JANUARY 2022 UPDATES

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

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

 

REGULATORY UPDATES

 

Editors Notes Regarding Potential Policy Changes Regarding Russia

 

An astute reader will be aware of the conjecture regarding Russia's potential invasion of the Ukraine and the potential U.S. sanctions on Russia should such an invasion occur, notwithstanding that both countries have been involved in a conflict since Russia's annexation of the Crimea Region of the Ukraine. The potential sanctions would target major Russian banks, savings, and pensions and limit the market for Russia's sovereign debt. The proposed sanctions would also change the Export Administration Regulations (EAR) Direct Product Rule making it difficult for Russia to purchase certain U.S. goods, such as semiconductors, or the machines that make such U.S. goods or for others to sell such goods to them where U.S. manufacturing equipment was used for the production of such items.

 

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

 

BIS Adjusts Civil Monetary Penalty For Inflation

 

Jan. 4, 2022: 87 Fed. Reg. 157: The U.S. Department of Commerce has issued a civil monetary penalty adjustment for inflation resulting in an increase for certain export violations described in the Export Administration Regulations:

 

  • 50 U.S.C. 4819, Export Controls Act of 2018 (ECRA) violation increases the maximum per violation from $308,901 to $328,121.

 

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BIS Adds Software Specially Designed to Automate the Analysis of Geospatial Imagery to A Highly Controlled ECCN

 

Jan. 6, 2022: 85 Fed. Reg. 459: BIS amended the Export Administration Regulations (EAR) to formally add Software Specially Designed to Automate the Analysis of Geospatial Imagery to the ECCN 0Y521 Temporary Export Control Classification Numbers (ECCN) Series as ECCN 0D521. BIS initially added this software to EAR as ECCN 0D521 on January 6, 2020, and extended the control for a year on January 6, 2021. The U.S. Government submitted a proposal for multilateral controls on this software, but due to the pandemic, the Wassenaar Arrangement did not formally convene in 2020 and, therefore, was unable to consider acceptance of the proposal. https://www.federalregister.gov/documents/2020/01/06/2019-27649/addition-of-software-specially-designed-to-automate-the-analysis-of-geospatial-imagery-to-the-export

 

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Department of Commerce – Census Bureau

 

Census Adjust Civil Monetary Penalty For Inflation

 

Jan. 4, 2022: 87 Fed. Reg. 157: The U.S. Department of Commerce has adjusted the civil monetary penalty  for inflation for, among other things:

 

  • 13 U.S.C. 304, Collection of Foreign Trade Statistics (2002), each day's delinquency of a violation; total of not to exceed maximum per violation, from $1,436 to $1,525; maximum per violation, from $14,362 to $15,256; and
  • 13 U.S.C. 305(b), Collection of Foreign Trade Statistics (2002), violation, maximum from $14,362 to $15,256

 

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

 

DDTC Name And Address Changes Posted To Website

 

Jan. 5 through Jan. 31, 2022: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website:

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

 

  • Change in Name, Address and Ownership of the following Raytheon companies due to their acquisition by Vertex Aerospace LLC:

 

Former Legal Name And Address New Legal Name And Address
Raytheon Technical Services International Company

22265 Pacific Blvd.

Dulles, VA 20166

Vertex Technical Services International Company

555 Industrial Drive South

Madison, MS 39110-9073

 

 

Raytheon Professional Services LLC

1717 E. Cityline Dr.

Richardson, TX 75082

 

 

Vertex Professional Services LLC

555 Industrial Drive South

Madison, MS 39110-9073

Raytheon Systems Israel Company

1801 Hughes Dr.

Fullerton, CA 92834

Vertex Systems Israel Company

555 Industrial Drive South

Madison, MS 39110-9073

 

  • Change in Name from SEAKR Engineering, Inc. to SEAKR Engineering, LLC due to Raytheon Technologies Corporation's acquisition of SEAKR Engineering, Inc.;
  • Change in Address for K Line Logistics, Ltd from 1-8-16, Nihonbashi Honcho, Chuo-ku, Tokyo, 103-0023 Japan to Harumi Island Triton Square Office Tower X 30th Fl., 1-8-10 Harumi Chuo-ku, Tokyo, 104-6030 Japan.
  • Change in Name of the following Babcock Aviation Nordic Region entities due to corporate rebranding:

 

