This newsletter is a listing of the latest changes in export control regulations through January 31, 2024. 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
Department of State, Directorate of Defense Trade Controls (DDTC)
Anticipated ITAR Rulemaking Developments for 2024
January 4, 2024: The State Department’s Directorate of Defense Trade Controls (DDTC) recently updated its list of planned rulemaking concerning the International Traffic in Arms Regulations (ITAR) and U.S. Munitions List (USML).
Anticipated Developments
DDTC’s anticipated rulemaking list includes 16 intended actions, as well as a civil monetary penalty adjustment. The following are some of the significant rulemaking items.
Proposed Revisions to Defense Services. DDTC plans to publish a proposed rule regarding the ITAR’s control of defense services. Specifically, the proposed rule involves “revisions to definitions and controls related to defense services.” Although this planned rulemaking is new to the regulatory agenda, it is already going through its final interagency review, as DDTC submitted it for that clearance in early November. This proposal will be the fourth proposed rule by DDTC concerning defense services. It published the first proposed rule in 2011, the second in 2013, and the third in 2015. Each time, DDTC conceded that the current rule is “overly broad.”
The ITAR’s defense services controls have been essentially unchanged for four decades—with two notable changes. First, in 1984, when DDTC added the definition of defense services to the ITAR, it changed its policy by controlling technical assistance “regardless of whether technical data will be used or disclosed.” In making that “significant” change, DDTC stated that it was previously the agency’s practice to control assistance “only if it involved the disclosure of technical data or the use of technical data that was not exempt from the licensing requirements of Part 125.” Second, in 1997, DDTC amended the definition to cover military training, now appearing within ITAR § 120.32(a)(3).
USML Revisions. In addition to the defense services proposed rule, DDTC intends to issue the following three rulemakings concerning USML revisions:
- An interim final rule “to revise and exclude entries on the [USML] that no longer warrant inclusion and to add entries for critical and emerging technologies that do.”
- A proposed rule that will seek to revise several areas of the USML that may involve revisions to Category IV and XV and circuit boards and semiconductors covered within Category XI(c).
- A final rule that will respond to public comments and complete the control criteria revisions from the April 2023 interim final rule to Category XI(c)(5), which involves certain high-energy storage capacitors.
DDTC’s regulatory agenda also includes a proposal to modernize the USML and Supplement No. 1 to Part 126 to enhance their “clarity, consistency, and ease of use.” The agenda additionally includes issuing a final rule to address the public comments DDTC received for the USML revisions to Categories IV, V, VIII, XI, and XV that took place through an interim final rule in 2018.
Proposed Registration Fee Increase. DDTC expects to issue a proposed rule to increase the ITAR’s registration fees. The last fee change occurred in 2008, with other previous changes occurring in 2004, 1997, and 1985. The ITAR’s registration fees were the subject of litigation in 2015 concerning DDTC’s ability to raise those fees, but that case did not address the merits because the plaintiff lacked standing. This proposed rule is going through a final interagency review, and DDTC expects to publish it for public comment in the first half of 2024.
Final Rule Concerning Technical Data Releases to Foreign Persons. DDTC plans to issue a final rule to change how the ITAR handles “deemed exports” and “deemed reexports” of technical data to foreign persons so that there is “a release only to any countries in which that foreign person currently holds citizenship or permanent residency.” Both situations currently control such releases “to all countries in which the foreign person has held or holds citizenship or holds permanent residency.” DDTC issued a proposed rule regarding this rulemaking in February 2022.
Final Revisions Clarifying Non-Controlled Events. DDTC intends to issue a final rule amending ITAR § 120.54 to add two activities that are not exports, reexports, retransfers, or temporary imports. As DDTC explained in the proposed rule, the two activities cover:
- “the taking of defense articles outside a previously approved country by the armed forces of a foreign government or United Nations personnel on a deployment or training exercise is not a controlled event, provided there is no change in end-use or end-user”; and
- “the transfer of a foreign defense article originally imported into the United States that has since been exported out of the United States, is not a controlled event, unless certain enumerated circumstances have occurred.”
Notably, DDTC acknowledged that the rule intends to “codify” the agency’s “long-standing policy” that these two activities “are not controlled events.”
Proposed Rule Concerning Regular Employees. DDTC intends to issue another proposed rule seeking to revise the meaning of a regular employee within ITAR § 120.64. Specifically, the proposed revisions would update the definition by allowing “subject persons to work remotely, and to clarify the contractual relationships that meet the definition of regular employee.” The first proposed rule, published in May 2021, received several public comments critical of the proposed approach to distinguish between contract employees based on the duration of employment.
Proposed Rule Consolidating Licensing Provisions and Exemptions. DDTC plans to issue a proposed rule involving the consolidation of ITAR Parts 123, 124, and 125. That consolidation will place most licensing exemptions into Part 125, while Part 123 will focus on the licensing requirements and Part 124 will focus on the licensing process. The Defense Trade Advisory Group (DTAG) recently reviewed this consolidation process in October 2023.
Final Rule Concerning the Personal Protective Equipment (PPE) Exemption. DDTC is preparing a final rule “to expand the list of personal protective equipment covered by the exemption in ITAR section 123.17.” DTAG reviewed this exemption in May 2021 and submitted proposed revisions based on its recommendations.
Corrections and Clarifications. DDTC expects to build upon the initial Part 120 consolidation effort with a final rule covering non-substantive corrections and clarifications. DDTC calls this corrections and clarifications rule “ITAR Reorg 1.5.”
https://www.stagg.law/insights/anticipated-itar-rulemaking-developments-for-2024/ and https://www.reginfo.gov/public/do/eAgendaMain?operation=OPERATION_GET_AGENCY_RULE_LIST¤tPub=true&agencyCode=&showStage=active&agencyCd=0600&csrf_token=BF6B3C61CAF8BE26D24EF0A905F8FE61840DA695942104980FE1A083F9518CC504B25D8BCB417A2685F9343620BDA15DED13
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DDTC Updates The Civil Penalty Amount For Inflation
January 5, 2024: 89 Fed. Reg. 700: The U.S. Department of State adjusted 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 2023 guidance from the Office of Management and Budget and by recent legislation. For violations of the International Traffic in Arms Regulations (“ITAR”) the penalty is now:
- The greater of $1,238,892 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.
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DDTC Name and Address Changes Posted To Website
January 5 through 12, 2024: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at
- Change in Name and Address from General Electric International, Inc. at Bureaux 17 et 18 Immeuble Crystal 3, Boulevard des Almoahades, 3 Eme Etage, Casablanca 20030, Morocco to GE Aviation Systems North America LLC – Morocco at CFC Tower Lot 57, 5th Floor, Avenue Main Street, Casa Anfa, Hay Hassani, Casablanca 20250, Morocco due to corporate rebranding;
- Change in Name from L3Harris Micro Pty Limited to L3Harris Space and Airborne Systems Australia Pty Ltd., due to corporate rebranding;
- Fokker Technologies Holding B.V. and its operating units in The Netherlands have completed an internal corporate reorganization resulting in the following changes:
- Fokker Landing Gear B.V. and Fokker Elmo B.V. will change their main addresses to Anthony Fokkerweg 4, 3551 NL Papendrecht, the Netherlands.
- Fokker Landing Gear B.V. and Fokker Technologies Holding B.V. will merge into Fokker Aerostructures B.V.
- Fokker Aerostructures B.V. will become a direct subsidiary of Fokker Technologies Group B.V. and will change its name to GKN Fokker Aerospace B.V. (“GKN Fokker Aero”).
- GKN Fokker Aero will, on occasion, use the trade names “Fokker Landing Gear”, “Fokker Technologies Holding,” and “Fokker Aerostructures” but Fokker Landing Gear B.V. and Fokker Technologies Holding B.V. will no longer exist as separate legal entities.
- Fokker Elmo B.V. will remain a separate legal entity owned by GKN Fokker Aero;
- Change in Name from Consilium Technology Proprietary Limited to Aurizn Solutions Proprietary Limited due to merger;
- Raytheon Company’s headquarters change in Address from 870 Winter Street, Waltham, Massachusetts 02451 to 1100 Wilson Blvd., Arlington, Virginia 22209; and
- Change in Name from Airbus Group India Private Limited to Airbus India Private Limited due to corporate rebranding.
DSCA Notifies Congress Of Potential FMS Sale To Australia
January 10, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Australia of General Tomahawk Weapons System Support Services Uplift and related equipment for an estimated cost of $250 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale. The Government of Australia has requested to buy services to support the Tomahawk Weapon System, including general weapons support services; logistics support management; material support; engineering technical support; management of technical data; and other related elements of logistics and program support.
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DSCA Notifies Congress Of Potential FMS Sale To Egypt
January 10, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Egypt of Light Tactical Vehicle Chassis and Fleet Build and related equipment for an estimated cost of $200 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale. The Government of Egypt has requested to buy additional light tactical vehicle chassis and fleet build that will be added to a previously implemented case. The original Foreign Military Sales case, valued at $41.9 million, included 4-Man REV1-B Rolling Chassis with 190 horsepower (HP) diesel engines upgraded to 205HP turbocharged engines; training for chassis assembly process, operations, and maintenance; spare and repair parts; testing equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistical and program support.
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DSCA Notifies Congress Of Potential FMS Sale To Egypt
January 10, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Egypt of 28-Meter Patrol Craft Kits and related equipment for an estimated cost of $129 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale. The Government of Egypt has requested to buy additional non-Major Defense Equipment (MDE) 28-meter patrol craft production kits and technical support. The kits consist of Rigid Hull Inflatable Boats, forward-looking infrared systems, and computer packages; technical and logistics support services; transportation; spare parts, materials, equipment, and components; and other related elements of logistical and program support.
https://www.dsca.mil/press-media/major-arms-sales/egypt-28-meter-patrol-craft-kits
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DSCA Notifies Congress Of Potential FMS Sale To Kosovo
January 11, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Republic of Kosovo of Javelin Missiles and related equipment for an estimated cost of $75 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale. The Republic of Kosovo has requested to buy two hundred forty-six (246) Javelin FGM-148F missiles (includes six (6) fly-to-buy missiles); and twenty-four (24) Javelin Lightweight Command Launch Units (LWCLU). Also included are Javelin LWCLU Basic Skills Trainers; Javelin Outdoor Trainers; Missile Simulation Rounds; Outdoor Training Instructor Stations (OTIS); Battery Coolant Units (BCUs); System Integration and Check out (SICO); Life Cycle Support (LCS); Javelin Restricted Interactive Electronic Technical Manual (IETM); Javelin Operator Manual and Technical Assistance (TAGM); tools; Javelin gunner training; Ammunition Technical Officer (ATO) training; Javelin maintenance training; and other elements of logistics and program support.
