This newsletter is a listing of the latest changes in export control regulations through February 28, 2023. The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.
See also our “Latest Sanctions Fines & Penalties” section below for an update on companies and persons denied export privileges by the United States Government.
REGULATORY UPDATES
President
President Biden Continued The National Emergency Regarding Afghanistan
February 3, 2023: 88 Fed. Reg. 7837: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency declared in Executive Order 14064 with respect to the widespread humanitarian crisis in Afghanistan and the potential for a deepening economic collapse in Afghanistan.
Note: Afghanistan continues to remain an arms embargoed country under the ITAR.
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President Biden Continued The National Emergency Regarding Burma (Myanmar)
February 3, 2023: 88 Fed. Reg. 8205: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency declared in Executive Order 14014 with respect to the situation in and in relation to Burma.
Note: Burma aka Myanmar, continues to remain an Arms Embargoed country under the ITAR
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President Biden Continued The National Emergency Regarding Cuba
February 21, 2023: 88 Fed. Reg. 10821: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued the national emergency with respect to Cuba and the emergency authority relating to the regulation of the anchorage and movement of vessels set out in Proclamation 6867 of March 1, 1996, as amended by Proclamation 7757 of February 26, 2004, Proclamation 9398 of February 24, 2016, and Proclamation 9699 of February 22, 2018.
Note: Cuba continues to be an arms-embargoed country under the ITAR and is subject to associated sanctions under the EAR and economic sanctions under the Office of Foreign Assets Controls
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President Biden Continued The National Emergency Regarding Libya
February 21, 2023: 88 Fed. Reg. 10823: In accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden has continued for one year the national emergency declared in Executive Order 13566 of February 25, 2011, and expanded in Executive Order 13726 of April 19, 2016.
Note: Libya continues to be an arms embargo country under the ITAR
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President Biden And The White House Have Issued A Memorandum On the United States Conventional Arms Transfer Policy
February 23, 2023: President Biden and the White House has issued a Memorandum on the United States Conventional Arms Transfer (CAT) Policy, a key guidance document building on the October 2022 National Security Strategy that articulates the framework under which U.S. government agencies review and evaluate proposed arms transfers to allies and partners worldwide. The CAT Policy reflects the Biden-Harris Administration’s foreign policy vision and priorities of prevailing in an era of complex strategic competition by leading with diplomacy, renewing alliances, elevating human rights, and delivering for the American people through support and advocacy for U.S. industry. Under the Biden-Harris Administration’s revised CAT Policy, the United States will exercise restraint and promote norms and controls for the responsible international transfer of conventional arms. The United States will continue considering arms transfers on a case-by-case basis, taking into account the full spectrum of U.S. foreign policy and national security interests. In an increasingly competitive market, the U.S. Government will promote transfers when they are in the U.S. national interest, in line with the considerations of the CAT Policy, applicable export control laws and regulations, and consistent with defense trade advocacy procedures.
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President Biden Raised Tariffs On Certain Russian Products
February 24, 2023: President Biden raised tariffs on certain Russian products imported to the United States, building on previous efforts to strip Russia of its international trade privileges. These measures are designed to target key Russian commodities generating revenue for the Kremlin while reducing U.S. reliance on Russia. These measures are carefully calibrated to impose costs on Russia while minimizing costs to U.S. consumers. This action will result in increased tariffs on more than 100 Russian metals, minerals, and chemical products worth approximately $2.8 billion to Russia. It will also significantly increase costs for aluminum that was smelted or cast in Russia to enter the U.S. market in order to counter harm to the domestic aluminum industry, which is being squeezed by energy costs as a result of Russia’s invasion of Ukraine.
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Department of State, Directorate of Defense Trade Controls (DDTC)
Department of State Responds To Public Comments On Interim Final Rule Regarding Reorganization of ITAR Part 120 And Made Minor Amendments
February 27, 2023: 88 Fed. Reg. 12210: The Department of State published an interim final rule on March 23, 2022, effective September 6, 2022, amending the International Traffic in Arms Regulations (ITAR) to better organize the purposes and definitions of the regulations. After reviewing the comments received in response to that interim final rule, the Department is now responding to public comments and finalizing the interim final rule, including making minor amendments to 22 CFR §§ 120.13(registration) and 120.40 (compositional items). This rule is effective February 27, 2023.
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DDTC Name And Address Changes Posted To Website
February 1 through 27, 2023: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at
- Change in Address from General Dynamics United Kingdom Limited at Units 3&4 Bryn Brithdir, Oakdale Business Park, Blackwood NP12 4AA to Units 1&3 Bryn Brithdir, Oakdale Business Park, Blackwood NP12 4AD;
- Change in Address from Raytheon Technologies Corporation at 870 Winter Street, Waltham, Massachusetts 02451 to 1000 Wilson Blvd., Arlington, Virginia 22209;
- Change in Names from Zenetex LLC, Delex Systems and V2X, Inc., to Vectrus Systems Corporation due to dissolution;
- Change in Address from Kokusai AeroMarine Co., Ltd. at 5-2, 2-Chome NishiShinbashi, Minato-Ku, Tokyo, 105-0003 Japan to 10-6, 1-Chome, Shinbashi, Minato-Ku, Tokyo, 105-0004 Japan;
- Change in Name from Harris Global Communications Inc. to L3Harris Global Communications Inc., due to merger;
- Change in Name from Pilatus Defence Solutions Australia Pty Ltd to Pilatus Training Solutions Australia Pty Ltd. due to corporate rebranding;
- Change in Name from Raytheon Technical Services International Company to Vertex Technical Services International Company due to acquisition;
- Change in Name from Colt Defense LLC to Colt’s Manufacturing Company LLC due to dissolution;
- Change in Name from umlaut SARL to umlaut SAS due to change in corporate structure;
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The Department Of State Designates Tehrik-e Taliban Pakistan, Hizbul Mujahideen, And Army of Islam (And Other Aliases) As Foreign Terrorist Organizations
February 16, 2023: 88 Fed. Reg. 10171: Based on a review of the Administrative Records assembled pursuant to Section 219(a)(4)(C) of the Immigration and Nationality Act, amended (8 U.S.C. 1189(a)(4)(C))(“INA”), and in consultation with the Attorney General and the Secretary of the Treasury, Secretary of State Antony Blinken has concluded that the circumstances that were the bases for the designations of Tehrik-e Taliban Pakistan, Hizbul Mujahideen, and Army of Islam (and Other Aliases) as Foreign Terrorist Organizations have not changed in such a manner as to warrant revocation of the designations and that the national security of the United States does not warrant a revocation of the designations.
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U.S. Department of Commerce and U.S. Department of Justice
The Department Of Justice And The Department Of Commerce Are Launching The Disruptive Technology Strike Force
February 16, 2023: The Department of Justice and the Department of Commerce are launching the Disruptive Technology Strike Force. Under the leadership of the Justice Department’s National Security Division and the Commerce Department’s Bureau of Industry and Security (BIS), the strike force will bring together experts throughout government – including the FBI, Homeland Security Investigations (HSI) and 14 U.S. Attorneys’ Offices in 12 metropolitan regions across the country – to target illicit actors, strengthen supply chains and protect critical technological assets from being acquired or used by nation-state adversaries.
The strike force will be co-led by Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division and Assistant Secretary for Export Enforcement Matthew Axelrod of the Department of Commerce’s Bureau of Industry and Security.
When acquired by nation-state adversaries such as the People’s Republic of China, Iran, Russia, and North Korea, advanced technologies can be used in new or novel ways to enhance their military capabilities or support mass surveillance programs that enable human rights abuses. End users of national security concern seek technologies, including those related to supercomputing and exascale computing, artificial intelligence, advanced manufacturing equipment and materials, quantum computing, and biosciences. Although they have important commercial uses, technologies in these fields can threaten U.S. national security when used by adversaries for disruptive purposes, such as improving calculations in weapons design and testing; improving the speed and accuracy of military or intelligence decision-making; and breaking or developing unbreakable encryption algorithms that protect sensitive communications and classified information.
The strike force’s work will focus on investigating and prosecuting criminal violations of export laws; enhancing administrative enforcement of U.S. export controls; fostering partnerships with the private sector; leveraging international partnerships to coordinate law enforcement actions and disruption strategies; utilizing advanced data analytics and all-source intelligence to develop and build investigations; conducting regular training for field offices; and strengthening connectivity between the strike force and the Intelligence Community.
The strike force will operate in 12 metropolitan regions across the United States, with oversight and support from the local U.S. Attorneys’ Offices in Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York City (Southern and Eastern Districts of New York), San Jose, Calif., Phoenix, Portland, Ore., and the Washington, D.C. region (District of Columbia and the Eastern District of Virginia).
Department of Commerce – Bureau of Industry and Security (BIS)
BIS Published A Report On The Effect Of Imports Of Neodymium-Iron-Boron (Ndfeb) Permanent Magnets On The National Security Of The United States
February 14, 2023: 88 Fed. Reg. 9430: The Bureau of Industry and Security (BIS) published a report that summarizes the findings of an investigation conducted by the U.S. Department of Commerce (the “Department”) pursuant to section 232 of the Trade Expansion Act of 1962, as amended (“section 232”), into the effect of imports of neodymium-iron-boron (NdFeB) permanent magnets on the national security of the United States. This report was completed in June 2022 and posted on the BIS website in September 2022. BIS has not published the appendices to the report in this notification of report findings, but they are available online at the BIS website, along with the rest of the report.
https://www.federalregister.gov/documents/2023/02/14/2023-03078/publication-of-a-report-on-the-effect-of-imports-of-neodymium-iron-boron-ndfeb-permanent-magnets-on and https://www.bis.doc.gov/index.php/documents/section-232-investigations/3141-report-1/file and https://www.bis.doc.gov/index.php/documents/section-232-investigations/3142-2022-09-fact-sheet-biden-harris-administration-announces-actions-to-secure-rare-earth-element/file
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BIS Seeks Comments On Licensing Procedures For The Export And Reexport Of Agricultural Commodities To Cuba
February 17, 2023: 88 Fed. Reg. 10286: The Bureau of Industry and Security (BIS) is requesting public comments on the effectiveness of its licensing procedures as defined in the Export Administration Regulations (EAR) for the export and reexport of agricultural commodities to Cuba. BIS will include a description of any comments it receives in its biennial report to Congress, as required by the Trade Sanctions Reform and Export Enhancement Act of 2000, as amended (TSRA). Comments must be received by March 20, 2023.
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BIS Expedites Processing Of Export License Applications For Items Needed To Aid Survivors Of Turkish/Syria Earthquake
February 17, 2023: In response to the devastating earthquake on February 6, 2023, that has heavily impacted Türkiye and Syria, the Department of Commerce’s Bureau of Industry and Security (BIS) has expedited the processing of export license applications for items needed to aid survivors. These export and reexport license requirements should not prevent or otherwise impede the shipment of aid and recovery-related items intended directly for the Syrian people or through nongovernmental humanitarian organizations (NGOs) in-country, including in areas under the control of the Assad regime and non-state actors. Examples of items eligible for expedited licensing include heavy equipment, telecommunications hardware and software, portable generators and other power generation equipment, medical devices, water purification and sanitation equipment, and shelter materials.
