This newsletter is a listing of the latest changes in export control regulations through January 31, 2021. The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It summarizes recent changes to export control regulations or other regulatory matters of interest that may impact your company's international trade and export compliance functions. Call us at 703-847-5801 or email email@example.com with questions or comments.
See also our "Latest Sanctions Fines & Penalties" section below for an update on companies and persons denied export privileges by the United States Government.
The United Kingdom (UK) Department For International Trade Published Guides On Export Controls Following The End Of The Brexit Transition Period
January 8, 2021: The United Kingdom (UK) Department for International Trade (DIT) published a compendium of guides on export controls following the end of the Brexit transition period. The guides, issued by the Export Control Joint Unit, cover topics including overall key changes, changes to licensing of exports to European Union (EU) countries, changes of rules for exporting specific types of items such as firearms, differences between rules for exports from Great Britain vs. Northern Ireland, UK trade sanctions, changes in general export authorizations (GEAs), and many others. The compendium is on the DIT website at
Editor's Note: FD Associates has teamed with a U.K. consultant expert in U.K. export controls. Please contact us for details.
Department of Commerce – Bureau of Industry and Security
BIS Extended ECCN 0Y521 Controls On Software Specially Designed To Automate The Analysis Of Geospatial Imagery, Through January 6, 2022
January 6, 2021 – 86 Fed. Reg. 461: The Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR, 15 CFR Parts 730-774) by extending the existence of temporary Export Control Classification Number (ECCN) 0Y521, Software Specially Designed to Automate the Analysis of Geospatial Imagery, through January 6, 2022. Specifically, ECCN 0Y521 covers Geospatial imagery "software" "specially designed" for training a Deep Convolutional Neural Network to automate the analysis of geospatial imagery and point clouds. ECCN 0Y521 is a unilateral U.S. control; the U.S. has submitted a proposal for multilateral control of such software to the Wassenaar Arrangement (WA), but the WA has not considered acceptance of the proposal because it has not convened due to the pandemic.
BIS Amended The Chemical Weapons Convention Regulations
January 7, 2021 – 86 Fed. Reg. 936: BIS amended the Chemical Weapons Convention Regulations (CWCR, 15 CFR Parts 710-722) and EAR Part 745 by adding three "Schedule 1" chemical families and one individual "Schedule 1" chemical to CWCR Part 712 and EAR Part 745, consistent with decisions adopted by the States Parties to the Chemical Weapons Convention (CWC) at their Conference in November 2019. The rule also amended the definition of "production" in CWCR Sec. 710.1.
BIS Amended ECCN 1C991
January 7, 2021 -- 86 Fed. Reg. 944: BIS amended ECCN 1C991 to clarify that it includes vaccines containing, or designed for use against, any item identified in ECCN 1C351, 1C353, or 1C354. (Previously, it had indicated only that it controlled vaccines "against" such items.) This rule also expands the scope of medical products controlled under ECCN 1C991 to include those containing genetically modified organisms and genetic elements described in ECCN 1C353.a.3. In addition, this rule clarifies the definition of 'immunotoxin' that appears in ECCN 1C351 and ECCN 1C991 and removes the definition of 'subunit' from ECCN 1C351.
Finally, this rule renumbers ECCN 1C991.c and .d by listing medical products that are subject to chemical/biological (CB) controls, as well as antiterrorism (AT) controls, under ECCN 1C991.c and listing medical products that are subject only to AT controls under ECCN 1C991.d. A conforming amendment is made to § 742.2(a)(3) of the EAR to reflect this change in paragraph sequencing.
1C991 Vaccines, immunotoxins, medical products, diagnostic and food testing kits, as follows (see List of Items controlled). Medical products that contain any of the following:
c.1. Toxins controlled by ECCN 1C351.d (except for botulinum toxins controlled by ECCN 1C351.d.3, conotoxins controlled by ECCN 1C351.d.6, or items controlled for CW reasons under ECCN 1C351.d.11 or .d.12); or
c.2. Genetically modified organisms or genetic elements controlled by ECCN 1C353.a.3 (except for those that contain, or code for, botulinum toxins controlled by ECCN 1C351.d.3 or conotoxins controlled by ECCN 1C351.d.6);
d. Medical products not controlled by 1C991.c that contain any of the following:
d.1. Botulinum toxins controlled by ECCN 1C351.d.3;
d.2. Conotoxins controlled by ECCN 1C351.d.6.