https://www.dsca.mil/press-media/major-arms-sales/kosovo-javelin-missiles
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DSCA Notifies Congress Of Potential FMS Sale To Croatia
January 26, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Croatia of UH-60M Black Hawk helicopters and related equipment and services for an estimated cost of $500 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale. The Government of Croatia has requested to buy eight (8) UH-60M Black Hawk helicopters; nineteen (19) T700-GE 701D engines (16 installed, 3 spares); twenty (20) AN/ARC-231A RT-1987 very high frequency (VHF) / ultra high frequency (UHF) / Line of Sight (LOS) satellite communications (SATCOM) radios; ten (10) AN/AAR-57 Counter Missile Warning Systems (CMWS); twenty (20) H-764U Embedded Global Position Systems with Inertial Navigation (EGI) and Selective Availability Anti-Spoofing Module (SAASM) (or future replacement); and eighteen (18) M240H machine guns. Also included are: AN/ARC-231 RT-1808A (or future replacement) VHF/UHF/ LOS SATCOM radios; APR-39C(V)1/4 radar warning receivers; AVR-2B laser detecting sets; APX-123A Identification Friend or Foe (IFF) transponders (or future replacement); ARC-220 high frequency (HF) radio with KY-100M; VRC-100 ground stations; AN/PYQ-10 Simple Key Loader (SKL); KIV-77 Common Identification Friend or Foe (IFF) crypto applique computers; KY-100M; communications security (COMSEC) encryption devices AN/ARN-147(V) VHF Omni-Directional Range (VOR)/instrument landing system (ILS) receiver radio; AN/ARN-149(V) low frequency (LF)/automatic direction finder (ADF) radio receiver; AN/ARN-153 tactical air navigation system (TACAN) receiver-transmitter; AN/APN-209 radar altimeter; AN/ARC-210 radios; EBC-406HM emergency locator transmitter (ELT); Encrypted Aircraft Wireless Intercommunications Systems (EAWIS); Improved Heads-Up Display (IHUD); signal data converters for IHUD; signal data converters for heads-up display (HUD); forward-looking infrared (FLIR) with electro-optical and infrared (EO/IR) capabilities; EO/IR cabin monitoring systems; EO/IR digital video recorder; AN/ARC-201D RT-1478D (or future replacement); Enhanced Ballistic Armor Protection Systems (EBAPS); Internal Auxiliary Fuel Tank Systems (IAFTS); Fast Rope Insertion & Extraction System (FRIES); External Rescue Hoist (ERH); rescue hoist equipment sets; Dual Patient Litter System (DPLS) Sets; Martin Baker palletized Crew Chief/Gunner seats with crashworthy floor structural modifications; External Stores Support System (ESSS); Integrated Tow Plates Production Assets; universal software loading kits; 60k volt-ampere (VA) generator kits; instrument panel sets; external gun mount systems; Black Hawk Aircrew Trainer (BAT); Black Hawk Maintenance Trainer (BHMT-M); Black Hawk Avionics Trainer; Maintenance Blended Reconfigurable Avionics Trainer (MBRAT); training devices; helmets; transportation; organizational equipment; spare and repair parts; support equipment; tools and test equipment; technical data and publications; personnel training and training equipment; U.S. government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support.
https://www.dsca.mil/press-media/major-arms-sales/croatia-uh-60m-black-hawk-helicopters-0
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DSCA Notifies Congress Of Potential FMS Sale To Türkiye
January 26, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Republic of Türkiye of F-16 Aircraft Acquisition and Modernization and related equipment for an estimated cost of $23.0 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale. The Republic of Türkiye has requested to buy 40 new F-16 aircraft and to modernize 79 existing F-16 aircraft to V-Configuration. The request includes: thirty-two (32) F-16 C Block 70 aircraft; eight (8) F-16 D Block 70 aircraft; forty-eight (48) F110-GE-129D engines (40 installed, 8 spares); one hundred forty-nine (149) Improved Programmable Display Generators (iPDG) (40 installed, 10 spares, 99 for modernization program (79 installed, 20 spares)); one hundred forty-nine (149) AN/APG-83 Active Electronically Scanned Array (AESA) Scalable Agile Beam Radars (SABR) (40 installed, 10 spares, 99 for modernization program (79 installed, 20 spares)); one hundred sixty-nine (169) Modular Mission Computers (MMC) 7000AHC (or available mission computer) (40 installed, 10 spares, 119 for modernization program (79 installed, 40 spares)); one hundred fifty nine (159) Embedded Global Positioning System (GPS) Inertial Navigation Systems (INS) (EGI) with Selective Availability Anti-Spoofing Module (SAASM) or M-Code capability and Precise Positioning Service (PPS) (40 installed, 8 spares, 111 for modernization program (79 installed, 32 spares)); one hundred sixty-eight (168) Integrated Viper Electronic Warfare Suite (IVEWS) or equivalent Electronic Warfare (EW) systems (40 installed, 10 spares, 118 for modernization program (79 installed, 39 spares)); eight hundred fifty-eight (858) LAU-129 guided missile launchers; forty-four (44) M61 Vulcan cannons (40 installed, 4 spares); sixteen (16) AN/AAQ-33 Sniper Advanced Targeting Pods (ATP); one hundred fifty-one (151) Multifunctional Information Distribution System-Joint Tactical Radio Systems (MIDS-JTRS) (40 installed and 4 ground terminals, 8 spares, and 99 for modernization program (79 installed and 4 ground terminals, 16 spares)); nine hundred fifty-two (952) Advanced Medium Range Air-to-Air Missiles (AMRAAM) AIM-120C-8 or equivalent missiles; ninety six (96) AMRAAM guidance sections; eight hundred sixty-four (864) GBU-39/B Small Diameter Bombs Increment 1 (SDB-1); two (2) GBU-39(T-1)/B SDB-1 guided test vehicles; two (2) GBU-39(T-1)/B SDB-1 practice bombs; ninety-six (96) AGM-88B High-Speed Anti-Radiation Missiles (HARM); ninety-six (96) AGM-88E Advanced Anti-Radiation Guided Missiles (AARGM); ten (10) AARGM Captive Air Training Missiles (CATM); eleven (11) AARGM control sections; twelve (12) AARGM guidance sections; four hundred one (401) AIM-9X Block II Sidewinder missiles; twelve (12) AIM-9X Block II Sidewinder Captive Air Training Missiles (CATMs); forty (40) AIM-9X Block II Sidewinder tactical guidance units; twelve (12) AIM-9X Block II Sidewinder CATM guidance units; twelve (12) MK82 Inert Filled general purpose bombs; eight hundred fifty (850) Joint Direct Attack Munition (JDAM) KMU-556 tail kits for GBU-31; two hundred (200) JDAM KMU-557 tail kits for GBU-31v3; three hundred eighty-four (384) JDAM KMU-559 tail kits for GBU-32; three (3) JDAM KMU-572 tail kits for GBU-38 or Laser JDAM GBU-54; one thousand fifty (1,050) FMU-152 fuzes. Also included are AMRAAM CATMs; AIM-9X Sidewinder training missiles and Active Optical Target Detectors (AOTD); HARM control sections, rocket motors, and warhead spares; FMU-139 Joint Programmable Fuzes; DSU-38 Laser Guidance Sets for GBU-54; missile containers; AN/ARC-238 radios; AN/APX-127 or equivalent Advanced Identification Friend or Foe (AIFF) Combined Interrogator Transponders (CIT) with mode 5; Joint Helmet Mounted Cueing Systems (JHMCS) II or Scorpion Hybrid Optical-based Inertial Tracker (HObIT) helmet mounted displays; Infrared Search and Track (IRST) pods; AN/ALE-47 Countermeasure Dispenser Systems (CMDS); KY-58 and KIV-78 cryptographic devices; Simple Key Loaders (SKLs); additional secure communications, precision navigation, and cryptographic equipment; Flight Mission Planning Systems (FMPS); Remote Operated Video Enhanced Receivers (ROVER) 6i/6Sis; Tactical Network ROVER kits, and STINGER Multi Bi-Directional (MBI) antennas; SNIPER pod pylons; impulse cartridges, chaff, flares, and ammunition; bomb components and Common Munitions Built-in-Test Reprogramming Equipment (CMBRE); Rackmount Improved Avionics Intermediate Shop (RIAIS); Cartridge Actuated Devices/Propellant Actuated Devices (CAD/PAD); Triple Missile Launcher Adapters (TMLA); aircraft, avionics, and weapons integration, test support, and equipment; major modernization upgrade kits for F-16 Block 40 and Block 50+ aircraft and Service Life Extension Program (SLEP) modifications; aircraft and engine repair and refurbishment after maintenance; engine and aircraft spare and repair parts, consumables, and accessories and repair and return support; aircraft, engine, ground, and pilot support equipment; Classified/Unclassified Computer Program Identification Number (CPIN) systems; electronic warfare database support; pylons, launcher adaptors, weapon interfaces, bomb and ejection racks, conformal fuel tanks, and travel pods; precision measurement equipment laboratory and calibration support; Classified/Unclassified software and software support; Classified/Unclassified publications, manuals, and technical documentation; maps and mapping data; facilities and construction support; simulators and training devices; personnel training and training equipment; U.S. Government and contractor engineering, technical and logistics support services, studies and surveys; and other related elements of logistical and program support.
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DSCA Notifies Congress Of Potential FMS Sale To Greece
January 26, 2024: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Greece of F-35 Joint Strike Fighter Conventional Take Off and Landing (CTOL) aircraft and related equipment for an estimated cost of $8.6 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale. The Government of Greece has requested to buy up to forty (40) F-35 Joint Strike Fighter Conventional Take Off and Landing (CTOL) aircraft; and forty-two (42) Pratt & Whitney F135-PW-100 engines (40 installed, 2 spares). Also included are AN/PYQ-10 Simple Key Loaders; KGV-135A embedded secure communications devices; Cartridge Actuated Devices/Propellant Actuated Devices (CAD/PAD); impulse cartridges, chaff, and flares; Full Mission Simulators and system trainers; electronic warfare systems and Reprogramming Lab support; logistics management and support systems; threat detection, tracking, and targeting systems; Contractor Logistics Support (CLS); classified software and software development, delivery and integration support; transportation, ferry, and refueling support; weapons containers; aircraft and munitions support and support equipment; integration and test support and equipment; aircraft engine component improvement program (CIP) support; secure communications, precision navigation, and cryptographic systems and equipment; Identification Friend or Foe (IFF) equipment; spare and repair parts, consumables, and accessories, and repair and return support; minor modifications, maintenance, and maintenance support; personnel training and training equipment; classified and unclassified publications and technical documents; warranties; and U.S. Government and engineering, technical, and logistics support services, studies, and surveys; and other related elements of logistics and program support.
