This newsletter lists the latest changes in export control regulations through January 31, 2023. 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 info@fdassociates.net with questions or comments.
See our “Latest Sanctions Fines & Penalties” section below for an update on companies and persons denied export privileges by the United States Government.
REGULATORY UPDATES
The President
President Biden Enacted The Protecting American Intellectual Property Act of 2022
January 5, 2023: On January 5, 2023, President Biden signed the Protecting American Intellectual Property Act of 2022 (the Act) into law. The Act requires periodic reports to Congress identifying any “foreign persons” who are found to have engaged in significant theft of trade secrets of U.S. persons. The Act also requires menu-based sanctions against such persons, which may include blocking sanctions.
https://www.congress.gov/bill/117th-congress/senate-bill/1294/text and https://www.mondaq.com/unitedstates/export-controls–trade–investment-sanctions/1270622/new-sanctions-authority-for-theft-of-us-trade-secrets-by-foreign-persons
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U.S. Department Of Commerce
The U.S. Department of Commerce Issued Adjustments For Inflation To Each Civil Monetary Penalty Within Its Jurisdiction
January 3, 2023: 88 Fed. Reg. 3: The U.S. Department of Commerce has issued adjustments for inflation to each civil monetary penalty within its jurisdiction. The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, required the head of each agency to adjust for inflation its CMP levels in effect as of November 2, 2015, under a revised methodology that was effective for 2016 which provided for initial catch up adjustments for inflation in 2016, and requires adjustments for inflation to CMPs under a revised methodology for each year thereafter. The Department of Commerce’s 2023 adjustments for inflation to CMPs, effective January 15, 2023, apply only to CMPs with a dollar amount and will not apply to CMPs written as functions of violations. The Department of Commerce’s 2023 adjustments for inflation to CMPs apply only to those CMPs, including those whose associated violation predated such adjustment, which is assessed by the Department of Commerce after the effective date of the new CMP level. The adjustments for civil violations at the maximum level for violations of the Export Controls Act of 2018 increased from $328,121 to $353,534 on January 15, 2023.
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Bureau of Industry and Security (BIS) Amended The EAR Per Decisions Made At The Australia Group (AG) Virtual Implementation Meetings And The AG Plenary Meeting
January 17, 2023: 88 Fed. Reg. 2507: The Bureau of Industry and Security (BIS) published a final rule to amend the Export Administration Regulations (EAR) to reflect decisions made at the November 2021 and March 2022 Australia Group (AG) Virtual Implementation Meetings and the AG Plenary Meeting held in July 2022. The amendments include revisions to certain Export Control Classification Numbers to clarify the controls on genetic elements and genetically modified organisms and the scope of the exclusion that applies to medical isolators “specially designed” for barrier nursing or transportation of infected patients; and make clarifications by adding four naturally occurring, dual-use marine toxins (specifically, brevetoxins, gonyautoxins, nodularins and palytoxin) and removing cholera toxin. The addition of these four toxins is consistent with Section 1758 of the Export Control Reform Act of 2018 (ECRA) regarding emerging and foundational technologies. This rule also included amendments to reflect the AG Plenary updates to the nomenclature of certain bacteria and fungi, and the clarification of the definition of “disinfected” as it applies to certain biological equipment.
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January 18, 2023: 88 Fed. Reg. 2821: On October 7, 2022, the Bureau of Industry and Security (BIS) updated the Export Administration Regulations (EAR) to implement necessary controls on advanced computing integrated circuits (ICs), computer commodities that contain such ICs, and certain semiconductor manufacturing items, and to make other changes to the EAR to ensure that appropriate controls are in place for these items, including specific activities of “U.S. persons.” This rule updates the controls to more effectively achieve the policy objectives identified in previous regulations by adding the same controls implemented in China in that rule to Macau.
This rule is effective on January 17, 2023.
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Department of State, Directorate of Defense Trade Controls (DDTC)
DDTC Name And Address Changes Posted To Website
January 3 through 26, 2023: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at
- General Electric Canada Changes in Names and Addresses from General Electric International Inc. 2300 Meadowdale Blvd., Mississauga, Canada (and all locations in Canada), General Electric International Inc. 201 Brownlow Ave., Unit 12, Dartmouth, Canada (and all locations in Canada), General Electric Canada Company 2300 Meadowdale Blvd., Mississauga, Canada (and all locations in Canada), and General Electric Canada 60 Queen Street, Suite 1200, Ottawa, Canada (and all locations in Canada) to GEC Aviation Inc. 1919 Minnesota Court, Suite 100, Mississauga, Canada L5N 0C9 due to corporate reorganization;
- Change in Address for Howmet de Mexico S De RL CV (Howmet de Mexico) from K.M. 7.100.500 Carretera Presa La Amistad, Parque Industrial Amistad, Acuna, Coahuila, Mexico C.P. 26220 to Avenida Hidalgo No. 120, Parque Industrial Amistad, Ciudad Acuna, Coahuila, Mexico C.P. 26220;
- Change in Name from Hanwha Defense Co., Ltd. to Hanwha Aerospace Co., Ltd due to merger;
- Change in Name from Ultra Electronics Limited to Ultra Sonar Systems Limited, Ultra I&C Limited, and Ultra Nuclear Limited due to internal restructuring;
- Change in Name from Ultra Electronics Limited to Ultra PCS Limited and Ultra Electronics CEMS Limited due to internal restructuring;
- Change in Name from Viasat, Inc. to L3Harris Technologies, Inc., subsidiary L3 Technologies, Inc. as a result of the acquisition of the Tactical Data Link product line assets by L3Harris Technologies, Inc.;
- Changes in Name from Alion Science and Technology Corporation and HII Defense and Federal Solutions, Inc. to HII Mission Technologies Corp. as a result of corporate restructuring;
- Change in Name from Astek Industrie to Astek Technology;
- Change in Address for MTG Marinetechnik GmbH from Budnikowsky-Twiete 7, 22041 Hamburg, Germany to Am Stadtrand 63, 22047 Hamburg, Germany;
- Change in Name from Tecnavia to Babcock Mission Critical Services France SA due to acquisition;
- Change in Name from Proteus to Babcock Mission Critical Services France SA due to acquisition;
- Change in Name from Inaer Helicopters France SA to Babcock Mission Critical Services France SA due to acquisition;
- Change in Name from Airbus HAPS Connectivity Solutions Ltd. to Aalto Haps Limited due to corporate rebranding;
- Change in Name from Viasat Australia Pty Ltd to L3Harris Communications Australia Pty Ltd. as a result of the acquisition of the Australian Tactical Data Link product line assets by L3Harris Technologies, Inc.;
- Change in Address for Unitronex Corporation from 2155 Shelby Drive, Suite C, Sedona, Arizona 86336 to 781 Cove Parkway, Suite B, Cottonwood, Arizona 86326.
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The U.S. Department Of State Established The Office Of The Special Envoy For Critical And Emerging Technology
January 3, 2023: The U.S. Department of State has established the Office of the Special Envoy for Critical and Emerging Technology and began operations at the Department of State on January 3, 2023. Secretary Blinken established the office as part of the wider modernization agenda because the constellation of critical and emerging technologies reshaping the world is now an integral part of the conduct of U.S. foreign policy and diplomacy. The competition to develop and deploy foundational technologies is intensifying. The Office of the Special Envoy will bring additional technology policy expertise, diplomatic leadership, and strategic direction to the Department’s approach to critical and emerging technologies. As the Department works to strengthen tech diplomacy across the organization, the office will provide a center of expertise and energy to develop and coordinate critical and emerging technology foreign policy, and to engage foreign partners on emerging technologies that will transform our societies, economies, and security—including biotechnology, advanced computing, artificial intelligence, and quantum information technologies. It will work in close coordination with the various bureaus and offices across the Department that are engaging on these and other technology topics that are central to our foreign policy.
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The Directorate of Defense Trade Controls Updated Its Guidance For U.S. Persons Working Abroad
January 5, 2023: The Directorate of Defense Trade Controls (DDTC) has updated the guidance for U.S. persons working abroad (USPAB) applications. The Guidance is a 10-page, four-part guidance. Part 1 provides General Guidance, Part 2 provides an outline of the required elements for a USPAB Authorization Submission Request, Part 3 provides a template for the required submission letter, and Part 4 provides guidance for the completion of the required DS-6004 form in DECCS.
The Guidance for USPAB Authorizations relies heavily on defined terms from Part 120 of the ITAR in its guidance and also in the preparation of any USPAB request.
Key points are as follows:
- The applicant can only be a U.S. person/individual working abroad;
- The authorization is limited to the provision of defense services by the applicant to his/her foreign employer or foreign parties on behalf of their employer;
- No technical data or defense articles will be authorized for export under such authorization;
- The inclusion of two provisos from DDTC for every USPAB authorization which validates the preceding statement;
- The requirement to specifically identify in accordance with 22 CFR §§ 120.32(a)(1) or (3) the defense services being provided; and
- The requirement to identify the applicant’s U.S. education or experience related to defense articles in the submission letter to be included with the submission.
Part 1 begins by stating that a USPAB is an individual U.S. Person as defined in § 120.62 who “…resides overseas, works for a foreign employer, and provides defense services as defined in § 120.32(a)(1) [furnishing of assistance (including training) to foreign persons, whether in the United States or abroad in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing, or use of defense articles] and/or (3) [Military training of foreign units and forces…] to their employer or other foreign parties.”
