This newsletter is a listing of the latest changes in export control regulations through February 29, 2020. 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 email@example.com 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.
Department of Commerce – Bureau of Industry and Security
BIS Requests Public Comment On The Impact Of The Implementation Of The Chemical Weapons Convention (CWC) On Commercial Activities Involving “Schedule 1” Chemicals
Feb. 13, 2020 – 85 Fed. Reg. 8246: The Bureau of Industry and Security (BIS) invited public comments on the impact of the implementation of the Chemical Weapons Convention (CWC) on commercial activities involving “Schedule 1” chemicals (including “Schedule 1” chemicals produced as intermediates) during calendar year 2019. The information will assist BIS in preparing a required annual certification to Congress about whether this implementation harms the legitimate commercial activities and interests of chemical, biotechnology, and pharmaceutical firms. Public comments should include both a quantitative and a qualitative assessment of the impact of the CWC on these activities.
BIS Extends Validity Of Temporary General License (TGL) Related To Huawei
Feb. 18, 2020 – 85 Fed. Reg. 8722: BIS extended through April 1, 2020, the validity of the Temporary General License (TGL) authorizing certain exports to Huawei Technologies Co. Ltd., and 114 of its non-U.S. affiliates (collectively “Huawei”), which was codified as Supplement No. 7 to EAR Part 744 on May 20, 2019, and subsequently extended in August and November 2019. (See additional information about this TGL in November 2019 Regulatory Update.)
BIS Posts 18 Huawei Entity List and Temporary General License FAQs
Feb. 18, 2020: BIS posted 18 “Huawei Entity List and Temporary General License FAQs” on its website at https://www.bis.doc.gov/index.php/documents/pdfs/2447-huawei-entity-listing-faqs/file. In a separate document on the same date, BIS also posted 8 “Huawei Temporary General License Extension FAQs” at https://www.bis.doc.gov/index.php/documents/pdfs/2446-huawei-entity-list-temporary-general-license-extension-faqs/file.
BIS Amends The EAR To Tighten Rules On Russia and Yemen
Feb. 24, 2020 – 85 Fed. Reg. 10274: BIS amended the Export Administration Regulations (EAR, 15 CFR Parts 730-774) to toughen the rules for exports to Russia and Yemen by changing their designations on the Country Group chart (Supplement No. 1 to EAR Part 740) and the Commerce Country Chart (Supplement No. 1 to EAR Part 738) and by changing licensing policies and tightening end-use controls.
Specifically, on the Country Group chart Russia was removed from Country Groups A:2 (Missile Technology Control Regime) and A:4 (Nuclear Suppliers Group), which provide relatively favorable treatment for exports of covered items, and added to Country Groups of concern D:2 (Nuclear) and D:4 (Missile Technology), which subject covered items to more stringent controls. Also, on the Commerce Country Chart Russia was added to Column NP1 (Nuclear Nonproliferation), resulting in increased controls.Also, Yemen was removed from Country Group B on the Country Group Chart and added to Country Group D:1 (National Security), resulting in the loss of availability of many license exceptions.
These changes have many implications regarding license requirements, changes in licensing policy, availability of exceptions, and others. Contact us about their effect on specific contemplated exports to Russia or Yemen.
BIS Controls Coronavirus, SARS-CoV-2
In an undated notice, BIS announced that it will continue to classify the virus causing the current outbreak of coronavirus disease, SARS-CoV-2, and its specific genetic elements as EAR99, and that therefore, an export license is generally not required for the export of this virus to most destinations. However, BIS reminded exporters that the EAR nonetheless requires a license for the export of EAR99 items to certain end-users, end-uses, and destination countries. This notice is on the BIS website at https://www.bis.doc.gov/index.php/documents/pdfs/2532-severe-acute-respiratory-syndrome-coronavirus-2-sars-cov-2-faq/file.