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Michael Vaccaro Named The New Deputy Assistant Secretary of State for Defense Trade
January 16, 2024: The Directorate of Defense Trade Controls (DDTC) welcomed Michael Vaccaro, the new permanent Deputy Assistant Secretary of State for Defense Trade. As of Tuesday, January 16, 2024, DAS Vaccaro began overseeing DDTC’s mission to ensure commercial exports of defense articles and defense services advance U.S. national security and foreign policy objectives.
https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_public_portal_news_and_events
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Department of Commerce – Bureau of Industry and Security (BIS)
BIS Published Frequently Asked Questions for “Export Controls on Semiconductor Manufacturing Items” (SME IFR) and “Implementation of Additional Export Controls: Certain Advanced Computing Items; Supercomputer and Semiconductor End Use; Updates and Corrections” (AC/S IFR)
January 2024: The Frequently Asked Questions (“FAQs”) address comments received in response to the “Implementation of Additional Export Controls: Certain Advanced Computing and Semiconductor Manufacturing Items; Supercomputer and Semiconductor End Use” (October 7 IFR)(87 Fed. Reg. 62186, October 13, 2022) and amend the Export Administration Regulations (EAR) to implement export controls on semiconductor manufacturing equipment (SME), advanced computing items, and supercomputers more effectively and to address ongoing national security concerns that items in these rules can be used for military modernization and other applications such as the development and production of weapons of mass destruction (WMD). See the following link for the list of FAQs and answers:
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BIS Increases The Civil Penalty Amount For Inflation
January 15, 2024: 88 Fed. Reg. 89300: Effective on January 15, 2024, the U.S. Department of Commerce, Bureau of Industry and Security adjusted its penalties for violations of Export Controls Act of 2018 (2018), from a maximum of $353,534 to $364,992 pursuant to the 2024 the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.
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BIS Enhances Its Voluntary Self-Disclosure Process
January 16, 2024: Accordingly, to better support industry’s and academia’s compliance efforts and to further
streamline BIS’ internal processes, BIS announced that it was making several key updates
regarding our Voluntary Self-Disclosure (VSD) process.
Manner of Submission
BIS strongly encourages the submission of VSDs via email. Electronic submissions of initial notifications, extension requests, and narrative accounts of disclosure through the email address bisvsdintake@bis.doc.gov will allow BIS to receive, monitor, and track submissions more effectively, thus enabling a quicker and more responsive interface with those making disclosures. The submissions can also be electronically signed. As before, BOS will continue to accept hard-copy, written paper submissions for VSDs, but BIS has made a change to its VSD webpage to encourage parties to provide an email address in any hard-copy submission to allow for more expedient follow-up and response.
Abbreviated Narrative Account of Certain Disclosures
Regarding VSDs that involve only minor or technical infractions, BIS implemented a “fasttrack”
resolution policy on June 30, 2022. Under this dual-track system, VSDs falling under this
category now receive a warning or no-action letter within 60 days of final submission. The current
updates further enhance the “fast-track” resolution policy by adopting an abbreviated “narrative
account” option for the overwhelming majority of VSD submissions.
Specifically, parties disclosing violations where no aggravating factors are present may now
submit an abbreviated narrative account as part of their disclosure. The abbreviated narrative account
should briefly describe the nature of the violations as outlined in Section 764.5(c)(3), but need not
include all of the accompanying documentation outlined in Section 764.5(c)(4), unless specifically
requested by the Office of Export Enforcement (OEE). Additionally, parties submitting such
abbreviated narratives do not need to conduct the full five-year lookback recommended in Section
764.5(c)(3), unless specifically requested by OEE.
If OEE suspects the presence of aggravating factors that are not disclosed, the OEE Director
will request a full narrative account, including the five-year lookback, with accompanying
documentation. For VSDs that involve circumstances with aggravating factors, submitting parties
should continue to conduct a thorough review of all export-related transactions where possible
violations are suspected. In those instances, BIS continues to recommend that the review of the
suspected violations cover a period of up to five years prior to the date of the initial notification,
consistent with Section 764.5(c)(3).
Aggravating factors are addressed in Section IIl(A) of Supplement No. 1 to Part 766. Section 764.5(c)(3) of the EAR outlines the contents of the VSD narrative, which should include:
(i) The kind of violation involved, for example a shipment without the required license or dealing with a party denied export privileges;
(ii) An explanation of when and how the violations occurred;
(iii) The complete identities and addresses of all individuals and organizations, whether foreign or domestic, involved in the activities giving rise to the violations;
(iv) License numbers;
(v) The description, quantity, value in U.S. dollars and ECCN or other classification of the items involved; and
(vi) A description of any mitigating circumstances.”
Section 764.5(c)(4)(ii) reads: “Any relevant documents not attached to the narrative account must be retained by the person making the disclosure until OEE requests them, or until a final decision on the disclosed information has been made. After a final decision, the documents should be maintained in accordance with the recordkeeping rules in part 762 of the EAR.”
Parties should continue to note, however, that, as explained in Section 764.5(c)(3), “[a]ny violations not voluntarily disclosed do not receive consideration under this section.”
What Makes a Violation Significant?
Many apparent violations are minor or technical ones, the result of a good-faith misinterpretation or the checking of a wrong box on a form. If no aggravating factors are present, BIS will generally consider these violations minor and address them through the “fast track” for resolution. Resolutions for minor violations include either a no-action determination letter or a warning letter. In contrast, significant violations are those involving aggravating factors that may result in an administrative penalty or other action.
In BIS’ April 18, 2023 policy memorandum, BIS noted that parties could bundle multiple minor
or technical violations – i.e., those without aggravating factors – into one overarching submission, if
the violations occurred close in time. Now, BIS’ VSD webpage further clarifies that parties can
bundle these disclosures for submission on a quarterly basis. This clarification will help streamline
the process for minor or technical infractions and help us to more easily fast-track a response.
Treatment of Unlawfully Exported Items
By definition, a party making a voluntary self-disclosure believes that a violation may have
occurred. Therefore, when dealing with an item subject to a VSD, the party making the disclosure is
prohibited from engaging in the activities listed in Section 764.2(e), such as buying, disposing of,
transferring, or storing the item. BIS recognizes that the list of activities prohibited by Section
764.2(e) is an expansive one, and BIS also understand that parties who disclose violations often seek
to take corrective actions. Accordingly, parties may request special permission from BIS to engage
in activities that would otherwise be prohibited by Section 764.2(e).
While these requests must be formally submitted to BIS’ s Office of Exporter Services, the VSD webpage updates notify the regulated community that to help expedite the requests, BIS suggest that courtesy copies of such requests be sent to O EE via email. BIS will then work with the Office of Exporter Services to help expedite its review and analysis of the request to ensure decisions to grant such requests are appropriate, thereby allowing the items to be placed back into the lawful stream of commerce.
In addition, the VSD webpage updates now make clear that any person (i.e., not just a party
submitting a VSD) may notify the OEE Director that a violation has occurred and request permission
from the Office of Exporter Services to engage in otherwise prohibited activities. OEE will consider
such disclosures to have fulfilled the requirements of Section 764.S(f) even when the request does not
disclose a violation by the submitter (assuming there was no violation by the submitter to disclose),
but instead just seeks permission to engage in otherwise prohibited activities.
Furthermore, for parties seeking to return an unlawfully exported item back to the United States from abroad, OEE’s presumptive recommendation will be for BIS to authorize such reexports, regardless of who is seeking such permission.
https://www.bis.doc.gov/index.php/documents/enforcement/3435-vsd-policy-memo-01-16-2024/file
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BIS Deploys Assessment On The Use Of Mature-Node Chips
January 18, 2024: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) is conducting a comprehensive assessment of the use of mature-node semiconductor devices in the supply chains that support—directly or indirectly—U.S. national security and critical infrastructure. The intent of the survey is to identify how U.S. companies are sourcing mature-node semiconductors, also known as legacy chips. This analysis will inform U.S. policy to bolster the semiconductor supply chain, promote a level playing field for legacy chip production, and reduce national security risks posed by the People’s Republic of China (PRC). The assessment was requested by the Secretary of Commerce in response to findings in a Congressionally mandated report released in December 2023 that assessed the capabilities of the U.S. microelectronics industrial base to support U.S. national defense.
The survey will be performed under Section 705 of the Defense Production Act of 1950 to evaluate the extent of, and visibility into, the use of mature-node chips manufactured by PRC-based companies in supply chains of critical U.S. industries like telecommunications, automotive, medical device, and the defense industrial base.
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BIS Strengthens Controls Against Russia And Belarus In Response To Russia’s Continued War Against Ukraine
January 23, 2024: The Commerce Department’s Bureau of Industry and Security (BIS) strengthened its existing controls under the Export Administration Regulations (EAR) against Russia and Belarus in response to the Russian Federation’s (Russia’s) ongoing aggression against Ukraine and Belarus’s complicity in the invasion. This action expands the scope of the EAR’s Russian and Belarusian Industry Sector Sanctions by adding 94 6-digit Harmonized Tariff Schedule (HTS) codes to the list of items requiring a license for export, reexport, or transfer (in-country) to Russia or Belarus.
The expanded list of items includes certain chemicals, lubricants, and metals, and it covers the entirety of Chapter 88 of the HTS (aircraft, spacecraft, and parts thereof), thereby further restricting Russia’s access to inputs for its defense industrial base and better aligning U.S. controls with those implemented by U.S. partners and allies. The rule also expands controls on certain EAR99 antennas, antenna reflectors, and parts thereof to further restrict these items from going to Iran and Russia, including when produced abroad with U.S. technology or software.
This action also removes the lowest-level military and spacecraft-related items (i.e., .y items) from being eligible for de minimis treatment when incorporated into foreign-made items for export from abroad or reexport to Russia or Belarus.
Finally, the new rule makes several clarifying changes, including by adding an exclusion from BIS license requirements in situations involving transactions that are related to deployments by the Armed Forces of Ukraine to or within the temporarily occupied Crimea region of Ukraine and covered regions of Ukraine.
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BIS Published A Notice Of Proposed Rulemaking (NPRM) For Establishing New Requirements For Infrastructure As A Service Providers (Iaas Or “Cloud Infrastructure Providers”)
January 29, 2024: 89 Fed. Reg. 5698: The Department of Commerce (Department) published a notice of proposed rulemaking (NPRM) for establishing new requirements for Infrastructure as a Service providers (IaaS or “cloud infrastructure providers”). The NPRM outlines proposed requirements to address the risk of foreign malicious actors using U.S. cloud services that could be used in malicious cyber-enabled activity to harm U.S. critical infrastructure or national security, including to train large artificial intelligence (AI) models.
This NPRM demonstrates the Biden-Harris Administration’s proactive efforts to address the potential national security risks associated with frontier AI models and the abuse of U.S. cloud infrastructure by malicious actors and is a significant step in implementing the President’s Executive Order (EO) on “Safe, Secure, and Trustworthy Use and Development of Artificial Intelligence” (EO 14110) and the National Cybersecurity Strategy.
The proposed rule introduces potential regulations that require U.S. cloud infrastructure providers and their foreign resellers to implement and maintain Customer Identification Programs (CIPs), which would include the collection of “Know Your Customer” (KYC) information. Similar KYC requirements already exist in other industries and seek to assist service providers in identifying and addressing potential risks posed by providing services to certain customers. Such risks include fraud, theft, facilitation of terrorism, and other activities contrary to U.S. national security interests.