Note the exclusion of § 120.32(a)(2), which is the furnishing of technical data to foreign persons. This is because USPAB authorizations may authorize the provision of defense services only. They do not authorize the export of defense articles or technical data. Such authorization must be obtained under separate DDTC authorization.
Only the USPAB can be the applicant. The employer is the foreign end user of the defense services. A USPAB license authorization will allow a USPAB to provide defense services to their employer or other foreign persons (as defined in § 120.63) on behalf of their employer. Any recipient of the defense services must be listed in the license authorization.
Due to the limitations stated above, every USPAB authorization will include the following two provisos from DDTC:
“This approval authorizes you to furnish defense services to your foreign employer and the foreign parties specifically identified in your application as needing to receive defense services from you. Should you need to furnish defense services to any other foreign parties, you must submit another request that specifically identifies these parties as recipients of defense services.”
And
“This approval does not authorize you to transfer ITAR-controlled technical data (as defined in 22 CFR 120.33). Any ITAR-controlled technical data used in connection with the activities authorized by this license must be the subject of a separate Department authorization.”
Note that the above provisos do not preclude the applicant from working with U.S.-origin ITAR technical data lawfully exported to their employer.
All USPAB authorizations (to include any provisos) will be sent in letter format to the applicant via email.
Part 2 identifies and enumerates the six elements of a USPAB authorization request as follows:
- Form DS-6004 (the application form to use for the request)
- Submission letter [Required and must be structured in accordance with Part 3 of the Guidance];
- Resume;
- Detailed job description (if not included in the submission letter);
- ITAR § 126.13(a) certification (applicant must self-certify); and
- Other supporting documentation.
This Part also specifically identifies that the applicant may have its submission prepared on its behalf by a third party (should be evidenced with written acknowledgment).
Part 3 breaks down the required submission letter into seven Sections. Of note is Section 2, which requires that the applicant specifically tie their work back to one or more of the defense services defined in 120.32(a)(1) or (3). To drive home this point, examples are provided as follows:
- “I will be furnishing assistance in designing, developing, and maintaining the XXX defense article. As the project engineer, I will be …”
Or
- “I will be training the Country X Air Force in the use of ….”
Applicants are reminded to be as descriptive as possible.
Part 4 provides direction on completing the DS-6004.
The Frequently Asked Questions (“FAQs”) associated with this Guidance are 21 questions ranging from whether registration is required to whether a USPAB authorization is required for a project that is the subject of a TAA.
A new guidance document, as well as a submission letter template and sample §126.13 certification letter for USPAB authorization requests, are located on the “Guidelines & Instructions” page of the DDTC website:
https://www.pmddtc.state.gov/ddtc_public?id=ddtc_kb_article_page&sys_id=f9ccfe96dbb4130044f9ff621f961929 and https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_news_and_events
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The U.S. Department Of State Published A Final Rule To Adjust Civil Monetary Penalties
January 11, 2023: 88 Fed. Reg. 1505: The U.S. Department of State published a final rule to adjust the civil monetary penalties (CMP) for regulatory provisions maintained and enforced by the Department of State. The revised CMP adjusts the amount of civil monetary penalties assessed by the Department of State based on the December 2022 Office of Management and Budget guidance and recent legislation. For penalties adjusted according to the December 2022 guidance, the new amounts will apply only to those penalties assessed on or after the effective date of this rule, regardless of the date on which the underlying facts or violations occurred. For the penalty adjusted according to recent legislation, the new amounts will apply only to those penalties assessed for violations occurring on or after December 27, 2022.
| Citation in 22 CFR | FY22 Max Penalties | New (FY 23) Max Penalties |
| § 35.3 | $12,537 up to $376,138 | $13,508 up to $405,270 |
| § 103.6(a)(1) Prohibited Acts |
$42,163 | $45,429 |
| § 103.6(a)2) Recordkeeping Violations |
$8433 | $9086 |
| ITAR § 127.10(a)(1)(i) | $1,272,251 | the greater of $1,200,000 or the amount that is twice the value of the transaction that is the basis of the violation with respect to which the penalty is imposed |
| ITAR § 127.10(a)(1)(ii) | $925,041, or five times the amount of the prohibited payment, whichever is greater |
$996,685, or five times the amount of the prohibited payment, whichever is greater |
| ITAR § 127.10(a)(1)(iii) | $1,101,061 | $1,186,338 |
| § 138.400 First Offenders |
$21,665 | $23,343 |
| § 138.400 | $22,021 up to $220,213 | $23,727 up to $237,268 |
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Census Bureau
U.S. Customs And Border Protection (CBP) Deployed Additional Features As Part Of The Automated Commercial Environment
January 12, 2023: The U.S. Customs and Border Protection (CBP) deployed additional features as part of the Automated Commercial Environment (ACE) Portal Modernization – Phase 3.
The References Tab has a new link to access the AEDirect portal titled “AES Direct UI”. Users should begin navigating to the AESDirect Portal using only the “AES Direct UI” link. Access through the “Legacy ACE” link will be discontinued in the future.
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U.S. Customs And Border Protection (CBP) Published Tips On How To Resolve AES Response Messages
January 24, 2023: The U.S. Customs and Border Protection (CBP) published the following tips on how to resolve AES response messages.
When a shipment is filed to the AES, a system response message is generated and indicates whether the shipment has been accepted or rejected. If the shipment is accepted, the AES filer receives an Internal Transaction Number (ITN) as confirmation. Though the shipment is accepted, the filer may still receive a Verify Message, Compliance Alert, Informational Message, or Warning Message along with their ITN. However, if the shipment is rejected, a Fatal Error notification is received and must be corrected to receive a valid ITN.
Response Code: 171
Narrative: Transportation Reference Number Not Allowed for MOT
Severity: Fatal
Reason: The Transportation Reference Number is not allowed to be reported for the Mode of Transportation reported for this shipment.
Resolution: A Transportation Reference Number is required for vessel shipments and allowed for air, rail or truck shipments. A Transportation Reference Number cannot be reported for a shipment using any other mode of transportation (i.e., mail, fixed, or other).
Verify the Mode of Transportation Code and Transportation Reference Number, correct the shipment, and resubmit.
Response Code: 501
Narrative: Export Information Code Missing
Severity: Fatal
Reason: The Export Information Code was not reported.
Resolution: An Export Information Code must be reported on every shipment. For a complete list of Export Information Codes, refer to ‘Appendix E – Commodity Filing Export Information’ of the AESTIR.
Verify the Export Information Code, correct the shipment, and resubmit.
It is important that AES filers correct Fatal Errors as soon as they are received to comply with Foreign Trade Regulations. These errors must be corrected before export for shipments filed pre-departure and as soon as possible for shipments filed post-departure, but not later than five calendar days after departure.
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Department of the Treasury’s Office of Foreign Assets Control
The Department Of The Treasury’s Office Of Foreign Assets Control (OFAC) Adjusted For Inflation The Maximum Amount Of The Civil Monetary Penalties
January 12, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended its regulations to implement for 2023 the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. This regulatory amendment adjusts for inflation the maximum amount of the civil monetary penalties that may be assessed under relevant OFAC regulations.
Maximum CMP amounts for Relevant Statutes Statute Existing maximum Civil Monetary Penalties.
| Statute | Prior Maximum CMP Amount | New Maximum CMP Amount |
| TWEA | $97,529 | $105,083 |
| IEEPA | $330,947 | $356,579 |
| AEDPA | $87,361 | $94,127 |
| FNKDA | $1,644,396 | $1,771,754 |
| CDTA | $14,950 | $16,108 |
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230112 and https://home.treasury.gov/system/files/126/20230112_penalties_inflation.pdf
| 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)
The Commerce Department’s Bureau Of Industry And Security (BIS) Imposed Restrictions On Seven Iranian Drone Producers
January 31, 2023: 88 Fed. Reg. 6621: The Commerce Department’s Bureau of Industry and Security (BIS) imposed restrictions on seven Iranian drone producers, including on transferring foreign-made components to them. These entities were added to the Entity List for contributing to Russia’s military and defense industrial base through the production of Iranian unmanned aerial vehicles (UAVs or “drones”), which are being transferred to Russia for use in its war of aggression against Ukraine. The rule applies some of the Department’s most severe export restrictions on these entities, effectively cutting them off from legally accessing items made subject to U.S. jurisdiction. The action serves to further U.S. efforts to cut the Russian military off from the items and sources of support it needs to sustain its unjust and illegal war against Ukraine.
- 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.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3213-iran-drones/file and https://www.bis.doc.gov/index.php/documents/regulations-docs/federal-register-notices/federal-register-2023/3215-88-fr-6621/file
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Department of the Treasury, Office of Foreign Assets Control (OFAC)
January 5, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated critical nodes of a key financial facilitation network of the Islamic State of Iraq and Syria (ISIS), which included four individuals and two entities in Turkey, who have enabled the terrorist group’s recruitment and financial transfers to and from Iraq and Syria. This network played a key role in money management, transfer, and distribution for ISIS in the region. Concurrently, the Turkish Ministry of Treasury and Finance and the Ministry of Interior have implemented an asset freeze against members of this network.