Department of State
DDTC Name and Address Changes Posted To Website
Feb. 5, 7, 13, 18, 20, 25, and 27, 2020: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at
- As a result of corporate rebranding, P3 entities changed names as follows:
|Former Name||New Name|
|P3 Group AG||umlaut AG|
|P3 Engineering Holding GmbH||umlaut Engineering Holding GmbH|
|P3 Engineering GmbH (DE)||umlaut Engineering GmbH|
|P3 GROUP SARL (FR)||umlaut SARL|
|P3 CONS ENG Pvt. Ltd. (IN)||umlaut Pvt. Ltd.|
|P3 Aviation GmbH||umlaut Consulting GmbH|
|P3 Communications GmbH||umlaut Communications GmbH|
|P3 North America Inc.||umlaut Inc.|
- Change in Name from GE Aviation Systems Limited (GEASL) to Hamble Aerostructures Limited (HAL) due to corporate rebranding;
- Bristow Group, Inc. changed address;
- Alion Science and Technology Corporation changed address;
- Change in Name from DRS Power Technology, Inc. to DRS Naval Power Systems, Inc. due to corporate reorganization;
- Change in Name from Nammo Talley Inc. to Nammo Defense Systems Inc. due to corporate reorganization;
- Change in Name from DSCHULNIGG GmbH & Co KG to GTML GmbH due to corporate rebranding;
- Change in Name from Intermes BV to Trescal Hengelo BV due to corporate reorganization; and
- Change in Name from San Swiss Arms AG to Sig Sauer AG due to corporate rebranding.
Each announcement includes a link to a notice detailing the change and its effects on pending and currently approved authorizations involving the listed entity.
DDTC Implements DECCS
Feb. 18, 2020: DDTC announced the commencement of operations of the Defense Export Control and Compliance System (DECCS), a single, cloud-based portal that will replace the DETRA, DTRADE, EFS, ELLIE, and MARY systems. Currently the Registration, Licensing, Advisory Opinions, and Commodity Jurisdiction applications are live in DECCS. This announcement, including a user sign-up link and a link to a DECCS Enrollment User Guide, are on the DDTC website at https://www.pmddtc.state.gov/deccs.
A link to FAQs about many aspects of DECCS is at https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_faq_landing, and a DECCS Webinar for Corporate Administrators is at https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=9f80f5d0db878c147ede365e7c9619c8.
DDTC Adds Two New FAQs On Defense Services and U.S. Persons Abroad
Feb. 19, 2020: DDTC added two new FAQs to its collection of FAQs on Defense Services and U.S. Persons Abroad, both regarding voluntary disclosure aspects of requests for authorization for defense services that the applicant is already performing overseas. These FAQs are included in a compilation of 16 FAQs on Defense Services and U.S. Persons Abroad on the DDTC website at https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=2e58f110db838c14529d368d7c96193a.
DDTC Published A Summary Of Changes To International Traffic In Arms Regulations - Encryption Rule
Feb. 20, 2020: DDTC published a “Summary of Changes to International Traffic in Arms Regulations - Encryption Rule” clarifying the changes to the ITAR made on Dec. 26, 2019, with respect to activities that are not exports, reexports, retransfers, or temporary imports (84 Fed. Reg. 70887 – see December 2019 Regulatory Update). This 2 page document, which focuses on issues regarding encryption, is on the DDTC website at https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=dd2ecd1adbcbc8105564ff1e0f9619f2.
Department of the Treasury
OFAC Issues Mali Sanctions
Feb. 7, 2020 – 85 Fed. Reg. 7223: The Office of Foreign Assets Control (OFAC) issued the Mali Sanctions Regulations, codified as 31 CFR Part 555, to implement Executive Order 13882 of July 26, 2019, “Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Mali.”
Treasury Publishes Lists Of Countries That Require Or May Require Participation In, Or Cooperation With, An International Boycott
Feb. 10, 2020 – 85 Fed. Reg. 7618: The Treasury Department published its quarterly list of countries that require or may require participation in, or cooperation with, an international boycott. The list remains unchanged since it was last published. It includes Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, the United Arab Emirates (UAE), and Yemen.
OFAC Issues Venezuela-related General License (GL) 36
Feb. 18, 2020: OFAC issued Venezuela-related General License (GL) 36, “Authorizing Certain Activities Necessary to the Wind Down of Transactions Involving Rosneft Trading S.A.,” valid until May 20, 2020. At the same time, OFAC also published two FAQs regarding issues including the scope of the applicability of GL 36 to companies related to Rosneft. GL 36 is on the OFAC website at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/venezuela_gl36.pdf; FAQs 817 and 818 are at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#817.
Feb. 19, 2020: OFAC released its Second Quarter FY2019 Quarterly Report of Licensing Activities pursuant to Section 906(b) of the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA). The report covers OFAC’s activities regarding license applications for exports of agricultural commodities, medicine, and medical devices to Iran and Sudan. The report is on the OFAC website at https://www.treasury.gov/resource-center/sanctions/Documents/2quarter2019.pdf.
