nuclear end use, to the Russian Federation. Exporters are no longer authorized to use the general license to export radioactive material, or deuterium for nuclear end-use, to the Russian Federation and now must apply for a specific license pursuant to NRC regulations.

https://www.govinfo.gov/content/pkg/FR-2022-05-17/pdf/2022-10565.pdf

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The U.S. Departments of State, Treasury, Commerce, and Labor

May 23, 2022: The U.S. Departments of State, Treasury, Commerce, and Labor issued an advisory "Risks and Considerations for U.S. Businesses Operating in Sudan" to highlight growing risks to American businesses and individuals associated with conducting business with Sudanese State-Owned Enterprises which includes all companies under military control. These risks arise from recent actions undertaken by Sudan’s Sovereign Council and security forces under the military’s control and could adversely impact U.S. businesses, individuals, other persons, and their operations in the country and the region.

https://www.state.gov/risks-and-considerations-for-u-s-businesses-operating-in-sudan/

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Fines and Penalties

May 9, 2022: A federal judge in Greeneville, Tennessee, sentenced Xiaorong You, aka Shannon You, a Michigan woman to 168 months, the equivalent of 14 years, in prison for a scheme to steal trade secrets, engage in economic espionage and commit fraud. The defendant was also ordered to serve three years of supervised release and pay a $200,000 fine. In April 2021, following a 13-day jury trial, Xiaorong You, aka Shannon You, was convicted of conspiracy to commit trade secret theft, conspiracy to commit economic espionage, possession of stolen trade secrets, economic espionage and wire fraud.

https://www.justice.gov/opa/pr/chemist-sentenced-stealing-trade-secrets-economic-espionage-and-wire-fraud

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May 13, 2022: The U.S. Department of Justice (DOJ) has filed its first criminal complaint against a U.S. citizen who allegedly tried to evade American sanctions using cryptocurrency, according to a judicial opinion document filed on May 13 2022, by U.S. Magistrate Judge Zia M. Faruqui. The case is still sealed. The DOJ’s criminal complaint is against an American citizen accused of transmitting more than $10 million worth of bitcoin to a crypto exchange in a comprehensively sanctioned country. Comprehensive sanctions are currently placed on Cuba, Iran, North Korea, Syria, and the regions of Crimea, Donetsk, and Luhansk.

https://theparadise.ng/doj-files-first-criminal-complaint-against-us-citizen-allegedly-using-cryptocurrency-to-evade-sanctions/

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May 18, 2022: A Chicago technology executive, Obaidullah Syed, 67, of Northbrook, Ill., has been sentenced to a year in federal prison for illegally exporting computer equipment from the United States to a nuclear research agency of the Pakistani government. Obaidullah Syed pleaded guilty last year to conspiring to export goods from the U.S. without a license from the Department of Commerce and to submit false export information. U.S. District Judge Mary M. Rowland sentenced Syed to a year and a day in federal prison. Prior to sentencing, Syed forfeited $247,000 of criminally derived cash to the U.S. government.

https://www.justice.gov/usao-ndil/pr/chicago-tech-executive-sentenced-year-federal-prison-illegally-exporting-computer

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May 18, 2022: Seven South Korea-based companies have agreed to pay $3.1 million to resolve allegations they violated the False Claims Act by engaging in a bid-rigging conspiracy that targeted U.S. Army Corps of Engineers (USACE) contracts for construction and engineering work on U.S. military bases in South Korea. The seven companies are Korea Engineering Consultants Corporation; Yul Lim Construction Co. Ltd.; Shin Woo Construction & Industrial Co. Ltd.; Seongbo Const. Ind. Co. Ltd.; Wooseok Construction Co. Ltd.; Yuil Engineering and Construction Co.; and Seokwang Development Co. Ltd. The companies have agreed to each pay an equal share of the settlement amount.

The United States alleged the seven companies conspired to suppress and eliminate competition during the bidding process on 15 USACE contracts awarded between 2016 and 2019. The United States further alleged that as a result of this anticompetitive conduct, the USACE paid substantially more for services performed under the contracts than it would have had there been competition among the bidders.

https://www.justice.gov/opa/pr/seven-south-korean-companies-agree-pay-approximately-31-million-settle-civil-false-claims-act

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May 20, 2022: A federal grand jury in the Eastern District of Texas returned an indictment charging a military contractor, Aaron Stephens, for rigging bids on public military contracts in Texas and Michigan and defrauding the United States.

According to the indictment, from at least as early as May 2013 through at least April 2018, Stephens formed agreements with multiple co-conspirators to rig bids on certain government contracts in order to give the false impression of competition and secure government payments, and to defraud the United States. As a part of two different schemes, Stephens and his co-conspirators allegedly rigged eight military contracts and received more than $15 million from the government for those contracts. The contracts included work performed for the Red River Army Depot in Texarkana, Texas; the U.S. Army Contracting Command in Warren, Michigan; and the Sierra Army Depot in Herlong, California.

https://www.justice.gov/opa/pr/military-contractor-indicted-15-million-bid-rigging-scheme-and-conspiracy-defraud-united

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May 20, 2022: Cape Henry Associates (Cape Henry), located in Virginia Beach, Virginia, has agreed to pay $425,000 to resolve allegations that it violated the False Claims Act by failing to inform contracting officers of the company’s organizational conflicts of interest (OCI) in connection with the award and performance of task orders on government contracts. Cape Henry performs manpower analysis, personnel analysis and training services for the U.S. Armed Forces.

The Justice Department alleged that Cape Henry failed to disclose that one of the company’s officers had an ownership interest in KOVA Global, a company to which Cape Henry awarded subcontracts to provide warehouse services in connection with two sole source task orders issued by the Army and General Services Administration (GSA).

https://www.justice.gov/opa/pr/government-contractor-agrees-pay-425000-alleged-false-claims-related-conflicts-interest

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May 26, 2022: The United States Attorney’s Office unsealed a criminal complaint charging Jonathan Yet Wing Soong with smuggling and violating export control laws by allegedly secretly funneling sensitive aeronautics software to a Beijing university. The allegations against Soong, 34, of San Jose, were set out in a complaint filed May 23, 2022. According to the complaint, Soong was employed by Universities Space Research Association (USRA) between April 2016 and September 2020 as a program administrator. USRA is a nonprofit corporation contracted by the National Aeronautics and Space Administration (NASA) to, among other things, distribute domestically and internationally sensitive aeronautics-related software developed through the Army’s Software Transfer Agreement (STA) program. As USRA’s STA program administrator, Soong was responsible for overseeing certain software license sales, conducting export compliance screening of customers, generating software licenses, and, on occasion, physically exporting software.

Soong is alleged to have been trained in and been aware of export compliance rules which, among other things, restrict sales and exports to certain entities. As relevant to this case, the complaint describes rules that restrict sales of certain technology to entities on the U.S. Department of Commerce Entity List (Entity List), a list with associated regulations that are maintained by the Department of Commerce pursuant to a federal statutory and presidential directive. The Entity List and associated regulations prohibit export without a license of certain technology with commercial and potential military applications to entities and individuals whose activities have been found to be contrary to U.S. national security or foreign policy interests. The complaint alleges Soong unlawfully and without a license exported and facilitated the sale and transfer of software to an entity on the Entity List—Beijing University of Aeronautics and Astronautics (BUAA), which is also known as Beihang University. According to the complaint, Beihang University was added to the Entity List due to the University’s involvement in People’s Republic of China military rocket systems and unmanned air vehicle systems. Given its inclusion on the Entity List, BUAA is prohibited from receiving certain items without a license. The complaint alleges Soong used an intermediary in hopes that the illegal transfer would not be detected.

https://www.justice.gov/usao-ndca/pr/south-bay-resident-charged-smuggling-and-exporting-american-aviation-technology-beijing

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May 27, 2022: The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with Banco Popular de Puerto Rico (BPPR), a Puerto Rican bank with branches in Puerto Rico and the Virgin Islands. BPPR agreed to remit $225,937.86 to settle its potential civil liability for 337 apparent violations of the Venezuela Sanctions Regulations. The apparent violations occurred when BPPR processed transactions totaling $853,126 on behalf of two individuals who were low-level employees of the Government of Venezuela (GoV), in apparent violation of U.S. sanctions against Venezuela. All of the apparent violations resulted from the maintenance of four personal accounts operated by these two employees of the GoV. The settlement amount reflects OFAC’s determination that BPPR’s apparent violations were non-egregious and voluntarily self-disclosed.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220527_33

MAY 2022 EXPORT CONTROL REGULATION UPDATES Read More »

APRIL 2022 EXPORT CONTROL REGULATION UPDATES

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

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

REGULATORY UPDATES

The President

The President Designated Colombia As A Major Non-NATO Ally

April 21, 2022: The President, in accordance with section 517 of the Foreign Assistance Act of 1961, as amended (22 U.S.C. 2321k), provided notice of his intent to designate Colombia as a Major Non-NATO Ally in recognition of the importance of the U.S.-Colombia relationship and Colombia’s crucial contributions to regional and international security.

https://www.whitehouse.gov/briefing-room/statements-releases/2022/04/21/letter-to-the-speaker-of-the-house-of-representatives-and-president-of-the-senate-on-providing-notice-of-intent-to-designate-colombia-as-a-major-non-nato-ally/

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

DDTC Name And Address Changes Posted To Website

April 1 through 22, 2022: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at

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

Change in Name from RFEL Ltd. to Rheinmetall Electronics UK Ltd., due to corporate rebranding;
Change in Name from Flightline Electronics, Inc., to Undersea Sensor Systems, Inc., due to corporate merger with Undersea Sensor Systems, Inc.;
Change in Address for ITOCHU Aviation Co., Ltd. Nagoya Branch from 5-28, Meieki 4-chome, Nakamura-ku, Nagoya 450-0002 Japan to 7-1, Meieki 4-chome, Nakamura-ku, Nagoya 450-6215 Japan;
Change in Address for Sonovision Canada Inc., from 85 Albert Street, Suite 400, Ottawa, Ontario K1P 6A4, Canada to 179 Colonnade Rd. South, Unit 100, Nepean, Ontario K2E 7J4, Canada; and
Change in Name from Sysco AS to Cegal AS due to corporate merger.

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

BIS Excludes Iceland, Liechtenstein, Norway And Switzerland From The Russia/Belarus Foreign-Produced Product Rule

April 8, 2022: 87 Fed. Reg. 21554: The U.S. Department of Commerce, Bureau of Industry and Security (BIS), established highly restrictive license requirements and policies for certain transactions involving Russia and Belarus under the Export Administration Regulations (EAR). These restrictive licensing requirements impact foreign parties who use U.S. manufacturing equipment and aids in the production of items sold to Russia and Belarus. Refer to the Foreign Direct Product rule at the EAR Part 734.9.

To recognize partner countries implementing substantially similar export controls on Russia and Belarus, the Department of Commerce published a list of countries excluded from the Foreign Direct Product rule related to foreign-produced items. In this rule, the Department of Commerce adds Iceland, Liechtenstein, Norway, and Switzerland to the list of excluded countries.

https://www.federalregister.gov/documents/2022/04/12/2022-07836/additions-to-the-list-of-countries-excluded-from-certain-license-requirements-under-the-export

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The Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives

ATF Revised Definitions For “Firearm Frame Or Receiver” And “Frame Or Receiver”

April 26, 2022: 87 Fed. Reg. 24625: The Department of Justice (Department) is amending Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) regulations to remove and replace the regulatory definitions of “firearm frame or receiver” and “frame or receiver” because the current regulations fail to capture the full meaning of those terms. The Department is also amending ATF's definitions of “firearm” and “gunsmith” to clarify the meaning of those terms, and to provide definitions of terms such as “complete weapon,” “complete muffler or silencer device,” “multi-piece frame or receiver,” “privately made firearm,” and “readily” for purposes of clarity given advancements in firearms technology. Further, the Department is amending ATF's regulations on marking and recordkeeping that are necessary to implement these new or amended definitions. See the revised definitions at: https://www.federalregister.gov/documents/2022/04/26/2022-08026/definition-of-frame-or-receiver-and-identification-of-firearms

LATEST SANCTIONS FINES & PENALTIES

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

Sanctions

The President

April 6, 2022: The President issued E.O. of April 6, 2022, “Prohibiting New Investment in and Certain Services to the Russian Federation in Response to Continued Russian Federation Aggression,” to ban all new investment in the Russian Federation by U.S. persons, wherever located, as well as the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any category of services as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State, to any person located in the Russian Federation. These prohibitions follow recently issued Executive Orders 14066 and 14068, which prohibit certain imports and exports involving Russia, and are consistent with commitments made by the G7 leaders to ensure that our citizens are not underwriting Putin’s war.

https://home.treasury.gov/news/press-releases/jy0705 and https://www.whitehouse.gov/briefing-room/presidential-actions/2022/04/06/prohibiting-new-investment-in-and-certain-services-to-the-russian-federation-in-response-to-continued-russian-federation-aggression/

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April 6, 2022: The White House issued a Fact Sheet on the United States, G7, and EU sanctions on Russia. The U.S., with the G7 and the European Union, will continue to impose severe and immediate economic costs on the Putin regime for its atrocities in Ukraine, including in Bucha. The United States, G7, and EU will document and share information on these atrocities and use all appropriate mechanisms to hold accountable those responsible. As one part of this effort, the United States is announcing devastating economic measures to ban new investment in Russia and impose the most severe financial sanctions on Russia’s largest bank and several of its most critical state-owned enterprises and on Russian government officials and their family members. These sweeping financial sanctions follow White House action earlier to cut off Russia’s frozen funds in the United States to make debt payments. Importantly, these measures are designed to reinforce each other to generate intensifying impact over time.

The United States and more than 30 allies and partners across the world have levied the most impactful, coordinated, and wide-ranging economic restrictions in history. Experts predict Russia’s GDP will contract up to 15 percent this year, wiping out the last fifteen years of economic gains. Inflation is already spiking above 15 percent and is forecast to accelerate higher. More than 600 private sector companies have already left the Russian market. Supply chains in Russia have been severely disrupted. Russia will likely lose its status as a major economy, and it will continue a long descent into economic, financial, and technological isolation. Compared to last year, U.S. exports to Russia of items subject to the new export controls have decreased 99 percent by value – and the power of these restrictions will compound over time as Russia draws down any remaining stockpiles of spare parts for certain planes, tanks, and other resources needed for Putin’s war machine. As long as Russia continues its brutal assault on Ukraine, the United States, G7 and EU will stand unified with our allies and partners in imposing additional costs on Russia for its actions. To review the complete Fact Sheet, please go to the following link:

https://www.whitehouse.gov/briefing-room/statements-releases/2022/04/06/fact-sheet-united-states-g7-and-eu-impose-severe-and-immediate-costs-on-russia/

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April 6, 2022: 87 Fed. Reg. 20999: The President issued Executive Order 14071, which prohibits the following new investment in and certain services to the Russian Federation in response to continued Russian Federation aggression:

(i) new investment in the Russian Federation by a United States person, wherever located;

(ii) the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any category of services as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State, to any person located in the Russian Federation; and

(iii) any approval, financing, facilitation, or guarantee by a United States person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited by this section if performed by a United States person or within the United States.

https://www.federalregister.gov/documents/2022/04/08/2022-07757/prohibiting-new-investment-in-and-certain-services-to-the-russian-federation-in-response-to

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April 22, 2022: 87 Fed. Reg. 24265: The policies and actions of the Government of the Russian Federation to continue the premeditated, unjustified, unprovoked, and brutal war against Ukraine constitute a national emergency by reason of a disturbance or threatened disturbance of international relations of the United States. In order to address this national emergency and secure the observance of the rights and obligations of the United States the President of the United States authorized the Secretary of Homeland Security (Secretary) to make and issue such rules and regulations as the Secretary may find appropriate to regulate the anchorage and movement of Russian-affiliated vessels, and delegate to the Secretary the President’s authority to approve such rules and regulations, as authorized by the Magnuson Act. Specifically, the President of the United States prohibits Russian-affiliated vessels from entering into United States ports. https://www.federalregister.gov/documents/2022/04/22/2022-08872/declaration-of-national-emergency-and-invocation-of-emergency-authority-relating-to-the-regulation

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The U.S. Department of State:

The U.S. Department of State established the Bureau of Cyberspace and Digital Policy, which leads and coordinates the Department of State’s work on cyberspace and digital diplomacy to encourage responsible state behavior in cyberspace and advance policies that protect the integrity and security of the infrastructure of the Internet, serve U.S. interests, promote competitiveness, and uphold democratic values. The Bureau of Cyberspace and Digital Policy addresses the national security challenges, economic opportunities, and values considerations presented by cyberspace, digital technologies, and digital policy and promotes standards and norms that are fair, transparent, and support our values.

https://www.state.gov/bureaus-offices/deputy-secretary-of-state/bureau-of-cyberspace-and-digital-policy/

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April 6, 2022: 87 Fed. Reg. 20029: Acting under the authority of and in accordance with section 1(a)(ii)(A) of E.O. 13224 of September 23, 2001, as amended by E.O. 13268 of July 2, 2002, E.O. 13284 of January 23, 2003, and E.O. 13886 of September 9, 2019, (“E.O. 13224”), I hereby determine that the person known as Katibat al Tawhid wal Jihad (also known as KTJ, Khatiba al-Tawhid wal-Jihad, Jannat Oshiklari, and Tawhid and Jihad Brigade) is a foreign person that has committed and poses a significant risk of committing acts of terrorism that threaten the security of U.S. nationals or the national security, foreign policy, or economy of the United States.

https://www.federalregister.gov/documents/2022/04/06/2022-07304/designation-of-katibat-al-tawhid-wal-jihad-as-a-specially-designated-global-terrorist

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April 7, 2022: The U.S. Department Of State targets Russia’s largest shipbuilding company, subsidiaries, and board members. United Shipbuilding Corporation (USC) is a major Russian State-Owned Enterprise (SOE) responsible for developing and building the Russian Navy’s warships. USC is responsible for the construction of almost all of Russia’s warships, as well as those built for foreign customers. Along with re-designating USC, the Department of State designated 28 subsidiaries and eight board members. These actions were also taken pursuant to E.O. 14024. See the entry below for OFAC’s designation of this entity and persons as Specially Designated Nationals and Blocked Persons.

https://www.state.gov/additional-state-department-designations-targeting-russian-state-owned-defense-shipbuilding-enterprise/

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

April 4, 2022: 87 Fed. Reg. 20295: In response to the Russian Federation's (Russia's) further invasion of Ukraine on February 24, 2022, the Department of Commerce, Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) by adding 120 entities under 120 entries to the Entity List. These 120 entities have been determined by the U.S. Government to be acting contrary to the national security interests or foreign policy of the United States and are listed on the Entity List under the destinations of Belarus and Russia.

The following entities from Belarus were added to the Entity List:

140 Repair Plant JSC;
558 Aircraft Repair Plant JSC;
2566 Radioelectronic Armament Repair Plant JSC;
AGAT—Control Systems—Managing Company of Geoinformation Control Systems Holding JSC;
Agat-Electromechanical Plant OJSC;
AGAT-SYSTEM;
ATE-Engineering LLC;
BelOMO Holding;
Belspetsvneshtechnika SFTUE;
BSVT-New Technologies;
CJSC Beltechexport;
Department of Internal Affairs of the Gomel Region Executive Committee;
Internal Troops of The Ministry of Internal Affairs of the Republic of Belarus;
JSC Transaviaexport Airlines;
KGB Alpha; Kidma Tech OJSC;
Minotor-Service; Minsk Wheeled Tractor Plant;
Oboronnye Initsiativy LLC;
OJS KB Radar Managing Company;
Peleng JSC;
State Authority for Military Industry of the Republic of Belarus;
State Security Committee of the Republic of Belarus; and
Volatavto OJSC.

The following entities from Russia were added to the Entity List:

5th Shipyard;
Alagir Resistor Factory;
All-Russian Scientific-Research Institute Etalon JSC;
Almaz JSC;
Dolgoprudniy Design Bureau of Automatics;
Electronic Computing Technology Scientific-Research Center;
Electrosignal JSC;
Inteltech PJSC;
Joint Stock Company NPO Elektromechaniki;
Kulon Scientific-Research Institute JSC;
Lutch Design Office JSC;
Meteor Plant JSC;
Moscow Communications Research Institute JSC;
Moscow Order of the Red Banner of Labor Research Radio Engineering Institute JSC;
Omsk Production Union Irtysh JSC;
Omsk Scientific-Research Institute of Instrument Engineering JSC;
Optron JSC;
Polyot Chelyabinsk Radio Plant JSC;
Pskov Distance Communications Equipment Plant;
Radiozavod JSC;
Razryad JSC;
Research Production Association Mars;
Ryazan Radio-Plant;
Scientific-Production Association and Scientific-Research Institute of Radio-Components;
Scientific-Production Enterprise Almaz JSC;
Scientific-Production Enterprise “Kant”;
Scientific Production Enterprise “Radiosviaz”;
Scientific-Production Enterprise “Svyaz”;
Scientific-Production Enterprise Volna;
Scientific-Production Enterprise Vostok JSC;
Scientific-Research Institute “Argon”;
Scientific-Research Institute of Automated Systems and Communications Complexes Neptune JSC; Scientific Research Institute of Communication Management Systems;
Scientific Research Institute Ferrite-Domen;
Special Design and Technical Bureau for Relay Technology;
Tactical Missile Corporation, 711 Aircraft Repair Plant (711 ARZ);
Tactical Missile Corporation, AO GNPP “Region”;
Tactical Missile Corporation, AO TMKB “Soyuz”;
Tactical Missile Corporation, Azov Optical and Mechanical Plant;
Tactical Missile Corporation, “Central Design Bureau of Automation”;
Tactical Missile Corporation, Concern “MPO—Gidropribor”;
Tactical Missile Corporation, Joint Stock Company Avangard;
Tactical Missile Corporation, Joint Stock Company Concern Granit-Electron;
Tactical Missile Corporation, Joint Stock Company Elektrotyaga;
Tactical Missile Corporation, Joint Stock Company GosNIIMash;
Tactical Missile Corporation JSC “KRASNY GIDROPRESS”;
Tactical Missile Corporation, Joint Stock Company PA Strela;
Tactical Missile Corporation, Joint Stock Company “Plant Dagdiesel”;
Tactical Missile Corporation, Joint Stock Company Plant Kulakov;
Tactical Missile Corporation, Joint Stock Company Ravenstvo;
Tactical Missile Corporation, Joint Stock Company Ravenstvo-service;
Tactical Missile Corporation, Joint-Stock Company “Research Center for Automated Design”;
Tactical Missile Corporation, Joint Stock Company “Salute”;
Tactical Missile Corporation, Joint Stock Company Saratov Radio Instrument Plant;
Tactical Missile Corporation Joint Stock Company “Scientific Research Institute of Marine Heat Engineering”;
Tactical Missile Corporation, Joint Stock Company Severny Press;
Tactical Missile Corporation, Joint Stock Company “State Machine Building Design Bureau “Vympel” By Name I.I. Toropov”;
Tactical Missile Corporation, Joint Stock Company “URALELEMENT”;
Tactical Missile Corporation, KB Mashinostroeniya;
Tactical Missile Corporation, NPO Electromechanics;
Tactical Missile Corporation, NPO Lightning;
Tactical Missile Corporation, Petrovsky Electromechanical Plant “Molot”;
Tactical Missile Corporation, PJSC ANPP Temp Avia;
Tactical Missile Corporation, PJSC “MBDB ISKRA”;
Tactical Missile Corporation, Raduga Design Bureau;
Tactical Missile Corporation, RKB Globus;
Tactical Missile Corporation, Smolensk Aviation Plant;
Tactical Missile Corporation, TRV Engineering;
Tactical Missile Corporation, Ural Design Bureau “Detal”;
Tactical Missile Corporation, Zvezda-Strela Limited Liability Company;
United Shipbuilding Corporation “Production Association Northern Machine Building Enterprise”;
46th TSNII Central Scientific Research Institute;
All Russia Scientific Research Institute of Optical Physical Measurements;
Arzam Scientific Production Enterprise Temp Avia;
Automated Procurement System for State Defense Orders, LLC;
Engineering Center Moselectronproekt;
Etalon Scientific and Production Association;
Evgeny Krayushin;
Far-East Factory Zvezda;
Federal Center for Dual-Use Technology (FTsDT) Soyuz;
Foreign Trade Association Mashpriborintorg; Ineko LLC;
Informakustika JSC;
Institute of High Energy Physics;
Institute of Theoretical and Experimental Physics;
ISE SO RAN Institute of High-Current Electronics;
JSC Energiya, Kaluga Scientific-Research Institute of Telemechanical Devices JSC;
OJSC Pella Shipyard;
Scientific Production Center Vigstar JSC;
Scientific-Production Enterprise Salyut JSC;
Scientific-Research Institute and Factory Platan;
Special Design Bureau Salute JSC;
Tambov Plant (TZ) “October”;
Turayev Machine Building Design Bureau Soyuz; and
Zhukovskiy Central Aerohydrodynamics Institute (TsAGI).

https://www.federalregister.gov/documents/2022/04/07/2022-07284/additions-of-entities-to-the-entity-list

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April 7, 2022: The U.S. Department of Commerce, Bureau of Industry and Security (BIS) issued orders denying the export privileges of three Russian Airlines – Aeroflot, Azur Air, and UTair – due to ongoing export violations related to comprehensive export controls on Russia imposed by the Commerce Department. These three Temporary Denial Orders (TDOs) terminate the right of these airlines to participate in transactions subject to the Export Administration Regulations (EAR), including exports and reexports from the United States. These TDOs are issued for 180-days and may be renewed. https://www.commerce.gov/news/press-releases/2022/04/bis-takes-enforcement-actions-against-three-russian-airlines-operating

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April 7, 2022: 87 Fed. Reg. 20295: In response to the Russian Federation's (Russia's) further invasion of Ukraine on February 24, 2022, the Department of Commerce is amending the Export Administration Regulations (EAR) by adding 120 entities under 120 entries to the Entity List. These 120 entities have been determined by the U.S. Government to be acting contrary to the national security interests or foreign policy of the United States and will be listed on the Entity List under the destinations of Belarus and Russia. See the following link for a listing of the 120 entities added to the Entity List. https://www.federalregister.gov/documents/2022/04/07/2022-07284/additions-of-entities-to-the-entity-list

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April 8, 2022: 87 Fed. Reg. 22130: In response to the Russian Federation’s (Russia) ongoing aggression in Ukraine following its further invasion of the country, as substantially enabled by Belarus, the U.S. Department of Commerce, Bureau of Industry and Security (BIS) expanded license requirements for Russia and Belarus under the Export Administration Regulations (EAR) to all items on the Commerce Control List (CCL), which added CCL Categories 0 – 2 to previous license requirements for CCL Categories 3 - 9. It also removes license exception eligibility for aircraft registered in, owned or controlled by, or under charter or lease by Belarus or a national of Belarus. https://www.bis.doc.gov/index.php/documents/federal-register-notices-1/2962-expansion-russia-and-belarus-rin-0694-ai83-4142022-effec482022-2022-07937/file

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April 14, 2022: The U.S. Commerce Department, through its Bureau of Industry and Security (BIS), publicly identified 10 additional aircraft likely in violation of U.S. export controls, including the first seven Belarusian owned/operated commercial aircraft identified since restrictions on Belarus were tightened via regulation effective on April 8, 2022. BIS is also updating the tail numbers of 32 planes already on the list to account for the planes’ purported re-registration in Russia. BIS has also authorized two planes to leave Russia and they will be removed from the list. The aircraft identified on the list have flown into Russia and/or Belarus in apparent violation of the Export Administration Regulations (EAR). See a list of aircraft at the following link:

https://www.commerce.gov/news/press-releases/2022/04/commerce-department-identifies-first-belarusian-and-more-russian

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April 20, 2022: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) denied the export privileges of Arnoldo Vidaurri (Vidaurri). Vidaurri was convicted of violating 18 U.S.C. § 554(a) for fraudulently and knowingly exporting and sending, from the United States to Mexico, two Ruger LCP 380 pistols and 100 rounds of ammunition, without a Department of State export license or other written authorization, in violation of 18 U.S.C. § 554.

https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1367-e2719/file

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

April 1, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned five entities for providing support to the Democratic People’s Republic of Korea’s (DPRK), a.k.a. North Korea, development of weapons of mass destruction (WMD) and ballistic missile programs in violation of multiple United Nations Security Council resolutions (UNSCRs).

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

Hapjanggang Trading Corporation;
Korea Rounsan Trading Corporation;
Ministry of Rocket Industry;
Sungnisan Trading Corporation; And
Unchon Trading Corporation.

https://home.treasury.gov/news/press-releases/jy0695 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220401

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April 5, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the world’s largest and most prominent darknet market, Hydra Market (Hydra), in a coordinated international effort to disrupt the proliferation of malicious cybercrime services, dangerous drugs, and other illegal offerings available through the Russia-based site. The operation targeting Hydra was a collaborative initiative joined by the U.S. Department of Justice, Federal Bureau of Investigations, Drug Enforcement Administration, Internal Revenue Service Criminal Investigation, and Homeland Security Investigations. This action was enhanced by international cooperation with the German Federal Criminal Police, who shut down Hydra servers in Germany and seized $25 million worth of bitcoin.

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

Garantex Europe Ou of Estonia and Russia;
Hydra Market including its various websites of Russia. See the following links for the list of websites.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220405 and https://home.treasury.gov/news/press-releases/jy0701

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April 6, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took major steps to degrade the economy of the Russian Federation in response to Russia’s continued brutal war against Ukraine and atrocities against Ukrainian citizens. Treasury is imposing full blocking sanctions on Sberbank, Russia’s largest state-owned bank, and Alfa-Bank, Russia’s largest private bank. Treasury is also targeting family members of President Vladimir Putin (Putin) and Foreign Minister Sergey Lavrov (Lavrov), as well as Russian Security Council members who are complicit in the war against Ukraine.

OFAC has issued Russia-related General License 8B, General License 9B, General License 10B, General License 21, General License 22, and General License 23, as described below.

General License 8B: All transactions prohibited by Executive Order (E.O.) 14024 involving one or more of the following entities that are related to energy are authorized, through 12:01 a.m. eastern daylight time, June 24, 2022:

(1) State Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank; (2) Public Joint Stock Company Bank Financial Corporation Otkritie;

(3) Sovcombank Open Joint Stock Company;

(4) Public Joint Stock Company Sberbank of Russia;

(5) VTB Bank Public Joint Stock Company;

(6) Joint Stock Company Alfa-Bank;

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

(8) the Central Bank of the Russian Federation.

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

https://home.treasury.gov/system/files/126/russia_gl8b.pdf

General License 9B: All transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), that are ordinarily incident and necessary to dealings in debt or equity of one or more of the following entities issued prior to February 24, 2022 (“Tranche 1 debt or equity”) are authorized through 12:01 a.m. eastern daylight time, May 25, 2022, provided that any divestment or transfer of, or facilitation of divestment or transfer of, Tranche 1 debt or equity must be to a non-U.S. person:

(i) State Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank; (ii) Public Joint Stock Company Bank Financial Corporation Otkritie;

(iii) Sovcombank Open Joint Stock Company;

(iv) Public Joint Stock Company Sberbank of Russia;

(v) VTB Bank Public Joint Stock Company; or

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

All transactions prohibited by the RuHSR that are ordinarily incident and necessary to dealings in debt or equity of Joint Stock Company Alfa-Bank (“Alfa-Bank”) or any entity in which Alfa-Bank owns, directly or indirectly, a 50 percent or greater interest, issued prior to April 6, 2022 (“Alfa-Bank debt or equity”) are authorized through 12:01 a.m. eastern daylight time, June 30, 2022, provided that any divestment or transfer of, or facilitation of divestment or transfer of, Alfa-Bank debt or equity must be to a non-U.S. person.

https://home.treasury.gov/system/files/126/russia_gl9b.pdf

General License 10B: All transactions prohibited by the RuHSR that are ordinarily incident and necessary to the wind down of derivative contracts entered into prior to 4:00 p.m. eastern standard time, February 24, 2022, that:

(i) include one of the following entities (together, the “Tranche 1 entities”) as a counterparty or

(ii) are linked to debt or equity of a Tranche 1 entity are authorized through 12:01 a.m. eastern daylight time, May 25, 2022, provided that any payments to a blocked person are made into a blocked account:

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

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

(iii) Sovcombank Open Joint Stock Company;

(iv) Public Joint Stock Company Sberbank of Russia;

(v) VTB Bank Public Joint Stock Company; or

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

All transactions prohibited by the RuHSR that are ordinarily incident and necessary to the wind down of derivative contracts entered into prior to 4:00 p.m. eastern daylight time, April 6, 2022, that:

(i) include Joint Stock Company Alfa-Bank (“Alfa-Bank”) or any entity in which Alfa-Bank owns, directly or indirectly, a 50 percent or greater interest (collectively, “Alfa-Bank entities”) as a counterparty; or

(ii) are linked to debt or equity of an Alfa-Bank entity are authorized through 12:01 a.m. eastern daylight time, June 30, 2022, provided that any payments to a blocked person are made into a blocked account. (3) Debits to accounts on the books of a U.S. financial institution are authorized to the extent ordinarily incident and necessary to effect the transactions authorized in this general license.

All transactions prohibited by Directive 4 under Executive Order (E.O.) 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation, that are ordinarily incident and necessary to the wind-down of derivative contracts, repurchase agreements, or reverse repurchase agreements entered into prior to 12:01 a.m. eastern standard time, March 1, 2022, that include the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation (collectively, “Directive 4 entities”) as a counterparty are authorized through 12:01 a.m. eastern daylight time, May 25, 2022. https://home.treasury.gov/system/files/126/russia_gl10b.pdf

General License 21: U.S. persons are authorized to engage in all transactions ordinarily incident and necessary to the wind-down of Sberbank CIB USA, Inc., or any entity in which Sberbank CIB USA, Inc. owns, directly or indirectly, a 50 percent or greater interest, that are prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including the processing and payment of salaries, severance, and expenses; payments to vendors and landlords; and closing of accounts, through 12:01 a.m. eastern daylight time, June 7, 2022. https://home.treasury.gov/system/files/126/russia_gl21.pdf

General License 22: All transactions ordinarily incident and necessary to the wind-down of transactions involving Public Joint Stock Company Sberbank of Russia (“Sberbank”) or any entity in which Sberbank owns, directly or indirectly, a 50 percent or greater interest that are prohibited by Executive Order (E.O.) 14024 are authorized through 12:01 a.m. eastern daylight time, April 13, 2022. https://home.treasury.gov/system/files/126/russia_gl22.pdf

General License 23: All transactions ordinarily incident and necessary to the wind-down of transactions involving Joint Stock Company AlfaBank (“Alfa-Bank”) or any entity in which Alfa-Bank owns, directly or indirectly, a 50 percent or greater interest that is prohibited by Executive Order 14024 are authorized through 12:01 a.m. eastern daylight time, May 6, 2022. https://home.treasury.gov/system/files/126/russia_gl23.pdf

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

Katerina Vladimirovna Tikhonova, Vladmir Putin’s daughter, of Russia;
Maria Vladimirovna Vorontsova, Vladmir Putin’s daughter, of Russia;
Beglov, Aleksandr Dmitrievich of Russia and Azerbeijan;
Bulavin, Vladimir Ivanovich of Russia;
Chayka, Yuriy Yakovlevich of Russia;
Chuychenko, Konstantin Anatolyevich of Russia;
Gutsan, Aleksandr Vladimirovich of Russia;
Komarov, Igor Anatolyevich of Russia;
Lavrova, Maria Aleksandrovna, Sergey Lavrov’s wife, of Russia;
Medvedev, Dmitry Anatolievich of Russia;
Mishustin, Mikhail Vladimirovich of Russia;
Nurgaliev, Rashid Gumarovich of Russia and Kazakhstan;
Seryshev, Anatoliy Anatolievich of Russia;
Siluanov, Anton Germanovich of Russia;
Sobyanin, Sergey Semyonovich of Russia;
Trutnev, Yuriy Petrovich of Russia;
Ustinov, Vladimir Vasilyevich of Russia;
Vaino, Anton Eduardovich of Russia;
Vinokurova, Yekaterina Sergeyevna of Russia and the United States, Sergey Lavrov’s daughter;
Yakushev, Vladimir Vladimirovich of Russia.

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

Alfa Capital Markets Ltd, of Cyprus;
Alfa-Direct of Russia;
Alfa-Forex LLC of Russia;
Alfa-Lizing OOO of Russia;
Amsterdam Trade Bank NV of The Netherlands;
Arimero Holding Limited, of Cyprus;
Auction Limited Liability Company of Russia;
Bankruptcy Technology Center Limited Liability Company of Russia;
Barus Limited Liability Company of Russia;
IKS Joint Stock Company of Russia;
Insurance Company Sberbank Insurance Limited Liability Company of Russia;
Insurance Company Sberbank Life Insurance Limited Liability Company of Russia;
Joint Stock Company Alfa-Bank of Russia;
Joint Stock Company Business Environment of Russia;
Joint Stock Company Loyalty Programs Center of Russia;
Joint Stock Company Raschetniye Resheniya of Russia;
Joint Stock Company Sberbank of Russia and the Ukraine;
Joint Stock Company Sberbank Automated Trade System of Russia;
Joint Stock Company Sberbank Leasing of Russia;
Joint Stock Company Sberbank Private Pension Fund of Russia;
Joint Stock Company Sberbank Technologies of Russia;
Joint Stock Company Strategy Partners Group of Russia;
Joint Stock Company United Credit Bureau of Russia;
Limited Liability Company Active Business Consult of Russia;
Limited Liability Company Digital Technologies of Russia;
Limited Liability Company Korus Consulting CIS of Russia;
Limited Liability Company Market Fund Administration of Russia;
Limited Liability Company Promising Investments of Russia;
Limited Liability Company Rutarget of Russia;
Limited Liability Company Sberbank Capital of Russia;
Limited Liability Company Sberbank CIB Holding of Russia;
Limited Liability Company Sberbank Factoring of Russia;
Limited Liability Company Sberbank Financial Company of Russia;
Limited Liability Company Sberbank Insurance Broker of Russia;
Limited Liability Company Sberbank Investments of Russia;
Limited Liability Company Sberbank Real Estate Center of Russia;
Limited Liability Company Sberbank Service of Russia;
Limited Liability Company Yoomoney of Russia;
Open Joint Stock Company BPS-Sberbank of Russia;
Public Joint Stock Company Sberbank Of Russia of Russia;
SB Securities SA, of Luxembourg;
SBER Legal Limited Liability Company of Russia;
SBER Vostok Limited Liability Partnership of Russia;
Sberbank Europe AG, of Austria;
Setelem Bank Limited Liability Company of Russia;
Sovremennye TekhnologII Limited Liability Company of Russia;
Subsidiary Bank Alfa-Bank JSC of Russia;
Subsidiary Bank Sberbank Of Russia Joint Stock Company of Kazakhstan;
Tekhnologii Kreditovaniya Limited Liability Company of Russia;
Vydayushchiesya Kredity Microcredit Company Limited Liability Company of Russia.

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

Lady Leila (UCGL) of Russia;
Lady Rania (UBBO9) of Russia;
Lady Sevda (UBWL7) of Russia;
Sv Konstantin (UBUS4) of Russia;
Sv Nikolay (UBTU6) of Russia.

https://home.treasury.gov/news/press-releases/jy0705 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220406 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220406_33

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April 7, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Alrosa, a Russian state-owned enterprise (SOE) and the world’s largest diamond mining company, which is also responsible for 90 percent of Russia’s diamond mining capacity. The Department of State also redesignated Joint Stock Company United Shipbuilding Corporation (USC), as well as its subsidiaries and board members. USC is a Russian SOE that develops and constructs the majority of the Russian military’s warships, likely including many of those used to bombard Ukraine’s cities and harm Ukraine’s citizens. These actions were taken pursuant to Executive Order (E.O.) 14024. Through these designations, Treasury is cutting off additional sources of support and revenue for the Government of the Russian Federation (GoR) to wage its unprovoked war against Ukraine.

OFAC also issued Russia-related General License 9C, General License 10C, General License 21A, General License 24, and General License 25.

General License 9C: All transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), that are ordinarily incident and necessary to dealings in debt or equity of one or more of the following entities issued prior to February 24, 2022 (“Russian financial institution debt or equity”) are authorized through 12:01 a.m. eastern daylight time, May 25, 2022, provided that any divestment or transfer of, or facilitation of divestment or transfer of, Russian financial institution debt or equity must be to a non-U.S. person:

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

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

(iii) Sovcombank Open Joint Stock Company;

(iv) Public Joint Stock Company Sberbank of Russia;

(v) VTB Bank Public Joint Stock Company; or

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

https://home.treasury.gov/system/files/126/russia_gl9c.pdf

General License 10C: All transactions prohibited by the RuHSR, that are ordinarily incident and necessary to the wind down of derivative contracts entered into prior to 4:00 p.m. eastern standard time, February 24, 2022, that (i) include one of the following entities (collectively, the “Russian financial institution entities”) as a counterparty or (ii) are linked to debt or equity of a Russian financial institution entity are authorized through 12:01 a.m. eastern daylight time, May 25, 2022, provided that any payments to a blocked person are made into a blocked account:

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

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

(iii) Sovcombank Open Joint Stock Company;

(iv) Public Joint Stock Company Sberbank of Russia;

(v) VTB Bank Public Joint Stock Company; or

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

https://home.treasury.gov/system/files/126/russia_gl10c.pdf

General License 21A: U.S. persons are authorized to engage in all transactions ordinarily incident and necessary to the wind-down of Sberbank CIB USA, Inc. or Alrosa USA, Inc. (collectively, the “blocked entities”), or any entity in which the blocked entities own, directly or indirectly, a 50 percent or greater interest, that are prohibited by the RuHSR, including the processing and payment of salaries, severance, and expenses; payments to vendors and landlords; and closing of accounts, through 12:01 a.m. eastern daylight time, June 7, 2022.

https://home.treasury.gov/system/files/126/russia_gl21a.pdf

General License 24: All transactions ordinarily incident and necessary to the wind-down of transactions involving Public Joint Stock Company Alrosa (“Alrosa”) or any entity in which Alrosa owns, directly or indirectly, a 50 percent or greater interest that is prohibited by Executive Order 14024 are authorized through 12:01 a.m. eastern daylight time, May 7, 2022. https://home.treasury.gov/system/files/126/russia_gl24.pdf

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

https://home.treasury.gov/system/files/126/russia_gl25.pdf

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

Lavrishchev, Andrey Vasilyevich of Russia;
Markelov, Vitaliy Anatolyevich of Russia;
Poltavchenko, Georgiy Sergeyevich of Russia;
Pospelov, Vladimir Yakovlevich of Russia;
Rakhmanov, Aleksey Lvovich of Russia;
Ryazantsev, Oleg Nikolayevich of Russia;
Shestakov, Ilya Vasilyevich of Russia;
Shishkin, Andrei Nikolaevich of Russia.

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

Almaz Central Marine Design Bureau Joint Stock Company of Russia;
Baltic Shipyard JSC of Russia;
Federal State Unitary Enterprise Kronshtadtskyy Morskoy Factory Minoborony Rossii of Russia;
Joint Public Stock Company Nevskoe Design Bureau of Russia;
Joint Stock Company 10 Ordena Trudovogo Krasnogo Znameni Dockyard of Russia;
Joint Stock Company Admiralty Shipyards of Russia;
Joint Stock Company Baltic Shipbuilding Plant Yantar of Russia;
Joint Stock Company Central Design Bureau For Marine Engineering Rubin of Russia;
Joint Stock Company Design Office For Shipbuilding Vympel of Russia;
Joint Stock Company Khabarovsk Shipbuilding Yard of Russia;
Joint Stock Company Northern Production Association Arktika of Russia;
Joint Stock Company Production Association Northern Machine-Building Enterprise of Russia;
Joint Stock Company Research Design And Technological Bureau Onega of Russia;
Joint Stock Company Shipbuilding Plant Lotos of Russia;
Joint Stock Company Shiprepairing Center Zvyozdochka of Russia;
Joint Stock Company Sredne-Nevsky Shipyard of Russia;
Joint Stock Company Sudoexport of Russia;
Joint Stock Company Svetlovsky Enterprise Era of Russia;
Joint Stock Company The St. Petersburg's Sea Bureau Of Mechanical Engineering Malachite of Russia;
JSC 33 Shipyard of Russia;
Limited Liability Company Kaspiyskaya Energiya Administration Office of Russia;
Public Joint Stock Company Alrosa of Russia;
Public Joint Stock Company Amursky Shipbuilding Plant of Russia;
Public Joint Stock Company Krasnoye Sormovo Shipyard of Russia;
Public Joint Stock Company Proletarsky Zavod of Russia;
Public Joint Stock Company Shipbuilding Plant Severnaya Verf of Russia;
Public Joint Stock Company Vyborg Shipyard of Russia;
Severnoe Design Bureau Joint Stock Company of Russia;
United Shipbuilding Corporation Jsc Aysberg Central Design Building of Russia.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220407 and https://home.treasury.gov/news/press-releases/jy0707

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April 11, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated seven individuals and one entity across four countries in the Western Balkans pursuant to Executive Order (E.O.) 14033. This is the second action OFAC has taken under E.O. 14033 targeting persons who threaten the stability of the region through corruption, criminal activity, and other destabilizing behavior. This action reinforces Treasury’s commitment to promoting accountability for actors in the Western Balkans region engaged in destabilizing and corrupt behavior. Such corrupt behavior undermines the rule of law and economic growth, and it deprives people in these countries of opportunities and stability.