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BIS Updates the EAR Pursuant To Wassenaar Arrangement Meetings In December of 2021.
February 24, 2023: 88 Fed. Reg. 12108: The Department of Commerce, Bureau of Industry and Security (BIS) maintains, as part of its Export Administration Regulations (EAR), the Commerce Control List (CCL), which identifies certain items subject to Department of Commerce jurisdiction. During the December 2021 Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (WA) Plenary meeting, Participating States of the WA (Participating State) made certain decisions affecting the WA control lists, which BIS is now implementing via amendments to the CCL. On August 15, 2022, BIS published a final rule that implemented some of these decisions by adding to the CCL four technologies that met the criteria for emerging or foundational technologies under Section 1758 of the Export Control Reform Act of 2018 (ECRA). These technologies are two substrates of ultra-wide bandgap semiconductors (Gallium Oxide (Ga2 O3) and diamond), Electronic Computer Aided Design (ECAD) software specially designed for the development of integrated circuits with any Gate-All-Around Field-Effect Transistor (GAAFET) structure, and pressure gain combustion (PGC) technology for the production and development of gas turbine engine components or systems. This final rule implements the remaining controls agreed to during the December 2021 WA Plenary meeting by revising the CCL, as well as certain EAR provisions, including License Exception Adjusted Peak Performance (APP). This final rule also makes corrections to align the scope of Significant Item (SI) license requirements throughout the EAR and makes a revision to License Exception Strategic Trade Authorization (STA). This rule is effective February 24, 2023.
Department of Treasury
CFIUS Committee Published Determinations That New Zealand And The United Kingdom Have Established And Are Effectively Controlling Investment Security, Allowing Them To Be Deemed An Excepted Foreign State
February 13, 2023: 88 Fed. Reg. 9190: The Department of the Treasury, as Chair of the Committee on Foreign Investment in the United States, has published the Committee's determinations that New Zealand and the United Kingdom have established and are effectively utilizing a robust process to analyze foreign investments for national security risks and to facilitate coordination with the United States on matters relating to investment security. This determination satisfies the second criterion in the definition of an excepted foreign state under 31 CFR 800.218 with respect to New Zealand and the United Kingdom of Great Britain and Northern Ireland. Therefore, New Zealand and the United Kingdom of Great Britain and Northern Ireland are and will remain excepted foreign states absent further Committee action and notice in the Federal Register. These determinations are effective February 10, 2023.
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Department of the Treasury, Office of Foreign Assets Control (OFAC)
OFAC Publishes Fact Sheet “Disrupting And Degrading – One Year Of U.S. Sanctions On Russia And Its Enablers”
February 24, 2023: The Department of the Treasury's Office of Foreign Assets Control (OFAC) published a fact sheet titled, “Disrupting and Degrading – One Year of U.S. Sanctions on Russia and Its Enablers.” This fact sheet summarizes the actions that OFAC and U.S. allies have taken to make it harder and costlier for the Kremlin to obtain the capital, materials, technology, and support it needs to sustain its war of aggression.
https://home.treasury.gov/news/press-releases/jy1298
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OFAC Issued A Humanitarian Assistance Fact Sheet
February 27, 2023: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued a humanitarian assistance fact sheet, Supplemental Guidance for the Provision of Humanitarian Assistance. This 2023 fact sheet supplements OFAC’s 2014 Guidance Related to the Provision of Humanitarian Assistance by Not-for-Profit Non-Governmental Organizations. OFAC issued this 2023 Fact Sheet to provide guidance on the reach of economic sanctions for persons involved in the conduct of humanitarian-related activities, including the U.S. government (USG); international organizations and entities (IOs); nongovernmental organizations (NGOs); persons involved in the provision of food, other agricultural commodities, medicine, and medical devices (Ag-Med); and financial institutions and other service providers who support or facilitate transactions for such persons.
https://home.treasury.gov/system/files/126/supplemental_ngo_humanitarian.pdf and https://home.treasury.gov/system/files/126/ngo_humanitarian.pdf
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U.S. Census Bureau
Tips on How to Resolve AES Response Messages
February 16, 2023: Census published the following tip:
When a shipment is filed to the AES, a system response message is generated and indicates whether the shipment has been accepted or rejected. If the shipment is accepted, the AES filer receives an Internal Transaction Number (ITN) as confirmation. Though the shipment is accepted, the filer may still receive a Verify Message, Compliance Alert, Informational Message, or Warning Message along with their ITN. However, if the shipment is rejected, a Fatal Error notification is received and must be corrected to receive a valid ITN.
To help you take the appropriate action for the different AES Response Messages, here are some tips on how to address the most frequent messages that were generated in AES for this month.
Response Code: 512
Narrative: ECCN Missing
Severity: Fatal
Reason: The License Code/License Exemption Code requires an Export Control Classification Number (ECCN), but it was not reported.
Resolution: The License Code/License Exemption Code requires the reporting of an ECCN. See ‘Appendix F – License and License Exemption Type Codes’ and reporting guidelines.
Verify the License Code/License Exemption Code requirements, correct the shipment, and resubmit.
Response Code: 8W1
Narrative: Shipping Weight/Quantity 1 Out of Range
Severity: Verify
Reason: For the reported Schedule B/HTS Number, the Shipping Weight/Quantity (1) ratio is outside of the expected range.
Resolution: For a particular Schedule B/HTS Number reported, the shipping weight divided by the first quantity should fall within a certain parameter based on historical statistical averages for that commodity. Ratios outside this pre-determined parameter might indicate either a keying error or misclassification of the product. Verify the Shipping Weight, Quantity 1, and Schedule B/HTS Number, correct the shipment and resubmit (if necessary). If the line item is verified correctly as reported, no action is necessary.
U.S. Department of Defense
DSCA Notifies Congress Of Potential FMS Sale To Poland
February 7, 2023: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) has notified Congress that the Republic of Poland has requested to buy eighteen (18) M142 High Mobility Artillery Rocket System (HIMARS) launchers; four hundred sixty-eight (468) HIMARS Launcher Loader Module kits; forty-five (45) M57 Army Tactical Missile Systems (ATACMS); four hundred sixty-one (461) M30A2 Guided Multiple Launch Rocket System Alternative Warhead (GMLRS-AW) pods with Insensitive Munitions Propulsion System (IMPS); five hundred twenty-one (521) M31A2 Guided Multiple Launch Rocket System Unitary (GMLRS-U) pods with Insensitive Munitions Propulsion System (IMPS); and five hundred thirty-two (532) XM403 Guided Multiple Launch Rocket System Extended Range Alternative Warhead (GMLRS-ER AW) pods. Also included are Low Cost Reduced Range Practice Rockets; support equipment; communications equipment; spare and repair parts; test sets; batteries; laptop computers; publications and technical data; facility design; personnel training and equipment; systems integration support; Quality Assurance Teams and a Technical Assistance Fielding Team; United States Government and contractor engineering and logistics personnel services; training; sensors; and other related elements of logistics and program support. The total estimated cost is $10 billion.
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DSCA Notifies Congress Of Potential FMS Sale To Singapore
February 9, 2023: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Singapore has requested to buy one hundred (100) KMU-556 Tail Kits for Joint Direct-Attack Munition (JDAM) GBU-31; nine hundred (900) KMU-572 Tail Kits for JDAM GBU-38 and Laser JDAM GBU-54; two hundred fifty (250) MAU-169 Computer Control Group for 500lb Paveway-II (PWII) GBU-12; and two hundred fifty (250) MXU-650 Air Foil Group for 500lb PWII GBU-12. Also included are DSU-38 laser guidance sets; Common Munitions Built-In-Test (BIT)/Reprogramming Equipment (CMBRE); spare parts, consumables, and accessories, and repair and return support; aircraft and munitions support and support equipment; personnel training and training equipment; unclassified software; unclassified technical books and other publications; U.S. Government and contractor engineering, technical and logistics support services, studies and surveys; and other related elements of logistical and program support. The estimated total cost is $55 million.
https://www.dsca.mil/press-media/major-arms-sales/singapore-air-ground-munitions-kits-and-services
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DSCA Notifies Congress Of Potential FMS Sale To Kuwait
February 14, 2023: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Kuwait has requested to buy planning, integration, implementation, and maintenance of a Medical Information System for its Kuwait Military Medical Command (KMMC) that consists of Health Information Systems Information Technology (IT) hardware and software, IT infrastructure, implementation of life-cycle management practices, training, maintenance, support, and warranty services, along with U.S. Government and contractor engineering, technical and logistics support services; and other related elements of logistical and program support. The estimated total cost is $250 million.
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DSCA Notifies Congress Of Potential FMS Sale To The Netherlands
February 16, 2023: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of The Netherlands has requested a possible purchase of twenty (20) M142 High Mobility Artillery Rocket System (HIMARS) launchers; thirty-nine (39) M30A2 Guided Multiple Launch Rocket System (GMLRS) Alternative Warhead (AW) Missile Pods with Insensitive Munitions Propulsion System (IMPS); thirty-eight (38) M31A2 GMLRS Unitary (GMLRS-U) High Explosive (HE) Missile Pods with IMPS; eighty (80) M57 Army Tactical Missile System (ATACMS) Missile Pods; and seventeen (17) M1152A1 High Mobility Multipurpose Wheeled Vehicles (HMMWVs). Also included are M28A2 Reduced Range Practice Rocket (RRPR) pods; radios with similar “SINCGARS” capability, including vehicular dual long-range radio systems w/GPS; single radio, long range vehicular system w/GPS; High Frequency/VHF radios; M1084A2 cargo trucks, Family of Medium Tactical Vehicles (FMTVs) Resupply Vehicles (RSVs); M1089A2 wrecker truck, FMTVs; M1095 5-ton trailer FMTVs; Simple Key Loaders (SKLs), AN/PYQ-10; Defense Advanced Global Positioning System Receivers (DAGRs); machine gun mounts; battle management systems, Vehicle Integration Kits, ruggedized laptops, and training equipment publications for HIMARS and munitions; camouflage screen and support systems; support equipment; communications equipment; spare and repair parts; test sets; training and training equipment; publications; systems integration support; technical data; Stockpile Reliability, Quality Assurance and Technical Assistance teams; U.S. Government and contractor technical, engineering, and logistics support services; and other related elements of logistical and program support. The total estimated cost is $670 million. The principal contractor will be Lockheed Martin, Grand Prairie, TX. There are no known offset agreements proposed in connection with this potential sale.