Previous Name Amended Name
Bond Aviation Group Limited Babcock Mission Critical Services UK Limited
World Helicopters Norway AS Babcock Norway AS
Scandinavian Air Ambulance Holding AB Babcock Scandinavia Holding AB
Avincis Mission Critical Services Scandinavia AB Babcock Mission Critical Services Scandinavia AB
Scandinavian Air Ambulance Norge AS Babcock Scandinavian AirAmbulance AS
Scandinavian AirAmbulance AB Babcock SAA FW AB
Scandinavian Medicopter AB (Sweden) Babcock Scandinavian AirAmbulance AB
Scandinavian Medicopter AB (Finland) Babcock Scandinavian AirAmbulance AB Filial I Finland

 

  • Change in Name from Altran UK Limited to Capgemini UK plc due to merger;
  • Change in Name from Peraton Canada Corp. to Arcfield Canada Corp. due to divestiture;
  • Northrop Grumman Integrated Defence Services Pty Limited and Northrop Grumman M5 Network Security Pty Limited are integrated into Northrop Grumman Australia Pty Limited due to corporate restructuring;
  • Change in Address for AECOM from 300 South Grand Ave., Los Angeles, CA 90071 to 13344 Noel Rd., #400, Dallas, TX 75204;
  • Change in names of the following L3 Harris Technologies, Inc., subsidiaries due to corporate rebranding:

 

Previous Name Amended Name
Power Paragon, Inc. L3Harris Maritime & Energy Solutions, Inc
Aerosim Flight Academy L3Harris Aerosim Academy, Inc.
Applied Defense Solutions, Inc. L3Harris Applied Defense Solutions, Inc.
Electrodynamics, Inc. L3Harris Electrodynamics, Inc.
ForceX, Inc. L3Harris ForceX, Inc.
Interstate Electronics Corporation L3Harris Interstate Electronics Corporation
L3 Applied Technologies, Inc. L3Harris Applied Technologies, Inc.
L-3 Communications Flight Capital LLC L3Harris Technologies Flight Capital LLC
 

L3 Fuzing and Ordnance Systems, Inc.

 

L3Harris Fuzing and Ordnance Systems, Inc.

L3 Kigre, Inc. L3Harris Kigre, Inc.
L3 Latitude, LLC L3Harris Latitude, LLC
L3 Unmanned Systems, Inc. L3Harris Unmanned Systems, Inc.
L3 Mustang Technology, L.P. L3Harris Mustang Technology Group, L.P.
NexGen Communications LLC L3Harris NexGen Communications LLC

 

 

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

 

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The Department of State Adjusts Civil Monetary Penalty For Inflation

 

Jan. 10, 2022: 87 Fed. Reg. 107: The Department of State adjusts the civil penalty for export violations for inflation, as follows:

  • 22 CFR 127.10(a)(1)(i)) is adjusted from $1,197,728 to $1,272,251; and
  • 22 CFR 127.10(a)(1)(ii)) is adjusted from $870,856 to $925,041, or five times the amount of the prohibited incentive payment, whichever is greater.

 

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

 

OFAC Issues New Belarus, Ukraine-Russia Related And Venezuela Related Frequently Asked Question

 

Jan. 7, 2022: OFAC published new guidance related to Belarus, Ukraine-Russia, and Venezuela in its Frequently Asked Questions related to the discontinuation of the London Interbank Offered Rate (LIBOR), a  benchmark reference rate, OFAC is issuing additional guidance.

 

The Belarus, Ukraine-/Russia-related, and Venezuela-related sanctions programs prohibit U.S. persons from dealing in certain new debt of persons identified as subject to these prohibitions. In various FAQs, OFAC provides examples of new debt, such as "bonds, loans, extensions of credit, loan guarantees, letters of credit, drafts, bankers acceptances, discount notes or bills, or commercial paper" issued on or after various specified dates. For the Belarus, Ukraine-/Russia-related, and Venezuela-related sanctions programs, OFAC has indicated that certain changes to contractual terms of loans, contracts, or other agreements that were entered into prior to the effective date of the relevant sanctions prohibitions could convert pre-existing debt that was not subject to the sanctions prohibitions into new debt that is subject to the sanctions prohibitions. Loans, contracts, or other agreements that use LIBOR as a reference rate that are modified to replace such benchmark reference rate will not be treated as new debt for OFAC sanctions

purposes, so long as no other material terms of the loan, contract, or agreement are modified.