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

Gruevski, Nikola of North Macedonia;
Marovic, Svetozar of Montenegro;
Mijalkov, Sasho of North Macedonia;
Ndroqi, Ylli Bahri of Alabania;
Rakipi, Aqif of Albania;
Sarajlic, Asim of Bosnia and Herzegovina;
Tadic, Gordana of Bosnia and Herzegovina.

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

C.I.C. KFT. of Hungary.

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

Arsenovic, Djojo of Bosnia-Herzegovin;
Bala, Haradin of Serbia and Montenegro;
Borovnica, Goran of the Balkans;
Cengic, Hasan of Bosnia-Herzegovina;
Deronjic, Miroslav of Bosnia-Herzegovina;
Gashi, Sabit of Serbia and Montenegro;
Hyseni, Xhemajl of Macedonia;
Josipovic, Drago; of Bosnia-Herzegovina;
Marinic, Zoran of Bosnia-Herzegovina;
Mrksic, Milan of Croatia;
Mucic, Zdravko of the Balkans;
Musliu, Jonuz of Serbia and Montenegro;
Nikolic, Drago of Bosnia-Herzegovina;
Ojdanic, Dragoljub of Serbia and Montenegro;
Rushiti, Sait of the Balkans;
Ruxheti, Sait of the Balkans;
Strugar, Pavle of Serbia and Montenegro;
Talic, Momir of Bosnia-Herzegovina;
Todorovic, Stevan of Bosnia-Herzegovina;
Zelenovic, Dragan of the Balkans;
Beara, Ljubisa of Bosnia and Herzegovina;
Hadzic, Goran of Croatia.

https://home.treasury.gov/news/press-releases/jy0712 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220411

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April 11, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated the Kinahan Organized Crime Group (KOCG) along with seven of its key members, including its Irish leaders Christopher Vincent Kinahan Senior, Daniel Joseph Kinahan, Christopher Vincent Kinahan Junior, and three associated businesses pursuant to Executive Order (E.O.) 13581, “Blocking Property of Transnational Criminal Organizations,” as amended. Today’s action is the result of close collaboration between OFAC, the Drug Enforcement Administration, the U.S. Department of State, U.S. Customs and Border Protection, Ireland’s national police force (An Garda Síochána), the United Kingdom’s National Crime Agency, and the European Union Agency for Law Enforcement Cooperation.

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

Clancy, Bernard Patrick of Spain; Dubai, United Arab Emirates; and Ireland;
Dixon, Ian Thomas of the United Arab Emirates and Ireland;
Kinahan Junior, Christopher Vincent of the United Arab Emirates and Ireland;
Kinahan, Christopher Vincent of the United Arab Emirates, the United Kingdom, and Ireland;
Kinahan, Daniel Joseph of the United Arab Emirates, Spain, the United Kingdom, and Ireland;
Mcgovern, Sean Gerard of the United Arab Emirates and Ireland;
Morrissey, John Francis of Spain and Ireland.

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

Ducashew General Trading LLC of the United Arab Emirates;
Hoopoe Sports LLC of the United Arab Emirates;
Kinahan Organized Crime Group of Ireland, the United Kingdom, Spain, The Netherlands, and the United Arab Emirates;
Nero Drinks Company Limited of the United Kingdom and Spain.

https://home.treasury.gov/news/press-releases/jy0713 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220411_33

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April 12, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 26. This General License authorizes all transactions ordinarily incident and necessary to the wind-down of transactions involving Joint Stock Company SB Sberbank Kazakhstan or Sberbank Europe AG (collectively, “the blocked Sberbank subsidiaries”), or any entity in which the blocked Sberbank subsidiaries own, directly or indirectly, a 50 percent or greater interest, that are prohibited by Executive Order (E.O.) 14024 are authorized through 12:01 a.m. eastern daylight time, July 12, 2022.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220412

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April 14, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) made following changes to the SDN List:

Lazarus Group was listed as a secondary sanctions risk: North Korea Sanctions Regulations, sections 510.201 and 510.210; Transactions Prohibited For Persons Owned or Controlled By U.S. Financial Institutions: North Korea Sanctions Regulations section 510.214. LAZARUS GROUP is a North Korean hacker group that is linked to the recent Ronin bridge hack.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220414 and https://news.bitcoin.com/ofac-update-claims-ronin-hack-is-tethered-to-north-koreas-hacker-syndicate-lazarus-group/

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April 19, 2022: The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 27 "Certain Transactions in Support of Nongovernmental Organizations’ Activities." General License 27 authorizes all transactions ordinarily incident and necessary to the activities described below by non-governmental organizations that are prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized, provided that the only involvement of blocked persons is the processing of funds by financial institutions blocked pursuant to Executive Order (E.O.) 14024. (b) The activities are as follows:

(1) Activities to support humanitarian projects to meet basic human needs in Ukraine or the Russian Federation, including drought and flood relief; food, nutrition, and medicine distribution; the provision of health services; assistance for vulnerable or displaced populations, including individuals with disabilities and the elderly; and environmental programs;

(2) Activities to support democracy-building in Ukraine or the Russian Federation, including activities to support rule of law, citizen participation, government accountability, and transparency, human rights and fundamental freedoms, access to information, and civil society development projects;

(3) Activities to support education in Ukraine or the Russian Federation, including combating illiteracy, increasing access to education, international exchanges, and assisting education reform projects;

(4) Activities to support non-commercial development projects directly benefiting the people of Ukraine or the Russian Federation, including those related to health, food security, and water and sanitation; and (5) Activities to support environmental and natural resource protection in Ukraine or the Russian Federation, including the preservation and protection of threatened or endangered species, responsible and transparent management of natural resources, and the remediation of pollution or other environmental damage.

https://home.treasury.gov/system/files/126/russia_gl27.pdf and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220419

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April 20, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) has issued Russia-related General License 28 and General License 29.

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

General License 28: Authorizes all transactions involving Public Joint Stock Company Transkapitalbank (TKB), or any entity in which TKB owns, directly or indirectly, a 50 percent or greater interest, that are ultimately destined for or originating from Afghanistan and prohibited by Executive Order (E.O.) 14024 are authorized through 12:01 a.m. eastern daylight time, October 20, 2022. U.S. financial institutions are authorized to operate correspondent accounts on behalf of TKB, or any entity in which TKB owns, directly or indirectly, a 50 percent or greater interest, provided such accounts are used solely to effect transactions authorized in paragraph (a) of this general license. https://home.treasury.gov/system/files/126/russia_gl28.pdf

General License 29: Authorizes all transactions ordinarily incident and necessary to the wind-down of transactions involving Public Joint Stock Company Transkapitalbank (TKB), or any entity in which TKB owns, directly, or indirectly, a 50 percent or greater interest, that is prohibited by Executive Order (E.O.) 14024, are authorized through 12:01 a.m. eastern daylight time, May 20, 2022. https://home.treasury.gov/system/files/126/russia_gl29_0.pdf

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) also designated entities and individuals involved in attempts to evade sanctions imposed by the United States and its international partners on Russia. OFAC designated Russian commercial bank Transkapitalbank and a global network of more than 40 individuals and entities led by U.S.-designated Russian oligarch Konstantin Malofeyev, including organizations whose primary mission is to facilitate sanctions evasion for Russian entities. OFAC also designated companies operating in Russia’s virtual currency mining industry, reportedly the third-largest in the world. This is the first time Treasury has designated a virtual currency mining company.

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

Alekseev, Mikhail Yurevich of Russia;
Cherkasova, Nadia Narimanovna of Russia;
Emelyanova, Svetlana Petrovna of Russia;
Gadetskiy, Yevgeniy Yuryevich of Russia;
Goldfinch, Paul Andrew of Russia and New Zealand;
Golikov, Andrey Fedorovich of Russia;
Karachinskiy, Anatoly Mikhailovich of Russia;
Kolychev, Vladimir Vladimirovich of Russia;
Kremleva, Irina Vladimirovna of Russia;
Kupriyanov, Alexey Aleksandrovich of Russia;
Kuzmin, Pavel Vladimirovich of Russia;
Leshchenko, Mikhail Aleksandrovich of Russia;
Levin, Dmitriy Olegovich of Russia;
Malofeyev, Kirill Konstantinovich of Russia;
Markov, Ilya Anatolyevich of Russia;
Melikov, Nikita of Russia;
Nechiporuk, Roman Viktorovich of Russia;
Nesterenko, Tatyana Gennadevna of Russia;
Nikolaev, Viktor Andreevich of Russia;
Okulov, Aleksandr of Russia; Romania; United Arab Emirates; and Moldova;
Rusanov, Sergey Georgievich of Russia;
Samoylov, Artem of Russia;
Simanovskiy, Alexey Yurevich of Russia;
Subbotin, Alexey Anatolyevich of Russia;
Titova, Elena Borisovna of Russia;
Tyurina, Natalya Aleksandrovna of Russia;
Yakushev, Mikhail Ilich of Russia;
Yudayeva, Kseniya Valentinovna of Russia;
Zadornov, Mikhail Mikhaylovich of Russia.

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

Agent De Asigurare Lider Asig Societate Cu Raspundere Limitata of Moldova;
All-Russian Public Organization Society For The Promotion Of Russian Historical Development Tsargrad of Russia;
Analiticheski Tsentr Katekhon OOO of Russia;
Autonomous Noncommercial Organization For The Study And Development Of International Cooperation In The Economic Sphere International Agency Of Sovereign Development of Russia;
Bitriver AG of Switzerland;
Ekoferma Zareche OOO of Russia;
Imenie Tsargrad OOO of Russia;
Imperiya 19-31 OOO of Russia;
Joint Stock Company Investtradebank of Russia;
Joint Stock Company Marshal Global of Russia;
Kontur OOO of Russia;
Kurort Livadiya OOO of Russia;
Kurort Tsargrad Spas-Teshilovo OOO of Russia;
Limited Liability Company Russian Digital Solutions of Russia;
Limited Liability Company Vladeks of Russia;
Limited Liability Company Vladeks Kholding of Russia;
MGI PTE LTD of Singapore;
Okaf Trading Societatea Cu Raspundere Limitata of Moldova;
OOO Bitriver Rus of Russia;
OOO Bitriver-B of Russia;
OOO Bitriver-K of Russia;
OOO Bitriver-North of Russia;
OOO Bitriver-Turma of Russia;
OOO Everest Grup of Russia;
OOO Management Company Bitriver of Russia;
OOO Sibirskie Mineraly of Russia;
OOO Torgovy Dom Asbest of Russia;
OOO Tuvaasbest of Russia;
Organizatia De Creditare Nebancara Lider Leasing SRL of Moldova;
Proizvodstvenno-Stroitelnaya Kompaniya SNM of Russia;
Public Joint Stock Company Transkapitalbank of Russia;
Societatea Cu Raspundere Limitata Project Invest Company of Moldova;
Spetsinvestservis OOO of Russia;
Teshilovo OOO of Russia;
Tsargrad OOO of Russia;
Tsargrad Park OOO of Russia;
Tsargrad-Kultura OOO of Russia;
Tsargrad-Media OOO of Russia;
Tureya OOO of Russia;
Zareche-Oka OOO of Russia.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220420 and https://home.treasury.gov/news/press-releases/jy0731

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April 25, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Ukraine-/Russia-related General License 13R and General License 15L. In addition, OFAC has updated several Frequently Asked Questions.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220425_33

General License 13R: Authorizes all transactions and activities otherwise prohibited by the Ukraine Related Sanctions Regulations, 31 CFR part 589 (URSR), that are ordinarily incident and necessary (1) to divest or transfer debt, equity, or other holdings in GAZ Group to a non-U.S. person, or (2) to facilitate the transfer of debt, equity, or other holdings in GAZ Group by a non-U.S. person to another non-U.S. person, are authorized through 12:01 a.m. eastern daylight time, May 25, 2022.

Authorizes all transactions and activities otherwise prohibited by the URSR that are ordinarily incident and necessary to (1) divest or transfer debt, equity, or other holdings in GAZ Group, or in entities in which GAZ Group owns, directly or indirectly, a 50 percent or greater interest, that were issued by GAZ Auto Plant (hereinafter, “Other Issuer Holdings”), to a non-U.S. person; or facilitate the transfer of Other Issuer Holdings by a non-U.S. person to another non-U.S. person, are authorized through 12:01 a.m. eastern daylight time, May 25, 2022. The transactions and activities authorized include facilitating, clearing, and settling transactions to divest to a non-U.S. person debt, equity, or other holdings in GAZ Group, or Other Issuer Holdings as described in paragraph (b), including on behalf of U.S. persons. https://home.treasury.gov/system/files/126/ukraine_gl13r.pdf

General License 15L: Authorizes all transactions and activities prohibited by the Ukraine Related Sanctions Regulations, 31 CFR part 589 (URSR), that are ordinarily incident and necessary to the wind-down of transactions involving GAZ Group, or any entity in which GAZ Group owns, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern daylight time, May 25, 2022.

https://home.treasury.gov/system/files/126/ukraine_gl15l.pdf

See the following link for Frequently Asked Questions related to General Licenses 13R and 15L: https://home.treasury.gov/policy-issues/financial-sanctions/faqs/updated/2022-04-25

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April 29, 2022: OFAC is amending and reissuing, in their entirety, the Ukraine-Related Sanctions Regulations, 31 C.F.R. part 589, and renaming the regulations the Ukraine-/Russia-Related Sanctions Regulations. This administrative action replaces the regulations that were published in abbreviated form on May 8, 2014 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. OFAC is also revising several FAQs for the Ukraine-/Russia-Related Sanctions Regulations.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220429

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Department of The Treasury

April 5, 2022: 87 Fed. Reg. 19737: In accordance with section 999(a)(3) of the Internal Revenue Code of 1986, the Department of the Treasury is publishing a current list of countries that require or may require participation in, or cooperation with, an international boycott (within the meaning of section 999(b)(3) of the Internal Revenue Code of 1986). The countries are:

Iraq;
Kuwait;
Lebanon;
Libya;
Qatar;
Saudi Arabia;
Syria; and
Yeman

https://www.federalregister.gov/documents/2022/04/05/2022-07140/list-of-countries-requiring-cooperation-with-an-international-boycott

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Fines and Penalties

April 1, 2022: OFAC settles with S&P Global, Inc. for $78,750 related to apparent violations of the Ukraine-Related Sanctions Regulations in 2016 and 2017. The apparent violations occurred when S&P Global and a company it acquired reissued and redated multiple invoices to continue to extend credit to JSC Rosneft (“Rosneft”), a state-owned Russian oil company, in violation of the debt and equity restrictions set forth under Executive Order (E.O.) 13662. After reissuing and re-dating four invoices to extend the original payment dates, S&P Global ultimately accepted past-due payments totaling $82,500 from Rosneft. The settlement amount reflects OFAC’s determination that S&P Global’s apparent violations were non-egregious and not voluntarily self-disclosed. https://home.treasury.gov/system/files/126/20220401_spglobal.pdf

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April 1, 2022: Former GE Power Engineer, Xiaoqing Zheng, of New York was convicted of conspiracy to commit economic espionage with individuals in China to steal GE Power & Water’s (“GE”) Trade Secrets Knowing or Intending to Benefit the Government of China. A federal jury convicted Zheng of conspiracy to commit economic espionage following a four-week jury trial. According to court documents and evidence presented at trial, Zheng, 59, of Niskayuna, NY was employed at GE Power & Water in Schenectady, New York, as an engineer specializing in 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 steam and gas turbine technologies, knowing or intending to benefit the People’s Republic of China and one or more foreign instrumentalities, including China-based companies that research, develop, and manufacture parts for turbines. https://www.justice.gov/opa/pr/former-ge-power-engineer-convicted-conspiracy-commit-economic-espionage

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April 4, 2022: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has issued the following five new Orders Denying Export Privileges:

April 4, 2022: 87 Fed. Reg. 87 Fed. Reg. 19475: On March 10, 2020, in the U.S. District Court for the Southern District of Texas, Andrew Estrada (“Mr. Estrada”) was convicted of violating 18 U.S.C. 554(a). Specifically, Estrada was convicted of fraudulently and knowingly exporting and sending or attempting to export or send from the United States to Mexico, approximately 500 rounds of .38 Super caliber ammunition and two 7.62 x 39 mm drum magazines, in violation of 18 U.S.C. 554. As a result of his conviction, on March 10, 2020, the Court sentenced Mr. Estrada to 30 months in prison, three years of supervised release, and a $100 court assessment. Based on his conviction, BIS denied Mr. Estrada’s export privileges for seven (7) years from the date of his conviction.

https://www.federalregister.gov/documents/2022/04/04/2022-07045/in-the-matter-of-andrew-estrada-1402-w-jeff-drive-pharr-tx-78577-9659-order-denying-export

April 4, 2022: 87 Fed. Reg. 19477: On October 3, 2019, in the U.S. District Court for the Southern District of Texas, Guadalupe Horacio Garza-Cavazos (“Mr. Garza-Cavazos”) was convicted of violating 18 U.S.C. 554(a). Specifically, Mr. Garza-Cavazos was convicted of fraudulently and knowingly exporting and sending or attempting to export and send from the United States to Mexico, (1) SIG Sauer .380 Auto, (1) Beretta .22 LR, (1) Glock 17 9mm, (1) Glock 19 9mm, (1) Smith and Wesson 9mm, (1) SIG Sauer 9mm, (2) 20 round boxes of .308 caliber ammunition, (1) 20 round box of .30-30 caliber ammunition, and 12 pistol magazines, in violation of 18 U.S.C. 554. As a result of his conviction, the Court sentenced Mr. Garza-Cavazos to 46 months in prison and a $100 assessment. Based on his conviction, BIS denied Mr. Garza-Cavazos’ export privileges for ten (10) years from the date of his conviction. https://www.federalregister.gov/documents/2022/04/04/2022-07046/in-the-matter-of-guadalupe-horacio-garza-cavazos-inmate-number-87312-479-fci-butner-low-federal

April 4, 2022: 87 Fed. Reg. 19478: On June 11, 2019, in the U.S. District Court for the Western District of Washington, Hicham Diab (“Mr. Diab”) was convicted of violating 18 U.S.C. 371. Specifically, Diab was convicted of knowingly and intentionally conspiring to willfully export firearms, defense articles designated on the United States Munitions List, from the United States to Lebanon, without having obtained from the United States Department of State a license or written approval for the export of these defense articles, in violation of 18 U.S.C. 371. As a result of his conviction, the Court sentenced Mr. Diab to 18 months imprisonment and a $200 assessment. Based on his conviction, BIS denied Mr. Diab’s export privileges for ten (10) years from the date of his conviction.

https://www.federalregister.gov/documents/2022/04/04/2022-07047/in-the-matter-of-hicham-diab-mar-maroun-street-tedros-building-6th-floor-tripoli-lebanon-order

April 4, 2022: 87 Fed. Reg. 19479: On June 11, 2019, in the U.S. District Court for the Western District of Washington, Nafez El Mir (“Mr. El Mir”) was convicted of violating 18 U.S.C. 371. Specifically, Mr. El Mir was convicted of knowingly and intentionally conspiring to willfully export firearms, defense articles designated on the United States Munitions List, from the United States to Lebanon, without having obtained from the United States Department of State a license or written approval for the export of these defense articles, in violation of 18 U.S.C. 371. As a result of his conviction, the Court sentenced Mr. El Mir to 18 months imprisonment and a $200 assessment. Based on his conviction, BIS denied Mr. El Mir’s export privileges for ten (10) years from the date of his conviction.

https://www.federalregister.gov/documents/2022/04/04/2022-07048/in-the-matter-of-nafez-el-mir-10630-place-de-lacadie-apartment-12-montreal-quebec-canada-h4n1a2

April 4, 2022: 87 Fed. Reg. 19476: On May 23, 2019, in the U.S. District Court for the Southern District of Texas, Sergio Eduardo Perez-Barragan (“Mr. Perez-Barragan”) was convicted of violating 18 U.S.C. 554(a). Specifically, Perez-Barragan was convicted of fraudulently and knowingly exporting and sending from the United States or attempting to export and sending from the United States, one thousand (1,000) rounds of 9mm ammunition, three hundred and fifty (350) rounds of .380 caliber ammunition, two hundred (200) rounds of .243 caliber ammunition, and twenty (20) rounds of .270 caliber ammunition, in violation of 18 U.S.C. 554. Mr. Perez-Barragan was sentenced to 10 months in prison and a $100 assessment. Based on his conviction, BIS denied Mr. Perez-Barragan’s export privileges for seven (7) years from the date of his conviction.

https://www.federalregister.gov/documents/2022/04/04/2022-07044/in-the-matter-of-sergio-eduardo-perez-barragan-altamira-411-poniente-tampico-tamaulipas-89137-mexico

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April 6, 2022: Konstantin Malofeyev (Mr. Malofeyev), 47, of Russia was charged with violating U.S. sanctions arising from the 2014 Russian undermining of democratic processes and institutions in Ukraine. According to the indictment, which was unsealed in the Southern District of New York, Mr. Malofeyev, was charged with conspiracy to violate U.S. sanctions and violations of U.S. sanctions in connection with his hiring of an American citizen, Jack Hanick (Mr. Hanick), to work for him in operating television networks in Russia and Greece and attempting to acquire a television network in Bulgaria. As alleged, Mr. Malofeyev also conspired with Mr. Hanick and others to illegally transfer a $10 million investment that Mr. Malofeyev made in a U.S. bank to a business associate in Greece, in violation of the sanctions blocking Mr. Malofeyev’s assets from being transferred. Along with the indictment, the United States issued a seizure warrant for Mr. Malofeyev’s U.S. investment. Mr. Malofeyev remains at large and is believed to be in Russia.

https://www.justice.gov/opa/pr/russian-oligarch-charged-violating-us-sanctions

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April 7, 2022: A Chinese national, Xiang Haitao (Xiang), 44, formerly residing in Chesterfield, Missouri, was sentenced to 29 months in prison followed by three years of supervised release and a $150,000 fine for conspiring to commit economic espionage. Xiang pleaded guilty to the charge in January 2022. According to court documents, Xiang conspired to steal a trade secret from The Climate Corporation, a subsidiary of Monsanto, an internationally based company doing business in St. Louis, Missouri, for the purpose of benefitting a foreign government, namely the People’s Republic of China (PRC).

https://www.justice.gov/opa/pr/chinese-national-sentenced-economic-espionage-conspiracy

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April 7, 2022: A former University of Kansas (KU) professor, Feng Tao, aka Franklin Tao (Tao), 50, was today convicted by a federal jury on three counts of wire fraud and one count of false statements after he deliberately concealed that he was also employed by a government-affiliated university in the People’s Republic of China (PRC), while working on U.S. government-funded research at KU. Tao of Lawrence, Kansas, worked as a full-time professor at KU. According to court documents and evidence presented at trial, in 2018, Tao accepted a position with Fuzhou University in China that designated him as a Changjiang Scholar Distinguished Professor. The position’s guidelines required him to be a full-time employee of Fuzhou University.

The Kansas Board of Regents (KBOR) required faculty to file annual reports to notify of any outside employment that did or could impact duties as a conflict of interest. Tao didn’t seek permission from KU before entering the agreement with Fuzhou University, didn’t notify KU about the employment, and lied to conceal the employment. In December 2018, the defendant moved to China to work full-time at Fuzhou University, while falsely telling KU administrators that he was in Europe. https://www.justice.gov/opa/pr/jury-convicts-university-kansas-researcher-hiding-ties-chinese-government

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April 8, 2022: A former Managing Director of The Goldman Sachs Group Inc. (Goldman Sachs), Ng Chong Hwa, aka Roger Ng (“Roger Ng”) of Malaysia was convicted by a federal jury in the Eastern District of New York for conspiring to commit bribery, to circumvent internal accounting controls, and to commit money laundering in connection with a multibillion-dollar scheme involving Malaysia’s state-owned investment and development fund, 1Malaysia Development Berhad (1MDB). Following an eight-week trial, Roger Ng was found guilty of conspiring to violate the Foreign Corrupt Practices Act (FCPA) by paying bribes to a dozen foreign officials in Malaysia and the United Arab Emirates, conspiring to violate the FCPA by circumventing the internal accounting controls of Goldman Sachs, and conspiring to launder billions of dollars related to the scheme.

https://www.justice.gov/opa/pr/former-goldman-sachs-investment-banker-convicted-massive-bribery-and-money-laundering-scheme

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April 12, 2022: A Texas man and woman, Xiaojian Tao, 63 (Tao), and Yu Lang, aka Laura Lang, 63 (Lang) were arrested in Helotes on criminal charges related to the husband’s involvement in alleged export violations, and both of their alleged involvement in a scheme to defraud a research and development company (R&D Company) that provided services to industrial and government clients in the United States and abroad.

Tao is charged with one count of illegal export of defense articles; one count of unlawful export of commerce-controlled goods; and one count of making a false statement with regards to the Export Control Reform Act (ECRA). Tao allegedly exported items to China without having obtained a required export license from either the Department of State or the Department of Commerce. Tao and Lang are both charged with one count of conspiracy to commit wire fraud and nine counts of wire fraud. According to court documents, from 1997 to the present, Tao and Lang owned and operated Tyletech, aka Tylex Tech LLC, and Tyle Tech, a company that provides engineering consulting services. From 1994 to March 2020 Tao worked for the R&D Company that directly competed with Tyletech. Although Tao certified that each year he would notify the R&D Company of any conflicts of interest and follow Standards of Conduct, Tao and Lang hid Tao’s role in Tyletech, instead funneling business from the R&D Company to Tyletech. Further, from 2016 to 2020, Tao and Lang allegedly filed false income tax returns and are both charged with one count of conspiracy to defraud the United States and five counts of filing false tax returns. Tao also is charged with one count of making a false statement and Lang is charged with two counts of making a false statement.

If convicted, Tao faces a maximum of 20 years in prison on each of the export counts and the false ECRA statement. Tao and Lang face a maximum of 20 years in prison on each of the wire fraud counts; five years in prison on each of the false statement counts and the defrauding the U.S. count, and three years in prison on each of the false tax return counts.

https://www.justice.gov/opa/pr/husband-and-wife-arrested-export-control-violations-wire-fraud-tax-fraud-and-making-false

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April 12, 2022: Virgil Griffith, 39 (Griffith) a U.S. citizen who conspired to provide services to the Democratic People’s Republic of Korea (DPRK or North Korea), including technical advice on using cryptocurrency and blockchain technology to evade sanctions, was sentenced to 63 months in prison after pleading guilty to conspiracy to violate the International Emergency Economic Powers Act (IEEPA).

According to court documents, Griffith began formulating plans as early as 2018 to provide services to individuals in the DPRK by developing and funding cryptocurrency infrastructure there, including to mine cryptocurrency. Griffith knew that the DPRK could use these services to evade and avoid U.S. sanctions, and to fund its nuclear weapons program and other illicit activities. https://www.justice.gov/opa/pr/us-citizen-who-conspired-assist-north-korea-evading-sanctions-sentenced-over-five-years-and

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April 12, 2022: A federal grand jury in the Middle District of Florida returned an indictment charging Lawrence O’Brien, Bruce LaRoche, and Thomas Dailey of Florida with conspiring to rig bids for customized promotional products to the U.S. Army and charging two of them with conspiring to defraud the United States. Two of the men were arrested early this morning, and all three appeared in court for initial appearances this afternoon. According to court documents, Lawrence O’Brien, Bruce LaRoche and Thomas Dailey conspired to eliminate competition among their companies and secure sales for a pre-arranged winner. To carry out this scheme, they exchanged their company’s bid templates and submitted bids to military customers on each other’s behalf.

https://www.justice.gov/opa/pr/three-florida-men-indicted-rigging-bids-and-defrauding-us-military

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April 20, 2022: Andrew Scott, Pierson, 46 (Pierson), of Jay, Oklahoma was sentenced to 12 years in prison for his role in a conspiracy that resulted in the trafficking of firearms to Mexican cartels. In May 2017, an Arkansas resident received a shipment of firearm components that had been sent to him for cerakoting, a process in which a polymer-ceramic coating is added to a firearm or its parts to improve durability. The parts appeared to be 80% Colt lower receivers, and the Arkansas resident recognized these firearm parts as counterfeit. He contacted law enforcement. The counterfeit receivers were traced to an organization in Laredo, Texas, which was transporting firearm parts to Pierson in Nuevo Laredo, Mexico. Pierson assembled the parts into functioning weapons for the Cartel Del Noreste (CDN) and Cartel Jalisco Nueva Generacion (CJNG). Pierson was arrested at the southern United States border on December 10, 2018. Pierson admitted to ordering and receiving firearm parts from the United States and manufacturing automatic weapons in Mexico for the CDN and CJNG cartels. Law enforcement later confirmed cartel firearm availability was impaired following Pierson’s arrest.

https://www.justice.gov/usao-edar/pr/oklahoma-man-sentenced-12-years-prison

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April 21, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $141,442 settlement with Newmont Corporation (“Newmont”), a multinational mining firm headquartered in Denver, Colorado. Newmont has agreed to settle a potential civil liability for four apparent violations of the Cuban Assets Control Regulations (CACR), 31 C.F.R. part 515. Specifically, between approximately June 2016 to November 2017, Newmont Suriname, a wholly-owned subsidiary of Newmont that is a person subject to the jurisdiction of the United States under the CACR, purchased Cuban-origin explosives and explosive accessories from a third-party vendor involving four separate transactions. OFAC determined that Newmont voluntarily disclosed the apparent violations and that the apparent violations constitute a non-egregious case.

https://home.treasury.gov/system/files/126/20220421_newmont.pdf

Separately, OFAC announced a $45,908 settlement with Chisu International Corporation (“Chisu”), a company located in Parkland, Florida that is affiliated with a distributor of explosives and accessories for mining operations. Chisu has agreed to settle a potential civil liability for four apparent violations of the Cuban Assets Control Regulations (CACR), 31 C.F.R. part 515. Specifically, between June 2016 and November 2017, Chisu and its affiliates in Suriname and Panama on four occasions procured Cuban-origin explosives and related accessories originating from the Cuban entity Unión Latinoamericana de Explosivos (ULAEX) on behalf of a U.S. company for the U.S. company’s mining project in Suriname. OFAC determined that Chisu did not voluntarily disclose the apparent violations and that the apparent violations constitute a non-egregious case. https://home.treasury.gov/system/files/126/20220421_chisu.pdf

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April 25, 2022: The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with Toll Holdings Limited (“Toll”), an international freight forwarding and logistics company headquartered in Melbourne, Australia. Toll agreed to remit $6,131,855 to settle its potential civil liability for 2,958 apparent violations of the Iranian Transactions and Sanctions Regulations, the North Korea Sanctions Regulations, and the Syrian Sanctions Regulations, the Weapons of Mass Destruction Proliferators Sanctions Regulations, and the Global Terrorism Sanctions Regulations. The apparent violations occurred when Toll originated or received payments through the U.S. financial system involving sanctioned jurisdictions and persons. These payments were in connection with the sea, air, and rail shipments conducted by Toll, its affiliates, or suppliers to, from, or through the Democratic People’s Republic of Korea, Iran, or Syria, or the property or interests in property of an entity on OFAC’s list of Specially Designated Nationals and Blocked Persons. The settlement amount reflects OFAC’s determination that Toll’s apparent violations were non-egregious and voluntarily self-disclosed. https://home.treasury.gov/system/files/126/20220425_toll.pdf

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April 25, 2022: ALEJANDRO CAO DE BENOS, a citizen of Spain, and CHRISTOPHER EMMS, a citizen of the United Kingdom, were indicted and charged with conspiring to violate United States sanctions on the Democratic People’s Republic of Korea (DPRK or North Korea” by working with U.S. citizen Virgil Griffith to illegally provide cryptocurrency and blockchain technology services to the DPRK. Both CAO DE BENOS and EMMS remain at large. Griffith previously pled guilty to conspiring to assist North Korea in evading sanctions in violation of the International Emergency Economic Powers Act (“IEEPA”) and was sentenced to 63 months in prison and a $100,000 fine. https://www.justice.gov/usao-sdny/pr/us-attorney-announces-charges-against-two-european-citizens-conspiring-us-citizen

APRIL 2022 EXPORT CONTROL REGULATION UPDATES Read More »

MARCH 2022 EXPORT CONTROL REGULATION UPDATES

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

Department of State

DDTC Issues Interim Final Rule To Amend The First Chapter Of The ITAR

March 23, 2022: 87 Fed. Reg. 16396: The U.S. Department of State has issued an interim final rule to amend the International Traffic in Arms Regulations (ITAR) Part 120 (first chapter) to better organize the purposes and definitions of the regulations. The rule consolidates and co-locates authorities, general guidance, and definitions. This rule restructures Part 120 of the ITAR to better organize the definitions previously found in that part and other parts of the ITAR and to consolidate provisions that provide background information or otherwise apply throughout the regulations. In addition, this rule adds text not previously found in the ITAR and makes clarifying revisions to existing text. None of the revisions change the current scope of the ITAR. This rule is intended to be the first in a series of rulemakings that will further streamline and clarify the regulations.

Prior to this rulemaking, generally applicable information and definitions were spread throughout the ITAR. As a result of this rulemaking, Part 120 is divided into three subparts:

Subpart A - General Information;
Subpart B - General Policies and Processes; and
Subpart C - Definitions.

The division into subparts is intended to provide the reader with a roadmap for the regulations.

Subpart A—General Information, consolidates and explains the legislative authority and purpose of the regulations to aid in understanding their importance and source.
Subpart B—General Policies and Processes, outlines the general processes and policies of the ITAR.
Subpart C—Definitions, provides a consolidated list of defined terms that are applicable throughout the ITAR.

DDTC is also revising those sections affected by this rule that use acronyms to follow a standard format. Where a single term for which there is a known acronym appears on more than two occasions within any one section, the first instance is followed by a parenthetical containing the acronym and subsequent use of the term is by acronym. This will provide consistency of format without sacrificing clarity and limits unnecessary text.

This interim final rule is effective September 6, 2022. If you would like to make a comment about this rule the Department of State is accepting comments through May 9, 2022.

See the Federal Register Notice for the complete changes to the ITAR as well as the Department of State’s website: https://www.federalregister.gov/documents/2022/03/23/2022-05629/international-traffic-in-arms-regulations-consolidation-and-restructuring-of-purposes-and and https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_news_and_events

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Department of State Offers Millions In Rewards For Russian Cyber Criminals

March 24, 2022: The U.S. Department of State’s Rewards for Justice (RFJ) program is now offering a reward for information on Russian Federal Security Service (FSB) officers Pavel Aleksandrovich Akulov, Mikhail Mikhailovich Gavrilov, and Marat Valeryevich Tyukov for their alleged involvement in computer intrusions, wire fraud, aggravated identity theft, and damage to the property of an energy facility offenses. RFJ, which is administered by the Diplomatic Security Service, is offering a reward of up to $10 million for information leading to the identification or location of Akulov, Gavrilov, Tyukov, or any other person who, while acting at the direction or under the control of a foreign government, aids or abets a violation of the Computer Fraud and Abuse Act, which may include participation in malicious cyber activities against U.S. critical infrastructure. https://www.state.gov/rewards-for-justice-reward-offer-for-information-on-russian-fsb-officers-conducting-malicious-activity-against-u-s-critical-infrastructure-between-2012-2017/

The U.S. Department of State’s Rewards for Justice (RFJ) program is also offering a reward for information on Russia-based hacker Evgeny Viktorovich Gladkikh. RFJ is offering a reward of up to $10 million for information leading to the identification or location of Gladkikh or any other person who, while acting at the direction or under the control of a foreign government, aids or abets a violation of the Computer Fraud and Abuse Act, which may include participation in malicious cyber activities against U.S. critical infrastructure. https://www.state.gov/rewards-for-justice-reward-offer-for-information-on-russian-government-cyber-actor-for-conducting-malicious-activity-against-u-s-critical-infrastructure-in-2017-and-2018/

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

March 2, 2022: 87 Fed. Reg. 11802: In accordance with the Paperwork Reduction Act of 1995, the U.S. Department of State's Directorate of Defense Trade Controls (DDTC) is seeking public comments on its Statement of Registration form (Form DS-2032). Interested persons have until May 2, 2022, to submit their comments. https://www.federalregister.gov/documents/2022/03/02/2022-04318/60-day-notice-of-proposed-information-collection-statement-of-registration

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DDTC Name And Address Changes Posted To Website

March 2 through 29, 2022: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at

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

Change in address for CMI Defence America, Inc. from 7205 Sterling Ponds Court, Sterling Heights, Michigan, 48312 to 1920 Opdyke Court, Suite 100, Auburn Hills, Michigan, 48326;
Change in name from L3 Westwood Corporation and SPD Electrical Systems, Inc. to L3Harris Maritime Power & Energy Solutions, Inc. due to corporate reorganization;
Change in Name of the following L3Harris Technologies, Inc. Australia subsidiaries due to corporate rebranding:

Previous Name	Amended Name
Exelis Australia Pty., Ltd.	L3Harris Exelis Australia Pty Ltd
Harris Communications (Australia) Pty Ltd	L3Harris Communications Australia Pty Ltd

Change in Name from Mikuni Corporation Aerospace & Machinery Company to Mikuni Aerospace Corporation due to corporate rebranding;
Change in Name from QuantiTech LLC to Axient, LLC due to corporate rebranding;
Change in Address for Claverham Limited from Rivermead Court 2, Kenn Business Park, Clevedon, Bristol BS21 6TH, UK to Fore 1, Fore Business Park, Huskisson Way, Stratford Road, Shirley, Solihull, England, B90 4SS, UK;
Change in Name of the following L3Harris Technologies, Inc. UK subsidiaries due to corporate rebranding:

Previous Name	Amended Name
L-3 Communications ASA Limited	L3Harris Technologies ASA Limited
EDO MBM Technology Limited	L3Harris Release & Integrated Solutions Inc.
TRL Technology Ltd.	L3Harris TRL Technology Ltd.

Change in Name of the following L3Harris Technologies, Inc. UK subsidiaries due to corporate rebranding:

Previous Name	Amended Name
L3 Commercial Training Solutions Ltd.	L3Harris Commercial Training Solutions Limited
L3Harris Systems UK Limited	L3Harris Communications Systems UK Limited

Change in Address for MTG Marinetechnik GmbH from Wandsbeker Koenigstrasse 62, 22041 Hamburg, Germany to MTG Marinetechnik GmbH at Budnikowsky-Twiete 7, 22041 Hamburg, Germany;
Changes in Name from Yokogawa Electric Corporation and Yokogawa Manufacturing Corporation to Oki Electric Industry Co., Ltd., due to acquisition;
Change in Name from Altran Switzerland AG to Capgemini Suisse SA due to acquisition;
Change in Name from Air Nostrum Lineas Aereas del Mediterraneo SAU to Air Nostrum Engineering and Maintenance Operations SLU due to corporate rebranding.

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

Commerce Takes Additional Actions Related To Exports Of Certain Materials And Adds Parties To The Entity List

March 3, 2022: 87 Fed. Reg. 12856 and 87 Fed. Reg. 13141: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has taken two additional actions in response to Russia's invasion of Ukraine, both effective March 3:

The first action/final rule builds on existing restrictions BIS put in place on the Russian deepwater oil and gas exploration and extraction industries in 2014 by imposing a policy of denial on such items and applying similarly stringent restrictions on a wide variety of items necessary for refining oil. This rule expands the scope of the sanctions against the Russian industry sector that was originally added to the EAR in August 2014 in response to Russia's 2014 destabilizing conduct in Ukraine and occupation of the Crimea region of Ukraine. See 79 FR 45675 (Aug. 6, 2014). The export controls in this final rule target the oil refinery sector in Russia. This final rule amends part 746 of the EAR (Embargoes and Other Special Controls) to expand the scope of the Russian industry sector sanctions by adding a new general prohibition that will apply to additional Harmonized Tariff Schedule (HTS)-6 codes and Schedule B numbers for all exports, reexports, and transfers (in-country) to or within Russia. Refer to Supplement No. 2 to 22 CFR § 746. file (doc.gov)
The second final rule implemented adds 91 new parties in 10 countries to the Commerce Department’s Entity List. The parties were added to the list upon a determination by the interagency End-User Review Committee (ERC), made up of the Departments of Commerce (Chair), Defense, State, Energy, and where appropriate, Treasury, based upon their involvement in, contributions to, or other support of the Russian security services, military and defense sectors, and military and/or defense research and development efforts. These entities are located in: Russia (81), United Kingdom (3), Estonia (3), Spain (2), Malta (2), Kazakhstan (1), Latvia (1), Belize (1), Singapore (1), and Slovakia (1) (NOTE: Total entries is 96 as some entities operate in multiple countries). The entities added to the Entity List via the final rule are as follows:

Belize

Ecotherm-Cryo Limited.

Estonia

ADIMIR OU;
Eastline Technologies OU; and
Valery Kosmachov.

Kazakhstan

Serniya Engineering.

Latvia

Ecotherm-Cryo Limited.

Malta

Djeco Group LP; and
Malberg Limited.

Russia

Amur Shipbuilding Factory PJSC;
AO Center of Shipbuilding and Ship Repairing JSC;
AO Kronshtadt;
Avant Space LLC;
Baikal Electronics;
Center for Technological Competencies in Radiophtonics;
Central Research and Development Institute Tsiklon;
Crocus Nano Electronics;
Dalzavod Ship-Repair Center;
Elara;
Electronic Computing and Information Systems;
ELPROM;
Engineering Center Ltd.;
Forss Technology Ltd.;
Integral SPB;
JSC Element;
JSC Pella-Mash;
JSC Shipyard Vympel;
Kranark LLC;
Lev Anatolyevich Yershov (Ershov);
LLC Center;
MCST Lebedev;
Miass Machine-Building Factory;
Microelectronic Research and Development Center Novosibirsk;
MPI VOLNA;
N.A. Dollezhal Order of Lenin Research and Design Institute of Power Engineering;
Nerpa Shipyard;
NM-Tekh;
Novorossiysk Shipyard JSC;
NPO Electronic Systems;
NPP Istok;
NTC Metrotek;
OAO GosNIIkhimanalit;
OAO Svetlovskoye Predpriyatiye Era;
OJSC TSRY;
OOO Elkomtekh (Elkomtex);
OOO Planar;
OOO Sertal;
Photon Pro LLC;
PJSC Zvezda;
Production Association Strela;
Radioavtomatika;
Research Center Module;
Robin Trade Limited;
R.Ye. Alekseyev Central Design Bureau for Hydrofoil Ships;
Rubin Sever Design Bureau;
Russian Space Systems;
Rybinsk Shipyard Engineering;
Scientific Research Institute of Applied Chemistry;
Scientific-Research Institute of Electronics;
Scientific Research Institute of Hypersonic Systems;
Scientific Research Institute NII Submikron;
Sergey IONOV;
Serniya Engineering;
Severnaya Verf Shipbuilding Factory;
Ship Maintenance Center Zvezdochka;
State Governmental Scientific Testing Area of Aircraft Systems (GkNIPAS);
State Machine Building Design Bureau Raduga Bereznya;
State Scientific Center AO GNTs RF—FEI A.I. Leypunskiy Physico-Energy Institute;
State Scientific Research Institute of Machine Building Bakhirev (GosNIImash);
Tomsk Microwave and Photonic Integrated Circuits and Modules Collective Design Center;
UAB Pella-Fjord;
United Shipbuilding Corporation JSC “35th Shipyard”;
United Shipbuilding Corporation JSC “Astrakhan Shipyard”;
United Shipbuilding Corporation JSC “Aysberg Central Design Bureau”;
United Shipbuilding Corporation JSC “Baltic Shipbuilding Factory”;
United Shipbuilding Corporation JSC “Krasnoye Sormovo Plant OJSC”;
United Shipbuilding Corporation JSC “SC “Zvyozdochka”;
United Shipbuilding Corporation “Pribaltic Shipbuilding Factory Yantar”;
United Shipbuilding Corporation “Scientific Research Design Technological Bureau Onega”;
United Shipbuilding Corporation “Sredne-Nevsky Shipyard”;
Ural Scientific Research Institute for Composite Materials;
Urals Project Design Bureau Detal;
Vega Pilot Plant;
Vertikal LLC;
Vladislav Vladimirovich Fedorenko;
VTK Ltd;
Yaroslavl Shipbuilding Factory;
ZAO Elmiks-VS;
ZAO Sparta; and
ZAO Svyaz Inzhiniring.

Singapore

Alexsong PTE LTD.

Slovakia

Incoff Aerospace S.R.O.

Spain

Invention Bridge SL; and

Majory LLP.

United Kingdom

Djeco Group LP.