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DSCA Notifies Congress Of Potential FMS Sale To Australia
February 28, 2023: The U.S. Department of Defense's Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Australia has requested to buy up to sixty-three (63) Advanced Anti-Radiation Guided Missiles-Extended Range (AARGM-ERs); and up to twenty (20) AARGM-ER Captive Air Training Missiles (CATMs). Also included are AGM-88G Advanced Anti-Radiation Guided Missile-Extended Range Dummy Air Training Missiles (AARGM-ER DATMs), containers, component parts, and support equipment; Repair of Repairables; software (Classified and Unclassified); publications (Classified and Unclassified); training (Classified and Unclassified); transportation; U.S. Government and Contractor engineering support; and other related elements of logistical and program support. The estimated total cost is $506 million. The prime U.S. contractor will be the Javelin Joint Venture between Lockheed Martin in Orlando, FL, and Raytheon Missiles and Defense in Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.
https://www.dsca.mil/major-arms-sales/archive-date/202302
| LATEST SANCTIONS FINES & PENALTIES |
This section of our newsletter provides information on the latest sanctions, fines, and penalties for export violations or matters of non-compliance with the ITAR or EAR issued by the US government enforcement agencies. It is provided as a service to exporters and associates of FD Associates to remind them of the importance of extreme due diligence in all international trade and export compliance matters, particularly those involving exports subject to the ITAR or the EAR. Don't let this happen to you or your company! Call us with questions or concerns at 703-847-5801 or email info@fdassociates.net.
Sanctions
Department of Commerce, Bureau of Industry and Security (BIS)
February 1, 2023: 88 Fed. Reg. 6621: The Department of Commerce, Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) by adding seven entities to the Entity List. These seven entities, listed under the destination of Iran, have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States for contributing to Russia's military and defense industrial base. They are being added to the Entity List with the application of the Russia/Belarus-Military End User Foreign Direct Product rule.
- Design and Manufacturing of Aircraft Engines (DAMA);
- Islamic Revolutionary Guard Corps Aerospace Force;
- Islamic Revolutionary Guard Corps Research and Self-Sufficiency Jihad Organization;
- Oje Parvaz Mado Nafar Company;
- Paravar Pars Company;
- Qods Aviation Industry; and
- Shahed Aviation Industries.
https://www.federalregister.gov/documents/2023/02/01/2023-02130/additions-to-the-entity-list
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February 14, 2023: 88 Fed. Reg. 9389: The Department of Commerce, Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) by adding six entities to the Entity List, under the destination of the People's Republic of China (China). These six entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States.
These entities are being added for their support to China's military modernization efforts, specifically the People's Liberation Army's (PLA) aerospace programs, including airships and balloons and related materials and components. The PLA utilizes High Altitude Balloons (HAB) for intelligence and reconnaissance activities. This activity is contrary to U.S. national security and foreign policy interests under § 744.11 of the EAR. For these six entities, BIS imposes a license requirement for all items subject to the EAR and will review license applications under a presumption of denial.
The following entities have been added to the Entity List:
- Beijing Nanjiang Aerospace Technology Co., Ltd.;
- China Electronics Technology Group Corporation 48th Research Institute;
- Dongguan Lingkong Remote Sensing Technology Co., Ltd.;
- Eagles Men Aviation Science and Technology Group Co., Ltd. (EMAST);
- Guangzhou Tian-Hai-Xiang Aviation Technology Co., Ltd.; and
- Shanxi Eagles Men Aviation Science and Technology Group Co., Ltd.
https://www.federalregister.gov/documents/2023/02/14/2023-03193/additions-to-the-entity-list
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February 27, 2023: 88 Fed. Reg. 12175: The Department of Commerce, Bureau of Industry and Security (BIS) revised the EAR to enhance and strengthen the existing sanctions against Russia and Belarus by expanding the scope of the Russian and Belarusian industry sector sanctions and the `luxury goods' sanctions to better align them with the controls that have been implemented by U.S. allies and partners imposing substantially similar controls on Russia and Belarus. For similar policy reasons, this rule also refines other existing controls on Russia and Belarus that were imposed in response to the February 2022 further invasion of Ukraine. The regulatory changes include:
- Revisions to the sanctions under Supplement No. 2 to EAR Part 746 to make conforming changes with other supplements (Supplements Nos. 4 and 6 to EAR Part 746) used under the Russian and Belarusian Industry Sector Sanctions to provide alignment with sanctions imposed by U.S. partners and allies, and make the EAR sanctions stronger, more effective, and easier to understand. This rule makes a clarifying change by revising the section heading to add Belarus and a reference to § 746.5(a)(1)(i). Changing the methodology for identifying items by using the HTS-6 Code and HTS Description to make it easier to align with U.S. allies' and partners' controls. Conforming changes to Supplement no. 2 to Part 746 introductory text to reflect the use of the HTS-6 Codes and HTS Descriptions and to better align this Supplement with Supplement No. 4 to Part 746 introductory text. This rule expands and clarifies Supplement no. 2 to Part 746 to strengthen the controls by specifying that the supplement includes any modified or designed “parts,” “components,” “accessories,” and “attachments” for the items identified in the table to better align the Supplement with Supplement No. 4 to Part 746. This rule also clarifies Supplement No. 2 to Part 746 introductory text to specify that the scope of the license requirement applies to an item's HTS-6 Code and describe how such information relates to other information in the Supplement's table, as well as to content describing other HTS Codes that are longer but still derived from HTS-6 Codes;
- Expansion of Russian Industry Sector Sanctions under Supplement No. 4 to EAR Part 746 by adding additional items to align the sanctions with sanctions imposed by U.S. partners and allies and by making other changes to render the EAR's sanctions stronger, more effective, and easier to understand. This rule expands the controls by adding 322 HTS-6 Codes to Supplement No. 4 to Part 746. The rule removes Schedule B and Schedule B Description columns under Supplement No. 4 to Part 746 to make it easier to understand the Supplement's scope and to align the controls with those imposed by U.S. allies and partners. There is also a revision to the column used to identify the license requirement under Supplement No. 4 to Part 746 to use the HTS-6 Code column instead of the HTS Description column. There are clarifications to Supplement No. 4 to Part 746’s introductory text to specify how the HTS-6 Codes relate to other information in the table, as well as to content referring to other HTS Codes that are longer but derived from HTS-6 Codes;
- Expansion of Russian Industry Sector Sanctions under Supplement No. 6 to EAR Part 746 by adding additional items to align them with sanctions imposed by U.S. partners and allies and by making other changes to render the EAR's sanctions stronger, more effective, and easier to understand;
- Expansion of `Luxury Goods' Sanctions by adding additional items to Supplement No. 5 to EAR Part 746 to align them with sanctions imposed by U.S. allies and partners. This rule expands the scope of the `Luxury Goods' Sanctions by adding two hundred and seventy-six additional entries that will require a license for export or reexport to or transfers within Russia or Belarus and for designated Russian and Belarusian oligarchs and malign actors worldwide under § 746.10(a)(1) and (2); and
- Alignment changes to Supplement No. 3 to EAR Part 746 (Countries Excluded from Certain License Requirements of EAR §§ 746.7 and 746.8) to add Taiwan. Pursuant to the Russia Sanctions rule, 32 countries were added to new Supplement No. 3. In March 2022, BIS published a rule that added South Korea to the list of countries, and in April 2022, it published a rule that added Iceland, Liechtenstein, Norway, and Switzerland to the list. Taiwan has implemented measures on Russia and Belarus that are substantially similar to those imposed by BIS. This rule recognizes Taiwan's implementation of such measures; BIS is adding Taiwan to Supplement No. 3 to Part 746 of the EAR with the designation of “full.”
The remaining changes include:
- Clarification that EAR § 744.7 extends to transfers (in-country), in addition to exports and reexports. In § 744.7, this rule adds the term “transfer (in-country)” wherever the terms “exports” and “reexports” occur to clarify that the license requirements of this section also apply to transfers (in-country);
- Clarification that the exclusion for items controlled under ECCN 5A992 or 5D992 under EAR§ 746.8 also applies to "Luxury Goods Sanctions" license requirements under EAR § 746.10(a)(1). In § 746.10 (`Luxury goods' sanctions against Russia and Belarus and Russian and Belarusian oligarchs and malign actors), this rule adds introductory text to paragraph (a) to clarify that the same exclusion for ECCNs 5A992 or 5D992 under § 746.8(a) introductory text also applies to the `luxury goods' sanctions under § 746.10(a)(1).; and
- Conforming changes to the licensing policies under EAR§§ 746.5, 746.8, and 746.10 and addition of a case-by-case license review policy for applications for the disposition of items needed as part of companies curtailing or closing all operations in Russia or Belarus. In §§ 746.5(b)(1) and (2) and 746.10(b), this rule makes conforming changes to each of the licensing policies to conform to the structure of the licensing policy paragraph under § 746.8(b). This rule does so by revising each of the sentences that specify the policy of denial license review policy by adding a period and then adding a new sentence adding the same case-by-case license review policy text to §§ 746.5(b)(1) and (2) and 746.10(b), as is currently found in § 746.8(b). In §§ 746.5(b)(1) and (2), 746.8(b), and 746.10(b), this rule adds a new case-by-case license review policy for applications for the disposition of items by companies not headquartered in Country Group D:1, D:5, E:1 or E:2 that are curtailing or closing all operations in Russia or Belarus. Companies deciding to curtail or close all operations in Russia put further pressure on the Russian government and on the Russian and Belarusian defense industrial base, as their departure will hollow out both countries' industrial capacity and economy, which may lead to further degradation of their defense industrial base.
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February 27, 2023: 88 Fed. Reg. 12150: The Department of Commerce, Bureau of Industry and Security (BIS) amended the Export Administrations Regulations (EAR) to impose new export control measures on Iran. These measures address the use of Iranian Unmanned Aerial Vehicles (UAVs) by the Russian Federation (Russia) in its ongoing war against Ukraine, contrary to U.S. national security and foreign policy interests. Although UAVs are also known as Unmanned Aircraft Systems (UASs), for purposes of consistency with the Missile Technology Control Regime (MTCR) they are referred to as UAVs in the EAR. These amendments to the EAR target Iran's supply of UAVs to Russia to enhance Russia's defense industrial base and its military efforts against Ukraine and build on prior EAR amendments, including the addition of Iranian entities to the Entity List as Russian "military end users." Specifically, these controls
- Impose license requirements for a subset of generally low-technology EAR99 items, including semiconductors that are destined for Iran, that are destined to Iran, regardless of whether a U.S. person is involved in the transaction;
- Establish a new list (Supplement No. 7 to EAR Part 746) identifying these EAR99 items by HTS-6 Code to allow BIS and other U.S. government agencies to track and quantify these exports;
- Create a new “Iran Foreign Direct Product (FDP) Rule” specific to Iran for items in certain categories of the Commerce Control List and EAR99 items identified in the new Supplement No. 7 to EAR Part 746; And
- Revise the existing Russia/Belarus FDP rule to cover EAR99 items that have been found in UAVs containing parts and components branded U.S. or U.S.-origin (although they may not actually be U.S. branded or U.S.-origin) which will help to ensure that U.S. products are not available for shipment to Iran for use in the manufacture of UAVs being used by Russia in Ukraine.