The following individuals have been added to OFAC’s SDN List:
- Al-Juburi, Lu’ay Jasim Hammadi of Turkey;
- Al-Khatuni, Abd Al Hamid Salim Ibrahim Ismail Brukan of Iraq;
- Al-Khatuni, Muhammad Abdul Hamid Salim Brukan of Iraq;
- Al-Khatuni, Umar Abdul Hamid Salim Brukan of Iraq.
The following entities have been added to OFAC’s SDN List:
- Sham Express of Turkey;
- Wadi Alrrafidayn For Foodstuffs of Turkey.
https://home.treasury.gov/news/press-releases/jy1181 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230105
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January 6, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has designated six executives and board members of U.S. designated Qods Aviation Industries (QAI), a key Iranian defense manufacturer responsible for the design and production of unmanned aerial vehicles (UAVs). Iran has transferred these UAVs for use in Russia’s unprovoked war of aggression in Ukraine. OFAC is also updating QAI’s entry on the Specially Designated Nationals and Blocked Persons List (SDN List) to include its new alias, Light Airplanes Design, and Manufacturing Industries. Finally, OFAC is designated the director of Iran’s Aerospace Industries Organization (AIO), the key organization responsible for overseeing Iran’s ballistic missile programs.
The following individuals have been added to OFAC’s SDN List:
- Arlanizadeh, Vali of Iran;
- Damavandian, Ghassem of Iran;
- Ghoreishi, Seyed Hojatollah of Iran;
- Khaki, Reza of Iran;
- Niyazi-Angili, Majid Reza of Iran;
- Sharifi-Tehrani, Hamidreza of Iran;
- Siavash, Nader Khoon of Iran.
https://home.treasury.gov/news/press-releases/jy1182 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230106
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January 9, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Venezuela-related General License 31B,”Certain Transactions Involving the IV Venezuelan National Assembly and Certain Other Persons.” OFAC also amends several Frequently Asked Questions (522, 547, 660, 679, and 680).
Venezuela-related General License 31B: U.S. persons are authorized to engage in all transactions prohibited by Executive Order (E.O.) 13884, as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), involving the IV Venezuelan National Assembly seated on January 5, 2016 (“IV National Assembly”); its Delegated Commission; any entity established by, or under the direction of, the IV National Assembly to exercise its mandate (“IV National Assembly Entity”); or any person appointed or designated by, or whose appointment or designation is retained by, the IV National Assembly, its Delegated Commission, or a IV National Assembly Entity, including their respective members and staff. U.S. persons are authorized to engage in all transactions prohibited by E.O. 13850, as amended by E.O. 13857, and incorporated into the VSR, involving any person appointed or designated by, or whose appointment or designation is retained by, the IV National Assembly, its Delegated Commission, or an IV National Assembly Entity to the board of directors (including an ad hoc board of directors) or as an executive officer of a Government of Venezuela entity (including entities owned or controlled, directly or indirectly, by the Government of Venezuela). This general license does not authorize:
(1) Any transaction involving the Venezuelan National Constituent Assembly convened by Nicolas Maduro or the National Assembly seated on January 5, 2021, including their respective members and staff; or
(2) Any transaction otherwise prohibited by the VSR, including transactions involving any person blocked pursuant to the VSR other than the persons identified in paragraph (a) or (b) of this general license unless separately authorized.
https://home.treasury.gov/system/files/126/venezuela_gl31b.pdf
The following Venezuela Frequently Asked Questions (“FAQs”) are amended:
Question 522: Other than through the existing general licenses, under what circumstances might U.S. persons be authorized to deal in new debt of greater than 30 or 90 days issued by the Government of Venezuela?
Answer: In the Lima Declaration of August 8, 2017, 12 countries across the Americas refused to recognize the Constituent Assembly or the laws it adopts because of its illegitimate nature while at the same time fully backing the democratically elected IV Venezuelan National Assembly seated on January 5, 2016 (“IV National Assembly”). We stand in solidarity with our friends and allies in the region. If the democratically elected IV National Assembly approved a new debt issuance by the Government of Venezuela that Executive Order (E.O.) 13808 would prohibit U.S. persons from dealing in, the United States would consider using licensing authority to allow U.S. persons to deal in the issuance.
Question 547: Can U.S. Persons participate in meetings about restructuring outstanding Venezuelan and PDVSA debt?
Answer: U.S. persons are generally prohibited from engaging in transactions or dealings with persons named on OFAC’s SDN List, including dealing with an SDN in the context of efforts to restructure Venezuelan and Petroleos de Venezuela, S.A. (PdVSA) debt. Provided there is no SDN involvement, Venezuela-related General License 3 authorizes U.S. persons to engage in all transactions related to bonds specified in the Annex to General License 3, including participating in negotiations regarding such bonds. General License 3 does not authorize any transaction by a U.S. person or within the United States that involves the creation or subsequent dealing in new debt of PdVSA or debt otherwise of the Government of Venezuela with a maturity of greater than 90 days or 30 days, respectively, absent a license from OFAC. OFAC would consider license applications involving any such new debt or equity on a case-by-case basis and base licensing determinations on the facts and circumstances of the particular application. As stated in FAQ 522, the United States government would consider using licensing authority to allow U.S. persons to deal with new debt of the Government of Venezuela approved by the democratically elected IV Venezuelan National Assembly seated on January 5, 2016.
Question 660: When will sanctions be lifted on Petróleos de Venezuela, S.A. (PdVSA) or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest?
Answer: The path to sanctions relief for PdVSA and its subsidiaries is through the expeditious transfer of control of the company to a democratically elected government that is committed to taking concrete and meaningful actions to combat corruption, restore democracy, and respect human rights. A bona fide transfer of control will ensure that the assets of Venezuela are preserved for the country’s people rather than misused and diverted by former President Nicolas Maduro. Treasury will continue to use its economic tools to support the IV Venezuelan National Assembly seated on January 5, 2016, and the Venezuelan people’s efforts to restore their democracy.
Question 679: Executive Order (E.O.) 13884 of August 5, 2019, “Blocking Property of the Government of Venezuela,” blocks all property and interests in property of the Government of Venezuela. What does this mean for the IV Venezuelan National Assembly seated on January 5, 2016 (“IV National Assembly”)?
Answer: The United States stands with the Venezuelan people and the IV National Assembly in opposition to the Maduro regime. On January 09, 2023, OFAC issued Venezuela-related General License 31B authorizing all transactions involving the IV National Assembly, its Delegated Commission, any entity established by, or under the direction of, the IV National Assembly to exercise its mandate (“IV National Assembly Entity”), or involving any person appointed or designated by, or whose appointment or designation is retained by, the IV National Assembly, its Delegated Commission, or an IV National Assembly Entity, to act on behalf of the Government of Venezuela, including their respective members and staff, that are otherwise prohibited by E.O. 13884. The authorization also covers transactions prohibited by E.O. 13850, as amended, with respect to any person appointed or designated by, or whose appointment or designation is retained by, the IV National Assembly, its Delegated Commission, or an IV National Assembly Entity to the board of directors (including an ad hoc board of directors) or as an executive officer of a Government of Venezuela entity (including entities owned or controlled, directly or indirectly, by the Government of Venezuela).
Effective January 09, 2023, General License 31B replaced and superseded General License 31A in its entirety.
Question 680: Does the blocking of the Government of Venezuela impact the ability of U.S. persons to transact with the Government of Venezuela, or persons in which the Government of Venezuela owns, directly or indirectly, a 50 percent or greater interest?
Answer: Yes. Unless exempt or authorized by OFAC, all property, and interests in property of persons meeting the definition of the Government of Venezuela (see section 6(d) of E.O. 13884 of August 5, 2019) that are in or come within the United States or the possession or control of a United States person are blocked, pursuant to E.O. 13884. The term “Government of Venezuela,” as defined in E.O. 13884, includes the state and Government of Venezuela, any political subdivision, agency, or instrumentality thereof, including the Central Bank of Venezuela and Petroleos de Venezuela, S.A. (PdVSA), any person owned or controlled, directly or indirectly, by the foregoing, and any person who has acted or purported to act directly or indirectly for or on behalf of, any of the foregoing, including as a member of the Maduro regime.
OFAC has issued several General Licenses (GLs) that provide authorization for categories of persons blocked by E.O. 13884. GL 34A authorizes transactions with certain Government of Venezuela individuals, including United States citizens; permanent resident aliens of the United States; individuals who have a valid U.S. immigrant or nonimmigrant visa, other than individuals in the United States as part of Venezuela’s mission to the United Nations; former employees and contractors of the Government of Venezuela; and current employees and contractors of the Government of Venezuela who provide health or education services in Venezuela, including at hospitals, schools, and universities. In addition, GL 22 authorizes certain transactions related to Venezuela’s mission to the United Nations, and GL 31B provides authorization related to the IV Venezuelan National Assembly seated on January 5, 2016 (“IV National Assembly”). Please see FAQ 679 regarding the scope of GL 31B. Without authorization from OFAC, U.S. persons are generally prohibited from engaging in transactions with the Government of Venezuela, or persons in which the Government of Venezuela owns, directly or indirectly, a 50 percent or greater interest. U.S. persons are not prohibited from engaging in transactions involving the country or people of Venezuela, provided blocked persons or any conduct prohibited by any other Executive order imposing sanctions measures related to the situation in Venezuela are not involved.