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Commerce modifies The Sanctions Against Russia and Belarus and Adds Countries Excluded From the FDP Rule

March 10, 2022: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) in response to the Russian Federation’s (Russia’s) further invasion of Ukraine, and to protect U.S. national security and foreign policy interests, the Department of Commerce has added new and highly restrictive license requirements and policies for certain transactions involving Russia and Belarus under the Export Administration Regulations (EAR). Refer to § 746.8. In order to recognize partner countries that have committed to implementing substantially similar new export controls on Russia and Belarus in their domestic laws, the Department of Commerce has published a list of countries (supplement No. 3 to §746) excluded from portions of these new U.S. export controls (§ 746.8(a)(5)).

file (doc.gov)

These exclusions apply specifically to certain requirements under the EAR related to foreign-produced items. In this rule, the Department of Commerce adds the Republic of Korea (South Korea) to the list of excluded countries. (See our February 2022 issue for details on the original actions taken against Russia and Belarus)

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Commerce Consolidates Russian Guidance On Its Webpage

The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has created a webpage related to all of the changes that have taken place due to Russia’s invasion of Ukraine. https://www.bis.doc.gov/index.php/policy-guidance/country-guidance/russia-belarus

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The U.S. Department of Commerce, National Institute of Standards and Technology

The U.S. Department of Commerce, National Institute of Standards and Technology issued guidance entitled, “Assessing Enhanced Security Requirements for Controlled Unclassified Information.” The purpose of this publication is to describe procedures for assessing the enhanced security requirements in [SP 800-172]. Compliance with the security requirements is addressed in CUI guidance and the CUI Federal Acquisition Regulation (FAR) or as supplemented by federal agencies (e.g., Department of Defense Federal Acquisition Regulation). Organizations can use the assessment procedures to generate evidence to support the assertion that the enhanced security requirements have been satisfied. The assessment procedures are typically used as part of an assessment process. An assessment process is an information-gathering and evidence producing activity to determine the effectiveness of the safeguards implemented to meet the set of security requirements specified in [SP 800-172]

https://nvlpubs.nist.gov/nistpubs/SpecialPublications/NIST.SP.800-172A.pdf

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U.S. Census Bureau

Census Updates HTS Codes Not Schedule B#S For 2022

March 1, 2022: Effective March 1, 2022, all recent updates and corrections to the Harmonized Tariff Schedule (HTS) are available for use in AES.

Note: There are no changes to Schedule B.

AES accepted shipments with outdated codes during a grace period of 30 days beyond the expiration date of February 28, 2022. Reporting an outdated code after the 30-day grace period will result in a fatal error.

The ACE AESDirect program is updated with the new HTS codes and accepted shipments with outdated codes during the grace period.

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

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

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

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

LATEST SANCTIONS FINES & PENALTIES

Sanctions

The President

March 3, 2022: 87 Fed. Reg. 12553: The President continued the National Emergency with respect to Zimbabwe. The actions and policies of certain members of the Government of Zimbabwe and other persons to undermine Zimbabwe's democratic processes or institutions continue to pose an unusual and extraordinary threat to the foreign policy of the United States. For this reason, the national emergency declared on March 6, 2003, and the measures adopted on that date, on November 22, 2005, and on July 25, 2008, to deal with that emergency, must continue in effect beyond March 6, 2022. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), I am continuing for 1 year the national emergency declared in Executive Order 13288.

https://www.federalregister.gov/documents/2022/03/04/2022-04879/continuation-of-the-national-emergency-with-respect-to-zimbabwe

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March 8, 2022: The President signed Executive Order 14066 banning the import of Russian oil, liquefied natural gas, and coal to the United States – a significant action with widespread bipartisan support that further deprives President Putin of the economic resources he uses to continue his needless war of choice -- the U.S. Treasury released one General License and several Frequently Asked Questions to aid in the wind-down of deliveries of existing purchases that have already been contracted for. The United States continues to take severe action to hold the Russian Federation accountable for its brutal, unprovoked invasion of Ukraine. Treasury has targeted the infrastructure supporting President Putin’s invasion of Ukraine, from his cronies to state-owned companies and even the Central Bank, restricting over 80% of the total banking assets in Russia. These actions, in coordination with partners and allies, have isolated Russia from the global financial system and degraded the Kremlin’s ability to project power. https://home.treasury.gov/system/files/126/eo_14066.pdf

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March 11, 2022: The President Signed Executive Order 14068 prohibiting the following:

The importation into the United States of the following products of Russian Federation origin: fish, seafood, and preparations thereof; alcoholic beverages; non-industrial diamonds; and any other products of Russian Federation origin as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State and the Secretary of Commerce;
The exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of luxury goods, and any other items as may be determined by the Secretary of Commerce, in consultation with the Secretary of State and the Secretary of the Treasury, to any person located in the Russian Federation;
New investment in any sector of the Russian Federation economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State, by a United States person, wherever located;
The exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of U.S. dollar-denominated banknotes to the Government of the Russian Federation or any person located in the Russian Federation; and
Any approval, financing, facilitation, or guarantee by a United States person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited by this section if performed by a United States person or within the United States.

https://home.treasury.gov/system/files/126/14068.pdf

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The U.S. Department of State:

March 15, 2022: the Department of State has imposed sanctions on the following Russian military leaders.

Specifically, the following 11 individuals are designated pursuant to E.O. 14024 Section 1(a)(i), as persons who operate or have operated in the defense and related materiel sector of the Russian Federation economy:

ALEKSEY KRIVORUCHKO is a Russian Ministry of Defense Deputy Minister of Defense;
TIMUR IVANOV is a Russian Ministry of Defense Deputy Minister of Defense;
YUNUS-BEK EVKUROV is a Russian Ministry of Defense Deputy Minister of Defense;
DMITRY BULGAKOV is a Russian Deputy Minister of Defense and a General of the Army; Bulgakov is the Russian Federation Ministry of Defense’s senior-most officer responsible for logistics matters;
YURIY SADOVENKO is a Russian Ministry of Defense Deputy Minister of Defense;
NIKOLAY PANKOV is a Russian Ministry of Defense Deputy Minister of Defense;
RUSLAN TSALIKOV is a Russian Ministry of Defense Deputy Minister of Defense;
GENNADY ZHIDKO is a Russian Ministry of Defense Deputy Minister of Defense;
VIKTOR ZOLOTOV is a Russian General of the Army and Commander-in-Chief of Russia’s National Guard Troops. He is a member of Russia’s Security Council;
DMITRY SHUGAEV is a senior leader of the Russian Ministry of Defense who is the Director of the Russian Ministry of Defense’s Federal Service for Military Technical Cooperation; and
ALEXANDER MIKHEEV is the Director-General of Rosoboronexport, which is Russia’s state-controlled intermediary that carries out foreign trade with respect to military goods. Mikheev has been involved in synchronizing the supplies of weapons and special equipment using the Russian Ministry of Defense’s capabilities; has served as a member of an organizing committee led by Russia’s Minister of Defense of a Russian Ministry of Defense-organized military-focused forum; and has served on a delegation led by Russia’s Minister of Defense.

https://www.state.gov/u-s-announces-sanctions-on-key-members-of-russias-defense-enterprise/

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March 24, 2022: 87 Fed. Reg. 16819: On March 14, 2022, the U.S. Department of State applied the measures authorized in Section 3 of the Iran, North Korea, and Syria Nonproliferation Act (Pub. L. 109-353) against the following foreign persons identified in the report submitted pursuant to Section 2(a) of the Act:

Zhengzhou Nanbei Instrument Equipment Co. Ltd (People's Republic of China) and any successor, sub-unit, or subsidiary thereof;
Second Academy of Natural Science Foreign Affairs Bureau (SANS FAB) (DPRK) and any successor, sub-unit, or subsidiary thereof;
Ri Sung Chol (aka Ri Su'ng-ch'o'l) (DPRK individual);
Ardis Group of Companies LLC (Russia) and any successor, sub-unit, or subsidiary thereof;
PFK Profpodshipnik, LLC (Russia) and any successor, sub-unit, or subsidiary thereof;
Igor Aleksandrovich Michurin (Russian individual).

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/2022/03/24/2022-06200/imposition-of-nonproliferation-measures-against-foreign-persons-including-a-ban-on-us-government

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

March 8, 2022: 87 Fed. Reg. 13048: The Department of Commerce, Bureau of Industry and Security (BIS) added new license requirements and review policies for Belarus to the Export Administration Regulations (EAR) to render Belarus subject to the same sanctions that were imposed on Russia under the EAR effective February 24, 2022. These new sanctions impose new Commerce Control List (CCL)-based license requirements for Belarus; revise the two foreign “direct product” rules (FDP rules) that are specific to Russia and Russian `military end users' to make them also applicable to Belarus and Belarusian `military end-users;' specify a license review policy of denial applicable to all of the license requirements on Belarus that are being added in this rule, with certain limited exceptions; significantly restrict the use of EAR license exceptions; expand the existing `military end use' and `military end user' control scope to include Belarus for all items “subject to the EAR” other than food and medicine designated EAR99, and add two new Belarusian entities to the Entity List as `military end-users.' This rule also imposes a license requirement for nuclear nonproliferation items for exports and reexports to Belarus and removes Belarus from Country Group A:4 under the EAR. In addition, for Belarus and Russia, this rule amends the availability of License Exceptions AVS and ENC and includes clarifying guidance on the availability of CCD. https://www.federalregister.gov/documents/2022/03/08/2022-04819/imposition-of-sanctions-against-belarus-under-the-export-administration-regulations-ear

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March 11, 2022: 87 Fed. Reg. 14785: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) imposed restrictions on the export, reexport, and transfer (in-country) of luxury goods to all end-users in the Russian Federation (Russia) and Belarus and to certain Russian and Belarusian oligarchs and malign actors located worldwide. For purposes of these new license requirements, a `luxury good' refers to any item that is identified in new supplement no. 5 to part 746 of the EAR. The license requirement specific to Russia and Belarus for `luxury goods' is added under new § 746.10(a)(1) of the EAR (`Luxury goods' license requirements for Russia and Belarus) (Embargoes and Other Special Controls). The license requirement specific to the designated Russian and Belarusian oligarchs and malign actors for `luxury goods' is added under new § 746.10(a)(2) of the EAR (Worldwide license requirement for `luxury goods' for designated Russian and Belarusian oligarch and malign actors). https://www.federalregister.gov/documents/2022/03/16/2022-05604/imposition-of-sanctions-on-luxury-goods-destined-for-russia-and-belarus-and-for-russian-and

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March 18, 2022: the U.S. Commerce Department, through its Bureau of Industry and Security (BIS), publicly identified commercial and private aircraft that have flown into Russia in apparent violation of the EAR. In so doing, BIS is notifying the public that providing any form of service to these aircraft requires authorization. Absent such authorization, any person anywhere—including within Russia—risks violating the EAR and would be subject to BIS enforcement actions which could include substantial jail time, fines, loss of export privileges, or other restrictions. By preventing these aircraft from receiving any service, for example from abroad, international flights from Russia on these aircraft are effectively grounded. https://www.commerce.gov/news/press-releases/2022/03/commerce-department-identifies-commercial-and-private-aircraft-exported

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

March 1, 2022: 87 Fed. Reg. 11297: On April 15, 2021, President Biden, 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, “Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation” (86 FR 20249, April 19, 2021).

In E.O. 14024, the President found that specified harmful foreign activities of the Government of the Russian Federation—in particular, efforts to undermine the conduct of free and fair democratic elections and democratic institutions in the United States and its allies and partners; to engage in and facilitate malicious cyber-enabled activities against the United States and its allies and partners; to foster and use transnational corruption to influence foreign governments; to pursue extraterritorial activities targeting dissidents or journalists; to undermine security in countries and regions important to United States national security; and to violate well-established principles of international law, including respect for the territorial integrity of states—constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States and declared a national emergency to deal with that threat.

OFAC is issuing the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (the “Regulations”), to implement E.O. 14024, pursuant to authorities delegated to the Secretary of the Treasury in E.O. 14024. A copy of E.O. 14024 appears in appendix A to this part.

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March 1, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated four Islamic State of Iraq and Syria (ISIS) and ISIS-Mozambique (ISIS-M) financial facilitators based in South Africa. ISIS members and associates in South Africa are playing an increasingly central role in facilitating the transfer of funds from the top of the ISIS hierarchy to branches across Africa. The South Africa-based ISIS members designated today pursuant to Executive Order (E.O.) 13224, as amended, have provided support for the aforementioned transfers or served as leaders of ISIS cells in South Africa. The following individuals have been added to OFAC’s SDN List:

ABADIGGA, Abdella Hussein of South Africa;
HOOMER, Farhad of South Africa;
MBAGA, Peter Charles of South Africa; and
MILLER, Siraaj of South Africa.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220301 and

https://home.treasury.gov/news/press-releases/jy0616

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March 2, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 9A, General License 10A, General License 13, and General License 14. In addition, OFAC has published new Frequently Asked Questions and updated several Frequently Asked Questions. OFAC issued this new public guidance to cut off avenues for potential sanctions evasion by the Central Bank of the Russian Federation. This guidance makes clear that there should be no loopholes for Russia to evade the unprecedented prohibitions by the United States to lock up Russia’s war chest – Central Bank of the Russian Federation, National Wealth Fund of the Russian Federation, and Ministry of Finance of the Russian Federation – that were imposed the week of March 2, 2022.

Russia has taken steps to use exporters to act as their agents and help them raise resources to prop up their currency and fund their priorities. OFAC’s guidance makes clear that such actions on behalf of Russia’s Central Bank are prohibited, closing off attempts to access the U.S. financial system. OFAC issued frequently asked questions (FAQs) for enhanced compliance with U.S. sanctions and further explains recent sanctions actions, including the prohibitions imposed pursuant 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” (Russia-related Sovereign Transactions Directive). https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220302 and https://home.treasury.gov/news/press-releases/jy0624

General License 9A: All transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587, that are ordinarily incident and necessary to dealings in debt or equity of one or more of the following entities issued prior to February 24, 2022 (“covered debt or equity”) are authorized through 12:01 a.m. eastern daylight time, May 25, 2022, provided that any divestment or transfer of, or facilitation of divestment or transfer of, covered debt or equity must be to a non-U.S. person: (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; or (6) Any entity in which one or more of the above entities own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest. https://home.treasury.gov/system/files/126/russia_gl9a.pdf

General License 10A: All transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587, that are ordinarily incident and necessary to the wind down of derivative contracts entered into prior to 4:00 p.m. eastern standard time, February 24, 2022, that (i) include one of the following entities (together, the “Covered Entities”) as a counterparty or (ii) are linked to debt or equity of a Covered Entity are authorized through 12:01 a.m. eastern daylight time, May 25, 2022, provided that any payments to a blocked person are made into a blocked account: (i) State Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank; (ii) Public Joint Stock Company Bank Financial Corporation Otkritie; (iii) Sovcombank Open Joint Stock Company; (iv) Public Joint Stock Company Sberbank of Russia; (v) VTB Bank Public Joint Stock Company; or (vi) Any entity in which one or more of the above entities own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest. https://home.treasury.gov/system/files/126/russia_gl10a.pdf

General License 13: U.S. persons 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 such persons’ day-to-day operations in the Russian Federation, through 12:01 a.m. eastern daylight time, June 24, 2022. https://home.treasury.gov/system/files/126/russia_gl13.pdf

General License 14: All transactions prohibited by Directive 4 under Executive Order (E.O). 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation, 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”), where the Directive 4 entity’s sole function in the transaction is to act as an operator of a clearing and settlement system, are authorized, provided that: (i) there is no transfer of assets to or from any Directive 4 entity, unless separately authorized; and (ii) no Directive 4 entity is either a counterparty or a beneficiary to the transaction unless separately authorized. https://home.treasury.gov/system/files/126/russia_gl14.pdf

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March 3, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 15 which, authorizes all transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), involving any entity owned 50 percent or more, directly or indirectly, by Alisher Burhanovich Usmanov that is not listed on OFAC’s Specially Designated Nationals and Blocked Persons List (“blocked Usmanov entity”). All property and interests in property of the blocked Usmanov entities are unblocked, and debits to accounts on the books of a U.S. financial institution of the blocked Usmanov entities are authorized. This general license does not authorize any transactions otherwise prohibited by the RuHSR or involving any person blocked or otherwise sanctioned pursuant to the RuHSR, including Alisher Burhanovich Usmanov, or his property or interests in property, other than the blocked Usmanov entities unless separately authorized. https://home.treasury.gov/system/files/126/russia_gl15.pdf

In addition, the following names have been added to OFAC's Specially Designated Nationals List (SDN List):

ARESHEV, Andrey Grigoryevich of Russia;
BESPALOV, Anton Sergeyevich of Russia;
BUBNOVA, Irina Sergeyevna of Russia;
CHEMEZOV, Alexander Sergeevich of Russia;
CHEMEZOV, Stanislav Sergeyevich of Russia;
CHUGULEVA, Aleyona Anatolyevna of Russia;
DOROKHOVA, Nina Viktorovna of Russia;
DUGINA, Darya Aleksandrovna of Russia;
FEDIN, Yuriy Sergeyevich of the Ukraine and Russia;
GAFNER, Denis Yakovlevich of Russia;
GLOTOV, Yevgeniy Eduardovich of the Ukraine;
IGNATOVA, Anastasia of Russia;
IGNATOVA, Yekaterina Sergeyevna of Russia;
ILYASHENKO, Andrey Vitalyevich of Russia;
KALABAYEVA, Valeriya of Russia;
KAMYSHANOVA, Aleksandra Aleksandrovna of Russia;
KIRILLOVA, Anastasiya Sergeyevna of Russia;
KNYRIK, Konstantin Sergeyevich of Crimea, Ukraine and Russia;
KRANS, Maksim Iosifovich of Russia;
KRASOVSKIY, Maksim Borisovich of Russia;
MAKSIMENKO, Vladimir Ilich of Russia;
MAMAKOVA, Aelita Leonidovna of Russia;
NEZHDANOVA, Yevgeniya Vitalyevna of Russia;
PESKOV, Dmitriy Sergeevich of Russia;
POGREBENKOV, Valeriy Ivanovich of Russia;
PRIGOZHIN, Pavel Evgenyevich of Russia;
PRIGOZHINA, Lyubov Valentinovna of Russia;
PRIGOZHINA, Polina Evgenyevna of Russia;
PROKOFYEV, Yuriy Anatolyevich of Russia;
ROTENBERG, Boris Borisovich of Russia and Finland;
ROTENBERG, Karina Yurevna of Russia and France;
ROTENBERG, Liliya Arkadievna of Russia;
ROTENBERG, Pavel Arkadyevich of Russia;
SAENKO, Sergei Ivanovich of Russia;
SHUVALOV, Evgeny Igorevich of Russia;
SHUVALOV, Igor Ivanovich of Russia;
SHUVALOVA, Maria Igorevna of Russia;
SHUVALOVA, Olga Viktorovna of Russia;
SINELIN, Mikhail Anatolyevich of Russia;
SKOROKHODOVA, Natalya Petrovna of Russia;
TATARCHENKO, Denis Sergeyevich of Russia;
TOKAREV, Nikolay Petrovich of Russia and Kazakhstan;
TOKAREVA, Galina Alekseyevna of Russia;
TOKAREVA, Maiya Nikolaevna of Russia and Kazakhstan;
USMANOV, Alisher Burhanovich of Russia, Monaco and Uzbekistan; and
ZAMLELOVA, Svetlana Georgiyevna of Russia.

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

ALTITUDE X3 LTD of Bermuda;
AVANFORT OOO of Russia;
AVIASTAR-SP AIRCRAFT MANUFACTURING ENTERPRISE of Russia;
DESIGN BUREAU OF SPECIAL MACHINE-BUILDING of Russia;
FIRMA VEARDON OOO of Russia;
GEOPOLITICA of Russia;
IRKUTSK AVIATION PLANT of Russia;
IZHEVSK UNMANNED SYSTEMS RESEARCH AND PRODUCTION ASSOCIATED LIMITED LIABILITY COMPANY of Russia;
JOINT STOCK COMPANY AVANGARD of Russia;
JOINT STOCK COMPANY FEDERAL SCIENTIFIC AND PRODUCTION CENTER TITAN BARRIKADY of Russia;
JOINT STOCK COMPANY ODK-KLIMOV of Russia;
JOINT STOCK COMPANY RESEARCH AND PRODUCTION CORPORATION of Russia;
JOINT STOCK COMPANY SALAVAT CHEMICAL PLANT of Russia;
JOURNAL KAMERTON of Russia;
JSC CENTRAL RESEARCH INSTITUTE OF AUTOMATION AND HYDRAULICS of Russia;
JSC NOVOSIBIRSK AIRCRAFT PRODUCTION ASSOCIATION PLANT NAMED AFTER V.P. CHKALOV of Russia;
JSC RESEARCH AND PRODUCTION ASSOCIATION KVANT of Russia;
KATINA DRUSTVO S OGRANICENOM ODGOVORNOSCU ZA NEKRETNINE I UGOSTITELJSTVO of Croatia;
KOMSOMOLSK-ON-AMUR AVIATION PLANT of Russia;
KURGANMASHZAVOD of Russia;
LAKHTA PARK PREMIUM, OOO of Russia;
LAKHTA PARK, OOO of Russia;
LAKHTA PLAZA, OOO of Russia;
LIMITED LIABILITY COMPANY NEMCHINOVO INVESTMENTS of Russia;
LIMITED LIABILITY COMPANY OSTOZHENKA 19 of Russia;
MAKEYEV STATE MISSILE CENTER of Russia;
NEW EASTERN OUTLOOK of Russia;
NIZHNIY NOVGOROD SOKOL AIRCRAFT MANUFACTURING PLANT of Russia;
ODK-SATURN PUBLIC JOINT-STOCK COMPANY of Russia;
ODNA RODYNA of Russia;
ORIENTAL REVIEW of Russia;
OTKRYTYE AKTIVY OOO of Russia;
PUBLIC JOINT-STOCK COMPANY ODK-KUZNETSOV of Russia;
PUBLIC JOINT-STOCK COMPANY ODK-UFIMSKOYE MOTOROSTROITELNOYE PRODUCTION ASSOCIATION of Russia;
RADIOAVTOMATIKA LLC of Russia;
RHYTHM OF EURASIA of Russia;
SOVA NEDVIZHIMOST OOO of Russia;
G.A. D.O.O. ZA TRGOVINU I USLUGE of Russia;
THE PLANAR COMPANY of Russia;
UNITED WORLD INTERNATIONAL of Russia;
VSEROSSISKIY INSTITUT AVIATSIONNYKH MATERIALOV of Russia; and
ZARECHE-4 OOO of Russia.

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

DILBAR (ZGFO) Yacht 15,917GRT Cayman Islands flag.

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

LX-MOW; Aircraft Model GVI G650; and
M-IABU Aircraft Model Airbus A340-300; Aircraft Manufacturer's Serial Number (MSN) 955; Aircraft Tail Number M-IABU.

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March 4, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued the following three new Frequently Asked Questions regarding Russian sanctions:

Do I have to wind down energy-related transactions by the expiration date of the Russia-related General License (GL) 8A?
My U.S. bank refused to process a requested payment related to energy despite the authorization in Russia-related General License (GL) 8A under Executive Order (E.O.) 14024. What can I do?
My company transports Russian oil for sale to the United States and third countries. Can I continue to transport or sell Russian-origin oil without violating sanctions pursuant to Executive Order (E.O.) 14024?

For answers to these FAQs see the following link: https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-03-04

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March 4, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) designated two key Hizballah financiers operating in Guinea pursuant to Executive Order (E.O.) 13224, as amended. This action is aimed at disrupting Hizballah’s business network in West Africa, which relies on bribery and influence to circumvent the rule of law. In addition to other sources of funding, Hizballah generates revenue from commercial activities across the world to sponsor acts of terrorism. The designation of these financiers demonstrates the Treasury’s ongoing efforts to target the terrorist group’s international commercial activities and its global network of financiers, supporters, donors, and facilitators, which enable Hizballah to persistently threaten the security, stability, and prosperity of Lebanon and other jurisdictions. The Hizballah financiers added to the SDN list are:

SAADE, Ali of Guinea, Lebanon, and France;
TAHER, Ibrahim of Guinea, Lebanon, and the United Kingdom.

https://home.treasury.gov/news/press-releases/jy0631 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220304

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March 7, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) added the following entity to the SDN list:

KATIBAT AL TAWHID WAL JIHAD (a.k.a. JANNAT OSHIKLARI; a.k.a. KHATIBA AL-TAWHID WAL-JIHAD; a.k.a. TAWHID AND JIHAD BRIGADE; a.k.a. "KTJ") of Syria; Kyrgyzstan; Russia.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220307

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March 8, 2022: As a result of Executive Order 14066, the Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 16. In addition, OFAC has published new Frequently Asked Questions and updated several Frequently Asked Questions.

Russia-related General License 16: Except as provided in paragraph (b) of this general license, all transactions prohibited by Executive Order (E.O.) of March 8, 2022, Prohibiting Certain Imports and New Investments With Respect to Continued Russian Federation Efforts to Undermine the Sovereignty and Territorial Integrity of Ukraine, that are ordinarily incident and necessary to the importation into the United States of crude oil; petroleum; petroleum fuels, oils, and products of their distillation; liquefied natural gas; coal; and coal products of Russian Federation origin pursuant to written contracts or written agreements entered prior to March 8, 2022 are authorized through 12:01 a.m. eastern daylight time, April 22, 2022. (b) This general license does not authorize 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, unless separately authorized.

OFAC added the following Frequently Asked Questions:

· Does Executive Order (E.O.) 14066 prohibit dealing in Kazakh-origin crude oil of the Caspian Pipeline Consortium (“CPC”)?

· For the purposes of Executive Order (E.O.) of March 8, 2022, “Prohibiting Certain Imports and New Investments With Respect to Continued Russian Federation Efforts to Undermine the Sovereignty and Territorial Integrity of Ukraine,” what is meant by the terms “Russian Federation origin” and “new investment in the energy sector in the Russian Federation”?

· Are non-U.S. persons exposed to sanctions if they continue to import to non-U.S. jurisdictions certain products of Russian Federation origin that are banned from the United States pursuant to Executive Order (E.O.) of March 8, 2022, “Prohibiting Certain Imports and New Investments With Respect to Continued Russian Federation Efforts to Undermine the Sovereignty and Territorial Integrity of Ukraine”?

· Does Russia-related General License (GL) 8A remain valid following the issuance of Executive Order (E.O.) of March 8, 2022, “Prohibiting Certain Imports and New Investments With Respect to Continued Russian Federation Efforts to Undermine the Sovereignty and Territorial Integrity of Ukraine”?

· I have a shipment of a product or products listed in Executive Order (E.O.) of March 8, 2022, “Prohibiting Certain Imports and New Investments With Respect to Continued Russian Federation Efforts to Undermine the Sovereignty and Territorial Integrity of Ukraine,” en route to the United States that was contracted prior to March 8, 2022. Can I find a new buyer for this shipment, re-direct the shipment to a country other than the United States, or import the product and comply with the import ban?

· Is there a period for U.S. persons to continue imports prohibited by Executive Order (E.O.) of March 8, 2022, “Prohibiting Certain Imports and New Investments With Respect to Continued Russian Federation Efforts to Undermine the Sovereignty and Territorial Integrity of Ukraine”?

· What does Executive Order (E.O.) of March 8, 2022, “Prohibiting Certain Imports and New Investments With Respect to Continued Russian Federation Efforts to Undermine the Sovereignty and Territorial Integrity of Ukraine,” do?

OFAC also updated the following two Frequently Asked Questions:

· My company transports Russian oil for sale to the United States and third countries. Can I continue to transport or sell Russian-origin oil without violating sanctions pursuant to Executive Order (E.O.) 14024?

· Can a U.S. financial institution process transactions related to energy where a Russian financial institution sanctioned pursuant to Executive Order (E.O.) 14024 is involved?

Answers to the FAQs can be found at the links below.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220308 and https://home.treasury.gov/system/files/126/russia_gl16.pdf and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-03-08 and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/976

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March 11, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two individuals and three entities for supporting North Korea’s defense industry ongoing development of its weapons of mass destruction (WMD) and ballistic missile programs in violation of multiple United Nations Security Council resolutions (UNSCRs). North Korea’s defense industry has conducted 11 ballistic missile launches since the beginning of the year, most recently on March 4, 2022 (EST). This action targets a group of foreign individuals and companies that aid a North Korean defense industry-related procurement agent in Russia; much of this activity also violates UN prohibitions with respect to North Korea. The two individuals are:

Andreyevich Gayevoy (Gayevoy) of Russia; and
Pak Kwang Hun of North Korea.

The three entities are:

Apollon OOO of Russia;
Zeel – M Co., Ltd of Russia; and
RK Briz, OOO of Russia.

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

AFONIN, Yuriy Vyacheslavovich of Russia;
ANDRESOV, Yuriy Nikolaevich of Russia;
BELOUS, German Valentinovich of Russia;
BESSONOV, Yevgeniy Ivanovich of Russia;
CHASOVNIKOV, Aleksandr Aleksandrovich, of Russia;
DERGUNOVA, Olga Konstantinovna of Russia;
DIRKS, Natalia Germanova of Russia;
GAYEVOY, Aleksandr Andreyevich of Russia;
GEORGIEVA, Elena Aleksandrovna of Russia;
KALASHNIKOV, Leonid Ivanovich of Russia;
KASHIN, Vladimir Ivanovich of Russia;
KNYAGININ, Vladimir Nikolaevich of Russia;
KOLOMEITSEV, Nikolay Vasilievich of Russia;
KONDRATENKO, Maxim Dmitrievich, of Russia;
KOVALCHUK, Boris Yurievich of Russia;
KOVALCHUK, Kira Valentinovna of Russia;
KOVALCHUK, Stepan Kirillovich of Russia;
KOVALCHUK, Tatyana Aleksandrovna of Russia;
KULIK, Vadim Valerievich of Russia;
KURINNIY, Aleksey Vladimirovich of Russia;
LUKYANENKO, Valerii Vasilyevich of Russia;
MELNIKOV, Ivan Ivanovich of Russia;
NAVKA, Tatiana Aleksandrovna of Russia;
NOROV, Erkin Rakhmatovich of Russia;
NOVIKOV, Dmitriy Georgievich of Russia;
OSADCHIY, Nikolay Ivanovich of Russia;
OSTROVSKY, Svyatoslav Evgenievich of Russia;
PECHATNIKOV, Anatolii Yuryevich of Russia;
PESKOV, Nikolay of Russia;
PESKOVA, Elizaveta Dmitriyevna of Russia;
PYANOV, Dmitrii Vasilyevich of Russia;
SAPELIN, Andrey Yurievich of Russia;
TAYSAEV, Kazbek Kutsukovich of Russia;
VAVULIN, Dmitri Nikolaevich of Russia; and
ZYUGANOV, Gennady Andreyevich of Russia.

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

APOLLON OOO of Russia;
RK BRIZ, OOO of Russia; and
ZEEL - M CO., LTD. of Russia.

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

TANGO (E5U3540) Yacht 2,083GRT Cook Islands flag; Vessel Registration Identification IMO 1010703; MMSI 518100626 (vessel).

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

P4-MIS; Aircraft Manufacture Date 31 May 2007; Aircraft Model Airbus A319-115.

https://home.treasury.gov/news/press-releases/jy0651 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220311

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March 11, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 17, General License 18, and General License 19 and Ukraine-related General License 23. OFAC has also published new Frequently Asked Questions and amended one Frequently Asked Question.

General License 17: All transactions prohibited by section 1(a)(i) of Executive Order of March 11, 2022, Prohibiting Certain Imports, Exports, and New Investment With Respect to Continued Russian Federation Aggression, that are ordinarily incident and necessary to the importation into the United States of fish, seafood, and preparations thereof; alcoholic beverages; or non-industrial diamonds of Russian Federation origin pursuant to written contracts or written agreements entered into prior to March 11, 2022, were authorized through 12:01 a.m. eastern daylight time, March 25, 2022. The general license does not authorize 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, unless separately authorized. https://home.treasury.gov/system/files/126/russia_gl17.pdf

General License 18: All transactions prohibited by section (1)(a)(iv) of Executive Order of March 11, 2022, Prohibiting Certain Imports, Exports, and New Investment With Respect to Continued Russian Federation Aggression, that are ordinarily incident and necessary to the transfer of U.S. dollar-denominated banknote noncommercial, personal remittances from: (i) the United States or a U.S. person, wherever located, to an individual located in the Russian Federation; or (ii) a U.S. person who is an individual located in the Russian Federation, are authorized.

Note to paragraph (a)(1). Noncommercial, personal remittances do not include charitable donations to or for the benefit of an entity or funds transfers for use in supporting or operating a business, including a family-owned business. (2) Transferring institutions may rely on the originator of a funds transfer with regard to compliance with paragraph (a)(1) of this general license, provided that the transferring institution does not know or have reason to know that the funds transfer is not in compliance with paragraph (a)(1). (b) This general license does not authorize any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), or involving any person blocked pursuant to RuHSR, unless separately authorized. https://home.treasury.gov/system/files/126/russia_gl18.pdf

General License 19: Individuals who are U.S. persons located in the Russian Federation are authorized to engage in all transactions prohibited by section 1(a)(iv) of Executive Order of March 11, 2022, Prohibiting Certain Imports, Exports, and New Investment With Respect to Continued Russian Federation Aggression, that are ordinarily incident and necessary to their personal maintenance within the Russian Federation, including payment of housing expenses, acquisition of goods or services for personal use, payment of taxes or fees, and purchase or receipt of permits, licenses, or public utility services. This general license does not authorize 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, unless separately authorized. https://home.treasury.gov/system/files/126/russia_gl19.pdf

Ukraine-related General License 23: All transactions prohibited by Executive Order (E.O.) 14065 that are ordinarily incident and necessary to the activities described in paragraph (b) by nongovernmental organizations are authorized, including the processing and transfer of funds, payment of taxes, fees, and import duties, and purchase or receipt of permits, licenses, or public utility services. This general license does not authorize any transactions involving any person blocked pursuant to E.O. 14065, unless otherwise authorized. https://home.treasury.gov/system/files/126/ukraine_gl23.pdf

New Frequently Asked Questions:

· Does the U.S. dollar-denominated banknote export ban imposed by Executive Order (E.O.) of March 11, 2022, “Prohibiting Certain Imports, Exports, and New Investment With Respect to Continued Russian Federation Aggression,” prohibit sending noncommercial, personal remittances denominated in U.S. dollars to the Russia Federation (or to individuals ordinarily resident in the Russia Federation)?

· For the purposes of Executive Order (E.O.) of March 11, 2022, “Prohibiting Certain Imports, Exports, and New Investment With Respect to Continued Russian Federation Aggression,” what is meant by the terms “Russian Federation origin,” “fish, seafood, and preparations thereof,” “alcoholic beverages,” and “non-industrial diamonds”?

· Are non-U.S. persons exposed to sanctions if they continue to import to non-U.S. jurisdictions certain products of Russian Federation origin that are banned from the United States pursuant to Executive Order (E.O.) of March 11, 2022, “Prohibiting Certain Imports, Exports, and New Investment With Respect to Continued Russian Federation Aggression”?

· Executive Order (E.O.) of March 11, 2022, “Prohibiting Certain Imports, Exports, and New Investment With Respect to Continued Russian Federation Aggression” prohibits the importation into the United States of fish, seafood, and preparations thereof of Russian Federation origin. How does this affect Russia-related General License (GL) 6?

· I have a shipment of a certain product(s) listed in Executive Order (E.O.) 14068 en route to the United States that were contracted prior to March 11, 2022. Can I find a new buyer for this shipment, re-direct the shipment to a country other than the United States, or import the product(s) and comply with the import ban?

· Is there a period of time for U.S. persons to continue importing products prohibited by Executive Order (E.O.) 14068?

· What does Executive Order (E.O.) of March 11, 2022, “Prohibiting Certain Imports, Exports, and New Investment With Respect to Continued Russian Federation Aggression,” do?

· Do the prohibitions of Executive Order (E.O.) 14024 and other Russia-related sanctions extend to virtual currency?

For answers to these Frequently Asked Questions, see the following link: https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-03-11

The following Frequently Asked Question was amended:

Are U.S. persons authorized to engage in certain activity with the so-called Donetsk People’s Republic and Luhansk People’s Republic regions of Ukraine or such other regions of Ukraine as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State (collectively, the “Covered Regions")?

For the answer to this Frequently Asked Questions, see the following link: https://home.treasury.gov/policy-issues/financial-sanctions/faqs/updated/2022-03-11

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March 15, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) added the following individuals to the OFAC SDN List:

AKHMATOV, Dzhabrail Alkhazurovich of Russia;
BULGAKOV, Dmitry of Russia;
EVKUROV, Yunus-Bek of Russia;
IVANOV, Timur of Russia;
KHUTAEV, Khusein Merlovich of Russia;
KRIVORUCHKO, Aleksey of Russia;
LUKASHENKA, Halina Radzivonawna of Belarus;
MIKHEEV, Aleksander Aleksandrovich of Russia;
MUSHNIKOVA, Natalia Evgenievna of Russia;
PANKOV, Nikolay of Russia;
SADOVENKO, Yuriy of Russia;
SALAMOV, Nurid Denilbekovich of Russia;
SHUGAYEV, Dmitry of Russia;
TSALIKOV, Ruslan, of Russia; and
ZHIDKO, Gennady of Russia and Uzbekistan.

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

Kurchaloi District Of The Chechen Republic Branch Of The Ministry Of Internal Affairs Of The Russian Federation.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220315

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March 15, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated four individuals and one entity pursuant to the Sergei Magnitsky Rule of Law Accountability Act of 2012 (the Russia Magnitsky Act). These Russia Magnitsky Act targets were involved in concealing events surrounding the death of renowned Russian whistleblower Sergei Magnitsky, or were connected to gross violations of human rights against Russian human rights defender Oyub Titiev. Treasury is also re-designating Alyaksandr Lukashenka of Belarus, the head of a corrupt government in Belarus whose patronage network benefits his inner circle and regime, and newly designating his wife pursuant to Executive Order (E.O.) 13405.

The four individuals that were sanctioned on March 15th are:
Alyaksandr Lukashenka of Belarus;
Halina Radzivonawna Lukashenka of Belarus;
Natalia Mushnikova or Russia;
Dzhabrail Alkhazurovich Akhmatov of Chechnya.

The entity sanctioned on March 15th is:

Kurchaloi District of the Chechen Republic Branch of the Ministry of Internal Affairs of the Russian Federation of Chechnya.

https://home.treasury.gov/news/press-releases/jy0654 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220315

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March 17, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), sanctioned Alain Goetz, the African Gold Refinery in Uganda, and a network of companies involved in the illicit movement of gold valued at hundreds of millions of dollars per year from the Democratic Republic of the Congo.

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

GOETZ, Alain Francois Viviane of the United Arab Emirates, Belgium and Turkey

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

AFRICAN GOLD REFINERY LIMITED of Uganda;
AGOR DMCC of the United Arab Emirates;
AGR INTERNATIONAL LIMITED of the Seychelles;
ALAXY of Belgium;
CG - VASTGOED INVEST of Belgium;
GOETZ GOLD LLC of the United Arab Emirates;
OROFINO NV of Belgium;
PREMIER GOLD REFINERY LLC of the United Arab Emirates; and
WWG DIAMONDS of Belgium.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220317 and https://home.treasury.gov/news/press-releases/jy0664

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March 18, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Ukraine-/Russia-related General License 24. Under the General License all transactions prohibited by Executive Order (E.O.) 14065 related to the provision or receipt of civil maritime services performed by individuals who are ordinarily resident in the so-called Donetsk People’s Republic (DNR) or Luhansk People’s Republic (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 (collectively, the “Covered Regions”), are authorized, provided that:

(1) Such services are performed outside the Covered Regions; and

(2) Such services are not performed on behalf of any entity located in, or organized under the laws of, the Covered Regions.

This general license does not authorize:

(1) Any new investment in the Covered Regions prohibited by E.O. 14065 unless separately authorized; or

(2) Any transactions involving any person blocked pursuant to E.O. 14065 unless separately authorized.

https://home.treasury.gov/system/files/126/ukraine_gl24.pdf

OFAC also issued the following additional Frequently Asked Question:

Does Executive Order (E.O.) 14066 prohibit dealing in Kazakh-origin crude oil of the Caspian Pipeline Consortium (“CPC”)?

The answer to this Frequently Asked Question can be found at: https://home.treasury.gov/policy-issues/financial-sanctions/faqs/updated/2022-03-18

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March 18, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated the Los Huistas Drug Trafficking Organization (DTO) and its leaders pursuant to Executive Order (E.O.) 14059 for drug trafficking that threatens the people and security of the United States and Guatemala. The Los Huistas DTO is the dominant criminal structure in the Guatemalan department of Huehuetenango (along the border of Guatemala and Mexico).

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

MOLINA LOPEZ of Guatemala;
MOLINA MONTEJO of Guatemala;
MONTEJO SAENZ of Guatemala;
MORENO LOPEZ of Guatemala;
SALAZAR FLORES of Guatemala;
SAMAYOA MONTEJO of Guatemala; and
SAMAYOA RECINOS of Guatemala.

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

COMPRADORES Y EXPORTADORES DE CAFE CAPTZIN, SOCIEDAD ANONIMA of Guatemala; LOS HUISTAS DRUG TRAFFICKING ORGANIZATION of Guatemala.

The following deletion has been made to OFAC's SDN List:

ROSENTHAL HIDALGO, of Honduras.

March 21, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) added the following entity to OFAC’s SDN List:

CENTRAL RESERVE POLICE of Sudan.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220321 and

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March 24, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 6A, General License 17A, General License 20, and Ukraine-/Russia-related General License 25. In addition, OFAC has updated two Frequently Asked Questions.

General License 6A: All transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), that are ordinarily incident and necessary to: (1) the exportation or reexportation of agricultural commodities, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices to, from, or transiting the Russian Federation; (2) the prevention, diagnosis, or treatment of COVID-19 (including research or clinical studies relating to COVID-19); or (3) ongoing clinical trials and other medical research activities that were in effect prior to March 24, 2022, are authorized. https://home.treasury.gov/system/files/126/russia_gl6a.pdf

General License 17A: All transactions prohibited by section 1(a)(i) of Executive Order (E.O.) 14068 that are ordinarily incident and necessary to the importation into the United States of alcoholic beverages or non-industrial diamonds of Russian Federation origin pursuant to written contracts or written agreements entered into prior to March 11, 2022, are authorized through 12:01 a.m. eastern daylight time, March 25, 2022. All transactions prohibited by section 1(a)(i) of E.O. 14068 that are ordinarily incident and necessary to the importation into the United States of fish, seafood, and preparations thereof of Russian Federation origin pursuant to written contracts or written agreements entered into prior to March 11, 2022 are authorized through 12:01 a.m. eastern daylight time, June 23, 2022. This general license does not authorize any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including involving any person blocked pursuant to the RuHSR, unless separately authorized. Effective March 24, 2022, General License No. 17, dated March 11, 2022, is replaced and superseded in its entirety by this General License No. 17A. https://home.treasury.gov/system/files/126/russia_gl17a.pdf

General License 20: U.S. persons are authorized to engage in all transactions ordinarily incident and necessary to the official business of third-country diplomatic or consular missions located in the Russian Federation that are prohibited by Executive Order (E.O.) 14024 or section 1(a)(iv) of E.O. 14068. https://home.treasury.gov/system/files/126/russia_gl20.pdf

Ukraine Russia Related General License 25: News reporting organizations that are United States persons, and individuals who are United States persons regularly employed by a news reporting organization, either as journalists (including photojournalists) or as supporting broadcast or technical personnel, are authorized to engage in the following transactions in the Crimea region of Ukraine, the so-called Donetsk People’s Republic (DNR) or Luhansk People’s Republic (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 (collectively, the “Covered Regions”), to the extent such transactions are ordinarily incident and necessary to their journalistic activities in the Covered Regions. https://home.treasury.gov/system/files/126/ukraine_gl25.pdf

Updated Frequently Asked Questions:

I have a shipment of a certain product(s) listed in Executive Order (E.O.) 14068 en route to the United States that was contracted prior to March 11, 2022. Can I find a new buyer for this shipment, re-direct the shipment to a country other than the United States, or import the product(s) and comply with the import ban?

Is there a period of time for U.S. persons to continue importing products prohibited by Executive Order (E.O.) 14068?