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February 27, 2023: 88 Fed. Reg. 12170: The Department of Commerce, Bureau of Industry and Security (BIS) amended the Entity List set forth in Supplement No. 4 to EAR Part 744 by adding 10 entities under 13 entries to the Entity List. These entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. These entities are listed on the Entity List under the destinations of Canada (2), China (5), France (1), Luxembourg (1), Netherlands (1), and Russia (3).
This final rule added the following ten entities under 13 entries to the Entity List and includes, where appropriate, aliases:
Canada:
- CPUNTO Inc.; and
- Electronic Network Inc.
China:
- AOOK Technology Ltd.;
- Beijing Ti-Tech Science and Technology Development Co.;
- Beijing Yunze Technology Co., Ltd.;
- China HEAD Aerospace Technology Co.; and
- Spacety Co. Ltd.
France:
- China HEAD Aerospace Technology Co.
Luxembourg:
- Spacety Co., Ltd.
The Netherlands:
- China HEAD Aerospace Technology Co.
Russia:
- Dexias Industrial Products and Trade Limited Company;
- Innovation and Technologies LLC; and
- Promtekhkomplekt JSC.
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February 27, 2023: 88 Fed. Reg. 12155: The Department of Commerce, Bureau of Industry and Security (BIS) amended the Entity List set forth in Supplement No. 4 to EAR Part 744 by adding seventy-six entities to the Entity List. These entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States and are listed on the Entity List under the destination of Russia. This rule also revises four existing entries on the Entity List under the destination of Russia. The list is found at the attached link.
Editors note: the ongoing additions to the entities list by the Department of State, Commerce, and Treasury mandates active denied party screening by exporters before engaging in export activity. Not only a best practice but a necessary export control process to keep up with the pace of changes to the DPL!
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Department of the Treasury, Office of Foreign Assets Control (OFAC)
February 1, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed full-blocking sanctions against 22 individuals and entities across multiple countries related to a sanctions evasion network supporting Russia’s military-industrial complex. This action, taken pursuant to Executive Order (E.O.) 14024, is part of the U.S. strategy to methodically and intensively target sanctions evasion efforts around the globe, close down key backfilling channels, expose facilitators and enablers, and limit Russia’s access to the revenue needed to wage its brutal war in Ukraine. Over the last year, Treasury has sanctioned over 100 individuals and entities engaging in activity to circumvent international sanctions and export controls imposed on Russia.
The following individuals have been added to OFAC's SDN List:
- Blats, Marks of Latvia;
- Ng, Serena Bee Lin of Singapore;
- Palnychenko, Igor of Cyprus;
- Piflaks, Gilad of Uzbekistan and Israel;
- Piflaks, Maks Borisovich of Uzbekistan;
- Volfovich, Alexander of Cyprus;
- Volfovich, Ariel of Cyprus;
- Volfovich, Stanislav of Ukraine, Cyprus, and Israel;
- Zimenkov, Igor Vladimirovich of Russia; Cyprus; Israel; and Uzbekistan; and
- Zimenkov, Jonatan Russia; Italy; and Israel.
The following entities have been added to OFAC's SDN List:
- Asia Trading & Construction PTE LTD of Singapore;
- E.S. Defense Engineering Solutions LTD of Israel;
- Elektrooptika SIA of Latvia;
- GBD Limited of Cyprus;
- GMI Global Manufacturing & Integration LTD of Cyprus;
- Kliosa Limited of Cyprus;
- Mateas Limited of Cyprus;
- Pitaron Limited of Cyprus;
- Terra-Az Limited of Cyprus;
- Texel F.C.G. Technology 2100 LTD of Israel;
- U-Stone Limited EOOD of Bulgaria; and
- VFC Solutions LTD of Cyprus.
https://home.treasury.gov/news/press-releases/jy1241 and https://home.treasury.gov/news/press-releases/jy1241
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February 3, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating eight senior executives of Paravar Pars Company (Paravar Pars), an Iran-based firm that was previously sanctioned by the United States and European Union for manufacturing Shahed-series unmanned aerial vehicles (UAVs) for Iran’s Islamic Revolutionary Guard Corps Aerospace Force (IRGC ASF). OFAC also identifies two Islamic Republic of Iran Navy (IRIN) vessels, the Iris Makran and the frigate Iris Dena, as property in which the Government of Iran has an interest.
The following individuals have been added to OFAC's SDN List:
- Asadi, Mohsen of Iran;
- Mohammadi, Mohammad Reza of Iran;
- Mousa, Mohammad Sadegh Heidari of Iran;
- Nazeri, Abualfazl of Iran;
- Salehnejad, Abulfazl of Iran;
- Shamsabadi, Hossein of Iran; and
- Valagohar, Abulghasem of Iran.
The following vessels have been added to OFAC's SDN List:
- Iris Dena Vessel Registration Identification IMO 4743313; and
- Iris Makran Vessel Registration Identification IMO 9486910.
https://home.treasury.gov/news/press-releases/jy1246 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230203
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February 3, 2023: The Department of the Treasury's Office of Foreign Assets Control (OFAC) has published a determination pursuant to sections 1(a)(ii), 1(b), and 5 of Executive Order (E.O.) 14071 and that effective 12:01 a.m. eastern standard time on February 5, 2023, the price cap on Discount to Crude petroleum products of Russian Federation origin shall be $45 per barrel, and the price cap on Premium to Crude petroleum products of Russian Federation origin shall be $ 100 per barrel. OFAC also issued a determination pursuant to section 1(a)(ii) of Executive Order (E.O.) 14071 to implement the price cap policy for crude oil and petroleum products of Russian Federation origin. The prohibitions in section l(a)(ii) of E.O. 14071 shall apply to the following categories of services as they relate to the maritime transport of petroleum products of Russian Federation origin (collectively, the "Covered Services"):
- Trading/commodities brokering;
- Financing;
- Shipping;
- Insurance, including reinsurance and protection and indemnity;
- Flagging; and
- Customs brokering.
As a result, the following activities are prohibited, except to the extent provided by law, or unless licensed or otherwise authorized by the Office of Foreign Assets Control: the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any of the Covered Services to any person located in the Russian Federation.
https://home.treasury.gov/system/files/126/price_cap_determination_20230203.pdf and https://home.treasury.gov/system/files/126/determination_eo14071_20230203.pdf
Additionally, OFAC has published Guidance on Implementation of the Price Cap Policy for Crude Oil and Petroleum Products of Russian Federation Origin.
https://home.treasury.gov/system/files/126/price_cap_guidance_combined_20230203.pdf
OFAC has issued Russia-related General License 56A and General License 57A.
Russia-related General License 56A: All transactions prohibited by (1) the determination of November 21, 2022, made pursuant to section 1(a)(ii) of Executive Order (E.O.) 14071 (“Prohibitions on Certain Services as They Relate to the Maritime Transport of Crude Oil of Russian Federation Origin”) related to the importation of crude oil, or (2) the determination of February 3, 2023, made pursuant to section 1(a)(ii) of E.O. 14071 (“Prohibitions on Certain Services as They Relate to the Maritime Transport of Petroleum Products of Russian Federation Origin”) related to the importation of petroleum products, into the Republic of Bulgaria, the Republic of Croatia, or landlocked European Union Member States as described in Council Regulation (EU) 2022/879 of June 3, 2022, are authorized.
This general license does not authorize any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR, unless separately authorized. Effective February 3, 2023, General License No. 56, dated November 22, 2022, is replaced and superseded in its entirety by this General License No. 56A.
https://home.treasury.gov/system/files/126/russia_gl56a.pdf
Russia-related General License 57A: All transactions prohibited by (1) the determination of November 21, 2022, made pursuant to section 1(a)(ii) of Executive Order (E.O.) 14071 (“Prohibitions on Certain Services as They Relate to the Maritime Transport of Crude Oil of Russian Federation Origin”) or (2) the determination of February 3, 2023, made pursuant to section 1(a)(ii) of E.O. 14071 (“Prohibitions on Certain Services as They Relate to the Maritime Transport of Petroleum Products of Russian Federation Origin”) that are ordinarily incident and necessary to addressing vessel emergencies related to the health or safety of the crew or environmental protection, including safe docking or anchoring, emergency repairs, or salvage operations, are authorized.
This general license does not authorize:
(1) Any transactions related to the offloading of crude oil or petroleum products of Russian Federation origin, except for the offloading of crude oil or petroleum products that is ordinarily incident and necessary to address vessel emergencies authorized pursuant to paragraph (a) of this general license;
(2) Any transactions related to the sale of crude oil or petroleum products of Russian Federation origin; or (3) Any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR, unless separately authorized.
https://home.treasury.gov/system/files/126/russia_gl57a.pdf
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February 8, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Yulan Adonay Archaga Carias, a.k.a. “Alexander Mendoza” a.k.a. “Porky,” an MS-13 gang leader based in Honduras, and David Elias Campbell Licona a.k.a. “Jorge Eduardo Perez Paz,” an MS-13 associate based in Nicaragua, pursuant to transnational criminal organization authorities. Both individuals are heavily involved in drug trafficking, violence, murder, extortion, and money laundering.
The U.S. Department of State’s Transnational Organized Crime Rewards Program also announced a reward offer of up to $5 million for information leading to the arrest or conviction of Yulan Adonay Archaga Carias. Submit tips via phone, text, or through the following applications WhatsApp/Signal/Telegram at (+1-202-451-8122) or in Honduras (+504-8886-7166).
The following individuals have been added to OFAC's SDN List:
- Archaga Carias, Yulan Adonay of Honduras; and
- Campbell Licona, David Elias of Nicaragua.
https://home.treasury.gov/news/press-releases/jy1253 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230208
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February 8, 2023: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing one Russia-related Frequently Asked Question (1113).
Question 1113: If a decedent’s estate includes securities issued by non-blocked Russian entities, do the new investment prohibitions in Executive Order (E.O.) 14066, E.O. 14068, or E.O. 14071 prohibit the transfer of such securities, through inheritance, to the relevant beneficiary of the decedent’s estate?
Answer: No. U.S. persons, including U.S. financial institutions, may transfer securities issued by non-blocked Russian entities from a decedent’s estate to the account of a relevant beneficiary or beneficiaries, including a successor entity (e.g., a family trust), provided such transfers (i) are part of the ordinary course administration of the decedent’s estate, (ii) do not involve an exchange for value, and (iii) have no other sanctions nexus (including the involvement of blocked persons).
Please note, however, that blocked securities in a decedent’s estate must remain blocked. The administration of a decedent’s estate requiring the transfer of blocked securities would require a specific license from OFAC.
https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1113 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230208
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February 9, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued Syria General License 23 "Authorizing Transactions Related to Earthquake Relief Efforts in Syria." Syria General License (GL) 23 authorizes for 180 days all transactions related to earthquake relief that would be otherwise prohibited by the Syrian Sanctions Regulations (SySR).