OFAC Published Two FAQs Related To The Reporting, Procedures And Penalties Regulations
Feb. 20, 2020: OFAC published two FAQs related to the Reporting, Procedures and Penalties Regulations (RPPR, 31 CFR Part 501). The FAQs relate to updated instructions and new requirements for parties filing reports on blocked property, unblocked property, or rejected transactions that were included in a June 21, 2019, amendment to the RPPR (June 21, 2019 – 84 Fed. Reg. 29055). (See June 2019 Regulatory Update.) The new FAQs are on the OFAC website at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#819.
OFAC Issued General License 8 Authorizing Certain Humanitarian Trade Transactions Involving The Central Bank of Iran
Feb. 27, 2020: OFAC issued General License 8 “Authorizing Certain Humanitarian Trade Transactions Involving the Central Bank of Iran” under the Global Terrorism Sanctions Regulations (GTSR, 31 CFR Part 594) and the Iranian Transactions and Sanctions Regulations (ITSR, 31 CFR Part 560). GL 8 authorizes certain transactions with the Central Bank of Iran under limited, carefully specified circumstances. GL 8 is on the OFAC website at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/gtsr_gl8.pdf, and 6 related FAQs are at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_iran.aspx#821.
|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 firstname.lastname@example.org.
Fines and Penalties
Jan. 14, 2020: Kuwait Airways Corporation (New Jersey) (Kuwait Airways) agreed to pay a civil penalty of $700,000 (of which $100,000 shall be suspended) to settle charges by BIS of 14 violations of EAR Sec. 760.2(a) by refusing to do business with a national or resident of a boycotted country pursuant to an agreement with a request from or on behalf of a boycotting country. Specifically, the violations consisted of 14 occasions when Kuwait Airways refused to accept individuals who were holders of Israeli passports as passengers on a Kuwait Airways flight from Kennedy Airport in New York to London Heathrow Airport.
Feb. 11, 2020: Nicholas Hovan of New York, NY; Zhenyu Wang, a/k/a “Bill Wang,” of Dallas, TX; Robert Thwaites of Dallas, TX; Nicholas James Fuchs of Dallas, TX; and Daniel Ray Lane of McKinney, TX were arrested and charged with conspiracy and violating the International Emergency Economic Powers Act (IEEPA, 50 USC Sec. 1701 -1707) based on allegations that they conspired to arrange for the purchase of oil from the Islamic Republic of Iran, in violation of the U.S. economic sanctions imposed on Iran, for sale to a refinery in China.
Feb. 14, 2020: Wei Sun, a former engineer at Raytheon Missile Systems in Tucson, AZ, pleaded guilty to violating the Arms Export Control Act (AECA, 22 USC 2778 et seq.) and the International Traffic in Arms Regulations (ITAR, 22 CFR Parts 120-130) by carrying his company-owned laptop that included an ITAR-controlled user’s guide to a component of Raytheon’s Advanced Medium Range Air-to-Air Missile (ARAAM) as well as security software that itself was subject to the ITAR to China without the required export authorization.
Feb. 18, 2020: Cho Yan Nathan Man, a Chinese national, was arraigned in federal court in Washington, DC on an indictment charging him with violating the AECA and the ITAR by attempting to export and/or causing the export of defense articles including enhanced night vision goggles and several types of lasers to Hong Kong without the required authorization. Man was also charged with money laundering in connection with these transactions. Man was arrested in Switzerland on June 13, 2019 and extradited to the U.S. on Feb. 14, 2020. The court ordered him to be detained pending trial.
Feb. 24, 2020: Apichart Srivaranon, a national of Thailand, was removed to Thailand by U.S. Immigration and Customs Enforcement’s (ICE) Enforcement and Removal Operations. Srivaranon had been sentenced to 26 months in prison after pleading guilty in both Maryland and the District of Columbia to conspiring to violate the AECA and attempting to export firearms parts to Thailand. He purchased firearms parts including key components for AR-15 and M-16 military-style assault rifles on the Internet and had them sent to various co-conspirators in the U.S. who repackaged the parts, labeled and declared them on shipping documents falsely, and shipped them to Thailand via USPS and private shipping companies. He was arrested in Las Vegas, NV after flying from Thailand to attend a trade show unrelated to the charges in the case.
Feb. 26, 2020: OFAC announced that Société Internationale de Télécommunications Aéronautiques SCRL (“SITA”) of Geneva, Switzerland, a service provider for the civilian air transportation industry, had agreed to pay $7,829,640 to settle its potential civil liability for 9,256 apparent violations of the GTSR. The violations involved the provision of services and software that were subject to U.S. jurisdiction that benefited SITA member airlines that had been designated as Global Terrorists.