Answers to these updated Frequently Asked Questions can be found at: https://home.treasury.gov/policy-issues/financial-sanctions/faqs/updated/2022-03-24

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March 24, 2022: In its latest action to impose severe costs on the Russian Federation for its illegal, unwarranted, and baseless war against Ukraine, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated key enablers of the invasion. This includes dozens of Russian defense companies, 328 members of the Russian State Duma, and the head of Russia’s largest financial institution. See the following link for the extensive list of individuals added to OFAC’s SDN List: https://home.treasury.gov/news/press-releases/jy0677

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

AKTSIONERNOE OBSHCHESTVO ELEKTROTYAGA of Russia;
AKTSIONERNOE OBSHCHESTVO GOSUDARSTVENNOE NAUCHNO PROIZVODSTVENNOE PREDPRIYATIE REGION of Russia;
AKTSIONERNOE OBSHCHESTVO PETROVSKII ELEKTROMEKHANICHESKII ZAVOD MOLOT of Russia;
AKTSIONERNOE OBSHCHESTVO RAVENSTVO-SERVICE of Russia;
AKTSIONERNOE OBSHCHESTVO SARATOVSKI RADIOPRIBORNYI ZAVOD of Russia;
AKTSIONERNOE OBSHCHESTVO TURAEVSKOE MASHINOSTROITELNOE KONSTRUKTORSKOE BYURO SOYUZ of Russia;
AKTSIONERNOE OBSHCHESTVO VERKHNEUFALEISKII ZAVOD URALELEMENT of Russia;
INTERNATIONAL HELICOPTERS PROGRAMS LIMITED LIABILITY COMPANY of Russia;
JOINT STOCK COMPANY 150 AIRCRAFT REPAIR PLANT of Russia;
JOINT STOCK COMPANY 356 AIRCRAFT REPAIR PLANT of Russia;
JOINT STOCK COMPANY 711 AIRCRAFT REPAIR PLANT of Russia;
JOINT STOCK COMPANY 810 AIRCRAFT REPAIR PLANT of Russia;
JOINT STOCK COMPANY AZOVSKI OPTIKO MECHANICHESKY ZAVOD of Russia;
JOINT STOCK COMPANY CENTRAL DESIGN BUREAU OF AUTOMATICS of Russia;
JOINT STOCK COMPANY CONCERN GRANIT-ELECTRON of Russia;
JOINT STOCK COMPANY CONCERN SEA UNDERWATER WEAPON GIDROPRIBOR of Russia;
JOINT STOCK COMPANY DAGDIZEL PLANT of Russia;
JOINT STOCK COMPANY HELICOPTER SERVICE COMPANY of Russia;
JOINT STOCK COMPANY KAZAN HELICOPTERS of Russia;
JOINT STOCK COMPANY KRONSHTADT of Russia;
JOINT STOCK COMPANY KUMERTAU AVIATION PRODUCTION ENTERPRISE of Russia;
JOINT STOCK COMPANY MACHINE BUILDING DESIGN BUREAU of Russia;
JOINT STOCK COMPANY NATIONAL HELICOPTER CENTER MIL AND KAMOV of Russia;
JOINT STOCK COMPANY PROGRESS ARSENYEV AVIATION COMPANY of Russia;
JOINT STOCK COMPANY REDUCTOR of Russia;
JOINT STOCK COMPANY RESEARCH AND DESIGN INSTITUTE SEA THERMAL ENGINEERING of Russia;
JOINT STOCK COMPANY RYAZANSKOE KONSTRUKTORSKOE BJURO GLOBUS of Russia;
JOINT STOCK COMPANY SALUTE of Russia;
JOINT STOCK COMPANY SEVERNIY PRESS of Russia;
JOINT STOCK COMPANY SMOLENSK AIRCRAFT PLANT of Russia;
JOINT STOCK COMPANY STATE MACHINE BUILDING DESIGN BUREAU VYMPEL BY NAME I.I. TOROPOV of Russia;
JOINT STOCK COMPANY STUPINO ENGINEERING PRODUCTIVE ENTERPRISE of Russia;
JOINT STOCK COMPANY ULAN-UDE AVIATION PLANT of Russia;
JOINT STOCK COMPANY URAL DESIGN BUREAU DETAL of Russia;
JOINT STOCK COMPANY ZAVOD KULAKOVA of Russia;
JSC MBDB ISKRA of Russia;
JSC NPO HIGH PRECISION SYSTEMS of Russia;
JSC RAWENSTVO of Russia;
LIMITED LIABILITY COMPANY CENTER OF PURCHASES AND LOGISTICS OF THE HELICOPTER INDUSTRY of Russia;
NPK TEKHMASH OAO of Russia;
OBSHCHESTVO S OGRANICHENNOI OTVETSVENNOSTYU VR-RESURS of Russia;
PUBLIC JOINT STOCK COMPANY ARZAMASSKOE NAUCHNO PROIZVODSTVENNOE PREDPRIYATIE TEMP-AVIA of Russia;
RADUGA STATE MACHINE BUILDING DESIGN BUREAU JOINT STOCK COMPANY of Russia;
ROSTOV HELICOPTER PRODUCTION COMPLEX of Russia;
STATE DUMA OF THE FEDERAL ASSEMBLY OF THE RUSSIAN FEDERATION of Russia;
STATE SCIENTIFIC RESEARCH INSTITUTE OF MECHANICAL ENGINEERING IMENI V.V. BAKHIREVA of Russia;
TACTICAL MISSILES CORPORATION JSC of Russia;
TRV AUTO LIMITED LIABILITY COMPANY of Russia;
VERTOLETY ROSSII AO of Russia.

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

LENA (ZJL8309) Yacht British Virgin Islands flag; Vessel Registration Identification IMO 9594339.

https://home.treasury.gov/news/press-releases/jy0677

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March 25, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated five individuals and five entities connected to Burma’s military regime pursuant to Executive Order (E.O) 14014. OFAC also designated six individuals connected to the Nigeria-based terrorist group, Boko Haram. All six were found guilty of establishing a Boko Haram cell in the United Arab Emirates (UAE) to raise funds for and provide material assistance to Boko Haram insurgents in Nigeria.

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

ADAMU, Salihu Yusuf of Nigeria and the United Arab Emirates;
ALHASSAN, Ibrahim Ali of Nigeria;
AUNG, Naing Htut of Burma;
AUNG, Sit Taing of Burma;
HEIN, Zaw of Burma;
ISA, Muhammed Ibrahim of Nigeria and the United Arab Emirates;
MUHAMMAD, Surajo Abubakar of Nigeria and the United Arab Emirates;
MUSA, Abdurrahman Ado of Nigeria and the United Arab Emirates;
OO, Aung Hlaing of Burma;
OO, Ko Ko, Zayyarthiri, Nay Pyi Taw of Burma; and
YUSUF, Bashir Ali of Nigeria.

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

66TH LIGHT INFANTRY DIVISION of Burma;
ASIA GREEN DEVELOPMENT BANK LTD of Burma;
HTOO GROUP OF COMPANIES of Burma;
INTERNATIONAL GATEWAYS GROUP OF COMPANY LIMITED of Burma; and
MYANMAR CHEMICAL AND MACHINERY COMPANY LIMITED of Burma.

https://home.treasury.gov/news/press-releases/jy0679 and https://home.treasury.gov/news/press-releases/jy0678 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220325

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March 30, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned an Iran-based procurement agent and his network of companies that procured ballistic missile propellant-related materials for the Islamic Revolutionary Guard Corps Research and Self Sufficiency Jihad Organization (IRGC RSSJO), the IRGC unit responsible for the research and development of ballistic missiles, as well as Iran’s Parchin Chemical Industries (PCI), an element of Iran’s Defense Industries Organization (DIO). OFAC is also taking action against a key Iranian intermediary involved in the procurement of parts used to develop missile propellant on behalf of PCI.

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

HOSSEINI, Mohammad Ali of Iran.

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

JESTAR SANAT DELIJAN of Iran;
B. SADR CO. of Iran;
SAYEHBAN SEPEHR DELIJAN of Iran; and
SINA COMPOSITE DELIJAN COMPANY of Iran.

https://home.treasury.gov/news/press-releases/jy0689 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220330

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March 31, 2022: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is continuing to impose severe costs on the Russian Federation for its unprovoked and unjustified war against Ukraine by targeting operators in the Russian technology sector to prevent it from evading unprecedented multilateral sanctions and procure critical western technology. OFAC designated 21 entities and 13 individuals as part of its crackdown on the Kremlin’s sanctions evasion networks and technology companies, which are instrumental to the Russian Federation’s war machine. Treasury has also determined that three new sectors of the Russian Federation economy are subject to sanctions pursuant to Executive Order 14024 (E.O. 14024).

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

BERNOVA, Evgeniya Vladimirovna of Germany and Russia;
BOBKOV, Sergei Alekseevich of Russia;
DUBROVINSKIY, Viacheslav Yuryevich of Russia;
GLADKIKH, Evgeny Viktorovich of Russia;
GRININ, Yevgeniy Aleksandrovich of Russia;
KRUGOVOV, Anton Alekseevich of Russia;
MALEVANYY, Konstantin Vasilyevich of Russia;
NIKOLAEVA, Irina Viktorovna of Russia;
PODGORNOVA, Yevgeniya Aleksandrovna of Russia;
SOBOLEV, Nikita Aleksandrovich of Russia;
TOPCHI, Tamara Aleksandrovna of Russia;
YERSHOV, Sergey Aleksandrovich of Russia; and
ZAKHAROV, Andrey Georgiyevich of Russia.

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

ALEXSONG PTE LTD of Singapore;
AO NII VEKTOR of Russia;
DJECO GROUP HOLDING LTD of Malta;
DJECO GROUP LP of the United Kingdom;
INVENTION BRIDGE SL of Spain;
JOINT STOCK COMPANY MIKRON of Russia;
MAJORY LLP of the United Kingdom;
MALBERG LIMITED, of Malta;
MALTARENT LTD of Malta;
MOLECULAR ELECTRONICS RESEARCH INSTITUTE, JOINT STOCK COMPANY of Russia;
OOO FOTON PRO of Russia;
OOO NAUCHNO-TEKHNICHESKII TSENTR METROTEK of Russia;
OOO PAMKIN KHAUS of Russia;
OOO ROBIN TREID of Russia;
OOO SERNIYA INZHINIRING of Russia;
OOO SERTAL of Russia;
PHOTON PRO LLP of the United Kingdom;
QUANTLOG OY of Finland;
SCI GRIBER of France;
SERNIA-FILM CO, LTD of Russia; and
T-PLATFORMS of Russia.

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

LIMITED LIABILITY COMPANY OZON BANK of Russia; and
LLC OZON BANK of Russia.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220331 and https://home.treasury.gov/news/press-releases/jy0692

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U.S. Departments of Justice and Treasury

March 16, 2022: Attorney General Merrick B. Garland and Secretary of the Treasury Janet L. Yellen met virtually with representatives from Australia, Canada, Germany, France, Italy, Japan, the United Kingdom, and the European Commission, to launch the Russian Elites, Proxies, and Oligarchs (REPO) multilateral task force. The task force was first announced by leaders on Feb. 26. The task force, consisting of Finance Ministry and Justice or Home Ministry in each member jurisdiction, each committed to using their respective authorities in concert with other appropriate ministries to collect and share information to take concrete actions, including sanctions, asset freezing, civil and criminal asset seizure, and criminal prosecution.

https://www.justice.gov/opa/pr/us-departments-justice-and-treasury-launch-multilateral-russian-oligarch-task-force

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Fines and Penalties

March 1, 2022: Thomas Harris Jr., 29, of Croydon, PA, was sentenced to three years and 10 months in prison, and three years of supervised release for multiple firearms trafficking offenses stemming from his scheme to sell almost 40 guns to a buyer on the island of St. Lucia. https://www.justice.gov/usao-edpa/pr/bucks-county-man-sentenced-nearly-four-years-trafficking-firearms-st-lucia

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March 4, 2022: Joe Sery, former owner and chief executive officer of Tungsten Heavy Powder & Parts, and his brother, Dror Sery, were charged in a federal grand jury indictment with violations of federal export laws pursuant to the International Traffic in Arms Regulations (ITAR). Tungsten Heavy Powder & Parts, or THPP, is a San Diego-based company that provides tungsten fragments, sub-assemblies, and other weapon grade components for United States military contracts. According to the indictment, between January 1, 2016, and December 12, 2019, Joe Sery entered into contracts with various aerospace and defense companies on behalf of THPP. Joe Sery then obtained ITAR- controlled technical data and drawings from these companies to allow THPP to fulfill the contracted order. Some of THPP’s projects included the construction of an Advanced Rapid Response Weapon, a 155-millimeter Bi-Modal Warhead, a R9E Warhead, and an 81-millimeter Cowling Cone. These drawings contained information, which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance, or modification of defense articles. Despite being educated and trained regarding the requirements of ITAR, Joe Sery and his brother Dror Sery – a foreign national and dual citizen of Israel and South Africa – knowingly and willfully exported from the United States to the People’s Republic of China, the Republic of India and elsewhere overseas, defense articles covered by the United States Munitions List without first obtaining permission from the United States Department of State’s Directorate of Defense Trade Controls. Joe Sery is expected to be arraigned in federal court on Monday; an arrest warrant has been issued for fugitive Dror Sery. He is believed to be residing in Israel. https://www.justice.gov/usao-sdca/pr/former-tungsten-heavy-powder-parts-ceo-arrested-and-charged-unlawful-exportation

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March 8, 2022: Two former senior Venezuelan prosecutors have been charged with money laundering for their receipt of bribes in exchange for agreeing not to pursue criminal charges against certain individuals in Venezuela. According to the indictment, Daniel D’Andrea Golindano (D’Andrea), 43, and Luis Javier Sanchez Rangel (Sanchez), 35, both of Venezuela, are each charged with one count of conspiracy to commit money laundering and two counts of engaging in monetary transactions in the criminally derived property.

https://www.justice.gov/opa/pr/two-former-senior-venezuelan-prosecutors-charged-receiving-over-1-million-bribes

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March 29, 2022: The former Comptroller General of Ecuador made his initial appearance in a Miami, Florida courtroom, for allegedly engaging in a scheme to use the U.S. financial system to launder money to promote and conceal an illegal bribery scheme in Ecuador. According to the March 24 indictment, between approximately 2010 and 2016, Carlos Ramon Polit Faggioni (Polit), allegedly solicited and received over $10 million in bribe payments from Odebrecht S.A., the Brazil-based construction conglomerate, in exchange for using his official position as Comptroller General of Ecuador to influence official actions by the comptroller’s office in order to benefit Odebrecht and its business in Ecuador. Additionally, Polit is alleged to have received a bribe from an Ecuadorian businessman in or around 2015 in exchange for assisting the businessman and his company in connection with certain contracts from the state-owned insurance company of Ecuador. https://www.justice.gov/opa/pr/former-comptroller-general-ecuador-indicted-alleged-bribery-and-money-laundering-scheme

MARCH 2022 EXPORT CONTROL REGULATION UPDATES Read More »

FEBRUARY 2022 EXPORT CONTROL REGULATION UPDATES

This newsletter is a listing of the latest changes in export control regulations through February 28, 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

President

The White House Issues An Updated List Of Critical And Emerging Technologies

Feb 2022: The White House has issued an updated list of Critical and Emerging Technologies that are of particular importance to the national security of the United States:

Advanced Computing;
Advanced Engineering Materials;
Advanced Gas Turbine Engine Technologies;
Advanced Manufacturing;
Advanced and Networked Sensing and Signature Management;
Advanced Nuclear Energy Technologies;
Artificial Intelligence;
Autonomous Systems and Robotics;
Biotechnologies;
Communication and Networking Technologies;
Directed Energy;
Financial Technologies;
Human-Machine Interfaces;
Hypersonics;
Networked Sensors and Sensing; Quantum Information Technologies;
Renewable Energy Generation and Storage;
Semiconductors and Microelectronics; and
Space Technologies and Systems.

https://www.whitehouse.gov/wp-content/uploads/2022/02/02-2022-Critical-and-Emerging-Technologies-List-Update.pdf

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

DDTC Publishes Proposed Rule To Clarify Definitions

Feb. 2, 2022: 87 Fed. Reg. 5759: The Department of State published a proposed rule to clarify the definitions of export and reexport. Further, the Department of State proposed to replace the term “national” with “person” in the Canadian exemptions (ITAR 126.5); revise the exemption for intra-company, intra-organization, and intra-governmental transfers to dual nationals or third-country nationals; and correct administrative errors in the section on voluntary disclosures. The Department of State will accept comments on this proposed rule until April 4, 2022. Interested parties may submit comments by one of the following methods:

Email: DDTCPublicComments@state.gov with the subject line: “Regulatory Change: ITAR Sections 120, 126 and 127;

Internet: At www.regulations.gov, search for this notice, Docket DOS-2021-0031.

Comments received after that date may be considered if feasible, but consideration cannot be assured. Those submitting comments should not include any personally identifying information they do not desire to be made public or information for which a claim of confidentiality is asserted, because comments and/or transmittal emails will be made available for public inspection and copying after the close of the comment period via the Directorate of Defense Trade Controls website at www.pmddtc.state.gov. Parties who wish to comment anonymously may do so by submitting their comments via www.regulations.gov, leaving the fields that would identify the commenter blank and including no identifying information in the comment itself. https://www.federalregister.gov/documents/2022/02/02/2022-01889/international-traffic-in-arms-regulations-corrections-and-clarifications-for-export-and-reexport

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DDTC Publishes New Agreement Guidelines

Feb 11, 2022: The Directorate of Defense Trade Controls (DDTC) posted its latest version of its Agreement Guidelines, version 5.0, intended to provide clarity to Defense Trade Policy as it pertains to Agreements; and to establish a uniform and standard basis for submissions of Agreements and related correspondence. https://www.pmddtc.state.gov/ddtc_public?id=ddtc_kb_article_page&sys_id=74705f5edbb4130044f9ff621f961954

Revision 5.0 includes revisions and restructures the Agreement Guidelines in a more logical and orderly fashion. The majority of the text remains unchanged but has been relocated and combined with like topics. Additionally, duplicative guidance has been removed or consolidated. The end result is a 55% reduction in the length of the Guidelines. Updates to the agreement guidelines include:

Under certain circumstances, cover letters are no longer required with executed copies of TAAs and WDAs (see Section 5.2.1);
Expedited Execution is expanded to include the removal of sublicensees (see Section 13.1);
The U.S. Sublicensing statement is no longer required (see Section 9.1);
Optional language when utilizing § 126.18 is now provided (see Section 10.3.1);
Clarification that the description of end-use includes the identification of platforms (throughout Part 1);
Clarification on identifying and documenting foreign end-users (see Section 12);

Clarification on the “deployment clause” (see Section 17);
Update to documentation of space launch territories on the DSP-5 vehicle (see Section 18);
Clarify that the 124.4(b) letter must provide an estimate of the quantity of the articles authorized to be produced; and
MLAs involving the licensed manufacture of defense article abroad should identify the estimated quantity as part of the scope of the agreement (see Section 1.1.1, 2.1.1, and 5.2).

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DDTC Name And Address Changes Posted To Website

Feb. 4 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 from Bruel & Kjaer Sound and Vibration Measurement A/S to

Hottinger Bruel & Kjaer A/S.

Additionally, HBM Danmark ApS merged into Hottinger Bruel & Kjaer A/S.

Change in address for Hottinger Bruel & Kjaer A/S from Skodsborgvej 307, Naerum 2850, Denmark to

Teknikerbyen 28, 2830 Virum, Denmark.

These changes are a change in ownership due to the corporate merger of these two companies;

Change in Name from L3 Micreo Pty Ltd to L3Harris Micreo Pty Ltd due to corporate rebranding;
L3Harris Technologies, Inc. UK subsidiary changes in name due to corporate rebranding:

Old Name	New Name
Autonomous Surface Vehicles Limited	L3Harris Autonomous Surface Vehicles Limited
Harris Systems Limited	L3Harris Systems UK Limited
L3 MAPPS Limited	L3Harris MAPPS Limited

Change in name and ownership from BAE Systems Rokar International Ltd. to Elbit Systems Rokar Ltd. due to acquisition of BAE Systems Rokar International Ltd. by Elbit Systems Ltd.;
L3Harris Technologies, Inc. subsidiary changes in name due to corporate rebranding:

Old Name	New Name
Autonomous Surface Vehicles, LLC	L3Harris Autonomous Surface Vehicles, LLC
EDO Western Corporation	L3Harris EDO Western Corporation
Harris Geospatial Solutions, Inc	L3Harris Geospatial Solutions, Inc
Harris International, Inc.	L3Harris International, Inc.
L3 Aviation Products, Inc.	L3Harris Aviation Products, Inc.
L3 Cincinnati Electronics Corporation	L3Harris Cincinnati Electronics Corporation
L-3 Communications Integrated Systems L.P.	L3Harris Technologies Integrated Systems L.P
L3 Open Water Power, Inc	L3Harris Open Water Power, Inc
L3 Unidyne, Inc.	L3Harris Maritime Services, Inc.

Change in name from Emirates Advanced Investments Group, LLC to Aerospace Investment Company;
Change in name from Capgemini DEMS France S.A.S. to Capgemini Engineering Research and Development S.A.S. due to corporate rebranding;
Change in name and ownership from Babcock Mission Critical Services Offshore Limited to Offshore Helicopter Services UK Limited due to acquisition; and
Change in name and ownership from COM Dev Ltd. to Honeywell Limited due to acquisition.

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

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

BIS Updates The Foreign Direct Product Rules (FDP)

Feb. 3, 2022: 87 Fed. Reg. 6022: The Bureau of Industry and Security (BIS) is clarifying, reorganizing, and making minor corrections to the provisions of the foreign-direct product (FDP) rules. Before this final rule, the FDP rules appeared in parts 736 and 744 of the Export Administration Regulations (EAR). NOW, the rules are consolidated in part 734 of the EAR. These revisions clarify the applicability of the FDP rules and make one correction applicable to the FDP rules as to the term “U.S.-origin technology and software.” Placing the FDP rules in part 734 (Scope of the EAR) clarifies that they are used to determine if a foreign-produced item is subject to, and thus within the scope of, the EAR. To further clarify the FDP rules, this rule moves the license requirement, license review policy, and license exception applicability text for listed entities from the Entity List's Footnote 1 to Supplement No. 4 to part 744 to § 744.11(a), where the overall license requirements pertaining to listed entities are located.

This rule separates the FDP provisions into four paragraphs: The National Security FDP rule, the 9x515 FDP rule, the “600 series” FDP rule, and the Entity List FDP rule. While the product scope of the first three FDP rules is relatively similar in format, the country scopes of each rule are different. This reorganization and naming of the FDP rules do not make substantive changes to the FDP rules. Rather, it facilitates reference to and compliance with the rules.

The original national security-focused FDP rule is now the National Security FDP rule. The provisions of the 9x515 FDP rule and the “600 series” FDP rule are reorganized into separate paragraphs with a description of the product scope followed by the country scope. The provisions of the Entity List FDP rule are organized with a description of the product scope followed by the applicable end-user scope.

Clarification of the FDP Rules

This rule further clarifies the FDP rules by adding double quotation marks around terms that are defined in part 772 of the EAR, e.g., direct product, technology, software, and equipment. In addition, this rule clarifies in § 736.2(b)(3) of the EAR (General Prohibition Three), that foreign-direct products subject to the EAR are not necessarily subject to a license requirement and those license requirements must be determined based on an assessment of the classification, destination, end-user, and end-use of the items.

Lastly, this rule clarifies the circumstances under which the “600 series” FDP rule applies to items described in Export Control Classification Number (ECCN) 0A919.

Correction: U.S.-Origin “technology” and “software”

In this same rule, BIS corrects an earlier revision to General Prohibition Three to clarify when the FDP rules are intended to apply to the direct product of U.S.-origin technology or software. On May 19, 2020, BIS published a rule entitled “Export Administration Regulations: Amendments to General Prohibition Three (Foreign-Direct Product Rule) and the Entity List” (85 FR 29849). This rule removed the word “U.S.” from the heading of § 736.2(b)(3) (Foreign-Direct Product rule) where it had been placed in front of the words “technology and software.”

https://www.federalregister.gov/documents/2022/02/03/2022-02302/foreign-direct-product-rules-organization-clarification-and-correction

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BIS Adds 33 Persons From China To The Unverified List

Feb. 8, 2022: 87 Fed. Reg. 7037: BIS adds thirty-three (33) persons from China to the Unverified List (UVL). The thirty-three persons are 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. The thirty-three (33) persons are:

AECC South Industry Co., Ltd., Dongjiaduan, Lusong District, Zhuzhou, Hunan Province, China;
Beijing SWT Science, Yingbinbei Road 36, Yanjiao Economic & Development Zone, Sanhe City, Hebei Province, China;
Beijing Zhonghehangxun Technology Co., Ltd., Room 1705, Kaixuancheng Building E, No. 170 Beiyuan Road, Chaoyang District, Beijing, China;
China National Erzhong Group Deyang Wanhang Die Forging Co., Ltd., No. 460 Zhujiang Road West, Deyang City, Sichuan Province, China;
Chuzhou HKC Optoelectronics Technology Co., Ltd., No.101 Suchu Ave., Economic and Technological Development Zone, Nanqiao District, Chuzhou, Anhui Province 239000, China;
Dongguan Durun Optical Technology Co., Ltd., Building M Shing’ang Industrial Area, Houda Road, Dalingshan, Dongguan, Guangdong Province 523000, China;
Dongguan Huiqun Electronic Co., Ltd., 30 Daling Street, Jiaoyitang, Tangxia Town, Dongguan City, Guangdong Province 523723, China;
Guangdong Guanghua Sci-Tech Co., No. 295 Daxue Road, Shantou, Guangdong Province, China;
Guangxi Intai Technology Co., Ltd., 1 Jianan Road, Liuzhou City, Guangxi Province, China;
Guangzhou Hymson Laser Technology Co., Ltd., No. 2 Shiling Road, Dongchong Town, Nansha District, Guangzhou, Guangdong Province 511453, China;
Harbin Xinguang Feitian, 1717 Chuangxin Yi Road, Harbin, Heilongjiang Province, China;
Hefei Anxin Reed Precision Co., Ltd., No. 15 South Feiyang Road, Dayang Industry Park, Luyang District, Hefei City, Anhui Province 230000, China;
Heshan Deren Electronic Technology Co., Ltd., No. 13 Hongjiang Road, Heshan Industry City, Heshan City, Guangdong Province 529728, China;
Hubei Longchang Optical Co., Ltd., No. 4 Group Lianhuayan Village, Yaojiadian Town, Yidu City, Hubei Province 44300, China;
Hubei Sinophorus Electronic Materials Co., Ltd., No. 66–3, Xiaoting Road, Yichang, Hubei Province, China;
Hunan University, State Key Lab of Chemo/Biosensing & Chemometrics, Lushan Road, Yuelu District, Changsha, Hunan Province, China;
Jinan Bodor CNC Machine Co., Ltd., 1299 Xinluo Ave., Hi-Tech Zone, Jinan, Shandong Province, China; Jiutian Intelligent Equipment Co., Ltd., Woyun Road, Taohue Industry Park, Hefei Economic Zone, Hefei, Anhui Province, China;
Kunshan Heng Rui Cheng Industrial Technology Co., Ltd., No. 1088 Datong Road, Penglang Town, Kunshan Development Zone, Kunshan, Jiangsu 215300, China;
Shanghai Fansheng Optoelectronic Science & Technology Co., Ltd., No. 56 Jungong Road, Yangpu District, Shanghai, China;
Shanghai Micro Electronics Equipment (Group) Co., Ltd., No. 1525 Zhangdong Road, Zhangjiang HiTech Park, Pudong, Shanghai, China;
Shuang Xiang (Fujian) Electronics, No. 158 Jiangbin East Ave., Mawei, Fuzhou, Fujian 350300, China. Southern University of Science and Technology, Department of Mechanical and Energy Engineering, 1088 Xueyuan Ave., Nanshan District, Shenzhen, Guangdong 518055, China;
Suzhou Chaowei Jingna Optoelectric Co., Ltd., No. 97–1 Dongyuan Road, Jinting Town, Wuzhong District, Suzhou, Jiangsu, China;
Suzhou Gyz Electronic Technology Co., Ltd., No. 629 Songjiagang Road, Zhoushi Town, Kunshan City, Jiangsu Province 215314, China;
Suzhou Lylap Mould Technology Co., Ltd., No. 66–26 Linggang Road, Luzhi Town, Wuzhong District, Suzhou, Jiangsu Province, China;
Wuxi Biologics Co., Ltd., No. 108, Warehouse, Meiliang Road, Mashan Binghu, Wuxi, China, and No. 178 West Meiliang Road, Mashan Binghu District, Wuxi, China, and No. 200 Meiling Road, Mashan Town, Binhu District, Wuxi City, China;
Wuxi Biologics (Shanghai) Co., Ltd., Room 701, 7F, No. 02 Huajing Road, Waigaoqiao Free Trade Zone, Shanghai, China, and Bldg. 71–B, 96 Yiwei Road, Waigaoqiao Free Trade Zone, Shanghai, China;
Wuxi Turbine Blade Co., Ltd., 1800 Huishan Avenue, Huishan Economic Development District, Wuxi, Jiangsu Province, China;
Yunnan Fs Optics Co., Ltd., Hongta Industrial Zone, Hongta District, Yuxi, Yunnan Province, China; Yunnan Tianhe Optoelectronic Co., Ltd., Longquan Avenue, Longquan Industrial Zone, Jiangchuan, Yuxi City, Yunnan Province, China;
Zhengzhou Baiwai Intelligent Automation, National University Tech Park, Changchun Road, #11 Hi-Tech District, Zhengzhou City, Henan Province, China; and
Zhuzhou CRRC Special Equipment Technology Co., No. 79 Liancheng Road, Shifeng District, Zhuzhou City, Hunan Province 412001, China. https://www.bis.doc.gov/index.php/documents/regulations-docs/federal-register-notices/federal-register-2022/2906-87-fr-7037/file

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BIS Adds Seven Entities To The Entity List

Feb. 14, 2022: 87 Fed. Reg. 8180: The U.S. Department of Commerce, Bureau of Industry & Security (BIS) added seven entities to the Entity List. These seven entities have been determined by the U.S. Government to be acting contrary to the foreign policy or national security interests of the United States and will be listed on the Entity List under the destinations of the People’s Republic of China (China), Pakistan, and the United Arab Emirates (UAE). This final rule also modifies four existing entries on the Entity List under the destination of China. The seven entities added to the Entity List are:

China:

Jiangsu Tianyuan Metal Powder Co. Ltd;

Pakistan

Chemtech International (Private) Limited;
Engineering Materials and Equipment Co.;
Inspectech;
Value Additions (Pvt) Ltd.;
X-Cilent Engineering;

United Arab Emirates:

Odyssey General Trading FZC.

https://www.bis.doc.gov/index.php/documents/regulations-docs/federal-register-notices/federal-register-2022/2910-87-fr-8180/file

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

OFAC Issues Seven New Frequently Asked Questions Regarding Counter Terrorism

Feb. 2, 2022: The Department of the Treasury, Office of Foreign Assets Control (OFAC) issued seven new Frequently Asked Questions (FAQs) regarding Counter-Terrorism.

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

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OFAC Amends Its Regulations To Implement The Federal Civil Penalties Inflation Adjustment Act Of 1990 FOR FY 2022

Feb. 9, 2022; 87 Fed. Reg. 7369: The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) has amended its regulations to implement the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, for the fiscal year 2022. This regulatory amendment adjusts for inflation the maximum amount of the civil monetary penalties that may be assessed under relevant OFAC regulations. The major monetary penalty amounts have been changed to:

TWEA: $97,529;
IEEPA: $330,947;
AEDPA: 87,361;
FNKDA: $1,644,396; and
CDTA: $14,950.

See link for additional civil monetary penalty amounts.

https://www.federalregister.gov/documents/2022/02/09/2022-02736/inflation-adjustment-of-civil-monetary-penalties

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U.S. Customs and Border Protection (CBP)

CBP Deploys First Phase Of The ACE Portal Modernization

Feb. 9, 2022: U.S. Customs and Border Protection (CBP) successfully deployed the first phase of the ACE Portal Modernization. The first phase includes a new login screen, a new home page, an upgraded user account information display and edit features. To access the modernized ACE Portal, users must first create a modernized ACE Portal account. As part of this process, users will complete a one-time sync of existing ACE Portal access by entering their legacy ACE Portal username and password. For more information on this process, please review the ACE Portal Modernization Quick Reference Guide

Beginning February 20, 2022, users will no longer be able to log in from the legacy ACE Portal login page. At that time, the legacy login page will redirect users to the modernized ACE Portal.

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U.S. Census Bureau

Census Backtracks On the Removal Of The Requirement To File Electronic Export Information (EEI) Filing Requirement For Shipments Between The United States And Puerto Rico And The U.S. Virgin Islands

Feb. 7, 2022: 87 Fed. Reg. 6440: The Census Bureau’s Economic Management Division (EMD) through the publication of an Advanced Notice of Proposed Rulemaking (ANPRM) withdrew its prior ANPRM published on September 17, 2020, concerning the possible removal of the requirement to file Electronic Export Information (EEI) for shipments between the United States and Puerto Rico and the U.S. Virgin Islands (USVI). The Census Bureau has decided to continue the current EEI filing requirement for Puerto Rico and the USVI and continue to publish the U.S. Trade with Puerto Rico and U.S. Possessions (FT-895) Publication Series. The decision to withdraw the ANPRM was made after careful consideration based on the feedback received from the ANPRM and discussions between the Census Bureau and several stakeholders. The Census Bureau will continue to collect the EEI because there is no alternative data source that yields the same high-quality data for Puerto Rico and the USVI. https://www.govinfo.gov/content/pkg/FR-2022-02-04/pdf/2022-02341.pdf?utm_campaign=&utm_content=&utm_medium=email&utm_source=govdelivery

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Census Issues Tips On How To Resolve AES Response Messages

Feb. 17, 2022: The U.S. Census Bureau issued tips on how to resolve AES Response Messages. When a shipment is filed to the AES, a system response message is generated and indicates whether the shipment has been accepted or rejected. If the shipment is accepted, the AES filer receives an internal transaction number (ITN) as confirmation. Though the shipment is accepted, the filer may still receive a verify message, compliance alert, informational message, or warning message along with their ITN. However, if the shipment is rejected, a fatal error notification is received and must be corrected to receive a valid ITN. It is important that AES filers correct Fatal Errors as soon as they are received in order to comply with the Foreign Trade Regulations. These errors must be corrected prior to export for shipments filed pre-departure and as soon as possible for shipments filed post departure but not later than five calendar days after departure.

LATEST SANCTIONS FINES & PENALTIES

Sanctions

The President

Feb. 4, 2022: As indirect American-Iranian talks on reviving the 2015 international nuclear deal with Tehran enter the final stretch, President Biden's administration restored sanctions waivers to Iran to allow international nuclear cooperation projects. The waivers have allowed Russian, Chinese and European companies to carry out non-proliferation work to effectively make it harder for Iranian nuclear sites to be used for weapons development. The waivers were rescinded by the United States in 2019 and 2020 under former President Trump, who pulled out of the nuclear agreement. https://www.reuters.com/world/middle-east/biden-administration-restores-sanctions-waiver-iran-talks-final-phase-2022-02-04/

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Feb. 11, 2022: The President issued new Executive Order protecting certain property of Da Afghanistan Bank for the benefit of the people of Afghanistan. The President found that the widespread humanitarian crisis in Afghanistan including the urgent needs of the people of Afghanistan for food security, livelihoods support, water, sanitation, health, hygiene, shelter and settlement assistance, and COVID-19-related assistance, among other basic human needs and the potential for a deepening economic collapse in Afghanistan constitute an unusual and extraordinary threat to the national security and foreign policy of the United States. The President found that the preservation of certain property of Da Afghanistan Bank (DAB) held in the United States by United States financial institutions is of the utmost importance to addressing this national emergency and the welfare of the people of Afghanistan. Half of the funds will be used "for the benefit of the Afghan people," and half will be made available to settle claims against the Taliban of US victims of terrorism. https://home.treasury.gov/system/files/126/afghanistan_bank_eo.pdf

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Feb. 21, 2022: The President expanded the scope of the national emergency declared in Executive Order 13660 of March 6, 2014, and expanded by Executive Order 13661 of March 16, 2014, and Executive Order 13662 of March 20, 2014, and relied on for additional steps taken in Executive Order 13685 of December 19, 2014, and Executive Order 13849 of September 20, 2018, finding that the Russian Federation’s purported recognition of the so-called Donetsk People’s Republic (DNR) or Luhansk People’s Republic (LNR) regions of Ukraine contradicts Russia’s commitments under the Minsk agreements and further threatens the peace, stability, sovereignty, and territorial integrity of Ukraine, and thereby constitutes an unusual and extraordinary threat to the national security and foreign policy of the United States. The executive order expands the scope of the national emergency declared in Executive Order 13660 of March 6, 2014, and expanded by Executive Order 13661 of March 16, 2014, and Executive Order 13662 of March 20, 2014, and relied on for additional steps taken in Executive Order 13685 of December 19, 2014, and Executive Order 13849 of September 20, 2018, finding that the Russian Federation’s purported recognition of the so-called Donetsk People’s Republic (DNR) or Luhansk People’s Republic (LNR) regions of Ukraine contradicts Russia’s commitments under the Minsk agreements and further threatens the peace, stability, sovereignty, and territorial integrity of Ukraine, and thereby constitutes an unusual and extraordinary threat to the national security and foreign policy of the United States. The Executive Order orders the following prohibitions:

Section 1

(i) new investment in the so-called DNR or 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 (collectively, the “Covered Regions”), by a United States person, wherever located;

(ii) the importation into the United States, directly or indirectly, of any goods, services, or technology from the Covered Regions;

(iii) 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 Covered Regions; and

(iv) any approval, financing, facilitation, or guarantee by a United States person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited by this section if performed by a United States person or within the United States.

These prohibitions apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or license or permit granted prior to the date of this order.

In addition to the prohibitions of actions of U.S. Persons, the E.O. provides in Section 2 that all property and interests in property that are in the United States, that come within the United States, or are now or in the future in the possession or control of any United States person (including any foreign branch) of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in: any person determined by the Secretary of the Treasury, in consultation with the Secretary of State:

(i) to operate or have operated since the date of this order in the Covered Regions; (ii) to be or have been since the date of this order a leader, official, senior executive officer, or member of the board of directors of an entity operating in the Covered Regions;

(iii) to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order; or

(iv) to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any person whose property and interests in property are blocked pursuant to this order.

Like the first Section of the E.O., exceptions exist if provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the date of this order.

In the third section of the E.O., the prohibitions are clarified to specify the prohibitions in section 2 of the order include but are not limited to:

(a) the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order; and

(b) the receipt of any contribution or provision of funds, goods, or services from any such person.

Section 4. stipulates 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 set forth in this order is prohibited.

Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.

Section 5 provides the U.S. Federal government the authority to conduct official business.

Section 6 identifies the suspension of permitting the entry into the U.S. of unrestricted immigrant and nonimmigrant entry of noncitizens determined to meet one or more of the criteria in section 2 of the order as it would be detrimental to the interests of the United States, unless they are deemed not be contrary to the interests of the United States.

Section 7 states the making of donations of the types of articles specified in section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)) by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order would seriously impair the Presidents ability to deal with the national emergency declared in Executive Order 13660, expanded in Executive Orders 13661 and 13662, and further expanded by this order, and I hereby prohibit such donations as provided by section 2 of this order.

Section 8 defines the terms used in the E.O.

Section 9. states the President considers this E.O. effective immediately and no prior notice to blocked persons who might have property and interests and who might have a constitutional presence in the United States is necessary based on previously issued E.O.s.

Section 10. authorizes the Secretary of the Treasury, in consultation with the Secretary of State, to take such actions, including the promulgation of rules and regulations, and to employ all powers granted to the President by IEEPA, as may be necessary to carry out the purposes of this order. https://home.treasury.gov/system/files/126/20220221_eo_ukraine.pdf

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

Feb. 24, 2022: In response to the Russian Federation’s (Russia’s) further invasion of Ukraine, BIS issued a final rule by adding new Russia license requirements and licensing policies to the Export Administration Regulations (EAR) to protect U.S. national security and foreign policy interests. These new Russia measures: impose the following:

Adds new Commerce Control List (CCL)-based license requirements for Russia;
Adds two new foreign “direct product” rules (FDP rules) specific to Russia and Russian ‘military end-users;’
Specifies a license review policy of denial applicable to all of the license requirements being added in this rule, with certain limited exceptions;
Significantly restricts the use of EAR license exceptions;
Expands existing Russia ‘military end use’ and ‘military end user’ control scope to all items “subject to the EAR” other than food and medicine designated EAR99, or ECCN 5A992.c and 5D992.c unless for Russian “government end-users” and Russian state-owned enterprises (SoEs);
Transfers forty-five Russian entities from the Military End-User (MEU) List to the Entity List with an expanded license requirement of all items subject to the EAR (including foreign-produced items subject to the Russia-MEU FDP rules); and
Adds two new Russia entities and revise two Russia entities to the Entity List.

Lastly, this rule imposes comprehensive export, reexport and transfer (in-country) restrictions for the so-called Donetsk People’s Republic (DNR) and Luhansk People’s Republics (LNR) regions of Ukraine (“Covered Regions of Ukraine”) and makes conforming revisions to export, reexport transfer (in-country) restrictions for Crimea Region of Ukraine provisions. The final rule can be found at the following link and published in the Federal Register on March 3, 2022: https://www.bis.doc.gov/index.php/documents/regulations-docs/federal-register-notices/federal-register-2022/2915-public-display-version-of-new-export-control-measures-on-russia-final-rule-on-public-display-and-effective-2-24-22-scheduled-to-publish-3-3-22/file

BIS is implementing a new license requirement for Russia on items subject to the EAR and classified under any Export Control Classification Number (ECCN) in Categories 3 through 9 of the Commerce Control List, Supp. No. 1 to part 774 of the EAR (CCL). The new license requirement is added under new § 746.8(a)(1) (Russia sanctions) in part 746 of the EAR (Embargoes and Other Special Controls). License exceptions described in § 746.8(c)(1)-(7) may be used to overcome the license requirement. When a license application is required, applications for such items will be subject to a policy of denial. However, to minimize unintended consequences, a case-by-case review policy applies to applications to export, reexport, or transfer (in-country) items that ensure the safety of flight, maritime safety, meet humanitarian needs, enable government space cooperation, and allow transactions for items destined to specified Western subsidiaries and joint ventures, support civil telecommunications infrastructure in certain countries, and government-to-government activities. The case-by-case review policy will be used to determine whether a transaction that meets the criteria above would benefit the Russian government or the defense sector.

Additionally, BIS is establishing two new foreign “direct product” rules (FDP rules) in § 734.9 of the EAR. The first relates to the entire country of Russia, as described in new § 734.9(f) (the “Russia FDP rule”). Foreign-produced items subject to the EAR under the Russia FDP rule will be subject to the license requirement described in new § 746.8(a)(2) but will be eligible for certain license exceptions described in § 746.8(c)(1)-(7). When a license application is required, such applications will be subject to a general policy of denial but will be subject to case-by-case review for certain circumstances described further in § 746.8(b).

The second new FDP rule targets Russian ‘military end-users,’ as described in new § 734.9(g) (the “Russia-MEU FDP rule”). Foreign-produced items subject to the EAR under the Russia MEU FDP rule will be subject to the license requirement described in new § 746.8(a)(3). No license exceptions are available to overcome this license requirement, except as specified in the Entity List entry for a Footnote 3 entity on the Entity List in supplement no. 4 to part 744 of the EAR, and such items will be subject to a policy of denial for all license applications, as described in § 746.8(b).

BIS also is expanding the scope of the existing ‘military end use’ and ‘military end user’ control under § 744.21 of the EAR for Russia to apply to all items “subject to the EAR” except food and medicine designated EAR99, or ECCN 5A992.c and 5D992.c unless for Russian “government end-users” and Russian state-owned enterprises (SoEs).

This rule removes forty-five Russian entities from the Military End-User (MEU) List in Supplement No. 7 to part 744 and adds them to the Entity List with an expanded license requirement for the export, reexport, and transfer (in-country) of all items “subject to the EAR,” including those items subject to the Russia-MEU FDP rule for ‘military end users’ in Russia. Finally, BIS adds two new Russian entities to the Entity List under this final rule and revises two existing entries for Russian entities on the Entity List.

As a conforming change, this final rule also revises supplement No. 2 to part 734 - Guidelines for De Minimis Rules, by revising the third sentence of paragraph (a)(1), which specifies using the license requirements in part 746 for identifying U.S.-origin controlled content for de minimis content. This final rule adds a parenthetical phrase after part 746 to add the phrase “excluding U.S.-origin content that meets the criteria in § 746.8(a)(5).”

Under new § 746.8(b) (Licensing policy), applications for the export, reexport or transfer (in country) of items that require a license under new paragraph (a)(1) and (2) will be reviewed, with certain limited exceptions, under a policy of denial. License applications for certain categories of exports, reexports, and transfers (in-country) will be reviewed on a case-by-case basis to determine whether the transaction would benefit the Russian government or the defense sector. These categories are as follows:

Applications related to the safety of flight, maritime safety, to meet humanitarian needs, in support of government space cooperation; and
Applications for companies headquartered in Country Groups A:5 and A:6 to support civil telecommunications infrastructure, or involving government-to-government activities.

In addition, applications for items destined to certain companies operating in Russia will be reviewed on a case-by-case basis if the companies are:

(1) wholly-owned U.S. subsidiaries;

(2) foreign subsidiaries of U.S. companies that are joint ventures with other U.S. companies,

(3) joint ventures of U.S. companies with companies headquartered in Country Group A:5 and A:6 in supplement no. 1 to part 740 countries,

(4) wholly-owned subsidiaries of companies headquartered in Country Group A:5 and A:6 in supplement no. 1 to part 740 countries, or

(5) joint ventures of companies headquartered in Country Group A:5 and A:6 with other companies headquartered in Country Groups A:5 and A:6.

The case-by-case review policy does not apply to Russian-headquartered companies. This final rule also specifies in paragraph (b) that license applications required under paragraph (a)(3) will be reviewed under a policy of denial in all cases.