Syria General License 23: All transactions related to earthquake relief efforts in Syria that would otherwise be prohibited by the Syrian Sanctions Regulations, 31 CFR part 542 (SySR), are authorized through 12:01 p.m. eastern daylight time, August 8, 2023. This authorization includes the processing or transfer of funds on behalf of third-country persons to or from Syria in support of the transactions. U.S. financial institutions and U.S. registered money transmitters may rely on the originator of a funds transfer with regard to compliance, provided that the financial institution does not know or have reason to know that the funds transfer is not in compliance with this general license.
This general license does not authorize: (1) Any transactions prohibited by section 542.208 of the SySR (prohibiting importation into the United States of petroleum or petroleum products of Syrian origin); or (2) Any transactions involving any person whose property and interests in property are blocked pursuant to the SySR, other than persons who meet the definition of the term Government of Syria, as defined in section 542.305(a) of the SySR, unless separately authorized. Nothing in this general license relieves any person from compliance with any other Federal laws or requirements of other Federal agencies.
https://home.treasury.gov/news/press-releases/jy1261 and https://home.treasury.gov/system/files/126/syria_gl23.pdf
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February 9, 2023: The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC), in coordination with the United Kingdom, is designating seven individuals who are part of the Russia-based cybercrime gang Trickbot. This action represents the very first sanctions of their kind for the U.K. and results from a collaborative partnership between OFAC and the U.K.’s Foreign, Commonwealth, and Development Office; National Crime Agency; and His Majesty’s Treasury to disrupt Russian cybercrime and ransomware.
The following individuals have been added to OFAC's SDN List:
- Iskritsky, Mikhail of Russia;
- Karyagin, Valentin Olegovich of Russia;
- Kovalev, Vitaly Nikolayevich of Russia;
- Mikhailov, Maksim Sergeevich of Russia;
- Pleshevskiy, Dmitry of Russia;
- Sedletski, Valery of Russia; and
- Vakhromeyev, Ivan Vasilyevich of Russia.
https://home.treasury.gov/news/press-releases/jy1256 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230209 and https://www.gov.uk/government/news/uk-cracks-down-on-ransomware-actors
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February 9, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned nine entities across multiple jurisdictions that have played a critical role in the production, sale, and shipment of hundreds of millions of dollars worth of Iranian petrochemicals and petroleum to buyers in Asia. Treasury is targeting six Iran-based petrochemical manufacturers or their subsidiaries and three firms in Malaysia and Singapore involved in facilitating the sale and shipment of petroleum and petrochemicals on behalf of Triliance Petrochemical Co. Ltd., which OFAC designated on January 23, 2020, for facilitating the sale of Iranian petroleum products from the National Iranian Oil Company (NIOC).
The following entities have been added to OFAC's SDN List:
- Amir Kabir Petrochemical Company of Iran;
- Asia Fuel PTE. LTD., of Singapore;
- Laleh Petrochemical Company of Iran;
- Marun Sepehr Ofogh Company of Iran;
- Marun Supplemental Industries Company of Iran;
- Marun Tadbir Tina Company of Iran;
- Sense Shipping And Trading SDN. BHD., of Malaysia;
- Simorgh Petrochemical Company of Iran; and
- Unicious Energy PTE. LTD., of Singapore.
https://home.treasury.gov/news/press-releases/jy1257 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230209
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February 9, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned nine entities across multiple jurisdictions that have played a critical role in the production, sale, and shipment of hundreds of millions of dollars worth of Iranian petrochemicals and petroleum to buyers in Asia. Treasury is targeting six Iran-based petrochemical manufacturers or their subsidiaries and three firms in Malaysia and Singapore involved in facilitating the sale and shipment of petroleum and petrochemicals on behalf of Triliance Petrochemical Co. Ltd., which OFAC designated on January 23, 2020, for facilitating the sale of Iranian petroleum products from the National Iranian Oil Company (NIOC).
The following individuals have been added to OFAC's SDN List:
- Iskritsky, Mikhail of Russia;
- Karyagin, Valentin Olegovich of Russia;
- Kovalev, Vitaly Nikolayevich of Russia;
- Mikhailov, Maksim Sergeevich of Russia;
- Pleshevskiy, Dmitry of Russia;
- Sedletski, Valery of Russia;
- Vakhromeyev, Ivan Vasilyevich of Russia.
The following entities have been added to OFAC's SDN List:
- Amir Kabir Petrochemical Company of Iran;
- Asia Fuel PTE. LTD. of Singapore;
- Laleh Petrochemical Company of Iran;
- Marun Sepehr Ofogh Company of Iran;
- Marun Supplemental Industries Company of Iran;
- Marun Tadbir Tina Company of Iran;
- Sense Shipping And Trading SDN. BHD of Malaysia;
- Simorgh Petrochemical Company of Iran; and
- Unicious Energy PTE. LTD., of Singapore.
https://home.treasury.gov/news/press-releases/jy1257 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230209
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February 10, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned five current or former Bulgarian government officials — Rumen Stoyanov Ovcharov (Ovcharov), Aleksandar Hristov Nikolov (Nikolov), Ivan Kirov Genov (Genov), Nikolay Simeonov Malinov (Malinov), and Vladislav Ivanov Goranov (Goranov) — for their extensive involvement in corruption in Bulgaria. OFAC also designated four entities owned or controlled by Malinov, as well as an entity owned or controlled by Goranov. These individuals and entities are being designated pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption worldwide.
The following individuals have been added to OFAC's SDN List:
- Genov, Ivan Kirov of Bulgaria;
- Goranov, Vladislav Ivanov of Bulgaria;
- Malinov, Nikolay Simeonov of Bulgaria;
- Nikolov, Aleksandar Hristov of Bulgaria; and
- Ovcharov, Rumen Stoyanov of Bulgaria.
The following entities have been added to OFAC’s SDN List:
- Inter Trade 2021 EOOD of Bulgaria;
- MS Konsult 2016 EOOD of Bulgaria;
- Russophiles For The Revival Of The Fatherland Political Party of Bulgaria;
- Russophiles National Movement of Bulgaria; and
- Trilemma Consulting LTD EOOD of Bulgaria.
https://home.treasury.gov/news/press-releases/jy1264 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230210
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February 21, 2023: The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) issued an OFAC Compliance Communique: Guidance on Authorized Transactions Related to Earthquake Relief Efforts in Syria in response to questions from the NGO community and the general public on how to provide assistance related to earthquake relief to Syria while complying with OFAC sanctions.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230221 and https://home.treasury.gov/system/files/126/syria_earthquake_relief_compliance_guidance.pdf
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February 22, 2023: The U.S. Department of Treasury’s Office of Foreign Assets Control (OFCA) added the following individuals and organizations of the Sinaloa Cartel to the Specially Designated Nationals (SDN) list.
The following individuals have been added to OFAC's SDN List:
- Arredondo Beltran of Mexico;
- Flores Madrid of Mexico;
- Machado Torres of Mexico;
- Zamudio Ibarra of Mexico;
- Zamudio Lerma of Mexico; and
- Zamudio Lerma of Mexico.
The following entities have been added to OFAC’s SDN List:
- Aceros Y Refacciones Del Humaya, S.A. DE C.V., of Mexico;
- Farmacia Ludim of Mexico;
- Grupo Zait, S.A. DE C.V., of Mexico;
- Inmobiliaria Del Rio Humaya, S.A. DE C.V., of Mexico;
- Operadora Del Humaya, S.A. DE C.V., of Mexico; and
- Operadora Parque Alamedas, S. DE R.L. DE C.V., of Mexico.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230222
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February 24, 2023: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 8F, "Authorizing Transactions Related to Energy," General License 13D, "Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024," General License 60, "Authorizing the Wind-Down and Rejection of Transactions Involving Certain Entities Blocked on February 24, 2023,", and General License 61, "Authorizing Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Certain Entities Blocked on February 24, 2023."
Russia-related General License 8FL: All transactions prohibited by Executive Order (E.O.) 14024 involving one or more of the following entities that are related to energy are authorized through 12:01 a.m. eastern daylight time, May 16, 2023:
(1) State Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank;
(2) Public Joint Stock Company Bank Financial Corporation Otkritie;
(3) Sovcombank Open Joint Stock Company;
(4) Public Joint Stock Company Sberbank of Russia;
(5) VTB Bank Public Joint Stock Company;
(6) Joint Stock Company Alfa-Bank;
(7) Public Joint Stock Company Rosbank;
(8) Bank Zenit Public Joint Stock Company;
(9) Bank Saint-Petersburg Public Joint Stock Company;
(10) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest; or
(11) the Central Bank of the Russian Federation.
For the purposes of this general license, the term “related to energy” means the extraction, production, refinement, liquefaction, gasification, regasification, conversion, enrichment, fabrication, transport, or purchase of petroleum, including crude oil, lease condensates, unfinished oils, natural gas liquids, petroleum products, natural gas, or other products capable of producing energy, such as coal, wood, or agricultural products used to manufacture biofuels, or uranium in any form, as well as the development, production, generation, transmission, or exchange of power, through any means, including nuclear, thermal, and renewable energy sources.
https://home.treasury.gov/system/files/126/russia_gl8f.pdf
General License 13D: U.S. persons or entities owned or controlled, directly or indirectly, by a U.S. person are authorized to pay taxes, fees, or import duties and purchase or receive permits, licenses, registrations, or certifications, to the extent such transactions are prohibited by Directive 4 under Executive Order 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation, provided such transactions are ordinarily incident and necessary to the day-to-day operations in the Russian Federation of such U.S. persons or entities, through 12:01 a.m. eastern daylight time, June 6, 2023.
https://home.treasury.gov/system/files/126/russia_gl13d.pdf
General License 60: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind-down of transactions involving one or more of the following blocked persons (collectively, “the Blocked Entities”) are authorized through 12:01 a.m. eastern daylight time, May 25, 2023, provided that any payment to a Blocked Entity is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR):
(1) Bank Saint-Petersburg Public Joint Stock Company;
(2) Bank Zenit Public Joint Stock Company;
(3) Joint Stock Commercial Bank Primorye;
(4) Public Joint Stock Company Bank Uralsib;
(5) Joint Stock Company Commercial Bank Lanta Bank;
(6) SDM-Bank Public Joint Stock Company;
(7) Public Joint Stock Company Stock Commercial Bank Metallurgical Investment Bank;
(8) Public Joint Stock Company Ural Bank for Reconstruction And Development;
(9) Credit Bank of Moscow Public Joint Stock Company; or
(10) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.
U.S. persons are authorized to reject, rather than block, all transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the processing of funds involving one or more of the Blocked Entities as an originating, intermediary or beneficiary financial institution through 12:01 a.m. eastern daylight time, May 25, 2023.
https://home.treasury.gov/system/files/126/russia_gl60.pdf
General License 61: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the divestment or transfer, or the facilitation of the divestment or transfer, of debt or equity of the following blocked persons (“covered debt or equity”) to a non-U.S. person are authorized through 12:01 a.m. eastern daylight time, May 25, 2023:
(1) Bank Saint-Petersburg Public Joint Stock Company;
(2) Bank Zenit Public Joint Stock Company;
(3) Public Joint Stock Company Bank Uralsib;
(4) Joint Stock Company Commercial Bank Lanta Bank;
(5) SDM-Bank Public Joint Stock Company;
(6) Public Joint Stock Company Stock Commercial Bank Metallurgical Investment Bank; or
(7) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.