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/956  

 

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OFAC Issues Venezuela-related General License 51

 

Jan. 20, 2022: OFAC issues Venezuela-related General License 51, "Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After January 20, 2023." This General License prevents creditors from seizing US-based petroleum refiner CITGO. As a result, during such period, transactions related to the sale or transfer of CITGO shares in connection with the PdVSA 2020 8.5 percent bond are prohibited unless specifically authorized by OFAC. https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220120_33

 

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OFAC Issues Ukraine Related Sanctions General License 13Q

 

Jan. 24, 2022: OFAC issues Ukraine-related sanctions General License 13Q authorizing certain transactions necessary to divest or transfer debt, equity, or other holdings in GAZ Group. https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220124#:~:text=U.S.%20Department%20of%20the%20Treasury,-Search&text=OFAC%20is%20issuing%20Ukraine%2Drelated,Certain%20Activities%20Involving%20GAZ%20Group.%22

 

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OFAC Issues Ukraine Related Sanctions General License 15K

 

Jan. 24, 2022: OFAC issues Ukraine related sanctions General License 15K authorizing certain activities involving GAZ Group to include:

  • Research, design, development, production, modification, upgrade, certification, distribution, and marketing;
  • Provision or receipt of services, including warranty, maintenance, logistics, storage, shipping, insurance, security, brokerage, legal, banking and financial (including financing and renegotiation of debt), technical and engineering, advertising, and customer services;
  • Entry into joint ventures, contract manufacturing agreements, supplier contracts, and other new contracts associated with activities authorized by paragraph (a);
  • Payment and receipt of dividends and other funds owed by or to GAZ Group relating to activities authorized by paragraph (a);
  • The conduct of financial transactions associated with activities authorized by paragraph (a); and Activities necessary for compliance with paragraph (f)(1)(i), including financial auditing services.

https://home.treasury.gov/system/files/126/ukraine_gl15k.pdf

 

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OFAC Updated Its Ukraine Related Frequently Asked Questions

 

Jan. 24, 2022: Due to the issuance of Ukraine-related sanctions General Licenses 13Q and 15K referenced above, OFAC has updated it's Ukraine-related Frequently Asked Questions. https://home.treasury.gov/policy-issues/financial-sanctions/faq/updated/2022-01-24

 

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Department of the Treasury, Internal Revenue Service (IRS)

 

IRS Published The Current List Of Countries That Require Or May Require Participation In, Or Cooperation With, An International Boycott

 

Jan. 3, 2022: 87 Fed. Reg. 145: In accordance with section 999(a)(3) of the Internal Revenue Code of 1986, the U.S. Department of the Treasury has published a current list of countries that require or may require participation in, or cooperation with, an international boycott (within the meaning of section 999(b)(3) of the Internal Revenue Code of 1986):

  • Iraq;
  • Kuwait;
  • Lebanon;
  • Libya;
  • Qatar;
  • Saudi Arabia;
  • Syria; and
  • Yemen.

 

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Department of Treasury, as Chair of the Committee on Foreign Investment in the United States (CFIUS)

 

CFIUS Identifies New Zealand As An Excepted Foreign State And Excepted Real Estate Foreign State

 

Jan. 5, 2022, CFIUS identified New Zealand as an eligible foreign state under the "excepted foreign state" and "excepted real estate foreign state" regulations (at 31 C.F.R. §§ 800.218 and 802.214, respectively). CFIUS identified New Zealand as eligible based "on its intelligence-sharing relationship with the United States and its collective defense arrangement and cooperation with the United States." https://home.treasury.gov/policy-issues/international/the-committee-on-foreign-investment-in-the-united-states-cfius/cfius-excepted-foreign-states

 

CFIUS Publishes Its Determination Related to Australia And Canada Remaining Excepted Foreign States

 

Jan. 7, 2022: 87 Fed. Reg. 875: CFIUS published the Committee's determination that Australia and Canada have made significant progress toward establishing and effectively utilizing a robust process to analyze foreign investments for national security risks and to facilitate coordination with the United States on matters relating to investment security. This determination satisfies the second criterion in the definition of excepted real estate foreign state under 31 CFR § 802.214 with respect to Australia and Canada. Therefore, Australia and Canada are and will remain excepted real estate foreign states absent further Committee action and notice in the Federal Register. https://www.federalregister.gov/documents/2022/01/07/2022-00234/determination-regarding-excepted-real-estate-foreign-states

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Department of Justice / Alcohol, Tobacco, Firearms and Explosives

 

ATF Codifies Certain Provisions Of The Omnibus Consolidated And Emergency Supplemental Appropriations Act, 1999

 

Jan. 4, 2022: 87 Fed. Reg. 182: The U.S. Department of Justice's Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) has amended 27 CFR Part 478 to codify into regulation certain provisions of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999. This rule amends ATF's regulations to account for the existing statutory requirement that applicants for Federal firearms dealer

 

Licenses certify that secure gun storage or safety devices will be available at any place where firearms are sold under the license to non-licensed individuals. This certification is already included in the Application for Federal Firearms License, ATF Form 7/7CR ("Form 7/7CR"). The regulation also requires applicants for manufacturer or importer licenses to complete the certification if the licensee will have premises where firearms are sold to non-licensees. Moreover, the regulation requires that the secure gun storage or safety devices be compatible with the firearms offered for sale by the licensee. Finally, it conforms the regulatory definitions of certain terms to the statutory language, including the definition of "antique firearm," which is amended to include certain modern muzzleloading firearms. These changes are effective Feb. 3, 2022.

