FEBRUARY 2022 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

 

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

 

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