Except as provided in paragraph (e) of this general license, all transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to facilitating, clearing, and settling trades of covered debt or equity that were placed prior to 4:00 p.m. eastern standard time, February 24, 2023, are authorized through 12:01 a.m. eastern daylight time, May 25, 2023.
All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the wind-down of derivative contracts entered into prior to 4:00 p.m. eastern standard time, February 24, 2023, that (i) include a blocked person described above as a counterparty or (ii) are linked to covered debt or equity are authorized through 12:01 a.m. eastern daylight time, May 25, 2023, provided that any payments to a blocked person are made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).
https://home.treasury.gov/system/files/126/russia_gl61.pdf
Additionally, OFAC issued five associated Frequently Asked Questions (1114-1118).
Answer: On February 24, 2023, the Director of OFAC, in consultation with the Department of State, issued a sectoral determination pursuant to Executive Order (E.O.) 14024 that authorizes the imposition of economic sanctions on any person determined to operate or have operated in the metals and mining sector of the Russian Federation economy. This sectoral determination is effective February 24, 2023. Also, on February 24, 2023, OFAC designated certain entities for operating in the metals and mining sector of the Russian Federation economy. The U.S. government may, as appropriate, impose sanctions on additional persons determined pursuant to E.O. 14024 to operate or to have operated in this sector. For further information, please see FAQ 1115.
Answer: For the purposes of the determination of February 24, 2023, made pursuant to E.O. 14024, OFAC anticipates publishing regulations defining the term “metals and mining sector of the Russian Federation economy” to include any act, process, or industry of extracting, at the surface or underground, ores, coal, precious stones, or any other minerals or geological materials in the Russian Federation, or any act of procuring, processing, manufacturing, or refining such geological materials, or transporting them to, from, or within the Russian Federation. This is the definition OFAC used to define the same term in the Ukraine/Russia-related Sanctions Regulations (see 31 CFR 589.325).
Answer: No. The Director of OFAC, in consultation with the State Department, has issued a determination pursuant to E.O. 14024 that authorizes the imposition of economic sanctions on any person determined to operate or have operated in the metals and mining sector of the Russian Federation economy.
A sector determination pursuant to E.O. 14024 exposes persons that operate or have operated in an identified sector to sanctions risk; however, a sector determination does not automatically impose sanctions on all persons who operate or have operated in the sector. Only persons determined pursuant to E.O. 14024 to operate or have operated in the above-identified sector are subject to sanctions.
Certain additional sanctions may apply to dealings in the metals and mining sector of the Russian Federation economy. For example, E.O. 14071 prohibits U.S. persons from new investments in the Russian Federation, including in the metals and mining sector. In addition, certain goods produced by the metals and mining sector of the Russian Federation economy may be prohibited from importation into the United States pursuant to E.O. 14068, such as non-industrial diamonds and gold of Russian Federation origin. For more information about prohibitions related to non-industrial diamonds, see Frequently Asked Questions (FAQs) 1022, 1023, 1024, 1026, and 1027. For more information about prohibitions related to gold, see FAQs 1029 and 1070.
Answer: The determination made on February 24, 2023, pursuant to Executive Order (E.O.) 14024, authorizes sanctions on any person determined to operate or have operated in the metals and mining sector of the Russian Federation economy. Non-U.S. persons may also be exposed to sanctions for activities with persons blocked pursuant to E.O. 14024 (see FAQ 980), including persons blocked following a determination that such persons operate or have operated in the metals and mining sector.
However, OFAC does not intend to target persons for operating in the metals and mining sector where the provision of goods or services is solely for the safety and care of personnel, protection of human life, prevention of accidents or injuries, maintenance or repair necessary to avoid environmental or other significant damage, or activities related to environmental mitigation or remediation. Examples of such goods include personal protective equipment, safety devices, ventilation systems, and alarm systems; examples of such services include rescue and accident response services, cleaning, safety inspections, and services necessary for use of the goods described above.
In addition, non-U.S. persons generally do not risk exposure to U.S. blocking sanctions under E.O. 14024 for engaging in transactions with blocked persons, including in the metals and mining sector, where those transactions would not require a specific license if engaged in by a U.S. person. For example, non-U.S. persons generally do not risk exposure to U.S. blocking sanctions for engaging in transactions in the metals and mining sector if such transactions would be authorized for U.S. persons by General License (GL) 8F (authorizing certain energy-related transactions) or by GL 6C (authorizing certain transactions related to the production, manufacturing, sale, transport, or provision of medicine or medical devices, including certain industrial isotopes used in nuclear medicine, among other things).
Answer: No. GL 13D authorizes U.S. persons, or entities owned or controlled, directly or indirectly, by a U.S. person, to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations, or certifications involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation (collectively, Russia-related Directive 4 Entities) that would otherwise be prohibited by Russia-related Directive 4 under Executive Order 14024 (the Russia-related Sovereign Transactions Directive ), provided such transactions are ordinarily incident and necessary to such persons’ day-to-day operations in the Russian Federation. This so-called “exit tax” is not considered ordinarily incident and necessary to day-to-day operations in the Russian Federation and, thus, not authorized under GL 13D. Pursuant to the Russia-related Sovereign Transactions Directive, U.S. persons are prohibited from engaging in direct or indirect transactions involving any Russia-related Directive 4 Entity. Please see Frequently Asked Question 1002. In light of the potential for the payment of this so-called “exit tax” to involve a Russia-related Directive 4 Entity, U.S. persons whose divestment will involve an “exit tax” payment may require a license from OFAC. Such persons may submit a request for a specific license with OFAC’s Licensing Division online at http://www.home.treasury.gov/policy-issues/financial-sanctions/ofac-license-application-page. OFAC will evaluate such requests on a case-by-case basis.
https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2023-02-24
OFAC also published a Determination Pursuant to Section 1(a)(i) of Executive Order 14024. Section 1(a)(i) of Executive Order (E.O.) 14024 of April 15, 2021 (“Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation”) imposes economic sanctions on any person determined by the Secretary of the Treasury, in consultation with the Secretary of State, or the Secretary of State, in consultation with the Secretary of the Treasury, to operate or have operated in such sectors of the Russian Federation economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State. To further address the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States described in E.O. 14024, and in consultation with the Department of State and pursuant to 31 CFR § 587.802, I hereby determine that section 1(a)(i) of E.O. 14024 shall apply to the metals and mining sector of the Russian Federation economy. Any person determined, pursuant to section 1(a)(i) of E.O. 14024, to operate or have operated in this sector shall be subject to sanctions pursuant to section 1(a)(i). This determination shall take effect on February 24, 2023.
https://home.treasury.gov/system/files/126/determination_02242023_eo14024.pdf
In addition, OFAC has added 200 Russian individuals and entities to the Specially Designated Nationals List. The list of persons and entities is found in the link below.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230224
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February 28, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Jesus Cisneros Hernandez, a Mexican arms trafficker, pursuant to Executive Order (E.O.) 14059 for having provided, or have attempted to provide, financial, material, or technological support for, or goods or services in support of a person designated under E.O. 14059, namely, the Cartel de Jalisco Nueva Generacion (CJNG). CJNG is a violent Mexico-based organization that traffics a significant proportion of the illicit fentanyl and other deadly drugs that enter the United States. This action was taken in coordination with the Government of Mexico and is the result of OFAC’s collaboration with the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
The following individual has been added to OFAC's SDN List:
- Cisneros Hernandez, Jesus of Mexico.
https://home.treasury.gov/news/press-releases/jy1310 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230228
Fines and Penalties
Editors note: Fines and Penalties are listed by date. This month February 27, 2023, held the trifecta of export penalties. 3D Systems Corporation entered into a consent agreement with the Department of State for violations of the ITAR, a settlement agreement with the Department of Commerce for violations of the EAR, and a settlement with the Department of Justice for violations of the False Claims Act. The charges are described on pages 35 and 36.
February 2, 2023: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has announced that Dotphins LLC of North Miami, Florida, has agreed to a Settlement Agreement under which its export privileges will be denied for two years (such denial shall be suspended during this two-year probationary period and thereafter waived if Dotphins has not committed any further violations) and it will be required to complete export control training to settle charges that it engaged in two violations of EAR § 764.2(a) - Engaging in Prohibited Conduct. Specifically, on two occasions on or about March 28, 2016, and on or about December 1, 2016, Dotphins engaged in conduct prohibited by the EAR when it shipped red dot scopes from the United States destined to Austria and Switzerland without the required BIS licenses. The red dot scopes, which are subject to the EAR, were then classified under Export Control Classification Number 0A987.c, controlled on crime control grounds, and valued in total at approximately $199.26. Pursuant to Section 762.7 of the Regulations, a license was (and remains) required for the export of these items.
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February 3, 2023: 88 Fed. Reg. 7394: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Michael Cox for ten years until May 18, 2031. On May 18, 2021, in the U.S. District Court for the Western District of Pennsylvania, Michael Cox (“Cox”) was convicted of violating 18 U.S.C. 371. Specifically, Cox was convicted of conspiring to export defense articles, specifically Night Sighting Equipment, to Ukraine without the required licenses. As a result of his conviction, the Court sentenced Cox to 32 months of confinement, three years of supervised release, and $100 special assessment. BIS has also revoked any BIS-issued licenses in which Cox had an interest at the time of his conviction.
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February 3, 2023: 88 Fed. Reg. 7395: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Shirley Trinity Inzunza for eight years until January 22, 2026. On January 22, 2018, in the U.S. District Court for the District of Arizona, Shirley Trinity Inzunza (“Inzunza”) was convicted of violating Section 38 of the Arms Export Control Act (22 U.S.C 2778) (“AECA”). Specifically, Inzunza was convicted of knowingly and willfully attempting to export and causing to be exported from the United States to Mexico 10,000 23 rounds of .223 caliber ammunition, which was designated as a defense article on the United States Munitions List, without having first obtained from the Department of State a license for such export or written authorization for such export.
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February 3, 2023: 88 Fed. Reg. 7396: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Amin Yousefi Jam for seven years until November 17, 2028. On November 17, 2021, in the U.S. District Court for the Eastern District of Michigan, Amin Yousefi Jam (“Amin Jam”) was convicted of violating 18 U.S.C. 371. Specifically, Amin Jam was convicted of conspiring to export goods from the United States to Iran through the United Arab Emirates without having first obtained the required licenses from the Office of Foreign Assets Control. As a result of his conviction, the Court sentenced Amin Jam to time served, one year of supervised release, and a $100 assessment.