The Commerce Department Adjusted The Maximum Civil Monetary Penalties For Inflation
January 11, 2021 – 86 Fed. Reg. 1764: The Commerce Department issued its annual rule adjusting maximum civil monetary penalties (CMPs) for inflation. Adjusted maximum CMPs for violations involving dual-use export controls include the following:
- BIS: violations of the International Emergency Economic Powers Act (IEEPA, 50 USC Sec. 1705(b)) – maximum increased from $307,922 to $311,562;
- BIS: violations of Export Control Reform Act of 2018 (ECRA, 50 USC Sec. 4819) – maximum increased from $305,292 to $308,901;
- Census Bureau: violations of 13 USC Sec. 304 (Collection of Foreign Trade Statistics) – maximum per day increased from $1,419 to $1,436; maximum per violation increased from $14,194 to $14,362;
- Census Bureau: violations of 13 USC Sec. 305(b) (Collection of Foreign Trade Statistics) – maximum increased from $14,194 to $14,362.
The new maximum CMPs will apply to violations assessed after January 15, 2021, including violations that occurred prior to that date.
BIS Removed Three Entities From The Unverified List
January 11, 2021 – 86 Fed. Reg. 1766: BIS removed the following three entities from the Unverified List (UVL, EAR Part 744, Supp. No. 6) on the basis that BIS was able to verify their bona fides (i.e., legitimacy and reliability relating to the end-use and end-user of items subject to the EAR) through successful end-use checks:
- DMA Logistics GmbH (Germany);
- Halm Elektronik GmbH (Germany); and
- Integrated Production and Test Engineering (Mexico).
BIS Amended EAR Sec. 742.5(b)(1) To Change The Licensing Review Policy For Certain Unmanned Aerial Systems (UAS) That Are Controlled For Missile Technology (MT) Reasons
January 12, 2021 – 86 Fed. Reg. 2252: BIS amended EAR Sec. 742.5(b)(1) to change the licensing review policy for certain Unmanned Aerial Systems (UAS) that are controlled for Missile Technology (MT) reasons, specifically, UAS that have a range and payload capability equal to or greater than 300 km/500kg and a maximum true airspeed of less than 800 km/hr. Applications to export these UAS, which are identified on the Missile Technology Control Regime (MTCR) Annex as Category I items, will now be considered on a case-by-case basis under the more flexible review policy generally applied to MTCR Category II items, and MT items for the design, development, production, or use in such UAS will now also be reviewed on a case-by-case basis. This action was consistent with a change in U.S. policy regarding the export of UAS announced by President Trump on July 24, 2020. (See July 2020 Regulatory Update.)
BIS Added One Entity In China To The Entity List, One Entity In China To The Military End-User List And Removed Two Russian Entities From The Military End User List
January 15, 2021 – 86 Fed. Reg. 4862: BIS amended the EAR by adding one entity in China to the Entity List (EAR Part 744, Supp. No. 4) based on a determination that this entity had acted contrary to the national security or foreign policy interests of the U.S. A license requirement with a license review policy of presumption of denial and no license exceptions will be available for exports, reexports, or in-country transfers to this person of all items subject to the EAR. The entity is:
- China National Offshore Oil Corporation Ltd.
In the same action, BIS also added one entity in China to the Military End User (MEU) List pursuant to the criteria set forth in EAR Sec. 744.21. A license requirement with a license review policy of a presumption of denial will apply to the export, reexport, or transfer (in-country) to this entity of any item subject to the EAR listed in Supplement No. 2 to Part 744. Also, no license exceptions will be available for exports, reexports, or transfers (in-country) to this entity of such items. The entity is:
- Beijing Skyrizon Aviation Industry Investment Co., Ltd.
Finally, in this action, BIS also removed the following two Russian entities from the MEU List:
- Korporatsiya Vsmpo Avisma OAO; and
- Molot Oruzhie.