Lastly, under new paragraph (c) (License Exceptions), this final rule specifies that certain license exceptions apply to § 746.8(a)(1) and (2). Specifically, the license exceptions that apply are: certain sections of License Exception TMP for items for use by the news media, § 740.9(a)(9); License Exception GOV, § 740.11(b); License Exception TSU for software updates for civil end-users provided those civil end-users are subsidiaries or joint ventures of companies headquartered in the United States or a country or countries from Country Groups A:5 or A:6, § 740.13(c); License Exception BAG, excluding firearms and ammunition (paragraph (e)), § 740.14; License Exception AVS, § 740.15 (a) and (b); License Exception ENC, excluding Russian “government end-users” and Russian state-owned enterprises (SOEs), § 740.17; and License Exception Commercial Communications Devices (CCD), § 740.19. This final rule also specifies in paragraph (c) that no license exceptions may overcome the license requirements in paragraph (a)(3) except as specified in the Entity List entry for a Footnote 3 entity on the Entity List in supplement no. 4 to part 744 of the EAR, which is consistent with the fact that entities on the Entity List are generally not eligible for license exceptions.

In § 734.9 (Foreign-Direct Product (FDP) Rules), this final rule adds two new Foreign-Direct Product (FDP) rules as part of the new Russia sanctions. The first rule targets Russia as a destination, and the second targets Russian ‘military end-users.’ Addition of the Russia FDP Rule through the Russia FDP rule set out in new paragraph (f) of § 734.9 of the EAR, this rule establishes that a foreign-produced item located outside the United States are subject to the EAR when it meets both the product scope in paragraph (f)(1) of this section and the destination scope in paragraph (f)(2). License requirements, license review policy, and license exceptions applicable to the foreign-produced items that are subject to the EAR pursuant to this paragraph (f) are identified in § 746.8, described above. Product scope for the Russia FDP rule is defined in paragraph (f)(1)(i) (“Direct product” of “technology” or “software”) and paragraph (f)(1)(ii) (“Direct product” of a complete plant or major component of a plant).

The criteria in paragraph (f)(1)(i) applies to a foreign-produced item that is not designated EAR99 and that is the “direct product” of U.S.-origin “technology” or “software” specified in any ECCN in product groups D or E in Categories 3, 4, 5, 6, 7, 8, or 9 of the CCL. The criteria in paragraph (f)(1)(ii) applies to a foreign-produced item that is not designated EAR99 and is produced by any plant or ‘major component’ of a plant that itself is a “direct product” of U.S.-origin “technology” or U.S.-origin “software” and specified in any ECCN in product groups D or E in Categories 3, 4, 5, 6, 7, 8, or 9 of the CCL. This is an expansive list of “technology” and “software,” which will result in many additional foreign-produced items being considered “subject to the EAR” compared to the other existing FDP rules that applied to Russia prior to the publication of this rule. The additional foreign-produced items that will be “subject to the EAR” will be subject to the new license requirements imposed through this rule under the Sanctions against Russia (new § 746.8), as described above.

For a foreign-produced item to be subject to the EAR under the Russia FDP rule, the criteria in new § 734.9(f)(2) (Destination scope of the Russia FDP rule) must also be met. New paragraph (f)(2) specifies that a foreign-produced item meets the destination scope of the Russia FDP rule if there is “knowledge” that the foreign-produced item is destined to Russia, or will be incorporated into, or used in the “production” or “development” of any “part,” “component,” or “equipment” not designated EAR99 and produced in or destined to Russia.

The Russia-MEU FDP rule set forth in new paragraph (g) targets Russian ‘military end users’ that, as described below, previously were on the MEU List and are being removed from the MEU List and added to the Entity List in Supplement No. 4 to part 744 of the EAR in this final rule. To address the significant support that these ‘military end users’ provide to the Russian military, a new and more expansive FDP rule is warranted for these identified ‘military end users’ under the EAR compared to the FDP rules that apply to certain destinations under the EAR. This final rule adds a new paragraph (g) to impose this new FDP rule targeting these Russian ‘military end users.’ A foreign-produced item located outside the United States is subject to the EAR if it meets both the product scope in paragraph (g)(1) of § 734.9 and the destination scope in paragraph (g)(2). License requirements, license review policy, and license exceptions applicable to the foreign-produced items that are subject to the EAR pursuant to paragraph (g), which are now identified in § 746.8, are described above.

This final rule adds paragraph (g)(1)(i) (“Direct product” of “technology” or “software”) and paragraph (g)(1)(ii) (“Direct product” of a complete plant or major component of a plant) to define the product scope for the Russia-MEU FDP rule. The criteria in paragraph (g)(1)(i) extends to the “direct product” of “technology” or “software” subject to the EAR and specified in any ECCN in product groups D or E in any category of the CCL. Paragraph (g)(1)(ii) applies to a foreign-produced item that is produced by a plant or ‘major component’ of a plant that itself is a “direct product” of U.S.-origin “technology” or U.S.-origin “software” subject to the EAR and specified in any ECCN in product groups D or E in any category of the CCL, which is an expansive list of “technology” and “software.”

This will result in many additional foreign-produced items being considered “subject to the EAR” compared to the other existing FDP rules that applied to these Russian ‘military end users’ prior to the publication of this rule. The additional foreign-produced items that will be “subject to the EAR” will be subject to the new license requirements being imposed as part of the sanctions against Russia set forth in new § 746.8. For a foreign-produced item to be subject to the EAR, the criteria in new paragraph (g)(2) (End-user scope of the Russia MEU FDP rule) must be met. New paragraph (g)(2) specifies that a foreign-produced item meets the destination scope of the Russia MEU FDP rule if there is ‘‘knowledge’’ as specified in new paragraph (g)(2)(i) (Activities involving Footnote 3 designated entities) that a foreign-produced item will be incorporated into, or will be used in the ‘‘production’’ or ‘‘development’’ of any ‘‘part,’’ ‘‘component,’’ or ‘‘equipment’’ produced, purchased, or ordered by any entity with a footnote 3 designation in the license requirement column of the Entity List in supplement No. 4 to part 744 of the EAR.

In a corresponding change, this final rule adds a new footnote 3 to the Entity List for each of the Russian ‘military end users’ that are being removed from the MEU List and added to the Entity List as described below. The new footnote 3 to the Entity List is a key part of the criteria for the Russia-MEU FDP rule and will include a cross-reference back to §§ 734.9(g), 746.8, and 744.21. With the changes described below, forty-five entities on the Entity List now have a footnote 3 designation, as well as two additional entities being added to the Entity List and two existing entities that are being revised in this rule that will also have the footnote 3 designation, for a total of forty-nine entities with a footnote 3 designation. As specified in new paragraph (g)(2) of § 734.9, any entity with a footnote 3 designation in the license requirement column of the Entity List is a party to any transaction involving the foreign-produced item, e.g., as a ‘‘purchaser,’’ ‘‘intermediate consignee,’’ ‘‘ultimate consignee,’’ or ‘‘end-user.” A new Note 3 to paragraph (g) specifies that for purposes of paragraph (g), a ‘military end user’ is any entity listed on the Entity List under Russia with a footnote 3 designation.

These changes are implemented on March 3, 2022, the date on which the Federal Register Notice is published.

Editors Note: The sanctions on Russia reported in this newsletter are evolving on a daily basis. If your company does business in or with any Russian companies, it is imperative that your company stays abreast of the changes daily and considers not only the EAR updates but the OFAC sanctions as well. Combined they make it unlikely that the U.S. will be engaged in commercial transactions with Russian entities.

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

Feb. 3, 2022: OFAC added the World Human Care of Indonesia to its Specially Designated Nationals (SDN) List. World Human Care is a non-governmental organization established by the Indonesia-based designated terrorist group Majelis Mujahidin Indonesia (MMI) to provide financial support for MMI extremists in Syria under the guise of humanitarian aid. https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220203

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Feb. 8, 2022: OFAC issues the Ethiopia Sanctions Regulations to implement Executive Order 14046 of September 17, 2021, “Imposing Sanctions on Certain Persons with Respect to the Humanitarian and Human Rights Crisis in Ethiopia.” These regulations will take effect on February 9, 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/20220208

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Feb. 10, 2022: The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing a final rule to remove the Burundi Sanctions Regulations, 31 CFR part 554, from the Code of Federal Regulations. OFAC is taking this action because the national emergency on which part 554 was based was terminated by the President on November 18, 2021. These changes will take effect upon publication in the Federal Register on February 11, 2022. https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220210

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Feb. 10, 2022: The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) designated Wilder Emilio Sanchez Farfan and Miguel Angel Valdez Ruiz, Ecuadorian and Mexican Narcotics Traffickers, pursuant to Executive Order (E.O.) 14059 for materially contributing to the illicit activities of major Mexican cartels to traffic cocaine into the United States. The s action is the result of collaboration between OFAC and the Drug Enforcement Administration. https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220210

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Feb. 15, 2022: 87 Fed. Reg. 8735: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is adding regulations to implement a November 12, 2020, Executive order related to securities investments that finance Communist Chinese military companies, as amended by a June 3, 2021, Executive order related to the Chinese military-industrial complex and Chinese surveillance technology. These regulations took effect upon publication in the Federal Register on February 16, 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/system/files/126/fr87_8735.pdf

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Feb. 15, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is amending the Weapons of Mass Destruction Proliferators Sanctions Regulations, 31 CFR part 544, to revise an existing general license authorizing the provision of certain legal services and add a general license authorizing payments for legal services from funds originating outside the United States. This regulatory amendment is currently available for public inspection with the Federal Register and will take effect upon publication in the Federal Register on Wednesday, February 16, 2022. https://home.treasury.gov/system/files/126/20220215_wmd_reg_amendment.pdf

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Feb. 17, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Sergio Armando Orozco Rodriguez (a.k.a. “Chocho” as a Specially Designated National (SDN). Chocho is a facilitator of Cartel de Jalisco Nueva Generacion (“CJNG”) elicit activities in Mexico. pursuant to Executive Order (E.O.) 14059. CJNG, a violent Mexico-based organization, traffics a significant proportion of fentanyl and other deadly drugs that enter the United States. This action is the result of a collaboration between OFAC, the U.S. Drug Enforcement Administration (DEA), and the Government of Mexico. https://home.treasury.gov/news/press-releases/jy059

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Feb. 21, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issues Ukraine General Licenses, 17, 18, 19, 20, 21 and 22 related to the President’s expansion (See Article Above) of Executive Order 13661 of March 16, 2014, and Executive Order 13662 of March 20, 2014, and relied on for additional steps taken in Executive Order 13685 of December 19, 2014, and Executive Order 13849 of September 20, 2018, finding that the Russian Federation’s purported recognition of the so-called Donetsk People’s Republic (DNR) or Luhansk People’s Republic (LNR) regions of Ukraine contradicts Russia’s commitments under the Minsk agreements and further threatens the peace, stability, sovereignty, and territorial integrity of Ukraine, and thereby constitutes an unusual and extraordinary threat to the national security and foreign policy of the United States. Treasury’s General Licenses are designed to support the innocent people who live in the so-called DNR and LNR regions who did not have a choice in Russia’s destabilizing and illegitimate actions. The licenses allow a short-term wind-down of activities, as well as for the export to the regions of food, medicine, and medical devices, and ensure personal remittances can continue to flow. The licenses also allow telecommunications and internet services to remain operational, and mail services to continue. The licenses allow international organizations to be able to provide aid to the people in these two regions. https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220221_33

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Feb. 22, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing Russia-related Directive 1A under Executive Order 14024 and is issuing Russia-related General License 2 and General License 3. OFAC has also published two new Frequently Asked Questions (FAQ 964 and FAQ 965) and updated several Frequently Asked Questions.

In addition, the following names have been added to OFAC's list of Specially Designated Nationals list (SDN List) or the Non-SDN Menu-Based Sanctions list (NS-MBS List):

BORTNIKOV, Denis Aleksandrovich of Russia;
FRADKOV, Petr Mikhailovich of Russia;
KIRIYENKO, Vladimir Sergeevich of Russia.

The following Russian, Belarussian and Chinese entities have been added to OFAC's SDN List:

ALKES TREID OOO of Russia;
ANTARES OOO of Russia;
BANK BELVEB OJSC of Belarus;
ELITNYE DOMA OOO of Russia;
ERA FUND LIMITED LIABILITY COMPANY of Russia;
EXIMBANK OF RUSSIA JSC of Russia;
JSC ANGSTREM-T or Russia;
JSC INFRAVEB of Russia;
JSC PFC CSKA of Russia;
JSC RUSSIAN EXPORT CENTER;
JSC SLAVA of Russia;
JSC VEB.DV of Russia;
KHOLTSVUD OOO of Russia;
KOURF OOO of Russia;
LLC BAIKAL CENTER of Russia;
LLC INFRASTRUCTURE MOLZHANINOVO of Russia;
LLC NM-TEKH of Russia;
LLC PROGOROD of Russia;
LLC SIBUGLEMET GROUP of Russia;
LLC SPECIAL ORGANIZATION FOR PROJECT FINANCE FACTORY OF PROJECT FINANCE of Russia;
LLC TORGOVY KVARTAL-NOVOSIBIRSK of Russia;
LLC VEB SERVICE of Russia;
LLC VEB VENTURES of Russia;
LLC VEB.RF ASSET MANAGEMENT of Russia;
MANAGEMENT COMPANY PROMSVYAZ LLC of Russia;
PASKAL OOO of Russia;
PROMINVESTBANK of Russia;
PROMSVYAZBANK PUBLIC JOINT STOCK COMPANY of Russia;
PSB AVIALIZING OOO or Russia;
PSB BIZNES OOO of Russia;
PSB INNOVATIONS AND INVESTMENTS LIMITED LIABILITY COMPANY of Russia;
PSB LIZING OOO of Russia;
PSB-FOREKS OOO of Russia;
RUSSIAN AGENCY FOR EXPORT CREDIT AND INVESTMENT INSURANCE OJSC of Russia; SAINT-PETERSBURG INTERNATIONAL BANKING CONFERENCE LLC of Russia;
SERGIEVO-POSAD LEND OOO of Russia;
STATE CORPORATION BANK FOR DEVELOPMENT AND FOREIGN ECONOMIC AFFAIRS VNESHECONOMBANK of Russia;
TEKHNOSOFT OOO of Russia;
TRINITEX OOO of Russia;
VEB ASIA LIMITED of China;
VEB CAPITAL of Russia;
VEB ENGINEERING LLC of Russia;

VEB LEASING OJSC of Russia.

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

Baltic Leader of Russia;
Fesco Magadan of Russia;
Fesco Moneron of Russia;
Linda of Russia; and
Pegas of Russia.

The following entities have been added to OFAC's Non-SDN Menu-Based Sanctions List:

Central Bank Of The Russian Federation;
Ministry Of Finance Of The Russian Federation; and
National Wealth Fund Of The Russian Federation.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220222

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Feb. 23, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating members of an international network funding the Houthis’ war against the Yemeni government and increasingly aggressive attacks threatening civilians and civilian infrastructure in neighboring states on the OFAC’s SDN list. Led by the U.S.-designated Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and Houthi financier Sa’id al-Jamal, this network has transferred tens of millions of dollars to Yemen via a complex international network of intermediaries in support of the Houthis’ attacks. Despite persistent calls for peace from the international community, the Houthis continue their destructive campaign inside Yemen and have repeatedly launched ballistic missiles and unmanned aerial vehicles that have struck civilian infrastructure in neighboring states, resulting in civilian casualties. This action is taken in close coordination and collaboration with regional Gulf partners.

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

AHMED, Abdo Abdullah Dael;
SINGH, Chiranjeev Kumar; and
STAVRIDIS, Konstantinos.

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

AL FOULK TRADING CO. L.L.C. of the UAE;
AL HADHA EXCHANGE CO., of Yemen;
ALALAMIYAH EXPRESS COMPANY FOR EXCHANGE AND REMITTANCE of Yemen;
AURUM SHIP MANAGEMENT FZC of the UAE;
FANI OIL TRADING FZE, of the UAE;
GARANTI IHRACAT ITHALAT KUYUMCULUK DIS TICARET LIMITED SIRKETI of Turkey;
JJO GENERAL TRADING GIDA SANAYI VE TICARET ANONIM SIRKETI, of Turkey;
MOAZ ABDULLA DAEL FOR IMPORT AND EXPORT of Yemen; and
PERIDOT SHIPPING AND TRADING LLC of the UAE.

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

LIGHT MOON.

https://home.treasury.gov/news/press-releases/jy0603

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Feb 23, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 4 ,"Authorizing the Wind Down of Transactions Involving Nord Stream 2 AG".

In addition, the following name has been added to OFAC's list of Specially Designated Nationals list (SDN List):

WARNIG, Matthias of Russia.

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

NORD STREAM 2 AG of Switzerland.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220223_33

https://home.treasury.gov/system/files/126/peesa_gl4.pdf

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Feb. 24, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Russia-related Directive 2 and Directive 3 under Executive Order 14024 and Russia-related General License 5, General License 6, General License 7, General License 8, General License 9, General License 10, General License 11, and General License 12. OFAC is also issuing Belarus General License 6 and General License 7. In addition, OFAC has published new Frequently Asked Questions and updated several Frequently Asked Questions.

OFAC imposed expansive economic measures, in partnership with allies and partners, that target the core infrastructure of the Russian financial system — including all of Russia’s largest financial institutions and the ability of state-owned and private entities to raise capital — and further bars Russia from the global financial system. The actions also target nearly 80 percent of all banking assets in Russia and will have a deep and long-lasting effect on the Russian economy and financial system.

OFAC is taking action against Russia’s top financial institutions, including sanctioning by far Russia’s two largest banks and almost 90 financial institution subsidiaries around the world. Treasury is also sanctioning additional Russian elites and their family members and imposing additional new prohibitions related to new debt and equity of major Russian state-owned enterprises and large privately-owned financial institutions. This action will fundamentally imperil Russia’s ability to raise capital key to its acts of aggression. These actions are specifically designed to impose immediate costs and disrupt and degrade future economic activity, isolate Russia from international finance and commerce, and degrade the Kremlin’s future ability to project power.

OFAC is taking unprecedented action against Russia’s two largest financial institutions, Public Joint Stock Company Sberbank of Russia (Sberbank) and VTB Bank Public Joint Stock Company (VTB Bank), drastically altering their fundamental ability to operate. On a daily basis, Russian financial institutions conduct about $46 billion worth of foreign exchange transactions globally, 80 percent of which are in U.S. dollars. The vast majority of those transactions will now be disrupted.

Correspondent and Payable-Through Account Sanctions on Sberbank:

OFAC is imposing correspondent and payable-through account sanctions on Sberbank. Sberbank is uniquely important to the Russian economy, holding about a third of all bank assets in Russia. Sberbank is the largest financial institution in Russia and is majority-owned by the Government of Russia. It holds the largest market share of savings deposits in the country, is the main creditor of the Russian economy, and is deemed by the Government of Russia. Within 30 days, OFAC is requiring all U.S. financial institutions to close any Sberbank correspondent or payable-through accounts and to reject any future transactions involving Sberbank or its foreign financial institution subsidiaries.

To implement sanctions on Sberbank, OFAC issued Directive 2 under E.O. 14024, “Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions” (the “Russia-related CAPTA Directive”). This directive prohibits U.S. financial institutions from:

the opening or maintaining of a correspondent account or payable-through account for or on behalf of any entity determined to be subject to the prohibitions of the Russia-related CAPTA Directive, or their property or interests in property; and
the processing of transactions involving any such entities determined to be subject to the Russia-related CAPTA Directive, or their property or interests in property. Accordingly, U.S. financial institutions must reject such transactions unless exempt or authorized by OFAC.

Pursuant to Directive 2 under E.O. 14024, Sberbank and 25 Sberbank foreign financial institution subsidiaries that are 50 percent or more owned, directly or indirectly, by Sberbank were identified in Annex 1 to the Russia-related CAPTA Directive. These subsidiaries include banks, trusts, insurance companies, and other financial companies located in Russia and six other countries.

Sberbank and other affiliated entities determined to be subject to the Russia-related CAPTA Directive have been added to OFAC’s List of Foreign Financial Institutions Subject to Correspondent Account or Payable-Through Account Sanctions (CAPTA List), a reference tool that provides actual notice of OFAC actions with respect to foreign financial institutions for which the opening or maintaining of a correspondent account or a payable-through account in the United States is prohibited or subject to one or more strict conditions. All foreign financial institutions owned 50 percent or more, directly or indirectly, by Sberbank are covered by the prohibitions of the Russia-related CAPTA Directive, even if not identified on OFAC’s CAPTA List.

The prohibitions of the Russia-related CAPTA Directive take effect beginning at 12:01 a.m. eastern daylight time on March 26, 2022. Accordingly, by 12:01 a.m. eastern daylight time on March 26, 2022, U.S. financial institutions must have closed any correspondent or payable-through account maintained for Sberbank all other entities listed in Annex 1 to the Russia-related CAPTA Directive, and all foreign financial institutions owned 50 percent or more by the foregoing. In addition, after 12:01 a.m. eastern daylight time on March 26, 2022, U.S. financial institutions may not process transactions involving those institutions and must reject such transactions, unless exempt or authorized by OFAC.

Full Blocking Sanctions on VTB:

OFAC has imposed full blocking sanctions on VTB Bank, Russia’s second-largest financial institution, which holds nearly 20 percent of banking assets in Russia. VTB Bank is majority-owned by the Government of Russia. This action will sever a critical artery of Russia’s financial system. By imposing these sanctions, assets held in U.S. financial institutions will be instantly frozen and inaccessible to the Kremlin. This is one of the largest financial institutions Treasury has ever blocked and sends an unmistakable signal that the United States is following through on its promise of delivering severe economic costs.

VTB Bank was designated pursuant to E.O. 14024 for being owned or controlled by, or for having acted or purported to act for or on behalf of, directly or indirectly, the Government of Russia, and for operating or having operated in the financial services sector of the Russian Federation economy. In addition, 20 VTB Bank subsidiaries were designated pursuant to E.O. 14024 for being owned or controlled by, directly or indirectly, VTB Bank. These subsidiaries include banks, holding companies, and other financial companies located in Russia and eight other countries. All entities owned 50 percent or more, directly or indirectly, by VTB Bank are subject to blocking, even if not identified by OFAC.

Blocking Other Major Russian Financial Institutions:

OFAC has also imposed blocking sanctions on three additional major Russian financial institutions: Otkritie, Novikom, and Sovcom. These three financial institutions play significant roles in the Russian economy, holding combined assets worth $80 billion. These designations further restrict the Russian financial services sector and greatly diminish the ability of other critical Russian economic sectors from accessing global markets, attracting investment, and utilizing the U.S. dollar.

Debt And Equity Prohibitions Against Major State-Owned And Private Entities:

In a move to limit Russia’s ability to finance its invasion against Ukraine or other priorities of President Putin, OFAC expanded Russia-related debt and equity restrictions to additional key aspects of Russia’s economy. To implement this action, OFAC issued Directive 3 under E.O. 14024, “Prohibitions Related to New Debt and Equity of Certain Russia-related Entities” (the “Russia-related Entities Directive”) to prohibit transactions and dealings by U.S. persons or within the United States in new debt of longer than 14 days maturity and new equity of Russian state-owned enterprises, entities that operate in the financial services sector of the Russian Federation economy, and other entities determined to be subject to the prohibitions in this directive.

To ensure that these sanctions and prohibitions have an impact on the intended targets and to minimize unintended consequences on third parties, OFAC has also issued several general licenses in connection with these actions. In particular, payments for energy are from production to consumption. The sanctions and license package has been constructed to account for the challenges high energy prices pose to average citizens and doesn’t prevent banks from processing payments for them.

Specifically, OFAC issued eight general licenses authorizing certain transactions related to:

international organizations and entities;
agricultural and medical commodities and the COVID-19 pandemic;
overflight and emergency landings;
energy;
dealings in certain debt or equity;
derivative contracts;
the wind-down of transactions involving certain blocked persons; and
the rejection of transactions involving certain blocked persons.

To provide further guidance on these authorizations, OFAC also issued extensive public guidance in the form of Frequently Asked Questions (FAQs).

New Actions Targeting Russian Elites:

Families Close to Putin:

Elites close to Putin continue to leverage their proximity to the Russian President to pillage the Russian state, enrich themselves, and elevate their family members into some of the highest positions of power in the country at the expense of the Russian people. Sanctioned oligarchs and powerful Russian elites have used family members to move assets and to conceal their immense wealth. The following designations target influential Russians in Putin’s inner circle and in elite positions of power within the Russian state. Many of these individuals are believed to participate in, or benefit from, the Russian regime’s kleptocracy, along with their family members. Many serve in leadership roles of companies designated or identified herein:

Sergei Sergeevich Ivanov,son of Sergei Borisovich Ivanov;
Andrey Patrushev, son of Nikolai Platonovich Patrushev; and
Ivan Igorevich Sechin, son ofIgor Ivanovich Sechin.

Financial Sector Elites:

Senior executives at state-owned banks, like Kremlin-linked elites, take advantage of their closeness to the Russian power vertical to advance the interests of the Russian state while maintaining an extravagant standard of living:

Alexander Aleksandrovich Vedyakhin;
Andrey Sergeyevich Puchkov; and
Soloviev’s wife, Galina Olegovna Ulyutina (Ulyutina), was previously implicated in a golden passport scheme.

OFAC designated Puchkov and Soloviev pursuant to E.O. 14024 for being or having been leaders, officials, senior executive officers, or members of the board of directors of the Government of Russia:

Limited Liability Company Atlant S and Limited Liability Company Inspira Invest A

As part of the United States’ serious and expansive response to Russia’s further invasion of Ukraine, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is sanctioning 24 Belarusian individuals and entities due to Belarus’s support for, and facilitation of, the invasion. This action focuses on Belarus’s defense sector and financial institutions, two areas in which Belarus has especially close ties to Russia. Belarus has become increasingly reliant on Russia for economic, political, and military support in recent years as the regime has clung to power following the fraudulent August 2020 presidential election.

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

DMITRY, Pantus Aleksandrovich of Belarus;
IVANOV, Sergei Sergeevich of Russia;
KHRENIN, Viktor Gennadievich of Belarus;
PATRUSHEV, Andrey of Russia;
PUCHKOV, Andrey Sergeyevich of Russia;
RASSALAI, Viachaslau Yevgenyevich of Belarus;
RYMASHEUSKI, Aliaksei Ivanavich of Belarus;
SECHIN, Ivan Igorevich of Russia;
SHATROU, Aliaksandr Yauhenavich of Belarus;
SOLOVIEV, Yuriy Alekseyevich of Russia;
ULYUTINA, Galina Olegovna of Russia;
VEDYAKHIN, Alexander Aleksandrovich of Russia;
VETSIANEVICH, Aliaksandr Piatrovich of Belarus;
VOLFOVICH, Aleksandr Grigorievich of Russia; and
ZAITSAU, Aliaksandr Mikalaevich of Belarus.

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

AKTSIONERNOE OBSHCHESTVO FINTENDER of Russia;
AKTSIONERNOE OBSHCHESTVO RTS-KHOLDING of Russia;
AKTSIONERNOE OBSHCHESTVO SOVKOMBANK STRAKHOVANIE of Russia;
BANCO VTB AFRICA SA of Russia;
BANK DABRABYT JOINT STOCK COMPANY of Russia;
BANK NATIONAL FACTORING COMPANY JOINT STOCK COMPANY of Russia;
BANK VTB KAZAKHSTAN JOINT STOCK COMPANY of Russia;
BELARUSSIAN BANK OF DEVELOPMENT AND RECONSTRUCTION
BELINVESTBANK JOINT STOCK COMPANY of Russia;
BEST2PAY LIMITED of Russia;
BM BANK PUBLIC JOINT STOCK COMPANY;
BUSINESS-FINANCE LIMITED LIABILITY COMPANY;
CJSC BELBIZNESLIZING;
GMCS MANAGEMENT LIMITED LIABILITY COMPANY;
INDUSTRIAL-COMMERCIAL PRIVATE UNITARY ENTERPRISE MINOTOR-SERVICE of Belarus;
JOINT STOCK COMMERCIAL BANK NOVIKOMBANK of Russia;
JOINT STOCK COMPANY SAROVBUSINESSBANK of Russia;
JOINT STOCK COMPANY SOVCOMBANK LIFE of Russia;
JSC 558 AIRCRAFT REPAIR PLANT of Belarus;
LIMITED LIABILITY COMPANY ATLANT S of Russia;
LIMITED LIABILITY COMPANY BELINVEST-ENGINEERING of Belarus;
LIMITED LIABILITY COMPANY INSPIRA INVEST A of Russia;
LIMITED LIABILITY COMPANY OZON BANK of Russia;
LIMITED LIABILITY COMPANY VTB DC of Russia;
LLC 24X7 PANOPTES of Belarus;
LLC SYNESIS of Belarus;
MINSK WHEEL TRACTOR PLANT of Belarus;
MOBILNYE PLATEZHI LIMITED LIABILITY COMPANY of Russia;
NPF OTKRITIE GROUP of Russia;
NPF VTB PENSION FUND JOINT STOCK COMPANY of Russia;
OBSHCHESTVO S OGRANICHENNOI OTVETSTVENNOSTYU VTB FOREKS of Russia;
OJSC KB RADAR-MANAGING COMPANY HOLDING RADAR SYSTEM of Belarus;
OKB TSP SCIENTIFIC PRODUCTION LIMITED LIABILITY COMPANY of Belarus;
OOO NAVIGATOR ASSET MANAGEMENT of Russia;
OOO OBORONNYE INITSIATIVY of Belarus;
OOO OTKRITIE ASSET MANAGEMENT of Russia;
OOO OTKRITIE CAPITAL of Russia;
OOO OTKRITIE FACTORING of Russia;
OOO RGS HOLDING of Russia;
OOO SOKHRA of Belarus;
OOO TAMOZHENNAYA KARTA of Russia;
OTKRITIE BROKER GROUP of Russia;
OTKRITIE CAPITAL CYPRUS LIMITED of Russia;
OTKRITIE LTD GROUP of Cyprus;
PAO ROSGOSSTRAKH BANK of Russia;
PUBLIC JOINT STOCK COMPANY BANK FINANCIAL CORPORATION OTKRITIE of

Russia;

PUBLIC JOINT STOCK COMPANY INSURANCE COMPANY ROSGOSSTRAKH of

Russia;

PUBLIC JOINT STOCK COMPANY INTEGRAL of Belarus;
PUBLIC JOINT STOCK COMPANY KB VOSTOCHNY of Russia;
RUSKONSALT of Russia;
SEPTEM CAPITAL LIMITED LIABILITY COMPANY of Russia;
SOLLERS-FINANCE LIMITED LIABILITY COMPANY of Russia;
SOVCOMBANK ASSET MANAGEMENT LIMITED LIABILITY COMPANY of Russia;
SOVCOMBANK FACTORING LIMITED LIABILITY COMPANY of Russia;
SOVCOMBANK OPEN JOINT STOCK COMPANY of Russia;
SOVCOMBANK SECURITIES LIMITED of Cyprus;
SOVCOMBANK TECHNOLOGIES LIMITED LIABILITY COMPANY of Russia;
SOVCOMCARD LIMITED LIABILITY COMPANY of Russia;
SOVKOM FAKTORING of Russia;
SOVKOM LIZING of Russia;
STATE AUTHORITY FOR MILITARY INDUSTRY OF THE REPUBLIC OF BELARUS

of Belarus;

STATE OWNED FOREIGN TRADE UNITARY ENTERPRISE BELSPETSVNESHTECHNIKA of Belarus;
TSIFROVYE TEKHNOLOGII BUDUSHCHEGO LIMITED LIABILITY COMPANY of

Russia;

USM LIMITED LIABILITY COMPANY of Russia;
VIETNAM-RUSSIA JOINT VENTURE BANK of Vietnam;
VTB BANK ARMENIA CLOSED JOINT STOCK COMPANY of Armenia;
VTB BANK AZERBAIJAN OPEN JOINT STOCK COMPANY of Azerbaijan;
VTB BANK BELARUS CLOSED JOINT STOCK COMPANY of Belarus;
VTB BANK EUROPE SE of Germany;
VTB BANK GEORGIA JOINT STOCK COMPANY of Georgia;
VTB BANK PUBLIC JOINT STOCK COMPANY of Russia;
VTB CAPITAL HOLDINGS CLOSED JOINT STOCK COMPANY of Russia;
VTB FACTORING LTD of Russia;
VTB PENSION ADMINISTRATOR LIMITED of Russia;
VTB REGISTRAR CLOSED JOINT STOCK COMPANY of Russia;
VTB SPECIALIZED DEPOSITORY CLOSED JOINT STOCK COMPANY of Russia; and
WEST SIBERIAN COMMERCIAL BANK PUBLIC JOINT STOCK COMPANY of Russia.

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

IVANOV, Sergei of Russia;
JSC TRANSAVIAEXPORT AIRLINES of Belarus;
PATRUSHEV, Nikolai Platonovich of Russia; and
SECHIN, Igor or Russia.

Non-SDN Menu-Based Sanctions List Update:

The following entities have been added to OFAC's Non-SDN Menu-Based Sanctions List:

CREDIT BANK OF MOSCOW PUBLIC JOINT STOCK COMPANY of Russia;
GAZPROMBANK JOINT STOCK COMPANY of Russia;
JOINT STOCK COMPANY ALFA-BANK of Russia;
JOINT STOCK COMPANY RUSSIAN AGRICULTURAL BANK of Russia;
JOINT STOCK COMPANY SOVCOMFLOT of Russia;
OPEN JOINT STOCK COMPANY RUSSIAN RAILWAYS of Russia;
PUBLIC JOINT STOCK COMPANY ALROSA of Russia;
PUBLIC JOINT STOCK COMPANY GAZPROM of Russia;
PUBLIC JOINT STOCK COMPANY GAZPROM NEFT of Russia;
PUBLIC JOINT STOCK COMPANY ROSTELECOM of Russia;
PUBLIC JOINT STOCK COMPANY RUSHYDRO of Russia;
PUBLIC JOINT STOCK COMPANY SBERBANK OF RUSSIA of Russia; and
PUBLIC JOINT STOCK COMPANY TRANSNEFT of Russia.

Correspondent Account Or Payable-Through Account Sanctions List Update:

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

ARIMERO HOLDING LIMITED of Cyprus;
IKS JOINT STOCK COMPANY of Russia;
INSURANCE COMPANY SBERBANK INSURANCE LIMITED LIABILITY COMPANY of Russia;
INSURANCE COMPANY SBERBANK LIFE INSURANCE LIMITED LIABILITY COMPANY of Russia;
JOINT STOCK COMPANY RASCHETNIYE RESHENIYA of Russia;
JOINT STOCK COMPANY SBERBANK of Russia;
JOINT STOCK COMPANY SBERBANK AUTOMATED TRADE SYSTEM of Russia;
JOINT STOCK COMPANY SBERBANK LEASING of Russia;
JOINT STOCK COMPANY SBERBANK PRIVATE PENSION FUND of Russia;
LIMITED LIABILITY COMPANY MARKET FUND ADMINISTRATION of Russia;
LIMITED LIABILITY COMPANY PROMISING INVESTMENTS of Russia;
LIMITED LIABILITY COMPANY SBERBANK CAPITAL of Russia;
LIMITED LIABILITY COMPANY SBERBANK CIB HOLDING of Russia;
LIMITED LIABILITY COMPANY SBERBANK FACTORING of Russia;
LIMITED LIABILITY COMPANY SBERBANK FINANCIAL COMPANY of Russia;
LIMITED LIABILITY COMPANY SBERBANK INSURANCE BROKER of Russia;
LIMITED LIABILITY COMPANY SBERBANK INVESTMENTS of Russia;
LIMITED LIABILITY COMPANY YOOMONEY of Russia;
OPEN JOINT STOCK COMPANY BPS-SBERBANK of Belarus;
PUBLIC JOINT STOCK COMPANY SBERBANK OF RUSSIA of Russia;
SB SECURITIES SA of Luxembourg;
SBERBANK EUROPE AG of Austria;
SETELEM BANK LIMITED LIABILITY COMPANY of Russia;
SUBSIDIARY BANK SBERBANK OF RUSSIA JOINT STOCK COMPANY of Kazakhstan;
TEKHNOLOGII KREDITOVANIYA LIMITED LIABILITY COMPANY of Russia; and
VYDAYUSHCHIESYA KREDITY MICROCREDIT COMPANY LIMITED LIABILITY COMPANY of Russia;

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220224

https://home.treasury.gov/news/press-releases/jy0608

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Feb. 25, 2022: The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) is issuing Afghanistan-related General License 20 "Authorizing Transactions Involving Afghanistan or Governing Institutions in Afghanistan". OFAC has also published new Afghanistan-related Frequently Asked Questions and amended several Frequently Asked Questions. The General License aims to ensure that U.S. sanctions do not prevent or inhibit transactions and activities needed to provide aid to and support the basic human needs of the people of Afghanistan and underscores the United States’ commitment to working with the private sector, international partners and allies, and international organizations to support the people of Afghanistan. https://home.treasury.gov/news/press-releases/jy0609 https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220225

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Feb. 25, 2022: The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) added additional Russians to the SDN List. The following individuals have been added to OFAC's SDN List:

PUTIN, Vladimir Vladimirovich;
LAVROV, Sergei Viktorovich;
GERASIMOV, Valery; and
SHOIGU, Sergei.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220225_33

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Feb. 28, 2022: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is adding regulations to implement an April 15, 2021 Executive order related to specified harmful foreign activities of the Government of the Russian Federation. In particular, efforts to undermine the conduct of free and fair democratic elections and democratic institutions in the United States and its allies and partners; to engage in and facilitate malicious cyber-enabled activities against the United States and its allies and partners; to foster and use transnational corruption to influence foreign governments; to pursue extraterritorial activities targeting dissidents or journalists; to undermine security in countries and regions important to United States national security; and to violate well-established principles of international law, including respect for the territorial integrity of states—constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States and declared a national emergency to deal with that threat. These regulations took effect on Tuesday, March 1, 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/system/files/126/fr_2022-04281.pdf

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220228_33

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Feb. 28, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Russia-related Directive 4 under Executive Order 14024 and Russia-related General License 8A. In addition, names have been added to OFAC's list of Specially Designated Nationals list (SDN List) or have been updated on OFAC's Non-SDN Menu Based Sanctions List pursuant to Executive Order 14024, Directive 4. OFAC prohibits United States persons from engaging in transactions with 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 action effectively immobilizes any assets of the Central Bank of the Russian Federation held in the United States or by U.S. persons, wherever located.

In addition, OFAC sanctioned a key Russian sovereign wealth fund, the Russian Direct Investment Fund (RDIF), with exposure to the United States financial system and its Chief Executive Officer (CEO), Kirill Dmitriev – a known Putin ally. Recently designated Russian President Vladimir Putin and his inner circle of cronies have long relied on RDIF and Dmitriev to raise funds abroad, including in the United States. By further restricting these persons and entities from the U.S. financial system, the United States continues to demonstrate its unwavering commitment to supporting Ukraine, impose costs on Putin’s inner circle or those connected to Putin and his war of choice, and prevent Putin’s regime from raising capital to fund its invasion of Ukraine and other priorities.

The following names have been added to OFAC's list of Specially Designated Nationals List (SDN List) or have been updated on OFAC's Non-SDN Menu Based Sanctions List pursuant to Executive Order 14024, Directive 4:

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

DMITRIEV, Kirill Aleksandrovich of Russia.

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

JOINT STOCK COMPANY MANAGEMENT COMPANY OF THE RUSSIAN DIRECT INVESTMENT FUND of Russia;
LIMITED LIABILITY COMPANY RVC MANAGEMENT COMPANY of Russia;
RUSSIAN DIRECT INVESTMENT FUND of Russia.

The following changes have been made to OFAC's Non-SDN Menu-Based Sanctions List:

CENTRAL BANK OF THE RUSSIAN FEDERATION of Russia;
MINISTRY OF FINANCE OF THE RUSSIAN FEDERATION of Russia; and
NATIONAL WEALTH FUND OF THE RUSSIAN FEDERATION of Russia.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220228

https://home.treasury.gov/news/press-releases/jy0612

Fines and Penalties

Feb. 14, 2022: Jonathan Toebbe, pleaded guilty to conspiracy to communicate restricted data related to the design of nuclear-powered warships to a person he believed was a representative of a foreign nation.

Toebbe pleaded guilty to count one of the indictment charging him with conspiracy to communicate Restricted Data which carries a maximum statutory penalty of up to life in prison, a fine up to $100,000, and a term of supervised release not more than five years. Pursuant to his plea agreement, Toebbe will serve a minimum of 151 months, or 12 and a half years, in federal prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Toebbe held an active national security clearance through the Department of Defense, giving him access to “Restricted Data” within the meaning of the Atomic Energy Act. Restricted Data concerns design, manufacture, or utilization of atomic weapons, or production of Special Nuclear Material (SNM), or use of SNM in the production of energy – such as naval reactors. https://www.justice.gov/opa/pr/maryland-nuclear-engineer-pleads-guilty-espionage-related-offense

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Feb. 17, 2022: 87 Fed. Reg. 9030: BIS denied the export privileges of Abdiel Padron Madrid - until June 17, 2030. Madrid was convicted of receiving, concealing, buying, selling, and facilitating the transportation and willfully and knowingly attempting to export and send from the United States to Mexico, six thousand three hundred and eighty (6,380) rounds of various caliber ammunition, which at the time of the attempted export were defense articles as defined under the United States Munitions List, in violation of 18 U.S.C. 554. https://www.federalregister.gov/documents/2022/02/17/2022-03413/order-denying-export-privileges-in-the-matter-of-abdiel-padron-madrid-inmate-number-42167-480-fci-la

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Feb. 17, 2022: 87 Fed. Reg. 9031: BIS denied the export privileges of Bianca Garcia-Rodriguez - until January 8, 2025. Garcia-Rodriguez was convicted of knowingly attempting to export from the United States to Mexico approximately 3,600 rounds of .223 caliber ammunition, defense articles on the U.S. Munitions List, 22 C.F.R. Part 221, in violation of 18 U.S.C. § 554. https://www.federalregister.gov/documents/2022/02/17/2022-03417/in-the-matter-of-bianca-garcia-rodriguez-3134-east-25th-street-brownsville-tx-78521-order-denying

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Feb. 17, 2022: 87 Fed. Reg. 9032: BIS denied the export privileges of Luis Curiel-Trevino - until January 14, 2030. Luis Curiel-Trevino was convicted for fraudulently and knowingly exporting and causing to export approximately 700 rounds of super .38 caliber ammunition and approximately 100 rounds of .45 caliber auto-ammunition, from the United States to Mexico, without having first obtained the required licenses or written authorization from the Department of State, in violation of 18 U.S.C. 554. https://www.federalregister.gov/documents/2022/02/17/2022-03414/order-denying-export-privileges-in-the-matter-of-luis-curiel-trevino-inmate-number-97081-479-giles-w

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Feb. 17, 2022: 87 Fed. Reg. 9031: BIS denied the export privileges of Luis Martin Camarena until September 26, 2029. Luis Martin Camarena was convicted of knowingly and unlawfully concealing, buying, and facilitating the transportation and exportation from the United States to Mexico of two Ruger AR-556 rifles, two Smith and Wesson M&P15 rifles, one Century Arms International Mini-Draco pistol, one Century Arms International C308 rifle, one FNH M249 rifle, and related ammunition. https://www.federalregister.gov/documents/2022/02/17/2022-03415/bureau-of-industry-and-security

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Feb. 17, 2022: 87 Fed. Reg. 9033: BIS denied the export privileges of Ramon Aguilar-Manriquez until July 23, 2029. Ramon Aguilar-Manriquez was convicted of knowingly attempting to export and exporting from the United States to Mexico, approximately 2,070 rounds of assorted ammunition. The ammunition included, 30-06 caliber, .270 caliber, .38 special ammo, .22 caliber, and .22 VMR caliber rounds, in violation of 18 U.S.C. § 554. https://www.federalregister.gov/documents/2022/02/17/2022-03416/in-the-matter-of-ramon-aguilar-manriquez-1655-west-monroe-street-apt-21-brownsville-tx-78520-order

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Feb. 18, 2022: Alejandro Valles, 27, of Aguila, Arizona was sentenced to 15 months in prison for smuggling weapons from the United States into Mexico following an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), special agents from Tucson’s Border Enforcement Security Taskforce (BEST). U.S. Customs and Border Protection assisted in this case. Alejandro Valles joins his co-conspirator David Alberto Duarte-Marquez, 21, a Mexican citizen who was previously sentenced to 33 months in prison – both men pleaded guilty to their offenses. https://www.ice.gov/news/releases/tucson-weapons-smugglers-sentenced-prison-following-ice-hsi-investigation

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Feb. 22, 2022: Jorge Orencel, age 65, of Silver Spring, Maryland, was sentenced to six months in federal prison, followed by one year of supervised release, and a $5,000 fine for federal charges of attempting to smuggle goods out of the United States without the required export license. According to his guilty plea, Orencel owned and operated Sumtech, which advertised itself on the Internet as specializing in the distribution of American merchandise, including “high technology laboratory devices,” to South America, Asia, and the Middle East. https://www.justice.gov/usao-md/pr/owner-maryland-export-business-sentenced-federal-prison-attempting-smuggle-items-out-us

FEBRUARY 2022 EXPORT CONTROL REGULATION UPDATES Read More »

JANUARY 2022 EXPORT CONTROL REGULATION UPDATES

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

Editors Notes Regarding Potential Policy Changes Regarding Russia

An astute reader will be aware of the conjecture regarding Russia's potential invasion of the Ukraine and the potential U.S. sanctions on Russia should such an invasion occur, notwithstanding that both countries have been involved in a conflict since Russia's annexation of the Crimea Region of the Ukraine. The potential sanctions would target major Russian banks, savings, and pensions and limit the market for Russia's sovereign debt. The proposed sanctions would also change the Export Administration Regulations (EAR) Direct Product Rule making it difficult for Russia to purchase certain U.S. goods, such as semiconductors, or the machines that make such U.S. goods or for others to sell such goods to them where U.S. manufacturing equipment was used for the production of such items.