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February 3, 2023: 88 Fed. Reg. 7397: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Josef Koyshman for ten years until February 6, 2030. On February 6, 2020, in the U.S. District Court for the District of Columbia, Josef Koyshman (“Koyshman”) was convicted of violating Section 38 of the Arms Export Control Act (22 U.S.C 2778) (“AECA”). Specifically, Koyshman was convicted of willfully exporting, attempting to export, and attempting to cause the export, from the United States to Hong Kong, one (1) High Power Advanced Laser-Aiming System and one (1) AN/PRC-152 Handheld Radio and one (1) AN/PVS-31A Binocular Night Vision Goggles, all of which were designated as defense articles on the United States Munition List, without first obtaining from the U. S. Department of State a license for such export or written approval. As a result of his conviction, the Court sentenced Koyshman to 12 months and one day in prison, 24 months of supervised release and a $100 assessment.
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February 3, 2023: 88 Fed. Reg. 7398: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Victor Anthony Bocanegra for ten years until March 3, 2030. On March 3, 2020, in the U.S. District Court for the District of Arizona, Victor Anthony Bocanegra (“Bocanegra”) was convicted of violating 18 U.S.C. 554(a). Specifically, Bocanegra was convicted of smuggling from the U.S. to Mexico one (1) Barrett .50 caliber, semi-automatic rifle bearing the serial number #AA007434 in violation of 18 U.S.C. 554. As a result of his conviction, the Court sentenced Bocanegra to 37 months confinement with credit for time served, two years of supervised release, and a $100 assessment.
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February 3, 2023: 88 Fed. Reg. 7399: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Maria Guadalupe Pina for eight years until February 2, 2029. On February 2, 2021, in the U.S. District Court for the Southern District of Texas, Maria Guadalupe Pina (“Pina”) was convicted of violating 18 U.S.C. 554(a). Specifically, Pina was convicted of fraudulently and knowingly exporting and sending, and attempting to export and send, from the United States to Mexico twenty (20) full automatic lower parts kits for M-16 rifles and twenty (20) pistol grips for M-16 and AR-type rifles. As a result of her conviction, the Court sentenced Pina to 30 months in prison, three years of supervised release, and a $100 court assessment.
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February 3, 2023: 88 Fed. Reg. 7685: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Obaidullah Syed for ten years until May 17, 2032. On May 17, 2022, in the U.S. District Court for the Northern District of Illinois, Obaidullah Syed (“Syed”) was convicted of violating 18 U.S.C. 371. Specifically, Syed was convicted of conspiring to export computers, computer systems, and associated equipment from the United States to the Pakistan Atomic Energy Commission without a license from the U.S. Department of Commerce, in violation of 18 U.S.C. 371. As a result of his conviction, the Court sentenced Syed to one year and one day in prison, one year and one day of supervised release, an assessment of $100, and forfeiture in the amount of $247,000.
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February 7, 2023: A federal court in New York unsealed an indictment charging a citizen of the Russian Federation and legal permanent resident of the United States with participating in a scheme to make over $4 million in U.S. dollar payments to maintain four real properties in the United States that were owned by Viktor Vekselberg, a sanctioned oligarch, as well as to attempt to sell two of those properties.
According to court documents, Vladimir Voronchenko, aka Vladimir Vorontchenko, 70, of Moscow, Russia; New York, New York; Southampton, New York; and Fisher Island, Florida, is additionally charged with contempt of court in connection with his flight from the United States following receipt of a grand jury subpoena requiring his personal appearance and testimony.
According to allegations in the indictment, Voronchenko, who resided at various times in New York, Florida, and Russia, held himself out as a successful businessman, art collector, and art dealer, and as a close friend and business associate of Vekselberg.
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February 9, 2023: Kambiz Attar Kashani, 44, a dual citizen of the United States and Iran, was sentenced to 30 months in prison for conspiring to illegally export U.S. goods and technology to end users in Iran, including the Central Bank of Iran, in violation of the International Economic Powers Act (IEEPA). The Central Bank of Iran is an Iranian government agency that, according to the U.S. government, has materially supported Lebanese Hizballah and the Qods Force of Iran’s Islamic Revolutionary Guards Corps, both designated terrorist organizations.
According to court documents, between February 2019 and June 2021, Kashani and his co-conspirators used two front companies in the United Arab Emirates (UAE) to illegally procure electronic goods and technology from multiple U.S. technology companies, including one located in Brooklyn, for end users in Iran, including the Central Bank of Iran. Certain goods and technology Kashani and his co-conspirators transshipped were controlled by the U.S. government for national security and anti-terrorism reasons. Kashani and his co-conspirators intentionally concealed from the U.S. companies that they intended to send the items to Iran, falsely claiming that the UAE companies would be the ultimate end users. By providing the Central Bank of Iran and other end users in Iran with sophisticated, top-tier U.S. electronic equipment and software, Kashani and his co-conspirators enabled the Iranian banking system to operate more efficiently, effectively and securely.
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February 3, 2023: 88 Fed. Reg. 9429: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Arash Yousefi Jam for seven years until October 14, 2028. On October 14, 2021, in the U.S. District Court for the Eastern District of Michigan, Arash Yousefi Jam (“Arash Jam”) was convicted of violating 18 U.S.C. 371. Specifically, Arash Jam was convicted of conspiring to export goods from the United States to Iran through the United Arab Emirates without having first obtained the required licenses from the Office of Foreign Assets Control. As a result of his conviction, the Court sentenced Arash Jam to time served, one year of supervised release, and a $100 assessment.
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February 3, 2023: 88 Fed. Reg. 9475: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Luc Edmond for five years until February 19, 2025. On February 19, 2020, Edmond was convicted of violating 18 U.S.C. 554(a) for knowingly and willfully attempting to smuggle from the U.S. to Canada a Sig Sauer P228 pistol kit and an AR-15 300 AAC 7.5” pistol kit, which were designated as defense articles on the United States Munitions List, without first obtaining the required license or written authorization from the Department of State. As a result of his conviction, the Court sentenced Emond to 10 months in prison, a fine of $3,000, and a $100 special assessment.
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February 3, 2023: 88 Fed. Reg. 10286: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Shuren Qin for ten years until September 8, 2031. On September 8, 2021, Qin was convicted of violating the International Emergency Economic Powers Act (50 U.S.C. 1701, et seq.) (“IEEPA”), 8 U.S.C. 1001, and 18 U.S.C. 554(a), among other violations. Specifically, Qin was convicted of conspiring to unlawfully export items from the United States to Northwestern Polytechnical University, an entity on the Department of Commerce's Entity List, without first obtaining the required export licenses; two counts of making false statements to law enforcement agents regarding his customers and the types of parts he caused to be exported from the United States to China; and two counts of smuggling hydrophones from the United States to China. As a result of his conviction, the Court sentenced Qin to 24 months of confinement, two years of supervised release, a $1,000 assessment, and a $20,000 criminal fine.
https://www.federalregister.gov/documents/2023/02/17/2023-03420/in-the-matter-of-shuren-qin
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February 3, 2023: 88 Fed. Reg. 10287: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Jorge Martin Dorame, Jr. for five years until January 26, 2026. On January 26, 2021, Dorame was convicted of violating 18 U.S.C. 554(a) for smuggling and attempting to smuggle from the United States to Mexico weapons, weapons components, and weapons parts, specifically: four Matrix Arms AR-15 80% lower receivers, two Tapco AR T6 collapsible stocks, twenty Browning 1919 A4 .308 WIN caliber ammunition links, five Apex SAW/M249 M27 5.56x45 caliber ammunition links, two AR-15 compensators, three Brownells AR-15 H3 carbine buffers, five DPMS AR-15 hammer springs, five Magpul MOE AR-15 trigger guards, five DPMS AR-15 trigger springs, one DPMS AR-15 buffer tube, one Brownells M 16 bolt carrier group, two Brownells AR-15 receiver end plates, two Brownells AR-15 charging handles, three DPMS AR-15 receiver extension castle nuts, five Luth-AR M-16 auto sears with springs, and six Luth-AR M-16 disconnectors. As a result of his conviction, the Court sentenced Dorame to 60 months of probation and a $100 special assessment.
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February 3, 2023: 88 Fed. Reg. 10288: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Rafael Palomares, Jr. for ten years until May 13, 2031. On May 31, 2021, Palomares was convicted of violating section 38 of the Arms Export Control Act (22 U.S.C 2778) (“AECA”) for knowingly and willfully agreeing to conspire with others to export firearms from the United States to Mexico without the required licenses. As a result of his conviction, the Court sentenced Palomares to 45 months of confinement with credit for time served, three years of supervised release, and a $100 assessment.
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February 3, 2023: 88 Fed. Reg. 10289: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Carlos Francisco Rodriguez for seven years until November 3, 2028. On November 3, 2028, Rodriguez was convicted of violating 18 U.S.C. 554(a) for knowingly and willfully attempting to smuggle from the U.S. to Mexico approximately 15,923 rounds of ammunition of assorted calibers. As a result of his conviction, the Court sentenced Francisco Rodriguez to 24 months in prison, 3 years of supervised release, and a $100 special assessment.
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February 9, 2023: Todd Coleman of Massachusetts was sentenced to 33 months in prison for his role in a scheme in which he accepted bribes from an Afghan company in exchange for helping it deceive the U.S. military into awarding at least ten contracts at inflated values.
According to court documents, Coleman was an analyst at a U.S. company who was deployed to Afghanistan in 2011 and 2012 to evaluate bids for U.S.-funded reconstruction contracts awarded by the U.S. military. At that time, Coleman and Orlando Clark, a manager of reconstruction projects at a different U.S. company who was also deployed to Afghanistan, received approximately $400,000 in bribes from an Afghan company. In return, Coleman and Clark assisted the company in obtaining millions of dollars in contracts that involved the construction of an Afghan police station and a security checkpoint for U.S. forces.
To conceal their conduct, Coleman and Clark registered fictitious companies in the State of Georgia and opened bank accounts to which bribes were sent via wire transfers from Afghanistan. Coleman and Clark also created false invoices to make it appear as though they were involved in a car-exporting business in the United Arab Emirates. In reality, Coleman and Clark used the bribe payments to enrich themselves by purchasing personal items, such as a BMW. During the scheme, Coleman and Clark also traveled to the United Arab Emirates to receive cash bribes, which they smuggled into the United States without declaring the currency.
On Jan. 4, Clark pleaded guilty to conspiracy to commit bribery of a public official and (in an unrelated scheme) conspiracy to commit visa fraud. He is scheduled to be sentenced on April 12 and faces a maximum penalty of five years in prison on each charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
https://www.justice.gov/opa/pr/man-sentenced-scheme-involving-us-funded-military-contracts
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February 17, 2023: An indictment was unsealed in the District of Connecticut charging Glenn Oztemel, 64, of Westport, Connecticut, and a foreign national with conspiracy, multiple counts of violating the Foreign Corrupt Practices Act (FCPA), and money laundering in connection with an alleged scheme to pay bribes to Brazilian officials to win contracts with Brazil’s state-owned and state-controlled energy company, Petróleo Brasileiro S.A. – Petrobras (Petrobras).