BIS Issued New License Requirements For Transactions Involving Military-Intelligence End Users or Military-Intelligence End Use in China, Russia, Venezuela Or any Country Group E:1 Or E:2 Country
January 15, 2021 -- 86 Fed. Reg. 4865: BIS issued an interim final rule creating a new license requirement for transactions involving a "military-intelligence end-user" (MIEU) or "military-intelligence end-use" in China, Russia, Venezuela, or any country in Country Group E:1 or E:2 (currently Cuba, Iran, North Korea, and Syria), including (in some circumstances) whether or not the underlying item(s) involved is subject to U.S. export controls. "MIEU" is defined as "any intelligence or reconnaissance organization of the armed services (army, navy, marine, air force, or coast guard); or national guard;" a "military-intelligence end use" is defined as "the design, 'development,' 'production,' use, operation, installation (including on-site installation), maintenance (checking), repair, overhaul, or refurbishing of, or incorporation into, items described on the U.S. Munitions List (USML) (22 CFR part 121, International Traffic in Arms Regulations), or classified under ECCNs ending in "A018" or under "600 series" ECCNs, which are intended to support
the actions or functions of a 'military-intelligence end-user'." The rule includes a non-exclusive list of MIEUs. It is possible that this rule will be rejected or revised by the Biden administration, as it will not become effective until March 16, 2021. The deadline for comments is March 1, 2021. This rule is very complex. Contact us if you believe that any proposed transaction may be subject to this rule.
BIS Issued Interim Final Rule To Implement "Securing The Information And Communications Technology And Services Supply Chain"
January 19, 2021 – 86 Fed. Reg. 4909: BIS issued an interim final rule to implement Executive Order 13873, "Securing the Information and Communications Technology and Services Supply Chain" (May 15, 2019). It flows from a perception of the criticality of the Information and Communications Technology and Services (ICTS) Supply Chain in the U.S. and aims to protect it from any breach or interference by any "foreign adversaries" – defined as China (including Hong Kong), Cuba, Iran, North Korea, Russia, and Venezuelan politician Nicolas Maduro (Maduro Regime). To accomplish this goal, the rule authorizes the Commerce Department to prohibit or restrict a broad but not universal range of U.S. transactions involving the ICTS supply chain that have a nexus with any foreign adversary. The definitions of "ICTS" and "ICTS Transaction" that largely define the scope of the controls are detailed and sometimes difficult to apply. We recommend that you consult with us if you have questions about whether any proposed action involving a "foreign adversary" will be covered. The rule will go into effect March 22, 2021; deadline for comments is March 1, 2021. (This interim rule supersedes a proposed rule issued November 27, 2019 – 84 Fed. Reg. 65316.)
BIS Amended The EAR To Remove Sudan From Country Group E:1
January 19, 2021 – 86 Fed. Reg. 4929: BIS amended the EAR to remove Sudan from Country Group E:1 (Terrorist supporting countries) and added Sudan to Country Group B, thereby removing the license requirement for the export and reexport to Sudan of items controlled only for AT reasons, moving Sudan's de minimis level from 10 percent to 25 percent, and potentially making Sudan eligible for several new license exceptions (but excluding License Exceptions Shipments to Country Group B Countries ("GBS") and Technology and Software under Restriction ("TSR")). The change implemented the President's October 2020 decision to rescind Sudan's designation as a State Sponsor of Terrorism (SSOT), based on the certification that Sudan had not provided any support for acts of international terrorism during the preceding six months and that it had provided assurances that it would not support acts of international terrorism in the future.
BIS Submitted Its Annual Report To Congress For The Fiscal Year 2020
January 25, 2021: BIS submitted its annual report for the Fiscal Year 2020 to Congress. The report includes narrative descriptions of BIS' major actions and other activities, regulatory changes, enforcement actions, industrial base activities, and others, as well as a timeline and statistics on license processing, criminal convictions, administrative enforcement actions, end-use checks, and others. See it at https://www.bis.doc.gov/index.php/documents/pdfs/2711-2020-bis-annual-report-final/file.
Editor's Note: EAR Semi-Annual Encryption reports were due February 1 to BIS and NSA.
Federal Emergency Management Agency
FEMA Issued A Temporary Final Rule Extending, Modifying, And Clarifying Existing Requirements On Exports Of Certain Critical Health And Medical Supplies, Which Are Needed For Domestic Use In Fighting The COVID-19 Pandemic
December 31, 2020 – 85 Fed. Reg. 86835: The Federal Emergency Management Agency (FEMA) issued a temporary final rule extending, modifying, and clarifying existing requirements on exports of certain critical health and medical supplies which are needed for domestic use in fighting the COVID-19 pandemic. Under the new rule, and subject to exemptions specified in the rule, explicit FEMA approval is required for exports of specifically described subcategories of Surgical N95 Filtering Facepiece Respirators, PPE surgical masks, PPE nitrile gloves, Level 3 and 4 Surgical Gowns and Surgical Isolation Gowns, and syringes and hypodermic needles. Enforcement of this rule will be coordinated with U.S. Customs and Border Protection (CBP). The rule is valid until June 30, 2021.