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

BIS Adjusts Civil Monetary Penalty For Inflation

Jan. 4, 2022: 87 Fed. Reg. 157: The U.S. Department of Commerce has issued a civil monetary penalty adjustment for inflation resulting in an increase for certain export violations described in the Export Administration Regulations:

50 U.S.C. 4819, Export Controls Act of 2018 (ECRA) violation increases the maximum per violation from $308,901 to $328,121.

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BIS Adds Software Specially Designed to Automate the Analysis of Geospatial Imagery to A Highly Controlled ECCN

Jan. 6, 2022: 85 Fed. Reg. 459: BIS amended the Export Administration Regulations (EAR) to formally add Software Specially Designed to Automate the Analysis of Geospatial Imagery to the ECCN 0Y521 Temporary Export Control Classification Numbers (ECCN) Series as ECCN 0D521. BIS initially added this software to EAR as ECCN 0D521 on January 6, 2020, and extended the control for a year on January 6, 2021. The U.S. Government submitted a proposal for multilateral controls on this software, but due to the pandemic, the Wassenaar Arrangement did not formally convene in 2020 and, therefore, was unable to consider acceptance of the proposal. https://www.federalregister.gov/documents/2020/01/06/2019-27649/addition-of-software-specially-designed-to-automate-the-analysis-of-geospatial-imagery-to-the-export

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Department of Commerce – Census Bureau

Census Adjust Civil Monetary Penalty For Inflation

Jan. 4, 2022: 87 Fed. Reg. 157: The U.S. Department of Commerce has adjusted the civil monetary penalty for inflation for, among other things:

13 U.S.C. 304, Collection of Foreign Trade Statistics (2002), each day's delinquency of a violation; total of not to exceed maximum per violation, from $1,436 to $1,525; maximum per violation, from $14,362 to $15,256; and
13 U.S.C. 305(b), Collection of Foreign Trade Statistics (2002), violation, maximum from $14,362 to $15,256

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

DDTC Name And Address Changes Posted To Website

Jan. 5 through Jan. 31, 2022: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website:

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

Change in Name, Address and Ownership of the following Raytheon companies due to their acquisition by Vertex Aerospace LLC:

Former Legal Name And Address

New Legal Name And Address

Raytheon Technical Services International Company

22265 Pacific Blvd.

Dulles, VA 20166

Vertex Technical Services International Company

555 Industrial Drive South

Madison, MS 39110-9073

Raytheon Professional Services LLC

1717 E. Cityline Dr.

Richardson, TX 75082

Vertex Professional Services LLC

555 Industrial Drive South

Madison, MS 39110-9073

Raytheon Systems Israel Company

1801 Hughes Dr.

Fullerton, CA 92834

Vertex Systems Israel Company

555 Industrial Drive South

Madison, MS 39110-9073

Change in Name from SEAKR Engineering, Inc. to SEAKR Engineering, LLC due to Raytheon Technologies Corporation's acquisition of SEAKR Engineering, Inc.;
Change in Address for K Line Logistics, Ltd from 1-8-16, Nihonbashi Honcho, Chuo-ku, Tokyo, 103-0023 Japan to Harumi Island Triton Square Office Tower X 30th Fl., 1-8-10 Harumi Chuo-ku, Tokyo, 104-6030 Japan.
Change in Name of the following Babcock Aviation Nordic Region entities due to corporate rebranding:

Previous Name	Amended Name
Bond Aviation Group Limited	Babcock Mission Critical Services UK Limited
World Helicopters Norway AS	Babcock Norway AS
Scandinavian Air Ambulance Holding AB	Babcock Scandinavia Holding AB
Avincis Mission Critical Services Scandinavia AB	Babcock Mission Critical Services Scandinavia AB
Scandinavian Air Ambulance Norge AS	Babcock Scandinavian AirAmbulance AS
Scandinavian AirAmbulance AB	Babcock SAA FW AB
Scandinavian Medicopter AB (Sweden)	Babcock Scandinavian AirAmbulance AB
Scandinavian Medicopter AB (Finland)	Babcock Scandinavian AirAmbulance AB Filial I Finland

Change in Name from Altran UK Limited to Capgemini UK plc due to merger;
Change in Name from Peraton Canada Corp. to Arcfield Canada Corp. due to divestiture;
Northrop Grumman Integrated Defence Services Pty Limited and Northrop Grumman M5 Network Security Pty Limited are integrated into Northrop Grumman Australia Pty Limited due to corporate restructuring;
Change in Address for AECOM from 300 South Grand Ave., Los Angeles, CA 90071 to 13344 Noel Rd., #400, Dallas, TX 75204;
Change in names of the following L3 Harris Technologies, Inc., subsidiaries due to corporate rebranding:

Previous Name	Amended Name
Power Paragon, Inc.	L3Harris Maritime & Energy Solutions, Inc
Aerosim Flight Academy	L3Harris Aerosim Academy, Inc.
Applied Defense Solutions, Inc.	L3Harris Applied Defense Solutions, Inc.
Electrodynamics, Inc.	L3Harris Electrodynamics, Inc.
ForceX, Inc.	L3Harris ForceX, Inc.
Interstate Electronics Corporation	L3Harris Interstate Electronics Corporation
L3 Applied Technologies, Inc.	L3Harris Applied Technologies, Inc.
L-3 Communications Flight Capital LLC	L3Harris Technologies Flight Capital LLC
L3 Fuzing and Ordnance Systems, Inc.	L3Harris Fuzing and Ordnance Systems, Inc.
L3 Kigre, Inc.	L3Harris Kigre, Inc.
L3 Latitude, LLC	L3Harris Latitude, LLC
L3 Unmanned Systems, Inc.	L3Harris Unmanned Systems, Inc.
L3 Mustang Technology, L.P.	L3Harris Mustang Technology Group, L.P.
NexGen Communications LLC	L3Harris NexGen Communications LLC

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

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The Department of State Adjusts Civil Monetary Penalty For Inflation

Jan. 10, 2022: 87 Fed. Reg. 107: The Department of State adjusts the civil penalty for export violations for inflation, as follows:

22 CFR 127.10(a)(1)(i)) is adjusted from $1,197,728 to $1,272,251; and
22 CFR 127.10(a)(1)(ii)) is adjusted from $870,856 to $925,041, or five times the amount of the prohibited incentive payment, whichever is greater.

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

OFAC Issues New Belarus, Ukraine-Russia Related And Venezuela Related Frequently Asked Question

Jan. 7, 2022: OFAC published new guidance related to Belarus, Ukraine-Russia, and Venezuela in its Frequently Asked Questions related to the discontinuation of the London Interbank Offered Rate (LIBOR), a benchmark reference rate, OFAC is issuing additional guidance.

The Belarus, Ukraine-/Russia-related, and Venezuela-related sanctions programs prohibit U.S. persons from dealing in certain new debt of persons identified as subject to these prohibitions. In various FAQs, OFAC provides examples of new debt, such as "bonds, loans, extensions of credit, loan guarantees, letters of credit, drafts, bankers acceptances, discount notes or bills, or commercial paper" issued on or after various specified dates. For the Belarus, Ukraine-/Russia-related, and Venezuela-related sanctions programs, OFAC has indicated that certain changes to contractual terms of loans, contracts, or other agreements that were entered into prior to the effective date of the relevant sanctions prohibitions could convert pre-existing debt that was not subject to the sanctions prohibitions into new debt that is subject to the sanctions prohibitions. Loans, contracts, or other agreements that use LIBOR as a reference rate that are modified to replace such benchmark reference rate will not be treated as new debt for OFAC sanctions

purposes, so long as no other material terms of the loan, contract, or agreement are modified.

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/956

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OFAC Issues Venezuela-related General License 51

Jan. 20, 2022: OFAC issues Venezuela-related General License 51, "Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After January 20, 2023." This General License prevents creditors from seizing US-based petroleum refiner CITGO. 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. https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220120_33

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OFAC Issues Ukraine Related Sanctions General License 13Q

Jan. 24, 2022: OFAC issues Ukraine-related sanctions General License 13Q authorizing certain transactions necessary to divest or transfer debt, equity, or other holdings in GAZ Group. https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220124#:~:text=U.S.%20Department%20of%20the%20Treasury,-Search&text=OFAC%20is%20issuing%20Ukraine%2Drelated,Certain%20Activities%20Involving%20GAZ%20Group.%22

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OFAC Issues Ukraine Related Sanctions General License 15K

Jan. 24, 2022: OFAC issues Ukraine related sanctions General License 15K authorizing certain activities involving GAZ Group to include:

Research, design, development, production, modification, upgrade, certification, distribution, and marketing;
Provision or receipt of services, including warranty, maintenance, logistics, storage, shipping, insurance, security, brokerage, legal, banking and financial (including financing and renegotiation of debt), technical and engineering, advertising, and customer services;
Entry into joint ventures, contract manufacturing agreements, supplier contracts, and other new contracts associated with activities authorized by paragraph (a);
Payment and receipt of dividends and other funds owed by or to GAZ Group relating to activities authorized by paragraph (a);
The conduct of financial transactions associated with activities authorized by paragraph (a); and Activities necessary for compliance with paragraph (f)(1)(i), including financial auditing services.

https://home.treasury.gov/system/files/126/ukraine_gl15k.pdf

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OFAC Updated Its Ukraine Related Frequently Asked Questions

Jan. 24, 2022: Due to the issuance of Ukraine-related sanctions General Licenses 13Q and 15K referenced above, OFAC has updated it's Ukraine-related Frequently Asked Questions. https://home.treasury.gov/policy-issues/financial-sanctions/faq/updated/2022-01-24

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Department of the Treasury, Internal Revenue Service (IRS)

IRS Published The Current List Of Countries That Require Or May Require Participation In, Or Cooperation With, An International Boycott

Jan. 3, 2022: 87 Fed. Reg. 145: In accordance with section 999(a)(3) of the Internal Revenue Code of 1986, the U.S. Department of the Treasury has published a current list of countries that require or may require participation in, or cooperation with, an international boycott (within the meaning of section 999(b)(3) of the Internal Revenue Code of 1986):

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

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Department of Treasury, as Chair of the Committee on Foreign Investment in the United States (CFIUS)

CFIUS Identifies New Zealand As An Excepted Foreign State And Excepted Real Estate Foreign State

Jan. 5, 2022, CFIUS identified New Zealand as an eligible foreign state under the "excepted foreign state" and "excepted real estate foreign state" regulations (at 31 C.F.R. §§ 800.218 and 802.214, respectively). CFIUS identified New Zealand as eligible based "on its intelligence-sharing relationship with the United States and its collective defense arrangement and cooperation with the United States." https://home.treasury.gov/policy-issues/international/the-committee-on-foreign-investment-in-the-united-states-cfius/cfius-excepted-foreign-states

CFIUS Publishes Its Determination Related to Australia And Canada Remaining Excepted Foreign States

Jan. 7, 2022: 87 Fed. Reg. 875: CFIUS published the Committee's determination that Australia and Canada have made significant progress toward establishing and 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 excepted real estate foreign state under 31 CFR § 802.214 with respect to Australia and Canada. Therefore, Australia and Canada are and will remain excepted real estate foreign states absent further Committee action and notice in the Federal Register. https://www.federalregister.gov/documents/2022/01/07/2022-00234/determination-regarding-excepted-real-estate-foreign-states

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Department of Justice / Alcohol, Tobacco, Firearms and Explosives

ATF Codifies Certain Provisions Of The Omnibus Consolidated And Emergency Supplemental Appropriations Act, 1999

Jan. 4, 2022: 87 Fed. Reg. 182: The U.S. Department of Justice's Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) has amended 27 CFR Part 478 to codify into regulation certain provisions of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999. This rule amends ATF's regulations to account for the existing statutory requirement that applicants for Federal firearms dealer

Licenses certify that secure gun storage or safety devices will be available at any place where firearms are sold under the license to non-licensed individuals. This certification is already included in the Application for Federal Firearms License, ATF Form 7/7CR ("Form 7/7CR"). The regulation also requires applicants for manufacturer or importer licenses to complete the certification if the licensee will have premises where firearms are sold to non-licensees. Moreover, the regulation requires that the secure gun storage or safety devices be compatible with the firearms offered for sale by the licensee. Finally, it conforms the regulatory definitions of certain terms to the statutory language, including the definition of "antique firearm," which is amended to include certain modern muzzleloading firearms. These changes are effective Feb. 3, 2022.

ATF has also published the "Best Practices Guide for FFLs" as a resource and reference guide about federal gun laws and regulations. The Best Practices Guide encourages FFLs to provide customers with ATF publications to help firearms owners better understand their legal obligations, as well as practical steps they can take to help keep firearms out of the hands of prohibited persons and facilitate safe storage of firearms. Links to ATF publications addressing the following topics are included in the Best Practices Guide: procedures for FFLs to assist unlicensed firearms owners in conducting background checks for private party transfers; compliance with the Youth Handgun Safety Act; records firearms owners should maintain that can assist law enforcement if the owner's firearms are ever lost or stolen; and the legal consequences and public safety dangers of straw purchasing – which involves purchasing a gun for someone who is prohibited by law from possessing one or for someone who does not want his or her name associated with the transaction. https://www.atf.gov/firearms/federal-firearms-licensee-quick-reference-and-best-practices-guide

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U.S. Census Bureau

Census Publishes Interim Final Rule On New Control On Cyber Security Items And A New License Exception "Authorized Cybersecurity Exports" (ACE)

Jan. 7, 2022: On Thursday, October 21, 2021, the Department of Commerce, Bureau of Industry and Security (BIS) published an interim final rule that became effective January 19, 2022. This interim final rule establishes a new control on cyber security items and a new License Exception "Authorized Cybersecurity Exports" (ACE) that authorizes exports of these items to most destinations except in the circumstances described in the rule. As a result of this rule, the following changes will be made to the Automated Export System (AES) in order for exporters and authorized agents to successfully report Electronic Export Information (EEI) in the AES.

Three Export Control Classification Numbers (ECCN): ECCNs 4A005, 4D004 and 4E001.c are added to the AES ECCN reference table.

A new License Code (C64) has been added to the AES: An update has been made to AES to create a new License Code C64 - Authorized Cybersecurity Exports (ACE) that authorizes exports, reexports, and transfers (in-country) of cybersecurity items and certain IP network surveillance products, which are not also controlled in Category 5—Part 2 of the Commerce Control List (CCL) or for Surreptitious Listening (SL) reasons. License Exception ACE allows the export, reexport, and transfer (in-country) of 'cybersecurity items' to most destinations, except to destinations listed in Country Groups E:1 and E:2 of supplement no. 1 to part 740 of the EAR).

AES filers must adhere to the following new reporting requirements when using C64 (ACE) to prevent the return of fatal errors from AES.

Report License Code: C64 Authorized Cybersecurity Exports (ACE)
Allowable ECCN's: The following ECCNs are eligible 4A005, 4D001, 4D004, 4E001, 5A001, 5B001, 5D001, and 5E001 to the extent permitted under part 740 of the EAR and the respective ECCN entry.
Allowable Export Information Codes: All except UG
Allowable Modes of Transportation: All except '70' (Fixed Transport)

https://www.govinfo.gov/content/pkg/FR-2021-10-21/pdf/2021-22774.pdf

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Other

The FBI Investigates A Chinese Investment In An Aircraft Startup Following Allegations Of Improper Technology Transfer To China

Jan. 18, 2022: The Federal Bureau of Investigation (FBI) and a U.S. investment-screening panel are investigating Chinese investment in an aircraft startup following allegations of improper technology transfer to China. Under review is a Chinese government-backed investment company's nearly 47% stake—the largest of any shareholder—in Icon Aircraft Inc., a California-based maker of small recreational, amphibious planes. A group of U.S. shareholders has accused the Chinese firm of hollowing out Icon and moving its technology, which the Americans say has possible military applications, to China. The Committee on Foreign Investment in the U.S. (CIFIUS), an interagency panel that can recommend that the president block or unwind deals on national-security grounds, began its review in late November after the American shareholders urged it to intervene. The FBI has also initiated a separate probe into possible criminal violations related to the deal and the alleged transfer of technology. https://www.wsj.com/articles/chinese-investment-in-u-s-plane-maker-draws-fbi-national-security-reviews-11642507206?mod=hp_lead_pos4

LATEST SANCTIONS FINES & PENALTIES

Sanctions

Department of State

Jan. 21, 2022: 87 Fed Reg 3376: The Department of State has determined that the following three People's Republic of China entities have engaged in activities that require the imposition of measures pursuant to the Arms Export Control Act, as amended, and the Export Administration Act of 1979, as amended:

China Aerospace Science and Technology Corporation (CASC) First Academy, and its sub-units and successors;
China Aerospace Science and Industry Corporation (CASIC) Fourth Academy, and its sub-units and successors; and
Poly Technologies Incorporated (PTI) and its sub-units and successors.

Accordingly, the following sanctions are being imposed on these entities for two years:

Denial of all new individual licenses for the transfer to the sanctioned entities of all items on the U.S. Munitions List and all items the export of which is controlled under the Export Control Reform Act (ECRA) of 2018;
Denial of all U.S. Government contracts with the sanctioned entities; and
Prohibition on the importation into the United States of all products produced by the sanctioned entities.

https://www.federalregister.gov/documents/2022/01/21/2022-01117/imposition-of-missile-proliferation-sanctions-on-three-entities-in-the-peoples-republic-of-china-prc

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

Jan. 12, 2022: BIS has issued Orders Denying Export Privileges of the following four individuals:

Until June 25, 2029 - On June 25, 2019, in the U.S. District Court for the Southern District of Texas, Ernestina Hernandez-Juarez ("Hernandez-Juarez") was convicted of violating 18 U.S.C. § 554(a). Specifically, Hernandez-Juarez was convicted of fraudulently and knowingly exporting and sending or attempting to export and send from the United States to Mexico 40 Level III AR500 steel body armor plates. Hernandez-Juarez was sentenced to 18 months in prison and a $100 assessment. https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1349-e2701/file
Until September 25, 2026 - On September 25, 2019, in the U.S. District Court for the Southern District of Texas, Edna Yaritza Zamarripa ("Edna Zamarripa") was convicted of violating 18 U.S.C. § 554(a). Specifically, Edna Zamarripa was convicted of fraudulently and knowingly exporting and sending 2000 rounds of 7.62 x 39 mm caliber ammunition from the United States to Mexico, in violation of 18 U.S.C. § 554. As a result of her conviction, the Court sentenced Edna Zamarripa to 46 months in prison, three years of supervised release, and a $100 assessment. https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1350-e2702/file

Until September 25, 2024 - On September 25, 2019, in the U.S. District Court for the Southern District of Texas, Consuelo Teresita Zamarripa, a/k/a Consuelo Teresita Ramirez ("Consuelo Zamarripa"), was convicted of violating 18 U.S.C. § 554(a). Specifically, Consuelo Zamarripa was convicted of fraudulently and knowingly exporting and sending 2,000 rounds of 7.62 x 39 mm caliber ammunition from the United States to Mexico, in violation of 18 U.S.C. § 554. As a result of her conviction, the Court sentenced Consuelo Zamarripa to 37 months in prison, three years of supervised release, and a $100 assessment. https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1351-e2703/file
Until October 17, 2024 - On October 17, 2019, in the U.S. District Court for the Southern District of Texas, Irving Aaron Rodriguez-Solis ("Rodriguez-Solis") was convicted of violating 18 U.S.C. § 554(a). Specifically, Rodriguez-Solis was convicted of fraudulently and knowingly exporting and sending or attempting to export and send from the United States to Mexico 3,000 rounds of 7.62x39 caliber ammunition contrary to 22 U.S.C. § 2778 (b)(2) and (c), and Title 22 C.F.R. §§ 121.1, 123.1, 127.1, and 127.3, in violation of 18 U.S.C. § 554(a) and 2. Rodriguez-Solis pled guilty to this offense on August 2, 2019. As a result of his conviction, on October 17, 2019, the Court sentenced Rodriguez-Solis to 30 months in prison and a $100 assessment. https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1352-e2704/file

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Jan. 20, 2022: BIS issued Orders Denying Export Privileges of Khaldoun Hejazi. On March 3, 2020, in the U.S. District Court for the District of Idaho, Khaldoun Hejazi ("Hejazi") was convicted of violating Section 38 of the Arms Export Control Act (22 U.S.C § 2778) ("AECA"). Specifically, Hejazi was convicted of knowingly and willfully conspiring to export, and causing to be exported, firearms from the United States, which were designated as defense articles on the United States Munitions List, without having first obtained the required licenses or written approval from the U.S. Department of State. BIS has denied Hejazi's export privileges under the Export Administration Regulations for a period of five years from the date of Hejazi's conviction. The Office of Exporter Services has also revoked any BIS-issued licenses in which Hejazi had an interest at the time of his conviction. As a result of his conviction, the Court sentenced Hejazi to 30 months in prison, three years of supervised release, a $30,000 criminal fine, and a $100 court assessment. https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1353-e2705/file

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

Jan. 5, 2022: OFAC sanctioned Milorad Dodik (Dodik), who is a member of the Presidency of Bosnia and Herzegovina (BiH), as well as one entity under his control, Alternativna Televizija d.o.o. Banja Luka, in response to Dodik's corrupt activities and continued threats to the stability and territorial integrity of BiH. Dodik has used his official BiH position to accumulate personal wealth through graft, bribery, and other forms of corruption. His divisive ethno-nationalistic rhetoric reflects his efforts to advance these political goals and distract attention from his corrupt activities. Cumulatively, these actions threaten the stability, sovereignty, and territorial integrity of BiH and undermine the Dayton Peace Accords, thereby risking wider regional instability. https://home.treasury.gov/news/press-releases/jy0549

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Jan. 10, 2022: OFAC designates six officials of the Government of Nicaragua pursuant to Executive Order (E.O.) 13851. President Daniel Ortega and Vice President Rosario Murillo were inaugurated following fraudulent national elections orchestrated by their regime in November 2021, further consolidating their control of power to the detriment of the Nicaraguan people. This designation targets officials of the Nicaraguan military, the Nicaraguan Minister of Defense, the Nicaraguan Institute of Telecommunications and Mail (TELCOR), and the state-owned Nicaraguan Mining Company (ENIMINAS). The six officials that have been designated and added to the Specially Designated Nationals (SDN) list are:

Bayardo De Jesus Pulido Ortiz;
Bayardo Ramon Rodriguez Ruiz;
Rosa Adelina Barahona De Rivas;
Celina Delgado Castellon;
Nahima Janett Diaz Flores; and
Ramon Humberto Calderon Vindell.

https://home.treasury.gov/news/press-releases/jy0552

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Jan. 12, 2022: OFAC designated five Democratic People's Republic of Korea (DPRK) individuals and one Russian individual responsible for procuring goods for the DPRK's weapons of mass destruction (WMD) and ballistic missile-related programs. These actions are in line with U.S. efforts to prevent the advancement of the DPRK's WMD and ballistic missile programs and impede attempts by Pyongyang to proliferate related technologies. They also follow the DPRK's six ballistic missile launches since September 2021, each of which violated multiple United Nations Security Council Resolutions (UNSCRs). The individuals designated to the SDN list are:

ALAR, Roman Anatolyevich of Russia;
CHOE, Myong Hyon of North Korea;
KANG, Chol Hak of North Korea;
KIM, Song Hun of North Korea;
O, Yong Ho of North Korea;
PYON, Kwang Chol of North Korea; and
SIM, Kwang Sok of North Korea.

OFAC also added PARSEK LLC of Russia to the SDN list.

https://home.treasury.gov/news/press-releases/jy0555

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Jan. 18, 2022: OFAC added the following three Hizballah-linked financial facilitators and their Lebanon-based travel company to the SDN list:

ALAMAH, Jihad Salim of Lebanon;
DAOUN, Ali Mohamad of Lebanon;
DIAB, Adel of Lebanon; and
DAR AL SALAM FOR TRAVEL & TOURISM of Lebanon.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220118

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Jan. 20, 2022: OFAC sanctioned four individuals engaged in Russian government-directed influence activities to destabilize Ukraine. This is the latest action OFAC has taken to target purveyors of Russian disinformation. The four individuals are:

Taras Romanovych Kozak;
Volodymyr Mykolayovych Oliynyk;
VladimirLeonidovich Sivkovich; and
Oleh Voloshyn.

https://home.treasury.gov/news/press-releases/jy0562

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Jan. 21, 2022: OFAC designated Hizballah-affiliated financial facilitator Adnan Ayad, as well as members of an international network of facilitators and companies connected to him and to Adel Diab,

Adnan Ayad's business partner and fellow Hizballah financier who was designated by OFAC. The three individuals added to the SDN list are:

Adnan Ayad;
Jihad Adnan Ayad; and
Ali Adel Diab.

The ten entities added to the SDN list are:

Al Amir Co. for Engineering, Construction and General Trading SARL;
Golden Group SAL Offshore;
Golden Group Trading SARL;
Hammer and Nail Construction Limited;
Hamidco Investment Limited;
Inshaat Co SARL;
Jammoul and Ayad for Industry and Trade;
Land Metics SARL;
Landmetics SAL Off-Shore; and
Top Fashion Gmbh Konfektionsbügelei.

https://home.treasury.gov/news/press-releases/jy0564

Jan. 31, 2022: OFAC designated 7 Burmese individuals and 2 Burmese entities. The seven individuals added to the SDN list are:

OO, Thida;
OO, Tin;
OO, Tun Tun;
TAY ZA, Htoo Htet;
TAY ZA, Pye Phyo;
THAUNG, Jonathan Myo Kyaw; and
ZA, Tay of Burma and Singapore.

The two entities added to the SDN list are:

Directorate Of Procurement Of The Commander-In-Chief Of Defense Services Army; and
KT Services & Logistics KTSL Company Limited.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220131

Fines and Penalties

Jan. 3, 2022: The U.S. Treasury Department, Office of Foreign Assets Control (OFAC) reached a settlement agreement with a unit of home rental firm Airbnb, Inc. for violations of U.S. sanctions on Cuba. Airbnb Payments, Inc. agreed to remit $91,172.29 to settle its potential civil liability for apparent violations of sanctions against Cuba. The apparent violations included payments related to guests traveling for reasons outside of OFAC's authorized categories, as well as a failure to keep certain required records associated with Cuba-related transactions, the Treasury Department said. Airbnb Payments' apparent violations were voluntarily self-disclosed and were non-egregious. https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220103

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Jan. 6, 2022: Robert Alcantara was charged in a criminal complaint with conspiring to traffic firearms and with making false statements. According to the allegations in the Complaint: From September 2019 up to November 2021, Alcantara and others entered an agreement in which Alcantara purchased the parts for more than 100 "ghost guns," machined the ghost guns at his house in Providence, Rhode Island, and then illegally sold the working and completed ghost guns. On November 20, 2021, law enforcement recovered parts for 45 ghost guns from Alcantara's car. When interviewed by law enforcement, Alcantara falsely told them that he had never sold or transferred ownership of a firearm to any other individual and that he had never transported a firearm to the Dominican Republic. https://www.justice.gov/usao-sdny/pr/rhode-island-man-charged-manhattan-trafficking-ghost-guns

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Jan. 6, 2022: Xiang Haitao, 44, a Chinese national formerly residing in Chesterfield, Missouri, pleaded guilty to conspiracy to commit economic espionage. According to court documents, Xiang conspired to steal a trade secret from Monsanto, an international company based in St. Louis, for the purpose of benefitting a foreign government, namely the People's Republic of China. According to court documents, Xiang was employed by Monsanto and its subsidiary, The Climate Corporation, from 2008 to 2017, where he worked as an imaging scientist. Monsanto and The Climate Corporation developed a digital, online farming software platform that was used by farmers to collect, store and visualize critical agricultural field data and increase and improve agricultural productivity for farmers. A critical component to the platform was a proprietary predictive algorithm referred to as the Nutrient Optimizer. Monsanto and The Climate Corporation considered the Nutrient Optimizer a valuable trade secret and their intellectual property. In June 2017, the day after leaving employment with Monsanto and The Climate Corporation, Xiang attempted to travel to China on a one-way airplane ticket. While he was waiting to board his flight, Federal officials conducted a search of Xiang's person and baggage. Investigators later determined that one of Xiang's electronic devices contained copies of the Nutrient Optimizer. Xiang continued on to China, where he worked for the Chinese Academy of Science's Institute of Soil Science. Xiang was arrested when he returned to the United States. Xiang pleaded guilty to one count of conspiracy to commit economic espionage and is scheduled to be sentenced on April 7. He faces a maximum penalty of 15 years in prison, a potential fine of $5 million, and a term of supervised release of not more than three years. https://www.justice.gov/opa/pr/chinese-national-pleads-guilty-economic-espionage-conspiracy

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Jan. 11, 2022: OFAC Settles with Sojitz (Hong Kong) Limited ("Sojitz HK") for $5,228,298 related to apparent violations of the Iranian Transactions and Sanctions Regulations. Sojitz HK, a Hong Kong, China-based company that engages in offshore trading and cross-border trade financing, has agreed to pay $5,228,298 to settle its potential civil liability for apparent violations of the Iranian Transactions and Sanctions Regulations (ITSR). The apparent violations occurred when Sojitz HK made U.S. dollar payments through U.S. financial institutions for Iranian-origin high-density polyethylene resin (HDPE) from its bank in Hong Kong to the HDPE supplier's banks in Thailand. In doing so, Sojitz HK caused the U.S. financial institutions that processed the funds to engage in and facilitate prohibited financial transactions related to goods of Iranian origin. The settlement amount reflects OFAC's determination that Sojitz HK's apparent violations were non-egregious and voluntarily self-disclosed and accounts for Sojitz HK's remedial response and cooperation with OFAC. https://home.treasury.gov/system/files/126/20220111_sojitz.pdf

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Jan. 13, 2022: Peter Sotis, 57, of Delray Beach, and Emilie Voissem of Sunrise, FL, were convicted in October 2021 following a one-week jury trial in Miami. Sotis was sentenced to 57 months in prison, and Voissem was sentenced to a split sentence of five months in prison and five months of home confinement. According to court documents, the charges stemmed from the defendants' scheme to cause the illegal export of rebreather diving equipment to Libya in August 2016. Rebreathers enable a diver to operate undetected for long periods of time underwater by producing little to no bubbles and by efficiently re-circulating the diver's own breath after replacing its carbon dioxide with oxygen. Because of these enhanced capabilities, rebreathers have dual-use, with both civilian and military applications, and are specifically included on the EAR Commerce Control List, which is the list of dual-use items that are export controlled and licensed by the U.S. Department of Commerce (DOC). Such restricted items require a Commerce Department license if the rebreathers are to be exported to any countries with national security concerns, such as Libya. https://www.justice.gov/opa/pr/south-florida-residents-sentenced-illegally-exporting-controlled-items-libya

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Jan. 14, 2022: A criminal complaint has been unsealed in federal court in Brooklyn charging Kambiz Attar Kashani, a dual citizen of the United States and Iran, with conspiring to illegally export U.S. goods, technology, and services to end-users in Iran, including the Government of Iran, in violation of the International Emergency Economic Powers Act (IEEPA). Kashani was arrested in Chicago, Illinois. The defendant was remanded pending a detention hearing. As alleged, Kashani orchestrated an elaborate scheme to evade U.S. export laws and use the U.S. financial system in procuring U.S. electronic equipment and technology for the Central Bank of Iran, which has been designated by the United States government as acting for or on behalf of terrorist organizations. The defendant allegedly used two United Arab Emirates companies as fronts to procure items from multiple U.S. technology companies, including a company in Brooklyn. https://www.justice.gov/usao-edny/pr/us-citizen-charged-conspiring-provide-electronic-equipment-and-technology-government

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Jan 21, 2022: The Department of State entered into a three-year consent agreement with Torrey Pines Logic, Inc. (TPL) of San Diego, California, and Dr. Leonid B. Volfson (Dr. Volfson) regarding violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR) with a fine of $840,000. TPL and Dr. Volfson voluntarily disclosed portions of the export violations. The AECA and ITAR violations related to unauthorized export of defense articles, unauthorized exports of defense articles to include the People's Republic of China and Lebanon (both prescribed countries pursuant to 22 CFR § 126.1 of the ITAR), engaging in ITAR controlled activities while ineligible, exporting articles without authorization from the Department of State during the CJ review process, making false statements on a CJ request, and failure to maintain and produce records. TPL and Dr. Volfson are debarred from engaging in ITAR controlled activities for 36 months. https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=9a8529c31b5dcd90c6c3866ae54bcb32

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Jan. 27, 2022: Saber Fakih, 46, of the United Kingdom, plead guilty in federal court in the District of Columbia to violations of the International Emergency Economic Powers Act (IEEPA) and Iranian Transactions and Sanctions Regulations. According to his plea, Saber Fakih conspired with Bader Fakih, 41, of Canada, Altaf Faquih, 70, of the United Arab Emirates, and Alireza Taghavi, 46, of Iran, to export and attempt to export an Industrial Microwave System (IMS) and counter-drone system from the United States to Iran, without first obtaining the requisite license from the Department of Treasury's Office of Foreign Assets Control (OFAC). Fakih pleaded guilty to count two of the indictment.

In addition, a related indictment was unsealed in the District of Columbia, charging Iranian national Jalal Rohollahnejad, 44, with smuggling, wire fraud, and related offenses arising from the same scheme. Rohollahnejad was previously added to the Department of Commerce's Bureau of Industry and Security Entity List in March 2020 for acting contrary to U.S. national security or foreign policy interests by procuring goods on behalf of a Specially Designated National (SDN). https://www.justice.gov/usao-dc/pr/indictment-and-guilty-plea-entered-iranian-export-case

JANUARY 2022 EXPORT CONTROL REGULATION UPDATES Read More »

DECEMBER 2021 EXPORT CONTROL REGULATION UPDATES

This newsletter is a listing of the latest changes in export control regulations through December 31, 2021. 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 Signs The Uyghur Forced Labor Prevention Act Into Law

December 23, 2021: President Biden signed the Uyghur Forced Labor Prevention Act into law, which blocks imports from China's Xinjiang region unless businesses can prove the items were made without forced labor. The new law is the latest in a series of attempts by the U.S to get tough with China over its alleged systemic and widespread abuse of ethnic and religious minorities in its western region, especially Xinjiang's predominantly Muslim Uyghurs. It requires U.S. government agencies to expand their monitoring of the use of forced labor by China's ethnic minorities. Crucially, it creates a presumption that goods coming from Xinjiang are made with forced labor. Businesses will have to prove that forced labor, including by workers transferred from Xinjiang, were not used in manufacturing the product before it will be allowed into the U.S. The House and Senate each passed the measure with overwhelming support from Democrats and Republicans. https://federalnewsnetwork.com/government-news/2021/12/biden-signs-bills-on-forced-labor-in-china-als-research/

Please contact your consultant to discuss steps you should take if doing procurement business pursuant to US Government contracts with companies in Xinjian, China.

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

BIS Amends The EAR Policy Related To Cambodia

December 9, 2021: 86 Fed. Reg. 70015: In response to deepening Chinese military influence in Cambodia, which undermines and threatens regional security, as well as growing corruption and human rights abuses by the Government of Cambodia, in this final rule, the Bureau of Industry and Security (BIS) amends the Export

Administration Regulations (EAR) to apply more restrictive treatment to exports and reexports to and transfers within Cambodia of items subject to the EAR. The amendment adds Cambodia to:

(1) The list of countries subject to the National Security licensing policy in § 742.4(b)(7) (Review to determine the risk of diversion to a military end-user or military end-use);

(2) the list of countries subject to military end-use and end-user controls in § 744.21;

(3) the list of countries subject to military intelligence end-use and end-user controls in § 744.22; and

(4) the list of countries subject to a U.S. arms embargo under Country Group D:5.

BIS revised Country Group D to add Cambodia to Country Group D:5 is consistent with the Department of State's amendment adding Cambodia to ITAR § 126.1 on December 9, 2021. https://www.federalregister.gov/documents/2021/12/09/2021-26633/revision-of-controls-for-cambodia-under-the-export-administration-regulations

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Department of Commerce – Census Bureau

Census Bureau Proposes To Add A Conditional Data Element To Electronic Export Information (EEI) Filings

December 15, 2021: 86 Fed. Reg. 71187: The Census Bureau's Economic Management Division (EMD) is announcing the publication of a Notice of Proposed Rulemaking (NPRM) seeking public comments on its consideration to add a conditional data element, country of origin when the foreign origin is selected in the Foreign/Domestic Origin Indicator field in the Automated Export System (AES). The current Foreign/Domestic Origin Indicator field in the AES, independent of other data, creates significant data challenges and limitations in using the trade statistics because the indicator does not capture the country of origin. As a result, the foreign trade statistics do not provide sufficient insight to identify the gaps in domestic product and supply; evaluate supply chains; and address trade imbalances. Therefore, the Census Bureau is requesting comments to assess the potential impacts of this regulatory change as well as other remedial changes made by this rule. The NPRM can be found in its entirety at https://www.federalregister.gov/documents/2021/12/15/2021-26874/foreign-trade-regulations-ftr-new-filing-requirement-and-clarifications-to-current-requirements

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

DDTC Amends The ITAR Adding Cambodia As A Proscribed Destination

December 9, 2021: 86 Fed. Reg. 70053: The Department of State issued a final rule to amend the International Traffic in Arms Regulations (ITAR) to add Cambodia to 22 CFR § 126.1(o), and to the list of countries for which it is the policy of the United States to deny licenses and other approvals for exports and imports of defense articles and defense services. It is now the policy of the United States to deny all licenses and other approvals to export and import defense articles and defense services destined for or originating in Cambodia, except as otherwise provided herein. https://www.federalregister.gov/documents/2021/12/09/2021-26590/international-traffic-in-arms-regulations-addition-of-cambodia-to-list-of-proscribed-countries

DDTC Name And Address Changes Posted To Website

Dec. 8, 9, 27, 28 and 29, 2021: 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 Altran Italia S.p.A. to Capgemini Italia S.p.A. due to corporate rebranding;
Change in Address for Dillon Aero Inc., from 8009 East Dillon's Way, Scottsdale, AZ 85260 to 21615 N 7th Avenue, Phoenix, AZ 85027;
Change in Name from TMD Technologies Limited to CPI TMD Technologies Limited due to Communications & Power Industries' acquisition of TMD Technologies Limited;
Northrop Grumman Integrated Defence Services Pty Limited and Northrop Grumman M5 Network Security Pty Limited were integrated into Northrop Grumman Australia Pty Limited due to corporate reorganization; and
Change in Name from LTK 400 Operadores de Logistica Integral S.L.U. to Rhenus LTK Warehousing Solutions S.L.U. due to acquisition by Rhenus Logistics.

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

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

OFAC Issues General Licenses 17, 18 And 19 For Afghanistan

December 22, 2021: OFAC issued General Licenses 17, 18, and 19 for Afghanistan. General License 17: authorizes all transactions and activities involving the Taliban or the Haqqani Network that are for the conduct of the official business of the United States Government by employees, grantees, or contractors thereof, subject to certain conditions. General License 18: authorizes all transactions and activities involving the Taliban or the Haqqani Network that are for the conduct of the official business of certain international organizations and other international entities by employees, grantees, or contractors thereof, subject to certain conditions. General License 19: authorizes all transactions and activities involving the Taliban or the Haqqani Network that are ordinarily incident and necessary to the following activities by nongovernmental organizations (NGOs), subject to certain conditions: humanitarian projects to meet basic human needs; activities to support rule of law, citizen participation, government accountability, and transparency, human rights and fundamental freedoms, access to information, and civil society development projects; education; non-commercial development projects directly benefitting the Afghan people; and environmental and natural resource protection. https://home.treasury.gov/news/press-releases/jy0545

Editor's Note: General Licenses do not override ITAR or EAR obligations that may separately exist for contractors.

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OFAC Amends The Weapons of Mass Destruction Trade Control Regulations

December 27, 2021: 86 Fed. Reg. 73105: OFAC has amended the Weapons of Mass Destruction Trade Control Regulations at 31 C.F.R. Part 539 to add a June 28, 2005, Executive Order (E.O. 13382, Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters) as an authority, remove the appendix to the part, and modify three definitions referencing the appendix. https://www.federalregister.gov/documents/2021/12/27/2021-27868/weapons-of-mass-destruction-trade-control-regulations

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Department of Justice / Alcohol, Tobacco, Firearms, and Explosives (BATFE)

ATF Publishes Revised Explosives List

December 23, 2021: 86 Fed. Reg. 72996: The U.S. Department of Justice's Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) published a revised list of explosives determined to be within the coverage of 18 U.S.C. § 841 et seq. The list covers not only explosives but also blasting agents and detonators, all of which are defined as "explosive materials" in 18 U.S.C. § 841(c). This list supersedes the List of Explosive Materials published in at 85 Fed. Reg. 83999 (Dec. 23, 2020)). The 2021 List of Explosive Materials is a comprehensive list but is not all-inclusive. Accordingly, the fact that an explosive material is not on the annual list does not mean that it is not within the coverage of the law if it otherwise meets the statutory definition of "explosives" in 18 U.S.C. § 841. Subject to limited exceptions in 18 U.S.C. § 845 and 27 C.F.R. § 555.141, only Federal explosives licensees and permittees may possess and use explosive materials, including those on the annual list. https://www.govinfo.gov/content/pkg/FR-2021-12-23/html/2021-27852.htm

Editor's Note: Importers of explosives should review the revised list to confirm if the explosives they import have been added to the revised list or deleted from the revised list.

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Other

The Governments Of The United States, Australia, Denmark And Norway Pledge To Prevent The Proliferation Of Software And Other Technologies Used To Enable Serious Human Rights Abuses

December 10, 2021: The Governments of the United States, Australia, Denmark, and Norway issued a joint statement to commit to working to establish a voluntary, nonbinding written code of conduct around which like-minded states could politically pledge to use export control tools to prevent the proliferation of software and other technologies used to enable serious human rights abuses. The Governments also agreed to consult with industry and academia in regards to these efforts. https://www.whitehouse.gov/briefing-room/statements-releases/2021/12/10/joint-statement-on-the-export-controls-and-human-rights-initiative/.

China Publishes White Paper Titled "China's Export Controls"

December 29, 2021: The State Council Information Office of the People's Republic of China published a white paper titled "China's Export Controls" to give a full picture of related policies and help the international community better understand its position. The full text of the White Paper can be found at: https://news.cgtn.com/news/files/Full-Text-China's-Export-Controls.pdf and https://news.cgtn.com/news/2021-12-29/China-releases-white-paper-on-export-control-16nzXH1BeoM/index.html

LATEST SANCTIONS FINES & PENALTIES

Sanctions

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

December 3, 2021: 86 Fed. Reg. 69003 – 69008: BIS has issued orders denying export privileges of the following six individuals:

Hector Mario Delgado-Lerma, until May 14, 2026;
Marco Antonio Sanchez, until June 16, 2025;
Nereyda Carrillo-Montes, until April 24, 2024;
Ali Kourani, until December 3, 2029;
Douglas Glover, until Until April 8, 2029; and
Nicky Lee Quiroz, until September 19, 2029.

https://www.federalregister.gov/documents/2021/12/06/2021-26356/order-denying-export-privileges-in-the-matter-of-ali-kourani-inmate-number-79196-054-usp-marion-us

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

December 2, 2021: OFAC has determined, in consultation with the Department of State, that the Ministry of Finance of the Republic of Belarus and the Development Bank of the Republic of Belarus are political subdivisions, agencies, or instrumentalities of the Government of Belarus, and that the following activities by U.S. persons or within the United States are prohibited, except to the extent provided by law or unless licensed or otherwise authorized by OFAC: all transactions in, provision of financing for, and other dealings in new debt with a maturity of greater than 90 days issued on or after December 2, 2021, by the Ministry of Finance of the Republic of Belarus or the Development Bank of the Republic of Belarus. All other activities with the Ministry of Finance of the Republic of Belarus and the Development Bank of the Republic of Belarus, or involving their property or interests in property, are permitted, provided such activities are not otherwise prohibited pursuant to the Order, any Executive order issued pursuant to the national emergency declared in Executive Order 13405 of June 16, 2006, "Blocking Property of Certain Persons Undermining Democratic Processes or Institutions in Belarus," 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 contained in this Directive; and (2) any conspiracy formed to violate any of the prohibitions in this Directive.

OFAC has issued Belarus General License 5, "Authorizing the Wind Down of Transactions Involving Open Joint Stock Company Belarusian Potash Company or Agrorozkvit LLC."

December 2, 2021: OFAC has published ten new Frequently Asked Questions regarding the Belarus sanctions (FAQ 939, FAQ 940, FAQ 941, FAQ 942, FAQ 943, FAQ 944, FAQ 945, FAQ 946, FAQ 947, and FAQ 948), and updated Frequently Asked Question 918.