 

ATF has also published the "Best Practices Guide for FFLs" as a resource and reference guide about federal gun laws and regulations. The Best Practices Guide encourages FFLs to provide customers with ATF publications to help firearms owners better understand their legal obligations, as well as practical steps they can take to help keep firearms out of the hands of prohibited persons and facilitate safe storage of firearms. Links to ATF publications addressing the following topics are included in the Best Practices Guide: procedures for FFLs to assist unlicensed firearms owners in conducting background checks for private party transfers; compliance with the Youth Handgun Safety Act; records firearms owners should maintain that can assist law enforcement if the owner's firearms are ever lost or stolen; and the legal consequences and public safety dangers of straw purchasing – which involves purchasing a gun for someone who is prohibited by law from possessing one or for someone who does not want his or her name associated with the transaction. https://www.atf.gov/firearms/federal-firearms-licensee-quick-reference-and-best-practices-guide

 

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U.S. Census Bureau

 

Census Publishes Interim Final Rule On New Control On Cyber Security Items And A New License Exception "Authorized Cybersecurity Exports" (ACE)

 

Jan. 7, 2022: On Thursday, October 21, 2021, the Department of Commerce, Bureau of Industry and Security (BIS) published an interim final rule that became effective January 19, 2022. This interim final rule establishes a new control on cyber security items and a new License Exception "Authorized Cybersecurity Exports" (ACE) that authorizes exports of these items to most destinations except in the circumstances described in the rule. As a result of this rule, the following changes will be made to the Automated Export System (AES) in order for exporters and authorized agents to successfully report Electronic Export Information (EEI) in the AES.

Three Export Control Classification Numbers (ECCN): ECCNs 4A005, 4D004 and 4E001.c are added to the AES ECCN reference table.

 

A new License Code (C64) has been added to the AES: An update has been made to AES to create a new License Code C64 - Authorized Cybersecurity Exports (ACE) that authorizes exports, reexports, and transfers (in-country) of cybersecurity items and certain IP network surveillance products, which are not also controlled in Category 5—Part 2 of the Commerce Control List (CCL) or for Surreptitious Listening (SL) reasons. License Exception ACE allows the export, reexport, and transfer (in-country) of 'cybersecurity items' to most destinations, except to destinations listed in Country Groups E:1 and E:2 of supplement no. 1 to part 740 of the EAR).

AES filers must adhere to the following new reporting requirements when using C64 (ACE) to prevent the return of fatal errors from AES.

  • Report License Code: C64 Authorized Cybersecurity Exports (ACE)
  • Allowable ECCN's: The following ECCNs are eligible 4A005, 4D001, 4D004, 4E001, 5A001, 5B001, 5D001, and 5E001 to the extent permitted under part 740 of the EAR and the respective ECCN entry.
  • Allowable Export Information Codes: All except UG
  • Allowable Modes of Transportation: All except '70' (Fixed Transport)

https://www.govinfo.gov/content/pkg/FR-2021-10-21/pdf/2021-22774.pdf

 

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Other

 

The FBI Investigates A Chinese Investment In An Aircraft Startup Following Allegations Of Improper Technology Transfer To China

 

Jan. 18, 2022: The Federal Bureau of Investigation (FBI) and a U.S. investment-screening panel are investigating Chinese investment in an aircraft startup following allegations of improper technology transfer to China. Under review is a Chinese government-backed investment company's nearly 47% stake—the largest of any shareholder—in Icon Aircraft Inc., a California-based maker of small recreational, amphibious planes. A group of U.S. shareholders has accused the Chinese firm of hollowing out Icon and moving its technology, which the Americans say has possible military applications, to China. The Committee on Foreign Investment in the U.S. (CIFIUS), an interagency panel that can recommend that the president block or unwind deals on national-security grounds, began its review in late November after the American shareholders urged it to intervene. The FBI has also initiated a separate probe into possible criminal violations related to the deal and the alleged transfer of technology. https://www.wsj.com/articles/chinese-investment-in-u-s-plane-maker-draws-fbi-national-security-reviews-11642507206?mod=hp_lead_pos4

 

LATEST SANCTIONS FINES & PENALTIES

 

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 State

 

Jan. 21, 2022: 87 Fed Reg 3376: The Department of State has determined that the following three People's Republic of China entities have engaged in activities that require the imposition of measures pursuant to the Arms Export Control Act, as amended, and the Export Administration Act of 1979, as amended:

  • China Aerospace Science and Technology Corporation (CASC) First Academy, and its sub-units and successors;
  • China Aerospace Science and Industry Corporation (CASIC) Fourth Academy, and its sub-units and successors; and
  • Poly Technologies Incorporated (PTI) and its sub-units and successors.