Please note that persons meeting the definition of Government of Venezuela and persons that are owned, directly or indirectly, 50 percent or more by the Government of Venezuela are blocked pursuant to E.O. 13884, regardless of whether the person appears on the Specially Designated Nationals and Blocked Persons list (SDN List), unless exempt or authorized by OFAC.
As a general matter, OFAC expects financial institutions to conduct due diligence on their own direct customers (including, for example, their ownership structure) to confirm that those customers are not persons whose property and interests in property are blocked. For other types of transactions where a financial institution acts solely as an intermediary and fails to block transactions involving a sanctions target, OFAC will consider the totality of the circumstances surrounding the bank’s processing of the transaction to determine what, if any, regulatory response is appropriate.
https://home.treasury.gov/policy-issues/financial-sanctions/faqs/updated/2023-01-09 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230109
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January 11, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is publishing one new Iran-related Frequently Asked Question (FAQ 1110) and amending several Iran-related Frequently Asked Questions (FAQs 337, 338, 339, 340, 341, 342, 343, 344, 345, 346, 348, 434, 435, 436, 437, 438, 439, 440, 441, 442, 443, and 853).
Question 1110: What are key changes made by Iran General License D-2 in comparison to Iran General License D-1?
Answer: On September 23, 2022, OFAC issued Iran General License (GL) D-2 to further support the provision of communication tools to ordinary Iranians and assist in their efforts to resist repressive internet censorship and surveillance tools deployed by the Iranian government. GL D-2, which supersedes GL D-1, both expands and clarifies the authorizations in GL D-1 and section 560.540 of the Iranian Transactions and Sanctions Regulations, 31 CFR 560 (ITSR), with respect to the exportation and reexportation, directly or indirectly, from the United States or by a U.S. person, of certain software and services incident to the exchange of communications over the internet. See FAQ 344 for additional information on how the authorizations in GL D-2 compare to section 560.540 of the ITSR.
Since GL D-1 was issued on February 7, 2014, the types of software and services that support communication over the internet have changed. To reflect technological developments in communication-related software and services since the issuance of GL D-1 (including in cloud-based services), OFAC issued GL D-2 to expand and clarify the range of U.S. software and services available to Iranians under OFAC’s sanctions program. For example, GL D-2 explicitly authorizes certain types of software and services for exportation or reexportation to Iran that are incident to communications over the internet, including cloud-based software and services.
GL D-2 expands and clarifies the pre-existing authorizations in several ways, including by making the following changes:
- Removing the “personal” qualifier from the prior authorizations relating to “personal communications,” which resulted in compliance burdens for companies seeking to verify the personal nature of the communications supported by their software or services;
- Expanding and clarifying the list of examples of communication tools within the authorizations in paragraphs (a)(1) and (2) to include: social media platforms, collaboration platforms, video conferencing, e-gaming, e-learning platforms, automated translation, web maps, and user authentication services, as well as cloud-based software and services in support of the foregoing, or of any other activity authorized or exempt under the ITSR;
- Expanding the authorization in paragraph (a)(2) for software incident to the exchange of communications over the internet to include software that enables services incident to the exchange of communications over the internet (including cloud-based services);
- Clarifying that the authorization in paragraph (a)(4) for the export or reexport of non-commercial grade internet connectivity services includes cloud-based services; and
- Expanding the case-by-case licensing policy for activity not authorized by the general license or exempt to include additional services that support internet freedom in Iran, such as certain activities relating to the development and hosting of anti-surveillance software by Iranian software developers. Such services would also include, for example, the development and hosting of anti-censoring software by Iranian software developers and the exportation of certain software development tools to Iranians seeking to create their own anti-surveillance or anti-censorship apps and upload them to mobile app sites.
See the following link for updates to FAQs 337, 338, 339, 340, 341, 342, 343, 344, 345, 346, 348, 434, 435, 436, 437, 438, 439, 440, 441, 442, 443, and 853: https://home.treasury.gov/policy-issues/financial-sanctions/faqs/updated/2023-01-11.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230111 and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1110
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January 12, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Counter Terrorism General License 21B “Authorizing Limited Safety and Environmental Transactions Involving Certain Vessels,” and is amending one Counter Terrorism-related Frequently Asked Question (1097).
Counter Terrorism General License 21B: All transactions that are ordinarily incident and necessary to one of the following activities involving the persons or vessels described below in this general license that are prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), are authorized through 12:01 a.m. eastern daylight time, April 13, 2023, provided that any payment to a blocked person must be made into a blocked account in accordance with the GTSR:
(1) The safe docking and anchoring of any of the blocked vessels listed below this general license (“blocked vessels”) in port;
(2) The preservation of the health or safety of the crew of any of the blocked vessels; and
(3) Emergency repairs of any of the blocked vessels or environmental mitigation or protection activities relating to any of the blocked vessels.
The authorization above of this general license applies to the following blocked persons and vessels listed on the Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List and any entity in which any of the following persons own, directly or indirectly, a 50 percent or greater interest:
- Artemov, Victor Sergioyovich
- BOCEANICA, IMO 9267132
- ZEPHYR I (f.k.a. ZHEN I), IMO 9255880
- Azul Vista Shipping Corp.
- JULIA A (f.k.a. AZUL), IMO 9236353
- Blue Berri Shipping Inc.
- RAIN DROP, IMO 9233208
- Harbour Ship Management Limited
- B LUMINOSA, IMO 9256016
- BLUEFINS, IMO 9221657
- BUENO, IMO 9282443
- Pontus Navigation Corp.
- NOLAN (f.k.a. OSLO), IMO 9179701
- Technology Bright International Ltd.
- YOUNG YONG, IMO 9194127
- Triton Navigation Corp.
- ADISA, IMO 9304667
- Vista Clara Shipping Corp.
- LARA I (f.k.a. CLARA), IMO 9231767
Question 1097: What does Counterterrorism-related General License 21B (GL 21B) authorize?
Answer: GL 21B authorizes all activities otherwise prohibited by the Global Terrorism Sanctions Regulations (GTSR), 31 CFR part 594, that are ordinarily incident and necessary to the limited safety and environmental activities described in paragraph (a) of GL 21B involving certain blocked persons and vessels through 12:01 a.m. eastern daylight time, April 13, 2023. GL 21B does not authorize the offloading of any cargo onboard any of the blocked vessels listed in GL 21B, and any payment of claims to or for the benefit of any blocked persons or vessels would require a specific license from OFAC.
After the expiration of GL 21B, U.S. persons will be prohibited from engaging in any transactions with the blocked persons or vessels listed in GL 21B, unless otherwise exempt or authorized by OFAC. U.S. persons unable to conclude transactions authorized by GL 21B before 12:01 a.m. eastern daylight time, April 13, 2023, are encouraged to seek guidance from OFAC.
Non-U.S. persons, including foreign financial institutions, generally do not risk exposure to sanctions for engaging in transactions with blocked persons where those transactions would not require a specific license if engaged in by a U.S. person. Non-U.S. persons unable to conclude transactions authorized by GL 21B before 12:01 a.m. eastern daylight time, April 13, 2023, are encouraged to seek guidance from OFAC.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230112_33 and https://home.treasury.gov/system/files/126/ct_gl21b.pdf and
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January 17, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 6C “Transactions Related to Agricultural Commodities, Medicine, Medical Devices, Replacement Parts and Components, or Software Updates, the Coronavirus Disease 2019 (COVID-19) Pandemic, or Clinical Trials”, Russia-related General License 54A “Authorizing Certain Transactions Involving VEON Ltd. or VEON Holdings B.V. Prohibited by Executive Order 14071”, and Russia-related General License 28B “Authorizing the Wind-Down and Rejection of Certain Transactions Involving Public Joint Stock Company Transkapitalbank and Afghanistan”. OFAC also amends four Russia-related Frequently Asked Questions (982, 1054, 1055, and 1059).
Russia-related General License 6C: All transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587, related to: (1) the production, manufacturing, sale, transport, or provision of agricultural commodities, agricultural equipment, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices; (2) the prevention, diagnosis, or treatment of COVID-19 (including research or clinical studies relating to COVID-19); or (3) clinical trials and other medical research activities are authorized. For the purposes of this general license, agricultural commodities, medicine, and medical devices are defined as follows:
(1) Agricultural commodities. For the purposes of this general license, agricultural commodities are products that fall within the term “agricultural commodity” as defined in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602) and are intended for use as (i) Food for humans (including raw, processed, and packaged foods; live animals; vitamins and minerals; food additives or supplements; and bottled drinking water) or animals (including animal feeds); (ii) Seeds for food crops; (iii) Fertilizers or organic fertilizers; or (iv) Reproductive materials (such as live animals, fertilized eggs, embryos, and semen) for the production of food animals.
(2) Medicine. For the purposes of this general license, medicine is an item that falls within the definition of the term “drug” in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).