The NPRM also authorizes the imposition of certain special measures that can restrict malicious cyber-enabled actors’ access to U.S. IaaS. In this NPRM, the Department seeks feedback on a number of issues, including: minimum verification standards, access, and record-keeping requirements that providers must adopt; the procedures by which the Secretary of Commerce decides when and how to impose a special measure; and the definitions of several key IaaS and AI-related terms as they apply to the regulations. This NPRM incorporates many of the public comments received in response to a September 24, 2021, Advanced Notice of Proposed Rulemaking (ANPRM). That ANPRM sought feedback on how the Department should implement various provisions of EO 13984, “Taking Additional Steps To Address the National Emergency With Respect to Significant Malicious Cyber Enabled Activities.” Based on these comments, the Department has drafted the proposed rule to clarify requirements for the public in ways that are consistent with industry and public understanding of IaaS-related products and services. The deadline for public comments is April 29, 2024.
https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3443-2024-01-29-bis-press-release-infrastructure-as-as-service-know-your-customer-nprm-final/file and https://www.federalregister.gov/documents/2024/01/29/2024-01580/taking-additional-steps-to-address-the-national-emergency-with-respect-to-significant-malicious
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U.S. Census Bureau
The U.S. Census Bureau Updated AES Tables Regarding Schedule B, Harmonized Tariff Schedule (HTS), and HTS Codes That Are Not Valid
January 2, 2024: The Schedule B, Harmonized Tariff Schedule (HTS), and HTS Codes That Are Not Valid for AES tables have been updated to accept the changes to the January 1, 2024 codes.
AES will accept shipments with outdated codes during a grace period for 30 days beyond the expiration date of December 31, 2023. Reporting an outdated code after the 30-day grace period will result in a fatal error.
The ACE program has been updated with the 2024 codes and will accept shipments with outdated codes during the grace period as well.
The 2024 Schedule B and HTS tables are available for downloading at:
http://www.census.gov/foreign-trade/aes/documentlibrary/#concordance
The current list of HTS codes that are not valid for AES are available at:
https://www.census.gov/foreign-trade/aes/documentlibrary/concordance/hts-not-for-aes.txt
Editors tip: Now is the time for exporters to reverify their HTS and Schedule B # classifications to ensure codes used exist in the 2024 tables.
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AES Response Messages Updates
January 17, 2024: When a shipment is filed to the AES, a system response message is generated and indicates whether the shipment has been accepted or rejected. If the shipment is accepted, the AES filer receives an Internal Transaction Number (ITN) as confirmation. Though the shipment is accepted, the filer may still receive a Verify Message, Compliance Alert, Informational Message or Warning Message along with their ITN. However, if the shipment is rejected, a Fatal Error notification is received and must be corrected to receive a valid ITN.
To help you take the appropriate action for the different AES Response Messages, here are some tips on how to address the most frequent messages that were generated in AES for this month.
Response Code: 341
Narrative: Ultimate Consignee Must Be Reported Within 4 Days
Severity: Warning
Reason: The Party Type is C for Ultimate Consignee and the ‘To Be Sold en Route’ indicator is reported as Yes.
Resolution: Incomplete Ultimate Consignee information may be declared on an EEI when a ‘To Be Sold en Route’ declaration has been made. However, the actual Ultimate Consignee must be declared within 4 days of the Estimated Departure Date.
Verify the ‘To Be Sold en Route’ indicator, correct the shipment and resubmit.
Response Code: 8VW
Narrative: Value/Shipping Weight Out of Range
Severity: Verify
Reason: For the reported Schedule B/HTS Number, the Value of Goods/Shipping Weight ratio is outside of the expected range.
Resolution: For a particular Schedule B/HTS Number reported, the value of goods divided by the shipping weight should fall within a certain parameter based on historical statistical averages for that commodity. Ratios outside this pre-determined parameter might indicate either a keying error or misclassification of the product. Verify the Value of Goods, Shipping Weight and Schedule B/HTS Number, correct the shipment and resubmit (if necessary). If the line item is verified correct as reported, no action is necessary.
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Department of the Treasury
Treasury Increases The Civil Penalty Amount For Inflation
January 11, 2024: 89 Fed. Reg. 2139: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended its regulations to implement for 2024 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. This regulatory amendment took effect on Friday, January 12, 2024.
Maximum CMP Amounts For Relevant Statutes
TWEA $105,083 to $108,489;
IEEPA $356,579 to $368,136;
AEDPA $94,127 to $97,178;
FNKDA $1,771,754 to $1,829,177; and
CDTA $16,108 to $16,630.
https://ofac.treasury.gov/recent-actions/20240111 and https://ofac.treasury.gov/media/932506/download?inline
In The News
Nvidia Semiconductors Acquired By Chinese Entities Despite US Ban
January 15, 2024: Chinese government and military-linked institutions – including AI research institutes and universities – have reportedly succeeded in acquiring Nvidia semiconductors over the past year, skillfully evading stringent export bans by the US. As detailed in comprehensive tender documents reviewed by Reuters, this revelation underscores the complexities surrounding the U.S.-China technological landscape and raises questions about the efficacy of export controls.
The acquisitions, involving small quantities of Nvidia semiconductors, were not facilitated by Nvidia itself or its approved retailers, but rather by lesser-known Chinese suppliers. Notably, the procured Nvidia chips include the A100, H100, A800, and H800 models, all of which were subject to U.S. export bans implemented in the last two years. The U.S. export bans targeted specific Nvidia chips with potential military applications, aiming to curtail China’s access to advanced technologies. Despite these targeted measures, the tender documents reviewed by Reuters indicate a successful circumvention of these restrictions, bringing to light the challenges faced by the United States in imposing comprehensive controls on semiconductor exports.
The list of purchasers includes not only elite universities but also entities subject to U.S. export restrictions, such as the Harbin Institute of Technology and the University of Electronic Science and Technology of China. The procurement of Nvidia chips by these entities, accused of involvement in military matters, showcases the multifaceted nature of this technological landscape. It is noteworthy that none of the entities mentioned in the Reuters review responded to requests for comment. The acquisition of Nvidia chips, renowned for their prowess in AI applications, enhances China’s potential breakthroughs in AI. This, in turn, could contribute to the development of sophisticated computing systems with military applications. The use of these semiconductors may bolster China’s AI capabilities, posing challenges to U.S. technological dominance in this critical field.
LATEST FINES, PENALTIES AND SANCTIONS
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.
Fines and Penalties
January 2, 2024: The New Hampshire charity NuDay, a/k/a NuDay Syria, was sentenced in federal court for export offenses. NuDay was sentenced to five years of probation, the maximum penalty for an organizational defendant. NuDay was also ordered to pay a $25,000 fine. On September 8, 2023, NuDay pleaded guilty to three counts of Failure to File Export Information. NuDay was founded by Nadia Alawa as a non-profit charity in 2013 and is headquartered in Windham, New Hampshire. Alawa served as NuDay’s President, and several family members served as board members and employees.
Between 2018 and 2021, NuDay made over 100 shipments to Syria, a country that was subject to sanctions and export restrictions. NuDay claimed that these shipments were worth over $100 million. NuDay had the items shipped to Mersin, Turkey, where another company would transship them into Syria. U.S. Department of Commerce regulations require exporters, such as NuDay, to report true and accurate information about the items being exported, including the shipment’s description, end user, and monetary value. However, NuDay falsely reported that the end destination of the shipments was Turkey and not Syria, and artificially deflated the value of the goods to be below the $2,500 reporting threshold. Alawa’s Facebook messages indicated that she and NuDay were aware of export restrictions, including the need to obtain export licenses, but ignored them.
https://www.justice.gov/usao-nh/pr/nuday-charity-sentenced-illegal-exports-syria
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January 3, 2024: Three siblings admitted to buying, transporting and concealing ammunition intended to be smuggled into Mexico. Rolando Herrera, 26, plead guilty to these charges and to another charge of conspiracy to smuggle ammunition with intent to promote a felony. His sisters, Ashley Herrera, 22, and Yamileth Herrera, 21, entered their guilty pleas on Dec. 12, 2023. All are U.S. citizens and maintain residences in Laredo and in Nuevo Laredo, Tamaulipas, Mexico.
Between May 16, 2023, through May 24, 2023, the siblings placed orders at a local sporting goods store for 7,000 rounds of 5.56-millimeter ammunition. Ashley placed the first order of 3,000 rounds which she and Rolando picked up at the store. Ashley later placed a second order in another person’s name for 3,000 rounds who picked up that ammunition and delivered it to the Herreras’ parents’ home. Yamileth later ordered and picked up 1,000 rounds of ammunition.
Rolando admitted he intended to smuggle the ammunition to persons in Mexico, provided the funds for all purchases and requested his sisters order the ammunition for him.
Ashley transported cartons of 6,000 rounds of ammunition to her parents’ home where she and Yamileth moved them into a bedroom where it remained concealed until Rolando would pick it up to smuggle to Mexico.
Law enforcement intercepted Yamileth Herrera who was in possession of 1,000 rounds she had just purchased.
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January 8, 2024: A U.S. Navy service member, Petty Officer Wenheng Zhao, 26, aka Thomas Zhao (Zhao) was sentenced to 27 months in prison and ordered to pay a $5,500 fine for transmitting sensitive U.S. military information to an intelligence officer from the People’s Republic of China (PRC) in exchange for bribery payments.
According to court documents, Zhao pleaded guilty in October 2023 to one count of conspiring with the intelligence officer and one count of receiving a bribe.
Zhao, who worked at Naval Base Ventura County in Port Hueneme and held a U.S. security clearance, engaged in a corrupt scheme to collect and transmit sensitive U.S. military information to the intelligence officer in violation of his official duties.
Between August 2021 and at least May 2023, Zhao received at least $14,866 in at least 14 separate bribe payments from the intelligence officer. In exchange for the illicit payments, Zhao secretly collected and transmitted to the intelligence officer sensitive, non-public information regarding U.S. Navy operational security, military trainings and exercises, and critical infrastructure. Zhao entered restricted military and naval installations to collect and record this information.
Zhao transmitted plans for a large-scale maritime training exercise in the Pacific theatre, operational orders and electrical diagrams and blueprints for a Ground/Air Task Oriented Radar system located in Okinawa, Japan.
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January 18, 2024: Ilya Kahn, 66, a citizen of the United States, Israel and Russia, and resident of Brooklyn, New York, and Los Angeles, California, was arrested on January 17, 2024, in Los Angeles for his alleged involvement in a years-long scheme to secure and unlawfully export sensitive technology from the United States for the benefit of a Russian business. The business was sanctioned by the U.S. government following Russia’s unprovoked invasion of Ukraine in February 2022 and whose clients included elements of the Russian military and the Federal Security Service (FSB), the main successor agency to the Soviet Union’s KGB.
According to court documents, Kahn is charged by criminal complaint with conspiracy to violate the Export Control Reform Act (ECRA). Kahn will make his initial appearance in the Central District of California.
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January 18, 2024: Jalal Hajavi (Hajavi) was sentenced to 24 months in prison followed by three years of supervised release for criminal conduct in connection with a scheme to unlawfully export heavy equipment from the United States to Iran by routing the shipments though the United Arab Emirates (UAE).
Hajavi was convicted by a jury in September 2023, of conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR), smuggling, and unlawfully exporting and reexporting goods from the United States to Iran without a license.