Department of State
DDTC Name And Address Changes Posted To Website
Jan. 6, 12, and 26, 2021: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at
- Change in Name from L3 Oceania PTY LTD and L3 Communications Systems-Australia to Mission Systems Australia PTY LTD (a subsidiary of L3 Harris Technologies, Inc.) due to corporate reorganization;
- Change in Name from CMI Defence SAS to John Cockerill Defense France due to corporate rebranding;
- Change in Name from Patria Land Services Oy and Patria Land Systems Oy to Patria Land Oy due to corporate reorganization;
- Change in Name from Aero Parts Australia to Gentex Australia Pty Ltd. due to acquisition of Aero Parts by Gentex;
- Change in Name from Research Electro Optics, Inc., to Excelitas Technologies Corp. due to acquisition of Research Electro by Excelitas;
- Change in Name from The Ellison Group, Inc., and Ellison Surface Technologies, Inc. (both wholly-owned U.S. subsidiaries of Bodycote USA, Inc.), to Bodycote Surface Technology Group, Inc., and Bodycote Surface Technology, Inc., respectively, due to corporate rebranding;
- Change in Name from Broadspectrum (Australia) Pty Ltd. to Ventia Australia Pty Ltd. due to acquisition of Broadspectrum by Ventia; and
- Change in Address for BAE Systems (International) Limited-Malaysia.
Each announcement includes a link to a notice detailing the change and its effects on pending and currently approved authorizations involving the listed entity.
DDTC Updated The List Of Restricted Entities And Subentities Associated With Cuba
January 8, 2021 – 86 Fed. Reg. 1561: DDTC published an updated List of Restricted Entities and Subentities Associated With Cuba (Cuba Restricted List) with which direct financial transactions are generally prohibited under the Cuban Assets Control Regulations (CACR, 31 CFR Part 515). The announcement noted that the Department of Commerce's BIS will generally deny applications to export or reexport items for use by entities or subentities on the Cuba Restricted List. The Cuba Restricted List and additional information concerning it are on the Department of State website at https://www.state.gov/cuba-sanctions/cuba-restricted-list/.
DDTC Undertook A Comprehensive Review Of The Criteria Used To Adjudicate Proposed Direct Commercial Sale Transfers Of Precision-Guided Munitions
January 19, 2021: DDTC announced that as part of fulfilling its responsibility to ensure that exports of defense articles and defense services are consistent with all aspects of the Conventional Arms Transfer (CAT) Policy (https://www.state.gov/conventional-arms-transfer-cat-policy/) it had undertaken a comprehensive review of the criteria used to adjudicate proposed direct commercial sale transfers of precision-guided munitions (PGMs), their critical components, and/or related technical data and defense services against the criteria of a partner's advanced targeting infrastructure. The announcement details the PGMs that are subject to this policy (classes of PGMs, crucial components, technical data, and defense services). To ensure that these items are used in a manner consistent with U.S. intent when approving the transfer, the review will specifically include a partner's complete targeting infrastructure, including ability to properly mitigate the risk of civilian casualties and advanced target development capabilities including weaponeering, collateral damage estimation, and target coordinate mensuration. This announcement is on the DDTC home page, https://www.pmddtc.state.gov/ddtc_public.
The Department Of State Declared Cuba A State Sponsor Of Terrorism
January 22, 2021 – 86 Fed. Reg. 6731 (signed January 12, 2021): In an order signed January 12, 2020, Secretary of State Michael R. Pompeo determined that the Republic of Cuba had repeatedly provided support for acts of international terrorism. Accordingly, pursuant to the Export Administration Act of 1979 (as continued in effect by Executive Order 13222 of August 17, 2001) and other legislation, Cuba is now deemed a State Sponsor of Terrorism.
Department Of State Editor's Reminder:
Annual sales reports for Manufacturing License Agreements and Warehousing Distribution Agreements are due to DDTC.
Department of the Treasury
OFAC Issued Venezuela General License No. 31A
January 5, 2021: The Office of Foreign Assets Control (OFAC) issued Venezuela General License No. 31A titled, "Certain Transactions Involving the IV Venezuelan National Assembly, the Interim President of Venezuela, and Certain Other Persons Authorized," authorizing transactions and activities involving the current interim president of Venezuela, Juan Gerardo Guaidó Marquez (Guaidó), his staff, many of his appointees, members and staff of the IV Venezuelan National Assembly, and many other domestic and foreign officials. GL 31A, which replaces GL 31, issued on August 6, 2019 (see August 2019 Regulatory Update) is on the OFAC website at https://home.treasury.gov/policy-issues/financial-sanctions/faqs/679. Related FAQ No. 679 is on the OFAC website at https://home.treasury.gov/policy-issues/financial-sanctions/faqs/679.