 

Accordingly, the following sanctions are being imposed on these entities for two years:

  • Denial of all new individual licenses for the transfer to the sanctioned entities of all items on the U.S. Munitions List and all items the export of which is controlled under the Export Control Reform Act (ECRA) of 2018;
  • Denial of all U.S. Government contracts with the sanctioned entities; and
  • Prohibition on the importation into the United States of all products produced by the sanctioned entities.

https://www.federalregister.gov/documents/2022/01/21/2022-01117/imposition-of-missile-proliferation-sanctions-on-three-entities-in-the-peoples-republic-of-china-prc

 

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

 

Jan. 12, 2022: BIS has issued Orders Denying Export Privileges of the following four individuals:

  • Until June 25, 2029 - On June 25, 2019, in the U.S. District Court for the Southern District of Texas, Ernestina Hernandez-Juarez ("Hernandez-Juarez") was convicted of violating 18 U.S.C. § 554(a). Specifically, Hernandez-Juarez was convicted of fraudulently and knowingly exporting and sending or attempting to export and send from the United States to Mexico 40 Level III AR500 steel body armor plates. Hernandez-Juarez was sentenced to 18 months in prison and a $100 assessment. https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1349-e2701/file
  • Until September 25, 2026 - On September 25, 2019, in the U.S. District Court for the Southern District of Texas, Edna Yaritza Zamarripa ("Edna Zamarripa") was convicted of violating 18 U.S.C. § 554(a). Specifically, Edna Zamarripa was convicted of fraudulently and knowingly exporting and sending 2000 rounds of 7.62 x 39 mm caliber ammunition from the United States to Mexico, in violation of 18 U.S.C. § 554. As a result of her conviction, the Court sentenced Edna Zamarripa to 46 months in prison, three years of supervised release, and a $100 assessment. https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1350-e2702/file
  • Until September 25, 2024 - On September 25, 2019, in the U.S. District Court for the Southern District of Texas, Consuelo Teresita Zamarripa, a/k/a Consuelo Teresita Ramirez ("Consuelo Zamarripa"), was convicted of violating 18 U.S.C. § 554(a). Specifically, Consuelo Zamarripa was convicted of fraudulently and knowingly exporting and sending 2,000 rounds of 7.62 x 39 mm caliber ammunition from the United States to Mexico, in violation of 18 U.S.C. § 554. As a result of her conviction, the Court sentenced Consuelo Zamarripa to 37 months in prison, three years of supervised release, and a $100 assessment. https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1351-e2703/file
  • Until October 17, 2024 - On October 17, 2019, in the U.S. District Court for the Southern District of Texas, Irving Aaron Rodriguez-Solis ("Rodriguez-Solis") was convicted of violating 18 U.S.C. § 554(a). Specifically, Rodriguez-Solis was convicted of fraudulently and knowingly exporting and sending or attempting to export and send from the United States to Mexico 3,000 rounds of 7.62x39 caliber ammunition contrary to 22 U.S.C. § 2778 (b)(2) and (c), and Title 22 C.F.R. §§ 121.1, 123.1, 127.1, and 127.3, in violation of 18 U.S.C. § 554(a) and 2. Rodriguez-Solis pled guilty to this offense on August 2, 2019. As a result of his conviction, on October 17, 2019, the Court sentenced Rodriguez-Solis to 30 months in prison and a $100 assessment. https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1352-e2704/file

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Jan. 20, 2022: BIS issued Orders Denying Export Privileges of Khaldoun Hejazi. On March 3, 2020, in the U.S. District Court for the District of Idaho, Khaldoun Hejazi ("Hejazi") was convicted of violating Section 38 of the Arms Export Control Act (22 U.S.C § 2778) ("AECA"). Specifically, Hejazi was convicted of knowingly and willfully conspiring to export, and causing to be exported, firearms from the United States, which were designated as defense articles on the United States Munitions List, without having first obtained the required licenses or written approval from the U.S. Department of State. BIS has denied Hejazi's export privileges under the Export Administration Regulations for a period of five years from the date of Hejazi's conviction. The Office of Exporter Services has also revoked any BIS-issued licenses in which Hejazi had an interest at the time of his conviction. As a result of his conviction, the Court sentenced Hejazi to 30 months in prison, three years of supervised release, a $30,000 criminal fine, and a $100 court assessment. https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2022/1353-e2705/file