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January 25, 2024: 89 Fed. Reg. 4901: The Bureau of Industry and Security (“BIS”), U.S. Department of Commerce, through its Office of Export Enforcement (“OEE”), renewed the temporary denial order (“TDO”) issued against Venezuela-based cargo airline Empresa de Transporte Aéreocargo del Sur, S.A., a/k/a Aerocargo del Sur Transportation Company, a/k/a EMTRASUR (“EMTRASUR”) on July 25, 2023 for a period of 180 days on the ground that issuance of the order was necessary in the public interest to prevent an imminent violation of the Regulations.
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January 30, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) imposed a civil penalty of $153,175 against Wabtec Corporation (Wabtec), a global manufacturer and supplier of rail technology headquartered in Pittsburgh, Pennsylvania, to resolve 43 violations of the antiboycott provisions of the Export Administration Regulations (EAR) (antiboycott regulations) alleged in BIS’s Proposed Charging Letter. Wabtec voluntarily disclosed the conduct to BIS, cooperated with the investigation by BIS’s Office of Antiboycott Compliance (OAC), and took remedial measures after discovering the conduct at issue, which resulted in a significant reduction in the penalty.
As part of the BIS settlement, Wabtec admitted to the conduct set forth in a Proposed Charging Letter, which alleged 43 violations of Section 760.5 of the EAR (Failing to Report the Receipt of a Request to Engage in a Restrictive Trade Practice or Foreign Boycott Against a Country Friendly to the United States). Specifically, between February 2018 and July 2022, on forty-three occasions, Wabtec received a request from a customer in Pakistan to refrain from importing Israeli-origin goods into Pakistan in fulfillment of its orders. Wabtec failed to report to BIS the receipt of these requests, as required by Section 760.5 of the EAR, thereby giving rise to the 43 alleged violations.
https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3444-antiboycott-1-30-2024/file and https://efoia.bis.doc.gov/index.php/documents/antiboycott/alleged-antiboycott-violations-2024/1591-a773/file
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January 31, 2024: Four Chinese nationals were charged in an indictment in the District of Columbia with various federal crimes related to a years-long conspiracy to unlawfully export and smuggle U.S.-origin electronic components from the United States to Iran.
According to court documents, Baoxia Liu, aka Emily Liu; Yiu Wa Yung, aka Stephen Yung; Yongxin Li, aka Emma Lee; and Yanlai Zhong, aka Sydney Chung, unlawfully exported and smuggled U.S. export controlled items through China and Hong Kong ultimately for the benefit of entities affiliated with the Islamic Revolutionary Guard Corps (IRGC) and Ministry of Defense and Armed Forces Logistics (MODAFL), which supervises Iran’s development and production of missiles, weapons, and military aerial equipment to include Unmanned Aerial Vehicles (UAVs).
According to the indictment, beginning as early as May 2007 and continuing until at least July 2020, the defendants utilized an array of front companies in the People’s Republic of China (PRC) to funnel dual-use U.S.-origin items, including electronics and components that could be utilized in the production of UAVs, ballistic missile systems, and other military end uses, to sanctioned Iranian entities with ties to the Islamic Revolutionary Guard Corps (IRGC) and Ministry of Defense and Armed Forces Logistics (MODAFL) such as Shiraz Electronics Industries (SEI), Rayan Roshd Afzar, and their affiliates.
The defendants are charged with conspiring to violate the International Emergency Economic Powers Act (IEEPA), violating IEEPA, smuggling goods from the United States, and one count of submitting false or misleading export information. If convicted, the defendants face a maximum penalty of 20 years in prison for violating the IEEPA; up to 10 years in prison for smuggling goods from the United States; and up to five years in prison for each count of conspiracy and submitting false or misleading export information. Arrest warrants have been issued for Liu, Yung, Li and Zhong who all remain fugitives.
Sanctions
U.S. Department of State
January 17, 2024: The Department of State announced the designation of Ansarallah, commonly referred to as the Houthis, as a Specially Designated Global Terrorist group, effective 30 days from January 17, 2024.
Since November, the Houthis have launched unprecedented attacks against international maritime vessels in the Red Sea and Gulf of Aden, as well as military forces positioned in the area to defend the safety and security of commercial shipping. These attacks against international shipping have endangered mariners, disrupted the free flow of commerce, and interfered with navigational rights and freedoms. This designation seeks to promote accountability for the group’s terrorist activities. If the Houthis cease their attacks in the Red Sea and Gulf of Aden, the United States will reevaluate this designation.
The Houthis must be held accountable for their actions, but it should not be at the expense of Yemeni civilians. As the Department of State moves forward with this designation, it is are taking significant steps to mitigate any adverse impacts this designation may have on the people of Yemen. During the 30-day implementation delay, the U.S. government will conduct robust outreach to stakeholders, aid providers, and partners who are crucial to facilitating humanitarian assistance and the commercial import of critical commodities in Yemen. The Department of the Treasury is also publishing licenses authorizing certain transactions related to the provision of food, medicine, and fuel, as well as personal remittances, telecommunications and mail, and port and airport operations on which the Yemeni people rely.
https://www.state.gov/terrorist-designation-of-the-houthis/
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U.S. Department of Commerce, Bureau of Industry and Security (BIS)
January 25, 2024: 89 Fed. Reg. 4804: In response to the Russian Federation’s (Russia’s) ongoing aggression against Ukraine and Belarus’s complicity in the invasion, the Department of Commerce is strengthening its existing sanctions under the Export Administration Regulations (EAR) against Russia and Belarus, including by expanding the scope of the EAR’s Russian and Belarusian Industry Sector Sanctions and making certain changes to the licensing requirements that apply to the occupied Crimea region of Ukraine as well. Additionally, this rule revises recent restrictions targeting Iran’s supply of Unmanned Aerial Vehicles to Russia. This rule also refines certain existing export controls on Russia and Belarus. The Department of Commerce is taking these actions to enhance the effectiveness of its controls on these countries and to better align them with those implemented by U.S. allies and partners.
This rule revises the EAR to enhance and strengthen the existing sanctions against Russia and Belarus by expanding the scope of the Russian and Belarusian industry sector sanctions to better align them with the controls that have been implemented by U.S. allies and partners imposing substantially similar controls on Russia and Belarus, including a control added on Iran pursuant to the Iran UAV rule, that targeted Iran’s supply of UAVs to Russia (88 FR 12150, February 27, 2023) (Iran UAVs rule). For similar policy reasons, this rule also refines other controls on Russia and Belarus that were imposed in response to Russia’s February 2022 further invasion of Ukraine.
This rule enhances and strengthens the sanctions that have been implemented on Russia, Belarus, the occupied Crimea region of Ukraine, and Iran under the EAR, as described under sections A and B below. The regulatory revisions described under Section A. Imposition of new export controls on Russia, Belarus, and Iran, including changes to align controls with those imposed by U.S. allies and partners include:
- Expansion of Russian and Belarusian Industry Sector Sanctions that apply to items listed in supplement no. 4 to part 746 to add additional items to align with controls imposed by U.S. partners and allies and to make other changes to render the EAR’s controls stronger, more effective, and easier to understand; Expansion of items that require a license under §746.7 when destined to Iran and under §746.8 when destined to Russia or Belarus under supplement no. 7 to part 746 to add an additional item to align with controls imposed by U.S. partners and allies and to make other changes to render the EAR’s controls stronger, more effective, and easier to understand; and
- Eliminating the lowest-level military and spacecraft-related items (i.e., .y items) from being eligible for de minimis treatment when incorporated into foreign-made items for export from abroad or reexport to Russia or Belarus. A. Imposition of New Export Controls on Russia, Belarus, and Iran, Including Changes To Align Controls With Those Imposed by U.S. Allies and Partners.
This rule expands the scope of the Russian and Belarusian Industry Sector Sanctions (§746.5 of the EAR) by adding additional items to supplement no. 4 to part 746 that will require a license under §746.5(a)(1)(ii), as described further below. This rule also adds an additional item to supplement no. 7 to part 746 that will require a license under §746.7 when destined to Iran and under §746.8 when destined to Russia or Belarus.
https://www.bis.doc.gov/index.php/documents/regulations-docs/federal-register-notices/federal-register-2024/3442-89-fr-4804-russian-and-belarus-sanctions-rule-effective-1-23-24-and-published-1-25-24/file and https://www.bis.doc.gov/index.php/regulations/federal-register-notices#89FR4804
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Department of the Treasury, Office of Foreign Assets Control (OFAC)
January 11, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) updated its Specially Designated Nationals and Blocked Persons List:
The following individual have been added to OFAC’s SDN List:
- Mikheychik, Vladimir Vladimirovich of Russia.
The following entities have been added to OFAC’s SDN List:
- Ashuluk Firing Range of Russia; and
- Vladimirovka Advanced Weapons And Research Complex of Russia.
The following aircraft have been added to OFAC’s SDN List:
- RF-78757; Aircraft Manufacture Date 27 Apr 1988; Aircraft Mode S Transponder Code 1533A5; Aircraft Model IL-76MD; Aircraft Manufacturer’s Serial Number (MSN) 83484547; Aircraft Tail Number RF-78757;
- RF-82011; Aircraft Manufacture Date 31 Dec 1986; Aircraft Mode S Transponder Code 15405B; Aircraft Model AN-124; Aircraft Manufacturer’s Serial Number (MSN) 9773054616023; Aircraft Tail Number RF-82011; and
- RF-86898; Aircraft Manufacture Date 28 Jan 1982; Aircraft Mode S Transponder Code 155372; Aircraft Model IL-76; Aircraft Manufacturer’s Serial Number (MSN) 23435028; Aircraft Tail Number RF-86898.
https://ofac.treasury.gov/recent-actions/20240111
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January 12, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two companies in Hong Kong (PRC) and the United Arab Emirates for shipping Iranian commodities on behalf of the network of Iran-based, Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF)-backed Houthi financial facilitator Sa’id al-Jamal. OFAC is also identified four vessels as blocked property in which these companies have an interest. The revenue from the commodity sales supports the Houthis and their continued attacks against international shipping in the Red Sea and the Gulf of Aden.
These action is being taken pursuant to the counterterrorism authority in Executive Order (E.O.) 13224, as amended. Sa’id al-Jamal was designated pursuant to E.O. 13224, as amended, on June 10, 2021 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the IRGC-QF. The IRGC-QF was designated pursuant to E.O. 13224 on October 25, 2007 for providing support to multiple terrorist groups.
The following entities have been added to OFAC’s SDN List:
- Cielo Marine LTD of China; and
- Global Tech Marine Services Inc of the Marshall Islands and the United Arab Emirates.
The following vessels have been added to OFAC’s SDN List:
- Fortune Galaxy (3E2520) Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9257010; MMSI 352001505;
- Mehle (3E3893) Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9191711; MMSI 352002537;
- Molecule (TJMC241) Crude Oil Tanker Cameroon flag; Vessel Registration Identification IMO 9209300; MMSI 613003214; and
- Sincere 02 (3E4733) Oil Products Tanker Kiribati flag; Vessel Registration Identification IMO 9226011; MMSI 352002984.
https://home.treasury.gov/news/press-releases/jy2022 and https://ofac.treasury.gov/recent-actions/20240112
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January 16, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Venezuela-related General License 5N “Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After April 16, 2024.”