OFAC Issued Two New FAQs Relating To Ukraine And Russia Related Sanctions
January 5, 2021: OFAC issued two new FAQs relating to Ukraine and Russia Related Sanctions under the Countering America's Adversaries Through Sanctions Act of 2017 (CAATSA, 22 USC 9201 et seq.): FAQ 869, about whether the non-blocking menu-based sanctions described in CAATSA Sec. 235(a) apply to entities owned 50 percent or more by a listed person and FAQ 870, about what is prohibited by the loan and credit-related sanction described in CAATSA Sec. 235(a)(3) (https://home.treasury.gov/policy-issues/financial-sanctions/faqs/869 and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/870 ). OFAC also amended two FAQs related to CAATSA: FAQ 545, defining several terms used in CAATSA (https://home.treasury.gov/policy-issues/financial-sanctions/faqs/545), and FAQ 546 (https://home.treasury.gov/policy-issues/financial-sanctions/faqs/546), about the coverage of the law.
OFAC Issued The Hong Kong Related Sanctions Regulations
January 15, 2021 – 86 Fed. Reg. 3793: OFAC issued the Hong Kong Related Sanctions Regulations (HKSR, 31 CFR Part 585) to implement Executive Order EO 13936 of July 14, 2020, "The President's Executive Order 13936 on Hong Kong Normalization." OFAC stated that it intends to supplement the HKSR with a more comprehensive set of regulations, possibly including additional interpretive and definitional guidance, general licenses, and statements of licensing policy. The HKSR became effective immediately.
OFAC Issued Four General Licenses In Support Of The U.S. Commitment To Supporting The Provision Of Humanitarian Assistance To The Yemeni People
January 19, 2021: OFAC issued four General Licenses in support of the U.S. commitment to supporting the provision of humanitarian assistance to the Yemeni people: GL 9, "Official Business of the United States Government" (https://home.treasury.gov/system/files/126/ct_gl9.pdf), GL 10, "Official Activities of Certain International Organizations" (https://home.treasury.gov/system/files/126/ct_gl10.pdf), GL 11, "Certain Transactions in Support of Nongovernmental Organizations' Activities in Yemen" (https://home.treasury.gov/system/files/126/ct_gl11.pdf), and GL 12, "Transactions Related to the Exportation or Reexportation of Agricultural Commodities, Medicine, Medical Devices, Replacement Parts, and Components or Software Updates" (https://home.treasury.gov/system/files/126/ct_gl12.pdf). In a further effort to help facilitate the uninterrupted flow of humanitarian assistance, including COVID-19-related assistance, and certain other critical commodities to the people of Yemen, OFAC also issued three FAQs: FAQ 875, about humanitarian efforts involving Ansarallah (https://home.treasury.gov/policy-issues/financial-sanctions/faqs/875), FAQ 876, about the exposure of non-U.S. persons in efforts involving Ansarallah (https://home.treasury.gov/policy-issues/financial-sanctions/faqs/876), and FAQ 877, about assistance in response to the COVID-19 outbreak in Yemen (https://home.treasury.gov/policy-issues/financial-sanctions/faqs/877).
OFAC Upgraded Its Sanctions List Search Tool To Utilize Fuzzy Logic
January 25, 2021: OFAC announced that it had upgraded its Sanctions List Search tool (https://sanctionssearch.ofac.treas.gov/) with fuzzy logic. Questions about this change can be addressed to OFAC technical support at 1-800-540-6322 Option #8 or O_F_A_C@treasury.gov.
|LATEST SANCTIONS FINES & PENALTIES|
This section of our newsletter provides information on the latest sanctions, fines, and penalties for export violations or matters of non-compliance with the ITAR or EAR issued by the US government enforcement agencies. It is provided as a service to exporters and associates of FD Associates to remind them of the importance of extreme due diligence in all international trade and export compliance matters, particularly those involving exports subject to the ITAR or the EAR. Don't let this happen to you or your company! Call us with questions or concerns at 703-847-5801 or email firstname.lastname@example.org.