 

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

 

Jan. 5, 2022:  OFAC sanctioned Milorad Dodik (Dodik), who is a member of the Presidency of Bosnia and Herzegovina (BiH), as well as one entity under his control, Alternativna Televizija d.o.o. Banja Luka, in response to Dodik's corrupt activities and continued threats to the stability and territorial integrity of BiH. Dodik has used his official BiH position to accumulate personal wealth through graft, bribery, and other forms of corruption. His divisive ethno-nationalistic rhetoric reflects his efforts to advance these political goals and distract attention from his corrupt activities. Cumulatively, these actions threaten the stability, sovereignty, and territorial integrity of BiH and undermine the Dayton Peace Accords, thereby risking wider regional instability. https://home.treasury.gov/news/press-releases/jy0549

 

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Jan. 10, 2022: OFAC designates six officials of the Government of Nicaragua pursuant to Executive Order (E.O.) 13851. President Daniel Ortega and Vice President Rosario Murillo were inaugurated following fraudulent national elections orchestrated by their regime in November 2021, further consolidating their control of power to the detriment of the Nicaraguan people. This designation targets officials of the Nicaraguan military, the Nicaraguan Minister of Defense, the Nicaraguan Institute of Telecommunications and Mail (TELCOR), and the state-owned Nicaraguan Mining Company (ENIMINAS). The six officials that have been designated and added to the Specially Designated Nationals (SDN) list are:

 

  • Bayardo De Jesus Pulido Ortiz;
  • Bayardo Ramon Rodriguez Ruiz;
  • Rosa Adelina Barahona De Rivas;
  • Celina Delgado Castellon;
  • Nahima Janett Diaz Flores; and
  • Ramon Humberto Calderon Vindell.

https://home.treasury.gov/news/press-releases/jy0552

 

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Jan. 12, 2022: OFAC designated five Democratic People's Republic of Korea (DPRK) individuals and one Russian individual responsible for procuring goods for the DPRK's weapons of mass destruction (WMD) and ballistic missile-related programs. These actions are in line with U.S. efforts to prevent the advancement of the DPRK's WMD and ballistic missile programs and impede attempts by Pyongyang to proliferate related technologies. They also follow the DPRK's six ballistic missile launches since September 2021, each of which violated multiple United Nations Security Council Resolutions (UNSCRs). The individuals designated to the SDN list are:

  • ALAR, Roman Anatolyevich of Russia;
  • CHOE, Myong Hyon of North Korea;
  • KANG, Chol Hak of North Korea;
  • KIM, Song Hun of North Korea;
  • O, Yong Ho of North Korea;
  • PYON, Kwang Chol of North Korea; and
  • SIM, Kwang Sok of North Korea.

 

OFAC also added PARSEK LLC of Russia to the SDN list.

https://home.treasury.gov/news/press-releases/jy0555

 

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Jan. 18, 2022: OFAC added the following three Hizballah-linked financial facilitators and their Lebanon-based travel company to the SDN list:

 

  • ALAMAH, Jihad Salim of Lebanon;
  • DAOUN, Ali Mohamad of Lebanon;
  • DIAB, Adel of Lebanon; and
  • DAR AL SALAM FOR TRAVEL & TOURISM of Lebanon.

 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220118

 

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Jan. 20, 2022: OFAC sanctioned four individuals engaged in Russian government-directed influence activities to destabilize Ukraine. This is the latest action OFAC has taken to target purveyors of Russian disinformation. The four individuals are:

  • Taras Romanovych Kozak;
  • Volodymyr Mykolayovych Oliynyk;
  • VladimirLeonidovich Sivkovich; and
  • Oleh Voloshyn.

 

https://home.treasury.gov/news/press-releases/jy0562

 

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Jan. 21, 2022: OFAC designated Hizballah-affiliated financial facilitator Adnan Ayad, as well as members of an international network of facilitators and companies connected to him and to Adel Diab,

 

Adnan Ayad's business partner and fellow Hizballah financier who was designated by OFAC. The three individuals added to the SDN list are:

  • Adnan Ayad;
  • Jihad Adnan Ayad; and
  • Ali Adel Diab.