(3) Medical devices. For the purposes of this general license, a medical device is an item that falls within the definition of “device” in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).
https://home.treasury.gov/system/files/126/russia_gl6c.pdf
Russia Related General License 54A: All transactions ordinarily incident and necessary to the purchase or receipt of any debt or equity securities of VEON Ltd. or VEON Holdings B.V. that are prohibited by section 1(a)(i) of Executive Order (E.O.) 14071 are authorized, provided that the debt or equity securities were issued before June 6, 2022. Note: Except as provided below, all transactions ordinarily incident and necessary to facilitating, clearing, and settling of transactions authorized by the above that is prohibited by section 1(a)(i) of E.O. 14071 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 January 17, 2023, General License No. 54, dated November 18, 2022, is entirely replaced and superseded by this General License No. 54A.
https://home.treasury.gov/system/files/126/russia_gl54a.pdf
Russia Related General License 28B: All transactions that are ordinarily incident and necessary to the wind-down of transactions involving Public Joint Stock Company Transkapitalbank (TKB), or any entity in which TKB owns, directly or indirectly, a 50 percent or greater interest (collectively, “TKB entities”), that are ultimately destined for or originating from Afghanistan and prohibited by Executive Order (E.O.) 14024 are authorized through 12:01 a.m. eastern daylight time, March 18, 2023, provided that any payment to any TKB entity is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).
Note: The transactions authorized above include the wind-down and closure of correspondent accounts operated by U.S. financial institutions on behalf of TKB entities, provided any remaining funds or assets in the correspondent account to be paid to any TKB entity are placed in a blocked account. U.S. persons are authorized to reject, rather than block, all transactions ordinarily incident and necessary to the processing of funds ultimately destined for or originating from Afghanistan involving one or more TKB entities as an originating, intermediary or beneficiary financial institution and prohibited by E.O. 14024 through 12:01 a.m. eastern daylight time, March 18, 2023.
https://home.treasury.gov/system/files/126/russia_gl28b.pdf and
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230117
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January 17, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Venezuela-related General License 5J, “Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After April 20, 2023”. OFAC also amended Venezuela-related Frequently Asked Question 595.
Venezuela-related General License 5J: On or after April 20, 2023, all transactions related to the provision of financing for and other dealings in the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond that would be prohibited by subsection l(a)(iii) of Executive Order (E.O.) 13835 of May 21, 2018, as amended by E.O. 13857 of January 25, 2019, and incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized. This general license does not authorize any transactions or activities otherwise prohibited by the VSR or any other part of 31 CFR chapter V. Effective January 17, 2023, General License No. 5I, dated January 20, 2022, is replaced and superseded in its entirety by this General License No. 5J.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230117_33 and
https://home.treasury.gov/system/files/126/venezuela_gl5j.pdf
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January 17, 2023: 88 Fed. Reg. 2522: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has published two general licenses (GLs) issued pursuant to the Global Magnitsky Sanctions Regulations: GLs 3 and 4, each of which was previously made available on OFAC’s website. GLs 3 and 4 were issued on December 9, 2022. See December 2022 newsletter for details on the GLs.
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January 19, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) made the following deletions to its SDN List:
- Khalifeh, Hanna Elias of Lebanon.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230119
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January 23, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Iran’s Islamic Revolutionary Guard Corps (IRGC) Cooperative Foundation and five of its board members, the Deputy Minister of Intelligence and Security, and four senior IRGC commanders in Iran under human rights authorities. These actions, in coordination with the United Kingdom and European Union, target a key economic pillar of the IRGC, which funds much of the regime’s brutal suppression, as well as senior security officials coordinating Tehran’s crackdown at the national and provincial levels.
The following individuals have been added to OFAC’s SDN List:
- Ala’Oddini, Yahya of Iran;
- Asiabani, Kourosh of Iran;
- Azimi, Mohammad Nazar of Iran;
- Babamoradi, Jamal of Iran;
- Fada, Mojtaba of Iran;
- Karimi, Ahmad of Iran;
- Norouzi, Aliasghar of Iran;
- Rashedi, Naser of Iran;
- Tabatabai, Seyyed Aminollah Emami of Iran; and
- Tanavar, Hossein of Iran.
https://home.treasury.gov/news/press-releases/jy1209 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230123
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January 24, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated several individuals and associated entities for facilitating financial activities for Hizballah. At the center of this network is Lebanese money exchanger and so-called financial expert Hassan Moukalled, who plays a key role in enabling Hizballah to continue to exploit and exacerbate Lebanon’s economic crisis. Treasury also designated CTEX Exchange, a money service business owned by Hassan Moukalled, in addition to Hassan Moukalled’s sons, Rayyan Moukalled and Rani Moukalled, who facilitate Hassan Moukalled and his company’s financial activities in support of Hizballah.
The following individuals have been added to OFAC’s SDN List:
- Moukalled, Hassan Ahmed of Lebanon;
- Moukalled, Rani Hassan of Lebanon;
- Moukalled, Rayyan Hassan of Lebanon.
The following entities have been added to OFAC’s SDN List:
- CTEX Exchange of Lebanon;
- Lebanese Company For Information And Studies SARL of Lebanon; and
- Lebanese Company For Publishing, Media, And Research of Lebanon.
https://home.treasury.gov/news/press-releases/jy1211 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230124
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January 26, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took additional actions to degrade the Russian Federation’s capacity to wage war against Ukraine by sanctioning eight individuals and 16 entities and four aircraft. These actions, concurrent with additional sanctions actions by the Department of State, target the infrastructure that supports battlefield operations in Ukraine, including producers of Russia’s weapons and those administering Russian-occupied areas of Ukraine. Notably, these actions include the designation of persons that support Russian defense-related entities, including PMC Wagner (Wagner Group).
The following individuals have been added to OFAC’s SDN List:
- Adonev, Sergei Nikolaevich of Israel;
- Adonyev, Filipp Sergeevich of the United Kingdom and Russia;
- Adonyev, Luka Sergeevich of the United Kingdom, Bulgaria and Russia;
- Batekhin, Sergey Leonidovich of Russia;
- Bezrukikh, Dmitriy Nikolaevich of Russia;
- Burov, Andrey Vladimirovich of Russia;
- Cartes Jara, Horacio Manuel of Paraguay;
- Gostev, Arkadiy Aleksandrovich of Russia;
- Ivanov, Aleksandr Aleksandrovich of Russia;
- Kharichev, Aleksandr Dmitrievich of Russia;
- Lushnikov, Alan Valeryevich of Russia;
- Malyarevich, Aleksei Alekseevich of Russia;
- Manturov, Denis Valentinovich of Russia;
- Minnikhanov, Rustam Nurgaliyevich of Russia, France and the United Arab Emirates;
- Minnikhanova, Gulsina Akhatovna Russia, France and the United Arab Emirates;
- Novikov, Yan Valentinovich of Russia;
- Rapoport, Boris Yakovlevich of Russia;
- Velazquez Moreno, Hugo Adalberto, Asuncion of Paraguay;
- Zakharov, Valery Nikolayevichof the Central African Republic and Russia.
The following entities have been added to OFAC’s SDN List:
- Africa Politology;
- Aktsionernoye Obshchestvo 179 Sudoremontnyy Zavod;
- Aktsionernoye Obshchestvo 30 Sudoremontnyy Zavod;
- Aktsionernoye Obshchestvo Dalnevostochnyy Tsentr Sudostroyeniya I Sudoremonta;
- Aktsionernoye Obshchestvo Dalnevostochnyy Zavod Zvezda;
- Aktsionernoye Obshchestvo Severo-Vostochnyy Remontnyy Tsentr;
- Aktsionernoye Obshchestvo Tsentr Sudoremonta Dalzavod;
- Aktsionernoye Obshchestvo Tsentralnoye Konstruktorskoye Byuro Lazurit;
- Aktsionernoye Obshchestvo Vladivostokskoye Predpriyatie Elektroradioavtimatika;
- AO Ural Civil Aviation Factory;
- Bebidas USA Inc.;
- Changsha Tianyi Space Science And Technology Research Institute CO. LTD;
- Dominicana Acquisition S.A.;
- Federal State Unitary Enterprise Scientific And Production Enterprise Gamma;
- Frigorifico Chajha S.A.E.;
- International Limited Liability Company Interros Capital;
- Joint Stock Company National Aviation Service Company;
- Joint Stock Company Research And Production Concern BARL;
- Joint Stock Company Terra Tech;
- JSC Aviacon Zitotrans;
- Kratol Aviation;
- Limited Liability Company Charter Green Light Moscow;
- Limited Liability Company Kaleidoskop;
- Limited Liability Company TKKH-Invest;
- LLC Research & Production Enterprise Prima;
- MK Interros Invest;
- Obshchestvo S Ogranichennoi Otvetstvennostyu Luchano;
- Obshchestvo S Organichennoy Otvetstvennostyu Dalnevostochnyy Proektnyy Institut Vostokproektverf;
- Officer’s Union For International Security;
- Prime Security And Development;
- Saltcliff Trading Limited;
- Sewa Security Services;
- Spacety Luxembourg S.A.;
- Tabacos USA Inc.;
- Whiteleave Holdings Limited.
The following vessels have been added to OFAC’s SDN List:
- Addiction (9HA4571) Yacht Malta flag; Vessel Registration Identification IMO 1010193; and
- Anatta (ZGB15) Yacht Cayman Islands flag; Vessel Registration Identification IMO 1011159.