OFAC updated the SDN list regarding changes to the Belarus sanctions. https://home.treasury.gov/news/press-releases/jy0512

OFAC Adds 15 Individuals From Iran, Syria And Uganda To Its Specially Designated Nationals List

December 7, 2021: OFAC added 15 individuals from Iran, Syria, and Uganda to its Specially Designated Nationals (SDN) list on allegations of "serious human rights abuse and repressive acts targeting innocent civilians, political opponents, and peaceful protestors." The 15 individuals are:

AL-HASOURI, Muhammad Yousef, of Syria	KANDIHO, Abel, of Uganda	KHODADADI, Soghra, of Iran
AL-HASSAN, Kamal, of Syria	KARAMI, Hassan, of Iran	SAFDARI, Masoud, of Iran
AZAMI, Seyed Reza Mousavi, of Iran	KARAMI, Mohammad, of Iran	SALAMEH, Adeeb Namer, of Syria
EBRAHIMI, Mohsen, of Iran	KHADOUR, Tawfiq Muhammad, of Syria	VASEGHI, Leila, of Iran
HEMMATIAN, Ali, of Iran	KHALIL, Qahtan, of Syria	SOLEIMANI, Gholamreza, of Iran

OFAC also designated four entities the Department of State identified as "responsible for certain gross violations of human rights in Iran." The four entities are:

IRAN'S COUNTER-TERROR SPECIAL FORCES (a.k.a. IRANIAN SPECIAL POLICE FORCES; a.k.a. NIROO-YE VIZHE PASDAR-E VELAYAT; a.k.a. SUPREME LEADER'S GUARDIAN SPECIAL FORCES; a.k.a. "NOPO"; a.k.a. "PROVINCIAL SPECIAL FORCES"; a.k.a. "SPECIAL COUNTER-TERRORISM FORCE")

ISFAHAN CENTRAL PRISON (a.k.a. DASTGERD PRISON; a.k.a. ESFAHAN PRISON)

SPECIAL UNITS OF IRAN'S LAW ENFORCEMENT FORCES (a.k.a. IRANIAN POLICE SPECIAL UNITS; a.k.a. LEF SPECIAL UNITS; a.k.a. NAJA SPECIAL UNITS; a.k.a. YEGAN-E VIZHE)

ZAHEDAN PRISON

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20211207.

OFAC Updates SDN List Targeting 16 Individuals And 24 Entities Across Several Countries In Europe And The Western Hemisphere

December 8, 2021: OFAC Updates SDN List targeting 16 individuals and 24 entities across several countries in Europe and the Western Hemisphere pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act, and targets perpetrators of corruption and serious human rights abuse. The individuals and entities are:

Zvonko Veselinovic	Sinisa Nedeljkovic	Nautikacentar D. O. O. of Croatia	Sinisa Nedeljkovic B.I., P.T.P. Metal of Kosovo
Milan Rajko Radojcic	Radule Stevic	DOO Rad 028 Zvecan of Serbia	P.P.Robna Kuca Metal B.I. of Kosovo
Zeljko Bojic	Inkop DOO Cuprija (Inkop) of Serbia	Radule Stevic B.I., P.T.P. Rad of Serbia	Farma Izvori B.I. of Kosovo
Marko Rosic	Civija Komerc of Serbia	Rad D.O.O. of Kosovo	Robna Kuca Metal D.O.O. of Kosovo
Andrija Zheljko Bojic	S.Z.T.R. Prizma B.I. of Kosovo	Markom Metal Commerce DOO Zvecan of Serbia	Sinisa Nedeljkovic I.B. of Kosovo
Srdjan Milivoje Vulovic	Ferari Preduzeee Za Usluge I Promet Polovnim Vozilima SH.A of Kosovo	Metal-Robna Kuca of Serbia	Radovan Radic B.I. of Kosovo
Milan Mihajlovic	Betonjerka DOO Aleksinac of Serbia	DOO MM Kom Inter Blue Donji Jasenovik of Serbia	Osiris Luna Meza
Miljan Radisavljevic	Dolly Bell DOO Beograd-Novi Beograd of Serbia	P.P. Babudovac B.I. of Kosovo	Carlos Amilcar Marroquin Chica
Miljojko Radisavljevic	Novi Pazar-Put D.O.O. Novi Pazar of Serbia	DOO Babudovac Brnjak of Serbia	Alma Yanira Meza Olivares
Radovan Radic	Zarko Veselinovic B.I., S.T.R. Kristal of Kosovo	Garac Inzenjering OOD of Bulgaria	Zharko Jovan Veselinovic

https://home.treasury.gov/news/press-releases/jy0519

December 9, 2021: OFAC sanctions two individuals in El Salvador and Guatemala pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of corruption and serious human rights abuse. The Government officials were sanctioned related to suspicious procurement, directing suspicious pandemic-related purchases, reselling personal protective equipment and other medical aid at a significant markup and for personal gain, and/or for favoring companies where family members were officers. https://home.treasury.gov/news/press-releases/jy0523 and https://www.mondaq.com/unitedstates/export-controls-trade-investment-sanctions/1141814/ofac-sanctions-individuals-for-corruption-related-to-covid-19-procurement

December 9, 2021: OFAC designates fifteen individuals and entities across several countries in Central America, Africa, and Europe. Today's actions are taken pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of corruption and serious human rights abuse. The individuals and entities are:

Martha Carolina Recinos De Bernal	Cochan Holdings LLC	Andriy Portnov Fund
Manuel Victor Martinez Olivet	Geni SARL	Leopoldino Fragoso do Nascimento
ARC Resources Corporation Limited	Geni Novas Tecnologias S.A.	Manuel Helder Vieira Dias Junior
Winners Construction Company Limited (Winners)	Baia Consulting Limited	Cochan S.A.
Prince Yormie Johnson	Andriy Portnov	Luisa De Fatima Giovetty

https://home.treasury.gov/news/press-releases/jy0523

OFAC Issues General License 16 For Afghanistan

December 10, 2021: OFAC issued General License 16 for Afghanistan, which authorizes non-commercial, personal remittances to Afghanistan, including through Afghan depository institutions. Noncommercial, personal remittances do not include charitable donations of funds to or for the benefit of an entity or funds transfers for use in supporting or operating a business, including a family-owned business. https://home.treasury.gov/system/files/126/ct_gl16_1.pdf.

OFAC Adds Sensetime Group Limited Of Hong Kong To The Non-SDN List

December 10, 2021: Effective February 8, 2022, OFAC is adding Sensetime Group Limited of Hong Kong to the Non-SDN List for Chinese Military-Industrial Complex Companies per Executive Order 13959. https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20211210.

OFAC Designates Ali Darassa (Darassa) Of The Central African Republic

December 17, 2021, 86 Fed. Reg. 71557-71568: OFAC designated Ali Darassa (Darassa) for serious human rights abuses stemming from his leadership of the Central African Republic (CAR) based militia group, Union for Peace in the Central African Republic (UPC) pursuant to Executive Order (E.O.) 1366. https://www.marketscreener.com/news/latest/Treasury-Sanctions-UPC-Militia-Leader-in-Central-African-Republic-for-Serious-Human-Rights-Abuse--37362352/ and https://www.federalregister.gov/documents/2021/12/17/2021-27406/addition-of-certain-entities-to-the-entity-list-and-revision-of-an-entry-on-the-entity-list

OFAC Designates Members Of A Brazil-based Network Of Al-Qa'ida-Affiliated Individuals And Their Companies

December 17, 2021, 86 Fed. Reg. 71557-71568: OFAC designated members of a Brazil-based network of al-Qa'ida-affiliated individuals and their companies for providing support to the terrorist group. OFAC targeted three individuals and two entities, including al-Qa'ida operative in Brazil Haytham Ahmad Shukri Ahmad Al-Maghrabi (Al-Maghrabi), as Specially Designated Global Terrorists pursuant to Executive Order (E.O.) 13224, as amended. https://www.federalregister.gov/documents/2021/12/17/2021-27406/addition-of-certain-entities-to-the-entity-list-and-revision-of-an-entry-on-the-entity-list and https://www.newsamericasnow.com/latin-america-brazil-al-qaida-affiliated-individuals-designated-global-terrorists/

OFAC Identifies Eight Chinese Technology Firms Pursuant To Executive Order (E.O.) 13959, As Amended By E.O. 14032

December 16, 2021: OFAC identified eight Chinese technology firms pursuant to Executive Order (E.O.) 13959, as amended by E.O. 14032. These eight entities actively support the biometric surveillance and tracking of ethnic and religious minorities in China, particularly the predominantly Muslim Uyghur minority in Xinjiang. As a result of this action, U.S. persons will be prohibited from purchasing or selling certain publicly traded securities connected with these entities, as described in E.O. 13959, as amended. The entities identified today are:

Cloudwalk Technology Co., Ltd.;
Dawning Information Industry Co., Ltd.;
Leon Technology Company Limited;
Megvii Technology Limited;
Netposa Technologies Limited;
SZ DJI Technology Co., Ltd.;
Xiamen Meiya Pico Information Co., Ltd.; and
Yitu Limited.

https://home.treasury.gov/news/press-releases/jy0538

Fines and Penalties

December 8, 2021: OFAC settles with an unnamed individual for $133,860 for apparent violations of Iranian Transactions and Sanctions Regulations. A natural U.S. person ("U.S. Person-1") has agreed to pay $133,860 to settle their potential civil liability for apparent violations of the Iranian Transactions and Sanctions Regulations. The apparent violations were committed between February 2016 and March 2016 when the U.S. Person accepted payment in the United States on behalf of an Iran-based company selling Iranian-origin cement clinker to another company for a project in a third country. https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20211208_33

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December 13, 2021: Shawn Sabi, 53, of Atlanta, was sentenced to 19 months in prison after pleading guilty to Submitting False or Misleading Export Information for attempting to conceal firearms in overseas shipments of household goods. Sabi also was ordered to serve two years of supervised release after completion of his prison sentence. https://www.justice.gov/usao-sdga/pr/atlanta-man-sentenced-prison-attempting-conceal-firearms-overseas-shipment-household

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December 15, 2021: Jose Rafael Vasquez, a 64-year-old Dallas resident been ordered to federal prison for attempting to export firearms, firearm magazines, and thousands of rounds of ammunition to Mexico. Mr. Vasquez was sentenced to 63 months in federal prison and a three-year term of supervised release. https://www.justice.gov/usao-sdtx/pr/texan-sentenced-attempting-export-weapons

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December 16, 2021: A South Dakota man was arrested on criminal charges related to his alleged espionage attempts. John Murray Rowe Jr., 63, of Lead, allegedly attempted to provide classified national defense information to the Russian government. Rowe was employed for nearly 40 years as a test engineer for multiple cleared defense contractors. In connection with his employment, Rowe held various national security clearances from SECRET to TOP SECRET//SCI (Sensitive Compartmented Information) and worked on matters relating to the U.S. Air Force's aerospace technology, among other things. After committing a number of security violations and revealing a fervent interest in Russian affairs, including whether he could obtain a security clearance from the Russian government, Rowe was identified as a potential insider threat and terminated from employment. https://www.justice.gov/opa/pr/former-defense-contractor-arrested-attempted-espionage

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December 17, 2021: Jorge Orencel, age 65, of Silver Spring, Maryland, pleaded guilty to federal charges of attempting to smuggle ionization chambers and fission chambers for use in gas-filled nuclear radiation detectors out of the United States without the required export license. Orencel owned and operated Sumtech, an export business located in Fulton, Maryland. Orencel faces a maximum sentence of 10 years in prison for attempted smuggling of the referenced goods. https://www.justice.gov/usao-md/pr/owner-maryland-export-business-pleads-guilty-federal-charges-attempting-smuggle-items-out

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December 21, 2021: Ye Sang "Ivy" Wang, a former U.S. Navy sailor who was a Logistics Specialist First Class assigned to the Naval Special Warfare Command, was sentenced to 30 months in custody and ordered to pay a $20,000 fine for conspiring with her husband and co-defendant, Shaohua "Eric" Wang, to illegally export sensitive military equipment to China for profit. Eric Wang pleaded guilty on September 26, 2019, admitting that he illegally sold export-controlled U.S. military equipment to China through his online business and that he enlisted his wife to use her Navy position to purchase the equipment for resale. https://www.justice.gov/usao-sdca/pr/former-us-navy-sailor-sentenced-25-years-selling-export-controlled-military-equipment

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December 23, 2021: OFAC reached a $115,000 settlement with TD Bank NA involving apparent violations of OFAC's sanctions against individuals and North Korea. The apparent violations were voluntarily self-disclosed and were non-egregious. In one case, TD Bank NA processed transactions and maintained accounts on behalf of employees of the North Korean mission to the United Nations without a license from OFAC. In the second case, the bank maintained accounts for a U.S. resident who was listed on OFAC's list of "Specially Designated Nationals and Blocked Persons. https://www.reuters.com/business/finance/us-treasury-dept-says-settlement-reached-over-td-banks-sanctions-violations-2021-12-23/

DECEMBER 2021 EXPORT CONTROL REGULATION UPDATES Read More »

NOVEMBER 2021 EXPORT CONTROL REGULATION UPDATES

This newsletter is a listing of the latest changes in export control regulations through November 30, 2021. 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

Biden Administration Proposal to Revise The Conventional Arms Transfer Policy

Nov. 29, 2021, The Biden administration is currently revising its conventional arms transfer policy. This policy provides guidance on how the United States approaches weapons sales. The administration is reportedly considering placing a greater emphasis on human rights in the policy’s text and joining and ratifying the Arms Trade Treaty. A key component of the revision to U.S. industry and exporters is the proposal to shift the regulation of firearms and munition sales back to the State Department and the International Traffic in Arms Regulations (ITAR). These revisions, if implemented, would give greater emphasis to human rights considerations when making arms sales, reduce sales of small weapons to governments that may use them on domestic populations, and affirm U.S. support for the Arms Trade Treaty. https://warontherocks.com/2021/11/bidens-conventional-arms-transfer-policy-review-could-be-a-turning-point/

(* Author: Jordan Cohen))

Department of Commerce – Bureau of Industry and Security

BIS Adds Four Entities In Israel, Russia And Singapore To The Entity List

Nov. 4, 2021 – 86 Fed. Reg. 60759: The Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR, 15 CFR Parts 730-774) by adding 4 entities in Israel, Russia, and Singapore to the Entity List (EAR Part 744, Supp. No. 4). The entities are:

Israel

Candiru and
NSO Group;

Russia

Positive Technologies; and

Singapore

Computer Security Initiative Consultancy PTE. LTD.

A license requirement with license review policy of presumption of denial and no license exceptions will now apply to exports, reexports, or in-country transfers to these persons of all items subject to the EAR.

The Israeli entities were added to the Entity List based on evidence that they had developed and supplied spyware to foreign governments that used it to maliciously target government officials, journalists, business people, activists, academics, and embassy workers; the Russian and Singaporean entities were added based on a determination that they trafficked in cyber tools used to gain unauthorized access to information systems, threatening the privacy and security of individuals and organizations worldwide. BIS noted that this effort to combat cyber threats and mitigate unlawful surveillance followed the rule released in October (86 Fed. Reg. 58205, Oct. 21, 2021) establishing controls on exports, reexports, or in-country transfers of certain items that can be used for malicious cyber activities. (See October 2021 Regulatory Update.)

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BIS Publishes FAQs On The Export Of Cybersecurity Items

Nov. 12, 2021: BIS published 29 very detailed FAQs on the export of cybersecurity items, listed under three categories titled (1) “’Cybersecurity Items’ and the Export Administration Regulations (EAR)” (13 questions); (2) “’Vulnerability Disclosure’ and ‘Cyber Incident Response’” (7 questions); and (3) “Penetration testing tools and other ‘cybersecurity items’ overlap with Category 5 - Part 2 ‘encryption items’” (9 questions). These “EAR ‘cyber rule’ FAQs” are in a 16-page document on the BIS website at https://www.bis.doc.gov/index.php/documents/pdfs/2872-cyber-tools-le-ace-faqs-final-version-nov-2021/file.

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BIS Adds Twenty-Seven Entities In The People’s Republic of China, Japan, Pakistan And Singapore To The Entity List

Nov. 26, 2021 – 86 Fed. Reg. 67317: BIS added 27 entities in the People’s Republic of China (PRC), Japan, Pakistan, and Singapore to the Entity List (Supplement No. 4 to EAR Part 744) because they had acted contrary to the national security or foreign policy interests of the U.S. In the same rule, BIS also added one entity in Russia to the Military End-User list (MEU list, Supplement No. 7 to EAR Part 744). The entities added to the Entity List are:

China

Corad Technology (Shenzhen) Ltd.
Hangzhou Zhongke Microelectronics Co., Ltd.
Hefei National Laboratory for Physical Sciences at Microscale
Hunan Goke Microelectronics
New H3C Semiconductor Technologies Co., Ltd.
Peaktek Company Ltd.
Poly Asia Pacific Ltd., (PAPL)
QuantumCTek Co., Ltd.
Shaanxi Zhi En Electromechanical Technology Co., Ltd.
Shanghai QuantumCTek Co., Ltd.
Xi’an Aerospace Huaxun Technology
Yunchip Microelectronics

Japan

Corad Technology Japan K.K.

Pakistan

Al-Qertas
Asay Trade & Supplies
Broad Engineering (Pakistan)
Global Tech Engineers
Jade Machinery Pvt. Ltd.
Jiuding Refrigeration & Air-conditioning Equipment Co (Pvt) Ltd.
K-SOFT Enterprises
Muhammad Ashraf
Muhammad Farrukh
Prime Tech
Q&N Traders
Seljuk Traders (SMC-Private) Limited
U.H.L. Company

Singapore

Corad Technology Pte Ltd.

Russia

Moscow Institute of Physics and Technology (added to MEU List only)

The Federal Register announcement provides the specific reasons for which each of the 27 entities was added to the Entity List (or the MEU List). A license requirement with license review policy of presumption of denial will now apply to all exports, reexports, or in-country transfers of all items subject to the EAR to all the entities added to the Entity List, and no license exceptions will be available.

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BIS Proposes Amendments To The Interim Final Rule On Securing The Information And Communications Technology And Services (ICTS) Supply Chain (Supply Chain Rule)

Nov. 26, 2021 – 86 Fed. Reg. 67379: The Commerce Department proposed to amend the interim final rule on Securing the Information and Communications Technology and Services (ICTS) Supply Chain (Supply Chain Rule) that it published on January 19, 2021 (86 Fed. Reg. 4909 – see January and March 2021 Regulatory Updates). The proposal would revise the definition of ICTS to expressly include “connected software applications” and would provide for additional criteria that the Secretary of Commerce could consider when determining whether ICTS transactions (as defined in the Supply Chain Rule) that involve connected software applications present an undue or unacceptable risk. The notice solicits the public’s

views on specific questions about the additional criteria for connected software applications. The deadline for comments is December 27, 2021.

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BIS Requests Public Comments Regarding Areas And Priorities For U.S. And European Union (EU) Export Control Cooperation

Nov. 30, 2021 – 86 Fed. Reg. 67904: BIS requested public comments regarding areas and priorities for U.S. and European Union (EU) export control cooperation to help inform the work of the U.S–EU Trade and Technology Council (TTC) Export Control Working Group. Comments should address ways in which existing U.S. and/or EU dual-use export control policies and practices may be made more transparent, more efficient, and effective, more convergent, and fit for today’s challenges, in particular with regard to the control of emerging technologies. The deadline for comments is January 14, 2022.

Department of State

DDTC Name And Address Changes Posted To Website

Nov. 16 and 26, 2021: 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 ATI Engineering Services, LLC; and
Change in Address for Parsons Government Services, Inc.

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

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DDTC Adds Ethiopia To 22 CFR § 126.1(n) Of The ITAR And Updates The Entry For Eritrea In § 126.1(h)

Nov. 1, 2021 – 86 Fed. Reg. 60165: DDTC amended the International Traffic in Arms Regulations (ITAR, 22 CFR Parts 120-130) to add Ethiopia to Sec. 126.1(n) and to update the entry for Eritrea in Sec. 126.1(h) to codify the U.S. policy of denial that applies to licenses or other approvals for exports of defense articles or defense services destined to or for the armed forces, police, intelligence, or other internal security forces of either Ethiopia or Eritrea. This final rule became effective on November 1, 2021.

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DDTC Publishes Six FAQS Relating To Debarments, Rescissions, And Reinstatement And Eleven FAQs Relating To Violations And Disclosures

Nov. 19 and 22, 2021: DDTC published six FAQs relating to Debarments, Rescissions, and Reinstatement and eleven FAQs relating to Violations and Disclosures. The FAQs regarding Debarments, Rescissions, and Reinstatement focus on U.S. person status of DACA residents, how to determine if the party you are dealing with is a debarred party, is there an exception so that a statutorily or administratively debarred party can participate in an ITAR-controlled activity, what does DDTC’s debarred parties list mean, is the rescission of statutory debarment under ITAR § 127.7(b) the same as the reinstatement of export privileges and duration administrative debarment or statutory debarment. The FAQs regarding Violations and Disclosures focus on how to respond to DDTC questions regarding a violation, are you required to voluntarily disclose a violation, how does DDTC assign voluntary disclosure case #s, how much time do you have to submit a voluntary disclosure, when should you submit a voluntary disclosure, extension request, how to obtain the status of the review of a voluntary disclosure, who can submit a voluntary disclosure, and do you need to wait for the disclosure to close before you submit a new export license.

All these FAQs are accessible from https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_faq_landing.

Department of the Treasury

OFAC Publishes New Syria FAQ 934 Regarding Stabilization And Early Recovery-Related Activities And Transactions Involving Syria

Nov. 8, 2021: The Treasury Department Office of Foreign Assets Control (OFAC) published new Syria FAQ 934, discussing the scope of the authority granted by the Syrian Sanctions Regulations (SySR, 31 CFR Part 542) to the United Nations and the U.S. Government and their contractors and grantees, to conduct stabilization and early recovery-related activities and transactions involving Syria. FAQ 934 further references Syria FAQ 884 regarding the exposure to U.S. secondary sanctions of non-U.S. persons, including NGOs, private sector entities, and foreign financial institutions facilitating or assisting in the same activities. Syria FAQ 934 is on the OFAC website at https://home.treasury.gov/policy-issues/financial-sanctions/faqs/934; FAQ 884 is at https://home.treasury.gov/policy-issues/financial-sanctions/faqs/884.

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OFAC Issues General Licenses And FAQs To Ensure That Humanitarian Assistance Could Flow To The People Of Ethiopia, Eritrea, And The Greater Horn Of Africa Region

Nov. 12, 2021: OFAC took several actions to continue its effort to ensure that humanitarian assistance could flow to the people of Ethiopia, Eritrea, and the greater Horn of Africa region. (See earlier measures in Treasury Department section of September 2021 Regulatory Update.) These actions included the issuance of General License (GL) 4 ( https://home.treasury.gov/system/files/126/ethiopia_gl4.pdf), updated FAQ 927, and new FAQs 935, and 936 (https://home.treasury.gov/policy-issues/financial-sanctions/faqs/927, https://home.treasury.gov/policy-issues/financial-sanctions/faqs/935, and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/936, respectively).

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OFAC Updates SDN List Regarding Burundi, Adds Others for Interference With The U.S. Elections and Updates Yemen Designations

Nov. 18, 2021: In response to Presidential Executive Order issued 11/18/21 with respect to “Termination of the Emergency With Respect to the Situation in Burundi” OFAC has updated the Specially Designated Nationals (SDN) list removing parties named in the SDN having property blocked as they were deemed to be contributing to the situation in Burundi.

OFAC also updated the SDN list, adding and removing parties designated for interference with the U.S. elections and situation in Yemen.

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OFAC Issues GL 8I Regarding Petróleos de Venezuela, S.A.

Nov. 24, 2021: OFAC issued GL 8I, “Authorizing Transactions Involving Petróleos de Venezuela, S.A. (PdVSA) Necessary for the Limited Maintenance of Essential Operations in Venezuela or the Wind Down of Operations in Venezuela for Certain Entities,” extending the authorization for certain specified activities until June 1, 2022. GL 8I replaces and supersedes GL 8H, which expired Dec. 1, 2021. GL 8I is on the OFAC website at https://home.treasury.gov/system/files/126/venezuela_gl8i.pdf.

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OFAC Amends The Nongovernmental Organization (NGO) GL In SySR Sec. 542.516 To Expand Existing Authorizations For NGOs To Engage In Humanitarian Assistance That Benefit The Syrian People

Nov. 26, 2021 – 86 Fed. Reg. 67324: OFAC amended the nongovernmental organization (NGO) GL in SySR Sec. 542.516 to expand existing authorizations for NGOs to engage in humanitarian assistance that benefits the Syrian people, including certain early-recovery activities. The newly authorized transactions and activities by NGOs include new investment, the purchase of refined Syrian-origin petroleum products, and certain transactions with elements of the Government of Syria, all limited to support of the not-for-profit activities already authorized under the existing GL. This NGO GL also authorizes U.S. financial institutions to process transfers of funds in support of the transactions and activities authorized by the amendment.

New FAQs 937 (https://home.treasury.gov/policy-issues/financial-sanctions/faqs/937 ) and 938 (,https://home.treasury.gov/policy-issues/financial-sanctions/faqs/938 ), issued Nov. 24, 2021, provide additional information and guidance about what is authorized by the amended GL in SySR Sec. 542.516.

LATEST SANCTIONS FINES & PENALTIES

Sanctions

Department of Commerce

Nov. 15, 2021 – 86 Fed. Reg. 62986: BIS denied the export privileges of Christopher Daniel Stines of Big Spring Correctional Institution, Big Spring, TX, until March 2, 2030, based on his conviction in the U.S. District Court for the Southern District of Florida of violating 18 USC Sec. 554(a) by knowingly and fraudulently attempting to export firearm parts to Haiti. In the criminal case, Stines was sentenced to 46 months in prison, two years of supervised release, and a $100 assessment.

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Nov. 15, 2021 – 86 Fed. Reg. 62987: BIS denied the export privileges of Hersel Lincoln McKenzie, Jr. of Los Angeles, CA, until January 8, 2025, based on his conviction in the U.S. District Court for the Southern District of Texas of violating 18 USC Sec. 554(a) by knowingly and fraudulently attempting to export and exporting certain merchandise, articles, and objects, namely 7.62 x 39 mm ammunition, from the U.S. to Mexico. In the criminal case, McKenzie was sentenced to 12 months and one day in prison and a $100 assessment.

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Nov. 15, 2021 – 86 Fed. Reg.62988: BIS denied the export privileges of Robert Herman Fleischer of Phoenix, AZ, until August 4, 2024, based on his conviction in the U.S. District Court for the District of Arizona of violating Sec. 38 of the Arms Export Control Act (AECA, 22 USC Sec. 2778 (2012)) by intentionally attempting to knowingly and willfully export and cause to be exported from the U.S. to Mexico 2,999 rounds of 7.62x39 mm caliber ammunition without the required authorization from the Department of State. In the criminal case, Fleischer was sentenced to 21 months in prison with credit for time served, three years of supervised release, and a special assessment of $100. Fleischer was also placed on the U.S. Department of State Debarred List.

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Nov. 15, 2021 – 86 Fed. Reg. 62989: BIS denied the export privileges of Si Mong Park of Tucson, AZ, until September 14, 2027, based on his conviction in the U.S. District Court for the District of Columbia of violating Sec. 38 of the AECA by knowingly and willfully exporting and causing the export from the U.S. to South Korea of defense articles, i.e., technical data related to launch vehicles, guided missiles, ballistic missiles, rockets, torpedoes, bombs and mines, and technical data related to enumerated aircraft and aircraft-related articles without the required authorization from the Department of State. In the criminal case, Park was sentenced to 21 months in prison, 36 months of supervised release, and a $100 assessment.

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Nov. 16, 2021 – 86 Fed. Reg. 63333: BIS denied the export privileges of Manuel Valencia-Hermosillo until October 13, 2024, based on his conviction in the U.S. District Court for the District of Arizona of violating Sec. 38 of the AECA by knowingly and willfully attempting to export and cause to be exported from the U.S. to Mexico ammunition and rifle magazines, all of which were designated as defense articles on the U.S. Munitions List, without the required authorization from the Department of State. In the criminal case, Valencia-Hermosillo was sentenced to 15 months in prison with credit for time served, three years of supervised release, and an assessment of $100. Valencia-Hermosillo was also placed on the U.S. Department of State Debarred List.

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Nov. 22, 2021 – 86 Fed. Reg. 66276: BIS renewed for an additional 180 days the Temporary Denial Order (TDO) issued on May 27, 2021, against the following persons:

Mahan Airways, Tehran, Iran;
Pejman Mahmood Kosarayanifard A/K/ A Kosarian Fard, Dubai, United Arab Emirates (UAE);
Mahmoud Amini, Dubai, UAE;
Kerman Aviation A/K/A Gie Kerman Aviation, Paris, France;
Sirjanco Trading LLC, Dubai, UAE;
Mahan Air General Trading LLC, Dubai, UAE;
Mehdi Bahrami, Istanbul, Turkey;
Al Naser Airlines A/K/A Al-Naser Airlines A/K/A Al Naser Wings Airline A/K/A Alnaser Airlines And Air Freight Ltd., Baghdad, Iraq, Dubai, UAE, and Amman, Jordan;
Ali Abdullah Alhay A/K/A Ali Alhay A/K/A Ali Abdullah Ahmed Alhay, Baghdad, Iraq, and Qatif, Saudi Arabia;
Bahar Safwa General Trading, Dubai, UAE;
Sky Blue Bird Group A/K/A Sky Blue Bird Aviation A/K/A Sky Blue Bird Ltd A/K/A Sky Blue Bird FZC Ras Al Khaimah Trade Zone, UAE; and
Issam Shammout A/K/A Muhammad Isam Muhammad Anwar Nur Shammout A/K/A Issam Anwar, Damascus, Syria, Beirut, Lebanon, London, United Kingdom, and Istanbul, Turkey.

Fines and Penalties

Nov. 8, 2021: SP Industries, Inc. (“SP,” doing business as SP Scientific) of Warminster, PA, agreed to pay a civil penalty of $80,000 and submit to audit requirements to settle allegations by BIS that it had committed four violations of the EAR by exporting items to Huawei Technologies Co., Ltd. and two subsidiaries, Huawei Device Co., Ltd. and HISilicon Technologies Co., Ltd., without the required licenses from BIS. The exports were made after these Huawei companies had been designated on the Entity List. SP voluntarily self-disclosed two of the four violations listed in the settlement. After learning of the apparent violations, SP instituted new screening and compliance procedures for all orders. Also, in the settlement, it agreed to conduct two audits of its compliance system over the next two years and submit the results to BIS’ Export Enforcement’s New York Field Office, and when actual or potential violations of the EAR occur, to provide BIS with documentation related to the compliance concerns and a detailed plan of corrective actions and documentation related to these concerns.

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Nov. 9, 2021: Andrew Scott Pierson of Jay, OK, pleaded guilty to conspiracy to violate the AECA for his role in a conspiracy to traffic firearms to Mexico. His role in the conspiracy, which he performed in Nuevo Laredo, Mexico, was to receive counterfeit Colt lower receivers and other parts that were transported to him by an organization in Laredo, TX, and assemble them into functioning automatic weapons for use by two Mexican cartels. According to the U.S. Department of Justice, law enforcement later confirmed that cartel firearm availability was impaired following Pierson’s arrest.

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Nov. 10, 2021: Dali Bagrou, of Alpharetta, GA, was sentenced in U.S. District Court for the Southern District of Georgia to 51 months in prison followed by three years of supervised release based on his plea of guilty to conspiracy, and Bagrou’s company, World Mining and Oil Supply (WMO), of Dacula, GA was sentenced to five years’ probation after pleading guilty to violating the Export Control Reform Act (ECRA, 50 U.S.C. § 4801 et seq.). Also, as part of his plea agreement, Bagrou agreed to forfeit his $800,000 home. The sentences and guilty pleas involved a conspiracy to sell a U.S.-manufactured power turbine to a Russian energy company for use on a Russian Arctic deep-water drilling platform -- a use that is expressly prohibited without a license from the U.S. Department of Commerce -- while submitting false documentation to the U.S. Government stating that the turbine would be used by a U.S. company in and around Atlanta. (See August 2021 Regulatory Update and prior issues cited there for additional information about this conspiracy and its journey through the U.S. legal system.)

NOVEMBER 2021 EXPORT CONTROL REGULATION UPDATES Read More »

OCTOBER 2021 EXPORT CONTROL REGULATION UPDATES

This newsletter is a listing of the latest changes in export control regulations through October 31, 2021. 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

International Organizations

Missile Technology Control Regime (MTCR) Holds A Plenary Meeting In Sochi, Russia

Oct. 4-8, 2021: The Missile Technology Control Regime (MTCR) held a plenary meeting in Sochi, Russia. At the meeting the members adopted an updated Equipment, Software, and Technology Annex. During the meeting, the member nations emphasized that the MTCR Guidelines are not designed to impede technological development, including space programs, as long as such activities cannot contribute to the proliferation of Weapons of Mass Destruction (WMD) delivery systems. The new Equipment, Software, and Technology Annex is on the Internet at http://mtcr.info/wordpress/wp-content/uploads/2021/10/MTCR-TEM-Technical_Annex_2021-10-08.pdf, and a version showing the changes from the previous Annex is at https://mtcr.info/wordpress/wp-content/uploads/2021/10/MTCR-TEM-Technical_Annex_2021-10-08-Track-Changes.pdf.

Department of Commerce – Bureau of Industry and Security

BIS Makes Minor Edits To Multiple Parts Of The EAR

Oct. 5, 2021 – 86 Fed. Reg. 54807: The Bureau of Industry and Security (BIS) made minor editorial revisions in Parts 732, 734, 736, 738, 740, 744, 748, 750, 770, 772, and 774 of the Export Administration Regulations (EAR, 15 CFR Parts 730-774) to correct inadvertent inconsistencies in the language of these parts. The revisions did not change the substance of the EAR.

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BIS Adds ECCN 2D352 To Control "Software" Designed For Nucleic Acid Assemblers And Synthesizers Controlled By ECCN 2B352.j

October 5, 2021 – 86 Fed. Reg. 54814: BIS amended EAR Parts 742 and 774 to add new Export Control Classification Number (ECCN) 2D352 to reflect a decision made by the Australia Group (AG) in May 2021 to modify the AG biological equipment list. Specifically, new ECCN 2D352 controls "software" designed for nucleic acid assemblers and synthesizers controlled by ECCN 2B352.j that is capable of designing and building functional genetic elements from digital sequence data. This "software," which BIS had previously identified as an emerging technology when controlled under new ECCN 2D352, now requires a license for chemical and biological weapons (CB) reasons and anti-terrorism (AT) reasons to the destinations indicated under CB Column 2 and AT Column 1, respectively, on the Commerce Country Chart (Supplement No. 1 to EAR Part 738). BIS also amended ECCN 2E001 to extend controls to the "technology" for the development of this "software."

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BIS Takes Control Over Deuterium From The Nuclear Regulatory Commission Placing Control In ECCN 1C298

Oct. 6, 2021 – 86 Fed. Reg. 55492: BIS published a final rule completing the transfer from the Nuclear Regulatory Commission (NRC) to the Commerce Department for control of exports of deuterium that is intended for use other than in a nuclear reactor. The rule is effective December 6, 2021. (See NRC paragraph below for the NRC's release of control of exports of these items.) Deuterium intended for use other than in a nuclear reactor will now be classified for Nuclear Proliferation (NP) reasons in ECCN 1C298, which currently controls only certain graphite. For purposes of ECCN 1C298, "deuterium" is defined as "deuterium and any deuterium compound, including heavy water, in which the ratio of deuterium atoms to hydrogen atoms exceeds 1:5000."

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BIS Establishes Controls On Certain Items That Can Be Used For Malicious Cyber Activities

Oct. 21, 2021 – 86 Fed. Reg. 58205: BIS issued an interim final rule establishing controls on the export, reexport, or transfer of certain items that can be used for malicious cyber activities by creating new ECCNs. This interim final rule added ECCNs: 4A005; 4D004; 4E001.a; 4E001.c; and 5A001.j. This interim final rule also overlaps with Category 5 – Part 2 when a cybersecurity item also incorporates particular "information security" functionality specified in ECCNs 5A002.a, 5A004.a, 5A004.b, 5D002.c.1, or 5D002.c.3 Category 5 - Part 2 of the CCL in Supplement No. 1 to part 774 of the EAR, these Category 5—Part 2 ECCNs prevail. Additionally, all items subject to the EAR that are controlled for Surreptitious Listening (SL) reasons under another ECCN not added by this rule will continue to be classified under the SL ECCN. This interim final rule also establishes License Exception (LE), LE Authorized Cybersecurity Exports ("ACE"). The announcement requests public comments on the potential cost to the U.S. industry and the cybersecurity community of compliance with the proposed controls. The new rule, in conjunction with LE ACE, will allow the export of "cybersecurity items" to most destinations, while requiring a license for exports to countries of national security or weapons of mass destruction (WMD) concern or countries subject to a U.S. arms embargo, as well as for circumstances where the exporter knows or has reason to know at the time of the export that the "cybersecurity item" will be used to affect the confidentiality, integrity, or availability of information or information systems without authorization by the owner, operator or administrator of the information system. A major goal of this rule is to ensure that U.S. companies are not fueling authoritarian practices. (Contact us for further information about the specific requirements of this rule if you have concerns about any proposed export, reexport, or in-country transfer.) This rule will be effective January 19, 2022; the deadline for comments is December 6, 2021.

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BIS Proposes The Amendment Of License Exception STA For Certain ECCNs And Corrected Inconsistencies Between License Exceptions STA and TSR

Oct. 22, 2021 – 86 Fed. Reg. 58615: BIS issued a proposed rule amending the EAR to clarify restrictions on the availability of LE STA (Strategic Trade Authorization) for ECCNs 9D001, 9D002, 9D004, 9E001, 9E002, and 9E003 and to further restrict the availability of LE STA for certain technology controlled under ECCNs 2E003.f and 1E001. The proposed rules also corrects inconsistencies between LEs STA and Technology Software Restricted (TSR), including the exclusion of the same technologies from eligibility for License Exception TSR; and to make conforming amendments throughout LE STA (Requirements and Limitations, EAR Sec. 740.20(b)) and in affected ECCNs. The deadline for comments is December 6, 2021.

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BIS Issues An Advance Notice Of Proposed Rulemaking Requesting Feedback From The Public And U.S. Industry About The Potential Uses Of Brain-Computer Interface Technology

Oct. 26, 2021 – 86 Fed. Reg. 59070: BIS issued an Advance Notice of Proposed Rulemaking (ANPRM) requesting feedback from the public and U.S. industry about the potential uses of Brain-Computer Interface (BCI) technology, particularly regarding whether BCI technology could provide the U.S. or any of its adversaries with a military or intelligence advantage and whether it would be possible to subject BCI to effective export controls. BCI technology, which includes, inter alia, neural-controlled interfaces, mind-machine interfaces, direct neural interfaces, and brain-machine interfaces, has until now been regarded as an emerging technology. The deadline for comments is December 10, 2021.

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BIS Posts FAQs About the Foreign Direct Product Rule

Oct. 28, 2021: BIS posted an extensive and very useful series of FAQs about the Foreign Direct Product (FDP) Rule titled "Foreign-Produced Direct Product (FDP) Rule as it Relates to the Entity List Sec. 736.2(b)(3)(vi) and footnote 1 to Supplement No. 4 to Part 744" on its website at https://www.bis.doc.gov/index.php/documents/about-bis/2681-2020-fpdp2-faq-120820-ea/file. The FAQs in this 9-page compendium are shown under the following topics:

General Topics
Types of Items
Prior Exports
Plant/Major Component
De Minimis
Supply Chain
Prior Licenses
Licensing Policy
Item-Specific Questions
Savings Clauses

Footnote 1 to Supplement No. 4 to Part 744 identifies entities on the Entity List that exporters may not reexport, export from abroad, or transfer (in-country) without a license or license exception any foreign-produced item specified when there is "knowledge" that the foreign-produced item will be incorporated into, or will be used in the "production" or "development" of any "part," "component," or "equipment" produced, purchased, or ordered by any entity with a footnote 1 designation or any entity with a footnote 1 designation that is a party to any transaction involving the foreign-produced item, e.g., as a "purchaser," "intermediate consignee," "ultimate consignee," or "end-user."

Footnote 1 currently lists Huawei entities from around the world.

Nuclear Regulatory Commission

The Nuclear Regulatory Commission Completes Transfer Of Deuterium To The EAR When Its Intended Use Is Other Than In A Nuclear Reactor

Oct. 6, 2021 – 86 Fed. Reg. 55476: The U.S. Nuclear Regulatory Commission (NRC) issued a final regulation removing the NRC's licensing authority for exports of deuterium for non-nuclear end-use. (See item in BIS section above for regulatory action by BIS placing these items on the Commerce Control List (CCL, EAR Part 774, Supp. No. 1).) The change of jurisdiction over these exports recognizes that exports of deuterium for commercial use have become far more common than exports of deuterium for nuclear end uses. Accordingly, responsibility for the licensing of such exports is being transferred to the Department of Commerce's Bureau of Industry and Security and the Export Administration Regulations ("EAR"). However, exports of deuterium for nuclear end-use will remain under the NRC's export licensing jurisdiction.

Department of State

DDTC Name And Address Changes Posted To Website

Oct. 6, 15, 19, 20, 22, 25, and 26, 2021: 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 Airbus Helicopters' European Maintenance Repair and Overhaul Logistics Hub;
Change in Name for Babcock UK-owned entities due to corporate rebranding as follows:

From: To:

Bond Air Services Limited Babcock Mission Critical Services Onshore Limited

International Aviation Leasing Limited Babcock Mission Critical Services Leasing Limited

Vastone Limited Babcock Mission Critical Services Leasing Limited;

Change in Name from HENSOLDT Optronics (Pty.) Ltd. to HENSOLDT South Africa (Pty.) Ltd. due to consolidation of subsidiaries GEW Technologies (Pty.) Ltd. and HENSOLDT Optronics (Pty.) Ltd.;
Change in Name from Hawker Pacific Pty. Ltd. to Jet Aviation Australia Pty. Ltd. due to acquisition of Hawker Pacific by Jet Aviation Australia;
Change in Name from Selex ES Saudi Arabia Ltd. to Leonardo Saudi Ltd. due to corporate rebranding;
Change in Name from Harris C4i Pty. Ltd. to C4i Pty. Ltd. due to acquisition by Frequentis Group as part of Frequentis acquisition of L3 Harris ATM voice communications and arrival management product business;
Change in Address for Accenture S.L.; and
Change in Name from ST Engineering Land Systems Ltd., KIS Division, a legal entity of Singapore Technologies Engineering Ltd. to ST Engineering Land MRO & Services Pte. Ltd. due to corporate reorganization.

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

Department of the Treasury

OFAC Published Guidance On "Sanctions Compliance Guidance for the Virtual Currency Industry"

October 15, 2021: The Treasury Department, Office of Foreign Assets Control (OFAC) published "Sanctions Compliance Guidance for the Virtual Currency Industry," which provides an industry-specific overview of OFAC sanctions requirements and procedures, including licensing, enforcement, and sanctions compliance best practices. This 28-page brochure is on the Treasury Department website at https://home.treasury.gov/system/files/126/virtual_currency_guidance_brochure.pdf. At the same time, OFAC also published Frequently Asked Question (FAQ) 559, defining for OFAC sanctions purposes the terms "digital currency," "digital currency wallet," "digital currency address," and "virtual currency" (https://home.treasury.gov/policy-issues/financial-sanctions/faqs/559) and FAQ 646 on how to block digital currency (https://home.treasury.gov/policy-issues/financial-sanctions/faqs/646).

LATEST SANCTIONS FINES & PENALTIES

Sanctions

Department of State

October 1, 2021 – 86 Fed. Reg. 54502: The Bureau of Political-Military Affairs (PM) rescinded the statutory debarment imposed on Dennis Haag on April 25, 2018 (83 Fed. Reg. 18112). The debarment was imposed based on Haag's plea of guilty of violating Sec. 38 of the Arms Export Control Act (AECA, 22 USC 2778 et seq.); the rescission was based on a review made in response to a request from Haag in accordance with International Traffic in Arms Regulations (ITAR, 22 CFR Parts 120-130) Sec. 127.7(b). However, pursuant to ITAR Sec. 127.11, this notice does not reinstate his export privileges.

Fines and Penalties

October 5, 2021: Aydan Sin a/k/a/ Hon Chak Gordon Sin a/k/a Andy a/k/a Bullion of British Columbia, Canada, was sentenced in Federal District Court in Buffalo, NY, to serve 46 months in prison based on his May 17, 2017, a plea of guilty of violating the AECA by conspiring to export USML-listed firearms, suppressors, magazines, and ammunitions to Colombia and Dubai without the required authorization. Sin and co-conspirators Guy Deland and Charan Singh communicated with an undercover law enforcement agent (UCA) and asked him whether he could export firearms from the U.S. to the United Arab Emirates (UAE). In the course of their communications, the UCA advised them that a license from the State Department was required in order lawfully to export the firearms. In response, the conspirators acknowledged the illegality of the exports, provided the UCA with an encrypted Blackberry for the purpose of covert communications, and wired approximately $70,000 as a 50% down payment for the export of the goods. A similar process occurred subsequently with a requested export of firearms, magazines, suppressors, and ammunition to Colombia (via Panama). The invoices for both shipments stated that exporting these products without an export license was prohibited by law. Charges remain pending against Deland and Singh.