Venezuela-related General License 5N: On or after April 16, 2024, 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 16, 2024, General License No. 5M, dated October 18, 2023, is replaced and superseded in its entirety by this General License No. 5N.
https://ofac.treasury.gov/media/932511/download?inline and https://ofac.treasury.gov/recent-actions/20240116
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January 17, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing a new Counter Terrorism-related Frequently Asked Question (1158).
Frequently Asked Question (1158): On January 17, 2024, the Department of State (State) announced the designation of Ansarallah under Executive Order (E.O.) 13224, as amended, effective February 16, 2024. What will be the impact of this action? What steps are the U.S. government taking to ensure that commercial goods and humanitarian assistance continues to flow to the Yemeni people?
Answer: Following the designation of Ansarallah (commonly referred to as “the Houthis”) under E.O. 13224, as amended, on February 16, 2024, OFAC will add the group to the List of Specially Designated Nationals and Blocked Persons (SDN List) as a Specially Designated Global Terrorist. As a result of the designation, transactions by U.S. persons or within (or transiting) the United States involving Ansarallah will be blocked, unless they are otherwise authorized. Note that Yemen is not subject to jurisdiction-based sanctions, nor will it become subject to jurisdiction-based sanctions on February 16, 2024.
In order to ensure that the humanitarian aid community and commercial actors can continue providing humanitarian aid and commercial goods in Yemen, on January 17, 2024, OFAC issued five general licenses (GLs) to authorize certain categories of transactions, including: (1) agriculture, medicine, and medical devices; (2) telecommunications mail, and certain internet communications; (3) personal remittances; (4) refined petroleum products (including fuel); and (5) operation and use of ports and airports for import of goods. These GLs will take effect on February 16, 2024, the same date on which the designation will take effect.
The above GLs supplement broad preexisting humanitarian GLs in the Global Terrorism Sanctions Regulations (GTSR) covering the United States government, certain international organizations and entities, nongovernmental organizations (NGOs), and for the provision of food, other agricultural commodities, medicine, and medical devices. For more information on these baseline humanitarian general licenses, please consult OFAC’s Supplemental Guidance for the Provision of Humanitarian Assistance, and FAQs 1105, 1106, 1107, and 1108. Other humanitarian-related guidance documents are available in the NGO section of OFAC’s Information for Industry Groups webpage. OFAC also intends to issue further public guidance specifically related to the Ansarallah designation on or before February 16, 2024.
Non-U.S. persons may engage in or facilitate transactions for which a U.S. person would not require a specific license pursuant to the GTSR without exposure to sanctions under the GTSR or E.O. 13224, as amended.
https://ofac.treasury.gov/recent-actions/20240117_33 and https://ofac.treasury.gov/faqs/1106
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January 17, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Alberto Pimentel Mata (Pimentel) for his role in exploiting the Guatemalan mining sector through widespread bribery schemes, including schemes related to government contracts and mining licenses. Pimentel is being designated pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world. This action follows the Department of State’s October 2023 announcement of visa restriction on Pimentel and other individuals for their involvement in significant corruption.
Corrupt and anti-democratic acts undermine Guatemala’s public institutions and threaten the stability of Guatemala and the region as a whole. This action demonstrates the U.S. government’s continued commitment to promote accountability for corrupt and undemocratic actors in Guatemala and expands upon the Administration’s efforts to address corruption as a root cause of irregular migration through the northern Central America region.
The following individual has been added to OFAC’s SDN List:
- Pimentel Mata, Alberto of Guatemala.
https://home.treasury.gov/news/press-releases/jy2024 and https://ofac.treasury.gov/recent-actions/20240117
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January 17, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued issuing Counter Terrorism General License 22, “Transactions Related to the Provision of Agricultural Commodities, Medicine, Medical Devices, Replacement Parts and Components, or Software Updates Involving Ansarallah,” General License 23, “Authorizing Transactions Related to Telecommunications Mail, and Certain Internet-Based Communications Involving Ansarallah,” General License 24, “Authorizing Noncommercial, Personal Remittances Involving Ansarallah,” General License 25, “Authorizing Transactions Related to Refined Petroleum Products in Yemen Involving Ansarallah,” and General License 26, “Authorizing Certain Transactions Necessary to Port and Airport Operations Involving Ansarallah.”
General License 22: All transactions prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), involving Ansarallah, or any entity in which Ansarallah owns, directly or indirectly, a 50 percent or greater interest, that are ordinarily incident and necessary to the provision (including sale) of agricultural commodities, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices to Yemen, or to persons in third countries purchasing specifically for provision to Yemen, are authorized.
For the purposes of this general license, agricultural commodities, medicine, and medical devices are defined as follows:
(1) Agricultural commodities. Agricultural commodities are products that:
(i) Fall within the term “agricultural commodity” as defined in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602); and
(ii) Are intended for ultimate use in Yemen as:
(A) 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);
(B) Seeds for food crops;
(C) Fertilizers or organic fertilizers; or
(D) Reproductive materials (such as live animals, fertilized eggs, embryos, and semen) for the production of food animals.
(2) Medicine. 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. 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).
This General License takes effect February 16, 2024.
https://ofac.treasury.gov/media/932516/download?inline
General License 23: All transactions prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), involving Ansarallah, or any entity in which Ansarallah owns, directly or indirectly, a 50 percent or greater interest, with respect to the receipt or transmission of telecommunications to, from, or in Yemen are authorized.
https://ofac.treasury.gov/media/932521/download?inline
General License 24: All transactions prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), involving Ansarallah, or any entity in which Ansarallah owns, directly or indirectly, a 50 percent or greater interest, that are ordinarily incident and necessary to the transfer of noncommercial, personal remittances to or from an individual in Yemen, are authorized, provided the individual is not a person whose property or interests in property are blocked pursuant to the GTSR.
Noncommercial, personal remittances do not include charitable donations of funds to or for the benefit of an entity or funds transfers for use in supporting or operating a business, including a family-owned business.
Transferring institutions may rely on the originator of a funds transfer with regard to compliance, provided that the transferring institution does not know or have reason to know that the funds transfer is not in compliance.
https://ofac.treasury.gov/media/932526/download?inline
General License 25: All transactions prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), involving Ansarallah, or any entity in which Ansarallah owns, directly or indirectly, a 50 percent or greater interest, that are ordinarily incident and necessary to the provision (including sale) of refined petroleum products for personal, commercial, or humanitarian use in Yemen are authorized.
https://ofac.treasury.gov/media/932531/download?inline
General License 26: All transactions prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), involving Ansarallah, or any entity in which Ansarallah owns, directly or indirectly, a 50 percent or greater interest, that are ordinarily incident and necessary to the operation of, or import or export of goods or transit of passengers through, ports and airports in Yemen are authorized.
https://ofac.treasury.gov/media/932536/download?inline and https://ofac.treasury.gov/recent-actions/20240117
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January 18, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is taking its first oil price cap enforcement action of 2024, targeting a shipping company linked to a price cap violation.
The United States is part of an international coalition of countries (the Price Cap Coalition), including the G7, the European Union, and Australia, that have committed to prohibit the import of crude oil and petroleum products of Russian Federation origin. These countries, home to many best-in-class financial and professional services, have also committed to restrict a broad range of services related to the maritime transport of crude oil and petroleum products of Russian Federation origin (“Russian oil”)—unless that Russian oil is bought and sold at or below the specific price caps established by the Coalition or is authorized by a license. This policy is known as the “price cap.” The price cap is intended to maintain a reliable supply of crude oil and petroleum products to the global market while reducing the revenues the Russian Federation earns from oil after its own war of choice against Ukraine inflated global energy prices.
The following entity has been added to OFAC’s SDN List:
- Hennesea Holdings Limited of the United Arab Emirates.
The following vessels have been added to OFAC’s SDN List:
- Aristo (5LJI7) Chemical/Products Tanker Liberia flag; Vessel Registration Identification IMO 9327413; MMSI 636022549;
- Hai II (D5HH9) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9259599; MMSI 636016693;
- HS Arge (5LIK5) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9299745; MMSI 636022360;
- HS Buraq (5LIK9) Products Tanker Liberia flag; Vessel Registration Identification IMO 9381732; MMSI 636022364;
- HS Esberg (5LIN6) Products Tanker Liberia flag; Vessel Registration Identification IMO 9410894; MMSI 636022386;
- HS Everett (5LIP7) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9410870; MMSI 636022403;
- HS Glory (D5OH4) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9249087; MMSI 636018127;
- HS Legend (5LIK7) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9381744; MMSI 636022362;
- HS Star (D5RV6) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9274446; MMSI 636018885;
- LA Pride (5LHW6) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9274616; MMSI 636022251;
- Mona (5LIS6) Chemical/Oil Tanker Liberia flag; Vessel Registration Identification IMO 9314818; MMSI 636022424;
- Nellis (5LJI8) Chemical/Oil Tanker Liberia flag; Vessel Registration Identification IMO 9322267; MMSI 636022550;
- Osperous (5LHE4) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9412995; MMSI 636022098;
- Peria (5LIZ6) Crude Oil Tanker Liberia flag; Vessel Registration Identification IMO 9322827; MMSI 636022479;
- Sara II (5LJI4) Chemical/Oil Tanker Liberia flag; Vessel Registration Identification IMO 9301615; MMSI 636022546;
- Sensus (5LHJ7) Products Tanker Liberia flag; Vessel Registration Identification IMO 9296585; MMSI 636022146; and
- UZE (5LHB3) Chemical/Oil Tanker Liberia flag; Vessel Registration Identification IMO 9323338; MMSI 636022072.
https://home.treasury.gov/news/press-releases/jy2028 and https://ofac.treasury.gov/recent-actions/20240118
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January 18, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 13H, “Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024,” and Russia-related General License 86, “Authorizing Limited Safety and Environmental Transactions Involving Certain Persons or Vessels Blocked on January 18, 2024.” OFAC is also amending Frequently Asked Question 1157.
Russia-related General License 13H: U.S. persons, or entities owned or controlled, directly or indirectly, by a U.S. person, are authorized to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations, certifications, or tax refunds to the extent such transactions are prohibited by Directive 4 under Executive Order 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation, provided such transactions are ordinarily incident and necessary to the day-to-day operations in the Russian Federation of such U.S. persons or entities, through 12:01 a.m. eastern daylight time, April 17, 2024.
https://ofac.treasury.gov/media/932541/download?inline
Russia-related General License 86: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to one of the following activities involving the blocked persons described below are authorized through 12:01 a.m. eastern daylight time, April 17, 2024, provided that any payment to a blocked person must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations (RuHSR):
(1) The safe docking and anchoring in port of any vessels in which any person or entity listed in this general license has a property interest (“blocked vessels”);
(2) The preservation of the health or safety of the crew of any of the blocked vessels; or
(3) Emergency repairs of any of the blocked vessels or environmental mitigation or protection activities relating to any of the blocked vessels.