 

The ten entities added to the SDN list are:

  • Al Amir Co. for EngineeringConstruction and General Trading SARL;
  • Golden Group SAL Offshore;
  • Golden Group Trading SARL;
  • Hammer and Nail Construction Limited;
  • Hamidco Investment Limited;
  • Inshaat Co SARL;
  • Jammoul and Ayad for Industry and Trade;
  • Land Metics SARL;
  • Landmetics SAL Off-Shore; and
  • Top Fashion Gmbh Konfektionsbügelei.

https://home.treasury.gov/news/press-releases/jy0564

 

Jan. 31, 2022: OFAC designated 7 Burmese individuals and 2 Burmese entities. The seven individuals added to the SDN list are:

  • OO, Thida;
  • OO, Tin;
  • OO, Tun Tun;
  • TAY ZA, Htoo Htet;
  • TAY ZA, Pye Phyo;
  • THAUNG, Jonathan Myo Kyaw; and
  • ZA, Tay of Burma and Singapore.

 

The two entities added to the SDN list are:

  • Directorate Of Procurement Of The Commander-In-Chief Of Defense Services Army; and
  • KT Services & Logistics KTSL Company Limited.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220131

 

Fines and Penalties

 

Jan. 3, 2022: The U.S. Treasury Department, Office of Foreign Assets Control (OFAC) reached a settlement agreement with a unit of home rental firm Airbnb, Inc. for violations of U.S. sanctions on Cuba. Airbnb Payments, Inc. agreed to remit $91,172.29 to settle its potential civil liability for apparent violations of sanctions against Cuba. The apparent violations included payments related to guests traveling for reasons outside of OFAC's authorized categories, as well as a failure to keep certain required records associated with Cuba-related transactions, the Treasury Department said. Airbnb Payments' apparent violations were voluntarily self-disclosed and were non-egregious. https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220103

 

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Jan. 6, 2022: Robert Alcantara was charged in a criminal complaint with conspiring to traffic firearms and with making false statements. According to the allegations in the Complaint: From September 2019 up to November 2021, Alcantara and others entered an agreement in which Alcantara purchased the parts for more than 100 "ghost guns," machined the ghost guns at his house in Providence, Rhode Island, and then illegally sold the working and completed ghost guns. On November 20, 2021, law enforcement recovered parts for 45 ghost guns from Alcantara's car. When interviewed by law enforcement, Alcantara falsely told them that he had never sold or transferred ownership of a firearm to any other individual and that he had never transported a firearm to the Dominican Republic. https://www.justice.gov/usao-sdny/pr/rhode-island-man-charged-manhattan-trafficking-ghost-guns

 

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Jan. 6, 2022: Xiang Haitao, 44, a Chinese national formerly residing in Chesterfield, Missouri, pleaded guilty to conspiracy to commit economic espionage. According to court documents, Xiang conspired to steal a trade secret from Monsanto, an international company based in St. Louis, for the purpose of benefitting a foreign government, namely the People's Republic of China. According to court documents, Xiang was employed by Monsanto and its subsidiary, The Climate Corporation, from 2008 to 2017, where he worked as an imaging scientist. Monsanto and The Climate Corporation developed a digital, online farming software platform that was used by farmers to collect, store and visualize critical agricultural field data and increase and improve agricultural productivity for farmers. A critical component to the platform was a proprietary predictive algorithm referred to as the Nutrient Optimizer. Monsanto and The Climate Corporation considered the Nutrient Optimizer a valuable trade secret and their intellectual property. In June 2017, the day after leaving employment with Monsanto and The Climate Corporation, Xiang attempted to travel to China on a one-way airplane ticket. While he was waiting to board his flight, Federal officials conducted a search of Xiang's person and baggage. Investigators later determined that one of Xiang's electronic devices contained copies of the Nutrient Optimizer. Xiang continued on to China, where he worked for the Chinese Academy of Science's Institute of Soil Science. Xiang was arrested when he returned to the United States. Xiang pleaded guilty to one count of conspiracy to commit economic espionage and is scheduled to be sentenced on April 7. He faces a maximum penalty of 15 years in prison, a potential fine of $5 million, and a term of supervised release of not more than three years. https://www.justice.gov/opa/pr/chinese-national-pleads-guilty-economic-espionage-conspiracy

 

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Jan. 11, 2022: OFAC Settles with Sojitz (Hong Kong) Limited ("Sojitz HK") for $5,228,298 related to apparent violations of the Iranian Transactions and Sanctions Regulations. Sojitz HK, a Hong Kong, China-based company that engages in offshore trading and cross-border trade financing, has agreed to pay $5,228,298 to settle its potential civil liability for apparent violations of the Iranian Transactions and Sanctions Regulations (ITSR). The apparent violations occurred when Sojitz HK made U.S. dollar payments through U.S. financial institutions for Iranian-origin high-density polyethylene resin (HDPE) from its bank in Hong Kong to the HDPE supplier's banks in Thailand. In doing so, Sojitz HK caused the U.S. financial institutions that processed the funds to engage in and facilitate prohibited financial transactions related to goods of Iranian origin. The settlement amount reflects OFAC's determination that Sojitz HK's apparent violations were non-egregious and voluntarily self-disclosed and accounts for Sojitz HK's remedial response and cooperation with OFAC. https://home.treasury.gov/system/files/126/20220111_sojitz.pdf