The following aircraft have been added to OFAC’s SDN List:
- RA-76502; Aircraft Model IL-76TD; Aircraft Tail Number RA-76502;
- RA-76842; Aircraft Model IL-76TD; Aircraft Tail Number RA-76842;
- RA-76846; Aircraft Model IL-76TD; Aircraft Tail Number RA-76846;
- RA-78765; Aircraft Model IL-76TD; Aircraft Tail Number RA-78765; and
- S5-SAD; Aircraft Model Bombardier Global 6000; Aircraft Manufacturer’s Serial Number (MSN) 9553.
https://home.treasury.gov/news/press-releases/jy1220 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230126
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January 26, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Global Magnitsky Sanctions Regulations General License 5 and General License 6.
General License 5: All transactions prohibited by the Global Magnitsky Sanctions Regulations, 31 CFR part 583 (GMSR), that are ordinarily incident and necessary to the divestment or transfer, or the facilitation of the divestment or transfer, of debt or equity of Frigorifico Chajha S.A.E. (Frigorifico Chajha), to a non-U.S. person are authorized through 12:01 a.m. eastern daylight time, March 27, 2023. All transactions prohibited by the GMSR that are ordinarily incident and necessary to facilitating, clearing, and settling trades of debt or equity of Frigorifico Chajha that were placed before 4:00 p.m. eastern standard time, January 26, 2023, are authorized through 12:01 a.m. eastern daylight time, March 27, 2023. All transactions prohibited by the GMSR that are ordinarily incident and necessary to the wind-down of derivative contracts entered into before 4:00 p.m. eastern standard time, January 26, 2023, that (i) include Frigorifico Chajha as a counterparty or (ii) are linked to the debt or equity of Frigorifico Chajha are authorized through 12:01 a.m. eastern daylight time, March 27, 2023, provided that any payments to a blocked person are made into a blocked account in accordance with the GMSR.
This general license does not authorize: (1) U.S. persons to sell, or to facilitate the sale of, debt or equity of Frigorifico Chajha to, directly or indirectly, any person whose property and interests in property are blocked; or (2) U.S. persons to purchase or invest in, or to facilitate the purchase of or investment in, directly or indirectly, debt or equity of Frigorifico Chajha, other than purchases of or investments in debt or equity of Frigorifico Chajha that are ordinarily incident and necessary to the divestment or transfer of debt or equity of Frigorifico Chajha, as described in this general license. This general license does not authorize any transactions otherwise prohibited by the GMSR, including transactions involving any person blocked pursuant to the GMSR other than Frigorifico Chajha, unless separately authorized.
https://home.treasury.gov/system/files/126/glomag_gl5.pdf
General License 6: All transactions prohibited by the Global Magnitsky Sanctions Regulations, 31 CFR part 583 (GMSR), that are ordinarily incident and necessary to the wind-down of any transaction involving Bebidas USA Inc., Tabacos USA Inc., Frigorifico Chajha S.A.E., or Dominicana Acquisition S.A. (collectively, the “designated Cartes entities”), or any entity in which Horacio Manuel Cartes Jara or the designated Cartes entities own, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern daylight time, March 27, 2023, provided that any payment to a blocked person must be made into a blocked account in accordance with the GMSR.
This general license does not authorize any transactions otherwise prohibited by the GMSR, including transactions involving any person blocked pursuant to the GMSR other than the blocked entities described in paragraph (a) of this general license, unless separately authorized.
https://home.treasury.gov/system/files/126/glomag_gl6.pdf
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January 26, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Global Magnitsky Sanctions Frequently Asked Questions.
Answer: On January 26, 2023, OFAC designated Frigorifico Chajha S.A.E. (Frigorifico Chajha), pursuant to E.O. 13818. Concurrent with this action, OFAC issued General License (GL) 5, which authorizes certain transactions ordinarily incident and necessary to the divestment or transfer, or the facilitation of the divestment or transfer, of debt or equity of Frigorifico Chajha to a non-U.S. person, through 12:01 a.m. eastern daylight time, March 27, 2023.
GL 5 also authorizes certain transactions ordinarily incident and necessary to facilitating, clearing, and settling trades of debt or equity of Frigorifico Chajha that were placed before 4:00 p.m. eastern standard time, January 26, 2023, through 12:01 a.m. eastern daylight time, March 27, 2023.
GL 5 also authorizes certain transactions that are ordinarily incident and necessary to the wind-down of derivative contracts entered into before 4:00 p.m. eastern standard time, January 26, 2023, that (1) include Frigorifico Chajha as a counterparty, or (2) are linked to the debt or equity of Frigorifico Chajha, through 12:01 a.m. eastern daylight time, March 27, 2023, provided that any payments to a blocked person are made into a blocked account in accordance with the Global Magnitsky Sanctions Regulations, 31 CFR part 583.
However, GL 5 does not authorize U.S. persons to sell or to facilitate the sale of debt or equity of Frigorifico Chajha to, directly or indirectly, any person whose property and interests in property are blocked. GL 5 also does not authorize U.S. persons to purchase or invest in, or to facilitate the purchase of or investment in, directly or indirectly, debt or equity of Frigorifico Chajha, other than purchases of or investments in debt or equity of Frigorifico Chajha that are ordinarily incident and necessary to the divestment or transfer of debt or equity of Frigorifico Chajha as described in GL 5.
Non-U.S. persons generally do not risk exposure to U.S. sanctions for engaging in activities that would be exempt or authorized for U.S. persons pursuant to GL 5.
Answer: On January 26, 2023, OFAC designated, pursuant to E.O. 13818, Horacio Manuel Cartes Jara (Cartes) for his involvement in corruption in Paraguay. Also on that day, OFAC designated four entities owned or controlled by Cartes, pursuant to E.O. 13818: Tabacos USA Inc., Bebidas USA Inc., Dominicana Acquisition S.A., and Frigorifico Chajha S.A.E. (collectively, “designated Cartes entities”). Concurrent with this action, OFAC issued Global Magnitsky General License (GL) 6 , which authorizes, subject to certain conditions, transactions prohibited by the Global Magnitsky Sanctions Regulations, 31 CFR part 583 (GMSR), that are ordinarily incident and necessary to the wind-down of any transaction involving any of the designated Cartes entities, or any entity in which Cartes or the designated Cartes entities own, directly or indirectly, a 50 percent or greater interest (collectively, “blocked Cartes entities”), through 12:01 a.m. eastern daylight time, March 27, 2023, provided that any payment to a blocked person must be made into a blocked account in accordance with the GMSR. GL 6 does not authorize any transactions involving Cartes himself.
After the expiration of this general authorization, U.S. persons will be prohibited from engaging in such wind-down transactions with blocked Cartes entities unless exempt or otherwise authorized by OFAC. U.S. persons unable to wind down transactions with blocked Cartes entities before 12:01 a.m. eastern daylight time, March 27, 2023, are encouraged to seek guidance from OFAC.
Non-U.S. persons may wind down transactions with blocked Cartes entities without exposure to sanctions under E.O. 13818, provided that such wind-down activity is consistent with GL 6. Wind-down transactions involving non-U.S. persons may be processed through the U.S. financial system or involve U.S. persons as long as the transactions comply with the terms and conditions in GL 6. Non-U.S. persons unable to wind down transactions with blocked Cartes entities before 12:01 a.m. eastern daylight time, March 27, 2023, are encouraged to seek guidance from OFAC.
https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2023-01-26
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January 30, 2023: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated the leader of a Mexico-based network and two associates pursuant to Executive Order (E.O.) 14059 for procuring precursor chemicals to manufacture and traffic illicit fentanyl and other synthetic drugs to the United States. These actions result from ongoing efforts by U.S. agencies to disrupt the importation into and distribution of illicit fentanyl within the United States. These actions were coordinated closely with the government of Mexico and would not have been possible without the cooperation and support of the Drug Enforcement Administration.
The following individuals have been added to OFAC’s SDN List:
- Rivera Zazueta, Jose Angel of Mexico;
- Santiso Aguila, Nelton of Mexico; and
- Yang Lopez, Jason Antonio of Guatemala.
https://home.treasury.gov/news/press-releases/jy1229 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230130
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January 31, 2023: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated six individuals and three entities connected to Burma’s military regime pursuant to Executive Order (E.O.) 14014. This action occurred in conjunction with actions taken by both the United Kingdom and Canada.
On February 1, 2021, Burma’s military overthrew the democratically elected government and removed the civilian government leaders from power, including President Win Myint and State Counsellor Aung San Suu Kyi. Over the past two years, the military has continued to use violence and oppression to deny the people of Burma the ability to choose their own leaders. Burma’s military regime has used its military aircraft to conduct aerial bombings and other attacks against pro-democracy forces, killing and displacing countless civilians.
The following individuals have been added to OFAC’s SDN List:
- Aung, Htun of Burma;
- Min, Aung of Burma;
- Min, Than of Burma;
- Oo, Myo Myint of Burma;
- Swe, Hla of Burma; and
- Tay Za, Htoo Htwe of Burma.