The authorization of this general license applies to Hennesea Holdings Limited (Hennesea) and any entity in which Hennesea owns, directly or indirectly, a 50 percent or greater interest.
https://ofac.treasury.gov/media/932546/download?inline
Frequently Asked Question 1157: For the purposes of the determination of December 22, 2023 pursuant to Executive Order (E.O.) 14068, as amended by E.O. 14114 of December 22, 2023, (Seafood Determination) what is meant by the terms “salmon,” “cod,” “pollock,” and “crab”?
Answer: For the purposes of the Seafood Determination, OFAC anticipates publishing regulations defining these terms to include articles defined at the following Harmonized Tariff Schedule of the United States (HTSUS) subheadings:
- “Salmon:” articles defined at HTSUS subheadings 0302.13.0013, 0302.13.0014, 0302.13.0022, 0302.13.0032, 0302.13.0042, 0302.13.0053, 0302.13.0054, 0302.13.0062, 0302.14.0003, 0302.14.0004, 0302.14.0062, 0303.11.0000, 0303.12.0012, 0303.12.0022, 0303.12.0032, 0303.12.0052, 0303.12.0062, 0303.13.0000, 0303.91.4040, 0304.41.00, 0304.41.0010, 0304.41.0020, 0304.41.0090, 0304.52.00, 0304.52.0010, 0304.52.0015, 0304.52.0020, 0304.52.0090, 0304.81.1000, 0304.81.5010, 0304.81.5090, 0305.20.4020, 0305.41.0000, 0305.69.4000, 1604.11.2020, 1604.11.2030, 1604.11.2090, 1604.11.4010, 1604.11.4020, 1604.11.4030, 1604.11.4040, 1604.11.4050, including any subsequent revisions to the list of HTSUS classifications.
- “Cod:” articles defined at HTSUS subheadings 0302.51.0010, 0302.51.0090, 0303.63.0010, 0303.63.0090, 0304.44.0010, 0304.44.0015, 0304.53.0010, 0304.53.0015, 0304.71.1000, 0304.71.5000, 0304.95.1010, 0304.95.1015, 0304.95.1020, 0305.32.0010, 0305.32.0090, 0305.51.0000, 0305.62.0010, 0305.62.0025, 0305.62.0030, 0305.62.0045, 0305.62.0050, 0305.62.0060, 0305.62.0070, 0305.62.0080, including any subsequent revisions to the list of HTSUS classifications.
- “Pollock:” articles defined at HTSUS subheadings 0302.55.1100, 0302.55.5000, 0302.59.5010, 0303.67.0000, 0304.44.0025, 0304.53.0025, 0304.75.1000, 0304.75.5000, 0304.79.1010, 0304.94.1005, 0304.94.1010, 0304.94.1090, 0304.94.9000, 0304.95.1030, 0305.69.1022, 0305.69.1042, 1604.19.1000, 1604.19.2500, including any subsequent revisions to the list of HTSUS classifications.
- “Crab:” articles defined at HTSUS subheadings 0306.14.2000, 0306.14.40, 0306.14.4003, 0306.14.4006, 0306.14.4009, 0306.14.4012, 0306.14.4015, 0306.14.4020, 0306.14.4030, 0306.14.4090, 0306.33.2000, 0306.33.4000, 0306.93.2000, 0306.93.4000, 1605.10.0510, 1605.10.0590, 1605.10.2010, 1605.10.2022, 1605.10.2025, 1605.10.2030, 1605.10.2051, 1605.10.2059, 1605.10.2090, 1605.10.4002, 1605.10.4005, 1605.10.4010, 1605.10.4015, 1605.10.4025, 1605.10.4030, 1605.10.4035, 1605.10.4040, 1605.10.6010, 1605.10.6090, including any subsequent revisions to the list of HTSUS classifications.
Additionally, these terms apply to products of salmon, cod, pollack and crab classified under the HTSUS subheadings 0301.99.0390, 0302.59.1100, 0304.95.1005, 0304.95.1090, 0304.99.1104, 0304.99.1109, 0304.99.1183, 0305.20.4065, 0305.39.6180, 0305.49.4020, 0305.49.4045, 0305.59.0001, 0305.72.0000, 0305.79.0000, 1603.00.9090, 1604.19.2200, 1604.19.3200, 1604.19.4100, 1604.19.5100, 1604.19.6100, 1604.19.8200, 1604.20.0510, 1604.20.0590, 1604.20.1000, 1604.20.1500, 1604.20.2000, 1604.20.2500, 1604.20.3000, 1604.20.4000, 1604.20.5010, 1604.20.5090, 1604.20.6010, 1604.20.6090, including any subsequent revisions to the list of HTSUS classifications.
https://ofac.treasury.gov/faqs/1157 and https://ofac.treasury.gov/recent-actions/20240118
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January 19, 2024: OFAC released the first video in its “OFAC Basics” video series. The OFAC Basics: Sanctions List Search video provides viewers with a brief tutorial on how to use OFAC’s Sanctions List Search Tool and recommended steps for assessing a potential match to one of OFAC’s published sanctions lists. The “OFAC Basics” series serves as a companion series to the “Introduction to OFAC” series.
https://www.youtube.com/watch?v=aQAb7Cf6keI and https://www.youtube.com/watch?v=A1QAv7eNgVo
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January 22, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Counter Terrorism General License 27, “Authorizing Civil Aviation Safety and Wind Down Transactions Involving Fly Baghdad.” OFAC is also issuing one new Counter Terrorism Frequently Asked Question (1159).
Counter Terrorism General License 27: All transactions prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), that are ordinarily incident and necessary to the provision, exportation, or reexportation of goods, technology, or services to ensure the safety of civil aviation involving Fly Baghdad are authorized through 12:01 a.m. eastern daylight time, March 22, 2024, provided that the goods, technology, or services that are provided, exported, or reexported are for use on aircraft operated solely for civil aviation purposes.
All transactions prohibited by the GTSR that are ordinarily incident and necessary to the wind down of any transaction involving Fly Baghdad are authorized through 12:01 a.m. eastern daylight time, March 22, 2024, provided that any payment to Fly Baghdad must be made into a blocked account in accordance with the GTSR.
This general license does not authorize any transactions otherwise prohibited by the GTSR, including transactions involving any person blocked pursuant to the GTSR other than Fly Baghdad, unless separately authorized.
https://ofac.treasury.gov/media/932556/download?inline
Counter Terrorism Frequently Asked Question 1159: What transactions does Global Terrorism Sanctions Regulations (GTSR) General License (GL) 27 authorize?
Answer: Wind down transactions: GL 27 authorizes all transactions prohibited by the GTSR that are ordinarily incident and necessary to the wind down of any transaction involving Fly Baghdad through 12:01 a.m. eastern daylight time, March 22, 2024, provided that any payment to Fly Baghdad must be made into a blocked account in accordance with the GTSR. This includes transactions necessary to wind down leases, refueling contracts, and other commercial agreements with Fly Baghdad or to repossess aircraft leased to Fly Baghdad.
U.S. persons are not required to seek a license from OFAC to initiate legal proceedings against Fly Baghdad, including lawsuits for the repossession of aircraft from Fly Baghdad, although a specific license is required to enter into a settlement or enforce an order transferring property blocked pursuant to the GTSR.
Civil aviation safety transactions: GL 27 authorizes all transactions prohibited by the GTSR that are ordinarily incident and necessary to the provision, exportation, or re-exportation of goods, technology, or services to ensure the safety of civil aviation involving Fly Baghdad through 12:01 a.m. eastern daylight time, March 22, 2024, provided that the goods, technology, or services are for use on aircraft operated solely for civil aviation purposes. This includes transactions necessary to ensure the safety of aircraft crew and passengers and the safe operation of aircraft owned or operated by Fly Baghdad and used solely for civil aviation purposes, including maintenance, insurance, and ground services ordinarily incident and necessary to such activities.
U.S. and non-U.S. persons may need to obtain a license from the Department of Commerce’s Bureau of Industry and Security (BIS) for the export or reexport or certain items subject to the Export Administration Regulations (EAR) involving Fly Baghdad or other Specially Designated Global Terrorists (SDGTs).
https://ofac.treasury.gov/faqs/1159
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January 22, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Iraqi airline Fly Baghdad and its CEO for providing assistance to the Islamic Revolutionary Guard Corps–Qods Force (IRGC-QF) and its proxy groups in Iraq, Syria, and Lebanon. OFAC is also designating three leaders and supporters of one of the IRGC-QF’s main Iran-aligned militias in Iraq, Kata’ib Hizballah (KH), as well as a business that moves and launders funds for KH. This action underscores the ongoing threat the IRGC-QF and its proxy network pose to U.S. personnel and the region. KH has carried out a series of sharply escalating drone and missile attacks against U.S. personnel in Iraq and Syria since Hamas’s horrific attack on Israel on October 7. KH and other Iran-aligned militia groups in Iraq have consistently issued statements in support of Hamas’s terrorism and declared their commitment to attacking U.S. personnel.
This action is being taken pursuant to Executive Order (E.O.) 13224, as amended, which targets terrorists and their supporters. The Treasury Department designated the IRGC-QF as a Specially Designated Global Terrorist (SDGT) pursuant to E.O. 13224 on October 25, 2007 for providing support to multiple terrorist groups, and the Department of State designated the group as a Foreign Terrorist Organization (FTO) pursuant to the Immigration and Nationality Act on April 8, 2019. State designated KH as an SDGT pursuant to E.O. 13224 and as a FTO pursuant to the Immigration and Nationality Act on July 2, 2009.
OFAC has updated its Specially Designated Nationals and Blocked Persons List:
The following individuals have been added to OFAC’s SDN List:
- Al-Azzawi, Riyadh Ali Hussein of Iraq;
- Al-Hamidawi, Awqad Muhsin Faraj of Iraq;
- Al-‘Ibudi, Hossein Moanes of Iraq;
- Al-Shabbani, Basheer Abdulkadhim Alwan of Iraq;
- Hirzallah, Muhammad Fallah Kamil of Palestine;
- Hirzallah, Na’im Kamil Raghib of Palestine;
- Hirzallah, Salah Kamil Raghib of Palestine;
- Hirzallah, Samir ‘Abd Al-Mu’in ‘Abd of Palestine;
- Hirzallah, Thair Abd Al Raziq Shukri of Israel;
- Shamlakh, Ahmed of Palestine;
- Shamlakh, Alaa of Turkey and Palestine;
- Shamlakh, Imad Younes of Palestine; and
- Shamlakh, Zuhair of Palestine.
The following entities have been added to OFAC’s SDN List:
- Al-Markaziya Li-Siarafa of Palestine and Turkey;
- Al-Massal Land Travel And Tourism Company of Iraq;
- Arab China Trading Company of Turkey;
- Fly Baghdad Airlines Company of Iraq;
- Herzallah Exchange And General Trading Company LLC of Palestine; and
- Samir Herzallah And Brothers For Money Exchange And Remittances of Palestine.