Fines and Penalties
January 12, 2021: The U.S. Department of Justice announced the indictment of Arash Yousefi Jam, a/k/a Arash Yousefijam of Ontario, Canada, Aminn Yousefi Jam, a/k/a Amin Yousefija of Ontario, Canada, and Abdollah Momeni Roustani, a/k/a Abdollah Momeni, Ab Momeni, and Amir Amiri, thought to live in Iran, all citizens of Iran, for conspiracy to export U.S. goods to Iran in violation of IEEPA and the Iranian Transactions and Sanctions Regulations (ITSR, 31 CFR Part 560), conspiracy to smuggle goods from the U.S., and conspiracy to engage in international money laundering. The three men allegedly conspired to export and send goods including nine electrical discharge boards, one CPU board, two servo motors, and two railroad crankshafts from the U.S. to Iran via the United Arab Emirates (UAE) in violation of the U.S. sanctions, using third parties to arrange for payment and transportation of the goods, intentionally concealing information about their destinations from the U.S. sellers, and exporting the items without obtaining the required licenses.
January 13, 2021: Mediterranean Shipping Company (USA) Inc. (Chicago) agreed to pay a civil penalty of $81,000 and undergo a 12-month internal audit of all transactions subject to EAR Part 760 (including recordkeeping requirements and an assessment of the company's compliance therewith) to settle charges by BIS of 8 violations of 15 CFR Sec. 760.2(d) (Furnishing Information about Business Relationships with Boycotted Countries or Blacklisted Persons) and two violations of 15 CFR Sec. 760.5 (Failing to Report the Receipt of a Request to Engage in a Restrictive Trade Practice or Foreign Boycott against a Country Friendly to the U.S.). The boycotting countries involved in these violations were Libya and Oman.
January 22, 2021: Lionel Chan, previously a resident of Brighton, Mass., and Muhammad Mohd Radzi, previously a resident of Brooklyn, NY, both Malaysian nationals, both pleaded guilty in federal court in Boston to conspiracy to violate the Arms Export Control Act (AECA, 22 USC 2778 et seq.) for a buyer located in Hong Kong. Chan, later joined by Radzi, purchased a variety of U.S.-origin firearm parts, including parts used to assemble AR-15 assault rifles and 9MM semi-automatic handguns online and shipped them via Federal Express to the Hong Kong purchaser without first obtaining the required export licenses, intentionally concealing the contents of the shipments by providing false information about the shipments and concealing the parts inside of each package. The violations were discovered when Hong Kong authorities interdicted two packages, which were found to contain numerous export-controlled firearms parts, including a firing pin and gun sight.
January 27, 2021: Julian Demurjian of San Francisco, CA, agreed to pay an administrative settlement of $540,000 (of which $480,000 will be suspended for a two-year probationary period) to BIS and accept a two-year suspended denial of export privileges under the Export Administration Regulations (EAR, 15 CFR Parts 730-774) to resolve allegations that he and CIS Project, a company owned and operated by Demurjian, caused, aided, or abetted 7 violations of the EAR. In 6 of the violations, Demurjian/CIS provided a freight forwarder with invoices that vastly understated the value of the items, causing the forwarder to subsequently file Electronic Export Information (EEI) containing these false values in the Automated Export System. The settlement also included a seventh violation in which Demurjian/CIS falsely undervalued the items to be exported so that the stated value did not exceed $2,500 and thus did not trigger an EEI filing requirement.
January 29, 2021: The U.S. Attorney for the District of Columbia announced the indictment of Cheng Bo, a/k/a Joe Cheng, a Chinese citizen, for criminal conspiracy to violate the International Emergency Economic Powers Act (IEEPA, 50 USC Sec. 1701 -1707) by shipping export-controlled U.S. power amplifiers from the U.S. to Hong Kong knowing that the goods were intended for subsequent shipment to China. Cheng's former employer, Avnet Asia Pte., Ltd., a Singapore company, admitted responsibility and agreed to pay a penalty of $1,508,000 to the U.S. to settle a criminal liability for the conduct of Cheng and a Singapore-based foreign employee who illegally caused U.S. goods to be shipped to China and Iran without the required license.
At the same time, BIS announced that Avnet Asia had agreed to pay $1,721,000 as part of a $3,229,000 administrative penalty (partially suspended) to settle civil charges alleging that its employees had illegally exported various electronic components, many of which were classified under ECCN 3A001, through Singapore to China and Iran, including to a company on the BIS Entity List.