The following entities have been added to OFAC’s SDN List:
- Mining Enterprise No 1;
- Mining Enterprise NO 2; and
- Union Election Commission.
https://home.treasury.gov/news/press-releases/jy1233 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230131
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U.S. Department of Treasury
January 18, 2023: The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an order identifying the virtual currency exchange Bitzlato Limited (Bitzlato) as a “primary money laundering concern” in connection with Russian illicit finance pursuant to section 9714(a) of the Combatting Russian Money Laundering Act, as amended.
https://home.treasury.gov/news/press-releases/jy1193
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U.S. Department of State
January 26, 2023: The United States will continue to impede the Kremlin’s ability to arm and equip its war machine engaged in an unjustified war against Ukraine. The Department of State designated five entities and one individual linked to the Wagner Group and its head, Yevgeniy Prigozhin. Additionally, the Department designated nine individuals and 14 entities for their status as government officials, their involvement in the extended networks of designated persons, and/or for being part of Russia’s military-industrial complex. Finally, the Department identified two yachts and one aircraft as blocked property. All targets are designated pursuant to Executive Order (E.O.) 14024, which authorizes sanctions with respect to specified harmful foreign activities of the Government of the Russian Federation.
Infrastructure And Operations Of The Wagner Group:
- Charter Green Light Moscow;
- Aleksei Alekseevich Malyarevich;
- Africa Politology;
- Prime Security And Development;
- Sewa Security Services;
- Officers Union For International Security;
Russian Government Officials:
The following three Russian Federal Penitentiary Service officials have been identified as having facilitated the recruitment of Russian prisoners into the Wagner Group. These individuals are being designated for being persons who are or have been leaders, officials, senior executive officers, or members of the board of directors of the Government of the Russian Federation:
- Dmitriy Nikolaevich Bezrukikh;
- Arkadiy Aleksandrovich Gostev; And
- Ivan Pavlovitch Prokopenko.
Russian Deputy Prime Minister and Minister of Industry and Trade Denis Valentinovich Manturov is being designated for being a leader, official, senior executive officer, or member of the board of directors of the Government of the Russian Federation. Manturov oversees Russia’s defense industry and the production of war materiel for Russia’s use in Ukraine.
The Chairman of the Election Commission of the Rostov Region, Andrey Vladimirovich Burov, is designated for being a leader, official, senior executive officer, or member of the board of directors of the Government of the Russian Federation. Burov is responsible for facilitating illegitimate referendums in the occupied regions of Ukraine.
Vladimir Potanin’s Network:
Vladimir Olegovich Potanin, one of Russia’s wealthiest oligarchs, was designated alongside members of his network on December 15, 2022. The Department of State designated four additional entities in Potanin’s network:
- Mk Interros Invest;
- Whiteleave Holdings Limited (Whiteleave):
- Saltcliff Trading Limited (Saltcliff);
- International Limited Liability Company Interros Capital (Interros Capital).
Additionally, the Department of State designated Sergey Leonidovich Batekhin, the CEO of Interros, for being or having been a leader, official, senior executive officer, or member of the board of directors of Kholdingovaya Kompaniya Interros OOO (Interros), an entity whose property and interests in property are blocked pursuant to Section 1(a)(i). Interros was founded by Vladimir Potanin.
Businessman Adonev And His Network:
Sergei Nikolaevich Adonev is a businessman in Russia who acts as a financier to Russian President Vladimir Putin and Rostec State Corporation head Sergei Chemezov.
- Limited Liability Company Kaleidoskop;
- Sergei Nikolaevich Adonev;
- Filipp Sergeevich Adonyev;
- Luka Sergeevich Adonyev;
- The Yacht Addiction is identified as blocked property in which Sergei Nikolaevich Adonev has an interest.
- The yacht Anatta is dentified as blocked property in which Sergei Nikolaevich Adonev has an interest.
- The aircraft S5-SAD is identified as blocked property in which Sergei Nikolaevich Adonev has an interest.
Entities Supporting Russia’s Military Industrial Complex:
- Aktsionernoye Obshchestvo Dalnevostochnyy Tsentr Sudostroyeniya I Sudoremonta (AO DTSSS);
- Aktsionernoye Obshchestvo Tsentr Sudoremonta Dalzavod;
- Aktsionernoye Obshchestvo Severo-Vostochnyy Remontnyy Tsentr;
- Aktsionernoye Obshchestvo Dalnevostochnyy Zavod Zvezda;
- Aktsionernoye Obshchestvo 179 Sudoremontnyy Zavod;
- Aktsionernoye Obshchestvo 30 Sudoremontnyy Zavod;
- Obshchestvo S Organichennoy Otvetstvennostyu Dalnevostochnyy Proektnyy Institut Vostokproektverf;
- Aktsionernoye Obshchestvo Vladivostokskoye Predpriyatie Elektroradioavtomatika; and
- Aktsionernoye Obshchestvo Tsentralnoye Konstruktorskoye Byuro Lazurit.
Visa Restrictions:
The Department of State imposed visa restrictions on 531 members of the Russian Federation military for actions that threaten or violate the sovereignty, territorial integrity, or political independence of Ukraine pursuant to Section 212(a)(3)(C) of the Immigration and Nationality Act.
Sanctions Implications:
As a result of these actions, all property and interests in property of the individuals above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person.
https://www.state.gov/actions-to-counter-wagner-and-degrade-russias-war-efforts-in-ukraine/
Fines and Penalties
January 3, 2023: Xiaoqing Zheng, 59, of Niskayuna, New York, was sentenced to 24 months in prison for conspiring to steal General Electric (GE) trade secrets, knowing or intending to benefit the People’s Republic of China (PRC). Zheng was convicted of conspiracy to commit economic espionage, following a four-week jury trial that ended on March 31, 2022. According to court documents, Zheng was employed at GE Power in Schenectady, New York, as an engineer specializing in turbine sealing technology. He worked at GE from 2008 until the summer of 2018. The trial evidence demonstrated that Zheng and others in China conspired to steal GE’s trade secrets surrounding GE’s ground-based and aviation-based turbine technologies, knowing or intending to benefit the PRC and one or more foreign instrumentalities, including China-based companies and universities that research, develop, and manufacture parts for turbines. Zheng was sentenced to pay a $7,500 fine and serve one year of post-imprisonment supervised release.
January 5, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Nathan Christopher Ball until November 26, 2024. On November 6, 2019, in the U.S. District Court for the District of New Mexico, Nathan Christopher Ball (Ball) was convicted of violating 18 U.S.C. § 371 and 18 U.S.C. § 554(a). Specifically, Ball was convicted of conspiring to smuggle from the US to Mexico, firearms and ammunition without the required license or written authorization. As a result of his conviction, the Court sentenced Ball to 27 months of confinement, two years of supervised release, a $300 assessment, and $50,000 criminal fine.
January 5, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Hany Veletanlic until January 27, 2030. On January 27, 2020, in the U.S. District Court for the Western District of Washington, Hany Veletanlic (Veletanlic) was convicted of violating Section 38 of the Arms Export Control Act (22 U.S.C § 2778) (AECA). Specifically, Veletanlic was convicted of willfully exporting from the US to Sweden defense articles designated on the United States Munitions List, namely a Glock lower 23 receiver, without having obtained from the United States Department of State a license or written approval for the export of the defense article. As a result of his conviction, the Court sentenced Veletanlic to 85 months of confinement, three years of supervised release, and a $400 assessment.
January 5, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Mauricio Robles until December 1, 2028. On December 1, 2021, in the U.S. District Court for the District of Arizona, Mauricio Robles (Robles) was convicted of violating 18 U.S.C. § 554(a). Specifically, Robles was convicted of smuggling and attempting to smuggle from the US to Mexico 1,680 rounds of 5.56mm ammunition, 1,000 rounds of 10mm ammunition, 3,200 rounds of 7.62x39mm ammunition, and 50 rounds of 7.62x25mm ammunition. As a result of his conviction, the Court sentenced Robles to 37 months of confinement, with credit for time served, three years of supervised release and a $100 special assessment.
January 9, 2023: Behrouz Mokhtari, 72, of McLean, Virginia, and Tehran, Iran, a naturalized U.S. citizen, pleaded guilty to two separate conspiracies to violate sanctions imposed by the United States on Iran regarding the exportation, re-exportation, sale, or supply, directly or indirectly, of any goods, technology, or services to Iran. According to his guilty plea, from at least March 2018 until at least September 2020, Mokhtari conspired with his co-defendant and others to evade Iranian sanctions by engaging in business activities on behalf of Iranian entities without first obtaining the required licenses from the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).
Mokhtari held management positions and/or maintained ownership control of multiple businesses in Iran and the United Arab Emirates (UAE), referred to collectively as “the FSR Network.” Mokhtari and his co-conspirators used the FSR Network to provide services to Iranian entities and engage in transactions involving Iranian petrochemical products, including refining petrochemical products and transporting them by sea. Mokhtari and his co-conspirators used bank accounts located in the UAE, including Bitubiz FZE, which was part of the FSR Network and over which Mokhtari exercised partial or complete control, to process these U.S. dollar transactions.