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Oct. 12, 2021: VTA Telecom Corporation (VTA) of Milpitas, CA, the U.S. subsidiary of a Vietnam state-owned telecommunications company in Hanoi, Vietnam, agreed to pay $1,869,372 (of which $200,000 will be suspended for two years and thereafter waived if VTA observes the terms of the agreement, including spending $25,000 on additional ongoing compliance efforts within 12 months of the Order and retaining a Director of Trade Compliance to oversee VTA's export activities for two years from the date of the Order, or if VTA has dissolved or ceased its business operations) to settle charges by BIS that it provided false end-use and end-user information to officials of BIS and other U.S. government agencies in connection with export license applications and other export activities to conceal the defense purposes of some of its exports. The alleged violations that were covered by the settlement agreement were:

Charge 1: Evasion (EAR Sec. 764.2(e));
Charges 2-4: False Statements to BIS and/or another U.S. Government Agency and on Export Control Documentation (EAR Sec. 764.2(g));
Charge 5: Acting with Knowledge of a Violation: Unlicensed Export (EAR Sec. 764.2(e)); and
Charge 6: Engaging in Prohibited Conduct: Unlicensed Export (EAR Sec. 764.2(a)).

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Oct. 21, 2021: Peter Sotis, of Delray Beach, FL, and Emilie Voissem, of Sunrise, FL, were convicted by a jury in federal court in Miami, FL, of conspiracy to violate the International Emergency Economic Powers Act (IEEPA, 50 USC Sec. 1701-1707), attempted violation of the IEEPA, and smuggling. Sotis and Voissem willfully attempted to export rebreather diving equipment to Libya after they received an instruction from a Department of Commerce special agent that such items were detained and not to be exported while a license determination was pending. (Rebreathers are specialized equipment that enable a diver to operate undetected for long periods of time underwater and therefore have both civilian and military applications.) Despite this instruction, Sotis and Voissem lied to and misled a shipping company about what the agent had told them and about whether the rebreathers had a military use. Sotis and Voissem will be sentenced on Jan. 6, 2022.

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Oct. 26, 2021: Obaidulllah Syed, of Northbrook, IL, the owner of Pakistan-based Business System International Pvt. Ltd. (BSIP) and Chicago-based BSI USA (BSIUS), both of which provide high-performance computing platforms, servers, and software application solutions, pleaded guilty to conspiracy to export goods from the U.S. without the required license from the Commerce Department and to submit false export information. In the plea agreement, Syed admitted that he conspired with BSIP employees to violate the IEEPA by exporting computer equipment from the U.S. to the Pakistan Atomic Energy Commission (PAEC) – a Pakistani government agency whose responsibilities include designing and testing explosives and nuclear weapons parts – without the required authorization from the U.S. Department of Commerce. Syed also admitted that he and other conspirators falsely represented to U.S.-based computer manufacturers that the illegal exports were intended for Pakistan-based universities or Syed's businesses while knowing that the true end-user of each shipment was either the PAEC or a research institute that trained PAEC engineers and scientists, thereby causing the U.S.-based computer manufacturers to submit shipping documents containing false information to the U.S. Government. BSIP was charged as a corporate defendant in the conspiracy. It has not responded to the charges.

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Editor's note to readers. If you would like to receive more practice tips about the ITAR or EAR join Jenny Hahn's or FD Associates' LinkedIn profile. Postings are made several times each week.

OCTOBER 2021 EXPORT CONTROL REGULATION UPDATES Read More »

SEPTEMBER 2021 EXPORT CONTROL REGULATION UPDATES

This newsletter is a listing of the latest changes in export control regulations through September 30, 2021. The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.

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

REGULATORY UPDATES

European Union

New European Union Export Control Regulation Enters Into Force

Sep. 9, 2021: The new European Union Export Control Regulation controlling trade in dual-use items (Regulation (EU) 2021/821 of May 20, 2021) entered into force, 90 days after it was officially published on June 11, 2021. (See information on the Regulation in November 2020 and May and June 2021 Regulatory Updates.)

Regulation (EU) 2021/821 of the European Parliament and of the Council of 20 May 2021 setting up a Union regime for the control of exports, brokering, technical assistance, transit, and transfer of dual-use items (recast) is in the EU Official Journal at https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L:2021:206:FULL&from=EN). A European Commission memorandum on the implementation of the Regulation is at https://trade.ec.europa.eu/doclib/press/index.cfm?id=2296, and the EU Commission’s description of the EU dual-use export control system under the Regulation is at https://ec.europa.eu/trade/import-and-export-rules/export-from-eu/dual-use-controls/

United Kingdom

U.K. Advises The European Union Export Control Regulation Is Directly Applicable To Northern Ireland

Sep. 14, 2021: The Department for International Trade Export Control Joint Unit (ECJU) issued a notice that EU Regulation 2021/821 is directly applicable in Northern Ireland. As a result, any applications for the export of dual-use items submitted to ECJU from 9 September from Northern Ireland will need to comply with this regulation. Notice to Exporters 2021/12 is on the ECJU website at https://www.gov.uk/government/publications/notice-to-exporters-202112-new-dual-use-regulation-eu-2021821/nte-202112-new-dual-use-regulation-eu-2021821.

The President

President Biden Continues The Cuban Assets Control Regulations

Sep. 7, 2021: President Biden exercised his authority under Public Law 95-223 (50 USC Sec. 4305 note), Sec. 101(b) to continue the exercise of the authorities implemented under the Cuban Assets Control Regulations CACR, 31 CFR Part 515, for one year, until Sep. 14, 2022. This action was necessary because the authorities regarding Cuba under the Trading With the Enemy Act which had previously authorized the CACR expired on Sep. 14, 2021. Presidential Determination No. 2021-12 is at https://www.whitehouse.gov/briefing-room/presidential-actions/2021/09/07/memorandum-on-the-continuation-of-the-exercise-of-certain-authorities-under-the-trading-with-the-enemy-act/.

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U.S. Trade Officials Attend Inaugural Meeting Of The Trade And Technology Council

Sep. 29, 2021: U.S. Secretary of State Antony Blinken, Commerce Secretary Gina Raimondo, and U.S. Trade Representative Katherine Tai joined senior European officials in Pittsburgh, PA, at the inaugural meeting of the Trade and Technology Council, a new U.S.-European group launched by President Biden and the Presidents of the European Council and the European Commission, to establish common principles for the 21st-century economy. Regarding export controls, they determined shared principles and areas for cooperation, including assisting third countries in building capacity to support multilateral export control regimes, holding prior consultations on current and upcoming legislative and regulatory developments, and developing convergent control approaches on sensitive dual-use technologies.

Department of Commerce – Bureau of Industry and Security

BIS Posts FAQs On The Classification Of Integrated Circuits For Program Protection Plans

Sep. 21, 2021: The Bureau of Industry and Security (BIS) posted FAQs on the classification of integrated circuits used in connection with U.S. Government programs and the development of Program Protection Plans to prevent the release of controlled technology during the lifetime of an acquisition involving the production of integrated circuits. For Department of Defense acquisition programs relying on onshore foundries for integrated circuit production and which include approved Program Protection Plans, authorized program personnel may rely, as necessary, on existing industry technology control plans to assist in certifying that export of technical data does not occur during the production of integrated circuits. FAQs 1A, 1B, and 2 are on the BIS website at https://www.bis.doc.gov/index.php/documents/pdfs/2838-classification-of-items-subject-to-the-ear/file.

Department of State

DDTC Name And Address Changes Posted To Website

Sep. 3, 23, 24, 27, 2021: 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 L3Harris Technologies, Inc. Combat Propulsion Systems Division (L3Harris CPSD) to RENK America, LLC due to the acquisition of L3Harris CPSD by Renk America;
Change in Name from DigiNext LLC to CS Group – France due to merger of DigiNext into CS Group – France;
Change in Name from Mission Systems Australia Pty Ltd to L3Harris Integrated Mission Systems Australia Pty Ltd due to corporate rebranding;
Change in Address for Improbable LLC; and
Change in Address for Hexadyne Corporation.

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

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The State Department Imposed Sanctions On Russia Under The Chemical and Biological Weapons Control And Warfare Elimination Act Of 1991

Sep. 7, 2021 – 86 Fed. Reg. 50203, corrected Sep. 24 – 86 Fed. Reg. 53137: The State Department imposed sanctions on Russia under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (CBW Act, 22 U.S.C. 5604(a)) in addition to the sanctions it had imposed on March 18, 2021 (see March 2021 Regulatory Update), based on its determination that the Government of the Russian Federation had used chemical or biological weapons in violation of international law or lethal chemical or biological weapons against its own nationals. The new sanctions were based on the conclusion that Russia had not met conditions required under the law following the sanctions imposed in March.

The new sanctions prohibit exports to Russia of all other goods and technology (except food and other agricultural commodities and products), subject to significant waivers deemed essential to U.S. national security interests. The waivers include, among others, exports of goods or technology eligible under License Exceptions GOV, ENC, BAG, TMP, and AVS; new licenses issued on a case-by-case basis, consistent with the export licensing policy for Russia prior to the enactment of these sanctions for items controlled for AT, CC, FC, and RS reasons, goods or technology necessary for the safety of flight of civil fixed-wing passenger aviation, deemed exports and reexports, exports to wholly-owned U.S. and other foreign subsidiaries, and government space cooperation; and new licenses subject to a presumption of denial for items controlled for CB, MT, and NP reasons, licenses in support of commercial space launches, licenses for exports for commercial end uses, and exports to Russian state-owned or state-funded enterprises. Also, U.S. banks will be prohibited under most circumstances from making loans or providing credit to the Government of the Russian Federation, and most applications for permanent imports of Russian firearms or ammunition, as defined on the U.S. Munitions Import List (USMIL, 27 CFR 447.21, Categories I and III), will be denied in accordance with Section 38 of the Arms Export Control Act (AECA, 22 U.S.C. 2778) and Executive Order 13637.

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DDTC Extended Temporary Modification Of The ITAR Related To Cyprus

Sep. 30, 2021 – 86 Fed. Reg. 54044: DDTC extended through Sep. 30, 2022, the effective period of the temporary modification of the International Traffic in Arms Regulations (ITAR, 22 CFR Parts 120-130) that removed prohibitions on exports, reexports, retransfers, and temporary imports of non-lethal defense articles and defense services destined for or originating in the Republic of Cyprus. (See information about reasons for the ban and the authorization of a one-year Presidential waiver in September 2020 Regulatory Update.) During this period, applications for exports of non-lethal defense articles and non-lethal defense services to Cyprus will continue to be reviewed on a case-by-case basis, while applications for lethal defense articles and defense services will continue to be denied.

Department of the Treasury

OFAC Issues General Licenses Related to Humanitarian Exports To Ethiopia, Eritrea, And The Greater Horn Of Africa

Sep. 17, 2021: Concurrent with the issuance by President Biden of an Executive Order Imposing Sanctions on Certain Persons With Respect to the Humanitarian and Human Rights Crisis in Ethiopia (E.O. 14046 of Sep. 17, 2021, 86 Fed. Reg. 52389, Sep. 21, 2021), the Office of Foreign Assets Control issued Ethiopia General License Number 1, “Official Activities of Certain International Organizations and Other International Entities,” Ethiopia General License Number 2, “Certain Transactions in Support of Nongovernmental Organizations' Activities,” and Ethiopia General License Number 3, “Transactions Related to the Exportation or Reexportation of Agricultural Commodities, Medicine, Medical Devices, Replacement Parts and Components, or Software Updates,” all of which were targeted at supporting the U.S. commitment to support the people of Ethiopia, Eritrea, and the greater Horn of Africa region and ensuring that U.S. sanctions do not limit the ability of civilians in Ethiopia and the region to receive humanitarian support from the international community and to participate in certain transactions related to the exportation or reexportation of agricultural commodities, food, medicine, and medical items.

In addition, OFAC published several related frequently asked questions (FAQs 922, 923, 924, 925, 926, and 927). Details are in a White House Fact Sheet at https://www.whitehouse.gov/briefing-room/statements-releases/2021/09/17/fact-sheet-biden-harris-administration-actions-in-response-to-ongoing-crisis-in-northern-ethiopia/.

Also, the Fact Sheet stated that while imposing sanctions under E.O. 14046, the U.S. would take measures to mitigate unintended effects on the people of Ethiopia and the wider region, including seeking to ensure personal remittances to non-sanctioned persons, humanitarian assistance to at-risk populations, and longer-term assistance programs and commercial activities that address basic human needs in Ethiopia and the greater Horn of Africa region through legitimate and transparent channels.

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OFAC Issues Updated Advisory Regarding Malicious Cyber-Enabled Activities

Sep. 21, 2019: OFAC issued an updated advisory to highlight the sanctions risks associated with ransomware payments in connection with malicious cyber-enabled activities and the proactive steps companies can take to mitigate such risks, including actions that OFAC would consider to be “mitigating factors” in any related enforcement action. The advisory is on the Treasury Department website at https://home.treasury.gov/system/files/126/ofac_ransomware_advisory.pdf.

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OFAC Issues General Export Licenses Related To Afghanistan

Sep. 24, 2021: OFAC issued General License (GL) 14, “Authorizing Humanitarian Activities in Afghanistan,” and GL 15, “Transactions Related to the Exportation or Reexportation of Agricultural Commodities, Medicine, Medical Devices, Replacement Parts, and Components, or Software Updates in Afghanistan.” Both GL 14 and GL 15 authorize transactions involving the Taliban or the Haqqani Network, or any entity in which the Taliban or the Haqqani Network owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest that would otherwise be prohibited by OFAC’s terrorism-related sanctions. GL 14, on the Treasury Department website at https://home.treasury.gov/system/files/126/ct_gl14.pdf, authorizes transactions by the U.S. Government, NGOs, and specified international organizations and entities and those acting on their behalf to provide humanitarian assistance or support basic human needs. GL 15, at https://home.treasury.gov/system/files/126/ct_gl15.pdf, authorizes all transactions that are ordinarily incident and necessary to the exportation or reexportation of agricultural commodities, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices to Afghanistan, or to persons in third countries purchasing specifically for resale to Afghanistan.

OFAC also issued four FAQs related to GLs 14 and 15. FAQs 928, 929, 930, and 931 are at https://home.treasury.gov/policy-issues/financial-sanctions/faqs/928, https://home.treasury.gov/policy-issues/financial-sanctions/faqs/929, https://home.treasury.gov/policy-issues/financial-sanctions/faqs/930 and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/931. A press release describing the Treasury Department’s aims regarding exports to Afghanistan is at https://home.treasury.gov/news/press-releases/jy0372.

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OFAC Issues FAQ Regarding Visiting Or Making Donations To The Imam Reza Hold Shrine In Iran

Sep. 30, 2021: OFAC issued a detailed FAQ discussing whether U.S. sanctions prohibit U.S. persons from visiting, or making donations to the Imam Reza Holy Shrine in Mashad, Iran. FAQ 932 is on the Treasury Department website at https://home.treasury.gov/policy-issues/financial-sanctions/faqs/932.

LATEST SANCTIONS FINES & PENALTIES

Sanctions

Department of Commerce

Sep. 7, 2021 – 86 Fed. Reg. 50021: BIS denied the export privileges of Luis Lopez of Donna, TX, until Dec. 17, 2029, based on his conviction in the U.S. District Court for the Southern District of Texas of violating 18 USC Sec. 554(a) by fraudulently and knowingly exporting and sending or attempting to export and send five AK-47 semi-automatic rifles from the U.S. to Mexico without the required authorization. In the criminal case, Lopez was sentenced to 37 months in prison, three years of supervised release, and a $100 assessment. BIS also revoked any BIS-issued licenses in which Lopez had an interest at the time of his conviction.

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Sep. 13, 2021 – 86 Fed. Reg. 50874: BIS denied the export privileges of Anastacio San Miguel-Padron of Big Spring Correctional Institution, Big Spring, TX, until Feb. 6, 2027, based on his conviction in the U.S. District Court for the Southern District of Texas of violating 18 USC Sec. 554 by fraudulently and knowingly exporting and sending or attempting to export or send from the U.S. to Mexico .38 super caliber ammunition, .40 caliber ammunition, 9mm caliber ammunition, and a 7.62 x 39 mm drum magazine. In the criminal case, Miguel-Padron was sentenced to 30 months in prison and a $100 assessment.

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Sep. 13, 2021 – 86 Fed. Reg. 50875: BIS denied the export privileges of Samy Jecrois of St. Petersburg, FL, until Feb. 1, 2024, based on his conviction in the U.S. District Court for the Southern District of Florida of violating 18 USC Sec. 554 by knowingly attempting to export and send a firearm from the U.S. to Haiti. In the criminal case, Jecrois was sentenced to 5 months in prison, two years of supervised release, and a $100 assessment.

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Sep. 13, 2021 – 86 Fed. Reg. 50875: BIS denied the export privileges of Akeem Shonari Awer of Big Spring Correctional Institution, Big Spring, TX, until Feb. 14, 2030, based on his conviction in the U.S. District Court for the Southern District of Florida of violating Sec. 38 of the AECA by knowingly and willfully attempting to export firearms and ammunition from the U.S. to Barbados without the required authorization from the State Department. In the criminal case, Awer was sentenced to 46 months in prison, two years of supervised release, and a $100 assessment.

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Sep. 14, 2021 -- 86 Fed. Reg. 51113: BIS denied the export privileges of Tengiz Sydykov of Arlington, VA, until Jan. 11, 2029, based on his conviction in U.S. District Court for the Eastern District of Virginia of violating Sec. 38 of the AECA by knowingly and willfully exporting and causing to be exported from the U.S. to Grozny, Chechnya, Russia, assembled firearms, fully assembled lower receivers, firearm slides, firearm barrels, firearm magazines, stocks, firearm frames, and additional functional firearms, designated as defense articles on the U.S. Munitions List (USML, 22 CFR Sec. 121.1), without the required authorizations from the State Department. In the criminal case, Sydykov was sentenced to 36 months in prison, three years of supervised release, and a $100 assessment.

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Sep. 14, 2021 – 86 Fed. Reg. 51114: BIS denied the export privileges of Rrok Martin Camaj of Federal Correctional Institution Morgantown, Morgantown, WV, until Feb. 28, 2030, based on his conviction in U.S. District Court for Eastern District of Michigan of violating Sec. 38 of the AECA by knowingly and willfully exporting and causing to be exported from the U.S. to Australia pistol frames/receivers, magazines, pistol kits, and other firearm parts which were defense articles on the USML without the required authorizations from the State Department. In the criminal case, Camaj was sentenced to 42 months in prison, three years of supervised release, and a $100 assessment.

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Sep. 14, 2021 – 86 Fed. Reg. 51115: BIS denied the export privileges of Eli Ramirez-Rios of Matamoros, Tamaulipas, MX, until Feb. 26, 2027, based on his conviction in the U.S. District Court for the Southern District of Texas of violating 18 USC Sec. 554(a) by knowingly exporting and sending or attempting to export and send from the U.S. to Mexico, a Palmetto State Armory Build the Wall L10, AR-10 rifle with an obliterated serial number. In the criminal case, Ramirez-Rios was sentenced to 28 months in prison and a $100 assessment.

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Sep. 14, 2021 – 86 Fed. Reg. 51116: BIS denied the export privileges of Katherine O’Neal, of Colorado Springs, CO, based on her conviction in U.S. District Court for Colorado of violating 18 USC Sec. 554 by fraudulently and knowingly exporting firearms from the U.S. to the Dominican Republic. In the criminal case, O’Neal was sentenced to 36 months in prison, three years of supervised release, and a $100 assessment.

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Sep. 14, 2021 – 86 Fed. Reg. 51117: BIS denied the export privileges of Andy Lloyd Huebschmann of Chilton, WI, until Dec. 13, 2029, based on his conviction in the U.S. District Court for the Eastern District of Wisconsin of violating AECA Sec. 38 by knowingly and willfully exporting and causing to be exported from the U.S. to Australia defense articles including a rifle kit with a Model GA 9mm lower receiver, upper receiver, barrel, trigger control group, bolt carrier, and pistol grip. In the criminal case, Huebschmann was sentenced to 24 months in prison, one year of supervised release, a criminal fine of $15,000, and a $100 assessment, and BIS also revoked any BIS-issued licenses in which he had an interest at the time of his conviction.

Fines and Penalties

Sep. 8, 2021: Shuren Qin of Wellesley, MA, a Chinese national, was sentenced in federal court in Boston to a two-year prison sentence, two years of supervised release, and a $20,000 fine after admitting that he had exported at least 60 hydrophones – devices used to monitor sound underwater – valued at more than $100,000 to Northwestern Polytechnical University (NWPU), a military research institute in Xi’an, China that works closely with the Chinese People’s Liberation Army (PLA) on the advancement of its military capabilities, without the required authorization from the Commerce Department. NWPU has been on the Entity List (15 CFR Part 744, Supp. No. 4) since 2001. Qin, a marine biologist, was aided in the illegal exports by LinkOcean Technologies, LTD, a company that he established and used to import into the PRC goods and technology with underwater and marine applications from the U.S., Canada, and Europe. According to prosecutors, Qin and LinkOcean purposely concealed from their U.S. supplier that the hydrophones were going to NWPU, causing false end-user information to be filed with the U.S. Government. Qin will face deportation proceedings upon completion of his sentence.

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Sep. 9, 2021: NewTek, Inc., a company headquartered in San Antonio, Texas that developed and supplied live production and 3D animation hardware and software systems, agreed to pay $189,483 to settle its potential civil liability for 52 apparent violations of the Iranian Transactions and Sanctions Regulations (ITSR, 31 CFR Part 560). The apparent violations occurred from 2013 through 2018, when NewTek exported goods, technology, and services from the United States to two third-country distributors that it knew or had reason to know were specifically intended for a reseller located in Iran. The Iranian reseller sold three of the exported products to Islamic Republic of Iran Broadcasting (IRIB), an entity that at that time was included on OFAC’s List of Specially Designated Nationals and Blocked Persons (the “SDN List”). At least three times NewTek provided support, software updates, reseller training, or other services in support of sales to customers located in Iran. Further, NewTek was a party to a distribution agreement that specifically excluded Iran from the sales territory.

According to OFAC, the base civil monetary penalty amount in this case, taking into consideration that NewTek voluntarily self-disclosed the apparent violations and that OFAC determined that the violations constituted a non-egregious case, was $291,512; however, the penalty was reduced to $189,483 in consideration of mitigating factors, including that NewTek had substantially cooperated with OFAC during the investigation and that it had taken extensive remedial actions. A detailed description of the case, including the factors that influenced the penalty, is on the Treasury Department website at https://home.treasury.gov/system/files/126/20210909_newtek.pdf.

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Sep. 14, 2021: U.S. citizens Marc Baier and Ryan Adams and former U.S. citizen Daniel Gericke, all former employees of the U.S. Intelligence Community (USIC) or the U.S. Military, agreed in a deferred prosecution agreement (DPA) with the U.S. Department of Justice (DOJ) to pay penalties of $750,000, $600,000, and $335,000, respectively, and to accept restrictions on their future employment and activities to resolve a DOJ investigation regarding violations of U.S. export control, computer fraud, and access device fraud laws. Baier, Adams, and Gericke (“the defendants”) worked as senior managers of a team known as Cyber Intelligence-Operations (CIO) at a company based in the United Arab Emirates (“UAE Co.”) that supported and carried out computer network exploitation (CNE) operations (i.e., “hacking”) for the benefit of the UAE Government, including supporting, directing, and supervising UAE Co. employees in creating sophisticated “zero-click” hacking and intelligence-gathering systems that the defendants knew were used to illegally obtain and use access credentials for online accounts issued by the U.S. and other companies, and gain access to computers and mobile phones around the world, including in the U.S. Subsequently, the CIO team expanded the breadth and sophistication of their CNE operations, including creating two additional “zero-click” systems that leveraged servers in the U.S. to obtain unauthorized access to tens of millions of smartphones and mobile devices. The defendants did all this work without a license from the U.S. State Department despite having been informed on several occasions that this work constituted a “defense service” under the ITAR.

Prior to their employment at UAE Co., the defendants had worked for a U.S. company that provided cyber services to a UAE Government agency in compliance with a DDTC-issued Technical Assistance Agreement that specifically required the parties to abide by U.S. export control laws, including not targeting U.S. persons and obtaining preapproval from the U.S. Government prior to releasing information regarding the cryptographic analysis. This company also provided periodic ITAR and TAA training, and prior to the defendants’ departure for UAE Co., it told them that the services they were providing constituted “defense services” under the ITAR which they could not provide to UAE Co. without obtaining a separate TAA.

The DPA signed by the defendants provided, in addition to the monetary penalties, that they would cooperate fully with the relevant DOJ and FBI components; relinquish any foreign or U..S. security clearances and accept a lifetime ban on future U.S. security clearances; accept future employment restrictions including a prohibition on employment that involves CNE activity or exporting defense articles or providing defense services under the ITAR; and restrictions on employment with certain UAE organizations.

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Sep. 14, 2021: Mehrdad Ansari, an Iranian citizen resident in the UAE and Germany, was sentenced to 63 months in prison followed by three years of supervised release based on his conviction of one count each of violating the ITSR, conspiracy to commit wire fraud, conspiracy to defraud the U.S. Department of the Treasury and two counts of aiding and abetting the making of false statements in connection with his attempts to transship to Iran testing equipment obtained from the U.S. by co-defendants Susan Yip, aka Susan Yeh, a citizen of Taiwan, and Mehrdad Foomanie, aka Frank Foomanie, a citizen of Iran, using Ansari’s companies in Dubai, UAE, Gulf Gate Sea Cargo LLC, and Global Merchant LLC.

Yip and Foomanie obtained or attempted to obtain from companies worldwide over 105,000 parts valued at approximately $2,630,800. They did not notify their U.S. sellers that these parts would be shipped to Iran, and neither they nor Ansari ever applied for the license from OFAC or the Department of Commerce that was required to ship any of these goods to Iran.

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Sep. 27, 2021: Cameron International Corporation of Houston, TX, a subsidiary of Schlumberger Limited, agreed to pay $1,423,766 to settle its potential liability for apparent violations of the Ukraine-Related Sanctions Regulations (URSR, 31 CFR Part 589) involving the approval by U.S.-person senior managers at Cameron of contracts for its subsidiary, Cameron Romania S.R.L., to supply oil production or exploration goods to Gazprom-Neft Shelf, a Russian energy firm, for use in an offshore project in the Russian Arctic, a prohibited destination. The contracts that were approved by the Cameron senior managers referenced the oil-related nature of the project and the fact that the Russian Arctic was the destination of the goods.

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Sep. 27, 2021: Schlumberger Rod Lift, Inc. (SRL, now d/b/a Lufkin Rod Lift, Inc.), of Frisco, TX, formerly a subsidiary of Schlumberger Lift Solutions LLC (SLS), which itself was a U.S. subsidiary of Schlumberger Limited (“Schlumberger”) of Curacao, Netherlands, agreed to pay $160,000 to settle its potential liability incurred on one occasion when three U.S.-person employees of SRL – two of whom were senior managers -- facilitated the sale and shipment of oilfield equipment from a Schlumberger subsidiary in Canada to a Schlumberger joint venture in China, for ultimate delivery to Sudan. The facilitation of the export to Sudan was at the time a violation of the since-repealed Sudanese Sanction Regulations (SSR, 31 CFR Part 538). The U.S.-person employees who approved the transaction knew that the equipment was destined for Sudan and that Sudan was a prohibited destination.

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Sep. 27, 2021: Virgil Griffith, a U.S. citizen resident in Singapore, pled guilty in federal court in New York City to conspiring to violate the International Emergency Economic Powers Act (IEEPA, 50 USC Sec. 1701 -1707) by providing services to the Democratic People’s Republic of Korea (DPRK or North Korea) including technical advice on using cryptocurrency and blockchain technology to evade sanctions. Griffith knew that the DPRK could use actions involving cryptocurrency to evade and avoid U.S. sanctions and to fund its nuclear weapons program and other illegal activities. In April 2019 Griffith traveled to the DPRK, despite the State Department’s denial of permission to travel to the DPR, where he delivered presentations at the Pyongyang Blockchain and Cryptocurrency Conference, knowing that this violated U.S. sanctions against the DPRK, and also provided instruction on how the DPRK could use blockchain and cryptocurrency technology to launder money, evade sanctions, and assist with nuclear weapons negotiations with the U.S. Griffith also attempted to broker introductions for the DPRK to other cryptocurrency and blockchain service providers. At no time did he obtain permission from OFAC to provide goods, services, or technology to the DPRK.

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Sep. 28, 2021: Medtronic Mediterranean SAL (Lebanon), a controlled-in-fact foreign affiliate of Medtronic, Inc., a domestic company, agreed to pay a civil penalty of $13,750 to resolve charges by the BIS Office of Antiboycott Compliance that it had committed 11 violations of EAR Sec. 760.5, Failing to Report the Receipt of a Request to Engage in a Restrictive Trade Practice or Foreign Boycott Against a Country Friendly to the U.S. If Medtronic Mediterranean does not pay this penalty within 30 days after the entry of the Order, BIS may deny all of its export privileges for one year.

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Sep. 28, 2021: Silicon Space Technology Corporation, d/b/a Vorago Technologies, Inc., of Austin, TX, agreed to pay an administrative penalty of $497,000 (of which $247,000 will be suspended until September 2023 and thereafter waived, if Vorago has paid the full $250,000 and committed no further violation) and accept a suspended denial of export privileges under the Export Administration Regulations (EAR, 15 CFR Parts 730-774) until September 2023 to settle allegations by BIS that it had conspired to export radiation-hardened 16 Mb SRAM silicon wafers controlled on the Commerce Control List (CCL, EAR Part 774, Supp. No. 1) under Export Control Classification Number (ECCN) 9A515.e.1 to Russia via a Bulgarian company without obtaining the required license from the Department of Commerce. The exported goods required an export license for export to Russia, but not for export to Bulgaria. [* Charging Letter and Settlement Agreement: https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2021/1333-e2686/file]

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Sep. 29, 2021: Oleg Vladislavovich Nikitin, of St. Petersburg, Russia, the general director of KS Engineering (KSE), a St. Petersburg-based energy company, was sentenced in U.S. Court for the Southern District of Georgia to 28 months in prison and a fine of $5,000 based on his plea of guilty of conspiracy to violate the IEEPA, the Export Control Reform Act (ECRA, 50 USC § 4801 et seq.), and the EAR. Nikitin, KSE, and an Italian company, GVA International Oil and Gas Services, all participated in this conspiracy, which involved obtaining a turbine in the U.S. and exporting it for ultimate use on a sanctioned Russian Arctic deepwater drilling platform. (See additional details about this project in August 2021 Regulatory Update.) In addition to the prison term and fine, Nikitin was also ordered to be subject to deportation upon completion of his prison term, and KSE and GVA were ordered to serve five years’ probation.

SEPTEMBER 2021 EXPORT CONTROL REGULATION UPDATES Read More »

AUGUST 2021 EXPORT CONTROL REGULATION UPDATES

This newsletter is a listing of the latest changes in export control regulations through August 31, 2021. 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 Notice Continuing For One Year The National Emergency With Respect To The Expiration Of The Export Administration Act Of 1979, As Amended

Aug. 10, 2021 – 86 Fed. Reg. 43901: President Biden issued a Notice continuing for one year the national emergency with respect to the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States related to the expiration of the Export Administration Act of 1979 (EAA), as amended, which was first declared in Executive Order 13222 of Aug. 17, 2001, pursuant to the International Emergency Economic Powers Act (IEEPA, 50 USC Sec. 1701 et seq.) and amended by EO 13637 of March 8, 2013. President Biden’s Notice, issued in accordance with Sec. 202(d) of the National Emergencies Act (50 USC Sec. 1622(d)), permits the continued implementation under the IEEPA of sanctions authorities that had been authorized under the EAA and otherwise would have expired with the EAA.

Department of Commerce – Bureau of Industry and Security

BIS Issues Final Rule Correcting The January 23, 2020 Rule Transferring Certain Firearms, Guns, Armament, and Ammunition To The EAR

Aug. 9, 2021 – 86 Fed. Reg. 46590: The Bureau of Industry and Security (BIS) issued final rulemaking corrections and clarifications in the rule issued Jan. 23, 2020 (85 Fed. Reg. 4136), in conjunction with a State Department final rule that transferred items that no longer warrant control under U.S. Munitions List (USML, 22 CFR Sec. 121.1) Categories I (firearms, close assault weapons, and combat shotguns), II (guns and armaments), and III (ammunition/ordnance) to the Commerce Control List (CCL, 15 CFR Part 774, Supp. No. 1). The changes made in this rule are intended to make the requirements easier to understand, interpreted consistently, and in accordance with the intent of the Jan. 23 rule. The changes occur in Export Administration Regulations (EAR, 15 CFR Parts 730-774) Parts 740, 742, 748, and 758 and CCL Export Control Classification Numbers (ECCNs) 0A501, 0E501, 0A505, 0B501, and 0E505.

Please contact your consultant if you require further clarification of the rule’s impact on your company.

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BIS And OFAC Issue Joint Fact Sheet Titled “Supporting the Cuban People’s Right to Seek, Receive, and Impart Information through Safe and Secure Access to the Internet.”

Aug. 11, 2021: BIS and the Treasury Department, Office of Foreign Assets Control (OFAC) jointly issued “Supporting the Cuban People’s Right to Seek, Receive, and Impart Information through Safe and Secure Access to the Internet,” a fact sheet describing existing OFAC general licenses (GLs) and BIS license exceptions that facilitate exports of certain telecommunications equipment, software, and services to Cuba without specific U.S. government authorizations while complying with the Cuba Assets Control Regulations (CACR, 31 CFR Part 515) and the EAR. The fact sheet also describes the favorable licensing policies of both OFAC and BIS for activities that benefit the free flow of information to and from Cuba but are not covered by existing GLs and license exceptions. This 5-page Fact Sheet is on the Treasury Department website at https://home.treasury.gov/system/files/126/cuba_fact_sheet_20210811.pdf.

Department of State

DDTC Name And Address Changes Posted To Website

Aug. 2 and 3, 2021: 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 AeroVironment, Inc.; and
Change in Address for DRS Sustainment Systems, Inc.

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

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DDTC Requested Public Comments Regarding Its Request To OMB To Continue To Use Currently Approved DSP Forms

Aug. 2, 2021 – 86 Fed. Reg. 41530: DDTC requested public comments regarding its request to the Office of Management and Budget (OMB) for approval of extension of the following currently approved forms:

Form DSP-5, Application/License for Permanent Export of Unclassified Defense Articles and Related Unclassified Technical Data;
Form DSP-61, Application/License for Temporary Import of Unclassified Defense Articles;
Form DSP-85, Application/License for Permanent/Temporary Export or Temporary Import of Classified Defense Articles and Related Classified Technical Data;
Form DSP-73, Application/License for Temporary Export of Unclassified Defense Articles;
Forms DSP-6, DSP-62, and DSP-74, Application for Amendment to License for Export or Import of Classified or Unclassified Defense Articles and Related Classified Technical Data; and
Form DSP-83, Non-transfer and Use Certificate.

The deadline for comments is Oct. 1, 2021.

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DDTC Is Reviewing Pending And Issued Export Licenses / Approvals For Afghanistan

Aug. 18, 2021: DDTC announced that in light of the “rapidly-evolving circumstances” in Afghanistan, it is reviewing all relevant pending and issued export licenses and other approvals to determine their suitability in furthering world peace, national security, and U.S. foreign policy. Additional updates will be provided soon.

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DDTC Continues Temporary Modification To USML Category XI(b)

Aug. 27, 2021 – 86 Fed. Reg. 48021: DDTC announced the continuation until Aug. 30, 2026, of the temporary modification to USML Category XI(b), first announced July 1, 2014 (79 Fed. Reg. 37536), and later extended through a series of rules to Aug. 30, 2021. DDTC noted that this modification continues to be regarded as temporary and that it is working with its partners to develop a long-term wholesale revision of USML Category XI.

The temporary modification to USML Category XI(b) includes reinserting the words “analyze and produce information from” and the addition of software to the description of items controlled.

Department of the Treasury

OFAC Issues Iran General License (GL) M-1, “Authorizing The Exportation Of Certain Graduate-Level Educational Services And Software To Iranian Students”

Aug. 24, 2021: OFAC issued Iran General License (GL) M-1, “Authorizing the Exportation of Certain Graduate-Level Educational Services and Software,” authorizing accredited graduate and undergraduate degree-granting U.S. academic institutions to provide certain online educational services and software to Iranian students who are not physically present in the U.S. due to the COVID-19 pandemic, provided that the software is classified as EAR99 under the EAR or is not subject to the EAR. GL M-1 replaces GL M in its entirety. OFAC also issued FAQ 853, describing the extent to which U.S. academic institutions can provide online learning services and technology companies can provide software and services to assist Iranian students in accessing online coursework under GLs G, M-1, and D-1 and Sec. 560.540 of the Iranian Transactions and Sanctions Regulations (ITSR, 31 CFR Part 560).

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OFAC Issues A Statement That It Will Initiate The Annual Renewal Of Its Website www.treasury.gov

Sep. 27, 2021: OFAC issued an “Important Technical Notice for Users of the OFAC Website and Sanctions List Data Files” stating that the Treasury Department will initiate the annual renewal of the public

certificate securing the www.treasury.gov website, including OFAC sanctions list downloads, on Sep 1, 2021, as the current certificate will expire Sep. 9, 2021. Users whose applications trust the existing certificate should update their configuration to trust the renewed certificate. This notice can be accessed through https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20210827_33; the renewed public certificate can be downloaded at https://s3.amazonaws.com/www.treasury.gov-2021-certificate/www.treasury.gov-2021-2022-Renewed-Certificate.zip.

LATEST SANCTIONS FINES & PENALTIES

Sanctions

Department of Commerce

Aug. 16, 2021 – 86 Fed. Reg. 45703: BIS denied the export privileges of Roger Sobrado, of Lewisburg U.S. Penitentiary, Lewisburg, PA, until Sep. 5, 2029, based on his conviction in the US. District Court for the District of New Jersey of violating 18 USC Sec. 371 by knowingly and intentionally conspiring and agreeing with others to export ITAR-controlled drawings and technical data to one or more foreign nationals without the required authorization from the Department of State. (See more information in September 2019 Regulatory Update.) In the criminal case, Sobrado was sentenced to 36 months in prison, three years of supervised release, a $300 special assessment, and restitution of $8,043,977.

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Aug. 16, 2021 – 86 Fed. Reg. 45704: BIS denied the export privileges of Oben Cabalceta, of Oakdale Federal Correctional Institution, Oakdale, LA, until Sep. 18, 2029, based on his conviction in the U.S. District Court for the District of New Jersey of violating 18 USC Sec. 371 by knowingly and intentionally conspiring and agreeing with others to export ITAR-controlled technical data to one or more foreign nationals without having obtained the required authorization from the Department of State. (See more information in April 2019 Regulatory Update.) In the criminal case, Cabalceta was sentenced to 42 months in prison, two years of supervised release, a $200 special assessment, and restitution of $1,890,939.

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Aug. 16, 2021 – 86 Fed. Reg. 45705: BIS denied the export privileges of Armando Antonio Perez Cepeda, Jr. until Jan. 10, 2022, based on his conviction in the U.S. District Court for the Middle District of Florida of violating 18 USC Sec. 554 by fraudulently and knowingly buying, selling, and facilitating the transportation and sale of a defense article without having obtained the required authorization, contrary to 22 USC Sec. 2278 and 22 CFR Sec. 127.1(a)(1), knowing the same to be intended for exportation in violation of 18 USC Sec. 554. In the criminal case, Cepeda was sentenced to 48 months of probation and a $100 assessment.

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Aug. 16, 2021 – 86 Fed. Reg. 45706: BIS denied the export privileges of Matteo Taerri, a/k/a Majid Taheri, of Atlanta, GA, until June 4, 2030, based on his conviction in the U.S. District Court for the Northern District of Georgia of violating the IEEPA by knowingly and willfully attempting to export a U.S.-origin Prostak Filter Module to Iran without having obtained the required authorization from OFAC. In the criminal case, Taerri was sentenced to time served, supervised release for three years, and a $200 assessment.

Fines and Penalties

Aug. 2, 2021: World Mining and Oil Supply (WMO) of Dacula, GA, pled guilty to violation of the Export Control Reform Act (ECRA, 50 U.S.C. § 4801 et seq.) and its owner, Dali Bagrou, pled guilty to conspiracy in U.S. District Court in Savannah, GA for their roles in a conspiracy to procure a power turbine from a U.S.-based manufacturer and ship it overseas for ultimate use by a Russian company on a Russian Arctic deepwater drilling platform, a use expressly prohibited unless a license has been obtained from the Commerce Department. The parties conspired to conceal the true end-user of the turbine from the U.S. manufacturer and the U.S. Government by submitting false documentation stating that the turbine would be used by a U.S. company in and around Atlanta. Bagrou and co-conspirators Oleg Vladislavovich Nikitin, general director of KS Engineering, an energy company based in St. Petersburg, Russia, and Gabrielle Villone were arrested in Savannah in 2019 while attempting to complete the illegal transaction. Villone is currently serving a 28-month prison sentence after pleading guilty to conspiracy. Bagrou and Nikitin are awaiting sentencing. (See June 2020 and March and May 2021 Regulatory Updates for earlier developments in the prosecution of this conspiracy.)

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Aug. 3, 2021: DDTC has entered into a Consent Agreement (Agreement) with Keysight Technologies, Inc. (Keysight), of Santa Rosa, CA, related to multiple violations of the ITAR. Keysight has agreed to pay a civil fine of $6.6 million (of which $2.5 million will be suspended if Keysight applies that amount to agreed remedial compliance costs) to settle 24 charges by DDTC that it had violated the AECA and ITAR by making unauthorized exports of technical data, including software, to 17 countries including the PRC, a proscribed destination. The charges involved unlicensed exports of Multi-Emitter Scenario Generation (MESG) software, which could be used in modeling and simulating multi-emitter electronic warfare threat scenarios for testing radar equipment on fixed or mobile platforms. DDTC expressed concerns to Keysight that the MESG software might be controlled and recommended that Keysight submit a Commodity Jurisdiction (CJ) request, Keysight submitted the request, and DDTC determined that the software was controlled under U.S. Munitions List Category XI(d). While the CJ was pending, Keysight continued to export the software without a license; however, it treated MESG software as ITAR-controlled after it received the determination. Keysight submitted an initial voluntary disclosure within a month after receiving the CJ and followed with a full disclosure two months later. Keysight subsequently submitted a reconsideration request, but DDTC ruled that the MESG software was controlled under USML Category XI(d).

In addition to payment of the fine, the Agreement also requires Keysight to appoint an outside Special Compliance Officer to serve for a minimum of 2 years, conduct at least one third-party audit, and review the classification of all hardware and software pertaining to its ITAR-related business activities and any related technical data or defense services.

See FD Associates’ Article "The Golden Rule" for more thoughts on the Consent Agreement.

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Aug. 16, 2021: Dynatex International of Santa Rosa, CA, agreed to pay a civil penalty of $469,060 (subject to terms described below) to settle a charge by BIS that it had committed one violation of EAR Sec. 764.2(d) (Conspiracy) when it conspired with others to export semiconductor manufacturing equipment (a DTX-150 MDB scribe and break tool and associated consumables and accessories), valued at $234,530 and designated EAR99, to two companies in China -- Chengdu GaStone Technology Company (CGTC), a.k.a. Chengdu HiWafer Semiconductor, and China Electronics Technology Group Corporation 55th Research Institute (CETC 55) – without the license from the Commerce Department that was required because the two companies were on the Entity List (EAR Part 744, Supp. No. 4). Dynatex was aware that the companies were on the Entity List, but even when it was informed that CGTC’s name should not be shown on shipping documents, it erroneously claimed that the shipments were permissible because CGTC was a customer of the distributor, not Dynatex, and that in any event, Dynatex did not understand the license requirement to apply to consumables and accessories.

Under the terms of the agreement, BIS suspended $419,060 of the penalty for a year and agreed to waive that amount entirely (provided that the $50,000 payment had been made) once Dynatex took one of the following actions:

dissolves or ceases its business operations;
is acquired by a U.S.-based company that meets specified export control requirements; or
completes the one-year probationary period with no further export violations.

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Aug. 31, 2021: Anton Perevoznikov of Brooklyn, NY, was sentenced in Federal District Court for the Eastern District of Pennsylvania to 4 years in prison and 3 years of supervised release based on his October 2018 plea of guilty to one count of conspiracy to unlawfully export defense articles. Perevoznikov conspired with 3 Russian co-conspirators to export technologically sensitive imaging devices without first obtaining the required State Department authorization. To implement the conspiracy, Perevoznikov purchased night vision equipment from a U.S. vendor after acknowledging in writing that he understood that these items were legally precluded from export and falsely affirming that he did not intend to export them. Using funds supplied by his Russian co-conspirators, he ultimately purchased more than 30 pieces of night-vision and thermal-imaging devices worth over $100,000, which he then described falsely on shipping documents using terms including “case box,” “case for camera,” “camera, and soft case,” “photo camera,” “camcorder,” and “jacket.”

AUGUST 2021 EXPORT CONTROL REGULATION UPDATES Read More »