 

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Jan. 13, 2022: Peter Sotis, 57, of Delray Beach, and Emilie Voissem of Sunrise, FL, were convicted in October 2021 following a one-week jury trial in Miami. Sotis was sentenced to 57 months in prison, and Voissem was sentenced to a split sentence of five months in prison and five months of home confinement. According to court documents, the charges stemmed from the defendants' scheme to cause the illegal export of rebreather diving equipment to Libya in August 2016. Rebreathers enable a diver to operate undetected for long periods of time underwater by producing little to no bubbles and by efficiently re-circulating the diver's own breath after replacing its carbon dioxide with oxygen. Because of these enhanced capabilities, rebreathers have dual-use, with both civilian and military applications, and are specifically included on the EAR Commerce Control List, which is the list of dual-use items that are export controlled and licensed by the U.S. Department of Commerce (DOC). Such restricted items require a Commerce Department license if the rebreathers are to be exported to any countries with national security concerns, such as Libya. https://www.justice.gov/opa/pr/south-florida-residents-sentenced-illegally-exporting-controlled-items-libya

 

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Jan. 14, 2022: A criminal complaint has been unsealed in federal court in Brooklyn charging Kambiz Attar Kashani, a dual citizen of the United States and Iran, with conspiring to illegally export U.S. goods, technology, and services to end-users in Iran, including the Government of Iran, in violation of the International Emergency Economic Powers Act (IEEPA). Kashani was arrested in Chicago, Illinois. The defendant was remanded pending a detention hearing. As alleged, Kashani orchestrated an elaborate scheme to evade U.S. export laws and use the U.S. financial system in procuring U.S. electronic equipment and technology for the Central Bank of Iran, which has been designated by the United States government as acting for or on behalf of terrorist organizations. The defendant allegedly used two United Arab Emirates companies as fronts to procure items from multiple U.S. technology companies, including a company in Brooklyn. https://www.justice.gov/usao-edny/pr/us-citizen-charged-conspiring-provide-electronic-equipment-and-technology-government

 

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Jan 21, 2022: The Department of State entered into a three-year consent agreement with Torrey Pines Logic, Inc. (TPL) of San Diego, California, and Dr. Leonid B. Volfson (Dr. Volfson) regarding violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR) with a fine of $840,000. TPL and Dr. Volfson voluntarily disclosed portions of the export violations. The AECA and ITAR violations related to unauthorized export of defense articles, unauthorized exports of defense articles to include the People's Republic of China and Lebanon (both prescribed countries pursuant to 22 CFR § 126.1 of the ITAR), engaging in ITAR controlled activities while ineligible, exporting articles without authorization from the Department of State during the CJ review process, making false statements on a CJ request, and failure to maintain and produce records. TPL and Dr. Volfson are debarred from engaging in ITAR controlled activities for 36 months. https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=9a8529c31b5dcd90c6c3866ae54bcb32

 

 

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Jan. 27, 2022: Saber Fakih, 46, of the United Kingdom, plead guilty in federal court in the District of Columbia to violations of the International Emergency Economic Powers Act (IEEPA) and Iranian Transactions and Sanctions Regulations. According to his plea, Saber Fakih conspired with Bader Fakih, 41, of Canada, Altaf Faquih, 70, of the United Arab Emirates, and Alireza Taghavi, 46, of Iran, to export and attempt to export an Industrial Microwave System (IMS) and counter-drone system from the United States to Iran, without first obtaining the requisite license from the Department of Treasury's Office of Foreign Assets Control (OFAC). Fakih pleaded guilty to count two of the indictment.

In addition, a related indictment was unsealed in the District of Columbia, charging Iranian national Jalal Rohollahnejad, 44, with smuggling, wire fraud, and related offenses arising from the same scheme. Rohollahnejad was previously added to the Department of Commerce's Bureau of Industry and Security Entity List in March 2020 for acting contrary to U.S. national security or foreign policy interests by procuring goods on behalf of a Specially Designated National (SDN). https://www.justice.gov/usao-dc/pr/indictment-and-guilty-plea-entered-iranian-export-case