As part of his guilty plea, Mokhtari must forfeit money, property, and assets derived from, obtained as the result of, or used to facilitate the commission of his illegal activities, including the residence he purchased in Campbell, California, and money judgment in the amount of $2,862,598.12. Mokhtari faces a maximum sentence of five years in federal prison for each of the two conspiracy counts and is scheduled for sentencing on April 3.
https://www.justice.gov/opa/pr/virginia-man-pleads-guilty-conspiring-violate-iranian-sanctions
January 11, 2023: Tao Jiang, the president and owner of Broad Tech System, Inc., a California-based electronics distribution company, admitted to a federal judge in Providence that he and his company participated in a conspiracy to conceal information from the U.S. Department of Commerce and U.S. Customs and Border Protection as part of a scheme to illegally export chemicals manufactured and/or distributed by a Rhode Island-based company to a technology company in China with ties to the Chinese military, announced United States Attorney Zachary A. Cunha.
Tao Jiang, aka Jason Jiang, 53, of Riverside, CA, and Broad Tech Systems, Inc., pleaded guilty as charged by way of indictment to conspiracy, violation of the Export Control Act, and money laundering conspiracy.
Jiang and Broad Tech System admitted that they conspired together and with Bohr Winn-Shih, an engineer employed at Broad Tech System, to order the chemicals Photoresist and HPRD (Developer) from a North Kingstown-based manufacturer, then knowingly submitted false and misleading documentation to the U.S. Government and to shipping companies in an effort to have those products illegally shipped to a company in China, in violation of the Export Control Reform Act.
January 17, 2023: 88 Fed. Reg. 2605: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Brett McGinnis until September 16, 2031. On September 16, 2021, in the U.S. District Court for the Southern District of Texas, Brett McGinnis was convicted of violating 18 U.S.C. 554. Specifically, McGinnis was convicted of knowingly and willfully exporting and smuggling from the United States to Mexico, a Beretta Model 84, .380 caliber pistol; a Beretta, Model 92FS, .22LR caliber pistol; 2,451 rounds of .22 caliber ammunition; 1,500 rounds of Fiocchi .38 Super Caliber Ammunition, 500 rounds of Magtech .44 Caliber Ammunition; 440 rounds of TulAmmo 7.62 caliber Ammunition; 300 Rounds of G2 Research .380 Caliber Ammunition; 200 Rounds of G2 Research 9mm Ammunition; 200 Rounds of Hornady .270 Caliber Ammunition; 150 Rounds of Remington .45 Caliber Colt Ammunition; 120 Rounds of Remington .308 Caliber Ammunition; and various other firearms, firearms parts, and ammunition. As a result of his conviction, the Court sentenced McGinnis to 24 months in prison, three years supervised release, $100 special assessment, and a $10,000 fine.
January 17, 2023: 88 Fed. Reg. 2604: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Ge Song Tao until July 14, 2031. On July 14, 2021, in the U.S. District Court for the Middle District of Florida, Ge Song Tao was convicted of violating 18 U.S.C. 371 and 18 U.S.C. 554(a). Specifically, Ge was convicted of conspiring to submit false export information through the federal government’s Automated Export System and to export maritime raiding craft and engines to China fraudulently and attempting to export that equipment fraudulently. As a result of his conviction, the Court sentenced Ge to 42 months of confinement, three years of supervised release, a $50,000 criminal fine, and $200 assessment.
January 17, 2023: 88 Fed. Reg. 2603: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Daniel Medina until February 22, 2026. On February 22, 2019, in the U.S. District Court for the District of Arizona, Jose Daniel Medina was convicted of violating 18 U.S.C. 554. Specifically, Medina was convicted of knowingly smuggling and attempting to smuggle from the United States to Mexico one (1) Barrett model 50 BMG and a .50 caliber rifle. As a result of his conviction, the Court sentenced Medina to 37 months in prison, with credit time served, three years supervised release, and a $100 special assessment.
January 17, 2023: Jonathan Yet Wing Soong pleaded guilty to violating export control laws in connection with a scheme to secretly funnel sensitive aeronautics software to a Beijing university. Between August 2016 and September 2020, Soong, 35, of Castro Valley, Calif., was employed as a program administrator by Universities Space Research Association (USRA), a nonprofit research corporation focusing on advancing space science and technology. In April of 2016, USRA contracted with the National Aeronautics and Space Administration (NASA) to, among other things, license and distribute aeronautics-related Army flight control software for a fee. Soong’s duties included, among other things, conducting and servicing software license sales, conducting export compliance screening of customers, generating software licenses, and exporting software pursuant to purchased licenses. As part of his duties, Soong was responsible for vetting customers to ensure they did not appear on certain restrictive lists—including the Department of Commerce’s Entity List and other U.S. government lists—that placed limitations on the transfer of products to identified entities. In pleading guilty, Soong admitted that he willingly exported and facilitated the sale and transfer of restricted software to Beihang University, knowing that the university was on the Department of Commerce’s Entity List. According to government filings in the case, Beihang University was added to the Entity List due to the University’s involvement in the People’s Republic of China military rocket systems and unmanned air vehicle systems. In his plea agreement, Soong acknowledged he used an intermediary to complete the export of the program to avoid detection that the real purchaser was on the Entity List. Soong remains out of custody pending sentencing.
January 18, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Eli Isael Rodriguez-Jasso until October 28, 2026. On October 28, 2020, in the U.S. District Court for the Western District of Texas, Eli Isael Rodriguez-Jasso (“Rodriguez-Jasso”) was convicted of violating 18 U.S.C. § 554(a). Specifically, Rodriguez-Jasso was convicted of knowingly and unlawfully exporting or attempting to export from the United States to Mexico ammunition and two firearms magazines in violation of 18 U.S.C. § 554. As a result of his conviction, the Court sentenced Rodriguez-Jasso to 46 months in prison, with credit for time served, three years supervised release and a $100 assessment.
January 18, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an Order denying the export privileges of Jermaine Craig Rhoomes until February 5, 2030. On February 5, 2020, in the U.S. District Court for the Middle District of Florida, Jermaine Craig Rhoomes (“Rhoomes”) was convicted of violating Section 38 of the Arms Export Control Act (22 U.S.C. § 2778) (“AECA”). Specifically, Rhoomes was convicted of knowingly and willfully exporting and causing to be exported from the U.S. to Jamaica two (2) 7.62-caliber AK47-style rifles; five (5) 5.56-caliber AR15-style rifles; four (4) 9mm-caliber pistols; two (2) .40-caliber pistols; two (2) .45-caliber pistols; 3,315 rounds of ammunition; and 38 firearm magazines, all of which were designated as defense articles on the United States Munitions List at the time of export, without first obtaining the required license or written authorization from the Department of State.
January 20, 2023: Two businessmen, Vladislav Osipov, 51, a Russian national, and Richard Masters, 52, a United Kingdom national, are charged in separate indictments in the U.S. District Court for the District of Columbia, with facilitating a sanctions evasion and money laundering scheme in relation to the ownership and operation of the Motor Yacht (M/Y) Tango (International Maritime Organization number 1010703), a $90 million, a 255-foot luxury yacht owned by sanctioned Russian oligarch Viktor Vekselberg. The defendants are charged with conspiracy to defraud the United States and to commit offenses against the United States, violating the International Emergency Economic Powers Act (IEEPA) and money laundering. The United States requested that the Kingdom of Spain provisionally arrest Masters for purposes of extradition. The arrest was executed by the Spanish Guardia Civil. An arrest warrant against Osipov is outstanding.
January 23, 2023: A former Special Agent in Charge of the FBI New York Counterintelligence Division and a former Soviet and Russian diplomat were arrested Saturday on criminal charges related to their alleged violating and conspiring to violate the International Emergency Economic Powers Act (IEEPA) and conspiring to commit money laundering and money laundering.
According to court documents, Charles F. McGonigal, 54, of New York City, and Sergey Shestakov, 69, of Morris, Connecticut, are charged in a five-count indictment in the Southern District of New York with violating and conspiring to violate the IEEPA, and with conspiring to commit money laundering and money laundering.
According to court documents, on April 6, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Oleg Deripaska as a Specially Designated National (SDN) in connection with its finding that the actions of the Government of the Russian Federation with respect to Ukraine constitute an unusual and extraordinary threat to U.S. national security and foreign policy. According to the U.S. Treasury, Deripaska was sanctioned for having acted or purported to act on behalf of, directly or indirectly, a senior official of the Government of the Russian Federation and for operating in the energy sector of the Russian Federation economy.
McGonigal is a former Special Agent in Charge (SAC) of the FBI’s Counterintelligence Division in New York who retired in 2018. While working at the FBI, McGonigal supervised and participated in investigations of Russian oligarchs, including Deripaska. Sergey Shestakov is a former Soviet and Russian diplomat who later became a U.S. citizen and a Russian interpreter for courts and government offices.
January 26, 2023: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has renewed the Temporary Denial Order denying the export privileges of Empresa de Transporte Aéreocargo del Sur, S.A., a/k/a Aerocargo del Sur Transportation Company, a/k/a EMTRASUR, located at Avenida Intercomunal, Edificio Sede, Sector 6.3, Maiquetia, Distrito Federal, Venezuela, and Avenida Lecuna Torre Oeste Piso 49, Libertador, Caracas, Venezuela, for an additional 180 days. As noted in OEE’s initial request for a temporary denial order, EMTRASUR is a subsidiary of Consorcio Venezolano de Industrias Aeronauticas Y Servicios Aereos, S.A., a/k/a CONVIASA (“CONVIASA”), a Venezuelan state-owned airline.