According to court documents, Oztemel worked as a senior oil and gas trader at two Connecticut-based trading companies (Trading Company #1 and Trading Company #2). Eduardo Innecco, 73, a dual Brazilian and Italian citizen, worked as an oil and gas broker and agent for Trading Company #1 and Trading Company #2 in Brazil. Between approximately mid-2010 and continuing into 2018, Oztemel, Innecco, and others allegedly paid bribes to Petrobras officials for their assistance in helping Trading Company #1 and Trading Company #2 obtain and retain business with Petrobras, including by providing Oztemel, Innecco, and others with confidential information regarding Petrobras’ fuel oil business. As alleged, Oztemel and his co-conspirators caused Trading Company #1 and Trading Company #2 to make corrupt payments – disguised as purported consulting fees and commissions – to Innecco, knowing that Innecco would pay a portion of those funds to Brazilian officials as bribes. To conceal the scheme, Oztemel, Innecco, and their co-conspirators allegedly used coded language to refer to the bribes and communicated using personal email accounts, fictitious names, and encrypted messaging applications.
Oztemel and Innecco are each charged with conspiracy to violate the FCPA, conspiracy to commit money laundering, three counts of violating the FCPA, and two counts of money laundering. They face up to five years in prison for each of the bribery conspiracy and bribery charges, and up to 20 years in prison for each of the money laundering conspiracy and money laundering charges.
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February 24, 2023: Pursuant to Section 766.24 of the Export Administration Regulations ( “EAR”), the Bureau of Industry and Security (“BIS”), U.S. Department of Commerce, through its Office of Export Enforcement (“OEE”), has requested the issuance a Temporary Denial Order of temporarily denying, for a period of 180 days, the export privileges under the Regulations of Ilya Balakaev and Radiotester OOO a/k/a Radiotester LLC or Russia, for the unauthorized export of controlled counterintelligence items to Russia and North Korea.
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February 24, 2023: A five-count indictment was unsealed in federal court in Brooklyn, New York, charging Ilya Balakaev with various charges related to smuggling devices commonly used in counterintelligence operations out of the U.S. to Russia for the benefit of the Federal Security Service of the Russian Federation (FSB) and Democratic People’s Republic of Korea (“DPRK” or “North Korea”).
As alleged, between 2017 and the present, the defendant Ilya Balakaev entered into multiple contracts through his company Radiotester LLC with the FSB—the principal intelligence and security agency of the Russian government—to repair spectrum analyzers and signal generators. The devices that the defendant was tasked to repair were frequently used as part of counterintelligence operations to sweep for surveillance bugs and to transmit covert communications. Because the devices were not readily available in Russia, the defendant created a network of individuals in the U.S. to assist him in purchasing the equipment in the U.S., which he used to repair the FSB devices in violation of U.S. sanctions.
The defendant worked closely with Russian government officials from FSB Center 8’s Military Unit 43753, the agency responsible for Russia’s communication security and cryptology. In furtherance of his scheme, the defendant entered into at least ten contracts with FSB Military Unit 43753, purchased approximately 43 devices in the U.S., and traveled to the U.S. approximately 14 times in the span of approximately four years.
In addition to his scheme to evade Russian sanctions, the defendant also provided U.S. technology to a North Korean government official in violation of U.S. sanctions against North Korea. The defendant contracted with the First Secretary of the North Korean Embassy to the Russian Federation, based in Moscow, to obtain hazardous gas detectors and software from the U.S. for the benefit of the North Korean government.
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February 24, 2023: From the outset of Russia’s unprovoked, full-scale invasion of Ukraine one year ago, the Department of Justice has prioritized enforcing the sweeping sanctions, export restrictions, and economic countermeasures that the United States has imposed alongside our global partners. The Department continues that work by actions in two separate federal cases to disrupt sanctions evasion and smuggling networks supporting the Russian regime.
The U.S. Attorney for the Southern District of New York filed a civil forfeiture complaint against six real properties located in New York, New York; Southampton, New York; and Fisher Island, Florida, worth approximately $75 million. The complaint alleges that the properties beneficially owned by Russian oligarch Viktor Vekselberg are the proceeds of sanctions violations and were involved in international money laundering transactions. The case arises in the wake of the indictment of Vekselberg’s alleged strawman, Vladimir Voronchenko, a fugitive previously charged in the Southern District of New York. In the Eastern District of New York, a five-count indictment (see reference above) was unsealed, charging Ilya Balakaev, 47, of Moscow, with various offenses related to a years-long scheme to illegally smuggle sensitive devices used in counterintelligence operations from the United States to Russia for the benefit of the Federal Security Service of the Russian Federation (FSB), the principal intelligence and security agency of the Russian government. Balakaev is further charged with illegally exporting a gas detector and related software from the United States to Russia for the benefit of the Democratic People’s Republic of Korea (DPRK or North Korea). Concurrent with this action in the Eastern District of New York, the Department of Commerce separately issued a Temporary Denial Order denying the export privileges of Balakaev and his company, Radiotester OOO (aka Radiotester LLC), for 180 days with the possibility of renewal.
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February 27, 2023: 88 Fed. Reg. 12310: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Javier Campos for ten years until February 22, 2031. On February 22, 2021, Campos was convicted of violating 18 U.S.C. 554(a) of smuggling and attempting to smuggle from the United States to Mexico 6000 rounds of 7.62 x 39 mm ammunition. As a result of his conviction, the Court sentenced Campos to 51 months of confinement, three years of supervised release and a $100 assessment.
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February 27, 2023: 88 Fed. Reg. 12311: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Marco Rodriguez for ten years until March 12, 2031. On March 12, 2021, Rodriguez was convicted of violating 18 U.S.C. 371 and 18 U.S.C. 554(a) for conspiring and unlawfully smuggling from the US to Mexico, 5,000 rounds of .223 caliber ammunition and 5,000 rounds of 7.62 x 39 mm caliber ammunition. As a result of his conviction, the Court sentenced Rodriguez to 40 months of confinement on each count, to run concurrently and with credit for time served, 36 months of supervised release and a $300 special assessment.
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February 27, 2023: The U.S. Department of State has concluded an administrative settlement with 3D Systems Corporation (3D) of Rock Hill, South Carolina, to resolve alleged violations of the Arms Export Control Act (AECA), 22 U.S.C. § 2751 et seq., and the International Traffic in Arms Regulations (ITAR), 22 C.F.R. Parts 120-130. The Department of State and 3D have reached this settlement following an extensive compliance review by the Office of Defense Trade Controls Compliance in the Department’s Bureau of Political-Military Affairs.
The Department of State and 3D have reached an agreement pursuant to ITAR § 128.11 to address alleged ITAR violations occurring during the period of 2012 – 2018 involving unauthorized exports of technical data to Germany, unauthorized exports and retransfers of technical data to the People’s Republic of China (PRC), a proscribed destination under ITAR § 126.1, unauthorized reexports of technical data to Taiwan, unauthorized exports of technical data to foreign-person employees, and the failure to maintain ITAR records.
The settlement demonstrates the Department’s role in strengthening U.S. industry by protecting U.S.-origin technical data from unauthorized exports. The settlement also highlights the importance of obtaining appropriate authorization from the Department before exporting ITAR-controlled technical data.
Under the terms of the 36-month Consent Agreement, 3D Systems Corporation will pay a civil penalty of $20,000,000. The Department has agreed to suspend $10,000,000 of this amount on the condition that the funds will be used for Department-approved Consent Agreement remedial compliance measures to strengthen 3D’s compliance program. In addition, the Company will engage an external Special Compliance officer for at least the first year of the Consent Agreement and will conduct two external audits of its ITAR compliance program and implement additional compliance measures.
The Consent Agreement for this case is posted on the following Department of State website:
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February 27, 2023: As part of a settlement agreement, the Bureau of Industry and Security (BIS) issued an order imposing an administrative penalty of $2,777,750 on 3D Systems Corp. (3D Systems). 3D Systems is also required to retain a third-party consultant and to complete two audits of its export controls compliance program. This settlement resolves the allegations set forth in a Proposed Charging Letter (PCL) regarding 19 violations by 3D Systems of the Export Administration Regulations (EAR) by exporting controlled aerospace technology and metal alloy powder to China without the required license, and by exporting controlled technology to Germany without the required license. The PCL also included allegations related to 3D Systems failing to comply with the EAR’s recordkeeping requirements. 3D Systems admitted to committing the alleged conduct set forth in the PCL as part of this agreement. In addition to the BIS penalty, 3D Systems entered into corresponding settlement agreements with the Department of State and the Department of Justice.
The BIS order can be found at the following website:
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February 27, 2023: 3D Systems Corp. (3D Systems), a 3D printing company, has agreed to pay the United States up to $4.54 million to resolve allegations that it violated the False Claims Act by improperly transmitting export-controlled technical data to China in violation of the export control laws of the United States in connection with certain NASA and DOD contracts, announced U.S. Attorney for the Northern District of Texas Leigha Simonton.
In parallel agreements also related to alleged export violations, the company has agreed to a $20 million administrative settlement with the U.S. Department of State and a $2.77 million administrative settlement with the U.S. Department of Commerce.
Per the terms of a civil settlement executed with the Department of Justice on February 27, 2023, South Carolina-based 3D Systems Corporation agreed to pay $2.27 million in restitution to the federal government within the next 30 days. The company may be required to pay an additional $2.27 million in penalties under the Justice Department settlement agreement, for a total of up to $4.54 million, if it fails to pay at least that amount in civil penalties to the Department of State and the Department of Commerce in connection with the parallel administrative settlements referenced above.
According to the Justice Department Settlement Agreement, 3D Systems – through its Quickparts subsidiary – completed on-demand manufacturing projects both directly and indirectly on contracts issued by DOD and NASA, including for projects involving technical or other data potentially classified under and controlled by the International Emergency Economic Powers Act, the Arms Export Control Act, the Export Administration Regulations, and/or the International Traffic in Arms Regulations (collectively, the Export Control Laws).
Generally, the Export Control Laws prohibit certain controlled items and/or intellectual property from being exported to certain foreign countries, including the People’s Republic of China, without a license or authorization from the appropriate federal agencies. In the Justice Department settlement agreement, the United States alleged that between January 1, 2012, and December 31, 2017, 3D exported certain items and/or intellectual property to China without the appropriate license or authorization in violation of the Export Control Laws in connection with certain contracts issued by DOD and NASA in violation of the False Claims Act.
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February 28, 2023: 88 Fed. Reg. 12654: The Department of Commerce, Bureau of Industry (BIS) denied the export privileges of Qingshan Li for ten years until June 12, 2030. On June 12, 2020, Li was convicted of violating Section 38 of the Arms Export Control Act (22 U.S.C 2778) (“AECA”). For knowingly and willfully attempting to export from the United States to China a Harris Falcon III AN/PRC 152A Radio, which is designated as a defense article on the United States Munitions List, without the required licenses or written authorization from the State Department. As a result of his conviction, the Court sentenced Li to 36 months of confinement, three years of supervised release, and a $100 assessment. Li was also placed on the U.S. Department of State’s debarred list.