The following aircraft have been added to OFAC’s SDN List:
- YI-BAF; Aircraft Model B 737; Aircraft Operator Fly Baghdad; Aircraft Manufacturer’s Serial Number (MSN) 32412; Aircraft Tail Number YI-BAF; and
- YI-BAN; Aircraft Model B 737; Aircraft Operator Fly Baghdad; Aircraft Manufacturer’s Serial Number (MSN) 35064; Aircraft Tail Number YI-BAN.
https://ofac.treasury.gov/recent-actions/20240122 and https://home.treasury.gov/news/press-releases/jy2037
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January 23, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC), in coordination with Australia and the United Kingdom, designated Alexander Ermakov (Ermakov), a cyber actor who played a pivotal in the 2022 ransomware attack against Medibank Private Limited, an Australian healthcare insurer.
Australia sanctioned Ermakov for utilizing ransomware to attack the Medibank network and for the exfiltration of sensitive data of 9.7 million users of Medibank services. The United States and the United Kingdom, in solidarity with Australia, are taking action against the same individual because of the similar risk presented by this actor to the United States and the UK.
This action demonstrates that the United States stands with our partners to disrupt ransomware actors who victimize the backbone of our economies and critical infrastructure. Ransomware attacks against healthcare firms, which are frequent targets of ransomware attacks in the United States, present risks to patient care, safety, and sensitive personally identifiable data. Russia continues to provide a safe haven to ransomware actors like Ermakov, enabling cyber actors to freely perpetrate ransomware attacks and other malicious cyber activities from Russia. In addition, Russia has also enabled ransomware attacks by cultivating and co-opting criminal hackers. Treasury has previously stressed that Russia must take concrete steps to prevent cyber criminals from freely operating in its jurisdiction.
The following individual has been added to OFAC’s SDN List:
Ermakov, Aleksandr of Russia.
https://home.treasury.gov/news/press-releases/jy2041 and https://ofac.treasury.gov/recent-actions/20240123
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January 25, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on key officials of the forces of Ansarallah, commonly known as the Houthis, for their support to acts of terrorism targeting commercial shipping. This action targets four individuals who have supported the Houthis’ recent attacks against commercial vessels in the Red Sea and Gulf of Aden, including holding civilian crews hostage. Concurrent with OFAC’s designations, the United Kingdom is also imposing sanctions on these key figures of Houthi forces.
On January 17, 2024, the U.S. Department of State announced the designation of Ansarallah as a Specially Designated Global Terrorist (SDGT), effective February 16, 2024. This OFAC designation of Houthi forces officials, taken in advance of the effective date of the designation of Ansarallah, serves to further promote accountability for the group’s recent terrorist attacks. Individuals targeted are being designated pursuant to Executive Order (E.O.) 13224, as amended, which targets terrorist groups, their supporters, and those who aid acts of terrorism.
The following individuals have been added to OFAC’s SDN List:
- Al-Atifi, Mohamed of Yemen;
- Al-Nabi, Muhammad Fadl Abd of Yemen;
- Al-Qadiri, Muhammad Ali of Yemen; and
- Al-Talibi, Muhammad Ahmad of Yemen.
https://home.treasury.gov/news/press-releases/jy2048 and https://ofac.treasury.gov/recent-actions/20240125
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January 29, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Venezuela-related General License 43A, “Authorizing the Wind Down of Transactions Involving CVG Compania General de Mineria de Venezuela CA.”
Venezuela-related General License 43A: All transactions that are ordinarily incident and necessary to the wind down of any transaction involving CVG Compania General de Mineria de Venezuela CA (Minerven), or any entity in which Minerven owns, directly or indirectly, a 50 percent or greater interest, that are prohibited by Executive Order (E.O.) 13850, as amended by E.O. 13857, or E.O. 13884, each as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized through 12:01 a.m. eastern standard time, February 13, 2024.
This general license does not authorize any transactions otherwise prohibited by the VSR, including any transactions involving any person blocked pursuant to the VSR other than the blocked persons described in this general license, Government of Venezuela persons blocked solely pursuant to E.O. 13884, Banco Central de Venezuela, or Banco de Venezuela SA Banco Universal.
https://ofac.treasury.gov/recent-actions/20240129_33 and https://ofac.treasury.gov/media/932561/download?inline
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January 29, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets
Control (OFAC) and the United Kingdom took joint action against a network of individuals that targeted Iranian dissidents and opposition activists for assassination at the direction of the Iranian regime. The network is led by Iranian narcotics trafficker Naji Ibrahim Sharifi-Zindashti (Zindashti) and operates at the behest of Iran’s Ministry of Intelligence and Security (MOIS). Zindashti’s network has carried out numerous acts of transnational repression including assassinations and kidnappings across multiple jurisdictions in an attempt to silence the Iranian regime’s perceived critics. The network has also plotted operations in the United States. This action was taken in conjunction with the unsealing of an indictment by the Department of Justice and the Federal Bureau of Investigation. The United Kingdom is also designating Mohammad Reza Ansari, who was previously designated by OFAC.
This action was taken pursuant to Executive Order (E.O.) 13553, which authorizes sanctions on certain persons with respect to serious human rights abuses by the Government of Iran. The MOIS was designated pursuant to E.O. 13553 on February 16, 2012 for being responsible for or complicit in the commission of serious human rights abuses against the Iranian people since June 12, 2009. The MOIS was also concurrently designated pursuant to the counterterrorism authority, E.O. 13224, for its support to multiple terrorist groups, including Hizballah, Hamas, and Al-Qa’ida, and pursuant to E.O. 13572, an authority that targets those responsible for human rights abuses in Syria, for its support to the Syrian General Intelligence Directorate.
OFAC also used powerful tools to protect the Iraqi and international financial system from abuse by terrorist financiers, fraudsters, and money launderers. OFAC issued a finding and notice of proposed rulemaking (NPRM) that identifies Al-Huda Bank, an Iraqi bank that serves as a conduit for terrorist financing, as a foreign financial institution of primary money laundering concern. Along with its finding, the Financial Crimes Enforcement Network (FinCEN) proposed a rule that would sever the bank from the U.S. financial system by prohibiting domestic financial institutions and agencies from opening or maintaining a correspondent account for or on behalf of Al-Huda Bank. In addition, the Office of Foreign Assets Control (OFAC) is imposing sanctions on the bank’s owner.
Al-Huda Bank and its foreign sponsors, including Iran and its proxy groups, divert funds that could otherwise support legitimate business and the economic aspirations of the Iraqi people. These bad actors fuel violence that threatens the stability of Iraq and the lives of U.S. and Iraqi citizens alike. Treasury remains committed to its longstanding shared work with the Government of Iraq to strengthen the Iraqi economy and protect both the U.S. and Iraqi financial systems from abuse.
The following individuals have been added to OFAC’s SDN List:
- Al-Moussawi, Hamad of Iraq;
- Asan, Nihat Abdul Kadir of Iran and Turkey;
- Esfanjani, Ali of Iran;
- Hamidiravari, Reza of Iran;
- KOCAK, Abdulvahap of Turkey;
- Kocak, Ali of Turkey;
- Naserzadeh, Muhammad Reza of Iran;
- Oztunc, Ekrem Abdulkerym of Iran;
- Pearson, Adam Richard of Canada;
- Ryan, Damion Patrick John of Canada;
- Sharifi-Zindashti, Naji Ibrahim of Iran; and
- Tamarzadeh Zavieh Jakki, Shahram Ali Reza of Iran.
https://home.treasury.gov/news/press-releases/jy2052 and https://home.treasury.gov/news/press-releases/jy2053 and https://ofac.treasury.gov/recent-actions/20240129
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January 30, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two cybersecurity experts affiliated with the Islamic State of Iraq and Syria (ISIS) for providing ISIS leadership and supporters with cybersecurity training, enabling their use of virtual currency, and supporting the terrorist group’s recruitment. Additionally, OFAC designated an ISIS financial facilitator involved in transferring funds to ISIS-affiliated individuals in Syria.
These actions reinforce the United States’ commitment to the mission of the Counter ISIS Finance Group (CIFG), a working group of the Global Coalition to Defeat ISIS comprising over 80 countries and international organizations. These designations also coincide with the 19th meeting of the CIFG to discuss the disruption of ISIS financing networks worldwide.
The following individuals have been added to OFAC’s SDN List:
- Al-Sayyid, Sarah Jamal Muhammad of Egypt;
- Guzel, Faruk of Turkey; and
- Salim, Mu’min al-Mawji Mahmud of Egypt.
https://home.treasury.gov/news/press-releases/jy2056 and https://ofac.treasury.gov/recent-actions/20240130
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January 31, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned three entities and one individual located in Lebanon and Türkiye for providing critical financial support to an Iranian Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and Hizballah financial network. These entities have generated hundreds of millions of dollars’ worth of revenue from selling Iranian commodities, including to the Syrian government. These commodity sales provide a key source of funding for the IRGC-QF and Hizballah’s continued terrorist activities and support to other terrorist organizations throughout the region.
OFAC also sanctioned three entities for their role in undermining the peace, security, and stability of Sudan. These designations signal the continued commitment of the United States to identify and isolate funding sources for both the Sudanese Armed Forces (SAF) and the Rapid Support Forces (RSF), the two main belligerent parties responsible for the conflict in Sudan.
OFAC also designated two entities closely associated with Burma’s military regime, as well as four cronies, pursuant to Executive Order (E.O.) 14014. OFAC has coordinated this sanctions action to include individuals and entities that were previously designated by Canada’ on October 31, 2023.
Based on the above, OFAC has updated its Specially Designated Nationals and Blocked Persons List:
The following individuals have been added to OFAC’s SDN List:
- Al-‘Uwayr, Ibrahim Talal of Turkey and Syria;
- Htet, Theint Win of Burma;
- Kyaw, Win Paing of Burma;
- Min, Tin Latt of Burma; and
- Zaw, Thein Win of Burma.
The following entities have been added to OFAC’s SDN List:
- Al-Fakher Advanced Works CO. LTD. of Sudan;
- Alkhaleej Bank CO LTD of Sudan;
- Hydro Company For Drilling Equipment Rental of Lebanon;
- Mira Ihracat Ithalat Petrol Urunleri Sanayi Ticaret Limited Sirketi of Turkey;
- Myanma Five Star Line Company Limited of Burma;
- Shwe Byain Phyu Group of Companies of Burma;
- Yara S.A.L. Offshore Company of Lebanon; and
- Zadna International Co For Investment LTD of Sudan.
https://home.treasury.gov/news/press-releases/jy2065 and https://home.treasury.gov/news/press-releases/jy2066 and https://home.treasury.gov/news/press-releases/jy2067 and https://ofac.treasury.gov/recent-actions/20240131
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January 31, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issued Burma General License 6, “Authorizing the Wind Down of Transactions Involving Shwe Byain Phyu Group of Companies.”
Burma General License 6: All transactions prohibited by the Burma Sanctions Regulations, 31 CFR part 594 (BuSR), that are ordinarily incident and necessary to the wind down of any transaction involving Shwe Byain Phyu Group of Companies (SBPG) or any entity in which SBPG owns, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern standard time, March 1, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the BuSR.
This general license does not authorize any transactions otherwise prohibited by the BuSR, including transactions involving any person blocked pursuant to the BuSR other than the blocked persons described in this general license, unless separately authorized.
https://ofac.treasury.gov/recent-actions/20240131 and https://ofac.treasury.gov/media/932566/download?inline